GDS Holdings Ltd.: Buy Rating Affirmed Amid Promising Growth and Strategic Expansion

Analyst Andy Yu CFA from DBS maintained a Buy rating on GDS Holdings Ltd. (G401 – Research Report) and keeping the price target at HK$52.00.

Andy Yu CFA has given his Buy rating due to a combination of factors that highlight GDS Holdings Ltd.’s promising growth prospects and strategic positioning. The company is a leading player in the carrier-neutral data center market in China, serving major cloud and internet companies. Its strong presence in tier-1 cities positions it well to capitalize on the increasing demand for data centers driven by the rise in AI and inferencing applications.
Additionally, GDS Holdings is set to benefit from its international expansion plans, including an upcoming IPO and REIT issuance, which are expected to act as catalysts for growth. The company’s financial outlook is positive, with a projected EBITDA growth of around 20% from FY24 to FY26. Despite some challenges, such as potential excess supply in top-tier cities, the valuation of GDS Holdings is justified by its rapid expansion and the improving outlook in the domestic data center market.