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GDS Holdings Ltd

GDS Holdings LtdGDSEarnings & Financial Report

Nasdaq · Information Technology · Services-Computer Programming, Data Processing, Etc.

Amadeus IT Group, S.A. is a major Spanish multinational technology company that provides software for the global travel and tourism industry. It is the world's leading provider of travel technology that focus on developing software for airlines, hotels, travel agencies, and other travel-related businesses.

What changed in GDS Holdings Ltd's 20-F — 2023 vs 2024

Top changes in GDS Holdings Ltd's 2024 20-F

1150 paragraphs added · 973 removed · 781 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

267 edited+144 added−78 removed752 unchanged
Information on the Company—B. Business Overview—Regulatory Matters—People’s Republic of China Regulations—Regulations Related to Artificial Intelligence.” The stringent regulatory requirements or restrictions may have a material adverse effect and affect our results of operations.
Information on the Company—B. Business Overview—Regulatory Matters Related to Our Business —People’s Republic of China Regulations—Regulations Related to Artificial Intelligence.” The stringent regulatory requirements or restrictions may have a material adverse effect and affect our results of operations.
Business Overview—Regulatory Matters—People’s Republic of China Regulations—Regulations Related to Filing and Energy Conservation of Fixed-Asset Investment.” These stringent regulatory requirements imposed by local authorities in the Tier 1 markets may also limit our ability to obtain the regulatory approvals for the development and operation of data centers, which are essential for us to obtain power supply and expand our business.
Business Overview—Regulatory Matters Related to Our Business —People’s Republic of China Regulations—Regulations Related to Filing and Energy Conservation of Fixed-Asset Investment.” These stringent regulatory requirements imposed by local authorities in the Tier 1 markets may also limit our ability to obtain the regulatory approvals for the development and operation of data centers, which are essential for us to obtain power supply and expand our business.
See “Item 4. Information on the Company—B. Business Overview—Regulatory Matters—People’s Republic of China Regulations—Regulations Related to Information Technology Outsourcing Services Provided to Banking Financial Institutions.” Service interruptions continue to be a significant risk for us and could affect our reputation, damage our relationships with customers and materially and adversely affect our business.
See “Item 4. Information on the Company—B. Business Overview—Regulatory Matters Related to Our Business—People’s Republic of China Regulations—Regulations Related to Information Technology Outsourcing Services Provided to Banking Financial Institutions.” Service interruptions continue to be a significant risk for us and could affect our reputation, damage our relationships with customers and materially and adversely affect our business.
If we fail to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate governance and business operations could be materially and adversely affected.
If we fail to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate governance and business operations could be materially and adversely affected.
For more details, see “Item 4. Information on the Company—B.
For more details, see “Item 4. Information on the Company—B.
In particular, if the PCAOB finds its ability to completely inspect and investigate registered public accounting firms headquartered in mainland China or Hong Kong is obstructed by the PRC authorities in any way in the future, the PCAOB may act immediately to consider the need to issue new determinations consistent with the HFCA Act.
In particular, if the PCAOB finds its ability to completely inspect and investigate registered public accounting firms headquartered in mainland China or Hong Kong is obstructed by the PRC authorities in any way in the future, the PCAOB may act immediately to consider the need to issue new determinations consistent with the HFCA Act.
We cannot assure you that the PCAOB will always have complete access to inspect and investigate our auditor, or that we will not be identified as an SEC-identified issuer again in the future.
We cannot assure you that the PCAOB will always have complete access to inspect and investigate our auditor, or that we will not be identified as an SEC-identified issuer again in the future.
If we are identified as an SEC-identified issuer again in the future, we cannot assure you that we will be able to change our auditor or take other remedial measures in a timely manner, and if we were to be identified as an SEC-identified issuer for two consecutive years, we would be delisted from the Nasdaq and our securities (including our shares and ADSs) will not be permitted for trading “over-the-counter” either.
If we are identified as an SEC-identified issuer again in the future, we cannot assure you that we will be able to change our auditor or take other remedial measures in a timely manner, and if we were to be identified as an SEC-identified issuer for two consecutive years, we would be delisted from the Nasdaq and our securities (including our shares and ADSs) will not be permitted for trading “over-the-counter” either.
If our securities are prohibited from trading in the United States, or threatened with such a prohibition, the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs and ordinary shares.
If our securities are prohibited from trading in the United States, or threatened with such a prohibition, the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs and ordinary shares.
Also, such a prohibition or any threat thereof would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.
Also, such a prohibition or any threat thereof would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.
Notwithstanding the foregoing, in the event that the Hong Kong Stock Exchange deemed us as having a dual primary listing in Hong Kong, we will be permitted to retain our existing weighted voting rights structure and our variable interest entity structure.
Notwithstanding the foregoing, in the event that the Hong Kong Stock Exchange deemed us as having a dual primary listing in Hong Kong, we will be permitted to retain our existing weighted voting rights structure and our variable interest entity structure.
In the event that some or all of our debt is accelerated and becomes immediately due and payable, we may not have the funds to repay, or the ability to refinance, such debt.
In the event that some or all of our debt is accelerated and becomes immediately due and payable, we may not have the funds to repay, or the ability to refinance, such debt.
Continued expansion increases the challenges we face in: ● obtaining suitable sites or land to build new data centers; ● establishing new operations at additional data centers and maintaining efficient use of the data center facilities we operate; ● managing a large and growing customer base with increasingly diverse requirements; ● expanding our service portfolio to cover a wider range of services, including managed cloud services; ● creating and capitalizing on economies of scale; ● being exposed to protectionist or national security policies that restrict our ability to invest in or acquire companies or develop, import or export certain technologies; ● obtaining additional capital to meet our future capital needs; ● recruiting, training and retaining a sufficient number of skilled technical, sales and management personnel; ● maintaining effective oversight over personnel and multiple data center locations; ● coordinating work among sites and project teams; and ● developing and improving our internal systems, particularly for managing our continually expanding business operations. 15 Table of Contents In addition, we have grown our business through acquisitions in the past and intend to continue selectively pursuing strategic partnerships and acquisitions to expand our business.
Continued expansion increases the challenges we face in: ● obtaining suitable sites or land to build new data centers; ● establishing new operations at additional data centers and maintaining efficient use of the data center facilities we operate; ● managing a large and growing customer base with increasingly diverse requirements; ● expanding our service portfolio to cover a wider range of services, including managed cloud services; ● creating and capitalizing on economies of scale; ● being exposed to protectionist or national security policies that restrict our ability to invest in or acquire companies or develop, import or export certain technologies; ● obtaining additional capital to meet our future capital needs; ● recruiting, training and retaining a sufficient number of skilled technical, sales and management personnel; ● maintaining effective oversight over personnel and multiple data center locations; ● coordinating work among sites and project teams; and ● developing and improving our internal systems, particularly for managing our continually expanding business operations. 17 Table of Contents In addition, we have grown our business through acquisitions in the past and intend to continue selectively pursuing strategic partnerships and acquisitions to expand our business.
Business Overview—Regulatory Matters—People’s Republic of China Regulations—Regulations Related to Taxation—Regulations Related to M&A and Overseas Listings.” If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Cybersecurity Review Measures, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rejected.
Business Overview—Regulatory Matters Related to Our Business —People’s Republic of China Regulations—Regulations Related to M&A and Overseas Listings.” If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Cybersecurity Review Measures, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rejected.
Limitations on the ability of VIEs to make remittance to the wholly-foreign owned enterprise and on the ability of our subsidiaries to pay dividends to us could limit our ability to access cash generated by the operations of those entities, including to make investments or acquisitions that could be beneficial to our businesses, pay dividends to our shareholders or otherwise fund and conduct our business. 68 Table of Contents In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification , or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transactions, banks shall check board resolutions regarding profit distribution, original copies of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years’ losses before remitting any profits.
Limitations on the ability of VIEs to make remittance to the wholly-foreign owned enterprise and on the ability of our subsidiaries to pay dividends to us could limit our ability to access cash generated by the operations of those entities, including to make investments or acquisitions that could be beneficial to our businesses, pay dividends to our shareholders or otherwise fund and conduct our business. 71 Table of Contents In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification , or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transactions, banks shall check board resolutions regarding profit distribution, original copies of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years’ losses before remitting any profits.
Business Overview—Regulatory Matters—People’s Republic of China Regulations—Regulations Related to Filing and Energy Conservation of Fixed-Asset Investment .” In addition to national laws and regulations, various provincial and municipal governments also issued in the past few years local regulations to impose additional regulatory requirements and tighten enforcement of such regulatory requirements on the construction and operation of data centers in order to conserve energy and reduce carbon emission.
Business Overview—Regulatory Matters Related to Our Business —People’s Republic of China Regulations—Regulations Related to Filing and Energy Conservation of Fixed-Asset Investment .” In addition to national laws and regulations, various provincial and municipal governments also issued in the past few years local regulations to impose additional regulatory requirements and tighten enforcement of such regulatory requirements on the construction and operation of data centers in order to conserve energy and reduce carbon emission.
Business Overview—Regulatory Matters—People’s Republic of China Regulations—Regulations Related to Information Technology Outsourcing Services Provided to Banking Financial Institutions” for information regarding regulations of banking and financial institutions that outsource their data center services to us, and “—Regulations Related to Land Use Rights and Construction” for information regarding restrictions on the new construction or expansion of data centers within the boundaries of the Beijing municipality.
Business Overview—Regulatory Matters Related to Our Business —People’s Republic of China Regulations—Regulations Related to Information Technology Outsourcing Services Provided to Banking Financial Institutions” for information regarding regulations of banking and financial institutions that outsource their data center services to us, and “—Regulations Related to Land Use Rights and Construction” for information regarding restrictions on the new construction or expansion of data centers within the boundaries of the Beijing municipality.
Share Ownership.” As a result of these appointment rights, nomination rights, dual-class ordinary share structure and ownership concentration, these shareholders have the ability to control or exert significant influence over important corporate matters, investors may be prevented from affecting important corporate matters involving our company that require approval of shareholders, including: ● the composition of our board of directors and, through it, any determinations with respect to our operations, business direction and policies, including the appointment and removal of officers; ● any determinations with respect to mergers or other business combinations; ● our disposition of substantially all of our assets; and ● any change in control. 58 Table of Contents These actions may be taken even if they are opposed by our other shareholders, including the holders of our ADSs and/or ordinary shares.
Share Ownership.” As a result of these appointment rights, nomination rights, dual-class ordinary share structure and ownership concentration, these shareholders have the ability to control or exert significant influence over important corporate matters, investors may be prevented from affecting important corporate matters involving our company that require approval of shareholders, including: ● the composition of our board of directors and, through it, any determinations with respect to our operations, business direction and policies, including the appointment and removal of officers; ● any determinations with respect to mergers or other business combinations; ● our disposition of substantially all of our assets; and ● any change in control. 62 Table of Contents These actions may be taken even if they are opposed by our other shareholders, including the holders of our ADSs and/or ordinary shares.
If we raise additional funds through further issuances of equity or equity-linked securities, our existing shareholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of the holders of our ordinary shares.
In particular, if we raise additional funds through further issuances of equity or equity-linked securities, our existing shareholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of the holders of our ordinary shares.
The relevant regulatory authorities would have discretion in dealing with such violations, including: ● revoking our business and operating licenses; ● levying fines on us; 55 Table of Contents ● confiscating any of our income that they deem to be obtained through illegal operations; ● shutting down a portion or all of our networks and servers; ● discontinuing or restricting our operations in mainland China; ● imposing conditions or requirements with which we may not be able to comply; ● requiring us to restructure our corporate and contractual structure; ● restricting or prohibiting our use of the proceeds from overseas offering to finance our consolidated VIEs’ business and operations; and ● taking other regulatory or enforcement actions that could be harmful to our business.
The relevant regulatory authorities would have discretion in dealing with such violations, including: ● revoking our business and operating licenses; 59 Table of Contents ● levying fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations; ● shutting down a portion or all of our networks and servers; ● discontinuing or restricting our operations in mainland China; ● imposing conditions or requirements with which we may not be able to comply; ● requiring us to restructure our corporate and contractual structure; ● restricting or prohibiting our use of the proceeds from overseas offering to finance our consolidated VIEs’ business and operations; and ● taking other regulatory or enforcement actions that could be harmful to our business.
In the past, we have grown our business through acquisitions and we expect to continue to evaluate and enter into discussions regarding potential strategic acquisition transactions and alliances to further expand our business, and, from time to time, we may have a number of pending investments and acquisitions that are subject to closing conditions.
In the past, we have grown our business through acquisitions and we may continue to evaluate and enter into discussions regarding potential strategic acquisition transactions and alliances to further expand our business, and, from time to time, we may have a number of pending investments and acquisitions that are subject to closing conditions.
Such a partnership is subject to the risks outlined below, and more generally, to the same types of business risks as would impact our business operations when pursued on a cooperative basis: ● we may not have the right to exercise sole decision-making authority regarding the joint venture and strategic partnerships; ● our partner may become bankrupt or fail to pay the relevant consideration for the cooperation with us; ● our partner’s interests may not be aligned with our interests, our partner may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may take actions contrary to our policies or objectives; ● our partner may take actions unrelated to our business agreement but which reflect adversely on us because of our joint venture; ● changes in the terms of the arrangements of our partnerships may materially and adversely affect our ability to complete or operate projects we are pursuing or contemplating through joint venture partnerships; ● disputes between us and our partner may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our business; and ● we may in certain circumstances be liable for the actions of our partner or guarantee all or a portion of the joint venture’s liabilities.
Such a partnership is subject to the risks outlined below, and more generally, to the same types of business risks as would impact our business operations when pursued on a cooperative basis: ● we may not have the right to exercise sole decision-making authority regarding the joint venture and strategic partnerships; ● our partner may become bankrupt or fail to pay the relevant consideration for the cooperation with us; ● our partner’s interests may not be aligned with our interests, our partner may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may take actions contrary to our policies or objectives; 52 Table of Contents ● our partner may take actions unrelated to our business agreement but which reflect adversely on us because of our joint venture; ● changes in the terms of the arrangements of our partnerships may materially and adversely affect our ability to complete or operate projects we are pursuing or contemplating through joint venture partnerships; ● disputes between us and our partner may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our business; and ● we may in certain circumstances be liable for the actions of our partner or guarantee all or a portion of the joint venture’s liabilities.
In recent years, the bilateral relationship between China and the United States has been marked by intense potential conflicts between the two countries in trade, technology and other areas, and this has led to greater uncertainties in the geopolitical situations in other parts of the world affecting China and Chinese companies.
In recent years, the bilateral relationship between China and the United States has been marked by intense conflicts between the two countries in trade, technology and other areas, and this has led to greater uncertainties in the geopolitical situations in other parts of the world affecting China and Chinese companies.
Media reports on alleged violation of export control or economic and trade sanctions or data security and privacy laws, by us or by our customers, even on matters not involving us, could nevertheless damage our reputation and lead to regulatory investigations, fines and penalties against us.
Media reports on alleged violation of export control or economic and trade sanctions or data security and privacy laws, by us or by our customers or suppliers, even on matters not involving us, could nevertheless damage our reputation and lead to regulatory investigations, fines and penalties against us.
Any such class action lawsuit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. We are exposed to risks associated with the potential spin-off of one or more of our businesses. We are exposed to risks associated with the potential spin-off of one or more of our businesses.
Any such class action lawsuit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. We are exposed to risks associated with the potential spin-off of one or more of our businesses. We are exposed to risks associated with the potential spin-off listing of one or more of our businesses.
If we experience significant delays in the supply of power required to support the data center expansion or new construction, either during the design or construction phases, the progress of the data center expansion and/or construction could deviate from our original plans and we may fail to meet delivery schedules committed to customers, which could, among others, result in liability for penalties and loss of customers, and cause material and negative effect to our revenue growth, profitability and results of operations. 27 Table of Contents The occurrence of a catastrophic event or a prolonged disruption may exceed our insurance coverage by significant amounts.
If we experience significant delays in the supply of power required to support the data center expansion or new construction, either during the design or construction phases, the progress of the data center expansion and/or construction could deviate from our original plans and we may fail to meet delivery schedules committed to customers, which could, among others, result in liability for penalties and loss of customers, and cause material and negative effect to our revenue growth, profitability and results of operations. 29 Table of Contents The occurrence of a catastrophic event or a prolonged disruption may exceed our insurance coverage by significant amounts.
Based on the Q&A and our consultation with both the Designated Numbers and MIIT officials in 2014 and 2015, IDC services which did not utilize public telecommunications networks would also require an IDC license and that IDC services could only be provided by a holder of an IDC license, or a subsidiary of such holder, with the authorization of the holder. 38 Table of Contents GDS Beijing obtained a cross-regional IDC license in November 2013, the scope of which now includes Shanghai, Suzhou, Beijing, Shenzhen, Chengdu, Guangzhou, Zhangjiakou, Langfang, Tianjin, Huizhou, Wulanchabu, Wuhan, Nantong and Chongqing.
Based on the Q&A and our consultation with both the Designated Numbers and MIIT officials in 2014 and 2015, IDC services which did not utilize public telecommunications networks would also require an IDC license and that IDC services could only be provided by a holder of an IDC license, or a subsidiary of such holder, with the authorization of the holder. 42 Table of Contents GDS Beijing obtained a cross-regional IDC license in November 2013, the scope of which now includes Shanghai, Suzhou, Beijing, Shenzhen, Chengdu, Guangzhou, Zhangjiakou, Langfang, Tianjin, Huizhou, Wulanchabu, Wuhan, Nantong and Chongqing.
Since a significant amount of our future net revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize net revenue generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, including holders of our ADSs and/or ordinary shares, and may limit our ability to obtain foreign currency through debt or equity financing for our subsidiaries, VIEs or their subsidiaries. 71 Table of Contents The audit report included in this annual report is prepared by an auditor which the U.S.
Since a significant amount of our future net revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize net revenue generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, including holders of our ADSs and/or ordinary shares, and may limit our ability to obtain foreign currency through debt or equity financing for our subsidiaries, VIEs or their subsidiaries. 74 Table of Contents The audit report included in this annual report is prepared by an auditor which the U.S.
We face risks including: ● a decline in the technology industry, such as a decrease in the use of mobile or web-based commerce, business layoffs or downsizing, relocation of businesses, increased costs of complying with existing or new government regulations and other factors; ● a reduction in cloud adoption or a slowdown in the growth of the internet generally as a medium for commerce and communication and the use of cloud-based platforms and services in particular; ● a downturn in the market for data center capacity generally, which could be caused by an oversupply of or reduced demand for space, and a downturn in cloud-based data center demand in particular; 14 Table of Contents ● the rapid development of new technologies or the adoption of new industry standards that render our or our customers’ current products and services obsolete or unmarketable and, in the case of our customers, that contribute to a downturn in their businesses, increasing the likelihood of a default under their service agreements or that they become insolvent; and ● a downturn in the overall economic environment, which causes material challenges to our customers in their own business, as a result of which they may move-in more slowly to our data centers, reduce the area utilized by them, pay only the minimum billable amount stated in customer agreements, or seek to renegotiate, terminate early, or not renew such agreements at expiry. ​ To the extent that any of these or other adverse conditions occur, they are likely to impact market demand and pricing for our services.
We face risks including: ● a decline in the technology industry, such as a decrease in the use of mobile or web-based commerce, business layoffs or downsizing, relocation of businesses, increased costs of complying with existing or new government regulations and other factors; ● a reduction in cloud and artificial intelligence adoption, or a slowdown in the growth of the internet generally as a medium for commerce and communication and the use of cloud-based platforms and artificial intelligence technologies in particular; 15 Table of Contents ● a downturn in the market for data center capacity generally, which could be caused by an oversupply of or reduced demand for space, and a downturn in cloud-based data center demand in particular; ● the rapid development of new technologies or the adoption of new industry standards that render our or our customers’ current products and services obsolete or unmarketable and, in the case of our customers, that contribute to a downturn in their businesses, increasing the likelihood of a default under their service agreements or that they become insolvent; and ● a downturn in the overall economic environment, which causes material challenges to our customers in their own business, as a result of which they may move-in more slowly to our data centers, reduce the area utilized by them, pay only the minimum billable amount stated in customer agreements, or seek to renegotiate, terminate early, or not renew such agreements at expiry. ​ To the extent that any of these or other adverse conditions occur, they are likely to impact market demand and pricing for our services.
While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within mainland China may further increase difficulties faced by you in protecting your interests. 67 Table of Contents The enforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-related regulations in the PRC may increase our labor costs, impose limitations on our labor practices and adversely affect our business and our results of operations.
While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within mainland China may further increase difficulties faced by you in protecting your interests. 70 Table of Contents The enforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-related regulations in the PRC may increase our labor costs, impose limitations on our labor practices and adversely affect our business and our results of operations.
Following these rules and regulations, government authorities may allocate more energy quota to certain areas within the ten designated data center clusters where we have not yet secured resources and remove favorable land and tax policies in areas outside such data center clusters where we have already secured resources, which may have adverse effects on our business. 24 Table of Contents In addition, more stringent regulatory requirements in terms of key aspects such as PUE and utilization rate have been imposed in the designated data center clusters following the introduction of “East Data and West Computation” policy.
Following these rules and regulations, government authorities may allocate more energy quota to certain areas within the ten designated data center clusters where we have not yet secured resources and remove favorable land and tax policies in areas outside such data center clusters where we have already secured resources, which may have adverse effects on our business. 26 Table of Contents In addition, more stringent regulatory requirements in terms of key aspects such as PUE and utilization rate have been imposed in the designated data center clusters following the introduction of “East Data and West Computation” policy.
In addition, any assertions of alleged breaches in cybersecurity or data security or IT systems failures made against us, whether true or not, could harm our reputation, cause us to incur substantial legal fees and have a material adverse effect on our business, reputation, financial condition and results of operations. 28 Table of Contents Our ability to provide data center services depends on the major telecommunications carriers in China providing sufficient network services to our customers in the data center facilities that we operate on commercially acceptable terms.
In addition, any assertions of alleged breaches in cybersecurity or data security or IT systems failures made against us, whether true or not, could harm our reputation, cause us to incur substantial legal fees and have a material adverse effect on our business, reputation, financial condition and results of operations. 30 Table of Contents Our ability to provide data center services depends on the major telecommunications carriers in China providing sufficient network services to our customers in the data center facilities that we operate on commercially acceptable terms.
However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong enterprise must directly hold no less than 25% share ownership in the PRC enterprise during the 12 consecutive months preceding its receipt of the dividends. 69 Table of Contents Dividends payable to our foreign investors and gains on the sale of our ADSs and/or ordinary shares by our foreign investors may become subject to PRC tax.
However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong enterprise must directly hold no less than 25% share ownership in the PRC enterprise during the 12 consecutive months preceding its receipt of the dividends. 72 Table of Contents Dividends payable to our foreign investors and gains on the sale of our ADSs and/or ordinary shares by our foreign investors may become subject to PRC tax.
If these cloud service providers fail to perform as required under our agreements for any reason or suffer service level interruptions or other performance issues, or if our customers are less satisfied than expected with the services provided or results obtained, we may not realize the anticipated benefits of these relationships. 41 Table of Contents We may not be able to keep up with rapidly changing technology, including our ability to upgrade our power, cooling, security or connectivity systems cost-effectively or at all.
If these cloud service providers fail to perform as required under our agreements for any reason or suffer service level interruptions or other performance issues, or if our customers are less satisfied than expected with the services provided or results obtained, we may not realize the anticipated benefits of these relationships. 45 Table of Contents We may not be able to keep up with rapidly changing technology, including our ability to upgrade our power, cooling, security or connectivity systems cost-effectively or at all.
Huang chooses to settle these transactions by transferring ownership of the subject ordinary shares to the counterparties, his beneficial ownership interest in our total issued share capital may decrease to below 2.75%, which would trigger an automatic conversion event, unless he otherwise acquires beneficial ownership of additional shares to keep his beneficial ownership at or above 2.75%. 19 Table of Contents Should this happen, all Class B ordinary shares would automatically convert into Class A ordinary shares, and the dual-class share structure would thereby be terminated.
Huang chooses to settle these transactions by transferring ownership of the subject ordinary shares to the counterparties, his beneficial ownership interest in our total issued share capital may decrease to below 2.75%, which would trigger an automatic conversion event, unless he otherwise acquires beneficial ownership of additional shares to keep his beneficial ownership at or above 2.75%. 21 Table of Contents Should this happen, all Class B ordinary shares would automatically convert into Class A ordinary shares, and the dual-class share structure would thereby be terminated.
Any such changes could increase our compliance costs, divert management’s attention or interfere with our ability to serve customers, any of which could harm our results of operations. 40 Table of Contents In addition, if future PRC laws or regulations governing the VATS industry require that we obtain additional licenses or permits or update existing licenses in order to continue to provide our IDC services, there can be no assurance that we would be able to obtain such licenses or permits or update existing licenses in a timely manner, or at all.
Any such changes could increase our compliance costs, divert management’s attention or interfere with our ability to serve customers, any of which could harm our results of operations. 44 Table of Contents In addition, if future PRC laws or regulations governing the VATS industry require that we obtain additional licenses or permits or update existing licenses in order to continue to provide our IDC services, there can be no assurance that we would be able to obtain such licenses or permits or update existing licenses in a timely manner, or at all.
Geopolitical tensions have led to adverse trends in the areas of trade, technology and even finance between China and the United States and these adverse trends may continue, which could negatively affect our business operations and results of operations.
Geopolitical tensions have led to adverse trends in the areas of trade, technology and finance between China and the United States and these adverse trends may continue, which could negatively affect our business operations and results of operations.
If we cannot resolve any conflicts of interest or disputes between us and the shareholders of the consolidated VIEs, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings. 57 Table of Contents In order to enhance corporate governance and facilitate administration of the VIEs and their subsidiaries, we have also replaced the sole director of GDS Shanghai and certain subsidiaries of GDS Beijing with a board of three directors.
If we cannot resolve any conflicts of interest or disputes between us and the shareholders of the consolidated VIEs, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings. 61 Table of Contents In order to enhance corporate governance and facilitate administration of the VIEs and their subsidiaries, we have also replaced the sole director of GDS Shanghai and certain subsidiaries of GDS Beijing with a board of three directors.
See “—Risks Related to Our ADSs and Class A Ordinary Shares—We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong Stock Exchange.” 72 Table of Contents If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future, our ADSs may be prohibited from trading in the United States under the HFCA Act, as amended, and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment. ​ The HFCA Act was signed into law on December 18, 2020 and amended pursuant to the Consolidated Appropriations Act, 2023 on December 29, 2022.
See “—Risks Related to Our ADSs and Class A Ordinary Shares—We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong Stock Exchange.” If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future, our ADSs may be prohibited from trading in the United States under the HFCA Act, as amended, and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment. ​ The HFCA Act was signed into law on December 18, 2020 and amended pursuant to the Consolidated Appropriations Act, 2023 on December 29, 2022.
It is also possible that the PRC government may prohibit a non-compliant entity from continuing to carry on its business, which would materially and adversely affect our results of operations, expected growth and prospects. 39 Table of Contents Some of the consolidated VIEs may be regarded as being non-compliant with the regulations on VATS, due to operating beyond the permitted scope of their IDC licenses.
It is also possible that the PRC government may prohibit a non-compliant entity from continuing to carry on its business, which would materially and adversely affect our results of operations, expected growth and prospects. 43 Table of Contents Some of the consolidated VIEs may be regarded as being non-compliant with the regulations on VATS, due to operating beyond the permitted scope of their IDC licenses.
We cannot assure you that our future offering will be subject to cybersecurity review by the CAC or other competent authorities, and if so, we may not be able to pass such review. 64 Table of Contents We believe that we are in compliance with the regulations and policies that have been issued by the CAC and other competent PRC regulatory authorities on cybersecurity in all material respects as of the date of this annual report.
We cannot assure you that our future offering will be subject to cybersecurity review by the CAC or other competent authorities, and if so, we may not be able to pass such review. 67 Table of Contents We believe that we are in compliance with the regulations and policies that have been issued by the CAC and other competent PRC regulatory authorities on cybersecurity in all material respects as of the date of this annual report.
We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from our operations, and our business and operations may be materially and adversely affected. ​ 59 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the 2019 PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from our operations, and our business and operations may be materially and adversely affected. ​ 63 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the 2019 PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
Foreign investment in VATS (other than e-commerce, domestic multi-party communications, store-and-forward and call center), including internet data center services, still falls within the Negative List (2021). Specifically, the Administrative Regulations on Foreign-Invested Telecommunications Enterprises restrict the ultimate capital contribution percentage held by foreign investor(s) in a foreign-invested VATS enterprise to 50% or less.
Foreign investment in VATS (other than e-commerce, domestic multi-party communications, store-and-forward and call center), including internet data center services, still falls within the Negative List (2024). Specifically, the Administrative Regulations on Foreign-Invested Telecommunications Enterprises restrict the ultimate capital contribution percentage held by foreign investor(s) in a foreign-invested VATS enterprise to 50% or less.
Any policy or regulatory change may cause us to incur compliance costs.” 37 Table of Contents We may be regarded as being non-compliant with the regulations on VATS due to the lack of IDC licenses for which penalties may be assessed that may materially and adversely affect our business, financial condition, growth strategies and prospects.
Any policy or regulatory change may cause us to incur compliance costs.” ​ 41 Table of Contents We may be regarded as being non-compliant with the regulations on VATS due to the lack of IDC licenses for which penalties may be assessed that may materially and adversely affect our business, financial condition, growth strategies and prospects.
Any periods of continuing or worsening increased or heightened volatility in financial, equity and other markets, particularly due to investor concerns relating to the Russia-Ukraine conflict, the Israel-Hamas conflict, or uncertainty about the future relationship between the PRC and the U.S., could limit our ability to raise funds, pursue further business expansion and maintain revenue growth.
Any periods of continuing or worsening increased or heightened volatility in financial, equity and other markets, particularly due to investor concerns relating to the Russia-Ukraine conflict, the Israel-Hamas conflict, trade war or uncertainty about the future relationship between the PRC and the U.S., could limit our ability to raise funds, pursue further business expansion and maintain revenue growth.
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. For the years ended December 31, 2022 and 2023, impairment losses of long-lived assets of RMB12.8 million and RMB3,013.4 million (US$424.4 million) were recognized, respectively.
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. For the years ended December 31, 2022 and 2023, impairment losses of long-lived assets of RMB12.8 million and RMB3,013.4 million were recognized, respectively.
In addition, our Articles of Association provide that STT GDC, has the right to appoint up to three directors to our board of directors for so long as they beneficially own certain percentages of our issued share capital. Such appointments will not be subject to a vote by our shareholders. See “Item 6. Directors, Senior Management and Employees—C.
In addition, our Articles of Association provide that STT Garnet, has the right to appoint up to three directors to our board of directors for so long as they beneficially own certain percentages of our issued share capital. Such appointments will not be subject to a vote by our shareholders. See “Item 6. Directors, Senior Management and Employees—C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.” Following the Statement of Protocol signed between the PCAOB and the CSRC and the Ministry of Finance of the PRC, or MOF, in August 2022 and the on-site inspections and investigations conducted by the PCAOB staff in Hong Kong from September to November 2022, the PCAOB Board voted in December 2022 to vacate the previous 2021 determinations, and as a result, our auditor, KPMG Huazhen LLP, is no longer a registered public accounting firm that the PCAOB is unable to inspect or investigate completely as of the date of this annual report or at the time of issuance of the audit report included herein.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.” Following the Statement of Protocol signed between the PCAOB and the CSRC and the Ministry of Finance of the PRC, or MOF, in August 2022 and the on-site inspections and investigations conducted by the PCAOB staff in Hong Kong from September to November 2022, the PCAOB Board voted in December 2022 to vacate the previous 2021 determinations, and as a result, our auditor is no longer a registered public accounting firm that the PCAOB is unable to inspect or investigate completely as of the date of this annual report or at the time of issuance of the audit report included herein.
Key Information—D. Risk Factors—Risks Related to Doing Business in the People’s Republic of China.” 10 Table of Contents The PRC government’s authority in regulating our operations, as well as its oversight over offerings conducted overseas by, and foreign investment in, China-based issuers, could impact our ability to offer or continue to offer securities to investors.
Key Information—D. Risk Factors—Risks Related to Doing Business in the People’s Republic of China.” 11 Table of Contents The PRC government’s authority in regulating our operations, as well as its oversight over offerings conducted overseas by, and foreign investment in, China-based issuers, could impact our ability to offer or continue to offer securities to investors.
These measures may cause decreased economic activity, which in turn could lead to a reduction in demand for our services and consequently have a material adverse effect on our businesses, financial condition and results of operations. 60 Table of Contents We face various legal and operational risks and uncertainties as a company based in and primarily operating in China.
These measures may cause decreased economic activity, which in turn could lead to a reduction in demand for our services and consequently have a material adverse effect on our businesses, financial condition and results of operations. 64 Table of Contents We face various legal and operational risks and uncertainties as a company based in and primarily operating in China.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.” Following the Statement of Protocol signed between the PCAOB and the CSRC and the Ministry of Finance of the PRC in August 2022 and the on-site inspections and investigations conducted by the PCAOB staff in Hong Kong from September to November 2022, the PCAOB Board voted in December 2022 to vacate the previous 2021 determinations, and as a result, our auditor, KPMG Huazhen LLP, is no longer a registered public accounting firm that the PCAOB is unable to inspect or investigate completely as of the date of this annual report or at the time of issuance of the audit report included herein.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.” Following the Statement of Protocol signed between the PCAOB and the CSRC and the Ministry of Finance of the PRC in August 2022 and the on-site inspections and investigations conducted by the PCAOB staff in Hong Kong from September to November 2022, the PCAOB Board voted in December 2022 to vacate the previous 2021 determinations, and as a result, our auditor is no longer a registered public accounting firm that the PCAOB is unable to inspect or investigate completely as of the date of this annual report or at the time of issuance of the audit report included herein.
Given the complex and changing regulatory environment as well as potential difficulties in enforcing a court judgment in mainland China, there is no guarantee that we would be able to halt any unauthorized use of our intellectual property in mainland China through litigation. 42 Table of Contents We may be subject to third-party claims of intellectual property infringement.
Given the complex and changing regulatory environment as well as potential difficulties in enforcing a court judgment in mainland China, there is no guarantee that we would be able to halt any unauthorized use of our intellectual property in mainland China through litigation. 46 Table of Contents We may be subject to third-party claims of intellectual property infringement.
In recent years, the U.S. government and other governments have threatened and/or imposed export controls, economic sanctions, or other trade restrictions on a number of China-based technology companies, including ZTE Corporation, Huawei Technologies Co., Ltd., or Huawei, and certain of their respective affiliates and other China-based technology companies, as well as taken other actions against Huawei and related persons.
In recent years, the U.S. government and other governments have threatened and/or imposed export controls, economic sanctions, or other trade restrictions on a number of China-based technology companies, including Huawei Technologies Co., Ltd., or Huawei, and certain of their respective affiliates and other China-based technology companies, as well as taken other actions against Huawei and related persons.
These contractual arrangements provide us with effective control over the consolidated VIEs, and enable us to receive substantially all of the economic benefits of the consolidated VIEs and their subsidiaries in consideration for the services provided by our wholly-owned mainland China subsidiaries, and have an exclusive option to purchase all of the equity interest in the consolidated VIEs when permissible under PRC laws.
These contractual arrangements provide us with effective control over the consolidated VIEs, and enable us to receive substantially all of the economic benefits of the consolidated VIEs and their subsidiaries in consideration for the services provided by our consolidated mainland China subsidiaries, and have an exclusive option to purchase all of the equity interest in the consolidated VIEs when permissible under PRC laws.
Risk Factors—Risks Relating to Our Business and Industry—We may fail to obtain, maintain and update licenses or permits necessary to conduct our operations in the PRC, and our business may be materially and adversely affected as a result of any changes in the laws and regulations governing the VATS industry in the PRC.” 12 Table of Contents A. [Reserved] B.
Risk Factors—Risks Relating to Our Business and Industry—We may fail to obtain, maintain and update licenses or permits necessary to conduct our operations in the PRC, and our business may be materially and adversely affected as a result of any changes in the laws and regulations governing the VATS industry in the PRC.” 13 Table of Contents A. [Reserved] B.
Based on the past and projected composition of our income and assets and the valuation of our assets, we do not believe we were a passive foreign investment company, or PFIC, for our most recent taxable year and we do not expect to become one in the future, although there can be no assurance in this regard.
Based on the past and projected composition of our income and assets and the valuation of our assets, we do not believe we were a passive foreign investment company, or PFIC, for our most recent taxable year and we do not expect to become one for our current taxable year or in the foreseeable future, although there can be no assurance in this regard.
Such closures could severely disrupt our business operations and adversely affect our results of operations. 53 Table of Contents If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired. We are subject to the reporting requirements of the U.S.
Such closures could severely disrupt our business operations and adversely affect our results of operations. 57 Table of Contents If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired. We are subject to the reporting requirements of the U.S.
According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. 66 Table of Contents Mr.
According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. 69 Table of Contents Mr.
Even if such assertions against us are unsuccessful, they may cause us to lose existing and future business and incur reputational harm and substantial legal fees. 43 Table of Contents We rely on third-party suppliers for key elements of our facilities, equipment, network infrastructure and software.
Even if such assertions against us are unsuccessful, they may cause us to lose existing and future business and incur reputational harm and substantial legal fees. 47 Table of Contents We rely on third-party suppliers for key elements of our facilities, equipment, network infrastructure and software.
Business Overview - Regulatory Matters - People’s Republic of China Regulations - Regulations on Foreign Investment Restrictions.” Because we are a Cayman Islands company, we are classified as a foreign enterprise under PRC laws and regulations, and our wholly owned mainland China subsidiaries or PRC joint ventures are foreign-invested enterprises, or their subsidiaries.
Business Overview—Regulatory Matters Related to Our Business—People’s Republic of China Regulations—Regulations on Foreign Investment Restrictions.” Because we are a Cayman Islands company, we are classified as a foreign enterprise under PRC laws and regulations, and our wholly owned mainland China subsidiaries or PRC joint ventures are foreign-invested enterprises, or their subsidiaries.
However, these employment agreements do not ensure the continued service of these senior management and key personnel, and we may not be able to enforce the confidentiality agreements we have with our personnel. In addition, we do not maintain key man life insurance for any of the senior members of our management team or our key personnel.
Furthermore, our employment agreements do not ensure the continued service of these senior management and key personnel, and we may not be able to enforce the confidentiality agreements we have with our personnel. In addition, we do not maintain key man life insurance for any of the senior members of our management team or our key personnel.
In addition, if China were to increase the tariff on any of the items imported by our suppliers and contract manufacturers from the U.S., they might not be able to find substitutes with the same quality and price in China or from other countries.
In addition, if China were to increase the tariff on any of the items imported by our suppliers from the U.S., they might not be able to find substitutes with the same quality and price in China or from other countries.
Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among our wholly-owned mainland China subsidiaries, the consolidated VIEs and their shareholders is valid, legally binding and enforceable in accordance with its terms.
Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among our consolidated mainland China subsidiaries, the consolidated VIEs and their shareholders is valid, legally binding and enforceable in accordance with its terms.
Other management members of us and board appointees serve as directors and officers of Management HoldCo, GDS Investment Company, GDS Beijing, and certain subsidiaries of GDS Beijing and GDS Shanghai. 56 Table of Contents For a description of the abovementioned contractual arrangements, see “Item 4. Information on the Company— C.
Other management members of us and board appointees serve as directors and officers of Management HoldCo, GDS Investment Company, GDS Beijing, and certain subsidiaries of GDS Beijing and GDS Shanghai. 60 Table of Contents For a description of the abovementioned contractual arrangements, see “Item 4. Information on the Company— C.
Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S., mainland China, Hong Kong, Macau, Singapore, Malaysia or Indonesia authorities or the authorities of any other foreign jurisdictions, could adversely impact our reputation, cause us to lose customer sales and access to colocation facilities and telecommunications resources, and lead to other adverse impacts on our business, financial condition and results of operations.
Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S., mainland China, Hong Kong or Macau authorities or the authorities of any other foreign jurisdictions, could adversely impact our reputation, cause us to lose customer sales and access to colocation facilities and telecommunications resources, and lead to other adverse impacts on our business, financial condition and results of operations.
These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. We are a foreign private issuer within the meaning of the rules under the U.S.
These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. 85 Table of Contents We are a foreign private issuer within the meaning of the rules under the U.S.
Although we believe that the trend is for companies in China and Southeast Asia to outsource more of their data center facilities and operations to colocation data center service providers, there can be no assurance that this trend will continue.
Although we believe that the trend is for companies in China to outsource more of their data center facilities and operations to colocation data center service providers, there can be no assurance that this trend will continue.
Notwithstanding the foregoing, in the event that the Hong Kong Stock Exchange deemed us as having a dual primary listing in Hong Kong, we will be permitted to retain our existing weighted voting rights structure and our variable interest entity structure. 84 Table of Contents Exchange between our ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.
Notwithstanding the foregoing, in the event that the Hong Kong Stock Exchange deemed us as having a dual primary listing in Hong Kong, we will be permitted to retain our existing weighted voting rights structure and our variable interest entity structure. Exchange between our ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.
In this regard, at our annual general meeting, or AGM, held on June 5, 2023, our shareholders passed ordinary resolutions authorizing our board of directors to approve the allotment or issuance, in the 12-month period from the date of the AGM, of ordinary shares or other equity or equity-linked securities of our company up to an aggregate thirty percent (30%) of our existing issued share capital at the date of the AGM, whether in a single transaction or a series of transactions (other than any allotment or issues of shares on the exercise of any options that have been granted by our company).
In this regard, at our annual general meeting, or AGM, held on June 27, 2024, our shareholders passed ordinary resolutions authorizing our board of directors to approve the allotment or issuance, in the 12-month period from the date of the AGM, of ordinary shares or other equity or equity-linked securities of our company up to an aggregate thirty percent (30%) of our existing issued share capital at the date of the AGM, whether in a single transaction or a series of transactions (other than any allotment or issues of shares on the exercise of any options that have been granted by our company).
See “—Risks Related to Our ADSs and Class A Ordinary Shares—We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong Stock Exchange.” Additionally, any actual delisting determination could seriously decrease or eliminate the value of an investment in our ADSs.
See “—Risks Related to Our ADSs and Class A Ordinary Shares—We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong Stock Exchange.” 77 Table of Contents Additionally, any actual delisting determination could seriously decrease or eliminate the value of an investment in our ADSs.
Exporting, re-exporting or transferring items in violation of the EAR could result in criminal and/or civil penalties. The U.S. Department of Commerce has indicated that engaging in activities contrary to U.S. national security and/or foreign policy interests would be grounds for inclusion on the Entity List. Furthermore, on June 3, 2021, U.S.
Exporting, re-exporting or transferring items in violation of the EAR could result in criminal and/or civil penalties. The U.S. Department of Commerce has indicated that engaging in activities contrary to U.S. national security and/or foreign policy interests would be grounds for inclusion on the Entity List. 36 Table of Contents Furthermore, on June 3, 2021, U.S.
Any disruptions or continuing or worsening slowdown in the global economy or the PRC economy, whether as a result of the Russia-Ukraine conflict, the Israel-Hamas conflict, uncertainty about the future relationship between the PRC and the U.S., or other reasons, could significantly impact and reduce domestic commercial activities in China, which may lead to decreased demand for our colocation or managed services and have a negative impact on our business, financial condition and results of operations.
Any disruptions or continuing or worsening slowdown in the global economy or the PRC economy, whether as a result of the Russia-Ukraine conflict, the Israel-Hamas conflict, escalating international trade wars and uncertainty about the future relationship between the PRC and the U.S., or other reasons, could significantly impact and reduce domestic commercial activities in China, which may lead to decreased demand for our colocation or managed services and have a negative impact on our business, financial condition and results of operations.
If our net revenue or operating results do not meet or exceed the expectations of investors or securities analysts, the price of our ADSs and/or ordinary shares may decline. 50 Table of Contents Declining valuation of long-lived assets could result in impairment charges, the determination of which involves a significant amount of judgment on our part.
If our net revenue or operating results do not meet or exceed the expectations of investors or securities analysts, the price of our ADSs and/or ordinary shares may decline. Declining valuation of long-lived assets could result in impairment charges, the determination of which involves a significant amount of judgment on our part.
We have also granted registration rights to certain other shareholders, including STT GDC and PA Goldilocks Limited, an affiliate of China Ping An Insurance Overseas (Holdings) Limited (a subsidiary of Ping An Insurance (Group) Company of China).
We have also granted registration rights to certain other shareholders, including STT Garnet and PA Goldilocks Limited, an affiliate of China Ping An Insurance Overseas (Holdings) Limited (a subsidiary of Ping An Insurance (Group) Company of China).
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. 81 Table of Contents Since we are a Cayman Islands exempted company, the rights of our shareholders may be different from those of shareholders of a company organized in the United States or Hong Kong.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. Since we are a Cayman Islands exempted company, the rights of our shareholders may be different from those of shareholders of a company organized in the United States or Hong Kong.
Some of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time and expenses in training our employees, which increases their value to competitors who may seek to recruit them.
Some of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. 54 Table of Contents In addition, we invest significant time and expenses in training our employees, which increases their value to competitors who may seek to recruit them.
Costs of power account for a significant portion of our cost of revenue. Power costs may be included in the costs for our services, or we may charge our customers separately for actual power consumed. The NDRC is introducing gradual market-oriented reform to the power markets. See “Item 4. Information on the Company—B.
Costs of power account for a significant portion of our cost of revenue. Power costs may be included in the costs for our services, or we may charge our customers separately for actual power consumed. 24 Table of Contents The NDRC is introducing gradual market-oriented reform to the power markets. See “Item 4. Information on the Company—B.
As of the date of this annual report, GDS Beijing and all of its subsidiaries (including GDS Suzhou, Beijing Wan Chang Yun Science & Technology Co., Ltd., or Beijing Wan Chang Yun, Shenzhen Yaode Data Services Co., Ltd., or Shenzhen Yaode, Shanghai Waigaoqiao EDC Technology Co., Ltd. or EDC Shanghai Waigaoqiao, and Kunshan Wanyu Data Service Co., Ltd., or Kunshan Wanyu) have obtained their own IDC licenses respectively.
As of the date of this annual report, GDS Beijing and its subsidiaries (including GDS Suzhou, Beijing Wan Chang Yun Science & Technology Co., Ltd., or Beijing Wan Chang Yun, Shenzhen Yaode Data Services Co., Ltd., or Shenzhen Yaode, Shanghai Waigaoqiao EDC Technology Co., Ltd. or EDC Shanghai Waigaoqiao, Kunshan Wanyu Data Service Co., Ltd., or Kunshan Wanyu and Langfang Shengman Technology Co., Ltd., or Langfang Shengman) have obtained their own IDC licenses respectively.
Any significant decrease in demand for our services by customers in these industries, or other industries from which we derive significant net revenue in the future, may reduce the demand for our services. 32 Table of Contents We enter into fixed price agreements with many customers, and our failure to accurately estimate the resources and time required for the fulfillment of our obligations under these agreements could negatively affect our results of operations.
Any significant decrease in demand for our services by customers in these industries, or other industries from which we derive significant net revenue in the future, may reduce the revenue derived from such customers. 34 Table of Contents We enter into fixed price agreements with many customers, and our failure to accurately estimate the resources and time required for the fulfillment of our obligations under these agreements could negatively affect our results of operations.
Business Overview-Regulatory Matters-People’s Republic of China Regulations-Regulations Related to Taxation-Regulations Related to M&A and Overseas Listings.” 65 Table of Contents On February 17, 2023, the CSRC released several regulations regarding the filing requirements for overseas offerings and listings by domestic companies, including the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, or together with the Trial Measures, the New Regulations on Filing.
Business Overview-Regulatory Matters Related to Our Business -People’s Republic of China Regulations-Regulations Related to M&A and Overseas Listings.” 68 Table of Contents On February 17, 2023, the CSRC released several regulations regarding the filing requirements for overseas offerings and listings by domestic companies, including the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, or together with the Trial Measures, the New Regulations on Filing.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Pursuant to these regulations, the scope of power grid enterprises as power purchase agents should be narrowed down and industrial and commercial users are encouraged to enter the electricity market directly. Local authorities have also promulgated various requirements as to the electricity market.
Pursuant to these regulations, the scope of power grid enterprises as power purchase agents should be narrowed down and industrial and commercial users are encouraged to enter the electricity market directly. Local authorities have also promulgated various requirements.
The concerned banks may conduct random examination in accordance with the relevant requirements, in which case the certain evidentiary materials concerning authenticity of such funds may be required to be provided. SAFE Circular 37 SAFE Circular 37 replaced the former circular commonly known as Circular 75 promulgated by SAFE on October 21, 2005.
The concerned banks may conduct random examination in accordance with the relevant requirements, in which case certain evidentiary materials concerning authenticity of such funds may be required to be provided. SAFE Circular 37 SAFE Circular 37 replaced the former circular commonly known as Circular 75 promulgated by SAFE on October 21, 2005.
The Occupational Safety and Health Act 1994, or OSHA , imposes a duty on employers to ensure, so far as is practicable, the safety, health, and welfare at work of their employees. Effective 1 June 2024, the duty of employers under the OSHA will be expanded to include contractors, subcontractors, and employees employed by such contractors or subcontractors.
The Occupational Safety and Health Act 1994, or OSHA , imposes a duty on employers to ensure, so far as is practicable, the safety, health, and welfare at work of their employees. Effective June 1, 2024, the duty of employers under the OSHA will be expanded to include contractors, subcontractors, and employees employed by such contractors or subcontractors.
The purchase price should be equal to the minimum price required by PRC law or such other price as may be agreed by the parties in writing.
The purchase price should be equal to the minimum price required by PRC law or such other price as may be agreed by the parties in writing.
The Implementation Opinions on Promoting the Healthy and Orderly Development of Data Centers in Shanghai also provides that commitment made by the construction entity such as the equity structure, the construction plan and the energy conservation measures shall not be arbitrarily changed within the specified period of time after data centers are put into operation, and if the construction entity, after making rectification, still fails to meet the commitment resulting in serious inconsistency, the construction entity may be unable to apply for new projects in Shanghai in the future. ● On August 22, 2022, the NDRC, the MIIT, the Ministry of Finance of the People’s Republic of China, the Ministry of Ecology and Environment of the People’s Republic of China, the Ministry of Housing and Urban-Rural Development of the People’s Republic of China, the State-owned Assets Supervision and Administration Commission of the State Council and the National Energy Administration jointly published the Action Plan for Green and Low Carbon Development in the Information and Communication Industry (2022-2025) , according to which the PUE of large and extra-large data centers which are newly constructed shall be at or below 1.3 in the year 2025. ● On September 29, 2022, the Shanghai Municipal People’s Government published the Implementation Measures for Energy Conservation Review of Fixed Assets Investment Projects in Shanghai , according to which the impact of energy consumption projects on “Dual Control” and carbon peak targets should be evaluated when it comes to the review of the energy conservation report. ● On September 30, 2022, the Chongqing CEI, the Chongqing DRC, the Chongqing Municipal Bureau of Ecology and Environment, the Chongqing AIC, the Chongqing Finance Bureau and the Chongqing State-owned Assets Supervision and Administration Commission jointly published the Chongqing Industrial Energy Efficiency Improvement Action Plan , according to which the PUE of large and extra-large data centers which are newly constructed shall be at or below 1.25 in the year 2025. ● On October 10, 2022, the Shanghai Municipal People’s Government published the Comprehensive Work Implementation Plan for Energy Conservation and Emission Reduction in Shanghai during the “14th Five Year Plan” , according to which the PUE of newly constructed data centers and existing data centers after technical upgrade shall be at or below 1.3 and 1.4 respectively. ● On November 29, 2022, the Shanghai CEI and the Shanghai DRC jointly issued the Implementation Plan for Carbon Peak in Shanghai’s New Infrastructure Field , according to which: 1) the PUE of data centers which are newly constructed shall be at or below 1.3 and the PUE of large data centers which are located in the Yangtze River Delta Hub shall be at or below 1.25 during the Fourteenth Five-year plan period; 2) the PUE of newly constructed data centers and the existing data centers aims to be at or below 1.25 and 1.4 respectively during the Fifteenth Five-year plan period; and 3) the PUE of data centers with low energy efficiency aims to be at or below 1.4 after technical upgrade. 114 Table of Contents ● On December 2, 2022, the Guangdong DRC and the Guangdong IIT jointly issued the Opinions on Strengthening the Layout and Construction of Data Centers , according to which: 1) the average PUE of data centers which are newly constructed (other than the data centers located in data center clusters of national hubs) in Guangdong province shall be at or below 1.3; 2) the average PUE of data centers which are newly constructed and located in data center clusters of national hubs shall be at or below 1.25; 3) the PUE of the existing data centers should aim to be at or below 1.5 after technical upgrade; and 4) the average utilization rate of data centers in Guangdong Province should aim to reach 80%. ● On December 16, 2022, the Shanghai CEI issued a Notice on Collecting the Proposed New Data Center Project in 2022 , according to which the total designed rack capacity of a project should be no less than 18 MW and the average designed rack capacity of a single rack should be no less than 6 kW. ● On July 3, 2023, the Beijing DRC published the Several Provisions on Further Strengthening the Energy Conservation Review of Data Center Projects , which provides, among other things, that: 1) renewable energy usage plan shall be included in the energy conservation report, and renewable energy usage ratio of newly constructed data centers shall be increased gradually, which could be realized by means of renewable power trading and renewable energy certificates trading.
The Implementation Opinions on Promoting the Healthy and Orderly Development of Data Centers in Shanghai also provides that commitment made by the construction entity such as the equity structure, the construction plan and the energy conservation measures shall not be arbitrarily changed within the specified period of time after data centers are put into operation, and if the construction entity, after making rectification, still fails to meet the commitment resulting in serious inconsistency, the construction entity may be unable to apply for new projects in Shanghai in the future. ● On August 22, 2022, the NDRC, the MIIT, the Ministry of Finance of the People’s Republic of China, the Ministry of Ecology and Environment of the People’s Republic of China, the Ministry of Housing and Urban-Rural Development of the People’s Republic of China, the State-owned Assets Supervision and Administration Commission of the State Council and the National Energy Administration jointly published the Action Plan for Green and Low Carbon Development in the Information and Communication Industry (2022-2025) , according to which the PUE of large and extra-large data centers which are newly constructed shall be at or below 1.3 in the year 2025. ● On September 29, 2022, the Shanghai Municipal People’s Government published the Implementation Measures for Energy Conservation Review of Fixed Assets Investment Projects in Shanghai , according to which the impact of energy consumption projects on “Dual Control” and carbon peak targets should be evaluated when it comes to the review of the energy conservation report. ● On September 30, 2022, the Chongqing CEI, the Chongqing DRC, the Chongqing Municipal Bureau of Ecology and Environment, the Chongqing AIC, the Chongqing Finance Bureau and the Chongqing State-owned Assets Supervision and Administration Commission jointly published the Chongqing Industrial Energy Efficiency Improvement Action Plan , according to which the PUE of large and extra-large data centers which are newly constructed shall be at or below 1.25 in the year 2025. ● On October 10, 2022, the Shanghai Municipal People’s Government published the Comprehensive Work Implementation Plan for Energy Conservation and Emission Reduction in Shanghai during the “14th Five Year Plan” , according to which the PUE of newly constructed data centers and existing data centers after technical upgrade shall be at or below 1.3 and 1.4 respectively. ● On November 29, 2022, the Shanghai CEI and the Shanghai DRC jointly issued the Implementation Plan for Carbon Peak in Shanghai’s New Infrastructure Field , according to which: 1) the PUE of data centers which are newly constructed shall be at or below 1.3 and the PUE of large data centers which are located in the Yangtze River Delta Hub shall be at or below 1.25 during the Fourteenth Five-year plan period; 2) the PUE of newly constructed data centers and the existing data centers aims to be at or below 1.25 and 1.4 respectively during the Fifteenth Five-year plan period; and 3) the PUE of data centers with low energy efficiency aims to be at or below 1.4 after technical upgrade. ● On December 2, 2022, the Guangdong DRC and the Guangdong IIT jointly issued the Opinions on Strengthening the Layout and Construction of Data Centers , according to which: 1) the average PUE of data centers which are newly constructed (other than the data centers located in data center clusters of national hubs) in Guangdong province shall be at or below 1.3; 2) the average PUE of data centers which are newly constructed and located in data center clusters of national hubs shall be at or below 1.25; 3) the PUE of the existing data centers should aim to be at or below 1.5 after technical upgrade; and 4) the average utilization rate of data centers in Guangdong Province should aim to reach 80%. ● On December 16, 2022, the Shanghai CEI issued a Notice on Collecting the Proposed New Data Center Project in 2022 , according to which the total designed rack capacity of a project should be no less than 18 MW and the average designed rack capacity of a single rack should be no less than 6 kW. 117 Table of Contents ● On July 3, 2023, the Beijing DRC published the Several Provisions on Further Strengthening the Energy Conservation Review of Data Center Projects , which provides, among other things, that: 1) renewable energy usage plan shall be included in the energy conservation report, and renewable energy usage ratio of newly constructed data centers shall be increased gradually, which could be realized by means of renewable power trading and renewable energy certificates trading.
In addition, new construction or expansion of data centers which are involved in providing internet data services or information processing and storage support services is also prohibited within the boundaries of Beijing’s Dongcheng District, Xicheng District, and new construction or expansion of data centers which are involved in providing internet data services or information processing and storage support services, except for edge data centers and computing infrastructure meeting the requirements of the 2021-2023 Implementation Plan, is prohibited within the boundaries of Chaoyang District, Haidian District, Fengtai District, Shijingshan District and Tongzhou New Town. 113 Table of Contents ● On February 28, 2022, the Chongqing Commission of Economy and Informatization, or the Chongqing CEI, the Chongqing Development and Reform Commission, or the Chongqing DRC, the Chongqing Municipal Bureau of Ecology and Environment, the Chongqing Administration for Industry and Commerce, or the Chongqing AIC, and the Energy Bureau of Chongqing jointly published the Implementation Plan of Chongqing’s Strict Energy Efficiency Constraints Promoting Energy Conservation and Carbon Reduction in Key Areas , pursuant to which the PUE of large and extra-large data centers which are newly constructed shall be at or below 1.3, and the PUE of the existing data centers aim to be at or below 1.5 in the year 2025. ● On May 7, 2022, the Beijing EIT and the Beijing DRC jointly published the Comprehensive Governance Work Plan of Data Centers with Low Energy Efficiency , according to which the issuance of energy conservation review opinion may be withheld for areas where energy intensity or carbon intensity does not decrease but increases, or for areas or individual projects where the overall utilization rate of data centers which have been put into operation for one year with an annual energy consumption of 2,000 tons or more of standard coal is less than 50%. ● On June 24, 2022, the Shanghai CEI and the Shanghai DRC jointly issued the Implementation Opinions on Promoting the Healthy and Orderly Development of Data Centers in Shanghai , according to which construction entity shall operate data centers within two years after obtaining the energy consumption quota, otherwise, the energy consumption quota may be withdrawn by the competent governmental authority if appropriate.
In addition, new construction or expansion of data centers which are involved in providing internet data services or information processing and storage support services is also prohibited within the boundaries of Beijing’s Dongcheng District, Xicheng District, and new construction or expansion of data centers which are involved in providing internet data services or information processing and storage support services, except for edge data centers and computing infrastructure meeting the requirements of the 2021-2023 Implementation Plan, is prohibited within the boundaries of Chaoyang District, Haidian District, Fengtai District, Shijingshan District and Tongzhou New Town. ● On February 28, 2022, the Chongqing Commission of Economy and Informatization, or the Chongqing CEI, the Chongqing Development and Reform Commission, or the Chongqing DRC, the Chongqing Municipal Bureau of Ecology and Environment, the Chongqing Administration for Industry and Commerce, or the Chongqing AIC, and the Energy Bureau of Chongqing jointly published the Implementation Plan of Chongqing’s Strict Energy Efficiency Constraints Promoting Energy Conservation and Carbon Reduction in Key Areas , pursuant to which the PUE of large and extra-large data centers which are newly constructed shall be at or below 1.3, and the PUE of the existing data centers aim to be at or below 1.5 in the year 2025. ● On May 7, 2022, the Beijing EIT and the Beijing DRC jointly published the Comprehensive Governance Work Plan of Data Centers with Low Energy Efficiency , according to which the issuance of energy conservation review opinion may be withheld for areas where energy intensity or carbon intensity does not decrease but increases, or for areas or individual projects where the overall utilization rate of data centers which have been put into operation for one year with an annual energy consumption of 2,000 tons or more of standard coal is less than 50%. 116 Table of Contents ● On June 24, 2022, the Shanghai CEI and the Shanghai DRC jointly issued the Implementation Opinions on Promoting the Healthy and Orderly Development of Data Centers in Shanghai , according to which construction entity shall operate data centers within two years after obtaining the energy consumption quota, otherwise, the energy consumption quota may be withdrawn by the competent governmental authority if appropriate.
(3) Management HoldCo is held as to 20% by five management personnel designated by our board of directors namely, Yilin Chen (senior vice president, Southeast Asia business), Yan Liang (executive vice president, data center design, operation and delivery), Kejing Zhang (executive vice president, sales and service), Andy Wenfeng Li (general counsel, compliance officer, and company secretary) and Qi Wang (senior vice president, cloud and network business), respectively.
(3) Management HoldCo is held as to 20% by five management personnel designated by our board of directors namely, Yilin Chen (former senior vice president, Southeast Asia business), Yan Liang (executive vice president, data center design, operation and delivery), Kejing Zhang (executive vice president, sales and service), Andy Wenfeng Li (general counsel, compliance officer, and company secretary) and Qi Wang (senior vice president, cloud and network business), respectively.
Regulations Related to Information Technology Outsourcing Services Provided to Banking Financial Institutions On June 4, 2010, the CBIRC issued the Guidelines on the Management of Outsourcing Risks of Banking Financial Institutions , or the Guidelines, which requires that the banking financial institutions should manage risks in relation to outsourcing services, and thus, outsourcing services providers should meet the relevant standards and requirements with respect to their technical strength, service capacity, emergency response capacity, familiarity to the banking industry and etc., to pass the due diligence investigations conducted by the banking financial institutions pursuant to the Guidelines, and should also make commitments as to fulfilling reporting, cooperating, or other obligations as may be required by the banking financial institutions under the Guidelines. 110 Table of Contents On December 30, 2021, the CBIRC issued Notice of the General Office of the China Banking and Insurance Regulatory Commission on Issuing the Measures for the Regulation of Risks in the Information Technology Outsourcing by Banking and Insurance Institutions , or Circular 141.
Regulations Related to Information Technology Outsourcing Services Provided to Banking Financial Institutions On June 4, 2010, the CBIRC issued the Guidelines on the Management of Outsourcing Risks of Banking Financial Institutions , or the Guidelines, which requires that the banking financial institutions should manage risks in relation to outsourcing services, and thus, outsourcing services providers should meet the relevant standards and requirements with respect to their technical strength, service capacity, emergency response capacity, familiarity to the banking industry and etc., to pass the due diligence investigations conducted by the banking financial institutions pursuant to the Guidelines, and should also make commitments as to fulfilling reporting, cooperating, or other obligations as may be required by the banking financial institutions under the Guidelines. 113 Table of Contents On December 30, 2021, the CBIRC issued Notice of the General Office of the China Banking and Insurance Regulatory Commission on Issuing the Measures for the Regulation of Risks in the Information Technology Outsourcing by Banking and Insurance Institutions , or Circular 141.
Regulatory Matters People’s Republic of China Regulations The following is a summary of the material laws and regulations or requirements that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us. Our internet data center businesses are classified as VATS by the PRC government.
Regulatory Matters Related to Our Business People’s Republic of China Regulations The following is a summary of the material laws and regulations or requirements that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us. Our internet data center businesses are classified as VATS by the PRC government.
GDS Shanghai has obtained a cross-regional value-added telecommunications license which permits it to provide data center services across five cities in China: Beijing, Chengdu, Shanghai, Shenzhen and Suzhou, and GDS Suzhou has obtained a cross-regional value-added telecommunications license which permits it to provide data center services across 44 cities in China which can be divided into three categories: (i) data center services (including internet resources collaboration services), including Beijing, Tianjin, Zhangjiakou, Langfang, Dalian, Mudanjiang, Shanghai, Suzhou, Jiaxing, Yichang, Guangzhou, Shenzhen, Haikou, Chongqing, Chengdu and Lanzhou; (ii) data center services without internet resources collaboration services, including Changzhou, Nantong, Yancheng, Jinhua, Taizhou, Xiaogan, Wuhan, Zhuhai, Zhaoqing, Huizhou and Heyuan; and (iii) data center services limited to internet resources collaboration services, including Taiyuan, Wulanchabu, Changchun, Hefei, Fuzhou, Nanchang, Jinan, Zhengzhou, Changsha, Nanning, Guiyang, Kunming, Lhase, Xian, Xining, Yinchuan and Urumqi.
GDS Shanghai has obtained a cross-regional value-added telecommunications license which permits it to provide data center services across five cities in China: Beijing, Chengdu, Shanghai, Shenzhen and Suzhou, and GDS Suzhou has obtained a cross-regional value-added telecommunications license which permits it to provide data center services across 44 cities in China which can be divided into three categories: (i) data center services (including internet resources collaboration services), including Beijing, Tianjin, Zhangjiakou, Langfang, Dalian, Mudanjiang, Shanghai, Suzhou, Jiaxing, Yichang, Guangzhou, Shenzhen, Haikou, Chongqing, Chengdu and Lanzhou; (ii) data center services without internet resources collaboration services, including Changzhou, Nantong, Yancheng, Jinhua, Taizhou, Xiaogan, Wuhan, Zhuhai, Zhaoqing, Huizhou and Heyuan; and (iii) data center services limited to internet resources collaboration services, including Taiyuan, Wulanchabu, Changchun, Hefei, Fuzhou, Nanchang, Jinan, Zhengzhou, Changsha, Nanning, Guiyang, Kunming, Lhasa, Xian, Xining, Yinchuan and Urumqi.
According to the Land Registration Regulations promulgated by the State Land Administration Bureau, the predecessor of the MLR, on December 28, 1995 and implemented on February 1, 1996, all land use rights which are duly registered are protected by the law, and the land registration is achieved by the issue of a land use right certificate by the relevant authority to the land user. 111 Table of Contents Under the Administration Law of Urban Real Property of the People’s Republic of China , which was promulgated by the SCNPC on July 5, 1994 and amended on August 30, 2007, August 27, 2009 and August 26, 2019, the land must be developed in line with the purposes of the land and the deadline for commencement of construction as stipulated in the grant contract.
According to the Land Registration Regulations promulgated by the State Land Administration Bureau, the predecessor of the MLR, on December 28, 1995 and implemented on February 1, 1996, all land use rights which are duly registered are protected by the law, and the land registration is achieved by the issue of a land use right certificate by the relevant authority to the land user. 114 Table of Contents Under the Administration Law of Urban Real Property of the People’s Republic of China , which was promulgated by the SCNPC on July 5, 1994 and amended on August 30, 2007, August 27, 2009 and August 26, 2019, the land must be developed in line with the purposes of the land and the deadline for commencement of construction as stipulated in the grant contract.
The Q&A, although not an official law or regulation, is deemed by the market as a guideline in practice which reflected the attitude of MIIT as to the application for VATS licenses, especially as to IDC services. 109 Table of Contents To comply with the above restrictions and requirements, among others, GDS Beijing has obtained a cross-regional value-added telecommunications license which permits it to provide data center services, including internet resources collaboration services, across 14 cities in China: Beijing, Chengdu, Shanghai, Shenzhen, Suzhou, Guangzhou, Zhangjiakou, Langfang, Tianjin, Huizhou, Wulanchabu, Nantong, Wuhan and Chongqing.
The Q&A, although not an official law or regulation, is deemed by the market as a guideline in practice which reflected the attitude of MIIT as to the application for VATS licenses, especially as to IDC services. 112 Table of Contents To comply with the above restrictions and requirements, among others, GDS Beijing has obtained a cross-regional value-added telecommunications license which permits it to provide data center services, including internet resources collaboration services, across 14 cities in China: Beijing, Chengdu, Shanghai, Shenzhen, Suzhou, Guangzhou, Zhangjiakou, Langfang, Tianjin, Huizhou, Wulanchabu, Nantong, Wuhan and Chongqing.
A CSC is issued when a building or development has complied with all statutory requirements under the Building Control Act & Regulations and has obtained all necessary clearances from the technical departments (including URA, Land Transport Authority and Public Utilities Board).
A CSC is issued when a building or development has complied with all statutory requirements under the Building Control Act & Regulations and has obtained all necessary clearances from relevant technical departments (including URA, Land Transport Authority and Public Utilities Board).
However, the transfer of personal data out of Singapore is permitted only if the transferor has taken appropriate steps to ensure that the overseas recipient is bound by legally enforceable obligations to provide the transferred personal data with a standard of protection that is comparable to that under the PDPA. 133 Table of Contents The PDPC may give an organisation such directions as it thinks fit to ensure the organisation’s compliance with the PDPA, including for the organisation to (a) stop collecting, using or disclosing personal data in contravention of the PDPA; and/or (b) destroy personal data collected in contravention of the PDPA.
However, the transfer of personal data out of Singapore is permitted only if the transferor has taken appropriate steps to ensure that the overseas recipient is bound by legally enforceable obligations to provide the transferred personal data with a standard of protection that is comparable to that under the PDPA. 139 Table of Contents The PDPC may give an organisation such directions as it thinks fit to ensure the organisation’s compliance with the PDPA, including for the organisation to (a) stop collecting, using or disclosing personal data in contravention of the PDPA; and/or (b) destroy personal data collected in contravention of the PDPA.
Pursuant to the Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest Rates , which was issued by the STA on January 29, 2008 and supplemented and revised on February 29, 2008, and the Arrangement between Mainland China and the Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income , which became effective on December 8, 2006 and applies to income derived in any year of assessment commencing on or after April 1, 2007 in Hong Kong and in any year commencing on or after January 1, 2007 in the PRC, such withholding tax rate may be lowered to 5% if a Hong Kong enterprise is deemed the beneficial owner of any dividend paid by a mainland China subsidiary by PRC tax authorities and holds at least 25% of the equity interest in that particular mainland China subsidiary at all times within the 12-month period immediately before distribution of the dividends.
Pursuant to the Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest Rates , which was issued by the STA on January 29, 2008, supplemented and revised on February 29, 2008 and annulled on May 26, 2023, and the Arrangement between Mainland China and the Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income , which became effective on December 8, 2006 and applies to income derived in any year of assessment commencing on or after April 1, 2007 in Hong Kong and in any year commencing on or after January 1, 2007 in the PRC, such withholding tax rate may be lowered to 5% if a Hong Kong enterprise is deemed the beneficial owner of any dividend paid by a mainland China subsidiary by PRC tax authorities and holds at least 25% of the equity interest in that particular mainland China subsidiary at all times within the 12-month period immediately before distribution of the dividends.
The 2019 PRC Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. 106 Table of Contents Pursuant to the 2019 PRC Foreign Investment Law, foreign investment means the investment activities within the PRC directly or indirectly conducted by foreign natural persons, enterprises, and other organizations, or the foreign investor, including the following circumstances: a foreign investor acquires any shares, equities, portion of property, or other similar interest in an enterprise within the PRC.
The 2019 PRC Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. 108 Table of Contents Pursuant to the 2019 PRC Foreign Investment Law, foreign investment means the investment activities within the PRC directly or indirectly conducted by foreign natural persons, enterprises, and other organizations, or the foreign investor, including the following circumstances: a foreign investor acquires any shares, equities, portion of property, or other similar interest in an enterprise within the PRC.
Contractual Arrangements among GDS Investment Company, Management HoldCo, GDS Beijing and GDS Shanghai The currently effective contractual arrangements by and among our wholly-owned mainland China subsidiary, the consolidated VIEs, and the consolidated VIEs’ shareholders include (i) certain equity interest pledge agreements, shareholder voting rights proxy agreement, exclusive call option agreements and certain loan agreements, which provide us with effective control over the consolidated VIEs; (ii) certain exclusive technology license and service agreements and intellectual property rights license agreement, which allow us to receive substantially all of the benefits generated from the operations of the consolidated VIEs and their subsidiaries.
Contractual Arrangements among GDS Investment Company, Management HoldCo, GDS Beijing and GDS Shanghai The currently effective contractual arrangements by and among our consolidated mainland China subsidiary, the consolidated VIEs, and the consolidated VIEs’ shareholders include (i) certain equity interest pledge agreements, shareholder voting rights proxy agreement, exclusive call option agreements and certain loan agreements, which provide us with effective control over the consolidated VIEs; (ii) certain exclusive technology license and service agreements and intellectual property rights license agreement, which allow us to receive substantially all of the benefits generated from the operations of the consolidated VIEs and their subsidiaries.
There are 10 data protection obligations contained in the PDPA which includes, among other things, (1) putting in place appropriate technical and organisational measures to protect the personal data from data breach incidents, (2) ceasing to retain personal data if the purpose for collection is no longer served and retention is no longer necessary for any other legal or business purposes, and (3) notifying the PDPC and/or the affected individuals in the event of a data breach incident (if the relevant notification thresholds have been met).
There are 10 data protection obligations contained in the PDPA which includes, among other things, (1) putting in place appropriate technical and organizational measures to protect the personal data from data breach incidents, (2) ceasing to retain personal data if the purpose for collection is no longer served and retention is no longer necessary for any other legal or business purposes, and (3) notifying the PDPC and/or the affected individuals in the event of a data breach incident (if the relevant notification thresholds have been met).
An amended complaint was filed on December 18, 2023. On February 5, 2024, we filed a motion to dismiss the amended complaint. Plaintiffs filed an opposition to our motion to dismiss on March 4, 2024. We filed a reply in support of the motion to dismiss on March 18, 2024.
An amended complaint was filed on December 18, 2023. On February 5, 2024, we filed a motion to dismiss the amended complaint. Plaintiffs filed an opposition to our motion to dismiss on March 4, 2024, and we filed a reply in support of the motion to dismiss on March 18, 2024.
Shanghai, Beijing, Guangdong, Sichuan, Chongqing, Hebei, Jiangsu, Inner Mongolia and other provinces and cities have formulated detailed regulations on the review of energy conservation of fixed-asset investment within their jurisdictions, and reinforced interim and post-filing supervision. ​ 112 Table of Contents New regulations, policies and rules have been issued with respect to the construction or development of new data centers, and rebuilding or expansion of existing data centers.
Shanghai, Beijing, Guangdong, Sichuan, Chongqing, Hebei, Jiangsu, Inner Mongolia and other provinces and cities have formulated detailed regulations on the review of energy conservation of fixed-asset investment within their jurisdictions, and reinforced interim and post-filing supervision. ​ 115 Table of Contents New regulations, policies and rules have been issued with respect to the construction or development of new data centers, and rebuilding or expansion of existing data centers.
We believe that we distinguish ourselves by our larger capacity and more extensive market presence across the key economics hubs in mainland China, deep operating knowledge and long track record in the China market, and long-term relationships with the telecommunications carriers. 103 Table of Contents We also face competition from the state-owned telecommunications carriers, namely China Telecom, China Unicom and China Mobile.
We believe that we distinguish ourselves by our larger capacity and more extensive market presence across the key economics hubs in mainland China, deep operating knowledge and long track record in the China market, and long-term relationships with the telecommunications carriers. 105 Table of Contents We also face competition from the state-owned telecommunications carriers, namely China Telecom, China Unicom and China Mobile.
The developable net floor area estimates are subject to a number of contingencies and uncertainties. 94 Table of Contents Data Center Tenure We hold our self-developed data center buildings either through direct ownership or lease. In mainland China, land cannot be owned outright, but is secured through land use rights.
The developable net floor area estimates are subject to a number of contingencies and uncertainties. ​ 96 Table of Contents Data Center Tenure We hold our self-developed data center buildings either through direct ownership or lease. In mainland China, land cannot be owned outright, but is secured through land use rights.
Where a foreign investor invests in a field prohibited from investment by the Negative List (2021), the competent department shall order cessation of investment activity, disposition of shares and assets or adoption of other necessary measures during a specified period, and restoration to the state before investment; and its illegal income, if any, shall be confiscated.
Where a foreign investor invests in a field prohibited from investment by the Negative List (2024), the competent department shall order cessation of investment activity, disposition of shares and assets or adoption of other necessary measures during a specified period, and restoration to the state before investment; and its illegal income, if any, shall be confiscated.
As at December 31, 2023, the standard profits tax rate for corporations was at 8.25% on assessable profits up to HK$2,000,000; and 16.5% on any part of assessable profits over HK$2,000,000. The IRO also contains provisions relating to, among others, permissible deductions for outgoings and expenses, set-offs for losses and allowances for depreciation.
As at December 31, 2024, the standard profits tax rate for corporations was at 8.25% on assessable profits up to HK$2,000,000; and 16.5% on any part of assessable profits over HK$2,000,000. The IRO also contains provisions relating to, among others, permissible deductions for outgoings and expenses, set-offs for losses and allowances for depreciation.
Currently, there are no further guidelines on items (a) and (b) to ensure compliance with such requirements. Therefore, pending any such guidelines, it is advisable to obtain the data subject’s consent prior to conducting cross-border transfers. Moreover, specific types of data and/or personal data controllers may be subject to sectoral localisation requirements.
Currently, there are no further guidelines on items (a) and (b) to ensure compliance with such requirements. Therefore, pending any such guidelines, it is advisable to obtain the data subject’s consent prior to conducting cross-border transfers. Moreover, specific types of data and/or personal data controllers may be subject to sectoral localization requirements.
Under the Building Control Act 1989, major building works and building plans would require consent from the Building and Construction Authority. Depending on the specific development, regulatory approval from various other technical government departments would also be required. There are various associated regulatory requirements which governs the process and licensing of all aspects of construction.
Under the Building Control Act 1989, major building works and building plans would require consent from the Building and Construction Authority. Depending on the specific development, regulatory approval from various other technical government departments would also be required, before commencing construction. There are various associated regulatory requirements which governs the process and licensing of all aspects of construction.
Apart from HL1 Phase 1 and UL1, two B-O-T joint venture data centers of which we currently own 51% and GIC owns 49%, we still hold 100% of the equity interests in the project companies holding all the other B-O-T data centers as of December 31, 2023.
Apart from HL1 Phase 1 and UL1, two B-O-T joint venture data centers of which we currently own 51% and GIC owns 49%, we still hold 100% of the equity interests in the project companies holding all the other B-O-T data centers as of December 31, 2024.
Where the investment activity of a foreign investor violates any special administrative measure for restrictive access as set out in the Negative List (2021), the competent department shall order the investor to take corrective action during a specified period and adopt necessary measures to meet the requirements of the special administrative measure.
Where the investment activity of a foreign investor violates any special administrative measure for restrictive access as set out in the Negative List (2024), the competent department shall order the investor to take corrective action during a specified period and adopt necessary measures to meet the requirements of the special administrative measure.
The lawsuit alleges violation by us and certain of our directors and officers of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The lawsuit alleges that a number of SEC filings submitted by our company included false and misleading statements regarding certain financing transactions entered into by Mr. William Huang.
The lawsuit alleged violation by us and certain of our directors and officers of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The lawsuit alleged that a number of SEC filings submitted by our company included false and misleading statements regarding certain financing transactions entered into by Mr. William Huang.
In March 2007, the National People’s Congress enacted the Enterprise Income Tax Law , which was amended in February 2017 and December 2018, respectively, and in December 2007 the State Council promulgated the Implementing Rules of the Enterprise Income Tax Law , or the Implementing Rules, which was amended in April 2019, both of which became effective on January 1, 2008.
In March 2007, the National People’s Congress enacted the Enterprise Income Tax Law , which was amended in February 2017 and December 2018, respectively, and in December 2007 the State Council promulgated the Implementing Rules of the Enterprise Income Tax Law , or the Implementing Rules, which were amended in April 2019 and December 2024, respectively, both of which became effective on January 1, 2008.
As of December 31, 2022, we completed the sale of a 49% equity interests of the project company of HL1 Phase 1 data center and UL1 data center to GIC, as the first two B-O-T joint venture data centers pursuant to the new master joint venture investment agreement.
As of December 31, 2023, we completed the sale of a 49% equity interests of the project company of HL1 Phase 1 data center and UL1 data center to GIC, as the first two B-O-T joint venture data centers pursuant to the new master joint venture investment agreement.
The Environmental Quality Act 1974 establishes standards for controlling air emissions, industrial effluents, sewage and wastes. For the purpose of establishing a data centre in Malaysia, we will appoint qualified persons to conduct an environmental impact assessment and to submit a report thereof.
The Environmental Quality Act 1974 establishes standards for controlling air emissions, industrial effluents, sewage and wastes. For the purpose of establishing a data center in Malaysia, we will appoint qualified persons to conduct an environmental impact assessment and to submit a report thereof.
The extension and renewal are subject to the satisfaction of all requirements, among others that the land is still being utilised in accordance with the land title, still conforms with the city’s spatial plan, not required by the government for public purposes and the holder still qualifies to hold the land title.
The extension and renewal are subject to the satisfaction of all requirements, among others that the land is still being utilized in accordance with the land title, still conforms with the city’s spatial plan, not required by the government for public purposes and the holder still qualifies to hold the land title.
As a result of these contractual arrangements, we control Management HoldCo, GDS Shanghai, GDS Beijing and 29 direct and indirect subsidiaries of GDS Beijing as of December 31, 2023, and have consolidated the financial information of these entities in our consolidated financial statements in accordance with U.S. GAAP.
As a result of these contractual arrangements, we control Management HoldCo, GDS Shanghai, GDS Beijing and 29 direct and indirect subsidiaries of GDS Beijing as of December 31, 2024, and have consolidated the financial information of these entities in our consolidated financial statements in accordance with U.S. GAAP.
We do not usually charge any fee for reserving or committing capacity prior to the commencement of the service period. 100 Table of Contents Move-in Period Commencing at the start of the service period our sales agreements typically provide for a flexible move-in period.
We do not usually charge any fee for reserving or committing capacity prior to the commencement of the service period. 102 Table of Contents Move-in Period Commencing at the start of the service period our sales agreements typically provide for a flexible move-in period.
The Administrative Measures on Internet Information Service promulgated by the State Council on September 25, 2000 and amended on January 8, 2011, the Regulations on Technical Measures of Internet Security Protection promulgated by the MPS on December 13, 2005 and the Provisions on Protecting Personal Information of Telecommunication and Internet Users promulgated by the MIIT on July 16, 2013 set forth strict requirements to protect personal information of internet users and require internet information service providers to maintain adequate systems to protect the security of such information.
The Administrative Measures on Internet Information Service promulgated by the State Council on September 25, 2000 and respectively amended on January 8, 2011 and December 6, 2024, the Regulations on Technical Measures of Internet Security Protection promulgated by the MPS on December 13, 2005 and the Provisions on Protecting Personal Information of Telecommunication and Internet Users promulgated by the MIIT on July 16, 2013 set forth strict requirements to protect personal information of internet users and require internet information service providers to maintain adequate systems to protect the security of such information.
In addition, by taking a modular approach, we are able to phase our capital expenditures related to equipping and fitting out individual computer rooms in accordance with proven sales demand or contractual delivery commitments to customers. Marketing We usually commence marketing new data center facilities before we commence construction by seeking strong indications of interest from customers.
In addition, by taking a modular approach, we are able to phase our capital expenditures related to equipping and fitting out individual computer rooms in accordance with proven sales demand or contractual delivery commitments to customers. 93 Table of Contents Marketing We usually commence marketing new data center facilities before we commence construction by seeking strong indications of interest from customers.
At the same time, we comply with the Enterprise Internal Control Basic Norms and Enterprise Internal Control Evaluation Guidelines issued by China’s Ministry of Finance and Hong Kong Stock Exchange listing rules Appendix 14 – Code on Corporate Governance.
At the same time, we comply with the Enterprise Internal Control Basic Norms and Enterprise Internal Control Evaluation Guidelines issued by China’s Ministry of Finance and Hong Kong Stock Exchange listing rules Appendix C3 – Code on Corporate Governance.
We design and build our facilities using a modular approach, which involves an innovative construction method using pre-fabrication technology to shorten development time, improve quality control and achieve costs savings. This approach provides a flexible and efficient solution to meet the growing demands of modern cloud-based platforms and customers. 96 Table of Contents Managed Services Managed Hosting Services.
We design and build our facilities using a modular approach, which involves an innovative construction method using pre-fabrication technology to shorten development time, improve quality control and achieve costs savings. This approach provides a flexible and efficient solution to meet the growing demands of modern cloud-based platforms and customers. Managed Services Managed Hosting Services.
Combining 2N or distributed N+1 redundant power system, N+1 concurrent maintainable cooling system and other critical systems to operate our facilities to meet the highest standards, we are able to satisfy the requirements of the most demanding customers for housing their mission-critical IT infrastructure. ● High Power Density.
Combining 2N or distributed N+1 redundant power system, N+1 concurrent maintainable cooling system and other critical systems to operate our facilities to meet the highest standards, we are able to satisfy the requirements of the most demanding customers for housing their mission-critical IT infrastructure. 95 Table of Contents ● High Power Density.
There was no single property interest of our Group that formed part of non-property activities had a carrying amount of 15% or more of our Group’s total assets as of December 31, 2023.
There was no single property interest of our Group that formed part of non-property activities had a carrying amount of 15% or more of our Group’s total assets as of December 31, 2024.
As we accumulated leased data center capacity in the data center over time, and we never conducted any comprehensive conversion or repurposing of the facility, we continue to categorize that data center as a third-party data center. Lease Agreements Relating to Our Data Centers We enter into leases in connection with our self-developed data centers.
As we accumulated leased data center capacity in the data center over time, and we never conducted any comprehensive conversion or repurposing of the facility, we continue to categorize that data center as a third-party data center. 97 Table of Contents Lease Agreements Relating to Our Data Centers We enter into leases in connection with our self-developed data centers.
The registration of domain names in PRC is on a “first-apply-first-registration” basis. A domain name applicant will become the domain name holder upon the completion of the application procedure. On March 12, 1984, the SCNPC promulgated the Patent Law , which was amended in 1992, 2000, 2008 and 2020, respectively.
The registration of domain names in PRC is on a “first-apply-first-registration” basis. A domain name applicant will become the domain name holder upon the completion of the application procedure. ​ 125 Table of Contents On March 12, 1984, the SCNPC promulgated the Patent Law , which was amended in 1992, 2000, 2008 and 2020, respectively.
The Lembaga Pembangunan Industri Pembinaan Malaysia Act 1994 , or the Construction Industry Development Board Act 1994 , facilitates the registration and accreditation of contractors that are carrying out construction works. 134 Table of Contents The Street, Drainage and Building Act 1974 requires that a certificate of completion and compliance be issued by a local authority before occupation of a building.
The Lembaga Pembangunan Industri Pembinaan Malaysia Act 1994 , or the Construction Industry Development Board Act 1994 , facilitates the registration and accreditation of contractors that are carrying out construction works. The Street, Drainage and Building Act 1974 requires that a certificate of completion and compliance be issued by a local authority before occupation of a building.
The NIB is also valid as the following licenses or approvals, among others: an Import Identification Number (Angka Pengenal Import or API) and a customs access rights. 2. NPWP or Taxpayer Identification Number Under DG Tax Regulation PER-04/PJ/2020, NPWP is required for all KBLIs.
The NIB is also valid as the following licenses or approvals, among others: an Import Identification Number (Angka Pengenal Import or API) and a customs access rights ( Hak Akses Kepabeanan ). 2. NPWP or Taxpayer Identification Number Under DG Tax Regulation PER-04/PJ/2020, NPWP is required for all KBLIs.
Subsidiaries of GDS Holdings Limited An exhibit containing a list of our subsidiaries has been filed with this annual report. D. Property, Plants and Equipment Please refer to “B. Business Overview—Our Data Centers” for a discussion of our property, plants and equipment. ​ ITEM 4A. UNRESOLVED STAFF COMMENTS None. ​
Subsidiaries of GDS Holdings Limited An exhibit containing a list of our subsidiaries has been filed with this annual report. D. Property, Plants and Equipment Please refer to “B. Business Overview—Our Data Centers” for a discussion of our property, plants and equipment. ​ ITEM 4A. UNRESOLVED STAFF COMMENTS None. ​ 154 Table of Contents
If we obtain a license under the CMA, we will then proceed to register as a data user under the PDPA, pursuant to the Personal Data Protection (Class of Data Users) Order 2013 which provides that a data user which belongs to any of the classes of data users (one of which includes being a licensee under the CMA), is required to obtain a certificate of registration under the PDPA.
If we obtain a license under the CMA, we will then proceed to register as a data controller under the PDPA, pursuant to the Personal Data Protection (Class of Data Users) Order 2013 which provides that a data controller which belongs to any of the classes of data controllers (one of which includes being a licensee under the CMA), is required to obtain a certificate of registration under the PDPA.
This agreement can only be early terminated by prior mutual consent of the parties and need to be renewed upon GDS Investment Company’s unilateral request. 147 Table of Contents Agreements that Provide Us with the Option to Purchase the Equity Interest in GDS Beijing and GDS Shanghai Exclusive Call Option Agreements.
This agreement can only be early terminated by prior mutual consent of the parties and need to be renewed upon GDS Investment Company’s unilateral request. Agreements that Provide Us with the Option to Purchase the Equity Interest in GDS Beijing and GDS Shanghai Exclusive Call Option Agreements.
Regulatory requirements/restrictions on land use rights and constructions Typically, data centers in Singapore occupy land managed and administered by Jurong Town Corporation, or JTC. JTC is a statutory board under the Ministry of Trade and Industry that spearheads industrial development in Singapore. Principally, JTC administers such data centers as a landlord/lessor through leases with tenures of approximately 30-years.
Regulatory requirements/restrictions on land use rights and constructions Typically, data centers in Singapore occupy land managed and administered by Jurong Town Corporation, or JTC. JTC is a statutory board under the Ministry of Trade and Industry that spearheads industrial development in Singapore. Principally, JTC administers such data centers as a landlord/lessor through leases with tenures of 20 up to 30-years.
(6) Jiangsu Wan Guo Xing Tu Data Services Co., Ltd. or Jiangsu Wan Guo Xing Tu, effectively controls a project company, Nantong Wanguo Yunzhen Data Science & Technology Co., Ltd. or Nantong Yunzhen, to operate the B-O-T data centers in Nantong, China through a series of contractual arrangements among Jiangsu Wan Guo Xing Tu, Nantong Yunzhen’s shareholder, Shanghai Xingchang Enterprise Management Company Limited or Shanghai Xingchang, and Shanghai Xingchang’s shareholders. ​ ​ 143 Table of Contents To comply with the PRC regulations regarding foreign investment in VATs described above, and foreign exchange control, our preferred approach to structuring our data center operations and investments in mainland China is to have VIEs and their subsidiaries which hold VATS licenses and provide services to customers and data center companies established as wholly foreign owned enterprises under the PRC Law which hold the data center property interests and assets.
(4) Jiangsu Wan Guo Xing Tu Data Services Co., Ltd. or Jiangsu Wan Guo Xing Tu, effectively controls a project company, Nantong Wanguo Yunzhen Data Science & Technology Co., Ltd. or Nantong Yunzhen, to operate the B-O-T data centers in Nantong, China through a series of contractual arrangements among Jiangsu Wan Guo Xing Tu, Nantong Yunzhen’s shareholder, Shanghai Xingchang Enterprise Management Company Limited or Shanghai Xingchang, and Shanghai Xingchang’s shareholders. ​ ​ 149 Table of Contents To comply with the PRC regulations regarding foreign investment in VATS described above, and foreign exchange control, our preferred approach to structuring our data center operations and investments in mainland China is to have VIEs and their subsidiaries which hold VATS licenses and provide services to customers and data center companies established as wholly foreign owned enterprises under the PRC Law.
We have a 23-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services.
We have a 24-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services.
Its main objectives are to ensure balanced land development and promote public welfare. 138 Table of Contents The following is an outline of the zoning regulations under the City Planning Act: ● Land is divided into two main categories: “City Planning Areas” ( toshi keikaku kuiki ) regulated by the City Planning Act and “Non-City Planning Areas” not regulated thereby. ● Each City Planning Area is divided into “Urbanization Promotion Areas” ( shigaika kuiki ) where development is promoted and “Urbanization Restricted Areas” ( shigaika chosei kuiki ) where development is restricted. ● The City Planning Act defines thirteen zoning districts ( yoto chiiki ) within Urbanization Promotion Areas depending on the use of the land and specific building regulations under the Building Standards Act (e.g., permitted use, building coverage and floor area ratios) vary depending on the zoning districts of the subject land. ● Developers must confirm and consult with the relevant governmental bodies to ascertain the applicable local or specific zoning or planning regulations, including the zoning districts where the planned construction of a new building is permitted (e.g., a data center) through a consultant, asset manager or broker. ● In addition, under the City Planning Act, developers must obtain permission from the prefectural governor (or the mayor, as applicable) prior to commencing any “Development Actions”, which means altering the shape or quality of land to make it available mainly for the con struction of buildings or special structures, on land located in certain areas. 2.
The following is an outline of the zoning regulations under the City Planning Act: ● Land is divided into two main categories: “City Planning Areas” ( toshi keikaku kuiki ) regulated by the City Planning Act and “Non-City Planning Areas” not regulated thereby. ● Each City Planning Area is divided into “Urbanization Promotion Areas” ( shigaika kuiki ) where development is promoted and “Urbanization Restricted Areas” ( shigaika chosei kuiki ) where development is restricted. ● The City Planning Act defines thirteen zoning districts ( yoto chiiki ) within Urbanization Promotion Areas depending on the use of the land and specific building regulations under the Building Standards Act (e.g., permitted use, building coverage and floor area ratios) vary depending on the zoning districts of the subject land. ● Developers must confirm and consult with the relevant governmental bodies to ascertain the applicable local or specific zoning or planning regulations, including the zoning districts where the planned construction of a new building is permitted (e.g., a data center) through a consultant, asset manager or broker. 145 Table of Contents ● In addition, under the City Planning Act, developers must obtain permission from the prefectural governor (or the mayor, as applicable) prior to commencing any “Development Actions”, which means altering the shape or quality of land to make it available mainly for the con struction of buildings or special structures, on land located in certain areas. 2.
Where the investment activity of a foreign investor violates the Negative List (2021), it shall be otherwise subject to corresponding legal liabilities under the applicable law.
Where the investment activity of a foreign investor violates the Negative List (2024), it shall be otherwise subject to corresponding legal liabilities under the applicable law.
GAAP. 144 Table of Contents These contractual arrangements may not be as effective as direct ownership in providing us with control over the consolidated VIEs.
GAAP. 150 Table of Contents These contractual arrangements may not be as effective as direct ownership in providing us with control over the consolidated VIEs.
A newly formed National Bureau of Data will be responsible for overall coordination and promoting the development of digital China. Our platform of interconnected data centers and secured expansion capacity is strategically located to address this growing demand.
A newly formed National Bureau of Data will be responsible for overall coordination and promoting the development of digital China. 91 Table of Contents Our platform of interconnected data centers and secured expansion capacity is strategically located to address this growing demand.
Under the Telecom Regulations, telecommunications service providers are required to procure operating licenses prior to their commencement of operations. The Telecom Regulations distinguish basic telecommunications services from VATS. The Telecom Catalogue was issued as an attachment to the Telecom Regulations to categorize telecommunications services as either basic or value-added.
Under the Telecom Regulations, telecommunications service providers are required to procure operating licenses prior to their commencement of operations. The Telecom Regulations distinguish basic telecommunications services from VATS. ​ 111 Table of Contents The Telecom Catalogue was issued as an attachment to the Telecom Regulations to categorize telecommunications services as either basic or value-added.
We have registered the equity pledge by both GDS Beijing and GDS Shanghai in favor of GDS Investment Company with the relevant office of the Administration for Market Regulation in accordance with the relevant PRC laws and regulations. Shareholder Voting Rights Proxy Agreement.
We have registered the equity pledge by both GDS Beijing and GDS Shanghai in favor of GDS Investment Company with the relevant office of the Administration for Market Regulation in accordance with the relevant PRC laws and regulations. 151 Table of Contents Shareholder Voting Rights Proxy Agreement.
As of December 31, 2023, we served 864 customers, including hyperscale cloud service providers and large internet companies, a diverse community of PRC and foreign financial institutions as well as telecommunications carriers and IT service providers and large domestic private sector and multinational corporations, many of which are leaders in their respective industry verticals.
As of December 31, 2024, we served 926 customers, including hyperscale cloud service providers and large internet companies, a diverse community of PRC and foreign financial institutions as well as telecommunications carriers and IT service providers and large domestic private sector and multinational corporations, many of which are leaders in their respective industry verticals.
If we are designated as a national critical information infrastructure (NCII) entity pursuant to the CSA, we will be required to comply with the requirements under the CSA, including to implement certain cyber security standards, processes and measures, conduct cyber security risk assessments and audits, and report to the applicable regulator and sector lead in the event of a cyber security incident.
If we are designated as a NCII entity pursuant to the CSA, we will be required to comply with the requirements under the CSA, including to implement certain cyber security standards, processes and measures, conduct cyber security risk assessments and audits, and report to the applicable regulator and sector lead in the event of a cyber security incident.
The six Data Protection Principles are: ● Principle 1 – purpose and manner of collection of personal data; ● Principle 2 – accuracy and duration of retention of personal data; ● Principle 3 – use of personal data; ● Principle 4 – security of personal data; ● Principle 5 – information to be generally available; and ● Principle 6 – access to personal data.
The six Data Protection Principles are: ● Principle 1 – purpose and manner of collection of personal data; ● Principle 2 – accuracy and duration of retention of personal data; 133 Table of Contents ● Principle 3 – use of personal data; ● Principle 4 – security of personal data; ● Principle 5 – information to be generally available; and ● Principle 6 – access to personal data.
C. Organizational Structure Our Corporate Structure The diagram below summarizes our corporate structure and identifies our significant subsidiaries, consolidated VIEs and their significant subsidiaries as of December 31, 2023.
C. Organizational Structure Our Corporate Structure The diagram below summarizes our corporate structure and identifies our significant subsidiaries, consolidated VIEs and their significant subsidiaries as of December 31, 2024.
As of December 31, 2023, we served 864 customers, including PRC and global hyperscale cloud service providers and large internet companies, a diverse community of financial institutions, telecommunications carriers and IT service providers and large domestic private sector and multinational corporations, many of which are leaders in their respective industries.
As of December 31, 2024, we served 926 customers, including PRC and global hyperscale cloud service providers and large internet companies, a diverse community of financial institutions, telecommunications carriers and IT service providers and large domestic private sector and multinational corporations, many of which are leaders in their respective industries.
Under the Measures for the Energy Conservation Review of Fixed-Asset Investment Projects , which was promulgated by the NDRC on November 27, 2016, and supplemented and revised on March 28, 2023, for an enterprise investment project, the construction entity shall, before commencing construction, obtain the energy conservation review opinion issued by the energy conservation review authority.
Under the Measures for the Energy Conservation Review of Fixed-Asset Investment Projects , which was promulgated by the NDRC on November 27, 2016, supplemented and revised on March 28, 2023 and became effective on June 1, 2023, for an enterprise investment project, the construction entity shall, before commencing construction, obtain the energy conservation review opinion issued by the energy conservation review authority.
Post-facto report requirement Under the FEFTA, Foreign Investor who contemplates an Inward Direct Investment etc. is subject to a post-facto report requirement within 45 days in the following cases: (i) When a Foreign Investor carries out an acquisition or disposal of shares or voting rights for which a prior notification was submitted; (ii) When a Foreign Investor carries out an acquisition of shares or voting rights of a listed or non-listed Japanese company for which the Foreign Investor relied on any exemption under the FEFTA; and 141 Table of Contents (iii) When a Foreign Investor carries out an acquisition of shares, voting rights or equity securities of a listed or non-listed Japanese company or a legal entity established under a special law, for which a prior notification was not submitted (because no Designated Business was involved), but the shares or voting rights substantially held by the Foreign Investor are 10% or more of the total issued shares, voting rights or equity securities of the legal entity.
Post-facto report requirement Under the FEFTA, Foreign Investor who contemplates an Inward Direct Investment etc. is subject to a post-facto report requirement within 45 days in the following cases: (i) When a Foreign Investor carries out an acquisition or disposal of shares or voting rights for which a prior notification was submitted; (ii) When a Foreign Investor carries out an acquisition of shares or voting rights of a listed or non-listed Japanese company for which the Foreign Investor relied on any exemption under the FEFTA; and (iii) When a Foreign Investor carries out an acquisition of shares, voting rights or equity securities of a listed or non-listed Japanese company or a legal entity established under a special law, for which a prior notification was not submitted (because no Designated Business was involved), but the shares or voting rights substantially held by the Foreign Investor are 10% or more of the total issued shares, voting rights or equity securities of the legal entity. 147 Table of Contents Other Regulations on Operation of Data Centers 1.
We adopt “growth mindset” and use 3E (Experience, Exposure and Education) as our main development methodology to provide a wide range of orientations for new hires, on-job training, internal and external knowledge sharing, formal professional training, job related certification and others. We had approximately 1,878, 2,185 and 2,345 employees as of December 31, 2021, 2022 and 2023, respectively.
We adopt “growth mindset” and use 3E (Experience, Exposure and Education) as our main development methodology to provide a wide range of orientations for new hires, on-job training, internal and external knowledge sharing, formal professional training, job related certification and others. We had approximately 2,185, 2,345 and 2,276 employees as of December 31, 2022, 2023 and 2024, respectively.
We also provide certain other services, including consulting services. We primarily provide colocation services to cloud service providers while we provide both colocation services and managed services to all other customers. Colocation Services We offer our customers a highly secure, reliable and fault-tolerant environment in which to house their servers and related IT equipment.
We also provide certain other services, including consulting services. We primarily provide colocation services to cloud service providers while we provide both colocation services and managed services to all other customers. ​ 98 Table of Contents Colocation Services We offer our customers a highly secure, reliable and fault-tolerant environment in which to house their servers and related IT equipment.
Water Supply ​ Law No. 17 of 2019 was amended by the Government Regulation in lieu of Law of the Republic of Indonesia No. 2 of 2022 on Job Creation and the amended law mandates that water resources must be controlled by the state and used for the utmost prosperity of the community.
Water Supply ​ Law No. 17 of 2019 was amended by Law No. 6 of 2023 on the Stipulation of the Government Regulation in lieu of Law of the Republic of Indonesia No. 2 of 2022 on Job Creation into Law and the amended law mandates that water resources must be controlled by the state and used for the utmost prosperity of the community.
The PPA will also govern other technical terms, including but not limited to, the construction and handover of the electrical installation which will be used to supply such electricity. 137 Table of Contents 2.
The PPA will also govern other technical terms, including but not limited to, the construction and handover of the electrical installation which will be used to supply such electricity. 2.
Sectors such as healthcare, banking/financial services, and telecommunications operate under stricter rules compared to those outlined in the PDP Law, potentially impeding or altogether prohibiting cross-border data transfers.
Sectors such as healthcare, banking/financial services, crypto assets, public institutions, and telecommunications operate under stricter rules compared to those outlined in the PDP Law, potentially impeding or altogether prohibiting cross-border data transfers.
(2) GDS Investment Company directly and indirectly holds equity interests of 60 subsidiaries in mainland China.
(2) GDS Investment Company directly and indirectly holds equity interests of 62 subsidiaries in mainland China.
For more information, please refer to our 2022 ESG report, which is accessible via hyperlink in our press release, Exhibit 99.1 to our Form 6-K (File No. 001-37925), furnished to the SEC on December 4, 2023. We plan to publish our 2023 ESG report later this year, which will describe our 2023 ESG performance and initiatives.
For more information, please refer to our 2023 ESG report, which is accessible via hyperlink in our press release, Exhibit 99.1 to our Form 6-K (File No. 001-37925), furnished to the SEC on August 27, 2024. We plan to publish our 2024 ESG report later this year, which will describe our 2024 ESG performance and initiatives.
Our net revenue and results of operations are largely determined by the degree to which our data center capacity is committed or pre-committed as well as its utilization. We had commitment rates for our area in service of 93.8%, 95.5% and 92.8% as of December 31, 2021, 2022 and 2023, respectively.
Our net revenue and results of operations are largely determined by the degree to which our data center capacity is committed or pre-committed as well as its utilization. We had commitment rates for our area in service of 95.5%, 92.5% and 91.9% as of December 31, 2022, 2023 and 2024, respectively.
For the Group A taxpayer, the Complementary Income Tax is assessed based on its actual profit and each of the Group A taxpayers, along with a Macau licensed accountant, is required to submit the following documents to the Macau Financial Bureau within April to June each year: ● Income declaration under the given tax form; ● Copy of the meeting minutes approving the accounts; ● Copies of consolidated balance sheet and profit and loss account in accordance with the Official Plan of Accounting; ● Worksheets due to adjustments and the trial balance; ● Depreciation schedule under the given tax form; ● Usage of reserve fund under the given tax form; ● Supporting documents of bad debts; and ● Technical report in relation to inventory value and the criteria of valuation, general administrative costs and other necessary information for determining the taxable profits. 131 Table of Contents A Group B taxpayer is not required to engage any licensed accountant nor submit the aforementioned mandatory documents that a Group A taxpayer is required to submit for tax reporting.
For the Group A taxpayer, the Complementary Income Tax is assessed based on its actual profit and each of the Group A taxpayers, along with a Macau licensed accountant, is required to submit the following documents to the Macau Financial Bureau within April to June each year: ● Income declaration under the given tax form; ● Copy of the meeting minutes approving the accounts; ● Copies of consolidated balance sheet and profit and loss account in accordance with the Official Plan of Accounting; ● Worksheets due to adjustments and the trial balance; ● Depreciation schedule under the given tax form; ● Usage of reserve fund under the given tax form; ● Supporting documents of bad debts; and ● Technical report in relation to inventory value and the criteria of valuation, general administrative costs and other necessary information for determining the taxable profits.
Our sales agreements with anchor customers with largescale commitments typically allow for a move-in period of 12 to 24 months, whereas our sales agreements with financial institutions and large enterprise customers typically allow for a move-in period of three to six months.
Our sales agreements with anchor customers with largescale commitments typically allow for a move-in period of 6 to 24 months, whereas our sales agreements with financial institutions and large enterprise customers typically allow for a move-in period of 3 to 12 months.
Based on the COSO framework, we have established and implemented a three-tiered enterprise risk management system, including control environment, risk assessment and control activities. Environmental and Operational Sustainability Initiatives We published our third annual ESG report in December 2023, wherein we explain our progress in 2022 toward fulfilling our ESG commitments.
Based on the COSO framework, we have established and implemented a three-tiered enterprise risk management system, including control environment, risk assessment and control activities. Environmental and Operational Sustainability Initiatives We published our fourth annual ESG report in August 2024, wherein we explain our progress in 2023 toward fulfilling our ESG commitments.
Customer Satisfaction We endeavor to provide high levels of customer service, support, and satisfaction. We interact regularly with our customers to receive their feedback and continuously improve. In 2023, we engaged third-party research firm NielsenIQ to conduct a client satisfaction survey. NielsenIQ conducted their survey from November 30, 2023 to December 30, 2023.
Customer Satisfaction We endeavor to provide high levels of customer service, support, and satisfaction. We interact regularly with our customers to receive their feedback and continuously improve. In 2024, we engaged third-party research firm NielsenIQ to conduct a client satisfaction survey. NielsenIQ conducted their survey from December 2 to December 27, 2024.
As a consequence, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest. For the years ended December 31, 2021, 2022 and 2023, the VIEs and their subsidiaries contributed 96.1%, 96.1% and 95.3%, respectively, of our total net revenue.
As a consequence, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest. For the years ended December 31, 2022, 2023 and 2024, the VIEs and their subsidiaries contributed 96.7%, 97.0% and 96.1%, respectively, of our total net revenue.
Pursuant to the loan agreements, GDS Investment Company has the right to require repayment of the loans upon delivery of 30 days’ prior notice to Management HoldCo, and Management HoldCo can repay the loans by either sale of their equity interests in GDS Beijing and GDS Shanghai to GDS Investment Company or its designated person(s) pursuant to their respective exclusive call option agreements, or other methods as determined by GDS Investment Company pursuant to its articles of association and the applicable PRC laws and regulations.
Pursuant to the loan agreements, GDS Investment Company has the right to require repayment of the loans upon delivery of 30 days’ prior notice to Management HoldCo, and Management HoldCo can repay the loans by either sale of their equity interests in GDS Beijing and GDS Shanghai to GDS Investment Company or its designated person(s) pursuant to their respective exclusive call option agreements, or other methods as determined by GDS Investment Company pursuant to its articles of association and the applicable PRC laws and regulations. 153 Table of Contents Agreements that Provide Us with the Option to Purchase the Equity Interest in Management HoldCo Exclusive Call Option Agreements.
For example, ● The NDRC, the Office of the Central Cyberspace Affairs Commission, the MIIT and National Energy Administration jointly published the Guiding Opinion on Accelerating the Construction of National Integrated Big Data Center Collaborative Innovation System on December 23, 2020, pursuant to which the PUE of large and extra-large data centers shall be at or below 1.3 in the year 2025. ● The NDRC, the Office of the Central Cyberspace Affairs Commission, the MIIT and National Energy Administration jointly published the Implementation Plan for Carrying Out Target Requirements on Carbon Neutrality and Promoting the Green and High-quality Development of New Infrastructure such as Data Centers and 5G Networks on November 30, 2021, pursuant to which authorities aim to reach: 1) the average PUE of newly constructed large and extra-large data centers shall be at or below 1.3 and the average PUE of such data centers in national hubs shall further be at or below 1.25 in the year 2025; 2) data centers of which the PUE is above 1.5 shall be upgraded; and 3) the overall utilization rate of data centers shall be significantly improved and the utilization rate of data centers in western areas shall be increased from 30% to over 50%. ● On April 25, 2021, the Energy Bureau of Guangdong Province published the Notice on Clarifying the Relevant Requirements for Energy Consumption Guarantee of Data Centers in Guangdong Province, pursuant to which: 1) the newly increased IDC racks will not be supported in Guangdong Province in principle from 2021 to 2022, except for the integration of existing resources and the construction of projects with marginal computing demand (small data centers with less than 1,000 standard racks), and from 2023-2025, if the utilization rate of data centers in Guangdong Province could reach 70% or above, subject to the reduction of energy consumption, the energy conservation review opinion could be considered to be issued to newly constructed data center projects or expansion projects of data centers; and 2) the PUE of data centers shall be below 1.3 during the Fourteenth Five-year plan period. ● On April 27, 2021, the Beijing Municipal Bureau of Economy and Information Technology, or the Beijing EIT, issued the Implementation Plan on Coordinated Development of Data Centers in Beijing (2021-2023) , or the 2021-2023 Implementation Plan, which stipulates that:1) data centers involved in providing backup and storage services with outdated functions of which the PUE is above 2.0, the average single rack capacity is below 2.5 kilowatts or the average utilization rate is below 30% shall be gradually shut down; 2) data centers of which the PUE is above 1.8 or the average single rack capacity is below 3 kilowatts shall be upgraded (the PUE of cloud computing data centers shall be at or below 1.3 and the PUE of edge data centers shall be at or below 1.6 after such upgrade); and 3) the PUE of newly constructed cloud data centers shall be at or below 1.3 and the average single rack capacity of such data centers shall be at or above 6 kilowatts. ● On July 4, 2021, the MIIT published the Three Year Action Plan on the Development of New Data Center (2021-2023), pursuant to which the PUE of large and above scale data centers which are newly constructed shall be at or below 1.3 and the PUE of such data centers located in severe cold areas should aim to be at or below 1.25 by the end of year 2023. ● On February 14, 2022, the General Office of People’s Government of Beijing Municipality, or the GOPGB, issued the Beijing Municipality’s Catalogue for the Prohibition and Restriction of Newly Increased Industries (2022 Edition) , or the 2022 Catalogue, which is a revised edition of the catalogue GOPGB issued in 2015 and 2018.
For example, ● The NDRC, the Office of the Central Cyberspace Affairs Commission, the MIIT and National Energy Administration jointly published the Guiding Opinion on Accelerating the Construction of National Integrated Big Data Center Collaborative Innovation System on December 23, 2020, pursuant to which, the PUE of large and extra-large data centers shall be at or below 1.3 in the year 2025. ● The NDRC, the Office of the Central Cyberspace Affairs Commission, the MIIT and National Energy Administration jointly published the Implementation Plan for Carrying Out Target Requirements on Carbon Neutrality and Promoting the Green and High-quality Development of New Infrastructure such as Data Centers and 5G Networks on November 30, 2021, pursuant to which authorities aim to reach: 1) the average PUE of newly constructed large and extra-large data centers shall be at or below 1.3 and the average PUE of such data centers in national hubs shall further be at or below 1.25 in the year 2025; 2) data centers of which the PUE is above 1.5 shall be upgraded; and 3) the overall utilization rate of data centers shall be significantly improved and the utilization rate of data centers in western areas shall be increased from 30% to over 50%. ● On April 25, 2021, the Energy Bureau of Guangdong Province published the Notice on Clarifying the Relevant Requirements for Energy Consumption Guarantee of Data Centers in Guangdong Province, pursuant to which: 1) the newly increased IDC racks will not be supported in Guangdong Province in principle from 2021 to 2022, except for the integration of existing resources and the construction of projects with marginal computing demand (small data centers with less than 1,000 standard racks), and from 2023-2025, if the utilization rate of data centers in Guangdong Province could reach 70% or above, subject to the reduction of energy consumption, the energy conservation review opinion could be considered to be issued to newly constructed data center projects or expansion projects of data centers; and 2) the PUE of data centers shall be below 1.3 during the Fourteenth Five-year plan period. ● On July 4, 2021, the MIIT published the Three Year Action Plan on the Development of New Data Center (2021-2023), pursuant to which the PUE of large and above scale data centers which are newly constructed shall be at or below 1.3 and the PUE of such data centers located in severe cold areas should aim to be at or below 1.25 by the end of year 2023. ● On February 14, 2022, the General Office of People’s Government of Beijing Municipality, or the GOPGB, issued the Beijing Municipality’s Catalogue for the Prohibition and Restriction of Newly Increased Industries (2022 Edition) , or the 2022 Catalogue, which is a revised edition of the catalogue GOPGB issued in 2015 and 2018.
The survey used quota sampling, computer assisted telephone interviews, online survey and in-depth interviews. It covered our company’s business users in an array of industries. The survey collected feedback from 306 business users. The average client satisfaction score was 9.647 out of 10.
The survey used quota sampling, computer assisted telephone interviews, online survey and in-depth face to face interviews. It covered our company’s business users in an array of industries. The survey collected feedback from 338 business users. The average client satisfaction score was 9.68 out of 10.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

166 edited+85 added−40 removed143 unchanged
We endeavor to ensure continuous availability of data center capacity to satisfy customer demand by maintaining a supply of high-performance data centers in various stages of development—from developing a pipeline of sites, to identifying appropriate sites, to data centers under construction to available net floor areas in existing data centers.
We endeavor to ensure continuous availability of data center capacity to satisfy customer demand by maintaining a supply of high-performance data centers in various stages of development—from identifying a pipeline of sites, to developing appropriate sites, to data centers under construction to available net floor areas in existing data centers.
In addition, our mainland China subsidiaries are permitted to pay dividends to us only out of their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
In addition, our mainland China subsidiaries are permitted to pay dividends to us only out of their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
Under applicable PRC laws and regulations, our mainland China subsidiaries are each required to set aside a portion of their after-tax profits each year to fund certain statutory reserves, and funds from such reserves may not be distributed to us as cash dividends except in the event of liquidation of such subsidiaries.
Under applicable PRC laws and regulations, our mainland China subsidiaries are each required to set aside a portion of their after-tax profits each year to fund certain statutory reserves, and funds from such reserves may not be distributed to us as cash dividends except in the event of liquidation of such subsidiaries.
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.
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 equity holders of Management HoldCo are Yilin Chen (senior vice president, Southeast Asia business), Yan Liang (executive vice president, data center design, operation and delivery), Kejing Zhang (executive vice president, sales and service), Andy Wenfeng Li (general counsel, compliance officer, and company secretary) and Qi Wang (senior vice president, cloud and network business).
The equity holders of Management HoldCo are Yilin Chen (former senior vice president, Southeast Asia business), Yan Liang (executive vice president, data center design, operation and delivery), Kejing Zhang (executive vice president, sales and service), Andy Wenfeng Li (general counsel, compliance officer, and company secretary) and Qi Wang (senior vice president, cloud and network business).
We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The following table reconciles our adjusted EBITDA in the years presented to the most directly comparable financial measure calculated and presented in accordance with U.S.
We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The following table reconciles our adjusted EBITDA and adjusted EBITDA margin in the years presented to the most directly comparable financial measure calculated and presented in accordance with U.S.
In the years ended December 31, 2021, 2022 and 2023, GDS Holdings and our subsidiaries did not provide any additional intercompany loans to the VIEs and their subsidiaries and the VIEs and their subsidiaries did not repay any existing intercompany loans to GDS Holdings and our subsidiaries.
In the years ended December 31, 2022 and 2023, GDS Holdings and our subsidiaries did not provide any additional intercompany loans to the VIEs and their subsidiaries and the VIEs and their subsidiaries did not repay any existing intercompany loans to GDS Holdings and our subsidiaries.
No dividend or distribution was made through our subsidiaries or consolidated VIEs to our company during the years ended December 31, 2021, 2022 and 2023. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. We receive substantially all of our revenues in Renminbi.
No dividend or distribution was made through our subsidiaries or consolidated VIEs to our company during the years ended December 31, 2022, 2023 and 2024. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. We receive substantially all of our revenues in Renminbi.
The repurchased 2025 Notes were canceled accordingly. 2025 Notes in the aggregate principal amount of US$80,000 remain outstanding after such repurchases. 171 Table of Contents Convertible Preferred Shares In March 2019, Ping An Overseas Holdings made an investment in us, and we issued 150,000 Series A convertible preferred shares to an affiliate of Ping An Overseas Holdings for a total consideration of US$150 million.
The repurchased 2025 Notes were canceled accordingly. 2025 Notes in the aggregate principal amount of US$80,000 remain outstanding after such repurchases. 181 Table of Contents Convertible Preferred Shares In March 2019, Ping An Overseas Holdings made an investment in us, and we issued 150,000 Series A convertible preferred shares to an affiliate of Ping An Overseas Holdings for a total consideration of US$150 million.
Assuming that either of the two foregoing events occurred on December 31, 2023 and that all holders exercised their redemption right to require our Company to purchase all of the convertible preferred shares, the total purchase price would have been RMB1.1 billion (US$0.1 billion) and total cash would have been reduced by the same amount in the event of such redemption.
Assuming that either of the two foregoing events occurred on December 31, 2024 and that all holders exercised their redemption right to require our Company to purchase all of the convertible preferred shares, the total purchase price would have been RMB1.1 billion (US$0.1 billion) and total cash would have been reduced by the same amount in the event of such redemption.
Impairment losses of long-lived assets We test 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.
Impairment losses of long-lived assets We test long-lived assets (including property and equipment, prepaid land use rights, operating lease right-of-use 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.
Impairment losses of long-lived assets of RMB3,013.4 million (US$424.4 million) was provided in 2023 mainly due to lower sales price and slower move-in within fixed lease terms for the leased properties and proactive plans to consolidate certain data centers. Other Income (Expenses) Interest Income.
Impairment losses of long-lived assets of RMB3,013.4 million was provided in 2023 mainly due to lower sales price and slower move-in within fixed lease terms for the leased properties and proactive plans to consolidate certain data centers. Other Income (Expenses) Interest Income.
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.
For the years ended December 31, 2022 and 2024, 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, 2022 and 2024.
Our capital expenditures have been primarily funded by net cash provided by financing activities. ​ 170 Table of Contents Holding Company Structure As a holding company with no material operations of our own, we are a corporation separate and apart from our subsidiaries and the VIEs and, therefore, provide for our own liquidity.
Our capital expenditures have been primarily funded by net cash provided by financing activities. ​ 180 Table of Contents Holding Company Structure As a holding company with no material operations of our own, we are a corporation separate and apart from our subsidiaries and the VIEs and, therefore, provide for our own liquidity.
Our company, through one or more of our subsidiaries, the VIEs and their subsidiaries entered into secured and unsecured loan agreements with various financial institutions for project development and working capital purpose with terms ranging from one to 15 years. More specifically, the terms of these secured loan facility agreements generally include one or more of the following conditions.
Our company, through one or more of our subsidiaries, the VIEs and their subsidiaries entered into secured and unsecured loan agreements with various financial institutions for project development and working capital purpose with terms ranging from one to fifteen years. More specifically, the terms of these secured loan facility agreements generally include one or more of the following conditions.
Impairment of Long-Lived Assets We test 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.
Impairment of Long-Lived Assets We test long-lived assets (including property and equipment, prepaid land use rights, operating lease right-of-use 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.
We also present these non-GAAP measures because we believe these non-GAAP measures are frequently used by analysts, investors and other interested parties as measures of the financial performance of companies in our industry. 159 Table of Contents These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP.
We also present these non-GAAP measures because we believe these non-GAAP measures are frequently used by analysts, investors and other interested parties as measures of the financial performance of companies in our industry. 167 Table of Contents These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP.
Except as otherwise disclosed elsewhere in this annual report, there was no restriction or limitation on our company’s ability to receive earnings from our subsidiaries or to distribute them to U.S. investors during the years ended December 31, 2021, 2022 and 2023.
Except as otherwise disclosed elsewhere in this annual report, there was no restriction or limitation on our company’s ability to receive earnings from our subsidiaries or to distribute them to U.S. investors during the years ended December 31, 2022, 2023 and 2024.
Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among our wholly-owned mainland China subsidiaries, the consolidated VIEs and their shareholders is valid, legally binding and enforceable in accordance with its terms.
Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among our consolidated mainland China subsidiaries, the consolidated VIEs and their shareholders is valid, legally binding and enforceable in accordance with its terms.
For contracts that do not meet the conditions required to adopt 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.
For contracts that do not meet the conditions required to adopt 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, 2022, 2023 and 2024.
This information should be read together with our audited consolidated financial statements as of December 31, 2022 and 2023 and for the years ended December 31, 2021, 2022 and 2023 and related notes included elsewhere in this annual report.
This information should be read together with our audited consolidated financial statements as of December 31, 2023 and 2024 and for the years ended December 31, 2022, 2023 and 2024 and related notes included elsewhere in this annual report.
Assuming conversion of all the Series A convertible preferred shares held by its affiliate, Ping An Overseas Holdings would have beneficially owned 2.2% of our Class A ordinary shares as of December 31, 2023.
Assuming conversion of all the Series A convertible preferred shares held by its affiliate, Ping An Overseas Holdings would have beneficially owned 2.2% of our Class A ordinary shares as of December 31, 2024.
The fair value of the restricted shares granted is estimated on the date of grant using the Monte Carlo simulation model. Inputs used included risk-free rate of return, volatility, expected dividend yield, share price at grant date and expected term. 180 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method.
The fair value of the restricted shares granted is estimated on the date of grant using the Monte Carlo simulation model. Inputs used included risk-free rate of return, volatility, expected dividend yield, share price at grant date and expected term. Income Taxes Income taxes are accounted for under the asset and liability method.
We will adopt this standard in our consolidated financial statements for the fiscal year ending December 31, 2024 and are currently in the process of evaluating the disclosure impact on the our consolidated financial statements.
We will adopt this standard in our consolidated financial statements for the fiscal year ending December 31, 2025 and are currently in the process of evaluating the disclosure impact on our consolidated financial statements.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. Overview We are a leading developer and operator of high-performance data centers in China and Southeast Asia.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. Overview – Continuing Operations We are a leading developer and operator of high-performance data centers in China.
Significant changes from income tax expenses in 2022 to income tax benefits in 2023 were mainly attributable to (i) the decrease of current income tax expense by RMB94.2 million primarily due to the decreased taxable profits of some subsidiaries in 2023 and (ii) the increase of deferred income tax benefits by RMB196.8 million primarily due to the reversal of deferred tax liabilities as a result of impairments of purchase price allocations on long-lived assets arising from acquisitions.
Significant changes from income tax expenses in 2022 to income tax benefits in 2023 were mainly attributable to (i) the decrease of current income tax expense by RMB95.0 million primarily due to the decreased taxable profits of some subsidiaries in 2023 and (ii) the increase of deferred income tax benefits by RMB196.8 million primarily due to the reversal of deferred tax liabilities as a result of impairments of purchase price allocations on long-lived assets arising from acquisitions.
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 it is not more-likely-than-not that the fair value of a reporting unit is less 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).
We have a 23-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services.
We have a 24-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services.
Finally, these non-GAAP financial measures do not reflect the impact of net interest expenses, incomes tax benefits (expenses), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment losses of long-lived assets, each of which has been and may continue to be incurred in our business.
Finally, these non-GAAP financial measures do not reflect the impact of income (loss) from discontinued operations, net interest expenses, income tax benefits (expenses), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment losses of long-lived assets, each of which has been and may continue to be incurred in our business.
The terms of these loan agreements also include cross default provisions which could be triggered if our company (i) fails to repay any financial indebtedness in an aggregate amount equivalent to or exceeding RMB50 million (US$7.0 million), 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 PBOC in accordance with the regulations promulgated by PBOC governing loan market rating standards.
The terms of these loan agreements also include cross default provisions which could be triggered if our company (i) fails to repay any financial indebtedness in an aggregate amount equivalent to or exceeding RMB50 million (US$6.8 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 PBOC in accordance with the regulations promulgated by PBOC governing loan market rating standards.
Risk Factors—Risks to Our Business and Industry—Our substantial level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our indebtedness.” The secured loan facilities can be divided into onshore project loan facilities and offshore project loan facilities (including Hong Kong and Malaysia).
Risk Factors—Risks to Our Business and Industry—Our substantial level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our indebtedness.” The secured loan facilities can be divided into onshore project loan facilities and offshore project loan facilities.
(2) Income (loss) from operations as a percentage of net revenue.
(2) Income (loss) from continuing operations as a percentage of net revenue.
We also may not be able to secure suitable land or buildings for new data centers or at a cost or terms acceptable to us. Ability to Identify and Acquire Other Business We have grown our business through acquisitions in the past and intend to continue selectively pursuing strategic partnerships and acquisitions to expand our business.
We also may not be able to secure suitable land or buildings for new data centers or at a cost or terms acceptable to us. 157 Table of Contents Ability to Identify and Acquire Other Business We have grown our business through acquisitions in the past and intend to continue selectively pursuing strategic partnerships and acquisitions to expand our business.
Results of Operations The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2021, 2022 and 2023.
Results of Operations Results of Operations The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2022, 2023 and 2024.
Risk Factors—Risks Related to Doing Business in the People’s Republic of China—Restrictions on currency exchange may limit our ability to utilize our net revenue effectively.” These statutory limitations affect, and future covenant debt limitations might affect, our mainland China subsidiaries’ ability to pay dividends to us. 167 Table of Contents As of December 31, 2023, our cash and restricted cash were deposited in major financial institutions located in mainland China, Hong Kong, United States, Singapore, Malaysia, Macau and Indonesia.
Risk Factors—Risks Related to Doing Business in the People’s Republic of China—Restrictions on currency exchange may limit our ability to utilize our net revenue effectively.” These statutory limitations affect, and future covenant debt limitations might affect, our mainland China subsidiaries’ ability to pay dividends to us. 177 Table of Contents As of December 31, 2024, our cash and restricted cash were deposited in major financial institutions located in mainland China, Hong Kong, Macau, Singapore and the United States.
Does not include interests or debt issuance costs. C. Research and Development, Patents and Licenses, etc. Sourcing and Development See “Item 4. Information on the Company—B. Business Overview—Data Center Sourcing and Development.” Intellectual Property See “Item 4. Information on the Company—B. Business Overview—Innovation, Technology and Intellectual Property.” 175 Table of Contents D. Trend Information Please refer to “—A.
Does not include interests or debt issuance costs. C. Research and Development, Patents and Licenses, etc. Sourcing and Development See “Item 4. Information on the Company—B. Business Overview—Data Center Sourcing and Development.” Intellectual Property See “Item 4. Information on the Company—B. Business Overview—Innovation, Technology and Intellectual Property.” D. Trend Information Please refer to “—A.
Results of Operations” for a discussion of the most recent trends in our services, sales and marketing by the end of 2023.
Results of Operations” for a discussion of the most recent trends in our services, sales and marketing by the end of 2024.
In particular, the OECD's Pillar Two initiative introduces a 15% global minimum tax applied on a jurisdiction-by-jurisdiction basis and for which many jurisdictions have now committed to an effective enactment date starting January 1, 2024. A.
In particular, the OECD’s Pillar Two initiative introduces a 15% global minimum tax applied on a jurisdiction-by-jurisdiction basis and for which many jurisdictions have now committed to an effective enactment date starting January 1, 2024. ​ 165 Table of Contents A.
For the years ended December 31, 2022 and 2023, impairment losses for our data centers’ long-lived assets of RMB12.8 million and RMB3,013.4 million (US$424.4 million) were recognized, respectively. No impairment loss was recorded for the year ended December 31, 2021.
For the years ended December 31, 2022 and 2023, impairment losses for our data centers’ long-lived assets of RMB12.8 million and RMB3,013.4 million were recognized, respectively. No impairment loss was recorded for the year ended December 31, 2024.
No impairment losses were recorded for goodwill for the years ended December 31, 2021, 2022 and 2023.
No impairment losses were recorded for goodwill for the years ended December 31, 2022, 2023 and 2024.
Area utilized: that part of our area in service that is committed to customers and revenue generating pursuant to the terms of customer agreements remaining in effect. Utilization rate: the ratio of area utilized to area in service.
Area utilized: that part of our area in service that is committed to customers and revenue generating pursuant to the terms of customer agreements remaining in effect.
Our results of operations are largely determined by the degree to which our data center capacity is committed or pre-committed as well as its utilization. We had commitment rates for our area in service of 93.8%, 95.5% and 92.8% as of December 31, 2021, 2022 and 2023, respectively.
Our results of operations are largely determined by the degree to which our data center capacity is committed or pre-committed as well as its utilization. We had commitment rates for our area in service of 95.5%, 92.5% and 91.9% as of December 31, 2022, 2023 and 2024, respectively.
Net cash provided by financing activities was RMB4,856.3 million in 2022, which was primarily due to proceeds from borrowings of RMB11,889.2 million, proceeds from issuance of convertible bonds of RMB3,917.0 million, proceeds from other financing arrangements of RMB845.3 million and proceeds from sales of equity interests of subsidiaries of RMB69.8 million, partially offset by repayment of short-term and long-term borrowings of RMB9,585.4 million, payment under finance lease and other financing obligations of RMB1,138.5 million, payment for acquisition of redeemable non-controlling interests of RMB593.8 million, payment of deferred contingent consideration for acquisitions of RMB280.4 million, payment of debt issuance cost of RMB109.4 million, payment for purchase of property and equipment through vendor financing of RMB105.9 million, and payment of redeemable preferred shares dividends of RMB51.6 million.
Net cash provided by financing activities from continuing operations was RMB3,485.8 million in 2022, which was primarily due to proceeds from borrowings of RMB10,498.4 million, proceeds from issuance of convertible bonds of RMB3,917.0 million, proceeds from other financing arrangements of RMB845.3 million and proceeds from sales of equity interests of subsidiaries of RMB69.8 million, partially offset by repayment of borrowings of RMB9,585.4 million, payment under finance lease and other financing obligations of RMB1,138.5 million, payment for acquisition of redeemable non-controlling interests of RMB593.8 million, payment of deferred contingent consideration for acquisitions of RMB280.4 million, payment for purchase of property and equipment through vendor financing of RMB105.9 million, payment of debt issuance cost of RMB89.2 million, and payment of redeemable preferred shares dividends of RMB51.6 million.
Sales agreements with cloud service provider and large internet customers are typically deemed to have a variable consideration for revenue recognition purposes because the total amount payable over the life of the sales agreement is not a fixed amount.
Our customer agreements have either a variable consideration or a fixed consideration. 159 Table of Contents Sales agreements with cloud service provider and large internet customers are typically deemed to have a variable consideration for revenue recognition purposes because the total amount payable over the life of the sales agreement is not a fixed amount.
Cash provided by operating activities was RMB2,858.1 million in 2022, primarily due to a net loss of RMB1,266.1 million, adjusted primarily for (i) depreciation and amortization of RMB3,189.1 million, primarily relating to our data center property and equipment, (ii) share-based compensation expenses of RMB290.8 million, (iii) amortization of debt issuance and commitment cost and debt discount of RMB154.9 million, (iv) operating lease cost relating to prepaid land use rights of RMB101.8 million, (v) changes in working capital, partially offset by (vi) deferred tax benefits of RMB99.2 million and (vii) gain from purchase price adjustment of RMB205.0 million.
Cash provided by operating activities from continuing operations was RMB2,862.2 million in 2022, primarily due to a net loss of continuing operations of RMB1,104.6 million, adjusted primarily for (i) depreciation and amortization of RMB3,120.3 million, primarily relating to our data center property and equipment, (ii) share-based compensation expenses of RMB290.8 million, (iii) amortization of debt issuance and commitment cost and debt discount of RMB151.8 million, (iv) operating lease cost relating to prepaid land use rights of RMB100.9 million and (v) changes in working capital, partially offset by (vi) gain from purchase price adjustment of RMB205.0 million and (vii) deferred tax benefits of RMB99.2 million.
For the years ended December 31, 2021, 2022 and 2023, the VIEs and their subsidiaries contributed 96.1%, 96.1% and 95.3%, respectively, of our total net revenue. Project Financing Structure Our data center projects are financed with both equity and debt.
For the years ended December 31, 2022, 2023 and 2024, the VIEs and their subsidiaries contributed 96.7%, 97.0% and 96.1%, respectively, of our total net revenue. Project Financing Structure Our data center projects are financed with both equity and debt.
Accordingly, relevant revenue is recognized each month based on actual additional power consumption fees. 177 Table of Contents Our colocation service and managed service contracts with customers contain both lease and nonlease components.
Accordingly, relevant revenue is recognized each month based on actual additional power consumption fees. Our colocation service and managed service contracts with customers contain both lease and non-lease components.
This increase was primarily a result of an increase of borrowings and convertible bonds payable. 161 Table of Contents Government Grants. Income from government grants decreased by 11.6% to RMB84.5 million (US$11.9 million) in 2023 from RMB95.6 million in 2022, primarily due to the decrease in additional deduction of input VAT. Foreign Currency Exchange (Loss) Gain, net.
This increase was primarily a result of an increase in borrowings and convertible bonds payable. Government Grants. Income from government grants decreased by 11.3% to RMB84.4 million in 2023 from RMB95.2 million in 2022, primarily due to the decrease in additional deduction of input VAT. Foreign Currency Exchange (Loss) Gain, net.
Increase in utility costs were largely a result of an increase in power tariff and new data center facilities. Increase in depreciation and amortization costs were largely a result of new data center facilities in service. Cost of revenue as percentage of net revenue increased to 80.7% in 2023 from 79.2% in 2022.
Increase in utility costs was largely a result of an increase in power tariff and new data center facilities. Increase in depreciation and amortization costs was largely a result of new data center facilities in service. Cost of revenue as percentage of net revenue increased to 80.1% in 2023 from 78.9% in 2022.
The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that we would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The judgments used in the valuation of incremental borrowing rate of the leases are inherently subjective.
The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that we would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term.
You should read the following discussion and analysis of our financial position and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties.
You should read the following discussion and analysis of our financial position and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report.
Key Factors Affecting Our Results of Operations Our business and results of operations are generally affected by the development of China’s data center services market. We have benefited from rapid growth in this market during recent years and any adverse changes in the data center services market in China may harm our business and results of operations.
We have benefited from rapid growth in this market during recent years and any adverse changes in the data center services market in China may harm our business and results of operations. In addition, we believe that our results of operations are directly affected by the following key factors.
Our suite of managed hosting services includes technical services, network management services, data storage services, system security services, database services and server middleware services. Our suite of managed cloud services includes direct private connection to leading public clouds, an innovative service platform for managing hybrid cloud. Our customer agreements have either a variable consideration or a fixed consideration.
Our suite of managed hosting services includes technical services, network management services, data storage services, system security services, database services and server middleware services. Our suite of managed cloud services includes direct private connection to leading public clouds, an innovative service platform for managing hybrid cloud.
Under the terms of the VIE Arrangements, we have (i) the right to receive service fees on a yearly basis at an amount equivalent to all of the net profits of Management HoldCo, GDS Beijing and GDS Shanghai under the exclusive technology license and service agreements when such services are provided; (ii) the right to receive all dividends declared by Management HoldCo, GDS Beijing and GDS Shanghai and the right to all undistributed earnings of Management HoldCo, GDS Beijing and GDS Shanghai; (iii) the right to receive the residual benefits of the Management HoldCo, GDS Beijing and GDS Shanghai through its exclusive option to acquire 100% of the equity interests in Management HoldCo, GDS Beijing and GDS Shanghai, to the extent permitted under PRC law; and (iv) the right to require the shareholders of Management HoldCo, GDS Beijing, GDS Beijing’s subsidiaries and GDS Shanghai to appoint the PRC citizen (s) as designated by us 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 Management HoldCo, GDS Beijing, GDS Beijing’s subsidiaries and GDS Shanghai requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Management HoldCo, GDS Beijing and GDS Shanghai, and appointing directors and executive officers. 176 Table of Contents In accordance with ASC 810, we have a controlling financial interest in Management HoldCo, GDS Beijing and GDS Shanghai because we have (i) the power to direct activities of Management HoldCo, GDS Beijing and GDS Shanghai that most significantly impact their economic performance; and (ii) the right to receive expected residual return of Management HoldCo, GDS Beijing and GDS Shanghai that could potentially be significant to Management HoldCo, GDS Beijing and GDS Shanghai.
Under the terms of the VIE Arrangements, we have (i) the right to receive service fees on a yearly basis at an amount equivalent to all of the net profits of Management HoldCo, GDS Beijing and GDS Shanghai under the exclusive technology license and service agreements when such services are provided; (ii) the right to receive all dividends declared by Management HoldCo, GDS Beijing and GDS Shanghai and the right to all undistributed earnings of Management HoldCo, GDS Beijing and GDS Shanghai; (iii) the right to receive the residual benefits of the Management HoldCo, GDS Beijing and GDS Shanghai through its exclusive option to acquire 100% of the equity interests in Management HoldCo, GDS Beijing and GDS Shanghai, to the extent permitted under PRC law; and (iv) the right to require the shareholders of Management HoldCo, GDS Beijing, GDS Beijing’s subsidiaries and GDS Shanghai to appoint the PRC citizen (s) as designated by us 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 Management HoldCo, GDS Beijing, GDS Beijing’s subsidiaries and GDS Shanghai requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Management HoldCo, GDS Beijing and GDS Shanghai, and appointing directors and executive officers.
There is no requirement imposed on investors to complete registration or obtain approval from appropriate government authorities before they can receive dividend payments from our company in the Cayman Islands. See “Item 3. Key Information—D.
There is no requirement imposed on investors to complete registration or obtain approval from appropriate government authorities before they can receive dividend payments from GDS Holdings. See “Item 3. Key Information—D.
The deferred tax impact mainly arose from the impairment losses of long-lived assets and the amortization of deferred tax liabilities attributable to acquisitions.
In 2023, the income tax benefits mainly arose from the impairment losses of long-lived assets and the amortization of deferred tax liabilities attributable to acquisitions.
Dividends paid by our wholly foreign-owned subsidiaries in mainland China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and receives approval from the relevant tax authority.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. 164 Table of Contents Dividends paid by our wholly foreign-owned subsidiaries in mainland China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and receives approval from the relevant tax authority.
Our ability to manage an efficient supply chain will improve our cost of development and construction time. As part of our initiatives to improve the cost efficiency of our capital expenditure, we also participate in bulk purchasing programs for certain equipment with our strategic partners and major customers to leverage larger volume purchases to obtain a cost advantage.
As part of our initiatives to improve the cost efficiency of our capital expenditure, we also participate in bulk purchasing programs for certain equipment with our strategic partners and major customers to leverage larger volume purchases to obtain a cost advantage.
The maximum aggregate number of shares which may be subject to equity awards under the 2016 share incentive plan is 56,707,560 shares, provided, however, that such maximum aggregate number of shares shall be automatically increased on the first day of each fiscal year (i.e., January 1 of each calendar year) during which the 2016 share incentive plan remains in effect to three percent (3%) of our then total issued and outstanding shares, if and whenever the shares which may be subject to equity awards under the 2016 share incentive plan accounts for less than one and half percent (1.5%) of our then total issued and outstanding shares.
The maximum aggregate number of shares which may be subject to equity awards under the 2016 share incentive plan is 56,707,560 shares, provided, however, that such maximum aggregate number of shares shall be automatically increased on the first day of each fiscal year (i.e., January 1 of each calendar year) during which the 2016 share incentive plan remains in effect to three percent (3%) of our then total issued and outstanding shares, if and whenever the shares which may be subject to equity awards under the 2016 share incentive plan accounts for less than one and half percent (1.5%) of our then total issued and outstanding shares. 190 Table of Contents We account for the compensation cost from share-based payment transactions with employees based on the grant-date fair value of the equity-classified awards.
Likewise, there was no restriction or limitation on the consolidated VIEs to settle obligations under the consolidated VIE contractual arrangements. As of December 31, 2023, certain subsidiaries, the VIEs and their subsidiaries had retained earnings of RMB2,497.3 million (US$351.7 million) in aggregate.
Likewise, there was no restriction or limitation on the consolidated VIEs to settle obligations under the consolidated VIE contractual arrangements. As of December 31, 2024, certain subsidiaries, the VIEs and their subsidiaries had retained earnings of RMB3,334.7 million (US$456.9 million) in aggregate.
We had utilization rates for our area in service of 65.5%, 71.8% and 73.1% as of December 31, 2021, 2022 and 2023, respectively.
We had utilization rates for our area in service of 71.8%, 73.9% and 73.8% as of December 31, 2022, 2023 and 2024, respectively.
The remaining 43.9% equity interest will be held in the form of Series A shares by the Investors, including Hillhouse, Rava Partners, Boyu, Princeville Capital, Tekne Capital, among others.
The remaining 47.3% equity interest was held in the form of Series A shares by the Series A Investors, including Hillhouse, Rava Partners, Boyu, Princeville Capital, Tekne Capital, among others.
Under our current corporate structure, our company in the Cayman Islands may rely on dividend payments from our mainland China subsidiaries to fund any of our cash and financing requirements.
Under our current corporate structure, GDS Holdings may rely on dividend payments from our mainland China subsidiaries to fund any of our cash and financing requirements.
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.
In addition, the terms of these loan agreements include financial covenants that limit certain financial ratios, such as the gross leverage ratio and net debt to EDBITA ratio, during the relevant period, as defined in the agreements.
If we do 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 we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Revenue is measured as the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
As of December 31, 2023, the unused amount of working capital and project financing credit was RMB8,410.7 million (US$1,184.6 million). 166 Table of Contents Based on our current level of operations and available cash, we believe that we have sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements at least for the next 12 months.
As of December 31, 2024, the unused amount of working capital and project financing credit was RMB3,316.8 million (US$454.4 million). Based on our current level of operations and available cash, we believe that we have sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements at least for the next 12 months.
As a result, our ability to pay dividends and to finance any debt we may incur depends upon dividends paid by our subsidiaries. If our mainland China subsidiaries, or any newly formed mainland China subsidiaries, incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
If our mainland China subsidiaries, or any newly formed mainland China subsidiaries, incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
Revenue under such fixed consideration agreements is recognized on a straight-line basis over the contract term. 153 Table of Contents We are subject to value-added tax, or VAT, at a rate of 6% on the IDC services we provide, 9% on leasing of immovable properties and 13% on IT equipment sales and power charges under the unbundled agreements, less any deductible VAT we have already paid or borne.
We are subject to value-added tax, or VAT, at a rate of 6% on the IDC services we provide, 9% on leasing of immovable properties and 13% on IT equipment sales and power charges under the unbundled agreements, less any deductible VAT we have already paid or borne.
While we strive to both secure customer commitments to our data center services so that the most data center capacity will be utilized and also to minimize the time as to when our data center area becomes operational and the customer occupies that area, these timing differences may result in fluctuation of our cost of revenue as a percentage of our net revenue between periods.
While we strive to both secure customer commitments to our data center services so that the most data center capacity will be utilized and also to minimize the time as to when our data center area becomes operational and the customer occupies that area, these timing differences may result in fluctuation of our cost of revenue as a percentage of our net revenue between periods. 160 Table of Contents Operating Expenses Our operating expenses consist of selling and marketing expenses, general and administrative expenses, research and development expenses and impairment losses of long-lived assets.
The Series A subscription price implies a pre-money equity valuation for GDSI of US$750 million. Post-Closing and on an as-converted basis, GDSH will own approximately 56.1% of the equity interest of GDSI in the form of ordinary shares.
The Series A subscription price implies a pre-money equity valuation for DayOne of US$750 million. Post-closing and on an as-converted basis, GDS owned approximately 52.7% of the equity interest of DayOne in the form of ordinary shares.
Historically, we also have had finance lease and other financing obligations. As of December 31, 2023, we had cash of RMB7,710.7 million (US$1,086.0 million).
Historically, we also have had finance lease and other financing obligations. As of December 31, 2024, we had cash of RMB7,867.7 million (US$1,077.9 million).
Our general and administrative expenses were RMB1,185.4 million (US$167.0 million) in 2023, compared with RMB1,185.1 million in 2022, which was mainly resulted from (i) an increase in depreciation and amortization expenses of RMB41.0 million, (ii) an increase in share-based compensation expenses of RMB20.1 million, partially offset by (i) a decrease in operating lease cost relating to prepaid land use rights of RMB21.4 million as a result of certain data centers commencing operations in 2023, (ii) a cash reimbursement from the Company’s ADS depositary bank of RMB22.1 million in 2023 and (iii) a decrease in other expenses of RMB17.3 million.
Our general and administrative expenses were RMB966.0 million in 2023, compared with RMB1,047.1 million in 2022, which was mainly resulted from (i) a decrease in operating lease cost relating to prepaid land use rights expenses of RMB39.5 million as a result of certain data centers commencing operations in 2023, (ii) a decrease in professional fees of RMB20.7 million, (iii) a cash reimbursement from the Company’s ADS depositary bank of RMB22.1 million in 2023 and (iv) a decrease in other expenses of RMB14.9 million, partially offset by an increase in share-based compensation of RMB16.1 million as a result of increased headcount in 2023.
GDSH and certain Investors will have the right to appoint directors to the Board of GDSI proportionate with their ownership. Mr. William Huang will continue in his role as Chairman of the Board of GDSI.
GDS and certain Series B investors have the right to appoint directors to the Board of DayOne proportionate with their ownership. Mr. William Huang continues in his role as Chairman of the Board of DayOne.
Income Tax Benefits (Expenses) Income tax benefits were RMB14.8 million (US$2.1 million) in 2023, compared to income tax expenses of RMB276.2 million in 2022. Our income tax benefits (expenses) are comprised of current tax expense, mainly attributable to certain profitable subsidiaries in mainland China, and deferred tax impact.
Income Tax Benefits (Expenses) Income tax expenses were RMB156.1 million (US$21.4 million) in 2024, compared to income tax benefits of RMB15.6 million in 2023. Our income tax benefits (expenses) are comprised of current tax expense, mainly attributable to certain profitable subsidiaries in mainland China, and deferred tax impact.
We recognize 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.
We recognize 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.
Our total area committed, as a leading indicator to our results of operations, increased from 556,822 sqm as of December 31, 2021 to 630,716 sqm as of December 31, 2022, and further to 670,975 sqm as of December 31, 2023. 150 Table of Contents Pricing Structure and Power Costs Our results of operations will be affected by our ability to operate our data centers efficiently in terms of power consumption.
Our total area committed, as a leading indicator to our results of operations, increased from 598,300 sqm as of December 31, 2022 to 618,942 sqm as of December 31, 2023, and further to 629,997 sqm as of December 31, 2024. ​ 156 Table of Contents Pricing Structure and Power Costs Our results of operations will be affected by our ability to operate our data centers efficiently in terms of power consumption.
We had pre-commitment rates of 61.3%, 71.5% and 76.4% as of December 31, 2021, 2022 and 2023, respectively. Once construction is complete, and the data center enters service, we re-categorize area pre-committed as area committed. We aim to maintain high levels of long-term commitment rates.
Once construction is complete, and the data center enters service, we re-categorize area pre-committed as area committed. We aim to maintain high levels of long-term commitment rates. We had commitment rates for our area in service of 95.5%, 92.5% and 91.9% as of December 31, 2022, 2023 and 2024, respectively.
The total number of shares that may be issued under the 2014 share incentive plan is 29,240,000 ordinary shares. 179 Table of Contents We adopted a second equity incentive plan in August 2016, or the 2016 share incentive plan, for the granting of share options and other equity awards to key employees and directors in exchange for their services.
Share-based Compensation We adopted an equity incentive plan in July 2014, or the 2014 share incentive plan, for the granting of share options to key employees, directors and external consultants in exchange for their services. The total number of shares that may be issued under the 2014 share incentive plan is 29,240,000 ordinary shares.
We have 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.
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. 189 Table of Contents We have 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.
(3) Net loss as a percentage of net revenue. 158 Table of Contents Non-GAAP Measures In evaluating our business, we consider and use the following non-GAAP measures as supplemental measures to review and assess our operating performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ (in thousands, except for numbers of shares and per share data) Non-GAAP Consolidated Financial Data: ​ ​ Adjusted EBITDA (1) ​ 3,703,352 4,251,406 4,624,099 651,288 ​ Adjusted EBITDA margin (2) ​ 47.4 % 45.6 % 46.4 % 46.4 % Adjusted gross profit (3) ​ 4,166,388 4,773,007 5,097,357 717,947 ​ Adjusted gross profit margin (4) ​ 53.3 % 51.2 % 51.2 % 51.2 % (1) Adjusted EBITDA is defined as net income or net loss (computed in accordance with GAAP) excluding net interest expenses, incomes tax expenses (benefits), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment losses of long-lived assets.
(3) Net (loss) income as a percentage of net revenue. ​ ​ 166 Table of Contents Non-GAAP Measures In evaluating our business, we consider and use the following non-GAAP measures as supplemental measures to review and assess our operating performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB RMB RMB US$ ​ (in thousands, except for numbers of shares and per share data) Non-GAAP Consolidated Financial Data: ​ ​ Adjusted EBITDA (1) ​ 4,333,724 4,733,004 4,876,436 668,070 ​ Adjusted EBITDA margin (2) ​ 46.8 % 48.4 % 47.2 % 47.2 % Adjusted gross profit (3) ​ 4,788,629 5,087,630 5,314,174 728,038 ​ Adjusted gross profit margin (4) ​ 51.7 % 52.0 % 51.5 % 51.5 % (1) Adjusted EBITDA is defined as net income or net loss (computed in accordance with GAAP) excluding income (loss) from discontinued operations, net interest expenses, income tax expenses (benefits), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment losses of long-lived assets.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Yu is a Certified Public Accountant in the United States admitted by the Accountancy Board of Ohio. Mr. Zulkifli Baharudin has served as our independent director since November 2016. Since 2011, he has been serving as the executive chairman of Indo-Trans Corporation, a logistics and supply chain company across Indo-China.
Yu is a Certified Public Accountant in the United States admitted by the Accountancy Board of Ohio. Mr. Zulkifli Baharudin has served as our independent director since November 2016. Since 2011, he has been serving as the executive chairman of Indo-Trans Corporation, a logistics and supply chain company across Indo-China. Mr.
Holders may convert their notes into our ADSs or Class A ordinary shares 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 Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date.
Holders may convert their notes into our ADSs or Class A ordinary shares 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 Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date.
Upon conversion, we will cause to be delivered, for each US$1,000 principal amount of converted notes, a number of ADSs or Class A ordinary shares calculated pursuant to the then effective conversion rate.
Upon conversion, we will cause to be delivered, for each US$1,000 principal amount of converted notes, a number of ADSs or Class A ordinary shares calculated pursuant to the then effective conversion rate.
From 2003 to 2007, he was president and then vice chairman of the RGM group International (RGMI), a leading global resource-based group and in 2008, he served as deputy chairman RGMI. Mr. Lim obtained a bachelor’s degree in engineering with honors from the Queen Mary College, University of London, and an MBA from the Cranfield School of Management. Ms.
From 2003 to 2007, he was president and then vice chairman of the RGM group International (RGMI), a leading global resource-based group and in 2008, he served as deputy chairman RGMI. Mr. Lim obtained a bachelor’s degree in engineering with honors from the Queen Mary College, University of London, and an MBA from the Cranfield School of Management. Mr.
Mr. Wojtaszek serves as an industry advisor to global investment firm, The Carlyle Group, Inc. and Actis, a leading global investor in sustainable infrastructure and sits on the board of the data center engineering program at Southern Methodist University. He has a BA from Rutgers University and a MBA from Columbia University. Ms.
Mr. Wojtaszek serves as an industry advisor to global investment firm, The Carlyle Group, Inc. and Actis, a leading global investor in sustainable infrastructure and sits on the board of the data center engineering program at Southern Methodist University. He has a BA from Rutgers University and a MBA from Columbia University. Mr.
King was an Associate Director at Macquarie Bank focused on real estate investment banking. Mr. King has over 25 years of global investment experience in the data centre, finance, real estate and engineering industries. In the data centre space, he has led over US$3.0bn of transactions since 2011. Mr.
King was an Associate Director at Macquarie Bank focused on real estate investment banking. Mr. King has over 25 years of global investment experience in the data center, finance, real estate and engineering industries. In the data centre space, he has led over US$3.0bn of transactions since 2011. Mr.
Our executive committee is responsible for, among other things, advising, providing consultation and recommendations to our board of directors on: ● operational performance of any of our group companies; ● appropriate strategies for any of our group companies; ● strategic business and financing plans and annual budget of any of the group companies; ● acquisitions, dispositions, investments and other potential growth and expansion opportunities for any of our group companies; ● capital structure and financing strategy of our group companies, including but not limited to any debt, equity or equity-linked financing transactions, as well as any issuance, repurchase, conversion or redemption of any equity interests or debt of any of our group companies; ● any material litigation or other legal or administrative proceedings to which any of our group companies is a party; ● entry into any material contracts exceeding the approval authority of our chief executive officer or its equivalent, the chief financial officer, and all the other executive officers of any of our group companies; 196 Table of Contents ● the approval of the incurrence of debt above certain thresholds; ● reporting regularly to our board of directors; and ● any other responsibilities as are delegated to the executive committee by our board of directors from time to time.
Our executive committee is responsible for, among other things, advising, providing consultation and recommendations to our board of directors on: ● operational performance of any of our group companies; ● appropriate strategies for any of our group companies; ● strategic business and financing plans and annual budget of any of the group companies; ● acquisitions, dispositions, investments and other potential growth and expansion opportunities for any of our group companies; ● capital structure and financing strategy of our group companies, including but not limited to any debt, equity or equity-linked financing transactions, as well as any issuance, repurchase, conversion or redemption of any equity interests or debt of any of our group companies; ● any material litigation or other legal or administrative proceedings to which any of our group companies is a party; ● entry into any material contracts exceeding the approval authority of our chief executive officer or its equivalent, the chief financial officer, and all the other executive officers of any of our group companies; ● the approval of the incurrence of debt above certain thresholds; ● reporting regularly to our board of directors; and ● any other responsibilities as are delegated to the executive committee by our board of directors from time to time.
Lopez’s track record includes founding roles as the CEO and Executive Director of Keppel Data Centres where he played a key role in building up the company’s growth and expansion in Asia and Europe.
Lopez’s track record includes founding roles as the CEO and Executive Director of Keppel Data Centres where he played a key role in building up the company’s growth and expansion across Asia and Europe.
In addition, a quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy or by duly authorized representative, representing not less than one-third in nominal value of the total issued voting shares in our company, save that for any general meeting requisitioned by one or more shareholders holding at the date of deposit of the requisition not less than 10% of the voting rights in our company, two shareholders entitled to vote and present in person or by proxy or by duly authorized representative, representing not less than 10% of the aggregate voting power in our company throughout the meeting shall form a quorum. 188 Table of Contents B.
In addition, a quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy or by duly authorized representative, representing not less than one-third in nominal value of the total issued voting shares in our company, save that for any general meeting requisitioned by one or more shareholders holding at the date of deposit of the requisition not less than 10% of the voting rights in our company, two shareholders entitled to vote and present in person or by proxy or by duly authorized representative, representing not less than 10% of the aggregate voting power in our company throughout the meeting shall form a quorum. 198 Table of Contents B.
Where STT GDC beneficially owns: less than 25%, but 15% or more, of our issued and outstanding share capital, then of the directors appointed by STT GDC, only two may remain in office, and the other director, who shall be determined by STT GDC, or failing which shall be the director whose term is due to expire soonest, shall retire at the expiry of his/her term; less than 15%, but 8% or more, of our issued and outstanding share capital, then of the directors appointed by STT GDC, only one may remain in office, and the other directors, who shall be determined by STT GDC, or failing which shall be the directors whose terms are due to expire soonest, shall retire at the expiry of their respective terms; less than 8% of our issued and outstanding share capital, then the directors appointed by STT GDC may not remain in office and all shall retire at the expiry of their respective terms.
Where STT Garnet beneficially owns: less than 25%, but 15% or more, of our issued and outstanding share capital, then of the directors appointed by STT Garnet, only two may remain in office, and the other director, who shall be determined by STT Garnet, or failing which shall be the director whose term is due to expire soonest, shall retire at the expiry of his/her term; less than 15%, but 8% or more, of our issued and outstanding share capital, then of the directors appointed by STT Garnet, only one may remain in office, and the other directors, who shall be determined by STT Garnet, or failing which shall be the directors whose terms are due to expire soonest, shall retire at the expiry of their respective terms; less than 8% of our issued and outstanding share capital, then the directors appointed by STT Garnet may not remain in office and all shall retire at the expiry of their respective terms.
We have received from each independent director an annual confirmation of his/her independence pursuant to the Hong Kong Listing Rules and we consider them as independent. 182 Table of Contents Mr. William Wei Huang is our founder, chairman of our board of directors and, since 2002, has served as our chief executive officer. From 2004 to 2020, Mr.
We have received from each independent director an annual confirmation of his/her independence pursuant to the Hong Kong Listing Rules and we consider them as independent. 193 Table of Contents Mr. William Wei Huang is our founder, chairman of our board of directors and, since 2002, has served as our chief executive officer. From 2004 to 2020, Mr.
King was instrumental in the formation and operation of Securus Data Property Fund (Securus) where he was co-CEO. Securus was an investment fund that developed a portfolio of high quality data centres across Asia Pacific and Europe. This business has since been listed on the SGX as Keppel DC REIT (SGX: KDCREIT). Prior to this, Mr.
King was instrumental in the formation and operation of Securus Data Property Fund (Securus) where he was co-CEO. Securus was an investment fund that developed a portfolio of high quality data centers across Asia Pacific and Europe. This business has since been listed on the SGX as Keppel DC REIT (SGX: KDCREIT). Prior to this, Mr.
GAAP that have been discussed with management and all other material written communications between the independent auditor and management; ● establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; 194 Table of Contents ● annually reviewing and reassessing the adequacy of our audit committee charter; ● such other matters that are specifically delegated to our audit committee by our board of directors from time to time; ● performing, at least annually, an evaluation of the performance of the audit committee; and ● reporting regularly to the full board of directors.
GAAP that have been discussed with management and all other material written communications between the independent auditor and management; ● establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● such other matters that are specifically delegated to our audit committee by our board of directors from time to time; ● performing, at least annually, an evaluation of the performance of the audit committee; and ● reporting regularly to the full board of directors.
In this role, he is responsible for leading the growth of STT GDC into new regions in addition to managing the existing portfolio of investments. Since joining STT GDC, Mr. King has been leading the establishment and expansion of STT GDC’s high quality platforms across 10 geographies with significant presence in Asia and Europe. Prior to joining STT GDC, Mr.
In this role, he is responsible for leading the growth of STT GDC into new regions in addition to managing the existing portfolio of investments. Since joining STT GDC, Mr. King has been leading the establishment and expansion of STT GDC’s high quality platforms across 11 geographies with significant presence in Asia and Europe. Prior to joining STT GDC, Mr.
Lopez holds a Bachelor of Arts degree with Honours from the National University of Singapore and a Master’s from Rutgers University, USA. 183 Table of Contents Mr. Liu Chee Ming has been a director of our company since December 2023. Mr. Liu has over 40 years of experience across the financial services sector across Asia Pacific. Mr.
Lopez holds a Bachelor of Arts degree with Honours from the National University of Singapore and a Master’s degree from Rutgers University, USA. 194 Table of Contents Mr. Liu Chee Ming has been a director of our company since December 2023. Mr. Liu has over 40 years of experience across the financial services sector across Asia Pacific. Mr.
Mr. Liu was an Independent Supervisor of the Supervisory Committee of Dalian Wanda Commercial Properties Co., Ltd. (a company which was listed on the Hong Kong Stock Exchange and privatised in September 2016) from May 2015 to March 2019. Mr. Liu holds a Bachelor of Business Administration from the former University of Singapore. Mr.
Mr. Liu was an Independent Supervisor of the Supervisory Committee of Dalian Wanda Commercial Properties Co., Ltd. (a company which was listed on the Hong Kong Stock Exchange and privatized in September 2016) from May 2015 to March 2019. Mr. Liu holds a Bachelor of Business Administration from the former University of Singapore. Mr.
Newman served as a managing director at Bank of America Merrill Lynch with responsibility for investment banking clients in the telecom, media, and technology sectors in Asia. From 2005 to 2007, Mr. Newman acted as an advisor in the chairman’s office of Reliance Communications in Mumbai, India. From 2001 to 2005, Mr.
From 2008 to 2009, Mr. Newman served as a managing director at Bank of America Merrill Lynch with responsibility for investment banking clients in the telecom, media, and technology sectors in Asia. From 2005 to 2007, Mr. Newman acted as an advisor in the chairman’s office of Reliance Communications in Mumbai, India. From 2001 to 2005, Mr.
Prior to joining us, she worked at the KPMG San Francisco office from 1997 to 2003 and was a partner of KPMG’s Greater China region since 2007. Ms. Qian has in-depth experience with the SEC reporting matters, internal controls and capital market transaction. Ms.
Prior to joining us, she worked at the KPMG San Francisco office from 1997 to 2003 and was a partner of KPMG’s Greater China region since 2007. Ms. Qian has in-depth experience with the SEC reporting matters, internal controls and capital market transactions. Ms.
Huang, the beneficial owner of the 43,590,336 Class B ordinary shares then issued and outstanding. 187 Table of Contents Subject to the provisions of our Articles of Association, our Class B ordinary shares may be converted into Class A ordinary shares at the option of the holder or automatically at the occurrence of an automatic conversion event.
Huang, the beneficial owner of the 43,590,336 Class B ordinary shares then issued and outstanding. 197 Table of Contents Subject to the provisions of our Articles of Association, our Class B ordinary shares may be converted into Class A ordinary shares at the option of the holder or automatically at the occurrence of an automatic conversion event.
The functions and powers of our board of directors include, among others: ● conducting and managing the business of our company; ● representing our company in contracts and deals; ● appointing attorneys for our company; ● select senior management such as managing directors and executive directors; ● providing employee benefits and pension; ● managing our company’s finance and bank accounts; ● exercising the borrowing powers of our company and mortgaging the property of our company; and 192 Table of Contents ● exercising any other powers conferred by the shareholders’ meetings or under our Amended and Restated Memorandum and Articles of Association.
The functions and powers of our board of directors include, among others: ● conducting and managing the business of our company; ● representing our company in contracts and deals; ● appointing attorneys for our company; ● select senior management such as managing directors and executive directors; ● providing employee benefits and pension; ● managing our company’s finance and bank accounts; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● exercising any other powers conferred by the shareholders’ meetings or under our Amended and Restated Memorandum and Articles of Association.
King holds a Bachelor’s Degree in Engineering (Honours) from the University of Sydney, Australia and a Graduate Diploma of Finance and Investment from Financial Services Institute of Australasia (FINSIA). He is also a Graduate Member of the Australian Institute of Company Directors (AICD). 185 Table of Contents Ms.
King holds a Bachelor’s Degree in Engineering (Honours) from the University of Sydney, Australia and a Graduate Diploma of Finance and Investment from Financial Services Institute of Australasia (FINSIA). He is also a Graduate Member of the Australian Institute of Company Directors (AICD). 196 Table of Contents Ms.
He also established the Securus Data Property Fund, an investment fund focused on data centre assets in the Asia-Pacific region, Europe, and the Middle East, which later merged with Keppel Data Centres’ assets during the company’s SGX REIT listing. Mr.
He also established the Securus Data Property Fund, an investment fund focused on data center assets in the Asia-Pacific region, Europe, and the Middle East, which later merged with Keppel Data Centres’ assets during the company’s SGX REIT listing. Mr.
Any director appointed by STT GDC who retires pursuant to the foregoing sentence may, in the sole discretion of our nominating and corporate governance committee, be re-nominated and subject to re-election at the next general meeting of our shareholders.
Any director appointed by STT Garnet who retires pursuant to the foregoing sentence may, in the sole discretion of our nominating and corporate governance committee, be re-nominated and subject to re-election at the next general meeting of our shareholders.
We did not pay any other cash compensation or benefits in kind to our directors and executive officers. We set aside an aggregate of US$0.1 million for pensions, retirement or other benefits for our directors and executive officers in 2023.
We did not pay any other cash compensation or benefits in kind to our directors and executive officers. We set aside an aggregate of US$0.1 million for pensions, retirement or other benefits for our directors and executive officers in 2024.
On March 8, 2022, we completed a private placement of US$620 million in aggregate principal amount of 0.25% convertible senior notes due 2029 to Sequoia China Infrastructure Fund I, STT GDC, and an Asian sovereign wealth fund with which we have a strategic relationship. The notes will mature on March 8, 2029.
On March 8, 2022, we completed a private placement of US$620 million in aggregate principal amount of 0.25% convertible senior notes due 2029 to Sequoia China Infrastructure Fund I, STT GDC, and an Asian sovereign wealth fund with which we have a strategic relationship.
Liu is currently the Managing Director of Platinum Holdings Company Limited, which he established in March 1996. Mr. Liu is an Independent Non-Executive Director of ST Telemedia since September 2020. He has also been an Independent Director of OUE Hospitality Trust Management Pte. Ltd. since June 2013.
Liu is currently the Managing Director of Platinum Holdings Company Limited, which he established in March 1996. Mr. Liu is an Independent Non-Executive Director of Singapore Technologies Telemedia Pte Ltd since September 2020. He has also been an Independent Director of OUE Hospitality Trust Management Pte. Ltd. since June 2013.
The authority and responsibility of the sustainability committee are to develop ESG strategies, monitor the implementation of ESG strategies and conduct quarterly and annual ESG performance monitoring. Executive Committee Our executive committee consists of Bruno Lopez, William Wei Huang, Judy Qing Ye and Jonathan King. Bruno Lopez is the chairman of our executive committee.
The authority and responsibility of the sustainability committee are to develop ESG strategies, monitor the implementation of ESG strategies and conduct quarterly and annual ESG performance monitoring. 205 Table of Contents Executive Committee Our executive committee consists of Bruno Lopez, William Wei Huang, Judy Qing Ye and Jonathan King. Bruno Lopez is the chairman of our executive committee.
She is also the President of the Wharton Club of Shanghai and the Director of the Union of Finance Alumni of Peking University (UFAPKU). Ms. Ye received her bachelor of economics degree from Peking University and earned her MA from Tufts University, MBA from the Wharton School at University of Pennsylvania. Mr.
She also served as President of the Wharton Club of Shanghai and is currently the Director of the Union of Finance Alumni of Peking University (UFAPKU). Ms. Ye received her bachelor of economics degree from Peking University and earned her MA from Tufts University, MBA from the Wharton School at University of Pennsylvania. Mr.
Prior to joining us, Mr. Zhang was a director of wholesale business of China Unicom (Europe) Operations Limited from 2010 to 2014, with responsibility for sales and business development with telco carriers in European, Middle East and African regions. Mr. Zhang majored in electronic engineering and received a Ph.D. from Queen Mary and Westfield College to the University of London.
Zhang was a director of wholesale business of China Unicom (Europe) Operations Limited from 2010 to 2014, with responsibility for sales and business development with telco carriers in European, Middle East and African regions. Mr. Zhang majored in electronic engineering and received a Ph.D. from Queen Mary and Westfield College to the University of London. Ms.
The voting power percentages are calculated including the 33,707,864 votes to which the holders of the 150,000 Series A convertible preferred shares are entitled, but excluding ordinary shares issuable upon (x) conversion of our convertible senior notes, (y) the exercise or vesting of share awards granted under our Share Incentive Plan, and the 85,198,888 Class A ordinary shares issued and held by JPMorgan Chase Bank, N.A., as depositary, which are reserved for future delivery upon the exercise or vesting of share awards granted under our share incentive plan.
The voting power percentages are calculated including the 33,707,864 votes to which the holders of the 150,000 Series A convertible preferred shares are entitled, but excluding ordinary shares issuable upon (x) conversion of our convertible senior notes, (y) the exercise or vesting of share awards granted under our Share Incentive Plan, and the 70,923,856 Class A ordinary shares issued and held by JPMorgan Chase Bank, N.A., as depositary, which are reserved for future delivery upon the exercise or vesting of share awards granted under our share incentive plan.
Mr Zulkifli has been the non-executive director on the Board of Asian Plantations Limited and SymAsia Foundation Limited since 2014 and 2015 respectively. Mr. Zulkifli has been the non-executive director on the Board of STT GDC Indonesia JVCo Pte. Ltd and PT STT GDC Indonesia since July 2021 and September 2021 respectively. Mr.
Zulkifli has been the non-executive director on the Board of Asian Plantations Limited since 2014. Mr. Zulkifli has been the non-executive director on the Board of STT GDC Indonesia JVCo Pte. Ltd and PT STT GDC Indonesia since July 2021 and September 2021, respectively. Mr.
Risk Factors — Risks Related to Our Corporate Structure.” As of March 31, 2024, the beneficiary of the WVR structure was Mr.
Risk Factors — Risks Related to Our Corporate Structure.” As of March 31, 2025, the beneficiary of the WVR structure was Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. The percentages are calculated excluding the 85,198,888 Class A ordinary shares that are issued and held by JPMorgan Chase Bank, N.A., as depositary, and reserved for future delivery upon exercise or vesting of share awards granted under our share incentive plan.
These shares, however, are not included in the computation of the percentage ownership of any other person. The percentages are calculated excluding the 70,923,856 Class A ordinary shares that are issued and held by JPMorgan Chase Bank, N.A., as depositary, and reserved for future delivery upon exercise or vesting of share awards granted under our share incentive plan.
Compensation Committee Our compensation committee consists of Sio Tat Hiang, William Wei Huang and Zulkifli Baharudin. Sio Tat Hiang is the chairman of our compensation committee. Zulkifli Baharudin satisfies the requirements for an “independent director” within the meaning of Nasdaq Stock Market Rules.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of William Wei Huang, Sio Tat Hiang and Zulkifli Baharudin. William Wei Huang is the chairman of our nominating and corporate governance committee. Zulkifli Baharudin satisfies the requirements for an “independent director” within the meaning of Nasdaq Stock Market Rules.
Compensation For the year ended December 31, 2023, we and our subsidiaries paid aggregate compensation of approximately US$8.8 million to our directors and executive officers as a group, of which, US$7.0 million was settled in cash and US$1.8 million was settled in restricted shares issued under our 2016 share incentive plan.
Compensation For the year ended December 31, 2024, we and our subsidiaries paid aggregate compensation of approximately US$12.9 million to our directors and executive officers as a group, of which, US$7.1 million was settled in cash and US$5.8 million was settled in restricted shares issued under our 2016 share incentive plan.
These 12,015,512 Class A ordinary shares are also reflected in Mr. Huang’s beneficial ownership in the adjacent columns under “Class A ordinary shares.” Each of EDC Group Limited, GDS Enterprises Limited and Solution Leisure Investment Limited is a limited liability company established in the British Virgin Islands. EDC Group Limited is wholly owned by Solution Leisure Investment Limited.
These 14,198,840 Class A ordinary shares are also reflected in Mr. Huang’s beneficial ownership in the adjacent columns under “Class A ordinary shares.” Each of EDC Group Limited, GDS Enterprises Limited and Solution Leisure Investment Limited is a limited liability company established in the British Virgin Islands. EDC Group Limited is wholly owned by Solution Leisure Investment Limited.
In addition, the above rights of STT GDC may not be amended without the approval of STT GDC.
In addition, the above rights of STT Garnet may not be amended without the approval of STT Garnet.
The company has built a substantial portfolio of integrated data centres across a global platform serving all the major cloud service providers and enterprises in Singapore, India, Thailand, South Korea, Indonesia, Japan, Malaysia, and the Philippines; through VIRTUS Data Centres in the UK and Germany, and GDS in China.
The company has built a substantial portfolio of integrated data centers across a global platform, serving all the major cloud service providers and enterprises in Singapore, India, Thailand, South Korea, Indonesia, Japan, Philippines, Malaysia and Vietnam; and through VIRTUS Data Centres in the UK, Germany and Italy. Mr.
Our audit committee consists solely of independent directors. The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Our audit committee consists solely of independent directors. ​ 203 Table of Contents The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Sio was the chairman of the board of STT GDC and from 2017 to 2022 Mr Sio was Chairman of the Board of Virtus HoldCo Limited. In addition, Mr. Sio currently also sits on the Board of U Mobile Sdn Bhd and is the chairman of the board of STT Global Data Centers India Private Limited.
Sio was the Chairman of the Board of Virtus HoldCo Limited. In addition, Mr. Sio currently also sits on the Board of U Mobile Sdn Bhd and is the chairman of the board of STT Global Data Centers India Private Limited.
Amendment and Termination of Plan Our board of directors may at any time amend, alter or discontinue the 2016 share incentive plan, subject to certain exceptions. Granted Restricted Shares In August 2021, August 2022 and August 2023, we granted 11,929,608, 21,488,048 and 21,918,552 non-vested restricted shares to employees, officers and directors, respectively.
Amendment and Termination of Plan Our board of directors may at any time amend, alter or discontinue the 2016 share incentive plan, subject to certain exceptions. Granted Restricted Shares In August 2022, August 2023 and August 2024, we granted 21,488,048, 21,918,552 and 19,076,032 non-vested restricted shares to employees, officers and directors, respectively.
Liang served as a director of operations and business development with COSCO’s global data center business where she had responsibility for information system centralization, construction of large data centers, establishment and promotion of ITIL operation management systems and global disaster recovery from 1997 to 2010. Ms.
Liang served as a director of operations and business development with COSCO’s global data center business where she had responsibility for information system centralization, construction of large data centers, establishment and promotion of ITIL operation management systems and global disaster recovery from 1997 to 2010. Ms. Liang received a bachelor’s degree from Tongji University and an MBA from Fudan University.
We may terminate their employment for cause at any time without remuneration for certain acts, such as a material breach of our company’s employment principles, policies or rules, a material failure to perform his or her duties or misappropriation or embezzlement or a criminal conviction.
Employment Agreements We have entered into employment agreements with each of our executive officers. We may terminate their employment for cause at any time without remuneration for certain acts, such as a material breach of our company’s employment principles, policies or rules, a material failure to perform his or her duties or misappropriation or embezzlement or a criminal conviction.
In January, September and October 2022, we issued a total of 460,272 restricted shares to directors pursuant to equity awards under the 2016 share incentive plan. In January, May, July and October, 2023, we issued a total of 1,035,704 restricted shares to directors pursuant to equity awards under the 2016 share incentive plan.
In January, May, July and October, 2023, we issued a total of 1,035,704 restricted shares to directors pursuant to equity awards under the 2016 share incentive plan. In January, September and December, 2024, we issued a total of 1,839,320 restricted shares to directors pursuant to equity awards under the 2016 share incentive plan.
The total number of ordinary shares outstanding as of March 31, 2024 is 1,555,180,903, comprising 1,511,590,567 Class A ordinary shares (including 85,198,888 Class A ordinary shares issued and held by JPMorgan Chase Bank, N.A., as depositary, which are reserved for future delivery upon exercise or vesting of share awards granted under our share incentive plan) and 43,590,336 Class B ordinary shares, but excludes ordinary shares issuable (i) under our share incentive plan that have not yet been issued, (ii) upon conversion of our convertible senior notes, and (iii) upon conversion of our convertible preferred shares. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of aggregate voting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ power with Class A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and Class B ordinary ​ ​ Class A ordinary shares ​ Class B ordinary shares ​ shares voting on a ​ ​ Number ​ Percent ​ Number ​ Percent ​ 1:20 Basis*** ​ 1:1 Basis Directors and Executive Officers**: ​ William Wei Huang (1) 12,015,512 0.8 % 55,605,848 100.0 % 37.8 % 3.5 % Daniel Newman * * — — * * ​ Jamie Gee Choo Khoo * * — — * * ​ Sio Tat Hiang * * — — * * ​ Satoshi Okada * * — — * * ​ Bruno Lopez * * — — * * ​ Liu Chee Ming * * — — * * ​ Lim Ah Doo * * — — * * ​ Bin Yu * * — — * * ​ Zulkifli Baharudin * * — — * * ​ Chang Sun * * — — * * ​ Gary J.
The total number of ordinary shares outstanding as of March 31, 2025 is 1,555,180,903, comprising 1,511,590,567 Class A ordinary shares (including 70,923,856 Class A ordinary shares issued and held by JPMorgan Chase Bank, N.A., as depositary, which are reserved for future delivery upon exercise or vesting of share awards granted under our share incentive plan) and 43,590,336 Class B ordinary shares, but excludes ordinary shares issuable (i) under our share incentive plan that have not yet been issued, (ii) upon conversion of our convertible senior notes, and (iii) upon conversion of our convertible preferred shares. 207 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of aggregate voting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ power with Class A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and Class B ordinary ​ ​ Class A ordinary shares ​ Class B ordinary shares ​ shares voting on a ​ Number Percent Number Percent 1:20 Basis*** 1:1 Basis Directors and Executive Officers**: ​ William Wei Huang (1) 14,198,840 1.0 % 57,789,176 100.0 % 37.6 % 3.5 % Daniel Newman * * — — * * ​ Sio Tat Hiang * * — — * * ​ Satoshi Okada * * — — * * ​ Bruno Lopez * * — — * * ​ Liu Chee Ming * * — — * * ​ Lim Ah Doo * * — — * * ​ Bin Yu * * — — * * ​ Zulkifli Baharudin * * — — * * ​ Chang Sun * * — — * * ​ Gary J.
Jonathan King ​ Member of the executive committee ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Jonathan King ​ Member of the executive committee ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Wojtaszek‡ ​ 58 ​ Director Judy Qing Ye ​ 54 ​ Independent director Jonathan King ​ 47 ​ Member of the executive committee Yan Liang ​ 48 ​ Executive vice president, data center design, operation and delivery Kejing Zhang ​ 41 ​ Executive vice president, sales and service Jessie Yixin Qian ​ 52 ​ Executive vice president, operation † Designated as an STT GDC appointee. ‡ Designated as a Class B director nominee and subject to Class B 20-vote-per-share voting. °° Designated as a director subject to Class B 20-vote-per-share voting.
Wojtaszek‡ ​ 59 ​ Director Judy Qing Ye ​ 55 ​ Independent director Jonathan King ​ 48 ​ Member of the executive committee Yan Liang ​ 49 ​ Executive vice president, data center design, operation and delivery Kejing Zhang ​ 42 ​ Executive vice president, sales and service Jessie Yixin Qian ​ 53 ​ Executive vice president, operation † Designated as an STT Garnet appointee. ‡ Designated as a Class B director nominee and subject to Class B 20-vote-per-share voting. °° Designated as a director subject to Class B 20-vote-per-share voting.
The 493,288,484 Class A ordinary shares (directly or in the form of ADSs) owned by STT GDC include 16,000,000 Class A ordinary shares which STT GDC beneficially owns by virtue of holding US$100 million principal amount of the unsecured 0.25% convertible senior notes due 2029. 199 Table of Contents (4) The number of ordinary shares beneficially owned is as of December 31, 2023, as reported in the Schedule 13G filed by GIC on February 9, 2024, and represents (i) 51,937,496 Class A ordinary shares, represented by (a) 5,467,924 ADSs and (b) 8,194,104 Class A ordinary shares, and (ii) 149,849,080 Class A ordinary shares, represented by (a) 51,200,000 Class A ordinary shares that GIC has the right to acquire upon conversion of US$170,000,000 principal amount of 0.25% Convertible Senior Notes due 2029 (“2029 Senior Notes”), (b) 97,959,184 Ordinary Shares that GIC has the right to acquire upon conversion of US$300,000,000 principal amount of 4.5% Convertible Senior Notes due 2030 (“2030 Senior Notes”), and (c) 689,896 Ordinary Shares.
(4) The number of ordinary shares beneficially owned is as of December 31, 2023, as reported in the Schedule 13G filed by GIC on February 9, 2024, and represents (i) 51,937,496 Class A ordinary shares, represented by (a) 5,467,924 ADSs and (b) 8,194,104 Class A ordinary shares, and (ii) 149,849,080 Class A ordinary shares, represented by (a) 51,200,000 Class A ordinary shares that GIC has the right to acquire upon conversion of US$170,000,000 principal amount of 0.25% Convertible Senior Notes due 2029 (“2029 Senior Notes”), (b) 97,959,184 Ordinary Shares that GIC has the right to acquire upon conversion of US$300,000,000 principal amount of 4.5% Convertible Senior Notes due 2030 (“2030 Senior Notes”), and (c) 689,896 Ordinary Shares.
Lim Ah Doo ​ Independent Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Lim Ah Doo ​ Independent Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Bin Yu ​ Independent Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Bin Yu ​ Independent Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Zulkifli Baharudin ​ Independent Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Zulkifli Baharudin ​ Independent Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Chang Sun ​ Independent Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Chang Sun ​ Independent Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Yu has served as an independent director of Zero2IPO Holdings Inc., a company committed to providing the industry with leading services for entrepreneurship and investment since December 2020, and an independent director of iDreamSky Technology Holdings Limited, a leading mobile game publisher in China listed on the Hong Kong Stock Exchange since May 2018.
Yu has served as an independent non-executive director and the chairperson of the audit and risk committee of DPC Dash Ltd, a company listed on the Hong Kong Stock Exchange since December 2024, a director of Baozun Inc., a company listed on NASDAQ since June 2024, an independent director of Zero2IPO Holdings Inc., a company committed to providing the industry with leading services for entrepreneurship and investment since December 2020, and an independent director of iDreamSky Technology Holdings Limited, a leading mobile game publisher in China listed on the Hong Kong Stock Exchange since May 2018.
Ye is also the co-founder and managing partner of NE Social Impact Fund (NESIF), a dedicated social impact investing fund in China. Ms. Ye is also the council member of United Way Shanghai, a global non-profit charitable organization.
Ye also served on the board of NE Social Impact Fund (NESIF), a dedicated social impact investing fund in China. Ms. Ye is also the council member of United Way Shanghai, a global non-profit charitable organization.
Satoshi Okada ​ Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Satoshi Okada ​ Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Bruno Lopez ​ Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, and October 2, 2023. Liu Chee Ming ​ Director ​ — ​ Nil.
Bruno Lopez ​ Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024. Liu Chee Ming ​ Director ​ * ​ September 3, 2024 and December 18, 2024.
Bin Yu has served as our independent director since November 2016. She served as the chief financial officer for Lingochamp Information Technology (Shanghai) Co., Ltd., a company engaged in AI driven education from September 2017 to January 2020. Ms.
She served as the chief financial officer for Lingochamp Information Technology (Shanghai) Co., Ltd., a company engaged in AI driven education from September 2017 to January 2020. Ms.
Wojtaszek ​ Director ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Wojtaszek ​ Director ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Directors and Senior Management The following table sets forth certain information relating to our directors, executive officers and senior management. ​ ​ ​ Name Age Position/Title William Wei Huang‡ ​ 56 ​ Chairman and chief executive officer Daniel Newman ​ 63 ​ Chief financial officer Jamie Gee Choo Khoo ​ 59 ​ Chief operating officer Sio Tat Hiang† ​ 76 ​ Vice-chairman Satoshi Okada‡ ​ 65 ​ Director Bruno Lopez† ​ 59 ​ Director Liu Chee Ming† ​ 73 ​ Director Lim Ah Doo‡ ​ 74 ​ Independent director Bin Yu°° ​ 54 ​ Independent director Zulkifli Baharudin ​ 64 ​ Independent director Chang Sun‡ ​ 67 ​ Independent director Gary J.
Directors and Senior Management The following table sets forth certain information relating to our directors, executive officers and senior management. ​ ​ ​ Name Age Position/Title William Wei Huang‡ ​ 57 ​ Chairman and chief executive officer Daniel Newman ​ 64 ​ Chief financial officer Sio Tat Hiang† ​ 77 ​ Vice-chairman Satoshi Okada‡ ​ 66 ​ Director Bruno Lopez† ​ 60 ​ Director Liu Chee Ming† ​ 74 ​ Director Lim Ah Doo‡ ​ 75 ​ Independent director Bin Yu°° ​ 55 ​ Independent director Zulkifli Baharudin ​ 65 ​ Independent director Chang Sun‡ ​ 68 ​ Independent director Gary J.
Huang, and (V) 1,880,000 Class A ordinary shares in the form of 235,000 ADSs underlying restricted share units that will vest within 60 days after March 31, 2024 held by Mr. Huang. Such 12,015,512 Class A ordinary shares will convert into 12,015,512 Class B ordinary shares if directly held by Mr. Huang or an entity established or controlled by him.
Huang, and (v) 2,320,000 Class A ordinary shares in the form of 290,000 ADSs underlying restricted share units that will vest within 60 days after March 31, 2025 held by Mr. Huang. Such 14,198,840 Class A ordinary shares will convert into 14,198,840 Class B ordinary shares if directly held by Mr. Huang or an entity established or controlled by him.
The restricted share awards were granted subject to service and market conditions, or service and performance conditions, which are tied to our financial performance. 190 Table of Contents In January, June, July and October 2021, we issued a total of 178,280 restricted shares to directors pursuant to equity awards under the 2016 share incentive plan.
The restricted share awards were granted subject to service and market conditions, or service and performance conditions, which are tied to our financial performance. In January, September and October 2022, we issued a total of 460,272 restricted shares to directors pursuant to equity awards under the 2016 share incentive plan.
As a foreign private issuer, we are permitted to follow home country corporate governance practices under Nasdaq Stock Market Rules. Audit Committee Our audit committee consists of Lim Ah Doo, Bin Yu and Zulkifli Baharudin. Lim Ah Doo is the chairman of our audit committee.
Board Committees Our board of directors has established an audit committee, a compensation committee, a nominating and corporate governance committee and an executive committee. As a foreign private issuer, we are permitted to follow home country corporate governance practices under Nasdaq Stock Market Rules. Audit Committee Our audit committee consists of Lim Ah Doo, Bin Yu and Zulkifli Baharudin.
Lim Ah Doo has served as our director since August 2014. Mr. Lim is currently chairman and independent non-executive director of Olam Group Limited, formerly known as Olam International Limited, as well as an independent non-executive director of GP Industries Limited, Singapore Technologies Engineering Ltd (STE) and U Mobile Sdn Bhd.
Lim Ah Doo has served as our director since August 2014. He is currently chairman and independent non-executive director of Olam Group Limited, formerly known as Olam International Limited, as well as a director of U Mobile Sdn Bhd.
(1) The number of ordinary shares beneficially owned is as of March 31, 2024, and consists of 12,015,512 Class A ordinary shares and 43,590,336 Class B ordinary shares, including: (i) 28,000,000 Class B ordinary shares held by EDC Group Limited, (ii) 15,590,336 Class B ordinary shares held by GDS Enterprises Limited, (iii) 500,000 ADSs representing 4,000,000 Class A ordinary shares held by Solution Leisure Investment Limited, (iv) 766,939 ADSs representing 6,135,512 Class A ordinary shares beneficially owned by Mr.
(1) The number of ordinary shares beneficially owned is as of March 31, 2025, and consists of 14,198,840 Class A ordinary shares and 43,590,336 Class B ordinary shares, including: (i) 28,000,000 Class B ordinary shares held by EDC Group Limited, (ii) 15,590,336 Class B ordinary shares held by GDS Enterprises Limited, (iii) 500,000 ADSs representing 4,000,000 Class A ordinary shares held by Solution Leisure Investment Limited, (iv) 984,855 ADSs representing 7,878,840 Class A ordinary shares beneficially owned by Mr.
Wojtaszek * * — — * * ​ Judy Qing Ye * * — — * * ​ Jonathan King * * — — * * ​ Yilin Chen * * — — * * ​ Yan Liang * * — — * * ​ Kejing Zhang ​ * * ​ — — ​ * * ​ Directors and Executive Officers as a Group (2) ​ 28,723,719 ​ 2.0 % 55,605,848 ​ 100.0 % 38.2 % 4.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STT GDC (3) ​ 493,288,484 ​ 34.2 % — ​ — ​ 20.5 % 31.7 % GIC (4) ​ 201,786,576 ​ 12.8 % — ​ — ​ 2.3 % 3.5 % Canada Pension Plan Investment Board (5) ​ 77,434,776 ​ 5.4 % — ​ — ​ 3.3 % 5.1 % * Beneficially owns less than 1% of our outstanding shares. ** The business address for our directors and executive officers is at F4/F5, Building C, Sunland International, No. 999 Zhouhai Road, Pudong, Shanghai 200137, People’s Republic of China. 198 Table of Contents *** For each person or group included in this column, the percentage of total voting power represents voting power based on all ordinary shares beneficially owned by such person or group.
Wojtaszek * * — — * * ​ Judy Qing Ye * * — — * * ​ Jonathan King * * — — * * ​ Yan Liang * * — — * * ​ Kejing Zhang ​ * * ​ — — ​ * * ​ Jessie Yixin Qian ​ * ​ * ​ — ​ — ​ * ​ * ​ Directors and Executive Officers as a Group (2) ​ 32,867,471 ​ 2.3 % 57,789,176 ​ 100.0 % 37.9 % 4.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STT Garnet (3) ​ 493,288,484 ​ 33.9 % — ​ — ​ 20.3 % 31.4 % GIC (4) ​ 201,786,576 ​ 12.7 % — ​ — ​ 2.2 % 3.5 % * Beneficially owns less than 1% of our outstanding shares. ** The business address for our directors and executive officers is at F4/F5, Building C, Sunland International, No. 999 Zhouhai Road, Pudong, Shanghai 200137, People’s Republic of China. *** For each person or group included in this column, the percentage of total voting power represents voting power based on all ordinary shares beneficially owned by such person or group.
As of March 31, 2024, individuals other than our directors and executive officers as a group held a total of 30,973,704 restricted shares of our company, subject to various vesting schedules and conditions. C.
As of March 31, 2025, individuals other than our directors and executive officers as a group held a total of 27,218,216 restricted shares of our company, subject to various vesting schedules and conditions. 201 Table of Contents C.
Subject to the abovementioned appointment rights, we may nominate, and shareholders may by ordinary resolution elect (with Class A ordinary shares and Class B ordinary shares each being entitled to one vote per share), any person to be a director to fill a casual vacancy on our board. 193 Table of Contents Board Committees Our board of directors has established an audit committee, a compensation committee, a nominating and corporate governance committee and an executive committee.
Subject to the abovementioned appointment rights, we may nominate, and shareholders may by ordinary resolution elect (with Class A ordinary shares and Class B ordinary shares each being entitled to one vote per share), any person to be a director to fill a casual vacancy on our board.
Share Ownership The following table sets forth information as of March 31, 2024 with respect to the beneficial ownership of our ordinary shares by: ● each of our directors and executive officers; and 197 Table of Contents ● each person known to us to own beneficially 5.0% or more of our ordinary shares.
Employees See “Item 4. Information on the Company—B. Business Overview—Employees.” E. Share Ownership The following table sets forth information as of March 31, 2025 with respect to the beneficial ownership of our ordinary shares by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5.0% or more of our ordinary shares.
The table below summarizes, as of March 31, 2024, the restricted shares we have granted to our directors and executive officers: ​ Name Position Numbers of Restricted Shares Grant Date William Wei Huang ​ Chairman and chief executive officer ​ * ​ August 2, 2021, August 1, 2022 and August 1, 2023.
In 2024, we also granted 1,331,192 fully vested restricted shares to employees, officers and directors as compensation for the services rendered. 200 Table of Contents The table below summarizes, as of March 31, 2025, the restricted shares we have granted to our directors and executive officers: ​ Name Position Numbers of Restricted Shares Grant Date William Wei Huang ​ Chairman and chief executive officer ​ * ​ August 1, 2022, August 1, 2023 and August 1, 2024.
Zulkifli Baharudin satisfies the requirements for an “independent director” within the meaning of Nasdaq Stock Market Rules. 195 Table of Contents The nominating and corporate governance committee is generally responsible for reviewing, evaluating and, if necessary, revising our corporate governance guidelines, reviewing and evaluating any instance of deviation from our corporate governance guidelines, as well as issuing and reviewing nominations of persons to be appointed as certain of our directors as described herein and of our officers.
The nominating and corporate governance committee is generally responsible for reviewing, evaluating and, if necessary, revising our corporate governance guidelines, reviewing and evaluating any instance of deviation from our corporate governance guidelines, as well as issuing and reviewing nominations of persons to be appointed as certain of our directors as described herein and of our officers.
The directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital and issue debentures or other securities whether outright or as security for any debt obligations of our company or of any third party.
The directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital and issue debentures or other securities whether outright or as security for any debt obligations of our company or of any third party. 206 Table of Contents Qualification There is no requirement for our directors to own any shares in our company in order for them to qualify as a director.
Sun also is the founder and honorary chairman of the China Venture Capital and Private Equity Association and the founder and current executive vice chairman of the China Real Estate Developers and Investor’s Association. He is also a board member of the Lauder Institute of the Wharton School and a board member of The China Entrepreneur Club. Mr.
Sun is the founder and honorary Chairman of the China Venture Capital Association (CVCA) and the founder and Executive Vice Chairman of the China Real Estate Developers and Investors’ Association (CREDIA). He is a member of the Board of Governors of the Lauder Institute at the Wharton School, and a board member of the China Entrepreneurs Club (CEC). Mr.
Ms. Jessie Yixin Qian joined our company in 2022 and has served as our executive vice president for operation since April 2024. Ms. Qian’s responsibilities include managing our business development, cost efficiency program, energy procurement process in mainland China and various operational reporting matters.
Jessie Yixin Qian joined our company in 2022 and has served as our executive vice president for operation since April 2024. Ms. Qian’s responsibilities include corporate business and operation management, energy procurement process and ESG initiatives.
Kejing Zhang ​ Executive vice president, sales and service ​ * ​ August 2, 2021, August 1, 2022 and August 1, 2023. * Less than 1% of our outstanding ordinary shares assuming conversion of all restricted shares into ordinary shares.
Jessie Yixin Qian ​ Executive vice president, operation ​ * ​ August 1, 2022, August 1, 2023 and August 1, 2024. * Less than 1% of our outstanding ordinary shares assuming conversion of all restricted shares into ordinary shares.
The notes may be converted at an initial conversion rate of 20 ADSs (or 160 Class A ordinary shares) per US$1,000 principal amount of notes (equivalent to an initial conversion price of approximately US$50 per ADS), which rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.
The notes may be converted at an initial conversion rate of 20 ADSs (or 160 Class A ordinary shares) per US$1,000 principal amount of notes (equivalent to an initial conversion price of approximately US$50 per ADS), which rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. 209 Table of Contents On January 20, 2023 we completed a private placement of US$580 million in aggregate principal amount of 4.50% convertible senior notes due in 2030 to various private equity funds and institutional investors, including a sovereign wealth fund.
Sio Tat Hiang ​ Vice-chairman ​ * ​ January 1, 2021, June 1, 2021, July 1, 2021, October 1, 2021, January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023 and October 2, 2023.
Daniel Newman ​ Chief financial officer ​ * ​ August 1, 2022, August 1, 2023 and August 1, 2024. Sio Tat Hiang ​ Vice-chairman ​ * ​ January 1, 2022, September 1, 2022, October 3, 2022, March 1, 2023, May 12, 2023, July 3, 2023, October 2, 2023, January 2, 2024 and December 18, 2024.
Zulkifli received his bachelor’s degree in estate management from the National University of Singapore. 184 Table of Contents Mr. Chang Sun has served as our independent director since April 2017. Since 2017, Mr. Sun is a firm partner and Chairman for China at TPG, a global alternative investment firm.
Zulkifli received his bachelor’s degree in estate management from the National University of Singapore. 195 Table of Contents Mr. Chang Sun has served as our independent director since April 2017. Mr. Sun is a Senior Advisor to TPG Global. Prior to joining TPG, he was chairman and founder of Black Soil Group, a private Investment holding company.
Liang received a bachelor’s degree from Shanghai Tie Dao University and an MBA from Fudan University . Mr. Kejing Zhang joined our company in 2015 as our senior vice president of sales, and has served as our executive vice president of sales and service since April 2024. Mr. Zhang is responsible for sales operations, management and service.
Mr. Kejing Zhang joined our company in 2015 as our senior vice president of sales, and has served as our executive vice president of sales and service since April 2024. Mr. Zhang is responsible for sales operations, management and service. Prior to joining us, Mr.
Change in Control In the event of a change in control (as defined below), if determined by the plan administrator in an award agreement or otherwise, any outstanding equity awards that are non-exercisable or otherwise unvested or subject to lapse restrictions, will automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, immediately prior to such change in control.
The plan administrator is authorized to interpret the plan, to establish, amend and rescind any rules and regulations relating to the plan, and to make any other determinations that it deems necessary or desirable for the administration of the plan, as well as determine the provisions, terms and conditions of each award consistent with the provisions of the plan. ​ 199 Table of Contents Change in Control In the event of a change in control (as defined below), if determined by the plan administrator in an award agreement or otherwise, any outstanding equity awards that are non-exercisable or otherwise unvested or subject to lapse restrictions, will automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, immediately prior to such change in control.
Our Articles of Association provide that for so long as STT GDC beneficially owns: not less than 25% of our issued and outstanding share capital, they may appoint three directors to our board of directors, including our vice-chairman; less than 25%, but not less than 15%, of our issued and outstanding share capital, they may appoint two directors to our board of directors, including our vice-chairman; and less than 15%, but not less than 8%, of our issued and outstanding share capital, they may appoint one director to our board of directors, including our vice-chairman, none of which appointments will be subject to a vote by our shareholders.
There is no maximum number of directors unless otherwise determined by our shareholders in a general meeting, provided, however, that for so long as STT Garnet has the right to appoint one or more directors to our board of directors, any change in the total number of directors on our board shall require the prior approval of the director or directors appointed by STT Garnet. 202 Table of Contents Our Articles of Association provide that for so long as STT Garnet beneficially owns: not less than 25% of our issued and outstanding share capital, they may appoint three directors to our board of directors, including our vice-chairman; less than 25%, but not less than 15%, of our issued and outstanding share capital, they may appoint two directors to our board of directors, including our vice-chairman; and less than 15%, but not less than 8%, of our issued and outstanding share capital, they may appoint one director to our board of directors, including our vice-chairman, none of which appointments will be subject to a vote by our shareholders.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

19 edited+24 added−1 removed8 unchanged
During the year ended December 31, 2022, we recognized agency commissions from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. of RMB0.6 million and RMB0.5 million, respectively. During the year ended December 31, 2023, we recognized agency commissions from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte.
During the year ended December 31, 2022, we recognized agency commissions from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. of RMB0.6 million and RMB0.5 million, respectively. During the year ended December 31, 2023, we recognized agency commissions from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. of RMB0.6 million and RMB0.5 million, respectively.
Holders may convert their notes into our ADSs or Class A ordinary shares 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 Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date.
Holders may convert their notes into our ADSs or Class A ordinary shares 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 Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date.
Upon conversion, we will cause to be delivered, for each US$1,000 principal amount of converted notes, a number of ADSs or Class A ordinary shares calculated pursuant to the then effective conversion rate.
Upon conversion, we will cause to be delivered, for each US$1,000 principal amount of converted notes, a number of ADSs or Class A ordinary shares calculated pursuant to the then effective conversion rate.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” 202 Table of Contents Members (Shareholders) Agreements Pursuant to our amended members agreement entered into on May 19, 2016, we granted the holders of our registrable securities certain preferential rights, including registration rights, information and inspection rights, drag-along rights and pre-emptive rights.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” 212 Table of Contents Members (Shareholders) Agreements Pursuant to our amended members agreement entered into on May 19, 2016, we granted the holders of our registrable securities certain preferential rights, including registration rights, information and inspection rights, drag-along rights and pre-emptive rights.
On November 7, 2016, we entered into an information rights agreement with STT GDC, pursuant to which we granted certain information rights to STT GDC for so long as it has the right to appoint directors under our Articles of Association. A copy of the information rights agreement has been filed with this annual report.
On November 7, 2016, we entered into an information rights agreement with STT GDC, pursuant to which we granted certain information rights to STT GDC for so long as it has the right to appoint directors under our Articles of Association. A copy of the information rights agreement has been filed as Exhibit 4.31 with this annual report.
Each Series A 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. All Series A shares will automatically convert into ordinary shares of GDSI at, or following, completion of GDSI’s IPO, subject to certain conditions. Share Options and Restricted Shares See “Item 6.
Each Series B share is entitled to one vote and will be convertible into one ordinary share of DayOne at any time at the holder’s option. All Series B shares will automatically convert into ordinary shares of DayOne at, or following, completion of DayOne’s IPO, subject to certain conditions. Share Options and Restricted Shares See “Item 6.
Ltd. of RMB0.6 million (US$0.1 million) and RMB0.5 million (US$0.1 million), respectively. Transactions with Our Associate On September 2, 2022, we subscribed convertible bonds of US$400 thousand issued by OnePro Cloud Inc, the entity over which we have significant influence.
Ltd. of RMB2.2 million (US$0.3 million) and RMB2.2 million (US$0.3 million), respectively. ​ 210 Table of Contents Transactions with Our Associate On September 2, 2022, we subscribed convertible bonds of US$400 thousand issued by OnePro Cloud Inc, the entity over which we have significant influence.
The remaining 43.9% equity interest will be held in the form of Series A shares by the Investors, including Hillhouse, Rava Partners, Boyu, Princeville Capital, Tekne Capital, among others.
The remaining 47.3% equity interest was held in the form of Series A shares by the Series A Investors, including Hillhouse, Rava Partners, Boyu, Princeville Capital, Tekne Capital, among others.
The Series A subscription price implies a pre - money equity valuation for GDSI of US$750 million. Post - Closing and on an as - converted basis, GDSH will own approximately 56.1% of the equity interest of GDSI in the form of ordinary shares.
The Series A subscription price implies a pre-money equity valuation for DayOne of US$750 million. Post-closing and on an as-converted basis, GDS owned approximately 52.7% of the equity interest of DayOne in the form of ordinary shares.
GDSH and certain Investors will have the right to appoint directors to the Board of GDSI proportionate with their ownership. Mr. William Huang will continue in his role as Chairman of the Board of GDSI.
GDS and certain Series B investors have the right to appoint directors to the Board of DayOne proportionate with their ownership. Mr. William Huang continues in his role as Chairman of the Board of DayOne.
Series A Convertible Preferred Shares In March 2024, our wholly - owned subsidiary, DigitalLand Holdings Limited (“GDS International” or “GDSI”), that acts as the holding company for GDSH’s international data center assets and operations, has entered into definitive agreements for certain institutional private equity investors (the “Investors”) to subscribe for US$587 million of Series A convertible preferred shares (the “Series A”) newly issued by GDSI.
Series A Convertible Preferred Shares issued by DayOne In March 2024, our then-consolidated subsidiary, DigitalLand Holdings Limited (now known as “DayOne”), that acted as the holding company for GDS’s international data center assets and operations, entered into definitive agreements for certain institutional private equity investors (the “Series A Investors”) to subscribe for US$587 million of Series A convertible preferred shares (the “Series A”) newly issued by DayOne.
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. Contractual Arrangements with Affiliated Consolidated Entities and their Shareholders See “Item 4. Information on the Company—C.
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.
A copy of this Amendment No. 2 has been filed with this annual report. C. Interests of Experts and Counsel Not applicable. ​
A copy of this Amendment No. 2 has been filed with this annual report.
The notes may be converted at an initial conversion rate of 20 ADSs (or 160 Class A ordinary shares) per US$1,000 principal amount of notes (equivalent to an initial conversion price of approximately US$50 per ADS), which rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.
The notes may be converted at an initial conversion rate of 20 ADSs (or 160 Class A ordinary shares) per US$1,000 principal amount of notes (equivalent to an initial conversion price of approximately US$50 per ADS), which rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. 211 Table of Contents On January 20, 2023 we completed a private placement of US$580 million in aggregate principal amount of 4.50% convertible senior notes due in 2030 to various private equity funds and institutional investors, including a sovereign wealth fund.
Organizational Structure—Contractual Arrangements with Affiliated Consolidated Entities.” Securities Issuances The following is a summary of our or our subsidiary’s securities issuances since January 1, 2021. 201 Table of Contents Convertible Senior Notes On March 8, 2022, we completed a private placement of US$620 million in aggregate principal amount of 0.25% convertible senior notes due 2029 to Sequoia China Infrastructure Fund I, STT GDC, and an Asian sovereign wealth fund with which we have a strategic relationship.
Convertible Senior Notes On March 8, 2022, we completed a private placement of US$620 million in aggregate principal amount of 0.25% convertible senior notes due 2029 to Sequoia China Infrastructure Fund I, STT GDC, and an Asian sovereign wealth fund with which we have a strategic relationship.
GDSI expects to establish an equity incentive plan which provides for the grant of options exercisable for such number of ordinary shares representing up to 15% of its issued share capital as of the Closing at the Series A subscription price.
DayOne established an equity incentive plan which provides for the grant of options exercisable for such number of ordinary shares representing up to 15% of its issued share capital as of the closing at the Series A subscription price. GDS and certain Series A Investors have the right to appoint directors to the Board of DayOne proportionate with their ownership.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” 200 Table of Contents B. Related Party Transactions Transactions with Our Shareholders One of our subsidiaries, GDS IDC Services Pte. Ltd., or GDS Singapore, entered into a master service agreement with STT Singapore DC Pte.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Transactions with Our Shareholders DayOne Data Centers Singapore Pte. Ltd. (formerly known as GDS IDC Services Pte.
Ltd., STT DEFU 2 Pte. Ltd. and cloud service providers, pursuant to which GDS Singapore will provide billing and payment collection services as well as other coordination and administration services. During the year ended December 31, 2021, we recognized agency commissions from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. of RMB0.5 million and RMB0.5 million, respectively.
In December 2018, DayOne Singapore entered into a master service agreement with STT Singapore DC Pte. Ltd., STT DEFU 2 Pte. Ltd. and cloud service providers, pursuant to which DayOne Singapore will provide billing and payment collection services as well as other coordination and administration services.
The notes will mature on March 8, 2029.
The notes will mature on January 31, 2030.
Removed
On January 20, 2023 we completed a private placement of US$580 million in aggregate principal amount of 4.50% convertible senior notes due in 2030 to various private equity funds and institutional investors, including a sovereign wealth fund. The notes will mature on January 31, 2030.
Added
Ltd.), or DayOne Singapore, is wholly owned by DayOne, which was the holding company of our consolidated subsidiaries and the consolidated affiliated entities conducting international business and operation outside mainland China.
Added
Following the closing of DayOne’s Series B equity financing on December 31, 2024, we own approximately 35.6% of the equity interest of DayOne in the form of ordinary shares on an as - converted basis, and therefore deconsolidated DayOne as a subsidiary and recognized DayOne as an equity investee.
Added
During the year ended December 31, 2024, we recognized agency commissions and marketing support fees from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte.
Added
Prior to our deconsolidation of DayOne, several intra - group arrangements existed between continuing and discontinued operations, which were eliminated as intercompany transactions and were not separately reflected in our previously issued financial statements. Such intercompany transactions mainly included sales commission, procurement services, license grant, guarantees and management support services.
Added
Upon our deconsolidation of DayOne, the intra - group balances with DayOne became related party balances. As of December 31, 2024, amount due from DayOne mainly represents receivables for the service fees charged to DayOne, and the amount due to DayOne mainly represents payables for the data center service fees received from customer on its behalf.
Added
Prior to our deconsolidation of DayOne, we provided certain guarantees and undertakings for DayOne in connection with certain DayOne’s bank facilities, lease agreements and customer agreements, which would continue to exist after the deconsolidation.
Added
As of December 31, 2024, we provided the following major guarantees and undertakings for DayOne: (i) bank facility guarantees: we provided guarantees to DayOne for bank borrowing facilities with total amount of RMB9,967.9 million (US$1,365.6 million), which mature from May 2025 to August 2028.
Added
As of December 31, 2024, total outstanding principal balance of the borrowings under these facilities was RMB6,299.1 million (US$863.0 million). We also provided guarantees to DayOne for the bank facilities for issuance of letter of guarantee with total amount of RMB1,969.6 million (US$269.8 million).
Added
As of December 31, 2024, the balance of outstanding letter of guarantees issued under such facilities was RMB1,753.3 million (US$240.2 million); (ii) lease agreement guarantees: we provided unconditional and irrevocable guarantees to DayOne for the performance in certain lease agreements with landlords.
Added
These leases had lease terms of up to 30 years; and (iii) customer agreements guarantees: we provided guarantees for DayOne for its performance under certain data center service agreements with customers with term up to 25 years subject to extension. As of December 31, 2024, we estimated that our risks under the guarantees were remote.
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Contractual Arrangements with Affiliated Consolidated Entities and their Shareholders See “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with Affiliated Consolidated Entities.” Securities Issuances The following is a summary of our or our subsidiary’s securities issuances since January 1, 2022.
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On May 29, 2024, in connection with an internal portfolio rationalization by STT GDC, all the unsecured 0.25% convertible senior notes due 2029 previously held by STT GDC were transferred to STT Garnet. The notes will mature on March 8, 2029.
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In June 2024, DayOne entered into amendments to the definitive agreements for the Series A convertible preferred shares new issue initially announced in March 2024, as a result of which the new issue has been upsized from US$587 million to US$672 million at the same pre-money equity valuation.
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Mr. William Huang continues in his role as Chairman of the Board of DayOne. Each Series A share is entitled to one vote and will be convertible into one ordinary share of DayOne at any time at the holder’s option.
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All Series A shares will automatically convert into ordinary shares of DayOne at, or following, completion of DayOne’s IPO, subject to certain conditions.
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Series B Convertible Preferred Shares issued by DayOne In October 2024, our then consolidated subsidiary, DayOne further entered into definitive agreements for certain institutional private equity investors, including Coatue Management and The Baupost Group, to subscribe for US$1.0 billion of Series B convertible preferred shares newly issued by DayOne.
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In December 2024, DayOne entered into amendments to the definitive agreements for the Series B convertible preferred shares initially announced in October 2024, as a result of which the new issue was upsized from US$1.0 billion to US$1.2 billion at the same pre - money equity valuation.
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The upsize was mainly committed by renowned new investors, including the SoftBank Vision Fund and Kenneth Griffin, CEO of Citadel. The Series B subscription price implies a pre - money equity valuation for DayOne of approximately US$2.5 billion.
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The Series B subscription price per share represented a 75% premium to the subscription price for the Series A new issue which DayOne entered into during March 2024.
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Following the closing of DayOne’s Series B equity financing on December 31, 2024, GDS owned approximately 35.6% of the equity interest of DayOne in the form of ordinary shares on an as - converted basis, and therefore no longer consolidate DayOne for accounting purposes.
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DayOne established an additional equity incentive plan which, together with its existing equity incentive plan, provides for the grant of options exercisable for such number of ordinary shares representing up to 15% of DayOne’s share capital in issue at closing.
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On May 29, 2024, an investor rights assignment agreement was entered among STT GDC, STT Garnet and us, pursuant to which we agreed to grant certain information rights to STT Garnet for so long as it has the right to appoint one or more directors under our Articles of Association, as well as registration rights, in connection with the transfer by STT GDC of all of its interest in the Company to STT Garnet.
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On May 29, 2024, in connection with an internal portfolio rationalization by STT GDC, STT GDC entered into an investor rights assignment agreement to transfer all of its beneficial interest in the Company to STT Garnet, including all the Class A Shares and the unsecured 0.25% convertible senior notes due 2029 previously held by STT GDC.
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The investor rights assignment agreement has been filed as Exhibit 4.89 and the joinder agreement has been filed as Exhibit 4.90 with this annual report. C. Interests of Experts and Counsel Not applicable. ​