Introduction to this report:
The performance was in line with expectations, and the guidelines for the annual performance target remained unchanged. The domestic business received two new large-scale orders, and the performance continued to grow steadily. International business demand is growing rapidly, and the company's layout continues to deepen.
Summary:
Lower the profit forecast and target price to maintain the increase in holdings rating. The company's adjusted EBITDA for 2023 was lowered to 45.02 billion yuan (pre-2023 value of 6.379) billion yuan, adding the 2024-2025 forecast to 51.29/5.938 billion yuan. Considering the expansion and implementation of the company's overseas projects, referring to the same industry level, the company was given 12 times the EV/EBITDA in 2024, lowered the target price to HK$16, and maintained an increase in holdings rating.
The performance was in line with expectations, and the guidelines for the annual performance target remained unchanged. 2023Q3 net revenue was 2,519 billion yuan (US$345.3 million), up 6.4% year on year; adjusted EBITDA was 1,126.3 billion yuan (US$154.4 million), up 5.6% year on year, and the adjusted EBITDA rate was 44.7%.
The domestic business received two new large-scale orders, and performance continued to grow steadily. Q3 The domestic business received two large-scale orders, both from major domestic Internet companies signing contracts at GDS Langfang Data Center. The operating area of the Q3 data center increased by nearly 23,000 square meters, including the newly built data center in Langfang. The total usage area is about 8,000 square meters, and 100% of the contracts have been signed. The company expects to continue to invest about 20,000 square meters of operating space in the fourth quarter of this year, half of which comes from domestic sources, and is already 100% contracted.
International business demand is growing rapidly, and the company's layout continues to deepen. In the Hong Kong region of China, GDS's first self-built data center, Hong Kong No. 1, was officially put into use, and nearly 100% of the contracts were signed. Furthermore, construction of the Hong Kong No. 2 data center is being accelerated and is expected to receive customer reservations in the near future. In Malaysia, NTP1, located in the hyperscale data center park of Universal Data Center Nusajaya Science Park, was officially put into operation. In Singapore, the company is finalizing the site selection for the first data center project, which will be put into operation by 2026. In Indonesia, the company signed a contract with the Indonesian sovereign wealth fund INA to establish a joint venture and jointly develop a data center project in Indonesia. The two sides are cooperating on the first project in Batam to begin construction of related infrastructure.
Risk warning: Data center delivery falls short of expectations, customer launches or falls short of expectations, industry competition intensifies.