VNET Group reinstated with a Neutral at BofA

BofA reinstated coverage of VNET Group (VNET) with a Neutral rating and $3.40 price target. After a sharp correction of about 90% from the peak in January 2021, BofA sees limited downside risks, but more upside risks, for China data center stocks, the analyst tells investors. The firm prefers GDS Holdings GDS over VNET for higher visibility on its wholesale business model, its “promising” overseas expansion and lower financial leverage, the analyst explains.