UPDATE: Credit Suisse Initiates 21Vianet Group at Outperform; Beneficiary of Rising Internet Volumes

Credit Suisse initiated coverage on 21Vianet Group (NASDAQ: VNET) with an Outperform rating and a $13.50 price target.

Credit Suisse commented, "Internet volumes in China are set to rise dramatically, in our view, due to rising fixed line broadband penetration, smartphone penetration and use per smartphone, as well as growth of cloud computing. The shift towards video increases demand for hosting, as well as other services such as CDN (content delivery network) services. 21 Vianet benefits directly from rising Internet volumes, as it generates revenue from website hosting and delivering content to end-users. 21 Vianet has built good scale and, after a dip in EBITDA margins in FY12, we expect an upward trend from FY13."

21 Vianet Group closed at $9.64 on Friday.

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