Cloud data business ushers in a period of performance return, and Century Huatong actively expands into emerging markets such as AI

Tech 2023-05-30 10:24:23 Source: Network

On May 29th, Century Huatong mentioned in its announcement on responding to the inquiry letter on the annual report of the Shenzhen Stock Exchange that the company's Shenzhen data center project is expected to officially enter the operation period of the first batch of delivered cabinets in the second half of 2023 and generate operating income. It is expected that the net profit will turn positive in 2025; The Shanghai Data Center project has gradually generated operating revenue by delivering cabinets

On May 29th, Century Huatong mentioned in its announcement on responding to the inquiry letter on the annual report of the Shenzhen Stock Exchange that the company's Shenzhen data center project is expected to officially enter the operation period of the first batch of delivered cabinets in the second half of 2023 and generate operating income. It is expected that the net profit will turn positive in 2025; The Shanghai Data Center project has gradually generated operating revenue by delivering cabinets. This means that the two major data center projects under Century Huatong have gradually entered a return period from the investment period, further enriching and stabilizing the financial revenue of the listed company, and strengthening the business composition.

AIDriving New Demand for Computing Power Growth: Century Huatong's Data Center Business "Striving for Progress while Stable"

As is well known, in recent years, with the rapid development of the digital economy, the demand for computing power in the entire society has shown a rapid growth trend. According to the "2022 Data Center White Paper", the market size of China's data centers increased from 5.128 billion yuan to 150.2 billion yuan from 2017 to 2021, with an average annual compound growth rate of 30.8%. Some relevant institutions also predict that the market size of China's data centers will reach 595.2 billion yuan by 2025.

For the development of enterprises and even the entire society, computing power is no longer just a form of infrastructure. It is becoming a new productivity that integrates into all aspects of our lives. It is also due to the vigorous growth of the demand side, the layout of leading manufacturers, and the increasing competition in the internet data center industry due to the entry of new enterprises into the market. According to the "Digital China Development Report (2022)" released by the National Internet Information Office, the total scale of data center racks in China exceeds 6.5 million standard racks, with an average annual growth rate of over 30% in the past five years. The total scale of computing power in data centers in use exceeds 180EFLOPS, ranking second in the world.

As a well-known digital culture and technology enterprise in China, Century Huatong has been laying out data center projects in Shanghai and Shenzhen since 2020, and will continue to expand the single ultra large scale (over 10000 cabinets) computer room layout in key core areas of the country through acquisition or self construction. The data center project located in Shanghai is Tencent Cloud's core computer room located in the East China region. The Shenzhen Data Center project is currently the largest approved data center project in Shenzhen, with the main client being Huawei Cloud. After completion, it will become an important computing hub for the company to serve the Greater Bay Area. Previously, there were media estimates that, considering the company's continuous external layout and promotion, based on the number of cabinets, Century Huatong Data Center's strength has ranked among the first tier of third-party IDC industry in China.

Faced with the increasing demand for computing power brought about by the current AI outbreak, many industry insiders believe that computing power bases are one of the major issues that solve artificial intelligence's bottleneck. Moreover, AIGC, represented by ChatGPT, is rapidly developing, requiring new requirements for high-performance storage, transmission, computing power, and other aspects. A leading domestic cloud manufacturer has stated that the development of intelligent computing power with AI as its core will achieve a compound growth rate of 52.3% in the next five years. Although Century Huatong's data center business has mastered the triple core advantages of location, customer, and scale, the company is clearly not satisfied with this. According to the announcement, the company's cloud data business will actively layout in emerging markets. On the basis of consolidating the original cooperation between the Internet and cloud business head customers, it will vigorously promote in-depth cooperation in the Internet of Vehicles, intelligent manufacturing, Internet of Things, artificial intelligence, machine learning, edge computing, blockchain and other industries, diversify development, and improve risk resistance.

Consolidate green, efficient and other construction strategies. Century Huatong Data Center is expected to fully become a regular by 2025

In fact, from the perspectives of investors, media, and the general public, although the demand for data centers in the current society is huge and there are abundant industrial opportunities, enterprises will face high construction costs when investing in the construction of data centers, the location advantage of being able to lock in core customers, green and low-carbon environmental protection standards, and profit conversion period, etc. So for Century Huatong, which previously dominated the company's revenue with games, how can it build a data center with core advantages and become a new important core revenue component of the company?

This announcement also disclosed the highly anticipated project revenue nodes. The announcement shows that the Century Huatong Shanghai Data Center project is accelerating project progress to be put into use as soon as possible. It is expected to officially enter the operation period of the first batch of delivered cabinets in the second half of 2023 and generate operating income. It is expected that the net profit will turn positive in 2025; The Shenzhen Data Center project is expected to officially enter the operational period of delivering the first batch of cabinets in the second half of 2023 and generate operating revenue, with net profit expected to turn positive in 2025. As of now, the Shanghai data center project has gradually generated operating revenue by delivering cabinets.

At present, with the surge in demand for computing power in the digital economy and AI, various provinces and cities have introduced preferential policies and mechanisms to encourage the development of data centers under the national new infrastructure policy. The stable and progressive development strategy of Century Huatong Data Center is bound to drive the further expansion of the company's business and consolidate the fundamental foundation of the company's sustainable development.

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