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VNET Group, Inc. Sponsored ADR (VNET)
NASDAQ:VNET
RESEARCH TOOLSreports
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VNET Group, Inc. Sponsored ADR
(NASDAQ:VNET)
Rating:67Neutral
Price Target:
$10.00
▲(10.99%Upside)
Positive Factors
Business Expansion
Wholesale IDC revenue surged 87% year-over-year, driven by strong AI demand, indicating rapid expansion in the wholesale business.
Financial Performance
VNET reported a 26% year-over-year increase in adjusted EBITDA, demonstrating strong financial performance.
Shareholder Returns
The company announced its US$50 million share repurchase program, which should provide share-price support.
Negative Factors
Asset Monetization
Management expects to raise Rmb2bn from a REITs project, aiding in asset monetization efforts.
Market Valuation
VNET is trading at ~9x FY26 CitiE EV/EBITDA, which is still undemanding, considering its robust growth trajectory ahead.
VNET Group, Inc. Sponsored ADR (VNET) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.36B
Dividend YieldN/A
Average Volume (3M)6.70M
Price to Earnings (P/E)149.0
Beta (1Y)1.40
Revenue Growth13.93%
EPS GrowthN/A
CountryUS
Employees2,581
SectorTechnology
Sector Strength93
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.02
Shares Outstanding263,895,600
10 Day Avg. Volume9,041,263
30 Day Avg. Volume6,698,826
Financial Highlights & Ratios
PEG Ratio-6.47
Price to Book (P/B)2.78
Price to Sales (P/S)0.00
P/FCF Ratio-6.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.03Price Target Upside55.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
VNET Group, Inc. Sponsored ADR Business Overview & Revenue Model
Company DescriptionVNET Group, Inc. Sponsored ADR (VNET) is a leading carrier-neutral internet data center services provider in China. The company provides hosting and related services, including cloud services, to a wide variety of business sectors. Its core products and services revolve around data center services, cloud services, and managed network services, supporting the digital transformation needs of enterprises by delivering reliable and scalable infrastructure solutions.
How the Company Makes MoneyVNET Group, Inc. generates revenue primarily through its comprehensive suite of data center services, which includes colocation, managed hosting, and cloud services. The company earns money by offering space, power, and cooling in its data centers to customers needing to host servers and other IT equipment. Additionally, VNET provides value-added services such as managed network services and cloud-based solutions, enhancing its revenue streams. Significant partnerships with technology providers and enterprises contribute to its earnings by expanding service capabilities and customer reach. Furthermore, VNET capitalizes on the growing demand for digital infrastructure in China, driven by the increasing adoption of cloud computing and the internet of things (IoT), which bolsters its revenue growth.
VNET Group, Inc. Sponsored ADR Earnings Call Summary
Earnings Call Date:May 28, 2025
(Q1-2025)
| % Change Since: 49.17%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Positive
The earnings call highlighted robust growth in wholesale IDC business and strong financial performance, driven by new orders and AI demand. Despite short-term impacts from the H20 chip embargo and high CapEx requirements, the company remains confident in sustained demand and future growth potential.Q1-2025 Updates
Positive Updates
Strong Wholesale IDC Business Growth
Wholesale capacity in service grew 18.1% quarter over quarter to 573 megawatts, and wholesale revenues reached a new record high of RMB 673 million, representing an 86.5% year-over-year growth.
Record Utilization Rates
Wholesale capacity utilized grew 23.9% quarter over quarter to 437 megawatts, with a utilization rate increase of 3.6 percentage points to 76.2%.
Robust Financial Performance
Total net revenues increased by 18.3% year over year to RMB 2.25 billion, and adjusted EBITDA increased by 26.4% year over year to RMB 682 million.
Successful New Orders and AI Demand
Secured new wholesale and retail orders, including a 6-megawatt wholesale order and 4 megawatts in retail orders, driven by AI and intelligent applications.
Strong Liquidity and Financing
Issued $430 million of convertible senior notes and secured a RMB 500 million sustainability-linked loan.
ESG Achievements
Total energy usage from renewable sources increased fivefold, accounting for 18% of total resources, and achieved top ESG ratings.
Negative Updates
Impact of H20 Chip Embargo
Short-term impact on demand from hyperscale clients due to the U.S. embargo on H20 chips, although demand has since adjusted.
High CapEx Requirements
CapEx for 2025 is expected to be between RMB 10 billion and RMB 12 billion, a substantial increase to support planned capacity deliveries.
Company Guidance
During the first quarter of 2025, VNET Group, Inc. reported substantial growth across various metrics, setting a positive tone for the year. The wholesale IDC business achieved a notable 18.1% increase in capacity in service, reaching 573 megawatts, with a utilization rate improvement to 76.2%. Wholesale revenues soared by 86.5% year over year, totaling RMB 673 million, while adjusted EBITDA rose by 26.4% to RMB 682 million, boasting a margin of 30.4%. The retail IDC business also contributed positively, with a capacity utilization rate of 63.7% and an MRR per retail cabinet of RMB 8,898. Financially, VNET maintained robust liquidity with total cash and cash equivalents of RMB 5.79 billion and strengthened its financing capabilities through a $430 million convertible senior notes issuance and a RMB 500 million sustainability-linked loan. The company reiterated its full-year guidance, expecting total net revenues to range from RMB 9.1 billion to RMB 9.3 billion and adjusted EBITDA between RMB 2.7 billion and RMB 2.76 billion, alongside a capital expenditure plan of RMB 10 billion to RMB 12 billion. Additionally, VNET made notable progress in ESG initiatives, achieving a fivefold increase in renewable energy usage and ranking first among Chinese enterprises in the IT service industry in the S&P Global Sustainability Yearbook.VNET Group, Inc. Sponsored ADR Financial Statement Overview
Summary
VNET Group, Inc. shows solid revenue growth and operational efficiency. However, high leverage and negative free cash flow due to substantial capital expenditures indicate financial risks that require strategic management.Income Statement
VNET Group, Inc. has shown a consistent increase in total revenue over the years, with a TTM (Trailing-Twelve-Months) revenue of 8.6 billion, up from 8.26 billion in the previous annual period. The gross profit margin stands at 23.08%, while the net profit margin is relatively low at 1.54% due to high operating expenses. The EBIT margin is 10.12%, and the EBITDA margin is 28.08%, indicating healthy operational efficiency but also pointing to significant depreciation and amortization charges.65
Positive
Balance Sheet
The company's balance sheet reflects a high debt-to-equity ratio of 3.88, indicating substantial leverage, which could pose financial risk if not managed effectively. However, the equity ratio is 15.90%, showing that a portion of the company's assets is funded by equity. The return on equity (ROE) is modest at 2.15%, suggesting limited returns to shareholders given the level of equity invested.58
Neutral
Cash Flow
The cash flow analysis reveals a negative free cash flow in the TTM period, although operating cash flow remains positive at 1.26 billion. The free cash flow to net income ratio is negative due to substantial capital expenditures, which has put pressure on liquidity. The operating cash flow to net income ratio is favorable at 9.51, indicating that the company generates sufficient cash from operations relative to its net income.45
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.26B | 7.41B | 7.07B | 6.19B | 4.83B |
| Gross Profit | 1.83B | 1.29B | 1.36B | 1.44B | 1.08B |
| EBITDA | 2.22B | -366.56M | 1.24B | 2.27B | -1.21B |
| Net Income | 183.20M | -2.64B | -763.92M | 500.10M | -2.69B |
Balance Sheet | |||||
| Total Assets | 32.36B | 30.39B | 26.95B | 23.10B | 19.37B |
| Cash, Cash Equivalents and Short-Term Investments | 1.55B | 2.60B | 7.66M | 100.02M | 3.00B |
| Total Debt | 18.09B | 17.17B | 14.76B | 11.12B | 8.25B |
| Total Liabilities | 25.44B | 23.87B | 19.97B | 15.49B | 12.48B |
| Stockholders Equity | 6.37B | 6.01B | 6.61B | 7.24B | 6.56B |
Cash Flow | |||||
| Free Cash Flow | -3.12B | -997.15M | -450.61M | -1.35B | -1.79B |
| Operating Cash Flow | 2.01B | 2.06B | 2.60B | 1.39B | 714.24M |
| Investing Cash Flow | -4.39B | -3.91B | -3.56B | -3.77B | -3.89B |
| Financing Cash Flow | -627.65M | 3.94B | 2.30B | 967.58M | 4.16B |
VNET Group, Inc. Sponsored ADR Technical Analysis
Positive
9.01
Price Trends
6.43
Positive
7.42
Positive
6.33
Positive
Market Momentum
0.68
Negative
68.94
Neutral
85.64
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNET, the sentiment is Positive. The current price of 9.01 is above the 20-day moving average (MA) of 7.06, above the 50-day MA of 6.43, and above the 200-day MA of 6.33, indicating a bullish trend. The MACD of 0.68 indicates Negative momentum. The RSI at 68.94 is Neutral, neither overbought nor oversold. The STOCH value of 85.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VNET.
VNET Group, Inc. Sponsored ADR Risk Analysis
VNET Group, Inc. Sponsored ADR disclosed 85 risk factors in its most recent earnings report. VNET Group, Inc. Sponsored ADR reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
VNET Group, Inc. Sponsored ADR Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $76.62B | 23.88 | 29.00% | 2.79% | 3.85% | -0.38% | |
75 Outperform | $262.02B | 48.51 | 21.91% | 2.38% | 1.23% | -33.87% | |
68 Neutral | $7.92B | ― | 0.74% | ― | 9.42% | 99.84% | |
67 Neutral | $2.60B | 6.91 | 12.88% | ― | -5.82% | 469.88% | |
67 Neutral | $2.36B | 148.98 | 2.28% | ― | 13.93% | ― | |
62 Neutral | £519.74M | 22.62 | -8.61% | 2.56% | 4.26% | -25.59% | |
52 Neutral | $2.07B | ― | -126.64% | ― | 9.40% | 13.55% |
* Technology Sector Average
Performance Comparison
VNET
VNET Group, Inc. Sponsored ADR
9.01
6.92
331.10%
INFY
Infosys
18.21
-3.01
-14.18%
IBM
International Business Machines
285.87
108.01
60.73%
GDS
GDS Holdings
37.58
25.94
222.85%
DXC
DXC Technology
14.39
-5.28
-26.84%
BBAI
BigBearai Holdings
7.95
6.47
437.16%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.