21Vianet Jumps as Online Usage Surges: China Overnight

21Vianet Group Inc. (VNET), China’s largest independent web data-center operator, posted the biggest two-week rally since June on speculation revenue will jump to a record amid a surge in the nation’s Internet use.

Shares of the Beijing-based company rose 9.1 percent to $26.08 last week and touched an all-time high on Feb. 20. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. added 1.4 percent. E-House China Holdings Ltd. (EJ), a real-estate brokerage, gained the most since December. Semiconductor Manufacturing International Corp. (981) tumbled 25 percent as its revenue outlook fell short of analyst estimates.

The number of Chinese Internet subscribers has soared sevenfold since 2004 to 618 million, according to data compiled by China Internet Network Information Center through the end of last year. 21Vianet, which stores data for 2,000 customers including Tencent Holdings Ltd., China’s biggest Internet company, and video websites owner Youku Tudou Inc., will report next month a 28 percent surge in 2013 revenue, according to the average of analysts’ estimates compiled by Bloomberg.

“These big companies will be the beneficiaries of the fast growth of Internet use in China,” Brendan Ahern, the New York-based managing director of Krane Fund Advisers LLC, said in an interview at Bloomberg’s headquarters in New York Feb. 21. “As the companies report, we’d expect the strong growth tendencies to be validated.”

Sales at 21Vianet jumped to $1.96 billion last year, the highest since at least 2008, according to the average estimate of at least seven analysts compiled by Bloomberg. The company, which offers Internet hosting services and licenses Microsoft Corp.’s cloud products, is scheduled to report earnings March 6.

Temasek, Kylin

Temasek Holdings Pte, Singapore’s state-owned investment firm, bought 6.67 million American depositary receipts of 21Vianet worth $157 million, a Feb. 14 filing showed. Kylin Management LLC reported last month a stake of about 5 percent in the company.

E-House rallied 12 percent to $13.94 last week. The gain helped trim a slump this year to 7.6 percent.

Semiconductor International, a chip foundry based in Shanghai and known as SMIC, dropped to $3.98, the lowest price in six weeks. Both JPMorgan Chase & Co. and BNP Paribas SA cut their recommendations for the stock.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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