Intrinsic value of GDS Holdings Limited - GDS

Previous Close

$34.28

  Intrinsic Value

$85.07

stock screener

  Rating & Target

str. buy

+148%

Previous close

$34.28

 
Intrinsic value

$85.07

 
Up/down potential

+148%

 
Rating

str. buy

We calculate the intrinsic value of GDS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  4,467
  6,902
  10,322
  14,976
  21,129
  29,048
  38,991
  51,197
  65,879
  83,210
  103,328
  126,328
  152,268
  181,169
  213,023
  247,796
  285,441
  325,895
  369,093
  414,970
  463,466
  514,531
  568,126
  624,226
  682,823
  743,925
  807,557
  873,763
  942,601
  1,014,150
Variable operating expenses, $m
  3,301
  4,338
  5,794
  7,776
  10,395
  13,767
  18,000
  23,197
  29,447
  36,826
  43,992
  53,784
  64,828
  77,132
  90,694
  105,498
  121,525
  138,748
  157,140
  176,672
  197,319
  219,060
  241,877
  265,762
  290,709
  316,723
  343,815
  372,001
  401,309
  431,771
Fixed operating expenses, $m
  38
  39
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  70
  71
Total operating expenses, $m
  3,339
  4,377
  5,833
  7,816
  10,436
  13,809
  18,043
  23,241
  29,492
  36,872
  44,039
  53,832
  64,877
  77,182
  90,745
  105,550
  121,579
  138,803
  157,196
  176,729
  197,377
  219,120
  241,938
  265,824
  290,773
  316,788
  343,882
  372,069
  401,379
  431,842
Operating income, $m
  1,128
  2,525
  4,488
  7,160
  10,693
  15,239
  20,948
  27,957
  36,387
  46,338
  59,289
  72,496
  87,391
  103,987
  122,278
  142,246
  163,862
  187,091
  211,897
  238,241
  266,089
  295,412
  326,187
  358,402
  392,050
  427,136
  463,676
  501,693
  541,223
  582,308
EBITDA, $m
  3,623
  5,617
  8,419
  12,233
  17,274
  23,763
  31,910
  41,913
  53,943
  68,145
  84,631
  103,479
  124,736
  148,419
  174,522
  203,019
  233,867
  267,018
  302,418
  340,014
  379,756
  421,602
  465,522
  511,496
  559,515
  609,587
  661,733
  715,987
  772,400
  831,033
Interest expense (income), $m
  33
  857
  1,468
  2,354
  3,598
  5,291
  7,530
  10,410
  14,027
  18,468
  23,809
  30,114
  37,432
  45,799
  55,236
  65,750
  77,337
  89,988
  103,682
  118,399
  134,113
  150,803
  168,445
  187,022
  206,519
  226,927
  248,244
  270,472
  293,620
  317,705
  342,747
Earnings before tax, $m
  271
  1,057
  2,134
  3,562
  5,402
  7,710
  10,538
  13,929
  17,919
  22,530
  29,176
  35,064
  41,592
  48,751
  56,528
  64,908
  73,874
  83,409
  93,498
  104,127
  115,286
  126,966
  139,165
  151,883
  165,123
  178,893
  193,204
  208,073
  223,518
  239,561
Tax expense, $m
  73
  285
  576
  962
  1,458
  2,082
  2,845
  3,761
  4,838
  6,083
  7,877
  9,467
  11,230
  13,163
  15,263
  17,525
  19,946
  22,521
  25,245
  28,114
  31,127
  34,281
  37,575
  41,008
  44,583
  48,301
  52,165
  56,180
  60,350
  64,681
Net income, $m
  198
  772
  1,558
  2,601
  3,943
  5,628
  7,693
  10,169
  13,081
  16,447
  21,298
  25,597
  30,362
  35,588
  41,266
  47,383
  53,928
  60,889
  68,254
  76,013
  84,159
  92,685
  101,591
  110,875
  120,540
  130,592
  141,039
  151,893
  163,168
  174,879

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  33,090
  51,125
  76,457
  110,935
  156,513
  215,170
  288,821
  379,240
  487,990
  616,371
  765,392
  935,766
  1,127,912
  1,341,993
  1,577,945
  1,835,529
  2,114,376
  2,414,035
  2,734,020
  3,073,850
  3,433,082
  3,811,340
  4,208,339
  4,623,896
  5,057,948
  5,510,556
  5,981,906
  6,472,317
  6,982,233
  7,512,224
Adjusted assets (=assets-cash), $m
  33,090
  51,125
  76,457
  110,935
  156,513
  215,170
  288,821
  379,240
  487,990
  616,371
  765,392
  935,766
  1,127,912
  1,341,993
  1,577,945
  1,835,529
  2,114,376
  2,414,035
  2,734,020
  3,073,850
  3,433,082
  3,811,340
  4,208,339
  4,623,896
  5,057,948
  5,510,556
  5,981,906
  6,472,317
  6,982,233
  7,512,224
Revenue / Adjusted assets
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
Average production assets, $m
  19,392
  29,961
  44,806
  65,012
  91,722
  126,097
  169,259
  222,248
  285,979
  361,215
  448,547
  548,391
  660,996
  786,455
  924,731
  1,075,684
  1,239,098
  1,414,709
  1,602,231
  1,801,384
  2,011,906
  2,233,579
  2,466,234
  2,709,765
  2,964,135
  3,229,379
  3,505,606
  3,793,004
  4,091,833
  4,402,426
Working capital, $m
  -2,086
  -3,223
  -4,820
  -6,994
  -9,867
  -13,565
  -18,209
  -23,909
  -30,765
  -38,859
  -48,254
  -58,995
  -71,109
  -84,606
  -99,482
  -115,721
  -133,301
  -152,193
  -172,366
  -193,791
  -216,439
  -240,286
  -265,315
  -291,514
  -318,878
  -347,413
  -377,129
  -408,047
  -440,195
  -473,608
Total debt, $m
  21,912
  35,131
  53,700
  78,972
  112,381
  155,376
  209,362
  275,640
  355,353
  449,456
  558,689
  683,573
  824,416
  981,338
  1,154,291
  1,343,100
  1,547,494
  1,767,144
  2,001,693
  2,250,789
  2,514,106
  2,791,369
  3,082,369
  3,386,973
  3,705,133
  4,036,894
  4,382,394
  4,741,865
  5,115,633
  5,504,117
Total liabilities, $m
  24,255
  37,474
  56,043
  81,315
  114,724
  157,719
  211,706
  277,983
  357,696
  451,800
  561,033
  685,916
  826,760
  983,681
  1,156,634
  1,345,443
  1,549,837
  1,769,487
  2,004,036
  2,253,132
  2,516,449
  2,793,712
  3,084,712
  3,389,316
  3,707,476
  4,039,237
  4,384,737
  4,744,208
  5,117,977
  5,506,460
Total equity, $m
  8,835
  13,650
  20,414
  29,620
  41,789
  57,450
  77,115
  101,257
  130,293
  164,571
  204,360
  249,849
  301,153
  358,312
  421,311
  490,086
  564,538
  644,547
  729,983
  820,718
  916,633
  1,017,628
  1,123,626
  1,234,580
  1,350,472
  1,471,318
  1,597,169
  1,728,109
  1,864,256
  2,005,764
Total liabilities and equity, $m
  33,090
  51,124
  76,457
  110,935
  156,513
  215,169
  288,821
  379,240
  487,989
  616,371
  765,393
  935,765
  1,127,913
  1,341,993
  1,577,945
  1,835,529
  2,114,375
  2,414,034
  2,734,019
  3,073,850
  3,433,082
  3,811,340
  4,208,338
  4,623,896
  5,057,948
  5,510,555
  5,981,906
  6,472,317
  6,982,233
  7,512,224
Debt-to-equity ratio
  2.480
  2.570
  2.630
  2.670
  2.690
  2.700
  2.710
  2.720
  2.730
  2.730
  2.730
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
  2.740
Adjusted equity ratio
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  198
  772
  1,558
  2,601
  3,943
  5,628
  7,693
  10,169
  13,081
  16,447
  21,298
  25,597
  30,362
  35,588
  41,266
  47,383
  53,928
  60,889
  68,254
  76,013
  84,159
  92,685
  101,591
  110,875
  120,540
  130,592
  141,039
  151,893
  163,168
  174,879
Depreciation, amort., depletion, $m
  2,495
  3,092
  3,931
  5,072
  6,582
  8,524
  10,962
  13,956
  17,557
  21,807
  25,342
  30,983
  37,344
  44,432
  52,245
  60,773
  70,006
  79,927
  90,522
  101,773
  113,667
  126,191
  139,335
  153,094
  167,465
  182,451
  198,057
  214,294
  231,177
  248,725
Funds from operations, $m
  2,693
  3,864
  5,489
  7,673
  10,525
  14,152
  18,655
  24,124
  30,637
  38,254
  46,640
  56,579
  67,707
  80,021
  93,510
  108,156
  123,934
  140,816
  158,775
  177,786
  197,826
  218,876
  240,926
  263,969
  288,005
  313,042
  339,096
  366,187
  394,345
  423,604
Change in working capital, $m
  -782
  -1,137
  -1,597
  -2,174
  -2,873
  -3,698
  -4,643
  -5,700
  -6,856
  -8,094
  -9,395
  -10,741
  -12,114
  -13,497
  -14,876
  -16,239
  -17,580
  -18,892
  -20,173
  -21,425
  -22,648
  -23,847
  -25,029
  -26,199
  -27,365
  -28,535
  -29,716
  -30,918
  -32,148
  -33,413
Cash from operations, $m
  3,475
  5,001
  7,086
  9,847
  13,398
  17,850
  23,298
  29,825
  37,493
  46,347
  56,035
  67,321
  79,820
  93,517
  108,386
  124,395
  141,514
  159,708
  178,949
  199,211
  220,473
  242,724
  265,955
  290,167
  315,370
  341,577
  368,812
  397,105
  426,493
  457,017
Maintenance CAPEX, $m
  -685
  -1,096
  -1,693
  -2,531
  -3,673
  -5,182
  -7,124
  -9,563
  -12,556
  -16,157
  -20,408
  -25,342
  -30,983
  -37,344
  -44,432
  -52,245
  -60,773
  -70,006
  -79,927
  -90,522
  -101,773
  -113,667
  -126,191
  -139,335
  -153,094
  -167,465
  -182,451
  -198,057
  -214,294
  -231,177
New CAPEX, $m
  -7,273
  -10,569
  -14,846
  -20,205
  -26,710
  -34,375
  -43,162
  -52,989
  -63,731
  -75,236
  -87,332
  -99,845
  -112,605
  -125,459
  -138,276
  -150,953
  -163,414
  -175,611
  -187,523
  -199,152
  -210,523
  -221,673
  -232,655
  -243,531
  -254,370
  -265,244
  -276,228
  -287,398
  -298,829
  -310,593
Cash from investing activities, $m
  -7,958
  -11,665
  -16,539
  -22,736
  -30,383
  -39,557
  -50,286
  -62,552
  -76,287
  -91,393
  -107,740
  -125,187
  -143,588
  -162,803
  -182,708
  -203,198
  -224,187
  -245,617
  -267,450
  -289,674
  -312,296
  -335,340
  -358,846
  -382,866
  -407,464
  -432,709
  -458,679
  -485,455
  -513,123
  -541,770
Free cash flow, $m
  -4,483
  -6,663
  -9,452
  -12,890
  -16,985
  -21,707
  -26,988
  -32,727
  -38,794
  -45,045
  -51,705
  -57,866
  -63,767
  -69,286
  -74,323
  -78,802
  -82,673
  -85,908
  -88,501
  -90,463
  -91,822
  -92,616
  -92,891
  -92,699
  -92,094
  -91,132
  -89,866
  -88,349
  -86,630
  -84,753
Issuance/(repayment) of debt, $m
  9,119
  13,219
  18,569
  25,273
  33,409
  42,995
  53,986
  66,277
  79,714
  94,103
  109,233
  124,884
  140,843
  156,921
  172,953
  188,809
  204,394
  219,650
  234,549
  249,095
  263,317
  277,263
  291,000
  304,603
  318,160
  331,761
  345,500
  359,471
  373,768
  388,484
Issuance/(repurchase) of shares, $m
  3,115
  4,043
  5,206
  6,605
  8,226
  10,033
  11,972
  13,973
  15,956
  17,831
  18,490
  19,893
  20,941
  21,571
  21,734
  21,392
  20,524
  19,120
  17,182
  14,722
  11,756
  8,310
  4,408
  79
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  12,234
  17,262
  23,775
  31,878
  41,635
  53,028
  65,958
  80,250
  95,670
  111,934
  127,723
  144,777
  161,784
  178,492
  194,687
  210,201
  224,918
  238,770
  251,731
  263,817
  275,073
  285,573
  295,408
  304,682
  318,160
  331,761
  345,500
  359,471
  373,768
  388,484
Total cash flow (excl. dividends), $m
  7,752
  10,599
  14,322
  18,988
  24,650
  31,321
  38,970
  47,524
  56,875
  66,889
  76,019
  86,911
  98,018
  109,207
  120,364
  131,399
  142,245
  152,862
  163,231
  173,354
  183,251
  192,957
  202,517
  211,984
  226,066
  240,629
  255,634
  271,122
  287,138
  303,731
Retained Cash Flow (-), $m
  -3,313
  -4,815
  -6,764
  -9,206
  -12,169
  -15,661
  -19,665
  -24,142
  -29,036
  -34,278
  -39,789
  -45,490
  -51,303
  -57,160
  -62,999
  -68,775
  -74,452
  -80,009
  -85,436
  -90,735
  -95,915
  -100,995
  -105,999
  -110,954
  -115,892
  -120,846
  -125,851
  -130,940
  -136,148
  -141,508
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  4,438
  5,784
  7,558
  9,782
  12,480
  15,660
  19,305
  23,382
  27,839
  32,611
  36,230
  41,421
  46,715
  52,047
  57,365
  62,624
  67,793
  72,853
  77,795
  82,619
  87,336
  91,962
  96,518
  101,030
  110,174
  119,783
  129,783
  140,182
  150,991
  162,223
Discount rate, %
  10.30
  10.82
  11.36
  11.92
  12.52
  13.15
  13.80
  14.49
  15.22
  15.98
  16.78
  17.62
  18.50
  19.42
  20.39
  21.41
  22.48
  23.61
  24.79
  26.03
  27.33
  28.70
  30.13
  31.64
  33.22
  34.88
  36.62
  38.45
  40.38
  42.40
PV of cash for distribution, $m
  4,024
  4,710
  5,474
  6,234
  6,920
  7,464
  7,809
  7,919
  7,780
  7,406
  6,578
  5,910
  5,143
  4,337
  3,545
  2,809
  2,157
  1,606
  1,158
  809
  547
  357
  226
  138
  85
  50
  28
  15
  8
  4
Current shareholders' claim on cash, %
  56.4
  34.7
  22.8
  15.8
  11.4
  8.6
  6.7
  5.4
  4.4
  3.7
  3.2
  2.8
  2.5
  2.3
  2.1
  2.0
  1.9
  1.8
  1.7
  1.7
  1.7
  1.6
  1.6
  1.6
  1.6
  1.6
  1.6
  1.6
  1.6
  1.6

GDS Holdings Ltd is a developer and operator of data centers in China. The Company is engaged in design, build-out and operation of data centers. It operates as a carrier and cloud neutral, which enables its customers to connect to all the People's Republic of China telecommunications carriers, and to access a number of the People's Republic of China cloud service providers, whom it hosts in its facilities. The Company's base of approximately 370 customers consists of Internet companies, financial institutions, telecommunications and information technology (IT) service providers, and domestic private sector and multinational corporations. It serves a community of approximately 160 People's Republic of China and foreign financial institutions across the banking, insurance, asset management, brokerage, digital payment and financial information verticals. The Company operates its data centers in Shanghai, Beijing, Shenzhen, Guangzhou and Chengdu.

FINANCIAL RATIOS  of  GDS Holdings Limited (GDS)

Valuation Ratios
P/E Ratio -651.3
Price to Sales 170.3
Price to Book 60.3
Price to Tangible Book
Price to Cash Flow -1184.2
Price to Free Cash Flow -157.9
Growth Rates
Sales Growth Rate 50%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 34.9%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 119.7%
Total Debt to Equity 143.8%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.8%
Ret/ On Assets - 3 Yr. Avg. -1.8%
Return On Total Capital -4.6%
Ret/ On T. Cap. - 3 Yr. Avg. -4.9%
Return On Equity -11%
Return On Equity - 3 Yr. Avg. -9.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 24.8%
Gross Margin - 3 Yr. Avg. 23%
EBITDA Margin 16.3%
EBITDA Margin - 3 Yr. Avg. 11.5%
Operating Margin -3.9%
Oper. Margin - 3 Yr. Avg. -6.7%
Pre-Tax Margin -26.8%
Pre-Tax Margin - 3 Yr. Avg. -23.5%
Net Profit Margin -26.1%
Net Profit Margin - 3 Yr. Avg. -22.6%
Effective Tax Rate 2.4%
Eff/ Tax Rate - 3 Yr. Avg. 5%
Payout Ratio -27.5%

GDS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GDS stock intrinsic value calculation we used $2792 million for the last fiscal year's total revenue generated by GDS Holdings Limited. The default revenue input number comes from 0001 income statement of GDS Holdings Limited. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our GDS stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.3%, whose default value for GDS is calculated based on our internal credit rating of GDS Holdings Limited, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of GDS Holdings Limited.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of GDS stock the variable cost ratio is equal to 92.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $37 million in the base year in the intrinsic value calculation for GDS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.7% for GDS Holdings Limited.

Corporate tax rate of 27% is the nominal tax rate for GDS Holdings Limited. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the GDS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for GDS are equal to 434.1%.

Life of production assets of 17.7 years is the average useful life of capital assets used in GDS Holdings Limited operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for GDS is equal to -46.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5521.925 million for GDS Holdings Limited - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 117.614 million for GDS Holdings Limited is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of GDS Holdings Limited at the current share price and the inputted number of shares is $4.0 billion.

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