{Econbiz News} GDS Holdings (09698) is down 9.7%, trading at HK$28.48, with approximately 6.77 million shares traded, involving HK$194 million.
Daiwa Capital Markets published a research report stating that GDS has seen strong order growth amid the wave of investment in artificial intelligence (AI) infrastructure, providing clear revenue visibility for the future. The report mentioned that the company has already secured 471 megawatts (MW) of new orders for the first half of 2026, raising its full-year target to 1 gigawatt (GW), significantly higher than 2025 levels. As of June 2026, backlog orders increased from 450MW at the end of 2025 to 757MW, indicating sustained strong demand.
However, Daiwa pointed out that most new orders are for new construction projects, which require time for development and customer migration, delaying revenue recognition. It expects approximately 230MW of billable power to be added in 2026, around 700MW in 2027, and about 900MW in 2028, with the majority of revenue contributions expected to gradually materialize from the second half of 2027 onwards. Therefore, despite high order visibility, short-term revenue growth remains constrained by project timelines.
The report analyzed that although pricing for new and renewal projects is lower, leading to declines in average revenue per MW and earnings before interest, taxes, depreciation, and amortization (EBITDA), the overall billable capacity is expanding significantly, which will drive total revenue and profit growth. Daiwa expects scale expansion to offset slowing unit economics, positioning GDS as a direct beneficiary of the AI infrastructure investment cycle.
In terms of earnings forecasts, Daiwa lowered its revenue projections for GDS for fiscal years 2027 to 2028 by 5% to 9%, and adjusted EBITDA forecasts for the same period by 4% to 10%, reflecting expectations of slowing unit economics. Concurrently, the firm reduced its target price for the company, based on a 13x enterprise value-to-EBITDA (EV/EBITDA) multiple for 2028, while factoring in a discounted valuation for its approximately 20% stake in DayOne. Downside risks include delays in customer migration and uncertainty regarding DayOne's listing timeline.
Currently, the Hang Seng Index stands at 23,940, down 673 points or 2.7%, with main board turnover exceeding HK$112.2 billion. The Hang Seng China Enterprises Index is at 8,017, down 202 points or 2.5%. The Hang Seng Tech Index is at 4,142, down 111 points or 2.6%. (nw)
Daiwa Capital Markets published a research report stating that GDS has seen strong order growth amid the wave of investment in artificial intelligence (AI) infrastructure, providing clear revenue visibility for the future. The report mentioned that the company has already secured 471 megawatts (MW) of new orders for the first half of 2026, raising its full-year target to 1 gigawatt (GW), significantly higher than 2025 levels. As of June 2026, backlog orders increased from 450MW at the end of 2025 to 757MW, indicating sustained strong demand.
However, Daiwa pointed out that most new orders are for new construction projects, which require time for development and customer migration, delaying revenue recognition. It expects approximately 230MW of billable power to be added in 2026, around 700MW in 2027, and about 900MW in 2028, with the majority of revenue contributions expected to gradually materialize from the second half of 2027 onwards. Therefore, despite high order visibility, short-term revenue growth remains constrained by project timelines.
The report analyzed that although pricing for new and renewal projects is lower, leading to declines in average revenue per MW and earnings before interest, taxes, depreciation, and amortization (EBITDA), the overall billable capacity is expanding significantly, which will drive total revenue and profit growth. Daiwa expects scale expansion to offset slowing unit economics, positioning GDS as a direct beneficiary of the AI infrastructure investment cycle.
In terms of earnings forecasts, Daiwa lowered its revenue projections for GDS for fiscal years 2027 to 2028 by 5% to 9%, and adjusted EBITDA forecasts for the same period by 4% to 10%, reflecting expectations of slowing unit economics. Concurrently, the firm reduced its target price for the company, based on a 13x enterprise value-to-EBITDA (EV/EBITDA) multiple for 2028, while factoring in a discounted valuation for its approximately 20% stake in DayOne. Downside risks include delays in customer migration and uncertainty regarding DayOne's listing timeline.
Currently, the Hang Seng Index stands at 23,940, down 673 points or 2.7%, with main board turnover exceeding HK$112.2 billion. The Hang Seng China Enterprises Index is at 8,017, down 202 points or 2.5%. The Hang Seng Tech Index is at 4,142, down 111 points or 2.6%. (nw)
