1、China(PRC)|Technology*Jefferies Hong Kong LimitedEdisonLee,CFA*|Equity Analyst852 3743 8009|CharlieBai*|Equity Analyst852 3767 1125|NickCheng*|Equity Analyst+852 3743 8750|JackyHe*|Equity Analyst+852 3743 8084|MattMa*|Equity Analyst852 3767 1109|China IDC 3Q Preview-More Upside to ComeGDS/VNET will

2、report 3Q24 results on Nov 19/21.We expect both toreport DD EBITDA growth YoY,driven by improving wholesale move-in.While GDS results are likely in line,we expect GDSI to show more ordergrowth and power secured.We see upside in VNETs 3Q results andFY24 guidance given rapid ramp-up in its largest who

3、lesale customer.Ouranalysis indicates robust server demand in China,+ve for both GDS/VNET.VNETs asset sale could also be announced soon.GDS 3Q24 results likely in line;focus will be on metrics of GDSI.We expect GDS to report18%/15%rev/EBITDA growth for 3Q24,in line with cons.Its China rev is forecas

4、t to grow 4%YoY,driven by its UTR rising from 73%a year ago to 78%.That reflects healthier movie-inby its two major Chinese CSP customers.For GDSI,we forecast 510%/18%YoY/QoQ growthin rev.We believe the market will focus on order growth and power secured at GDSI.Basedon GDS announcement of its 2nd r

5、ound of equity raise at GDSI(Oct 29),GDSIs IT powersecured has risen 34%from its 2Q24 disclosure to 1,070MW,and power in service as wellas under construction has risen by 15%since 2Q24 to 480MW(here).Following our recentMalaysia data center trip,we have become more confident in GDSIs competitive pos

6、itionand growth prospect in Johor(here).Trading at 12x 2025E EV/EBITDA vs 16%EBITDA Cagr(2025E-2028E),GDS remains highly attractive.However,we believe the stock may take abreather until we are closer to news about asset sale in China(that helps to acceleratedeleveraging)and/or GDSIs IPO(late 2025).V