Financial Data and Key Metrics Changes - Total net revenues increased by 18.3% year over year to RMB 2.25 billion for Q1 2025, driven by strong growth in the wholesale business [7][17] - Adjusted EBITDA rose by 26.4% year over year to RMB 682 million, with an adjusted EBITDA margin of 30.4%, up 1.9 percentage points year over year [8][19] - Wholesale revenues reached a record high of RMB 673 million for the quarter, representing an impressive year over year growth rate of 86.5% [7][17] Business Line Data and Key Metrics Changes - Wholesale IDC business capacity in service grew 18.1% quarter over quarter to 573 megawatts, with a utilization rate of 76.2% [7][12] - Retail capacity in service was 51,960 cabinets, with a utilization rate increasing slightly to 63.7% [13] - Monthly Recurring Revenue (MRR) per retail cabinet increased to RMB 8,898, driven by AI-driven demand [13][37] Market Data and Key Metrics Changes - The demand for premium IDC services surged due to the explosive growth of AI development in China, particularly for private deployments of open-source large language models, which increased by 309% in March compared to January [11] - The company secured new orders across various sectors, including internet, finance, local services, intelligent driving, and gaming [10][36] Company Strategy and Development Direction - The company is focused on leveraging its high-performance data center network and reliable solutions to meet growing customer demand, driving growth in China's digital economy [14][25] - A dual-core strategy is being implemented to secure high-quality orders from various industries [6][14] Management's Comments on Operating Environment and Future Outlook - Management noted that the short-term impact of the H20 chip embargo has been mitigated, with sustained demand expected from hyperscalers [28][30] - The company remains confident in the growth potential of the Chinese market, driven by the increasing maturity of open-source model technology [12] Other Important Information - The company issued $430 million in convertible senior notes and secured a sustainability-linked loan of RMB 500 million [9] - Capital expenditures for 2025 are expected to be between RMB 10 billion and RMB 12 billion, aimed at supporting significant capacity deliveries [21][22] Q&A Session Summary Question: Update on customer demand after the H20 chip ban - Management acknowledged a short-term impact on demand but noted that hyperscalers quickly adjusted, and current orders are sufficient to fill capacities for this year and the first half of next year [28][30] Question: Retail demand and MRR increase drivers - Most new retail contracts are AI-driven, and the increase in MRR is attributed to higher pricing for high-voltage cabinets [36][37] Question: Drivers for gross profit margin improvement - The improvement is due to a higher proportion of wholesale IDC services and repurposing cabinets for higher-margin retail services [40][41] Question: Plans for an IPO in Hong Kong - The company is exploring a potential dual listing in Hong Kong but did not provide a specific timeline [47] Question: Impact of electricity costs on EBITDA margin - Management indicated that utility bills are stable, with no expected impact on EBITDA margins [48] Question: Visibility of utilization ramp-up into next year - Management expressed confidence in continued demand and a pleasant move-in rhythm from clients for the upcoming quarters [50]