Morgan Stanley maintains an "Overweight" rating on VNET (VNET.US) with a target price of $5.8.

Recently, Morgan Stanley released a report stating that due to the active investment of a super-large company in AI computing, the supply and demand dynamics of IDC in North China will be reversed, and VNET will benefit from it. The report gave VNET (VNET.US) a "buy" rating and a target price of US$5.8.

The report stated that VNET's IDC product portfolio is well matched with the customer's needs in terms of location, scale, scalability, and fast delivery. The company has achieved a significant market share in the past two years. The total new orders signed by the company in the past year are about 300MW, of which more than 90% are used to meet the customer's AI needs. Considering the preferential electricity price and low latency network of the Ulanqab and Huailai bases, the customer's demand is expected to be no less than 2024 in 2025.

Since Shanggao Holding became a strategic shareholder of VNET, VNET has enjoyed more favorable bank loan rates. In addition, the two sides have achieved cooperation in green power projects.