VNET Group Inc

VNET Group Inc (NASDAQ: VNET) is a holding company that primarily provides carrier- and cloud-neutral data center services, offering a broad suite that includes managed hosting, cloud solutions, and virtual private network (VPN) services.

As per American Tech Report published on ‘VNET’ on Sep 23, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 10.05 based on fundamental analysis and the stock price has now moved up by ~ 13.23% since then.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale:

• Accelerated Wholesale Capacity Monetisation: The wholesale IDC business recorded a sharp increase in capacity utilisation, with capacity in service rising to 783MW (+16.1% QoQ) and utilised capacity reaching 582MW (+13.8% QoQ), translating into a utilisation rate of 74.3%. Faster-than-anticipated customer move-ins materially improve project IRRs and enhance the embedded economic value of operating assets, supporting the recognition of notional profit from revalued operating capacity.
• High-Quality Contracted Revenue Backlog: During 3Q25, VNET secured 63MW of new wholesale orders, followed by an additional 32MW order in 4Q25, primarily from internet and cloud service providers. These long-term, pre-committed contracts substantially reduce demand risk and lock in future cash flows, providing strong justification for notional profit recognition based on contracted backlog visibility.
• Sustained Margin Expansion and EBITDA Growth: Adjusted EBITDA increased 27.5% YoY to RMB758 million, while the EBITDA margin improved to 29.4%, reflecting operating leverage from scale and efficiency gains. Margin expansion alongside revenue growth strengthens the economic valuation of operating assets, supporting notional profit booking on a forward earnings basis.
• Upward Revision to Full-Year Guidance: Management raised FY2025 revenue guidance to RMB9.55–9.87 billion and adjusted EBITDA guidance to RMB2.91–2.95 billion, implying 20–21% YoY EBITDA growth (or 24–26% excluding one-offs). This upward revision reflects higher earnings certainty and validates earlier asset valuations, strengthening the rationale for recognising notional profit.
• Embedded Value in Large-Scale Expansion Pipeline: VNET controls approximately 1.8GW of total wholesale resource capacity, including 306MW under construction and 706MW held for future development. In a supply-constrained IDC market, particularly for AI-optimized data centers, these secured land and power resources represent latent value not yet fully reflected in reported earnings, supporting notional profit recognition on a forward-looking basis.
• Capital Recycling via Private REIT Structures: The company’s scaled private REIT issuances backed by wholesale IDCs mark completion of a closed-loop capital cycle—development, holding, partial exit, and continued operation. Expected valuation multiples higher than prior REITs provide external market validation of asset values, reinforcing the legitimacy of booking notional profit linked to asset revaluation and capital recycling.
• Strong Liquidity and Cash Flow Generation: Net operating cash inflow reached RMB809.8 million in 3Q25, with total cash and equivalents of RMB5.33 billion. Robust liquidity underpins balance sheet strength and enhances confidence in the monetisation of future earnings streams, supporting notional profit recognition without near-term solvency or funding risk.

Valuation (Using EV/EBITDA Multiple)

Share Price Chart  

Conclusion

VNET’s current performance indicates a meaningful uplift in the underlying economic position of the business, supported by faster-than-anticipated utilisation of wholesale capacity, improved visibility from long-term contracted orders, and sustained expansion in operating metrics. During 3Q25, revenue and EBITDA growth were reinforced by stable pricing, efficiency gains, and upward-revised full-year guidance, reflecting stronger near-term earnings clarity. In parallel, the company’s large, secured development pipeline and capital recycling through private REIT structures provide external validation of asset quality and scalability. Together with solid operating cash flows and liquidity, these factors support the recognition of notional value accretion at the company level.

Considering company’s accelerated capacity utilisation, improved earnings visibility, externally validated asset values, and strengthened cash flow profile, a "Sell" recommendation on VNET Group Inc (NASDAQ: VNET) has been given at the closing market price of USD 11.38 as on 12 January 2026.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 12 January 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.