GDS Holdings Ltd (GDS)

Price$30.44Cached quoteAs of 2026-10-08 20:57 UTC

AI: Fair-priced

Big pictureRevenue keeps growing, but reported profits and cash left after investment remain too uneven.

Revenue rose from CNY 10.32 billion in 2024 to CNY 11.43 billion in 2025, while gross profit increased from CNY 2.22 billion to CNY 2.59 billion. Yet reported net income fell from CNY 3.43 billion to CNY 0.95 billion, showing how transactions and other non-recurring items can distort headline earnings. Operating cash flow improved to CNY 3.37 billion, but CNY 4.69 billion of capital spending left about CNY 1.33 billion of negative free cash flow, meaning cash left after running and investing in the business was still negative.

Business strengthLiquidity improved substantially, although leverage and repeated outside financing still limit downside protection.

Year-end 2025 cash and equivalents reached CNY 14.31 billion, versus CNY 26.31 billion of reported debt, reducing net debt to about CNY 12.01 billion from CNY 18.38 billion a year earlier. Current assets of CNY 18.55 billion also comfortably exceeded CNY 7.13 billion of current liabilities. However, broader filing-based obligations including convertible securities and finance leases were materially higher than reported borrowings alone. Financing cash inflows were CNY 6.11 billion in 2025 after CNY 17.06 billion in 2024, so expansion still depends heavily on external capital.

What could change the storyHigher cash returns from new capacity could create upside, while continued funding needs could erase it.

The strongest bull case is that artificial-intelligence demand fills new capacity quickly, core operating earnings approach the roughly CNY 6 billion guidance level, and investors eventually value that business closer to 12 to 13 times operating earnings. Under the researched assumptions, that could imply roughly 23% to 36% more equity value. The bear case is continued heavy capital spending, leverage and possible dilution while cash generation lags. At nine to ten times operating earnings, estimated value was around 17% below to roughly 4% below the observed market capitalization. These estimates are especially uncertain because the supplied quarterly history is sparse.

Price checkAt the observed price, GDS looks roughly fair because asset value offsets weak cash conversion.

The market valued GDS equity at roughly US$6.7 billion in the researched quote. Its approximately 19.9% DayOne holding was recently marked near US$2.2 billion, covering about one-third of that value. After subtracting this stake and including broader debt-like obligations, the remaining China business was valued near ten times roughly CNY 6 billion of guided operating earnings. That is not demanding for quality infrastructure, but negative recent free cash flow and heavy financing needs prevent a clear undervaluation case.

AI: News

Second-quarter resultsStronger operating expectations improved sentiment, but investors still need proof that growth becomes durable cash generation.

GDS reported second-quarter 2026 results in August and maintained an outlook centered on roughly CNY 5.9 billion to CNY 6.1 billion of annual operating earnings before certain non-cash charges. Contemporary market reporting showed a strong positive share reaction around the release, with gains of roughly 13% cited in researched coverage. That timing is consistent with improved expectations, but it does not prove the results alone caused the move. The important valuation issue is whether those earnings ultimately exceed the large cash investments needed for new data-center capacity.

DayOne funding markA new DayOne financing gave investors clearer evidence that GDS owns a valuable non-China asset.

During 2026, DayOne completed a Series C financing that provided a fresh private-market reference point for the international data-center business. Research around the filing indicated GDS retained about a 19.9% economic interest, with its stake worth approximately US$2.2 billion at that financing value. This matters because the stake represents roughly one-third of GDS's researched public equity value, making DayOne a significant source of potential upside. The main uncertainty is that a private financing valuation may not equal cash realizable by GDS today.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014
Revenue	¥11.43B	¥10.32B	¥9.78B	¥9.27B	¥7.82B	¥5.74B	¥4.12B	¥2.79B	¥1.62B	¥1.06B	¥703.6M	¥468.3M
Gross profit	¥2.59B	¥2.22B	¥1.95B	¥1.95B	¥1.78B	¥1.55B	¥1.04B	¥622.4M	¥408.5M	¥265.7M	¥188.6M	¥80.2M
Gross margin	22.62%	21.53%	19.95%	21.06%	22.76%	27.02%	25.29%	22.29%	25.27%	25.16%	26.81%	17.12%
Research & development	¥32.7M	¥36.3M	¥38.2M	¥31.9M	¥39.3M	¥40.0M	¥21.6M	¥13.9M	¥7.3M	¥9.1M	¥3.6M	¥1.6M
Operating expenses	¥2.64B	¥1.07B	¥4.16B	¥1.24B	¥1.21B	¥877.5M	¥562.9M	¥454.1M	¥326.2M	¥308.0M	¥189.9M	¥155.9M
Operating income	−¥55.8M	¥1.15B	−¥2.21B	¥713.2M	¥569.5M	¥672.9M	¥479.8M	¥168.4M	¥82.2M	−¥42.4M	−¥1.2M	−¥75.7M
Operating margin	−0.49%	11.16%	−22.56%	7.70%	7.28%	11.73%	11.64%	6.03%	5.09%	−4.01%	−0.17%	−16.16%
EBITDA	¥3.40B	¥4.39B	¥1.16B	¥3.83B	¥3.19B	¥2.31B	¥1.62B	¥909.9M	¥460.4M	¥185.0M	¥144.2M	¥7.1M
EBITDA margin	29.77%	42.58%	11.87%	41.36%	40.75%	40.28%	39.34%	32.59%	28.48%	17.52%	20.49%	1.51%
Net income	¥949.6M	¥3.43B	−¥4.29B	−¥1.27B	−¥1.19B	−¥666.4M	−¥442.1M	−¥430.3M	−¥326.9M	−¥276.4M	−¥98.6M	−¥130.0M
Net profit margin	8.31%	33.19%	−43.85%	−13.69%	−15.18%	−11.61%	−10.72%	−15.41%	−20.23%	−26.18%	−14.01%	−27.76%
Basic EPSper basic share	CN¥0.59	CN¥2.27	-CN¥2.96	-CN¥1.03	-CN¥0.90	-CN¥0.59	-CN¥0.45	-CN¥0.43	-CN¥0.42	-CN¥1.35	-CN¥0.99	-CN¥1.91
Diluted EPSper diluted share	CN¥0.55	CN¥2.27	-CN¥2.96	-CN¥1.03	-CN¥0.90	-CN¥0.59	-CN¥0.45	-CN¥0.43	-CN¥0.42	-CN¥1.35	-CN¥0.99	-CN¥1.91

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Owners

Reported shareholders

Ownership data is not available for this listing yet.

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)2$1.71M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 10, 2026Form 4	Qian YixinExecutive VP, operation	SellAmerican Depositary Shares	10.0K	$35.25	$352.5K	66.9K
Jun 2, 2026Form 4	Ye Judy QingDirector	SellAmerican Depositary Shares	37.4K	$36.21	$1.35M	0

Review ownership filings at SEC.gov ↗

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GDS Holdings Ltd (GDS)

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