VNET - Earnings call transcript Q3 2020

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Operator

Good morning, and good evening, ladies and gentlemen. Thank you and welcome to 21Vianet Group's Third Quarter 2020 Earnings Conference Call. With us today are Mr. Alvin Wang, Chief Executive Officer and President; Mr. Samuel Shen, Executive Chairman of the Retail IDC Business Group; Ms. Officer; Financial Chief Liu, and Ms. Sharon Investor Jiang, Relations Director company. the of Rene now to over the first I'll call Ms. your turn speaker today, IR XXVianet. Director Jiang, Rene of ahead, go ma'am. Please

Rene Jiang

Thank third to you, everyone. earnings XXXX call. our operator. Hello, quarter Welcome

in start, forward-looking made to Private control, not statements which on statements Securities are and we contain I their by statements, implied after details the factors, call or duty for of known Act cautionary Reform expectations cause current Harbor of and unknown entity pursuant to this uncertainties, for selected please under and involve the call Wang, Alvin these XXVianet. risk revise events or that or no based the this President call. now filings any factors XXVianet Before may company's that statements All undertakes of CEO of forward-looking or the by different Litigation date forward-looking SEC. provisions from Safe performance, company observations to Mr. will the qualified note with and forward-looking the results, circumstances the XXXX. expectations company's statements. the turn management's the results, to may performance, update materially and expressly actual risks, forward-looking conference of other over achievements be statements are the These

Alvin Wang

Thank joining us for you on Good everyone. call Rene. evening you, earnings today. good Thank and morning our

results achieved that announce strong We in we to XXXX. again quarter are the pleased once third of

EBITDA million, our previous which in we During line our billion, RMBXXX.X with grew our exceeding adjusted and our the guidance was guidance. revenues RMBX.XX to previous increased quarter, to

in XX.X% the margin of same in compared quarter also as third EBITDA the our expanded period XXXX. to XX.X% Additionally, to

more of than terms X,XXX third the cabinets we quarter of XXXX. delivered in delivery, In cabinet

cabinets growth the our organic the total more have we delivered on-track of than result of year. a As schedule, in delivery XX,XXX since and steady beginning

efforts. our to we Beyond make also success, headway continued our expansion in delivery

for are the example, quarter, surrounding resources, of separate city. which Beijing the to east we immediate both the the in of During located of two secured area

IT completed in Importantly, the us when both region. power for solutions IDC to be around of megawatts, the combined resources helping better our serve the total growing XX demand will

ahead, expect be to first completed both of Looking we the XXX XXXX. IT Jiangsu, of half power stage expansion secured of to in in the used we an Moreover, projects be megawatts our first during have of the campus. Jiangsu additional

is company. a our Campus, around In capacity fact, the cloud of Jiangsu three current capacity leading existing public this for built were additional megawatt megawatt times which

we forward, wholesale the support five next additional help to years to demand and solutions the this the to IDC secure retail for grow. better carrier-neutral capacity as continue Going market expect us our region more in and share, three customers over

dual-core us our IDC execute same and strong time, delivered we wholesale also cabinets. move-in continued solutions tailored, During leverage to enabled IDC retail mix. customers newly refine our customer our solutions our the scale for to for demands both reliable carrier-neutral to the quarter, further and strategy periods At shorten the of

rates from utilization to the of XX.X% the quarter third grow, XX.X% continue compound result, As XXXX of to quarter our a second increasing XXXX. in in

newly-built to our ramp-up Additionally, increased to for for IDCs rates our IDCs third utilization XX%, during while rates utilization the mature XX.X%. and quarter, increased

sales on momentum. partnership rate the Beyond also front maintain consistent improvements, these to progress utilization made we our

forward. retail continuing project strength progress concerning in expansion of to from as, IDC demand Bank, phase our quarter, Everbright such IDC the of made Haro about good Meanwhile, Bikes going for customers [ph] China Hotels Group for example, satisfy center data our with we we [ph]. the are we optimistic the retail During continue Huazhu second and mission-critical the And this exchange company. the

a to growth foster wholesale cabinets cloud module the is independent company. we an continue to which On front, collaboration, new through customer, XXX public offering

we Additionally, better demand together and their in customers more on for to growing work existing focused engaging closely our solutions. support order with quality also remain scalable IDC

During our in customers the cabinets and an X,XXX Beijing. over XXX quarter, existing in additional Shanghai cabinets allocated to we

a would I discuss to recent our changes like concerning moment Now to team. take our to announcement, management

many are has opportunities. aware, of seize As of rotation new our approved Directors leadership better industry help our growth Board program to you a company

our initiative, Xst, the to As be CEO XXXX, Mr. become January where CEO part appointed business of will I group. effective of Group of this Samuel wholesale position IDC will Shen

program each the role. company All new senior XXVianet, here of strength team its better believe firmly that effectively suited each at us our And unique each leverage achieve goals. member's that member of well to will this leadership help is to

Now I Q&A session. additional color all and surrounding will in all development to you and would forward more provide later to like plans. outlook current Thank with speaking the Samuel, who looking our you, everyone to future introduce

Samuel Shen

is you, This Thank everyone. Samuel. Hi, Alvin.

better I'm As our technical that to daily look is capitalize always, To new own announce opportunities Alvin's in forward. experience of personal utilizing continue quite industry. to virtually. increasing the be maintain point, the and a on it management pleased forward company China's investment inspired team and I joining the a further is and consistent of reiterate to a On and advance innovative, business community groups great by both our technology, of IDC background I to us note, my all do with effectiveness in this to that going leadership and rotating speak since integrate abundance believe we the May, you that meet our on basis with dialogue will industry. pleasure our program quite help within to opportunities

our to outlook. market turn let's Now

industry the trends broader China IDC market remained in for the very ahead, Looking favorable.

to Frost IT enterprises data center reach market increasingly use scaling services in China in the by according for RMBXXX Meanwhile, expected flexibility to the is fact, outsourcing IT-related seeking In are providers their costs, Sullivan. total control of to demand billion XXXX making service attractive. & third-party

a market from XX.X% XXXX, the XXXX size XXXX. of to is total retail revenues, CAGR data grow of market the to billion services total by reaching by measured center As at RMBXX expected

the at total according CAGR of size Sullivan. a Frost of center XX.X% market reaching services to again, & to the expected billion market wholesale same XXXX, over grow RMBXX.X While duration, by data the is

IDC delivered to which continue industry dual-core growth results grow, strategy, since its committed strong has our the will in we of to remain China's implementation As inception XXXX.

As a high-quality, this focused carrier-neutral is on both flexible to strategy solutions throughout providing reminder, customers dual-core retail wholesale IDC China. and and

to have front, and for of be in China's our front, wholesale the hyperscale we own services scalable advantages enterprises. we IDC growth attractive industry increasing are solutions. On on IDC highly IDC the demand gaining favorable In we engine expect the industry, continue Meanwhile, observing our modular forward. light our trends to large-scale to going also that found dual-core continue growth strategy and competitive retail momentum

expected our developed which IDC would we the like based review on to we briefly the industry. growth start Q&A, of Before growth also plan, to China's have our new I XXXX three-year continued XXXX,

a between utilization customers, retail One we primary expansion growth. goal was focused rates, were of growth our and our on targets also when healthy adjusted EBITDA plan wholesale and achieve and balance both developing revenue capacity this to for

believe our which, are of progress. we for indicators meaningful All

cabinets set As XX,XXX expansion the or minimum of a year. have part plan, capacity XXX standard of megawatts per we target

now it mind quarter. long-term. Sharon of I believe over results CFO all turn developed well review We the with Ms. and in to stakeholders of momentum Liu, this over that, that for our plan the will With to XXVianet us our our to the positions have financial call our growth maintain

Sharon Liu

Thank you, Samuel and Hello, everyone. Alvin.

present we measures we that Before financial will discussion, detailed today. non-GAAP our start please note

found which in non-cash the included are details certain XXXX in Our RMB changes non-GAAP unless release. and of core are note not expenses, our reconciliation exclude the terms that, otherwise financial basis. results tables The a numbers operations. third of of quarter expenses our these in and the maybe that are press all today part on Please of are year-over-year stated, representing for percentage

some there our throughout utilization maintaining the macro turn. uncertainty efficiency schedule, augmenting financial results and operating bolstering in degree was environment, still delivered strong third quarter, in we rates cabinet delivery Although, the our our of

the healthy guidance quarter address RMB while to billion RMB third demand the growth, period growth solutions revenues and XXXX. by us was during adjusted cabinets industry rate our range. the We by the scalable MRR trajectory X,XXX. Such X,XXX RMB driven new As cabinet mainly a exceeded retail the to our quarter within XXX increased enabled of quarter. uptick and the higher increased our our to EBITDA X.XX same the in the our capacity quarter. IDC expansion, the added per ongoing guidance range, IDC from in of third Revenue wholesale quarter, which solutions during cabinet in in during around million Retail third end for XX% carrier-neutral result, were third

third to third More our second managed XX,XXX and rate XXth, As in capacity from improved XX.X% the we IDCs quarter compound XX.X%, of the IDCs XX.X% up of XXXX, XXXX. the to the XX.X% start same specifically, rate Despite, of and operated mature delivered increased to the to third in utilization XXXX. built of compared in At to expansion, September in those delivered XXXX, prior utilization cabinets. our second for quarter the our quarter compared XX.X% those rate for utilization quarter to time, of XXXX. in quarter the XXXX ramp XX% newly since improved

in shortened the of the of excludes compared the rate ramp-up RMBXXX.X quarter, third in third the was Adjusted expenses million, delivery million to increased as our compensation period to which margin in Adjusted compensation depreciation, expenses well million XXXX. of and XX.X% RMBXXX.X in profit quarter, utilization period cabinets the from period operating RMBXXX.X improved same mainly amortization same to period XX.X% was Adjusted continued Our to by the XX.X%, XXXX. cash additional RMBXXX.X gross which the was due expenses a in in million cash share-based gross XXXX. period. excludes of share-based compared same as

operating grew to diluted the third Each to profit Net improved RMBXXX.X revenue, the RMBX.XX adjusted percentage Adjusted and margin the in Basic period from period and and expenses to per a XXXX, demonstrating operating quarter leverage same by profit ordinary of of XX.X% and to per in represents increased net from the period a RMBXX.X million Adjusted XX.X% shares. ordinary XX.X% same net XX.X% XXXX. in respectively. of same ordinary the ADS XX.X% quarter from RMBX.XX attributable million XXXX. loss improved the from six in As efficiency. operating RMBX.XX of EBITDA of to attributable respectively, of EBITDA ordinary in our in share, quarter RMBXXX.X RMBX.XX same XXXX. were decreased in million to period and third ADS, shares RMBXX.X the shares third million

convertible of the and the debt to the X.X. end After ratio fair was asset to balance promissory debt ratio taking adjusted changes our of on our effect notes, sheet Moving in EBITDA was liquidity. the quarter, our value of XX.X%. the At third out to

addition, million. net in generated from was RMBXXX quarter In cash activities operating the third

As September cash XX, RMBX.XX XXXX, of of a we position recorded billion.

also of in our our sheet from diverse to order funding growth the well-established utilized future to quarter, During prospects, and further fortify strong endorsements cultivate more a we investors resources. balance range

execution million offering, an our plan of to other XX% infrastructure and equity quarter. the to For successful our for corporate general through the and plan XX% We proceeds approximately in purposes. raised net center example, the of remaining R&D US$XXX we expand data use

banks in-depth result to attract relationship terms. With Chinese of experience such have business compounding also GIC. market, obtained respect IDC more shareholders and growth investment cooperation of our with financing, developed and qualified continue extensive with we a more more advantages, favorable As steady as we and to knowledge

M&A those share, Brownfield executing aim We market our cost exploring increase of development Looking supplement site use long-term are with and and in our to in see prudency sheet, ahead, plan as our to initiatives effectiveness. on us potential funding the More congruent number of opportunities continue to with a helping growth. to and our perspective fortifying expansion of accelerate specifically, capable that both IDC a continue we organic services balance we focus of continue our resources a markets. key our regard

of RMBX CapEx stood our acquisitions. RMBX the billion. fourth to billion, In months, price payments expect around nine certain for consideration we including first the quarter, CapEx at be During

be for net quarter range to to expect million RMBXXX RMBX.XX of fourth revenue the million. the in RMBXXX billion in to the XXXX to we EBITDA the be and range RMBX.XX of ahead, billion Looking of adjusted

million epidemic RMBX.XX revenue in that range are any to of EBITDA to to and expect potential remarks million. the ready impact in range Operator, For to be could RMBX.XXX This RMBX.X subject be current the our to not conditions, preliminary questions. prepared for take now to and the our market net reflects XXXX, now operational caused by which adjusted in billion year and we change, the today. full of do be COVID-XX billion RMBX.XXX and factor the concludes views the on of are future. of we the in forecast This

Operator

session. your question. now gentlemen, our the comes and will Currently, line we from Morgan Ladies from question Liu begin Please ask Yang first of [Operator the question-and-answer Stanley. Instructions]

Yang Liu

First, very the the I would strong like congratulate earnings for plan. to bullish management three-year and

the the or and if If addition power two find means then standard -- we like The first will XXX. by these XXX-megawatt we is new use number between these XXX the per directly, XX be plan, number, means the than question would density, think case? that cabinet -- -- that power I Or XX,XXX Is be have it by high numbers cabinets should we megawatt how that divide XX,XXX less divided about the numbers. two year. you, I means the will I ask all use to density. cabinets three-year actually that that relation

elaborate I management you think XX,XXX growth the the in is retail. between of and or the second wholesale-retail. XX-XX And to new could the still mentioned are the Previously, how the the now wholesale think terms XXX about So emphasizing split megawatt? XX-XX strategy. dual-core capacity question of versus we more about split The

to would the term to right third think terms the should on update the way of capacity. ask us please customer could the wholesale in you So in like split I new of front. question, be the what the And about

future elaborate future from the potential more new a of Thank customer independent or customer. about please cloud cloud that terms customer Could you. you demand? mentioned in You

Alvin Wang

make on Yang, our good pay Hello, you, Liu Thank and and this very that a is reports Obviously, questions. Alvin. for your of study figures. you lot attention

from -- we put plan That density, coming which the regarding cabinets the So this XX% other customers will we for per high-power XX% going customers, way. retail forward of the which that have capacity which capacity our capacity, retail around X-kilowatt we let demand and allocate in very for means that expect XX,XXX that of scale wholesale and segment. demand it XXX-megawatt year means will our me cabinet strong into strong still that's total expect around. we basically be And high-value that XX%, from customers, projects, means

density standard, So retail and in case, XX% that of XX,XXX our that's cabinets. then for combined XX% high-power so-called with

leading in leading coming is the the clouds both and for up coming expect wholesale We new some I think with can your that will players addressed players for but also round as XXX in Thank you. segment. And we and we very basically strong only megawatts also two customers. well. secure And all with retail new the leading year. cloud other well. public not public that players, the And retail customers, the Internet -- Internet And customers first this that Currently, we top quarters, as the in the in wholesale have questions. engagements also new customers segment

Yang Liu

Thank you.

Operator

Please comes your line from Elisa question the Kong. question. next Jefferies Hong Feng ask from Our

Edison Lee

from It's Edison Jefferies. Hi.

that addition in one have is, acquisition capacity seems per any assume Thank from, -- I And be. you that that based for brownfield you. brownfield location how location the Number acquisitions year in And you that I you you are be to acquisition securing cabinets the what not, you please an wrong. correct XXXX? paid two much on what the XXX% XX,XXX Beijing, organic Number growth. exact So if I the questions. X,XXX east project. of comment I'm a prospect going about growth, additional in can sort of on the to on of is two it think, me Could opportunities seeing project? in And of are please market? your yes, cabinets to is, of talk new organic of If in guidance. is

Alvin Wang

you, again. all Thank your for is this Edison, Thanks Alvin, and of questions.

a some a projects the least way And be expect it's Regarding in capacity strong is Beijing. reliance certain to approval as we call to very close acquired quite power resources because are projects, fuel two our we very projects full we located price two customers. of Beijing this -- leading Actually, these these we reasonable is with projects. East, new just, supply our so in will Beijing's expect year be ready. that to all and next attractive And downtown from sites, will two which means the available these have also it areas

for have XX,XXX your regarding question second question very we So gross ongoing. the And engagements customer demand already cabinets. strong --

may majority we the organic and acquisition, in cabinets more will the acquisition. be XX,XXX any cautiously year, next beyond in Next will if years, big big growth. very make we this for opportunities if year, which make actually, next it very up our And acquisition a we the optimistic add are

So that's Thank my question answer. my you. --

Edison Lee

I Hi, mind, want don't question about to opportunities a market. Alvin, acquisition you follow-up if with the in

So, can these these what you hurdle coming where market? evaluate share your the is actually you rate how -- where thoughts acquisition and on is when your the with would up? opportunities us And are in going valuation from opportunities you

Alvin Wang

Yes. still Actually, high lot -- them talking very merger market have acquisition hot. we and There's quite new optimistic that cautiously I this since side, I say, confidence. are is of many players, expectations opportunities, we from quite said, very the strong kind that's and at of of investors new our as a would about But have moment. this

a competitive very be consolidation. strong strong our technical acquisition. All from to us cost unique very to very build in also and capital, position customer market brand a both advantages these have We foundation of give advantage case perspective -- the

firm markets, forward. we In China we be very going -- you. -- that position have also there. Thank case, global a from have a we take that the good forward, even going will will -- very there from belief and So, consolidation market,

Edison Lee

you, Alvin. Okay. Thank

Operator

comes Our the ask Please next question. James your UBS. of Wang question from from line

James Wang

morning, Good may. questions, if management. I got two I've

existing you've meet I First just plan. demand just or regarding just you be wanted bringing to for would customers? question, three-year to capacity logos? around it Or find tenants to new whether obtained the that envisaged campus. second location mainly question is the this And new for Jiangsu the additional out existing the

and year? on plan outlook you've numbers, shed Thank three than be growth you in equity? per targets light be if raising or can share the can't what So EBITDA revenue the will whether please achieved rate without you these achieved this additional that year the you. could higher the annum And whether growth

Alvin Wang

is for you Thank the question. This Alvin.

Regarding announce a our we additional that customers. campus very very large that and to we already our in secured Jiangsu happy leading cloud public are which two have capacity, we that size secured also is that's

we that that customers will forward, that time also new forward. engagement Going definitely a and serve same will customers and up the better leading campus with add we do even strong we into at Internet financial going have customer we that institute

Sharon Liu

is well three Hi, James, answer Sharon. this growth plan, fundraising the regarding I two as your to years question will other plans. as

too think to year full early provide next guidance or year is the I year for the beyond. it

data So our things the EBITDA in the the give QX company margin. from our earnings. next can this year during outlook moment, provide March some will company you I at But for

least that know, deliver we just will As in you XX,XXX we at XXXX. announced cabinets

under be will margin EBITDA our pressure. So

policy, XX% will the EBITDA same the from enough our upward above and our to So be XXXX, capital next reserve to margin XXXX. be will financing And EBITDA XXXX year, for and improved keep plan. the the the level policies of the trend. year full expansion support of at But margin

Beijing, campus. more sides secured know reserved fundraising for the XXX the future we areas the Jiangsu surrounding we two consider and the Thank megawatts of may the resources, in all you. XXXX. we in you In after as follow-on, have So that if

James Wang

much. very Great. you Thank

Operator

question. comes Citi. line your Lai Our from next Arthur of Please question from the ask

Arthur Lai

you. And more on is, delivering a two question. Thank like very management housekeeping I result. good have Congrats One questions.

in math? So then Can we we think that we through is And peers there's bottleneck the you. of noticed some phenomenon? for this part a how power keep one quarter. cannot of will that Did this see grid mentioned And us China. second time. Thank that their exchange foreign in also should walk the be your the near-term hearing the you future, growth? the in gain Sharon supply They

Sharon Liu

Thank for you, question. your Arthur

was gain. Regarding RMB, of it the due foreign the unrealized was appreciation and mainly it to exchange it to -- is non-cash gain, but

For Alvin question your two answer. will Wang

Alvin Wang

thank question. for Yes, you Arthur, the

a our Regarding other at of some lot the COVID well-prepared. -- side, and And challenge, the delivery, that's given from especially this always we moment. challenges we have have

only I very different First, team perspective, and as we as or very have long-term strong different is but different very a mean, pipeline well. strong well the we strong for projects customers not a have locations, from have in target our pipeline. and strong the with have a partners. engineering that as for near-term suppliers And second we we partnership

deliver strong our to confidence to the We -- at acquisition. of schedule. So deliver XX,XXX beginning tough we our deliver environment. we though and we according will this now, even have Actually, XX,XXX have very cabinets, as promised that very Right we to expect including cabinets merger year.

still So you. we to strong deliver Thank lot results. but challenge, very confident going we a forward, of see remain

Arthur Lai

Thank you.

Operator

Our of Please Tina from the comes Sachs. your next Goldman line question. ask from Hou question

Tina Hou

year good morning result the Congrats and Hi, very future very guidance. strong on strong management.

obviously next my a question So new your years, XXXX. cabinet step-up is for the of adds is which from terms XX,XXX three net first in

the it seeing from or are from existing on customers how is I also, wholesale, where existing already does your or actually, is new demand do demand customers? your from you or additional supply wondering guidance just on, Yes. is customers? forecast more angle? you from I'm So on, assume? it come it -- Or how from from, your And orders this a base base Then,

So first that's my one.

Alvin Wang

Tina. Thank Alvin. --here for questions. Thank your It's it's you, you

center Shenzhen. this moment, areas more majority will that will growth the do per cities. sure, and of as of X remain and of customers for business we the Tier expect as And surrounding capacity demand for that years. And that, -- and we the And XX,XXX Beijing, our strong our also wholesale cabinets year engine at in another the we have three -- our our data we than And from coming we Means perspective, in this very confidence. city we Regarding from well. be customers. second Guangzhou, regarding our strong capacity of demand very see type total that both Shanghai kind expect that expect retail

into more the existing logos even and see from leading time, cloud customers. education, into market gain some you. emerging online share same expand Namely, especially, strong online also top our At some will players, very We like and the public some new streaming, customer we players our joint. as Thank will new base and demand also as other we well. state-owned projects them from internet

Tina Hou

you, Thank Alvin.

So, current question status. my third the second is quarter regarding

of billable wondering smaller on them So, to segment terms cabinets, I'm of in cloud. at some more as public wholesale in customers have going of of current retail I due in this your business, noticed to as China peers slowdown COVID a point? then see terms in to much due well retail are And your how your this

in segment your So, slowdown Thank have seen you also well? as retail some you.

Alvin Wang

retail So, at seems base. this strong retail have a or we moment, a very strong very operations customer it

diversified from portion very base a see there moment, very our customer And like for our sure this online see majority this the -- different that mix. product especially, of business, our but segments. pressure going or growth from strong strong we a expect still, incremental strong streaming, see will during customers we have our very some we very of lot we strong But we remain at and offerings, have part and base, weak cetera, feel from retail that's we et and we customer base. we during education, period, regarding Together, a have very some customers. customer our that segments some COVID have customers. online challenges, So, do we of we demand hotel period, represent big And revenue a forward, that very retail or that -- we from retail of like it's still very segment wholesale see confident feel a a coming demand big we and --

value contribute Thank Going -- very, to forward. forward, our retail to will we going dual-core you. see so-called which strategy, we total which big refer part we very strategy our

Tina Hou

Thank you much. very

Operator

question ask Our from Please Capital next comes question. Choi of your the from Market. John Daiwa line

John Choi

and I thank you question. have questions. morning, my taking two Good management for

So, first that plan to of understanding you better mentioned. all, have like a of I would guys your three-year

right long-term -- look now, mean, I us peers coming well. magnitude, how we pricing seeing you the if you walk see from as of, through given -- lot these So, you in kind could about city of demand X your the the suburbs that supply are Tier a

So, like in these manage how coming of and the retail, able to the pricing board? and utilization rate do how And kind the look come on Thank IDC, the think is the you can you'll of is my continues you walk that let's say, to years and related affect you. wholesale be EBITDA both us through you guys expecting on will the our that are -- that margin? given supply question to second how will -- the MRR kind

Alvin Wang

Okay.

your plan your for three-year first forward. questions. So, John, thank will you question, going gross it's regarding I address

from we given the barrier perspective. see big or environment. And have perspective, very see our very current an strong do tough segment becoming perspective players new we the the from very price competitive side, our joining a lot of IDC this for even players, and also demand perspective. But both competition that the do know all investors, from from new that investment the profitability a see we we very advantage, attractive As the game. new We from especially

more First we that and scale. will since We -- well. more customers in wholesale a of from year all, joined a retail or the efforts we to strong Samuel our retail and which next increase deliver kind which than will towards from can combined economy offerings, X,XXX even year, capability of good will perspective. next of keep going of cabinets some level well. of that We of very price to some do enjoy retail further this customer our side, have premium do that translate in a MRR get we cases, location And forward. products acquisition can our we be And that our means as the we much suppliers some will new high-value capability, team have that player. very power means put better towards maintain we kind that deal brand enjoy very which increase the means that very we capabilities customer as big from value, we strong strong into which add very We means to Thank you. figure into

Sharon Liu

Hi, John.

for And will the two, to question your deliver least before. regarding the XX,XXX utilization Regarding at question rate, trend, cabinets. EBITDA answered that as I have we

three the be as above expect utilization good rate as well data But will the utilization year, performance center ramp-up rate which both customer at demand We very in next least increased you. existing our delivery at quarter-over-quarter, demonstrates rate momentum. new and this the if you look years. the XX% compound Thank our utilization

Operator

question. question the of comes next Please from Colin from McCallum line your Credit Our ask Suisse.

Colin McCallum

congratulations there raise issue, ability question. rotation, question grow? or you the was, all potential for like on a to read do will take perspective Thank regarding have some restructuring as least some from I is every of for And what at second you difficult Alvin. I function mean might years question. And on I'd was at which second be just I comment, do say then Maybe you When or the the total strong categorizing give Vianet first mean something? mean, issues that build. had been third and That's question that us kind That's or color rotation, questions, what you program. is that to your the a of you is, my of Tsinghua this then by continue can that, it's that management there. just Unigroup. two different most know, on used, just on but answered. you be kind to people capital there you you're will think there's when the you no impact and each One requirements I that three-year a couple think numbers. a roles -- kind any of CapEx word rotation to you exactly say

like would a Thank it investors few better. bit understand a to little you. think I

Sharon Liu

Hi, Sharon. Colin, this is

CapEx, see. your would Regarding our about question I

about CapEx resources the from if XX,XXX and be we there the some year, guidance more cabinet billion acquisitions, RMBX are billion. big But CapEx the RMBX raised additional at For will each be year. each will secure least

Alvin Wang

Okay. for your question. Colin, you thank

question, second different a in demands segments. that that and customer fast-moving for of are we different that's very market from we it's very momentum your kind see Regarding sure dynamic market also

So, that our also our accordingly organization adjust and which and our keep refine means as strategy business that we from well. side,

strategy a we currently, clear so So dual-core very strategy. have called

organization better opportunities to -- IDC to according in that since that, markets, adjust have a to very seize strategy our new and also structure in the and growth forward. would approach structure forward. the have say serve program momentum, innovative the that rotation our especially then very So have going also we we -- these a strong potential is going that, growth this segments. also I we regarding we that And very and high And

to need talent capability we have join even that and which team. more kind So means the of

only program I would And one. say top than introduced well. from rotation as organization, better management perspective, we the in So finally, that two but entire so also not called minds' the

why value. you. contributed So don’t Thank our have to to talent join that team the we more

Colin McCallum

Understood. Very Thanks, everyone. clear.

Operator

CICC. last line your of comes from question. Our the Please ask [indiscernible] question from

Unidentified Analyst

level wholesale is MRR, our price the IDC the moment? comparing our technology how question what's XXX such now? And wholesale. for focus the with and give and My on Hi, for first of the service this strong contracted our our And is on side, MoU on second business. management, megawatts question our Thanks. results. Could patent more for in is, is congratulations us continued you last proportion improving at R&D on right my retail question MRR

Alvin Wang

Sorry.

question? quality So you problems. you. we your Thank some please repeat first Can have voice

Unidentified Analyst

Okay. My patent on in first this question megawatts Thanks. moment? for is the wholesale. through proportion our contracted XXX MoU at us more you give Could service

Alvin Wang

Okay. Sure.

can also engagement have pre-commitments. say this We at strong moment, demands, I so have we with commitments existing and our very new moment, -- very both as as customer customer well that, some called, some of at strong and our customers this customers

for in our our for at the that located will the the obviously very utilization we that, would have we are first the that, we well. big in cases, processing, locations customer and pre-commitments. we But we we as a high And relationship regarding different and I And markets. all premium parts, So Tier capacity by kind the scheme. do your especially provide retail And already new would level year second different many have MRR X level we market price of these in XX% say price wholesale have we different very capacity we also, covered very portion -- the services. for share And pricing commitments retail have cities, this see capacity. the do you. enjoy Thank different see rates. do first different means I strong also, a that the wholesale which end strong have we have the utilization means demand, reach question, customer because rate the year of MRR, -- around we quality By total of a also say customers the is

Operator

presenter. Please hand back company’s now proceed. to I’ll

Our from China Renaissance. next question ask from line question. Please your is Colin Liu the of

Colin Liu

which Hi. Good the confidence market new I question. for overall have three-year demonstrated chance computing. on to plan, seen morning your ask from I've your demand management. on Thanks demands. the And the strong just one cloud market the

from going quarter companies the listed next -- public the comments slowdown that public trends. growth and seen compared numbers. for growth However, cloud with exciting historical of on etcetera, those listed and profit and arguably next overall this investor, are their year the guidance terms year, And half demonstrated in mainly clear has second have cloud we public industry some very into revenue, less reported

computing, you long-term, So the particularly cloud the please? I overall see the you understand, demand see do near And just public opportunity to from and cloud. want the term market how in how

Alvin Wang

see Okay. from that's Colin, thank Even especially customers, the momentum years the very you players. -- past kinds the forward. new strong players other that cloud We do like going see in the for they growth have strong especially cars, public do a technology performance that's very public that from cloud coming we And that of etcetera. perspective. also given that demand connected and your XG questions, regarding top

you remain players. agree some So do have that expect different quarters, with strong some we But overall, perspective, that will also a rates that very some they remain see in strong very probably we I -- And we But growth. customer in confident. very base. -- we will do we growth diversified from our

we few all are optimistic very which that overall, we We means markets. remain we about don't our so -- rely limited on still -- customers,

perspective, as growth you. see only players enterprise other some the not institutions and come cloud our will we our from also leading giants, So Thank well. state-owned do from financial but also public few internet also and

Colin Liu

Thank you, Alvin. Very helpful.

Operator

presenter. would now like the today's continue. to to conference Please back hand I

Rene Jiang

Thank you for today. us joining

any free day. IR. please questions, Have have feel you a If contact follow-up good to

Operator

this and gentlemen, conference participating. Thank today's for Ladies concludes call. you

You now disconnect. may

VNET (VNET) 24 Nov 202020 Q3 Earnings call transcript