Daiwa Research maintained its target price for GDS Holdings (09698) unchanged at HK$116 but downgraded its rating to "outperform" from "buy".
The research house said GDS' share price has rallied 15% year-to-date and the valuation for the stock has improved to 34-35x EV/EBITDA to Daiwa's 2021 EBITDA. Daiwa noted that the market has greater expectations about GDS' capacity ramp-up in 2021 and more acquisitions.
The research house remains bullish on GDS as more acquisitions towards 2H. However, it also noted the near-term risk-reward profile has become less attractive at the current valuation.