GDS - Earnings call transcript Q4 2021

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Operator

Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited's Fourth Quarter and Full Year 2021 Earnings Conference Call. [Operator Instructions] After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Investor the of Head Chen, Relations Company. for Laura go ahead, Laura. Please

Laura Chen

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

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

Forward-looking inherent risks involve uncertainties. and statements

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

William Huang

of another projects give put in of of our meters project the markets acquisitions. time, in XX% delighted China In supply square for strong purchases a new by to come. two years us call. and We've guidance. same on our Indonesia. combination Hello, underpin will by Plus joining our areas, for XXX,XXX us today's XXX customer grew a We our momentum, advantage with meters, megawatt strategy, land complementary fully on revenue in report that everyone, around use progress over Tier debt this the business to new key We capacity over year-over-year, a of This in for XXXX, sustained foundations is and we line William. we financing base. and in we X year I'm competitive of resource XX%, financial or which EBITDA Singapore a our increased At Thank for scarce you an by to renewable adjusted adding campuses ensure increasingly completed XXX,XXX Malaysia basis. sound of over long-term made secured commitments, place sales and We increasingly square to in diversified billion US$X.X success. with our significant results. financed XX%, are

$XXX,XXX In CB value private million addition, we over added. raised with from issue, strategic a

we plan, are arising. operating is meters new our they challenging XQ of when efficiency, booked ever. commitments. executing Our a opportunities square than improving remain key focused market environment, we XX,XXX seizing on stronger strategic Despite and business In position 'XX, our

from of acquisitions. sales XX,XXX we square XX,XXX For hit bookings, meters the target meters XXXX, year with organic of full square and our

to achieve square we meters XXXX, commitments. organic of expect around XX,XXX new For

level there last to at overall some in is While profile, is change demand the similar demand year. a

orders two order Hyperscale was quarters, large from internet, of the during our financial won each but slide X, typically means we five past on hyperscale in and As hyperscale a cloud the 'XX. XQ one institution. shown of

Turning XX%, our for XX%, in cloud internet new XXXX slide mix, and accounting for business during whole, to with change for a large XX%. a as saw FSI we X, and Enterprise

Our across demand demonstrates franchise our the sales strength customer of spectrum. momentum sustained the

X, order capacity, of Computation obtain slides competitors. Tier together differentiates requirements to availability. renewable. This concept has our in is provide become land government's from Eastern success enables if it must quota, with and to suitable markets the power data and solution right complete difficult, latency key time. Western X the In Tier recognized for at the having increasingly access is not in us right and possible, more to satisfy Data X This X presence development center our be in industry. Customers a one the necessarily Turning low to customers the GDS to place, right the the for the up their for center to high in to able markets, data scale and the to

to three We in XXXX, limited, in forward. into In acquired or quota to new our areas mostly current total, center customers up create rate. of run years' energy entered It new asset, a we which acquired X added in meters supply. we markets. where we data our valuable value Tier around capacity - and ability square our XX for definitive our Beijing During and located development purchased the the shareholders, build equivalent serve to for sales urban our with bookings is accelerated supply underpins pipeline, all land agreements XXX,XXX is of over sustainable and at going projects, Tianjin, order sourcing and to the

While presence now data ensuring continuous purpose-built we Kong, our significant Asia. Kong, pipeline Mainland XXXX between Southeast build XXXX, in and assuring Hong In a enter of service China, our will that four Hong have we took centers also and supply. position steps to in up

of Kong to our potential X the in in have We for weeks. of commitment Singapore few very excited the I strategy. X, year. the regional commitment this have an for Hong Hong anchor for Kong second have expect I'm past by half and been

and first anchor Asia initiate the few our will orders construction months, update our thereafter. shortly Southeast We of next to projects in

as the neutrality execution XXXX carbon business. All my years not green are recognized were in we national renewable target of by Turning first business we with set few design done data things centers government achieved compared our In the in XX% that green based renewable all to their and macro centers temporary four on advanced conclude XX. environments usage, slide and the long-term of uncertainties out impact our going in have operation. Recently, for plan. XXXX. prior the months to to technologies To are energy energy and part, data our XX% the by of A the XXXX. report, achieve published ago, ESG usage, a we

We are be the in positioning long-term ourselves to winner market. data center

hand I the for will to Now, over review. operating and Dan financial

Dan Newman

we by where adjusted by you, profit the effects and equipment revenue X.X%. underlying Starting of by strip gross Thank out on service the William. FX grew changes. X%, In underlying sales, grew our slide grew contribution from EBITDA quarter-on-quarter. adjusted XQ XX, and 'XX, X.X%,

was underlying XX.X%. Our margin adjusted EBITDA

driven to square XX, revenue backlog by acquisitions. XX the is XX,XXX growth Turning during of area XXXX committed the mainly and was and slide XQ utilized meters. delivery service of Net additional closing

has level move-in at quarters. for past five Excluding similar acquisitions, the a been

affected still current in XQ the also up expect slightly of however, prior once a macro meter will MSR we line; each the of in certainty see markets. compared in believe low. we flat again to per is was the the by environment. XQ XXXX more below move-in number our quarter. square been usually of XXXX be COVID-related In as year quarter move-in first move-in March, lockdowns almost month pick pace Accordingly, the seasonal trend the in The has we with

by MSR projects further terms. will and XXXX the expect percentage and expect edge to we continue XXXX by single onwards. year to MSR For of the more The we X.X%. in digits XXXX B-O-T full XXXX in be decline declined from In mild dilution mid in town MSR but decline

underlying our Turning XXXX, for quarter. to slide was in same margin XX.X% profit the XQ XX adjusted prior gross and the as XX,

of a increase As prices, around result are XX% seeing across XX% by to we X coal Tier power thermal markets. higher tariffs

temporarily year. our a power we on of X.X% increased drag on elevated passing are this our to around are to tariffs of half margin We cost however, estimate X.X% around customers; profit that the

new to but B-O-T comprising excluding service meters during Turning XXX,XXX into XX, brought of slide developments acquisitions XXXX and square projects. organic we capacity

Over XX,XXX square around adjusted the pace reflect the environment. to our to have into we expect few current the construction service. bring of we meters quarters, Accordingly, past in XXXX

pre-commitment XX%. Our over remains rate at

quarters have current new not Assuming bookings on construction currently two a that, average, equivalent XX% capacity saleable around is we under as XX,XXX meters rate. around to yet run sales pre-committed, of square but

for accounting Turning land around is RMBX.X consisting billion our billion RMBXX.X consideration. RMBX which The CapEx organic XX, FYXX acquisition for CapEx as was and to not capitalized billion acquisition slide banking RMBX organic CapEx includes for for billion purposes. of

the balance we liability acquisitions of billion the closed around our in sheet which at year for of before a RMBX.X payable XQ of As and end. XXXX deferred end respect have on contingent consideration had

our sheet, last balance was net annualized had at ratio end and on to slide our US$X.X on XXXX our billion XX, position EBITDA quarter Looking we of RMBXX the XQ of at billion financing X.X cash debt the or adjusted times.

with interest in of XXXX. for was effective X.X% compared rate XXXX X.X% the Our whole

successfully refinancing our X extended with notes tenor raised X.X% of US$XXX we the tenor. the a successfully During XXXX we With have through debt. and XQ senior all of million convertible coupon years the issue project

repayments debt XX average around next RMBX billion the For annum. project per years

XX. and XX to Turning slide

end of at had backlog. the of XXX,XXX XXXX utilized total area meters of we meters As around square XXX,XXX around square and

revenue projects, today's all projects meters. small projects. from existing around to complete inventory, which without our initiating amount cost new deliver any almost the is out The generating billion of all to could over with we existing RMBXX we sell resources. our and the complete existing area would XXX,XXX remaining that square the finance double is the This level Assuming backlog,

to slide XX. Turning

year million margin to adjusted For million range total the the our the RMBXXXX we of million to of of RMBXXXX to million, revenue EBITDA in which of RMBXXXX a in XXXX around implies ranges. the midpoint EBITDA range RMBXXXX full be revenue at expect and XX% and

CapEx, our RMBXX to relates around We now please and RMBX regional China of billion, would to billion which out operator. RMBX.X expansion, We billion CapEx land relates to acquisitional be questions expect banking. mainland consideration to to the is billion plus call organic open RMBX like

Operator

Instructions]. [Operator you. Thank

the today Your Liu from of ahead. line go Please Morgan first Yang Stanley. is question from

Yang Liu

here. opportunity. questions the Thanks two for have I

you? share we please demand. you run The could new several in also latest reported their first incremental more thank move-in and the implication is also see China, change for to eastern the recent earnings, market long-term is see a second your for see the and data What held] internet GDS we is, released sales? [public companies government especially observation initiative. changes, new of orders We GDS Chinese side cetera? Tier What has X is on COVID new a one a strategy, demand The question the computation both et on new and west given

William Huang

is me changed. as your think you. Yang I -- This demand demand mentioned thank demand But the maintained year. on one question, it's I observation. our profile similar a just of Liu, Number level based market is the Let still last answer about as side, the

As the internet the and - large I last the will just be is profile mentioned, from demand This a in shifted, [COL] enterprise quarters shift and the institutions. mentioned of we the to financial will happening. two the lot

still has If our the demand, level you that conclusion. told a is demand demand That's mentioned but ago, of the the shifted couple we we quarters remember market already maintained.

profile just why that's changing. think I booking the new mentioned order as is So I maintaining

I tried which So mention. to facts this the is

all move-in The chain to condition move-in The much issues we about aggressive think about too too second to -- it the move-in. because macro customer there is talk it's those the COVID impact is micro like see question I to talk and supply early there. through lockdown and

bit catch now will I the is So but give conditions positive up. the they believe some too it's some improved see a once still waiting lockdown some improve, we condition demand Because will conditions. for chain to this and real, think and I supply little way outside early just are customer like

Laura Chen

question. Another

William Huang

Another question.

Laura Chen

language] [Foreign

William Huang

government Okay, Computation. question, Eastern Data the language] Western the [Foreign second

is encourages new think good one, it's still so Number this government good, good for infrastructure, it's news. the us. I news it

right, about -, is it very, means this Another so latency recognized is for read is necessary. this that product good we finally read policy government talk as low very data - parts. government the two -- the the One news GDS we is

government means that demand say, in continue low market, -- product. increase the, let's is the X this latency Tier knows So to will

the of renewable encourage understand other in the wants put energy let's say, we On source. location more, hand, the to government people renewable has - energy source a [co-data] to lot

clients. and believe with is we very So GDS our that closely the working government

capture to GDS that think has demonstrated have I the So kinds of in capability all opportunities future. we the already the

is introduced it our think and also, So more I new say of try year it's any not I another I firm]. is is will [pretty but explain it would policy are now needs and hand. we the is ago But guidance one already resource this already which time, to impact impact on GDS

of my understanding this is government the So policy.

Yang Liu

Thank you.

Operator

is you. ahead. the Thank Hou Sachs. of Please question from from The next Tina go Goldman line

Tina Hou

Thanks, two management, questions. for time. have your I

price improvement this that's continued question management notice just is regarding an is in what's can EBITDA the M&A next or when again these well as near-term so you guided coal as we see headwinds short-term year. one. XXXX, strategy three around one or second number Do let's years meters more of strategy we the XXXX of square I organic it And of Is growth uncertainties situation? from this do first resolved, that The revenue at or EBITDA say, all growth our forward maybe this terms Thanks. where our see of, sales inflation, for see wondering XX,XXX XX%, our year, year. see rate? margin stabilizing this do we electricity margin going acceleration after M&A to have our

William Huang

Okay, question. the I Number [indiscernible]. answer the X is

to this guidance set we've consistent year we is maintain the the very think of on bookings, we're square new that. or our the but confident in it's say XX,XXX of is we But I that base. is the to XX macroenvironment level is the meters, for still which This are XX let's confident base this this the around give still We're good, organic. every last and months, growth. increase not

we economy we say, upside next But let's estimate the Mr. we future believe all course, released five market the encourage the but the X. encourage give their restart three the policy confident Government companies years, again. companies Recently number of slightly, policy Minister, is plan. macroenvironment next very or Central we Vice believe think we Prime enterprise accelerate. that, will now on I will if to think, will we the see good any business market Liu internet or He, we don't and the So any - improved, This years, are don't car or companies, for government because this

So above growth XX% definitely is base. our

more Last just are M&A XXXX, tool a on mentioned, is tool question, for acquire to a The carbon focused a valuable very second with important M&A as the us. as assets, we we more quota. land use to

enough the to so Tier much strong, we tight Tier of because resource, So in because results even believe than the in main customer the demand the the will years market Tier next But qualified X resource, the is in neutral our market X to order we our before. still think policy growth. very so growth profile, is before the than resource maintain X - carbon more few get in important policy, is in the market, support

acquired more we're year, on we last will the in more focus But resource. most we have M&A on. projects valuable why now, focus and even this which asset, mature focused that's year, asset will So some on the

platforms. couple M&A, acquire we see last months, even So of it's the us are XX platforms. we a the even to quarters, in as good acquire mentioned opportunity kinds project, more to to XX open next of Even small opportunity for all the GDS months

think right pipeline we can watching market very follow our what to But is of we're this message the So right we maintains strong. give the now. kind now, I the all up, opportunity

Tina Hou

Thanks, William.

Operator

Capital Jonathan from next the Thank you. from go of RBC Markets. Please is question ahead. The Atkins line

Bora Lee

on taking for it's Bora question, Jon. Thank Lee for you the

the decision leasing actions process government you decisions? experiencing. be what interest, customer secondly, and IT specific for And customer I power are And was that curious perhaps their I'd changes is on in Singapore been Indonesia, all, impact customer wondering, of to uptake? First of the seeing and the then on having challenges any have given challenges Malaysia percentage as

William Huang

question. Dan, you answer the

Dan Newman

why answer about first first about question. the Malaysia your check the interest Southeast customer in We Asia? want hear couldn't to were William, I clearly, just don't but I question that. asked and Indonesia, the you dialogue

William Huang

I the lot [keep Frankly a a because It's is Yes, just and region's Bora, I as this this in speaking, customers very more me, better] very month of one now. excited happening lot guys reason whole active, in right momentum I guys business. here. are our they have is equity lot is in almost I the about region region. of this The private a of been Singapore because I'm met mentioned, there private they equity met think encouraging because why the [indiscernible] of very

customer, customer, this I they've increased years. this few our of installed hand, their a businesspeople next their our all other the met region in in base in region, the business On lot significantly

So more region. to be that future means the definitely this region encourage us aggressive will in in this demand

in of have to this the say will our of this customer Verbally terms some in get in we half So the of couple short demand, the I demand the year. we second term the commitment get real and in region. already results definitely short customers' a term,

Laura Chen

please you your first can question? repeat Bora,

Bora Lee

was government been and in taking your leasing what I if having seeing customers' IT process you've for on wondering decisions? customer any up so Sure, changes decision are actions impact then the

William Huang

have the IT of short if be our philosophy This even you changed at their years, logic. own logic. This customers their have term. look the last customers deployed Definitely is and own in cannot couple they our

GDS customer logic. and logic follow logic and our terms IT why their up customer business our that's their always in So criteria of first

which they still be neutral are future, separate So but remote customers already data] very they places, this market latency demand's naturally to when do, IT how the market, I think, right? of still customer the course, know Tier our a we lot, their more X we it's strong. carbon also that behavior very not I our the change very smart, believe data growth, to will coming, [core but believe So think will

[core the well. significantly hand, data] as increase On the will other

different a need is product, so respond. product different demand, to this So a different

means So - that's that understanding. my

Bora Lee

Thank you.

Operator

The go the next ahead. from question Ying Please Joel of is Nomura. line from

Joel Ying

taking Thank my questions. you for two so have I question,

margin do one you is is moment understand money lot, the we're guidance. the at future? need to in the more second as how The first would funding talking And actually a like do about what and the is this position M&A raise one I capital? so the about And you

the slightly utility growth to think for than the side side happen, else can sorry, risk major if I reason also is for is going to cost not Anything see margin rather costs. margin utility the extra revenue about weaker green compared EBITDA any energy you. And for the growth, thank this we year? potential

Dan Newman

I'll your answer Joel, Hi questions.

First on definitely general of if a enough, I'll is resources. [indiscernible]. comment, that way all, find is will obtaining a we opportunity just good financial an which most which make there's the of

project capital fund capital wealth raised STT from look ways. of you worked CPE, undertaking ventures. we've recently and also sovereign GDC. If Infrastructure we've a equity like worked from Then sovereign certain done developments. wealth and funds from and raised private what China in a variety privately fund, with in Chinese and our longstanding Sequoia shareholder, We've we at things different historically, joint with largest support We've with programmatic

with from private I those very providers think in is interest dialogues are going GDS time. on and the the all capital high working

we do to and what stopping strategic be in we doing going sense. makes So a want in to to think think is way capital I constraint us that access don't any really what

William, you Sorry, to say something? did want

William Huang

I Yes, our the color worry don't that, we in on I mid-term about capital. add some think

plan. business to We have our capital enough grow

capital, we hand, let's never that. things On say, worry some happen, the other about if good need we

capital. capability different the to type the different access of a We - the we have a to access way have

seven demonstrating We the this or the capability could raise We can we create years. are value we shareholders. of kind last really in go believe to when we our and for market have six money

we this note, easily. few ago market in still access we CB, a can private [indiscernible] So just issued weeks a a even

we our help issue. think the lot this the shareholders. access not if some do. I have create us, do won't us So an type to issue to deal It's capital for is of to big not for value the A

Dan Newman

about behind That's On customers control, customers value biggest is not which move-in. because within have is the that on The flexibility way of question their growth proposition. really [indiscernible] [indiscernible] part move-in. there. with one our we the of there's factor revenue the and work That's part driver

terms conservative move-in, is which next of that markets, is the outside taken capacity It's about over one of in is prime is assumption, to X a But move-in. of on We're a and likely I forecast few rock-solid. us make is a revenue. customers' behavior view, that's always of really it's difficult. capacity quarters backlog control. All in what's datacenter view, matter on quarterly because The some We've our very conservative absolutely just in there. hope for it move-in a the Tier our reflected the and fluctuation

in purchasing the at power lower will Eventually, revert again, power power But the mean. the year our range margin. major believe the float, our side, and On next the coal the us power The for that at as the market and elevated, the year to lower coal reflected still so will in liberalized be factor. really transition in But China liberalized improvement. I market. remain the and think we to Last view to now, this liberalized I and we will factor large also will that are all and locations, that different is time prices margin probably This of because [indiscernible] behind is a the wholesale took year to quarters [indiscernible] [indiscernible]. is least tariffs, maybe enable until many trend factor once government power tariff margin price power tariffs. the in the wider see biggest in to more for of places. these liberalizations were exercise ongoing that interruption going the [indiscernible] [indiscernible] it's an a of years a this and tariffs October, temporary it

William Huang

last color move-in, is of about at little move-in that. time the in our the on customer bit if on a years, six quite you and Number add normal track. normal look can one, I

XX mentioned, macro nothing the changed. point long-term our the digitalization, As customers, view, There’s in you of business. impact last much look that the condition general, months, definitely. environment grows, a view uncertainty too I In IT all this impacts our if just customers’ at the still or micro

is think their better. but this are our in I see. macro We will is be view, even We view In short-term. believe in will improved the issue, are our plan getting the customers We So, getting if believe conditions months. our a original business execute XX short-term we still better. things improved, move-in next hope everything will

Operator

limits, question Due ahead. is go to yourself Company. The Elias Cowen one to time please limit Michael person. line and Please the from of per from next

Michael Elias

think to my assets, a to we us different the the move Thanks some your terms but have upper businesses? you'd seen want of you with, any seeing private the I'm for just Chinese that the able leverage about in of in market. as we're I that market changes you the taking We've maximum on ways willing M&As there? you have or leverage, know you forward volatility sense put seen wondering finance datacenter to or could mentioned for be you've give valuations Thank you. bound question. Also,

Dan Newman

valuations private come [indiscernible]. have I were They would down. good might [indiscernible] the market be say ones.

very still question for other multiples. There's they but is will, that argue primarily public acquisition We're and complete our what going be private public estimated finance. these would we market The hope stabilized competition relative to the and to leverage, but all plus project expect priced looking datacenters market in sellers course, or always try that Shenzhen Tier Of X and we've they're We We the projects Beijing price definitive to going go those It There ignored, market back deals was were mid-to-high the talking with the to because multiples should multiples. about are sell quota the and selective. the buyers. for deals into single-digit datacenter and on to close always for, by of about able opportunities, very markets. areas divided clear were with up. been energy we land the surrounding EBITDA. cost enter agreements be

cash, fully and Our is to each datacenter first capitalize allocate projects allocated capital that to financed it is and to so finance as possible, early put to in in place objective debt. capital, terms as of project project then

not XX% project something if debt before, cost, that which we we the to is when quite EBITDA acceptable an level. total to think debt is The mentioned some and the later. will organic at like stabilized, I incurred into projects. is X course, of debt the of consolidated it to generated I It's finance EBITDA project debt to is before sum net But X say, translate As outcome. then EBITDA, the all debt is what target. the project, It's times

about on a end projects to course are precommitment They're very fully leverage have committed. yet the Some are EBITDA. very Then they but high be of for haven't ramping journey to debt because them are incurred been reached we XX%. Others times. a of same right there's rate a at the stabilized and have net under debt they where result, now stabilized also They EBITDA might of high construction, debt of has incurred but X around up.

place, is thing profitable. these have development, all cash-generative, of important The markets X same that in with at which are in the end stages of projects highly which various will been is Tier up precommitments de-risked and highly

decision to because EBITDA now, was fluctuate a a capital we IPO. Our does securing consolidated lot debt up and of Hong made development down strategically pipeline. net up down. allocate to the after Kong It's to It

our series to sensitive less said. of EBITDA and equity look are to somewhat what or out than whatever enterprise hope this, here, to project of it I the we just asset comfortable net projects financed adjust there's this, appears. capital were that level, the it investors reserve value you the place. higher we with is add which you somewhat would If be eye an say even back appreciate keep But and investors our then the outcome would if value that. the because if development soundly the our pipeline, times, and a in very hidden allocated goes on all X debt of to I of whole It's were but the is secured it because finance at a it's X if in to

Michael Elias

I appreciate call. you. Thank the

Operator

question from Edison Please next Lee Jefferies. The you. go from is of ahead. the line Thank

Edison Lee

Thank organic a going ask My me you, is question. the management, question key for about forward. letting growth

get You guys you remember XXX,XXX reasonable I be or going better XX,XXX slightly higher think the XXXX. previous year. were of will I square versus to number. as XXXX forward whether you. about of guided you for still previously talking a Why more want is expectation per XXX,XXX have number? meters Thank some clarity you think would XX,XXX a it around be to XX,XXX

William Huang

- is this is - and think way conservative the to a we level use market very way solid guidance. give number focused This always I a always one.

Just guidance, our still high Number is customers. customer which square This [indiscernible] year, we to the we the is more meters. one. to on also around customer. will get is selecting a two, ourselves. on This say, XX,XXX to number talk square focus XX,XXX our focus more will meters high-priced diversifying This we

more the target to -diversifying customers in them our our target, our we customer is strategy, always diversify This always consistent a try particularly environment. to customer our give profile. So, is reasonable pursue current but

Edison Lee

Will in very I What follow before? different question? wholesale versus a ask May mix up of the your XXXX? be retail from be incremental that to capacity will

William Huang

this last still they profile changed. it's strategy. We the think is also we we will a quarters, we expectation, good. customer, think now on two our bit mix Retail enterprise type [as we faster little get think and grow healthy, already pursued] I the which than focus

customers still So, increase. retail will

Edison Lee

can any target the the for that two you. thank this a mix year? or you mix Is between there share, Okay, on

William Huang

Yes, retail, the is will of at I Yes, Its we it target quarter mix think accelerate XX%. last it think represents XX%. XX%. and I it

Edison Lee

is Sorry, for just target that XXXX?

William Huang

Yes.

Edison Lee

Okay, great, you thank much, very William.

Operator

next from ahead. Thank Raymond Frank of The question James. is the you. from go Please line Louthan

Frank Louthan

pushback of so Can Great, and discuss you. seeing what inflationary power on pressuring are to you. mentioned Dan, you you you your items and forth, margins, costs are you from was customers pass thank any customers to impacting able Thank from that new builds inflationary sort easily that? margins. how and on other

Dan Newman

Power, power. I It one. power really is a temporary and It's is think, track]. [growth only

power decision to extent, the It make we in whole medium might it term, on. it's a with where customers. I and power longer customers. the contracts which very is requires to lot. generators too case, and what and The power, the we more and fluctuate billing, benefit now, which it one XX% to of different power may the if reverse, in start tariffs quite of is don't pass in there of metering is it. the course with in But XX% with we like lower power yes, you changing bundled. which year, look at call a want the it's half we look the exercise much exactly way. reconciliation see billable, XX% our well, the this with situation some we think maybe dynamic. all operationally locations. lose process of and agreements are coal mentioned our It's you and is the disrupt to the on agreeing arrangement at we bit, around tariffs. unbundled you customers, fixing with win a of because as is tariffs lot purchasing other the the with dynamic the The billing, today, revenue-generating capacity not you really term, work this a if portfolio, would some. prices actually absorb to to lose where before, To grid and some Right companies contract benefit. area We - complicated purchase is separate complex, confirmation We're requires In it We're passing a which

Frank Louthan

very you thank great, Okay, much.

Operator

you. The Thank next line Li from question from the Hongjie is ahead. CICC. go Please of

Hongjie Li

Hi, management.

the follow used about on a in up question, XXXX Just of CapEx for the M&A. XX% was quick because M&A

billion how curious will you. much opportunities? in Just to Thank seek XXXX the M&A of RMBXX CapEx be used

Dan Newman

billion. RMBX Yes, I said I around think

of to so had much consideration with always to as not we and contingent, XXXX, that it consideration milestones structure some linked and is on. end deferral as have because acquisitions the prior some acquisition we relating yet possible, the try of at to been As paid, years'

there's quarter acquisitions the had we our some first was on I did. then about contingent sheet in deferred that There balance which think billion acquisitions, RMBX from of we and this prior in did and/or particular one year. we was

we're about looking RMBX I think billion. at billion, RMBX

XXXX acquisition got it I consideration. think I billion RMBX in right for earlier,

William Huang

color some add can I on that.

I think our acquisition revenue can guidance assume any that does there. not bring revenue more on

capital opportunity. a deal. definitely, - deal to a we a to the capital options a but just reserve do There's acquisition up lot pick we not course, the a ways we of acquisition, of we big still mentioned, we the some different done. If revenue opportunity have coming, have lot access Of get assume do to from the

Hongjie Li

Okay, thank you.

Operator

the go from Thank of The Please J.P. Hung is line next from ahead. question Albert you. Morgan.

Albert Hung

my taking for much square question meter behalf thanks project XXXK the has I'm a consideration asking a of XXXK of The to already? [Guongzhou] the you. question. stake. conversion Gokul. square from acquisition minority What's How a on majority for timeline is Yes, developed Thank meter price?

Dan Newman

a that? to Shall approval, with different It’s a in real estate, it a energy the which and the separate involves performance situation number a portfolio I quota, there conditions them. because or are which of terms and each land of separate transaction, answer separate attach each is Okay. of locations, complex of

from of to for into or it think year, it take year, either sooner. move minority the a over I are that good It before roll performance satisfied to us be conditions part year, even could all may may this majority. this next

of there’s large remainder them appropriate is very billion to way collaborative valuable. tremendously the It working try to to the the related We’re It’s of very to a where a couple portfolio. with done. of a seller of deferred consideration the in very, acquisition. get – that support Part things

Operator

you. Thank

Company I'd no the back are over the to to now further for there As turn call questions, like closing remarks.

Laura Chen

you all, Thank today. again, joining once us for

free Relations. all. you Investor If through information the contact Group our please Relations website Piacente have contact or to GDS you Thank Bye. questions, Investor on further the feel

Operator

this concludes conference This call.

you. line. disconnect You now your Thank may

GDS Holdings Limited (GDS) 22 Mar 222021 Q4 Earnings call transcript