Summary of GDS Holdings Conference Call Company Overview - Company: GDS Holdings - Industry: Data Center Services Key Points Industry Dynamics and Company Strategy - GDS Holdings is transitioning from a deleveraging focus to a growth-oriented strategy starting in 2026, driven by increased demand for AI infrastructure and improved chip availability [2][9] - The company anticipates a significant upcycle in demand beginning in 2026, particularly due to AI-related needs [2][9] Order Volume and Customer Move-Ins - For 2025, GDS expects total order volume to reach approximately 300 MW, with around 60% of this demand being AI-related (GPUs) and 40% being CPU-based [7] - Management forecasts that move-ins for 2025 will be around 20%-30% of the order volume, with a significant increase in 2026 [7] - The company expects to utilize over 75,000 square meters from its existing backlog in 2026, with a larger proportion of move-ins expected to be supported by domestic chips [7][9] Pricing Trends - GDS anticipates a decline in its Market Share Rate (MSR) by 3-4% in the upcoming year due to contract renewals at lower rates, with a recovery period of 5-7 years [10] - Despite the decline in MSR, project-level pricing has remained stable, and the Internal Rate of Return (IRR) for new projects is attractive, with unlevered IRR in the low teens and levered IRR exceeding 20% [10] Data Center Location Strategy - GDS plans to capture new orders through its existing 1 GW inventory capacity, with potential expansion into remote areas to meet additional demand [10] - Tier-1 cities are critical for public cloud services and AI inference due to low-latency requirements, while remote regions are emerging as preferred locations for large-scale AI training clusters [10] Regulatory Environment - The regulatory landscape for data center projects remains stringent, requiring signed customer contracts, adoption of domestic chips, and full funding coverage [10] - These regulations are seen as supportive for long-term industry development by preventing oversupply and maintaining pricing stability [10] Cooling Systems - GDS employs a flexible cooling system design that allows for a mix of air and liquid cooling, providing operational flexibility [10] Investment Thesis - GDS is positioned to benefit from the growth in AI-driven cloud services and international expansion, with a focus on backlog delivery leading to higher revenue growth visibility [9] - The company is rated as a "Buy" with target prices of US$44 and HK$43 for GDS and 9698.HK respectively, indicating an upside potential of approximately 29.1% and 30.0% [3][12] Risks and Challenges - Key risks include below-expected move-in demand, slower overseas revenue ramp-up, and potential customer churn [11] Additional Insights - GDS's strong delivery track record differentiates it from smaller competitors, as evidenced by clients shifting orders to GDS after failures from other providers [10] - The company is optimistic about data center demand from 2027 to 2029, indicating a long-term growth outlook [7][9]
万国数据-互联网调研纪要：2026 年 AI 与芯片供应驱动需求上行周期开启；买入