China migrating to Cloud. We believe the accelerating cloud migration in China is driven by long-term structural trends in digitalisation/domestic substitution. Post pandemic, we expect continuous increase in business acceptance of cloud/SaaS solutions. Gartner forecasts China’s IT budget to rebound to 7.2% YoY in 2021 (from ~1.3% in 2020), supporting faster cloud migration in China, with 5G’s proliferation and policy support as other drivers. Key themes across sub-layers. (1) China’s IaaS market is likely five years behind the US. We see demand remaining robust, driven by both Internet, enterprise applications, and new technologies like 5G, AI, and IoT. Multi-cloud adoption will further increase. The Top 5 IaaS public cloud providers should remain stable in 2021, but we see the public/private cloud approaches converging. (2) IDC benefits from rapid data volume growth from 4G to 5G, driving China’s carrier-neutral data-centre of 16.7% CAGR, and hyperscale data-centres of 29.2% CAGR over 2019-24E. (3) China’s SaaS market is likely ten years behind the US, and still very fragmented. SaaS will benefit from the fast penetration of IaaS and wide adoption of cloud native tech, with increasing focus on key account customers. Enterprise Resource Planning (ERP) and specific vertical applications (e.g., e-commerce SaaS) are likely to enjoy fast growth due to their high level of standardisation and customer value-add.