Andy Yu

Andy Yu from DBS asked about the evolving supply-demand dynamics and competition in lower electricity cost regions, given VNET's first-mover advantage in Ulanqab and peers' expansion plans. He also questioned if VNET's C-REIT application would accelerate due to the government's positive stance and inquired about the company's overall funding strategy beyond REITs.

Answer

CFO Qiyu Wang explained that AI will be a key growth driver for the next 3-5 years, with foundational model training concentrating among a few players, while inferencing and private deployment will grow, supported by domestic GPU development. VNET will use diverse resources to meet varying demands. Regarding C-REITs, he stated the application is actively underway, with hopes for good news soon. Beyond C-REITs, VNET is advancing private REITs (holding type ABS), having successfully issued one. He also shared that Beijing VNET received a AAA domestic rating, enabling active pursuit of low-interest Science and Tech Innovation Bonds to diversify financing and reduce costs.

Andy Yu asked about the evolving supply-demand dynamics and competition in low electricity cost regions like Ulanqab, where VNET has a first-mover advantage, given peer expansion plans. He also inquired about the acceleration of VNET's C-REIT application due to government support and the company's overall funding strategy beyond REITs.

Answer

Rotating President Ju Ma (translated by CFO Qiyu Wang) outlined VNET's three-to-five-year outlook, anticipating foundational model training to concentrate among a few players, sustained growth in inference and private deployment, and increasing demand from domestic GPU development and group intelligent agents. He affirmed VNET's strategy of coordinated development to meet diverse customer needs. CFO Qiyu Wang stated that the C-REIT application is actively progressing, with hopes for good news soon. He highlighted the successful issuance of private REITs (holding-type ABS) for larger projects and the recent AAA rating for Beijing VNET, enabling exploration of low-interest Science and Tech Innovation Bonds to diversify funding and reduce costs.

Andy Yu from DBS inquired whether the rapid client move-in momentum could be sustained in the second half and if AI chip supply constraints might impact new orders or customer movements.

Answer

VNet Management expressed optimism for the second half of 2025, expecting it to be stronger than the first. They affirmed that once orders are confirmed, the move-in pace is typically very fast. While monitoring the AI chip supply, they have confirmed with core clients that existing orders at hand will not be affected.