Company: GDHLF
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001410578-25-000935
Chunk: 74

Company: GDS Holdings Ltd
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 74
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 result in lower-than-expected dividends from the ABS over the life of the securities. Finally, our ability to realize value from the ABS investment, whether through a sale of the ABS or upon the liquidation of the underlying assets, depends on the operational and financial performance of those assets. A decline in asset value or market demand at the time of liquidation may lead to diminished returns. Any of these factors could negatively affect our profitability, financial condition, and ability to generate stable long-term returns.

We are also subject to regulatory and compliance risks arising from the evolving legal framework governing ABS and public REITs in China. The legal and regulatory environment for ABS in China is relatively new and continues to develop. In 2014, the CSRC issued the Administrative Provisions on Asset Securitization of Securities Companies and Subsidiaries of Fund Management Companiesand related guidelines, which set out requirements for participants in securitization transactions traded on exchange market regulated by the CSRC. As the original right holder in our ABS transaction, we are required under these regulations to provide timely, accurate and complete information to the ABS manager. While we have not been subject to penalties to date, uncertainties remain regarding the interpretation and future application of these regulatory requirements, and there is no assurance that we will not be subject to regulatory scrutiny or penalties in the future as the ABS framework continues to evolve. Additionally, the REITs market in China is subject to complex supervision and regulatory changes, and any future involvement in public REITs could expose us to additional compliance obligations and regulatory risks. Any developments or compliance failures related to ABS and REITs could materially and adversely affect our financial results and business operations.

As data security and data privacy laws and regulations involve uncertainties, any non-compliance with such laws and regulations may subject us to fines and/or other sanctions which may have a material adverse effect on us.

The cross-border transfer of data raises data security concerns for the governments in which we operate and the companies who are our customers and suppliers. Our ability to develop profitable data centers is dependent on acceptance and implementation of a data management framework and cross border flows transferring data across borders. We are cooperating with government authorities to clarify our concerns regarding data protection, but there can be no assurance that a data management framework will be fully accepted by market participants such that cross-border transfer of data will no longer raise data privacy concern, which will affect our ability to develop data centers and attract customers to them. Furthermore, as existing laws and regulations regarding data security involve uncertainties, we cannot assure