Earning Date, Transcript Summary & Report

Wholesale Business Growth: Our wholesale business has delivered remarkable growth while our retail business has remained stable.

Revenue and EBITDA Surpass Guidance: Net revenue and adjusted EBITDA have significantly surpassed our previous guidance.

Order Acquisition Success: Secured a total of 252.5 megawatts in orders from customers across various industries.

Wholesale Capacity Increase: Wholesale capacity in service increased significantly, rising by 127 megawatts quarter-over-quarter to 486 megawatts.

Wholesale Capacity Utilization Increase: Wholesale capacity utilized reached 353 megawatts, increasing by 73 megawatts quarter-over-quarter.

Quarterly Revenue Increase: Net revenue increased by 18.3% year-over-year to RMB2.25 billion for the fourth quarter.

Wholesale Revenue Surge: Revenue from the wholesale business reached a record high at RMB665 million for the quarter, representing a year-over-year growth rate of 125.4%.

Q4 Adjusted EBITDA Surge: Adjusted EBITDA for the fourth quarter increased by 63.8% year-over-year to RMB721.3 million.

Net Profit Turnaround: Achieved a full year net profit of RMB248 million, marking a turnaround from a net loss in 2023.

New Customer Orders Secured: Secured a 32 megawatts order from an existing Internet customer and a 1.5 megawatts order from a new customer in the intelligence driving industry.

Framework Agreement for Capacity: Signed a framework agreement with an Internet customer for 100 megawatts of capacity, including a 28 megawatts order to be delivered in 2025.

2025 Revenue Projections: Expect total net revenues for 2025 to be between RMB9.1 billion to RMB9.3 billion, representing year-over-year growth of 10% to 13%.

Adjusted EBITDA Growth: Adjusted EBITDA is expected to be in the range of RMB2.7 billion to RMB2.76 billion, representing year-over-year growth of 15% to 18%.

Projected Power Delivery Increase: Expect to deliver 400 to 450 megawatts in the next 12 months, an increase of 161% to 194% from 2024’s total deliveries.

AI Development Confidence Boost: DeepSeek’s innovative achievements have significantly bolstered confidence in domestic AI development, catalyzing a surge in inference demand.

Utilization Rate Projections: Overall utilization rates at China State Center are set to increase steadily, with the Greater Beijing region projected to reach 85% utilization by 2025.

Wholesale Revenue Surge: Wholesale revenues increased by 125.4% year-over-year to RMB665.2 million, driven by the E-JS Campus 02.

EBITDA Margin Increase: Adjusted EBITDA margin rose significantly to 32.1% compared to 23.2% in the same period of 2023.

Strong Cash Flow Performance: Maintained a strong cash flow with a net operating cash flow of RMB2.01 billion for the full year of 2024.

S&P Sustainability Recognition: Secured a spot in the S&P Global Sustainability Yearbook 2025 with a record score of 70 in S&P’s 2024 Corporate Sustainability Assessment.

Wholesale Utilization Rate Decline: Wholesale business utilization rate decreased slightly to 72.6% due to the delivery of 127 megawatts concentrated in the fourth quarter of 2024.

Utilization Rate Analysis: Despite strong revenue growth, the retail IDC business showed a relatively stable performance with a utilization rate of 63.5%, indicating potential underutilization of resources.

Increased Capital Expenditure Concerns: The company’s capital expenditure for 2025 is expected to be significantly higher, ranging from RMB10 billion to RMB12 billion, which may raise concerns about financial strain and debt management.

Debt to EBITDA Ratio: The net debt to trailing 12 months adjusted EBITDA ratio stands at 4.9, which, while considered healthy, indicates a reliance on debt for growth.

Financial Struggles and Recovery: The company faced a net loss of RMB2.6 billion in 2023 before turning profitable in 2024, highlighting previous financial struggles and volatility in performance.