Q4 2021 Chindata Group Holdings Ltd Earnings Call
Good morning, and good evening, ladies and gentlemen, Thank you and welcome to change data Group Holdings limited fourth quarter and full year 2021 earnings conference call.
We will be hosting a question answer session. After management's prepared remarks. Please note today's event is being recorded.
I'll now turn the call over to your first speaker today, Mr. Don Joe from Investor Relations of Gene data Group. Please go ahead dawn.
Yeah.
Hello, everyone and welcome to <unk> group's fourth quarter and full year 2021 earnings Conference call. This is Don from Investor Relations team of the company with US today are Mr. Microsoft's Chairman of the board of the company Mr. <unk>, our newly appointed CEO Mr.
Sandeep Shah of <unk>.
Adam.
Mr. Nick Wang our CFO , Mr. Eric spun our newly appointed CFO , Mr. Jonathan <unk>, our newly appointed CTO Zoe Zhang our finance.
In addition to providing a discussion and analysis of our quarterly performance. The company will also like to take this opportunity to share more on our recent management update as well as the growth plan going forward.
To begin with Mr. Microfossil will walk you through the recent management update and the rationale behind.
Hoffman will be providing you a comprehensive look at the company's plan going forward in Chinese followed by an English version.
Nick will then take you through the quarterly review of our operational performance.
Zoe will present, our financial results.
Management team 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 forward looking and 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.
During this call we will present, both GAAP and non-GAAP financial measures.
A reconciliation of non-GAAP to GAAP measures is included in our earnings press release.
Is distributed and available to the public through our Investor Relations website located at investors adopting data group Dot com.
We have also updated our quarterly presentation on the company's Investor Relations website, which you can be referred to as an important supplementary material on today's call.
Without further Ado I'll now turn over the call to Mr. Michael Klaus.
Michael Please go ahead.
Yeah.
Thank you Don and thank you everyone for joining our earnings call. This morning or this evening.
As the chair of the board of Directors I would like to take this opportunity to introduce you to our senior leadership team. We are very pleased to have this team in place and we're confident in their leadership of chimp data going forward.
As you know we made the announcement a couple of weeks ago with the appointments of our CEO , Our President C O O and CTO of the company.
Leading the team Mr. Huapango was appointed as our CEO and as a director of the board.
A little background on what he joined Chimp data in 2019, as president of our China business and prior to that he was the founder of Eyetech club and the founder and headmaster of 10, 24 Academy, which both our preeminent platforms that bring together top technology executives for training and idea exchanges.
Wap hung also served as vice President of Phoenix, New media and the CTO of iPhone from 2007 to 2013.
<unk> performance in the last three years has truly been outstanding.
With his 20 years of experience in contacts within China's technology and data center sectors, while palm brought in a series of strategic customers and projects.
Successfully established solid relationships with local governments and our partners in the data center ecosystem.
After a thorough search process it became clear to the board that what is the.
Best fit as the group's new CEO with his strategic thinking industry resources and understanding of the company and our team.
MS. Sandy Shao has been with the company for over two years with her deep understanding of the company having served as our Chief operating officer Since August 2019, and as a board director since July 2019, Sandy was appointed as President of Chimp data group.
Mr. Zeng you Eric Fong.
<unk> joined the company in December 2021, as Vice President of business operations and was appointed as our new Chief operating officer.
Eric has a deep background in strategic planning and operations.
He served as vice President and the General General manager of secure Asia.
Saint Gobain.
From 2015 to 2021 and served our strategic planning director of Saint Gobain from 2013 to 2015.
In addition, Mr. Fun served as an associate director of Dow chemical from 2011 to 2013.
And prior to that Eric was a senior manager at Honeywell building solutions from 2009 2011, and also served as a consultant with the Boston Consulting group.
For four years from 2006 22009.
In addition were very pleased to announce that Mr.
It was John was appointed as our Chief Technology Officer.
B why has a very long distinguished background in the IDC industry.
Prior to joining chimp data he was the technical director senior director and the general direct.
General manager of the systems Department and IDC engineering at Baidu from 2010 to 2011.
Prior to that Mr. Zhang served as the chief engineer in the Beijing Telecom planning and design Institute from 1995 2010.
We are very pleased to have him join our team and.
Very distinguished very well known in the industry. So we're very happy to have him join us.
And lastly, we have as you well know we have Nick Wang as our CFO who's been with the company for over two years now.
So, we're very well positioned with our management team.
And.
The company benefits from its very strong team with diversified experience and expertise covering our business operations strategic planning technical Knowhow as well as capital markets operation where.
Kylie confident then under this team chimp data as business is more diversified its culture is more open with a solid foundation. So that we can further strengthen our position as the leading data center platform in China and in the Asia Pacific emerging markets.
So with this I'll turn the call over to our CEO , Mr. Wap hung wall, who will provide you with a comprehensive overview of the company's plan going forward. Thank you.
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Thank you for that introduction Michael.
I'll start by thanking the board of directors their trust and endorsement.
It is an honor to shouldered a response and manage operating such an excellent data center and their clothes.
And I look forward to working in close cooperation with the board and our management team.
Let me begin by briefly reviewing the company's business and financial highlights for the fourth quarter and full year 2021.
And then I will take everyone through a comprehensive look at our development plan.
On slide eight in.
In the fourth quarter of 2021.
We've put coordinated project under construction.
Our total number of data centers up to 27.
Total capacity increased by 85 megawatts during the fourth quarter reached 673 megawatts.
Specifically in the fourth quarter, our in service capacity increased by 17 megawatts to 440 megawatts.
Our indications of interest capacity increased by 95 megawatts.
Bringing our total contracted in I O I capacity to 589 megawatts.
And our utilized capacity increased by 36 megawatts to 304 megawatts.
Our total capacity and clean high contracted and by a wide ratio of 87, 5%.
Financially.
Our full year revenue and adjusted EBITDA all beat.
Our guidance.
Revenue totaled RMB 2.852 billion for the year 2021.
Representing a year over year increase of 55, 8%.
Which is the 0.8% higher than upper range of our guidance.
Adjusted EBITDA totaled RMB, one point or one 9 billion for the year 2021 reps.
Representing a year over year increase of 66, 5%.
Which is one 5% higher than our upper range of the guidance.
Net income turned positive for the year 2021 at.
At RMB $316 4 million with a margin of 11, 1%.
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Next.
I want to discuss our future plan.
<unk> primary aspects.
On slide 10.
First of all I don't think.
To share a bit about our outlook on the industry.
And the opportunities Fortunately.
We believe there is a huge opportunity for hyperscale data centers and the APAC emerging market.
Ah, citing some research for data center demand is expected to grow at a bigger rate of over 20% over the next five years.
Much of this demand will come from international Digital Technology Giants cloud computing and Chinese digital technology company that are succeeding with our business expansion in the region.
Whereas an increasingly stable and market oriented regulatory environment in the region.
Our existing and expanding capacity in this region has positioned us with a first mover advantage to cease these market opportunities.
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Second.
I'd like to share our thoughts on the outlook in the domestic market in China.
In a medium to long term perspective.
We expect the recent policy, namely the Easter data West computing policy.
Industry and market landscape in a manner that is a very favorable 14 data.
You can also refer to slide 47 in the appendix for the key highlights of the policy.
This policy is a highly viable strategic development plan for the data center industry in China.
Well up under the grant for TD.
Our carbon neutrality and digital economy development of the country.
Aiming to address the increasing disparity between insufficient energy supply and computing power demand in densely populated area of eastern first tier cities.
Well as low energy efficiency and efficiently inefficient renewable energy use.
The plant is expected to redirect most of the future compete computing power demand to areas in the west where energy at a renewable energy supply is bounded.
We think the goals of this policy are highly consistent with our long standing views on the nature of the data center business.
Which at the core is to efficiently convert green electric power into computing power.
As the demand for data center and the future.
Gratulate shift toward a computing hub.
The commitment under this policy.
The company.
Significant advantages offered by its existing deployment.
Namely some jonquil campus, which is right in the Beijing, Tianjin Hebei computing hub has designed by the policy.
And thoughts on campus, which is enjoying extreme geographic proximity with the Beijing, Tianjin Hebei computing hub.
And I'll lay out in their planning and Shin Young City Gansu Province, another cluster.
Designated in the policy.
We believe our existing and to be the below capacity in these regions will further strengthen our industry leadership.
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We expect the industry to enter a period of consolidation and survival of the fittest.
Impact of such a likelihood that firstly.
Data centers was no economies of scale.
Very few customers.
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Secondly, with industry consolidation.
Asian show return to reasonable levels.
Which will provide us ample opportunities for asset integration grew business corporation or through a merger and acquisition.
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Although macro economy and supply chain issues are laying impact on market demand.
Data has unique highlights.
Firstly as our anchor customers continuous focus business through new business initiatives, such as public cloud.
International market expansion.
We continue to see a corresponding increase in demand.
Secondly, our unique capability in supply resource technical Knowhow and efficiency.
<unk> being recognized by more customers in various industries, which is driving increased demand from a broader range of customers.
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We believe that we can capitalize on this tremendous opportunity within China, thanks to our competitive advantages.
On slide 11.
Our first major advantage is our business model and we see several major advantages in it.
Including a full stack solution.
Early energy are bound regional layout.
High quality client profile incredible asset a long term contract.
Firstly can data is offering customized full stack solution covering product design.
Nickel solutions development, and construction supply chain management and operation of limited service.
<unk> itself and efficient developer and operator of the IDC business.
Second our site selection and scale.
The majority of our data centers in China are located and self build campus right in and around the Beijing, Tianjin Hebei computing hub as designated under but needs to beta West computing policy.
In this region.
Joining this call.
Land and power resources abounded.
Costs are relatively low latency is not an issue.
And we process a large land reserve of one.
Moreover, our economy of scale is highly evident.
Sure.
Our customer relationships.
We enjoyed close.
Customer relationship with digital leader.
The national or domestic market.
The healthy development of these clients.
In her rating the company long term steady and a sizable demand.
Finally, our assets of our contracts more than 92% of our data center asset sales.
With solid asset valuation in place.
In addition, most of the Companys contract a long term 10 years contracts in nature.
<unk> is normally receive development space offering a high degree of business certainly.
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Our second major competitive advantage is our business localization in the APAC merchant market.
We have a strong local business team in the region with all around capabilities covering customer management.
Development campus operations at a government relationships et cetera.
In addition, we enjoy location and scale advantages.
We have several important data centers located in neighboring countries of Singapore, as we're expanding into APAC emerging markets.
Land and energy of the boundary.
Costs are relatively low latency is not an issue.
Our existing business and new Hyperscale business initiatives will bring us benefit of economy of scale.
Last but not least the capability and the customer relationship we have under our Hyperscale model in domestic market a replicable for our overseas business.
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Our third major competitive advantage comes from our ESG initiatives.
We have strong integration capabilities.
Our comprehensive energy solutions cover power generation.
Submission and distribution we.
We also possess strong R&D capabilities for Green power development energy storage applications energy conservation and emissions.
Reduction.
Secondly, our energy unbound the region lay out.
The majority of our existing campus in the east as well as the <unk> develop campus in the west part of exactly in or around those computing hub designated in the policy of data and the west computing with reach traditional and renewable energy.
In addition to that our energy efficiency.
We have been running our data centers.
Efficient way.
Evidenced by a P E constantly at around one point to all way around.
Finally.
Our diversified renewable energy sourcing approach, we will have one has pursued a development or co generation local consumption solution when energy abounded region.
And on the other.
<unk> long term renewable energy procurement arrangement with long term strategic partnership.
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On slide 12.
Based on these market opportunities that our assessment on it.
And overseas data center industry.
We will leverage our competitive advantage.
Execute our growth plans and gourmet aspects.
Firstly, we will deepen our presence in APAC and emerging markets. Secondly, we will further advance our geographically out in key cluster was designated under the East China West Computing policy.
Thirdly, we will actively use alternative approach such as merger acquisition and joint venture partnership for client and geographical development.
Finally, we will pursue a diversified renewable energy sourcing model with our energy about regional layout as the cornerstone.
Let me introduce the above facts and details.
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First we will deepen corp.
APAC.
As you can see on slide 13.
On top of our existing 20 megabit service capacity in the region and Malaysia, we have an additional 96 megawatts of capacity.
Currently in Malaysia, and India.
And an additional five megawatts or business acquisition to be finalized in Thailand.
At the same time, we're also negotiating and evaluating other potential projects.
Our proven Hyperscale model is highly replicable overseas and our goal is to become the largest harvest skull data Center company in the Asia Pacific regions outside China.
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Secondly, we will further advance our geographically all key clusters designated under right is the beta West computing policy.
Slide 14.
We have established our presence in Germany, Alcoholicity as early as 2017.
And the city is now the exact cluster as designed under the latest a national policy.
Since our presence we have rapidly established our new generation of Hyperscale computing infrastructure to accommodate the development of the Beijing, Tianjin Hebei region.
We have built a solid foundation and junk alcohol and has promoted the local economy.
Currently we own a total capacity of 268 megawatts and John the alcohol and a total capacity of 2010 megawatts and thoughtful chunky problems.
Powerful enjoys extreme geographic proximity.
So the Beijing, Tianjin Hebei computing.
We possess about reserve.
Within these features which can be convenient for it into a more hyperscale data centers to meet a growing business demand from various customers in particular, our anchor customers.
We have also initiative our site selection process for potential computing infrastructure development.
In China in as early as 2020.
We have established healthy working relationship with local government to Nelson cancelled carbon which is smell a designated cluster Gansu province computing hub.
Designated under the latest policy.
We are currently planning to acquire 300 acres of land.
The development of Hyperscale computing infrastructure cluster in the region for the next three to five years.
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We will proactively.
Our geographical resources oil.
Volume base through active acquisition and JV partnerships.
On slide 15.
With entrance requirements would come and more stringent.
We expect those old inefficient medium and small sized data centers will become increasingly less competitive which will have market price in.
In the IV are written.
Turn to reasonable levels.
Once this happens we expect to see more acquisition opportunities.
Bridge, our capital Reserve technical Knowhow, and superior leading client profile to actively pursue and negotiate potential opportunities that can provide synergies to our geographical lay out client base and business model and to generate additional value for our long term development.
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Finally, with our energy about regional layout as the cornerstone.
We will continue to obtain renewable energy through different approaches.
On slide 15.
In the energy about a region.
We plan to stick with the local generation local consumption approach with our data centers in these energy a battle region has delivered the company will introduce strategic partners into the region to conduct local power generation well.
Well the company will assume the role of local power consumption.
Among with it along with US we will further strengthen our in house R&D capabilities and improve energy efficiency and energy storage technology.
Meanwhile, we will cooperate with Green energy enterprises, and the power brands for long term Green energy procurement of Rancho.
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The execution of our ESG initiatives has been widely recognized we have been sticking to our zero carbon principle.
And we are among the leading players and have committed ourself with the goal of using 100% integrated renewable energy solutions in all of our next generation of hybrid.
Operator in China by 2030.
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Under this four point growth plan.
Our dedicated commitment to all of our customers and stakeholders remain unchanged.
Which ought to be the leading industry player in terms of operational efficiency project delivery cost management energy efficiency and emission reduction.
And then as a result to deliberate outstanding asset return.
Financially, we have been delivering financial results.
Market expectation for six consecutive quarters since our IPO in 2020.
The company expects such momentum in the business and the financials will continue through 2022 and is highly covenant and its business and financial prospects going forward.
Certainly we're watching that closely.
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Yeah.
Thank you again for a comprehensive review of where the company is heading going forward.
Now, let me walk you through another exciting quarterly performance, but we have delivered.
To provide you a better sense on our project delivery client commitment capacity ramp up as well as geographic layout.
On slide 21.
We added 70 megawatts in service capacity during the quarter.
Italy attributed byproducts 11 Slash C is 71 megawatts projects located in Hebei Province of China.
Supporting the business of the anchor client.
We also put four new projects into our portfolio, namely M Y zero six phase one the phase two.
And 16.
17.
We have shared these projects as recent development in our last conference call and now they are officially put under construction.
M 106 phase one phase two located in Johan Malaysia has a total capacity of 60 megawatts.
We expect it to be delivered starting from fourth quarter of 2022.
They won't be supporting the overseas business of our anchor client.
Foresee in 16 and 17.
Located in Quebec, and Tianjin, respectively. Each.
Each with a capacity of around 14 megawatts and the wealthy supporting the top two Chinese cloud service provider, but we won recently.
These projects showcase how we have successfully extended our cooperation with clients from home and oversee and overseas market well at a same time embraced alternative and business model.
To obtain your clients.
With these new products.
You can see on slide 22.
We have brought our total capacity to 673 megawatts by the end of fourth quarter.
In service capacity by quarter end stands at 440 megawatts compared with 370 megawatts in the previous quarter.
For the 233 megawatts under construction capacity, we are currently expecting to deliver the majority of your 2022.
Well 54 megawatts of these scheduled for delivery.
The first quarter of 2023.
On client commitments on slide 25.
The four new under construction project in the fourth quarter brought us a total of 87 megawatts iwai capacity.
In addition, we received an additional 15 megawatts, Iowa from.
From the anchor quiet on our existing products in <unk> and greater Beijing region.
Altogether, making.
A total of about 102 megawatts from bi.
We're constructing projects.
As a recent development.
On projects in 2014.
Total of 52 megawatts was fully converted into contracts in the first quarter of 2022.
Demonstrating the solid relationship we are enjoying with the anchor client.
Now, let's take a look at overall commitment status.
For all our in service capacity, 87% of them with either constructed with Iowa commitment from the client.
Such ratio has been stable in the past.
Commitment for our under construction capacity is healthy as well with.
<unk> contracted and <unk> ratio by end of fourth quarter at 88%.
Again. This is the advantage that we're enjoying in our Hyperscale business, which is credible commitment from the leading players in the industry a long term contract guarantees a sustainable revenue stream.
Product ramp up on slide 28.
Had a 36 megawatt utilized capacity in the fourth quarter.
Bringing our total utilized capacity of 304 megawatts.
Utilization, mostly came from projects and greater Beijing area.
Utilization ratio by in our fourth quarter, and 69%, which is healthy and similar to previous level.
To be more specific the inclusion of new projects early ramp up stage in particular products 11th CRC has been the main contributor to our quarter over quarter utilization ratio change.
We're providing you a better says our current portfolio geographically on slide 29.
Which simply shows you, where we started and the direction we're heading for.
In China and.
We have made the proximity to energy one of our site selection principle, when we started the business we.
We have run the majority of our projects and greater Beijing area not in Beijing, but in particular, John Douglas City, Hubei Province in Datong, Shanxi Province, which are 103 hundred kilometers away from Batesville, respectively.
Currently as you can see from the bottom left Pie chart in.
In service capacity and greater Beijing area makes up around 90%.
Our vision is apparently being further testify was the publish.
Data, what's computing policy.
Our early judgment has provided us early advantage and we plan to achieve further from here.
Meanwhile, you may tell from the top left Pie chart, but we are on our way.
Becoming a company with greater geographical diversification.
Our overseas business already makes up 17% of our total capacity by end of 2021.
With our experienced local team our in house capability and our commitment for greater overseas. We believe more can be done going forward.
For more details in our asset portfolio you are recommended to referred to inflammation in the appendix of our IR materials.
We will also like to shed some light on our Hong Kong listing options.
Slide 33.
Recent regulatory changes released in November 2021.
Relaxed listing requirement for overseas insurers or Hong Kong.
Grandfather, Greece, or China issuers with certain weighted voting rights.
<unk> or <unk> structures.
Now apply for your primary listing in Hong Kong.
Specifically grandfathered greater China issue, but apply for dual primary listing or secondary listing.
Now to continuing to retained there are certain.
We did the voting rights or via your structure in the event of.
It is a subsequently delisted from the qualifying exchange on which it is listen or offered their conversion.
Secondary listing to primary listing in Hong Kong.
With this we believe we'd now has the option for your primary or secondary listing from Hong Kong.
Now our.
I will hand over the call to fully draw our VP of finance for financial update.
Thank you need now let me walk you through our call today and the full year financial performance.
Financials, we made healthy momentum on slide 35.
In the fourth quarter increased by 41, 4% year over year to RMB 711, seven meeting Stephen by the robust growth of the company is co location facility.
Full year 2021 total revenues increased by 58.
8% to RMB $2852 3 million from RMB $1831, one meeting in the same period of 'twenty 'twenty on.
On slide the statistic.
In line with the company's revenue growth.
Cost of revenue in the first quarter of 2021 increased by 33, 2% to RMB 435 claims for a meeting.
<unk> hundred $26 9 million in the same period of 2020.
Finally, driven by increase in utility costs, and depreciation and amortization expenses.
That he and the marketing expenses.
In the first quarter 2021 decreased by 32, 3%.
The 18 7 million from RMB can be seven 6 million in the same period of 2090, Timothy primarily due to lower share based compensation.
For full year, 2021, setting and the marketing expenses.
<unk> by 95% to RMB $89 7 million from RMB 99 point lending within periods of Kensington.
Primarily due to lower share based compensation expenses as well.
General and administrative expenses in the fourth quarter of 2021 decreased by <unk>, 4% to RMB 91 5 million.
<unk> 121 meetings in the same period of 2020.
For the full year 2021 general and administrative expenses decreased by $36 three to RMB 300, and then $59 5 million from RMB $564 3 million in the same period of 2020.
So primarily due to lower share based compensation expenses.
Research and development expenses in the fourth quarter of 2021 increased by 15 claimed 4% to RMB 14, 8 million from RMB 10, 9 million in the same period in 2020, so full year 2021 research and it.
<unk> expenses increased by 83% to RMB $75 three meetings from RMB 41, too many and it didn't.
Period of 2020.
Primarily due to higher personnel costs as the company continued to use that needs to research and development initiatives to further enhance the service offering.
Our full year net income.
For the first time in 2021 showcasing the efficiency, we are enjoying in our Hyperscale business model.
The net income of RMB 318 claims fall meeting with a margin of 11, 1% compared with net loss of RMB $283 3 million midyear 2020.
Looking into our core expenses and costs on slide 37, most of them are maintained with normal level as measured by percentage of revenue.
And other costs continue to make up around 10% to 10% of our revenue well, although adjusted SG&A as a percentage of revenue went from 14, 1% 2022 tough claim 4% in year 2021 damage.
Creating economies of scale as we keep expanding our capacity.
Utility costs, both in the fourth quarter as well as full year 2021 grew faster than our revenue as a result of increase in tariff price of around 15% in part of our grid Beijing region Timothy.
With kink in the cost control and economies of scale brought by capacity expansion our profitability continues to improve.
On slide 38, adjusted EBITDA in the fourth quarter of 2021 increased by six to eight 8% to RMB 400, adult <unk> 2 million from RMB 239, 4 million in the same period of 2020 quarterly adjusted EBITDA margin.
With constantly improving with the margin in the fourth quarter stood at a historic high of 51, 7%.
On a full year basis, adjusted EBITDA margin is 49, 7% compared with 46, 5%.
2020 details the GAAP to non-GAAP reconciliation on EBITDA and net income would be available in deciding on the appendix in our IR ppt.
Now, let's take a look at our cash and the debt position and our Capex on slide 39.
Capex in the fourth quarter was RMB $1163 9 million, adding up to a full year capex of RMB 3766 nine meeting.
We continue to work in our business expansion to meet the increasing demand from our customers by investing.
Around it.
RMB five two succeeding.
Our current construction data center delivery and also for the installation data center balanced payments for the full year 2022.
Our cash and a net position of RMB 5000, 241 million and RMB 5477 by end of first quarter, respectively, ending up in a net debt position of RMB $104 1 million cash.
Cash dynamic during the quarter was contributed by our net operating cash flow of RMB 297, 5 million and then mostly offset by RMB 1100, <unk>, meaning investing cash outflow.
Again, they grew with high quality healthy cash flow leverage and the coverage on slide 41 by end of first quarter. Our total debt to capital ratio was 35, 9% of a total debt to last 12 months adjusted EBITDA ratio was three nine.
There are two for clean coal in the previous quarter and <unk> nine in the same quarter last year of a lots of 10 months of adjusted EBITDA to last 12 months interest ratio by the end of fourth quarter was six compare.
Compare to five claims data by end of third quarter and of course, the end of same quarter last year.
Finally, let's take a look at the guidance.
We have beat our full year guidance for two straight years and we are currently holding a positive view on our 2020 to confirm it.
We have set the guidance for revenue and adjusted EBITDA.
2022 to be in the range of RMB.
<unk> thousand 72, 4170 meeting and RMB 2014 to 2100 attempting meeting respectively.
Implying a 45, 2% and 46 point.
Well, the six 5% year over year growth at midpoint, respectively.
This forecast reflects our current and preliminary views on the market and accretion that foundation.
This concludes our prepared remarks for today.
We are now ready to take questions.
Yeah.
Thank you.
Ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone. Unlike her name to be announced if you wish to withdraw your request. Please press the pound key.
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.
Please ask one question at a time.
Your first question comes from the line of young Li from Morgan Stanley . Please ask your question.
She went on Chile, which would then take a Wednesday, there's just no way and charcoal.
Total seat assignment.
That's really no.
You may go on future calls.
Tough question Nicole.
People with Ashish.
Now goldfish and outside counsel to poach your shareholders instead of cohort show in Asia.
So what's your takeaway orders, which are essential targa has actually turned.
Yes.
If I could.
Tissue.
And my question is that.
Regarding the companies.
Preparing for the.
Data west computing or whether changing the core customers have dedicated demand to be deployed in Gansu province.
Oh Wow.
We will see that come out thank you.
Okay.
I believe.
Mr Hoffman.
<unk> with.
With my colleague General Counsel joined as a translator under English part.
Hmm.
All right.
Well, maybe let me say it also she's done an attendant caliber has Jewish anti Houston G. M D C.
He John Schoen again, these are all of a sudden Andy yes.
When you talk to that and absolutely that's exactly what you're talking to your example would you now let me touch on each any idea what that dynamic will change as we go into Houston.
But you don't want me to say it doesn't it with Apple 10 days.
About <unk> of it you just don't want it.
And therefore don't here in Tennessee, cultural issues aren't doing that kind of thing.
So I can get it.
Well Mr. <unk>, sorry, it also achieves that goal with JD and <unk> been illustrated that the Samsung Ita's hometown.
Hey, Tony.
<unk> two dee.
Do you get to pick it up.
Youtube when you see it.
You guys have a machine that's underneath when they saw him in the use of <unk> switching.
Okay.
Translation from Fatherless word.
Thank you for your question, we believe that <unk> that is data less computing policy, we actually enjoying the unique first mover advantage.
Based on our thoughts on the nature of the data center business, which adds to effectively converting electricity power into computing power, we have allocated resources power down there, we just like <unk> Dot Hill in very early stage.
We have launch our first computing classroom charnock RCT in as early as 2017.
Currently we own a total capacity of 268, Mike Watson, John Jacko, and a total capacity of 210 megawatts and got home a lot of it sounds like how is now becoming the.
Exact computing hub is designated and or the latest national policy.
Based on our estimation, we are the largest carrier in Gainesville, IDC solution provider Amman, who owned facilities in the east part of the designated National Computing Hot East computing comp.
Well on within this area, we have banked abundant land resources Empire facilities.
Strengthen the client and government relationships and paired with our food facilities, we believe our advantaged won't become more obvious in the next round.
Well my condo.
And part of it.
I will not do anything with that one.
It comes with it.
Okay job with them.
When what kind of all you got to eat up all about saying Houston <unk> Syngenta only don't who she is send out we've got sort of JDM till deal.
Their thoughts on the booties are figured how you'll either.
Right.
Yes, we can also see some very positive news on so now since you're calling is actively applying for up and coming in one of the completed the national computing Clos and are gone. There is no policy, which is another very good news for our facilities based on iron.
Currently out.
Well, you said, Neil Mcmahon I can say well job she's done well got tentative zetia.
You don't know MTN polygyny Julien good off against you didn't gender cultural change a long ago.
Joshua against it.
And then.
Uh huh.
Yes, John .
Yeah.
So we don't see a cohort while she would you issue.
Okay, Gee Copel Benton three E G. The usual.
Two quick Keelhaul Schiebel Juliet.
As usual.
No no change in the tissue.
While <unk>.
Cleveland des Pennsylvania, which answer chip would you generally sir.
Yes.
Payback.
It turns out.
And we also see that under the new policy.
The core net.
Nexsan Netcom and Oh.
High speed.
Internet.
Traction well also.
<unk>.
Are they prioritize by international construction plan and also to speed up.
On the current National resource policy. The power policy is also pushing the whole economy.
And towards the western part of China.
I also see that because of the E. S G requirement from.
Our clients themselves. They also have the drive to deploy more of their computing centers into the western part of China.
So with with all of those factors, we can see that the new demand is shifting.
Gradually towards the western part of China.
And that becomes the reason why we deploy our resources in Nevada.
By picking a teen young as our lunch point.
And we will proceed with our with our plans.
Plans with caution, but we are confident that this is a good move.
Great. Thank you. Our next question comes from Tina <unk> from Goldman Sachs. Please ask your question.
Oh for sure.
Of course, you can.
So that should I go down here.
Our when tissue is outweighed by any town to a genius I think you'd realize that much.
I'm, sorry, I did learn she Tianjin it you'll know Chile, Jason.
Uh Huh cookware that thank God, she had come on man.
Oh I can cope with July if they can come up with I think Josh Joshi.
So she can T J Busch.
It sounds like intelligent pump.
What kind of share you got it.
In Hong I hope anti shrunk in Japan the couch.
That didn't translate them. Thank you very much for your time management and congratulations on the very sorry without so my question is regarding our customer diversification progress since our third quarter results has there been any customer expansion progress. Besides our core customer also oh.
The market price competition has.
Has it become worse better or similar.
Versus before thank you.
Thank you Tina I think.
Sure.
Our Mr Haack, Mr. Puzzled won't be the best positioned to address the customer diversification progress we made since Q3.
Our group Europe .
Sandy will address your questions.
Isn't dynamics. Please go ahead Mr <unk>.
Oh bundling you shouldn't make shortly.
We don't want to sell hotels onshore you should probably think on approaches.
I wanted to ask why is that gives us more day, you're doing in casualty Westwood you do eases that.
With that I'll pass on Windows, and the need for Egypt and Israel.
That's what I was looking for would you hear about the calls agenda on the easy the new N Gen cohort equally.
You called it out and we've done an agenda in terms of that you won't do it.
You should talk to them and so you do we are doomed.
And he got the lingua Chen public order.
The assembly of Youtube Mackenzie.
Uh huh.
Kibbles 'n, sending me up with someone.
Yes.
Debate.
Okay.
Okay.
Okay.
In terms of our efforts in the client diversification.
Since I joined the group.
2019, I have been working on that and pick my eyes.
Lots of effort into this on.
And other than a continuously growing demand from our anchor customer. We have also secured are there international cloud providers and the leading national.
C.
Cloud service providers.
Very.
The recovery in the fourth quarter of last year. We have also when the bad debt one of the top two PRC cloud provider.
New projects.
And those contracts are now already being in construction.
Yeah.
It's really I mean, there's just so much in Jamba Chilean society.
Demand would disagree that usage, our consistency Tony Cynthia.
Yes.
Yes.
Congratulations Jim.
Sure.
Hi, Ashish.
Hi.
She's happy to Houston, which is the peninsula do you want me.
Yes. This is Jim.
So yeah well.
They realize that there is a pass through of 100, yeah. That's what I was thinking it would be the bundle yeah.
Do you have the more shutdown women go ahead Glen.
Yeah, Let me do the churn to answer that so he wasn't much acura Nissan is actually sometimes you get a cookie.
And number two of the seven new cities.
As we found yes sure what Linda.
Oh, He Panthers factory at Apple <unk>.
<unk> 14, chocolate upfront, Austria Chan Chung Li clean energy incentive in consultation with the shiny object.
I can tell you from our clients.
So I would hesitate switching gears my first point is last year with us.
In the east part of China, and also in the southeast part.
There is some irrational.
Market behavior, and the investment and also the activity they gave up some opportunities, but you know for the asset heavy industry investment that has its own logic and the short term behaviors will not be sustainable. We also observed in the recent time that market has been gradually gradually be back.
The rationale and we are confident for the future and second name is regarding switching data.
We provide unique lifestyle full stack solution and this very unique business model, which made it very hard to be benchmarked against other surveys provide us so.
Price has been very stable and steady and certainly you know majority of our contracts are long term price pre locked in for 10 years. So the.
Last year saw the fierce price competition has very minor impact on <unk> business.
Okay. Thank you.
Thank you. Our next question comes from Arthur Lai from Citi. Please ask your question.
Arthur You line is open please ask your question.
Hi.
Sure Glenn Eaton, a whole year contemplate any tango tomorrow, how does it get EBIDTA margin.
It was a negative watch or asset light.
Ah shall win T.
They invest a window a.
Lincoln because its a woman to cause that you'll see the kind of thing diesel you can train sensitive who not city men. She says that that's a question just as it can.
Indeed.
Nah plenty Simpson Mccann Jinyan.
So with that he holds at the penthouse yet this year.
Indeed attendant in Seattle to citizen go quiet for a moment.
Tim does that mean the edge.
And Guy and Keith also means I thought that Louisiana.
This is <unk>.
I will translate my question. So are the most frequent question I had.
Uh huh.
How the manger.
Our forecasts are.
Upcoming years Chinese.
Chinese.
Cost and then.
We have H B Fuller.
We use more green Paul Thank you.
Thank you Arthur I think.
I can address these questions you know about our data center deployment strategy as always.
In those energy our founder regions and also in this range and what we build out data center Hyperscale is the major adverse up basically the economy of scale, so the more scale and more data.
Into the same location.
The less per unit costs, we're gonna have you can see from the fourth quarter.
Figure so our overall per unit.
Expenses outside you've hit it at cost or dropping down because they'll simply because.
The art academies, so even around the last quarter, we saw the national level power shortage of driven the price of power.
Power price increase actually already beat our bottom line, even increase because of its power price increases can be well offset by hour.
Diluted the per unit cost due to economies of scale and so we built this up.
Power pricing into our 2022 guidance as well as you can see even with this the power.
Power price situation in the most conservative assumptions.
Our 2022 guidance will still provide us a very very healthy and the heightened our margins in terms of renewable energy.
Like golf thoughtfully introduce stuff.
<unk> development plans.
Think of ESG initiatives is one of them all four major growth plan, we're going to seek a multiple messrs alternative to deploy our ESG initiatives in the region, we operate namely data regions in the first place to strengthen our position and then in the three to five years to extend.
Got deployment into west of computing like its Xi'an city. So with this deployment I think we are well positioned to attract more investor into green energy generation side, and they become a local generator and we become a local new energy consumer and that way I think about.
I'm going to provide long that situation.
Our cost for our strategic partner on the generating side they have a better return secure this thing out.
Function.
And actually have the lowest green energy cost in the long term.
We asleep.
The other way too.
Energy is toward the power break equation of the supply and demand situation, we believe with more green power generated through the power of risk and the overall trend of the renewable power pricing in future.
Close to the traditional energy or even trending a little bit lower in the future.
What happened to them.
And of course, you saw share just your thoughts on how far do you got to factor that into July .
So my question is for <unk>. This afternoon, if I didn't tell you about which is all about.
<unk> send out junk prototypes and I'll kick them out each other.
Kidney function, suggesting what color. He can go through that you know again comeback in English as well.
Jackson, Oh Gee, one limitation.
Oh My gosh it was.
Sure.
She doesn't want maybe to MPD.
And I want to introduce Todd I can't get into that and she has some back kitchen.
So I'll help translate the sandy supplemental large so there are multiple ways to acquire green energy. The first one is for their own self generation self use as you'll know gene data is the first one to adopt this model Shanxi province, with their green energy generation for that 150 megawatt.
And then.
Secondly is for the Green energy transaction in different national.
Provincial.
That carling's platform and third one is the Green energy certificate and the first two types or the self generation count South use model and then also saw that transaction at national platform, a providential platform mismatch possible to nowhere to green energy cost.
So in the future Jim data with a top magic with channels to acquire Green energy and to increase our ratio of the renewable energy and to try to leverage.
Leverage and to lower our energy costs in future.
Thank you.
Thank you. Our next question comes from Mi ran Li France. The ICC. Please ask your question.
Hey, Glenn anytime Uh huh.
Sure. Let me personally he goes down and they don't show as pizza and drinks.
No longer is that fair.
So she will go on the taxes I recall that we wouldn't do the Cheyenne mushy negotiate change I should hold up where I'm not sure we don't seem to the moisture.
Oh sure.
Let me translate myself so on the background of the policy, which channel more computing resources found it.
Yes, two questions.
Yes.
Could you elaborate more about how to take advantages with our folks back Hyperscale business model.
Okay.
Okay.
So Judy the typhoon <unk> that still sits there at all but you also should.
So when you say downwards to the women and men who had underway in ECS Lee.
A woman day total she St. Jude on the Houston affiliates jointly at a high single <unk>.
Don't look at any time.
So I'm not going to go to them with you and how you work.
<unk>.
Well yeah.
Jim.
And that way from a door they didn't choose a time sheets, rather than teaching johar green Mohawk I'll jump off.
So a woman east is that changing now.
They usually are you pushing the use of Io woman phase.
So Don <unk> Jensen again, a total of almost any managed Internet E G.
<unk>, it's usually an elite now two quick one.
Is that the language. It is that she would you in a general Higgins.
I also wanted to use them.
Thank you.
Yeah.
Okay.
So to your question.
We have already touched upon it.
Our previous response.
And I'll say any reduction in our slides.
But to sum up we believe that the most important.
One advantage that we have is that we have already established a pretty extensive lay out is right in that.
At least one of the designated each computing.
We just found out Commscope team.
So from the interpretation.
The national policy.
And we believe that the country like the government is trying to push in those.
Designate of computing in half two.
The ablation a cluster.
Computer cluster computing faster, which is sound.
The ball, which.
Which is down on how the economic of scale and also have a standardization model. So that it can be a two.
To achieve the most.
Most benefit of the policy and that's what we have already done and through our marketing.
Standardization as or are on.
Modularity model since the very beginning and because we have been doing that on the experience.
From the operation and business development that we have been accumulating can certainly gave us a first mover advantage not only to expand our operation in the east eastern side of tightened in those competing hubs, but also transport all of those are.
Mature operation experience in our exploration for the western part of China. Thank you.
Thank you. Our next question comes from Albert Hung from J P. Morgan. Please ask your question.
Quentin assignment.
The conversation.
Let me tell them I can't call it a panel Halloween.
Lincoln County, all types of things.
And also we see something like Atlanta.
Joe can go down to pay wallets, she can sheet so well.
Won't that won't tell me sort of team later today.
Okay Thats helpful.
It was sent home center channel and it's a long shot.
I mean listen once you kind of try ITC hanging it seems to encourage consolidation.
Okay. That's helpful. Thanks, seeking senior chicken tastes really good.
So.
She does she's trying to gain share.
You can finish it later.
She does.
Sure.
So.
Okay.
And that would be talk same thing.
Let me translate my question, the new China policy into.
<unk> placed come Q4.
More gas injured people looking to know in tier one cities.
Every channel had from first mover advantage in three to five years how could.
Could you just need to come back and thanks capping the weighted average.
Some of them get access to the Resourcing west could be easier versus staffing tier one city does it imply more fragmented Marquis times Kathy in the future. Thank you.
Thank you.
Very interesting so many interest.
Any questions on this.
The recent policy on these data and the West computing and we are very happy to answer all of them I believe.
The best person to answer this again.
Our CEO Mr. Wang Please go ahead.
Because I know that came in and they are doing one you wish him when some retention tool and.
And then what you do.
Now once you don't see yourself.
So is that when we lie.
Now what has happened to us again.
But that is somewhat beyond what all of them into much of the ecosystem.
Oh I'd have to ultra low sugar sugar.
By myself be central to that at all.
Well, you'll have not changed with what they want to touch on sort of what you're calling the hotel and conference.
Similar to ours.
Sure.
Well, it's a win here.
Okay.
Would you do.
Sure.
Couldn't daughter soon.
Got you really couldn't do that the Xinjiang to you shortly.
<unk> see it yet, but he will do it in to a chain.
Each entrance to the <unk>.
Yield is for novel Fluke leader. So you don't see pension is wave hasn't changed.
<unk> will add could you like huh.
But you know women.
Don't see that Ashish.
Global with her she was too that you didn't change it wasn't.
A woman ICL Tcl manageable near Shanghai user.
Element you can either through hot ticket Schinder Suzhou.
Well I think with slingshot.
Turning to financing.
Hello.
Cancellation for weapons works on so.
Thanks for the question and in the <unk>.
Short term, we kind of anticipate that the new newly emerged demands well be more on the allocated into the designated computing hops in either the east or maybe the west.
On part D C DS and or the policy.
And also in the short term, we anticipate that the.
Demand in the first tier cities mine not.
Migrate on but in the long term, we still Wanna.
And emphasize that our first mover advantage and how that would benefit us too fast to be the best one to be the go to person enforced choice for our clients to best meet their demands.
Yeah.
I will Miss obviously later and if it was linear.
Just a housekeeping.
How do you think she's just done one night it has to adopt to answer them.
Each of the key is how quickly EPS trajectory before the Dupont the changes.
Yes, yes.
Most of these regions.
Sure.
Now can you give us a couple of these include a suite of Jefferies.
Yeah, Thanks, James with Glioblastoma attempting Gamestop, I mean Uh huh.
Sure.
Exactly I don't know what are your attrition he would it be back with you mentioned that youre comfortable with that aren't getting the P&L that she wants.
How do you see the Jo mill and it could be Asia. It seems like <unk>, Chile for me. It took a couple of key Guangdong Shanghai sort of walk through them to basically hover.
You can pick up.
Passengers on lifestyle somehow Luciano switching channel Vinci Ginger.
She wasn't cheetos some wholesale funding.
Hello, Michael.
So that's essentially right.
I cannot.
Accomplish one other one.
Let's hope we what.
Okay got it.
I think you got some additional items.
Okay. So it's all fine.
Yeah, So I'll help translate changes, whereas the first one this national guidance National policy is highly aligned to lead to accumulate as a strategy for the long run.
Among a few years ago, we have been engaged in the Hyperscale module into areas, where there is abundant energy and the sufficient to lender resources and this is a unique advantage for the Hyperscale business model.
Now to do a hyperscale are pre tax you have to have the capability for the site selection or the planning for the technical design and the research and the development and the delivery and the maintenance and the multiple capabilities and this is the gene.
Gene data has for a long time. It is not everyone can do this in a very short term and also you know in the areas of where this is a sufficient to fall down.
Sufficient land to resource. It also requires the ability for the energy slowdown.
Electricity integration capabilities.
For the power generation transmission and distribution and gene data has accumulated a lot of expertise and the knowhow in these areas as well as you know the competition has always been with gene data. We are the first mover in the John Jacko area and even though in the reason.
Yes, yeah multiple competitors in this area as well, but it can data is steel.
Either in the scale in the technical Knowhow is still in the leading position in these areas. So thank you for your question.
Yeah.
And I would like to add one more point.
I would like to add one more point of that is actually in our business I think our government relationships is super important.
And the reason we operate either in J&J Alcon thoughtful because we have been there in the past three to four years and we become one of the largest.
Enterprises for the foreign capital Enterprises.
And make a significant contribution to the local economy in terms of on a qualitative side, helping the local economy converting from a more traditional agriculture put digitally comedy on a quantitative aside would help provide a large number of unemployment locally and also we've become one of the significant tax cut.
Debuted or GDP contributor to the local government. So as the return of the government Grant US a lot of prefer a privilege and a policy in terms of our guaranteed a land resources and the power of locations in those regions. We believe without with this relationship and we also have certain.
And it's the corporate or new entrants into the area.
Great. Thank you next question comes from Harry drunk found the UBS. Please ask your question.
Oh Gosh, you got any telephone if you haven't got hit your one two and that you would want to.
Turning yourself why don't you kind of are they argue unless you know something gulfport shall anyhow constantly chasing the Shang Koo Shanghai smoothly.
Well I don't know San Yeah consulate.
Mr. Jones, you, though Jewish where you don't usually only with somebody else or.
Well thanks.
Thanks management for the sharing an opportunity to ask questions.
My question is are there are quite some data centers.
Delivered in 2022.
What is the expectation of the customer moving speeds for these new projects and what is the expectation of the overall utilization rates for the company in the next two to three years. Thank you.
Yeah.
Yeah. Thank you for your questions I think that kind of drove this question maybe for Sandeep.
I have some color I think in terms of moving state speaking to all ramp up speed.
Are you still seeing about the our outreach moving rate or ramp up rate is between six to nine months for a majority of our construction business.
That's number one number two in terms of utilization, we believe that because we're going to have a lot of new product to get Denver in 2022, we'd expect our utilization.
Remain at around the 70%, maybe a high 60, or maybe a low 70%, but as the more product going to into the mature and fully utilized.
We utilized a state we believe our overall utilization rate for the entire portfolio kind of be much higher in the mid to long run.
Just any time you've laid out.
Although total sort of played out.
Got it.
Great. Thank you. Our next question comes from Chi Tsang Chi from Citi. Please ask your question.
I can't go into too much again.
Oh, yes.
Yeah.
On the kind of the hotels on a like I don't see actually.
Archie and Kim who currently you're saying.
So you shouldn't count I'm, not sure who come back from Ciena Hot So that's held onto them.
I will translate my questions and.
Standardized guidelines do have strong growth in the midterm and the time to invest more on your cloud computing. So just wondering how management to see the contribution from the bad times in the midterm.
Yeah.
Thank you Mellissa and as you get off of it.
Yeah.
[laughter] may get the data soon from our competition.
So you can see it.
Jeff Hutchins, our grocery industry dollar feature.
Chris will talk about that.
But of course, you seen any of them and this is something that I feel comfortable at Tcf.
You cannot discharging and so one of my highest dynamic inbound IC, which is cool.
Davidson.
Yeah, all quite how do you jump off on how the Hawaii EMEA chicken pita.
Well see it sometimes you can't even overheating from Heartland and careful a transaction just to say hey, there was a bit hawkish on either traditional C. A woman that sure Kimi the biological Cal number don't forget with all the capacity and PTA.
She said it was a pretty challenging market I'll tell about Hawaii and she got unless you want to have you all had in both geographies. Okay. That's helpful.
Okay.
Yeah.
Okay, So I will translate.
Well now <unk> has been very essential they're important customers for <unk> data and we maintain very good relationships and also in the past.
<unk>.
<unk> has contributed a large portion of demand and then also we see under construction pipeline.
Still a lot of.
Oh that is not from <unk>. This is due to their very strong business needs, especially for the new business initiative on the cloud computing and the overseas expansion and.
Well, there's two new business initiatives, we will closely cooperate with by those together to support their business expansion and to provide infrastructure for their future business growth and also you can see that for the oversea Oh, we're going to deliver another additional 60 megawatts.
2022.
This is due to the strength of demand and now we are in a position to deliver.
We deliver this as soon as possible.
Thank you.
Thank you next question comes from Edison leave from Jefferies. Please go ahead.
Oh <expletive> physical initial let's say so there's also.
The other one teachers, who are content to shouldn't your MSR.
China DCT to Toby you got a lot of people.
So tele telco posture.
Excuse me could you tell me shelf, which will hopefully go to normally high red hallway Tricia somebody out somewhat.
So my question is about MSR, because I saw that the MSR in the fourth quarter of last year actually fell more than 20% both year on year and show in Q. So I would like to know what was driving that and also what is the longer term outlook on the MSR trend. Thank you.
Yeah.
Yeah.
Cindy 70 of all would you want to address that.
Now what does this robot Oh man I myself I'm going to go through them I thought shouldn't catch.
Kathryn <unk>, our Moca G. The jackfish, we can see a China also point you to read any call normally enjoy the Johnson <unk> Johnson.
Thank.
Thank God and ensure the damage from that we can begin.
These are truly kind of central Hudson La go go into that mess up and should be considered a mud.
Industrial yesterday.
Okay.
I'll have translated to English first MSR it at company level and at a weighted average of different regions prices as you know in different region surprises different due to the different utility cost and the different other continuous caster smell in loss last year to first quarter.
There Shanxi province, we believe either.
To bake a hyperscale data centers and this has been in the position to.
Dragon J M S a little bit lower as they continue to cause these much lower emissions you region. You can see the EBITDA margin is still increasing in the fourth quarter of last year reached a historical high of 51, 7% and then so the margin is very still very robust very healthy.
Yeah.
Thank you once again, if you wish to ask a question. Please press star one on your telephone keypad.
Yeah.
Yeah.
Yeah.
We have a follow up question from the line of Edison Lee from Jefferies. Please ask your question.
I was just what are your local country to work because your child challenging contractual Aruba, how shall fancy says it's available.
I'll use 10 job jumps in here and how would you go for example does it go show Fei <unk> tissue constitutes just to help with the iron quick ROI fee, how shell decided to go for it but yes, Hello, Hi, Yakov.
So my question is about the IRR of projects in the western part of the country. So as management pointed out.
Because of lower utility cost and maintenance cost so the headline MSR in fancy actually is lower. So my question is what are the strategy projects are all could be even higher than those in her pay for example.
Thank you Edison.
I think our I R.
For deposits in both regions, including club and.
I've done the alcohol and the thoughtful only call.
I'll turn to alcohol and ensure.
Hum of much higher than industry average.
And yes, the IRR for the project in these regions.
A similar profile.
Alright. Thank you. So we have reached the end of the question and answer session, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may all disconnect.
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