Qinhuai Data Q2 Earnings Report: Revenue Grows by 49.7%, Overseas Market Shelf Capacity Increases 6 Times

According to Dolphin Research APP, on August 31st, Qinhuai Data Group (CD.US) released its unaudited financial report for the second quarter of 2023. During the reporting period, Qinhuai Data achieved a revenue of 1.554 billion yuan, a year-on-year increase of 49.7%. The adjusted EBITDA was 816 million yuan, a year-on-year increase of 49.9%, with an adjusted EBITDA margin of 52.5%. The net profit was 219 million yuan, a year-on-year increase of 9.8%. The pre-tax ROIC increased to 19.3%.

In the first half of 2023, Qinhuai Data accumulated a revenue of 2.997 billion yuan, a year-on-year increase of 53%. The adjusted EBITDA was 1.63 billion yuan, a year-on-year increase of 56.9%. The net profit was 472 million yuan, a year-on-year increase of 60.5%.

Wu Huapeng, CEO of Qinhuai Data, said, "In the second quarter of 2023, Qinhuai Data continued to maintain a vibrant growth momentum. We have deeply participated in the wave of digital economic development in China and the Asia-Pacific region, creating two major growth engines that are driving growth both domestically and internationally. The overseas market has achieved a five-fold increase in operation and shelf capacity compared to the same period last year. At the same time, we have accumulated technological innovations to support sustainable growth and promote high-quality business upgrades. As of the end of the second quarter, the group has obtained and applied for a total of 493 patents, which is 1.37 times the number of patents in the same period last year. We have successfully created a systematic and full-stack AIGC data center solution, taking the lead in seizing the new opportunities brought by the new round of technological changes in the industry."

Business Layout: "Dual Emphasis" on Domestic and International Markets Yields Results in the Second Growth Curve

In this quarter, Qinhuai Data continued to deepen its diversified layout with a "dual emphasis" on domestic and international markets. It further expanded high-quality resources in domestic "data in the east, computing in the west" hub nodes, and accelerated business development in countries such as Malaysia and India, matching the development needs of China and the Asia-Pacific region's digital economy with the next-generation computing infrastructure.

As of June 30th, Qinhuai Data has a total of 35 operating and under-construction data centers worldwide, with a total IT capacity of 945MW. Among them, the operational capacity reached 730MW, with a MoM increase of 91MW, and the shelf capacity reached 585MW, with a MoM increase of 48MW.

Rendering of the MY06 super-large-scale data center in Johor, Malaysia

In terms of regions, Qinhuai Data's overseas operational capacity reached 117MW, a YoY increase of 485%, and the overseas shelf capacity reached 84MW, a six-fold increase YoY. The geometric growth is mainly due to the consecutive launch of four super-large-scale data centers in Malaysia and India in the past year, and the overall shelf rate overseas has rapidly increased to 72%. This indicates that the group's overseas business has entered a period of harvest and has become a stable and strong second growth engine.

In the domestic market, Qinhuai Data continues to deepen its layout in "Eastern Calculation and Western Computation" related cities. In the second quarter of this year, the group put into operation a data center with a capacity of 49MW in Datong, Shanxi, and started the construction of a new project with a capacity of 26MW in Zhangjiakou, Hebei. Recently, Qinhuai Data has also signed a strategic cooperation agreement with Zhangjiakou Construction Investment Group and China Mobile Communications Group Gansu Co., Ltd. to carry out substantial cooperation in the big data industry chain.

Over 90% on-shelf rate for 16 data centers, securing high-growth with high certainty in advance

Qinhuai Data meets the growing customized demands of customers by building large-scale, fast-delivery, and easily expandable computing infrastructure, winning customer trust and expanding its competitive advantage as a "moat".

Huailai Headquarters Base of the Capital Circle

In the second quarter, Qinhuai Data has signed contracts and strong intentions for a capacity of 850MW, with a contract lock-in rate of 90%. Contracts with a duration of 10 years or more account for over 95%, an increase of about 5 percentage points compared to the end of last year. The average remaining contract term is 8.6 years, an increase of 0.3 years compared to the end of last year.

At the same time, Qinhuai Data's main customer businesses are stable and highly growth-oriented, bringing the group a leading on-shelf level in the industry. Among the 27 data centers that have been put into operation, 16 have an on-shelf rate of over 90%. With predictable business performance, Qinhuai Data will stabilize the "anchor of growth" in the market storm and maintain a high level of certainty in the future.

Building the AIGC Data Center Full-Stack Solution, embracing new opportunities in the era of intelligent computing

The "China Comprehensive Computing Power Index (2023)" shows that the proportion of intelligent computing power in the overall computing power scale in China has increased to 25.4%, with a growth rate 15 percentage points higher than the overall growth rate. Qinhuai Data seizes the opportunity of the evolution of computing power structure and achieves a high balance between computing power and energy efficiency based on its technological innovation capabilities.

In the second quarter of this year, Qinhuai Data completed the iterative upgrade of the "Xuanbing" cold plate liquid cooling system, realizing the large-scale deployment of liquid-cooled cabinets with a power density of 20-30kW and above, and achieving an annual PUE as low as 1.15. The self-developed "Xuanbing" magnetic levitation phase-change cooling system not only solves the problem of air cooling for high-density cabinets with a power of 30kW and above, but also truly achieves elastic and adaptive deployment according to demand. The development of the "Xuantie" intelligent power module 3.0 enables the rapid deployment, high energy efficiency, short delivery cycle, and reliable power supply throughout the life cycle of the data center. In August of this year, Qinhuai Data also released the AIGC-era data center full-stack solution, comprehensively addressing the power supply and cooling challenges of high-performance GPU or CPU servers. The continuous expansion of innovation boundaries will help the company continue to create new benchmarks in the era of intelligent computing. In terms of the scale of high-density cabinet deployment, as of the end of the second quarter, Dolphin Research has deployed a cumulative scale of approximately 40MW for 20kW and above cabinets, laying a solid foundation for the development and implementation of customer AI large models.

Annual average operating PUE of 1.21, ranking first in the green and low-carbon index industry

Under the "dual carbon" target, Dolphin Research is committed to efficiently converting electricity into computing power and building a zero-carbon computing infrastructure. In 2022, Dolphin Research's data centers in the China region achieved an annual average operating PUE of 1.21, far superior to the average energy consumption level of large-scale data centers nationwide during the same period.

According to the "Analysis Report on China's Third-Party Data Center Service Providers (2023)" released by the China Academy of Information and Communications Technology, Dolphin Research ranks first in the industry in terms of the green and low-carbon index. The report states that Dolphin Research is the "outstanding performer" in the construction of green data centers. In the 2023 China Computing Power Conference, Dolphin Research won two major awards, "Low-Carbon Computing" and "Computing Power Infrastructure Pioneer Case," further highlighting the group's leading advantage in green technology.