VNET Group rated buy on strong data center growth and rising earnings potential.

VNET Group is recommended as a buy due to its large, committed pipeline of data center capacity that is expected to boost earnings growth. The company benefits from secured power resources and established campuses, giving it a competitive edge in supply-limited areas like Beijing. Recent quarterly results showed a 58.1% year-over-year increase in wholesale IDC revenue, along with higher utilization and improved EBITDA margins, indicating strong operational leverage. The price target is around $10.50 per ADS, supported by robust demand, margin improvements, and a closing valuation gap with peers.