Q4 2022 Chindata Group Holdings Ltd Earnings Call
Speaker 1: You.
Speaker 2: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11.
Speaker 1: Yeah.
Speaker 1: We.
Speaker 2: and lower your hand during Q&A. You can dial star 1 1.
Speaker 3: Good morning and good evening, ladies and gentlemen. Thank you for joining and welcome to TUNE Data Group buildings limited fourth quarter and full year 2022 earnings conference call.
Speaker 3: We will be hosting a question-and-answer session after management's prepared remarks. Please note that today's event is being recorded.
Speaker 3: I'll now turn the call over to first speaker today, Mr. Don Cho from Investor Relations of Chain Data Group. Please go ahead Don.
Speaker 4: Thank you, operator. Thank you, everyone, for waiting. Welcome to Chinook, fourth quarter and full gear 2022 earnings conference call.
Speaker 4: This is Don from Investor Relations team of the company. With us today are Mr. Hua-Feng Wu, our CEO , Mr. Nick Huang, our CFO , Ms. Zhou Yijiang, our Senior Vice President, Finance, and Ms. Joy Zhang, our Vice President, Legal and Investment.
Speaker 4: During this call, Nick will take you through the costly review of our operation performance and though he will present our financial results.
Speaker 4: The management team will be here to answer your questions afterwards.
Speaker 4: Now, I will 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 the number of risks and uncertainties that could cause actual results to differ materially. For more information, please visit our website.
Speaker 4: Please refer to the risk factors discussed in our findings with the NTC.
Speaker 4: During this call, we will present both GAAP and non-GAAP financial measures.
Speaker 4: A reconciliation of long gap-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.shingdatagoop.com.
Speaker 4: We have also updated our quarterly presentation on the company's investor relations website, which you can refer to as an important supplementary material for today's call.
Speaker 4: Without further ado, I'll now turn over the call to Nick. Nick, please go ahead.
Speaker 5: Thank you, John , and good evening, everyone. Now let's start with some key highlights of the fourth quarter and full year 2022 performance.
Speaker 5: On slide four, we added one new project, one additional 50 megawatts new capacity in the fourth quarter.
Speaker 5: Grading our total capacity to 871 megawatts. And the total number of data spenders from 32 to...
Speaker 5: We put two hyperscale data centers into service in Malaysia, bringing our total in-service capacity to 613 megawatts, an increase of 34 megawatts during the quarter. Demand and ramp-up remain strong and healthy. We received an additional client commitment of 100 megawatts in the fourth quarter.
Speaker 5: training our total contracted and IOI capacities to 800 megawatts, leading to a client commitment rate of a total capacity of 92%.
Speaker 5: We added 71 MW utilized capacity in quarter, bringing our total utilized capacity to 525 MW, and a solid utilization rate of 86%.
Speaker 5: We completed a 300 million senior nodes unsecured offering in February . The nodes due 2026 with a coupon rate of 10.5%.
Speaker 5: We have successfully opened another new financial channel for the company and their such macro environment with fragile sentiment and will further support our project development in China and overseas. Top and bottom line momentum remain really strong. The new in the fourth quarter was RMB 1,390.3 million.
Speaker 5: which is a 77.8% Euro-year growth. Adjusted EPDOT was RMB 720.9 million, a 78.4% Euro-year growth, with a margin of 51.9%.
Speaker 5: For full year 2022, revenue was RMB, $4,551.7 million, a 59.6% year-over-year growth, and 2.7% above our guidance upper range.
Speaker 5: Adjusted EDTA was RMB 2,374.2 million, a 67.3% of Eurobia roads, with a margin of 52.2% and 5.1% above guidance upper range.
Speaker 5: Roking into year 2023, we expect full year revenue to be in the range of RMB 5,880 to 6,080 million and adjusted EBITDA to be in the range of RMB 3,000 to 3,000...
Speaker 5: 110 million, which are around another 30% increase from year 2022. We will go into details of this later.
Speaker 5: Now, let's take a close look at product delivery and construction on slide seven.
Speaker 5: We continue to work on a tight and challenging timetable to make sure that resources are delivered timely to support our clients.
Speaker 5: Our delivery is generally in line with the original schedule. We put two projects into service in the fourth quarter in Malaysia, with a total capacity of 34 MW.
Speaker 5: One of them is MY03, located in Kuala Lumpur, supporting one of the key international clients for its regional development. The project is now 100% committed and ramping up at 25% due to elevation.
Speaker 5: NY06 Space 1, whose details we have shared during our previous call, is supporting the Anchor Client overseas business and is now 100% utilized.
Speaker 5: We put one new hyperscale project under construction in the fourth quarter, CN21, with a design capacity of 50 million.
Speaker 5: 50 megawatts and located in our Shanghai campus is scheduled for delivery in Q3 2023 and intended for the incorrect client.
Speaker 5: The project has so far received 38 megawatts of IOI from the client. With the above changes in the quarter, as you can see on slide 8, we have brought our total capacity up by 50 megawatts, reaching 871 megawatts by the end of the fourth quarter, with 613 megawatts in service and 257 megawatts in service.
Speaker 5: under construction.
Speaker 5: For the year 2022, we have put a total of around 173 MW into service.
Speaker 5: Among the under-construction capacities by quarter-end, we currently expect another 214 megawatts of them to be delivered in the year 2023, which is quite a challenging task. Our team in China and overseas are working very closely to ensure our supply readiness.
Speaker 5: Now, regarding demand profile on slide nine.
Speaker 5: We continue to strong China and oversee business momentum from our key clients.
Speaker 5: Our total client commitment increased by 100 megawatts in the fourth quarter, mainly contributed by four major projects in China and Malaysia, supporting two of our key existing clients.
Speaker 5: Specifically, we received 8 megawatts IOI for project MY03 in Malaysia, supporting the key international cost, making the project now 100% committed.
Speaker 5: We received another 92 megawatts IOI on existing projects CN20, CN21, and FY06-53 in our Shanxi campus and in Johor campus to support the anchor clients.
Speaker 5: Meanwhile, 49 MW of IOI was converted into contracts during the quarter, including 38 MW from CN20 in Shenxi campus and 11 MW from CN19 in Hebei campus.
Speaker 5: For the year 2022, we have received a total of around 211 megawatts of client commitment, leading to a 35.9% year-over-year increase in total client commitment.
Speaker 5: As a natural result, commitment profile of our asset portfolio remains healthy. On slide 10, for our existing 613 megawatts of in-service capacity, 96 percent of them are committed by clients in either contract or IOL by the end of the fourth quarter. The market was 96 percent in the previous quarter.
Speaker 5: differentiated client base. And as we have been emphasizing relentlessly, our unique contract profile brings long-term business visibility.
Speaker 5: By the end of the fourth quarter, over 90% of our contracts are in 10 years' term or longer.
Speaker 5: leading to a weighted average remaining term of current contracted capacity of 8.3 years. And furthermore, from now to the end of 2027, we only expect less than 7% of our existing contracted capacity to expire.
Speaker 5: Now, coming to customer move-in on slide 13, we continue to leverage on our unique delivery capacity to accommodate client rapid move-in, and we are seeing an increasing contribution from our overseas business.
Speaker 5: We added 71 megawatts of utilized capacity in the fourth quarter, bringing our total utilized capacity to 525 megawatts, compared with 304 megawatts in the same quarter last year, which is 72.5 percent year-over-year growth and a 15.7 percent quarter-over-quarter increase.
Speaker 5: Quarterly move-in was contributed by projects in northern and eastern China campus, supporting the Anchor Client, the key international client, and the Chinese Cloud client, as well as contributed by all of our overseas projects in India and Malaysia, supporting the Anchor Client and international clients. On specific project level, the
Speaker 5: CN14 and CN18 reached over 90% utilization in only two quarters of operation.
Speaker 5: And milestone MY06 phase 1 is almost 100% utilized in the first quarter following its opening.
Speaker 5: Looking at the source of utilized capacity by region on slide 13, overseas business is starting to contribute more in the fourth quarter, accounting for 9% of total utilized capacity.
Speaker 5: compared with less than 5% in the previous quarters. Given such rapid ramp up performance, our utilization rate improved further in the fourth quarter, climbing to 86% compared with the 78% in the previous quarter and 69% in the same quarter last year.
Speaker 5: Meanwhile, based on our existing client commitment, we have about 275 MW of client commitment unutilized by end of the fourth quarter, which is around 52% of our currently utilized capacity.
Speaker 5: We are currently performing. The company has also been working on necessary financing to support our supply build up.
Speaker 5: We have captured a key market window and completed our 300 million senior notes offering on February 23rd.
Speaker 5: We opened a new financing channel for the company on top of our project loan financing and will provide more financing flexibility covering the full life cycle, especially the early stage of the project development in China and overseas.
Speaker 5: Despite fragile market sentiment around micro outlook, we continue to attract significant investor interest during two days' telegraphic shows and have received unprecedented strong support from high quality international institutional investors, including global asset managers and patient homes.
Speaker 5: The note is due 2026 and bears a coupon rate of 10.5%.
Speaker 5: On a supply side, in our Linqiu campus, the construction of our self-built 220 kilovoltage substation was completed on February 13th. This is a very straightforward snapshot of how the company has been leveraging its in-house power-related capability.
Speaker 5: its energy-abounding region layout from day one to ensure consistent key resources efficiency in greater Beijing region to accommodate future demands.
Speaker 5: The construction adopted modular technology and was completed in only six months, setting a new record for data center industry.
Speaker 5: The substation enables direct voltage transformation from 220 kilovoltage to 10 kilovoltage.
Speaker 5: obtaining the first main rate related talent in data center industry, and saving up to 60% of substation compared with traditional solution.
Speaker 5: Most importantly, the completion of the substation paved the way for the future capacity expansion of our Ningqiu campus in Shanxi as it is capable of supporting the energy consumption of up to 360 IT megawatts.
Speaker 5: Regarding the company's involvement in the National East Data West Computation Plan on Slide 16.
Speaker 5: Starting from the very beginning, we have adopted an active attitude and stance in joining the development of the Xinyang cluster in Gansu province, so as not to miss such historical opportunities. Action wise, we have been moving forward our development plan prudently.
Speaker 5: making sure that we make well-timed capital expenditure positions. Along with other key enterprises, we attended the opening ceremony for the cluster hosted by the Gansu municipal government on February 22nd and signed strategic cooperation agreement with the local government.
Speaker 5: We have planned a campus of 150 megawatts there on a land of 300 acres and will prudently move forward with the relevant CAPEX expenditure along with development pace of the entire cluster.
Speaker 5: Currently, we don't expect any material relevant cap-acts in Qingyang in the year 2023. So before I conclude my part, I would like to leave several key takeaways for the market.
Speaker 5: On the demand side, we still feel good about the momentum coming from our existing client base.
Speaker 5: The number that we presented on client commitment and utilization dynamics are very, very good reference.
Speaker 5: We believe this has something to do with the data intensive nature of our science business.
Speaker 5: In particular, the anchor clients. If we further take into consideration our unique contract profile, you should feel good about the long-term business disability as well.
Speaker 5: These all together will serve as a comfortable buffer for the company on further client diversification.
Speaker 5: On a supply side, we are always ready in our key campuses.
Speaker 5: We are leveraging on our operation history in these regions, which are right in the East Data West Computing cluster.
Speaker 5: and the unique role that we played in contributing to local economy, and our in-house capability on power infrastructure to ensure that resources can be locked in advance to support future demand. Geographically, we currently highly value the Southeast Asian market, and we are on the right track on geographic diversification.
Speaker 5: Looking at the pipe chart on slide 18, overseas utilized capacity makes up 9% of company total capacity by the quarter. And in the longer term, and if we look at contracted capacity or total capacity, overseas can contribute to around 20%.
Speaker 5: On top of that, and if we take into consideration pricing difference, such computation can be more. At this point of time, the company is allocating dedicated resources to project MY06 in Xoho in order to make it a flagship product and a good opening in the local market. This actually reminds us how the company has started its business in the Hebei campus in early days around...
Speaker 3: performance. Generally speaking, we have maintained a very healthy financial momentum in the past quarter of last year 2022. Our revenue growth in the fourth quarter we remained very strong and supported by faster ramp up from both our China and overseas business. On slide 23 revenue in the fourth quarter.
Speaker 3: increase in utilized capacity. Look at the table on the right-hand side. Overseas contributed to 9% of total utilized capacity in the fourth quarter compared with less than 5% in the past.
Speaker 3: Revenue in the full year 2022 increased by 59.6% year-over-year to RMB 4,551.7 million, deep in the guidance upper range by 2.7%.
Speaker 3: Looking further down on slide 24, total cost of revenue in the fourth quarter increased by 88.5% to RMB, 820.5 million from RMB, 435.2 million in the same period of 2021.
Speaker 3: mainly driven by the increase in utility costs and the depreciation and amortization expenses.
Selling and marketing expenses remained at normal level in the fourth quarter of last year, slightly decreased by 1.7% year-over-year to RMB 18.4 million, primarily due to less share-based compensation expenses.
On a full year basis, selling and marketing expense decreased by 20.5%, primarily due to less share-based compensation and less marketing activities.
General and administrative expenses in the fourth quarter of 2022 saw a spike of 134.5% over year to RMB 214.5 million.
A one-off, long-lived asset impairment cost of around RMB 83.5 million has been the major contributor to such a change. The measurement conducted a revisit on strategy and related assets and decided to
Now to continue with the Chinidere business, which is the leftover group's manufacturing business line. Therefore, the related assets were assessed to be subject to a one-off impairment. And to point out, this asset has no relation with our core IVC business.
Thus, no impact on our future expectations of our business growth, and no further impairment of this kind is expected in the future.
On a full year basis, Gen A expense increased by 52.9%.
Primarily due to the higher share-based compensation extent, increasing personnel costs as the company grew its business, and the one-off long-lived asset impairment in the fourth quarter of last year.
Research and development expense increased by 85.1% in the fourth quarter and 10.8% in the year 2022, primarily due to more resources invested in research and development activities.
With this, operating income in the fourth quarter of 2022 increased by 39.7% year-over-year to RMB 309.4 million with a margin of 22.2% compared with 28.3% in the same period.
2021 and 26.4% in the third quarter of 2022.
Net income in the fourth quarter of 2022 was RMB 116.5 million a year-over-year 1.6% increase under a negative 51.7% quarter-over-quarter decrease mainly due to the one-off impairment cost.
quarter of 2022 was RMB 116.5 million a year over year 1.6% increase and the next 51.7% over quarter decrease mainly due to the one-off impairment cost.
For further breakdown of core costs and expense item on slide 25, a clear sign of the economic scale on our high-per-skill business model can be witnessed over the last 10 quarters despite the faster increase in utility costs than that of the revenue.
The stability in other key costs and expensive items, including maintenance, SGA and extra, has ensured a stable margin performance.
Utility costs in the fourth quarter remained at a similar level to the previous quarter, making up 31.1 percent of total revenue compared with 32.8 percent in the previous quarter and 28.5 percent in the same quarter of 2021.
Maintenance and other costs and adjusted G&A expenses were all well maintained within their reasonable reach.
Maintainments and other costs were 8.6% of total revenue in the fourth quarter, compared with 9.9% in the previous quarter and 9.9% in the same quarter of the year 2021, a clear sign of economy of scale. Adjusted Nothing but dividend expense.
was 8.3% of revenue in the fourth quarter, compared with 7.7% in the previous quarter and 11% in the same quarter of 2021.
With this, on March 26, our profitability remains healthy. Adjusted EBITDA in the fourth quarter of 2022 increased by 78.4% in over a year to RMB 720.9 million from RMB 404.2 million.
in the same period of 2021. Adjusted EBITDA margin was 51.9% in the quarter, slightly higher than the previous quarter. For the full year 2022, adjusted EBITDA increased by 67.3% year over year. For RMB...
2374.2 million, which is 5.1% above our guidance upper range.
Adjust the EBITDA margin in the year 2022 improved to 52.2% from 49.7% in the year 2021. Adjust the net income increased by 65.2% year-over-year in the fourth quarter.
to RMB 236.2 million at a margin of 7%. Adjusted net income in full year 2022 increased by 99% to RMB 949.9 million with margin improving to 20.9%.
compared with 16.7% in the previous quarter. Details in the gap to net gap reconciliation on EVDA and net income would be available in our 6K filing or the appendix in our IRPPT. Now, let's take a look at our cash and debt position and our capex on slide 27.
We continue to work in our business expansion to meet the increasing demand from our customers by investing more capital into our under construction data centers. PEPEX in the fourth quarter was RMB 1354.7 million.
and the CAPEX in the full year of 2022 added up to RMB.
4,912.8 million compared with RMB 3,766.9 million in 2021.
Given the strong demand and the tight and challenging delivery timetable as discussed previously, we expect CAPEX in 2023 to be in the level of around RMB 5 billion.
On operating cash flow, cash collection is gradually recovering compared with the previous quarter leading to a RMB 389.4 million operating cash flow in the fourth quarter compared to RMB negative 173.8 million in the third quarter.
as well. We have collected the majority of the receivables in the first quarter of 2023 and it's back. Cash collection gradually back to normal.
On financing, we added R&D 74.9 million project financing in the fourth quarter, ending up in a total debt position by the end of the quarter at R&D.
8,371.5 million. So far, we do have major low or dead facilities to mature in 2023 or 2024. Only minor ones, based on some of our projects on feedback amortization schedule, with this on slides 28 and 29.
We ended up with the total cash position of RMB, 4,064.2 million in the fourth quarter, compared with RMB, 4,900, 87.9 in the previous quarter, and next-desk positions of RMB.
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Unleveraged and coverage ratios remain in a reasonable range. On slide 29, with the momentum in adjusted EBITDA and our proper and prudent drawdown of the debt facilities, our net debt to the last 12 months adjusted EBITDA ratio stood at 1.8.
compared with 1.6 in the previous quarter. Total debt to last 12 months adjusted evidence was 3.5 compared to 4.1 in the previous quarter and 3.9 in the same quarter in 2021. Such also leads to the healthy coverage profile.
with last 12 months adjusted EBITDA to interest ratio at 7.9 compared with 8 in the previous quarter. And the last 12 months, the EBITDA was adjusted by the EBITDA to interest ratio at 7.9 compared with 8 in the previous quarter.
Found from operations remaining at around 20% of total debt. Capital structure is healthy with total debt to capital ratios at 43.5% compared with 44.1% in the previous quarter. The healthy momentum on EBITDA growth.
based on the rapid ramp up of our client, continue to support a strong return profile of the company. With a 86% IT capacity utilization ratio by the end of the fourth quarter, we are seeing a pre-tax ROIC of 17.6%
compared with 16.5% in the previous quarter and 15.1% in the same quarter last year.
Finally, on guidance delivery in 2022 and our outlook into 2023.
Strong revenue and adjusted EBIT performance in full year 2022 resulting 2.7% and 5.1% up-fit of our previous guidance upper range respectively. And this has been the third year of guidance up-fit for the company.
Given the current business momentum, the company set its 2023 revenue and adjusted EBITDA guidance in the range of RMB 5,880 to RMB 680 million and RMB 3,000.
to RMB 3,110 milli respectively, representing 31.4% and 28.7% year-over-year increase at midpoint.
This forecast reflects with the company's current and preliminary views on the market and operational conditions, which are subject to change. Now I will turn to Group CEO Mr. Wu Hwa Peng for the concluding remarks. Phone please.
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Translation for HuaBong's work. Hello everyone. Thank you again for joining the call. It's been a remarkable year 2022 for the company.
We dealt with problems, have them solved, and finished the physical year 2022 with another guidance update and 10 three-quarters of consensus updates. In China, leveraging our energy abundant region layout and our East Data West computing cluster With ourgent
and our unique hyperscale development and delivery capacity. We remain a trusted partner in supporting the healthy momentum of our differentiated crime base.
In the Qingyang cluster of East Data West Computing, we've been active in joining the initiative, so as not to miss such historical opportunities.
Well, at the same time, we move forward with our development plan programmatically to make sure that we make well-timed capital expenditure decisions.
We are advancing our Southeast Asian market development at the first place.
With our key project simulation, India put into operation and ramping up steadily. We are confident in our Southeast Asian market and we are working on high quality delivery of the existing key projects in the region to win us more opportunities in the future.
Looking ahead, considering our unique client base and their momentum, we remain confident that an additional 120 to 150 megawatts of capacity can be achieved in the next two years. We are also confident that
The newly emerging AI technology, such as CatDBT, will drive the long-term demand of computing power, and we believe that our existing clients are among the pioneers of this trend, and we expect such to bring us upside in demand as well. As of today, we will continue to do what we should do.
to keep strengthening our energy site layout to ensure the supply side efficiency and sufficiency so as to safeguard the growth of the industry and our clients in the future. Thank you.
So this concludes our prepared remarks for today. Operator, we are now ready to take questions.
Thank you. We will now begin the question and answer session.
To ask a question, please press star 11 on your telephone and write your name to be announced. To withdraw your question, please press star 11 again. 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 ask one question at a time. Once again, that's Star 1 for questions. Our first question comes from the line of Yang Liu from Morgan Stanley . Please ask your question, Yang.
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I will translate my question. My question is regarding the breakdown of the 120 to 150 megawatt new booking in the next two years or per year in the next two years.
could management break down into customer and also location for the new booking. Thank you.
Thank you Liu Yang. I think our CEO Bob is going to address your question in Chinese and Joy is going to translate in English. Thank you.Ops
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Translations of what happens first. Thank you for your question. Regarding the separation of our goals, we think in terms of the client, the current key anchor client will take up 80% and the new client will take up about...
20 percent. Location-wide, China will take up about 70 percent and overseas, outside China, will take up about 30.
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I just translate the follow up. I just want to make sure that the existing customer, the 80% from existing customer, real existing customer before the end of 2022 and not the last one yet.
only referring to the anchoring customer. Thank you.
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Our next question comes from the line of Ming-Ran Lee from CICC.
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relevant application scenarios to drive more demand for us. And could you give us more color about it? Thank you.
Yeah, thank you. I think I'm going to answer this question. I'm going to make some additional points.
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Okay, so translation for platform 4. In the long term, I believe that AI technology, including the chat GPT and its application and technology, would definitely bring up the computing power demand in the long term. And it will also turn into a long term solution.
And we will keep the momentum up with our deployment and development capability on the energy side. We will continue to ensure to secure the critical resources strategically and to provide solid support for the future climate demand, promoting our mission in effectively converting electricity power into the computing power.
Also, for team data, in our long-term development, we believe that the high-density, high-density computing centers with the GPU, with the AI computing power facilities, are the most important
it will create a lot of demand. And we are the only ones with a long-term experience in deploying such facilities. And we have been making related technology innovation, and we have the longest-
experience in serving the relevant clients in deploying their AI computing powers. So for us, we believe that the AI technologies development will bring us definitely a very positive effect in gaining more client demand and catching the opportunities.
This is Nick. I would like to make three additional points on this very hot topic these days. Although it's pretty hard to quantify exactly how much incremental demand on data and IDC capacity of corollary to our business, we believe that if you read one of the recent reports,
Our current forecast annual incremental capacity between 120 and 150 MW is only our baseline case. It doesn't consider the potential explosive roles in this new technology demand essentially driven by this CHA2GTT stock.
So there could be some upper-side opportunity based on that. We are still watching it closely on this trend and see whether it can drive up our customers' business and in turn, we can benefit from it. And third point we wanna mention is that if you look at our client base, one of them is Microsoft.
they are basically the leading forces in this CHAP GPT stuff overseas. Our domestic and our key clients, you know, one of our key clients for our domestic business, we believe they should be the leading force as well on this trend. So in any case, once this trend becomes quantifiable and can be pretty much, you know, I would say becomes
from the line of Edison Lee from Jefferies. Please ask your question, Edison.
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I have three questions. Number one is that I want to
I asked about the CapEx guidance in 2023. And number two is I think that the revenue and EBITDA guidance for 2023 is a little bit low. So I would like to know the assumptions behind these guidance. And number three is I want to get a little bit more details about the asset impairment that they booked in the fourth quarter. Thank you. Thank you, Addison. I think I'm going to refer you first to the end of the third question to...
So this is based on our current project delivery schedule and also the historical cost level. So for the third question you mentioned is for the details of those one-off long-lived asset impairment. So this is for the first one-off long-lived asset impairment.
This is mainly for Chin-i-Dear, which was previously a business for manufacturing a part of the company. And this is mainly for this plant factory decoration and equipment investment.
And so far we've decided for this manufacturing part or the key equipment of this MET investment, we will more cooperate with our external strategic vendors, so we will not operate these factories anymore. So there is a one-time long-lived access impairment.
The cost is, the impairment amount is around RMB, 84 millis. And this is a very thorough and one time clean up. And we don't expect any further impairment or similar cases in the future. And hope this helps you.
impairment amount is around RMB, 84 milli, and this is a very thorough and one-time cleanup. We don't expect any further impairment or similar cases in the future and hope this helps you. Impairment finished.
Right, thank you, Gao Yi. I think one thing I disagree is actually around 30% the revenue, the growth on the revenue side, EBITDA side is low. It's probably, if you compare the previous and past several years, it's probably going to be...
just more like a natural result of all the current contract and their execution and the construction and once they got delivered they're gonna ramp up in the pretty much on an average nine months you know ramping up time so we put all this up very conservative based assumption into the model and what you will get
is actually the 30% increase on the top line. And slightly lower Yibitow growth rate, I think, but I still call it around 30%, is simply because we are actively seeking diversification strategy this year, especially starting from the second half of this year.
And that basically means that post the COVID time, we're gonna hire more people and more staff on the on the business development side, on the tech, on the R&D side, essentially to support a company's growth in both China and overseas market over the long run.
Having said that, you're going to see a slight increase of our corporate GNA, R&D, and sales marketing. And you spend it, you know, this year, they're going to bring the long term. This incremental resource dedication is going to bring a long term benefit to companies sustainable.
business in the future. So in other words, what you see 30% of growth rate on the top line and bottom line are pretty much a secure number based on the existing contract and the visible pipelines. There are some upper side potential on top of it.
Thank you. Thank you, Nick. Can I have a very quick follow-up? I wonder if the EBITDA margin of the non-China projects is putting some pressure on the overall EBITDA margin? Actually, on this, the overseas EBITDA margin, we don't disclose separately about overseas EBITDA margins, but overall one thing I can tell you is actually with the overseas EBITDA margin,
We believe that our EBITDA margin, profit margin, return on assets is definitely going to be among the best. On the third point, regardless of the a little bit different margin profile between the overseas and China's market, we're very confident that on a corporate level, our EBITDA margin can maintain well above 50% moving forward into the future. And also the other important factor you've got to consider is actually the...
the competitive model or competitive confidence model or the company in overseas market are slightly different from what we have in China. In overseas market we basically pass through all the power to the client simply because of the more flunktual, you know, flunktual, Asian nature of the power cost in overseas market.
So without this power stuff, you have a more certainty of our heat of margin overseas. On the other side, that's probably trying to a little bit lower heat of margin. Thank you. Okay, thank you. Great. Thank you very much for all your questions. We have reached the end of the question and answer session. And with that, we conclude our conference for today. Thank you for participating.
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