VNET Group, Inc.

Good morning and good evening, ladies and gentlemen. Thank you and welcome to 21 Vionet Group's second quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. We will be hosting a question and answer session after management's prepared remarks. With us today are Mr. Samuel Shen, Chief Executive Officer and Executive Chairman of Retail IDC, Mr. Tim Chen, Chief Financial Officer, and Ms. Xinxuan Liu, Investor Relations Director of the company. I will now turn the call over to the first speaker today, Ms. Liu, IR Director of 21 ViaNet. Please go ahead, ma'am.

Hello, everyone. Welcome to our second quarter 2021 earnings call. Before we start, please note that this call may contain forward-looking statements made pursuant to the safe harbor provision for the Private Security Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirely by the cautionary statement, risk factors, and details of the company's filing with the SEC. 21Vanet undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this earnings call. I will now turn the call over to Mr. Samuel Shen, CEO of 21Vanet.

All right. Thank you, Xinyuan. Good morning and good evening, everyone. Thank you all for joining us. on our earnings call today. We're very pleased to announce another quarter of strong results. Our revenue of roughly RMB 1.5 billion and adjusted EBITDA of RMB 425.1 million both exceeded the high end of our guidance, representing year-over-year growth of 30.8% and 38.7% respectively. Meanwhile, our adjusted EBITDA margin improved to 28.4% from 26.8% a year ago. This robust growth continued to be driven by strong IDC market demand, meticulous strategy execution, and our increasingly diversified customer base. In the second quarter, the government released some new regulations, which were generally issued in support of fair competition, with very little impact on our business today. In fact, during the quarter, we continue to observe growing demand for our carrier and cloud-neutral IDC services across various industries, including e-commerce, financial services, logistics, and automobiles. The government continues to support the trend of digitalization and implement policies that are favorable to the IDC industry. For example, the 14th Five-Year Plan which was announced earlier in this year, is promoting digital everything initiatives. This demonstrates that industry digitalization remains a key strategy for China's industrial transformation. Importantly, in China, the concept of industrial digitalization is not merely focused on developing the digital industries, but also fueling the transformation of traditional industries. through digital technologies. Such initiatives indicate that there will be more investments in new infrastructures going forward. In July, the Ministry of Industry and Information Technology issued a notice for the country's three-year plan to empower the digital economy. According to the notice, the government plans to implement an improved development pattern for new data centers. to optimize data center layouts, improve network quality, accelerate computing capacity, and lower carbon emissions. We believe that this initiative will benefit industry leaders like us who have strong track records of ramping up IDCs to mature levels within reasonable timeframes, as well as effective systems for measuring and optimizing PUE levels to ensure sustainable IDC growth. On the back of these favorable conditions, our established market foothold, our scalable industry solutions, our pipeline and customer relationships have remained very strong. Now turning to our business updates for the second quarter, our dual core growth engine strategy continued to fuel our organic expansion. We added approximately 7,000 cabinets in the second quarter. while our cabinet deliveries in the first half of 2021 were in line with our expectations. As a result, our new cabinet deliveries, our compound utilization rate in the second quarter dropped to 59.9% from 61.7% in the prior quarter. Our utilization rate for mature IDC delivered prior to and during 2019 improved to 76.3% in the second quarter, compared to 73.9% in the previous quarter. On the retail business front, the growth momentum continued, driven by high demand from both existing and new customers in a variety of sectors. For instance, during this quarter, we have seen a leading global food chain company, and the global logistics companies have ramped up their usage of our IDC solutions for collocation, connectivity, and additional value-added services. Meanwhile, we witnessed increasing demand from customers in industries such as artificial intelligence technology, local life services, and financial services. For our wholesale business, we continue to make steady progress. During this quarter, for example, we expanded our geographic coverage to northern China and we expect to deliver approximately 30 megawatts in capacity to provide data support for a leading content community and social platform in China. In addition, for the June 18th Mid-Year Shopping Festival, we demonstrated our customer centricity by establishing a special team and preparing for our clients' advanced deployment of infrastructure and customer services. As a result, our e-commerce wholesale customers maintain smooth operations during the peak traffic period. For our Blue Cloud business, after nearly a year of cooperation with Microsoft, in July, we further extended our collaboration to become one of the first partners for the Microsoft connected vehicle platform in China by providing our advanced cloud and edge mobility services. ESG initiatives have always been the driving force for our sustainable development. Therefore, it should come as no surprise to everyone that we have been well prepared for the government's latest announcement on encouraging renewable energy enterprises to implement energy storage for peak load shifting. By specifying the first quantitative requirements, for the energy storage ratios of market-oriented renewable projects. This announcement is of great value and importance to the industry's direction of development. Through a collaboration with Tsinghua University's Energy Internet Innovation Research Institute, we launched our data center energy storage projects in Foshan, Guangdong Province, which is one of the first successful applications of large-scale energy storage technology for data centers in China. To further promote our brand awareness, we have proposed to change the company's name from 21 ViaNet Group Inc. to VNet Group Inc. The EGM to approve the change of name will be held on October 8th in Beijing. The notice of the extraordinary general meeting and form of proxy have been filed on form 6K with the SEC and posted on our investor relations website. As the government promotes new infrastructure initiatives, enterprises fully realize that digital transformation is no longer a nice to have, but a must have for business success and survival. As such, enterprises are constantly searching for trustworthy providers capable of supporting their digitalization processes and migrations to the cloud. Against this backdrop, we recently announced our acquisition of TenzCloud, a leading cloud-native application and data platform service providers in China. TenzCloud will play an integral role in extending our suite of full-stack solutions for public, private, and hybrid clouds. Therefore, we will be able to provide a full lifecycle support to our customers throughout their digital transformations and further enhance our leadership in a carrier and cloud-neutral IDC services market. In summary, we remain well-positioned to capitalize on the growing market opportunities arising from the trend of digitalization. We remain confident in our four-year target for the delivery of 25,000 cabinets and a utilization rate of 60%. We reiterate our dual core growth engine strategy and strong execution to acquire more customers from various industries, diversify our revenue streams, sustain our growth trajectory, and generate lasting shareholder value for the long term. With that, I will now turn the call over to Tim who will further discuss our financial results for the quarter as well as his thoughts on our future growth. Hi, Tim.