万国数据（GDS）向SEC提交2026年中期报告6-K，内容为8月13日已公布的Q2业绩及指引上调的正式备案

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6-K
1
tm2624826d1_6k.htm
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of September 2026
Commission File Number: 001-37925
GDS Holdings Limited
(Registrant’s name)
F4/F5, Building C, Sunland International
No. 999 Zhouhai Road
Pudong, Shanghai 200137
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F
x
Form 40-F
¨
EXHIBITS
99.1
Hong Kong 2026 Interim Report
2
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GDS Holdings Limited
Date: September 4, 2026
By:
/s/ William Wei Huang
Name:
William Wei Huang
Title:
Chief Executive Officer
3

----- tm2624826d1_ex99-1.pdf -----
Exhibit 99.1

HKEX: 9698

NASDAQ: GDS

Interim Report 2026

(A company controlled through weighted voting rights and incorporated in the Cayman
Islands with limited liability under the name GDS Holdings Limited and carrying on
business in Hong Kong as GDS WanGuo Holdings Limited)

* For identification purposes only

2026

INTERIM REPORT

2 Explanatory Notes
3 Our Weighted Voting Rights
5 Financial and Operating Highlights
11 Unaudited Condensed
Consolidated Balance Sheets
13 Unaudited Condensed
Consolidated Statements of
Operations
14 Unaudited Condensed
Consolidated Statements of
Comprehensive Income (Loss)
15 Unaudited Condensed
Consolidated Statements of Cash
Flows
16 Reconciliations of GAAP and NonGAAP Results
17 Reconciliation between U.S.
Generally Accepted Accounting
Principles (“U.S. GAAP”) and
International Financial Reporting
Standards (“IFRS”)

2

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

EXPLANATORY NOTES
GDS Holdings Limited (“GDS Holdings”, “company”, “our
company”, “we”, “our” or “us”) prepared this interim report
for the first six months of its fiscal year ending December
31, 2026 (the “Interim Report”) pursuant to Rule 13.48(1)
of the Hong Kong Listing Rules. As an issuer listed on
the Hong Kong Stock Exchange under Chapter 19C of
the Hong Kong Listing Rules, we are exempted from the
contents requirements in respect of interim reports under
Appendix 16 of the Hong Kong Listing Rules.
For more information about our business and related risks,
please refer to our annual report for the fiscal year ended
December 31, 2025 (the “Annual Report”) published on
the website of the Hong Kong Stock Exchange on April 29,
2026. Please note that the information contained in the
Annual Report is up to date as of the date of the Annual
Report, and we do not undertake any obligation to update
the Annual Report, except as required under applicable law
and listing rules.
Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Annual Report.

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

3

OUR WEIGHTED VOTING RIGHTS
WEIGHTED VOTING RIGHTS (WVR)
STRUCTURE
Under our weighted voting rights structure, our share
capital comprises Class A ordinary shares and Class B
ordinary shares. Class A ordinary shares and Class B
ordinary shares carry equal rights, generally rank pari
passu with one another and are entitled to one vote per
share at general meetings of shareholders, except for only
the following matters at general meetings of shareholders,
with respect to which Class B ordinary shares are entitled
to 50 votes per share: (i) the election or removal of a
simple majority, or six, of our directors; and (ii) any change
to our Articles of Association that would adversely affect
the rights of Class B shareholders. These rights are
categorized as WVR structure, under the Hong Kong Listing
Rules. As a result, we are deemed as a company with a
WVR structure.
As of June 30, 2026, the beneficiary of the WVR structure
was Mr. William Wei Huang (“Mr. Huang”), the beneficial
owner of the 43,590,336 Class B ordinary shares then
issued and outstanding.
Subject to the provisions of our Articles of Association,
our Class B ordinary shares may be converted into Class A
ordinary shares at the option of the holder or automatically
at the occurrence of an automatic conversion event. Such
automatic conversion event refers to the first occurrence
of (i) Mr. Huang having beneficial ownership in less than
2.75% of our issued share capital on an as converted
basis (subject to certain exclusions); (ii) the consultation
draft Foreign Investment Law of the People’s Republic of
China published by the MOFCOM on January 19, 2015, or
the FIL, in the form implemented not requiring VIE entities

operating the PRC business to be owned or controlled (as
defined in the FIL as officially promulgated by the PRC
legislator) by PRC nationals or entities (including without
limitation the FIL as officially promulgated by the PRC
legislator grandfathering then-existing VIE Entities in the
PRC); (iii) PRC law no longer requiring the conduct of the
PRC business to be owned or controlled by PRC nationals
or entities; (iv) the promulgation of the FIL as it relates
to VIE entities is abandoned by the PRC legislator; or (v)
the relevant authorities in the PRC having approved the
VIE structure without the need for the VIE entities to be
owned or controlled by PRC nationals or entities. Subject
to the provisions of our Articles of Association, if the
Class B ordinary shares are automatically converted into
Class A ordinary shares, the WVR structure will thereby be
terminated.
Each Class B ordinary share is convertible into one Class
A ordinary share at any time by the holder thereof, and will
automatically convert into Class A ordinary shares under
certain circumstances. Upon the conversion of all the
issued and outstanding Class B ordinary shares into Class
A ordinary shares, the company will issue 43,590,336
Class A ordinary shares. Any Class A ordinary shares which
Mr. Huang directly or indirectly acquire may be converted
into Class B ordinary shares.
Article 86(4) of our Articles of Association provides that
for so long as Mr. Huang continues to have beneficial
ownership in not less than two point seventy five per cent.
(2.75%) of the then issued share capital of our company on
an as converted basis (subject to certain exclusions), the
holders of the Class B Ordinary Shares shall have the right
to nominate five (5) directors (one of which is intended to

4

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

OUR WEIGHTED VOTING RIGHTS

be Mr. Huang) for appointment as directors. Such directors
shall be elected by resolutions of the members (with the
Class B ordinary shares having fifty (50) votes per Class B
ordinary share in respect of such resolutions).
Upon either (i) the automatic conversion of the Class B
ordinary shares, or (ii) the conversion of such of the Class
B ordinary shares that results in Mr. Huang ceasing to have
beneficial ownership in not less than two point seventy
five per cent. (2.75%) but continuing to have beneficial
ownership in not less than two per cent. (2%) of the then
issued share capital of our company on an as converted
basis (subject to certain exclusions), (a) the nomination
and appointment rights under the above provisions shall
cease and terminate; (b) any directors (other than Mr.
Huang) appointed pursuant to the above provisions shall
retire from office by rotation at the appropriate annual
general meeting of members in accordance with the terms
of their appointment, and (c) at the relevant annual general
meeting, their replacement as a director shall be nominated
by the Nominating and Corporate Governance Committee
and shall be elected by resolutions of the members (with
the Class B ordinary shares having one (1) vote per Class
B ordinary share in respect of such resolutions); and (d)
Mr. Huang shall continue to have the right to appoint
and remove one (1) director (which is intended to be Mr.
Huang).

Upon Mr. Huang having beneficial ownership in less than
two per cent. (2%) of the then issued share capital of our
company on an as converted basis (subject to certain
exclusions), (a) Mr. Huang’s above appointment right
shall cease and terminate, (b) any director appointed
pursuant to such right shall retire from office by rotation
at the appropriate annual general meeting of members in
accordance with the terms of their appointment, and (c)
at the relevant annual general meeting, their replacement
as a director shall be nominated by the Nominating and
Corporate Governance Committee and shall be elected
by resolutions of the members (with the Class B ordinary
shares having one (1) vote per Class B ordinary share in
respect of such resolutions).
In addition, a quorum required for a meeting of
shareholders consists of at least two shareholders present
in person or by proxy or by duly authorized representative,
representing not less than one-third in nominal value
of the total issued voting shares in our company, save
that for any general meeting requisitioned by one or
more shareholders holding at the date of deposit of the
requisition not less than 10% of the voting rights in our
company, two shareholders entitled to vote and present in
person or by proxy or by duly authorized representative,
representing not less than 10% of the aggregate voting
power in our company throughout the meeting shall form a
quorum.

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

5

FINANCIAL AND OPERATING HIGHLIGHTS
SECOND QUARTER 2026 FINANCIAL
HIGHLIGHTS
•

Net revenue increased by 6.5% year-over-year
(“Y-o-Y”) to RMB3,088.0 million (US$455.1 million) in
the second quarter of 2026 (2Q2025: RMB2,900.3
million).

•

Net income was RMB837.6 million (US$123.5 million)
in the second quarter of 2026 (2Q2025: net loss of
RMB70.6 million).

•

Net income margin was 27.1% in the second quarter
of 2026 (2Q2025: net loss margin of 2.4%).

•

Adjusted EBITDA (non-GAAP) increased by 2.5%
Y-o-Y to RMB1,406.0 million (US$207.2 million) in
the second quarter of 2026 (2Q2025: RMB1,371.8
million).

•

Adjusted EBITDA margin (non-GAAP) was 45.5% in the
second quarter of 2026 (2Q2025: 47.3%).

SECOND QUARTER 2026 OPERATING
HIGHLIGHTS
•

Total area committed and pre-committed increased
by 18.2% Y-o-Y to 784,802 sqm as of June 30, 2026
(June 30, 2025: 663,959 sqm).

•

Area utilized increased by 13.2% Y-o-Y to 542,236
sqm as of June 30, 2026 (June 30, 2025: 479,186
sqm).

•

Area in service increased by 10.8% Y-o-Y to 684,977
sqm as of June 30, 2026 (June 30, 2025: 618,060
sqm).

•

Utilization rate (area utilized divided by area in
service) was 79.2% as of June 30, 2026 (June 30,
2025: 77.5%).

“We delivered solid financial and operational results in
the second quarter of 2026, reflecting our continued
commitment to disciplined execution,” said Mr. William
Huang, Chairman and Chief Executive Officer of GDS.
“During the quarter, we ramped up backlog delivery while
maintaining a high level of net new bookings. As things
stand today, we are on track to achieving a record sales
commitment for this year, which is much higher than our
original target. We are very excited about the opportunities
in China ahead of us, driven mainly by AI demand. We
are confident in our ability to capture these massive
opportunities and expand our business at scale.”
“In the second quarter, we grew revenue by 6.5% and
adjusted EBITDA by 2.5% year-over-year, yielding an
adjusted EBITDA margin of 45.5%,” added Mr. Dan
Newman, Chief Financial Officer. “With strengthened
financial standing and funding capabilities to support
our business expansion, we remain focused on creating
sustainable, long-term value for our business partners and
shareholders.”

SECOND QUARTER 2026 FINANCIAL
RESULTS
Net revenue in the second quarter of 2026 was
RMB3,088.0 million (US$455.1 million), a 6.5% increase
over the same period last year of RMB2,900.3 million. The
Y-o-Y increase was mainly due to continued ramp-up of our
data centers.

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GDS HOLDINGS LIMITED

INTERIM REPORT 2026

FINANCIAL AND OPERATING HIGHLIGHTS

Cost of revenue in the second quarter of 2026 was
RMB2,423.7 million (US$357.2 million), a 9.6% increase
over the same period last year of RMB2,211.4 million. The
Y-o-Y increase was in line with the continued ramp-up of our
data centers.
Gross profit was RMB664.2 million (US$97.9 million) in the
second quarter of 2026, a 3.6% decrease over the same
period last year of RMB688.9 million.
Gross profit margin was 21.5% in the second quarter of
2026, compared with 23.8% in the same period last year.
The Y-o-Y decline was mainly due to a higher level of utility
costs as a percentage of net revenue.
Adjusted Gross Profit (“Adjusted GP”) (non-GAAP) is defined
as gross profit excluding depreciation and amortization,
operating lease cost relating to prepaid land use rights,
accretion expenses for asset retirement costs and
share-based compensation expenses allocated to cost of
revenue. Adjusted GP was RMB1,498.9 million (US$220.9
million) in the second quarter of 2026, a 0.7% decrease
over the same period last year of RMB1,509.5 million. See
“Non-GAAP Disclosure” and “Reconciliations of GAAP and
non-GAAP results” elsewhere in this Interim Report.
Adjusted GP margin (non-GAAP) was 48.5% in the second
quarter of 2026, compared with 52.0% in the same period
last year. The Y-o-Y decrease was mainly due to a higher
level of utility costs as a percentage of net revenue.
Selling and marketing expenses, excluding share-based
compensation expenses of RMB9.9 million (US$1.5
million), were RMB22.3 million (US$3.3 million) in the
second quarter of 2026, a 21.7% decrease over the same
period last year of RMB28.5 million (excluding share-based
compensation of RMB5.5 million). The Y-o-Y decrease was
mainly due to lower level of personnel costs.
General and administrative expenses, excluding
share-based compensation expenses of RMB35.4 million
(US$5.2 million), depreciation and amortization expenses
of RMB51.0 million (US$7.5 million) and operating lease
cost relating to prepaid land use rights of RMB13.9 million
(US$2.0 million), were RMB85.5 million (US$12.6 million)

in the second quarter of 2026, a 24.4% decrease over
the same period last year of RMB113.0 million (excluding
share-based compensation expenses of RMB40.4 million,
depreciation and amortization expenses of RMB62.6 million
and operating lease cost relating to prepaid land use rights
of RMB15.6 million). The Y-o-Y decrease was mainly due to
the decrease of allowance in credit losses and greater gain
on disposal of certain equipment during the second quarter
of 2026.
Research and development costs were RMB7.1 million
(US$1.0 million) in the second quarter of 2026, compared
with RMB8.8 million in the same period last year.
Net interest expenses for the second quarter of 2026 were
RMB366.8 million (US$54.1 million), a 9.4% decrease over
the same period last year of RMB405.0 million. The Y-o-Y
decrease was mainly due to lower interest rates as well as
higher interest income.
Foreign currency exchange gain for the second quarter of
2026 was RMB1.0 million (US$0.2 million), compared with
foreign currency exchange gain of RMB1.4 million in the
same period last year.
Others, net for the second quarter of 2026 was RMB17.8
million (US$2.6 million), compared with RMB9.2 million in
the same period last year.
Income tax expenses for the second quarter of 2026
were RMB213.5 million (US$31.5 million), compared with
RMB64.9 million in the same period last year. The Y-o-Y
increase was mainly due to the income tax incurred as a
result of intra-group transfer of interests in a subsidiary in
preparation for the potential second asset injection into the
C-REIT in the second quarter of 2026.
Share of results of equity method investees for the second
quarter of 2026 was an income of RMB959.9 million
(US$141.5 million), mainly arising from the dilution gain on
our investment in DayOne Data Centers Limited (“DayOne”)
following the completion of DayOne’s Series C Convertible
Preferred Share issue during the second quarter of 2026,
compared with a loss of RMB25.9 million in the same
period last year.

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

7

FINANCIAL AND OPERATING HIGHLIGHTS

Net income in the second quarter of 2026 was RMB837.6
million (US$123.5 million), compared with net loss of
RMB70.6 million in the same period last year.
Basic income per ordinary share in the second quarter of
2026 was RMB0.52 (US$0.08), compared with basic loss
of RMB0.06 in the same period last year.
Diluted income per ordinary share in the second quarter of
2026 was RMB0.44 (US$0.07), compared with diluted loss
of RMB0.06 in the same period last year.
Basic income per American Depositary Share (“ADS”) in
the second quarter of 2026 was RMB4.13 (US$0.61),
compared with basic loss of RMB0.46 in the same period
last year.
Diluted income per American Depositary Share (“ADS”)
in the second quarter of 2026 was RMB3.53 (US$0.52),
compared with diluted loss of RMB0.46 in the same period
last year.
Adjusted EBITDA (non-GAAP) is defined as net income (loss)
excluding net interest expenses, income tax expenses
(benefits), depreciation and amortization, operating lease
cost relating to prepaid land use rights, accretion expenses
for asset retirement costs, share-based compensation
expenses, share of results of equity method investees and
gain on deconsolidation of subsidiaries. Adjusted EBITDA
was RMB1,406.0 million (US$207.2 million) in the second
quarter of 2026, a 2.5% increase over the same period
last year of RMB1,371.8 million.
Adjusted EBITDA margin (non-GAAP) was 45.5% in the
second quarter of 2026, compared with 47.3% in the same
period last year. The Y-o-Y decrease was mainly due to a
higher level of utility costs as percentage of net revenue,
which was partially offset by cost savings at the corporate
level.

LIQUIDITY
As of June 30, 2026, cash and cash equivalents were
RMB14,927.3 million (US$2,200.0 million).

Total short-term debt was RMB9,209.5 million (US$1,357.3
million), comprised of short-term borrowings and the
current portion of long-term borrowings of RMB3,327.3
million (US$490.4 million), current portion of convertible
bonds payable of RMB4,219.0 million (US$621.8 million)
and the current portion of finance lease and other financing
obligations of RMB1,663.1 million (US$245.1 million). Total
long-term debt was RMB36,921.5 million (US$5,441.6
million), comprised of long-term borrowings (excluding
current portion) of RMB24,024.5 million (US$3,540.8
million), non-current portion of convertible bonds payable
of RMB7,573.9 million (US$1,116.3 million) and the
non-current portion of finance lease and other financing
obligations of RMB5,323.1 million (US$784.5 million).
During the second quarter of 2026, the Company obtained
new debt financing and refinancing facilities of RMB4,907.3
million (US$723.2 million).

SECOND QUARTER 2026 OPERATING
RESULTS
Sales
Total area committed and pre-committed at the end of the
second quarter of 2026 was 784,802 sqm, compared
with 663,959 sqm at the end of the second quarter of
2025 and 725,485 sqm at the end of the first quarter
of 2026, an increase of 18.2% Y-o-Y and an increase of
8.2% quarter-over-quarter (“Q-o-Q”), respectively. In the
second quarter of 2026, gross additional area committed
was 64,750 sqm. Net additional total area committed was
59,317 sqm.
Data Center Resources
Area in service at the end of the second quarter of 2026
was 684,977 sqm, compared with 618,060 sqm at the
end of the second quarter of 2025 and 674,269 sqm at
the end of the first quarter of 2026, an increase of 10.8%
Y-o-Y and an increase of 1.6% Q-o-Q, respectively.
Area under construction at the end of the second quarter
of 2026 was 170,355 sqm, compared with 132,235 sqm
at the end of the second quarter of 2025 and 118,411
sqm at the end of the first quarter of 2026, an increase of
28.8% Y-o-Y and an increase of 43.9% Q-o-Q, respectively.

8

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

FINANCIAL AND OPERATING HIGHLIGHTS

Commitment rate for area in service was 92.4% at the
end of the second quarter of 2026, compared with 91.5%
at the end of the second quarter of 2025 and 92.8% at
the end of the first quarter of 2026. Pre-commitment rate
for area under construction was 89.2% at the end of the
second quarter of 2026, compared with 74.7% at the end
of the second quarter of 2025 and 84.4% at the end of the
first quarter of 2026.
Move-In
Area utilized at the end of the second quarter of 2026 was
542,236 sqm, compared with 479,186 sqm at the end of
the second quarter of 2025 and 520,929 sqm at the end
of the first quarter of 2026, an increase of 13.2% Y-o-Y
and an increase of 4.1% Q-o-Q, respectively. In the second
quarter of 2026, gross additional area utilized was 24,841
sqm. Net additional area utilized was 21,307 sqm.
Utilization rate for area in service was 79.2% at the end of
the second quarter of 2026, compared with 77.5% at the
end of the second quarter of 2025 and 77.3% at the end
of the first quarter of 2026.

UPDATED BUSINESS OUTLOOK
The Company revises the previously provided guidance of
total revenues for the year of 2026 of RMB12,400 million
– RMB12,900 million to RMB12,700 million – RMB13,000
million, representing a Y-o-Y increase of between 11.1% to
13.7%; and the previously provided guidance of Adjusted
EBITDA of RMB5,750 million – RMB6,000 million to
RMB5,900 million – RMB6,100 million, representing an
increase of between 9.2% to 12.9%, both including the
one-time items as disclosed in the first quarter of 2026.
The Company also revises its previously provided
capex guidance of around RMB9,000 million to around
RMB10,000 million. The increase in capex guidance
reflects the Company’s strong sales achievement, the
current sales outlook, and the corresponding increase in
the Company’s data center development activities.
This forecast reflects the Company’s preliminary view on
the current business situation and market conditions, which
are subject to change.

NON-GAAP DISCLOSURE
Our management and board of directors use Adjusted
EBITDA, Adjusted EBITDA margin, Adjusted GP and Adjusted
GP margin, which are non-GAAP financial measures, to
evaluate our operating performance, establish budgets
and develop operational goals for managing our business.
We believe that the exclusion of the income and expenses
eliminated in calculating Adjusted EBITDA and Adjusted GP
can provide useful and supplemental measures of our core
operating performance. In particular, we believe that the
use of Adjusted EBITDA as a supplemental performance
measure captures the trend in our operating performance
by excluding from our operating results the impact of our
capital structure (primarily interest expense), asset base
charges (primarily depreciation and amortization, operating
lease cost relating to prepaid land use rights, accretion
expenses for asset retirement costs and impairment
losses of long-lived assets), other non-cash expenses
(primarily share-based compensation expenses), and other
income and expenses which we believe are not reflective
of our operating performance (primarily gain or loss on
deconsolidation of subsidiaries and share of results of
equity method investees), whereas the use of adjusted
gross profit as a supplemental performance measure
captures the trend in gross profit performance of our data
centers in service by excluding from our gross profit the
impact of asset base charges (primarily depreciation and
amortization, operating lease cost relating to prepaid land
use rights and accretion expenses for asset retirement
costs) and other non-cash expenses (primarily share-based
compensation expenses) included in cost of revenue. In
addition, we exclude the income (loss) from discontinued
operations from our Adjusted EBITDA and Adjusted
EBITDA margin to measure our financial performance from
continuing operations, which will be consistent with our
future financial performance disclosure.

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

9

FINANCIAL AND OPERATING HIGHLIGHTS

We note that depreciation and amortization is a fixed
cost which commences as soon as each data center
enters service. However, it usually takes several years for
new data centers to reach high levels of utilization and
profitability. The Company incurs significant depreciation
and amortization costs for its early stage data center
assets. Accordingly, gross profit, which is a measure of
profitability after taking into account depreciation and
amortization, does not accurately reflect the Company’s
core operating performance.
We also present these non-GAAP measures because we
believe these non-GAAP measures are frequently used by
securities analysts, investors and other interested parties
as measures of the financial performance of companies in
our industry.
These non-GAAP financial measures are not defined under
U.S. GAAP and are not presented in accordance with U.S.
GAAP. These non-GAAP financial measures have limitations
as analytical tools, and when assessing our operating
performance, cash flows or our liquidity, investors should
not consider them in isolation, or as a substitute for gross
profit, net income (loss), cash flows provided by (used in)
operating activities or other consolidated statements of
operations and cash flow data prepared in accordance
with U.S. GAAP. There are a number of limitations related
to the use of these non-GAAP financial measures instead
of their nearest GAAP equivalent. First, Adjusted EBITDA,
Adjusted EBITDA margin, Adjusted GP, and Adjusted GP
margin are not substitutes for gross profit, net income
(loss), cash flows provided by (used in) operating activities
or other consolidated statements of operation and
cash flow data prepared in accordance with U.S. GAAP.
Second, other companies may calculate these non-GAAP
financial measures differently or may use other measures
to evaluate their performance, all of which could reduce
the usefulness of these non-GAAP financial measures as
tools for comparison. Finally, these non-GAAP financial
measures do not reflect the impact of income (loss) from
discontinued operations, net interest expenses, incomes
tax benefits (expenses), depreciation and amortization,

operating lease cost relating to prepaid land use rights,
accretion expenses for asset retirement costs, share-based
compensation expenses, impairment losses of long-lived
assets, gain on deconsolidation of subsidiaries and share
of results of equity method investees, each of which have
been and may continue to be incurred in our business.
We mitigate these limitations by reconciling the non-GAAP
financial measure to the most comparable U.S. GAAP
performance measure, all of which should be considered
when evaluating our performance. We do not provide
forward-looking guidance for certain financial data, such
as depreciation, amortization, accretion, share-based
compensation, share of results of equity method investees
and net income (loss); the impact of such data and related
adjustments can be significant. As a result, we are not able
to provide a reconciliation of forward-looking U.S. GAAP
to forward-looking non-GAAP financial measures without
unreasonable effort.
For more information on these non-GAAP financial
measures, please see the table captioned “Reconciliations
of GAAP and non-GAAP results” set forth at the end of this
Interim Report.

EXCHANGE RATE
This Interim Report contains translations of certain RMB
amounts into U.S. dollars (“USD”) at specified rates solely
for the convenience of the reader. Unless otherwise stated,
all translations from RMB to USD were made at the rate of
RMB6.7851 to US$1.00, the noon buying rate in effect on
June 30, 2026 in the H.10 statistical release of the Federal
Reserve Board. The Company makes no representation that
the RMB or USD amounts referred could be converted into
USD or RMB, as the case may be, at any particular rate or
at all.

10

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

FINANCIAL AND OPERATING HIGHLIGHTS

STATEMENT REGARDING PRELIMINARY
UNAUDITED FINANCIAL INFORMATION
The unaudited financial information set out in this Interim
Report is preliminary and subject to potential adjustments.
Adjustments to the consolidated financial statements may
be identified when audit work has been performed for the
Company’s year-end audit, which could result in significant
differences from this preliminary unaudited financial
information.

SAFE HARBOR STATEMENT
This Interim Report contains forward-looking statements.
These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be
identified by terminology such as “aim,” “anticipate,”
“believe,” “continue,” “estimate,” “expect,” “future,”
“guidance,” “intend,” “is/are likely to,” “may,” “ongoing,”
“plan,” “potential,” “target,” “will,” and similar statements.
Among other things, statements that are not historical
facts, including statements about GDS Holdings’ beliefs
and expectations regarding the growth of its businesses
and its revenue for the full fiscal year, the business outlook
and quotations from management in this Interim Report,
as well as GDS Holdings’ strategic and operational plans,
are or contain forward-looking statements. GDS Holdings
may also make written or oral forward-looking statements
in its periodic reports to the U.S. Securities and Exchange
Commission (the “SEC”) on Forms 20-F and 6-K, in its
current, interim and annual reports to shareholders, in
announcements, circulars or other publications made on
the website of the Stock Exchange of Hong Kong Limited
(the “Hong Kong Stock Exchange”), in press releases
and other written materials and in oral statements made
by its officers, directors or employees to third parties.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause GDS
Holdings’ actual results or financial performance to differ
materially from those contained in any forward-looking
statement, including but not limited to the following: GDS
Holdings’ goals and strategies; GDS Holdings’ future
business development, financial condition and results

of operations; the expected growth of the market for
high-performance data centers, data center solutions
and related services in China and regions in which GDS
Holdings’ major equity investees operate, such as South
East Asia; GDS Holdings’ expectations regarding demand
for and market acceptance of its high-performance data
centers, data center solutions and related services; GDS
Holdings’ expectations regarding building, strengthening
and maintaining its relationships with new and existing
customers; the results of operations, growth prospects,
financial condition, regulatory environment, competitive
landscape and other uncertainties associated with the
business and operations of GDS Holdings’ major equity
investee DayOne; the continued adoption of cloud
computing and cloud service providers in China and
other major markets that may impact the results of our
equity investees, such as South East Asia; risks and
uncertainties associated with increased investments in
GDS Holdings’ business and new data center initiatives;
risks and uncertainties associated with strategic
acquisitions and investments; GDS Holdings’ ability to
maintain or grow its revenue or business; fluctuations
in GDS Holdings’ operating results; changes in laws,
regulations and regulatory environment that affect GDS
Holdings’ business operations and those of its major equity
investees; competition in GDS Holdings’ industry in China
and in markets that affect the business operations of its
major equity investees, such as South East Asia; GDS
Holdings’ ability to monetize its existing data center assets
through transactions such as public REITs, ABS Schemes,
data center funds, joint ventures, sale and lease-back
arrangements and private asset sales; security breaches;
power outages; and fluctuations in general economic and
business conditions in China and globally, and assumptions
underlying or related to any of the foregoing. Further
information regarding these and other risks, uncertainties
or factors is included in GDS Holdings’ filings with the
SEC, including its annual report on Form 20-F, and with
the Hong Kong Stock Exchange. All information provided in
this Interim Report is as of the date of this Interim Report
and are based on assumptions that GDS Holdings believes
to be reasonable as of such date, and GDS Holdings does
not undertake any obligation to update any forward-looking
statement, except as required under applicable law.

INTERIM REPORT 2026

11

GDS HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”) AND US DOLLARS (“US$”))

As of
December 31,
2025

As of June 30, 2026

RMB

RMB

US$

Cash and cash equivalents

14,305,958

14,927,348

2,200,019

Accounts receivable, net of allowance for credit losses

2,467,358

2,851,407

420,245

284,967

300,222

44,247

Prepaid expenses and other current assets

1,489,174

5,377,026

792,475

Total current assets

18,547,457

23,456,003

3,456,986

Long-term investments in equity investees

10,052,348

10,157,383

1,497,013

Property and equipment, net

38,053,824

38,734,730

5,708,793

Prepaid land use rights, net

16,119

4,767

703

Operating lease right-of-use assets

4,831,624

4,819,090

710,246

Goodwill and intangible assets, net

5,461,058

5,386,610

793,888

Other non-current assets

3,036,068

3,230,081

476,055

Total non-current assets

61,451,041

62,332,661

9,186,698

Total assets

79,998,498

85,788,664

12,643,684

2,951,734

3,327,344

490,390

0

4,219,035

621,809

Accounts payable

1,932,177

2,390,872

352,371

Accrued expenses and other payables

1,437,173

1,456,855

214,714

Operating lease liabilities, current

110,133

95,196

14,030

Finance lease and other financing obligations, current

697,142

1,663,135

245,116

7,128,359

13,152,437

1,938,430

Long-term borrowings, excluding current portion

23,363,213

24,024,451

3,540,766

Convertible bonds payable, non-current

12,144,371

7,573,947

1,116,262

Operating lease liabilities, non-current

1,203,487

1,151,678

169,736

Finance lease and other financing obligations, non-current

7,053,979

5,323,120

784,531

Other long-term liabilities

1,368,028

1,319,264

194,435

Total non-current liabilities

45,133,078

39,392,460

5,805,730

Total liabilities

52,261,437

52,544,897

7,744,160

Assets
Current assets

Value-added-tax (“VAT”) recoverable

Non-current assets

Liabilities, Mezzanine Equity and Equity
Current liabilities
Short-term borrowings and current portion of long-term borrowings
Convertible bonds payable, current

Total current liabilities
Non-current liabilities

12

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”) AND US DOLLARS (“US$”))

As of
December 31,
2025

As of June 30, 2026

RMB

RMB

US$

Redeemable preferred shares

1,056,663

3,070,157

452,485

Total mezzanine equity

1,056,663

3,070,157

452,485

562

569

84

31,706,498

31,820,587

4,689,774

(829,319)

(939,565)

(138,476)

Accumulated deficit

(5,094,729)

(1,610,813)

(237,404)

Total GDS Holdings Limited shareholders’ equity

25,783,012

29,270,778

4,313,978

897,386

902,832

133,061

Total equity

26,680,398

30,173,610

4,447,039

Total liabilities, mezzanine equity and equity

79,998,498

85,788,664

12,643,684

Mezzanine equity

GDS Holdings Limited shareholders’ equity
Ordinary shares
Additional paid-in capital
Accumulated other comprehensive loss

Non-controlling interests

INTERIM REPORT 2026

13

GDS HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”) AND US DOLLARS (“US$”) EXCEPT FOR NUMBER OF SHARES AND PER SHARE DATA)

Three months ended

Six months ended

June 30, 2025

March 31, 2026

June 30, 2026

June 30, 2026

RMB

RMB

RMB

US$

RMB

RMB

US$

Service revenue

2,898,398

3,366,680

3,086,667

454,918

5,621,306

6,453,347

951,106

Equipment sales

1,890

419

1,283

189

2,140

1,702

251

Total net revenue

2,900,288

3,367,099

3,087,950

455,107

5,623,446

6,455,049

951,357

Cost of revenue

(2,211,362)

(2,235,580)

(2,423,742)

(357,215)

(4,289,695)

(4,659,322)

(686,699)

Gross profit

688,926

1,131,519

664,208

97,892

1,333,751

1,795,727

264,658

Selling and marketing expenses

(33,977)

(36,560)

(32,215)

(4,748)

(66,741)

(68,775)

(10,136)

General and administrative expenses

(231,536)

(177,438)

(185,763)

(27,378)

(470,472)

(363,201)

(53,529)

Research and development expenses

(8,826)

(9,562)

(7,059)

(1,040)

(16,715)

(16,621)

(2,450)

Income from operations

414,587

907,959

439,171

64,726

779,823

1,347,130

198,543

(404,989)

(379,847)

(366,816)

(54,062)

(846,466)

(746,663)

(110,045)

Foreign currency exchange gain (loss), net

1,376

(1,396)

1,049

155

2,394

(347)

(51)

Others, net

9,245

97,614

17,839

2,629

18,930

115,453

17,016

0

0

0

0

1,057,045

0

0

Income before income taxes and share of
results of equity method investees

20,219

624,330

91,243

13,448

1,011,726

715,573

105,463

Income tax expenses

(64,858)

(108,706)

(213,535)

(31,471)

(264,559)

(322,241)

(47,492)

Share of results of equity method investees

(25,945)

2,136,513

959,916

141,474

(53,677)

3,096,429

456,357

Net (loss) income

(70,584)

2,652,137

837,624

123,451

693,490

3,489,761

514,328

Net income attributable to non-controlling
interests

(1,716)

(3,435)

(2,410)

(355)

(2,769)

(5,845)

(861)

Net (loss) income attributable to GDS
Holdings Limited shareholders

(72,300)

2,648,702

835,214

123,096

690,721

3,483,916

513,467

Cumulative dividend on redeemable preferred
shares

(13,621)

(24,521)

(32,388)

(4,773)

(27,076)

(56,909)

(8,387)

Net (loss) income available to GDS
Holdings Limited ordinary shareholders

(85,921)

2,624,181

802,826

118,323

663,645

3,427,007

505,080

Basic

(0.06)

1.67

0.52

0.08

0.44

2.16

0.32

Diluted

(0.06)

1.32

0.44

0.07

0.41

1.76

0.26

Basic

1,500,872,881

1,554,302,551

1,555,075,833

1,555,075,833

1,492,610,864

1,554,691,328

1,554,691,328

Diluted

1,500,872,881

2,031,672,616

2,075,789,317

2,075,789,317

1,665,829,316

2,032,226,169

2,032,226,169

June 30, 2025

Net revenue

Operating expenses

Other income (expenses):
Net interest expenses

Gain on deconsolidation of subsidiaries

(Loss) income per ordinary share

Weighted average number of ordinary
share outstanding

14

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”) AND US DOLLARS (“US$”))

Three months ended

Six months ended

June 30,
2025

March 31,
2026

RMB

RMB

RMB

US$

RMB

RMB

US$

Net (loss) income

(70,584)

2,652,137

837,624

123,451

693,490

3,489,761

514,328

Foreign currency translation
adjustments, net of nil tax

30,947

130,646

95,526

14,079

47,381

226,172

33,334

0

(17,334)

12,742

1,878

0

(4,592)

(677)

Other comprehensive income
(loss) from share of results
of equity method investees

103,682

(153,665)

(178,560)

(26,316)

100,288

(332,225)

(48,964)

Comprehensive income

64,045

2,611,784

767,332

113,092

841,159

3,379,116

498,021

Comprehensive income
attributable to non-controlling
interests

(2,143)

(3,202)

(2,244)

(331)

(3,304)

(5,446)

(803)

Comprehensive income
attributable to GDS Holdings
Limited shareholders

61,902

2,608,582

765,088

112,761

837,855

3,373,670

497,218

Amounts reclassified from
accumulated other
comprehensive loss

June 30,
2025

June 30, 2026

June 30, 2026

INTERIM REPORT 2026

15

GDS HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”) AND US DOLLARS (“US$”))

Three months ended

Six months ended

June 30,
2025

March 31,
2026

RMB

RMB

RMB

US$

RMB

RMB

US$

Net (loss) income

(70,584)

2,652,137

837,624

123,451

693,490

3,489,761

514,328

Depreciation and amortization

856,615

831,815

851,428

125,485

1,713,134

1,683,243

248,079

Amortization of debt issuance
cost and debt discount

22,169

20,116

34,431

5,075

53,973

54,547

8,039

Share-based compensation expense

61,202

83,821

67,475

9,945

123,179

151,296

22,298

Share of results of equity method
investees

25,945

(2,136,513)

(959,916)

(141,474)

53,677

(3,096,429)

(456,357)

0

0

0

0

(1,057,045)

0

0

Others

(9,980)

16,709

(59,695)

(8,798)

(1,808)

(42,986)

(6,335)

Changes in operating assets and
liabilities

(20,244)

(1,020,394)

644,913

95,047

66,595

(375,481)

(55,338)

Net cash provided by operating
activities

865,123

447,691

1,416,260

208,731

1,645,195

1,863,951

274,714

(1,264,798)

(770,045)

(1,249,766)

(184,193)

(2,274,126)

(2,019,811)

(297,683)

900,272

2,694,346

11,744

1,731

540,187

2,706,090

398,828

Purchases of time deposits

0

(4,414,802)

(309,215)

(45,573)

0

(4,724,017)

(696,234)

Maturities of time deposits

0

657,343

0

0

0

657,343

96,880

Net cash used in investing
activities

(364,526)

(1,833,158)

(1,547,237)

(228,035)

(1,733,939)

(3,380,395)

(498,209)

Net cash provided by financing
activities

5,144,746

1,881,331

308,130

45,413

5,419,778

2,189,461

322,686

Effect of exchange rate changes on
cash and cash equivalents and
restricted cash

(15,673)

(79,342)

(72,887)

(10,742)

(15,915)

(152,229)

(22,436)

Net increase of cash and cash
equivalents and restricted cash

5,629,670

416,522

104,266

15,367

5,315,119

520,788

76,755

Cash and cash equivalents and
restricted cash at beginning of
period

7,778,979

14,441,027

14,857,549

2,189,732

8,093,530

14,441,027

2,128,344

Reclassification as assets of disposal
group classified as held for sale

(87,260)

0

0

0

(87,260)

0

0

Cash and cash equivalents and
restricted cash at end of period

13,321,389

14,857,549

14,961,815

2,205,099

13,321,389

14,961,815

2,205,099

Gain on deconsolidation of
subsidiaries

Purchase of property and equipment
and land use rights, net of
proceeds from disposals
Receipts related to acquisitions
and investments

June 30,
2025

June 30, 2026

June 30, 2026

16

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”) AND US DOLLARS (“US$”) EXCEPT FOR PERCENTAGE DATA)

Three months ended

Six months ended

March 31, 2026

June 30, 2025

June 30, 2026

June 30, 2026

June 30, 2025

RMB

% of net
revenue

RMB

% of net
revenue

RMB

US$

% of net
revenue

RMB

% of net
revenue

RMB

US$

% of net
revenue

Gross profit

688,926

23.8

1,131,519

33.6

664,208

97,892

21.5

1,333,751

23.7

1,795,727

264,658

27.8

Depreciation and amortization

793,632

27.3

781,191

23.2

800,127

117,924

25.9

1,584,369

28.1

1,581,318

233,057

24.5

Operating lease cost relating to prepaid land
use rights

11,399

0.4

12,921

0.4

13,256

1,954

0.4

23,415

0.4

26,177

3,858

0.4

Accretion expenses for asset retirement costs

1,817

0.1

1,855

0.1

1,857

274

0.1

3,645

0.1

3,712

547

0.1

Share-based compensation expenses

13,728

0.4

24,552

0.7

19,415

2,862

0.6

19,744

0.4

43,967

6,480

0.7

Adjusted GP

1,509,502

52.0

1,952,038

58.0

1,498,863

220,906

48.5

2,964,924

52.7

3,450,901

508,600

53.5

Net (loss) income

(70,584)

(2.4)

2,652,137

78.8

837,624

123,451

27.1

693,490

12.3

3,489,761

514,328

54.1

Net interest expenses

404,989

14.0

379,847

11.3

366,816

54,062

11.9

846,466

15.1

746,663

110,045

11.6

Income tax expenses

64,858

2.2

108,706

3.2

213,535

31,471

6.9

264,559

4.7

322,241

47,492

5.0

Share of results of equity method investees

25,945

0.9

(2,136,513)

(63.5)

(959,916)

(141,474)

(31.1)

53,677

1.0

(3,096,429)

(456,357)

(48.0)

Gain on deconsolidation of subsidiaries

0

0.0

0

0.0

0

0

0.0

(1,057,045)

(18.9)

0

0

0.0

Depreciation and amortization

856,615

29.5

831,815

24.7

851,428

125,485

27.5

1,713,134

30.4

1,683,243

248,079

26.1

Operating lease cost relating to prepaid land
use rights

26,951

0.9

27,018

0.8

27,133

3,999

0.9

54,535

1.0

54,151

7,981

0.8

Accretion expenses for asset retirement costs

1,817

0.1

1,855

0.1

1,857

274

0.1

3,645

0.1

3,712

547

0.1

Share-based compensation expenses

61,202

2.1

83,821

2.5

67,475

9,945

2.2

123,179

2.2

151,296

22,298

2.3

Adjusted EBITDA

1,371,793

47.3

1,948,686

57.9

1,405,952

207,213

45.5

2,695,640

47.9

3,354,638

494,413

52.0

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

17

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

RECONCILIATION
The unaudited interim condensed consolidated financial information for the six months ended June 30, 2026 of GDS
Holdings Limited (the “Company”) are prepared under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and
reviewed by the Audit Committee of the Board.

BASIS OF PREPARATION
The Directors of the Company are responsible for preparing the Company’s reconciliation statement in relation to the
effects of material differences between the Company’s financial information prepared under U.S. GAAP and International
Financial Reporting Standards (“IFRS”) as of and for the six months ended June 30, 2026 (the “Reconciliation Statement”)
in accordance with the relevant requirements of the Listing Rules and relevant guidance in HKEX-GL111-22. The
Reconciliation Statement comprises a reconciliation setting out the financial effect of material differences between the
Company’s accounting policies under U.S. GAAP and IFRS, and an explanation of such differences.

RECONCILIATION PROCESS
The process applied in the preparation of Reconciliation Statement includes:
(i)

Extracting relevant financial information from the Company’s unaudited interim condensed consolidated financial
information for the six months ended June 30, 2026 as disclosed in the interim report prepared in accordance
with U.S. GAAP as the “Amounts as reported under U.S. GAAP” in respect of the unaudited condensed consolidated
statement of operations for the six months ended June 30, 2026 and the unaudited condensed consolidated balance
sheet as of June 30, 2026;

(ii)

Identifying material differences between the Company’s financial statements prepared under U.S. GAAP and IFRS,
and quantifying the financial effects resulting from such differences; and

(iii)

Preparing the description of the reconciling items to explain the differences in the accounting policies.

LIMITED ASSURANCE ENGAGEMENT AND RESULTS
KPMG was engaged by the Company to conduct work on the Reconciliation Statement and to report thereon in the form
of an independent limited assurance conclusion to the Directors based on the evidence obtained in accordance with Hong
Kong Standard on Assurance Engagements 3000 (Revised) Assurance Engagements Other Than Audits or Reviews of
Historical Financial Information (“HKSAE 3000 (Revised)”) issued by the Hong Kong Institute of Certified Public Accountants
(the “HKICPA”).

18

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

A limited assurance engagement consists of making inquiries, primarily of persons responsible for the preparation of
the Reconciliation Statement, assessing the suitability of the basis of preparation and the reconciliation process, and
applying other procedures. The procedures selected depend on their understanding of the Reconciliation Statement and
other engagement circumstances, and the consideration of areas where material misstatements are likely to arise. These
procedures included:
(i)

Comparing the financial information in the columns “Amounts as reported under U.S. GAAP” as set out in the
Reconciliation Statement with the corresponding financial statement line items in the Company’s unaudited interim
condensed consolidated financial information for the six months ended June 30, 2026 as disclosed in the interim
report;

(ii)

Evaluating the adjustments made and evidence supporting the adjustments made in arriving at the “Amounts as
reported under IFRS” as set out in the Reconciliation Statement with reference to the basis of preparation and the
reconciliation process;

(iii)

Checking the arithmetic accuracy of the computation of the “Amounts as reported under IFRS” as set out in the
Reconciliation Statement; and

(iv)

Reading the description of the material differences to determine whether it is in line with their knowledge obtained in
performing the above procedures.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent
than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance
engagement been performed.

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

19

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

KPMG’s engagement did not involve independent examination of any of the underlying records or other sources from
which the Reconciliation Statement was extracted. The procedures performed in accordance with HKSAE 3000 (Revised)
is different in scope from an audit or a review conducted in accordance with Hong Kong Standards on Auditing or Hong
Kong Standards on Review Engagements issued by the HKICPA and consequently, KPMG did not express an audit opinion
nor a review conclusion on the Reconciliation Statement. KPMG’s engagement was intended solely for the use of the
Directors in connection with the Company’s interim report for the six months ended 30 June, 2026 and may not be
suitable for another purpose. Based on the procedures performed and evidence obtained, nothing has come to KPMG’s
attention that causes them to believe:
(i)

The amounts in the columns “Amounts as reported under U.S. GAAP” as set out in the Reconciliation Statement
are not in agreement with the amounts of corresponding financial statement line items in the Company’s unaudited
interim condensed consolidated financial information for the six months ended June 30, 2026 as disclosed in the
interim report;

(ii)

The adjustments made in arriving at the “Amounts as reported under IFRS” as set out in the Reconciliation Statement
are not prepared, in all material respects, in accordance with the basis of preparation and reconciliation process as
set out above; and

(iii)

The computation of the amounts in the columns “Amounts as reported under IFRS” as set out in the Reconciliation
Statement are not arithmetically accurate.

(470,472)

779,823

(846,466)

General and administrative expenses

Income from operations

Net interest expenses

(27,076)

663,645

Cumulative dividend on redeemable preferred
shares

Net income (loss) available to GDS Holdings
Limited ordinary shareholders

693,490

Net income (loss)

690,721

(53,677)

Share of results of equity method investees

Net income (loss) attributable to GDS
Holdings Limited shareholders

(264,559)

Income tax expenses

(2,769)

1,011,726

Income before income taxes and share of
results of equity method investees

Net income attributable to non-controlling
interests

1,057,045

Gain on deconsolidation of subsidiaries

18,930

1,333,751

Gross profit

Others, net

(4,289,695)

Amounts as
reported under
U.S. GAAP

(7,897)

–

(7,897)

–

(7,897)

–

7,572

(15,469)

–

–

(49,692)

34,223

2,398

31,825

31,825

Lease
(Note (a))

–

–

–

–

(213,671)

–

(213,671)

–

(213,671)

–

–

(213,671)

–

–

(213,671)

Convertible
Bonds
due 2029
and 2030
(Note (b))

Reconciliation of consolidated statements of operations data:

–

–

(663,573)

–

(663,573)

–

(663,573)

–

–

(663,573)

–

(627,524)

(7,812)

(28,237)

(28,237)

Convertible
Bonds
due 2032
(Note (c))

17,137

27,076

(9,939)

–

(9,939)

–

–

(9,939)

–

29,404

(39,343)

–

–

–

–

Redeemable
preferred
shares of the
Company issued
in 2019
(Note (d))

IFRS adjustments

62,854

–

62,854

(62)

62,916

–

(3,133)

66,049

–

–

–

66,049

6,611

59,438

59,438

Long-lived
assets
impairment
(Note (g))

For the six months ended June 30, 2025

(1,595)

–

(1,595)

–

(1,595)

–

–

(1,595)

(1,595)

–

–

–

–

–

–

Deconsolidation
of subsidiaries
(Note (h))

–

–

–

–

–

–

–

–

–

(478)

–

(478)

–

(478)

(478)

Equity
method
investments
(Note (i))

(143,578)

–

(143,578)

(2,831)

(140,747)

(54,155)

(260,120)

173,528

1,055,450

(579,190)

(1,156,984)

851,858

(489,700)

1,425,014

(4,198,432)

Amounts as
reported
under IFRS

GDS HOLDINGS LIMITED

Cost of revenue

(i)

The Company’s unaudited interim condensed consolidated financial information are prepared in accordance with U.S. GAAP, which differ in certain
respects from IFRS. The effects of material differences between U.S. GAAP and IFRS are as follows:

20
INTERIM REPORT 2026

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

(746,663)

115,453

715,573

(322,241)

3,096,429

3,489,761

Net interest expenses

Others, net

Income before income taxes and share of
results of equity method investees

Income tax expenses

Share of results of equity method investees

Net income (loss)

(56,909)

3,427,007

Cumulative dividend on redeemable preferred
shares

Net income (loss) available to GDS
Holdings Limited ordinary shareholders

3,483,916

1,347,130

Income from operations

Net income (loss) attributable to GDS
Holdings Limited shareholders

(363,201)

General and administrative expenses

(5,845)

1,795,727

Gross profit

Net income attributable to non-controlling
interests

(4,659,322)

Cost of revenue

Amounts as
reported under
U.S. GAAP

(14,934)

–

(14,934)

–

(14,934)

–

746

(15,680)

–

(46,786)

31,106

2,365

28,741

28,741

Lease
(Note (a))

–

–

–

–

(223,673)

–

(223,673)

–

(223,673)

–

–

(223,673)

–

(223,673)

Convertible
Bonds
due 2029
and 2030
(Note (b))

–

–

–

–

439,587

–

439,587

–

439,587

–

–

439,587

484,493

(44,906)

Convertible
Bonds
due 2032
(Note (c))

(5,893)

26,024

(31,917)

–

(31,917)

–

–

(31,917)

6,814

(38,731)

–

–

–

–

Redeemable
preferred
shares of the
Company issued
in 2019
(Note (d))

IFRS adjustments

269,044

30,885

238,159

–

238,159

–

–

238,159

309,367

(59,601)

(11,607)

(11,607)

–

–

Redeemable
preferred
shares of the
Company issued
in 2026
(Note (e))

For the six months ended June 30, 2026

73,378

–

73,378

(63)

73,441

–

21,789

51,652

–

–

51,652

1,706

49,946

49,946

Long-lived
assets
impairment
(Note (g))

–

–

–

–

–

–

–

–

269,653

–

269,653

–

269,653

269,653

Equity
method
investments
(Note (i))

4,234,169

–

4,234,169

(5,908)

4,240,077

3,366,082

(299,706)

1,173,701

916,127

(1,160,360)

1,418,281

(370,737)

1,874,414

(4,580,635)

Amounts as
reported
under IFRS

INTERIM REPORT 2026
GDS HOLDINGS LIMITED

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

21

61,451,041

79,998,498

Total non-current assets

Total assets

7,128,359

697,142

Finance lease and other financing
obligations, current

Total current liabilities

110,133

1,437,173

Operating lease liabilities, current

Accrued expenses and other payables

–

3,036,068

Other non-current assets

Convertible bonds payable, current

5,461,058

Goodwill and intangible assets, net

16,119

Prepaid land use rights, net

4,831,624

38,053,824

Property and equipment, net

Operating lease right-of-use assets

10,052,348

Amounts as
reported under
U.S. GAAP
–

(8,727)

101,406

(110,133)

–

–

(176,378)

(176,378)

16,236

(39,305)

(4,831,624)

–

4,678,315

Lease
(Note (a))

Convertible
Bonds
due 2029
and 2030
(Note (b))

Reconciliation of consolidated balance sheets data:

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

4,842,793

–

–

1,991,962

2,850,831

Convertible
Bonds
due 2032
(Note (c))

–

–

–

–

–

132,844

132,844

132,844

–

–

–

–

–

Redeemable
preferred
shares of the
Company issued
in 2019
(Note (d))

–

–

–

–

–

–

–

–

–

–

–

–

–

Redeemable
non-controlling
interests
(Note (f))

IFRS adjustments

As of December 31, 2025

–

–

–

–

–

–

(1,146,718)

(1,146,718)

88,344

(15,214)

–

(251)

(1,219,597)

Long-lived
assets
impairment
(Note (g))

–

–

–

–

–

76,197

76,197

–

76,197

–

–

–

–

Deconsolidation
of subsidiaries
(Note (h))

–

–

–

–

–

(722,848)

(722,848)

–

–

–

–

–

(722,848)

Equity method
investments
(Note (i))

11,962,425

798,548

–

3,429,135

2,850,831

78,161,595

59,614,138

3,273,492

5,482,736

–

15,868

41,512,542

9,329,500

Amounts as
reported
under IFRS

GDS HOLDINGS LIMITED

Long-term investments in equity
investees

(ii)

22
INTERIM REPORT 2026

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

7,053,979

1,368,028

Finance lease and other financing
obligations, non-current

Other long-term liabilities

1,056,663

1,056,663

31,706,498

Redeemable preferred shares

Total mezzanine equity

Additional paid-in capital

26,680,398

79,998,498

Total equity

Total liabilities, mezzanine equity
and equity

897,386

25,783,012

Total GDS Holdings Limited
shareholders’ equity

Non-controlling interests

(5,094,729)

Accumulated deficit

(829,319)

52,261,437

Total liabilities

Accumulated other comprehensive loss

45,133,078

Total non-current liabilities

–

1,203,487

Operating lease liabilities, non-current

Redeemable preferred shares, noncurrent

12,144,371

Convertible bonds payable, non-current

Amounts as
reported under
U.S. GAAP
–

(176,378)

(298,480)

–

(298,480)

(298,485)

5

–

–

–

122,102

130,829

–

9,823

1,324,493

(1,203,487)

Lease
(Note (a))

–

754,142

–

754,142

(1,803,907)

185,473

2,372,576

–

–

(754,142)

(754,142)

–

–

–

–

(754,142)

Convertible
Bonds
due 2029
and 2030
(Note (b))

–

(1,101,270)

–

(1,101,270)

(1,080,182)

15,861

(36,949)

–

–

1,101,270

(3,741,523)

–

–

–

–

(3,741,523)

Convertible
Bonds
due 2032
(Note (c))

132,844

137,717

–

137,717

(359,458)

5,775

491,400

(1,056,663)

(1,056,663)

1,051,790

1,051,790

1,051,790

–

–

–

–

Redeemable
preferred
shares of the
Company issued
in 2019
(Note (d))

–

–

–

–

(286,053)

–

286,053

–

–

–

–

–

–

–

–

–

Redeemable
non-controlling
interests
(Note (f))

IFRS adjustments

As of December 31, 2025

–

–

–

(1,146,718)

(1,116,828)

(1,941)

(1,114,887)

(1,114,887)

–

–

–

–

(29,890)

(29,890)

–

(29,890)

Long-lived
assets
impairment
(Note (g))

76,197

76,197

–

76,197

76,197

–

–

–

–

–

–

–

–

–

–

–

Deconsolidation
of subsidiaries
(Note (h))

(722,848)

(722,848)

–

(722,848)

134,941

5,674

(863,463)

–

–

–

–

–

–

–

–

–

Equity method
investments
(Note (i))

78,161,595

24,409,028

895,445

23,513,583

(9,826,563)

(616,531)

33,956,115

–

–

53,752,567

41,790,142

1,051,790

1,347,961

8,378,472

–

7,648,706

Amounts as
reported
under IFRS

INTERIM REPORT 2026
GDS HOLDINGS LIMITED

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

23

4,219,035

1,456,855

Convertible bonds payable, current

Accrued expenses and other
payables

Total current liabilities

Redeemable preferred shares,
current

13,152,437

–

1,663,135

85,788,664

Total assets

Finance lease and other financing
obligations, current

62,332,661

Total non-current assets

95,196

3,230,081

Other non-current assets

Operating lease liabilities, current

5,386,610

Goodwill and intangible assets, net

4,767

Prepaid land use rights, net

4,819,090

38,734,730

Property and equipment, net

Operating lease right-of-use assets

10,157,383

–

(9,000)

–

86,196

(95,196)

–

–

(182,782)

(182,782)

16,584

(39,305)

(4,819,090)

–

4,659,029

Lease
(Note (a))

(184,438)

–

–

–

–

(184,438)

–

–

–

–

–

–

–

–

4,269,539

–

–

–

1,445,954

2,823,585

–

–

–

–

–

–

–

–

Convertible
Bonds
due 2032
(Note (c))

–

–

–

–

–

–

135,537

135,537

135,537

–

–

–

–

–

1,732,246

1,522,470

–

–

209,776

–

–

–

–

–

–

–

–

–

Redeemable
preferred
shares of the
Company
issued
in 2026
(Note (e))

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Redeemable
non-controlling
interests
(Note (f))

–

–

–

–

–

–

(1,072,529)

(1,072,529)

110,881

(14,417)

–

(247)

(1,168,746)

–

Long-lived
assets
impairment
(Note (g))

–

–

–

–

–

–

76,197

76,197

–

76,197

–

–

–

–

–

–

–

–

–

–

(504,130)

(504,130)

–

–

–

–

–

(504,130)

Deconsolidation Equity method
of subsidiaries investments
(Note (i))
(Note (h))

18,960,784

1,522,470

1,749,331

–

3,112,585

6,858,182

84,240,957

60,784,954

3,493,083

5,409,085

–

4,520

42,225,013

9,653,253

Amounts as
reported
under IFRS

GDS HOLDINGS LIMITED

Long-term investments in equity
investees

Amounts as
reported under
U.S. GAAP

Convertible
Bonds
due 2029
and 2030
(Note (b))

Redeemable
preferred
shares of the
Company
issued
in 2019
(Note (d))

IFRS adjustments

As of June 30, 2026

24
INTERIM REPORT 2026

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

5,323,120

1,319,264

Finance lease and other financing
obligations, non-current

Other long-term liabilities

3,070,157

3,070,157

31,820,587

Redeemable preferred shares

Total mezzanine equity

Additional paid-in capital

30,173,610

85,788,664

Total equity

Total liabilities, mezzanine
equity and equity

902,832

29,270,778

Total GDS Holdings Limited
shareholders’ equity

Non-controlling interests

(1,610,813)

Accumulated deficit

(939,565)

52,544,897

Total liabilities

Accumulated other comprehensive
loss

39,392,460

Total non-current liabilities

–

1,151,678

Operating lease liabilities, noncurrent

Redeemable preferred shares, noncurrent

7,573,947

Convertible bonds payable, noncurrent

Amounts as
reported under
U.S. GAAP
–

(182,782)

(313,392)

–

(313,392)

(313,419)

27

–

–

–

130,610

139,610

–

9,421

1,281,867

(1,151,678)

Lease
(Note (a))

–

510,009

–

510,009

(2,027,580)

165,013

2,372,576

–

–

(510,009)

(325,571)

–

–

–

–

(325,571)

Convertible
Bonds
due 2029
and 2030
(Note (b))

–

(627,194)

–

(627,194)

(640,595)

50,350

(36,949)

–

–

627,194

(3,642,345)

–

–

–

–

(3,642,345)

Convertible
Bonds
due 2032
(Note (c))

135,537

127,721

–

127,721

(391,375)

1,672

517,424

(1,023,763)

(1,023,763)

1,031,579

1,031,579

1,031,579

–

–

–

–

Redeemable
preferred
shares of the
Company
issued
in 2019
(Note (d))

–

314,148

–

314,148

238,159

(596)

76,585

(2,046,394)

(2,046,394)

1,732,246

–

–

–

–

–

–

Redeemable
preferred
shares of the
Company
issued
in 2026
(Note (e))

IFRS adjustments

–

–

–

–

(286,053)

–

286,053

–

–

–

–

–

–

–

–

–

Redeemable
non-controlling
interests
(Note (f))

As of June 30, 2026

(1,072,529)

(1,043,387)

(1,878)

(1,041,509)

(1,041,509)

–

–

–

–

(29,142)

(29,142)

–

(29,142)

–

–

–

Long-lived
assets
impairment
(Note (g))

76,197

76,197

–

76,197

76,197

–

–

–

–

–

–

–

–

–

–

–

(504,130)

(504,130)

–

(504,130)

404,594

12,909

(921,633)

–

–

–

–

–

–

–

–

–

Deconsolidation Equity method
of subsidiaries investments
(Note (i))
(Note (h))

84,240,957

28,713,582

900,954

27,812,628

(5,592,394)

(710,190)

34,114,643

–

–

55,527,375

36,566,591

1,031,579

1,299,543

6,604,987

–

3,606,031

Amounts as
reported
under IFRS

INTERIM REPORT 2026
GDS HOLDINGS LIMITED

25

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

26

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

Notes:
(a)

Leases
Under U.S. GAAP, there is a dual-classification lease accounting model for lessees: finance leases and operating leases. For operating leases, unless
the right-of-use asset has been impaired, the amortization of right-of-use assets and the interest expense of lease liabilities are recorded together as
a single lease cost on a straight-line basis over the remaining lease term.
Under IFRS, all leases are classified as finance leases, where right-of-use assets are amortized on a straight-line basis, while interest expenses of
lease liabilities are recorded in interest expenses under the effective interest method, which generally yields a “front-loaded” expense with more
expense recognized in earlier years of the lease.

(b)

Convertible Bonds due 2029 and 2030
Under U.S. GAAP, Convertible Bonds due 2029 and 2030 of the Company are classified as liabilities and measured at amortized cost, with any
difference between the initial carrying value and the repayment amount recognized as interest expenses using effective interest method over the
period from the issuance date to the maturity date.
Under IFRS, Convertible Bonds due 2029 and 2030 of the Company are divided into liability and equity components with the initial value of the liability
component being the present value of a straight bond and the residual amount allocated to the equity component. The issuance cost is allocated
between the liability and equity components. The liability component of the convertible bonds is subsequently measured at amortized cost using the
effective interest method.

(c)

Convertible Bonds due 2032
Under U.S. GAAP, Convertible Bonds due 2032 of the Company are classified as liabilities and measured at amortized cost, with any difference
between the initial carrying value and the repayment amount recognized as interest expenses using effective interest method over the period from the
issuance date to the maturity date. The Convertible Bonds due 2032 has been classified as non-current as the classification of the convertible bonds
as current or non-current is not affected by the holder’s option to convert the convertible bonds into an equity instrument since the Company can
choose to settle in shares.
The Company has accounted for the share-lending arrangement related to the issuance of Convertible Bonds due 2032 as equity, initially measured at
fair value and recognized it as an issuance cost associated with Convertible Bonds due 2032, with a corresponding increase to ordinary shares and
additional paid-in-capital.
Under IFRS, due to the cash settlement feature of the conversion option, the conversion option is classified as a derivative liability. The holder’s
put option, the Company’s redemption options, together with the conversion option are treated as one single compound embedded derivative. As
the conversion feature is not closely related to the host, the entire compound embedded derivative is separated. Convertible Bonds due 2032 of
the Company are divided into derivative and non-derivative liability components with the initial value of the derivative component being the fair value
and the residual amount allocated to the non-derivative liability component. The issuance cost is allocated between the derivative and nonderivative
components. The portion allocated to the derivative component is recognized as expense immediately. The portion allocated to the non-derivative
liability component is included in the initial measurement of the non-derivative liability. The derivative component is subsequently measured at fair
value with changes in fair value recognized in profit or loss. The non-derivative liability component of the convertible bonds is subsequently measured
at amortized cost using the effective interest method. The Convertible Bonds due 2032 has been classified as current since the holder has an option
to convert the host liability into the Company’s own equity instruments upon certain conditions before December 31, 2031, or any time on or after
December 31, 2031, and the Company does not have the right to defer settlement for at least twelve months from the reporting date.
With regards to the share-lending arrangement, the shares underlying the Loaned ADSs are not treated as issued until the borrower defaults on
its obligation to return the Loaned ADSs or is required to pay the replacement cash. Accordingly, the lending of those shares does not have any
accounting impact, except that dividends on Loaned ADSs and the Company’s right to be reimbursed for those dividends are accounted for as a
derivative measured at fair value through profit or loss.

INTERIM REPORT 2026

GDS HOLDINGS LIMITED

27

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

(d)

Redeemable preferred Shares of the Company issued in 2019
Under U.S. GAAP, the redeemable preferred shares issued in 2019 of the Company are classified as mezzanine equity since they are contingently
redeemable upon the occurrence of certain events that are not solely within the Company’s control. The issuance cost is treated as an adjustment
to the initial value of the redeemable preferred shares of the Company. The redeemable preferred shares issued in 2019 of the Company are
subsequently accreted to the redemption value using effective interest rate.
Under IFRS, the redeemable preferred shares issued in 2019 of the Company are divided into derivative component, non-derivative liability component
and equity component with the initial value of the derivative component being the fair value, the initial value of the non-derivative liability component
referring the present value of a straight debt and the residual amount allocated to the equity component. The issuance cost is allocated among the
derivative, the non-derivative liability and the equity components. The non-derivative liability component of the redeemable preferred shares of the
Company is subsequently amortized using effective interest method.

(e)

Redeemable preferred Shares of the Company issued in 2026
Under U.S. GAAP, the redeemable preferred shares issued in 2026 of the Company are classified as mezzanine equity since they are contingently
redeemable upon the occurrence of certain events that are not solely within the Company’s control. The issuance cost is treated as an adjustment
to the initial value of the redeemable preferred shares of the Company. The redeemable preferred shares issued in 2026 of the Company are
subsequently accreted to the redemption value using effective interest rate.
Under IFRS, the redeemable preferred shares issued in 2026 of the Company are divided into derivative and non-derivative liability components. The
derivative component is measured first at fair value with the residual amount being allocated to the non-derivative liability component. The issuance
cost is allocated between the derivative and non-derivative liability components. The portion allocated to the derivative component is recognized
as expense immediately. The portion allocated to the non-derivative liability component is included in the initial measurement of the non-derivative
liability. The derivative component is subsequently measured at fair value with changes in fair value being recognized in profit or loss. The nonderivative liability component is subsequently measured at amortized cost using the effective interest method.

(f)

Redeemable non-controlling interests
Under U.S. GAAP, when the non-controlling interests are redeemable at the option of the non-controlling shareholder, or contingently redeemable upon
the occurrence of a conditional event that is not solely within the control of the Company, the non-controlling interests are separately classified as
mezzanine equity. If the redemption is not considered probable, they are subsequently measured pursuant to ASC 810 (i.e. increased or decreased
for the non-controlling interests’ share of net income or loss). If the redemption is considered probable, they are subsequently measured as the
greater of (i) the balance determined pursuant to ASC 810 and (ii) the balance determined pursuant to ASC 480-10-S99-3A (i.e. the redemption
value, which cannot be lower than initial amount). As the redemption was considered probable, the subsequent accretion to redemption value of the
redeemable non-controlling interests was charged against additional paid-in capital.
Under IFRS, the redeemable non-controlling interests were presented as liability, as the Company did not have the unconditional right to avoid
delivering cash or another financial asset, and measured at fair value subsequently. The changes in the fair value were subsequently recognized in
profit or loss.

28

GDS HOLDINGS LIMITED

INTERIM REPORT 2026

RECONCILIATION BETWEEN U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(“U.S. GAAP”) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
(AMOUNT IN THOUSANDS OF RENMINBI (“RMB”))

(g)

Long-lived assets impairment
Under U.S. GAAP, two-step approach is used in the measurement and recognition of impairment loss of long-lived assets. During step one,
recoverability test, the carrying amount is first compared with the undiscounted cash flows, using entity specific assumptions. During step two,
measurement test, if the carrying amount is higher than the undiscounted cash flows, an impairment loss is measured as the difference between the
carrying value and fair value. Subsequent reversal of a previously recognized impairment loss is prohibited.
Under IFRS, a one-step approach is used in impairment testing. The carrying amount is compared with the recoverable amount, which is the higher
of fair value less costs of disposal or the asset’s value in use based on the net present value of future cash flows. Therefore, the difference in
impairment assessment results in difference in impairment loss under IFRS. In addition, the lease accounting difference leads to difference in the
carrying amounts of right-of-use assets and thus results in difference in impairment loss. If there is an indication of reversal of impairment for a longlived asset and the recoverable amount of the impaired asset or cash generating unit increases subsequently, then the impairment loss is generally
reversed. A reversal of an impairment loss is generally recognized in profit or loss.

(h)

Deconsolidation of subsidiaries
Under both U.S. GAAP and IFRS, when the Company reorganizes its reporting structure in a manner that changes the composition of one or more of
its reporting units, or when a portion of a reporting unit that constitutes a business is to be disposed of, goodwill is reassigned to the reporting units
affected using a relative fair value allocation approach. The differences in goodwill balance and the relative fair value of reporting units between U.S.
GAAP and IFRS lead to the difference in allocation of goodwill and gain on deconsolidation of subsidiaries.

(i)

Equity method investments
Under both U.S. GAAP and IFRS, equity method is used to account for the investments in equity investees if the Company has significant influence
but does not have control over the investee. The differences in the results of the investees are caused by the differences in accounting treatment of
transactions such as leases, long-lived assets impairment and share award plan under U.S. GAAP and IFRS, which lead to differences in the balances
of long-term investments in equity investees and share of results of equity method investees which included the dilution gain.