Gds Holdings Ltd. · HKEX:9698

Gds — Q1 2024 Earnings Presentation

54 slides from Gds's earnings presentation, May 22, 2024

  1. Slide 1: 1Q24 Earnings Call

    1Q24 Earnings Call 22 May 2024 NASDAQ: GDS HKEX: 9698 © GDS 2016 0

  2. Slide 2: Disclaimer

    DISCLAIMER This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such a

  3. Slide 3: Business Strategy & Performance Highlights

    Business Strategy & Performance Highlights William Huang, Chairman & CEO © GDS 2016

  4. Slide 4: 1Q24 Highlights

    1Q24 HIGHLIGHTS (1) Customer Commitments • New customer commitments (gross) of +16,808 sqm • Total area committed increased by 5.4% y/y to 668,012 sqm Customer Move-In • Additional area utilized (net) of +18,127 sqm • Total area utilized of 436,875 sqm, +16.0% y/y, and utilization rate of 74.9% Fina

  5. Slide 5: Driving Share Price Recovery

    Driving Share Price Recovery SOTP Equity Value Per GDS ADS (1) $9.30 closing price per GDS ADS on 21 May 2024 International: Based on pre-money equity value of $750 $3.86 / ADS mn implied by Series A new issue price GDS Group Excluding International: Implied EV / 1Q24 $5.44 / ADS Annualized Adjusted

  6. Slide 6: Gross Additional Area Utilized (Organic Tier 1 Only)

    Gross Additional Area Utilized (Organic Tier 1 Only) (1) By Quarter (Sqm) By Year (Sqm) China International China International 19,819 60,284 17,032 53,008 48,739 12,365 12,839 12,478 11,056 33,860 7,997 19,819 17,032 3,632 12,412 783 923 111 1Q23 2Q23 3Q23 4Q23 1Q24 FY20 FY21 FY22 FY23 1Q24 Notes:

  7. Slide 7: Net Additional Area Utilized

    Net Additional Area Utilized By Quarter (Sqm) By Year (Sqm) 1Q23 2Q23 3Q23 4Q23 1Q24 FY20 FY21 FY22 FY23 1Q24 China China Organic Tier 1 (Gross) 11,056 12,365 12,839 12,478 17,032 Organic Tier 1 (Gross) 53,008 60,284 33,860 48,739 17,032 Churn (6,488) (8,691) (4,903) (602) (6,214) Churn (1,921) (2,1

  8. Slide 8: Capacity Expansion – China

    Capacity Expansion – China Capacity In Service & Under Construction At 1Q24 Additional Capacity Brought Into Service Additional Capacity To Be Delivered 153,107 104,002 63,389 50,678 41,700 33,709 27,682 49,200 (1) 14,189 FY20 FY21 FY22 FY23 FY24 FY25 FY26 & Beyond Notes: 1. Excludes 13,188 sqm of a

  9. Slide 9: Capacity & Utilization – China

    Capacity & Utilization – China At 1Q24 We can grow utilized capacity by over 50% for existing projects… Utilizable Capacity Utilized: 403,609 sqm Inventory: 218,226 sqm 621,836 sqm Assuming 90% utilization rate Deliverable Capacity In Service: 549,352 sqm Under Construction: 141,576 sqm 690,928 sqm

  10. Slide 10: Gross Additional Area Committed (Organic Tier 1 Only)

    Gross Additional Area Committed (Organic Tier 1 Only) (1) By Quarter (Sqm) By Year (Sqm) China International (2) China International (2) 21,499 99,197 95,362 19,154 4,085 16,808 80,506 16,098 7,440 68,419 28,331 11,669 5,792 7,334 19,617 21,499 99,197 91,277 6,385 11,714 52,175 10,306 9,474 48,802 1

  11. Slide 11: Net Additional Area Committed

    Net Additional Area Committed By Quarter (Sqm) By Year (Sqm) 1Q23 2Q23 3Q23 4Q23 1Q24 FY20 FY21 FY22 FY23 1Q24 China China Organic Tier 1 (Gross) 5,284 10,306 21,499 11,714 9,474 Organic Tier 1 (Gross) 99,197 91,277 52,175 48,802 9,474 Churn (8,774) (12,048) (5,427) (1,912) (6,582) Churn (3,556) (2,

  12. Slide 12: Largest Hyperscale Orders In 1Q24

    Largest Hyperscale Orders In 1Q24 SH17 – 2,796 sqm / 4.3 MW GZ2 – 3,530 sqm / 4.6 MW NTP5 – 7,334 sqm / 18.0 MW © GDS 2016 11

  13. Slide 13: Snapshot Of International

    Snapshot Of International Current Status (IT Power Capacity In MW) Under Construction Land + Power (1) Total Secured Committed By Utilized By Market In Service Capacity Customers (2) Customers Capacity RFS Capacity RFS Hong Kong 5.4 28.5 2025 21.0 From 2H25 54.9 25.6 4.0 Singapore / Johor / Batam 69

  14. Slide 14: Financial & Operating Review

    Financial & Operating Review Dan Newman, CFO © GDS 2016

  15. Slide 15: 1Q24 P&L Analysis

    1Q24 P&L Analysis Quarterly Financial Review Rmb‘000 (Unless Indicated) 1Q23 4Q23 1Q24 Y/Y Q/Q Service Revenue 2,408,449 2,556,490 2,627,367 9.1% 2.8% Equipment Sales 509 0 0 (100.0%) Total Net Revenue 2,408,958 2,556,490 2,627,367 9.1% 2.8% Cost of Revenue (1,917,271) (2,124,173) (2,053,693) 7.1% (

  16. Slide 16: Segment Reporting

    Segment Reporting Segment Reporting To Commence In 2Q24 “GDSH” GDS Holdings Limited Series A Investors DigitalLand Holdings EDC Holding Limited Limited “GDSI” (HoldCo for China) (HoldCo for International) © GDS 2016 15

  17. Slide 17: 1Q24 Segment Financial Analysis

    1Q24 Segment Financial Analysis Quarterly Financial Segment Review Rmb‘000 (Unless Indicated) 1Q23 4Q23 1Q24 Y/Y Q/Q Total Net Revenue GDSH (1) 2,378,664 2,445,088 2,421,363 1.8% (1.0%) GDSI (2) 30,294 111,402 206,004 580.0% 84.9% Total 2,408,958 2,556,490 2,627,367 9.1% 2.8% Adjusted EBITDA GDSH 1,

  18. Slide 18: Revenue & Area Utilized By Quarter

    Revenue & Area Utilized By Quarter Total Revenue (Rmb Mn) Net Additional Area Utilized (Sqm) & MSR GDSH GDSI China International 2,556.5 2,627.4 2,472.0 2,519.0 2,409.0 20,074 18,127 32.3 49.3 111.4 206.0 15,878 30.3 7,997 3,632 6,085 6,163 19,819 783 12,246 12,077 6,085 5,380 (1,692) 1Q23 2Q23 3Q23

  19. Slide 19: Adjusted EBITDA By Quarter

    Adjusted EBITDA By Quarter GDSH (Mn) GDSI (Mn) (1) 48.6% 52.2% 47.1% 46.2% 46.9% (84.6%) (121.9%) (73.9%) 3.6% 22.7% 1,274.6 1,155.7 1,162.8 1,128.6 1,136.6 46.8 4.0 (25.6) (39.4) (36.5) 4Q23 1Q24 1Q23 2Q23 3Q23 1Q23 2Q23 3Q23 4Q23 1Q24 Notes: 1. Excluding one-time service revenue of Rmb 70.7 mn and

  20. Slide 20: Capex Paid By Year

    Capex Paid By Year GDSH (Rmb Mn) GDSI (Rmb Mn) 12,695.2 Guidance: Rmb 4.0 bn 9,234.2 9,294.1 2,827.9 1,980.8 3,497.7 Guidance: Rmb 2.5 bn 996.3 701.6 893.5 143.8 FY20 FY21 FY22 FY23 1Q24 FY20 FY21 FY22 FY23 1Q24 © GDS 2016 19

  21. Slide 21: Cash Flow

    Cash Flow GDSH GDSI Rmb Mn 1Q23 2Q23 3Q23 4Q23 1Q24 Rmb Mn 1Q23 2Q23 3Q23 4Q23 1Q24 Operating CF (85.6) 829.3 578.7 1,047.6 (96.3) Operating CF (43.6) (94.7) (68.2) (98.3) (28.7) Investment CF (1) (1,596.4) (765.0) (767.9) (368.5) (893.5) Investment CF (597.0) (641.4) (804.5) (785.0) (701.6) CF Befo

  22. Slide 22: Financing Obligations & Liquidity

    Financing Obligations & Liquidity GDS Holdings Consolidated (Rmb Mn Unless Indicated) 1Q23 2Q23 3Q23 4Q23 1Q24 Total Loan 27,957.3 28,581.9 29,134.9 29,540.2 31,111.0 Convertible Bond 10,230.5 8,597.1 8,546.3 8,434.8 8,453.4 Finance Lease 8,632.8 8,834.1 8,530.3 8,442.0 8,536.1 Gross Debt 46,820.6 4

  23. Slide 23: GDSI Series A New Issue Upsized To $672 Mn

    GDSI Series A New Issue Upsized To $672 Mn Capitalization At Closing Deal Summary § $750 mn pre-money equity valuation Form of Share Series A convertible preferred Capital shares § Implies $3.86 per GDS ADS § $659 mn of funding provided by GDSH up to 1Q24 Ownership Post GDSH 52.7% Closing Series A I

  24. Slide 24: Net Debt & Leverage

    Net Debt & Leverage GDSH GDSI (1) Pro Forma for (Rmb Mn Unless Indicated) 1Q24 Series A Pro Forma for Closing Series A (Rmb Mn Unless Indicated) 1Q24 Closing Total Gross Debt 43,950.6 43,950.6 Cash 7,238.0 9,000.2 Total Gross Debt 4,149.8 4,149.8 Shareholder Loan (Due From GDSI) 1,762.2 - Net Debt 3

  25. Slide 25: Loan Maturity Schedule

    Loan Maturity Schedule At 1Q24 (Rmb Mn) (1) Project Loan - GDSH Working Capital Convertible Bond (2) Project Loan - GDSI 6,864 7,096 6,536 5,298 4,670 3,896 2,058 4,399 4,115 1,723 1,419 3,041 7,096 2,414 45 415 330 2,996 3,240 2,947 1,669 2,476 2,465 2,421 2024 2025 2026 2027 2028 2029 2030 2031 &

  26. Slide 26: Business Outlook

    Business Outlook Confirming FY24 Guidance Unchanged Rmb Mn FY23 Actual FY24 Guidance Implied Y/Y Total Revenue 9,956.5 11,340 – 11,760 +13.9% – +18.1% Adjusted EBITDA 4,624.1 4,950 – 5,150 +7.0% – +11.4% Capex (1) 6,325.6 6,500 +2.8% Notes: 1. Refers to net cash used in investing activities, includi

  27. Slide 27: Questions & Answers

    Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016

  28. Slide 28: Appendix

    Appendix © GDS 2016

  29. Slide 29: Our Data Center Portfolio – Beijing & Shanghai Markets

    Our Data Center Portfolio – Beijing & Shanghai Markets Self-Developed Data Centers In Service & Under Construction In Tier 1 Markets (1Q24) Beijing – Tianjin – Hebei: 44 DCs (1) Yangtze River Delta: 28 DCs (1) BJ5/10/11/12/15/16/20/21/22/23 CS1/2/3 SH1/2/3/4/6/7/8/9/ BJ4/6 10/11/12/14/15/19 BJ13/14

  30. Slide 30: Our Data Center Portfolio – Greater Bay Area & Chengdu / Chongqing

    Our Data Center Portfolio – Greater Bay Area & Chengdu / Chongqing Self-Developed Data Centers In Service & Under Construction In Tier 1 Markets (1Q24) Greater Bay Area: 16 DCs (1) Chengdu – Chongqing: 3 DCs (1) SZ5 SZ8 GZ1/2/3/6 SZ4 HZ1 GZ4 SZ6/9/10 SZ11 SZ1/2/3 CD1/2 CQ1 © GDS 2016 29

  31. Slide 31: Our Data Center Portfolio – International

    Our Data Center Portfolio – International Self-Developed Data Centers In Service & Under Construction in Hong Kong & South East Asia (1Q24) Hong Kong – 2 DCs South East Asia – 6 DCs NTP1/2/3/4/5 HK1/2 NDP1 © GDS 2016 30

  32. Slide 32: Total Area Committed

    Total Area Committed By Quarter (Sqm) By Year (Sqm) China International China International 653,732 670,975 668,012 670,975 668,012 633,611 637,661 630,716 52,033 59,367 52,033 44,593 59,367 38,801 44,593 32,416 556,822 4,085 438,100 609,139 618,942 608,645 618,942 608,645 594,810 593,068 598,300 55

  33. Slide 33: Backlog For Area In Service

    Backlog For Area In Service By Quarter (Sqm) By Year (Sqm) China International China International 110,448 110,845 112,563 107,808 138,364 111 8,155 10,757 102,854 1,294 612 122,285 111 112,563 102,854 10,757 612 81,063 110,337 138,364 106,514 102,690 101,806 102,242 122,174 101,806 102,242 81,063 1

  34. Slide 34: Backlog For Area Under Construction

    Backlog For Area Under Construction By Quarter (Sqm) By Year (Sqm) China International China International 146,531 147,057 144,214 139,664 137,884 139,664 128,284 128,284 37,656 41,481 30,988 27,830 122,306 31,271 27,830 25,490 25,490 98,983 3,162 122,306 113,226 111,834 111,834 108,875 105,576 106,

  35. Slide 35: Area In Service & Commitment Rate

    Area In Service & Commitment Rate By Quarter (Sqm) By Year (Sqm) 93.9% 92.8% 92.5% 94.6% 93.8% 95.5% 92.8% 92.5% 92.4% 91.9% 572,555 583,229 572,555 583,229 515,787 554,210 487,883 518,517 531,216 24,203 33,877 33,877 1,145 24,203 13,605 923 3,112 1,145 333,853 548,352 549,352 514,642 548,352 549,35

  36. Slide 36: Area Under Construction & Pre-Commitment Rate

    Area Under Construction & Pre-Commitment Rate By Quarter (Sqm) By Year (Sqm) 74.4% 74.8% 76.1% 76.4% 74.4% 77.4% 76.4% 74.4% 71.5% 61.3% 196,858 196,702 192,713 189,585 182,746 182,746 172,537 172,537 46,819 49,962 39,469 158,035 161,515 40,434 31,144 31,144 30,961 30,961 7,061 14,501 150,039 146,74

  37. Slide 37: Total Area Utilized & Utilization Rate

    Total Area Utilized & Utilization Rate By Quarter (Sqm) By Year (Sqm) 74.9% 74.9% 71.8% 73.1% 72.6% 73.1% 70.3% 72.1% 71.9% 65.5% 436,874 418,748 436,874 13,446 33,265 418,748 370,547 398,674 1,034 376,632 382,796 13,446 33,265 319,475 5,449 1,034 1,817 923 234,731 405,302 403,609 369,513 393,225 40

  38. Slide 38: Key Operating KPIs

    Key Operating KPIs GDS Holdings Consolidated As At 1Q23 2Q23 3Q23 4Q23 1Q24 Area In Service (Sqm) 518,517 531,216 554,210 572,555 583,229 Area Under Construction (Sqm) 196,858 196,702 189,585 182,746 172,537 Total Capacity (Sqm) 715,375 727,919 743,795 755,301 755,766 Area Committed (Sqm) 487,080 49

  39. Slide 39: Key Operating KPIs – China

    Key Operating KPIs – China As At 1Q23 2Q23 3Q23 4Q23 1Q24 Area In Service (Sqm) 517,372 528,105 540,606 548,352 549,352 Area Under Construction (Sqm) 150,040 146,741 150,116 151,602 141,576 Total Capacity (Sqm) 667,412 674,846 690,722 699,953 690,928 Area Committed (Sqm) 485,935 487,492 495,914 507,

  40. Slide 40: Key Operating KPIs – International

    Key Operating KPIs – International As At 1Q23 2Q23 3Q23 4Q23 1Q24 Area In Service (Sqm) 1,145 3,112 13,605 24,203 33,877 Area Under Construction (Sqm) 46,819 49,962 39,469 31,144 30,961 Total Capacity (Sqm) 47,963 53,073 53,073 55,347 64,838 Area Committed (Sqm) 1,145 3,112 13,605 24,203 33,877 Area

  41. Slide 41: Data Center Summary By Market – China

    Data Center Summary By Market – China At 31/03/24 (Sqm, Unless Indicated) (1) Area Held for Pre- Area Under Area Pre- Total Area Commitment # of Self- Area In Service Total Capacity Future Area Committed Area Utilized Commitment Utilization Rate Construction Committed Committed Rate Market Developed

  42. Slide 42: Data Center Summary By Market – International

    Data Center Summary By Market – International At 31/03/24 (Sqm, Unless Indicated) Pre- Area Under Area Pre- Total Area Commitment Area In Service Total Capacity Area Committed Area Utilized Commitment Utilization Rate # of Self- Construction Committed Committed Rate Rate Market Developed Data Center

  43. Slide 43: Data Center Capacity By Tenure – China

    Data Center Capacity By Tenure – China At 31/03/24 (Sqm, Unless Indicated) Area In Service Area Under Construction Total Capacity Lease 305,871 39,253 345,124 Own 181,660 98,883 280,542 B-O-T 55,722 3,440 59,162 3 rd Party 6,100 - 6,100 Total 549,352 141,576 690,928 % Lease 55.7% 27.7% 50.0% % Own 3

  44. Slide 44: Data Center Capacity By Tenure – International

    Data Center Capacity By Tenure – International At 31/03/24 (Sqm, Unless Indicated) Area In Service Area Under Construction Total Capacity Lease - - - Own 32,732 30,961 63,693 B-O-T - - - 3 rd Party 1,145 - 1,145 Total 33,877 30,961 64,838 % Lease 0.0% 0.0% 0.0% % Own 96.6% 100.0% 98.2% % B-O-T 0.0%

  45. Slide 45: Top 5 Customers

    Top 5 Customers By Total Area Committed (1)(2) By Revenue (1) % Of Total Area Committed End User % Of 1Q24 Total Net Revenue End User As At 1Q24 Customer 1 25.7% Customer 1 32.1% Customer 2 14.0% Customer 2 13.8% Customer 3 8.4% Customer 3 10.6% Customer 4 4.3% Customer 4 7.4% Customer 5 3.6% Custom

  46. Slide 46: Forthcoming Contract Renewals

    Forthcoming Contract Renewals Contract Renewal Schedule Period Sqm % of Total Area Committed From April 1 to Dec 31, 2024 83,453 12.5% FY25 77,553 11.6% FY26 68,201 10.2% FY27 100,585 15.1% FY28 68,798 10.3% Thereafter 269,422 40.3% Total Area Committed At 31/03/24 668,012 100% © GDS 2016 45

  47. Slide 47: Principal Shareholders

    Principal Shareholders At 31/03/24 Pro Forma Ordinary Shares (1) Equivalent ADS Equivalent ADS % of Total ADS Change (3) William Huang (2) 53,725,848 6,715,731 6,715,731 3.6% Directors & Officers (4) 6,057,356 757,169 757,169 0.4% STT GDC 477,288,484 59,661,060 59,661,060 31.6% Ping An - 4,213,483 4

  48. Slide 48: Historical Financial Results – Statements of Operations

    Historical Financial Results Condensed Consolidated Statements Of Operations Amounts in thousands Three Months Ended Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 (1) RMB RMB RMB RMB RMB USD Net Revenue Service revenue 2,408,449 2,472,020 2,518,978 2,556,490 2,627,367 363,886 Equi

  49. Slide 49: Historical Financial Results – Balance Sheets

    Historical Financial Results Condensed Consolidated Balance Sheets A m o u n t in th o u san d s. A s o f Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 (1) RMB RMB RMB RMB RMB USD Cash 10,241,314 8,184,789 7,524,894 7 , 7 1 0 , 7 11 7,641,439 1,058,327 A cco u n ts re ce iva b le

  50. Slide 50: Historical Financial Results – Statements of Cash Flows

    Historical Financial Results Condensed Consolidated Statements Of Cash Flows Amounts in thousands Three Months Ended Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 (1) RMB RMB RMB RMB RMB USD Net cash (used in) provided by operating activities (129,180) 734,601 510,446 949,390 (124

  51. Slide 51: Reconciliation From Gross Profit To Adjusted Gross Profit

    Reconciliation From Gross Profit To Adjusted Gross Profit Adjusted Gross Profit Amounts in thousands Three Months Ended Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 RMB RMB RMB RMB RMB USD (1) Gross profit 491,687 550,997 447,449 432,317 573,674 79,453 Depreciation and amortizati

  52. Slide 52: Reconciliation From Net Loss To Adjusted EBITDA

    Reconciliation From Net Loss To Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 (1) RMB RMB RMB RMB RMB USD Net loss (474,612) (225,306) (420,831) (3,164,644) (344,931) (47,772) Net interest expenses 484,427 469

  53. Slide 53: Definition Of KPIs

    Definition Of KPIs Area In Service Entire net floor area of data centers (or phases of data centers) which are ready for service Entire net floor area of data centers (or phases of data centers) which are actively under construction and have not yet reached Area Under Construction the stage of being

  54. Slide 54: Analyst Coverage

    Analyst Coverage Broker Analyst Contact BofA Daley Li daley.li2@bofa.com CICC Minran Li minran.li@cicc.com.cn Citi Louis Tsang louis.cp.tsang@citi.com Citic Securities Junyun Chen chenjunyun@citics.com Cowen Michael Elias michael.elias@cowen.com Daiwa John Choi john.choi@hk.daiwacm.com DBS Tsz Wang

GDS Holdings — Q1 2024 Earnings Presentation on 6ix