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GDS-SW Tumbles 13%+; G Sachs: 1Q Revenue Slightly Misses, EBITDA In Line; Daiwa: Strong Orders but Earnings to Take Time
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GDS-SW (09698.HK) opened 8.09% lower this morning (21st), hitting an intraday trough of HKD32.72. It was last at HKD34.18, down 13.6%, with turnover of 14.9607 million shares, involving HKD515 million. Goldman Sachs’ research report covered GDS-SW, of which 1Q revenue was 1-2% below the broker’s and the market’s expectations, while adjusted EBITDA was broadly in line. The broker noted that the weak share price post-results was mainly due to lower actual move-ins in 1Q, delivery miss, and a slim decline in MSR per sqm. Goldman Sachs expected the portfolio’s adjusted gross profit yield to remain within the 10-11% range as new orders are delivered. Assuming a six-year investment cycle, the broker estimated incremental investments could generate a 20% ROE. It maintained a Buy rating on GDS-SW, with a 12-month TP of HKD54 for its H shares and USD55 for GDS Holdings Limited (GDS.US). ********************************************************************************************* Daiwa released a research report on GDS-SW too. The company's core 1Q results met market expectations. Robust AI demand drove new bookings to a record high for a single quarter, but the earnings inflection point will be lagged considerably. Excluding one-off items, 1Q revenue was RMB2.9 billion and adjusted EBITDA was RMB1.4 billion, both up 8% YoY. GDS-SW recorded net new bookings of about 200MW in 1Q, marking the highest single-quarter level on record. Since 2Q, it has secured a further 138MW of new orders from Shaoguan and Ulanqab, implying YTD bookings of over 340MW. Daiwa believed the full-year target of 500MW is achievable and could even surpass 800MW. However, as orders must go through approval, construction and ramp-up phases, initial revenue contribution typically takes around four quarters, with full impact requiring six to eight quarters, the broker expected 1Q orders will not make more meaningful contributions until in 2H27. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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