Q2 2024 GDS Holdings Ltd Earnings Call
Okay.
Yeah.
Operator: Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Ltd. 2nd quarter 2024 earnings conference call. At this time, all participants are in this and only mode.
Unnamed Participant: Thank you.
Operator: Hello ladies and gentlemen.
Speaker Change: Hello, Ladies and gentlemen, thank you for standing by for GDS Holdings Ltd second quarter 2020 earnings Conference call.
Operator: Thank you for standing by for GDS Holdings Ltd's second quarter 2024 earnings conference call.
Operator: At this time, all participants are in listen-only mode.
Operator: You may now disconnect your lines.
Speaker Change: At this time, all participants are in listen only mode.
Operator: After management, very much there will be a question-and-answer session. So this conference call is being recorded.
Speaker Change: Thanks prepared remarks, there will be a question and answer session. Today's conference call is being recorded.
Operator: After management's prepared remarks, there will be a question and answer session.
Operator: Thank you.
Unnamed Participant: Bye.
Laura Chen: I will now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura. Thank you. Hello everyone.
Speaker Change: Turn the call over to your host Miss Laura.
Speaker Change: Eight of Investor Relations for the company. Please go ahead Laura.
Operator: Today's conference call is being recorded.
Laura: Thank you.
Laura Chen: Welcome to the second quarter of 2024 earnings conference call of GDS Holdings Ltd. The company's results were issued via newswire services earlier today and posted online. A summary presentation, which will refer to during this conference call, can be viewed and downloaded from an IO website at investors.gdservices.com.
Operator: Hello ladies and gentlemen, thank you for standing by for GDS Holdings Ltd's second quarter 2024 earnings conference call.
Speaker Change: Welcome to the second quarter 'twenty.
Speaker Change: First call on GDS holdings.
Speaker Change: The company's results were issued today newswire services earlier today.
Speaker Change: Okay.
Speaker Change: A summary presentation, which we'll refer to during this conference call can be viewed and downloaded from our IR website.
Operator: I will now turn the call over to your host,
Speaker Change: So this is still call leading today's call is Mr. William.
Laura Chen: Meeting today's call is Mr. William Huang, GDS founder, chairman, and CEO, who will provide an overview of our business strategy and performance. Mr. Daniel Newman, GDS CFO, will then review the financial and operating results. Mr. Jimmy Kuh, CEO of GDS International, is also available to answer questions.
William: GDS founder Chairman and CEO, who will provide an overview of our business strategy and performance.
Daniel P.: So Daniel P.
Daniel P.: CFO will then review the financial and operating results Ms. Jamie Cook.
Speaker Change: Oh Gee guess international is also available to answer questions.
Laura Chen: Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Fraud Executed Judication Reform Act of 1995. Forward-looking statements involve empiric risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in a complex perspective as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.
Operator: At this time, all participants are in listen-only mode.
Speaker Change: Continue. Please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S.
Speaker Change: Private Securities Litigation Reform Act of 1995 forward looking statements.
Speaker Change: Risks and uncertainties.
Speaker Change: The company's results may be materially different from the views expressed today.
Speaker Change: Regarding b.
It's included and accomplished prospectus as filed with the U S. S E T.
The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
Laura Chen: Please also note that GDS earnings press release at this conference call includes discussions of an auditive gap financial information as well as an auditive non-gap financial measures. GDS press release contains a reconciliation of the an auditive non-gap measures to the an auditive most rapidly comparable gap measures.
Speaker Change: Please also note that GDS earnings press release, and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures GDS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
William Huang: I will now turn over the call to GDS Founder Chairman and CEO William. Please go ahead, William. Thank you. Hello, everyone. This is William. Thank you for joining us on today's call. In 2Q24, we achieved the brand new growth of 18% and adjusted the EBITDA growth of 15%. This growth rate is quite remarkable in current market conditions. It reflects the progress which we have made in stabilizing our China business and the uplift from the highly successful exclusion of our international strategy.
Operator: After management's prepared remarks, there will be a question-and-answer session.
Speaker Change: I'll now turn over turn over the call to GDS founder Chairman and CEO. Please go ahead with it.
Operator: Ms Laura Chen, Head of Investor Relations for the company.
Operator: Today's conference call is being recorded.
Speaker Change: Thank you.
Speaker Change: Hello, everyone isn't.
Speaker Change: Thank you for joining us on today's call.
Operator: I will now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company.
Speaker Change: In Q2 24 weeks.
Operator: Please go ahead, Laura.
We achieved the revenue gross up 18% and adjusted EBITDA growth up 15%. This growth rate is quite remarkable in current market conditions.
Laura Chen: Please go ahead, Laura.
Laura Chen: Thank you.
Laura Chen: Hello everyone.
Laura Chen: Thank you.
Laura Chen: Hello everyone.
Speaker Change: Is it reflects the progress, which we have made in stabilizing our China business.
Laura Chen: Welcome to the second quarter 2024 earnings conference call of GDS, Holdings Ltd. The company's results were issued via Newswire Services earlier today and are posted online.
Laura Chen: A summary presentation which we'll refer to during this conference call can be viewed and downloaded from our IR website at investors.gdsservices.com.
Laura Chen: Welcome to the second quarter of 2024 earnings conference call of GDS Holdings Ltd. The company's results were issued via Newswire Services earlier today and are posted online.
Speaker Change: And the uplift from the highly successful execution of our international strategy.
Laura Chen: Leading today's call is Mr.
William Huang: For our China business, we have two key financial objectives. Number one is to grow EBITDA at a steady rate. And the number two is to generate a positive cash flow before financing. We believe that this combination can create significant equity value and help drive our share price recovery. In order to achieve these objectives, we provide delivery in the back row. At the same time, we take a highly selective approach to a new business, targeting orders which fits our inventory and have fixed the moving schedules. This will allow us to grow while minimizing the need for incremental caps.
Laura Chen: A summary presentation, which we'll refer to during this conference call, can be viewed and downloaded from our IR website at investors.gdsservices.com.
Speaker Change: For our China business, we have two key financial objectives.
Laura Chen: Leading today's call is Mr. William Huang, GDS Founder, Chairman and CEO, who will provide an overview of our business strategy and performance.
Laura Chen: William Huang, GDS Founder, Chairman and CEO, who will provide an overview of our business strategy and performance.
Speaker Change: Number one is to.
Speaker Change: Well EBITDA at a steady rate.
Laura Chen: Mr. Dan Newman, GDS CFO, will then review the financial and operating results.
Speaker Change: And then number two is to generate a positive cash flow before financing.
Laura Chen: Ms. Jamie Khoo, CEO of GDS International, is also available to answer questions.
Speaker Change: We believe that this combination can create significant.
Speaker Change: Everyday value and help drive our share price recovery.
Speaker Change: In order to achieve this.
Objectives.
Laura Chen: Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S.
Laura Chen: Private Securities Diligent Reform Act of 1995.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Problem with her.
Speaker Change: Alright.
Speaker Change: Delivering the best backdrop.
Speaker Change: The same time, we take a highly selective approach to new business.
Laura Chen: Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Laura Chen: Further information regarding these and other risks and uncertainties is included in the company's prospectus as filed with the U.S.
Laura Chen: The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Laura Chen: Please also note that GDS earnings press release at this conference call includes discussions of unaudited GAP financial information as well as unaudited non-GAP financial measures. GDS press release contains a reconciliation of the unaudited non-GAP measures to the unaudited most directly comparable GAP measures.
Laura Chen: I will now turn over the call to GDS founder, chairman, and CEO, William, please go ahead.
William Huang: Thank you.
Speaker Change: Targeting Horus, which fits our inventory and they have fixed and more being scheduled.
William Huang: Hello, everyone.
William Huang: This is William.
Speaker Change: This will allowed us to grow wild.
Speaker Change: It might be a need for incremental capex.
William Huang: We have been following this strategy for a while, and it's starting to produce noticeable results. Over the past couple of quarters, the gross moving rate has clearly stepped up. In 2024, it was over 20,000 square meters, the highest level for the past three years. The main reason for this improvement is the contract which we signed was fast and with a faster moving schedule. These are mainly large, larger Internet customers whose business continues to grow strongly. However, we are also beginning to see improvements from orders which have been in the back rows for longer. We expect this trend to continue as our customers implement their AI plans.
Speaker Change: We have been following this strategy for a while and it's starting to produce noticed food recalls.
Speaker Change: Over the past couple of quarters.
Speaker Change: The graph.
Speaker Change: Moving rates has clearly stats that stepped up and took the plentiful and it was over 20000 square meters.
Speaker Change: Highest level for the past three years.
Speaker Change: The main reason for this improvement is the contract, which we signed with fast with faster moving schedule.
William Huang: Thank you for joining us on today's call.
William Huang: In 2024, we achieved a revenue growth of 18% and adjusted EBITDA growth of 15%.
Speaker Change: Mainly large larger internet customers.
William Huang: This growth rate is quite remarkable in current market conditions. It reflects the progress which we have made in stabilizing our China business, and the uplift from the highly successful execution of our international strategy.
William Huang: For our China business, we have two key financial objectives.
William Huang: Number one is to grow ipita at a steady rate.
Speaker Change: Customers, whose business continues to grow strongly. However, we are also beginning to see improvement from August which have been in the in the backlog for longer.
William Huang: And then number two is to generate a positive cash flow before financing.
William Huang: We believe that this combination can create significant equity value and help drive our share price recovery. In order to achieve this, this...
William Huang: Objectives.
William Huang: We prioritize delivering the background.
Speaker Change: We expect this trend to continue.
Speaker Change: Our customers.
Speaker Change: Implemented there.
Speaker Change: Pat.
William Huang: In order to support higher moving, we need to complete some projects which have been in progress for a while. In the first half of 2024, we brought 45 solid square meters into service. As at 30 June, this was already over 20% utilized. In the second half of 2024, we expect to complete another 32,000 square meters. The good news is that this does not require a lot of new caps as we only incur the cost to complete. The first indications of improved the demand is customers observing capacity for which they already made commitments. This is underway.
Speaker Change: In order to support.
Speaker Change: Hi hired a movie we needed to complete some projects, which have been in progress for a while in the first to hop up 'twenty 'twenty four we brought 45 school saw the square meters into service.
Speaker Change: At 30 June this was already over 20% utilized in.
Speaker Change: In the second half of 'twenty 'twenty four.
Speaker Change: <unk> completed another series to.
Speaker Change: <unk> thousand square meters.
Speaker Change: Good news the good news is that this does not have been quite a lot of new capex as we only incur the cost to complete.
Speaker Change: The first two indications improve improve the demand if customers are suffering.
Speaker Change: Capacity for which they already made commitments.
Speaker Change: Is underway.
William Huang: After that, we will start to see more new business opportunities. We are well positioned to support AI demand as we are holding enough land and a power quota. In the meantime, we will stick with our strategy of being very selective about what new business we take on.
Speaker Change: After that we will start to see more new business opportunities.
Speaker Change: We are well positioned to support a I commit as we are holding holding enough land and power quota.
William Huang: At the same time, we take a highly selective approach to new business, targeting orders which fits our inventory and have fixed the moving schedule. This will allow us to grow while minimizing the need for incremental capex.
Speaker Change: In the meantime, we will stick with our strategy of being very selective about what what the new business, we take takeoff.
William Huang: We have been following this strategy for a while, and it's starting to produce noticeable results. Over the past couple of quarters, the growth moving rate has clearly stepped up.
William Huang: In our international business, we are already seeing very strong demand. We had a phenomenal second quarter with 206 megawatts of new orders spread across our two campuses in Johor. More recently, we signed a master sales agreement with the global technology company for capacity as our new campus in Baton. This is a major breakthrough, which will lead to further larger orders. Singapore, Jehovah Tang, is faster emerging as one of the very largest data center markets in the world. And we have a great market position; where is this demand coming from? Part of it is reading no expansion, and the part of it is feel over from the US, which is mostly AI related.
Speaker Change: In our international business, we are already seeing very strong demand.
William Huang: In 2024, it was over 20,000 square meters, the highest level for the past three years. The main reason for this improvement is the contract which we signed with a faster-moving schedule. These are mainly large Internet customers whose business continues to grow strongly.
Speaker Change: We had a phenomenal.
Speaker Change: Second quarter with two so you don't have to.
Speaker Change: 206 megawatts of new all the orders spread out across our two campus kind of fits into hall.
William Huang: However, we are also beginning to see improvements from orders which have been in the backlog for longer.
Speaker Change: Our recent most recently, we signed a master sales agreement with a global Tech technology company for capacity at our new campus in Botswana.
Speaker Change: This is a major.
Breakthrough, which we which you will need to further larger orders.
Speaker Change: Singapore, you hope that that is fast emerging.
Speaker Change: That's one of the very largest data center markets in the world.
Speaker Change: We have a great market position.
Speaker Change: Is this demand coming from.
Speaker Change: Part of it part of it is reading, though expansion and a part of it is spill over from the U S, which is most of it most of the E R.
Speaker Change: Later.
William Huang: A critical success fact is that we were first to move into Jehovah and how to create the market. We anticipated where demand will flow and secure this resource, which give us time to market advantage. We have shown that we can execute delivery data centers in record time with the state-of-the-art design and the technology solutions. We have also shown that we can operate working with the local institutions to sourcing to source and to train talent. From the perspective of our customers, these are really meaningful differentiators. As of today, we have 388 megawatts of total customer commitments, out of which 101 megawatts is already utilized.
Speaker Change: A critical success factor is that we were the first mover into a hole and how to create that market well.
Speaker Change: We anticipated it where.
Speaker Change: Well for all and a secure this resource which give us a time to market advantage.
Speaker Change: We have shown that we can execute.
Speaker Change: Every data centers in that car type.
Speaker Change: With its state of the art design and technology solutions, we have also shown.
That's we can operate working with the local institutions.
Speaker Change: So sourcing so source and the trained talent.
From the perspective of our customers these are really meaningful differentiators.
Speaker Change: As of today, we have three <unk> 388 megawatts of total customer commitments of which 101 101 megawatts is already utilized and two 287 megawatts is the backlog.
William Huang: And 287 megawatts is backlog. The delivery schedule for most of the backlog is very short, and the customers undertake to move in quickly. As a result, on the terms of existing contracts, we expect to have over 350 megawatts of utilized capacity within 24 months.
Speaker Change: The delivery schedule for most of the backlog is very short and the customers undertake to move in quickly.
William Huang: We expect this trend to continue as our customers implemented their AI plan, in order to support, higher moving, we needed to complete some projects which have been in progress for a while.
Speaker Change: As a result basis on the tug on the terms of the existing contracts. We expect to have over 350 megawatts I want you to utilize the capacity within 24 months.
William Huang: In the first half of 2024, we brought 45,000 square meters into service. As at 30 June, this was already over 20% utilized. In the second half of 2024, we expect to complete another 32,000 square meters.
Daniel Newman: I will now pass on to Pierre for the financial and the operating review.
Laura Chen: Mr. Dan Newman, GDS CFO, will then review the financial and operating results.
Speaker Change: I will now pass I'll pass on to bed for the financial and operating review.
Daniel Newman: Thank you, Maria. On the completion of the first external equity capital raising for our international business, we have started formal disclosure of segment financials. As shown on slide 17, Digital Land Holding Limited and its subsidiaries comprises all of our business and assets outside of mainland China, except for some minor third-party data centers in Hong Kong. We refer to this segment as GDSI or International. GDS Holdings Limited and all of its subsidiaries, excluding GDSI, comprises our ultimate holding company and all of our business and assets in mainland China. We refer to this segment as GDSH or China.
Laura Chen: Ms. Jamie Khoo, CEO of GDS International, is also available to answer questions.
Speaker Change: Yeah.
Laura Chen: Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S.
William Huang: The good news is that this does not require a lot of new capex, as we only incur the cost to complete.
Laura Chen: Private Securities Diligation Reform Act of 1995.
Speaker Change: Following the completion of the first external equity capital raising for our international business.
Laura Chen: Forward-looking statements involve inherent risks and uncertainties. As such, the company's results, may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus as filed with the U.S. SEC.
William Huang: The first indication of improved demand is customers observing capacity for which they already made commitments. This is underway.
Laura Chen: The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
William Huang: After that, we will start to see more new business opportunities.
Speaker Change: We have started full disclosure segment financials.
Laura Chen: Please also note that GDS earnings press release at this conference call includes discussions of unaudited gap financial information as well as unaudited non-gap financial measures. GDS press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gap measures.
Speaker Change: As shown on slide 17.
William Huang: We are well-positioned to support AI demand as we are holding enough land and power.
Speaker Change: It's just a land holdings limited and its subsidiaries comprise.
William Huang: In the meantime, we will stick with our strategy of being very selective about what new business we take on, in our international business.
Speaker Change: Comprises all of our business and assets outside of mainland China.
Speaker Change: Except for some minor third party data centers in Hong Kong.
Laura Chen: I'll now turn
You can refer to this segment that's G D S L a or international.
Laura Chen: over the call to GDS founder, chairman, and CEO, William.
GDS Holdings Ltd, and all of its subsidiaries, excluding GDS alright.
Speaker Change: Comprises our ultimate holding company and all of that business and assets in mainland China.
William Huang: Please go ahead, William.
Speaker Change: We refer to this segment has G D S H or China.
Daniel Newman: Starting with the China segment on slide 18, in 2Q24, GDSH revenue increased by 8.9%, and adjusted EBITDA increased by 4.3% year-on-year. In order to show the underlying growth rate, we excluded previously disclosed one-time items from 2Q23. GDSH revenue growth was mainly driven by an increase in total area utilized at 10.2% year-over-year. As shown on slide 21, NSR per square meter comparing 2Q24 with 2Q23 was flat. However, EBITDA margin for 2Q24 versus 2Q23 was down by 2.1 percentage points. The main reason for this is the increase in power tariffs, which occurred during the second half of last year.
William Huang: Thank you.
Speaker Change: Starting with the China segment on Slide 18.
William Huang: Hello, everyone.
Speaker Change: In Q2 24.
Speaker Change: D S H revenue increased by eight 9%.
Speaker Change: And adjusted EBITDA increased by four 3% year on year.
Speaker Change: In order to show the underlying growth rate.
Speaker Change: Excluded previously disclosed one time items from <unk> 23.
J D S. H revenue growth was mainly driven.
Speaker Change: By an increase in the total area utilized a 10, 2% year over year.
Speaker Change: As shown on slide 21.
And it's all per square meter.
Turning to Q24, with <unk> 23.
Speaker Change: Plus.
Speaker Change: However, EBITDA margin to 24 to <unk> 23 was down by two one percentage points.
Speaker Change: The main reason for this is the increase in power tariffs, which occurred during the second half of last year.
Daniel Newman: Turning to the international segment on slide 19, in 2Q24, GDSH revenue increased by 24% and adjusted EBITDA by 80% quarter-on-quarter. The rate of progress quarter by quarter depends on the timing of capacity completions and contractual revenue commitments. The increase in the next couple of quarters is quite small, but thereafter it will take off.
Speaker Change: Turning to the international segment on Slide 19.
Speaker Change: Two to 24 G D O side revenue increased by 24%.
Speaker Change: And adjusted EBITDA by 18% quarter on quarter.
Speaker Change: As shown on slide 21.
Two crew 24, there was a 28 megawatt increase and pallet utilized.
Speaker Change: The MSR per kilowatt per month.
Speaker Change: $135.
William Huang: This is William.
Speaker Change: <unk> income.
Didnt: That's what Didnt mentioned the ramp up over the next 24 months will be extraordinary.
Speaker Change: The rates of progress quarter by quarter it depends on the timing of the completions.
Speaker Change: Actual revenue commitments.
Speaker Change: The increase in the next couple of quarters is quite small.
Speaker Change: Thereafter, it will take off.
Daniel Newman: Turning to CAPEX on Slide 23. In 1H24, our China CAPEX totaled 1.8 billion RMB. We expect lower CAPEX in the second half of the year, including the proceeds of the BOT data center transfer, and still maintain our 2.5 billion RMB guidance for the full year. In 1H24, our international CAPEX was also around 1.8 billion RMB. In the second half of the year, we expect CAPEX to increase significantly, and it is likely that we will exceed our CAPEX guidance for international of 4 billion RMB. Fortunately, the lead time from incurring CAPEX to generating revenue in the international business is very short.
Turning to Capex on slide 23.
Speaker Change: One H 'twenty for El Tri net Capex totaled $1 8 billion RMB.
Speaker Change: We expect lower Capex in the second half of the year, including the proceeds of the P. O T data center transfer.
Speaker Change: And still maintain a 2.5, but in our guidance for the full yet.
Speaker Change: And one age 24, so international Capex.
Speaker Change: It was also around $1 8 billion RMB.
Speaker Change: In the second half of the year.
Speaker Change: <unk> capex to increase significantly.
Speaker Change: And it is likely that we will exceed our capex guidance for international or 4 billion RMB.
Speaker Change: Fortunately the lead time from incurring capex to generate some revenue in the international business is very short.
Daniel Newman: Turning to CAPEX on slide 24. Following the closing of the Series A new issue for international, GDSH received over 1.5 billion RMB from GDSI on repayment of a shareholder loan. This is included in investment cash flow for the GDSH segment and finance and cash flow for GDSI, including this repayment cash flow before financing for GDSH will be clearly positive this year in line with our financial objectives. GDSI cash flow for 2Q24 included $448 million or $3.2 billion RMB, the proceeds from Series A. The remaining $224 million from Series A was received by GDSI in July.
Speaker Change: Turning to cash flow on slide 24.
Speaker Change: Following the closing of the series a new issue for international.
Speaker Change: P. D. S. H received over 1.5 billion RMB from GTS, sorry, one repayment of a shareholder loan.
Speaker Change: This is included in investment cash flow for the GDS age segment.
Speaker Change: And financing cash flow for GSI.
Speaker Change: Including this repayment cash flow before financing for G. D S H.
Speaker Change: We'll be clearly opposed to this year in line with our financial objectives.
Speaker Change: GDS like cash flow for <unk>, 24, including $448 million or $3 2 billion RFP. The proceeds from the series a.
Speaker Change: The remaining $224 million from the series a was received by Judy at site in July.
Daniel Newman: As shown on slide 25, at the end of 2Q24, the cash balance of GDSH increased to $8.4 billion RMB, and the net debt to last quarter-analyzed adjusted EBITDA multiple decreased to 7.2 times.
Speaker Change: As shown on slide 25 at the end of 2024.
Speaker Change: The cash balance of TD S H increased to $8 4 billion RMB.
Speaker Change: And the net debt to last quarter annualized adjusted EBITDA multiple decreased to seven two times.
Daniel Newman: In order to accelerate our financial transformation, we are working on a number of asset monetization initiatives. Our key strategic goal is to set up a REIT listed in China holding data center assets. There is strong policy support for new infrastructure REITs, and we have selected a stabilized project to move forward and are working through the regulatory approval process. This will be a first of a time transaction for data centers in China, and we are strongly committed to making it happen. Turning to international on slide 27, at the end of 2Q24, GDSI had a cash balance of $3.1 billion RMB pro-former for the second flash of Series A proceeds.
Speaker Change: In order to accelerate our financial transformation.
Speaker Change: We're working on a number of asset monetization initiatives.
Speaker Change: A key strategic goal is to set up a REIT.
Speaker Change: In China, holding data center assets.
Speaker Change: There is strong policy support.
Speaker Change: The new infrastructure Reits.
Speaker Change: We selected a stabilized project to move forward and are working through the regulatory approval process.
Speaker Change: This will be a first of its kind transaction the data centers in China, and we are strongly committed to making it happen.
Speaker Change: Turning to international on Slide 27.
Speaker Change: At the end of Q2 'twenty for GSI had a cash balance of $3 1 billion RMB pro forma for the second tranche of series a proceeds.
Daniel Newman: Given the existing level of customer commitments and the strong sales pipeline, the plans raised further equity for GDSI in a Series B round. The process is already underway. There is strong interest from global investors, and we are confident that this round will set a higher benchmark for the value of our equity investment in international.
Speaker Change: Given the existing level of customer commitments and a strong sales pipeline.
William Huang: We are already seeing very strong demand.
William Huang: We had a phenomenal second quarter with 206 megawatts of new orders spread across our two campuses in Johor.
William Huang: More recently, we signed a master sales agreement with a global technology company for capacity at our new campus in Batang.
The plan to raise further equity for GDP for BDSI and a series B round.
William Huang: This is a major breakthrough, which will lead to further larger order.
Speaker Change: The process is already underway.
William Huang: Singapore Jeho Batan is fast emerging as one of the very largest data center markets in the world, and we have a great market position.
Speaker Change: Strong interest from global investors and we are confident.
Speaker Change: Around who set a higher benchmark for the value of our equity investment in international.
Daniel Newman: Finishing on slide 29, we are maintaining our formal guidance for FY24 consolidated revenue, adjusted EBITDA, and CAPEX. However, it is likely that we will raise our CAPEX guidance at the time of 3Q24 results when we have a firm review on the timing and amount of CAPEX for international.
Speaker Change: Finishing on slide 29.
William Huang: Where is this demand coming from? Part of it is regional expansion, and the part of it is spillover from the US, which is mostly AI related. A critical success fact is that we were the first mover into Johor and helped create the market.
Speaker Change: We're maintaining our full guidance for FY 'twenty for consolidated revenue adjusted EBITDA and Capex. However, it is likely that we will raise our capex guidance at the time of 324 results.
Speaker Change: We have a firmer view on.
Speaker Change: The timing and amounts of Capex for international.
Operator: We now like to open the call to questions. Operator, please. Thank you.
William Huang: We anticipated where demand will flow and secure the resource, which gives us a time-to-market advantage.
William Huang: We have shown that we can execute, delivery data centers in record time, with the state-of-the-art design and technology solutions.
Speaker Change: And now I'd like to open the call to questions. Operator. Please. Thank you. We will now begin the question and answer session to ask a question on the phone. Please press star one one and <unk> name to be announced.
William Huang: We have also shown.., that we can operate working with the local institutions to source and train talent.
William Huang: From the perspective of our customers, these are really meaningful differentiators.
Operator: We will now begin the question and answer section. To ask a question on the phone, please press star 11 and refer a name to be announced. For the benefit of all participants on today's call, please meet yourself to one question. If you have more questions, please re-enter the queue.
All participants on today's call. Please limit yourself to one question if you have.
Speaker Change: More questions. Please re enter the queue.
Operator: One more moment for the first question.
Speaker Change: One moment for the first question.
Speaker Change: Yeah.
Yang Liu: First question, come from the line of Young Liu from Morgan Stanley. Please go ahead. Thank you for the opportunity to ask questions. I would like to congratulate you first on the very strong set of results. I would like to ask about the China part, the READS plan. Could management elaborate more in terms of the timing of this infrastructure READS? And also, what could be the potential valuation when you inject the asset to the READS? And who could be the, what type of investor could be the buyer? And what is the current, whatever hurdle or key debate between the buyer and the company, and also between the regulator and the company?
William Huang: As of today, we have 388 MW of total customer commitments, out of which 101 MW is already utilized, and 287 megawatts is the backlog. The delivery schedule for most of the backlog is very short and the customers undertake to move in quickly.
Speaker Change: First question comes from Doug Young from Morgan Stanley. Please go ahead.
William Huang: As a result, based on the terms of the existing contract.
William Huang: We expect to have over 350 megawatts of utilized capacity within 24 months.
Doug Young: Thanks for the opportunity to ask questions I would like to congratulate you first on the very strong set of results.
William Huang: I will now pass on to Dan for the financial and operating review.
Daniel Newman: Thank you very much.
Daniel Newman: Following the completion of the first external equity capital raising for our international business, we have started formal disclosure of segment financials. As shown on slide 17.
Doug Young: I would like to ask about the China parts are the rights plan.
Daniel Newman: Digital Land Holdings Ltd and its subsidiaries, yw'n cynnwys yr holl gwaith a'r asyliadau hefyd yng Nghymru a'r China, except for some minor third-party data centres in Hong Kong, rydyn ni'n golygu'r segment hwn fel GDSI neu gweithredu, and all of its subsidiaries, excluding GDSI, comprises our ultimate holding company, a phrosiectau a'n busnes a'n asyliadau yng Nghymru a Chymru, rydyn ni'n golygu'r segment hwn fel GDSH, neu China, starting with the China segment on slide 18.
Speaker Change: Can management elaborate more are in term of the timing of the of this infrastructure rich and also what could it be the potential valuation when you inject the ask that to the rich I know who could it be the or what type of investor or could it be a buyer.
Speaker Change: Or what is the current oh, whatever hurdle or a key debate between the buyer and the company and also with between the regulator and the company yes. Thank you.
William Huang: Yes, thank you.
Speaker Change: Yeah.
William Huang: Thank you, Yang Liu. I'll answer that question. In order to pursue this strategy, we selected a single site with two data centers as the seed asset for the REIT. Typical REIT offerings in China, historically, have been around two billion R&B per transaction, and that seems to be a side which the market is comfortable with, and we select an asset to fit with that. Under the REIT regulations, the asset must be stabilized. We must own the real state, so the asset also qualifies on that basis. There's a series of regulatory approvals that we need to obtain.
Yang: Thank you Yang.
Speaker Change: I'll answer that question.
Daniel Newman: Yn 24 TŪKŪ, Mae'r gwasanaeth GDSH yn cynyddu o 8.9% Mae cynyddu o 4.3% Yn y blynyddoedd.
Speaker Change: In order to pursue this strategy we've selected.
Speaker Change: Hey.
Speaker Change: Single site with two data centers.
Speaker Change: I see I.
Speaker Change: Seed assets for the REIT are.
Speaker Change: Typical.
Speaker Change: <unk> offerings in China, historically has been around 2 billion RMB.
Speaker Change: One is action.
Speaker Change: That seems to be a size, which the market is comfortable with them.
Speaker Change: Reflecting assets too to.
Speaker Change: Fit with us under the REIT regulations, the asset must be stabilized we must own the real estate. So yes, yes. It also qualifies on that basis.
Speaker Change: Uh Huh the series a.
Regulatory approvals that we need to obtain.
Daniel Newman: Er mwyn ddangos y niferoedd diogelwch ar-lein, Rydyn ni'n gysylltio'r pethau un o'r amser sydd wedi'u cyflwyno'n gyntaf o 2Q23.
William Huang: We've already been working on this for over one year, and we're getting to the level where the regulatory approvals would be sorted, central government level. If that is successful, we will receive approval to be able to proceed with the offering, which is then valid for one year. We hope to reach that milestone next year. It's not normal to do testing the waters or pre-marketing exercise in China, but we do have an active dialogue with major financial institutions in China because we've also been looking at pre-packaging some assets which are not yet stabilized as a way of creating a pipeline for the REIT.
Speaker Change: We've already been working on this for over one year.
Speaker Change: And we're getting to the level where we.
Speaker Change: Regulatory approvals would be sort of the central government level.
Speaker Change: If that is successful.
Speaker Change: We will.
Speaker Change: Receive approval and hope to be able to proceed with the offering which has been valid for one year.
Speaker Change: We hope to.
Speaker Change: <unk> reached that milestone.
Speaker Change: Next year.
Speaker Change: It has more to do.
Speaker Change: Testing, the waters or pre marketing exercise and.
Speaker Change: In China, we do have an active dialogue with major financial institutions in China, because we've also been looking at pre packaging some assets, which are not yet stabilized.
Speaker Change: As a way of creating a pipeline for the REIT.
William Huang: We receive very positive feedback. There's a significant appetite amongst financial institutions in China to get exposure to new infrastructure, including data centers, data centers which are green, which have very high quality internet company or cloud customers. We think that a substantial percentage of the offering to the public will be taken up by strategic or anchor-type investors. Under the regulations, we will be required to retain a 20 percent. There is quite a significant public listed REIT sector in China. Those REITs which are real estate based tend to trade on dividend yields, which fall within a fairly well-defined range.
Speaker Change: Yeah.
Speaker Change: See very positive feedback.
Speaker Change: The significant appetite.
Speaker Change: All financial institutions in China to get exposure to new infrastructure, including data centers.
Speaker Change: Data centers, which are which are green, which had very high quality Internet company or cloud.
Speaker Change: Customers.
Speaker Change: Hum.
Speaker Change: Actual.
Speaker Change: <unk> of the.
Speaker Change: Oh offering to the public will be taken up by.
Speaker Change: Strategic or Oncotype.
Speaker Change: Investors.
Speaker Change: Uh huh.
Speaker Change: Under the regulations, we will be required to retain a 20% they're all there is a quite a.
Speaker Change: Significant.
Speaker Change: A publicly listed REIT sector in China.
Speaker Change: Those Reed switch all real estate based.
Speaker Change: Trying to trade on.
Speaker Change: Our dividend yield which pull within a.
Speaker Change: Fairly well defined range.
William Huang: If we take that range and look at it very conservatively, based on the amount of income which we think we will be able to distribute, it implies an EBIT down multiple, which I think it will be clearly appreciative compared with where we're trading. If you look at our current public market value, one of some of the past bases is to strip out international at the last series A price benchmark. Our China business is being valued at somewhere between 9 to 10 times current EBITDA. The China sector is trading at implied EBITDA, which is a quantum higher than that, so hopefully we will be able to capture that.
Speaker Change: If we take that range.
Speaker Change: Look at it very conservatively.
Speaker Change: Based on the amount of income, which we think we will be able to distribute it implies an EBITDA multiple which.
Speaker Change: I think it will be.
Speaker Change: Clearly accretion.
Speaker Change: Compared with where we're trading if you took it out.
Speaker Change: Current.
Speaker Change:
Speaker Change: The public market value on some of the parts basis to strip out International lost series, a price benchmark, our China business is being valued at somewhere between 9% to 10 times.
Daniel Newman: GDSH revenue growth was mainly driven, gyda chynyddiad o 10.2% dros y blynyddoedd.
EBITDA.
Operator: Hello, ladies and gentlemen.
Operator: Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Ltd. 2nd, quarter, 2024 earnings conference call. At this time, all participants are in this and only mode. After management, we very much, there will be a question and answer session. So this conference call is being recorded.
Speaker Change: The China.
Operator: Thank you for standing by for GDS Holdings Ltd.
Speaker Change: The sector is trading at an implied EBITDA, which is a concern.
William Huang: Thank you for joining us on today's call.
William Huang: In 2024, we achieved a revenue growth of 18% and adjusted EBITDA growth of 15%.
Speaker Change: So hopefully we will be able to.
Speaker Change: To capture that.
Speaker Change: Okay.
Frank Louthan: Thank you for the questions. One moment for the next question. Our next question comes from the line of Frank Louthan from Dream on James. Please ask your question. Great, thank you. Can you characterize how much of the business in mainland China is AI-driven, and can you give us an idea of the current impact of the Chinese economy on the demand for that base of the business? Thanks. Okay, Frank, this is one of the first questions. I think the current demand, the new demand in China currently, I think it is 70% was driven by AI type required, including the training and also inference. So the remaining 30% is driven by the internet company and the traditional cloud business. Yeah, this is the, what's the final question, how is the economy impacting the demand?
Daniel Newman: 在第21页所示, MSR per square meter.
Speaker Change: Thank you for the questions.
Daniel Newman: Cwblhau 2Q24 gyda 2Q23 oedd ychydig.
Speaker Change: One moment for the next questions.
Laura Chen: I will now turn the call over to your host, Ms. Laura Chen, head of investor relations for the company, with our head lower. Thank you. Hello, everyone.
Okay.
Daniel Newman: However, EBITDA margin for 2Q24 versus 2Q23 was down by 2.1%. The main reason for this is the increase in power tariff, a oedd yn digwydd dros ddeunydd y flwyddyn diwethaf.
Speaker Change: Our next question comes from the line I'll frame the answer.
William Huang: This growth rate is quite remarkable in current market conditions. It reflects the progress which we have made in stabilizing our China business and the uplift from the highly successful execution of our international strategy.
William Huang: For our China business, we have two key financial objectives.
William Huang: Number one is to grow EBITDA at a steady rate.
William Huang: And number two is to generate a positive cash flow before financing.
Speaker Change: From Raymond James Please ask your question.
Operator: 2nd, quarter, 2024 earnings conference call.
Laura Chen: Welcome to the second quarter of 2024 earnings conference call of GDS Holdings Ltd. The company's results were issued via newswire services earlier today and posted online. A summary presentation which will refer to during this conference call can be viewed and downloaded from a IO website at investors.gdservices.com.
William Huang: We believe that this combination can create significant equity value and help drive our, share price recovery.
William Huang: In order to achieve these objectives, we prioritize delivering the background.
William Huang: At the same time, we take a highly selective approach to new business. Targeting orders which fit our inventory and have fixed move-in schedules. This will allow us to grow while minimizing the need for incremental capex.
Speaker Change: Great. Thank you can you characterize how much of the business in mainland China is AI, driven and can you give us an idea of the current impact of the Chinese economy to the demand on on that base of the business. Thanks.
William Huang: We have been following this strategy for a while and it's starting to produce noticeable results. Over the past couple of quarters, the gross move-in rate has clearly stepped up. In 2024, it was over 20,000 square meters, the highest level for the past three years. The main reason for this improvement is the contract which we signed with faster move-in schedules. These are mainly large Internet customers whose business continues to grow strongly. However, we are also beginning to see improvements from orders which have been in the backlog for longer.
William Huang: We expect this trend to continue as our customers implement their AI plans.
Operator: At this time, all participants are in this and only mode.
William Huang: In order to support higher move-in, we need to complete some projects which have been in progress for a while.
William Huang: In the first half of 2024, we brought 45,000 square meters into service. At 30 June, this was already over 20% utilized. In the second half of 2024, we expect to complete another 32,000 square meters.
William Huang: The good news is that this does not require a lot of new capex as we only incur the cost to complete.
William Huang: The first indication of improved demand is customers observing capacity for which they already made commitments. This is underway.
William Huang: After that, we will start to see more new business opportunities.
William Huang: We are well positioned to support AI demand as we are holding enough land and power quotas.
William Huang: In the meantime, we will stick with our strategy of being very selective about what new business we take on.
William Huang: In our international business, we are already seeing very strong demand. We had a phenomenal second quarter with 206 megawatts of new orders spread across our two campuses in Johor.
William Huang: More recently, we signed a master sales agreement with a global technology company for capacity at our new campus in Bataan.
William Huang: This is a major breakthrough which will lead to further larger orders.
William Huang: Singapore's Jiho Batan is fast emerging as one of the very largest data center markets, in the world and we have a great market position.
William Huang: Where is this demand coming from?
Operator: After management, we very much, there will be a question and answer session.
William Huang: Leading today's call is Mr. William Huang, GDS founder, chairman and CEO who will provide an overview of our business strategy and performance.
Daniel Newman: Dwi'n mynd i'r segment gweithreduol ar y sgriwt 90.
William: Okay. This is William.
Daniel Newman: In 2Q24, GDSI revenue increased by 24%, a chydweithio i evidarn ym mhob 80% ym mhwrdd ym mhwrdd.
Daniel Newman: Fel y dywedodd ar ddisgwyddiad 21, During 2Q24, there was a 28 MW increase in IT power utilized, the NSR per kilowatt per mark, was $135 including power income.
William: Yeah. The first question I think.
Speaker Change: The current demand a new demand in China currently I think the 70% was driven debate.
Daniel Newman: Mr. Daniel Newman, GDS CFO, will then review the financial and operating results.
Jamie Kuh: Ms. Jamie Kuh, CEO of GDS International, is also available to answer questions.
Speaker Change: AI type requirement, including the treating and also influence infancy.
Operator: So this conference call is being recorded.
Laura Chen: Before we continue, please note that today's discussion will contain forward-looking statements made under the same harbor provisions of the U.S, private secluded litigation reform act of 1995. Forward looking statements involve empiric risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in a complex perspective as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Speaker Change: The remaining 30%.
Speaker Change: But by the Internet company and the and also the Ah <unk>.
Speaker Change: Traditional cloud business Yeah. This is with.
Speaker Change: Second question.
William Huang: Part of it is regional expansion and part of it is spillover from the U.S. which is, mostly AI related.
Speaker Change: As the economy impacting demand I think there.
William Huang: I think the, so far, I think for training and the cloud business, I think this is not direct impact from current China macro environment, it's totally opposite and I think this is based on the, a lot of the, let's say, giant, they are continue to invest in the cat packs to train their own model and also try to, in China there's a lot of the, still the more application type, the vertical type of the AI stuff, so this looks like it's created a very, it's created his own, let's say, environment, right, so this is the, what are happening in China right now?
William Huang: A critical success fact is that we were first mover into Jiho and helped to create the market.
Speaker Change: So far I think in for training and in the cloud business I think this is not direct impact upfront.
Speaker Change: Current.
Speaker Change: Our China.
Speaker Change: In fact, it's a.
Speaker Change: Totally opposite yeah, and I think it gives us the base on the a lot of D.
Laura Chen: Please also note that GDS earnings press release at this conference call includes discussions of an auditive gap financial information as well as an auditive non-gap financial measures. GDS press release contains a reconciliation of the unordered non-gap measures to the unordered most drastically comparable gap measures.
Speaker Change: I'd say Uh huh.
They are continue to invest today.
Speaker Change: Capex too.
Speaker Change: Chain chain, they have their own model and also.
Speaker Change: But in China, there's a lot of D. Skus. It gives a lot of startup company is.
Laura Chen: I will now turn the call over to your host, Ms. Laura Chen, head of investor relations for the company, with our head lower.
William Huang: I will now turn over the call to GDS founder Chairman and CEO William. Please go ahead, William. Thank you. Hello, everyone. This is William. Thank you for joining us on today's call. In QQ24, we achieved the brand new growth of 18% and adjusted the imbidak growth of 15%. This growth rate is quite remarkable in current market conditions. It reflects the progress which we have made in stabilizing our China business and the uplift from the highly successful exclusion of our international strategy.
Speaker Change: What's invested by the venture capital to do the more application pack the vertical type of update.
Laura Chen: Thank you.
Speaker Change: Yeah.
Laura Chen: Hello, everyone.
Speaker Change: So is it looks like.
Laura Chen: Welcome to the second quarter of 2024 earnings conference call of GDS Holdings Ltd. The company's results were issued via newswire services earlier today and posted online. A summary presentation which will refer to during this conference call can be viewed and downloaded from a IO website at investors.gdservices.com.
Speaker Change: It's a very discrete.
Laura Chen: Leading today's call is Mr. William Huang, GDS founder, chairman and CEO who will provide an overview of our business strategy and performance.
Speaker Change: His own let's say environment right. So.
Speaker Change: Is it does it.
Speaker Change: What is happening in China right now.
Laura Chen: Mr. Daniel Newman, GDS CFO, will then review the financial and operating results.
Speaker Change: Yeah.
Operator: Thank you for the questions. Next question, one moment please.
Speaker Change: Thank you for the questions.
Laura Chen: Ms. Jamie Kuh, CEO of GDS International, is also available to answer questions.
Speaker Change: Next question one moment please.
Speaker Change: Yeah.
Sarah Wang: Our next question comes from Sarah Wang from UBS. Please go ahead. Thank you for the opportunity to ask a question, and congratulations on the solid results. I have one question about international business. I've just mentioned there's quite some. I've had some needed for international business, and I asked what's the future of financing plan, especially in the near term, as well as in the mid- for example the potential spin-off or IPO. Thank you. Thank you very much.
Speaker Change: Our next question comes from Sara Wang from UBS. Please go ahead.
William Huang: We anticipated where demand will flow and secure this resource which give us a time, to market advantage.
William Huang: We have shown that we can execute delivery data centers in record time with the state, of the art design and technology solutions.
William Huang: We have also shown that we can operate working with the local institutions to source and, train talent.
Sara Wang: Alright, Thank you for the opportunity to ask the question and congratulations on the solid results.
Laura Chen: Before we continue, please note that today's discussion will contain forward-looking statements made under the same harbor provisions of the U.S, private secluded litigation reform act of 1995.
William Huang: For our China business, we have two key financial objectives. Number one is to grow Ipidak at a steady rate. And the number two is to generate a positive cash flow before financing. We believe that this combination can create significant equity value and help drive our shared ties to the covering. In order to achieve these objectives, we are delivering the background. At the same time, we take a highly selective approach to a new business, targeting orders which fits our inventory and have fixed the moving schedules.
Laura Chen: Forward looking statements involve empiric risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Sara Wang: I have one question about the international business.
Speaker Change: Then just mentioned there's quite some how about that.
Laura Chen: Further information regarding these and other risks and uncertainties is included in a complex perspective as filed with the U.S. SEC.
Speaker Change: For international business.
Speaker Change: What's the future financing plan.
Laura Chen: The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Vasily: It's Vasily Yeah, Carb X all of that in the midterm for example of the potential spin or IPO.
Speaker Change: No.
Speaker Change: Right.
Speaker Change: Yes, I'll take it a bit before that answer. This question I think you had said.
William Huang: Before I answer this question, I think all the financing requirement is based on our focus for the next two or three years. Our target is the subordinate current order number in within the next three years. This is our case. In terms of the financing plan, I think I would like to let it then introduce experiment a little bit more.
Speaker Change: Yeah, all the all the financing requirement is based on Oh.
Speaker Change: Our focus on.
Speaker Change: For the next.
Speaker Change: Two or three years.
Speaker Change: So our target is to double the current order number.
Speaker Change: Within the next three years. So this is our fate.
William Huang: This will allow us to grow while minimizing the need for incremental capex. We have been following this strategy for a while and it's starting to produce noticeful results. Over the past couple of quarters, the gross moving rate has clearly stepped up. In 2024, it was over 20,000 sqm, the highest level for the past three years. The main reason for this improvement is the contract which we signed was fast and with faster moving schedule.
Dan: In terms of the financing Pan I think I would like it let it Dan introduced experienced a little bit about.
William Huang: From the perspective of our customers, these are really meaningful differentiators.
Daniel Newman: I mentioned that we've started the process for a Series B rounds. We'll be raising capital once again from external investors, global investors, using a similar, similar instruments, type of security, convertible prefer shares. Our base case assumption is that the university's size will be similar to Series A and say 600 to 800 million dollars. It's possible that we could increase the size due to the affordances is there.
William Huang: As of today, we have 388 megawatts of total customer commitments out of which 101 megawatts, is already utilized and 287 megawatts is backlogged. The delivery schedule for most of the backlog is very short and the customers undertake, to move in quickly. As a result, based on the terms of the existing contracts, we expect to have over 350 megawatts, of utilized capacity within 24 months.
Speaker Change: Yes, I mentioned I mentioned that.
Daniel Newman: Fel y dywedodd William, bydd y cynyddiad dros y 24 mlynedd nesaf yn anhygoel.
Dan: Okay.
Daniel Newman: Mae'r rheswm o ddigwyddiad ym mhwrdd dros mhwrdd yn dybynnu ar y cyfnod o gyflawni'r cymdeithas, a'r cyfrifoldeb ar gyfer cyfrifoldeb.
Dan: Started the process for our series B rounds will be.
Dan: Raising capital once again from external investors.
Dan: Global investors.
Dan: Using a similar will be similar.
Dan: Trends type of security.
Dan: But preferred shares.
Daniel Newman: I will now pass on to Dan for the financial and operating review.
Our base case assumption is that the.
Dan: The newest two sites will be similar to.
Dan: The series a.
Dan: Say $600 million to $800 million as possible.
William Huang: These are mainly large Internet customers whose business continues to grow strongly. However, we are also beginning to see improvements from orders which have been in the back loss for longer. We expect this trend to continue as our customers implement their AI plans.
Daniel Newman: The increase in the next couple of quarters is quite small.
Dan: Okay.
Daniel Newman: Yn y blynyddoedd hwn, bydd yn mynd i'r ffwrdd.
Dan: Would increase the size.
Daniel Newman: Rwy'n mynd i'r Cafex ar flynyddoedd 23.
Daniel Newman: Rydyn ni'n gobeithio cathedralau llawer o'r ddeg ddeunydd o'r blynyddoedd, gan gynnwys y broses.
Daniel Newman: In 1H24, our China CapEx totaled 1.8 billion RMB.
Dan: Appetizers.
Speaker Change: Is there.
Daniel Newman: We're completing that offering, which we aim to do before the end of this year.
Speaker Change: Piecing that offering which we aim to do before the end of this year.
Daniel Newman: I think that the next financing that we will undertake at our international holding company level may be measuring debt. Certainly intend to explore that as way of optimizing the overall cost of capital international. At the same time, we are putting in place senior debt at the project level, usually in local currencies, and we are currently undertaking a large syndicated telephone for our Malaysian business. That can cover the range of different financing issues in international.
Speaker Change: I think that the next.
Speaker Change: Financing that we will undertake.
Speaker Change: Oh <unk>.
Speaker Change: International holding company level.
William Huang: In order to support higher moving, we need to complete some projects which have been in progress for a while. In the first half of 2024, we brought 45 sqm into service. As at 30 June, this was already over 20% utilized. In the second half of 2024, we expect to complete another 32,000 sqm. The good news is that this does not require a lot of new capex as we only incur the cost to complete. The first indications improve the demand is customers observing capacity for which they already made commitments. This is underway.
Speaker Change: May be mezzanine debt.
Speaker Change: Intend to explore.
Speaker Change: Explore that is way up.
Speaker Change: Optimizing the overall cost of capital.
Speaker Change: Nashville.
Daniel Newman: Yn ystod y trafnidiaeth ddata sefydlu BOT, and still maintain our 2.5 billion RMB guidance, for the full year.
Daniel Newman: In 1H24, our international cafe, yw hefyd ymwneud ag 1.8 miliwn o awdurdodau.
Speaker Change: At the same time.
Daniel Newman: Byddwn yn gobeithio y bydd capex yn cynyddu'n fawr iawn ym mhlynedd ddeunydd y flwyddyn nesaf, a byddwn yn ymwybodol y byddwn yn ymwybodol o'n gynlluniau CAPEX ar gyfer gweithredu cymdeithasol o £4 biliwn.
Speaker Change: Yeah, we are.
Daniel Newman: Mae'r amser gweithredu o'r cymdeithas i gynhyrchu cyfrifiadau yn y busnes gweithreduol yn siŵr iawn.
Speaker Change: We're putting in place senior debt.
Daniel Newman: Mae'n mynd i'r fflwm o'r sliad 24.
Speaker Change: At the project level.
Speaker Change: Usually in local currencies.
Speaker Change: We are currently undertaking.
Speaker Change: A large.
Speaker Change: Syndicated.
Daniel Newman: Diolch yn fawr iawn am wylio'r gwestiwn nesaf ar gyfer y Llywodraeth.
Speaker Change: Uh huh.
Daniel Newman: Mae GDSH wedi cael mwy na £1.5 biliwn o RMB o GDSI ar gyfer gafael o ffyrdd ar gyfer ariannwyr.
Daniel Newman: Mae hyn yn cael ei gynnwys mewn cyflwyno ar gyfer sefydliad GDSH, a chyfrifoldeb ar gyfer GDSi, including this repayment.
Speaker Change: Our emulation business.
Daniel Newman: Cash Flow Before Financing for GDSH, byddwn yn ymwneud â'n sylwadau penodol ym mhryd y blynyddoedd.
Daniel Newman: GDSi'n cyflwyno ar gyfer 2Q24 yn cynnwys $448 miliwn neu RMB 3.2 miliwn o gyflwynoedd o series A.
Speaker Change: That covers the range of different financing initiatives and et cetera.
Daniel Newman: Mae'r $224 miliwn arall o'r Series A wedi'u cyflwyno gan GDSi ym mis Cymru.
Daniel Newman: Fel y dywedodd ar ddiwedd 25, ar ddiwedd 2Q24, Mae'r gwasanaeth gwasanaethu GDSH wedi cynyddu i 8.4 mlynedd RMB, ac mae'r arddangosfa nesaf i'r diwrnod diwethaf o adnodd Ewid Dda wedi'i lleihau i 7.2 o weithiau, in order to accelerate our financial transformation.
Daniel Newman: Rydyn ni'n gweithio ar nifer o sefydliadau ariannol.
Speaker Change: Yeah.
Daniel Newman: Thank you for the questions.
Daniel Newman: Thank you, William.
Speaker Change: Thank you for the questions next question will come from the line of Daily Li of Bank of America Securities. Please go ahead.
Operator: Next questions will come from the line of daily Lee of Bank of America Securities. Please go ahead. Hi, Madison, thanks for taking the question.
Daily Li: Hi management, Thanks for taking my question.
Daily Lee: I have one question about the international business in terms of the area and service is good momentum to keep up like 50% of the code on code. And how do we see the trend in Q3 and Q4 for the area and service for the international business in absolute of value or like a code on code of goods. Thank you.
Daniel Newman: Following the completion of the first external equity capital raising for our international, business, we have started formal disclosure of segment financials. As shown on slide 17, Digital Land Holdings Limited and its subsidiaries comprises all, of our business and assets outside of mainland China except for some minor third-party data centers in Hong Kong. We refer to this segment as GDSI or international.
Daniel Newman: GDS Holdings Limited and all of its subsidiaries excluding GDSI comprises our ultimate holding, company and all of our business and assets in mainland China. We refer to this segment as GDSH or China. As shown with the China segment on slide 18, in 2Q24, GDSH revenue increased by 8.9% and, adjusted EBITDA increased by 4.3%, year-on-year.
Daily Li: I have one question about the international business.
William Huang: After that, we will start to see more new business opportunities. We are well positioned to support AI demand as we are holding enough land and power quotas. In the meantime, we will stick with our strategy of being very selective about what new business we take on.
Daniel Newman: In order to show the underlying growth rate, we excluded previously disclosed one-time items from 2Q23.
Daniel Newman: GDSH revenue growth was mainly driven by an increase in total area utilized of 10.2% year-over-year.
Daily Li: The battery or your surveys.
Speaker Change: Good momentum with <unk>.
Speaker Change: Thank.
Daniel Newman: As shown on slide 21, MSR per square meter comparing 2Q24 with 2Q23 was flat.
Speaker Change: 50% of the corner to corner.
Daniel Newman: However, EBITDA margin for 2Q24 versus 2Q23 was down by 2.1 percentage points. The main reason for this is the increase in power tariffs which occurred during the second half of, last year.
Daniel Newman: Turning to the international segment on slide 19, in 2Q24, GDSI revenue increased by 24% and adjusted EBITDA by 80% quarter-on-quarter.
Speaker Change: <unk>.
Daniel Newman: As shown on slide 21, during 2Q24, there was a 28 megawatt increase in IT power utilized.
Speaker Change: How do we see the trend in Q3, and Q4, who would be area surveys for the international briefly in absolute value Award.
Daniel Newman: The MSR per kilowatt per month was $135 including power income.
Speaker Change: Quarter on quarter group. Thank you.
William Huang: In our international business, we are already seeing very strong demand. We had a phenomenal second quarter with a 206 megawatt of new orders spread across our two campuses in Johor.
Speaker Change: Okay.
Yeah.
Speaker Change: Yeah.
Speaker Change: <unk>.
Gabe: Hey, Gabe.
Gabe: Some guidance in the.
Daniel Newman: The Units presentation and the prepared remarks about the timeframe for delivery of a very substantial part of the overall backlog. I mean, you can't really have about 280 megawatts of capacity, which is committed but not yet delivers and utilized. And, you know, we've said that that will be most of that; in fact, said 260 megawatts out of 280 megawatts will be delivered and utilized and read new generating within 24 months, which is a very rapid ramp up in the rise that our revenue generating capacity will increase by 3.5 times over the next 24 months. We did not give a quarter-by-quarter breakdown, but as an indication, over the next two quarters, the second half of this year, the increase in capacity and service and the delivery and utilization.
Gabe: This presentation and the prepared remarks about the timeframe for.
Gabe: The delivery of.
Gabe: A very substantial part of the.
William Huang: More recently, we signed a master sales agreement with the Global Technology Company for capacity as our new campus in Baton. This is a major breakthrough which we will lead to further larger orders. Singapore, Jihou, Batani is faster emerging as one of the very largest data center markets in the world. And we have a great market position where is this demand coming from? Part of it is reading no expansion and the part of it is feel over from the US which is mostly EI related.
Daniel Newman: Our key strategic goal is to set up a.., yng Nghymru, sydd ar gael ar ddata centr.
Daniel Newman: Mae cymdeithas dda i'r cymdeithas, for New Infrastructure Research.
Gabe: Overall backlog I mean, we currently have about 280 megawatts of.
Daniel Newman: Rydyn ni wedi penderfynu prosiect gysylltiedig i ddechrau ac yn gweithio drwy gynhyrchu rheoliadwy.
Gabe: I see which is committed but not yet delivered unutilized.
Daniel Newman: Bydd hwn yn ymgynghoriad cyntaf i'r datacentre yng Nghymru, ac rydym yn gweithio'n fawr i gwneud hyn yn digwydd.
Gabe: And we said that will be most of that but 200 260 megawatts 280 megawatts.
Gabe: We will be.
Gabe: <unk> delivered and utilized on revenue generating.
Gabe: Within 24 months.
Gabe:
Gabe: Which is a very rapid.
Gabe: A ramp up as it implies it out.
Gabe: Our revenue generating capacity will increase by three five times over the next.
Gabe: 24 months.
Daniel Newman: As William mentioned, the ramp-up over the next 24 months will be extraordinary.
Daniel Newman: The rate of progress quarter-by-quarter depends on the timing of capacity completions and contractual revenue commitments.
Speaker Change: We did not give a quarter by quarter.
William Huang: A critical success fact is that we were first to move into Jihou and how to create the market. We anticipated where demand will flow and secure this resource which give us time to market advantage. We have shown that we can execute delivery data centers in record time with the state of the art design and the technology solutions. We have also shown that we can operate working with the local institutions to source and the train talent.
Speaker Change: Breakdown.
Daniel Newman: Diolch yn fawr am wylio'r gweinidog.
Speaker Change: But.
Speaker Change: As an indication over the next two quarters the second half of this year.
Daniel Newman: Ar ddiwedd 2Q24, roedd GDFI yn cael cyllid o RMB 3.1 billion, Pro forma for the second tranche of Series A process.
Daniel Newman: Ar gael ar lefel cymdeithasol o gyfrifoldeb cymdeithasol, and the Strong Sales Pipeline.
Speaker Change: The increase in capacity in service.
Speaker Change: And in the delivery.
Speaker Change: Utilization will increase by a relatively small amount.
Daniel Newman: We'll increase by a relatively small amount, but over the course of next year, 2025, the increase will be very substantial.
Speaker Change: But over the course of Nextgen.
Speaker Change: Nextgen.
Speaker Change: 2025.
Kris: Kris will be very substantial.
Edison Lee: Thank you for the questions. Our next question comes from Edison Lee.
Kris: Thank you for the questions.
Kris: Our next question comes from Edison Lee of Jefferies. Please go ahead.
William Huang: I'll Jeffrey, please go ahead. Thank you for the question. Congratulations again. I have two questions. Number one is that for your power capacity or power secured in Southeast Asia, I think that I might increase it from 711 megawatts from your first quarter presentation to 797. So where that incremental is coming from, which location is coming from? And number two is you said that you want to take international technology customer and bathroom. And can you discuss your customers in Malaysia? Is this still a single company right now, and what do you expect that to change, or situation to change, or happen over the next couple of quarters?
William Huang: From the perspective of our customers these are really meaningful differentiators. As of today we have 388 megawatts of total customer commitments out of which 101 megawatts is already utilized and 287 megawatts is backlog. The delivery schedule for most of the backlog is very short and the customers undertake to move in quickly. As a result based on the terms of existing contracts we expect to have over 350 megawatts of utilized capacity within 24 months.
Edison Lee: Thank you for taking my question congratulations again.
Edison Lee: I have two questions number one is that.
Edison Lee: For your power capacity or power secured in.
Speaker Change: Southeast Asia I think.
Stefan: That amount increases from Stefan I'm, assuming you're not going back a walk from your first quarter presentation to 97.
Speaker Change: So may I know, where that incremental is coming from which location thats coming from.
Speaker Change: And number two is you said that you won a big international technology customer at that time.
Speaker Change: And can you discuss your customers in Malaysia, It's just still a single company right now and what do you expect that to change or or or situation to change or happen over the next couple of quarters.
Daniel Newman: The increase in the next couple of quarters is quite small, but thereafter it will take off.
Daniel Newman: Turning to CapEx on slide 23, in 1H24, our China CapEx totaled 1.8 billion RMB.
Daniel Newman: We expect lower CapEx in the second half of the year, including the proceeds of the BOT, data center transfer and still maintain our 2.5 billion RMB guidance for the full year.
Daniel Newman: In 1H24, our international CapEx was also around 1.8 billion RMB.
Daniel Newman: In the second half of the year, we expect CapEx to increase significantly and it is likely that we will exceed our CapEx guidance for international of 4 billion RMB. Fortunately, the lead time from incurring CapEx to generating revenue in the international business is very short.
Daniel Newman: Turning to cash flow on slide 24, following the closing of the Series A new issue for international, GDSH received over 1.5 billion RMB from GDSI on repayment of a shareholder loan. This is included in investment cash flow for the GDSH segment and financing cash flow for GDSI.
Speaker Change: Yes.
William Huang: Yes, I guess so.
Speaker Change: Mr.
Laura Chen: Please also note that GDS earnings press release at this conference call includes discussions of an auditive gap financial information as well as an auditive non-gap financial measures. GDS press release contains a reconciliation of the unordered non-gap measures to the unordered most drastically comparable gap measures.
Daniel Newman: I will now pass on to Pierre for the financial and the operating review. Thank you.
Speaker Change: Yeah.
William Huang: Yeah. As I've done here, the first question about the increase in security resource, the developerable capacity, that is in both of our sites in Johor, where we completed land purchases for additional plots, contiguous with our existing sites. And where there is power in the structure in place, and we were able to up size the amount of power that we were able to obtain through that, through that infrastructure.
Yeah.
Mr. Yeah: Got it.
Laura Chen: I will now turn over the call to GDS founder Chairman and CEO William.
Mr. Yeah: No it doesn't.
Mr. Yeah: Alright.
William Huang: Please go ahead, William.
Daniel Newman: On the completion of the first external equity capital raising for our international business we have started formal disclosure of segment financials. As shown on slide 17 digital land holding limited and its subsidiaries comprises all of our business and assets outside of mainland China except for some minor third party data centers in Hong Kong. We refer to this segment as GDSI or international. GDS holdings limited and all of its subsidiaries excluding GDSI comprises our ultimate holding company and all of our business and assets in mainland China. We refer to this segment as GDSH or China.
Mr. Yeah: Got it.
Mr. Yeah: First question about increasing.
Daniel Newman: Rydyn ni'n gweithio ar gyfer cynyddu mwyaf o gydraddoldeb ar gyfer GDSi mewn gyrraedd Sirius B.
Mr. Yeah: Hello.
Daniel Newman: The process is already underway.
Speaker Change: Secured resource developable capacity.
Daniel Newman: There's strong interest from global investors, and we are confident that this round will set a higher benchmark for the value of our equity investment in international markets.
Speaker Change: That is in both of our sites and Joel.
William Huang: Thank you.
Speaker Change: Where we.
Speaker Change: Completed land purchases.
Speaker Change: Additional.
Speaker Change: Plots continues to give us without.
Speaker Change: Existing sites.
Speaker Change: And where there is power infrastructure in place and we were able to upsize the amount of power that we will be able to.
William Huang: Hello, everyone.
Speaker Change: Obtained through that through that infrastructure.
William Huang: This is William.
William Huang: And with the second question, I think I said, ask about the customer maintenance in Southeast Asia. I think, indeed. Currently, we already have five customers from both China and international, all like the industry technology leader. So I think we are very, very focused on trying to diversify the customers. This is always our target. So the current mix is, let's say, around 70% from China. It's not a single customer. It's three of them. And another is also an international customer. But based on our current focus, I think in the next 12 months, the international customer will increase the percentage as well.
Speaker Change: And then the second question is asking about the customer mix safer.
Speaker Change: Stay tuned.
Speaker Change: Yeah.
Speaker Change: Yeah.
Currently we already have there.
William Huang: Thank you for joining us on today's call.
Speaker Change: Let's see.
Speaker Change: Five custom.
Speaker Change: Customers from the most from China and.
William Huang: In QQ24, we achieved the brand new growth of 18% and adjusted the imbidak growth of 15%. This growth rate is quite remarkable in current market conditions. It reflects the progress which we have made in stabilizing our China business and the uplift from the highly successful exclusion of our international strategy.
Daniel Newman: Starting with the China segment on slide 18 in 2Q24. GDS H Revenue increased by 8.9%, an adjusted EBITDA increased by 4.3% year-on-year. In order to show the underlying growth rate, we excluded previously disclosed one-time items from 2Q23. GDS H Revenue growth was mainly driven by an increase in total area utilized at 10.2% year-over-year. As shown on slide 21, NSR per square meter comparing 2Q24 with 2Q23 was flat. However, EBITDA margin for 2Q24 versus 2Q23 was down by 2.1 percentage points. The main reason for this is the increase in power tariffs which occurred during the second half of last year.
Speaker Change: Our international right.
Speaker Change: All.
William Huang: For our China business, we have two key financial objectives.
Speaker Change: Industry.
Speaker Change: Technology leader.
Speaker Change: So I think we are we are very very focused on to try to diversify the customer. This is always a top rate. So the current the mixes that is let's say around it.
William Huang: Number one is to grow Ipidak at a steady rate.
Speaker Change: Uh huh.
Speaker Change: 70% from China is not a single customer, it's a three of them and.
Speaker Change: I know, there's also international customer.
Speaker Change: All right.
Speaker Change: Just on how occurrence.
Speaker Change: Uh huh.
Speaker Change: Our forecast I think in the next 12 months.
Speaker Change: International customer were increased in percentage as well ultimately I think it will be 50 50.
William Huang: Ultimately, I think it will be 50-50 in this region.
Speaker Change: In this region.
Speaker Change: Yeah.
William Huang: Can I follow up with one quick question? So you said that there are five customers, including Charlie International. And then you said that you won the big international customer in Indonesia. So can I assume that you have one international customer in Indonesia, or just one customer in Indonesia and that's international? And you have four customers in Malaysia and that's China and international. This is my understanding. Yes. Indonesia is International. And four in your whole is Chinese and international. Thank you. You're right. Okay. Thank you.
Speaker Change: Can I follow up with one quick question. So you said that there are five customers, including Chinese and international.
Speaker Change: And then you said that you're one of the big International customer in Indonesia. So can I assume that you have one international customer in Indonesia, or just one customer it Indonesia, especially international and are you.
Daniel Newman: Turning to the international segment on slide 19, in 2Q24, GDS H Revenue increased by 24% and adjusted EBITDA by 80% quarter-on-quarter. As shown on slide 21, during 2Q24, there was a 28 megawatt increase in IT power utilized. The NSR per kilowatt per month was $135 including power income. As William mentioned, the ramp up over the next 24 months will be extraordinary. The rate of progress quarter by quarter depends on the timing of crafty completions and contractual revenue commitments. The increase in the next couple of quarters is quite small but thereafter it will take off.
Speaker Change: Small customers in Malaysia, and China and international.
Speaker Change: It's my understanding yes.
Speaker Change: Yes, yes, yes into these days.
Speaker Change: International Yeah and for in India.
Joel is a.
Speaker Change: Chinese and international.
Speaker Change: Right.
Speaker Change: Okay. Thank you.
Speaker Change: Yeah.
Luis Chang: Thank you for the questions. Next question comes from Delay. Luis Chang from City. Please go ahead. Thank you, management. Thank you for the question.
Speaker Change: Thank you for the question next question comes from the line of Louis Cheng from Citi. Please go ahead.
Thank you management, but taking my questions and congratulation on a strong start with Mike salad Nashville Growl, the signing and then the demand recovery I actually got two quick questions.
William Huang: Congratulations on the strong side with like Salad in the national grow all the signings and then the domestic recovery. I actually got up to quick question. The first one is for the domestic one. I think that like the net movie for this quarter is very encouraging and the MSL is training up like and how share we think about the pays of the movie and MSL recovery I had and more importantly, the sustainability of the demand.
Louis Cheng: First one is put a domestic one.
Speaker Change #100: I think that like the movie, but this quarter is very encouraging and the Amazon it's trending up like how shall we think about the pace of the movie and an MSR recovery and more importantly, the sustainability of the team now and then second question is going to eat national.
Daniel Newman: Turning to CAPEX on slide 23. In 1H24, our China CAPEX totaled 1.8 billion RMB. We expect lower CAPEX in the second half of the year including the proceeds of the BOT data center transfer and still maintain our 2.5 billion RMB guidance for the full year. In 1H24, our international CAPEX was also around 1.8 billion RMB. In the second half of the year, we expect CAPEX to increase significantly and it is likely that we will exceed our CAPEX guidance for international of 4 billion RMB. Fortunately, the lead time from incurring CAPEX to generating revenue in the international business is very short.
William Huang: And then second question is for the national. I think some regional or global peers also have their planning. Is your hall? And for seeing like an increasing DC supply, what is your strategy in FCA and what are the like your foundation already regional or the global peers. And then also one more thing on like the supporting infrastructure is like electricity grid. Like we don't sound stable in the near-term supply growth. Thank you.
Speaker Change #101: I think some regional or global peers also have their planning in your home and we're seeing like in threes and BT supply what is your strategy in FCA and one area that like your vantage over any regional or global peers, and then also one more thing like the supporting infrastructure like electricity, great like we have done.
Speaker Change #101: Linda.
Speaker Change #102: Near term supply growth.
Linda: Thank you.
Linda: Yes.
William Huang: Luis, I'll begin with your questions about China. So the moving, yes, is a very clear step up in one Q23 compared with the level of moving over the past 12th course. and that was continued; in fact, it was even higher in the second quarter. This is partly a result of the contracts we signed in the last 12 or 18 months, which had faster moving schedules than those that we signed previously. And also the beginning of the pickup in the moving by customers whose commitments have been in the backlog for longer. So based on the contractual terms, we're also what we currently know about our customers' intentions.
Speaker Change #104: The results I'll begin with your questions.
Linda: China.
Linda: So.
Linda: Moving.
Daniel Newman: Diolch yn fawr iawn am wylio'r gweinidog.
Daniel Newman: We are maintaining our formal guidance.
Linda: Yes.
Daniel Newman: Fy24, Consolidated Revenue, Adjusted EBITDA and Capital.
Linda: Very clear step up.
Daniel Newman: Fodd bynnag, efallai y byddwn yn cynyddu gwybodaeth CAFET ar y cyfnod o ganlyniadau 3.224.
Daniel Newman: Pan fyddwn ni'n cael gwirionedd a'r amser a'r niferoedd o CAPEX ar gyfer cymdeithasol.
Linda: <unk> 23.
Operator: We would now like to open the call to questions.
Linda: Compared with the level of move in over the past.
Linda: 12 quarters.
Daniel Newman: Yn gynnwys y penderfyniad hwn, bydd y cyflwyno ar gyfer GDSH yn ymwneud â'n sylwadau ffynansyddol yn ystod y blynyddoedd.
Daniel Newman: Yn ystod y blynyddoedd hwnnw, roedd y cyflwynod GDSI ar gyfer 2Q24 yn cynnwys $448 miliwn, neu £3.2 miliwn, o gyflwynoedd o'r Serys A. Roedd y $224 miliwn ar gael o'r Serys A wedi'u cael gan GDSI yn ystod.
And that was continued in fact, it was even higher in the second quarter.
Daniel Newman: Turning to CAPEX on slide 24. Following the closing of the Series A new issue for international, GDSH received over 1.5 billion RMB from GDSI on repayment of a shareholder loan. This is included in investment cash flow for the GDSH segment and financing cash flow for GDSI, including this repayment cash flow before financing for GDSH will be clearly positive this year in line with our financial objectives. GDSI cash flow for 2Q24 included $448 million, or $3.2 billion RMB, the proceeds from Series A.
Daniel Newman: Fel y dywedodd ar y swyddi 25, ar ddiwedd 2Q24, mae cyllid y GDSH wedi cynyddu i £8.4 miliwn, ac mae'r gyflwynod o'r cyflwynoedd i'r diwrnod diwydiannol diwydiannol diweddaraf i 7.2 o weithiau.
Daniel Newman: Bydd hwn yn trafodaeth cyntaf i sefydliadau datasefyddiadau yng Nghymru, ac rydyn ni'n gweithio'n gryf i gwneud hynny ddigwydd.
Speaker Change #105: Pardon me.
Speaker Change #105: A result of the contracts, we signed with us.
Speaker Change #105: 12 to 18 months.
William Huang: And the number two is to generate a positive cash flow before financing.
Speaker Change #105: Fast moving schedules then those will be signed.
Speaker Change #105: Previously.
Speaker Change #105: And also.
Speaker Change #105: Meaning.
The pickup in it.
Speaker Change #105: Move in by customers, whose commitments have been in the backlog.
Speaker Change #105: A logo.
Speaker Change #106: Based on the contractual terms, but also yes.
Speaker Change #106: What we currently know about.
Speaker Change #106: Customers.
William Huang: We expect the current level of moving to continue through next year as far as we have visibility. I think it's very encouraging.
Speaker Change #106: Intentions, we expect the current level doesn't move into.
Daniel Newman: The remaining $224 million from Series A was received by GDSI in July. As shown on slide 25, at the end of 2Q24, the cash balance of GDSH increased to $8.4 billion RMB, and the net debt to last quarter-analyzed adjusted EBITDA multiple decreased to 7.2 times.
Speaker Change #106: <unk> continues through through next year as far as policy we have.
Speaker Change #106: Visibility.
Alright.
Speaker Change #106: Encouraging.
William Huang: For the MSR, we look at MSR on a quarterly basis and compare the rate of change with the same quarter of the prior year. And so, over the past few quarters, on average, the MSR has decreased by a little over 2%. And as we go into next year, there will be further decrease for probably less than the decrease during 24 as compared with 23. So it's also encouraging to see that the MSR is blossoming up.
Speaker Change #106: For the <unk>.
Speaker Change #106: And then I saw.
Speaker Change #106: We look at and it's all on a quarterly basis and compare.
Operator: Operator, please.
Speaker Change #106: Are the rates of change with the same quarter of the prior year.
William Huang: We believe that this combination can create significant equity value and help drive our shared ties to the covering.
Daniel Newman: In order to accelerate our financial transformation, we are working on a number of asset monetization initiatives. Our key strategic goal is to set up a REIT listed in China holding data center assets. There is strong policy support for new infrastructure REITs, and we have selected a stabilized project to move forward and are working through the regulatory approval process. This will be a first-of-a-kind transaction for data centers in China, and we are strongly committed to making it happen.
Speaker Change #106: So over the past few quarters on average.
Speaker Change #106: I saw it has decreased by a little over 2%.
Speaker Change #106: And.
William Huang: In order to achieve these objectives, we are delivering the background.
Speaker Change #106: As we go into next year there'll be further decrease for probably less than the decrease.
Speaker Change #107: During the 24.
William Huang: At the same time, we take a highly selective approach to a new business, targeting orders which fits our inventory and have fixed the moving schedules. This will allow us to grow while minimizing the need for incremental capex.
Speaker Change #107: As compared with 20.
Operator: Thank you.
Speaker Change #107: 'twenty three.
Speaker Change #107: It's also encouraging to see that the MSR is bottoming out.
Operator: We will now begin the question and answer session.
Speaker Change #107: Okay.
Speaker Change #107: Sure.
William Huang: We have been following this strategy for a while and it's starting to produce noticeful results.
Speaker Change #107: Okay.
William Huang: The second question is about our strategy in this region.
Speaker Change #107: The second question is.
Speaker Change #107: About our strategy.
Speaker Change #107: This region right now.
William Huang: Over the past couple of quarters, the gross moving rate has clearly stepped up.
Daniel Newman: Turning to international on slide 27, at the end of 2Q24, GDSI had a cash balance of $3.1 billion RMB pro-former for the second flash of Series A proceeds. Given the existing level of customer commitments and the strong sales pipeline, the plans raised further equity for GDSI in a Series B round. The process is already underway. There is strong interest from global investors, and we are confident that this round will set a higher benchmark for the value of our equity investment in international.
Joel: Joel I think here.
William Huang: Number one, I think we are everybody know we are the first to move in this region. And we still in the next three years, I think that we still enjoy the first approval advantage because the time to market and the demand profile still will continue maintain a very strong level. So even the last three years, I think the market sites will increase, still continue to increase. So I don't think it's in short, in the next five years, it will be another issue for all the prior in this region. So I think this is based on our understanding of the market.
Joel: Number one I think.
Joel: Everybody know we had a first mover in this.
Richie: Richie and it did.
Richie: We still in the next three years I think we still enjoy the first mover advantage because the attempt to marquee and the demand profile still we'll continue maintaining that very strong level. So even after three years I think is still the market.
William Huang: In 2024, it was over 20,000 sqm, the highest level for the past three years.
William Huang: The main reason for this improvement is the contract which we signed was fast and with faster moving schedule.
William Huang: These are mainly large Internet customers whose business continues to grow strongly.
Richie: Sites will increase SKU continues to increase so I don't think in short term in the next five years. It will have another issue for all the payer in this region.
William Huang: However, we are also beginning to see improvements from orders which have been in the back loss for longer.
Daniel Newman: Finishing on slide 29, we are maintaining our formal guidance for FY24 Consolidated Revenue, Adjusted EBITDA and CAPEX. However, it is likely that we will raise our CAPEX guidance at the time of 3Q24 results when we have a firm review on the timing and amount of CAPEX for international.
Richie: So I think this is a good.
Richie: Based on.
Richie: Our.
Richie: Understanding of the market.
William Huang: So, of course, if we talk about the after five years, what will happen? I think our strategy is number one. I think we will look at not only this region market. We will also start; we will already start to develop that region, other market in this region.
Speaker Change #110: So of course, you could say if we talk about the occupied yes, what will happen I think our strategy is that number.
William Huang: We expect this trend to continue as our customers implement their AI plans.
Richie: Number one I think we will we are.
And not only this region market. We are also start well really start to get back to that region.
Operator: We now like to open the call to questions. Operator, please. Thank you.
Richie: Other market.
Operator: We will now begin the question and answer section. To ask a question on the phone, please press star 11 and refer her name to be announced. For the benefit of all participants on today's call, please meet yourself to one question. If you have more questions, please re-enter the queue. One more moment for the first question.
And this really everybody know gds's market places so we are not far off so.
William Huang: Everybody knows that GDS is a market creator, so we are not a forum. So I think we will give you another surprise in the next three years.
Richie: So I think we will give you another surprise in the next three years.
Richie: Yeah.
Richie: Sure.
Daniel Newman: Diolch, Yang Liu.
Young Liu: Thank you for the questions. One moment for the next questions. Full up questions from Young Liu of Born and Stanley, please go ahead. Thank you for the opportunity to ask another question.
Operator: To ask a question on the phone, please press star 11 and wait for a name to be announced.
Speaker Change #111: Thank you for the questions one moment for the next question's a.
Daniel Newman: Daniel here.
Operator: For the benefit of all participants on today's call, please limit yourself to one question. If you have more questions, please re-enter the queue.
Speaker Change #112: Follow up question from young Li Morgan Stanley. Please go ahead.
Daniel Newman: Rydw i'n mynd ymlaen at y cwestiwn hwn.
Daniel Newman: I gyrraedd y strategaeth hwn, rydyn ni'n pwysleisio dwy ddata cefnogaethau ar un unig ymdrech, fel arddangosfeydd ar gyfer y reit.
Operator: First question.
Operator: One moment for the first question.
Yang Liu: Come from the line of Young Liu from Morgan Stanley. Please go ahead. Thanks for the opportunity to ask questions. I would like to congratulate you first on the very strong set of results. I would like to ask about the China part, the READS plan. Could management elaborate more in terms of the timing of this infrastructure READS? And also what could be the potential valuation when you inject the asset to the READS?
Speaker Change #113: Thanks for the opportunity to ask another question.
Yang Liu: First question comes from the line of Yang Liu from Morgan Stanley.
Yang Liu: Please go ahead.
William Huang: One more thing from my side is regarding the REITs playing China. Could you please talk about whether the REITs will be a public trade rate, or it's a private rate, or actually you are targeting both, and another thing is what could be the estimated debt reduction if you can deliver one REITs project to the inject one asset to the REITs? The REITs listed will be listed on one of the stock exchanges in China, and it will be offered publicly. The typical REIT offering side I mentioned earlier is about 2 billion RMB REITs. As a guideline, I would say that transaction that size, and we would expect to de-consultate around 1 billion RMB of debt, and if we sell 80% of the equity, then we will receive cash proceeds for the disposal of 80% at the valuation of the offering.
Speaker Change #113: Oh, one more thing from my side is.
Daniel Newman: Mae'r reit arddangosfeydd yng Nghymru'n hanfodol yn ymwneud â 2,000,000,000 RMB ar gyfer y trafnidiaeth, ac mae hynny'n debyg i fod yn sefydliad yr ymdrech y mae'r siaradwyr yn ymdrech ag, ac rydyn ni'n pwysleisio sefydliad ar gyfer hwnnw.
Speaker Change #114: Regarding the rights are playing in China.
Daniel Newman: Ar gyfer y reit arddangosfeydd, mae'r sefydliad yn rhaid ei gysylltu, felly mae'r sefydliad hefyd yn cyflwyno ar y sefydliad hwnnw.
Speaker Change #115: Could you. Please talk about so whether the rates will be a public traded rates or is the private Reits or actually you are targeting both.
Yang Liu: And who could be the, what type of investor could be the buyer? And what is the current, whatever hurdle or key debate between the buyer and the company, and also between the regulator and the company? Yes, thank you. Thank you, Yang Liu, Stanley. I'll answer that question. In order to pursue this strategy, we've selected a single site with two data centers as the seed asset for the reach. Typical reap offerings in China, historically, have been around 2 billion R&B per transaction.
Speaker Change #116: And another thing is what could be the estimated debt reductions.
Speaker Change #117: If you can deliver one <unk> project.
Speaker Change #118: To the inkjet.
Speaker Change #118: You inject one access to the routes.
Speaker Change #119: Yes, yes.
Speaker Change #119: Yeah.
Speaker Change #119: How are the Regus is lifted will be listed on.
Speaker Change #119: One of the stock exchanges in China and.
Speaker Change #119: It will be offered them publicly.
Speaker Change #119:
Speaker Change #120: Uh huh.
Speaker Change #120: Typical it's typical REIT offering side as I mentioned earlier it was about.
William Huang: In order to support higher moving, we need to complete some projects which have been in progress for a while.
Yang Liu: That seems to be a size which the market is comfortable with, and we select an asset to fit with that. Under the reach regulations, the asset must be stabilized. We must own the real estate, so the asset also qualifies on that basis. There's a series of regulatory approvals that we need to obtain. We've already been working on this for over one year, and we're getting to the level where the regulatory approvals will be sorted, central government level.
Speaker Change #120: 2 billion RMB.
Yeah.
Speaker Change #120: Yes.
Speaker Change #120: Guideline I would say that.
Speaker Change #120: A transaction of that size and we would.
William Huang: In the first half of 2024, we brought 45 sqm into service. As at 30 June, this was already over 20% utilized.
Speaker Change #120: Expect to deconsolidation around 1 billion RMB debt.
Speaker Change #120: And.
Speaker Change #120: If we sell 80% of the equity that we will receive.
William Huang: In the second half of 2024, we expect to complete another 32,000 sqm. The good news is that this does not require a lot of new capex as we only incur the cost to complete.
Speaker Change #120: Equity cash proceeds from the disposal.
Speaker Change #120: So the 80%.
Speaker Change #120: <unk>.
Speaker Change #120: B.
Speaker Change #120: Valuation of the offering.
William Huang: So the combined effect should be that it helps to increase our liquidity, decrease net debt, and also increase it on the REITs.
Speaker Change #120: The combined effects should be.
Speaker Change #120: But it helps to increase our liquidity.
Speaker Change #120: Decrease net debt.
Speaker Change #120: And also accretive on an EV to EBITDA multiple.
William Huang: That's a single transaction, of course. Once the REITs are established, the possibility is there for us to drop further assets into it, and that's what we would hope to do over the longer term. But for now, our focus is just on achieving the first step, which is to set up this vehicle.
Speaker Change #121: That's the single transaction of course.
Speaker Change #122: Once the region's established possibilities there.
Other assets interest.
Yang Liu: If that is successful, we will receive approval to be able to proceed with the offering, which is then valid for one year. We hope to reach that milestone next year. It's not normal to do testing the waters or pre-marketly exercise in China, but we do have an active dialogue with major financial institutions in China, because we've also been looking at pre-packaging some assets, which are not yet stabilized, as a way of creating a pipeline for the reach.
Speaker Change #122: That's what we would.
Speaker Change #122: I hope to do over the longer term, but for now our focus is just on the.
Speaker Change #122: She is the first step which is to set up this vehicle.
William Huang: You asked about privately play history. I mentioned earlier that we're working on pre-packaging some assets. That will be privately placed. It takes the form of asset back. Security, technically it is; this is all a stock exchange, but it's easier to think of it as a privately placed security. It's a stepping stone in terms of packaging assets so that it is ready to be injected into a REIT when the assets are stabilized.
Speaker Change #122: You asked about privately placed I mentioned earlier.
Speaker Change #122: We're working on packaging some assets.
Speaker Change #122: That will be privately placed.
Speaker Change #122: It takes the Florida.
Speaker Change #122: Asset back Securities technically it is this is all stock exchange, but it's easier to think of it.
Speaker Change #122: Private replace security, it's a stepping stone.
Speaker Change #122: In terms of.
Speaker Change #122: Packaging assets side as it is.
Speaker Change #122: To be injected into a REIT.
Yang Liu: We've received very positive feedback. There's a significant appetite amongst financial institutions in China to get exposure to new infrastructure, including data centers, data centers, which are green, which have very high quality internet company or cloud customers. We think that a substantial percentage of the offering to the public will be taken up by strategic or anchor type investors under the regulations we will be required to retain a 20%. There is quite a significant public listed reach sector in China.
Speaker Change #122: When the assets are stabilized.
William Huang: Thank you.
Speaker Change #122: Okay.
Speaker Change #123: Thank you.
William Huang: And one more question regarding the international business; it's very encouraging to see the big new orders. Could you please update us on what is IRR trend for the big new orders? Is it stable, or rising a little bit, or declining a little bit? What's the trend compared with the previous orders?
Speaker Change #124: And one more question regarding the international business.
Speaker Change #123: Okay.
Speaker Change #125: It's very encouraging to see the big new orders.
Speaker Change #126: Could you please update us what is Oh I our trend for the peak.
Speaker Change #127: Is it stable or rising a little bit or declining a little bit or what's the trend compared with the previous order.
Daniel Newman: Mae nifer o adnoddau rheolaethol y mae'n rhaid i ni eu cymryd.
Daniel Newman: Rydyn ni wedi bod yn gweithio ar hyn dros un blynedd, ac rydyn ni'n mynd i'r lefel lle bydd adnoddau rheolaethol yn cael eu cymryd ar lefel Llywodraeth Cyffredinol.
Daniel Newman: Os yw hynny'n cyflwyno, byddwn ni'n cael cyflwyno i ysgrifennu â'r adnodd, sy'n gyflwyno ar gyfer un mlynedd.
Daniel Newman: Rydyn ni'n gobeithio cael yr adnodd hwnnw ym mis Nesaf.
Daniel Newman: Nid yw'n ddiwylliannol i wneud ymweld â'r adnoddau, nid yw'n ddiwylliannol i wneud ymweld â'r adnoddau, ac nid yw'n ddiwylliannol i wneud ymweld â'r adnoddau, ac nid yw'n diwylliannol i wneud ymweld â'r adnoddau, ond mae gennym gyfathrebu gyda sefydliadau ffynedol yn China, gan gynnwys sefydliadau data, sefydliadau data sy'n grin, sydd ganddyn nhw ddarllen cyffredin iawn, sefydliadau data, sefydliadau data, ac mae cymhwysfa'r gwaith yma'n ymddiheuraol, fydd cymhwyso'r gwaith yma'n ymddiheuraol.
William Huang: I'd say it's very consistent, a set of maybe easier to talk about a development yield rather than IRR, and the development yield is in the low teams, which is quite acceptable to us in terms of a return on our invested capital. And these are very high quality customer contracts; they are, I would say, US standard, 10 to 15 years, some of them are priced in US dollars, some of them have escalators, so it's a very high quality business.
Daniel Newman: Mae cymhwysfa'n gyffredinol, mae cymhwyso'r gwaith yma'n ymddiheuraol.
Speaker Change #128: I'd say, it's very consistent.
Speaker Change #129: Instead of maybe easier to talk about a.
Like a development yield rather rather an IRR.
Speaker Change #129: The development yield is in is in the low teens.
Speaker Change #130: Which is oh.
Yang Liu: Those reach, which are real estate based, trend to trade on dividend yields, which fall within a fairly well defined range. If we take that range and look at it very conservatively, based on the amount of income which we think we will be able to distribute, it implies an EBITDA multiple, which... I think it will be clearly appreciative, compared with where we're trading if you look at our current public market value, one of some of the past bases, to strip out international at the last series a price bench mark, our China business is being valued at somewhere between 9 to 10 times, current EBITDA. The China sector is trading at implied EBITDA, which is a quantum higher than that, so hopefully we'll be able to capture that. Thank you for the questions.
Speaker Change #130: Quite acceptable to us in terms of say.
Speaker Change #131: Return on IL or al.
Speaker Change #131: Capital.
Speaker Change #131: And these.
Speaker Change #131: He is a very high quality customer contracts. They all I would say U S standard.
Operator: One moment for the next question.
Speaker Change #131: 10 to 15 years.
Speaker Change #131: Some of them are priced in U S dollars.
Speaker Change #131: Some of them.
Speaker Change #131: Escalators and so it's very high quality business.
Daniel Newman: Mae cymhwysfa'n gyffredinol.
William Huang: Thank you for the questions.
Daniel Newman: Mae cymhwyso'r gwaith yma'n ymddiheuraol.
Speaker Change #132: Thank you for the questions.
Daniel Newman: Bydd cymhwysfa'n gyffredinol yn argyfwng, mewn geiriau'n erbynol.
Daniel Newman: Ond mae cymhwyso'r gwaith yma'n ymddiheuraol.
Daniel Newman: Mae cymhwysfa'n gyffredinol yn erbynol.
Daniel Newman: Mae'r hyn sydd yn llwyddiant, mae'r hyn sydd yn llwyddiant, mae'r amser o gyflenwad roeddwn i'n credu bod yn gallu ei rannu....
Speaker Change #132:
Jonathan Atkin: Next questions come from Delilah, Jonathan Atkin from ABC Capital Market. Please host your question. Thanks, so I just got you a quarter. What about China, and then what about international? So in China, I was just interested in any comments you would have about the contract, renewals, and insure an outlook for the remainder of this year. It looks like you've got a fairly sizable amount coming up for renewal in second half of this year, 12.1% of total area committed.
Yang Liu: Thanks for the opportunity to ask questions.
Speaker Change #132: Next question comes from the line of Jonathan Atkin from RBC capital markets. Please ask your question.
Yang Liu: I would like to congratulate you first on the very strong set of results.
Yang Liu: I would like to ask about the China part, the REITs plan.
So it's a two parter one about.
Yang Liu: Could management elaborate more in terms of the timing of this infrastructure REITs and also what could be the potential valuation when you inject the asset to the REITs, and what type of investor could be the buyer, and what is the current hurdle or key debate between the buyer and the company, and also between the regulator and the company.
Jonathan Atkin: China and then what about international so in China I was just interested in any comments you would average out to contract renewals and churn outlook for the remainder of this year. It looks like you've got a fairly sizable amount coming up for renewal in second half of this year.
Yang Liu: Thank you.
Speaker Change #134: 1% of total area committed and then internationally you would agree with William's comments about your horn I think you had somewhat of an a competency you have early mover advantage.
William Huang: And then internationally, I would agree with William's comments to Dr. Hor, and I think you have somewhat of a comprehensive, or really mover advantage. But something that I was interested in, because you were one of the winners of the CFA process, is there any visibility in terms of timeline as to when you might get that project underway, and when that might be ready for service, or is it too soon to have you on that? Thank you.
Jonathan Atkin: But.
Speaker Change #135: It's something that I was interested in it because you were one of the winners of the CMA process and is there any visibility in terms of timeline as to when you might get that project underway and when that might be ready for service or is it to students who are having to you on that.
Frank Lothan: Our next question comes from the line of Frank Lothan from Raymond James, please ask your question. Great, thank you.
William Huang: Can you characterize how much of the business in mainland China is AI driven and can you give us an idea of the current impact of the Chinese economy to the demand on that base of the business. Thanks.
Okay.
William Huang: The toilet's down on the first part of your question about China. You're right; you have a large amount of contract renewals in the second half of the year, but we look at the quantum of churn. We've measured it in terms of area utilized; the churn has a percentage of our total area utilized. And over the past six quarters, it's been running as an annualized rate of about five percent, which I believe is relatively low by international standards. In absolute terms, it's averaged about 5,000 square meters per quarter. And the second half of this year, it will continue at about that rate, but if we look into the next year, I think the three to five percent annual churn rate would be normal for us, and we don't currently actually have any visibility on any churn, which is exceptional.
Daniel Newman: Diolch, Yang Liu.
Speaker Change #136: That's all it is done on the first part of your question about.
Daniel Newman: I'll answer that question.
Speaker Change #137: In China, you're right.
Speaker Change #138: A large amounts of contra.
Speaker Change #139: Contract renewals in the second half of the year.
William Huang: Okay, Frank, this is William. The first question is I think the current demand, the new demand in China currently, I think the 70% was driven by the AI type required, including the training and also inference. So the remaining 30% is driven by the internet company and also the traditional cloud business.
Speaker Change #139: If we look at.
William Huang: The first indications improve the demand is customers observing capacity for which they already made commitments.
Speaker Change #139: The quantum of churn.
Speaker Change #139: And we measure it in terms of ore utilize the churn as a percentage about total area utilized.
Speaker Change #139: And.
Daniel Newman: Yn ystod y strategaeth hwn, rydyn ni wedi penderfynu...
Daniel Newman: Cymdeithasol gyda chwe ddata sefydliad, as the seed asset for the region, yng Nghymru yn ystod y 2,000,000,000 RMB, per transaction.
Speaker Change #139: Over the past six quarters.
Daniel Newman: Ac mae hynny'n debyg i fod mewn ffyrdd y mae'r ddinas yn ymdrech i, ac rydyn ni'n penderfynu asiatau i, to fit with that.
Speaker Change #139: Running at an annualized rate of about 5%.
William Huang: This is underway.
Speaker Change #140: I believe is relatively low.
International standards.
Speaker Change #140: Absolute terms, it's averaged about 5000 square meters per quarter.
William Huang: After that, we will start to see more new business opportunities.
William Huang: Yeah, this is the question. How is the economy impacting the world? I think the so far, I think for the training and the cloud business, I think this is not directly impacted from current China macro environment. It's totally opposite, and I think this is based on a lot of the, let's say, giant. They are continuing to invest in the cat packs to train their own model and also try to, in China, there's a lot of the, still a lot of, there's a lot of startup company.
William Huang: We are well positioned to support AI demand as we are holding enough land and power quotas.
Speaker Change #141: In the.
Speaker Change #141: Second half of this year it will continue at about that rate.
William Huang: In the meantime, we will stick with our strategy of being very selective about what new business we take on.
Speaker Change #141: But if we look into next year.
Speaker Change #141: I think that 3% to 5% of annual churn rate would.
Daniel Newman: Diolch yn fawr iawn am wylio'r adroddiadau.
Speaker Change #141: It would be normal for us.
Daniel Newman: Diolch yn fawr iawn i bawb am wylio'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau.
Speaker Change #142: Yeah. We don't currently perhaps you have any visibility on any churn which is exceptional.
Daniel Newman: Mae yna sefydliad o adnoddau ar gyfer y rheoliadau y mae angen i ni eu cael.
William Huang: Those numbers represent really quite a small percentage of the total amount of capacity, which is coming up for contract renewals, as you pointed out.
Those numbers represent.
Speaker Change #142: Really quite small.
Speaker Change #142: Percentage of the total amounts of capacity, which is coming up for.
Daniel Newman: Rydyn ni wedi bod yn gweithio ar hyn am dros un mlynedd.
Speaker Change #143: Contract renewals as you pointed out.
Daniel Newman: Diolch yn fawr iawn i'r aelodau a'r rhan fawr o'r ddisgwyddiadau.
William Huang: John, I think the Singapore project could be, you know, in Singapore. So, I think it's very difficult. What number one is getting the CFA? It's very difficult, right? The second, now that we've gotten, we win the CFA, but the second question is the issue is to get to the very, very good location of the land is more difficult, right? So, fortunately, we are in the process to acquire a land by now. I think we believe it's in the process and should be down in the next couple of months; a competitive process. And we aim to deliver, before the end of 2036, to launch the service in the market.
Daniel Newman: Bydd y cyhoeddiadau rheoliadol yn cael eu hysylltu ar lefel Llywodraeth Cyntaf.
Speaker Change #142: Yes.
John: John I think.
John: The simple project.
John: I think Paul So I think in a very difficult what number one is that getting the cfe, it's very difficult.
Daniel Newman: And if that is successful.
Daniel Newman: Byddwn yn cael cyfrifoldeb i gael gweithio gyda'r cyfrif, sy'n werthfawr ar gyfer un mlynedd.
William Huang: It was invested by the venture capital to do the more application type, the vertical type of the AI stuff. So this looks like it's created a very, it's created his own, let's say, environment, right? So this is the, what happened in China right now?
Daniel Newman: Rydyn ni'n gobeithio cyflwyno'r milestyn hwnnw ym mis Nesaf.
Daniel Newman: Diolch yn fawr iawn.
Daniel Newman: Cynhyrchwch y flwyddyn neu gweithdai'r cyhoeddiadau i'r cyhoeddiadau i'r cyhoeddiadau.
Daniel Newman: Yn ymdrechion, mae gennym gysylltiad agos gyda sefydliadau financiaeol mawr yng Nghymru, oherwydd rydyn ni hefyd wedi edrych ar, Pre-packaging some acid sydd eisiau cael eu sefydlu.
Daniel Newman: Yn ffyrdd o ddatganiadau ar gyfer y dyfodol, And, you know, we've received very positive.., film blynyddoedd, yng nghanolbarth o sefydliadau financiell yng Nghymru i gael cymorth i gynlluniau newydd, ynghylch datacentrau, datacentrau sy'n hawdd, sydd ganddyn nhw gwasanaethau cyffredinol iawn o weithdai, cyfrifiadur, cyfrifiadur, cyfrifiadur, cyfrifiadur, cyfrifiadur, cyfrifiadur.
Daniel Newman: We think that a substantial percentage of, Diolch yn fawr am wylio'r cwmni, diolch yn fawr am wylio'r cwmni, diolch yn fawr am wylio'r cwmni.
Speaker Change #145: I figured I'd get nowadays.
Daniel Newman: Diolch yn fawr am wylio'r fideo.
Daniel Newman: Ar gyfer y rheoliadau, byddwn yn cael cymryd 20%.
Speaker Change #145: We win.
Daniel Newman: Mae cymaint o ddangosfeydd yma yng Nghymru, yng Nghymru yw'r sector reitau cyhoeddus yng Nghymru, y reitau sy'n seiliedig ar real estate, Dividend yields, which fall within a fairly well-defined range.
Daniel Newman: If we take that range and look at it very... Yn ystod y cyfrifoldeb y byddwn ni'n gallu ei wneud, Distribute.
Speaker Change #145: Cfe, but the second question is that.
Daniel Newman: Mae'n cymryd cyfrifiad ebyg da, sy'n ymwneud ag ysgrifennu cyfrifiad ebyg da.
Daniel Newman: Thank you for watching!
Daniel Newman: Yn ymwneud ag y byddwn yn trafod, os edrychwch ar ein.., current, Mae'r gwerthau cymdeithasol ar gyfer rai o'r gwasanaethau diwethaf i ddod allan yn ymwneud ag ymdrechion cymdeithasol ar gyfer y penderfyniadau gwerthu'r cyfrifiadurau seriol diwethaf, mae'r busnes Cina'n cael ei gwerthu ym mhob ffordd rhwng 9 a 10 eiliadau.
Daniel Newman: GDS Holdings Ltd, Mae'r sektor China Reap yma'n gweithio ar gyfer DBDA, sef quantum, ac rydyn ni'n gobeithio y byddwn yn gallu capturio hynny.
Speaker Change #145: The issue is that together, they're very very good location of the land is more difficult.
Speaker Change #145: Fortunately, we are in the process to acquire.
Speaker Change #145: And then right now I think we believe it is in the process and should be down in the next couple of months.
Operator: Thank you for the questions. Next question, one moment please.
Speaker Change #145: Peter did that process and we aim to deliver yeah.
Sarah One: Next question comes from Sarah one from UBS, please go ahead. Thank you for the opportunity to ask a question and congratulations on the solid results. I have one question about international business. I've just mentioned there's quite some type of needed for international business.
Speaker Change #145: Before the end of the 2026 to two.
William Huang: In our international business, we are already seeing very strong demand.
Speaker Change #146: <unk> launched at <unk>.
Speaker Change #146: And back to the market.
William Huang: That's a pretty firm schedule.
Speaker Change #146: That's a pretty firm.
Speaker Change #146: Schedule.
Operator: Thank you for the questions.
Operator: Thank you for the questions.
Daniel Newman: Thank you for the questions.
Speaker Change #146: Thank you for the questions and then Joseph Tom that concludes the Q&A session I would now like to turn the call back over to the company for closing remarks.
Operator: One moment for the next questions.
Operator: One moment for the next question.
Operator: In the interest of time, that concludes the Q&A session. I'll now like to turn the call back over to the company for closing remarks.
Operator: Our next question comes from the line of Frank Louthan from Raymond James.
Frank Louthan: Our next question comes from the line of Frank Louthan from Raymond James, please ask your question.
William Huang: And I asked what's the future financing plan, especially in the near term, as well as in the meetings, for example, the potential spin-off or IPO. Thank you.
Frank Louthan: Please ask your question.
Frank Louthan: Great, thank you.
Frank Louthan: Great, thank you.
Frank Louthan: Can you characterize how much of the business in mainland China is AI driven?
Frank Louthan: And can you give us an idea of the current impact of the Chinese economy to the demand on that base of the business?
Frank Louthan: Thanks.
William Huang: Okay, Frank, this is William.
William Huang: Yeah, the first question is, I think...
Operator: Thank you once again for joining us today, and we'll see you next time. Bye.
Frank Louthan: Can you characterize how much of the business in mainland China is AI driven?
William Huang: The current demand, the new demand in China currently, I think 70% is driven by the AI type requirement, including the training and also inference.
Sarah Wang: Thank you for the opportunity to ask the question and congratulations on the solid results.
Speaker Change #147: Okay. Thank you once again for joining US we'll see you next time Bye Bye. This concludes today's conference call. You May now disconnect. Your line. Thank you.
Frank Louthan: And can you give us an idea of the current impact of the Chinese economy to the demand on that base of the business?
William Huang: So the remaining 30% is driven by the internet company and also the... Yeah, this is for the, I think so far, I think for the training and the cloud business, I think this is not directly impacted from the current China macro environment.
Sarah Wang: I have one question about international business.
Frank Louthan: Thanks.
William Huang: It's totally opposite, and I think this is based on a lot of the...
Sarah Wang: As Stan just mentioned, there's quite some capacity needed for international business.
William Huang: Okay, this is William.
William Huang: I'd say giants, they are continuing to invest today.
Sarah Wang: May I ask what's the future financing plan, especially in the near term as well as in the mid-term?
William Huang: The first question is, I think the current demand, the new demand in China currently, I think 70% is driven by AI type requirements, including the training and also inference.
William Huang: CapEx to train their own model and also try to, in China there's a lot of the, still a lot of, there's a lot of start-up company is, was invested by the venture capital to do the more application type, vertical type of the AI stuff.
Sarah Wang: for some of the potential spin-off or IPO.
William Huang: So the remaining 30% is driven by the internet company and also the traditional cloud business.
William Huang: So this looks like it's create a very, it's create his own, let's say, environment, right?
Operator: This concludes today's conference call. You may now disconnect your lines. Thank you.
Sarah Wang: Thank you.
Operator: This concludes today's conference call.
Operator: In the interest of time, that concludes the Q&A session.
William Huang: Yeah, this is the second question.
William Huang: This is what happened in China.
William Huang: Thank you.
Operator: I would now like to turn the call back over to the company for closing remarks.
William Huang: How is the economy impacting demand?
William Huang: Thank you for the questions.
William Huang: Yeah, all the all the financing requirement is based on our, focus for the next to all three yet.
Operator: You may now disconnect your lines.
Operator: Thank you once again for joining us today and we'll see you next time.
William Huang: I think so far, I think for training and cloud business, I think this is not directly impacted from current China macro environment.
Sarah Wang: Our next question comes from Sarah Wang from UBS, please go ahead.
William Huang: So our target is to double the current order number in, within the next three years.
William Huang: Before I answer this question, I think all the financing requirements are based on our focus for the next two or three years. So our target is to sub over the current order number in within the next three years. So this is our case.
Unnamed Participant: Bye.
William Huang: It's totally, opposite.
William Huang: So this is our fate.
Unnamed Participant: Bye.
William Huang: And I think this is based on the, a lot of the, let's say, giant, they are continuing to invest the capex to train their own model.
William Huang: So in terms of the financing plan, I think I would like to let Dan introduce Xperia a little bit more.
Operator: This concludes today's conference call.
William Huang: And also, try to, in China, there's a lot of the, still a lot of, there's a lot of startup company is, was invested by the venture capital to do the more application type, vertical type of the AI stuff.
William Huang: Yeah, I mentioned that, Rydyn ni wedi dechrau'r broses ar gyfer y rhan fawr o'r cynghrair.
William Huang: So this looks like they, it's create a very, it's create his own, let's say environment, right?
William Huang: Diolch yn fawr iawn i bawb am wynebu'r cyfrifiadau a'r cyfrifiadau gwleidyddol.
William Huang: So this is what's happening in China right now.
William Huang: Yn ein cyfrifiadau o'n gynllunio, mae'n dweud...
William Huang: Thank you for the questions.
William Huang: Bydd y safonau newydd yn ychwanegol i'r series A.
Operator: Next question.
William Huang: Yn ystod $600 miliwn i $800 miliwn, efallai y byddai...
Operator: One moment, please.
William Huang: We could increase the size.
Operator: Our next question comes from Sarah Wang from UBS.
William Huang: Diolch yn fawr iawn, diolch yn fawr iawn.
Sarah Wang: Please go ahead.
William Huang: Diolch yn fawr iawn am weithredu'r cyfrin y byddwn yn ei wneud cyn ddiwedd y mlynedd hon.
Speaker Change #147: Okay.
Sarah Wang: Thank you for the opportunity to ask a question and congratulations on the solid results.
William Huang: Llywodraeth Cymru, at our international holding company level may be mezzanine debt, certainly intend to explore that as a way of, Diolch yn fawr iawn am wylio'r costau cymdeithasol.
Sarah Wang: I have one question about international business.
Speaker Change #147: [music].
William Huang: Yn ogystal â hyn, GDS Holdings Ltd, Diolch yn fawr am wylio'r fideo.
Sarah Wang: As Dan just
William Huang: Yn ddiweddaraf mewn cyfrifiadau lleol, ac rydym yn ymgyrchu'r...
Sarah Wang: mentioned, there's quite some capex needed for international business.
William Huang: ...a large syndicated... Diolch yn fawr iawn, diolch yn fawr iawn, Diolch yn fawr iawn am wylio'r fideo.
Sarah Wang: May I ask what's the future financing plan, especially in the near term as well as in the mid term?
William Huang: Diolch yn fawr am wylio'r fideo.
William Huang: I think before I answer this question, all the financing requirements are based on our, forecast for the next two or three years.
William Huang: Thank you for the questions.
William Huang: So our target is to double the current order number within the next three years.
Daley Lee: Next questions will come from the line of Daley Lee of Bank of America Securities.
William Huang: So this is our base.
Daley Lee: Please go ahead.
William Huang: So in terms of the financing plan, I think I would like to let Dan introduce the experience, a little bit more.
Speaker Change #147: Okay.
Daley Lee: Hi, I have one question about the international business.
Daniel Newman: Yeah, I mentioned that we've started the process for a Series B round, this will be raising, capital once again from external investors, global investors, using what will be a similar instrument, type of security, convertible preferred shares. Our base case assumption is that the new issue size will be similar to Series A, say $600, million to $800 million.
Daley Lee: It seems the area in service is in a good momentum in 2Q, up like 50% in the quarter-on-quarter.
Daniel Newman: It's possible that we could increase the size, the appetite is there.
Speaker Change #147: [music].
Daley Lee: And how do we see the trend in Q3 and Q4 for the area in service for the international business in absolute value or like quarter-on-quarter growth?
Daniel Newman: After completing that offering, which we aim to do before the end of this year, I think, the next financing that we will undertake at our international holding company level may be mezzanine debt.
Daley Lee: Thank you.
Daniel Newman: Certainly intend to explore that as a way of optimizing the overall cost of capital, international.
William Huang: 海恩, on his presentation and the prepared remarks about the, Diolch yn fawr iawn am wylio'r fideo.
Daniel Newman: At the same time, we are putting in place senior debt at the project level, usually, in local currencies, and we are currently undertaking a large syndicated term loan for our Malaysian business.
William Huang: GDS Holdings Ltd yw'r Llywodraeth yng Nghymru.
Daniel Newman: That covers the range of different financing initiatives in the international.
William Huang: Diolch yn fawr am wylio'r fideo.
Daniel Newman: Thank you for the questions.
William Huang: Diolch yn fawr am wylio'r ffilm.
Operator: Next questions will come from the line of Daley Li of Bank of America Securities.
William Huang: Ac rydym wedi dweud y byddai'r rhan fwyaf o hynny, mewn gwirionedd, 200-260 MW, yna 280 MW, bydd yn cael ei ddarparu a'i defnyddio a'i gynhyrchu ar gyfer cyfrifiadur.
Operator: Please go ahead.
William Huang: 24 mônadau gwaith i dagu.
William Huang: So in terms of the financing plan, I think I would like to let it then introduce experiment a little bit more. I mentioned that we've started the process for a series B rounds. We'll be raising capital once again from external investors, global investors, using a similar, similar instruments, type of security, convertible prefer shares. Our base case assumption is that the university's size will be similar to series A and say 600 to 800 million dollars. It's possible that we could increase the size. We do that the appetite is is there. But completing that offering, which we aim to do before the end of this year.
Daley Li: Hi, Max.
William Huang: This is a very rapid ramp-up, implies the Dow.
Daley Li: Thanks for taking my question.
William Huang: Bydd y cyfrifoldeb ar gyfer y 24 mlynedd nesaf yn cynyddu'r 3.5 ffordd.
Speaker Change #147: Okay.
Daley Li: I have one question about the international business.
William Huang: Dydyn ni ddim yn rhannu'r cyfrifiad ym mhwyfn ym mhwyr.
Daley Li: It seems that the area in service is in a good momentum in 2Q, up like 50% in the quarter, on quarter.
William Huang: Diolch yn fawr am wylio'r cwestiynau.
[music].
Daley Li: How do we see the trend in Q3 and Q4 for the area in service for the international business, in absolute value or like quarter on quarter growth?
William Huang: Diolch yn fawr iawn am wylio'r fideo.
Daley Li: Thank you.
William Huang: Diolch yn fawr iawn i bawb am y cynyddiadau a'r gwasanaethau a'r gweithredu a'r defnyddio.
Daniel Newman: It gave some guidance in the...
William Huang: Byddwn yn cynyddu ar y rhan fawr iawn, but over the course of next year.
Daniel Newman: Yn ddiweddaraf, rydyn ni'n gobeithio y bydd y cyfrifiad a'r adroddiadau'n gobeithio ynglyn â'r amgylchedd ar gyfer datblygu rhan fawr iawn o'r cyfrifiad cymdeithasol.
William Huang: 2025.
Daniel Newman: Rydyn ni'n cael 280 megawatt o'r cymdeithas sydd wedi'i gysylltu ond nid wedi'i datblygu a'i defnyddio.
William Huang: Diolch yn fawr iawn, diolch yn fawr iawn.
Daniel Newman: Ac mae'r cyfrifoldeb hwn yn gwella'r cyfrifoldeb a'r cyfrifoldeb a'r cyfrifiadau gyda'r cyfrifoldeb.
William Huang: Thank you for the questions.
Daniel Newman: Rydyn ni'n dweud bod y cyfrifoldeb – yma mae'n dweud o'r 200, o'r 260 megawatth – mae'n dweud o'r 280 megawatt – yn cael ei ddatblygu a'i defnyddio a'i gynhyrchu ar gyfer 24 mlynedd, sy'n rhan o'r cyfrifoldeb sy'n mynd ymlaen.
Edison Li: Our next question comes from Edison Li of Jefferies.
Daniel Newman: Rydyn ni ddim yn rhoi cyfrifoldeb ym mhwrth y mhwyr, ond fel sylweddoliad, dros y ddau fwyaf ym mhwrth y mhwyr ym mhwrth ddeunydd y flwyddyn hwn, bydd y cynyddu o'r cyfrifoldeb a'r cyfrifoldeb a'r cyfrifiadau yn cynyddu dros amser anhygoel, ond dros y blynyddoedd y flwyddyn nesaf, 2025, bydd y cynyddu'n anhygoel iawn.
Edison Li: Please go ahead.
Daniel Newman: Diolch am y cwestiynau.
Edison Li: Thank you for taking my question.
Operator: Y cwestiynau nesaf ddod o Edison Lee o'r Jefferies.
Edison Li: Congratulations again.
Operator: Diolch am y cwestiynau.
Edison Li: I have two questions.
Edison Lee: So may I know where that incremental is coming from, which location it's coming from?
Edison Li: Number one is that, for your.
Edison Lee: And number two is you said that you're one big international technology customer at Batam, and can you discuss your customers in Malaysia?
Edison Li: Power capacity or power secured in Southeast Asia, I think that amount increased from 711 megawatts from your first quarter presentation to 797.
Edison Lee: It's just still a single company right now, and what do you expect that to change or situation to change or happen over the next couple of quarters?
Edison Li: So may I know where that incremental is coming from, which location it's coming from?
Daniel Newman: Yeah, maybe I should answer.
Edison Li: And number two is, you said that you want a big international technology customer and fast term.
Daniel Newman: Edison, hi, it's Dan here.
Edison Li: And can you discuss your customers in Malaysia?
Daniel Newman: The first question about the increase in secured resource, developable capacity, that is in both of our sites in Johor, where we completed land purchases for additional plots contiguous with our existing sites, and where there is power infrastructure in place and we were able to upsize the amount of power that we were able to obtain through that infrastructure.
Edison Li: It's just still a single company right now.
Daniel Newman: And the second question is asking about the customer mix in Southeast Asia.
Edison Li: And what do you expect that to change or a situation to change or happen over the next couple of quarters?
Daniel Newman: So, currently we already have, let's say, five customers, both from China and international, right?
Edison Li: Xinyi Wang, Mingxuan Li, Cooper Belanger, GDS Holdings Ltd.
Daniel Newman: Or, let's say, the industry, the technology leader.
William Huang: Yn ymwneud ag adnodd ddatblygu'n sicr, mae'n ymwneud â'n gweithleoedd mewn gwirionedd, yng Nghymru, lle ddatblygu'n digwyddiadol ymgynghoriadau llawn ar gyfer gweithleoedd addas, gyda'n gweithleoedd sydd ar gael.
Daniel Newman: So I think we are very, very focused on to try to diversify the customer.
William Huang: Yn lle mae cyfrifiadur pŵer ar gael, rydyn ni'n gallu cynyddu cyfrifiadur pŵer rydyn ni'n gallu ei wneud, obtained through that infrastructure.
Daniel Newman: This is always our target, right?
William Huang: I think the second question is asking about the customer mix in Southeast Asia.
Daniel Newman: So the current mix is, let's say, around 70% from China.
William Huang: Currently, we already have, let's see, five customers, both from China and internationally, in all, like, let's say the industry, technology leader.
Daniel Newman: It's not a single customer, it's three of them.
William Huang: So I think we are we are very, very focused on to try to, customer.
Daniel Newman: And another is also international customers.
William Huang: This is always our target, right?
Daniel Newman: So based on our current forecast, I think in the next 12 months, the international customer, will increase their percentage as well.
William Huang: So the current mix is, let's say, around 7%.
Daniel Newman: Ultimately, I think it will be 50-50, yeah, in this region.
William Huang: 70% from China, it's not a single customer, it's three of them, and another is also international, enough.
Edison Lee: Can I follow up with one quick question?
William Huang: But based on our current 字幕由Amara.org社区提供, forecast, I think in the next 12 months, the international customer will increase the percentage as well.
Edison Lee: So you said that there are five customers, including China and international.
William Huang: Ultimately, I think it will be 50-50.
Edison Lee: And then you said that you want a big international customer in Indonesia.
William Huang: Thanks.
Edison Lee: So can I assume that you have one international customer in Indonesia, or just one customer, in Indonesia, and that's international?
Edison Li: Can I follow up with one quick question?
Edison Lee: And then you have four customers in Malaysia, and that's China and international.
Edison Li: So you said that there are five customers, including Chinese international.
Edison Lee: Is my understanding correct?
Edison Li: And then you said that you want a big international customer in Indonesia.
Daniel Newman: Yes.
Edison Li: So can I assume that you have one international customer in Indonesia or just one customer in Indonesia, and that's international?
Daniel Newman: Indonesia is international, yeah.
Edison Li: And then you have four customers in Malaysia, and that's China and Indonesia.
Daniel Newman: And the four in Johor is Chinese and international, yeah.
Edison Li: Yes.
Daniel Newman: You're right.
William Huang: Yes.
Edison Lee: Okay.
William Huang: Yes, yes, Indonesia is international.
Edison Lee: Thank you.
William Huang: Yeah.
Operator: Thank you for the questions.
William Huang: And four in Johor is Chinese and international.
Operator: Next question comes from the line of Louis Zhang from Citi.
William Huang: Yeah, you're right.
Louis Zhang: Please go ahead.
Edison Li: Okay, thank you.
Louis Zhang: Thank you much for taking my questions.
Louis Zhang: Thank you for the questions.
Louis Zhang: Congratulations on the strong results with like solid national growth and signing, and, then the domestic recovery.
Louis Zhang: Next question comes from the line of Louis Zhang from Citi.
Louis Zhang: I actually got two quick questions.
Louis Zhang: Please go ahead.
Louis Zhang: The first one is for the domestic one.
Louis Zhang: Thank you very much for taking my questions.
Louis Zhang: I think that like the net moving for this quarter is very encouraging, and the MSL is, trending up.
Louis Zhang: Congratulations on the strong sets with Saladin, Nashima, Grove and Xinyi, and then the Domestic Recovery.
Louis Zhang: Like, how shall we think about the pace of the moving and MSL recovery ahead?
Louis Zhang: I actually got two quick questions.
Louis Zhang: And more importantly, the sustainability of the demand?
Louis Zhang: The first one is for the domestic one.
Louis Zhang: And then second question is for the international.
Louis Zhang: I think that the net movie for this quarter is very encouraging and the MSL is trending up.
Louis Zhang: I think some regional or global peers also have their planning in Johor.
Louis Zhang: How shall we think about the pace of the moving and MSL recovery ahead?
Louis Zhang: And we're seeing like increasing DC supply.
Louis Zhang: And more importantly, the sustainability of the demo?
Louis Zhang: What is your strategy in SEA?
Louis Zhang: And then the second question is for the international.
Louis Zhang: And what are the like your orientation over the regional or the global peers?
Louis Zhang: I think some regional or global peers also have their planning as a whole.
William Huang: I think that the next financing that we will undertake at our international holding company level may be measuring debt. Certainly intend to explore that as way of optimizing the global cost of capital international. At the same time, we are putting in place senior debt at the project level, usually in local currencies. And we are currently undertaking a large syndicated term loan for our prime Malaysian business. That can cover the range of different financing issues in international. Thank you for the questions.
Louis Zhang: And then also one more thing on like the supporting infrastructures, like electricity, grid, like, with those kind of stuff limit the near-term supply growth.
Louis Zhang: And we're seeing an increasing DC supply.
Louis Zhang: Thank you.
Louis Zhang: What is your strategy in SEA?
William Huang: Louis, I'll begin with your questions about China.
Louis Zhang: And what are your expectations over the regional or the global peers?
William Huang: So the moving, yes, there's a very clear step up in 1Q23 compared with the level of moving, over the past 12 quarters.
Louis Zhang: And then also one more thing on the supporting infrastructures like electricity grid.
William Huang: Ac mae hynny'n digwydd, mewn gwirionedd, mae'n fwy iawn ym mhryd ddegawd.
Louis Zhang: Will those kinds of stuff limit the near-term supply growth?
William Huang: Dyma'n rhan o'r cyfrifiadau rydyn ni wedi'u ysgrifennu yn y 12 neu 18 mlynedd diwethaf, sydd wedi cynyddu cynyddu cyflymau'n fwy gyflymau na'r cyfrifiadau rydyn ni wedi'u ysgrifennu yn y blynyddoedd.
Louis Zhang: Thank you.
William Huang: Mae'r cyfrifiadau rydyn ni wedi'u ysgrifennu yn y 12 neu 18 mlynedd diwethaf, ac mae'r dechrau cynyddu cyflymau ar gyfer cwmni sydd wedi bod yn y cyfrifiadau'n fwy amser.
William Huang: Llywydd, byddwn i'n dechrau gyda'ch cwestiynau am Gymru.
William Huang: Felly, o ran y cyfrifiadau cyfrifiadau, ond hefyd, yr hyn rydyn ni'n gwybod ar hyn o bryd am ein cyfrifiadau cwmni, rydyn ni'n gobeithio y bydd y lefel ar hyn o bryd yn cynyddu dros y blynyddoedd nesaf, o ran ein gweld, a dwi'n meddwl ei fod yn anhygoel iawn.
William Huang: Diolch yn fawr iawn, diolch yn fawr iawn.
William Huang: Ar gyfer y MSR, rydyn ni'n edrych ar y MSR mewn sefyllfa cwmni, ac yn cymryd y rhain o newid gyda'r un cwmni o'r blynyddoedd diwethaf.
William Huang: Yn gyfarfod ag y ffordd o ddechrau drwy'r diwrnod diwethaf, Diolch yn fawr am wylio'r fideo.
William Huang: Felly, o ran y cyfrifiadau cwmni diwethaf, mae'r MSR wedi cynyddu dros 2%.
William Huang: Ac mae hynny'n digwydd, mewn gwirionedd, mae'n fwy iawn, partly Diolch yn fawr iawn am wynebu'r cyfrifiadau rydyn ni'n eu cyflwyno gyda'r, 12 or 18 months, sydd gyda cynyddiadau cynyddu'n gyflymio'n fawr na'r rhai rydyn ni wedi'u gysylltu'n ddiweddarach.
William Huang: Ac, wrth i ni fynd i'r blynyddoedd nesaf, byddai'r cynyddu'n fwy na'r cynyddu'n 24, yn ymwneud â'r 23.
William Huang: A hefyd, y dechrau o ddod yn ymwneud â'r cwmni sydd wedi bod yn y gysylltiadau ymlaen i'r cymdeithasau dros y cymdeithasau.
William Huang: Felly, mae'n hyrwyddo i weld bod y MSR yn cynyddu dros y blynyddoedd nesaf.
William Huang: Felly, ar gyfer termau cyfrifoldeb, byddwn hefyd...
William Huang: Y cwestiwn cyntaf yw'n ymwneud â'n strategaeth yma.
William Huang: Diolch yn fawr iawn i bawb am ein cymdeithasau ar gyfer ein cymdeithasau.
William Huang: Rwy'n meddwl bod pawb yn gwybod ein bod ni'n ymwneud â'r cynyddu cyntaf yma.
William Huang: Yn ystod y flwyddyn nesaf, rydyn ni'n cael gwybodaeth, ac rwy'n credu ei fod yn anhygoel iawn.
William Huang: Yn y blynyddoedd nesaf, rwy'n meddwl ein bod ni'n mwynhau'r cynyddu cyntaf, oherwydd bydd y cyfrifiadau a'r cyfrifiadau bydd yn ymwneud â'r lefel sy'n fawr iawn.
William Huang: Ever thought, you know, we, Rydyn ni'n edrych ar NSR ar ddiwrnod ddiwrnodol a'n cymryd...
William Huang: Felly, er mwynhau'r blynyddoedd nesaf, rwy'n meddwl y bydd y cyfrifiadau yn cynyddu.
William Huang: Diolch yn fawr am wylio'r fideo.
William Huang: Felly, dydyn ni'n meddwl, yn y blynyddoedd nesaf, bydd y cyfrifiadau yn ymwneud â'r cyfrifiadau.
William Huang: Diolch yn fawr iawn am wylio'r fideo.
William Huang: Felly, rwy'n meddwl, mae'r cyfrifiadau yn ymwneud â'n dealltaeth o farchnad.
William Huang: Mae'r MSR wedi'i ychwanegu ar 2% ychydig, ac...
William Huang: Felly, wrth gwrs, os ydym yn siarad am y plynyddoedd nesaf, beth sy'n digwydd, rwy'n meddwl ein strategaeth yw, yn gyntaf, rydyn ni'n edrych nid yn unig ar y farchnad yma.
William Huang: Byddwn yn mynd i'r blwyddyn nesaf a byddai'r cyfrifiadau'n fwy na'r cyfrifiadau'n fwy na'r cyfrifiadau.
William Huang: Rydyn ni hefyd yn dechrau datblygu'r farchnad eraill yma.
William Huang: Diolch yn fawr am wylio'r cwestiynau.
William Huang: Mae pawb yn gwybod bod GDS yn creador farchnad.
William Huang: Diolch yn fawr.
William Huang: Felly, rydyn ni ddim yn ymwneud â'r fforwm.
William Huang: Diolch yn fawr iawn am wylio'r MSR.
William Huang: Felly, rwy'n meddwl y byddwn ni'n rhoi argyfwng arall i chi ym mis nesaf.
William Huang: 謝謝, The second question is, I think, about our strategy in.., this region, right, in a, in a, in a job.
William Huang: Diolch i chi am y cwestiynau.
William Huang: I think you.
Operator: Un moment ar gyfer y cwestiynau nesaf.
William Huang: Number one, I think we are, everybody knows we are the first mover in this region and the, We still, in the next three years, I think that we still enjoy the first mover advantage because the time to market and the demand profile still will continue to maintain a very strong level.
Operator: Cwestiynau cyfyngedol gan Yng Nglyw o Morgan Stanley.
William Huang: So even after three years, I think still the market size will increase, still continue to increase.
Yng Nglyw: Diolch yn fawr.
William Huang: So I don't think in short term, in the next five years, it will be another issue for all the players in this region.
Yng Nglyw: Thanks for the opportunity to ask another question.
William Huang: So I think this is based on our understanding of the market.
Yng Nglyw: One more thing from my side is regarding, the REITs plan in China.
William Huang: So of course, if we talk about the after five years, what will happen?
Yng Nglyw: Could you please talk about whether the REITs will be a public trade REIT or it's a private REIT or actually you are targeting both?
William Huang: I think our strategy is that, number one, I think we are looking at not only this region market.
Yng Nglyw: And another thing is what could be the estimated debt reduction if you can deliver one REITs project to the, – inject one asset to the REITs?
William Huang: We are also start, we already start to develop the region, other market in this region.
Yang Liu: Yang Liu is down here.
William Huang: Everybody know GDS is a market creator.
Yang Liu: So the REIT is listed, will be listed on one of the stock exchanges in China and it will be offered publicly.
William Huang: So we are not a forum.
Yang Liu: The typical REIT offering size I mentioned earlier is about 2 billion RMB. As a guideline, I would say that transaction, would be that size and we would expect to deconsolidate around 1 billion RMB of debt.
William Huang: So I think we will give you another surprise in the next three years.
Yang Liu: And if we sell 80% of the equity, then we will receive equity cash proceeds for the disposal of 80% at the valuation of the offering. So the combined effect should be that it helps to increase our liquidity, decrease net debt and also accretive on EBITDA multiple basis.
William Huang: Thank you for the questions.
Yang Liu: That's a single transaction.
Operator: One moment for the next questions.
Yang Liu: Of course, once the REIT is established, the possibility is there for us to drop further assets into it and that's what we would, hope to do over the longer term.
Yang Liu: Full-up questions from Yang Liu of Morgan Stanley.
Yang Liu: But for now, our focus is just on achieving the first step, which is to set up this vehicle.
Yang Liu: Please go ahead.
Yang Liu: You asked about privately placed, right?
Yang Liu: Thanks for the opportunity to ask another question.
Yang Liu: I mentioned earlier that we're working on prepackaging some assets.
Yang Liu: One more thing from my side is regarding the REITs plan in China.
Yang Liu: That will be privately placed. It takes the form of an asset-backed security.
Yang Liu: Could you please talk about whether the REITs will be a public trade REIT or it's a private REIT or actually you are targeting both?
Yang Liu: Technically, it is listed on a stock exchange, but it's easier to think of it as a privately placed security.
Yang Liu: And another thing is what could be the estimated debt reduction if you can deliver one REITs project to the, inject one asset to the REITs?
Yang Liu: It's a stepping stone in terms of packaging the assets so that it is ready to be injected into a REIT when the assets are stabilized.
William Huang: Yeah, yeah, yeah, we'll do it down ahead.
Yang Liu: Thank you.
William Huang: The read will be listed on one of the stock exchanges in China.
Operator: And one more question regarding the international business.
William Huang: It will be offered publicly.
Operator: It's very encouraging to see the big new orders.
William Huang: Diolch yn fawr iawn i bawb am wylio'r fideo.
Operator: Could you please, update us what is the IRR trend for the big new orders?
William Huang: 2BitIn R&B, Yn gynllunio, byddwn yn dweud.., expect to deconsolidate around 1 billion RMB of debt.
Operator: Is it stable or rising a little bit or declining a little bit? What's the trend compared with the previous orders?
William Huang: Diolch yn fawr iawn am wylio'r fideo.
Operator: Mae'n gweithreduol iawn.
William Huang: 維吾爾族人, Diolch yn fawr am wylio'r cwestiynau.
Operator: Efallai y byddai'n haus i siarad am ymdrechion ddatblygu, yn hytrach na'r IRR, ac ymdrechion ddatblygu yw'r teams leol, Diolch am y cwestiynau.
William Huang: Diolch yn fawr iawn am wylio'r fideo.
Operator: Diolch yn fawr iawn.
William Huang: Diolch yn fawr iawn am wylio'r gweinidog.
Operator: John, I think the Singapore project, yeah, you know, in Singapore, so I think it's very, difficult.
William Huang: So the combined effect should...
Operator: Number one is getting the CFA.
William Huang: Mae'n helpu i gynyddu ein cymdeithas.
Operator: It's very difficult.
William Huang: Thank you for watching!
Operator: The second, now we win the CFA, but the second issue is to get the very, very good location of the land is more difficult.
William Huang: ac hefyd yn gyffredinol un o'r...
Operator: So fortunately, we are in the process to acquire land by now.
William Huang: Yw hwnnw'n trafnidiaeth unig, wrth gwrs.
Operator: I think we believe it's in the process and should be done in the next couple of months, completed the process.
William Huang: Unwaith i'r adnoddwyr ddatblygu, mae'r cyfleoedd yno i ni ddod allan ymlaen.
Operator: And we aim to deliver before the end of the 2026 to launch the service to the market.
William Huang: That's what we...
Daily Lee: Next questions will come from the line of daily Lee of Bank of America securities. Please go ahead. Hi, my name is sense for taking a question. I have one question about the international business instance of a area in service is a good momentum. We took you up like 50% of the code on code and how do we see the trend in Q3 and Q4 for the area in service for the international business. In absolute value or like Q4 and Q2. Thank you.
Operator: Then that's a pretty firm schedule.
William Huang: Rydyn ni'n gobeithio ei wneud dros y cyfnod hir, ond ar hyn o bryd rydyn ni'n seilio ar...
Operator: Thank you for the questions.
William Huang: Diolch yn fawr am wylio'r adroddiadau.
Operator: In the interest of time, that concludes the Q&A session.
William Huang: Diolch yn fawr iawn am wynebu'r cyhoeddiadau'n gyffredinol.
Operator: I'd now like to turn the call back over to the company for closing remarks.
William Huang: Rydyn ni'n gweithio ar gynhyrchu rhywfaint o ariannau.
Operator: Thank you.
William Huang: Diolch yn fawr iawn am wylio'r wybodaeth ddiweddaraf.
Operator: Thank you once again for joining us today and we'll see you next time.
William Huang: Thank you for practicing with all the asset backed security stepping stones, Diolch yn fawr iawn, diolch yn fawr iawn, Diolch yn fawr iawn am wylio'r fideo.
Operator: Bye.
William Huang: Packaging Assets, yn barod i gael ei ddefnyddio.
Operator: Bye.
William Huang: Pan fydd yr adnoddau'n dal i mewn.
William Huang: Thank you.
Yang Liu: One more question regarding the international business.
Yang Liu: It's very encouraging to see the big new orders.
Yang Liu: Could you please update us what is the IRR trend for the big new orders?
Yang Liu: Is it stable or rising a little bit or declining a little bit? What's the trend compared with the previous orders?
William Huang: Dwi'n dweud ei bod hi'n gysylltiedig iawn.
William Huang: Byddai'n haws i siarad am gynnydd ddatblygu, yn hytrach na'r IRF.
William Huang: Mae'r datblygiad yn y tîm lawr.
William Huang: Mae hyn yn ddiddorol iawn i ni o ran...
William Huang: Diolch yn fawr iawn am wynebu'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau a'r cyfrifiadau, is a very high-poll.
William Huang: Customer contracts, they are, I would say, U.S. standard, 10 to 15 years.
William Huang: Mae rhai ohonyn nhw'n gysylltu â'r $US, Mae rhai ohonoch yn cael esgaladau, felly mae'n ddifrifol iawn.
William Huang: Thank you for the question.
Jonathan Atkin: Next question comes from Jonathan Atkin from RBC Capital Markets.
Jonathan Atkin: Please ask your question.
Jonathan Atkin: Thanks.
Jonathan Atkin: So, Chief Porter, what about China?
Jonathan Atkin: And then what about international?
Jonathan Atkin: So, in China, I was just interested in any comments you would have about the contract renewals and churn outlook for the remainder of this year.
Jonathan Atkin: It looks like you've got a fairly sizable amount coming up for renewal in second half of this year, 12.1% of total area committed.
Jonathan Atkin: And then internationally, I would agree with William's comments about Johor, and I think you have somewhat of an incumbency early mover advantage.
Jonathan Atkin: But Johor is something that I was interested in because you were one of the winners of the CFA process.
Jonathan Atkin: And is there any visibility in terms of timeline as to when you might get that project underway and when that might be ready for service, or is it too soon to have you on that?
William Huang: Diolch yn fawr iawn am wylio'r cwestiwn gyntaf.
William Huang: 您说得对,您说得对,您说得对, Yn ddiweddaraf, mae cynyddiadau gweithredu'n fwy fawr yng nghanol blynyddoedd y blynyddoedd.
William Huang: Diolch yn fawr iawn.
William Huang: Diolch yn fawr iawn i bawb am wylio'r fideo.
William Huang: Rydyn ni'n gweithredu hyn mewn cyfnod o ddefnyddio'r ardal, y cyfrifoldeb o'r ardal cyffredinol sy'n cael ei ddefnyddio.
William Huang: Yn ystod y 6.5au diwethaf, mae'n gweithio ar gyfer cyflwyno cynnwys am ychydig o 5% o'r cyflwyno.
William Huang: Diolch yn fawr iawn am wylio'r fideo.
William Huang: International Standard.
William Huang: Thank you.
William Huang: Yn amlwg, mae'n cymryd ymdrechion am 5,000 ysgriwm oedran ar gyfer 40,000 ysgriwm.
William Huang: In the second half of this year, it will.., commuted about that rate.
William Huang: Ond os edrychwch ymlaen at y flwyddyn nesaf...
William Huang: I think that.
William Huang: GDS Holdings Ltd, Diolch yn fawr iawn i ni.
William Huang: 請不吝點贊訂閱轉發打賞支持明鏡與點點欄目, Diolch yn fawr iawn i bawb.
William Huang: Mae'r niferoedd hyn yn gynrychioli, Diolch yn fawr iawn i bawb am wynebu'r cyfrifiadau cyhoeddus.
William Huang: Yn ddiweddaraf, diolch yn fawr iawn i'r aelodau a'r gweinidogion a'r aelodau a'r aelodau a'r aelodau.
William Huang: We had a phenomenal second quarter with a 206 megawatt of new orders spread across our two campuses in Johor.
William Huang: The earliest presentation and the prepared remarks about the timeframe for delivery of a very substantial part of the overall backlog. We currently have about 280 megawatts of AST, which is committed but not yet delivered and utilized. And we've said that that will be most of that in fact set 260 megawatts out of 280 megawatts will be delivered and utilized and revenue generating within 24 months, which is a very rapid ramp up as it implies that our revenue generating capacity will increased by 3.5 times over the next two months.
William Huang: Thank you very much.
William Huang: So I think it's very difficult.
William Huang: Number one is getting the CFA.
William Huang: It's very difficult, right?
William Huang: The second, now that we got, we win the CFA, but the second question is...
William Huang: The issue is to get a very, very good location of the land is more difficult.
William Huang: So fortunately, we are in the process to acquire a land right now.
William Huang: I think we believe it's in the process and should be done in the next couple of months, completed the process.
William Huang: And we aim to deliver before the end of the 2026 to the public, that launched a service to the market.
William Huang: That's a pretty firm schedule.
William Huang: Thank you for the questions.
William Huang: We did not give a quarter by quarter breakdown, but as an indication over the next two quarters a second half of this year, the increase in capacity and service and the delivery and utilization will increase by a relatively small amount. But over the course of next year, 2025, the increase will be very substantial.
Operator: Thank you for the questions.
Edith Lee: Our next question comes from Edith and Lee.
William Huang: I'll Jeffrey, please go ahead. Thank you for the question. Congratulations again. I have two questions. Number one is that for your power capacity or power secured in Southeast Asia, I think that amount increased from 711 megawatts from your first quarter presentation to 797. So where that incremental is coming from, which location is coming from? And number two is you said that you want to take international technology customer and bathroom. And can you discuss your customers in Malaysia is just still a single company right now and what do you expect that to change or situation to change or happen over the next couple of quarters?
William Huang: Yes. The additional plots contiguous with our existing sites and where there is power in the structure in place and we were able to up size the amount of power that we were able to obtain through that through that infrastructure. And with the second question, I think I said ask about the customer maintenance of Southeast Asia. Currently, we already have five customers from both from China and international, all like the industry, the technology leader.
William Huang: More recently, we signed a master sales agreement with the Global Technology Company for capacity as our new campus in Baton.
William Huang: So I think we are very, very focused on trying to diversify the customer. This is always our target, right? So the current mix is let's say around 70 percent from China, it's not a single customer, it's three of them, and another is also international customer. But based on our current focus, I think in the next 12 months, the international customer will increase the percentage as well. Ultimately, I think it will be 50-50 in this region.
William Huang: Can I follow up with one quick question? So you said that there are five customers including Chinese, international, and then you said that you won the big international customer in Indonesia. So can I assume that you have one international customer in Indonesia, or just one customer in Indonesia at that international, and that you have two customers in Malaysia and that's China and international. Yes, Indonesia is international, and four in your whole is Chinese and international. You're right. Okay, thank you.
Operator: Thank you for the questions.
Louis Chang: Next questions come from Delay, or Louis Chang from City, please go ahead. Thank you, management, particularly in your questions. Congratulations on the strongest stats with like Salad in the National Girl Visiting and then the domestic recovery.
William Huang: This is a major breakthrough which we will lead to further larger orders.
William Huang: I actually got up to quick question. The first one is for the domestic one. I think that like the net moving for this quarter is very encouraging, and the MSL is trying to help. Like how share we think about the pays of the moving and MSL recovery I had, and more importantly, the sustainability of the demand.
William Huang: And then the second question is for the national. I think some regional or global peers also have their planning is at all, and for seeing like increasing DC supply, what is your strategy in SEA, and what are the like your foundation over the regional or the global peers, and then also one more thing on like the supporting infrastructures like electricity grid, like we don't sound stable in the near term supply growth.
William Huang: Singapore, Jihou, Batani is faster emerging as one of the very largest data center markets in the world.
William Huang: Thank you. So I'll begin with your questions about China. So the moving, yes, is a very clear step up in one Q23 compared with the level of moving over the past 12th course, and that was continued. In fact, it was even higher in the second quarter. This is partly a result of the contracts we signed in the last 12 or 18 months, which have faster moving schedules than those that we signed previously.
William Huang: And we have a great market position where is this demand coming from?
William Huang: Part of it is reading no expansion and the part of it is feel over from the US which is mostly EI related.
William Huang: And also the beginning of a pickup in the move-in by customers whose commitments have been in the backlog for longer. So based on the contractual terms, we're also what we currently know about our customers' intentions. We expect the current level of moving to continue through next year's part as far as we have visibility, which I think is very encouraging. For the MSR, we look at MSR on a quarterly basis and compare the rate of change with the same quarter of the prior year.
William Huang: And so over the past few quarters on average, the MSR has decreased by a little over 2%. And as we go into next year, there will be further decrease for probably less than the decrease during 24 as compared with the 23. So it's also encouraging to see that the MSR is blossoming up.
William Huang: The second question is about our strategy in this region, right? In a energy hall. So I think the number one, I think we are, everybody know we are the first to move in this region. And we still, in the next three years, I think that we still enjoy the first to move advantage, because the time is marking, and the demand profile still will continue to maintain a very strong level. So even the last three years, I think still the market sites will increase, still continue to decrease.
William Huang: A critical success fact is that we were first to move into Jihou and how to create the market. We anticipated where demand will flow and secure this resource which give us time to market advantage.
William Huang: So I don't think it's in short in the next five years, it will be another issue for all the players in this region. So I think this is based on our understanding of the market. So of course, if we talk about the after five years, whatever will happen, I think our strategy is the number one, I think we will, we will look at not only this region market. We are also start, we already start to develop that region, other market in this region. Everybody know GDS is a market creator, so we are not a forum.
William Huang: We have shown that we can execute delivery data centers in record time with the state of the art design and the technology solutions.
William Huang: We have also shown that we can operate working with the local institutions to source and the train talent.
William Huang: From the perspective of our customers these are really meaningful differentiators.
William Huang: As of today we have 388 megawatts of total customer commitments out of which 101 megawatts is already utilized and 287 megawatts is backlog. The delivery schedule for most of the backlog is very short and the customers undertake to move in quickly. As a result based on the terms of existing contracts we expect to have over 350 megawatts of utilized capacity within 24 months.
Daniel Newman: I will now pass on to Pierre for the financial and the operating review.
Daniel Newman: Thank you.
William Huang: So I think we will give you another surprise in the next three years.
Operator: Thank you for the questions, one more moment for the next questions.
Young Liu: Full up questions from Young Liu of Born and Stanley, please go ahead. Thanks for the opportunity to ask another question. One more thing from my side is regarding the REITs playing China.
William Huang: Could you please talk about whether the REITs will be a public-traded REITs, or it's a private REITs, or actually you are targeting both. And another thing is what could be the estimated debt reduction if you can deliver one REITs project to the inject one asset to the REITs. The REITs listed will be listed on one of the stock exchanges in China and it will be offered publicly. The typical REIT offering site I mentioned earlier was about 2 billion RMB.
William Huang: As a guideline, I would say that transaction that size, we would expect to deconsolidate around 1 billion RMB of debt. If we sell 80% of the equity, then we will receive a cash proceeds for the disposal of 80% at the valuation of the offering. So the combined effect should be that it helps to increase our equity, decrease net debt, and also increase our equity. So the REITs will only be 2 billion RMB. That's a single transaction. Of course, once the REITs established, the possibility is there for us to drop further assets into it. That's what we would hope to do over the longer term.
William Huang: But for now, our focus is just on achieving the first step, which is to set up this vehicle.
William Huang: You asked about privately play history. I mentioned earlier that we're working on pre-packaging some assets. That will be privately placed. It takes the former asset back. Security, technically it is, this is all the stock exchange, but it's easier to think of it as a privately placed security. It's a stepping stone in terms of packaging assets so that it is ready to be injected into a REIT when the assets are stabilized.
William Huang: Thank you.
Daniel Newman: On the completion of the first external equity capital raising for our international business we have started formal disclosure of segment financials. As shown on slide 17 digital land holding limited and its subsidiaries comprises all of our business and assets outside of mainland China except for some minor third party data centers in Hong Kong. We refer to this segment as GDSI or international.
William Huang: And one more question regarding the international business. It's very encouraging to see the big new orders. Could you please update us what is IRR trend for the big new orders? Is it stable or rising a little bit or declining a little bit? What's the trend compared with the previous orders?
William Huang: I'd say it's very consistent, a set of maybe easier to talk about like a development yield rather than IRR, and the development yield is in the low teams, which is quite acceptable to us in terms of a return on our invested capital, and these are very high quality customer contracts, they are, I would say US Standard, 10 to 15 years, some of them are priced in US dollars, some of them have escalators, so it's very high quality business.
Operator: Thank you for the questions.
Jonathan Atkin: Next questions, come from Delilah, Jonathan Atkin from ABC Capital Market to please host your question. Thanks, so I just got you a quarter, what about China, and then what about international? So in China, I was just interested in any comments you would have about the contract, renewals, and insure an outlook for the remainder of this year, it looks like you've got a fairly sizable amount coming up for renewal in second half of this year, 12.1% of total area committed.
Daniel Newman: GDS holdings limited and all of its subsidiaries excluding GDSI comprises our ultimate holding company and all of our business and assets in mainland China. We refer to this segment as GDSH or China.
Daniel Newman: Starting with the China segment on slide 18 in 2Q24.
William Huang: And then internationally, I would agree with William's comments about your whore, and I think you have somewhat of an comprehensive, or literally mover advantage, but something that I was interested in, because you were one of the winners of the CFA process, and is there any visibility in terms of timeline as to when you might get that project underway, and when that might be ready for service, or is it too soon to have you on that? Thank you.
William Huang: The toilet is down on the first part of your question about China. You're right, you have a large amount of contract renewals in the second half of the year, but we look at the quantum of churn. We've measured it in terms of area utilized, the churn has a percentage of out total area utilized. And over the past six quarters, it's been running at an annualized rate of about five percent, which I believe is relatively low by international stands in, you know, the absolute terms is averaged about 5,000 square meters per quarter.
Daniel Newman: GDS H Revenue increased by 8.9%, an adjusted EBITDA increased by 4.3% year-on-year. In order to show the underlying growth rate, we excluded previously disclosed one-time items from 2Q23. GDS H Revenue growth was mainly driven by an increase in total area utilized at 10.2% year-over-year.
Daniel Newman: As shown on slide 21, NSR per square meter comparing 2Q24 with 2Q23 was flat.
Daniel Newman: However, EBITDA margin for 2Q24 versus 2Q23 was down by 2.1 percentage points. The main reason for this is the increase in power tariffs which occurred during the second half of last year.
William Huang: And the second half of this year, it will continue at about that rate. But if we look into next year, I think the three to five percent annual churn rate would be normal for us. And we don't currently actually have any visibility on any churn, which is exceptional. Those numbers represent really quite a small percentage of the total amount of capacity, which is coming up for contract renewals, as you pointed out.
Daniel Newman: Turning to the international segment on slide 19, in 2Q24, GDS H Revenue increased by 24% and adjusted EBITDA by 80% quarter-on-quarter.
Daniel Newman: As shown on slide 21, during 2Q24, there was a 28 megawatt increase in IT power utilized. The NSR per kilowatt per month was $135 including power income.
Daniel Newman: As William mentioned, the ramp up over the next 24 months will be extraordinary.
Daniel Newman: The rate of progress quarter by quarter depends on the timing of crafty completions and contractual revenue commitments.
William Huang: John, I think the Singapore project could be, you know, in Singapore, so I think it's very difficult. What number one is getting the CFA, it's very difficult, right? The second, now that we've gotten, we win the CFA, but the second question is the issue is to get to the very, very good location of the land is more difficult, right? So, fortunately, we are in the process to acquire a land by now.
Daniel Newman: The increase in the next couple of quarters is quite small but thereafter it will take off.
Daniel Newman: Turning to CAPEX on slide 23.
Daniel Newman: In 1H24, our China CAPEX totaled 1.8 billion RMB. We expect lower CAPEX in the second half of the year including the proceeds of the BOT data center transfer and still maintain our 2.5 billion RMB guidance for the full year. In 1H24, our international CAPEX was also around 1.8 billion RMB.
Daniel Newman: In the second half of the year, we expect CAPEX to increase significantly and it is likely that we will exceed our CAPEX guidance for international of 4 billion RMB. Fortunately, the lead time from incurring CAPEX to generating revenue in the international business is very short.
William Huang: I think we believe it's in the process and should be down in the next couple of months, a competitive process. And we aim to deliver before the end of the 2036 to launch the service in the market. So, that's a pretty firm schedule. Thank you for the questions. In the interest of time, that concludes the Q&A session.
Daniel Newman: Turning to CAPEX on slide 24.
Daniel Newman: Following the closing of the Series A new issue for international, GDSH received over 1.5 billion RMB from GDSI on repayment of a shareholder loan. This is included in investment cash flow for the GDSH segment and financing cash flow for GDSI, including this repayment cash flow before financing for GDSH will be clearly positive this year in line with our financial objectives.
Daniel Newman: GDSI cash flow for 2Q24 included $448 million, or $3.2 billion RMB, the proceeds from Series A. The remaining $224 million from Series A was received by GDSI in July.
Daniel Newman: As shown on slide 25, at the end of 2Q24, the cash balance of GDSH increased to $8.4 billion RMB, and the net debt to last quarter-analyzed adjusted EBITDA multiple decreased to 7.2 times.
Daniel Newman: In order to accelerate our financial transformation, we are working on a number of asset monetization initiatives.
Laura Chen: I'll now like to turn the call back over to the company for closing remarks. Thank you once again for joining us today and we'll see you next time. Bye. This concludes today's conference call. You may now disconnect your lines. Thank you.
Daniel Newman: Our key strategic goal is to set up a REIT listed in China holding data center assets. There is strong policy support for new infrastructure REITs, and we have selected a stabilized project to move forward and are working through the regulatory approval process. This will be a first-of-a-kind transaction for data centers in China, and we are strongly committed to making it happen.
Daniel Newman: Turning to international on slide 27, at the end of 2Q24, GDSI had a cash balance of $3.1 billion RMB pro-former for the second flash of Series A proceeds.
Daniel Newman: Given the existing level of customer commitments and the strong sales pipeline, the plans raised further equity for GDSI in a Series B round. The process is already underway. There is strong interest from global investors, and we are confident that this round will set a higher benchmark for the value of our equity investment in international.
Daniel Newman: Finishing on slide 29, we are maintaining our formal guidance for FY24 Consolidated Revenue, Adjusted EBITDA and CAPEX. However, it is likely that we will raise our CAPEX guidance at the time of 3Q24 results when we have a firm review on the timing and amount of CAPEX for international.
Operator: We now like to open the call to questions.
Operator: Operator, please.
Operator: Thank you.
Operator: We will now begin the question and answer section.
Operator: To ask a question on the phone, please press star 11 and refer her name to be announced.
Operator: For the benefit of all participants on today's call, please meet yourself to one question.
Operator: If you have more questions, please re-enter the queue.
Operator: One more moment for the first question.
Operator: First question.
Yang Liu: Come from the line of Young Liu from Morgan Stanley.
Yang Liu: Please go ahead.
Yang Liu: Thanks for the opportunity to ask questions.
Yang Liu: I would like to congratulate you first on the very strong set of results.
Yang Liu: I would like to ask about the China part, the READS plan.
Yang Liu: Could management elaborate more in terms of the timing of this infrastructure READS?
Yang Liu: And also what could be the potential valuation when you inject the asset to the READS?
Yang Liu: And who could be the, what type of investor could be the buyer?
Yang Liu: And what is the current, whatever hurdle or key debate between the buyer and the company, and also between the regulator and the company?
William Huang: Yes, thank you.
William Huang: Thank you, Yang Liu, Stanley.
William Huang: I'll answer that question.
William Huang: In order to pursue this strategy, we've selected a single site with two data centers as the seed asset for the reach.
William Huang: Typical reap offerings in China, historically, have been around 2 billion R&B per transaction.
William Huang: That seems to be a size which the market is comfortable with, and we select an asset to fit with that.
William Huang: Under the reach regulations, the asset must be stabilized.
William Huang: We must own the real estate, so the asset also qualifies on that basis.
William Huang: There's a series of regulatory approvals that we need to obtain.
William Huang: We've already been working on this for over one year, and we're getting to the level where the regulatory approvals will be sorted, central government level.
William Huang: If that is successful, we will receive approval to be able to proceed with the offering, which is then valid for one year.
William Huang: We hope to reach that milestone next year.
William Huang: It's not normal to do testing the waters or pre-marketly exercise in China, but we do have an active dialogue with major financial institutions in China, because we've also been looking at pre-packaging some assets, which are not yet stabilized, as a way of creating a pipeline for the reach.
William Huang: We've received very positive feedback.
William Huang: There's a significant appetite amongst financial institutions in China to get exposure to new infrastructure, including data centers, data centers, which are green, which have very high quality internet company or cloud customers.
William Huang: We think that a substantial percentage of the offering to the public will be taken up by strategic or anchor type investors under the regulations we will be required to retain a 20%.
William Huang: There is quite a significant public listed reach sector in China. Those reach, which are real estate based, trend to trade on dividend yields, which fall within a fairly well defined range.
William Huang: If we take that range and look at it very conservatively, based on the amount of income which we think we will be able to distribute, it implies an EBITDA multiple, which...
William Huang: I think it will be clearly appreciative, compared with where we're trading if you look at our current public market value, one of some of the past bases, to strip out international at the last series a price bench mark, our China business is being valued at somewhere between 9 to 10 times, current EBITDA.
William Huang: The China sector is trading at implied EBITDA, which is a quantum higher than that, so hopefully we'll be able to capture that.
William Huang: Thank you for the questions.
Operator: One moment for the next question.
Frank Lothan: Our next question comes from the line of Frank Lothan from Raymond James, please ask your question.
Frank Lothan: Great, thank you.
Frank Lothan: Can you characterize how much of the business in mainland China is AI driven and can you give us an idea of the current impact of the Chinese economy to the demand on that base of the business.
Frank Lothan: Thanks.
William Huang: Okay, Frank, this is William.
William Huang: The first question is I think the current demand, the new demand in China currently, I think the 70% was driven by the AI type required, including the training and also inference.
William Huang: So the remaining 30% is driven by the internet company and also the traditional cloud business.
William Huang: Yeah, this is the question.
William Huang: How is the economy impacting the world?
William Huang: I think the so far, I think for the training and the cloud business, I think this is not directly impacted from current China macro environment.
William Huang: It's totally opposite, and I think this is based on a lot of the, let's say, giant.
William Huang: They are continuing to invest in the cat packs to train their own model and also try to, in China, there's a lot of the, still a lot of, there's a lot of startup company.
William Huang: It was invested by the venture capital to do the more application type, the vertical type of the AI stuff.
William Huang: So this looks like it's created a very, it's created his own, let's say, environment, right?
William Huang: So this is the, what happened in China right now?
William Huang: Thank you for the questions.
Operator: Next question, one moment please.
Sarah One: Next question comes from Sarah one from UBS, please go ahead.
Sarah One: Thank you for the opportunity to ask a question and congratulations on the solid results.
Sarah One: I have one question about international business.
Sarah One: I've just mentioned there's quite some type of needed for international business.
William Huang: And I asked what's the future financing plan, especially in the near term, as well as in the meetings, for example, the potential spin-off or IPO.
William Huang: Thank you.
William Huang: Before I answer this question, I think all the financing requirements are based on our focus for the next two or three years.
William Huang: So our target is to sub over the current order number in within the next three years.
William Huang: So this is our case.
William Huang: So in terms of the financing plan, I think I would like to let it then introduce experiment a little bit more.
William Huang: I mentioned that we've started the process for a series B rounds. We'll be raising capital once again from external investors, global investors, using a similar, similar instruments, type of security, convertible prefer shares.
William Huang: Our base case assumption is that the university's size will be similar to series A and say 600 to 800 million dollars.
William Huang: It's possible that we could increase the size.
William Huang: We do that the appetite is is there.
William Huang: But completing that offering, which we aim to do before the end of this year.
William Huang: I think that the next financing that we will undertake at our international holding company level may be measuring debt.
William Huang: Certainly intend to explore that as way of optimizing the global cost of capital international.
William Huang: At the same time, we are putting in place senior debt at the project level, usually in local currencies.
William Huang: And we are currently undertaking a large syndicated term loan for our prime Malaysian business.
William Huang: That can cover the range of different financing issues in international.
William Huang: Thank you for the questions.
Daily Lee: Next questions will come from the line of daily Lee of Bank of America securities.
Daily Lee: Please go ahead.
Daily Lee: Hi, my name is sense for taking a question.
Daily Lee: I have one question about the international business instance of a area in service is a good momentum.
Daily Lee: We took you up like 50% of the code on code and how do we see the trend in Q3 and Q4 for the area in service for the international business.
Daily Lee: In absolute value or like Q4 and Q2.
Daily Lee: Thank you.
William Huang: The earliest presentation and the prepared remarks about the timeframe for delivery of a very substantial part of the overall backlog. We currently have about 280 megawatts of AST, which is committed but not yet delivered and utilized. And we've said that that will be most of that in fact set 260 megawatts out of 280 megawatts will be delivered and utilized and revenue generating within 24 months, which is a very rapid ramp up as it implies that our revenue generating capacity will increased by 3.5 times over the next two months.
William Huang: We did not give a quarter by quarter breakdown, but as an indication over the next two quarters a second half of this year, the increase in capacity and service and the delivery and utilization will increase by a relatively small amount.
William Huang: But over the course of next year, 2025, the increase will be very substantial.
William Huang: Thank you for the questions.
Edith Lee: Our next question comes from Edith and Lee.
Edith Lee: I'll Jeffrey, please go ahead.
Edith Lee: Thank you for the question.
Edith Lee: Congratulations again.
Edith Lee: I have two questions.
Edith Lee: Number one is that for your power capacity or power secured in Southeast Asia, I think that amount increased from 711 megawatts from your first quarter presentation to 797.
Edith Lee: So where that incremental is coming from, which location is coming from?
Edith Lee: And number two is you said that you want to take international technology customer and bathroom.
William Huang: And can you discuss your customers in Malaysia is just still a single company right now and what do you expect that to change or situation to change or happen over the next couple of quarters?
William Huang: Yes.
William Huang: The additional plots contiguous with our existing sites and where there is power in the structure in place and we were able to up size the amount of power that we were able to obtain through that through that infrastructure.
William Huang: And with the second question, I think I said ask about the customer maintenance of Southeast Asia.
William Huang: Currently, we already have five customers from both from China and international, all like the industry, the technology leader.
William Huang: So I think we are very, very focused on trying to diversify the customer.
William Huang: This is always our target, right?
William Huang: So the current mix is let's say around 70 percent from China, it's not a single customer, it's three of them, and another is also international customer.
William Huang: But based on our current focus, I think in the next 12 months, the international customer will increase the percentage as well.
William Huang: Ultimately, I think it will be 50-50 in this region.
William Huang: Can I follow up with one quick question?
William Huang: So you said that there are five customers including Chinese, international, and then you said that you won the big international customer in Indonesia.
William Huang: So can I assume that you have one international customer in Indonesia, or just one customer in Indonesia at that international, and that you have two customers in Malaysia and that's China and international.
William Huang: Yes, Indonesia is international, and four in your whole is Chinese and international.
William Huang: You're right.
William Huang: Okay, thank you.
William Huang: Thank you for the questions.
Louis Chang: Next questions come from Delay, or Louis Chang from City, please go ahead.
Louis Chang: Thank you, management, particularly in your questions.
Louis Chang: Congratulations on the strongest stats with like Salad in the National Girl Visiting and then the domestic recovery.
Louis Chang: I actually got up to quick question.
Louis Chang: The first one is for the domestic one.
Louis Chang: I think that like the net moving for this quarter is very encouraging, and the MSL is trying to help.
Louis Chang: Like how share we think about the pays of the moving and MSL recovery I had, and more importantly, the sustainability of the demand.
Louis Chang: And then the second question is for the national.
Louis Chang: I think some regional or global peers also have their planning is at all, and for seeing like increasing DC supply, what is your strategy in SEA, and what are the like your foundation over the regional or the global peers, and then also one more thing on like the supporting infrastructures like electricity grid, like we don't sound stable in the near term supply growth.
Louis Chang: Thank you.
William Huang: So I'll begin with your questions about China.
William Huang: So the moving, yes, is a very clear step up in one Q23 compared with the level of moving over the past 12th course, and that was continued.
William Huang: In fact, it was even higher in the second quarter. This is partly a result of the contracts we signed in the last 12 or 18 months, which have faster moving schedules than those that we signed previously.
William Huang: And also the beginning of a pickup in the move-in by customers whose commitments have been in the backlog for longer.
William Huang: So based on the contractual terms, we're also what we currently know about our customers' intentions.
William Huang: We expect the current level of moving to continue through next year's part as far as we have visibility, which I think is very encouraging.
William Huang: For the MSR, we look at MSR on a quarterly basis and compare the rate of change with the same quarter of the prior year. And so over the past few quarters on average, the MSR has decreased by a little over 2%.
William Huang: And as we go into next year, there will be further decrease for probably less than the decrease during 24 as compared with the 23.
William Huang: So it's also encouraging to see that the MSR is blossoming up.
William Huang: The second question is about our strategy in this region, right?
William Huang: In a energy hall.
William Huang: So I think the number one, I think we are, everybody know we are the first to move in this region.
William Huang: And we still, in the next three years, I think that we still enjoy the first to move advantage, because the time is marking, and the demand profile still will continue to maintain a very strong level.
William Huang: So even the last three years, I think still the market sites will increase, still continue to decrease.
William Huang: So I don't think it's in short in the next five years, it will be another issue for all the players in this region.
William Huang: So I think this is based on our understanding of the market.
William Huang: So of course, if we talk about the after five years, whatever will happen, I think our strategy is the number one, I think we will, we will look at not only this region market.
William Huang: We are also start, we already start to develop that region, other market in this region.
William Huang: Everybody know GDS is a market creator, so we are not a forum.
William Huang: So I think we will give you another surprise in the next three years.
Operator: Thank you for the questions, one more moment for the next questions.
Young Liu: Full up questions from Young Liu of Born and Stanley, please go ahead.
Young Liu: Thanks for the opportunity to ask another question.
Young Liu: One more thing from my side is regarding the REITs playing China.
Young Liu: Could you please talk about whether the REITs will be a public-traded REITs, or it's a private REITs, or actually you are targeting both.
Young Liu: And another thing is what could be the estimated debt reduction if you can deliver one REITs project to the inject one asset to the REITs.
William Huang: The REITs listed will be listed on one of the stock exchanges in China and it will be offered publicly.
William Huang: The typical REIT offering site I mentioned earlier was about 2 billion RMB. As a guideline, I would say that transaction that size, we would expect to deconsolidate around 1 billion RMB of debt.
William Huang: If we sell 80% of the equity, then we will receive a cash proceeds for the disposal of 80% at the valuation of the offering.
William Huang: So the combined effect should be that it helps to increase our equity, decrease net debt, and also increase our equity.
William Huang: So the REITs will only be 2 billion RMB.
William Huang: That's a single transaction.
William Huang: Of course, once the REITs established, the possibility is there for us to drop further assets into it.
William Huang: That's what we would hope to do over the longer term.
William Huang: But for now, our focus is just on achieving the first step, which is to set up this vehicle.
William Huang: You asked about privately play history.
William Huang: I mentioned earlier that we're working on pre-packaging some assets.
William Huang: That will be privately placed.
William Huang: It takes the former asset back.
William Huang: Security, technically it is, this is all the stock exchange, but it's easier to think of it as a privately placed security.
William Huang: It's a stepping stone in terms of packaging assets so that it is ready to be injected into a REIT when the assets are stabilized.
William Huang: Thank you.
William Huang: And one more question regarding the international business.
William Huang: It's very encouraging to see the big new orders.
William Huang: Could you please update us what is IRR trend for the big new orders?
William Huang: Is it stable or rising a little bit or declining a little bit? What's the trend compared with the previous orders?
William Huang: I'd say it's very consistent, a set of maybe easier to talk about like a development yield rather than IRR, and the development yield is in the low teams, which is quite acceptable to us in terms of a return on our invested capital, and these are very high quality customer contracts, they are, I would say US Standard, 10 to 15 years, some of them are priced in US dollars, some of them have escalators, so it's very high quality business.
William Huang: Thank you for the questions.
Jonathan Atkin: Next questions, come from Delilah, Jonathan Atkin from ABC Capital Market to please host your question.
Jonathan Atkin: Thanks, so I just got you a quarter, what about China, and then what about international?
Jonathan Atkin: So in China, I was just interested in any comments you would have about the contract, renewals, and insure an outlook for the remainder of this year, it looks like you've got a fairly sizable amount coming up for renewal in second half of this year, 12.1% of total area committed.
Jonathan Atkin: And then internationally, I would agree with William's comments about your whore, and I think you have somewhat of an comprehensive, or literally mover advantage, but something that I was interested in, because you were one of the winners of the CFA process, and is there any visibility in terms of timeline as to when you might get that project underway, and when that might be ready for service, or is it too soon to have you on that?
William Huang: Thank you.
William Huang: The toilet is down on the first part of your question about China.
William Huang: You're right, you have a large amount of contract renewals in the second half of the year, but we look at the quantum of churn. We've measured it in terms of area utilized, the churn has a percentage of out total area utilized. And over the past six quarters, it's been running at an annualized rate of about five percent, which I believe is relatively low by international stands in, you know, the absolute terms is averaged about 5,000 square meters per quarter. And the second half of this year, it will continue at about that rate.
William Huang: But if we look into next year, I think the three to five percent annual churn rate would be normal for us.
William Huang: And we don't currently actually have any visibility on any churn, which is exceptional.
William Huang: Those numbers represent really quite a small percentage of the total amount of capacity, which is coming up for contract renewals, as you pointed out.
William Huang: John, I think the Singapore project could be, you know, in Singapore, so I think it's very difficult.
William Huang: What number one is getting the CFA, it's very difficult, right?
William Huang: The second, now that we've gotten, we win the CFA, but the second question is the issue is to get to the very, very good location of the land is more difficult, right?
William Huang: So, fortunately, we are in the process to acquire a land by now.
William Huang: I think we believe it's in the process and should be down in the next couple of months, a competitive process.
William Huang: And we aim to deliver before the end of the 2036 to launch the service in the market.
William Huang: So, that's a pretty firm schedule.
Operator: Thank you for the questions.
Operator: In the interest of time, that concludes the Q&A session.
Operator: I'll now like to turn the call back over to the company for closing remarks.
Operator: Thank you once again for joining us today and we'll see you next time.
Operator: Bye.
Operator: This concludes today's conference call.
Operator: You may now disconnect your lines.
Operator: Thank you.