[Overall Performance Summary](index=1&type=section&id=Overall%20Performance%20Summary) Chindata Group achieved strong Q3 2022 financial and operational growth, leading to a second full-year guidance raise [Q3 2022 Financial & Operating Highlights](index=1&type=section&id=Recent%20Financial%20and%20Operating%20Highlights) Chindata Group achieved strong Q3 2022 growth in revenue, net income, and data center capacity, leading to a raised full-year guidance Q3 2022 Key Financial Metrics (YoY) | Metric | Q3 2022 | YoY Growth | | :--- | :--- | :--- | | Revenue | RMB 1,202.7 million | 62.4% | | Net Income | RMB 241.0 million | 207.4% | | Adjusted EBITDA | RMB 614.5 million | 66.8% | Q3 2022 Key Operating Metrics (YoY) | Metric | Q3 2022 | YoY Growth | | :--- | :--- | :--- | | Total Capacity | 821 MW | 39.7% | | Utilized Capacity | 454 MW | 69.3% | | Total Contracted & IOI Capacity | 700 MW | 41.9% | - The company raised its full-year 2022 guidance for the second time, increasing revenue guidance to **RMB 4.33-4.43 billion** and adjusted EBITDA guidance to **RMB 2.2-2.26 billion**[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Quote) Management highlighted strong performance, 9M 2022 revenue exceeding full-year 2021, and emphasized strong financials and a healthy balance sheet - CEO Huapeng Wu noted that **9M 2022 revenue surpassed full-year 2021 revenue**, leading to the second guidance raise[4](index=4&type=chunk) - CFO Dongning WANG highlighted a healthy balance sheet with a **low total debt to capital ratio of 44.1%** and an **un-levered pre-tax ROIC of around 17%**[5](index=5&type=chunk) [Business Operations](index=2&type=section&id=Business%20Highlights) The company expanded its data center asset portfolio, strengthened its presence in APAC emerging markets, and advanced sustainability initiatives [Asset Portfolio Overview](index=2&type=section&id=Asset%20Overview) As of Q3 2022, total data center capacity grew to 821MW, with in-service capacity reaching 579MW and a healthy 78% utilization ratio Capacity Status (as of Q3 2022) | Capacity Type | Q3 2022 | YoY Growth | | :--- | :--- | :--- | | Total Capacity | 821 MW | 39.7% | | In-service Capacity | 579 MW | 56.4% | | Under-construction Capacity | 242 MW | - | | Utilized Capacity | 454 MW | 69.3% | - A new **43MW** under-construction hyperscale project (MY06-3) was added in Johor, Malaysia, with delivery scheduled for 2024[7](index=7&type=chunk) - Total contracted and IOI capacity reached **700MW**, a **41.9% YoY increase**, with a **96% commitment ratio** for in-service capacity[8](index=8&type=chunk) - The overall utilization ratio for in-service capacity remained healthy at **78%**, consistent with the previous quarter[11](index=11&type=chunk) [APAC Emerging Markets Development](index=3&type=section&id=Recent%20Development%20on%20APAC%20emerging%20markets) The company expanded its presence in APAC emerging markets, with Malaysia and India accounting for 19% of total capacity, while Greater Beijing remains the core - Project MY06 in Johor, Malaysia, with a total designed capacity of **over 100MW**, celebrated its grand opening, with **19MW** put into service in October[12](index=12&type=chunk) Capacity Distribution by Region (Q3 2022) | Region | Total Capacity | % of Total | | :--- | :--- | :--- | | APAC (Malaysia & India) | 160 MW | 19% | | Greater Beijing Area | 620 MW | 75% | | Yangtze River Delta & Greater Bay | 42 MW | 6% | - APAC projects represent a growing portion of the development pipeline, accounting for **49% of total under-construction capacity**[13](index=13&type=chunk) [Sustainability and R&D Initiatives](index=3&type=section&id=Recent%20Development%20on%20Sustainability,%20Research%20%26%20Development%20and%20Innovation) The company advanced sustainability through its D-A-T-A ESG strategy, securing green loans and receiving awards for innovative cooling technology - The company issued its third annual ESG report, outlining a **D-A-T-A** (De-carbonization, Alignment, Technology, Advanced attitude) strategy[14](index=14&type=chunk) - The company's hybrid evaporative cooling technology, estimated to achieve a **PUE of 1.16**, received the first prize at the China CDCC summit[16](index=16&type=chunk)[18](index=18&type=chunk) [Financial Performance Analysis](index=4&type=section&id=Third%20Quarter%20and%20First%20Nine%20Months%20of%202022%20Financial%20Results%20Summary) This section details the company's strong Q3 and 9M 2022 financial results, including revenue, net income, and key balance sheet items [Q3 2022 Financial Results](index=4&type=section&id=Q3%202022%20Financial%20Results) Q3 2022 total revenues grew 62.4% YoY to RMB 1,202.7 million, with net income surging 207.4% and adjusted EBITDA increasing 66.8% Q3 & 9M 2022 Financial Performance (YoY) | Metric | Q3 2022 (RMB million) | Q3 YoY | 9M 2022 (RMB million) | 9M YoY | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 1,202.7 | 62.4% | 3,161.4 | 52.7% | | Gross Profit | 466.2 | 46.6% | 1,323.1 | 55.1% | | Operating Income | 317.5 | 72.2% | 879.1 | 93.8% | | Net Income | 241.0 | 207.4% | 535.2 | 165.2% | | Adjusted EBITDA | 614.5 | 66.8% | 1,653.3 | 62.9% | | Adjusted Net Income | 294.3 | 162.8% | 713.8 | 113.5% | Q3 2022 Profitability Margins | Margin | Q3 2022 | Q3 2021 | Q2 2022 | | :--- | :--- | :--- | :--- | | Gross Margin | 38.8% | 42.9% | 42.0% | | Net Income Margin | 20.0% | 10.6% | 19.2% | | Adjusted EBITDA Margin | 51.1% | 49.7% | 52.4% | - Basic and diluted earnings per ADS in Q3 2022 were **RMB 0.66**[26](index=26&type=chunk) [Balance Sheet Summary](index=5&type=section&id=BALANCE%20SHEET) As of September 30, 2022, the company maintained a strong financial position with RMB 5.0 billion in cash and total assets of RMB 22.3 billion - As of September 30, 2022, the company held **RMB 5.0 billion** in cash, cash equivalents, and restricted cash[29](index=29&type=chunk) Key Balance Sheet Items (as of Sep 30, 2022) | Item | Amount (RMB thousands) | | :--- | :--- | | Total Assets | 22,263,480 | | Total Liabilities | 11,580,939 | | Total Shareholders' Equity | 10,682,541 | [Future Outlook and Guidance](index=5&type=section&id=2022%20Full%20Year%20Business%20Outlook) The company raised its full-year 2022 revenue and adjusted EBITDA guidance, reflecting strong business momentum [2022 Full Year Business Outlook](index=5&type=section&id=2022%20Full%20Year%20Business%20Outlook) The company raised its full-year 2022 revenue guidance to RMB 4.33-4.43 billion and adjusted EBITDA guidance to RMB 2.2-2.26 billion Updated Full Year 2022 Guidance | Metric | Previous Guidance (RMB) | Updated Guidance (RMB) | Updated YoY Growth | | :--- | :--- | :--- | :--- | | Total Revenues | 4,130 million – 4,230 million | 4,330 million – 4,430 million | 51.8% - 55.3% | | Adjusted EBITDA | 2,100 million – 2,180 million | 2,200 million – 2,260 million | 55.0% - 59.3% | [Financial Statements and Reconciliations](index=8&type=section&id=Financial%20Statements%20and%20Reconciliations) This section provides detailed unaudited consolidated financial statements and reconciliations of GAAP to non-GAAP financial measures [Unaudited Condensed Consolidated Balance Sheets](index=8&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents the unaudited condensed consolidated balance sheets as of September 30, 2022, detailing assets, liabilities, and equity - The report includes the detailed unaudited condensed consolidated balance sheets[42](index=42&type=chunk)[43](index=43&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This section presents the unaudited condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2022 - The report includes the detailed unaudited condensed consolidated statements of comprehensive income[44](index=44&type=chunk)[45](index=45&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section contains the unaudited condensed consolidated statements of cash flows for the three and nine months ended September 30, 2022 - The report includes the detailed unaudited condensed consolidated statements of cash flows[46](index=46&type=chunk)[47](index=47&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=UNAUDITED%20RECONCILIATIONS%20OF%20GAAP%20AND%20NON-GAAP%20RESULTS) This section provides detailed reconciliations of GAAP financial measures to non-GAAP measures, including Adjusted EBITDA and Adjusted Net Income Q3 2022 Reconciliation of Net Income to Adjusted EBITDA (RMB thousands) | Item | Amount | | :--- | :--- | | Net income | 241,036 | | Add: Depreciation and amortization | 233,505 | | Add: Net interest expenses | 56,485 | | Add: Income tax expenses | 68,419 | | Add: Share-based compensation | 43,225 | | Other adjustments | (25,723) | | **Adjusted EBITDA** | **614,522** | Q3 2022 Reconciliation of Net Income to Adjusted Net Income (RMB thousands) | Item | Amount | | :--- | :--- | | Net income | 241,036 | | Add: D&A from business combination | 12,234 | | Add: Share-based compensation | 43,225 | | Add: Tax effects on non-GAAP adjustments | (2,209) | | **Adjusted Net Income** | **294,286** |

Financial Data and Key Metrics Changes - Total capacity expanded to 776MW, an increase of 72MW during the quarter, with 30 data centers in the asset portfolio [6][7] - Revenue for the quarter was RMB1,038.1 million, representing a 51.2% year-over-year growth [8][21] - Adjusted EBITDA was RMB544.3 million, a 60.8% year-over-year growth with a margin of 52.4% [8][24] - GAAP net income reached RMB199.6 million, a 206.3% year-over-year growth, with a historical high margin of 19.2% [8][22] Business Line Data and Key Metrics Changes - Total utilized capacity increased to 401MW, a 59.6% year-over-year growth [14] - Contracted and indication of interest capacity increased by 32MW during the quarter to 619MW, leading to a commitment rate of 84% [7][11] - 95% contracted & IOI ratio for in-service capacity, consistent with the previous quarter [11] Market Data and Key Metrics Changes - APAC emerging market capacity deployment accounts for around 15% of total capacity, with 89% of this capacity committed by clients [15] - The company has 117MW capacity either in service or under construction in Southeast Asia, targeting international customers like Microsoft and Google [34] Company Strategy and Development Direction - The company is focusing on the East Data, West Computation Policy to strengthen its foothold in key regions [16] - A new agreement with the local government in Datong, Shanxi Province aims to expand capacity to over 500MW, potentially making it the largest IDC campus in Asia [17][42] - Strategic partnership with Taiji Computer aims to leverage each other's strengths in technology and market access [18][35] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained demand from clients, with a conservative approach to forecasting ramp-up speeds [29] - The company maintains its full-year revenue and adjusted EBITDA guidance despite market fluctuations [40] - Management is optimistic about the Southeast Asian market, anticipating balanced demand and supply in the future [34] Other Important Information - The company closed a US$500 million syndicated loan to support further expansion [8][20] - Recent development of a waterless cooling technology, X-Cooling, aims to improve energy and water efficiency in data centers [19][68] Q&A Session Summary Question: Outlook for utilization rate ramp-up - Management indicated that the current ramp-up speed reflects strong business demand, but they will maintain a conservative nine-month forecast for moving rates [29] Question: Potential customers in Southeast Asia and competitive landscape - Management is optimistic about opportunities in Southeast Asia, with significant capacity already in place to serve international clients [34] Question: Expansion plan in Datong and utility costs - Management confirmed plans for a 500MW capacity in Datong, with adequate power supply in main campuses despite regional shortages [39][42] Question: Tax rate volatility - The tax rate varies due to operations in different countries and specific tax policies, with a compound effect from various jurisdictions [49][51] Question: Impact of market conditions on business - Management emphasized a cautious approach to forecasting, relying on actual commitments rather than industry trends [56] Question: Plans for green energy projects - The company will collaborate with partners for ecological power development in Datong, focusing on local resource utilization [64] Question: Adoption of X-Cooling technology - Management confirmed that the technology balances cost and efficiency, with significant potential for water savings [68]

Financial Data and Key Metrics Changes - Total capacity reached 704 megawatts, an increase of 31 megawatts during the quarter [4] - Revenue was RMB920.6 million, representing a 43.1% year-over-year growth [5] - Adjusted EBITDA was RMB494.5 million, a 60.7% year-over-year growth with a margin of 53.7%, a historical high [5][21] - Net income was RMB94.6 million, a 62.5% year-over-year growth with a margin of 10.3% [5][19] - Total debt to capital ratio was 35% and total debt to last 12 months adjusted EBITDA ratio was 3.4 [23] Business Line Data and Key Metrics Changes - In-service capacity increased by 58 megawatts to 498 megawatts [4] - Contracted capacity increased by 54 megawatts, bringing total contracted and IOI capacity to 690 megawatts [4] - Utilized capacity increased by 40 megawatts to 344 megawatts, a 45% year-over-year growth [13] Market Data and Key Metrics Changes - Majority of revenue generation related capacity is in the greater Beijing area, aligned with the East Data West Computing National Policy [14] - 70% of total capacity is in APAC emerging markets, with 89% contracted or IOI by the end of the first quarter [15] Company Strategy and Development Direction - The company aims to further penetrate APAC emerging markets and explore hyperscale demand from enterprise clients and cloud service providers [11] - The company is focused on maintaining stable operations and delivery schedules while optimizing management and execution teams [40] - The objective is to have overseas business account for 30% of total portfolio in the long run [39] Management Comments on Operating Environment and Future Outlook - Management noted that the pandemic has led to increased demand from key clients, particularly ByteDance [27] - Despite challenges from COVID-related lockdowns, the company has managed to maintain project delivery schedules [36] - The company raised its full-year 2022 revenue and adjusted EBITDA guidance due to strong business momentum [6][28] Other Important Information - The company finalized a US$500 million syndication loan financing, which was oversubscribed, to support future development [16] - The company has a healthy commitment profile with over 90% of contracts being 10 years long [12] Q&A Session Summary Question: Current outlook on demand from ByteDance - Management indicated that the pandemic has actually increased demand from ByteDance, with more urgent requirements from the client [27] Question: Concerns about EBITDA margin guidance - Management explained that the high EBITDA margin in Q1 was due to lower utility costs and a decrease in maintenance and SG&A expenses, but expects some normalization in the second half of the year [31] Question: Impact of lockdown on capacity delivery - Management stated that the lockdown has had minimal impact on operations, with a faster ramp-up rate observed from key clients [34] Question: Competitive advantages in overseas markets - Management highlighted strong business momentum in APAC emerging markets and ongoing discussions with potential clients in Indonesia and Thailand [39] Question: Plans for reducing revenue concentration from ByteDance - Management is actively exploring opportunities with other cloud clients and expects diversification to occur alongside client growth [48]

PART I [ITEM 3. KEY INFORMATION](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) Outlines Chindata's VIE-based holding structure for China operations, presenting consolidated financial data and key risks like HFCAA and client concentration [Holding Company Structure and Contractual Arrangements](index=6&type=section&id=Holding%20Company%20Structure%20and%20Contractual%20Arrangements) Details Chindata's Cayman Islands holding structure operating in China via VIEs due to PRC restrictions, outlining control, cash flows, dividend limits, and HFCAA delisting risks - Chindata operates in China via a VIE structure due to PRC foreign ownership restrictions, with VIEs contributing **93.1% of total revenues in 2021**, up from 93.2% in 2020[16](index=16&type=chunk) - The company faces significant risks from the Holding Foreign Companies Accountable Act (HFCAA), potentially leading to **delisting of ADSs as early as 2024** due to non-inspection of its China-based auditor by the PCAOB[37](index=37&type=chunk)[39](index=39&type=chunk)[284](index=284&type=chunk) Cash Flows Between WFOEs and VIEs | Year | Net Service Fees Paid by VIEs to WFOEs (RMB million) | | :--- | :--- | | 2019 | 254.2 | | 2020 | 1,256.3 | | 2021 | 1,801.8 | - As of December 31, 2021, net assets of PRC subsidiaries and VIEs subject to dividend restrictions totaled **RMB 3,837.9 million**[30](index=30&type=chunk) [Financial Information Related to Our VIEs](index=11&type=section&id=Financial%20Information%20Related%20to%20Our%20VIEs) Provides condensed consolidating financial schedules for the parent, subsidiaries, and VIEs for 2019-2021, showing financial position, operations, and cash flows, with VIEs generating **RMB 2,656.0 million** in 2021 revenue Condensed Consolidating Balance Sheet Data as of Dec 31, 2021 (RMB '000) | Account | Chindata Group Holdings Limited | Subsidiaries | VIEs and Their Subsidiaries | Consolidated Totals | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 10,187,556 | 18,773,999 | 2,536,014 | 18,681,951 | | **Total Liabilities** | 72,924 | 15,222,809 | 2,422,668 | 8,567,319 | Condensed Consolidating Statement of Operations Data for the Year Ended Dec 31, 2021 (RMB '000) | Account | Chindata Group Holdings Limited | Subsidiaries | VIEs and Their Subsidiaries | Consolidated Totals | | :--- | :--- | :--- | :--- | :--- | | **Third-party revenue** | - | 196,272 | 2,656,005 | 2,852,277 | | **Net income** | 316,420 | 318,481 | 2,942 | 316,420 | Condensed Consolidating Cash Flow Data for the Year Ended Dec 31, 2021 (RMB '000) | Account | Chindata Group Holdings Limited | Subsidiaries | VIEs and Their Subsidiaries | Consolidated Totals | | :--- | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | (6,049) | 610,878 | 460,676 | 1,065,505 | | **Net cash used in investing activities** | (2,887,209) | (3,755,022) | (133,441) | (3,952,971) | | **Net cash from financing activities** | (4,285) | 4,121,118 | (1,071) | 1,293,061 | [Risk Factors](index=14&type=section&id=D.%20Risk%20Factors) Outlines principal risks including high client concentration, capital-intensive operations, VIE structure uncertainties, evolving PRC regulations, and potential HFCAA delisting - The company has high revenue dependency on a limited number of clients, with **ByteDance accounting for 83.2% of total revenues in 2021**[71](index=71&type=chunk) - The company's China-based auditor is not inspected by the PCAOB, potentially leading to **ADS delisting by 2024** under the Holding Foreign Companies Accountable Act (HFCAA)[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk) - The dual-class share structure grants Class B shares **15 votes per share**, with Bain Capital Entities and Mr. Jing Ju holding **93.6% of aggregate voting power** as of March 31, 2022[296](index=296&type=chunk)[297](index=297&type=chunk) - Significant risks arise from evolving PRC cybersecurity and data protection regulations, including the Data Security Law and Revised Cybersecurity Review Measures, potentially impacting operations and requiring costly compliance[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=59&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) Provides a comprehensive overview of Chindata Group, detailing its history, business operations, organizational structure, and physical assets, including its formation and market position [History and Development of the Company](index=59&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Details Chindata Group's 2019 formation via a Bain Capital-led merger, its Cayman Islands incorporation, and its September 2020 Nasdaq IPO raising **US$711.8 million** - The company was formed in **2019** through the combination of Chindata's China business and Bridge Data Centres' operations, led by Bain Capital[350](index=350&type=chunk)[352](index=352&type=chunk) - The company's ADSs began trading on Nasdaq on **September 30, 2020**, with the IPO and private placements raising approximately **US$711.8 million** in net proceeds[356](index=356&type=chunk) [Business Overview](index=61&type=section&id=B.%20Business%20Overview) Chindata is a leading hyperscale data center provider in Asia-Pacific, operating **440 MW** in service as of 2021, emphasizing full-stack solutions, strategic site selection, and a commitment to **100% renewable energy** - As of December 31, 2021, the company operated **14 hyperscale data centers** with **440 MW capacity in service**, of which **87% was contractually committed**[359](index=359&type=chunk)[363](index=363&type=chunk)[372](index=372&type=chunk) Data Center Capacity (MW) as of December 31 | Status | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **In Service** | 193 | 291 | 440 | | **Under Construction** | N/A | N/A | 233 | - The largest client, ByteDance, accounted for **83.2% of total revenues in 2021** and typically signs ten-year service contracts[407](index=407&type=chunk) - The company's growth plan aligns with China's \"East Data West Computing\" policy, leveraging large-scale campuses in national computing hubs[417](index=417&type=chunk)[426](index=426&type=chunk) - Chindata is committed to sustainability, targeting **100% clean and renewable energy** for its data centers, a first for a China-headquartered operator[422](index=422&type=chunk) [Organizational Structure](index=92&type=section&id=C.%20Organizational%20Structure) Details Chindata's Cayman Islands holding company structure operating in China via VIEs to comply with foreign ownership restrictions, outlining key contractual agreements for control and financial consolidation - The company uses a VIE structure in China to comply with foreign ownership restrictions, with VIEs contributing **93.1% of total revenue in 2021**[574](index=574&type=chunk)[16](index=16&type=chunk) - Control over VIEs is maintained through four key contractual agreements: Powers of Attorney, Equity Pledge, Exclusive Business Cooperation, and Purchase Option Agreements[575](index=575&type=chunk)[576](index=576&type=chunk)[579](index=579&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=96&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) Analyzes Chindata's 2021 financial performance, showing **55.8% revenue growth** to **RMB 2,852.3 million**, a turnaround to **RMB 316.4 million net income**, and robust Adjusted EBITDA, alongside liquidity and capital resources [Operating Results](index=96&type=section&id=A.%20Operating%20Results) Reviews 2021 operating results, highlighting **55.8% revenue growth** to **RMB 2,852.3 million**, a shift to **RMB 316.4 million net income**, and **66.5% Adjusted EBITDA growth** to **RMB 1,418.9 million** Financial Performance Summary (2020 vs. 2021) | Metric | 2020 (RMB million) | 2021 (RMB million) | 2021 (US$ million) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | 1,831.1 | 2,852.3 | 447.6 | +55.8% | | **Gross Profit** | 732.8 | 1,199.6 | 188.2 | +63.7% | | **Net (Loss) Income** | (283.3) | 316.4 | 49.7 | N/A | | **Adjusted EBITDA** | 852.2 | 1,418.9 | 222.7 | +66.5% | - Total revenues increased primarily due to robust growth in colocation services, rising from **RMB 1.7 billion in 2020 to RMB 2.6 billion in 2021**[638](index=638&type=chunk) - Operating expenses decreased from **RMB 704.6 million in 2020 to RMB 524.5 million in 2021**, mainly due to reduced share-based compensation and one-off IPO-related consulting fees[641](index=641&type=chunk)[643](index=643&type=chunk) [Liquidity and Capital Resources](index=105&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Details liquidity and capital resources, with **RMB 4,390.3 million** cash as of 2021, **RMB 1,065.5 million** net operating cash flow, and **RMB 3,616.9 million** capital expenditures, supported by bank loans Key Liquidity and Cash Flow Data (RMB million) | Metric | 2020 | 2021 | | :--- | :--- | :--- | | **Cash and cash equivalents** | 6,705.6 | 4,390.3 | | **Net cash from operating activities** | 664.9 | 1,065.5 | | **Net cash used in investing activities** | (2,769.3) | (3,953.0) | | **Net cash from financing activities** | 8,188.8 | 1,293.1 | - Capital expenditures for 2021 totaled **RMB 3,616.9 million (US$567.6 million)**, primarily for data center property, equipment, and land use rights[672](index=672&type=chunk) - As of December 31, 2021, total bank loans were **RMB 5.5 billion**, with capital expenditure commitments of **RMB 841.6 million**[673](index=673&type=chunk)[1145](index=1145&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=113&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) Details leadership, compensation, board structure, and employee base, noting Huapeng Wu's CEO appointment, **RMB 8.5 million** executive compensation in 2021, **1,315 employees**, and Bain Capital's **85.6% voting control** - Huapeng Wu was appointed Director and CEO in **February 2022**, succeeding founder Jing Ju, who became Non-Executive Vice Chairman[722](index=722&type=chunk)[727](index=727&type=chunk) - In 2021, aggregate cash and benefits paid to executive officers totaled **RMB 8.5 million (US$1.3 million)**, with non-executive directors receiving **US$260,000** in cash[735](index=735&type=chunk) - As of December 31, 2021, the company had **1,315 employees**, with **1,209** primarily based in China[780](index=780&type=chunk)[783](index=783&type=chunk) Major Shareholder Voting Power (as of March 31, 2022) | Shareholder | % of Aggregate Voting Power | | :--- | :--- | | **Bain Capital Entities** | 85.6% | | **Jing Ju (via Abiding Joy Limited)** | 8.0% | [ITEM 8. FINANCIAL INFORMATION](index=126&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) Confirms inclusion of consolidated financial statements, discloses an arbitration proceeding in India not expected to be material, and states no plans for future cash dividends - The company has no plans to pay cash dividends in the foreseeable future, intending to retain earnings for business expansion[796](index=796&type=chunk) - An Indian subsidiary is in arbitration with a local contractor, but management does not expect a material adverse effect on financial position[794](index=794&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=127&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) Details corporate governance, including dual-class share structure, material contracts, Chinese exchange controls, and taxation considerations, noting the company's non-PFIC status in 2021 - The company has a dual-class share structure, with Class B ordinary shares holding **15 votes per share** compared to Class A's one vote[800](index=800&type=chunk) - A registration rights agreement grants major shareholders, including Bain Investors, demand and piggyback registration rights for their shares[847](index=847&type=chunk)[850](index=850&type=chunk)[851](index=851&type=chunk) - The company does not believe it was a Passive Foreign Investment Company (PFIC) for the year ended December 31, 2021, nor does it expect to be one in the foreseeable future[879](index=879&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=140&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Details market risk exposures, including significant client concentration (**83.2% of 2021 revenue**), interest rate risk (1% change impacts **RMB 51.7 million**), and foreign exchange rate risk from RMB fluctuations - The company faces significant customer concentration risk, with its top client accounting for **83.2% of total revenues in 2021**[900](index=900&type=chunk) - The company is exposed to interest rate risk; a hypothetical **1% change in annual interest rates** would impact total interest expense by approximately **RMB 51.7 million**[901](index=901&type=chunk) - The company faces foreign currency exchange rate risk, primarily from RMB fluctuations against the U.S. dollar, as most business is transacted in RMB[903](index=903&type=chunk)[904](index=904&type=chunk) PART II [ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](index=144&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) Reports on the use of **US$711.8 million** net proceeds from the September 2020 IPO, with approximately **US$485.5 million** used for business expansion and general corporate purposes by December 31, 2021 - The company raised approximately **US$711.8 million** in net proceeds from its September 2020 IPO and concurrent private placements[918](index=918&type=chunk) - As of December 31, 2021, approximately **US$485.5 million** of IPO net proceeds were used for business expansion and general corporate purposes[919](index=919&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=144&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Addresses internal controls, confirming effective disclosure controls and remediation of a material weakness in internal control over financial reporting as of December 31, 2021 - Management concluded the company's disclosure controls and procedures were **effective** as of December 31, 2021[921](index=921&type=chunk) - A previously identified material weakness regarding insufficient accounting personnel with U.S. GAAP and SEC experience was **remediated** as of December 31, 2021[924](index=924&type=chunk)[925](index=925&type=chunk) - Management concluded internal control over financial reporting was **effective** as of December 31, 2021, with an **unqualified opinion** from the independent auditor[923](index=923&type=chunk)[926](index=926&type=chunk) [ITEM 16G. CORPORATE GOVERNANCE](index=146&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) Details corporate governance practices as a foreign private issuer and \"controlled company,\" following Cayman Islands home country practices in lieu of certain Nasdaq requirements - As a foreign private issuer, the company follows Cayman Islands home country practices, exempting it from certain Nasdaq corporate governance standards[935](index=935&type=chunk) - As a \"controlled company\" under Nasdaq rules, it relies on exemptions from requirements for a majority-independent board and fully independent committees[935](index=935&type=chunk) PART III [ITEM 18. FINANCIAL STATEMENTS](index=147&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) Contains audited consolidated financial statements for 2019-2021, prepared under U.S. GAAP, with an unqualified opinion from Ernst & Young Hua Ming LLP on both financial statements and internal controls Consolidated Balance Sheet Highlights (as of Dec 31, 2021) | Account | Amount (RMB thousands) | Amount (US$ thousands) | | :--- | :--- | :--- | | **Total Assets** | 18,681,951 | 2,931,605 | | **Total Liabilities** | 8,567,319 | 1,344,399 | | **Total Shareholders' Equity** | 10,114,632 | 1,587,206 | Consolidated Statement of Comprehensive Income Highlights (Year ended Dec 31, 2021) | Account | Amount (RMB thousands) | Amount (US$ thousands) | | :--- | :--- | :--- | | **Total Revenue** | 2,852,277 | 447,584 | | **Gross Profit** | 1,199,613 | 188,245 | | **Net Income** | 316,420 | 49,653 | | **Basic Earnings Per Share** | 0.44 | 0.07 | Consolidated Statement of Cash Flows Highlights (Year ended Dec 31, 2021) | Account | Amount (RMB thousands) | Amount (US$ thousands) | | :--- | :--- | :--- | | **Net cash from operating activities** | 1,065,505 | 167,202 | | **Net cash used in investing activities** | (3,952,971) | (620,307) | | **Net cash from financing activities** | 1,293,061 | 202,909 |

Financial Data and Key Metrics Changes - For the full year 2021, revenue totaled RMB2.852 billion, representing a year-over-year increase of 55.8%, which was 0.8% higher than the upper range of guidance [13] - Adjusted EBITDA for the year was RMB1.49 billion, reflecting a year-over-year increase of 66.5%, exceeding guidance by 1.5% [13] - Net income turned positive at RMB316.4 million for 2021, with a margin of 11.1% [13][41] - In Q4 2021, revenue increased by 41.4% year-over-year to RMB781.7 million, driven by robust growth in colocation services [38] Business Line Data and Key Metrics Changes - Total capacity increased by 85 megawatts in Q4 2021, reaching 673 megawatts, with in-service capacity increasing by 70 megawatts to 440 megawatts [12] - Utilized capacity increased by 36 megawatts to 304 megawatts, with a utilization ratio of 69% [34] - The company added four new projects under construction, contributing to a total of 87 megawatts of IOI capacity [32] Market Data and Key Metrics Changes - The demand for data centers in the APAC emerging markets is expected to grow at a CAGR of over 20% over the next five years [14] - The East Data West Computing policy is anticipated to reshape the industry landscape favorably for the company, redirecting computing power demand to energy-abundant areas in the west [15][16] Company Strategy and Development Direction - The company aims to deepen its presence in APAC emerging markets and advance its geographic layout in key clusters designated under the East Data West Computing policy [24] - Plans include pursuing mergers, acquisitions, and joint ventures to enhance client base and geographical development [24] - The company is committed to a diversified renewable energy sourcing model, leveraging its energy-abundant region layout [24] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on opportunities in China, driven by competitive advantages such as a full-stack solution and strong customer relationships [20][22] - The company expects the industry to enter a period of consolidation, which may provide opportunities for asset integration through mergers and acquisitions [18] - Management remains optimistic about continued financial momentum in 2022, with guidance for revenue and adjusted EBITDA reflecting significant year-over-year growth [45] Other Important Information - The company has a strong cash position with RMB5.241 billion in cash and a net debt position of RMB104.1 million [43] - The company is exploring dual-primary or secondary listing options in Hong Kong following recent regulatory changes [37] Q&A Session Summary Question: Regarding prepayments for the East Data West Computing policy and customer demand in Gansu Province - Management highlighted the first mover advantage in power-abundant regions and the strategic allocation of resources in areas like Zhangjiakou and Datong [48][49] Question: Customer diversification progress and market price competition - Management confirmed efforts in client diversification, securing projects with international cloud providers and noted stable pricing due to long-term contracts [66][68] Question: Forecast on upcoming costs and green power usage - Management explained that the deployment strategy in energy-abundant regions helps mitigate cost increases, and they are exploring multiple avenues for acquiring green energy [71][75]

Financial Data and Key Metrics Changes - Quarterly revenue increased by 59% year-over-year to RMB 740.8 million, with GAAP net income at RMB 78.4 million and a net margin of 10.6% [7][24] - Adjusted EBITDA rose to RMB 368.4 million, reflecting a year-over-year increase of 61.6% with a margin of 49.7% [7][25] - Total IT capacity in service reached 370 megawatts, a 9 megawatt increase from the previous quarter, with a utilization ratio stable at 72% [6][13] Business Line Data and Key Metrics Changes - Utilized capacity increased by 17 megawatts over the quarter to 268 megawatts, indicating a year-over-year growth of 53.3% [6][24] - The company added approximately 9 megawatts in service capacity in response to client demand for high-density deployments [12] Market Data and Key Metrics Changes - The company achieved a confirmed demand of 27 megawatts capacity from a leading Chinese cloud computing service provider [9] - In Malaysia, a new green field project was launched with a capacity of over 80 megawatts, expected to be delivered in phases starting from 2022 [10] Company Strategy and Development Direction - Chindata is focused on a capacity build-up strategy and aims to support clients' rapid expansion and zero-carbon transformation in the Asia Pacific emerging market [5][14] - The company is committed to renewable energy and has established a green power consumption ecosystem, including direct green power trading and renewable energy power station development [15][20] Management's Comments on Operating Environment and Future Outlook - Management noted that the impact of power shortages on operations was very limited, attributing this to strategic geographic deployment in energy-abundant regions [23][42] - The overall demand for hyperscale data centers in the Asia-Pacific market is expected to remain healthy, with a greater demand for the company's unique hyperscale green field model [40] Other Important Information - The company has been recognized for its ESG initiatives, becoming a corporate member of the United Nations Global Compact and joining the RE100 initiative [18][19] - Fitch reaffirmed its BBB- investment rating for the company, indicating solid credit profile supported by strategic location and renewable energy use [8][17] Q&A Session Summary Question: Details on new major customer acquisition - Management confirmed the new project involves a top two Chinese cloud computing service provider, with a capacity of 27 megawatts to be delivered in phases [30][31] Question: Recent contract pricing trends - Management indicated that pricing remains stable, with a slight downward trend observed in the industry, but their unique model provides a competitive advantage [33][34] Question: Future growth direction in Southeast Asia - Management highlighted progress in Malaysia and Thailand, with ongoing exploration of opportunities in other Southeast Asian countries [37][39] Question: Impact of power crunch - Management stated the impact was minimal, with a focus on energy-abundant locations providing a competitive edge [41][42] Question: Green energy initiatives and CapEx outlook - Management emphasized the long-term strategy for renewable energy development and indicated that CapEx for next year is expected to be higher to support new projects [44][74] Question: M&A strategy - Management expressed interest in M&A opportunities but emphasized a stringent evaluation process to ensure synergies and reasonable valuations [68][70] Question: Current competition landscape and demand outlook - Management reiterated the importance of energy strategy and geographic deployment, expecting stable demand despite competition [51][53]