Good morning and good evening ladies and gentlemen. Thank you and welcome to Chindata Group Holdings Limited Third Quarter 2021 Earnings Conference Call. We will be hosting our question-and-answer session after management's prepared remarks. Please note today's event is being recorded. I would now like to turn the call over to your first speaker today, Mr. Don Zhou [ph] from Investor Relations of Chindata Group. Please go ahead, Don.

Thank you, Operator. Hello, everyone. Welcome to Chindata's 2021 third quarter earnings conference call. This is Don from Investor Relations Team of the company. With us today are Mr. Alex Ju, our Founder and CEO; Mr. Nick Wang, our CFO; and Ms. Zoe Zhuang, our Finance Vice President. Alex will be delivering an opening remark at the beginning, Nick will take you though the quarterly review of our operations performance and Zoe will present our financial results. Alex, Nick and Zoe will be here to answer your questions afterwards. Now, I'll quickly go over the Safe Harbor. Some of the statements that we make today regarding our business, operations and financial performance may be considered forward looking, and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. For more information, please refer to the risk factors discussed in our filings with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our earnings press release which is distributed and available to the public through our Investor Relations website located at investors.chindatagroup.com. We have also updated our quarterly presentation on the company's Investor Relations website which you can refer to as a supplementary material on today's call. Without further ado, I will now turn over the call to Alex Ju, our Founder and CEO.

[Foreign Language]

This is Nick. Thank you, Alex for opening remark. I'll first translate Alex's remarks into English. Four quarters have passed since the IPO of the company. With our relentless efforts we are pleased to see the solid results in capacity built up for the company through Chinidea, Chinindustry and the Chinpower. With Chinidea's in-house R&D and critical technologies we have achieved significant progress in the pursuit of white-box model solution for computing the infrastructure. With Chinindustry's breakthrough in self-developed pre-cast container datacenter modules and the further integrated supply chain, cost-efficient cross-border delivery of total solution for hyperscale datacenter infrastructure was made possible. With the rapid realization of the new industrial scenario by Chinpower, we have been effectively supporting the sustainable development of our anchor clients and the consumption of green energy in scale. With these core capabilities as cornerstones, Chindata has overcome the obstacles, technologies, cross-border human resources, and logistics arrangements brought by the pandemic situation. Our performance was outstanding, as we keep on promoting industry upgrade with our industrial pilot projects, propelling business growth with research and development efforts, and enhancing our comprehensive financial performance with our full-stack hyperscale model. It is in Chindata's firm belief that as long as we keep our original pace, adhere to our capacity build-up strategy, stay focused on tackling difficulties, and remain committed to the long-term value development, we will achieve further with the hyperscale greenfield model and to effectively support our key clients along their rapid expansion and zero-carbon transformation in Asia Pacific emerging market. On behalf of the company let's take a look at the key highlights for the third quarter of 2021 on Page 4 of the slide. Our business is maintaining its healthy momentum. Total IT capacity in service by end of the quarter was 370 megawatts, a 9 megawatts increase compared to the previous quarter as we were swiftly responding to our clients customized and new demand, such as high density deployment. Total IT capacity by quarter end was 588 megawatts. Steady ramp up continued, with utilized capacity increased by 17 megawatts over the quarter to 268 megawatts. Utilization ratio remained stable at 72%. Financial growth momentum continued, with very healthy profitability. Quarterly revenue increased by 59% year-over-year to RMB 740.8 million. GAAP based net income was RMB 78.4 million and stayed positive for three straight quarters with a 10.6% net margin, which we believe is among the best performance in the industry. Adjusted EBITDA was RMB 368.4 million, indicating a year-over-year increase of 61.6% with the margin remaining in the high 40s and 49.7%. Meanwhile such solid fundamentals and prospect for business were again recognized by the rating agencies, such as Fitch, reaffirmed its BBB- investment rating for the company in late October despite the evolving headlines in the macro environment. Our capacity build up and the sustainable development. Our total number of approved and pending patents increased by 12% over the quarter to 268. Energy efficiency of our data centers remained outstanding, with our year-to-date average PUE by end of the third quarter at 1.21 Compared to 1.22 in two year 2020. Our year-to-date total power consumption was 1215 million kilowatt hours. On Slide 5, with great pleasure, we would like to share with the market the exciting progress we are making in client diversification and overseas business development. On client diversification, our constant effort is yielding solid results. In China, breakthrough was achieved, as the company recently won the bidding and received a confirmed demand of 27 megawatts capacity from a leading Chinese cloud computing service provider. And overseas development, our hyperscale green field development model in the Asia Pacific emerging market is advancing. In Malaysia, the company has signed contract with land owner and launched a new green field project seated in Johor State. The new project, expected to be a built-to-suit hyperscale data center and implemented with the newly innovated high efficiency cooling technology, has received a MOU capacity of over 80MW and is to be delivered to our anchor client in several phases starting from 2022. Importantly, our consistent build up in research and development of core technology will effectively support the export of our integrated prefabricated data center modules for this project. We have also initiated our expansion plan in Thailand market. Currently, the company is close to finalizing a business acquisition in Bangkok. The project upon completion of technical upgrade will be hosting a 5MW IT capacity and capable of supporting key clients' business development in Southeast Asia. For our existing business, on Page 6, we are maintaining the healthy momentum. We added around 9MW in service capacity in the quarter as we were swiftly responding to the updated and new demand of clients in several data centers, such as for their high density deployments. Utilized capacity increased by 17% in the quarter contributed by the steady ramp up in project CN06, CN08, CN09, CN11-A and CN11-B in Northern China. Meanwhile we added 16MW of contracted capacity as a result of the indication of utilized capacity conversion of the existing project such as CN12 and CN13. As an overview of our assets on Page 7 and 8, by end of the quarter we are having a total of 588MW of IT capacities, among which 15 data centers or 370MW is in service and 9 data centers or 218MW is under construction. According to the timeline as shown in the table, all the 218MW under construction capacity shall be put in service in 2022 and client commitment remains high. Total indication by interest and contracted capacity add up to 493MW, indicating our contracted and indication by interest ratio of 84% for the in-service capacity, contracted ratio is 88%. Our utilization is helthy. By the end of the third quarter, total utilized capacity is 268MW, indicating a utilization ratio of 72%. Now, let's dive into our capability building, which was briefly touched upon in our opening remark. Our capability built up through the establishment of Chinpower, Chinidea, and Chinindustry has made solid progress so far. Chinpower, aiming to be the leader driving driving China's IDC industry into zero carbon era, has been effectively supporting the sustainable development of our anchor clients and consumption of green energy in scale and a rapid realization of the new industrial scenario. Today, we have established a green power consumption ecosystem consisting of four major initiatives including, direct green power trading, innovative regional green power consumption mechanism, development of renewable energy power stations and development of integrated power generation great low storage projects. In September, China launched its first nationwide green power transaction, with a total of 259 participating domestic Chinese entities and a total transaction volume of 7.935 billion kilowatts-hours. Among the first movers nationwide, and as the largest buyer of green power in the digital infrastructure industry, we completed transaction of 100 million kilowatt-hours contributing to 1.26% of the entire nation’s inaugural gross transaction value. Through regional green power consumption mechanism, we have consumed in total 440 million kilowatt/hour of green power in the past four years. For the development of renewable energy power-station we have signed today 1.05 gigawatts of wind and solar energy development agreement, which is expected to providing 1.2 billion kilowatts green power annually, upon completion. Chinidea, together with Chinindustry, by leveraging of our patents and technology reserve, has made significant breakthrough in white-box model solution for computing infrastructure, self-developed, prefabricated data centre modules, and export of integrated supply chain so far. We believe that such prefabrication of productized equipment, productized engineering and productized buildings for data center is improving the coordination and efficiency of our development and construction, which will therefore create a more stable supply chain system, that will effectively safeguard our hyperscale green field project development and delivery in Asia-Pacific emerging market. Even with concurrent delivery of multiple projects. Such will further contribute to the establishment of hyperscale computing infrastructure cluster in the region and support the regional business of our client. Now, let's turn to some other recent developments of the company on Slide 12. Our solid fundamentals and business prospects are reaffirmed by renowned credit agencies, despite recent evolving headline of the macro environment. As Fitch is maintaining their investment rate BBB- in issuers rating with a staple outlook on the company. According to their late October news release, as quoted, Chindata Group Holding Limited, credit profile will remain solid, supported by the strategic location of its data centres, use of renewable energy and adequate rating headroom despite acute power shortage and potential electricity to tariff hikes in China. Meanwhile, during the third quarter we continued our active exploration of ESG development, improved our alignment with international standards, and garnered additional public endorsement for our efforts. In September 2021, the company formally became a corporate member of the United Nations Global Compact, which is the world's largest corporate sustainability initiative, with more than 13,000 supportive institutional and corporate members from more than 170 countries. As the first APAC digital infrastructure corporate member of such organization, the company will collaborate with fellow constituents to help fulfil the United Nations’ SDGs and promote a shared global vision. Also in September 2021, the Company joined the RE100 initiative, which is a global renewable energy initiative jointly launched by the Climate Group and Carbon Disclosure Projects Global Environmental Information Research Center to accelerate at scale the efforts of reaching the zero-carbon energy consumption goal. The RE100 has drawn hundreds of influential businesses around the world into the commitment of utilizing 100% renewable energy. At the same time, we further expanded our green development goals by announcing the “2040-100%” plan. Under the plan, all of the Company’s next-generation hyperscale data centres around the globe will be powered 100% with renewable energy solutions by 2040. Thus, facilitating China’s low-carbon development effort and helping fulfil the goal of reaching peak emissions by 2030 and carbon neutrality by 2060 in China. With all of our long-term commitment to ESG Chindata Group, is current garnering additional public endorsement. The company won the highest accolades in the best ESG initiative categories in the prestigious 17th Global Career Awards that took place on 21 October, thus, becoming the first computing infrastructure company in the Asia-Pacific region to receive such honour. As a top hyperscale computing infrastructure enterprise, the Company is widely acknowledged for its leadership among APAC, especially emerging market APAC companies, in exploring, participating, and scaling up carbon neutrality initiative, as well as managing ESG initiatives. On policy update on Slide 13. Several central government papers were issued in the past few months, offering further insights on the paths and objectives of national carbon neutrality. State Council published working guidance for carbon dioxide peaking and the carbon neutrality in full and faithful implementation of the new development philosophy, and noticed by the State Council of the action plan for carbon dioxide peaking before 2030 in September and October respectively, which further emphasized the expectation for improved geographical layout, energy consumption monitoring and management, and energy efficiency et cetera of the data centre industry. These key focuses have been elaborated on, in the data centre policies, issued by Ministry of Industry and Information Technology or MIIT and National Development and Reform Committee or NDRC, earlier this year. On power issue following NDRC’s publishment of the notice on further deepening the market-oriented reform for the on-grid price of coal-fired power generation in October, that stipulated a wider range of variation for on-grid price. A number of provinces have seen on-grid price increase by 20%. The power shortage issue, thanks to the serious action taken, has been mitigated according to National Energy Bureau's press release in early November. For the Company, the impact of power issue on our recent operation has been very limited, next to zero, and we believe our layout or deployment in energy abundant regions have been a key contributor. With that, I conclude our operational overview. I will now turn over the call to Zoe, to go through our financial detail for the third quarter. Zoe, please.

Thank you, Nick. Now, turning to Slide 15, we increased our utilized capacity and grew revenue. In quarter three total revenue grew by 7.9% quarter-over-quarter up 68.5% year-over-year to RMB740.8 million. Utilised capacity increased to 268MW by quarter end, compared with 175 megawatts in the same quarter last year, indicating 53.3% year-over-year growth. For our cost and expense structure, our prudent cost control efforts enabled us to keep our core expenses and cost percentage within stable range, while continuing to grow our adjusted EBITDA and adjusted net income. Looking into the details, cost and expense items on Slide 16, utility costs made up around 27% of revenue in the last two quarters, with the historical range of 25% to 28%. Maintenance and other costs took around 10% to 12% and adjusted SG&A took around 12% to 14%. Take a closer look at our strong and stable profitability on Slide 17. Adjusted EBITDA in the third quarter increased 61.6% year-over-year, or 8.8% quarter-over-quarter to RMB368.4 million with a margin of 49.7%. Adjusted net income increased 132.2% year-over-year to RMB112 million. Adjusted net margin for the quarter was 15.1%. Details in the GAAP to non-GAAP reconciliation of EBITDA and net income would be available in our 6-K filing or the appendix in our IR PPT. [: This capital expenditure spending today ensured the company's future ability to serve our customers and shows our competence in future business growth. On a 12 months basis, last 12 months CapEx end of the third quarter was RMB3.57 billion. Our cash position, which includes cash and cash equivalents and the restricted cash was RMB6.1 billion by end of the quarter with our total debt standing at RMB5.5 billion. Looking closer at the change behind the cash position, on Slide 19, we continue to generate profit matching cash from operations of RMB288.8 million adding additional RMB327.5 million project financing offset by RMB1.6 billion investing cash outflow consisting of the formation CapEx and RMB149.5 million the short term investment to cash outflow. Again, we grew with high quality indicating our healthy cash flow from operations and the leverage. As you can see on Slide 20, by end of third quarter our total debt-to-capital ratio was 35.4%, compared with 44.9% in the same quarter last year. Our total debt-to-last 12 months adjusted EBITDA ratio was 4.4 compared to 4.6 in the previous quarter, and 5.4 in the same quarter last year. Our last 12 months adjusted EBITDA to last 12 months interest ratio by end of third quarter was 5.6, compared with 5.3 by end of second quarter, and 3.5, at the end of the same quarter last year. Finally, let's take a look at the guidance. We reiterated our 2021 full year guidance and both our first nine months revenue and adjusted EBITDA are now at 73.8% of our full year guidance midpoint. This forecast reflects our current and the preliminary views on the market and operational conditions. This concludes our prepared remarks for today. Operator, we are now ready to take questions. ]: This capital expenditure spending today ensured the company's future ability to serve our customers and shows our competence in future business growth. On a 12 months basis, last 12 months CapEx end of the third quarter was RMB3.57 billion. Our cash position, which includes cash and cash equivalents and the restricted cash was RMB6.1 billion by end of the quarter with our total debt standing at RMB5.5 billion. Looking closer at the change behind the cash position, on Slide 19, we continue to generate profit matching cash from operations of RMB288.8 million adding additional RMB327.5 million project financing offset by RMB1.6 billion investing cash outflow consisting of the formation CapEx and RMB149.5 million the short term investment to cash outflow. Again, we grew with high quality indicating our healthy cash flow from operations and the leverage. As you can see on Slide 20, by end of third quarter our total debt-to-capital ratio was 35.4%, compared with 44.9% in the same quarter last year. Our total debt-to-last 12 months adjusted EBITDA ratio was 4.4 compared to 4.6 in the previous quarter, and 5.4 in the same quarter last year. Our last 12 months adjusted EBITDA to last 12 months interest ratio by end of third quarter was 5.6, compared with 5.3 by end of second quarter, and 3.5, at the end of the same quarter last year. Finally, let's take a look at the guidance. We reiterated our 2021 full year guidance and both our first nine months revenue and adjusted EBITDA are now at 73.8% of our full year guidance midpoint. This forecast reflects our current and the preliminary views on the market and operational conditions. This concludes our prepared remarks for today. Operator, we are now ready to take questions.

Thank you. [Operator Instructions] Our first question comes from the line of Yang Liu from Morgan Stanley. Please go ahead.

[Foreign Language] Let me translate my question in English. I’m very interested in this new major customer acquisition. Could you -- could management elaborate more about or provide more color on this customer in terms of scale, the location, and about the future outlook whether you expect to get the order from this customer on a recurring basis? Thank you.

[Foreign Language] Translation for Alex Ju. For the 27 IT MW project that we disclosed, we won the bidding in November and the client is a top two Chinese leading cloud computing service provider. The project is to be delivered in several phases, in two locations in Northern China; each with around 13MW of IT capacity. As far as the delivery, we will provide customized delivery as specified by the clients. Generally speaking, as we establish a more diversified client base going forward, we will adhere to our hyperscale green field development model, while at the same time capable of delivering projects based on customized specifications from the client. Thank you.

Thank you. Our next question comes from Tina Hou from Goldman Sachs. Please go ahead.

[Foreign Language] Let me translate my question. So thank you very much management for the time and congratulations on a very solid result. So my question is around the pricing, recent contract pricing, because by our calculation, you are actually monthly service revenue per megawatt. Monthly service revenue per megawatt actually increased by 1.9% in third quarter versus second quarter. So just wondering, from these, like newly in service contracts, is there a trend of pricing, recovering? And then also interested in your new cloud service customer, and what is like contract pricing for this new customer versus your anchor customer? And also the contract structure, is it different or similar to your anchor customer? Thanks.

Hi, Tina, thank you for your question. This is Nick. I'll help answering these questions. I think our, the current contract with our major customers, especially on the pricing side, remained very stable and has been consistent, very consistently stable in the past and will be in such a stable state moving forward. And, but we did notice that some downward trend of pricing in the industry this year, somewhere in China. As of now, we think that our unique hyperscale green field or full-stack model, outside Tier-1 city has created a very comfortable buffer for us with the competitive advantage in terms of economies of scale, operating efficiency, and a lower cost structure as we have in those energy abundant regions outside Tier-1 city. All these factors contribute to allow us achieve a very stable financial structure in terms of our contract pricing, as well as our margin, as well as our CapEx spending. In terms of your question about our pricing for the new customers and maybe our anchor customers, we're not in a position to disclose or detail under the confidentiality agreement for us with our key clients. But on your question related to the new corporation or business models new client, we will see, we will say that this is a newly customized model with this leading the cloud computing companies and that this is also in our total capability and the capacity of planning and that all can be handled in-house. Thank you.

Thank you. Next question comes from James Wang from UBS. Please ask your question.

[Foreign Language] Management, so I've got one question. The question is around the overseas business. We saw one of your peers also entering the Southeast Asian market recently. So I just wanted to know your future growth direction in the region as well as the level of competition that you are seeing now and how it compares to the domestic Chinese market? Thank you.

[Foreign Language] Translation for Alex. Thank you for your question. In this quarter, we did make the progress in our overseas business. In Malaysia, the company has launched a new green field project seated in Johor State. This new project is expected to be a built-to-suit hyperscale data center and it has received an MOU capacity of over 80MW, 80 IT MW to be delivered to our anchor customer in several phases starting from next year. We're also finalizing a strategic acquisition in Thailand, Bangkok. The project upon completion of the technical upgrade will be hosting 5IT MW and capable of supporting key clients business development in the region. Furthermore, we're also actively exploring opportunities in other countries within Southeast Asia, such as Vietnam and Indonesia. Importantly, our constant progress and breakthrough in technology, R&D, as well as white-box model solution, self developed pre-cast container data center modules, and the further integrated supply chain will effectively support the cost efficient and cross-border delivery of our total solution for hyperscale data center infrastructure. For the market prospects in Asia-Pacific markets, we think the overall demand is healthy. As we further advance our unique models, we're receiving higher and wider recognition. We expect the demand for hyperscale, green field, full-stack model will be even greater than the overall demand. And we believe that we can achieve further in Asia-Pacific emerging market. And we do hope there are more peers or friends who come together in this region to develop and explore the regions market as well.

All right. Next question comes from Marco Lin [ph] from the Citi. Please ask your question.

[Foreign Language] I'll translate. Congratulations on the great results. Could you quantify the impact of power crunch in this quarter and longer term and would it be a driver for IDC to move towards remote sites? Thank you.

Thank you, Mr. Lin. I think, first of all for the impact of the power related issues, both power shortage and power price, as we have just discussed, impact was very limited, almost next to zero in reality, especially in Q3. And we expect very, very limited impact of that in the near future. This is actually primarily due to our energy side, geographic deployment strategy as we, we started from day one. Going forward, I think our energy side geographic deployment will continue to be our cornerstone strategy, and also then create a competitive advantage for us. And we believe that our long-term commitment to renewable energy development in these sites and the related capacity build up will continue to contribute to stable and secure the power supply as well as to serve as a adequate hedge I would say against the power tariff inflations, if any. Also, you used, when you used the term on remote, is actually it's always on a relatively sense. One year ago I remember some industry peers even thought about the places like Hubei, [indiscernible] Shanxi as a remote area, but they are not too remote, away from Tier-1 City like Beijing. In fact, [indiscernible] is only like a one kilometer away from downtown Beijing. So generally, Chindata's, I think hyperscale, all of Chindata is a majority of hyperscale data center clusters are located and deployed in those energy abundant locations. And these locations happens to be outside Tier-1 City or to your short term in a remote, a little bit remote area. For example, [indiscernible], Datong and Malaysia, Johor State, we will stick to these regions because they are very energy abundant, not only in the traditional energy abundant sense, but also in the renewable abundant sense. And they're not, not too far away from Tier-1 city at all. Thank you.

Thank you. Our next question comes from Hongjie Li from CICC. Please ask your question.

[Foreign Language] 12-16 [Foreign Language] Thanks management. My first question is, could you elaborate more on your new initiative on the green energy? And how shall we outlook on additional CapEx and impact on the margin? Thank you.

I think the Chindata, what Chindata’s understanding of this IDC industry is always how to find the most efficient way to convert renewable electric power to computing power. That's why firstly; the development of renewable energy is by all means a long-term strategy that we will commit ourselves to. Secondly, in terms of how it will be invested and operated, the company will judge case by case, we’ll made a judgment case by case based on several critical factors. But remember, we're in the bigger context of carbon neutrality as China's national strategy. So, our final objective as one of the IDC industry or the computing infrastructure participant is trying to strike optimum balance among adequate renewable power supply, power price, invested capital required, and obviously with the ultimate goal to achieve the best investment value or return for investor, for customer, et cetera. And we are now during the process, we will not exclude any opportunity open initials [ph] to involve external parties on cooperation on both the investment side and operation side in the renewable energy, along this renewable energy strategy and execution. Thank you.

Thank you. Next question comes from Albert Hung from JPMorgan. Please ask your question.

[Foreign Language] In the first half indicated some slowdown in moving rates in second half and turned more conservative from the next year outlook especially for hyperscale. My new winner Chindata also sees similar concerns about 2022 hyperscale demand? Chindata has high customer transfer concentration range, how would you mitigate the risk of potential slowdown in moving rates? Thank you.

[Foreign Language] Translations for Alex. Thank you for your question. I think Nick has just addressed a similar topic in general. Our recent progress in client diversification and geographic, diversification, as well as the diversification in the product line and market segments of our anchor client itself, should all be marginally creating a better risk hedging profile for the company going forward. Then, on the concept of hyperscale data center and the demand for such hyperscale data center, we're not sure if other market players that you mentioned share the same definition of as us. Different definition may lead to different product and solution offerings. Our anchor clients like Chindata as a business partner very early at its business stage, when we are just a startup company. Our hyperscale model, or the -- to be exact, the hyperscale green field, full-stack model has accompanied our client all the way along and we grew together. So now we're still growing together. We believe we have done a good job for them so far. For next year, we can refer to our pipeline or the general introduction or our disclosed information. Thank you.

Thank you. Our next question comes from Daniel Wang [ph] from DBS Bank. Please ask your question

[Foreign Language] Thanks management for the opportunity, and congratulations on the strong third quarter results. My question is, what is the current competition landscape and demand outlook in China, given the recent power shortage and tariff hike in the third quarter, as we saw a slow moving rate for other competitors in China? Thank you.

Thank you. This is Nick and I'm actually going to answer these questions. I think, I want to reiterate Chindata's way of doing business. We believe the IDC's nature is to try and find most efficient way of converting electric power to computing power. Therefore power has always been integrated, and one of the most important strategy for our company from day one. So as you can, as it's proved recently in the marketplace on power related issues and also you can see numerous policy papers issued by the government authority like MIT and DRC and State Council in the past few months, in a very intensive way, elaborating actually on a vision for the IDC industry, and the carbon neutrality target for the entire country. As well as the fact that the Chinese IDC industry made up around 2%, 2% of the total energy consumption nationwide last year. You can understand why the power and energy is so important for the IDC industry. They offer a strategy on the power for a particular IDC company is becoming very, very important. Therefore, though, that's kind of explain, why the company from day one we believe into this, we execute along this power related strategy. And we have very close to energy side geographical deployment to be fully in line with this belief and strategy. For the company going forward, our energy-sided geographical deployment will continue at present will continue to be our cornerstone. And we believe our long-term commitment to renewable energy development and related capacity build up will contribute to a very stable and secure power supply, as well as to serve as the adequate hedge so to speaking, against the power tariff inflation if any in the future. Thank you.

Thank you. Our next question comes from [indiscernible]. Please ask your question

[Foreign Language] So let me translate my question. So I have a question about the demand from ByteDance. We see some news feeds that ByteDance will release its own public cloud in December. So just wondering if we can get new orders from this and also can we get some color about the demand from ByteDance in China and overseas? Thank you.

Thank you. This is Nick. Again, I'm trying to answer these questions. Again, If you look back our history, as Alex, I think mentioned, our collaboration with our anchor client, ByteDance in particular in the past has been very successful. We're become -- just becoming their ecosystem partner and will remain so. And because of our high quality delivery and operations, we deliver to customers and make them happy. The progress we made in overseas market this quarter and – I'm sorry, this recently is very exciting. And we were confident that with our constant in-house capability build up and further deployment in our overseas market will be fully capable of supporting the development of our clients, both within China and overseas. As far as for your question about their upcoming, the new cloud, or public cloud product launch, I'm not in a position to make any comments on behalf of our customer, but all we see due, based on our data interaction with our key client, on the ongoing business, as well as the forthcoming business. And I think that this kind of 2B and 2C business development, signaling a very positive momentum and I think there is a very high chance we'll be the beneficiary out of this. Thank you.

Thank you. Our next question comes from Edison Lee from Jefferies. Please go ahead.

[Foreign Language] So my question is mainly on the new client deal, cloud client in China. So for these two particular projects, can you tell us whether the terms of the contract includes power and also what are their extended difference in IRR with the existing projects? And as you said earlier, it seems that the business model or the requirements of this client is somewhat different from your existing clients. So maybe you can elaborate on actually what the differences are and what if there are any implications for the investment value of these projects? Thank you.

I think to answer your questions, I think at the moment, because this was the one of the most recently, I think development, post Q3, so and we are at very close stage of signing the final contract with our customers, new customers. So at the moment, we're not in a position to disclose any further detail. But what I can tell you is actually, if you remember back in the first half of this year, we signed a framework agreement with this particular new customer. And at that time, we said that the reason for the signing was because our credentials on energy side deployments, and all our operating efficiencies and our very lower than average cost advantage we have. And obviously this is all accomplished, recently, I think exactly due to these reasons. So in a matter of the corporation model as said is customer customization models, the project going to be located in one of our northern places we are currently operating our hyperscale project and one is another northern China locations. You know, for other details, please look in at the other public disclosure by the company. Thank you.

Thank you. Our next question comes from Yang Liu from Morgan Stanley. Please ask your question.

Thanks for the opportunity to ask another question. [Foreign Language] The question is about the debt financing. We noticed that in offshore bond market volatility. And I would like to hear the management's comment what is the status and what will be the next step in the debt financing? Thank you.

Thank you, Liu. Actually, first of all, we have sufficient financing liquidity and a very healthy leverage profile. As we can see, by the end of this quarter, the company has RMB6.1 billion cash and cash equivalents at hand. And in contrast to our debt balance, which is around RMB5.5 billion, together with some short term investments, we have an active net debt, which is net cash position of RMB782 million. Also we have cash flow from operations, which is around RMB288 this quarter. So, besides this, on the slide we just reviewed that by the end of this quarter, the company total debt-to-total capital ratio is only 35.4%, which are very low, very low compared with the industry level, and they leave us more room for debt or debt like financing. With regard to the financing progress, the rating agencies have reaffirmed reaching this quarter with a BBB- investment grade. And this allows us with more financing options in both public and private market. On daily operations, it is very regular and consistent practice that we have bank loans at project level, both domestic and for oversea projects, along with the development of projects, and at the same time, we are also looking into private financing options recently. Thank you.

Thank you. Our next question comes from Tina Hou from Goldman Sachs. Please ask your question.

[Foreign Language] So my second question, thanks very much for the opportunity again, and regarding the M&A, our company's view on M&A because, as management just mentioned, you have actually very abundant cash a net cash position on your balance sheet. So wondering what's your view specifically in the Chinese M&A market, as we saw some of our peers are accelerating their M&A, while others are actually limiting and not doing any M&A at this stage. So, what's Chindata’s view on potential M&A? Thanks.

Our view on the potential, this is Nick, thank you Tina for the questions. Our view on the merger acquisition, we think that's also one of the company's strategy in a very supplementary way. We will -- our principal strategy is to kind of be at the full-stack, hyperscale, green field development plus operation model, but we're looking at some interesting opportunities in merger acquisition both in China and overseas at the same time essentially. But we stick to a very, very stringent plan, sometimes too stringent principle on the potential merger acquisition opportunities and we actually stick to several criteria. We hope that, but whether, but even say we acquire certain asset, we hope that we can provide our unique the in-house capability, which can allow us to add value to this targeted asset. Once we take off Okay, so but at the time of making this a merger acquisition, we are looking for synergies with the company in geography, client base, and resource of the potential target, all the assets, at assets. And then we look for, obviously the reasonable valuation. And I want to emphasize that the both the future business plan and to multiple and a valuation multiple for these kinds of potential targeted asset all company, both in China and overseas must be reasonable in the eyes of Chindata. That's a very important for us to pull the trigger. We won't -- we will not do the merger acquisition simply for the sake of merger acquisition itself. And also given the more and more emphasize on the operating efficiencies and most importantly, on the renewable power and power on the supply side and a demand side as more and more I think the demand is going to be driven by the big, computing and the tech and internet clients. And we think that given the current competitive landscape ever increasing landscape in around Tier-1 city in China, there will be some consolidation, the window open up for Chindata, even if we stick to very stringent merger acquisition principles. Thank you.

All right. Thank you. Our next question comes from Edison Lee from Jefferies. Please ask your question.

[Foreign Language] So my question is about CapEx. I just want to get an idea as to whether the CapEx guidance this year of RMB5 billion to RMB6 billion has changed and what's the outlook for next year?

Thank you. So far, we incurred RMB around RMB1.4 billion for CapEx for this quarter. And on a 12-month basis, last 12 months CapEx by end of this quarter was around RMB3.6 billion. This is generally in line with our full year CapEx expenditure forecast. For the next year, you can see that majority of the under-construction assets are to be delivered gradually and besides this today, we also announced three new project orders or pipelines. And we expect next year's CapEx investment will be somewhat higher than this year to support this solid, these opportunities and the region expansions and the project delivery. Thank you.

All right, thank you. They are no further question at this time. I will turn the call back to the management team for their closing remarks.

And thank you for the investment community and the whole analysts and for the public to pay your attention to Chindata. I want to emphasize once more, that's probably going to be the regular remark I made every quarterly earnings call, that our belief in IDC is a little bit unique and different from lot of -- most of our peers. We believe the industry’s nature is how to find most efficient way to convert electric power and in the future is going to be a renewable electric power to computing power. And we just treat ourselves more like an infrastructure service provider. Let's complete IDC, the hosting service provider, so therefore now we're going to stick to this business strategy, and we'll make perfect execution along the way. Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect your lines.