Q1 2021 Chindata Group Holdings Ltd Earnings Call
Good morning, angry at me, ladies and gentlemen, thank you as well come to change it All group Holdings limited first quarter 'twenty 'twenty, 1 earnings conference call.
Hosting all pressure there on.
Answer session after management's debt.
Mountains.
This event is being recorded.
Now I'll turn the call over to the first speaker today Ms Joy Zhang.
Our relations director of <unk>.
Please go ahead ma'am.
Hello, everyone will come to gene data choose other than 'twenty, 1 first quarter earnings conference call I'm jewelry and a weighted today are Mr. Alex Xu our CEO, Mr. Nick Wang our CFO and MS. Zoe draw on our finance and.
On behalf of our CEO, Nick will take you through the quarterly review of our operation performance and Zoe were presenting our financial results.
Alex and Joey will be here to answer your question afterwards.
Now I'll quickly go through the Safe Harbor statement some.
I'm on the same in store, we're making today regarding our business operations and financial performance debt may be considered forward looking especially statements involve a number of risks and uncertainties that could cause actual results to differ materially.
For more information please refer to the risk factors discussed in our most recent trends.
Yeah, well I would with the S E T and also in our form 6K for the quarter ended March 21, 2021, which has been filed with that you see as well.
During this call we will present, both GAAP and non-GAAP figures.
A reconciliation of non-GAAP to GAAP measures is included in our earnings press release, which is distributed and available to the public through our Investor Relations website, located at Investor Day, God Chin data group Dotcom.
We have also updated on a quarterly presentation on the company's Investor Relations website, which you can refer to our supplementary material, but today's call without further Ado I would now to turn over the call to Nick.
Thank you Joy.
Hello, everyone.
Now, let's first take a look at some highlights on the first quarter of 2021 on page 4 of the slide.
We delivered solid results once again in the period as we continue to increase capacity grew revenue control cost effectively and built our capacity capability.
In terms of on capacity the number of hours in service data Center reached 49 quarter again.
Compared with 13 by end of 2020.
We grew our total capacity in service to 337 per megawatt.
<unk> was 291 megawatts by end of 2020.
While under construction capacity, we have a total of 7 data centers under construction throughout China, India, and Malaysia with a total capacity of 154 megawatts.
There it was 198 megawatts by the end of 2020.
On power utilization and the efficiency, we continue to maintain our energy efficiency performance and our business on the.
Simply converting electric power into computing power.
Our total power consumption in the first quarter was 348 million kilowatts hour and.
And our year to date average.
By end of the first quarter was $1, 1.9 compared to 1 point to 2 into year 2020.
The number of other approved and pending patents on corn.
Again reached 230 day compared with 216 by end of 'twenty 'twenty.
We continue our effort on capacity build out and additional patents in the quarter Colbert initiatives operation and construction efficiency improvements.
Cooling technology construction module and datacenter equipment ex central.
With the effective cost management and practice, we maintained our average construction cost with all new service data centers and less on U S. Dollar 3 million per megawatt during the quarter, which is well below industry average.
On some key financials.
Our top and bottom line remained strong as revenue and adjusted net income reached historical high and increased by 63, 9% and 175, 8% year on year to RMB $643.4 million and 100.
$9.3 million respectively.
Now, let's take a closer look at our data center assets as you can see on slide 6 and slide share.
In China, we continued our steady deliberate and completed construction of Seaton zero 9 project in Northern China. This product along with the capacity expansion on <unk>.
<unk> added a total in service capacity on 46 megawatts in the first quarter.
On contracted capacity, we've added a total of 15 megawatts by expanding our collaboration with our existing clients, which on a seat and zero 6 and zero 8 in northern China.
All of which 11 megawatt was converted from existing indication on the interest capacity.
In particular high density cabin with per cabinet density of up to 25 kilowatts to 32 kilowatts, well be install for such newly contracted capacity.
The solid fundamental technology that we have long been investing in has made such installation possible and we will continue to be the trusted partner accommodating to the increase in computing demand of our times.
We added around 17 megawatts utilized the capacity in the quarter and increased our total utilized capacity from 221 megawatts in year end 2020 to 238 megawatts in the first quarter.
Such was contributed by the steady ramp up in projects, including C. N 01606.
Zero, 8 and an 11, 8 and see as Euro zone as.
As well as the newly in surveys see zero 9 in northern and Southern China respect respectively.
We managed to maintain our high client commitment.
As you can see on slide 7.
The contracted ratio all in service capacity was 90% in the first quarter.
Taking into consideration indication of interest capacity combined contracted ratio of bolt on service capacity would be 91 per cent.
While under construction capacity contracted ratio was 71, 3% in the first quarter.
Taking into consideration the indication of interest capacity. He combined contracted a ratio of all under construction capacity would be 81%.
On our overseas development.
Given the pandemic situation in India.
<unk> of our BV 101 project is being closely watched and we will take adequate measures for the execution of the project.
Next slide on.
On strategy and capacity building.
Following the establishment of the 3 business subgroups in the last quarter.
We continued our effort in capacity build up for the vision of better serving digital leaders and providing the industry with next generation computing infrastructure solutions with greater diversification and a better cost efficiency and to further strengthen on cost and technical advantages.
On our renewable energy initiatives, we are making steady progress in our existing 150 megawatts photo voting power generation project in pursuit of our long term 1300 megawatts renewable energy development plan.
As a recent development, we signed an additional 200 megawatts renewable energy development framework agreement with the local government in April.
And thus further expanding our planet long term they've got them on capacity to 1500 megawatts.
Going forward the <unk>.
Company will utilize proper internal and external resources to carry on a long term energy development and to safeguard our business efficiently converting electric power to computing power.
On the environmental and sustainability side the company published its second yes. We report on April 3rd which is available on our website.
Furthermore, our green effort is being constantly recognize either society.
As a recent development Green piece published its clean cloud 2020..1 report on April 20 <unk>.
And is ranked chimp data number 1 on clean energy scorecard, among all Internet cloud and data center companies serving.
With a total score of 85 out of 1 other.
The scorecard cover a range of topics on energy transparency energy efficiency and carbon reduction renewable energy performance and government and industry influence.
We have top the list with 2 consecutive years and score a perfect 40 out of 40 on renewable energy performance this year.
On capital markets M. S. C. I announced the result of its May 2021 quarterly Index review on May 12, 2021 and.
<unk> selected the company for inclusion in the EM Sci, China, Oh shares indexes.
The addition on the company while it take effect after market close on May 27th 2021.
Such stickney funds other reclamation, we are earning on the market.
I will now turn it over to Zoe our VP of finance to go over our key financial results on our first quarter of 2021.
Being mindful of time.
I encourage our listeners to also referred to our earnings press release, which is posted online and it improves our quarterly results along with other additional details.
Please note that all numbers are day, I RMB terms and that all comparisons are on.
The year over year basis on.
Less otherwise noted.
Now turning to slide 11 in Q1 total revenue grew by 16, 3% quarter over quarter.
In total $43.4 million from RMB 553 million in Q4 of last year on that.
Year over year increase.
Q3, 9%.
Total revenue growth.
Well, it's in line with average rents in capacity and utilize the capacity increased to 238 megawatt average.
The end of Q1 from 2 hanger and he wasn't megawatt.
End of Q4 last year.
This includes organic growth of around 15 megawatt from Cleveland instead.
And again, congrats I'll go around the 2 megawatt.
In total is a percentage.
Moving to Florida Cat on.
Other expense in the margin today.
Other prudent cost control effort enabled us.
The stable margin, while continuing to grow adjusted EBITDA and adjusted net income.
We recall that on.
17th well, yeah, Oh, what percentage.
Year over year increase of adjusted EBITDA.
It's running that have already.
While adjusted EBITDA margin.
47, 8%.
Looking through the detail.
Expense is eitan.
<unk> com.
Year over year increase.
9.6%.
And other costs recorded year over year increase of 34, 5% and adjusted SG&A 8 recorded year over year increase of 73, 7%.
But other.
Other adjusted net income slide 13.
Yeah, adjusted net income growth.
Okay.
Why haven't you like non country, meaning compared to RMB 39, 6 million in the same period last year and our M. B E.
Here on <unk>.
Bulk order on the turnkey turnkey.
Adjusted net income margin for the quarter reached 17 pushback on.
Also a historic high for the company.
We are holding a healthy position cash and cash equivalents generating healthy cash flow from operation were also just the percentage of diversifying our retainers primarily.
I mean other commitments or development.
On slide 14.
Capex was RMB 650, Paul claims fall meeting or the first quarter.
We have a cash position of <unk>.
<unk> $6915.7 million as of March 10.
On page 21.
<unk> to RMB $1242.1 million as something in PRA end of last year.
On slide 18, you can see that other credit ratios remain healthy.
Our adjusted EBITDA to interest ratio on.
Coverage ratio.
5.3 in the first quarter.
Meanwhile, other total cash generated from operations was on.
The 193 claims on me.
As to RMB 99.8, needing in the same period of last year.
The contribution to the change of cash progression in the quarter other than operating cash flow in the Quebec as mentioned previously with cash flow from financing activity.
Moving to our guidance on slide 16.
Looking into the rest of it in Q1, we continued to expense.
Our total revenue to be in the range of RMB, 2.7 billion to RMB 7.8 billion.
On the adjusted EBITDA to be in the range of RMB, 1.1 to 2.8 billion to RMB 1.3 repeating.
This forecast reflects our current and the preliminary views on the margin on it.
Operational condition.
Subject to change.
This concludes our prepared remarks once a day operator, we're now ready to take questions.
Thank you.
Time to ask a question you will need to press star 1.
Chinese speaking participants please kindly ask your question in Chinese first day and translate your question into English to withdraw your question. Please press the pound or hash key to standby, while we compile the Q&A roster.
Your first question comes from young Li Please ask your question.
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Jacques.
Sure I will do the translation briefly the first question is regarding the <unk>.
Relative dynamics, what would drive it to a share management comment on the dynamics.
Key domestic markets, especially a slip on the gel flow.
Second question is Oh, what would be the what would be the expected impact to date on the future expansion in Hubei Province.
We see that as a local government tightened the approval for new data center capacity on.
The third question is a housekeeping 1.
In page set off the presentation.
The project is under construction on both sides ready for service in the first quarter this year or what is the status for that project now. Thank you.
Hi, Thank you Louis on quarter, good questions I don't think I need to.
The Chinese are the part of the.
The answer I guess, a strictly talk about Paul.
The answer other questions.
Quick question about the other.
E intensified competition.
The company also noticed there were.
So some level of button physically on the competition and some regional market recently, especially in the zone 2 problems.
We think that it would have a negative impact to those ideas see operators, who cannot provide the true value to their customers.
Because of their limited in house capabilities limited the scope of services and the relative the rigid cost structure makes them, a very sensitive and vulnerable to competition.
Buffalo Chin data first of all we don't see that the other intended by the competition in the region. We operate so the impact on US is very limited, but most importantly, we believe the second hyperscale sector. We're in is quite immune to this kind of bumped mutation on for this call.
I want to take a little bit more time to explain.
Well as you know, you'll probably everybody knows that.
On shouldn't leader has a very very unique and highly differentiated hyper.
Hyperscale through stock model.
The primary development operating operation and our capital and cost efficiency is much higher than the other sector, which are based on the traditional wholesale and retail models. So we definitely have on 3 unique characteristics.
On the investment side.
Under a 10 day to model our per unit Capex spending based on cost is much lower than the capex spending under merger acquisition model based on treating Mark Mark about it.
Therefore, our total capex spending for the same level of capacity is much less.
Second point is actually the our capital to cash return cycle is shorter as we are capable of delivering project much faster than our capacity ramp up rate is quicker.
These actually enhance our capital turnover rate.
Reduces our leverage ratio and.
Significantly increasing our return on invested capital.
In addition, our prudent chartering policies cash pooling and interest on foreign exchange hedging policy helped reduce the fluctuation on our casual items.
These business model, an operating model and the capability model advantages on June data.
Without engine data is great financial performance, so far I want to repeat some of the number we just introduced in our official.
Official E are releasing.
So on the on the profit and loss site.
On a relatively less per unit capex spending leads to less depreciation and amortization costs.
On the low debt level and ever decreasing borrowing cost leads to low interest expenses, which can explain perfectly while our adjusted net income which include depreciation and amortization and interest has remained positive on a conservative consecutive quarters in the past.
We think this metric should not be overlooked anymore.
I suggest you take another look at our net income figures on page 13, our on our earnings release presentation.
And on the liquidity and capital structure side, we have ample and healthy cash balance our long term GAAP ratio remain at very low level and our incremental borrowing cost is trending down.
Again I suggest you take another look at our liquidity profile on page 15 in our earnings release presentation.
In summary.
As long as we stick with our unique development and operation model maintain.
Maintain our scope of service level, we're going to take to advantage on all capital and cost efficiency related matters, therefore stay relatively immune to price competition, especially in the locations, where we operate our hyperscale data centers.
So that's number that's your question number 1.
Your question number 3 about the other assets.
On our ex 11, I think we actually our principle is always follow the demand and a required requirement from a customer 1 our customer at some reap deployment the robust in Q1 about this on data center see Angola wouldn't be you know, we actually follow this request and therefore.
We make a little bit the redeployment reconfiguration of our overall servers on utilization among different data centers I won't elaborate on the details but result is actually.
<unk> actually.
We actually make this SCA 11 beat this data asset delivered in Q2 based on this on redeployment of overall, so our strategy from the customers. So that's how to EBITDA 1 of abuse.
Shortly.
Okay.
Regarding to your question too about the hour per in the policy macro policy regulatory policy on the public comments I'm going to refer to my colleague <unk> zone.
On elaboration on this.
Regarding the second question.
With unique operating model has great contribution on also the neighborhood all in Parliament and the net.
And in the company's project locations.
Fixed asset investments foreign currency investments.
Local taxation person airline with talent employment and also the regional industry regains. So he is on board the tightening of the relevant policy, we will have very limited impact on the company.
Thank you.
Your next question comes from James Wang from UBS. Please ask your question.
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Also the let's say cash somewhat easy Tobey. This is genius it'll it'll be done Muenchen yourself, what she said Oh, well Faiza hi, Good evening management is it James Huang from UBS.
So my first question is on.
Just the the other seize opportunities so Ali clouding. Its recent announcement indicated they've lost a large cloud customer in its international business. So I'm, just wondering whether that could be a 1 of your key anchor tenants and whether this might accelerate your international expansion.
The second question is on carbon and carbon neutrality.
So I'm, just wondering whether our customers both existing and potential customers are where the renewable energy has become in your kpis for them and whether these customers actually actively looking for ITC projects with renewable energy sourcing and also.
The Pea is also trying to catch up on renewable energy in ESG. So how do we keep ourselves head on this particular aspect and the third question is on.
Resource.
That ability so it looks like the government is tightening LNG quite a handout so how's our current land back.
Our current land bank looking particularly given if we look at the projects under construction in the first quarter that looks like it's down versus the fourth quarter of last year.
Thank you.
Hi, James Thank you for your question on your first and the second question I'll invite our CEO Alex to give you a answer and for the third question I will invite you to give your question Sir.
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Okay.
On I'll give you a ex translation for Alexandria.
For James first question as Alibaba, it's not our 1 of our current anchor customer. So it does not really affect us that much on that as to the specific name as a possible new are extending customers on currently we are not ready.
To disclose yet per.
For your second question on so on the ESG regard on our current customers are all making it very important issue and agenda in their own development and they have coupons posting that as the continuing through it quite well all of their suppliers.
And for us as well.
And so far our with our key anchor customer that we have already developed our business relationship all of them have already give very clear carbon neutrality goals and roadmap request for us.
Even for some of them on our existing or potential client, that's not really a very visible on hard request on the carbon neutrality.
They are.
Approaching us and expressed their appreciation of our company exploration at the Tam in the Green development.
We do think our what we do for the ESG and sustainable on the Valor <unk>.
Well definitely benefit us in the future on expanded collaboration with Oliver.
<unk> and potential customers are and are the new cooperation model.
Also for the second half back on within our industry. We have always maintained our leadership in this aspect with substance and heart records on.
And we have published on our second ESG report on April the third which is now available on our website.
And also our green effort is being constantly recognized by the society and as a race on development Green piece has published its clean cloud took on in 'twenty 1 report.
And van Zanten data.
Number 1 among all of the Internet cloud and data Center company second year in a row.
We have topped the list and with a perfect 40 out of 40 score on renewable energy performance this year.
Hum.
With regard to here as debt.
The company believes that there is no longer a distinction between the third on the periphery areas.
Other business operation level on it.
Key infrastructure for our target customers.
If a company has already made a very early judgment on those trend a few years ago.
And the free per study reserve.
Such as the London energy so from the current point of view, we have aimed to some first mover advantages already such kind of advantage will allow us to maintain a dominant position on the supply side. Thank.
Thank you.
Yeah.
On the shelf.
Thank you.
Real quick.
Back to your question a little bit 1 more point I think.
On the India. The E R releasing presentation every quarter.
As always on 2 categories..1 is other assets in new service. The other 1 assets under construction, so the decreasing or under construction asset.
The large part of the reason is actually we moved some of that probably become an in service in the operation So that probably going to move up to the other assets in service category. That's the major reason and also we have.
Recently, we have made on the we believe in.
In the near and midterm, we are going to achieve a summer Ah I think we're going to make some positive development with existing and potentially new customer on Thunder pump on project based on our strong supply we have on certain advantages that geographic location as already mentioned.
And to you just now so are we going to wind up appropriate time to disclose this development.
Through the debt.
Assets under construction.
Other grades.
On the future.
Great. Thank you very much Nick.
Your next question comes from Arthur Lai from Citi. Please ask your question.
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Hi, Jason.
Alright, Thats all essentially the agenda.
On the channel fill or simple keiichi anyway, because that's it.
Pretty close to that.
Our opinion until the day shutdown.
I'll finish on it wouldn't be on.
My first question is regarding the growth pipeline founder.
<unk> on your site and a second 1 is how can we expect.
The FERC tariff Cofound foundries.
New site.
Sales of average on Macau a perspective.
He found on housekeeping question.
And make our cost increased over the quarter.
Thank you.
Sure Okay.
Awesome. Thank you for your questions I think.
Again, you know for the logistic management I don't think we need to repeat a question on English. So you only need to ask the questions and answers.
At the same time, we tried to only also cash so back to answers. Your first question about the other Shensi, Yes, Chelsea is definitely 1 of our geographical forecast moving forward, there's a certain advantages.
On the on the resources side on the on the energy side, especially on the renewable energy side moving into future and and the like.
Like the company is on turning on plan I think.
The mix of the asset we're going to put Hyperscale data center asset were put in Shanxi cannot become a little bit higher at moving into the future. So what are the advantages just mentioned we have a second question about our average utility cost increase in Q1, that's actually yes, you already answered my question is actually due to the seasonality issues, especially in the winter.
But the moving forward in the mid to long run, we believe that with a more low cost, especially low low low colton.
Utility cost regions, and our Hyperscale data as the Ngos reason come into service our weighted average included the costs come down.
And also on moving forward with our renewable energy play come into play renewable energy strategy coming into play into the execution move was the addition of the I would say a much favorable renewable energy.
Cost in the regions, we believe in the long term our average utility costs come on come down no matter what it is.
Okay. Thank you and congrats a strong data on that.
Got you.
Hello.
As a reminder, if you think of remarks Sheldon in Chinese. Please translate your question into English after debt. So next question comes from Tina Hu from Goldman Sachs. Please ask your question.
Hi.
Management, So I can just.
Speaking English that's fine.
Yes, no problem at all in English.
Okay. Okay I'll first of all congratulations on the very strong results.
The revenue growth.
Growth is tracking ahead of your full year guidance.
So my I have a few questions. The first 1 is regarding pricing. So from the previous few quarters result, I have sort of calculated the effective pricing per megawatt and it seems like it has come down from previously around 1 million RMB per month per megawatt to now close to.
<unk> 920000, so just wondering what has driven the.
The pricing pressure recently.
Then the second question is regarding <unk>.
Major customer demand as we know that are.
From the prospectus, we know that you are a major tenant is a social content provider and recently there seems to be some user usage slowdown.
Customers. So wondering how do you think that's going to affect.
That customer demand with us.
And then the third question as regarding your longer term EBITDA margin, we have seen obviously for this quarter. It has performed very well.
So going forward, what do you think will be a relatively stabilized margin level.
And the last question is regarding your Capex.
I understand that.
During the last quarter's earnings call management provided this year's Capex guidance about 4 to 5 billion RMB.
On.
So if we take this into account together with last year's Capex around 2 billion.
The total capex per megawatt.
Mission when we calculate that is around.
Around 5 million.
S dollar per megawatt hour.
Remember in the prospectus, we had around 3.6.
U S dollar per megawatt so I was just wondering.
If I have missed something in the Capex numbers there. Thank you.
Okay.
Thank you Tina.
Just a sort of a.
Mathematical clarifications, I think on our quarter over quarter.
S are on average price.
Especially the Q1 versus Q1.2021 versus Q4.2020 actually doesn't decrease essentially so what you saw is probably our Q4.2 other 'twenty versus Q3 numbers. So I just want a little bit clarification of America, but however, however.
On explaining the driver on this.
Driver for the MSR. So our you know our data center projects or assets.
Located in different regions and there are contract price will be different by region.
Because on it because the development and operating cost variance from 1 region to the other.
So the theory is that lowered the cost of certain region.
Lower price offering 10.
<unk> data will make to our customers.
So but in each region, our contract price have been remaining very stable and not affected.
By the market competition at all Okay. So that's a that's a that's a further explanation and looking forward.
Obviously, the geographical mix of where our data centers are located on the major driver of our weighted average MSR again, the lower the cost for that region, the lower price offering chimp data on well choose to offer to its customers. So in the moving into the future we expect to have.
Slightly more data center assets get deployed into those low cost region as a as I answered. The question, Paul Auster rely that they're probably going to build more data answer assets in the Shanxi, where they are we sort of energy and renewable energy resources are bounded and the cost is relatively low so.
And and that's actually going on kind of give us a competitive advantage on the cost side and therefore translate into into the market.
On the pricing side to our board.
Our customers and comparative on Petersen. So that's how can it be it might also on to our first question. Your second question about the.
About the other customer demand.
Actually.
4 while our customer force first of all we don't get any feeling that business slowing down for our customers, especially our most important anchor customers.
On the contrary.
We are seeing the demand for new data Center project, whether new business from.
From our anchor customers in various regions remains actually quite strong and that's why I went on answer a question on say answer the question for James I'd be other why there is.
Some lower numbers this quarter compared to last quarter on the couch.
Assets under construction, you're going to see more numbers added into this category as we move on for the reason I just mentioned and also because of the advantage. We have on the supply side. We believe once this demand become materialized, we can swiftly respond.
These strong demand based on our competitive advantage in terms of available resources.
<unk> development and operational capability.
And most importantly relations relationships and the good execution of our credentials, we adapt established through our partnership part of assisting existing product both in service and under construction with our existing customers.
So that's my answer to your second question.
And I'm Gonna referred to a third a third and fourth question related to the long term EBITDA margin on cap has to my colleague zone, yes.
Okay.
I just had a question on the company.
The higher <unk> in the meantime, all other EBITDA.
EBITDA margin target and.
For the last question.
Regarding on the Capex debt.
Capex is especially for the construction expenditures mainly incurred <unk>.
<unk> share of shell civil construction, electrical mechanical equipment and engineering and also the Upsilon re infrastructures such as the substation on this <unk>.
And this is from the scope and secondly, if other projects include the construction or their Capex and also saw the in service data centers you're on.
Are they asking you are ready for semi still didn't have.
More balance.
And since we have that research area supply chain and vendor management and then so if we have is to add up together. It's other estimation and also need confirmation that it will have some additional pipeline and we will update you information on the on each quarterly earnings release.
Thank you very much Nick and Philly.
Thank you.
Your next question comes from Chris Combe from DBS. Please ask your question.
Hi management team.
Congratulations on the strong results to his Chris call from Pvs and thanks for taking my questions.
I have.
2 questions for us.
Could management share your view on that.
And pass off the antitrust investigations on kings.
Internet platforms on the sales.
And 13 net.
And my second question is.
Could management share more color on that.
Strategy on the craft soft from new customer on site.
Right.
What sets us free of focusing on end.
On the.
Potential in allocated.
Thank you.
Okay.
I think yes, thank you Chris.
As for our questions I think.
We don't as you know mark with the practitioner.
All participants.
In this industry and we're not.
In the position to comment on the direct impact of it.
Governments on tea.
Monopoly on antitrust zone.
Attitude toward our downstream customers.
But as far as I know I think I'll just answer the question what I asked a question on New York.
I think.
For our customer I do think their business got affected.
Well on a day to day interaction with our customer we still think that the potential for future collaboration on certain IDC hyperscale items wood products due to ongoing and are we going to have.
Quite positive on development will be into the future in different regions. So.
We don't know what kind of thoughts on.
On a positive or negative impact on our costs on our anchor customers.
But for those customers that are yet to become our on our customer list there might be some impact with them, but we will closely watch the development of the situation and see how it's going to kind of impact on our process of applying vis a vis a vis your player to have all of it.
Actual customers.
Okay. So that's pretty much on our comments on antitrust issue and also in terms of the.
The new customer development well, we are the company is very affirmative.
To put the new customer acquisition.
Our short strategy into the future.
And like we did in Q4 last year, we have acquired new customers and add their name with a significant debt capacity into our business line and on the we also making are making some on positive progress with other potential customer not only in China on also in the overseas market not only limits with.
Domestic Chinese customer on also on those international players digital leadership companies in the overseas market as well. So once we make some non material progress on this we will find the right time to disclose to the market.
Okay, great. Thank you.
Thank you.
Your next question comes from home.
From TICC.
So a question.
Yeah.
Hi, Thanks management for taking my questions.
Question on more later.
All industry right.
Great.
On the call with NASA.
Our results.
<unk> showing a.
30% growth and some other.
So down so.
Demand trends are is there any demand and supply chains and so on I looked on Saxon.
And the opportunity is set to take us to undertake part of debt.
The demand from like a range generally from the public cloud and now some customers shifted demand to a threat weighted I think the players. So how can we catch up with no trend. Thank you.
I think our call. Thank you.
Total questions I think.
Again, I think like we explained the.
Just now I think.
There might be some slowdown on overall public cloud business, but we haven't.
The bigger chunk.
And the top of our minds, but we know who our customer loyalty customers, who actually are also significant internet.
Players.
On the who may potential also do something in the public called Erin we don't see the business slowing down at all.
We don't know, whether it's a real slowdown or real accelerated we don't know, but at least in our interaction with our anchor customer or existing customer we fall.
We're seeing that the potential collaboration hub to side.
Ah well be increased I think in the near and midterm essentially so having said that I think that's probably address your second part of your question yes.
Yes, there is a new players other than the existing.
The public cloud players in the marketplace, who are facing the entered antitrust anti monopoly regulation from the government I think they are going to be a more opportunities on a fortune data net risk because those company affected by this anti monopoly those companies affected by the slowdown on the public cloud business.
And not all customers.
And our and our customers' a major anchor customer we have a more chances to enter into those areas and so we won't take us on pause the right along the quarters as well.
Thank you.
Your next question comes from Timothy Chong from Jefferies. Please ask your question.
Hello, Thank you part.
On what's Nancy to ask questions.
<unk> from Jefferies.
A couple of Huston, the first 1 being <unk>.
Like during the last analyst meeting the company's announced about <unk> 13.
Whether that will be on new customers.
Some of that.
This dose disclose any progress of discussion with the customer on.
What can we for example, walking on we expect about the pricing compared with the company's current MSR.
MSR.
On question is about the Capex.
Capex plans.
On the 3 new business units.
Are we I would like to understand if they are at my friend would like to talk about the 3 business units that were in.
Now's in last meeting.
The last question is it's also about overseas expansion opportunities.
I believe last month on Microsoft, especially on about 1 billion investment in Malaysia on IDC Oh, that's on us that if the company would have any plans to further expense emulate that.
Yes, and you know in a long time all of the BD, Joe geographical revenue slightly like thank you.
Hey tendency you. Thank you for your questions starting from your question number 3 yes actually.
We already have become.
We are closely collaboration partner for Microsoft in Malaysia, and also or we are already a closer collaborator was on.
Microsoft in China as well so.
Relationship is pretty cold at the moment based on our successful execution of the cost of product and also our capability.
The team continued our team has been stopped as demonstrated.
Through this collaboration.
So our strategy 1 of our top strategy is always.
To expand our business.
Corporation, with our existing customers and to make them and other work make them happier and happier.
Hopefully that the this cooperation can get can bring some more significant.
Wider scope on both in China and in Asia.
Emerging market will find on proper time to disclose the pause on that the government on the Parker well.
On the public later on.
So that's the question number 3.
Number 1 regarding the <unk> and <unk>, that's the new customers, we acquired in Q4, and I think that if you check the schedule there from the debt.
Time in Q4, we signed the the commitment.
With our customer to the time, we plan to deliver the product with governments do hub.
On quite a long extended periods ago, essentially at a moment I think I can only say that everything is on schedule and we cannot fulfill.
Promise to deliver product on time with the right quality and hopefully we can even exceeding our customers on.
Expectation.
And then your second question about our Capex plan on the new business, we're still writing up the other concrete ex <unk> ex <unk> ex executable business plan all the execution plan on this on.
3 major subgroups.
But we saw.
Most likely scenario.
Those 3 subsequent well serve our strategic.
Objective.
For example, the Jim pounds.
Remember our mission of zone.
Jim Howard on the subgroup other is try to make sure that by 2030.
All the major Hyperscale data center in China.
Fortune data in China will be consumed 100 per cent of renewable energy okay. So.
If you don't make more renewable energy generation investment.
And completely rely on the market purchasing on market.
Transactions.
This object, it's very hard to achieve having said that we may come we may we may have on investment plan.
<unk> introduced a renewable energy in the geographic locations, where we're going to be the future of Hyperscale data center consumer renewable energy, but we are we.
We will be smart and we will partner with external investors through co invest into just a short off on a project and to make sure that the investment on Capex spending from Trulia stand alone.
And data center side and.
<unk>.
Can be made on a share basis can be minimized and output in terms of <unk>.
Utilization of the approval by NRG and the potential improvement.
EBITDA margin on pipe by the relatively lower renewable energy costs and also by potentially.
Realizing the external revenue.
By turning our role on grain.
Energy buyer.
Our view shelter and bring the huge commercial and financial benefits to the company.
Yeah.
Thank you very clear thanks.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect your lines.
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