Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2023 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Registrant Name | GDS Holdings Limited |
Document Type | 20-F |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Central Index Key | 0001526125 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
Entity Filer Category | Large Accelerated Filer |
Entity Interactive Data Current | Yes |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Shell Company | false |
Entity File Number | 001-37925 |
Entity Address, Address Line One | F4/F5, Building C, Sunland International |
Entity Address, Address Line Two | No. 999 Zhouhai Road |
Entity Address, Address Line Three | Pudong |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 200137 |
Entity Address, Country | CN |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Incorporation, State or Country Code | E9 |
ICFR Auditor Attestation Flag | true |
Document Financial Statement Error Correction [Flag] | false |
Auditor Name | KPMG Huazhen LLP |
Auditor Firm ID | 1186 |
Auditor Location | Shanghai, China |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | F4/F5, Building C, Sunland International |
Entity Address, Address Line Two | No. 999 Zhouhai Road |
Entity Address, Address Line Three | Pudong |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 200137 |
Entity Address, Country | CN |
Contact Personnel Name | Mr. Daniel Newman |
City Area Code | 86 |
Local Phone Number | 21-2029 2200 |
American Depositary Shares, each representing eight Class A ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, each representing eightClass A ordinary shares |
Security Exchange Name | NASDAQ |
Trading Symbol | GDS |
Class A ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 1,480,842,655 |
Title of 12(b) Security | Class A ordinary shares, par value $0.00005 per share* |
Class B ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 43,590,336 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | ¥ 7,710,711 | ¥ 8,608,131 |
Restricted cash | 42,135 | 158,075 |
Accounts receivable, net of allowance for credit losses | 2,545,913 | 2,406,025 |
Value-added-tax ("VAT") recoverable | 214,385 | 164,743 |
Prepaid expenses | 174,949 | 186,807 |
Other current assets | 295,560 | 427,295 |
Total current assets | 10,983,653 | 11,951,076 |
Non-current assets | ||
Restricted cash | 165,086 | 115,860 |
VAT recoverable | 1,399,844 | 1,155,586 |
Property and equipment, net | 47,499,494 | 46,916,628 |
Intangible assets, net | 688,550 | 1,047,709 |
Prepaid land use rights, net | 22,388 | 23,002 |
Operating lease right-of-use assets | 5,436,288 | 5,633,946 |
Goodwill | 7,076,505 | 7,076,505 |
Deferred tax assets | 289,847 | 228,999 |
Other non-current assets | 885,035 | 664,643 |
Total non-current assets | 63,463,037 | 62,862,878 |
Total assets | 74,446,690 | 74,813,954 |
Current liabilities | ||
Short-term borrowings and current portion of long-term borrowings (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB83,502 and RMB260,509 as of December 31, 2022 and 2023, respectively) | 2,833,953 | 3,623,967 |
Convertible bonds payable, current | 2,083,829 | |
Accounts payable (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB493,332 and RMB536,177 as of December 31, 2022 and 2023, respectively) | 3,424,937 | 3,092,884 |
Accrued expenses and other payables (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB235,388 and RMB189,245 as of December 31, 2022 and 2023, respectively) | 1,198,451 | 1,016,961 |
Deferred revenue (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB151,050 and RMB108,496 as of December 31, 2022 and 2023, respectively) | 119,885 | 156,130 |
Operating lease liabilities, current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB41,898 and RMB40,267 as of December 31, 2022 and 2023, respectively) | 180,403 | 175,749 |
Finance lease and other financing obligations, current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB33,398 and RMB39,117 as of December 31, 2022 and 2023, respectively) | 547,847 | 453,855 |
Total current liabilities | 8,305,476 | 10,603,375 |
Non-current liabilities | ||
Long-term borrowings, excluding current portion (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB10,231 and RMB6,407 as of December 31, 2022 and 2023, respectively) | 26,706,256 | 23,518,058 |
Convertible bonds payable | 8,434,766 | 4,294,985 |
Operating lease liabilities, non-current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB134,684 and RMB99,806 as of December 31, 2022 and 2023, respectively) | 1,395,981 | 1,617,986 |
Finance lease and other financing obligations, non-current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB931,580 and RMB894,318 as of December 31, 2022 and 2023, respectively) | 7,894,185 | 8,916,266 |
Deferred tax liabilities (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB69,831 and RMB44,490 as of December 31, 2022 and 2023, respectively) | 1,282,484 | 1,410,376 |
Other long-term liabilities (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB52,222 and RMB52,478 as of December 31, 2022 and 2023, respectively) | 303,739 | 268,253 |
Total non-current liabilities | 46,017,411 | 40,025,924 |
Total liabilities | 54,322,887 | 50,629,299 |
Mezzanine Equity | ||
Redeemable preferred shares (US $0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2022 and 2023; Redemption value of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively; Liquidation preference of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively) | 1,064,766 | 1,047,012 |
Total mezzanine equity | 1,064,766 | 1,047,012 |
GDS Holdings Limited Shareholders' Equity | ||
Ordinary shares (US $0.00005 par value; 2,002,000,000 and 3,500,000,000 shares authorized as of December 31, 2022 and 2023, respectively; 1,456,842,655 and 1,480,842,655 Class A ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively; 67,590,336 and 43,590,336 Class B ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively) | 516 | 516 |
Additional paid-in capital | 29,337,095 | 29,048,598 |
Accumulated other comprehensive loss | (974,393) | (848,360) |
Accumulated deficit | (9,469,758) | (5,179,705) |
Total GDS Holdings Limited shareholders' equity | 18,893,460 | 23,021,049 |
Non-controlling interests | 165,577 | 116,594 |
Total equity | 19,059,037 | 23,137,643 |
Commitments and contingencies | ||
Total liabilities, mezzanine equity and equity | ¥ 74,446,690 | ¥ 74,813,954 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 CNY (¥) shares |
Current liabilities, VIEs | ||
Short-term borrowings and current portion of long-term borrowings | ¥ 2,833,953 | ¥ 3,623,967 |
Accounts payable | 3,424,937 | 3,092,884 |
Accrued expenses and other payables | 1,198,451 | 1,016,961 |
Deferred revenue | 119,885 | 156,130 |
Operating lease liabilities, current | 180,403 | 175,749 |
Finance lease and other financing obligations, current | 547,847 | 453,855 |
Long-term borrowings, excluding current portion | 26,706,256 | 23,518,058 |
Operating lease liabilities, non-current | 1,395,981 | 1,617,986 |
Finance lease and other financing obligations, non-current | 7,894,185 | 8,916,266 |
Deferred tax liabilities | 1,282,484 | 1,410,376 |
Other long-term liabilities | ¥ 303,739 | ¥ 268,253 |
Ordinary shares | ||
Ordinary shares, shares authorized | shares | 3,500,000,000 | 2,002,000,000 |
Class A | ||
Ordinary shares | ||
Ordinary shares, shares issued | shares | 1,480,842,655 | 1,456,842,655 |
Ordinary shares, shares outstanding | shares | 1,480,842,655 | 1,456,842,655 |
Class B | ||
Ordinary shares | ||
Ordinary shares, shares issued | shares | 43,590,336 | 67,590,336 |
Ordinary shares, shares outstanding | shares | 43,590,336 | 67,590,336 |
Redeemable preferred shares | ||
Redeemable preferred shares | ||
Preferred Stock, Shares Authorized | shares | 150,000 | 150,000 |
Preferred Stock, Shares Issued | shares | 150,000 | 150,000 |
Preferred Stock, Shares Outstanding | shares | 150,000 | 150,000 |
Redemption value | ¥ 1,064,766 | ¥ 1,047,012 |
Liquidation preference | 1,064,766 | 1,047,012 |
VIEs [Member] | Without recourse to the primary beneficiary | ||
Current liabilities, VIEs | ||
Short-term borrowings and current portion of long-term borrowings | 260,509 | 83,502 |
Accounts payable | 536,177 | 493,332 |
Accrued expenses and other payables | 189,245 | 235,388 |
Deferred revenue | 108,496 | 151,050 |
Operating lease liabilities, current | 40,267 | 41,898 |
Finance lease and other financing obligations, current | 39,117 | 33,398 |
Long-term borrowings, excluding current portion | 6,407 | 10,231 |
Operating lease liabilities, non-current | 99,806 | 134,684 |
Finance lease and other financing obligations, non-current | 894,318 | 931,580 |
Deferred tax liabilities | 44,490 | 69,831 |
Other long-term liabilities | ¥ 52,478 | ¥ 52,222 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net revenue | ¥ 9,956,501 | ¥ 9,325,631 | ¥ 7,818,681 |
Cost of revenue | (8,034,051) | (7,389,774) | (6,039,252) |
Gross profit | 1,922,450 | 1,935,857 | 1,779,429 |
Operating expenses | |||
Selling and marketing expenses | (144,154) | (150,433) | (148,614) |
General and administrative expenses | (1,185,426) | (1,185,080) | (1,021,950) |
Research and development expenses | (38,159) | (35,806) | (39,343) |
Impairment losses of long-lived assets | (3,013,416) | (12,759) | 0 |
Income (loss) from operations | (2,458,705) | 551,779 | 569,522 |
Other income (expenses): | |||
Interest income | 97,546 | 42,460 | 50,445 |
Interest expenses | (2,036,979) | (1,887,887) | (1,654,737) |
Foreign currency exchange (loss) gain, net | (267) | 1,272 | (7,644) |
Government grants | 84,511 | 95,581 | 88,209 |
Gain from purchase price adjustment | 205,000 | 7,010 | |
Others, net | 13,724 | 1,912 | (1,557) |
Loss before income taxes | (4,300,170) | (989,883) | (948,752) |
Income tax (expenses) benefits | 14,777 | (276,235) | (242,461) |
Net loss | (4,285,393) | (1,266,118) | (1,191,213) |
Net loss (income) attributable to non-controlling interests | (4,660) | (3,427) | 1,403 |
Net loss attributable to redeemable non-controlling interests | 655 | 2,592 | |
Net loss attributable to GDS Holdings Limited shareholders | (4,290,053) | (1,268,890) | (1,187,218) |
Accretion to redemption value of redeemable non-controlling interests | (10,801) | (77,644) | |
Adjustment to the redemption value of redeemable non-controlling interests | (178,982) | ||
Net loss available to GDS Holdings Limited shareholders | (4,290,053) | (1,458,673) | (1,264,862) |
Cumulative dividend on redeemable preferred shares | (53,625) | (51,212) | (49,073) |
Net loss available to GDS Holdings Limited ordinary shareholders | ¥ (4,343,678) | ¥ (1,509,885) | ¥ (1,313,935) |
Loss per Class A and Class B ordinary share | |||
Loss per Class A and Class B ordinary share, basic | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Loss per Class A and Class B ordinary share, diluted | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Weighted average number of ordinary share outstanding | |||
Weighted average number of ordinary share outstanding, basic | 1,468,187,956 | 1,464,447,843 | 1,452,906,722 |
Weighted average number of ordinary share outstanding, diluted | 1,468,187,956 | 1,464,447,843 | 1,452,906,722 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Net loss | ¥ (4,285,393) | ¥ (1,266,118) | ¥ (1,191,213) |
Other comprehensive loss | |||
Foreign currency translation adjustments, net of nil tax | (125,118) | (247,509) | (159,714) |
Comprehensive loss | (4,410,511) | (1,513,627) | (1,350,927) |
Comprehensive loss (income) attributable to non-controlling interests | (5,575) | (5,092) | 1,566 |
Comprehensive loss attributable to redeemable non-controlling interests | 655 | 2,592 | |
Comprehensive loss attributable to GDS Holdings Limited shareholders | ¥ (4,416,086) | ¥ (1,518,064) | ¥ (1,346,769) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Foreign currency translation adjustments, income taxes | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - CNY (¥) ¥ in Thousands | Common Stock [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive loss | Accumulated deficit | Total GDS Holdings Limited shareholders' equity | Non- controlling interests | Total |
Balance at Dec. 31, 2020 | ¥ 507 | ¥ 28,728,717 | ¥ (439,635) | ¥ (2,723,597) | ¥ 25,565,992 | ¥ 25,565,992 | |
Balance (in shares) at Dec. 31, 2020 | 1,495,180,395 | ||||||
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||
Loss for the year | (1,187,218) | (1,187,218) | ¥ (1,403) | (1,188,621) | |||
Other comprehensive loss | (159,551) | (159,551) | (163) | (159,714) | |||
Total comprehensive loss | (159,551) | (1,187,218) | (1,346,769) | (1,566) | (1,348,335) | ||
Accretion to redemption value of redeemable non-controlling interests | (77,644) | (77,644) | (77,644) | ||||
Redeemable preferred shares dividends | (49,073) | (49,073) | (49,073) | ||||
Acquisition of subsidiaries | 56,519 | 56,519 | |||||
Capital contribution from non-controlling interests | 17,147 | 17,147 | |||||
Acquisition of non-controlling interests | (25,267) | (25,267) | (39,846) | (65,113) | |||
Change in non-controlling interest of a subsidiary | 2,093 | 2,093 | 26,919 | 29,012 | |||
Share-based compensation | 391,275 | 391,275 | 391,275 | ||||
Exercise of share options | 2,082 | 2,082 | ¥ 2,082 | ||||
Exercise of share options (in shares) | 407,000 | 407,000 | |||||
Vesting of restricted shares (in shares) | 12,453,824 | ||||||
Settlement of liability-classified restricted share award | 11,147 | 11,147 | ¥ 11,147 | ||||
Settlement of liability-classified restricted shares award (in shares) | 178,280 | ||||||
Settlement of share options and restricted share awards with shares held by depository bank (in shares) | (13,039,104) | ||||||
Balance at Dec. 31, 2021 | ¥ 507 | 28,983,330 | (599,186) | (3,910,815) | 24,473,836 | 59,173 | 24,533,009 |
Balance (in shares) at Dec. 31, 2021 | 1,495,180,395 | ||||||
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||
Loss for the year | (1,268,890) | (1,268,890) | 3,427 | (1,265,463) | |||
Other comprehensive loss | (249,174) | (249,174) | 1,665 | (247,509) | |||
Total comprehensive loss | (249,174) | (1,268,890) | (1,518,064) | 5,092 | (1,512,972) | ||
Shares issued to depository bank | ¥ 9 | (9) | |||||
Shares issued to depository bank (in shares) | 29,252,600 | ||||||
Accretion to redemption value of redeemable non-controlling interests | (10,801) | (10,801) | (10,801) | ||||
Adjustment to the redemption value of redeemable non-controlling interests | (178,982) | (178,982) | (178,982) | ||||
Redeemable preferred shares dividends | (51,212) | (51,212) | (51,212) | ||||
Capital contribution from non-controlling interests | 10,362 | 10,362 | |||||
Change in non-controlling interest of a subsidiary | 1,738 | 1,738 | 41,967 | 43,705 | |||
Share-based compensation | 290,815 | 290,815 | 290,815 | ||||
Vesting of restricted shares (in shares) | 4,555,720 | ||||||
Settlement of liability-classified restricted share award | 13,719 | 13,719 | 13,719 | ||||
Settlement of liability-classified restricted shares award (in shares) | 460,272 | ||||||
Settlement of share options and restricted share awards with shares held by depository bank (in shares) | (5,015,992) | ||||||
Other (in shares) | (4) | ||||||
Balance at Dec. 31, 2022 | ¥ 516 | 29,048,598 | (848,360) | (5,179,705) | 23,021,049 | 116,594 | 23,137,643 |
Balance (in shares) at Dec. 31, 2022 | 1,524,432,991 | ||||||
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||
Loss for the year | (4,290,053) | (4,290,053) | 4,660 | (4,285,393) | |||
Other comprehensive loss | (126,033) | (126,033) | 915 | (125,118) | |||
Total comprehensive loss | (126,033) | (4,290,053) | (4,416,086) | 5,575 | (4,410,511) | ||
Redeemable preferred shares dividends | (53,625) | (53,625) | (53,625) | ||||
Capital contribution from non-controlling interests | 2,039 | 2,039 | 42,146 | 44,185 | |||
Change in non-controlling interest of a subsidiary | (9,447) | (9,447) | 9,447 | ||||
Disposal of a subsidiary | (8,185) | (8,185) | |||||
Share-based compensation | 336,616 | 336,616 | 336,616 | ||||
Vesting of restricted shares (in shares) | 3,752,472 | ||||||
Settlement of liability-classified restricted share award | 12,914 | 12,914 | 12,914 | ||||
Settlement of liability-classified restricted shares award (in shares) | 1,035,704 | ||||||
Settlement of share options and restricted share awards with shares held by depository bank (in shares) | (4,788,176) | ||||||
Balance at Dec. 31, 2023 | ¥ 516 | ¥ 29,337,095 | ¥ (974,393) | ¥ (9,469,758) | ¥ 18,893,460 | ¥ 165,577 | ¥ 19,059,037 |
Balance (in shares) at Dec. 31, 2023 | 1,524,432,991 |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | ||
Net loss attributable to redeemable non-controlling interests | ¥ 655 | ¥ 2,592 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net loss | ¥ (4,285,393) | ¥ (1,266,118) | ¥ (1,191,213) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Amortization of debt issuance and commitment cost and debt discount | 152,286 | 154,916 | 200,069 |
Depreciation and amortization | 3,519,745 | 3,189,074 | 2,616,898 |
Operating lease cost relating to prepaid land use rights | 108,254 | 101,848 | 40,422 |
Net gain on disposal of property and equipment | (12,051) | (15,025) | (1,763) |
Share-based compensation expenses | 336,616 | 290,815 | 391,275 |
Impairment losses of long-lived assets | 3,013,416 | 12,759 | 0 |
Gain from purchase price adjustment | (205,000) | (7,010) | |
Loss (gain) from equity method investment | (110) | 9,934 | 968 |
Gains on disposal of equity investments and subsidiaries | (5,010) | ||
Allowance for credit losses | 18,294 | 9,930 | 10,070 |
Deferred tax benefit | (295,931) | (99,153) | (48,463) |
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: | |||
Accounts receivable | (156,326) | (678,834) | (37,992) |
VAT recoverable | (388,734) | 1,182,515 | (631,562) |
Prepaid expenses | 94,431 | 18,284 | (35,192) |
Other current assets | (3,815) | 3,859 | (55,452) |
Other non-current assets | 3,652 | 2,981 | (53,702) |
Accounts payable | 17,976 | 189,714 | 35,496 |
Accrued expenses and other payables | (70,384) | (123,513) | (121,828) |
Deferred revenue | 1,751 | 49,557 | 24,470 |
Other long-term liabilities | 8,785 | 2,374 | 15,190 |
Operating leases | 7,805 | 27,150 | 50,682 |
Net cash provided by operating activities | 2,065,257 | 2,858,067 | 1,201,363 |
Cash flows from investing activities: | |||
Payments for purchase of property and equipment and land use rights | (6,021,834) | (7,847,305) | (9,700,536) |
Cash acquired from the business combinations | 57,236 | ||
Cash paid for the business combinations | (1,196,758) | (3,451,941) | |
Cash paid for the asset acquisitions | (231,850) | (2,287,199) | (179,770) |
Cash paid for equity investments | (3,000) | (3,400) | (3,000) |
Receipts from disposal of equity investments and subsidiaries | 23,630 | ||
Deposits and prepayments for potential acquisitions | (133,805) | (20,000) | (503,332) |
Refund of deposits for potential acquisitions | 22,107 | 39,000 | 67,528 |
Receipts from collection of loans acquired in acquisitions | 20,866 | ||
Payments for purchase of debt securities | (2,840) | ||
Proceeds from sale of property and equipment | 18,565 | 43,618 | 1,411 |
Net cash used in investing activities | (6,326,187) | (11,274,884) | (13,691,538) |
Cash flows from financing activities: | |||
Proceeds from short-term borrowings | 1,395,388 | 4,876,691 | 3,775,353 |
Proceeds from long-term borrowings | 9,192,971 | 7,012,465 | 12,409,833 |
Repayment of short-term borrowings | (2,336,360) | (8,237,650) | (902,659) |
Repayment of long-term borrowings | (5,822,189) | (1,347,740) | (5,177,495) |
Payment of issuance cost and commitment cost of debts | (287,872) | (109,419) | (150,008) |
Proceeds from exercise of stock options | 2,082 | ||
Proceeds from issuance of convertible bonds | 3,926,667 | 3,917,036 | |
Repayment of convertible bonds | (2,128,311) | ||
Payment of redeemable preferred shares dividends | (53,923) | (51,578) | (49,221) |
Capital contribution from non-controlling shareholders | 44,185 | 225,948 | |
Proceeds from sales of non-controlling interests of subsidiaries while retaining control | 69,828 | ||
Payment under finance leases and other financing obligations | (986,888) | (1,138,542) | (265,481) |
Proceeds from other financing arrangements | 220,000 | 845,319 | 50,312 |
Payment for purchase of property and equipment through vendor financing | (105,916) | (808,200) | |
Payment of contingent consideration for the acquisition of subsidiaries | (21,174) | (280,375) | (926,196) |
Payment for acquisition of non-controlling interests | (593,801) | (65,113) | |
Net cash provided by financing activities | 3,142,494 | 4,856,318 | 8,119,155 |
Effect of exchange rate changes on cash and restricted cash | 154,302 | 416,198 | (95,542) |
Net decrease in cash and restricted cash | (964,134) | (3,144,301) | (4,466,562) |
Cash and restricted cash at beginning of year | 8,882,066 | 12,026,367 | 16,492,929 |
Cash and restricted cash at end of year | 7,917,932 | 8,882,066 | 12,026,367 |
Supplemental disclosures of cash flow information | |||
Interest paid | 2,061,889 | 1,803,013 | 1,538,974 |
Income tax paid | 302,717 | 343,349 | 252,071 |
Supplemental disclosures of non-cash investing and financing activities | |||
Non-cash effect of acquisitions of subsidiaries | 100,000 | 7,644 | 2,044,575 |
Settlement of liability-classified restricted share award | ¥ 12,914 | 13,719 | ¥ 11,147 |
Other receivable contributed by non-controlling shareholders as capital contributions | ¥ 10,362 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 1 DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (a) Description of business GDS Holdings Limited (the “Parent” or “GDS Holdings”) was incorporated in the Cayman Islands on December 1, 2006. GDS Holdings and its consolidated subsidiaries and consolidated variable interest entities (collectively referred to as “the Company”) are principally engaged in providing colocation, managed hosting and managed cloud services in the People’s Republic of China (the “PRC” excluding Taiwan, the Hong Kong Special Administrative Region (the “Hong Kong SAR”) and the Macau Special Administrative Region (the “Macau SAR”) for the purposes of these consolidated financial statements only), Hong Kong SAR, Singapore, Malaysia and Indonesia and serves customers who primarily are cloud service providers, large internet, financial institution and enterprise customers. (b) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The consolidated financial statements are presented in Renminbi (“RMB”), rounded to the nearest thousand. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Principles of consolidation The accompanying consolidated financial statements include the financial statements of GDS Holdings Limited, its subsidiaries and consolidated variable interest entities and variable interest entities’ subsidiaries for which GDS Holdings is the primary beneficiary. The Company’s data center related operations are mainly conducted through Shanghai Xinwan Enterprise Management Co., Ltd. (“Management HoldCo”), Beijing Wanguo Chang’an Science and Technology Co., Ltd. (“GDS Beijing”), GDS Beijing’s subsidiaries and Shanghai Shu’an Data Services Co., Ltd. (“GDS Shanghai”) (referred to as the “VIEs”) to comply with the PRC laws and regulations, which prohibit foreign investments in companies that are engaged in data center related business. Individuals acting as nominee equity holders ultimately hold the legal equity interests of the VIEs on behalf of GDS Holdings. Prior to December 2019, the equity holders of GDS Beijing and GDS Shanghai were William Wei Huang, CEO of GDS Holdings, and his relative. In order to enhance corporate governance and facilitate administration of the VIEs, in December 2019, GDS Holdings completed transfer of ownership of the 100% equity interest of GDS Beijing and GDS Shanghai from William Wei Huang and his relative to a newly established holding company, Management HoldCo. The entire equity interest in Management HoldCo is held by a number of management personnel designated by the board of directors of GDS Holdings. In conjunction with the transfer of legal ownership, GDS (Shanghai) Investment Co., Ltd. (“GDS Investment Company”), a subsidiary of GDS Holdings, entered into a series of contractual arrangements with Management HoldCo, its shareholders, GDS Beijing and GDS Shanghai to replace the previous contractual arrangements with GDS Beijing and GDS Shanghai on substantially the same terms under such previous contractual arrangements. The previous contractual arrangements were terminated simultaneously when the current contractual arrangements came into effect, and the subsidiary of GDS Holdings under the previous and current contractual arrangements is the same entity, namely GDS Investment Company. GDS Holdings also replaced the sole director of GDS Shanghai and certain subsidiaries of GDS Beijing with a board of three directors. William Wei Huang acts as the Chairman of the board of directors of Management HoldCo, GDS Investment Company, GDS Beijing and GDS Shanghai and their subsidiaries respectively. Other management members of GDS and board appointee serve as directors and officers of Management HoldCo., GDS Investment Company, GDS Beijing and GDS Shanghai and their subsidiaries. This restructuring could reduce risk by allocating ownership of the VIEs among a larger number of individual management shareholders, and strengthen corporate governance with the establishment of the board of directors of the VIEs and their subsidiaries. This restructuring could also create a more stable ownership structure by avoiding reliance on a single or small number of natural persons, and by buffering the ownership of the VIEs with an additional layer of legal entities. A series of contractual arrangements, including equity interest pledge agreements, shareholder voting rights proxy agreements, exclusive technology license and service agreements, intellectual property rights license agreements, exclusive call option agreements and loan agreements (collectively, referred to as “VIE Agreements”) were entered into among GDS Beijing, GDS Shanghai, Management HoldCo, its shareholders and GDS Investment Company. Equity Interest Pledge Agreements. Shareholder Voting Rights Proxy Agreements. Exclusive Technology License and Service Agreements. Intellectual Property Rights License Agreements. Exclusive Call Option Agreements. Loan Agreements. thirty Under the terms of the VIE Agreements, GDS Holdings has (i) the right to receive service fees on a yearly basis at an amount equivalent to all of the net profits of the VIEs under the exclusive technology license and services agreements when such services are provided; (ii) the right to receive all dividends declared by the VIEs and the right to all undistributed earnings of the VIEs; (iii) the right to receive the residual benefits of the VIEs through its exclusive option to acquire 100% of the equity interests in the VIEs, to the extent permitted under PRC law; and (iv) the right to require each of the shareholder of the VIEs to appoint the PRC citizen(s) as designated by GDS Investment Company to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of the VIEs requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in the VIEs, and appointing directors and executive officers. In accordance with Accounting Standards Codification (“ASC”) 810-10-25-38A, GDS Holdings has a controlling financial interest in the VIEs because GDS Holdings has (i) the power to direct activities of the VIEs that most significantly impact the economic performance of the VIEs; and (ii) the right to receive expected residual return of the VIEs that could potentially be significant to the VIEs. There is currently no contractual arrangement that would require GDS Holdings to provide additional financial support to the VIEs. As GDS Holdings is conducting certain businesses mainly through the VIEs, GDS Holdings may provide such support on a discretionary basis in the future, which could expose GDS Holdings to a loss. The terms of the VIE Agreements and financial support from GDS Holdings to the VIEs were considered in determining that GDS Holdings is the primary beneficiary of the VIEs. Accordingly, the financial statements of the VIEs are consolidated in GDS Holdings’s consolidated financial statements. Under the terms of the VIE Agreements, the VIEs’ equity holders have no rights to the net assets nor have the obligations to fund the deficit, and such rights and obligations have been vested to GDS Holdings. All of the equity (net assets) or deficits (net liabilities) and net income (loss) of the VIEs are attributed to GDS Holdings. The Company has been advised by its PRC legal counsel that each of the VIE agreements is valid, legally binding and enforceable in accordance with its terms and applicable PRC laws and the ownership structure of the VIEs does not violate applicable PRC Laws. However, there are uncertainties regarding the interpretation and application of PRC laws and future PRC laws and regulations. There can be no assurance that the PRC authorities will take a view that is not contrary to or otherwise different. If the current ownership structure of the Company and the VIE Agreements are determined to be in violation of any existing or future PRC laws and regulations, the PRC government could: ● Levy fines on the Company or confiscate income of the Company; ● Revoke or suspend the VIEs’ business or operating licenses; ● Discontinue or place restrictions or onerous conditions on VIE’s operations; ● Require the Company to discontinue their operations in the PRC; ● Require the Company to undergo a costly and disruptive restructuring; ● Take other regulatory or enforcement actions that could be harmful to the Company’s business. The imposition of any of these government actions could result in the termination of the VIE agreements, which would result in GDS Holdings losing the (i) ability to direct the activities of the VIEs and (ii) rights to receive substantially all the economic benefits and residual returns from the VIEs and thus result in the deconsolidation of the VIEs in GDS Holdings’s consolidated financial statements. The following tables set forth the financial statement balances and amounts of the VIEs and their subsidiaries included in the consolidated financial statements after the elimination of intercompany balances and transactions among VIEs and their subsidiaries. As of December 31, 2022 2023 Assets Current assets Cash 2,326,332 2,451,473 Restricted cash — 1,345 Accounts receivable, net of allowance for credit losses 2,371,362 2,458,297 VAT recoverable 79,163 134,595 Prepaid expenses 76,557 36,777 Other current assets 126,385 108,015 Total current assets 4,979,799 5,190,502 Property and equipment, net 2,441,858 2,030,013 Intangible assets, net 124,691 66,474 Operating lease right-of-use assets 186,795 152,689 Deferred tax assets 38,348 61,549 Restricted cash 32,621 29,680 VAT recoverable 26,087 29,280 Other non-current assets 148,787 144,599 Total assets 7,978,986 7,704,786 Liabilities Current liabilities Short-term borrowings and current portion of long-term borrowings 258,200 435,767 Accounts payable 493,332 536,177 Accrued expenses and other payables 235,388 189,245 Deferred revenue 151,050 108,496 Operating lease liabilities, current 41,898 40,267 Finance lease and other financing obligations, current 33,398 39,117 Total current third-party liabilities 1,213,266 1,349,069 Long-term borrowings, excluding current portion 721,387 542,023 Operating lease liabilities, non-current 134,684 99,806 Finance lease and other financing obligations, non-current 931,580 894,318 Deferred tax liabilities 69,831 44,490 Other long-term liabilities 52,222 52,478 Total third-party liabilities 3,122,970 2,982,184 Amounts due to GDS Holdings and its non-VIE subsidiaries, net 4,302,245 4,176,728 Total liabilities 7,425,215 7,158,912 As of December 31, 2022 and 2023, accounts receivable of RMB66,503 and RMB82,930, respectively, other current assets of nil and RMB12,646, respectively, other non-current assets of RMB9,337 and RMB5,876, respectively, and property and equipment of RMB45,572 and RMB39,152, respectively, of VIEs were pledged solely to secure banking borrowings of VIEs. As of December 31, 2022 and 2023, long-term borrowings of the consolidated VIEs of RMB885,854 and RMB710,874, respectively, were guaranteed by GDS Holdings Limited and its subsidiaries. Net revenue, net income, operating, investing and financing cash flows of the VIEs that were included in the Company’s consolidated financial statements for the years ended December 31, 2021, 2022 and 2023 are as follows: Years ended December 31, 2021 2022 2023 Net revenue 7,516,345 8,958,853 9,489,505 Net income (loss) 112,257 223,925 (7,897) Net cash provided by operating activities 744,493 1,533,548 235,448 Net cash used in investing activities (205,041) (143,796) (86,336) Net cash used in financing activities (561,101) (369,324) (25,567) The unrecognized revenue-producing assets that are held by the VIEs comprise of internally developed software, intellectual property and trademarks which were not recorded on the Company’s consolidated balance sheets as they do not meet all the capitalization criteria. Costs recognized by the VIEs for outsourcing and other services provided by other entities within the Company were RMB5,160,638, RMB6,336,874 and RMB7,312,771 for the years ended December 31, 2021, 2022 and 2023, respectively, net of the related services provided to other entities within the Company. These inter-company transactions are eliminated in the consolidated financial statements. (b) Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, the fair values of assets acquired and liabilities assumed and the consideration transferred in a business combination, the impairment of goodwill, the realization of deferred income tax assets, the fair value of share-based compensation awards, the recoverability of long-lived assets, and incremental borrowing rate of leases. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. (c) Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company does not have any cash equivalents as of December 31, 2022 and 2023. (d) Restricted cash Restricted cash represents amounts held by banks, which are not available for the Company’s use, primarily as security for bank borrowings, related interests and certain construction projects. Upon repayment of bank borrowings and the related interests and completion of construction projects, the deposits are released by the bank and available for general use by the Company. (e) Fair value of financial instruments The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (Note 16 to the consolidated financial statements): ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. (f) Contract balances The timing of revenue recognition, billings and cash collections result in accounts receivable, contract assets and contract liabilities (i.e. deferred revenue). Accounts receivable are recorded at the invoice amount, net of an allowance for credit losses and is recognized in the period when the Company has transferred products or provided services to its customers and when its right to consideration is unconditional. Amounts collected on accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The provision of credit losses for accounts receivable is based upon the current expected credit losses (“CECL”) model. The CECL model requires an estimate of the credit losses expected over the life of accounts receivable since initial recognition, and accounts receivable with similar risk characteristics are grouped together when estimating CECL. In assessing the CECL, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical credit loss experience, adjusted for relevant factors impacting collectability and forward-looking information indicative of external market conditions. While the Company uses the best information available in making determination, the ultimate recovery of recorded receivables is also dependent upon future economic events and other conditions that may be beyond the Company’s control. Accounts receivable that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for credit losses. The Company does not have any off-balance-sheet credit exposure related to its customers. A contract asset exists when the Company has transferred products or provided services to its customers but customer payment is contingent upon satisfaction of additional performance obligations. Contract assets are recorded in other current assets in the consolidated balance sheet. Deferred revenue (a contract liability) is recognized when the Company has an unconditional right to a payment before it transfers goods or services to customers. (g) Fulfilment costs Fulfilment costs are capitalized when all three of the criteria are met: a) the costs relate directly to a contract or an anticipated contract that the Company can specifically identify; b) the costs generate or enhance resources of the Company that will be used in satisfying or continuing to satisfy future performance obligations; and c) the costs are expected to be recovered. The asset recognized from capitalizing the costs to fulfill a contract is amortized on a systematic basis consistent with the pattern of the transfer of the goods or services to which the asset relates. As of December 31, 2022 and 2023, the Company recorded capitalized fulfilment cost of RMB47,400 and RMB47,400, respectively, in other non-current assets. (h) Equity method investments The Company’s investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are generally accounted for under the equity method of accounting. Equity method investments are initially measured at cost, and are subsequently adjusted for cash contributions, distributions and the Company’s share of the income and losses of the investees. The Company records its equity method investment in other non-current assets on the consolidated balance sheet. The Company’s proportionate share of the income or loss from its equity method investment are recorded in others, net on the consolidated statement of operations. The Company reviews its investment periodically to determine if any investment may be impaired considering both qualitative and quantitative factors that may have a significant impact on the investees’ fair value. The Company did not record any impairment losses related to its equity method investment for the years ended December 31, 2021, 2022 and 2023. (i) Property and equipment Property and equipment are carried at cost less accumulated depreciation and any recorded impairment. Property and equipment acquired under finance leases are initially recorded at the present value of minimum lease payments. Buildings and equipment under finance leases and leasehold improvements with definite useful lives are amortized over the shorter of the lease term or the estimated useful life of the asset or improvement. Leasehold land is amortized on a straight-line basis over the lease term. Freehold land is not amortized. Gains or losses arising from the disposal of an item of property and equipment are determined based on the difference between the net disposal proceeds and the carrying amount of the item and are recognized in profit or loss on the date of disposal. The estimated useful lives of self-owned property and equipment are presented below. Buildings 30 years Data center equipment – Machinery 10 – 3 Furniture and office equipment 3 Vehicles 5 years Construction in progress primarily consists of the cost of data center buildings and the related construction expenditures that are required to prepare the data center buildings for their intended use. No depreciation is provided in respect of construction in progress until it is substantially completed and ready for its intended use. Once a data center building is ready for its intended use and becomes operational, construction in progress is transferred to the respective category of property and equipment and is depreciated over the estimated useful life of the underlying assets. Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets. (j) Leases The Company is a lessee in a number of non-cancellable operating leases and finance leases, primarily for data centers, lands, offices and other equipment. The Company determines if an arrangement is or contains a lease at its inception. The Company recognizes lease liabilities and right-of-use (“ROU”) assets at lease commencement date. Lease liabilities are measured at the present value of unpaid lease payments at the lease commencement date and is subsequently measured at amortized cost using the effective-interest method. Since most of the Company’s leases do not provide an implicit rate, the Company uses its own incremental borrowing rate in determining the present value of unpaid lease payments. The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that the Company would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term. ROU assets are initially measured at cost, which consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. For operating leases, the Company recognizes a single lease cost on a straight-line basis over the remaining lease term. For finance leases, the ROU assets are subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term. Amortization of the ROU assets are recognized and presented separately from interest expense on the lease liability. For leases acquired in business combinations or asset acquisitions, ROU assets are measured at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Prior to the adoption of ASC 842, Leases The Company has elected not to recognize ROU assets and lease liabilities for short-term leases (i.e. leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). As a practical expedient, the Company has elected that for all leases, where it is the lessee, not to separate non-lease components from lease components and instead to account for all lease and non-lease components associated with each lease as a single lease component. The Company records an asset and related financing obligation for the estimated construction costs under build-to-suit lease arrangements where it controls the asset during construction. Upon completion of the construction and commencement of the lease terms, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback transaction. If the arrangements do not qualify for sales recognition under the sale-leaseback accounting guidance, the Company continues to be the deemed owner of the build-to-suit assets for financial reporting purposes. The Company accounted for costs incurred relating to the construction of the underlying assets before the lease commencement dates in accordance with ASC 360 on its balance sheet. In addition, the financing liability is reduced by the non-interest portion of the lease payments. If a lease is modified and that modification is not accounted for as a separate contract, the classification of the lease is reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. The FASB has provided accounting elections for entities that provide or receive rent concessions (e.g., deferral of lease payments, reduced future lease payments) due to the COVID-19 pandemic. During years ended December 31, 2021 and 2022, the Company was granted lease concessions by certain landlords due to the effects of the COVID-19 pandemic. The Company assessed that these rent concessions qualify for the election, as these concessions did not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The Company then elected to not evaluate whether these concessions are lease modifications and chose to adopt a policy to not account for these concessions as lease modifications. Instead, the Company, as a lessee that was contractually released from certain lease payments, accounts these rent concessions as negative variable lease payments (Note 12). (k) Asset retirement costs The Company’s asset retirement obligations are primarily related to its data center buildings, of which the majority are leased under long-term arrangements, and, in certain cases, are required to be returned to the landlords in their original condition. The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred. The corresponding asset retirement costs are capitalized as part of the cost of leasehold improvements and are depreciated over the shorter of the estimated useful life of the asset or the term of the lease subsequent to the initial measurement. The Company accretes the liability in relation to the asset retirement obligations over time and the accretion expense is recorded in cost of revenue. Asset retirement obligations are recorded in accrued expenses and other payables and other long-term liabilities. The following table summarizes the activity of the asset retirement obligation liability: Asset retirement obligations as of January 1, 2021 76,909 Additions 22,745 Accretion expense 6,227 Settlement (998) Asset retirement obligations as of December 31, 2021 104,883 Additions 4,382 Accretion expense 6,366 Foreign exchange impact 158 Settlement (3,978) Asset retirement obligations as of December 31, 2022 111,811 Additions 602 Accretion expense 6,805 Foreign exchange impact 32 Derecognition upon disposal of a subsidiary (1,360) Revision in estimated cash flows as result of lease contracts modifications (9,258) Settlement (2,103) Asset retirement obligations as of December 31, 2023 106,529 (l) Intangible assets Intangible assets acquired in the acquisitions comprised of customer contracts and licenses. The weighted-average amortization period by major intangible asset class is as follows: Customer contracts 5 Licenses 20 years Software 5 years The amortization period of customer contracts is determined based on the remaining contractual period of the contracts with the customers at the time of acquisition and an estimate of the contract renewal period. Licenses are amortized using a straight-line method over the terms of those licenses. (m) Prepaid land use rights The land use rights represent the amounts paid and relevant costs incurred for the rights to use land in the PRC and Hong Kong SAR before the adoption of ASC 842, and are carried at cost less accumulated amortization. Amortization is provided on a straight-line basis over the remaining terms of the land use rights. As of December 31, 2023 the remaining terms of the land use rights range from 35 (n) Business combinations and goodwill The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations The acquisition method of accounting requires the Company to estimate fair values of the separately identifiable assets acquired and liabilities assumed. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The determination of fair values of the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Goodwill is an asset representing the future economic benefits arising from other assets acquired in the acquisition that are not individually identified and separately recognized. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in macroeconomic conditions, the industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, and events affecting a reporting unit and share price. Application of the goodwill impairment test requires judgment, including the identification of the reporting unit, assignment of assets and liabilities to the reporting unit, assignment of goodwill to the reporting unit, and determination of the fair value of each reporting unit. The Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value prior to performing the goodwill impairment test. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the goodwill impairment test is not required. If the goodwill impairment test is required, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. For the years ended December 31, 2021 and 2022, the Company performed qualitative assessments and evaluated all abovementioned factors to conclude that it was not more-likely-than-not the fair value was less than the carrying amount of the reporting unit. Therefore, no further quantitative impairment testing on goodwill was performed for the years ended December 31, 2021 and 2022. Due to the changing market conditions and fluctuations in the share price of the Company, the Company performed quantitative assessment for the year ended December 31, 2023. The Company estimated fair value using the income approach. The fair value determined using the income approach was compared with comparable market data and reconciled, as necessary. No impairment losses were recorded for goodwill for the years ended December 31, 2021, 2022 and 2023. (o) Impairment of long-lived assets The Company tests long-lived assets (including property and equipment, prepaid land use rights, operating lease ROU assets and intangible assets subject to amortization) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized in the amount of the excess of the asset group’s carrying value over its fair value. The Company determines the fair value of the data center assets based on the higher of the forecasted discounted cash flows expected to result from the data center assets’ operations and eventual disposition and the price market participants would pay to sub-lease and acquire the remaining data center assets. For the purposes of impairment testing of long-lived assets, the Company has concluded t |
CASH AND RESTRICTED CASH
CASH AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2023 | |
CASH AND RESTRICTED CASH | |
CASH AND RESTRICTED CASH | 3 CASH AND RESTRICTED CASH A reconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statements of cash flows is as follows: As of December 31, 2022 2023 Cash 8,608,131 7,710,711 Restricted cash - current assets 158,075 42,135 Restricted cash - non-current assets 115,860 165,086 Total cash and restricted cash shown in the consolidated statements of cash flows 8,882,066 7,917,932 Restricted cash was used primarily to secure the repayment of bank borrowings, related interests and certain construction projects. |
CONTRACT BALANCES
CONTRACT BALANCES | 12 Months Ended |
Dec. 31, 2023 | |
CONTRACT BALANCES | |
CONTRACT BALANCES | 4 CONTRACT BALANCES Accounts Receivable, Net Accounts receivable, net consisted of the following: As of December 31, 2022 2023 Accounts receivable 2,426,753 2,585,134 Less: allowance for credit losses (20,728) (39,221) Accounts receivable, net 2,406,025 2,545,913 Accounts receivable of RMB1,256,289 and RMB1,740,552 was pledged as security for bank loans (Note 9) as of December 31, 2022 and 2023, respectively. Accounts receivable of RMB145,764 and RMB69,264 was pledged as security for finance lease and other financing obligations (Note 12) as of December 31, 2022 and 2023, respectively. The following table presents the movement of the allowance for credit losses: Years ended December 31, 2021 2022 2023 Balance at the beginning of the year 2,163 12,124 20,728 Allowance made during the year 10,070 7,744 18,294 Foreign exchange impact (109) 860 199 Balance at the end of the year 12,124 20,728 39,221 Deferred Revenue The opening and closing balances of the Company’s deferred revenue are as following: Deferred revenue Beginning balance as of January 1, 2023 185,833 Increase 1,735 Closing balance as of December 31, 2023 187,568 The difference between the opening and closing balances of the Company’s deferred revenue primarily results from the timing difference between the satisfaction of the Company’s performance obligation and the customer’s payment. As of December 31, 2022 and 2023, the deferred revenue expected to be recognized as revenue after one year amounted to RMB29,703 and RMB67,683, respectively, were recorded in other long-term liabilities in the consolidated balance sheet. The amounts of revenue recognized during the years ended December 31, 2021, 2022 and 2023 from the opening deferred revenue balance was RMB104,640, RMB122,378 and RMB161,391, respectively. Remaining performance obligations The Company enters into certain usage-based contracts for colocation and managed services in which revenues are based on the agreed usage-based fees as the actual services are rendered throughout the contract term. The Company elected to apply the practical expedient under ASC606-10-50-14(b) that allows the Company not to disclose the remaining performance obligations for variable considerations, which are charged based on the agreed unit price and number of racks in usage, in connection with these contracts with remaining durations ranging from 1 year to 14 years. As of December 31, 2023, the revenues, excluding any variable considerations, expected to be recognized in future periods related to remaining performance obligations that are unsatisfied were as follows: Revenue expected to be recognized RMB Within 1 year 2,249,946 After 1 year but within 2 years 2,064,811 After 2 years but within 3 years 1,946,213 After 3 years but within 4 years 1,618,690 After 4 years but within 5 years 1,245,391 After 5 years 6,135,856 Total 15,260,907 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 5 PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: As of December 31, Note 2022 2023 At cost: Land 3,302,148 3,440,140 Buildings 13,847,692 16,439,068 Data center equipment 19,603,839 22,958,565 Leasehold improvement 8,444,282 8,706,161 Furniture and office equipment 167,410 123,732 Vehicles 5,619 5,293 45,370,990 51,672,959 Less: Accumulated depreciation (9,269,587) (12,315,886) 36,101,403 39,357,073 Construction in progress 10,827,984 10,958,497 46,929,387 50,315,570 Less: Impairment losses 2(o) (12,759) (2,816,076) Property and equipment, net 46,916,628 47,499,494 The carrying amounts of the Company’s property and equipment acquired under finance leases and other financing arrangement were RMB 9,906,404 and RMB 8,036,081 as of December 31, 2022 and 2023, respectively. Depreciation of property and equipment (including assets acquired under finance leases and other financing arrangement) was RMB 2,399,451 , RMB 2,947,200 and RMB 3,204,351 for the years ended December 31, 2021, 2022 and 2023, respectively, and included in the following captions: Years ended December 31, 2021 2022 2023 Cost of revenue 2,264,620 2,722,169 2,999,008 General and administrative expenses 129,128 218,567 200,479 Research and development expenses 5,703 6,464 4,864 2,399,451 2,947,200 3,204,351 Property and equipment with a net book value of RMB12,721,652 and RMB14,837,993 was pledged as security for bank loans (Note 9) and other financing obligations (Note 12) as of December 31, 2022 and 2023, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 6 INTANGIBLE ASSETS, NET Intangible assets consisted of the following: As of December 31, Note 2022 2023 Customer contracts 8 1,641,900 1,518,587 Software — 72,077 Licenses 15,782 15,782 Others 364 464 1,658,046 1,606,910 Less: accumulated amortization (610,337) (801,612) Less: impairment losses 2(o) — (116,748) Intangible assets, net 1,047,709 688,550 The Company’s customer contracts were acquired in business combinations (Note 8). Amortization of intangible assets was RMB192,486, RMB235,292 and RMB314,780 for the years ended December 31, 2021, 2022 and 2023, respectively. Estimated future amortization expense related to these intangible assets is as follows: Fiscal year ending December 31, 2024 212,902 2025 189,909 2026 169,440 2027 43,686 2028 16,899 Thereafter 55,714 Total 688,550 |
PREPAID LAND USE RIGHTS
PREPAID LAND USE RIGHTS | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID LAND USE RIGHTS | |
PREPAID LAND USE RIGHTS | 7 PREPAID LAND USE RIGHTS Prepaid land use rights, representing the amounts paid and relevant costs incurred for the rights to use land in the PRC and Hong Kong SAR acquired before the adoption of ASC 842, consisted of the following: As of December 31, 2022 2023 Prepaid land use rights 28,246 28,246 Less: Accumulated amortization (5,244) (5,858) Prepaid land use rights, net 23,002 22,388 Amortization of prepaid land use rights was RMB24,961, RMB6,582 and RMB614 for the years ended December 31, 2021, 2022 and 2023, respectively. In the year ended December 31, 2022, the terms of certain land use right acquired in Hong Kong SAR were modified. Accordingly, the Company reassessed the classification of the modified land use right according to ASC 842 and determined that they meet the definition of finance lease. As a result, the related net balance of prepaid land use rights was reclassified to property and equipment due to the modification. Prepaid land use rights with a net book value of RMB17,733 and RMB17,262 were pledged as security for bank loans (Note 9) as of December 31, 2022 and 2023, respectively. |
ACQUISITIONS AND GOODWILL
ACQUISITIONS AND GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
ACQUISITIONS AND GOODWILL | |
ACQUISITIONS AND GOODWILL | 8 ACQUISITIONS AND GOODWILL The movement of goodwill is set out as below: As of December 31, 2022 2023 Balance at the beginning of the year 7,076,505 7,076,505 Addition during the year — — Balance at end of year 7,076,505 7,076,505 Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. The goodwill is not deductible for tax purposes. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. No business combinations were consummated in the years ended December 31, 2022 and 2023. Business Combinations in 2021 Beijing 15 and Beijing 16 Acquisition On April 30, 2021, the Company consummated an acquisition of all equity interests in a target group, which owns one in-service data center (Beijing 15) and one in-development data center (Beijing 16) by converting a vacant building located at the site of Beijing 15 in Beijing, China, from third parties. The provisional cash consideration for the equity interest was RMB3,176,354, subject to the final confirmation on certain conditions. Pursuant to a supplemental agreement entered into between the seller and the Company in October 2021, both parties agreed to revise the terms of payment of the purchase price consideration and its payment conditions, resulting in the reductions of the purchase price consideration of RMB7,007 and RMB205,000 based on achievement of conditions during the years ended December 31, 2021 and 2022, respectively. The reductions were recognized as gain from purchase price adjustment in the consolidated statement of operations for the years ended December 31, 2021 and 2022, respectively. The amounts of net revenue and net loss of the target group included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2021 were RMB354,281 and RMB23,663, respectively. Beijing 20, Beijing 21, Beijing 22 and Beijing 23 Acquisition On December 17, 2021, the Company consummated an acquisition of 90% equity interests in a target group, which owns four data center projects (Beijing 20, Beijing 21, Beijing 22 and Beijing 23) in Beijing, China, from third parties for an aggregate cash consideration of RMB1,303,714. The amounts of net revenue and net loss of the target group included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2021 were immaterial. Other Business Combinations In the year ended December 31, 2021, the Company also consummated other acquisitions of data center projects, including Beijing 17, Beijing 18, Beijing 19, Shenzhen 9 and Shenzhen 10, for an aggregate provisional cash consideration of RMB768,107. The allocations of purchase price as of the date of acquisitions for the year ended December 31, 2021 are summarized as follows. 2021 Note (i)(ii) Fair value of consideration 5,230,362 Effective settlement of pre-existing relationships upon consolidation 20,000 Other net assets acquired (256,650) Identifiable intangible assets (689,800) Deferred tax liabilities 159,592 Total identifiable net assets (786,858) Goodwill 4,463,504 Note (i): Other net assets acquired primarily included property and equipment of RMB2,974,715, accounts receivable of RMB224,307, accounts payable of RMB412,380, short-term borrowings of RMB461,494, long-term borrowings of RMB840,000 and finance lease and other financing obligations of RMB1,463,851. Note (ii): Identifiable intangible assets acquired consisted of customer contracts of RMB689,800 with estimated useful lives from 5.7 to 7 years. The Company settled the considerations, including contingent considerations, for the business combinations of RMB4,221,171, RMB1,460,814 and RMB19,888 in the years ended December 31, 2021, 2022 and 2023, of which interest portions were included in operating activities’ cash flows and principal portions were included in investing or financing activities’ cash flows depending on settlements within or after three months subsequent to acquisition dates, respectively. As of December 31, 2022 and 2023, the remaining consideration payable was RMB151,620 and RMB125,457, which was recorded in other payables, respectively. The amounts of net revenue and net loss of the target companies included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2021 were immaterial. Supplemental pro forma financial information as if the acquisitions had occurred as of the beginning of the comparable prior annual reporting period has not been provided as each of the acquisitions, individually and in aggregate, were not material to the Company’s results of operations during the respective year of the acquisitions. Asset Acquisitions In 2021 and 2022, the Company consummated several acquisitions of certain target entities. These target entities did not meet the definition of a business as of the acquisition date in accordance with ASC 805 Business Combinations |
LOANS AND BORROWINGS
LOANS AND BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
LOANS AND BORROWINGS | |
LOANS AND BORROWINGS | 9 LOANS AND BORROWINGS The Company’s borrowings consisted of the following: As of December 31, 2022 2023 Short-term borrowings 1,652,196 674,010 Current portion of long-term borrowings 1,971,771 2,159,943 Sub-total 3,623,967 2,833,953 Long-term borrowings, excluding current portion 23,518,058 26,706,256 Total loans and borrowings 27,142,025 29,540,209 Short-term borrowings The Company’s short-term borrowings consisted of the following: As of December 31, 2022 2023 Unsecured short-term loans and borrowings 1,388,192 409,407 Secured short-term loans and borrowings 264,004 264,603 1,652,196 674,010 Short-term borrowings were secured by the following assets: As of December 31, 2022 2023 Property and equipment, net 245,543 213,951 In addition to the above assets pledged for secured borrowings, some of the borrowings were guaranteed by the equity interests of the subsidiaries of GDS Holdings Limited. The weighted average interest rates of short-term borrowings outstanding as of December 31, 2022 and 2023 were 7.94% and 4.66% per annum, respectively, taking into the consideration of debt issuance costs incurred relating to the facilities. Long-term borrowings The Company’s long-term borrowings consisted of the following: As of December 31, 2022 2023 Unsecured long-term loans and borrowings — 30,085 Secured long-term loans and borrowings 25,489,829 28,836,114 25,489,829 28,866,199 Long-term borrowings were secured by the following assets: As of December 31, 2022 2023 Accounts receivable 1,256,289 1,740,552 Other current assets 97,049 97,307 Property and equipment, net 11,103,541 13,201,479 Prepaid land use rights, net 17,733 17,262 Operating lease ROU assets 3,607,506 3,681,166 Other non-current assets 23,912 24,272 16,106,030 18,762,038 In addition to the above assets pledged for secured borrowings, some of the borrowings were guaranteed by the equity interests of the subsidiaries of GDS Holdings Limited. The weighted average interest rates of long-term borrowings as of December 31, 2022 and 2023 were 5.44% and 5.17% per annum, respectively, taking into the consideration of debt issuance costs incurred relating to the facilities. The outstanding long-term borrowings mature serially from 2024 to 2038. The aggregate maturities of the above long-term borrowings for each for the five years and thereafter subsequent to December 31, 2023 are as follows: Long-term borrowings Twelve months ending December 31, 2024 2,159,943 2025 2,625,548 2026 3,886,047 2027 5,275,278 2028 4,446,532 Thereafter 10,472,851 28,866,199 The Company entered into secured loan agreements with various financial institutions for project development and working capital purpose with terms ranging from 1 As of December 31, 2023, the Company had total working capital and project financing credit facilities of RMB38,069,588 from various financial institutions, of which the unused amount was RMB8,410,702. As of December 31, 2023, the Company had drawn down RMB29,658,886 from such facilities, of which RMB619,370 (net of debt issuance costs of RMB10,032) was recorded in short-term loans and borrowings and RMB28,836,114 (net of debt issuance costs of RMB193,370) was recorded in long-term loans and borrowings, respectively. In addition, the Company also had other short-term loans and borrowings from non-financial institutions which were assumed through certain acquisitions of subsidiaries. Drawdowns from the credit facility from financial institutions are subject to the approval of the banks and are subject to the terms and conditions of each agreement. More specifically, the terms of these secured loan facility agreements generally include one or more of the following conditions. If any of the below conditions were to be triggered, the Company could be obligated to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule. Specifically, the secured loan facilities can be divided into onshore project loan facilities and offshore project loan facilities (including Hong Kong SAR and Malaysia). Below are the terms and conditions for onshore project loan facilities: (i) STT GDC Pte. Ltd. is not or ceases to, directly or indirectly, be the beneficial owner of at least 25% of the issued share capital of GDS Holdings; (ii) GDS Holdings and GDS Investment Company are not or cease to be, directly or indirectly, the legal and beneficial owner of 100% of the equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, GDS Investment Company (in the case of GDS Holdings), GDS Beijing, Global Data Solutions Co., Ltd. (“GDS Suzhou”), a subsidiary company of GDS Beijing and the relevant borrowing subsidiaries; (iii) Management HoldCo ceases to, directly or indirectly, own at least 100% of the equity interests of and have the power to control GDS Beijing or GDS Suzhou; (iv) GDS Beijing, GDS Suzhou and the relevant borrowing subsidiaries cease to, directly or indirectly, be the legal and beneficial owner of 100% of the equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, their consolidated subsidiaries; (v) GDS Holdings is not or cease to be, directly or indirectly, the legal and beneficial owner of all equity interests held by it in the relevant borrowing subsidiaries, or have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control the relevant borrowing subsidiaries; (vi) there are changes in the shareholding structure of a principal operating subsidiary of GDS Holdings, as defined in the relevant loan facility agreement; (vii) there are changes in the controlling shareholders or the beneficial owners of the relevant borrowing subsidiaries which could have a material adverse effect on their performance of the loan facility agreements; and (viii) the IDC license of GDS Beijing, the borrowing subsidiaries, other affiliated entities, or the authorization by GDS Beijing to one such subsidiary to operate the data center business and provide IDC services under the auspices of the IDC license held by GDS Beijing, is cancelled or fails to be renewed on or before the expiry date. Below are the terms and conditions for offshore project loan facilities: (i) GDS Holdings (a) is not or ceases to be, directly or indirectly, the single largest shareholder of, (b) is not or ceases to be, directly or indirectly, the beneficial owner of at least 40% of the issued share capital of, or (c) does not or ceases to have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, at least 50.1% of the votes that may be cast at a meeting of the board of directors (or similar governing body) of the relevant borrowing subsidiaries; (ii) DigitalLand Holdings Limited is not or ceases to be, directly or indirectly, the beneficial owner of 100% of the issued share capital of the relevant borrowing subsidiaries; and (iii) There are changes in the shareholding structure of a principal operating subsidiary of GDS Holdings, as defined in the relevant loan facility agreement. There are certain other events in the loan facility agreements the occurrence of which could obligate GDS Holdings to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule, including, among others, if the borrowing subsidiary fails to use the loan in accordance with the use of proceeds as provided in the loan facility agreement, the borrowing subsidiary violates or fails to perform any of its commitments under the loan facility agreement, or if GDS Holdings fails to maintain its shares listed on at least one of the following stock exchanges before the maturity date under the relevant loan facility agreement : (i) Nasdaq; or (ii) The Singapore Exchange Securities Trading Limited; or (iii) The Hong Kong Stock Exchange; or (iv) any other stock exchange acceptable to the lender. In addition, the terms of these loan agreements include financial covenants that limit certain financial ratios, such as the interest coverage ratio, debt service coverage ratio, security margin ratio, gross leverage ratio and tangible net worth, during the relevant period, as defined in the agreements. The terms of these loan agreements also include cross default provisions which could be triggered if the Company (i) fails to repay any financial indebtedness in an aggregate amount equivalent to or exceeding RMB50,000, or in some cases, MYR35 million when due or within any originally applicable grace period; (ii) fails to repay any financial indebtedness or perform any of its obligations under any agreement which could have a material adverse effect on its performance of the loan facility agreements; (iii) fails to repay any financial indebtedness raised with any financial institution; or (iv) fails to perform any loan facility agreement with any financial institution which could result in immediate or accelerated repayment of the financial indebtedness or downgrading of the borrowing subsidiary by any credit rating agency administered by the People’s Bank of China (“PBOC”) in accordance with the regulations promulgated by PBOC governing loan market rating standards. As of December 31, 2023, the Company was in compliance with all of the abovementioned covenants. |
CONVERTIBLE BONDS PAYABLE
CONVERTIBLE BONDS PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
CONVERTIBLE BONDS PAYABLE | |
CONVERTIBLE BONDS PAYABLE | 10 CONVERTIBLE BONDS PAYABLE The convertible notes payable consisted of following: As of December 31, 2022 2023 Convertible Notes due 2025 2,083,829 566 Convertible Notes due 2029 4,294,985 4,373,386 Convertible Notes due 2030 — 4,060,814 Total 6,378,814 8,434,766 Including: - Current 2,083,829 — - Non-current 4,294,985 8,434,766 The interest expenses related to the convertible notes are as follows: Years ended December 31, 2021 2022 2023 Contractual interest 38,720 48,996 202,776 Amortization of issuance cost 11,617 16,813 20,015 Total interest expenses 50,337 65,809 222,791 Convertible Notes due June 1, 2025 issued by the Company (“Convertible Bonds due 2025”) On June 5, 2018, the Company completed its issuance of Convertible Bonds due 2025 in an aggregate principal amount of US$300 million. The related issuance costs of US$8,948 thousand were deducted from principal of the Convertible Bonds due 2025 and amortized over the period from issuance to the first put date (i.e. June 1, 2023) using the effective interest rate method. The key terms of the Convertible Bonds due 2025 are summarized as follows: Maturity Date ● June 1, 2025 Interest ● 2.0% per annum, accruing from June 5, 2018 (computed on the basis of a 360-day year composed of twelve 30-day months), payable semiannually in arrears on June 1 and December 1 of each year Repurchase of Notes ● Holders will have the right to require the Company to repurchase for cash all of their notes, or any portion of the principal thereof that is equal to US $1 thousand or an integral multiple of US $1 thousand, on June 1, 2023 or if a fundamental change occurs at any time. Tax redemption ● The Company may redeem, at its option, all but not part of the Convertible Bonds due 2025 if it becomes obligated to pay to the holder of any note ‘‘additional amounts’’ (which are more than a de minimis amount) as a result of any change in tax law at the price equal to 100% of the principal amount together with accrued and unpaid interest. Upon receiving notice of redemption, each holder will have the right to elect to: convert its notes; or not have its notes redeemed and GDS Holdings will not pay any additional amounts as a result of such change in tax law. Conversion rights ● Holders may convert their notes at their option at any time prior to the close of business on the third scheduled trading day immediately preceding the maturity date. ● The conversion rate is initially 19.3865 American Depositary Shares (“ADSs”) of the Company per US$1 thousand principal amount of notes (equivalent to an initial conversion price of approximately US $51.58 per ADS), and subject to changes under certain anti-dilution conditions. The Company determined that the embedded conversion option of the Convertible Bonds due 2025 was not required to be accounted for as an embedded derivative pursuant to ASC 815 Derivatives and Hedging In the year ended December 31, 2020, Convertible Bonds due 2025 with principal amount of US$10 thousand were converted into ordinary shares as the holders exercised their conversion option. The Company recorded additional paid-in capital of RMB65 upon conversion. As of December 31, 2022 and 2023, the outstanding principal amount of Convertible Bonds due 2025 was US$299,990 thousand and US$80 thousand, respectively. As of December 31, 2022, the balance of Convertible Bonds due 2025 was presented as current liability due to holder’s repurchase option exercisable on June 1, 2023. On June 1, 2023, certain holders exercised their right to request the Company to redeem Convertible Bonds due 2025 with principal amount of US$299,910 thousand. The remaining Convertible Bonds due 2025 with principal amount of US$80 thousand (equivalent to RMB566) were presented as a non-current liability as of December 31, 2023 as the holders’ option had expired. Convertible Notes due March 8, 2029 issued by the Company (“Convertible Bonds due 2029”) On March 8, 2022, the Company completed its issuance of Convertible Bonds due 2029 in an aggregate principal amount of US$620 million. The related issuance costs of US$3,950 thousand were deducted from principal of the Convertible Bonds due 2029 and amortized over the period from issuance to the first put date (i.e. March 8, 2027) using the effective interest rate method. The key terms of the Convertible Bonds due 2029 are summarized as follows: Maturity Date ● March 8, 2029 Interest ● 0.25% per annum, computed on the basis of a 360-day year composed of twelve 30-day months, payable semiannually in arrears on March 8 and September 8 of each year Repurchase of Notes ● Holders will have the right to require the Company to repurchase for cash all of their notes, or any portion of the principal thereof that is in denominations of US $200 thousand and integral multiples of US $1 thousand in excess thereof, on March 8, 2027 or if a fundamental change occurs at any time. Tax redemption ● The Company may redeem, at its option, all but not part of the Convertible Bonds due 2029 if it becomes obligated to pay to the holder of any note ‘‘additional amounts’’ (which are more than a de minimis amount) as a result of any change in tax law at the price equal to 100% of the principal amount together with accrued and unpaid interest. Upon receiving notice of redemption, each holder will have the right to elect to: convert its notes; or not have its notes redeemed and GDS Holdings will not pay any additional amounts as a result of such change in tax law. Conversion rights ● Holders may convert their notes at their option at any time prior to the close of business on the third scheduled trading day (or the fifth scheduled trading day, if the converting Holder elects to receive Ordinary Shares in lieu of any ADSs) immediately preceding the maturity date. ● The conversion rate is initially 20 ADSs of the Company per US$1 thousand principal amount of notes (equivalent to an initial conversion price of US $50 per ADS), and subject to changes under certain anti-dilution conditions. Forced conversion ● If (1) the Daily VWAP per ADS (or, if the ADSs are no longer traded on The NASDAQ Global Market, of the Ordinary Shares) exceeds 150% of the Conversion Price (the “Agreed Threshold”) on any twenty trading days (whether or not consecutive) during any thirty consecutive trading day period beginning on or after the 5 th anniversary of March 8, 2022 (such thirty 30 consecutive trading day period being the “Forced Conversion Qualification Period”), (2) the Daily VWAP per ADS (or, if the ADSs are no longer traded on The NASDAQ Global Market, of the Ordinary Shares) for each of the last five consecutive trading days during the Forced Conversion Qualification Period is not lower than the Agreed Threshold and (3) the aggregate average daily dollar trading volume (as reported on Bloomberg) of (x) the ADSs on The NASDAQ Global Market and (y) the Ordinary Shares on the Hong Kong Stock Exchange during such Forced Conversion Qualification Period is at least US $70.0 million, then, the Company shall have the right (but not the obligation) to force the conversion of all (and not some only) of the outstanding principal amount held by such Holders into the Company’s shares at the then applicable Conversion Rate. The Company determined that the embedded conversion option of the Convertible Bonds due 2029 was not required to be accounted for as an embedded derivative pursuant to ASC 815, Derivatives and Hedging Convertible Notes due January 31, 2030 issued by the Company (“Convertible Bonds due 2030”) On January 20, 2023, the Company completed its issuance of Convertible Bonds due 2030 in an aggregate principal amount of US$580 million. The related issuance costs of US$7,934 thousand were deducted from principal of the Convertible Bonds due 2030 and amortized over the period from issuance to the first put date (i.e. January 31, 2028) using the effective interest rate method. The key terms of the Convertible Bonds due 2030 are summarized as follows: Maturity Date ● January 31, 2030 Interest ● 4.50% per annum, computed on the basis of a 360-day year composed of twelve 30-day months, payable semiannually in arrears on January 31 and July 31 of each year Repurchase of Notes ● Holders will have the right to require the Company to repurchase for cash all of their notes, or any portion of the principal thereof that is in denominations of US $200 thousand and integral multiples of US $1 thousand in excess thereof, on January 31, 2028 or if a fundamental change occurs at any time. Tax redemption ● The Company may redeem, at its option, all but not part of the Convertible Bonds due 2030 if it becomes obligated to pay to the holder of any note ‘‘additional amounts’’ (which are more than a de minimis amount) as a result of any change in tax law at the price equal to 100% of the principal amount together with accrued and unpaid interest. Upon receiving notice of redemption, each holder will have the right to elect to: convert its notes; or not have its notes redeemed and GDS Holdings will not pay any additional amounts as a result of such change in tax law. Conversion rights ● Holders may convert their notes at their option at any time prior to the close of business on the third scheduled trading day (or the fifth scheduled trading day, if the converting Holder elects to receive Ordinary Shares in lieu of any ADSs) immediately preceding the maturity date. ● The conversion rate is initially 40.8163 ADSs of the Company per US$1 thousand principal amount of notes (equivalent to an initial conversion price of US $24.50 per ADS), and subject to changes under certain anti-dilution conditions. Forced conversion ● If (1) the Daily VWAP per ADS (or, if the ADSs are no longer traded on The NASDAQ Global Market, of the Ordinary Shares) exceeds 200% of the Conversion Price (the “Agreed Threshold”) on any twenty trading days (whether or not consecutive) during any thirty consecutive trading day period beginning on or after the 3 rd anniversary of January 11, 2023 (such thirty 30 consecutive trading day period being the “Forced Conversion Qualification Period”), (2) the Daily VWAP per ADS (or, if the ADSs are no longer traded on The NASDAQ Global Market, of the Ordinary Shares) for each of the last five consecutive trading days during the Forced Conversion Qualification Period is not lower than the Agreed Threshold and (3) the aggregate average daily dollar trading volume (as reported on Bloomberg) of (x) the ADSs on The NASDAQ Global Market and (y) the Ordinary Shares on the Hong Kong Stock Exchange during such Forced Conversion Qualification Period is at least US $30.0 million, then, the Company shall have the right (but not the obligation) to force the conversion of any outstanding notes into the Company’s shares at the then applicable Conversion Rate. The Company determined that the embedded conversion option of the Convertible Bonds due 2030 was not required to be accounted for as an embedded derivative pursuant to ASC 815, Derivatives and Hedging The effective interest rate of the Convertible Bonds due 2025, after considering the related issuance cost, was 2.65% and 2.03% as of December 31, 2022 and 2023, respectively. The effective interest rate of the Convertible Bonds due 2029, after considering the related issuance cost, was 0.38% as of December 31 , 2022 and 2023. The effective interest rate of the Convertible Bonds due 2030, after considering the related issuance cost, was 4.87% as of December 31, 2023. As of December 31, 2022 and 2023, accrued interests of RMB6,870 and RMB80,467, respectively, were recorded in accrued expenses. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES. | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES | 11 ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES Accounts payable consisted of the following: As of December 31, 2022 2023 Accounts payable for operating expenses 518,788 538,892 Accounts payable for purchase of property and equipment 2,574,096 2,886,045 3,092,884 3,424,937 Accrued expenses and other payables consisted of the following: As of December 31, 2022 2023 Consideration payables for acquisitions 183,220 263,026 Accrued payroll and welfare benefits 200,394 207,015 Accrued interest expenses 70,251 135,105 Income tax payable 202,589 166,923 Other tax payables 54,981 43,365 Accrued debt issuance costs and other financing costs 52,254 32,430 Amount due to related parties 16,995 17,104 Others 236,277 333,483 1,016,961 1,198,451 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | 12 LEASES The Company enters into lease arrangements primarily for data center spaces, office spaces and equipment. During the year ended December 31, 2022, the Company entered into lease agreements with the landlords to lease the building and land, including those acquired through acquisition of subsidiaries, for certain data centers. The Company assessed the lease classification of the building and land components separately at the commencement date. During the year ended December 31, 2022, the Company recorded additional finance lease liabilities of RMB460,810 and operating lease liabilities of RMB149,879 through new lease agreements and acquisition of subsidiaries. During the year ended December 31, 2023 A Summary of supplemental information related to operating leases as of December 31, 2022 and 2023 is as follows: Note As of December 31, 2022 2023 Operating lease right-of-use assets, gross 5,633,946 5,516,880 Less: Impairment losses 2(o) — (80,592) Operating lease right-of-use assets, net 5,633,946 5,436,288 Operating lease liabilities, current 175,749 180,403 Operating lease liabilities, non-current 1,617,986 1,395,981 The components of lease cost are as follows: Years ended December 31, 2021 2022 2023 Finance lease cost: - Amortization of right-of-use assets 546,437 619,675 587,813 - Interest on lease liabilities 592,835 632,183 613,909 Operating lease cost 313,752 402,514 406,620 Short-term lease cost 23,715 44,873 54,590 Variable lease cost (Note) (786) (47,729) (4,835) Total lease cost 1,475,953 1,651,516 1,658,097 Note: During the years ended December 31, 2022, the Company was granted lease concessions of Supplemental cash flow information related to leases is as follows: Years ended December 31, 2021 2022 2023 Cash paid for amounts included in measurement of lease liabilities (Note): - Operating cash flows from finance leases (591,189) (532,323) (501,090) - Operating cash flows from operating leases (236,589) (244,643) (283,085) - Financing cash flows from finance leases (265,481) (1,138,542) (986,888) Non-cash information on lease liabilities arising from obtaining ROU assets: - Finance leases 25,731 264,958 16,772 - Operating leases 368,069 151,709 28,307 Non-cash information on lease liabilities and ROU assets derecognized for termination of leases: - Finance leases — 524,180 237,330 - Operating leases — 286,774 48,610 Gain on early termination of leases: - Finance leases — 33,453 39,350 - Operating leases — 10,445 5,412 Note: The above table does not include cash paid for purchase of land use rights and initial direct costs of leases of RMB875,162, RMB760,610 and RMB15,900 in the years ended December 31, 2021, 2022 and 2023, respectively, which are included in “Payments for purchase of property and equipment and land use rights” in the consolidated statements of cash flows. The financing cash flows from finance leases include the payment of principal due to early termination of certain financing arrangements for data center equipment. Weighted average remaining lease term and weighted average discount rate for leases, excluding prepaid land use rights, are as follows: As of December 31, 2022 2023 Weighted average remaining lease term: - Finance leases 13.8 12.7 - Operating leases 12.8 12.0 Weighted average discount rate: - Finance leases 6.68 % 6.56 % - Operating leases 5.89 % 6.16 % Weighted average discount rate for other financing obligations is 8.18% and 7.58% as of December 31, 2022 and 2023, respectively. Maturities of lease and other financing obligations were as follows: As of December 31, 2022 As of December 31, 2023 Total of Total of finance lease finance lease Other and other Operating Other and other Operating Finance lease financing financing lease Finance lease financing financing lease obligations obligations obligations obligations Total obligations obligations obligations obligations Total Within 1 year 670,992 330,773 1,001,765 272,796 1,274,561 643,795 354,878 998,673 268,687 1,267,360 After 1 year but within 2 years 666,487 1,373,214 2,039,701 250,716 2,290,417 671,956 1,336,491 2,008,447 204,305 2,212,752 After 2 years but within 3 years 708,642 450,691 1,159,333 206,489 1,365,822 694,746 336,372 1,031,118 162,294 1,193,412 After 3 years but within 4 years 729,283 428,175 1,157,458 169,014 1,326,472 717,691 324,909 1,042,600 145,663 1,188,263 After 4 years but within 5 years 753,410 407,211 1,160,621 151,160 1,311,781 668,301 116,544 784,845 149,581 934,426 After 5 years 6,768,112 209,784 6,977,896 1,582,879 8,560,775 5,718,509 153,720 5,872,229 1,351,565 7,223,794 Total 10,296,926 3,199,848 13,496,774 2,633,054 16,129,828 9,114,998 2,622,914 11,737,912 2,282,095 14,020,007 Less: total future interest (3,694,302) (421,227) (4,115,529) (839,319) (4,954,848) (3,070,979) (224,901) (3,295,880) (705,711) (4,001,591) Less: estimated construction costs — (11,124) (11,124) — (11,124) — — — — — Present value of lease and other financing obligations 6,602,624 2,767,497 9,370,121 1,793,735 11,163,856 6,044,019 2,398,013 8,442,032 1,576,384 10,018,416 Including: - Current portion 453,855 175,749 629,604 547,847 180,403 728,250 - Non-current portion 8,916,266 1,617,986 10,534,252 7,894,185 1,395,981 9,290,166 As of December 31, 2023, the Company has additional leases, primarily for data center buildings, that have not yet commenced with total future lease payments of RMB7,847,687. These leases are expected to commence after December 31, 2023 with lease terms of 20 Financing transaction of Hong Kong 4 (“HK4”) During the year ended December 31, 2022, the Company entered into a financing transaction with consideration of RMB886,312 with a third party for transferring the assets of HK4, which mainly includes the land. The transaction is accounted for as a financing transaction since the control of the assets are not considered transferred. Accordingly, the Company did not derecognize the transferred assets and the consideration received was recognized as other financing obligations. Lease and other financing obligations were secured by the following assets: As of December 31, 2022 2023 Accounts receivable 145,764 69,264 Property and equipment, net 1,372,568 1,422,563 Operating lease ROU assets — 19,113 1,518,332 1,510,940 |
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
OTHER LONG-TERM LIABILITIES | |
OTHER LONG-TERM LIABILITIES | 13 OTHER LONG-TERM LIABILITIES Other long-term liabilities consisted of the following: As of December 31, 2022 2023 Consideration payable for acquisitions 7,644 — Asset retirement obligations 102,591 101,675 Deferred revenue – non-current (Note 4) 29,703 67,683 Deferred government grants 30,741 78,494 Others 97,574 55,887 Total 268,253 303,739 |
REDEEMABLE PREFERRED SHARES
REDEEMABLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2023 | |
REDEEMABLE PREFERRED SHARES | |
REDEEMABLE PREFERRED SHARES | 14 REDEEMABLE PREFERRED SHARES On March 27, 2019 (the “Issue Date”), GDS Holdings completed its issuance of 150,000 Convertible Preferred Shares (“redeemable preferred shares”) to an investor at the subscription price of US$1 thousand per share with total consideration of US$150 million. The movement of redeemable preferred shares is set out as below: Redeemable preferred shares Balance at January 1, 2021 980,910 Accrual of redeemable preferred shares dividends 49,073 Settlement of redeemable preferred shares dividends (49,221) Foreign exchange impact (22,282) Balance at December 31, 2021 and January 1, 2022 958,480 Accrual of redeemable preferred shares dividends 51,212 Settlement of redeemable preferred shares dividends (51,578) Foreign exchange impact 88,898 Balance at December 31, 2022 and January 1, 2023 1,047,012 Accrual of redeemable preferred shares dividends 53,625 Settlement of redeemable preferred shares dividends (53,923) Foreign exchange impact 18,052 Balance at December 31, 2023 1,064,766 Key terms of the convertible preferred shares Dividends The holders of the preferred shares are entitled to receive, in priority to the holders of the ordinary shares, cumulative preferred share dividends which are payable quarterly in arrears on March 15, June 15, September 15 and December 15, commencing on June 15, 2019 (each such payment date being a “Regular Dividend Payment Date”). The dividends are 5.0% per annum of the respective preferred shares Stated Value (i.e. the subscription price of preferred shares plus any accrued dividends that are not paid on Regular Dividend Payment Date) (and shall be adjusted to an amount equal to the ordinary share dividend rate if higher). The dividend rate will increase to 7.0% per annum and further increase by 50 Conversion The holders of preferred shares have the right to convert any or all of their holdings of preferred shares Stated Value into Class A Ordinary Shares based on the conversion rate then in effect. In addition, if, at any time beginning on March 15, 2022, (i) the volume-weighted average price (“VWAP”) per ADS of the GDS Holdings equals or exceeds US$53.40 (adjusted as according to anti-dilution provisions) for at least 20 trading days in any period of 30 consecutive trading days and (ii) the average daily trading volume of the ADS for such 20 qualifying trading days is at least US$10 million in the aggregate, at the Company’s election, all of the preferred shares then outstanding shall be converted into a number of Class A Ordinary Shares based on the conversion rate then in effect. The initial conversion rate is corresponding to a conversion price of US$35.60 per ADS, and will be subject to adjustments for any split, subdivision, combination, consolidation, recapitalization or similar event. Liquidation preference Upon a liquidation, after satisfaction of all liabilities and obligations to creditors of the Company and before any distribution or payment shall be made to holders of ordinary shares, each holder of preferred shares shall be entitled to receive an amount per preferred share equal to the greater of: (1) the Stated Value of preferred shares plus any dividends accumulated but unpaid thereon after the immediately preceding Regular Dividend Payment Date to but excluding the date of liquidation; (2) the payment such holders would have received had such holders, immediately prior to such liquidation converted their preferred shares into Class A Ordinary Shares. Optional Redemption by the Company The preferred shares may be redeemed, in whole or in part, at any time after March 15, 2027, at the option of the Company at a redemption price per share equal to the sum of the Stated Value per preferred share to be redeemed plus an amount per share equal to accrued but unpaid dividends on such preferred shares after the immediately preceding Regular Dividend Payment Date to but excluding the date of redemption. Repurchase at the Option of the Holder Upon a Fundamental Change Upon the occurrence of a Fundamental Change, as defined in the share subscription agreement, each holder of preferred shares shall have the right to require the Company to repurchase all or any portion of such holder’s preferred shares at a purchase price per preferred share equal to the greater of (i) the sum of (x) 100% multiplied by the Stated Value per preferred share plus (y) an amount equal to accrued but unpaid dividends on such preferred share after the immediately preceding Regular Dividend Payment Date to but excluding the date of repurchase, plus (z) solely in the event that such Fundamental Change occurs prior to the third anniversary of the Issue Date, the present value of all undeclared dividends from the date of redemption to, and including, the third anniversary of the Issue Date, in each case, discounted to the date of redemption on the basis of actual days elapsed (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, which is the yield to maturity at the time of computation of United States Treasury securities with a constant maturity, plus 50 basis points, and (ii) the amount of cash and/or other assets such holder would have received had such holder, immediately prior to the occurrence of such Fundamental Change, converted such preferred shares into Class A Ordinary Shares. Financing for Redemption of Convertible Preferred Shares In the event that any preferred shares remain outstanding from and after the tenth anniversary of the Issue Date, the holders of preferred shares constituting at least 90% of the preferred shares issued as of the Issue Date (as adjusted for any split, subdivision, combination, consolidation, recapitalization or similar event with respect to the preferred shares) shall have the right to require the Company to sell all or a portion of its business and/or to conduct other fundraising or refinancing activities, and use reasonable best efforts to consummate such sale or to issue equity or debt securities (or obtain other debt financing) in an amount sufficient to redeem in full in cash, and use best endeavors to as soon as reasonably practicable redeem in full in cash, all of the preferred shares then outstanding at a redemption price per share equal to the sum of the Stated Value per preferred share to be redeemed plus an amount per share equal to accrued but unpaid dividends on such preferred shares after the immediately preceding Regular Dividend Payment Date to but excluding the date of redemption. Voting rights The holders of the preferred shares have voting rights equivalent to the ordinary shareholders on an “if converted” basis. In addition, the Company shall not take certain actions without first obtaining the written consent or affirmative vote at a meeting called for that purpose by holders of at least 75% of the then outstanding preferred shares. The Company has classified these preferred shares as mezzanine equity in the consolidated balance sheets since they are contingently redeemable upon a Fundamental Change or include liquidation preference provisions that are not solely within the Company’s control. The Company evaluated the embedded conversion, call and put options in the preferred shares to determine if they require bifurcation and are accounted for as derivatives, and concluded that there were no embedded derivatives to be bifurcated from the preferred share pursuant to ASC 815. The Company incurred issuance cost of US$2,646 thousand for the issuance of such preferred shares, which was treated as an adjustment to the initial value of the redeemable preferred shares. The Company has elected to measure the redeemable preferred shares by recognizing changes in the redemption value immediately as they occur and adjust the carrying amount to equal the redemption value at the end of each reporting period. As a result, such issuance cost is immediately recognized as a change in redemption value and charged against retained earnings or, in the absence of retained earnings, by charges against additional paid-in capital. |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2023 | |
REDEEMABLE NON-CONTROLLING INTERESTS | |
REDEEMABLE NON-CONTROLLING INTERESTS | 15 REDEEMABLE NON-CONTROLLING INTERESTS In July 2020, the Company formed a joint venture (“JV”) to undertake a new data center project in Beijing (“Beijing 13” and “Beijing 14”, previously referred to as “Beijing 13” which was then split to two data center projects according to the design) with a private equity fund (“CPE Fund”) controlled by CITIC Private Equity Funds Management Co., Limited. The Company owns a 58% controlling interest in the JV, while CPE Fund owns 42%. On completion of the project and satisfaction of certain other conditions, the Company is required to acquire CPE Fund’s 42% equity interest in the JV, the consideration of which will be calculated based on the power capacity, sales contract with customers and the assets and liabilities of the JV at that time. The non-controlling interest of JV is redeemable for cash when specified conditions are met, which are not events that are certain to occur. However, the occurrence of these conditions and therefore the Company’s redemption obligations are not solely within the control of the Company. Pursuant to ASC 480-10-S99 and the related guidance, the redeemable non-controlling interest in the JV is accounted for as temporary equity and measured at redemption value. The initial carrying amount of the redeemable non-controlling interests was the capital injection received from CPE Fund in July 2020. The change of the carrying amount of the redeemable non-controlling interests, other than the capital injection received and the net income or loss attributable to redeemable non-controlling interests, is recognized as accretion to redemption value of redeemable non-controlling interests in the consolidated statements of operations and charged against retained earnings or, in the absence of retained earnings, against additional paid-in capital. In January 2022, the Company and CPE Fund re-negotiated the early exit terms and entered into a supplement agreement, pursuant to which the Company would purchase and CPE Fund would sell 42% equity interests it held in the JV for a total consideration of RMB593,801. As a result, the balance of redeemable non-controlling interest was immediately accreted to the redemption value of RMB593,801 and reclassified to accrued expenses and other payables. The consideration payable was fully settled in November 2022. The change in the carrying amount of redeemable non-controlling interests is as follows: Year ended December 31, 2021 2022 Balance at beginning of the year 120,820 404,673 Capital injection from CPE Fund 208,801 — Net loss attributable to redeemable non-controlling interests (2,592) (655) Accretion to redemption value of redeemable non-controlling interests 77,644 10,801 Adjustment to the redemption value of redeemable non-controlling interests — 178,982 Reclassification to current liability — (593,801) Balance at end of the year 404,673 — |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 16 FAIR VALUE MEASUREMENT The Company did not have financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2023. Following is a description of the valuation techniques that the Company uses to measure fair value of other financial assets and financial liabilities: ● Short-term financial instruments (cash, restricted cash, accounts receivable and payable, short-term borrowings, and accrued expenses and other payables) — cost approximates fair value because of the short maturity period. ● Long-term borrowings — fair value is based on the amount of future cash flows associated with each debt instrument discounted at the Company’s current borrowing rate for similar debt instruments of comparable terms. The carrying values of the long-term borrowings approximate their fair values as all the long-term debt carry various interest rates which approximate rates currently offered by the Company’s bankers for similar debt instruments of comparable maturities. ● Convertible Bonds payable—the estimated fair value was RMB 5,281,029 and RMB 6,722,049 as of December 31, 2022 and 2023, respectively. The fair value of Convertible Bonds due 2025 was measured based on the price in the open market and the fair values of Convertible Bonds due 2029 and Convertible Bonds due 2030 were measured using Binomial Model. Non-recurring fair value measurements Certain long-lived assets of the Company may be measured at fair value based on unadjusted quoted price in active market (Level 1 Inputs) or unobservable inputs (Level 3) on a non-recurring basis, if determined to be impaired. As of each relevant measurement date, the fair value of asset groups, if determined to be impaired, were measured under income approach and determined based on the higher of the forecasted discounted cash flows expected to result from the data center assets’ operations and eventual disposition and the price market participant would pay to sub-lease and acquire the remaining data center assets, which reflects the highest and best use of the asset groups. Significant inputs used in the income approach primarily included utilization rates used to estimate the forecasted undiscounted cashflows expected to result from the data center assets’ operation and discount rate. As of December 31, 2022, one of the Company’s data center level asset groups was measured at fair value of RMB60,000 based on unadjusted quoted price in active market (Level 1 Inputs) and an impairment loss of long-lived assets of RMB12,759 was recognized for the amount of its carrying amount exceeding the fair value. As of December 31, 2023, certain of the Company’s data center level asset groups were measured at fair value of RMB1,614,347, which were determined based on income approach, and an impairment loss of long-lived assets of RMB3,013,416 was recognized for the amount of their carrying amounts exceeding the fair value. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2023 | |
ORDINARY SHARES | |
ORDINARY SHARES | 17 ORDINARY SHARES In June 2023, the Annual General Meeting of the Company passed special resolution to approve that the authorized ordinary share capital of the Company was increased to US$175,000 divided into 3,500,000,000 shares of a nominal or par value of US$0.00005, of which 3,300,000,000 shall be designated as Class A ordinary shares and 200,000,000 shall be designated as Class B ordinary shares. As of December 31, 2023, the Company’s outstanding share capital consisted of 1,480,842,655 Class A ordinary shares and 43,590,336 Class B ordinary shares. A holder of a Class A ordinary share is conferred one vote per share on any resolution tabled at the general meeting of GDS Holdings. A holder of a Class B ordinary share is entitled to 20 votes per share on resolutions tabled at the general meeting of GDS Holdings for (i) the election or removal of a simple majority, or six, of directors; and (ii) any change to Articles of Association (“AoA”) that would adversely affect the rights of Class B shareholders, and which are convertible into Class A ordinary shares, and will automatically convert into Class A ordinary shares under certain circumstances. Every Class B ordinary share shall automatically be redesignated and re-classified as a Class A ordinary share upon the occurrence of the automatic conversion events, including the first occur of William Wei Huang ceasing to have Beneficial Ownership in not less than 2.75% (subject to certain exclusions) of the then issued share capital of the Company on an as converted basis, as defined in AoA. In the year ended December 31, 2023, 24,000,000 Class B ordinary |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED COMPENSATION. | |
SHARE-BASED COMPENSATION | 18 SHARE-BASED COMPENSATION Equity Incentive Plans The Company adopted the 2014 Equity Incentive Plan (“the 2014 Plan”) in July 2014 for the granting of share options to key employees, directors and external consultants in exchange for their services. The total number of shares, which may be issued under the 2014 Plan, is 29,240,000 shares. The Company adopted the 2016 Equity Incentive Plan (‘‘the 2016 Plan’’) in August 2016 for the granting of share options, stock appreciation rights and other stock-based award (collectively referred to as the ‘‘Awards’’) to key employees and directors. The maximum aggregate number of ordinary shares, which may be subject to Awards under the Plan, is 56,707,560 ordinary shares, provided, however, that the maximum number of unallocated ordinary shares which may be issuable pursuant to Awards are subject to certain automatic approval mechanism up to 3% of total issued and outstanding ordinary shares of the Company, if and whenever the unallocated ordinary shares which may be subject to equity awards under the 2016 Plan accounts for less than 1.5% of the Company’s total issued and outstanding ordinary shares. A summary of the option activity is as follows: Weighted average Weighted grant-date Number average fair value of options exercise price per option (RMB) (RMB) Options outstanding at January 1, 2021 407,000 5.1 1.6 Granted — Exercised (407,000) 5.1 1.6 Forfeited — Options outstanding at December 31, 2021, 2022 and 2023 — Options vested and expected to be vested at December 31, 2023 — Total intrinsic value of options exercised was RMB27,775 for the year ended December 31, 2021. Settlement of liability-classified restricted shares award During the years ended December 31, 2021, 2022 and 2023, the Company issued 178,280, 460,272 and 1,035,704, respectively, fully vested restricted shares to its directors to settle a portion of their remuneration for services provided by the directors, which had been recorded in general and administrative expenses. The number of restricted shares issued was determined by the fair value of the restricted shares on the date of settlement and the share-settled portion of the liability of RMB11,147, RMB13,719 and RMB12,914 for the years ended December 31, 2021, 2022 and 2023, respectively. Upon issuance of the shares to settle the obligation, equity is increased by the amount of the liability settled in shares and no additional share-based compensation expense was recorded. Restricted shares to directors, officers and employees In August 2021, August 2022 and August 2023, the Company granted non-vested restricted shares of 11,929,608, 21,488,048 and 21,918,552, respectively, to employees, officers and directors. The restricted share awards contained service and market conditions, or service and performance conditions, which are tied to the financial performance of the Company. For restricted shares granted, the value of the restricted shares was determined by the fair value of the restricted shares on the grant date, when all criteria for establishing the grant dates were satisfied. The value of restricted shares subject to service conditions and market conditions attached is recognized as the compensation expense using the graded-vesting method. The value of restricted shares with performance conditions attached is recognized as compensation expense using the graded-vesting method only when the achievement of performance conditions becomes probable. For restricted shares with market conditions, the probability to achieve market conditions is reflected in the grant date fair value. On July 22, 2023, the Compensation Committee of the Board of the Company approved the resolution of amendment to the restricted shares (the “Modification”). This Modification pertained to 1,124 recipients of these restricted shares. Cancellation of 9,820,069 restricted shares accompanied by the concurrent grant of 8,239,864 replacement restricted shares is accounted for as a modification of the terms of the cancelled restricted shares (“modified restricted shares”). The incremental compensation cost of RMB204,946 is measured as the excess of the fair value of the modified restricted shares over the fair value of the original restricted shares at the modification date. A summary of the restricted share activity is as follows: Number of Weighted average grant- Shares date fair value per share (RMB) Unvested at January 1, 2021 31,018,768 42.4 Granted 12,107,888 31.6 Vested (12,632,104) 29.3 Forfeited (1,563,832) 37.7 Unvested at December 31, 2021 and January 1, 2022 28,930,720 43.9 Granted 21,948,320 19.4 Vested (5,015,992) 43.3 Forfeited (7,328,536) 32.5 Unvested at December 31, 2022 and January 1, 2023 38,534,512 32.2 Granted (Note 1) 31,194,120 11.9 Vested (4,788,176) 16.1 Forfeited (Note 2) (15,943,658) 45.9 Unvested at December 31, 2023 48,996,888 16.4 Note 1: Note 2: The Company recognized share-based compensation expenses of RMB391,275, RMB290,815 and RMB336,616 for the years ended December 31, 2021, 2022 and 2023, respectively, for the restricted share awards. As of December 31, 2023, total unrecognized compensation expense relating to the unvested shares was RMB342,420. The expense is expected to be recognized over a weighted average period of 1.42 years using the graded-vesting attribution method. The Company did not capitalize any of the share-based compensation expenses as part of the cost of any asset for the years ended December 31, 2021, 2022 and 2023. Total intrinsic value of restricted shares vested was RMB674,147, RMB132,123 and RMB56,674, respectively, for the years ended December 31, 2021, 2022 and 2023. Aggregate intrinsic value of unvested restricted shares as of December 31, 2023 was RMB395,614. The fair value of the restricted shares granted is estimated on the date of grant using the Monte Carlo simulation model with the following assumptions used. Grant date: August 2021 August 2022 July 2023 August 2023 Risk-free rate of return 0.07% - 0.33 % 2.82% - 2.98 % 4.94% - 5.50 % 4.66 % Volatility 49.271% - 50.295 % 53.14% - 54.15 % 66.64% - 67.86 % 61.40 % Expected dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Share price at grant date US $7.4500 US $3.3650 US$ 1.5000 US $1.6025 (RMB 48.2 ) (RMB 22.7 ) (RMB 10.7 ) (RMB 11.4 ) Expected term 1 – 3 years 1 – 3 years 0.767 - 1.767 years 1 – 3 years (1) Volatility Expected volatility is assumed based on the historical volatility of the Company in the period equal to the expected term of each grant. (2) Risk-free interest rate Risk-free rate equal to the United States Government Treasury Yield Rates for a term equal to the remaining expected term. (3) Dividend yield The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the restricted shares. A summary of share-based compensation expenses for the years ended December 31, 2021, 2022 and 2023 is as follows: Years ended December 31, 2021 2022 2023 Costs of revenue 110,291 97,055 116,467 Selling and marketing expenses 53,560 41,685 43,765 General and administrative expenses 219,328 146,781 166,838 Research and development expenses 8,096 5,294 9,546 Total share-based compensation expenses 391,275 290,815 336,616 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE | |
REVENUE | 19 REVENUE Net revenue consisted of the following: Years ended December 31, 2021 2022 2023 Colocation services 6,514,268 7,943,268 8,669,669 Managed service and others 1,300,136 1,374,623 1,286,268 Service revenue 7,814,404 9,317,891 9,955,937 Equipment sales 4,277 7,740 564 Total 7,818,681 9,325,631 9,956,501 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
INCOME TAX | 20 INCOME TAX GDS Holdings was registered as a Hong Kong SAR tax resident in 2021 and subject to the Hong Kong SAR Profits Tax rate of 16.5% in 2021, 2022 and 2023. Three PRC entities are entitled to PRC Corporate Income Tax (“CIT”) rate of 15% in those years that being recognized as “High and New Technology Enterprise” as long as the relevant requirements are satisfied. Certain PRC entities satisfying the criteria of “Small and Micro Businesses” enjoy lower income tax rates. All the other PRC subsidiaries and consolidated VIEs of the Company are subject to CIT rate of 25%. The Company’s Hong Kong SAR subsidiaries are subject to the Hong Kong SAR Profits Tax rate of 16.5%. A two-tiered Profits Tax rates regime was introduced since year 2018 where the first HK$2 million of assessable profits earned will be taxed at half the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one entity in the group to benefit from the progressive rates. The Company’s Singapore subsidiaries are subject to the Singapore CIT rate of 17%, except for one Singapore entity which was granted the Development and Expansion Incentive under the International Headquarters Award making it enjoy a concessionary CIT rate of 10% from March 1, 2022 to February 28, 2027 for its qualifying activities. The Company’s Malaysia, Indonesia and Macau SAR subsidiaries are subject to the Malaysia CIT rate of 24%, Indonesia CIT rate of 22% and Macau SAR CIT rate of 12%, respectively in 2021, 2022 and 2023. Certain Malaysia subsidiaries are subject to partial income tax exemptions if certain conditions are met. The operating results before income tax and the provision for income taxes by tax jurisdictions for the years ended December 31, 2021, 2022 and 2023 are as follows: Years ended December 31, 2021 2022 2023 Loss before income taxes: PRC 287,250 144,885 3,094,795 Other jurisdictions 661,502 844,998 1,205,375 Total loss before income taxes 948,752 989,883 4,300,170 Current tax expenses: PRC 290,924 375,388 279,646 Other jurisdictions — — 1,508 Total current tax expenses 290,924 375,388 281,154 Deferred tax benefits: PRC (48,463) (99,153) (295,931) Other jurisdictions — — — Total deferred tax benefits (48,463) (99,153) (295,931) Total income taxes expenses (benefits) 242,461 276,235 (14,777) Reconciliations of the differences between the PRC statutory income tax rate and the Company’s effective income tax rate are as follows: Years ended December 31, 2021 2022 2023 PRC enterprise income tax rate 25.0 % 25.0 % 25.0 % Non-PRC resident enterprises not subject to income tax 0.0 % (1.4) % (0.4) % Tax differential for entities in non-PRC jurisdiction (0.2) % (1.0) % (0.6) % Preferential tax rate 0.6 % 0.7 % 0.2 % Tax effect of current year permanent differences (5.4) % (3.7) % (0.8) % Expiration of unused net operating losses (1.5) % (1.6) % (1.1) % Non-taxable income and non-deductible expenses (14.4) % (14.1) % (4.8) % Gain from purchase price adjustment 0.2 % 5.2 % 0.0 % Change in valuation allowance (31.0) % (34.0) % (18.2) % Return to provision adjustment 1.1 % (3.0) % 1.0 % (25.6) % (27.9) % 0.3 % The components of deferred tax assets and liabilities are as follows: As of December 31, 2022 2023 Deferred tax assets: Allowance for credit losses 4,209 9,585 Impairment of long-lived assets — 753,354 Government subsidy 7,685 7,877 Accrued expenses 54,223 64,709 Asset retirement obligation 27,696 26,165 Operating lease liabilities 411,972 368,061 Finance lease and other financing obligations 1,587,137 1,475,504 Net operating losses carry forwards 993,062 1,222,832 Other non-current assets 40,644 27,714 Other non-current liabilities 19,101 12,621 Total gross deferred tax assets 3,145,729 3,968,422 Valuation allowance on deferred tax assets (1,131,256) (1,914,950) Deferred tax assets, net of valuation allowance 2,014,473 2,053,472 Deferred tax liabilities: Accounts receivable — (65,008) Property and equipment (1,811,897) (1,690,369) Intangible assets (260,519) (189,210) Prepaid land use rights (1,491) (1,451) Operating lease right-of-use assets (1,101,324) (1,080,936) Other current assets (20,619) (19,135) Total deferred tax liabilities (3,195,850) (3,046,109) Net deferred tax liabilities (1,181,377) (992,637) Analysis as: Deferred tax assets 228,999 289,847 Deferred tax liabilities (1,410,376) (1,282,484) Net deferred tax liabilities (1,181,377) (992,637) The following table presents the movement of the valuation allowance for the deferred tax assets: Years ended December 31, 2021 2022 2023 Balance at the beginning of the year 328,821 775,528 1,131,256 Increase during the year 446,707 355,728 783,694 Balance at the end of the year 775,528 1,131,256 1,914,950 As of December 31, 2023, the Company’s net deferred tax assets and valuation allowance were RMB289,847 and RMB1,914,950, respectively. The deferred tax assets for net operating losses carry forwards and related valuation allowance were RMB1,222,832 and RMB1,052,151, respectively as of December 31, 2023. This valuation allowance was related to the deferred tax assets of certain subsidiaries and consolidated VIEs of the Company. These entities were in a cumulative loss position with net operating losses carry forwards which are subject to expiration. The Company evaluated the realizability of deferred tax assets associated with the Company’s net operating losses carry forwards to determine whether there was more than a 50% likelihood that these deferred tax assets would be realized, based on the Company’s expectations of future taxable income and timing of net operating losses carry forwards expirations. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilized. The Company considers the scheduled reversal of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The net operating losses carry forwards of the Company’s PRC subsidiaries and consolidated VIEs amounted to RMB4,445,250 as of December 31, 2023, of which RMB230,439, RMB558,900, RMB1,134,804, RMB1,381,169 and RMB1,139,938 will expire if unused by December 31, 2024, 2025, 2026, 2027 and 2028, respectively. Uncertainties exist with respect to how the current income tax law in the PRC applies to the Company’s overall operations, and more specifically, with regard to tax residency status. The 2008 Enterprise Income Tax Law (the “EIT Law”) includes a provision specifying that legal entities organized outside the PRC are considered residents for Chinese income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities are considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Company does not believe that the legal entities organized outside the PRC should be treated as residents for EIT Law purposes. If the PRC tax authorities subsequently determine that GDS Holdings and its subsidiaries registered outside the PRC are deemed resident enterprises, GDS Holdings and its subsidiaries registered outside the PRC will be subject to the PRC income tax at a rate of 25%. If the Company were to be non-resident for PRC tax purposes, dividends paid to it from profits earned by the PRC subsidiaries after January 1, 2008 would be subject to a withholding tax. The EIT Law and its relevant regulations impose a withholding tax at 10%, unless reduced by a tax treaty or agreement, for dividends distributed by a PRC-resident enterprise to its non-PRC-resident corporate investor for earnings generated beginning on January 1, 2008. Undistributed earnings generated prior to January 1, 2008 are exempt from such withholding tax. The Company has not recognized any deferred tax liability for the undistributed earnings of the PRC-resident enterprise as of December 31, 2022 and 2023, as the Company plans to permanently reinvest these earnings in the PRC. Each of the PRC subsidiaries does not have a plan to pay dividends in the foreseeable future and intends to retain any future earnings for use in the operation and expansion of its business in the PRC. As of December 31, 2023, the total amount of undistributed earnings from the PRC subsidiaries and the VIEs for which no withholding tax has been accrued and the unrecognized deferred tax liabilities were RMB2,324,522 and RMB354,855, respectively. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 21 RESTRICTED NET ASSETS Pursuant to the laws and regulations of the PRC, the PRC entities are required to allocate at least 10% of their after-tax profits, after making good of accumulated losses as reported in their PRC statutory financial statements, to the general reserve fund and have the right to discontinue allocations to the general reserve fund if the balance of such reserve has reached 50% of their registered capital. The general reserves are not available for distribution to the shareholders (except in liquidation) and may not be transferred in the form of loans, advances, or cash dividend. These PRC entities are restricted in their ability to transfer the registered capital and general reserve fund to GDS Holdings in the form of dividends, loans or advances. The restricted portion amounted to RMB24,955,657 and RMB25,030,636 as of December 31, 2022 and 2023, respectively, including non-distributable general reserve fund of RMB146,856 and RMB225,917 as of December 31, 2022 and 2023, respectively. |
LOSS PER CLASS A and CLASS B OR
LOSS PER CLASS A and CLASS B ORDINARY SHARE | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER CLASS A and CLASS B ORDINARY SHARE | |
LOSS PER CLASS A and CLASS B ORDINARY SHARE | 22 LOSS PER CLASS A and CLASS B ORDINARY SHARE The computation of basic and diluted loss per share is as follows: Years ended December 31, 2021 2022 2023 Net loss (1,191,213) (1,266,118) (4,285,393) Net loss (income) attributable to non-controlling interests 1,403 (3,427) (4,660) Net loss attributable to redeemable non-controlling interests 2,592 655 — Accretion to redemption value of redeemable non-controlling interests (77,644) (10,801) — Adjustment to the redemption value of redeemable non-controlling interests — (178,982) — Cumulative dividend on redeemable preferred shares (49,073) (51,212) (53,625) Net loss available to GDS Holdings Limited ordinary shareholders (1,313,935) (1,509,885) (4,343,678) Weighted average number of ordinary shares outstanding - basic and diluted 1,452,906,722 1,464,447,843 1,468,187,956 Loss per ordinary share - basic and diluted (0.90) (1.03) (2.96) The following table sets forth the computation of basic and diluted loss per Class A and Class B ordinary share: Years ended December 31, 2021 2022 2023 Class A Class B Class A Class B Class A Class B Allocation of net loss available to GDS Holdings Limited ordinary shareholders (1,252,810) (61,125) (1,440,198) (69,687) (4,194,323) (149,355) Weighted average number of ordinary shares outstanding - basic and diluted 1,385,316,386 67,590,336 1,396,857,507 67,590,336 1,417,704,951 50,483,004 Loss per ordinary share - basic and diluted (0.90) (0.90) (1.03) (1.03) (2.96) (2.96) During the years ended December 31, 2021, 2022 and 2023, the Company issued nil, 29,252,600 and nil ordinary shares, respectively, to its share depository bank, which have been and will continue to be used to settle stock option and restricted share awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes and, therefore, have been excluded from the computation of loss per ordinary share. Any ordinary shares not used in the settlement of stock option and restricted share awards will be returned to the Company. The following securities were excluded from the computation of diluted loss per share as inclusion would have been either the performance condition relating to the securities have not been satisfied or anti-dilutive. The share options and restricted shares below represented the maximum number of shares to be issued. Years ended December 31, 2021 2022 2023 Share options/restricted shares 28,930,720 38,534,512 48,996,888 Convertible bonds payable 46,526,049 145,726,048 288,600,152 Total 75,456,769 184,260,560 337,597,040 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 23 SEGMENT INFORMATION The Company has one operating segment, which is the design, build-out and operation of data centers. The Company’s chief operating decision maker is the chief executive officer of the Company who reviews the Company’s consolidated results of operations in assessing performance of and making decisions about resource allocations to this segment. During the years ended December 31, 2021, 2022 and 2023, substantially all of the Company’s operations are in the PRC. The summary of long-lived assets as of December 31, 2022 and 2023 in each area is as follows: As of December 31, 2022 2023 PRC 48,508,923 45,315,466 Hong Kong SAR 4,406,267 4,787,069 Malaysia 531,477 3,368,819 Singapore 141,333 99,207 Indonesia 33,285 76,159 Total 53,621,285 53,646,720 |
MAJOR CUSTOMERS AND SUPPLIERS
MAJOR CUSTOMERS AND SUPPLIERS | 12 Months Ended |
Dec. 31, 2023 | |
MAJOR CUSTOMERS AND SUPPLIERS | |
MAJOR CUSTOMERS AND SUPPLIERS | 24 MAJOR CUSTOMERS AND SUPPLIERS The Company defines “end user customers” or “customers” as the end users of the Company’s services. The Company defines “contracting customers” as parties with which the Company enters into sales agreements, including (i) the Company’s end user customers that directly enter into sales agreements with the Company; and (ii) intermediate contracting parties that, at the request of the Company’s end user customers, enter into sales agreements with the Company, in which case the Company may provide services to the end user customers through such agreements. During the years ended December 31, 2021, 2022 and 2023, the Company had the following contracting customers which generated over 10% of the Company’s total net revenues: Years ended December 31, 2021 2022 2023 Contracting Customer A 1,736,295 1,895,877 1,992,667 Contracting Customer B 873,378 1,595,777 1,834,843 Contracting Customer C 785,528 1,130,799 1,420,163 Contracting Customer D 964,414 1,031,102 1,128,135 During the years ended December 31, 2021, 2022 and 2023, the Company had the following end user customers which generated over 10% of the Company’s total net revenues: Years ended December 31, 2021 2022 2023 End User Customer One 1,850,523 2,341,346 2,778,151 End User Customer Two 1,735,536 1,857,369 1,676,064 During the years ended December 31, 2021, 2022 and 2023, the Company generated a portion of the net revenue attributable to End User Customer One and End User Customer Two through sales agreements entered into with them directly; during the same years, the Company generated the remaining portion of the net revenue attributable to End User Customer One and End User Customer Two through sales agreements entered into with intermediate contracting parties, including Contracting Customer A, Contracting Customer B, and Contracting Customer D. During the years ended December 31, 2021, 2022 and 2023, the portion of net revenue generated by the Company from End User Customer One through sales agreements entered into with it directly is represented by the revenue listed under Contracting Customer C; during the same years, the portion of net revenue generated by the Company from End User Customer Two through sales agreements entered into with it directly is not disclosed as a separate line item under contracting customers above as it constituted less than 10% of the Company’s total net revenues in each year. During the years ended December 31, 2021, 2022 and 2023, the numbers of major suppliers of the Company were one, one and one, respectively, from whom the purchase amounts from each of them accounted for over 10% of the Company’s operating expenditures. Severe impact can result from total or partial loss of the business relationship. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 25 COMMITMENTS AND CONTINGENCIES (a) Capital commitments Capital commitments outstanding as of December 31, 2022 and 2023 not provided for in the financial statements were as follows: As of December 31, 2022 2023 Contracted for 5,241,586 4,412,522 In addition, commitment for purchase of land use rights was RMB516,061 and RMB707,495 as of December 31, 2022 and 2023, respectively. (b) Lease commitments The Company’s lease commitments are disclosed in Note 12. (c) Litigation contingencies In June 2023, the Company and its chief executive officer and chief financial officer were named as defendants in a putative class action lawsuit filed in the United States District Court for the Central District of California. The complaints in the action alleges that a number of the Company’s SEC filings included false and misleading statements regarding certain financing transactions. After considering the likelihood of any unfavorable outcome and reasonably estimated the amount or range of any potential loss, the Company accrued RMB 24,789 loss. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 26 RELATED PARTY TRANSACTIONS In 2021, 2022 and 2023, the related parties of the Company are as follows: Name of party Relationship STT GDC Principal ordinary shareholder of the Company STT Singapore DC Pte. Ltd. Subsidiary of STT GDC STT DEFU 2 Pte. Ltd. Subsidiary of STT GDC OnePro Cloud Inc. Entity over which the Company has significant influence The Company entered into the following material related party transactions. (a) Major transactions with related parties Years ended December 31, 2021 2022 2023 Commission income (Note i) STT Singapore DC Pte. Ltd. 546 564 562 STT DEFU 2 Pte. Ltd. 464 478 514 1,010 1,042 1,076 Purchase of debt securities (Note ii) OnePro Cloud Inc. — 2,840 — Interest income of convertible bonds (Note ii) OnePro Cloud Inc. — 75 148 (b) Major balances with related parties As of December 31, 2022 2023 Amount due from a related party: (Note ii) OnePro Cloud Inc. 2,860 3,060 Amount due to related parties: (Note i) STT Singapore DC Pte. Ltd. 8,395 8,300 STT DEFU 2 Pte. Ltd. 8,600 8,804 16,995 17,104 Note i: During the year ended December 31, 2021, the Company recognized RMB546 and RMB464, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB45,345 and RMB39,818, respectively. As of December 31, 2021, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables. During the year ended December 31, 2022, the Company recognized RMB564 and RMB478, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB42,792 and RMB43,896, respectively. As of December 31, 2022, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables. During the year ended December 31, 2023, the Company recognized RMB562 and RMB514, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB42,546 and RMB47,276, respectively. As of December 31, 2023, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables. These amounts due to related parties are trade in nature and are settled on a recurring basis. Note ii: On September 2, 2022, the Company subscribed convertible bonds of US$400 thousand issued by OnePro Cloud Inc. The convertible bond has a term of 12 months with interest rate of 8% per annum and is convertible into Series A Preferred Shares of OnePro Cloud Inc. at the option of holders under certain conditions. |
PARENT ONLY FINANCIAL INFORMATI
PARENT ONLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
PARENT ONLY FINANCIAL INFORMATION | |
PARENT ONLY FINANCIAL INFORMATION | 27 PARENT ONLY FINANCIAL INFORMATION The following condensed parent company financial information of GDS Holdings has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries and the consolidated VIEs. As of December 31, 2023, there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of GDS Holdings, except for those, which have been separately disclosed in the consolidated financial statements. Condensed Balance Sheets As of December 31, 2022 2023 Assets Current assets Cash 760,716 223,533 Restricted cash 20,402 — Prepaid expenses 9,698 737 Loans and amounts due from subsidiaries and consolidated VIEs, current — 1,082,359 Other current assets 2,422 3,939 Total current assets 793,238 1,310,568 Non-current assets Investment, loans and amounts due from subsidiaries and consolidated VIEs, non-current 30,891,361 27,417,363 Other non-current assets 184 73 Total non-current assets 30,891,545 27,417,436 Total assets 31,684,783 28,728,004 Liabilities, Mezzanine Equity and Shareholders’ Equity Current liabilities Short-term borrowings 1,045,252 — Convertible bonds payable, current 2,083,829 — Accounts payable 1,188 3,810 Accrued expenses and other payables 49,670 134,090 Due to subsidiaries 141,798 197,112 Total current liabilities 3,321,737 335,012 Non-current liabilities Convertible bonds payable 4,294,985 8,434,766 Total non-current liabilities 4,294,985 8,434,766 Total liabilities 7,616,722 8,769,778 Mezzanine equity Redeemable preferred shares (US$0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2022 and 2023; Redemption value of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively; Liquidation preference of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively) 1,047,012 1,064,766 Total mezzanine equity 1,047,012 1,064,766 Shareholders’ equity Ordinary shares (US $0.00005 par value; 2,002,000,000 and 3,500,000,000 shares authorized as of December 31, 2022 and 2023, respectively; 1,456,842,655 and 1,480,842,655 Class A ordinary shares issued and outstanding as of December 31, 2022 and 2023 , respectively; 67,590,336 and 43,590,336 Class B ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively) 516 516 Additional paid-in capital 29,048,598 29,337,095 Accumulated other comprehensive loss (848,360) (974,393) Accumulated deficit (5,179,705) (9,469,758) Total shareholders’ equity 23,021,049 18,893,460 Commitments and contingencies Total liabilities, mezzanine equity and shareholders’ equity 31,684,783 28,728,004 Condensed Statements of Operations Years ended December 31, 2021 2022 2023 Net revenue — 13,852 6,776 Cost of revenue (116,151) (102,565) (121,592) Gross loss (116,151) (88,713) (114,816) Operating expenses Selling and marketing expenses (54,768) (42,647) (45,242) General and administrative expenses (285,077) (232,832) (230,744) Research and development expenses (8,096) (5,294) (9,546) Loss from operations (464,092) (369,486) (400,348) Other income (expenses): Interest income 25,215 5,593 73,008 Interest expenses (95,313) (207,510) (261,152) Equity in loss of subsidiaries and consolidated VIEs (653,251) (697,277) (3,700,241) Others, net 223 (210) (469) Loss before income taxes (1,187,218) (1,268,890) (4,289,202) Income tax expenses — — (851) Net loss (1,187,218) (1,268,890) (4,290,053) Condensed Statements of Comprehensive Loss Years ended December 31, 2021 2022 2023 Net loss (1,187,218) (1,268,890) (4,290,053) Other comprehensive loss: Foreign currency translation adjustments, net of nil tax (159,551) (249,174) (126,033) Comprehensive loss (1,346,769) (1,518,064) (4,416,086) Condensed Statements of Cash Flows Years ended December 31, 2021 2022 2023 Operating activities: Net cash used in operating activities (83,019) (68,391) (68,805) Investing activities: Investment, loans and advances to subsidiaries (9,935,432) (6,312,513) (1,285,317) Net cash used in investing activities (9,935,432) (6,312,513) (1,285,317) Financing activities: Proceeds from short-term borrowings 3,187,850 4,218,790 — Repayment of short-term borrowings — (6,555,105) (1,042,785) Payment of issuance cost and commitment cost of debts (40,645) (26,465) (78,989) Proceeds from exercise of stock options 2,082 — — Proceeds from issuance of convertible bonds — 3,917,036 3,926,667 Repayment of convertible bonds — — (2,128,311) Payment of redeemable preferred shares dividends (49,221) (51,578) (53,923) Net cash provided by financing activities 3,100,066 1,502,678 622,659 Effect of exchange rate changes on cash and restricted cash (160,320) 425,800 173,878 Net decrease in cash and restricted cash (7,078,705) (4,452,426) (557,585) Cash and restricted cash at beginning of year 12,312,249 5,233,544 781,118 Cash and restricted cash at end of year 5,233,544 781,118 223,533 Supplemental disclosures of cash flow information Interest paid 38,243 143,847 144,095 Supplemental disclosures of non-cash investing and financing activities Settlement of liability-classified restricted share award 11,147 13,719 12,914 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 28 SUBSEQUENT EVENT Series A Convertible Preferred Shares Issued by DigitalLand Holdings Limited (“GDSI”) On March 26, 2024, the Company’s wholly-owned subsidiary, GDSI, that acts as the holding company for the Company’s international data center assets and operations, entered into definitive agreements with certain institutional private equity investors to issue US$587 million of Series A convertible preferred shares of GDSI to these investors. The completion of the share subscription is subject to the fulfilment of certain customary closing conditions (the “Closing”). Post-Closing and on an as-converted basis, the Company will own approximately 56.1% of the equity interest of GDSI in the form of ordinary shares. The remaining 43.9% equity interest will be held in the form of Series A convertible preferred shares by these investors. Each Series A convertible preferred share will be entitled to one vote and will be convertible into one ordinary share of GDSI at any time at the holder’s option, subject to customary anti-dilution adjustments. All Series A convertible preferred shares will automatically convert into ordinary shares of GDSI at, or following, completion of GDSI’s IPO, subject to certain conditions. Subject to certain conditions, GDSI shall have the right at its election (but not the obligation) to redeem any of the then outstanding Series A convertible preferred shares at a price in cash as pre-determined. In addition, the holders of Series A convertible preferred shares will also be entitled to liquidation preference. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of consolidation | (a) Principles of consolidation The accompanying consolidated financial statements include the financial statements of GDS Holdings Limited, its subsidiaries and consolidated variable interest entities and variable interest entities’ subsidiaries for which GDS Holdings is the primary beneficiary. The Company’s data center related operations are mainly conducted through Shanghai Xinwan Enterprise Management Co., Ltd. (“Management HoldCo”), Beijing Wanguo Chang’an Science and Technology Co., Ltd. (“GDS Beijing”), GDS Beijing’s subsidiaries and Shanghai Shu’an Data Services Co., Ltd. (“GDS Shanghai”) (referred to as the “VIEs”) to comply with the PRC laws and regulations, which prohibit foreign investments in companies that are engaged in data center related business. Individuals acting as nominee equity holders ultimately hold the legal equity interests of the VIEs on behalf of GDS Holdings. Prior to December 2019, the equity holders of GDS Beijing and GDS Shanghai were William Wei Huang, CEO of GDS Holdings, and his relative. In order to enhance corporate governance and facilitate administration of the VIEs, in December 2019, GDS Holdings completed transfer of ownership of the 100% equity interest of GDS Beijing and GDS Shanghai from William Wei Huang and his relative to a newly established holding company, Management HoldCo. The entire equity interest in Management HoldCo is held by a number of management personnel designated by the board of directors of GDS Holdings. In conjunction with the transfer of legal ownership, GDS (Shanghai) Investment Co., Ltd. (“GDS Investment Company”), a subsidiary of GDS Holdings, entered into a series of contractual arrangements with Management HoldCo, its shareholders, GDS Beijing and GDS Shanghai to replace the previous contractual arrangements with GDS Beijing and GDS Shanghai on substantially the same terms under such previous contractual arrangements. The previous contractual arrangements were terminated simultaneously when the current contractual arrangements came into effect, and the subsidiary of GDS Holdings under the previous and current contractual arrangements is the same entity, namely GDS Investment Company. GDS Holdings also replaced the sole director of GDS Shanghai and certain subsidiaries of GDS Beijing with a board of three directors. William Wei Huang acts as the Chairman of the board of directors of Management HoldCo, GDS Investment Company, GDS Beijing and GDS Shanghai and their subsidiaries respectively. Other management members of GDS and board appointee serve as directors and officers of Management HoldCo., GDS Investment Company, GDS Beijing and GDS Shanghai and their subsidiaries. This restructuring could reduce risk by allocating ownership of the VIEs among a larger number of individual management shareholders, and strengthen corporate governance with the establishment of the board of directors of the VIEs and their subsidiaries. This restructuring could also create a more stable ownership structure by avoiding reliance on a single or small number of natural persons, and by buffering the ownership of the VIEs with an additional layer of legal entities. A series of contractual arrangements, including equity interest pledge agreements, shareholder voting rights proxy agreements, exclusive technology license and service agreements, intellectual property rights license agreements, exclusive call option agreements and loan agreements (collectively, referred to as “VIE Agreements”) were entered into among GDS Beijing, GDS Shanghai, Management HoldCo, its shareholders and GDS Investment Company. Equity Interest Pledge Agreements. Shareholder Voting Rights Proxy Agreements. Exclusive Technology License and Service Agreements. Intellectual Property Rights License Agreements. Exclusive Call Option Agreements. Loan Agreements. thirty Under the terms of the VIE Agreements, GDS Holdings has (i) the right to receive service fees on a yearly basis at an amount equivalent to all of the net profits of the VIEs under the exclusive technology license and services agreements when such services are provided; (ii) the right to receive all dividends declared by the VIEs and the right to all undistributed earnings of the VIEs; (iii) the right to receive the residual benefits of the VIEs through its exclusive option to acquire 100% of the equity interests in the VIEs, to the extent permitted under PRC law; and (iv) the right to require each of the shareholder of the VIEs to appoint the PRC citizen(s) as designated by GDS Investment Company to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of the VIEs requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in the VIEs, and appointing directors and executive officers. In accordance with Accounting Standards Codification (“ASC”) 810-10-25-38A, GDS Holdings has a controlling financial interest in the VIEs because GDS Holdings has (i) the power to direct activities of the VIEs that most significantly impact the economic performance of the VIEs; and (ii) the right to receive expected residual return of the VIEs that could potentially be significant to the VIEs. There is currently no contractual arrangement that would require GDS Holdings to provide additional financial support to the VIEs. As GDS Holdings is conducting certain businesses mainly through the VIEs, GDS Holdings may provide such support on a discretionary basis in the future, which could expose GDS Holdings to a loss. The terms of the VIE Agreements and financial support from GDS Holdings to the VIEs were considered in determining that GDS Holdings is the primary beneficiary of the VIEs. Accordingly, the financial statements of the VIEs are consolidated in GDS Holdings’s consolidated financial statements. Under the terms of the VIE Agreements, the VIEs’ equity holders have no rights to the net assets nor have the obligations to fund the deficit, and such rights and obligations have been vested to GDS Holdings. All of the equity (net assets) or deficits (net liabilities) and net income (loss) of the VIEs are attributed to GDS Holdings. The Company has been advised by its PRC legal counsel that each of the VIE agreements is valid, legally binding and enforceable in accordance with its terms and applicable PRC laws and the ownership structure of the VIEs does not violate applicable PRC Laws. However, there are uncertainties regarding the interpretation and application of PRC laws and future PRC laws and regulations. There can be no assurance that the PRC authorities will take a view that is not contrary to or otherwise different. If the current ownership structure of the Company and the VIE Agreements are determined to be in violation of any existing or future PRC laws and regulations, the PRC government could: ● Levy fines on the Company or confiscate income of the Company; ● Revoke or suspend the VIEs’ business or operating licenses; ● Discontinue or place restrictions or onerous conditions on VIE’s operations; ● Require the Company to discontinue their operations in the PRC; ● Require the Company to undergo a costly and disruptive restructuring; ● Take other regulatory or enforcement actions that could be harmful to the Company’s business. The imposition of any of these government actions could result in the termination of the VIE agreements, which would result in GDS Holdings losing the (i) ability to direct the activities of the VIEs and (ii) rights to receive substantially all the economic benefits and residual returns from the VIEs and thus result in the deconsolidation of the VIEs in GDS Holdings’s consolidated financial statements. The following tables set forth the financial statement balances and amounts of the VIEs and their subsidiaries included in the consolidated financial statements after the elimination of intercompany balances and transactions among VIEs and their subsidiaries. As of December 31, 2022 2023 Assets Current assets Cash 2,326,332 2,451,473 Restricted cash — 1,345 Accounts receivable, net of allowance for credit losses 2,371,362 2,458,297 VAT recoverable 79,163 134,595 Prepaid expenses 76,557 36,777 Other current assets 126,385 108,015 Total current assets 4,979,799 5,190,502 Property and equipment, net 2,441,858 2,030,013 Intangible assets, net 124,691 66,474 Operating lease right-of-use assets 186,795 152,689 Deferred tax assets 38,348 61,549 Restricted cash 32,621 29,680 VAT recoverable 26,087 29,280 Other non-current assets 148,787 144,599 Total assets 7,978,986 7,704,786 Liabilities Current liabilities Short-term borrowings and current portion of long-term borrowings 258,200 435,767 Accounts payable 493,332 536,177 Accrued expenses and other payables 235,388 189,245 Deferred revenue 151,050 108,496 Operating lease liabilities, current 41,898 40,267 Finance lease and other financing obligations, current 33,398 39,117 Total current third-party liabilities 1,213,266 1,349,069 Long-term borrowings, excluding current portion 721,387 542,023 Operating lease liabilities, non-current 134,684 99,806 Finance lease and other financing obligations, non-current 931,580 894,318 Deferred tax liabilities 69,831 44,490 Other long-term liabilities 52,222 52,478 Total third-party liabilities 3,122,970 2,982,184 Amounts due to GDS Holdings and its non-VIE subsidiaries, net 4,302,245 4,176,728 Total liabilities 7,425,215 7,158,912 As of December 31, 2022 and 2023, accounts receivable of RMB66,503 and RMB82,930, respectively, other current assets of nil and RMB12,646, respectively, other non-current assets of RMB9,337 and RMB5,876, respectively, and property and equipment of RMB45,572 and RMB39,152, respectively, of VIEs were pledged solely to secure banking borrowings of VIEs. As of December 31, 2022 and 2023, long-term borrowings of the consolidated VIEs of RMB885,854 and RMB710,874, respectively, were guaranteed by GDS Holdings Limited and its subsidiaries. Net revenue, net income, operating, investing and financing cash flows of the VIEs that were included in the Company’s consolidated financial statements for the years ended December 31, 2021, 2022 and 2023 are as follows: Years ended December 31, 2021 2022 2023 Net revenue 7,516,345 8,958,853 9,489,505 Net income (loss) 112,257 223,925 (7,897) Net cash provided by operating activities 744,493 1,533,548 235,448 Net cash used in investing activities (205,041) (143,796) (86,336) Net cash used in financing activities (561,101) (369,324) (25,567) The unrecognized revenue-producing assets that are held by the VIEs comprise of internally developed software, intellectual property and trademarks which were not recorded on the Company’s consolidated balance sheets as they do not meet all the capitalization criteria. Costs recognized by the VIEs for outsourcing and other services provided by other entities within the Company were RMB5,160,638, RMB6,336,874 and RMB7,312,771 for the years ended December 31, 2021, 2022 and 2023, respectively, net of the related services provided to other entities within the Company. These inter-company transactions are eliminated in the consolidated financial statements. |
Use of estimates | (b) Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, the fair values of assets acquired and liabilities assumed and the consideration transferred in a business combination, the impairment of goodwill, the realization of deferred income tax assets, the fair value of share-based compensation awards, the recoverability of long-lived assets, and incremental borrowing rate of leases. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Cash and cash equivalents | (c) Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company does not have any cash equivalents as of December 31, 2022 and 2023. |
Restricted cash | (d) Restricted cash Restricted cash represents amounts held by banks, which are not available for the Company’s use, primarily as security for bank borrowings, related interests and certain construction projects. Upon repayment of bank borrowings and the related interests and completion of construction projects, the deposits are released by the bank and available for general use by the Company. |
Fair value of financial instruments | (e) Fair value of financial instruments The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (Note 16 to the consolidated financial statements): ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. |
Contract balances | (f) Contract balances The timing of revenue recognition, billings and cash collections result in accounts receivable, contract assets and contract liabilities (i.e. deferred revenue). Accounts receivable are recorded at the invoice amount, net of an allowance for credit losses and is recognized in the period when the Company has transferred products or provided services to its customers and when its right to consideration is unconditional. Amounts collected on accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The provision of credit losses for accounts receivable is based upon the current expected credit losses (“CECL”) model. The CECL model requires an estimate of the credit losses expected over the life of accounts receivable since initial recognition, and accounts receivable with similar risk characteristics are grouped together when estimating CECL. In assessing the CECL, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical credit loss experience, adjusted for relevant factors impacting collectability and forward-looking information indicative of external market conditions. While the Company uses the best information available in making determination, the ultimate recovery of recorded receivables is also dependent upon future economic events and other conditions that may be beyond the Company’s control. Accounts receivable that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for credit losses. The Company does not have any off-balance-sheet credit exposure related to its customers. A contract asset exists when the Company has transferred products or provided services to its customers but customer payment is contingent upon satisfaction of additional performance obligations. Contract assets are recorded in other current assets in the consolidated balance sheet. Deferred revenue (a contract liability) is recognized when the Company has an unconditional right to a payment before it transfers goods or services to customers. |
Fulfilment costs | (g) Fulfilment costs Fulfilment costs are capitalized when all three of the criteria are met: a) the costs relate directly to a contract or an anticipated contract that the Company can specifically identify; b) the costs generate or enhance resources of the Company that will be used in satisfying or continuing to satisfy future performance obligations; and c) the costs are expected to be recovered. The asset recognized from capitalizing the costs to fulfill a contract is amortized on a systematic basis consistent with the pattern of the transfer of the goods or services to which the asset relates. As of December 31, 2022 and 2023, the Company recorded capitalized fulfilment cost of RMB47,400 and RMB47,400, respectively, in other non-current assets. |
Equity method investments | (h) Equity method investments The Company’s investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are generally accounted for under the equity method of accounting. Equity method investments are initially measured at cost, and are subsequently adjusted for cash contributions, distributions and the Company’s share of the income and losses of the investees. The Company records its equity method investment in other non-current assets on the consolidated balance sheet. The Company’s proportionate share of the income or loss from its equity method investment are recorded in others, net on the consolidated statement of operations. The Company reviews its investment periodically to determine if any investment may be impaired considering both qualitative and quantitative factors that may have a significant impact on the investees’ fair value. The Company did not record any impairment losses related to its equity method investment for the years ended December 31, 2021, 2022 and 2023. |
Property and equipment | (i) Property and equipment Property and equipment are carried at cost less accumulated depreciation and any recorded impairment. Property and equipment acquired under finance leases are initially recorded at the present value of minimum lease payments. Buildings and equipment under finance leases and leasehold improvements with definite useful lives are amortized over the shorter of the lease term or the estimated useful life of the asset or improvement. Leasehold land is amortized on a straight-line basis over the lease term. Freehold land is not amortized. Gains or losses arising from the disposal of an item of property and equipment are determined based on the difference between the net disposal proceeds and the carrying amount of the item and are recognized in profit or loss on the date of disposal. The estimated useful lives of self-owned property and equipment are presented below. Buildings 30 years Data center equipment – Machinery 10 – 3 Furniture and office equipment 3 Vehicles 5 years Construction in progress primarily consists of the cost of data center buildings and the related construction expenditures that are required to prepare the data center buildings for their intended use. No depreciation is provided in respect of construction in progress until it is substantially completed and ready for its intended use. Once a data center building is ready for its intended use and becomes operational, construction in progress is transferred to the respective category of property and equipment and is depreciated over the estimated useful life of the underlying assets. Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets. |
Leases | (j) Leases The Company is a lessee in a number of non-cancellable operating leases and finance leases, primarily for data centers, lands, offices and other equipment. The Company determines if an arrangement is or contains a lease at its inception. The Company recognizes lease liabilities and right-of-use (“ROU”) assets at lease commencement date. Lease liabilities are measured at the present value of unpaid lease payments at the lease commencement date and is subsequently measured at amortized cost using the effective-interest method. Since most of the Company’s leases do not provide an implicit rate, the Company uses its own incremental borrowing rate in determining the present value of unpaid lease payments. The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that the Company would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term. ROU assets are initially measured at cost, which consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. For operating leases, the Company recognizes a single lease cost on a straight-line basis over the remaining lease term. For finance leases, the ROU assets are subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term. Amortization of the ROU assets are recognized and presented separately from interest expense on the lease liability. For leases acquired in business combinations or asset acquisitions, ROU assets are measured at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Prior to the adoption of ASC 842, Leases The Company has elected not to recognize ROU assets and lease liabilities for short-term leases (i.e. leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). As a practical expedient, the Company has elected that for all leases, where it is the lessee, not to separate non-lease components from lease components and instead to account for all lease and non-lease components associated with each lease as a single lease component. The Company records an asset and related financing obligation for the estimated construction costs under build-to-suit lease arrangements where it controls the asset during construction. Upon completion of the construction and commencement of the lease terms, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback transaction. If the arrangements do not qualify for sales recognition under the sale-leaseback accounting guidance, the Company continues to be the deemed owner of the build-to-suit assets for financial reporting purposes. The Company accounted for costs incurred relating to the construction of the underlying assets before the lease commencement dates in accordance with ASC 360 on its balance sheet. In addition, the financing liability is reduced by the non-interest portion of the lease payments. If a lease is modified and that modification is not accounted for as a separate contract, the classification of the lease is reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. The FASB has provided accounting elections for entities that provide or receive rent concessions (e.g., deferral of lease payments, reduced future lease payments) due to the COVID-19 pandemic. During years ended December 31, 2021 and 2022, the Company was granted lease concessions by certain landlords due to the effects of the COVID-19 pandemic. The Company assessed that these rent concessions qualify for the election, as these concessions did not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The Company then elected to not evaluate whether these concessions are lease modifications and chose to adopt a policy to not account for these concessions as lease modifications. Instead, the Company, as a lessee that was contractually released from certain lease payments, accounts these rent concessions as negative variable lease payments (Note 12). |
Asset retirement costs | (k) Asset retirement costs The Company’s asset retirement obligations are primarily related to its data center buildings, of which the majority are leased under long-term arrangements, and, in certain cases, are required to be returned to the landlords in their original condition. The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred. The corresponding asset retirement costs are capitalized as part of the cost of leasehold improvements and are depreciated over the shorter of the estimated useful life of the asset or the term of the lease subsequent to the initial measurement. The Company accretes the liability in relation to the asset retirement obligations over time and the accretion expense is recorded in cost of revenue. Asset retirement obligations are recorded in accrued expenses and other payables and other long-term liabilities. The following table summarizes the activity of the asset retirement obligation liability: Asset retirement obligations as of January 1, 2021 76,909 Additions 22,745 Accretion expense 6,227 Settlement (998) Asset retirement obligations as of December 31, 2021 104,883 Additions 4,382 Accretion expense 6,366 Foreign exchange impact 158 Settlement (3,978) Asset retirement obligations as of December 31, 2022 111,811 Additions 602 Accretion expense 6,805 Foreign exchange impact 32 Derecognition upon disposal of a subsidiary (1,360) Revision in estimated cash flows as result of lease contracts modifications (9,258) Settlement (2,103) Asset retirement obligations as of December 31, 2023 106,529 |
Intangible assets | (l) Intangible assets Intangible assets acquired in the acquisitions comprised of customer contracts and licenses. The weighted-average amortization period by major intangible asset class is as follows: Customer contracts 5 Licenses 20 years Software 5 years The amortization period of customer contracts is determined based on the remaining contractual period of the contracts with the customers at the time of acquisition and an estimate of the contract renewal period. Licenses are amortized using a straight-line method over the terms of those licenses. |
Prepaid land use rights | (m) Prepaid land use rights The land use rights represent the amounts paid and relevant costs incurred for the rights to use land in the PRC and Hong Kong SAR before the adoption of ASC 842, and are carried at cost less accumulated amortization. Amortization is provided on a straight-line basis over the remaining terms of the land use rights. As of December 31, 2023 the remaining terms of the land use rights range from 35 |
Business combinations and goodwill | (n) Business combinations and goodwill The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations The acquisition method of accounting requires the Company to estimate fair values of the separately identifiable assets acquired and liabilities assumed. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The determination of fair values of the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Goodwill is an asset representing the future economic benefits arising from other assets acquired in the acquisition that are not individually identified and separately recognized. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in macroeconomic conditions, the industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, and events affecting a reporting unit and share price. Application of the goodwill impairment test requires judgment, including the identification of the reporting unit, assignment of assets and liabilities to the reporting unit, assignment of goodwill to the reporting unit, and determination of the fair value of each reporting unit. The Company has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value prior to performing the goodwill impairment test. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the goodwill impairment test is not required. If the goodwill impairment test is required, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. For the years ended December 31, 2021 and 2022, the Company performed qualitative assessments and evaluated all abovementioned factors to conclude that it was not more-likely-than-not the fair value was less than the carrying amount of the reporting unit. Therefore, no further quantitative impairment testing on goodwill was performed for the years ended December 31, 2021 and 2022. Due to the changing market conditions and fluctuations in the share price of the Company, the Company performed quantitative assessment for the year ended December 31, 2023. The Company estimated fair value using the income approach. The fair value determined using the income approach was compared with comparable market data and reconciled, as necessary. No impairment losses were recorded for goodwill for the years ended December 31, 2021, 2022 and 2023. |
Impairment of long-lived assets | (o) Impairment of long-lived assets The Company tests long-lived assets (including property and equipment, prepaid land use rights, operating lease ROU assets and intangible assets subject to amortization) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized in the amount of the excess of the asset group’s carrying value over its fair value. The Company determines the fair value of the data center assets based on the higher of the forecasted discounted cash flows expected to result from the data center assets’ operations and eventual disposition and the price market participants would pay to sub-lease and acquire the remaining data center assets. For the purposes of impairment testing of long-lived assets, the Company has concluded that an individual data center is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. When an impairment loss is recognized, the loss is allocated to the assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. For the years ended December 31, 2022 and 2023, impairment losses for the Company’s data centers’ long-lived assets of RMB12,759 and RMB3,013,416 were recognized, respectively. The impairment losses recognized were mainly due to lower performance results compared to original plans. No impairment loss was recorded for the year ended December 31, 2021. |
Value-added-tax ("VAT") | (p) Value-added-tax (“VAT”) Entities that are VAT general taxpayers are permitted to offset qualified input VAT paid to suppliers against their output VAT upon receipt of appropriate supplier VAT invoices on an entity-by-entity basis. When the output VAT exceeds the input VAT, the difference is remitted to tax authorities, usually on a monthly basis; whereas when the input VAT exceeds the output VAT, the difference is treated as VAT recoverable which can be carried forward indefinitely to offset future net VAT payables. VAT related to purchases and sales which have not been settled at the balance sheet date is disclosed separately as an asset and liability, respectively, in the consolidated balance sheets. As of December 31, 2022 and 2023, the Company recorded a VAT recoverable of RMB164,743 and RMB214,385 as current assets, and RMB1,155,586 and RMB1,399,844 as non-current assets, respectively. The Company also recorded VAT payables of RMB20,297 and RMB17,785 in accrued expenses and other payables, in the consolidated balance sheets as of December 31, 2022 and 2023, respectively. At each balance sheet date, the Company reviews the balance of VAT recoverable for recoverability, taking into consideration of the indefinite life of the VAT recoverable as well as the Company’s forecasted operating results and capital spendings. The Company has not made an allowance for the recoverability of the VAT recoverable, as the balance is expected to be utilized to offset against VAT payables. |
Commitment and contingencies | (q) Commitment and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. When a loss contingency is not both probable and estimable, the Company does not record an accrued liability but discloses the nature and the amount of the claim, if material. However, if the loss (or an additional loss in excess of the accrual) is at least reasonably possible, then the Company discloses an estimate of the loss or range of loss, unless it is immaterial, or an estimate cannot be made. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves complex judgments about future events. Management is often unable to estimate the loss or a range of loss, particularly where (i) the damages sought are indeterminate, (ii) the proceedings are in the early stages, or (iii) there is a lack of clear or consistent interpretation of laws specific to the industry-specific complaints among different jurisdictions. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including eventual loss, fine, penalty or business impact, if any. |
Revenue recognition | (r) Revenue recognition The Company recognizes revenue as the Company satisfies a performance obligation by transferring control over a good or service to a customer. For each performance obligation satisfied over time, the Company recognizes revenue over time by measuring the progress toward complete satisfaction of that performance obligation. If the Company does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time. Revenue is measured as the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. For contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to the separate performance obligation on a relative standalone selling price basis. The standalone selling price is determined based on overall pricing objectives, taking into consideration market conditions, geographic locations and other factors. The Company derives revenue primarily from the delivery of (i) colocation services; and (ii) managed services, including managed hosting services and managed cloud services. The remainder of the Company’s revenue is from IT equipment sales that are either sold on a stand-alone basis or bundled in a managed service contract arrangement and consulting services. Colocation services are services where the Company provides space, power and cooling to customers for housing and operating their IT system equipment in the Company’s data centers. Managed hosting services are services where the Company provides outsourced services to manage the customers’ data center operations, including data migration, IT operations, security and data storage. Managed cloud services are services where the Company offers direct private connection to major cloud platforms, an innovative service platform for managing hybrid clouds. Contracts with customers for colocation services and managed services include i) those provide for variable considerations that are primarily based on the usage of such services. Revenues on such contracts are recognized based on the agreed usage-based fees as the actual services are rendered throughout the contract term; and ii) those provide for a fixed consideration over the contract service period. Revenue on such contracts is recognized on a straight-line basis over the term of the contract. In certain colocation and managed hosting service contracts, the Company agrees to charge customers for their actual power consumption. Relevant revenue is recognized based on actual power consumption during each period. In certain other colocation and managed hosting service contracts, the Company specifies a fixed power consumption limit each month for customers. If a customer’s actual power consumption is below the limit, no additional fee is charged. If the actual power consumption is above the limit, the Company charges the customer additional power consumption fees calculated based on the portion of actual power consumption exceeding the limit, multiplied by a fixed unit price, which is determined based on market price, without providing the customer with any rights to acquire additional goods or services. Accordingly, relevant revenue is recognized each month based on actual additional power consumption fees. The Company’s colocation service and managed service contracts with customers contain both lease and non-lease components. The Company elected to adopt the practical expedient which allows lessors to combine lease and non-lease components and account for them as one component if i) they have the same timing and pattern of transfer; and ii) the lease component, if accounted for separately, would be classified as an operating lease. In addition, the Company has performed a qualitative analysis to determine that the non-lease component is the predominant component of its revenue stream as the customer would ascribe more value to the services provided rather than to the lease component. Therefore, the combined component is accounted for in accordance with the current revenue accounting guidance (“ASC 606”). For contracts that do not meet the criteria for the practical expedient, the lease component is accounted for in accordance with the current lease accounting guidance (“ASC 842”), which is immaterial for the years ended December 31, 2021, 2022 and 2023. Revenue recognized for colocation or managed hosting and cloud services delivered prior to billing is recorded within accounts receivable. The Company generally bills the customer on a monthly or quarterly basis in arrears. Cash received in advance from customers prior to the delivery of the colocation or managed hosting and cloud services is recorded as deferred revenue. The sale of IT equipment is recognized when the customer obtains control of the equipment, which is typically when delivery has occurred, the customer accepts the equipment and the Company has no performance obligation after the delivery. In certain managed service contracts, the Company sells and delivers IT equipment such as servers and computer terminals prior to the delivery of the services. Since sale of equipment can be distinguished and is separately identifiable from other promises in the contract and it is distinct within the context of the contract, the sale of equipment is considered a separate performance obligation. Accordingly, the contract consideration is allocated to the equipment and the managed services based on their relative standalone selling prices. Sales of IT equipment is generally recognized on a gross basis as the Company is primarily responsible for fulfilling the contract, assumes inventory risk and has discretion in establishing the price when selling to the customer. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records the revenue on a net basis. Consulting services are provided to customers for a fixed amount over the service period, usually less than one year. The Company recognizes revenues from consulting services over the period when the services were provided, since customers simultaneously receive and consume the benefit of the services. The Company uses the input method based on the pattern of service provided to the customers. |
Cost of revenues | (s) Cost of revenues Cost of revenues consists primarily of utility costs, depreciation of property and equipment, lease costs, labor costs and other costs directly attributable to the provision of the service revenue and sales of IT equipment. |
Research and development and advertising costs | (t) Research and development and advertising costs Research and development costs incurred during the application development stage of developing internal-use software are capitalized. Other research and development costs are expensed as incurred. Research and development costs consist primarily of payroll and related personnel costs for developing or significantly improving the Company’s services and products. Advertising costs are expensed as incurred. Advertising costs amounted to RMB15,043, RMB8,639 and RMB9,400 in 2021, 2022 and 2023, respectively. |
Government grants | (u) Government grants Government grants are recognized when received and when all the conditions for their receipt have been met. Subsidies that compensate the Company for expenses incurred are recognized as a reduction of expenses in the consolidated statements of operations. Subsidies that are not associated with expenses are recognized as other income. The Company received government subsidies for acquisitions of property and equipment that required the Company to meet certain conditions. The subsidies are recorded as a liability until the conditions are met and then recognized as a deduction of property and equipment and depreciated over the useful life of the related assets as a reduction of the depreciation charges. Subsidies for obtaining the rights to use land are recorded as a liability and then amortized over the land use right period as a reduction of the amortization charges of the related land use rights. The Company received government subsidies that required the Company to operate in a particular area for a certain period. The Company recorded the subsidies in other long-term liabilities when the subsidies were received and subsequently recognized as government subsidy income ratably over the period the Company is required to operate in the area. As of December 31, 2022 and 2023, deferred government grants are recorded as follow: As of December 31, 2022 2023 Accrued expenses and other payables — 13 Other long-term liabilities 30,741 78,494 Deduction of property and equipment, net 7,299 8,658 Government grants were recognized as follows in our consolidated statements of operations: Years ended December 31, 2021 2022 2023 Reduction of cost of revenue — 521 1,262 Reduction of general and administrative expenses 2,629 — — Reduction of interest expenses — — 4,310 Government grants 88,209 95,581 84,511 Total 90,838 96,102 90,083 There were no significant commitment, contingencies or provision for recapture conditions for the government subsidies received for the years ended December 31, 2021,2022 and 2023. |
Capitalized interest | (v) Capitalized interest A reconciliation of total interest costs to ‘‘Interest expenses’’ as reported in the consolidated statements of operations for the years ended December 31, 2021, 2022 and 2023 is as follows: Years ended December 31, 2021 2022 2023 Total interest costs 1,805,434 2,084,565 2,374,570 Less: interest costs capitalized (150,697) (196,678) (337,591) Interest expenses 1,654,737 1,887,887 2,036,979 Interest costs that are directly attributable to the construction of an asset which necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of that asset. The capitalization of interest costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, interest costs are being incurred and activities that are necessary to prepare the asset for its intended use are in progress. Capitalization of interest costs is ceased when the asset is substantially complete and ready for its intended use. |
Debt issuance costs and commitment costs | (w) Debt issuance costs and commitment costs Debt issuance costs are capitalized and are amortized over the life of the related debts based on the effective interest method. Debt commitment costs are capitalized and are amortized over the commitment period of the facility on a straight-line basis. Such amortization is included as a component of interest expense. Unamortised debt issuance costs of RMB186,313 and RMB268,441 are presented as a reduction of debt as of December 31, 2022 and 2023, respectively. |
Income tax | (x) Income tax Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The evaluation is based on the Company’s estimate of the future taxable income. The future taxable income incorporates the Company’s best estimates of utilization rates of relevant data centers based on historical utilization rates and the Company’s business plans. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses. |
Share-based compensation | (y) Share-based compensation The Company accounts for the compensation cost from share-based payment transactions with employees based on the grant-date fair value of the equity -classified awards. The grant-date fair value of the award is recognized as compensation expense, net of forfeitures, over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. Awards granted to employees with performance conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses, net of forfeitures, over the performance period when the performance goal becomes probable to achieve. The Company also adjusts the compensation cost based on the probability of performance goal achievement at the end of each reporting period. The rewards are earned upon attainment of identified performance goals. Awards granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses , net of forfeitures, over the estimated requisite service period, regardless of whether the market condition has been satisfied if the requisite service period is fulfilled. The Company accounts for forfeitures when they occur. Compensation cost previously recognized are reversed in the period the award is forfeited before completion of the requisite service period. Share-based payment transactions with nonemployees in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Cancellation of an award accompanied by the concurrent grant of a replacement award is accounted for as a modification of the terms of the cancelled award (“modified award”). The incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the original award at the modification date. Therefore, as result of the modification, the Company recognizes share-based compensation that comprising (i) the amortization of the incremental compensation cost resulting from the modification over the term of the modified award and (ii) the amortization of any unrecognized compensation cost of the original award over the term of the modified award. For further information on share-based compensation, see Note 18 below. |
Employee benefits | (z) Employee benefits Pursuant to relevant PRC regulations, the Company is required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 28% to 40% on a standard salary base as determined by local social security bureau. Contributions to the defined contribution plans are charged to the consolidated statements of operations when the related service is provided. |
Foreign currency translation and foreign currency risks | (aa) Foreign currency translation and foreign currency risks The functional currency of GDS Holdings is the United States dollar (“USD”), whereas the functional currency of its PRC subsidiaries and consolidated VIEs in PRC, subsidiaries in Hong Kong SAR and Macau SAR, subsidiaries in Singapore, subsidiaries in Malaysia and subsidiaries in Indonesia is the RMB, Hong Kong dollar (“HKD”), Singapore dollar (“SGD”), Malaysian Ringgit (“MYR”) and Indonesian Rupiah (“IDR”), respectively. The reporting currency of the Company is RMB as the major operations of the Company are within the PRC. Transactions denominated in currencies other than the functional currency are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet dates. Non-monetary items that are denominated in foreign currency are measured at the historical costs by using the exchange rates at the dates of the initial transactions. Exchange gains and losses are recognized in profit or loss and are reported in foreign currency exchange gain (loss) on a net basis. The results of foreign operations are translated into RMB at the exchange rates as of the balance sheet date for assets and liabilities, the average daily exchange rate for each month for income and expense items and the historical exchange rates for equity accounts. Translation gains and losses are recorded in other comprehensive income and accumulated in the translation adjustment component of equity until the sale or liquidation of the foreign entity. The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PRC government, controls the conversion of RMB to foreign currencies. The value of the RMB is subject to changes of central government policies and international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Company’s cash and restricted cash denominated in RMB amounted to RMB6,601,979 and RMB7,013,932 as of December 31, 2022 and 2023, respectively. As of December 31, 2023, the Company’s cash and restricted cash were deposited in major financial institutions located in PRC, Hong Kong SAR, Singapore, Macau SAR, US, Malaysia and Indonesia and were denominated in the following currencies: In thousands RMB USD HKD JPY EUR SGD MYR IDR In PRC 6,922,573 38,502 — — — — — — In Hong Kong SAR 90,741 10,173 113,160 20,542 146 — — — In Singapore 618 8,886 18 — — 9,132 — — In Macau SAR — — 31,323 — — — — — In US — 9 — — — — — — In Malaysia — 22,643 — — — — 47,682 — In Indonesia — 4,976 — — — — — 97,388,479 Total in original currency 7,013,932 85,189 144,501 20,542 146 9,132 47,682 97,388,479 RMB equivalent 7,013,932 603,370 130,946 1,031 1,150 49,105 73,502 44,896 |
Concentration of credit risk | (bb) Concentration of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, restricted cash and accounts receivable. The Company’s investment policy requires cash and restricted cash to be placed with high-quality financial institutions and to limit the amount of credit risk from any one issuer. The Company regularly evaluates the credit standing of the counterparties or financial institutions. The Company conducts credit evaluations on its customers prior to transfer the control of goods or services. The assessment of customer creditworthiness is primarily based on historical collection records, research of publicly available information and customer on-site visits by senior management. Based on this analysis, the Company determines what credit terms, if any, to offer to each customer individually. If the assessment indicates a likelihood of collection risk, the Company will not deliver the services or sell the products to the customer. Otherwise the Company will require the customer to pay cash, post letters of credit to secure payment or to make significant down payments. Historically, credit losses on accounts receivable have been insignificant. |
Earnings (loss) per share | (cc) Earnings (loss) per share Basic earnings (loss) per ordinary share is computed by dividing net income (loss) available to the Company’s ordinary shareholders by the weighted average number of ordinary shares outstanding during the year using the two-class method. The liquidation and dividend rights of the holders of the Company’s Class A and Class B ordinary shares are identical, except with respect to voting rights. As a result, under the two-class method in accordance with ASC 260, net income (loss) available to the Company’s ordinary shareholders is allocated between Class A and Class B ordinary shares and other participating securities based on participating rights in undistributed earnings on a proportionate basis. The Company’s redeemable preferred shares (Note 14) are participating securities since the holders of these securities participate in dividends on the same basis as ordinary shareholders, in addition to the cumulative preferential dividend they enjoy. These participating securities are not included in the computation of basic loss per ordinary share in periods when the Company reports net loss, because these participating security holders have no obligation to share in the losses of the Company. Diluted earnings (loss) per share is calculated by dividing net income (loss) available to the Company’s ordinary shareholders as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary and dilutive ordinary share equivalents outstanding during the year. Ordinary share equivalents include the ordinary shares issuable upon the exercise of the outstanding share options (using the treasury stock method) and conversion of redeemable preferred shares and convertible bonds (using the as-if-converted method). Potential dilutive securities are not included in the calculation of diluted earnings (loss) per share if the impact is anti-dilutive. |
Changes in accounting principle | (dd) Changes in accounting principle 1) The Company adopted Accounting Standards Update “ASU” 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers 2) The Company adopted ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Receivables—Troubled Debt Restructurings by Creditors Financial Instruments—Credit Losses—Measured at Amortized Cost |
Recently issued accounting standards | (ee) Recently issued accounting standards In September 2022, the FASB issued ASU 2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) — Common Control Arrangements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of financial statement balances and amounts of the VIEs and their subsidiaries | As of December 31, 2022 2023 Assets Current assets Cash 2,326,332 2,451,473 Restricted cash — 1,345 Accounts receivable, net of allowance for credit losses 2,371,362 2,458,297 VAT recoverable 79,163 134,595 Prepaid expenses 76,557 36,777 Other current assets 126,385 108,015 Total current assets 4,979,799 5,190,502 Property and equipment, net 2,441,858 2,030,013 Intangible assets, net 124,691 66,474 Operating lease right-of-use assets 186,795 152,689 Deferred tax assets 38,348 61,549 Restricted cash 32,621 29,680 VAT recoverable 26,087 29,280 Other non-current assets 148,787 144,599 Total assets 7,978,986 7,704,786 Liabilities Current liabilities Short-term borrowings and current portion of long-term borrowings 258,200 435,767 Accounts payable 493,332 536,177 Accrued expenses and other payables 235,388 189,245 Deferred revenue 151,050 108,496 Operating lease liabilities, current 41,898 40,267 Finance lease and other financing obligations, current 33,398 39,117 Total current third-party liabilities 1,213,266 1,349,069 Long-term borrowings, excluding current portion 721,387 542,023 Operating lease liabilities, non-current 134,684 99,806 Finance lease and other financing obligations, non-current 931,580 894,318 Deferred tax liabilities 69,831 44,490 Other long-term liabilities 52,222 52,478 Total third-party liabilities 3,122,970 2,982,184 Amounts due to GDS Holdings and its non-VIE subsidiaries, net 4,302,245 4,176,728 Total liabilities 7,425,215 7,158,912 |
Schedule of net revenue, net income and cash flow of VIEs | Years ended December 31, 2021 2022 2023 Net revenue 7,516,345 8,958,853 9,489,505 Net income (loss) 112,257 223,925 (7,897) Net cash provided by operating activities 744,493 1,533,548 235,448 Net cash used in investing activities (205,041) (143,796) (86,336) Net cash used in financing activities (561,101) (369,324) (25,567) |
Schedule of estimated useful lives of self-owned property and equipment | Buildings 30 years Data center equipment – Machinery 10 – 3 Furniture and office equipment 3 Vehicles 5 years |
Schedule of asset retirement obligations | Asset retirement obligations as of January 1, 2021 76,909 Additions 22,745 Accretion expense 6,227 Settlement (998) Asset retirement obligations as of December 31, 2021 104,883 Additions 4,382 Accretion expense 6,366 Foreign exchange impact 158 Settlement (3,978) Asset retirement obligations as of December 31, 2022 111,811 Additions 602 Accretion expense 6,805 Foreign exchange impact 32 Derecognition upon disposal of a subsidiary (1,360) Revision in estimated cash flows as result of lease contracts modifications (9,258) Settlement (2,103) Asset retirement obligations as of December 31, 2023 106,529 |
Schedule of weighted-average amortization period of acquired intangible assets | Customer contracts 5 Licenses 20 years Software 5 years |
Schedule of deferred government grants | As of December 31, 2022 2023 Accrued expenses and other payables — 13 Other long-term liabilities 30,741 78,494 Deduction of property and equipment, net 7,299 8,658 |
Schedule of government subsidies | Years ended December 31, 2021 2022 2023 Reduction of cost of revenue — 521 1,262 Reduction of general and administrative expenses 2,629 — — Reduction of interest expenses — — 4,310 Government grants 88,209 95,581 84,511 Total 90,838 96,102 90,083 |
Schedule of reconciliation of total interest costs to "Interest expenses" as reported in the consolidated statements of operations | Years ended December 31, 2021 2022 2023 Total interest costs 1,805,434 2,084,565 2,374,570 Less: interest costs capitalized (150,697) (196,678) (337,591) Interest expenses 1,654,737 1,887,887 2,036,979 |
Schedule of cash and restricted cash deposited in major financial institutions located in PRC, Hong Kong SAR, US and Singapore | As of December 31, 2023, the Company’s cash and restricted cash were deposited in major financial institutions located in PRC, Hong Kong SAR, Singapore, Macau SAR, US, Malaysia and Indonesia and were denominated in the following currencies: In thousands RMB USD HKD JPY EUR SGD MYR IDR In PRC 6,922,573 38,502 — — — — — — In Hong Kong SAR 90,741 10,173 113,160 20,542 146 — — — In Singapore 618 8,886 18 — — 9,132 — — In Macau SAR — — 31,323 — — — — — In US — 9 — — — — — — In Malaysia — 22,643 — — — — 47,682 — In Indonesia — 4,976 — — — — — 97,388,479 Total in original currency 7,013,932 85,189 144,501 20,542 146 9,132 47,682 97,388,479 RMB equivalent 7,013,932 603,370 130,946 1,031 1,150 49,105 73,502 44,896 |
CASH AND RESTRICTED CASH (Table
CASH AND RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CASH AND RESTRICTED CASH | |
Schedule of reconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statements of cash flows | As of December 31, 2022 2023 Cash 8,608,131 7,710,711 Restricted cash - current assets 158,075 42,135 Restricted cash - non-current assets 115,860 165,086 Total cash and restricted cash shown in the consolidated statements of cash flows 8,882,066 7,917,932 |
CONTRACT BALANCES (Tables)
CONTRACT BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CONTRACT BALANCES | |
Schedule of accounts receivable, net | As of December 31, 2022 2023 Accounts receivable 2,426,753 2,585,134 Less: allowance for credit losses (20,728) (39,221) Accounts receivable, net 2,406,025 2,545,913 |
Schedule of allowance for credit losses | Years ended December 31, 2021 2022 2023 Balance at the beginning of the year 2,163 12,124 20,728 Allowance made during the year 10,070 7,744 18,294 Foreign exchange impact (109) 860 199 Balance at the end of the year 12,124 20,728 39,221 |
Schedule of deferred revenue | Deferred revenue Beginning balance as of January 1, 2023 185,833 Increase 1,735 Closing balance as of December 31, 2023 187,568 |
Schedule of remaining performance obligations | As of December 31, 2023, the revenues, excluding any variable considerations, expected to be recognized in future periods related to remaining performance obligations that are unsatisfied were as follows: Revenue expected to be recognized RMB Within 1 year 2,249,946 After 1 year but within 2 years 2,064,811 After 2 years but within 3 years 1,946,213 After 3 years but within 4 years 1,618,690 After 4 years but within 5 years 1,245,391 After 5 years 6,135,856 Total 15,260,907 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | As of December 31, Note 2022 2023 At cost: Land 3,302,148 3,440,140 Buildings 13,847,692 16,439,068 Data center equipment 19,603,839 22,958,565 Leasehold improvement 8,444,282 8,706,161 Furniture and office equipment 167,410 123,732 Vehicles 5,619 5,293 45,370,990 51,672,959 Less: Accumulated depreciation (9,269,587) (12,315,886) 36,101,403 39,357,073 Construction in progress 10,827,984 10,958,497 46,929,387 50,315,570 Less: Impairment losses 2(o) (12,759) (2,816,076) Property and equipment, net 46,916,628 47,499,494 |
Schedule of depreciation of property and equipment | Years ended December 31, 2021 2022 2023 Cost of revenue 2,264,620 2,722,169 2,999,008 General and administrative expenses 129,128 218,567 200,479 Research and development expenses 5,703 6,464 4,864 2,399,451 2,947,200 3,204,351 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS, NET | |
Schedule of intangible assets | As of December 31, Note 2022 2023 Customer contracts 8 1,641,900 1,518,587 Software — 72,077 Licenses 15,782 15,782 Others 364 464 1,658,046 1,606,910 Less: accumulated amortization (610,337) (801,612) Less: impairment losses 2(o) — (116,748) Intangible assets, net 1,047,709 688,550 |
Schedule of estimated future amortization expense | Fiscal year ending December 31, 2024 212,902 2025 189,909 2026 169,440 2027 43,686 2028 16,899 Thereafter 55,714 Total 688,550 |
PREPAID LAND USE RIGHTS (Tables
PREPAID LAND USE RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID LAND USE RIGHTS | |
Schedule of prepaid land use rights | As of December 31, 2022 2023 Prepaid land use rights 28,246 28,246 Less: Accumulated amortization (5,244) (5,858) Prepaid land use rights, net 23,002 22,388 |
ACQUISITIONS AND GOODWILL (Tabl
ACQUISITIONS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACQUISITIONS AND GOODWILL | |
Schedule of movement of goodwill | As of December 31, 2022 2023 Balance at the beginning of the year 7,076,505 7,076,505 Addition during the year — — Balance at end of year 7,076,505 7,076,505 |
Schedule of fair value of consideration transferred | The allocations of purchase price as of the date of acquisitions for the year ended December 31, 2021 are summarized as follows. 2021 Note (i)(ii) Fair value of consideration 5,230,362 Effective settlement of pre-existing relationships upon consolidation 20,000 Other net assets acquired (256,650) Identifiable intangible assets (689,800) Deferred tax liabilities 159,592 Total identifiable net assets (786,858) Goodwill 4,463,504 Note (i): Other net assets acquired primarily included property and equipment of RMB2,974,715, accounts receivable of RMB224,307, accounts payable of RMB412,380, short-term borrowings of RMB461,494, long-term borrowings of RMB840,000 and finance lease and other financing obligations of RMB1,463,851. Note (ii): Identifiable intangible assets acquired consisted of customer contracts of RMB689,800 with estimated useful lives from 5.7 to 7 years. |
LOANS AND BORROWINGS (Tables)
LOANS AND BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LOANS AND BORROWINGS | |
Schedule of borrowings | As of December 31, 2022 2023 Short-term borrowings 1,652,196 674,010 Current portion of long-term borrowings 1,971,771 2,159,943 Sub-total 3,623,967 2,833,953 Long-term borrowings, excluding current portion 23,518,058 26,706,256 Total loans and borrowings 27,142,025 29,540,209 |
Schedule of short-term borrowings | As of December 31, 2022 2023 Unsecured short-term loans and borrowings 1,388,192 409,407 Secured short-term loans and borrowings 264,004 264,603 1,652,196 674,010 |
Schedule of assets to secure the short-term borrowings | As of December 31, 2022 2023 Property and equipment, net 245,543 213,951 |
Schedule of long-term borrowings | As of December 31, 2022 2023 Unsecured long-term loans and borrowings — 30,085 Secured long-term loans and borrowings 25,489,829 28,836,114 25,489,829 28,866,199 |
Schedule of assets to secure the long-term borrowings | As of December 31, 2022 2023 Accounts receivable 1,256,289 1,740,552 Other current assets 97,049 97,307 Property and equipment, net 11,103,541 13,201,479 Prepaid land use rights, net 17,733 17,262 Operating lease ROU assets 3,607,506 3,681,166 Other non-current assets 23,912 24,272 16,106,030 18,762,038 |
Schedule of aggregate maturities of the long-term borrowings | Long-term borrowings Twelve months ending December 31, 2024 2,159,943 2025 2,625,548 2026 3,886,047 2027 5,275,278 2028 4,446,532 Thereafter 10,472,851 28,866,199 |
CONVERTIBLE BONDS PAYABLE (Tabl
CONVERTIBLE BONDS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CONVERTIBLE BONDS PAYABLE | |
Schedule of convertible notes payable | As of December 31, 2022 2023 Convertible Notes due 2025 2,083,829 566 Convertible Notes due 2029 4,294,985 4,373,386 Convertible Notes due 2030 — 4,060,814 Total 6,378,814 8,434,766 Including: - Current 2,083,829 — - Non-current 4,294,985 8,434,766 |
Schedule of interest expenses | Years ended December 31, 2021 2022 2023 Contractual interest 38,720 48,996 202,776 Amortization of issuance cost 11,617 16,813 20,015 Total interest expenses 50,337 65,809 222,791 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES. | |
Schedule of accounts payable | As of December 31, 2022 2023 Accounts payable for operating expenses 518,788 538,892 Accounts payable for purchase of property and equipment 2,574,096 2,886,045 3,092,884 3,424,937 |
Schedule of accrued expenses and other payables | As of December 31, 2022 2023 Consideration payables for acquisitions 183,220 263,026 Accrued payroll and welfare benefits 200,394 207,015 Accrued interest expenses 70,251 135,105 Income tax payable 202,589 166,923 Other tax payables 54,981 43,365 Accrued debt issuance costs and other financing costs 52,254 32,430 Amount due to related parties 16,995 17,104 Others 236,277 333,483 1,016,961 1,198,451 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of supplemental information related to operating leases | Note As of December 31, 2022 2023 Operating lease right-of-use assets, gross 5,633,946 5,516,880 Less: Impairment losses 2(o) — (80,592) Operating lease right-of-use assets, net 5,633,946 5,436,288 Operating lease liabilities, current 175,749 180,403 Operating lease liabilities, non-current 1,617,986 1,395,981 |
Schedule of of lease cost | Years ended December 31, 2021 2022 2023 Finance lease cost: - Amortization of right-of-use assets 546,437 619,675 587,813 - Interest on lease liabilities 592,835 632,183 613,909 Operating lease cost 313,752 402,514 406,620 Short-term lease cost 23,715 44,873 54,590 Variable lease cost (Note) (786) (47,729) (4,835) Total lease cost 1,475,953 1,651,516 1,658,097 Note: During the years ended December 31, 2022, the Company was granted lease concessions of |
Schedule of supplemental cash flow information related to leases | Years ended December 31, 2021 2022 2023 Cash paid for amounts included in measurement of lease liabilities (Note): - Operating cash flows from finance leases (591,189) (532,323) (501,090) - Operating cash flows from operating leases (236,589) (244,643) (283,085) - Financing cash flows from finance leases (265,481) (1,138,542) (986,888) Non-cash information on lease liabilities arising from obtaining ROU assets: - Finance leases 25,731 264,958 16,772 - Operating leases 368,069 151,709 28,307 Non-cash information on lease liabilities and ROU assets derecognized for termination of leases: - Finance leases — 524,180 237,330 - Operating leases — 286,774 48,610 Gain on early termination of leases: - Finance leases — 33,453 39,350 - Operating leases — 10,445 5,412 Note: The above table does not include cash paid for purchase of land use rights and initial direct costs of leases of RMB875,162, RMB760,610 and RMB15,900 in the years ended December 31, 2021, 2022 and 2023, respectively, which are included in “Payments for purchase of property and equipment and land use rights” in the consolidated statements of cash flows. The financing cash flows from finance leases include the payment of principal due to early termination of certain financing arrangements for data center equipment. |
Schedule of weighted average remaining lease term and weighted average discount rate for leases | As of December 31, 2022 2023 Weighted average remaining lease term: - Finance leases 13.8 12.7 - Operating leases 12.8 12.0 Weighted average discount rate: - Finance leases 6.68 % 6.56 % - Operating leases 5.89 % 6.16 % |
Schedule of maturities of lease liabilities | As of December 31, 2022 As of December 31, 2023 Total of Total of finance lease finance lease Other and other Operating Other and other Operating Finance lease financing financing lease Finance lease financing financing lease obligations obligations obligations obligations Total obligations obligations obligations obligations Total Within 1 year 670,992 330,773 1,001,765 272,796 1,274,561 643,795 354,878 998,673 268,687 1,267,360 After 1 year but within 2 years 666,487 1,373,214 2,039,701 250,716 2,290,417 671,956 1,336,491 2,008,447 204,305 2,212,752 After 2 years but within 3 years 708,642 450,691 1,159,333 206,489 1,365,822 694,746 336,372 1,031,118 162,294 1,193,412 After 3 years but within 4 years 729,283 428,175 1,157,458 169,014 1,326,472 717,691 324,909 1,042,600 145,663 1,188,263 After 4 years but within 5 years 753,410 407,211 1,160,621 151,160 1,311,781 668,301 116,544 784,845 149,581 934,426 After 5 years 6,768,112 209,784 6,977,896 1,582,879 8,560,775 5,718,509 153,720 5,872,229 1,351,565 7,223,794 Total 10,296,926 3,199,848 13,496,774 2,633,054 16,129,828 9,114,998 2,622,914 11,737,912 2,282,095 14,020,007 Less: total future interest (3,694,302) (421,227) (4,115,529) (839,319) (4,954,848) (3,070,979) (224,901) (3,295,880) (705,711) (4,001,591) Less: estimated construction costs — (11,124) (11,124) — (11,124) — — — — — Present value of lease and other financing obligations 6,602,624 2,767,497 9,370,121 1,793,735 11,163,856 6,044,019 2,398,013 8,442,032 1,576,384 10,018,416 Including: - Current portion 453,855 175,749 629,604 547,847 180,403 728,250 - Non-current portion 8,916,266 1,617,986 10,534,252 7,894,185 1,395,981 9,290,166 |
Schedule of assets to secure lease and other financing obligations | As of December 31, 2022 2023 Accounts receivable 145,764 69,264 Property and equipment, net 1,372,568 1,422,563 Operating lease ROU assets — 19,113 1,518,332 1,510,940 |
OTHER LONG-TERM LIABILITIES (Ta
OTHER LONG-TERM LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER LONG-TERM LIABILITIES | |
Schedule of other long-term liabilities | As of December 31, 2022 2023 Consideration payable for acquisitions 7,644 — Asset retirement obligations 102,591 101,675 Deferred revenue – non-current (Note 4) 29,703 67,683 Deferred government grants 30,741 78,494 Others 97,574 55,887 Total 268,253 303,739 |
REDEEMABLE PREFERRED SHARES (Ta
REDEEMABLE PREFERRED SHARES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REDEEMABLE PREFERRED SHARES | |
Schedule of movement of the redeemable preferred shares | Redeemable preferred shares Balance at January 1, 2021 980,910 Accrual of redeemable preferred shares dividends 49,073 Settlement of redeemable preferred shares dividends (49,221) Foreign exchange impact (22,282) Balance at December 31, 2021 and January 1, 2022 958,480 Accrual of redeemable preferred shares dividends 51,212 Settlement of redeemable preferred shares dividends (51,578) Foreign exchange impact 88,898 Balance at December 31, 2022 and January 1, 2023 1,047,012 Accrual of redeemable preferred shares dividends 53,625 Settlement of redeemable preferred shares dividends (53,923) Foreign exchange impact 18,052 Balance at December 31, 2023 1,064,766 |
REDEEMABLE NON-CONTROLLING IN_2
REDEEMABLE NON-CONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REDEEMABLE NON-CONTROLLING INTERESTS | |
Schedule of change in the carrying amount of redeemable non-controlling interests | Year ended December 31, 2021 2022 Balance at beginning of the year 120,820 404,673 Capital injection from CPE Fund 208,801 — Net loss attributable to redeemable non-controlling interests (2,592) (655) Accretion to redemption value of redeemable non-controlling interests 77,644 10,801 Adjustment to the redemption value of redeemable non-controlling interests — 178,982 Reclassification to current liability — (593,801) Balance at end of the year 404,673 — |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED COMPENSATION. | |
Summary of the option activity | Weighted average Weighted grant-date Number average fair value of options exercise price per option (RMB) (RMB) Options outstanding at January 1, 2021 407,000 5.1 1.6 Granted — Exercised (407,000) 5.1 1.6 Forfeited — Options outstanding at December 31, 2021, 2022 and 2023 — Options vested and expected to be vested at December 31, 2023 — |
Summary of the restricted share activity | Number of Weighted average grant- Shares date fair value per share (RMB) Unvested at January 1, 2021 31,018,768 42.4 Granted 12,107,888 31.6 Vested (12,632,104) 29.3 Forfeited (1,563,832) 37.7 Unvested at December 31, 2021 and January 1, 2022 28,930,720 43.9 Granted 21,948,320 19.4 Vested (5,015,992) 43.3 Forfeited (7,328,536) 32.5 Unvested at December 31, 2022 and January 1, 2023 38,534,512 32.2 Granted (Note 1) 31,194,120 11.9 Vested (4,788,176) 16.1 Forfeited (Note 2) (15,943,658) 45.9 Unvested at December 31, 2023 48,996,888 16.4 Note 1: Note 2: |
Assumptions used to estimate fair value of restricted shares granted | Grant date: August 2021 August 2022 July 2023 August 2023 Risk-free rate of return 0.07% - 0.33 % 2.82% - 2.98 % 4.94% - 5.50 % 4.66 % Volatility 49.271% - 50.295 % 53.14% - 54.15 % 66.64% - 67.86 % 61.40 % Expected dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Share price at grant date US $7.4500 US $3.3650 US$ 1.5000 US $1.6025 (RMB 48.2 ) (RMB 22.7 ) (RMB 10.7 ) (RMB 11.4 ) Expected term 1 – 3 years 1 – 3 years 0.767 - 1.767 years 1 – 3 years |
Summary of share-based compensation expenses | Years ended December 31, 2021 2022 2023 Costs of revenue 110,291 97,055 116,467 Selling and marketing expenses 53,560 41,685 43,765 General and administrative expenses 219,328 146,781 166,838 Research and development expenses 8,096 5,294 9,546 Total share-based compensation expenses 391,275 290,815 336,616 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE | |
Schedule of net revenue | Years ended December 31, 2021 2022 2023 Colocation services 6,514,268 7,943,268 8,669,669 Managed service and others 1,300,136 1,374,623 1,286,268 Service revenue 7,814,404 9,317,891 9,955,937 Equipment sales 4,277 7,740 564 Total 7,818,681 9,325,631 9,956,501 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
Schedule of operating results before income tax and the provision for income taxes by tax jurisdictions | Years ended December 31, 2021 2022 2023 Loss before income taxes: PRC 287,250 144,885 3,094,795 Other jurisdictions 661,502 844,998 1,205,375 Total loss before income taxes 948,752 989,883 4,300,170 Current tax expenses: PRC 290,924 375,388 279,646 Other jurisdictions — — 1,508 Total current tax expenses 290,924 375,388 281,154 Deferred tax benefits: PRC (48,463) (99,153) (295,931) Other jurisdictions — — — Total deferred tax benefits (48,463) (99,153) (295,931) Total income taxes expenses (benefits) 242,461 276,235 (14,777) |
Schedule of reconciliation of differences between PRC statutory tax rate and effective tax rate | Years ended December 31, 2021 2022 2023 PRC enterprise income tax rate 25.0 % 25.0 % 25.0 % Non-PRC resident enterprises not subject to income tax 0.0 % (1.4) % (0.4) % Tax differential for entities in non-PRC jurisdiction (0.2) % (1.0) % (0.6) % Preferential tax rate 0.6 % 0.7 % 0.2 % Tax effect of current year permanent differences (5.4) % (3.7) % (0.8) % Expiration of unused net operating losses (1.5) % (1.6) % (1.1) % Non-taxable income and non-deductible expenses (14.4) % (14.1) % (4.8) % Gain from purchase price adjustment 0.2 % 5.2 % 0.0 % Change in valuation allowance (31.0) % (34.0) % (18.2) % Return to provision adjustment 1.1 % (3.0) % 1.0 % (25.6) % (27.9) % 0.3 % |
Schedule of components of deferred tax assets and liabilities | As of December 31, 2022 2023 Deferred tax assets: Allowance for credit losses 4,209 9,585 Impairment of long-lived assets — 753,354 Government subsidy 7,685 7,877 Accrued expenses 54,223 64,709 Asset retirement obligation 27,696 26,165 Operating lease liabilities 411,972 368,061 Finance lease and other financing obligations 1,587,137 1,475,504 Net operating losses carry forwards 993,062 1,222,832 Other non-current assets 40,644 27,714 Other non-current liabilities 19,101 12,621 Total gross deferred tax assets 3,145,729 3,968,422 Valuation allowance on deferred tax assets (1,131,256) (1,914,950) Deferred tax assets, net of valuation allowance 2,014,473 2,053,472 Deferred tax liabilities: Accounts receivable — (65,008) Property and equipment (1,811,897) (1,690,369) Intangible assets (260,519) (189,210) Prepaid land use rights (1,491) (1,451) Operating lease right-of-use assets (1,101,324) (1,080,936) Other current assets (20,619) (19,135) Total deferred tax liabilities (3,195,850) (3,046,109) Net deferred tax liabilities (1,181,377) (992,637) Analysis as: Deferred tax assets 228,999 289,847 Deferred tax liabilities (1,410,376) (1,282,484) Net deferred tax liabilities (1,181,377) (992,637) |
Schedule of movement of the valuation allowance for the deferred tax assets | Years ended December 31, 2021 2022 2023 Balance at the beginning of the year 328,821 775,528 1,131,256 Increase during the year 446,707 355,728 783,694 Balance at the end of the year 775,528 1,131,256 1,914,950 |
LOSS PER CLASS A and CLASS B _2
LOSS PER CLASS A and CLASS B ORDINARY SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER CLASS A and CLASS B ORDINARY SHARE | |
Schedule of computation of basic and diluted loss per share | The computation of basic and diluted loss per share is as follows: Years ended December 31, 2021 2022 2023 Net loss (1,191,213) (1,266,118) (4,285,393) Net loss (income) attributable to non-controlling interests 1,403 (3,427) (4,660) Net loss attributable to redeemable non-controlling interests 2,592 655 — Accretion to redemption value of redeemable non-controlling interests (77,644) (10,801) — Adjustment to the redemption value of redeemable non-controlling interests — (178,982) — Cumulative dividend on redeemable preferred shares (49,073) (51,212) (53,625) Net loss available to GDS Holdings Limited ordinary shareholders (1,313,935) (1,509,885) (4,343,678) Weighted average number of ordinary shares outstanding - basic and diluted 1,452,906,722 1,464,447,843 1,468,187,956 Loss per ordinary share - basic and diluted (0.90) (1.03) (2.96) The following table sets forth the computation of basic and diluted loss per Class A and Class B ordinary share: Years ended December 31, 2021 2022 2023 Class A Class B Class A Class B Class A Class B Allocation of net loss available to GDS Holdings Limited ordinary shareholders (1,252,810) (61,125) (1,440,198) (69,687) (4,194,323) (149,355) Weighted average number of ordinary shares outstanding - basic and diluted 1,385,316,386 67,590,336 1,396,857,507 67,590,336 1,417,704,951 50,483,004 Loss per ordinary share - basic and diluted (0.90) (0.90) (1.03) (1.03) (2.96) (2.96) |
Schedule of securities excluded from the computation of diluted loss per share | Years ended December 31, 2021 2022 2023 Share options/restricted shares 28,930,720 38,534,512 48,996,888 Convertible bonds payable 46,526,049 145,726,048 288,600,152 Total 75,456,769 184,260,560 337,597,040 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SEGMENT INFORMATION | |
Schedule of long-lived assets | As of December 31, 2022 2023 PRC 48,508,923 45,315,466 Hong Kong SAR 4,406,267 4,787,069 Malaysia 531,477 3,368,819 Singapore 141,333 99,207 Indonesia 33,285 76,159 Total 53,621,285 53,646,720 |
MAJOR CUSTOMERS AND SUPPLIERS (
MAJOR CUSTOMERS AND SUPPLIERS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
MAJOR CUSTOMERS AND SUPPLIERS | |
Schedule of customers which generated over 10% of the Company's total net revenues | Years ended December 31, 2021 2022 2023 Contracting Customer A 1,736,295 1,895,877 1,992,667 Contracting Customer B 873,378 1,595,777 1,834,843 Contracting Customer C 785,528 1,130,799 1,420,163 Contracting Customer D 964,414 1,031,102 1,128,135 Years ended December 31, 2021 2022 2023 End User Customer One 1,850,523 2,341,346 2,778,151 End User Customer Two 1,735,536 1,857,369 1,676,064 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of capital commitments outstanding not provided for in the financial statements | As of December 31, 2022 2023 Contracted for 5,241,586 4,412,522 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
Schedule of material related party relationship | Name of party Relationship STT GDC Principal ordinary shareholder of the Company STT Singapore DC Pte. Ltd. Subsidiary of STT GDC STT DEFU 2 Pte. Ltd. Subsidiary of STT GDC OnePro Cloud Inc. Entity over which the Company has significant influence |
Schedule of major transactions with related parties | Years ended December 31, 2021 2022 2023 Commission income (Note i) STT Singapore DC Pte. Ltd. 546 564 562 STT DEFU 2 Pte. Ltd. 464 478 514 1,010 1,042 1,076 Purchase of debt securities (Note ii) OnePro Cloud Inc. — 2,840 — Interest income of convertible bonds (Note ii) OnePro Cloud Inc. — 75 148 |
Schedule of major balances with related parties | As of December 31, 2022 2023 Amount due from a related party: (Note ii) OnePro Cloud Inc. 2,860 3,060 Amount due to related parties: (Note i) STT Singapore DC Pte. Ltd. 8,395 8,300 STT DEFU 2 Pte. Ltd. 8,600 8,804 16,995 17,104 Note i: During the year ended December 31, 2021, the Company recognized RMB546 and RMB464, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB45,345 and RMB39,818, respectively. As of December 31, 2021, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables. During the year ended December 31, 2022, the Company recognized RMB564 and RMB478, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB42,792 and RMB43,896, respectively. As of December 31, 2022, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables. During the year ended December 31, 2023, the Company recognized RMB562 and RMB514, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB42,546 and RMB47,276, respectively. As of December 31, 2023, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables. These amounts due to related parties are trade in nature and are settled on a recurring basis. Note ii: On September 2, 2022, the Company subscribed convertible bonds of US$400 thousand issued by OnePro Cloud Inc. The convertible bond has a term of 12 months with interest rate of 8% per annum and is convertible into Series A Preferred Shares of OnePro Cloud Inc. at the option of holders under certain conditions. |
PARENT ONLY FINANCIAL INFORMA_2
PARENT ONLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PARENT ONLY FINANCIAL INFORMATION | |
Schedule of condensed financial statements | Condensed Balance Sheets As of December 31, 2022 2023 Assets Current assets Cash 760,716 223,533 Restricted cash 20,402 — Prepaid expenses 9,698 737 Loans and amounts due from subsidiaries and consolidated VIEs, current — 1,082,359 Other current assets 2,422 3,939 Total current assets 793,238 1,310,568 Non-current assets Investment, loans and amounts due from subsidiaries and consolidated VIEs, non-current 30,891,361 27,417,363 Other non-current assets 184 73 Total non-current assets 30,891,545 27,417,436 Total assets 31,684,783 28,728,004 Liabilities, Mezzanine Equity and Shareholders’ Equity Current liabilities Short-term borrowings 1,045,252 — Convertible bonds payable, current 2,083,829 — Accounts payable 1,188 3,810 Accrued expenses and other payables 49,670 134,090 Due to subsidiaries 141,798 197,112 Total current liabilities 3,321,737 335,012 Non-current liabilities Convertible bonds payable 4,294,985 8,434,766 Total non-current liabilities 4,294,985 8,434,766 Total liabilities 7,616,722 8,769,778 Mezzanine equity Redeemable preferred shares (US$0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2022 and 2023; Redemption value of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively; Liquidation preference of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively) 1,047,012 1,064,766 Total mezzanine equity 1,047,012 1,064,766 Shareholders’ equity Ordinary shares (US $0.00005 par value; 2,002,000,000 and 3,500,000,000 shares authorized as of December 31, 2022 and 2023, respectively; 1,456,842,655 and 1,480,842,655 Class A ordinary shares issued and outstanding as of December 31, 2022 and 2023 , respectively; 67,590,336 and 43,590,336 Class B ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively) 516 516 Additional paid-in capital 29,048,598 29,337,095 Accumulated other comprehensive loss (848,360) (974,393) Accumulated deficit (5,179,705) (9,469,758) Total shareholders’ equity 23,021,049 18,893,460 Commitments and contingencies Total liabilities, mezzanine equity and shareholders’ equity 31,684,783 28,728,004 Condensed Statements of Operations Years ended December 31, 2021 2022 2023 Net revenue — 13,852 6,776 Cost of revenue (116,151) (102,565) (121,592) Gross loss (116,151) (88,713) (114,816) Operating expenses Selling and marketing expenses (54,768) (42,647) (45,242) General and administrative expenses (285,077) (232,832) (230,744) Research and development expenses (8,096) (5,294) (9,546) Loss from operations (464,092) (369,486) (400,348) Other income (expenses): Interest income 25,215 5,593 73,008 Interest expenses (95,313) (207,510) (261,152) Equity in loss of subsidiaries and consolidated VIEs (653,251) (697,277) (3,700,241) Others, net 223 (210) (469) Loss before income taxes (1,187,218) (1,268,890) (4,289,202) Income tax expenses — — (851) Net loss (1,187,218) (1,268,890) (4,290,053) Condensed Statements of Comprehensive Loss Years ended December 31, 2021 2022 2023 Net loss (1,187,218) (1,268,890) (4,290,053) Other comprehensive loss: Foreign currency translation adjustments, net of nil tax (159,551) (249,174) (126,033) Comprehensive loss (1,346,769) (1,518,064) (4,416,086) Condensed Statements of Cash Flows Years ended December 31, 2021 2022 2023 Operating activities: Net cash used in operating activities (83,019) (68,391) (68,805) Investing activities: Investment, loans and advances to subsidiaries (9,935,432) (6,312,513) (1,285,317) Net cash used in investing activities (9,935,432) (6,312,513) (1,285,317) Financing activities: Proceeds from short-term borrowings 3,187,850 4,218,790 — Repayment of short-term borrowings — (6,555,105) (1,042,785) Payment of issuance cost and commitment cost of debts (40,645) (26,465) (78,989) Proceeds from exercise of stock options 2,082 — — Proceeds from issuance of convertible bonds — 3,917,036 3,926,667 Repayment of convertible bonds — — (2,128,311) Payment of redeemable preferred shares dividends (49,221) (51,578) (53,923) Net cash provided by financing activities 3,100,066 1,502,678 622,659 Effect of exchange rate changes on cash and restricted cash (160,320) 425,800 173,878 Net decrease in cash and restricted cash (7,078,705) (4,452,426) (557,585) Cash and restricted cash at beginning of year 12,312,249 5,233,544 781,118 Cash and restricted cash at end of year 5,233,544 781,118 223,533 Supplemental disclosures of cash flow information Interest paid 38,243 143,847 144,095 Supplemental disclosures of non-cash investing and financing activities Settlement of liability-classified restricted share award 11,147 13,719 12,914 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 director | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
VIEs financial information | ||||
Percent of equity interest which has option to acquire | 100% | |||
Related Party [Member] | Shareholders of Management HoldCo | ||||
VIEs financial information | ||||
Loans | ¥ 1,000 | |||
GDS Beijing and GDS Shanghai | ||||
VIEs financial information | ||||
Ownership transferred (as a percent) | 100% | |||
Number of directors replacing prior sole director | director | 3 | |||
VIEs | ||||
VIEs financial information | ||||
Costs for outsourcing and other services provided by other consolidated entities within the Company | 7,312,771 | ¥ 6,336,874 | ¥ 5,160,638 | |
VIEs | Related Party [Member] | Management HoldCo | ||||
VIEs financial information | ||||
Loans | ¥ 310,100 | |||
Right of GDS Investment Company to require repayment of the loans, prior notice period | 30 days |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial statement balances and amounts of the VIEs and their subsidiaries (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current assets | |||
Cash | ¥ 7,710,711 | ¥ 8,608,131 | |
Restricted cash | 42,135 | 158,075 | |
Accounts receivable, net of allowance for credit losses | 2,545,913 | 2,406,025 | |
VAT recoverable | 214,385 | 164,743 | |
Prepaid expenses | 174,949 | 186,807 | |
Other current assets | 295,560 | 427,295 | |
Total current assets | 10,983,653 | 11,951,076 | |
Property and equipment, net | 47,499,494 | 46,916,628 | |
Intangible assets, net | 688,550 | 1,047,709 | |
Operating lease right-of-use assets | 5,436,288 | 5,633,946 | |
Deferred tax assets | 289,847 | 228,999 | |
Restricted cash | 165,086 | 115,860 | |
VAT recoverable | 1,399,844 | 1,155,586 | |
Other non-current assets | 885,035 | 664,643 | |
Total assets | 74,446,690 | 74,813,954 | |
Current liabilities | |||
Short-term borrowings and current portion of long-term borrowings | 2,833,953 | 3,623,967 | |
Accounts payable | 3,424,937 | 3,092,884 | |
Accrued expenses and other payables | 1,198,451 | 1,016,961 | |
Deferred revenue | 119,885 | 156,130 | |
Operating lease liabilities, current | 180,403 | 175,749 | |
Finance lease and other financing obligations, current | 547,847 | 453,855 | |
Total current liabilities | 8,305,476 | 10,603,375 | |
Long-term borrowings, excluding current portion | 26,706,256 | 23,518,058 | |
Operating lease liabilities, non-current | 1,395,981 | 1,617,986 | |
Finance lease and other financing obligations, non-current | 7,894,185 | 8,916,266 | |
Deferred tax liabilities | 1,282,484 | 1,410,376 | |
Other long-term liabilities | 303,739 | 268,253 | |
Total liabilities | 54,322,887 | 50,629,299 | |
Short-term borrowings | 264,603 | 264,004 | |
Net revenue, net income, operating, investing and financing cash flows | |||
Net revenue | 9,956,501 | 9,325,631 | ¥ 7,818,681 |
Net income (loss) | (4,285,393) | (1,266,118) | (1,191,213) |
Net cash provided by operating activities | 2,065,257 | 2,858,067 | 1,201,363 |
Net cash used in investing activities | (6,326,187) | (11,274,884) | (13,691,538) |
Net cash used in financing activities | 3,142,494 | 4,856,318 | 8,119,155 |
VIEs | |||
Current assets | |||
Cash | 2,451,473 | 2,326,332 | |
Restricted cash | 1,345 | ||
Accounts receivable, net of allowance for credit losses | 2,458,297 | 2,371,362 | |
VAT recoverable | 134,595 | 79,163 | |
Prepaid expenses | 36,777 | 76,557 | |
Other current assets | 108,015 | 126,385 | |
Total current assets | 5,190,502 | 4,979,799 | |
Property and equipment, net | 2,030,013 | 2,441,858 | |
Intangible assets, net | 66,474 | 124,691 | |
Operating lease right-of-use assets | 152,689 | 186,795 | |
Deferred tax assets | 61,549 | 38,348 | |
Restricted cash | 29,680 | 32,621 | |
VAT recoverable | 29,280 | 26,087 | |
Other non-current assets | 144,599 | 148,787 | |
Total assets | 7,704,786 | 7,978,986 | |
Current liabilities | |||
Amounts due to GDS Holdings and its non-VIE subsidiaries, net | 4,176,728 | 4,302,245 | |
Total liabilities | 7,158,912 | 7,425,215 | |
Net revenue, net income, operating, investing and financing cash flows | |||
Net revenue | 9,489,505 | 8,958,853 | 7,516,345 |
Net income (loss) | (7,897) | 223,925 | 112,257 |
Net cash provided by operating activities | 235,448 | 1,533,548 | 744,493 |
Net cash used in investing activities | (86,336) | (143,796) | (205,041) |
Net cash used in financing activities | (25,567) | (369,324) | ¥ (561,101) |
VIEs | Accounts receivable | |||
Current liabilities | |||
Assets pledged | 82,930 | 66,503 | |
VIEs | Other non-current assets | |||
Current liabilities | |||
Assets pledged | 5,876 | 9,337 | |
VIEs | Other current assets | |||
Current liabilities | |||
Assets pledged | 12,646 | 0 | |
VIEs | Property and equipment, net | |||
Current liabilities | |||
Assets pledged | 39,152 | 45,572 | |
VIEs | Third party | |||
Current liabilities | |||
Short-term borrowings and current portion of long-term borrowings | 435,767 | 258,200 | |
Accounts payable | 536,177 | 493,332 | |
Accrued expenses and other payables | 189,245 | 235,388 | |
Deferred revenue | 108,496 | 151,050 | |
Operating lease liabilities, current | 40,267 | 41,898 | |
Finance lease and other financing obligations, current | 39,117 | 33,398 | |
Total current third-party liabilities | 1,349,069 | 1,213,266 | |
Long-term borrowings, excluding current portion | 542,023 | 721,387 | |
Operating lease liabilities, non-current | 99,806 | 134,684 | |
Finance lease and other financing obligations, non-current | 894,318 | 931,580 | |
Deferred tax liabilities | 44,490 | 69,831 | |
Other long-term liabilities | 52,478 | 52,222 | |
Total third-party liabilities | 2,982,184 | 3,122,970 | |
VIEs | Borrowings guaranteed by GDS Holdings Limited | |||
Current liabilities | |||
Long-term borrowings of the consolidated VIEs | ¥ 710,874 | ¥ 885,854 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fulfilment costs (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other non-current assets | ||
Capitalized fulfilment cost | ¥ 47,400 | ¥ 47,400 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details) | Dec. 31, 2023 |
Buildings | |
Property and equipment | |
Estimated useful life (in years) | 30 years |
Machinery | Minimum | |
Property and equipment | |
Estimated useful life (in years) | 10 years |
Machinery | Maximum | |
Property and equipment | |
Estimated useful life (in years) | 20 years |
Other equipment | Minimum | |
Property and equipment | |
Estimated useful life (in years) | 3 years |
Other equipment | Maximum | |
Property and equipment | |
Estimated useful life (in years) | 5 years |
Furniture and office equipment | Minimum | |
Property and equipment | |
Estimated useful life (in years) | 3 years |
Furniture and office equipment | Maximum | |
Property and equipment | |
Estimated useful life (in years) | 5 years |
Vehicles | |
Property and equipment | |
Estimated useful life (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Asset retirement costs (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Activity of the asset retirement obligation liability | |||
Asset retirement obligations at beginning of the year | ¥ 111,811 | ¥ 104,883 | ¥ 76,909 |
Additions | 602 | 4,382 | 22,745 |
Accretion expense | 6,805 | 6,366 | 6,227 |
Foreign exchange impact | 32 | 158 | |
Derecognition upon disposal of a subsidiary | (1,360) | ||
Revision in estimated cash flows as result of lease contracts modifications | (9,258) | ||
Settlement | (2,103) | (3,978) | (998) |
Asset retirement obligations at end of the year | ¥ 106,529 | ¥ 111,811 | ¥ 104,883 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Customer Contracts | Minimum [Member] | |
INTANGIBLE ASSETS, NET | |
Weighted-average amortization period (in years) | 5 years |
Customer Contracts | Maximum [Member] | |
INTANGIBLE ASSETS, NET | |
Weighted-average amortization period (in years) | 15 years |
Licenses | |
INTANGIBLE ASSETS, NET | |
Weighted-average amortization period (in years) | 20 years |
Software | |
INTANGIBLE ASSETS, NET | |
Weighted-average amortization period (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Prepaid land use rights (Details) - Prepaid land use rights, net | Dec. 31, 2023 |
Minimum | |
Prepaid land use rights | |
Amortization based on remaining terms (in years) | 35 years |
Maximum | |
Prepaid land use rights | |
Amortization based on remaining terms (in years) | 38 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Impairment (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Impairment losses for goodwill | ¥ 0 | ¥ 0 | ¥ 0 |
Impairment losses of long-lived assets | ¥ 3,013,416 | ¥ 12,759 | ¥ 0 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Value-added-tax ("VAT") (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Value-added-tax ("VAT") | ||
VAT recoverable | ¥ 214,385 | ¥ 164,743 |
VAT recoverable | 1,399,844 | 1,155,586 |
Current assets | ||
Value-added-tax ("VAT") | ||
VAT recoverable | 214,385 | 164,743 |
Noncurrent assets | ||
Value-added-tax ("VAT") | ||
VAT recoverable | 1,399,844 | 1,155,586 |
Accrued expenses and other payables | ||
Value-added-tax ("VAT") | ||
VAT payables | ¥ 17,785 | ¥ 20,297 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Maximum | Consulting services | |
Revenue recognition | |
Contract service period | 1 year |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Research and development and advertising costs, Capitalized interest and Debt issuance cost (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and development and advertising costs | |||
Advertising costs | ¥ 9,400 | ¥ 8,639 | ¥ 15,043 |
Capitalized interest | |||
Total interest costs | 2,374,570 | 2,084,565 | 1,805,434 |
Less: interest costs capitalized | (337,591) | (196,678) | (150,697) |
Interest expenses | 2,036,979 | 1,887,887 | ¥ 1,654,737 |
Debt issuance costs | |||
Unamortised debt issuance costs | ¥ 268,441 | ¥ 186,313 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee benefits (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Minimum | |
Employee benefits | |
Employer contribution (as a percent) | 28% |
Maximum | |
Employee benefits | |
Employer contribution (as a percent) | 40% |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Government Subsidies (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Government grants | |||
Reduction of cost of revenue | ¥ 1,262 | ¥ 521 | |
Reduction of general and administrative expenses | ¥ 2,629 | ||
Reduction of interest expenses | 4,310 | ||
Government grants | 84,511 | 95,581 | 88,209 |
Total | ¥ 90,083 | ¥ 96,102 | ¥ 90,838 |
Government Assistance, Statement of Income or Comprehensive Income [Extensible Enumeration] | Government grants | Government grants | Government grants |
Property and equipment, net | |||
Government grants | |||
Deferred government grants | ¥ 8,658 | ¥ 7,299 | |
Noncurrent liabilities | |||
Government grants | |||
Deferred government grants | 78,494 | ¥ 30,741 | |
Accrued expenses and other payables | |||
Government grants | |||
Deferred government grants | ¥ 13 |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency translation and foreign currency risks (Details) € in Thousands, ¥ in Thousands, ¥ in Thousands, Rp in Thousands, RM in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 HKD ($) | Dec. 31, 2023 JPY (¥) | Dec. 31, 2023 EUR (€) | Dec. 31, 2023 SGD ($) | Dec. 31, 2023 MYR (RM) | Dec. 31, 2023 IDR (Rp) | Dec. 31, 2022 CNY (¥) |
RMB | |||||||||
Cash and restricted cash | ¥ | ¥ 7,013,932 | ¥ 6,601,979 | |||||||
USD | |||||||||
Cash and restricted cash | 603,370 | $ 85,189 | |||||||
HKD | |||||||||
Cash and restricted cash | 130,946 | $ 144,501 | |||||||
JPY | |||||||||
Cash and restricted cash | 1,031 | ¥ 20,542 | |||||||
EUR | |||||||||
Cash and restricted cash | 1,150 | € 146 | |||||||
SGD | |||||||||
Cash and restricted cash | 49,105 | $ 9,132 | |||||||
MYR | |||||||||
Cash and restricted cash | 73,502 | RM 47,682 | |||||||
IDR | |||||||||
Cash and restricted cash | 44,896 | Rp 97,388,479 | |||||||
In PRC | RMB | |||||||||
Cash and restricted cash | ¥ | 6,922,573 | ||||||||
In PRC | USD | |||||||||
Cash and restricted cash | 38,502 | ||||||||
In Hong Kong SAR | RMB | |||||||||
Cash and restricted cash | ¥ | 90,741 | ||||||||
In Hong Kong SAR | USD | |||||||||
Cash and restricted cash | 10,173 | ||||||||
In Hong Kong SAR | HKD | |||||||||
Cash and restricted cash | 113,160 | ||||||||
In Hong Kong SAR | JPY | |||||||||
Cash and restricted cash | ¥ | ¥ 20,542 | ||||||||
In Hong Kong SAR | EUR | |||||||||
Cash and restricted cash | € | € 146 | ||||||||
In Singapore | RMB | |||||||||
Cash and restricted cash | ¥ | ¥ 618 | ||||||||
In Singapore | USD | |||||||||
Cash and restricted cash | 8,886 | ||||||||
In Singapore | HKD | |||||||||
Cash and restricted cash | 18 | ||||||||
In Singapore | SGD | |||||||||
Cash and restricted cash | $ 9,132 | ||||||||
In Macau SAR | HKD | |||||||||
Cash and restricted cash | $ 31,323 | ||||||||
In US | USD | |||||||||
Cash and restricted cash | 9 | ||||||||
In Malaysia | USD | |||||||||
Cash and restricted cash | 22,643 | ||||||||
In Malaysia | MYR | |||||||||
Cash and restricted cash | RM | RM 47,682 | ||||||||
In Indonesia | USD | |||||||||
Cash and restricted cash | $ 4,976 | ||||||||
In Indonesia | IDR | |||||||||
Cash and restricted cash | Rp | Rp 97,388,479 |
CASH AND RESTRICTED CASH (Detai
CASH AND RESTRICTED CASH (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
CASH AND RESTRICTED CASH | |||
Cash | ¥ 7,710,711 | ¥ 8,608,131 | |
Restricted cash - current assets | 42,135 | 158,075 | |
Restricted cash | 165,086 | 115,860 | |
Total cash and restricted cash shown in the consolidated statements of cash flows | ¥ 7,917,932 | ¥ 8,882,066 | ¥ 12,026,367 |
CONTRACT BALANCES (Details)
CONTRACT BALANCES (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable, net | |||
Accounts receivable | ¥ 2,585,134 | ¥ 2,426,753 | |
Less: allowance for credit losses | (39,221) | (20,728) | ¥ (12,124) |
Accounts receivable, net | 2,545,913 | 2,406,025 | |
Accounts receivable, net of allowance for credit losses | 2,545,913 | 2,406,025 | |
Movement of the allowance for credit losses | |||
Balance at the beginning of the year | 20,728 | 12,124 | 2,163 |
Allowance made during the year | 18,294 | 7,744 | 10,070 |
Foreign exchange impact | 199 | 860 | (109) |
Balance at the end of the year | 39,221 | 20,728 | 12,124 |
Deferred Revenue | |||
Beginning balance | 185,833 | ||
Increase | 1,735 | ||
Closing balance | 187,568 | 185,833 | |
Deferred revenue expected to be recognized as revenue after one year | 67,683 | 29,703 | |
Revenue recognized from the opening deferred revenue balance | 161,391 | 122,378 | ¥ 104,640 |
Asset pledged as security | Long-term borrowings | |||
Accounts receivable, net | |||
Accounts receivable, net of allowance for credit losses | 1,740,552 | 1,256,289 | |
Asset pledged as security | Finance lease and other financing obligations | |||
Accounts receivable, net | |||
Accounts receivable, net of allowance for credit losses | ¥ 69,264 | ¥ 145,764 |
CONTRACT BALANCES - Remaining p
CONTRACT BALANCES - Remaining performance obligations (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2023 CNY (¥) | |
CONTRACT BALANCES | |
Revenue expected to be recognized | ¥ 15,260,907 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
CONTRACT BALANCES | |
Revenue expected to be recognized | 2,249,946 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
CONTRACT BALANCES | |
Revenue expected to be recognized | 2,064,811 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
CONTRACT BALANCES | |
Revenue expected to be recognized | 1,946,213 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
CONTRACT BALANCES | |
Revenue expected to be recognized | 1,618,690 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
CONTRACT BALANCES | |
Revenue expected to be recognized | 1,245,391 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | |
CONTRACT BALANCES | |
Revenue expected to be recognized | ¥ 6,135,856 |
Minimum | |
CONTRACT BALANCES | |
Period over which remaining performance obligations are expected to be recognized as revenue | 1 year |
Maximum | |
CONTRACT BALANCES | |
Period over which remaining performance obligations are expected to be recognized as revenue | 14 years |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
At cost: | ||
Property and equipment | ¥ 51,672,959 | ¥ 45,370,990 |
Less: Accumulated depreciation | (12,315,886) | (9,269,587) |
Property and equipment net excluding construction in process | 39,357,073 | 36,101,403 |
Construction in progress | 10,958,497 | 10,827,984 |
Property and equipment | 50,315,570 | 46,929,387 |
Less: Impairment losses | (2,816,076) | (12,759) |
Property and equipment, net | 47,499,494 | 46,916,628 |
Land | ||
At cost: | ||
Property and equipment | 3,440,140 | 3,302,148 |
Buildings | ||
At cost: | ||
Property and equipment | 16,439,068 | 13,847,692 |
Data center equipment | ||
At cost: | ||
Property and equipment | 22,958,565 | 19,603,839 |
Leasehold improvement | ||
At cost: | ||
Property and equipment | 8,706,161 | 8,444,282 |
Furniture and office equipment | ||
At cost: | ||
Property and equipment | 123,732 | 167,410 |
Vehicles | ||
At cost: | ||
Property and equipment | ¥ 5,293 | ¥ 5,619 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Acquired under finance leases and other financing arrangement (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying amounts | ||
Finance leases, net | ¥ 8,036,081 | ¥ 9,906,404 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Depreciation expense | |||
Depreciation of property and equipment | ¥ 3,204,351 | ¥ 2,947,200 | ¥ 2,399,451 |
Costs of revenue | |||
Depreciation expense | |||
Depreciation of property and equipment | 2,999,008 | 2,722,169 | 2,264,620 |
General and administrative expenses | |||
Depreciation expense | |||
Depreciation of property and equipment | 200,479 | 218,567 | 129,128 |
Research and development expenses | |||
Depreciation expense | |||
Depreciation of property and equipment | ¥ 4,864 | ¥ 6,464 | ¥ 5,703 |
PROPERTY AND EQUIPMENT, NET -_2
PROPERTY AND EQUIPMENT, NET - Additional information (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, net | ¥ 47,499,494 | ¥ 46,916,628 |
Asset pledged as security | Bank loans and other financing obligations | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, net | ¥ 14,837,993 | ¥ 12,721,652 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |||
Intangible assets, gross | ¥ 1,606,910 | ¥ 1,658,046 | |
Less: accumulated amortization | (801,612) | (610,337) | |
Less: impairment losses | (116,748) | ||
Intangible assets, net | 688,550 | 1,047,709 | |
Amortization of intangible assets | 314,780 | 235,292 | ¥ 192,486 |
Estimated future amortization expense | |||
2024 | 212,902 | ||
2025 | 189,909 | ||
2026 | 169,440 | ||
2027 | 43,686 | ||
2028 | 16,899 | ||
Thereafter | 55,714 | ||
Customer contracts | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets, gross | 1,518,587 | 1,641,900 | |
Software | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets, gross | 72,077 | ||
Licenses | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets, gross | 15,782 | 15,782 | |
Others | |||
INTANGIBLE ASSETS, NET | |||
Intangible assets, gross | ¥ 464 | ¥ 364 |
PREPAID LAND USE RIGHTS (Detail
PREPAID LAND USE RIGHTS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
PREPAID LAND USE RIGHTS | |||
Prepaid land use rights | ¥ 28,246 | ¥ 28,246 | |
Less: accumulated amortization | (5,858) | (5,244) | |
Prepaid land use rights, net | 22,388 | 23,002 | |
Amortization of prepaid land use rights | 614 | 6,582 | ¥ 24,961 |
Asset pledged as security | Long-term borrowings | |||
PREPAID LAND USE RIGHTS | |||
Prepaid land use rights, net | ¥ 17,262 | ¥ 17,733 |
ACQUISITIONS AND GOODWILL - Mov
ACQUISITIONS AND GOODWILL - Movement of goodwill (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Movement of goodwill | ||
Balance at the beginning of the year | ¥ 7,076,505 | ¥ 7,076,505 |
Balance at end of year | ¥ 7,076,505 | ¥ 7,076,505 |
ACQUISITIONS AND GOODWILL - Equ
ACQUISITIONS AND GOODWILL - Equity Interest acquired (Details) ¥ in Thousands | 12 Months Ended | ||||
Dec. 17, 2021 CNY (¥) item | Apr. 30, 2021 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
ACQUISITIONS AND GOODWILL | |||||
Net revenue | ¥ 9,956,501 | ¥ 9,325,631 | ¥ 7,818,681 | ||
Net income (loss) | ¥ (4,285,393) | (1,266,118) | (1,191,213) | ||
Cash consideration | 1,196,758 | 3,451,941 | |||
Fair value of consideration | 5,230,362 | ||||
Effective settlement of pre-existing relationships upon consolidation | 20,000 | ||||
Beijing 15 and Beijing 16 Acquisition | |||||
ACQUISITIONS AND GOODWILL | |||||
Net revenue | 354,281 | ||||
Net income (loss) | (23,663) | ||||
Cash consideration | ¥ 3,176,354 | ||||
Gain from purchase price adjustment | ¥ 205,000 | ¥ 7,007 | |||
Beijing 20, Beijing 21, Beijing 22 and Beijing 23 Acquisition | |||||
ACQUISITIONS AND GOODWILL | |||||
Percentage of equity interest acquired | 90% | ||||
Cash consideration | ¥ 1,303,714 | ||||
Number of data center projects | item | 4 |
ACQUISITIONS AND GOODWILL - All
ACQUISITIONS AND GOODWILL - Allocation of purchase price (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Business Combinations, Allocation of Purchase Price | |||
Cash consideration | ¥ 1,196,758 | ¥ 3,451,941 | |
Fair value of consideration | 5,230,362 | ||
Effective settlement of pre-existing relationships upon consolidation | 20,000 | ||
Other net assets acquired | (256,650) | ||
Identifiable intangible assets | (689,800) | ||
Deferred tax liabilities | 159,592 | ||
Total identifiable net assets | (786,858) | ||
Goodwill | 7,076,505 | 7,076,505 | ¥ 7,076,505 |
Property and equipment | 2,974,715 | ||
Accounts payable | 412,380 | ||
Accounts receivable | 224,307 | ||
Short-term borrowings | 461,494 | ||
Long-term borrowings | 840,000 | ||
Finance lease and other financing obligations, current and non-current | 1,463,851 | ||
Asset acquisitions | |||
Non-controlling interests recognized upon these asset acquisitions | ¥ 0 | 56,519 | ¥ 0 |
Customer contract | |||
Business Combinations, Allocation of Purchase Price | |||
Identifiable intangible assets | ¥ (689,800) | ||
Customer contract | Minimum | |||
Business Combinations, Allocation of Purchase Price | |||
Amortization based on remaining terms (in years) | 5 years 8 months 12 days | ||
Customer contract | Maximum | |||
Business Combinations, Allocation of Purchase Price | |||
Amortization based on remaining terms (in years) | 7 years | ||
Various Business Combinations | |||
Business Combinations, Allocation of Purchase Price | |||
Goodwill | ¥ 4,463,504 | ||
Consideration | |||
Business Combinations, Allocation of Purchase Price | |||
Cash consideration | ¥ 768,107 |
ACQUISITIONS AND GOODWILL - Con
ACQUISITIONS AND GOODWILL - Consideration (Details) - Consideration - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Settlement of consideration | ¥ 19,888 | ¥ 1,460,814 | ¥ 4,221,171 |
Remaining consideration payable | ¥ 125,457 | ¥ 151,620 |
ACQUISITIONS AND GOODWILL - Ass
ACQUISITIONS AND GOODWILL - Asset Acquisitions (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Asset Acquisition [Line Items] | |||
Non-controlling interests recognized upon these asset acquisitions | ¥ 0 | ¥ 0 | ¥ 56,519 |
Additional contingent consideration | 100,000 | ||
Settlement of consideration | ¥ 241,850 | 2,349,732 | ¥ 396,230 |
Settlements term | 3 months | ||
Other payables | |||
Asset Acquisition [Line Items] | |||
Remaining consideration payable for asset acquisitions | ¥ 137,569 | 31,600 | |
Other long-term liabilities | |||
Asset Acquisition [Line Items] | |||
Remaining consideration payable for asset acquisitions | ¥ 7,644 |
LOANS AND BORROWINGS - Total lo
LOANS AND BORROWINGS - Total loans and borrowings (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Loans and borrowings | ||
Short-term borrowings | ¥ 674,010 | ¥ 1,652,196 |
Current portion of long-term borrowings | 2,159,943 | 1,971,771 |
Sub-total | 2,833,953 | 3,623,967 |
Long-term borrowings, excluding current portion | 26,706,256 | 23,518,058 |
Total loans and borrowings | ¥ 29,540,209 | ¥ 27,142,025 |
LOANS AND BORROWINGS - Type of
LOANS AND BORROWINGS - Type of short-term borrowings (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Short-term borrowings by type | ||
Unsecured short-term loans and borrowings | ¥ 409,407 | ¥ 1,388,192 |
Secured short-term loans and borrowings | 264,603 | 264,004 |
Short-term borrowings | ¥ 674,010 | ¥ 1,652,196 |
LOANS AND BORROWINGS - Short-te
LOANS AND BORROWINGS - Short-term borrowings secured (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
LOANS AND BORROWINGS | ||
Property and equipment, net | ¥ 47,499,494 | ¥ 46,916,628 |
Secured short-term loans and borrowings | ¥ 264,603 | ¥ 264,004 |
Weighted average interest rate at point in time | 4.66% | 7.94% |
VIEs | ||
LOANS AND BORROWINGS | ||
Property and equipment, net | ¥ 2,030,013 | ¥ 2,441,858 |
Asset pledged as security | Short-term borrowings | ||
LOANS AND BORROWINGS | ||
Property and equipment, net | ¥ 213,951 | ¥ 245,543 |
LOANS AND BORROWINGS - Long-ter
LOANS AND BORROWINGS - Long-term borrowings (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Long-term borrowings by type | ||
Unsecured long-term loans and borrowings | ¥ 30,085 | |
Secured long-term loans and borrowings | 28,836,114 | ¥ 25,489,829 |
Long-term borrowings | ¥ 28,866,199 | ¥ 25,489,829 |
LOANS AND BORROWINGS - Long-t_2
LOANS AND BORROWINGS - Long-term borrowings secured (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
LOANS AND BORROWINGS | ||
Accounts receivable, net of allowance for credit losses | ¥ 2,545,913 | ¥ 2,406,025 |
Other current assets | 295,560 | 427,295 |
Property and equipment, net | 47,499,494 | 46,916,628 |
Prepaid land use rights, net | 22,388 | 23,002 |
Operating lease right-of-use assets, net | 5,436,288 | 5,633,946 |
Other non-current assets | 885,035 | 664,643 |
Total assets | ¥ 74,446,690 | ¥ 74,813,954 |
Weighted average interest rates of long-term borrowings | 5.17% | 5.44% |
Asset pledged as security | Long-term borrowings | ||
LOANS AND BORROWINGS | ||
Accounts receivable, net of allowance for credit losses | ¥ 1,740,552 | ¥ 1,256,289 |
Other current assets | 97,307 | 97,049 |
Property and equipment, net | 13,201,479 | 11,103,541 |
Prepaid land use rights, net | 17,262 | 17,733 |
Operating lease right-of-use assets, net | 3,681,166 | 3,607,506 |
Other non-current assets | 24,272 | 23,912 |
Total assets | 18,762,038 | 16,106,030 |
VIEs | ||
LOANS AND BORROWINGS | ||
Accounts receivable, net of allowance for credit losses | 2,458,297 | 2,371,362 |
Other current assets | 108,015 | 126,385 |
Property and equipment, net | 2,030,013 | 2,441,858 |
Operating lease right-of-use assets, net | 152,689 | 186,795 |
Other non-current assets | 144,599 | 148,787 |
Total assets | ¥ 7,704,786 | ¥ 7,978,986 |
LOANS AND BORROWINGS - Aggregat
LOANS AND BORROWINGS - Aggregate maturities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Twelve months ending December 31, | ||
2024 | ¥ 2,159,943 | |
2025 | 2,625,548 | |
2026 | 3,886,047 | |
2027 | 5,275,278 | |
2028 | 4,446,532 | |
Thereafter | 10,472,851 | |
Long-term borrowings | ¥ 28,866,199 | ¥ 25,489,829 |
LOANS AND BORROWINGS - Total wo
LOANS AND BORROWINGS - Total working capital and project financing credit (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
LOANS AND BORROWINGS | ||
Outstanding loans (net of debt issuance costs) | ¥ 674,010 | ¥ 1,652,196 |
Outstanding loans (net of debt issuance costs) | 28,866,199 | 25,489,829 |
Debt issuance costs | 268,441 | ¥ 186,313 |
Credit facilities | ||
LOANS AND BORROWINGS | ||
Total working capital and project financing credit facilities | 38,069,588 | |
Unused amount | 8,410,702 | |
Loan drew down | 29,658,886 | |
Outstanding loans (net of debt issuance costs) | 619,370 | |
Outstanding loans (net of debt issuance costs) | 28,836,114 | |
Credit facilities | Short-term borrowing | ||
LOANS AND BORROWINGS | ||
Debt issuance costs | 10,032 | |
Credit facilities | Long-term borrowing | ||
LOANS AND BORROWINGS | ||
Debt issuance costs | ¥ 193,370 | |
Minimum | ||
LOANS AND BORROWINGS | ||
Terms of secured loan agreements with various financial institutions for project development and working capital purpose | 1 year | |
Maximum | ||
LOANS AND BORROWINGS | ||
Terms of secured loan agreements with various financial institutions for project development and working capital purpose | 15 years |
LOANS AND BORROWINGS - Particul
LOANS AND BORROWINGS - Particulars of secured long-term loans and borrowings (Details) ¥ in Thousands, RM in Millions | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 MYR (RM) |
Secured long-term loans and borrowings | ||
Financial covenants, fails to repay any financial indebtedness in an aggregate amount | ¥ 50,000 | RM 35 |
Onshore Project Loan Facilities | ||
Secured long-term loans and borrowings | ||
Early repayment if STT GDC PTe. Ltd. ceases to own and control, the percentage of equity interest in the Company | 25% | 25% |
The Company and GDS Investment | Onshore Project Loan Facilities | ||
Secured long-term loans and borrowings | ||
Early repayment requirement, cease control of certain affiliate, percentage | 100% | 100% |
Management Holdco | Onshore Project Loan Facilities | ||
Secured long-term loans and borrowings | ||
Early repayment requirement, cease control of certain affiliate, percentage | 100% | 100% |
GDS Beijing, GDS Suzhou, and Relevant Borrowing Subsidiaries | Onshore Project Loan Facilities | ||
Secured long-term loans and borrowings | ||
Early repayment if cease to own and control percentage of the equity interest in the borrowing subsidiaries | 100% | 100% |
Related Party | GDS Holdings Limited | Offshore Project Loan Facilities | ||
Secured long-term loans and borrowings | ||
Early repayment if cease to own and control percentage of the equity interest in the borrowing subsidiaries | 50.10% | 50.10% |
Early repayment if cease to own and control beneficial ownership percentage of the issued share capital interest, directly or indirectly, in the borrowing subsidiaries | 40% | 40% |
Related Party | Digital Land Holdings Limited | Offshore Project Loan Facilities | ||
Secured long-term loans and borrowings | ||
Early repayment if cease to own and control percentage of the equity interest in the borrowing subsidiaries | 100% | 100% |
CONVERTIBLE BONDS PAYABLE - Con
CONVERTIBLE BONDS PAYABLE - Convertible notes payable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CONVERTIBLE BONDS PAYABLE | ||
Total | ¥ 8,434,766 | ¥ 6,378,814 |
Convertible bonds payable, current | 2,083,829 | |
Convertible bonds payable | 8,434,766 | 4,294,985 |
Convertible Bonds due 2025 | ||
CONVERTIBLE BONDS PAYABLE | ||
Total | 566 | 2,083,829 |
Convertible Bonds due 2029 | ||
CONVERTIBLE BONDS PAYABLE | ||
Total | 4,373,386 | ¥ 4,294,985 |
Convertible Bonds due 2030 | ||
CONVERTIBLE BONDS PAYABLE | ||
Total | ¥ 4,060,814 |
CONVERTIBLE BONDS PAYABLE - Int
CONVERTIBLE BONDS PAYABLE - Interest expenses related to the convertible notes (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONVERTIBLE BONDS PAYABLE | |||
Contractual interest | ¥ 202,776 | ¥ 48,996 | ¥ 38,720 |
Amortization of issuance cost | 20,015 | 16,813 | 11,617 |
Total interest expenses | ¥ 222,791 | ¥ 65,809 | ¥ 50,337 |
CONVERTIBLE BONDS PAYABLE (Deta
CONVERTIBLE BONDS PAYABLE (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||||
Jan. 20, 2023 $ / shares | Mar. 08, 2022 $ / shares | Jun. 05, 2018 USD ($) $ / shares | Dec. 31, 2020 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Jun. 01, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | |
CONVERTIBLE BONDS PAYABLE | ||||||||||
Debt issuance costs | ¥ | ¥ 268,441 | ¥ 186,313 | ||||||||
Denominations for repurchase of Notes | $ 1 | |||||||||
Additional paid-in capital | ||||||||||
CONVERTIBLE BONDS PAYABLE | ||||||||||
Conversion of convertible bonds | ¥ | ¥ 65 | |||||||||
ADS | ||||||||||
CONVERTIBLE BONDS PAYABLE | ||||||||||
Conversion rate per US$1,000 principal amount | 40.8163 | 20 | ||||||||
Basis of issuance of shares for debt conversion (per ADS) | $ / shares | $ 24.50 | $ 50 | ||||||||
Convertible Bonds due 2025 | ||||||||||
CONVERTIBLE BONDS PAYABLE | ||||||||||
Principal amount | $ 300,000 | 80 | $ 299,990 | |||||||
Debt issuance costs | $ 8,948 | |||||||||
Interest per annum (as a percent) | 2% | |||||||||
Redeemable under a tax redemption (as a percent) | 100% | |||||||||
Principal amount converted | $ 10 | |||||||||
Convertible Bonds due 2025 | ||||||||||
CONVERTIBLE BONDS PAYABLE | ||||||||||
Principal amount | $ 80 | |||||||||
Debt instrument, repurchased face amount | ¥ | ¥ 299,910 | |||||||||
Effective interest rate | 2.03% | 2.03% | 2.65% | 2.65% | ||||||
Convertible Bonds due 2025 | Non Current Liability | ||||||||||
CONVERTIBLE BONDS PAYABLE | ||||||||||
Principal amount | ¥ | ¥ 566 | |||||||||
Convertible Bonds due 2025 | ADS | ||||||||||
CONVERTIBLE BONDS PAYABLE | ||||||||||
Conversion rate per US$1,000 principal amount | 19.3865 | |||||||||
Basis of issuance of shares for debt conversion (per ADS) | $ / shares | $ 51.58 |
CONVERTIBLE BONDS PAYABLE - C_2
CONVERTIBLE BONDS PAYABLE - Convertible Bonds due 2029 and 2030 (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jan. 20, 2023 USD ($) $ / shares | Mar. 08, 2022 USD ($) $ / shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
CONVERTIBLE BONDS PAYABLE | |||||
Debt issuance costs | ¥ | ¥ 268,441 | ¥ 186,313 | |||
Denominations for repurchase of Notes | $ 1 | ||||
Accrued interests | ¥ | ¥ 135,105 | ¥ 70,251 | |||
ADS | |||||
CONVERTIBLE BONDS PAYABLE | |||||
Basis of issuance of shares for debt conversion (per ADS) | $ / shares | $ 24.50 | $ 50 | |||
Conversion rate per US$1,000 principal amount | 40.8163 | 20 | |||
Convertible Bonds due 2029 | |||||
CONVERTIBLE BONDS PAYABLE | |||||
Principal amount | $ 620,000 | ||||
Debt issuance costs | $ 3,950 | ||||
Interest per annum (as a percent) | 0.25% | ||||
Denominations for repurchase of Notes | 200 | ||||
Integral multiple for repurchase of notes | $ 1 | ||||
Redeemable under a tax redemption (as a percent) | 100% | ||||
Threshold percentage of VWAP for ADS on conversion price for forced conversion | 150% | ||||
Number of trading days considered for calculation of VWAP | 20 days | ||||
Number of consecutive trading days for calculation of VWAP | 30 days | ||||
Threshold period of each consecutive trading days considered for calculation of VWAP | 5 days | ||||
Minimum value of ordinary shares on the Hong Kong Stock Exchange for forced conversion | $ 70,000 | ||||
Effective interest rate | 0.38% | 0.38% | 0.38% | ||
Convertible Bonds due 2030 | |||||
CONVERTIBLE BONDS PAYABLE | |||||
Principal amount | $ 580,000 | ||||
Debt issuance costs | $ 7,934 | ||||
Interest per annum (as a percent) | 4.50% | ||||
Denominations for repurchase of Notes | $ 200 | ||||
Integral multiple for repurchase of notes | $ 1 | ||||
Redeemable under a tax redemption (as a percent) | 100% | ||||
Threshold percentage of VWAP for ADS on conversion price for forced conversion | 200% | ||||
Number of trading days considered for calculation of VWAP | 20 days | ||||
Number of consecutive trading days for calculation of VWAP | 30 days | ||||
Threshold period of each consecutive trading days considered for calculation of VWAP | 5 days | ||||
Minimum value of ordinary shares on the Hong Kong Stock Exchange for forced conversion | $ 30,000 | ||||
Effective interest rate | 4.87% | 4.87% | |||
Convertible bonds | |||||
CONVERTIBLE BONDS PAYABLE | |||||
Accrued interests | ¥ | ¥ 80,467 | ¥ 6,870 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES - Accounts payable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Payable and Accrued Expenses and Other Payables | ||
Accounts payable | ¥ 3,424,937 | ¥ 3,092,884 |
Property and equipment, net | ||
Accounts Payable and Accrued Expenses and Other Payables | ||
Accounts payable | 2,886,045 | 2,574,096 |
Operating expenses | ||
Accounts Payable and Accrued Expenses and Other Payables | ||
Accounts payable | ¥ 538,892 | ¥ 518,788 |
ACCOUNTS PAYABLE AND ACCRUED _4
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES - Accrued expenses and other payables (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES. | ||
Consideration payables for acquisitions | ¥ 263,026 | ¥ 183,220 |
Accrued payroll and welfare benefits | 207,015 | 200,394 |
Accrued interest expenses | 135,105 | 70,251 |
Income tax payable | 166,923 | 202,589 |
Other tax payables | 43,365 | 54,981 |
Accrued debt issuance costs and other financing costs | 32,430 | 52,254 |
Amount due to related parties | 17,104 | 16,995 |
Others | 333,483 | 236,277 |
Total accrued expenses and other payables | ¥ 1,198,451 | ¥ 1,016,961 |
LEASES - Data center buildings
LEASES - Data center buildings and land leases (Details) - Data center buildings and land leases [Member] - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
LEASE | ||
Additional finance lease liability | ¥ 0 | ¥ 460,810 |
Additional operating lease liabilities | ¥ 0 | ¥ 149,879 |
LEASES - Supplemental Informati
LEASES - Supplemental Information Related to Operating Leases (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
LEASES | ||
Operating lease right-of-use assets, gross | ¥ 5,516,880 | ¥ 5,633,946 |
Less: Impairment losses | (80,592) | |
Operating lease right-of-use assets, net | 5,436,288 | 5,633,946 |
Operating lease liabilities, current | 180,403 | 175,749 |
Operating lease liabilities, non-current | ¥ 1,395,981 | ¥ 1,617,986 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Components of lease cost | |||
Finance lease cost:- Amortization of right-of-use assets | ¥ 587,813 | ¥ 619,675 | ¥ 546,437 |
Finance lease cost:- Interest on lease liabilities | 613,909 | 632,183 | 592,835 |
Operating lease cost | 406,620 | 402,514 | 313,752 |
Short-term lease cost | 54,590 | 44,873 | 23,715 |
Variable lease cost (Note) | (4,835) | (47,729) | (786) |
Total lease cost | 1,658,097 | 1,651,516 | 1,475,953 |
Lease concessions granted | 45,291 | ||
Variable lease cost (credit) recognized for certain finance leases with floating interest rate | ¥ 4,835 | ¥ 2,438 | ¥ 786 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information Related to Leases (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | |||
Cash paid for amounts included in measurement of lease liabilities:- Operating cash flows from finance leases | ¥ (501,090) | ¥ (532,323) | ¥ (591,189) |
Cash paid for amounts included in measurement of lease liabilities:- Operating cash flows from operating leases | (283,085) | (244,643) | (236,589) |
Cash paid for amounts included in measurement of lease liabilities:- Financing cash flows from finance leases | (986,888) | (1,138,542) | (265,481) |
Non-cash information on lease liabilities arising from obtaining ROU assets- Finance leases | 16,772 | 264,958 | 25,731 |
Non-cash information on lease liabilities arising from obtaining ROU assets- Operating leases | 28,307 | 151,709 | 368,069 |
Non-cash information on lease liabilities and ROU assets derecognized for termination of leases - Finance Leases | 237,330 | 524,180 | |
Non-cash information on lease liabilities and ROU assets derecognized for termination of leases - Operating Leases | 48,610 | 286,774 | |
Gain on early termination of leases - Finance leases | 39,350 | 33,453 | |
Gain on early termination of leases - Operating leases | 5,412 | 10,445 | |
Cash paid for purchase of land use rights and the related initial direct costs of leases | ¥ 15,900 | ¥ 760,610 | ¥ 875,162 |
Weighted average discount rate - Other financing obligations | 7.58% | 8.18% |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term and Weighted Average Discount Rate for Leases (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
LEASES | ||
Weighted average remaining lease term:- Finance leases | 12 years 8 months 12 days | 13 years 9 months 18 days |
Weighted average remaining lease term:- Operating leases | 12 years | 12 years 9 months 18 days |
Weighted average discount rate:- Finance leases | 6.56% | 6.68% |
Weighted average discount rate:- Operating leases | 6.16% | 5.89% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finance lease obligations | ||
Within 1 year | ¥ 643,795 | ¥ 670,992 |
After 1 year but within 2 years | 671,956 | 666,487 |
After 2 years but within 3 years | 694,746 | 708,642 |
After 3 years but within 4 years | 717,691 | 729,283 |
After 4 years but within 5 years | 668,301 | 753,410 |
After 5 years | 5,718,509 | 6,768,112 |
Total undiscounted lease payments | 9,114,998 | 10,296,926 |
Less: total future interest | (3,070,979) | (3,694,302) |
Present value of lease obligations | 6,044,019 | 6,602,624 |
Other financing obligations | ||
Within 1 year | 354,878 | 330,773 |
After 1 year but within 2 years | 1,336,491 | 1,373,214 |
After 2 years but within 3 years | 336,372 | 450,691 |
After 3 years but within 4 years | 324,909 | 428,175 |
After 4 years but within 5 years | 116,544 | 407,211 |
After 5 years | 153,720 | 209,784 |
Total undiscounted lease payments | 2,622,914 | 3,199,848 |
Less: total future interest | (224,901) | (421,227) |
Less: estimated construction costs | (11,124) | |
Present value of lease obligations | 2,398,013 | 2,767,497 |
Total of finance lease and other financing obligations | ||
Within 1 year | 998,673 | 1,001,765 |
After 1 year but within 2 years | 2,008,447 | 2,039,701 |
After 2 years but within 3 years | 1,031,118 | 1,159,333 |
After 3 years but within 4 years | 1,042,600 | 1,157,458 |
After 4 years but within 5 years | 784,845 | 1,160,621 |
After 5 years | 5,872,229 | 6,977,896 |
Total undiscounted lease payments | 11,737,912 | 13,496,774 |
Less: total future interest | (3,295,880) | (4,115,529) |
Less: estimated construction costs | (11,124) | |
Present value of total of finance lease and other financing obligations | 8,442,032 | 9,370,121 |
Finance lease and other financing obligations, current | 547,847 | 453,855 |
Finance lease and other financing obligations, non-current | 7,894,185 | 8,916,266 |
Operating lease obligations | ||
Within 1 year | 268,687 | 272,796 |
After 1 year but within 2 years | 204,305 | 250,716 |
After 2 years but within 3 years | 162,294 | 206,489 |
After 3 years but within 4 years | 145,663 | 169,014 |
After 4 years but within 5 years | 149,581 | 151,160 |
After 5 years | 1,351,565 | 1,582,879 |
Total undiscounted lease payments | 2,282,095 | 2,633,054 |
Less: total future interest | (705,711) | (839,319) |
Present value of lease obligations | 1,576,384 | 1,793,735 |
Operating lease liabilities, current | 180,403 | 175,749 |
Operating lease liabilities, non-current | 1,395,981 | 1,617,986 |
Total | ||
Within 1 year | 1,267,360 | 1,274,561 |
After 1 year but within 2 years | 2,212,752 | 2,290,417 |
After 2 years but within 3 years | 1,193,412 | 1,365,822 |
After 3 years but within 4 years | 1,188,263 | 1,326,472 |
After 4 years but within 5 years | 934,426 | 1,311,781 |
After 5 years | 7,223,794 | 8,560,775 |
Total undiscounted lease payments | 14,020,007 | 16,129,828 |
Less: total future interest | (4,001,591) | (4,954,848) |
Less: estimated construction costs | (11,124) | |
Present value of lease obligations | 10,018,416 | 11,163,856 |
Current Portion | 728,250 | 629,604 |
Non-current portion | 9,290,166 | ¥ 10,534,252 |
Other disclosures | ||
Total future lease payments for additional leases that have not yet commenced, primarily for data center buildings | ¥ 7,847,687 | |
Data center building leases | Minimum | ||
Other disclosures | ||
Lease terms | 20 years | |
Data center building leases | Maximum | ||
Other disclosures | ||
Lease terms | 30 years |
LEASES - Lease arrangements (De
LEASES - Lease arrangements (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2023 CNY (¥) | |
LEASES | |
Sale and leaseback transaction, Consideration | ¥ 886,312 |
LEASES - Lease and other financ
LEASES - Lease and other financing obligations secured by assets (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
LEASE | ||
Accounts receivable, net of allowance for credit losses | ¥ 2,545,913 | ¥ 2,406,025 |
Property and equipment, net | 47,499,494 | 46,916,628 |
Operating lease right-of-use assets, net | 5,436,288 | 5,633,946 |
Total assets | 74,446,690 | 74,813,954 |
Asset pledged as security | Finance lease and other financing obligations | ||
LEASE | ||
Accounts receivable, net of allowance for credit losses | 69,264 | 145,764 |
Property and equipment, net | 1,422,563 | 1,372,568 |
Operating lease right-of-use assets, net | 19,113 | |
Total assets | ¥ 1,510,940 | ¥ 1,518,332 |
OTHER LONG-TERM LIABILITIES (De
OTHER LONG-TERM LIABILITIES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other long-term liabilities | ||
Consideration payable for acquisitions | ¥ 7,644 | |
Asset retirement obligations | ¥ 101,675 | 102,591 |
Deferred revenue - non-current (Note 4) | 67,683 | 29,703 |
Deferred government grants | 78,494 | 30,741 |
Others | 55,887 | 97,574 |
Total | ¥ 303,739 | ¥ 268,253 |
REDEEMABLE PREFERRED SHARES - M
REDEEMABLE PREFERRED SHARES - Movement of redeemable preferred shares (Details) ¥ in Thousands, $ / shares in Thousands, $ in Millions | 12 Months Ended | |||
Mar. 27, 2019 USD ($) $ / shares shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Movement of the redeemable preferred shares | ||||
Balance at beginning of year | ¥ 1,047,012 | |||
Balance at end of year | 1,064,766 | ¥ 1,047,012 | ||
Redeemable preferred shares | ||||
Movement of the redeemable preferred shares | ||||
Share price | $ / shares | $ 1 | |||
Balance at beginning of year | 1,047,012 | 958,480 | ¥ 980,910 | |
Accrual of redeemable preferred shares dividends | 53,625 | 51,212 | 49,073 | |
Settlement of redeemable preferred shares dividends | (53,923) | (51,578) | (49,221) | |
Foreign exchange impact | 18,052 | 88,898 | (22,282) | |
Balance at end of year | ¥ 1,064,766 | ¥ 1,047,012 | ¥ 958,480 | |
Redeemable preferred shares | GDS Holdings | ||||
Movement of the redeemable preferred shares | ||||
Issuance of shares (in shares) | shares | 150,000 | |||
Share price | $ / shares | $ 1 | |||
Issuance of redeemable preferred shares | $ | $ 150 |
REDEEMABLE PREFERRED SHARES - K
REDEEMABLE PREFERRED SHARES - Key terms of the convertible preferred shares (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) D $ / shares | |
REDEEMABLE PREFERRED SHARES | |
Number of trading days | 20 |
Percentage of Multiplier to preferred stock stated value | 100% |
Yield To Maturity Basis Spread Adjustment | 0.50% |
Redeemable preferred shares | |
REDEEMABLE PREFERRED SHARES | |
Dividend rate per annum | 5% |
Increase dividend rate per annum | 7% |
Increase in dividend rate each quarter thereafter if the Company has not redeemed all of the preferred shares outstanding as of the eighth anniversary of the Issue Date | 0.50% |
Number of trading days | 20 |
Consecutive trading days | 30 |
Aggregate value of preferred shares | $ | $ 10,000 |
Minimum percentage of the preferred shares issued as of the Issue Date, right to require the Company to sell all or a portion of its business and/or to conduct other fundraising or refinancing activities | 90% |
Issuance costs | $ | $ 2,646 |
Minimum percentage of outstanding preferred shares' written consent or affirmative vote needed for certain actions | 75% |
ADS | |
REDEEMABLE PREFERRED SHARES | |
Volume-weighted average price ("VWAP") per ADS | $ / shares | $ 53.40 |
Conversion price | $ / shares | $ 35.60 |
REDEEMABLE NON-CONTROLLING IN_3
REDEEMABLE NON-CONTROLLING INTERESTS (Details) ¥ in Thousands | 1 Months Ended | |
Jan. 31, 2022 CNY (¥) | Jul. 31, 2020 item | |
BJ13 | ||
REDEEMABLE NON-CONTROLLING INTERESTS | ||
Controlling interest owned (as a percent) | 58% | |
Number of data center projects | item | 2 | |
CPE Fund | JV | ||
REDEEMABLE NON-CONTROLLING INTERESTS | ||
Percent of equity interest to acquire | 42% | 42% |
Consideration to acquire equity interest | ¥ 593,801 | |
Accreted to the redemption value of redeemable non-controlling interest | ¥ 593,801 | |
CPE Fund | JV | ||
REDEEMABLE NON-CONTROLLING INTERESTS | ||
Non-controlling interest owned (as a percent) | 42% |
REDEEMABLE NON-CONTROLLING IN_4
REDEEMABLE NON-CONTROLLING INTERESTS - Redeemable non-controlling interest (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REDEEMABLE NON-CONTROLLING INTERESTS | ||
Balance at beginning of the year | ¥ 404,673 | ¥ 120,820 |
Capital injection from CPE Fund | 208,801 | |
Net loss attributable to redeemable non-controlling interests | (655) | (2,592) |
Accretion to redemption value of redeemable non-controlling interests | 10,801 | 77,644 |
Adjustment to the redemption value of redeemable non-controlling interests | 178,982 | |
Reclassification to current liability | ¥ (593,801) | |
Balance at end of the year | ¥ 404,673 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
FAIR VALUE MEASUREMENT | |||
Convertible bonds payable fair value | ¥ 6,722,049 | ¥ 5,281,029 | |
Impairment losses of long-lived assets | 3,013,416 | 12,759 | ¥ 0 |
Fair Value, Inputs, Level 1 | Data center equipment | |||
FAIR VALUE MEASUREMENT | |||
Fair value of impaired long-lived assets | 60,000 | ||
Impairment losses of long-lived assets | ¥ 12,759 | ||
Fair Value, Inputs, Level 3 | Data center equipment | |||
FAIR VALUE MEASUREMENT | |||
Fair value of impaired long-lived assets | 1,614,347 | ||
Impairment losses of long-lived assets | ¥ 3,013,416 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 Vote director $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Ordinary shares | |||
Increased value of authorized ordinary share capital | $ | $ 175,000 | ||
Ordinary shares, shares authorized | 3,500,000,000 | 3,500,000,000 | 2,002,000,000 |
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | $ 0.00005 |
William Wei Huang | |||
Ordinary shares | |||
Percent of issued share capital of the Company ceased on conversion basis | 2.75% | ||
Class A ordinary shares | |||
Ordinary shares | |||
Ordinary shares, shares authorized | 3,300,000,000 | ||
Number of votes per share at general meetings | Vote | 1 | ||
Common stock, outstanding shares (in shares) | 1,480,842,655 | 1,456,842,655 | |
Number of shares converted | 24,000,000 | ||
Class B ordinary shares | |||
Ordinary shares | |||
Ordinary shares, shares authorized | 200,000,000 | ||
Number of votes per share at general meetings | Vote | 20 | ||
Number of directors for simple majority | director | 6 | ||
Common stock, outstanding shares (in shares) | 43,590,336 | 67,590,336 | |
Number of shares converted | 24,000,000 |
SHARE-BASED COMPENSATION - Plan
SHARE-BASED COMPENSATION - Plans and Grants (Details) - shares | 1 Months Ended | |
Aug. 31, 2016 | Jul. 31, 2014 | |
The 2014 Plan | ||
SHARE-BASED COMPENSATION | ||
Total number shares which may be issued | 29,240,000 | |
The 2016 Plan | ||
SHARE-BASED COMPENSATION | ||
Authorized shares, automatic increment trigger (as a percent) | 1.50% | |
The 2016 Plan | Ordinary Shares | ||
SHARE-BASED COMPENSATION | ||
Total number shares which may be issued | 56,707,560 | |
Authorized shares, maximum automatic approval (as a percent) | 3% |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Option Activity (Details) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended |
Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
Number of options | |
Outstanding, beginning (in shares) | shares | 407,000 |
Exercised (in shares) | shares | (407,000) |
Intrinsic value of options exercised | ¥ | ¥ 27,775 |
Weighted average exercise price | |
Outstanding, beginning (in RMB per share) | ¥ 5.1 |
Exercised (in RMB per share) | 5.1 |
Weighted average grant-date fair value per option | |
Outstanding, beginning (in RMB per share) | 1.6 |
Exercised (in RMB per share) | ¥ 1.6 |
SHARE-BASED COMPENSATION - Sett
SHARE-BASED COMPENSATION - Settlement of Liability Classified Restricted Shares (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | ||||||
Settlement of liability-classified restricted share award | ¥ 12,914 | ¥ 13,719 | ¥ 11,147 | |||
Compensation expense | ¥ 336,616 | ¥ 290,815 | ¥ 391,275 | |||
Restricted shares | ||||||
SHARE-BASED COMPENSATION | ||||||
Granted (in shares) | 31,194,120 | 21,948,320 | 12,107,888 | |||
Compensation expense | ¥ 336,616 | ¥ 290,815 | ¥ 391,275 | |||
Vested (in shares) | 4,788,176 | 5,015,992 | 12,632,104 | |||
Restricted shares | Directors | ||||||
SHARE-BASED COMPENSATION | ||||||
Granted (in shares) | 1,035,704 | 460,272 | 178,280 | |||
Settlement of liability-classified restricted share award | ¥ 12,914 | ¥ 13,719 | ¥ 11,147 | |||
Compensation expense | ¥ 0 | ¥ 0 | ¥ 0 | |||
Restricted shares | Employees, officers and directors | ||||||
SHARE-BASED COMPENSATION | ||||||
Granted (in shares) | 21,918,552 | 21,488,048 | 11,929,608 |
SHARE-BASED COMPENSATION - Modi
SHARE-BASED COMPENSATION - Modifications to the unvested restricted share units previously granted (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jul. 22, 2023 CNY (¥) item shares | Aug. 31, 2023 shares | Aug. 31, 2022 shares | Aug. 31, 2021 shares | Dec. 31, 2023 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares | Dec. 31, 2020 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Incremental compensation cost | ¥ | ¥ 204,946 | |||||||
Modification pertained recipients | item | 1,124 | |||||||
Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unvested restricted share units | 48,996,888 | 38,534,512 | 28,930,720 | 31,018,768 | ||||
Granted (in shares) | 31,194,120 | 21,948,320 | 12,107,888 | |||||
Forfeited (in shares) | 15,943,658 | 7,328,536 | 1,563,832 | |||||
Restricted shares | Employees, officers and directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 21,918,552 | 21,488,048 | 11,929,608 | |||||
Restricted share units in the modification | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 8,239,864 | 8,239,864 | ||||||
Forfeited (in shares) | 9,820,069 | 9,820,069 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | |||
Jul. 22, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average grant-date fair value per share (RMB) | ||||
Total share based compensation expense | ¥ 336,616 | ¥ 290,815 | ¥ 391,275 | |
Restricted shares | ||||
Number of Shares | ||||
Outstanding, beginning | 38,534,512 | 28,930,720 | 31,018,768 | |
Granted (in shares) | 31,194,120 | 21,948,320 | 12,107,888 | |
Vested (in shares) | (4,788,176) | (5,015,992) | (12,632,104) | |
Forfeited (in shares) | (15,943,658) | (7,328,536) | (1,563,832) | |
Outstanding, ending | 48,996,888 | 38,534,512 | 28,930,720 | |
Weighted average grant-date fair value per share (RMB) | ||||
Outstanding, beginning | ¥ 32.2 | ¥ 43.9 | ¥ 42.4 | |
Granted (in RMB per share) | 11.9 | 19.4 | 31.6 | |
Vested (in RMB per share) | 16.1 | 43.3 | 29.3 | |
Forfeited (in RMB per share) | 45.9 | 32.5 | 37.7 | |
Outstanding, ending | ¥ 16.4 | ¥ 32.2 | ¥ 43.9 | |
Total unrecognized compensation expense | ¥ 342,420 | |||
Total share based compensation expense | ¥ 336,616 | ¥ 290,815 | ¥ 391,275 | |
Weighted average period over which unrecognized compensation expense is expected to be recognized | 1 year 5 months 1 day | |||
Intrinsic value of restricted shares vested | ¥ 56,674 | ¥ 132,123 | ¥ 674,147 | |
Intrinsic value of unvested restricted shares | ¥ 395,614 | |||
Restricted share units in the modification | ||||
Number of Shares | ||||
Granted (in shares) | 8,239,864 | 8,239,864 | ||
Forfeited (in shares) | (9,820,069) | (9,820,069) |
SHARE-BASED COMPENSATION - Fair
SHARE-BASED COMPENSATION - Fair Value Assumptions - Restricted Shares (Details) - Restricted shares | 1 Months Ended | |||||||
Aug. 31, 2023 $ / shares | Jul. 31, 2023 $ / shares | Aug. 31, 2022 $ / shares | Aug. 31, 2021 $ / shares | Aug. 31, 2023 ¥ / shares | Jul. 31, 2023 ¥ / shares | Aug. 31, 2022 ¥ / shares | Aug. 31, 2021 ¥ / shares | |
Fair value assumptions | ||||||||
Risk-free rate of return (as a percent) | 4.66% | |||||||
Volatility (as a percent) | 61.40% | |||||||
Expected dividend yield (as a percent) | 0% | 0% | 0% | 0% | ||||
Share price at grant date | (per share) | $ 1.6025 | $ 1.5000 | $ 3.3650 | $ 7.4500 | ¥ 11.4 | ¥ 10.7 | ¥ 22.7 | ¥ 48.2 |
Minimum | ||||||||
Fair value assumptions | ||||||||
Risk-free rate of return (as a percent) | 4.94% | 2.82% | 0.07% | |||||
Volatility (as a percent) | 66.64% | 53.14% | 49.271% | |||||
Expected term | 1 year | 9 months 6 days | 1 year | 1 year | ||||
Maximum | ||||||||
Fair value assumptions | ||||||||
Risk-free rate of return (as a percent) | 5.50% | 2.98% | 0.33% | |||||
Volatility (as a percent) | 67.86% | 54.15% | 50.295% | |||||
Expected term | 3 years | 1 year 9 months 6 days | 3 years | 3 years |
SHARE-BASED COMPENSATION - Expe
SHARE-BASED COMPENSATION - Expenses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |||
Compensation expense | ¥ 336,616 | ¥ 290,815 | ¥ 391,275 |
Costs of revenue | |||
SHARE-BASED COMPENSATION | |||
Compensation expense | 116,467 | 97,055 | 110,291 |
Selling and marketing expenses | |||
SHARE-BASED COMPENSATION | |||
Compensation expense | 43,765 | 41,685 | 53,560 |
General and administrative expenses | |||
SHARE-BASED COMPENSATION | |||
Compensation expense | 166,838 | 146,781 | 219,328 |
Research and development expenses | |||
SHARE-BASED COMPENSATION | |||
Compensation expense | ¥ 9,546 | ¥ 5,294 | ¥ 8,096 |
REVENUE (Details)
REVENUE (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue recognition | |||
Net revenue | ¥ 9,956,501 | ¥ 9,325,631 | ¥ 7,818,681 |
Service revenue | |||
Revenue recognition | |||
Net revenue | 9,955,937 | 9,317,891 | 7,814,404 |
Colocation services | |||
Revenue recognition | |||
Net revenue | 8,669,669 | 7,943,268 | 6,514,268 |
Managed service and others | |||
Revenue recognition | |||
Net revenue | 1,286,268 | 1,374,623 | 1,300,136 |
Equipment sales | |||
Revenue recognition | |||
Net revenue | ¥ 564 | ¥ 7,740 | ¥ 4,277 |
INCOME TAX (Details)
INCOME TAX (Details) ¥ in Thousands, $ in Millions | 12 Months Ended | |||
Jan. 01, 2018 HKD ($) item | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 | |
INCOME TAX | ||||
Effective tax rate (as a percent) | 0.30% | (27.90%) | (25.60%) | |
Statutory income tax rate | 25% | 25% | 25% | |
Undistributed Earnings | ¥ 2,324,522 | |||
Unrecognized deferred tax liabilities | ¥ 3,046,109 | ¥ 3,195,850 | ||
Hong Kong | ||||
INCOME TAX | ||||
Effective tax rate (as a percent) | 16.50% | 16.50% | 16.50% | |
Statutory income tax rate | 16.50% | 16.50% | ||
Amount of first assessable profits earned will be taxed at half the current tax rate | $ | $ 2 | |||
Tax rate for first HK$2 million of assessable profits earned | 8.25% | |||
Number of entities to be nominated and benefit from the progressive rates | item | 1 | |||
PRC | ||||
INCOME TAX | ||||
Statutory income tax rate | 25% | |||
Unrecognized deferred tax liabilities | ¥ 354,855 | |||
Singapore | ||||
INCOME TAX | ||||
Statutory income tax rate | 17% | |||
Preferential tax rate for Development and Expansion Incentive | 10% | |||
Malaysia | ||||
INCOME TAX | ||||
Statutory income tax rate | 24% | 24% | 24% | |
Indonesia | ||||
INCOME TAX | ||||
Statutory income tax rate | 22% | 22% | 22% | |
Macau | ||||
INCOME TAX | ||||
Statutory income tax rate | 12% | 12% | 12% | |
High and new technology enterprise | PRC | ||||
INCOME TAX | ||||
Statutory income tax rate | 15% |
INCOME TAX - By tax Jurisdictio
INCOME TAX - By tax Jurisdictions (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loss before income taxes: | |||
PRC | ¥ 3,094,795 | ¥ 144,885 | ¥ 287,250 |
Other jurisdictions | 1,205,375 | 844,998 | 661,502 |
Total loss before income taxes | 4,300,170 | 989,883 | 948,752 |
Current tax expenses: | |||
PRC | 279,646 | 375,388 | 290,924 |
Other jurisdictions | 1,508 | ||
Total current tax expenses | 281,154 | 375,388 | 290,924 |
Deferred tax benefits: | |||
PRC | (295,931) | (99,153) | (48,463) |
Total deferred tax benefits | (295,931) | (99,153) | (48,463) |
Total income taxes expenses (benefits) | ¥ (14,777) | ¥ 276,235 | ¥ 242,461 |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of statutory tax rate and effective tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the differences between actual income tax expense and the PRC statutory tax rate | |||
PRC enterprise income tax rate | 25% | 25% | 25% |
Non-PRC resident enterprises not subject to income tax | (0.40%) | (1.40%) | 0% |
Tax differential for entities in non-PRC jurisdiction | (0.60%) | (1.00%) | (0.20%) |
Preferential tax rate | 0.20% | 0.70% | 0.60% |
Tax effect of current year permanent differences | (0.80%) | (3.70%) | (5.40%) |
Expiration of unused net operating losses | (1.10%) | (1.60%) | (1.50%) |
Non-taxable income and non-deductible expenses | (4.80%) | (14.10%) | (14.40%) |
Gain from purchase price adjustment | 0% | 5.20% | 0.20% |
Change in valuation allowance | (18.20%) | (34.00%) | (31.00%) |
Return to provision adjustment | 1% | (3.00%) | 1.10% |
Effective tax rate (as a percent) | 0.30% | (27.90%) | (25.60%) |
INCOME TAX - Deferred tax asset
INCOME TAX - Deferred tax assets and liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||||
Allowance for credit losses | ¥ 9,585 | ¥ 4,209 | ||
Impairment of long-lived assets | 753,354 | |||
Government subsidy | 7,877 | 7,685 | ||
Accrued expenses | 64,709 | 54,223 | ||
Asset retirement obligation | 26,165 | 27,696 | ||
Operating lease liabilities | 368,061 | 411,972 | ||
Finance lease and other financing obligations | 1,475,504 | 1,587,137 | ||
Net operating losses carry forwards | 1,222,832 | 993,062 | ||
Other non-current assets | 27,714 | 40,644 | ||
Other non-current liabilities | 12,621 | 19,101 | ||
Total gross deferred tax assets | 3,968,422 | 3,145,729 | ||
Valuation allowance on deferred tax assets | (1,914,950) | (1,131,256) | ¥ (775,528) | ¥ (328,821) |
Deferred tax assets, net of valuation allowance | 2,053,472 | 2,014,473 | ||
Deferred tax liabilities: | ||||
Accounts receivable | (65,008) | |||
Property and equipment | (1,690,369) | (1,811,897) | ||
Intangible assets | (189,210) | (260,519) | ||
Prepaid land use rights | (1,451) | (1,491) | ||
Operating lease right-of-use assets | (1,080,936) | (1,101,324) | ||
Other current assets | (19,135) | (20,619) | ||
Total deferred tax liabilities | (3,046,109) | (3,195,850) | ||
Net deferred tax liabilities | (992,637) | (1,181,377) | ||
Analysis as: | ||||
Deferred tax assets | 289,847 | 228,999 | ||
Deferred tax liabilities | (1,282,484) | (1,410,376) | ||
Net deferred tax liabilities | ¥ (992,637) | ¥ (1,181,377) |
INCOME TAX - Movement of the va
INCOME TAX - Movement of the valuation allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Movement of the valuation allowance | |||
Balance at the beginning of the year | ¥ 1,131,256 | ¥ 775,528 | ¥ 328,821 |
Increase during the year | 783,694 | 355,728 | 446,707 |
Balance at the end of the year | ¥ 1,914,950 | ¥ 1,131,256 | ¥ 775,528 |
INCOME TAX - Net operating loss
INCOME TAX - Net operating losses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating losses carry forwards | ||||
Deferred tax assets | ¥ 289,847 | ¥ 228,999 | ||
Valuation allowance on deferred tax assets | 1,914,950 | ¥ 1,131,256 | ¥ 775,528 | ¥ 328,821 |
Deferred tax assets for net operating losses | 1,222,832 | |||
Valuation allowance on net operating losses carryforwards | ¥ 1,052,151 | |||
Statutory income tax rate | 25% | 25% | 25% | |
State administration of taxation, China | ||||
Operating losses carry forwards | ||||
Net operating losses carry forwards | ¥ 4,445,250 | |||
Net operating losses carry forwards expire if unused by December 31, 2024 | 230,439 | |||
Net operating losses carry forwards expire if unused by December 31, 2025 | 558,900 | |||
Net operating losses carry forwards expire if unused by December 31, 2026 | 1,134,804 | |||
Net operating losses carry forwards expire if unused by December 31, 2027 | 1,381,169 | |||
Net operating losses carry forwards expire if unused by December 31, 2028 | ¥ 1,139,938 | |||
Statutory income tax rate | 25% | |||
Withholding tax for dividends distributed by a PRC-resident enterprise to its non-PRC-resident corporate investor (as a percent) | 10% |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
RESTRICTED NET ASSETS | ||
Percentage of after-tax profits required to be appropriated to general reserve fund | 10% | |
General reserve as a percentage of registered capital up to which after-tax profit of PRC subsidiaries and VIEs could discontinue allocations to the general reserve fund | 50% | |
Aggregate amounts of capital and statutory reserves restricted | ¥ 25,030,636 | ¥ 24,955,657 |
Amount of non-distributable general reserve fund | ¥ 225,917 | ¥ 146,856 |
LOSS PER CLASS A and CLASS B _3
LOSS PER CLASS A and CLASS B ORDINARY SHARE - Computation of basic and diluted loss per share (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net loss | ¥ (4,285,393) | ¥ (1,266,118) | ¥ (1,191,213) |
Net loss (income) attributable to non-controlling interests | (4,660) | (3,427) | 1,403 |
Net loss attributable to redeemable non-controlling interests | 655 | 2,592 | |
Accretion to redemption value of redeemable non-controlling interests | (10,801) | (77,644) | |
Adjustment to the redemption value of redeemable non-controlling interests | (178,982) | ||
Cumulative dividend on redeemable preferred shares | (53,625) | (51,212) | (49,073) |
Net loss available to GDS Holdings Limited ordinary shareholders | ¥ (4,343,678) | ¥ (1,509,885) | ¥ (1,313,935) |
Weighted average number of ordinary share outstanding, basic | 1,468,187,956 | 1,464,447,843 | 1,452,906,722 |
Weighted average number of ordinary share outstanding, diluted | 1,468,187,956 | 1,464,447,843 | 1,452,906,722 |
Loss per Class A and Class B ordinary share, basic | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Loss per Class A and Class B ordinary share, diluted | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Ordinary Shares | |||
Shares issued to depository bank (in shares) | 0 | 29,252,600 | 0 |
Proceeds from issuance of ordinary shares | ¥ 0 | ¥ 0 | ¥ 0 |
LOSS PER CLASS A and CLASS B _4
LOSS PER CLASS A and CLASS B ORDINARY SHARE - Class A and Class B (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Allocation of net loss available to GDS Holdings Limited ordinary shareholders | ¥ (4,343,678) | ¥ (1,509,885) | ¥ (1,313,935) |
Weighted average number of ordinary share outstanding, basic | 1,468,187,956 | 1,464,447,843 | 1,452,906,722 |
Weighted average number of ordinary share outstanding, diluted | 1,468,187,956 | 1,464,447,843 | 1,452,906,722 |
Loss per Class A and Class B ordinary share, basic | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Loss per Class A and Class B ordinary share, diluted | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Class A | |||
Allocation of net loss available to GDS Holdings Limited ordinary shareholders | ¥ (4,194,323) | ¥ (1,440,198) | ¥ (1,252,810) |
Weighted average number of ordinary share outstanding, basic | 1,417,704,951 | 1,396,857,507 | 1,385,316,386 |
Weighted average number of ordinary share outstanding, diluted | 1,417,704,951 | 1,396,857,507 | 1,385,316,386 |
Loss per Class A and Class B ordinary share, basic | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Loss per Class A and Class B ordinary share, diluted | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Class B | |||
Allocation of net loss available to GDS Holdings Limited ordinary shareholders | ¥ (149,355) | ¥ (69,687) | ¥ (61,125) |
Weighted average number of ordinary share outstanding, basic | 50,483,004 | 67,590,336 | 67,590,336 |
Weighted average number of ordinary share outstanding, diluted | 50,483,004 | 67,590,336 | 67,590,336 |
Loss per Class A and Class B ordinary share, basic | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
Loss per Class A and Class B ordinary share, diluted | ¥ (2.96) | ¥ (1.03) | ¥ (0.90) |
LOSS PER CLASS A and CLASS B _5
LOSS PER CLASS A and CLASS B ORDINARY SHARE - Excluded from the computation of diluted loss per share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
LOSS PER CLASS A and CLASS B ORDINARY SHARE | |||
Total | 337,597,040 | 184,260,560 | 75,456,769 |
Share options/restricted shares | |||
LOSS PER CLASS A and CLASS B ORDINARY SHARE | |||
Total | 48,996,888 | 38,534,512 | 28,930,720 |
Convertible bonds | |||
LOSS PER CLASS A and CLASS B ORDINARY SHARE | |||
Total | 288,600,152 | 145,726,048 | 46,526,049 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 CNY (¥) segment | Dec. 31, 2022 CNY (¥) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Number of operating segments | segment | 1 | |
Long-lived assets | ¥ 53,646,720 | ¥ 53,621,285 |
PRC | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 45,315,466 | 48,508,923 |
Hong Kong | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 4,787,069 | 4,406,267 |
Malaysia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 3,368,819 | 531,477 |
Singapore | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 99,207 | 141,333 |
Indonesia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | ¥ 76,159 | ¥ 33,285 |
MAJOR CUSTOMERS AND SUPPLIERS_2
MAJOR CUSTOMERS AND SUPPLIERS (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 CNY (¥) item | Dec. 31, 2022 CNY (¥) item | Dec. 31, 2021 CNY (¥) item | |
REVENUE | |||
Revenues | ¥ 9,956,501 | ¥ 9,325,631 | ¥ 7,818,681 |
Number of suppliers | item | 1 | 1 | 1 |
Revenues | Customer concentration | Contracting Customer A | |||
REVENUE | |||
Revenues | ¥ 1,992,667 | ¥ 1,895,877 | ¥ 1,736,295 |
Revenues | Customer concentration | Contracting Customer B | |||
REVENUE | |||
Revenues | 1,834,843 | 1,595,777 | 873,378 |
Revenues | Customer concentration | Contracting Customer C | |||
REVENUE | |||
Revenues | 1,420,163 | 1,130,799 | 785,528 |
Revenues | Customer concentration | Contracting Customer D | |||
REVENUE | |||
Revenues | 1,128,135 | 1,031,102 | 964,414 |
Revenues | Customer concentration | End User Customer One | |||
REVENUE | |||
Revenues | 2,778,151 | 2,341,346 | 1,850,523 |
Revenues | Customer concentration | End User Customer Two | |||
REVENUE | |||
Revenues | ¥ 1,676,064 | ¥ 1,857,369 | ¥ 1,735,536 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Litigation contingencies | ||
potential loss | ¥ 24,789 | |
Capital additional purchase commitments | ||
Capital commitments | ||
Capital commitments outstanding not provided for in the financial statements, Contracted for | 4,412,522 | ¥ 5,241,586 |
Purchase of land use rights | ||
Capital commitments | ||
Capital commitments outstanding not provided for in the financial statements, Contracted for | ¥ 707,495 | ¥ 516,061 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Related Party - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions | |||
Commission income | ¥ 1,076 | ¥ 1,042 | ¥ 1,010 |
Amount due to related parties | 17,104 | 16,995 | |
STT Singapore DC Pte. Ltd | |||
Related Party Transactions | |||
Commission income | 562 | 564 | 546 |
Amount due to related parties | 8,300 | 8,395 | |
Billed on behalf of related parties | 42,546 | 42,792 | 45,345 |
STT DEFU 2 Pte. Ltd. | |||
Related Party Transactions | |||
Commission income | 514 | 478 | 464 |
Amount due to related parties | 8,804 | 8,600 | |
Billed on behalf of related parties | 47,276 | 43,896 | ¥ 39,818 |
OnePro Cloud Inc. | |||
Related Party Transactions | |||
Purchase of debt securities | 2,840 | ||
Interest income of convertible bonds | 148 | 75 | |
Amount due from a related party | ¥ 3,060 | ¥ 2,860 |
RELATED PARTY TRANSACTIONS - Ba
RELATED PARTY TRANSACTIONS - Balances with related parties (Details) - Subscription of convertible bonds $ in Thousands | Sep. 02, 2022 USD ($) |
RELATED PARTY TRANSACTIONS | |
Face value of convertible bonds | $ 400 |
Maturity term | 12 months |
Interest rate | 8% |
PARENT ONLY FINANCIAL INFORMA_3
PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | ¥ 7,710,711 | ¥ 8,608,131 |
Restricted cash | 42,135 | 158,075 |
Prepaid expenses | 174,949 | 186,807 |
Other current assets | 295,560 | 427,295 |
Total current assets | 10,983,653 | 11,951,076 |
Non-current assets | ||
Other non-current assets | 885,035 | 664,643 |
Total non-current assets | 63,463,037 | 62,862,878 |
Total assets | 74,446,690 | 74,813,954 |
Current liabilities | ||
Short-term borrowings | 674,010 | 1,652,196 |
Convertible bonds payable, current | 2,083,829 | |
Accounts payable | 3,424,937 | 3,092,884 |
Accrued expenses and other payables | 1,198,451 | 1,016,961 |
Due to subsidiaries | 17,104 | 16,995 |
Total current liabilities | 8,305,476 | 10,603,375 |
Non-current liabilities | ||
Convertible bonds payable | 8,434,766 | 4,294,985 |
Total non-current liabilities | 46,017,411 | 40,025,924 |
Total liabilities | 54,322,887 | 50,629,299 |
Mezzanine Equity | ||
Redeemable preferred shares (US $0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2022 and 2023; Redemption value of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively; Liquidation preference of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively) | 1,064,766 | 1,047,012 |
Total mezzanine equity | 1,064,766 | 1,047,012 |
Shareholders' equity | ||
Ordinary shares (US$0.00005 par value; 2,002,000,000 and 3,500,000,000 shares authorized as of December 31, 2022 and 2023, respectively; 1,456,842,655 and 1,480,842,655 Class A ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively; 67,590,336 and 43,590,336 Class B ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively) | 516 | 516 |
Additional paid-in capital | 29,337,095 | 29,048,598 |
Accumulated other comprehensive loss | (974,393) | (848,360) |
Accumulated deficit | (9,469,758) | (5,179,705) |
Total GDS Holdings Limited shareholders' equity | 18,893,460 | 23,021,049 |
Commitments and contingencies | ||
Total liabilities, mezzanine equity and equity | 74,446,690 | 74,813,954 |
Parent Company | Reportable Legal Entities | ||
Current assets | ||
Cash | 223,533 | 760,716 |
Restricted cash | 20,402 | |
Prepaid expenses | 737 | 9,698 |
Loans and amounts due from subsidiaries and consolidated VIEs, current | 1,082,359 | |
Other current assets | 3,939 | 2,422 |
Total current assets | 1,310,568 | 793,238 |
Non-current assets | ||
Investment, loans and amounts due from subsidiaries and consolidated VIEs, non-current | 27,417,363 | 30,891,361 |
Other non-current assets | 73 | 184 |
Total non-current assets | 27,417,436 | 30,891,545 |
Total assets | 28,728,004 | 31,684,783 |
Current liabilities | ||
Short-term borrowings | 1,045,252 | |
Convertible bonds payable, current | 2,083,829 | |
Accounts payable | 3,810 | 1,188 |
Accrued expenses and other payables | 134,090 | 49,670 |
Due to subsidiaries | 197,112 | 141,798 |
Total current liabilities | 335,012 | 3,321,737 |
Non-current liabilities | ||
Convertible bonds payable | 8,434,766 | 4,294,985 |
Total non-current liabilities | 8,434,766 | 4,294,985 |
Total liabilities | 8,769,778 | 7,616,722 |
Mezzanine Equity | ||
Redeemable preferred shares (US $0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2022 and 2023; Redemption value of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively; Liquidation preference of RMB1,047,012 and RMB1,064,766 as of December 31, 2022 and 2023, respectively) | 1,064,766 | 1,047,012 |
Total mezzanine equity | 1,064,766 | 1,047,012 |
Shareholders' equity | ||
Ordinary shares (US$0.00005 par value; 2,002,000,000 and 3,500,000,000 shares authorized as of December 31, 2022 and 2023, respectively; 1,456,842,655 and 1,480,842,655 Class A ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively; 67,590,336 and 43,590,336 Class B ordinary shares issued and outstanding as of December 31, 2022 and 2023, respectively) | 516 | 516 |
Additional paid-in capital | 29,337,095 | 29,048,598 |
Accumulated other comprehensive loss | (974,393) | (848,360) |
Accumulated deficit | (9,469,758) | (5,179,705) |
Total GDS Holdings Limited shareholders' equity | 18,893,460 | 23,021,049 |
Commitments and contingencies | ||
Total liabilities, mezzanine equity and equity | ¥ 28,728,004 | ¥ 31,684,783 |
PARENT ONLY FINANCIAL INFORMA_4
PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Parenthetical) (Details) ¥ in Thousands | Dec. 31, 2023 $ / shares | Dec. 31, 2023 CNY (¥) shares | Jun. 30, 2023 $ / shares shares | Dec. 31, 2022 $ / shares | Dec. 31, 2022 CNY (¥) shares |
Ordinary shares | |||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | $ 0.00005 | ||
Ordinary shares, shares authorized | 3,500,000,000 | 3,500,000,000 | 2,002,000,000 | ||
Redeemable preferred shares | |||||
Redeemable preferred shares | |||||
Preferred stock, par value (in dollars per share) | $ / shares | 0.00005 | 0.00005 | |||
Preferred stock, authorized shares (in shares) | 150,000 | 150,000 | |||
Preferred stock, issued shares (in shares) | 150,000 | 150,000 | |||
Preferred stock, shares outstanding | 150,000 | 150,000 | |||
Redemption value | ¥ | ¥ 1,064,766 | ¥ 1,047,012 | |||
Liquidation preference | ¥ | ¥ 1,064,766 | ¥ 1,047,012 | |||
Class A | |||||
Ordinary shares | |||||
Ordinary shares, shares authorized | 3,300,000,000 | ||||
Ordinary shares, shares issued | 1,480,842,655 | 1,456,842,655 | |||
Ordinary shares, shares outstanding | 1,480,842,655 | 1,456,842,655 | |||
Class B | |||||
Ordinary shares | |||||
Ordinary shares, shares authorized | 200,000,000 | ||||
Ordinary shares, shares issued | 43,590,336 | 67,590,336 | |||
Ordinary shares, shares outstanding | 43,590,336 | 67,590,336 | |||
Parent Company | Reportable Legal Entities | |||||
Ordinary shares | |||||
Ordinary shares, par value (in dollars per share) | $ / shares | 0.00005 | 0.00005 | |||
Ordinary shares, shares authorized | 3,500,000,000 | 2,002,000,000 | |||
Parent Company | Reportable Legal Entities | Redeemable preferred shares | |||||
Redeemable preferred shares | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | |||
Preferred stock, authorized shares (in shares) | 150,000 | 150,000 | |||
Preferred stock, issued shares (in shares) | 150,000 | 150,000 | |||
Preferred stock, shares outstanding | 150,000 | 150,000 | |||
Redemption value | ¥ | ¥ 1,064,766 | ¥ 1,047,012 | |||
Liquidation preference | ¥ | ¥ 1,064,766 | ¥ 1,047,012 | |||
Parent Company | Reportable Legal Entities | Class A | |||||
Ordinary shares | |||||
Ordinary shares, shares issued | 1,480,842,655 | 1,456,842,655 | |||
Ordinary shares, shares outstanding | 1,480,842,655 | 1,456,842,655 | |||
Parent Company | Reportable Legal Entities | Class B | |||||
Ordinary shares | |||||
Ordinary shares, shares issued | 43,590,336 | 67,590,336 | |||
Ordinary shares, shares outstanding | 43,590,336 | 67,590,336 |
PARENT ONLY FINANCIAL INFORMA_5
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Operations (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Statements of Operations | |||
Net revenue | ¥ 9,956,501 | ¥ 9,325,631 | ¥ 7,818,681 |
Cost of revenue | (8,034,051) | (7,389,774) | (6,039,252) |
Gross loss | 1,922,450 | 1,935,857 | 1,779,429 |
Operating expenses | |||
Selling and marketing expenses | (144,154) | (150,433) | (148,614) |
General and administrative expenses | (1,185,426) | (1,185,080) | (1,021,950) |
Research and development expenses | (38,159) | (35,806) | (39,343) |
Income (loss) from operations | (2,458,705) | 551,779 | 569,522 |
Other income (expenses): | |||
Interest income | 97,546 | 42,460 | 50,445 |
Interest expenses | (2,036,979) | (1,887,887) | (1,654,737) |
Others, net | 13,724 | 1,912 | (1,557) |
Loss before income taxes | (4,300,170) | (989,883) | (948,752) |
Income tax expenses | 14,777 | (276,235) | (242,461) |
Net loss | (4,285,393) | (1,266,118) | (1,191,213) |
Parent Company | Reportable Legal Entities | |||
Condensed Statements of Operations | |||
Net revenue | 6,776 | 13,852 | |
Cost of revenue | (121,592) | (102,565) | (116,151) |
Gross loss | (114,816) | (88,713) | (116,151) |
Operating expenses | |||
Selling and marketing expenses | (45,242) | (42,647) | (54,768) |
General and administrative expenses | (230,744) | (232,832) | (285,077) |
Research and development expenses | (9,546) | (5,294) | (8,096) |
Income (loss) from operations | (400,348) | (369,486) | (464,092) |
Other income (expenses): | |||
Interest income | 73,008 | 5,593 | 25,215 |
Interest expenses | (261,152) | (207,510) | (95,313) |
Equity in loss of subsidiaries and consolidated VIEs | (3,700,241) | (697,277) | (653,251) |
Others, net | (469) | (210) | 223 |
Loss before income taxes | (4,289,202) | (1,268,890) | (1,187,218) |
Income tax expenses | (851) | ||
Net loss | ¥ (4,290,053) | ¥ (1,268,890) | ¥ (1,187,218) |
PARENT ONLY FINANCIAL INFORMA_6
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive Loss (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Statements of Comprehensive Loss | |||
Net loss | ¥ (4,285,393) | ¥ (1,266,118) | ¥ (1,191,213) |
Other comprehensive loss | |||
Foreign currency translation adjustments, net of nil tax | (125,118) | (247,509) | (159,714) |
Comprehensive loss | (4,410,511) | (1,513,627) | (1,350,927) |
Parent Company | Reportable Legal Entities | |||
Condensed Statements of Comprehensive Loss | |||
Net loss | (4,290,053) | (1,268,890) | (1,187,218) |
Other comprehensive loss | |||
Foreign currency translation adjustments, net of nil tax | (126,033) | (249,174) | (159,551) |
Comprehensive loss | ¥ (4,416,086) | ¥ (1,518,064) | ¥ (1,346,769) |
PARENT ONLY FINANCIAL INFORMA_7
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive Loss (Parenthetical) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Statements of Comprehensive Loss | |||
Foreign currency translation adjustments, income taxes | ¥ 0 | ¥ 0 | ¥ 0 |
Parent Company | Reportable Legal Entities | |||
Condensed Statements of Comprehensive Loss | |||
Foreign currency translation adjustments, income taxes | ¥ 0 | ¥ 0 | ¥ 0 |
PARENT ONLY FINANCIAL INFORMA_8
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | |||
Net cash used in operating activities | ¥ 2,065,257 | ¥ 2,858,067 | ¥ 1,201,363 |
Investing activities: | |||
Net cash used in investing activities | (6,326,187) | (11,274,884) | (13,691,538) |
Financing activities: | |||
Proceeds from short-term borrowings | 1,395,388 | 4,876,691 | 3,775,353 |
Repayment of short-term borrowings | (2,336,360) | (8,237,650) | (902,659) |
Payment of issuance cost and commitment cost of debts | (287,872) | (109,419) | (150,008) |
Proceeds from exercise of stock options | 2,082 | ||
Proceeds from issuance of convertible bonds | 3,926,667 | 3,917,036 | |
Repayment of convertible bonds | (2,128,311) | ||
Payment of redeemable preferred shares dividends | (53,923) | (51,578) | (49,221) |
Net cash provided by financing activities | 3,142,494 | 4,856,318 | 8,119,155 |
Effect of exchange rate changes on cash and restricted cash | 154,302 | 416,198 | (95,542) |
Net decrease in cash and restricted cash | (964,134) | (3,144,301) | (4,466,562) |
Cash and restricted cash at beginning of year | 8,882,066 | 12,026,367 | |
Cash and restricted cash at end of year | 7,917,932 | 8,882,066 | 12,026,367 |
Supplemental disclosures of cash flow information | |||
Interest paid | 2,061,889 | 1,803,013 | 1,538,974 |
Supplemental disclosures of non-cash investing and financing activities | |||
Settlement of liability-classified restricted share award | 12,914 | 13,719 | 11,147 |
Parent Company | Reportable Legal Entities | |||
Operating activities: | |||
Net cash used in operating activities | (68,805) | (68,391) | (83,019) |
Investing activities: | |||
Investment, loans and advances to subsidiaries | (1,285,317) | (6,312,513) | (9,935,432) |
Net cash used in investing activities | (1,285,317) | (6,312,513) | (9,935,432) |
Financing activities: | |||
Proceeds from short-term borrowings | 4,218,790 | 3,187,850 | |
Repayment of short-term borrowings | (1,042,785) | (6,555,105) | |
Payment of issuance cost and commitment cost of debts | (78,989) | (26,465) | (40,645) |
Proceeds from exercise of stock options | 2,082 | ||
Proceeds from issuance of convertible bonds | 3,926,667 | 3,917,036 | |
Repayment of convertible bonds | (2,128,311) | ||
Payment of redeemable preferred shares dividends | (53,923) | (51,578) | (49,221) |
Net cash provided by financing activities | 622,659 | 1,502,678 | 3,100,066 |
Effect of exchange rate changes on cash and restricted cash | 173,878 | 425,800 | (160,320) |
Net decrease in cash and restricted cash | (557,585) | (4,452,426) | (7,078,705) |
Cash and restricted cash at beginning of year | 781,118 | 5,233,544 | 12,312,249 |
Cash and restricted cash at end of year | 223,533 | 781,118 | 5,233,544 |
Supplemental disclosures of cash flow information | |||
Interest paid | 144,095 | 143,847 | 38,243 |
Supplemental disclosures of non-cash investing and financing activities | |||
Settlement of liability-classified restricted share award | ¥ 12,914 | ¥ 13,719 | ¥ 11,147 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Mar. 26, 2024 USD ($) Vote | Jan. 20, 2023 $ / shares | Mar. 08, 2022 USD ($) $ / shares |
ADS | |||
SUBSEQUENT EVENT | |||
Conversion price (in USD/share) | $ / shares | $ 24.50 | $ 50 | |
Convertible senior notes due 2029 | |||
SUBSEQUENT EVENT | |||
Principal amount | $ 620,000,000 | ||
Interest per annum (as a percent) | 0.25% | ||
Subsequent Events | Digital Land Holdings Limited | |||
SUBSEQUENT EVENT | |||
Percentage of Equity interest in subsidiary, owned in the form of ordinary shares, post closing and on as-converted basis | 56.10% | ||
Subsequent Events | Series A Convertible Preferred Stock | |||
SUBSEQUENT EVENT | |||
Issuance of ordinary shares | $ 587,000,000 | ||
Subsequent Events | Series A Convertible Preferred Stock | Digital Land Holdings Limited | |||
SUBSEQUENT EVENT | |||
Amount of preferred shares to be subscribed | $ 587,000,000 | ||
Percentage of Equity interest in subsidiary, owned in the form of convertible preferred shares, post closing and on as-converted basis | 43.90% | ||
Number of votes per share at general meetings | Vote | 1 | ||
Preferred stock, convertible, conversion ratio | 1 |