VNET Group, Inc.

Hello ladies and gentlemen, thank you for standing by for first quarter 2023 earnings conference call for VNet Group Inc. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be question and answer session. Participants from our management include Mr. Jeff Doan, Chief Executive Officer, Mr. Tim Chen, Chief Financial Officer, and Missing Yuan Liu, investor relations director of the company. Please note that today's conference call is being recorded. I'd now like to turn the call over to first speaker today, Missing Yuan Liu. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to our first quarter 2023 earnings conference call. Our earnings release was distributed earlier today. and you can find a copy on our website as well as on Newswire services. Please note that the discussion today will contain forward-looking statements made under the CPAPA provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ maturely from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with the SEC. BNAT does not undertake any obligations to update any forward-looking statements except as required under applicable laws. Please also note that BNAT's earnings prejudice and this conference call include the disclosure of unaudited GAAP financial matters as well as unaudited non-GAAP financial matters. BNAT's earnings prejudice contains a reconsideration of the unaudited net gap matters to the unaudited gap matters. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will also be available on our IR website at ir.vinet.com. I will now turn the call over to our CEO, Jeff.

Thank you, Hing-Yuan. Good morning and good evening, everyone. Thank you for joining our call today. I will start with the overview of our first quarter results. I will turn the call over to Tim, our CFO, who will discuss our financial results and outlook in more detail. We got off to a great start in 2023 with a solid first quarter performance, thanks to our effective dual core growth strategy and competitive service offerings. In the first quarter, we sequentially ended 1,300 utilized cabinets, growing our overall utilization rate to 56%. 0.5% from 55% last quarter. Total companies under management reached 87,310 by the end of the first quarter, compared with approximately 78,960 one year ago. Notably, our retail MRR per company reached a record high of RMB 9,486 during this quarter, up from RMB 9,371 in the previous quarter. First quarter revenue of RMB 1.81 billion represent an increase of 9.7% year-over-year and just EBITDA grow about 10% year-over-year to reach RMB 556.2 million, demonstrating our ability to drive stable growth and make China steady post-pandemic recovery. Before I talk more about our business results, I want to share some color on the broader bankroll climate. Official statistics show China's GDP growth 4.5% year-over-year for the first quarter, exhibiting a clear post-pandemic recovery path. With the digital economy posed to become China's key growth driver in the coming years, China's government is diligently advancing its digital China vision. Its strategic efforts include taking forward-looking steps in building digital infrastructure, fostering more innovation and value creation in platform economy, and accelerating digital transformation across a broader class of economy and the general population, according to the NDRC. Given this context, advanced infrastructure facilities such as 5G connectivity and data centers will serve as strategic cornerstones for the development of the digital economy, fulfilling growing demand from a broad spectrum of industries, including internet players as well as traditional industries. As a leading player in China's IDC space, we are well positioned to provide ever-improving services to customers and seize opportunities arising from the favorable policy landscape and digital economy boom. Now let's take a closer look at our first quarter business updates. Execution of our dual core strategy continues to prove strongly effective in both the wholesale and the retail ITC markets. Our wholesale service offerings continue to gain traction among leading internet players during the quarter. As we mentioned during the last earning call, in the first quarter we want to bid for a new customer, one of China's internet giants, to deploy ITC services to support its business expansion through our ITC assets. located in the Yangtze River Delta region. The overall project will total more than 100 megawatt and be delivered in multiple phases. The project is now progressing smoothly and the initial phase of the companies will be delivered by the end of this year as scheduled. This project once again exemplifies our compelling value proposition and the service capabilities for wholesale customers. Moving on to our retail business, in today's business operating environment, companies of all sizes and sectors are pursuing digital transformation with increasing urgency. Our high-quality, scalable retail ITC service offerings are attracting more and more enterprises demanding fast, reliable, and secure digital access to facilitate their digital transformation agendas. In the first quarter, growing demand from cloud services, media, and traditional sectors drove an expansion in our number of new customers. At the same time, we continue to win extended orders from existing customers across a variety of industries, including local services, IT services, online gaming, and financial services. Our comprehensive service offerings and customized solutions creates an excellent service experience for customers, solidifying our customer loyalty and boosting our overall competitiveness. Next, I want to share an update on the Blue Cloud business. In April, Microsoft and our Blue Cloud jointly launched Microsoft Teams, one of Microsoft 365's core modules for the Chinese market. Together with Office 365, Microsoft Teams will be operated under Microsoft 365 by our Blue Cloud in China, bringing more robust and efficient functionality supported by Blue Cloud's secure and reliable cloud services. As China's digital transformation accelerates, we'll leverage Blue Cloud's cloud operation expertise and decade-long strategic partnership with Microsoft to further unlock its unique value proposition. Last but not least, I'd like to provide an update on our ESG performance, which is an important part of our growth and long-term value creation philosophy. Last month, we released our third annual ESG report detailing our 2022 ESG initiatives and outcomes, including third-party verification of our carbon inventory results. We also highlight achievements such as our average annual PoE of 1.37, a green power purchase agreement with a supply guarantee of approximately 500 million kilowatt hours over the next five years, and an increase in our percentage of female employees in management positions to 29%. Going forward, we will continue to deepen our ESG engagement and embrace our responsibility to deliver sustainable value to our shareholders. In summary, our solid first quarter performance underscores our core strengths and execution capabilities. With China's post-pandemic economic recovery well underway, alongside support from policies designed to boost the digital economy, we are optimistic about the domestic IDC service industry's growth prospects for the rest of the year. We'll remain committed to our effective dual core growth strategy, focusing on our core business by providing our retail and wholesale customers with reliable and customizable services while fulfilling incremental digital demand to facilitate digital transformation across verticals. Thank you, everyone. I will now turn the call to Tim to discuss our financial performance for the quarter and our business outlook.