GDS Holdings (GDS, Financial) disclosed the pricing details for its public offering involving 5.2 million American depositary shares (ADS), each set at $24.50. The company plans to lend to an affiliate associated with the underwriter handling the ADS offering. The borrowing party or its affiliate will benefit from the entire proceeds generated through the sale of these ADSs. JPMorgan, BofA, Morgan Stanley, and UBS are collaborating as joint book-running managers for this financial venture.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for GDS Holdings Ltd (GDS, Financial) is $43.18 with a high estimate of $52.98 and a low estimate of $36.79. The average target implies an upside of 59.09% from the current price of $27.14. More detailed estimate data can be found on the GDS Holdings Ltd (GDS) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, GDS Holdings Ltd's (GDS, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for GDS Holdings Ltd (GDS, Financial) in one year is $15.82, suggesting a downside of 41.71% from the current price of $27.14. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the GDS Holdings Ltd (GDS) Summary page.
GDS Key Business Developments
Release Date: May 20, 2025
- Revenue Growth: 12% year-on-year increase in 1Q '25.
- Adjusted EBITDA Growth: 16.1% year-on-year increase in 1Q '25.
- Adjusted EBITDA Margin: 48.6% in 1Q '25, up from 46.9% in 1Q '24.
- Utilization Rate: Reached 75.7% in 1Q '25.
- Gross Move-In: Approximately 20,000 square meters in Tier 1 markets during 1Q '25.
- New Mega Deal: 152 megawatts signed in 1Q '25.
- Asset Monetization: Completed first ABS transaction in 1Q '25.
- DayOne Power Commitment: Added 70 megawatts in 1Q '25, total over 530 megawatts.
- DayOne Expansion: New commitments in Thailand and Finland totaling over 220 megawatts.
- CapEx Guidance: Total CapEx for the year at RMB4.8 billion.
- Debt Deconsolidation: Approximately RMB1.1 billion deconsolidated with ABS transaction.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GDS Holdings Ltd (GDS, Financial) achieved a revenue growth of 12% and adjusted EBITDA growth of 16% year on year, marking the highest growth rate in the past two years.
- The company signed a mega deal of 152 megawatts during the first quarter of 2025, showcasing strong demand in the AI era.
- GDS Holdings Ltd (GDS) has around 900 megawatts of capacity held for future developments in Tier 1 markets, positioning it well to capture upcoming AI demand.
- The asset monetization strategy, including the completion of the first ABS transaction, provides GDS Holdings Ltd (GDS) with financing flexibility and the ability to recycle cash in China.
- DayOne, a subsidiary of GDS Holdings Ltd (GDS), is ahead of schedule to meet its target of 1 gigawatt of total power committed within three years, demonstrating successful market expansion into Thailand and Europe.
Negative Points
- There are uncertainties around AI chip supply in China, which could impact short-term demand and deployment plans.
- The decrease in MSR per square meter by 2.6% compared to the first quarter of 2024 indicates potential pricing pressure.
- The deconsolidation of the ABS transaction is expected to reduce full-year EBITDA by around RMB130 million, impacting annual growth rates.
- New government regulations in China may control the expansion of AI data centers, potentially affecting future projects.
- The C-REIT transaction, while strategic, is still subject to regulatory approvals and may impact financials if not completed as planned.
