Nomura raises GDS target price to $60.4, expects upward potential in this year's order guidance

Nomura published a research report stating that GDS (09698.HK) is refocusing its strategy on the domestic market, guiding that new orders will exceed 500 megawatts by 2026, representing a year-on-year growth of 58%. The firm believes this target is achievable and has upside potential, as 200 megawatts of contracts have already been signed year-to-date, along with a memorandum of understanding for 500 megawatts with major cloud service providers.

On the other hand, GDS has secured over 3 gigawatts of land and power resources in newly developed areas such as Inner Mongolia and Ningxia, accompanied by customer demand, which helps alleviate market concerns about its supply capacity in areas surrounding first-tier cities.

The firm has raised its adjusted EBITDA forecasts for GDS for 2026 and 2027 by 0.9% to 1.5% to reflect new customer commitments. It has also introduced a forecast for 2028, expecting revenue and adjusted EBITDA to grow by 21% and 22%, respectively; it reiterated a "Buy" rating and raised the target price for GDS (GDS.US) from $54.5 to $60.4