China’s 21Vianet reports 30% revenue growth in Q2

Nasdaq-listed 21Vianet Group, Inc. has reported net revenue growth of 30.8 per cent to RMB1.50 billion ($231.9 million) from RMB1.14 billion when compared to the second quarter of 2020.

On a sequential basis, this revenue growth was an increase of 7.9 per cent from RMB1.39 billion, according to company filings. 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.

21Vianet recorded a 32 per cent increase in gross profit for the second quarter of 2021 compared to the same period last year. On a sequential basis, gross profits increased 11.2 per cent from RMB323.3 million in the first quarter of 2021.

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.

Improving operational efficiency

Gross margin in the second quarter of 2021 was 24 per cent, up 0.2 percentage points, compared to 23.8 per cent in the same period last year and up by 0.7 percentage points (23.3 per cent) 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.

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.

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 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 21Vianet’s updated estimates imply an increase of 28.4 per cent and 30.7 per cent year over year in net revenues and adjusted EBITDA, respectively.

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 per cent from RMB415.1 million in the first quarter of 2021.

Tim Chen, Chief Financial Officer of the Company, said: “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.”

Venkatesh Ganesh

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