GDS Holdings (GDS US) Buy: Lower TP; lacking catalysts in the near term

Research evidence excerpt

GDS Holdings (GDS US) Buy: Lower TP; lacking catalysts in the near term

uding this, our forecasts imply adj.

EBITDA (ex.one-offs) growth of only 4% y-o-y in 2026. In the short term, limited price 55.00

competition from telco operators and regulatory approval timing for new DC projects 37.50

from China’s NDRC are also share price overhangs.

20.00

05/25 11/25 05/26

High conviction on growth beyond 2028: Despite missing near-term catalysts, we

Target price: 51.40 High: 47.52 Low: 23.69 Current: 35.02

remain confident in underlying demand, and adj. EBITDA growth beyond 2028. In

Source: LSEG IBES, HSBC estimates

2026 to date, GDS has signed 346MW of new orders (68% of its 500MW target,

exceeding full-year 2025’s 317MW). We expect total orders signed to reach 646MW in

Helen Fang*

2026, driven by MOU conversion. These orders have 6-8 quarters of construction and Head of Industrials Research, Asia Pacific

ramp-up period, which means they will start contributing to earnings from 2H27. We The Hongkong and Shanghai Banking Corporation Limited helen.c.fang@hsbc.com.hk

raise our 2028 adj. EBITDA growth forecast to 27% y-o-y (previously: 26% y-o-y), and +852 2996 6942

remain confident in long-term AI-driven demand. Kenneth Chin*, CFA

Associate, Asia Industrials

DayOne IPO is a potential catalyst: GDS now holds a 19.9% equity interest in DayOne, The Hongkong and Shanghai Banking Corporation Limited

kenneth.t.k.chin@hsbc.com.hk

valued at USD11.18 per share. A potential IPO down the road would unlock the value. +852 2822 4521

Excluding DayOne, GDS is trading at 10x 2027e EV/adj. EBITDA (VNET: 8.6x). Bart Liu*

Associate

Retain Buy, lower TP to USD51.40 (from USD70.50): We continue to value GDS Guangzhou

using an SOTP-based approach, adding GDS (China) and DayOne valuations (see