There has been a lot of talk around China following Michael Burry, David Teppers and many more super investors calling it a strong bet. Most are all focused on the same names $BABA $BIDU $TME $KWEB $PDD
Whilst these liquid leaders are trading a cheap valuations, continue to perform share buy backs and represent a great value proposition over the next few years, there are many growth names trading far beneath the radar.
One such name is $VNET, a large data centre company in China serving the likes of Alibaba and Tencent. Who’s revenue and profit margins continue to grow despite the negative economic backdrop. Interestingly this name also trades at 1/2 the P/S as Baidu and Alibaba. As the economic backdrop continues to improve it’s likely VNET group continues to capture more market share and continue to grow it’s retail client base.
In fact, it’s not only one of the very few Chinese names growing right now, they Also raised full year 2024 guidance “The Company increased its full year 2024 guidance for total net revenues and adjusted EBITDA. Specifically, the Company now expects total net revenues for 2024 to be between RMB8,000 million to RMB8,100 million representing year-over-year growth of 7.9% to 9.3%, and adjusted EBITDA (non-GAAP) to be in the range of RMB2,280 million to RMB2,300 million, representing year-over-year growth of 11.8% to 12.8%.”
Even if the company were to just trade at the same multiples as the “popular names” it represents around a 100% increase in share price from these levels of $3.92
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