Robust Financial and Operational Performance
GDS Holdings Limited (NASDAQ:GDS), a leading provider and operator of high-performance data centers in China, delivered another solid quarter of operational execution and financial growth in Q2 2025. The company accelerated the delivery of its existing backlog while maintaining a disciplined, selective approach to securing new business. A key highlight this quarter was the successful IPO of its C-REIT on the Shanghai Stock Exchange—a major step forward in its strategic roadmap.
In the second quarter, GDS reported a 12.4% year-over-year increase in revenue, with adjusted EBITDA growing 11.2%, resulting in an adjusted EBITDA margin of 47.3%.
Strategic Milestone: C-REIT IPO
The successful listing of GDS’s Commercial Real Estate Investment Trust (C-REIT) marks a significant financial and strategic achievement. While the impact of the transaction was not factored into the initial annual guidance, the company reaffirmed its 2025 revenue forecast of RMB11,290 – RMB11,590 million and adjusted EBITDA guidance of RMB5,190 – RMB5,390 million.
Positive Outlook: Positioned to Capitalize on AI and Tier 1 Market Demand
Looking into the second half of 2025, GDS is well-positioned to seize new opportunities in China’s Tier 1 markets. The increasing demand for AI-driven infrastructure continues to serve as a strong tailwind, with GDS’s scalable and high-performance data center capabilities aligning well with client needs.
Stock Rating: Buy – Backed by Solid Fundamentals and AI Growth Tailwinds
We maintain a Buy rating on GDS Holdings (NASDAQ: GDS) at the closing market price of USD 39.97 per share as of 29 September 2025. This rating is backed by its consistent operational execution, resilient financials, and strong positioning in high-demand Tier 1 markets. The company is set to benefit from secular trends, including the rapid adoption of AI technologies, cloud computing, and digital transformation across China. Additionally, the successful C-REIT listing enhances its financial flexibility and capital recycling capabilities, further supporting future growth initiatives. GDS’s commitment to profitable expansion, combined with a steady margin profile and growing backlog delivery, reinforces its long-term investment appeal.
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