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spk08: Good morning and good evening, ladies and gentlemen. Thank you and welcome to Chin Data Group Holdings Limited fourth quarter and full year 2020 earnings conference call. We'll be holding our question and answer session after management's feedback remarks. Please note today's event is being recorded. I will now turn the call over to the first speaker today, Ms. Joy Zhang, Investor Relations Director of Chin Data Group. Please go ahead, ma'am.
spk04: Thank you. Hello, everyone. Welcome to Chin Data's 2020 fourth quarter and full year earnings conference call. I'm Joy, head of the investor relations of our group. With us today are Mr. Alex Ju, our CEO, Mr. Nick Wan, our CFO, and Ms. Zoe Zhuang, our finance vice president. On behalf of our CEO, Nick will take you through the quarterly review of our operation performance, and Zoe will present our financial results. Alex, Nick, and Zoe will be here to answer your questions afterwards. Now I'll quickly go over the safe hopper. Some of the statements that we make today regarding our business, operations, and financial performance may be considered forward-looking, and such statements involve a number of risks and uncertainty. that could cause actual results to differ materially. For more information, please refer to the risk factors discussing our most recent Form F1 filed with the SEC and in our Form 6K for the quarter ended December 30, 2020, which has been filed with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our earnings press release, which is distributed and available to the public through our investor relations website located at investor.ChainDataGroup.com. Without further ado, I'll now turn over the call to Nick. Nick, please.
spk06: Thank you, Joy. Hello, everyone. Now, let's first take a look at some highlights for fourth quarter and full year 2020. We delivered solid results once again in the period as we continue to increase capacity, grow revenue, and control cost effectively. For capacity, we increased our in-service data centers to 13 at the end of 2020 from 11 at the end of third quarter. Grew our total IT capacity in service to 291 megawatts. from 248 megawatts during comparable periods and maintain client commitment of such capacity at 87%, thus demonstrating our ability to capitalize on robust market demand. Throughout China, India, and Malaysia, we had a total of eight data centers under construction in Q4. for a total IT capacity of 198 megawatts, with 74% of its capacity already committed to coins. As we mentioned on the previous quarter, we measure our business scale in terms of IT megawatts because we believe we are in the business of converting electric power into computing power. By the end of 2020, our full year power consumption had increased to 1,071 million kilowatt hours from 720 million kilowatt hours during the first three quarters of 2020, demonstrating our continuous improvement in capacity utilization and business roles. Meanwhile, we achieved an annual average PUE of 1.22 in 2020. Once again, validating our power utilization efficiency and commitment towards becoming the greenest data center in China. Additionally, we have continued to place a high priority on advancing our in-house design and R&D capabilities as an effective means to enhance our data center operating efficiency. By the end of 2020, we extended our reservoir of approved and pending patents to 216 from 194 at the end of third quarter. Owing to our technology powers and effective cost management practice, we maintain our average construction cost for all inserted data centers at less than US dollar 3 million per megawatts during the quarter, which is well below industry average. Our financials are also reflecting the progress that we're making in operation. Our full year revenue is recorded at 1.83 billion RMB, exceeding the guidance range that we provided by 41.4 million RMB. For the fourth quarter of 2020, our adjusted net income reached a historical high, 58 million RMB, and has stayed positive for six consecutive quarters. Slide five. During the fourth quarter of 2020, we made significant inroads in our overseas expansion. In Malaysia, we added more than 40 megawatts of indication of interest capacity from an AI digital leader, which prompted us to start the construction of our N106 facility. In addition, we converted some of our previously announced IOI capacity into a contracted capacity with a leading international cloud service provider and added 16.35 megawatts. In India, we added 10 megawatts of newly constructed capacity by extending our collaboration with an existing client, which is another leading international cloud service provider. Our construction of BBY01 facility is making substantial progress despite the lingering epidemic impact in Mumbai. Back in China, we added 43 megawatts of new in-service capacity to our CN11A and CP01 facilities and an additional 13 megawatts of new capacity under construction through our CN13 facility. Furthermore, we received 19 megawatts of additional IOI capacity from an existing anchor tenant who is a leading international cloud service provider and a new customer B, a high-quality international cloud service provider. Next slide, asset overview. The asset overview table here demonstrates the solid progress we made in terms of a capacity expansion during the fourth quarter of 2020. We completed construction of two self-owned high bar scale data centers in China and put them in service. To satisfy rising market demand, we also broke ground on the construction of one new self-owned data center in China during the fourth quarter. In terms of capacity addition, the two newly delivered data centers in China, mainly CN11A and CEE01, added a total of 43 megawatts IT capacity to our larger RVC network, with the in-service capacity of CN11A being 100% contracted. For the data center, we broke ground for construction in China during the fourth quarter, namely CN-13. It is the facility for the aforementioned high-quality international cloud service provider, located close to our CE-01 Nantong Campus data center. Our CE-02 data center will support us in meeting the substantial demand from our existing customers in eastern China. While we expanded our capacity, we further improved our data center's utilization rate. The utilized IT capacity of our in-service data centers grew from 175 megawatts by the end of third quarter to 221 megawatts by the end of fourth quarter. As we put more data centers into service and improved their utilization rate in a methodical manner, we should be able to generate additional revenue accordingly. Next slide. Company strategy. In the fourth quarter, we continue to advance our corporate capability build-up in three core areas. Data center development and construction, integrated energy solutions, and equipment manufacturing. We have established three subgroups, industry, Chin Power and Chin Idea for the further development of our capabilities, and we aim to provide tech leaders and the industry with more valuable next generation computing infrastructure solutions. Next slide. Chin industry is committed to becoming the leading partner for our customers. in the development and construction of next-generation computing infrastructure. Leveraging our full-stack development and construction capabilities, as well as our domain expertise, we aim to make sure that the real demand of customers is being met. And to leverage our expertise to transform the current industry value chain, and provide digital leaders and users with infrastructure products of true universality, reliability, security, and economics. It is one of the most differentiated visibility for Chin Beta Group, and the numbers can show that. Chin Beta designed 453 megabytes for the group by 2020. and 64% of group's total stable construction expenditure were capped within the group due to industry. Those are the contributing factors of our much lower than industry average capex number, less than $3 million per megawatts. Next stage. Chin Power is committed to becoming the driving force for ushering China's data center industry into the zero-carbon emission era. Assuming such role, Chin Power is dedicated to simultaneously promoting the development of new digital infrastructure and large-scale consumption of renewable energy to accelerate energy revolution in the Internet sector so as to create a new scenario of digital economy. We recently released our 2030 carbon neutral roadmap for which we will give more details in the ESG session. In terms of the development of renewable energy, we have achieved a meaningful program in our 150 megawatt solar panel generation project as we received approval for development from the government. We expect this project to become the first self-generation, self-consumption renewable energy power plant among computing infrastructure developers and operators from China. We have also signed an agreement to develop alternative energy with an expected installed capacity of 1,300 megawatts in the 40-degree north latitude region. where there is the highest concentration of renewable energy resources in the world. This agreement will also help us to implement our 2030 carbon neutral plan. In 2020, we continue to increase our utilization of renewable energy across our data centers and achieve a 51% renewable energy usage ratio for our data center operations. In addition, we continue to focus our R&D investment on energy utilization to develop a highly reliable and scalable power capacity to ensure the uninterrupted availability of our data centers. Recently, we put our Lingqiu data center into operation, thus establishing the first precedence in China for equipping a data center campus with a 110 kilovoltage square cabin electrical substation. In addition, by raising the load rate of power transmission lines from 30% to 66.7%, the LeanTool project improved our data center's energy efficiency greatly. Next slide. Chain Idea is committed to promoting white labeling of key digital infrastructure equipment, facilitating product iteration for hyperscale data center campuses, building the world's leading hyperscale data center manufacturing platform for accessory equipment, specialty equipment, integrated assembly lines, and other high end equipment, and ultimately becoming a trusted provider of data center solutions. Chin Idea will leverage talented core digital infrastructure system to enhance industry value chain synergy to preserve the core technologies for the long-term development of the industry and to improve industry chain independence and stability. In the fourth quarter, Chin Idea unveiled the grand opening of its high-end equipment manufacturing campus. Next slide. ESG. Over the years, our balanced and sustainable approach to business development and operations has served as the foundation of our success. Under environmental and sustainability plans, we remain committed to optimizing our power utilization mix and extending our use of renewable energy across all of our data centers. We are a company of May 1st, the first physical economy company in China to announce a 100% renewable energy goal, and the first company in China's internet technology industry to release a 100% carbon neutral roadmap. In 2020, we ranked as one of the top internet technology companies in China in terms of the renewable energy solution performance. Looking back, We started to optimize and upgrade our computing system to improve our overall energy efficiency in the year 2015. Starting from 2016, we have taken source of energy as a key factor for site selection, while prioritizing clean energy utilization for our data centers in operation. We first set forth our long-term commitment to 100% renewable energy consumption and further optimized it in the year 2019. For the past year of 2020, we continued to build up our capability as we upgraded our renewable energy business unit into a new subgroup, Chain Power. Going forward, we are planning for investment in renewable energy, recycling of heat generated by data center, promoting carbon emissions in surrounding communities, and ultimately to have all of our hyperscale data center being operated using 100% integrated renewable energy solutions and to invest no less than 2 gigawatts in store capacity of renewable power by 2030. Financial overview. I will now turn over to Zoe, our VP of Finance. to go over our key financial results for the fourth quarter of 2020. Being mindful of time, I encourage our listeners to also refer to our earnings press release, which is posted online and includes our quarterly results along with other additional details. Please note that all numbers today are in RMB terms and that all comparisons are on a year-over-year basis. unless otherwise noted.
spk05: In fourth quarter, our total revenue grew by 18.3% to RMB 553 million from RMB 467.5 million in third quarter. was primarily driven by the robust growth of utilized IT megawatts capacity in fourth quarter to 201 megawatts from 174.8 megawatts in Q3, which includes organic growth of 34 megawatts from previous in-service data centers and organic growth of 12 megawatts from new in-service data centers. On a year-on-year basis, total revenue in Q4 grew by 59.2%. Moving on to slide 15 on our expense and margin trends. In line with our business expansion and revenue growth, total cost of revenues in the fourth quarter increased by 17.9% quarter over quarter. This increase was attributable to a quarter over quarter increase of 15.3 in our utility costs and a quarter over quarter increase of 43.9% in our maintenance and other costs. As demonstrated on slide 16, our adjusted EBITDA in the fourth quarter was RMB 239.4 million, representing a year over year increase of 72%. Our adjusted net income in the fourth quarter was RMB 58 million compared to RMB 1.4 million in the same period of last year and RMB 48.2 million in the third quarter of 2020. Over the long term, we are further to increase our operational and cost efficiencies to improve our operating structure and support our continued profitable growth. Turning to slide 17, in 2020, CapEx in Q4 was RMB $968.9 million, and the total CapEx in the full year of 2020 was RMB $2.77 billion, which are mainly used for land acquisition, construction, and equipment purchase. As we continue to actively manage our capital efficiency and reduce our delivery time, we expect to improve our construction cost as well as our overall CapEx structure. On slide 18, both bar charts demonstrate that our financial capacity can sustain future organic expansion of IDC business and support required capital expenditures. In 2020, the total cash generated from operations was RMB 664.9 million. Total cash flow from equity financing was RMB 6.68 billion. And the total project financing was RMB 1.51 billion. Moving on to our guidance on slide 17. As we look ahead to the full year of 2021, we expect our total revenues to be in the range of RMB 2.7 billion to RMB 2.78 billion, and adjusted EBITDA to be in the range of RMB 1.28 billion to RMB 1.33 billion. This forecast reflects our current and the preliminary views on the market and operational conditions, which are subject to change. This concludes our prepared remarks for today. Operator, we are now ready to take questions.
spk08: We will now begin the question and answer session. Please note that for Chinese speaking participants, we can do the Q&A in Mandarin and we will provide the presentation. Please ask your question in Mandarin followed by English. So if you wish to ask a question, please press star followed by 1 on your telephone and wait for a name to be announced. If you wish to cancel your request, please press the power or hash key. Once again, to ask a question is star 1 on your telephone. Our first question is coming from Yang Liu from Morgan Stanley. Please ask a question.
spk09: Thanks for the opportunity. Congratulations on the strong results. First question is, I noticed that Chineda onboard a new cloud customer, and we find there will be a lease project on the asset side. Could you please share more detail on the business model and the contract term RIC profile for this new customer? And the second question is, 2021 EBITDA margin guidance implies a small year-on-year increase, still lower than the level that the company achieved in the third quarter last year. It looks like the cost will increase very fast. Could you please share more on what will increase in terms of SG&A or cost of goods sold, etc.? ? The last question, the housekeeping one, is what is the other net item in this quarter? It looks relatively big, negative $20 million. Could you please elaborate more about that? I will do the translation very fast. The first question is that there is a new client in this quarter. We also saw that there is a new rental project in the real estate market. I would like to ask more about the business model of the client, contract deadline, and contract return, or ROIC's return. The second question is that we see that in 2021, the guidance contains a small rise in EBITDA, but it did not reach the high level that the company reached in the third quarter last year. OK, thank you, William, for the great questions.
spk04: Thank you. Nick, could you please take the first two questions? And we will turn to Zoe for the third question.
spk06: I think, yes, thank you for the good question. About the first one, about new customer contract, I think the first of all, it's a very positive development showing how our customer diversification strategy really works. And in terms of a contract, because we're abiding by the confidentiality clauses in this new contract, What can be sold to the public market at the moment is actually a 10-year irrevocable contract. That's number one. Number two, a lot of the scope of the service is in line with the common industry practice. And number three, we actually are going to have a very, very, I think, reasonable schedule to put this contract in the executed in timely fashion. That's actually my answer to your first question. Our second question, I think, as our guidance indicates, you can see, actually, both of our revenue and adjusted EBITDA are pretty much in line with most analysts' forecast range. As a matter of fact, If you take the midpoint of our revenue, which is $2.74 billion, and midpoint of our adjusted EBITDA figures, which is $1.31 billion, the margin rate should be very close to 48% and reach still among the industry top. On the revenue side, the primary driver force is the positive development on the customer acquisition and the contract execution related areas. On the adjusted EBITDA side, we also expect it in the forecast range largely. But as we just introduced in our investor presentation, one of the company's 2021 strategic objectives is to make reasonable investment in three core confidence building blocks, chain industry, Chin Power and Chin Idea, which could mean that we will reserve a little bit more budget for spending, necessary spending, talent acquisition, training, and system and R&D-related development in these three capability buildings. We believe this expenditure in the capacity building is very necessary to actually maintain our competitive advantage along the whole value chain. moving into the future, given the fast development of the technology, renewable energy utilization, as well as the industrial competitive landscape over the years. And third reason is actually one of the customers, because they have a little bit of design optimization process going on. We think that there might be a slight risk which may cause a slight delay of the contract delivery around the end of 2021. So we can provide a better assessment in our future quality of earnings release to the public market.
spk04: Now turning to Zoe for the third question.
spk05: Yeah, I will further illustrate the 20 million other items in the financial statement. There is a non-recurring contingent provision in the fourth quarter of 2020, which impacts the EBITDA. That is because with our strategic regional expansion and deployment of the China hyperscale model across Asian market to further optimize the solution, enhance the cost and the efficiency advantage, we change a more compatible vendor in India. On the best estimated basis, Around US dollar 4 million contingent provision was made for the settlement with the original vendor. Exclude this factor. Our EBITDA margin is generally in line with the average full year margin. This quarter, newly signed the contract in India. And the current efficient and on-track project execution validate our judgment is appropriate. And this also proves our deployment of a hyperscale model in India is successful. Thank you.
spk08: Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for a name to be announced. Please note that for Chinese-speaking participants, please ask your question in Mandarin first, followed by English. 对于讲国语的投资人,请先用中文来提问,再以英文来提问。 Our next question is coming from James Wang from UBS. Please go ahead.
spk07: Then I also want to know, this time I saw the company, for example, in some of the emerging energy industries, we may introduce more. So I want to know what kind of impact this will have on our future costs and institutional costs. This is the first question. The second question I want to know is that I see that the company has signed more orders overseas. So how is the return of this business? Good evening, management. Can I get an understanding of the rationale for setting up the three business groups, industry, power, and ideas? And also, it's my understanding, right, that you will be more involved in the renewable energy generation business and how will it impact on your costs and capex going forward? And the second question is on the overseas data center business. I noticed that you signed up more contracts in that segment. Can we get some idea of how much capacity reserve you have for overseas projects and what returns are like in these regions versus, say, mainland China? And also for these global cloud customers, what's your competitive advantage versus, say, the global data center providers such as Equinix and Digital Realty? Thank you.
spk04: Thanks, James. Nick, would you please take these two questions?
spk06: Sure. I think... Then, the first question you asked is about the three power blocks. This is also different from the other data center operators. Three important capabilities. First of all, we provide full-time design, engineering, construction, and delivery solutions. It is designed to become a development and construction partner for cloud data infrastructure. Based on our development and construction full capacity, So essentially the Qing industry is committed to becoming the leading partner for our customers in the development and construction of next generation computing infrastructure. So to be better able to provide more tailor-made service to our customers. In terms of Qinfeng Energy, it is a key strategic point for us. Qinfeng Energy is also intended to become a standard-type enterprise in the era of zero-carbon industry in the Chinese market. It will take advantage of the large-scale consumption of green energy, especially local consumption, and the development and operation of digital infrastructure. At the same time, we will also use our demonstration ability is committed to becoming the driving force for ushering China's data-centered industry into the zero-carbon emission era. As unilateral, Chin Power is actually dedicated to simultaneously promoting the development of new digital infrastructure and the large-scale consumption of renewable energy to accelerate energy revolution in the Internet age, and also to create a new scenario of digital economy. As for the form, it is mainly focused on promoting the whitewash of digital infrastructure and key equipment. At the same time, it drives the upgrade of large-scale digital centers and raw material products, and creates the world's leading large-scale digital center to support public equipment. So the idea is committed to promoting wide labeling of key digital infrastructure equipment, facilitating product integration for hyperscale data center campuses, and building the world's leading hyperscale data center manufacturing platform for accessory equipment, specialty equipment, integrated assembly lines, and other high-end equipment, and ultimately becoming a trusted partner and providing a more tailor-made product service to the data center solution. Okay. So this is one of the categories of our three companies' main business. So I think the positioning of these three groups to the model group, which is the Q-data group, is very similar to Jingdong Logistics. to the relationship between Jingdong Logistics to the Jingdong holding companies, essentially. So the first stage, their focus is on the providing the logistics-related service to Jingdong, its own business. As this economy scale become bigger, it started to grow its business to external customers and become the leading logistics service provider to the industry. That's actually the answer to your first question. The second question about overseas, 其实我们和一些大厂比, 像Equinix,像Vigital Realty, 我们其实是既有相同的地方, 但主要还是有很多我们自己独特的优势。 我们双方重叠的部分其实主要是在量态, 但是这里面的区别是我们聚焦的是新兴市场, They focus on core cities, such as Malaysia, India, and so on. They focus more on core cities, such as Singapore and Hong Kong. In terms of business model, we focus more on local development and one-stop service. So there's some commonality for our business presence in overseas market compared to our peers like Equinace and Digital Realty. So we have a little bit overlapping regional presence in the Asia Pacific region. But our geographical focus is more on the emerging market like Malaysia, India, and also suburban area outside Tier 1 cities. But their focus, regional focus, geographic focus is more on the Tier 1 cities, the big cities like Singapore, like Hong Kong. And also accordingly, so our business model is more on a greenfield development and a one-stack service solution. Using our successful precedence in China as an example, we believe based on this emerging market outside Taiwan City and greenfield development and a one-stack solution business model, we can provide a better, more comprehensive, and more valuable service to our clients. But for our competitors in those regions, like Aquinas Digital Realty, their experience and their stance is more on the merger acquisition, the interconnection related to business, which currently we're still catching up in. In terms of our financial margins, I think I would say that I cannot disclose too much at the moment. I think our margin should be in line with the industry, the common levels.
spk07: Thank you, Nixon. I would like to confirm again, will the company be involved in the renewable energy industry, which is our upstream, and what kind of impact will this have on the cost of future companies? Thank you.
spk06: The company is likely to be involved in the development of renewable energy, especially in the field of renewable energy. Because in itself, this is in line with the overall core strategy of our entire country's carbon neutral nuclear. It is also in line with the three major energy modules of the company. The energy that has been established in the past three years, the strategic and execution of the power generation and the integration of the power generation and the integration of the power generation and the execution of the power generation and the execution of the power generation and the integration of the power generation I think there's a high probability companies going to go upstream to start the renewable energy power generation and supply areas. I think that's pretty much in line with the macro, the carbon neutral strategy set up by the central government in China, as well as in line with companies' accumulated experience and also strategy over the past three years in the related field. Thank you, Nick.
spk08: All right, James, this is the operator. Can you kindly repeat your last question in English again? Thank you.
spk07: Sorry, my last question was just whether the company will go more upstream into renewable energy, which Nick has already answered. Yeah, is that right? So I don't have any more questions. Thank you. Thank you.
spk08: Once again, if you wish to ask a question, please press star followed by one on your telephone and wait for a name to be announced. Your next question comes from Shi Yuan Wang from Goldman Sachs. Please ask your question.
spk03: Hello, I'm Goldman's Tina. I have three questions I want to ask you. First of all, congratulations to the company for acquiring new customers and projects. I also want to ask, in terms of our latest new projects, what is the price trend? Also, in China and overseas, if we compare, the price per megawatt and the entire project's EBITDA margin is relatively higher or lower. This is the first question. The second question is also about ESG. I see on the PPP that after 2020, there is an article that says that we need to invest in the construction of clean energy power plants. I would like to ask if there is a general investment scale in this area, including the size of the capacity, and how many years can the investment be built? Also, what kind of benefits will the electric power plant bring to OPEC and EBITDA Margin in the long term? This is the second question. The third question is related to financial issues. We see that EBITDA Margin in the fourth quarter has dropped. I would like to know the reason for this. Next, will there be similar costs in the fourth quarter every year? So first of all, congratulations on management for the new customer and project wings. So my first question is on the pricing trends as well as margin trends with our recent recent projects, also the comparison relative pricing as well as EBITDA margin levels between our domestic and overseas projects. And then the second question is in terms of our ESG roadmap. I've seen that in the TPC. We've shown that from 2020 to 2030, one of our key initiatives is to invest and develop the renewable energy power plant. So just wondering whether we have any investment or capex plans over how many years for this renewable energy power plant. And also, after it's been constructed, what type of OPEC savings and margin improvement can we expect in the mid to longer term? And then the third question is, I saw that the fourth quarter EBITDA margin was a little bit down versus third quarter. So wondering what was the reason there and whether going forward that there will be similar seasonalities in the fourth quarter. And also what's our CapEx guidance for 2021? Thank you.
spk04: Really, would you please take up the pricing trend question and also the margin question, and then Alex would answer Tinaís ESG roadmap question. Thank you.
spk05: Okay. First, letís look at the pricing strategy in two slides. First is the CHIN data will still stick to our hyperscale model in the emerging market strategy. In this regard, we have been equipped with experience and expertise on the integrated full-stack hyperscale solutions, including the renewable energy solution, site selection, greenfield development, and MAE mechanical and equipment investment, maintenance and connection, and extra. In this regard, we will further keep on integrating to upper stream and explore further cost advantage as Nick just introduced through the capability building. So I think for this part, the pricing strategy and the margin will be less impacted. But besides this, we can also provide the segmented solutions on part of the value chain. which means we are able to provide certain customers for some traditional segment of services. And the market competition for this part will be more fierce, and possibly there will be price reduction. However, in terms of the routine, as we mentioned, we have the advantage in the construction, in the equipment, and also in the whole life cycle management. So we will still be very competitive among peers. Another question is regarding the comparison between China and overseas markets. I think this depends on the different model. In China, I've introduced two models, and for overseas markets, If we will see that for certain cloud service provider, if they also include full integrated solution, that will be similar to China market. But if they have other requirements, such as the power, whether it's pass-through or whether it's integrated, the margin will be dramatically different. If power is pass-through, the EBITDA margin will be much higher. Okay. And I will transfer to Alex for your ESG question.
spk01: Let me answer the second question. I would like to explain in advance that in this industry, we are the first company to disclose the details of energy consumption. Because we actually mentioned in the disclosure that the electricity consumption of our family has already accounted for one-fourth of the total electricity consumption in the country and the whole society. So our self-driving pressure and power are very large. You just asked a question. In fact, this year, we will be producing our first light and power station, which is 150 megawatts. At present, we cannot make a clear announcement about the cost of the capacity. But because we have always been investors with this kind of open attitude, I can certainly tell you that our future operating costs will be lower than our current I would now translate Alex's answer.
spk04: First, we would like to say that in this industry, we are the first corporation to disclose the detail of how we use up our energy. As of last year, Chindata, as a single enterprise, its operations in China have already taken up 1.4 tens of thousands of the entire country's power usage. Based on this, Based on our leadership, we have been experiencing a very powerful self-driven and self-pressure in our development. Also, when you talk about our plan to build up the power plant, I believe you are referring to our first solar power station for a total megawatt of 150 megawatts. At this stage, I'm not in a position to propagate the CAGPAC amount to the public, but we can be very confident in telling you that our operation costs will keep on decreasing and will be lower than our current utility cost level. At the last, we would like to remind everyone that we will, very soon, we will publish our second ESG report to show everyone how we do in our ESG work stream for the entire year 2020. Also, on April 22nd, in the Day of the Earth, we also will have some surprise for everyone. Thank you.
spk05: I think there is another question regarding the Q4 EBITDA fluctuation as I just introduced at the very beginning that this is due to the non-recurring exceptional contingent provision of around U.S. dollar 4 million for the settlement of a regional vendor in India and this is for our hyper-skilled business model deployment in India, and we have already ensured our project execution and signed a new contract in India. So this will not be repeated for the future, for the fourth quarter in the future, I mean. And another one is regarding the TAPEX guidelines. In the asset overview, we have altogether 21 projects under construction or in service. And for 2021, we expected 4 to 5 billion RMB for this project's capital expenditure. But besides this, we also have potential margin acquisition, pipeline new projects, and the expansion in the overseas market as well. So we will have additional CapEx expenditure in this field.
spk03: I saw that in the first quarter, our maintenance cost increased by over 40% QOQ. So the one off that you mentioned is included in this item, right? Yes, you're right.
spk05: And if we exclude factor, it will remain the average range compared with the previous three quarters. Yes.
spk02: OK. Thank you. Thank you.
spk08: Your next question comes from Hongjie Li from CICC. Please ask your question.
spk02: Hello. The first question is about the acquisition. Will there be more acquisition actions this year to meet the needs of customers in the field, including in quantity? At the same time, what are the key requirements of our main assessment on acquisition? On the other hand, as we expand to more and more places, the climate conditions may not match our current energy and capital technology. Will it affect our construction costs and IRR? The second question is about the three new companies that we just mentioned. So my first question is, should we accept more NA activities this year and beyond to secure more resources and catch up with customers' demands? If so, what are the metrics that you're taking into account on acquisition? And if we expand into more areas, the local natural environment may not support our existing energy-saving technology. So will that influence our construction costs and project returns? The second question is, the three newly established theories, because we have two important topics in the beginning, but from our perspective, this initiative more a driver for the cost saving or the future revenue contribution. Thank you.
spk04: Thank you, Hongjie. Alex will answer both of your questions. Alex, please.
spk01: Okay. the future core customers, and the users of the customers. At the same time, we also pay attention to the management team of BiaoDi, whether they agree to make progress together for a long-term goal. Other than that, we don't think this is the priority ranking option. Of course, you just mentioned different areas. Okay. Okay.
spk04: Okay, I'll translate Alex's answer. So we are aware of the tools and targets on the market, but we are more focused on evaluating whether that target could provide the authentic and real core value to our key anchor customer and the end user of our customers. we are focusing on whether the management team is qualified or equipped with the qualifications to strive for the same goals as ours. Other than these, we do not think are the prioritized considerations. Further, as you mentioned, in different geographic areas, they might have different business models or construction models than our current operation. We respect this difference and when we're choosing our targets, we will keep our originality and also the innovation as much as we can. We will definitely adopt the model that is most benefiting and most appropriate for the local environment.
spk01: Thank you. 第二個問題有一個細節向大家所關注 At the beginning of this quarter, we started to announce some key growth data of the three subsidiaries. Most of these data are in terms of cost. So it represents that our group will not list it as a choice of income. Of course, with its long-term strategy, the creation of these platforms I'll take a translation for Alexander. We would like to draw everybody's attention to the details of our presentation this time.
spk04: From this quarter, we are prepared to continuously publish the key metrics for measuring those three subgroups or three subdivisions' key operations growth. As you can see, most of these metrics are focusing on the cost level. So in a short period of time, we will not really measure the quality of their growth simply by the revenue they can generate. But in the long run, we plan to have them become an open platform for multi-party collaboration. And we want them to enable the entire industry from different perspectives. We would like to keep the openness with the different business partners that can benefit both our growth and the industry in the long run.
spk02: Thank you.
spk08: This concludes today's conference call. Thank you for participating. You may now disconnect your lines.
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