Chaince Digital Holdings Inc.

Good morning and good evening, ladies and gentlemen. Thank you and welcome to Chen Data Group's Holding Limited First Quarter 2022 Earnings Conference Call. We will be hosting our question and answer session after management's prepared remark. Please note today's event is being recorded. I would now turn the call over to the first speaker today, Mr. Don Zhou from Investor Relations of Chen Data Group. Please go ahead, Don.

Thank you, Operator. Hello, everyone. Welcome to ChainGator Group's 2022 First Quarter Earnings Conference Call. This is Don from the Investor Relations Team of the company. With us today are Mr. Hua Peng Wu, our CEO, Mr. Nick Wang, our CFO, and Ms. Zoe Zhuang, our Finance VP. During this call, Nick will take you through the quarterly review of our operation performance, and Zoe will present our financial results. Management team will be here to answer your questions afterwards. Now I will quickly go over the safe harbor. 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 uncertainties that could cause actual results to differ materially. For more information, please refer to the risk factors discussed in our filings 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.chingdatagroup.com. We have also updated our quarterly presentation on the company's investor relations website, which you can refer to as a supplementary material for today's call. Without further ado, I'll now turn over the call to Nick. Nick, please go ahead.

Thank you, Don. Hello, everyone, and thank you for joining the call. Despite a headwind in micro-environment and COVID-related issues, we continue to manage the challenges and grow our business. Our business momentum remained very strong in the first quarter, and here are the highlights to begin with. On slide four, by end of the first quarter of 2022, our total capacity reached 704 megawatts, an increase of 31 megawatts during the quarter. We put one new project under construction, rating our total number of data centers up to 28. Specifically, in the first quarter, our in-service capacity increased by 58 megawatts. to 498 megawatts. Our contracted capacity increased by 54 megawatts, bringing our total contracted and IOI capacity to 619 megawatts. And our utilized capacity increased by 40 megawatts to 344 megawatts. Our total capacity maintained a high contracted and IOI ratio of 88%. We continued our energy efficiency performance with year-to-day average PoE by the first quarter at 1.21. The number of our approved and pending patents was 310 compared with 231 in the same quarter last year. Financially, our top and bottom line remained strong and healthy. Revenue was RMB 920.6 million for the quarter. which is 43.1% year-over-year growth. Adjusted EBITDA was RMB 494.5 million, a 60.7% year-over-year growth, with a margin of 53.7%, a historical high. Net income was RMB 94.6 million per quarter, which is a 62.5% year-over-year growth. with a margin of 10.3%. We have achieved net profit performance for five consecutive quarters. In terms of our financing, we have successfully finalized a $500 million U.S. syndication loan financing in May, ensuring sustainable financing for our future development. With such performance, we have been beating market consensus for seven straight quarter since IPO. On top of this, with the current momentum and taking into numerous factors, we are raising our full year 2022 revenue and adjusted EBITDA guidance. My colleague Zoe will share more details later. Now, let me walk you through more details of operation. And I will start with our product delivery in the first quarter and our expectation going forward. We have put two projects totaling 58 megawatts into service as originally scheduled. One of them is CN12, a 6 megawatt project that supports an existing key international client system and is located in one of our campuses in Hebei, China. The other is CN15, a 52 megawatt hyperscale project that supports the business of the anchor client and is located in our campuses in Shanxi, China. You can refer to slide seven for the profile of these two projects. We also started the construction of a new project, GN18, a 30 megawatt hyperscale project located in one of our campuses in Hebei. This project will support a business of the Anchor client and is scheduled for delivery in 2023. Progress is also achieved in our deployment in APAC emerging market as we have successfully completed business acquisition in Thailand. The project is located in Bangkok and is currently running minor capacity for a local client. With further technical upgrade, we expect to bring the total capacity of the project to 5 megawatts to better serve our potential clients in the region. With these new projects, And as you can see on slide 9, we had brought our total capacity to 704 megawatts by the end of the first quarter. In-service capacity by quarter end stands at 498 megawatts compared with 440 megawatts in the previous quarter and 291 megawatts in the same quarter last year. For the 206 megawatts under construction capacity, Around 50% of them is scheduled for delivery in 2022 and 2023, respectively. The COVID prevention and control measures currently taken in different locations in China has more or less affected supply chain, logistics, and outside labor work, bringing challenges for the company. However, the company has taken active measures, and our assessment now is is that such impact is confined to a very limited range. We believe the experience we have gained in early days of the pandemic in the year 2020 with more region control matters would also help us better respond to the current situation. We have therefore kept the delivery schedule of the majority of the project unchanged. Project CN-13 was slightly delayed. but was put into service in May 2022. We're expecting delay in project CN16 and CN17 due to customer-related reasons. As for our overseas pilot project, M106 Phase 1, where we are shipping our entire solution overseas, we have been carefully managing the challenges, and the schedule remains unchanged. On slide 11, in terms of client commitment, our major clients continue to grow healthily, and we continue to receive commitment from them. This quarter, we have an additional 54 megawatts contracted capacity, mainly contributed by a 52 megawatts IOI capacity conversion on project 15. This project is now fully contracted and is supporting the anchor client. Meanwhile, we also added 27 megawatts of new IOI capacity from two Northern China projects for the anchor client as well, one of which will be supporting their high-density deployment with 32 kilowatt cabinets. These developments bring our total contracted and IOI capacity to 619 megawatts, with an 88% contracted and IOI ratio. It is also our ongoing effort to further look for hyperscale demand and opportunities from enterprises clients and cloud service providers, while at the same time to further penetrate the APAC emerging market. With these recent developments, the commitment profile of our total capacity remains very healthy. On slide 12, for all of our in-service capacity, 95% of them is either contracted or with IOI commitment from the client, and this ratio has been stable. The ratio for our total capacity in this quarter is 88%, compared with 87% in the previous quarter and 88% in the same quarter last year. Again, our healthy commitment profile can be attributed to the advantage of our helpers goal business. which is credible demand from the leading players in the industry, a long-term contract that guarantees sustainable revenue streams. To share more color on this, by end of the first quarter, over 90% of our contracts are 10 years contracts, while the weighted average remaining term of a per contract megawatt is around eight years. Now, Coming to customer moving on slide 14. Thanks to our client's excellent and resilient business performance, we are able to keep a steady and healthy ramp-up pace. We added 40 megawatts of utilized capacity in the first quarter, bringing our total utilized capacity to 344 megawatts, compared with 238 megawatts in the same quarter last year. which is a 45% year-over-year growth. New utilization mostly came from projects in the greater Beijing area, specifically in Shanxi and Hebei. Utilization ratio at the end of the first quarter was 69%, which is healthy and similar to previous level. Finally, let's take a look at our business geographically. In terms of our utilization, or revenue generation related capacity. The majority of them are in greater Beijing area in China, which are exactly in or very close to the design of clusters under the East Data West Computing National Policy. Looking ahead, we currently have a total of 206 megawatts capacity under construction, among which around 50% of them is in the APAC emerging market. Take a closer look at our current deployment in APEC emerging market, which is around 70% of our total capacity, or a total of around 117 in Malaysia and India, among which 89% are either contracted or with IOI by the end of the first quarter. And we are serving international clients or domestic clients that are going aboard in this region with great growth potentials. We believe our existing deployment, both in China and APAC emerging market, were enabled to go further. If you would like to learn more about the details of our assets and our growth plan, et cetera, feel free to refer to the other pages of our IR presentation. Lastly, another key event for the company recently is definitely our 500 million U.S. dollar syndication loan financing project. We have finalized the financing. The deal was oversubscribed, and we're having reputable international and domestic banks selected as lenders. Interest rate is around 4% to 5% handle, which is in line with our unique investment grade rating that we gained previously. Proceeds will be used for business development and to refinance one of our existing debts. We expect the deal to be fully completed in the second quarter. This deal is definitely improving our financial experience under the current macro environment and will better support our growth going forward. With this concludes our business review. I will now hand over to Zoe for discussion of financial performance. Zoe, please.