GDS Doubles Sales Target as DayOne Revaluation Boosts Data Centre Giant to Profit

GDS Holdings, China's largest data centre operator outside the state sector, has doubled its full-year 2026 sales target to 1 gigawatt after achieving record bookings in the first half.

The company's chairman and CEO, William Huang, credited AI demand for driving strong sales. Huang stated that the firm's sales momentum is the strongest it has ever seen, and that it is very excited about the opportunities in China ahead of it, driven mainly by AI demand.

Despite the signals of future prosperity, the company continued to record losses on an operating basis. However, the company's expanding pipeline is expected to translate into higher revenue starting in the second half of 2027.

### DayOne Stake Boosts Bottom Line

GDS swung to a net profit of RMB 838 million in the April through June period from a net loss of RMB 71 million in the year-earlier period, thanks to a roughly RMB 960 million gain resulting from an increase in valuation for DayOne, the company's former offshore unit.

DayOne was valued at around $11 billion in a series C equity financing round closed in June. GDS continues to hold a 19.9 percent stake in DayOne, which has confidentially filed for a US IPO that is expected to raise around $5 billion.

Absent the DayOne revaluation, GDS's underlying business remained in the red, with the data centre operator losing around RMB 122.3 million on an operating basis.

The new bookings promise stronger growth in the future for the Shanghai-based company as revenue rose just 6.5 percent to RMB 3.09 billion in the second quarter, compared to the same period a year earlier.

Investors were heartened by the company's results with HKEX-listed shares in GDS closing Friday up 10.31 percent after its earnings had been posted after the market closed on Thursday.

### Tech Giants Drive Demand

The company is boosting its full-year estimate for new bookings amid a surge of AI demand, with the GDS winning new business from each of its three largest hyperscale customers in the second quarter.

The company did not name those customers, but historically GDS has counted Alibaba Cloud and Tencent Cloud among its clients. Huang stated that China's tech giants and emerging AI leaders are driving the adoption of advanced models, which has led to a structural upgrade in the demand for computing power and AI infrastructure.

In addition to recording 263 megawatts of new bookings in the April to June period, GDS also secured 471 megawatts of binding commitments in the first six months of 2026, and 600 megatts of reservations for future expansion by existing customers.

The company aims to end 2026 with over 1 gigawatts of new reservations on top of its 1 gigawatts sales target.

### Scaling Up in Inner Mongolia

GDS announced plans in May to invest RMB 30 billion to RMB 50 billion in the next three years in AI infrastructure. In June, the company signed a strategic partnership agreement with the local government of Ulanqab in northern China's Inner Mongolia, committing to invest RMB 30 billion in the next five years to build a number of high-density and gigawatt-scale data centre parks in the city.

Continuing its monetisation moves, GDS is preparing to sell a second asset to its Shanghai-listed C-REIT, which Newman noted is currently under regulatory review. The asset is located south of Beijing in the Hebei province city of Langfang and comprises three data centre buildings.

| Metric | 2026 Sales Target | 2026 Sales Target (doubled) | | --- | --- | --- | | Gigawatts | 0.5 | 1 | | Megawatts (new bookings) | 208 | 263 | | Megawatts (binding commitments) | - | 471 | | Megawatts (reservations) | - | 600 |