Domestic AIDC Becomes the Core Growth Engine, While Hong Kong and Batam Projects Unlock Overseas IDC Opportunities

Overview

This report summarizes discussions with Range Technology’s management at Goldman Sachs’ 2026 Asia Leaders Conference, focusing on domestic AIDC expansion, overseas IDC construction in Hong Kong and Batam, order quality, computing-power procurement, and financial growth. Goldman Sachs’ core view is that the company’s ample data center resources, strong AIDC profitability, and low-cost financing can support long-term growth, while overseas projects represent an additional growth driver.

Core views

Range Technology is transitioning from a traditional IDC colocation provider to a dual-engine model of domestic AIDC growth and overseas IDC expansion. The company began operating traditional IDC services in 2009 and entered the AIDC business, including computing-power leasing and full-stack solutions, around 2022–2023. In 1H26, AIDC revenue contribution exceeded that of traditional IDC for the first time, becoming the company’s core revenue source, while its overseas business remains focused on IDC construction and delivery. Resource reserves underpin growth. The company currently operates nine campuses globally with 6GW of total resources, including 5.4GW domestically and 0.6GW overseas, a significant increase from 2–3GW in 2022. Most of these reserves have secured power quota approvals. Its domestic campuses are located around major tier-one hubs, including Langfang near Beijing, Pinghu serving the Yangtze River Delta, Foshan near Guangzhou, Huizhou near Shenzhen, as well as Chongqing, Lanzhou, and Hainan. Operating capacity totaled 750MW in 2025 and has recently reached approximately 1GW following new capacity deliveries in Chongqing, Huizhou, and Langfang. The company has accelerated deliveries since 2025 to meet strong customer demand under long-term contracts. Domestic AIDC expansion depends on GPU prices and supply. Capital expenditure remains primarily directed toward computing-power procurement, but the company temporarily slowed procurement due to the sharp increase in GPU prices in 1H26. It may step up procurement in 2H26 if price trends and chip supply improve. Fixed assets increased by Rmb116mn in 2025, of which approximately Rmb100mn was related to the AIDC business. The report highlights the need to monitor fixed assets, construction in progress, prepayments, capital expenditure, and depreciation together, as these items reflect AIDC investment, delivery progress, and subsequent earnings impact. The company emphasizes margins and order quality rather than pursuing scale alone. AIDC gross margin reached 45% in 1H26, significantly above the typical 20%–25% average for computing-power leasing companies. The company selects customers with low default risk and accepts only high-margin orders. Standard contracts have a five-year term and fixed pricing, with a target payback period of approximately three years. Early termination requires a penalty equal to 100% of the remaining contract value, reducing investment recovery and credit risks. The customer mix has also become more balanced: the largest and second-largest end customers each contribute approximately 30% of revenue, while the third-largest contributes approximately 15%. Liquid-cooling capabilities are an important enabler of AIDC and overseas deliveries. Liquid-cooling capacity and components remained in short supply in 1H26. The company has deployed liquid cooling in 65% of its domestic AIDC infrastructure and plans to achieve 100% liquid-cooling coverage in its overseas IDCs. This supports high-density computing demand and demonstrates its ability to leverage China’s prefabricated modular data center supply chain for overseas construction. The Hong Kong project is central to overseas expansion. The campus has 240MW of planned capacity and is positioned to become the largest campus in Hong Kong, with Rmb21.8bn of investment during the first three years. Its land cost is approximately one-tenth of the market average, and construction is conducted continuously around the clock. Management is positive about current construction progress and expects the first building to be powered on by July 2027. The report describes Hong Kong’s data center market as a seller’s market, with an average gross margin of approximately 57%, robust demand, and capacity through 2027 already sold out, providing a favorable supply-demand environment for new capacity additions. The Batam, Indonesia campus has 60MW scheduled for delivery in 4Q26, with construction heavily reliant on prefabricated modular data centers supplied from China. The company will control the pace of investment until power is secured to reduce upfront capital risk. Overall, management targets 1GW of overseas deliveries over the next 3–5 years, leveraging its supply-chain and human-resource capabilities to capture long-term growth in AI demand across the Asia-Pacific region. Financially, since Range Technology’s listing in 2022, revenue, EBITDA, and net profit have each recorded a four-year CAGR of approximately 30%. Management aims to maintain a CAGR of approximately 30% over the next five years and increase operating cash flow from an estimated Rmb6bn in 2026 to an estimated Rmb20bn in 2030. Revenue grew by more than 50% year-on-year in 1H26. Although slower computing-power procurement affected AIDC revenue growth, adjusted net profit excluding the impact of the deconsolidation of a public REIT in 2025 still increased by more than 50%. The debt-to-asset ratio is below 65%, the cost of three-year bank loans can be as low as 1.7%, and the founder owns more than 50% of the company. Goldman Sachs forecasts CAGRs of 27% and 33% for utilized IT capacity and revenue, respectively, from 2025 to 2030. It forecasts revenue of Rmb5,673.7mn, Rmb8,541.3mn, Rmb11,879.6mn, and Rmb15,480.5mn for 2025, 2026E, 2027E, and 2028E, respectively; EBITDA of Rmb3,550.5mn, Rmb5,924.4mn, Rmb8,561.0mn, and Rmb11,241.1mn; and EPS of Rmb1.13, Rmb1.68, Rmb2.03, and Rmb2.35, corresponding to P/E multiples of 45.8x, 38.7x, 32.0x, and 27.6x. P/B multiples for the same periods are 5.4x, 6.1x, 5.3x, and 4.6x; dividend yields are 1.2%, 1.2%, 0.6%, and 0.7%; net debt excluding leases/EBITDA is 3.7x, 4.5x, 4.6x, and 4.4x; CROCI is 10.9%, 11.1%, 11.9%, and 12.6%; and free cash flow yields are -10.2%, -14.7%, -11.6%, and -9.6%. Goldman Sachs rates the company Buy, citing its substantial capacity reserves, full-stack AIDC capabilities, declining customer concentration, low-cost and diversified financing, and the potential for GPUaaS to contribute incremental profit amid favorable demand and pricing conditions. Its 12-month target price of Rmb117 is based on 2030E EV/EBITDA: 25x for data center operations and 10x for GPUaaS, resulting in a weighted target multiple of 18x, discounted to year-end 2026 at a 10% cost of equity. Compared with the September 1, 2026 closing price of Rmb64.95, the target price implies potential upside of 80.1%.

Analysis framework

The report first uses management discussions at the conference to review the business transformation, resource reserves, computing-power procurement, and progress of overseas projects. It then assesses growth quality based on order margins, contractual protections, customer structure, and financing conditions. Next, it uses company data, Goldman Sachs research forecasts, and FactSet data to establish capacity and financial growth expectations for 2025–2030. Finally, it derives and discounts a target valuation using separate EV/EBITDA multiples for data center operations and GPUaaS.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Data Center Capacity Supply-Demand and Delivery Analysis

  The report compares capacity reserves that have secured power quotas and their commissioning and construction progress against customer demand. It also uses the seller’s-market characteristics of Hong Kong, where capacity through 2027 is sold out and the average gross margin is approximately 57%, to demonstrate the demand foundation for new capacity.

• Valuation MethodEV/EBITDA valuation

  Weighted Sum-of-the-Parts EV/EBITDA Discounted at the Cost of Equity

  Goldman Sachs applies 2030E EV/EBITDA multiples of 25x to data center operations and 10x to GPUaaS, forming a blended multiple of 18x based on business weights. It then discounts this at a 10% cost of equity to year-end 2026 to derive a 12-month target price of Rmb117.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Range Technology (300442.SZ)

  The primary company covered by the report. Domestic AIDC is its current core revenue driver, while overseas IDC is viewed as a long-term source of incremental growth.

  Strengths

  The company has 6GW of resource reserves and full-stack AIDC capabilities, with an AIDC gross margin of 45% in 1H26. Its customer mix is becoming more balanced, financing costs are low, and it possesses prefabricated modular construction and liquid-cooling deployment capabilities.

  Weaknesses

  Growth depends on substantial capital investment and computing-power procurement, while higher GPU prices in 1H26 have already slowed procurement. Forecast free cash flow yields remain negative, and net debt/EBITDA is expected to remain elevated.

  Comparison

  The company is one of China’s larger data center operators by operating and reserved capacity. Its 45% AIDC gross margin exceeds the typical 20%–25% average for computing-power leasing companies.

  Risks

  Order intake, utilization ramp-up, pricing pressure, overseas execution, chip supply, and financing conditions could all fall short of expectations.

Key data

• Rating and Target PriceBuy; 12-month target price of Rmb117The report price is the September 1, 2026 closing price of Rmb64.95, implying 80.1% upside
• Global Resource Reserves6GWNine campuses globally, including 5.4GW domestically and 0.6GW overseas; 2–3GW in 2022
• Commissioned CapacityApproximately 1GWRecently includes new deliveries in Chongqing, Huizhou, and Langfang; operating capacity was 750MW in 2025
• AIDC Gross Margin45%In 1H26, significantly above the typical 20%–25% average for computing-power leasing companies
• AIDC Contract TermsFive-year fixed-price contracts with a target three-year payback periodThe early-termination penalty equals 100% of the remaining contract value
• Customer Revenue ContributionApproximately 30%／approximately 30%／approximately 15%For the largest, second-largest, and third-largest end customers, respectively
• 2025 Increase in Fixed AssetsRmb116mnOf which approximately Rmb100mn was related to the AIDC business
• Liquid-Cooling Deployment65% coverage for domestic AIDC; 100% target for overseas IDCLiquid-cooling capacity and components remained in short supply in 1H26
• Hong Kong Campus240MW; Rmb21.8bn of investment during the first three yearsLand cost is approximately one-tenth of the market average, and the first building is expected to be powered on by July 2027
• Hong Kong MarketAverage gross margin of 57%The report describes the market as a seller’s market, with capacity through 2027 already sold out
• Batam Delivery60MWScheduled for delivery in 4Q26
• Overseas Delivery Target1GWManagement targets completion over the next 3–5 years
• Historical and Target GrowthApproximately 30% CAGRRevenue, EBITDA, and net profit have each recorded a four-year CAGR of approximately 30% since listing; management targets approximately 30% over the next five years
• Operating Cash Flow Target2030E Rmb20bnCompared with Rmb6bn in 2026E
• 1H26 PerformanceRevenue growth of 50%+ year-on-year; adjusted net profit growth of 50%+Adjusted net profit excludes the impact of the deconsolidation of a public REIT in 2025
• Debt-to-Asset Ratio and Financing CostBelow 65%; three-year bank loans as low as 1.7%The founder owns more than 50%
• 2025–2030E Growth ForecastUtilized IT capacity CAGR of 27%; revenue CAGR of 33%Goldman Sachs research forecasts
• Revenue ForecastRmb5,673.7mn／Rmb8,541.3mn／Rmb11,879.6mn／Rmb15,480.5mnFor 2025, 2026E, 2027E, and 2028E, respectively
• EBITDA ForecastRmb3,550.5mn／Rmb5,924.4mn／Rmb8,561.0mn／Rmb11,241.1mnFor 2025, 2026E, 2027E, and 2028E, respectively
• EPS and P/E ForecastEPS Rmb1.13／1.68／2.03／2.35; P/E 45.8x／38.7x／32.0x／27.6xFor 2025, 2026E, 2027E, and 2028E, respectively
• Quarterly EPSRmb0.36／0.39／0.39／0.54For 3/26, 6/26E, 9/26E, and 12/26E, respectively
• Market Capitalization and Enterprise ValueRmb106.2bn／US$15.8bn; Rmb134.9bn／US$20.1bnMarket capitalization and enterprise value as listed in the report; three-month average daily trading value was Rmb2.8bn／US$408.0mn
• Target Valuation18x 2030E EV/EBITDADerived by weighting 25x for data center operations and 10x for GPUaaS, then discounted to year-end 2026 at a 10% cost of equity

Impact & implications

The report believes that the rising revenue contribution from domestic AIDC and gross margins above the industry average can improve growth quality, while 5.4GW of domestic resources provides capacity expansion potential for long-term computing-cluster demand. If the Hong Kong and Batam projects are delivered on schedule, they will extend the company’s growth sources into overseas Asia-Pacific markets. However, expansion requires sustained capital investment, and the pace of execution remains affected by GPU prices and supply, power availability, capacity utilization, order pricing, construction execution, and financing conditions.

Risks

• New orders secured in a competitive environment may fall short of expectations.
• Utilization ramp-up for new capacity may be slower than expected.
• Pricing pressure on data center or computing-power services may be greater than expected.
• Execution of overseas expansion projects in Hong Kong, Batam, and other locations may be weaker than expected.
• Regulatory changes, delays in domestic capacity ramp-up, or other factors may alter chip supply conditions.
• The company may face financing difficulties.

What to watch

• Monitor changes in GPU prices and chip supply in 2H26 and whether the company reaccelerates computing-power procurement.
• Track fixed assets, construction in progress, prepayments, capital expenditure, and depreciation to assess the pace of AIDC investment and delivery.
• Monitor whether the 60MW Batam project can be delivered as scheduled in 4Q26.
• Monitor whether the first building at the Hong Kong campus can be powered on by July 2027.
• Track the company’s target of 1GW in overseas deliveries over the next 3–5 years and the pace of investment after power is secured.
• Monitor new orders, capacity utilization, service pricing, and overseas financing conditions.