J P M O R G A N Asia Pacific Equity Research 21 August 2025 GDS Holdings Prepping for an AI-driven uptick; DayOne growth continues to accelerate; stay OW GDS 2Q results were largely in-line, with FY25 EBITDA and revenue guidance maintained (despite some deconsolidation of datacenter assets that have been injected into the ABS and C-REIT during 2025), indicating stronger underlying growth. For now, GDS appears to be still taking a more guarded approach to AI projects as customers are still awaiting final cla ...

Financial Performance & Outlook - The company anticipates 2025 organic growth of +4-6%[24] - The company is raising the 2025 adjusted EPS outlook range to $1765-$1815[30] - Second quarter adjusted diluted EPS increased by 11% year-over-year, from $444 to $493[12] - Second quarter organic net sales increased by 2%[12] Segment Results - Hubbell Utility Solutions (HUS) - HUS second quarter organic sales increased by 1%[15] - HUS second quarter adjusted operating profit increased by 7%[15] - Grid Infrastructure sales were $699 million, with a +7% organic increase[16] - Grid Automation sales were $237 million, with a -13% organic decrease[16] Segment Results - Hubbell Electrical Solutions (HES) - HES second quarter organic sales increased by 4%[20] - HES second quarter adjusted operating profit increased by 9%[20]

Investment Rating - The industry investment rating is In-Line [7] Core Insights - In 1Q25, global ODM direct server shipments reached 1.86 million units, reflecting a 25% quarter-over-quarter (q/q) increase and a 50% year-over-year (y/y) increase, accounting for 47.4% of global server shipments [2][3] - The aggregate ODM direct server shipment value was US$59.6 billion, showing a 45% q/q increase and a 253% y/y increase, driven by strong demand for AI servers and high-ASP rack architecture [3][6] - The report highlights a preference for specific ODMs, including Hon Hai/FII, Wistron, Quanta, and Wiwynn, due to their strong performance and market share gains [6] Summary by Sections ODM Shipment Performance - ODM shipment units grew 25% q/q and shipment values grew 45% q/q in 1Q25 [1] - MiTAC experienced the highest growth in shipment units at +46% q/q [2] Market Share Analysis - Wiwynn led the major ODMs with a 22.6% market share, followed closely by Quanta at 22.5% [3][12] - Intel regained unit share to 47.0%, while AMD's share dropped to 36.4% [4][11] Regional Performance - The USA was the best-performing region with a 67% y/y growth in shipment units, accounting for 74% of aggregate ODM direct shipments [5][10] Stock Implications - The strong demand for general servers from cloud services contributed to unit share gains for Quanta and Wiwynn, with expectations of continued revenue growth for major ODMs in the upcoming quarters [6]