Chindata Group(CD) - 2022 Q3 - Quarterly Report

Overall Performance Summary Chindata Group achieved strong Q3 2022 financial and operational growth, leading to a second full-year guidance raise Q3 2022 Financial & Operating Highlights 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] Management Commentary 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] - 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] Business Operations The company expanded its data center asset portfolio, strengthened its presence in APAC emerging markets, and advanced sustainability initiatives Asset Portfolio Overview 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] - Total contracted and IOI capacity reached 700MW, a 41.9% YoY increase, with a 96% commitment ratio for in-service capacity[8] - The overall utilization ratio for in-service capacity remained healthy at 78%, consistent with the previous quarter[11] APAC Emerging Markets Development 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] 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] Sustainability and R&D Initiatives 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] - 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][18] Financial Performance Analysis 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 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] Balance Sheet Summary 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] 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 The company raised its full-year 2022 revenue and adjusted EBITDA guidance, reflecting strong business momentum 2022 Full Year Business Outlook 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 This section provides detailed unaudited consolidated financial statements and reconciliations of GAAP to non-GAAP financial measures Unaudited Condensed Consolidated Balance Sheets 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][43] Unaudited Condensed Consolidated Statements of Comprehensive Income 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][45] Unaudited Condensed Consolidated Statements of Cash Flows 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][47] Reconciliation of GAAP to Non-GAAP Measures 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 |