Today, $Vnet(VNET.US) and $GDS(GDS.US) experienced significant adjustments. The main reasons investors are focusing on include: 1) Profit-taking effects; 2) Rumors of tighter AI chip restrictions gaining traction; 3) DeepSeek's public disclosure of inference efficiency and costs, where higher cluster utilization leads to lower unit costs.

Typical data center businesses and companies are not involved in computing power leasing. Their order demand and performance are more related to how much capital expenditure internet companies and other clients invest in server purchases, and subsequently, how much server hosting services (i.e., data center leasing demand) are generated. The judgment on whether the IDC market trend can continue essentially depends on whether domestic cloud providers' capital expenditure increases are sustained and whether they allocate orders to third parties rather than building their own facilities.

Regarding value-for-money improvement positions: Based on industry average valuations, GDS at 15x 2025e EV/EBITDA corresponds to a stock price of $31; VNET at 12x 2025e EV/EBITDA corresponds to a stock price of $9.3, both significantly below the industry average.

Regarding support levels: Based on expected REITs valuations, GDS at 13x 2025e EV/EBITDA corresponds to a stock price of $23; VNET at 10x 2025e EV/EBITDA corresponds to $6.7.

Key follow-up items to monitor: 1) GDS earnings call—new domestic and overseas orders, Capex guidance, Day One listing plan, REITs progress; 2) VNET earnings call—new orders for domestic base-type business, utilization expectations for urban-type business, Capex guidance, REITs progress; 3) Tencent's earnings capital expenditure guidance and actual progress in internet companies' capital expenditures; 4) Overall investment sentiment in tech stocks.

(Repost)