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Shares gain 8.47% in value as company results please investors and future forecasts remain high as client base continues to expand across more than 20 Chinese cities.
Founder and Editor, The Tech Capital
August 26, 2021 | 12:00 AM BST
Chinese internet data centre services provider 21Vianet Group, Inc. (Nasdaq: VNET) reported a 32% in gross profit for the second quarter of 2021 compared to the same period a year before.
The company chased in RMB359.5 million (US$55.7 million) up from RMB272.3 million Q2 2020 and an increase of 11.2% from RMB323.3 million in the first quarter of 2021.
Gross margin in the second quarter of 2021 was 24.0%, compared to 23.8% in the same period of 2020 and 23.3% in the first quarter of 2021. The increase in gross margin was primarily attributable to the company’s continued efforts in improving operational efficiency, 21Vianet said in a statement.
Net revenues in the second quarter of 2021 increased by 30.8% to RMB1.50 billion ($231.9 million) from RMB1.14 billion in the second quarter of 2020, representing an increase of 7.9% from RMB1.39 billion in the first quarter of 2021.
This increase was mainly due to the increased revenue from both wholesale and retail internet data centre (IDC) customers, as well as the growth of revenue from cloud business.
Adjusted EBITDA in the second quarter of 2021 was RMB425.1 million ($65.8 million), representing an increase of 38.7% from RMB306.4 million in the same period of 2020 and an increase of 2.4% from RMB415.1 million in the first quarter of 2021.
Adjusted EBITDA in the second quarter of 2021 excluded share-based compensation expenses of RMB27.5 million (US$4.3 million). Adjusted EBITDA margin in the second quarter of 2021 was 28.4%, compared to 26.8% in the same period of 2020 and 29.9% in the first quarter of 2021.
Samuel Shen, Chief Executive Officer and Executive Chairman of Retail IDC, said: “We are delighted to report another strong quarter. Our dual-core growth engine, diversified customer base, and strong IDC market demand continued to fuel organic growth in our cabinet deliveries for the first half of 2021.
“Based on our leading market position and dual-core growth engine of retail and wholesale IDC solutions, we are confident that we will acquire more customers from various sectors, further diversify our revenue streams, sustain our growth, and generate lasting shareholder value going forward.”
For the third quarter of 2021, the company expects net revenues to be in the range of RMB1.53 billion to RMB1.55 billion. Adjusted EBITDA is expected to be in the range of RMB420 million to RMB440 million.
For the full year of 2021, the Company expects net revenues to be in the range of RMB6.10 billion to RMB6.30 billion. Adjusted EBITDA is expected to be in the range of RMB1.68 billion to RMB1.78 billion. The midpoints of the Company’s updated estimates imply an increase of 28.4% and 30.7% year over year in net revenues and adjusted EBITDA, respectively.
However, 21Vianet said in a statement that the forecast reflects the company’s current and preliminary views on the market and its operational conditions, “which do not factor in any of the potential future impacts caused by the ongoing COVID-19 pandemic, and are subject to change”.
Tim Chen, Chief Financial Officer of the Company, added: “Leveraging our strong balance sheet and dual-core growth strategy, we are well-positioned to further capitalise on robust IDC market demand and endorsements from a number of diversified customers to strengthen our leading position in the IDC market and accelerate growth in the quarters ahead.”
21Vianet operates in more than 20 cities throughout China and serves more than 6,000 customers from over 50 data centres hosting 62,000 cabinets.
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