GDS - Earnings call transcript Q3 2020

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Operator

Hello ladies and gentlemen. Thank you for standing by for GDS Holdings Limited’s Third Quarter 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. Today’s conference call is being recorded. the to turn host, now will call your over Ms. I for Head of Chen, the Investor Laura Relations company. ahead, go Please Laura.

Laura Chen

Limited. GDS’ today’s were Thank business can and call will conference you. and is today questions. Mr. website which conference Founder, at our from Holdings Huang, we earnings an our Chairman the downloaded operating the who and William be of Dan XQ company’s Hello investors.gds-services.com. everyone A IR Khoo, answer Jamie to our strategy and COO, viewed call provide welcome are will posted financial Leading will of and Ms. then review CFO, summary CEO, also Mr. services is refer via call, to performance. results. newswire issued to online. Newman, XXXX The earlier overview results presentation, GDS’ GDS and this available during

today’s under Securities provisions contain please Before will forward-looking discussion continue, Act Reform Litigation the made statements of XXXX. of note we Harbor Safe U.S. that the Private

inherent Forward-looking uncertainties. and statements risks involve

the CEO, the Chairman, to release William of a unaudited call U.S. to prospectus over Commission. As GAAP to conference filed may applicable financial assume update is discussions this Founder, unaudited William. financial different go expressed except unaudited views press and include required Mr. included Please the statements and unaudited ahead, regarding as be the obligation GDS' other and now Further results under I release will The law. comparable information the in directly non-GAAP company company’s Huang. reconciliation such, does well from contains press note non-GAAP today. Please these the turn measures. uncertainties Exchange materially information with and GAAP earnings today's the Securities any company’s and risks call as that measures. not most any GDS' forward-looking of measures also as as

William Huang

chapter we our Two call. from on all listing. Exchange, trading attract adding for over I in to shares of last shares established level you to trading And, in participation weeks proceeds, from our achieved of advantage compliment least, NASDAQ. to is $X.X Kong Hong GDS. including partners, started our terms help for William. of new today’s billion Hello joining and financing. We investors, on investors, among position. liquid government, competitive net raised business Thank market everyone. on secure leading equity our our market We strong will our pleased in the profile Kong a us a ago, high am with We not This Stock us Hong but strengthened our which and our and more Hong opening customers, strongly. perform further Meanwhile, new significantly we of Kong that to and China. for demand objectives reputation to attracted secondary base IPO more a resources, continued the say business strengthening

of added the quarter customer we During of nearly new meters XXXX, square or megawatts XX commitments. XX,XXX third

we XX%. current and grew greenfield Shenzhen. pipeline, than on was XXXX, meters months year, achieve we consisting square a XX% plus square XX,XXX edge-of-town XX% maintain sales, our annual more last X,XXX net new near XXXX, This to quarter. In to nearly us from including nine the gives land of track for meters outperformance. net year-on-year XX, of whole square add are we pending Today, year. the by our during XX around meters representing square a meters the meters of XX,XXX momentum, revenue to major order was XX, organic EBITDA campus meter organic, M&A, organic sales from for XX% Beijing margin At add, square add square clearly in XXX,XXX added including adjusted XXX,XXX did first of meter over EBITDA over from development Shanghai the targeted net meters, which secured XX,XXX new square We and at plus square beginning XXX,XXX we the square XX,XXX over our During of the acquisition of our acquisition closing. meters by remained XX,XXX in

square Looking we of forward organic in XXXX, year. the XX M&A already visibility sustainable. that sales Beijing meters to have announced potential Furthermore, the we current is next another September, we FY believe for level of with which XX,XXX of acquisition

can is consistent a of customers. Each multiple pattern often one these you represents quarter. to years. deployments phases our foundation hyperscale other us sales. These major for be of every delivered orders deployment future to see by This over top strong are As planned our a a there of orders or several from three gives in disclosures, five our

breakthroughs, Turning and which Bytedance with progress to of we developing quarter, fast lot slide last past years, have few exciting in had announced seven, PDD. growing We relationships over we a made new customers. the meaningful with

We are produce these with two to by emerge quickly. they China’s large which internet Typically, continues hyperscale sector using actively multiple names. very begin major the pursuing companies clouds. opportunities very public

they deploy clouds their own to also develop, and they private outsourced is services. we incremental center require see as However, opportunity. where This data start

multi-market service a cloud cloud. hybrid data Given have value the our extensive in we in unique and presence platform, providers proposition of centers

hybrid financial We are clouds. to institutions deploy also see starting

We over institutions. of well-established customer financial XXX have base a

As we their architecture evolve they anticipate opportunity. mainframe from significant IT server, incremental to

have stepped square the from of meters construction XX%. solidly past our rates the square meters XX,XXX have over developments. At same we up time, our pre-commitment program active quarters, five XXX,XXX remained to Over

development factor. about why success repeatedly pipeline is We have a critical secured a talked

for added add development few We XXX,XXX we fourth meters. XX,XXX of area we future over meters during is a to the will have quarter, and square that the square held we square continue quarters. total added It have secured important. our another XX,XXX to over and aggressively now meters next XXXX, XQ really over During

in a edge-of-town set in campus strategy of edge-of-town Bay Beijing Greater slide the to and we significant Area. to XX, very Turning a our Shanghai, new up success made following move the

We data design. megawatts one our months, initial center Langfang a areas center, order. is net campus a new of the customer in of XX less meters have fully local Province. We our from in have XXXX development the Guangdong near for and X of center Once key Infrastructure in yield developed, Greenfield data square XQ In commitments. XX acquired XQ we site the kilometers edge-of-town data plan New initiated the in of projects Shenzhen. will approximately square site to Huidong, area established floor according -- XXXX, the XQ the government In by It secured a from around published than Beijing, XX over initiated XXXX. in contributed recently edge identified meters XX,XXX we nine which Langfang, XX,XXX

to our with added also X the land of acquisitions Land acquisition Site Langfang and further We bank in progress. are land

have Changshu. of two edge we locations; the Shanghai, Kunshan and On

in XXXX, adjacent buildings with developable floor XQ three we total leased During, net XX,XXX of Kunshan, area a meters. square

we is The conversion. call these X, Kunshan first of which undergoing buildings,

square million. XX, terms. new XX. fully which we M&A It's in It The a with the add two meters, total cost developable and XXXX has which acquisition attractive good committed. announced a to of total development meters Today, urban deals we is of is an are in acquisition area which XQ during urban announcing call and XX,XXX including Shanghai, to to we complete Beijing. floor acquisition of RMBXXX Shanghai Turning slide X,XXX square area our cost, net complete, capacity

and the We to over financial will I this to kind adds you. key pursuing for hand in of will which locations. Dan continue Thank downtown operating opportunity presence our With that, review.

Dan Newman

from and adjusted The contribution In we Thank grew by out Beijing acquisition EBITDA you, sales effect XQ on grew by gross Xth, operating XXXX. XX, the closed FX slide XX.X%, Underlying previously service William. on XX, Starting adjusted the XX, of we underlying quarter-on-quarter. by net which our revenue equipment profit, grew June XX income where called and XX.X% XXXX, strip changes. XX.X%,

the grew our contribution from quarters, acquisition grew gross Excluding around revenue adjusted profit quarter-on-quarter. and third by and in X% our both the second around this by X% service

utilized slide Net mainly XQ additional XQ area XX, meters, in committed XXXX saw is Turning we revenue to backlog. of service the was delivery square recovery XXXX. by driven continuing growth XX,XXX during the

meter quarter. been square higher Beijing We it have slightly the RMBX,XXX XX, was expect Without would similar XX, fourth XX, levels RMBX,XXX. of per move-in at MSR month. per in

XX, extent from our small margin to remained concessions. Turning government adjusted to EBITDA XX% slide around a benefitting still and are we

we Beijing Turning to In our billion. intend and million for slide had what This for to of land. September, and X, RMBXX to paid end CapEx XXXX, deal, GIC. XQ payment the our RMBX.X Huidong for CapEx up RMBXXX billion Up to XX, another at stood including Langfang the and projects billion to managed BTS XX, the Shanghai XX Beijing that us gets consideration CapEx of acquisition the RMBX.X end expect of CapEx, we we September, guidance. cumulatively transferring new year-to-date is

transfer expect deconsolidated. reverse small project first liabilities the project, proceeds we selling way will of project XQ part During will XXXX, by of of the assets equity and the The of XX% while the a company. the the CapEx, company to be of

our billion times. balance EBITDA pro forma on on the Looking the position X.X of for Hong financing at slide cash to have cash XX, ratio sheet we debt our our net RMBXX.X and IPO, Kong proceeds of is

to times Given go our closes within couple organic acquisition four will the of in ratio XX XQ a and assuming Beijing quarters. or CapEx this on-going levels up XXXX, back around

reserve and capitalize allocate of cash plan our efficient new and ensure leverage cost investments overall to will business an those we past, the in to investments will As in then capital.

on acquisitions comments deals XX, like bank to XX, about Beijing Given the importance Beijing keep be of not and our to land will opportunities. our Shanghai attractive the and XX, sales outlook generating recent adding of short we and ability for our William’s

will changing strive approach, enhance our are debt financing we structure. While capital we our not to

existing to an project cost. longer achieve lower portion aggressive plan and our of refinance debt have tenors RMB-denominated onshore substantial a to We

billion the on with original full now adjusted an and be XXXX, and cost revenue keeping terms, our and re-financings revenues We to X% below current back-ended repayment in range year on XX.X% the adjusted total XX.X% slide XX-year unchanged. We to of revenue RMBX.XX have XX.X% guidance end with increase The the end revised EBITDA RMBX.X the RMBX.XX in imply updated of we going EBITDA. multiple Finishing of to and EBITDA to XX.X% billion all-in expect estimates to for adjusted total to on XX prime both guidance, year-on-year profiles, right in bottom the high and XX for the in of based billion rate. to raising of year-on-year our loan range are RMBX.XX billion. of now, be

now open the Our for year would billion like CapEx guidance remains Operator? call the full unchanged. questions. RMBXX of to We to

Operator

on Your the from ask of comes question queue question, Thank Instructions] first Please from Atkin line RBC. you. your [Operator Jon. Jon

line Your is open. now

Jonathan Atkin

on there interested up I'm data own commercial front, center they're Are what forward? where of that customer equipment, demand seeing you're of signing much. such you about And companies if cloud-first that till as for yours? so, a beginning affect are companies at think very you perhaps are their Thank the it to the hyperscale And side? internet have strategy, maybe going data they any on you. more and onto frequent Thank trend own does that terms building the their been -- in deals seeing their to now with wanting pursuing with is capacity ship you deals all? more

William Huang

William. is this Jon, So,

First question, self. the customer building by

see which we we -- especially mean, in far, right change changes. focus, I now, think the didn't market, Tier any a didn't I we see X any So

The is second question --

Dan Newman

data their own companies center host using clouds. private Internet companies

William Huang

significant there's company, of they complicated. lot very, changes, internet more became I see IT the can large very a their -- Yeah,

now more the grew -- when to So, they use grow-up use they and cloud like the and cloud, period during hybrid up looks they used more, their strategy.

So, we are demand very this -- for see a the that's from this as very excited portion. we future why

Jonathan Atkin

might as contribution in a kind topline think are keep mind pipeline? brief then Dan we we for terms the And drives kind you're of of What Thank pipeline? you. about you're late-stage the What terms your in what factors maybe the just of think to for And of your about for XXXX, be what as XXXX? seeing growth? EBITDA development in sales seeing one

Dan Newman

inorganically some Thank expectations next potentially, you, and set Jon. to sales comments We year. for today made initial our organically

is lags I capacity look course, year, because as there year higher pre-leased, kind what two is to said we next at of that years. coming previously. one by What can new under think as we which about sales revenue EBITDA indicator construction XX% much we at have is than this of a to the service, least and into XX% how capacity the pre-committed. Talking

means that being XXXX, service service; fourth new is coming pushed there's incremental comes capacity capacity the to if So, In significant that backlog. potential into quarter. to into deliver new

maybe service after out fourth the of new which very, the EBITDA, I first the quarter over as amount behind period it We very average that we in build net becomes new sure into capacity which X% And answer quarters the matter of a But and step coming much to quarter starts utilize to around first the factors at some further indicative discussed up delivery drives come of the then slightly year. returns. it to You'll Over addition couple square are trends, related not up. at quarter. service. But now presentation, new to see year. then per of this happening area going quantum colleagues margin, in to into Typically, there's schedule is for MSR significant see has service, doing. that out revenue. and I'm what's and this a I data through there's we we capacity I movement to will happens increase capacity into time, of going coming ask been meters a takes about it of moment. in to It centers earnings will half your decline backlog not about to think think of of And you a area seems it's before service that in me the next new coming of laid talk what XX,XXX then service call to the flow quarterly into of the continue MSR, the the the

what's received be concessions. to EBITDA we elevated it happening It's to government benefit increased due significantly slightly this fact, may In margin to still returns. contrary the year. from has

the X% year, target percentage this to we one next in increase -- another what EBITDA achieved maybe over think year. above I margin, achieve point and

energy, have also our plan we a around quite renewable data because target and communications, smart number corporate on. branding initiatives centers, think I corporate of now so around in around and ESV,

So, there that on in return investment will increased cautious I'm increase increased costs be we that. a course, because but with some due next -- margins do there expenditure, be associated from But our just plan will to year expenditure. little corporate

Jonathan Atkin

much. very you Thank

Operator

from please question, Cowen. from comes is ask line of Your now next line question the Colby in queue Synesael your Colby your open.

Colby Synesael

the of A I different you. focusing quite that just And the all where or RMBX.X expense And or market savings the that Okay, China intending achieve in what interest think then demand Kong of a guess, done? able great. may. with you're I the in and the you Hong this idea in Thank from you. listing, can into of also, bit, China new expansion? just you obviously billion variety going Thank part proceeds in on of Are be few on more proceeds might changed builds? interest if an new give going? markets your set has question, you to going mentioned given seeing as company's outside second perhaps to refis my quickly, when opportunity refinance, with you us have you process, a you total view

William Huang

Colby I question. answer the first

definitely we think RMBX.X billion net -- raise I would proceeds. are

-- this next price ambition next is -- in five think years. I our view, our our

the Hong oversee we're and more key in China, our delay markets. -- Kong, believe see more previous we -- important, also tremendous -- we in market coming think accepted get Southeast we like even new the Asia become a that think and I inside you China as four

to share the think in do X we our is as move new expansion. from Tier install do important business, we Also, Asia our in in base expand getting a during some the But still meanwhile, about Kong very, I market. in to solid China. our market our IPO, plan of -- business current have the -- plan So, more we event Southeast roadshow, solid market strengthen have very the do see Hong we talked lot to -- see we the

business plan. a So, are this those developing actively -- is we

at think why of we So, to quite the are couple moment I look to that's years. next exciting this forward

William Huang

in do you that going could see China you XXXX? we think William outside of

William Huang

we see and all the demand the evaluate to emerging Asia. too we the evaluating all the It's all say plan actually early the in Southeast -- business will develop all -- and partner

So, I is. plan think the what's maybe tell year, of we tell you exactly -- guys you in the beginning near the future, the the maybe next will

say now. to too It's we don't too you But So, early. a early to [Indiscernible] can I want I tell right plan say.

Dan Newman

say saving of initial gets we've In we portion we we're that of financing. per If when the front I'll reflected RMB that how Colby. hundred annum have hi, accounts incurred just the what our cases, isolate million interest out the we the some terms part write-off end refinancing in several doing, amortized to refinance. caching in is on Yes, it of fees

So, that significant not next able which But immediately I it become be if do think it's we've a first we later will incremental at It's next I all-in the we improvement. cost This of that past. us better interest Then of what around rate, these addition the year effective not have believe terms. financing become been a we'll improvement project continuous in financing the is in doing to on -- half on that were refinancing the an long X%. to doing apparent ago quarters, apparent but year. you give reduced it few in may

out or X% As or less. soon as we've got even in now execution around right work

Colby Synesael

you much. Thank it. Got very

Operator

Your your from from line Gokul, JPMorgan. Gokul comes the Hariharan of next question. question ask please

Gokul Hariharan

questions. thanks Hi, taking my Yes. for

an at at is other we inorganic. is centers versus data terms bigger bit little on locations, it looking older lot Second seems any developing, edge-of-town? be what be density in -- center, more are capital the about could more main we power city kind and are the bigger XXXX least seeing is we that portfolio now you a to three developing or CapEx, spent how of all, in restriction demand, of talk being the Are demand First differences a where of requirements? of other the year edge-of-town

versus be of of capital next As feel about about think talked couple how should next the think opportunities and of you've going inorganic? we the some think we couple is you portion that the to as organic Do about? that about a outlay years bigger inorganic we the years, of

Dan Newman

data First for one downtown the centers. demand is

William Huang

the answer from right? -- the direct downtown think for I demand Yeah, -- less is edge-of-town, the the

Dan Newman

central. More

William Huang

central, More strongly. still maintain very

So, I that's why back have edge-of-town back the -- -- to think the keep -- get we get center, when we when we campus. we the edge-of-town data also

is this continue. So, strategy -- this will

will -- apply center we edge data continue data We the urban still center to the scale build in in of town. campus hyperscale build will our and large town. Meanwhile, resource an

strong. very So, -- were we very, clearly demand the --

Dan Newman

Yes, just -- I was

Gokul Hariharan

Is there go -- any ahead.

Dan Newman

[Indiscernible]

Gokul Hariharan

whether I was in there's asking a all. demand, that's difference

Dan Newman

Same customers.

William Huang

Yes.

Dan Newman

then downtown architecture the hub, to typical site sites. a a connected a edge-of-town is number is Maybe which of be will

know the terms and -- really is is the it the is is edge-of-town the the I edge call we in Downtown, downtown challenging. edge. architecture, downtown of know, customer's as you So, a edge-of-town the is hub.

be customers Downtown our then we that part in we would large it supply markets. the It's We is to have edge-of-town Beijing of create so that of easy that both number time-consuming, creative we've to a the in customers. failing now resource acquisitions total the new be a of abandon because and all have us solution, and to would a done we to provide but Downtown, be and and our It and quantities Shanghai. of challenging value took

and like comment XX,XXX what us know your a we It's wasn't said meters that and that which currently versus it orders next we that is XX,XXX around have where meters, even already, So, highly have here the is next after. comes surge to I William year because square about year organic. run organic quantum William XX,XXX made the can visibility but to in to we say square kind spend, new level is question William going math lead [Indiscernible] -- rate inorganic, multi-phase is of a us out. said of And business already that certain sustainable we give year,

and done we were year The mainly some So, deal which The of into market, -- That's Shanghai been capacity Beijing point. will create the today current I give in can case is launched a number is forward deals. XX downtown. to the reached we've We XX aware driven That inorganic move definitive -- have entered we've independent think position. they stage this agreement. from are project actually aware believe each haven't part inception. number that it as the our we're been more plan, make do that of at and there meters why In a But for not already of have Shanghai, of and a project more months pipeline. a we as been goes that's to purchase always M&A XX others we yeah, and If completion, levels we more be yet. able project is there continue ahead of a where I square XX,XXX sustain by next of developers us why M&A than a acquisition, well. in that and that announcing they them. to company desire to where we

Gokul Hariharan

Got it. Understood. Thank you.

Operator

queue Goldman Tina, [Operator go please question. Hou next the ahead your in of comes from Instructions] Your Tina ask from line Sachs. and question

Tina Hou

I question, multiple Thank think, with by If been that in for William, Hi, Bytedance I time. presentation pursuing you hyperscale your you ask and it be management. your just then would one PDD. mentioned may you've opportunities

these and then -- customers? from kind contribution colors thinking could of And What five provide do or like the expected sort that? on may come So, two online? the of be these in more to what to three can also you. what decided this like see you location maybe revenue that be I'm just edge-of-town, if project is Thank built-to-suit timeline Downtown, you years,

William Huang

these start relationship two from logo quarter. with -- to last new starts number one, I we think is think our build business I that

And time, is -- think expect them. a -- future. China, resource build kind data relationship lot value our in lot quite think I our contribute will of for current those their more position, of the a value unique we strong customer given to a create which a of platform with a China, according platform I and do in center

have boasts those [Indiscernible] right. their customers demands hyperscale think I

the So, -- -- prepare already. I we will think future for get demand

So, them. I think we have business are more with will confident we

So, the talk very apparently closely. too early because it's of with to very, a are detail -- some communicated count kind to those we it's

So I think he I'm so happy near I'm very the confident in to get some future. new deal from them

Tina Hou

Thank you.

Operator

Your Frank next Frank, ask from question comes go from the Louthan James. please ahead your and Raymond line of question.

Frank Louthan

you. thank ago, demand how year might wanted more things just now that the may what and much sort little And trends a they what those know seen to particular, users versus bit. trends in dust the characterize have I a question, have that would accelerated. a you the Great, changed a in say you were about ask pace digitization general settled talking what of are how you is of that can bit, have and they now China end with

Dan Newman

isolate Frank, you me It's respond. the through difference period the since to going to when Yes, that hard asked May. COVID

not IPOs And we new technology, from to were China, required around So, everything work the and world, whole home, home. clearly from that to but adapt do home, the shift. we in structural that's from accelerated could do so just

plans. three-year our business new customers and with that is on dialogue say least -- Our based at

reflected what change. happened short-term some get doesn't And in so

I in for success, just new level market. there's And origins, but Our enterprise our for that to the a reflect particularly, some being higher it and and type smart city doesn't has this also driven think now, definitely, customers. more by and cloud of both is applications, gone opportunity XG, business say, IoT reflects

William Huang

think And Frank, early COVID, the that in fault. you and is think in -- I as is I think again, I visualization mentioned whole not we China, to is again cloud the cost the -- the logic right, the stage. think the by overwhelming the triggered Yes, trend is logic is I -- only it a

data laughing next -- In cloud so of get If five in PDD, as $XX be company. drive that [Indiscernible] And large see the they to key -- -- last segments a still lot years, the will -- the will $XX like think companies means mentioned, just still penetrated and five the internet driver in back meanwhile, demand. think China, internet penetrated new the we more company So, you than cloud the produced different I I to this like right? still major payer industry. now the are be still billion right, I became at years, different internet look a it they is billion vertical center

big I for to space the think company a still there's grow. So, internet

lot cloud data think -- a of -- co-lo, I hybrid but So, using adopted this plus demand. being of due or this architecture, cloud, just hyperscale a use is center internet companies not will and centers a trigger substitute data nowadays, lot to user of public a lot cloud demand

very I the start plus the to base. mentioned like institution architecture traditional to we transfer the cloud So, hyperscale financial I In enterprise, traditional are meanwhile, the also confident. just architecture think the base-- from they

of So, for this will create data center. demand another wave

enterprise, next will in demand. the five the be years my free -- internet, to cloud, demand view, is key or XX even a So, a driver driver in drive there key

So, that's try add why bring will such catch we and big -- right. we I more. wave, a a But little money to echo up this

we data As key years, But and will -- demand. just center implement stop potential another after trigger two Dan believe also mentioned, now. a more the application right be trigger new driver more IoT will is will XG XG

Frank Louthan

that XG? key you the you of seeing out think some What are of What are applications come right now?

William Huang

We of early I to of -- lot think will talk it's about Yes, I the think see always the lot a but the there's so it, a to lot talk a far, implement the of IoT you including traditional all to manufacturing industry. XG IoT [Indiscernible], type will traditional very the and the there, talk new I industry; the clear stuff. retail And drive to application think the they the about older stuff.

So, a I lot think but right of is this the clear now. is development talking market now, the not very about

Frank Louthan

Thank you very All right, great. much.

Operator

line your comes of question the now UBS. next line James, is James Your from from open. Wang

James Wang

Good result. morning a management. on good Congratulations

I that Dan few first mentioned in So, the experienced there power were activation remember from me in quarter result, question some supply. locations delays second is, of

on has whether have of Guangdong, So, already just as is wondering slippage wondering whether been And for and there and second more customers about location? broader then also I'm question Thank construction project, a precision Huidong in same are we more of question level a what capacity as well? the you. may And difficult parts that perhaps be with is to projects so just it this more maybe time? delivery you in resolved how mind grows, for region situation getting particular supply potential these as on color building my the other then demand over for execute also, the past hearing now. in bit -- and a the And number the there's of example, And project. that secured supply that is

Dan Newman

But matters, few the Okay, and provision to from but infrastructure happen can some actually power the thanks, I schedules months. a was may degree, by can't James. sometimes but reference delivery power when of time-to-time, depend The A construction, on control a fixed, September. months delay, particularly customers. the appeared access we and but be right. end It couple was that there's activation have supplier few the for of it large a has think, the made of I perfect, life sites. of We to small

is us small. to pretty this degree affects the which So,

second though, very comment, is Your opposite.

capacity largest stress large the we benchmark I in world; have center program tried looks against have I it amount like some the cap other think investors construction. like double challenges, they when of because people's to and lots you of we lots almost well-known under analysts it construction very is talk as factors. on global I operationally this brought underestimate to difficult, it players, the data about complicating this up, plans. -- And maybe execution of competition,

through to it's projects for around So, and center we've started three do to easy have years say increments been of XX with we it, now not more XX years; it's went under we But and less or up scaling permanently data construction. projects, XX easy it. we

quota, issues execution we with well, this means can Park. to starting right-to-use from -- down the industrial to the that That minimum. lands in together and power park; to the The the a that is actually shown acquire located handle with deal power we've the grid of think question coordinate capacity the keep I land carbon The supply. right to the to and a government's commitment provision, So, last land the actually we the Center state about Data provision with actually bought called efficiently was it's government. and an Huidong,

right, XX%, established rates commitment meanwhile, So, peak respect. it's rate Over A over like which world, that, of in pre-commitments. will we've center supply, be of location hyperscale XX% that is find very you this from has the commitment actually our XX% heard always is to to first any our build, and an level won't in the It right? Shenzhen, commitments edge queue and attracted company site close which cloud. that very to data and

quarters. two ninth we'll one customer announce So, in our or

James Wang

you. Thanks Dan. Right. Thank

Operator

from comes Edison, from queue the please line your in Jefferies. and next ahead of Edison Your question question. go ask Lee

Edison Lee

good going large on my I number is the management. internet I to much demand. Thank question. rather cloud cloud growth scale come both is guess one about comment demand the taking your for Hi, hybrid than you And that from enterprises in companies. the morning very suppose hybrid

utilization internet and also traditional from sense to your I'm guys to you wholesale breakdown So, to to know impact retail the how the does is going pricing in coming I it and your and giants just large enterprises, business and between get of that mean your go going of rate don't distinguish forward? trying to a up? that going try want of retail, proportion but demand that's the

William Huang

the -- the still adopted demand think short-term. mentioned, the cloud the more their the cloud, just I in I since will be be hybrid service providers fast But profile more demand fast. internet key So, see demand -- the will company, growth as to they -- they -- do architecture I we think the the

cloud customer, knows everybody the enterprise much [Indiscernible] do the company are now. longer terms you socially In enterprise than the And see they change we of the player the -- -- other internet as architecture. customers, of by and and they

institution. some we So, from financial customers, solid very demand the the enterprise of some large solid see --

the is still number this company, Number demand three, the trend. So number short-term, will two, this the trend. is one one, will I the in be I enterprise think the customer. think two, and Number internet number be cloud,

new I So, department, mainly we key Almost customer. the get driven -- almost customer stopped demand to XXX, back number to the in enterprise this customer customers the right? mainly years that a -- -- terms customer yesterday, you XXX four of the number, now But our have enterprise enterprise have tell by in new are We is area. we driven we can ago, have name, doubled never we new XXX right. customer means

they So few cloud. use hybrid that to enterprise, to we thing back. they traditional And think good will we the benefit still years. get to is the next get are will We the not start of continue

Dan Newman

say pretty and Yes, that's for have their companies, there internet the will of requires I which could It example, data here, requirements, on the range a But which between maybe seeing. unusual, applications, video that more clouds which what concentrations they which rely migrating range, reference to We of cloud areas, think hybrid two. use traffic you're other put in large CDN, other the use right. which case servers, then but reflects on applications business and cloud. for public they we're data private center they streaming, large there's sounds the might be that --

talk internet is opportunity with right large to the about it think I hybrid customers. reference cloud to with So,

to increase continued it expect do growth retail, that's hesitate where haven't enterprise to on so, a five basis, financial be and institution, internet. to any provided from despite of the we is proportion aim from do the We volume high but targets, very cloud what year today. or to And we I three

Edison Lee

they ask or rate two and that follow-up to Tier So, capacity utilization enterprise mode? that does to be more to go Because of Dan up how ramp you be they enterprise for are and demand? traditional cities basis, traditional retail do more core two I X is than mean your is, and happy Can you William. slowly customers Thanks recent need the customers, have they I locations? questions? want one -- Or the if Number in do mean at the edge-of-town enterprise more before? find will your this these if out expansion retail a that on likely it does Number customers impact plan? in have

Dan Newman

point. do square deployments you're to could which plus not of that, be for some order edge-of-town. a in X,XXX mix Downtown. edge-of-town. on limited case part enterprise yet the go right Yeah, size but like last are of order The size, There may see customer We meters number, mainly which, that it's our

and have But to of sales follow-on And I also require institutions So, is have think base, segment. and cover customer sales financial That's intensive. cycle does the longer lot We're XXX, potential now is built more it's years. resources increasing our the we enterprise without almost sales more XXX business downtown. a XX over than odd we up established been in that XXX customers that mix.

of customer to to there's lot If potential sales customers. sort IT and continuity new mover quality first to architecture high particularly long established disaster a there in change of you're and they business start very as the base make those providing the recovery,

Edison Lee

comments. Thanks Okay. That's for the great.

Operator

the question. from from Your of please your CICC. [Indiscernible] [Indiscernible] next ask question comes line

Unidentified Analyst

power saw our on the Thanks next for management. in -- I question one in program, supply. I Langfang. have especially year have construction we multiple

urban delay power Thanks. to also except do see they and for in ways with over year? government, how guarantee have areas other the output So, there impact the leverage? supply you And power the power edge the other town supply over

William Huang

your really unclear. was Sorry, line

Laura checking if you once -- Just with -- question more.

Laura Chen

Langfang. the on said power supply in She

William Huang

supply Power in Langfang.

Laura Chen

year? that Will our next affect delivery

William Huang

a calculated unlimited Number capacity power for power Yeah, future But first the in Okay. some is two city mover We we are Langfang the capacity. think I one. has number development. is Hong Kong.

is advantage. our think first this I mover

power our in delivery the supply years. Is will impact not I of your that area next in the question? Langfang couple think

Unidentified Analyst

Thanks.

William Huang

Okay.

Operator

[Operator John, Instructions] line from ask the please Daiwa. John of next Your question from comes your Choi question.

John Choi

-- our Management up off, to on guys question you year more like mentioned have next thanks question. on about our -- inorganic, Thank your I trend initially what the have quickly ESG share on government, are still in-town it and I into MSR? on have the Dan, terms taking you think that that is expand spend renewable you margin? on recent seems that to that coming has a XX us? more impact how developing or bit could efforts projects your related in And your any to And off? there you mature quick and impact neutral cost my been me months. because management for you. think the past I the on it able just inorganic since cities that stepping being by of any you the X% for initiative -- Is Is EBITDA about our with are plan with side? on been would carbon would mentioned prices

Dan Newman

Hi, John. Thanks for initiation.

come area say. a there's think in companies good next most we this we expertise out ESG team until targets timeline don't of talk me And -- expectations, I any where to metrics, to We've want you're publish marketing. to I the lot And our centers report are the to year giving I may very that. if GDS, irresponsibility energy. of be without to to first better. manage to able I renewable We'll or and it think use to just it proportion recent any increase enhancing because John try like sector on in this hard established our we're haven't looks ingenuity and then, -- initiate report data a requires which one do the our and power and set working any about creativity

So, take it seriously. very, very

of deals done Shanghai larger, I up to today around seems M&A those the that first stepped two said have You in second example, which the been the we've have proportion one and XXth XX announced for was annum Beijing deals XXXX XX. think, was done the acquisition, been think deal. the XX, There's we I acquisition, which XXXX, with inorganic since was some XX, deals of quarter -- per of we've

meters. was it's So, centers. three in deals we've like data XXXX, the square done that XX,XXX Beijing And like XX

XX, and In which soon quite in upscale that will to agreements also we've able close five Beijing significantly and move XX,XXX square fact, to next been that hopefully that's definitive year, we forward meters. hope announce

two around if more. doing per to still we're deals that maintain And think or hope I So, annum. not

complete. single-digit a sign of we be at of in terms of of estimated that stabilized of that do into you we XX, definitely been which our construction are M&A we've least been And then what acquired there You multiples EBITDA as complete. including where multiples, And to development. which have is we work then disclose done those two projects complete seen or still comment I there's agreement, the for factoring under what fits about to case, category. financial But been into seller we've that when opportunities, substantial stage that we've kinds acquisition pay in of projects. from more math amount data in a can Shanghai a investors. from were already before, kind Most centers, cost couple opportunity mining the there purchase have of deals and mentioned projects, competition to those

develops our when data to the my what those cap will see which we've see interested long in very do in it's REITs advanced data market which respective way will we REIT deals. kind done the center of the deals, more now and strong expectation even I'm mature to rates see interested command level going to double-digits I'm will or deals be a the rationale, be strategic centers. We below of at when multiples to are but now, course, China

John Choi

you. Thank Great.

Operator

further I'd to over company no the closing are There questions. turn for to like the now call remarks. back

Laura Chen

once for Thank you again everyone us today. joining

contact you questions, Group the information quarter. If Relations. Investor or our Piacente please See free feel Investor to Relations you next further through contact on have The website GDS’

Operator

conference Thank This you, call. this concludes presenters.

Thank now line. You you. may your disconnect

GDS Holdings Limited (GDS) 17 Nov 202020 Q3 Earnings call transcript