Wangsu Science & Technology (300017.SZ): Risk Reward Update

Morgan Stanley updated its Risk Reward for Wangsu Science & Technology (300017.SZ). Incorporating 3Q26 results, revenue forecasts for 2026-28E are raised by 4.3%/8.6%/12.1% and GPM forecasts by ~1ppt in 2026-27E (partially offset by non-operating changes), lifting 2026-28E EPS by 3.5%/10.4%/9.0%. The price target is raised 7.3% to Rmb8.8, rolling the EV/EBITDA valuation forward to 2027E at a 10x multiple (from 13x), now in line with global peers such as Akamai. Bull and bear case values are Rmb20.2 (30x 2027E EV/EBITDA) and Rmb6.2 (6x 2027E EV/EBITDA). The stock remains rated Underweight with an In-Line industry view versus the current share price of Rmb15.14, as valuation is much higher than global peers after China's beta rally and the CDN business faces renewed growth and margin challenges with continued gross margin deterioration. Upside risks include meaningful progress in cloud security, subsiding domestic CDN competition amid less cash burn by cloud vendors, and CDN price renego