Jefferies, a global investment banking firm, has increased the price target for VNET Group Inc (NASDAQ: VNET) shares to $7.98, up from the previous target of $6.69. The firm has also maintained a Buy rating on the stock.
The revision follows VNET's second-quarter financial performance for the year 2023, where the company reported a revenue and EBITDA growth of 9.4% and 7.3%, respectively.
These figures surpassed consensus estimates by 3.4% for revenue and 3.9% for EBITDA.
The revenue growth was primarily fueled by an 81% increase in the wholesale segment, despite a 3% decline in the retail segment.
For the first time, VNET achieved a positive net profit in the second quarter, which is expected to enhance the company's ability to secure domestic bank loans.
Additionally, VNET has recently been awarded 235 megawatts (MW) of new wholesale projects in Ulanqab. This win represents a 71% increase in the company's utilized wholesale capacity.
Looking at the long-term prospects, VNET has successfully secured 1.2 gigawatts (GW) of power in Ulanqab.
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