The data center operator expects revenue to grow 30% this year, but says it could outperform as customers roll out new data-hungry AI applications.
Important points:
- Chindata expects business to grow about 30% this year, with upside potential driven by explosive growth in AI applications
- Data center operator is among the most highly regarded Chinese peers but lags behind global rivals due to geopolitical factors
Beijing, May 10, 2023 /PRNewswire/ — Go with the flow and trade with the big names.
These are the two key takeaways from the data center operator’s latest earnings Chin Data Group Holdings Co., Ltd. (CD.US) continued to overtake local rivals in the final quarter of last year, in no small part Beijing Prioritize and focus on a small group of well-known internet customers. At the same time, the company announced relatively conservative guidance for 2023, at least compared to last year’s staggering 60% sales growth.
But the CFO Nick Wang The forecast could be upside, as many of the company’s customers have jumped on the artificial intelligence (AI) craze that made headlines globally with the launch of OpenAI’s ChatGPT late last year. Bamboo Works said. This growing movement, which requires massive amounts of data storage and computing power, could create further demand for Chindata’s services, which operate regional networks of data centers. China and Southeast Asia.
Chin Data, whose largest shareholder is U.S. private equity giant Bain, is 5.88 billion yuan ($854 million) to 6.03 billion yuan In 2023, this corresponds to 31.4% growth over the previous year at the midpoint. 4.55 billion yuan.
The company’s second largest customer, the world’s largest software maker, recently released a new version of its search engine that incorporated ChatGPT functionality into the US version.The company has not made a similar announcement China No version yet. But if it does, here’s what the US software giant needs: China can rise significantly.
“This 2023 growth forecast captures nothing.” Chat GPT “It’s AI-related in terms of volume growth. From that perspective,[the forecast]is probably conservative,” Wang said.
Chindata has made the company aInvestor favorite. Synchronization with government priorities is critical China From obtaining permits to securing land titles for new facilities, we can help move your business forward.
Chin Data’s leading position among its industry peers is evident across all management indicators, including its profit last year despite the loss of its two major domestic competitors. .
Company’s Latest results Data released in late March showed revenue up 78% in the fourth quarter of last year. 1.4 billion yuanwell above high single-digit growth. against major rivals. Gross margins of 41% are more than double those of his two competitors, and he had an 86% utilization rate by the end of the year.one of them.
The company keeps sales and marketing costs down by focusing on a small number of customers, which is ideal for any business. Although the customer has not been named, he is reportedly one of the largest customers using his 75% of Chindata’s capacity. Chinese It is the largest privately held technology company and the parent company of the hugely successful global short-form video sharing platform.
Additionally, the company counts another US search giant as one of its top five customers, with whom it is reportedly in the process of signing. Chinese Another big game operator.
“We’re not necessarily chasing the largest number of customers. We’re chasing who can generate the largest amount of data,” Wang said. “Fundamentally, our customers’ businesses are doing very well and growing faster than anyone else. We’ve grown much faster than our peers over the last three years.”
Alignment with national priorities
Another core strategy of Chindata to follow government priorities in data center business means that data centers are located in: Chinese Less developed but energy rich region. Adhering to government policies will ensure access to the benefits previously mentioned, such as low-cost land and, perhaps most importantly, low-cost electricity, which is one of the most important expenditures for data center operators. The door will open.
In the latest move on this front, Chin Data is currently developing new facilities in the following locations: Gansu A state in the northwestern part of the country. Beijing We would like to develop fields such as Gansu As part of a strategy to attract investment Chinese It can also take some of the pressure off the power burden in less developed areas and other infrastructure in more developed East Coast cities.
The company’s general policy of locating new data centers in locations with abundant supplies of sustainable power, especially renewable energy, with a particular focus on underdeveloped inland areas is consistent with: ing. Beijing’s The recent “Eastern Data, Western Computing” initiative for data centers. The company currently has his two main hubs: China Based on that strategy, Hebei Not far from Zhangjiakou Beijing and the other is Northwest Shanxi state.
Wang said Chindata recently completed a framework agreement with the local government. Gansu The facility will eventually have a capacity of up to 150 MW, roughly equivalent to about 17% more capacity than Chindata’s capacity of 871 MW at the end of 2022. But before construction of the building can begin, many things must happen. The installation of fiber cables that provide high-speed transmission capabilities makes the facility attractive to Chindata’s customers. Therefore, it will be at least a few years before additional capacity is actually added to the site.
Despite best-in-class status among Chinese peers, Chindata remains heavily undervalued compared to global companies Friends.
This large gap may be due, at least in part, to geopolitical factors related to the company’s location. China. These factors were at the forefront of the company’s recent decision to expand its operations. India It has been postponed because relations between the two most populous countries in the world remain strained. Chindata now has a relatively modest 20 MW of capacity in the country.
The company continues to expand in another major global destination. Southeast Asiawhich currently has a capacity of about 140 MW. Malaysia, or about 16% of total Chindata. Wang said the company is also actively considering setting up new data centers in the country. Indonesiawhich may be able to take advantage of recent smaller acquisitions. sea bream As a base to eventually add more production capacity in the country.
Chin Data’s high-tech nature also exposes it to the potential risk of adverse consequences should the United States decide to restrict access to some of the high-tech chips and other components used in its data centers. It will be. But Wang said the company is already considering such consequences, for example, providing more power and using lower-power computing chips when customers lose access to the fastest high-power chips. should be able to mitigate the associated risks, such as by offsetting The United States will not take such measures.
This articleIe was originally posted at https://thebambooworks.com/chindata-set-to-ride-ai-powered-explosion-in-demand-for-data-storage-processing/ by Bamboo Works.
Source Chin Data Group
