Q1 2024 VNET Group Inc Earnings Call
<unk> a mandate trends prepared remarks, there'll be a question answer session management from our management today include Mr. Kevin Sheehan rotating precedent.
Michigan Liu: Mr. Chu you want Chief Financial Officer, Michigan, Liu Investor Relations director of the company.
Please note that today's conference call is being recorded I will now turn the call over to first speaker today, Michigan Xu. Please go ahead.
Michigan Xu: Thank you operator, Hello, everyone and welcome to our first quarter earnings.
Earnings Conference call.
Speaker Change: I'm pretty well distributed earlier today and you can find a copy of our appetite as well as our newswire services.
Speaker Change: Please note that today's call will contain forward looking statements made under the safe Harbor provisions of the U.
Speaker Change: Private Securities Litigation Reform Act of 90 to 95.
Speaker Change: Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.
Speaker Change: For detailed discussions of these risks and uncertainties. Please refer to our latest annual report and other documents filed with the SEC.
Matt: Hey, Matt that's not undertake any obligations to update any forward looking statements, except as required under applicable law.
Matt: Please also note that we have earnings press release and this conference call include the disclosure of Oh does it GAAP and non-GAAP financial matters.
Earnings Press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures.
Speaker Change: As a reminder, this conference is being recorded.
Speaker Change: In addition, well that costs of this conference call will also be available on our appetite.
Speaker Change: I don't mean that they'll come.
Speaker Change: Before I start today's presentation, let me briefly introduce Mr. Gagnon Shang.
Speaker Change: Beginning in late 2010 for Gavin has undertaken this role of groups rotating president well.
Also serving as the general manager of the IDC strategic business group.
Speaker Change: Kevin joined <unk> as our Vice President in 2017 and in January 2020 became senior Vice President brings nearly 20 years of business operations management experience.
Speaker Change: Strategic planning cloud computing and data centers.
I will now turn the call over to Kevin. Please go ahead. Thank.
Speaker Change: Thank you good morning, everyone. Thank you for joining our call today people D range into our first quarter performance either back to reminding you always up to Cowen refinement that we mentioned in our last call.
Speaker Change: Between House formation transparency under heavy public debate I understand RP news starting from this quarter, we will report a total revenues.
Speaker Change: The operational metrics for our wholesale and the retail pianists separate today.
Speaker Change: Our CFO to go over the details now Nathan onto our first quarter initiatives and business progress.
Speaker Change: Solid cost of Qatar.
Speaker Change: <unk>.
Speaker Change: For this year.
Speaker Change: Here, we continue to execute our effective <unk>.
Speaker Change: The cost savings.
Speaker Change: Sure.
Speaker Change: Hi, <unk>.
Speaker Change: Our robust operating and financial results <unk>.
Speaker Change: Fourth street, our ability to grow our opinions by leveraging our cost base to capture.
In <unk> demand.
Speaker Change: Oh AI.
Speaker Change: Michael Wise, it's a puppy government policies and may here.
Speaker Change: Sorry, the tool foster our favorable market environment are quaking mall tree wins for us.
Speaker Change: I'd say industry as a whole.
Speaker Change: Computing power is the widely C R.
Speaker Change: Sure put components or China high quality development.
Speaker Change: For the government to Walker, <unk>, <unk>, 'twenty, 'twenty, four which cost for sort of breaking the.
Speaker Change: Formation.
Speaker Change: No wide computing power and data work.
Speaker Change: Telecom regulator.
Speaker Change: Hi, stressed policy initiatives to further optimize compute empower resource.
Speaker Change: Infrastructure expense our costs, our relation we believe those initiatives, where empower us to allocate and manage other data center more efficient certainly and the base meet his or her shoe.
Speaker Change: <unk> market demand for high performance compute power.
Speaker Change: Additionally, interest in Greener computing solutions is on the rise in April we signed a strategic cooperation agreement with <unk> local government understand on high speed holdings to build our Greek AI supercomputing datacenter cloud.
Speaker Change: The three parties.
Speaker Change: We are working together to promote.
Speaker Change: The digitalization and great development will end up.
Speaker Change: Confident are great at Hudson Venus layers of late with customers and the Everland are market competitive list those trade take hold.
Speaker Change: Or I D. C development remains our primary focus we were keenly aware of how AI related demand for high performance computing is a rich shopping data center landscape.
Our quantity of data centers and high.
Speaker Change: Density power capabilities.
Speaker Change: US to trail high performance computing solution to seminars to meet customers rapidly growing AI needs by the end of the fourth quarter or Nike percentage or our wholesale capacity and service is the high power.
Speaker Change: Thank you.
Speaker Change: Meanwhile, we continue to see increased AI driven demand for our industries like chip design.
Speaker Change: Llama.
Speaker Change: Dreaming financial services and the logistics.
Speaker Change: The education.
Speaker Change: As an industry pioneer we our exposure.
Speaker Change: Data Center AI.
Speaker Change: D C.
Speaker Change: Development and actively upgrading our computer to empower infrastructure to capture market opportunities.
Speaker Change: Load require massive computing power enforcing our transition for CPU base towards <unk> based infrastructure.
Speaker Change: Platform, a few top internet enterprise and the AI technology and the price with <unk>.
Speaker Change: Asia GPO resource.
Speaker Change: Oh, when most of small and medium sized enterprise. We are outsourcing this offer great. Okay. When the highest cost limited channels and other challenges.
<unk> GPU infrastructure all derived.
Speaker Change: AIP face can meet underprice computing power deep layer of many wise their capital investment.
Speaker Change: A significant other one page in the current environment.
Speaker Change: Now let me go so some updates on the ITC font, we continued to win new orders.
Speaker Change: Both wholesale and retail business during the quarter.
Speaker Change: On the wholesale side, we mentioned on our.
Speaker Change: Last call, we secured a new order for on one extreme exciting clients full.
Speaker Change: <unk> <unk>.
Speaker Change: 15 megawatt scheduled to be completed within 2024, we also went on order.
Speaker Change: Pulse admittedly.
Speaker Change: Two five megawatt in our data center user young Sir three where Derek <unk> region for our ideal customer one of China's largest restaurant companies.
Speaker Change: On the retail side, we continued to attract new customers and financial service local service and manufacturers and deepen exciting relationships not heavily weigh Wong our new order.
Speaker Change: Our policy Matthew one five megawatt in our data center.
Ariel: The greater Beijing, Ariel four exciting customer a leading player in local service sector.
Moving to our lung <unk>, we also made progress with our <unk> service.
Ariel: Our wholly owned subsidiary D Y X late.
Speaker Change: Has successfully expanded its global it work carries.
Speaker Change: He is a new point.
Speaker Change: Progress is integrity in Dubai in the first quarter and the in source.
Speaker Change: Korea, and Mexico more recently.
Speaker Change: New parks broaden our VPN surveys.
Global network coverage over our Wap units series, and the new pumps where provider.
Speaker Change: Enterprise customers with comprehensive and integrated network.
Speaker Change: Cloud.
Speaker Change: Security service enables them to capitalize on emerging markets and the global expansion opportunities.
Speaker Change: Turning now to <unk> performance effort, we issued our first annual ESG report a deterrent.
Speaker Change: In Continental 22 in history.
Speaker Change: And progress 10 ability.
Speaker Change: Include verified Cabo.
Speaker Change: <unk> inventory readout in 'twenty or 'twenty history.
Speaker Change: We continue to execute our shared sustainability assistant and achieved various performance or cost you Paul.
Speaker Change: Diversity and equating it green power.
Speaker Change: Engagement and.
Speaker Change: Efficient.
Speaker Change: Energy consumption.
Speaker Change: <unk> also highlighted.
Speaker Change: Humans, such us are average and new power usage.
Speaker Change: Nancy.
Speaker Change: One product tool Lai, our total green power per ton or about.
Speaker Change: 56 point July renewal killer worker hours during the year and an increase in our percentage of Fame Mary you Paul Yes.
Speaker Change: Managing producing to circa one percentage.
Speaker Change: Going forward, we will remain dedicated to integrating ESG based parties companywide.
Speaker Change: Oh, the wasting their coordinated development of agree <unk> under the digital economy, driving south tend to put beauty and creating value for our stakeholders and are so short.
Speaker Change: To conclude our solid first quarter performance underscores our confidence abroad.
Speaker Change: Our broad and growing a real.
Speaker Change: In Norway team IDC surveys.
Speaker Change: Outstanding High power density development capabilities.
Speaker Change: Our lawyer and expanding customer base, new King our head.
achieving: We will continue to drive our dual co op in Australia, and pursue higher quantity goes wire otherwise things the development of Chinas digital economy. Thank you everyone. I will now turn the call over to achieving to discuss more about our operating and financial performance.
Speaker Change: Thank you, Kevin and good morning, and good evening everyone.
achieving: Before we start the detailed discussion of our fourth quarter performance. Please note that as Kevin just mentioned, we have enhanced our disclosures with more detailed operational and financial metrics starting this quarter.
achieving: Believed this new metrics, we will provide shareholders with greater insight into our business.
Speaker Change: Specifically beginning in the first quarter of 2024 hour <unk> business was subdivided into wholesale RBC business and the retail OTC business based on the neutral and the scale of our data center projects prior to 2024.
Speaker Change: The subdivision was based on the types of customer contracts.
Speaker Change: You may find a detailed list of all wholesale projects in our IR presentation for this quarter.
Speaker Change: Accordingly for operating metrics rehab present by retail and wholesale separately for the wholesale business. The metrics are mirrored in terms of power capacity instead of cabinets, which we believe will more meaningfully reflect our business.
Speaker Change: This development in.
Speaker Change: Additional our wholesale capacity is present.
Speaker Change: Across three different stage, including new theories and their construction and held for future development, which we believe will provide a clear and the more comprehensive picture of our wholesale capacity.
Speaker Change: Boosting the high growth potential of our wholesale business.
Speaker Change: All financial metrics, we have subdivided our net revenue into revenues from <unk> business, which includes retail revenues and wholesale revenues.
Speaker Change: The revenue from non IDC business, which consist our cloud and VPN business.
Speaker Change: Now, let's move on our first quarter results. Please also note that unless otherwise stated all of the financials to be present today are for the fourth quarter of 2024 and renminbi terms.
Speaker Change: Furthermore, all the groceries and maroon.
Speaker Change: On a year over year basis.
Speaker Change: We kick off 2024 with solid operating and financial results.
Speaker Change: Our wholesale RBC business continued to gain momentum driven by rapid customer move us capacity in services was 332 megawatts.
Speaker Change: As of the end of first quarter capacity utilized by customers increased by 17 megawatts to 236 megawatts in the fourth quarter, primarily driven by increased demand for the customer and has been <unk> six.
Speaker Change: And Hudson H, B zero, three and he Hasnt J F zero three datacenter.
Speaker Change: As a result, the utilization rate of wholesale capacity improved to the seven 1%.
Speaker Change: The utilization rates for mature capacity, reaching around 95% and the ramp up of capacity, reaching around 34% additional capacity under construction was 139 megawatts.
Speaker Change: Pre commitment through REIT of around 75% and the capacity held for future development was 550.
Speaker Change: <unk> 57 megawatts.
Speaker Change: For our retail business capacity in service with a wrong 52000 cabinets remaining flat compared to last quarter. These utilization rates stable at 64% utilization rate for mature capacity, reaching around 73%.
Speaker Change: I'm a retail cabinets.
Speaker Change: 8742 in the fourth quarter compared to 8759 four last quarter.
<unk> 8874 for the same period last year.
Speaker Change: Moving on our financial performance, we remain focused on high quality revenue business and our efforts continue to generate positive outcomes.
Speaker Change: Our net revenue increased by five 1% to one.
Speaker Change: 9 billion, mainly driven by the continued growth of our core business.
Speaker Change: To highlight our wholesale revenue increased by 59.
1% to $361 million, mainly contributed by E. Hasnt GE as Congress zero, one phase one.
Speaker Change: Hudson, the Ges competence zero too.
Speaker Change: He has been the G as campus.
Speaker Change: Zero to be.
Speaker Change: H B zero, three and <unk> III data centers.
Speaker Change: On the other hand retail revenue decreased by seven 1% to 923 7 million, mainly due to our consolidation.
Speaker Change: Re development of several data centers since the second quarter of 2023.
Speaker Change: Adjusted EBITDA was.
Speaker Change: 539, 8 million with adjusted EBIT margin of 28, 4% net loss attributable of B that was $187 million.
Speaker Change: Turning to our balance sheet.
The end of first quarter, the total amount of the company's cash on the cash avalanche.
Speaker Change: Chip tape cash was $2 1 billion.
Speaker Change: Meanwhile, net cash generated from operating achieved was 267.
Speaker Change: 6 million, our Capex was $971 3 million.
Speaker Change: For updates on our financing.
Speaker Change: As we mentioned last quarter.
Speaker Change: February 1st two southern 24, we completed the repurchase payments relating our convertible notes due 2026.
Speaker Change: And the total principal amount.
Speaker Change: $600 million U S dollar.
Speaker Change: In the current capital market environment. This strategic move reflects our.
Speaker Change: Sealants business fundamentals and our commitment to long terms, so timbale development.
Now moving to our full year guidance for 2024.
Speaker Change: We expect <unk> revenue to be in the range of $7 8 billion to $8 billion.
Speaker Change: We are present in a year over year increase of five 2% to seven 9% and adjusted EBITDA to be in the range of $2 22 billion to $2 28 billion.
Representing a year over year increase of eight 9% to 11, 8% this change from our previous guidance.
Speaker Change: Given the last market conditions, we have increase our delivery plan to 100 to 140 megawatts from.
Speaker Change: Previously stated 100 to 120 megawatts.
Speaker Change: Capex.
Speaker Change: Good to be in the range of $3 7 billion to $4 2 billion. This is unchanged from our previous guidance Andrew May further increase according to market conditions.
Speaker Change: Looking ahead, our focus there.
Speaker Change: As a reminder, on high quality growth, we will continue to excuse our effective due course strategy and further enhance our cogs.
Capabilities to capture market opportunities driven by the AI boom.
Speaker Change: This concludes our prepared remarks for today operator, we are now ready for questions.
Speaker Change: Thank you we will now begin the question and answer session to ask a question. Please press star one on your telephone to withdraw your question. Please press star one again.
Speaker Change: For the benefit of all participants on today's call. Please ask your questions to management English and then repeat in Chinese one moment for the first question.
Speaker Change: Our first question comes from Edison Lee from Jefferies. Please go ahead.
Speaker Change: Scott.
Edison Lee: Thank you management for the presentation and very good disclosure I have three questions number one is about the definition of retail and wholesale.
Speaker Change: I think a lot of investors would like to know what the accepted definition is because the retail MRO that you're presenting today for historical numbers have actually been lower than previously disclosed. So that's why I would love to get a clarification on the definition number two is on operating cash flow can you comment.
Speaker Change: <unk> 24 operating cash flow was so much lower than $1 23.
Speaker Change: And number three is on your.
Speaker Change: Retail <unk> redevelopment can you tell us how many companies are actually being affected by the redevelopment and what what will be the outcome of the redevelopment doesn't mean that these companies will actually become wholesale or they will also be steel for retail and with much higher power.
Speaker Change: So can you explain that.
Speaker Change: So let me, we Couldnt Chinese culture.
Speaker Change: Quantico.
Speaker Change: So step one is helping us get the pedal you can forget about it.
Speaker Change: <unk>.
Speaker Change: Until you took a <unk> you could think of UTC cocobolo EEP dose.
Speaker Change: Good morning, Steven.
Speaker Change: Steven.
Speaker Change: So the MRO the suits.
Speaker Change: And our people with ILD, what's happening to cause you concern to <unk> hotel.
Speaker Change: <unk> do you have a bunch of <unk> Union, that's about <unk> <unk>.
Speaker Change: I think the key to the center.
Speaker Change: <unk>.
Speaker Change: With all your tuna, but due to his suitability. So what you took away from one cell.
So a lot will be told me hi can you talk about your kind of high single channel.
Moving to him that we filled up quickly.
Jonathan: Sure Jonathan.
Jonathan: Jonathan do we feel about it.
Jonathan: And you showed us.
Speaker Change: What's up.
Speaker Change: We can partner ecosystem.
Speaker Change: Jason will talk as it plays out.
<unk> is a hyphen inshallah.
Speaker Change: Uh huh.
Speaker Change: Are you asking somebody else.
Speaker Change: Okay.
Speaker Change: Okay.
Okay. Thank you.
Speaker Change: Edison.
Speaker Change: I speak.
Speaker Change: After the question in Mandarin.
Translator: The translator help me to translate to English.
Speaker Change: The Eagle Bank here, which I'm quite sure.
Speaker Change: I assume you mean, the Guangzhou Patricia at home.
David Szeto: David Szeto Cassia.
David Szeto: Yes.
Speaker Change: Asia appeal with the closing.
Speaker Change: <unk> since you did call me Sharon <unk>.
Speaker Change: So <unk> you can do it.
Speaker Change: Also you will find on the Chin cost no woman, who can tell you. If you talk how should we also have our showroom.
Speaker Change: The song.
Speaker Change: Hello.
Speaker Change: Hello.
<unk> Eagle Ford being so you should know IDC closer to that <unk> or EMEA southern yellow ultra builder.
Speaker Change: Hello <unk>.
Speaker Change: So I'm going to draw onshore.
Speaker Change: Sure.
Dan: Dan the Joshua.
Speaker Change #101: Thank you for the question a lot and I want to share with you more information to a boost up the information transparency of the company as well as third quarter type of stuff.
Speaker Change #102: The market a better understanding our business development starting from quarter. One of 2024, we began to add the new disclosure metrics as well as new indicators for instance, according to the revenue we have classified them into three major classes, including wholesale retail and IDC.
Speaker Change #103: At the same time, we've also added a new business indicators for the wholesale including the operational with in service as a hash tag. We also put under construction as held for future development of megawatts for your better understanding.
Speaker Change #104: Linda will mature should do it.
Speaker Change #105: Triangle when you use on the.
Speaker Change #105: Wholesale retail.
Speaker Change #105: Yes.
Speaker Change #106: And the thing is <unk> Shang.
Speaker Change #107: Sir your final easier as a wholesale retail those are going to pencil for the cool off in that fashion.
Speaker Change #108: Ghansham this is <unk> enabled device.
Speaker Change #108: Since approval.
Speaker Change #109: Sure sure no woman C&I, the wholesalers are being eased.
Speaker Change #108: Well.
Speaker Change #108: John Joe TV, thus with your question.
Speaker Change #110: We're more entresol swisher job shops, okay.
Speaker Change #111: Or do you leave extra issue Corona and leap day.
Speaker Change #112: <unk> proven that you're launching <unk> woman doubtful.
Robert: Thank you Robert.
Speaker Change #114: Can you just hit on the wholesale being issued.
Speaker Change #115: Both of them.
Speaker Change #115: Okay.
Speaker Change #115: So.
Speaker Change #116: Now women shows I think either retail woman.
Speaker Change #117: One woman, Don Johnson, <unk>, Johnson, <unk>, pushing puncture Dolby.
Speaker Change #118: Sure sure.
Speaker Change #117: Sure.
Speaker Change #119: But how do you have a target model for owned and leased to DHL.
Speaker Change #120: <unk> also chicken Ghansham cohort.
Speaker Change #121: So darko.
Speaker Change #121: The answer to your onshore keeping with alcohol woman parked or you buy 100, <unk> <unk> sorry.
Speaker Change #121: You may have seen similar trends.
Speaker Change #121: Cultural EMEA about mutual trust with all our R&R sanya.
Speaker Change #122: Each year Congress initially launching yes, youre going to get to alcohol or tobacco, where you've been pushing.
Well, it's wonderful so if you talk with the EMR.
Ghansham: Sure Ghansham.
Speaker Change #124: The MLR sleep and kind of element of good chunky.
Speaker Change #125: Punctuation retail Dave Wilson Amaral for you also.
Speaker Change #125: First the question of the definition of the wholesale and retail I want to give you a leaflet nation.
Speaker Change #126: Alright did notice that we have already redefined the two terms of wholesale and retail as we did before in depth in before we put the major clients the big customers into the wholesale while the small clients into the retail, but now we've made a small change to better serve the cap to mark.
Speaker Change #127: As well as to boost up the information transparency as I did say right now in terms of their wholesale we make them into the size of our more than 40 megawatts and in Chinese literally translated into the base type project for those project they have the potential to expand their cup.
Speaker Change #128: <unk> in the long run in terms of the land the buildings as well as the power supply in most of the cases those wholesale projects are targeting a major clients and customers.
Speaker Change #129: We are also selling part of them are small proportion of them to the medium size enterprises and clients and on the other side the retail projects, which will be trust literally translated into the city type projects are located the money in the core cities, including Beijing, Shanghai Guangdong.
Speaker Change #129: Engine sector generally speaking the total side initially is smaller than 20 megawatts without any potential to extend the capacity of expanding.
Speaker Change #130: Stocks in cabinets and for most of the cases those projects are targeting the small and medium sized enterprises, but please be noted we are also offering the retail project to the major the big clubs as well to satisfy the need to provide to ensure the low latency as you have already known.
Speaker Change #131: In Melbourne numbers that.
Speaker Change #131: Due to the fact that 10% of the <unk>.
The covenants have been Redeveloped and just a small proportion of the retail projects are offering to the larger clients. The MLR. If not included that is why you are seeing the Dale a discrepancy in the disclosed numbers in Vancouver.
Speaker Change #131: Yes.
Speaker Change #132: And then the DRA Lim <unk> Guan.
Speaker Change #133: All of them.
Speaker Change #133: And then Dave if at all.
Union Xiang Guan.
Speaker Change #134: So I'll give you a harsher b domain.
Speaker Change #135: Xiaomi Ciena and you also asked yes, Josh Uhm.
Speaker Change #136: When you say you're switching the jumbo bulk chemical.
Speaker Change #137: Chemical book here.
Australia DRG code for Firefly.
Danielle: Sure Danielle.
Speaker Change #139: It all tissue on the macro fashion.
Speaker Change #140: And for the question.
Speaker Change #141: You raised the question of why in 2020 for Q1, the operation of the capital was smaller than that of in 2023 generally speaking in Q1 of 2024, the company observed a stable and normal cash flow. However back in 2023 in Q1.
Speaker Change #142: They were some one off projects such as the projects incentivized by the government grants as well as certain payback from the vap those two items did not happen in Q1 2024.
Speaker Change #142: Quarterly ensure fully tuition.
Speaker Change #143: Yeah sure sure watching Kevin in Africa.
Speaker Change #144: Hello lending so strange ones in a year with some traditional Hudson would be option one.
Speaker Change #145: <unk> expenses increased 18 million shares 20 future label, then you should ask Jeremy showed a PMI number of momentum Dhanda jumped Portland didn't equate adults are now got integrated simulation was help me out with <unk>.
Speaker Change #145: <unk> tissue, pushing Moody has SD Wan and go back to history.
Speaker Change #145: The answer to that other three months over months or so.
Not much on the <unk> visual analog what menu whereby easier to beta financials within Sweden as an example.
Speaker Change #145: Sure.
Speaker Change #145: Okay.
Vishal: This is vishal.
Vishal: For the for that.
Speaker Change #147: Question. The question was answered by the CFO in Q1, 2020 four retail data base operating stably and normally manner and you have already observed instead and changes generally speaking we would with developing those cabinets.
Speaker Change #147: The loader state power cabin is into the high density power power cabinets in that sense. The total numbers are on the decline. This is due to the purpose of better utilizing these forces can maximizing then offer our capacity to meet the market demands and in the upcoming months we will.
Also make the constant adjustment to better meet the market requirements for instance, according to demand drove a certain market. We will increase the number and we developed a new cabinets to better serve the local market.
Speaker Change #148: Operator next question. Thank you for the questions.
Speaker Change #149: One moment for the next question.
Speaker Change #149: Yes.
Young Li: Our next question comes from young Li from Morgan Stanley. Please go ahead.
Speaker Change #151: Thanks for the opportunity.
Speaker Change #151: And.
Chris: Chris Thanks for the more disclosure, which is very helpful to us.
Chris:
I have two questions. The first one regarding the three business <unk> growth outlook.
Speaker Change #153: I think clearly the wholesale will be a key driver on the retail it looks like a dragger.
Speaker Change #153: Management.
Speaker Change #154: Quantify that.
Speaker Change #154: Growth rate of the three.
Speaker Change #154: Or what is behind the current guidance of around 5% to 8%.
Speaker Change #154: Growth.
Speaker Change #155: The three business life.
Speaker Change #156: My first question. The second question is.
Speaker Change #157: G&A expense.
Speaker Change #158: It is.
Speaker Change #158: A pretty big increase year over year.
Speaker Change #159: What is behind that and whether that is a one off or sustainable.
Speaker Change #160: What I was trying to sell the ones to be able to now go into you guys are going to you are going for Shenandoah showroom Santal Pedro China, Yeah, when I tell them the lithia sure P value or wishing you got coming out.
Speaker Change #161: Some of them are doing so you kind of weigh toward Asia now nobody owns in Guangzhou.
Speaker Change #162: Ping Ping guys out Jason go find a year because of the she doesn't job harder versus going through kind of antonio without bias or whether things will pay hoelscher somebody you TJ Sanger year will go through the process.
Speaker Change #163: <unk> the argument either one of you Jamie <unk> Peter.
Peter: Peter I'll start off with.
Peter:
Speaker Change #166: Sure for coaches shoot I sure can do this year are you fishing, the normally don't seem quite as home for you.
Speaker Change #165: Hey, guys.
Speaker Change #165: Yeah.
Speaker Change #165:
Speaker Change #165: Oh.
Speaker Change #165: Okay.
Speaker Change #165: Client referrals are driven.
Speaker Change #165: Sure John.
Speaker Change #165: We are the showroom.
Speaker Change #165: Wholesale trend in wholesale.
Speaker Change #167: Wholesale yield.
Speaker Change #167: This deferral was oil.
Speaker Change #168: Rihanna voucher Kim <unk>.
Speaker Change #169: <unk> and Millicent.
Speaker Change #170: Well minority CTO diverging industrial with.
Speaker Change #170: With data.
Speaker Change #170: Afterwards.
Speaker Change #171: Thank you for the question and I will give you more information about different lines on the revenue side in light of the wholesale we maintained 55% of groundless and before the retail as you have observed. It has remained very flat, but then now I do see 5% what kind of <unk>.
Consider ebay that turned on the pseudo Chicago shore Rudolf will do that.
Speaker Change #172: It was for all women.
Speaker Change #171: Sure.
Speaker Change #173: Unfortunately that Johan gondola.
Speaker Change #174: For retail.
Speaker Change #174: Partially owned showroom meals on EBIT.
Speaker Change #175: You bet.
Speaker Change #175: Turning yourself one of them.
Speaker Change #175: And I wanted to give you more information about the EBITDA.
Speaker Change #175: It is it is compared to the revenue it did a better job for instance, despite the fact that the retail revenue remains flat, but the EBITDA is growing.
Speaker Change #176: Providing us a better secret beauty, our strategies on the cost of operation and cost control.
Speaker Change #176: Yes.
The argument.
Speaker Change #176: <unk> yeah.
Speaker Change #176: Sure.
Speaker Change #177: And thoughts on <unk>.
Speaker Change #178: You answered all women.
Speaker Change #178: Andrew.
Joe: Yes, Joe.
Speaker Change #180: That is what went wrong in the 500 million share.
Joe: Yes.
Speaker Change #181: Does your D var, they are running well.
Speaker Change #182: <unk> do you want to share your ongoing free cash flow.
Speaker Change #182: Sure.
Speaker Change #184: So if you have a.
Speaker Change #183: Sure thing.
Speaker Change #182: Jeff.
Speaker Change #185: And for the <unk> and in Q1 I have is.
Speaker Change #186: Foundations as follows in the beginning of this year in 2024, the company paid out a large amount of that debt and out of that the agency service fee was due to the reasons why you have seen the final outcome on the G E.
Speaker Change #186: The event was the stock expenditures for the employees.
Thank you.
Speaker Change #187: Thank you for the questions one moment for the next question.
Speaker Change #186: Yes.
Speaker Change #188: Our next question comes from the mild daily Lee hanging off Hybrienko Securities. Please go ahead.
Speaker Change #189: Hi management, Thanks for Te.
Speaker Change #190: Taking my question.
Speaker Change #191: It is great to see.
Speaker Change #192: Concern about the salmons breakdown.
Speaker Change #193: I have two questions first the first one is about the overall demand for China data center market.
Speaker Change #194: How to manage them and see the overall demand outlook for this year compared to last and.
Speaker Change #195: What kinds of declines that we haven't seen.
Speaker Change #196: It could have better demand.
Speaker Change #196:
Speaker Change #196: And.
Speaker Change #197: Could management give more color.
Speaker Change #198: Question about the wholesale business.
Management.
Speaker Change #199: Or do you just got to be the expansion plan for this year end.
Speaker Change #200: Can management update us the movie movie progressed for the.
Speaker Change #201: From the clients.
Speaker Change #201: Pro forma in the following quarters and.
Speaker Change #201: For the.
Speaker Change #201: Total.
Speaker Change #201: Talk to you that we have.
Speaker Change #202: Maybe let me how about quick translation.
Speaker Change #203: Like I said, when he said you know humana or CPA.
Speaker Change #203: When do you.
Speaker Change #203: Our June quarter, Gaucher, Tommy glad you CD, because future, which it.
Speaker Change #204: Oh My God.
Speaker Change #205: And in the future you can tune MP should some of the anchor.
Jay Peterson.
Speaker Change #205: So you can't watch at home you can coat like Nokia Crinone Usher beyond challenged in the future to the future.
Nice.
Speaker Change #206: The Ottoman Squalamine a P value.
Thanks.
Speaker Change #207: Would you name.
Speaker Change #207: Okay.
Speaker Change #207: You guys will be all.
Speaker Change #207: Yes.
Speaker Change #208: Kodak will be all economies.
Speaker Change #208: Strategic co who Sean Yeah. There you go Oh sure coming out that we like.
Speaker Change #209: <unk> argued with Sidoti.
Speaker Change #209: Okay.
Speaker Change #210: Sure I'll be quite yet.
T J.
Speaker Change #210: Okay.
<unk>, you're aligned with IHS.
Speaker Change #211: And I cannot mention a moment ago I'd say that you should have seen Karl and Matt are you on that portion of your question.
Speaker Change #211: Such a cohort of users for Antonio I won't mention a condo Coes mentioned Penguin assumption that you guys should pneumonia with Chevron Asia institutional industrial just to touch up.
And so we are this year.
Speaker Change #211: <unk> cohort you cannot fit unchallenging.
Speaker Change #211: The only AI ecosystem.
For the first question you raised at the trend of the <unk> development and we are collecting the business requirements from our clients, especially from the conventional business. We can say that it was a growing stably and we are now translating our capacities to meet the market demands.
Speaker Change #212: For most of them there was strong demand due to increased capacities.
Speaker Change #213: <unk> motion.
Speaker Change #214: Egypt canceled at the moment.
Speaker Change #215: <unk> father, Tony Jones, who knows right now she's only go passengers Josh.
Speaker Change #216: Guardian cheaply.
Speaker Change #217: Internet sometimes.
Speaker Change #218: Oh, and then maintain it cannot fulfill them the cohort.
Speaker Change #218: Sure.
Speaker Change #218: Sure sure.
Speaker Change #219: And Jonathan just any color.
Speaker Change #218: Yeah.
Speaker Change #220: Tom Hung international among <unk>.
Speaker Change #221: Same cancer Guida buzzwords around cashman.
Speaker Change #222: Higher insurance, you don't see yet audio I'd tell you on year somebody Antonio <unk> here.
Speaker Change #223: Buffalo opinion for <unk>.
Speaker Change #224: Most important I think Jonathan.
Speaker Change #225: At the end of the first to call out for 2024 in the wholesale side almost a 9% of the requirements are on the high power high density power Campinas demand, which is relating to the AI related needs.
Speaker Change #226: Right all of the industries and sectors. There is strong demand comes from the chip manufacturing side, the autonomous driving companies the financial service agencies, the logistic companies as well as the educational firms they have a high demands.
Speaker Change #226: Developing and using the <unk> related services.
Finally in dollar the ergo LNG to Hawaii on the quarter.
Speaker Change #226: MS. Shen your cohort that you've got in that language and cannot cope with the type of jump on VR for them. So you can grow the onshore pneumonia Portland.
Are you changing course, whether you've got an accordion.
Speaker Change #227: Uh huh.
Speaker Change #228: <unk> P value with a telephone OBL amongst young woman Chinese.
Speaker Change #229: Coordinate your concern about warehouses, you can contact John.
Speaker Change #230: That's helpful.
Speaker Change #230: More general maintenance Capex that you.
Speaker Change #231: Albeit that can hurt you on the hydrogen HSH on water that we can go ahead and hosted a cohort in that Couldnt quite attainable.
Jud element of Capex.
Speaker Change #232: Now you also raised the questions and comments on a very potential expand to the capacities in 2024, and our plans to do that according to our understanding now we won't follow the Capex plan and targets made in May before targeting that 124, However, we're still negotiating new projects.
Speaker Change #232: With potential clients and that might improve over time is to deliver and we are also targeting our plants. Many on the wholesale clients as we have already determined.
Speaker Change #233: Clarion and <unk>.
Speaker Change #234: Jonathan you had some call them are names that are shutdown Gwatney novel, and then she found a cohort <unk>.
Speaker Change #235: Danielle <unk>.
Jan: Jan will mention in Colombia that cohort.
Jan: Quieter.
Speaker Change #237: <unk> is the only thing finance related one to that Sanjay.
Speaker Change #238: And you also asked the questions about the wholesale clients for the company.
Speaker Change #239: As of this as a business as usual models. The contractor. We're also well after two to three years before were going to calculate our total face. However, we are also signing up new clients, which in under that new contract based on mentor cabinets could be finished within half a year.
Speaker Change #238: Yes.
Speaker Change #238: Uh huh.
Speaker Change #240: Thank you management.
Speaker Change #241: Thank you for the questions one moment for the next question.
Speaker Change #242: Our next question comes from the line of Timothy <unk> from Goldman Sachs. Please go ahead.
Timothy <unk>: Great. Thank you management for taking my question and also thank you for the multi transparent this quarter, which was quite helpful. I have two questions here.
Timothy <unk>: One is on the I think on your full year guidance I think compared to the first quarter results just wondering I think guy.
Timothy <unk>: Especially on the topline I think we are.
Speaker Change #244: Assuming no acceleration in terms of revenue growth for the rest of this year.
Speaker Change #244: Just wondering if management can elaborate on what is the key driver and.
Speaker Change #245: And just the breakdown between wholesale retail how do you see I know, it's whether or not you see segment, which line could be.
Nick how growing faster in upcoming quarters, and secondly, I think given the more transparent disclosure I think a follow up question is.
Speaker Change #246: On the call I was just wondering if management has any.
Target or like a go in terms of the wholesale versus retail capacity or revenue.
Speaker Change #246: Down by year end or in the midterm.
Speaker Change #247: It would be very helpful.
Speaker Change #247: Let me quickly translate myself.
Speaker Change #248: So and you saw that even though you guys here.
Speaker Change #249: Good God homing, the God of Cologuard and how it can be all downhill.
Speaker Change #249: Now do you guys have done a yeoman's junior under your guidance.
Speaker Change #249: You could do that when I said that I thought we did.
Speaker Change #249: Two car showroom EBITDA to EBIT.
Speaker Change #249: Because actually with one element that would go away.
Speaker Change #250: Thank you Sri Cassidy good quality.
Speaker Change #251: Okay cool.
Speaker Change #251: If you do the Sherwood.
Speaker Change #251: The driver for video and Ics with Wonder woman.
Speaker Change #251: Sure.
Sri Cassidy: Thank you. Please go ahead.
Speaker Change #253: Good call.
Sri Cassidy: Sure.
Speaker Change #254: We've broken down combing the pillow now can I can tell you Scott Goldman conduct Union D orders should consider high na is something I do Ctrip Young woman, Google Hotel REIT held or you go capacity order. She virtual route of grew more quickly somebody ought to be hot.
Yeah.
Speaker Change #255: Consistent with unlimited.
Speaker Change #256: Well then.
Speaker Change #256: <unk> sure sure sure sure of some sort.
Speaker Change #257: While continuing to serve them.
Solar: Solar was also sure that we all are.
As this year.
Speaker Change #259: What does it mean.
Speaker Change #260: Politically there sure.
Speaker Change #261: <unk> Columbia, while maintaining it at all.
Speaker Change #261: Sure.
Speaker Change #262: You also mentioned in Utah.
Speaker Change #263: I don't want them, they're used for single women go to integrate all of the month.
Speaker Change #264: This whole Qin Yan.
Speaker Change #265: Thank you two questions.
Speaker Change #266: And if you agree with that.
Speaker Change #266: When we come out in those homes are typical as you go.
Speaker Change #266: Great.
Speaker Change #267: Mobile web and social.
Our tangible argued with assembly woman and culture.
Speaker Change #268: Very briefly.
Speaker Change #267: Great.
Speaker Change #269: Particular accounting Thunder.
Speaker Change #270: The answer is as follows the wholesale business is the main source of other revenues and they have already see in the plant and we also see that the retail business and the retail projects are declining on a year over year base. However, as we all see that starting from last year Q3, we began.
Speaker Change #270: Richard vacation from certification on the retail side to deploy more high dense power.
Speaker Change #270: There's power cabinets and by the end of this Q2 and Q3. This retrofit occasion, maybe completed which will pick up although retail project revenue as well.
Speaker Change #270: Yes.
Speaker Change #271: Uh huh.
Speaker Change #272: So I should have done.
Speaker Change #272: Sorry.
Speaker Change #273: The initial hooks, you father troll will be.
Speaker Change #274: Is there what's your coupon on that I'll make sure you find the 16th.
Speaker Change #275: <unk> capacity on Rover.
Speaker Change #275: Bob.
Speaker Change #276: <unk> will also enhance not.
Speaker Change #277: Sure as you go through <unk>.
Speaker Change #278: In light of the ratio of that revenues.
Speaker Change #279: Great talent against the wholesale extending attitude Q1 still the revenue from the retail is taking the major proportion from the ratio and the speakers line.
Speaker Change #279: The capacity ratio the retail and wholesale is approximately 75% to three lighthouse using the numbers off of carbonate that you'll make these calculations.
Speaker Change #279: Okay.
Speaker Change #280: Thank you for the questions.
Speaker Change #281: Seeing no more questions, ladies and gentlemen.
Speaker Change #282: Concludes our conference for today. Thank you for participating you may now disconnect your lines.