Gds Holdings Ltd. · HKEX:9698
Gds — Q2 2021 Earnings Presentation
52 slides from Gds's earnings presentation, Aug 17, 2021
Slide 1: 2Q21 Earnings Call
2Q21 Earnings Call 17 August 2021 NASDAQ: GDS HKEX: 9698 © GDS 2016 0
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
Slide 3: Business Strategy & Performance Highlights
Business Strategy & Performance Highlights William Huang, Chairman & CEO © GDS 2016
Slide 4: 2Q21 Highlights
2Q21 HIGHLIGHTS (1)(2) Sale s M ome ntum • Net additional total area committed of +44,848 sqm, or +98 MW • Total area committed increased by 41.0% y/y to 470,125 sqm Capacity Expansion • Total capacity (3) increased by 61,027 sqm to 555,172 sqm, +39.0% y/y • Land acquisitions adding +50,000 sqm deve
Slide 5: Sales Achievement
Sales Achievement Ne t Ad ditional To tal Area Committed (Sqm) – By Qu arter Ne t Ad ditional To tal Area Committed (Sqm) – By Year Organic (1) Acquisition (2) B-O-T (3) Organic (1) Acquisition (2) B-O-T (3) 136,676 46,471 44,848 14,112 37,996 27,911 19,927 30,097 19,166 14,112 81,215 81,135 23,723
Slide 6: Hyperscale Orders
Hyperscale Orders Lar gest In dividual Or ders Obtained In 2Q21 Ch angshu (CS) Campus Area IT Pow er Contract Data Center Com m itted Com m itted Com m ences (Sqm ) (MW) LF13 5,672 14.1 2H22 BJ16 7,516 15.0 2H21 CS2 11,464 33.5 2H21 © GDS 2016 5
Slide 7: Customer Franchise
Customer Franchise Cu stomer Segment Breakdown By To tal Area Co mmitted Le ading CSP / Lar ge In ternet Customer Ad d itions (1) FS I & Large Enterprises 2011 – 2016 10.2% ( 2) 2017 47,837 Sqm La rge I nternet 16.1% 2018 75,598 Sqm 718 73.7% ( 3) 346,690 Custom ers 2019 Sqm +6.7% Y/Y 2020 2021 Cl o
Slide 8: Scaling Up Supply
Scaling Up Supply Ar e a Under Co nstruction (Sqm) & Pre-Commitment Rate Ar e a In Service (Sqm) & Co mmitment Rate 62.3% 69.1% 73.9% 68.4% 57.2% 94.1% 95.8% 94.3% 94.6% 95.9% 161,611 161,287 149,983 393,885 133,208 137,070 332,534 318,272 279,618 266,260 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21
Slide 9: Resource Progress
Resource Progress Re source Pipeline 2Q21 (Sqm) (1) Co n struction Program 2Q21 (Sqm) (1) 61,349 (2) 37,300 42,683 19,166 91,140 534,451 Nusajaya Site 42,183 10,700 161,611 161,287 460,963 17,652 HK4 Macau Site BJ16 BJ15 BJ17/18/19 SH17 Phase 2 Taicang Land TJ1 LF3 CS2 and others, including SH17 Pha
Slide 10: Shanghai Market Capacity
Shanghai Market Capacity Ed g e o f Town ( Sqm) In Ser v ice 21,727 Kunshan Changshu Taicang Under Construction 26,052 Held For Future 119,200 Do w n Town (Sqm) To t al 166,979 In Ser v ice 99,705 Under Construction 15,054 Held For Future 28,822 (1) To t al 143,581 Note: 1. Only shows Held for Futur
Slide 11: Beijing Market Capacity
Beijing Market Capacity Do w n Town (Sqm) In Ser v ice 106,774 Under Construction 22,472 Ed g e o f Town ( Sqm) (1) Held For Future 14,669 In Ser v ice 77,474 To t al 143,915 Under Construction 59,981 Held For Future 133,324 To t al 270,779 Note: Edge of Town includes Zhangbei and Huailai, not shown
Slide 12: Acquisition to Fuel Capacity Growth
Acquisition to Fuel Capacity Growth BJ15/16 TJ1 SZ8 BJ17/18/19 B J 1 5 : NFA of 19, 166 sq m, L o c a ted in Tianjin, 30km away Do wn t own Sh enzhe n locatio n B J1 7 /18 in se rvice with NFA of 1 0 0 % committ ed, a nd 85. 2% f ro m B J1/2 /3/9 cl o se t o headq uarters o f ke y 3 , 7 0 0
Slide 13: Resource Additions In Hong Kong & Macau
Resource Additions In Hong Kong & Macau Hong Kong Entered into agreem ent to purc has e the s ite of HK4 with NFA of 7,200 s qm Form ing a c lus ter in Kwai Chung with 3 data c enters in c lose proximity, with aggregate NFA of ~21,000 s qm Signed a Heads of Agreem ent for purpos e-built leas e
Slide 14: First Steps In South East Asia
First Steps In South East Asia First site in Johor, Malaysia, bordering Singapore, with 54 MW of IT power capacity Demand driven by Chinese hyperscale 7 km customers Singapore Border Strong support from local government To replicate our success in China with an interconnected platform across
Slide 15: Financial & Operating Review
Financial & Operating Review Dan Newman, CFO © GDS 2016
Slide 16: 2Q21 P&L Analysis
2Q21 P&L Analysis Qu arterly F inancial Review Rmb‘000 (unless indicated) 2Q20 1Q21 2Q21 Y/Y Q/Q Service Revenue 1,334,475 1,704,492 1,862,951 39.6% 9.3% Equipment Sales 7,730 1,475 968 (87.5%) (34.4%) Total Net Rev enue 1,342,205 1,705,967 1,863,919 38.9% 9.3% Cost of Revenue (981,103) (1,309,115)
Slide 17: 2Q21 Underlying Trends
2Q21 Underlying Trends Qu arterly F inancial Review Rmb‘000 (unless indicated) 2Q20 1Q21 2Q21 Y/Y Q/Q Total Net Rev enue 1,342,205 1,705,967 1,863,919 38.9% 9.3% Less: Equipment Sales 7,730 1,475 968 (87.5%) (34.4%) Serv ice Rev enue 1,334,475 1,704,492 1,862,951 39.6% 9.3% Adj usted GP 721,000 928,
Slide 18: Revenue & Area Utilized
Revenue & Area Utilized To tal Revenue (Rmb Mn) Ne t Ad ditional Area Utilized (Sqm) (1) & M SR Organic Acquisition 29,324 29,371 1,863.9 1,706.0 1,631.6 14,988 16,589 16,461 16,152 15,122 (2) 1,524.7 1,342.2 7,816 14,336 16,589 16,461 16,152 14,249 2Q20 3Q20 4Q20 1Q21 2Q21 MSR (Rm b / Sqm / Month)
Slide 19: Underlying Adjusted GP & EBITDA & Margin
Underlying Adjusted GP & EBITDA & Margin Un d erlying Ad justed GP (Rmb Mn) & M argin Un d erlying Ad justed EBITDA (Rmb Mn) & M argin 54.0% 53.4% 53.7% 54.4% 54.0% 47.8% 47.1% 46.8% 47.9% 48.1% 1,006.8 927.8 896.7 816.5 873.3 761.4 812.2 717.2 720.5 637.5 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q2
Slide 20: Construction Program
Construction Program Se lf-Developed Data Centers De livery Schedule (Sqm) Area Under Pre-Com mit m en t RFS Date Tenure Type Construction (Sqm) Rate (%) SH17 Phase 2 3Q21 Own Convert 6,188 0.0% CS1 Phase 1 3Q21 Own Greenfie ld 6,060 100% CS2 Phase 1 3Q21 Own Greenfie ld 2,866 100% 56,969 SZ8 3Q21 L
Slide 21: Capital Expenditure
Capital Expenditure Cap ex Paid – By Qu arter (Rmb Mn) (1) Cap ex Paid – By Ye ar (Rmb Mn) (1) Organic Acquisition 9,378.0 Rm b M n 2Q20 3Q20 4Q20 1Q21 2Q21 1,357.5 7,144.9 O rg a nic (2) 1 , 0 2 1.9 2 , 1 4 1.0 2 , 3 3 2.0 2 , 2 7 4.9 1 , 8 6 8.4 5,131.2 4,733.1 3,001.6 578.6 475.1 A c q u isition
Slide 22: Financing Obligations & Liquidity
Financing Obligations & Liquidity De b t & Cash Ou tstanding Lo an Maturity Schedule As At 30/06/21 (Rmb Mn) 30/06/20 31/03/21 30/06/21 Working Capital / LQA Adjusted Rmb Mn Rmb Mn Rmb Mn EBITDA Project Loan 7,697 Total Loan 11,019.7 14,026.6 17,207.7 4.8 Convertible Bond 2,086.2 1,945.1 1,915.1 0.5
Slide 23: Debt Financing Activities
Debt Financing Activities Co mp arison o f Interest Rate M argin & Te nor Refinanced in 1H21 O r i gi nal Facil ity Re fi na nced Faci lity P r oj ect(s) Te nor Am ount Te nor Am ount Al l -I n-Cost Al l -I n-Cost (Ye a r ) (Rm b M n) (Ye a r ) (Rm b M n) S H9 / 10 6.80% 5 309 4.50% 10 291 G Z3 6.53
Slide 24: Growth Visibility
Growth Visibility F u lly Developed Capacity F u lly Utilized (95%) Pr o F orma Net Debt 161,287 555,172 (1) 10,714 26,030 57,288 527,413 198,390 393,885 15,317 271,735 A re a I n Service A re a Under T o t al Capacity A re a B a c kl og I n ve ntory T o t al Area Ne t De bt Co st T o P ro Fo rma Co
Slide 25: Business Outlook
Business Outlook Co n firming F Y21 An n ual Guidance Rmb Mn FY20 Actual FY21 Guidance Implied Y/Y Total Revenue 5,739.0 7,700 – 8,000 34.2% – 39.4% Adjusted EBITDA 2,680.6 3,660 – 3,800 36.5% – 41.8% Capex (1) 9,378.0 12,000 ~28% Note: 1. Refers to net cash used in investing activities. © GDS 2016
Slide 26: Questions & Answers
Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016
Slide 27: Appendix
Appendix © GDS 2016
Slide 28: Our Data Center Portfolio – Beijing & Shanghai Markets
Our Data Center Portfolio – Beijing & Shanghai Markets Se lf-Developed Data Centers In Service & Un der Co nstruction 2Q21 (1) Greater Beijing – 34 DCs (2) Greater Shanghai – 24 DCs CS1/2 BJ5/10/11/12/15/16 SH1/2/3/4/6/7/8/9/ 88 10/11/12/14/15/19 BJ4/6 54 13 50 33 BJ13 27 27 SH5 61 BJ1/2/3/9 SH16/17
Slide 29: Our Data Center Portfolio – Greater Bay Area & Chengdu / Chongqing
Our Data Center Portfolio – Greater Bay Area & Chengdu / Chongqing Se lf-Developed Data Centers In Service & Un der Co nstruction In Tier 1 M arkets (1) Great Bay Area – 14 DCs Chengdu / Chongqing – 3 DCs HZ1 SZ4 GZ1/2/3/6 SZ5 65 57 45 38 GZ4 SZ6 SZ8 17 25 HK1 SZ1/2/3 CD1/2 CQ1 Note: 1. Distance in
Slide 30: Key Operating KPIs
Key Operating KPIs Last 8 Qu arters As At 3Q19 4Q19 1Q20 2Q20 3Q20 (1) 4Q20 1Q21 2Q21 Area In Service (Sqm) 198,097 225,963 229,986 266,260 279,618 318,272 332,534 393,885 Area Under Construction (Sqm) 84,765 89,834 110,706 133,208 149,983 137,070 161,611 161,287 Total Capacity (Sqm) 282,862 315,797
Slide 31: Data Center Summary By Market
Data Center Summary By Market As At 30/06/21 (Sqm, Un less Indicated) (1) Area Held for Pre- Area In Area Under Total Area Area Pre- Total Area Area Commitment Utilizatio Future Commitment # of Self- Service Construction Capacity Committed Committed Committed Utilized Rate n Rate Development Rate Ma
Slide 32: Self-Developed Data Centers In Service – Greater Beijing
Self-Developed Data Centers In Service – Greater Beijing As At 30/06/21 (Sqm, Un less Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate BJ1 2H15 Convert Lease 2,435 2,429 99.8% 2,346 96.4% BJ2 2H17 Convert Lease 5,819 5
Slide 33: Self-Developed Data Centers In Service – Greater Shanghai
Self-Developed Data Centers In Service – Greater Shanghai As At 30/06/21 (Sqm, Un less Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate SH1 2H11 Purpose-Built Lease 6,432 6,275 97.6% 6,093 94.7% SH2 2H15 Purpose-Built
Slide 34: Self-Developed Data Centers In Service – Greater Bay Area
Self-Developed Data Centers In Service – Greater Bay Area As At 30/06/21 (Sqm, Un less Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate SZ1 2H14 Conv ert Lease 4,286 4,233 98.8% 4,226 98.6% SZ2 1H16 Conv ert Lease 4,30
Slide 35: Self-Developed Data Center In Service – Chengdu / Chongqing
Self-Developed Data Center In Service – Chengdu / Chongqing As At 30/06/21 (Sqm, Un less Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate CD1 1H17 Purpose-Built Own 6,262 6,262 100% 5,020 80.2% CD2 Phase 1 2H18 Purpose
Slide 36: Self-Developed Data Centers Under Construction
Self-Developed Data Centers Under Construction As At 30/06/21 (Sqm, Un less Indicated) Area Under Market Data Center Ready For Service Type Tenure Area Pre-Committed Pre-Commitment Rate Construction BJ13 1H22 Purpose-Built Own 13,903 5,465 39.3% BJ16 2H21 Convert Lease 8,569 7,516 87.7% LF4 Phase 1
Slide 37: Self-Developed Data Center Capacity – Lease Vs Own
Self-Developed Data Center Capacity – Lease Vs Own As At 30/06/21 He ld For Fu ture To t al Developed & Sqm Ar ea In Service Ar ea Under Construction De velopment De velopab le Capacity L e ase 288,624 43,927 42,203 374,754 Ow n 64,315 117,360 492,248 673,923 B- O- T 32,364 0 0 32,364 3 rd Par ty 8,
Slide 38: Stabilized Vs. Ramping-Up Data Centers
Stabilized Vs. Ramping-Up Data Centers Br eakdown Of Area In Service As At 2Q21 Stabilized Data Centers Ram ping-Up Data Centers Area In Service (Sqm) Commitment Rate Utilization Rate Area In Service Area In Service (Sqm) Commitment Rate Utilization Rate SH1 6,432 97.6% 94.7% SH6 7,620 88.9% 61.5% S
Slide 39: Backlog & Move-In Analysis
Backlog & Move-In Analysis Backlog Bu ild-Up F or 2Q21 (Sqm) Ar e a Utilized & To tal Area Co mmitted (Sqm) Net Additional Total Area Committed Area Utilized Total Area Committed Net Additional Area Utilized 470,125 44,848 29,371 425,277 401,554 198,390 371,456 182,913 333,461 271,735 242,364 209,75
Slide 40: Build-Operate-Transfer (B-O-T) Joint Venture Data Centers
Build-Operate-Transfer (“B-O-T”) Joint Venture Data Centers Note: T h ese pr ojects are n ot in cluded in ou r KPIs, pen ding final agreement on joint venture ar rangements. As At 2Q21 Num ber of Data Centers S qm A rea Under Construction 1 3, 889 A rea In S ervice 8 31, 134 A rea Ut ilized -- 9, 91
Slide 41: Top Customers
Top 5 Customers By To tal Ar ea Co mmitted (1)(2) By Re venue (1) % Of Total Area Num ber of Data End User End User % Of 2Q21 Total Net Revenue Com m itted As At 2Q21 Centers (3) Customer 1 35.7% 35 Customer 1 23.2% Customer 2 19.0% 19 Customer 2 23.1% Customer 3 5.6% 5 Customer 3 8.1% Customer 4 5.
Slide 42: Forthcoming Contract Renewals
Forthcoming Contract Renewals Co n tract Renewal Schedule (1) Period Sqm % of Total Area Com m itted 2H21 31,481 6.7% FY22 27,850 5.9% FY23 39,727 8.5% FY24 52,089 11.1% Thereafter 318,978 67.8% Total Area Com m itted As At 30/06/21 470,125 100% Note: 1. Exclude B-O-T joint venture data centers. © G
Slide 43: VIE Structure
VIE Structure GDS Holdings Hong Kong Holding Companies Offshore Onshore Data Center Asset Companies GDS Investment Company Hold ~90% of Consolidated Assets Contractual Agreement GDS VIE Entities Hold ~10% of Consolidated Assets Pay service fee to Asset Co net of SG&A costs Hold IDC licenses an
Slide 44: Principal Shareholders
Principal Shareholders As At 30/06/21 Pro Form a Ordinary Shares (1) Equivale nt ADS Equivale nt ADS % of Total ADS Change (3) William Huang (2) 83,067,040 10,383,380 10,383,380 5.6% Directors & Officers 16,235,551 2,029,444 2,029,444 1.1% STT GDC 477,288,484 59,661,060 59,661,060 31.9% Ping An 0 0
Slide 45: Working Capital Management
Working Capital Management Acco u nts Receivable Tu rnover Days (# o f Days) (1) Days Payable Outstanding (DPO) (2) 94 88 88 87 # o f Da ys 2Q20 3Q20 4Q20 1Q21 2Q21 84 D P O – Ope x 11 4 107 88 85 94 D P O – Ca pex 106 136 139 185 11 6 To t a l DPO 108 129 127 155 111 Tot al DPO (Excl. Acq uisit ion
Slide 46: Historical Financial Results – Statements of Operations
Historical Financial Results Co n densed Consolidated Statements o f Operations Amounts in thousands Three Months Ended Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 RMB RMB RMB RMB RMB USD Net Revenue Service revenue 1,334,475 1,522,353 1,627,451 1,704,492 1,862,951 288,534 Equip
Slide 47: Historical Financial Results – Balance Sheets
Historical Financial Results Co n densed Consolidated Balance Sheets Amounts in thousands. As of Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2020 Jun 30, 2021 RMB RMB RMB RMB RMB USD Cash 7,742,082 6,004,537 16,259,457 14,914,125 12,326,895 1,909,193 Accounts receivable, net of allowance for doub
Slide 48: Historical Financial Results – Cash Flows
Historical Financial Results Co n densed Co nsolidated Statements o f Cash F lows Amounts in thousands Three Months Ended Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 RMB RMB RMB RMB RMB USD Net cash provided by (used in) operating activities 186,037 (7,943) 312,592 (24,197) 363,
Slide 49: Reconciliation from Gross Profit to Adjusted GP
Reconciliation from Gross Profit to Adjusted GP Ad ju sted GP Amounts in thousands Three Months Ended Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 RMB RMB RMB RMB RMB USD Gross profit 361,102 408,965 430,046 396,852 439,869 68,127 Depreciation and amortization 341,618 378,291 409
Slide 50: Reconciliation from Net Loss to Adjusted EBITDA
Reconciliation from Net Loss to Adjusted EBITDA Ad ju sted EBITDA Amounts in thousands Three Months Ended Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 RMB RMB RMB RMB RMB USD Net loss (101,047) (204,635) (271,501) (278,737) (298,463) (46,226) Net interest expenses 300,649 339,245
Slide 51: Definition of KPIs
Definition of KPIs Area In Serv ice Entire net f loor area of data centers (or phases of data centers) which are ready f or serv ice Entire net f loor area of data centers (or phases of data centers) which are activ ely under construction and hav e not y et reached the stage Area Under Construction
Slide 52: Analyst Coverage
Analyst Coverage Broker Analyst Contact BofA Paul Dewberry paul.dewberry@baml.com BOCI Michael Meng michael.meng@bocigroup.com Berenberg Nate Crossett nate.crosssett@berenberg-us.com CICC Kai Qian kai.qian@cicc.cn Citi Arthur Lai arthur.y.lai@citi.com Citic Securities Yingbo Xu xuyb@citics.com CMB I