Investment Rating - The report initiates coverage on GDS Holdings (9698 HK) with a "Recommend" rating [2][54] Core Views - GDS is a leading data center service provider in China and Southeast Asia, with a strong domestic presence and rapid overseas expansion [2][6] - The company's revenue grew steadily to RMB 9,957 billion in 2023, with overseas business surging 494% YoY [2] - Domestic computing power demand is increasing, driving data center development, while Southeast Asia presents significant growth potential [2][36] - GDS is expected to achieve revenues of RMB 114 2/135 8/160 1 billion in 2024-2026, with EBITDA of RMB 48 6/55 5/64 5 billion [2][54] Company Overview - GDS transformed from a service-oriented to resource-driven model since 2009, expanding data center coverage across major Chinese cities and entering Southeast Asian markets [2][6] - The company operates 93 self-developed data centers with a total net floor area of 565,062 m² as of December 31, 2023 [9] - GDS uses a VIE structure for its mainland China operations and directly controls overseas subsidiaries [10] Financial Performance - 2023 revenue reached RMB 9,957 billion, with service income accounting for 99 99% [15] - Overseas business grew rapidly, with service income increasing 494% YoY to RMB 223 billion in 2023 [15] - EBITDA margin recovered to 24 7% in 1H2024, indicating improved profitability [19] Domestic Market - China's data center industry shows clustering trends, with deployments shifting from central to peripheral areas and east to west [25][26] - The company focuses on liquid cooling, energy storage, and hydrogen energy technologies to achieve carbon neutrality by 2030 [34] - GDS actively participates in China's East Data West Computing project, transferring data center layouts from first-tier cities to surrounding areas [33] Southeast Asia Expansion - Southeast Asia's digital economy is growing rapidly, with IDC predicting a 15 8% growth rate, surpassing the US and EU [36] - The region's e-commerce market is booming, with platforms like Shopee leading the way [38] - GDS has established data centers in Malaysia and Indonesia, with plans to expand further in the region [48] Technology and Innovation - GDS is developing innovative solutions like the Turbo series, focusing on liquid cooling, energy storage, and hydrogen energy [34] - The company is exploring fuel cell power solutions in collaboration with SK ecoplant [49] Future Outlook - GDS is expected to increase its operational area to 670,000/800,000/870,000 m² in 2024-2026 [50] - The company's gross margin is projected to rise to 21 4%/24 7%/27 9% in 2024-2026 [50] - GDS's EV/EBITDA is forecasted at 14/12/10x for 2024-2026, below the industry average of 17x [54]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance [2]. Core Insights - The company has shown steady revenue growth, with a projected increase in operating income from 9,957 million RMB in 2023 to 11,387 million RMB in 2024, reflecting a growth rate of 14.4% [2][3]. - The adjusted EBITDA for the company is expected to improve significantly, with projections of 50.94 billion RMB in 2024, 59.91 billion RMB in 2025, and 71.62 billion RMB in 2026 [3]. - The domestic business is performing well, with a notable increase in occupancy rates and data center area, which has grown to 580,165 square meters, a year-on-year increase of 9.9% [3]. - International business demand is also on the rise, with significant growth in the GDSI segment, which achieved a revenue of 2.56 billion RMB in Q2 2024, a quarter-on-quarter increase of 24% [3]. Financial Summary - The company's total assets are reported at 791.65 billion RMB, with a net asset value of 194.47 billion RMB [1]. - The projected net profit is expected to improve from a loss of 4,285 million RMB in 2023 to a profit of 329 million RMB by 2026 [2][4]. - The gross profit margin is anticipated to increase, with net profit margins projected to rise from -43.0% in 2023 to 30.1% in 2026 [2][4]. Business Development - The company is actively pursuing asset monetization projects, including the establishment of a REIT for data center assets, which is currently undergoing regulatory approval [3]. - The company has a cash balance of 31 billion RMB as of Q2 2024, with plans for further equity financing to support growth initiatives [3]. Market Position - The report highlights the company's strong position in both domestic and international markets, with a clear strategy for growth and expansion in data center services [3]. - The company is expected to benefit from increased demand for data center services driven by technological advancements and digital transformation trends [3].

Investment Rating - The report maintains a "Buy" rating for the company [2][6] Core Insights - The company reported better-than-expected Q2 results, with revenue of approximately 2.826 billion RMB, a year-on-year increase of 17.7%, and adjusted EBITDA of 1.312 billion RMB, up 14.9% [1][5] - The company has maintained its full-year guidance, expecting revenue between 11.34 billion and 11.76 billion RMB, with a year-on-year growth rate of 13.9% to 18.1% [1][5] - The company is experiencing robust growth in its China operations, benefiting from accelerated onboarding of large internet companies, with Q2 revenue reaching 2.58 billion RMB, a year-on-year increase of 8.9% [1][5] - The international business is gaining momentum with significant orders, including a 205MW capacity reservation in Malaysia and a large sales contract with a global tech company [1][5] - The company plans to complete a Series B financing of 600 to 800 million USD by the end of 2024 to support its international expansion [1][5] Financial Summary - For 2024, the company expects total revenue of 11.508 billion RMB, with a year-on-year growth of 15.6% [4][7] - Adjusted EBITDA is projected to be 4.950 to 5.150 billion RMB, reflecting a year-on-year growth of 7.0% to 11.4% [4][7] - The company has a market capitalization of approximately 20.88 billion HKD and a year-to-date stock price change of 56.95% [3][4]

Financial Data and Key Metrics - Revenue growth of 18% and adjusted EBITDA growth of 15% in Q2 2024, reflecting stabilization in China business and successful execution of international strategy [6] - China segment (GDSH) revenue increased by 8.9% and adjusted EBITDA by 4.3% YoY in Q2 2024, driven by a 10.2% increase in total area utilized [13] - International segment (GDSI) revenue increased by 24% and adjusted EBITDA by 80% QoQ in Q2 2024, with a 28 MW increase in IT power utilized [14] - China CapEx totaled RMB 1.8 billion in H1 2024, with full-year guidance maintained at RMB 2.5 billion [15] - International CapEx was RMB 1.8 billion in H1 2024, expected to exceed full-year guidance of RMB 4 billion due to strong demand [15] - GDSH cash balance increased to RMB 8.4 billion at the end of Q2 2024, with net debt to adjusted EBITDA multiple decreasing to 7.2x [17] - GDSI cash balance was RMB 3.1 billion at the end of Q2 2024, pro forma for Series A proceeds [18] Business Line Performance - China business achieved a gross move-in rate of over 20,000 square meters in Q2 2024, the highest in three years, driven by contracts with faster move-in schedules [8] - 45,000 square meters of new capacity brought into service in H1 2024, with over 20% utilization as of June 30 [9] - International business secured 206 MW of new orders in Q2 2024, with a master sales agreement signed for Batam campus [10] - Total customer commitments for International business reached 388 MW, with 101 MW utilized and 287 MW in backlog [11] Market Performance - Singapore-Johor-Batam region emerging as one of the largest data center markets globally, with strong demand driven by regional expansion and AI-related spillover from the US [10] - Secured power capacity in Southeast Asia increased from 711 MW to 797 MW, with additional land purchases in Johor [39] Strategy and Industry Competition - Focus on stabilizing China business by growing EBITDA and generating positive cash flow before financing, while being selective in new business to minimize incremental CapEx [7] - First-mover advantage in Johor, with a strong market position and ability to deliver data centers quickly using state-of-the-art technology [11] - Plans to establish a REIT in China for data center assets, with strong policy support and regulatory approval process underway [17] - Series B equity raising planned for International business, with strong investor interest and potential for mezzanine debt financing [18][33] Management Commentary on Operating Environment and Outlook - 70% of new demand in China driven by AI-related requirements, with the remaining 30% from internet companies and traditional cloud business [27] - Expect continued strong move-in rates in China through 2025, supported by customer AI plans and backlog utilization [46] - International business expected to see a 3.5x increase in revenue-generating capacity over the next 24 months, with significant ramp-up in 2025 [37] Other Important Information - REIT plan in China aims to list on a stock exchange, with an expected offering size of RMB 2 billion and potential debt reduction of RMB 1 billion [52] - Development yield for International business remains consistent in the low-teens, with high-quality customer contracts and long-term commitments [55] Q&A Session Summary Question: REIT Plan in China - REIT will be publicly listed, with an expected offering size of RMB 2 billion and potential debt reduction of RMB 1 billion [52] - Regulatory approvals are underway, with a milestone expected next year [22] Question: AI-Driven Demand in China - 70% of new demand in China is driven by AI-related requirements, with the remaining 30% from internet companies and traditional cloud business [27] Question: International Business Financing - Series B equity raising planned for International business, with potential for mezzanine debt financing [33] Question: International Business Growth - Expect a 3.5x increase in revenue-generating capacity over the next 24 months, with significant ramp-up in 2025 [37] Question: Power Capacity in Southeast Asia - Secured power capacity increased to 797 MW, with additional land purchases in Johor [39] Question: Customer Mix in Southeast Asia - Current customer mix in Southeast Asia is 70% from China and 30% international, with a target of 50-50 in the future [41] Question: Move-in and MSR Trends in China - Move-in rates in China are expected to remain strong through 2025, with MSR trends bottoming out [46][47] Question: Churn and Renewals in China - Churn rate in China has been running at an annualized rate of 5%, with no exceptional churn expected in the near term [58] Question: Singapore Project Timeline - Singapore project expected to launch service before the end of 2026, with land acquisition process underway [59]

Exhibit 99.1 Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GDS Holdings Limited** (the "Company") is controll ...

| --- | --- | |------------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | 2Q24 Earnings Call | | | 21 August 2024 | | | NASDAQ: GDS HKEX: 9698 | | DISCLAIMER © GDS 2016 1 This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward -looking statements can be identified by terminology such as "may," "will," "expect," ...

Financial Performance - For Q2 2024, GDS Holdings reported a net revenue of RMB 2,826.4 million (USD 388.9 million), representing a year-over-year increase of 14.3%[4] - Adjusted EBITDA for Q2 2024 grew by 6.2% year-over-year to RMB 1,312.2 million (USD 180.6 million), with an adjusted EBITDA margin of 46.4%[4] - Gross profit for Q2 2024 was RMB 637.8 million (USD 87.8 million), a 15.8% increase from RMB 551.0 million in the same period last year[8] - The net loss for Q2 2024 was RMB 231.8 million (USD 31.9 million), slightly higher than the net loss of RMB 225.3 million in the same period last year[10] - Total net revenue for the six months ended June 30, 2024, reached RMB 5,453,736, an increase from RMB 4,880,978 for the same period in 2023, representing a growth of approximately 11.7%[33] - Gross profit for the six months ended June 30, 2024, was RMB 1,211,499, compared to RMB 1,042,684 for the same period in 2023, reflecting a year-over-year increase of about 16.2%[33] - The net loss attributable to the shareholders of the company for the six months ended June 30, 2024, was RMB 571,568, compared to RMB 729,119 for the same period in 2023, showing a reduction in losses by approximately 21.6%[33] Operational Metrics - The total contracted and pre-contracted area reached 756,992 square meters, an increase of 18.7% year-over-year[5] - The operational area increased by 18.8% year-over-year to 630,963 square meters, with a utilization rate of 92.5%[5] - The billing area grew by 20.9% year-over-year to 462,673 square meters, with a billing rate of 73.3%[6] - The total area signed and pre-signed at the end of Q2 2024 was 614,094 square meters, a year-over-year increase of 3.5% from 593,068 square meters[12] - The operational area at the end of Q2 2024 was 580,165 square meters, reflecting a 9.9% year-over-year increase from 528,105 square meters[13] - The billing area at the end of Q2 2024 was 419,976 square meters, a 10.2% increase compared to 380,978 square meters in the same period last year[14] - The operational area occupancy rate was 84.1% at the end of Q2 2024, compared to 58.4% in Q2 2023 and 98.2% in Q1 2024[18] International Expansion - International revenue surged by 690.2% year-over-year to RMB 255.5 million (USD 35.2 million)[8] - The total area signed and pre-signed in international markets reached 142,898 square meters, a significant year-over-year increase of 220.5% from 44,593 square meters[15] - GDS Holdings emphasized a strong focus on strategic goals, contributing to robust performance in Q2 2024, particularly in international markets[6] Expenses and Cost Management - In Q2 2024, total sales and marketing expenses were RMB 22.5 million (USD 3.1 million), a decrease of 1.9% compared to RMB 22.9 million (USD 3.2 million) in the same period last year[9] - General and administrative expenses increased by 51.0% to RMB 127.6 million (USD 17.6 million) from RMB 84.5 million (USD 11.7 million) year-over-year, primarily due to rapid international business expansion[9] - R&D costs in Q2 2024 were RMB 10.9 million (USD 1.5 million), up from RMB 5.0 million (USD 0.7 million) in the same period last year[9] Future Guidance and Strategy - The company confirmed its revenue guidance for 2024 to be between RMB 11,340 million and RMB 11,760 million, with adjusted EBITDA expected to be between RMB 4,950 million and RMB 5,150 million[19] - Capital expenditures for 2024 are expected to remain around RMB 6,500 million[19] - The company plans to expand its market presence and enhance product offerings in the upcoming quarters, focusing on technology advancements and strategic partnerships[34] - The company is focusing on strategic acquisitions to enhance its service offerings and market share, targeting a 20% increase in operational efficiency through these initiatives[38] Financial Position and Stability - As of June 30, 2024, total cash was RMB 9,907.8 million (USD 1,363.4 million) with total short-term debt of RMB 5,597.5 million (USD 770.2 million)[11] - The company reported a total asset value of RMB 79,165,413 as of December 31, 2024, an increase from RMB 74,446,690 as of December 31, 2023, indicating growth in asset base[31] - Total liabilities decreased to RMB 56,290,271 as of December 31, 2024, from RMB 54,322,887 as of December 31, 2023, suggesting improved financial stability[31] - The company’s cash position improved to RMB 9,907,823 as of June 30, 2024, compared to RMB 7,710,711 as of December 31, 2023, indicating better liquidity[31] Risks and Challenges - The company faces risks related to market competition, regulatory changes, and operational challenges that could impact its financial performance[29] - The company emphasizes the importance of addressing inherent risks and uncertainties in its forward-looking statements regarding business growth and revenue expectations[28] Corporate Governance and Structure - The company has a dual-class share structure, with Class A and Class B shares, where Class B shares have 20 votes per share in specific matters[57] - The company’s bylaws allow Class B shareholders to nominate five directors, with voting power of 20 votes per Class B share[58] - The quorum for the shareholders' meeting requires at least two voting shareholders representing no less than one-third of the total voting shares[59]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 11.28, indicating a potential upside of 43.0% from the current price of HKD 7.89 [2][6]. Core Insights - The company's Q1 2024 performance was broadly in line with expectations, showing steady growth with a revenue of approximately RMB 2.63 billion, a year-on-year increase of 9.1%. Adjusted EBITDA was RMB 1.18 billion, up 4.7% year-on-year, representing 25.5% of the annual forecast [1][5]. - The company has maintained its full-year guidance, expecting total revenue between RMB 11.34 billion and RMB 11.76 billion, with a year-on-year growth rate of 13.9% to 18.1% [1][5]. - The company is expanding its business scale, with operational area increasing to 583,229 square meters, a 1.9% quarter-on-quarter rise, and a utilization rate of 74.9% [1][5]. - International business continues to progress, with significant capacity reservations and a recent increase in funding for international data center expansion [1][5]. Financial Summary - For the fiscal year ending December 31, 2024, the company is projected to achieve revenues of RMB 11.36 billion, with a compound annual growth rate (CAGR) of 12% from 2024 to 2026. Adjusted EBITDA is expected to be RMB 4.65 billion, with a CAGR of 11% during the same period [2][4]. - The company reported a net loss of RMB 1.10 billion for 2024, with an expected improvement in losses over the following years [4][7]. - The company’s operational metrics show a total operational area of 583,229 square meters and a signed area of 668,012 square meters, reflecting a stable business environment [5][7].

GDS Holdings Limited (NASDAQ:GDS) Q1 2024 Results Conference Call May 22, 2024 8:00 AM ET Company Participants Laura Chen - Head of Investor Relations William Huang - Chairman, Chief Executive Officer Daniel Newman - Chief Financial Officer Jamie Khoo - CEO of GDS International Conference Call Participants Jonathan Atkin - RBC Capital Markets Yang Liu - Morgan Stanley Cooper Belanger - TD Cowen Gokul Hariharan - JPMC Sara Wang - UBS Operator Hello, ladies and gentlemen. Thank you for standing by for GDS Hol ...

Financial Performance - For Q1 2024, GDS Holdings reported a net revenue of RMB 2,627.4 million (USD 363.9 million), representing a year-over-year increase of 9.1% from RMB 2,409.0 million in Q1 2023[4]. - The net loss for Q1 2024 was RMB 344.9 million (USD 47.8 million), an improvement from a net loss of RMB 474.6 million in Q1 2023[4]. - Adjusted EBITDA for Q1 2024 grew by 4.7% year-over-year to RMB 1,183.4 million (USD 163.9 million), with an adjusted EBITDA margin of 45.0%[4][6]. - The gross profit for Q1 2024 was RMB 573.7 million (USD 79.5 million), a 16.7% increase from RMB 491.7 million in Q1 2023[7]. - The adjusted gross profit for Q1 2024 was RMB 1,368.1 million (USD 189.5 million), up 8.6% from RMB 1,259.4 million in Q1 2023[8]. - The cost of sales for Q1 2024 was RMB 2,053.7 million (USD 284.4 million), a 7.1% increase from RMB 1,917.3 million in Q1 2023[7]. - In Q1 2024, the adjusted gross margin was 52.1%, compared to 52.3% in Q1 2023 and 49.7% in Q4 2023, primarily due to a decrease in maintenance and other operating costs[9]. - The company confirmed its revenue guidance for 2024 to be between RMB 11,340 million and RMB 11,760 million, with adjusted EBITDA expected to be between RMB 4,950 million and RMB 5,150 million[18]. Operational Metrics - The total contracted and pre-contracted area as of March 31, 2024, was 668,012 square meters, a 5.4% increase from 633,611 square meters a year earlier[5]. - The operational area increased by 12.5% year-over-year to 583,229 square meters, with a utilization rate of 74.9%[5]. - The total signed and pre-signed area at the end of Q1 2024 was 668,012 square meters, a 5.4% increase from 633,611 square meters at the end of Q1 2023, but a 0.4% decrease from 670,975 square meters at the end of Q4 2023[12]. - The operational area at the end of Q1 2024 was 583,229 square meters, a 12.5% increase from 518,517 square meters at the end of Q1 2023 and a 1.9% increase from 572,555 square meters at the end of Q4 2023[14]. - The billing area at the end of Q1 2024 was 436,875 square meters, a 16.0% increase from 376,632 square meters at the end of Q1 2023 and a 4.3% increase from 418,748 square meters at the end of Q4 2023[15]. - The operational area billing rate in Q1 2024 was 74.9%, compared to 72.6% in Q1 2023 and 73.1% in Q4 2023[15]. Expenses and Investments - Sales and marketing expenses in Q1 2024 were RMB 26.7 million (USD 3.7 million), a 5.3% increase from RMB 25.3 million in Q1 2023 and a 2.9% increase from RMB 25.9 million in Q4 2023, mainly due to increased marketing activities[9]. - General and administrative expenses in Q1 2024 were RMB 153.4 million (USD 21.2 million), a 30.6% increase from RMB 117.4 million in Q1 2023 and a 13.5% increase from RMB 135.1 million in Q4 2023, driven by international business expansion[9]. - R&D expenses in Q1 2024 were RMB 10.0 million (USD 1.4 million), compared to RMB 9.8 million in Q1 2023 and RMB 12.8 million in Q4 2023[9]. - GDS Holdings increased its private equity financing for GDSI from USD 587 million to USD 672 million to support accelerated customer demand[6]. - The company obtained new debt financing and refinancing credit amounting to RMB 4,294.0 million (USD 594.7 million) in the first quarter of 2024[16]. - The company plans to focus on expanding its market presence and investing in new technologies to drive future growth[30]. Debt and Cash Position - As of March 31, 2024, cash amounted to RMB 7,641.4 million (USD 1,058.3 million) while total short-term debt was RMB 5,893.5 million (USD 816.2 million)[16]. - The total long-term debt reached RMB 42,207.0 million (USD 5,845.6 million), including long-term loans of RMB 26,806.8 million (USD 3,712.7 million)[16]. - The company's cash and cash equivalents as of March 31, 2024, were RMB 7,641,439 thousand, a decrease of 0.9% from RMB 7,710,711 thousand as of December 31, 2023[29]. Market Outlook and Strategy - GDS Holdings is focused on maintaining and enhancing relationships with new and existing customers to support its business growth[27]. - The company is exploring strategic acquisitions and investments to expand its operations and market presence[27]. - GDS Holdings anticipates continued growth in the high-performance data center market in China and Southeast Asia, driven by increasing adoption of cloud computing and cloud service providers[27]. - The future outlook remains positive with expectations of continued revenue growth and improved margins[39]. - The company is committed to investing in new technologies to stay competitive in the market[39]. Risks and Compliance - GDS Holdings faces inherent risks and uncertainties that may impact its actual performance compared to forward-looking statements, including competition and regulatory changes in the industry[27]. - The company is committed to providing accurate and timely updates regarding its business outlook and operational strategies[27].