image credit: Bamboo Works
Key Takeaways:
GDS swung to a net profit of 960 million yuan last year, reversing years of losses, as its revenue rose 10.8% to 11.43 billion yuan
The data center operator recorded a 2.36 billion yuan one-time gain during the year from deconsolidation of a subsidiary
AI's rapid rise has created a large array of winners, including data center operators that sit squarely in the sweet spot of this transformative wave. As demand for computing power skyrockets, such operators have become the critical backbone of the AI supply chain. For leading Chinese operator GDS Holdings Ltd. (NASDAQ:GDS) (9698.HK), the most tangible evidence of that shift was a marked acceleration in new orders and customer demand last year, which was disclosed in its latest financial report released last week.
The report showed GDS achieved five-year highs in both new bookings and gross move-ins. Its utilized area climbed to 504,800 square meters, driving its utilization rate up to 75.5%. Its revenue for the full year hit 11.43 billion yuan ($1.63 billion), up 10.8% year-on-year. Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also posted double-digit growth, rising to 5.4 billion yuan. Those factors helped the company to end its years of losses, reporting a net profit of 960 million yuan for the year.
Paper profits
But a deeper dive into the report reveals a less rosy picture, at least in terms of the newfound profits. The company's core operations remained in the red, with an operating loss of about 55.8 million yuan. At the same time, GDS booked a hefty 1.56 billion yuan loss on asset impairments, signaling underperformance of some assets.
The path to profitability was paved largely by non-recurring items, including 716 million yuan from its share of results of associates and joint ventures, and a massive 2.36 billion ...
