Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2021 | |
Document and Entity Information | ||
Document Type | 20-F | |
Document Registration Statement | false | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2023 | |
Document Transition Report | false | |
Document Shell Company Report | false | |
Entity File Number | 001-35126 | |
Entity Registrant Name | VNET Group, Inc. | |
Entity Incorporation, State or Country Code | E9 | |
Entity Address, Address Line One | Guanjie Building Southeast 1st Floor | |
Entity Address, Address Line Two | 10# Jiuxianqiao East Road | |
Entity Address, Address Line Three | Chaoyang District | |
Entity Address, City or Town | Beijing | |
Entity Address, Postal Zip Code | 100016 | |
Entity Address, Country | CN | |
Title of 12(b) Security | American depositary shares, each representing six Class A ordinary shares, par value US$0.00001 per share | |
Trading Symbol | VNET | |
Security Exchange Name | NASDAQ | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
ICFR Auditor Attestation Flag | true | |
Financial Statement error correction | false | |
Document Accounting Standard | U.S. GAAP | |
Entity Shell Company | false | |
Auditor Firm ID | 1186 | 1408 |
Auditor Name | KPMG Huazhen LLP | Ernst & Young Hua Ming LLP |
Auditor Location | Beijing, China | Shanghai, the People’s Republic of China |
Entity Central Index Key | 0001508475 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Business Contact | ||
Document and Entity Information | ||
Entity Address, Address Line One | Guanjie Building, Southeast 1st Floor | |
Entity Address, Address Line Two | 10# Jiuxianqiao East Road | |
Entity Address, Address Line Three | Chaoyang District | |
Entity Address, City or Town | Beijing | |
Entity Address, Postal Zip Code | 100016 | |
Entity Address, Country | CN | |
Contact Personnel Name | Mr. Qiyu Wang | |
City Area Code | 86 | |
Local Phone Number | 10 8456-2121 | |
Common Class A | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 1,513,609,283 | |
Common Class B | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 30,721,723 | |
Common Class C | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 60,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 2,243,537 | $ 315,996 | ¥ 2,661,321 |
Restricted cash | 2,854,568 | 402,057 | 327,673 |
Accounts and notes receivable (net of allowance for doubtful debt of RMB134,569 and RMB188,356 as of December 31, 2022 and 2023, respectively) | 1,715,975 | 241,690 | 1,763,693 |
Short-term investments | 356,820 | 50,257 | |
Prepaid expenses and other current assets | 2,375,341 | 334,560 | 2,147,500 |
Total current assets | 9,823,478 | 1,383,608 | 7,052,276 |
Non-current assets: | |||
Property and equipment, net | 13,024,393 | 1,834,447 | 11,964,498 |
Intangible assets, net | 1,383,406 | 194,849 | 1,497,131 |
Land use rights, net | 602,503 | 84,861 | 576,020 |
Operating lease right-of-use assets, net | 4,012,329 | 565,125 | 3,503,925 |
Goodwill net | 1,364,191 | ||
Restricted cash | 882 | 124 | 500 |
Deferred tax assets, net | 247,644 | 34,880 | 196,098 |
Long-term investments, net | 757,949 | 106,755 | 242,194 |
Other non-current assets | 533,319 | 75,116 | 551,572 |
Total non-current assets | 20,562,425 | 2,896,157 | 19,896,129 |
Total assets | 30,385,903 | 4,279,765 | 26,948,405 |
Current liabilities: | |||
Accounts and notes payable (including amounts of Consolidated VIEs without recourse to the Company of RMB483,030 and RMB493,837 as of December 31, 2022 and 2023, respectively) | 696,177 | 98,054 | 713,628 |
Short-term bank borrowings (including amounts of Consolidated VIEs without recourse to the Company of RMB30,000 as of December 31, 2023) | 30,000 | 4,225 | |
Accrued expenses and other payables (including amounts of Consolidated VIEs without recourse to the Company of RMB1,488,031 and RMB1,616,423 as of December 31, 2022 and 2023, respectively) | 2,783,102 | 391,992 | 2,410,479 |
Advances from customers (including amounts of Consolidated VIEs without recourse to the Company of RMB1,157,963 and RMB1,605,247 as of December 31, 2022 and 2023, respectively) | 1,605,247 | 226,094 | 1,157,963 |
Deferred revenue (including amounts of Consolidated VIEs without recourse to the Company of RMB84,775 and RMB83,546 as of December 31, 2022 and 2023, respectively) | 95,477 | 13,448 | 95,078 |
Income taxes payable (including amounts of Consolidated VIEs without recourse to the Company of RMB25,188 and RMB13,531 as of December 31, 2022 and 2023, respectively) | 35,197 | 4,957 | 42,017 |
Current portion of long-term borrowings (including amounts of Consolidated VIEs without recourse to the Company of RMB417,442 and RMB544,803 as of December 31, 2022 and 2023, respectively) | 723,325 | 101,878 | 484,020 |
Current portion of finance lease liabilities (including amounts of Consolidated VIEs without recourse to the Company of RMB165,221 and RMB97,388 as of December 31, 2022 and 2023, respectively) | 115,806 | 16,311 | 206,260 |
Current portion of deferred government grants (including amounts of Consolidated VIEs without recourse to the Company of RMB3,646 and RMB8,062 as of December 31, 2022 and 2023, respectively) | 8,062 | 1,136 | 3,646 |
Current portion of operating lease liabilities (including amounts of Consolidated VIEs without recourse to the Company of RMB655,663 and RMB754,935 as of December 31, 2022 and 2023, respectively) | 780,164 | 109,884 | 674,288 |
Convertible promissory notes | 4,208,495 | 592,754 | 537,778 |
Total current liabilities | 11,437,132 | 1,610,886 | 6,332,085 |
Non-current liabilities: | |||
Long-term borrowings (including amounts of Consolidated VIEs without recourse to the Company of RMB1,861,545 and RMB2,464,811 as of December 31, 2022 and 2023, respectively) | 5,113,521 | 720,224 | 3,049,856 |
Convertible promissory notes | 1,769,946 | 249,292 | 5,859,259 |
Derivative liability | 188,706 | 26,579 | |
Non-current portion of finance lease liabilities (including amounts of Consolidated VIEs without recourse to the Company of RMB615,309 and RMB720,954 as of December 31, 2022 and 2023, respectively) | 1,159,525 | 163,316 | 1,047,640 |
Unrecognized tax benefits (including amounts of Consolidated VIEs without recourse to the Company of RMB86,799 and RMB98,082 as of December 31, 2022 and 2023, respectively) | 98,457 | 13,867 | 87,174 |
Deferred tax liabilities (including amounts of Consolidated VIEs without recourse to the Company of RMB149,475 and RMB139,174 as of December 31, 2022 and 2023, respectively) | 688,362 | 96,954 | 682,580 |
Deferred government grants (including amounts of Consolidated VIEs without recourse to the Company of RMB2,726 and RMB11,862 as of December 31, 2022 and 2023, respectively) | 145,112 | 20,439 | 2,672 |
Non-current portion of operating lease liabilities (including amounts of Consolidated VIEs without resource to the Company of RMB2,872,323 and RMB3,230,506 as of December 31, 2022 and 2023, respectively) | 3,270,759 | 460,677 | 2,905,283 |
Total non-current liabilities | 12,434,388 | 1,751,348 | 13,634,464 |
Total liabilities | 23,871,520 | 3,362,234 | 19,966,549 |
Commitments and contingencies | |||
Shareholders' equity: | |||
Additional paid-in capital | 17,291,312 | 2,435,430 | 15,239,926 |
Accumulated other comprehensive income (loss) | (14,343) | (2,020) | 11,022 |
Statutory reserves | 80,615 | 11,354 | 77,996 |
Accumulated deficit | (11,016,323) | (1,551,617) | (8,369,868) |
Treasury stock | (326,953) | (46,050) | (349,523) |
Total VNET Group, Inc. shareholders' equity | 6,014,415 | 847,112 | 6,609,613 |
Noncontrolling interest | 499,968 | 70,419 | 372,243 |
Total shareholders' equity | 6,514,383 | 917,531 | 6,981,856 |
Total liabilities and shareholders' equity | 30,385,903 | 4,279,765 | 26,948,405 |
Related Party [Member] | |||
Current assets: | |||
Amounts due from related parties | 277,237 | 39,048 | 152,089 |
Current liabilities: | |||
Amounts due to related parties (including amounts of Consolidated VIEs without recourse to the Company of RMB6,928 and RMB356,080 as of December 31, 2022 and 2023, respectively) | 356,080 | 50,153 | 6,928 |
Common Class A | |||
Shareholders' equity: | |||
Ordinary shares | 103 | 14 | 56 |
Common Class B | |||
Shareholders' equity: | |||
Ordinary shares | ¥ 4 | $ 1 | ¥ 4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 $ / shares |
Allowance for doubtful debt | ¥ 188,356 | ¥ 134,569 | ||
Accounts and notes payable of the Consolidated VIEs without recourse to the primary beneficiaries | 696,177 | $ 98,054 | 713,628 | |
Accrued expenses and other payables of the Consolidated VIEs without recourse to the primary beneficiaries | 2,783,102 | 391,992 | 2,410,479 | |
Advance from customers of the Consolidated VIEs without recourse to the primary beneficiaries | 1,605,247 | 226,094 | 1,157,963 | |
Deferred revenue of the Consolidated VIEs without recourse to the primary beneficiaries | 95,477 | 13,448 | 95,078 | |
Income tax payables of the Consolidated VIEs without recourse to the primary beneficiaries | 35,197 | 4,957 | 42,017 | |
Current portion of long-term borrowings of the Consolidated VIEs without recourse to the primary beneficiaries | 334,511 | 289,941 | ||
Current portion of finance lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries. | 115,806 | 16,311 | 206,260 | |
Deferred government grants of the Consolidated VIEs without recourse to the primary beneficiaries | 8,062 | 1,136 | 3,646 | |
Current portion of operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 780,164 | 109,884 | 674,288 | |
Long-term bank borrowings of the Consolidated VIEs without recourse to the primary beneficiaries | 5,113,521 | 720,224 | 3,049,856 | |
Non-current portion of finance lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 1,159,525 | 163,316 | 1,047,640 | |
Unrecognized tax benefits of the Consolidated VIEs without recourse to the primary beneficiaries | 98,457 | 13,867 | 87,174 | |
Deferred tax liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 688,362 | 96,954 | 682,580 | |
Deferred government grants of the Consolidated VIEs without recourse to the primary beneficiaries | 145,112 | 20,439 | 2,672 | |
Non-current portion of operating lease liabilities of the Consolidated VIEs without resource to the primary beneficiaries | 3,270,759 | 460,677 | 2,905,283 | |
Related Party [Member] | ||||
Amounts due to related parties of the consolidated VIEs without resource to the primary beneficiaries | 356,080 | $ 50,153 | 6,928 | |
Variable Interest Entity, Primary Beneficiary [Member] | ||||
Accounts and notes payable of the Consolidated VIEs without recourse to the primary beneficiaries | 493,837 | 483,030 | ||
Short-term bank and other borrowings of the Consolidated VIEs without recourse to the primary beneficiaries | 30,000 | |||
Accrued expenses and other payables of the Consolidated VIEs without recourse to the primary beneficiaries | 1,616,423 | 1,488,031 | ||
Advance from customers of the Consolidated VIEs without recourse to the primary beneficiaries | 1,605,247 | 1,157,963 | ||
Deferred revenue of the Consolidated VIEs without recourse to the primary beneficiaries | 83,546 | 84,775 | ||
Income tax payables of the Consolidated VIEs without recourse to the primary beneficiaries | 13,531 | 25,188 | ||
Current portion of long-term borrowings of the Consolidated VIEs without recourse to the primary beneficiaries | 544,803 | 417,442 | ||
Current portion of finance lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries. | 97,388 | 165,221 | ||
Deferred government grants of the Consolidated VIEs without recourse to the primary beneficiaries | 8,062 | 3,646 | ||
Current portion of operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 754,935 | 655,663 | ||
Long-term bank borrowings of the Consolidated VIEs without recourse to the primary beneficiaries | 2,464,811 | 1,861,545 | ||
Non-current portion of finance lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 720,954 | 615,309 | ||
Unrecognized tax benefits of the Consolidated VIEs without recourse to the primary beneficiaries | 98,082 | 86,799 | ||
Deferred tax liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 139,174 | 149,475 | ||
Deferred government grants of the Consolidated VIEs without recourse to the primary beneficiaries | 11,862 | 2,726 | ||
Non-current portion of operating lease liabilities of the Consolidated VIEs without resource to the primary beneficiaries | 3,230,506 | 2,872,323 | ||
Variable Interest Entity, Primary Beneficiary [Member] | Related Party [Member] | ||||
Amounts due to related parties of the consolidated VIEs without resource to the primary beneficiaries | ¥ 356,080 | ¥ 6,928 | ||
Common Class A | ||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||
Ordinary shares, shares authorized (in shares) | shares | 2,698,935,000 | 2,698,935,000 | 1,199,490,000 | |
Ordinary shares, shares issued (in shares) | shares | 1,513,609,283 | 1,513,609,283 | 859,932,323 | |
Ordinary shares, shares outstanding (in shares) | shares | 1,513,609,283 | 1,513,609,283 | 859,932,323 | |
Common Class B | ||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | 0.00001 | ||
Ordinary shares, shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | 300,000,000 | |
Ordinary shares, shares issued (in shares) | shares | 30,721,723 | 30,721,723 | 30,721,723 | |
Ordinary shares, shares outstanding (in shares) | shares | 30,721,723 | 30,721,723 | 30,721,723 | |
Common Class C | ||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||
Ordinary shares, shares authorized (in shares) | shares | 60,000 | 60,000 | 60,000 | |
Ordinary shares, shares issued (in shares) | shares | 60,000 | 60,000 | 60,000 | |
Ordinary shares, shares outstanding (in shares) | shares | 60,000 | 60,000 | 60,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
Net revenues | ||||
Hosting and related services | ¥ 7,412,930 | $ 1,044,089 | ¥ 7,065,232 | ¥ 6,189,801 |
Hosting and related services | (6,120,445) | (862,047) | (5,706,976) | (4,751,771) |
Gross profit | 1,292,485 | 182,042 | 1,358,256 | 1,438,030 |
Operating income (expenses) | ||||
Operating income | 106,273 | 14,968 | 60,013 | |
Sales and marketing expenses | (266,207) | (37,494) | (311,917) | (255,400) |
Research and development expenses | (322,220) | (45,384) | (306,842) | (188,489) |
General and administrative expenses | (541,850) | (76,318) | (642,945) | (842,354) |
Allowance for doubtful debt | (368,505) | (51,903) | (35,409) | (18,399) |
Impairment of loan receivable to potential investee | ¥ | (2,807) | |||
Impairment of long-lived assets | (506,686) | (71,365) | 0 | (109,267) |
Impairment of goodwill | (1,364,191) | (192,142) | 0 | |
Total operating expenses | (3,263,386) | (459,638) | (1,237,100) | (1,416,716) |
Operating profit (loss) | (1,970,901) | (277,596) | 121,156 | 21,314 |
Interest income | 41,802 | 5,888 | 31,574 | 31,897 |
Interest expense | (312,172) | (43,969) | (273,305) | (334,950) |
Other income | 27,344 | 3,851 | 17,328 | 33,923 |
Other expenses | (16,086) | (2,266) | (26,599) | (22,700) |
Changes in the fair value of financial liabilities | (165,930) | (23,371) | 22,626 | 829,149 |
Impairment of long-term investments | (11,166) | (1,573) | (3,495) | |
Foreign exchange gain (loss), net | (78,965) | (11,122) | (523,235) | 110,036 |
Income (loss) before income taxes and (loss) gain from equity method investments | (2,486,074) | (350,158) | (630,455) | 665,174 |
Income tax expenses | (114,374) | (16,109) | (133,464) | (111,407) |
(Loss) gain from equity method investments | 3,279 | 462 | 1,925 | (38,666) |
Net income (loss) | (2,597,169) | (365,805) | (761,994) | 515,101 |
Net income attributable to noncontrolling interest | (46,667) | (6,573) | (13,958) | (15,003) |
Net income (loss) attributable to VNET Group, Inc. | ¥ (2,643,836) | $ (372,378) | ¥ (775,952) | ¥ 500,098 |
Earning (loss) per share: | ||||
Basic | (per share) | ¥ (2.93) | $ (0.41) | ¥ (0.87) | ¥ 0.57 |
Diluted | (per share) | ¥ (2.93) | $ (0.41) | ¥ (0.87) | ¥ (0.36) |
Shares used in earning (loss) per share computation: | ||||
Basic | 901,143,138 | 901,143,138 | 886,817,620 | 865,352,554 |
Diluted | 901,143,138 | 901,143,138 | 886,817,620 | 911,591,433 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | ¥ (2,597,169) | $ (365,805) | ¥ (761,994) | ¥ 515,101 |
Other comprehensive (loss) income, net of tax of nil | ||||
Foreign currency translation adjustments, net of tax of nil | (25,365) | (3,573) | 101,465 | (34,908) |
Other comprehensive (loss) income, net of tax of nil | (25,365) | (3,573) | 101,465 | (34,908) |
Comprehensive income (loss) | (2,622,534) | (369,378) | (660,529) | 480,193 |
Comprehensive income attributable to noncontrolling interest | (46,667) | (6,573) | (13,958) | (15,003) |
Comprehensive income (loss) attributable to VNET Group, Inc. | ¥ (2,669,201) | $ (375,951) | ¥ (674,487) | ¥ 465,190 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
Other comprehensive (loss) income, tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income (loss) | ¥ (2,597,169) | $ (365,805) | ¥ (761,994) | ¥ 515,101 |
Adjustments to reconcile net income (loss) to net cash generated from operating activities: | ||||
Foreign exchange (gain) loss, net | 78,965 | 11,122 | 523,235 | (110,036) |
Depreciation and amortization | 1,807,339 | 254,559 | 1,595,942 | 1,267,578 |
Loss on disposal of property and equipment and intangible assets | 3,198 | 450 | 15,592 | 6,339 |
Allowance for doubtful debt | 368,505 | 51,903 | 50,409 | 18,399 |
Share-based compensation expense | 35,296 | 4,971 | 118,170 | 320,010 |
Impairment of loan receivable to potential investee | 2,807 | |||
Deferred income tax expenses (benefits) | (43,152) | (6,078) | 17,887 | 325 |
Loss (gain) from equity method investments | (3,279) | (462) | (1,925) | 38,666 |
Distribution received from an equity method investment | 15,232 | |||
Gain from disposal of subsidiaries | (495) | (70) | (1,388) | (17,153) |
Impairment of long-lived assets | 506,686 | 71,365 | 109,267 | |
Impairment of goodwill | 1,364,191 | 192,142 | 0 | |
Impairment of long-term investments | 11,166 | 1,573 | 3,495 | |
Lease expense | 433,121 | 61,004 | 508,818 | 557,865 |
Changes in the fair value of financial liabilities | 165,930 | 23,371 | (22,626) | (829,149) |
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: | ||||
Accounts and notes receivable | (5,766) | (812) | (381,194) | (533,323) |
Prepaid expenses and other current assets | (365,762) | (51,517) | 621,973 | 73,639 |
Amounts due from related parties | (2,886) | (406) | (6,997) | (17,502) |
Accounts and notes payables | (24,430) | (3,441) | 220,129 | 195,728 |
Unrecognized tax benefits | 11,283 | 1,589 | 9,601 | 8,877 |
Accrued expenses and other payables | 200,059 | 28,180 | 226,893 | 315,989 |
Deferred revenue | 399 | 56 | 39,383 | (7,550) |
Advances from customers | 447,284 | 62,999 | 116,061 | 307 |
Income taxes payable | (6,820) | (961) | (1,753) | 14,742 |
Deferred government grants | 155,333 | 21,878 | 5,000 | 93 |
Amounts due to related parties | 6,131 | 864 | (992) | 7,431 |
Operating lease liabilities | (481,647) | (67,839) | (465,242) | (554,023) |
Net cash generated from operating activities | 2,063,480 | 290,635 | 2,440,214 | 1,387,922 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of property and equipment | (2,967,447) | (417,956) | (2,995,608) | (2,691,928) |
Purchases of intangible assets | (50,906) | (7,170) | (57,295) | (42,285) |
Purchases of land use rights | (42,275) | (5,954) | (47,704) | (91,744) |
Proceeds from disposal of property and equipment | 31,703 | 4,465 | 6,132 | 10,220 |
Proceeds from disposal of subsidiaries, net | 12,704 | 1,790 | 300 | |
Payments for short-term investments | (503,276) | (70,885) | (64,605) | |
Payment of loans to third parties | (1,600) | (225) | (217,586) | (16,474) |
Payment of loans to related parties | (115,048) | (16,205) | (500) | (75,872) |
Receipt of loans to third parties | 93,996 | 13,239 | 5,000 | 17,010 |
Receipt of loans to a related party | 9,800 | 1,380 | ||
Proceeds received from maturity of short-term investments | 144,516 | 20,355 | 347,520 | |
Proceeds from disposal of long-term investments | 120 | |||
Payments for long-term investments | (517,278) | (72,857) | (213,000) | (5,000) |
Prepayments and deposits for acquisition of data center | (36,000) | (679,941) | ||
Collection of deposit for acquisition of data center | 30,000 | |||
Payments for acquisitions, net of cash acquired | 2 | (2,991) | (509,634) | |
Net cash used in investing activities | (3,905,109) | (550,023) | (3,559,252) | (3,772,613) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from exercise of stock options | 472 | |||
Proceeds from issuance of ordinary shares (Note 27) | 2,122,123 | 298,895 | (131) | |
Payment of issuance costs of ordinary shares | (1,880) | (265) | ||
Proceeds from loan from a related party (Note 24) | 350,000 | 49,296 | ||
Proceeds from long-term bank borrowings | 1,813,927 | 255,486 | 1,099,893 | 1,628,438 |
Proceeds from other long-term borrowings | 1,020,008 | 143,665 | 282,000 | 220,000 |
Repayments of long-term bank borrowings | (292,625) | (41,215) | (238,305) | (179,455) |
Repayments of short-term bank borrowings | (34,000) | |||
Repayments and deposits for other long-term borrowings | (268,124) | (37,764) | (207,089) | (175,123) |
Payments for purchase of property and equipment through finance leases | (210,902) | (29,705) | (231,046) | (579,660) |
Proceeds from loan from a related party (Note 24) | 10,122 | 1,426 | ||
Repayment of loans from third parties | (78,000) | (10,986) | (66,884) | |
Contribution from noncontrolling interest in subsidiaries | 11,223 | |||
Payments for share repurchase and cancellation | (1,701,807) | |||
Refund of prepayment for share repurchase plan | 7,317 | 1,031 | ||
Repayment of notes payable | (1,945,620) | |||
Profit distribution to noncontrolling interest | (11,413) | (1,607) | (272) | |
Net cash generated from financing activities | 3,941,134 | 555,097 | 2,298,080 | 967,577 |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | 9,988 | 1,407 | 101,979 | 9,150 |
Net (decrease) increase in cash and cash equivalents and restricted cash | 2,109,493 | 297,116 | 1,281,021 | (1,407,964) |
Cash and cash equivalents and restricted cash at beginning of year | 2,989,494 | 421,061 | 1,708,473 | 3,116,437 |
Cash and cash equivalents and restricted cash at end of year | 5,098,987 | 718,177 | 2,989,494 | 1,708,473 |
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets | ||||
Cash and cash equivalents | 2,243,537 | 315,996 | 2,661,321 | 1,372,481 |
Restricted cash-current | 2,854,568 | 402,057 | 327,673 | 327,767 |
Restricted cash-non-current | 882 | 124 | 500 | 8,225 |
Cash and cash equivalents and restricted cash at end of year | 5,098,987 | 718,177 | 2,989,494 | 1,708,473 |
Supplemental disclosures of cash flow information: | ||||
Income taxes paid | (145,605) | (20,508) | (159,784) | (82,995) |
Interest paid | (251,066) | (35,362) | (222,411) | (259,765) |
Interest received | 41,814 | 5,889 | 31,758 | 30,121 |
Supplemental disclosures of non-cash activities: | ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 952,999 | 134,227 | 944,148 | 2,080,748 |
Purchase of property and equipment through finance leases | 265,974 | 37,462 | 144,455 | 284,007 |
Purchase of property and equipment included in accrued expenses and other payables | 270,909 | 38,157 | 457,282 | 321,140 |
Purchase of intangible assets included in accrued expenses and other payables | 3,497 | 493 | 4,768 | 3,910 |
Payables for issuance cost of ordinary shares included in accrued expenses and other payables | 35,840 | 5,048 | ||
Asset acquistion settled with equity interests of a subsidiary (Note 4) | 116,996 | 16,479 | ||
Consideration payable for acquisition of noncontrolling interest included in accrued expenses and other payables | 47,549 | 6,697 | ||
2025 Convertible Notes | ||||
Adjustments to reconcile net income (loss) to net cash generated from operating activities: | ||||
Changes in the fair value of financial liabilities | 21,816 | 22,626 | 829,149 | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Repurchase of 2025 Convertible Notes (Note 19) | (529,175) | (74,533) | ||
2026 Convertible Notes | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of 2027 Convertible Notes, net of issuance cost | ¥ 3,790,396 | |||
Proceeds from short-term bank borrowings | ¥ 30,000 | $ 4,225 | ||
2027 Convertible Notes | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of 2027 Convertible Notes, net of issuance cost | ¥ 1,592,627 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Ordinary shares CNY (¥) shares | Ordinary shares USD ($) shares | Treasury stock CNY (¥) | Treasury stock USD ($) | Additional paid-in capital CNY (¥) | Additional paid-in capital USD ($) | Series A perpetual convertible preferred shareholders CNY (¥) | Accumulated other comprehensive loss CNY (¥) | Accumulated other comprehensive loss USD ($) | Statutory reserves CNY (¥) | Statutory reserves USD ($) | Accumulated deficit CNY (¥) | Accumulated deficit USD ($) | Total VNET Group, Inc. shareholders' equity CNY (¥) | Total VNET Group, Inc. shareholders' equity USD ($) | Noncontrolling interest CNY (¥) | Noncontrolling interest USD ($) | CNY (¥) shares | USD ($) shares |
Beginning Balance (in shares) at Dec. 31, 2020 | shares | 817,959,713 | 817,959,713 | |||||||||||||||||
Beginning balance at Dec. 31, 2020 | ¥ 56 | ¥ 13,083,119 | ¥ 1,047,468 | ¥ (55,535) | ¥ 74,462 | ¥ (7,235,113) | ¥ 6,564,934 | ¥ 332,546 | ¥ 6,897,480 | ||||||||||
Treasury stock, beginning balance at Dec. 31, 2020 | ¥ (349,523) | ||||||||||||||||||
Consolidated net income (loss) | 500,098 | 500,098 | 15,003 | 515,101 | |||||||||||||||
Contribution by noncontrolling interest | 11,223 | 11,223 | |||||||||||||||||
Conversion of perpetual convertible preferred shares and cumulative dividend | ¥ 3 | 1,076,208 | ¥ (1,047,468) | (106) | (28,637) | ||||||||||||||
Conversion of perpetual convertible preferred shares and cumulative dividend (in shares) | shares | 54,507,816 | 54,507,816 | |||||||||||||||||
Foreign exchange difference | (22,773) | (22,773) | (22,773) | ||||||||||||||||
Conversion of convertible promissory notes | ¥ 3 | 1,639,803 | 1,639,806 | 1,639,806 | |||||||||||||||
Conversion of convertible promissory notes (in shares) | shares | 42,401,010 | 42,401,010 | |||||||||||||||||
Share repurchase | ¥ (3) | (866,400) | (12,029) | (826,458) | (1,704,890) | (1,704,890) | |||||||||||||
Share repurchase (in shares) | shares | (48,634,493) | (48,634,493) | |||||||||||||||||
Share-based compensation | 264,854 | 264,854 | ¥ 264,854 | ||||||||||||||||
Issuance of new shares for share option exercised and restricted share units vested | ¥ 1 | (1) | |||||||||||||||||
Issuance of new shares for share option exercised and restricted share units vested (in shares) | shares | 16,680,000 | 16,680,000 | |||||||||||||||||
Shares issued to depositary bank (in shares) | shares | 7,800,000 | 7,800,000 | 7,800,000 | 7,800,000 | |||||||||||||||
Appropriation of dividend | (272) | (272) | ¥ (272) | ||||||||||||||||
Share options exercised | 472 | 472 | 472 | ||||||||||||||||
Share options exercised (in shares) | shares | 86,862 | 86,862 | |||||||||||||||||
Restricted share units vested (shares) | shares | 5,929,122 | 5,929,122 | |||||||||||||||||
Settlement of share options and restricted share units with shares held by depository bank (in shares) | shares | (6,015,984) | (6,015,984) | |||||||||||||||||
Treasury stock, ending balance at Dec. 31, 2021 | (349,523) | ||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2021 | shares | 890,714,046 | 890,714,046 | |||||||||||||||||
Ending balance at Dec. 31, 2021 | ¥ 60 | 15,198,055 | (90,443) | 74,462 | (7,590,382) | 7,242,229 | 358,772 | 7,601,001 | |||||||||||
Consolidated net income (loss) | (775,952) | (775,952) | 13,958 | (761,994) | |||||||||||||||
Foreign exchange difference | 101,465 | 101,465 | 101,465 | ||||||||||||||||
Disposal of noncontrolling interest | (487) | (487) | |||||||||||||||||
Share-based compensation | (41,871) | (41,871) | (41,871) | ||||||||||||||||
Appropriation of statutory reserves | 3,534 | (3,534) | |||||||||||||||||
Share options exercised (in shares) | shares | 2,802 | 2,802 | |||||||||||||||||
Restricted share units vested (shares) | shares | 5,666,844 | 5,666,844 | |||||||||||||||||
Settlement of share options and restricted share units with shares held by depository bank (in shares) | shares | (5,669,646) | (5,669,646) | |||||||||||||||||
Treasury stock, ending balance at Dec. 31, 2022 | (349,523) | (349,523) | |||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2022 | shares | 890,714,046 | 890,714,046 | |||||||||||||||||
Ending balance at Dec. 31, 2022 | ¥ 60 | 15,239,926 | 11,022 | 77,996 | (8,369,868) | 6,609,613 | 372,243 | 6,981,856 | |||||||||||
Consolidated net income (loss) | (2,643,836) | (2,643,836) | 46,667 | (2,597,169) | |||||||||||||||
Issuance of ordinary shares, net of issurance cost | ¥ 47 | 2,084,356 | 2,084,403 | 2,084,403 | |||||||||||||||
Acquistion of noncontrolling interest | (27,200) | (27,200) | (30,471) | ¥ (57,671) | |||||||||||||||
Reissuance of treasury stock for share option exercise and restricted share units vested , shares | shares | 3,252,768 | 3,252,768 | 3,252,768 | 3,252,768 | |||||||||||||||
Reissuance of treasury stock for share option exercise and restricted share units vested | 22,570 | (22,570) | |||||||||||||||||
Issuance of new shares (in shares) | shares | 650,424,192 | 650,424,192 | |||||||||||||||||
Contribution by noncontrolling interest | 116,996 | ¥ 116,996 | |||||||||||||||||
Foreign exchange difference | (25,365) | (25,365) | (25,365) | ||||||||||||||||
Share-based compensation | 16,800 | 16,800 | 16,800 | ||||||||||||||||
Appropriation of statutory reserves | 2,619 | (2,619) | |||||||||||||||||
Appropriation of dividend | (5,467) | (5,467) | |||||||||||||||||
Restricted share units vested (shares) | shares | 3,043,692 | 3,043,692 | |||||||||||||||||
Settlement of share options and restricted share units with shares held by depository bank (in shares) | shares | (3,043,692) | (3,043,692) | |||||||||||||||||
Treasury stock, ending balance at Dec. 31, 2023 | ¥ (326,953) | $ (46,050) | (326,953) | $ (46,050) | |||||||||||||||
Ending Balance (in shares) at Dec. 31, 2023 | shares | 1,544,391,006 | 1,544,391,006 | |||||||||||||||||
Ending balance at Dec. 31, 2023 | ¥ 107 | $ 15 | ¥ 17,291,312 | $ 2,435,430 | ¥ (14,343) | $ (2,020) | ¥ 80,615 | $ 11,354 | ¥ (11,016,323) | $ (1,551,617) | ¥ 6,014,415 | $ 847,112 | ¥ 499,968 | $ 70,419 | ¥ 6,514,383 | $ 917,531 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION | |
ORGANIZATION | 1. ORGANIZATION VNET Group, Inc. (the “Company”) was incorporated under the laws of the Cayman Islands on October 16, 2009. The Company, together with its consolidated subsidiaries and variable interest entities (“VIEs”) are principally engaged in the provision of data center hosting and related services. Where appropriate, the term “Company” also refers to the Company itself and its consolidated subsidiaries and VIEs as a whole. (a) As of December 31, 2023, the principal consolidated subsidiaries and VIEs of the Company are as follows: Entity Date of incorporation/ acquisition Place of incorporation Percentage of direct ownership by the Company Principal activities Subsidiaries: VNET Group Limited (“VNET HK”) May 25, 2007 Hong Kong 100 % Investment holding VNET Data Center Co., Ltd. (“VNET China”) (1) June 12, 2000 PRC 100 % Provision of technical and consultation services and rental of long-lived assets VNET (Foshan) Technology Co., Ltd. (“FS Technology”) (1) December 20, 2011 PRC 100 % Trading of network equipment, provision of technical and internet data center services VNET Anhui Suzhou Technology Co., Ltd. (“SZ Technology”) (1) November 16, 2011 PRC 100 % Trading of network equipment VNET Hangzhou Information Technology Co., Ltd. (“HZ Technology”) (1) March 4, 2013 PRC 100 % Provision of internet data center services VNET Mobile Limited (“VNET Mobile”) April 30, 2013 Hong Kong 100 % Investment holding and provision of telecommunication services WiFire Group Inc. (“WiFire Group”) March 7, 2014 British Virgin Islands 100 % Investment holding Joytone Infotech Co., Ltd. (“SZ Zhuoaiyi”) (1) April 30, 2013 PRC 100 % Provision of technical and consultation services VNET Ventures Limited (“Ventures”) March 6, 2014 Hong Kong 100 % Investment holding Abitcool (China) Broadband Inc. (“aBitCool DG”) (1) June 13, 2014 PRC 100 % Dormant company Diyixian.com Limited (“DYX”) August 10, 2014 Hong Kong 100 % Provision of virtual private network services VNET Zhuhai Financial Leasing Co., Ltd. (“Zhuhai Financial Leasing”) (1) April 9, 2015 PRC 100 % Provision of finance leasing business services VNET DRP Investment Holdings Limited (“DRP investment”) January 13, 2017 Hong Kong 100 % Investment holding Shihua DC Investment Holdings Limited (“Shihua Investment”) March 14, 2017 Cayman Islands 51 % Investment holding VNET (Xi’an) Technology Co., Ltd. (“Xi’an Tech”) (1) July 5, 2012 PRC 51 % Provision of technical and internet data center services Foshan Zhuoyi Intelligence Data Co., Ltd. (“FS Zhuoyi”) (1) July 7, 2016 PRC 51 % Provision of internet data center services Beijing Hongyuan Network Technology Co., Ltd. (“BJ Hongyuan”) (1) December 8, 2014 PRC 51 % Provision of internet data center services Dermot Holdings Limited (“Dermot BVI”) August 10, 2014 British Virgin Islands 100 % Investment holding VNET Technology Development (Suzhou) Co., Ltd.(“Suzhou Technology”) March 13, 2019 PRC 100 % Provision of internet data center services Huailai hulianyun Technology Co., Ltd.(“Huailai hulianyun”) June 26, 2019 PRC 100 % Provision of internet data center services Shihua DC Investment Holdings 2 Limited (“Shihua Holdings 2”) August 20, 2019 Cayman Islands 100 % Investment holding Shanghai Waigaoqiao Free Trade Zone Gaogang Technology Co., Ltd. (“Waigaoqiao Technology”) (1)/(4) August 20, 2019 PRC 100 % Provision of internet data center services Tongyun Internet (Beijing) Cloud Computing Technology Co., Ltd.(“Tongyun BJ”) January 19, 2020 PRC 100 % Provision of internet data center services Shanghai Edge Connect Technology Co., Ltd. (“SH Edge Connect”) (1) November 3, 2020 PRC 100 % Provision of technical and internet data center services Beijing Jianghe Cloud Technology Co., Ltd. (“BJ JHC”) (1) November 17, 2020 PRC 100 % Provision of internet data center services Beijing Shuntou Green Energy Data Technology Co., Ltd. (“BJ ST”) (1) November 17, 2020 PRC 100 % Provision of internet data center services Jiwa Senlin (Beijing) Engineering Co., Ltd.(“Jiwa Engineering BJ”) (1) April 8, 2021 PRC 100 % Provision of internet data center services Beijing TenxCloud Technology Co., Ltd. (“BJ TenxCloud”) (1)/(3) July 15, 2021 PRC 100 % Provision of digitalization solution services Zhongke Zijing Technology Co., Ltd. (“Zhongke Zijing”) (1)/(14) August 16, 2021 PRC 100 % Provision of technical and consultation services Gu’an Junhui Network Technology Co., Ltd. (“Gu’an Junhui”) (1)/(4) August 16, 2021 PRC 100 % Provision of internet data center services Beijing Jianghe Shuzhi Technology Co., Ltd.(“BJ Jianghe Shuzhi”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Jianghe Chuangke (Beijing) Technology Co., Ltd.(“Jianghe Chuangke”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Beijing Jianghe Cloud Industrial Internet Technology Co., Ltd.(“Jianghe Industrial”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Beijing Xunneng Digital Industry Empowerment Center Co., Ltd.(“BJ Xunneng”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services 1. ORGANIZATION (CONTINUED) Entity Date of incorporation/ acquisition Place of incorporation Percentage of direct ownership by the Company Principal activities Variable Interest Entities (the “VIEs”): Beijing Yiyun Network Technology Co., Ltd. (“VNET Technology”) (2) October 22, 2002 PRC — Provision of internet data center services Beijing iJoy Information Technology Co., Ltd. (“BJ iJoy”) (2) April 30, 2013 PRC — Provision of internet data center, content delivery network services WiFire Network Technology (Beijing) Co., Ltd. (“WiFire Network”) (2) April 1, 2014 PRC — Provision of telecommunication services Shanghai Zhiyan Yunwei Technology Co., Ltd. (“SH Zhiyan”) (2) December 12, 2020 PRC — Provision of telecommunication services Held directly by VNET Technology: Beijing VNET Broad Band Data Center Co., Ltd. (“VNET Beijing”) (2) March 15, 2006 PRC — Provision of internet data center services Shanghai Shilian Technology Co., Ltd. (“SH Shilian”) October 22, 2012 PRC — Provision of internet data center services Beijing VNET Technology Co., Ltd.(“VNET BJ”) April 1, 2021 PRC — Provision of internet data center services Held directly by VNET Beijing: VNET (Xi’an) Information Outsourcing Industry Park Services Co., Ltd. (“Xi’an Sub”) (2) June 23, 2008 PRC — Provision of internet data center services Langfang Xunchi Computer Data Processing Co., Ltd. (“LF Xunchi”) (2) December 19, 2011 PRC — Dormant company Beijing Yilong Xinda Technology Co., Ltd. (“Yilong Xinda”) (2) February 28, 2013 PRC — Provision of internet data center services Beijing Yichengtaihe Investment Co., Ltd. (“BJ Yichengtaihe”) (2) September 30, 2014 PRC — Provision of internet data center services Guangzhou Lianyun Big Data Co., Ltd. (“GZ Lianyun”) (2) April 14, 2016 PRC — Provision of internet data center services Beijing Xianghu Yunlian Technology Co., Ltd. (“Xianghu Yunlian”) (2) November 7, 2018 PRC — Provision of internet data center services Shanghai Hujiang Songlian Technology Co., Ltd.(“Hujiang Songlian”) (2) December 17, 2018 PRC — Provision of internet data center services Beijing Shuhai Hulian Technology Co., Ltd. (“BJ Shuhai”) (2) January 2, 2019 PRC — Provision of internet data center services Nantong Chenghong Cloud Computing Co., Ltd. (“NT Chenghong”) (2) December 24, 2019 PRC — Provision of internet data center services Held directly by SH Shilian: Shanghai Shuzhong Investment Management Co., Ltd. (“SH Shuzhong”) (2) June 30, 2020 PRC — Provision of internet data center services Sanhe Shulifang Information Technology Co., Ltd. (“Shulifang”) (2) July 21, 2020 PRC — Provision of internet data center services Langfang Huahai Internet Technology Co., Ltd. (“LF Huahai”) (2) September 11, 2020 PRC — Provision of internet data center services Shanghai Hesheng Data System Co., Ltd. (“SH Hesheng”) (2)/(5) November 11, 2021 PRC — Provision of internet data center services Hebei Ketai Internet Technology Co., Ltd.(“HB Ketai”) September 26, 2022 PRC — Provision of internet data center services Held directly by VNET BJ: WLCB Century Cloud Data Technology Co., Ltd.(“WLCB Century Cloud”) April 1, 2021 PRC — Provision of internet data center services Held directly by SH Zhiyan: Shanghai Blue Cloud Technology Co., Ltd. (“SH Blue Cloud”) (2) March 21, 2013 PRC — Provision of Office 365 and Windows Azure platform services Shanghai Edge Blue Cloud Network Technology Co., Ltd. (“SH Edge Network”) (2)/(6) January 7, 2021 PRC — Provision of internet data center services Held directly by DYX and LF Xunchi: Shenzhen Diyixian Telecommunication Co., Ltd. (“SZ DYX”) (1) August 10, 2014 PRC 20 % Provision of virtual private network services (1) Collectively, the “PRC Subsidiaries”. (2) Collectively, the “Consolidated VIEs”. (3) On July 15, 2021, the Company through its subsidiary, Shenzhen Cloud Native Technology Co., Ltd. (“SZ Cloud Native”), acquired 100% equity interest of BJ TenxCloud. (4) On August 16, 2021, the Company through its subsidiary, Jiwa Engineering BJ, acquired 100% equity interest of Zhongke Zijing and Gu’an Junhui. (5) On November 11, 2021, the Company through its subsidiary, SH Shilian, acquired 100% equity interest of SH Hesheng. (6) On January 7, 2021, the Company, through SH Zhiyan, established SH Edge Network for internet data center services. (7) On August 1, 2022, the Company through its subsidiary, VNET Saturn and YF WFOE, acquired 100% equity interest of BJ Jianghe Shuzhi, Jianghe Chuangke, Jianghe Industrial and BJ Xunneng (Note 4). 1. ORGANIZATION (CONTINUED) (b) PRC laws and regulations prohibit foreign ownership of internet and telecommunications-related businesses. To comply with these foreign ownership restrictions, the Company conducts its businesses in the PRC through its VIEs using contractual agreements (the “VIE Agreements”). The Company controls four significant VIEs, namely VNET Technology, BJ iJoy, WiFire Network and SH Zhiyan as of December 31, 2023. The key terms of the VIE Agreements in relation to BJ iJoy, WiFire Network and SH Zhiyan are substantially similar to VNET Technology, except for the terms separately disclosed as below. The equity interests of VNET Technology are legally held by certain PRC individuals, including Mr. Sheng Chen, the Executive Chairman of Board of Directors of the Company and Zhang Jun (collectively the “Nominee Shareholders”). The following is a summary of the key terms of the VIE Agreements of VNET Technology: Exclusive option agreement Pursuant to the exclusive option agreement entered into amongst VNET China and the Nominee Shareholders of VNET Technology, the Nominee Shareholders granted the Company or its designated party, an exclusive irrevocable option to purchase all or part of the equity interests held by the Nominee Shareholders in VNET Technology, when and to the extent permitted under the PRC laws, at an amount equal to RMB1. VNET Technology cannot declare any profit distributions or grant loans in any form without the prior written consent of VNET China. The Nominee Shareholders must remit in full any funds received from VNET Technology to VNET China, in the event any distributions are made by VNET Technology. The term of this agreement is 10 years, expiring on December 18, 2016, which is renewable at the sole discretion of VNET China. On December 19, 2016, this agreement was renewed for another 10 years, expiring on December 18, 2026. SH Zhiyan has substantially similar exclusive option agreement except that the term of SH Zhiyan will terminate when SH Edge Connect, the primary beneficiary, purchases all of SH Zhiyan’s equity interest held by the Nominee Shareholder, Shanghai Rongyan Yunqi Technology Co., Ltd. (“SH Rongyan”). Exclusive technical consulting and service agreement Pursuant to the exclusive technical consulting and service agreement entered into between VNET China and VNET Technology, VNET China is to provide exclusive management consulting services and internet technical services in return for fees based on of a predetermined hourly rate of RMB1, which is adjustable at the sole discretion of VNET China. The term of this agreement is 10 years, expiring on December 18, 2016, which is renewable at the sole discretion of VNET China. On December 19, 2016, this agreement was renewed for another 10 years, expiring on December 18, 2026. SH Zhiyan has substantially similar exclusive technical consulting and service agreement except that the term for SH Zhiyan would be in effect for an unlimited term unless terminated in writing by SH Edge Connect, the primary beneficiary of VIE SH Zhiyan. Loan agreement In January 2011, VNET China and the Nominee Shareholders entered into a loan agreement. Pursuant to the agreement, VNET China has provided interest-free loan facilities of RMB7,000 and RMB3,000, respectively, to the Nominee Shareholders of VNET Technology for the purpose of providing capital to VNET Technology to develop its data center and telecommunications value-added business and related businesses. There is no fixed term for the loan. The Nominee Shareholders of SH Zhiyan did not enter into any loan agreement to fund the capital injected in SH Zhiyan. 1. ORGANIZATION (CONTINUED) Power of attorney agreement The Nominee Shareholders entered into the power of attorney agreement whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests in VNET Technology to VNET China, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and VNET Technology’s Articles of Association. The power of attorney remains valid and irrevocable from the date of execution, so long as each Nominee Shareholder remains as a shareholder of VNET Technology. The power of attorney agreement in relation to VNET Technology was reassigned to VNET Group, Inc. in September 2010. Share pledge agreement Pursuant to the share pledge agreement entered into amongst VNET China, VNET Technology and the Nominee Shareholders, the Nominee Shareholders have contemporaneously pledged all their equity interests in VNET Technology to guarantee the repayment of the loan under the Loan Agreement between VNET China and the Nominee Shareholders. On August 10, 2015, a Notification of Cancellation of share pledge registration was issued by Beijing Administration for Industry and Commerce, Pinggu Branch to cancel the registration of the share pledge by one of the Nominee Shareholders of VNET Technology, Zhang Jun. Such cancellation does not affect the effectiveness of the share pledge agreement and does not lessen the control imposed on the contractual parties of the Company. If VNET Technology breaches its respective contractual obligations under the Share pledge agreement and the loan agreement, VNET China, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The Nominee Shareholders agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in VNET Technology without the prior written consent of VNET China. SH Zhiyan has substantially similar term the Nominee Shareholders of SH Zhiyan did not enter into any loan agreement to fund the capital injected in SH Zhiyan as mentioned above. Financial support letter Pursuant to the financial support letter, VNET Group, Inc. agreed to provide unlimited financial support to VNET Technology for its operations and agreed to forego the right to seek repayment in the event VNET Technology is unable to repay such funding. SH Zhiyan has substantially similar term except that SH Edge Connect provides unlimited financial support to SH Zhiyan for its operations. Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and VNET Technology through the irrevocable power of attorney agreement, whereby the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interests in VNET Technology to the Company. In addition, the Company, through VNET China, obtained effective control over VNET Technology through the ability to exercise all the rights of VNET Technology’s shareholders pursuant to the share pledge agreement and exclusive option agreement. The Company demonstrates its ability and intention to continue to exercise the ability to absorb substantially all of the expected losses through the financial support letter. In addition, the Company also demonstrates its ability to receive substantially all of the economic benefits of VNET Technology through VNET China through the consulting and service agreement. Thus, the Company is the primary beneficiary of VNET Technology and consolidates VNET Technology and its subsidiaries under Accounting Standards Codification (“ASC”) Subtopic 810-10, Consolidation: Overall 1. ORGANIZATION (CONTINUED) Financial support letter (continued) In the opinion of the Company’s management and PRC counsel, (i) the ownership structure of the VIEs is in compliance with applicable PRC laws and regulations in any material respect, and (ii) each of the VIE Agreements is valid, legally binding and enforceable to each party of such agreements under the existing PRC laws and will not violate any PRC laws or regulations currently in effect. However, the interpretation and application of current PRC laws and regulations are evolving and new laws and regulations may become effective from time to time in the future. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the current ownership structure of the Company and its contractual arrangements with the VIEs are found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its ownership structure and operations in the PRC to comply with the changing and new PRC laws and regulations. To the extent that changes and new PRC laws and regulations prohibit the Company’s VIE arrangements from complying with the principles of consolidation, the Company would have to deconsolidate the financial position and results of operations of its VIEs. In the opinion of management, the likelihood of loss of control in respect of the Company’s current ownership structure or the contractual arrangements with the VIEs is remote based on current facts and circumstances. (c) VIE disclosures Except for certain property with carrying amounts of RMB619,738 that were pledged to secure borrowings granted to the Company, there were no pledges or collateralization of the Consolidated VIEs’ assets as of December 31, 2023. Creditors of the Consolidated VIEs have no recourse to the general credit of the primary beneficiaries of the Consolidated VIEs, and such amounts have been parenthetically presented on the face of the consolidated balance sheets. The Consolidated VIEs operate the data centers and own facilities including data center buildings, leasehold improvements, fiber optic cables, computers and network equipment, which are recognized in the Company’s consolidated financial statements. They also hold certain value-added technology licenses, registered copyrights, trademarks and registered domain names, including the official website, which are also considered as revenue-producing assets. However, none of such assets was recorded on the Company’s consolidated balance sheets as such assets were all acquired or internally developed with insignificant cost and expensed as incurred. In addition, the Company also hires data center operation and marketing workforce for its daily operations and such costs are expensed when incurred. The Company has not provided any financial or other support that it was not previously contractually required to provide to the Consolidated VIEs during the periods presented. 1. ORGANIZATION (CONTINUED) The following tables represent the financial information of the Consolidated VIEs as of December 31, 2022 and 2023 and for the years ended December 31, 2021, 2022 and 2023 before eliminating the intercompany balances and transactions between the Consolidated VIEs and other entities within the Company: As of December 31, 2022 2023 RMB RMB ASSETS Current assets: Cash and cash equivalents 1,428,768 923,692 Restricted cash 301,825 434,421 Accounts receivable (net of allowance for doubtful debt of RMB100,797 and RMB161,837 as of December 31, 2022 and 2023 respectively) 1,400,546 1,412,456 Prepaid expenses and other current assets 1,976,164 2,081,948 Amounts due from related parties 13,942 58,823 Total current assets 5,121,245 4,911,340 Non-current assets: Property and equipment, net 7,495,362 7,398,768 Intangible assets, net 475,652 453,606 Land use rights, net 44,233 56,971 Operating lease right-of-use assets, net 3,452,533 3,948,272 Goodwill 332,645 — Restricted cash — 382 Deferred tax assets, net 153,676 208,266 Other non-current assets 165,570 148,383 Long-term investments, net 82,744 168,377 Total non-current assets 12,202,415 12,383,025 Total assets 17,323,660 17,294,365 Current liabilities: Short-term bank borrowings — 30,000 Accounts and notes payable 483,030 493,837 Accrued expenses and other payables 1,488,031 1,616,423 Advances from customers 1,157,963 1,605,247 Deferred revenue 84,775 83,546 Income taxes payable 25,188 13,531 Amounts due to inter-companies, net (1) 6,071,651 4,736,035 Amounts due to related parties 6,928 356,080 Current portion of finance lease liabilities 165,221 97,388 Current portion of long-term borrowings 417,442 544,803 Current portion of deferred government grants 3,646 8,062 Current portion of operating lease liabilities 655,663 754,935 Total current liabilities 10,559,538 10,339,887 1. ORGANIZATION (CONTINUED) As of December 31, 2022 2023 RMB RMB Non-current liabilities: Amounts due to inter-companies, net (1) 1,020,972 1,020,972 Long-term borrowings 1,861,545 2,464,811 Non-current portion of finance lease liabilities 615,309 720,954 Unrecognized tax benefits 86,799 98,082 Deferred tax liabilities 149,475 139,174 Deferred government grants 2,726 11,862 Non-current portion of operating lease liabilities 2,872,323 3,230,506 Total non-current liabilities 6,609,149 7,686,361 Total liabilities 17,168,687 18,026,248 For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net revenues 5,145,110 5,944,519 6,418,125 Net income (loss) 92,594 (66,764) (999,101) For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net cash generated from operating activities 866,712 1,351,179 1,418,796 Net cash used in investing activities (2,695,707) (1,849,339) (1,431,085) Net cash generated from (used in) financing activities 1,788,528 1,243,495 (359,809) Net (decrease) increase in cash and cash equivalents and restricted cash (40,467) 745,335 (372,098) (1) Amounts due to inter-companies consist of intercompany payables to the other companies within the Company for the purchase of telecommunication resources and property and equipment on behalf of the Consolidated VIEs. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) assuming the Company will continue as a going concern. The Company has incurred losses since its inception. As of December 31, 2023, the Company had an accumulated deficit of RMB11.0 billion and in a net current liability position in an amount of RMB1.6 billion. Absent any other action, the Company likely will require additional liquidity to continue its operations over the next 12 months. With the Company’s unused loan facilities with banks and financial institutions, strategy to obtain financing from the issuance of equity shares, bonds and convertible notes, and control of operating expenses and capital expenditure where necessary, management has determined that the Company has the ability to manage the liquidity needs to enable continuation of operations for the foreseeable future. (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the Consolidated VIEs for which the Company or a subsidiary of the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the Consolidated VIEs are eliminated upon consolidation. Results of acquired subsidiaries and its Consolidated VIEs are consolidated from the date on which control is transferred to the Company. (c) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant estimates and assumptions reflected in the Company’s financial statements include, but are not limited to, determining the valuation allowance for deferred tax assets, the fair value of convertible promissory notes and derivative liability, the fair value of assets acquired and liabilities assumed in acquisitions, the recoverability of long-lived assets, the fair values of asset groups, the fair value of a reporting unit, the estimated useful lives of property and equipment, and intangible assets, and incremental borrowing rate of leases. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. The Company regularly assesses the estimated useful lives of its property and equipment, and intangible assets. In January 2024, the Company, with the assistance of an external appraisal firm, completed an assessment of the useful lives of certain data center property and equipment and revised the estimated useful lives from a range of 2 3 15 (d) Foreign currency The functional currency of the Company and its overseas subsidiaries is the United States dollar (“US$”), whereas the functional currency of the Company’s PRC subsidiaries and its Consolidated VIEs is the Chinese Renminbi (“RMB”) as determined based on the criteria of ASC Topic 830, Foreign Currency Matters The financial statements of the Company and its overseas subsidiaries are translated from the functional currency to the reporting currency, RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical costs in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of operations. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Foreign currency (continued) The Company uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in other comprehensive (loss) income within the statements of comprehensive income (loss). (e) Convenience translation Translations of consolidated balance sheets, consolidated statements of operations, comprehensive income (loss), cash flows, and shareholders’ equity from RMB to US$ as of and for the year ended December 31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1.00 to RMB7.0999 on December 29, 2023, the last business day in fiscal year 2023, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate. (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal and use and have original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents. (g) Restricted cash Restricted cash mainly represents amounts held by a few banks in escrow as security for credit facilities, the deposits for finance lease, the deposits held in escrow for the advances received from end customers subscribing Microsoft 365 and Windows Azure services (the disbursement of which shall be agreed by both Microsoft (China) Co., Ltd. (“Microsoft”) and the Company), the deposits for business operation, the deposits for loans and the deposits held for legal proceedings. As of 31 December 2023, the amount of restricted cash also included the deposits of RMB2,117,730 held in escrow for the repurchase of the 2026 Convertible Notes. (h) Short-term investments The Company’s short-term investments primarily include the Company’s investment in a short-term wealth management product managed by a financial institution in Hong Kong S.A.R. The Company elects to apply the fair value option for the short-term investment. Realized and unrealized fair value changes in the short-term investment are recorded in other income in the consolidated statement of operations. In addition, other highly liquid investments with original maturities of greater than three months but less than twelve months, are also classified as short-term investments. (i) Accounts receivable and allowance for doubtful debt Pursuant to ASC 326, Financial Instruments-Credit Losses 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Accounts receivable and allowance for doubtful debt (continued) The Company utilizes a loss rate approach to determine lifetime expected credit losses for its financial assets. This method is used for calculating an estimate of losses based primarily on the Company’s historical loss experience. In determining loss rates, the Company evaluates information related to historical losses, adjusted for current conditions and further adjusted for the period of time that the Company can reasonably forecast. The Company has concluded that it can reasonably support a forecast period for the contractual life of its financial assets. Qualitative and quantitative adjustments related to current conditions and the reasonable and supportable forecast period consider the following: the customer or vendor ‘s creditworthiness, changes in the policy and procedures to establish customer credit limits, changes in the payment terms of receivables, existence and effect of any concentration of credit and changes in the level of such concentrations, and the effects of other external forces such as the current and forecasted direction of the economic and business environment. (j) Property and equipment Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment acquired in a business combination are recognized initially at fair value at the data of acquisition. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Property 25-46 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Optical fibers 10-20 years Computer and network equipment 1-10 years Office equipment 2-8 years Motor vehicles 2-8 years Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost and accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of operations. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. (k) Intangible assets Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets with finite useful lives are amortized using a straight-line method. These amortization methods reflect the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. The Company has capitalized certain internal use software development costs in accordance with ASC Subtopic 350-40, Intangibles-Goodwill and Other: Internal-Use Software 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Intangible assets (continued) Intangible assets have weighted average useful lives from the date of purchase/ acquisition as follows: Purchased software 5.1 years Radio spectrum license 15 years Operating permits* 32.1 years Customer relationships* 8.3 years Licenses* 15 years Supplier relationships* 10 years Trade names* 20 years Technology platform* 5 years Non-complete agreements* 5 years Internal use software 3.4 years Customer contract* 7 years * Acquired in the acquisitions of subsidiaries. (l) Leases The Company determines if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. The Company has lease agreements with lease and non-lease components, which are accounted for separately. The Company elected the short-term lease exemption for all contracts with lease term of 12 months or less. At the commencement date of a lease, the Company determines the classification of the lease based on the relevant factors present and records a right-of-use (“ROU”) asset and lease liability for operating lease, and records property and equipment and finance lease liability for finance lease. ROU assets and property and equipment acquired through lease represent the right to use an underlying asset for the lease term, and operating lease liabilities and finance lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. If the rate implicit in the Company’s leases is not readily available, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Company will exercise that option. Leases with an initial lease term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term. (m) Land use right The land use rights represent the operating lease prepayments for the rights to use the land in the PRC under ASC 842. Amortization of the prepayments is provided on a straight-line basis over the terms of the respective land use rights certificates. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (n) Long-term investments The Company’s long-term investments primarily consist of equity investments without readily determinable fair value, equity method investments. Pursuant to ASC Topic 321, Investments—Equity Securities Fair Value Measurements and Disclosures For equity investments measured at fair value with changes in fair value recorded in earnings, the Company does not assess whether those securities are impaired. For those equity investments that the Company elects to use the measurement alternative, the Company makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net loss equal to the difference between the carrying value and fair value. Investments in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC Subtopic 323-10, Investments-Equity Method and Joint Ventures: Overall (o) Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the identifiable assets acquired and the liabilities assumed of an acquired business. The Company assesses goodwill for impairment in accordance with ASC Subtopic 350-20, Intangibles—Goodwill and Other: Goodwill The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative test in accordance with ASC 350-20. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting units, and other specific information related to the operations. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. Pursuant to ASC 350-20, the Company performed assessment and completed its annual impairment test for goodwill that has arisen out of its acquisitions. No impairment loss of goodwill was recognized for the years ended December 31, 2021 and 2022. RMB1,364,191 of goodwill impairment loss was recognized for the year ended December 31, 2023. See Note 11 for details. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Impairment of long-lived assets The Company evaluates long-lived assets, such as fixed assets, purchased or internally developed intangible assets with finite lives, and operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC Topic 360, Property, Plant and Equipment As of December 31, 2021, due to continuing losses and physical condition changed, the Company recorded the long-lived assets impairment amounting to RMB109,267, resulting from excess of the carrying amount of the asset group over the fair value of the asset group. No impairment was recognized for the year ended December 31, 2022 as there was no impairment indicator identified. As of December 31, 2023, due to the weaker-than-expected operations, the Company tested certain long-lived asset groups for recoverability. Impairment loss is calculated as the amount by which the carrying amount of the relevant asset groups exceeds their estimated fair value. Impairment loss of RMB506,686 was recorded for the year ended December 31, 2023. The Company determined the fair value of relevant asset group using the income approach based on the discounted cash flows associated with the asset group. The impairment loss reduced the carrying amount of the long-lived assets of the group on a pro-rata basis using the relative carrying amount of those assets except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. The Company recorded impairment charges associated with its long-lived assets as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Impairment of property and equipment 106,311 — 480,099 Impairment of intangible assets — — 15,113 Impairment of right-of-use assets — — 11,474 Impairment of other non-current assets 2,956 — — (q) Fair value of financial instruments The Company’s financial instruments primarily include cash and cash equivalents, restricted cash, short-term investments, accounts receivable and payable, other receivables and payables, amounts due from/to related parties, long-term borrowings, available-for-sale debt investments, convertible promissory notes and a derivative liability. Other than long-term borrowings, convertible promissory notes and the derivative liability, the carrying values of these financial instruments approximate their fair values due to their short-term maturities. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (q) Fair value of financial instruments (continued) The carrying amounts of long-term borrowings approximate their fair values since they bear interest rates which approximate market interest rates. The Company elected the fair value option for the 2025 Convertible Notes (Note 19) upon initial recognition as financial liability as the fair value better represents the value of the underlying liabilities. The purchase consideration and contingent purchase considerations in both cash and shares are initially measured at fair value on the acquisition dates of the acquired businesses and the date of grant, respectively, and subsequently remeasured at the end of each reporting period with an adjustment for fair value recorded to the current period income/(expense). The bifurcated redemption feature of 2027 Convertible Notes (Note 19) is recorded as a derivative liability, which is initially measured at fair value, and subsequently remeasured at the end of each reporting period with an adjustment for fair value recorded to the current period income/(expense). The Company recorded the 2026 Convertible Notes (Note 19) and 2027 Convertible Notes (Note 19) using amortized cost method on its consolidated balance sheets and measures the fair value for disclosure purposes only. See Note 28 for disclosure of fair value measurements. (r) Revenue recognition The Company provides hosting and related services including hosting of customers’ servers and networking equipment, connecting customers’ servers with internet backbones (“Hosting service”), virtual private network services providing encrypted secured connection to public internet (“VPN service”) and other value-added services and public cloud service through strategic partnership with Microsoft. The Company recognizes revenue as it satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the service, has discretion in establishing pricing and controls the promised service before transferring that service to customers. Otherwise, the Company records revenue at the net amounts as commissions. The Company’s revenue recognition policies are as follows: Hosting services are services that the Company dedicates data center space to house customers’ servers and networking equipment and provides tailored server administration services including operating system support and assistance with updates, server monitoring, server backup and restoration, server security evaluation, firewall services, and disaster recovery. The Company also provides interconnectivity services to connect customers with each other, internet backbones in China and other networks through Border Gateway Protocol, or BGP, network, or single-line, dual-line or multiple-line networks. Hosting services are typically provided to customers for a fixed amount over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. For certain contracts where considerations are based on the usage of the Hosting services, the related revenues are recognized based on the consumption at the predetermined rate as the services are rendered throughout the contract term. VPN services are services that the Company extends customers’ private networks by setting up secure and dedicated connections through the public internet. VPN services are provided to customers for a fixed amount over the contract service period and revenue are recognized on a straight-line basis over the term of the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (r) Revenue recognition (continued) The Company partners with Microsoft to provide Cloud services that allow enterprise and individual customers to run their applications over the internet using the IT infrastructure. Cloud services are generally charged by the Company to the end customers for a fixed amount or based on the actual usage of the cloud resources at predetermined rates over the subscription period, which in general is one year. The Company fulfils its performance obligation of facilitating Microsoft to provide the Cloud services to the end customers by providing, but not limited to, contract processing management, billing, payment collection, maintenance, help desk supports and certain IT infrastructure services. These are considered as a series of distinct services that are substantially the same and have the same pattern of transfer to the customer; therefore, they are accounted for as a single performance obligation that is satisfied over time. The corresponding consideration that the Company is entitled to is recognized as revenue using a time-based method since this best depicts the pattern of the control transfer. Revenue from Cloud services consists of monthly incentive revenues received from Microsoft upon completion of certain conditions and gross billing amount received from end customers net of considerations remitted by the Company to Microsoft. When the contract is modified to add distinct services to the single performance obligation for additional fees, such changes are accounted for prospectively as a termination of the old contract and the creation of a new contract. For certain arrangements, customers are required to pay the Company before the services are delivered. When either party to a revenue contract has performed, the Company recognizes a contract asset or a contract liability in the consolidated balance sheets, depending on the relationship between the Company’s performance and the customer’s payment. Contract liabilities were mainly related to fee received for Hosting services to be provided over the contract period, which were presented as deferred revenue on the consolidated balance sheets. Deferred revenue represented the Company’s obligation to transfer the goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. As of January 1, 2022 and 2023, the Company has deferred revenue amounting up to RMB95,078 and RMB95,477, respectively, which were recognized as revenue for the years ended December 31, 2022 and 2023 in an amount of RMB39,374 and RMB78,683, respectively . The Company’s certain hosting service contains lease and non-lease components. The Company elected to adopt the practical expedient which allows lessors to combine lease and non-lease components and account for them as one component if 1) the timing and pattern of transfer of the lease component and non-lease component is the same; 2) the lease component should be classified as an operating lease if it were accounted for separately. The combined component is accounted for in accordance with the current lease accounting guidance (“ASC 842”) if the lease component is predominant, and in accordance with the ASC 606 if the non-lease component is predominant. The Company has determined that the non-lease component is the predominant component in Hosting service. Therefore, the Company has accounted for the combined component in accordance with ASC 606. The Company does not disclose the value of unsatisfied performance obligations as the Company’s revenue contracts are (i) contracts with an original expected length of one year or less or (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. (s) Cost of revenues Cost of revenues consists primarily of telecommunication costs, depreciation of the Company’s long-lived assets, amortization of acquired intangible assets, utility, maintenance, data center rental expenses directly attributable to the provision of the IDC services, payroll and other related costs of operations. (t) Advertising expenditures Advertising expenditures are expensed as incurred and are included in sales and marketing expenses, which amounted to RMB7,272, RMB6,829 and RMB9,826 for the years ended December 31, 2021, 2022 and 2023, respectively. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (u) Research and development expenses Research and development expenses consist primarily of payroll and related personnel costs for routine upgrades and related enhancements of the Company’s services and network. Research and development expenses are expensed as incurred except for costs to develop internal-use software or add significant upgrades and enhancements resulting in additional functionality to internal-use software that meet the capitalization criteria in accordance with ASC Subtopic 350-40, Intangibles-Goodwill and Other, Internal-Use Software (v) Government grants Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants is determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will continue to receive these government grants in the future. Government grants are recognized when it is probable that the Company will comply with the conditions attached to them, and the grants are received. When the grant relates to an expense item, it is recognized in the consolidated statement of operations over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as a reduction of the related operating expense. When the grant relates to an asset, it is recognized as deferred government grants and released to the consolidated statement of operations in equal amounts over the expected useful life of the related asset, when operational, as a reduction of the related depreciation expense. (w) Capitalized interest Interest costs are capitalized if they are incurred during the acquisition, construction or production of a qualifying asset and such costs could have been avoided if expenditures for these assets have not been made. As a result of total interest costs capitalized during the period, the interest expense for the years ended December 31, 2021, 2022 and 2023, was as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Interest expense and amortization cost of bonds payable 133,959 — — Interest expense and amortization cost of 2025, 2026 and 2027 Convertible Notes (Note 19) 25,919 58,350 59,429 Interest expense on bank and other borrowings 103,925 172,328 222,918 Interest expense on finance leases 124,567 104,088 90,679 Total interest costs 388,370 334,766 373,026 Less: Total interest costs capitalized (53,420) (61,461) (60,854) Interest expense, net 334,950 273,305 312,172 (x) Income taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The carrying amount of deferred tax assets is reviewed on an entity-by-entity basis and is reduced by a valuation allowance to the extent that it is more-likely-than-not that the benefits of the deferred tax assets will not be realized in future years. The valuation allowance is determined based on the weight of positive and negative evidence including future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and verifiable tax planning. The estimated future taxable income involves significant assumptions of forecasted revenue growth that take into consideration of the Company’s historical financial results, its plan of expanding operating capacity as well as current industry trends. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date of the change in tax rate. All deferred income tax assets and liabilities are classified as non-current on the consolidated balance sheets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (x) Income taxes (continued) The Company applies ASC Topic 740, Accounting for Income Taxes The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “income tax expenses” in the consolidated statements of operations. (y) Share-based compensation Share options and Restricted Share Units (“RSUs”) granted to employees are accounted for under ASC Topic 718, Compensation—Stock Compensation The Company has elected to recognize compensation expenses using the straight-line method for share-based awards granted with service conditions that have a graded vesting schedule. For share-based awards granted with performance conditions, the Company recognizes compensation expenses using the accelera |
CONCENTRATION OF RISKS
CONCENTRATION OF RISKS | 12 Months Ended |
Dec. 31, 2023 | |
CONCENTRATION OF RISKS | |
CONCENTRATION OF RISKS | 3. CONCENTRATION OF RISKS (a) Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, accounts receivable, other receivables and amounts due from related parties. As of December 31, 2022 and 2023, the aggregate amount of cash and cash equivalents and restricted cash short-term investments of RMB2,677,823 and RMB2,431,089, respectively, were held at major financial institutions located in the PRC, and US$455,187 and US$426,022, respectively, were deposited with major financial institutions located outside the PRC. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have been significant competitors against Chinese banks in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those Chinese banks in which the Company has deposits has increased. In the event of bankruptcy of one of the banks which holds the Company’s deposits, the Company is unlikely to claim its deposits back in full since the bank is unlikely to be classified as a secured creditor based on PRC laws. (b) Business, supplier, customer, and economic risk The Company participates in a relatively dynamic and competitive industry that is heavily reliant operation excellence of the services. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, result of operations or cash flows: 3. CONCENTRATION OF RISKS (CONTINUED) (b) Business, supplier, customer, and economic risk (continued) (i) (ii) (iii) (iv) (v) (c) Currency convertibility risk The Company transacts substantially all its business in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual-rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. 3. CONCENTRATION OF RISKS (CONTINUED) (d) Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The (appreciation) depreciation of the RMB against US$ was approximately (2.3%), 9.2% and 1.7% in the years ended December 31, 2021, 2022 and 2023, respectively. (e) Interest rate risk The Company is exposed to interest rate risk on its interest-bearing assets and liabilities. As part of its asset and liability risk management, the Company reviews and takes appropriate steps to manage its interest rate exposures on its interest-bearing assets and liabilities. The Company has not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the periods presented. |
ACQUISITION OF SUBSIDIARIES
ACQUISITION OF SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2023 | |
ACQUISITION OF SUBSIDIARIES | |
ACQUISITION OF SUBSIDIARIES | 4. ACQUISITION OF SUBSIDIARIES Acquisitions in 2023 Sanhe Mingtai Digital Industrial Park Co., Ltd. (“Sanhe Digital”) In March 2023, the Company through one of its Consolidated VIEs, Langfang Huahai Network Technology Co., Ltd. (“Langfang Huahai”), acqcuired 100% equity interest in Sanhe Ditital by issuance of 22.5% equity interest (share consideration) of Langfang Huahai. The share consideration is referenced to the fair value of the identifiable assets acquired and liabilities assumed. The purpose of the transaction is to acquire the property and land use rights for data center. As Sanhe Digital does not possess all the elements that are necessary to conduct normal operations as a business, such acquisition is accounted for as an acquisition of assets. Sanhe Digital was subsequently merged into Langfang Huahai in December 2023. The carrying amount of the net identifiable assets of Sanhe Digital were as follows: RMB Net assets acquired: Current assets 3 Property and equipment, net 105,538 Land use rights, net 14,258 Deferred tax assets 2,232 Accrued expenses and other payables (2,277) Deferred tax liabilities (2,758) Total share consideration 116,996 Acquisitions in 2022 Kunshan Kunhui Network Co., Ltd. (“KS Kunhui”) On August 5, 2022, as part of its business strategy to expand the existing hosting service, the Company through its subsidiary, Beijing FengFu Technology Co., Ltd., acquired 100% of the equity interests in KS Kunhui, which primarily provides internet data center service, for a total cash consideration of RMB50,000. As KS Kunhui is in operations and possess all the elements that are necessary to conduct normal operations as a business, such acquisition is accounted for as business combination. 4. ACQUISITION OF SUBSIDIARIES (CONTINUED) Acquisitions in 2022 (continued) The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of acquisition: RMB Cash and cash equivalents 9,014 Property and equipment, net 92,157 Operating lease right-of-use assets, net 199,255 Operating permits (Note 9) 29,000 Customer contract (Note 9) 59,500 Deferred tax assets 13,921 Other current assets 289,480 Total assets acquired 692,327 Other current liabilities (436,124) Operating lease liabilities (208,612) Deferred tax liabilities (22,125) Total liabilities assumed (666,861) Net assets acquired 25,466 Purchase consideration 50,000 Goodwill 24,534 The revenue and net loss of KS Kunhui since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2022 were nil and RMB24,757, respectively. The goodwill, which is not tax deductible, is primarily attributable to synergies expected to be achieved from the acquisition. The pro forma results of revenue and earnings of the acquiree as if the combinations occurred as of the beginning of the comparable prior annual reporting period of the acquiree were not presented because the effects of the business combination was not significant to the Company’s consolidated results of operations. BJ Jianghe Shuzhi, Jianghe Chuangke, Jianghe Industrial and BJ Xunneng (collectively “BJ JiangHeCloud”) On August 1, 2022, the Company through its subsidiaries, YF WOFE and 21Vianet Saturn, acquired 100% equity interests in BJ JiangHeCloud at a total cash consideration of RMB847,438. Among the consideration, RMB57,500 is refundable if relevant condition set out in the agreements is not achieved. The purpose of the transaction is to establish several new data centers. As BJ JiangHeCloud does not possess all the elements that are necessary to conduct normal operations as a business and had not yet commenced operations, such acquisition is accounted for as an acquisition of assets. As of December 31, 2023, as the relevant condition was not met, the RMB57,500 refundable prepayment was included in other non-current assets. The carrying amount of the net identifiable assets of BJ JiangHeCloud were as follows: RMB Net assets acquired: Cash and cash equivalents 3,325 Other current assets 3,959 Property and equipment, net 306,546 Operating permits (Note 9) 479,989 Land use rights, net (Note 10) 221,556 Other current liabilities (15,448) Deferred tax liabilities (209,989) Total consideration in cash 789,938 |
ACCOUNTS AND NOTES RECEIVABLE,
ACCOUNTS AND NOTES RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2023 | |
ACCOUNTS AND NOTES RECEIVABLE, NET | |
ACCOUNTS AND NOTES RECEIVABLE, NET | 5. ACCOUNTS AND NOTES RECEIVABLE, NET Accounts and notes receivable and the allowance for doubtful debt consisted of the following: As of December 31, 2022 2023 RMB RMB Accounts receivable 1,897,111 1,903,458 Notes receivable 1,151 873 Allowance for doubtful debt (134,569) (188,356) 1,763,693 1,715,975 As of December 31, 2022 and 2023, all accounts and notes receivable were due from third party customers. An analysis of the allowance for doubtful debt was as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Balance at beginning of the year 68,921 99,620 134,569 Additional due to business combination 16,256 — — Additional provision charged to expense 14,990 34,949 54,512 Write-off of accounts receivable (547) — (725) Balance at the end of the year 99,620 134,569 188,356 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
SHORT-TERM INVESTMENTS. | |
SHORT-TERM INVESTMENTS | 6. SHORT-TERM INVESTMENTS Short-term investments consisted of the following as of December 31, 2023: As of December 31, 2023 RMB Aggregate cost basis 354,149 Gross unrealized holding gain 2,671 Aggregate fair value 356,820 The Company’s short-term investments as of December 31, 2023 represent a short-term wealth management product issued by a financial institution in Hong Kong S.A.R. The wealth management product has been redeemed by the Company in January 2024. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: As of December 31, 2022 2023 RMB RMB Prepaid expenses (1) 988,467 1,344,525 Tax recoverable 620,901 907,629 Deposits 59,653 33,941 Loans to third parties (2) 376,851 5,787 Staff advances 2,992 2,518 Interest receivables 544 532 Others 98,092 80,409 2,147,500 2,375,341 (1) Prepaid expenses mainly represented the unamortized portion of prepayments made to Microsoft for the cloud services, the prepayments to telecommunication operators for bandwidth, data centers or cabinets and the prepayments for office expense. (2) In December 2022, loan amounting to RMB 279,500 was provided to the third party selling shareholders of KS Kunhui (Note 4) to settle the liabilities to KS Kunhui. The loan bears an interest rate of 7.5% per annum and has a maturity term ranging from four to six months . The loan was secured by the third parties’ equity shares in their subsidiaries and certain property and equipment of their subsidiaries. During 2023, RMB 85,000 was repaid to the Company, RMB 194,500 of the above outstanding loan as well as RMB 93,400 of another loan provided to a third party in September 2021 with an original maturity period of 18 months were overdue and full amount of allowance for credit losses was recognized as of December 31, 2023. The credit losses were recorded in allowance for doubtful debt in the consolidated statement of operations. An analysis of the allowance for doubtful debt in relation to other receivables was as follows: For the years ended December 31, 2022 2023 RMB RMB Balance at beginning of the year 130,908 131,624 Addition 15,460 313,993 Write-off (15,000) — Foreign exchange difference 256 52 Balance at the end of the year 131,624 445,669 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 8. PROPERTY AND EQUIPMENT, NET Property and equipment, including those held under finance leases, consisted of the following: As of December 31, 2022 2023 RMB RMB At cost: Property 2,236,257 2,672,822 Leasehold improvements 4,819,257 5,821,394 Computer and network equipment 7,577,082 8,437,075 Optical fibers 142,723 142,723 Office equipment 87,093 93,543 Motor vehicles 4,098 3,937 14,866,510 17,171,494 Less: Accumulated depreciation (5,548,663) (6,987,542) 9,317,847 10,183,952 Construction-in-progress 2,770,348 3,444,237 Impairment (123,697) (603,796) Property and equipment, net 11,964,498 13,024,393 See note 2 (p) for details of impairment of property and equipment. Depreciation expense was RMB1,164,725, RMB1,462,550 and RMB1,663,932 for the years ended December 31, 2021, 2022 and 2023, respectively, and were included in the following captions: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Cost of revenues 1,107,655 1,386,800 1,573,970 Sales and marketing expenses 963 1,029 1,721 General and administrative expenses 23,186 35,715 38,280 Research and development expenses 32,921 39,006 49,961 1,164,725 1,462,550 1,663,932 The carrying amounts of the Company’s property and equipment held under finance leases at respective balance sheet dates were as follows: As of December 31, 2022 2023 RMB RMB Property 993,158 993,158 Computer and network equipment 971,814 648,989 Optical fibers 137,924 137,924 2,102,896 1,780,071 Less: Accumulated depreciation (847,449) (709,209) 1,255,447 1,070,862 Construction-in-progress — 219,283 Impairment (18,808) (19,361) 1,236,639 1,270,784 8. PROPERTY AND EQUIPMENT, NET (CONTINUED) Depreciation of property, computer and network equipment and optical fibers under finance leases was RMB274,052, RMB224,140 and RMB199,926 for the years ended December 31, 2021, 2022 and 2023, respectively. The carrying amounts of property and equipment pledged by the Company to secure borrowings (Note 14) granted to the Company at the respective balance sheet dates were as follows: As of December 31, 2022 2023 RMB RMB Property 118,050 155,239 Leasehold improvements 92,629 246,662 Computer and network equipment 137,876 442,167 Office equipment 919 1,829 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 9. INTANGIBLE ASSETS, NET The following table presented the Company’s intangible assets as of the respective balance sheet dates: Radio Internal Purchased spectrum Operating Technology Customer Supplier Trade Customer Non-Complete use software license Permits Platform relationships Licenses relationships names contract Agreement software Total RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Intangible assets, cost December 31, 2022 207,565 134,543 1,217,876 38,050 257,183 5,772 39,053 116,266 190,141 1,800 74,224 2,282,473 Accumulated amortization (139,443) (83,294) (56,433) (18,258) (235,810) (3,428) (34,281) (48,929) (68,622) (1,800) (53,785) (744,083) Impairment — (41,259) — — — — — — — — — (41,259) Intangible assets, net December 31, 2022 68,122 9,990 1,161,443 19,792 21,373 2,344 4,772 67,337 121,519 — 20,439 1,497,131 Intangible assets, cost December 31, 2023 233,513 136,825 1,199,210 38,050 257,183 5,772 39,053 116,266 190,141 1,800 90,419 2,308,232 Accumulated amortization (157,081) (87,145) (89,226) (23,739) (256,888) (3,812) (37,299) (54,742) (89,002) (1,800) (67,020) (867,754) Impairment (802) (41,959) — (14,311) — — — — — — — (57,072) Intangible assets, net December 31, 2023 75,630 7,721 1,109,984 — 295 1,960 1,754 61,524 101,139 — 23,399 1,383,406 Radio spectrum license represented the spectrum license awarded by the Hong Kong Telecommunication Authority. Operating permits relate to the government authorized high-capacity utilities from the assets acquisitions. Customer relationships relate to the relationships that arose as a result of existing customer agreements acquired and is derived from the estimated net cash flows that are expected to be derived from the expected renewal of these existing customer agreements after subtracting the estimated net cash flows from other contributory assets. Licenses mainly represented the telecommunication service license in relation to virtual private network services. Supplier relationships relate to the relationships that arose as a result of existing bandwidth supply agreements with certain network operators, which were valued using a replacement cost method given the relative ease of replacement. Trade names mainly relate to the trade names of Dermot Entities. Customer contract related to existing customer agreements acquired and is derived from the estimated net cash flows that are expected to be derived over the contractual period of the existing customer agreements after subtracting the estimated net cash flows from other contributory assets. Technology platform relates to the TenxCloud Cloud Native Application Platform and Kubedata platform from acquisition of BJ TenxCloud in 2021 and platform software from acquisition of iJoy BVI in 2013. The intangible assets are amortized using the straight-line method, which is the Company’s best estimate of how these assets will be economically consumed over their respective estimated useful lives ranging from 1 to 48 years. See note 2 (p) for details of impairment of intangible assets. Amortization expenses were approximately RMB94,751, RMB122,470 and RMB128,042 for the years ended December 31, 2021, 2022 and 2023, respectively. The annual estimated amortization expenses for the intangible assets for each of the next five years are as follows: RMB 2024 294,541 2025 153,513 2026 27,877 2027 17,591 2028 11,325 504,847 |
LAND USE RIGHTS, NET
LAND USE RIGHTS, NET | 12 Months Ended |
Dec. 31, 2023 | |
LAND USE RIGHTS, NET. | |
LAND USE RIGHTS, NET | 10. LAND USE RIGHTS, NET Land use rights held by the Company represent operating lease prepayments and are amortized over the remaining term of the respective rights. As of December 31, 2022 2023 RMB RMB Cost 617,808 664,272 Accumulated amortization (41,788) (61,769) Land use rights, net 576,020 602,503 The carrying amounts of land use rights pledged by the Company to secure borrowings (Note 14) granted to the Company at the respective balance sheet dates were as follows: As of December 31, 2022 2023 RMB RMB Land use rights 115,895 196,195 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL. | |
GOODWILL | 11. GOODWILL The changes in the carrying amount of goodwill were as follows: For the years ended December 31, 2022 2023 RMB RMB Balance as of January 1 Goodwill, gross 1,339,657 1,364,191 Accumulated impairment losses — — Goodwill, net 1,339,657 1,364,191 Goodwill acquired 24,534 — Impairment — (1,364,191) Balance as of December 31 Goodwill, gross 1,364,191 1,364,191 Accumulated impairment losses — (1,364,191) Goodwill, net 1,364,191 — As of December 31, 2021 and 2022, the Company has performed assessment and no impairment loss was recorded. Considering the adverse changes in macroeconomic and market conditions in 2023 as well as a sustained decrease in share price, the Company determined that a quantitative assessment was required at December 31, 2023. The Company estimated the fair value of a reporting unit by using income approach, which considered a number of factors, including expected future cash flows and discounted rate. Expected future cash flows are dependent on certain key assumptions including forecsted revenue growth rates. Based on the quantitative assessment results, the difference of the reporting unit’s carrying amount over its fair value exceeded the total amount of goodwill as of December 31, 2023. Therefore, the Company recognized impairment of goodwill in its full amount of RMB1,364,191 for the year ended December 31, 2023. |
LONG-TERM INVESTMENTS, NET
LONG-TERM INVESTMENTS, NET | 12 Months Ended |
Dec. 31, 2023 | |
LONG-TERM INVESTMENTS, NET | |
LONG-TERM INVESTMENTS, NET | 12. LONG-TERM INVESTMENTS, NET The Company’s long-term investments consisted of the following: As of December 31, 2022 2023 RMB RMB Equity investments without readily determinable fair values 17,137 19,821 Equity method investments 223,457 738,128 Available-for-sale debt investments 1,600 — 242,194 757,949 Equity investments without readily determinable fair values The investment income comprised of dividend income of RMB659, RMB391 and RMB3,270 for the years ended December 31, 2021, 2022 and 2023, respectively. The Company recorded an impairment loss of long-term investments amounting to nil, nil and RMB9,327 for the years ended December 31, 2021, 2022 and 2023, respectively. Equity method investments: Increase (decrease) during the year ended As of December 31, 2021 December 31, 2022 As of December 31, 2022 Share Investments Share Distribution/derecognize Share Impairment Investments Cost of equity Impairment of in equity Cost of equity gain of share equity Cost of equity gain of in equity investments loss investment investee investments (loss) (gain) loss investments (loss) investment investee RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Yizhuang Fund 101,000 (32,285) — 68,715 — 3,159 (71,874) — — — — Jingliang Inter Cloud 6,000 (5,013) — 987 — (4) — 6,000 (5,017) — 983 Jingliang Century Cloud 4,000 — — 4,000 — — — 4,000 — — 4,000 ZJK Energy 5,907 (3,816) — 2,091 — 16 — 5,907 (3,800) — 2,107 WiFire Entities 20,000 (20,000) — — — — — 20,000 (20,000) — — Qidi Chengxin 3,930 (217) — 3,713 — (116) — 3,930 (333) — 3,597 BJ Chaohulian 5,000 (1,505) (3,495) — — — — 5,000 (1,505) (3,495) — Dexin Tonglian — — — — 3,000 (333) — 3,000 (333) — 2,667 SH Edge Interchange* — — — — 900 (797) — 900 (797) — 103 Changzhou Gaoxin — — — — 210,000 — — 210,000 — — 210,000 145,837 (62,836) (3,495) 79,506 213,900 1,925 (71,874) 258,737 (31,785) (3,495) 223,457 Increase (decrease) during the year ended As of December 31, 2022 December 31, 2023 As of December 31, 2023 Share Impairment Investments Share Distribution/derecognize Share Impairment Investments Cost of equity of in equity Cost of equity gain of share equity Cost of equity of in equity investments loss investment investee investments (loss) (gain)loss investments gain (loss) investment investee RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Jingliang Inter Cloud 6,000 (5,017) — 983 — (2) — 6,000 (5,019) — 981 Jingliang Century Cloud 4,000 — — 4,000 — — — 4,000 — — 4,000 ZJK Energy 5,907 (3,800) — 2,107 — (45) — 5,907 (3,845) — 2,062 WiFire Entities 20,000 (20,000) — — (20,000) — 20,000 — — — — Qidi Chengxin 3,930 (333) — 3,597 — (119) — 3,930 (452) — 3,478 BJ Chaohulian 5,000 (1,505) (3,495) — — — — 5,000 (1,505) (3,495) — Dexin Tonglian 3,000 (333) — 2,667 — (475) — 3,000 (808) — 2,192 SH Edge Interchange* 900 (797) — 103 — (103) — 900 (900) — — Changzhou Gaoxin 210,000 — — 210,000 488,392 5,107 — 698,392 5,107 — 703,499 Zhuhai Private — — — — 23,000 (1,084) — 23,000 (1,084) — 21,916 258,737 (31,785) (3,495) 223,457 491,392 3,279 20,000 750,129 (8,506) (3,495) 738,128 * “SH Edge Interchange” represents Shanghai Edge Cloud Interchange Technology Co., Ltd. 12. LONG-TERM INVESTMENTS, NET (CONTINUED) Equity method investments (continued): The Company through its subsidiary, VNET Beijing, entered into an agreement to invest in the Yizhuang Venture Investment Fund (“Yizhuang Fund”) as a limited partner since April 2012 with capital injection of RMB101,000 and held 27.694% of the investee as of December 31, 2020, 2021. Given the Company holds more than three percent interest in the Yizhuang Fund as a limited partner, the investment is accounted for under the equity method as prescribed in ASC Subtopic 323-10, Investments – Equity Method In September 2017, after the disposal of 66.67% equity interest in the WiFire Entities, the Company held the remaining 33.33% equity interest in the WiFire Entities, which is accounted for equity method investment at fair value at the disposal date. As of December 31, 2022, the equity method investment balance is reduced to nil after the pickup of loss in the WiFire Entities. In October and November 2023, the Company transferred the remaining 33.33% equity interest in the WiFire Entities to third parties with nil consideration. In January 2018, the Company through its subsidiary, VNET Beijing, and a third company jointly set up Beijing Jingliang Interconnected Cloud Technology Inc. (“Jingliang Inter Cloud”) and Jingliang Century Cloud Technology Inc. (“Jingliang Century Cloud”). The Company injected capital of RMB6,000 and RMB4,000 and the Company held 60% and 40% of equity interest in Jingliang Inter Cloud and Jingliang Century Cloud, respectively. Based on the article of association, the Company cannot exercise control over relevant activities of the investee, but it has the ability to exercise significant influence over Jingliang Inter Cloud’s operation and financial decisions. In December 2019, the Company through its subsidiary, VNET Beijing, and a third company jointly set up Chengdu Qidi Chengxin Education Limited (“Qidi Chengxin”). The Company injected capital of RMB3,930 and held 59% of equity interest in Qidi Chengxin. Based on the article of association, the Company cannot exercise control over relevant activities of the investee, but it has the ability to exercise significant influence over operation and financial decisions. In January 2021, the Company through its subsidiary, VNET Beijing, and two third parties jointly set up Beijing Super Internet Technology Research Institute Co., Ltd. (“BJ Chaohulian”). The Company injected capital of RMB5,000 and held 30% of equity interest in BJ Chaohulian. As of December 31, 2021, the equity method investment balance is reduced to nil after the Company pickup of loss amounting to RMB1,505 and recorded impairment of investment amounting to RMB3,495. In September 2022, the Company through its subsidiary, Shanghai Cloud Network Co., Ltd., and five third parties jointly set up Dexin Tonglian (Beijing) Culture Technology Co., Ltd. (“Dexin Tonglian”). The Company injected capital of RMB3,000 and hold 30% of equity interest in Dexin Tonglian. Based on the article of association, the Company cannot exercise control over relevant activities of the investee, but it has the ability to exercise significant influence over operation and financial decisions. In November 2022, the Company through its subsidiary, VNET HK, and a third party jointly set up Changzhou Gaoxin Interconnection Co., Ltd. (“Changzhou Gaoxin”). The Company injected capital of RMB210,000 and held 35% of equity interest in Changzhou Gaoxin. Based on the article of association, the Company cannot exercise control over relevant activities of the investee, but it has the ability to exercise significant influence over operation and financial decisions. In April and May 2023, the Company injected additional capital of RMB488,392 and its shareholding remained at 35%. In February 2023, the Company through its subsidiary, SH Shilian, and Zhuhai VNET Enterprise Management Partnership (Limited Partnership), an entity controlled by the founder of the Company, jointly set up Zhuhai VNET Private Equity Fund Management Co., Ltd. (“Zhuhai Private”). The Company injected capital of RMB23,000 and held 40% of equity interest in Zhuhai Private. Based on the article of association, the Company cannot exercise control over relevant activities of the investee, but it has the ability to exercise significant influence over operation and financial decisions. |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
OTHER NON-CURRENT ASSETS | |
OTHER NON-CURRENT ASSETS | 13. OTHER NON-CURRENT ASSETS As of December 31, 2022 and 2023, other non-current assets included prepayment for acquisition of datacenters and purchase of property and equipment amounting to RMB293,500 and RMB293,500, which consist of 53% and 55% of other non-current assets, respectively. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
BORROWINGS | |
BORROWINGS | 14. BORROWINGS Borrwings were as follows as of the respective balance sheet dates: As of December 31, 2022 2023 RMB RMB Short term bank borrowings — 30,000 Long-term bank borrowings, current portion 289,941 334,511 Other long-term borrowings, current portion 194,079 388,814 484,020 753,325 Long-term bank borrowings, non-current portion 2,694,249 4,170,981 Other long-term borrowings, non-current portion 355,607 942,540 Total borrowings 3,533,876 5,866,846 The short-term bank borrowings outstanding as of December 31, 2023 bore a weighted average interest rate of 3.65% per annum. The long-term borrowings (including current portion) outstanding as of December 31, 2022 and 2023 bore a weighted average interest rate of 5.11% and 4.97% per annum, respectively, and were denominated in RMB. These loans were obtained from financial institutions located in the PRC. As of December 31, 2022 and 2023, unused loan facilities for bank and other borrowings amounted to RMB3,164,371 and RMB2,811,123 , respectively. Borrowings as of December 31, 2022 and 2023 were secured by the following: December 31, 2022 Long-term borrowings (including current portion) Secured by (RMB) 1,879,631 Secured by a subsidiary’s share. 800,989 Secured by a subsidiary’s land-use right with net book value of RMB24,460 (Note 10). 247,171 Secured by a subsidiary’s property and equipment and land-use right with net book value of RMB118,050 and RMB91,435, respectively (Note 8/Note 10), and a subsidiary’s share. 156,077 Secured by a subsidiary’s property and equipment with net book value of RMB231,424 (Note 8), and a subsidiary’s share. 450,008 Unsecured borrowing. 3,533,876 14. BORROWINGS (CONTINUED) December 31, 2023 Short-term borrowings Secured by (RMB) 30,000 Unsecured borrowing. Long-term borrowings (including current portion) Secured by (RMB) 2,180,490 Secured by a subsidiary’s share. 3,101,522 Secured by property and equipment and land-use right with net book value of RMB845,898 and RMB196,195, respectively (Note 8/Note 10), and a subsidiary’s share 554,834 Unsecured borrowing. 5,836,846 The following table summarizes the aggregate required repayments of the principal amounts of the Company’s long-term borrowings, including bank and other borrowings in the succeeding five years and thereafter: RMB For the years ending December 31, 2024 799,314 2025 816,677 2026 751,209 2027 683,110 2028 689,511 2029 and thereafter 2,273,233 |
ACCRUED EXPENSES AND OTHER PAYA
ACCRUED EXPENSES AND OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER PAYABLES | |
ACCRUED EXPENSES AND OTHER PAYABLES | 15. ACCRUED EXPENSES AND OTHER PAYABLES The components of accrued expenses and other payables were as follows: As of December 31, 2022 2023 RMB RMB Payables for purchase of property, equipment and software 1,280,742 1,431,547 Payroll and welfare payables 433,376 477,367 Consideration due to the original shareholders of BJ TenxCloud (1) 229,323 229,323 Liability classified share-based payments (1) 131,116 149,612 Accrued service fees 66,494 126,001 Payables for office supplies and utilities 69,288 105,871 Payables for acquisitions and long-term investments 47,805 99,340 Value-added tax and other taxes payable 31,706 35,391 Interest payables 35,785 77,168 Others 84,844 51,482 2,410,479 2,783,102 (1) On July 15, 2021, the Company acquired 100% of the equity interests in BJ TenxCloud from third party selling shareholders. The balance of consideration due to original shareholders represented the amounts the selling shareholders claimed according to the acquisition agreement. In addition, the Company is obligated to issue various numbers of the shares of the Company or its subsidiary to certain selling shareholders who will remain as the employees of BJ TenxCloud, determinable based on achievements of the financial and operational targets by BJ TenxCloud during various post-acquisition periods. As such share-base payments will be forfeited if these employees cease their employments with the Company, the Company recognized these payments as compensation costs over the requisite service periods. The Company classified the share-based payments as liability classified share-based payments. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | 16. LEASES Leases are classified as operating leases or finance leases in accordance with ASC 842. The Company’s operating leases mainly related to building, office facilities and equipment and the rights to use the land in the PRC. For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments over the term. Certain leases include rental escalation clauses, renewal options and/or termination options, which are factored into the Company’s determination of lease payments when appropriate. As of December 31, 2022 2023 Weighted average remaining lease term: Operating lease 10.7 years 9.7 years Finance lease 18.9 years 18.7 years Weighted average discount rate: Operating lease 7.50 % 7.59 % Finance lease 10.44 % 10.04 % Lease cost for finance leases capitalized were immaterial for the years ended December 31, 2021, 2022 and 2023. For the years ended December 31, 2021 2022 2023 RMB RMB RMB Lease cost Finance lease cost: Depreciation 274,052 224,140 199,926 Interest expenses 124,567 104,088 90,679 Operating lease cost 568,044 691,197 749,800 Total lease cost 966,663 1,019,425 1,040,405 Short-term lease cost and variable lease cost for operating leases and finance leases were immaterial for the years ended December 31, 2021, 2022 and 2023. Other information related to leases was as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases 593,615 635,615 796,541 Financing cash payments for finance leases 579,660 231,046 210,902 16. LEASES (CONTINUED) Future lease payments under operating leases and finance leases as of December 31, 2023 were as follows: Operating Leases Finance Leases RMB RMB 2024 807,678 180,355 2025 739,747 173,799 2026 680,034 165,015 2027 545,468 158,978 2028 528,173 156,920 2029 and thereafter 2,630,069 1,705,594 Total future lease payments 5,931,169 2,540,661 Less: Imputed interest (1,880,246) (1,265,329) Present value of future lease payments* 4,050,923 1,275,332 * Present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to RMB780,164 and RMB3,270,759 for the year ended December 31, 2023, respectively. Present value of future finance lease payments consisted of current portion of finance lease liabilities and non-current portion of finance lease liabilities, amounting to RMB115,806 and RMB1,159,525 for the year ended December 31, 2023, respectively. |
BONDS PAYABLE
BONDS PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
BONDS PAYABLE. | |
BONDS PAYABLE | 17. BONDS PAYABLE On April 15, 2019, the Company issued and sold bonds with an aggregate principal amount of US$300,000 at a coupon rate of 7.875% per annum (“2021 Notes”). The 2021 Notes has matured on October 15, 2021. The 2021 Notes were listed and quoted on the SGX-ST. Interest on the 2021 Notes is payable semi-annually in arrears on April 15 and October 15 in each year, beginning from October 15, 2019. Net proceeds from 2021 Notes after deducting issuance costs were RMB1,976,474. The 2021 Notes are unsecured and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated to the bonds; equal in right of payment to any of the Company’s liabilities that are not so subordinated, including the 2020 Notes; effectively junior in the right of payment to any secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including accounts payables) of the Company’s subsidiaries and Consolidated VIEs. On October 4, 2021, the Company repaid the outstanding 2021 Notes with principal amount of US$300,000. |
PERPETUAL CONVERTIBLE PREFERRED
PERPETUAL CONVERTIBLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2023 | |
PERPETUAL CONVERTIBLE PREFERRED SHARES | |
PERPETUAL CONVERTIBLE PREFERRED SHARES | 18. PERPETUAL CONVERTIBLE PREFERRED SHARES In June 2020, the Company issued 150,000 Series A perpetual convertible preferred shares (the “Series A Preferred Shares”) at the subscription price of 1,000 US dollars per subscribed share for a total cash consideration of US$150,000. The significant terms of the Series A Preferred Shares are summarized as follows: Dividends From and after the original issuance date, cumulative dividends on each Series A Preferred Share will accrue in arrears at the dividend rate of 4.5% per annum on the original issuance price of 1,000 US dollars per subscribed share. All accrued dividends on any Series A Preferred Share will be paid in cash, when, as and if declared by the Board of Directors out of funds legally available therefor or upon a liquidation of the Company. 18. PERPETUAL CONVERTIBLE PREFERRED SHARES (CONTINUED) Dividends (continued) Holders of the Series A Preferred Shares will also be entitled to receive any dividends declared by the Board of Directors on a pro rata basis with the ordinary shares determined on an as-converted basis. The dividends or distributions shall be distributed among all holders of ordinary shares and Series A Preferred Shares in proportion to the number of ordinary shares that would be held by each such holder if all Series A Preferred Shares had been converted to ordinary shares as of the record date fixed for determining those entitled to receive such distribution. For dividends on cumulative preferred stock classified in permanent equity, dividends are not recognized until declared by the Board of Directors. RMB28,637 dividend was declared by the Company on the conversion date. Liquidation preference In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series A Preferred Shares will be entitled to be paid out of the assets of the Company available for distribution to its shareholders before any distribution or payment out of the assets of the Company will be made to the holders of ordinary shares at a preferential amount in cash equal to the greater of (i) the aggregate original issuance price of 1,000 US dollars per Series A Preferred Shares, plus any unpaid, accrued and accumulated dividends on all such Series A Preferred Shares (whether or not declared) and (ii) the aggregate value that such holders of Series A Preferred Shares would have received had all holders of Series A Preferred Shares, immediately prior to such Liquidation, converted all Series A Preferred Shares then outstanding (together with any unpaid, accrued and accumulated dividends thereon) into Class A ordinary shares at the applicable conversion price then in effect. If the Company has insufficient assets to pay the holders of the Series A Preferred Shares the full preferential amount, (a) the holders of the Series A Preferred Shares will share ratably in any distribution of the remaining assets of the Company in proportion to the respective full preferential amounts which would otherwise be payable to each such holder in full, and (b) the Company will not make or agree to make, or set aside for the benefit of the holders of ordinary shares, any payments to the holders of ordinary shares. Conversion Series A Preferred Shares can be converted at any time at the option of the holder into Class A ordinary shares by dividing the original issuance price plus any unpaid, accrued and accumulated dividends up to, but excluding, the conversion date by the conversion price in effect immediately prior to such conversion. Series A Preferred Shares will be mandatorily converted into Class A ordinary shares at any time after six months from the original issuance date when the daily volume-weighted average price of the ADS (“VWAP”) of certain period equals or exceeds the 200% of the conversion price per ADS (“Conversion Threshold”). Conversion price is initially, US$2.8333 per Class A Ordinary Shares or US$17.00 per ADS and is subject to additional adjustments if the Company makes certain dilutive issuances of shares. Voting Each Series A Preferred Shares holder will be entitled to a number of vote equal to the number of Class A ordinary shares then issuable upon its conversion into Class A ordinary shares at the record date for determination of the shareholders entitled to vote on such matters, or, if no such record date is established, at the date when such vote is taken or any written consent of shareholders is solicited. Accounting for the Series A Preferred Shares The Series A Preferred Shares are classified as permanent equity and initially recorded at the issuance price at the time of closing. There were no embedded features that qualified for bifurcation and separate accounting in accordance with ASC 815-10, Derivatives and Hedging 18. PERPETUAL CONVERTIBLE PREFERRED SHARES (CONTINUED) Accounting for the Series A Preferred Shares (continued) The Company early adopted ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity On March 1, 2021, 150,000 Series A Preferred Shares all has been converted into 54,507,816 Class A Ordinary Shares at the conversion price US$17.00 per ADS. |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2023 | |
CONVERTIBLE PROMISSORY NOTES | |
CONVERTIBLE PROMISSORY NOTES | 19. CONVERTIBLE PROMISSORY NOTES 2025 Convertible Notes During the year ended December 31, 2020, the Company entered into agreements with a group of investors led by Goldman Sachs Asia Strategic Pte. Ltd. (the “Purchasers”) to issue the Company’s convertible promissory note (the “2025 Convertible Notes”) for total gross proceeds of US$200,000. The 2025 Convertible Notes will mature in five years and, bear interest at the rate of 2% per annum from the issuance date which will be payable semiannually in arrears in cash. Conversion Purchasers have the option to convert all or a portion of the outstanding 2025 Convertible Notes and any accrued and unpaid interest, into ADSs at the conversion price at any time. The conversion price will initially be US$12.00 per ADS or will be subject to customary adjustments when the decrease in VWAP exceeds certain threshold. In addition, the conversion price will be adjusted in the event when the Company makes certain dilutive issuances of shares. Redemption upon maturity Unless previously redeemed or converted, the Company shall redeem the 2025 Convertible Notes on the maturity date in an amount equal to the sum of (i) 115% of the then outstanding principal amount of the 2025 Convertible Notes and (ii) the interest accrued but unpaid on the maturity date. The Company may not redeem the 2025 Convertible Notes at its option prior to the maturity date. Early redemption at the option of the Purchasers If any portion of the outstanding principal amount of the 2025 Convertible Notes has not been converted by the third anniversary of the date of issuance of the 2025 Convertible Notes, the Purchasers at their sole discretion will have the right to require the Company to redeem, in whole or in part, the outstanding principal amount of the 2025 Convertible Notes which has not been converted previously in an amount equal to the sum of (i) 109% of the outstanding principal amount and (ii) the interest accrued but unpaid on the outstanding principal amount. The Company elected to account for the 2025 Convertible Notes at fair value as a whole. Issuance costs including underwriting commissions and offering expenses were approximately RMB18,932, which were recognized in earnings as incurred. During the years ended December 31, 2020 and 2021, Purchasers of the 2025 Convertible Notes exercised the right to convert 23,710,140 and 42,401,010 newly issued Class A ordinary shares at the conversion price of US$12 per ADS. Upon conversion, the fair value of converted portion was RMB720,547 and RMB1,639,806, respectively. Issuance costs was approximately RMB2,939 and nil, respectively, which were credited to capital accounts with the changes in the fair value up to the conversion date recorded in earning. No conversion rights were exercised by the Purchasers for the years ended December 31, 2022 and 2023. 19. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 2025 Convertible Notes (continued) From March to June 2023, the Company received notices from the holders of the 2025 Convertible Notes, requiring the Company to redeem the 2025 Convertible Notes at 109% of the principal amount plus all accrued but unpaid interest within three months since the receipt of notices. The Company repurchased all of the outstanding 2025 Convertible Notes with principal amount of US$68,000 during the year ended December 31, 2023. The interest expense on the convertible promissory was recorded based on the stated rate of 2% in the interest expense within the consolidated statements of operations. For the years ended December 31, 2021, 2022 and 2023, the interest expense was RMB9,703, RMB9,147 and RMB4,471, respectively. As of December 31, 2022, the fair value of the remaining 2025 Convertible Notes was RMB537,778. The changes in fair value gain of convertible promissory notes of RMB829,149,RMB22,626 and RMB21,816 were recognized in the changes in the fair value of financial liabilities in the consolidated statement of operations for the years ended December 31,2021, 2022 and 2023, respectively. 2026 Convertible Notes In January 2021, the Company issued US$600,000 principal amount 0.00% convertible senior notes including US$75,000 sold upon the exercise of the over-allotment option (the “2026 Convertible Notes”). The 2026 Convertible Notes will mature on February 1, 2026 unless redeemed, repurchased or converted prior to such date. Holders may convert their 2026 Convertible Notes at their option prior to the close of business on the business day immediately preceding August 1, 2025 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of ADSs’, each representing six Class A ordinary shares of the Company, par value US$0.00001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period in which the trading price per 1,000 US dollars principal amount of the 2026 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ADSs and the conversion rate on each such trading day; (3) if the Company calls the 2026 Convertible Notes for a tax or optional redemption; or (4) upon the occurrence of specified corporate events. On or after August 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2026 Convertible Notes at any time. Upon conversion, the Company will pay or deliver, as the case may be, cash, ADSs, or a combination of cash and ADSs, at its election. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and ADSs, the amount of cash and ADSs, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 40 trading day observation period. The initial conversion rate of the 2026 Convertible Notes is 18.3574 of the Company’s ADS per 1,000 US dollars principal amount of the 2026 Convertible Notes (which is equivalent to an initial conversion price of approximately US$54.47 per ADS). The conversion rate will be subject to adjustment in some events. In addition, following certain corporate events that occur prior to the maturity date, if a make-whole fundamental change occurs prior to the maturity date of the 2026 Convertible Notes, or under certain circumstances upon a tax redemption or the Company’s optional redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2026 Convertible Notes in connection with such corporate event, such make-whole fundamental change or such notice of tax redemption or notice of optional redemption, as the case may be. Upon conversion, the Company will pay or deliver, as the case may be, cash, ADSs (plus cash in lieu of a fractional ADS) or a combination of cash and ADSs, at its election. The conversion option may be settled in cash, ADSs, or a combination of cash and ADSs at the Company’s option. 19. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 2026 Convertible Notes (continued) The Company may not redeem the 2026 Convertible Notes prior to February 6, 2024 unless certain tax-related events occur. From February 6, 2024 to the 40th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2026 Convertible Notes, at its option, if the last reported sale price of the Company’s ADSs has been at least 130% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately prior to the date the Company provides notice of redemption; and (ii) the trading day immediately preceding the date the Company sends such notice. Holders of the notes have the right to require the Company to repurchase for cash all of the 2026 Convertible Notes, or any portion of the principal thereof, on February 1, 2024 or in the event of certain fundamental changes. The redemption price will equal 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus any accrued and unpaid special interest, if any, to, but not including, the redemption date. ASU 2020-06 simplified an issuer’s accounting for convertible instrument by eliminating the cash conversion and beneficial conversion feature models in ASC 470-20, Debt with Conversion and Other Options The 2026 Convertible Notes was accounted for as one unit of liability account using amortized cost method under ASU 2020-06, with no embedded derivative features being bifurcated. The gross proceeds from issuance of the 2026 Convertible Notes were US$600,000. Debt issuance costs including underwriting commissions and offering expenses were approximately US$13,841, which were presented as deduction from liability and amortized into interest expense over the remaining period of 5 years. As of December 31, 2022 and 2023, the net carrying amount of the 2026 Convertible Notes was RMB4,119,048 and RMB4,208,495, respectively. For the years ended December 31, 2021, 2022 and 2023, no coupon interest expense was recognized. The amortization of issuance costs was RMB16,216, RMB18,525 and RMB19,499 for the years ended December 31, 2021, 2022 and 2023, respectively. The effective interest rate was 0.47% for the years ended December 31, 2021, 2022 and 2023. As of December 31, 2023, the balance of the 2026 Convertible Notes was presented as current liability since the holders are able to exercise their redemption right on February 1, 2024. In January 2024, the Company received notices from the holders of the 2026 Convertible Notes, requiring the Company to redeem the 2026 Convertible Notes at 100% of the principal amount. The Company repurchased all of the outstanding 2026 Convertible Notes with principal amount of of US$600,000 in February 2024. 2027 Convertible Notes On January 28, 2022, the Company entered into an investment agreement with funds managed by Blackstone Tactical Opportunities (each fund as an “Investor Party”) to issue the Company’s convertible promissory note (the “2027 Convertible Notes”) with principal amount of US$250,000. The 2027 Convertible Notes will mature in five years unless redeemed or converted prior to maturity date. For any holder that is an Investor Party as of the maturity date, the maturity date shall be extended to the 31st day after the maturity date (the “Investor Maturity Date”) and unless the 2027 Convertible Notes held by such holder have been duly redeemed or converted prior to the Investor Maturity Date, the Company’s repayment obligation to such holder will be satisfied by issuance and delivery of an aggregate number of Series A-1 perpetual convertible preferred shares equal to (1) the remaining portion of the principal amount, divided by (2) 1,000 US dollars, in repayment of the 2027 Convertible Notes. 2027 Convertible Notes bear interest at the rate of 2% per annum and paid in cash semi-annually unless prior written notice is provided to the holders by the Company. 19. CONVERTIBLE PROMISSORY NOTES (CONTINUED) 2027 Convertible Notes (continued) Conversion 2027 Convertible Notes are convertible at any time on and after the original issuance date, at the option of holders, into Class A ordinary shares of the Company at a conversion price of US$1.8333 per Class A ordinary share, or into ADSs at a conversion price of US$11.00 per ADS. The conversion prices are subject to adjustment under the terms of the 2027 Convertible Notes. The Company may effect a mandatory conversion at its election at any time on or after the third anniversary of the original issuance date, if its ADSs achieve a price threshold of 200% of the conversion price for a specified period. Redemption The holders have the right to require the Company to redeem the 2027 Convertible Notes during the Redemption Period as defined below in an amount equal to the sum of: (a) the principal amount of the 2027 Convertible Notes; plus (b) the total amount of the accrued interest, and any stub period interest that has accrued until, but excluding, the date the redemption price is paid in full; plus (c) the incremental amount in case a fundamental change specified in the investment agreement has occurred. Incremental amount is equal to (a) 50% of the principal amount, minus (b) the interest that has already been paid in cash, minus (c) the fair market value of a dividend or distribution paid to the holder in any form other than cash or as Class A Ordinary Shares, minus (d) the accrued interest and minus (e) the stub period interest accrued. Any portion of the redemption price not paid by the Company on the redemption date shall accrue interest at a rate of 10% per annum annually from the redemption date to the date when the redemption price is paid in full. “Redemption Period” means: (a) in the case of any holder that is the Investor Party, (i) the period commencing on the date of a fundamental adverse regulatory change, a fundamental change or an event of default as defined in the investment agreement and ending on the fifth anniversary of the original issuance date, and (ii) the thirty-day period beginning on the fifth anniversary of the original issuance date; and (b) in the case of any holder that is not Investor Party, the period commencing on the date of a fundamental adverse regulatory change or an event of default and ending on the fifth anniversary of the original issuance date. Fundamental change represents events defined in the investment agreement, including that a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than the Company or any of its wholly-owned subsidiaries, has become or files any report with the SEC indicating that such person or group has become the direct or indirect “beneficial owner” of the Company’s equity securities representing more than fifty percent (50%) of the voting power of all of the Company’s then-outstanding equity securities. The gross proceeds from issuance of the 2027 Convertible Notes were US$250,000. Debt issuance costs were approximately US$162, which were presented as deduction from liability and amortized into interest expense over the remaining period of 5 years. As of December 31, 2022 and 2023, the net carrying amount of the 2027 Convertible Notes was RMB1,740,211 and RMB1,769,946, respectively. For the years ended December 31, 2022 and 2023, the coupon interest expense was RMB30,498 and RMB35,234, respectively. The effective interest rate was both 2.02% for the years ended December 31, 2022 and 2023. The redemption feature is required to be bifurcated as a separate unit of liability account and measured at fair value as it is not clearly and closely related to the debt host contract. After the bifurcation, the 2027 Convertible Notes was accounted for using amortized cost method. The fair value of the redemption feature was immaterial initially and subsequently at December 31, 2022. As of December 31, 2023, the fair value of the bifurcated redemption feature was RMB188,706 and was recored as derivative liablitiy in the consolidated balance sheet. The changes in fair value of derivative liability was recognized in the changes in the fair value of financial liabilities in the consolidated statement of operations for the year ended December 31, 2023. |
DEFERRED GOVERNMENT GRANTS
DEFERRED GOVERNMENT GRANTS | 12 Months Ended |
Dec. 31, 2023 | |
DEFERRED GOVERNMENT GRANTS. | |
DEFERRED GOVERNMENT GRANTS | 20. DEFERRED GOVERNMENT GRANTS During the years ended December 31, 2021, 2022 and 2023, the Company received nil, RMB5,000 and RMB155,333 government grants respectively from the relevant PRC government authorities for the use in construction of property and equipment. These grants are initially deferred and subsequently recognized in the consolidated statements of operations when the Company has complied with the conditions or performance obligations attached to the related government grants, such as completion of the construction of relevant property and equipment, and the grants are no longer refundable. Grants that subsidize the construction cost of property and equipment are amortized over the life of the related assets as a reduction of the associated depreciation expense. Movements of deferred government grants were as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Balance at beginning of the year 6,174 4,368 6,318 Additions — 5,000 155,333 Recognized as a reduction of depreciation expense (1,806) (3,050) (8,477) Balance at end of the year 4,368 6,318 153,174 |
EMPLOYEE CONTRIBUTION PLAN
EMPLOYEE CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYEE CONTRIBUTION PLAN | |
EMPLOYEE CONTRIBUTION PLAN | 21. EMPLOYEE CONTRIBUTION PLAN As stipulated by the regulations of the PRC, full-time employees of the Company in the PRC participate in a government-mandated multiemployer defined contribution plan organized by municipal and provincial governments. Under the plan, certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The Company is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses for the plan were RMB158,673, RMB191,914 and RMB208,556 for the years ended December 31, 2021, 2022 and 2023, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED COMPENSATION. | |
SHARE-BASED COMPENSATION | 22. SHARE - (a) Option granted to employees In order to provide additional incentives to employees and to promote the success of the Company’s business, the Company adopted a share incentive plan in 2010 (the “2010 Plan”). Under the 2010 Plan, the Company may grant options and RSUs to its employees, directors and consultants to purchase an aggregate of no more than 39,272,595 ordinary shares of the Company. The 2010 Plan was approved by the Board of Directors and shareholders of the Company on July 16, 2010. The 2010 Plan is administered by the Board of Directors or the Compensation Committee of the Board as set forth in the 2010 Plan (the “Plan Administrator”). All share options to be granted under the 2010 Plan have a contractual term of ten years 4 years In order to further promote the success and enhance the value, the Company adopted a share incentive plan in 2014 (the “2014 Plan”). Under the 2014 Plan, the Company may issue an aggregate of no more than 20,461,380 shares (“Maximum Number”) and such Maximum Number should be automatically increased by a number that is equal to 15% of the number of new shares issued by the Company from time to time. The maximum aggregate number of ordinary shares to be issued under 2014 Plan was subsequently amended to 39,606,817, as approved by the Board of Directors and shareholders of the Company on October 30, 2015. All share options, restricted shares and restricted share units to be granted under the 2014 Plan have a contractual term of ten years 4 years In order to continuously attract and retain talents, the Company adopted a share incentive plan in 2020 (the “2020 Plan”). Under the 2020 Plan, the Company is authorized to issue an aggregate of 46,560,708 Class A ordinary shares of the Company (equal to the sum of (i) 5% of the Company’s share capital as of the date hereof, calculated on an as-converted basis by taking into consideration all the convertible promissory notes issued and to be issued by the Company, and (ii) 7,562,532 Class A ordinary shares reserved under the “2010 Plan” and “2014 Plan” for future grants) will be reserved for future issuance. 22. SHARE - (a) Option granted to employees (continued) After adoption of the 2020 Plan, the Company ceased to grant any new awards under the 2010 Plan and 2014 Plan while the outstanding awards granted thereunder will remain effective and can be amended by the Company from time to time pursuant to the applicable terms thereto. The 2020 Plan was approved by the Board of Directors and shareholder of the Company on May 13, 2020. The following table summarized the Company’s employee share option activity under the 2010 Plan: Weighted Weighted average average remaining Aggregate Number of exercise contractual intrinsic options price term value (US$) (Years) (US$) Outstanding, January 1, 2023 359,202 0.17 1.96 — Exercised — — — — Outstanding, December 31, 2023 359,202 0.17 1.00 114 Vested as of December 31, 2023 359,202 0.17 1.00 114 Exercisable as of December 31, 2023 359,202 0.17 1.00 114 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the underlying stock at each reporting date, for those awards that have an exercise price below the estimated fair value of the Company’s shares. As of December 31, 2023, the Company had options outstanding to purchase an aggregate of 359,202 shares with an exercise price below the fair value of the Company’s shares, resulting in an aggregate intrinsic value of RMB809 (US$114). The aggregate fair value at the grant date of the outstanding options as of December 31, 2023 was determined to be RMB5,211. The total fair value of share options exercised during the years ended December 31, 2021, 2022 and 2023 was US$122, US$4 and nil, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2021, 2022 and 2023 was US$67, US$2 and nil, respectively. (b) The Company granted 3,534,767, 866,716 and 20,550 RSUs in 2021, 2022 and 2023, respectively, with performance conditions whereby a predetermined number will vest upon the annual performance review in accordance with predetermined performance targets for the grantees over a one The Company granted 298,454, 22,000 and nil RSUs in 2021, 2022 and 2023, respectively, with performance conditions whereby a predetermined number will vest upon with the achievement of predetermined operation performance targets for the Company. To the extent that the Company considered the performance targets were probable of achievement, the Company recognized the related compensation expenses using the accelerated recognition method. 22. SHARE - (b) The Company granted 1,368,227 RSUs in 2023, which generally vest over a two four The following table summarized the Company’s RSUs activity under the 2014 and 2020 Plans: Weighted Weighted average average Aggregate Number of grant date remaining intrinsic RSUs fair value contractual life value (US$) (Years) (US$) Unvested, January 1, 2023 1,700,864 11.28 6.1 — Granted 1,388,777 2.96 — — Vested (507,282) 5.04 — — Forfeited (2,553) 13.26 — — Unvested, December 31, 2023 2,579,806 8.07 6.6 7,404 Share-based compensation expenses for RSUs are measured based on the closing fair market value of the Company’s ADS on the date of grant. The aggregate fair value of the unvested RSUs as of December 31, 2023 was RMB52,568 (US$7,404). The weighted average grant date fair value of RSUs granted during the years ended December 31, 2021, 2022 and 2023 was US$12.31, US$5.48 and US$2.96, respectively. The total fair value of RSUs vested during the years ended December 31, 2021, 2022 and 2023 was US$42,672, US$6,883 and US$2,557, respectively. As of December 31, 2023, there was RMB34,916 (US$4,918) of unrecognized share-based compensation expenses related to RSUs which is expected to be recognized over a weighted average vesting period of 1.1 years. Total unrecognized share-based compensation expenses may be adjusted for future changes when actual forfeitures incurred. (c) Share-based compensation due to business combination On July 15, 2021, the Company acquired 100% of the equity interests in BJ TenxCloud from third party selling shareholders. The Company is obligated to issue a variable number of the shares of the Company or its subsidiary for a fixed monetary amount to certain selling shareholders who will remain as the employees of BJ TenxCloud, determinable based on achievements of the financial and operational targets by BJ TenxCloud during various post-acquisition periods. As such share-based payments will be forfeited if these employees cease their employments with the Company, the Company recognized these payments as compensation costs over the requisite service periods ranging from 12 months 36 months For the years ended December 31, 2021, 2022 and 2023, the Company recorded compensation cost of RMB55,156, RMB75,960 and RMB18,496, within the Company’s consolidated statements of operations. As of December 31, 2023, there was no unrecognized share-based compensation expenses in relation to the above transaction. Total share-based compensation expenses relating to share options, RSUs granted to employees and share-based compensation due to business combination recognized for the years ended December 31, 2021, 2022 and 2023 were as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Cost of revenues 13,713 563 — Sales and marketing expenses 2,545 17,794 3,141 General and administrative expenses 292,947 85,508 28,883 Research and development expenses 10,805 14,305 3,272 320,010 118,170 35,296 |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2023 | |
TAXATION | |
TAXATION | 23. TAXATION Enterprise income tax (“EIT”) Cayman Islands The Company is incorporated in the Cayman Islands and conducts its primary business operations through the subsidiaries and VIEs in the PRC and Hong Kong. Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain arising in Cayman Islands. British Virgin Islands Subsidiaries in British Virgin Islands are not subject to tax on income or capital gains under the current laws of the British Virgin Islands. Additionally, upon payments of dividends by the Company to its shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Subsidiaries in Hong Kong are subject to Hong Kong profits tax rate of 16.5% for the years ended December 31, 2021, 2022 and 2023. A two-tiered profits tax rates regime was introduced in 2018 under which the first HK$2 million of assessable profits earned by an eligible company will be taxed at 8.25% and the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. Additionally, upon payments of dividends by the Company to its shareholders, no HK withholding tax will be imposed. The Hong Kong government has enacted new tax laws to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (“OECD”), which are expected to come into effect from 1 January 2025. The Company continues to monitor the local legislation for Hong Kong and development of Pillar Two model rules in other jurisdictions the Company operates and assess the potential impact. Taiwan DYX Taiwan branch is incorporated in Taiwan and is subject to Taiwan profits tax rate of 20% for the years ended December 31, 2021, 2022 and 2023. The PRC The Company’s PRC subsidiaries are incorporated in the PRC and subject to the statutory rate of 25% on the taxable income in accordance with the Enterprise Income Tax Law (The “EIT Law”), which was effective since January 1, 2008, except for certain entities eligible for preferential tax rates. Dividends, interests, rent or royalties payable by the Company’s PRC subsidiaries, to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor ‘s disposition of assets (after deducting the net value of such assets) shall be subject to 10% withholding tax, unless the respective non-PRC resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with China that provides for a reduced withholding tax rate or an exemption from withholding tax. VNET Beijing was qualified for a High and New Technology Enterprise (“HNTE”) since 2008 and is eligible for a 15% preferential tax rate. In October 2014, VNET Beijing obtained a new certificate and reapplied the certificate in October 2017, 2020 and 2023, with a validity term of three years. In accordance with the PRC Income Tax Laws, an enterprise awarded with the HNTE certificate may enjoy a reduced EIT rate of 15%. For the years ended December 31, 2021, 2022 and 2023, the tax rate for VNET Beijing was 15%, 15% and 15%, respectively. 23. TAXATION (CONTINUED) Enterprise income tax (“EIT”) (continued) The PRC (continued) In April 2011, Xi’an Sub, a subsidiary located in Shaanxi Province, was qualified for a preferential tax rate of 15% and started to apply this rate from then on. The preferential tax rate is awarded to companies that are located in West Regions of China which operate in certain encouraged industries. For the years ended December 31, 2021, 2022 and 2023, the tax rate assessed for Xi’an Sub was 15%. In October 2015, SH Blue Cloud, a subsidiary located in Shanghai, was qualified for a HNTE and became eligible for 15% preferential tax rate. The certificate was reapplied in November 2018 and November 2021 with a validity term of three years. Accordingly, for the years ended December 31, 2021, 2022 and 2023, SH Blue Cloud enjoyed a preferential tax rate of 15%. In November 2016, SZ DYX, a subsidiary located in Guangdong Province, was qualified for a HNTE and became eligible for 15% preferential tax rate effective for three consecutive years and the certificate was reapplied in November 2019 and December 2022 with a validity term of three years. Accordingly, for the years ended December 31, 2021, 2022 and 2023, SZ DYX enjoyed a preferential tax rate of 15%. In December 2016, BJ TenxCloud, a subsidiary located in Beijing and the Company acquired in July 2021, was qualified for a HNTE and became eligible for 15% preferential tax rate effective for three consecutive years and the certificate was reapplied in December 2019 and December 2022 with a validity term of three years. Accordingly, for the years ended December 31, 2021, 2022 and 2023, BJ TenxCloud enjoyed a preferential tax rate of 15%. In December 2019, SH Hesheng, a subsidiary located in Shanghai, in which the Company acquired 100% of the equity in November 2021, was qualified for a HNTE and became eligible for 15% preferential tax rate effective for three consecutive years. For the years ended December 31, 2021, 2022 and 2023, the tax rate assessed for SH Hesheng was 15%, 25% and 25%, respectively. The EIT Law also provides that enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC are considered PRC tax resident enterprises and subject to PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. The administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. The Company does not believe that the legal entities organized outside the PRC should be considered as residents for EIT Law purposes. If such an entity is deemed as a PRC tax resident, it will be subject to 25% PRC EIT under the EIT Law on its worldwide income, meanwhile the dividend it receives from another PRC tax resident company will be exempted from 25% PRC income tax. Income (loss) before income taxes consisted of: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Non-PRC 675,369 (421,597) (331,586) PRC (48,861) (206,933) (2,151,209) 626,508 (628,530) (2,482,795) 23. TAXATION (CONTINUED) Enterprise income tax (“EIT”) (continued) Income tax expenses comprised of: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Current (111,082) (115,577) (157,526) Deferred (325) (17,887) 43,152 (111,407) (133,464) (114,374) The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2021, 2022 and 2023 applicable to the PRC operations to income tax expenses were as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Income (loss) before income taxes 626,508 (628,530) (2,482,795) Income tax (expenses) benefits computed at applicable tax rates (25%) (156,627) 157,133 620,699 Non-deductible expenses (13,116) (72,156) (700) Research and development expenses 45,122 67,789 65,863 Preferential rate 14,232 (6,163) (6,140) Current and deferred tax rate differences 26,115 15,847 11,036 International rate differences 120,678 (75,119) (101,585) Tax exempted income 14,536 249 2,803 Foreign investment (49,815) (39,224) (53,617) Unrecognized tax benefits (12,338) (13,674) (11,283) Change in valuation allowance (79,733) (135,732) (606,071) Prior year provision to return true up (22,898) (28,949) (34,759) Others 2,437 (3,465) (620) Income tax expenses (111,407) (133,464) (114,374) 23. TAXATION (CONTINUED) Deferred Tax The significant components of deferred taxes were as follows: As of December 31, 2022 2023 RMB RMB Deferred tax assets Allowance for doubtful debt 52,658 125,500 Impairment of long-lived assets 40,784 166,576 Impairment of long-term investments 3,024 4,866 Accrued expense 22,108 39,896 Tax losses 358,454 849,672 Property and equipment 38,365 2,919 Intangible assets 7,142 9,432 Finance lease 372,997 386,327 Deferred government grant 1,714 3,357 Operating lease 768,638 949,362 Loss picked up on equity method investments 69,440 10,558 Valuation allowance (397,457) (955,738) Total deferred tax assets, net of valuation allowance 1,337,867 1,592,727 Deferred tax liabilities Intangible assets 266,922 405,964 Property and equipment 360,989 172,095 Capitalized interest expense 39,606 49,544 Finance lease 289,586 296,789 Operating lease 768,638 949,362 Investment in subsidiaries 98,608 159,691 Total non-current deferred tax liabilities 1,824,349 2,033,445 Net deferred tax liabilities (486,482) (440,718) Analysis as: Deferred tax assets 196,098 247,644 Deferred tax liabilities 682,580 688,362 Net deferred tax liabilities (486,482) (440,718) As of December 31, 2023, the Company has net tax operating losses from its PRC subsidiaries and its Consolidated VIEs, as per filed tax returns, of RMB2,099,407, which will expire at various times between 2024 and 2033 and the majority expiring by 2028, if not utilized As of December 31, 2023, the undistributed earnings of the Company’s PRC subsidiaries the Company intends to permanently reinvested were RMB1,803,272 . Other than these indefinitely reinvested amount, as of December 31, 2023, the Company has recognized deferred tax liabilities amounting to RMB 23. TAXATION (CONTINUED) Deferred Tax (continued) The following table presents the movements of the valuation allowance: For the years ended December 31, 2022 2023 RMB RMB Balance at beginning of year 261,960 397,457 Addition 135,732 606,071 Expiration (235) (47,790) Balance at end of year 397,457 955,738 Unrecognized Tax Benefits As of December 31, 2022 and 2023, the Company recorded unrecognized tax benefits of RMB87,174 and RMB98,457, respectively. The unrecognized tax benefits and its related interest are primarily related to non-deductible expenses and accrued expenses. RMB61,827 of the total unrecognized tax benefits, ultimately recognized, will impact the effective tax rate. It is possible that the amount of uncertain tax benefits will change in the next 12 months, however, an estimate of the range of the possible outcomes cannot be made at this time. A roll-forward of unrecognized tax benefits principal was as follows: For the years ended December 31, 2022 2023 RMB RMB Balance at beginning of year 64,854 64,528 Reversal based on tax positions related to prior years (418) — Additions based on tax positions related to the current year 92 — Balance at end of year 64,528 64,528 For the years ended December 31, 2021, 2022 and 2023, the Company recorded interest expense of RMB6,606, RMB9,874 a |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 24. RELATED PARTY TRANSACTIONS a) Name of related parties Relationship with the Company Tuspark Innovation Venture Ltd. (“Tuspark Innovation”) The controlling shareholder of the Company before April 13,2021 Ziguang Financial Leasing Co., Ltd. (“Ziguang Finance Leasing”) (1) A company controlled by controlling shareholder of the Company before April 13, 2021 Beijing Huaqing Property Management Co., Ltd. (“Beijing Huaqing”) (1) A company controlled by controlling shareholder of the Company before April 13, 2021 Shanghai Shibei Hi-Tech Co., Ltd. (“SH Shibei”) Noncontrolling shareholder of a subsidiary Shanghai Puping Information Technology Co., Ltd. (“Shanghai Puping”) (2) A company controlled by minority shareholder of the Company Beijing Chengyishidai Network Engineering Technology Co., Ltd. (“CYSD”) (4) Equity investee of the Company before October 16, 2023 Jingliang Interconnected Cloud Technology Co., Ltd. (“Jingliang Inter Cloud”) Equity investee of the Company Beijing New Internet Digital Technology Research Institution Limited (“BJ New Internet”) Equity investee of the Company Anhui Suzhou Century Broadband Data Technology Co., Ltd. (“SZ Century”) (3) A company controlled by an equity investee of principal shareholder of the Company from December 1, 2021 to October 31, 2022 SH Edge Interchange Equity investee of the Company since September 30, 2022 Changzhou Gaoxin Equity investee of the Company Sanhe Mingtai Machinery Manufacturing Co., Ltd. (“Sanhe Mingtai”) Noncontrolling shareholder of a subsidiary since March 1, 2023 Beijing Jiwa Forest System Technology Co., Ltd. (“Beijing Jiwa”) A company controlled by the founder of the Company since October 1, 2023 * These are the related parties that have engaged in significant transactions with the Company for the years ended December 31, 2021, 2022 and 2023. (1) These companies are ultimately controlled by the same party. Tuspark Innovation was the controlling shareholder as of December 31, 2020. These companies ceased to be related parties as the Company repurchased shares from Tuspark Innovation on April 13, 2021. (2) This entity is controlled by Waburg Pincus, a significant minority shareholder of the Company. (3) SZ Century was controlled by an equity investee of a principal shareholder of the Company from December 1, 2021. SZ Century ceased to be a related party as the equity interests in SZ Century was disposed by the equity investee of the principal shareholder on October 31, 2022. (4) This company was disposed by the Company in September 2017, included in WiFire Entities, and determined by the Company as a related party before the Company disposed the remaining equity interests held in October 2023. 24. RELATED PARTY TRANSACTIONS (CONTINUED) b) For the years ended December 31, 2021 2022 2023 RMB RMB RMB Services provided to: -SZ Century 1,445 14,089 — -SH Edge Interchange — 651 938 -Jingliang Inter Cloud 480 — — -BJ New Internet 170 — — -Others 144 2 — Services provided by: -CYSD 38,918 36,673 31,119 -Beijing Huaqing 1,254 — — -Sanhe Mingtai (1) — — 17,366 -Beijing Jiwa — — 1,891 -Others 1,223 513 333 Loan to: -Shanghai Puping 75,611 — 80,263 - BJ New Internet 261 — — -SH Edge Interchange — 500 1,000 -Sanhe Mingtai — — 33,785 Receipt of loan to: -SH Shibei — — 9,800 Loan by: -Changzhou Gaoxin (2) — — 350,000 Interest income from loan to: -SH Shibei 1,321 — (1,321) -SH Edge Interchange — 1 32 Interest expense by loan to: -Changzhou Gaoxin — — 13,183 Lease payment paid to: -Ziguang Finance Leasing 10,431 — — -Beijing Qidi Yefeng 2,154 — — -Sanhe Mingtai (1) — — 10,801 Cash consideration for shares repurchase -Tuspark Innovation 1,701,804 — — (1) The Company leased properties for data centers from Sanhe Mingtai. Lease cost and property management fee was RMB14,268 and RMB3,098 for the period from March 1, 2023 to December 31, 2023, respectively. As of December 31, 2023, ROU assets of RMB171,629 and lease liabilities of RMB173,628 were associated with such leases. (2) In May 2023, the Company obtained a loan in the amount of RMB350,000 from Changzhou Gaoxin at an interest rate of 6.0% per annum. The maturity date of the loan was March 2024, which was subsequently extended to July 2024 in March 2024. 24. RELATED PARTY TRANSACTIONS (CONTINUED) c) As of December 31, 2022 2023 RMB RMB Amounts due from related parties: Current: -Shanghai Puping 138,142 218,405 -SH Shibei 11,121 — -BJ New Internet 441 441 -SH Edge Interchange 1,191 1,533 -Sanhe Mingtai — 56,833 -Others 1,194 25 152,089 277,237 Amounts due to related parties: Current: - CYSD 6,398 — -Changzhou Gaoxin — 356,067 -Others 530 13 6,928 356,080 |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
RESTRICTED NET ASSETS. | |
RESTRICTED NET ASSETS | 25. RESTRICTED NET ASSETS The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. VNET China was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. As of December 31, 2022, and 2023, the Company’s PRC subsidiaries had appropriated RMB77,995 and RMB80,615, respectively, in its statutory reserves. As a result of these PRC laws and regulations subject to the limit discussed above that require annual appropriations of 10% of after-tax income to be set aside, prior to payment of dividends as general reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. Amounts restricted include paid-in capital, additional paid in capital and statutory reserve funds of the Company’s PRC subsidiaries and the equity of the Consolidated VIEs, as determined pursuant to PRC generally accepted accounting principles, totaling an aggregate of RMB15,231,710 as of December 31, 2023. |
EARNING (LOSS) PER SHARE
EARNING (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
EARNING (LOSS) PER SHARE | |
EARNING (LOSS) PER SHARE | 26. EARNING (LOSS) PER SHARE Basc and diluted earning (loss) per share for each of the years presented were calculated as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Numerator: Net income (loss) 515,101 (761,994) (2,597,169) Net income attributable to noncontrolling interest (15,003) (13,958) (46,667) Net income (loss) attributable to the Company 500,098 (775,952) (2,643,836) Dividend distribution to perpetual convertible preferred shareholders (5,831) — — Adjusted net income (loss) attributable to ordinary shareholders - Basic 494,267 (775,952) (2,643,836) Changes in the fair value of financial liabilities (829,149) — — Adjusted interest for convertible promissory notes 9,703 — — Adjusted net loss attributable to ordinary shareholders -Diluted (325,179) (775,952) (2,643,836) Denominator: Weighted average number of shares outstanding—basic 865,352,554 886,817,620 901,143,138 Weighted average number of shares outstanding—diluted 911,591,433 886,817,620 901,143,138 Earning (loss) per share—Basic: Net earning (loss) 0.57 (0.87) (2.93) 0.57 (0.87) (2.93) Loss per share—Diluted: Net loss (0.36) (0.87) (2.93) (0.36) (0.87) (2.93) During the year ended December 31, 2021, the Company issued 7,800,000 ordinary shares to its share depositary bank which will be used to settle stock option awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes and therefore, have been excluded from the computation of loss per share. Any ordinary shares not used in the settlement of stock option awards will be returned to the Company. Stock options, RSUs, the Company’s 2025 Convertible Notes, 2026 Convertible Notes and 2027 Convertible Notes (Note 19) or other potentially dilutive equity instruments were excluded from the calculation of diluted loss earnings per share if they were anti-dilutive. |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2023 | |
SHARE CAPITAL | |
SHARE CAPITAL | 27. SHARE CAPITAL Holders of Class A Ordinary Shares, Class B Ordinary Shares and Class C Ordinary Shares are entitled to the same rights except for voting and conversion rights. In respect of matters requiring a shareholder’s vote, each Class A Ordinary Share is entitled to one vote right, each Class B Ordinary Share is entitled to ten votes, and each Class C Ordinary Share is entitled to one vote and certain veto rights. Each Class B Ordinary Share and Class C Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder. Class A Ordinary Shares are not convertible into Class B Ordinary Share and Class C Ordinary Shares under any circumstances. Upon any sale, transfer, assignment or disposition of Class B ordinary shares by a holder thereof to any person or entity who is not an existing holder of such Class B ordinary shares, the founder, an affiliate of the founder, or a founder affiliate, or upon a change of control of the ultimate beneficial ownership of any Class B ordinary shares to any person or entity who is not an existing holder of Class B ordinary shares, the founder, an affiliate of the founder, or a founder affiliate, such Class B ordinary shares will be automatically and immediately converted into an equal number of Class A ordinary shares. Upon any any sale, transfer, assignment or disposition of Class C ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder, such Class C Ordinary Shares will be automatically and immediately converted into an equal number of Class A ordinary shares. During the year ended December 31, 2021, Purchaser of the 2025 Convertible Notes exercised the right to convert approximately 42.3% of the total principal amount issued to 42,401,010 newly issued Class A ordinary shares at the conversion price of US$12 per ADS. On March 1, 2021, 150,000 Series A Preferred Shares were converted into 54,507,816 Class A Ordinary Shares. In April 2021, the Company repurchased from Tuspark Innovation Venture Ltd., (“Tuspark”) 48,634,493 Class B ordinary shares for an aggregate purchase price of US$260.0 million. The repurchase price was at US$5.346 per ordinary share, or US$32.076 per ADS. 48,634,493 Class B ordinary shares were cancelled immediately. Meanwhile, remaining 62,418,897 Class B ordinary shares held by Tuspark were converted into the same number of Class A ordinary shares of the Company. On August 19, 2021, 4,100,000 Class B ordinary shares held by Sunrise Corporate Holding Ltd., were converted into the same number of Class A ordinary shares. During the year ended December 31, 2021, 16,680,000 Class A ordinary shares were issued to settle the share options exercised and RSUs vested. During the year ended December 31, 2021, the Company issued 7,800,000 Class A ordinary shares to its share depositary bank which will be used to settle stock option awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes. On January 27, 2022, the Company’s board of directors authorized the issuance of 300,000 Series A-1 perpetual convertible preferred shares by re-designation of the authorized but unissued Class A Ordinary Shares. As of December 31, 2023, no Series A-1 perpetual convertible preferred shares have been issued. On February 15, 2023, the Company’s board of directors approved and authorized the issuance of up to 555,000 newly created Class D ordinary shares to Mr. Sheng Chen by re-designation of the authorized but unissued Class A Ordinary Shares. The Class D ordinary shares will have the same rights as the Company’s Class B ordinary shares except for voting rights. Each Class D ordinary share shall be entitled to 500 votes on all matters submitted to shareholder vote. As of December 31, 2023, no Class D ordinary shares have been issued. Pursuant to the shareholder resolution adopted on October 5, 2023, the Company’s authorized share capital was increased by creation of an additional 1,500,000,000 Class A ordinary shares. During the year ended December 31, 2023, 3,252,768 treasury stock was reissued to settle the share options exercised and RSUs vested. 27. SHARE CAPITAL (CONTINUED) In December 2023, the Company issued 455,296,932 Class A ordinary shares to Success Flow International Investment Limited (“Success Flow”) and 195,127,260 Class A ordinary shares to Choice Faith Group Holdings Limited (“Choice Faith”), for an aggregate cash consideration of RMB2,122,123. Both entities were controlled by Shandong Hi-Speed Holdings Group Limited. The issuance costs for Class A ordinary shares were RMB37,720. In connection with the financing transaction, in November 2023, Mr. Sheng Chen, the Founder and Executive Chairman of the Board of Directors, and his affiliated investment vehicles (together with Mr. Sheng Chen, the “Founder Parties”) entered into a voting and consortium agreement (the “Voting and Consortium Agreement”) with Success Flow and Choice Faith. Pursuant to the Voting and Consortium Agreement, Success Flow shall vote in accordance with any voting instructions provided by the Founder Parties during the period beginning on the earlier of February 29, 2024 or sixty calendar days after the closing date of the investment and ending upon the third anniversary of the closing date of the investment. In December 2023, the Founder Parties entered into a supplemental agreement with the investors, pusuant to which, the period of the Voting and Consortium Agreement was amended to commence upon the later of (i) the expiration or termination of Interim Period and (ii) the occurrence of the Triggering Event. “Interim Period” means the period commencing on the date of closing, being December 28, 2023, and ending on the earlier of (x) February 29, 2024 and (y) termination of the Investment Agreement in accordance the terms thereunder. “Triggering Event” means the entry by the Company of a framework agreement with a third party, pursuant to which the parties agree to enter into a long-term strategic partnership for not less than two years in relation to the low carbon strategy of the Company and/or the expansion of the operations of the Company in Hong Kong, Taiwan and/or other territories outside mainland China. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 28. FAIR VALUE MEASUREMENTS The Company applies ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. 28. FAIR VALUE MEASUREMENTS (CONTINUED) Assets and liabilities measured at fair value on a recurring basis include short-term investments, available-for-sale debt securities, the 2025 Convertible Notes, derivative liability and share consideration due to the original shareholders for business combination. Liabilities measured at amortized cost method include the 2026 Convertible Notes and the 2027 Convertible Notes. The fair value of these financial instruments are summarized below: Fair value measurement using: Quoted prices in Significant other active markets for observable Unobservable identical assets inputs inputs Fair value at (Level 1) (Level 2) (Level 3) December 31, 2022 RMB RMB RMB RMB Long-term investments: - Available-for-sale debt securities — — 1,600 1,600 Assets — — 1,600 1,600 Convertible promissory notes - 2025 Convertible promissory notes — — 537,778 537,778 - 2026 Convertible promissory notes 3,446,432 — — 3,446,432 - 2027 Convertible promissory notes — — 1,858,095 1,858,095 Liabilities 3,446,432 — 2,395,873 5,842,305 Fair value measurement using: Quoted prices in Significant other active markets for observable Unobservable identical assets inputs inputs Fair value at (Level 1) (Level 2) (Level 3) December 31, 2023 RMB RMB RMB RMB Short-term investments: - Wealth management product — 356,820 — 356,820 Assets — 356,820 — 356,820 Convertible promissory notes - 2026 Convertible promissory notes 4,196,500 — — 4,196,500 - 2027 Convertible promissory notes — — 1,586,681 1,586,681 Derivative liability — — 188,706 188,706 Liabilities 4,196,500 — 1,775,387 5,971,887 The 2026 Convertible Notes are classified within Level 1 because they are valued by using quoted market prices. Short-term investments are valued based on price per unit quoted by financial institution and are classified within Level 2 of the fair value hierarchy. The 2025 Convertible Notes, the 2027 Convertible Notes, derivative liability and long-term investments are classified within Level 3. The fair value of 2025 Convertible Notes and 2027 Convertible Notes is measured using binomial tree pricing model that involves several parameters including the Company’s stock price, stock price volatility determined from the Company’s historical stock prices, the remaining maturity term and the discount rate. The fair value of 2025 Convertible Notes as of December 31, 2022 was estimated with the following key assumptions: As of December 31 2022 Volatility 94.00%-96.00 % Discount rate 16.00 % Risk-free interest rate 4.23%-4.28 % 28. FAIR VALUE MEASUREMENTS (CONTINUED) The fair value of derivative liability is measured using binomial tree pricing model taking the value difference with and without the redemption feature that involves several parameters including volatility, discount rate, risk-free interest rate and the probability of triggering events. The fair value of derivative liability as of December 31, 2023 was estimated with the following key assumptions: As of December 31 2023 Volatility 90.00 % Discount rate 14.65 % Risk-free interest rate 3.99 % Probability of triggering events 15.00 % The assumptions are inherently uncertain and subjective. Changes in any unobservable inputs may have a significant impact on the fair value of derivative liability. The Company measures equity investments elected to use the measurement alternative at fair value on a nonrecurring basis, in the cases of an impairment charge is recognized, fair value of an investment is remeasured in an acquisition/a disposal, and an orderly transaction for identical or similar investments of the same issuer was identified. The following tables presented a reconciliation of all liabilities measured at fair value on a recurring basis using significant unobservable inputs (level 3): 2025 Convertible Notes RMB Fair value at December 31, 2021 513,754 Foreign exchange loss 46,650 Changes in fair value (22,626) Fair value at December 31, 2022 537,778 Changes in fair value (21,816) Settlement (527,089) Foreign exchange loss 11,127 Fair value at December 31, 2023 — Share consideration due to the original shareholders for business combination RMB Fair value at December 31, 2021 214,577 Transfer out of Level 3 (214,577) Fair value at December 31, 2022 — Derivative liability RMB Fair value at December 31, 2022 — Changes in fair value 187,746 Foreign exchange loss 960 Fair value at December 31, 2023 188,706 28. FAIR VALUE MEASUREMENTS (CONTINUED) Assets measured at fair value on a non-recurring basis The Company measures certain non-financial assets on a nonrecurring basis. The Company’s non-financial assets, including long-lived assets such as property and equipment, intangible assets, right-of-use assets, and goodwill, would be measured at fair value only if they were determined to be impaired. The fair values of long-lived assets and reporting unit were measured under income approach, based on the Company’s best estimation which primarily includes significant unobservable inputs (level 3) such as future cash flows and discount rate. Long-lived assets within certain asset groups were measured at fair value on a nonrecurring basis at December 31, 2023 due to an impairment recognized on those assets at that date (see Note 2(p)). Fair value of the asset groups was estimated using discounted cash flows under the income approach classified in Level 3 of the fair value hierarchy. Under the income approach, revenue growth rates in a range of 0% to 38% were used and the cash flows were discounted using a rate of 8.6%. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | 29. COMMITMENTS AND CONTINGENCIES Capital commitments As of December 31, 2023, the Company has the following commitments to purchase certain computer and network equipment and construction-in-progress: RMB For the year ending December 31, 2024 1,435,439 2025 348,096 2026 6,120 2027 7,402 2028 3,744 2029 and thereafter 7 1,800,808 Bandwidth and cabinet capacity purchase commitments As of December 31, 2023, the Company has outstanding purchase commitments in relation to bandwidth and cabinet capacity consisting of the following: RMB For the year ending December 31, 2024 888,030 2025 227,716 2026 173,244 2027 72,906 2028 7,820 2029 and thereafter 2,627 1,372,343 29. COMMITMENTS AND CONTINGENCIES (CONTINUED) Income Taxes As of December 31, 2023, the Company has recognized an accrual of RMB98,457 for unrecognized tax benefits and its interest (Note 23). The final outcome of the tax uncertainty is dependent upon various matters including tax examinations, interpretation of tax laws or expiration of status of limitation. However, due to the uncertainties associated with the status of examinations, including the protocols of finalizing audits by the relevant tax authorities, there is a high degree of uncertainty regarding the future cash outflows associated with these tax uncertainties. Securities Litigation In December 2023 and January 2024, the Company and certain of its current and former executive officers were named as defendants in a putative securities class action lawsuit filed in the United States District Court for the Southern District of New York. The complaint alleges that the Company made materially false and/or misleading statements and/or failed to disclose certain material information concerning the founder and co-chairperson, Mr. Sheng Chen’s financing activities and the related impact on the Company’s business operations in violation of the U.S. securities laws. On March 22, 2024, the Court ordered motion-to-dismiss briefing for the amended compliant to be completed by October 3, 2024. At the date of issue of the consolidated financial statements, the Company is unable to predict the outcome of the lawsuit, or reasonably estimate a range of possible losses, if any, given the early stage of this lawsuit. Therefore, no contingent liability has been recorded by the Company as of December 31, 2023. Operating Litigation In the ordinary course of business, the Company may from time to time be involved in legal proceedings and litigations. As of December 31, 2023, the Company did not consider an unfavorable outcome in any material respects in the outstanding legal proceedings and litigations to be probable. |
PARENT COMPANY ONLY CONDENSED F
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 30. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION In the Company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since inception. The Company records its investment in its subsidiary under the equity method of accounting as prescribed inASC 323-10, Investment-Equity Method and Joint Ventures The subsidiaries did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted and as such, these Company-only financial statements should be read in conjunction with the Company’s consolidated financial statements. 30. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) Condesed balance sheets As of December 31, 2022 2023 RMB RMB ASSETS Current assets: Cash and cash equivalents 7,661 30 Prepaid expenses and other current assets 99,962 192,953 Amounts due from subsidiaries 12,399,253 13,352,240 Total current assets 12,506,876 13,545,223 Non-current assets: Investments in subsidiaries 1,484,730 — Total non-current assets 1,484,730 — Total assets 13,991,606 13,545,223 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other payables 88,225 137,826 Account payables 56 57 Convertible promissory notes 537,778 4,208,495 Amounts due to subsidiaries 896,675 1,225,778 Total current liabilities 1,522,734 5,572,156 Non-current liabilities: Convertible promissory notes 5,859,259 1,769,946 Derivative liability — 188,706 Total non-current liabilities 5,859,259 1,958,652 Total liabilities 7,381,993 7,530,808 Shareholders’ equity: Class A ordinary shares 56 103 Class B ordinary shares 4 4 Class C ordinary shares — — Additional paid-in capital 15,239,926 17,291,312 Accumulated other comprehensive income (loss) 11,022 (14,343) Accumulated deficit (8,291,872) (10,935,708) Treasury stock (349,523) (326,953) Total shareholders’ equity 6,609,613 6,014,415 Total liabilities and shareholders’ equity 13,991,606 13,545,223 30. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) Conensed statements of operations For the years ended December 31, 2021 2022 2023 RMB RMB RMB Operating expenses General and administrative expenses (275,881) (36,219) (24,663) Operating loss (275,881) (36,219) (24,663) Other loss (119,932) (247,083) (94,452) Changes in the fair value of financial liabilities 829,149 22,626 (165,930) Share of profits (losses) from subsidiaries and Consolidated VIEs 66,762 (515,276) (2,358,791) Net income (loss) 500,098 (775,952) (2,643,836) Condensed statements of comprehensive income (loss) For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net income (loss) 500,098 (775,952) (2,643,836) Other comprehensive (loss) income, net of tax of nil Foreign currency translation adjustments, net of tax of nil (34,908) 101,465 (25,365) Other comprehensive (loss) income, net of tax of nil (34,908) 101,465 (25,365) Comprehensive income (loss) 465,190 (674,487) (2,669,201) Condensed statements of cash flows For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net cash (used in) generated from operating activities (218,664) (14,927) 29,940 Net cash generated from (used in) investing activities 113,530 (1,670,058) (37,571) Net cash generated from financing activities 143,037 1,592,627 — Net increase (decrease) in cash and cash equivalents 37,903 (92,358) (7,631) Cash and cash equivalents at beginning of the year 62,116 100,019 7,661 Cash and cash equivalents at end of the year 100,019 7,661 30 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) assuming the Company will continue as a going concern. The Company has incurred losses since its inception. As of December 31, 2023, the Company had an accumulated deficit of RMB11.0 billion and in a net current liability position in an amount of RMB1.6 billion. Absent any other action, the Company likely will require additional liquidity to continue its operations over the next 12 months. With the Company’s unused loan facilities with banks and financial institutions, strategy to obtain financing from the issuance of equity shares, bonds and convertible notes, and control of operating expenses and capital expenditure where necessary, management has determined that the Company has the ability to manage the liquidity needs to enable continuation of operations for the foreseeable future. |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the Consolidated VIEs for which the Company or a subsidiary of the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the Consolidated VIEs are eliminated upon consolidation. Results of acquired subsidiaries and its Consolidated VIEs are consolidated from the date on which control is transferred to the Company. |
Use of estimates | (c) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant estimates and assumptions reflected in the Company’s financial statements include, but are not limited to, determining the valuation allowance for deferred tax assets, the fair value of convertible promissory notes and derivative liability, the fair value of assets acquired and liabilities assumed in acquisitions, the recoverability of long-lived assets, the fair values of asset groups, the fair value of a reporting unit, the estimated useful lives of property and equipment, and intangible assets, and incremental borrowing rate of leases. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. The Company regularly assesses the estimated useful lives of its property and equipment, and intangible assets. In January 2024, the Company, with the assistance of an external appraisal firm, completed an assessment of the useful lives of certain data center property and equipment and revised the estimated useful lives from a range of 2 3 15 |
Foreign currency | (d) Foreign currency The functional currency of the Company and its overseas subsidiaries is the United States dollar (“US$”), whereas the functional currency of the Company’s PRC subsidiaries and its Consolidated VIEs is the Chinese Renminbi (“RMB”) as determined based on the criteria of ASC Topic 830, Foreign Currency Matters The financial statements of the Company and its overseas subsidiaries are translated from the functional currency to the reporting currency, RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical costs in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of operations. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Foreign currency (continued) The Company uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in other comprehensive (loss) income within the statements of comprehensive income (loss). |
Convenience translation | (e) Convenience translation Translations of consolidated balance sheets, consolidated statements of operations, comprehensive income (loss), cash flows, and shareholders’ equity from RMB to US$ as of and for the year ended December 31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1.00 to RMB7.0999 on December 29, 2023, the last business day in fiscal year 2023, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate. |
Cash and cash equivalents | (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal and use and have original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents. |
Restricted cash | (g) Restricted cash Restricted cash mainly represents amounts held by a few banks in escrow as security for credit facilities, the deposits for finance lease, the deposits held in escrow for the advances received from end customers subscribing Microsoft 365 and Windows Azure services (the disbursement of which shall be agreed by both Microsoft (China) Co., Ltd. (“Microsoft”) and the Company), the deposits for business operation, the deposits for loans and the deposits held for legal proceedings. As of 31 December 2023, the amount of restricted cash also included the deposits of RMB2,117,730 held in escrow for the repurchase of the 2026 Convertible Notes. |
Short-term investments | (h) Short-term investments The Company’s short-term investments primarily include the Company’s investment in a short-term wealth management product managed by a financial institution in Hong Kong S.A.R. The Company elects to apply the fair value option for the short-term investment. Realized and unrealized fair value changes in the short-term investment are recorded in other income in the consolidated statement of operations. In addition, other highly liquid investments with original maturities of greater than three months but less than twelve months, are also classified as short-term investments. |
Accounts receivable and allowance for doubtful debt | (i) Accounts receivable and allowance for doubtful debt Pursuant to ASC 326, Financial Instruments-Credit Losses 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Accounts receivable and allowance for doubtful debt (continued) The Company utilizes a loss rate approach to determine lifetime expected credit losses for its financial assets. This method is used for calculating an estimate of losses based primarily on the Company’s historical loss experience. In determining loss rates, the Company evaluates information related to historical losses, adjusted for current conditions and further adjusted for the period of time that the Company can reasonably forecast. The Company has concluded that it can reasonably support a forecast period for the contractual life of its financial assets. Qualitative and quantitative adjustments related to current conditions and the reasonable and supportable forecast period consider the following: the customer or vendor ‘s creditworthiness, changes in the policy and procedures to establish customer credit limits, changes in the payment terms of receivables, existence and effect of any concentration of credit and changes in the level of such concentrations, and the effects of other external forces such as the current and forecasted direction of the economic and business environment. |
Property and equipment | (j) Property and equipment Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment acquired in a business combination are recognized initially at fair value at the data of acquisition. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Property 25-46 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Optical fibers 10-20 years Computer and network equipment 1-10 years Office equipment 2-8 years Motor vehicles 2-8 years Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost and accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of operations. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. |
Intangible assets | (k) Intangible assets Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets with finite useful lives are amortized using a straight-line method. These amortization methods reflect the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. The Company has capitalized certain internal use software development costs in accordance with ASC Subtopic 350-40, Intangibles-Goodwill and Other: Internal-Use Software 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Intangible assets (continued) Intangible assets have weighted average useful lives from the date of purchase/ acquisition as follows: Purchased software 5.1 years Radio spectrum license 15 years Operating permits* 32.1 years Customer relationships* 8.3 years Licenses* 15 years Supplier relationships* 10 years Trade names* 20 years Technology platform* 5 years Non-complete agreements* 5 years Internal use software 3.4 years Customer contract* 7 years * Acquired in the acquisitions of subsidiaries. |
Leases | (l) Leases The Company determines if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. The Company has lease agreements with lease and non-lease components, which are accounted for separately. The Company elected the short-term lease exemption for all contracts with lease term of 12 months or less. At the commencement date of a lease, the Company determines the classification of the lease based on the relevant factors present and records a right-of-use (“ROU”) asset and lease liability for operating lease, and records property and equipment and finance lease liability for finance lease. ROU assets and property and equipment acquired through lease represent the right to use an underlying asset for the lease term, and operating lease liabilities and finance lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. If the rate implicit in the Company’s leases is not readily available, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Company will exercise that option. Leases with an initial lease term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term. |
Land use rights | (m) Land use right The land use rights represent the operating lease prepayments for the rights to use the land in the PRC under ASC 842. Amortization of the prepayments is provided on a straight-line basis over the terms of the respective land use rights certificates. |
Long-term investments | (n) Long-term investments The Company’s long-term investments primarily consist of equity investments without readily determinable fair value, equity method investments. Pursuant to ASC Topic 321, Investments—Equity Securities Fair Value Measurements and Disclosures For equity investments measured at fair value with changes in fair value recorded in earnings, the Company does not assess whether those securities are impaired. For those equity investments that the Company elects to use the measurement alternative, the Company makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net loss equal to the difference between the carrying value and fair value. Investments in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC Subtopic 323-10, Investments-Equity Method and Joint Ventures: Overall |
Goodwill | (o) Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the identifiable assets acquired and the liabilities assumed of an acquired business. The Company assesses goodwill for impairment in accordance with ASC Subtopic 350-20, Intangibles—Goodwill and Other: Goodwill The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative test in accordance with ASC 350-20. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting units, and other specific information related to the operations. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. Pursuant to ASC 350-20, the Company performed assessment and completed its annual impairment test for goodwill that has arisen out of its acquisitions. No impairment loss of goodwill was recognized for the years ended December 31, 2021 and 2022. RMB1,364,191 of goodwill impairment loss was recognized for the year ended December 31, 2023. See Note 11 for details. |
Impairment of long-lived assets | (p) Impairment of long-lived assets The Company evaluates long-lived assets, such as fixed assets, purchased or internally developed intangible assets with finite lives, and operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC Topic 360, Property, Plant and Equipment As of December 31, 2021, due to continuing losses and physical condition changed, the Company recorded the long-lived assets impairment amounting to RMB109,267, resulting from excess of the carrying amount of the asset group over the fair value of the asset group. No impairment was recognized for the year ended December 31, 2022 as there was no impairment indicator identified. As of December 31, 2023, due to the weaker-than-expected operations, the Company tested certain long-lived asset groups for recoverability. Impairment loss is calculated as the amount by which the carrying amount of the relevant asset groups exceeds their estimated fair value. Impairment loss of RMB506,686 was recorded for the year ended December 31, 2023. The Company determined the fair value of relevant asset group using the income approach based on the discounted cash flows associated with the asset group. The impairment loss reduced the carrying amount of the long-lived assets of the group on a pro-rata basis using the relative carrying amount of those assets except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. The Company recorded impairment charges associated with its long-lived assets as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Impairment of property and equipment 106,311 — 480,099 Impairment of intangible assets — — 15,113 Impairment of right-of-use assets — — 11,474 Impairment of other non-current assets 2,956 — — |
Fair value of financial instruments | (q) Fair value of financial instruments The Company’s financial instruments primarily include cash and cash equivalents, restricted cash, short-term investments, accounts receivable and payable, other receivables and payables, amounts due from/to related parties, long-term borrowings, available-for-sale debt investments, convertible promissory notes and a derivative liability. Other than long-term borrowings, convertible promissory notes and the derivative liability, the carrying values of these financial instruments approximate their fair values due to their short-term maturities. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (q) Fair value of financial instruments (continued) The carrying amounts of long-term borrowings approximate their fair values since they bear interest rates which approximate market interest rates. The Company elected the fair value option for the 2025 Convertible Notes (Note 19) upon initial recognition as financial liability as the fair value better represents the value of the underlying liabilities. The purchase consideration and contingent purchase considerations in both cash and shares are initially measured at fair value on the acquisition dates of the acquired businesses and the date of grant, respectively, and subsequently remeasured at the end of each reporting period with an adjustment for fair value recorded to the current period income/(expense). The bifurcated redemption feature of 2027 Convertible Notes (Note 19) is recorded as a derivative liability, which is initially measured at fair value, and subsequently remeasured at the end of each reporting period with an adjustment for fair value recorded to the current period income/(expense). The Company recorded the 2026 Convertible Notes (Note 19) and 2027 Convertible Notes (Note 19) using amortized cost method on its consolidated balance sheets and measures the fair value for disclosure purposes only. See Note 28 for disclosure of fair value measurements. |
Revenue recognition | (r) Revenue recognition The Company provides hosting and related services including hosting of customers’ servers and networking equipment, connecting customers’ servers with internet backbones (“Hosting service”), virtual private network services providing encrypted secured connection to public internet (“VPN service”) and other value-added services and public cloud service through strategic partnership with Microsoft. The Company recognizes revenue as it satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the service, has discretion in establishing pricing and controls the promised service before transferring that service to customers. Otherwise, the Company records revenue at the net amounts as commissions. The Company’s revenue recognition policies are as follows: Hosting services are services that the Company dedicates data center space to house customers’ servers and networking equipment and provides tailored server administration services including operating system support and assistance with updates, server monitoring, server backup and restoration, server security evaluation, firewall services, and disaster recovery. The Company also provides interconnectivity services to connect customers with each other, internet backbones in China and other networks through Border Gateway Protocol, or BGP, network, or single-line, dual-line or multiple-line networks. Hosting services are typically provided to customers for a fixed amount over the contract service period and the related revenues are recognized on a straight-line basis over the term of the contract. For certain contracts where considerations are based on the usage of the Hosting services, the related revenues are recognized based on the consumption at the predetermined rate as the services are rendered throughout the contract term. VPN services are services that the Company extends customers’ private networks by setting up secure and dedicated connections through the public internet. VPN services are provided to customers for a fixed amount over the contract service period and revenue are recognized on a straight-line basis over the term of the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (r) Revenue recognition (continued) The Company partners with Microsoft to provide Cloud services that allow enterprise and individual customers to run their applications over the internet using the IT infrastructure. Cloud services are generally charged by the Company to the end customers for a fixed amount or based on the actual usage of the cloud resources at predetermined rates over the subscription period, which in general is one year. The Company fulfils its performance obligation of facilitating Microsoft to provide the Cloud services to the end customers by providing, but not limited to, contract processing management, billing, payment collection, maintenance, help desk supports and certain IT infrastructure services. These are considered as a series of distinct services that are substantially the same and have the same pattern of transfer to the customer; therefore, they are accounted for as a single performance obligation that is satisfied over time. The corresponding consideration that the Company is entitled to is recognized as revenue using a time-based method since this best depicts the pattern of the control transfer. Revenue from Cloud services consists of monthly incentive revenues received from Microsoft upon completion of certain conditions and gross billing amount received from end customers net of considerations remitted by the Company to Microsoft. When the contract is modified to add distinct services to the single performance obligation for additional fees, such changes are accounted for prospectively as a termination of the old contract and the creation of a new contract. For certain arrangements, customers are required to pay the Company before the services are delivered. When either party to a revenue contract has performed, the Company recognizes a contract asset or a contract liability in the consolidated balance sheets, depending on the relationship between the Company’s performance and the customer’s payment. Contract liabilities were mainly related to fee received for Hosting services to be provided over the contract period, which were presented as deferred revenue on the consolidated balance sheets. Deferred revenue represented the Company’s obligation to transfer the goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. As of January 1, 2022 and 2023, the Company has deferred revenue amounting up to RMB95,078 and RMB95,477, respectively, which were recognized as revenue for the years ended December 31, 2022 and 2023 in an amount of RMB39,374 and RMB78,683, respectively . The Company’s certain hosting service contains lease and non-lease components. The Company elected to adopt the practical expedient which allows lessors to combine lease and non-lease components and account for them as one component if 1) the timing and pattern of transfer of the lease component and non-lease component is the same; 2) the lease component should be classified as an operating lease if it were accounted for separately. The combined component is accounted for in accordance with the current lease accounting guidance (“ASC 842”) if the lease component is predominant, and in accordance with the ASC 606 if the non-lease component is predominant. The Company has determined that the non-lease component is the predominant component in Hosting service. Therefore, the Company has accounted for the combined component in accordance with ASC 606. The Company does not disclose the value of unsatisfied performance obligations as the Company’s revenue contracts are (i) contracts with an original expected length of one year or less or (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. |
Cost of revenues | (s) Cost of revenues Cost of revenues consists primarily of telecommunication costs, depreciation of the Company’s long-lived assets, amortization of acquired intangible assets, utility, maintenance, data center rental expenses directly attributable to the provision of the IDC services, payroll and other related costs of operations. |
Advertising expenditures | (t) Advertising expenditures Advertising expenditures are expensed as incurred and are included in sales and marketing expenses, which amounted to RMB7,272, RMB6,829 and RMB9,826 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Research and development expenses | (u) Research and development expenses Research and development expenses consist primarily of payroll and related personnel costs for routine upgrades and related enhancements of the Company’s services and network. Research and development expenses are expensed as incurred except for costs to develop internal-use software or add significant upgrades and enhancements resulting in additional functionality to internal-use software that meet the capitalization criteria in accordance with ASC Subtopic 350-40, Intangibles-Goodwill and Other, Internal-Use Software |
Government grants | (v) Government grants Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants is determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will continue to receive these government grants in the future. Government grants are recognized when it is probable that the Company will comply with the conditions attached to them, and the grants are received. When the grant relates to an expense item, it is recognized in the consolidated statement of operations over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as a reduction of the related operating expense. When the grant relates to an asset, it is recognized as deferred government grants and released to the consolidated statement of operations in equal amounts over the expected useful life of the related asset, when operational, as a reduction of the related depreciation expense. |
Capitalized interest | (w) Capitalized interest Interest costs are capitalized if they are incurred during the acquisition, construction or production of a qualifying asset and such costs could have been avoided if expenditures for these assets have not been made. As a result of total interest costs capitalized during the period, the interest expense for the years ended December 31, 2021, 2022 and 2023, was as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Interest expense and amortization cost of bonds payable 133,959 — — Interest expense and amortization cost of 2025, 2026 and 2027 Convertible Notes (Note 19) 25,919 58,350 59,429 Interest expense on bank and other borrowings 103,925 172,328 222,918 Interest expense on finance leases 124,567 104,088 90,679 Total interest costs 388,370 334,766 373,026 Less: Total interest costs capitalized (53,420) (61,461) (60,854) Interest expense, net 334,950 273,305 312,172 |
Income taxes | (x) Income taxes The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The carrying amount of deferred tax assets is reviewed on an entity-by-entity basis and is reduced by a valuation allowance to the extent that it is more-likely-than-not that the benefits of the deferred tax assets will not be realized in future years. The valuation allowance is determined based on the weight of positive and negative evidence including future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and verifiable tax planning. The estimated future taxable income involves significant assumptions of forecasted revenue growth that take into consideration of the Company’s historical financial results, its plan of expanding operating capacity as well as current industry trends. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date of the change in tax rate. All deferred income tax assets and liabilities are classified as non-current on the consolidated balance sheets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (x) Income taxes (continued) The Company applies ASC Topic 740, Accounting for Income Taxes The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “income tax expenses” in the consolidated statements of operations. |
Share-based compensation | (y) Share-based compensation Share options and Restricted Share Units (“RSUs”) granted to employees are accounted for under ASC Topic 718, Compensation—Stock Compensation The Company has elected to recognize compensation expenses using the straight-line method for share-based awards granted with service conditions that have a graded vesting schedule. For share-based awards granted with performance conditions, the Company recognizes compensation expenses using the accelerated method. The Company commences recognition of the related compensation expenses if it is probable that the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the cumulative effect of the change in estimate is recognized in the period of change. For share-based awards with market conditions, the probability to achieve market conditions is reflected in the grant date fair value. The Company recognized the related compensation expenses when the requisite service is rendered using the accelerate method. On November 26, 2016, the Board approved a new incentive program to certain individuals with a new bonus scheme which will be settled by issuing a variable number of shares with a fair value equal to fixed dollar amount on the settlement date. The Company remeasures the fair value of such liability at each reporting period end through earnings until the actual settlement date, which is the date when the number of underlying shares were fixed and recorded the compensation cost over the remaining vesting term. A cancellation of the terms or conditions of an equity award under original award in exchange for a new award should be treated as modification. The compensation costs associated with the modified awards are recognized if either the original vesting conditions or the new vesting conditions have been achieved. Total recognized compensation cost for the awards is at least equal to the fair value of the original awards at the grant date unless at the date of the modification the performance or service conditions of the original awards are not expected to be satisfied. The incremental compensation cost is measured as the excess of the fair value of the replacement awards over the fair value of original awards at the modification date. Therefore, in relation to the modified awards, the Company recognizes share-based compensation over the vesting periods of the new awards, which comprises (i) the amortization of the incremental portion of share-based compensation over the remaining vesting term, and (ii) any unrecognized compensation cost of original awards, using either the original term or the new term, whichever results in higher expenses for each reporting period. For a modification of a market condition, the incremental portion of share-based compensation and unrecognized compensation cost of original award are recognized over new vesting period. For modification of a liability award that remains a liability after modification, the liability award continues to be remeasured at fair value at each reporting date. |
Earnings (Loss) per share | (z) Earnings (Loss) per share In accordance with ASC Topic 260, Earnings per Share |
Treasury stock | (aa) Treasury stock When the Company acquires treasury stock, the repurchased ordinary shares is accounted for under the cost method whereby the entire cost of the acquired shares is recorded as treasury stock. The cost basis for the reissuance of treasury stock is determined using a weighted-average cost basis. To the extent that the reissuance price is more than the cost basis (gain), the excess is recorded as an increase to additional paid-in capital. If the reissuance price is less than the cost basis (loss), the difference is recorded to additional paid-in capital to the extent there is a remaining balance. Any losses in excess of that amount is charged to accumulated deficit . |
Comprehensive income (loss) | (bb) Comprehensive income (loss) Comprehensive income (loss) is defined as the increase (decrease) in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Accumulated other comprehensive income (loss) of the Company includes only foreign currency translation adjustments related to the Company and its overseas subsidiaries, whose functional currency is US$. |
Segment reporting | (cc) Segment reporting In accordance with ASC Topic 280 , Segment Reporting As substantial all of the Company’s long-lived assets and revenues are located in and derived from the PRC, geographical segments are not presented. |
Employee benefits | (dd) Employee benefits The full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, pension benefits and unemployment insurance, which are governmental mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. |
Recent accounting pronouncements | (ee) Recent accounting pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) and require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments apply to all entities that enter into a business combination within the scope of Subtopic 805-10, Business Combinations—Overall . The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and it should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted this ASU from January 1, 2023 with no material impact on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendments introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker (CODM), extends certain annual disclosures to interim periods, clarifies single reportable segment entities must apply ASC 280 in its entirety, permits more than one measure of segment profit or loss to be reported under certain conditions, and requires disclosure of the title and position of the CODM. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 on January 1, 2024 with no material impact on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION | |
Schedule of significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | (a) As of December 31, 2023, the principal consolidated subsidiaries and VIEs of the Company are as follows: Entity Date of incorporation/ acquisition Place of incorporation Percentage of direct ownership by the Company Principal activities Subsidiaries: VNET Group Limited (“VNET HK”) May 25, 2007 Hong Kong 100 % Investment holding VNET Data Center Co., Ltd. (“VNET China”) (1) June 12, 2000 PRC 100 % Provision of technical and consultation services and rental of long-lived assets VNET (Foshan) Technology Co., Ltd. (“FS Technology”) (1) December 20, 2011 PRC 100 % Trading of network equipment, provision of technical and internet data center services VNET Anhui Suzhou Technology Co., Ltd. (“SZ Technology”) (1) November 16, 2011 PRC 100 % Trading of network equipment VNET Hangzhou Information Technology Co., Ltd. (“HZ Technology”) (1) March 4, 2013 PRC 100 % Provision of internet data center services VNET Mobile Limited (“VNET Mobile”) April 30, 2013 Hong Kong 100 % Investment holding and provision of telecommunication services WiFire Group Inc. (“WiFire Group”) March 7, 2014 British Virgin Islands 100 % Investment holding Joytone Infotech Co., Ltd. (“SZ Zhuoaiyi”) (1) April 30, 2013 PRC 100 % Provision of technical and consultation services VNET Ventures Limited (“Ventures”) March 6, 2014 Hong Kong 100 % Investment holding Abitcool (China) Broadband Inc. (“aBitCool DG”) (1) June 13, 2014 PRC 100 % Dormant company Diyixian.com Limited (“DYX”) August 10, 2014 Hong Kong 100 % Provision of virtual private network services VNET Zhuhai Financial Leasing Co., Ltd. (“Zhuhai Financial Leasing”) (1) April 9, 2015 PRC 100 % Provision of finance leasing business services VNET DRP Investment Holdings Limited (“DRP investment”) January 13, 2017 Hong Kong 100 % Investment holding Shihua DC Investment Holdings Limited (“Shihua Investment”) March 14, 2017 Cayman Islands 51 % Investment holding VNET (Xi’an) Technology Co., Ltd. (“Xi’an Tech”) (1) July 5, 2012 PRC 51 % Provision of technical and internet data center services Foshan Zhuoyi Intelligence Data Co., Ltd. (“FS Zhuoyi”) (1) July 7, 2016 PRC 51 % Provision of internet data center services Beijing Hongyuan Network Technology Co., Ltd. (“BJ Hongyuan”) (1) December 8, 2014 PRC 51 % Provision of internet data center services Dermot Holdings Limited (“Dermot BVI”) August 10, 2014 British Virgin Islands 100 % Investment holding VNET Technology Development (Suzhou) Co., Ltd.(“Suzhou Technology”) March 13, 2019 PRC 100 % Provision of internet data center services Huailai hulianyun Technology Co., Ltd.(“Huailai hulianyun”) June 26, 2019 PRC 100 % Provision of internet data center services Shihua DC Investment Holdings 2 Limited (“Shihua Holdings 2”) August 20, 2019 Cayman Islands 100 % Investment holding Shanghai Waigaoqiao Free Trade Zone Gaogang Technology Co., Ltd. (“Waigaoqiao Technology”) (1)/(4) August 20, 2019 PRC 100 % Provision of internet data center services Tongyun Internet (Beijing) Cloud Computing Technology Co., Ltd.(“Tongyun BJ”) January 19, 2020 PRC 100 % Provision of internet data center services Shanghai Edge Connect Technology Co., Ltd. (“SH Edge Connect”) (1) November 3, 2020 PRC 100 % Provision of technical and internet data center services Beijing Jianghe Cloud Technology Co., Ltd. (“BJ JHC”) (1) November 17, 2020 PRC 100 % Provision of internet data center services Beijing Shuntou Green Energy Data Technology Co., Ltd. (“BJ ST”) (1) November 17, 2020 PRC 100 % Provision of internet data center services Jiwa Senlin (Beijing) Engineering Co., Ltd.(“Jiwa Engineering BJ”) (1) April 8, 2021 PRC 100 % Provision of internet data center services Beijing TenxCloud Technology Co., Ltd. (“BJ TenxCloud”) (1)/(3) July 15, 2021 PRC 100 % Provision of digitalization solution services Zhongke Zijing Technology Co., Ltd. (“Zhongke Zijing”) (1)/(14) August 16, 2021 PRC 100 % Provision of technical and consultation services Gu’an Junhui Network Technology Co., Ltd. (“Gu’an Junhui”) (1)/(4) August 16, 2021 PRC 100 % Provision of internet data center services Beijing Jianghe Shuzhi Technology Co., Ltd.(“BJ Jianghe Shuzhi”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Jianghe Chuangke (Beijing) Technology Co., Ltd.(“Jianghe Chuangke”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Beijing Jianghe Cloud Industrial Internet Technology Co., Ltd.(“Jianghe Industrial”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Beijing Xunneng Digital Industry Empowerment Center Co., Ltd.(“BJ Xunneng”) (1)/(7) August 1, 2022 PRC 100 % Provision of internet data center services Entity Date of incorporation/ acquisition Place of incorporation Percentage of direct ownership by the Company Principal activities Variable Interest Entities (the “VIEs”): Beijing Yiyun Network Technology Co., Ltd. (“VNET Technology”) (2) October 22, 2002 PRC — Provision of internet data center services Beijing iJoy Information Technology Co., Ltd. (“BJ iJoy”) (2) April 30, 2013 PRC — Provision of internet data center, content delivery network services WiFire Network Technology (Beijing) Co., Ltd. (“WiFire Network”) (2) April 1, 2014 PRC — Provision of telecommunication services Shanghai Zhiyan Yunwei Technology Co., Ltd. (“SH Zhiyan”) (2) December 12, 2020 PRC — Provision of telecommunication services Held directly by VNET Technology: Beijing VNET Broad Band Data Center Co., Ltd. (“VNET Beijing”) (2) March 15, 2006 PRC — Provision of internet data center services Shanghai Shilian Technology Co., Ltd. (“SH Shilian”) October 22, 2012 PRC — Provision of internet data center services Beijing VNET Technology Co., Ltd.(“VNET BJ”) April 1, 2021 PRC — Provision of internet data center services Held directly by VNET Beijing: VNET (Xi’an) Information Outsourcing Industry Park Services Co., Ltd. (“Xi’an Sub”) (2) June 23, 2008 PRC — Provision of internet data center services Langfang Xunchi Computer Data Processing Co., Ltd. (“LF Xunchi”) (2) December 19, 2011 PRC — Dormant company Beijing Yilong Xinda Technology Co., Ltd. (“Yilong Xinda”) (2) February 28, 2013 PRC — Provision of internet data center services Beijing Yichengtaihe Investment Co., Ltd. (“BJ Yichengtaihe”) (2) September 30, 2014 PRC — Provision of internet data center services Guangzhou Lianyun Big Data Co., Ltd. (“GZ Lianyun”) (2) April 14, 2016 PRC — Provision of internet data center services Beijing Xianghu Yunlian Technology Co., Ltd. (“Xianghu Yunlian”) (2) November 7, 2018 PRC — Provision of internet data center services Shanghai Hujiang Songlian Technology Co., Ltd.(“Hujiang Songlian”) (2) December 17, 2018 PRC — Provision of internet data center services Beijing Shuhai Hulian Technology Co., Ltd. (“BJ Shuhai”) (2) January 2, 2019 PRC — Provision of internet data center services Nantong Chenghong Cloud Computing Co., Ltd. (“NT Chenghong”) (2) December 24, 2019 PRC — Provision of internet data center services Held directly by SH Shilian: Shanghai Shuzhong Investment Management Co., Ltd. (“SH Shuzhong”) (2) June 30, 2020 PRC — Provision of internet data center services Sanhe Shulifang Information Technology Co., Ltd. (“Shulifang”) (2) July 21, 2020 PRC — Provision of internet data center services Langfang Huahai Internet Technology Co., Ltd. (“LF Huahai”) (2) September 11, 2020 PRC — Provision of internet data center services Shanghai Hesheng Data System Co., Ltd. (“SH Hesheng”) (2)/(5) November 11, 2021 PRC — Provision of internet data center services Hebei Ketai Internet Technology Co., Ltd.(“HB Ketai”) September 26, 2022 PRC — Provision of internet data center services Held directly by VNET BJ: WLCB Century Cloud Data Technology Co., Ltd.(“WLCB Century Cloud”) April 1, 2021 PRC — Provision of internet data center services Held directly by SH Zhiyan: Shanghai Blue Cloud Technology Co., Ltd. (“SH Blue Cloud”) (2) March 21, 2013 PRC — Provision of Office 365 and Windows Azure platform services Shanghai Edge Blue Cloud Network Technology Co., Ltd. (“SH Edge Network”) (2)/(6) January 7, 2021 PRC — Provision of internet data center services Held directly by DYX and LF Xunchi: Shenzhen Diyixian Telecommunication Co., Ltd. (“SZ DYX”) (1) August 10, 2014 PRC 20 % Provision of virtual private network services (1) Collectively, the “PRC Subsidiaries”. (2) Collectively, the “Consolidated VIEs”. (3) On July 15, 2021, the Company through its subsidiary, Shenzhen Cloud Native Technology Co., Ltd. (“SZ Cloud Native”), acquired 100% equity interest of BJ TenxCloud. (4) On August 16, 2021, the Company through its subsidiary, Jiwa Engineering BJ, acquired 100% equity interest of Zhongke Zijing and Gu’an Junhui. (5) On November 11, 2021, the Company through its subsidiary, SH Shilian, acquired 100% equity interest of SH Hesheng. (6) On January 7, 2021, the Company, through SH Zhiyan, established SH Edge Network for internet data center services. (7) On August 1, 2022, the Company through its subsidiary, VNET Saturn and YF WFOE, acquired 100% equity interest of BJ Jianghe Shuzhi, Jianghe Chuangke, Jianghe Industrial and BJ Xunneng (Note 4). |
Schedule of consolidated VIE before eliminating intercompany balances | The following tables represent the financial information of the Consolidated VIEs as of December 31, 2022 and 2023 and for the years ended December 31, 2021, 2022 and 2023 before eliminating the intercompany balances and transactions between the Consolidated VIEs and other entities within the Company: As of December 31, 2022 2023 RMB RMB ASSETS Current assets: Cash and cash equivalents 1,428,768 923,692 Restricted cash 301,825 434,421 Accounts receivable (net of allowance for doubtful debt of RMB100,797 and RMB161,837 as of December 31, 2022 and 2023 respectively) 1,400,546 1,412,456 Prepaid expenses and other current assets 1,976,164 2,081,948 Amounts due from related parties 13,942 58,823 Total current assets 5,121,245 4,911,340 Non-current assets: Property and equipment, net 7,495,362 7,398,768 Intangible assets, net 475,652 453,606 Land use rights, net 44,233 56,971 Operating lease right-of-use assets, net 3,452,533 3,948,272 Goodwill 332,645 — Restricted cash — 382 Deferred tax assets, net 153,676 208,266 Other non-current assets 165,570 148,383 Long-term investments, net 82,744 168,377 Total non-current assets 12,202,415 12,383,025 Total assets 17,323,660 17,294,365 Current liabilities: Short-term bank borrowings — 30,000 Accounts and notes payable 483,030 493,837 Accrued expenses and other payables 1,488,031 1,616,423 Advances from customers 1,157,963 1,605,247 Deferred revenue 84,775 83,546 Income taxes payable 25,188 13,531 Amounts due to inter-companies, net (1) 6,071,651 4,736,035 Amounts due to related parties 6,928 356,080 Current portion of finance lease liabilities 165,221 97,388 Current portion of long-term borrowings 417,442 544,803 Current portion of deferred government grants 3,646 8,062 Current portion of operating lease liabilities 655,663 754,935 Total current liabilities 10,559,538 10,339,887 As of December 31, 2022 2023 RMB RMB Non-current liabilities: Amounts due to inter-companies, net (1) 1,020,972 1,020,972 Long-term borrowings 1,861,545 2,464,811 Non-current portion of finance lease liabilities 615,309 720,954 Unrecognized tax benefits 86,799 98,082 Deferred tax liabilities 149,475 139,174 Deferred government grants 2,726 11,862 Non-current portion of operating lease liabilities 2,872,323 3,230,506 Total non-current liabilities 6,609,149 7,686,361 Total liabilities 17,168,687 18,026,248 For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net revenues 5,145,110 5,944,519 6,418,125 Net income (loss) 92,594 (66,764) (999,101) For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net cash generated from operating activities 866,712 1,351,179 1,418,796 Net cash used in investing activities (2,695,707) (1,849,339) (1,431,085) Net cash generated from (used in) financing activities 1,788,528 1,243,495 (359,809) Net (decrease) increase in cash and cash equivalents and restricted cash (40,467) 745,335 (372,098) (1) Amounts due to inter-companies consist of intercompany payables to the other companies within the Company for the purchase of telecommunication resources and property and equipment on behalf of the Consolidated VIEs. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets | Category Estimated useful life Property 25-46 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Optical fibers 10-20 years Computer and network equipment 1-10 years Office equipment 2-8 years Motor vehicles 2-8 years |
Schedule of weighted average useful lives of intangible assets | Purchased software 5.1 years Radio spectrum license 15 years Operating permits* 32.1 years Customer relationships* 8.3 years Licenses* 15 years Supplier relationships* 10 years Trade names* 20 years Technology platform* 5 years Non-complete agreements* 5 years Internal use software 3.4 years Customer contract* 7 years * Acquired in the acquisitions of subsidiaries. |
Schedule of impairment charges associated with long-lived assets and acquired intangibles | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Impairment of property and equipment 106,311 — 480,099 Impairment of intangible assets — — 15,113 Impairment of right-of-use assets — — 11,474 Impairment of other non-current assets 2,956 — — |
Schedule of total interest expenses capitalized during the period, the interest expenses | As a result of total interest costs capitalized during the period, the interest expense for the years ended December 31, 2021, 2022 and 2023, was as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Interest expense and amortization cost of bonds payable 133,959 — — Interest expense and amortization cost of 2025, 2026 and 2027 Convertible Notes (Note 19) 25,919 58,350 59,429 Interest expense on bank and other borrowings 103,925 172,328 222,918 Interest expense on finance leases 124,567 104,088 90,679 Total interest costs 388,370 334,766 373,026 Less: Total interest costs capitalized (53,420) (61,461) (60,854) Interest expense, net 334,950 273,305 312,172 |
ACQUISITION OF SUBSIDIARIES (Ta
ACQUISITION OF SUBSIDIARIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Sanhe Mingtai Digital Industrial Park Co., Ltd. (Sanhe Digital) | |
ACQUISITION OF SUBSIDIARIES | |
Schedule of net identifiable assets of acquiree, business combination | RMB Net assets acquired: Current assets 3 Property and equipment, net 105,538 Land use rights, net 14,258 Deferred tax assets 2,232 Accrued expenses and other payables (2,277) Deferred tax liabilities (2,758) Total share consideration 116,996 |
BJ JiangHeCloud | |
ACQUISITION OF SUBSIDIARIES | |
Schedule of net identifiable assets of acquiree, business combination | RMB Net assets acquired: Cash and cash equivalents 3,325 Other current assets 3,959 Property and equipment, net 306,546 Operating permits (Note 9) 479,989 Land use rights, net (Note 10) 221,556 Other current liabilities (15,448) Deferred tax liabilities (209,989) Total consideration in cash 789,938 |
Kunshan Kunhui Network Co., Ltd. ("KS Kunhui") | |
ACQUISITION OF SUBSIDIARIES | |
Schedule of net identifiable assets of acquiree, business combination | RMB Cash and cash equivalents 9,014 Property and equipment, net 92,157 Operating lease right-of-use assets, net 199,255 Operating permits (Note 9) 29,000 Customer contract (Note 9) 59,500 Deferred tax assets 13,921 Other current assets 289,480 Total assets acquired 692,327 Other current liabilities (436,124) Operating lease liabilities (208,612) Deferred tax liabilities (22,125) Total liabilities assumed (666,861) Net assets acquired 25,466 Purchase consideration 50,000 Goodwill 24,534 |
ACCOUNTS AND NOTES RECEIVABLE_2
ACCOUNTS AND NOTES RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCOUNTS AND NOTES RECEIVABLE, NET | |
Schedule of accounts and notes receivable and the allowance for doubtful debt | As of December 31, 2022 2023 RMB RMB Accounts receivable 1,897,111 1,903,458 Notes receivable 1,151 873 Allowance for doubtful debt (134,569) (188,356) 1,763,693 1,715,975 |
Schedule of analysis of the allowance for doubtful debt | As of December 31, 2022 and 2023, all accounts and notes receivable were due from third party customers. An analysis of the allowance for doubtful debt was as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Balance at beginning of the year 68,921 99,620 134,569 Additional due to business combination 16,256 — — Additional provision charged to expense 14,990 34,949 54,512 Write-off of accounts receivable (547) — (725) Balance at the end of the year 99,620 134,569 188,356 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SHORT-TERM INVESTMENTS. | |
Schedule of short-term investments | Short-term investments consisted of the following as of December 31, 2023: As of December 31, 2023 RMB Aggregate cost basis 354,149 Gross unrealized holding gain 2,671 Aggregate fair value 356,820 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | As of December 31, 2022 2023 RMB RMB Prepaid expenses (1) 988,467 1,344,525 Tax recoverable 620,901 907,629 Deposits 59,653 33,941 Loans to third parties (2) 376,851 5,787 Staff advances 2,992 2,518 Interest receivables 544 532 Others 98,092 80,409 2,147,500 2,375,341 (1) Prepaid expenses mainly represented the unamortized portion of prepayments made to Microsoft for the cloud services, the prepayments to telecommunication operators for bandwidth, data centers or cabinets and the prepayments for office expense. (2) In December 2022, loan amounting to RMB 279,500 was provided to the third party selling shareholders of KS Kunhui (Note 4) to settle the liabilities to KS Kunhui. The loan bears an interest rate of 7.5% per annum and has a maturity term ranging from four to six months . The loan was secured by the third parties’ equity shares in their subsidiaries and certain property and equipment of their subsidiaries. During 2023, RMB 85,000 was repaid to the Company, RMB 194,500 of the above outstanding loan as well as RMB 93,400 of another loan provided to a third party in September 2021 with an original maturity period of 18 months were overdue and full amount of allowance for credit losses was recognized as of December 31, 2023. The credit losses were recorded in allowance for doubtful debt in the consolidated statement of operations. |
Schedule of allowance for doubtful debt | For the years ended December 31, 2022 2023 RMB RMB Balance at beginning of the year 130,908 131,624 Addition 15,460 313,993 Write-off (15,000) — Foreign exchange difference 256 52 Balance at the end of the year 131,624 445,669 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, including those held under finance leases | As of December 31, 2022 2023 RMB RMB At cost: Property 2,236,257 2,672,822 Leasehold improvements 4,819,257 5,821,394 Computer and network equipment 7,577,082 8,437,075 Optical fibers 142,723 142,723 Office equipment 87,093 93,543 Motor vehicles 4,098 3,937 14,866,510 17,171,494 Less: Accumulated depreciation (5,548,663) (6,987,542) 9,317,847 10,183,952 Construction-in-progress 2,770,348 3,444,237 Impairment (123,697) (603,796) Property and equipment, net 11,964,498 13,024,393 |
Schedule of depreciation expense | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Cost of revenues 1,107,655 1,386,800 1,573,970 Sales and marketing expenses 963 1,029 1,721 General and administrative expenses 23,186 35,715 38,280 Research and development expenses 32,921 39,006 49,961 1,164,725 1,462,550 1,663,932 |
Schedule of carrying amounts of the Company's property and equipment held under finance leases | As of December 31, 2022 2023 RMB RMB Property 993,158 993,158 Computer and network equipment 971,814 648,989 Optical fibers 137,924 137,924 2,102,896 1,780,071 Less: Accumulated depreciation (847,449) (709,209) 1,255,447 1,070,862 Construction-in-progress — 219,283 Impairment (18,808) (19,361) 1,236,639 1,270,784 |
Schedule of carrying amounts of property and equipment pledged by the Company to secure banking borrowings | As of December 31, 2022 2023 RMB RMB Property 118,050 155,239 Leasehold improvements 92,629 246,662 Computer and network equipment 137,876 442,167 Office equipment 919 1,829 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS, NET | |
Schedule of intangible assets | Radio Internal Purchased spectrum Operating Technology Customer Supplier Trade Customer Non-Complete use software license Permits Platform relationships Licenses relationships names contract Agreement software Total RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Intangible assets, cost December 31, 2022 207,565 134,543 1,217,876 38,050 257,183 5,772 39,053 116,266 190,141 1,800 74,224 2,282,473 Accumulated amortization (139,443) (83,294) (56,433) (18,258) (235,810) (3,428) (34,281) (48,929) (68,622) (1,800) (53,785) (744,083) Impairment — (41,259) — — — — — — — — — (41,259) Intangible assets, net December 31, 2022 68,122 9,990 1,161,443 19,792 21,373 2,344 4,772 67,337 121,519 — 20,439 1,497,131 Intangible assets, cost December 31, 2023 233,513 136,825 1,199,210 38,050 257,183 5,772 39,053 116,266 190,141 1,800 90,419 2,308,232 Accumulated amortization (157,081) (87,145) (89,226) (23,739) (256,888) (3,812) (37,299) (54,742) (89,002) (1,800) (67,020) (867,754) Impairment (802) (41,959) — (14,311) — — — — — — — (57,072) Intangible assets, net December 31, 2023 75,630 7,721 1,109,984 — 295 1,960 1,754 61,524 101,139 — 23,399 1,383,406 |
Schedule of annual estimated amortization expenses of intangible assets | RMB 2024 294,541 2025 153,513 2026 27,877 2027 17,591 2028 11,325 504,847 |
LAND USE RIGHTS, NET (Tables)
LAND USE RIGHTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LAND USE RIGHTS, NET. | |
Land use rights | As of December 31, 2022 2023 RMB RMB Cost 617,808 664,272 Accumulated amortization (41,788) (61,769) Land use rights, net 576,020 602,503 |
Carrying value of land use rights pledged by company to secure banking borrowings | As of December 31, 2022 2023 RMB RMB Land use rights 115,895 196,195 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL. | |
Schedule of changes in the carrying amount of goodwill | For the years ended December 31, 2022 2023 RMB RMB Balance as of January 1 Goodwill, gross 1,339,657 1,364,191 Accumulated impairment losses — — Goodwill, net 1,339,657 1,364,191 Goodwill acquired 24,534 — Impairment — (1,364,191) Balance as of December 31 Goodwill, gross 1,364,191 1,364,191 Accumulated impairment losses — (1,364,191) Goodwill, net 1,364,191 — |
LONG-TERM INVESTMENTS, NET (Tab
LONG-TERM INVESTMENTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LONG-TERM INVESTMENTS, NET | |
Schedule of long-term investments | As of December 31, 2022 2023 RMB RMB Equity investments without readily determinable fair values 17,137 19,821 Equity method investments 223,457 738,128 Available-for-sale debt investments 1,600 — 242,194 757,949 |
Schedule of equity method investments | Equity method investments: Increase (decrease) during the year ended As of December 31, 2021 December 31, 2022 As of December 31, 2022 Share Investments Share Distribution/derecognize Share Impairment Investments Cost of equity Impairment of in equity Cost of equity gain of share equity Cost of equity gain of in equity investments loss investment investee investments (loss) (gain) loss investments (loss) investment investee RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Yizhuang Fund 101,000 (32,285) — 68,715 — 3,159 (71,874) — — — — Jingliang Inter Cloud 6,000 (5,013) — 987 — (4) — 6,000 (5,017) — 983 Jingliang Century Cloud 4,000 — — 4,000 — — — 4,000 — — 4,000 ZJK Energy 5,907 (3,816) — 2,091 — 16 — 5,907 (3,800) — 2,107 WiFire Entities 20,000 (20,000) — — — — — 20,000 (20,000) — — Qidi Chengxin 3,930 (217) — 3,713 — (116) — 3,930 (333) — 3,597 BJ Chaohulian 5,000 (1,505) (3,495) — — — — 5,000 (1,505) (3,495) — Dexin Tonglian — — — — 3,000 (333) — 3,000 (333) — 2,667 SH Edge Interchange* — — — — 900 (797) — 900 (797) — 103 Changzhou Gaoxin — — — — 210,000 — — 210,000 — — 210,000 145,837 (62,836) (3,495) 79,506 213,900 1,925 (71,874) 258,737 (31,785) (3,495) 223,457 Increase (decrease) during the year ended As of December 31, 2022 December 31, 2023 As of December 31, 2023 Share Impairment Investments Share Distribution/derecognize Share Impairment Investments Cost of equity of in equity Cost of equity gain of share equity Cost of equity of in equity investments loss investment investee investments (loss) (gain)loss investments gain (loss) investment investee RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Jingliang Inter Cloud 6,000 (5,017) — 983 — (2) — 6,000 (5,019) — 981 Jingliang Century Cloud 4,000 — — 4,000 — — — 4,000 — — 4,000 ZJK Energy 5,907 (3,800) — 2,107 — (45) — 5,907 (3,845) — 2,062 WiFire Entities 20,000 (20,000) — — (20,000) — 20,000 — — — — Qidi Chengxin 3,930 (333) — 3,597 — (119) — 3,930 (452) — 3,478 BJ Chaohulian 5,000 (1,505) (3,495) — — — — 5,000 (1,505) (3,495) — Dexin Tonglian 3,000 (333) — 2,667 — (475) — 3,000 (808) — 2,192 SH Edge Interchange* 900 (797) — 103 — (103) — 900 (900) — — Changzhou Gaoxin 210,000 — — 210,000 488,392 5,107 — 698,392 5,107 — 703,499 Zhuhai Private — — — — 23,000 (1,084) — 23,000 (1,084) — 21,916 258,737 (31,785) (3,495) 223,457 491,392 3,279 20,000 750,129 (8,506) (3,495) 738,128 * “SH Edge Interchange” represents Shanghai Edge Cloud Interchange Technology Co., Ltd. |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
BORROWINGS | |
Schedule of borrowings and thier securities | As of December 31, 2022 2023 RMB RMB Short term bank borrowings — 30,000 Long-term bank borrowings, current portion 289,941 334,511 Other long-term borrowings, current portion 194,079 388,814 484,020 753,325 Long-term bank borrowings, non-current portion 2,694,249 4,170,981 Other long-term borrowings, non-current portion 355,607 942,540 Total borrowings 3,533,876 5,866,846 December 31, 2022 Long-term borrowings (including current portion) Secured by (RMB) 1,879,631 Secured by a subsidiary’s share. 800,989 Secured by a subsidiary’s land-use right with net book value of RMB24,460 (Note 10). 247,171 Secured by a subsidiary’s property and equipment and land-use right with net book value of RMB118,050 and RMB91,435, respectively (Note 8/Note 10), and a subsidiary’s share. 156,077 Secured by a subsidiary’s property and equipment with net book value of RMB231,424 (Note 8), and a subsidiary’s share. 450,008 Unsecured borrowing. 3,533,876 14. BORROWINGS (CONTINUED) December 31, 2023 Short-term borrowings Secured by (RMB) 30,000 Unsecured borrowing. Long-term borrowings (including current portion) Secured by (RMB) 2,180,490 Secured by a subsidiary’s share. 3,101,522 Secured by property and equipment and land-use right with net book value of RMB845,898 and RMB196,195, respectively (Note 8/Note 10), and a subsidiary’s share 554,834 Unsecured borrowing. 5,836,846 |
Schedule of repayments of the principal amounts of the Company's long-term borrowings, including bank and other borrowings | RMB For the years ending December 31, 2024 799,314 2025 816,677 2026 751,209 2027 683,110 2028 689,511 2029 and thereafter 2,273,233 |
ACCRUED EXPENSES AND OTHER PA_2
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER PAYABLES | |
Schedule of components of accrued expenses and other payables | As of December 31, 2022 2023 RMB RMB Payables for purchase of property, equipment and software 1,280,742 1,431,547 Payroll and welfare payables 433,376 477,367 Consideration due to the original shareholders of BJ TenxCloud (1) 229,323 229,323 Liability classified share-based payments (1) 131,116 149,612 Accrued service fees 66,494 126,001 Payables for office supplies and utilities 69,288 105,871 Payables for acquisitions and long-term investments 47,805 99,340 Value-added tax and other taxes payable 31,706 35,391 Interest payables 35,785 77,168 Others 84,844 51,482 2,410,479 2,783,102 (1) On July 15, 2021, the Company acquired 100% of the equity interests in BJ TenxCloud from third party selling shareholders. The balance of consideration due to original shareholders represented the amounts the selling shareholders claimed according to the acquisition agreement. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of weighted-average remaining lease term and weighted-average discount rate | As of December 31, 2022 2023 Weighted average remaining lease term: Operating lease 10.7 years 9.7 years Finance lease 18.9 years 18.7 years Weighted average discount rate: Operating lease 7.50 % 7.59 % Finance lease 10.44 % 10.04 % |
Schedule of total lease cost | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Lease cost Finance lease cost: Depreciation 274,052 224,140 199,926 Interest expenses 124,567 104,088 90,679 Operating lease cost 568,044 691,197 749,800 Total lease cost 966,663 1,019,425 1,040,405 |
Schedule of supplemental cash flow information related to leases | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases 593,615 635,615 796,541 Financing cash payments for finance leases 579,660 231,046 210,902 |
Schedule of future lease payments under operating leases and finance leases | Operating Leases Finance Leases RMB RMB 2024 807,678 180,355 2025 739,747 173,799 2026 680,034 165,015 2027 545,468 158,978 2028 528,173 156,920 2029 and thereafter 2,630,069 1,705,594 Total future lease payments 5,931,169 2,540,661 Less: Imputed interest (1,880,246) (1,265,329) Present value of future lease payments* 4,050,923 1,275,332 * Present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to RMB780,164 and RMB3,270,759 for the year ended December 31, 2023, respectively. Present value of future finance lease payments consisted of current portion of finance lease liabilities and non-current portion of finance lease liabilities, amounting to RMB115,806 and RMB1,159,525 for the year ended December 31, 2023, respectively. |
DEFERRED GOVERNMENT GRANTS (Tab
DEFERRED GOVERNMENT GRANTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DEFERRED GOVERNMENT GRANTS. | |
Schedule of movements of deferred government grants | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Balance at beginning of the year 6,174 4,368 6,318 Additions — 5,000 155,333 Recognized as a reduction of depreciation expense (1,806) (3,050) (8,477) Balance at end of the year 4,368 6,318 153,174 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED COMPENSATION. | |
Schedule of employee share option activity under the 2010 Plan | Weighted Weighted average average remaining Aggregate Number of exercise contractual intrinsic options price term value (US$) (Years) (US$) Outstanding, January 1, 2023 359,202 0.17 1.96 — Exercised — — — — Outstanding, December 31, 2023 359,202 0.17 1.00 114 Vested as of December 31, 2023 359,202 0.17 1.00 114 Exercisable as of December 31, 2023 359,202 0.17 1.00 114 |
Schedule of RSUs activity under the 2014 Plan | Weighted Weighted average average Aggregate Number of grant date remaining intrinsic RSUs fair value contractual life value (US$) (Years) (US$) Unvested, January 1, 2023 1,700,864 11.28 6.1 — Granted 1,388,777 2.96 — — Vested (507,282) 5.04 — — Forfeited (2,553) 13.26 — — Unvested, December 31, 2023 2,579,806 8.07 6.6 7,404 |
Schedule of total share-based compensation expenses relating to share options and RSUs granted to employees | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Cost of revenues 13,713 563 — Sales and marketing expenses 2,545 17,794 3,141 General and administrative expenses 292,947 85,508 28,883 Research and development expenses 10,805 14,305 3,272 320,010 118,170 35,296 |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
TAXATION | |
Schedule of loss before income taxes | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Non-PRC 675,369 (421,597) (331,586) PRC (48,861) (206,933) (2,151,209) 626,508 (628,530) (2,482,795) |
Schedule of income tax expenses | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Current (111,082) (115,577) (157,526) Deferred (325) (17,887) 43,152 (111,407) (133,464) (114,374) |
Schedule of reconciliation of tax computed by applying the statutory income tax rate | The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2021, 2022 and 2023 applicable to the PRC operations to income tax expenses were as follows: For the years ended December 31, 2021 2022 2023 RMB RMB RMB Income (loss) before income taxes 626,508 (628,530) (2,482,795) Income tax (expenses) benefits computed at applicable tax rates (25%) (156,627) 157,133 620,699 Non-deductible expenses (13,116) (72,156) (700) Research and development expenses 45,122 67,789 65,863 Preferential rate 14,232 (6,163) (6,140) Current and deferred tax rate differences 26,115 15,847 11,036 International rate differences 120,678 (75,119) (101,585) Tax exempted income 14,536 249 2,803 Foreign investment (49,815) (39,224) (53,617) Unrecognized tax benefits (12,338) (13,674) (11,283) Change in valuation allowance (79,733) (135,732) (606,071) Prior year provision to return true up (22,898) (28,949) (34,759) Others 2,437 (3,465) (620) Income tax expenses (111,407) (133,464) (114,374) |
Schedule of significant components of deferred taxes | As of December 31, 2022 2023 RMB RMB Deferred tax assets Allowance for doubtful debt 52,658 125,500 Impairment of long-lived assets 40,784 166,576 Impairment of long-term investments 3,024 4,866 Accrued expense 22,108 39,896 Tax losses 358,454 849,672 Property and equipment 38,365 2,919 Intangible assets 7,142 9,432 Finance lease 372,997 386,327 Deferred government grant 1,714 3,357 Operating lease 768,638 949,362 Loss picked up on equity method investments 69,440 10,558 Valuation allowance (397,457) (955,738) Total deferred tax assets, net of valuation allowance 1,337,867 1,592,727 Deferred tax liabilities Intangible assets 266,922 405,964 Property and equipment 360,989 172,095 Capitalized interest expense 39,606 49,544 Finance lease 289,586 296,789 Operating lease 768,638 949,362 Investment in subsidiaries 98,608 159,691 Total non-current deferred tax liabilities 1,824,349 2,033,445 Net deferred tax liabilities (486,482) (440,718) Analysis as: Deferred tax assets 196,098 247,644 Deferred tax liabilities 682,580 688,362 Net deferred tax liabilities (486,482) (440,718) For the years ended December 31, 2022 2023 RMB RMB Balance at beginning of year 261,960 397,457 Addition 135,732 606,071 Expiration (235) (47,790) Balance at end of year 397,457 955,738 |
Schedule of roll-forward of unrecognized tax benefits | For the years ended December 31, 2022 2023 RMB RMB Balance at beginning of year 64,854 64,528 Reversal based on tax positions related to prior years (418) — Additions based on tax positions related to the current year 92 — Balance at end of year 64,528 64,528 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
Schedule of significant related party transactions | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Services provided to: -SZ Century 1,445 14,089 — -SH Edge Interchange — 651 938 -Jingliang Inter Cloud 480 — — -BJ New Internet 170 — — -Others 144 2 — Services provided by: -CYSD 38,918 36,673 31,119 -Beijing Huaqing 1,254 — — -Sanhe Mingtai (1) — — 17,366 -Beijing Jiwa — — 1,891 -Others 1,223 513 333 Loan to: -Shanghai Puping 75,611 — 80,263 - BJ New Internet 261 — — -SH Edge Interchange — 500 1,000 -Sanhe Mingtai — — 33,785 Receipt of loan to: -SH Shibei — — 9,800 Loan by: -Changzhou Gaoxin (2) — — 350,000 Interest income from loan to: -SH Shibei 1,321 — (1,321) -SH Edge Interchange — 1 32 Interest expense by loan to: -Changzhou Gaoxin — — 13,183 Lease payment paid to: -Ziguang Finance Leasing 10,431 — — -Beijing Qidi Yefeng 2,154 — — -Sanhe Mingtai (1) — — 10,801 Cash consideration for shares repurchase -Tuspark Innovation 1,701,804 — — (1) The Company leased properties for data centers from Sanhe Mingtai. Lease cost and property management fee was RMB14,268 and RMB3,098 for the period from March 1, 2023 to December 31, 2023, respectively. As of December 31, 2023, ROU assets of RMB171,629 and lease liabilities of RMB173,628 were associated with such leases. (2) In May 2023, the Company obtained a loan in the amount of RMB350,000 from Changzhou Gaoxin at an interest rate of 6.0% per annum. The maturity date of the loan was March 2024, which was subsequently extended to July 2024 in March 2024. |
Schedule of related party balances | As of December 31, 2022 2023 RMB RMB Amounts due from related parties: Current: -Shanghai Puping 138,142 218,405 -SH Shibei 11,121 — -BJ New Internet 441 441 -SH Edge Interchange 1,191 1,533 -Sanhe Mingtai — 56,833 -Others 1,194 25 152,089 277,237 Amounts due to related parties: Current: - CYSD 6,398 — -Changzhou Gaoxin — 356,067 -Others 530 13 6,928 356,080 |
EARNING (LOSS) PER SHARE (Table
EARNING (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EARNING (LOSS) PER SHARE | |
Schedule of basic and diluted loss per share | For the years ended December 31, 2021 2022 2023 RMB RMB RMB Numerator: Net income (loss) 515,101 (761,994) (2,597,169) Net income attributable to noncontrolling interest (15,003) (13,958) (46,667) Net income (loss) attributable to the Company 500,098 (775,952) (2,643,836) Dividend distribution to perpetual convertible preferred shareholders (5,831) — — Adjusted net income (loss) attributable to ordinary shareholders - Basic 494,267 (775,952) (2,643,836) Changes in the fair value of financial liabilities (829,149) — — Adjusted interest for convertible promissory notes 9,703 — — Adjusted net loss attributable to ordinary shareholders -Diluted (325,179) (775,952) (2,643,836) Denominator: Weighted average number of shares outstanding—basic 865,352,554 886,817,620 901,143,138 Weighted average number of shares outstanding—diluted 911,591,433 886,817,620 901,143,138 Earning (loss) per share—Basic: Net earning (loss) 0.57 (0.87) (2.93) 0.57 (0.87) (2.93) Loss per share—Diluted: Net loss (0.36) (0.87) (2.93) (0.36) (0.87) (2.93) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Summary of assets and liabilities measured at fair value on a recurring basis | Fair value measurement using: Quoted prices in Significant other active markets for observable Unobservable identical assets inputs inputs Fair value at (Level 1) (Level 2) (Level 3) December 31, 2022 RMB RMB RMB RMB Long-term investments: - Available-for-sale debt securities — — 1,600 1,600 Assets — — 1,600 1,600 Convertible promissory notes - 2025 Convertible promissory notes — — 537,778 537,778 - 2026 Convertible promissory notes 3,446,432 — — 3,446,432 - 2027 Convertible promissory notes — — 1,858,095 1,858,095 Liabilities 3,446,432 — 2,395,873 5,842,305 Fair value measurement using: Quoted prices in Significant other active markets for observable Unobservable identical assets inputs inputs Fair value at (Level 1) (Level 2) (Level 3) December 31, 2023 RMB RMB RMB RMB Short-term investments: - Wealth management product — 356,820 — 356,820 Assets — 356,820 — 356,820 Convertible promissory notes - 2026 Convertible promissory notes 4,196,500 — — 4,196,500 - 2027 Convertible promissory notes — — 1,586,681 1,586,681 Derivative liability — — 188,706 188,706 Liabilities 4,196,500 — 1,775,387 5,971,887 |
Summary of reconciliation of all liabilities measured at fair value on a recurring basis using significant unobservable inputs (level 3) | 2025 Convertible Notes RMB Fair value at December 31, 2021 513,754 Foreign exchange loss 46,650 Changes in fair value (22,626) Fair value at December 31, 2022 537,778 Changes in fair value (21,816) Settlement (527,089) Foreign exchange loss 11,127 Fair value at December 31, 2023 — Share consideration due to the original shareholders for business combination RMB Fair value at December 31, 2021 214,577 Transfer out of Level 3 (214,577) Fair value at December 31, 2022 — Derivative liability RMB Fair value at December 31, 2022 — Changes in fair value 187,746 Foreign exchange loss 960 Fair value at December 31, 2023 188,706 |
2025 Convertible Notes | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Summary of fair value of convertible notes measured using key assumptions | As of December 31 2022 Volatility 94.00%-96.00 % Discount rate 16.00 % Risk-free interest rate 4.23%-4.28 % |
Derivative Liability | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Summary of fair value of convertible notes measured using key assumptions | As of December 31 2023 Volatility 90.00 % Discount rate 14.65 % Risk-free interest rate 3.99 % Probability of triggering events 15.00 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule of commitments to purchase certain computer and network equipment and construction-in-progress | |
Purchase commitments | As of December 31, 2023, the Company has the following commitments to purchase certain computer and network equipment and construction-in-progress: RMB For the year ending December 31, 2024 1,435,439 2025 348,096 2026 6,120 2027 7,402 2028 3,744 2029 and thereafter 7 1,800,808 |
Schedule of outstanding purchase commitments in relation to bandwidth and cabinet capacity | |
Purchase commitments | As of December 31, 2023, the Company has outstanding purchase commitments in relation to bandwidth and cabinet capacity consisting of the following: RMB For the year ending December 31, 2024 888,030 2025 227,716 2026 173,244 2027 72,906 2028 7,820 2029 and thereafter 2,627 1,372,343 |
PARENT COMPANY ONLY CONDENSED_2
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | |
Condensed balance sheets | Condesed balance sheets As of December 31, 2022 2023 RMB RMB ASSETS Current assets: Cash and cash equivalents 7,661 30 Prepaid expenses and other current assets 99,962 192,953 Amounts due from subsidiaries 12,399,253 13,352,240 Total current assets 12,506,876 13,545,223 Non-current assets: Investments in subsidiaries 1,484,730 — Total non-current assets 1,484,730 — Total assets 13,991,606 13,545,223 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accrued expenses and other payables 88,225 137,826 Account payables 56 57 Convertible promissory notes 537,778 4,208,495 Amounts due to subsidiaries 896,675 1,225,778 Total current liabilities 1,522,734 5,572,156 Non-current liabilities: Convertible promissory notes 5,859,259 1,769,946 Derivative liability — 188,706 Total non-current liabilities 5,859,259 1,958,652 Total liabilities 7,381,993 7,530,808 Shareholders’ equity: Class A ordinary shares 56 103 Class B ordinary shares 4 4 Class C ordinary shares — — Additional paid-in capital 15,239,926 17,291,312 Accumulated other comprehensive income (loss) 11,022 (14,343) Accumulated deficit (8,291,872) (10,935,708) Treasury stock (349,523) (326,953) Total shareholders’ equity 6,609,613 6,014,415 Total liabilities and shareholders’ equity 13,991,606 13,545,223 |
Condensed statements of operations | Conensed statements of operations For the years ended December 31, 2021 2022 2023 RMB RMB RMB Operating expenses General and administrative expenses (275,881) (36,219) (24,663) Operating loss (275,881) (36,219) (24,663) Other loss (119,932) (247,083) (94,452) Changes in the fair value of financial liabilities 829,149 22,626 (165,930) Share of profits (losses) from subsidiaries and Consolidated VIEs 66,762 (515,276) (2,358,791) Net income (loss) 500,098 (775,952) (2,643,836) |
Condensed statements of comprehensive (loss) income | Condensed statements of comprehensive income (loss) For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net income (loss) 500,098 (775,952) (2,643,836) Other comprehensive (loss) income, net of tax of nil Foreign currency translation adjustments, net of tax of nil (34,908) 101,465 (25,365) Other comprehensive (loss) income, net of tax of nil (34,908) 101,465 (25,365) Comprehensive income (loss) 465,190 (674,487) (2,669,201) |
Condensed statements of cash flows | Condensed statements of cash flows For the years ended December 31, 2021 2022 2023 RMB RMB RMB Net cash (used in) generated from operating activities (218,664) (14,927) 29,940 Net cash generated from (used in) investing activities 113,530 (1,670,058) (37,571) Net cash generated from financing activities 143,037 1,592,627 — Net increase (decrease) in cash and cash equivalents 37,903 (92,358) (7,631) Cash and cash equivalents at beginning of the year 62,116 100,019 7,661 Cash and cash equivalents at end of the year 100,019 7,661 30 |
ORGANIZATION - Significant subs
ORGANIZATION - Significant subsidiaries of the Company and consolidated variable interest entities (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Subsidiaries | Beijing Jianghe Cloud Industrial Internet Technology Co., Ltd.("Jianghe Industrial") | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Subsidiaries | Beijing Xunneng Digital Industry Empowerment Center Co., Ltd.("BJ Xunneng") | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Subsidiaries | Huailai Hulianyun Technology Co., Ltd. (Huailai Hulianyun) | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Subsidiaries | VNET Technology Development (Suzhou) Co., Ltd. (Suzhou Technology) | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Subsidiaries | Tongyun Internet (Beijing) Cloud Computing Technology Co., Ltd. (Tongyun BJ) | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Group Limited ("VNET HK") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Data Center Co., Ltd. ("VNET China") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET (Foshan) Technology Co., Ltd. ("FS Technology") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Anhui Suzhou Technology Co., Ltd. ("SZ Technology") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Hangzhou Information Technology Co., Ltd. ("HZ Technology") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Mobile Limited ("VNET Mobile") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
WiFire Group Inc. ("WiFire Group") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Joytone Infotech Co., Ltd. ("SZ Zhuoaiyi") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Ventures Limited ("Ventures") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Abitcool (China) Broadband Inc. ("aBitCool DG") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Diyixian.com Limited ("Diyixian.com") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET Zhuhai Financial Leasing Co., Ltd. ("Zhuhai Financial Leasing") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
VNET DRP Investment Holdings Limited ("DRP investment") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Shihua DC Investment Holdings Limited | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 51% |
VNET (Xi’an) Technology Co., Ltd. ("Xi’an Tech") [Member] | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 51% |
Foshan Zhuoyi Intelligence Date Co., Ltd. ("FS Zhuoyi") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 51% |
Beijing Hongyuan Network Technology Co., Ltd | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 51% |
Dermot Holding Limited | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Shihua DC Investment Holdings 2 Limited ("Shihua Holdings 2") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Shanghai Waigaoqiao Free Trade Zone Hongming Logistics Co., Ltd. ("Hongming Logistics") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Shanghai Edge Connect Technology Co., Ltd. ("SH Edge Connect") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Beijing Jianghe Cloud Technology Co.,Ltd. ("BJ JHC") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Beijing Shuntou Green Energy Data Technology Co.,Ltd. ("BJ ST") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Jiwa Senlin (Beijing) Engineering Co.,Ltd.( "Jiwa Engineering BJ") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Beijing TenxCloud Technology Co., Ltd. ("BJ TenxCloud") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Zhongke Zijing Technology Co., Ltd. ("Zhongke Zijing") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Gu'an Junhui Network Technology Co., Ltd. ("Gu'an Junhui") | Subsidiaries | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Shenzhen Diyixian Telecommunication Co., Ltd | Variable Interest Entity, Primary Beneficiary | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 20% |
Shanghai Hesheng Data System Co., Ltd. ("SH Hesheng") | Subsidiaries | Beijing Jianghe Shuzhi Technology Co., Ltd. | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
Shanghai Edge Blue Cloud Network Technology Co., Ltd. | Subsidiaries | Jianghe Chuangke (Beijing) Technology Co., Ltd.("Jianghe Chuangke") | |
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | |
Percentage of direct ownership by the Company | 100% |
ORGANIZATION - Significant su_2
ORGANIZATION - Significant subsidiaries of the Company and consolidated variable interest entities (Parenthetical) (Details) | Aug. 01, 2022 | Nov. 11, 2021 | Aug. 16, 2021 | Jul. 15, 2021 |
BJ JHC | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
BJ TenxCloud | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
SH Hesheng | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
Zhongke Zijing | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
Jianghe Shuzhi | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
Jianghe Chuangke | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
Jianghe Industrial | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% | |||
BJ Xunneng | ||||
Significant subsidiaries of the Company, VIEs and subsidiaries of VIEs | ||||
Percentage of equity interests acquired | 100% |
ORGANIZATION - Additional Infor
ORGANIZATION - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 19, 2016 | Jan. 31, 2011 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
ORGANIZATION | |||||
Assets | ¥ 30,385,903,000 | $ 4,279,765 | ¥ 26,948,405,000 | ||
Consolidated VIE's assets pledged as collateral | 0 | ||||
Consolidated VIE's liabilities pledged as collateral | 0 | ||||
Option Agreement | |||||
ORGANIZATION | |||||
Exclusive option price | ¥ 1 | ||||
Agreement agreement between 21Vianet China and the 21Vianet Technology, term | 10 years | 10 years | |||
Agreement agreement between 21Vianet China and the 21Vianet Technology, expiration date | Dec. 18, 2026 | Dec. 18, 2016 | |||
Technical Consulting and Service Agreement | |||||
ORGANIZATION | |||||
Agreement agreement between 21Vianet China and the 21Vianet Technology, term | 10 years | 10 years | |||
Agreement agreement between 21Vianet China and the 21Vianet Technology, expiration date | Dec. 18, 2026 | Dec. 18, 2016 | |||
Service fee per hour | ¥ 1,000 | ||||
Loan Agreement | Shareholders | Loan one | |||||
ORGANIZATION | |||||
Loan facility provided to related parties | ¥ 7,000,000 | ||||
Loan Agreement | Shareholders | Loan Two | |||||
ORGANIZATION | |||||
Loan facility provided to related parties | ¥ 3,000,000 | ||||
Variable Interest Entity, Primary Beneficiary | |||||
ORGANIZATION | |||||
Assets | 17,294,365,000 | ¥ 17,323,660,000 | |||
Variable Interest Entity, Primary Beneficiary | Asset Pledged as Collateral | |||||
ORGANIZATION | |||||
Assets | ¥ 619,738,000 |
ORGANIZATION - Financial inform
ORGANIZATION - Financial information of the consolidated VIEs (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Current assets: | |||||
Cash and cash equivalents | ¥ 2,243,537 | ¥ 2,661,321 | ¥ 1,372,481 | $ 315,996 | |
Restricted cash | 2,854,568 | 327,673 | 327,767 | 402,057 | |
Prepaid expenses and other current assets | 2,375,341 | 2,147,500 | 334,560 | ||
Total current assets | 9,823,478 | 7,052,276 | 1,383,608 | ||
Non-current assets: | |||||
Property and equipment, net | 13,024,393 | 11,964,498 | 1,834,447 | ||
Intangible assets, net | 1,383,406 | 1,497,131 | 194,849 | ||
Land use rights, net | 602,503 | 576,020 | 84,861 | ||
Operating lease right-of-use assets, net | 4,012,329 | 3,503,925 | 565,125 | ||
Goodwill net | 1,364,191 | ||||
Restricted cash | 882 | 500 | 8,225 | 124 | |
Deferred tax assets, net | 247,644 | 196,098 | 34,880 | ||
Other non-current assets | 533,319 | 551,572 | 75,116 | ||
Long-term investments, net | 757,949 | 242,194 | 106,755 | ||
Total non-current assets | 20,562,425 | 19,896,129 | 2,896,157 | ||
Total assets | 30,385,903 | 26,948,405 | 4,279,765 | ||
Current liabilities: | |||||
Accounts and notes payable | 696,177 | 713,628 | 98,054 | ||
Accrued expenses and other payables | 2,783,102 | 2,410,479 | 391,992 | ||
Advances from customers | 1,605,247 | 1,157,963 | 226,094 | ||
Deferred revenue | 95,477 | 95,078 | 13,448 | ||
Income taxes payable | 35,197 | 42,017 | 4,957 | ||
Current portion of finance lease liabilities | 115,806 | 206,260 | 16,311 | ||
Current portion of long-term borrowings | 334,511 | 289,941 | |||
Current portion of deferred government grant | 8,062 | 3,646 | 1,136 | ||
Current portion of operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 780,164 | 674,288 | 109,884 | ||
Total current liabilities | 11,437,132 | 6,332,085 | 1,610,886 | ||
Non-current liabilities: | |||||
Non-current portion of finance lease liabilities | 1,159,525 | 1,047,640 | 163,316 | ||
Unrecognized tax benefits | 98,457 | 87,174 | 13,867 | ||
Deferred tax liabilities | 688,362 | 682,580 | 96,954 | ||
Deferred government grants | 145,112 | 2,672 | 20,439 | ||
Non-current portion of operating lease liabilities of the Consolidated VIEs without resource to the primary beneficiaries | 3,270,759 | 2,905,283 | 460,677 | ||
Total non-current liabilities | 12,434,388 | 13,634,464 | 1,751,348 | ||
Total liabilities | 23,871,520 | 19,966,549 | 3,362,234 | ||
Net income (loss) | (2,597,169) | $ (365,805) | (761,994) | 515,101 | |
Net cash generated from operating activities | 2,063,480 | 290,635 | 2,440,214 | 1,387,922 | |
Net cash used in investing activities | (3,905,109) | (550,023) | (3,559,252) | (3,772,613) | |
Net cash generated from (used in) financing activities | 3,941,134 | 555,097 | 2,298,080 | 967,577 | |
Net increase (decrease) in cash and cash equivalents and restricted cash | 2,109,493 | $ 297,116 | 1,281,021 | (1,407,964) | |
Related Party [Member] | |||||
Current assets: | |||||
Amounts due from related parties | 277,237 | 152,089 | 39,048 | ||
Current liabilities: | |||||
Amounts due to related parties | 356,080 | 6,928 | $ 50,153 | ||
Variable Interest Entity, Primary Beneficiary | |||||
Current assets: | |||||
Cash and cash equivalents | 923,692 | 1,428,768 | |||
Restricted cash | 434,421 | 301,825 | |||
Accounts receivable (net of allowance for doubtful debt of RMB 100,797 and RMB 161,837 as of December 31, 2022 and 2023 respectively) | 1,412,456 | 1,400,546 | |||
Prepaid expenses and other current assets | 2,081,948 | 1,976,164 | |||
Total current assets | 4,911,340 | 5,121,245 | |||
Non-current assets: | |||||
Property and equipment, net | 7,398,768 | 7,495,362 | |||
Intangible assets, net | 453,606 | 475,652 | |||
Land use rights, net | 56,971 | 44,233 | |||
Operating lease right-of-use assets, net | 3,948,272 | 3,452,533 | |||
Goodwill net | 332,645 | ||||
Restricted cash | 382 | ||||
Deferred tax assets, net | 208,266 | 153,676 | |||
Other non-current assets | 148,383 | 165,570 | |||
Long-term investments, net | 168,377 | 82,744 | |||
Total non-current assets | 12,383,025 | 12,202,415 | |||
Total assets | 17,294,365 | 17,323,660 | |||
Current liabilities: | |||||
Short-term bank borrowings | 30,000 | ||||
Accounts and notes payable | 493,837 | 483,030 | |||
Accrued expenses and other payables | 1,616,423 | 1,488,031 | |||
Advances from customers | 1,605,247 | 1,157,963 | |||
Deferred revenue | 83,546 | 84,775 | |||
Income taxes payable | 13,531 | 25,188 | |||
Amounts due to inter-companies, net | 4,736,035 | 6,071,651 | |||
Current portion of finance lease liabilities | 97,388 | 165,221 | |||
Current portion of long-term borrowings | 544,803 | 417,442 | |||
Current portion of deferred government grant | 8,062 | 3,646 | |||
Current portion of operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | 754,935 | 655,663 | |||
Total current liabilities | 10,339,887 | 10,559,538 | |||
Non-current liabilities: | |||||
Amounts due to inter-companies, net | 1,020,972 | 1,020,972 | |||
Long-term borrowings | 2,464,811 | 1,861,545 | |||
Non-current portion of finance lease liabilities | 720,954 | 615,309 | |||
Unrecognized tax benefits | 98,082 | 86,799 | |||
Deferred tax liabilities | 139,174 | 149,475 | |||
Deferred government grants | 11,862 | 2,726 | |||
Non-current portion of operating lease liabilities of the Consolidated VIEs without resource to the primary beneficiaries | 3,230,506 | 2,872,323 | |||
Total non-current liabilities | 7,686,361 | 6,609,149 | |||
Total liabilities | 18,026,248 | 17,168,687 | |||
Net revenues | 6,418,125 | 5,944,519 | 5,145,110 | ||
Net income (loss) | (999,101) | (66,764) | 92,594 | ||
Net cash generated from operating activities | 1,418,796 | 1,351,179 | 866,712 | ||
Net cash used in investing activities | (1,431,085) | (1,849,339) | (2,695,707) | ||
Net cash generated from (used in) financing activities | (359,809) | 1,243,495 | 1,788,528 | ||
Net increase (decrease) in cash and cash equivalents and restricted cash | (372,098) | 745,335 | ¥ (40,467) | ||
Variable Interest Entity, Primary Beneficiary | Related Party [Member] | |||||
Current assets: | |||||
Amounts due from related parties | 58,823 | 13,942 | |||
Current liabilities: | |||||
Amounts due to related parties | ¥ 356,080 | ¥ 6,928 |
ORGANIZATION - Financial info_2
ORGANIZATION - Financial information of the consolidated VIEs (Parenthetical) (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity | ||
Accounts receivable, allowance for doubtful accounts | ¥ 161,837 | ¥ 100,797 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated useful lives of property and equipment (Details) | Dec. 31, 2023 |
Property | Minimum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 25 years |
Property | Maximum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 46 years |
Optical Fibers | Minimum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 10 years |
Optical Fibers | Maximum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 20 years |
Computer and network equipment | Minimum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 1 year |
Computer and network equipment | Maximum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 10 years |
Office equipment | Minimum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 2 years |
Office equipment | Maximum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 8 years |
Motor vehicles | Minimum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 2 years |
Motor vehicles | Maximum | |
PROPERTY AND EQUIPMENT, NET | |
Property and equipment, estimated useful life (in years) | 8 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Weighted average useful lives of intangible assets (Details) | Dec. 31, 2023 |
Purchased software | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 5 years 1 month 6 days |
Radio Spectrum License | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 15 years |
Operating Permits | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 32 years 1 month 6 days |
Customer relationships | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 8 years 3 months 18 days |
Licenses | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 15 years |
Supplier relationships | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 10 years |
Trade names | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 20 years |
Technology Platform | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 5 years |
Non-compete agreement | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 5 years |
Internal-use software | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 3 years 4 months 24 days |
Customer contract | |
Weighted average useful lives of intangible assets | |
Estimated useful life of intangible assets | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment charges associated with its long-lived assets and acquired intangibles (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Long-lived assets impairment | ¥ 506,686 | $ 71,365 | ¥ 0 | ¥ 109,267 |
Impairment of equipment | 480,099 | 106,311 | ||
Impairment of intangible assets | 15,113 | |||
Impairment of right-of-use assets | ¥ 11,474 | |||
Impairment of other non-current assets | 2,956 | |||
Other Asset Impairment Charges | ¥ 2,956 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Interest expenses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Interest expense and amortization cost of bonds payable | ¥ 133,959 | |||
Interest expense and amortization cost of 2025 and 2026 Convertible Notes (Note 19) | ¥ 59,429 | ¥ 58,350 | 25,919 | |
Interest expense on bank and other borrowings | 222,918 | 172,328 | 103,925 | |
Interest expense on finance leases | 90,679 | 104,088 | 124,567 | |
Total interest costs | 373,026 | 334,766 | 388,370 | |
Less: Total interest costs capitalized | (60,854) | (61,461) | (53,420) | |
Interest expenses, net | ¥ 312,172 | $ 43,969 | ¥ 273,305 | ¥ 334,950 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 CNY (¥) segment | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Significant accounting policies | |||||
Accumulated deficit | ¥ (11,016,323) | ¥ (8,369,868) | $ (1,551,617) | ||
Recorded credit loss | 368,505 | $ 51,903 | 35,409 | ¥ 18,399 | |
Internal use software development costs, Amount capitalized | ¥ 16,195 | 15,322 | 11,422 | ||
Percentage of interest in limited partnerships applies the equity method of accounting | 3% | 3% | |||
Impairment losses pursuant to the goodwill tests | ¥ 1,364,191 | $ 192,142 | 0 | ||
Impairment of long-lived assets | 506,686 | $ 71,365 | 109,267 | ||
Deferred revenue | 95,477 | 95,078 | 13,448 | ||
Advertising expense | ¥ 9,826 | 6,829 | 7,272 | ||
Share Repurchase Plan, share value | 1,704,890 | ||||
Number of reportable segments | segment | 1 | 1 | |||
Retained Earnings (Accumulated Deficit) | ¥ (11,016,323) | (8,369,868) | $ (1,551,617) | ||
Net current liability position | 1,600,000 | ||||
Escrow deposit | 2,117,730 | ||||
Depreciation expense | 1,663,932 | 1,462,550 | 1,164,725 | ||
Long-lived assets impairment | 506,686 | $ 71,365 | 0 | ¥ 109,267 | |
Contract with customer liability revenue recognized | 78,683 | ¥ 39,374 | |||
Change in useful lives | |||||
Significant accounting policies | |||||
Depreciation expense | (409,000) | ||||
2026 Convertible promissory notes | |||||
Significant accounting policies | |||||
Accumulated deficit | 11,000,000 | ||||
Retained Earnings (Accumulated Deficit) | ¥ 11,000,000 | ||||
Maximum | |||||
Significant accounting policies | |||||
Official exchange rate of foreign currency remeasured (RMB per one U.S. dollar) | 7.0999 | 7.0999 | |||
Maximum | Change in useful lives | |||||
Significant accounting policies | |||||
Property and equipment, estimated useful life (in years) | 15 years | 15 years | |||
Maximum | Data center Property And Equipment | |||||
Significant accounting policies | |||||
Property and equipment, estimated useful life (in years) | 10 years | 10 years | |||
Minimum | Change in useful lives | |||||
Significant accounting policies | |||||
Property and equipment, estimated useful life (in years) | 3 years | 3 years | |||
Minimum | Data center Property And Equipment | |||||
Significant accounting policies | |||||
Property and equipment, estimated useful life (in years) | 2 years | 2 years |
CONCENTRATION OF RISKS (Details
CONCENTRATION OF RISKS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 CNY (¥) customer item | Dec. 31, 2022 CNY (¥) item customer | Dec. 31, 2021 customer item | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | |
CONCENTRATION OF RISKS | |||||
Depreciation (appreciation) of RMB against US$ | 1.70% | 9.20% | (2.30%) | ||
Customer Concentration Risk | |||||
CONCENTRATION OF RISKS | |||||
Number of customers who contributed more than 2% of Company's revenue | customer | 0 | 0 | 0 | ||
Cabinet and Bandwidth Supply | |||||
CONCENTRATION OF RISKS | |||||
Number of suppliers | item | 5 | 5 | 5 | 5 | 5 |
Bandwidth and Cabinet Resources | Supplier Concentration Risk | Largest five suppliers | |||||
CONCENTRATION OF RISKS | |||||
Concentration of risk, percentage | 42% | 35% | 39% | ||
Bandwidth and Cabinet Resources | Customer Concentration Risk | Largest single customer | Maximum | |||||
CONCENTRATION OF RISKS | |||||
Concentration of risk, percentage | 10% | 10% | 10% | ||
Bandwidth and Cabinet Resources | Customer Concentration Risk | Aggregate local subsidiaries of a telecommunication carrier | |||||
CONCENTRATION OF RISKS | |||||
Concentration of risk, percentage | 5% | 6% | 6% | ||
Bandwidth and Cabinet Resources | Customer Concentration Risk | Customers on a stand-alone basis | Minimum | |||||
CONCENTRATION OF RISKS | |||||
Concentration of risk, percentage | 2% | 2% | 2% | ||
PRC | Credit Concentration Risk | |||||
CONCENTRATION OF RISKS | |||||
Cash and cash equivalents, restricted cash and short-term investments, held at major institutions | ¥ | ¥ 2,431,089 | ¥ 2,677,823 | |||
Outside the PRC | Credit Concentration Risk | |||||
CONCENTRATION OF RISKS | |||||
Cash and cash equivalents, restricted cash and short-term investments, held at major institutions | $ | $ 426,022 | $ 455,187 |
ACQUISITION OF SUBSIDIARIES - A
ACQUISITION OF SUBSIDIARIES - Acquisitions in 2023 (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | |||
Mar. 31, 2023 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
Asset acquisitions | ||||
Current assets | ¥ 9,823,478 | $ 1,383,608 | ¥ 7,052,276 | |
Property and equipment, net | 13,024,393 | 1,834,447 | 11,964,498 | |
Land use rights, net | 602,503 | 84,861 | 576,020 | |
Deferred tax assets | 247,644 | 34,880 | 196,098 | |
Accrued expenses and other payables | (2,783,102) | (391,992) | (2,410,479) | |
Deferred tax liabilities | ¥ (688,362) | $ (96,954) | ¥ (682,580) | |
Sanhe Mingtai Digital Industrial Park Co., Ltd. (Sanhe Digital) | ||||
Asset acquisitions | ||||
Current assets | ¥ 3 | |||
Property and equipment, net | 105,538 | |||
Land use rights, net | 14,258 | |||
Deferred tax assets | 2,232 | |||
Accrued expenses and other payables | (2,277) | |||
Deferred tax liabilities | (2,758) | |||
Total share consideration | ¥ 116,996 | |||
Asset Acquisition, Percentage Of Acquisition | 100% | |||
Asset Acquisition, Percentage Of Equity Interests Issued | 22.50% |
ACQUISITION OF SUBSIDIARIES -_2
ACQUISITION OF SUBSIDIARIES - Asset Acquisitions (Details) ¥ in Thousands, $ in Thousands | Aug. 01, 2022 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Net assets acquired: | |||||
Cash and cash equivalents | ¥ 2,243,537 | $ 315,996 | ¥ 2,661,321 | ¥ 1,372,481 | |
Property and equipment, net | 13,024,393 | 1,834,447 | 11,964,498 | ||
Intangible assets, net | 1,383,406 | 194,849 | 1,497,131 | ||
Land use rights, net | 602,503 | 84,861 | 576,020 | ||
Deferred tax liabilities | (688,362) | $ (96,954) | (682,580) | ||
Operating permits | |||||
Net assets acquired: | |||||
Intangible assets, net | 1,109,984 | 1,161,443 | |||
Purchased software | |||||
Net assets acquired: | |||||
Intangible assets, net | ¥ 75,630 | ¥ 68,122 | |||
BJ JiangHeCloud | |||||
Net assets acquired: | |||||
Cash and cash equivalents | ¥ 3,325 | ||||
Other Assets, Current | 3,959 | ||||
Property and equipment, net | 306,546 | ||||
Land use rights, net | 221,556 | ||||
Other current liabilities | (15,448) | ||||
Deferred tax liabilities | (209,989) | ||||
Total consideration in cash | 789,938 | ||||
BJ JiangHeCloud | Operating permits | |||||
Net assets acquired: | |||||
Intangible assets, net | ¥ 479,989 |
ACQUISITION OF SUBSIDIARIES (De
ACQUISITION OF SUBSIDIARIES (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||||
Aug. 05, 2022 | Aug. 01, 2022 | Dec. 31, 2022 | Dec. 31, 2023 | Jul. 15, 2021 | |
Net assets acquired: | |||||
Goodwill net | ¥ 1,364,191 | ||||
BJ TenxCloud | |||||
Business Acquisitions [Abstract] | |||||
Equity interests acquired (as a percent) | 100% | ||||
BJ JHC [Member] | |||||
Business Acquisitions [Abstract] | |||||
Equity interests acquired (as a percent) | 100% | ||||
Kunshan Kunhui Network Co., Ltd. ("KS Kunhui") | |||||
Business Acquisitions [Abstract] | |||||
Equity interests acquired (as a percent) | 100% | ||||
Net assets acquired: | |||||
Cash and cash equivalents | ¥ 9,014 | ||||
Property and equipment, net | 92,157 | ||||
Operating lease right-of-use assets, net | 199,255 | ||||
Deferred tax assets | 13,921 | ||||
Other current assets | 289,480 | ||||
Total assets acquired | 692,327 | ||||
Other current liabilities | (436,124) | ||||
Operating lease liabilities | (208,612) | ||||
Deferred tax liabilities | (22,125) | ||||
Total liabilities assumed | (666,861) | ||||
Net assets acquired | 25,466 | ||||
Purchase consideration | 50,000 | ||||
Goodwill net | 24,534 | ||||
Revenue of acquiree since the acquisition date included in the consolidated statement of operations | 0 | ||||
Net profit loss of acquiree since the acquisition date included in the consolidated statement of operations | ¥ 24,757 | ||||
Kunshan Kunhui Network Co., Ltd. ("KS Kunhui") | Operating permits | |||||
Net assets acquired: | |||||
Intangible assets | 29,000 | ||||
Kunshan Kunhui Network Co., Ltd. ("KS Kunhui") | Customer contract | |||||
Net assets acquired: | |||||
Intangible assets | ¥ 59,500 | ||||
BJ JiangHeCloud | |||||
Business Acquisitions [Abstract] | |||||
Equity interests acquired (as a percent) | 100% | ||||
Contingent Consideration, cash to be paid | ¥ 57,500 | ¥ 57,500 | |||
Net assets acquired: | |||||
Purchase consideration | ¥ 847,438 |
ACCOUNTS AND NOTES RECEIVABLE_3
ACCOUNTS AND NOTES RECEIVABLE, NET - Accounts and notes receivable and the allowance for doubtful debt (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) |
ACCOUNTS AND NOTES RECEIVABLE, NET | |||||
Accounts receivable | ¥ 1,903,458 | ¥ 1,897,111 | |||
Notes receivable | 873 | 1,151 | |||
Allowance for doubtful debt | (188,356) | (134,569) | ¥ (99,620) | ¥ (68,921) | |
Accounts and notes receivable, net | ¥ 1,715,975 | $ 241,690 | ¥ 1,763,693 |
ACCOUNTS AND NOTES RECEIVABLE_4
ACCOUNTS AND NOTES RECEIVABLE, NET - Accounts and notes receivable due (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
ACCOUNTS AND NOTES RECEIVABLE, NET | |||
Balance at beginning of the year | ¥ 134,569 | ¥ 99,620 | ¥ 68,921 |
Additional due to business combination | 16,256 | ||
Additional provision charged to expense | 54,512 | 34,949 | 14,990 |
Write-off of accounts receivable | (725) | (547) | |
Balance at end of the year | ¥ 188,356 | ¥ 134,569 | ¥ 99,620 |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - Dec. 31, 2023 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
SHORT-TERM INVESTMENTS. | ||
Aggregate cost basis | ¥ 354,149 | |
Gross unrealized holding gain | 2,671 | |
Aggregate fair value | ¥ 356,820 | $ 50,257 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | |||
Dec. 31, 2022 CNY (¥) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Prepaid expenses | ¥ 988,467 | ¥ 1,344,525 | ||
Tax recoverables | 620,901 | 907,629 | ||
Deposits | 59,653 | 33,941 | ||
Loan to third parties | 376,851 | 5,787 | ||
Staff advances | 2,992 | 2,518 | ||
Interest receivables | 544 | 532 | ||
Prepaid expenses and other current assets | 2,147,500 | 2,375,341 | $ 334,560 | |
Nonrelated Party [Member] | ||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Others | 98,092 | 80,409 | ||
Shareholders of KS Kunhui | ||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Loan to third parties | ¥ 279,500 | 194,500 | ||
Loans Receivable. Interest Rate | 7.50% | |||
Proceeds From Repayments Of Loans By Third Parties | ¥ 85,000 | |||
Minimum | ||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Debt Instrument, Term | 4 months | |||
Maximum | ||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Debt Instrument, Term | 6 months | |||
Another Third Party | ||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Loan to third parties | ¥ 93,400 | |||
Loan To Another Third Party | ||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||
Loans Receivable, Term | 18 months |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Analysis of the allowance for doubtful debt in relation to other receivables (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Analysis of the allowance for doubtful debt in relation to other receivables | ||
Balance at beginning of the year | ¥ 131,624 | ¥ 130,908 |
Addition | 313,993 | 15,460 |
Write-off | (15,000) | |
Foreign exchange difference | 52 | 256 |
Balance at the end of the year | ¥ 445,669 | ¥ 131,624 |
PROPERTY AND EQUIPMENT, NET - P
PROPERTY AND EQUIPMENT, NET - Property and equipment, held under capital leases (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | ¥ 17,171,494 | ¥ 14,866,510 | |
Less: Accumulated depreciation | (6,987,542) | (5,548,663) | |
Property plant and equipment net excluding construction in progress | 10,183,952 | 9,317,847 | |
Construction-in-progress | 3,444,237 | 2,770,348 | |
Impairment | (603,796) | (123,697) | |
Property and equipment, net | 13,024,393 | $ 1,834,447 | 11,964,498 |
Property | |||
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | 2,672,822 | 2,236,257 | |
Leasehold improvements | |||
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | 5,821,394 | 4,819,257 | |
Computer and network equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | 8,437,075 | 7,577,082 | |
Optical fibers | |||
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | 142,723 | 142,723 | |
Office equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | 93,543 | 87,093 | |
Motor vehicles | |||
PROPERTY AND EQUIPMENT, NET | |||
Property and equipment, gross | ¥ 3,937 | ¥ 4,098 |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | ¥ 1,663,932 | ¥ 1,462,550 | ¥ 1,164,725 |
Cost of revenues | |||
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | 1,573,970 | 1,386,800 | 1,107,655 |
Sales and marketing expenses | |||
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | 1,721 | 1,029 | 963 |
General and administrative expenses | |||
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | 38,280 | 35,715 | 23,186 |
Research and development expenses | |||
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | ¥ 49,961 | ¥ 39,006 | ¥ 32,921 |
PROPERTY AND EQUIPMENT, NET - C
PROPERTY AND EQUIPMENT, NET - Carrying amounts of property and equipment held under capital leases (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
Property and equipment held under finance leases, gross | ¥ 1,780,071 | ¥ 2,102,896 |
Less: Accumulated depreciation | (709,209) | (847,449) |
Property and equipment held under finance leases net excluding construction in progress | 1,070,862 | 1,255,447 |
Construction-in-progress | 219,283 | |
Impairment | (19,361) | (18,808) |
Property and equipment held under finance leases, net | ¥ 1,270,784 | ¥ 1,236,639 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Property | ||
Lessee, Lease, Description [Line Items] | ||
Property and equipment held under finance leases, gross | ¥ 993,158 | ¥ 993,158 |
Computer and network equipment | ||
Lessee, Lease, Description [Line Items] | ||
Property and equipment held under finance leases, gross | 648,989 | 971,814 |
Optical fibers | ||
Lessee, Lease, Description [Line Items] | ||
Property and equipment held under finance leases, gross | ¥ 137,924 | ¥ 137,924 |
PROPERTY AND EQUIPMENT, NET -_2
PROPERTY AND EQUIPMENT, NET - Property and equipment pledged to secure banking borrowings (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
PROPERTY AND EQUIPMENT, NET | |||
Assets | ¥ 30,385,903 | $ 4,279,765 | ¥ 26,948,405 |
Property | |||
PROPERTY AND EQUIPMENT, NET | |||
Assets | 155,239 | 118,050 | |
Leasehold improvements | |||
PROPERTY AND EQUIPMENT, NET | |||
Assets | 246,662 | 92,629 | |
Computer and network equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Assets | 442,167 | 137,876 | |
Office equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Assets | ¥ 1,829 | ¥ 919 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | ¥ 1,663,932 | ¥ 1,462,550 | ¥ 1,164,725 |
Property, computer and network equipment and optical fiber | |||
PROPERTY AND EQUIPMENT, NET | |||
Depreciation expense | ¥ 199,926 | ¥ 224,140 | ¥ 274,052 |
INTANGIBLE ASSETS, NET - Intang
INTANGIBLE ASSETS, NET - Intangible assets (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | ¥ 2,308,232 | ¥ 2,282,473 | |
Accumulated Amortization | (867,754) | (744,083) | |
Impairment | (57,072) | (41,259) | |
Impairment | ¥ (15,113) | ||
Impairment Of Intangible Asset Finite Lived Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag | false | ||
Intangible Assets, net | ¥ 1,383,406 | $ 194,849 | 1,497,131 |
Purchased software | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 233,513 | 207,565 | |
Accumulated Amortization | (157,081) | (139,443) | |
Impairment | (802) | ||
Intangible Assets, net | 75,630 | 68,122 | |
Radio Spectrum License | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 136,825 | 134,543 | |
Accumulated Amortization | (87,145) | (83,294) | |
Impairment | (41,959) | (41,259) | |
Intangible Assets, net | 7,721 | 9,990 | |
Operating Permits | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 1,199,210 | 1,217,876 | |
Accumulated Amortization | (89,226) | (56,433) | |
Intangible Assets, net | 1,109,984 | 1,161,443 | |
Technology Platform | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 38,050 | 38,050 | |
Accumulated Amortization | (23,739) | (18,258) | |
Impairment | (14,311) | ||
Intangible Assets, net | 19,792 | ||
Customer relationships | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 257,183 | 257,183 | |
Accumulated Amortization | (256,888) | (235,810) | |
Intangible Assets, net | 295 | 21,373 | |
Licenses | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 5,772 | 5,772 | |
Accumulated Amortization | (3,812) | (3,428) | |
Intangible Assets, net | 1,960 | 2,344 | |
Supplier relationships | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 39,053 | 39,053 | |
Accumulated Amortization | (37,299) | (34,281) | |
Intangible Assets, net | 1,754 | 4,772 | |
Trade names | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 116,266 | 116,266 | |
Accumulated Amortization | (54,742) | (48,929) | |
Intangible Assets, net | 61,524 | 67,337 | |
Customer contract. | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 190,141 | 190,141 | |
Accumulated Amortization | (89,002) | (68,622) | |
Intangible Assets, net | 101,139 | 121,519 | |
Non - Complete Agreement | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 1,800 | 1,800 | |
Accumulated Amortization | (1,800) | (1,800) | |
Internal-use software | |||
Weighted average useful lives of intangible assets | |||
Intangible assets, cost | 90,419 | 74,224 | |
Accumulated Amortization | (67,020) | (53,785) | |
Intangible Assets, net | ¥ 23,399 | ¥ 20,439 |
INTANGIBLE ASSETS, NET - Additi
INTANGIBLE ASSETS, NET - Additional Information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average useful lives of intangible assets | |||
Intangible assets, amortization expenses | ¥ 128,042 | ¥ 122,470 | ¥ 94,751 |
Minimum | |||
Weighted average useful lives of intangible assets | |||
Estimated useful life of intangible assets | 1 year | ||
Maximum | |||
Weighted average useful lives of intangible assets | |||
Estimated useful life of intangible assets | 48 years |
INTANGIBLE ASSETS, NET - Amorti
INTANGIBLE ASSETS, NET - Amortization expenses (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
INTANGIBLE ASSETS, NET | |
2024 | ¥ 294,541 |
2025 | 153,513 |
2026 | 27,877 |
2027 | 17,591 |
2028 | 11,325 |
Annual estimated amortization expenses for intangible assets | ¥ 504,847 |
LAND USE RIGHTS, NET - Land use
LAND USE RIGHTS, NET - Land use rights amortized (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
LAND USE RIGHTS, NET. | |||
Cost | ¥ 664,272 | ¥ 617,808 | |
Accumulated amortization | (61,769) | (41,788) | |
Land use rights, net | ¥ 602,503 | $ 84,861 | ¥ 576,020 |
LAND USE RIGHTS, NET - Land u_2
LAND USE RIGHTS, NET - Land use rights pledged (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
LAND USE RIGHTS, NET. | ||
Land use rights | ¥ 196,195 | ¥ 115,895 |
GOODWILL - Carrying amount (Det
GOODWILL - Carrying amount (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
GOODWILL. | |||
Good will beginning balance | ¥ 1,364,191 | ¥ 1,339,657 | |
Accumulated impairment losses | (1,364,191) | ||
Goodwill net | 1,364,191 | ||
Goodwill acquired | 24,534 | ||
Impairment of goodwill | (1,364,191) | $ (192,142) | 0 |
Goodwill Ending balance | ¥ 1,364,191 | ¥ 1,364,191 |
GOODWILL - Additional Informati
GOODWILL - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Changes in the carrying amount of goodwill | ||||
Impairment losses of goodwill | ¥ 1,364,191 | $ 192,142 | ¥ 0 | |
Hosting and Related Services | ||||
Changes in the carrying amount of goodwill | ||||
Impairment losses of goodwill | ¥ 1,364,191 | ¥ 0 | ¥ 0 |
LONG-TERM INVESTMENTS, NET - Lo
LONG-TERM INVESTMENTS, NET - Long term investments (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
LONG-TERM INVESTMENTS, NET | |||
Equity investments without readily determinable fair values | ¥ 19,821 | ¥ 17,137 | |
Equity method investments | 738,128 | 223,457 | |
Available-for-sale debt investments | 1,600 | ||
Long term investments | ¥ 757,949 | $ 106,755 | ¥ 242,194 |
LONG-TERM INVESTMENTS, NET - Eq
LONG-TERM INVESTMENTS, NET - Equity Method Investments (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | |
LONG TERM INVESTMENT, NET | ||||
Cost of investments | ¥ 750,129 | ¥ 258,737 | ¥ 145,837 | |
Share equity gain (loss) | (8,506) | (31,785) | (62,836) | |
Impairment of receivables from equity investees | 3,495 | (3,495) | ||
Investment in an equity investee | 738,128 | 223,457 | $ 223,457 | 79,506 |
Cost of investments incurred during the period | 491,392 | 213,900 | ||
Share equity gain (loss) incurred during the period | (3,279) | 1,925 | ||
Distribution/derecognize of share equity (gain)loss | 20,000 | (71,874) | (3,495) | |
WiFire Group Inc. ("WiFire Group") | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 20,000 | |||
Share equity gain (loss) | (20,000) | |||
Cost of investments incurred during the period | (20,000) | |||
Distribution/derecognize of share equity (gain)loss | 20,000 | |||
Yizhuang Venture Investment Fund | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 101,000 | |||
Share equity gain (loss) | (32,285) | |||
Investment in an equity investee | 68,715 | |||
Share equity gain (loss) incurred during the period | 3,159 | |||
Distribution/derecognize of share equity (gain)loss | (71,874) | |||
WiFire Group Inc. ("WiFire Group") | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 20,000 | 20,000 | ||
Share equity gain (loss) | (20,000) | (20,000) | ||
Chengdu Qidi Chengxin Education Limit ("Qidi Chengxin") | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 3,930 | 3,930 | ||
Share equity gain (loss) | (333) | (217) | ||
Investment in an equity investee | 3,597 | 3,713 | ||
Share equity gain (loss) incurred during the period | (116) | |||
Qidi Chengxin | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 3,930 | 3,930 | ||
Share equity gain (loss) | (452) | (333) | ||
Investment in an equity investee | 3,478 | 3,597 | ||
Share equity gain (loss) incurred during the period | 119 | |||
Jingliang Inter Cloud | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 6,000 | 6,000 | 6,000 | |
Share equity gain (loss) | (5,019) | (5,017) | (5,013) | |
Investment in an equity investee | 981 | 983 | 987 | |
Share equity gain (loss) incurred during the period | 2 | (4) | ||
Jingliang Century Cloud | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 4,000 | 4,000 | 4,000 | |
Investment in an equity investee | 4,000 | 4,000 | 4,000 | |
ZJK Energies | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 5,907 | 5,907 | 5,907 | |
Share equity gain (loss) | (3,845) | (3,800) | (3,816) | |
Investment in an equity investee | 2,062 | 2,107 | 2,091 | |
Share equity gain (loss) incurred during the period | 45 | 16 | ||
Dexin Tonglian (Beijing) Culture Technology Co., Ltd [Member] | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 3,000 | 3,000 | ||
Share equity gain (loss) | (808) | (333) | ||
Investment in an equity investee | 2,192 | 2,667 | ||
Cost of investments incurred during the period | 3,000 | |||
Share equity gain (loss) incurred during the period | 475 | (333) | ||
SH Edge Interchange | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 900 | 900 | ||
Share equity gain (loss) | (900) | (797) | ||
Investment in an equity investee | 103 | |||
Cost of investments incurred during the period | 900 | |||
Share equity gain (loss) incurred during the period | 103 | (797) | ||
Changzhou Gaoxin Internet Co., Ltd | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 698,392 | 210,000 | ||
Share equity gain (loss) | 5,107 | |||
Investment in an equity investee | 703,499 | 210,000 | ||
Cost of investments incurred during the period | 488,392 | 210,000 | ||
Share equity gain (loss) incurred during the period | (5,107) | |||
Zhuhai Private | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 23,000 | |||
Share equity gain (loss) | (1,084) | |||
Investment in an equity investee | 21,916 | |||
Cost of investments incurred during the period | 23,000 | |||
Share equity gain (loss) incurred during the period | 1,084 | |||
BJ Chaohulian | ||||
LONG TERM INVESTMENT, NET | ||||
Cost of investments | 5,000 | 5,000 | 5,000 | |
Share equity gain (loss) | (1,505) | (1,505) | (1,505) | |
Impairment of receivables from equity investees | ¥ 3,495 | ¥ (3,495) | ||
Distribution/derecognize of share equity (gain)loss | ¥ (3,495) |
LONG-TERM INVESTMENTS, NET - Ad
LONG-TERM INVESTMENTS, NET - Additional Information (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||||||||||
Feb. 28, 2023 CNY (¥) | Nov. 30, 2022 CNY (¥) | Sep. 30, 2022 CNY (¥) | Jan. 31, 2021 CNY (¥) | Dec. 31, 2019 CNY (¥) | Jan. 31, 2018 CNY (¥) | Sep. 30, 2017 | Apr. 30, 2012 CNY (¥) | Nov. 30, 2023 CNY (¥) | May 31, 2023 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 | |
LONG TERM INVESTMENT, NET | |||||||||||||||
Impairment of equity method investments | ¥ 3,495 | ||||||||||||||
Distribution received | ¥ 15,232 | ||||||||||||||
Increase (Decrease) in Cost of Investments in Equity Method Investments | ¥ 491,392 | 213,900 | |||||||||||||
Equity method investment loss | 3,279 | $ 462 | 1,925 | (38,666) | |||||||||||
Equity method investment | 738,128 | 223,457 | |||||||||||||
Estimated recoverable amount of investments derecognized recorded in other current assets | 56,642 | ||||||||||||||
WiFire Group Inc. ("WiFire Group") | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Increase (Decrease) in Cost of Investments in Equity Method Investments | (20,000) | ||||||||||||||
Changzhou Gaoxin Internet Co., Ltd | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Capital injected | ¥ 23,000 | ||||||||||||||
Equity Investments Without Readily Determinable Fair Value | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Impairment of equity investments without readily determinable fair values | 9,327 | 0 | 0 | ||||||||||||
Dividend income of non-marketable investments | 3,270 | 391 | ¥ 659 | ||||||||||||
Yizhuang Venture Investment Fund | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 27.694% | 27.694% | |||||||||||||
Distribution received | 15,232 | 15,232 | |||||||||||||
Capital injected | ¥ 101,000 | ||||||||||||||
WiFire Group Inc. ("WiFire Group") | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 33.33% | 33.33% | |||||||||||||
Total cash consideration on disposal of equity interests | ¥ 0 | ||||||||||||||
Percentage of ownership disposed | 66.67% | ||||||||||||||
Equity method investment | 0 | ||||||||||||||
Chengdu Qidi Chengxin Education Limit ("Qidi Chengxin") | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 59% | ||||||||||||||
Capital injected | ¥ 3,930 | ||||||||||||||
Jingliang Inter Cloud | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 60% | ||||||||||||||
Capital injected | ¥ 6,000 | ||||||||||||||
Jingliang Century Cloud | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 40% | ||||||||||||||
Capital injected | ¥ 4,000 | ||||||||||||||
Beijing Super Internet Technology Research Institute Co., Ltd. ("BJ Chaohulian") | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 30% | ||||||||||||||
Capital injected | ¥ 5,000 | ||||||||||||||
Equity method investment loss | ¥ 1,505 | ||||||||||||||
Equity method investment | ¥ 0 | ||||||||||||||
Changzhou Gaoxin Internet Co., Ltd | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 35% | ||||||||||||||
Capital injected | ¥ 210,000 | ¥ 488,392 | |||||||||||||
Increase (Decrease) in Cost of Investments in Equity Method Investments | 488,392 | 210,000 | |||||||||||||
Dexin Tonglian (Beijing) Culture Technology Co., Ltd [Member] | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 30% | ||||||||||||||
Capital injected | ¥ 3,000 | ||||||||||||||
Increase (Decrease) in Cost of Investments in Equity Method Investments | ¥ 3,000 | ||||||||||||||
Zhuhai Private | |||||||||||||||
LONG TERM INVESTMENT, NET | |||||||||||||||
Equity interest, percentage | 40% | 35% | |||||||||||||
Increase (Decrease) in Cost of Investments in Equity Method Investments | ¥ 23,000 |
OTHER NON-CURRENT ASSETS (Detai
OTHER NON-CURRENT ASSETS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS | ||
Prepayment of other non-current assets included acquisition and purchase of property and equipment | ¥ 293,500 | ¥ 293,500 |
Percentage of prepayments on other non-current assets | 55% | 53% |
BORROWINGS - Borrowings (Detail
BORROWINGS - Borrowings (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
BORROWINGS | |||
Short term bank borrowings | ¥ 30,000 | $ 4,225 | |
Current portion of long-term borrowings of the Consolidated VIEs without recourse to the primary beneficiaries | 334,511 | ¥ 289,941 | |
Other long-term borrowings, current portion | 388,814 | 194,079 | |
Borrowings, current portion, Total | 753,325 | 484,020 | |
Long-term bank borrowings, non-current portion | 4,170,981 | 2,694,249 | |
Other long-term borrowings, non-current portion | 942,540 | 355,607 | |
Total borrowings | ¥ 5,866,846 | ¥ 3,533,876 |
BORROWINGS - Unused loan facili
BORROWINGS - Unused loan facilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument | ||
Long-term borrowings (including current portion) | ¥ 5,836,846 | ¥ 3,533,876 |
Unsecured Borrowing | ||
Debt Instrument | ||
Short-term borrowings | 30,000 | |
Long-term borrowings (including current portion) | 554,834 | 450,008 |
Secured by subsidiary's property and equipment and land-use right | Long Term Bank Borrowings | ||
Debt Instrument | ||
Long-term borrowings (including current portion) | 156,077 | |
Secured by subsidiary's property and equipment and land-use right and a subsidiary stock | Long Term Bank Borrowings | ||
Debt Instrument | ||
Long-term borrowings (including current portion) | 3,101,522 | 247,171 |
Secured by subsidiary's property and equipment and land-use right and a subsidiary stock | Long-term bank borrowings, (including current portion) 2 | ||
Debt Instrument | ||
Long-term borrowings (including current portion) | 800,989 | |
Secured by a subsidiary's stock | Long Term Bank Borrowings | ||
Debt Instrument | ||
Long-term borrowings (including current portion) | ¥ 2,180,490 | ¥ 1,879,631 |
BORROWINGS - Unused loan faci_2
BORROWINGS - Unused loan facilities (Parenthetical) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Debt Instrument | |||
Assets | ¥ 30,385,903 | $ 4,279,765 | ¥ 26,948,405 |
Long-term bank borrowings, (including current portion) 1 | Secured by a subsidiary's property and equipment | Asset Pledged as Collateral | |||
Debt Instrument | |||
Assets | 845,898 | 118,050 | |
Long-term bank borrowings, (including current portion) 1 | Secured by subsidiary's property and equipment and land-use right and a subsidiary stock | Asset Pledged as Collateral | |||
Debt Instrument | |||
Assets | 196,195 | 91,435 | |
Long Term Bank Borrowings | Secured by a subsidiary's land-use right | Asset Pledged as Collateral | |||
Debt Instrument | |||
Assets | ¥ 24,460 | ||
Long-term bank borrowings, (including current portion) 2 | Secured by a subsidiary's property and equipment | Asset Pledged as Collateral | |||
Debt Instrument | |||
Assets | ¥ 231,424 |
BORROWINGS - Bank and Oher Borr
BORROWINGS - Bank and Oher Borrowings (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
BORROWINGS | |
2024 | ¥ 799,314 |
2025 | 816,677 |
2026 | 751,209 |
2027 | 683,110 |
2028 | 689,511 |
2029 and thereafter | ¥ 2,273,233 |
BORROWINGS - Additional Informa
BORROWINGS - Additional Information (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Short and long term bank borrowings | ||
Short-term bank borrowings, weighted average interest rate | 3.65% | |
Unused loan facilities (in RMB) or (in dollars) | ¥ 2,811,123 | ¥ 3,164,371 |
Long Term Bank Borrowings | ||
Short and long term bank borrowings | ||
Long-term bank borrowings, weighted average interest rate | 4.97% | 5.11% |
ACCRUED EXPENSES AND OTHER PA_3
ACCRUED EXPENSES AND OTHER PAYABLES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Jul. 15, 2021 |
Business Acquisition [Line Items] | ||||
Payables for purchase of property, equipment and software | ¥ 1,431,547 | ¥ 1,280,742 | ||
Payroll and welfare payables | 477,367 | 433,376 | ||
Consideration due to the original shareholders of BJ TenxCloud | 229,323 | 229,323 | ||
Liability classified share-based payments | 149,612 | 131,116 | ||
Accrued service fees | 126,001 | 66,494 | ||
Payables for office supplies and utilities | 105,871 | 69,288 | ||
Payables for acquisitions and long-term investments | 99,340 | 47,805 | ||
Value-added tax and other taxes payable | 35,391 | 31,706 | ||
Interest payables | 77,168 | 35,785 | ||
Others | 51,482 | 84,844 | ||
Accrued expenses and other payables | ¥ 2,783,102 | $ 391,992 | ¥ 2,410,479 | |
Beijing TenxCloud Technology Co., Ltd. ("BJ TenxCloud") | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity interests acquired | 100% |
LEASES - Weighted average remai
LEASES - Weighted average remaining lease term and discount rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted average remaining lease term: | ||
Operating lease | 9 years 8 months 12 days | 10 years 8 months 12 days |
Finance lease | 18 years 8 months 12 days | 18 years 10 months 24 days |
Weighted average discount rate: | ||
Operating lease | 7.59% | 7.50% |
Finance lease | 10.04% | 10.44% |
LEASES - Total lease cost (Deta
LEASES - Total lease cost (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finance lease cost: | |||
Depreciation | ¥ 199,926 | ¥ 224,140 | ¥ 274,052 |
Interest expenses | 90,679 | 104,088 | 124,567 |
Operating lease cost | 749,800 | 691,197 | 568,044 |
Total lease cost | ¥ 1,040,405 | ¥ 1,019,425 | ¥ 966,663 |
LEASES - Other information rela
LEASES - Other information related to leases (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash payments for operating leases | ¥ 796,541 | ¥ 635,615 | ¥ 593,615 |
Financing cash payments for finance leases | ¥ 210,902 | ¥ 231,046 | ¥ 579,660 |
LEASES - Future lease payments
LEASES - Future lease payments under operating leases and finance leases (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
Future lease payments under finance leases | |
2024 | ¥ 180,355 |
2025 | 173,799 |
2026 | 165,015 |
2027 | 158,978 |
2028 | 156,920 |
2029 and thereafter | 1,705,594 |
Total future lease payments | 2,540,661 |
Less: Imputed interest | (1,265,329) |
Present value of future lease payments* | 1,275,332 |
Future lease payments under operating leases | |
2023 | 807,678 |
2024 | 739,747 |
2025 | 680,034 |
2026 | 545,468 |
2027 | 528,173 |
2028 and thereafter | 2,630,069 |
Total future lease payments | 5,931,169 |
Less: Imputed interest | (1,880,246) |
Present value of future lease payments | ¥ 4,050,923 |
LEASES - Additional information
LEASES - Additional information (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Current portion of operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries | ¥ 780,164 | $ 109,884 | ¥ 674,288 |
Non-current portion of operating lease liabilities of the Consolidated VIEs without resource to the primary beneficiaries | 3,270,759 | 460,677 | 2,905,283 |
Current portion of finance lease liabilities | 115,806 | 16,311 | 206,260 |
Non-current portion of finance lease liabilities | ¥ 1,159,525 | $ 163,316 | ¥ 1,047,640 |
BONDS PAYABLE - Additional Info
BONDS PAYABLE - Additional Information (Details) - Bonds 7.875%, Due 2021 ¥ in Thousands, $ in Thousands | Oct. 04, 2021 USD ($) | Apr. 15, 2019 CNY (¥) | Apr. 15, 2019 USD ($) |
Debt Instrument | |||
Debt instrument, face amount | $ 300,000 | ||
Interest rate (as a percent) | 7.875% | ||
Proceeds from issuance of bonds, net | ¥ | ¥ 1,976,474 | ||
Principal amount repaid | $ 300,000 | ||
Bonds Payable Repaid | $ 300,000 |
PERPETUAL CONVERTIBLE PREFERR_2
PERPETUAL CONVERTIBLE PREFERRED SHARES - Additional Information (Details) $ / shares in Units, ¥ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 01, 2021 USD ($) $ / shares shares | Jun. 30, 2020 USD ($) $ / shares shares | Dec. 31, 2023 CNY (¥) $ / shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2021 shares | |
Class A Ordinary Shares | |||||
Class of Stock [Line Items] | |||||
Number of shares issued | shares | 150,000 | 16,680,000 | |||
Subscription price (in dollars per share) | $ 1,000 | ||||
Dividend rate (as a percent) | 4.50% | ||||
Period after which Series A Preferred Shares will be mandatorily converted into Class A ordinary shares | 6 months | ||||
Conversion price per share | $ 2.8333 | ||||
Beneficial conversion feature | ¥ | ¥ 470,643 | ||||
Convertible shares | $ | $ 150,000 | ||||
Preferred stock, convertible, conversion price | $ 17 | ||||
Total issuance for converted preferred stock | shares | 54,507,816 | ||||
American Depository Shares | |||||
Class of Stock [Line Items] | |||||
Total cash consideration | $ | $ 150,000,000 | ||||
Cumulative dividends | ¥ | $ 28,637 | ¥ 28,637 | |||
Conversion Threshold (as percent) | 200% | ||||
Conversion price per share | $ 17 |
CONVERTIBLE PROMISSORY NOTES (D
CONVERTIBLE PROMISSORY NOTES (Details) $ / shares in Units, ¥ in Thousands | 1 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||||
Jan. 28, 2022 USD ($) | Feb. 29, 2024 USD ($) | Jun. 30, 2021 D USD ($) $ / shares | Jan. 31, 2021 USD ($) | Jun. 30, 2023 | Dec. 31, 2023 CNY (¥) D shares | Dec. 31, 2023 USD ($) D shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2020 CNY (¥) shares | Dec. 31, 2020 USD ($) shares | Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 $ / shares | Oct. 31, 2019 $ / shares | |
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Changes In The Fair Value Of Convertible Promissory Notes | ¥ 165,930 | $ 23,371,000 | ¥ (22,626) | ¥ (829,149) | ||||||||||
Changes in the fair value of financial liabilities | ¥ 165,930 | 23,371,000 | (22,626) | (829,149) | ||||||||||
Remaining amortization period for debt issuance cost | 5 years | 5 years | ||||||||||||
Derivative liability | ¥ 188,706 | $ 26,579,000 | ||||||||||||
Convertible Notes Payable | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Issuance costs | ¥ | ¥ 18,932 | |||||||||||||
2025 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Cash consideration received | $ 200,000,000 | |||||||||||||
Changes In The Fair Value Of Convertible Promissory Notes | 21,816,000 | 22,626 | 829,149 | |||||||||||
Debt Instrument, Term | 5 years | 5 years | ||||||||||||
Interest rate (as a percent) | 2% | 2% | 2% | |||||||||||
Period of receipt of notices | 3 months | |||||||||||||
Repaid principal amount | 68,000,000 | |||||||||||||
Redemption price, Percentage of principal amount redeemed | 109% | |||||||||||||
Issuance costs | ¥ | 0 | ¥ 2,939 | ||||||||||||
Fair value of converted portion | ¥ | 1,639,806 | ¥ 720,547 | ||||||||||||
Fair value of notes | ¥ | 537,778 | |||||||||||||
Changes in the fair value of financial liabilities | $ 21,816,000 | 22,626 | 829,149 | |||||||||||
Coupon Interest expense | ¥ | ¥ 4,471 | 9,147 | 9,703 | |||||||||||
2026 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Interest rate (as a percent) | 0% | |||||||||||||
Repaid principal amount | $ 600,000,000 | |||||||||||||
Amount on exercise of option | $ 75,000,000 | |||||||||||||
Observation period | 40 days | |||||||||||||
Redemption price, percentage of Principal amount | 100% | 100% | ||||||||||||
Proceeds from issuance of notes | $ 600,000,000 | |||||||||||||
Debt Issuance costs | $ 13,841,000 | |||||||||||||
Carrying amount of debt instrument | ¥ | ¥ 4,208,495 | 4,119,048 | ||||||||||||
Coupon Interest expense | ¥ | 0 | 0 | 0 | |||||||||||
Amortization of debt discount and issuance costs | ¥ | ¥ 19,499 | ¥ 18,525 | ¥ 16,216 | |||||||||||
Effective interest rate (as a percent) | 0.47% | 0.47% | 0.47% | 0.47% | ||||||||||
Debt instrument, face amount | $ 600,000,000 | |||||||||||||
2027 Convertible Promissory Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Interest rate (as a percent) | 2% | 10% | 10% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.8333 | |||||||||||||
Redemption price, percentage of Principal amount | 50% | |||||||||||||
Proceeds from issuance of notes | $ 250,000,000 | |||||||||||||
Debt Issuance costs | $ 162,000 | |||||||||||||
Carrying amount of debt instrument | ¥ | ¥ 1,769,946 | ¥ 1,740,211 | ||||||||||||
Repayment of convertible notes | $ 1,000,000 | |||||||||||||
Effective interest rate (as a percent) | 2.02% | 2.02% | 2.02% | |||||||||||
Debt instrument, face amount | $ 250,000,000 | |||||||||||||
Debt Instrument, Convertible, Remaining Deferred Finance Costs, Amortization Period | 5 years | 5 years | ||||||||||||
Coupon interest expense | ¥ | ¥ 35,234 | ¥ 30,498 | ||||||||||||
Derivative liability | ¥ | ¥ 188,706 | |||||||||||||
Redemption upon maturity | 2025 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Redemption price, Percentage of principal amount redeemed | 115% | 115% | ||||||||||||
Early redemption at the option of the Purchasers | 2025 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Redemption price, percentage of Principal amount | 109% | 109% | ||||||||||||
Condition one | 2026 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Percentage of conversion price | 130% | 130% | 130% | |||||||||||
Trading days | D | 20 | 20 | 20 | |||||||||||
Consecutive trading days period | D | 30 | 30 | 30 | |||||||||||
Condition Two | 2026 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Trading days | D | 5 | |||||||||||||
Consecutive trading days period | D | 10 | |||||||||||||
Percentage of price to the last reported sale price | 98% | |||||||||||||
American Depository Shares | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 12 | $ 54.47 | ||||||||||||
Conversion Threshold (as percent) | 200% | 200% | ||||||||||||
American Depository Shares | 2025 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Conversion price (in dollars per share) | $ / shares | 12 | |||||||||||||
American Depository Shares | 2026 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Conversion price (in dollars per share) | $ / shares | 18.3574 | |||||||||||||
American Depository Shares | 2027 Convertible Promissory Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Conversion price (in dollars per share) | $ / shares | 11 | |||||||||||||
Conversion Threshold (as percent) | 200% | 200% | ||||||||||||
Common Class A | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Number of shares issued upon conversion | shares | 42,401,010 | |||||||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||||||
Common Class A | 2025 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Number of shares issued upon conversion | shares | 0 | 0 | 0 | 42,401,010 | 23,710,140 | 23,710,140 | ||||||||
Common Class A | Condition one | 2026 Convertible Notes | ||||||||||||||
CONVERTIBLE PROMISSORY NOTES | ||||||||||||||
Number of shares represents one ADS | 6 | |||||||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 |
DEFERRED GOVERNMENT GRANTS - Mo
DEFERRED GOVERNMENT GRANTS - Movements of Deferred Grants (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
DEFERRED GOVERNMENT GRANTS. | |||
Balance at beginning of the year | ¥ 6,318 | ¥ 4,368 | ¥ 6,174 |
Additions | 155,333 | 5,000 | |
Recognized as a reduction of depreciation expense | (8,477) | (3,050) | (1,806) |
Balance at end of the year | ¥ 153,174 | ¥ 6,318 | ¥ 4,368 |
DEFERRED GOVERNMENT GRANTS - Ad
DEFERRED GOVERNMENT GRANTS - Additional Information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
DEFERRED GOVERNMENT GRANTS. | |||
Government grants received | ¥ 155,333 | ¥ 5,000 | ¥ 0 |
EMPLOYEE CONTRIBUTION PLAN (Det
EMPLOYEE CONTRIBUTION PLAN (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
EMPLOYEE CONTRIBUTION PLAN | |||
Total expense for defined contribution plan | ¥ 208,556 | ¥ 191,914 | ¥ 158,673 |
SHARE-BASED COMPENSATION - Empl
SHARE-BASED COMPENSATION - Employee share options activity (Details) - 2010 Plan [Member] $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 $ / shares shares | |
Number of options | |||
Outstanding, beginning balance | shares | 359,202 | 359,202 | |
Outstanding, ending balance | shares | 359,202 | 359,202 | 359,202 |
Vested as of December 31, 2023 | shares | 359,202 | ||
Exercisable as of December 31, 2023 | shares | 359,202 | ||
Weighted average exercise price | |||
Outstanding, beginning balance | $ / shares | $ 0.17 | ||
Outstanding, ending balance | $ / shares | 0.17 | $ 0.17 | |
Vested as of December 31, 2023 | $ / shares | 0.17 | ||
Exercisable as of December 31, 2023 | $ / shares | $ 0.17 | ||
Weighted average remaining contractual term | |||
Outstanding, beginning balance | 1 year | 1 year | 1 year 11 months 15 days |
Vested as of December 31, 2023 | 1 year | 1 year | |
Exercisable as of December 31, 2023 | 1 year | 1 year | |
Aggregate intrinsic value | |||
Aggregate intrinsic value, exercisable | $ | $ 114 | ||
Aggregate intrinsic value, vested | $ | 114 | ||
Aggregate intrinsic value, ending balance | $ 114 | ¥ 809 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted stock units activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of RSUs | ||
Granted | 1,368,227 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Nonvested | $ 0 | |
2010 Plan | ||
Number of RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.17 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 359,202 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 114 | |
Restricted Stock Units (RSUs) | ||
Number of RSUs | ||
Unvested, beginning balance | 1,700,864 | |
Granted | 1,388,777 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.96 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 5.04 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 13.26 | |
Forfeited | (2,553) | |
Unvested, ending balance | 2,579,806 | 1,700,864 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Nonvested | $ 7,404 | |
Vested | (507,282) | |
Weighted-average grant date fair value | ||
Unvested, beginning balance (in dollars per share) | $ 11.28 | |
Unvested, ending balance (in dollars per share) | $ 8.07 | $ 11.28 |
Weighted-average remaining contractual terms (Years) | ||
Weighted average remaining contractual life | 6 years 7 months 6 days | 6 years 1 month 6 days |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share compensation expense (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
SHARE-BASED COMPENSATION | ||||
Share-based compensation expense | ¥ 35,296 | $ 4,971 | ¥ 118,170 | ¥ 320,010 |
Cost of revenues | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation expense | 563 | 13,713 | ||
Sales and marketing expenses | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation expense | 3,141 | 17,794 | 2,545 | |
General and administrative expenses | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation expense | 28,883 | 85,508 | 292,947 | |
Research and development expenses | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation expense | ¥ 3,272 | ¥ 14,305 | ¥ 10,805 |
SHARE BASED COMPENSATION - Addi
SHARE BASED COMPENSATION - Additional Information (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||||||
Jul. 15, 2021 | Oct. 30, 2015 shares | Jul. 16, 2010 shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) shares | May 13, 2020 shares | May 29, 2014 shares | |
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, RSUs granted | 1,368,227 | 1,368,227 | ||||||||||
Share based compensation, fair value of shares exercised during the period | $ | $ 0 | $ 4 | $ 122 | |||||||||
Aggregate intrinsic value of options exercise | $ | $ 0 | $ 2 | $ 67 | |||||||||
Unrecognized share-based compensation cost | ¥ | ¥ 0 | |||||||||||
Compensation cost | ¥ | 18,496 | ¥ 75,960 | ¥ 55,156 | |||||||||
Compensation cost | ¥ | ¥ 149,612 | ¥ 131,116 | ||||||||||
BJ TenxCloud | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Percentage of equity interests acquired | 100% | |||||||||||
Performance Based Awards | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, RSUs granted | 20,550 | 20,550 | 866,716 | 866,716 | 3,534,767 | 3,534,767 | ||||||
Performance Based Awards | Option One | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Performance review period | 1 year | 1 year | ||||||||||
Performance Based Awards | Option Two | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Performance review period | 4 years | 4 years | ||||||||||
Restricted Stock Units (RSUs) | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, RSUs granted | 1,388,777 | 1,388,777 | ||||||||||
Aggregate fair value, unvested | ¥ 52,568 | $ 7,404 | ||||||||||
Weighted-average grant-date fair value | $ / shares | $ 2.96 | $ 5.48 | $ 12.31 | |||||||||
Total fair value vested | $ | $ 2,557 | $ 6,883 | $ 42,672 | |||||||||
Unrecognized share-based compensation cost | ¥ 34,916 | $ 4,918 | ||||||||||
Unrecognized compensation costs, weighted-average recognition period | 1 year 1 month 6 days | 1 year 1 month 6 days | ||||||||||
Minimum Performance Target | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, RSUs granted | 0 | 0 | 22,000 | 22,000 | 298,454 | 298,454 | ||||||
Maximum | BJ TenxCloud | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Requisite service period | 36 months | |||||||||||
Maximum | Restricted Stock Units (RSUs) | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, option vesting period | 4 years | 4 years | ||||||||||
Minimum | BJ TenxCloud | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Requisite service period | 12 months | |||||||||||
Minimum | Restricted Stock Units (RSUs) | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, option vesting period | 2 years | 2 years | ||||||||||
2014 Plan | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, option expiry period | 10 years | |||||||||||
2014 Plan | Maximum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, maximum aggregate number of ordinary shares to be issued | 39,606,817 | 20,461,380 | ||||||||||
Share based compensation, option vesting period | 4 years | |||||||||||
Share based compensation arrangement by share based payment award maximum annual plan percentage increase to number of shares available for grant | 15% | |||||||||||
2014 Plan | Minimum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, option vesting period | 3 years | |||||||||||
2010 Plan | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, option expiry period | 10 years | |||||||||||
Share based compensation, option outstanding | 359,202 | 359,202 | 359,202 | |||||||||
Share based compensation, aggregate intrinsic value | ¥ 809 | $ 114 | ||||||||||
Share based compensation, fair value of option outstanding at grant date | ¥ | ¥ 5,211 | |||||||||||
2010 Plan | Maximum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, maximum aggregate number of ordinary shares to be issued | 39,272,595 | |||||||||||
Share based compensation, option vesting period | 4 years | |||||||||||
2010 Plan | Minimum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, option vesting period | 3 years | |||||||||||
2010 Plan and 2014 Plan | Common Class A | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Shares reserved for future issuance under the plan | 7,562,532 | |||||||||||
2020 Plan | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Percentage of share capital considered for Maximum shares issuable under the plan | 5% | |||||||||||
2020 Plan | Common Class A | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Share based compensation, maximum aggregate number of ordinary shares to be issued | 46,560,708 |
TAXATION - Income Taxes (Detail
TAXATION - Income Taxes (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
TAXATION | |||
Income (loss) before income taxes | ¥ (2,482,795) | ¥ (628,530) | ¥ 626,508 |
Non-PRC | |||
TAXATION | |||
Income (loss) before income taxes | (331,586) | (421,597) | 675,369 |
PRC | |||
TAXATION | |||
Income (loss) before income taxes | ¥ (2,151,209) | ¥ (206,933) | ¥ (48,861) |
TAXATION - Income Tax Benefits
TAXATION - Income Tax Benefits (Expense) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
TAXATION | ||||
Current | ¥ (157,526) | ¥ (115,577) | ¥ (111,082) | |
Deferred | 43,152 | $ 6,078 | (17,887) | (325) |
Income tax benefits (expenses) | ¥ (114,374) | $ (16,109) | ¥ (133,464) | ¥ (111,407) |
TAXATION - PRC operations (Deta
TAXATION - PRC operations (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
TAXATION | ||||
Income (loss) before income taxes | ¥ (2,482,795) | ¥ (628,530) | ¥ 626,508 | |
Income tax (expenses) benefits computed at applicable tax rates (25%) | 620,699 | 157,133 | (156,627) | |
Non-deductible expenses | (700) | (72,156) | (13,116) | |
Research and development expenses | 65,863 | 67,789 | 45,122 | |
Preferential rate | (6,140) | (6,163) | 14,232 | |
Current and deferred tax rate differences | 11,036 | 15,847 | 26,115 | |
International rate differences | (101,585) | (75,119) | 120,678 | |
Tax exempted income | 2,803 | 249 | 14,536 | |
Foreign investment | (53,617) | (39,224) | (49,815) | |
Unrecognized tax benefits | (11,283) | (13,674) | (12,338) | |
Change in valuation allowance | (606,071) | (135,732) | (79,733) | |
Prior year provision to return true up | (34,759) | (28,949) | (22,898) | |
Others | 620 | 3,465 | (2,437) | |
Income tax expenses | ¥ (114,374) | $ (16,109) | ¥ (133,464) | ¥ (111,407) |
TAXATION - PRC operations (Pare
TAXATION - PRC operations (Parenthetical) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
TAXATION | |||
Statutory income tax rate | 25% | 25% | 25% |
TAXATION - Deferred Taxes (Deta
TAXATION - Deferred Taxes (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Non-current | ||||
Allowance for doubtful debt | ¥ 125,500 | ¥ 52,658 | ||
Impairment of long-lived assets | 166,576 | 40,784 | ||
Impairment of long-term investment | 4,866 | 3,024 | ||
Accrued expense | 39,896 | 22,108 | ||
Tax losses | 849,672 | 358,454 | ||
Property and equipment | 2,919 | 38,365 | ||
Intangible assets | 9,432 | 7,142 | ||
Finance lease | 386,327 | 372,997 | ||
Deferred government grant | 3,357 | 1,714 | ||
Operating lease | 949,362 | 768,638 | ||
Loss picked up on equity method investments | 10,558 | 69,440 | ||
Valuation allowance | (955,738) | (397,457) | ¥ (261,960) | |
Total deferred tax assets, net of valuation allowance | 1,592,727 | 1,337,867 | ||
Non-current | ||||
Intangible assets | 405,964 | 266,922 | ||
Property and equipment | 172,095 | 360,989 | ||
Capitalized interest expenses | 49,544 | 39,606 | ||
Finance lease | 296,789 | 289,586 | ||
Operating lease | 949,362 | 768,638 | ||
Investment in subsidiaries | 159,691 | 98,608 | ||
Total non-current deferred tax liabilities | 2,033,445 | 1,824,349 | ||
Net deferred tax liabilities | (440,718) | (486,482) | ||
Deferred tax assets | 247,644 | $ 34,880 | 196,098 | |
Deferred tax liabilities | 688,362 | $ 96,954 | 682,580 | |
Net deferred tax liabilities | ¥ (440,718) | ¥ (486,482) |
TAXATION - Unrecognized Tax Ben
TAXATION - Unrecognized Tax Benefits (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
TAXATION | ||
Balance at beginning of year | ¥ 64,528 | ¥ 64,854 |
Reversal based on tax positions related to prior years | 0 | (418) |
Additions based on tax positions related to the current year | 0 | 92 |
Balance at end of year | ¥ 64,528 | ¥ 64,528 |
TAXATION - Additional Informati
TAXATION - Additional Information (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Jan. 01, 2008 | Dec. 31, 2019 | Dec. 31, 2016 | Nov. 30, 2016 | Oct. 31, 2015 | Apr. 30, 2011 | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2019 | Dec. 31, 2018 USD ($) | Dec. 31, 2008 | Dec. 31, 2023 USD ($) | |
TAXATION | |||||||||||||
Unified enterprise income tax rate | 25% | ||||||||||||
Undistributed earnings from its PRC subsidiaries | ¥ 1,803,272 | ||||||||||||
Withholding tax liability | 159,691 | ||||||||||||
Unrecognized tax benefits | 98,457 | ¥ 87,174 | $ 13,867 | ||||||||||
Unrecognized tax benefits impact in the effective rate | ¥ 61,827 | ||||||||||||
Beijing 21Vianet Broad Band Data Center Co., Ltd. ("21Vianet Beijing") | |||||||||||||
TAXATION | |||||||||||||
Income tax rate | 15% | ||||||||||||
Preferential tax rate | 15% | 15% | 15% | 15% | |||||||||
21Vianet (Xi'an) Information Outsourcing Industry Park Services Co., Ltd. ("Xi'an Sub") | |||||||||||||
TAXATION | |||||||||||||
Preferential tax rate | 15% | 15% | 15% | 15% | |||||||||
Shanghai Blue Cloud Technology Co., Ltd. ("SH Blue Cloud") | |||||||||||||
TAXATION | |||||||||||||
Preferential tax rate | 15% | 15% | 15% | 15% | |||||||||
Shenzhen Diyixian Telecommunication Co., Ltd. ("SZ DYX") | |||||||||||||
TAXATION | |||||||||||||
Preferential tax rate | 15% | 15% | 15% | 15% | |||||||||
Beijing TenxCloud Technology Co., Ltd. ("BJ TenxCloud") | |||||||||||||
TAXATION | |||||||||||||
Preferential tax rate | 15% | 15% | 15% | 15% | |||||||||
Shanghai Hesheng Data System Co., Ltd ("SH Hesheng") | |||||||||||||
TAXATION | |||||||||||||
Preferential tax rate | 15% | 25% | 25% | 15% | |||||||||
TAIWAN | DYX Taiwan | |||||||||||||
TAXATION | |||||||||||||
Income tax rate | 20% | 20% | 20% | ||||||||||
PRC [Member] | |||||||||||||
TAXATION | |||||||||||||
Income tax rate on PRC tax resident enterprises | 25% | ||||||||||||
Net tax operating losses from PRC subsidiaries (in RMB) | ¥ 2,099,407 | ||||||||||||
Interest expenses (in RMB) | 11,283 | ¥ 9,874 | ¥ 6,606 | ||||||||||
Accumulated interest expenses (in RMB) | ¥ 33,929 | ¥ 22,646 | |||||||||||
PRC [Member] | Minimum | |||||||||||||
TAXATION | |||||||||||||
Net tax operating losses expiration year | 2024 | ||||||||||||
PRC [Member] | Maximum | |||||||||||||
TAXATION | |||||||||||||
Net tax operating losses expiration year | 2033 | ||||||||||||
HONG KONG | |||||||||||||
TAXATION | |||||||||||||
Assessable profits | $ | $ 2,000 | ||||||||||||
HONG KONG | 21Vianet Hong Kong Entities [Member] | |||||||||||||
TAXATION | |||||||||||||
Income tax rate | 16.50% | 16.50% | 16.50% | ||||||||||
HONG KONG | Scenario assessable profits earned Hk2 million | |||||||||||||
TAXATION | |||||||||||||
Income tax rate | 8.25% | ||||||||||||
HONG KONG | Scenario assessable profits remaining Hk2 million | |||||||||||||
TAXATION | |||||||||||||
Income tax rate | 16.50% | ||||||||||||
Non-PRC | |||||||||||||
TAXATION | |||||||||||||
Withholding tax percent | 10% |
TAXATION - Movements of the val
TAXATION - Movements of the valuation allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movements of the valuation allowance | ||
Balance at beginning of year | ¥ 397,457 | ¥ 261,960 |
Addition | 606,071 | 135,732 |
Expiration | (47,790) | (235) |
Balance at end of year | ¥ 955,738 | ¥ 397,457 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related party transactions (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 10 Months Ended | 12 Months Ended | |||
May 31, 2023 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
RELATED PARTY TRANSACTIONS | ||||||
Operating income | ¥ 106,273 | $ 14,968 | ¥ 60,013 | |||
Long-term loan to related parties | 115,048 | 16,205 | 500 | ¥ 75,872 | ||
Interest expenses, net | 312,172 | 43,969 | 273,305 | 334,950 | ||
Lease expenses | 1,040,405 | 1,019,425 | 966,663 | |||
Receipt of loans to a related party | 9,800 | 1,380 | ||||
Proceeds from related party debt | 350,000 | $ 49,296 | ||||
Percentage of related party interest rate | 6% | |||||
SZ Century | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Revenues | 14,089 | 1,445 | ||||
Shanghai Puping | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Long-term loan to related parties | 80,263 | 75,611 | ||||
Shanghai Edge Interchange | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Revenues | 938 | 651 | ||||
Long-term loan to related parties | 1,000 | 500 | ||||
Interest on Investment Income (Expenses) | 32 | 1 | ||||
Jingliang Inter Cloud | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Revenues | 480 | |||||
BJ New Internet | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Revenues | 170 | |||||
Long-term loan to related parties | 261 | |||||
CYSD | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Cost of goods and services sold | 31,119 | 36,673 | 38,918 | |||
Beijing Huaqing | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Cost of goods and services sold | 1,254 | |||||
Ziguang Finance Leasing | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Related party transaction, Lease payment paid | 10,431 | |||||
Beijing Qidi Yefeng | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Related party transaction, Lease payment paid | 2,154 | |||||
Sanhe Mingtai | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Cost of goods and services sold | 17,366 | |||||
Long-term loan to related parties | 33,785 | |||||
Related party transaction, Lease payment paid | 10,801 | |||||
Lease expenses | ¥ 14,268 | |||||
Repairs and maintenance | 3,098 | |||||
ROU assets | 171,629 | 171,629 | ||||
Lease liability | ¥ 173,628 | 173,628 | ||||
Beijing Jiwa | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Cost of goods and services sold | 1,891 | |||||
SH Shibei | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Interest on Investment Income (Expenses) | (1,321) | 1,321 | ||||
Receipt of loans to a related party | 9,800 | |||||
Changzhou Gaoxin | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Interest expenses, net | 13,183 | |||||
Proceeds from related party debt | 350,000 | |||||
Changzhou Gaoxin Internet Co., Ltd | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Proceeds from related party debt | ¥ 350,000 | |||||
Tuspark Innovation | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Cash consideration for shares repurchase | 1,701,804 | |||||
Others | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Revenues | 2 | 144 | ||||
Cost of goods and services sold | ¥ 333 | ¥ 513 | ¥ 1,223 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Related party balances (Details) - Related Party [Member] ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | ¥ 277,237 | $ 39,048 | ¥ 152,089 |
Amount due to related parties | 356,080 | 6,928 | |
Shanghai Puping | |||
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | 218,405 | 138,142 | |
SH Shibei | |||
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | 11,121 | ||
BJ New Internet | |||
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | 441 | 441 | |
Shanghai Edge Interchange | |||
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | 1,533 | 1,191 | |
Sanhe Mingtai | |||
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | 56,833 | ||
CYSD | |||
RELATED PARTY TRANSACTIONS | |||
Amount due to related parties | 6,398 | ||
Changzhou Gaoxin | |||
RELATED PARTY TRANSACTIONS | |||
Amount due to related parties | 356,067 | ||
Others | |||
RELATED PARTY TRANSACTIONS | |||
Amounts due from related parties | 25 | 1,194 | |
Amount due to related parties | ¥ 13 | ¥ 530 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
RESTRICTED NET ASSETS. | ||
Minimum required percentage of annual after-tax profit to the general statutory reserve | 10% | |
Maximum requirement of each of the entity's PRC subsidiaries' after-tax profits to be allocated to a general reserve fund as a percentage of each Subsidiaries' registered capital | 50% | |
Statutory reserves | ¥ 80,615 | ¥ 77,995 |
Restricted net asset, PRC generally accepted accounting principles (in RMB) or (in dollars) | ¥ 15,231,710 |
EARNING (LOSS) PER SHARE - Basi
EARNING (LOSS) PER SHARE - Basic and diluted loss per share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
Numerator: | ||||
Net income (loss) | ¥ (2,597,169) | $ (365,805) | ¥ (761,994) | ¥ 515,101 |
Net income attributable to noncontrolling interest | (46,667) | (6,573) | (13,958) | (15,003) |
Net income (loss) attributable to the Company | (2,643,836) | (372,378) | (775,952) | 500,098 |
Dividend distribution to perpetual convertible preferred shareholders | (5,831) | |||
Adjusted net income (loss) attributable to ordinary shareholders - Basic | (2,643,836) | (775,952) | 494,267 | |
Changes in the fair value of convertible promissory notes | 165,930 | $ 23,371 | (22,626) | (829,149) |
Adjusted interest for convertible promissory notes | 9,703 | |||
Adjusted net loss attributable to ordinary shareholders -Diluted | ¥ (2,643,836) | ¥ (775,952) | ¥ (325,179) | |
Denominator: | ||||
Basic | shares | 901,143,138 | 901,143,138 | 886,817,620 | 865,352,554 |
Weighted average number of shares outstanding - diluted (in shares) | shares | 901,143,138 | 901,143,138 | 886,817,620 | 911,591,433 |
(Loss) earning per share-Basic: | ||||
Net (loss) earning | ¥ / shares | ¥ (2.93) | ¥ (0.87) | ¥ 0.57 | |
Basic | (per share) | (2.93) | $ (0.41) | (0.87) | 0.57 |
Loss per share-Diluted: | ||||
Net loss | ¥ / shares | (2.93) | (0.87) | (0.36) | |
Diluted | (per share) | ¥ (2.93) | $ (0.41) | ¥ (0.87) | ¥ (0.36) |
EARNING (LOSS) PER SHARE - Addi
EARNING (LOSS) PER SHARE - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 shares | |
EARNING (LOSS) PER SHARE | |
Shares issued to depositary bank (in shares) | 7,800,000 |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||
Jan. 27, 2022 shares | Aug. 19, 2021 shares | May 01, 2021 shares | Mar. 01, 2021 shares | Dec. 31, 2023 CNY (¥) shares | Apr. 30, 2021 USD ($) $ / shares shares | Jun. 30, 2020 shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2023 USD ($) Vote $ / shares shares | Dec. 31, 2021 CNY (¥) shares | Oct. 05, 2023 shares | Feb. 15, 2023 Vote shares | Dec. 31, 2022 shares | Oct. 31, 2019 $ / shares | |
SHARE CAPITAL | ||||||||||||||
Proceeds from issuance of stock | ¥ 2,122,123 | $ 298,895 | ¥ (131) | |||||||||||
Percentage of total principal amount converted | 42.30% | |||||||||||||
Shares issued to depositary bank (in shares) | 7,800,000 | |||||||||||||
Reissuance of treasury stock for share option exercise and restricted share units vested , shares | 3,252,768 | 3,252,768 | ||||||||||||
Payment of issuance costs | ¥ 1,880 | $ 265 | ||||||||||||
Related Party [Member] | Tuspark Innovation | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Aggregate Purchase price | $ | $ 260,000 | |||||||||||||
Number of shares converted from Class B to Class A | 62,418,897 | |||||||||||||
Related Party [Member] | Sunrise Corporate Holding Ltd | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Number of shares converted from Class B to Class A | 4,100,000 | |||||||||||||
Class A Ordinary Shares | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Entitled vote per ordinary share | Vote | 1 | |||||||||||||
Proceeds from issuance of stock | ¥ | ¥ 2,122,123 | |||||||||||||
Number of shares issued upon conversion | 42,401,010 | |||||||||||||
Shares issued to depositary bank (in shares) | 7,800,000 | |||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 54,507,816 | |||||||||||||
Total issuance for converted preferred stock | 54,507,816 | |||||||||||||
Ordinary shares, shares authorized (in shares) | 2,698,935,000 | 1,199,490,000 | ||||||||||||
Ordinary shares, shares issued (in shares) | 1,513,609,283 | 859,932,323 | ||||||||||||
Increase in number of shares | 1,500,000,000 | |||||||||||||
Number of shares issued | 150,000 | 16,680,000 | ||||||||||||
Payment of issuance costs | ¥ | ¥ 37,720 | |||||||||||||
Class A Ordinary Shares | Convertible Notes Payable | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Number of shares issued | 150,000 | |||||||||||||
Class A Ordinary Shares | Success Flow International Investment Limited | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Number of shares issued | 455,296,932 | |||||||||||||
Class A Ordinary Shares | Choice Faith Group Holdings Limited | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Number of shares issued | 195,127,260 | |||||||||||||
Class A Ordinary Shares | Related Party [Member] | Tuspark Innovation | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Share repurchase price | $ / shares | $ 5.346 | |||||||||||||
Class B Ordinary Shares | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Entitled vote per ordinary share | Vote | 10 | |||||||||||||
Conversion share ratio | 1 | |||||||||||||
Ordinary shares, shares authorized (in shares) | 300,000,000 | 300,000,000 | ||||||||||||
Ordinary shares, shares issued (in shares) | 30,721,723 | 30,721,723 | ||||||||||||
Class B Ordinary Shares | Related Party [Member] | Tuspark Innovation | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Number of shares repurchased and cancelled | 48,634,493 | |||||||||||||
Ordinary shares repurchased | 48,634,493 | |||||||||||||
Class C Ordinary Shares | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Entitled vote per ordinary share | Vote | 1 | |||||||||||||
Ordinary shares, shares authorized (in shares) | 60,000 | 60,000 | ||||||||||||
Ordinary shares, shares issued (in shares) | 60,000 | 60,000 | ||||||||||||
Class D ordinary shares | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Entitled vote per ordinary share | Vote | 500 | |||||||||||||
Ordinary shares, shares authorized (in shares) | 555,000 | |||||||||||||
Ordinary shares, shares issued (in shares) | 0 | |||||||||||||
American Depository Shares | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 12 | $ 54.47 | ||||||||||||
American Depository Shares | Related Party [Member] | Tuspark Innovation | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Share repurchase price | $ / shares | $ 32.076 | |||||||||||||
Series A Perpetual Convertible Preferred Shares | ||||||||||||||
SHARE CAPITAL | ||||||||||||||
Total issuance for converted preferred stock | 300,000 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and liabilities measured (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | ¥ 356,820 | ¥ 1,600 |
Liabilities measured at fair value on recurring basis | 5,971,887 | 5,842,305 |
Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | 356,820 | |
Available-for-sales Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | 1,600 | |
2025 Convertible promissory notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 537,778 | |
2026 Convertible promissory notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 4,196,500 | 3,446,432 |
2027 Convertible promissory notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 1,586,681 | 1,858,095 |
Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 188,706 | |
Quoted prices in active markets for identical assets and liabilities (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 4,196,500 | 3,446,432 |
Quoted prices in active markets for identical assets and liabilities (Level 1) | 2026 Convertible promissory notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 4,196,500 | 3,446,432 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | 356,820 | |
Significant other observable inputs (Level 2) | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | 356,820 | |
Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | 1,600 | |
Liabilities measured at fair value on recurring basis | 1,775,387 | 2,395,873 |
Unobservable inputs (Level 3) | Available-for-sales Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets measured at fair value on recurring basis | 1,600 | |
Unobservable inputs (Level 3) | 2025 Convertible promissory notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 537,778 | |
Unobservable inputs (Level 3) | 2027 Convertible promissory notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | 1,586,681 | ¥ 1,858,095 |
Unobservable inputs (Level 3) | Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities measured at fair value on recurring basis | ¥ 188,706 |
FAIR VALUE MEASUREMENTS - Key a
FAIR VALUE MEASUREMENTS - Key assumptions (Details) - 2025 Convertible promissory notes | Dec. 31, 2023 | Dec. 31, 2022 |
Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.9000 | |
Volatility | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.9400 | |
Volatility | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.9600 | |
Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.1465 | 0.1600 |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.0399 | |
Risk-free interest rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.0423 | |
Risk-free interest rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.0428 | |
Probability of triggering events | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible notes | 0.1500 |
FAIR VALUE MEASUREMENTS - Liabi
FAIR VALUE MEASUREMENTS - Liabilities measured (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Expense | |
2025 Convertible promissory notes | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | ¥ 537,778 | ¥ 513,754 |
Foreign exchange loss | 11,127 | 46,650 |
Changes in the fair value | ¥ (21,816) | ¥ (22,626) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Changes In The Fair Value Of Convertible Promissory Notes | Changes In The Fair Value Of Convertible Promissory Notes |
Settlement | ¥ (527,089) | |
Ending Balance | ¥ 537,778 | |
Share consideration due to the original shareholders for business combinatio | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning Balance | 214,577 | |
Foreign exchange loss | 960 | |
Changes in the fair value | 187,746 | |
Transfer out of Level 3 | ¥ (214,577) | |
Ending Balance | ¥ 188,706 |
FAIR VALUE MEASUREMENTS - Ass_2
FAIR VALUE MEASUREMENTS - Assets measured at fair value on a non-recurring basis (Details) | Dec. 31, 2023 |
Discount rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Rates used | 0.086 |
Unobservable inputs (Level 3) | Revenue growth rate | Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Rates used | 0 |
Unobservable inputs (Level 3) | Revenue growth rate | Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Rates used | 0.38 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) - Schedule of commitments to purchase certain computer and network equipment and construction-in-progress - Capital Commitments ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
COMMITMENTS AND CONTINGENCIES | |
2024 | ¥ 1,435,439 |
2025 | 348,096 |
2026 | 6,120 |
2027 | 7,402 |
2028 | 3,744 |
2029 and thereafter | 7 |
Commitments to purchase | ¥ 1,800,808 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) - Purchase Commitment [Member] - Schedule of outstanding purchase commitments in relation to bandwidth and cabinet capacity ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
COMMITMENTS AND CONTINGENCIES | |
2024 | ¥ 888,030 |
2025 | 227,716 |
2026 | 173,244 |
2027 | 72,906 |
2028 | 7,820 |
2029 and thereafter | 2,627 |
Commitments to purchase | ¥ 1,372,343 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
COMMITMENTS AND CONTINGENCIES. | |
Accrual for unrecognized tax benefits and interest | ¥ 98,457 |
Accrued liability for legal contingencies | ¥ 0 |
PARENT COMPANY ONLY CONDENSED_3
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed balance sheets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Current assets: | ||||
Cash and cash equivalents | ¥ 2,243,537 | $ 315,996 | ¥ 2,661,321 | ¥ 1,372,481 |
Short-term investments | 356,820 | 50,257 | ||
Prepaid expenses and other current assets | 2,375,341 | 334,560 | 2,147,500 | |
Total current assets | 9,823,478 | 1,383,608 | 7,052,276 | |
Non-current assets: | ||||
Total non-current assets | 20,562,425 | 2,896,157 | 19,896,129 | |
Total assets | 30,385,903 | 4,279,765 | 26,948,405 | |
Current liabilities: | ||||
Accrued expenses and other payables | 2,783,102 | 391,992 | 2,410,479 | |
Total current liabilities | 11,437,132 | 1,610,886 | 6,332,085 | |
Non-current liabilities: | ||||
Convertible promissory notes | 1,769,946 | 249,292 | 5,859,259 | |
Derivative liability | 188,706 | 26,579 | ||
Total non-current liabilities | 12,434,388 | 1,751,348 | 13,634,464 | |
Total liabilities | 23,871,520 | 3,362,234 | 19,966,549 | |
Shareholders' equity: | ||||
Additional paid-in capital | 17,291,312 | 2,435,430 | 15,239,926 | |
Accumulated other comprehensive income (loss) | (14,343) | (2,020) | 11,022 | |
Accumulated deficit | (11,016,323) | (1,551,617) | (8,369,868) | |
Treasury stock | (326,953) | (46,050) | (349,523) | |
Total VNET Group, Inc. shareholders' equity | 6,014,415 | 847,112 | 6,609,613 | |
Total liabilities and shareholders' equity | 30,385,903 | 4,279,765 | 26,948,405 | |
Related Party [Member] | ||||
Current assets: | ||||
Amounts due from related parties | 277,237 | 39,048 | 152,089 | |
Current liabilities: | ||||
Amounts due to related parties | 356,080 | 50,153 | 6,928 | |
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 30 | 7,661 | ||
Prepaid expenses and other current assets | 192,953 | 99,962 | ||
Total current assets | 13,545,223 | 12,506,876 | ||
Non-current assets: | ||||
Investments in subsidiaries | 1,484,730 | |||
Total non-current assets | 1,484,730 | |||
Total assets | 13,545,223 | 13,991,606 | ||
Current liabilities: | ||||
Accrued expenses and other payables | 137,826 | 88,225 | ||
Account payables | 57 | 56 | ||
Convertible promissory notes | 4,208,495 | 537,778 | ||
Total current liabilities | 5,572,156 | 1,522,734 | ||
Non-current liabilities: | ||||
Convertible promissory notes | 1,769,946 | 5,859,259 | ||
Derivative liability | 188,706 | |||
Total non-current liabilities | 1,958,652 | 5,859,259 | ||
Total liabilities | 7,530,808 | 7,381,993 | ||
Shareholders' equity: | ||||
Additional paid-in capital | 17,291,312 | 15,239,926 | ||
Accumulated other comprehensive income (loss) | (14,343) | 11,022 | ||
Accumulated deficit | (10,935,708) | (8,291,872) | ||
Treasury stock | (326,953) | (349,523) | ||
Total VNET Group, Inc. shareholders' equity | 6,014,415 | 6,609,613 | ||
Total liabilities and shareholders' equity | 13,545,223 | 13,991,606 | ||
Parent Company | Affiliated Entity [Member] | ||||
Current assets: | ||||
Amounts due from related parties | 13,352,240 | 12,399,253 | ||
Current liabilities: | ||||
Amounts due to related parties | 1,225,778 | 896,675 | ||
Class A Ordinary Shares | ||||
Shareholders' equity: | ||||
Ordinary shares | 103 | 14 | 56 | |
Class A Ordinary Shares | Parent Company | ||||
Shareholders' equity: | ||||
Ordinary shares | 103 | 56 | ||
Class B Ordinary Shares | ||||
Shareholders' equity: | ||||
Ordinary shares | 4 | $ 1 | 4 | |
Class B Ordinary Shares | Parent Company | ||||
Shareholders' equity: | ||||
Ordinary shares | 4 | 4 | ||
Class C Ordinary Shares | Parent Company | ||||
Shareholders' equity: | ||||
Ordinary shares |
PARENT COMPANY ONLY CONDENSED_4
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION- Condensed statements of operations (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Operating Expenses | ||||
General and administrative expenses | ¥ (541,850) | $ (76,318) | ¥ (642,945) | ¥ (842,354) |
Operating loss | (1,970,901) | (277,596) | 121,156 | 21,314 |
Changes in the fair value of financial liabilities | (165,930) | (23,371) | 22,626 | 829,149 |
Net (loss) income attributable to VNET Group, Inc. | (2,482,795) | (628,530) | 626,508 | |
Income tax expense | (114,374) | (16,109) | (133,464) | (111,407) |
Net income (loss) attributable to VNET Group, Inc. | (2,643,836) | $ (372,378) | (775,952) | 500,098 |
Parent Company | ||||
Operating Expenses | ||||
General and administrative expenses | (24,663) | (36,219) | (275,881) | |
Operating loss | (24,663) | (36,219) | (275,881) | |
Other loss | (94,452) | (247,083) | (119,932) | |
Changes in the fair value of financial liabilities | (165,930) | 22,626 | 829,149 | |
Net (loss) income attributable to VNET Group, Inc. | (2,358,791) | (515,276) | 66,762 | |
Net income (loss) attributable to VNET Group, Inc. | ¥ (2,643,836) | ¥ (775,952) | ¥ 500,098 |
PARENT COMPANY ONLY CONDENSED_5
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Statement of Comprehensive Loss (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Condensed statements of comprehensive loss | ||||
Net loss | ¥ (2,643,836) | $ (372,378) | ¥ (775,952) | ¥ 500,098 |
Other comprehensive (loss) income, net of tax of nil | ||||
Foreign currency translation adjustments, net of tax of nil | (25,365) | (3,573) | 101,465 | (34,908) |
Comprehensive income (loss) | (2,622,534) | (369,378) | (660,529) | 480,193 |
Comprehensive (loss) income attributable to VNET Group, Inc. | (2,669,201) | $ (375,951) | (674,487) | 465,190 |
Parent Company | ||||
Condensed statements of comprehensive loss | ||||
Net loss | (2,643,836) | (775,952) | 500,098 | |
Other comprehensive (loss) income, net of tax of nil | ||||
Foreign currency translation adjustments, net of tax of nil | (25,365) | 101,465 | (34,908) | |
Other comprehensive loss, net of tax of nil: | (25,365) | 101,465 | (34,908) | |
Comprehensive (loss) income attributable to VNET Group, Inc. | ¥ (2,669,201) | ¥ (674,487) | ¥ 465,190 |
PARENT COMPANY ONLY CONDENSED_6
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Statement of Comprehensive Loss (Parenthetical) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed statements of comprehensive loss | |||
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
Parent Company | |||
Condensed statements of comprehensive loss | |||
Other comprehensive (loss) income, tax | 0 | 0 | 0 |
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
PARENT COMPANY ONLY CONDENSED_7
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Condensed statements of cash flows | ||||
Net cash used in operating activities | ¥ 2,063,480 | $ 290,635 | ¥ 2,440,214 | ¥ 1,387,922 |
Net cash used in investing activities | (3,905,109) | (550,023) | (3,559,252) | (3,772,613) |
Net cash generated from financing activities | 3,941,134 | 555,097 | 2,298,080 | 967,577 |
Net (decrease) increase in cash and cash equivalents and restricted cash | 2,109,493 | 297,116 | 1,281,021 | (1,407,964) |
Cash and cash equivalents and restricted cash at beginning of year | 2,989,494 | 421,061 | 1,708,473 | 3,116,437 |
Cash and cash equivalents and restricted cash at end of year | 5,098,987 | $ 718,177 | 2,989,494 | 1,708,473 |
Parent Company | ||||
Condensed statements of cash flows | ||||
Net cash used in operating activities | 29,940 | (14,927) | (218,664) | |
Net cash used in investing activities | (37,571) | (1,670,058) | 113,530 | |
Net cash generated from financing activities | 1,592,627 | 143,037 | ||
Net (decrease) increase in cash and cash equivalents and restricted cash | (7,631) | (92,358) | 37,903 | |
Cash and cash equivalents and restricted cash at beginning of year | 7,661 | 100,019 | 62,116 | |
Cash and cash equivalents and restricted cash at end of year | ¥ 30 | ¥ 7,661 | ¥ 100,019 |