Guotai Junan Securities: Maintains "buy" rating on GDS Holdings Limited (09698.HK) with a target price of HK$48.40.

Guotai Haitong released a research report stating that GDS-SW (09698), as a leading IDC company, possesses core resources. In recent years, there has been significant investment in overseas markets and a clear first-mover advantage. In addition, with a restart in domestic investment growth over the past 25 years, the company will benefit greatly from the increasing demand for data centers under global AI development. The bank predicts that the company's revenue for 2025-2027 will be 11.56 billion yuan, 12.98 billion yuan, and 14.32 billion yuan respectively, with EBITDA at 5.23 billion yuan, 5.70 billion yuan, and 6.17 billion yuan. Based on the valuation of comparable companies, a 2025EEV/EBITDA of 20x is given, corresponding to a target price of 48.40 Hong Kong dollars, and the "Hold" rating is maintained. Key points from Guotai Haitong: The China-ASEAN Digital Infrastructure Cooperation Forum is about to be held, highlighting the importance of Southeast Asia in the global data center industry. From April 23 to 25, 2025, the 2025 Digital Infrastructure Technology Expo will be held in Singapore. As a significant event during this period, the "China-ASEAN Digital Infrastructure Cooperation Forum" will be held on the morning of April 23. Since 2025, leading global cloud companies have accelerated their investment in digital infrastructure in Southeast Asia. According to IDC reports, companies like Amazon Web Services, Oracle, Google, and others have announced investments of billions of dollars in digital infrastructure in various countries in Southeast Asia. In the first quarter of this year alone, the digital infrastructure sector in Southeast Asia has attracted investments exceeding 30 billion US dollars. Wanguo Data's forward-looking layout in Southeast Asia is expected to benefit greatly from significant investment in IDC. In 2022, the company established a holding company DAYONE (formerly GDSI) for international business, focusing on Hong Kong and Southeast Asia. As of the end of 2024, DAYONE operated IDC with a capacity of 132MW, while under construction, it had a scale of 369MW, and a reserve scale of 712MW. With DAYONE completing a Series B financing in 2024, the company diluted its stake to 35.6% and is no longer consolidated. This is seen as advantageous for DAYONE to obtain more funds to further expand the market, while also supporting the company to continue to benefit from the rich, forward-looking reserves in the Southeast Asia market. Wanguo Data increases domestic capital expenditure The company expects domestic capital expenditure to be 4.3 billion yuan in 2025, an increase of 43% year-on-year, continuing the growth trend in capital expenditure that began in 2022. Therefore, it is believed that the domestic business will also enter an accelerated growth phase. Risks: IDC market demand lower than expected; intensified competition; IDC construction progress lower than expected.