FAST NEWS: High Costs Keep GDS in the Red
The latest: Independent data center operator GDS Holdings Ltd. (GDS.US; 9698.HK) reported its net loss widened by 12.6% year-on-year to 339 million yuan ($47.4 million) in the third quarter, marking its ninth consecutive quarterly loss.
Looking up: The company’s third-quarter net revenue increased by 14.9% to 2.37 billion yuan, and customer commitments and pre-commitments for space at its data centers increased by 16% to 618,369 square meters compared to the same period last year.
Take Note: The company’s cost of revenue increased 16.7% year-over-year and 1.8% quarter-over-quarter to 1.88 billion yuan in the third quarter, mainly due an increase in utility costs on greater utilization of its facilities and seasonally higher power consumption. In addition, its quarterly general and administrative expenses increased by 15.3% to 302 million yuan.
Digging Deeper: Founded in 2000, GDS is an information technology infrastructure services provider that was listed on the Nasdaq in 2016 and in Hong Kong four years later. The company has expanded rapidly in recent years, both at home and abroad. It is developing projects in Indonesia and Malaysia in its bid to expand beyond China and become a regional data center operator. It said 26,000 square meters of the more than 30,000 square meters of new bookings in the third quarter came for its data center under development in Johor, Malaysia.
Market Reaction: GDS’ Hong Kong-listed shares fell 5.7% when trading began on Tuesday, before rallying to close up 3.2% to HK$14.16 by the midday break. The stock now trades at the lower end ofits 52-week range.
Translation by Jony Ho
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