VPN - VNET Group: Significant Upside Based On Structural IDC Tailwinds And Government Support

• VNET Group, Inc. is a leading Internet Data Center provider and service company in China.
• The firm offers solutions in three key verticals: Managed Hosting Services (IDC), Cloud Services and VPN Services.
• VNET Group is well-positioned to benefit from multiple strong structural tailwinds, including accelerating enterprise digitalization, increasing demand for data storage and higher cloud-computing workload.
• VNET is also poised to benefit from increasing government support for China's IDC industry.
• Based on a residual earnings valuation, I calculate a base-case target price for VNET of $10.82/share, implying 80% upside potential.

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