Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is a leading carrier-neutral hyperscale data center solution provider in Asia Pacific emerging markets with a focus on China, India and Southeast Asia.</li>
<li>Bloomberg and several other news media outlets reported that the company has attracted takeover interest from other firms in the industry including rival GDS and PAG.</li>
<li>CD’s shares are down more than 65% since its IPO primarily driven by the ongoing regulatory crackdown on tech firms in China alongside US-China trade tensions.</li>
</ul>



Chindata Group (CD US) is a leading carrier-neutral hyperscale data center solution provider in Asia Pacific emerging markets with a focus on China, India and Southeast Asia.
Bloomberg and several other news media outlets reported that the company has attracted takeover interest from other firms in the industry including rival GDS and PAG.
CD’s shares are down more than 65% since its IPO primarily driven by the ongoing regulatory crackdown on tech firms in China alongside US-China trade tensions.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>According to Bloomberg, Bain Capital-backed <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is being scoped out by industry players.</li>
<li>
<a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a> is rumoured to be interested in merging with Chindata. PE outfit PAG and <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT AB (EQT SS)</a>-backed EdgeConneX are also, reportedly, in the mix.</li>
<li>Chindata's shares popped but are still 64% below its IPO price. This rumour follows data center provider <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet (VNET US)</a>'s recent proposal from Hina Group and Shanghai's Industrial Bank. </li>
</ul>


According to Bloomberg, Bain Capital-backed Chindata Group (CD US) is being scoped out by industry players.

GDS Holdings (ADR) (GDS US) is rumoured to be interested in merging with Chindata. PE outfit PAG and EQT AB (EQT SS)-backed EdgeConneX are also, reportedly, in the mix.
Chindata's shares popped but are still 64% below its IPO price. This rumour follows data center provider 21Vianet (VNET US)'s recent proposal from Hina Group and Shanghai's Industrial Bank. 


Cloud Chronicles: Chindata Attracting Bytes

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>A <a href="https://www.bloomberg.com/news/articles/2022-04-22/bain-backed-chindata-said-to-field-preliminary-takeover-interest" target="_blank" rel="noopener">Bloomberg article</a> claimed that <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is attracting takeover interest from <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a>, PAG and EdgeConneX. Shares rose 9.8% to close at $4.81.</li>
<li>Potential privatisation will require the blessing of Bain Capital, the largest shareholder. Chindata’s track record of beating guidance, modest leverage and the beaten-down rating make it a target. </li>
<li>A forward EV/EBITDA multiple of 8.9x, in line with <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>’s proposed acquisition multiple, would imply $6.85 per ADS. </li>
</ul>


A Bloomberg article claimed that Chindata Group (CD US) is attracting takeover interest from GDS Holdings (ADR) (GDS US), PAG and EdgeConneX. Shares rose 9.8% to close at $4.81.
Potential privatisation will require the blessing of Bain Capital, the largest shareholder. Chindata’s track record of beating guidance, modest leverage and the beaten-down rating make it a target. 
A forward EV/EBITDA multiple of 8.9x, in line with 21Vianet Group (VNET US)’s proposed acquisition multiple, would imply $6.85 per ADS. 


Chindata the Next Chinese ADR Privatisation Target?

<ul>
<li>VNET, formerly known as <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>, is a leading carrier and cloud-neutral data centre services provider in China. </li>
<li>It has received a non-binding privatisation proposal from <a href="https://www.hinagroup.com/" target="_blank" rel="noopener">The Hina Group</a> and <a href="https://www.smartkarma.com/entities/industrial-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:19515:1" rel="noopener">Industrial Bank Co Ltd A (601166 CH)</a> at $8.00 per ADS, a 48.1% premium to the undisturbed price. </li>
<li>The Board has not made any decisions on the offer. Despite the juicy premium, the offer is unattractive in the context of historical multiples and share prices.    </li>
</ul>


VNET, formerly known as 21Vianet Group (VNET US), is a leading carrier and cloud-neutral data centre services provider in China. 
It has received a non-binding privatisation proposal from The Hina Group and Industrial Bank Co Ltd A (601166 CH) at $8.00 per ADS, a 48.1% premium to the undisturbed price. 
The Board has not made any decisions on the offer. Despite the juicy premium, the offer is unattractive in the context of historical multiples and share prices.    


VNET’s Languishing Shares Draws an Opportunistic $8.00 Bid

Equity Bottom-Up

Chindata is a data centre operator. It is the largest carrier-neutral hyperscale data centre operator in Asia-Pacific emerging markets as measured by capacity in service, according to Frost &amp; Sullivan. The MSCI May 2021 review period has just wrapped up, and Chindata is among the stocks with the highest probability of inclusion in the MSCI Standard index and the largest buying impact from passive funds - <a href="https://www.smartkarma.com/insights/msci-may-2021-index-rebalance-preview-let-the-games-begin" target="_blank" data-smartkarma-citation="insights:50473" rel="noopener">MSCI May 2021 Index Rebalance Preview: Let The Games Begin</a>.  <div class="content-highlight">After touching $23.65 per ADS on 26 Feb 2021, Chindata has derated and is down 45% YTD. The last close price of $13.19 per ADS is 2% below the IPO price of $13.50 per ADS. The Asia-Pacific hyperscale data centre market remains a structural growth market in part due to the increasing prevalence of outsourcing data centre services, rising client demand for higher power density, and increasing regulatory requirements on data security. Overall, we think that Chindata remains an attractive play on these favourable market dynamics and the shares are worth a closer look. </div>

Chindata is a data centre operator. It is the largest carrier-neutral hyperscale data centre operator in Asia-Pacific emerging markets as measured by capacity in service, according to Frost &amp; Sullivan. The MSCI May 2021 review period has just wrapped up, and Chindata is among the stocks with the highest probability of inclusion in the MSCI Standard index and the largest buying impact from passive funds - MSCI May 2021 Index Rebalance Preview: Let The Games Begin.  After touching $23.65 per ADS on 26 Feb 2021, Chindata has derated and is down 45% YTD. The last close price of $13.19 per ADS is 2% below the IPO price of $13.50 per ADS. The Asia-Pacific hyperscale data centre market remains a structural growth market in part due to the increasing prevalence of outsourcing data centre services, rising client demand for higher power density, and increasing regulatory requirements on data security. Overall, we think that Chindata remains an attractive play on these favourable market dynamics and the shares are worth a closer look. 

China

Chindata Group Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides carrier-neutral hyperscale data center solutions to analyze, manage, and store data, business systems, and processes. Chindata Group Holdings serves customers worldwide.

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Chindata Group (CD US)

Chindata: Plenty of Upside Left

CD’s shares are down more than 65% since its IPO due to the ongoing regulatory crackdown and our analysis reveals that there is plenty of upside...

Shifara Samsudeen, FCMA, CGMA

Cloud Chronicles: Chindata Attracting Bytes

Although no formal sale process has occurred, Chindata is worth picking up here. Despite regulatory concerns, it is trading too cheaply to peers,...

David Blennerhassett

Chindata the Next Chinese ADR Privatisation Target?

Bloomberg claimed that Chindata is attracting takeover interest from GDS, PAG and EdgeConneX. A forward EV/EBITDA multiple of 8.9x, in line with...

Arun George

VNET’s Languishing Shares Draws an Opportunistic $8.00 Bid

The Hina Group and Industrial Bank Co have offered $8.00 per ADS, a 48.1% premium to the undisturbed price. However, the offer is unattractive in...

Arun George

Chindata Group: Data Centre Value

Chindata is among the stocks with the highest probability of inclusion in the MSCI Standard index but the shares are down 45% YTD. The valuation is...

Arun George

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