King's Financial News | Guosen Securities issued a research report stating that in 2024Q2, GDS Holdings (09698) achieved revenue of 0.256 billion yuan, a 24.0% increase from the previous quarter. Adjusted EBITDA was 0.085 billion yuan, a 80.6% increase from the previous quarter, mainly benefiting from new orders in Johor Park, Malaysia, and a major sales agreement signed with a global technology company. As of 2024Q2, the data center area in service reached 50,798 square meters (YoY +1532.5%), with an under-construction area of 108,411 square meters (YoY +117.0%). Construction of a total of 6 new data centers has commenced in KTP and NTP parks. It is expected that the growth in capacity, services, delivery, and utilization rates in the second half of 2024 will be relatively small, but substantial growth is anticipated from 2025 onwards.
The bank stated that the company is establishing a listed REIT in China holding data center assets and is undergoing regulatory approval processes. Additionally, as of 2024Q2, GDS Holdings' cash balance was 3.1 billion yuan (including the second tranche of Series A financing). The company plans to raise more equity capital for GDS Holdings through Series B financing, with the process already initiated, and the financing is expected to be completed by the end of 2024.
The bank further mentioned that with stable growth in domestic business EBITDA and significant enhancement in investment and delivery of international business expected in 2025, the company's growth prospects are opening up. It is anticipated that the company's revenues for 2024/2025/2026 will be 113.87/130.7/291.15 billion yuan respectively, with adjusted EBITDA of 5.094/5.991/7.162 billion yuan. Initiated coverage, with a 'buy' rating.