Beijing Sinnet Technology (300383.SZ): 2025 Preliminary Results Miss GSe/Consensus on Delayed Customer Move-In and Goodwill Impairment; Sell
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Goldman Sachs reports that Beijing Sinnet Technology (300383.SZ) posted 2025 preliminary results below both Goldman estimates and consensus. Revenue declined 1% year-over-year to RMB 7.17 to 7.22 billion, missing Goldman estimates by 1% and Visible Alpha consensus by 2%. The company reported a net loss of RMB 7.3 to 7.8 billion, sharply below the Goldman-estimated net profit of RMB 2.01 billion and consensus of RMB 2.65 billion, primarily driven by a one-time goodwill impairment and credit loss provision of RMB 891 million in the fourth quarter.
Excluding the impairment, net profit would have been RMB 85 to 135 million, down 71% year-over-year at the midpoint and still 45% below Goldman estimates. The decline stemmed from rapid cabinet delivery outpacing customer move-in, creating cost mismatches. Available cabinets reached 82,000, up 39% and 9% above expectations.
Goldman believes Sinnet may continue losing market share, with industry consolidation benefiting leaders like Buy-rated GDS and VNET. Goldman lowered 2025E revenue and EBITDA by 1% and 5% respectively, trimmed 2026 to 2028E estimates by 0 to 2%, and cut the 12-month target price from RMB 12.3 to RMB 12.0 based on an unchanged 16x EV/EBITDA multiple. The Sell rating is maintained, implying 27% downside from the current price of RMB 16.40.