BEIJING, March 13, 2025 /PRNewswire/ -- VNET Group, Inc. (Nasdaq: VNET) ("VNET" or the "Company"), a leading carrier-neutral and cloud-neutral internet data center services provider in China, today announced the pricing of its offering (the "Notes Offering") of US$430 million in aggregate principal amount of 2.50% convertible senior notes due 2030 (the "Notes"). The Notes Offering is expected to close on or about March 17, 2023, subject to the satisfaction of customary closing conditions.The Notes will bear ...

BEIJING, March 13, 2025 /PRNewswire/ -- VNET Group, Inc. (Nasdaq: VNET) ("VNET" or the "Company"), a leading carrier-neutral and cloud-neutral internet data center services provider in China, today announced the commencement of a proposed offering by the Company of US$400 million aggregate principal amount of its convertible senior notes due 2030 (the "Notes"), subject to market and other conditions (the "Notes Offering"). The Notes will be senior, unsecured obligations of the Company, and will accrue inter ...

Financial Data and Key Metrics Changes - The company reported a net revenue increase of 18.3% year-over-year to RMB2.25 billion for Q4 2024, and a full-year net revenue of RMB8.26 billion, up 11.4% year-over-year [11][12][38] - Adjusted EBITDA for Q4 2024 increased by 63.8% year-over-year to RMB721.3 million, with a full-year adjusted EBITDA of RMB2.43 billion, reflecting a 19.1% increase from the prior year [12][38] - The company achieved a net profit of RMB248 million for the full year 2024, marking a turnaround from a net loss of RMB2.6 billion in 2023 [12][38] Business Line Data and Key Metrics Changes - The wholesale business revenue reached a record high of RMB665 million for Q4 2024, representing a year-over-year growth rate of 125.4% [12][39] - Retail IDC business revenue remained stable at RMB964.8 million for Q4 2024, with a utilization rate of 63.5% for retail capacity [40][30] - The wholesale capacity in service increased by 127 megawatts quarter-over-quarter to 486 megawatts, with utilized capacity rising to 353 megawatts [9][26] Market Data and Key Metrics Changes - The company noted a significant uptick in wholesale customer demand, with the pace of orders accelerating from around 24 months to 6-12 months [10] - The Greater Beijing area is projected to experience a supply shortage in wholesale IDC services by 2025, with the Yangtze River Delta expected to face similar issues by 2026 [22][70] - The overall utilization rate of wholesale data centers in the Greater Beijing area is expected to reach 85% by 2025, indicating a potential supply shortage [23] Company Strategy and Development Direction - The company plans to utilize joint venture structures to enhance efficiency and facilitate high-quality business development [15] - The focus for 2025 includes a capital expenditure range of RMB10 billion to RMB12 billion, aimed at supporting a delivery plan of 400 to 450 megawatts [16][44] - The company aims to capitalize on the growing demand for high-performance data centers driven by advancements in AI technology [17][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of China's IDC market, particularly due to the AI boom and increasing demand for data center services [17][34] - The company anticipates that the demand for high-performance data centers will continue to rise, driven by the integration of AI into various industries [20][34] - Management highlighted the importance of maintaining a strong cash flow and prudent debt management to support future growth [41][42] Other Important Information - The company achieved recognition in the S&P Global Sustainability Yearbook 2025, reflecting its commitment to ESG practices [45][46] - The company expects to deliver 400 to 450 megawatts in the next 12 months, representing a significant increase from 2024's total deliveries [16][32] Q&A Session Summary Question: Can management provide details on the arrangement of CapEx over 2025 and how much will be covered through funds from risk projects? - Management indicated that over 90% of the 2025 CapEx will be allocated to the wholesale IDC business, with a focus on high-power density retrofits for retail IDC [53][54] Question: What is the potential impact of AI-related orders on the retail segment? - Management noted that the demand for retail IDC services is expected to grow due to the adoption of AI applications, with higher pricing for AI-specific deployments [61] Question: Can management explain the framework partnership with Changzhou Gaoxin Group and its impact on revenue or CapEx guidance? - Management clarified that the 64-megawatt order from the joint venture will not be incorporated into CapEx and will generate revenue through management fees [67][68] Question: How should we think about the supply-demand dynamics in the market? - Management highlighted that supply shortages are expected in key regions, with most competitors focusing on overseas markets, leading to less competition domestically [70][71] Question: What are the expectations for rental prices in the next one or two years? - Management indicated that rental prices are expected to remain stable, driven by market demand, despite some supply constraints [79] Question: How will the company fund the RMB10 billion CapEx in 2025? - Management explained that funding will come from operating cash flow, potential REIT financing, and low-interest loans, ensuring sufficient capital for expansion [87][95]

Financial Data and Key Metrics Changes - The company reported a net revenue increase of 18.3% year-over-year to RMB2.25 billion for Q4 2024, and a full-year net revenue of RMB8.26 billion, up 11.4% year-over-year [11][12][38] - Adjusted EBITDA for Q4 2024 rose by 63.8% year-over-year to RMB721.3 million, with a full-year adjusted EBITDA of RMB2.43 billion, reflecting a 19.1% increase from the prior year [12][38] - The company achieved a net profit of RMB248 million for the full year, marking a turnaround from a net loss of RMB2.6 billion in 2023 [12][38] Business Line Data and Key Metrics Changes - The wholesale business revenue reached a record high of RMB665 million for Q4 2024, representing a year-over-year growth rate of 125.4% [12][39] - Retail business revenue remained stable at RMB964.8 million for Q4 2024, with a utilization rate of 63.5% for retail capacity [40][30] - The wholesale capacity in service increased by 127 megawatts quarter-over-quarter to 486 megawatts, with utilized capacity rising to 353 megawatts [9][26] Market Data and Key Metrics Changes - The company noted a significant uptick in wholesale customer demand, with the pace of orders accelerating from around 24 months to 6-12 months [10] - The Greater Beijing area is projected to experience a supply shortage in wholesale IDC services by 2025, followed by the Yangtze River Delta region in 2026 [22][70] - The overall utilization rate of wholesale data centers in the Greater Beijing area is expected to reach 85% by 2025, indicating a potential supply shortage [23] Company Strategy and Development Direction - The company plans to utilize joint venture structures to enhance efficiency and facilitate high-quality business development [15] - A strong focus on AI-related opportunities is evident, with expectations of continued high demand for high-performance data centers driven by advancements in AI technology [17][35] - The company aims to expand its high-performance data center network to meet the growing demands of the AI era [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of China's IDC market, driven by surging demand due to the AI boom [47] - The company anticipates total net revenues for 2025 to be between RMB9.1 billion to RMB9.3 billion, representing year-over-year growth of 10% to 13% [16] - Management highlighted the importance of maintaining a strong cash flow and prudent debt management to support future growth [41][42] Other Important Information - The company achieved recognition in the S&P Global Sustainability Yearbook 2025, reflecting its commitment to ESG practices [45][46] - Capital expenditures for 2025 are expected to be between RMB10 billion to RMB12 billion, representing a significant increase to support the delivery plan [16][44] Q&A Session Summary Question: Details on CapEx arrangement for 2025 and impact of AI-related orders on retail segment - Management indicated that over 90% of the 2025 CapEx will be allocated to the wholesale IDC business, with a focus on high-power density retrofits for retail IDC [53][54] - AI-related orders are expected to boost demand in the retail segment, with higher pricing trends for AI-specific deployments [58][61] Question: Insights on the partnership with Changzhou Gaoxin Group and supply-demand dynamics - The 64 megawatts JV project with Changzhou Gaoxin Group will not impact CapEx as it will not be on the balance sheet, generating revenue through management fees [67] - Supply shortages are anticipated in the Greater Beijing area by 2025 and in the Yangtze River Delta by 2026, with limited competition as peers focus on overseas markets [69][71] Question: Expectations for rental prices and unit CapEx - Management expects rental prices to stabilize, with a slight decrease in unit CapEx due to increased use of domestic equipment [76][82] Question: Retail revenue growth potential and financing for CapEx - Retail revenue is expected to recover to mid-single-digit growth, driven by demand from SMEs adopting AI technologies [86][88] - Financing for the RMB10 billion CapEx will be supported by operating cash flow, REITs, and favorable loan conditions [87][95] Question: Customer preferences between in-house and third-party data centers - Most customers prefer rental options from third-party providers, with a growing trend towards hybrid models combining both in-house and rental solutions [105][106]

VNET Group, Inc. Earnings Presentation for 4Q24 and FY2024 March 12, 2025 Disclaimer This presentation has been prepared by VNET Group, Inc. (the "Company") solely for informational purposes and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions prese ...

Financial Performance - Total net revenues for Q4 2024 increased by 18.3% to RMB2.25 billion (US$307.8 million) from RMB1.90 billion in Q4 2023[6] - Adjusted EBITDA for Q4 2024 rose by 63.8% to RMB721.3 million (US$98.8 million), with an adjusted EBITDA margin of 32.1%, up from 23.2% in Q4 2023[26] - Full-year 2024 net income increased to RMB248.4 million (US$34.0 million), a significant recovery from a net loss of RMB2.60 billion in 2023[9] - Total net revenues for the full year of 2024 were RMB8.26 billion (US$1.13 billion), an increase of 11.4% from RMB7.41 billion in 2023[31] - Net revenues from IDC business increased by 16.1% to RMB5.78 billion (US$791.8 million) from RMB4.98 billion in 2023[31] - Gross profit for the full year of 2024 was RMB1.83 billion (US$251.0 million), representing a 41.8% increase from RMB1.29 billion in 2023[33] - Adjusted EBITDA for the full year of 2024 was RMB2.43 billion (US$332.9 million), a 19.1% increase from RMB2.04 billion in 2023[37] - Net income attributable to VNET Group, Inc. for the full year of 2024 was RMB183.2 million (US$25.1 million), compared to a net loss of RMB2.64 billion in 2023[38] - Basic and diluted earnings per share for the full year of 2024 were RMB0.11 (US$0.02) and RMB0.02 (US$0.003), respectively[39] Revenue Breakdown - Wholesale IDC business revenues surged by 125.4% to RMB665.2 million (US$91.1 million) in Q4 2024, compared to RMB295.1 million in the same period of 2023[21] - Retail IDC business revenues slightly decreased by 1.1% to RMB964.8 million (US$132.2 million) in Q4 2024[21] Operating Expenses - Total operating expenses in Q4 2024 were RMB267.9 million (US$36.7 million), significantly lower than RMB2.50 billion in the same period of 2023[23] - Total operating expenses for the full year of 2024 were RMB1.16 billion (US$159.3 million), significantly reduced from RMB3.26 billion in 2023[35] Capacity and Utilization - Capacity in service reached 486MW as of December 31, 2024, up from 332MW a year earlier, with 406MW under construction[9] - Utilization rate of wholesale capacity was 72.6% as of December 31, 2024, compared to 65.8% a year prior[9] - Commitment rate for capacity in service was 98.7% as of December 31, 2024, compared to 98.1% a year earlier[9] Cash Flow and Financing - The company obtained new debt financing and refinancing facilities totaling RMB5.68 billion (US$777.7 million) during the full year of 2024[40] - Cash and cash equivalents decreased from RMB 2,243,537 to RMB 1,492,436, a decline of 33.5%[53] - Cash, cash equivalents, and restricted cash at the end of the period totaled RMB 5,098,987 thousand, up from RMB 3,024,214 thousand at the beginning of the period[60] - Financing activities generated net cash of RMB 2,757,673 thousand, primarily from proceeds of bank borrowings and issuance of ordinary shares[60] Assets and Liabilities - Total assets increased from RMB 30,385,903 to RMB 32,357,042, representing a growth of 6% year-over-year[53] - Current liabilities decreased from RMB 11,437,132 to RMB 9,343,415, a reduction of approximately 18.3%[53] - Non-current assets rose from RMB 20,562,425 to RMB 25,536,894, reflecting a significant increase of 24.2%[53] - Total current assets decreased from RMB 9,823,478 to RMB 6,820,148, a decline of 30.5%[53] - Total non-current liabilities increased from RMB 12,434,388 to RMB 16,092,808, an increase of 29.2%[53] Shareholder Equity - Total shareholders' equity increased from RMB 6,014,415 to RMB 6,514,383, an increase of 8.3%[54] - Long-term borrowings increased from RMB 5,113,521 to RMB 7,767,390, a rise of 51.8%[53] - Accumulated deficit improved from RMB (11,016,323) to RMB (10,859,888), a reduction of 1.4%[53] Quarterly Performance - Net revenues for the three months ended December 31, 2024, were RMB 2,246,389, representing a 5.9% increase from RMB 2,120,794 in the previous quarter[55] - Operating income for the three months ended December 31, 2024, was RMB 98,869, a significant increase from RMB 11,767 in the previous quarter[55] - The net loss attributable to VNET Group, Inc. for the three months ended December 31, 2024, was RMB 11,096, a significant improvement from a net loss of RMB 2,442,788 in the same period last year[55] - Basic loss per share for the three months ended December 31, 2024, was (0.01), compared to (2.65) in the same period last year[55] Other Financial Metrics - Adjusted cash gross profit for Q4 2024 was RMB923.9 million (US$126.6 million), reflecting a 24.6% increase year-over-year[17] - Adjusted cash gross profit for the full year of 2024 was RMB3.34 billion (US$457.2 million), compared to RMB2.98 billion in 2023[34] - The adjusted cash gross margin for the three months ended December 31, 2024, was 41.1%, compared to 40.6% in the previous quarter[57] - Interest income for the twelve months ended December 31, 2024, was RMB 27,958, down from RMB 41,802 in the previous year[55] - The company recognized an impairment of goodwill amounting to RMB 1,364,191 for the twelve months ended December 31, 2023[57] Capital Expenditures - The company incurred RMB 1,017,474 thousand in capital expenditures for property and equipment during the reporting period[60]

Core Viewpoint - VNET Group, Inc. reported strong financial results for Q4 and full year 2024, driven by significant growth in its wholesale IDC business, which is benefiting from increased demand for AI-driven services in China [2][8][27]. Financial Highlights - Total net revenues for Q4 2024 were RMB2.25 billion (US$307.8 million), an increase of 18.3% from RMB1.90 billion in Q4 2023 [8][13]. - Net revenues from the IDC business rose by 28.3% to RMB1.63 billion (US$223.3 million) compared to RMB1.27 billion in the same period of 2023 [14]. - Wholesale IDC revenues surged by 125.4% to RMB665.2 million (US$91.1 million) from RMB295.1 million in Q4 2023 [8][28]. - Retail IDC revenues slightly decreased by 1.1% to RMB964.8 million (US$132.2 million) from RMB975.2 million in Q4 2023 [8][28]. - Adjusted EBITDA for Q4 2024 was RMB721.3 million (US$98.8 million), reflecting a year-over-year increase of 63.8% [21]. Operational Highlights - The company secured multiple significant orders in Q4 2024, including a 32MW order from an internet customer in the Yangtze River Delta and a 100MW framework agreement in Ulanqab [2]. - Capacity in service increased to 486MW as of December 31, 2024, up from 332MW a year earlier [8]. - The utilization rate of wholesale capacity was 72.6% as of December 31, 2024, compared to 65.8% a year prior [8]. Full Year Financial Results - Total net revenues for the full year 2024 reached RMB8.26 billion (US$1.13 billion), an increase of 11.4% from RMB7.41 billion in 2023 [27]. - Net income attributable to VNET Group, Inc. for 2024 was RMB248.4 million (US$34.0 million), a significant recovery from a net loss of RMB2.60 billion in 2023 [35]. - Adjusted cash gross profit for the full year was RMB3.34 billion (US$457.2 million), up 12.1% from RMB2.98 billion in 2023 [31]. Business Outlook - The company anticipates total net revenues for 2025 to be between RMB9,100 million to RMB9,300 million, representing year-over-year growth of 10% to 13% [38]. - Adjusted EBITDA for 2025 is expected to range from RMB2,700 million to RMB2,760 million, indicating a growth of 11% to 14% year-over-year [38].

Core Viewpoint - VNET Group, Inc. is set to report its unaudited fourth quarter and full year 2024 financial results on March 12, 2025, before U.S. market opens [1] Company Overview - VNET Group, Inc. is a leading carrier- and cloud-neutral internet data center services provider in China, offering hosting, IDC services, cloud services, and business VPN services [4] - The company operates in over 30 cities across China, serving a diverse base of more than 7,000 enterprise customers from various industries, including internet companies, government entities, and small to mid-sized enterprises [4]

Group 1 - The article emphasizes the value investment strategy focusing on Asia-listed stocks, particularly those with significant discrepancies between market price and intrinsic value, including deep value balance sheet bargains and wide moat stocks [1] - VNET Group (NASDAQ: VNET) is highlighted as a stock still worthy of a Buy recommendation, with favorable corporate and market developments influencing this view [1] - The author provides insights and updates on investment opportunities in the Hong Kong market, targeting deep value and high-quality businesses [1]

Core Insights - VNET Group, Inc. has been included in the S&P Global Sustainability Yearbook 2025, marking its first appearance in the global edition after two years in the China edition, highlighting its strong ESG performance and global influence in sustainable development [1][3] Company Performance - VNET achieved a score of 70 in the 2024 S&P Global Corporate Sustainability Assessment (CSA), which is a record-setting performance for the company [3] - The company ranks in the top 7% of the global IT services industry and holds the highest position within China's IT services sector [3] Industry Recognition - VNET is one of only 21 enterprises from mainland China recognized in the 2025 Yearbook and is the sole honoree from the IT services industry in China [3] - The company has received an ESG rating of A from MSCI for three consecutive years and a B rating for climate change from CDP, surpassing 94% of participating companies in China [4] Company Operations - VNET is a leading carrier- and cloud-neutral internet data center services provider in China, offering hosting, cloud services, and business VPN services [5] - The company operates in over 30 cities in China and serves a diverse customer base of over 7,000 enterprise clients across various industries [5]