Q3 2021 Chindata Group Holdings Ltd Earnings Call
Good morning, and good evening, ladies and gentlemen, Thank you and welcome to Chi Data Group Holdings Limited third quarter 2021 earnings Conference call.
Speaker 1: Good morning and good evening, ladies and gentlemen. Thank you and welcome to Chain Data Group Holdings Limited's Russel
Speaker 1: We will be hosting our question and answer session after management's prepared remarks.
We will be hosting a question and answer session. After management's prepared remarks.
Speaker 1: note today's event is being recorded. And I'd like to turn the call over to our first speaker today, Mr. Don Cho from Investor Relations of Chin Data Group. Please go ahead, Don.
Please note today's event is being recorded.
I'd now like to turn the call over to your first speaker today, Mr. Don Zhou from Investor Relations up June data group. Please go ahead dawn.
Speaker 2: Thank you, operator. Hello, everyone. Welcome to Chin Data's 2021 Third Quarter Earnings Conference Call. This is Don from Investor Relations team of the company.
Thank you operator.
Hello, everyone welcome to <unk> 2021 third quarter earnings Conference call. This is Don from Investor Relations team of the company.
Speaker 2: With us today are Mr. Alex Choo, our founder and CEO , Mr. Nick Wong, our CFO , and Ms. Zoe Zhuang, our finance vice president.
With us today are Mr. Alex Xu, our founder and CEO, Mr. Nick Wang our CFO and then drop off in <unk>.
As vice President.
Speaker 2: Alex will be delivering an opening remark at the beginning. Nick will take you through the quarterly review of our operation performance, and Zoe will present her financial results.
Alex we'll be delivering an opening remark at the beginning Nick will take you through the quarterly review of our operational performance.
<unk> will present, our financial results.
Speaker 2: Alex, Nick, and Zoe will be here to answer your questions afterwards.
Alex Nick and Zoe will be here to answer your questions afterwards.
Speaker 2: Now I will quickly go over and say a couple of things. Some of the statements that we make today regarding our business operations and financial performance may be considered overlooked.
Now I will quickly go over the safe Harbor.
I don't know if the statements that we make today regarding our business operations and financial performance may be considered forward looking and.
Speaker 2: and such statements involve a number of risks and uncertainties that could cause actual results to differ materially.
Such statements involve a number of risks and uncertainties that could cause actual results to differ materially.
Speaker 2: For more information, please refer to the risk factors discussed in our filings with the SEC.
For more information please refer to the risk factors described.
In our filings with the SEC.
During this call we will present, both GAAP and non-GAAP financial measures.
Speaker 2: During this call, we will present both GAAP and non-GAAP financial measures.
Speaker 2: 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 invest.chindatagroup.com.
Conciliation of non-GAAP to GAAP measures is included in our earnings release.
Which is distributed and available to the public through our Investor Relations website located at Investor <unk> Com.
Speaker 2: We have also updated our quarterly presentation on the company's investor relations website, which you can refer to as a supplementary material for today's call.
We have also updated our quarterly presentation on the company's Investor Relations website.
But you can be referred to as a supplementary materials for today's call.
Speaker 2: Without further ado, I will now turn over the call to Alex Chu, our founder and CEO .
Without further Ado I will now turn the call up with adequate Judy.
As CEO.
Speaker 3: Thank you for your attention.
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Speaker 3: I am happy to see after the IPO company has been through all four years of proposals and has shown good performance in development.
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Speaker 3: Thanks to the production of li-ion creation and the rapidly research of core technology weSa preceded by the prerequisite to the big advance of the computer.
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Speaker 3: We have made great strides in the development and production of pre-deck data centers and the integration of industrial chain exports.
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Speaker 3: This makes the large-scale infrastructure, low-cost solutions, and cross-border delivery a reality.
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Speaker 3: We strongly support the large-scale sales of key customers' sustainable development and green energy.
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Speaker 3: having substituted for 5.7 years and made it a another solid victory. I would like to point out my relationship with the Chinese government and I am here to express my gratefulness to the significant efforts that have been made for Mixed Pacific Bridge
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Speaker 3: the upcoming start-up business to drive industrial development, and to develop and drive technological growth in the industry.
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Speaker 3: I believe that as long as we continue to stick to the original intention of Bincheng Startup in History
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Speaker 3: focus on the long-term stability of the difficult but correct development path.
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Speaker 3: The Xinhuai data will continue to make greater breakthroughs in the large-scale green land development track.
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Speaker 3: to help key customers achieve rapid growth and carbon-neutral industrial development in the Asia-Pacific emerging market. It's a great vision. Thank you.
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Speaker 4: This is Nick. Thank you, Alex, for opening remarks. I will first translate Alex's remarks into English.
This is Nick thank.
Thank you Alex while opening remark I will first translate Alex remarks into English.
Speaker 4: Four quarters have passed since the IPO of the company.
Full quarters have passed since the IPO of the company.
Speaker 4: With our relentless efforts, we are pleased to see the solid results in capacity built up for the company through Chin Idea, Chin Industry, and Chin Power.
With our relentless efforts, we are pleased to see the solid results and capacity build up for the company through Chennai, India chip industry and the chip power.
Speaker 4: With keen ideas in-house R&D on critical technologies, we have achieved significant progress in the pursuit of white box model solution for computing infrastructure.
With 10 ideas in house R&D critics.
Critical technologies, we have achieved significant progress in the pursuit of White box model solution for computing infrastructure.
With Qin industries breakthrough in self develop precast container datacenter modules and a further integrated supply chain cost efficient cross border delivery of total solution for Hyperscale data center infrastructure was made possible.
Speaker 4: With Chin Industries' breakthrough in self-developed precast container data center modules and a further integrated supply chain, cost-efficient cross-border delivery of total solutions for hyperscale data center infrastructure was made possible.
Speaker 4: With the rapid realization of a new industrial scenario by Chin Power, we have been effectively supporting the sustainable development of our anchor clients and consumption of green energy in scale.
With the rapid realization of the new industrial scenario by chip power, we have been effectively supporting the sustainable development of our anchor clients and consumption of Green energy in scale.
Speaker 4: With these core capabilities as cornerstones, Chin Data has overcome the obstacles on technologies, cross-border human resources, and logistic arrangements brought by the pandemic situation.
With these core capabilities as cornerstones chimp data has overcome the obstacles technologies cross border human resources and logistic arrangement.
<unk> by the pandemic situation.
Speaker 4: Our performance was outstanding as we keep on promoting industry upgrade with our industrial pilot project.
Our performance was outstanding.
As we keep on promoting industry upgrade with our industrial pilot projects.
Speaker 4: propelling business growth with research and development efforts and enhancing our comprehensive financial performance with our full stack hyperscale model.
Propelling business grows with research and development efforts and enhancing our comprehensive financial performance with our full stack Hyperscale model.
Speaker 4: It is in Qingdata's firm belief that as long as we keep our original base, adhere to our capacity build-up strategy, stay focused on tackling difficulties, and remain committed to the long-term value developments, we will achieve further with the hyperscale greenfield model, and to effectively support our key clients along their rapid expansion and zero-carbon transformation in the Asia-Pacific emerging market.
It is in June data as a firm belief that as long as we keep our original phase adhere to our capacity build up strategy stay focused on tackling difficulties and remain committed to the long term value developments. We will achieve further was the hyperscale Greenfield model.
And to effectively support our key clients along their rapid expansion and zero carbon trust transformation in Asia Pacific emerging market.
No.
Speaker 4: On behavioral company, let's take a look at the key highlights for the third quarter of 2021 on page four of the slide.
Behavioral company, let's take a look at the key highlights for the third quarter of 2021.
On page four of the slide.
Speaker 4: Our business is maintaining its healthy momentum.
Our business is maintaining its healthy momentum.
Speaker 4: Total IT capacity in service by end of the quarter was 370 megawatts.
Total capacity in service by end of the quarter was 370 megawatts a.
Speaker 4: a nine megawatt increase compared to the previous quarter.
A 90 megawatts increased compared to the previous quarter.
Speaker 4: as we were swiftly responding to our clients' customized and new demand, such as high-density development, deployment.
As we worked swiftly responding to our clients' customized and new demand.
Such as high density development deployment.
Total capacity by quarter end was 588 megawatts.
Speaker 4: Total IT capacity by quarter end was 588 megawatts.
Speaker 4: Steady ramp up continued with utilized capacity increased by 17 megawatts over a quarter to 268 megawatts.
Steady ramp up continues.
<unk> utilized capacity increased by 17 megawatts over the quarter to 268 megawatts.
Speaker 4: Utilization ratio remains stable at 72%.
Utilization ratio remained stable at 72%.
Financial growth momentum continued with very healthy profitability.
Speaker 4: Financial growth momentum continued with very healthy profitability.
Speaker 4: quarterly revenue increased by 59% year over year to RMB 740.8 million.
Quarterly revenue increased by 15, 9% year over year to RMB $748 million.
Speaker 4: Gap based on net income was RMB 78.4 million and stayed positive for three straight quarters with a 10.6% net margin.
GAAP based on net income was RMB $78 4 million.
And stayed positive for three straight quarters with a 10, 6% net margin.
Which we believe is among the best performance in the industry.
Speaker 4: which we believe is among the best performers in the industry.
Speaker 4: Adjusted EBITDA was RMB 368.4 million indicating a year-over-year increase of 61.6 percent with the margin remaining in the high 40s at 49.7 percent.
Adjusted EBITDA was RMB $368 4 million, indicating a year over year increase of 61, 6% was the margin remaining in the high forties at 49, 7%.
Speaker 4: Meanwhile, such solid fundamentals and prospect for business were again recognized by the rating agency.
Meanwhile, such solid fundamentals and prospects for business were again recognized by the rating agencies.
Speaker 4: such as Fitch, reaffirmed its triple B-minus investment rating for the company in late October , despite the evolving headlines in the macro environment.
Such as Fitch.
Reaffirm its triple B minus investment grade rating for the company in late October.
Spike that you Bobby headlines in the macro environment.
Our capacity build up and the sustainable development, our total number of approved and pending patents increased by 12% over the quarter to 268 <unk>.
Speaker 4: Our capacity built up and the sustainable development, our total number of approved and pending patents increased by 12 percent over the quarter to 268.
Speaker 4: energy efficiency of our data centers remain outstanding with our year-to-date average PUE by end of third quarter at 1.21 compared to 1.22 in full year 2020.
Energy efficiency of our data centers remain outstanding.
With our year to date average peewee by end of the third quarter at one point to one <unk>.
Compared to a one to two in full year 2020.
Speaker 4: Our year-to-date total power consumption was 1,215 million kilowatts-hours.
Our year to date total power consumption was 1200 15 million kilowatts hours.
Speaker 4: On slide five, with great pleasure, we would like to share with the market the exciting progress we are making in client diversification and overseas business development. On client diversification, our constant effort is yielding solid results.
On slide five with great pleasure, we would like to share with the market the exciting progress, we're making in client diversification and overseas business development.
On client diversification, our constant effort is yielding solid results.
Speaker 4: In China, breakthrough was achieved as the company recently won the bidding and received a confirmed demand of 27 megawatts capacity from a leading Chinese cloud computing service provider.
In China breakthrough was achieved as the company recently won the bidding and have received a confirm demand up 27 megawatts capacity from a leading Chinese cloud computing service provider.
On overseas to development, our Hyperscale Greenfield development model in the Asia Pacific emerging market is advancing.
Speaker 4: on overseas development. Our hyperscale greenfield development model in the Asia-Pacific emerging market is advancing.
Speaker 4: In Malaysia, the company has signed contracts with land owners and launched a new greenfield project seeded in Johor State.
In Malaysia. The company has signed contract with land owner and have launched a new Greenfield project ceded and Joe Hoss State.
Speaker 4: The new project, expected to be a built-to-suit hyperscale data center and implemented with the newly innovated high-efficiency cooling technology, has received a MOU capacity of over 80 megawatts and is to be delivered to our anchor client in several phases starting from 2022.
The new project expected to be a build to suit Hyperscale data center and implemented was the newly innovated high efficiency cooling technology has received Mou capacity of over 80 Mega.
Megawatt and it has to be delivered to our anchor client in several phases starting from 2022.
Importantly, our consistent build up in research and development of our core technology.
Speaker 4: Importantly, our consistent buildup in research and development of core technology will effectively support the export of our integrated prefabricated data center modules for this project.
<unk> support the export of our integrated prefabricated datacenter modules for this product.
Speaker 4: We have also initiated our expansion plan in Thailand.
We have also initiated our expansion plant in Thailand market curve.
Speaker 4: Currently, the company is close to finalizing a business acquisition in Bangkok.
Currently the company is close to finalizing a business acquisition in Bangkok.
Speaker 4: The project, upon completion of technical upgrade, will be hosting a five megawatt IT capacity and capable of supporting key kinds of business development in Southeast Asia.
Project upon completion of technical upgrade will be hosting a five megawatts capacity and capable of supporting key clients business development in South East Asia.
Speaker 4: For our existing business, on page six, we are maintaining the healthy momentum.
For our existing business on page six we are maintaining the healthy momentum.
Speaker 4: We added around nine megawatts in service capacity in a quarter.
We added around nine megawatts in service capacity in the quarter.
Speaker 4: as we were swiftly responding to the updated and new demand of clients in several data centers, such as for their high-
As we work swiftly responding to the updated and new demand of clients and several data centers.
Such as for their high density deployment.
Speaker 4: Utilized capacity increased by 17 percent in a quarter.
Utilized capacity increased by 17% in <unk>.
Water.
Speaker 4: contributed by the steady ramp-up in products CN06, CN08, CN09, CN11-A, and CN11-B in northern China. Meanwhile, we added 16 megawatts of contracted capacity as a result of the indication capacity conversion of the existing project such as CN12 and CN13.
Contributed by the steady ramp up in product C. In 060809.
11, slash, a and C and 11th stash be in northern China.
Meanwhile, we added 16 megawatts of contracted capacity as a result of the indication of my interest capacity conversion of the existing projects such as <unk> and 12 in feet in 13.
Speaker 4: There's an overview of our asset on page 7 and 8.
As an overview of our assets on page seven and eight.
Speaker 4: By end of quarter, we are having a total of 588 megawatts of IT capacity.
By end of quarter, we are having a total of 588 megawatts of capacity.
Speaker 4: among which 15 data centers or 370 megawatts is in service and 9 data centers or 218 megawatts is under construction.
Among which 15 data centers or 370 megawatts in service in nine data centers or 218 megawatt is under construction.
Speaker 4: According to the timeline as shown in the table, all the 218 megawatts under construction capacity shall be put in service in 2022.
According to the timeline as shown in the table all the 218 megawatts under construction capacity she'll be put in service in 2022.
On client commitment remains high.
Total indication of my interest and contracted capacity at up to 493 megawatts, indicating a contracted and indication of interest ratio of 84%.
Speaker 4: For the in-service capacity, contracted ratio is 88%.
For the in service capacity contracted ratio is 88%.
Our utilization is healthy.
Speaker 4: By the end of the third quarter, total utilized capacity is 268 megawatts, indicating a utilization ratio of 72%.
By the end of the third quarter total utilized capacity is 268 megawatts, indicating a utilization ratio of 72%.
Now, let's dive into our capability building, which was briefly touched upon in our opening remark.
Speaker 4: Now let's dive into our capability building, which was briefly touched upon in our opening remarks.
Speaker 4: Our capability built up through the establishment of ChinPower, ChinIdea, and ChinIndustry has made solid progress so far.
Our capability to build up through the establishment of chip power Chin idea and Kingdom Ministry has made solid progress so far.
Jim power aiming to be the leader driving China's IDC industry into zero carbon era.
Speaker 4: Shin Power, aiming to be the leader driving China's IDC industry into zero carbon era.
Speaker 4: has been effectively supporting the sustainable development of our anchored clients and consumption of green energy in scale under the rapid realization of the new industrial scenario.
Has it been effectively supporting the sustainable development of our anchor clients and consumption of Green energy in scale and in a rapid realization of the new industrial scenario.
To date, we have established a green power consumption ecosystem, consisting of four major initiatives, including direct green power trading innovative regional green power consumption in Canada.
Speaker 4: To date, we have established a green power consumption ecosystem consisting of four major initiatives, including direct green power trading, innovative regional green power consumption mechanism,
Speaker 4: development of renewable energy power stations, and development of integrated power generation grid load storage products.
Development of renewable energy power stations and developments of integrated power generation rate low storage products.
Speaker 4: In September , China launched its first nationwide green power transaction with a total of 259 participating domestic Chinese entities and a total transaction volume of 7.935 billion kilowatt hours.
In September China launched its first nationwide Green power transaction with a total of 259 participating domestic Chinese entities and a total transaction volume of 793 5 billion kilowatts hour.
Among the first movers nationwide and as the largest buyer of green power individually digital infrastructure industry.
We completed the transaction up 100 million kilowatt hours.
Contributing to one 2% to 6% of the entire nations in all grille gross transaction value.
For original Green power consumption because of them.
Speaker 4: Through regional green power consumption mechanism, we have consumed in total 440 million kilowatt hour of green power in the past four years.
We have consumed in total 440 million kilowatt hour of wind power in the past four years.
Speaker 4: For the development of renewable energy power station, we have signed today 1.05 gigawatts of wind and solar energy development agreement, which is expected to providing 1.2 billion kilowatts green power annually upon completion. Chinnaidea.
For the development of renewable energy power station, we have signed to date 1.05, Gigawatts of wind and solar energy developments agreement, which is expected to providing $1 2 billion kilowatts green power annually upon completion.
Chin idea together with CIT industry by.
Speaker 4: by leveraging on our patent and technology reserve has made significant breakthrough in white box model solution for computing infrastructure.
By leveraging our patent and technology Reserve has made significant breakthrough in white box model solution for computing infrastructure self develop prefabricated datacenter modules and export of integrated supply chain so far.
Speaker 4: self-developed prefabricated data center modules, and export of integrated supply chain so far.
Speaker 4: We believe that such prefabrication of productized equipment, productized engineering, and productized buildings or data center is improving the coordination and efficiency of our development and construction, which will therefore create a more stable supply chain system that will effectively safeguard our hyperscale greenfield project development and delivery in Asia-Pacific emerging market. Even with concurrent delivery.
We believe that such pre fabrication.
<unk> the equipment harmonized engineering and personalized.
Buildings or data center is improving.
Automation and efficiency of our development and construction, which will therefore create a more stable supply chain system that effectively safeguard our hyperscale Greenfield project development and delivery in Asia Pacific emerging market.
Even with concurrent delivery of multiple projects.
Speaker 4: Such will further contribute to the establishment of hyperscale computing infrastructure cluster in the region and support the regional business of our client.
Such will further contribute to the establishment of Hyperscale computing infrastructure cluster in the region and support the regional business of our clients.
Speaker 4: Now, let's turn to some other recent developments of the company on slide 12. Our solid fundamentals and business prospects are reaffirmed by renowned credit agencies, despite recent evolving headlines of the macro environment, as Fitch is maintaining their investment-grade BBB minus issuers rating with a stable outlook on the company, according to their late October news release.
Now, let's turn to some other recent developments of the company on slide 12.
Our solid fundamentals and the business prospects.
Reaffirm by renowned credit agency, despite our recent evolving headlines of the macro environment.
Fitch is maintaining the investment grade triple B minus issuers rating with a stable outlook on the company.
According to their late October news release.
Speaker 4: As quoted, Xingdata Group holding limited.
As quoted.
Jim data group holding limited.
Speaker 4: credit profile will remain solid, supported by the strategic location of its data centers, use of renewable energy and adequate rating headrooms, despite the acute power shortage and potential electricity tariff hikes in China.
Credit profile will remain solid.
Supported by the strategic location, albeit the datacenters.
Of renewable energy and adequate weighting headphones.
Quite a coup vacuum power shortage and potential electricity to <unk> in China.
Speaker 4: Meanwhile, during the third quarter, we continued our active exploration of ESD development, improved our alignment with international standards, and garnered additional public endorsement for our efforts.
Meanwhile, during the third quarter, we continued our active exploration of ESG development improve our alignment with international standards and garner additional public endorsement for our efforts.
Speaker 4: In September 2021, the company formally became a corporate member of the United Nations Global Compact, which is the world's largest corporate sustainability initiative with more than 13,000 supportive institutional and corporate members from more than 170 countries.
In September 2021, the company formally became a corporate member of the United Nations Global compact, which is the world's largest corporate sustainability initiative with more than 13000 supportive institutional and corporate members for more than 170 countries.
Speaker 4: As the first AIPAC Digital Infrastructure Corporate member of such organization, the company will collaborate with fellow constituents to help build United Nations SDGs and promote a shared global vision.
As the first APAC digital infrastructure corporate member of such organization. The company will collaborate with fellow constituting to help build that United Nations Stds.
And promote a shared global vision.
Speaker 4: Also in September 2021, the company joined the RE100 initiative, which is a global renewable energy initiative jointly launched by the Climate Group and Carbon Disclosure Project's Global Environmental Information Research Center.
Also in September 2021, the company joined the Rd, 100 initiative, which is a global renewable energy initiatives jointly launched by the climate group and carbon disclosure project Global Environmental inflammation Research Center too.
Speaker 4: to accelerate and scale the efforts of reaching to zero carbon energy consumption goal.
To accelerate at scale the effort of reaching the zero carbon energy consumption goal.
Speaker 4: The RE100 has drawn hundreds of influential businesses around the world into the commitment of utilizing 100% renewable energy.
The <unk> 100 is drawn hundreds of influential business around the world into the commitment of utilizing 100% renewable energy.
Speaker 4: At the same time, we further extended our green development goals by announcing the 2040 100% plan.
At the same time, we further extended our green development goals by announcing the 2041 represent plant.
Speaker 4: Under the plan, all of the company's next-generation hyperscale data centers around the globe will be powered 100 percent with renewable energy solutions by 2040, thus facilitating China's low-carbon development effort and helping fulfill the goal of reaching peak emissions by 2030 and carbon neutrality by 2060 in China.
And are the plan all of the company's next generation Hyperscale data centers around the globe will be powered 100% with renewable energy solutions by 2040.
Thus facilitating chinas low carbon development effort and helping fulfill the goal of reaching peak emissions by 2030 and carbon neutrality by 2016 in China.
Speaker 4: With all our long-term commitment to ESG, Chin Data Group is garnering additional public endorsement.
With all of our long term commitment with ESG.
Gene data group is garden, garnering additional public endorsement.
Speaker 4: The company won the highest accolade in the best ESP initiative category in the prestigious 17 Global Career Awards that took place on 21st October , thus becoming the first computing infrastructure company in the Asia-Pacific region to receive such honor.
The company won the highest accolade in the best ESG initiative category in the prestigious 17 Global career awards that took place on 21 October.
Becoming the first computing infrastructure company in the Asia Pacific region to receive such honor.
As a top Hyperscale computing infrastructure enterprise. The company is widely acknowledged for its leadership, among APAC, especially emerging market APAC companies exploring participating and the scaling up carbon neutrality initiatives as well as managing ESG initiative.
Speaker 4: As a top hyperscale computing infrastructure enterprise, the company is widely acknowledged for its leadership among APAC, especially emerging market APAC companies in exploring, participating, and scaling up carbon neutrality initiative, as well as managing ESG initiative.
Policy update on slide 13.
Speaker 4: Several central government papers were issued in the past few months offering further insights on the past and objectives of national carbon neutrality.
Several central government papers were issued in the past few months.
<unk> further insights on the past and our objectives of national carbon neutrality.
Speaker 4: State Council published working guidance for carbon dioxide peaking and carbon neutrality in full and faithful implementation of the new development philosophy.
State Council published working guidance for carbon dioxide, peaking and carbon neutrality in full and peaceful implementation of the new development philosophy.
And noticed by the state Council of the action plan for carbon dioxide, peaking before.
In September and October respectively.
Which further emphasizes the expectation for improved geographical lay out energy consumption monitoring and management.
Energy efficiency et cetera.
The data center industry.
Speaker 4: These key focuses have been elaborated on in the data center policies issued by Ministry of Industry and Information Technology, or MIIT, and National Development and Reform Committee, or NDRC, earlier this year.
These key focuses has been elaborated in.
In the data center policies issued by Ministry of.
Industry and information technology.
It.
And National Development, and Reform Committee and DRC earlier this year.
Speaker 4: On a power issue, following NDRC's publishment of the notice on further deepening the market-oriented reform for the non-grade price of coal-fired power generation in October , that stipulated a wider range of variation for on-grade price. A number of provinces have seen on-grade price increase by 20%.
On a power issue.
In India <unk> published.
The notice and further deepening the market oriented reform for a non grid price of coal fired power generation in October in October thus stimulated a wider range of variation for Hungary price.
A number of provinces.
On grid price increased by 20%.
Speaker 4: The power shortage issue, thanks to the serious action taken, has been mitigated, according to National Energy Bureau's press release in early November . For the company, the impact of power issue on our recent operation has been very limited, next to zero, and we believe our layout or deployment in energy-abound regions have been a key contributor.
The power shortage issue. Thanks to the serious action taken has been mitigated according to National Energy Bureaus press release in early November.
For the company the impact of power issue on our recent operation has been very limited Mexicans Euro.
And we believe our layout or deployment in energy are bound regions have been a key contributor.
Speaker 4: With that, I conclude our operational overview. I will now turn over the call to Zoe to go through our financial details for the third quarter. Zoe, please.
With that I conclude our operational overview I will now turn over the call to Zoe to go through our financial details for the third quarter.
<unk>.
Now turning to slide 15, we increased our annualized capacity.
Speaker 5: Now, turning to slide 15, we increased our utilized capacity and grew revenue. In quarter three, total revenue grew by 7.9 percent, quarter over quarter, of 68.5 percent year over year, to RMB 740.8 million.
What that means.
Revenue grew by nine.
9% quarter over quarter.
Oh.
One claimed five Christian over year to RMB.
48 meeting utilize the capacity increased to 268 megawatts by quickly.
Speaker 5: Utilized capacity increased to 268 MW by quarter end compared with 175 MW in the same quarter last year, indicating a 53.3% year-over-year growth.
I believe well have good news.
75 megawatt any quarter last year.
<unk> grew three 3% year over year growth.
Our cost.
Speaker 5: For our cost and expense structure, our prudent cost control efforts enable us to keep our core expenses and the cost percentage within stable range while continuing to grow our adjusted EBITDA and adjusted net income.
Terry.
Okay.
To keep up.
And of course, the percentage remains stable remains one.
<unk> continuing to grow our adjusted EBITDA and <unk>.
Adjusted net income.
Speaker 5: Looking into the details, cost and expense items on slide 16, utility costs made up around 27% of revenue in the last two quarters, with a historical range of 25% to 28%. Maintenance and other costs took around 10% to 12%, and adjusted FG&A took around 12% to 14%.
You're going into the detail.
Slide 16.
<unk> readout around the new tenant revenue in the last two quarters with that is <unk>.
<unk>.
8%.
And other costs to go around.
Percent.
Adjusted SG&A to go around.
Perfect.
Speaker 5: Take a closer look at our strong and stable profitability on slide 17. Adjusted EBITDA in the third quarter increased 61.6% year-over-year or 8.8% quarter-over-quarter to RMB 368.4 million with a margin of 49.7%.
Hey, guys.
And have a strong and stable profitability on slide 17, adjusted EBITDA third quarter.
Increased 18, 1% year over year, or eight 8% quarter over quarter to RMB 368.
With our model.
49, 7%.
Speaker 5: Adjusted net income increased 132.2% year-over-year to RMB 112 million. Adjusted net margin for the quarter was 15.1%. Details in the gap to non-gap reconciliation on EBITDA and net income will be available in our 6k filing or the appendix in our IRPPT.
Net income increased 132 clinics.
Over year to RMB 100, it's not meeting Jeff.
Net margin for the quarter was 15, 1%.
The GAAP to non-GAAP reconciliation included in net income would be available.
Finally, other pending IR ppt.
Speaker 6: Now, let's take a look at our cash and debt position.
Now, let's take a look at our cash I think that condition.
Speaker 5: and our CAPEX on slide 18. CAPEX in the third quarter was RMB 1.4 billion.
And our Capex slide 18.
In the third quarter was RMB one one.
<unk>.
Speaker 5: compared with RMB 526.2 million in the second quarter and RMB 654.5 million in the first quarter.
Compared with RMB 576 claims for meaning in the second quarter.
In RMB.
Thank you Paul for inspired many in the first quarter.
Speaker 5: We incurred great capex in the third quarter as we continue to work in our business expansion to meet increased demand from our customers by investing more capital into our under construction business centers, especially CN11, CN13, CN15, BBY01, and Xcode.
Great Capex in this third quarter as we continue to routine now.
King.
Right.
Our customer.
This demand curve.
Under construction data center.
Especially now.
13.
BB like you run an X 10.
Speaker 6: This capital expenditure spending today ensures the capital company's future ability to serve our customers and shows our confidence in future business growth.
This capex expenditures.
Yes, sure the company future ability to serve our customers and this shows our confidence in.
He future business growth.
Speaker 5: On a 12-month basis, last 12-months' CATx by end of the third quarter was RMB3.57 billion.
On a 12 month basis last 10 months.
The first quarter was RMB three.
17, our cash position.
Speaker 5: Our cash position, which includes cash and cash equivalents and restricted cash, was RMB 6.1 billion by end of the quarter, with our total debt standing at RMB 5.5 billion.
Cash and cash equivalent.
Hey, rich.
Were RMB.
<unk> ended the quarter with avocados the debt.
At RMB five claims that fee.
Speaker 6: Looking closer at the change behind the catch position.
Please note that hasn't changed and the cash position.
Speaker 6: On slide 19, we continue to generate a profit matching cash from operation of RMB 288.8 million, adding additional RMB 327.5 million project financing offset by RMB 1.6 billion investing cash outflow consisting of the aforementioned CAPEX.
Slide 19, we continue to generate a profit matching cash accretion from RMB 288 eight meter.
<unk> RMB 377, 5 million incurred debt for now.
Oh, sorry, RMB 116, investing cash outflow there.
Paul mentioned the Capex.
Speaker 6: and a RMB 149.5 million in short-term investment cash outflow.
RMB $141 five meetings and short term investments.
Sure.
Speaker 6: Again, we grew with high quality, indicating that our healthy cash flow from operation and the leverage. As you can see on slide 20, by end of third quarter, our total debt to capital ratio was.
Again, with really high quality, indicating our healthy cash flow from operation and non res.
On slide 20.
Cologuard.
Debt to capital ratio.
35 claims focus.
44, 9% same quarter last year as it towards a debt lots of 12 months adjusted EBITDA ratio.
All Greenfield.
Okay.
This quarter and five four in the same quarter last year.
Speaker 5: Our last 12 months adjusted EBITDA to last 12 months interest ratio by end of third quarter was 5.6, compared with 5.3 by end of second quarter and 3.5 by end of the same quarter last year.
I have a loss of 10 months of adjusted EBITDA to loss adjustment ratio.
What I have seen comparatively.
<unk>.
And the partner.
<unk> frequently by the end of the same quarter last year.
Speaker 6: Finally, let's take a look at the guidance. We reiterated our 2021 full-year guidance and both our first nine-month revenue and adjusted EBITDA are now at 73.8% of our full-year guidance midpoint. This forecast reflects our current and the preliminary views on the market and operational condition.
Finally, let's take a look at the guidance.
We are reiterating our 2021 full year guide.
Both our first nine months revenue and adjusted EBITDA.
Yes.
703, 8% of our full year guidance midpoint.
That reflects our current and preliminary view on the market and operational conditions.
Speaker 6: This concludes our prepared remarks for today. Operator, we are now ready to take questions.
This concludes our prepared remarks for today.
We are now ready to take questions.
Speaker 1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be called.
Thank you ladies and gentlemen.
I will begin the question and answer session.
Wish to ask a question. Please press star one on your telephone.
Your name to be announced if you wish your all your request please press the pound.
Speaker 1: If you withdraw your request, please press the pound or hash key.
Key wins.
Speaker 1: When asking questions, please state your question in Chinese first, then repeat your question in English for the convenience of everyone in the call.
When asking a question. Please state your question in Chinese first then repeat your question in English for the convenience of everyone in the call. Please.
Speaker 1: please ask one question at a time. So once again, it's star one for questions.
Please ask one question at a time, so once again Thats star one question.
Speaker 1: Our first question comes from the line of Yang Liu from Morgan Stanley .
Our first question comes from the line of Yang Liu from Morgan Stanley. Please go ahead.
Okay.
Speaker 7: Thank you for the opportunity to ask questions. First of all, congratulations to the company for its excellent performance. I mainly want to ask about the progress of this new customer. Can the management provide more color to the customer's volume? For example, the location of his demand, and whether the company also feels that the future will be long-term.
Sure sure.
Commercial vehicles.
Yes.
Would you be Andrew Otis, where he showed you the <unk> cohort at Tinder in Q4.
Cornerstone kick on condo the color to the CRO.
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Sheet.
Speaker 7: ??????????????? Let me translate my question in English. I'm very interested in this new major customer acquisition. Could management elaborate more or provide more color on this customer in terms of scale, the location, and about the future outlook, whether it...
Please don't take a cohort that I'll come and go that path.
Let me translate my question in English.
We're interested in this new major.
Customer acquisition.
Can management elaborate more.
I'll provide more color on this customer can come off of scale the location.
For the future also for weather.
Speaker 7: whether you expect to get the order from this customer on a recurring basis. Thank you.
Whether you expect show cause order from this customer on a recurring basis. Thank you.
On ethylene <unk>.
Speaker 3: I'll answer this question, not Alice. For the 27,000-watt new mid-range customers we previously revealed, this customer is the top two cloud computing manufacturers in China.
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Speaker 3: In terms of delivery, we will have two different stations in the north of China.
So it's helpful. It's EMEA woman Johns I had some blood based lung put on sandy.
Speaker 3: At every step hand over 13 TWh Ip address to clients
Tier one telcos, who sends out a lot of the aikido map.
Speaker 3: The project will be customized and delivered according to customer standards.
Some will John and so cohort the Belgian ceasing, peaking Joe that's helpful.
Speaker 3: As a whole, we will continue to stick to the super-large-scale green space development model in the process of diversifying customer development.
Now of course is that changing coppola ill hop out that Nicolas and Dunzo will maintain liquidity tissue Tien shoots hold out Glenn will have added Melissa.
Speaker 3: At the same time, we can also deliver customized projects according to customer standards. Thank you.
Yes.
The builds are you seeing things are rather some telephone.
Tissue.
Speaker 8: translation for Alex Wurz, for the 27 IT megawatts project that we disclosed, we won the bidding in November and the client is a top two Chinese leading cloud computing service provider. The project is to be delivered in several phases in two locations in Northern China, each with around 13 megawatts of IT capacity.
Translation for Alex Schwartz.
For the 27 megawatts project that we disclosed we have won the bidding in November and the client is a cap to Chinese leading.
<unk> service provider and project STB delivered in several phases in two locations in northern China, each with around 13 megawatts of capacity.
Speaker 8: As for the delivery, we will provide customized delivery as specified by the client.
As for the delivery, we will provide customized delivery as defined by the client.
Speaker 8: Generally speaking, as we establish a more diversified client base going forward, we will adhere to our hyperscale greenfield development model, while at the same time capable of delivering projects based on customized specifications from the client. Thank you.
Generally speaking as we establish a more diversified client base going forward.
Adhere to our Hyperscale Greenfield development model, while at the same time capable of delivering projects based on customized specification from the client.
Okay.
Thank you next question comes from Tina <unk> from Goldman Sachs. Please go ahead.
Speaker 1: Thank you all. Next question comes from Tina Ho from Goldman Sachs. Please go ahead.
Speaker 9: Thank you very much for your time, and congratulations on getting a bright performance. My question is about the recent price trend of our contract. Because I saw that when we calculated the 3Q,
One is on Russia.
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No.
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Sure.
And then just annualize that Felicia whole women children go ahead Josh.
Thank you.
Good.
Speaker 9: The monthly rent is 1.9% higher than 2Q. So I'd like to ask if the price of our biggest client, the newly added contract, is there any sign of a rebound? And for our new cloud computing client, I'd like to ask if there's any sign of a rebound?
Mitchell.
Switching negotiate.
John the answer.
Great.
Woman Josh.
You guys sure women's with alcohol Jbs.
Okay.
Sure Sean.
Douglas.
Meanwhile, Felicia Thank you Jeff.
Sure well then.
You saw in the fourth.
Does that mean.
Speaker 9: How is the price of the contract compared to the previous one? Is the payment model similar to the previous one?
How about yourself.
Jonathan.
Yes.
So for the more ships than just yellow Lindsay that cohort.
CPG also.
Yes.
Let me translate my question.
Speaker 9: So thank you very much, management, for the time and congratulations on a very solid result. So my question is around the pricing, recent contract pricing, because by our calculation, your actually monthly service revenue per megawatt actually increased by 1.9%.
Thank you very much manageable for the time and congratulations on a very solid result. So my question is around the pricing of recent contract pricing because by our calculation you're actually monthly service revenue per megawatt.
Monthly service revenue per megawatt.
Please by one 9%.
Speaker 9: in third quarter versus second quarter, so just wondering from these like newly in-service contracts, is there a trend of pricing recovering? And then also interested in your new cloud service customer, what is the like contract pricing for this, for this new customer versus your anchor customer? And also the contract structure, is it different or similar to your anchor customer?
Quarter versus second quarter. So just wondering from the newly in service contract.
Trend of pricing.
Recovering and then also.
Also interested in your new cloud services customer.
What is.
The contract pricing for this for this new customer versus your anchor customer and also the contract structure is it different or similar CAGR anchor customer. Thanks.
Speaker 4: Hi, Tina. Thank you for your question. This is Nick. I will help answering this question.
Alright. Thank you for your question this is Nick.
I will help answering this question.
Speaker 4: I think the current contract with our major customers, especially on the pricing side, remains very stable and has been consistently stable in the past and will be in such a stable state moving forward.
I think our.
Current contract with our major customers, especially on the pricing side remained very stable and has been consistent.
Consistently stable in the past and will be in such a stable state wound forward and but we did notice that some downward trend of pricing in the industry This year somewhere.
Speaker 4: And, but we did notice that some downward trend of pricing in the industry this year, somewhere in China. As of now, we think that our unique
In China as of now we think our unique hyperscale Greenfield a full stack model outside of tier one city has created a very comfortable buffer clause.
Speaker 4: Hyperscale Greenfield Foodstack model outside Tier 1 city has created a very comfortable buffer for us.
Speaker 4: with the competitive advantage in terms of economy of scale.
The competitive advantage.
In terms of economy of scale operating efficiency and a lower cost structure as we have in those energy are bound in regions outside of tier one city.
Speaker 4: operating efficiency and a lower cost structure as we have in those energy abundant regions outside tier one city.
Speaker 10: All these factors contribute to allow us.
All these factors contribute to allow us.
Speaker 10: um the you know achieve a very stable financial uh structure in terms of our contract pricing as well as our margin as well as our capex spending you know
Achieve a very stable financial structure in terms of our contract pricing as well as our margin as well as our capex spending and.
Speaker 10: In terms of your question about our pricing for the new customers and maybe our anchor customers, we're not in a position to disclose in detail under the confidentiality agreement for us with our key clients.
In terms of your question about our pricing for the new customers that maybe our anchor customers. We're not in a position to disclose a detailed under the confidentiality agreement for us with our key clients.
Speaker 10: But on your question related to the new corporational business model with new client, we will say that this is a newly customized model with this leading the cloud computing companies. And this is also in our total capability and the capacity, the planning, and that all can be handled in-house.
But on the.
On your on your question related to the Yieldco operational business model as new client, we will see we will say about this as a newly customized a model, which does this a leading cloud computing companies and this is also in our total capability and the capacity.
Planning and that can be.
Handled in house.
Thank you.
Speaker 1: All right, thank you. Our next question comes from James Lang from UBS. Please ask your question.
Great. Thank you next question comes from James Huang from UBS. Please ask your question.
Speaker 11: They planning Lenore Raja. Huh? And if you had today's getting worse or in the fish eat?
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I'm playing.
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Speaker 11: My first question is about overseas business. I see that there is a lot of development in overseas business in this quarter. So I want to know the direction of future overseas business development. And we also see that some of the competitors have entered the Southeast Asian market. So I want to know what the competition situation is like.
However, we have somebody go project.
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Speaker 11: So I've got one question, the question is around the overseas business. We saw one of your peers also entering the Southeast Asian market recently, so just wanted to know your future growth direction in the region as well as the level of competition that you are seeing now and how it compares to the domestic Chinese market.
Management.
One question. The question is around the <unk> business.
We saw one of your peers.
Also entering the southeast Asian market recently.
Wanted to know how youre feature growth direction in the region as well as the level of competition that you are seeing now and how it compares to the domestic Chinese market. Thank you.
Speaker 3: Thank you for the question. I am Alex. I will answer the question. This quarter, the company has made great progress in overseas business development. We have started to build a 100MW-level super-large-scale park in Rouhe Province, Malaysia.
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Speaker 3: At the same time, we have already received 80MW of MOUs from our customers. These demands will be delivered to our customers in stages starting in 2022. In Thailand, we are also about to complete a 5MW-level project acquisition to support the business development of key customers in Southeast Asia.
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Speaker 3: At the same time, we are also expanding the development opportunities in other regions of Southeast Asia, especially Vietnam and Indonesia.
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Speaker 3: The important thing is that we have made significant breakthroughs in the construction of the pre-deployment data center and the ability to integrate into the industry chain in the direction of white-nuclear computing infrastructure. This actually effectively supports the low-cost and high-efficiency delivery of our overseas delivery. For the Asia-Pacific region, we expect the overall demand to be healthy.
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Speaker 3: As our unique model continues to be promoted and widely recognized by the market, the demand for the large-scale, all-weather, full-combat mode will also increase.
Susan Allen.
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Speaker 3: I believe that we can achieve better development in the Asia-Pacific emerging markets. At the same time, we also hope that more business owners like us can benefit from this area. Thank you.
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Speaker 8: Thank you for your question.
<unk>. Thank you for your question.
Speaker 8: In this quarter, we did make big progress in our overseas business.
In this quarter, we did make progress in our overseas business.
Speaker 8: In Malaysia, the company has launched a new greenfield project situated in Johor state.
In Malaysia. The company has launched a new Greenfield project you did in <unk>.
Speaker 8: This new project is expected to be a built-to-suit hyperscale data center, and it has received an MOU capacity of over 80 megawatts, 80 IT megawatts, to be delivered to our anchored customer in several phases starting from next year.
This new project is that there could be a build to suit Hyperscale data center and it has received an mou capacity of over 80 megawatt.
80 megawatts to be delivered to our anchor customer in several phases starting from next year.
Speaker 8: We're also finalizing a strategic acquisition in Thailand-Bangkok. The project, upon completion of the technical upgrade, will be hosting five IT megawatts, and capable of supporting key client business development in the region.
And also why new IV, a strategic acquisition.
And Bangkok.
The project upon completion of the technical upgrades will be hosting <unk> megawatt megawatt and capable of supporting key kind business model.
In the region.
Speaker 8: Furthermore, we're also actively exploring opportunities in other countries within Southeast Asia, such as Vietnam and Indonesia.
Furthermore, we are also actively.
Exploring opportunity in other countries.
In southeast Asia, such as Vietnam and Indonesia.
Importantly, our constant progress and breakthrough in technology, R&D as well as white.
Speaker 1: Importantly, our constant progress and breakthrough in technology R&D, as well as white box model solutions, self-developed precast container data center modules, and the further integrated supply chain, will effectively support the cost-efficient and cross-border delivery of our total solution for hyperscale data center infrastructure.
Black box model solution.
South <unk> Creek has container datacenter module and further integrated supply chain effectively or the coffee <unk>.
Cross border delivery of our total solution or happy to go into infrastructure.
Speaker 8: for the market prospect in Asia-Pacific market within the overall demand is healthy.
Quite the market cost back in Asia Pacific market, we think the overall demand is healthy.
Speaker 8: As we further advance our unique model, we're receiving higher and wider recognition.
We further advance our unique model, we're receiving higher and wider recognition.
Speaker 8: We expect the demand for hyperscale greenfield pool stack model will be even greater than the overall demand, and we believe that we can achieve further in Asia-Pacific emerging markets. And we do hope there are more peers or friends to come together in this region to develop and explore the region's market as well.
We expect the demand for hyper scale Greenfield goes back model will be even greater and overall demand.
And we believe that we can achieve further in Asia Pacific and Marty Marty.
And we do have there are more parents or plan to come together in this weekend.
Develop and deploy the reading market is long.
No.
Speaker 1: Right, next question comes from Marco Lynn from the city. Please ask a question.
Alright next question comes from Colin from Citi. Please ask your question.
Speaker 11: Good evening. We are Astellite and Markeling from Huaqi Research Department. Congratulations on the company's bright future. Our question is that we would like to ask the company how the power cut will affect the company this season and in the long term? Will it drive the data center to move more to remote sites? Thank you. I'll translate. Congratulations on the great result. Could you quantify the impact of power crunch in this quarter and longer term? And would it be a driver for IDC to move towards remote sites?
Great.
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Got it.
I would translate congratulation on the great results.
Could you quantify the impact of power crunch in this quarter and longer term and would it be a driver for ITC to move towards remote site. Thank you.
Thank you Mr Lynch.
Speaker 10: Thank you, Mr. Lin. I think, first of all, for the impact of the power-related issue, both power shortage and power price, as we have just discussed, impact was very limited.
I think.
First of all for the impact of the power related issue both power shortage of power price as we have just discussed impact was very limited almost next to zero a reality, especially in Q3 and we expect some very very very very limited the impact in the near future visits.
Speaker 10: almost next to zero in reality, especially in Q3. And we expect very, very, very, very limited impact in the near future. This is actually primarily due to our energy side geographic deployment strategy as we started from day one.
This is actually primarily due to our energy side geographic the deployment and the strategy as we we.
We started from day one.
Speaker 4: Going forward, I think our energy side geographic deployment will continue to be our cornerstone strategy and also going to create a competitive advantage for us.
Going forward I think our energy side geographic deployment will continue to be our cornerstone strategy and also going to create a competitive advantage plus and we believe that our long term commitment to renewable energy development in this site and the related capacity to build up.
Speaker 4: And we believe that our long-term commitment to renewable energy development in this site and the related capacity build-up will continue to contribute to the stable and secure the power supply, as well as to serve as an adequate hedge, I would say, against the power tariff inflation, if any.
Ill continue to contribute to the stable and secure the power supply.
As well as to serve as the.
Adequate hedge I will say against the power terrific inflation if any.
Speaker 4: Also, when you use the term remote, it's actually, it's always on a relatively sense. One year ago, I remember some industry peers even thought that the places like Hebei, Zhangjiakou, or Datong, Shaanxi as a remote area, but they are not too remote, away from tier one city like Beijing. In fact, for Zhangjiakou, it is only like 100 kilometers away from downtown Beijing. So generally, Chin data is...
Also you used when you use the term remote is actually its always on a relatively.
One year ago, I remember some industry peers.
Even thought about the places like the scope of your tongue alcohol or bathroom shine is a remote area, but they are not to do it.
Away from tier one cities like Beijing in fact, where John dealt quite it's only like one economics are way away from downtown Beijing.
So generally chimp data so.
I think.
Speaker 10: a hyperscale, you know, all of such data is a majority hyperscale data center clusters.
Sure.
Our hyperscale.
All are a bunch of data is the majority of Hyperscale data center clusters are located.
Speaker 10: are located and deployed in those energy-abundant locations. And these locations have.
And deployed in those energy abound in location and these locations happens to be outside of tier one city or EUR term in a remote a little bit of a remote area. For example, tongued alcohol thoughtful and Malaysia, Malaysia, a whole state.
Speaker 10: to be outside Tier 1 city or in your term in a remote, a little bit remote area.
Speaker 10: For example, Zhangjiakou, Datong, and Malaysia as a whole state.
Speaker 10: We all stick to these regions because they are energy-abundant, not only in the traditional energy-abundant sense, but also in a renewable-abundant sense. And they are not too far away from Tier 1 city at all.
I'll stick to this region's because.
Energy are bounded not only in the traditional energy a bandwidth, but also in the renewable abounded.
And theyre not not too far away from tier one city at all.
Thank you.
Thank you. Our next question comes from Homecare Lee from CIBC. Please ask your question.
Speaker 1: Thank you. Our next question comes from Hongjie Li from CICC. Please ask your question.
Speaker 12: My first question is, could you elaborate more on your initiative on the green energy and how shall we outlook on additional impact on the margin?
And how does this have on HR Argos.
Thank you Vishal, Hello, John Baugh with Shandong cord now with tissue.
Hi, gentlemen, again.
Ladies and gentlemen.
They said that.
Thank you.
Hi, Jim.
So I will do that.
Thanks management on that first question is could you elaborate more on it.
Chip on the Green energy and how Chalmette outlook.
Now capex and impact on the margin. Thank you.
I think the chain data what can the June data is understanding of.
Speaker 4: I think the Chin data, what Chin data's understanding of the IDC industry is always how to find the most efficient way to convert renewable electric power to computing power.
IDT administrative always how to find the most efficient way to convert renewable.
Electric electric power computing power.
Speaker 4: That's why, firstly, the development of renewable energy is by all means a long-term strategy that we will commit ourselves to.
That's why I, firstly, the deploy development of renewable energy.
He is by all means our long term strategy that we will commit ourselves to.
Speaker 4: Secondly, in terms of how it will be invested and operated, the company will judge case by case, will make the judgment case by case, based on several critical factors.
Secondly in terms of how it will be invested and operated.
Company.
Well judge case by case, well made the judgment case by case based on several critical factors.
Speaker 10: But remember, we are in the bigger context of carbon neutrality as China's national strategy.
But remember we are in the bigger context of our carbon neutrality as China's national strategy.
Speaker 4: So our final objective as one of the IDC industry or the computing infrastructure participant is trying to strike up optimum balance among adequate renewable power supply, power price, invested capital required.
Our final objective as one of the ITC industry or the computing infrastructure participant.
Trying to strike a optimum pilots.
Adequate renewable power supply.
Power price the.
We invested capital required.
Speaker 10: and obviously with the ultimate goal to achieve the best investment value for return for investors, for customers, you know, etc. And we are not, during the process, we will not exclude any opportunity or potentials to involve external parties on a corporation on both the investment side and operating side in the renewable energy, along this renewable energy strategy and execution.
And obviously with the ultimate goal to achieve the best investment valuable return for investors for the customer et cetera.
And we are not doing the process, we will not exclude any opportunities or potentials.
External parties on our cooperation on both the investment side and operation side in the renewable energy along with renewable energy strategy and execution.
Thank you.
Speaker 1: Thank you. Next question comes from Albert Hong from JPMorgan. Please ask your question.
Thank you. Our next question comes from Albert <unk> from J P. Morgan. Please ask your question.
Speaker 3: Hello, Mr. Fan. Thank you for your question and congratulations on your great achievements.
Thank you Sir.
In general with Keybanc.
King.
The new team.
Speaker 2: My first question is about the moving rate in the second half of this year. It has dropped significantly. The demand for super-large data centers next year has become more conservative. I wonder if you have seen any similar situation in this area. Because our customer concentration is relatively high, if there is a similar risk, how do we control the risk of the moving rate being less than expected in the next few years?
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As it relates to the phone and saying well now.
I'm with you.
So moving right.
Taken away.
Phone churn.
Speaker 13: Do your peers have intercasts on slowdown in moving rates in second half and turn more conservative from the next year outlook, especially for hyperspeed?
Pes have inter catch some slowdown and moving rates in second half and more customer again from the next year outlook, especially for Hyperscale.
Speaker 13: Why know whether chain data also sees similar concerns about 2022 hyperscale demand? Chain data has high customer concentration risk. How would you mitigate the risk of potential slowdown in moving rates?
And when they are changing also ceasing their concerns about 2022 hyperscale demand.
Many of the highest highest customer concentration.
Concentration range, how much of a winter categories of potential slowdown in moving rates. Thank you.
Okay.
Speaker 3: Thank you for the question. I will answer it. Actually, I have already answered this question. One is the diversification of the customer, including product governance and market development.
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Speaker 3: At the same time, we have seen some progress in the diversification of our customers and the diversification of the market area.
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Speaker 3: I think the answer to this question is that you can see that our customers are quite special through our previous four-quarter reports. Of course, this is on the basis of our future diversification, and we hope to continue to maintain it.
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Speaker 3: In addition, the understanding of the customer needs of the super-large data center is completely different, and the products and solutions provided are not on the same level.
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Specifically I know when we issue the tender.
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Hi.
Suzanne.
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Speaker 3: As for the forecast for next year, you can refer to our PubMed. Thank you.
So you mean.
That's a Hong Kong loan covenants.
Cancellations are Alex work.
Speaker 8: Thank you for your question. I think Nick has just addressed a similar topic. In general, our recent progress in client diversification and geographic diversification, as well as the diversification in the product line and market segments of our anchor client itself should all be marginally creating a better risk hygiene profile for the company going forward.
Thank you for your question.
I think Nick has gen sidetracked estimate our topic in general our recent progress in diversification and geographic diversification as well as the diversification.
In the product line and market segment of our anchor client itself should all be marginally, creating a better risk hedging profile for the company going forward.
Speaker 8: Then, on the concept of hyperscale data center and the demand for such hyperscale data center, we're not sure if other market players, as you mentioned, share the same definition as us.
Danny on the cause that.
<unk> cloud data center and the demand for that type of Scott and Peter were not sure. If other market players that you mentioned share the same definition.
Speaker 8: A different definition may lead to different product and solution offerings.
As different definition may lead to different product and solution offering.
Speaker 14: Our anchor clients like Tindata as a business partner very early at this business stage when we are just a startup company.
Our anchor client slide 10 data SaaS.
Business partner.
Very early at this stage when we are Joseph startup company.
Speaker 14: our Hyperscale model, or to be exact, the Hyperscale Greenfield Full Stack model, has accompanied our client all the way along and we grew together. So now we're still growing together.
Hyperscale model or the.
To be exact of Hyperscale greensville boost back model has accompanied our find all the way along and we grew together.
Now we're still grow together.
Speaker 14: We believe we have done a good job for them so far. For the next year, we can refer to our pod fund or the general introduction for our disclosed information.
We believe we have done a good job for them so far.
We can.
You can refer to our platform.
General introduction or disclose information.
Thank you.
Speaker 1: Thank you. The next question comes from Ye Lin Chuang from DBS Bank. Please ask your question.
Thank you. Our next question comes from Yellen Joanne from DBS Bank. Please ask your question.
Speaker 15: Thank you for the opportunity provided by the management team, and congratulations to the company for achieving very strong performance in the third quarter. My question is also about the power shortage. Can the management team share with us the power shortage in the third quarter and the situation of power prices going up, and the impact on the current market competition pattern and future customer needs? Can you share with us the impact on the current market competition pattern and future customer needs?
Okay Quieting down Q on Q1 of two ways.
Sure John.
Consequences that designs, you're going to the Olympics.
Lindsay is required.
Sure Glenn it's actually work with your franchisees at that time due to debt issuance, we have Daniel Gotcha.
On that same commentary Shan Shan Shan Nen go through if you weigh that.
This cohort.
Yes.
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Its Andrei <unk>.
Got it.
Speaker 15: move in slowdown. Thanks management for the opportunity and congratulations on the strong third quarter results. My question is, what is the current competition landscape and demand outlook in China given the recent power shortage and tariff hike in the third quarter as we saw a slow move in rate for other competitors in China?
Moving in slow down to St. Joe.
I'll see if I can.
Thanks management for the opportunity and congratulations on the strong first quarter results.
My question is what is the current competition landscape and demand outlook in China, given the recent power shortage and packaging.
Third quarter as we saw a slow move in rates, while other competitors in China. Thank you.
Thank you Nick.
Speaker 10: Thank you. This is Nick. I'm actually going to answer these questions. I think I want to reiterate Chin Data's way of doing business. We believe the IDC's nature is to try and find the most efficient way of converting electric power to computing power. Therefore, power has always been integrated and one of the most important strategies for the company from day one.
I'm actually going to answer these questions I think I want to reiterate chimp data as way of doing business, we believe.
Idc's nature is to try and find the most efficient way of converting.
Trick powered computing power. Therefore power has always been the integrated and the one of the most important strategy for the company from day, one so as the as you can as it's approved recently in the marketplace on power related issue and also you can see on numerous policy papers issued by.
Speaker 10: So as you can, as it's proved recently in the marketplace on power-related issues, and also you can see on numerous policy papers issued by the government authority like MIT and DRC and the State Council in the past few months in a very intensive way, elaborating actually on a vision for the IDC industry and the carbon neutrality target for the entire country.
The government authority like it.
In DRC and State Council.
In the past few months in a very intensive way elaborating Ashley on the vision for the IDC industry and the carbon neutrality target for the entire country.
Speaker 10: as well as the fact that the Chinese IDC industry made up around 2% of the total energy consumption nationwide.
As well as the fact that the Chinese IDC industry made up around 2%, 2% of the total energy consumption nationwide last year UK.
Speaker 10: You can understand why the power and energy is so important for the IDC industry. Therefore, a strategy on a power for a particular IDC company has become very, very important.
You can understand the wide power and energy that is so important what IDC nutrient therefore, our strategy on a power for a particular IDC companies is becoming very very important therefore.
Speaker 10: Therefore, that can explain why the company from day one, we believe into this, we execute along this power-related strategy, and we have very close to energy side geographical deployment to be fully in line with this belief and strategy.
Thus kind of explain why the company from day, one we believe into this we exited allowing this power related strategy and we have a.
Very close to energy side geographical deployment.
To be fully in line with this belief and strategy.
Speaker 4: You know, for the company, going forward, our energy-side geographical deployment will continue, I emphasize, will continue to be our cornerstone. And we believe our long-term commitment to renewable energy development and related capacity buildup will contribute to a very stable and secure power supply, as well as to serve as the adequate hedge, so to speak, you know, against the power tariff inflation, if any, in the future.
For the company going forward, our energy sided geographical deployment will continue and present will continue to be our cornerstone and we believe our long term commitment to renewable energy development and related capacity build up while contributing to a very stable and secure power supply as well.
As to serve as the adequate hedge.
So just speaking against the power terrific inflation, if any in the future.
Are you.
Thank you. Our next question comes from Chi Chow from Citigroup. Please ask your question.
Speaker 1: Thank you. Our next question comes from Kaifeng Jia from Citix. Please, that's your question.
Sure.
Speaker 16: Thank you very much, Mr. Guan. Congratulations to the company for achieving a very good record. I would like to ask you a question about the demand for direct pickup.
Okay.
Go ahead Tom.
Unfortunately, the COVID-19.
What did they bring you forget to ultimately the future of the R&D EMEA when you compare that to ensure that you are getting.
Speaker 16: We also learned from some public news channels that Zijie may release its own product in December . So we want to know if we can get more orders from it. In addition, I would also like to ask Guan Yicheng to share the business needs of Zijie?? in and out of Hainan that we can continue to get. So let me translate my question. So I have a question about the demand from Baidan.
With that Sean.
Based on the idea of ship or pay per mile for the completed in that mainline IHS Guaiacol franchise, you have to get help on that.
Yes in the future.
So let me translate my question. So I have a question on box with demand from Baghdad.
We see seven years, saying that by time. So every day at its own pocket Cod in December for that the lender, we can't guide to new orders from base and also kindly gave some color about the demand from <unk> in China I know Rajiv. Thank you.
Thank you this is Nick again.
Speaker 4: Thank you. This is Nick again. I'm trying to answer these questions again. If you look back our history, as Alex, I think, mentioned, our collaboration with our anchor client, Binance in particular, in the past, has been very successful. We are just becoming the ecosystem partner and will remain so.
Trying to answer these questions again.
If you look back our history.
As Alex I think mentioned our collaboration with our anchor client.
Bye bye danced in particular in the past has been very successful.
It become just becoming the ecosystem partner and will remain so.
Speaker 4: And because of our high quality delivery and operations, you know, we deliver to customers and make them happy.
And because of our high quality delivery and operations, we delivered to customers and make them happy the progress we made in overseas market this quarter I'm sorry.
Speaker 4: The progress we made in the overseas market recently is very exciting and we were confident that with our constant in-house capability build-up.
The recently is very exciting and we were confident that with our constant in house capability buildup and further deployment overseas market will be fully capable of supporting the development of our clients both within China and overseas.
Speaker 4: and further deployment in the overseas market will be fully capable of supporting the development of our clients, both within China and overseas.
Speaker 4: As far as for your question about their upcoming, the new public cloud product launch, I'm not in a position to make any comments on behavior of a customer, but all we see based on our data interaction with our key clients.
As far as for your question about there.
Upcoming the new cloud public cloud product launch.
And the position.
Any comments on behavior, our customer Budd.
All we see.
Based on our data interaction with our <unk>.
Key client.
Speaker 10: on the ongoing business as well on the forthcoming business and I think that this kind of to be in the 2C business development.
On the ongoing business as well on the forthcoming business and I think that this kind of that to be in the <unk> business development.
Speaker 4: signaling a very positive momentum and I think you know there's a very high chance you will be the beneficiary out of this.
<unk>, a very positive momentum and I think there are some very high chance, we'll be the beneficiary of this thank.
Thank you.
Speaker 1: Thank you. Our next question comes from Addison Lee from Jeffreys. Please go ahead.
Thank you next question comes from Edison Lee from Jefferies. Please go ahead.
Speaker 17: Hello, Mr. Wang. Thank you for giving me the opportunity to ask this question. My question is mainly about your domestic customers, 27 of them.
Got it.
So that she wants to add to it.
Yes sure.
Alright, what may seem total cobalt.
Versus Q2.
Speaker 17: Can you talk a little bit about whether this project is actually a power outage? And what is the difference between the current project and the power outage in this project? And in the future, because you just said that this project is a little bit different from the current model.
To come back to the shallow couple of hotels.
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Rod Hall.
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Tien <unk> CEO.
Talk to you.
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Because it sells out a little more tricky.
Speaker 17: Can you explain what are the differences in this model and what are the advantages and disadvantages of this investment plan?
Shall we say.
Well it took the most reliable foothold and hoping to go towards residential.
Sure.
Yes.
Speaker 17: So my question is mainly on the new cloud client in China. So for these two particular projects, can you tell us what are the terms?
Wonder if you share some of my question is mainly on the new client cloud client in China. So called these two particular products can you.
Told us for the <unk>.
Terms of the culture includes power and also what are there isn't a difference in the IRR with existing products.
Speaker 17: who's power and also whether there is any difference in ILR with the existing projects. And as you said earlier, it seems that the business model or the requirements of this client is somewhat different from your existing clients. So maybe.
And as you said earlier.
It seems that the business model or the requirements of this client a somewhat different.
Existing clients.
Maybe.
Maybe you can elaborate on sort of what are the differences are and what if there are any implications for the investment value of this project. Thank you.
Okay.
Speaker 4: I think to answer your questions I think at the moment because this was the one of the most recent I think development you know post Q3.
I think to answer your questions I think at the moment because this was one of the most recently.
The development.
Post Q3, so and though we are at very close stage of signing the final contract with our customers new customers. So at the moment and we're not in a position to disclose any further details, but what I can tell you he's actually.
Speaker 10: So and we are at the very close stage of signing the final contract with our customers, new customers. So at the moment, we're not in a position to disclose any further detail. But what I can tell you is actually, you know, if you remember back in the first half of this year, we signed a framework agreement with this particular new customer.
If you remember back in the first half of this year, we signed a framework agreement with this particular, new customer and at that time, we said that the reason for the signing was because our credentials on the energy side deployments.
Speaker 10: and at that time we said that the reason for the signing was because our credentials
Speaker 10: on energy side deployments, you know, and all our operating efficiencies and our very lower than average cost advantage we have. And obviously, this is all accomplished, you know, recently, I think, exactly due to these reasons.
And all of our operating efficiencies and our lower than average cost advantage, we have and always this was all accomplished.
Recently.
Exactly due to these reasons so in a matter of the cooperation model asset is customer customization.
Speaker 4: So in a matter of the cooperation model, as I said, it's a customer customization models. The project gonna be located in one of our northern places. We currently operate in our hyperscale project and one is another Northern China locations. You know, for other details, please looking at the further public disclosure by the company. Thank you.
Models.
<unk> going to be located in.
One of our more than places we currently operating a Hyperscale project and one is another northern China locations.
For other details I'm pleased looking at the at the other public disclosure by the company. Thank you.
Yeah.
Thank you. Our next question comes from Yang Liu from Morgan Stanley . Please ask your question.
Thank you. Our next question comes from Yang Liu from Morgan Stanley. Please ask your question.
Thanks for the opportunity to ask another question.
Thanks for the after.
Option to ask another question.
Oh, we're staying on top of a range I'll finally, Joseph shall range accounting for the change.
I will answer that.
So that you can kind of try and Shanghai Pudong Jodi Andre just shy of Portola had started.
We noticed that in the offshore bond market, there is big volatility and I would like to hear the management comment on what is the status and what will be the next step in the debt financing.
Now comes to churn.
So Jacob P&G issue.
Refinance or pushed.
Michel Morin Joseph J T.
Let's see how about.
The question is about the debt financing or I noticed that in the.
Offshore borrowing markup.
Alright.
Volatility.
And.
I would like to hear the management's comments.
What is the status and what will be the next step in the debt financing.
Thank you.
Okay. Thank you Julia.
Thank you, Luyang. Actually, first of all, we have sufficient financing liquidity and a very healthy leverage profile. As we can see by the end of this quarter, the company has RMB 6.1 billion cash and the cash equivalents at hand.
Actually first of all we have sufficient finance financing liquidity and a very healthy leverage profile.
As we can see by the end of this quarter. The company has RMB six 1 billion cash and cash equivalents at hand.
And in contrast to our debt balance, which is around RMB 5.5 billion, together with some short-term investment, we have a negative net debt, which is net cash position of RMB 782 million. Also, we have cash flow from operations, which is around RMB 288 this quarter.
In contrast to oven that balanced which is around RMB five 5 billion together with some short term investment we have a negative net debt, which is net cash position of RMB 782 million.
Also we have cash flow accretion from.
Accretion.
Which is around RMB 288 this quarter.
So besides this, on the slide we just reviewed that by the end of this quarter, the company total debt to total capital ratio is only 35.4%, which are very low, very low compared with the industry level and they leave us more room for debt or debt-like financing.
Besides me.
On the slide we just are reviewed by the end of this quarter. The company total debt to total capital issue ratio is only 35, 4% which are very low.
Hello, comparatively as the industry level, and then leave us more room for that or that lack of financing.
With regards to the financing progress, the rating agencies have reaffirmed the rating this quarter with a triple B minus investment grade. And this allow us with more financing options in both public and private market. On daily operations, it is very regular and a consistent practice that we have bank loans at project level, both domestic and for overseas projects.
With regards to the financing progress.
Yes.
The rating agencies have reaffirmed the region this quarter with Triple B minus investment grade and this allow us with more financing options in both public and private market.
Really appreciate.
It is very regular consistent practice that we have bank loans at the project level.
Domestic agenda for oversea projects.
along with the development of projects. And at the same time, we are also looking into private financing options recently. Thank you.
Along with the development of projects and at the same time. We are also looking into a private financing options recently thank you.
Thank you. Our next question comes from Tina Ho from Goldman Sachs. Please ask your question.
Thank you. Our next question comes from Tina.
Goldman Sachs. Please ask a question.
Thank you very much for the opportunity to ask the second question. The question is, the management team just mentioned that we are now in a state of cash. The cash on the account is very sufficient. I would like to ask, our team is mainly in China.
Great.
Thank you guys.
Yes.
When T J.
Sure.
Sure Jacob.
Sweet.
Hi, gentlemen, thank you should we not totally sure isn't really that that language I'm sure Josh at that point it will come.
Because we saw that in Thailand, there was an acquisition. So we want to ask, in the domestic market, what is the company's view on the acquisition? Because we see that different companies in the same industry may be accelerating their acquisition projects. But there may be other companies that are slowing down and not making any acquisitions. So I would like to ask the company's view on this.
Sure sure.
This is.
To ensure that J code.
Yes.
Yes.
Colonial.
I just don't have the struggle.
Michelle Moore Zaslow.
Okay.
Sure Josh.
Got it.
Sure.
Okay.
Um, so my 2nd question, thanks very much for the opportunity again, and regarding.
So.
Second question, Thanks, very much for the opportunity again.
Regarding.
M&A, our company's view on M&A, because as management just mentioned, you have actually very abundant cash and that cash position on your balance sheet. So
The M&A.
Companies view on M&A, because as management just mentioned you have actually very abundant cash our net cash position on your balance sheet. So.
wondering what's your view specifically in the Chinese M&A market. As we saw, some of our peers are accelerating their M&As while others are actually limiting and not doing any M&As at this stage. So what's Team Data's view on potential M&As?
I'm wondering what's your view specifically in the Chinese.
M&A market as we saw some of our peers are accelerating there.
M&A.
While others are actually limiting and not doing any M&A at this stage, though.
Jim data.
Potential M&A. Thanks.
Our view on the potential of this is Nick Franco teed up for the questions I'll review on the <unk>.
Our view on the potential, this is Nick, thank you Tina for the questions, our view on the merger acquisition, we think that's also one of the company's strategy in a very supplementary way. We will, our principal strategy is still going to be the full stack hyperscale greenfield development plus operation model, but we're looking at some interesting opportunity in merger acquisition both in China and overseas at the same time.
Merger acquisition, we think Thats also one of the companies.
<unk> and <unk>.
Various supplementary way, we will our principal strategy is still going to beat the horse dead.
Hyperscale Greenfield development, plus operational model, but we're looking at.
Some interesting opportunity emerge acquisition, both in China and overseas at the same time essentially.
But we stick to a very, very, very stringent, sometimes too stringent principle on the potential merger acquisition opportunities. And we actually stick to several criterias. We hope that, but whether, but even say we acquire a certain asset, we hope that we can provide our unique, you know, the in-house capability, which can allow us to add value to this targeted asset once we take.
We stick to a very very screened in the past, sometimes too stringent principal on the potential merger acquisition opportunities and we actually stick to several criteria we hope.
Weather, but even say we acquired certain assets, we hope that we can provide our unique.
In house capability, which can allow us to add value to these targeted assets. Once we take hold okay. So but at the time of making this a merger acquisition. We are looking for synergies with the company in.
So, but at a time of making this emerging acquisition, we are looking for synergies with the company in geography, client base, and resource of the potential target of assets. And we look for, obviously, the reasonable.
In geography.
Client base and resource of the potential target old asset at assets and we look for obviously, the reasonable valuation and I want to emphasize that both the future business plan and the multiple and the valuation multiple for these kind of potential targeted asset or company, both in China and <unk>.
And I want to emphasize that both the future business plan and the multiple, and the evaluation multiple for these kinds of potential targeted assets or companies, both in China and overseas, must be reasonable in the eyes of Qingdata. That's actually very important for us to put it through. We will not do the merger acquisition simply for the sake of merger acquisition itself.
Overseas must be reasonably reasonable in the eyes of gene data.
That's actually very important was to pull the trigger we want we will not do the merger acquisition simply for the sake of merger acquisition itself and also given the.
and also given the more and more emphasize.
Oh.
More and more emphasize on the operating efficiencies and most importantly on a renewable power and power on a supply side and demand side as more and more I think that the demand is going to be driven by the big computing and.
on the operating efficiency and most importantly on the renewable power and power on the supply side. On the demand side, it's more and more I think that the demand is going to be driven by the big computing and the tech and internet clients.
Tech and Internet clients.
And we think that given the current competitive landscape, ever-increasing competitive landscape around tier one city in China, there will be some consolidation, you know, the window open up for China data, even we stick to a very stringent, you know, the merger acquisition principles.
We think that that given the current competitive landscape ever increasing from Atlanta escape around tier one city in China.
Be some consolidation.
To open our own chimp data, even we stick to our very stringent.
Merge acquisition principles. Thank you.
Right, thank you. Our next question comes from Edison Lee from Jefferies. Please ask a question.
Alright. Thank you. Our next question comes from Edison Lee from Jefferies. Please ask your question.
Hello, I have a question about capital investment. Can you tell us if there has been any changes in this year's capital investment?
Yeah.
The Olympics is quite unique.
Okay.
Thank you Alicia senior executive.
So the team that way okay.
Got you and lastly from me. So my question is about Capex just wanted to get an idea as to what are the capex guidance. This year of $5 6 billion Thats changed and what's the outlook for next year.
So my question is about CADx. I just want to get an idea as to what are the CADx guidance this year of five to six billion has changed and what's the outlook for next?
Yes.
Thank you. So far, we incurred RMB around 1.4 billion for CapEx for this quarter. And on a 12-month basis, last 12-month CapEx by end of this quarter was around RMB 3.6 billion. This is generally in line with our full-year CapEx expenditure forecast.
Thank you.
So far we incurred RMB around.
One 4 billion Capex for this quarter and on.
Tough months basis last 12 months Capex by end of this quarter was around RMB.
$3 6 billion. This is generally in line with our full year Capex expenditure forecasts.
For the next year, you can see that the majority of the under construction assets are to be delivered gradually. And besides this, today we also announced three new project orders or pipelines. And we expect next year's CAPEX investment will be somewhat higher than this year to support this solid business opportunities and the region expansions and the project delivery. Thank you.
For the next year, you can see that the majority of the under construction as yet to be delivered a gradually and besides this today. We also announced three new projects are there is a pipeline.
And then we expect next year's Capex investment will be somewhat higher than this year to support this solid business opportunities in the region expansion and the project delivery.
Yes.
All right. Thank you. There are no further questions at this time. I'll turn the call back to the management team for their closing remarks.
Alright. Thank you there are no further questions at this time I will turn the call back to management team for closing remarks.
And thank you for the investment community and all the analysts and for the public to pay your attention to ChinData. I want to emphasize that once more, that's probably going to be the regular remark I made every quarterly earnings call, that our belief in IDC is a little bit unique and different from most of the peers.
And thank you for the investment community and all the analysts and therefore, the public can pay your attention to two data.
I want to emphasize once more that is.
Probably going to be the regular remark I made every quarterly earnings call that our belief in <unk> is a little bit unique and different from a lot of most of our peers. We believe the industry is nature is held will find most of the most efficient way.
We believe the industry's nature is how to find the most efficient way to convert electric power and in the future going to be renewable electric power to computing power. And we just treat ourselves more like an infrastructure service provider than simply an IDC, the hosting service provider. So, therefore, we're going to stick to this strategy and we'll make a perfect execution along the way. Thank you.
To convert it.
<unk> power and in the future is going to be a renewable electric power grid computing power and we just treat ourselves more like a infrastructure service provider lens can play a IDC hosting service provider. So therefore now we are going to stick to this business strategy.
And we will make a perfect execution along the way. Thank you.
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect your lines.
Ladies and gentlemen that does conclude our conference for today. Thank you for participating.
May all disconnect your lines.
Okay.
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No.
Good morning and good evening, ladies and gentlemen. Thank you, and welcome to Gene Data Group Holdings Limited's third quarter 2021 earnings conference call.
Good morning, and good evening, ladies and gentlemen, Thank you and welcome to change data Group Holdings Limited third quarter 2021 earnings Conference call.
We will be hosting our question and answer session after management's prepared remarks.
We will be hosting a question and answer session. After management's prepared remarks.
Please note today's event is being recorded. And I'd like to turn the call over to our first speaker today, Mr. Don Cho from Investor Relations of Chin Data Group. Please go ahead, Don.
Please note today's event is being recorded and.
I'd now like to turn the call over to your first speaker today, Mr. Don Zhou from Investor Relations auction data group. Please go ahead dawn.
Thank you operator Hello.
Thank you, Operator. Hello, everyone. Welcome to ChainLadies 2021 Third Quarter Earnings Conference Call. This is Don from Investor Relations team of the company.
Hello, everyone welcome to <unk> 2021 third quarter earnings Conference call. This is Don from Investor Relations team of the company.
With us today are Mr. Alex Zhu, our Founder and CEO , Mr. Nick Wong, our CFO , and Ms. Zoe Zhang, our Finance Vice President.
With us today are Mr. Alex are found in a deal.
Well, our CFO and there's always draw a finance vice president.
Alex will be delivering an opening remark at the beginning. Nick will take you through the quarterly review of our operation performance. And Zoe will present our financial results.
Alex Let me delivering an opening remark at the beginning Nick will take you through the quarterly review of our operational performance and lower <unk>, who will present, our financial results.
Alex, Nick, and Zoe will be here to answer your questions afterwards. Now I will quickly.
Alex Nick and Zoe will be here to answer your questions afterwards.
Now I'll quickly go over the Safe Harbor.
Some of the statements that we make today regarding our business, operations, and financial performance may be considered overlooked.
I don't know that we make today regarding our business operations and financial performance may be considered forward looking.
and such statements involve a number of risks and uncertainties that could cause actual results to differ materially.
Such 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 filings with the SEC.
For more information please refer to the risk factors discussed in our filings with the SEC.
During this call, we will present both GAAP and non-GAAP financial metrics.
During this call we will present, both GAAP and non-GAAP financial measures.
A reconciliation of non-cap-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.chaindatagroup.com.
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 <unk>.
That's our relations website located at investors <unk> com.
We have also updated our quarterly presentation on the company's investor relations website, which you can refer to as a supplementary material for today's call.
We have also updated our quarterly presentation on the company's Investor Relations website, which you can refer to as a supplementary materials for today's call.
Without further ado, I will now turn over the call to Alex Chu, our founder and CEO .
Without further Ado I'll now turn the call up with adequate G.
As CEO.
Welcome to the night party of this season.
My ankle weights and.
Well then thank you the duplicate.
I am very happy to see that after the IPO, the company has gone through four complete quarters of simulation and submitted an excellent answer sheet for its ability to build.
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Let's go to Ethan Bellamy Tien tsin.
Yeah.
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We have made major breakthroughs by building a prefabricated data center, developing and manufacturing, and integrating industrial chain exports.
to make the super-large-scale infrastructure, low-cost solution, cross-border delivery a reality.
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This is Nick. Thank you, Alex, for opening remarks. I will first translate Alex's remarks into English.
This is Nick thank.
Thank you Alex while opening remark I will first translate Alex remarks into English.
Four quarters have passed since the IPO of the company.
Four quarters have passed since the IPO of the company.
With our relentless efforts, we are pleased to see the solid results and capacity build up for the company through Chennai, India chip industry and empower.
With our relentless efforts, we are pleased to see the solid results in capacity built up for the company through Chin Idea, Chin Industry, and Chin Power.
With Chinidea's in-house R&D on critical technologies, we have achieved significant progress in the pursuit of Whitebox model solution for computing infrastructure.
With 10 ideas in house R&D critics.
Critical technologies, we have achieved significant progress in the pursuit of White box model solution for computing infrastructure.
With Chin Industries breakthrough in self-developed precast container data center modules and a further integrated supply chain, cost efficient cross-border delivery of total solution for hyperscale data center infrastructure was made possible.
With <unk> industries breakthrough in self develop precast container datacenter modules and a further integrated supply chain cost efficient cross border delivery of total solution or Hyperscale data center infrastructure was made possible.
With the rapid realization of the new industrial scenario by Chin Power, we have been effectively supporting the sustainable development of our anchor clients and the consumption of green energy in scale.
With the rapid realization of our new industrial scenario by chip power, we have been effectively supporting the sustainable development of our anchor clients and consumption of Green energy in scale.
With these core capabilities as cornerstones chimp data has overcome the obstacles technologies cross border human resources and logistic arrangement brought by the pandemic situation.
With these core capabilities as cornerstones, Chin Data has overcome the obstacles on technologies, cross-border human resources, and logistic arrangements brought by the pandemic situation.
Our performance was outstanding as we keep on promoting industry upgrade with our industrial pilot project.
Our performance was outstanding.
As we keep on promoting industry operate with our industrial pilot projects.
propelling business growth with research and development efforts and enhancing our comprehensive financial performance with our full stack hyperscale model.
Propelling business grows with research and development efforts and enhancing our comprehensive financial performance with our full stack Hyperscale model.
It is in Qingdata's firm belief that as long as we keep our original base, adhere to our capacity build-up strategy, stay focused on tackling difficulties, and remain committed to the long-term value developments, we will achieve further with the Hyperscale Greenfield Model, and to effectively support our key clients along their rapid expansion and zero-carbon transformation in the Asia-Pacific emerging market.
Yes.
It is in June data as a firm belief that as long as we keep our original phase adhere to our capacity build up strategy stay focused on tackling difficulties and remain committed to the long term value developments. We will achieve further was the hyperscale greenfield model and to effectively.
To support our key clients along their rapid expansion and zero carbon trust transformation in Asia Pacific emerging market.
No.
On behavioral company, let's take a look at the key highlights for the third quarter of 2021 on page four of the slide.
On behavioral company, let's take a look at the key highlights for the third quarter of 2021.
On page four of the slide.
Our business is maintaining its healthy momentum.
Our business is maintaining its healthy momentum.
Total IT capacity in service by end of the quarter was 370 megawatts.
Total <unk> capacity in service by end of the quarter was 370 megawatts a.
a nine megawatt increase compared to the previous quarter.
A nine megawatts increased compared to the previous quarter.
as we were swiftly responding to our clients' customized and new demands such as high-density development deployments.
As we worked swiftly responding to our clients' customized and new demand.
Such as high density development deployment.
Total capacity by quarter end was 588 megawatts.
Total IT capacity by quarter end was 588 megawatts.
Steady ramp up continued.
<unk> utilized capacity increased by 17 megawatts over the quarter to 268 megawatts.
Utilization ratio remains stable at 72%.
Utilization ratio remained stable at 72%.
Financial growth momentum continued with very healthy profitability.
Financial growth momentum continued with very healthy profitability.
quarterly revenue increased by 59% year over year to RMB 740.8 million.
Quarterly revenue increased by 15, 9% year over year to RMB $748 million.
Gap based on net income was RMB 78.4 million and stayed positive for three straight quarters with a 10.6% net margin.
GAAP based net income was RMB $78 4 million.
Stayed positive for three straight quarters with a 10, 6% net margin.
which we believe is among the best performers in the industry.
Which we believe is among the best performance in the industry.
Adjusted EBITDA was RMB 368.4 million, indicating a year-over-year increase of 61.6 percent, with the margin remaining in the high 40s at 49.7 percent.
Adjusted EBITDA was RMB $368 4 million, indicating a year over year increase of 61, 6%, which the margin remaining in the high forties at 49, 7%.
Meanwhile, such solid fundamentals and prospect for business were again recognized by the rating agency.
Meanwhile, such solid fundamentals and prospects for business were again recognized by the rating agencies.
such as Fitch, reaffirmed its BBB-investment rating for the company in late October , despite the evolving headlines in the macro environment.
Such as Fitch.
Reaffirm its triple B minus investment grade rating for the company in late October.
Spike that you Bobby headlines in the macro environment.
Our capacity built up and the sustainable development, our total number of approved and pending patents increased by 12 percent over the quarter to 268.
Our capacity build up and the sustainable development, our total number of approved and pending patents increased by 12% over the quarter to 268 <unk>.
energy efficiency of our data centers remain outstanding with our year-to-date average PUE by end of third quarter at 1.21 compared to 1.22 in full year 2020.
Energy efficiency of our data centers remain outstanding with our year to date average PV by end of the third quarter at one point to one <unk>.
Compared to a one to two in full year 2020.
Our year-to-date total power consumption was 1,215 million kilowatts-hours.
Our year to date total power consumption was 1200 15 million kilowatts hours.
On slide five, with great pleasure, we would like to share with the market the exciting progress we are making in client diversification and overseas business development. On client diversification, our constant effort is yielding solid results.
On slide five with great pleasure, we will like to share with the market the exciting progress, we're making in client diversification and overseas business development.
On client diversification, our constant effort is yielding solid results.
In China, breakthrough was achieved as the company recently won the bidding and received a confirmed demand of 27 megawatts capacity from a leading Chinese cloud computing service provider.
In China breakthrough was achieved as the company recently won the bidding and have received a confirm demand up 27 megawatts capacity from a leading Chinese cloud computing service provider.
On overseas to development, our Hyperscale Greenfield development model in Asia Pacific emerging market is advancing.
on overseas development. Our hyperscale greenfield development model in the Asia-Pacific emerging market is advancing.
In Malaysia, the company has signed contracts with land owners and launched a new greenfield project seeded in Johor State.
In Malaysia. The company has signed contract with land owner and have launched a new Greenfield project ceded and Joe Hoss State.
The new project, expected to be a built-to-suit hyperscale data center and implemented with the newly innovated high-efficiency cooling technology, has received an MOU capacity of over 80 megawatts and is to be delivered to our anchor client in several phases starting from 2022.
The new project expected to be a build to suit hyperscale datacenter and implemented was the newly innovated high efficiency cooling technology has received Mou capacity of over 80 Mega.
Megawatt and it has to be delivered to our anchor client in several phases starting from 2022.
Importantly, our consistent build up in research and development of our core technology.
Importantly, our consistent build-up in research and development of core technology will effectively support the export of our integrated prefabricated data center modules for this project.
<unk> support the export of our integrated prefabricated datacenter modules for this product.
We have also initiated our expansion plan and tightened market.
We have also initiated our expansion plan in Thailand.
Currently, the company is close to finalizing a business acquisition in Bangkok.
Currently the company is close to finalizing a business acquisition in Bangkok.
The project, upon completion of technical upgrade, will be hosting a 5-megawatt IT capacity and capable of supporting key clients' business development in Southeast Asia.
Project upon completion of technical upgrade will be hosting a five megawatts capacity and capable of supporting key clients business development in South East Asia.
For our existing business on page six, we are maintaining the healthy momentum.
For our existing business on page six we are maintaining the healthy momentum.
We added around nine megawatts in service capacity in a quarter.
We added around nine megawatts in service capacity in the quarter.
As we were swiftly responding to the updated and new demand of clients in several data centers Such as for their high
As we worked swiftly responding to the updated and new demand of clients and several data centers.
Such as their high density deployment.
Utilized capacity increased by 17 percent in a quarter.
Utilize the capacity increased by 17% in <unk>.
Quarter.
contributed by the steady ramp-up in product CN06, CN08, CN09, CN11-A, and CN11-B in northern China. Meanwhile, we added 16 megawatts of contracted capacity as a result of the indication by interest capacity conversion of the existing project such as CN12 and CN13.
Contributed by the steady ramp up in product <unk> and 0608 <unk> zero nine.
11, slash, a and C and 11th stash be in northern China mingle.
Meanwhile, we added 16 megawatts of contracted capacity as a result of the indication of my interest capacity conversion of the existing project such as seat in 12 and 13.
There's an overview of our asset on page 7 and 8.
As an overview of our assets on page seven and eight.
By end of quarter, we are having a total of 588 megawatts of IT capacity.
End of quarter, we are having a total of 588 megawatts of it capacity.
among which 15 data centers or 370 megawatts is in service and 9 data centers or 218 megawatts is under construction.
Long, which 15 data centers or 370 megawatts is in service.
Nine data centers or 218 megawatt is under construction.
According to the timeline as shown in the table, all the 218 megawatts under construction capacity shall be put in service in 2022.
According to the timeline as shown in the table order 218 megawatts under construction capacity she'll be put in service in 2022.
On client commitment remains high.
Total indication of my interest and contracted capacity add up to 493 megawatts, indicating a contracted and indication of my interest ratio of 84%.
Total indications on my interest in contracted capacity at up to 493 megawatts, indicating a contracted and indication of interest ratio of 84%.
For the in-service capacity, contracted ratio is 88%.
For the in service capacity contracted ratio is 88%.
Our utilization is healthy.
By the end of the third quarter, total utilized capacity is 268 megawatts, indicating a utilization ratio of 72%.
By the end of the third quarter total utilized capacity is 268 megawatts.
Indicating a utilization ratio of 72%.
Now, let's dive into our capability building, which was briefly touched all Paul in our opening remark.
Now, let's dive into our capability building, which was briefly touched upon in our opening remarks.
Our capability built up through the establishment of ChinPower, ChinIdea, and ChinIndustry has made solid progress so far.
Our capability build up through the establishment of Chimp power, Chennai, India, and China Ministry has made solid progress so far.
Chin Power, aiming to be the leader driving China's IDC industry into zero carbon era.
Jim power aiming to be the leader driving China's IDC industry into zero carbon era.
has been effectively supporting the sustainable development of our anchor clients and consumption of green energy in scale under the rapid realization of the new industrial scenario.
Has it been effectively supporting the sustainable development of our anchor clients and consumption of Green energy in scale and in a rapid realization of the new industrial scenario.
To date, we have established a green power consumption ecosystem, consisting of four major initiatives, including direct green power trading innovative regional green power consumption in Canada.
To date, we have established a green power consumption ecosystem, consisting of four major initiatives, including direct green power trading, innovative regional green power consumption mechanisms,
development of renewable energy power stations, and development of integrated power generation grid load storage products.
Development of renewable energy power stations and developments of integrated power generation rate low storage products.
In September China launched its first nationwide Green power transaction with a total of 259 participating domestic Chinese entities and a total transaction volume of 793 5 billion kilowatts hour.
In September , China launched its first nationwide green power transaction with a total of 259 participating domestic Chinese entities and a total transaction volume of 7.935 billion kilowatts
Among the first movers nationwide, and as the largest buyer of green power in the digital infrastructure industry, we completed a transaction of 100 million kilowatt hours, contributing to 1.26 percent of the entire nation's inaugural gross transaction value.
And our first movers nationwide and as the largest buyer of green power individually digital infrastructure industry. We completed the transaction of 100 million kilowatt hours.
Contributing to a $1 two 6% of the entire nations in bulk grill gross transaction value.
Through regional green power consumption mechanism, we have consumed in total 440 million kilowatts hour of green power in the past four years.
Through original Green power consumption because of them, we have consumed in total 440 million kilowatts hour of Green power and the past four years.
For the development of renewable energy power station, we have signed today 1.05 gigawatts of wind and solar energy development agreement, which is expected to providing 1.2 billion kilowatts green power annually upon completion. Chinnaidea.
For the development of renewable energy power station, we have signed to date 1.05, Gigawatts of wind and solar energy development agreement, which is expected to providing $1 2 billion kilowatts Green power annually upon completion.
Chennai, India together with industry.
by leveraging on our patent and technology reserve has made significant breakthrough in white box model solution for computing infrastructure.
By leveraging our patents and technology reserve has made significant breakthrough in white box model solution for computing infrastructure self develop prefabricated datacenter modules and export of integrated supply chain so far.
self-developed prefabricated data center modules, and export of integrated supply chain so far.
We believe that such pre-fabrication of productized equipment, productized engineering, and productized buildings or data center is improving the coordination and efficiency of our development and construction, which will therefore create a more stable supply chain system that will effectively safeguard our hyperscale greenfield project development and delivery in Asia-Pacific emerging market, even with concurrent delivery of
We believe that such pre fabrication product.
<unk> equipment harmonized engineering and personalized.
Buildings for data center is improving.
Automation and efficiency of our development and construction, which will therefore create a more stable supply chain system that will work effectively safeguard our hyperscale Greenfield project development and delivery in Asia Pacific emerging market.
Even with concurrent delivery of multiple projects.
Such will further contribute to the establishment of hyper-scale computing infrastructure cluster in the region and support the regional business of our client.
Such will further contribute to the establishment of Hyperscale computing infrastructure cluster in the region and support the regional business of our clients.
Now let's turn to some other recent development of the company on slide 12. Our solid fundamentals and business prospect are reaffirmed by renowned credit agencies despite recent evolving headlines of the macro environment as Fitch is maintaining their investment rate BBB minus issuers rating with a stable outlook on a company according to their late October news release.
Now, let's turn to some other recent developments of the company on slide 12.
Our solid fundamentals and the business prospects.
Reaffirm by renowned credit agency, despite our recent evolving headlines of the macro environment.
Fitch is maintaining the investment grade triple B minus issuers rating with a stable outlook on our company.
According to their late October news release.
As quoted.
Chimp data group holding limited.
Credit profile will remain solid.
supported by the strategic location of its data centers, use of renewable energy, and adequate rating headrooms, despite a vacuum power shortage and potential electricity tariff hikes in China.
Supported by our strategic location, albeit to data centers.
<unk> of renewable energy and adequate weighting headphones.
By the acute vacuum power shortage and potential electricity to reap hikes in China.
Meanwhile, during the third quarter, we continued our active exploration of ESD development, improved our alignment with international standards, and garnered additional public endorsement for our efforts.
Meanwhile, during the third quarter, we continued our active exploration of ESG development improved our alignment with international standards and garner additional public endorsement for our efforts.
In September 2021, the company formally became a corporate member of the United Nations Global Compact, which is the world's largest corporate sustainability initiative with more than 13,000 supportive institutional and corporate members from more than 170 countries.
In September 2021, the company formally became a corporate member of the United Nations Global compact, which is the world's largest corporate sustainability initiatives with more than 13000 supportive institutional and corporate members for more than 170 countries.
As the first AIPAC Digital Infrastructure Corporate member of such organization, the company will collaborate with fellow constituents to help build United Nations SDGs and promote a shared global vision.
As the first APAC digital infrastructure corporate member of such organization. The company will collaborate with fellow constituting to help build that United Nations Stds and promote a shared global vision.
Also in September 2021, the company joined the RE100 initiative, which is a global renewable energy initiative jointly launched by the Climate Group and the Carbon Disclosure Project's Global Environmental Information Research Center.
Also in September 2021, the company joined the R&D 100 initiative, which is a global renewable energy initiatives jointly launched by the climate group and carbon disclosure project Global Environmental inflammation Research Center to.
to accelerate and scale the efforts of reaching the zero carbon energy consumption goal.
To accelerate and scale the effort of reaching to zero carbon energy consumption goal.
The RE100 has drawn hundreds of influential businesses around the world into the commitment of utilizing 100% renewable energy.
The <unk> hundred has drawn hundreds of influential business around the world into the commitment of utilizing 100% renewable energy.
At the same time, we further extended our green development goals by announcing the 2040 100% plan.
At the same time, we further extended our green development goals by announcing the 2041 represent plant.
Enter the plant all of the company's next generation Hyperscale data centers around the globe, while we powered one represent with renewable energy solutions by 2040.
Under the plan, all of the company's next generation hyperscale data centers around the globe will be powered 100% with renewable energy solutions by 2040, thus facilitating China's low-carbon development effort and helping fulfill the goal of reaching peak emissions by 2030 and carbon neutrality by 2060 in China.
Thus facilitating chinas low carbon development effort and helping will fill the goal of reaching peak emissions by 2030 and carbon neutrality by 2016 in China.
With all our long-term commitment to SEFG, Chin Data Group is garnering additional public endorsement.
Which all our long term commitment with ESG.
<unk> data group is garden, garnering additional public endorsement.
The company won the highest accolade in the best ESG initiative category in a prestigious 17 Global Career Awards that took place on 21st October , thus becoming the first computing infrastructure company in the Asia Pacific region to receive such honor.
The company won the highest accolade in the best ESG initiative category in a prestigious 17 global career awards that took place on 21 October thus, becoming the first computing infrastructure company in the Asia Pacific region to receive such honor.
As a top Hubbard scale computing infrastructure enterprise. The company is widely acknowledged for its leadership, among APAC, especially emerging market APAC companies exploring participating and the scaling up carbon neutrality initiative as well as managing ESG initiatives.
As a top hyperscale computing infrastructure enterprise, the company is widely acknowledged for its leadership among APAC, especially emerging market APAC companies in exploring, participating, and scaling up carbon neutrality initiative, as well as managing ESG initiative.
Policy update on slide 13 seven.
Several central government papers were issued in the past few months offering further insights on the past and objectives of national carbon neutrality.
Several of central government cheaper or issued in the past few months.
<unk> further insights on the past and our objectives of national carbon neutrality.
State Council published working guidance for carbon dioxide, peaking in the carbon neutrality in full and faithful implementation of the new development philosophy.
State council published working guidance for carbon dioxide peaking and the carbon neutrality in full and faithful implementation of the new development philosophy.
and noticed by the State Council of the Action Plan for Carbon Dioxide peaking before 2030 in September and October , respectively.
And noticed by the state Council of the action plan for carbon dioxide, peaking before 'twenty three.
In September and October respectively.
which further emphasized the expectation for improved geographical layout, energy consumption monitoring and management, and energy efficiency, etc.
Further emphasize the expectation for improved geographical layout energy consumption monitoring and management.
Energy efficiency et cetera.
The data center industry.
These key focuses have been elaborated on in the data center policies issued by Ministry of Industry and Information Technology, or MIIT, and National Development and Reform Committee, or NDRC, earlier this year.
These key focuses has been elaborated in.
In the data center policies issued by Ministry of.
Industry and information technology.
It.
And National Development, and Reform Committee and DRC earlier this year.
On a power issue, following NDRC's publishment of the notice on further deepening the market-oriented reform for the non-grade price of coal-fired power generation in October , that stipulated a wider range of variation for on-grade price. A number of provinces have seen on-grade price increase by 20 percent.
On a power issue.
In India <unk> publish.
The notice on further deepening the market oriented reform for the non grid price of coal fired power generation in October in October thus stimulated a wider range of variation for on grid price.
A number of provinces.
On grid price increase by 20%.
The power shortage issue, thanks to the serious action taken, has been mitigated according to National Energy Bureau's press release in early November . For the company, the impact of power issue on our recent operation has been very limited, next to zero. And we believe our layout for deployment in energy-abundant regions has been a key contributor.
The power shortage issue. Thanks to the serious action taken has been mitigated according to a national energy bureaus press release in early November.
For the company the impact of power issue on our recent operation.
Been very limited next to zero.
And we believe our layout or deployment in energy are bound regions have been a key contributor.
With that, I conclude our operational overview. I will now turn over the call to Zoe to go through our financial details for the third quarter. Zoe, please.
With that I conclude our operational overview I will now turn it over the call to <unk> to go through our financial details for the third quarter.
Lease.
Thank you Amit now turning to slide 15, we increased.
Now turning to slide 15, we increase our utilizer capacity and the growth revenue. In quarter three, total revenue grew by 7.9 percent quarter over quarter of 68.5 percent year over year to RMB 740.8 million.
The capacity in the group.
In quarter two.
Total revenue grew by nine.
9%.
Oh excellent climbed 5% year over year to RMB 348, meaning utilize the capacity increased to 268 megawatts by quickly.
Utilized capacity increased to 268 megawatts by quarter end compared with 175 megawatts in the same quarter last year, indicating a 53.3% year-over-year growth.
Yes.
275 megawatt in the quarter last year.
83.
Three 3% year over year growth.
For our cost and expense structure, our prudent cost control efforts enabled us to keep our core expenses and the cost per percentage within stable range while continuing to grow our adjusted EBITDA and adjusted net income.
Our cost and expense structure.
<unk>, our current energy cost.
We enable that to be to keep our colleagues.
And the cost per percentage remains stable remains one.
<unk> continuing to grow our adjusted EBITDA and adjusted net income.
Looking into the details, cost and expense items on slide 16, utility costs made up around 27% of revenue in the last two quarters, with a historical range of 25% to 28%. Maintenance and other costs took around 10% to 12%, and adjusted FG&A took around 12% to 14%.
Going into the detailed cost savings.
I can.
Slide 16.
Data readouts around the mechanics of revenue in the last two quarters with our historical range of.
<unk> five <unk> per day.
<unk> and other costs to come around.
That percent and adjusted SG&A to around.
14%.
Take a closer look at our strong and stable profitability on slide 17. Adjusted EBITDA in the third quarter increased 61.6% year-over-year or 8.8% quarter-over-quarter to RMB 368.4 million with a margin of 49.7%.
Hey, guys.
Our strong and stable profitability.
17, okay.
Adjusted EBITDA in the second quarter increased 18, 1%.
Yes over here.
Our eight 8% quarter over quarter to RMB 368, I'm sorry.
Michael.
49, 7% adjusted.
Adjusted net income increased 132.2% year-over-year to RMB 112 million. Adjusted net margin for the quarter was 15.1%. Details in the gap to non-gap reconciliation on EBITDA and net income would be available in our 6K filing or the appendix in our IRPPT.
Adjusted net income increased 132, 2% year over.
Over year to RMB 100 itself, meaning Jeff.
GAAP net margin for the quarter was 15, 1%.
Detailed in the GAAP to non-GAAP reconciliation included in net income would be available.
Finally, other pending IR ppt.
Now, let's take a look at our cash and debt position.
Now, let's take a look at our cash and debt position.
and our CAPEX on slide 18. CAPEX in the third quarter was RMB 1.4 billion.
And our Capex on slide 18 Capex.
In the third quarter was RMB one one.
One 4 billion.
compared with RMB 526.2 million in the second quarter, and RMB 654.5 million in the first quarter.
Parody with RMB 576, clinker, meaning in the second quarter.
In RMB.
Defalco inspired many in this last quarter.
We incurred great capex in the third quarter as we continue to work in our business expansion to meet increased demand from our customers by investing more capital into our under-construction data centers, especially CN11, CN13, CN15, BBY01, and Xcode.
We incurred greater Capex in this third quarter as we continue to work in our business.
It does.
Right.
Our customer.
It's been more capital into our under construction data.
Especially now.
And 13.
Jean <unk> will run on Epipen.
This capital expenditure spending today ensure the capital company's future ability to serve our customers and shows our confidence in future business growth.
This capital expenditure spend will.
To ensure the company future ability to serve our customers and Michelle Gaba competent at future business growth.
On a 12-month basis, last 12-months' CATx by end of the third quarter was RMB3.57 billion.
On a 12 months basis.
Lastly, capex.
End of the third quarter was RMB 370.
<unk> our cash position.
Our cash position, which includes cash and cash equivalent and the restricted cash, was RMB 6.1 billion by end of the quarter, with our total debt standing at RMB 5.5 billion.
Cash and cash equivalent.
Okay.
R&D program.
Ron BD.
Partner with avocados the debt.
At RMB five claims that Pete.
Looking closer at the change behind the catch position.
We closed at the team behind the cash position.
On slide 19, we continue to generate a profit matching cash from operation of RMB 288.8 million, adding additional RMB 327.5 million project financing offset by RMB 1.6 billion investment cash outflow consisting of the aforementioned CAPEX.
Slide 19, we continue to generate a profit matching cash from accretion from RMB 288 8 million.
Recently, our RMB 377 5 million cricket.
All sites that RMB, one 6 billion investment in 15 of their formation to Capex.
and a RMB 149.5 million in short-term investment cash outflow.
RMB $141 five meetings and short term investment of cash outflow.
Again, we grew with high quality, indicating that our healthy cash flow from operation and the leverage. As you can see on slide 20, by end of third quarter, our total debt to capital ratio was
Again, we grew in high quality, indicating our healthy cash flow from operation in the language.
Okay.
Slide 25.
With Cologuard.
So that capital ratio.
35 claims focused.
35.4% compared with 44.9% in the same quarter last year. Our total debt to last 12 months adjusted EBITDA ratio was 4.4 compared to 4.6 in the previous quarter and 5.4 in the same quarter last year.
Now.
44, 9% same quarter last year.
As opposed to debt last 12 months adjusted EBITDA ratio.
Rainfall.
Yes.
Claims.
In the previous quarter.
<unk> four in the same quarter last year.
Our last 12-month adjusted EBITDA to last 12-month interest ratio by end of third quarter was 5.6, compared with 5.3 by end of second quarter and 3.5 by end of the same quarter last year.
The last 12 months adjusted EBITDA to last adjustment to ratio.
Understood.
Clancy comparatively our class III and taking our content and frequency by the end of the same quarter last year.
Finally, let's take a look at the guidance. We reiterated our 2021 full-year guidance and both our first nine-month revenue and adjusted EBITDA are now at 73.8% of our full-year guidance midpoint. This forecast reflects our current and the preliminary views on the market and operational condition.
Finally, let's.
Okay.
We are reiterating our 2021 full year guidance and above our first nine months revenue and adjusted EBITDA amount.
73% of our full year guidance midpoint.
This forecast reflects our current and preliminary views on the market and operational conditions.
This concludes our prepared remarks for today. Operator, we are now ready to take questions.
That concludes our prepared remarks for today.
We are now ready to take questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish to ask a question. Please press star one on your telephone.
For your name to be announced.
If you withdraw your request, please press the pound or hash key.
To withdraw your request please press the pound.
S T.
When asking the question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone in the call.
When asking questions. Please state your question in Chinese first then repeat your question in English for the convenience of everyone in the call. Please.
please ask one question at a time. So once again, it's star one for questions.
Please ask one question at a time, so once again Thats star one question.
Our first question comes from the line of Yang Liu from Morgan Stanley .
Our first question comes from the line of Yang Liu from Morgan Stanley. Please go ahead.
Thank you for the opportunity to ask questions. First of all, congratulations to the company for its excellent performance. I mainly want to ask about the progress of the new client. Can the management provide more color to the client's volume? For example, the location of his demand, and whether the company also feels that the future will be long-term.
Okay.
Sure sure.
Commercial vehicles.
Yes.
Would you be Andrew Otis Halloween in charge of the <unk> cohort it seemed daunting.
Kony is Hong Kong Concord.
To take a cohort.
Sure Todd.
Sure the way too.
Sure.
On sheet.
Let me translate my question in English, I'm very interested in this new major customer acquisition, could management elaborate more or provide more color on this customer in terms of scale, the location, and about the future outlook, whether it will be a new customer
So we take a cohort that that will come and go that path.
Let me translate my question in English.
Very interested in this new major.
Customer acquisition.
Can management elaborate more about I'll provide more color on this customer income off of scale location.
For the future also.
whether you expect to get the order from this customer on a recurring basis. Thank you.
Whether you expect to get the order from this customer on a recurring basis. Thank you.
I will answer this question, not Alice. For the 27MW new mid-range customers we previously revealed, this customer is the top two cloud computing manufacturers in China.
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And so the cohort.
All HR the beaches on Samsung.
In terms of delivery, we will have two different stations in the north of China.
It's helpful. It's EMEA women John cited some lumpiness on Sandy.
we will be providing customer 13MW of IT capacity
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Matt.
The project will be customized according to customer standards.
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As a whole, we will continue to stick to the super-large-scale green space development model in the process of diversifying customer development.
No, it's only INR closer to their changing clinical Doyle nickels and dimes, all while maintaining plenty of tissue Tien shoots hold out Glenn we already have out of Melissa.
At the same time, we can also deliver customized projects according to customer standards. Thank you.
Yes.
Cohort their bills changing things are rather some telco.
Right.
Yes.
Translation for Alex Worth, for the 27 IT megawatts project that we disclosed, we won the bidding in November and the client is a top two Chinese leading cloud computing service provider. The project is to be delivered in several phases in two locations in Northern China, each with around 13 megawatts of IT capacity.
The translation for Alex work on or the 27 megawatts project that with this credit.
One the bidding in November and a client is a cap to Chinese leading cloud computing service provider.
Project STB delivered in several phases.
In two locations in northern China, each went around 13 megawatts capacity.
As for the delivery, we will provide customized delivery as specified by the client.
As for the delivery, we will provide customized delivery as specified by the client.
Generally speaking, as we establish a more diversified client base going forward, we will adhere to our hyperscale greenfield development model, while at the same time, capable of delivering projects based on customized specifications from the client. Thank you.
Generally speaking as we establish a more diversified client base going forward.
Tier two are hyper scale Greenfield development model, while at the same time capable of delivering projects based on customized specification from the client. Thank you.
Thank you next question comes from Tina <unk> from Goldman Sachs. Please go ahead.
Thank you all. Next question comes from Tina Ho from Goldman Sachs. Please go ahead.
Hi, guys good morning <unk>.
Thank you very much for your time, and congratulations on getting a bright performance. My question is about the recent price trend of our contract. Because I saw when we calculated the S&Q,
Yes.
No one keys circling you Lindsay.
Bill Clinton was that related to Asia.
Women to centralize that Felicia Holman.
Just yeah.
The monthly rent is 1.9% higher than 2Q, so I'd like to ask if the price of some of our biggest clients' new contracts is going to go up, and if our new cloud computing clients
Mitchell.
Would you negotiate are showing to Amit.
So as that plays out.
Oh Man Josh please.
Can you guys hear women with alcohol jbs.
Okay.
Sean Douglas.
Douglas I appreciate you being the operation that.
Hollywood Osha will then.
That's helpful.
How is the price of the contract compared to the previous one? Is the payment model similar or different from the previous one?
Hello, J Jill foothold.
Jonathan.
Yes.
So if it shifts than just the elements of that cohort.
Please go ahead.
Yes.
Let me translate my question. So thank you very much for the time and congratulations on a very solid result, so my question is around the pricing of recent contract pricing.
So thank you very much, management, for the time and congratulations on a very solid result. So my question is around the pricing, recent contract pricing, because by our calculation, your actually monthly service revenue per megawatt actually increased by 1.9%.
Your calculation, you're actually monthly service revenue per megawatt.
Monthly service revenue per megawatt actually increased by one 9%.
in third quarter versus second quarter. So just wondering from these like newly in-service contracts, is there a trend of pricing recovering? And then also interested in your new cloud service customer, what is the like contract pricing for this, for this new customer versus your anchor customer? And also the contract structure, is it different or similar to your anchor customer?
Third quarter versus second quarter. So just wondering from do you like newly in service contract is there a trend of pricing.
With covering and then also.
Also interested in our new cloud service customer.
What is the contract pricing for this for this new customer versus your anchor customer and also the contract structure is it different or similar CAGR anchor customer. Thanks.
Hi, Tina. Thank you for your question. This is Nick. I will help answering this question.
Thank you for your question this is Nick.
Our help answering those questions.
I think the current contract with our major customers, especially on the pricing side, remains very stable and has been consistently stable in the past and will be in such a stable state moving forward.
Think our.
Our current contract with our major customers, especially on the pricing side remained very stable and has been consistent.
Consistently stable in the past and will be in such a stable state wound forward and but we did notice that some downward trend of pricing in the industry This year somewhere.
And, but we did notice that some downward trend of pricing in the industry this year, somewhere in China. As of now, we think that our unique
In China as of now we think that the.
Our unique Hyperscale Greenfield a full stack model outside of tier one city has created a very comfortable buffer clause.
Hyperscale Greenfield full-stack model outside Tier 1 city has created a very comfortable buffer for us.
With the competitive advantage in terms of economy of scale, operating efficiency, and a lower cost structure as we have in those energy abundant regions outside tier one city, all these factors contribute to allow us.
What is the competitive advantage.
In terms of economy of scale operating efficiency and a lower cost structure as we have in those energy are bound in regions outside of tier one city.
All these factors contribute to allow us.
uh the you know achieve a very stable financial uh structure in terms of our contract pricing as well as our margin as well as our capex spending you know in terms of uh your your question about our pricing for the new customers and maybe our anchor customers we're not in a position to disclose the detail under the confidentiality agreement for us with our key clients
The achieve a very stable financial structure in terms of our contract pricing as well as our margin as well as our capex spending.
In terms of.
Your question about our pricing for the new customers that may be our anchor customers, we're not in a position to disclose a detailed under the confidentiality agreement for us with our key clients.
But on your question related to the new corporational business model with new client, we will say that this is a newly customized model with this leading the cloud computing companies. And this is also in our total capability and the capacity, the planning and that all can be handled in-house.
But on the on your on your question related to the Yieldco operational business model as new client, we will see we will say that this is a newly customized a model with a leading cloud computing companies and this is also in our total capability and the capacity.
The planning and that can be.
Handled in house.
Thank you.
Great, thank you. Our next question comes from James Lang from UBS. Please ask your question.
Great. Thank you next question comes from James Huang from UBS. Please ask your question.
Hey, Quentin following my pleasure Helane.
Good evening, everyone. Thank you for your time today. I am Zhen, an analyst at RENY.
Sydney diminish again with Shire in the patient.
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Typically Q2, however, we have somebody go project.
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So what I would add to the Hawaii project.
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So I've got one question. The question is around the overseas business. We saw one of your peers also entering the Southeast Asian market recently, so just wanted to know your future growth direction in the region as well as the level of competition that you are seeing now and how it compares to the domestic Chinese market.
Management.
One question. The question is around the <unk> business we.
We saw one of your peers.
Also entering the southeast Asian market recently.
So I just wanted to note youll feature growth direction in the region as well as the level of competition that you are seeing now and how it compares to the domestic Chinese market. Thank you.
Okay.
Thank you for the question. I am Alex. I will answer the question. This quarter, the company has made great progress in overseas business development. We started to build a 100MW-level large-scale park in Lofoten, Malaysia.
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So what I would tell you that I think we're in team.
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You will find that this is another thing that.
Hey, Melissa that orbital.
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Wholesale.
At the same time, we have already received 80MW of MOUs from our customers. These demands will be delivered to our customers in two phases starting in 2022. In Thailand, we are also about to complete the acquisition of a 5MW-level project to support the business development of key customers in Southeast Asia.
He will pass it all on the Mou with the ECL, so as your CEO and ourselves.
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When you're in cohorts, one and two that youll find that.
At the same time, we are also expanding other areas in Southeast Asia, especially the development opportunities in Vietnam and Indonesia.
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Indeed on detail if I can do it.
The important thing is that we have made significant breakthroughs in the construction of the pre-deployment data center and the ability to integrate into the industry chain in the direction of white-nuclear computing. This actually effectively supports the low-cost and high-efficiency delivery of our overseas delivery. For the Asia-Pacific region, we expect the overall demand to be healthy.
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As our unique model continues to be promoted and widely recognized by the market, the demand for the large-scale, all-in-one model of Greenland will also increase.
Susan Allen the Melissa <unk>.
And finally as Susan Cook.
<unk> Melissa.
As usual you'll present the other ones.
I believe we can achieve better development in the Asia-Pacific emerging markets. At the same time, we hope more business owners like us can help this area. Thank you.
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Translation for afterwards. Thank you for your question.
<unk>. Thank you for your question.
In this quarter, we did make big progress in our overseas business.
In this quarter, we did make big progress in our overseas business in Malaysia. The company has launched a new Greenfield project you did in <unk>.
In Malaysia, the company has launched a new greenfield project sited in Johor state.
This new project is expected to be a built-to-suit hyperscale data center, and it has received an MOU capacity of over 80 megawatts, 80 IT megawatts, to be delivered to our anchored customer in several phases starting from next year.
Can you project expected to be a build to suit Hyperscale data center and it has received an mou capacity of over 80 megawatts.
The 80 megawatt to be delivered to our anchor customer in several phases starting from next year.
We're also finalizing a strategic acquisition in Thailand, Bangkok. The project, upon completion of the technical upgrade, will be hosting five IT megawatts and capable of supporting key clients' business development in the region.
We're also finalizing a strategic aggregation in Thailand Bangkok.
On the project upon completion of the technical upgrades will be hosting five megawatt <unk>.
Megawatt and capable of supporting key kind business smaller bank in the region.
Furthermore, we're also actively exploring opportunities in other countries within Southeast Asia, such as Vietnam and Indonesia.
Furthermore, we are also actively exploring opportunity in other countries.
Southeast Asia, such as Vietnam and Indonesia.
Importantly, our constant progress and breakthrough in technology R&D, as well as white box model solutions, self-developed precast container data center modules, and the further integrated supply chain will effectively support the cost efficient and cross-border delivery of our total solution for hyperscale data center infrastructure.
Importantly, our constant progress and breakthrough in technology, R&D as well as white box model solution.
<unk> Creek has container datacenter modules and further integrated chain effectively import coffee <unk> and cross border delivery, our total solution or habits into infrastructure.
for the market prospect in the Asia-Pacific market. We think the overall demand is healthy.
For the market cost back in the Asia Pacific market, We think the overall demand is healthy as we further advance our unique model, we're receiving higher and wider recognition.
As we further advance our unique model, we're receiving higher and wider recognition.
We expect the demand for hyperscale greenfield pool stack model will be even greater than the overall demand, and we believe that we can achieve further in Asia-Pacific emerging market. And we do hope there are more peers or friends to come together in this region to develop and explore the region's market as well.
We expect the demand for hyper scale Greenfield Jack model will be even greater and overall demand and we believe that we can achieve further in Asia Pacific in market, marking and we do have there are more parents or plan to come together in this weekend.
Develop and exploit our region market advantage.
No.
Great. Next question comes from Marco Lynn from the city. Please ask your question.
Alright next question comes from Colin from Citi. Please ask your question.
Good evening. We are Astellite and Marcoline from Huaqi Research Department. Congratulations on the company's bright future. Our question is that we would like to ask the company what impact the power outage will have on the company this season and in the long term? Will it drive the data center to move more to remote sites? Thank you. I'll translate. Congratulations on the great result. Could you quantify the impact of power crunch in this quarter and longer term? And will it be a driver for IDC to move towards remote sites?
Great.
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Yes.
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Constance <unk> CEO, <unk>, <unk>, CFO, who don't into the surgery doesn't seem remote sites.
Tissue I'll translate congratulation on the great results.
Would you quantify the impact of powered crunch in this quarter and longer term and would it be a driver for ITC to move towards remote site. Thank you.
Thank you, Mr. Lin. I think, first of all, for the impact of the power-related issue, both power shortage and power price, as we have just discussed, impact was very limited.
Thank you Mr. Li.
I think.
First of all for the impact of the power related issue both power shortage of power price as we have just discussed impact was very limited almost next to zero a reality, especially in Q3 and we expect some very very very very limited the impact in the near future visits.
almost next to zero in reality, especially in Q3. And we expect very, very, very, very limited impact in the near future.
This is actually primarily due to our energy side geographic deployment strategy as we started from day one.
This is actually primarily due to our energy side geographic the deployment of the strategy as we we.
We started from day one.
Going forward, I think our energy side geographic deployment will continue to be our cornerstone strategy and also going to create a competitive advantage for us.
Going forward I think our energy side geographical deployment will continue to be our cornerstone strategy and also going to create a competitive advantage for us and we believe that our long term commitment to renewable energy development in this site and the related capacity to build up.
And we believe that our long-term commitment to renewable energy development in this site and the related capacity build-up will continue to contribute to the stable and secure power supply, as well as to serve as an adequate hedge, I would say, against the power tariff inflation, if any.
Ill continue to contribute to the stable and secured a power supply as.
As well as to serve as a <unk>.
<unk> hedge I would say against the power terrific inflation if any.
Also, when you use the term remote, it's actually always on a relatively sense. One year ago, I remember some industry peers even thought about the places like Hebei, Zhangjiakou, or Datong, Shaanxi as a remote area, but they are not too remote, away from a city like Beijing. In fact, Zhangjiakou is only like 100 kilometers away from downtown Beijing. So generally, you know, data is...
So you used when you use the term remote is actually it is always on a relatively <unk>.
One year ago, I remember some industry peers.
Even thought about the places like a hub of your tongue alcohol or bathroom Cheyenne is a remote area, but they are not to do it more.
Away from the pure monthly like Beijing in fact, where John dealt quite it's only like one kilometer away away from downtown Beijing.
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I think.
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of a hyperscale you know uh all of such data the majority of hyperscale data center clusters
Hyperscale.
All of that your data is the majority of Hyperscale data center clusters.
are located and deployed in those energy-abundant locations. And these locations have.
All located.
And deployed in those energy abound in location and these locations happens to be outside of tier one city or New York term in a remote a little bit of a remote area for example, tongue alcohol thoughtful and Malaysia, Malaysia, a whole state.
to be outside tier one city or your term in a remote, a little bit remote area.
For example, Zhangjiakou, Datong and Malaysia, Malaysia is your whole state.
We will stick to these regions because they are energy-abundant, not only in the traditional energy-abundant sense, but also in a renewable-abundant sense. And they are not too far away from Tier 1 city at all.
Stick to this region's because.
Energy abound in not only the traditional energy Obama, but also in our renewable abounded.
And they are not not too far away from tier one city at all.
Thank you.
Thank you. Our next question comes from Heng Chen Li from CIC. Please ask your question.
I think your next question comes from Hongjie Li from CICC. Please ask your question.
And how does this have on HR argon seaborne.
My first question is, could you elaborate more on your initiative on the green energy and how shall we outlook on additional impacts on the margin?
Vishal Hudson, John Baugh with Sean.
Now with <unk>.
Joe again.
Ladies and gentlemen, thank guys element they did that.
Okay great.
Yes.
So I'm going to date.
Thanks Management first question is could you elaborate more on it.
This is Jeff on the Green energy and how shall it outlook additional capex and impact on the margin. Thank you.
I think the chimp data what can the June data is understanding of <unk>.
I think the QINDATA, what QINDATA's understanding of the IDC industry is always how to find the most efficient way to convert renewable electric power to computing power.
IDT administration always how to find the most efficient way to convert renewable.
Electric electric power and computing power.
That's why, firstly, the development of renewable energy is, by all means, a long-term strategy that we will commit ourselves to.
That's why I, firstly, the deploy development of renewable energy.
He is by all means our long term strategy that we will commit ourselves to.
Secondly, in terms of how it will be invested and operated, the company will judge case by case, will make a judgment case by case, based on several critical factors.
Secondly in terms of how it will be invested and operated.
The company.
Well judge case by case, we made a judgment case by case based on several critical factors.
But remember, we are in the bigger context of carbon neutrality as China's national strategy.
But remember we are in the bigger context of our carbon neutrality as China's national strategy.
So our final objective as one of the IDC industry or the computing infrastructure participant is trying to strike a optimum balance among adequate renewable power supply, power price, invested capital required.
Our final objective as one of the IDC industry, all the computing infrastructure participant is trying to strike a optimum balance.
Adequate renewable power supply power price <unk>.
We invested capital required.
and obviously with the ultimate goal to achieve the best investment value or return for investors, for customers, you know, et cetera. And we are not doing the process, we will not exclude any opportunity or potentials to involve external parties on a corporation on both the investment side and the operation side in the renewable energy, along this renewable energy strategy and execution.
And obviously with the ultimate goal to achieve the best investment valuable return for investors for a customer et cetera.
And we are not doing the process, we will not exclude any opportunities or potentials to embark external parties on our cooperation on both the investment side and operations side in the renewable energy along with renewable energy strategy and execution.
Thank you.
Thank you. Our next question comes from Albert Hung from Jpmorgan. Please ask your question.
Thank you. Our next question comes from Albert Hong from J.P. Morgan. Please ask your question.
Hello, Mr. President. Thank you for accepting my question, and I congratulate you on your great achievements.
Thank you Sir.
And just hold the keyword Kevin costing.
The new England.
My first question is about the moving rate, which is a significant decline in the second half of this year. The demand for super-large data centers will become more conservative next year. Have you seen any similar situation in this area? Because our customer concentration is relatively high, if there is a similar risk, how can we manage the moving rate in the next few seasons?
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Moving right.
And so the chat Joe.
Dominion Thats, what I can show you don't think that should show up in kind of a proposal comes out.
Typically you know kind of laser phone call single room, and saying what you don't want to.
So it makes it a function.
And with your content moving rates.
And the way Paul.
Sure.
Your peers have intercatched some slowdown in moving rates in second half and turn more conservative on the next year outlook, especially for hypers.
Peers have inter catch some slowdown in moving rates in second half and more customer again from the next year outlook, especially for Hyperscale mine.
Mine and Winner chain data also see similar concerns about 2022 hybrid-scale demand. As chain data has high customer concentration risk, how would you mitigate the risk of potential slowdown in moving rates?
When they are changing.
Also <unk> seen about 2022 hyperscale demand.
That has high customer concentration.
Concentration range, how much of a winter categories, a couple of potential slowdown in moving rates. Thank you.
Yes.
Thank you for the question. I will answer it. Actually, I have already answered this question just now. One is the diversification of the customer itself, including the development of product governance and market area.
Alright, guys Hey, Randy.
Donna.
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At the same time, we have seen some progress in the diversification of customers and the market area of global data.
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Another thing that.
I think the answer to this question is that you can see that our customers are special through the reports of the previous four quarters. Of course, this is on the basis of our future diversification, and we hope to continue to maintain it.
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In addition, as you just mentioned, the understanding of the client needs of the super-large data center is completely different, and the product and solution provided are not on the same level.
When the economy keep out a career.
So unless we see the product through most of the dosing cohorts you showed in Q2.
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Our major clients' decision tools have been optimized both for ease of use and ease of development.
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As for the forecast for next year, you can refer to our PubMed. Thank you.
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Cancellations by Alex work.
Thank you for your question. I think Nick has just addressed a similar topic. In general, our recent progress in client diversification and geographic diversification, as well as the diversification in the product line and market segments of our anchor client itself should all be marginally creating a better risk hygiene profile for the company going forward.
Thank you for your question.
I think Nick has gen sidetracked estimate our topic in general our recent progress in kind diversification and geographic diversification as well as the diversification in.
In the product line and market segment of our anchor client itself should all be marginally, creating a better risk hedging profile for the company going forward.
Then, on the concept of hyperscale datacenter and the demand for such hyperscale datacenter, we're not sure if other market players, as you mentioned, share the same definition as us.
Danny on the cause that Hyperscale data center and the demand for that type of Scott and Peter.
We're not sure if other market players that you mentioned share the same definition.
A different definition may lead to a different product and solution offering.
As different definition may lead to different product and solution offerings are.
Our anchor clients like Tindata as a business partner very early at its business stage when we are just a startup company.
Our anchor client slide 10 data SaaS business partner.
Very early and at this stage when we are Joseph startup company.
our hyperscale model, or to be exact, the hyperscale greenfield full stack model, has accompanied our client all the way along and we grew together. So now we're still growing together.
Hyperscale model.
Or that.
To be exact the Hyperscale greensville full stack model has accompanied our find all the way along and we grew together.
Now we're still grow together.
We believe we have done a good job for them so far. For the next year, we can refer to our pod fund or the general introduction for our disclosed information.
We believe we have done a good job for them so far.
For the expect when next here.
We can.
I refer to are alright generated on pinpoint or disclose information.
Thank you.
Thank you. The next question comes from Ye Lin Chuang from DBS Bank. Please, ask your question.
Thank you. Our next question comes from yelling Chung from DBS Bank. Please ask your question.
Okay Quieting down to you want do you want to John Campbell.
Thank you for the opportunity to ask questions, and congratulations to the company for achieving strong results in the third quarter. My question is also about the power shortage. Can you share with us the power shortage in the third quarter and the situation of power prices going up, and the impact of the current market competition pattern and future customer demand? Because I saw other competitors' power shortage in the third quarter.
Consequences that designs, you're going through the Olympics.
Lindsay is required.
Great. Thanks Youre welcome your franchise has a tangent to that issue. We haven't Dan you talked you didn't ask that how much you can quantify Changsha Xian Xian growth realize cohort seasonally here you know kind of molecule.
Its Andrei <unk>.
Yes.
moving in slowdown. Thanks for the opportunity and congratulations on the strong third quarter results. My question is, what is the current competition landscape and demand outlook in China given the recent power shortage and tariff hike in the third quarter as we saw a slow move-in rate for other competitors in China?
Moving slow down to Franco.
Our two if I can Jeff Thanks management for the opportunity and congratulations on the strong first quarter results.
My question is what is the current competition landscape and demand outlook in China, given the recent power shortage and turnpike in the third quarter as we saw.
And grateful of their competitors in China. Thank you.
Thank you Nick.
Thank you. This is Nick. I'm actually going to answer these questions. I think I want to reiterate Chin Data's way of doing business. We believe the IDC's nature is to try and find the most efficient way of converting electric power to computing power. Therefore, power has always been integrated and one of the most important strategies for the company from day one.
<unk> going to answer those questions I think.
To reiterate the June data is way of doing business, we believe.
Idc's nature is to try and find the most efficient way of converting electric powered computing power and therefore power has always been the integrated and the one of the most important strategy for the company from day, one so as the as you can as it's approved recently in the marketplace on power related issues and also you can see on.
So as you can, as it's proved recently in the marketplace on power related issue, and also you can see a numerous of policy papers issued by the government authority, like MIT and DRC and the state council in the past few months in a very intensive way, elaborating actually on a vision for the IDC industry and the carbon neutrality target for the entire country.
Numerous policy papers issued by.
The government authority alike.
Yeah.
In DRC and state Council in the past few months in a very intensive way elaborating Ashley on the vision for the IDC industry and the carbon neutrality target for the entire country.
as well as the fact that the Chinese IDC industry made up around 2%, 2% of the total energy consumption nationwide.
As well as the fact that the Chinese IDC industry made up around 2%, 2% of the total energy consumption nationwide last year.
You can understand why the power and energy is so important for the IDC industry. Therefore, a strategy on a power for a particular IDC company has become very, very important.
They understand the wide power and energy is so important for the ITC in the trade. Therefore, our strategy on a power for a particular IDC companies has become a very very important therefore.
Therefore, that can explain why the company from day one, we believe into this, we execute along this power-related strategy, and we have a very close to energy side geographical deployment to be fully in line with this belief and strategy.
Thus kind of explain why the company from day, one we believe into this we exited allowing this power related strategy and we have.
Very close to energy side geographical deployment.
To be fully in line with this belief and strategy.
You know, for the company going forward, our energy side geographical deployment will continue, I emphasize, will continue to be our cornerstone. And we believe our long-term commitment to renewable energy development and related capacity buildup will contribute to a very stable and secure power supply, as well as to serve as the adequate hedge, so to speak, you know, against the power tariff inflation, if any, in the future.
For the company going forward, our energy side, the geographical deployment will continue and present will continue to be our cornerstone and we believe our long term commitment to renewable energy development and related capacity build up while contributing to a very stable and secure power supply as well.
As to serve as the adequate hedge.
So to speaking against powered terrific inflation, if any in the future.
Are you.
Thank you. Our next question comes from Chi Chow from Citigroup. Please ask your question.
Thank you. Our next question comes from Kai Feng Jia from Citix. Please, that's your question.
Sure.
Thank you very much, Director Chang, and congratulations to the company for achieving a very good record. I would like to ask a question about the need for direct mobilization.
Okay.
Go ahead on the approval to Chile.
Yes, Brian you forget total knee with Keytruda R&D EMEA when you compare that to ensure that they are getting offered.
We also learned from some public news channels that Zijie may release its own public cloud product in December , so we would like to know if we can get more orders from it. In addition, we would also like to ask Guan Yicheng to share the business needs of Zijie TiaoZhong in and outside of Hainan that we can continue to get. So let me translate my question. So I have a question about the demand from Baidan.
With that Sean we have filed with me they apparently electron beam.
Based on the idea of a ship or pay from one quarter couldn't believe it means that the Atlanta IHS lifestyle franchise I forget held on very high power that.
Neutral.
So let me translate my question. So I have a question on box demand from Baghdad.
We see some news say that Baidu will release its own public cloud in December . So just wondering if we can get new orders from this and also can we give some color about the demand from Baidu in China and overseas. Thank you.
We see some say that bank guidance too early days its own positive comp in December for death, I Wonder if we can get to new orders from base and also kindly gave some color about the demand from <unk> in China I know Rajiv. Thank you.
Thank you. This is Nick again. I'm trying to answer these questions again. If you look back our history, as Alex, I think, mentioned, our collaboration with our anchor client by Binance, in particular, in the past, has been very successful. We are just becoming the ecosystem partner and will remain so.
Thank you. This is Nick again, I'm trying to answer those questions again.
If you look back our history.
As Alex I think mentioned our collaboration with our anchor client bye.
<unk> in particular in the past has been very successful.
Become just becoming the ecosystem partner and well remain small.
And because of our high quality delivery and operations, you know, we deliver to customers and make them happy.
And because of our high quality delivery and operations, we delivered to customers and make them happy the progress we've made in overseas market this quarter I'm sorry.
The progress we made in the overseas market recently is very exciting and we were confident that with our constant in-house capability build-up.
The recently is very exciting and we were confident that with our constant in house capability buildup and further deployment overseas market will be fully capable of supporting the development of our clients both within China and overseas.
and further deployment in the overseas market will be fully capable of supporting the development of our clients, both within China and overseas.
As far as for your question about their upcoming, the new public cloud product launch, I'm not in a position to make any comments on behavior of a customer, but all we see based on our data interaction with our key clients.
As far as your question about there.
Upcoming new cloud public cloud product launch.
In the position to make any comments on behavior, our customer but.
All we see.
Based on our data interaction with our.
Key client.
on the ongoing business as well on the forthcoming business and I think at least kind of to be in a 2C business development.
On the ongoing business as well on the forthcoming business and I think that these kind of that to be in the <unk> business development.
signaling a very positive momentum and I think you know there's a very high chance you will be the beneficiary out of this.
<unk>, a very positive momentum and I think there are some very high change will be the beneficiary of this thank.
Thank you.
Thank you. Our next question comes from Addison Lee from Jefferies. Please go ahead.
Thank you. Our next question comes from Edison Lee from Jefferies. Please go ahead.
Hello, Mr. Wang. Thank you for giving me the opportunity to ask this question. My question is mainly about the 27 clients you have in China.
Got it.
So that he wants to add to it.
Yes sure.
Sorry.
Total cobalt.
Super.
To come back to the Sellable couple of hotels.
Can you tell us if this project is a power-hungry project? And what is the difference between the current project and the power-hungry project? And in the future, because you just said that this project is a bit different from the current model.
So the sell more sugar free about.
Brett Hull.
Sellable with others.
Tien <unk> CEO for mortgage Hartford.
And how to analyze tissue.
Okay. That's helpful.
Because it sells out a little more tricky portola.
Can you explain what are the differences in this model and what are the advantages and disadvantages of this investment plan?
Shall we say a tissue.
Most reliable foothold and hoping to go to Australia.
Sure.
Yes.
Wonder if you share some of my question is mainly on the.
So my question is mainly on the new client, new cloud client in China. So for these two particular projects, can you tell us what are the terms?
New client cloud client in China. So called these two particular products can you.
<unk> told us for the <unk>.
Terms of the culture includes power and also what are there has been a difference in the IRR with the existing projects.
includes power, and also whether there is any difference in IRR with the existing projects. And as you said earlier, it seems that the business model or the requirements of the client is somewhat different from your existing clients. So maybe
As drew said earlier.
It seems that the business model or the required level declined somewhat different.
Existing clients.
Maybe.
Maybe you can elaborate on actually what the differences are and whether there are any implications for the investment value.
Maybe you can elaborate on sort of what a typical susquehanna and what if there are any implications for the investment value of this project. Thank you.
I think to answer your questions, I think at the moment because this was the one of the most recent I think development, you know, post Q3.
I think to answer your questions I think at the moment because this was one of the most recently.
I think the development.
Post Q3, so and though we are at very close stage of signing the final contract with our customers new customers. So at the moment and we're not in a position to disclose any further details, but what I can tell you he's actually.
So, and we are at a very close stage of signing the final contract with our customers, new customers. So, at the moment, we're not in a position to disclose any further detail, but what I can tell you is actually, you know, if you remember back in the first half of this year, we signed a framework agreement with this particular new customer.
If you remember back in the first half of this year, we signed a framework agreement with this particular, new customer and at that time, we said that the.
and at that time we said that the reason for the signing was because our credentials
The reason for the signing was because our credentials on the energy side deployments.
on energy side deployments, you know, and all our operating efficiencies and our very lower than average cost advantage we have. And obviously this is all accomplished, you know, recently. I think exactly due to these reasons.
Our operating efficiencies and our lower than average cost advantage, we have and always this was all accomplished recently I think exactly due to these reasons. So in a matter of the cooperation model asset is customer customization models.
So in a matter of the corporation model, as I said, it's a customer customization models. The project gonna be located in one of our northern places. We currently operating our hyperscale project and one is another Northern China locations. You know, for other details, please looking at the further public disclosure by the company. Thank you.
The project Gonna be located in one of our more completed we currently operating our Hyperscale.
And one is another northern China locations.
Other details so please looking at the at the other public disclosure by the company. Thank you.
Thank you. Our next question comes from Yang Liu from Morgan Stanley . Please ask your question.
Thank you. Our next question comes from Yang Liu from Morgan Stanley. Please ask your question.
Thanks for the opportunity to ask another question.
Thanks for the after.
Option to ask another question.
Oh, we're staying on top of the range I'll finally, Joseph shall arrange icons.
I will answer that.
Kind of switching kind of China, Shanghai Pudong, Geordie Andre just shy of one one.
The company did the evaluation to refinance or re-finance, so I would like to ask about the current progress and plan. The question is about the debt financing. We noticed that in the offshore bond market, there is big volatility and I would like to hear the management comment on what is the status and what will be the next step in the debt financing.
Now going to Japan.
So Jacob <unk> reef.
Refinance or thermo Fisher.
Michel Morin, Joseph J, <unk> Qingdao Chihuahua.
The question is about the debt financing or I noticed that in the.
Offshore borrowing markup.
Okay.
Synergy.
And.
I would like to hear the management's comment was what is the status and what will be the next step in the.
That financing.
Thank you.
Okay. Thank you Julia.
Thank you, Luyang. Actually, first of all, we have sufficient financing liquidity and a very healthy leverage profile. As we can see by the end of this quarter, the company has RMB 6.1 billion cash and the cash equivalents at hand.
Actually first of all we have sufficient finance financing liquidity and a very healthy leverage profile.
You can see by the end of this quarter. The company has RMB six 1 billion cash and cash equivalents at hand, and the in contrast to oven that balanced which is around RMB five 5 billion together with some short term investment we have a negative net debt.
And in contrast to our debt balance, which is around RMB 5.5 billion, together with some short-term investment, we have a negative net debt, which is net cash position of RMB 782 million. Also, we have cash flow from operations, which is around RMB 288 this quarter.
<unk> net cash position of RMB.
<unk> hundred 82 meeting and also we have cash flow accretion.
Operation.
Which is around RMB 288 this quarter.
So besides this, on the slide we just reviewed that by the end of this quarter, the company total debt to total capital ratio is only 35.4%, which are very low, very low compared with the industry level and leave us more room for debt or debt-like financing.
Besides this.
On the slide we just are reviewed by the end of this quarter. The company total debt to total capital ratio.
Our ratio is only 35, 4% which are very low.
Very low comparator with the industry level, and then leave us more room for that or that lack of financing.
With regards to the financing progress.
With regards to the financing progress, the rating agencies have reaffirmed the rating this quarter with a triple B minus investment grade. And this allow us with more financing options in both public and private market. On daily operations, it is very regular and consistent practice that we have bank loans at project level, both domestic and for overseas projects.
The rating agencies have reaffirmed the reaching this quarter with triple B minus investment grade and this allow us with more financing options in both public and private market.
Daily operations.
It's very irregular in the consistent practice that we have bank loans at the project level.
ESG agenda for overseas projects, along with the development of projects.
along with the development of projects and at the same time we are also looking into a private financing options recently. Thank you.
At the same time, we are also looking into a private financing options recently thank you.
Yes.
Thank you. Our next question comes from Tina.
Thank you. Our next question comes from Tina Ho from Goldman Sachs.
Goldman Sachs. Please ask your question.
Thank you very much for the opportunity to ask the second question. The question is, the management team just mentioned that we are now in a state of cash, and the cash on the account is very sufficient. But I want to ask, our team is mainly in China.
Thank you guys.
Two quick.
When do you Joseph.
All of this is that attrition Jacob judicious way.
Hi, gentlemen, listen patients total or is it really that that language I'm sure Joe.
How should that go with it.
because we saw that they did a purchase in Thailand. So we want to ask what the company's opinion is on the purchase in the domestic market. Because we see that different companies in the same industry may be accelerating their purchase projects. But there may be other companies that are slowing down and not doing any acquisitions. So I would like to ask the company's opinion on this.
We will conduct that Josh.
Sure sure.
Yes.
Thanks Vishal.
Also to ensure that J code.
Yes.
Yes.
Since agile digestions outcome the struggle.
More cash flow.
Okay.
Sure sure.
You may all its loyal household growth recently that one Jeff.
Okay.
So, my second question, thanks very much for the opportunity again is regarding.
My.
The second question, Thanks, very much for the opportunity again as <unk>.
Regarding.
M&A, our company's view on M&A, because as management just mentioned, you have actually very abundant cash and that cash position on your balance sheet. So
The M&A.
Our company's view on M&A, because as management just mentioned you have actually very abundant cash our net cash position on your balance sheet.
wondering what's your view specifically in the Chinese M&A market. As we saw, some of our peers are accelerating their M&As while others are actually limiting and not doing any M&As at this stage. So, what's Team Data's view on potential M&As?
I'm wondering what's your view specifically in the Chinese.
Sure.
M&A market as we saw some of our peers are accelerating their M&A.
While others are actually limited and not doing any M&A at this stage, though Jim data.
Potential M&A. Thanks.
Our view on the potential, this is Nick. Thank you, Tina, for the questions. Our view on the merger acquisition, we think that's also one of the company's strategy in a very supplementary way. Our principle strategy is still going to be the full stack hyper scale Greenfield development plus operation model, but we're looking at some interesting opportunity in merger acquisition, both in China and overseas at the same time.
Our view on the potential of this is Nick Franco teed up for the questions I'll review on the merger acquisition. We think Thats also one of the company's.
Strategy.
And the various supplementary way, we will our principal strategy is still going to beat the horse dead.
<unk> golf Greenfield development, plus operation model, but we're looking at.
Some interesting opportunity emerge acquisition, both in China and overseas at the same time essentially.
But we stick to a very stringent, sometimes too stringent principle on the potential merger acquisition opportunities. And we actually stick to several criteria. We hope that, but even say we acquire certain asset, we hope that we can provide our unique, you know, the in-house capability, which can allow us to add value to this targeted asset once we take over.
We stick to a very very stringent sometimes too stringent in principle on the potential merger acquisition opportunities and we actually stick to several criterias we hope.
Weather, but even say we acquire certain assets, we hope that we can provide our unique.
In house capability, which can allow us to add value to these targeted assets. Once we take hold okay. So but at the time of making this a merger acquisition. We are looking for synergies with the company.
So, but at a time of making this a merger acquisition, we are looking for synergies with the company in geography, client base, and resource of the potential target of assets. And we look for, obviously, the reasonable.
All of our feet.
Our client base and resource of the potential target all the asset at assets and we look for obviously, the reasonable valuation and I want to emphasize that both the future business plan and our multiple and a valuation multiple for these kind of potential targeted asset all company both in China.
And I want to emphasize that both the future business plan and the multiple, and the evaluation multiple for these kind of potential targeted assets or company, both in China and overseas, must be reasonable in the eyes of Qingdata. That's actually very important for us to prove the truth. We will not do the merger acquisition simply for the sake of merger acquisition itself.
Overseas must be reasonably reasonable in the ice auction data.
That's actually a very important one.
Water treatment we won't.
We are not through the merger acquisition simply for the sake of merger acquisition itself and also given the.
and also given the more and more emphasize.
The more and more emphasize on the operating efficiency and most importantly on a renewable power and power on the supply side and demand side as more and more I think that the demand is going to be driven by the big computing and.
on the operating efficiency and most importantly on the renewable power and power on the supply side and the demand side as more and more I think the demand is going to be driven by the big you know computing and and the tech and internet clients.
Tech and Internet clients.
And we think that given the current competitive landscape, ever increasing competitive landscape around tier one city in China, there will be some consolidation, you know, the window open up for China data, even we stick to a very stringent, you know, the merger acquisition principles.
We think that given the current competitive landscape ever increasing mid Atlantic escape around tier one city in China that there won't be some consolidation the window open up launching the beta even we stick to our very stringent.
Merge acquisition principles. Thank you.
Alright. Thank you. Our next question comes from Edison Lee from Jefferies. Please ask your question.
All right. Thank you. Our next question comes from Edison Lee from Jefferies. Please ask your question.
Hello, I have another question. Can you tell us more about this year's capital expenditure?
Yeah.
Olympic tissue.
Thank you Alicia.
So the team that we have.
Got you and lastly somebody else. So my question is about Capex just wanted to get an idea as to what is the capex guidance. This year of $5 6 billion, that's changed and what's the outlook for next year.
So my question is about CapEx. I just want to get an idea as to what are the CapEx guidance this year of five to six billion has changed and what's the outlook for next?
Thank you. So far, we incurred RMB around $1.4 billion for CapEx for this quarter. And on a 12-month basis, last 12-month CapEx by end of this quarter was around RMB $3.6 billion. This is generally in line with our full-year CapEx expenditure forecast.
Thank you.
So far we incurred RMB around.
One 4 billion for Capex for this quarter and on.
Tough months basis last 12 months Capex by end of this quarter was around RMB.
$3 6 billion. This is generally in line with our full year Capex expenditure forecast.
For the next year, you can see that the majority of the under construction assets are to be delivered gradually. And besides this, today we also announced three new project orders or pipelines. And we expect next year's CAPEX investment will be somewhat higher than this year to support this solid business opportunities and the region extensions and the project delivery. Thank you.
For the next year, you can see that the majority of the construction is yet to be delivered a gradually and besides this today. We also announced three new projects are there is a pipeline and then we expect next year's Capex investments will be somewhat higher than this year to support this solid.
Business opportunities in the region expansion and the project delivery.
Yes.
All right. Thank you. There are no further questions at this time. I'll turn the call back to the management team for their closing remarks.
Great. Thank you there are no further questions at this time I will turn the call back to management team for closing remarks.
And thank you for the investment community and all the analysts and for the public to pay your attention to ChinData. I want to emphasize that once more, that's probably going to be the regular remark I made every quarterly earnings call, that our belief in IDC is a little bit unique and different from most of the peers.
And thank you for the investment community and all the analyst and therefore, the public to pay your attention to two data.
Want to emphasize once more.
Probably going to be the regular remark I made every quarterly earnings call that we our belief in IDC is a little bit unique and different from a lot of most of our peers. We believe the it industry is nature is held will find most of the most efficient way.
We believe the industry's nature is how to find the most efficient way to convert electric power, and in the future, going to be renewable electric power to computing power. And we just treat ourselves more like an infrastructure service provider than simply an IDC, the hosting service provider. So therefore, we're going to stick to this strategy, and we'll make a perfect execution along the way. Thank you.
To convert electrical power and in the future is going to be a renewable electric power and computing power and we just treat our sell more like up in this infrastructure service provider, let's complete the ITC hosting service provider. So therefore now we are going to stick to this strategy.
And we will make a perfect execution along the way. Thank you.
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect your lines.
Ladies and gentlemen that does conclude our conference for today. Thank you for participating you may all disconnect your lines.