Hello everyone and welcome to our first quarter 2026 earnings conference call. Our earnings release was distributed earlier today and you can find a copy on our website as well as on newswire services. Please note that today's call will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and incentives that may cause actual results to differ maturely from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with the SEC. VNet does not undertake any obligations to update any forward-looking statements except as required under applicable laws. Please also note that VNet earnings priorities and this conference call include the disclosure of unaudited GAAP and non-GAAP financial matters. VNAS Earnings Press release contains a reconciliation of the unaudited non-GAAP matters to the unaudited GAAP matters. A summary presentation, which we will refer to during this conference call, can be viewed and downloaded from our IRF site at ir.vnana.com. Next, I'd like to alert you that we will be utilizing text-to-speech technology powered by NewLink.ai to deliver this quarter's prepared remarks by Ms. Sharon Liu, our rotating president, and Mr. Peter Zhang, our SVP of Operational Finance. The management team will join the Q&A session in person. Additionally, this conference is being recorded. A webcast of this conference call will also be available on our website at ir.vina.com. Now let's get started with today's presentation. Ms. Liu, please go ahead.

Good morning and good evening, everyone. Thank you for joining our call today. I'll start with an overview of our major accomplishments during the first quarter of 2026. We began this year with strong results thanks to strong execution of our effective dual core strategy and hyperscale 2.0 framework. On the operational side, our wholesale IDC business delivered robust growth driven by strong customer demand and fast customer move-ins as of march 31st 2026 our wholesale capacity in service rose by 18 megawatts to 907 megawatts in line with our plan to concentrate our capacity expansion deliveries in the second half of the year meanwhile driven by customers fast move-ins wholesale capacity utilized by customers grew by 64 megawatts to 687 megawatts bringing the utilization rate to 75.7 percent up 5.6 percentage points quarter over quarter our retail idc business continue to progress smoothly supported by growing ai driven demand retail mrr per cabinet increased slightly to RMB 9,448 sequentially, and retail utilization rate remained stable at 64.1% during the first quarter. On the financial side, our total net revenues increased by 19.8% year-over-year to RMB 2.69 billion for the first quarter. Wholesale revenues remained the key growth driver reaching rmb 1.06 billion a significant year-over-year increase of 58.1 our adjusted ebitda for the first quarter also increased by 30.6 percent year-over-year to rmb 891.5 million driven by the strong growth of our wholesale idc business in addition our premium reliable services continue to earn customer trust and gain market share evidenced by multiple high-quality order wins, totaling 519 MW, year-to-date 2026. I will go through the details on the next slide. Moving on to our new order wins on slide 5, year-to-date 2026. Order momentum remains strong, with three wholesale orders, secured totaling 517 MW, fueled by continued growth in AI-driven demand for high-quality datacenter resources. We secured two orders, 110 MW and 400 MW, from an Internet customer at separate datacenters in the Greater Beijing Area. Meanwhile, another datacenter in the Greater Beijing Area won a 7 MW order from a local services customer. Furthermore, bolstered by AI-driven demand, We also secured new retail orders totaling approximately 2 megawatts across multiple retail data centers from customers in the local services, internet, and IT services sectors. This robust order momentum underscores our strengthened competitive positioning and growing ability to capture market share. At the same time, continued policy support for AI Plus initiatives is reinforcing industry tailwinds. Authorities are promoting the development of large-scale, clustered green computing infrastructure, which is accelerating the broader adoption of computing power across industries, and further expanding the addressable market. Meanwhile, driven by the AI industry's rapid progress, demand for AI-related computing power and data center resources is surging, driving the industry into a new growth phase. However, the effective supply of high-quality data centers remains relatively limited, constrained by utility and power quotas limitations in core regions. Against this backdrop, IDC players with long-term industry accumulation, sufficient resource reserves and project deployments in core regions are best positioned to fully capture the structural opportunities arising from the expansion of AI demand. As a pioneer in AIDC, VNet is poised to benefit from these structural shifts. Our high-performance, large-scale data center clusters, coupled with a robust resource pipeline in core regions, represent a significant advantage. Furthermore, our proven track record in rapid delivery and operation and maintenance excellence are competitive strengths that are becoming increasingly difficult to replicate at scale. supported by favorable policies, and an ongoing structural transformation within the industry. We are confident in our ability to consistently capture emerging market opportunities and cement our leadership position. Now let's delve into our business updates, starting with our wholesale business on slide 7. Our wholesale business continued to grow, with capacity in service increasing by 18 MW, quarter-over-quarter to 907 MW. Utilized capacity grew by 64 MW, sequentially to 687 MW, driving the utilization rate up to 75.7% from 70.1% last quarter, mainly attributable to customers' fast-movings at NOR Campus 02A and NHB Campus 03. Our mature capacity utilization rate also reached 93.8%, a relatively high level. We have a clear growth path for our wholesale data center capacity. Let's move on to slide 8. Our total wholesale resource capacity continued its upward trajectory, reaching 2.48 gigawatts as of March 31, 2026. specifically our capacity under construction rose to 516 megawatts with a pre-commitment rate of 85.8 percent year to date 2026 capacity held for short-term and long-term future development grew to 697 megawatts and 359 megawatts respectively it's worth noting that the The majority of the capacity reserved for future development is driven by resources we have secured at our Wulan Cha Bu IDC campus, demonstrating our ability to secure critical resources and rapidly scale capacity in strategic regions. Our secured resources provide us with a meaningful competitive edge, particularly given the tightening effective supply in the IDC industry and reinforce our confidence in the long-term growth potential driven by AI-related demand. Moving to our retail IDC business on slide 9, our retail business progressed smoothly in the first quarter. Retail capacity in service increased to 50,170 cabinets. From 49,863 cabinets last quarter, the utilization rate remained stable at 64.1%. As of the end of March, MRR per retail cabinet slightly increased to RMB 9,448. this quarter turning to our delivery plan on slide 10 we delivered 18 megawatts in the first quarter of 2026 in line with our delivery plan which concentrates the majority of the year's deliveries in the second half we currently have eight data centers under construction with seven in the greater beijing area and one in the yangtze river delta we plan to deliver 516 megawatts of capacity over the next 12 months around 250 megawatts during the second and third quarters of 2026 and around 266 megawatts during the fourth quarter of 2026 and the first quarter of 2027 with the majority allocated to our data centers at the wulan chabu idc campus to meet the strong demand from wholesale customers in conclusion our first quarter performance demonstrated both strategic effectiveness and execution strengths looking forward we will remain focused on advancing our dual core strategy and hyperscale 2.0 framework further developing our scalable green data center clusters and enhancing our comprehensive aidc solutions to meet growing ai driven demand in parallel with our long-term strategy we have also strengthened our shareholder base by welcoming new strategic investors affiliates of catl have entered into a share purchase agreement to acquire up to approximately 38.1 of our shares from subsidiaries of shandong high speed holdings group with closing expected in the fourth quarter of this year we would also like to express our sincere appreciation to shandong high speed holdings group for their trust in our vision and years of partnership and support in our growth journey with catl's entry we believe that this new relationship would generate meaningful strategic synergies and bring opportunities for fruitful collaboration across technological innovation supply chain and next generation ai data center development enhancing our long-term competitiveness and growth momentum overall we remain confident in capturing the growth opportunities ahead and delivering sustainable long-term value for all shareholders now i will turn the call over to our svp of operational finance peter for further discussion of our operating and financial performance thank you everyone good morning and good evening everyone before we start the

detailed discussion of our financial performance. Please note that, unless otherwise stated, all the financials we present today are for the first quarter of 2026 and are in renminbi terms. Furthermore, unless otherwise specified, all the growth rates I am reviewing are on a year-over-year basis. Let's turn to slide 12. In the first quarter, we continue to focus on high-quality development. Our total net revenues increased by 19.8% to RMB 2.69 billion, mainly driven by the rapid growth of our wholesale business. Our adjusted cash gross profit rose by 25.1% to RMB 1.21 billion, while our adjusted EBITDA also grew year over year by 30.6% to RMB 891.5 million. Let's look more closely at our top line. As you can see on slide 13, we have a new milestone this quarter as wholesale revenues has surpassed retail revenues for the first time. Wholesale revenues, our key revenue growth driver, increased significantly by 58.1% to RMB 1.06 billion for the first quarter, mainly attributable to activity at the NOR Campus Campus 01 and NOR Campus 02A, retail revenues increased by 5.4% to R&B 1.02 billion for the first quarter. Our non-IDC business revenues increased by 0.3% to R&B 606.6 million for the first quarter. During the first quarter, we maintained solid margins thanks to ongoing efficiency enhancement initiatives. As shown on slide 14, our adjusted cash gross margin improved to 45% from 43.1% in the same period last year. Our adjusted e-VITA margin rose to 33.1%, compared with 30.4% in the same period last year. Moving on to liquidity, on slide 15, we maintained robust and healthy liquidity. Our net operating cash inflow reached RMB 173.7 million during the first quarter, excluding the impact of RMB 119.1 million in income tax related to capital transactions and other one-off items. The net operating cash inflow for this quarter would be RMB 292.8 million. Our cash position remained solid, with total cash and cash equivalents, restricted cash and short-term investments, reaching RMB 8.8 billion as of March 31, 2026. Next, let's take a look at our debt structure on slide 16. We maintained our prudent approach to debt management. As of March 31, 2026, our net debt to the adjusted last quarter annualized EBITDA ratio was 3.8 and total debt to the adjusted last quarter annualized EBITDA ratio was 6.1, both remaining at healthy levels. Our adjusted trailing 12-month EBITDA to interest coverage ratio was 5.8. We prioritize long-term debt maturity planning in our debt and strategic management to ensure the security of debt repayment. Currently, the company's short- and medium-term debt, maturing in 2026 to 2028, comprises 45.8% of our total debt. Turning now to CapEx spending on slide 17. Our CapEx was RMB 1.91 billion in the first quarter, with the majority allocated to the expansion of our wholesale IDC business. We continue to expect our CapEx for the full year 2026 to be in the range of RMB 10 billion to RMB 12 billion, mainly to support our planned delivery of 450 to 500 megawatts in 2026. We continued to advance our asset monetization strategy and made meaningful progress during the first quarter. As we mentioned on our last call, in March 2026, two of our private rate projects were successfully listed on the Shanghai Stock Exchange, with a combined offering size of approximately RMB 6.36 billion, and an EV to EBITDA multiple of around 13 times to 14 times. by establishing a scalable, efficient capital recycling model. These re-listings give us an advantage in this inherently capital-intensive industry, allowing us to reinvest in new project development. We expect to realize no less than R&B 2 billion in total cash proceeds from our REIT-related initiatives this fiscal year, substantially strengthening our liquidity position and setting a new benchmark for sustainable growth in digital infrastructure. Now moving to our full year guidance for 2026 on slide 18, as we expect strong demand from our wholesale IDC customers and ongoing operational efficiency gains throughout 2026. We expect total net revenues to be in the range of RMB 11.5 billion to RMB 11.8 billion, a year-over-year increase of 15.6% to 18.6%, and adjusted eVisa to be in the range of RMB 3.55 billion to RMB 3.75 billion, representing a year-over-year increase of 19.2% to 25.9%. The above outlook remains unchanged from the previously provided estimates. Before I conclude, I'd like to briefly update you on our ESG efforts. Sustainability remains important to our business strategy, supporting our operational excellence and long-term growth. In April, we published our sixth ESG report, highlighting our ESG progress and achievements in 2025. Our average annual power usage efficiency improved to 1.24% in 2025, compared with 1.27% in 2024. Total renewable energy consumption accounted for 36% of total resources utilized by VNet in 2025, compared with 18% in 2024. These accomplishments also won continued recognition from leading ESG rating agencies. We were included in the global edition of the S&P Global Sustainability Yearbook for two consecutive years, 2025 and 2026, and were also selected for the China edition for four consecutive years, where we were once again recognized among the top 1% in IT services industry. Going forward, we will deepen our commitment to sustainability, strengthening our investments in intelligent infrastructure and green data center operations to create long-term sustainable value. To sum up, we deliver robust first quarter results, reflecting continued strong execution and strategic direction. Looking ahead, we will stay focused on strengthening our core capabilities to capture the opportunities arising from accelerating AI adoption and digital transformation, delivering sustainable, high-quality growth, and creating long-term value for all stakeholders. This concludes our prepared remarks for today. We are now ready to take questions.

Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.

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If you are on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, please ask your question to Manitran in English and then repeat in Chinese. Your first question comes from Tom Ting from Morgan Stanley.

Thank you, Manitran, for the opportunity to ask the question. So again, congratulations on a very strong result in winning the over 500 megawatt order. So my question is on the delivery pattern of the new order. So how should we think about the time or the pattern we're going to deliver this 500 megawatt order and also on a quarterly basis, what is the impact to when or when we will see a significant impact to our revenue and EBITDA from this new order? And also, are we going to see upside to our current four-year capacitance given we're in a very large amount of borders 我也简单翻译一下 就是首先感谢管理层 给我这个提问的机会 也再次恭喜 是一个非常强烈的业绩 以及我们获得了 超过500兆瓦的一个订单 我的问题主要是 关于这个订单的交速节奏的 我们应该怎么去想 这个500兆瓦订单 在未来几个季度的 一个落地的时间 以及说对我们收入的一笔大 会在什么时候 产生一个比较显著的影响 我也简单翻译一下 首先感谢管理层给我提问的机会 再次恭喜是一个非常强烈的业绩 以及我们获得超过500兆瓦的一个订单 我的问题主要是关于订单的交付节奏的 我们应该怎么去想500兆瓦订单 在未来几个季度的一个落地的时间 以及说对我们收入的一笔大会在什么时候产生一个比较显著的影响 最后还是我们全民的资本开支是否也会有一个潜在的上售的可能 谢谢Tom 我来回答你的问题啊 首先我们这个超过500兆瓦的新订单呢

实际上是会在未来两到三年去分期交付的 也就是会在2026年27年28年分期交付 那第一批的交付呢会发生在2026年的下半年 我们是完全去基于客户的一个交付节奏去上架的 那随着上架呢 它必然会对我们未来的一些 未来三年的收入和ebitda去产生一个比较正向的影响 其实26年交付的部分 公司已经price in在我们的guidance里面了 包括就是我们开派的指引呢 也不会做调整

因为整个的交付节奏是分梯的 我们在给资本市场开发的指引的时候 也已经把这个交付节奏反映在里面了 谢谢 Thank you Tom for your question This is Sharon With regard to the 500MW new orders We are planning to deliver these new orders In the next two to three years effectively from 2026 throughout 2028. And we're going to deliver the very first batch in the first second half of 2026 based on the pace of our customers moving in pace. So that will positive 26 because the Kaipax guide for annual deliver target of 550 to 500 megawatts. Therefore, we're going to keep our annual CapEx guidance untouched.

Next question, please. Your next question comes from Edison Lee with Jeffries.

Hey, hi. Thank you for taking my questions. I got two questions. Number one is that now that CATL has become a strategic investor in VNAT, so can you maybe share with us how investors should think about synergies going forward? And also, previously, I think that Shandong High Speed has been building some green power plants in Ulaan's help to supply to your data center campus. So I wonder if that is ongoing and whether there will be any change to that. So that's number one. Number two is, can you comment on the pricing situation now that you have one pretty big project? And in fact, what are you seeing in terms of pricing trend in the market? and whether you think pricing in 2027 will actually be stable, or even go up. This is very interesting for me. I have two questions. The first question is about your new post-runs, CATL. Can we just open up your post-runs with CATL? Can we open up your post-runs with CATL? And then, I told them that it's not going to be necessary to build a new project. I wanted to see what this project is going on and how will there be changes in the future. This is the first question. The second question is about the price of the price of the price. From the next level, you think the cost of the entire industry in the 2027 to now, is there going to be an increase in the growth rate? Thank you.

Thank you, Edison. I will answer your question. The first question is that the company in the news report has already been released. The future of CATL will become a business partner. If the CITL and the CITL are going to be able to make a difference, we think that in the future, the CITL will still be able to study a lot of different levels. For example, AIDC's properties, AIDC's development, and the supply chain, and the supply chain, etc. Thank you very much. 这个双向的赋能。 Thank you very much. 其实都是要提升能源的效率,增强绿色能源的竞争力,保持这个长期合作的关系。这是第一个问题,就是和股东们的一些战略协作。 The second question is about the price increase. We also can see that in this季度, the market has a huge range of customers. It's a long term for 2 to 3 years. We can still see that in this year the market from customers'需求. Thank you very much. Thank you for your question.

As we have discussed in our quarterly report that CATL's affiliates is going to the shareholder shell the deal with Shandong's high-speed. Actually, we see specifically the synergy that we saw in technology and resources. To elaborate, we are going to leverage CATL's extensive supply chain resources, energy storage, and dispatch capabilities, augmented by their high-voltage DC technology. We are going to significantly enhance our data center's power stability and dynamic frequency regulation. I think this integration is vital to substantial demands of hyperscale AIDC clusters, directly sharpening our long-term competitive edge, and also the synergy we saw in commercial and operational side. You know, Vee bring our total wholesale capacity in service to 1.5 gigawatt. So this provides CATL with their businesses. And also, with our collaboration, we are going to accumulate a lot of critical operational data. This will also drive the neutral ecosystem value. For prior collaboration with the Shandong High Speed Holdings Group in terms of clean energy integration, we have maintained collaboration with Shandong High Speed Energy Development and Opportunities and expanded our cooperation on that side. And on top of that, infrastructure development takes the coordination of multiples, and we want opportunities based on its economics. At the end of the day, we want to match the machine. So our goal is competitiveness in the green question on the new strategic investor as well as our collaboration with the Shandong High-Speed Holdings in terms of the green development. And now coming back to the question on pricing. As we have disclosed in our earnings report that we have secured large orders that is going to be delivered within the next two to three years. And according to our observations, we have seen fairly strong demand from our customers in terms of premium and quality AIDC resources. And we're seeing that through Q1 to Q2. I think, so for now, all of these supply and demand dynamics improve in the future, we might see the possibilities of prices trending upward as well. Thanks.

Next question, please.

Your next question comes from Timothy Zou with Birdman Sachs.

Thank you, Benjamin, for taking my question, and congrats on the solid results. My question is regarding the wholesale capacity reserve that you have. I noticed that in the first quarter the company added another 300 megawatts capacity for the wholesale data centers. Just wondering if you have any targets for your capacity reserve for this year and probably in the midterm. And out of that 1.3 gigawatts capacity that you have in terms of expansion pipeline and capacity under construction, just wondering if you can share what proportion of that already received the power quarter approval from the government. Thank you.

Thank you.

Thank you, Timothy, for your question. The company's strategy in the medium to long term is that we are going to increase our efforts in acquiring more resources. As we have mentioned that we are, and according to the company's plan, we are going to acquire gigawatts primarily in Inner Mongolia, Yangtze River Delta. As you may know, the government already, because at VNAT, we got our projects approved by the government and with others being reviewed. The company is our power quotas, and also the company is, like I said, actively exploring more resources along the few regions for that.

Next question, please.

Your next question comes from Ming-Ran Lee with CICC.

Thanks, management, for taking my question. Really appreciate it. And with congrats on a very strong result, I have questions about our overseas business regarding the ATO's proposed strategic investment. Could you share any thoughts on how this partnership might shape your overseas expansion strategy? strategy I would like to thank you for this question and also for a very strong team of the yearbook I would like to thank you for this question in terms of how the company has been in the future in terms of what kind of strategy plan and planning thank you thank you for your question

to ask for the company 实际上 because we have a very good connection with these customers with very good customers we also The company is still on the top of the head of the international market. The company is still in a rather high-end position. In addition to the international market, if there are some information in the future, we will be able to communicate with the market.

Thank you Min-ren for your question. with regards to our overseas deployment relationship with our leading or key clients or customers. And they have been sending inquiries on our resource acquisition or shall there be any further updates? We will communicate them with you in a timely manner going forward. presence, which were the capability in will be affected to our advantages as we are going to conduct in overseas countries. Next question, please.

Your next question comes from Daily Lee with B&A Securities.

Hi, President. Thanks for taking my question. I have one question regarding our financing channels. With our full-year guidance for the cashbacks, how do we see the operating cash flow and also the financing channel like REITs to finance our cashbacks? And could we share our future REITs project, which will be our plan?

Thank you for your question.

The REITs project is such a plan. Thank you.

You mentioned that this is the entire project of 450 to 500 megawatt. We started to invest this. As you can see, we still need to do more. Q1 is our project.

2026 is based on the annual delivery target of 450 to 500 megawatt. We have very diversified financing channels, project level, as well as channels. So for the A, Better Back to Securities, we have successfully issued two of them.

Okay, thanks for the opportunity to ask me the question. So I've got two questions. The first one is a follow-up on the land reserve strategy. So, could management give us more color on our current reserve in the Inner Mongolia region, as well as what's our thoughts on the demands in other using data with the computing hub cities? And my second question is, could management give us some color on the potential listing in Hong Kong market? 自己翻译一下两个问题 第一个还是关于这个 我们土地储备的一个 一个问题就是可不可以让 管理层给我们再 讲一讲就是 我们在物南现在的储备 以及我们怎么看 在中处計算其他的这个 节点的一个需求 以及我们的计划 第二个是可不可以就是给我们 分享一下在香港上市的 一些可能或者想法 Thank you for your question.

From the土地储备, I'd like to show you a little bit more about that in terms of these areas. In general, our土地储备, the entire project is a lower single digit range, so the company will be able to do the土地資源. The second thing is about the three IPOs. Yes, I just wanted to answer Peter's question about the company's income system. We have different types of market market levels. We also have different types of market market levels. The company's strategy is to make money for our future, whether it's KIPAS or C-B or C-B. Actually, the company is always looking for the market market. Thank you for your question.

With regards to your question on our land reserve strategy, like I said, in the medium to long term, VNet is planning to acquire one gigawatt of river delta as well as the – to give you a specific number, the one gigawatt worth of a campus would roughly translates to 1,000 acres of land. Given the prices of the land is quite cheap, in actual percentage-wise, the cash flow CapEx for acquiring land will account for only low single digits of our total full-year CapEx, so the company would proactively acquire land to prepare for our, in terms of financing channels. As a listed company, we have diversified financing channels perspective as well as the, the company is proactively, we have been actively exploring the feasibility of potential Hong Kong listing as part of our efforts to optimize our capital structure and better support the company's long-term strategic development while broadening our international investor base. We will communicate with the public market in a timely manner once there is a more defined plan or any...

Your next question comes from Sarah Line with UBS.

Hi, thank you for the opportunity to ask the question. And again, congratulations on the solid results. I have actually one question. So I noticed that the commitment and pre-commitment rate of our resources is already quite high. And then on top of that, we have another one gigawoods resources helped for future development. So when I asked for this one gigawoods, what is the expected average lead time from order to delivery? And then at the same time, how shall we think about the unit capex, say, capex per megawoods, and how shall we think the trend going forward?

Thank you very much. 就是我们会在2万人民币左右 这个也是得益于整个我们供应链能力的一个提升 以及大规模的采购 实际上我们3000瓦的造价一直在持续的优化 那其实对于未来的一个交付和客户的pre-committment 公司还是会比较有信心的 像刚才提到了我们这个超过500MW的订单 and the client is also a different-sharing relationship. That means that the company's future share in the future is still getting a pre-committance. We believe in the future of the pre-committance rate is also more confident. However, the company will still be according to our prevailing rhythm. Yes, we're going to the next year to Q1. We will be able to move on to the next week.

To determine the market needs of the customer needs, We are planning to acquire gigawatt level worth of resources in the three key regions, like I mentioned, and we are going to disclose the update going forward. And moving back to the unit, for one megawatt of unit, the unit capacity is around 20,000 RMB per kilowatt. So that is achieved thanks to our supply chain capabilities as well as our large-scale batch procurement. and we have now discussed Q1 2027. And in terms of the 500 megawatt order we've secured, we are going to deliver them in batches, update the market on the orders we have locked in, as well as be fairly confident in maintaining or securing a high pre-committement rate for our...

There are no further questions at this time. ladies and gentlemen that concludes our conference for today thank you for participating you may not disconnect your mind