Management outlined its capex and funding plans for 2023 to support China and international operations.
He cut the price target on a slower recovery ramp from macro-related pressures and more conservative valuation parameters.
Management expects to surpass its 70K sqm bookings target for 2022 and believes, based on early signs of recovery in customer demand, that it can maintain momentum in the next few quarters, including a modest recovery in cloud demand in 2023.
Based on customer discussions, management is comfortable with the level of commitment for the backlog.
A few sizeable Chinese cloud and Internet customers have requested an elongation of the move-in period to three years from two years.
Management believes move-in rates could improve mid-term as some large Internet orders have move-in periods shorter than two years.
In China, management is focused on delivering the backlog and is selective about new business.
Management is focused on international expansion as a secondary growth driver, supported by existing customers seeking capacity internationally.
Management expects total uses for mainland China in 2023 of ~C¥5.5 billion and total sources of over C¥6 billion, including internally generated cash, a subscription agreement with an SWF, and a partial SLB.
Price Action: GDS shares traded higher by 15.46% at $13.52 on the last check Tuesday.
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