GDS (GDS) Q4 2024 Earnings Call March 19, 2025 08:00 AM ET Company Participants Laura Chen - Head-Investor RelationsWilliam Huang - Founder, Chairman & Chief Executive OfficerDaniel Newman - Chief Financial OfficerYang Liu - Executive DirectorFrank Louthan - Managing DirectorJonathan Atkin - Managing Director Conference Call Participants Xinyi Wang - Equity Research Analyst - Greater China Telecom & Data CenterTimothy Zhao - AnalystDaley Li - Vice President, Equity Research Analyst - China Software & Semis ...

Core Viewpoint - GDS Holdings Limited reported its financial results for the fourth quarter and full year of 2024, highlighting a strategic focus on backlog delivery and asset monetization, while also indicating a positive outlook for future business opportunities driven by AI [4][45]. Financial Highlights for Fourth Quarter 2024 - Net revenue for Q4 2024 was RMB2,690.7 million (US$368.6 million), a 9.1% increase from RMB2,465.3 million in Q4 2023 [5][10]. - Cost of revenue increased by 3.9% year-over-year to RMB2,112.5 million (US$289.4 million) [6]. - Gross profit reached RMB578.1 million (US$79.2 million), marking a 33.5% increase from RMB432.9 million in the same period last year [6]. - Gross profit margin improved to 21.5% from 17.6% year-over-year [7]. - Adjusted Gross Profit (non-GAAP) was RMB1,396.7 million (US$191.3 million), an 11.8% increase from RMB1,249.3 million in Q4 2023 [8]. - Adjusted EBITDA (non-GAAP) rose by 13.9% year-over-year to RMB1,297.7 million (US$177.8 million) [10][16]. - Net loss from continuing operations was RMB173.4 million (US$23.8 million), significantly reduced from RMB3,074.6 million in Q4 2023 [10][15]. Financial Highlights for Full Year 2024 - Total net revenue for 2024 was RMB10,322.1 million (US$1,414.1 million), a 5.5% increase from RMB9,782.4 million in 2023 [10][18]. - Gross profit for the year was RMB2,222.6 million (US$304.5 million), a 13.9% increase from RMB1,951.2 million in 2023 [19]. - Adjusted EBITDA for 2024 was RMB4,876.4 million (US$668.1 million), a 3.0% increase from RMB4,733.0 million in 2023 [23]. - Net loss from continuing operations for the year was RMB770.9 million (US$105.6 million), down from RMB3,926.0 million in 2023 [22]. Operational Highlights - Total area committed and pre-committed increased by 1.8% year-over-year to 629,997 sqm as of December 31, 2024 [10][36]. - Area utilized increased by 11.8% year-over-year to 453,094 sqm [10][40]. - The utilization rate for area in service was 73.8% as of December 31, 2024, slightly down from 73.9% in the previous year [10][41]. Recent Developments - The company completed a Series B equity raise for DayOne Data Centers Limited, resulting in a dilution of GDS's equity interest from 52.7% to 35.6% [2]. - GDS announced a significant transaction to monetize a 70% equity interest in certain data centers, with an implied enterprise value to EBITDA multiple of around 13 times [44]. Business Outlook - For 2025, GDS expects total revenues to be between RMB11,290 million to RMB11,590 million, indicating a year-on-year increase of approximately 9.4% to 12.3% [45]. - Adjusted EBITDA is projected to be between RMB5,190 million to RMB5,390 million, reflecting a year-on-year increase of approximately 6.4% to 10.5% [45].

Core Viewpoint - GDS Holdings Limited has announced a significant transaction to monetize a 70% equity interest in certain data centers, marking a pioneering move in the Chinese data center sector with an implied enterprise value to EBITDA multiple of approximately 13 times [1][2]. Group 1: Transaction Details - The total enterprise value for the transaction is approximately RMB 2.9 billion, with total equity consideration reaching around RMB 1.7 billion, or RMB 1.2 billion net of GDS's 30% reinvestment in the Asset Backed Security (ABS) [2]. - GDS will receive net cash proceeds of approximately RMB 500 million at closing, with an additional RMB 700 million contingent on meeting specific milestones related to the data centers' ramp-up [2]. - The transaction involves the deconsolidation of data center project companies, including existing debt and other net liabilities of around RMB 1.2 billion at closing [2]. Group 2: Strategic Importance - This transaction is characterized as a first P-REIT transaction in the China data center sector, showcasing a true sale and successful monetization of data center assets [3]. - The participation of China Life Insurance Company Limited as an anchor investor underscores confidence in GDS's capabilities and the sector's outlook as it transitions into the AI era [3]. Group 3: Company Overview - GDS Holdings Limited is a leading developer and operator of high-performance data centers in China, strategically located in primary economic hubs to meet high demand for data center services [4]. - The company offers a range of services, including co-location and managed hybrid cloud services, and has a diverse customer base that includes hyperscale cloud service providers, large internet companies, and financial institutions [4]. - GDS has a 24-year track record in service delivery, fulfilling the needs of some of the largest customers for outsourced data center services in China [4].

Core Viewpoint - GDS Holdings Limited is set to report its fourth quarter and full year 2024 unaudited financial results on March 19, 2025, after the Hong Kong market closes and before the U.S. market opens [1]. Company Overview - GDS Holdings Limited is a leading developer and operator of high-performance data centers in China, strategically located in primary economic hubs to meet high demand for data center services [4]. - The company offers a range of services including co-location, managed hybrid cloud services, and managed network services, catering primarily to hyperscale cloud service providers, large internet companies, and financial institutions [4]. - GDS has a 24-year track record of service delivery, fulfilling the needs of major customers in the outsourced data center sector in China [4]. - The company holds a non-controlling 35.6% equity interest in DayOne Data Centers Limited, which operates data centers in international markets [4]. Earnings Conference Call - The management will host an earnings conference call on March 19, 2025, at 8:00 AM U.S. Eastern Time, with online registration required for participants [2]. - A live and archived webcast of the conference call will be available on the company's investor relations website [3].

Core Viewpoint - Ramsay Health Care Limited has appointed a financial advisor to explore strategic options regarding its majority shareholding in Ramsay Générale de Santé [1] Group Overview - Ramsay Santé is a leader in private hospitalization and primary care in Europe, employing 38,000 staff and collaborating with nearly 10,000 practitioners to treat over 12.6 million patients annually across 488 facilities in five countries: France, Sweden, Norway, Denmark, and Italy [3] - The company offers a wide range of medical and surgical specialties, including Medicine, Surgery, Obstetrics, Follow-up Care and Rehabilitation, and Mental Health [3] Commitment to Innovation - Ramsay Santé invests over 200 million euros each year in innovation to enhance care pathways across medical, hospital, digital, and administrative sectors [5] - The company is dedicated to improving public health and ensuring comprehensive patient care from prevention to follow-up [4]

Core Insights - Ramsay Santé reported a consolidated revenue of €2.5 billion for the half-year ended December 31, 2024, reflecting a growth of 5.8% compared to the previous year, with a like-for-like growth of 3.7% [3][16][5] - The company faced challenges with EBITDA remaining flat at €284.6 million, impacted by government tariff adjustments and rising operational costs [20][5] - A net loss attributable to owners of the company was recorded at €43.1 million, a significant increase from the previous year's loss of €17.3 million, primarily due to higher lease depreciation and increased debt costs [5][23] Financial Performance - Group revenue increased by 5.8% to €2,507.2 million, with France revenue growing by 7.2% due to new primary care centers and increased admissions [5][17] - EBITDA for the half-year was stable at €284.6 million, with an EBITDA margin of 11.4%, down from 12.0% the previous year [5][20] - The current operating result decreased by 15.5% to €66.1 million, and the operating profit fell by 27.6% to €62.2 million [5][21] Debt and Financing - Ramsay Santé successfully refinanced its €1.65 billion senior debt facilities, extending maturities to 2029-2031, which provides a long-term financing framework [12][13] - As of December 31, 2024, the net financial debt stood at €3.72 billion, with a stable restated net leverage ratio of 5.4x [29][6] Operational Developments - The company expanded its healthcare access initiatives, serving 12.6 million patients across France, the Nordics, and Italy, with 95% of French facilities certified to the highest quality standards [3][30] - Significant growth in outpatient and primary care activities was noted, including the acquisition of Cosem primary care centers and the establishment of new mental health facilities [3][10] Strategic Initiatives - The "Yes We Care 2025" strategic plan aims to enhance digital healthcare systems and improve patient care pathways amidst budgetary constraints [4][31] - Ramsay Santé's commitment to sustainability and ESG initiatives is reflected in its refinancing agreements, which include performance-based adjustments related to patient care and environmental impact [12][13]

Company Overview - Ramsay Santé is a leader in private hospitalization and primary care in Europe, employing 38,000 staff and collaborating with nearly 9,300 practitioners to treat over 12 million patients annually across 465 facilities in five countries: France, Sweden, Norway, Denmark, and Italy [2]. Services Offered - The company provides a wide range of medical and surgical specialties, including Medicine, Surgery, Obstetrics (MSO), Follow-up Care and Rehabilitation (FCR), and Mental Health [3]. Mission and Commitment - Ramsay Santé is a mission-driven organization focused on improving patient health through innovation and contributing to public health service missions wherever it operates [4]. The company is dedicated to ensuring a comprehensive patient care journey, from prevention to follow-up care [4]. Investment in Innovation - The group invests over 200 million euros annually in innovation to enhance care pathways across medical, hospital, digital, and administrative domains, aiming to improve access to care and provide best-in-class healthcare [5].

Group 1 - GDS Holdings' shares have more than doubled since the last note, indicating a bullish sentiment among investors regarding China's AI sector following the DeepSeek announcement [1] - The company is recognized for its strong track record in investment research, particularly in technology, media, internet, and consumer sectors across North America and Asia [1] - Astrada Advisors focuses on identifying high-potential investments and navigating complex industries, providing a unique perspective on market developments and regulatory changes [1] Group 2 - The research integrates rigorous fundamental analysis with data-driven insights, offering a nuanced understanding of key trends, growth drivers, and competitive landscapes [1] - The commitment is to empower investors with timely research and a comprehensive view of industry dynamics, especially in volatile markets or new trends [1]

Company Overview - GDS Holdings (GDS) shares increased by 5.5% to $43.01 in the last trading session, with a notable trading volume and a total gain of 78.4% over the past four weeks, driven by strategic expansion into Southeast Asia and strong customer relationships [1] - The company is expected to report a quarterly loss of $0.22 per share, reflecting a year-over-year improvement of 64.5%, with revenues projected at $431.21 million, a 19.8% increase from the previous year [2] Earnings Estimates and Trends - The consensus EPS estimate for GDS Holdings has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - GDS Holdings currently holds a Zacks Rank of 2 (Buy), suggesting positive market sentiment towards the stock [3] Industry Comparison - In the same technology services industry, Duos Technologies Group, Inc. (DUOT) has a consensus EPS estimate of -$0.30, which is a 31.8% improvement year-over-year, and it currently holds a Zacks Rank of 3 (Hold) [4]

Group 1 - Ramsay Santé has successfully repriced its €1,025 million TLB4 from E+4.00% to E+3.25% and extended the maturity of its €425 million TLB3 by 2 years, merging both into a new single Term Loan B5 of €1,450 million maturing in August 2031 [1][6] - The transaction aims to optimize the company's cost of debt and extend debt maturities, enhancing financial flexibility [6] - The refinancing was arranged by BNP Paribas and Crédit Agricole CIB as Physical Bookrunners [6] Group 2 - Ramsay Santé is the leader in private hospitalization and primary care in Europe, employing 38,000 staff and collaborating with nearly 9,300 practitioners to treat over 12 million patients annually across 465 facilities in five countries [2] - The company offers a wide range of medical and surgical specialties, including Medicine, Surgery, Obstetrics, Follow-up Care, Rehabilitation, and Mental Health [2] - Ramsay Santé is committed to improving patient health through innovation and contributes to public health service missions wherever it operates [3] Group 3 - The company invests over €200 million annually to support the evolution and diversity of care pathways, enhancing access to care and committing to best-in-class healthcare [4] - Ramsay Santé engages in dialogue with stakeholders and strives to protect the planet to improve health outcomes [4]