9698.HK Earnings Beat: GDS Holdings Q2 2026 Crushes Estimates

GDS Holdings Limited (9698.HK) delivered a massive earnings surprise on (May 20, 2026), crushing analyst expectations on both earnings and revenue. The Hong Kong-listed data center operator reported earnings per share of $0.19, crushing the estimate of $-0.03 by an extraordinary 680%. Revenue came in at $3.88 billion, beating the $3.43 billion forecast by nearly 13%. This strong performance marks a significant turnaround for the company and signals robust demand for its data center services across China.

9698.HK Earnings Preview: EPS and Revenue Expectations

The earnings beat was historic. GDS Holdings swung from an expected loss of $0.03 per share to a profit of $0.19, representing a 679.98% beat. Revenue growth of 12.95% above estimates demonstrates strong operational execution and pricing power in China’s competitive data center market. This quarter’s performance reflects accelerating demand from cloud providers and financial institutions seeking reliable infrastructure.

GDS Holdings Limited Stock Valuation and Key Financial Metrics

The stock trades at a PE ratio of 62.79 with a market cap of $61.69 billion. Despite the strong earnings beat, 9698.HK stock has declined 16.86% recently, trading at HK$34.22. The company maintains a healthy current ratio of 2.60, indicating solid liquidity. Operating margins improved with EBIT growth of 27.3%, though debt-to-equity remains elevated at 1.77.

What to Watch in GDS Holdings Limited Earnings Report

GDS Holdings Limited earnings showed operating income growth of 27.3%, outpacing revenue growth. The company’s gross margin of 22.6% reflects pricing discipline. However, net income declined 73% year-over-year due to higher tax rates at 32.3%. Management’s ability to expand operating leverage while managing debt will be critical for future performance.

9698.HK Stock Forecast and Analyst Outlook

Meyka AI rates 9698.HK with a grade of B, suggesting a neutral hold position. The yearly price forecast stands at $54.93, implying potential upside from current levels. Technical indicators show oversold conditions with RSI at 39.04 and CCI at -173.43, suggesting possible near-term recovery. The five-year forecast of $123.29 reflects confidence in long-term data center demand.

Final Thoughts

GDS Holdings Limited’s Q2 2026 earnings on (May 20, 2026) represent a turning point for the company, with both EPS and revenue significantly exceeding expectations. The 680% EPS beat and 13% revenue beat demonstrate strong operational momentum despite recent stock weakness. While elevated leverage and tax headwinds warrant monitoring, the company’s market position in China’s growing data center sector remains compelling for long-term investors.

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Disclaimer:

Stock markets involve risks. This content is for informational purposes only. Earnings estimates are analyst projections and not guarantees of actual results. Past performance does not guarantee future results. Meyka AI PTY LTD provides market analysis and data insights, not financial advice. Always conduct your own research and consider consulting a licensed financial advisor.