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]
万国数据-SW：国内基本盘稳固，海外行业拐点已至