China-based data center service company Chindata Group Holdings Ltd. (NASDAQ:CD) has been trending higher in the past few trading sessions. Speculation over potential asset sales or privatization of the company has been in the news for months. Last week, Bloomberg reported that China Merchants Group Ltd. is contemplating a takeover of Chindata Group.
According to Bloomberg, China Merchants Group is in talks with prospective investors, including infrastructure funds, to support the deal. However, there is no certainty that a deal will come through in the coming days.
Chindata Group is scheduled to release its Q3 results on November 22. Wall Street expects CD to post adjusted earnings of $0.05 per share. Meanwhile, revenue expectations are pegged at $153.73 million, representing year-over-year growth of 31%.
Notably, CD stock has a mixed earnings track record. It has beaten estimates in four out of the preceding eight reported quarters.
The stock has gained only one rating in the past three months. Citigroup assigns a Buy rating to the stock with a price target of $9.30, representing over 55% upside potential.
Concluding Thoughts
Like its Chinese peers, Chindata shares have also shown weakness, losing 33% over the past year, but are now trying to recover. The stock price declined due to China’s crackdown on technology companies as well as growing concerns over the outlook for the Chinese economy.
