GDS Holdings Limited (“GDS” or the “Company”) is a US-listed developer and operator of data centers in China. GDS’s stock was up 400%+ in the last year until a recent pullback. Measured off its July 2018 highs, GDS was valued at an absurd 80x EV/ TTM EBITDA, even though its interest payments now exceed its reported gross profits. Investors have indulged GDS’s staggering debt burden because of the belief in its supposedly impressive growth. But our research indicates that in reality, GDS is borrowing crippling amounts of debt to enrich insiders by acquiring data centers from undisclosed related parties which are not nearly as valuable as the Company claims. We believe that since becoming a public Company, GDS has borrowed recklessly to siphon off at least RMB 696 million to insiders by inflating the purchase price of undisclosed related party acquisitions.

On July 31, 2018, we published our investment opinion (the “Report”) on GDS Holdings Limited (NASDAQ: GDS) (“GDS” or the “Company”) a US-listed developer and operator of data centers in China. On August 1, GDS issued a response (the “Response”), a two-page press release of boiler plate denials almost devoid of details. While the Company’s Response failed to address the substance of our report or the independent evidence presented therein, it appears as though the Company has given a more detailed response in private conversations with sell-side analysts.