Movement Alert｜GDS-SW falls 12.99% in Regular Trading, Daiwa target cut and margin pressure remain in focus

Market Focus10-15

On October 15, GDS-SW fell 12.99% in Regular Trading, trading at HK$25.46, with turnover of HK$28.17 million.

The clearest recent catalyst in public information is Daiwa’s October 10 target-price cut to HK$50 from HK$54, while maintaining a buy rating. The broker said GDS-SW is positioned to benefit from the AI infrastructure capital expenditure cycle, but revenue conversion will take time, and it lowered its 2027-2028 revenue forecasts by 5% to 9% and adjusted EBITDA forecasts by 4% to 10% to reflect weaker unit economics.

That more cautious medium-term view followed the company’s latest reported results. In the second quarter, revenue rose 6.5% year over year to RMB3.088 billion, adjusted EBITDA increased 2.5% to RMB1.406 billion, but adjusted EBITDA margin fell to 45.5% from 47.3% and gross margin declined to 21.5% from 23.8%. While full-year guidance was raised, the margin compression appears to have remained an overhang on sentiment.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)

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