GDS Holdings Ltd. (9698) AI Stock Analysis

• Market Cap: HK$56.13B
• Dividend Yield: N/A
• Average Volume (3M): 10.96M
• Price to Earnings (P/E): 61.0
• Beta (1Y): 1.86
• Revenue Growth: 1.73%
• EPS Growth: N/A
• Country: HK
• Employees: 2,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.44
• Shares Outstanding: 1,607,430,500
• 10 Day Avg. Volume: 9,067,041
• 30 Day Avg. Volume: 10,961,922
• PEG Ratio: -0.11
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 3.05
• P/FCF Ratio: -30.61
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$46.42
• Price Target Upside: 36.54% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: HK$30.00 ▼(-11.76% Downside)

GDS Holdings Ltd. faces significant challenges, primarily due to its high P/E ratio and declining revenue, which suggest potential overvaluation and financial instability. The technical indicators show neutral to bearish momentum, adding to the cautious outlook. Despite strong profitability metrics, the high leverage and negative cash flow are concerning, leading to a moderate overall stock score.

Positive Factors

Revenue Growth

The robust revenue growth rate of 66% indicates strong market demand and effective business expansion, supporting long-term growth potential.

Profit Margins

Strong profit margins reflect efficient cost management and operational efficiency, which are crucial for sustaining profitability over time.

Market Position

Being a leading provider in a growing market like China positions GDS Holdings for continued demand and competitive advantage in the data center sector.

Negative Factors

High Leverage

High leverage can increase financial risk and limit flexibility, potentially impacting the company's ability to invest in growth opportunities.

Negative Free Cash Flow

Negative free cash flow indicates cash constraints, which can hinder the company's ability to fund operations and growth initiatives without additional financing.

Cash Flow Management

Inefficient cash flow management can strain liquidity and operational stability, necessitating improvements to ensure long-term financial health.

GDS Holdings Ltd. Business Overview & Revenue Model

Company Description

GDS 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 Money

GDS Holdings generates revenue primarily through its colocation services, where customers rent space, power, and cooling for their servers and IT equipment within GDS's data centers. This is complemented by cloud computing services, which provide scalable resources on-demand. The company also earns income from managed services, offering clients operational support and IT management. Key partnerships with major cloud service providers and enterprises enhance its market presence, while long-term contracts with customers contribute to stable revenue streams. Additionally, GDS benefits from the growing demand for data services in China, driven by increased internet usage and digitalization across sectors.

GDS Holdings Ltd. Financial Statement Overview

Summary

GDS Holdings Ltd. demonstrates strong profitability with a high net profit margin and positive return on equity. However, the company faces challenges with declining revenue and negative free cash flow, which could impact future growth and financial stability. The high leverage adds financial risk, necessitating careful management of debt levels.

Income Statement

GDS Holdings Ltd. shows a strong net profit margin of 41.56% in the TTM, indicating high profitability. However, the revenue growth rate is negative at -69.7%, suggesting a significant decline in sales compared to the previous period. The EBIT and EBITDA margins are healthy, reflecting efficient operational management, but the sharp revenue drop is a concern.

Balance Sheet

The company has a high debt-to-equity ratio of 1.88, indicating significant leverage, which could pose financial risks. However, the return on equity is positive at 20.16% in the TTM, showing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset financing structure.

Cash Flow

The free cash flow is negative, with a growth rate of -67.23% in the TTM, indicating cash flow challenges. The operating cash flow to net income ratio is 0.36, showing that operating cash flow covers a portion of net income, but the negative free cash flow to net income ratio highlights cash flow inefficiencies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.20B	10.32B	9.96B	9.33B	7.82B	5.74B
Gross Profit	2.55B	2.22B	1.92B	1.94B	1.78B	1.55B
EBITDA	5.94B	4.39B	1.36B	4.19B	3.23B	2.34B
Net Income	5.61B	3.43B	-4.29B	-1.27B	-1.19B	-669.21M
Balance Sheet
Total Assets	78.61B	73.65B	74.45B	74.81B	71.63B	57.26B
Cash, Cash Equivalents and Short-Term Investments	13.44B	7.87B	7.71B	8.61B	9.97B	16.26B
Total Debt	46.96B	44.46B	47.99B	44.68B	37.79B	24.63B
Total Liabilities	51.83B	49.98B	54.32B	50.63B	47.10B	31.69B
Stockholders Equity	26.67B	23.54B	19.96B	24.07B	24.47B	25.57B
Cash Flow
Free Cash Flow	-766.33M	-1.03B	-4.19B	-4.95B	-8.50B	-7.70B
Operating Cash Flow	3.31B	1.94B	2.07B	2.86B	1.20B	320.89M
Investing Cash Flow	-4.81B	-8.76B	-6.33B	-11.27B	-13.69B	-9.38B
Financing Cash Flow	15.43B	17.06B	3.14B	4.86B	8.12B	20.14B

GDS Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 34.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9698, the sentiment is Positive. The current price of 34 is above the 20-day moving average (MA) of 33.91, above the 50-day MA of 32.93, and above the 200-day MA of 31.14, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 52.43 is Neutral, neither overbought nor oversold. The STOCH value of 60.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:9698.

GDS Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0696	74 Outperform	HK$30.90B	13.31	9.65%	2.44%	12.23%	36.90%
2176	74 Outperform	HK$1.15B	13.23	47.22%	12.99%	2.82%	10.06%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0354	54 Neutral	HK$13.68B	21.61	4.70%	1.06%	5.43%	-6.88%
9698	53 Neutral	HK$56.13B	60.96	5.43%	―	1.73%	―
0861	44 Neutral	HK$3.90B	-14.19	-4.20%	2.65%	-6.07%	86.55%
3680	38 Underperform	HK$1.27B	457.14	4.78%	―	-25.92%	―

GDS Holdings Ltd. Corporate Events

GDS Holdings to Announce Q3 2025 Financial Results

GDS Holdings Limited has announced a board meeting scheduled for November 17, 2025, to approve its unaudited financial results for the third quarter ended September 30, 2025. The results will be announced on November 19, 2025, after the Hong Kong market closes and before the U.S. market opens. The company will also hold an earnings teleconference call on the same day to discuss these results, providing stakeholders with insights into its financial performance and operational strategies.