GDS Holdings Ltd Class A 09698

Morningstar Rating
HK$28.82 −2.72 (8.62%)
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Company Report

GDS Well-Placed to Capitalize on Growing Data Center Demand From AI in China

We expect GDS Holdings to continue to purchase and build data centers in and around its focus Tier 1 Chinese cities of Shanghai, Beijing, Shenzhen, Guangzhou, Hong Kong, Chengdu, and Chongqing. As its network of interconnected data centers grows, it can more easily cater to the demand from its key cloud service provider customers, allowing them to expand in a flexible way in their key markets. This also enables key enterprise customers to deploy their hybrid clouds in proximity to the networked nodes of leading public clouds. The company is also excited about its international expansion into Southeast Asia, but in raising funds for the growth of this business, named DayOne, it has sold down its stake to 38% and has now deconsolidated this business. The most recent capital raise would value GDS' stake at USD 1.3 billion or USD 6.75 per ADR on a USD 400 million investment. Management has indicated that an IPO of this business is a possibility within the next 18 months. In July 2025, GDS listed a C-REIT seeded by some of GDS' mature Chinese data centers and will likely continue to use this as a means for recycling capital.

Price vs Fair Value

09698 is trading at a LOCK|!^#&M^v premium.
Price
HK$31.54
Fair Value
VBh
Uncertainty
LOCK|M$ cn%MB
1-Star Price
LOCK|.>j#
5-Star Price
LOCK|.@B
Economic Moat
LOCK|N%
Capital Allocation
LOCK|#?@rt!V

Bulls Say, Bears Say

Bulls

GDS’ rapid expansion in the “land grab” stage of the industry should allow it to own data centers in sought-after areas such as downtown in Tier 1 cities and in data center clusters.

Bears

GDS' data centers are not significantly differentiated from those that others, including its biggest customers, could supply.

Trading Information

Previous Close Price
HK$31.54
Day Range
HK$28.76–29.38
52-Week Range
HK$27.32–46.94
Bid/Ask
HK$28.82 / HK$28.84
Shares Outstanding
1.60B
Market Cap
HK$46.20B
Volume/Avg
2M / 5M

Key Statistics

Price/Earnings (Normalized)
24.23
Price/Sales
4.21
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Dividend Payment Schedule
—
Total Yield
—

Company Profile

GDS Holdings started as an IT service provider in 2001, then moved to the data center business with its first self-developed data center opening in 2010. The company now develops and operates data centers in China and also builds, operates, and transfers data centers for other clients. It offers colocation and managed services and mainly targets hyperscale cloud service customers who take large areas of its data centers or even whole data centers under long-term contracts. Its data centers are located predominantly in and around the Tier 1 cities in China, and it has also started expanding into Southeast Asia via the now 23% owned DayOne. GDS listed on the Nasdaq in 2016 and completed a secondary listing in Hong Kong in 2020.
Sector
Technology
Industry
Information Technology Services
Stock Style Box
Large Core
Total Number of Employees
2,434

Competitors

Valuation

Metric
09698
00762
00728
Price/Earnings (Normalized)
24.239.9213.61
Price/Book Value
1.500.390.76
Price/Sales
4.210.380.71
Price/Cash Flow
13.131.592.62
Price/Earnings
09698
00762
00728

Financial Strength

Metric
09698
00762
00728
Quick Ratio
1.370.630.55
Current Ratio
1.780.700.66
Interest Coverage
1.1617.0321.17
Quick Ratio
09698
00762
00728

Profitability

Metric
09698
00762
00728
Return on Assets (Normalized)
5.30%2.52%4.06%
Return on Equity (Normalized)
16.19%4.55%7.67%
Return on Invested Capital (Normalized)
7.65%3.98%6.84%
Return on Assets
09698
00762
00728

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