21Vianet Group, Inc. (NASDAQ:VNET) Q3 2019 Earnings Conference Call - Final Transcript

Nov 18, 2019 • 08:00 pm ET

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21Vianet Group, Inc. (NASDAQ:VNET) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Shiqi Wang

through industry giants. We plan to explore additional, collaboration opportunities with Alibaba for its -- expansion.

We also see potential for replicating such strategic partnership with other last scale clients going forward. In addition to obtain the wholesale clients, we are also refining our IDC offerings to increase our appeal to retail clients. As a result, during the third quarter, we were able to provide retail IDC solutions to a diverse group of clients, such as COFCO, China Oil and Food Corporation, a nation-wide state owned enterprise and Fuku [Phonetic]. Our online retailer traded on Nasdaq. As more clients adopt our innovative, scalable retail solutions, we have expanded our sales backlog to a record high of around 2,000 retail cabinets, by the end of third quarter.

In conjunction with serving more wholesale and retail clients, we continued to expand our capacity pipeline, in a prudent manner. Such pipeline expansion is in-line with our previously announced three year growth plan. At the same time, we are maintaining regular dialogues with our clients to try to understand their requirements for data centers, keep a close tab on the shifting market demands, like solution adjustments in real time, and secure additional orders for cabinets entering our pipeline.

For example, we have received increasing interest from potential industry partners, for our Jiangsu campus products, whose first batch of cabinets will be ready for wholesale customers order, by the end of 2020. While we expand pipeline capacity and secure additional partnerships, we are also carefully monitoring our projects' progression and the delivery deadlines to ensure a healthy cabinet utilization rates.

In addition, we continued to reduce the number of reserve partner cabinets and then increase our self-base capacity. For our non-IDC business, we have also made, solid progress in further developing our products and enhancing our operational capability during the quarter. Due to our service products adjustment, our retail business experienced a revival. In summary, we delivered a strong third quarter performance, as we captured the growing market demand for IDC solutions.

We refined our product offerings and expanded our capacity pipeline in sync with our three years growth plan. Going forward, we shall continue to evaluate our value proposition, establish additional partnership in a broad range of sectors and strike a balance between the pace and the utilization rates of our capacity expansion.

We are convinced that we are in the right markets at the right time, with the right solutions. We have the industry leadership, the experienced team and the domain expertise. We are optimistic about our future and we are confident that we can generate superior sustainable shareholder value consistently going forward.

Now I'd like to turn the call over to Sharon, our CFO for more financial details.

Executive
Sharon Xiao Liu

Thank you Alvin and hello everyone. Before, we start our detailed financial discussion, please note that we will present non-GAAP measures today. Our non-GAAP results exclude certain non-cash expenses, which are not part of our core operations. The details of these expenses may be