Ulanqab IDC customer inflows hit a record since tracking began

Overview

This report is UBS's monthly data tracking of Ulanqab IDC within China's internet data center industry, primarily using local government-disclosed data center power consumption to infer changes in IDC capacity utilization. In April 2026, Ulanqab data center power consumption reached 574GWh, up 99.3% year over year, corresponding to implied IDC total power net additions of 125MW, the highest monthly level since tracking began.

Core views

The core view is that customer inflows are clearly accelerating. April's 125MW net addition was not only above March's 37MW, but also exceeded the 71MW total net additions in 1Q26; by contrast, 4Q25 saw only 4MW of net additions, when the main constraint was chip supply. UBS believes that chip supply availability may gradually improve after earlier data center tenders from hyperscale cloud providers; with AI and cloud demand remaining resilient and domestic chips ramping faster in 2H26, the subsequent inflow trend should remain supported.

Analysis framework

The report uses a top-down data tracking approach: based on Ulanqab government-disclosed data center power consumption, and combining it with the IDC total power metric (IT power x PUE), it infers monthly net capacity additions and compares them with historical monthly and quarterly data, as well as VNET's net additions in utilized MW, to judge industry demand, delivery, and customer inflow pace.

Methodology notes

• Industry data trackingIDC power consumption-based capacity net addition inference

  Infer net additions of utilized IDC total power from changes in data center power consumption

  The report uses government-disclosed Ulanqab data center power consumption as the basis to infer monthly capacity net additions under the IDC total power metric, in order to observe customer inflows and demand release pace.

• Valuation methodEV/EBITDA target multiple

  Target EV/EBITDA multiple used for VNET valuation reference

  The report discloses that VNET is valued using a target EV/EBITDA multiple, but this input does not provide the specific target multiple, target price, or earnings forecast.

• Rating definitionUBS Forecast Stock Return rating framework

  12-month rating definition of FSR versus MRA

  UBS defines 12-month expected stock return as expected share price appreciation plus dividend yield, and uses the local one-year interest rate plus 5% as the MRA benchmark; this report does not disclose a specific stock rating.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China IDC industry

  Core research object

  Strengths

  April power consumption and implied capacity net additions hit record highs, indicating faster customer inflows and demand release.

  Weaknesses

  Historical monthly net additions have been volatile, including months of negative net additions, and 4Q25 was clearly constrained by chip supply.

  Comparison

  April's 125MW was significantly higher than 37MW in March, 71MW in 1Q26, and 4MW in 4Q25.

  Risks

  AI demand below expectations, data center outages, interest rates higher than expected, adverse regulatory conditions.

• VNET

  Comparable / related IDC operator

  Strengths

  The report uses VNET's net additions in utilized MW for industry comparison and discloses that its valuation uses a target EV/EBITDA multiple.

  Weaknesses

  Risks include refinancing costs, hyperscale cloud customer growth, access to land and utility resources in tier-one cities, and rising retail customer attrition.

  Comparison

  The chart shows that VNET's net additions in utilized MW were relatively stable from 2Q24 to 4Q25, while Ulanqab's implied net additions were more volatile.

  Risks

  Inability to refinance at reasonable cost, cloud customer growth below expectations, difficulty securing land and utility resources, and rising retail customer attrition.

• Power utilities and the data center power supply chain

  Supporting segment benefiting from IDC power growth

  Strengths

  Data center power consumption almost doubled year over year, indicating strong power demand growth.

  Weaknesses

  Electricity prices, PUE requirements, and regulatory policies may affect data center economics.

  Comparison

  Power consumption growth of 99.3% in April 2026 remained close to the high 116.6% growth level for full-year 2025.

  Risks

  Power costs higher than expected and changes in regulatory requirements for energy consumption and licensing.

Key data

• Ulanqab data center power consumption in April 2026574GWhUp 99.3% year over year.
• Implied IDC total power net additions in April 2026125MWMeasured as IT power x PUE; the highest since tracking began in February 2024.
• Implied net additions in March 202637MWApril net additions accelerated materially versus March.
• Implied net additions in 1Q2671MWThe single-month 125MW in April already exceeded the full-quarter net additions.
• Implied net additions in 4Q254MWThe report says this was affected by chip supply constraints at the time.
• Historical peak in May 202583MWThe chart shows that April's 125MW exceeded the previous major peak.
• Full-year 2025 power consumption growth116.6%Used for comparison with the growth momentum in March and April 2026.

Impact & implications

If the capacity net additions implied by Ulanqab power consumption can be sustained, it would indicate that demand and delivery pace in China's hyperscale data center market may be recovering, sending a positive signal for IDC operators, upstream power infrastructure, and the cloud/AI infrastructure chain. At the same time, the sector remains influenced by variables such as AI demand, chip supply, interest rates, electricity prices, regulation, and PUE requirements.

Risks

• AI demand weaker than expected.
• One or more data center outages damage the industry's reputation.
• Interest rates higher than expected, increasing financing and valuation pressure.
• Regulatory conditions disappoint, especially changes in licensing and PUE requirements.
• Hyperscale cloud customer growth below expectations.
• Power costs higher than expected.
• VNET may be unable to refinance at reasonable cost.
• VNET may face difficulty securing land and utility resources in tier-one cities.
• VNET's retail business may see rising customer attrition.

What to watch

• Whether Ulanqab's monthly data center power consumption continues to grow strongly.
• Whether implied MW net additions can remain elevated in 2Q26.
• The actual delivery and customer inflow pace after hyperscale cloud providers' data center tenders.
• The pace of domestic chip ramp-up in 2H26 and its support for IDC construction.
• Whether AI and cloud demand is stronger or weaker than expected.
• Changes in electricity prices, interest rates, license issuance, and PUE regulatory requirements.
• VNET's subsequent net additions in utilized MW, financing costs, and customer attrition.