VNET Group (formerly 21Vianet Group), the second largest carrier-neutral data center operator in China, announced its Q3 2021 earnings and provided updates on its data center cabinet capacity, utilization, signings, pricing, and development pipeline. Notably, investors reacted with disappointment to the company’s stalling sales momentum, amongst other headwinds, sending the stock down 14.5%+ for the session.

Financial Performance in Q3 2021 – VNET Group

In Q3 2021, VNET Group reported revenue of RMB1,560m ($242m), a 4.2% increase quarter-over-quarter, and adjusted EBITDA of RMB450m ($69.9m), a 6.0% increase quarter-over-quarter. Therefore, the company’s EBITDA margin was 28.9% in Q3 2021, a ~50 bps improvement quarter-over-quarter.

Full-Year 2021 Outlook

VNET tightened the low- and high-end of its outlook range for revenue and EBITDA, resulting in a relatively unchanged mid-point.

For full-year 2021, VNET projects revenue of RMB6,190m to RMB6,210m ($961m to $964m). Additionally, the company forecasts adjusted EBITDA of RMB1,740m to RMB1,760m ($270m to $273m). Finally, the mid-point of the company’s guidance implies a year-over-year increase of 28.5% and 32% in revenue and EBITDA, respectively.

Operational Performance in Q3 2021 – VNET Group


Overall, VNET operates 36 self-built data centers and 59 partnered data centers in more than 30 cities throughout China.

In Q3 2021, VNET brought 2.4k cabinets of power capacity into service. In turn, the company’s total cabinets of power capacity under management increased to 65.3k. Decomposing total cabinets further, 61.5k are self-built cabinets and 3.8k are partnered cabinets.

Geographically, VNET’s self-built cabinets consist of 26.0k cabinets (42%) in Beijing, 9.5k cabinets (16%) in Shanghai & Hangzhou, and 9.3k cabinets (15%) in the Greater Bay Area.

VNET Group Data Center Map Q3 2021

Finally, in terms of mix, ~80% of VNET’s cabinets are for retail colocation, while the remaining ~20% are for wholesale customers.


In Q3 2021, VNET’s utilization rate was roughly flat at 59.8%, compared to 59.9% in Q2 2021. Additionally, given the company’s significant expansion of power capacity, the utilization metric can be bifurcated as follows:

  • Mature Data Centers: utilization rate was 75.5% in Q3 2021, versus to 76.3% in Q2 2021
  • Ramp-Up Data Centers: utilization rate was 34.7% in Q3 2021, versus to 29.2% in Q2 2021


VNET Group is in the process of diversifying its data center business from primarily retail colocation, towards wholesale offerings for China’s largest cloud service providers. For example, these hyperscale companies include Alibaba Cloud, Tencent Cloud, Huawei Cloud, Kingsoft Cloud, and JD Cloud.

As of Q3 2021, the company has signed 230 megawatts with wholesale customers, which is in-service and/or under memorandum of understanding (MOU). Precisely, ~160 megawatts of power capacity is in-service, while ~70 megawatts is under memorandum of understanding (MOU). Notably, VNET’s total signings were flat quarter-over-quarter at 230 megawatts, which shows the company’s stalling wholesale sales momentum.


Retail monthly recurring revenue (MRR) per cabinet was up 3.1%, at RMB9,296 in Q3 2021, versus RMB9,015 in Q2 2021. In-part, the higher MRR was driven by product mix, including value added services such as networking and bare metal.

Development Pipeline

During 2021, VNET intends to add 25.0k cabinets, equivalent to 180 megawatts of power capacity, to its portfolio. Of this total, VNET anticipates adding 12.7k cabinets (50%+) of this capacity in Q4 2021 alone. At the same time, VNET is targeting an overall utilization rate of 60% by year-end 2021.

During the nine months ended September 30, 2021, VNET Group spent RMB1,790m ($278m) to fund this power capacity expansion plan. Additionally, VNET notes that it expects capital expenditures for full-year 2021 to “end up somewhere close to where we were last year in terms of the total amount of CapEx for the year” – implying RMB4,000m ($620m). Indeed, this estimate is 27% lower than the company’s prior outlook which budgeted for capital expenditures of RMB5,500m during 2021.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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