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CD

Chindata Group Holdings NasdaqGS:CD Stock Report

Last Price

US$8.08

Market Cap

US$2.9b

7D

2.3%

1Y

-6.2%

Updated

01 Oct, 2022

Data

Company Financials +
CD fundamental analysis
Snowflake Score
Valuation4/6
Future Growth5/6
Past Performance2/6
Financial Health3/6
Dividends0/6

CD Stock Overview

Chindata Group Holdings Limited provides carrier-neutral hyper scale data center solutions in China, India, Malaysia, and Southeast Asia.

Chindata Group Holdings Limited Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Chindata Group Holdings
Historical stock prices
Current Share PriceUS$8.08
52 Week HighUS$10.69
52 Week LowUS$3.75
Beta0
1 Month Change-3.58%
3 Month Change-6.81%
1 Year Change-6.16%
3 Year Changen/a
5 Year Changen/a
Change since IPO-50.22%

Recent News & Updates

Sep 21

Chindata gains on report company evaluating asset sale, take private

Chinese data center service company Chindata Group (NASDAQ:CD) rose 2.3% in premarket trading on a report that the company hired an adviser to consider potential asset sales or a take private. Chindata (CD) has been soliciting interest in possible divestitures and has had some interest from private equity, according to a Dealreporter item. Chindata has a market cap of $3.1 billion. The news comes after Bloomberg reported in April that  Bain-backed Chindata (CD) had received takeover interest from other firms in the industry.  GDS Holdings (GDS) was said to be evaluating an offer to combine with Chindata.  Chindata (CD) went public in late September 2020. The company competeds with GDS (GDS) and 21Vianet (VNET). Bloomberg also reported in late July that MBK Partners was said to be considering making an offer for 21Vianet (VNET).

Sep 01

Chindata Group: Customer Concentration Is A Double-Edged Sword

Summary Chindata's performance for Q2 2022 was reasonably good based on an evaluation of the company's key metrics for the recent quarter. CD's key anchor customer, ByteDance, helped to drive the company's good results in Q2, but this is also an area of concern considering its high degree of dependence on ByteDance. I have a Hold rating for Chindata; CD's medium-term outlook is excellent, but a slowdown in Q3 and Q4 2022 seems likely and I am concerned about customer concentration risks. Elevator Pitch I assign a Hold investment rating to Chindata Group Holdings Limited's (CD) stock. CD's reliance on its key anchor customer ByteDance (BDNCE) is a double-edged sword. On the positive side of things, BDNCE is at a stage of high growth, and this translates into strong top line and bottom line expansion for Chindata. On the negative side of things, if ByteDance pulls back on its growth plans or considers doing more business with other providers, CD will be adversely affected. As such, I deem a Hold rating to be appropriate for Chindata. Good Q2 2022 Financial Performance On its corporate website, Chindata refers to itself as "a leading carrier-neutral hyperscale data center solution provider" and "a first mover in building next-generation hyperscale data centers" in Asia. CD disclosed the company's financial results for the second quarter of this year on August 25, 2022 before the market opened, and I think that Chindata's most recent quarterly financial and operating metrics were good. With regards to headline financial numbers, Chindata's top line rose by +13% QoQ and +51% YoY to RMB1,038 million in Q2 2022. The company's non-GAAP EBITDA margin expanded by +310 basis points YoY from 49.3% in Q2 2021 to 52.4% for Q2 2022. The robust revenue growth and the significant operating profitability improvement helped to drive a +114% YoY and +36% QoQ increase in Chindata's adjusted net profit to RMB242 million for the recent quarter. CD also impressed investors with its key operating metrics. The company's utilization rate improved by approximately +900 basis points QoQ and +800 basis points YoY to 78% for Q2 2022. Separately, Chindata is managing its costs well as seen with certain operating efficiency metrics. In its Q2 2022 earnings presentation slides, CD revealed that the company's construction cost on a per MW basis and its Power Usage Effectiveness or PUE (the lower the better) were $3.3 million (in USD terms) and 1.19, respectively for the second quarter of this year. In comparison, Chindata highlighted that the industry average construction cost per MW and PUE were much higher at $7-8 million and 1.59, respectively. Capacity Expansion Pipeline Is Supportive Of Intermediate-Term Growth Expectations CD's in-service capacity grew by +42% YoY from 361 MW in the second quarter of the previous year to 511 MW in the most recent quarter. The Expected Timeline For Chindata's Under Construction Capacity To Come Onstream Chindata's Q2 2022 Earnings Presentation As indicated in the chart above, Chindata currently has 265 MW of capacity that is under construction which should come onstream by 2023. The timeline provided by CD suggests that CD's in-service capacity is expected to increase by +37% from 404 MW at the end of 2021 to 604 MW as of December 31, 2022, before rising by another +29% to 776 MW by the end of next year. The expected expansion of Chindata's in-service capacity for this year and the following year are aligned with the market's consensus financial estimates for the company. Based on the sell-side's consensus projections taken from S&P Capital IQ, CD's revenue is forecasted to grow by +47.0% and +34.7% for fiscal 2022 and fiscal 2023, respectively. Similarly, the analysts think that EBITDA for Chindata can expand by +51.9% and +36.9% in the current year and the next year, respectively. Watch Customer Concentration Risks And Slower Near-Term Growth Although Chindata should deliver strong top line and operating profit growth for full-year FY 2022 and FY 2023 as described in the preceding section, the company's shares might not necessarily perform well in the very near term. One concern is customer concentration risks, or more specifically Chindata's reliance on its key anchor client, ByteDance, best known as the parent of TikTok. BDNCE contributed 83% of CD's revenue in fiscal year 2021. ByteDance was also the driving force for Chindata's strong growth in Q2 2022, as per the chart below indicating the increase in capacity contributed by its anchor client, BDNCE in the recent quarter. The Incremental Contracted Capacity Growth Contributed By CD's Anchor Customer In Q2 2022 Chindata's Q2 2022 Earnings Presentation Looking ahead, ByteDance continues to be the key driver of Chindata's future growth. Referring to the earlier chart detailing the timeline for CD's under construction capacity to come onstream presented in the preceding section, BDNCE is the customer for Chindata's key data center projects in the pipeline such as CN-14, CN-18, and MY06-1, MY06-2.

Shareholder Returns

CDUS ITUS Market
7D2.3%-2.7%-2.5%
1Y-6.2%-39.1%-23.2%

Return vs Industry: CD exceeded the US IT industry which returned -39.1% over the past year.

Return vs Market: CD exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is CD's price volatile compared to industry and market?
CD volatility
CD Average Weekly Movement7.4%
IT Industry Average Movement8.0%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: CD is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: CD's weekly volatility has decreased from 15% to 7% over the past year.

About the Company

FoundedEmployeesCEOWebsite
20151,315Huapeng Wuhttps://www.chindatagroup.com

Chindata Group Holdings Limited provides carrier-neutral hyper scale data center solutions in China, India, Malaysia, and Southeast Asia. It offers artificial intelligence, cloud computing, smart cities and homes, online entertainment, and other on-demand services. The company also provides internet data center colocation and rental services; and technical and consulting services.

Chindata Group Holdings Limited Fundamentals Summary

How do Chindata Group Holdings's earnings and revenue compare to its market cap?
CD fundamental statistics
Market CapUS$2.94b
Earnings (TTM)US$68.48m
Revenue (TTM)US$489.32m

42.9x

P/E Ratio

6.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CD income statement (TTM)
RevenueCN¥3.48b
Cost of RevenueCN¥1.96b
Gross ProfitCN¥1.52b
Other ExpensesCN¥1.03b
EarningsCN¥487.20m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.34
Gross Margin43.70%
Net Profit Margin14.00%
Debt/Equity Ratio71.3%

How did CD perform over the long term?

See historical performance and comparison