GDS Holdings Ltd.: Strong Financial Performance and Strategic Positioning Drive Buy Recommendation

Analyst Andy Yu CFA from DBS maintained a Buy rating on GDS Holdings Ltd. (G401 – Research Report) and keeping the price target at HK$40.00.

Andy Yu CFA has given his Buy rating due to a combination of factors including GDS Holdings Ltd.’s strong financial performance and strategic positioning. The company reported a 16% year-over-year increase in adjusted EBITDA for the first quarter of 2025, driven by a 15% growth in utilized area, which slightly exceeded expectations. This positive financial outlook is further supported by management’s reaffirmation of their full-year guidance for EBITDA and capital expenditures, which helps alleviate investor concerns.
Additionally, GDS Holdings is well-positioned to capitalize on the anticipated rise in demand for data center services, particularly in the context of increasing AI application adoption. The company’s leadership in the carrier-neutral data center market in China, along with its significant market share and presence in key international markets, underscores its growth potential. Furthermore, strategic initiatives such as asset monetization and potential IPOs are expected to reduce leverage and free up capital for further expansion, reinforcing the Buy recommendation.

According to TipRanks, Yu CFA is a 3-star analyst with an average return of 10.4% and a 47.83% success rate. Yu CFA covers the Technology sector, focusing on stocks such as China Unicom (Hong Kong), GDS Holdings Ltd., and Microsoft.