GDS Holdings Limited

Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I'll now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura. Thank you.

Hello, everyone. Welcome to the fourth quarter and full year 2021 earnings conference call of GDS Holdings Limited. The company's results were issued via Newswire Services earlier today and are posted online. A summary presentation, which we will refer to during this conference call, can be viewed and downloaded from our IR website at investorsgdsservices.com. Leading today's call is Mr. William Huang, GDS founder, chairman, and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS CFO, will then review the financial and operating results. Ms. Jamie Koo, our COO, is also available to answer questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's perspective as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that GDS earnings press release and this conference call can include discussions of unaudited gap financial information as well as unaudited non-gap financial measures. GDS press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gap measures. I will now turn the call over to GDS founder, chairman, and CEO. William, please go ahead, William.

Hello, everyone. This is William. Thank you for joining us on today's call. I'm delighted to report another year of strong financial results. In 2022, we grew revenue by 37%. 36%, and adjusted EBITDA by 38% year-over-year, in line with our guidance. At the same time, we made significant progress in key business areas, which underpinned our long-term success. We sustained our sales momentum, adding around 120,000 square meters, or 280 megawatts, of new commitments from an increasingly diversified customer base. We secured over 300,000 square meters of new capacity supply in market in China by a combination of land purchases and project acquisitions. This increasingly scares results will give us a competitive advantage for years to come. We put in place the foundations for our Singapore Plus strategy with two complementary campuses in Malaysia and Indonesia. We increased our use of renewables to over 30% and We completed over US$2.6 billion of debt financing to ensure that our projects are fully financed on a sound basis. In addition, we raised over $600 million from a private CB issue with strategic value added. Our strategic market position is stronger than ever. Despite the challenging operating environment, we remain focused on executing our business plan, improving our efficiency, and seizing key opportunities when they arise. In 4Q21, we booked 23,000 square meters of new commitments. For the full year of 2021, We hit our sales target with 96,000 square meters of organic bookings and 23,000 square meters from acquisitions. For 2022, we expect to achieve around 90,000 square meters of new organic commitments. While there is some change in the demand profile, overall demand is at a similar level to last year. As shown on slide six, we won five hyperscale orders during 4Q21. Hyperscale typically means cloud and large internet, but in each of the past two quarters, one of our hyperscale orders was from a financial institution. Turning to slide seven, during 2021 as a whole, we saw a change in our new business mix, with cloud accounting for 50%, large internet for 30%, and FSI and enterprise for 20%. Our sustained sales momentum demonstrates the strength of our customer franchise across the demand spectrum. Turning to slides eight and nine. One of the key to our success is having the right capacity in the right place at the right time. This enables us to provide a more complete solution to our customers and the depreciation GDS from the competitors. In tier one markets, it has become increasingly difficult, if not possible, to obtain sustainable suitable land for data center development, together with the necessary power quota and access to renewables. Customers must be able to scale up their presence in tier one markets in order to satisfy the requirements for low latency and high availability. This is recognized in the government's ESA data with computation. concept for the data center industry. During 2021, we accelerated our capacity sourcing in order to build up a sustainable supply. We acquired or entered into definitive agreements for 16 data center projects, mostly located in the urban areas of Beijing and Shenzhen, where new supply is limited. And we acquired and purchased the land with energy quota in all the tier one markets. In total, we added around 300,000 square meter up to our development pipeline, equivalent to over three years new bookings at our current sales run rate. It is valuable asset which underpins our ability to serve customers and create value for our shareholders going forward. While assuring our position in mainland China, we also took significant steps to build up our presence in Hong Kong and Southeast Asia. In Hong Kong, we now have a pipeline of four purpose-built data centers that will enter service between 2022 and 2025. Ensuring continuous supply, we have an anchor commitment for Hong Kong 1 and expect to have commitment for Hong Kong 2 in the second half of this year. I have been in Singapore for the past few weeks. I'm very excited by the potential of our regional strategy. We will initiate construction of our Southeast Asia projects in the next few months. and to obtain our first anchor orders shortly thereafter. Turning to the slide 14, a few months ago, we published our first ESG report and set out a target to achieve carbon neutrality by 2030. In 2021, we achieved 34% renewable energy usage compared with the 22 in the prior years of 2021. Recently, four of our data centers were recognized by the government as national green data centers based on their renewable energy usage and advanced green technologies in design and operation. To conclude my part, all the things that we have done are for long-term business plan. All the temporary Temporary uncertainties in the macro environments are not going to impact our execution of business. We are positioning ourselves to be long-term winners in the data center market. Now I will hand over to Dan for the financial and operating review.