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GDS Holdings Ltd (GDS)
NASDAQ:GDS
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GDS Holdings
(NASDAQ:GDS)
64Neutral
Positive Factors
Government Policy
The outlook for the Chinese data center market has improved, with the Chinese government reversing its multi-year efforts to control consumer technology proliferation.
Market Valuation
The anticipated IPO of DayOne is expected to boost GDS's valuation due to its growth potential and long contract durations.
Revenue Growth
The China business showed a 9% year-over-year revenue growth in the fourth quarter, driven by an 11% expansion in the area utilized.
Negative Factors
EBITDA Guidance
Adjusted EBITDA growth guidance for the upcoming fiscal year is slightly below market expectations due to the impact of asset-backed securities.
Investor Sentiment
Some investors were disappointed with the guide for China and the lack of an accelerated international IPO pacing, leading to a stock decline.
Supply Chain Challenges
Uncertainty around chip supply in China is causing the company to be very cautious in accepting new orders.
GDS Holdings (GDS) vs. S&P 500 (SPY)
Market Cap
$3.98B
Dividend YieldN/A
Average Volume (3M)4.11M
Price to Earnings (P/E)―
Beta (1Y)1.65
Revenue Growth9.84%
EPS Growth74.75%
CountryUS
Employees2,345
SectorTechnology
Sector Strength51
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.83
Shares Outstanding188,948,820
10 Day Avg. Volume4,174,392
30 Day Avg. Volume4,110,565
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)15.28
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$40.62Price Target Upside96.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
GDS Holdings Business Overview & Revenue Model
Company DescriptionGDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. The company was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.
How the Company Makes MoneyGDS Holdings makes money primarily through its data center services, which include colocation, managed hosting, and managed cloud services. The company leases space in its data centers to clients, providing them with the infrastructure and environment necessary for their IT operations. Revenue is generated from leasing agreements, which often include long-term contracts and service fees. Additionally, GDS benefits from economies of scale due to its large and strategically located facilities. Partnerships with major technology and telecommunications companies also play a crucial role in enhancing its service offerings and expanding its market reach, contributing to its revenue growth.
GDS Holdings Financial Statement Overview
Summary
GDS Holdings demonstrates a strong recovery and positive growth trends, particularly in revenue and net income, with improved profitability metrics. The balance sheet shows enhanced stability with reduced leverage, though high debt levels still pose risks. Cash flow improvements are evident, but ongoing negative free cash flow warrants attention. Overall, the company's financial position is strengthening, but careful management is required to sustain this trajectory.Income Statement
GDS Holdings has shown solid revenue growth over the years, with a 3.67% increase from 2023 to 2024 and a significant 38.69% increase from 2020 to 2024. The gross profit margin improved to 21.54% in 2024 from 19.31% in 2023, indicating better cost management. Net income turned positive in 2024, marking a recovery from previous losses, which reflects positively on net profit margin improvement. However, historical volatility in EBIT and EBITDA margins suggests operational challenges.76
Positive
Balance Sheet
The debt-to-equity ratio decreased from 2.40 in 2023 to 1.89 in 2024, indicating a stronger equity base relative to debt. The equity ratio improved to 31.97% in 2024, reflecting a healthier balance sheet structure. Return on equity (ROE) was 14.55% in 2024, showing effective use of equity to generate profit. Despite these improvements, high levels of total debt remain a concern.70
Positive
Cash Flow
Free cash flow improved but remained negative at -1.03 billion in 2024, showing a significant recovery from previous years. The operating cash flow to net income ratio suggests sufficient cash generation relative to net income. However, the consistently negative free cash flow points to potential liquidity concerns and capital expenditure challenges.62
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 10.32B | 9.96B | 9.33B | 7.82B | 5.74B | Gross Profit |
| 2.22B | 1.92B | 1.94B | 1.78B | 1.55B | EBIT |
| 1.15B | -2.46B | 551.78M | 569.52M | 672.94M | EBITDA |
| 4.39B | 1.36B | 4.19B | 3.36B | 2.43B | Net Income Common Stockholders |
| 3.43B | -4.29B | -1.27B | -1.19B | -669.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 7.87B | 7.71B | 8.61B | 9.97B | 16.26B | Total Assets |
| 73.65B | 74.45B | 74.81B | 71.63B | 57.26B | Total Debt |
| 44.46B | 47.99B | 44.68B | 37.79B | 24.63B | Net Debt |
| 36.59B | 40.28B | 36.08B | 27.82B | 8.37B | Total Liabilities |
| 49.98B | 54.32B | 50.63B | 47.10B | 31.69B | Stockholders Equity |
| 23.54B | 19.96B | 24.07B | 24.47B | 25.57B |
| Cash Flow | Free Cash Flow | |||
| -1.03B | -4.19B | -4.95B | -8.50B | -7.70B | Operating Cash Flow |
| 1.94B | 2.07B | 2.86B | 1.20B | 320.89M | Investing Cash Flow |
| -8.76B | -6.33B | -11.27B | -13.69B | -9.38B | Financing Cash Flow |
| 17.06B | 3.14B | 4.86B | 8.12B | 20.14B |
GDS Holdings Technical Analysis
Negative
20.63
Price Trends
31.33
Negative
26.41
Negative
21.61
Negative
Market Momentum
-3.33
Positive
35.39
Neutral
38.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDS, the sentiment is Negative. The current price of 20.63 is below the 20-day moving average (MA) of 24.18, below the 50-day MA of 31.33, and below the 200-day MA of 21.61, indicating a bearish trend. The MACD of -3.33 indicates Positive momentum. The RSI at 35.39 is Neutral, neither overbought nor oversold. The STOCH value of 38.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GDS.
GDS Holdings Risk Analysis
GDS Holdings disclosed 119 risk factors in its most recent earnings report. GDS Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GDS Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $3.98B | ― | -4.31% | ― | 9.84% | 74.75% | |
63 Neutral | $3.82B | ― | -8.63% | ― | 20.79% | 32.50% | |
60 Neutral | $2.54B | 31.79 | -41.63% | ― | 12.66% | 2097.85% | |
57 Neutral | $20.06B | 9.61 | -11.19% | 2.76% | 5.41% | -24.85% | |
56 Neutral | $3.53B | ― | -32.59% | ― | 8.56% | 13.34% | |
56 Neutral | $2.78B | ― | -3.54% | ― | 13.45% | 12.86% | |
54 Neutral | $1.48B | 68.82 | 2.97% | ― | 9.68% | ― |
* Technology Sector Average
Performance Comparison
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GDS Holdings Earnings Call Summary
Earnings Call Date: Mar 19, 2025 | % Change Since: -42.02% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Positive
The earnings call highlights significant achievements with record move-ins and a massive new order, coupled with successful asset monetization. However, challenges include a slight decline in utilization rates and MSR, as well as increased CapEx requirements for 2025.Highlights
Record Move-In Rates
GDS Holdings reported the highest move-in rate in its history with 79,000 square meters during 2024, all organic and in Tier 1 markets.
Massive New Order
In 1Q 2025, GDS secured the largest single order in its history in China, totaling around 40,000 square meters or 152 megawatts, with full move-in committed within six months.
Asset Monetization Program Success
GDS executed its first asset monetization transaction, with a total enterprise value of up to RMB2.9 billion, implying an EV to EBITDA of around 13 times.
DayOne's Record Commitment
DayOne achieved a historical 340 megawatts of new commitments in 2024, with a strong pipeline expected to continue in 2025.
Positive Cash Flow Before Financing
GDS reported a positive cash flow before financing of RMB379 million for 2024, aligning with financial targets.
Lowlights
Decline in Utilization Rate
Utilization rate ended 2024 at 74%, with expectations to only increase to high 70s% by the end of 2025.
Slight Decline in MSR per Square Meter
MSR per square meter declined by 2.3% in 4Q 2024 compared to 4Q 2023, with expectations of further slight declines.
Increased CapEx for 2025
The expected CapEx for 2025 increased to RMB4.3 billion, with an additional RMB2.3 billion for the new 152 megawatt order.
Company Guidance
During the GDS Holdings Limited Fourth Quarter and Full Year 2024 earnings call, the company provided detailed guidance and metrics for its operations. William Huang, CEO, emphasized the burgeoning demand for AI inferencing in Tier 1 markets, indicating the potential for multiple gigawatts of demand over the next few years. GDS achieved a gross move-in of 79,000 square meters in 2024, all in Tier 1 markets, with a utilization rate of 74% expected to rise to the high 70s by the end of 2025. The company also secured a significant order of 152 megawatts, the largest in its history, necessitating delivery within six months. Financially, GDS reported a 9.1% year-on-year increase in Q4 2024 revenue and a 13.9% increase in adjusted EBITDA. For 2025, GDS projects revenues between RMB11.29 billion and RMB11.59 billion, with adjusted EBITDA between RMB5.19 billion and RMB5.39 billion. CapEx for 2025 is projected at around RMB4.3 billion, factoring in new orders and asset monetization proceeds. The company is also advancing its asset monetization strategy, with an ABS transaction valued at approximately RMB2.9 billion, enhancing financial flexibility and supporting further business growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.