Summary of Key Points from the Conference Call Industry Overview - The China data center sector is positioned as a crucial component in the AI ecosystem, benefiting from increased investments by internet companies in AI applications and infrastructure [1][9] - Anticipated dual-track expansion in chip supply, computing power demand, and regional capacity across East and West China [1][13] Core Insights - Order volume for China data center stocks is expected to be a primary focus for investors in 4Q25 and into 2026, with potential for earlier and larger demand due to the bidding process by internet hyperscalers [2][9] - GDS and VNET are projected to see significant growth in adjusted EBITDA, with GDS expected to grow by 12% and VNET by 23% year-over-year in 2027 [2][9] - DayOne, partially owned by GDS, is expanding its capacity with a total of 1.8GW secured by the end of 2025, including a mezzanine financing facility of €500 million to support its developments in Finland [3][9] Financial Projections - GDS's revenue is projected to reach Rmb 11.5 billion in 2025E, with an EBITDA of Rmb 5.4 billion [11][70] - VNET's revenue is expected to be Rmb 9.9 billion in 2025E, with an EBITDA of Rmb 2.9 billion [11][70] - SUNeVision's revenue is forecasted at Rmb 3.3 billion in 2025E, with an EBITDA of Rmb 2.4 billion [11][70] Capital Expenditure and Financing - GDS's organic capex is expected to reach Rmb 7 billion in 2026E, while VNET's capex is projected to exceed Rmb 8 billion [43][44] - Both companies are leveraging favorable financing channels, including private REITs, to support their capital expenditures [43][44] Market Dynamics - The data center market is expected to see a 14% CAGR in live capacity from 2025 to 2028, driven by demand from internet, cloud, and AI sectors [54][59] - Wholesale demand is projected to grow at a 19% CAGR, while retail demand is expected to grow at a lower rate due to physical constraints [54][59] Competitive Landscape - GDS and VNET are expected to account for approximately 13% of China's data center live demand by 2028, indicating ongoing industry consolidation [56][66] - The competitive environment may intensify as companies prioritize operational efficiency and wallet share in the face of rising demand [13][43] Additional Insights - The approval of Nvidia H200 chips for import into China could significantly impact the data center bidding process and chip supply dynamics [13][35] - The utilization rates of data centers are expected to improve, particularly in regions with lower power costs and favorable government incentives [43][56] Conclusion - The China data center sector is poised for growth driven by AI investments, favorable financing conditions, and increasing demand from cloud and internet services. GDS and VNET are well-positioned to capitalize on these trends, with significant projected revenue and EBITDA growth in the coming years [1][2][9][54]

Summary of Conference Call Notes Industry and Companies Involved - **Industry**: Communications Equipment - **Companies Covered**: - Accelink Technologies (002281.SZ) - Eoptolink Technology (300502.SZ) - EverProX Technologies (300548.SZ) - GDS Holdings (GDS.O) - Innolight (300308.SZ) - Suzhou TFC Optical Communication (300394.SZ) - T&S Communications (300570.SZ) - VNET Group (VNET.O) - ZTE (0763.HK) Key Points and Arguments EverProX Technologies (300548.SZ) - Target price raised to Rmb122 from Rmb63, reflecting a 46.5x 2026E EPS valuation, which is +1 standard deviation above the 5-year historical mean due to stronger earnings growth projected at a 152% 3-year CAGR [2][11] - 2025/26/27E earnings increased by 1%/26%/45% driven by robust overseas demand for MPO/AOC components, datacenter cables, and optical transceivers [2][11] - Rated as Neutral due to high current trading P/E of ~45x compared to T&S Communications at ~32x, indicating less upside potential [2][11] Suzhou TFC Optical Communication (300394.SZ) - Target price increased to Rmb222 from Rmb196, with 2026/27E earnings raised by 36%/56% due to anticipated growth in the 1.6T light engine market [3][15] - Maintained Buy rating, citing strong long-term earnings growth potential from CPO/OIO total addressable market opportunities and expected sales of FAU, ELSFP, and MT products [3][15] ZTE (0763.HK) - Downgraded to Neutral from Buy, with target price raised to HK$29.20 from HK$27.50 [4][19] - 2025/26/27E earnings reduced by 16%/14%/11% due to margin impacts from a ramping server business and memory price effects on the smartphone segment, partially offset by tighter operating expenses [4][19] - Valuation set at 15.0x 2026E P/E, which is 1.5 standard deviations above the stock's historical average, supported by positive sentiment towards AI server developments [4][19] Accelink Technologies (002281.SZ) - Coverage transferred with a maintained Sell rating and target price of Rmb24.60 [8][20] Eoptolink Technology (300502.SZ) - Coverage transferred with a maintained Buy rating and target price of Rmb472.00 [9][21] GDS Holdings (GDS.O) - Coverage transferred with a maintained Buy rating and target price of US$51.20 [12] Innolight (300308.SZ) - Coverage transferred with rating suspended [13] T&S Communications (300570.SZ) - Coverage transferred with a maintained Buy rating and target price of Rmb137.00 [16] VNET Group (VNET.O) - Coverage transferred with a maintained Buy rating and target price of US$20.00 [17] Other Important Information - The report indicates potential conflicts of interest due to the firm's business relationships with covered companies, advising investors to consider this report as one of several factors in their investment decisions [5] - The report is not for distribution in the People's Republic of China, excluding Hong Kong and Qualified Foreign Institutional Investors [5]

Group 1 - The stock of GDS Holdings Limited (09698.HK) increased by over 3%, specifically by 3.3%, reaching a price of 43.18 HKD [2] - The trading volume amounted to 47.1347 million HKD at the time of reporting [2]

Group 1 - The core point of the article is that 21Vianet Group, Inc. (万国数据-SW) has announced a share buyback agreement with DayOne Data Centers Limited, which will allow the company to recover approximately 95% of its investment in DayOne, with an expected return on investment of nearly 6.5 times [1][1][1] - The buyback involves a total value of $385 million for DayOne common stock, with the buyback price per share aligned with the recently announced price of over $2 billion for DayOne's Series C convertible preferred stock [1][1][1] - Following the buyback, the remaining equity held by 21Vianet in DayOne is valued at over $2.2 billion, equating to approximately $11.18 per American depositary share of 21Vianet [1][1][1] Group 2 - 21Vianet intends to reallocate the proceeds from the share buyback to invest in emerging opportunities within its core business in China that have significant return potential [1][1][1]

Summary of Conference Call on China Data Center Sector Industry Overview - **Sector Performance**: China data center stocks, specifically VNET and GDS, showed significant gains with VNET up by 11% and GDS by 8% due to an improving demand outlook for data centers as internet/cloud companies in China initiate new project bidding processes [1][2] - **Future Outlook**: The sector is expected to see stronger new orders in 2026 compared to 2025, easing AI chip supply issues, and potential support for rental pricing due to supply tightening [1][2] Key Points Order Recovery - **Recent Trends**: The China data center sector experienced a slowdown in new orders from April to July 2025, attributed to U.S. restrictions on H20 chips. However, a recovery began in August 2025, led by ByteDance, with total demand potentially exceeding 1GW [2][3] - **Beneficiaries**: Companies with ample land and power resources, particularly in western China or around Beijing, are expected to benefit from this recovery [2] AI Chip Supply Issues - **Current Situation**: The limited availability of advanced GPUs has led Chinese cloud service providers to increasingly procure domestic AI accelerators. The listing of more domestic AI accelerator companies is expected to enhance competition in the market [3] - **Future Prospects**: The potential resumption of advanced GPU offerings from overseas could alleviate the current supply issues [3] Rental Pricing Dynamics - **Market Trends**: Data center rental pricing was on a downward trend in 2023-2024 but stabilized in 2025. The Chinese government has tightened approvals for new data center projects since Q2 2025, which may help rationalize supply and support rental pricing [4] - **Projected Changes**: By the end of 2025, a limited number of new projects are expected to receive approvals, particularly in northern and western China, which may further tighten supply and support pricing [4] Valuation Comparisons - **Valuation Metrics**: China data center stocks are trading at lower valuations compared to global peers, with VNET and GDS at 11x and 14x FY26E EV/EBITDA respectively, compared to around 20x for global counterparts [1][8] - **Price Objectives**: The price objective for VNET is set at US$15.1, while for GDS it is US$50.0 / HK$49.1, reflecting a discount for lower profitability in the China business [7][17][19] Risks Upside Risks - Faster-than-expected growth in new wholesale orders - Quicker ramp-up in utilization levels - Supportive government policies for the data center industry [18][19] Downside Risks - Increased competition leading to lower service prices - Slower client onboarding - AI chip shortages due to further overseas restrictions [18][20] Conclusion - The China data center sector is poised for a recovery with improving demand and potential support for pricing. Companies like VNET and GDS are recommended as "Buy" due to their compelling valuations and growth prospects in the evolving market landscape [1][7][19]

Core Viewpoint - The company, GDS Holdings Limited (万国数据-SW), has entered into a final agreement with DayOne Data Centers Limited for the repurchase of $385 million worth of DayOne common stock, which will allow the company to recover approximately 95% of its investment principal in DayOne, yielding a return on investment of nearly 6.5 times [1] Group 1 - The repurchase price per share of common stock is aligned with the recently announced issuance price of over $2 billion in Series C convertible preferred stock by DayOne [1] - Following the repurchase, the remaining equity held by the company in DayOne is valued at over $2.2 billion, equating to $11.18 per American depositary share of the company [1] - The company intends to reallocate the proceeds from the stock repurchase to invest in emerging opportunities within its core business in China that have significant return potential [1]

Group 1 - The company, GDS Holdings Limited, has entered into a final agreement with DayOne Data Centers Limited to repurchase $385 million worth of DayOne common stock [1] - The repurchase price per share is aligned with the recently announced price of DayOne's new issuance of over $2 billion in Series C convertible preferred stock [1] - This repurchase will allow the company to recover approximately 95% of its investment principal in DayOne, achieving a return on investment of nearly 6.5 times [1] Group 2 - Based on the new issuance price from the Series C round, the remaining equity held by the company in DayOne is valued at over $2.2 billion, equating to $11.18 per American Depositary Share of the company [1] - The company intends to reallocate the proceeds from the stock repurchase to invest in emerging opportunities within its core business in China that have significant return potential [1]

Core Viewpoint - The company, GDS Holdings Limited (09698.HK), has entered into a final agreement with DayOne Data Centers Limited for the repurchase of common shares valued at $385 million [1] Group 1 - DayOne will repurchase common shares from the company at a price equivalent to the recently announced issuance of over $2 billion in Series C convertible preferred shares [1]

Core Viewpoint - The company, GDS Holdings Limited, has entered into a final agreement with DayOne Data Centers Limited to repurchase $385 million worth of DayOne common shares, indicating a significant return on investment and strategic repositioning of funds for future opportunities [1] Group 1: Financial Details - The repurchase price per common share is aligned with the recently announced issuance price of over $2 billion in Series C convertible preferred shares by DayOne [1] - The repurchase will allow GDS to recover approximately 95% of its initial investment in DayOne, achieving a return on investment of nearly 6.5 times [1] - The remaining equity held by GDS in DayOne is valued at over $2.2 billion, equating to $11.18 per American Depositary Share of GDS [1] Group 2: Strategic Intent - GDS intends to reallocate the proceeds from the share repurchase to invest in emerging opportunities within its core business in China that have significant return potential [1]

香港交易及結算所有限公司、香港聯合交易所有限公司（「香港聯交所」）及香港中央結算有限公 司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不就因 本公告全部或任何部分內容所產生或因依賴該等內容而引致的任何損失承擔任何責任。 萬國數據控股有限公司*（「本公司」）以不同投票權控制。股東及有意投資者務請留意投資不同 投票權架構公司的潛在風險，特別是不同投票權受益人的利益未必總與股東整體利益一致，而 不論其他股東如何投票，不同投票權受益人會對股東決議案的結果有重大影響。我們的美國存 託股（每股美國存託股代表八股A類普通股）於美國納斯達克全球市場上市，股份代號為GDS。 承董事會命 GDS Holdings Limited 萬國數據控股有限公司* （於開曼群島以GDS Holdings Limited的名稱註冊成立及以不同投票權控制的有限公司， 並以GDS WanGuo Holdings Limited於香港經營業務） （股份代號：9698） 自願公告 本公告由萬國數據控股有限公司（「本公司」或「萬國數據」，連同其附屬公司統稱 「本集團」）自願作出。 本公司宣佈，其已與DayOne Data ...