On June 22, GDS Holdings (09698.HK) fell 6.14% in regular trading, trading at HKD 29.88/share, with turnover of HKD 60.64 million, extending its recent downtrend.

On the news front, the company's Q1 net profit of RMB 2.652 billion was predominantly driven by one-time investment gains from DayOne equity operations, accounting for over 80% of total earnings. After stripping out non-recurring items, core business revenue growth decelerated to single digits, fueling ongoing profit quality concerns. Additionally, management reiterated a capex plan of RMB 30-50 billion over the next three years, while total liabilities stand at RMB 51.693 billion amid shrinking operating cash flow, intensifying market anxiety over near-term financial pressure.

Sector-wide weakness was evident, with peer Kingsoft Cloud declining 6.86% on the same day. Despite AI Token demand narratives previously supporting data center valuations, fundamental concerns around leverage and earnings sustainability continue to dominate sentiment for GDS Holdings.

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