Earnings First Take: 4Q21 results in line; FY22 guidance below market expectations
- Revenue increased by 29.4% y-o-y to Rmb1,745m in 4Q21, with 49.6% y-o-y expansion in utilised cabinets to 48.4k
- Adjusted EBITDA increased by 18.8% y-o-y to Rmb463m in 4Q21, in line with management guidance
- FY22 adjusted EBITDA guidance is Rmb1,975m-Rmb2,125m, below market expectations of Rmb2,140m
- Expect negative positive share price reaction
What’s New
– VNET (VNET US) announced its 4Q21 results on 31 Mar 2022 after US market closed.
– Revenue increased by 29.4% y-o-y to Rmb1,745m in 4Q21, slightly lower than low-end of management guidance of Rmb1,750m-Rmb1,770m.
– Total cabinets in service increased by 46.7% y-o-y to 78.5k, with net additions of 13.3k cabinets in 4Q21. Total net additions was 25k in FY21, in line with the annual expansion target.
– Utilised cabinets increased by 49.6% y-o-y to 48.4k. Utilisation rate expanded 1.2ppts y-o-y to 61.6%.
– Adjusted cash gross profit increased by 22.7% to Rmb714m in 4Q21, with adjusted cash gross margin contracting 2.3ppts y-o-y to 40.9%.
– Adjusted EBITDA increased by 18.8% y-o-y to Rmb463m in 4Q21, in line with management guidance of Rmb450-Rmb470m, with adjusted EBITDA margin contracting 2.4ppts y-o-y to 26.5%.
– Net loss narrowed by 97.3% y-o-y to Rmb27m in 4Q21, mainly attributable to increase in the fair value of convertible promissory notes.
– Guidance for FY22 revenue and adjusted EBITDA are Rmb7,450m-Rmb7,750m and Rmb1,975m-Rmb2,125m, with midpoints implying 22.8% and 16.9% y-o-y growth respectively, both are below market expectations of Rmb7,760m and Rmb2,140m respectively.
Our View:
– We expect negative share price reaction as FY22 guidance is below market expectations.
– We currently rate BUY on the counter; TP of US15.3.
– Analyst conference call will be held at 9am HK Time on 31 Mar 2022.