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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2018 shares
Entity Registrant Name	GDS Holdings Ltd
Entity Central Index Key	0001526125
Document Type	20-F
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Class A
Entity Common Stock, Shares Outstanding	939,479,307
Class B
Entity Common Stock, Shares Outstanding	67,590,336

CONSOLIDATED BALANCE SHEETS - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current assets
Cash (including RMB266,560 and RMB552,153 of VIEs as of December 31, 2017 and 2018, respectively)	¥ 2,161,622	¥ 1,873,446
Restricted cash (including RMB10,837 and RMB87 of VIEs as of December 31, 2017 and 2018, respectively)	87	10,837
Accounts receivable, net of allowance for doubtful accounts (including RMB348,536 and RMB517,346 of VIEs as of December 31, 2017 and 2018, respectively)	536,842	364,654
Value-added-tax ("VAT") recoverable (including RMB27,596 and RMB39,671 of VIEs as of December 31, 2017 and 2018, respectively)	163,476	112,067
Prepaid expenses (including RMB32,919 and RMB32,962 of VIEs as of December 31, 2017 and 2018, respectively)	64,843	50,373
Other current assets (including RMB7,283 and RMB59,499 of VIEs as of December 31, 2017 and 2018, respectively)	110,526	42,651
Total current assets	3,037,396	2,454,028
Property and equipment, net (including RMB2,164,121 and RMB3,058,294 of VIEs as of December 31, 2017 and 2018, respectively)	13,994,945	8,165,601
Intangible assets, net (including RMB143,151 and RMB181,025 of VIEs as of December 31, 2017 and 2018, respectively)	482,492	348,466
Prepaid land use rights, net	756,957	26,245
Goodwill	1,751,970	1,570,755	¥ 1,341,087
Deferred tax assets (including RMB11,846 and RMB16,676 of VIEs as of December 31, 2017 and 2018, respectively)	36,974	14,305
Restricted cash (including RMB23,592 and RMB39,346 of VIEs as of December 31, 2017 and 2018, respectively)	123,039	63,317
VAT recoverable (including RMB26,235 and RMB115,054 of VIEs as of December 31, 2017 and 2018, respectively)	488,526	290,065
Other non-current assets (including RMB80,763 and RMB81,290 of VIEs as of December 31, 2017 and 2018, respectively)	212,944	211,785
Total assets	20,885,243	13,144,567
Current liabilities
Short-term borrowings and current portion of long-term borrowings (including RMB232,000 and RMB235,250 of VIEs as of December 31, 2017 and 2018, respectively)	1,283,320	790,484
Accounts payable (including RMB339,175 and RMB212,698 of VIEs as of December 31, 2017 and 2018, respectively)	1,508,020	1,110,411
Accrued expenses and other payables (including RMB91,542 and RMB148,945 of VIEs as of December 31, 2017 and 2018, respectively)	476,564	368,624
Deferred revenue (including RMB46,526 and RMB54,101 of VIEs as of December 31, 2017 and 2018, respectively)	73,077	55,609
Capital lease and other financing obligations, current (including RMB84,771 and RMB96,787 of VIEs as of December 31, 2017 and 2018, respectively)	166,898	97,943
Total current liabilities	3,507,879	2,423,071
Long-term borrowings, excluding current portion (including RMB85,250 and RMB60,000 of VIEs as of December 31, 2017 and 2018, respectively)	5,203,708	3,459,765
Convertible bonds payable	2,004,714
Capital lease and other financing obligations, non-current (including RMB879,685 and RMB1,068,862 of VIEs as of December 31, 2017 and 2018, respectively)	4,134,327	2,303,044
Deferred tax liabilities (including RMB70,030 and RMB69,624 of VIEs as of December 31, 2017 and 2018, respectively)	171,878	124,277
Other long-term liabilities (including RMB13,145 and RMB10,740 of VIEs as of December 31, 2017 and 2018, respectively)	340,812	358,898
Total liabilities	15,363,318	8,669,055
Shareholders' Equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 shares authorized; 873,679,343 and 939,479,307 Class A ordinary shares issued and outstanding as of December 31, 2017 and 2018, respectively; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2017 and 2018, respectively)	341	320
Additional paid-in capital	7,275,945	5,861,445
Accumulated other comprehensive loss	(139,254)	(200,688)
Accumulated deficit	(1,615,107)	(1,185,565)
Total shareholders' equity	5,521,925	4,475,512	¥ 2,986,474	¥ (340,505)
Commitments and contingencies
Total liabilities and shareholders' equity	¥ 20,885,243	¥ 13,144,567

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 CNY (¥) shares
Current assets, VIEs
Cash	¥ 2,161,622	¥ 1,873,446
Restricted cash	87	10,837
Accounts receivable, net of allowance for doubtful accounts	536,842	364,654
VAT recoverable	163,476	112,067
Prepaid expenses	64,843	50,373
Other current assets	110,526	42,651
Property and equipment, net	13,994,945	8,165,601
Intangible assets, net	482,492	348,466
Deferred tax assets	36,974	14,305
Restricted cash	123,039	63,317
VAT recoverable	488,526	290,065
Other non-current assets	212,944	211,785
Current liabilities, VIEs
Short-term borrowings and current portion of long-term borrowings	1,283,320	790,484
Accounts payable	1,508,020	1,110,411
Accrued expenses and other payables	476,564	368,624
Deferred revenue	73,077	55,609
Capital lease and other financing obligations, current	¥ 166,898	¥ 97,943
Ordinary shares
Ordinary shares, shares authorized \| shares	2,002,000,000	2,002,000,000
Long-term borrowings, excluding current portion	¥ 5,203,708	¥ 3,459,765
Capital lease and other financing obligations, non-current	4,134,327	2,303,044
Deferred tax liabilities	171,878	124,277
Other long-term liabilities	¥ 340,812	¥ 358,898
Class A
Ordinary shares
Ordinary shares, shares issued \| shares	939,479,307	873,679,343
Ordinary shares, shares outstanding \| shares	939,479,307	873,679,343
Class B
Ordinary shares
Ordinary shares, shares issued \| shares	67,590,336	67,590,336
Ordinary shares, shares outstanding \| shares	67,590,336	67,590,336
VIEs
Current assets, VIEs
Cash	¥ 552,153	¥ 266,560
Restricted cash	87	10,837
Accounts receivable, net of allowance for doubtful accounts	517,346	348,536
VAT recoverable	39,671	27,596
Prepaid expenses	32,962	32,919
Other current assets	59,499	7,283
Property and equipment, net	3,058,294	2,164,121
Intangible assets, net	181,025	143,151
Deferred tax assets	16,676	11,846
Restricted cash	39,346	23,592
VAT recoverable	115,054	26,235
Other non-current assets	81,290	80,763
Current liabilities, VIEs
Short-term borrowings and current portion of long-term borrowings	235,250	232,000
Accounts payable	212,698	339,175
Accrued expenses and other payables	148,945	91,542
Deferred revenue	54,101	46,526
Capital lease and other financing obligations, current	96,787	84,771
Ordinary shares
Long-term borrowings, excluding current portion	60,000	85,250
Capital lease and other financing obligations, non-current	1,068,862	879,685
Deferred tax liabilities	69,624	70,030
Other long-term liabilities	¥ 10,740	¥ 13,145

CONSOLIDATED STATEMENTS OF OPERATIONS - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS
Net revenue	¥ 2,792,077	¥ 1,616,166	¥ 1,055,960
Cost of revenue	(2,169,636)	(1,207,694)	(790,286)
Gross profit	622,441	408,472	265,674
Operating expenses
Selling and marketing expenses	(110,570)	(90,118)	(71,578)
General and administrative expenses	(329,601)	(228,864)	(227,370)
Research and development expenses	(13,915)	(7,261)	(9,100)
(Loss) Income from operations	168,355	82,229	(42,374)
Other income (expenses):
Interest income	19,213	5,600	2,070
Interest expenses	(656,186)	(412,003)	(265,234)
Foreign currency exchange gain (loss), net	20,306	(12,299)	18,310
Government grants	3,217	3,062	2,217
Others, net	5,436	435	284
Loss before income taxes	(439,659)	(332,976)	(284,727)
Income tax benefits	9,391	6,076	8,315
Net loss	(430,268)	(326,900)	(276,412)
Change in redemption value of redeemable preferred shares			205,670
Cumulative Dividend on preferred shares			(332,660)
Net loss attributable to ordinary shareholders	¥ (430,268)	¥ (326,900)	¥ (403,402)
Loss per ordinary share
Basic and diluted (in CNY per share)	¥ (0.43)	¥ (0.42)	¥ (1.35)
Weighted average number of ordinary share outstanding
Basic and diluted (in shares)	990,255,959	784,566,371	299,093,937

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	¥ (430,268)	¥ (326,900)	¥ (276,412)
Other comprehensive (loss) income
Foreign currency translation adjustments, net of nil tax	61,434	(8,608)	(130,131)
Comprehensive loss	¥ (368,834)	¥ (335,508)	¥ (406,543)

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 32
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+ Details

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Foreign currency translation adjustments, tax	¥ 0	¥ 0	¥ 0

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - CNY (¥) ¥ in Thousands	Ordinary Shares	Additional paid-in capital	Accumulated other comprehensive income (loss)	Accumulated deficit	Total
Balance at Dec. 31, 2015	¥ 76	¥ 303,621	¥ (61,949)	¥ (582,253)	¥ (340,505)
Balance (in shares) at Dec. 31, 2015	217,987,922
Changes in shareholders deficit
Loss for the year				(276,412)	(276,412)
Other comprehensive (loss) income			(130,131)		(130,131)
Comprehensive loss			(130,131)	(276,412)	(406,543)
Change in redemption value of redeemable preferred shares		205,670			205,670
Share-based compensation		64,165			64,165
Issuance of ordinary shares	¥ 54	1,221,464			1,221,518
Issuance of ordinary shares - (in shares)	160,565,880
Declaration of preference dividend in ordinary shares		(343,296)			(343,296)
Settlement of preference dividend in ordinary shares	¥ 11	266,783			266,794
Settlement of preference dividend in ordinary shares (in shares)	31,490,164
Conversion of redeemable preference shares	¥ 118	2,311,014			2,311,132
Conversion of redeemable preference shares (in shares)	349,087,677
Settlement of liability-classified restricted shares award	¥ 1	7,538			7,539
Settlement of liability-classified restricted shares award (in shares)	877,400
Balance at Dec. 31, 2016	¥ 260	4,036,959	(192,080)	(858,665)	2,986,474
Balance (in shares) at Dec. 31, 2016	760,009,043
Changes in shareholders deficit
Loss for the year				(326,900)	(326,900)
Other comprehensive (loss) income			(8,608)		(8,608)
Comprehensive loss			(8,608)	(326,900)	(335,508)
Share-based compensation		59,843			59,843
Issuance of ordinary shares	¥ 21	649,813			649,834
Issuance of ordinary shares - (in shares)	64,257,028
Conversion of convertible bonds	¥ 32	1,106,195			1,106,227
Conversion of convertible bonds (in shares)	97,870,263
Settlement of liability-classified restricted shares award		4,462			4,462
Settlement of liability-classified restricted shares award (in shares)	502,000
Shares surrendered (in shares)	(866,655)
Shares issued to depository bank	¥ 7	(7)
Shares issued to depository bank (in shares)	20,000,000
Exercise of share options		4,180			¥ 4,180
Exercise of share options (in shares)	816,880				816,880
Vesting of restricted shares (in shares)	1,621,120
Settlement of share options and restricted share awards with shares held by depository bank (in shares)	(2,940,000)
Balance at Dec. 31, 2017	¥ 320	5,861,445	(200,688)	(1,185,565)	¥ 4,475,512
Balance (in shares) at Dec. 31, 2017	941,269,679
Adjusted balance at Dec. 31, 2017	¥ 320	5,861,445	(200,688)	(1,184,839)	4,476,238
Adjusted balance (in shares) at Dec. 31, 2017	941,269,679
Changes in shareholders deficit
Impact of change in accounting policy				726	726
Loss for the year				(430,268)	(430,268)
Other comprehensive (loss) income			61,434		61,434
Comprehensive loss			61,434	(430,268)	(368,834)
Share-based compensation		105,877			105,877
Issuance of ordinary shares	¥ 21	1,283,287			1,283,308
Issuance of ordinary shares - (in shares)	65,800,000
Settlement of liability-classified restricted shares award		6,357			6,357
Settlement of liability-classified restricted shares award (in shares)	260,560
Shares surrendered (in shares)	(36)
Exercise of share options		18,979			¥ 18,979
Exercise of share options (in shares)	3,614,464				3,614,464
Vesting of restricted shares (in shares)	7,066,060
Settlement of share options and restricted share awards with shares held by depository bank (in shares)	(10,941,084)
Balance at Dec. 31, 2018	¥ 341	¥ 7,275,945	¥ (139,254)	¥ (1,615,107)	¥ 5,521,925
Balance (in shares) at Dec. 31, 2018	1,007,069,643

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Cash flows from operating activities:
Net loss	¥ (430,268)	¥ (326,900)	¥ (276,412)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt issuance cost and debt discount	61,373	48,100	5,917
Depreciation and amortization	741,507	378,130	227,355
Net (gain) loss on disposal of property and equipment	2,212		(62)
Share-based compensation expense	105,877	59,843	64,165
(Reversal of) allowance for doubtful accounts	241		(2,156)
Deferred tax benefit	(36,597)	(11,622)	(10,624)
Changes in operating assets and liabilities, net of effect of acquisitions:
Increase in accounts receivable	(157,708)	(134,631)	(79,383)
Increase in VAT recoverable	(221,390)	(194,335)	(94,588)
Decrease (increase) in prepaid expenses	(14,153)	520	1,034
(Increase) decrease in other current assets	(11,477)	11,500	(20,534)
Increase in other non-current assets	(37,035)	(23,111)	(24,820)
Increase in accounts payable	25,292	33,903	43,844
Decrease in due to related parties			(2,668)
(Decrease) increase in deferred revenue	17,468	14,952	(5,851)
Increase (decrease) in accrued expenses and other payables	(56,693)	(83,260)	22,018
Increase (decrease) in other long-term liabilities	(1,559)	59,095	23,785
Net cash used in operating activities	(12,910)	(167,816)	(128,980)
Cash flows from investing activities
Payments for purchase of property and equipment	(4,260,977)	(1,720,165)	(987,763)
Payments for purchase of intangible assets		(6,000)
Loans advanced to subsidiaries prior to acquisitions		(6,025)	(42,000)
Cash acquired from the business combinations	466	24,916	1,237
Cash paid for the business combinations	(359,372)	(252,780)	(103,600)
Cash paid for the asset acquisitions	(115,167)
Deposits paid for potential acquisitions	(1,000)	(5,000)	(15,000)
Proceeds from sale of property and equipment	13,896		62
Deposits paid for construction of property and equipment	(10,896)	(40,000)
Net cash used in investing activities	(4,733,050)	(2,005,054)	(1,147,064)
Cash flows from financing activities:
Proceeds from short-term borrowings	943,088	553,490	339,777
Proceeds from long-term borrowings	2,814,197	3,086,390	1,269,996
Repayment of short-term borrowings	(776,224)	(381,071)	(433,000)
Repayment of long-term borrowings	(834,154)	(1,401,023)	(373,946)
Payment of issuance cost of borrowings	(91,124)	(62,460)	(57,438)
Proceeds from exercise of stock options	16,866	3,377
Net proceeds from issuance of convertible bonds	1,867,304		327,580
Repayment of a related party loan			(65,474)
Net proceeds from issuance of ordinary shares	1,283,308	649,834	1,221,518
Payment of preferred shares dividends			(76,502)
Payment under capital lease and other financing obligations	(190,718)	(68,670)	(23,897)
Payment of contingent consideration for the acquisition of subsidiaries	(155,737)	(24,139)
Net cash provided by financing activities	4,876,806	2,355,728	2,128,614
Effect of exchange rate changes on cash and restricted cash	206,302	(74,250)	55,499
Net increase in cash and restricted cash	337,148	108,608	908,069
Cash and restricted cash at beginning of year	1,947,600	1,838,992	930,923
Cash and restricted cash at end of year	2,284,748	1,947,600	1,838,992
Supplemental disclosures of cash flow information
Interest paid	633,063	358,748	228,678
Income tax paid	3,371	1,369	5,645
Supplemental disclosures of non-cash investing and financing activities
Payables (settlement of payables) for purchase of property and equipment	(190,351)	(287,327)	128,901
Purchase of property and equipment through capital leases and other financing arrangement	720,753	828,452	568,984
Changes in consideration payable for the acquisition of subsidiaries.	(8,920)	254,470	25,900
Settlement of liability-classified restricted shares award	¥ 6,357	4,462	7,539
Issuance of ordinary shares to settle preference dividend			¥ 266,794
Conversion of convertible bonds		¥ 1,106,227

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Dec. 31, 2018
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	1 DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (a) Description of business GDS Holdings Limited (the “Parent” or “GDS Holdings”) was incorporated in the Cayman Islands on December 1, 2006. GDS Holdings and its consolidated subsidiaries and consolidated variable interest entities (collectively referred to as “the Company”) are principally engaged in providing colocation, managed hosting and managed cloud services in the People’s Republic of China (the “PRC”). The Company operates its data centers in Hong Kong Special Administrative Region (the “Hong Kong SAR”), Shanghai Municipality, Beijing Municipality, Jiangsu Province, Guangdong Province, Sichuan Province and Hebei Province of the PRC and serves customers that primarily operate in the internet and banking industries. (b) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The consolidated financial statements are presented in Renminbi (“RMB”), rounded to the nearest thousand.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The accompanying consolidated financial statements include the financial statements of GDS Holdings Limited, its subsidiaries and consolidated variable interest entities (“VIEs”) for which the Company is the primary beneficiary. The VIEs are Beijing Wanguo Chang’an Science and Technology Co., Ltd. (“GDS Beijing”) and Shanghai Shu’an Data Services Co., Ltd. (“GDS Shanghai”).

In certain regions of the PRC, the Company’s operations are conducted through VIEs to comply with the PRC laws and regulations, which prohibit foreign investments in companies that are engaged in data center related business in those regions. Individuals acting as nominee equity holders hold the legal equity interests of the VIEs on behalf of the Company. The equity holders of the VIEs are the CEO of the Company and his relative.

Prior to the internal restructuring (the “2016 Variable Interest Entity Restructuring”), the Company primarily conducted its operations through Global Data Solutions Co., Ltd. (“GDS Suzhou”), a wholly owned subsidiary. Shanghai Waigaoqiao EDC Technology Co, Ltd., or EDC Shanghai Waigaoqiao also conducted certain data center related operations. The Company completed the 2016 Variable Interest Entity Restructuring whereby GDS Suzhou and EDC Shanghai Waigaoqiao were converted into PRC domestic companies that are wholly owned by GDS Beijing on April 13, 2016 and August 9, 2016, respectively. Prior to the internal restructuring, GDS Beijing was a VIE of GDS Suzhou through a series of contractual agreements, including the equity interest pledge agreements, shareholder voting rights proxy agreement, exclusive technology license and service agreements, exclusive call option agreements and loan agreements (collectively, the “VIE Agreements”). The conversion of GDS Suzhou and EDC Shanghai Waigaoqiao into PRC domestic companies were accomplished by way of transferring all of the equity interests in GDS Suzhou and EDC Shanghai Waigaoqiao to GDS Beijing. In connection with the internal restructuring, the VIE Agreements between GDS Beijing and GDS Suzhou were terminated and concurrently, new contractual VIE Agreements were entered into between GDS Beijing and GDS (Shanghai) Investment Co., Ltd. (formerly known as Shanghai Free Trade Zone GDS Management Co., Ltd.) (“GDS Investment”), a newly-established subsidiary of the Company. The terms of the new contractual arrangements between GDS Beijing and GDS Investment are identical to the terms of the VIE Agreements between GDS Beijing and GDS Suzhou. The Company continues to be the primary beneficiary of the VIEs following the completion of the internal restructuring.

Since the entities involved in the 2016 Variable Interest Entity Restructuring are all under common control and the Company is the primary beneficiary of GDS Beijing at the time of transfer, the net assets of GDS Suzhou and EDC Shanghai Waigaoqiao transferred to GDS Beijing is recorded at the same amounts at which the assets and liabilities would have been measured if they had not been transferred. That is, no gain or loss is recognized because of such transfer.

The following is a summary of the contractual VIE Agreements entered among GDS Investment, the VIEs, and the shareholders of the VIEs.

Equity Interest Pledge Agreements. Pursuant to the equity interest pledge agreements, each shareholder of the VIEs has pledged all of his or her equity interest in the VIEs as a continuing first priority security interest, as applicable, to respectively guarantee the VIEs and their shareholders’ performance of their obligations under the relevant contractual arrangement, which include the exclusive technology license and service agreement, loan agreement, exclusive call option agreement, shareholder voting rights proxy agreement and intellectual property rights license agreement. If the VIEs or any of their shareholders breach their contractual obligations under these agreements, GDS Investment, as pledgee, will be entitled to certain rights regarding the pledged equity interests, including receiving proceeds from the auction or sale of all or part of the pledged equity interests of the VIEs in accordance with PRC law. Each of the shareholders of the VIEs agrees that, during the term of the equity interest pledge agreements, he or she will not dispose of the pledged equity interests or create or allow creation of any encumbrance on the pledged equity interests without the prior written consent of GDS Investment. The equity interest pledge agreements remain effective until the VIEs and their shareholders discharge all their obligations under the contractual arrangements.

Shareholder Voting Rights Proxy Agreement. Pursuant to the shareholder voting rights proxy agreements, each shareholder of the VIEs has irrevocably appointed the PRC citizen(s) as designated by GDS Investment to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of the VIEs requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in the VIEs, and appointing directors and executive officers. GDS Investment is also entitled to change the appointment by designating another PRC citizen(s) to act as exclusive attorney-in-fact of the shareholders of the VIEs with prior notice to such shareholders. Each shareholder voting rights proxy agreement will remain in force for so long as the shareholder remains a shareholder of the VIE.

Exclusive Technology License and Service Agreements. Under the exclusive technology license and service agreements, GDS Investment licenses certain technology to the VIEs and GDS Investment has the exclusive right to provide the VIEs with technical support, consulting services and other services. Without GDS Investment’s prior written consent, the VIEs agree not to accept the same or any similar services provided by any third party. The VIEs agree to pay service fees on a yearly basis and at an amount equivalent to all of its net profits as confirmed by GDS Investment. GDS Investment owns the intellectual property rights arising out of its performance of these agreements. In addition, the VIEs have granted GDS Investment an exclusive right to purchase or to be licensed with any or all of the intellectual property rights of the VIEs at the lowest price permitted under PRC law. Unless otherwise agreed by the parties, these agreements will continue to remain effective at all times.

Intellectual Property Rights License Agreement. Pursuant to an intellectual property rights license agreement between GDS Investment and GDS Shanghai, GDS Shanghai has granted GDS Investment an exclusive license to use for free any or all of the intellectual property rights owned by GDS Shanghai from time to time, and without the parties’ prior written consent, GDS Shanghai cannot take any actions, including without limitation to, transferring or licensing outside its ordinary course of business any intellectual property rights to any third parties, which may affect or undermine GDS Investment’s use of the licensed intellectual property rights from GDS Shanghai. The parties have also agreed under the agreement that GDS Investment should own the new intellectual property rights developed by it regardless whether such development is dependent on any of the intellectual property rights owned by GDS Shanghai. This agreement can only be early terminated by prior mutual consent of the parties and need to be renewed upon GDS Investment’s unilateral request.

Exclusive Call Option Agreements. Pursuant to the exclusive call option agreements, the shareholders of the VIEs have irrevocably granted GDS Investment an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under PRC law, all or part of such shareholders’ equity interests in the VIEs. The purchase price should equal to the minimum price required by PRC law or such other price as may be agreed by the parties in writing. Without GDS Investment’s prior written consent, the shareholders of the VIEs have agreed that the VIEs shall not amend the articles of association, increase or decrease the registered capital, sell or otherwise dispose of their assets or beneficial interest, create or allow any encumbrance on their assets or other beneficial interests, provide any loans, or distribute dividends to the shareholders. These agreements will remain effective until all equity interests of the VIEs have been transferred or assigned to GDS Investment or its designated person(s).

Loan Agreements. Pursuant to the loan agreements between GDS Management and the shareholders of the VIEs, GDS Management agrees to extend loans in an aggregate amount of RMB310,100 to the shareholders of the VIEs solely for their capitalization or equity contribution into the VIEs. Pursuant to the loan agreements, GDS Investment has the right to require repayment of the loans upon delivery of thirty-day's prior notice to the shareholders, and the shareholders can repay the loans by either sale of their equity interests in the VIEs to GDS Investment or its designated person(s) pursuant to their respective exclusive option agreements, or other methods as determined by GDS Investment pursuant to its articles of association and the applicable PRC laws and regulations.

Under the terms of the VIE Agreements, the Company has (i) the right to receive service fees on a yearly basis at an amount equivalent to all of the net profits of the VIEs under the exclusive technology license and services agreements when such services are provided; (ii) the right to receive all dividends declared by the VIEs and the right to all undistributed earnings of the VIEs; (iii) the right to receive the residual benefits of the VIEs through its exclusive option to acquire 100% of the equity interests in the VIEs, to the extent permitted under PRC law; and (iv) the right to require each of the shareholder of the VIEs to appoint the PRC citizen(s) as designated by GDS Investment to act as such shareholder's exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of the VIEs requiring shareholder approval, disposing of all or part of the shareholder's equity interest in the VIEs, and appointing directors and executive officers.

In accordance with Accounting Standards Codification (“ASC”) 810-10-25-38A, the Company has a controlling financial interest in the VIEs because the Company has (i) the power to direct activities of the VIEs that most significantly impact the economic performance of the VIEs; and (ii) the obligation to absorb the expected losses and the right to receive expected residual return of the VIEs that could potentially be significant to the VIEs. The terms of the VIE Agreements and the Company’s financial support to the VIEs were considered in determining that the Company is the primary beneficiary of the VIEs. Accordingly, the financial statements of the VIEs are consolidated in the Company’s consolidated financial statements.

Under the terms of the VIE Agreements, the VIEs' equity holders have no rights to the net assets nor have the obligations to fund the deficit, and such rights and obligations have been vested to the Company. All of the equity (net assets) or deficits (net liabilities) and net income (loss) of the VIEs are attributed to the Company.

The Company has been advised by its PRC legal counsel that each of the VIE agreements is valid, binding and enforceable in accordance with its terms and applicable PRC laws and the ownership structure of the VIEs does not violate applicable PRC Laws. However, there are substantial uncertainties regarding the interpretation and application of PRC laws and future PRC laws and regulations. There can be no assurance that the PRC authorities will take a view that is not contrary to or otherwise different. If the current ownership structure of the Company and the VIE Agreements are determined to be in violation of any existing or future PRC laws and regulations, the PRC government could:

Levy fines on the Company or confiscate income of the Company;

Revoke or suspend the VIEs' business or operating licenses;

Discontinue or place restrictions or onerous conditions on VIE's operations;

Require the Company to discontinue their operations in the PRC;

Require the Company to undergo a costly and disruptive restructuring;

Take other regulatory or enforcement actions that could be harmful to the Company's business.

The imposition of any of these government actions could result in the termination of the VIE agreements, which would result in the Company losing the (i) ability to direct the activities of the VIEs and (ii) rights to receive substantially all the economic benefits and residual returns from the VIEs and thus result in the deconsolidation of the VIEs in the Company's consolidated financial statements.

The assets and liabilities of the VIEs are presented parenthetically on the face of the consolidated balance sheets. Net revenue, net income, operating, investing and financing cash flows of the VIEs that were included in the Company's consolidated financial statements for the years ended December 31, 2016, 2017 and 2018 are as follows:


	Years ended December 31,
	2016	2017	2018

Net revenue	846,168	1,469,929	2,712,875
Net income (loss)	22,246	44,541	(59,757)
Net cash provided by operating activities (note)	249,715	186,843	739,848
Net cash used in investing activities (note)	(158,681)	(286,476)	(1,063,826)
Net cash provided by (used in) financing activities (note)	304,973	(7,417)	614,575

Note: The Company adopted Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018, and retrospectively adjusted the cash flows of the VIEs by excluding the increase of restricted cash of RMB10,091 from net cash provided by operating activities for the year ended December 31, 2016, and RMB3,663 from net cash provided by operating activities and RMB20,675 from net cash used in financing activities for the year ended December 31, 2017.

The unrecognized revenue producing assets that are held by the VIEs comprise of internally developed software, intellectual property and trademarks which were not recorded on the Company's consolidated balance sheets as they do not meet all the capitalization criteria.

Costs recognized by the VIEs for outsourcing and other services provided by other entities within the Company were RMB343,271, RMB658,617 and RMB1,260,481 for the years ended December 31, 2016, 2017 and 2018, respectively.

(b) Use of estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, the useful lives of long-lived assets, the fair values of assets acquired and liabilities assumed and the consideration transferred in a business combination, the fair value of the reporting unit for the goodwill impairment test, the allowance for doubtful accounts receivable, the realization of deferred income tax assets, the fair value of share-based compensation awards, the recoverability of long-lived assets, the fair value of leased property and the fair value of the asset retirement obligation. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company does not have any cash equivalents as of December 31, 2017 and 2018.

(d) Restricted cash

Restricted cash represents amounts held by banks, which are not available for the Company’s use, as security for bank borrowings and related interests and issuance of commercial acceptance notes relating to purchase of property. Upon repayment of bank borrowings and maturity of the commercial acceptance notes, the deposits are released by the bank and available for general use by the Company.

(e) Fair value of financial instruments

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (note 15 to the consolidated financial statements):

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

(f) Contract Balances

The timing of revenue recognition, billings and cash collections result in accounts receivable, contract assets and contract liabilities (i.e. deferred revenue). Accounts receivable are recorded at the invoice amount, net of an allowance for doubtful account and is recognized in the period when the Company has transferred products or provided services to its customers and when its right to consideration is unconditional. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount of receivables in dispute, the accounts receivable aging, and the customers’ repayment patterns. The Company reviews its allowance for doubtful accounts on a customer-by-customer basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

A contract asset exists when the Company has transferred products or provided services to its customers but customer payment is contingent upon satisfaction of additional performance obligations. Contract assets are recorded in other current assets and other assets in the consolidated balance sheet.

Deferred revenue (a contract liability) is recognized when the Company has an unconditional right to a payment before it transfers goods or services to customers.

(g) Property and equipment

Property and equipment are carried at cost less accumulated depreciation and any recorded impairment. Property and equipment acquired under capital leases are initially recorded at the present value of minimum lease payments.

Gains or losses arising from the disposal of an item of property and equipment are determined based on the difference between the net disposal proceeds and the carrying amount of the item and are recognized in profit or loss on the date of disposal.

The estimated useful lives are presented below.


Buildings		20 - 30 years
Data center equipment
– Machinery		10 - 20 years
– Other equipment		3 - 5 years
Leasehold improvement		Shorter of the lease term and the estimated useful lives of the assets
Furniture and office equipment		3 - 5 years
Vehicles		5 years

Construction in progress primarily consists of the cost of data center buildings and the related construction expenditures that are required to prepare the data center buildings for their intended use.

No depreciation is provided in respect of construction in progress until it is substantially completed and ready for its intended use. Once a data center building is ready for its intended use and becomes operational, construction in progress is allocated to the property and equipment categories and is depreciated over the estimated useful life of the underlying assets.

Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets. For assets acquired under a capital lease, the assets are amortized in a manner consistent with the Company’s normal depreciation policy for owned assets if the lease transfers ownership to the Company by the end of the lease term or contains a bargain-purchase-option. Otherwise, assets acquired under a capital lease are amortized over the lease term.

(h) Long-lived assets held for sale

Long-lived assets are classified as held-for-sale if: (1) the Company has committed to a plan to sell the assets that are available for sale in its present condition, including initiating actions to complete the sale that is probable to qualify for as a completed sale within one year; (2) it is unlikely that significant changes to the plan will be made or the plan will be withdrawn; (3) the assets are being marketed for sale at a price that is reasonable in related to its current value. Long-lived assets held for sale are recorded at the lower of carrying value and fair value less cost to sell. A loss shall be recognized for any initial or subsequent write-down to fair-value less cost to sell. Long-lived assets held for sale are not depreciated while classified as held for sale.

(i) Leases

Leases are classified at the lease inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. The Company records a capital lease as an asset and an obligation at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term.

If at any time the lessee and lessor agree to change the provisions of the lease, other than by renewing the lease or extending its term, in a manner that would have resulted in a different classification of the lease under the lease classification criteria had the changed terms been in effect at lease inception, the revised agreement shall be considered as a new agreement over its term, and the lease classification criteria shall be applied for purposes of classifying the new lease.

The Company records an asset and related financing obligation for the estimated construction costs under build-to-suit lease arrangements where it is considered the owner for accounting purposes, to the extent the Company is involved in the construction of the building or structural improvements or has construction risk prior to commencement of a lease. Upon completion of the construction and commencement of the lease terms, the Company assesses whether these arrangements qualify for sales recognition under the deemed sale-leaseback transaction. If the arrangements do not qualify for sales recognition under the sale-leaseback accounting guidance, the Company continues to be the deemed owner of the build-to-suit assets for financial reporting purposes. The Company keeps the construction costs of the assets on its balance sheet. In addition, lease payments less the portion considered to be interest expense decrease the financing liability.

As of December 31, 2017 and 2018, assets under capital leases and other financing obligations represent data center buildings and data center equipment.

Rental costs on operating leases are charged to expense on a straight-line basis over the lease term. Certain operating leases contain rent holidays and escalating rent. Rent holidays and escalating rent are considered in determining the straight-line rent expense to be recorded over the lease term. Rental costs associated with building operating leases that are incurred during the construction of leasehold improvements and to otherwise ready the property for the Company’s intended use are recognized as rental expenses and are not capitalized.

(j) Asset retirement costs

The Company’s asset retirement obligations are primarily related to its data center buildings, of which the majority are leased under long-term arrangements, and, in certain cases, are required to be returned to the landlords in their original condition.

The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred. The corresponding asset retirement costs are capitalized as part of the cost of leasehold improvements and are depreciated over the shorter of the asset or the term of the lease subsequent to the initial measurement. The Company accretes the liability in relation to the asset retirement obligations over time and the accretion expense is recorded in cost of revenue.

Asset retirement obligations are recorded in other long-term liabilities. The following table summarizes the activity of the asset retirement obligation liability:


Asset retirement obligations as of January 1, 2016		5,775
Additions		2,942
Accretion expense		588
Asset retirement obligations as of December 31, 2016		9,305
Additions		7,394
Accretion expense		949
Asset retirement obligations as of December 31, 2017		17,648
Additions		16,391
Accretion expense		1,840
Asset retirement obligations as of December 31, 2018		35,879

(k) Intangible assets

Intangible assets acquired in the acquisition comprised of customer relationships, favorable leases and licenses.

The weighted-average amortization period by major intangible asset class is as follows:


Customer relationships	5-15	years
Favorable leases	13 to 20	years
Licenses	20	years

Customer relationships represent the orders, backlog and customer lists, which arise from contractual rights or through means other than contracts. Customer relationships are amortized using a straight-line method, as the pattern in which the economic benefits of the intangible assets are consumed or used up cannot be reliably determined.

Favorable lease is recognized as an intangible asset if the terms of the acquiree’s operating lease are favorable relative to market terms. Favorable lease is amortized on a straight-line method over the lease term.

Licenses are amortized using a straight-line method over the estimated beneficial period.

(l) Prepaid land use rights

The land use rights represent the amounts paid and relevant costs incurred for the rights to use land in the PRC and Hong Kong SAR and are carried at cost less accumulated amortization. Amortization is provided on a straight-line basis over the remaining terms of the land use right ranging from 28 to 43 years.

(m) Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in the acquisition that are not individually identified and separately recognized.

Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the stock prices, business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Application of the goodwill impairment test requires judgment, including the identification of the reporting unit, assignment of assets and liabilities to the reporting unit, assignment of goodwill to the reporting unit, and determination of the fair value of each reporting unit.

The Company has the option to perform a qualitative assessment to determine whether it is more-likely-than not that the fair value of a reporting unit is less than its carrying value prior to performing the two-step goodwill impairment test. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the Company performs step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. No impairment losses were recorded for goodwill for the years ended December 31, 2016, 2017 and 2018.

(n) Impairment of long-lived assets

Long-lived assets, such as property and equipment, intangible assets subject to amortization and prepaid land use rights are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No impairment losses were recorded for long-lived assets for the years ended December 31, 2016, 2017 and 2018.

(o) Value-added-tax (“VAT”)

Entities that are VAT general taxpayers are permitted to offset qualified input VAT paid to suppliers against their output VAT upon receipt of appropriate supplier VAT invoices on an entity by entity basis. When the output VAT exceeds the input VAT, the difference is remitted to tax authorities, usually on a monthly basis; whereas when the input VAT exceeds the output VAT, the difference is treated as VAT recoverable which can be carried forward indefinitely to offset future net VAT payables. VAT related to purchases and sales which have not been settled at the balance sheet date is disclosed separately as an asset and liability, respectively, in the consolidated balance sheets.

As of December 31, 2017 and 2018, the Company recorded a VAT recoverable of RMB112,067 and RMB163,476 in current assets, and RMB290,065 and RMB488,526 in non-current assets, respectively. The Company also recorded VAT payables of RMB11,213 and RMB11,350 in accrued expenses and other payables, in the consolidated balance sheets as of December 31, 2017 and 2018, respectively.

(p) Derivative financial instruments

Derivative financial instruments are recognized initially at fair value. At the end of each reporting period, the fair value is remeasured. The gain or loss on remeasurement to fair value is recognized immediately in profit or loss.

(q) Commitment and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

(r) Revenue recognition

The Company adopted ASC 606 Revenue from Contracts with Customers on January 1, 2018. The Company applied ASC 606 using the cumulative effect method – i.e. by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of accumulated deficit at January 1, 2018. The Company elects to apply this guidance retrospectively only to contracts that are not completed contracts as of January 1, 2018.

The Company recognizes revenue as the Company satisfies a performance obligation by transferring control over a good or service to a customer. For each performance obligation satisfied over time, the Company recognizes revenue over time by measuring the progress toward complete satisfaction of that performance obligation. If the Company does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time. Revenue is measured as the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

For contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to the separate performance obligation on a relative standalone selling price basis. The standalone selling price is determined based on overall pricing objectives, taking into consideration market conditions, geographic locations and other factors. Other judgments include determining if any variable consideration should be included in the total contract value of the arrangement such as price increases.

The Company derives revenue primarily from the delivery of (i) colocation services; (ii) managed services, including managed hosting services and managed cloud services. The remainder of the Company’s revenue is from IT equipment sales that are either sold on a stand-alone basis or bundled in a managed service contract arrangement and consulting services.

Colocation services are services where the Company provides space, power and cooling to customers for housing and operating their IT system equipment in the Company’s data centers, which are primarily provided to customers for a fixed consideration over the contract service period. Revenues from such colocation services where services are provided to customers for a fixed amount over the contract service period are recognized on a straight-line basis over the term of the contract. The Company has determined that its performance pattern to be straight-line since the customer receives value as the services are rendered continuously during the term of the contract, the earning process is straight-line, and there is no other discernible performance pattern of recognition.

Managed hosting services are services where the Company provides outsourced services to manage the customers’ data center operations, including data migration, IT operations, security and data storage. Managed hosting services are primarily provided to financial institution customers as a business continuity and disaster recovery solution, which are primarily provided to customers for a fixed consideration over the contract service period. Revenues from such managed hosting services where services are provided to customers for a fixed amount over the contract service period are recognized on a straight-line basis over the term of the contract. The Company has determined that its performance pattern to be straight-line since the customer receives value as the services are rendered continuously during the term of the contract, the earning process is straight-line, and there is no other discernible performance pattern of recognition.

Certain contracts with customers for colocation services and managed hosting services provide for variable considerations that are primarily based on the usage of such services. Revenues on such contracts are recognized based on the agreed usage-based fees as the services are rendered throughout the contract term.

In certain colocation and managed hosting service contracts, the Company agrees to charge customers for their actual power consumption. Relevant revenue is recognized based on actual power consumption during each period. In certain other colocation and managed hosting service contracts, the Company specifies a fixed power consumption limit each month for customers. If a customer’s actual power consumption is below the limit, no additional fee is charged, while if its actual power consumption is above the limit, the Company charges the customer additional power consumption fees calculated based on the portion of actual power consumption exceeding the limit, multiplied by a fixed unit price, which is determined based on market price and does not provide customers with material rights to acquire additional goods or services that the customer would not receive without entering into that contract. Accordingly, relevant revenue is recognized each month based on actual additional power consumption fees.

Managed cloud services are services where the Company 1) distributes and delivers virtual storage to customers including offering direct private connection to major cloud platforms (“CloudConnect”) and 2) provides cloud infrastructure, including cloud resources, and solutions to assist customers in managing their hybrid clouds (“CloudMix”). Services are provided to certain customers for a fixed amount over the contract period, usually ranging from 1 to 5 years and are recognized on a straight-line basis over the contract period. Services are provided to remaining customers on a consumption basis, such as the amount of storage used in a period and the revenue is recognized based on a customer’s utilization of such resources and rate specified in the contracts over the related contractual term beginning on the date on which the platform is made available to the customer.

Revenue recognized for colocation or managed hosting and cloud services delivered prior to billing is recorded within accounts receivable. The Company generally bills the customer in equal instalments on a monthly or quarterly basis.

Cash received in advance from customers prior to the delivery of the colocation or managed hosting and cloud services is recorded as deferred revenue.

The sale of IT equipment is recognized when the customer obtains control of the equipment, which is typically when delivery has occurred, the customer accepts the equipment and the Company has no performance obligation after the delivery.

In certain managed service contracts, the Company sells and delivers IT equipment such as servers and computer terminals prior to the delivery of the services. Since sale of equipment can be distinguished and is separately identifiable from other promises in the contract and it is distinct within the context of the contract, the sale of equipment is considered a separate performance obligation. Accordingly, the contract consideration is allocated to the equipment and the managed services based on their relative standalone selling prices.

Consulting services are provided to customers for a fixed amount over the service period, usually less than one year. The Company recognizes revenues from consulting services over the period when the services were provided, since customers simultaneously receive and consume the benefit of the services. The Company uses the input method based on the pattern of service provided to the customers.

Revenue is generally recognized on a gross basis as the Company is primarily responsible for fulfilling the contract, assumes inventory risk and has discretion in establishing the price when selling to the customer. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records the revenue on a net basis.

(s) Cost of revenues

Cost of revenues consists primarily of utility costs, depreciation of property and equipment, rental costs, labor costs and other costs directly attributable to the provision of the service revenue.

(t) Research and development and advertising costs

Research and development and advertising costs are expensed as incurred. Research and development costs amounted to RMB9,100, RMB7,261 and RMB13,915 in 2016, 2017 and 2018, respectively. Research and development costs consist primarily of payroll and related personnel costs for developing or significantly improving the Company’s services and products.

Advertising costs amounted to RMB8,942, RMB10,189 and RMB6,332 in 2016, 2017 and 2018, respectively.

(u) Start-up costs

Pre-operating or start-up costs incurred prior to operating a new data center are expensed as incurred and consist primarily of rental costs of operating leases of buildings during the construction of leasehold improvements and other miscellaneous costs incurred prior to the operation of the data centers. Start-up costs amounted to RMB12,976, RMB7,469 and nil were recorded in general and administrative expenses in 2016, 2017 and 2018, respectively.

(v) Government grants

Government grants are recognized when received and when all the conditions for their receipt have been met. Subsidies that compensate the Company for expenses incurred are recognized as a reduction of expenses in the consolidated statements of operations. Subsidies that are not associated with expenses are recognized as other income.

Subsidies for the acquisition of property and equipment are recorded as a liability until earned and then depreciated over the useful life of the related assets as a reduction of the depreciation charges. Subsidies for obtaining the rights to use land are recorded as a liability until earned and then amortized over the land use right period as a reduction of the amortization charges of the related land use rights. In 2010 and 2011, the Company received government subsidies that required the Company to operate in a particular area for a certain period. The Company recorded the subsidies in other long-term liabilities when the subsidies were received and subsequently recognized as government subsidy income ratably over the period the Company is required to operate in the area. In 2017, the Company received government subsidies that required the Company to pass certain inspection on the related project by March 31, 2019. The Company recorded such subsidies in other long-term liabilities when received , which are reclassified to accrued expenses and other payables when the inspection is expected to be completed within one year, and will be recorded as government subsidy income when the conditions are met.

As of December 31, 2017 and 2018, deferred government grants of RMB16,789 and RMB9,771 are recorded in other long-term liabilities, respectively. Deferred government grants of RMB4,800 are recorded in accrued expenses and other payables in the consolidated balance sheets as of December 31, 2018.

(w) Capitalized interest

A reconciliation of total interest costs to “Interest expenses” as reported in the consolidated statements of operations for 2016, 2017 and 2018 is as follows:


	Years ended December 31,
	2016	2017	2018

Total interest costs	324,085	466,460	749,730
Less: interest costs capitalized	(58,851)	(54,457)	(93,544)
Interest expenses	265,234	412,003	656,186

Interest costs that are directly attributable to the construction of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of that asset. The capitalization of interest costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, interest costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalization of interest costs is ceased when the asset is substantially complete and ready for its intended use.

(x) Debt issuance costs

Debt issuance costs are capitalized and are amortized over the life of the related debts based on the effective interest method. Such amortization is included as a component of interest expense.

Unamortised debt issuance costs of RMB134,395 and RMB203,779 are presented as a reduction of debt as of December 31, 2017 and 2018, respectively.

(y) Income tax

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses.

(z) Share-based compensation

The Company accounts for the compensation cost from share-based payment transactions with employees based on the grant-date fair value of the equity instrument issued. The grant-date fair value of the award is recognized as compensation expense, net of forfeitures, over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date.

Awards granted to employees with performance conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses in the period and thereafter when the performance goal becomes probable to achieve. Awards granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses over the estimated requisite service period, regardless of whether the market condition has been satisfied if the requisite service period is fulfilled.

The Company recognizes the estimated compensation cost of service-based restricted share based on the fair value of its ordinary shares on the date of the grant. The Company recognizes the compensation cost, net of forfeitures, over its respective vesting term. The Company recognizes the estimated compensation cost of performance-based restricted share based on the fair value of its ordinary shares on the date of the grant. The rewards are earned upon attainment of identified performance goals. The Company recognizes the compensation cost, net of forfeitures, over the performance period. The Company also adjusts the compensation cost based on the probability of performance goal achievement at the end of each reporting period.

The Company has adopted the simplification guidance on forfeitures in ASU 2016-09, Compensation—Stock Compensation (Topic 718) and elected to account for forfeitures when they occur. Compensation cost previously recognized are reversed in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period. The adoption of such simplification guidance did not have any material effect on retained earnings or other components of equity or net assets in the statement of consolidated balance sheet as of the beginning of the period of adoption.

Share-based payment transactions with nonemployees in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of either the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instrument is reached.

For further information on share-based compensation, see Note 17 below.

(aa) Employee benefits

Pursuant to relevant PRC regulations, the Company is required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 28% to 49% on a standard salary base as determined by local social security bureau. Contributions to the defined contribution plans are charged to the consolidated statements of operations when the related service is provided.

(bb) Foreign currency translation and foreign currency risks

The functional currency of GDS Holdings is the USD, whereas the functional currency of its PRC subsidiaries and consolidated VIEs is the RMB.

Foreign currency transactions during the period are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognized in profit or loss and are reported in foreign currency exchange gain (loss) on a net basis.

The results of foreign operations are translated into RMB at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year.

Translation adjustments are reported in other comprehensive income and accumulated in the translation adjustment component of equity until the sale or liquidation of the foreign entity.

The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PRC government, controls the conversion of RMB to foreign currencies. The value of the RMB is subject to changes of central government policies and international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Company’s cash and restricted cash denominated in RMB amounted to RMB458,971 and RMB1,134,694 as of December 31, 2017 and 2018, respectively.

As of December 31, 2018, the Company’s cash and restricted cash were deposited in major financial institutions located in PRC, Hong Kong SAR, US and Singapore and were denominated in the following currencies:


	RMB	USD	HKD	JPY	EUR	SGD
In PRC	1,102,939	37,988	—	—	—	—
In Hong Kong SAR	31,755	44,195	7,948	19,098	153	—
In US	—	81,483	—	—	—	—
In Singapore	—	2,531	—	—	—	12
Total in original currency	1,134,694	166,197	7,948	19,098	153	12
RMB equivalent	1,134,694	1,140,645	6,964	1,182	1,204	59

(cc) Concentration of credit risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash and cash equivalent, restricted cash, and accounts receivable. The Company’s investment policy requires cash and cash equivalents and restricted cash to be placed with high-quality financial institutions and to limit the amount of credit risk from any one issuer. The Company regularly evaluates the credit standing of the counterparties or financial institutions.

The Company conducts credit evaluations on its customers prior to delivery of goods or services. The assessment of customer creditworthiness is primarily based on historical collection records, research of publicly available information and customer on-site visits by senior management. Based on this analysis, the Company determines what credit terms, if any, to offer to each customer individually. If the assessment indicates a likelihood of collection risk, the Company will not deliver the services or sell the products to the customer or require the customer to pay cash, post letters of credit to secure payment or to make significant down payments. Historically, credit losses on accounts receivable have been insignificant.

(dd) Earnings (loss) per share

Basic earnings (loss) per ordinary share is computed by dividing net income (loss) attributable to the Company’s ordinary shareholders by the weighted average number of ordinary shares outstanding during the year using the two-class method. Under the two-class method, net income (loss) attributable to the Company’s ordinary shareholders is allocated between ordinary shares and other participating securities based on participating rights in undistributed earnings. The Company’s preferred shares (note 14) are participating securities since the holders of these securities participate in dividends on the same basis as ordinary shareholders. These participating securities are not included in the computation of basic loss per ordinary share in periods when the Company reports net loss, because these participating security holders have no obligation to share in the losses of the Company.

Diluted earnings (loss) per share is calculated by dividing net income (loss) attributable to the Company’s ordinary shareholders as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary and dilutive ordinary share equivalents outstanding during the year. Ordinary share equivalents include the ordinary shares issuable upon the exercise of the outstanding share options (using the treasury stock method) and conversion of redeemable preferred shares and convertible bonds (using the as-if-converted method). Potential dilutive securities are not included in the calculation of diluted earnings (loss) per share if the impact is anti-dilutive.

(ee) Changes in accounting principle

Certain sales agreement of the Company contains contingent consideration terms regarding the equipment sales. Before the adoption of ASC 606, the allocation of arrangement consideration to the delivered items is limited to amounts of revenue that are not contingent. Upon the adoption of ASC 606, sales are recognized as the Company transfers control of the promised products or services to the customers. The revenue recognition of such equipment sales was accelerated as the control transfers. The Company estimates variable consideration to which it expects to be entitled, given consideration to the risk of revenue reversal in making the estimate. As a result, the Company made an adjustment to decrease the opening balance of accumulated deficit by RMB726 at January 1, 2018.

The adoption of ASC 606 does not have impact to the Company's consolidated balance sheet as of December 31, 2018. The impact for adoption of ASC 606 to the Company’s consolidated statement of operations for the year ended December 31, 2018 is as follows:

Consolidated Statement of Operations:


			Amounts
	Year ended		without
	December		adoption
	31, 2018	Adjustments	of ASC 606

Net revenue	2,792,077	1,569	2,793,646
Cost of revenue	(2,169,636)	(843)	(2,170,479)
Income from operations	168,355	726	169,081
Net loss	(430,268)	726	(429,542)
Loss per ordinary share
Basic and diluted	(0.43)	0.00	(0.43)

The Company adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018. According to this ASU, the amounts generally described as restricted cash are included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows using a retrospective transition method to each period. As a result of the adoption of ASU 2016-18, the consolidated statement of cash flows was retrospectively adjusted by excluding the increase of restricted cash of RMB21,248 from cash flows from operating activities for the year ended December 31, 2016 and RMB9,762 from cash flows from operating activities, RMB3,619 from cash flows from investing activities and RMB33,100 from cash flows from financing activities for the year ended December 31, 2017. A reconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statements of cash flows is in note 3.

The Company adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments on January 1, 2018. According to this ASU, cash payments not made soon after the acquisition date of a business combination by an acquirer to settle a contingent consideration liability should be separated and classified as cash outflows for financing activities and operating activities. Cash payments up to the amount of the contingent consideration liability recognized at the acquisition date (including measurement-period adjustments) should be classified as financing activities; any excess should be classified as operating activities. Cash payments made soon after the acquisition date of a business combination by an acquirer to settle a contingent consideration liability should be classified as cash outflows for investing activities. The amendments in this ASU should be applied using a retrospective transition method to each period presented. As a result of the adoption of ASU 2016-15, the consolidated statement of cash flows for the year ended December 31, 2017 was retrospectively adjusted by reclassifying the payment of contingent consideration for acquisition of subsidiaries of RMB27,105 from investing activities to cash flows from operating activities and financing activities of RMB2,966 and RMB24,139, respectively. The adoption of ASU 2016-15 does not have impact on the consolidated statement of cash flows for the year ended December 31, 2016.

The Company adopted ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory on January 1, 2018. This ASU requires the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, which consequently eliminates the exception for an intra-entity transfer of an asset other than inventory to the recognition of current and deferred income taxes. Deferred tax assets recognized as a result of this ASU shall be assessed for realizability. ASU 2016-16 was applied on a modified retrospective basis, with a cumulative-effect adjustment directly to accumulated deficit of the Company as of January 1, 2018, and the comparative information is not adjusted. The adoption of this ASU does not have impact to the accumulated deficit of the Company as of January 1, 2018.

(ff) Recently Issued Accounting Standards

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force), which clarifies the accounting for implementation costs incurred in a hosting arrangement that is a service contract. Capitalization of these implementation costs are accounted for under the same guidance as implementation costs incurred to develop or obtain internal-use software and recorded as a prepaid asset. These capitalized costs are to be expensed ratably over the hosting arrangement term as operating expenses, along with the service fees. The guidance is effective for periods beginning after December 15, 2019. Early adoption is allowed. The Company does not plan to early adopt this guidance and is evaluating the impact of the new standard.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC 820. Under this ASU, key provisions include new, eliminated and modified disclosure requirements. The guidance is effective for periods beginning after December 15, 2019. Early adoption is allowed. The Company does not plan to early adopt this guidance and is evaluating the impact of the new standard.

In June 2018, FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The ASU expands the scope of ASC 718, Compensation - Stock Compensation to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of ASC 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The amendments in this ASU are effective for the Company since fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.

In January 2017, FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU is to simplify the subsequent measurement of goodwill. The ASU eliminates step 2 from the goodwill impairment test and the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU should be applied on a prospective basis. The amendments in this ASU are effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. This ASU eliminates the probable initial recognition threshold in current GAAP and, instead, reflects an entity’s current estimate of all expected credit losses. The amendments in this ASU is effective for the Company for its fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted since fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and issued subsequent amendments to the initial guidance within ASU 2017-13, ASU 2018-01, ASU 2018-10, ASU 2018-11 and ASU 2018-20, collectively referred to as “ASC 842”. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and ASC 606. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities.

ASC 842 is effective for the Company on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. The Company expects to use the effective date of January 1, 2019 as the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

ASC 842 provides a number of optional practical expedients in transition. The Company will elect the package of the transition practical expedients, including (1) not to reassess whether any expired or existing contracts, including land easements that were not previously accounted for as leases, are or contain leases, (2) not to reassess the lease classification for any expired or existing leases, (3) not to reassess initial direct costs for any existing leases.

ASC 842 is expected to have a material effect on the Company’s consolidated financial statements. While continuing to assess all of the effects of adoption, the Company currently believes that the most significant effects relate to the recognition of right-of-use (“ROU”) assets and lease liabilities on its balance sheet for operating leases and the derecognition of existing assets and liabilities for certain assets under construction in build-to-suit lease arrangements that the Company will lease when construction is complete.

On adoption, the Company currently expects to:

Recognize additional operating lease liabilities and ROU assets of approximately RMB483,607 and RMB513,961, and derecognize intangible assets of RMB44,552.

Derecognize other financing obligations and construction in progress of approximately RMB331,917 and RMB336,719, respectively, and recognize prepaid expenses of RMB4,802, for assets under construction in build-to-suit lease arrangements. Upon completion of construction, new ROU assets and lease liabilities are expected to be recognized on the consolidated balance sheet for the associated leases.

ASC 842 also provides practical expedients for an entity’s ongoing accounting. The Company currently expects to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets. The Company also currently expects to elect the practical expedient to not separate lease and non-lease components for all of the leases.

CASH AND RESTRICTED CASH

12 Months Ended

Dec. 31, 2018

CASH AND RESTRICTED CASH

CASH AND RESTRICTED CASH

3 CASH AND RESTRICTED CASH

A reconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statements of cash flows is as follows:



	As at	As at
	December 31, 2017	December 31, 2018

Cash	1,873,446	2,161,622
Restricted cash - current assets	10,837	87
Restricted cash - non-current assets	63,317	123,039

Total cash and restricted cash shown in the consolidated statements of cash flows	1,947,600	2,284,748

Restricted cash included in non-current assets was to secure the repayment of long-term bank borrowings and related interests.

CONTRACT BALANCES

12 Months Ended

Dec. 31, 2018

CONTRACT BALANCES

CONTRACT BALANCES

4 CONTRACT BALANCES

Accounts Receivable, Net

Accounts receivable, net consisted of the following:


	As of December 31,
	2017	2018

Accounts receivable	364,654	541,355
Less: allowance for doubtful accounts	—	(241)
Accounts receivable, net	364,654	541,114

Including:
- Current portion	364,654	536,842
- Non-current portion	—	4,272

The Company generally invoices its customers on a monthly or quarterly basis in accordance with the contract terms. Due to the timing difference between the billing and revenue recognition, accounts receivable included an unbilled portion of RMB253,724 and RMB384,640 as of December 31, 2017 and 2018, respectively.

As of December 31, 2018, the accounts receivable expected to be received after one year amounted to RMB4,272 were recorded in other non-current assets in the consolidated balance sheet.

Accounts receivable of RMB136,043 and RMB365,938 was pledged as security for bank loans (note 9) as of December 31, 2017 and 2018, respectively.

An allowance for doubtful accounts is provided based on the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company assesses the collectability of accounts receivable by analyzing specific customer accounts that have known or potential doubt as to collectability. The following table presents the movement of the allowance for doubtful accounts:


	Years ended December 31,
	2016	2017	2018

Balance at the beginning of the year	2,156	—	—
Allowance made during the year	—	—	241
Reversal during the year	(2,156)	—	—
Balance at the end of the year	—	—	241

During the year ended December 31, 2016, the Company reversed allowance for doubtful accounts on a receivable from a customer of RMB2,156 due to the collection of such balance during 2016. During the year ended December 31, 2018, the Company made an allowance on accounts receivable of RMB241. Management believes all other accounts receivable as of December 31, 2018 are to be collected in full.

Deferred Revenue

The opening and closing balances of the Company’s deferred revenue are as following:


		Deferred revenue

Beginning balance as of January 1, 2018		55,609
Closing balance as of December 31, 2018		73,077

Increase		17,468

The difference between the opening and closing balances of the Company's deferred revenue primarily results from the timing difference between the satisfaction of the Company's performance obligation and the customer's payment. The amounts of revenue recognized during the year ended December 31, 2018 from the opening deferred revenue balance was RMB43,192.

Remaining performance obligations

The Company elected to apply the practical expedient that allows the Company not to disclose the remaining performance obligations for variable consideration that is allocated to entirely unsatisfied performance obligations or to a wholly unsatisfied distinct good or service that forms part of a single obligation. This includes usage-based contracts for certain colocation and managed hosting services for which the variable consideration is allocated entirely to the unsatisfied promised services that form part of the single performance obligation under these contracts.

As of December 31, 2018, approximately RMB1,631,208 of total revenues and deferred revenues are expected to be recognized in future periods, the majority of which will be recognized over the next three years.

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2018

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

5 PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:


	As of	As of
	December 31, 2017	December 31, 2018

At cost:
Buildings	2,693,843	4,382,469
Data center equipment	2,202,247	4,225,963
Leasehold improvement	2,243,691	4,239,601
Furniture and office equipment	36,762	45,057
Vehicles	2,972	4,086
	7,179,515	12,897,176
Less: Accumulated depreciation	(965,758)	(1,534,368)
	6,213,757	11,362,808
Construction in progress	1,951,844	2,632,137
Property and equipment, net	8,165,601	13,994,945

(1)

The carrying amounts of the Company’s property and equipment acquired under capital leases and other financing arrangement at the respective balance sheet dates were as follows:


	As of	As of
	December 31, 2017	December 31, 2018

At cost (note):
Buildings	2,488,522	4,557,081
Data center equipment	192,946	300,960
	2,681,468	4,858,041
Less: Accumulated depreciation	(141,948)	(287,375)
	2,539,520	4,570,666

Note: This item included buildings under construction of RMB476,489 and RMB1,478,612 and data center equipment under construction of RMB180,228 and nil, respectively, as of December 31, 2017 and 2018.

(2)

Depreciation of property and equipment (including assets acquired under capital leases and other financing arrangement) was RMB212,873, RMB352,480 and RMB682,451 for the years ended December 31, 2016, 2017 and 2018, respectively, and included in the following captions:


	Years ended December 31,
	2016	2017	2018

Cost of revenue	206,724	345,025	674,560
General and administrative expenses	5,425	6,902	7,319
Research and development expenses	724	553	572
	212,873	352,480	682,451

(3)

Property and equipment with net a book value of RMB698,922 and RMB1,716,736 was pledged as security for bank loans (note 9) as of December 31, 2017 and 2018, respectively.

(4)

As of December 31, 2017 and 2018, payables for purchase of property and equipment that are contractually due beyond one year of RMB195,749 and RMB206,591 are recorded in other long-term liabilities in the consolidated balance sheets.

INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2018

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET

6 INTANGIBLE ASSETS, NET

Intangible assets consisted of the following:


		As of	As of
	Note	December 31, 2017	December 31, 2018

Customer relationships	8	379,322	532,322
Favorable leases	8	15,500	49,500
Licenses		6,000	6,000
		400,822	587,822
Less: accumulated amortization		(52,356)	(105,330)
Intangible assets, net		348,466	482,492

The Company's customer relationships and favorable leases were acquired in business combinations (note 8). Amortization of intangible assets was RMB13,866, RMB25,103 and RMB 52,974 for the years ended December 31, 2016, 2017 and 2018, respectively.

Estimated future amortization expense related to these intangible assets is as follows:


Fiscal year ending December 31,
2019		61,204
2020		53,054
2021		53,054
2022		53,054
2023		51,512
Thereafter		210,614
Total		482,492

PREPAID LAND USE RIGHTS

12 Months Ended

Dec. 31, 2018

PREPAID LAND USE RIGHTS

PREPAID LAND USE RIGHTS

7 PREPAID LAND USE RIGHTS

Prepaid land use rights consisted of the following:


	As of December 31,
	2017	2018

Prepaid land use rights	28,370	765,114
Less: Accumulated amortization	(2,125)	(8,157)
Prepaid land use rights, net	26,245	756,957

Amortization of prepaid land use rights was RMB616, RMB547 and RMB6,082 for the years ended December 31, 2016, 2017 and 2018, respectively.

Prepaid land use rights with a net book value of RMB6,091 and RMB13,241 were pledged as security for bank loans (note 9) as of December 31, 2017 and 2018, respectively.

BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2018

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

8 BUSINESS COMBINATIONS

The movement of goodwill is set out as below:


	As of December 31,
	2017	2018

Balance at the beginning of the year	1,341,087	1,570,755
Addition during the year	229,668	181,215
Balance at end of year	1,570,755	1,751,970

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. The goodwill is not deductible for tax purposes. Goodwill is assigned to the design, build-out and operation of data centers reporting unit.

Guangzhou 1 Acquisition

On May 19, 2016, the Company acquired all of the equity interests in Guangzhou Weiteng Construction Co., Ltd. (“Weiteng Construction”) from a third party for an aggregate purchase price of RMB129,500. The Company had paid the full purchase consideration as of December 31, 2017.

Weiteng Construction is a limited liability company organized and existing under the PRC law and owns a data center project (“Guangzhou 1”) in Guangzhou, China. At the date of acquisition, the data center has just commenced its operations.

The identifiable assets acquired and liabilities assumed in the business combination were recorded at their fair value on the acquisition date and consisted of the following major items.


	Note
Fair value of consideration		129,500
Effective settlement of pre-existing relationships upon consolidation	(i)	43,161
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(1,237)
Property and equipment	(ii)	(281,437)
Identifiable intangible assets	(iii)	(59,500)
Other assets		(25,363)
Accounts payable		131,114
Capital lease and other financing obligations, current		12,097
Capital lease and other financing obligations, non-current		68,584
Deferred tax liabilities		21,143
Other liabilities		8,361
Total identifiable net assets		(126,238)
Goodwill	(iv)	46,423

Note (i):

Prior to the acquisition, in February and May 2016, the Company lent short-term loans of RMB40,000 and RMB2,000, respectively, to Weiteng Construction. The loans bear an interest rate of 10% per annum and mature in September 2016. No gain or loss was recognized from the effective settlement of such pre-existing relationship between the Company and Weiteng Construction. At the acquisition date, the amount due from Weiteng Construction of RMB43,161, including loan principal of RMB42,000 and interest receivable of RMB1,161, is eliminated upon consolidation.

Note (ii):

Property and equipment acquired included properties acquired under capital lease of RMB102,785, data center equipment of RMB19,895, leasehold improvement of RMB132,462 and construction in progress of RMB26,295.

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB59,500 with an estimated useful life of 7 to 8 years.

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of Weiteng Construction with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes. In accordance with ASC350, goodwill is not amortized but is tested for impairment.

The amounts of net revenue and net loss of Weiteng Construction included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2016 amounted to RMB36,924 and RMB2,861, respectively.

Shenzhen 5 Acquisition

On June 29, 2017, the Company consummated an acquisition of all equity interests in a target group, comprising onshore and offshore entities, from third parties for an aggregate contingent purchase price of RMB312,000. As of December 31, 2018, the present value of remaining consideration payable of RMB123,098 was recorded in other payables with payment schedule based on the milestone related to the achievement of all specified conditions.

The target group owns a data center project (“Shenzhen 5”) in Shenzhen, China. At the date of acquisition, the data center had just commenced its operations.

The identifiable assets acquired and liabilities assumed in the business combination were recorded at their fair value on the acquisition date and consisted of the following major items.


	Note
Fair value of consideration	(i)	294,491
Effective settlement of pre-existing relationships upon consolidation	(ii)	6,025
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(11,153)
Property and equipment	(iii)	(821,405)
Identifiable intangible assets	(iv)	(176,500)
Other assets		(59,520)
Accounts payable		219,207
Capital lease and other financing obligations, current		23,156
Capital lease and other financing obligations, non-current		363,380
Long-term borrowings		217,790
Deferred tax liabilities		45,931
Other liabilities		55,299
Total identifiable net assets		(143,815)
Goodwill	(v)	156,701

Note (i):

The fair value of consideration represents the present value of the purchase price of RMB312,000.

Note (ii):

Prior to the acquisition, the Company had other receivables from the target group of RMB6,025, which was effectively settled with the seller upon completion of the acquisition.

Note (iii):

Property and equipment acquired included properties acquired under capital lease of RMB416,000, data center equipment of RMB174,292, leasehold improvements of RMB118,368 and construction in progress of RMB112,745.

Note (iv):

Identifiable intangible assets acquired consisted of customer relationships of RMB176,500 with an estimated useful life of 14.4 years.

Note (v):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

The amounts of net revenue and net loss of the target group included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2017 amounted to RMB42,072 and RMB23,859, respectively.

Guangzhou 2 Acquisition

On October 9, 2017, the Company consummated an acquisition of all equity interests in a target group, comprising onshore and offshore entities, from third parties for a cash consideration of RMB233,984. The Company paid the full consideration as of December 31, 2018.

The target group owns a data center project (“Guangzhou 2”) in Guangzhou, China.

The identifiable assets acquired and liabilities assumed in the business combination were recorded at their fair value on the acquisition date and consisted of the following major items.


	Note
Fair value of consideration		233,984
Effective settlement of pre-existing relationships upon consolidation	(i)	(1,807)
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(10,144)
Accounts receivable		(25,177)
Property and equipment	(ii)	(319,943)
Identifiable intangible assets	(iii)	(98,500)
Other assets		(14,135)
Accounts payable		56,431
Capital lease and other financing obligations, current		5,958
Capital lease and other financing obligations, non-current		101,875
Short-term borrowings		50,750
Long-term borrowings		52,999
Deferred tax liabilities		35,097
Other liabilities		5,579
Total identifiable net assets		(159,210)
Goodwill	(iv)	72,967

Note (i):

Prior to the acquisition, the Company had payables to the target group of RMB1,807, which was effectively settled with the seller upon completion of the acquisition.

Note (ii):

Property and equipment acquired included properties acquired under capital lease of RMB106,000, data center equipment of RMB57,932, leasehold improvement of RMB155,149 and furniture and office equipment of RMB862.

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB98,500 with an estimated useful life of 11.8 years.

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

The amounts of net revenue and net income of the target group included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2017 amounted to RMB26,573 and RMB2,734, respectively.

Guangzhou 3 Acquisition

On May 2, 2018, the Company consummated an acquisition of all equity interests in a target group, comprising onshore and offshore entities, from third parties for an aggregate cash consideration of RMB262,244 (including contingent considerations of RMB245,244). As of the acquisition date, the Company estimated that, pursuant to the share purchase agreement, all specified conditions would be met and the Company would be obligated to settle full amount of the purchase price of RMB262,244. As of December 31, 2018, the present value of remaining consideration payable was RMB124,921, of which RMB45,838 and RMB79,083 were recorded in other payables and other long-term liabilities, respectively. The payment schedule of remaining consideration is based on the milestone related to the achievement of all specified conditions.

The target group owns a data center project ("Guangzhou 3") in Guangzhou, China.

The identifiable assets acquired and liabilities assumed in the business combination were recorded at their fair value on the acquisition date and consisted of the following major items.


	Note
Fair value of consideration	(i)	247,937
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(62)
Accounts receivable		(13,995)
Property and equipment	(ii)	(780,312)
Identifiable intangible assets	(iii)	(130,000)
Other assets		(43,039)
Accounts payable		471,532
Capital lease and other financing obligations, non-current		282,051
Short-term borrowings		47,580
Long-term borrowings		30,000
Deferred tax liabilities		26,503
Other liabilities		2,849
Total identifiable net assets		(106,893)
Goodwill	(iv)	141,044

Note (i):

The fair value of consideration represents the present value of the purchase price of RMB262,244.

Note (ii):

Property and equipment acquired included properties acquired under capital lease of RMB291,000, data center equipment of RMB254,241 and leasehold improvement of RMB235,071.

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB130,000 with an estimated useful life of 7 years.

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

The amounts of net revenue and net loss of the target group included in the Company's consolidated statements of operations from the acquisition date to December 31, 2018 amounted to RMB85,298 and RMB11,727 respectively.

Shanghai 11 Acquisition

On June 1, 2018, the Company consummated an acquisition of all equity interests in a target entity from third parties for an aggregate cash consideration of RMB320,000 (including contingent considerations of RMB70,000). As of the acquisition date, the Company estimated that, pursuant to the share purchase agreement, all specified conditions would be met and the Company would be obligated to settle full amount of the purchase price of RMB320,000. As of December 31, 2018, the present value of remaining consideration payable of RMB13,931 was recorded in other payables. The payment schedule of remaining consideration is based on the milestone related to the achievement of all specified conditions.

The target entity owns a data center project ("Shanghai 11") in Shanghai, China.

The identifiable assets acquired and liabilities assumed in the business combination were recorded at their fair value on the acquisition date and consisted of the following major items.


	Note
Fair value of consideration	(i)	319,119
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(404)
Property and equipment	(ii)	(233,405)
Identifiable intangible assets	(iii)	(57,000)
Other assets		(94,647)
Accounts payable		91,136
Deferred tax liabilities		9,995
Other liabilities		5,377
Total identifiable net assets		(278,948)
Goodwill	(iv)	40,171

Note (i):

The fair value of the consideration represents the present value of the purchase price of RMB320,000.

Note (ii):

Property and equipment acquired included data center equipment of RMB70,241 and leasehold improvement of RMB163,164.

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB23,000 with an estimated useful life of 10 years and favourable lease of RMB34,000 with an estimated useful life of 13.6 years.

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes. In accordance with ASC 350, goodwill is not amortized but is tested for impairment.

The amounts of net revenue and net loss of the target entity included in the Company's consolidated statements of operations from the acquisition date to December 31, 2018 amounted to RMB35,489 and RMB2,924, respectively.

Supplemental pro forma financial information as if the acquisitions had occurred as of the earliest date presented has not been provided as the acquisitions are not material to the Company’s results of operations in 2018.

Asset acquisitions in 2018

In 2018, the Company consummated several acquisitions of certain target groups for a total cash consideration of RMB124,667. These acquisitions did not meet the definition of a business as of the acquisition date in accordance with ASC 805 Business Combinations, and were accounted for as assets acquisitions. The targets entered into various property lease arrangements to operate data center business. These data centers had not commenced their operations as of the respective acquisition date. The primary assets acquired were properties under capital leases, equipment and leasehold improvements. The Company settled the consideration of RMB115,167 in 2018. As of December 31, 2018, the remaining consideration payable was RMB9,500, which was recorded in other payables.

LOANS AND BORROWINGS

12 Months Ended

Dec. 31, 2018

LOANS AND BORROWINGS

LOANS AND BORROWINGS

9 LOANS AND BORROWINGS

The Company’s borrowings consisted of the following:


	As of	As of
	December 31, 2017	December 31, 2018

Short-term borrowings	462,946	684,788
Current portion of long-term borrowings	327,538	598,532
Sub-total	790,484	1,283,320
Long-term borrowings, excluding current portion	3,459,765	5,203,708
Total loans and borrowings	4,250,249	6,487,028

Short-term borrowings

The Company’s short-term borrowings consisted of the following:


	As of	As of
	December 31, 2017	December 31, 2018

Unsecured short-term loans and borrowings	230,000	30,000
Secured short-term loans and borrowings	232,946	654,788
	462,946	684,788

Short-term borrowings were secured by the following assets:


	As of	As of
	December 31, 2017	December 31, 2018

Accounts receivable (Note)	11,615	18,796
Property and equipment, net	—	203,290
	11,615	222,086

The weighted average interest rates of short-term borrowings outstanding as of December 31, 2017 and 2018 were

7.93% and 7.01% per annum, respectively.

Long-term borrowings

The Company’s long-term borrowings consisted of the following:


	As of	As of
	December 31, 2017	December 31, 2018

Unsecured long-term loans and borrowings	167,250	85,250
Secured long-term loans and borrowings	3,620,053	5,716,990
	3,787,303	5,802,240

The weighted average interest rates of long-term borrowings as of December 31, 2017 and 2018 were 6.93% and 7.42% per annum, respectively.

Long-term borrowings were secured by the following assets:


	As of	As of
	December 31, 2017	December 31, 2018

Accounts receivable (Note)	124,428	347,142
Property and equipment, net	698,922	1,513,446
Prepaid land use rights, net	6,091	13,241
	829,441	1,873,829

Note: The Company applied accounts receivable generated from certain data center operation as collateral to secure borrowings.

The outstanding long-term borrowings mature serially from 2019 to 2028. The aggregate maturities of the above long-term borrowings for each for the five years and thereafter subsequent to December 31, 2018 are as follows:



Twelve-months ending December 31,		Long-term borrowings
2019		598,532
2020		725,727
2021		1,759,695
2022		1,087,955
2023		1,235,936
Thereafter		394,395
		5,802,240

The Company entered into secured loan agreements with various financial institutions for project development and working capital purpose with terms ranging from 1 to 13 years.

More specifically, the terms of these secured loan facility agreements generally include one or more of the following conditions. If any of the below conditions were to be triggered, the Company could be obligated to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule:

(i)

STT Communications Ltd. ceases to, directly or indirectly, own at least 50.1% of equity interests of STT GDC Pte. Ltd. (“STT GDC”);

(ii)

STT GDC (a) is not or ceases to, directly or indirectly, be the beneficial owner of at least 30%, in certain cases, 25%, of the issued share capital of the Company, or (b) does not or ceases to have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, at least 30%, in some cases, 25%, of the votes that may be cast at a meeting of the board of directors (or similar governing body) of the Company, or (c) is not or ceases to be the single largest shareholder of the Company;

(iii)

The Company and GDS Investment are not or ceases to be, directly or indirectly, the legal and beneficial owner of 100% of equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, GDS Investment, GDS Beijing, GDS Suzhou and the relevant borrowing subsidiaries;

(iv)

William Wei Huang ceases to, directly or indirectly, own at least 99.9% of the equity interests of and have the power to control GDS Beijing or GDS Suzhou;

(v)

GDS Beijing, GDS Suzhou and the relevant borrowing subsidiaries, cease to, directly or indirectly, be the legal and beneficial owner of 100% of equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, their consolidated subsidiaries as mentioned in Note 2(a);

(vi)

there are changes in the shareholding structure of a principal operating subsidiary of ours, as defined in the relevant loan facility agreement; and

(vii)

the IDC license of GDS Beijing or the borrowing subsidiaries, or the authorization by GDS Beijing to one of the subsidiaries to operate the data center business and provide IDC services under the auspices of the IDC license held by GDS Beijing is cancelled or fail to be renewed on or before the expiry date.

There are certain other events in the loan facility agreements upon which the Company could be obligated to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule, for example, the borrowing subsidiary fails to use the loan in accordance with the use of proceeds as provided in the loan facility agreement, the borrowing subsidiary violates or fails to perform any of its commitments under the loan facility agreement, the Company is delisted before the maturity date under the relevant loan facility agreement, etc.

In addition, the loan facilities contain financial covenants that limit certain financial ratios, such as the interest coverage ratio and gross leverage ratio, during the relevant period, as defined in the facilities. The loan facilities also include cross default provisions which would be triggered if the Company fails to repay any financial indebtedness in an aggregate amount of either US$4,500 or RMB50,000 or more when due or within any originally applicable grace period. As of December 31, 2018, the Company was in compliance with these covenants.

As of December 31, 2018, the Company had total working capital and project financing credit facilities of RMB8,134,013 from various financial institutions, of which the unused amount was RMB1,497,452. As of December 31, 2018, the Company had drawn down RMB6,636,561, of which RMB684,788 (net of debt issuance costs of RMB2,102) was recorded in short-term loans and borrowings and RMB5,802,240 (net of debt issuance costs of RMB147,431 )was recorded in long-term loans and borrowings, respectively. Drawdowns from the credit facility are subject to the approval of the banks and are subject to the terms and conditions of each agreement.

CONVERTIBLE BONDS PAYABLE

12 Months Ended

Dec. 31, 2018

CONVERTIBLE BONDS PAYABLE

CONVERTIBLE BONDS PAYABLE

10 CONVERTIBLE BONDS PAYABLE

Convertible Bonds due December 30, 2019 issued by the Company (“Convertible Bonds due 2019”)

On December 30, 2015, the Company entered into a subscription agreement with two investors (referred to as “PA investor” and STT GDC Pte. Ltd. or “STT GDC”) for Convertible Bonds due 2019 in an aggregate principal amount of US$250,000 in four tranches. On December 30, 2015 and January 29, 2016, the Company received the first tranche of US$100,000 (RMB648,950) from PA investor and the second tranche of US$50,000 (RMB324,475) from STT GDC, respectively. The subscription for the remaining third and fourth tranches of the Convertible Bonds due 2019 in the aggregate principal amount of US$100,000 (RMB648,950) expired on September 30, 2016. The Company pledged 100% of the equity interests in a subsidiary to the investors.

The key terms of the Convertible Bonds due 2019 are summarized as follows:

Maturity Date

December 30, 2019

Interest

A simple rate of 5% per annum on the outstanding principal amount, payable by the Company semi-annually (the “Cash Interest”).

In the event that the bond holder has redeemed or converted part or whole of the principal amount, the bond holder shall be entitled to additional interest with a simple rate of 5% per annum (the “Accrued Interest”), payable in cash on the Maturity Date in the case of redemption or by issuance of ordinary shares of the Company at the Conversion Price on the Conversion Date in the case of conversion.

Conversion of the Convertible Bonds due 2019

If the Company completes a QIPO, the bond holder, at any time between the date of completion of such QIPO (the “QIPO Completion Date”) and the Maturity Date (the “Conversion Period”), have the right to convert up to 100% of the principal amount of the bond (in multiples of US$10,000), together with the Accrued Interest thereon, into ordinary shares of the Company. The conversion price shall be US$1.675262 subject to adjustments for situations such as share dividend, share split, consolidation, recapitalization, exchange or substitution of ordinary shares at any time or from time to time. The Company determined that there was no embedded beneficial conversion feature (“BCF”) attributable to Convertible Bonds due 2019 at the commitment date because the initial conversion price of Convertible Bonds due 2019 was greater than the estimated fair value of the Company’s ordinary shares as of December 30, 2015. The estimated fair value of the underlying ordinary shares on December 30, 2015 was determined by management with the assistance of an independent valuation firm. The valuation used an income approach, which requires the estimation of future cash flows and the application of an appropriate discount rate with reference to comparable listed companies engaged in a similar industry to convert such future cash flows to a single present value.

The Company determined that the embedded conversion option of the Convertible Bonds due 2019 was not required to be accounted for as an embedded derivative for periods prior to the Company’s IPO, as the underlying ordinary shares were not publicly traded or otherwise readily convertible into cash. Upon the listing of the Company’s ordinary shares on November 2, 2016, the embedded conversion option has been accounted for separately as an embedded derivative with changes in its fair value recognized through the consolidated statement of operations. With the assistance of an independent appraiser, the Company determined that the fair value of the embedded conversion feature as a derivative liability was immaterial as of November 2, 2016 and December 31, 2016. Accordingly, no gain or loss was recognized in respect of the change in the fair value of such derivative liability for the year ended December 31, 2016.

If the Company completes a QIPO and the closing price of its shares is at or above 125% of the conversion price (i.e. 25% premium to the conversion price) for a period of at least ten consecutive trading days, the Company may, at its unilateral option, notify the bondholder that the bond then outstanding will be mandatorily converted at the end of the notice period in accordance with the terms and conditions of the bond.

Redemption on maturity

Unless previously converted or purchased and cancelled in the circumstances, the bond will be redeemed on December 30, 2019 at its principal amount, plus Accrued Interest thereon.

In November 2017, the bond holders of the Convertible Bonds due 2019, exercised the right to convert 100% of the principal amount of the bonds, together with the Accrued Interest thereon into 97,870,263 newly issued Class A ordinary shares at the conversion price of US$1.675262 pursuant to the terms of the bonds. Concurrent with the conversion, the accrued but unpaid Cash Interest was relinquished. The difference between par value of the shares issued of RMB32 and the carrying value of the convertible bonds, Accrued Interest and unpaid Cash Interest of RMB1,106,195 were recorded as additional paid-in capital upon conversion.

Convertible Bonds due June 1, 2025 issued by the Company (“Convertible Bonds due 2025”)

On June 5, 2018, the Company completed its issuance of Convertible Bonds due 2025 in an aggregate principal amount of US$300,000. The related issuance costs of US$8,948 were deducted from principal of the Convertible Bonds due 2025 and amortized over the period from issuance to the first put date (i.e. June 1, 2023) using the effective interest rate method. As of December 31, 2018, accrued interests of RMB3,432 were recorded in accrued expenses.

The key terms of the Convertible Bonds due 2025 are summarized as follows:

Maturity Date

June 1, 2025

Interest

2.0% per annum, accruing from June 5, 2018 (computed on the basis of 360-day year composed of twelve 30-day months), payable semiannually in arrears on June 1 and December 1 of each year

Repurchase of Notes

Holders will have the right to require the Company to repurchase for cash all of their notes, or any portion of the principal thereof that is equal to US$1 thousand or an integral multiple of US$1 thousand, on June 1, 2023 or if a fundamental change occurs at any time.

Tax redemption

The Company may redeem, at its option, all but not part of the Convertible Bonds due 2025 if it becomes obligated to pay to the holder of any note “additional amounts” (which are more than a de minimis amount) as a result of any change in tax law at the price equal to 100% of the principal amount together with accrued and unpaid interest. Upon receiving notice of redemption, each holder will have the right to elect to: convert its notes; or not have its notes redeemed and GDS Holdings will not pay any additional amounts as a result of such change in tax law.

Conversion rights

Holders may convert their notes at their option at any time prior to the close of business on the third scheduled trading day immediately preceding the maturity date.

The conversion rate is initially 19.3865 ADSs of the Company per US$1 thousand principal amount of notes (equivalent to an initial conversion price of approximately US$51.58 per ADS), and subject to changes under certain anti-dilution conditions.

The Company determined that the embedded conversion option of the Convertible Bonds due 2025 was not required to be accounted for as an embedded derivative pursuant to ASC 815 Derivatives and Hedging. The Company also determined that there was no embedded BCF attributable to Convertible Bonds due 2025 at the commitment date because the initial conversion price of Convertible Bonds due 2025 was greater than the fair value of the Company’s ordinary shares. Contingent BCF will be assessed upon occurrence of an adjusting event to the conversion price. The Company also determined there was no other embedded derivative to be separated from the Convertible Bonds due 2025.

ACCRUED EXPENSES AND OTHER PAYABLES

12 Months Ended

Dec. 31, 2018

ACCRUED EXPENSES AND OTHER PAYABLES

ACCRUED EXPENSES AND OTHER PAYABLES

11 ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consisted of the following:


	As of December 31,
	2017	2018

Accrued interest expenses	21,114	32,902
Accrued debt issuance costs	34,194	618
Income tax payable (note 19)	20,122	43,898
Consideration payables for acquisitions (note 8)	159,489	192,367
Deferred government grants	—	4,800
Accrued payroll and welfare benefits	47,432	77,134
Accrued professional fees	15,725	32,076
Other accrued operating expenses	38,118	52,618
Other payables	32,430	40,151
	368,624	476,564

LEASE

12 Months Ended

Dec. 31, 2018

LEASE

LEASE

12 LEASE

Capital lease and other financing obligations

The Company’s capital lease and other financing obligations are summarized as follows:


	December 31, 2017			December 31, 2018
	Capital	Other			Other
	lease	financing		Capital lease	financing
	obligations	obligations	Total	obligations	obligations	Total
Within 1 year	212,780	45,007	257,787	352,524	37,150	389,674
After 1 year but within 2 years	220,293	63,151	283,444	453,891	80,276	534,167
After 2 years but within 3 years	316,475	75,685	392,160	286,468	107,497	393,965
After 3 years but within 4 years	144,052	76,678	220,730	282,627	111,616	394,243
After 4 years but within 5 years	141,910	80,832	222,742	292,481	113,667	406,148
After 5 years	1,900,744	1,469,318	3,370,062	3,926,028	1,878,098	5,804,126
Total	2,936,254	1,810,671	4,746,925	5,594,019	2,328,304	7,922,323

Less total future interest	(1,209,120)	(905,590)	(2,114,710)	(2,300,484)	(1,160,108)	(3,460,592)
Less: estimated building costs	—	(231,228)	(231,228)	—	(160,506)	(160,506)
Present value of lease and other financing obligations	1,727,134	673,853	2,400,987	3,293,535	1,007,690	4,301,225
Including:
Current portion			97,943			166,898
Non-current portion			2,303,044			4,134,327

The Company’s capital and build-to-suit leases expire at various dates ranging from 2020 to 2039. The weighted average effective interest rate of the Company’s capital and build-to-suit leases was 7.28% and 6.99% as of December 31, 2017 and 2018, respectively.

The balances of other financing obligations are all derived from build-to-suit leases.

The Company recognized the capital lease and other financing obligations assumed in the business combination at the acquisition-date fair value. In addition, the Company entered into the following lease arrangements, which are classified as capital lease based on the assessment performed pursuant to the accounting standard for leases, during the year ended December 31, 2018:

Data center building leases

During the year ended December 31, 2018, the Company recorded additional capital leases for seven data center buildings with initial capital lease obligations totaling RMB1,300,453 through new lease agreements or acquisition of subsidiaries. The leases have terms of 15 or 20 years through March 2033 to June 2038.

Equipment Leases

During the year ended December 31, 2018, the Company entered into five lease agreements with third party lessors in respect of certain data center equipment. These equipment leases have lease terms of 3 years with initial capital lease obligations totaling RMB108,665.

Build-to-suit leases

In July and August 2018, the Company entered into two lease agreements with third-party developer-lessors for the development, construction and lease (build-to-suit lease) of two brand new buildings (the “Shanghai 12 Lease” and the “Shanghai 13 Lease”) in Shanghai, China. The Company paid deposits for the leases to the developer-lessors. Shanghai 12 Lease has an estimated lease term of 15.7 years commencing upon the delivery of the respective completed building to the Company to November 2035. Shanghai 13 Lease has a lease term of 20 years commencing upon the delivery of the respective completed building to the Company. The buildings will be constructed based on the Company’s specifications and will not include any interior elements, such as electrical wiring, interior walls, ventilation and air conditioning systems, flooring or normal tenant improvements (referred to as cold-shell buildings). Upon completion of constructions and the delivery of the cold-shell buildings, the Company will convert the buildings into data centers. No rent is paid by the Company during the construction of the buildings. All project hard costs are to be paid by the developer-lessors, including site preparation and construction costs. If the Company terminates the agreements before the construction of the buildings are completed, the Company is obligated to reimburse the developer-lessors for costs incurred during the construction period, including but not limited to project application costs, project design fees, ground preparation and levelling costs.

In accordance with ASC 840-40-55, the Company has determined that it is the owner of the buildings in Shanghai 12 Lease and Shanghai 13 Lease during the construction period for financial reporting purposes as it has substantially all of the construction period risks based on the maximum guarantee test (without considering probability that the Company having to make the payments). Accordingly, the Company records an asset for the estimated construction costs incurred of the project and a liability for those costs funded by the lessor-developer during the construction period.

Operating leases

The Company leases data centers, offices and other equipment that are classified as operating leases. The majority of the Company’s operating leases expire at various dates though 2037.

Future minimum operating lease payments as of December 31, 2018 are summarized as follow:


Twelve-months ending December 31,
2019		95,082
2020		69,541
2021		48,072
2022		41,758
2023		40,952
Thereafter		407,070
Total		702,475

Rental expenses were approximately RMB124,712, RMB155,148 and RMB108,550 for the years ended December 31, 2016, 2017 and 2018, respectively. The Company did not sublease any of its operating leases for the periods presented.

OTHER LONG-TERM LIABILITIES

12 Months Ended

Dec. 31, 2018

OTHER LONG-TERM LIABILITIES

OTHER LONG-TERM LIABILITIES

13 OTHER LONG-TERM LIABILITIES

Other long-term liabilities consisted of the following:


	As of	As of
	December 31, 2017	December 31, 2018

Consideration payable for acquisitions (Note 8)	120,881	79,083
Payables for purchase of property and equipment	195,749	206,591
Deferred government grants	16,789	9,771
Asset retirement obligations	17,648	35,879
Others	7,831	9,488
Total	358,898	340,812

REDEEMABLE PREFERRED SHARES

12 Months Ended

Dec. 31, 2018

REDEEMABLE PREFERRED SHARES

REDEEMABLE PREFERRED SHARES

14 REDEEMABLE PREFERRED SHARES


	Series A		Series A*		Series B		Series B1		Series B2		Series B4		Series B5		Series C		Total
	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000
Balance at January 1, 2016	29,635,045	107,428	6,916,645	39,575	2,576,483	16,789	11,527,742	80,148	10,435,639	67,419	14,076,620	87,477	35,393,262	258,038	238,526,241	1,738,440	349,087,677	2,395,314
Changes in redemption value	—	(39,098)	—	—	—	(3,921)	—	—	—	—	—	—	—	(21,016)	—	(141,635)	—	(205,670)
Conversion to ordinary shares	(29,635,045)	(72,965)	(6,916,645)	(43,564)	(2,576,483)	(13,600)	(11,527,742)	(88,221)	(10,435,639)	(74,209)	(14,076,620)	(96,287)	(35,393,262)	(248,455)	(238,526,241)	(1,673,831)	(349,087,677)	(2,311,132)
Foreign exchange impact	—	4,635	—	3,989	—	732	—	8,073	—	6,790	—	8,810	—	11,433	—	77,026	—	121,488
Balance at December 31, 2016	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

The Series A, Series B Shares, Series A* Shares, Series B1 Shares, Series B2 Shares, Series B3 Shares, Series B4 Shares, Series B5 Shares and Series C Shares are collectively referred to as the “preferred shares”. The preferred shares are denominated in US$, which is the functional currency of the issuer, GDS Holdings.

In January 2007, the Company issued 53,625,000 Series A redeemable preferred shares (“Series A Shares”) to a group of investors unrelated to the Company at US$0.3636 (RMB2.8279) per share. Concurrent with the issuance, a holder of bonds payable converted bonds payable of US$3,500 (RMB27,222) into 9,625,000 Series A Shares.

In March 2011, the Company issued 11,550,000 Series B redeemable preferred shares (“Series B Shares”) to a group of investors unrelated to the Company at US$0.7792 (RMB5.1087) per share.

In June 2014, the Company issued 88,352,558 ordinary shares, 14,149,705 Series A* Shares, 33,959,293 Series B1 Shares, 25,618,413 Series B2 Shares, 14,045,432 Series B3 Shares and 23,037,763 Series B4 Shares in connection with the acquisition of EDC Holding Limited (“EDC Holding”). Series B1, B2, B3, B4 Shares are collectively referred to as Series B* Shares.

On August 13, 2014, the Company issued 238,526,241 Series C redeemable preferred shares (“Series C Shares”) to an investor unrelated to the Company at US$1.0365 (RMB6.3779) per share, for cash consideration of US$247,238 (RMB1,521,295). The Company incurred issuance costs of US$3,271 (RMB20,128), which were recorded as a reduction in the carrying amount of the redeemable preferred shares.

Prior to the completion of the IPO, the Company concluded that it was probable that the redeemable preferred shares will become redeemable. The Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the redeemable preferred shares to equal the redemption value at the end of each reporting period. Increases in the carrying amount of the redeemable preferred shares are recorded by charges against retained earnings or, in the absence of retained earnings, by charges against paid-in capital. Reductions in the carrying amount of the redeemable preferred shares are recognized only to the extent that increases to the initial carrying amount of the redeemable preferred shares were previously recorded. The resulting increases or decreases in the carrying amount of redeemable preferred shares increases or decreases net loss attributable to ordinary shareholders in the calculation of earnings per share. The increase in redemption value of the redeemable preferred shares was RMB69,116 and RMB110,926 for the years ended December 31, 2014 and 2015, respectively. The decrease in redemption value of the redeemable preferred shares was RMB205,670 for the year ended December 31, 2016 as a result of the preference dividend declared and paid upon the completion of the IPO.

Extinguishment of preferred shares

In connection with the issuance of Series C Shares, on August 13, 2014, the Company repurchased 23,533,064 Series A Shares, 5,503,899 Series A* Shares, 8,413,412 Series B Shares, 13,209,358 Series B1 Shares, 9,964,954 Series B2 Shares, 5,463,340 Series B3 Shares and 8,961,143 Series B4 Shares at US$1.0365 (RMB6.3779) per share, for cash consideration of US$77,790 (RMB478,666), of which RMB455,366 was paid in 2014 and the remaining RMB23,300 was paid in 2015. The Company made the offer for the repurchase to all existing preferred shareholders on that date. The reason for the repurchase of these various series of preferred shares and the ordinary shares was so that the Series C shareholder would hold no less than 40% of the Company’s issued share capital on a fully diluted basis.

In accordance with ASC 260-10-S99, the difference between the cash consideration transferred to the holders of the preferred shares and the carrying amount of the preferred shares (net of issuance costs) is added to net loss to arrive at loss attributable to ordinary shareholders in the calculation of loss per share. The Company recorded the difference of US$12,497 (RMB76,900) between the repurchase price of US$77,790 (RMB478,666) and the carrying amount of such preferred shares of US$65,293 (RMB401,766) against additional paid-in capital, in the absence of retained earnings.

On August 13, 2014 and December 22, 2014, the Company exchanged a total of 35,393,262 preferred shares, comprising of 10,081,891 Series A Shares, 1,729,161 Series A* Shares, 560,105 Series B Shares and 23,022,105 Series B* Shares (collectively, the “Exchanged Shares”) by re-designating those shares into 35,393,262 newly issued Series B5 redeemable preferred shares (“Series B5 Shares”) to facilitate the sale of the Exchanged Shares held by certain selling preferred shareholders. Concurrently, the holders sold the 35,393,262 Series B5 Shares to one investor (B5 Holder), at the purchase price of US$1.0365 (RMB6.3779) per share for a total cash consideration of US$36,685 (RMB225,198). The terms of the B5 Shares were identical to the terms of the Series C Shares.

The exchange, in substance, is the same as a repurchase of the Exchanged Shares from the selling preferred shareholders and a concurrent issuance of Series B5 Shares to the B5 Holder. Accordingly, the Company accounted for the exchange or re-designation of the Exchanged Shares for Series B5 Shares as an extinguishment. The difference of US$4,812 (RMB29,615) between the fair value of the Series B5 Shares of US$36,685 (RMB225,198) and the carrying amount of the Exchanged Shares of US$31,873 (RMB195,583) was recorded against additional paid-in capital, in the absence of retained earnings. In accordance with ASC 260-10-S99, the difference was added to net loss to arrive at loss attributable to ordinary shareholders in the calculation of loss per share.

Modification of preferred shares

In connection with the issuance of Series C Shares on August 13, 2014, the Company and the holders of the remaining Series A, A*, B, B1, B2, B3 and B4 Shares (after the above extinguishment) agreed to modify the terms of their respective preferred shares. The redemption date of these Series A, A*, B, B1, B2, B3 and B4 Shares was extended to the same redemption date as Series C Shares. The holders also agreed to modify the redemption price by reducing the annual rate of return of their respective preferred shares.

The Company determines whether an amendment or modification to the terms of its redeemable convertible preferred shares represents an extinguishment based on a fair value approach. If the fair value of the preferred shares immediately before and after the amendment is significantly different (by more than 10%), the amendment or modification represents an extinguishment. The Company has determined that the amendment to the terms of the preferred shares did not represent an extinguishment, and therefore modification accounting was applied by analogy to the modification guidance contained in ASC 718-20, Compensation—Stock Compensation. Based on a comparison of the fair value of the preferred shares after the amendment to the fair value of the preferred shares immediately before the amendment, the additional fair value change was immaterial. The fair value of the preferred shares before and after the amendment or modification was determined by management with the assistance of a third party valuation firm.

Preference Dividend

On September 29, 2016, the Board of Directors of the Company declared and approved the payment of the preference dividend on the Company's preferred shares. The entitlement to, and payment of the dividend is conditional on the completion of the Qualified IPO. The amount of the preference dividend to be paid is determined based on the annual rate of 6% from the date of the issuance of the respective preferred shares to the date of the Qualified IPO plus a special rate of return on Series A*, B1, B2 and B4 Shares. The preference dividend is to be paid in either cash or ordinary shares of the Company as elected by each preferred shareholder. The number of ordinary shares to be issued to pay the preference dividends is determined based on the initial public offering price of the Company's ordinary shares and the dividend amount elected by the preferred shareholder to be paid in ordinary shares. The shareholders of Series A, A*, B, B1, B2 redeemable preferred shares have elected to receive the dividend in cash upon the completion of the Qualified IPO, and the shareholders of Series B4, B5 and C redeemable preferred shares have elected to receive the dividend in ordinary shares of the Company upon the completion of the Qualified IPO.

Upon completion of the IPO on November 7, 2016, the Company paid the preference dividend in an aggregate amount of US$50,812 (RMB343,296), of which US$11,449 (RMB76,502) was paid in cash and US$39,363(RMB266,794) was paid by issuing an aggregate 31,490,164 ordinary shares to the holders of the preferred shares based on the initial public offering price of US$10.00 per ADS, or US$1.25 per ordinary share.

Terms of the preferred shares

Key terms of the preferred shares are summarized as follows:

Dividends

Holders of the preferred shares are entitled to receive preference dividends at an annual rate of 6% per annum of the respective preferred shares issue price, out of any funds legally available for this purpose, when, as and if declared by the Board of Directors of GDS Holdings. Payment of dividends to certain series of preferred shares is in preference and priority to any declaration or payment of any distribution on other series of preferred shares, details of which are set out in the Company’s Memorandum of Association. The right to receive dividends on the preferred shares shall be cumulative, and the right to such dividends shall accrue to holders of the preferred shares notwithstanding the fact that dividends on said shares are not declared or paid in any calendar year.

Conversion

The holders of preferred shares have the right to convert all or any portion of their holdings into ordinary shares of GDS Holdings at any time. Each preferred share is convertible into one ordinary share, subject to adjustment such as share dividend, share split, consolidation, and recapitalization.

In addition, each preferred share shall (a) automatically be converted into ordinary share at then-effective conversion price immediately prior to the closing of a QIPO, or (b) be converted in to ordinary share at then-effective conversion price with the vote or written consent of the holders of at least 85% of the then outstanding Series A Shares, Series A* Shares, Series B Shares, Series B1 Shares, Series B2 Shares, Series B4 Shares and Series B5 Shares (voting together as a separate class) and the holders of at least 75% of the then outstanding Series C Shares, in each case on an as converted basis.

For the purposes of conversion of preferred shares, QIPO refers to a firm commitment underwritten IPO on an internationally recognized securities exchange (i) with gross cash proceeds to the Company of at least US$100,000, (ii) at an issue price per share being not less than twenty-five percent (25%) above US$1.0365, as adjusted for any recapitalization from time to time, and (iii) resulting in a free float of not less than twenty percent (20%) of the Company’s share capital.

The Company evaluated the embedded conversion option in the convertible preferred shares to determine if the embedded conversion option require bifurcation and accounted for as a derivative. The Company concluded the embedded conversion option did not require it to be bifurcated pursuant to ASC 815. The Company also determined that there was no BCF attributable to the convertible preferred shares because the initial conversion price was higher than the fair value of the Company’s ordinary shares. The fair value of the Company’s ordinary shares on the commitment date was estimated by management with the assistance of an independent valuation firm. The Company also determined there was no other embedded derivative to be separated from the convertible preferred share.

Upon completion of the IPO on November 7, 2016, 349,087,677 preferred shares were automatically converted into 349,087,677 ordinary shares on a one-to-one basis. Upon conversion, the carrying amounts of the Series A, A*, B, B1, B2, B4, B5 and C redeemable preferred shares have been reclassified as shareholders' equity under ordinary shares (for the par value) and additional paid-in capital (for the excess of the carrying value of the redeemable preferred shares over the par value).

Voting rights

The holders of the preferred shares have voting rights equivalent to the ordinary shareholders on an “if converted” basis.

Liquidation preference

In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of preferred shares shall be entitled to be paid out of the assets of the Company available for distributions a liquidation preference in the amount per preferred share equal to the redemption amount plus all accrued or declared but unpaid dividends.

Payment of liquidation preference on certain series of preferred shares is prior and in preference to any payment on other series of preferred shares, and the liquidation preference in order of priority is Series C, Series B5, Series B*, Series B, Series A*, and Series A, details of which are set out in the Company’s Memorandum of Association.

Redemption

Subject to other redemption requirements set out in the Company’s Memorandum of Association, on or after the 4th anniversary of the original issue date of Series C Shares, the holders of preferred shares may, at the election of the holders of at least 75% of each series of outstanding preferred shares voting together as a separate class on an as converted basis, to the extent permitted by applicable laws, redeem all or any portion of the then outstanding preferred shares at a redemption price equal to the redemption amount, plus an amount equal to all accrued or declared but unpaid dividends thereon, including the 6% cumulative preference dividends whether declared or not.

The redemption amount, shall mean, with respect to the Series A Shares, US$0.363636 per share; with respect to the Series B Shares, US$0.77922 per share, with respect to the Series A* Shares, US$0.1060 per share; with respect to the Series B1 Shares, US$0.5300 per share; with respect to the Series B2 Shares, US$0.5855 per share; with respect to the Series B4 Shares, US$0.4340 per share; with respect to the Series B5 Shares, US$1.036522 per share; and with respect to the Series C Shares, US$1.036522 per share.

FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2018

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT

15 FAIR VALUE MEASUREMENT

As of December 31, 2017 and 2018, there was no asset or liability that was measured at fair value on a recurring basis in periods subsequent to their initial recognition.

Following is a description of the valuation techniques that the Company uses to measure fair value of financial assets and financial liabilities:

Short-term financial instruments (accounts receivable and payable, short-term borrowings, and accrued expenses and other payables)—cost approximates fair value because of the short maturity period.

Long-term borrowings—fair value is based on the amount of future cash flows associated with each debt instrument discounted at the Company’s current borrowing rate for similar debt instruments of comparable terms. The carrying values of the long-term borrowings approximate their fair values as all the long-term debt carry variable interest rates which approximate rates currently offered by the Company’s bankers for similar debt instruments of comparable maturities.

Convertible bonds payable—the estimated fair value was RMB1,512,677 as of December 31, 2018. The fair value was measured based on the price in the open market.

ORDINARY SHARES	12 Months Ended
ORDINARY SHARES	Dec. 31, 2018
ORDINARY SHARES
ORDINARY SHARES	16 ORDINARY SHARES Upon incorporation in 2006, the Company issued 110,000,001 ordinary shares with a par value of US$0.00005 (RMB0.000404) each. In June 2014, the Company issued 88,352,558 ordinary shares with a fair value of RMB472,945 to the shareholders of EDC Holding as part of the consideration to acquire EDC Holding. In August 2014, the holder of the Bonds due 2015 exchanged principal amount of US$27,860 (RMB171,431) for 38,397,655 ordinary shares. In connection with the issuance of Series C Shares, on August 13, 2014, the Company repurchased 18,762,292 ordinary shares from certain shareholders at US$1.0365 (RMB6.3779) per share, for a total consideration of US$19,448 (RMB119,664). Upon the repurchase, the Company cancelled such shares. The reason for the repurchase of the various series of preferred shares (note 14) and these ordinary shares was so that the Series C shareholder would hold no less than 40% of the Company’s issued share capital on a fully diluted basis. In August 2016, the Company granted 877,400 fully vested restricted shares to its directors to settle a portion of its remuneration obligation to such directors (note 17). On October 18, 2016, the Board approved the reclassification and redesignation of the Company's existing preferred shares and ordinary shares into Class A ordinary shares and Class B ordinary shares, whereby immediately prior to the completion of the Company's initial public offering, (i) all of the Company's then issued and outstanding preferred shares and ordinary shares were converted into an equal number of Class A ordinary shares, and (ii) all of the Class A ordinary shares then beneficially owned by Mr. William Wei Huang, the founder, chairman and chief executive officer, or entities controlled by him, were converted into an equal number of Class B ordinary shares. All options, regardless of grant date, entitle their holders to receive the equivalent number of Class A ordinary shares once the conditions to vesting and exercise of such share-based compensation awards have been met. Class A ordinary shares and Class B ordinary shares carry equal rights, generally rank pari passu with one another and are entitled to one vote per share at general meetings of shareholders, except for only the following matters at general meetings of shareholders, with respect to which Class B ordinary shares are entitled to 20 votes per share: (i) the election of a simple majority, or six, of our directors; and (ii) any change to our articles of association that would adversely affect the rights of Class B shareholders. With respect to any other matters at general meetings of our shareholders, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to one vote. For so long as there are Class B ordinary shares outstanding, the holders of Class B ordinary shares will also have the right to nominate one less than a simple majority, or five, of the directors to our board of directors, which directors shall be subject to the voting arrangements described above. Class B ordinary shares are convertible into Class A ordinary shares, and will automatically convert into Class A ordinary shares under certain circumstances. Any Class A ordinary shares which Class B shareholders acquire, including upon the exercise of options, will be converted into Class B ordinary shares. On November 7, 2016 and December 6, 2016, the Company successfully completed its IPO of 19,250,000 ADS (or 154,000,000 Class A ordinary shares) and the underwriters exercised their option to purchase 820,735 additional ADSs (or 6,565,880 Class A ordinary shares), each representing eight of its Class A ordinary shares. Upon completion of the IPO, 349,087,677 preferred shares were automatically converted into 349,087,677 Class A ordinary shares on a one-to-one basis. In addition, an aggregate 31,490,164 Class A ordinary shares were issued to the holders of the preferred shares as a portion of settlement of total preference shares dividend (note 14). In October 2017, the Company issued 64,257,028 Class A ordinary shares to CyrusOne Inc., a third-party investor, at the price of $1.55625 per share. In November 2017, the bond holders of the Convertible Bonds due 2019, exercised the right to convert 100% of the principal amount of the bonds, together with the Accrued Interest thereon into 97,870,263 newly issued Class A ordinary shares at the conversion price of $1.675262 pursuant to the terms of the bonds (note 10). On January 26, 2018, the Company completed a public offering in which the Company offered and sold 8,000,000 ADSs (or 64,000,000 Class A ordinary shares), and SBCVC Holdings Limited ("SBCVC"), one of the Company's principal shareholders, sold 3,000,000 ADSs (or 24,000,000 Class A ordinary shares), at a price of US$26.00 per ADS. On January 29, 2018, the underwriters exercised their option to purchase from the Company and SBCVC additional 225,000 ADSs (or 1,800,000 Class A ordinary shares) and 1,425,000 ADSs (or 11,400,000 Class A ordinary shares), respectively. The Company raised a total of US$202,696 (RMB1,283,308) in proceeds from this public offering, net of underwriting discounts and commissions and other issuance costs. As of December 31, 2018, the Company’s outstanding share capital consisted of 939,479,307 Class A ordinary shares and 67,590,336 Class B ordinary shares.

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2018

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

17 SHARE-BASED COMPENSATION

Equity Incentive Plans

The Company adopted the 2014 Equity Incentive Plan (“the 2014 Plan”) in July 2014 for the granting of share options to key employees, directors and external consultants in exchange for their services. The total number of shares, which may be issued under the 2014 Plan, is 29,240,000 shares.

The Company adopted the 2016 Equity Incentive Plan (“the 2016 Plan”) in August 2016 for the granting of share options, stock appreciation rights and other stock-based award (collectively referred to as the “Awards”) to key employees and directors. The maximum aggregate number of shares, which may be subject to Awards under the Plan, is 56,707,560.

Options to directors, officers and employees

On May 1, 2016, the Company granted 11,084,840 share options under the 2014 Plan to employees, officers and directors. These share options were fully vested upon the date of grant for past services and had an exercise price of US$0.7792 (RMB5.0328) per option. The options have a contractual term of five years.

Options to non-employee consultants

In June 2018, the Company granted 500,000 share options under the 2014 Plan to an external consultant at an exercise price of US$0.7792 (RMB5.0) per option, which were immediately vested. The options have a contractual term of five years. The Company recognized the fair value of such options granted and vested amounted to US$2,429 (RMB16,073) immediately to profit and loss. The fair value of such options was determined to be approximately the difference between the grant date share price and the exercise price.

A summary of the option activity is as follows:


			Weighted
			average
		Weighted	grant-date
	Number	average	fair value
	of options	exercise price	per option
		(RMB)	(RMB)
Options outstanding at January 1,2016	17,193,534	4.8	1.9
Granted	11,551,507	5.2	4.9
Forfeited	(155,259)	4.8	1.9
Options outstanding at December 31, 2016	28,589,782	5.2	3.2

Granted	333,334	5.2	10.6
Exercised	(816,880)	5.3	1.9
Forfeited	(19,000)	5.3	1.9
Options outstanding at December 31, 2017	28,087,236	5.1	3.2

Granted	500,000	5.0	31.2
Exercised	(3,614,464)	5.2	4.5
Forfeited	(193,340)	5.0	6.2
Options outstanding at December 31, 2018	24,779,432	5.3	2.2

Options vested and expect to vest at December 31, 2018	24,779,432	5.3	2.2

The following table summarizes information with respect to stock options outstanding and stock options exercisable as of December 31, 2018:


		Weighted
		average	Weighted
	Number	remaining	average
	of shares	contractual life	exercise price
		(years)	(RMB)
Options outstanding and exercisable	24,779,432	0.7	5.3

As of December 31, 2017 and 2018, 266,666 and nil forfeitable and unvested non-employee options, respectively, were treated as unissued for accounting purposes and were not included in the table above. As of December 31, 2017 and 2018, there were no unvested employee stock options.

The fair value of the options granted in May 2016 was estimated on the date of grant using the binomial option pricing model with the following assumptions used.


Grant date:	May 2016
Risk-free rate of return	1.98	%
Volatility	28.50	%
Expected dividend yield	—
Exercise multiple	2.20
Fair value of underlying ordinary share	US$1.51 (RMB 9.8)

Expected term	5 years

(1) Volatility

The volatility of the underlying ordinary shares during the lives of the options was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the expected term of the options.

(2) Risk-free interest rate

Risk-free interest rate was estimated based on the yield to maturity of China international government bonds with a maturity period close to the expected term of the options.

(3)

Dividend yield

The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options.

(4) Exercise multiple

Exercise multiple represents the value of the underlying share as a multiple of exercise price of the option, which, if achieved, results in exercise of the option.

(5) Fair value of underlying ordinary shares

The estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on a retrospective valuation with the assistance of a third party appraiser.

Settlement of liability-classified restricted shares award

In May 2016, the Board resolved to pay RMB 11,733 to its directors, of which RMB4,194 will be settled in cash and RMB7,539 will be settled by issuing of a variable number of the Company’s shares that have an equal value. Accordingly, the Company recorded an expense in general and administrative expenses and a liability of RMB11,733. In August 2016, the Company paid cash of RMB4,194 and issued 877,400 fully vested restricted shares to its directors to fully settle such obligation. Fifty percent (50%) of the restricted shares may not be sold or otherwise disposed of for one year from the grant date. The number of restricted shares required to be issued was determined by the fair value of the restricted shares on the date of settlement and the share-settled portion of the liability of RMB7,539.

In May, August and November 2017, the Company issued a total of 502,000 fully vested restricted shares to its directors to settle a portion of their remuneration for services provided by the directors, which had been recorded in general and administrative expenses. The number of restricted shares issued was determined by the fair value of the restricted shares on the date of settlement and the share-settled portion of the liability of RMB4,462.

In March, May, August and November 2018, the Company issued a total of 260,560 fully vested restricted shares to its directors to settle a portion of their remuneration for services provided by the directors, which had been recorded in general and administrative expenses. The number of restricted shares issued was determined by the fair value of the restricted shares on the date of settlement and the share-settled portion of the liability of RMB6,357.

Upon issuance of the shares to settle the obligation, equity is increased by the amount of the liability settled in shares and no additional share-based compensation expense was recorded.

Restricted shares to directors, officers and employees

In December 2016, July 2017 and August 2018, the Company granted non-vested restricted shares of 12,910,080, 13,475,060 and 12,941,952, respectively, to employees, officers and directors. The restricted share awards contained service and market conditions, or service and performance condition, which are tied to the financial performance of the Company. For restricted shares granted, the value of the restricted shares is determined on the fair value of the acquisition date, on which all criteria for establishing the grant dates were satisfied. The value of restricted shares subject to service condition attached is recognized as the compensation expense using the graded-vesting method. The value of restricted shares with performance conditions attached is recognized as compensation expense using the graded-vesting method only when the achievement of performance conditions becomes probable.

A summary of the restricted share activity is as follows:


		Weighted average grant-
	Number of	date fair value per share
	Shares	(RMB)

Unvested at January 1, 2016	—
Granted	13,787,480	6.1
Vested	(877,400)	8.6
Forfeited	—	—

Unvested at December 31, 2016	12,910,080	6.0
Granted	13,977,060	5.2
Vested	(2,123,120)	8.5
Forfeited	(238,400)	6.8

Unvested at December 31, 2017	24,525,620	5.3
Granted	13,202,512	14.5
Vested	(7,326,620)	6.0
Forfeited	(891,008)	5.9

	29,510,504	9.3

The Company recognized share-based compensation expenses of RMB4,697, RMB56,237 and RMB89,804 for the years ended December 31, 2016, 2017 and 2018, respectively, for the restricted share awards. As of December 31, 2018, total unrecognized compensation expense relating to the unvested shares was RMB179,834. The expense is expected to be recognized over a weighted average period of 1.71 years using the graded-vesting attribution method. The Company did not capitalize any of the share-based compensation expenses as part of the cost of any asset for the years ended December 31, 2016, 2017 and 2018.

The fair value of the restricted shares granted is estimated on the date of grant using the Monte Carlo simulation model with the following assumptions used.


Grant date:	December 2016		July 2017		August 2018
Risk-free rate of return	0.68 - 1.65	%	1.29 - 1.63	%	2.047 - 2.418	%
Volatility	22.35 - 24.80	%	20.43 - 21.48	%	71.85	%
Expected dividend yield	—		—		—
Share price at grant date	US$1.24		US$1.191		US$3.125
	(RMB8.6)		(RMB8.0)		(RMB21.3)
Expected term	1 - 5 years		2 - 4 years		2 - 4 years

(1)

Volatility

Expected volatility is assumed based on the historical volatility of the Company's comparable companies in the period equal to the expected term of each grant.

(2)

Risk-free interest rate

Risk-free rate equal to the implied yield of zero-coupon United States Government Bond for a term equal to the remaining expected term.

(3)

Dividend yield

The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the restricted shares.

A summary of share-based compensation expenses for the years ended December 31, 2016, 2017 and 2018 is as follows:


	Years ended December 31,
	2016	2017	2018

Costs of revenue	2,114	9,941	18,008
Selling and marketing expenses	6,590	18,390	25,213
General and administrative expenses	55,409	30,866	61,707
Research and development expenses	52	646	949
Total share-based compensation expenses	64,165	59,843	105,877

REVENUE

12 Months Ended

Dec. 31, 2018

REVENUE

REVENUE

18 REVENUE

Net revenue consisted of the following:


	Years ended December 31,
	2016	2017	2018

Colocation services	770,145	1,219,086	2,104,259
Managed service and others	232,870	372,774	655,231
Service revenue	1,003,015	1,591,860	2,759,490
Equipment sales	52,945	24,306	32,587
Total	1,055,960	1,616,166	2,792,077

INCOME TAX

12 Months Ended

Dec. 31, 2018

INCOME TAX

INCOME TAX

19 INCOME TAX

Pursuant to the rules and regulations of the Cayman Islands, GDS Holdings is not subject to any income tax in the Cayman Islands.

The Company’s PRC entities are subject to the PRC Corporate Income Tax (“CIT”) rate of 25%.

The Company’s Hong Kong SAR entities are subject to the Hong Kong SAR Profits Tax rate of 16.5%.

The operating results before income tax and the provision for income taxes by tax jurisdictions for the years ended December 31, 2016, 2017 and 2018 are as follows:


	Years ended December 31,
	2016	2017	2018
Loss before income taxes:
PRC	144,158	130,961	237,232
Other jurisdictions	140,569	202,015	202,427
Total loss before income taxes	284,727	332,976	439,659

Current tax expenses:
PRC	311	5,546	27,206
Other jurisdictions	1,998	—	—
Total current tax expenses	2,309	5,546	27,206

Deferred tax benefits:
PRC	(10,935)	(11,683)	(36,597)
Other jurisdictions	311	61	—
Total deferred tax benefits	(10,624)	(11,622)	(36,597)

Total income taxes benefits	(8,315)	(6,076)	(9,391)

The actual income tax expense reported in the consolidated statements of operations differs from the amount computed by applying the PRC statutory income tax rate to loss before income taxes due to the following:


	Years ended December 31,
	2016		2017		2018

PRC enterprise income tax rate	25.0	%	25.0	%	25.0	%
Non-PRC entities not subject to income tax	(13.7)	%	(14.8)	%	(9.2)	%
Tax differential for entities in non-PRC jurisdiction	0.5	%	(0.8)	%	(1.2)	%
Tax effect of current year permanent differences	(0.3)	%	0.0	%	(1.3)	%
Expiration of unused net operating losses	(2.9)	%	(2.6)	%	(10.1)	%
Change in valuation allowance	(5.5)	%	(5.2)	%	(1.0)	%
Return to provision adjustment on permanent differences	(0.2)	%	0.2	%	(0.1)	%
	2.9	%	1.8	%	2.1	%

The components of deferred tax assets and liabilities are as follows:


	As of December 31,
	2017	2018
Deferred tax assets:
Allowance for accounts receivable	—	48
Government subsidy	4,197	3,643
Accrued expenses	14,024	26,867
Asset retirement obligation	4,412	8,970
Net operating loss carry forwards	170,267	192,505
Total gross deferred tax assets	192,900	232,033
Valuation allowance on deferred tax assets	(152,241)	(155,852)
Deferred tax assets, net of valuation allowance	40,659	76,181

Deferred tax liabilities:
Property and equipment	(52,417)	(80,544)
Intangible assets	(82,305)	(116,156)
Prepaid land use rights	(1,693)	(1,653)
Obligation under capital lease and other financing obligations	(14,216)	(12,732)
Total deferred tax liabilities	(150,631)	(211,085)

Net deferred tax liabilities	(109,972)	(134,904)

Analysis as:
Deferred tax assets	14,305	36,974
Deferred tax liabilities	(124,277)	(171,878)
Net deferred tax liabilities	(109,972)	(134,904)

The following table presents the movement of the valuation allowance for the deferred tax assets:


	Years ended December 31,
	2016	2017	2018

Balance at the beginning of the year	118,952	134,935	152,241
Increase during the year	15,983	17,306	3,611
Balance at the end of the year	134,935	152,241	155,852

Management believes it is more likely than not that the deferred tax asset, net of the valuation allowance as of December 31, 2018, will be realized. However, the amount of the deferred tax assets considered realizable could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. As of December 31, 2018, the valuation allowance of RMB155,852 was related to the deferred tax asset of certain subsidiaries of the Company. These entities were in a cumulative loss position, which is a significant negative indicator to overcome that sufficient income will be generated over the periods in which the deferred income tax assets are deductible or utilized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilized. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

The net operating losses carry forwards of the Company’s PRC subsidiaries amounted to RMB722,276 as of December 31, 2018, of which RMB 34,591, RMB65,233, RMB59,735, RMB183,984 and RMB378,733 will expire if unused by December 31, 2019, 2020, 2021, 2022 and 2023, respectively.

Uncertainties exist with respect to how the current income tax law in the PRC applies to the Company’s overall operations, and more specifically, with regard to tax residency status. The 2008 EIT Law includes a provision specifying that legal entities organized outside the PRC are considered residents for Chinese income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities are considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Company does not believe that the legal entities organized outside the PRC should be treated as residents for 2008 EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC are deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income tax at a rate of 25%.

If the Company were to be non-resident for PRC tax purposes, dividends paid to it from profits earned by the PRC subsidiaries after January 1, 2008 would be subject to a withholding tax. The CIT law and its relevant regulations impose a withholding tax at 10%, unless reduced by a tax treaty or agreement, for dividends distributed by a PRC-resident enterprise to its non-PRC-resident corporate investor for earnings generated beginning on January 1, 2008. Undistributed earnings generated prior to January 1, 2008 are exempt from such withholding tax. The Company has not recognized any deferred tax liability for the undistributed earnings of the PRC-resident enterprise as of December 31, 2017 and 2018, as the Company plans to permanently reinvest these earnings in the PRC. Each of the PRC subsidiaries does not have a plan to pay dividends in the foreseeable future and intends to retain any future earnings for use in the operation and expansion of its business in the PRC.

DISTRIBUTION OF PROFIT	12 Months Ended
DISTRIBUTION OF PROFIT	Dec. 31, 2018
DISTRIBUTION OF PROFIT
DISTRIBUTION OF PROFIT	20 DISTRIBUTION OF PROFIT Pursuant to the laws and regulations of the PRC, the Company’s PRC entities are required to allocate at least 10% of their after tax profits, after making good of accumulated losses as reported in their PRC statutory financial statements, to the general reserve fund and have the right to discontinue allocations to the general reserve fund if the balance of such reserve has reached 50% of their registered capital. The general reserves are not available for distribution to the shareholders (except in liquidation) and may not be transferred in the form of loans, advances, or cash dividend. These PRC entities are restricted in their ability to transfer the registered capital and general reserve fund to GDS Holdings in the form of dividends, loans or advances. The restricted portion amounted to RMB2,495,075 and RMB4,768,715 as of December 31, 2017 and 2018, respectively, including non-distributable general reserve fund of RMB214 and RMB579 as of December 31, 2017 and 2018, respectively. The parent company financial information of GDS Holdings is disclosed in note 26.

LOSS PER ORDINARY SHARE

12 Months Ended

Dec. 31, 2018

LOSS PER ORDINARY SHARE

LOSS PER ORDINARY SHARE

21 LOSS PER ORDINARY SHARE

The computation of basic and diluted loss per share is as follows:


	Years ended December 31,
	2016	2017	2018

Net loss	(276,412)	(326,900)	(430,268)

Change in redemption value of redeemable preferred shares (i)	205,670	—	—
Dividend on preferred shares (ii)	(332,660)	—	—
Net loss attributable to ordinary shareholders	(403,402)	(326,900)	(430,268)

Weighted average number of ordinary shares outstanding-basic and diluted (iii)	299,093,937	784,566,371	990,255,959

Loss per ordinary share - basic and diluted	(1.35)	(0.42)	(0.43)

Note (i):

The amount of change in redemption value of redeemable preferred shares for the year ended December 31, 2016 represents the net effect of the accretion to redemption value through the date of automatic conversion into ordinary shares of RMB97,274 and the reduction related to the preference dividends (note 14) declared in respect of those redeemable preferred shares of RMB302,944 for which accretion to redemption was previously recorded.

Note (ii):

For the year ended December 31, 2016, the amount represented the preference dividend declared and paid of RMB343,296 (note 14) upon the IPO less the cumulative dividend on preferred shares amounting to RMB3,509 and RMB7,127 for the year ended December 31, 2014 and 2015, respectively.

Note (iii):

During the year ended December 31, 2017, the Company issued 20,000,000 ordinary shares to its share depository bank which have been and will continue to be used to settle stock option and restricted share awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes and, therefore, have been excluded from the computation of loss per ordinary share. Any ordinary shares not used in the settlement of stock option and restricted share awards will be returned to the Company.

The following securities were excluded from the computation of diluted loss per share as inclusion would have been anti-dilutive.


	Years ended December 31,
	2016	2017	2018

Share options/restricted shares	41,499,862	52,612,856	54,289,936
Convertible bonds payable	93,977,837	—	46,527,600
Total	135,477,699	52,612,856	100,817,536

SEGMENT INFORMATION	12 Months Ended
SEGMENT INFORMATION	Dec. 31, 2018
SEGMENT INFORMATION
SEGMENT INFORMATION	22 SEGMENT INFORMATION The Company has one operating segment, which is the design, build-out and operation of data centers. The Company’s chief operating decision maker is the chief executive officer of the Company who reviews the Company’s consolidated results of operations in assessing performance of and making decisions about resource allocations to this segment. Accordingly, no reportable segment information is presented. During the year ended December 31, 2016, 2017 and 2018, substantially all of the Company’s operations are in the PRC. As of December 31, 2017 and 2018, the long-lived assets amounted to RMB6,695 and RMB742,390, respectively, were located in Hong Kong SAR, and substantially all of the remaining long-lived assets were in the PRC.

MAJOR CUSTOMERS	12 Months Ended
MAJOR CUSTOMERS	Dec. 31, 2018
MAJOR CUSTOMERS
MAJOR CUSTOMERS	23 MAJOR CUSTOMERS During the year ended December 31, 2016, the Company had two contracting customers, which generated over 10% of the Company's total revenues or RMB169,052 and RMB153,863, respectively. During the year ended December 31, 2017, the Company had three contracting customers, which generated over 10% of the Company’s total revenues or RMB318,359, RMB166,384 and RMB163,719, respectively. During the year ended December 31, 2018, the Company had three contracting customers, which generated over 10% of the Company's total revenues or RMB563,698, RMB490,523 and RMB376,881, respectively.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

24 COMMITMENTS AND CONTINGENCIES

(a) Capital commitments

Capital commitments outstanding at December 31, 2017 and 2018 not provided for in the financial statements were as follows:



	As of	As of
	December 31, 2017	December 31, 2018

Contracted for	1,065,551	1,017,325

(b) Lease commitments

The Company’s lease commitments are disclosed in note 12.

In August 2018, the Company and its chief executive officer and chief financial officer were named as defendants in a consolidated class action lawsuit filed in the United States District Court. The complaints in the action allege that the Company’s registration statements contained misstatements or omissions regarding its business, operation, and compliance in violation of the U.S. securities laws. As the case remains in its preliminary stage, the likelihood of any unfavorable outcome or any estimate of the amount or range of any potential loss cannot be reasonably estimated at the issuance of this report. As a result, the Company did not record any liabilities pertaining to this.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2018

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

25 RELATED PARTY TRANSACTIONS

In addition to the related party information disclosed elsewhere in the consolidated financial statements, the Company entered into the following material related party transactions.

In 2016, 2017 and 2018, the related parties of the Company are as follows:

Name of party		Relationship

William Wei Huang (Mr. Huang)		Director and CEO of the Company
STT GDC		Principal ordinary shareholder of the Company
Global Data Solutions Ltd.		Principal ordinary shareholder of the Company
SBCVC Holdings Limited (“SBCVC”)		Principal ordinary shareholder of the Company
CyrusOne Inc.		President and chief executive officer of CyrusOne Inc. is a member of board of director of the Company

(a) Major transactions with related parties


		Years ended December 31,
		2016	2017	2018

Commission income
CyrusOne Inc.	(i)	—	—	140
Preference dividends
STT GDC	(ii)	223,225	—	—
SBCVC		109,665	—	—
Other non-principal preferred shareholders		10,406	—	—
		343,296	—	—


Repayment of a related party loan	(iii)	65,474	—	—

Convertible bonds from a related party	(iii)	327,580	—	—

Conversion of convertible bonds from a related party	(iii)	—	366,958	—

Interest expenses
STT GDC	(iii)	32,245	30,078	—

(b) Balances with related parties

Except the commission receivable from CyrusOne of RMB140 as of December, 31, 2018, as of December 31, 2017 and 2018, the Company did not have any other significant balances with related parties.

Note (i):

During the year ended December 31, 2018, the Company successfully referred customers to CyrusOne Inc. and recognized RMB140 as commission income. The uncollected amount due from CyrusOne Inc. was included in “Accounts Receivable” as of December 31, 2018.

Note (ii):

Upon completion of the IPO on November 7, 2016, the Company paid the preference dividend in an aggregate amount of US$50,812 (RMB343,296), of which US$11,449 (RMB76,502) was paid in cash and US$39,363 (RMB266,794) was paid by issuing an aggregate 31,490,164 ordinary shares to the holders of the preferred shares based on the initial public offering price of US$10.00 per ADS, or US$1.25 per ordinary share.

Note (iii):

During the year ended December 31, 2016, the Company repaid a loan of US$10,000 (RMB64,936) which was borrowed from STT GDC in 2015. The interest expenses on the loan amounted to US$397(RMB2,579).

On January 29, 2016, the Company received the second tranche of US$50,000 (RMB327,580) from STT GDC for subscription of Convertible Bonds due 2019, of which US$10,000 (RMB65,474) was used to settle the outstanding short-term loan of US$10,000 (RMB65,474).

During the years ended December 31, 2016 and 2017, the related interest expense arising from the Convertible Bonds due 2019 subscribed by STT GDC amounted to RMB32,245 and RMB30,078, respectively.

In November 2017, the Convertible Bonds due 2019 and the Accrued Interest thereon due to STT GDC were fully converted into 32,540,515 newly issued Class A ordinary shares at the conversion price of $1.675262. In addition, upon conversion, the accrued but unpaid Cash Interest due to STT GDC of RMB4,991 was relinquished.

PARENT ONLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2018

PARENT ONLY FINANCIAL INFORMATION

PARENT ONLY FINANCIAL INFORMATION

26 PARENT ONLY FINANCIAL INFORMATION

The following condensed parent company financial information of GDS Holdings has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. As of December 31, 2018, there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of GDS Holdings, except for those, which have been separately disclosed in the consolidated financial statements.

Condensed Balance Sheets


	As of December 31,
	2017	2018
Assets

Current assets
Cash	999,194	801,701
Prepaid expenses	6,295	6,716
Other current assets	—	17,940
Total current assets	1,005,489	826,357
Restricted cash	—	15,787
Investment and loans to subsidiaries	3,477,331	7,118,336
Other non-current assets	14,936	—
Total assets	4,497,756	7,960,480

Liabilities and Shareholders' Equity

Current liabilities
Accounts payable	3,597	166
Accrued expenses and other payables	9,973	34,442
Due to subsidiaries	843	913
Total current liabilities	14,413	35,521

Long-term borrowings	—	388,832
Convertible bonds payable	—	2,004,714
Other long-term liabilities	7,831	9,488
Total liabilities	22,244	2,438,555

Shareholders' equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 shares authorized; 873,679,343 and 939,479,307 Class A ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively)	320	341
Additional paid-in capital	5,861,445	7,275,945
Accumulated other comprehensive loss	(200,688)	(139,254)
Accumulated deficit	(1,185,565)	(1,615,107)
Total shareholders' equity	4,475,512	5,521,925
Commitments and contingencies

Total liabilities and shareholders’ equity	4,497,756	7,960,480

Condensed Statements of Operations


	Years ended December 31,
	2016	2017	2018

Net revenue	—	—	—
Cost of revenue	(2,381)	(10,392)	(21,132)
Gross loss	(2,381)	(10,392)	(21,132)

Operating expenses
Selling and marketing expenses	(8,914)	(22,528)	(26,595)
General and administrative expenses	(82,794)	(59,500)	(96,581)
Research and development expenses	(52)	(646)	(949)
Loss from operations	(94,141)	(93,066)	(145,257)

Other income (expenses):
Interest income	16	3,901	14,907
Interest expenses	(97,603)	(90,408)	(48,809)
Equity in loss of subsidiaries	(84,952)	(147,340)	(251,085)
Others, net	268	13	(24)
Loss before income taxes	(276,412)	(326,900)	(430,268)

Income tax expenses	—	—	—
Net loss	(276,412)	(326,900)	(430,268)

Condensed Statements of Comprehensive Loss


	Years ended December 31,
	2016	2017	2018

Net loss	(276,412)	(326,900)	(430,268)
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of nil tax	(130,131)	(8,608)	61,434
Comprehensive loss	(406,543)	(335,508)	(368,834)

Condensed Statements of Cash Flows


	Years ended December 31,
	2016	2017	2018

Operating activities:
Net cash used in operating activities	(62,591)	(58,068)	(33,729)

Investing activities
Deposit paid for a potential acquisition	(15,000)	—	—
Increase of due from subsidiaries	(990,617)	(588,768)	(3,846,353)
Net cash used in investing activities	(1,005,617)	(588,768)	(3,846,353)

Financing activities:
Proceeds from exercise of stock options	—	3,377	16,866
Proceeds from long-term borrowings	—	—	413,433
Payment of issuance cost of borrowings	—	—	(25,751)
Net proceeds from issuance of convertible bonds	327,580	—	1,867,304
Repayment of a related party loan	(65,474)	—	—
Net proceeds from issuance of ordinary shares	1,221,518	649,834	1,283,308
Payment of preferred shares dividends	(76,502)	—	—
Net cash provided by financing activities	1,407,122	653,211	3,555,160
Effect of exchange rate changes on cash and restricted cash	47,787	(37,808)	143,216

Net increase (decrease) in cash and restricted cash	386,701	(31,433)	(181,706)
Cash and restricted cash at beginning of year	643,926	1,030,627	999,194
Cash and restricted cash at end of year	1,030,627	999,194	817,488

Supplemental disclosures of cash flow information
Interest paid	45,495	33,920	24,308

Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted share award	7,539	4,462	6,357
Issuance of ordinary shares to settle preference dividend	266,794	—	—
Conversion of convertible bonds	—	1,106,227	—

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2018
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	27 SUBSEQUENT EVENTS New loan facility In January 2019, the Company entered into a facility agreement with a third-party bank for a total amount of RMB309,000. The term of the facilities is 60 months from January 24, 2019, and the interest agreed under the facility agreement is 6.30% per annum. The Company could be obligated to prepay any loans outstanding immediately if certain conditions were to be triggered. In addition, the loan facilities contain financial covenants that limit certain financial ratios during the relevant period, as defined in the facility agreement. As of March 11, 2019, the Company has drawn down loans of RMB110,323 under such facilities.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

(a) Principles of Consolidation

The following is a summary of the contractual VIE Agreements entered among GDS Investment, the VIEs, and the shareholders of the VIEs.

Levy fines on the Company or confiscate income of the Company;

Revoke or suspend the VIEs' business or operating licenses;

Discontinue or place restrictions or onerous conditions on VIE's operations;

Require the Company to discontinue their operations in the PRC;

Require the Company to undergo a costly and disruptive restructuring;

Take other regulatory or enforcement actions that could be harmful to the Company's business.


	Years ended December 31,
	2016	2017	2018

Net revenue	846,168	1,469,929	2,712,875
Net income (loss)	22,246	44,541	(59,757)
Net cash provided by operating activities (note)	249,715	186,843	739,848
Net cash used in investing activities (note)	(158,681)	(286,476)	(1,063,826)
Net cash provided by (used in) financing activities (note)	304,973	(7,417)	614,575

Use of estimates

(b) Use of estimates

Cash and cash equivalents

Restricted cash

(d) Restricted cash

Fair value of financial instruments

(e) Fair value of financial instruments

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Contract Balances

(f) Contract Balances

Deferred revenue (a contract liability) is recognized when the Company has an unconditional right to a payment before it transfers goods or services to customers.

Property and equipment

(g) Property and equipment

The estimated useful lives are presented below.


Buildings		20 - 30 years
Data center equipment
– Machinery		10 - 20 years
– Other equipment		3 - 5 years
Leasehold improvement		Shorter of the lease term and the estimated useful lives of the assets
Furniture and office equipment		3 - 5 years
Vehicles		5 years

Long-lived assets held for sale

(h) Long-lived assets held for sale

Leases

(i) Leases

As of December 31, 2017 and 2018, assets under capital leases and other financing obligations represent data center buildings and data center equipment.

Asset retirement costs

(j) Asset retirement costs

Asset retirement obligations are recorded in other long-term liabilities. The following table summarizes the activity of the asset retirement obligation liability:


Asset retirement obligations as of January 1, 2016		5,775
Additions		2,942
Accretion expense		588
Asset retirement obligations as of December 31, 2016		9,305
Additions		7,394
Accretion expense		949
Asset retirement obligations as of December 31, 2017		17,648
Additions		16,391
Accretion expense		1,840
Asset retirement obligations as of December 31, 2018		35,879

Intangible assets

(k) Intangible assets

Intangible assets acquired in the acquisition comprised of customer relationships, favorable leases and licenses.

The weighted-average amortization period by major intangible asset class is as follows:


Customer relationships	5-15	years
Favorable leases	13 to 20	years
Licenses	20	years

Licenses are amortized using a straight-line method over the estimated beneficial period.

Prepaid land use rights

(l) Prepaid land use rights

Goodwill

(m) Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in the acquisition that are not individually identified and separately recognized.

Impairment of long-lived assets

(n) Impairment of long-lived assets

Value-added-tax ("VAT")

(o) Value-added-tax (“VAT”)

Derivative financial instruments

(p) Derivative financial instruments

Commitment and contingencies

(q) Commitment and contingencies

Revenue recognition

(r) Revenue recognition

Cash received in advance from customers prior to the delivery of the colocation or managed hosting and cloud services is recorded as deferred revenue.

Cost of revenues

(s) Cost of revenues

Cost of revenues consists primarily of utility costs, depreciation of property and equipment, rental costs, labor costs and other costs directly attributable to the provision of the service revenue.

Research and development and advertising costs

(t) Research and development and advertising costs

Advertising costs amounted to RMB8,942, RMB10,189 and RMB6,332 in 2016, 2017 and 2018, respectively.

Start-up costs

(u) Start-up costs

Government grants

(v) Government grants

Capitalized interest

(w) Capitalized interest

A reconciliation of total interest costs to “Interest expenses” as reported in the consolidated statements of operations for 2016, 2017 and 2018 is as follows:


	Years ended December 31,
	2016	2017	2018

Total interest costs	324,085	466,460	749,730
Less: interest costs capitalized	(58,851)	(54,457)	(93,544)
Interest expenses	265,234	412,003	656,186

Debt issuance costs

(x) Debt issuance costs

Debt issuance costs are capitalized and are amortized over the life of the related debts based on the effective interest method. Such amortization is included as a component of interest expense.

Unamortised debt issuance costs of RMB134,395 and RMB203,779 are presented as a reduction of debt as of December 31, 2017 and 2018, respectively.

Income tax

(y) Income tax

Share-based compensation

(z) Share-based compensation

For further information on share-based compensation, see Note 17 below.

Employee benefits

(aa) Employee benefits

Foreign currency translation and foreign currency risks

(bb) Foreign currency translation and foreign currency risks

The functional currency of GDS Holdings is the USD, whereas the functional currency of its PRC subsidiaries and consolidated VIEs is the RMB.

Translation adjustments are reported in other comprehensive income and accumulated in the translation adjustment component of equity until the sale or liquidation of the foreign entity.


	RMB	USD	HKD	JPY	EUR	SGD
In PRC	1,102,939	37,988	—	—	—	—
In Hong Kong SAR	31,755	44,195	7,948	19,098	153	—
In US	—	81,483	—	—	—	—
In Singapore	—	2,531	—	—	—	12
Total in original currency	1,134,694	166,197	7,948	19,098	153	12
RMB equivalent	1,134,694	1,140,645	6,964	1,182	1,204	59

Concentration of credit risk

(cc) Concentration of credit risk

Earnings (loss) per share

(dd) Earnings (loss) per share

Changes in accounting principle

(ee) Changes in accounting principle

Consolidated Statement of Operations:


			Amounts
	Year ended		without
	December		adoption
	31, 2018	Adjustments	of ASC 606

Net revenue	2,792,077	1,569	2,793,646
Cost of revenue	(2,169,636)	(843)	(2,170,479)
Income from operations	168,355	726	169,081
Net loss	(430,268)	726	(429,542)
Loss per ordinary share
Basic and diluted	(0.43)	0.00	(0.43)

Recently Issued Accounting Standards

(ff) Recently Issued Accounting Standards

On adoption, the Company currently expects to:

Recognize additional operating lease liabilities and ROU assets of approximately RMB483,607 and RMB513,961, and derecognize intangible assets of RMB44,552.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of net revenue and net income , operating, investing and financing cash flows of VIEs


	Years ended December 31,
	2016	2017	2018

Net revenue	846,168	1,469,929	2,712,875
Net income (loss)	22,246	44,541	(59,757)
Net cash provided by operating activities (note)	249,715	186,843	739,848
Net cash used in investing activities (note)	(158,681)	(286,476)	(1,063,826)
Net cash provided by (used in) financing activities (note)	304,973	(7,417)	614,575

Schedule of estimated useful lives of property and equipment


Buildings		20 - 30 years
Data center equipment
– Machinery		10 - 20 years
– Other equipment		3 - 5 years
Leasehold improvement		Shorter of the lease term and the estimated useful lives of the assets
Furniture and office equipment		3 - 5 years
Vehicles		5 years

Schedule of asset retirement obligations


Asset retirement obligations as of January 1, 2016		5,775
Additions		2,942
Accretion expense		588
Asset retirement obligations as of December 31, 2016		9,305
Additions		7,394
Accretion expense		949
Asset retirement obligations as of December 31, 2017		17,648
Additions		16,391
Accretion expense		1,840
Asset retirement obligations as of December 31, 2018		35,879

Schedule of weighted-average amortization period of acquired intangible assets


Customer relationships	5-15	years
Favorable leases	13 to 20	years
Licenses	20	years

Schedule of reconciliation of total interest costs to interest expenses


	Years ended December 31,
	2016	2017	2018

Total interest costs	324,085	466,460	749,730
Less: interest costs capitalized	(58,851)	(54,457)	(93,544)
Interest expenses	265,234	412,003	656,186

Schedule of cash and restricted cash deposited in major financial institutions located in PRC and Hong Kong, US and Singapore financial institutions


	RMB	USD	HKD	JPY	EUR	SGD
In PRC	1,102,939	37,988	—	—	—	—
In Hong Kong SAR	31,755	44,195	7,948	19,098	153	—
In US	—	81,483	—	—	—	—
In Singapore	—	2,531	—	—	—	12
Total in original currency	1,134,694	166,197	7,948	19,098	153	12
RMB equivalent	1,134,694	1,140,645	6,964	1,182	1,204	59

Schedule of impact for adoption of ASC 606 to the Company's consolidated statement of operations


			Amounts
	Year ended		without
	December		adoption
	31, 2018	Adjustments	of ASC 606

Net revenue	2,792,077	1,569	2,793,646
Cost of revenue	(2,169,636)	(843)	(2,170,479)
Income from operations	168,355	726	169,081
Net loss	(430,268)	726	(429,542)
Loss per ordinary share
Basic and diluted	(0.43)	0.00	(0.43)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

CASH AND RESTRICTED CASH (Tables)

12 Months Ended

Dec. 31, 2018

CASH AND RESTRICTED CASH

Schedule of reconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statements of cash flows



	As at	As at
	December 31, 2017	December 31, 2018

Cash	1,873,446	2,161,622
Restricted cash - current assets	10,837	87
Restricted cash - non-current assets	63,317	123,039

Total cash and restricted cash shown in the consolidated statements of cash flows	1,947,600	2,284,748

CONTRACT BALANCES (Tables)

12 Months Ended

Dec. 31, 2018

CONTRACT BALANCES

Schedule of accounts receivable, net


	As of December 31,
	2017	2018

Accounts receivable	364,654	541,355
Less: allowance for doubtful accounts	—	(241)
Accounts receivable, net	364,654	541,114

Including:
- Current portion	364,654	536,842
- Non-current portion	—	4,272

Schedule of allowance for doubtful accounts


	Years ended December 31,
	2016	2017	2018

Balance at the beginning of the year	2,156	—	—
Allowance made during the year	—	—	241
Reversal during the year	(2,156)	—	—
Balance at the end of the year	—	—	241

Schedule of deferred revenue


		Deferred revenue

Beginning balance as of January 1, 2018		55,609
Closing balance as of December 31, 2018		73,077

Increase		17,468

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2018

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment


	As of	As of
	December 31, 2017	December 31, 2018

At cost:
Buildings	2,693,843	4,382,469
Data center equipment	2,202,247	4,225,963
Leasehold improvement	2,243,691	4,239,601
Furniture and office equipment	36,762	45,057
Vehicles	2,972	4,086
	7,179,515	12,897,176
Less: Accumulated depreciation	(965,758)	(1,534,368)
	6,213,757	11,362,808
Construction in progress	1,951,844	2,632,137
Property and equipment, net	8,165,601	13,994,945

Schedule of property and equipment under capital lease and other financing arrangement


	As of	As of
	December 31, 2017	December 31, 2018

At cost (note):
Buildings	2,488,522	4,557,081
Data center equipment	192,946	300,960
	2,681,468	4,858,041
Less: Accumulated depreciation	(141,948)	(287,375)
	2,539,520	4,570,666

Schedule of depreciation of property and equipment


	Years ended December 31,
	2016	2017	2018

Cost of revenue	206,724	345,025	674,560
General and administrative expenses	5,425	6,902	7,319
Research and development expenses	724	553	572
	212,873	352,480	682,451

INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2018

INTANGIBLE ASSETS, NET

Schedule of Intangible assets


		As of	As of
	Note	December 31, 2017	December 31, 2018

Customer relationships	8	379,322	532,322
Favorable leases	8	15,500	49,500
Licenses		6,000	6,000
		400,822	587,822
Less: accumulated amortization		(52,356)	(105,330)
Intangible assets, net		348,466	482,492

Schedule of Estimated future amortization expense


Fiscal year ending December 31,
2019		61,204
2020		53,054
2021		53,054
2022		53,054
2023		51,512
Thereafter		210,614
Total		482,492

PREPAID LAND USE RIGHTS (Tables)

12 Months Ended

Dec. 31, 2018

PREPAID LAND USE RIGHTS

Schedule of prepaid land use rights


	As of December 31,
	2017	2018

Prepaid land use rights	28,370	765,114
Less: Accumulated amortization	(2,125)	(8,157)
Prepaid land use rights, net	26,245	756,957

BUSINESS COMBINATIONS (Tables)

12 Months Ended

Dec. 31, 2018

BUSINESS COMBINATIONS

Schedule of movement of goodwill


	As of December 31,
	2017	2018

Balance at the beginning of the year	1,341,087	1,570,755
Addition during the year	229,668	181,215
Balance at end of year	1,570,755	1,751,970

Weiteng Construction/Guangzhou 1

BUSINESS COMBINATIONS

Schedule of the identifiable assets acquired and liabilities assumed in the business combination


	Note
Fair value of consideration		129,500
Effective settlement of pre-existing relationships upon consolidation	(i)	43,161
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(1,237)
Property and equipment	(ii)	(281,437)
Identifiable intangible assets	(iii)	(59,500)
Other assets		(25,363)
Accounts payable		131,114
Capital lease and other financing obligations, current		12,097
Capital lease and other financing obligations, non-current		68,584
Deferred tax liabilities		21,143
Other liabilities		8,361
Total identifiable net assets		(126,238)
Goodwill	(iv)	46,423

Note (i):

Note (ii):

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB59,500 with an estimated useful life of 7 to 8 years.

Note (iv):

Target Group, Shenzhen 5

BUSINESS COMBINATIONS

Schedule of the identifiable assets acquired and liabilities assumed in the business combination


	Note
Fair value of consideration	(i)	294,491
Effective settlement of pre-existing relationships upon consolidation	(ii)	6,025
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(11,153)
Property and equipment	(iii)	(821,405)
Identifiable intangible assets	(iv)	(176,500)
Other assets		(59,520)
Accounts payable		219,207
Capital lease and other financing obligations, current		23,156
Capital lease and other financing obligations, non-current		363,380
Long-term borrowings		217,790
Deferred tax liabilities		45,931
Other liabilities		55,299
Total identifiable net assets		(143,815)
Goodwill	(v)	156,701

Note (i):

The fair value of consideration represents the present value of the purchase price of RMB312,000.

Note (ii):

Prior to the acquisition, the Company had other receivables from the target group of RMB6,025, which was effectively settled with the seller upon completion of the acquisition.

Note (iii):

Note (iv):

Identifiable intangible assets acquired consisted of customer relationships of RMB176,500 with an estimated useful life of 14.4 years.

Note (v):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

Target Group Guangzhou 2

BUSINESS COMBINATIONS

Schedule of the identifiable assets acquired and liabilities assumed in the business combination


	Note
Fair value of consideration		233,984
Effective settlement of pre-existing relationships upon consolidation	(i)	(1,807)
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(10,144)
Accounts receivable		(25,177)
Property and equipment	(ii)	(319,943)
Identifiable intangible assets	(iii)	(98,500)
Other assets		(14,135)
Accounts payable		56,431
Capital lease and other financing obligations, current		5,958
Capital lease and other financing obligations, non-current		101,875
Short-term borrowings		50,750
Long-term borrowings		52,999
Deferred tax liabilities		35,097
Other liabilities		5,579
Total identifiable net assets		(159,210)
Goodwill	(iv)	72,967

Note (i):

Prior to the acquisition, the Company had payables to the target group of RMB1,807, which was effectively settled with the seller upon completion of the acquisition.

Note (ii):

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB98,500 with an estimated useful life of 11.8 years.

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

Target Group Guangzhou 3

BUSINESS COMBINATIONS

Schedule of the identifiable assets acquired and liabilities assumed in the business combination


	Note
Fair value of consideration	(i)	247,937
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(62)
Accounts receivable		(13,995)
Property and equipment	(ii)	(780,312)
Identifiable intangible assets	(iii)	(130,000)
Other assets		(43,039)
Accounts payable		471,532
Capital lease and other financing obligations, non-current		282,051
Short-term borrowings		47,580
Long-term borrowings		30,000
Deferred tax liabilities		26,503
Other liabilities		2,849
Total identifiable net assets		(106,893)
Goodwill	(iv)	141,044

Note (i):

The fair value of consideration represents the present value of the purchase price of RMB262,244.

Note (ii):

Property and equipment acquired included properties acquired under capital lease of RMB291,000, data center equipment of RMB254,241 and leasehold improvement of RMB235,071.

Note (iii):

Identifiable intangible assets acquired consisted of customer relationships of RMB130,000 with an estimated useful life of 7 years.

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

Shanghai 11

BUSINESS COMBINATIONS

Schedule of the identifiable assets acquired and liabilities assumed in the business combination


	Note
Fair value of consideration	(i)	319,119
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		(404)
Property and equipment	(ii)	(233,405)
Identifiable intangible assets	(iii)	(57,000)
Other assets		(94,647)
Accounts payable		91,136
Deferred tax liabilities		9,995
Other liabilities		5,377
Total identifiable net assets		(278,948)
Goodwill	(iv)	40,171

Note (i):

The fair value of the consideration represents the present value of the purchase price of RMB320,000.

Note (ii):

Property and equipment acquired included data center equipment of RMB70,241 and leasehold improvement of RMB163,164.

Note (iii):

Note (iv):

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is assigned to the design, build-out and operation of data centers reporting unit. Goodwill primarily represents the expected synergies from combining operations of the target group with those of the Company and intangible assets that do not qualify for separate recognition and is not deductible for tax purposes. In accordance with ASC 350, goodwill is not amortized but is tested for impairment.

LOANS AND BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2018

LOANS AND BORROWINGS

Schedule of borrowings


	As of	As of
	December 31, 2017	December 31, 2018

Short-term borrowings	462,946	684,788
Current portion of long-term borrowings	327,538	598,532
Sub-total	790,484	1,283,320
Long-term borrowings, excluding current portion	3,459,765	5,203,708
Total loans and borrowings	4,250,249	6,487,028

Schedule of short-term borrowings


	As of	As of
	December 31, 2017	December 31, 2018

Unsecured short-term loans and borrowings	230,000	30,000
Secured short-term loans and borrowings	232,946	654,788
	462,946	684,788

Schedule of assets to secure the short-term borrowings


	As of	As of
	December 31, 2017	December 31, 2018

Accounts receivable (Note)	11,615	18,796
Property and equipment, net	—	203,290
	11,615	222,086

Note: The Company applied accounts receivable generated from certain data center operation as collateral to secure borrowings.

Schedule of long-term borrowings


	As of	As of
	December 31, 2017	December 31, 2018

Unsecured long-term loans and borrowings	167,250	85,250
Secured long-term loans and borrowings	3,620,053	5,716,990
	3,787,303	5,802,240

Schedule of assets to secure the long-term borrowings


	As of	As of
	December 31, 2017	December 31, 2018

Accounts receivable (Note)	124,428	347,142
Property and equipment, net	698,922	1,513,446
Prepaid land use rights, net	6,091	13,241
	829,441	1,873,829

Note: The Company applied accounts receivable generated from certain data center operation as collateral to secure borrowings.

Schedule of aggregate maturities of the long-term loans and borrowings



Twelve-months ending December 31,		Long-term borrowings
2019		598,532
2020		725,727
2021		1,759,695
2022		1,087,955
2023		1,235,936
Thereafter		394,395
		5,802,240

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 2
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
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-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

ACCRUED EXPENSES AND OTHER PAYABLES (Tables)

12 Months Ended

Dec. 31, 2018

ACCRUED EXPENSES AND OTHER PAYABLES

Summary of Accrued expenses and other payables


	As of December 31,
	2017	2018

Accrued interest expenses	21,114	32,902
Accrued debt issuance costs	34,194	618
Income tax payable (note 19)	20,122	43,898
Consideration payables for acquisitions (note 8)	159,489	192,367
Deferred government grants	—	4,800
Accrued payroll and welfare benefits	47,432	77,134
Accrued professional fees	15,725	32,076
Other accrued operating expenses	38,118	52,618
Other payables	32,430	40,151
	368,624	476,564

LEASE (Tables)

12 Months Ended

Dec. 31, 2018

LEASE

Schedule of capital lease and other financing obligations


	December 31, 2017			December 31, 2018
	Capital	Other			Other
	lease	financing		Capital lease	financing
	obligations	obligations	Total	obligations	obligations	Total
Within 1 year	212,780	45,007	257,787	352,524	37,150	389,674
After 1 year but within 2 years	220,293	63,151	283,444	453,891	80,276	534,167
After 2 years but within 3 years	316,475	75,685	392,160	286,468	107,497	393,965
After 3 years but within 4 years	144,052	76,678	220,730	282,627	111,616	394,243
After 4 years but within 5 years	141,910	80,832	222,742	292,481	113,667	406,148
After 5 years	1,900,744	1,469,318	3,370,062	3,926,028	1,878,098	5,804,126
Total	2,936,254	1,810,671	4,746,925	5,594,019	2,328,304	7,922,323

Less total future interest	(1,209,120)	(905,590)	(2,114,710)	(2,300,484)	(1,160,108)	(3,460,592)
Less: estimated building costs	—	(231,228)	(231,228)	—	(160,506)	(160,506)
Present value of lease and other financing obligations	1,727,134	673,853	2,400,987	3,293,535	1,007,690	4,301,225
Including:
Current portion			97,943			166,898
Non-current portion			2,303,044			4,134,327

Schedule of future minimum operating lease payments


Twelve-months ending December 31,
2019		95,082
2020		69,541
2021		48,072
2022		41,758
2023		40,952
Thereafter		407,070
Total		702,475

OTHER LONG-TERM LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2018

OTHER LONG-TERM LIABILITIES

Schedule of other long-term liabilities


	As of	As of
	December 31, 2017	December 31, 2018

Consideration payable for acquisitions (Note 8)	120,881	79,083
Payables for purchase of property and equipment	195,749	206,591
Deferred government grants	16,789	9,771
Asset retirement obligations	17,648	35,879
Others	7,831	9,488
Total	358,898	340,812

REDEEMABLE PREFERRED SHARES (Tables)

12 Months Ended

Dec. 31, 2018

REDEEMABLE PREFERRED SHARES

Schedule of movement of the redeemable preferred shares


	Series A		Series A*		Series B		Series B1		Series B2		Series B4		Series B5		Series C		Total
	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000	Shares	RMB’000
Balance at January 1, 2016	29,635,045	107,428	6,916,645	39,575	2,576,483	16,789	11,527,742	80,148	10,435,639	67,419	14,076,620	87,477	35,393,262	258,038	238,526,241	1,738,440	349,087,677	2,395,314
Changes in redemption value	—	(39,098)	—	—	—	(3,921)	—	—	—	—	—	—	—	(21,016)	—	(141,635)	—	(205,670)
Conversion to ordinary shares	(29,635,045)	(72,965)	(6,916,645)	(43,564)	(2,576,483)	(13,600)	(11,527,742)	(88,221)	(10,435,639)	(74,209)	(14,076,620)	(96,287)	(35,393,262)	(248,455)	(238,526,241)	(1,673,831)	(349,087,677)	(2,311,132)
Foreign exchange impact	—	4,635	—	3,989	—	732	—	8,073	—	6,790	—	8,810	—	11,433	—	77,026	—	121,488
Balance at December 31, 2016	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2018

SHARE-BASED COMPENSATION

Summary of the share option activities


			Weighted
			average
		Weighted	grant-date
	Number	average	fair value
	of options	exercise price	per option
		(RMB)	(RMB)
Options outstanding at January 1,2016	17,193,534	4.8	1.9
Granted	11,551,507	5.2	4.9
Forfeited	(155,259)	4.8	1.9
Options outstanding at December 31, 2016	28,589,782	5.2	3.2

Granted	333,334	5.2	10.6
Exercised	(816,880)	5.3	1.9
Forfeited	(19,000)	5.3	1.9
Options outstanding at December 31, 2017	28,087,236	5.1	3.2

Granted	500,000	5.0	31.2
Exercised	(3,614,464)	5.2	4.5
Forfeited	(193,340)	5.0	6.2
Options outstanding at December 31, 2018	24,779,432	5.3	2.2

Options vested and expect to vest at December 31, 2018	24,779,432	5.3	2.2

Summary of information with respect to stock options outstanding and stock options exercisable

The following table summarizes information with respect to stock options outstanding and stock options exercisable as of December 31, 2018:


		Weighted
		average	Weighted
	Number	remaining	average
	of shares	contractual life	exercise price
		(years)	(RMB)
Options outstanding and exercisable	24,779,432	0.7	5.3

Assumptions used to estimate fair value of stock options


Grant date:	May 2016
Risk-free rate of return	1.98	%
Volatility	28.50	%
Expected dividend yield	—
Exercise multiple	2.20
Fair value of underlying ordinary share	US$1.51 (RMB 9.8)

Expected term	5 years

Summary of the restricted share activity


		Weighted average grant-
	Number of	date fair value per share
	Shares	(RMB)

Unvested at January 1, 2016	—
Granted	13,787,480	6.1
Vested	(877,400)	8.6
Forfeited	—	—

Unvested at December 31, 2016	12,910,080	6.0
Granted	13,977,060	5.2
Vested	(2,123,120)	8.5
Forfeited	(238,400)	6.8

Unvested at December 31, 2017	24,525,620	5.3
Granted	13,202,512	14.5
Vested	(7,326,620)	6.0
Forfeited	(891,008)	5.9

	29,510,504	9.3

Summary of share-based compensation expenses


	Years ended December 31,
	2016	2017	2018

Costs of revenue	2,114	9,941	18,008
Selling and marketing expenses	6,590	18,390	25,213
General and administrative expenses	55,409	30,866	61,707
Research and development expenses	52	646	949
Total share-based compensation expenses	64,165	59,843	105,877

Restricted shares

SHARE-BASED COMPENSATION

Assumptions used to estimate fair value of the restricted shares


Grant date:	December 2016		July 2017		August 2018
Risk-free rate of return	0.68 - 1.65	%	1.29 - 1.63	%	2.047 - 2.418	%
Volatility	22.35 - 24.80	%	20.43 - 21.48	%	71.85	%
Expected dividend yield	—		—		—
Share price at grant date	US$1.24		US$1.191		US$3.125
	(RMB8.6)		(RMB8.0)		(RMB21.3)
Expected term	1 - 5 years		2 - 4 years		2 - 4 years

REVENUE (Tables)

12 Months Ended

Dec. 31, 2018

REVENUE

Schedule of Net revenue


	Years ended December 31,
	2016	2017	2018

Colocation services	770,145	1,219,086	2,104,259
Managed service and others	232,870	372,774	655,231
Service revenue	1,003,015	1,591,860	2,759,490
Equipment sales	52,945	24,306	32,587
Total	1,055,960	1,616,166	2,792,077

INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2018

INCOME TAX

Schedule of operating results before income tax and the provision for income taxes by tax jurisdictions


	Years ended December 31,
	2016	2017	2018
Loss before income taxes:
PRC	144,158	130,961	237,232
Other jurisdictions	140,569	202,015	202,427
Total loss before income taxes	284,727	332,976	439,659

Current tax expenses:
PRC	311	5,546	27,206
Other jurisdictions	1,998	—	—
Total current tax expenses	2,309	5,546	27,206

Deferred tax benefits:
PRC	(10,935)	(11,683)	(36,597)
Other jurisdictions	311	61	—
Total deferred tax benefits	(10,624)	(11,622)	(36,597)

Total income taxes benefits	(8,315)	(6,076)	(9,391)

Schedule of reconciliation of differences between PRC statutory tax rate and effective tax rate


	Years ended December 31,
	2016		2017		2018

PRC enterprise income tax rate	25.0	%	25.0	%	25.0	%
Non-PRC entities not subject to income tax	(13.7)	%	(14.8)	%	(9.2)	%
Tax differential for entities in non-PRC jurisdiction	0.5	%	(0.8)	%	(1.2)	%
Tax effect of current year permanent differences	(0.3)	%	0.0	%	(1.3)	%
Expiration of unused net operating losses	(2.9)	%	(2.6)	%	(10.1)	%
Change in valuation allowance	(5.5)	%	(5.2)	%	(1.0)	%
Return to provision adjustment on permanent differences	(0.2)	%	0.2	%	(0.1)	%
	2.9	%	1.8	%	2.1	%

Schedule of components of deferred tax assets and liabilities


	As of December 31,
	2017	2018
Deferred tax assets:
Allowance for accounts receivable	—	48
Government subsidy	4,197	3,643
Accrued expenses	14,024	26,867
Asset retirement obligation	4,412	8,970
Net operating loss carry forwards	170,267	192,505
Total gross deferred tax assets	192,900	232,033
Valuation allowance on deferred tax assets	(152,241)	(155,852)
Deferred tax assets, net of valuation allowance	40,659	76,181

Deferred tax liabilities:
Property and equipment	(52,417)	(80,544)
Intangible assets	(82,305)	(116,156)
Prepaid land use rights	(1,693)	(1,653)
Obligation under capital lease and other financing obligations	(14,216)	(12,732)
Total deferred tax liabilities	(150,631)	(211,085)

Net deferred tax liabilities	(109,972)	(134,904)

Analysis as:
Deferred tax assets	14,305	36,974
Deferred tax liabilities	(124,277)	(171,878)
Net deferred tax liabilities	(109,972)	(134,904)

Schedule of movement of the valuation allowance for the deferred tax assets


	Years ended December 31,
	2016	2017	2018

Balance at the beginning of the year	118,952	134,935	152,241
Increase during the year	15,983	17,306	3,611
Balance at the end of the year	134,935	152,241	155,852

LOSS PER ORDINARY SHARE (Tables)

12 Months Ended

Dec. 31, 2018

LOSS PER ORDINARY SHARE

Schedule of computation of basic and diluted loss per share


	Years ended December 31,
	2016	2017	2018

Net loss	(276,412)	(326,900)	(430,268)

Change in redemption value of redeemable preferred shares (i)	205,670	—	—
Dividend on preferred shares (ii)	(332,660)	—	—
Net loss attributable to ordinary shareholders	(403,402)	(326,900)	(430,268)

Weighted average number of ordinary shares outstanding-basic and diluted (iii)	299,093,937	784,566,371	990,255,959

Loss per ordinary share - basic and diluted	(1.35)	(0.42)	(0.43)

Note (i):

Note (ii):

Note (iii):

Schedule of securities excluded from the computation of diluted loss per share


	Years ended December 31,
	2016	2017	2018

Share options/restricted shares	41,499,862	52,612,856	54,289,936
Convertible bonds payable	93,977,837	—	46,527,600
Total	135,477,699	52,612,856	100,817,536

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES

Schedule of capital commitments outstanding not provided for in the financial statements



	As of	As of
	December 31, 2017	December 31, 2018

Contracted for	1,065,551	1,017,325

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2018

RELATED PARTY TRANSACTIONS

Schedule of material related party relationship

In 2016, 2017 and 2018, the related parties of the Company are as follows:

Name of party		Relationship

William Wei Huang (Mr. Huang)		Director and CEO of the Company
STT GDC		Principal ordinary shareholder of the Company
Global Data Solutions Ltd.		Principal ordinary shareholder of the Company
SBCVC Holdings Limited (“SBCVC”)		Principal ordinary shareholder of the Company
CyrusOne Inc.		President and chief executive officer of CyrusOne Inc. is a member of board of director of the Company

Schedule of major transactions with related parties


		Years ended December 31,
		2016	2017	2018

Commission income
CyrusOne Inc.	(i)	—	—	140
Preference dividends
STT GDC	(ii)	223,225	—	—
SBCVC		109,665	—	—
Other non-principal preferred shareholders		10,406	—	—
		343,296	—	—


Repayment of a related party loan	(iii)	65,474	—	—

Convertible bonds from a related party	(iii)	327,580	—	—

Conversion of convertible bonds from a related party	(iii)	—	366,958	—

Interest expenses
STT GDC	(iii)	32,245	30,078	—

Note (i):

Note (ii):

Upon completion of the IPO on November 7, 2016, the Company paid the preference dividend in an aggregate amount of US$50,812 (RMB343,296), of which US$11,449 (RMB76,502) was paid in cash and US$39,363 (RMB266,794) was paid by issuing an aggregate 31,490,164 ordinary shares to the holders of the preferred shares based on the initial public offering price of US$10.00 per ADS, or US$1.25 per ordinary share.

Note (iii):

During the year ended December 31, 2016, the Company repaid a loan of US$10,000 (RMB64,936) which was borrowed from STT GDC in 2015. The interest expenses on the loan amounted to US$397(RMB2,579).

During the years ended December 31, 2016 and 2017, the related interest expense arising from the Convertible Bonds due 2019 subscribed by STT GDC amounted to RMB32,245 and RMB30,078, respectively.

PARENT ONLY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2018

PARENT ONLY FINANCIAL INFORMATION

Schedule of condensed financial statements

Condensed Balance Sheets


	As of December 31,
	2017	2018
Assets

Current assets
Cash	999,194	801,701
Prepaid expenses	6,295	6,716
Other current assets	—	17,940
Total current assets	1,005,489	826,357
Restricted cash	—	15,787
Investment and loans to subsidiaries	3,477,331	7,118,336
Other non-current assets	14,936	—
Total assets	4,497,756	7,960,480

Liabilities and Shareholders' Equity

Current liabilities
Accounts payable	3,597	166
Accrued expenses and other payables	9,973	34,442
Due to subsidiaries	843	913
Total current liabilities	14,413	35,521

Long-term borrowings	—	388,832
Convertible bonds payable	—	2,004,714
Other long-term liabilities	7,831	9,488
Total liabilities	22,244	2,438,555

Shareholders' equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 shares authorized; 873,679,343 and 939,479,307 Class A ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively)	320	341
Additional paid-in capital	5,861,445	7,275,945
Accumulated other comprehensive loss	(200,688)	(139,254)
Accumulated deficit	(1,185,565)	(1,615,107)
Total shareholders' equity	4,475,512	5,521,925
Commitments and contingencies

Total liabilities and shareholders’ equity	4,497,756	7,960,480

Condensed Statements of Operations


	Years ended December 31,
	2016	2017	2018

Net revenue	—	—	—
Cost of revenue	(2,381)	(10,392)	(21,132)
Gross loss	(2,381)	(10,392)	(21,132)

Operating expenses
Selling and marketing expenses	(8,914)	(22,528)	(26,595)
General and administrative expenses	(82,794)	(59,500)	(96,581)
Research and development expenses	(52)	(646)	(949)
Loss from operations	(94,141)	(93,066)	(145,257)

Other income (expenses):
Interest income	16	3,901	14,907
Interest expenses	(97,603)	(90,408)	(48,809)
Equity in loss of subsidiaries	(84,952)	(147,340)	(251,085)
Others, net	268	13	(24)
Loss before income taxes	(276,412)	(326,900)	(430,268)

Income tax expenses	—	—	—
Net loss	(276,412)	(326,900)	(430,268)

Condensed Statements of Comprehensive Loss


	Years ended December 31,
	2016	2017	2018

Net loss	(276,412)	(326,900)	(430,268)
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of nil tax	(130,131)	(8,608)	61,434
Comprehensive loss	(406,543)	(335,508)	(368,834)

Condensed Statements of Cash Flows


	Years ended December 31,
	2016	2017	2018

Operating activities:
Net cash used in operating activities	(62,591)	(58,068)	(33,729)

Investing activities
Deposit paid for a potential acquisition	(15,000)	—	—
Increase of due from subsidiaries	(990,617)	(588,768)	(3,846,353)
Net cash used in investing activities	(1,005,617)	(588,768)	(3,846,353)

Financing activities:
Proceeds from exercise of stock options	—	3,377	16,866
Proceeds from long-term borrowings	—	—	413,433
Payment of issuance cost of borrowings	—	—	(25,751)
Net proceeds from issuance of convertible bonds	327,580	—	1,867,304
Repayment of a related party loan	(65,474)	—	—
Net proceeds from issuance of ordinary shares	1,221,518	649,834	1,283,308
Payment of preferred shares dividends	(76,502)	—	—
Net cash provided by financing activities	1,407,122	653,211	3,555,160
Effect of exchange rate changes on cash and restricted cash	47,787	(37,808)	143,216

Net increase (decrease) in cash and restricted cash	386,701	(31,433)	(181,706)
Cash and restricted cash at beginning of year	643,926	1,030,627	999,194
Cash and restricted cash at end of year	1,030,627	999,194	817,488

Supplemental disclosures of cash flow information
Interest paid	45,495	33,920	24,308

Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted share award	7,539	4,462	6,357
Issuance of ordinary shares to settle preference dividend	266,794	—	—
Conversion of convertible bonds	—	1,106,227	—

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
VIEs financial information
Net revenue	¥ 2,792,077	¥ 1,616,166	¥ 1,055,960
Net income (loss)	(430,268)	(326,900)	(276,412)
Net cash provided by operating activities	(12,910)	(167,816)	(128,980)
Net cash used in investing activities	(4,733,050)	(2,005,054)	(1,147,064)
Net cash provided by (used in) financing activities	4,876,806	2,355,728	2,128,614
VIEs
VIEs financial information
Loans to be issued to shareholders for equity contribution	¥ 310,100
Loans issued to shareholders for equity contribution, Prior notice period	30 days
Net revenue	¥ 2,712,875	1,469,929	846,168
Net income (loss)	(59,757)	44,541	22,246
Net cash provided by operating activities	739,848	186,843	249,715
Net cash used in investing activities	(1,063,826)	(286,476)	(158,681)
Net cash provided by (used in) financing activities	614,575	(7,417)	304,973
Costs for outsourcing and other services provided by other entities within the Company	¥ 1,260,481	658,617	343,271
VIEs \| ASU 2016-18
VIEs financial information
Net cash provided by operating activities		3,663	¥ 10,091
Net cash provided by (used in) financing activities		¥ 20,675

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and equipment
Depreciation	¥ 682,451	¥ 352,480	¥ 212,873
Buildings \| Minimum
Property and equipment
Estimated useful life (in years)	20 years
Buildings \| Maximum
Property and equipment
Estimated useful life (in years)	30 years
Machinery \| Minimum
Property and equipment
Estimated useful life (in years)	10 years
Machinery \| Maximum
Property and equipment
Estimated useful life (in years)	20 years
Other equipment \| Minimum
Property and equipment
Estimated useful life (in years)	3 years
Other equipment \| Maximum
Property and equipment
Estimated useful life (in years)	5 years
Furniture and office equipment \| Minimum
Property and equipment
Estimated useful life (in years)	3 years
Furniture and office equipment \| Maximum
Property and equipment
Estimated useful life (in years)	5 years
Vehicles
Property and equipment
Estimated useful life (in years)	5 years
Construction in progress
Property and equipment
Depreciation	¥ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Asset retirement costs (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Activity of the asset retirement obligation liability
Asset retirement obligations at beginning of the period	¥ 17,648	¥ 9,305	¥ 5,775
Additions	16,391	7,394	2,942
Accretion expense	1,840	949	588
Asset retirement obligations at end of the period	¥ 35,879	¥ 17,648	¥ 9,305

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets (Details)	12 Months Ended
	Dec. 31, 2018
Customer relationships \| Minimum
Intangible assets
Weighted-average amortization period (in years)	5 years
Customer relationships \| Maximum
Intangible assets
Weighted-average amortization period (in years)	15 years
Favorable leases \| Minimum
Intangible assets
Weighted-average amortization period (in years)	13 years
Favorable leases \| Maximum
Intangible assets
Weighted-average amortization period (in years)	20 years
Licenses
Intangible assets
Weighted-average amortization period (in years)	20 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Prepaid land use rights (Details) - Prepaid land use rights	12 Months Ended
	Dec. 31, 2018
Minimum
Prepaid land use rights
Amortization based on remaining terms (in years)	28 years
Maximum
Prepaid land use rights
Amortization based on remaining terms (in years)	43 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment losses	¥ 0	¥ 0	¥ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long-lived assets (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment losses for long-lived assets	¥ 0	¥ 0	¥ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Value-added-tax ("VAT") (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Value-added-tax ("VAT")
VAT recoverable	¥ 163,476	¥ 112,067
VAT recoverable	488,526	290,065
Current assets
Value-added-tax ("VAT")
VAT recoverable	163,476	112,067
Noncurrent assets
Value-added-tax ("VAT")
VAT recoverable	488,526	290,065
Accrued expenses and other payables
Value-added-tax ("VAT")
VAT payables	¥ 11,350	¥ 11,213

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details)	12 Months Ended
	Dec. 31, 2018
Minimum \| Managed cloud services
Revenue recognition
Contract service period	1 year
Maximum \| Managed cloud services
Revenue recognition
Contract service period	5 years
Maximum \| Consulting services
Revenue recognition
Contract service period	1 year

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Research and development and advertising costs, Start-up costs, Government grants, Capitalized interest and Debt issuance cost (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Research and development and advertising costs
Research and development expenses	¥ 13,915	¥ 7,261	¥ 9,100
Advertising costs	6,332	10,189	8,942
Government grants
Deferred government grants	9,771	16,789
Deferred government grants, current	4,800
Capitalized interest
Total interest costs	749,730	466,460	324,085
Less: interest costs capitalized	(93,544)	(54,457)	(58,851)
Interest expenses	656,186	412,003	265,234
Debt issuance cost
Unamortised debt issuance costs	203,779	134,395
Other long-term liabilities
Government grants
Deferred government grants	9,771	16,789
Accrued expenses and other payables
Government grants
Deferred government grants, current	4,800
General and administrative expenses
Start-up costs
Pre-operating or start-up costs incurred prior to operating a new data center	¥ 0	¥ 7,469	¥ 12,976

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee benefits (Details)	12 Months Ended
	Dec. 31, 2018
Minimum
Employee benefits
Employer contribution (as a percent)	28.00%
Maximum
Employee benefits
Employer contribution (as a percent)	49.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency translation and foreign currency risks (Details) € in Thousands, ¥ in Thousands, ¥ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	Dec. 31, 2018 USD ($)	Dec. 31, 2018 SGD ($)	Dec. 31, 2018 JPY (¥)	Dec. 31, 2018 HKD ($)	Dec. 31, 2018 EUR (€)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
RMB
Cash and restricted cash \| ¥						¥ 1,134,694	¥ 458,971
USD
Cash and restricted cash	$ 166,197					1,140,645
HKD
Cash and restricted cash				$ 7,948		6,964
JPY
Cash and restricted cash			¥ 19,098			1,182
EUR
Cash and restricted cash					€ 153	1,204
SGD
Cash and restricted cash		$ 12				59
PRC \| RMB
Cash and restricted cash \| ¥						1,102,939
PRC \| USD
Cash and restricted cash	37,988
Hong Kong SAR \| RMB
Cash and restricted cash \| ¥						¥ 31,755
Hong Kong SAR \| USD
Cash and restricted cash	44,195
Hong Kong SAR \| HKD
Cash and restricted cash				$ 7,948
Hong Kong SAR \| JPY
Cash and restricted cash \| ¥			¥ 19,098
Hong Kong SAR \| EUR
Cash and restricted cash \| €					€ 153
US \| USD
Cash and restricted cash	81,483
Singapore \| USD
Cash and restricted cash	$ 2,531
Singapore \| SGD
Cash and restricted cash		$ 12

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Changes in accounting policies (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Changes in accounting policies
Net revenue	¥ 2,792,077	¥ 1,616,166	¥ 1,055,960
Cost of revenue	(2,169,636)	(1,207,694)	(790,286)
Income from operations	168,355	82,229	(42,374)
Net loss	¥ (430,268)	¥ (326,900)	¥ (276,412)
Loss per ordinary share
Basic and diluted (in CNY per share)	¥ (0.43)	¥ (0.42)	¥ (1.35)
Statement of cash flows adjustments
Cash flows from operating activities	¥ (12,910)	¥ (167,816)	¥ (128,980)
Cash flows from financing activities	4,876,806	2,355,728	2,128,614
Cash flows from investing activities	(4,733,050)	(2,005,054)	(1,147,064)
Adjustments
Changes in accounting policies
Net revenue	1,569
Cost of revenue	(843)
Income from operations	726
Net loss	¥ 726
Loss per ordinary share
Basic and diluted (in CNY per share)	¥ 0.00
Amounts without adoption of ASC 606
Changes in accounting policies
Net revenue	¥ 2,793,646
Cost of revenue	(2,170,479)
Income from operations	169,081
Net loss	¥ (429,542)
Loss per ordinary share
Basic and diluted (in CNY per share)	¥ (0.43)
ASU 2016-18 \| Restatement Adjustment
Statement of cash flows adjustments
Cash flows from operating activities		(9,762)	¥ (21,248)
Cash flows from financing activities		(33,100)
Cash flows from investing activities		(3,619)
ASU 2016-15 \| Restatement Adjustment
Statement of cash flows adjustments
Cash flows from operating activities		2,966
Cash flows from financing activities		24,139
Cash flows from investing activities		¥ 27,105

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Standards (Details) - CNY (¥) ¥ in Thousands	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017
Recently Issued Accounting Standards
Intangible assets		¥ 482,492	¥ 348,466
Other financing obligations		1,007,690	673,853
Construction in progress		2,632,137	¥ 1,951,844
Future minimum lease payments		¥ 702,475
ASU 2016-02 \| Restatement Adjustment
Recently Issued Accounting Standards
Operating lease liabilities	¥ 483,607
ROU assets	513,961
Intangible assets	(44,552)
Other financing obligations	(331,917)
Construction in progress	(336,719)
Prepaid expenses	¥ 4,802

CASH AND RESTRICTED CASH (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CASH AND RESTRICTED CASH
Cash	¥ 2,161,622	¥ 1,873,446
Restricted cash - current assets	87	10,837
Restricted cash - non-current assets	123,039	63,317
Total cash and restricted cash shown in the consolidated statements of cash flows	¥ 2,284,748	¥ 1,947,600	¥ 1,838,992	¥ 930,923

CONTRACT BALANCES - Accounts Receivable, Net (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017
Accounts receivable, net
Accounts receivable			¥ 541,355	¥ 364,654
Less: allowance for doubtful accounts	¥ (241)	¥ (2,156)	(241)
Accounts receivable, net			541,114	364,654
- Current portion			536,842	364,654
- Non-current portion			4,272
Unbilled portion			384,640	253,724
Movement of the allowance for doubtful accounts
Balance at the beginning of the year		2,156
Allowance made during the year	241
Reversal during the year		¥ (2,156)
Balance at the end of the year	241
Deferred Revenue
Beginning balance, deferred revenue	55,609
Closing balance, deferred revenue	73,077
Increase	17,468
Revenue recognized from the opening deferred revenue balance	¥ 43,192
Accounts receivable
Accounts receivable, net
Assets pledged			¥ 365,938	¥ 136,043

CONTRACT BALANCES - Remaining performance obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 ¥ in Thousands	Dec. 31, 2018 CNY (¥)
Remaining performance obligations
Remaining performance obligations	¥ 1,631,208
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	3 years

PROPERTY AND EQUIPMENT, NET (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
At cost:
Property and equipment, gross	¥ 12,897,176	¥ 7,179,515
Less: Accumulated depreciation	(1,534,368)	(965,758)
Property and equipment net excluding construction in process	11,362,808	6,213,757
Construction in progress	2,632,137	1,951,844
Property and equipment, net	13,994,945	8,165,601
Buildings
At cost:
Property and equipment, gross	4,382,469	2,693,843
Data center equipment
At cost:
Property and equipment, gross	4,225,963	2,202,247
Leasehold improvement
At cost:
Property and equipment, gross	4,239,601	2,243,691
Furniture and office equipment
At cost:
Property and equipment, gross	45,057	36,762
Vehicles
At cost:
Property and equipment, gross	¥ 4,086	¥ 2,972

PROPERTY AND EQUIPMENT, NET - Acquired under capital leases (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
At cost:
Capital leased assets, gross	¥ 4,858,041	¥ 2,681,468
Less: Accumulated depreciation	(287,375)	(141,948)
Capital leases, balance sheet, Assets by major class, net, total	4,570,666	2,539,520
Buildings
At cost:
Capital leased assets, gross	4,557,081	2,488,522
Buildings under construction
At cost:
Capital leased assets, gross	1,478,612	476,489
Data center equipment
At cost:
Capital leased assets, gross	300,960	192,946
Data center equipment under construction
At cost:
Capital leased assets, gross	¥ 0	¥ 180,228

PROPERTY AND EQUIPMENT, NET - Depreciation (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Depreciation expense
Depreciation of property and equipment	¥ 682,451	¥ 352,480	¥ 212,873
Cost of revenue
Depreciation expense
Depreciation of property and equipment	674,560	345,025	206,724
General and administrative expenses
Depreciation expense
Depreciation of property and equipment	7,319	6,902	5,425
Research and development expenses
Depreciation expense
Depreciation of property and equipment	¥ 572	¥ 553	¥ 724

PROPERTY AND EQUIPMENT, NET - Other information (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
PROPERTY AND EQUIPMENT, NET
Payables for purchase of property and equipment due beyond one year	¥ 206,591	¥ 195,749
Property and equipment, net
PROPERTY AND EQUIPMENT, NET
Net book value of an asset pledged as security for bank loans	¥ 1,716,736	¥ 698,922

INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Intangible assets
Intangible assets, gross	¥ 587,822	¥ 400,822
Less: accumulated amortization	(105,330)	(52,356)
Intangible assets, net	482,492	348,466
Amortization of intangible assets	52,974	25,103	¥ 13,866
Estimated future amortization expense
2019	61,204
2020	53,054
2021	53,054
2022	53,054
2023	51,512
Thereafter	210,614
Intangible assets, net	482,492	348,466
Customer relationships
Intangible assets
Intangible assets, gross	532,322	379,322
Favorable leases
Intangible assets
Intangible assets, gross	49,500	15,500
Licenses
Intangible assets
Intangible assets, gross	¥ 6,000	¥ 6,000

PREPAID LAND USE RIGHTS (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
PREPAID LAND USE RIGHTS (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Prepaid land use rights	¥ 765,114	¥ 28,370
Less: Accumulated amortization	(8,157)	(2,125)
Prepaid land use rights, net	756,957	26,245
Amortization of prepaid land use rights	6,082	547	¥ 616
Prepaid land use rights
Net book value of an asset pledged as security for bank loans	¥ 13,241	¥ 6,091

BUSINESS COMBINATIONS - Movement of goodwill (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Movement of goodwill
Balance at the beginning of the year	¥ 1,570,755	¥ 1,341,087
Addition during the year	181,215	229,668
Balance at end of year	¥ 1,751,970	¥ 1,570,755

BUSINESS COMBINATIONS - Assets acquired (Details) - CNY (¥) ¥ in Thousands						1 Months Ended		3 Months Ended	6 Months Ended	7 Months Ended		8 Months Ended	12 Months Ended
	Jun. 01, 2018	May 02, 2018	Oct. 09, 2017	Jun. 29, 2017	May 19, 2016	May 31, 2016	Feb. 29, 2016	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Recognized amounts of identifiable assets acquired and liabilities assumed
Goodwill								¥ 1,570,755	¥ 1,570,755	¥ 1,751,970	¥ 1,341,087	¥ 1,751,970	¥ 1,751,970	¥ 1,570,755	¥ 1,341,087
Net income (loss)													(430,268)	(326,900)	(276,412)
Settled the consideration													359,372	252,780	¥ 103,600
Remaining consideration payable								159,489	159,489	192,367		192,367	192,367	¥ 159,489
Weiteng Construction/Guangzhou 1
The identifiable assets acquired and liabilities assumed in the business combination
Fair value of consideration transferred					¥ 129,500
Effective settlement of pre-existing relationships upon consolidation					43,161
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash					(1,237)
Property and equipment					(281,437)
Identifiable intangible assets					(59,500)
Other assets					(25,363)
Accounts payable					131,114
Capital lease and other financing obligations, current					12,097
Capital lease and other financing obligations, non-current					68,584
Deferred tax liabilities					21,143
Other liabilities					8,361
Total identifiable net assets					(126,238)
Goodwill					46,423
Short-term loans lent to Weiteng Construction					42,000	¥ 2,000	¥ 40,000
Interest rate (as a percent)						10.00%	10.00%
Gain or loss recognized from the effective settlement					0
Amount due from Weiteng Construction, including interest receivable					43,161
Interest receivable					1,161
Net revenue											36,924
Net income (loss)											¥ (2,861)
Weiteng Construction/Guangzhou 1 \| Capital lease
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment					(102,785)
Weiteng Construction/Guangzhou 1 \| Data center equipment
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment					(19,895)
Weiteng Construction/Guangzhou 1 \| Leasehold improvement
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment					(132,462)
Weiteng Construction/Guangzhou 1 \| Construction in progress
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment					(26,295)
Target Group, Shenzhen 5
The identifiable assets acquired and liabilities assumed in the business combination
Fair value of consideration transferred				¥ 294,491
Contingent consideration				312,000
Effective settlement of pre-existing relationships upon consolidation				6,025
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash				(11,153)
Property and equipment				(821,405)
Identifiable intangible assets				(176,500)
Other assets				(59,520)
Accounts payable				219,207
Capital lease and other financing obligations, current				23,156
Capital lease and other financing obligations, non-current				363,380
Long-term borrowings				217,790
Deferred tax liabilities				45,931
Other liabilities				55,299
Total identifiable net assets				(143,815)
Goodwill				156,701
Net revenue									42,072
Net income (loss)									¥ (23,859)
Target Group, Shenzhen 5 \| Other payables
The identifiable assets acquired and liabilities assumed in the business combination
Contingent consideration										123,098		123,098	123,098
Target Group, Shenzhen 5 \| Capital lease
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment				(416,000)
Target Group, Shenzhen 5 \| Data center equipment
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment				(174,292)
Target Group, Shenzhen 5 \| Leasehold improvement
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment				(118,368)
Target Group, Shenzhen 5 \| Construction in progress
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment				(112,745)
Target Group Guangzhou 2
The identifiable assets acquired and liabilities assumed in the business combination
Fair value of consideration transferred			¥ 233,984
Effective settlement of pre-existing relationships upon consolidation			(1,807)
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash			(10,144)
Accounts receivable			(25,177)
Property and equipment			(319,943)
Identifiable intangible assets			(98,500)
Other assets			(14,135)
Accounts payable			56,431
Capital lease and other financing obligations, current			5,958
Capital lease and other financing obligations, non-current			101,875
Short-term borrowings			50,750
Long-term borrowings			52,999
Deferred tax liabilities			35,097
Other liabilities			5,579
Total identifiable net assets			(159,210)
Goodwill			72,967
Net revenue								26,573
Net income (loss)								¥ 2,734
Target Group Guangzhou 2 \| Capital lease
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment			(106,000)
Target Group Guangzhou 2 \| Data center equipment
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment			(57,932)
Target Group Guangzhou 2 \| Leasehold improvement
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment			(155,149)
Target Group Guangzhou 2 \| Furniture and office equipment
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment			(862)
Target Group Guangzhou 3
The identifiable assets acquired and liabilities assumed in the business combination
Fair value of consideration transferred		¥ 247,937
Purchase price		262,244								262,244		262,244	262,244
Contingent consideration		245,244								124,921		124,921	124,921
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash		(62)
Accounts receivable		(13,995)
Property and equipment		(780,312)
Identifiable intangible assets		(130,000)
Other assets		(43,039)
Accounts payable		471,532
Capital lease and other financing obligations, non-current		282,051
Short-term borrowings		47,580
Long-term borrowings		30,000
Deferred tax liabilities		26,503
Other liabilities		2,849
Total identifiable net assets		(106,893)
Goodwill		141,044
Net revenue												85,298
Net income (loss)												(11,727)
Target Group Guangzhou 3 \| Other payables
The identifiable assets acquired and liabilities assumed in the business combination
Contingent consideration										45,838		45,838	45,838
Target Group Guangzhou 3 \| Other long-term liabilities
The identifiable assets acquired and liabilities assumed in the business combination
Contingent consideration										79,083		79,083	79,083
Target Group Guangzhou 3 \| Capital lease
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment		(291,000)
Target Group Guangzhou 3 \| Data center equipment
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment		(254,241)
Target Group Guangzhou 3 \| Leasehold improvement
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment		(235,071)
Shanghai 11
The identifiable assets acquired and liabilities assumed in the business combination
Fair value of consideration transferred	¥ 319,119
Purchase price	320,000
Contingent consideration	70,000
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash	(404)
Property and equipment	(233,405)
Identifiable intangible assets	(57,000)
Other assets	(94,647)
Accounts payable	91,136
Deferred tax liabilities	9,995
Other liabilities	5,377
Total identifiable net assets	(278,948)
Goodwill	40,171
Net revenue										35,489
Net income (loss)										(2,924)
Shanghai 11 \| Other payables
The identifiable assets acquired and liabilities assumed in the business combination
Contingent consideration										13,931		13,931	13,931
Shanghai 11 \| Data center equipment
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment	(70,241)
Shanghai 11 \| Leasehold improvement
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment	(163,164)
Asset acquisitions in 2018
The identifiable assets acquired and liabilities assumed in the business combination
Purchase price										124,667		124,667	124,667
Recognized amounts of identifiable assets acquired and liabilities assumed
Settled the consideration													115,167
Asset acquisitions in 2018 \| Other payables
Recognized amounts of identifiable assets acquired and liabilities assumed
Remaining consideration payable										¥ 9,500		¥ 9,500	¥ 9,500
Customer relationships \| Weiteng Construction/Guangzhou 1
Recognized amounts of identifiable assets acquired and liabilities assumed
Identifiable intangible assets					¥ (59,500)
Customer relationships \| Target Group, Shenzhen 5
Recognized amounts of identifiable assets acquired and liabilities assumed
Identifiable intangible assets				¥ (176,500)
Estimated useful life (in years)				14 years 4 months 24 days
Customer relationships \| Target Group Guangzhou 2
Recognized amounts of identifiable assets acquired and liabilities assumed
Identifiable intangible assets			¥ (98,500)
Estimated useful life (in years)			11 years 9 months 18 days
Customer relationships \| Target Group Guangzhou 3
Recognized amounts of identifiable assets acquired and liabilities assumed
Identifiable intangible assets		¥ (130,000)
Estimated useful life (in years)		7 years
Customer relationships \| Shanghai 11
Recognized amounts of identifiable assets acquired and liabilities assumed
Identifiable intangible assets	¥ (23,000)
Estimated useful life (in years)	10 years
Favorable leases \| Shanghai 11
Recognized amounts of identifiable assets acquired and liabilities assumed
Identifiable intangible assets	¥ (34,000)
Estimated useful life (in years)	13 years 7 months 6 days
Minimum \| Customer relationships \| Weiteng Construction/Guangzhou 1
Recognized amounts of identifiable assets acquired and liabilities assumed
Estimated useful life (in years)					7 years
Maximum \| Customer relationships \| Weiteng Construction/Guangzhou 1
Recognized amounts of identifiable assets acquired and liabilities assumed
Estimated useful life (in years)					8 years

LOANS AND BORROWINGS - Total loans and borrowings (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Loans and borrowings
Short-term borrowings	¥ 684,788	¥ 462,946
Current portion of long-term borrowings	598,532	327,538
Sub-total	1,283,320	790,484
Long-term borrowings, excluding current portion	5,203,708	3,459,765
Total loans and borrowings	¥ 6,487,028	¥ 4,250,249

LOANS AND BORROWINGS - Type of short-term borrowings (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Short-term borrowings by type
Unsecured short-term loans and borrowings	¥ 30,000	¥ 230,000
Secured short-term loans and borrowings	654,788	232,946
Short-term borrowings	¥ 684,788	¥ 462,946

LOANS AND BORROWINGS - Short-term borrowings secured (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Short-term borrowings
Assets to secure short-term loans and borrowings	¥ 222,086	¥ 11,615
Property and equipment, net	¥ 13,994,945	¥ 8,165,601
Weighted average interest rates of short-term borrowings	7.01%	7.93%
Accounts receivable
Short-term borrowings
Assets to secure short-term loans and borrowings	¥ 18,796	¥ 11,615
Property and equipment, net
Short-term borrowings
Assets to secure short-term loans and borrowings	¥ 203,290

LOANS AND BORROWINGS - Long-term borrowings (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Long-term borrowings by type
Unsecured long-term loans and borrowings	¥ 85,250	¥ 167,250
Secured long-term loans and borrowings	5,716,990	3,620,053
Long-term borrowings	¥ 5,802,240	¥ 3,787,303
Weighted average interest rates of long-term borrowings	7.42%	6.93%

LOANS AND BORROWINGS - Long-term borrowings secured (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Loans and Borrowings
Assets to secure long-term loans and borrowings	¥ 1,873,829	¥ 829,441
Accounts receivable
Loans and Borrowings
Assets to secure long-term loans and borrowings	347,142	124,428
Property and equipment, net
Loans and Borrowings
Assets to secure long-term loans and borrowings	1,513,446	698,922
Prepaid land use rights
Loans and Borrowings
Assets to secure long-term loans and borrowings	¥ 13,241	¥ 6,091

LOANS AND BORROWINGS - Aggregate maturities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fiscal year ending December 31,
2019	¥ 598,532
2020	725,727
2021	1,759,695
2022	1,087,955
2023	1,235,936
Thereafter	394,395
Long-term borrowings	¥ 5,802,240	¥ 3,787,303

LOANS AND BORROWINGS - Particulars of secured long-term loans and borrowings (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)
Secured long-term loans and borrowings
Early repayment if STT Communications Ltd. ceases to directly or indirectly own, the percentage of equity interests of STT GDC Pte. Ltd.	50.10%	50.10%
Early repayment if STT GDC PTe. Ltd. ceases to own and control, the percentage of equity interest in the Company	30.00%	30.00%
Early repayment if STT GDC PTe. Ltd. ceases to own and control, the percentage of issued share capital	25.00%	25.00%
Early repayment if STT GDC PTe. Ltd. ceases to own and control, directly or indirectly, the percentage of equity interest in the Company	30.00%	30.00%
Early repayment if STT GDC PTe. Ltd. power to cast, or control the casting of voting in meeting, the percentage of equity interest in the Company	25.00%	25.00%
Financial covenants, fails to repay any financial indebtedness in an aggregate amount	$ 4,500	¥ 50,000
Minimum
Secured long-term loans and borrowings
Term of credit facility	1 year
Maximum
Secured long-term loans and borrowings
Term of credit facility	13 years
The Company and GDS Investment
Secured long-term loans and borrowings
Early repayment requirement, cease control of certain affiliate, percentage	100.00%	100.00%
William Wei Huang, Director and CEO of the Company
Secured long-term loans and borrowings
Early repayment requirement, cease control of certain affiliate, percentage	99.90%	99.90%
GDS Beijing, GDS Suzhou, and Relevant Borrowing Subsidiaries
Secured long-term loans and borrowings
Early repayment if cease to own and control percentage of the equity interest in the borrowing subsidiaries	100.00%	100.00%

LOANS AND BORROWINGS - Total working capital and project financing credit (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Loans and Borrowings
Outstanding loans (net of debt issuance costs)	¥ 5,802,240	¥ 3,787,303
Debt issuance costs	203,779	¥ 134,395
Credit Facilities
Loans and Borrowings
Total working capital and project financing credit facilities	8,134,013
Unused amount	1,497,452
Loan drew down	6,636,561
Credit Facilities \| Short-term loans and borrowing
Loans and Borrowings
Outstanding loans (net of debt issuance costs)	684,788
Debt issuance costs	2,102
Credit Facilities \| Long-term loans and borrowing
Loans and Borrowings
Outstanding loans (net of debt issuance costs)	5,802,240
Debt issuance costs	¥ 147,431

CONVERTIBLE BONDS PAYABLE (Details) $ / shares in Units, ¥ in Thousands					1 Months Ended	12 Months Ended
	Jan. 29, 2016 USD ($)	Jan. 29, 2016 CNY (¥)	Dec. 30, 2015 USD ($) D item tranche $ / shares	Dec. 30, 2015 CNY (¥) D item	Nov. 30, 2017 CNY (¥) shares	Dec. 31, 2018 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 USD ($) $ / shares	Dec. 31, 2018 CNY (¥)	Jun. 05, 2018 USD ($)	Dec. 31, 2017 CNY (¥)	Nov. 30, 2017 $ / shares	Dec. 31, 2015	Dec. 30, 2015 CNY (¥) tranche
CONVERTIBLE BONDS PAYABLE
Debt issuance costs									¥ 203,779		¥ 134,395
Proceeds from convertible bonds						¥ 1,867,304	¥ 327,580
Gain or loss on change in fair value of derivative liability						¥ 0
Conversion of redeemable preference shares							¥ 2,311,132
Denominations for repurchase of Notes \| $								$ 1
Accrued expenses
CONVERTIBLE BONDS PAYABLE
Accrued interests									¥ 3,432
ADS
CONVERTIBLE BONDS PAYABLE
Basis of issuance of shares for debt conversion (in dollar per share) \| $ / shares								$ 51.58
Conversion rate per US$1,000 principal amount						19.3865
Convertible Bonds Due 2019
CONVERTIBLE BONDS PAYABLE
Number Of Investor \| item			2	2
Principal amount \| $			$ 250,000,000
Number of tranches \| tranche			4											4
Proceeds from convertible bonds	$ 50,000,000	¥ 324,475	$ 100,000,000	¥ 648,950
Unsubscribed bonds			$ 100,000,000											¥ 648,950
Interest per annum - the "Cash Interest" (as a percent)													5.00%
Interest per annum - the "Accrued Interest" (as a percent)													5.00%
Maximum principal amount convertible to ordinary shares (as a percent)			100.00%											100.00%
Denominations for conversion of debt \| $			$ 10,000,000
Basis of issuance of shares for debt conversion (in dollar per share) \| $ / shares			$ 1.675262
Minimum percentage of stock price to trigger mandatory conversion			125.00%	125.00%
Premium over conversion price to trigger mandatory conversion			25.00%											25.00%
Percentage of principal amount of the original debt being converted												100.00%
Shares issued par value on conversion of convertible bonds					¥ 32
Conversion of redeemable preference shares					¥ 1,106,195
Convertible Bonds Due 2019 \| Minimum
CONVERTIBLE BONDS PAYABLE
Trading days of stock price to trigger mandatory conversion \| D			10	10
Convertible Bonds Due 2019 \| Class A
CONVERTIBLE BONDS PAYABLE
Basis of issuance of shares for debt conversion (in dollar per share) \| $ / shares												$ 1.675262
Principal amount and accrued interest converted to Class A Ordinary shares (in shares) \| shares					97,870,263
Convertible Bonds due 2025
CONVERTIBLE BONDS PAYABLE
Principal amount \| $										$ 300,000,000
Debt issuance costs \| $										$ 8,948,000
Interest per annum (as a percent)										2.00%
Subsidiaries \| Convertible Bonds Due 2019
CONVERTIBLE BONDS PAYABLE
Equity interest in a subsidiary pledged (as a percent)							100.00%						100.00%

ACCRUED EXPENSES AND OTHER PAYABLES (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ACCRUED EXPENSES AND OTHER PAYABLES
Accrued interest expenses	¥ 32,902	¥ 21,114
Accrued debt issuance costs	618	34,194
Income tax payable (note 19)	43,898	20,122
Consideration payables for acquisitions (note 8)	192,367	159,489
Deferred government grants	4,800
Accrued payroll and welfare benefits	77,134	47,432
Accrued professional fees	32,076	15,725
Other accrued operating expenses	52,618	38,118
Other payables	40,151	32,430
Total accrued expenses and other payables	¥ 476,564	¥ 368,624

LEASE - Capital lease and other financing obligations (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Capital lease obligations
Within 1 year	¥ 352,524	¥ 212,780
After 1 year but within 2 years	453,891	220,293
After 2 years but within 3 years	286,468	316,475
After 3 years but within 4 years	282,627	144,052
After 4 years but within 5 years	292,481	141,910
After 5 years	3,926,028	1,900,744
Total minimum lease payments	5,594,019	2,936,254
Less: total future interest	(2,300,484)	(1,209,120)
Present value of capital lease obligations	3,293,535	1,727,134
Other financing obligations
Within 1 year	37,150	45,007
After 1 year but within 2 years	80,276	63,151
After 2 years but within 3 years	107,497	75,685
After 3 years but within 4 years	111,616	76,678
After 4 years but within 5 years	113,667	80,832
After 5 years	1,878,098	1,469,318
Total other financing obligations	2,328,304	1,810,671
Less: total future interest	(1,160,108)	(905,590)
Less: estimated building costs	(160,506)	(231,228)
Present value of other financing obligations	1,007,690	673,853
Total
Within 1 year	389,674	257,787
After 1 year but within 2 years	534,167	283,444
After 2 years but within 3 years	393,965	392,160
After 3 years but within 4 years	394,243	220,730
After 4 years but within 5 years	406,148	222,742
After 5 years	5,804,126	3,370,062
Total	7,922,323	4,746,925
Less: total future interest	(3,460,592)	(2,114,710)
Less: estimated building costs	(160,506)	(231,228)
Present value of total obligations	4,301,225	2,400,987
Including:
Current Portion	166,898	97,943
Noncurrent portion	¥ 4,134,327	¥ 2,303,044
Weighted average effective interest rate of capital and built-to-suit leases (as a percent)	6.99%	7.28%

LEASE - Capital lease agreements (Details) ¥ in Thousands	Dec. 31, 2018 CNY (¥) agreement	Dec. 31, 2017 CNY (¥)
Capital leases
Carrying value of property and equipment acquired under capital lease and other financing arrangements	¥ 4,570,666	¥ 2,539,520
Present value of minimum lease payments	3,293,535	1,727,134
Present value of minimum lease payments	¥ 1,007,690	¥ 673,853
Data center building leases
Capital leases
Number of buildings leased under capital lease agreement \| agreement	7
Capital lease and other financing obligations	¥ 1,300,453
Data center building leases \| Minimum
Capital leases
Term of capital lease	15 years
Data center building leases \| Maximum
Capital leases
Term of capital lease	20 years
Equipment Leases
Capital leases
Number of buildings leased under capital lease agreement	5
Term of capital lease	3 years
Present value of minimum lease payments	¥ 108,665

LEASE - Build-to-suit leases (Details) ¥ in Thousands	2 Months Ended
LEASE - Build-to-suit leases (Details) ¥ in Thousands	Aug. 31, 2018 CNY (¥) lease
Shanghai 12 Lease and Shanghai 13 Lease, Build-to-suite
Build-to-suit leases
Number of buildings leased under build-to-suit lease \| lease	2
Rent paid \| ¥	¥ 0
Shanghai 12 Lease, Build-to-suite
Build-to-suit leases
Term of capital lease	15 years 8 months 12 days
Shanghai 13 Lease, Build-to-suite
Build-to-suit leases
Term of capital lease	20 years

LEASE - Operating leases (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
LEASE - Operating leases (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Future minimum operating lease payments
2019	¥ 95,082
2020	69,541
2021	48,072
2022	41,758
2023	40,952
Thereafter	407,070
Total	702,475
Rental expenses	¥ 108,550	¥ 155,148	¥ 124,712

OTHER LONG-TERM LIABILITIES (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Other long-term liabilities
Consideration payable for acquisitions (Note 8)	¥ 79,083	¥ 120,881
Payables for purchase of property and equipment	206,591	195,749
Deferred government grants	9,771	16,789
Asset retirement obligations	35,879	17,648
Others	9,488	7,831
Total other long-term liabilities	¥ 340,812	¥ 358,898

REDEEMABLE PREFERRED SHARES - Movement (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Movement of the redeemable preferred shares
Change in redemption value	¥ 205,670
Conversion to ordinary shares	2,311,132
Redeemable preferred shares
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 2,395,314
Balance at beginning of year (in shares)	349,087,677
Change in redemption value	¥ (205,670)	¥ 110,926	¥ 69,116
Conversion to ordinary shares	¥ (2,311,132)
Conversion to ordinary shares (in shares)	(349,087,677)
Foreign exchange impact	¥ 121,488
Balance at end of year		¥ 2,395,314
Balance at end of year (in shares)		349,087,677
Series A
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 107,428
Balance at beginning of year (in shares)	29,635,045
Change in redemption value	¥ (39,098)
Conversion to ordinary shares	¥ (72,965)
Conversion to ordinary shares (in shares)	(29,635,045)
Foreign exchange impact	¥ 4,635
Balance at end of year		¥ 107,428
Balance at end of year (in shares)		29,635,045
Series A*
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 39,575
Balance at beginning of year (in shares)	6,916,645
Conversion to ordinary shares	¥ (43,564)
Conversion to ordinary shares (in shares)	(6,916,645)
Foreign exchange impact	¥ 3,989
Balance at end of year		¥ 39,575
Balance at end of year (in shares)		6,916,645
Series B
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 16,789
Balance at beginning of year (in shares)	2,576,483
Change in redemption value	¥ (3,921)
Conversion to ordinary shares	¥ (13,600)
Conversion to ordinary shares (in shares)	(2,576,483)
Foreign exchange impact	¥ 732
Balance at end of year		¥ 16,789
Balance at end of year (in shares)		2,576,483
Series B1
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 80,148
Balance at beginning of year (in shares)	11,527,742
Conversion to ordinary shares	¥ (88,221)
Conversion to ordinary shares (in shares)	(11,527,742)
Foreign exchange impact	¥ 8,073
Balance at end of year		¥ 80,148
Balance at end of year (in shares)		11,527,742
Series B2
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 67,419
Balance at beginning of year (in shares)	10,435,639
Conversion to ordinary shares	¥ (74,209)
Conversion to ordinary shares (in shares)	(10,435,639)
Foreign exchange impact	¥ 6,790
Balance at end of year		¥ 67,419
Balance at end of year (in shares)		10,435,639
Series B4
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 87,477
Balance at beginning of year (in shares)	14,076,620
Conversion to ordinary shares	¥ (96,287)
Conversion to ordinary shares (in shares)	(14,076,620)
Foreign exchange impact	¥ 8,810
Balance at end of year		¥ 87,477
Balance at end of year (in shares)		14,076,620
Series B5
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 258,038
Balance at beginning of year (in shares)	35,393,262
Change in redemption value	¥ (21,016)
Conversion to ordinary shares	¥ (248,455)
Conversion to ordinary shares (in shares)	(35,393,262)
Foreign exchange impact	¥ 11,433
Balance at end of year		¥ 258,038
Balance at end of year (in shares)		35,393,262
Series C
Movement of the redeemable preferred shares
Balance at beginning of year	¥ 1,738,440
Balance at beginning of year (in shares)	238,526,241
Change in redemption value	¥ (141,635)
Conversion to ordinary shares	¥ (1,673,831)
Conversion to ordinary shares (in shares)	(238,526,241)
Foreign exchange impact	¥ 77,026
Balance at end of year		¥ 1,738,440
Balance at end of year (in shares)		238,526,241

REDEEMABLE PREFERRED SHARES - Issued and Outstanding (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands			1 Months Ended					4 Months Ended		12 Months Ended
	Aug. 13, 2014 USD ($) $ / shares shares	Aug. 13, 2014 CNY (¥) ¥ / shares shares	Jun. 30, 2014 shares	Mar. 31, 2011 $ / shares shares	Mar. 31, 2011 ¥ / shares shares	Jan. 31, 2007 USD ($) $ / shares shares	Jan. 31, 2007 CNY (¥) ¥ / shares shares	Dec. 22, 2014 USD ($) $ / shares shares	Dec. 22, 2014 CNY (¥) ¥ / shares shares	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2015 CNY (¥)	Dec. 31, 2014 CNY (¥)
REDEEMABLE PREFERRED SHARES
Issuance of ordinary shares in exchange of bonds payable \| ¥										¥ 1,106,227
Change in redemption value \| ¥											¥ 205,670
Ordinary Shares
REDEEMABLE PREFERRED SHARES
Acquisition of EDC Holding (in shares)			88,352,558
Redeemable preferred shares
REDEEMABLE PREFERRED SHARES
Change in redemption value \| ¥											(205,670)	¥ 110,926	¥ 69,116
Series A
REDEEMABLE PREFERRED SHARES
Shares issued						53,625,000	53,625,000
Issuance price per share \| (per share)						$ 0.3636	¥ 2.8279
Issuance of ordinary shares in exchange of bonds payable						$ 3,500	¥ 27,222
Number of shares issued for converted debt						9,625,000	9,625,000
Change in redemption value \| ¥											(39,098)
Series A*
REDEEMABLE PREFERRED SHARES
Shares issued in connection with acquisition			14,149,705
Series B
REDEEMABLE PREFERRED SHARES
Shares issued				11,550,000	11,550,000
Issuance price per share \| (per share)				$ 0.7792	¥ 5.1087
Change in redemption value \| ¥											(3,921)
Series B1
REDEEMABLE PREFERRED SHARES
Shares issued in connection with acquisition			33,959,293
Series B2
REDEEMABLE PREFERRED SHARES
Shares issued in connection with acquisition			25,618,413
Series B3
REDEEMABLE PREFERRED SHARES
Shares issued in connection with acquisition			14,045,432
Series B4
REDEEMABLE PREFERRED SHARES
Shares issued in connection with acquisition			23,037,763
Series B5
REDEEMABLE PREFERRED SHARES
Shares issued								35,393,262	35,393,262
Issuance price per share \| (per share)								$ 1.0365	¥ 6.3779
Cash consideration for issuance of shares								$ 36,685	¥ 225,198
Change in redemption value \| ¥											(21,016)
Series C
REDEEMABLE PREFERRED SHARES
Shares issued	238,526,241	238,526,241
Issuance price per share \| (per share)	$ 1.0365	¥ 6.3779
Cash consideration for issuance of shares	$ 247,238	¥ 1,521,295
Issuance costs	$ 3,271	¥ 20,128
Change in redemption value \| ¥											¥ (141,635)

REDEEMABLE PREFERRED SHARES - Extinguishment (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands			1 Months Ended				4 Months Ended		12 Months Ended
	Aug. 13, 2014 USD ($) $ / shares shares	Aug. 13, 2014 CNY (¥) ¥ / shares shares	Mar. 31, 2011 $ / shares	Mar. 31, 2011 ¥ / shares	Jan. 31, 2007 $ / shares	Jan. 31, 2007 ¥ / shares	Dec. 22, 2014 USD ($) item $ / shares shares	Dec. 22, 2014 CNY (¥) item ¥ / shares shares	Dec. 31, 2015 CNY (¥)	Dec. 31, 2014 CNY (¥)	Dec. 22, 2014 CNY (¥)	Aug. 13, 2014 CNY (¥)
Redeemable preferred shares
REDEEMABLE PREFERRED SHARES
Carrying amount \| ¥									¥ 2,395,314
Shares exchanged							35,393,262	35,393,262
Series A
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	23,533,064	23,533,064
Carrying amount \| ¥									107,428
Shares exchanged							10,081,891	10,081,891
Purchase price per share \| (per share)					$ 0.3636	¥ 2.8279
Series A*
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	5,503,899	5,503,899
Carrying amount \| ¥									39,575
Shares exchanged							1,729,161	1,729,161
Series B
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	8,413,412	8,413,412
Carrying amount \| ¥									16,789
Shares exchanged							560,105	560,105
Purchase price per share \| (per share)			$ 0.7792	¥ 5.1087
Series B1
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	13,209,358	13,209,358
Carrying amount \| ¥									80,148
Series B2
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	9,964,954	9,964,954
Carrying amount \| ¥									67,419
Series B3
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	5,463,340	5,463,340
Series B4
REDEEMABLE PREFERRED SHARES
Number of shares repurchased	8,961,143	8,961,143
Carrying amount \| ¥									87,477
Series B5
REDEEMABLE PREFERRED SHARES
Difference between repurchase price or fair value and carrying amount							$ 4,812	¥ 29,615
Carrying amount \| ¥									258,038
Number of shares sold by holders							35,393,262	35,393,262
Purchase price per share \| (per share)							$ 1.0365	¥ 6.3779
Total cash consideration							$ 36,685	¥ 225,198
Number of investor \| item							1	1
Series C
REDEEMABLE PREFERRED SHARES
Minimum holding of issued share capital	40.00%	40.00%
Carrying amount \| ¥									1,738,440
Purchase price per share \| (per share)	$ 1.0365	¥ 6.3779
Total cash consideration	$ 247,238	¥ 1,521,295
Exchanged Shares
REDEEMABLE PREFERRED SHARES
Carrying amount							$ 31,873				¥ 195,583
Series A, Series A*, Series B, Series B1, Series B2, Series B3 and Series B4
REDEEMABLE PREFERRED SHARES
Repurchase price per share \| (per share)	$ 1.0365	¥ 6.3779
Repurchase cash consideration	$ 77,790	¥ 478,666
Amount paid for shares repurchased \| ¥									¥ 23,300	¥ 455,366
Difference between repurchase price or fair value and carrying amount	12,497	¥ 76,900
Carrying amount	$ 65,293											¥ 401,766
Series B*
REDEEMABLE PREFERRED SHARES
Shares exchanged							23,022,105	23,022,105

REDEEMABLE PREFERRED SHARES - Preference Dividend (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands				12 Months Ended
	Nov. 07, 2016 USD ($) $ / shares shares	Nov. 07, 2016 CNY (¥) shares	Sep. 29, 2016	Dec. 31, 2016 CNY (¥)
Preference Dividend
Preference dividend (as a percent)			6.00%
Preference dividend paid	$ 50,812	¥ 343,296		¥ 343,296
Preference dividend paid in cash	11,449	76,502
Issuance of ordinary shares to settle preference dividend	$ 39,363	¥ 266,794		¥ 266,794
Ordinary shares issued as preferred stock dividends (in shares) \| shares	31,490,164	31,490,164
ADS
Preference Dividend
Initial public offering price (dollar per share)	$ 10.00
Ordinary Shares
Preference Dividend
Initial public offering price (dollar per share)	$ 1.25

REDEEMABLE PREFERRED SHARES - Terms (Details) $ / shares in Units, $ in Thousands	Nov. 07, 2016 USD ($) $ / shares shares
Redeemable preferred shares
REDEEMABLE PREFERRED SHARES
Conversion ratio of preferred shares to ordinary share \| shares	1
Minimum gross cash proceeds in an IPO to trigger automatic conversion to ordinary shares \| $	$ 100,000
Minimum percentage of issue price per share above US1.0365 in an IPO to trigger automatic conversion to ordinary shares	25.00%
Threshold amount in an IPO to trigger automatic conversion to ordinary shares	$ 1.0365
Minimum public float to trigger automatic conversion to ordinary shares (as a percent)	20.00%
Minimum votes required for redemption (as a percent)	75.00%
Cumulative dividend rate	6.00%
Number of shares converted \| shares	(349,087,677)
Series A
REDEEMABLE PREFERRED SHARES
Redemption amount per share	$ 0.363636
Series A*
REDEEMABLE PREFERRED SHARES
Redemption amount per share	0.1060
Series B
REDEEMABLE PREFERRED SHARES
Redemption amount per share	0.77922
Series B1
REDEEMABLE PREFERRED SHARES
Redemption amount per share	0.5300
Series B2
REDEEMABLE PREFERRED SHARES
Redemption amount per share	0.5855
Series B4
REDEEMABLE PREFERRED SHARES
Redemption amount per share	0.4340
Series B5
REDEEMABLE PREFERRED SHARES
Redemption amount per share	$ 1.036522
Series C
REDEEMABLE PREFERRED SHARES
Consent to convert preferred shares to ordinary shares (as a percent)	75.00%
Redemption amount per share	$ 1.036522
Series A, Series A*, Series B, Series B1, Series B2, Series B4 and Series B5
REDEEMABLE PREFERRED SHARES
Consent to convert preferred shares to ordinary shares (as a percent)	85.00%
Ordinary Shares
REDEEMABLE PREFERRED SHARES
Number of shares converted \| shares	349,087,677

FAIR VALUE MEASUREMENT (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
FAIR VALUE MEASUREMENT
Asset measured at fair value	¥ 0	¥ 0
Liability measured at fair value	0	¥ 0
Convertible bonds payable fair value	1,512,677
Convertible debt, carrying amount	¥ 2,004,714

ORDINARY SHARES (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands									1 Months Ended						12 Months Ended
	Jan. 29, 2018 USD ($) shares	Jan. 29, 2018 CNY (¥) shares	Jan. 26, 2018 $ / shares shares	Dec. 06, 2016 shares	Nov. 07, 2016 $ / shares shares	Oct. 18, 2016 Vote director	Aug. 13, 2014 USD ($) $ / shares shares	Aug. 13, 2014 CNY (¥) shares	Nov. 30, 2017 $ / shares shares	Oct. 31, 2017 $ / shares shares	Aug. 31, 2016 shares	Aug. 31, 2014 USD ($) shares	Aug. 31, 2014 CNY (¥) shares	Jun. 30, 2014 CNY (¥) shares	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 CNY (¥) shares	Dec. 31, 2016 CNY (¥) shares	Dec. 31, 2006 $ / shares shares	Dec. 31, 2018 $ / shares shares	Dec. 31, 2017 $ / shares shares	Dec. 30, 2015 $ / shares	Aug. 13, 2014 ¥ / shares	Dec. 31, 2006 ¥ / shares
Ordinary shares
Par value (in USD or CNY per share) \| $ / shares																			$ 0.00005	$ 0.00005
Issuance of ordinary shares in exchange of bonds payable \| ¥																¥ 1,106,227
Ordinary shares issued as preferred stock dividends (in shares)					31,490,164
Proceeds from this public offering, net of underwriting discounts and commissions and other issuance costs	$ 202,696	¥ 1,283,308													¥ 1,283,308	¥ 649,834	¥ 1,221,518
Convertible Bonds Due 2019
Ordinary shares
Percentage of principal amount of the original debt being converted									100.00%
Conversion price (in USD/share) \| $ / shares																					$ 1.675262
Restricted shares
Ordinary shares
Granted (in shares)															13,202,512	13,977,060	13,787,480
Restricted shares \| Directors
Ordinary shares
Granted (in shares)											877,400
Ordinary Shares
Ordinary shares
Ordinary shares issued (in shares)																		110,000,001
Par value (in USD or CNY per share) \| (per share)																		$ 0.00005					¥ 0.000404
Ordinary shares repurchased (in shares)							18,762,292	18,762,292
Ordinary shares repurchased (in USD or CNY per share) \| (per share)							$ 1.0365															¥ 6.3779
Total consideration from repurchased ordinary shares							$ 19,448	¥ 119,664
Number of shares converted					349,087,677
Price per share (in USD/share) \| $ / shares					$ 1.25
Proceeds from this public offering, net of underwriting discounts and commissions and other issuance costs \| ¥																¥ 0
Ordinary Shares \| Bonds due 2015
Ordinary shares
Issuance of ordinary shares in exchange of bonds payable												$ 27,860	¥ 171,431
Conversion to ordinary shares (in shares)												38,397,655	38,397,655
Ordinary Shares \| EDC Holding
Ordinary shares
Ordinary shares issued as part of the consideration to acquire EDC Holding														88,352,558
Fair value of ordinary shares issued as part of the consideration to acquire EDC Holding \| ¥														¥ 472,945
Series C
Ordinary shares
Conversion to ordinary shares (in shares)																	(238,526,241)
Minimum holding of issued share capital							40.00%	40.00%
ADS
Ordinary shares
Ordinary shares issued (in shares)			8,000,000
Price per share (in USD/share) \| $ / shares					$ 10.00
Conversion price (in USD/share) \| $ / shares																			$ 51.58
Price per share sold (in dollars per ADS) \| $ / shares			$ 26.00
ADS \| IPO
Ordinary shares
Ordinary shares issued (in shares)					19,250,000
ADS \| Over-Allotment Option
Ordinary shares
Ordinary shares issued (in shares)	225,000	225,000		820,735
Class A
Ordinary shares
Ordinary shares issued (in shares)			64,000,000
Number of votes per share at general meetings \| Vote						1
Common stock, outstanding shares (in shares)																			939,479,307	873,679,343
Number of ADS per Class A ordinary share				8
Ordinary shares issued as preferred stock dividends (in shares)					31,490,164
Class A \| Convertible Bonds Due 2019
Ordinary shares
Conversion of convertible bonds (in shares)									97,870,263
Conversion price (in USD/share) \| $ / shares									$ 1.675262
Class A \| IPO
Ordinary shares
Ordinary shares issued (in shares)					154,000,000
Class A \| Over-Allotment Option
Ordinary shares
Ordinary shares issued (in shares)	1,800,000	1,800,000		6,565,880
Class B
Ordinary shares
Number of votes per share at general meetings \| Vote						1
Number of votes per share regarding certain matters in general meetings \| Vote						20
Number of directors for simple majority \| director						6
Right to nominate, number of directors \| director						5
Common stock, outstanding shares (in shares)																			67,590,336	67,590,336
Redeemable preferred shares
Ordinary shares
Conversion to ordinary shares (in shares)																	(349,087,677)
Number of shares converted					(349,087,677)
Conversion ratio of preferred shares to ordinary share					1
SBCVC \| ADS
Ordinary shares
Number of shares sold			3,000,000
Price per share sold (in dollars per ADS) \| $ / shares			$ 26
SBCVC \| ADS \| Over-Allotment Option
Ordinary shares
Ordinary shares issued (in shares)	1,425,000	1,425,000
SBCVC \| Class A
Ordinary shares
Number of shares sold			24,000,000
SBCVC \| Class A \| Over-Allotment Option
Ordinary shares
Ordinary shares issued (in shares)	11,400,000	11,400,000
CyrusOne \| Class A
Ordinary shares
Ordinary shares issued (in shares)										64,257,028
Price per share (in USD/share) \| $ / shares										$ 1.55625

SHARE-BASED COMPENSATION - Plans and Grants (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	1 Months Ended				12 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 CNY (¥) ¥ / shares shares	May 31, 2016 $ / shares shares	May 31, 2016 ¥ / shares shares	Dec. 31, 2018 ¥ / shares shares	Dec. 31, 2017 ¥ / shares shares	Dec. 31, 2016 ¥ / shares shares	Aug. 31, 2016 shares	Jul. 31, 2014 shares
SHARE-BASED COMPENSATION
Share options granted (in shares)					500,000	333,334	11,551,507
Exercise price (in USD or CNY per share) \| ¥ / shares					¥ 5.0	¥ 5.2	¥ 5.2
The 2014 Plan
SHARE-BASED COMPENSATION
Total number shares which may be issued									29,240,000
The 2014 Plan \| A Consultant granted 500,000 options
SHARE-BASED COMPENSATION
Share options granted (in shares)	500,000	500,000
Exercise price (in USD or CNY per share) \| (per share)	$ 0.7792	¥ 5.0
Contractual term	5 years	5 years
Fair value of options granted and vested	$ 2,429	¥ 16,073
The 2014 Plan \| Employees, officers and directors \| Share options
SHARE-BASED COMPENSATION
Share options granted (in shares)			11,084,840	11,084,840
Exercise price (in USD or CNY per share) \| (per share)			$ 0.7792	¥ 5.0328
Contractual term			5 years	5 years
The 2016 Plan
SHARE-BASED COMPENSATION
Total number shares which may be issued								56,707,560

SHARE-BASED COMPENSATION - Stock Option Activity (Details) - ¥ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Number of options
Outstanding, beginning (in shares)	28,087,236	28,589,782	17,193,534
Granted (in shares)	500,000	333,334	11,551,507
Exercised (in shares)	(3,614,464)	(816,880)
Forfeited (in shares)	(193,340)	(19,000)	(155,259)
Outstanding, ending (in shares)	24,779,432	28,087,236	28,589,782
Weighted average exercise price
Outstanding, beginning (in RMB per share)	¥ 5.1	¥ 5.2	¥ 4.8
Granted (in RMB per share)	5.0	5.2	5.2
Exercised (in RMB per share)	5.2	5.3
Forfeited (in RMB per share)	5.0	5.3	4.8
Outstanding, ending (in RMB per share)	5.3	5.1	5.2
Weighted average grant-date fair value per option
Outstanding, beginning (in RMB per share)	3.2	3.2	1.9
Granted (in RMB per share)	31.2	10.6	4.9
Exercised (in RMB per share)	4.5	1.9
Forfeited (in RMB per share)	6.2	1.9	1.9
Outstanding, ending (in RMB per share)	¥ 2.2	¥ 3.2	¥ 3.2
Options vested and expect to vest
Number of options	24,779,432
Weighted average exercise price (in RMB per share)	¥ 5.3
Weighted average grant-date fair value per option (in RMB per share)	¥ 2.2
Stock options outstanding and stock options exercisable
Number of shares	24,779,432
Weighted average remaining contractual life (years)	8 months 12 days
Weighted average exercise price (in RMB per share)	¥ 5.3
External consultants
Other disclosures
Forfeitable and unvested (in shares)	0	266,666
Employee stock options
Other disclosures
Forfeitable and unvested (in shares)	0	0

SHARE-BASED COMPENSATION - Fair Value Assumptions - Stock Options (Details) - 1 months ended May 31, 2016 - Share options	$ / shares	¥ / shares
Fair value assumptions
Risk-free rate of return (as a percent)	1.98%
Volatility (as a percent)	28.50%
Exercise multiple	2.20
Fair value of underlying ordinary share \| (per share)	$ 1.51	¥ 9.8
Expected term	5 years

SHARE-BASED COMPENSATION - Settlement of Liability Classified Restricted Shares (Details) - CNY (¥) ¥ in Thousands	1 Months Ended		7 Months Ended	9 Months Ended	12 Months Ended
	Aug. 31, 2016	May 31, 2016	Nov. 30, 2017	Nov. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SHARE-BASED COMPENSATION
Compensation expense					¥ 105,877	¥ 59,843	¥ 64,165
Settlement of liability-classified restricted shares award					6,357	4,462	7,539
Directors
SHARE-BASED COMPENSATION
Liability to settle		¥ 11,733
Liability to settle in cash		4,194
Liability to settle in shares		7,539
Compensation expense		¥ 11,733			0
Liability paid in cash	¥ 4,194
Restricted shares
SHARE-BASED COMPENSATION
Compensation expense					¥ 89,804	¥ 56,237	¥ 4,697
Restricted shares \| Directors
SHARE-BASED COMPENSATION
Settlement of liability-classified restricted shares award			¥ 4,462	¥ 6,357
Settlement of liability-classified restricted shares award (in shares)	877,400		502,000	260,560
Percentage of shares restricted to sale or otherwise disposal	50.00%
Period of restriction on sale or otherwise disposal	1 year

SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	1 Months Ended			12 Months Ended
	Aug. 31, 2018	Jul. 31, 2017	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Weighted average grant-date fair value per share (RMB)
Total share based compensation expense				¥ 105,877	¥ 59,843	¥ 64,165
Restricted shares
Number of Shares
Outstanding, beginning				24,525,620	12,910,080
Granted (in shares)				13,202,512	13,977,060	13,787,480
Vested (in shares)				(7,326,620)	(2,123,120)	(877,400)
Forfeited (in shares)				(891,008)	(238,400)
Outstanding, end			12,910,080	29,510,504	24,525,620	12,910,080
Weighted average grant-date fair value per share (RMB)
Outstanding, beginning				¥ 5.3	¥ 6.0
Granted (in RMB per share)				14.5	5.2	¥ 6.1
Vested (in RMB per share)				6.0	8.5	8.6
Forfeited (in RMB per share)				5.9	6.8
Outstanding, end			¥ 6.0	¥ 9.3	¥ 5.3	¥ 6.0
Total share based compensation expense				¥ 89,804	¥ 56,237	¥ 4,697
Total unrecognized compensation expense				¥ 179,834
Weighted average period over which unrecognized compensation expense is expected to be recognized				1 year 8 months 16 days
Restricted shares \| Employees, officers and directors
Number of Shares
Granted (in shares)	12,941,952	13,475,060	12,910,080

SHARE-BASED COMPENSATION - Fair Value Assumptions - Restricted Shares (Details) - Restricted shares	7 Months Ended	8 Months Ended	12 Months Ended
	Jul. 31, 2017 $ / shares	Aug. 31, 2018 $ / shares	Dec. 31, 2016 $ / shares	Aug. 31, 2018 ¥ / shares	Jul. 31, 2017 ¥ / shares	Dec. 31, 2016 ¥ / shares
Fair value assumptions
Volatility (as a percent)		71.85%
Share price at grant date \| (per share)	$ 1.191	$ 3.125	$ 1.24	¥ 21.30	¥ 8.00	¥ 8.6
Maximum
Fair value assumptions
Risk-free rate of return (as a percent)	1.63%	2.418%	1.65%
Volatility (as a percent)	21.48%		24.80%
Expected term	4 years	4 years	5 years
Minimum
Fair value assumptions
Risk-free rate of return (as a percent)	1.29%	2.047%	0.68%
Volatility (as a percent)	20.43%		22.35%
Expected term	2 years	2 years	1 year

SHARE-BASED COMPENSATION - Expenses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SHARE-BASED COMPENSATION
Compensation expense	¥ 105,877	¥ 59,843	¥ 64,165
Cost of revenue
SHARE-BASED COMPENSATION
Compensation expense	18,008	9,941	2,114
Selling and marketing expenses
SHARE-BASED COMPENSATION
Compensation expense	25,213	18,390	6,590
General and administrative expenses
SHARE-BASED COMPENSATION
Compensation expense	61,707	30,866	55,409
Research and development expenses
SHARE-BASED COMPENSATION
Compensation expense	¥ 949	¥ 646	¥ 52

REVENUE (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
REVENUE (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue recognition
Net revenue	¥ 2,792,077	¥ 1,616,166	¥ 1,055,960
Service revenue
Revenue recognition
Net revenue	2,759,490	1,591,860	1,003,015
Colocation services
Revenue recognition
Net revenue	2,104,259	1,219,086	770,145
Managed service and others
Revenue recognition
Net revenue	655,231	372,774	232,870
Equipment sales
Revenue recognition
Net revenue	¥ 32,587	¥ 24,306	¥ 52,945

INCOME TAX - Tax rate (Details)	12 Months Ended
INCOME TAX - Tax rate (Details)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INCOME TAX
PRC enterprise income tax rate (as a percent)	25.00%	25.00%	25.00%
PRC
INCOME TAX
PRC enterprise income tax rate (as a percent)	25.00%
Hong Kong SAR
INCOME TAX
Hong Kong Profits Tax rate (as a percent)	16.50%

INCOME TAX - By tax Jurisdictions (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Loss before income taxes:
PRC	¥ 237,232	¥ 130,961	¥ 144,158
Other jurisdictions	202,427	202,015	140,569
Total loss before income taxes	439,659	332,976	284,727
Current tax expenses:
PRC	27,206	5,546	311
Other jurisdictions			1,998
Total current tax expenses	27,206	5,546	2,309
Deferred tax benefits:
PRC	(36,597)	(11,683)	(10,935)
Other jurisdictions		61	311
Total deferred tax benefits	(36,597)	(11,622)	(10,624)
Total income taxes benefits	¥ (9,391)	¥ (6,076)	¥ (8,315)

INCOME TAX - Reconciliation of statutory tax rate and effective tax rate (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of the differences between actual income tax expense and the PRC statutory tax rate
PRC enterprise income tax rate (as a percent)	25.00%	25.00%	25.00%
Non-PRC entities not subject to income tax (as a percent)	(9.20%)	(14.80%)	(13.70%)
Tax differential for entities in non-PRC jurisdiction (as a percent)	(1.20%)	(0.80%)	0.50%
Tax effect of current year permanent differences (as a percent)	(1.30%)	0.00%	(0.30%)
Expiration of unused net operating losses	(10.10%)	(2.60%)	(2.90%)
Change in valuation allowance (as a percent)	(1.00%)	(5.20%)	(5.50%)
Return to provision adjustment on permanent differences	(0.10%)	0.20%	(0.20%)
Effective tax rate (as a percent)	2.10%	1.80%	2.90%

INCOME TAX - Deferred tax assets and liabilities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Allowance for accounts receivable	¥ 48
Government subsidy	3,643	¥ 4,197
Accrued expenses	26,867	14,024
Asset retirement obligation	8,970	4,412
Net operating loss carry forwards	192,505	170,267
Total gross deferred tax assets	232,033	192,900
Valuation allowance on deferred tax assets	(155,852)	(152,241)	¥ (134,935)	¥ (118,952)
Deferred tax assets, net of valuation allowance	76,181	40,659
Deferred tax liabilities:
Property and equipment	(80,544)	(52,417)
Intangible assets	(116,156)	(82,305)
Prepaid land use rights	(1,653)	(1,693)
Obligation under capital lease and other financing obligations	(12,732)	(14,216)
Total deferred tax liabilities	(211,085)	(150,631)
Net deferred tax liabilities	(134,904)	(109,972)
Analysis as:
Deferred tax assets	36,974	14,305
Deferred tax liabilities	(171,878)	(124,277)
Net deferred tax liabilities	¥ (134,904)	¥ (109,972)

INCOME TAX - Movement of the valuation allowance (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Movement of the valuation allowance
Balance at the beginning of the year	¥ 152,241	¥ 134,935	¥ 118,952
Increase during the year	3,611	17,306	15,983
Balance at the end of the year	¥ 155,852	¥ 152,241	¥ 134,935

INCOME TAX - Net operating losses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Operating losses carry forwards
PRC enterprise income tax rate (as a percent)	25.00%	25.00%	25.00%
State administration of taxation, China
Operating losses carry forwards
Net operating losses carry forwards	¥ 722,276
Net operating losses carry forwards expire if unused by December 31, 2019	34,591
Net operating losses carry forwards expire if unused by December 31, 2020	65,233
Net operating losses carry forwards expire if unused by December 31, 2021	59,735
Net operating losses carry forwards expire if unused by December 31, 2022	183,984
Net operating losses carry forwards expire if unused by December 31, 2023	¥ 378,733
PRC enterprise income tax rate (as a percent)	25.00%
Withholding tax for dividends distributed by a PRC-resident enterprise to its non-PRC-resident corporate investor (as a percent)	10.00%

DISTRIBUTION OF PROFIT (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
DISTRIBUTION OF PROFIT (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
DISTRIBUTION OF PROFIT
Percentage of after-tax profits required to be appropriated to general reserve fund	10.00%
General reserve as a percentage of registered capital up to which after-tax profit of PRC subsidiaries and VIEs could discontinue allocations to the general reserve fund	50.00%
Aggregate amounts of capital and statutory reserves restricted	¥ 4,768,715	¥ 2,495,075
Amount of non-distributable general reserve fund	¥ 579	¥ 214

LOSS PER ORDINARY SHARE - Computation of basic and diluted loss per share (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands					12 Months Ended
	Jan. 29, 2018 USD ($)	Jan. 29, 2018 CNY (¥)	Nov. 07, 2016 USD ($)	Nov. 07, 2016 CNY (¥)	Dec. 31, 2018 CNY (¥) ¥ / shares shares	Dec. 31, 2017 CNY (¥) ¥ / shares shares	Dec. 31, 2016 CNY (¥) ¥ / shares shares	Dec. 31, 2015 CNY (¥)	Dec. 31, 2014 CNY (¥)
Computation of basic and diluted loss per share
Net loss					¥ 430,268	¥ 326,900	¥ 276,412
Change in redemption value of redeemable preferred shares							205,670
Cumulative dividend on preferred shares							332,660	¥ 7,127	¥ 3,509
Net loss attributable to ordinary shareholders					¥ (430,268)	¥ (326,900)	¥ (403,402)
Weighted average number of ordinary shares outstanding-basic and diluted \| shares					990,255,959	784,566,371	299,093,937
Loss per ordinary share - basic and diluted \| ¥ / shares					¥ (0.43)	¥ (0.42)	¥ (1.35)
Conversion of preferred shares to ordinary shares							¥ 97,274
Dividends on redeemable preferred shares							302,944
Preference dividends			$ 50,812	¥ 343,296			343,296
Net proceeds from issuance of ordinary shares	$ 202,696	¥ 1,283,308			¥ 1,283,308	¥ 649,834	¥ 1,221,518
Ordinary Shares
Computation of basic and diluted loss per share
Shares issued to depository bank (in shares) \| shares						20,000,000
Net proceeds from issuance of ordinary shares						¥ 0

LOSS PER ORDINARY SHARE - Excluded from the computation of diluted loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Antidilutive securities excluded from computation of earnings per share
Total	100,817,536	52,612,856	135,477,699
Share options/restricted shares
Antidilutive securities excluded from computation of earnings per share
Total	54,289,936	52,612,856	41,499,862
Convertible bonds payable
Antidilutive securities excluded from computation of earnings per share
Total	46,527,600		93,977,837

SEGMENT INFORMATION (Details) ¥ in Thousands	12 Months Ended
SEGMENT INFORMATION (Details) ¥ in Thousands	Dec. 31, 2018 CNY (¥) segment	Dec. 31, 2017 CNY (¥)
Number of operating segments \| segment	1
Hong Kong SAR
Long-lived assets \| ¥	¥ 742,390	¥ 6,695

MAJOR CUSTOMERS (Details) - Revenues - Customer concentration ¥ in Thousands	12 Months Ended
	Dec. 31, 2018 CNY (¥) customer	Dec. 31, 2017 CNY (¥) customer	Dec. 31, 2016 CNY (¥) customer
MAJOR CUSTOMERS
Number of contracting customers generated over 10% of the Company's total revenues \| customer	3	3	2
Customer A
MAJOR CUSTOMERS
Revenue	¥ 563,698	¥ 318,359	¥ 169,052
Customer B
MAJOR CUSTOMERS
Revenue	490,523	166,384	¥ 153,863
Customer C
MAJOR CUSTOMERS
Revenue	¥ 376,881	¥ 163,719

COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Capital commitments
Capital commitments outstanding not provided for in the financial statements, Contracted for	¥ 1,017,325	¥ 1,065,551

RELATED PARTY TRANSACTIONS (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands					1 Months Ended	12 Months Ended
	Nov. 07, 2016 USD ($) $ / shares shares	Nov. 07, 2016 CNY (¥) shares	Jan. 29, 2016 USD ($)	Jan. 29, 2016 CNY (¥)	Nov. 30, 2017 CNY (¥) shares	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2015 USD ($)	Dec. 31, 2015 CNY (¥)	Dec. 31, 2018 $ / shares	Dec. 31, 2018 CNY (¥)	Nov. 30, 2017 $ / shares	Jan. 29, 2016 CNY (¥)
RELATED PARTY TRANSACTIONS
Preference dividends	$ 50,812	¥ 343,296							¥ 343,296
Repayment of a related party loan									65,474
Convertible bonds from a related party									327,580
Conversion of convertible bonds from a related party							¥ 366,958
Preference dividend paid in cash	11,449	76,502
Issuance of ordinary shares to settle preference dividend	$ 39,363	¥ 266,794							266,794
Ordinary shares issued as preferred stock dividends (in shares) \| shares	31,490,164	31,490,164
Outstanding short-term borrowings							462,946						¥ 684,788
Outstanding short-term loan repaid by a loan from related party									65,474
Affiliated Entity
RELATED PARTY TRANSACTIONS
Preference dividends									343,296
CyrusOne
RELATED PARTY TRANSACTIONS
Commission income						¥ 140
STT GDC Pte. Ltd.
RELATED PARTY TRANSACTIONS
Preference dividends									223,225
Repayment of a related party loan								$ 10,000	64,936
Interest expenses							¥ 30,078		32,245	$ 397	¥ 2,579
Convertible bonds from a related party			$ 50,000	¥ 327,580
Outstanding short-term borrowings			10,000												¥ 65,474
Outstanding short-term loan repaid by a loan from related party			$ 10,000	¥ 65,474
Accrued but unpaid cash interest relinquished					¥ 4,991
SBCVC
RELATED PARTY TRANSACTIONS
Preference dividends									109,665
Other non-principal preferred shareholders
RELATED PARTY TRANSACTIONS
Preference dividends									¥ 10,406
ADS
RELATED PARTY TRANSACTIONS
Initial public offering price (dollar per share) \| $ / shares	$ 10.00
Basis of issuance of shares for debt conversion (in dollar per share) \| $ / shares												$ 51.58
Class A
RELATED PARTY TRANSACTIONS
Ordinary shares issued as preferred stock dividends (in shares) \| shares	31,490,164	31,490,164
Class A \| STT GDC Pte. Ltd.
RELATED PARTY TRANSACTIONS
Principal amount and accrued interest converted to Class A Ordinary shares (in shares) \| shares					32,540,515
Basis of issuance of shares for debt conversion (in dollar per share) \| $ / shares														$ 1.675262
Ordinary Shares
RELATED PARTY TRANSACTIONS
Initial public offering price (dollar per share) \| $ / shares	$ 1.25

PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current assets
Cash	¥ 2,161,622	¥ 1,873,446
Prepaid expenses	64,843	50,373
Other current assets	110,526	42,651
Total current assets	3,037,396	2,454,028
Restricted cash	123,039	63,317
Other non-current assets	212,944	211,785
Total assets	20,885,243	13,144,567
Current liabilities
Accounts payable	1,508,020	1,110,411
Accrued expenses and other payables	476,564	368,624
Total current liabilities	3,507,879	2,423,071
Long-term borrowings	5,203,708	3,459,765
Convertible bonds payable	2,004,714
Other long-term liabilities	340,812	358,898
Total liabilities	15,363,318	8,669,055
Shareholders' Equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 shares authorized; 873,679,343 and 939,479,307 Class A ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively)	341	320
Additional paid-in capital	7,275,945	5,861,445
Accumulated other comprehensive loss	(139,254)	(200,688)
Accumulated deficit	(1,615,107)	(1,185,565)
Total shareholders' equity	5,521,925	4,475,512	¥ 2,986,474	¥ (340,505)
Commitments and contingencies
Total liabilities and shareholders' equity	20,885,243	13,144,567
Parent Company \| Reportable Legal Entities
Current assets
Cash	801,701	999,194
Prepaid expenses	6,716	6,295
Other current assets	17,940
Total current assets	826,357	1,005,489
Restricted cash	15,787
Investment and loans to subsidiaries	7,118,336	3,477,331
Other non-current assets		14,936
Total assets	7,960,480	4,497,756
Current liabilities
Accounts payable	166	3,597
Accrued expenses and other payables	34,442	9,973
Due to subsidiaries	913	843
Total current liabilities	35,521	14,413
Long-term borrowings	388,832
Convertible bonds payable	2,004,714
Other long-term liabilities	9,488	7,831
Total liabilities	2,438,555	22,244
Shareholders' Equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 shares authorized; 873,679,343 and 939,479,307 Class A ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2017 and December 31, 2018, respectively)	341	320
Additional paid-in capital	7,275,945	5,861,445
Accumulated other comprehensive loss	(139,254)	(200,688)
Accumulated deficit	(1,615,107)	(1,185,565)
Total shareholders' equity	5,521,925	4,475,512
Commitments and contingencies
Total liabilities and shareholders' equity	¥ 7,960,480	¥ 4,497,756

PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Parenthetical) (Details) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Condensed Balance Sheets
Ordinary shares, par value (in dollars per share)	$ 0.00005	$ 0.00005
Ordinary shares, shares authorized	2,002,000,000	2,002,000,000
Class A
Condensed Balance Sheets
Ordinary shares, shares issued	939,479,307	873,679,343
Ordinary shares, shares outstanding	939,479,307	873,679,343
Class B
Condensed Balance Sheets
Ordinary shares, shares issued	67,590,336	67,590,336
Ordinary shares, shares outstanding	67,590,336	67,590,336
Parent Company \| Reportable Legal Entities
Condensed Balance Sheets
Ordinary shares, par value (in dollars per share)	$ 0.00005	$ 0.00005
Ordinary shares, shares authorized	2,002,000,000	2,002,000,000
Parent Company \| Reportable Legal Entities \| Class A
Condensed Balance Sheets
Ordinary shares, shares issued	939,479,307	873,679,343
Ordinary shares, shares outstanding	939,479,307
Parent Company \| Reportable Legal Entities \| Class B
Condensed Balance Sheets
Ordinary shares, shares issued	67,590,336	67,590,336
Ordinary shares, shares outstanding	67,590,336	67,590,336

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Operations (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Statements of Operations
Net revenue	¥ 2,792,077	¥ 1,616,166	¥ 1,055,960
Cost of revenue	(2,169,636)	(1,207,694)	(790,286)
Gross loss	622,441	408,472	265,674
Operating expenses
Selling and marketing expenses	(110,570)	(90,118)	(71,578)
General and administrative expenses	(329,601)	(228,864)	(227,370)
Research and development expenses	(13,915)	(7,261)	(9,100)
(Loss) Income from operations	168,355	82,229	(42,374)
Other income (expenses):
Interest income	19,213	5,600	2,070
Interest expenses	(656,186)	(412,003)	(265,234)
Others, net	5,436	435	284
Loss before income taxes	(439,659)	(332,976)	(284,727)
Income tax expenses	9,391	6,076	8,315
Net loss	(430,268)	(326,900)	(276,412)
Parent Company \| Reportable Legal Entities
Condensed Statements of Operations
Cost of revenue	(21,132)	(10,392)	(2,381)
Gross loss	(21,132)	(10,392)	(2,381)
Operating expenses
Selling and marketing expenses	(26,595)	(22,528)	(8,914)
General and administrative expenses	(96,581)	(59,500)	(82,794)
Research and development expenses	(949)	(646)	(52)
(Loss) Income from operations	(145,257)	(93,066)	(94,141)
Other income (expenses):
Interest income	14,907	3,901	16
Interest expenses	(48,809)	(90,408)	(97,603)
Equity in loss of subsidiaries	(251,085)	(147,340)	(84,952)
Others, net	(24)	13	268
Loss before income taxes	(430,268)	(326,900)	(276,412)
Net loss	¥ (430,268)	¥ (326,900)	¥ (276,412)

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive Loss (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Statements of Comprehensive Loss
Net loss	¥ (430,268)	¥ (326,900)	¥ (276,412)
Other comprehensive (loss) income
Foreign currency translation adjustments, net of nil tax	61,434	(8,608)	(130,131)
Comprehensive loss	(368,834)	(335,508)	(406,543)
Parent Company \| Reportable Legal Entities
Condensed Statements of Comprehensive Loss
Net loss	(430,268)	(326,900)	(276,412)
Other comprehensive (loss) income
Foreign currency translation adjustments, net of nil tax	61,434	(8,608)	(130,131)
Comprehensive loss	¥ (368,834)	¥ (335,508)	¥ (406,543)

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive Loss (Parenthetical) (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Statements of Comprehensive Loss
Foreign currency translation adjustments, tax	¥ 0	¥ 0	¥ 0
Parent Company \| Reportable Legal Entities
Condensed Statements of Comprehensive Loss
Foreign currency translation adjustments, tax	¥ 0	¥ 0	¥ 0

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) ¥ in Thousands, $ in Thousands					12 Months Ended
	Jan. 29, 2018 USD ($)	Jan. 29, 2018 CNY (¥)	Nov. 07, 2016 USD ($)	Nov. 07, 2016 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Operating activities:
Net cash used in operating activities					¥ (12,910)	¥ (167,816)	¥ (128,980)
Investing activities:
Deposits paid for potential acquisitions					(1,000)	(5,000)	(15,000)
Net cash used in investing activities					(4,733,050)	(2,005,054)	(1,147,064)
Financing activities:
Proceeds from exercise of stock options					16,866	3,377
Proceeds from long-term borrowings					2,814,197	3,086,390	1,269,996
Payment of issuance cost of borrowings					(91,124)	(62,460)	(57,438)
Net proceeds from issuance of convertible bonds					1,867,304		327,580
Repayment of a related party loan							(65,474)
Net proceeds from issuance of ordinary shares	$ 202,696	¥ 1,283,308			1,283,308	649,834	1,221,518
Payment of preferred shares dividends							(76,502)
Net cash provided by financing activities					4,876,806	2,355,728	2,128,614
Effect of exchange rate changes on cash and restricted cash					206,302	(74,250)	55,499
Net increase in cash and restricted cash					337,148	108,608	908,069
Cash and restricted cash at beginning of year					1,947,600	1,838,992	930,923
Cash and restricted cash at end of year					2,284,748	1,947,600	1,838,992
Supplemental disclosures of cash flow information
Interest paid					633,063	358,748	228,678
Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted shares award					6,357	4,462	7,539
Issuance of ordinary shares to settle preference dividend			$ 39,363	¥ 266,794			266,794
Conversion of convertible bonds						1,106,227
Parent Company \| Reportable Legal Entities
Operating activities:
Net cash used in operating activities					(33,729)	(58,068)	(62,591)
Investing activities:
Deposits paid for potential acquisitions							(15,000)
Increase of due from subsidiaries					(3,846,353)	(588,768)	(990,617)
Net cash used in investing activities					(3,846,353)	(588,768)	(1,005,617)
Financing activities:
Proceeds from exercise of stock options					16,866	3,377
Proceeds from long-term borrowings					413,433
Payment of issuance cost of borrowings					(25,751)
Net proceeds from issuance of convertible bonds					1,867,304		327,580
Repayment of a related party loan							(65,474)
Net proceeds from issuance of ordinary shares					1,283,308	649,834	1,221,518
Payment of preferred shares dividends							(76,502)
Net cash provided by financing activities					3,555,160	653,211	1,407,122
Effect of exchange rate changes on cash and restricted cash					143,216	(37,808)	47,787
Net increase in cash and restricted cash					(181,706)	(31,433)	386,701
Cash and restricted cash at beginning of year					999,194	1,030,627	643,926
Cash and restricted cash at end of year					817,488	999,194	1,030,627
Supplemental disclosures of cash flow information
Interest paid					24,308	33,920	45,495
Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted shares award					¥ 6,357	4,462	7,539
Issuance of ordinary shares to settle preference dividend							¥ 266,794
Conversion of convertible bonds						¥ 1,106,227

SUBSEQUENT EVENT (Details) - Subsequent Event - Facility Agreement with a third party bank - CNY (¥) ¥ in Thousands		1 Months Ended
	Mar. 11, 2019	Jan. 31, 2019
SUBSEQUENT EVENTS
Credit facility entered		¥ 309,000
Term of credit facility		60 months
Interest rate (as a percent)		6.30%
Loan drew down	¥ 110,323