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 [10][19] - 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 [10][21] - Wholesale revenues reached a record high of RMB 673 million for the quarter, representing a year-over-year growth rate of 86.5% [10][19] - Adjusted cash gross profit increased by 26.4% to RMB 967.8 million, with adjusted cash gross margins improving to 43.1% from 40.3% in the same period last year [20][21] 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% [9][13] - Retail capacity in service was 51,960 cabinets, with a slight increase in utilization rate to 63.7% [14] - Retail revenues increased by 4.8% to RMB 968.3 million, while the monthly recurring revenue (MRR) per retail cabinet rose to RMB 8,898 [14][20] Market Data and Key Metrics Changes - The demand for premium IDC services surged due to the explosive growth of AI applications, with retail IDC business revenues from customer private deployments of open-source large language models increasing by 309% in March compared to January [12] - The company secured new orders across various sectors, including a 55 megawatt order from a leading cloud computing customer and a 64 megawatt order from an internet customer [11] 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 [16][27] - The company plans to maintain a robust expansion plan to prepare for further business growth, particularly in the wholesale IDC sector [13][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the China market, driven by the increasing maturity of open-source model technology and the expansion of intelligent application scenarios [12][27] - The company reiterated its full-year guidance for 2025, expecting total net revenues between RMB 9.1 billion to RMB 9.3 billion, representing year-over-year growth of 10% to 13% [24] Other Important Information - The company issued $430 million of convertible senior notes at an interest rate of 2.5% per annum and secured a sustainability-linked loan of RMB 500 million at a 3.7% interest rate [10][21] - The company achieved significant progress in its ESG initiatives, including a fivefold increase in energy usage from renewable sources [26] Q&A Session Summary Question: Update on customer demand after the H20 chip ban - Management noted a short-term impact on demand from hyperscalers due to the H20 chip embargo, but clients quickly adjusted, and current orders are sufficient to fill capacities for this year and the first half of next year [29][31] Question: Retail demand and MRR increase drivers - Most new retail contracts are driven by AI applications, and the increase in MRR is attributed to repurposing cabinets for high-voltage needs, allowing for higher pricing [36][38] Question: Gross profit margin improvement drivers - The improvement in gross profit margin is due to a higher proportion of wholesale IDC services and the repurposing of cabinets for higher-margin retail services [40][42] Question: Plans for a Hong Kong IPO and electricity costs - The company is exploring a potential dual listing in Hong Kong but has no specific timeline yet; utility bills remain stable with no expected decline [49][51] Question: Utilization rate outlook - Management is confident in a positive utilization ramp-up for the next three to four quarters due to strong client demand and effective delivery plans [53][55]