Southeast Asia 67 MW AIDC Project Launched, DEEP SOURCE (00990) Accelerates Strategic Transformation

DEEP SOURCE (00990) has once again made significant progress in its AI infrastructure business. On October 7, the company announced the latest developments regarding its artificial intelligence data center project in Penang, Malaysia. The project has a planned IT capacity of 67 MW. The company has entered into a data center colocation service agreement with an initial term of ten years for all of the planned IT capacity, and has also entered into a letter of intent for construction works covering the project's main building and mechanical and electrical engineering. The relevant preliminary works have been authorized and commenced. 67MW Data Center Locks In Ten-Year Long-Term Contract Customer Ahead of Schedule According to the announcement, a subsidiary of DEEP SOURCE entered into a master data center colocation service agreement on October 2 with an independent third-party customer, covering the project's planned 67 MW IT capacity. The agreement has an initial term of ten years, commencing after the facility passes the agreed acceptance and enters the service phase. After service commencement, the customer is required to pay the full monthly recurring service fee based on the agreed capacity, while electricity charges are settled based on actual usage. Due to commercial confidentiality arrangements, the company did not disclose the customer's name or specific business information, nor the contract amount. Based on the disclosed information alone, 67 MW of IT capacity has entered the ranks of large-scale data centers. Moreover, provisions such as "the customer is required to pay the full monthly recurring service fee based on the agreed capacity, rather than depending on actual usage" reflect the confidence of both contracting parties in the buoyancy of computing power demand in Southeast Asia. Construction Progressing in Parallel, Phased Completion Planned for First Half of 2027 While demand-side visibility is clear, the construction side of the project is also advancing in parallel. The same announcement stated that a subsidiary of the company has entered into a letter of intent for construction works with Longmotive DC Solutions Pte. Ltd., a well-known data center engineering construction enterprise in Southeast Asia, intending to appoint the latter to be responsible for the project's main building and mechanical and electrical engineering. The expected scope of works covers the main building, civil and structural engineering, mechanical and electrical engineering, supply and installation of designated equipment, infrastructure works, testing and commissioning, as well as related construction design and coordination. The total lump-sum price for the scope of works listed in the letter of intent is US$221.1 million. It is worth noting that the letter of intent has authorized the counterparty to commence preliminary and advance works including site mobilization, construction planning, procurement, document submission for approval, and site preparation from October 1. According to the disclosed construction schedule, the project's planned 67 MW IT capacity will be completed in phases, with the 26 MW portion scheduled for completion by March 31, 2027, with a 15-day grace period; the remaining 41 MW portion is scheduled for completion by June 30, 2027. Benefiting from Southeast Asia's Computing Infrastructure Wave, Accelerating AIDC Business Transformation Looking back over the past six months, the progress of DEEP SOURCE's Malaysia AIDC project has been remarkably swift. In May of this year, the company for the first time explicitly stated in an announcement that it would expand its business around "AI infrastructure-related industrial applications." Subsequently, in its 2026 interim report, the company further elaborated on its strategic transformation plan and stated that it "has commenced planning and implementation of relevant work." On September 7, the company's first artificial intelligence data center project received approval from Malaysia's Ministry of Investment, Trade and Industry. Entering October, the company further finalized the Penang project site and secured a long-term contract customer and construction contractor. Behind DEEP SOURCE's transformation into the AIDC business is the continuously rising wave of AI and cloud infrastructure development in Southeast Asia. A report titled "Artificial Intelligence in Southeast Asia: An Era of Opportunity" published by McKinsey in the first half of the year pointed out that competition among Chinese and American technology giants is turning Southeast Asia into a strategic high ground for AI and cloud computing, with the three giants Google, Amazon, and Microsoft alone having committed to invest more than US$10 billion in AI infrastructure-related amounts in Malaysia. Cushman & Wakefield's recently released Asia-Pacific data center report also shows that in Johor, one of Malaysia's largest data center clusters, the operational capacity is approximately 897 MW, while the colocation vacancy rate is only 0.7%.