Northeast Securities Initiates Coverage on GD-HKGBA HLDGS (01396) with "Buy" Rating, Highlights Transition to "Digital Ecosystem Operator"

Stock News11-18

Northeast Securities has initiated coverage on GD-HKGBA HLDGS (01396) with a "Buy" rating, citing its strategic pivot from a traditional property developer to a "digital ecosystem operator" through an AI computing-focused acquisition. The integration of its new green-energy computing model with existing industrial-city resources is expected to diversify revenue streams and reshape valuation. Key insights from Northeast Securities include:

1. **Strategic Transformation**: GD-HKGBA HLDGS, a top-100 Chinese property firm with a strong presence in the Greater Bay Area, has shifted from physical space development to becoming an "industrial-city ecosystem service provider." On October 23, 2025, the company repurposed idle industrial assets into high-performance computing centers, marking its evolution into a digital infrastructure player.

2. **AI and Green Computing Expansion**: The completion of a HK$977 million acquisition of Wisdom Knight Holdings Limited—whose subsidiary, Shenzhen Tiandun Data Technology, is a leading green-energy AI computing operator—positions GD-HKGBA in the forefront of sustainable data center services.

3. **Debt Restructuring and Business Synergy**: A 98.33% approval rate for its $440 million debt-to-equity swap in May 2025 reduced interest-bearing liabilities to 7%, freeing capital for growth. Tiandun Data’s dual focus on multi-source computing services and AI data center operations has proven commercially viable, enhancing efficiency and profitability.

4. **New Growth Drivers**: The "green-energy computing" model complements GD-HKGBA’s industrial-city expertise, converting underutilized assets into AI infrastructure. Partnerships with major cloud providers and AI firms further diversify revenue through computing services, energy management, and space operations, bolstering financial resilience.

5. **Valuation Upside**: The merger enables an asset-light "industrial operation + computing revenue" dual-engine model, likely to re-rate the stock. Northeast Securities forecasts 2025–2027 net profits of RMB718/579/789 million (+139.1%/-19.4%/+36.4% YoY), with a target PE of 9x/11x/8x.

**Risks**: Include potential order shortfalls, computing capex delays, rental declines, and earnings misses.

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