Group 1 - The stock of GDS Holdings Limited (09698) opened lower but rose over 4% in the afternoon, currently up 4.83% at HKD 39.52 with a trading volume of HKD 517 million [1] - The National Development and Reform Commission recently issued a notice to enhance the regular reporting and recommendation of real estate investment trusts (REITs) in the infrastructure sector, focusing on market expansion and project vetting [1] - According to Jefferies, newly listed REITs can apply for asset injection six months post-IPO, which could accelerate acquisitions, positively impacting GDS Holdings and 21Vianet [1] Group 2 - Huatai Securities reported that GDS Holdings shared key insights at a strategy meeting, highlighting an increase in the on-shelf rate of domestic data center services and a rise in new orders [1] - The data center industry is currently experiencing a favorable supply-demand cycle [1] - DayOne is actively launching new projects in Europe and Southeast Asia, aiming to sign contracts for 1GW capacity within three years [1] - GDS Holdings successfully issued the first batch of domestic data center REITs, receiving significant market attention and demonstrating capital market recognition of quality digital infrastructure assets [1]

Group 1 - The stock of GDS Holdings Limited (09698) opened lower but rose over 4% in the afternoon, reaching a price of HKD 39.52 with a trading volume of HKD 517 million [1] - The National Development and Reform Commission has issued a notice to further promote the normalization of Real Estate Investment Trusts (REITs) in the infrastructure sector, which includes specific measures to expand the market and support fundraising [1] - According to Jefferies, newly listed REITs can apply for asset injection six months post-IPO, which could accelerate acquisitions, positively impacting GDS Holdings and Century Internet [1] Group 2 - Huatai Securities reported that GDS Holdings shared key investor concerns at a strategy meeting, highlighting continuous improvement in the domestic data center business and an increase in new orders [1] - The data center industry is currently experiencing a cycle of supply and demand improvement [1] - DayOne is actively launching new projects in Europe and Southeast Asia, aiming to achieve a target of signing 1GW capacity within three years [1] - GDS Holdings successfully issued the first batch of domestic data center REITs, receiving significant market attention and reflecting capital market recognition of high-quality digital infrastructure assets [1]

Core Insights - Three IT services stocks, Ibex Ltd., 9F Inc., and GDS Holdings Ltd., have entered the top 10th momentum percentile rankings, indicating strong technical signals and increasing investor demand in the IT services sector [1][6]. Momentum Percentile Overview - Momentum percentile ranks a stock's price strength and volatility against peers, with higher percentiles indicating greater momentum, serving as a signaling tool for traders and investors [2]. Company Performance - **Ibex Ltd.**: Momentum percentile increased from 86.34 to 92.45, a rise of 6.11 points. The stock has risen 88.66% year-to-date and 103.78% over the past year, showing strong price trends across all time frames [7]. - **9F Inc.**: Momentum percentile advanced from 89.29 to 92.66, gaining 3.37 points. The stock is up 88.49% year-to-date, maintaining a strong price trend despite a poor growth ranking [7]. - **GDS Holdings Ltd.**: Momentum percentile jumped from 86.57 to 90.38, an increase of 3.81 points. The stock has advanced 68.08% year-to-date and 89.96% over the past year, indicating climbing investor appetite [7]. Sector Trends - The collective rise of these three companies into the momentum top decile reflects a growing trend of sector-specific strength, potentially driven by robust earnings, sectoral growth, or increased institutional interest [6].

Core Viewpoint - GDS Holdings (GDS.US) saw a nearly 2% pre-market increase, reaching $39.7, amid the upcoming 2025 Cloud Summit in Hangzhou, which will focus on AI, cloud computing, and industry applications [1] Group 1: Event Highlights - The 2025 Cloud Summit will take place from September 24 to 26 in Hangzhou, themed "Cloud Intelligence Integration · Carbon and Silicon Symbiosis" [1] - The summit will feature three main forums: "Cloud Summit Outlook," "Cloud Technology," and "Incalculable Value," focusing on the latest trends in AI and cloud computing [1] Group 2: Industry Insights - Huawei recently announced its Ascend AI chip technology roadmap at the recent Connect Conference, indicating advancements in AI capabilities [1] - CITIC Securities' report expresses optimism regarding the downstream AI computing power demand represented by the internet sector, suggesting that domestic computing power is expected to enhance product competitiveness in terms of single-card performance and cluster performance [1] - The report recommends attention to the domestic computing chip industry, server sector, and OCS optical device supply chain companies [1]

Summary of Key Takeaways from the Conference Call on China's Software and Data Center Industry Industry Overview - The conference focused on the software and data center industry in China, highlighting the significant role of AI as a growth driver for the sector [1][2]. Core Insights 1. **AI as a Growth Driver**: AI is identified as the key growth driver for software companies, with notable progress in AI monetization and increasing AI-related contract values [1][2]. 2. **Operational Efficiency**: Deployment of AI agents and coding is enhancing operational efficiency for software companies [1]. 3. **Subscription Revenue**: Companies with a higher share of subscription revenue, such as Kingdee and Meitu, are showing better growth visibility [1][2]. 4. **Data Center Demand**: There is strong demand for data centers driven by AI, with positive developments in domestic AI chip production to support order visibility [1]. 5. **Public Cloud Growth**: The AI-driven public cloud business is experiencing strong growth momentum [1]. Financial Performance 1. **2Q25 Results**: Software companies reported mostly in-line results for 2Q25, with 1 beat, 12 in-line, and 3 misses. Companies with solid downstream demand and higher recurring revenue performed better [3]. 2. **Data Center Performance**: Companies like VNET, GDS, and Kingsoft Cloud exceeded expectations due to strong AI demand [3]. Market Data 1. **Revenue Growth**: The revenue of China's software and IT services industry grew by 12.3% YoY to Rmb8.32 trillion in the first seven months of 2025, with net profit increasing by 12.4% YoY to Rmb1.09 trillion [4]. 2. **Sector Performance**: In July 2025, the sector's revenue growth accelerated to 14.6% YoY, and net profit growth reached 13.9% YoY [4]. Investment Recommendations 1. **Top Picks**: The preferred companies in the software sector include Kingdee and Meitu for their solid growth and improving profitability. In the data center/public cloud space, VNET, GDS, and Kingsoft Cloud are favored for their strong growth driven by AI [2][9]. 2. **Price Objective Changes**: Price objectives for several companies were revised, reflecting changes in market conditions and company performance [7][11]. Employee Trends - The total number of employees in software companies under coverage declined by an average of 5% in 1H25 compared to FY24, indicating potential cost-cutting measures [13]. Margin Trends - There is an observed improvement in profitability across software and data center companies, with gross profit margins (GPM) and net profit margins (NPM) showing positive trends [14]. Conclusion The conference highlighted the robust growth potential of the software and data center industry in China, driven primarily by AI advancements. Companies with strong subscription models and operational efficiencies are positioned favorably for future growth. The overall financial performance indicates a healthy demand environment, although some segments, particularly cybersecurity, are facing challenges.

Group 1 - The Nasdaq China Golden Dragon Index increased by 2% on Wednesday, indicating a positive trend for popular Chinese concept stocks [1] - Baidu (BIDU.US) and NIO (NIU.US) both rose over 6%, reflecting strong market performance [1] - GDS Holdings (GDS.US) saw an increase of nearly 4%, while Pinduoduo (PDD.US) and New Oriental (EDU.US) both rose by 3%, showcasing a broad-based rally among these stocks [1]

Core Insights - AI is driving the demand for data centers into a "long-term essential" phase, while short-term uncertainties in chip supply may hinder market growth [1][2] - The competition in the data center industry has shifted, with rapid delivery and green energy becoming critical factors for securing orders [10][11] Data Center Demand and Supply - Data centers are considered the "digital infrastructure" of the AI era, supporting high-power servers and massive computing needs for applications like large model training and industrial internet [2] - The power density of AI servers has increased significantly, with single rack power density rising from 4-6 kW to over 20 kW, leading to a substantial increase in electricity demand [2] - Short-term supply issues with advanced AI chips, such as Nvidia's H20, may slow down new order placements, but domestic chip manufacturers are rapidly advancing to fill the gap [2] Competitive Landscape - The ability to quickly deliver capacity is becoming a "pass" for securing orders, as clients are increasingly demanding timely responses amid supply chain uncertainties [10] - Reliable and low-cost renewable energy sources are becoming a key competitive advantage for third-party data center operators in China, aligning with carbon neutrality goals and controlling operational costs [11] Technological Advancements - Liquid cooling technology is becoming standard in AI data centers due to the high heat generated by high-power density servers, with three main cooling solutions being adopted [11][12] Investment Opportunities - Preferred investment targets in the domestic data center sector include Century Internet (VNET) and GDS Holdings (GDS), due to their advantages in capacity delivery and energy acquisition [11] - The long-term value of data centers is just beginning to emerge, as they are essential for AI innovations to move beyond conceptual stages [11]

Group 1 - Kingsoft Cloud (KC.US) saw a pre-market increase of over 7%, reaching $17.2, while GDS Holdings (GDS.US) and Century Internet (VNET.US) both rose over 2% in pre-market trading [1] - Bank of America Securities reported that during a recent investor event, discussions with management from various software companies, data centers, and cloud computing firms revealed steady progress in AI monetization, with the value of AI-related contracts continuing to rise [1] - The report highlighted that AI agents and AI coding deployment are enhancing operational efficiency for software companies [1] Group 2 - In the data center and public cloud sectors, Bank of America is optimistic about GDS Holdings, Century Internet, and Kingsoft Cloud, citing strong AI demand driving performance above expectations, with all receiving a "buy" rating [1] - Goldman Sachs also indicated a preference for the gaming, transportation, cloud computing, and data center sub-sectors within the Chinese internet sector, particularly favoring Century Internet and GDS Holdings in the cloud computing and data center space [1]

Core Viewpoint - The report from Bank of America Securities highlights the robust progress in AI monetization among Chinese software companies, with increasing contract values related to AI and improvements in operational efficiency driven by AI deployment [1] Group 1: Software Companies - Companies like Kingdee International (00268) and Meitu (01357) are expected to show higher growth visibility due to their significant subscription revenue [1] - The development of AI is driving strong demand for data centers, with advancements in domestic AI chip research supporting increased orders [1] - The report favors companies with stable downstream demand and high recurring revenue, recommending Kingdee and Meitu as top picks with target prices of HKD 20.7 and HKD 13.5, respectively [1] Group 2: Data Centers and Public Cloud - In the data center and public cloud sectors, the report is optimistic about companies like GDS Holdings (09698, GDS.US), CenturyLink (VNET.US), and Kingsoft Cloud (03896, KC.US), all benefiting from strong AI demand [1] - All these companies are expected to exceed performance expectations, with a "buy" rating assigned to each [1] - The target price for Mingyuan Cloud (00909) has been raised from HKD 3.7 to HKD 4, maintaining a "neutral" rating [1]

Group 1 - The core viewpoint of the article highlights that software companies in China, such as Kingdee International, Meitu, Kingsoft Office, and Yonyou Network, are making steady progress in monetizing AI, with increasing contract values related to AI [1] - AI-driven demand is expected to significantly boost the growth of data centers, supported by advancements in domestic AI chip research, which will lead to increased orders [1] - The report favors companies with robust downstream demand and high recurring revenue, identifying Kingdee and Meitu as top picks in the software sector, both rated "Buy" with target prices of HKD 20.7 and HKD 13.5 respectively [1] Group 2 - In the data center and public cloud sectors, the report is optimistic about companies like GDS Holdings, Century Internet, and Kingsoft Cloud, all benefiting from strong AI demand, with performance exceeding expectations and rated "Buy" [1] - The target price for Mingyuan Cloud has been raised from HKD 3.7 to HKD 4, while maintaining a "Neutral" rating [1]