[Financial Performance] YoY/QoQ trends compared to expectations/estimates
[Q&A Highlights] Question 1: Thanks, management, for the opportunity to ask questions. And first of all, congratulations on a very strong quarterly result, especially on the wholesale business. So my question is mainly about the future demand and orders. So we noticed that NVIDIA has regained its permission to ship the new chipsets to China again last month. Just wondering based on all of our communication with our big customers, what is our current expectation of their future demand and their order tendering? Thank you.
Answer: Thank you for your question. Now the market is relatively active. According to the report of these third-party institutions, we find that in the regions where the digital economy is relatively active, for example, in the Greater Beijing area and in the Yangtze River Delta, the AI demand is relatively strong, and also the relation between supply and demand has improved a lot. Your question also mentioned the bidding and the demand for the big client. Since you also have noticed that this year, our delivery plan is over 400 megawatts, it is all relatively large. The new orders should be delivered in six months. We will pay more attention to the demand released around September. In addition to the 20 megawatt wholesale business, we are also paying a lot of attention to the potential demand and we are also communicating for this potential demand. I think most of them are highly relevant to the AI.
Question 2: Hi. Yes. Thank you for taking my questions. I have two. Number one, can you update us on the build-out of wind power in Yuran's hub? And when they will actually come into effect and how that's going to impact the revenue and also the margin of the company? Number two, can you comment on your MSR on wholesale? Because it seems that your MSR or your MRR on the wholesale in the second quarter is actually up on a year-on-year basis. So maybe if you can explain a little bit of what is driving that unit price that would be great.
Answer: Thank you for your question. The Winner Power project is well underway. By the end of this year and also in the beginning of next year, it will deliver power. This is relatively a new trial for us, so we cannot expect the impact on our P&L. However, it will mainly deliver a positive impact on our IR. The detailed statistics and figures will be offered when it begins to deliver power. For the second question, it has two factors. The first one is that the wholesale price is relatively very stable. The improvement in the MSR is mainly due to the signal effect in terms of the increase in the revenue from the electricity bills. In this quarter, we have the one-off income.
Question 3: Hi, management. Thanks for taking my question. I have two questions here. The first one is regarding our gross margin. Our adjusted gross margin was quite healthy growth and improvement. For our GAAP level, gross margin seems to have dropped a little bit. What is the reason behind this? How do you think the future normalized gross profit margin? My second question is about the new financing channel, the REITs. Could you please update us on the progress of the private REITs and the series going forward?
Answer: Thank you for your question. For the changes in the GP margin, it's affected by the timing of turning the CID into PPE and also the depreciation. There can be some seasonal factors that lead to the fluctuation. If we exclude the cash duty margin, it's still on a healthy and steady increase. For the projects, we have been actively promoting the REIT projects. We have the public and also the private REITs. We have four to five. As mentioned, this year through the REIT project, we have to have our recovery of RMB 2,000,000,000.
Question 4: Great. Thank you for taking my question and congrats on the very strong results. Two questions here as well. First is regarding your full-year guidance. I'm pretty glad to see that you raised guidance actually two months ago. But after the very strong first half result, just wondering how management thinks about the second half outlook. If my calculation is correct, I think toward the high end of your guidance, the second half growth implied only around single-digit growth. Just wondering how should we think about the second half outlook. Secondly is regarding the retail IDC business. As I see, there's some revenue decline on this retail IDC revenue in the second quarter of this year versus a stronger first quarter. Just wondering what is the reason behind.
Answer: Thank you for your question. You have mentioned in spite of the upgrading in the guidance, the guidance for the second half of this year is still relatively conservative. Our consideration is that we needed to watch and see if the utilization speed and the pace of our customer or client will not be affected by the chips. If our wholesale utilization business can maintain its speed, we can upgrade the guidance for the second half of the year. Your second question is related to the RDC revenue for the retail business. Yes, there can be some slight decline, but it's still within the reasonable range. The revenue for the retail IDC will maintain relatively stable and even some increase.
Question 5: Hi. Thank you for taking my question. Congratulations on solid results. I have a question regarding the second half outlook. Could management share some color on whether the rapid momentum of client looking can be sustained? Also, do we expect that the impact of AI chips supply constraints could affect new orders or customer moving in the second half of 2025?
Answer: Thank you for your question. The outlook for the second half of this year is relatively optimistic. If we take into account the delivery in the first half of this year, we will also closely follow the rules of the new orders unleashed by our client. We are generally optimistic about the second half of this year. As for the move-in pace of our client, according to practice, once the order is confirmed, we usually have a very fast move-in pace. As for the supply of the chips of AI, we will closely follow companies like NVIDIA's chips and also the domestic chips. The expectation will be very clear very soon. According to our experiences of serving our clients or our customers, once the order is confirmed, the move-in pace will be very fast. As for the wholesale business, we have also confirmed with the core client that the orders at hand for our client will not be affected.
Question 6: Thank you for the opportunity to ask a question. And again, congratulations on the very solid results. I only have one question: management just mentioned that there could be potential new tenders from the customer. Do we expect similar customers and similar workload going forward, or could there be some change?
Answer: Thank you for your question. I think our client will unleash their demand gradually. From the demand side, in terms of the business, the demand for AI remains unchanged.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.