GMT EIGHT - Company

From GDS Holdings Ltd. Sponsored ADR Class A (GDS.US) perspective on REITs: Asset Securitization is reshaping the landscape of the data center industry.

On the road to asset securitization, GDS Holdings Ltd. Sponsored ADR Class A (GDS.US) has taken another crucial step. Information from the Shanghai Stock Exchange official website shows that on March 26th, the Southern GDS Holdings Ltd. Sponsored ADR Class A Center Closed-End Infrastructure Securities Investment Fund (hereinafter referred to as "Southern GDS Holdings Ltd. Sponsored ADR Class A Center REIT") with GDS Holdings Ltd. Sponsored ADR Class A as the original equity holder has been "accepted". The fund started the application process on March 25th and was accepted by the Shanghai Stock Exchange just 1 day later. As one of the first batch of data center public REITs in the market, the Southern GDS Holdings Ltd. Sponsored ADR Class A Center REIT, once disclosed, quickly attracted widespread market attention. In early March of this year, GDS Holdings Ltd. Sponsored ADR Class A successfully issued China's first data center asset-backed securities (ABS), considered as the first private placement REIT in the IDC industry by the market. Less than a month later, the declaration of this public REIT further enhanced GDS Holdings Ltd. Sponsored ADR Class A's first-mover advantage in capital-supported new infrastructure. Industry insiders told GMTEight that the launch of the Southern GDS Holdings Ltd. Sponsored ADR Class A Center REIT is a milestone for the industry. "Data center REITs combine 'technology + real estate' attributes, with cash flow being more stable than traditional commercial real estate. The valuation system is expected to move closer to growth stocks. In a low-interest rate environment, its relatively stable dividend mechanism has strong appeal to insurance funds, bank wealth management, and other investors." Constructing REITs foundation with scarce and high-quality assets GMTEight learned that the Southern GDS Holdings Ltd. Sponsored ADR Class A Center REIT adopts a dual-layer structure of "public funds + infrastructure asset-backed securities," with over 80% of assets invested in underlying infrastructure asset-backed securities, holding the full equity of the Kunshan Guojin Data Cloud Computing Data Center project (referred to as the "Guojin Data Center") through specialized operations to generate stable cash flows from cabinet hosting service fees. The product is managed by Southern Fund as the fund manager, China Merchants Bank as the fund custodian, and Huatai United Securities as the financial advisor. The core asset of the fund is the Guojin Data Center, valued at 2.195 billion RMB as of September 30, 2024 (valuation subject to final regulatory approval). Based on this valuation as of that date, the fund is planned to raise 2.265 billion RMB (valuation subject to final regulatory approval). The high valuation of the Guojin Data Center is due to its high-quality and scarce asset characteristics. Located in Huaqiao Town, Kunshan City, Suzhou, Jiangsu Province, the data center covers an area of nearly 20,000 square meters with a building area of 35,400 square meters and equipped with 4,192 cabinets. This region is a core area of data demand in the Yangtze River Delta, a key node in the strategic layout of "Eastern Number, Western Calculate." The economically developed Yangtze River Delta region has industrial clustering and is home to a large number of large enterprises and internet giants, generating demand for data processing and storage. The Guojin Data Center, with its superior geographical location, can respond quickly to customer needs and provide efficient data center services. Additionally, the region has complete network infrastructure and stable energy supply, providing a solid guarantee for the operation of the data center. The REIT prospectus shows that the Guojin Data Center has maintained an average occupancy rate of 100% in the past three years and the most recent period, with a billing rate stable at over 90%, and a hosting service fee collection rate of 100%. It is worth mentioning that in the current global consensus on green development, the Guojin Data Center has a renewable energy utilization rate of 100%, aligning with the global trend of green development and helping companies operate sustainably in the long term while also addressing investors' focus on green environmental projects. Companies' sound operations provide support for asset securitization The high-quality assets of the Guojin Data Center lay a good foundation for GDS Holdings Ltd. Sponsored ADR Class A to carry out the REITs project, while the company's sound operating performance further provides strong support for asset securitization. In 2024, GDS Holdings Ltd. Sponsored ADR Class A achieved a net revenue of 10.322 billion RMB, a year-on-year increase of 5.5%; adjusted EBITDA reached 4.8764 billion RMB, a year-on-year increase of 3%; the adjusted EBITDA margin was 47.2%, and the net profit for the year was 3.304 billion RMB. GDS Holdings Ltd. Sponsored ADR Class A's overseas operating brand, DayOne Data Centers Limited, completed a Series B equity financing on December 31, 2024, with the company diluting its equity interest in DayOne and treating it as an equity investment object, no longer consolidated into the financial statements. Without considering the impact of DayOne's "deconsolidation," the performance of GDS Holdings Ltd. Sponsored ADR Class A for 2024 has exceeded expectations, demonstrating strong internal growth momentum and risk resistance. Looking forward to 2025, GDS Holdings Ltd. Sponsored ADR Class A plans to...The release of AI inference demand and capacity in the Tier1 market is expected to further improve performance.According to GMTEight, GDS Holdings Ltd. Sponsored ADR Class A has established a complete layout in Beijing, Shanghai, Shenzhen, and surrounding cities, with a nearly one gigawatt developable capacity, fully adaptable to AI inference requirements. In the first quarter of 2025, the company has secured 152MW of AI-related orders, expected to be delivered within 6 months. This is the largest single order the company has ever received in China, confirming GDS Holdings Ltd. Sponsored ADR Class A's technological advantage in high-power intelligent computing centers. Although the implementation period for large-scale demand is 12-18 months, the explosive demand for AI-driven computing power is a certainty. GDS Holdings Ltd. Sponsored ADR Class A's early layout has solidified its leading position in the AI computing infrastructure market. From a business development perspective, these orders are expected to gradually performance increments in the next 2-3 years, bringing stable income to the company and further enhancing its profitability. Asset securitization catalyzes multi-value release GDS Holdings Ltd. Sponsored ADR Class A, with scarce high-quality assets and solid operational performance, has taken the lead in IDC asset securitization. Favorable macro policies also provide room for imagination for its future development in asset securitization. On February 7th, the China Securities Regulatory Commission issued the "Implementation Opinions on Doing a Good Job in the Financial 'Five Major Articles' in the Capital Market," explicitly proposing to "regularly promote the issuance of new types of infrastructure REITs" and include data centers, 5G base stations, and other new infrastructure projects into the priority support category. GDS Holdings Ltd. Sponsored ADR Class A expressed to GMTEight that in the era of rapid development of the digital economy, they actively respond to the national policy of "encouraging private enterprises to participate in the investment, construction, and application innovation of new infrastructure such as data centers and industrial Internet," actively unlocking their existing assets to use the funds for reinvestment, continue to expand new infrastructure investment and construction in China, and contribute to the development of new productive forces. Financially, the issuance of REITs will bring funds to GDS Holdings Ltd. Sponsored ADR Class A, not only effectively improving the company's cash flow, optimizing operational efficiency without increasing debt, but also enhancing the company's ability to respond to market risks. With the funds raised through REITs, GDS Holdings Ltd. Sponsored ADR Class A can invest in new data center projects, improve their data center layout nationwide, and take advantage of the trend of explosive demand for AI computing power in China to win market dividends ahead of time. It can be said that asset securitization is driving GDS Holdings Ltd. Sponsored ADR Class A to transition from a traditional heavy asset operation model to a "light asset" model. In this transformation process, the company can focus more resources on its core business, generate income through asset monetization and continuous operational management, improve capital operation efficiency, achieve flexible asset allocation, better adapt to market changes, and achieve sustainable development. Conclusion GDS Holdings Ltd. Sponsored ADR Class A has made significant progress in asset value marketization pricing and liquidity enhancement through the issuance of REITs. The company can continuously unlock its existing assets through securitization, build a virtuous cycle of "investment-construction-operation-exit-reinvestment," continually improve its business layout and technological upgrades. This strategic layout not only opens up new growth paths for the company itself but also provides experience for the asset securitization development in China's digital infrastructure industry. In the era of AI and digitalization, with the help of policy winds, GDS Holdings Ltd. Sponsored ADR Class A is expected to play an important role in connecting capital and computing power, continuously creating greater value, and driving the data center industry into a new development stage.

01/04/2025

American medical device giant Becton Dickinson (BDX.US) is currently in negotiations with its competitors to divest its life sciences division.

American medical device giant Becton Dickinson (BDX.US) is in negotiations with competitors Thermo Fisher Scientific (TMO.US) and Danaher Corporation (DHR.US) regarding a plan to divest its $21 billion life sciences division. According to media reports citing sources familiar with the matter, Becton Dickinson has started holding management meetings with relevant parties in recent weeks. The company is also in negotiations with Thermo Fisher Scientific, Danaher Corporation, as well as smaller competitors Waters Corporation (WAT.US), QIAGEN NV (QGEN.US), and Revvity for tax-free stock swaps. Reports suggest that Becton Dickinson is expected to announce further plans regarding its life sciences division this summer, with a goal of completing the transaction next year. The company may also decide to spin off the division. Private equity firms are also keeping an eye on this business. In February of this year, Becton Dickinson stated that it was systematically preparing to split off its highly valuable life sciences division. This division encompasses two core business segments: biosciences and diagnostic solutions. It is reported that this split is being driven by activist investor Starboard Value. According to Starboard Value, although Becton Dickinson's life sciences division holds a significant position in the industry, the existing growth model may have limitations in fully realizing the potential value of the division. To maximize their investment returns and drive innovation and change in the entire industry through corporate strategic adjustments, Starboard Value proposed the division of Becton Dickinson's life sciences division. They believe that the split-off life sciences division will be able to break free from the constraints of the original organizational structure, operate with a more independent and flexible approach to adapt to the rapidly changing market environment, improve operational efficiency, attract more professional investments, and ultimately drive the company's stock price higher.

01/04/2025

ARM (ARM.US) once sought to acquire chip IP supplier Alphawave to enhance AI technology.

According to reports, Arm Holdings (ARM.US) had sought to acquire the British company Alphawave in order to gain a crucial technology for building their own artificial intelligence (AI) processors. The report stated that Alphawave, which provides semiconductor intellectual property (IP), had been in discussions with its investment bankers about a potential sale after attracting interest from Arm and other potential buyers. However, the report mentioned that Arm, a British chip architecture design company majority-owned by SoftBank Group, decided not to proceed with the acquisition of Alphawave after initial negotiations. Arm and Alphawave declined to comment. On Tuesday, Alphawave's stock price rose by about 15% on the London Stock Exchange. Arm's US stocks slightly declined by 0.4% in pre-market trading. The report mentioned that Arm recently had talks with Alphawave to purchase their technology for controlling chip data transmission speed, which is crucial for artificial intelligence as applications like Siasun Robot & Automation may require assembling thousands of chips simultaneously for efficient operation. Arm itself does not manufacture chips, but sells and licenses its building blocks and intellectual property to companies like Apple Inc. and NVIDIA Corporation for designing chips for smartphones, laptops, and data center processors.

01/04/2025

Tesla, Inc. (TSLA.US) continues to struggle in the European market! French registrations plummeted by 37% in March.

Tesla, Inc.'s sales in France dropped sharply last month, with registrations falling by 37%. The electric car manufacturer is still facing challenges in the European market. According to data from the French automotive industry association "Plateforme Automobile", the Texas-based electric car manufacturer registered 3,157 new cars in France in March. This decline is particularly notable compared to the overall French car market, which saw a 15% decrease in sales during the same period. In February, Tesla, Inc. also saw a 26% decrease in registrations in France, and in January, a sharp 63% decrease. The reason for the drop in sales is attributed to CEO Elon Musk's political activities and the impact of model changes on performance in the region. In February, Tesla, Inc. also experienced a significant 40% year-on-year decrease in new car sales in Europe, as European buyers expressed dissatisfaction with Elon Musk's role in the administration of former U.S. President Donald Trump. Currently, there are protests taking place globally under the name "Tesla Takedown", where demonstrators accuse Musk of enabling extreme right-wing movements and call for a boycott of the company. Elon Musk announced today that he plans to resign from his position at the Department of Government Efficiency (DOGE) by the end of May. In an interview, Musk expressed confidence in achieving the goal of reducing the federal deficit by $1 trillion before his departure, emphasizing the inefficiency of the government, widespread waste and fraud, and his confidence in reducing expenditures by 15% without affecting key services. As of the time of writing, Tesla, Inc. was up 1.4% in pre-market trading on Tuesday. However, its stock price has fallen by nearly 36% since the beginning of the year.

01/04/2025

Boeing Company (BA.US) plans to reduce the production of 737 MAX aircraft to 31 per month.

According to reports, Boeing Company (BA.US) is reducing the production of 737 MAX aircraft from 38 aircraft per month to 31 aircraft per month, primarily due to delays in wing manufacturing. Reportedly, Boeing Company's Renton factory in Washington briefly achieved a production rate of 38 aircraft in February, but wing production faced challenges. Therefore, the aircraft manufacturer was forced to reduce production to ensure quality and address these production issues. Boeing Company denied claims that production had reached 38 aircraft in a statement, stating that the project did not reduce production rates. As of the time of writing, Boeing Company's stock had fallen 0.44% in pre-market trading.

01/04/2025

Amazon.com, Inc. (AMZN.US) has resumed its drone delivery service in the United States two months after a software update.

According to reports, after completing software updates to its fleet, Amazon.com, Inc. (AMZN.US) has resumed drone deliveries in two cities in the United States. Amazon.com, Inc. is testing this service in these two cities. In January of this year, drone deliveries at the Collier Station in Texas and Tolleson, Arizona were suspended due to dust in the air causing abnormal readings in the drones' altitude sensors. Dust can cause inaccurate readings of the drone's position relative to the ground. An Amazon.com, Inc. spokesperson told the media, "Safety is paramount in everything we do at Prime Air, which is why we paused operations to update the software on the MK30 drones. The update work has now been completed and approved by the Federal Aviation Administration (FAA), and we can resume deliveries." He added that since resuming deliveries, the demand for Prime Air has reached "unprecedented levels." Amazon.com, Inc.'s drone delivery service has not yet expanded to other regions, and two separate crash incidents were recently reported. Last year, the company closed a testing facility in Rockford, California. Meanwhile, the e-commerce giant is working on launching drone deliveries in the UK and has stated that once regulatory approval is obtained, it plans to conduct the first flights from a delivery center in Darlington.

01/04/2025

Eli Lilly & Co. Files Lawsuit Against Two Generic Drug Manufacturers for Copycat Adipotide, Stirring up the Weight Loss Drug Market Again

Pharmaceutical giant Eli Lilly and Company (LLY.US) will file lawsuits against two companies on Tuesday, accusing them of illegally compounding their blockbuster drug - tirzepatide, a glucagon-like peptide-1 (GLP-1) / glucose-dependent insulinotropic polypeptide (GIP) receptor agonist. The two pharmacies being sued by Eli Lilly are Strive Pharmacy in Gilbert, Arizona and Empower Pharmacy in East Windsor, New Jersey. These two cases will be filed in federal courts in Delaware and New Jersey respectively. Tirzepatide is the active ingredient in Zepbound for weight loss and Mounjaro for treating type 2 diabetes. In the lawsuit against Strive Pharmacy, Eli Lilly pointed out, "The information conveyed by Strive to consumers is inevitably that its products are more tailored for individual consumers compared to products from 'large pharmaceutical companies,' and that Strive's treatment plans are more suitable for patients, thus leading to better treatment outcomes. However, these claims are neither true nor substantiated." In the lawsuit against Empower Pharmacy, Eli Lilly accused the pharmacy of referencing Eli Lilly's own research on tirzepatide. Despite Empower's version of the drug being in tablet form, or being an injection with niacinamide (an additive not present in Eli Lilly's Zepbound and Mounjaro). Eli Lilly also sent cease-and-desist letters to about 50 compounding pharmacies and telemedicine companies, requesting them to confirm that they have stopped compounding tirzepatide on a large scale. During the shortage of tirzepatide, compounding pharmacies were allowed by law to compound the drug into compounded formulations. The Food and Drug Administration (FDA) announced in October 2024 that the tirzepatide shortage issue had been resolved, and in December rejected the objections of the compounding pharmacy trade organization, upholding its decision. Eli Lilly's competitor Novo Nordisk A/S Sponsored ADR Class B (NVO.US) also faced a shortage of the GLP-1 drug semaglutide, sold as Wegovy for weight loss and Ozempic for treating type 2 diabetes. Currently, this shortage issue has also been resolved. The FDA has announced that action will be taken against outsourcing facilities producing tirzepatide after March 19. For semaglutide, this date is after May 22. Empower claims on its website that, "It is still legal to produce improved compounded formulations of tirzepatide and semaglutide to meet the special needs of patients." This could involve adding vitamin B that "may provide additional metabolic benefits," or making the drugs into orally disintegrating tablets. Strive states on its website about tirzepatide, "This compounded drug should only be used when commercial products are unavailable, or when a prescribing physician determines a clinically significant difference for the patient."

01/04/2025

Johnson & Johnson's subsidiary bankruptcy strategy facing third rejection, talcum powder lawsuit suffers setback again.

On Monday, a federal judge in Texas rejected Johnson & Johnson's (JNJ.US) third attempt to have its created subsidiary declare bankruptcy to address tens of thousands of lawsuits alleging that the company's talcum powder caused cancer. The proposal aimed to dismiss lawsuits alleging that its baby powder and other talcum powder products led to ovarian cancer, marking the third time the company's bankruptcy strategy has failed in court. Johnson & Johnson had claimed that the plan had the support of 83% of claimants, higher than the 75% required by US bankruptcy laws. Under the plan, the subsidiary Red River Talc would declare bankruptcy and then receive around $9 billion to pay the claimants, rather than through legal proceedings. After a two-week trial in Houston, US Bankruptcy Court Judge Christopher Lopez rejected this, stating that there were flaws in the claimants' vote. Lopez criticized Johnson & Johnson, saying the company "provided an unreasonably short voting period for thousands of creditors, and did whatever it could to reach the 75% threshold." Johnson & Johnson did not appeal, but instead stated that they would resort back to the tort system. They will also retrieve around $7 billion in reserve funds from the bankruptcy resolution. Johnson & Johnson's Global Litigation Vice President Erik Haas said in a statement, "We have decided to litigate each and every claim because the simple fact is that these are false allegations fabricated by greedy plaintiff attorneys seeking out another deep-pocket defendant and being driven by lawyer advertising fueled by litigation funding." Johnson & Johnson will hold a conference call on Tuesday morning at 8 am Eastern Time to discuss their future plans. The company had previously tried twice to use the so-called "Texas two-step" bankruptcy strategy, but was rejected both times by a judge in New Jersey, where Johnson & Johnson is headquartered.

01/04/2025

FedEx Corporation (FDX.US) is partnering with Hong Kong Post to expand the self-service pickup network in Hong Kong to more than 700 locations.

One of the world's largest courier and transportation companies, FedEx Corporation (FDX.US) (Federal Express Corporation), announced a partnership with Hongkong Post to expand its self-collection network for imported goods to over 700 locations. Customers and online shoppers can now pick up their packages at designated Hongkong Post offices, intelligent postal stations, and 7-Eleven convenience stores without having to pay any additional fees. This partnership provides FedEx Corporation (FedEx) customers with greater flexibility, with self-collection points expanding to cover over 400 7-Eleven stores, 165 intelligent postal stations, and 119 Hongkong Post offices. Customers can choose their pickup location through WhatsApp or the FedEx Corporation official website. Raymond M. Tang, Managing Director of FedEx Corporation Hong Kong and Macau, said, "In today's ever-evolving environment, we need to adopt a customer-centric approach to enhance integration between e-commerce retailers and logistics providers to meet the growing demands of e-commerce and cross-border trade. FedEx Corporation has been committed to introducing innovative logistics solutions to meet the changing needs of customers. We are delighted to partner with Hongkong Post to expand the self-collection network, strengthen our 'last-mile' delivery service, and provide customers with a better experience."

01/04/2025

Lufthansa Airlines (DLAKY.US): Despite the tightening of border policies, bookings for flights to the US have not decreased.

The financial director of Lufthansa Airlines (DLAKY.US) stated that despite US President Donald Trump's stricter border policies, there has been no decrease in ticket bookings for flights to and from the US. He described the market environment for 2025 as positively improving, especially in the North Atlantic China Welding Consumables, Inc. region, and predicted "significant improvement in group earnings". "Our important cross-Atlantic China Welding Consumables, Inc. business remains very strong," said Lufthansa Airlines CFO Til Schrecker in an interview released on Monday evening. Last month, Germany updated its travel advice for the US, emphasizing that visas or visa waivers do not guarantee entry for German citizens. Previously, three German citizens were detained at the border. On Monday, British airline Virgin Atlantic China Welding Consumables, Inc. stated that after a strong start in 2025, they are beginning to see signs of a slowdown in demand in the US market. This aligns with the warning from their partially owned Delta Air Lines, Inc. (DAL.US), which pointed out that tariffs and rising prices are causing uncertainty in the US economy, impacting the airline industry.

01/04/2025

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