0001104659-22-052232 | 20-F | XBRL Viewer

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LOSS PER CLASS A and CLASS B ORDINARY SHARE - Excluded from the computation of diluted loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Antidilutive securities excluded from computation of earnings per share
Total	75,456,769	77,951,817	94,513,992
Share options/restricted shares
Antidilutive securities excluded from computation of earnings per share
Total	28,930,720	31,425,768	47,986,392
Convertible bonds
Antidilutive securities excluded from computation of earnings per share
Total	46,526,049	46,526,049	46,527,600

INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Intangible assets
Intangible assets, gross	¥ 1,657,682	¥ 967,882
Less: accumulated amortization	(375,046)	(182,560)
Intangible assets, net	1,282,636	785,322
Amortization of intangible assets	192,486	68,688	¥ 58,312
Estimated future amortization expense
2022	235,290
2023	233,748
2024	226,890
2025	212,577
2026	206,387
Thereafter	167,744
Customer relationships
Intangible assets
Intangible assets, gross	1,641,900	952,100
Licenses
Intangible assets
Intangible assets, gross	¥ 15,782	¥ 15,782

SEGMENT INFORMATION	12 Months Ended
Dec. 31, 2021
SEGMENT INFORMATION
SEGMENT INFORMATION	24 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. During the years ended December 31, 2019, 2020 and 2021, substantially all of the Company’s operations are in the PRC. As of December 31, 2020 and 2021, the long-lived assets amounted to RMB1,627,832 and RMB2,670,937, respectively, were located in Hong Kong SAR, nil and RMB167,818, respectively, were located in Singapore and substantially all of the remaining long-lived assets were in the PRC.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2021

SEGMENT INFORMATION

SEGMENT INFORMATION

24 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.

During the years ended December 31, 2019, 2020 and 2021, substantially all of the Company’s operations are in the PRC. As of December 31, 2020 and 2021, the long-lived assets amounted to RMB1,627,832 and RMB2,670,937, respectively, were located in Hong Kong SAR, nil and RMB167,818, respectively, were located in Singapore and substantially all of the remaining long-lived assets were in the PRC.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
Dec. 31, 2021
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” excluding Taiwan, the Hong Kong Special Administrative Region (the “Hong Kong SAR”) and the Macau Special Administrative Region for the purposes of these consolidated financial statements only), Hong Kong SAR, Singapore and Malaysia. The Company operates its data centers in Hong Kong SAR, Shanghai Municipality, Beijing Municipality, Chongqing Municipality, Jiangsu Province, Guangdong Province, Sichuan Province, Hebei Province and Inner Mongolia of the PRC and serves customers that primarily operate in the cloud, 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.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

12 Months Ended

Dec. 31, 2021

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” excluding Taiwan, the Hong Kong Special Administrative Region (the “Hong Kong SAR”) and the Macau Special Administrative Region for the purposes of these consolidated financial statements only), Hong Kong SAR, Singapore and Malaysia. The Company operates its data centers in Hong Kong SAR, Shanghai Municipality, Beijing Municipality, Chongqing Municipality, Jiangsu Province, Guangdong Province, Sichuan Province, Hebei Province and Inner Mongolia of the PRC and serves customers that primarily operate in the cloud, 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.

SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 08, 2022	Jun. 05, 2018
Subsequent Event [Line Items]
Principal amount		$ 1
Conversion price (in USD/share)		$ 51.58
Subsequent Events \| Convertible Senior Notes due 2029 [Member]
Subsequent Event [Line Items]
Principal amount	$ 620,000
Interest per annum (as a percent)	0.25%
Conversion price (in USD/share)	$ 50
Repurchase price as a percentage of principal amount	100.00%

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Foreign currency translation adjustments, income taxes	¥ 0	¥ 0	¥ 0

FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2021

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT

17 FAIR VALUE MEASUREMENT

The Company did not have financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2021.

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

●

Short-term financial instruments (cash, restricted cash, 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 various 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 RMB3,683,816 and RMB2,246,231 as of December 31, 2020 and 2021, respectively. The fair value was measured based on the price in the open market.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

27 RELATED PARTY TRANSACTIONS

In 2019, 2020 and 2021, the related parties of the Company are as follows:


Name of party		Relationship

STT GDC		Principal ordinary shareholder of the Company
STT Singapore DC Pte. Ltd.		Subsidiary of STT GDC
STT DEFU 2 Pte. Ltd.		Subsidiary of STT GDC

The Company entered into the following material related party transactions.

(a) Major transactions with related parties


		Years ended December 31,
		2019	2020	2021

Commission income	(Note)
STT Singapore DC Pte. Ltd.		624	553	546
STT DEFU 2 Pte. Ltd.		332	485	464
		956	1,038	1,010

(b) Major balances with related parties


		As of December 31,
		2020	2021

Amount due to related parties:	(Note)
STT Singapore DC Pte. Ltd.		7,938	13,905
STT DEFU 2 Pte. Ltd.		7,422	10,239
		15,360	24,144

Note: During the year ended December 31, 2019, the Company successfully referred a customer to STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. and recognized RMB624 and RMB332, respectively, as commission income. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB55,392 and RMB43,069, respectively. As of December 31, 2019, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers located in China, which is recorded in accrued expenses and other payables.

During the year ended December 31, 2020, the Company recognized RMB553 and RMB485, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB40,503 and RMB40,256, respectively. As of December 31, 2020, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables.

During the year ended December 31, 2021, the Company recognized RMB546 and RMB464, respectively, as commission income from STT Singapore DC Pte. Ltd. and STT DEFU 2 Pte. Ltd. Income earned is based on amount billed on behalf of these two related parties to the ultimate customer amounting to RMB45,345 and RMB39,818, respectively. As of December 31, 2021, amount due to related parties represents the service fee received on behalf of the related parties for one of their customers, which is recorded in accrued expenses and other payables.

These amounts due to related parties are trade in nature and are settled on a recurring basis.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets (Details)	12 Months Ended
	Dec. 31, 2021
Customer Contracts \| Minimum
Intangible assets
Weighted-average amortization period (in years)	5 years
Customer Contracts \| Maximum
Intangible assets
Weighted-average amortization period (in years)	15 years
Licenses
Intangible assets
Weighted-average amortization period (in years)	20 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Asset retirement costs (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Activity of the asset retirement obligation liability
Asset retirement obligations at beginning of the year	¥ 76,909	¥ 52,441	¥ 35,879
Additions	22,745	20,384	13,572
Accretion expense	6,227	4,084	2,990
Settlement	(998)
Asset retirement obligations at end of the year	¥ 104,883	¥ 76,909	¥ 52,441

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Foreign currency translation adjustments, income taxes	¥ 0	¥ 0	¥ 0
Net loss attributable to redeemable non-controlling interests	¥ 2,592	¥ 2,807

LEASES (Tables)

12 Months Ended

Dec. 31, 2021

LEASES

Schedule of of lease cost


	Years ended December 31,
	2019	2020	2021

Finance lease cost:
- Amortization of right-of-use assets	222,101	423,075	546,437
- Interest on lease liabilities	299,511	465,692	592,835
Operating lease cost	100,469	195,869	313,752
Short-term lease cost	5,004	19,987	23,715
Variable lease cost (Note)	—	(55,599)	(786)

Total lease cost	627,085	1,049,024	1,475,953

Note: During the years ended December 31, 2020 and 2021, the Company was granted lease concessions of RMB55,188 and nil, respectively,by certain landlords due to the effects of the COVID-19 pandemic. The lease concessions were primarily in the form of rent reduction. Such concessions were recognized as variable lease cost (credit) in the period when the concession was granted. In addition, the Company recognized variable lease cost (credit) of RMB411 and RMB786 in the years ended December 31, 2020 and 2021, respectively, for certain finance lease and other financing obligations with floating interest rate.

Schedule of supplemental cash flow information related to leases


	Years ended December 31,
	2019	2020	2021

Cash paid for amounts included in measurement of lease liabilities (Note):
- Operating cash flows from finance leases	(248,417)	(389,679)	(591,189)
- Operating cash flows from operating leases	(116,295)	(141,480)	(236,589)
- Financing cash flows from finance leases	(302,679)	(198,234)	(265,481)

Non-cash information on lease liabilities arising from obtaining ROU assets
- Finance leases	708,757	1,099,698	25,731
- Operating leases	333,775	553,154	368,069

Note: The above table does not include cash paid for purchase of land use rights and initial direct costs of leases of RMB800,431,RMB744,761 and RMB875,162 in the years ended December 31, 2019, 2020 and 2021, respectively, which are included in “Payments for purchase of property and equipment and land use rights” in the consolidated statements of cash flows.

Schedule of weighted average remaining lease term and weighted average discount rate for leases


	As of December 31,
	2020	2021

Weighted average remaining lease term:
- Finance leases	13.7	12.0
- Operating leases	15.6	13.7

Weighted average discount rate:
- Finance leases	7.00%	6.94%
- Operating leases	6.23%	5.87%

Summary of maturities of lease liabilities


	As of December 31, 2020					As of December 31, 2021
			Total of					Total of
			finance lease					finance lease
		Other	and other	Operating			Other	and other	Operating
	Finance lease	financing	financing	lease		Finance lease	financing	financing	lease
	obligations	obligations	obligations	obligations	Total	obligations	obligations	obligations	obligations	Total
Within 1 year	577,933	225,350	803,283	180,447	983,730	621,196	701,350	1,322,546	260,935	1,583,481
After 1 year but within 2 years	600,348	354,625	954,973	190,243	1,145,216	640,445	713,338	1,353,783	246,970	1,600,753
After 2 years but within 3 years	620,461	356,204	976,665	149,300	1,125,965	672,306	714,084	1,386,390	249,383	1,635,773
After 3 years but within 4 years	650,855	377,930	1,028,785	151,545	1,180,330	714,035	454,918	1,168,953	212,829	1,381,782
After 4 years but within 5 years	681,090	361,073	1,042,163	151,063	1,193,226	735,219	417,214	1,152,433	178,627	1,331,060
After 5 years	7,792,794	723,755	8,516,549	1,839,384	10,355,933	7,623,211	473,110	8,096,321	1,935,590	10,031,911
Total	10,923,481	2,398,937	13,322,418	2,661,982	15,984,400	11,006,412	3,474,014	14,480,426	3,084,334	17,564,760

Less: total future interest	(4,343,379)	(578,822)	(4,922,201)	(1,032,829)	(5,955,030)	(4,192,322)	(608,178)	(4,800,500)	(1,055,035)	(5,855,535)
Less: estimated construction costs	-	(47,924)	(47,924)	-	(47,924)	-	(47,241)	(47,241)	-	(47,241)

Present value of lease and other financing obligations	6,580,102	1,772,191	8,352,293	1,629,153	9,981,446	6,814,090	2,818,595	9,632,685	2,029,299	11,661,984
Including:
- Current portion			254,412	86,258	340,670			699,145	145,739	844,884
- Non-current portion			8,097,881	1,542,895	9,640,776			8,933,540	1,883,560	10,817,100

Schedule of assets to secure lease and other financing obligations


	As of December 31,
	2020	2021

Accounts receivable	128,353	110,391
Equipment, net	578,777	1,452,070
	707,130	1,562,461

PREPAID LAND USE RIGHTS (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
PREPAID LAND USE RIGHTS (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Prepaid land use rights	¥ 716,492	¥ 736,695
Less: accumulated amortization	(81,539)	(58,505)
Prepaid land use rights, net	634,953	678,190
Amortization of prepaid land use rights	24,961	26,656	¥ 26,393
Asset pledged as security
Prepaid land use rights, net	¥ 634,953	¥ 678,190

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

26 COMMITMENTS AND CONTINGENCIES

(a) Capital commitments

Capital commitments outstanding as of December 31, 2020 and 2021 not provided for in the financial statements were as follows:



	As of December 31,
	2020	2021

Contracted for	3,949,623	3,790,769

In addition, commitment for purchase of land use rights was RMB20,650 and RMB90,938 as of December 31, 2020 and 2021, respectively.

(b) Lease commitments

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

LOANS AND BORROWINGS - Total working capital and project financing credit (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Loans and Borrowings
Outstanding loans (net of debt issuance costs)	¥ 4,639,674	¥ 1,230,756
Outstanding loans (net of debt issuance costs)	19,592,853	11,489,380
Debt issuance costs	197,119	¥ 226,085
Credit facilities
Loans and Borrowings
Total working capital and project financing credit facilities	31,433,242
Unused amount	7,362,664
Loan drew down	24,070,578
Outstanding loans (net of debt issuance costs)	4,297,406
Outstanding loans (net of debt issuance costs)	19,592,853
Credit facilities \| Short-term borrowing
Loans and Borrowings
Debt issuance costs	39,926
Credit facilities \| Long-term borrowing
Loans and Borrowings
Debt issuance costs	¥ 140,393
Minimum
Loans and Borrowings
Terms of secured loan agreements with various financial institutions for project development and working capital purpose	1 year
Maximum
Loans and Borrowings
Terms of secured loan agreements with various financial institutions for project development and working capital purpose	15 years

ORDINARY SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands							1 Months Ended		12 Months Ended
	Nov. 06, 2020 CNY (¥) shares	Nov. 02, 2020 $ / shares shares	Dec. 10, 2019 CNY (¥) shares	Dec. 10, 2019 USD ($) shares	Mar. 19, 2019 CNY (¥) shares	Mar. 19, 2019 USD ($) shares	Jun. 30, 2020 CNY (¥) item shares	Jun. 30, 2020 USD ($) item $ / shares shares	Dec. 31, 2021 director Vote shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2019 CNY (¥)
Ordinary shares
Ordinary shares issued (in shares)			6,318,680	6,318,680	13,731,343	13,731,343
Proceeds from offering, net of underwriting discounts and commissions and other issuance costs	¥ 12,441,232		¥ 1,951,884	$ 277,256	¥ 2,982,242	$ 444,699
Issuance of ordinary shares \| ¥										¥ 15,974,517	¥ 4,934,126
IPO
Ordinary shares
Ordinary shares issued (in shares)		20,000,000
Share price \| $ / shares		$ 80.88
Over-Allotment Option
Ordinary shares
Ordinary shares issued (in shares)	3,000,000		824,175	824,175	1,791,044	1,791,044
Private Placement
Ordinary shares
Proceeds from offering, net of underwriting discounts and commissions and other issuance costs							¥ 3,533,285	$ 500,784
Number of investors \| item							2	2
Share price \| $ / shares								$ 65
Price per share (in USD/share) \| $ / shares								$ 8.125
Class A
Ordinary shares
Ordinary shares issued (in shares)			50,549,440	50,549,440	109,850,744	109,850,744
Number of votes per share at general meetings \| Vote									1
Common stock, outstanding shares (in shares)									1,427,590,059	1,427,590,059
Class A \| IPO
Ordinary shares
Ordinary shares issued (in shares)		160,000,000
Class A \| Over-Allotment Option
Ordinary shares
Ordinary shares issued (in shares)	24,000,000		6,593,400	6,593,400	14,328,352	14,328,352
Class A \| Private Placement
Ordinary shares
Ordinary shares issued (in shares)							62,153,848	62,153,848
Class B
Ordinary shares
Number of votes per share at general meetings \| Vote									20
Number of directors for simple majority \| director									6
Common stock, outstanding shares (in shares)									67,590,336	67,590,336
Hillhouse \| Class A \| Private Placement
Ordinary shares
Issuance of ordinary shares \| $								$ 400,000
STT GDC \| Class A \| Private Placement
Ordinary shares
Issuance of ordinary shares \| $								$ 105,000

ACQUISITIONS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2021

ACQUISITIONS AND GOODWILL

Schedule of movement of goodwill


	As of December 31,
	2020	2021

Balance at the beginning of the year	1,905,840	2,596,393
Addition during the year	746,015	4,463,504
Measurement period adjustments	(55,462)	16,608
Balance at end of year	2,596,393	7,076,505

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


	2019	2020	2021
	Note (i)(ii)	Note (iii)(iv)(v)	Note (vi)(vii)
Fair value of consideration	423,075	1,660,685	5,230,362
Effective settlement of pre-existing relationships upon consolidation	—	(31,229)	20,000
Other net assets acquired	(255,245)	(547,815)	(256,650)
Identifiable intangible assets	(15,000)	(449,600)	(689,800)
Deferred tax liabilities	1,040	75,120	159,592
Total identifiable net assets	(269,205)	(922,295)	(786,858)
Goodwill	153,870	707,161	4,463,504

Note (i):

Other net assets acquired primarily include property and equipment of RMB493,026, accounts payable of RMB118,486 and finance lease and other financing obligations of RMB174,194.

Note (ii):

Identifiable intangible assets acquired consisted of customer contracts of RMB15,000 with an estimated useful life of 7.8 years.

Note (iii):

Other net assets acquired primarily include property and equipment of RMB2,783,257, accounts payable of RMB1,133,760 and finance lease and other financing obligations of RMB1,362,103.

Note (iv):

Identifiable intangible assets acquired consisted of customer contracts of RMB449,600 with estimated useful lives from 6.5 to 12.1 years.

Note (v):

During the one-year measurement period from the acquisition date, the Company recorded adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill of RMB55,462 in the year ended December 31, 2020 and increase to goodwill of RMB16,608 in the years ended December 31, 2021, respectively. The adjustments were a result of information obtained subsequent to the Company’s initial reporting of provisional amounts in accordance with ASC 805, Business Combinations.

Note (vi):

Other net assets acquired primarily included property and equipment of RMB2,974,715, accounts receivable of RMB224,307, accounts payable of RMB412,380, short-term borrowings of RMB461,494, long-term borrowings of RMB840,000 and finance lease and other financing obligations of RMB1,463,851.

Note (vii):

Identifiable intangible assets acquired consisted of customer contracts of RMB689,800 with estimated useful lives from 5.7 to 7 years.

ACQUISITIONS AND GOODWILL - Equity Interest acquired (Details) ¥ in Thousands							1 Months Ended	7 Months Ended	8 Months Ended	12 Months Ended
	Dec. 17, 2021 CNY (¥) item	Apr. 30, 2021 CNY (¥)	Dec. 18, 2020 CNY (¥)	Nov. 17, 2020 CNY (¥)	Jun. 05, 2020 CNY (¥) item	Oct. 18, 2019 CNY (¥)	Oct. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
BUSINESS COMBINATIONS
Net revenue										¥ 7,818,681	¥ 5,738,972	¥ 4,122,405
Net (loss) income										(1,191,213)	(669,214)	(442,083)
Cash consideration										3,451,941	1,172,518	190,066
Fair value of consideration										5,230,362	1,660,685	¥ 423,075
Effective settlement of pre-existing relationships upon consolidation										20,000	¥ (31,229)
Target Group Guangzhou 6
BUSINESS COMBINATIONS
Cash consideration						¥ 431,727
Contingent consideration						¥ 243,736
Beijing 10, 11 and 12
BUSINESS COMBINATIONS
Net revenue								¥ 281,926
Net (loss) income								¥ 14,083
Number of Data Center Projects \| item					3
Beijing 10, 11 and 12 \| Fair Value
BUSINESS COMBINATIONS
Fair value of consideration					¥ 847,586
Contingent consideration					¥ 130,720
Shanghai 19
BUSINESS COMBINATIONS
Cash consideration				¥ 62,480
Beijing 9
BUSINESS COMBINATIONS
Cash consideration			¥ 816,969
Contingent consideration			¥ 463,496
Beijing 15 and Beijing 16 Acquisition
BUSINESS COMBINATIONS
Net revenue									¥ 354,281
Net (loss) income									¥ (23,663)
Cash consideration		¥ 3,176,354
Gain from purchase price adjustment							¥ 7,007
Beijing 20, Beijing 21, Beijing 22 and Beijing 23 Acquisition
BUSINESS COMBINATIONS
Percentage of equity interest acquired	90.00%
Cash consideration	¥ 1,303,714
Number of Data Center Projects \| item	4
Other business combinations
BUSINESS COMBINATIONS
Cash consideration										¥ 768,107

SHARE-BASED COMPENSATION - Stock Option Activity (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of options
Outstanding, beginning (in shares)	407,000	14,629,096	24,779,432
Exercised (in shares)	(407,000)	(14,222,096)	(10,150,336)
Outstanding, ending (in shares)		407,000	14,629,096
Intrinsic value of options exercised	¥ 27,775	¥ 633,606	¥ 266,863
Weighted average exercise price
Outstanding, beginning (in RMB per share)	¥ 5.1	¥ 5.4	¥ 5.3
Exercised (in RMB per share)	5.1	5.5	5.6
Outstanding, ending (in RMB per share)		5.1	5.4
Weighted average grant-date fair value per option
Outstanding, beginning (in RMB per share)	1.6	1.7	2.2
Exercised (in RMB per share)	¥ 1.6	1.6	3.5
Outstanding, ending (in RMB per share)		¥ 1.6	¥ 1.7

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2021

DERIVATIVE FINANCIAL INSTRUMENTS

Schedule of location in the consolidated statements of operations and the amount of realized and unrealized gains (losses) recognized for the derivative contracts not designated as hedging instruments


	Consolidated
	statements of	Years ended December 31,
	operations location	2019	2020	2021

Interest rate swap contracts (not designated as hedging instruments) — realized loss	Interest expenses	(1,652)	(19,814)	—
Interest rate swap contracts (not designated as hedging instruments) — unrealized (loss) gain	Interest expenses	(10,606)	10,039	—
		(12,258)	(9,775)	—

INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2021

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET

6 INTANGIBLE ASSETS, NET

Intangible assets consisted of the following:


		As of December 31,
	Note	2020	2021

Customer contracts	8	952,100	1,641,900
Licenses		15,782	15,782
		967,882	1,657,682
Less: accumulated amortization		(182,560)	(375,046)
Intangible assets, net		785,322	1,282,636

The Company’s customer contracts were acquired in business combinations (Note 8). Amortization of intangible assets was RMB58,312, RMB68,688 and RMB192,486 for the years ended December 31, 2019, 2020 and 2021, respectively.

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


Fiscal year ending December 31,
2022		235,290
2023		233,748
2024		226,890
2025		212,577
2026		206,387
Thereafter		167,744
Total		1,282,636

PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Parenthetical) (Details) ¥ in Thousands	Dec. 31, 2021 $ / shares	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2020 $ / shares	Dec. 31, 2020 CNY (¥) shares
Ordinary shares
Ordinary shares, par value (in dollars per share) \| $ / shares	$ 0.00005		$ 0.00005
Ordinary shares, shares authorized		2,002,000,000		2,002,000,000
Redeemable preferred shares
Redeemable preferred shares
Preferred stock, par value (in dollars per share) \| $ / shares	0.00005		0.00005
Preferred stock, authorized shares (in shares)		150,000		150,000
Preferred stock, issued shares (in shares)		150,000		150,000
Preferred stock, shares outstanding		150,000		150,000
Redemption value \| ¥		¥ 958,480		¥ 980,910
Liquidation preference \| ¥		¥ 1,269,027		¥ 2,576,578
Class A
Ordinary shares
Ordinary shares, shares issued		1,427,590,059		1,427,590,059
Ordinary shares, shares outstanding		1,427,590,059		1,427,590,059
Class B
Ordinary shares
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
Ordinary shares
Ordinary shares, par value (in dollars per share) \| $ / shares	0.00005		0.00005
Ordinary shares, shares authorized		2,002,000,000		2,002,000,000
Parent Company \| Reportable Legal Entities \| Redeemable preferred shares
Redeemable preferred shares
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.00005		$ 0.00005
Preferred stock, authorized shares (in shares)		150,000		150,000
Preferred stock, issued shares (in shares)		150,000		150,000
Preferred stock, shares outstanding		150,000		150,000
Redemption value \| ¥		¥ 958,480		¥ 980,910
Liquidation preference \| ¥		¥ 1,269,027		¥ 2,576,578
Parent Company \| Reportable Legal Entities \| Class A
Ordinary shares
Ordinary shares, shares issued		1,427,590,059		1,427,590,059
Ordinary shares, shares outstanding		1,427,590,059		1,427,590,059
Parent Company \| Reportable Legal Entities \| Class B
Ordinary shares
Ordinary shares, shares issued		67,590,336		67,590,336
Ordinary shares, shares outstanding		67,590,336		67,590,336

LEASES - Lease and other financing obligations secured by assets (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Assets to secure lease and other financing obligations	¥ 1,562,461	¥ 707,130
Accounts receivable
Lessee, Lease, Description [Line Items]
Assets to secure lease and other financing obligations	110,391	128,353
Equipment, net
Lessee, Lease, Description [Line Items]
Assets to secure lease and other financing obligations	¥ 1,452,070	¥ 578,777

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Prepaid land use rights (Details) - Prepaid land use rights, net	12 Months Ended
	Dec. 31, 2021
Minimum
Prepaid land use rights
Amortization based on remaining terms (in years)	25 years
Maximum
Prepaid land use rights
Amortization based on remaining terms (in years)	40 years

CONSOLIDATED BALANCE SHEETS - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash	¥ 9,968,109	¥ 16,259,457
Restricted cash	2,014,304	86,829
Accounts receivable, net of allowance for doubtful accounts	1,732,686	1,480,335
Value-added-tax ("VAT") recoverable	229,090	155,620
Prepaid expenses	202,744	163,986
Other current assets	316,942	172,579
Total current assets	14,463,875	18,318,806
Property and equipment, net	40,623,503	29,596,061
Intangible assets, net	1,282,636	785,322
Prepaid land use rights, net	634,953	678,190
Operating lease right-of-use assets	4,030,205	3,059,700
Goodwill	7,076,505	2,596,393
Deferred tax assets	186,496	146,088
Restricted cash	43,954	146,643
VAT recoverable	2,218,944	1,445,521
Other non-current assets	1,071,372	486,071
Total assets	71,632,443	57,258,795
Current liabilities
Short-term borrowings and current portion of long-term borrowings (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 343,944 and RMB 233,326 as of December 31, 2020 and 2021, respectively)	5,948,013	2,153,390
Accounts payable (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 194,325 and RMB 430,518 as of December 31, 2020 and 2021, respectively)	3,901,799	3,657,112
Accrued expenses and other payables (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 152,534 and RMB 223,563 as of December 31, 2020 and 2021, respectively)	2,679,555	1,395,981
Deferred revenue (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 90,192 and RMB 87,364 as of December 31, 2020 and 2021, respectively)	90,992	96,668
Operating lease liabilities, current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 50,888 and RMB 40,371 as of December 31, 2020 and 2021, respectively)	145,739	86,258
Finance lease and other financing obligations, current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 31,629 and RMB 28,161 as of December 31, 2020 and 2021, respectively)	699,145	254,412
Total current liabilities	13,465,243	7,643,821
Long-term borrowings, excluding current portion (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 60,042 and RMB 13,733 as of December 31, 2020 and 2021, respectively)	18,284,514	10,566,746
Convertible bonds payable	1,895,846	1,928,466
Operating lease liabilities, non-current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 361,502 and RMB 172,458 as of December 31, 2020 and 2021, respectively)	1,883,560	1,542,895
Finance lease and other financing obligations, non-current (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 982,209 and RMB 965,356 as of December 31, 2020 and 2021, respectively)	8,933,540	8,097,881
Deferred tax liabilities (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 91,036 and RMB 76,460 as of December 31, 2020 and 2021, respectively)	734,278	462,007
Other long-term liabilities (including amounts of the consolidated VIEs without recourse to GDS Holdings of RMB 34,281 and RMB 66,379 as of December 31, 2020 and 2021, respectively)	539,300	349,257
Total liabilities	45,736,281	30,591,073
Mezzanine equity
Redeemable preferred shares (US$0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2020 and 2021; Redemption value of RMB 980,910 and RMB 958,480 as of December 31, 2020 and 2021, respectively; Liquidation preference of RMB 2,576,578 and RMB 1,269,027 as of December 31, 2020 and 2021, respectively)	958,480	980,910
Redeemable non-controlling interests	404,673	120,820
Total mezzanine equity	1,363,153	1,101,730
GDS Holdings Limited Shareholders' Equity
Ordinary shares (US $0.00005 par value; 2,002,000,000 authorized; 1,427,590,059 Class A ordinary shares issued and outstanding as of December 31, 2020 and 2021; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2020 and 2021)	507	507
Additional paid-in capital	28,983,330	28,728,717
Accumulated other comprehensive loss	(599,186)	(439,635)
Accumulated deficit	(3,910,815)	(2,723,597)
Total GDS Holdings Limited shareholders' equity	24,473,836	25,565,992
Non-controlling interests	59,173	0
Total equity	24,533,009	25,565,992
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders' equity	¥ 71,632,443	¥ 57,258,795

REDEEMABLE NON-CONTROLLING INTERESTS

12 Months Ended

Dec. 31, 2021

REDEEMABLE PREFERRED SHARES

REDEEMABLE NON-CONTROLLING INTERESTS

15 REDEEMABLE NON-CONTROLLING INTERESTS

In July 2020, the Company formed a joint venture (“JV”) to undertake a new data center project in Beijing (“Beijing 13” and “Beijing 14”, previously referred to as “Beijing 13” which was then split to two data center projects according to the design) with a private equity fund (“CPE Fund”) controlled by CITIC Private Equity Funds Management Co., Limited. The Company owns a 58% controlling interest in the JV, while CPE Fund owns 42%. On completion of the project and satisfaction of certain other conditions, the Company is required to acquire CPE Fund’s 42% equity interest in the JV, the consideration of which will be calculated based on the power capacity, sales contract with customers and the assets and liabilities of the JV at that time.

The non-controlling interest of JV is redeemable for cash when specified conditions are met, which are not events that are certain to occur. However, the occurrence of these conditions and therefore the Company’s redemption obligations are not solely within the control of the Company. Pursuant to ASC 480-10-S99 and the related guidance, the redeemable non-controlling interest in the JV is accounted for as temporary equity and measured at redemption value. The initial carrying amount of the redeemable non-controlling interests was the capital injection received from CPE Fund in July 2020. The change of the carrying amount of the redeemable non-controlling interests, other than the capital injection received and the net income or loss attributable to redeemable non-controlling interests, is recognized as accretion to redemption value of redeemable non-controlling interests in the consolidated statements of operations and charged against retained earnings or, in the absence of retained earnings, against additional paid-in capital.

The change in the carrying amount of redeemable non-controlling interests is as follows:


	Year ended December 31,
	2020	2021
Balance at beginning of the year	—	120,820
Capital injection from CPE Fund	105,000	208,801
Net loss attributable to redeemable non-controlling interests	(2,807)	(2,592)
Accretion to redemption value of redeemable non-controlling interests	18,627	77,644
Balance at end of the year	120,820	404,673

REVENUE

12 Months Ended

Dec. 31, 2021

REVENUE

REVENUE

20 REVENUE

Net revenue consisted of the following:


	Years ended December 31,
	2019	2020	2021

Colocation services	3,261,745	4,710,923	6,514,268
Managed service and others	832,826	1,005,945	1,300,136
Service revenue	4,094,571	5,716,868	7,814,404
Equipment sales	27,834	22,104	4,277
Total	4,122,405	5,738,972	7,818,681

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2020 CNY (¥) shares
Current liabilities, VIEs
Short-term borrowings and current portion of long-term borrowings	¥ 5,948,013	¥ 2,153,390
Accounts payable	3,901,799	3,657,112
Accrued expenses and other payables	2,679,555	1,395,981
Deferred revenue	90,992	96,668
Operating lease liabilities, current	145,739	86,258
Finance lease and other financing obligations, current	699,145	254,412
Long-term borrowings, excluding current portion	18,284,514	10,566,746
Operating lease liabilities, non-current	1,883,560	1,542,895
Finance lease and other financing obligations, non-current	8,933,540	8,097,881
Deferred tax liabilities	734,278	462,007
Other long-term liabilities	¥ 539,300	¥ 349,257
Ordinary shares
Ordinary shares, shares authorized \| shares	2,002,000,000	2,002,000,000
Class A
Ordinary shares
Ordinary shares, shares issued \| shares	1,427,590,059	1,427,590,059
Ordinary shares, shares outstanding \| shares	1,427,590,059	1,427,590,059
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
Redeemable preferred shares
Redeemable preferred shares
Preferred Stock, Shares Authorized \| shares	150,000	150,000
Preferred Stock, Shares Issued \| shares	150,000	150,000
Preferred Stock, Shares Outstanding \| shares	150,000	150,000
Redemption value	¥ 958,480	¥ 980,910
Liquidation preference	1,269,027	2,576,578
VIEs \| Without recourse to the primary beneficiary
Current liabilities, VIEs
Short-term borrowings and current portion of long-term borrowings	233,326	343,944
Accounts payable	430,518	194,325
Accrued expenses and other payables	223,563	152,534
Deferred revenue	87,364	90,192
Operating lease liabilities, current	40,371	50,888
Finance lease and other financing obligations, current	28,161	31,629
Long-term borrowings, excluding current portion	13,733	60,042
Operating lease liabilities, non-current	172,458	361,502
Finance lease and other financing obligations, non-current	965,356	982,209
Deferred tax liabilities	76,460	91,036
Other long-term liabilities	¥ 66,379	¥ 34,281

OTHER LONG-TERM LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2021

OTHER LONG-TERM LIABILITIES

Schedule of other long-term liabilities


	As of December 31,
	2020	2021

Consideration payable for acquisitions	97,457	261,000
Asset retirement obligations	76,909	96,862
Deferred revenue – non-current (Note 4)	14,871	44,908
Deferred government grants	6,196	22,245
Payables for purchase of property and equipment	139,162	—
Others	14,662	114,285
Total	349,257	539,300

LEASES - Lease arrangements (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Lease arrangements
Finance lease liabilities	¥ 6,814,090	¥ 6,580,102
Operating lease liabilities	2,029,299	¥ 1,629,153
Data center buildings and land leases
Lease arrangements
Finance lease liabilities	429,208
Operating lease liabilities	¥ 419,586

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency translation and foreign currency risks (Details) € in Thousands, ¥ in Thousands, ¥ in Thousands, RM in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 EUR (€)	Dec. 31, 2021 HKD ($)	Dec. 31, 2021 JPY (¥)	Dec. 31, 2021 MYR (RM)	Dec. 31, 2021 SGD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
RMB
Cash and restricted cash \| ¥	¥ 5,809,753							¥ 3,554,424
USD
Cash and restricted cash	6,066,900						$ 951,566
HKD
Cash and restricted cash	86,912		$ 106,301
JPY
Cash and restricted cash	2,507			¥ 45,234
EUR
Cash and restricted cash	1,057	€ 146
SGD
Cash and restricted cash	59,220					$ 12,552
MYR
Cash and restricted cash	18				RM 12
PRC \| RMB
Cash and restricted cash \| ¥	5,788,295
PRC \| USD
Cash and restricted cash							205,328
Hong Kong SAR \| RMB
Cash and restricted cash \| ¥	¥ 21,458
Hong Kong SAR \| USD
Cash and restricted cash							160,565
Hong Kong SAR \| HKD
Cash and restricted cash			$ 106,301
Hong Kong SAR \| JPY
Cash and restricted cash \| ¥				¥ 45,234
Hong Kong SAR \| EUR
Cash and restricted cash \| €		€ 146
United States \| USD
Cash and restricted cash							80,009
Singapore \| USD
Cash and restricted cash							505,299
Singapore \| SGD
Cash and restricted cash						$ 12,552
Malaysia \| USD
Cash and restricted cash							$ 365
Malaysia \| MYR
Cash and restricted cash \| RM					RM 12

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long-lived assets (Details) ¥ in Thousands	36 Months Ended
	Dec. 31, 2021 CNY (¥)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment losses for long-lived assets	¥ 0

CONVERTIBLE BONDS PAYABLE (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands		12 Months Ended
	Jun. 05, 2018 USD ($) $ / shares	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
CONVERTIBLE BONDS PAYABLE
Principal amount \| $	$ 1
Debt issuance costs		¥ 197,119		¥ 226,085
Accrued interests		141,642		65,390
Denominations for repurchase of Notes \| $					$ 1
Conversion rate per US$1,000 principal amount	19.3865
Basis of issuance of shares for debt conversion (in dollar per share) \| $ / shares	$ 51.58
Conversion of convertible bonds				65
Amortization of Debt Issuance Costs		11,617
Additional paid-in capital
CONVERTIBLE BONDS PAYABLE
Conversion of convertible bonds				65
Accrued expenses
CONVERTIBLE BONDS PAYABLE
Accrued interests		¥ 3,187		¥ 3,262
Convertible Notes due June 1, 2025
CONVERTIBLE BONDS PAYABLE
Principal amount \| $	$ 300,000				$ 299,990	$ 299,990
Debt issuance costs \| $	$ 8,948
Interest per annum (as a percent)	2.00%
Maximum principal amount convertible to ordinary shares (as a percent)	100.00%
Principal amount converted \| $			$ 10
Effective interest rate		2.65%		2.65%	2.65%	2.65%
Convertible Bonds due 2025
CONVERTIBLE BONDS PAYABLE
Interest expenses		¥ 50,337
Contractual interest		¥ 38,720

LOSS PER CLASS A and CLASS B ORDINARY SHARE (Tables)

12 Months Ended

Dec. 31, 2021

LOSS PER CLASS A and CLASS B ORDINARY SHARE

Schedule of computation of basic and diluted loss per share

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


	Years ended December 31,
	2019	2020	2021

Net loss	(442,083)	(669,214)	(1,191,213)
Net loss attributable to non-controlling interests	—	—	1,403
Net loss attributable to redeemable non-controlling interests	—	2,807	2,592
Accretion to redemption value of redeemable non-controlling interests	—	(18,627)	(77,644)
Change in redemption value of redeemable preferred shares	(17,760)	—	—
Cumulative dividend on redeemable preferred shares	(40,344)	(52,709)	(49,073)
Net loss available to GDS Holdings Limited ordinary shareholders	(500,187)	(737,743)	(1,313,935)

Weighted average number of ordinary shares outstanding - basic and diluted	1,102,953,366	1,253,559,523	1,452,906,722

Loss per ordinary share - basic and diluted	(0.45)	(0.59)	(0.90)

The following table sets forth the computation of basic and diluted loss per Class A and Class B ordinary share:


	Years ended December 31,
	2019		2020		2021
	Class A	Class B	Class A	Class B	Class A	Class B
Allocation of net loss available to GDS Holdings Limited ordinary shareholders	(469,535)	(30,652)	(697,965)	(39,778)	(1,252,810)	(61,125)
Weighted average number of ordinary shares outstanding - basic and diluted	1,035,363,030	67,590,336	1,185,969,187	67,590,336	1,385,316,386	67,590,336
Loss per ordinary share - basic and diluted	(0.45)	(0.45)	(0.59)	(0.59)	(0.90)	(0.90)

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


	Years ended December 31,
	2019	2020	2021

Share options/restricted shares	47,986,392	31,425,768	28,930,720
Convertible bonds payable	46,527,600	46,526,049	46,526,049
Total	94,513,992	77,951,817	75,456,769

PARENT ONLY FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2021

PARENT ONLY FINANCIAL INFORMATION

Schedule of condensed financial statements

Condensed Balance Sheets


	As of December 31,
	2020	2021
Assets

Current assets
Cash	12,312,249	3,288,955
Restricted cash	—	1,944,589
Prepaid expenses	39,187	10,836
Other current assets	23,136	4,720
Total current assets	12,374,572	5,249,100
Investment, loans and amounts due from subsidiaries and consolidated VIEs	16,146,058	25,260,616
Other non-current assets	3,616	777
Total assets	28,524,246	30,510,493

Liabilities, Mezzanine Equity and Shareholders’ Equity

Current liabilities
Short-term borrowings	—	3,148,188
Accounts payable	12,451	899
Accrued expenses and other payables	29,790	32,395
Due to subsidiaries	868	849
Total current liabilities	43,109	3,182,331

Convertible bonds payable	1,928,466	1,895,846
Other long-term liabilities	5,769	—
Total liabilities	1,977,344	5,078,177

Mezzanine equity
Redeemable preferred shares (US$ 0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2020 and 2021; Redemption value of RMB 980,910 and RMB 958,480 as of December 31, 2020 and 2021, respectively; Liquidation preference of RMB 2,576,578 and RMB 1,269,027 as of December 31, 2020 and 2021, respectively)	980,910	958,480
Total mezzanine equity	980,910	958,480

Shareholders' equity
Ordinary shares (US$ 0.00005 par value; 2,002,000,000 authorized; 1,427,590,059 Class A ordinary shares issued and outstanding as of December 31, 2020 and 2021; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2020 and 2021)	507	507
Additional paid-in capital	28,728,717	28,983,330
Accumulated other comprehensive loss	(439,635)	(599,186)
Accumulated deficit	(2,723,597)	(3,910,815)
Total shareholders’ equity	25,565,992	24,473,836
Commitments and contingencies

Total liabilities, mezzanine equity and shareholders’ equity	28,524,246	30,510,493

Condensed Statements of Operations


	Years ended December 31,
	2019	2020	2021

Net revenue	—	—	—
Cost of revenue	(50,201)	(94,312)	(116,151)
Gross loss	(50,201)	(94,312)	(116,151)

Operating expenses
Selling and marketing expenses	(40,721)	(58,649)	(54,768)
General and administrative expenses	(153,854)	(224,934)	(285,077)
Research and development expenses	(2,364)	(4,596)	(8,096)
Loss from operations	(247,140)	(382,491)	(464,092)

Other income (expenses):
Interest income	48,020	18,641	25,215
Interest expenses	(128,539)	(155,605)	(95,313)
Equity in loss of subsidiaries and consolidated VIEs	(114,418)	(144,153)	(653,251)
Others, net	(6)	(2,799)	223
Loss before income taxes	(442,083)	(666,407)	(1,187,218)

Income tax expenses	—	—	—
Net loss	(442,083)	(666,407)	(1,187,218)

Condensed Statements of Comprehensive Loss


	Years ended December 31,
	2019	2020	2021

Net loss	(442,083)	(666,407)	(1,187,218)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of nil tax	86,570	(386,951)	(159,714)
Comprehensive loss	(355,513)	(1,053,358)	(1,346,932)

Condensed Statements of Cash Flows


	Years ended December 31,
	2019	2020	2021

Operating activities:
Net cash used in operating activities	(48,514)	(45,269)	(83,019)

Investing activities:
Investment, loans and advances to subsidiaries	(4,473,682)	(4,940,005)	(9,935,432)
Net cash used in investing activities	(4,473,682)	(4,940,005)	(9,935,432)

Financing activities:
Proceeds from short-term borrowings	—	—	3,187,850
Proceeds from long-term borrowings	268,100	—	—
Payment of issuance cost of borrowings	—	(10,619)	(40,645)
Payment of commitment cost of borrowings	—	(45,968)	—
Repayment of long-term borrowings	—	(657,820)	—
Proceeds from exercise of stock options	55,469	78,748	2,082
Net proceeds from issuance of ordinary shares	4,934,126	15,974,517	—
Net proceeds from issuance of redeemable preferred shares	989,349	—	—
Payment of redeemable preferred shares dividends	(25,014)	(65,489)	(49,221)
Net cash provided by financing activities	6,222,030	15,273,369	3,100,066
Effect of exchange rate changes on cash and restricted cash	70,291	(563,459)	(160,320)

Net increase (decrease) in cash and restricted cash	1,770,125	9,724,636	(7,078,705)
Cash and restricted cash at beginning of year	817,488	2,587,613	12,312,249
Cash and restricted cash at end of year	2,587,613	12,312,249	5,233,544

Supplemental disclosures of cash flow information
Interest paid	88,818	92,509	38,243

Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted share award	7,984	10,089	11,147
Conversion of convertible bonds	—	65	—

CONSOLIDATED STATEMENTS OF OPERATIONS - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS
Net revenue	¥ 7,818,681	¥ 5,738,972	¥ 4,122,405
Cost of revenue	(6,039,252)	(4,188,521)	(3,079,679)
Gross profit	1,779,429	1,550,451	1,042,726
Operating expenses
Selling and marketing expenses	(148,614)	(134,937)	(129,901)
General and administrative expenses	(1,021,950)	(702,524)	(411,418)
Research and development expenses	(39,343)	(40,049)	(21,627)
Income from operations	569,522	672,941	479,780
Other income (expenses):
Interest income	50,445	29,011	53,017
Interest expenses	(1,654,737)	(1,316,506)	(968,693)
Foreign currency exchange loss, net	(7,644)	(21,038)	(6,000)
Government grants	88,209	27,050	9,898
Gain from purchase price adjustment	7,010	55,154
Others, net	(1,557)	4,952	5,565
Loss before income taxes	(948,752)	(548,436)	(426,433)
Income tax expenses	(242,461)	(120,778)	(15,650)
Net income	(1,191,213)	(669,214)	(442,083)
Net loss attributable to non-controlling interests	1,403
Net loss attributable to redeemable non-controlling interests	2,592	2,807
Net loss attributable to GDS Holdings Limited shareholders	(1,187,218)	(666,407)	(442,083)
Accretion to redemption value of redeemable non-controlling interests	(77,644)	(18,627)
Net loss available to GDS Holdings Limited shareholders	(1,264,862)	(685,034)	(442,083)
Change in redemption value of redeemable preferred shares			(17,760)
Cumulative dividend on redeemable preferred shares	(49,073)	(52,709)	(40,344)
Net loss available to GDS Holdings Limited ordinary shareholders	¥ (1,313,935)	¥ (737,743)	¥ (500,187)
Loss per Class A and Class B ordinary share
Loss per Class A and Class B ordinary share, basic	¥ (0.90)	¥ (0.59)	¥ (0.45)
Loss per Class A and Class B ordinary share, diluted	¥ (0.90)	¥ (0.59)	¥ (0.45)
Weighted average number of ordinary share outstanding
Weighted average number of ordinary share outstanding, basic	1,452,906,722	1,253,559,523	1,102,953,366
Weighted average number of ordinary share outstanding, diluted	1,452,906,722	1,253,559,523	1,102,953,366

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details)	12 Months Ended
	Dec. 31, 2021
Buildings
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

LEASES

12 Months Ended

Dec. 31, 2021

LEASES

LEASES

12 LEASES

The Company enters into lease arrangements primarily for data center spaces, office spaces and equipment.

Data center buildings and land leases

During the year ended December 31, 2021, the Company entered into lease agreements with the landlords to lease the building and land, including those acquired through acquisition of subsidiaries, for certain data centers. The Company assessed the lease classification of the building and land components separately at the commencement date. During the year ended December 31, 2021, the Company recorded additional finance lease liabilities of RMB429,208 and operating lease liabilities of RMB419,586 through new lease agreements and acquisition of subsidiaries.

The components of lease cost are as follows:


	Years ended December 31,
	2019	2020	2021

Finance lease cost:
- Amortization of right-of-use assets	222,101	423,075	546,437
- Interest on lease liabilities	299,511	465,692	592,835
Operating lease cost	100,469	195,869	313,752
Short-term lease cost	5,004	19,987	23,715
Variable lease cost (Note)	—	(55,599)	(786)

Total lease cost	627,085	1,049,024	1,475,953

Supplemental cash flow information related to leases is as follows:


	Years ended December 31,
	2019	2020	2021

Cash paid for amounts included in measurement of lease liabilities (Note):
- Operating cash flows from finance leases	(248,417)	(389,679)	(591,189)
- Operating cash flows from operating leases	(116,295)	(141,480)	(236,589)
- Financing cash flows from finance leases	(302,679)	(198,234)	(265,481)

Non-cash information on lease liabilities arising from obtaining ROU assets
- Finance leases	708,757	1,099,698	25,731
- Operating leases	333,775	553,154	368,069

Weighted average remaining lease term and weighted average discount rate for leases, excluding prepaid land use rights, are as follows:


	As of December 31,
	2020	2021

Weighted average remaining lease term:
- Finance leases	13.7	12.0
- Operating leases	15.6	13.7

Weighted average discount rate:
- Finance leases	7.00%	6.94%
- Operating leases	6.23%	5.87%

Maturities of lease and other financing obligations were as follows:


	As of December 31, 2020					As of December 31, 2021
			Total of					Total of
			finance lease					finance lease
		Other	and other	Operating			Other	and other	Operating
	Finance lease	financing	financing	lease		Finance lease	financing	financing	lease
	obligations	obligations	obligations	obligations	Total	obligations	obligations	obligations	obligations	Total
Within 1 year	577,933	225,350	803,283	180,447	983,730	621,196	701,350	1,322,546	260,935	1,583,481
After 1 year but within 2 years	600,348	354,625	954,973	190,243	1,145,216	640,445	713,338	1,353,783	246,970	1,600,753
After 2 years but within 3 years	620,461	356,204	976,665	149,300	1,125,965	672,306	714,084	1,386,390	249,383	1,635,773
After 3 years but within 4 years	650,855	377,930	1,028,785	151,545	1,180,330	714,035	454,918	1,168,953	212,829	1,381,782
After 4 years but within 5 years	681,090	361,073	1,042,163	151,063	1,193,226	735,219	417,214	1,152,433	178,627	1,331,060
After 5 years	7,792,794	723,755	8,516,549	1,839,384	10,355,933	7,623,211	473,110	8,096,321	1,935,590	10,031,911
Total	10,923,481	2,398,937	13,322,418	2,661,982	15,984,400	11,006,412	3,474,014	14,480,426	3,084,334	17,564,760

Less: total future interest	(4,343,379)	(578,822)	(4,922,201)	(1,032,829)	(5,955,030)	(4,192,322)	(608,178)	(4,800,500)	(1,055,035)	(5,855,535)
Less: estimated construction costs	-	(47,924)	(47,924)	-	(47,924)	-	(47,241)	(47,241)	-	(47,241)

Present value of lease and other financing obligations	6,580,102	1,772,191	8,352,293	1,629,153	9,981,446	6,814,090	2,818,595	9,632,685	2,029,299	11,661,984
Including:
- Current portion			254,412	86,258	340,670			699,145	145,739	844,884
- Non-current portion			8,097,881	1,542,895	9,640,776			8,933,540	1,883,560	10,817,100

As of December 31, 2021, the Company has additional leases, primarily for data center buildings, that have not yet commenced with total future lease payments of RMB70,928. These leases are expected to commence in fiscal year 2022 with lease terms of 1 year to 20 years.

Lease and other financing obligations were secured by the following assets:


	As of December 31,
	2020	2021

Accounts receivable	128,353	110,391
Equipment, net	578,777	1,452,070
	707,130	1,562,461

LOSS PER CLASS A and CLASS B ORDINARY SHARE - Class A and Class B (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Computation of basic and diluted loss per share
Allocation of net loss available to GDS Holdings Limited ordinary shareholders	¥ (1,313,935)	¥ (737,743)	¥ (500,187)
Weighted average number of ordinary share outstanding, basic	1,452,906,722	1,253,559,523	1,102,953,366
Weighted average number of ordinary share outstanding, diluted	1,452,906,722	1,253,559,523	1,102,953,366
Loss per Class A and Class B ordinary share, basic	¥ (0.90)	¥ (0.59)	¥ (0.45)
Loss per Class A and Class B ordinary share, diluted	¥ (0.90)	¥ (0.59)	¥ (0.45)
Class A
Computation of basic and diluted loss per share
Allocation of net loss available to GDS Holdings Limited ordinary shareholders	¥ (1,252,810)	¥ (697,965)	¥ (469,535)
Weighted average number of ordinary share outstanding, basic	1,385,316,386	1,185,969,187	1,035,363,030
Weighted average number of ordinary share outstanding, diluted	1,385,316,386	1,185,969,187	1,035,363,030
Loss per Class A and Class B ordinary share, basic	¥ (0.90)	¥ (0.59)	¥ (0.45)
Loss per Class A and Class B ordinary share, diluted	¥ (0.90)	¥ (0.59)	¥ (0.45)
Class B
Computation of basic and diluted loss per share
Allocation of net loss available to GDS Holdings Limited ordinary shareholders	¥ (61,125)	¥ (39,778)	¥ (30,652)
Weighted average number of ordinary share outstanding, basic	67,590,336	67,590,336	67,590,336
Weighted average number of ordinary share outstanding, diluted	67,590,336	67,590,336	67,590,336
Loss per Class A and Class B ordinary share, basic	¥ (0.90)	¥ (0.59)	¥ (0.45)
Loss per Class A and Class B ordinary share, diluted	¥ (0.90)	¥ (0.59)	¥ (0.45)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

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+ Details

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Operations (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Condensed Statements of Operations
Net revenue	¥ 7,818,681	¥ 5,738,972	¥ 4,122,405
Cost of revenue	(6,039,252)	(4,188,521)	(3,079,679)
Gross loss	1,779,429	1,550,451	1,042,726
Operating expenses
Selling and marketing expenses	(148,614)	(134,937)	(129,901)
General and administrative expenses	(1,021,950)	(702,524)	(411,418)
Research and development expenses	(39,343)	(40,049)	(21,627)
Income from operations	569,522	672,941	479,780
Other income (expenses):
Interest income	50,445	29,011	53,017
Interest expenses	(1,654,737)	(1,316,506)	(968,693)
Others, net	(1,557)	4,952	5,565
Loss before income taxes	(948,752)	(548,436)	(426,433)
Income tax expenses	(242,461)	(120,778)	(15,650)
Net income	(1,191,213)	(669,214)	(442,083)
Parent Company \| Reportable Legal Entities
Condensed Statements of Operations
Cost of revenue	(116,151)	(94,312)	(50,201)
Gross loss	(116,151)	(94,312)	(50,201)
Operating expenses
Selling and marketing expenses	(54,768)	(58,649)	(40,721)
General and administrative expenses	(285,077)	(224,934)	(153,854)
Research and development expenses	(8,096)	(4,596)	(2,364)
Income from operations	(464,092)	(382,491)	(247,140)
Other income (expenses):
Interest income	25,215	18,641	48,020
Interest expenses	(95,313)	(155,605)	(128,539)
Equity in loss of subsidiaries and consolidated VIEs	(653,251)	(144,153)	(114,418)
Others, net	223	(2,799)	(6)
Loss before income taxes	(1,187,218)	(666,407)	(442,083)
Net income	¥ (1,187,218)	¥ (666,407)	¥ (442,083)

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES (Tables)

12 Months Ended

Dec. 31, 2021

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES

Schedule of accounts payable


	As of December 31,
	2020	2021
Accounts payable for operating expenses	270,507	328,331
Accounts payable for purchase of property and equipment	3,386,605	3,573,468
	3,657,112	3,901,799

Schedule of accrued expenses and other payables


	As of December 31,
	2020	2021

Consideration payables for acquisitions	888,693	1,855,261
Accrued payroll and welfare benefits	114,632	184,220
Accrued interest expenses	65,390	141,642
Income tax payable	102,683	139,667
Other tax payables	39,372	40,986
Accrued debt issuance costs and other financing costs	32,512	25,930
Amount due to related parties	15,360	24,145
Others	137,339	267,704
	1,395,981	2,679,555

CONTRACT BALANCES (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
CONTRACT BALANCES (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounts receivable, net
Accounts receivable	¥ 1,744,810	¥ 1,482,498
Less: allowance for doubtful accounts	(12,124)	(2,163)	¥ (133)	¥ (241)
Accounts receivable, net	1,732,686	1,480,335
Movement of the allowance for doubtful accounts
Allowance made during the year	10,070	2,032	274
Write-off during the year			(382)
Foreign exchange impact	(109)	(2)
Deferred Revenue
Beginning balance	111,539
Increase	24,361
Closing balance	135,900	111,539
Deferred revenue expected to be recognized as revenue after one year	44,908	14,871
Revenue recognized from the opening deferred revenue balance	104,640	96,084	¥ 66,500
Accounts receivable \| Bank loans
Accounts receivable, net
Assets pledged	1,040,521	819,578
Accounts receivable \| Finance lease and other financing obligations
Accounts receivable, net
Assets pledged	¥ 110,391	¥ 128,353

SHARE-BASED COMPENSATION - Settlement of Liability Classified Restricted Shares (Details) - CNY (¥) ¥ in Thousands	8 Months Ended	9 Months Ended	10 Months Ended	12 Months Ended
	Oct. 31, 2020	Nov. 30, 2019	Oct. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SHARE-BASED COMPENSATION
Settlement of liability-classified restricted share award				¥ 11,147	¥ 10,089	¥ 7,984
Compensation expense				¥ 391,275	¥ 333,686	¥ 189,756
Directors
SHARE-BASED COMPENSATION
Compensation expense			¥ 0
Restricted shares
SHARE-BASED COMPENSATION
Granted (in shares)				12,107,888	11,710,848	14,551,472
Compensation expense				¥ 391,275	¥ 333,686	¥ 189,447
Restricted shares \| Directors
SHARE-BASED COMPENSATION
Granted (in shares)	190,536	237,312	178,280
Settlement of liability-classified restricted share award	¥ 10,089	¥ 7,984	¥ 11,147

CONTRACT BALANCES (Tables)

12 Months Ended

Dec. 31, 2021

CONTRACT BALANCES

Schedule of accounts receivable, net


	As of December 31,
	2020	2021

Accounts receivable	1,482,498	1,744,810
Less: allowance for doubtful accounts	(2,163)	(12,124)
Accounts receivable, net	1,480,335	1,732,686

Schedule of allowance for doubtful accounts


	Years ended December 31,
	2019	2020	2021

Balance at the beginning of the year	241	133	2,163
Allowance made during the year	274	2,032	10,070
Write-off during the year	(382)	—	—
Foreign exchange impact	—	(2)	(109)
Balance at the end of the year	133	2,163	12,124

Schedule of deferred revenue


		Deferred revenue

Beginning balance as of January 1, 2021		111,539
Increase		24,361

Closing balance as of December 31, 2021		135,900

Schedule of remaining performance obligations


Revenue expected to be recognized		RMB

Within 1 year		1,084,635
After 1 year but within 2 years		1,208,157
After 2 years but within 3 years		1,251,249
After 3 years but within 4 years		1,197,587
After 4 years but within 5 years		1,040,895
After 5 years		2,403,630

Total		8,186,153

REDEEMABLE NON-CONTROLLING INTERESTS (Details)	1 Months Ended
REDEEMABLE NON-CONTROLLING INTERESTS (Details)	Jul. 31, 2020 item
BJ13
Redeemable Noncontrolling Interest [Line Items]
Controlling interest owned (as a percent)	58.00%
Number of data center projects	2
JV
Redeemable Noncontrolling Interest [Line Items]
Non-controlling interest owned (as a percent)	42.00%
CPE Fund \| JV
Redeemable Noncontrolling Interest [Line Items]
Percent of equity interest to acquire	42.00%

SHARE-BASED COMPENSATION - Plans and Grants (Details) - shares	1 Months Ended
	Aug. 31, 2016	Jul. 31, 2014
The 2014 Plan
SHARE-BASED COMPENSATION
Total number shares which may be issued		29,240,000
The 2016 Plan
SHARE-BASED COMPENSATION
Authorized shares, automatic increment trigger (as a percent)	1.50%
The 2016 Plan \| Ordinary Shares
SHARE-BASED COMPENSATION
Total number shares which may be issued	56,707,560
Authorized shares, maximum automatic approval (as a percent)	3.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

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 and variable interest entities’ subsidiaries for which GDS Holdings is the primary beneficiary.

The Company’s data center related operations are mainly conducted through Shanghai Xinwan Enterprise Management Co., Ltd. (“Management HoldCo”), Beijing Wanguo Chang’an Science and Technology Co., Ltd. (“GDS Beijing”), GDS Beijing’s subsidiaries and Shanghai Shu’an Data Services Co., Ltd. (“GDS Shanghai”) (referred to as the “VIEs” only under the Consolidated Financial Statements) to comply with the PRC laws and regulations, which prohibit foreign investments in companies that are engaged in data center related business. Individuals acting as nominee equity holders ultimately hold the legal equity interests of the VIEs on behalf of GDS Holdings.

Prior to December 2019, the equity holders of GDS Beijing and GDS Shanghai were William Wei Huang, CEO of GDS Holdings, and his relative. In order to enhance corporate governance and facilitate administration of the VIEs, in December 2019, GDS Holdings completed transfer of ownership of the 100% equity interest of GDS Beijing and GDS Shanghai from William Wei Huang and his relative to a newly established holding company, Management HoldCo. The entire equity interest in Management HoldCo is held by a number of management personnel designated by the board of directors of GDS Holdings. In conjunction with the transfer of legal ownership, GDS (Shanghai) Investment Co., Ltd. (“GDS Investment Company”), a subsidiary of GDS Holdings, entered into a series of contractual arrangements with Management HoldCo, its shareholders, GDS Beijing and GDS Shanghai to replace the previous contractual arrangements with GDS Beijing and GDS Shanghai on substantially the same terms under such previous contractual arrangements. The previous contractual arrangements were terminated simultaneously when the current contractual arrangements came into effect, and the subsidiary of GDS Holdings under the previous and current contractual arrangements is the same entity, namely GDS Investment Company. GDS Holdings also replaced the sole director of GDS Shanghai and certain subsidiaries of GDS Beijing with a board of three directors. William Wei Huang acts as the Chairman of the board of directors of Management HoldCo, GDS Investment Company, GDS Beijing and GDS Shanghai and their subsidiaries respectively. Other management members of GDS and board appointee serve as directors and officers of Management HoldCo., GDS Investment Company, GDS Beijing and GDS Shanghai and their subsidiaries.

This restructuring could reduce risk by allocating ownership of the VIEs among a larger number of individual management shareholders, and strengthen corporate governance with the establishment of the board of directors of the VIEs and their subsidiaries. This restructuring could also create a more stable ownership structure by avoiding reliance on a single or small number of natural persons, and by buffering the ownership of the VIEs with an additional layer of legal entities.

A series of contractual arrangements, including equity interest pledge agreements, shareholder voting rights proxy agreements, exclusive technology license and service agreements, intellectual property rights license agreements, exclusive call option agreements and loan agreements (collectively, referred to as “VIE Agreements”) were entered into among GDS Beijing, GDS Shanghai, Management HoldCo, its shareholders and GDS Investment Company.

Equity Interest Pledge Agreements. Pursuant to the equity interest pledge agreements, each shareholder of Management HoldCo has pledged all of his or her equity interest in Management HoldCo as a continuing first priority security interest in favor of GDS Investment Company, as applicable, to respectively guarantee Management HoldCo’s and its shareholders’ performance of their obligations under the relevant contractual arrangement, and Management HoldCo has pledged all of its equity interest in GDS Beijing and GDS Shanghai as a continuing first priority security interest in favor of GDS Investment Company, as applicable, to respectively guarantee their performance of their obligations under the relevant contractual arrangement, which include the exclusive technology license and service agreement, loan agreement, exclusive call option agreement, and shareholder voting rights proxy agreement, and intellectual property rights license agreement. If GDS Beijing or GDS Shanghai or Management HoldCo or any of its shareholders breaches their contractual obligations under these agreements, GDS Investment Company, 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 Management HoldCo, GDS Beijing and GDS Shanghai in accordance with PRC law. Management HoldCo and each of its shareholders agrees that, during the term of the equity interest pledge agreements, it or 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 Company. The equity interest pledge agreements remain effective until GDS Beijing and GDS Shanghai and Management HoldCo and its shareholders discharge all their obligations under the contractual arrangements. The equity pledge has been registered by Management HoldCo, GDS Beijing and GDS Shanghai in favor of GDS Investment Company with the relevant office of the Administration for Market Regulation in accordance with the relevant PRC laws and regulations.

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

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

Intellectual Property Rights License Agreements. Pursuant to an intellectual property rights license agreement between GDS Investment Company and each of Management HoldCo, GDS Beijing and GDS Shanghai, Management HoldCo, GDS Beijing and GDS Shanghai has granted GDS Investment Company an exclusive license to use for free any or all of the intellectual property rights owned by each of them from time to time, and without the parties’ prior written consent, Management HoldCo, GDS Beijing and 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 Company’s use of the licensed intellectual property rights from Management HoldCo, GDS Beijing and GDS Shanghai. The parties have also agreed under the agreement that GDS Investment Company should own the new intellectual property rights developed by it regardless of whether such development is dependent on any of the intellectual property rights owned by Management HoldCo, GDS Beijing and GDS Shanghai. This agreement can only be early terminated by prior mutual consent of the parties and need to be renewed upon GDS Investment Company’s unilateral request.

Exclusive Call Option Agreements. Pursuant to the exclusive call option agreements, Management HoldCo and each of its shareholders has irrevocably granted GDS Investment Company 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 Management HoldCo’s equity interests in GDS Beijing and GDS Shanghai or its such shareholders’ equity interests in Management HoldCo. 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 Company’s prior written consent, Management HoldCo and its shareholders have agreed that each of Management HoldCo, GDS Beijing and GDS Shanghai shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, create or allow any encumbrance on its assets or other beneficial interests, provide any loans, distribute dividends to the shareholders and etc. These agreements will remain effective until all equity interests of Management HoldCo, GDS Beijing and GDS Shanghai held by their shareholders have been transferred or assigned to GDS Investment Company or its designated person(s).

Loan Agreements. Pursuant to the loan agreements between GDS Investment Company and Management HoldCo or its shareholders, GDS Investment Company has agreed to extend loans in an aggregate amount of RMB310,100 to Management HoldCo solely for the capitalization of GDS Beijing and GDS Shanghai and RMB1,000 to the shareholders of Management HoldCo solely for the capitalization of Management HoldCo. Pursuant to the loan agreements, GDS Investment Company has the right to require repayment of the loans upon delivery of thirty-day’s prior notice to Management HoldCo or its shareholders, as applicable, and Management HoldCo or its shareholders can repay the loans by either sale of their equity interests in GDS Beijing and GDS Shanghai or Management HoldCo, as applicable, to GDS Investment Company or its designated person(s) pursuant to their respective exclusive call option agreements, or other methods as determined by GDS Investment Company pursuant to its articles of association and the applicable PRC laws and regulations.

Under the terms of the VIE Agreements, GDS Holdings 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 Company 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, GDS Holdings has a controlling financial interest in the VIEs because GDS Holdings has (i) the power to direct activities of the VIEs that most significantly impact the economic performance of the VIEs; and (ii) the right to receive expected residual return of the VIEs that could potentially be significant to the VIEs. There is currently no contractual arrangement that would require GDS Holdings to provide additional financial support to the VIEs. As GDS Holdings is conducting certain businesses mainly through the VIEs, GDS Holdings may provide such support on a discretionary basis in the future, which could expose GDS Holdings to a loss. The terms of the VIE Agreements and financial support from GDS Holdings to the VIEs were considered in determining that GDS Holdings is the primary beneficiary of the VIEs. Accordingly, the financial statements of the VIEs are consolidated in GDS Holdings’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 GDS Holdings. All of the equity (net assets) or deficits (net liabilities) and net income (loss) of the VIEs are attributed to GDS Holdings.

The Company has been advised by its PRC legal counsel that each of the VIE agreements is valid, legally 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 GDS Holdings 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 GDS Holdings’s consolidated financial statements.

The following tables set forth the financial statement balances and amounts of the VIEs and their subsidiaries included in the consolidated financial statements after the elimination of intercompany balances and transactions among VIEs and their subsidiaries.


	As of December 31,
	2020	2021
Assets
Current assets
Cash	1,310,269	1,338,525
Accounts receivable, net of allowance for doubtful accounts	1,388,128	1,677,171
VAT recoverable	85,760	138,304
Prepaid expenses	76,505	90,848
Other current assets	13,259	99,231
Total current assets	2,873,921	3,344,079

Property and equipment, net	2,760,618	2,671,567
Intangible assets, net	194,230	175,004
Operating lease right-of-use assets	430,525	204,825
Deferred tax assets	43,126	32,949
Restricted cash	49,905	—
VAT recoverable	113,684	111,982
Other non-current assets	115,315	153,696
Total assets	6,581,324	6,694,102

Liabilities
Current liabilities
Short-term borrowings and current portion of long-term borrowings	628,721	426,000
Accounts payable	194,325	430,518
Accrued expenses and other payables	152,534	223,563
Deferred revenue	90,192	87,364
Operating lease liabilities, current	50,888	40,371
Finance lease and other financing obligations, current	31,629	28,161
Total current third-party liabilities	1,148,289	1,235,977

Long-term borrowings, excluding current portion	1,213,020	899,769
Operating lease liabilities, non-current	361,502	172,458
Finance lease and other financing obligations, non-current	982,209	965,356
Deferred tax liabilities	91,036	76,460
Other long-term liabilities	34,281	66,379
Total third-party liabilities	3,830,337	3,416,399
Amounts due to GDS Holdings and its non-VIE subsidiaries, net	2,531,025	2,947,857
Total liabilities	6,361,362	6,364,256

As of December 31, 2020 and 2021, restricted cash of RMB49,905 and nil, respectively,accounts receivable of RMB66,969 and RMB70,945, respectively, other non-current assets of nil and RMB14,691, respectively, and property and equipment of RMB102,248 and RMB46,007, respectively, of VIEs were pledged solely to secure banking borrowings of VIEs.

Net revenue, net (loss) 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, 2019, 2020 and 2021 are as follows:


	Years ended December 31,
	2019	2020	2021

Net revenue	4,013,561	5,453,802	7,516,345
Net income	99,857	129,254	112,257
Net cash provided by operating activities	414,424	899,132	744,493
Net cash used in investing activities	(201,995)	(278,744)	(205,041)
Net cash used in financing activities	(43,547)	(20,682)	(561,101)

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 RMB2,017,032, RMB3,076,398 and RMB5,160,638 for the years ended December 31, 2019, 2020 and 2021, respectively, net of the related services provided to other entities within the Company. These inter-company transactions are eliminated in the consolidated financial statements.

(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 fair values of assets acquired and liabilities assumed and the consideration transferred in a business combination, the realization of deferred income tax assets, the fair value of share-based compensation awards, the recoverability of long-lived assets, and incremental borrowing rate of leases. 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, 2020 and 2021.

(d) Restricted cash

Restricted cash represents amounts held by banks, which are not available for the Company’s use, as security for bank borrowings, related interests and certain construction projects. Upon repayment of bank borrowings and the related interests and completion of construction projects, 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 17 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 accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows.

Prior to the adoption of ASC 326, Financial Instruments - Credit Loss, 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.

Upon adoption of ASC 326 starting from January 1, 2020, the provision of credit losses for accounts receivable is based upon the current expected credit losses (“CECL”) model. The CECL model requires an estimate of the credit losses expected over the life of accounts receivable since initial recognition, and accounts receivable with similar risk characteristics are grouped together when estimating CECL. In assessing the CECL, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical credit loss experience, adjusted for relevant factors impacting collectability and forward-looking information indicative of external market conditions. While the Company uses the best information available in making determination, the ultimate recovery of recorded receivables is also dependent upon future economic events and other conditions that may be beyond the Company’s control. Accounts receivable that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. The Company does not have any off-balance-sheet credit exposure related to its customers. The adoption did not have material impact on the Company’s consolidated financial statements for the year ended December 31, 2020.

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 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) Fulfilment costs

Fulfilment costs are capitalized when all three of the criteria are met: a) the costs relate directly to a contract or an anticipated contract that the Company can specifically identify; b) the costs generate or enhance resources of the Company that will be used in satisfying or continuing to satisfy future performance obligations; and c) the costs are expected to be recovered. The asset recognized from capitalizing the costs to fulfill a contract is amortized on a systematic basis consistent with the pattern of the transfer of the goods or services to which the asset relates. As of December 31, 2020 and 2021, the Company recorded capitalized fulfilment cost of RMB128,983 and RMB80,742, respectively, in other non-current assets.

(h) Equity method investments

The Company’s investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are generally accounted for under the equity method of accounting, as the Company concluded it does not have control, but has the ability to exercise significant influence over the investees. Equity method investments are initially measured at cost, and are subsequently adjusted for cash contributions, distributions and the Company’s share of the income and losses of the investees. The Company records its equity method investment in other non-current assets on the consolidated balance sheet. The Company’s proportionate share of the income or loss from its equity method investment are recorded in others, net on the consolidated statement of operations. The Company reviews its investment periodically to determine if any investment may be impaired considering both qualitative and quantitative factors that may have a significant impact on the investees’ fair value. The Company did not record any impairment charges related to its equity method investment for the years ended December 31, 2019, 2020 and 2021.

(i) Property and equipment

Property and equipment are carried at cost less accumulated depreciation and any recorded impairment. Property and equipment acquired under finance leases are initially recorded at the present value of minimum lease payments. Buildings and equipment under finance leases, land, leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset or improvement.

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 of self-owned property and equipment are presented below.


Buildings		30 years
Data center equipment
– Machinery		10 - 20 years
– Other equipment		3 - 5 years
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 transferred to the respective category of property and equipment 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 finance lease, the assets are amortized in a manner consistent with the Company’s 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 finance lease are amortized over the lease term.

(j) Leases

The Company is a lessee in a number of non-cancellable operating leases and finance leases, primarily for data centers, lands, offices and other equipment. The Company adopted ASC 842, Leases, on January 1, 2019, using a modified retrospective method.

The Company determines if an arrangement is or contains a lease at its inception.

The Company recognizes lease liabilities and right-of-use (“ROU”) assets at lease commencement date. Lease liabilities are measured at the present value of unpaid lease payments at the lease commencement date and is subsequently measured at amortized cost using the effective-interest method. Since most of the Company’s leases do not provide an implicit rate, the Company uses its own incremental borrowing rate in determining the present value of unpaid lease payments. The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that the Company would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

ROU assets are initially measured at cost, which consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. For operating leases, the Company recognizes a single lease cost on a straight-line basis over the remaining lease term. For finance leases, the ROU assets are subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of its useful life or the end of the lease term. Amortization of the ROU assets are recognized and presented separately from interest expense on the lease liability. For leases acquired in business combinations or asset acquisitions, ROU assets are measured at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms.

Prior to the adoption of ASC 842, Leases, prepayment for land use rights are presented as prepaid land use rights on the consolidated balance sheet and are measured at cost and subsequently amortized using the straight-line method. Upon the adoption of ASC 842 on January 1, 2019, land use rights acquired are assessed in accordance with ASC 842 and recognized in operating lease ROU assets if they meet the definition of operating lease, or property and equipment if they meet the definition of finance lease.

The Company has elected not to recognize ROU assets and lease liabilities for short-term leases (i.e. leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). As a practical expedient, the Company has elected that for all leases, where it is the lessee, not to separate non-lease components from lease components and instead to account for all lease and non-lease components associated with each lease as a single lease component.

The Company records an asset and related financing obligation for the estimated construction costs under build-to-suit lease arrangements where it controls the asset during construction. Upon completion of the construction and commencement of the lease terms, the Company assesses whether these arrangements qualify for sales recognition under the 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 accounted for costs incurred relating to the construction of the underlying assets before the lease commencement dates in accordance with ASC 360 on its balance sheet. In addition, lease payments less the portion considered to be interest expense decrease the financing liability.

If a lease is modified and that modification is not accounted for as a separate contract, the classification of the lease is reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date.

(k) 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 estimated useful life 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, 2019		35,879
Additions		13,572
Accretion expense		2,990
Asset retirement obligations as of December 31, 2019		52,441
Additions		20,384
Accretion expense		4,084
Asset retirement obligations as of December 31, 2020		76,909
Additions		22,745
Accretion expense		6,227
Settlement		(998)
Asset retirement obligations as of December 31, 2021		104,883

(l) Intangible assets

Intangible assets acquired in the acquisitions comprised of customer contracts and licenses.

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


Customer contracts		5-15 years
Licenses		20 years

The amortization period of customer contracts is determined based on the remaining contractual period of the contracts with the customers at the time of acquisition and an estimate of the contract renewal period.

Licenses are amortized using a straight-line method over the terms of those licenses.

(m) 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 before the adoption of ASC 842, 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 25 to 40 years.

(n) Business combinations and goodwill

The Company accounts for our business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations.

The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests.

The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons.

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 macroeconomic conditions, the industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, and events affecting a reporting unit and share price. 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 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 goodwill impairment test is not required. If the goodwill impairment test is required, 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 impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. 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. In assessing the qualitative factors, the Company considered the impact of abovementioned events or circumstances. No impairment losses were recorded for goodwill for the years ended December 31, 2019, 2020 and 2021.

(o) Impairment of long-lived assets

Long-lived assets (primarily including property and equipment, operating lease ROU assets 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 generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived assets 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. For the purposes of impairment testing of long-lived assets, the Company has concluded that an individual data center is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. No impairment losses were recorded for long-lived assets for the years ended December 31, 2019, 2020 and 2021.

(p) 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, 2020 and 2021, the Company recorded a VAT recoverable of RMB155,620 and RMB229,090 as current assets, and RMB1,445,521 and RMB2,218,944 as non-current assets, respectively. The Company also recorded VAT payables of RMB6,838 and RMB19,251 in accrued expenses and other payables, in the consolidated balance sheets as of December 31, 2020 and 2021, respectively.

At each balance sheet date, the Company reviews the balance of VAT recoverable for recoverability, taking into consideration of the indefinite life of the VAT recoverable as well as the Company’s forecasted operating results and capital spendings. The Company has not made an allowance for the recoverability of the VAT recoverable, as the balance is expected to be utilized to offset against VAT payables more than one year from December 31, 2021.

(q) 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.

The Company entered into interest rate swap contracts primarily for the purpose to manage the interest rate risk for the long-term borrowings. The Company has elected not to apply hedge accounting to these derivative instruments and recognized all derivatives on the Company’s consolidated balance sheets at fair value. The Company estimates the fair value of its interest rate swap contracts using a pricing model based on market observable inputs. Fair value gains or losses associated with interest rate swap contracts are recorded within interest expenses in the Company’s consolidated statements of operations. Cash received or paid for realized gains or losses associated with interest rate swap contracts are included in operating cash flows in the consolidated statements of cash flows.

For further information on derivative financial instruments, see Note 16 below.

(r) Commitment and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, 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.

(s) Revenue recognition

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.

The Company derives revenue primarily from the delivery of (i) colocation services; and (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.

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 cloud services are services where the Company offers direct private connection to major cloud platforms, an innovative service platform for managing hybrid clouds and, where required, the resale of public cloud services.

Contracts with customers for colocation services and managed services include i) those 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 actual services are rendered throughout the contract term; and ii) those provide for a fixed consideration over the contract service period. Revenue on such contracts is recognized on a straight-line basis over the term of the contract.

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. If the 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, without providing the customer with any rights to acquire additional goods or services. Accordingly, relevant revenue is recognized each month based on actual additional power consumption fees.

The Company’s colocation service and managed service contracts with customers contain both lease and non-lease components. The Company elected to adopt the practical expedient which allows lessors to combine lease and non-lease components and account for them as one component if i) they have the same timing and pattern of transfer; and ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company elected to apply the practical expedient on the contracts that meet the criteria. In addition, the Company has performed a qualitative analysis to determine that the non-lease component is the predominant component of its revenue stream as the customer would ascribe more value to the services provided rather than to the lease component. Therefore, the combined component is accounted for in accordance with the current revenue accounting guidance (“ASC 606”). For contracts that do not meet the criteria for the practical expedient, the lease component is accounted for in accordance with the current lease accounting guidance (“ASC 842”), which is immaterial for the years ended December 31, 2019, 2020 and 2021. The Company has elected to apply the practical expedient on a prospective basis.

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 on a monthly or quarterly basis in arrears.

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.

Sales of IT equipment 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.

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.

(t) Cost of revenues

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

(u) Research and development and advertising costs

Research and development and advertising costs are expensed as incurred. Research and development costs amounted to RMB21,627, RMB40,049 and RMB39,343 in 2019, 2020 and 2021, 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 RMB7,454, RMB14,778 and RMB15,043 in 2019, 2020 and 2021, 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. 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.

As of December 31, 2020 and 2021, deferred government grants of RMB6,196 and RMB22,245 are recorded in other long-term liabilities, respectively.

(w) Capitalized interest

A reconciliation of total interest costs to ‘‘Interest expenses’’ as reported in the consolidated statements of operations for the years ended December 31, 2019, 2020 and 2021 is as follows:


	Years ended December 31,
	2019	2020	2021

Total interest costs	1,040,898	1,402,015	1,805,434
Less: interest costs capitalized	(72,205)	(85,509)	(150,697)

Interest expenses	968,693	1,316,506	1,654,737

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 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 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 and commitment costs

Debt issuance costs are capitalized and are amortized over the life of the related debts based on the effective interest method. Debt commitment costs are capitalized and are amortized over the commitment period of the facility on a straight-line basis. Such amortization is included as a component of interest expense.

Unamortised debt issuance costs of RMB226,085 and RMB197,119 are presented as a reduction of debt as of December 31, 2020 and 2021, respectively. Unamortised debt commitment costs of RMB28,919 and nil are presented as other current assets as of December 31, 2020 and 2021, 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 losses 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. A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The evaluation is based on the Company’s estimates of the future taxable income. The future taxable income incorporates the Company’s best estimate of utilization rates of relevant data centers based on historical actual utilization rates and the Company’s business plans for those data centers which are approved by the board of directors. 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 -classified awards. 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 , net of forfeitures, over the performance period when the performance goal becomes probable to achieve. The Company also adjusts the compensation cost based on the probability of performance goal achievement at the end of each reporting period. The rewards are earned upon attainment of identified performance goals.

Awards granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses , net of forfeitures, 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, net of forfeitures, over its respective vesting term.

The Company accounts for forfeitures when they occur. Compensation cost previously recognized are reversed in the period the award is forfeited before completion of the requisite service period.

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.

For further information on share-based compensation, see Note 19 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 United States dollar (“USD”), whereas the functional currency of its PRC subsidiaries and consolidated VIEs in PRC, subsidiaries in Hong Kong SAR, subsidiaries in Singapore and subsidiary in Malaysia is the RMB, Hong Kong dollar (“HKD”), Singapore dollar (“SGD”) and Malaysian Ringgit (“MYR”), respectively. The reporting currency of the Company is RMB as the major operations of the Company are within the PRC.

Transactions denominated in currencies other than the functional currency are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet dates. Non-monetary items that are denominated in foreign currency are measured at the historical costs by using the exchange rates at the dates of the initial transactions. 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 as of the balance sheet date for assets and liabilities, the average daily exchange rate for each month for income and expense items and the historical exchange rates for equity accounts. Translation gains and losses are recorded 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 RMB3,554,424 and RMB5,809,753 as of December 31, 2020 and 2021, respectively.

As of December 31, 2021, 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	MYR
In PRC	5,788,295	205,328	—	—	—	—	—
In Hong Kong SAR	21,458	160,565	106,301	45,234	146	—	—
In US	—	80,009	—	—	—	—	—
In Singapore	—	505,299	—	—	—	12,552	—
In Malaysia	—	365	—	—	—	—	12
Total in original currency	5,809,753	951,566	106,301	45,234	146	12,552	12
RMB equivalent	5,809,753	6,066,900	86,912	2,507	1,057	59,220	18

(cc) Concentration of credit risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash, restricted cash, and accounts receivable. The Company’s investment policy requires cash 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 transfer the control 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) available to the Company’s ordinary shareholders by the weighted average number of ordinary shares outstanding during the year using the two-class method. The liquidation and dividend rights of the holders of the Company’s Class A and Class B ordinary shares are identical, except with respect to voting rights. As a result, under the two-class method in accordance with ASC 260, net income (loss) available to the Company’s ordinary shareholders is allocated between Class A and Class B ordinary shares and other participating securities based on participating rights in undistributed earnings on a proportionate basis. The Company’s redeemable preferred shares (Note 14) are participating securities since the holders of these securities participate in dividends on the same basis as ordinary shareholders, in addition to the cumulative preferential dividend they enjoy. 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) available 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

The Company adopted ASU 2019-12, Income Tax (Topic 740), Simplifying the Accounting for Income Taxes on January 1, 2021. This ASU simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The adoption of this ASU did not have a material impact on the consolidated financial statements.

The Company adopted ASU 2020-01, Investments – Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) on January 1, 2021. This ASU clarifies the interaction for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The adoption of this standard did not have a material impact on the consolidated financial statements.

The Company adopted ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs on January 1, 2021. This ASU clarifies that an entity should reevaluate for each reporting period whether a callable debt security is within the scope of certain guidance in ASC 310-20 that was issued in ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The adoption of this standard did not have a material impact on the consolidated financial statements.

(ff)Recently issued accounting standards

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which reduces the number of accounting models for convertible debt instruments and convertible preferred stock and clarifies the scope and certain requirements under Subtopic 815-40. The ASU also improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard in the first quarter of 2022, and the adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force), which provides certain guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of other Topic. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted, and should be adopted prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted this standard in the first quarter of 2022, and the adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In July 2021, the FASB issued ASU 2021-05, Lessors-Certain Leases with Variable Lease. It requires lessors to classify leases as operating leases if they have variable lease payments that do not depend on an index or rate and would have selling losses if they were classified as sales-type or direct financing leases. The Company adopted this standard in the first quarter of 2022, and the adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted, and should be adopted prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model. The ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted, and should be adopted either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company adopted this standard in the first quarter of 2022, and the adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2021

SHARE-BASED COMPENSATION

Summary of the option activity


			Weighted
			average
		Weighted	grant-date
	Number	average	fair value
	of options	exercise price	per option
		(RMB)	(RMB)
Options outstanding at January 1, 2019	24,779,432	5.3	2.2
Granted	—
Exercised	(10,150,336)	5.6	3.5
Forfeited	—

Options outstanding at December 31, 2019	14,629,096	5.4	1.7
Granted	—
Exercised	(14,222,096)	5.5	1.6
Forfeited	—

Options outstanding at December 31, 2020	407,000	5.1	1.6
Granted	—
Exercised	(407,000)	5.1	1.6
Forfeited	—

Options outstanding at December 31, 2021	—

Options vested and expected to be vested at December 31, 2021	—

Summary of the restricted share activity


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

Unvested at January 1, 2019	29,510,504	9.3
Granted	14,551,472	34.2
Vested	(9,122,432)	9.3
Forfeited	(1,582,248)	10.7

Unvested at December 31, 2019	33,357,296	22.4
Granted	11,710,848	66.7
Vested	(12,684,640)	14.1
Forfeited	(1,364,736)	25.1

Unvested at December 31, 2020	31,018,768	42.4
Granted	12,107,888	31.6
Vested	(12,632,104)	29.3
Forfeited	(1,563,832)	37.7

Unvested at December 31, 2021	28,930,720	43.9

Assumptions used to estimate fair value of restricted shares granted


Grant date:	August 2019		August 2020		August 2021
Risk-free rate of return	1.67% - 1.88	%	0.14% - 0.19	%	0.07% - 0.33	%
Volatility	63.22	%	59.23	%	49.271% - 50.295	%
Expected dividend yield	0.00	%	0.00	%	0.00	%
Share price at grant date	US$5.02375		US$10.1475		US$7.45
	(RMB34.6)		(RMB70.5)		(RMB48.2)
Expected term	1 – 3 years		1 – 3 years		1 – 3 years

Summary of share-based compensation expenses


	Years ended December 31,
	2019	2020	2021

Costs of revenue	46,007	89,943	110,291
Selling and marketing expenses	39,436	54,204	53,560
General and administrative expenses	101,949	184,943	219,328
Research and development expenses	2,364	4,596	8,096
Total share-based compensation expenses	189,756	333,686	391,275

LEASES - Weighted Average Remaining Lease Term and Weighted Average Discount Rate for Leases (Details)	Dec. 31, 2021	Dec. 31, 2020
LEASES
Weighted average remaining lease term:- Finance leases	12 years	13 years 8 months 12 days
Weighted average remaining lease term:- Operating leases	13 years 8 months 12 days	15 years 7 months 6 days
Weighted average discount rate:- Finance leases	6.94%	7.00%
Weighted average discount rate:- Operating leases	5.87%	6.23%

INCOME TAX - Net operating losses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating losses carry forwards
Deferred tax assets	¥ 186,496	¥ 146,088
Valuation allowance on deferred tax assets	775,528	¥ 328,821	¥ 205,976	¥ 155,852
Deferred tax assets for net operating losses	713,135
Valuation allowance on net operating losses carryforwards	¥ 637,083
Statutory income tax rate	25.00%	25.00%	25.00%
State administration of taxation, China
Operating losses carry forwards
Net operating losses carry forwards	¥ 2,725,999
Net operating losses carry forwards expire if unused by December 31, 2022	87,190
Net operating losses carry forwards expire if unused by December 31, 2023	303,687
Net operating losses carry forwards expire if unused by December 31, 2024	352,655
Net operating losses carry forwards expire if unused by December 31, 2025	674,998
Net operating losses carry forwards expire if unused by December 31, 2026	¥ 1,307,469
Statutory income tax rate	25.00%
Withholding tax for dividends distributed by a PRC-resident enterprise to its non-PRC-resident corporate investor (as a percent)	10.00%

LOSS PER CLASS A and CLASS B ORDINARY SHARE - Computation of basic and diluted loss per share (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Computation of basic and diluted loss per share
Net loss	¥ (1,191,213)	¥ (669,214)	¥ (442,083)
Net loss attributable to non-controlling interests	1,403
Net loss attributable to redeemable non-controlling interests	2,592	2,807
Accretion to redemption value of redeemable non-controlling interests	(77,644)	(18,627)
Change in redemption value of redeemable preferred shares			(17,760)
Cumulative dividend on redeemable preferred shares	(49,073)	(52,709)	(40,344)
Net loss available to GDS Holdings Limited ordinary shareholders	¥ (1,313,935)	¥ (737,743)	¥ (500,187)
Weighted average number of ordinary share outstanding, basic	1,452,906,722	1,253,559,523	1,102,953,366
Weighted average number of ordinary share outstanding, diluted	1,452,906,722	1,253,559,523	1,102,953,366
Loss per Class A and Class B ordinary share, basic	¥ (0.90)	¥ (0.59)	¥ (0.45)
Loss per Class A and Class B ordinary share, diluted	¥ (0.90)	¥ (0.59)	¥ (0.45)
Proceeds from issuance of ordinary shares		¥ 15,974,517	¥ 4,934,126
Ordinary Shares
Computation of basic and diluted loss per share
Shares issued to depository bank (in shares)	0	32,592,288	48,962,896
Proceeds from issuance of ordinary shares	¥ 0	¥ 0	¥ 0

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive Loss (Parenthetical) (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Condensed Statements of Comprehensive Loss
Foreign currency translation adjustments, income taxes	¥ 0	¥ 0	¥ 0
Parent Company \| Reportable Legal Entities
Condensed Statements of Comprehensive Loss
Foreign currency translation adjustments, income taxes	¥ 0	¥ 0	¥ 0

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

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



	As of December 31,
	2020	2021

Contracted for	3,949,623	3,790,769

FAIR VALUE MEASUREMENT (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
FAIR VALUE MEASUREMENT
Convertible bonds payable fair value	¥ 2,246,231	¥ 3,683,816

LOANS AND BORROWINGS - Particulars of secured long-term loans and borrowings (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)
Secured long-term loans and borrowings
Early repayment if STT GDC PTe. Ltd. ceases to own and control, the percentage of equity interest in the Company	25.00%	25.00%
Financial covenants, fails to repay any financial indebtedness in an aggregate amount	¥ 50,000	$ 4,500
The Company and GDS Investment
Secured long-term loans and borrowings
Early repayment requirement, cease control of certain affiliate, percentage	100.00%	100.00%
Management Holdco
Secured long-term loans and borrowings
Early repayment requirement, cease control of certain affiliate, percentage	100.00%	100.00%
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 - Short-term borrowings secured (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Short-term borrowings
Weighted average interest rates of short-term borrowings	4.91%	4.67%
Assets to secure short-term borrowings	¥ 544,667	¥ 76,547
Secured short-term loans and borrowings	4,127,287	1,009,320
VIEs \| Borrowings guaranteed by GDS Holdings Limited
Short-term borrowings
Secured short-term loans and borrowings	18,460	89,400
Accounts receivable
Short-term borrowings
Assets to secure short-term borrowings	65,985	76,547
Accounts receivable \| VIEs
Short-term borrowings
Assets pledged	70,945	66,969
Property and equipment, net
Short-term borrowings
Assets to secure short-term borrowings	397,285
Property and equipment, net \| VIEs
Short-term borrowings
Assets pledged	46,007	¥ 102,248
Operating lease ROU assets
Short-term borrowings
Assets to secure short-term borrowings	¥ 81,397

ACQUISITIONS AND GOODWILL

12 Months Ended

Dec. 31, 2021

ACQUISITIONS AND GOODWILL

ACQUISITIONS AND GOODWILL

8 ACQUISITIONS AND GOODWILL

The movement of goodwill is set out as below:


	As of December 31,
	2020	2021

Balance at the beginning of the year	1,905,840	2,596,393
Addition during the year	746,015	4,463,504
Measurement period adjustments	(55,462)	16,608
Balance at end of year	2,596,393	7,076,505

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 6 Acquisition

On October 18, 2019, the Company consummated an acquisition of all equity interests in a target company from a third party for an aggregate cash consideration of RMB431,727 (including contingent considerations of RMB243,736).

The target entity owns a data center project (“Guangzhou 6”) in Guangzhou, China.

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, 2019 were immaterial.

Beijing 10, Beijing 11 and Beijing 12 Acquisition

On June 5, 2020, the Company consummated an acquisition of all equity interests in a target group from third parties. The target group owns three data center projects (“Beijing 10, Beijing 11 and Beijing 12”) in Beijing, China. Pursuant to the share purchase agreement, the considerations included purchase price adjustments resulting from the differences between the fair value of certain assets and liabilities on the date of acquisition compared to the estimated fair value used to determine the closing considerations. The Company initially estimated the considerations to be RMB847,586 (including contingent considerations of RMB130,720).

The amounts of net revenue and net profit of the target group included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2020 amounted to RMB281,926 and RMB14,083, respectively.

Beijing 9 Acquisition

On December 18, 2020, the Company consummated an acquisition of all equity interests in a target company from a third party for an aggregate cash consideration of RMB816,969 (including contingent considerations of RMB463,496).

The target entity owns a data center project (“Beijing 9”) in Beijing, China.

The amounts of net revenue and net profit of the target entity included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2020 were immaterial.

Shanghai 19 Acquisition

On November 17, 2020, the Company consummated an acquisition of all equity interests in a target group from third parties for an aggregate cash consideration of RMB62,480. The target group owns a data center project (“Shanghai 19 Phase I and II”) in Shanghai, China.

The amounts of net revenue and net profit of the target entity included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2020 were immaterial.

Beijing 15 and Beijing 16 Acquisition

On April 30, 2021, the Company consummated an acquisition of all equity interests in a target group, which owns one in-service data center (Beijing 15) and one in-development data center (Beijing 16) by converting a vacant building located at the site of Beijing 15 in Beijing, China, from third parties. The provisional cash consideration for the equity interest was RMB3,176,354, subject to the final confirmation on certain conditions.

Pursuant to a supplemental agreement entered into between the seller and the Company in October 2021, both parties agreed to revise the terms of payment of the purchase price consideration and its payment conditions, resulting in the reduction of the present value of the purchase price consideration of RMB7,007, which was recognized as gain from purchase price adjustment in the consolidated statement of operations for the year ended December 31, 2021.

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, 2021 were RMB354,281 and RMB23,663, respectively.

Beijing 20, Beijing 21, Beijing 22 and Beijing 23 Acquisition

On December 17, 2021, the Company consummated an acquisition of 90% equity interests in a target group, which owns four data center projects (Beijing 20, Beijing 21, Beijing 22 and Beijing 23) in Beijing, China, from third parties for an aggregate cash consideration of RMB1,303,714.

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, 2021 were immaterial.

Other Business Combinations

In the year ended December 31, 2021, the Company also consummated other acquisitions of data center projects, including Beijing 17, Beijing 18, Beijing 19, Shenzhen 9 and Shenzhen 10, for an aggregate provisional cash consideration of RMB768,107.

The amounts of net revenue and net loss of the target companies included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2020 and 2021 were immaterial.

The allocations of purchase price as of the date of acquisitions for the years ended December 31, 2019, 2020 and 2021 are summarized as follows.


	2019	2020	2021
	Note (i)(ii)	Note (iii)(iv)(v)	Note (vi)(vii)
Fair value of consideration	423,075	1,660,685	5,230,362
Effective settlement of pre-existing relationships upon consolidation	—	(31,229)	20,000
Other net assets acquired	(255,245)	(547,815)	(256,650)
Identifiable intangible assets	(15,000)	(449,600)	(689,800)
Deferred tax liabilities	1,040	75,120	159,592
Total identifiable net assets	(269,205)	(922,295)	(786,858)
Goodwill	153,870	707,161	4,463,504

Note (i):

Other net assets acquired primarily include property and equipment of RMB493,026, accounts payable of RMB118,486 and finance lease and other financing obligations of RMB174,194.

Note (ii):

Identifiable intangible assets acquired consisted of customer contracts of RMB15,000 with an estimated useful life of 7.8 years.

Note (iii):

Other net assets acquired primarily include property and equipment of RMB2,783,257, accounts payable of RMB1,133,760 and finance lease and other financing obligations of RMB1,362,103.

Note (iv):

Identifiable intangible assets acquired consisted of customer contracts of RMB449,600 with estimated useful lives from 6.5 to 12.1 years.

Note (v):

Note (vi):

Note (vii):

Identifiable intangible assets acquired consisted of customer contracts of RMB689,800 with estimated useful lives from 5.7 to 7 years.

Supplemental pro forma financial information as if the acquisitions had occurred as of the beginning of the comparable prior annual reporting period has not been provided as each of the acquisitions, individually and in aggregate, were not material to the Company’s results of operations during the respective year of the acquisitions.

Asset Acquisitions

In 2019, 2020 and 2021, the Company consummated several acquisitions of certain target entities. These target entities did not meet the definition of a business as of the acquisition date in accordance with ASC 805 Business Combinations, and the acquisitions were accounted for as assets acquisitions. The primary assets acquired were properties self-owned or under finance leases, equipment and leasehold improvements. The Company has elected an accounting policy to measure non-controlling interests in asset acquisition at carryover basis, which is based on the carrying amounts within the acquired entity. Non-controlling interests with a total amount of RMB56,519 was recognized upon these acquisitions in the year ended December 31, 2021.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Research and development and advertising costs, Government grants, Capitalized interest and Debt issuance cost (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Research and development and advertising costs
Research and development expenses	¥ 39,343	¥ 40,049	¥ 21,627
Advertising costs	15,043	14,778	7,454
Government grants
Deferred government grants in other long-term liabilities	22,245	6,196
Capitalized interest
Total interest costs	1,805,434	1,402,015	1,040,898
Less: interest costs capitalized	(150,697)	(85,509)	(72,205)
Interest expenses	1,654,737	1,316,506	¥ 968,693
Debt issuance costs
Unamortised debt issuance costs	197,119	226,085
Noncurrent liabilities
Government grants
Deferred government grants in other long-term liabilities	22,245	6,196
Other current assets
Debt issuance costs
Unamortized debt commitment costs	¥ 0	¥ 28,919

SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	1 Months Ended			12 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Weighted average grant-date fair value per share (RMB)
Total share based compensation expense				¥ 391,275	¥ 333,686	¥ 189,756
Restricted shares
Number of Shares
Outstanding, beginning				31,018,768	33,357,296	29,510,504
Granted (in shares)				12,107,888	11,710,848	14,551,472
Vested (in shares)				(12,632,104)	(12,684,640)	(9,122,432)
Forfeited (in shares)				(1,563,832)	(1,364,736)	(1,582,248)
Outstanding, ending				28,930,720	31,018,768	33,357,296
Weighted average grant-date fair value per share (RMB)
Outstanding, beginning				¥ 42.4	¥ 22.4	¥ 9.3
Granted (in RMB per share)				31.6	66.7	34.2
Vested (in RMB per share)				29.3	14.1	9.3
Forfeited (in RMB per share)				37.7	25.1	10.7
Outstanding, ending				¥ 43.9	¥ 42.4	¥ 22.4
Total unrecognized compensation expense				¥ 422,369
Total share based compensation expense				¥ 391,275	¥ 333,686	¥ 189,447
Weighted average period over which unrecognized compensation expense is expected to be recognized				1 year 6 months 10 days
Intrinsic value of restricted shares vested				¥ 674,147	¥ 827,396	¥ 311,923
Intrinsic value of unvested restricted shares				¥ 1,087,349
Restricted shares \| Employees, officers and directors
Number of Shares
Granted (in shares)	11,929,608	11,520,312	14,314,160

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES - Accrued expenses and other payables (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES
Consideration payable for acquisitions	¥ 1,855,261	¥ 888,693
Accrued payroll and welfare benefits	184,220	114,632
Accrued interest expenses	141,642	65,390
Income tax payable	139,667	102,683
Other tax payables	40,986	39,372
Accrued debt issuance costs and other financing costs	25,930	32,512
Amount due to related parties	24,145	15,360
Others	267,704	137,339
Total accrued expenses and other payables	¥ 2,679,555	¥ 1,395,981

PROPERTY AND EQUIPMENT, NET - Depreciation (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Depreciation expense
Depreciation of property and equipment	¥ 2,399,451	¥ 1,543,130	¥ 1,057,171
Costs of revenue
Depreciation expense
Depreciation of property and equipment	2,264,620	1,418,846	1,045,446
General and administrative expenses
Depreciation expense
Depreciation of property and equipment	129,128	120,604	10,448
Research and development expenses
Depreciation expense
Depreciation of property and equipment	¥ 5,703	¥ 3,680	¥ 1,277

PREPAID LAND USE RIGHTS (Tables)

12 Months Ended

Dec. 31, 2021

PREPAID LAND USE RIGHTS

Schedule of prepaid land use rights


	As of December 31,
	2020	2021

Prepaid land use rights	736,695	716,492
Less: Accumulated amortization	(58,505)	(81,539)
Prepaid land use rights, net	678,190	634,953

LOSS PER CLASS A and CLASS B ORDINARY SHARE

12 Months Ended

Dec. 31, 2021

LOSS PER CLASS A and CLASS B ORDINARY SHARE

LOSS PER CLASS A and CLASS B ORDINARY SHARE

23 LOSS PER CLASS A and CLASS B ORDINARY SHARE

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


	Years ended December 31,
	2019	2020	2021

Net loss	(442,083)	(669,214)	(1,191,213)
Net loss attributable to non-controlling interests	—	—	1,403
Net loss attributable to redeemable non-controlling interests	—	2,807	2,592
Accretion to redemption value of redeemable non-controlling interests	—	(18,627)	(77,644)
Change in redemption value of redeemable preferred shares	(17,760)	—	—
Cumulative dividend on redeemable preferred shares	(40,344)	(52,709)	(49,073)
Net loss available to GDS Holdings Limited ordinary shareholders	(500,187)	(737,743)	(1,313,935)

Weighted average number of ordinary shares outstanding - basic and diluted	1,102,953,366	1,253,559,523	1,452,906,722

Loss per ordinary share - basic and diluted	(0.45)	(0.59)	(0.90)

The following table sets forth the computation of basic and diluted loss per Class A and Class B ordinary share:


	Years ended December 31,
	2019		2020		2021
	Class A	Class B	Class A	Class B	Class A	Class B
Allocation of net loss available to GDS Holdings Limited ordinary shareholders	(469,535)	(30,652)	(697,965)	(39,778)	(1,252,810)	(61,125)
Weighted average number of ordinary shares outstanding - basic and diluted	1,035,363,030	67,590,336	1,185,969,187	67,590,336	1,385,316,386	67,590,336
Loss per ordinary share - basic and diluted	(0.45)	(0.45)	(0.59)	(0.59)	(0.90)	(0.90)

During the years ended December 31, 2019, 2020 and 2021, the Company issued 48,962,896, 32,592,288 and nil ordinary shares, respectively, 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 either the performance condition relating to the securities have not been satisfied or anti-dilutive. The share options and restricted shares below represented the maximum number of shares to be issued.


	Years ended December 31,
	2019	2020	2021

Share options/restricted shares	47,986,392	31,425,768	28,930,720
Convertible bonds payable	46,527,600	46,526,049	46,526,049
Total	94,513,992	77,951,817	75,456,769

DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2021

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

16 DERIVATIVE FINANCIAL INSTRUMENTS

As of December 31, 2020 and 2021, the Company did not have outstanding interest rate swap contracts.

The following table reflects the location in the consolidated statements of operations and the amount of realized and unrealized gains/(losses) recognized for the derivative contracts not designated as hedging instruments for the years ended December 31, 2019, 2020 and 2021:


	Consolidated
	statements of	Years ended December 31,
	operations location	2019	2020	2021

Interest rate swap contracts (not designated as hedging instruments) — realized loss	Interest expenses	(1,652)	(19,814)	—
Interest rate swap contracts (not designated as hedging instruments) — unrealized (loss) gain	Interest expenses	(10,606)	10,039	—
		(12,258)	(9,775)	—

REVENUE (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
REVENUE (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenue recognition
Net revenue	¥ 7,818,681	¥ 5,738,972	¥ 4,122,405
Service revenue
Revenue recognition
Net revenue	7,814,404	5,716,868	4,094,571
Colocation services
Revenue recognition
Net revenue	6,514,268	4,710,923	3,261,745
Managed service and others
Revenue recognition
Net revenue	1,300,136	1,005,945	832,826
Equipment sales
Revenue recognition
Net revenue	¥ 4,277	¥ 22,104	¥ 27,834

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2021

INTANGIBLE ASSETS, NET

Schedule of intangible assets


		As of December 31,
	Note	2020	2021

Customer contracts	8	952,100	1,641,900
Licenses		15,782	15,782
		967,882	1,657,682
Less: accumulated amortization		(182,560)	(375,046)
Intangible assets, net		785,322	1,282,636

Schedule of estimated future amortization expense


Fiscal year ending December 31,
2022		235,290
2023		233,748
2024		226,890
2025		212,577
2026		206,387
Thereafter		167,744
Total		1,282,636

LOANS AND BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2021

LOANS AND BORROWINGS

Schedule of borrowings


	As of December 31,
	2020	2021

Short-term borrowings	1,230,756	4,639,674
Current portion of long-term borrowings	922,634	1,308,339
Sub-total	2,153,390	5,948,013
Long-term borrowings, excluding current portion	10,566,746	18,284,514
Total loans and borrowings	12,720,136	24,232,527

Schedule of short-term borrowings


	As of December 31,
	2020	2021

Unsecured short-term loans and borrowings	221,436	512,387
Secured short-term loans and borrowings	1,009,320	4,127,287
	1,230,756	4,639,674

Schedule of assets to secure the short-term borrowings


	As of December 31,
	2020	2021

Accounts receivable	76,547	65,985
Property and equipment, net	—	397,285
Operating lease ROU assets	—	81,397

	76,547	544,667

Schedule of long-term borrowings


	As of December 31,
	2020	2021

Unsecured long-term loans and borrowings	112,500	60,000
Secured long-term loans and borrowings	11,376,880	19,532,853
	11,489,380	19,592,853

Schedule of assets to secure the long-term borrowings


	As of December 31,
	2020	2021

Accounts receivable	743,031	974,536
Property and equipment, net	2,918,670	2,629,904
Prepaid land use rights, net	678,190	634,953
Operating lease ROU assets	599,120	1,537,304
Other non-current assets	—	14,691
	4,939,011	5,791,388

Schedule of aggregate maturities of the long-term borrowings



		Long-term borrowings
Twelve months ending December 31,
2022		1,308,339
2023		2,117,151
2024		1,951,579
2025		2,231,414
2026		2,555,507
Thereafter		9,428,863
		19,592,853

- 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.

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+ Details

REDEEMABLE PREFERRED SHARES (Tables)

12 Months Ended

Dec. 31, 2021

REDEEMABLE PREFERRED SHARES

Schedule of movement of the redeemable preferred shares


		Redeemable
		preferred shares
Balance at January 1, 2019		—
Issuance of redeemable preferred shares		989,349
Change in redemption value of redeemable preferred shares		17,760
Accrual of redeemable preferred shares dividends		40,344
Settlement of redeemable preferred shares dividends		(25,014)
Foreign exchange impact		39,542

Balance at December 31, 2019		1,061,981
Accrual of redeemable preferred shares dividends		52,709
Settlement of redeemable preferred shares dividends		(65,489)
Foreign exchange impact		(68,291)

Balance at December 31, 2020		980,910
Accrual of redeemable preferred shares dividends		49,073
Settlement of redeemable preferred shares dividends		(49,221)
Foreign exchange impact		(22,282)
Balance at December 31, 2021		958,480

INCOME TAX

12 Months Ended

Dec. 31, 2021

INCOME TAX

INCOME TAX

21 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 in 2019 and 2020. It was registered as a Hong Kong SAR tax resident and subject to the Hong Kong SAR Profits Tax rate of 16.5% in 2021.

Three PRC entities are entitled to PRC Corporate Income Tax (“CIT”) rate of 15% in those years that being recognized as “High and New Technology Enterprise” as long as the relevant requirements are satisfied. Certain PRC entities satisfying the criteria of “Small and Micro Businesses” enjoy lower income tax rates. All the other PRC subsidiaries and consolidated VIEs of the Company are subject to CIT rate of 25%.

The Company’s Hong Kong SAR subsidiaries are subject to the Hong Kong SAR Profits Tax rate of 16.5%. A two-tiered Profits Tax rates regime was introduced since year 2018 where the first HK$2 million of assessable profits earned will be taxed at half the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one entity in the group to benefit from the progressive rates.

The Company’s Singapore and Malaysia subsidiaries are subject to the Singapore CIT rate of 17% and the Malaysia CIT rate of 24%, respectively.

The operating results before income tax and the provision for income taxes by tax jurisdictions for the years ended December 31, 2019, 2020 and 2021 are as follows:


	Years ended December 31,
	2019	2020	2021
Loss (income) before income taxes:
PRC	68,080	(19,765)	287,250
Other jurisdictions	358,353	568,201	661,502
Total loss before income taxes	426,433	548,436	948,752

Current tax expenses:
PRC	65,819	210,503	290,924
Other jurisdictions	3	14	—
Total current tax expenses	65,822	210,517	290,924

Deferred tax benefits:
PRC	(50,172)	(89,739)	(48,463)
Other jurisdictions	—	—	—
Total deferred tax benefits	(50,172)	(89,739)	(48,463)

Total income taxes expenses	15,650	120,778	242,461

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,
	2019		2020		2021

PRC enterprise income tax rate	25.0	%	25.0	%	25.0	%
Non-PRC resident enterprises not subject to income tax	(21.4)	%	(27.6)	%	0.0	%
Tax differential for entities in non-PRC jurisdiction	(1.4)	%	(1.3)	%	(0.2)	%
Preferential tax rate	0.0	%	(0.3)	%	0.6	%
Tax effect of current year permanent differences	1.5	%	1.0	%	(5.4)	%
Expiration of unused net operating losses	(1.4)	%	(1.3)	%	(1.5)	%
Non-taxable income and non-deductible expenses	0.0	%	2.5	%	(14.2)	%
Change in valuation allowance	(8.7)	%	(21.3)	%	(31.0)	%
Return to provision adjustment	2.7	%	1.3	%	1.1	%
	(3.7)	%	(22.0)	%	(25.6)	%

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


	As of December 31,
	2020	2021
Deferred tax assets:
Allowance for accounts receivable	1,959	2,858
Government subsidy	1,549	5,561
Accrued expenses	24,597	47,068
Asset retirement obligation	19,227	24,167
Operating lease liabilities	411,289	467,734
Finance lease and other financing obligations	1,577,663	1,636,506
Net operating losses carry forwards	386,999	713,135
Other non-current assets	—	41,853
Other non-current liabilities	—	26,621
Total gross deferred tax assets	2,423,283	2,965,503
Valuation allowance on deferred tax assets	(328,821)	(775,528)
Deferred tax assets, net of valuation allowance	2,094,462	2,189,975

Deferred tax liabilities:
Property and equipment	(1,663,342)	(1,687,122)
Intangible assets	(195,093)	(319,037)
Prepaid land use rights	(1,572)	(1,532)
Operating lease right-of-use assets	(550,374)	(711,444)
Other current assets	—	(18,622)
Total deferred tax liabilities	(2,410,381)	(2,737,757)

Net deferred tax liabilities	(315,919)	(547,782)

Analysis as:
Deferred tax assets	146,088	186,496
Deferred tax liabilities	(462,007)	(734,278)
Net deferred tax liabilities	(315,919)	(547,782)

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


	Years ended December 31,
	2019	2020	2021

Balance at the beginning of the year	155,852	205,976	328,821
Increase during the year	50,124	122,845	446,707
Balance at the end of the year	205,976	328,821	775,528

As of December 31, 2021, the Company’s net deferred tax assets were RMB186,496, which is net of a valuation allowance of RMB775,528. The deferred tax assets for net operating losses carry forwards and related valuation allowance were RMB713,135 and RMB637,083, respectively as of December 31, 2021. This valuation allowance was related to the deferred tax assets of certain subsidiaries and consolidated VIEs of the Company. These entities were in a cumulative loss position with net operating losses carry forwards which are subject to expiration. The Company evaluated the realizability of deferred tax assets associated with the Company’s net operating losses carry forwards to determine whether there was more than a 50% likelihood that these deferred tax assets would be realized, based on the Company’s expectations of future taxable income and timing of net operating losses carry forwards expirations. 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. The Company 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 and consolidated VIEs amounted to RMB2,725,999 as of December 31, 2021, of which RMB87,190, RMB303,687, RMB352,655, RMB674,998 and RMB1,307,469 will expire if unused by December 31, 2022, 2023, 2024, 2025 and 2026, 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 Enterprise Income Tax Law (the “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 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 EIT Law purposes. If the PRC tax authorities subsequently determine that GDS Holdings and its subsidiaries registered outside the PRC are deemed resident enterprises, GDS Holdings 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 EIT 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, 2020 and 2021, 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.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

INCOME TAX - Reconciliation of statutory tax rate and effective tax rate (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of the differences between actual income tax expense and the PRC statutory tax rate
Statutory income tax rate	25.00%	25.00%	25.00%
Non-PRC resident enterprises not subject to income tax	0.00%	(27.60%)	(21.40%)
Tax differential for entities in non-PRC jurisdiction	(0.20%)	(1.30%)	(1.40%)
Preferential tax rate	0.60%	(0.30%)	0.00%
Tax effect of current year permanent differences	(5.40%)	1.00%	1.50%
Expiration of unused net operating losses	(1.50%)	(1.30%)	(1.40%)
Non-taxable income and non-deductible expenses	(14.20%)	2.50%	0.00%
Change in valuation allowance	(31.00%)	(21.30%)	(8.70%)
Return to provision adjustment	1.10%	1.30%	2.70%
Effective tax rate (as a percent)	(25.60%)	(22.00%)	(3.70%)

REDEEMABLE PREFERRED SHARES - Key terms of the convertible preferred shares (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) D $ / shares	Dec. 31, 2020 CNY (¥)
REDEEMABLE PREFERRED SHARES
Volume-weighted average price ("VWAP") per ADS \| $ / shares	$ 53.40
Conversion price \| $ / shares	$ 35.60
Issuance of ordinary shares in exchange of bonds payable \| ¥		¥ 65
Redeemable preferred shares
REDEEMABLE PREFERRED SHARES
Dividend rate per annum	5.00%
Increase dividend rate per annum	7.00%
Increase in dividend rate each quarter thereafter if the Company has not redeemed all of the preferred shares outstanding as of the eighth anniversary of the Issue Date	0.50%
Number of trading days \| D	20
Consecutive trading days \| D	30
Aggregate value of preferred shares \| $	$ 10,000
Minimum percentage of the preferred shares issued as of the Issue Date, right to require the Company to sell all or a portion of its business and/or to conduct other fundraising or refinancing activities	90.00%
Issuance costs \| $	$ 2,646
Minimum percentage of outstanding preferred shares' written consent or affirmative vote needed for certain actions	75.00%

PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash	¥ 9,968,109	¥ 16,259,457
Restricted cash	2,014,304	86,829
Prepaid expenses	202,744	163,986
Other current assets	316,942	172,579
Total current assets	14,463,875	18,318,806
Restricted cash	43,954	146,643
Other non-current assets	1,071,372	486,071
Total assets	71,632,443	57,258,795
Current liabilities
Short-term borrowings	4,639,674	1,230,756
Accounts payable	3,901,799	3,657,112
Accrued expenses and other payables	2,679,555	1,395,981
Total current liabilities	13,465,243	7,643,821
Long-term borrowings	18,284,514	10,566,746
Convertible bonds payable	1,895,846	1,928,466
Other long-term liabilities	539,300	349,257
Total liabilities	45,736,281	30,591,073
Mezzanine equity
Redeemable preferred shares (US$0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2020 and 2021; Redemption value of RMB 980,910 and RMB 958,480 as of December 31, 2020 and 2021, respectively; Liquidation preference of RMB 2,576,578 and RMB 1,269,027 as of December 31, 2020 and 2021, respectively)	958,480	980,910
Total mezzanine equity	1,363,153	1,101,730
GDS Holdings Limited Shareholders' Equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 authorized; 1,427,590,059 Class A ordinary shares issued and outstanding as of December 31, 2020 and 2021; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2020 and 2021)	507	507
Additional paid-in capital	28,983,330	28,728,717
Accumulated other comprehensive loss	(599,186)	(439,635)
Accumulated deficit	(3,910,815)	(2,723,597)
Total GDS Holdings Limited shareholders' equity	24,473,836	25,565,992
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders' equity	71,632,443	57,258,795
Parent Company \| Reportable Legal Entities
Current assets
Cash	3,288,955	12,312,249
Restricted cash	1,944,589
Prepaid expenses	10,836	39,187
Other current assets	4,720	23,136
Total current assets	5,249,100	12,374,572
Investment, loans and amounts due from subsidiaries and consolidated VIEs	25,260,616	16,146,058
Other non-current assets	777	3,616
Total assets	30,510,493	28,524,246
Current liabilities
Short-term borrowings	3,148,188
Accounts payable	899	12,451
Accrued expenses and other payables	32,395	29,790
Due to subsidiaries	849	868
Total current liabilities	3,182,331	43,109
Convertible bonds payable	1,895,846	1,928,466
Other long-term liabilities		5,769
Total liabilities	5,078,177	1,977,344
Mezzanine equity
Redeemable preferred shares (US$0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2020 and 2021; Redemption value of RMB 980,910 and RMB 958,480 as of December 31, 2020 and 2021, respectively; Liquidation preference of RMB 2,576,578 and RMB 1,269,027 as of December 31, 2020 and 2021, respectively)	958,480	980,910
Total mezzanine equity	958,480	980,910
GDS Holdings Limited Shareholders' Equity
Ordinary shares (US$0.00005 par value; 2,002,000,000 authorized; 1,427,590,059 Class A ordinary shares issued and outstanding as of December 31, 2020 and 2021; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2020 and 2021)	507	507
Additional paid-in capital	28,983,330	28,728,717
Accumulated other comprehensive loss	(599,186)	(439,635)
Accumulated deficit	(3,910,815)	(2,723,597)
Total GDS Holdings Limited shareholders' equity	24,473,836	25,565,992
Total liabilities, mezzanine equity and shareholders' equity	¥ 30,510,493	¥ 28,524,246

LEASES - Supplemental Cash Flow Information Related to Leases (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
LEASES
Cash paid for amounts included in measurement of lease liabilities:- Operating cash flows from finance leases	¥ (591,189)	¥ (389,679)	¥ (248,417)
Cash paid for amounts included in measurement of lease liabilities:- Operating cash flows from operating leases	(236,589)	(141,480)	(116,295)
Cash paid for amounts included in measurement of lease liabilities:- Financing cash flows from finance leases	(265,481)	(198,234)	(302,679)
Non-cash information on lease liabilities arising from obtaining ROU assets- Finance leases	25,731	1,099,698	708,757
Non-cash information on lease liabilities arising from obtaining ROU assets- Operating leases	368,069	553,154	333,775
Cash paid for purchase of land use rights and the related initial direct costs of leases	¥ 875,162	¥ 744,761	¥ 800,431

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of financial statement balances and amounts of the VIEs and their subsidiaries and schedule of net revenue and net income, operating, investing and financing cash flows of VIEs


	As of December 31,
	2020	2021
Assets
Current assets
Cash	1,310,269	1,338,525
Accounts receivable, net of allowance for doubtful accounts	1,388,128	1,677,171
VAT recoverable	85,760	138,304
Prepaid expenses	76,505	90,848
Other current assets	13,259	99,231
Total current assets	2,873,921	3,344,079

Property and equipment, net	2,760,618	2,671,567
Intangible assets, net	194,230	175,004
Operating lease right-of-use assets	430,525	204,825
Deferred tax assets	43,126	32,949
Restricted cash	49,905	—
VAT recoverable	113,684	111,982
Other non-current assets	115,315	153,696
Total assets	6,581,324	6,694,102

Liabilities
Current liabilities
Short-term borrowings and current portion of long-term borrowings	628,721	426,000
Accounts payable	194,325	430,518
Accrued expenses and other payables	152,534	223,563
Deferred revenue	90,192	87,364
Operating lease liabilities, current	50,888	40,371
Finance lease and other financing obligations, current	31,629	28,161
Total current third-party liabilities	1,148,289	1,235,977

Long-term borrowings, excluding current portion	1,213,020	899,769
Operating lease liabilities, non-current	361,502	172,458
Finance lease and other financing obligations, non-current	982,209	965,356
Deferred tax liabilities	91,036	76,460
Other long-term liabilities	34,281	66,379
Total third-party liabilities	3,830,337	3,416,399
Amounts due to GDS Holdings and its non-VIE subsidiaries, net	2,531,025	2,947,857
Total liabilities	6,361,362	6,364,256

Schedule of net revenue, net income and cash flow of VIEs


	Years ended December 31,
	2019	2020	2021

Net revenue	4,013,561	5,453,802	7,516,345
Net income	99,857	129,254	112,257
Net cash provided by operating activities	414,424	899,132	744,493
Net cash used in investing activities	(201,995)	(278,744)	(205,041)
Net cash used in financing activities	(43,547)	(20,682)	(561,101)

Schedule of estimated useful lives of self-owned property and equipment


Buildings		30 years
Data center equipment
– Machinery		10 - 20 years
– Other equipment		3 - 5 years
Furniture and office equipment		3 - 5 years
Vehicles		5 years

Schedule of asset retirement obligations


Asset retirement obligations as of January 1, 2019		35,879
Additions		13,572
Accretion expense		2,990
Asset retirement obligations as of December 31, 2019		52,441
Additions		20,384
Accretion expense		4,084
Asset retirement obligations as of December 31, 2020		76,909
Additions		22,745
Accretion expense		6,227
Settlement		(998)
Asset retirement obligations as of December 31, 2021		104,883

Schedule of weighted-average amortization period of acquired intangible assets


Customer contracts		5-15 years
Licenses		20 years

Schedule of reconciliation of total interest costs to "Interest expenses" as reported in the consolidated statements of operations


	Years ended December 31,
	2019	2020	2021

Total interest costs	1,040,898	1,402,015	1,805,434
Less: interest costs capitalized	(72,205)	(85,509)	(150,697)

Interest expenses	968,693	1,316,506	1,654,737

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


	RMB	USD	HKD	JPY	EUR	SGD	MYR
In PRC	5,788,295	205,328	—	—	—	—	—
In Hong Kong SAR	21,458	160,565	106,301	45,234	146	—	—
In US	—	80,009	—	—	—	—	—
In Singapore	—	505,299	—	—	—	12,552	—
In Malaysia	—	365	—	—	—	—	12
Total in original currency	5,809,753	951,566	106,301	45,234	146	12,552	12
RMB equivalent	5,809,753	6,066,900	86,912	2,507	1,057	59,220	18

- 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

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating activities:
Net cash used in operating activities	¥ 1,201,363	¥ 320,887	¥ 293,436
Investing activities:
Net cash used in investing activities	(13,691,538)	(9,378,007)	(5,131,231)
Financing activities:
Proceeds from short-term borrowings	3,775,353	1,156,215	467,744
Proceeds from long-term borrowings	12,409,833	6,939,140	5,000,510
Repayment of long-term borrowings	(5,177,495)	(4,187,184)	(1,968,913)
Proceeds from exercise of stock options	2,082	78,748	55,469
Net proceeds from issuance of ordinary shares		15,974,517	4,934,126
Net proceeds from issuance of redeemable preferred shares			989,349
Payment of redeemable preferred shares dividends	(49,221)	(65,489)	(25,014)
Net cash provided by financing activities	8,119,155	20,143,661	8,361,939
Effect of exchange rate changes on cash and restricted cash	(95,542)	(566,874)	164,370
Net increase (decrease) in cash and restricted cash	(4,466,562)	10,519,667	3,688,514
Cash and restricted cash at beginning of year	16,492,929	5,973,262	2,284,748
Cash and restricted cash at end of year	12,026,367	16,492,929	5,973,262
Supplemental disclosures of cash flow information
Interest paid	1,538,974	1,113,443	841,388
Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted share award	11,147	10,089	7,984
Conversion of convertible bonds		65
Parent Company \| Reportable Legal Entities
Operating activities:
Net cash used in operating activities	(83,019)	(45,269)	(48,514)
Investing activities:
Investment, loans and advances to subsidiaries	(9,935,432)	(4,940,005)	(4,473,682)
Net cash used in investing activities	(9,935,432)	(4,940,005)	(4,473,682)
Financing activities:
Proceeds from short-term borrowings	3,187,850
Proceeds from long-term borrowings			268,100
Payment of issuance cost of borrowings	(40,645)	(10,619)
Payment of commitment cost of borrowings		(45,968)
Repayment of long-term borrowings		(657,820)
Proceeds from exercise of stock options	2,082	78,748	55,469
Net proceeds from issuance of ordinary shares		15,974,517	4,934,126
Net proceeds from issuance of redeemable preferred shares			989,349
Payment of redeemable preferred shares dividends	(49,221)	(65,489)	(25,014)
Net cash provided by financing activities	3,100,066	15,273,369	6,222,030
Effect of exchange rate changes on cash and restricted cash	(160,320)	(563,459)	70,291
Net increase (decrease) in cash and restricted cash	(7,078,705)	9,724,636	1,770,125
Cash and restricted cash at beginning of year	12,312,249	2,587,613	817,488
Cash and restricted cash at end of year	5,233,544	12,312,249	2,587,613
Supplemental disclosures of cash flow information
Interest paid	38,243	92,509	88,818
Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted share award	¥ 11,147	10,089	¥ 7,984
Conversion of convertible bonds		¥ 65

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment losses for goodwill	¥ 0	¥ 0	¥ 0

CONTRACT BALANCES - Remaining performance obligations (Details) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021 CNY (¥)
Remaining performance obligations
Revenue expected to be recognized	¥ 8,186,153
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Remaining performance obligations
Revenue expected to be recognized	1,084,635
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Remaining performance obligations
Revenue expected to be recognized	1,208,157
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Remaining performance obligations
Revenue expected to be recognized	1,251,249
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Remaining performance obligations
Revenue expected to be recognized	1,197,587
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Remaining performance obligations
Revenue expected to be recognized	1,040,895
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Remaining performance obligations
Revenue expected to be recognized	¥ 2,403,630
Minimum
Remaining performance obligations
Period over which remaining performance obligations are expected to be recognized as revenue	1 year
Maximum
Remaining performance obligations
Period over which remaining performance obligations are expected to be recognized as revenue	15 years

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	¥ (1,191,213)	¥ (669,214)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of nil tax	(159,714)	(386,951)
Comprehensive loss	(1,350,927)	(1,056,165)
Comprehensive loss attributable to non-controlling interests	1,566
Comprehensive loss attributable to redeemable non-controlling interests	2,592	2,807
Comprehensive loss attributable to GDS Holdings Limited shareholders	¥ (1,346,769)	¥ (1,053,358)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124509347&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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+ Details

PREPAID LAND USE RIGHTS

12 Months Ended

Dec. 31, 2021

PREPAID LAND USE RIGHTS

PREPAID LAND USE RIGHTS

7 PREPAID LAND USE RIGHTS

Prepaid land use rights, representing the amounts paid and relevant costs incurred for the rights to use land in the PRC and Hong Kong SAR acquired before the adoption of ASC 842, consisted of the following:


	As of December 31,
	2020	2021

Prepaid land use rights	736,695	716,492
Less: Accumulated amortization	(58,505)	(81,539)
Prepaid land use rights, net	678,190	634,953

Amortization of prepaid land use rights was RMB26,393, RMB26,656 and RMB24,961 for the years ended December 31, 2019, 2020 and 2021, respectively.

Prepaid land use rights with a net book value of RMB678,190 and RMB634,953 were pledged as security for bank loans (Note 9) as of December 31, 2020 and 2021, respectively.

Upon the adoption of ASC 842 on January 1, 2019, land use rights acquired are assessed in accordance with ASC 842 and recognized in operating lease right-of-use assets if they meet the definition of operating lease, or property and equipment if they meet the definition of finance lease (Note (2)(j)).

ORDINARY SHARES

12 Months Ended

Dec. 31, 2021

ORDINARY SHARES

ORDINARY SHARES

18 ORDINARY SHARES

On March 19, 2019, the Company completed a public offering in which the Company offered and sold 13,731,343 ADSs (or 109,850,744 Class A ordinary shares), including 1,791,044 ADSs (or 14,328,352 Class A ordinary shares) purchased by the underwriters by exercising their option. The Company raised a total of US$444,699 thousand (RMB2,982,242) in proceeds from this public offering, net of underwriting discounts and commissions and other issuance costs.

On December 10, 2019, the Company completed a public offering in which the Company offered and sold 6,318,680 ADSs (or 50,549,440 Class A ordinary shares), including 824,175 ADSs (or 6,593,400 Class A ordinary shares) purchased by the underwriters by exercising their option. The Company raised a total of US$277,256 thousand (RMB1,951,884) in proceeds from this public offering, net of underwriting discounts and commissions and other issuance costs.

In June 2020, two investors, Hillhouse Capital (“Hillhouse”) and STT GDC, purchased, through a private placement, of US$400 million and US$105 million respectively of 62,153,848 newly issued Class A ordinary shares of the Company at a price equivalent to US$65 per ADS (or US$8.125 per share). The Company received net proceeds of US$500,784 thousand (RMB3,533,285) from this private placement, after deducting underwriting commissions and other issuance costs.

On November 2, 2020, the Company successfully completed its secondary listing in Hong Kong and public offering of 160,000,000 Class A ordinary shares (or 20,000,000 ADSs) at a price of HK$80.88 per share. On November 6, 2020, the underwriters had fully exercised their over-allotment option in respect of 24,000,000 shares (or 3,000,000 ADSs). The Company received net proceeds from this offering of RMB12,441,232, after deducting underwriting discounts and commissions and the offering expenses payable by the Company.

As of December 31, 2021, the Company’s outstanding share capital consisted of 1,427,590,059 Class A ordinary shares and 67,590,336 Class B ordinary shares. A holder of a Class A ordinary share is conferred one vote per share on any resolution tabled at the general meeting of GDS Holdings. A holder of a Class B ordinary share is entitled to 20 votes per share on resolutions tabled at the general meeting of GDS Holdings for (i) the election or removal of a simple majority, or six, of directors; and (ii) any change to Articles of Association that would adversely affect the rights of Class B shareholders, and which are convertible into Class A ordinary shares, and will automatically convert into Class A ordinary shares under certain circumstances.

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2021

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment


	As of December 31,
	2020	2021
At cost:
Land	808,651	1,552,704
Buildings	9,552,953	12,178,017
Data center equipment	10,694,057	17,710,351
Leasehold improvement	7,307,207	8,230,992
Furniture and office equipment	97,039	137,691
Vehicles	4,383	4,606
	28,464,290	39,814,361
Less: Accumulated depreciation	(4,127,504)	(6,425,293)
	24,336,786	33,389,068
Construction in progress	5,259,275	7,234,435
Property and equipment, net	29,596,061	40,623,503

Schedule of depreciation of property and equipment


	Years ended December 31,
	2019	2020	2021

Cost of revenue	1,045,446	1,418,846	2,264,620
General and administrative expenses	10,448	120,604	129,128
Research and development expenses	1,277	3,680	5,703
	1,057,171	1,543,130	2,399,451

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES - Accounts payable (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accounts Payable	¥ 3,901,799	¥ 3,657,112
Property and equipment, net
Accounts Payable	3,573,468	3,386,605
Operating expenses
Accounts Payable	¥ 328,331	¥ 270,507

LOANS AND BORROWINGS - Long-term borrowings (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Long-term borrowings by type
Unsecured long-term loans and borrowings	¥ 60,000	¥ 112,500
Secured long-term loans and borrowings	19,532,853	11,376,880
Long-term borrowings	¥ 19,592,853	¥ 11,489,380

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

LOANS AND BORROWINGS - Long-term borrowings secured (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Loans and Borrowings
Assets to secure long-term loans and borrowings	¥ 5,791,388	¥ 4,939,011
Weighted average interest rates of long-term borrowings	5.53%	6.73%
Accounts receivable
Loans and Borrowings
Assets to secure long-term loans and borrowings	¥ 974,536	¥ 743,031
Property and equipment, net
Loans and Borrowings
Assets to secure long-term loans and borrowings	2,629,904	2,918,670
Prepaid land use rights, net
Loans and Borrowings
Assets to secure long-term loans and borrowings	634,953	678,190
Operating lease ROU assets
Loans and Borrowings
Assets to secure long-term loans and borrowings	1,537,304	599,120
Other non-current assets
Loans and Borrowings
Assets to secure long-term loans and borrowings	14,691
VIEs \| Borrowings guaranteed by GDS Holdings Limited
Loans and Borrowings
Secured long-term borrowings	1,060,250	1,348,355
VIEs \| Accounts receivable
Loans and Borrowings
Assets pledged	70,945	66,969
VIEs \| Property and equipment, net
Loans and Borrowings
Assets pledged	46,007	102,248
VIEs \| Other non-current assets
Loans and Borrowings
Assets pledged	¥ 14,691	¥ 0

ACQUISITIONS AND GOODWILL - Movement of goodwill (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Movement of goodwill
Balance at the beginning of the year	¥ 2,596,393	¥ 1,905,840
Addition during the year	4,463,504	746,015
Measurement period adjustments	16,608	(55,462)
Balance at end of year	¥ 7,076,505	¥ 2,596,393

PROPERTY AND EQUIPMENT, NET (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
At cost:
Property and equipment, gross	¥ 39,814,361	¥ 28,464,290
Less: Accumulated depreciation	(6,425,293)	(4,127,504)
Property and equipment net excluding construction in process	33,389,068	24,336,786
Construction in progress	7,234,435	5,259,275
Property and equipment, net	40,623,503	29,596,061
Land
At cost:
Property and equipment, gross	1,552,704	808,651
Buildings
At cost:
Property and equipment, gross	12,178,017	9,552,953
Data center equipment
At cost:
Property and equipment, gross	17,710,351	10,694,057
Leasehold improvement
At cost:
Property and equipment, gross	8,230,992	7,307,207
Furniture and office equipment
At cost:
Property and equipment, gross	137,691	97,039
Vehicles
At cost:
Property and equipment, gross	¥ 4,606	¥ 4,383

INCOME TAX - By tax Jurisdictions (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Loss (income) before income taxes:
PRC	¥ 287,250	¥ (19,765)	¥ 68,080
Other jurisdictions	661,502	568,201	358,353
Total loss before income taxes	948,752	548,436	426,433
Current tax expenses:
PRC	290,924	210,503	65,819
Other jurisdictions		14	3
Total current tax expenses	290,924	210,517	65,822
Deferred tax benefits:
PRC	(48,463)	(89,739)	(50,172)
Total deferred tax benefits	(48,463)	(89,739)	(50,172)
Total income taxes (benefits) expenses	¥ 242,461	¥ 120,778	¥ 15,650

INCOME TAX - Movement of the valuation allowance (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Movement of the valuation allowance
Balance at the beginning of the year	¥ 328,821	¥ 205,976	¥ 155,852
Increase during the year	446,707	122,845	50,124
Balance at the end of the year	¥ 775,528	¥ 328,821	¥ 205,976

PROPERTY AND EQUIPMENT, NET - Additional information (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
PROPERTY AND EQUIPMENT, NET
Property and equipment, net	¥ 40,623,503	¥ 29,596,061
Payables for purchase of property and equipment due beyond one year	0	139,162
Asset pledged as security
PROPERTY AND EQUIPMENT, NET
Property and equipment, net	¥ 4,479,259	¥ 3,497,447

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES

12 Months Ended

Dec. 31, 2021

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES

11	ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER PAYABLES

Accounts payable consisted of the following:


	As of December 31,
	2020	2021
Accounts payable for operating expenses	270,507	328,331
Accounts payable for purchase of property and equipment	3,386,605	3,573,468
	3,657,112	3,901,799

Accrued expenses and other payables consisted of the following:


	As of December 31,
	2020	2021

Consideration payables for acquisitions	888,693	1,855,261
Accrued payroll and welfare benefits	114,632	184,220
Accrued interest expenses	65,390	141,642
Income tax payable	102,683	139,667
Other tax payables	39,372	40,986
Accrued debt issuance costs and other financing costs	32,512	25,930
Amount due to related parties	15,360	24,145
Others	137,339	267,704
	1,395,981	2,679,555

LEASES - Components of Lease Expense (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Components of lease cost
Finance lease cost:- Amortization of right-of-use assets	¥ 546,437	¥ 423,075	¥ 222,101
Finance lease cost:- Interest on lease liabilities	592,835	465,692	299,511
Operating lease cost	313,752	195,869	100,469
Short-term lease cost	23,715	19,987	5,004
Variable lease cost	(786)	(55,599)
Total lease cost	1,475,953	1,049,024	¥ 627,085
Lease concessions granted	0	55,188
Variable lease cost (credit) recognized for certain finance leases with floating interest rate	¥ 786	¥ 411

LOANS AND BORROWINGS - Total loans and borrowings (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Loans and borrowings
Short-term borrowings	¥ 4,639,674	¥ 1,230,756
Current portion of long-term borrowings	1,308,339	922,634
Sub-total	5,948,013	2,153,390
Long-term borrowings, excluding current portion	18,284,514	10,566,746
Total loans and borrowings	¥ 24,232,527	¥ 12,720,136

LOANS AND BORROWINGS - Aggregate maturities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Twelve months ending December 31,
2022	¥ 1,308,339
2023	2,117,151
2024	1,951,579
2025	2,231,414
2026	2,555,507
Thereafter	9,428,863
Long-term borrowings	¥ 19,592,853	¥ 11,489,380

- Definition

+ References + Details

PARENT ONLY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2021

PARENT ONLY FINANCIAL INFORMATION

PARENT ONLY FINANCIAL INFORMATION

28 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 and the consolidated VIEs. As of December 31, 2021, 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,
	2020	2021
Assets

Current assets
Cash	12,312,249	3,288,955
Restricted cash	—	1,944,589
Prepaid expenses	39,187	10,836
Other current assets	23,136	4,720
Total current assets	12,374,572	5,249,100
Investment, loans and amounts due from subsidiaries and consolidated VIEs	16,146,058	25,260,616
Other non-current assets	3,616	777
Total assets	28,524,246	30,510,493

Liabilities, Mezzanine Equity and Shareholders’ Equity

Current liabilities
Short-term borrowings	—	3,148,188
Accounts payable	12,451	899
Accrued expenses and other payables	29,790	32,395
Due to subsidiaries	868	849
Total current liabilities	43,109	3,182,331

Convertible bonds payable	1,928,466	1,895,846
Other long-term liabilities	5,769	—
Total liabilities	1,977,344	5,078,177

Mezzanine equity
Redeemable preferred shares (US$ 0.00005 par value; 150,000 shares authorized, issued and outstanding as of December 31, 2020 and 2021; Redemption value of RMB 980,910 and RMB 958,480 as of December 31, 2020 and 2021, respectively; Liquidation preference of RMB 2,576,578 and RMB 1,269,027 as of December 31, 2020 and 2021, respectively)	980,910	958,480
Total mezzanine equity	980,910	958,480

Shareholders' equity
Ordinary shares (US$ 0.00005 par value; 2,002,000,000 authorized; 1,427,590,059 Class A ordinary shares issued and outstanding as of December 31, 2020 and 2021; 67,590,336 Class B ordinary shares issued and outstanding as of December 31, 2020 and 2021)	507	507
Additional paid-in capital	28,728,717	28,983,330
Accumulated other comprehensive loss	(439,635)	(599,186)
Accumulated deficit	(2,723,597)	(3,910,815)
Total shareholders’ equity	25,565,992	24,473,836
Commitments and contingencies

Total liabilities, mezzanine equity and shareholders’ equity	28,524,246	30,510,493

Condensed Statements of Operations


	Years ended December 31,
	2019	2020	2021

Net revenue	—	—	—
Cost of revenue	(50,201)	(94,312)	(116,151)
Gross loss	(50,201)	(94,312)	(116,151)

Operating expenses
Selling and marketing expenses	(40,721)	(58,649)	(54,768)
General and administrative expenses	(153,854)	(224,934)	(285,077)
Research and development expenses	(2,364)	(4,596)	(8,096)
Loss from operations	(247,140)	(382,491)	(464,092)

Other income (expenses):
Interest income	48,020	18,641	25,215
Interest expenses	(128,539)	(155,605)	(95,313)
Equity in loss of subsidiaries and consolidated VIEs	(114,418)	(144,153)	(653,251)
Others, net	(6)	(2,799)	223
Loss before income taxes	(442,083)	(666,407)	(1,187,218)

Income tax expenses	—	—	—
Net loss	(442,083)	(666,407)	(1,187,218)

Condensed Statements of Comprehensive Loss


	Years ended December 31,
	2019	2020	2021

Net loss	(442,083)	(666,407)	(1,187,218)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of nil tax	86,570	(386,951)	(159,714)
Comprehensive loss	(355,513)	(1,053,358)	(1,346,932)

Condensed Statements of Cash Flows


	Years ended December 31,
	2019	2020	2021

Operating activities:
Net cash used in operating activities	(48,514)	(45,269)	(83,019)

Investing activities:
Investment, loans and advances to subsidiaries	(4,473,682)	(4,940,005)	(9,935,432)
Net cash used in investing activities	(4,473,682)	(4,940,005)	(9,935,432)

Financing activities:
Proceeds from short-term borrowings	—	—	3,187,850
Proceeds from long-term borrowings	268,100	—	—
Payment of issuance cost of borrowings	—	(10,619)	(40,645)
Payment of commitment cost of borrowings	—	(45,968)	—
Repayment of long-term borrowings	—	(657,820)	—
Proceeds from exercise of stock options	55,469	78,748	2,082
Net proceeds from issuance of ordinary shares	4,934,126	15,974,517	—
Net proceeds from issuance of redeemable preferred shares	989,349	—	—
Payment of redeemable preferred shares dividends	(25,014)	(65,489)	(49,221)
Net cash provided by financing activities	6,222,030	15,273,369	3,100,066
Effect of exchange rate changes on cash and restricted cash	70,291	(563,459)	(160,320)

Net increase (decrease) in cash and restricted cash	1,770,125	9,724,636	(7,078,705)
Cash and restricted cash at beginning of year	817,488	2,587,613	12,312,249
Cash and restricted cash at end of year	2,587,613	12,312,249	5,233,544

Supplemental disclosures of cash flow information
Interest paid	88,818	92,509	38,243

Supplemental disclosures of non-cash investing and financing activities
Settlement of liability-classified restricted share award	7,984	10,089	11,147
Conversion of convertible bonds	—	65	—

INCOME TAX (Details) ¥ in Thousands, $ in Millions		12 Months Ended
INCOME TAX (Details) ¥ in Thousands, $ in Millions	Jan. 01, 2018 HKD ($) item	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
INCOME TAX
Income tax expenses \| ¥		¥ 242,461	¥ 120,778	¥ 15,650
Effective tax rate (as a percent)		(25.60%)	(22.00%)	(3.70%)
Statutory income tax rate		25.00%	25.00%	25.00%
PRC
INCOME TAX
Statutory income tax rate		25.00%
Hong Kong SAR
INCOME TAX
Effective tax rate (as a percent)		16.50%
Statutory income tax rate	16.50%	16.50%
Amount of first assessable profits earned will be taxed at half the current tax rate \| $	$ 2
Tax rate for first HK$2 million of assessable profits earned	8.25%
Number of entities to be nominated and benefit from the progressive rates \| item	1
Singapore
INCOME TAX
Statutory income tax rate		17.00%
Malaysia
INCOME TAX
Statutory income tax rate		24.00%
High and New Technology Enterprise \| PRC
INCOME TAX
Statutory income tax rate		15.00%	15.00%	15.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee benefits (Details)	12 Months Ended
	Dec. 31, 2021
Minimum
Employee benefits
Employer contribution (as a percent)	28.00%
Maximum
Employee benefits
Employer contribution (as a percent)	49.00%

REDEEMABLE NON-CONTROLLING INTERESTS - Redeemable non-controlling interest (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
REDEEMABLE PREFERRED SHARES
Balance at beginning of the year	¥ 120,820
Capital injection from CPE Fund	208,801	¥ 105,000
Net loss attributable to redeemable non-controlling interests	(2,592)	(2,807)
Accretion to redemption value of redeemable non-controlling interests	77,644	18,627
Balance at end of the year	¥ 404,673	¥ 120,820

CASH AND RESTRICTED CASH

12 Months Ended

Dec. 31, 2021

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 of December 31,
	2020	2021

Cash	16,259,457	9,968,109
Restricted cash - current assets	86,829	2,014,304
Restricted cash - non-current assets	146,643	43,954

Total cash and restricted cash shown in the consolidated statements of cash flows	16,492,929	12,026,367

Restricted cash was primarily to secure the repayment of bank borrowings and related interests.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details)	12 Months Ended
	Dec. 31, 2021
Maximum \| Consulting services
Revenue recognition
Contract service period	1 year

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fulfilment costs (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Other non-current assets
Capitalized fulfilment cost	¥ 80,742	¥ 128,983

REVENUE (Tables)

12 Months Ended

Dec. 31, 2021

REVENUE

Schedule of Net revenue


	Years ended December 31,
	2019	2020	2021

Colocation services	3,261,745	4,710,923	6,514,268
Managed service and others	832,826	1,005,945	1,300,136
Service revenue	4,094,571	5,716,868	7,814,404
Equipment sales	27,834	22,104	4,277
Total	4,122,405	5,738,972	7,818,681

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

(a) Principles of consolidation

●

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.


	As of December 31,
	2020	2021
Assets
Current assets
Cash	1,310,269	1,338,525
Accounts receivable, net of allowance for doubtful accounts	1,388,128	1,677,171
VAT recoverable	85,760	138,304
Prepaid expenses	76,505	90,848
Other current assets	13,259	99,231
Total current assets	2,873,921	3,344,079

Property and equipment, net	2,760,618	2,671,567
Intangible assets, net	194,230	175,004
Operating lease right-of-use assets	430,525	204,825
Deferred tax assets	43,126	32,949
Restricted cash	49,905	—
VAT recoverable	113,684	111,982
Other non-current assets	115,315	153,696
Total assets	6,581,324	6,694,102

Liabilities
Current liabilities
Short-term borrowings and current portion of long-term borrowings	628,721	426,000
Accounts payable	194,325	430,518
Accrued expenses and other payables	152,534	223,563
Deferred revenue	90,192	87,364
Operating lease liabilities, current	50,888	40,371
Finance lease and other financing obligations, current	31,629	28,161
Total current third-party liabilities	1,148,289	1,235,977

Long-term borrowings, excluding current portion	1,213,020	899,769
Operating lease liabilities, non-current	361,502	172,458
Finance lease and other financing obligations, non-current	982,209	965,356
Deferred tax liabilities	91,036	76,460
Other long-term liabilities	34,281	66,379
Total third-party liabilities	3,830,337	3,416,399
Amounts due to GDS Holdings and its non-VIE subsidiaries, net	2,531,025	2,947,857
Total liabilities	6,361,362	6,364,256


	Years ended December 31,
	2019	2020	2021

Net revenue	4,013,561	5,453,802	7,516,345
Net income	99,857	129,254	112,257
Net cash provided by operating activities	414,424	899,132	744,493
Net cash used in investing activities	(201,995)	(278,744)	(205,041)
Net cash used in financing activities	(43,547)	(20,682)	(561,101)

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.

Fulfilment costs

(g) Fulfilment costs

Equity method investments

(h) Equity method investments

Property and equipment

(i) Property and equipment

The estimated useful lives of self-owned property and equipment are presented below.


Buildings		30 years
Data center equipment
– Machinery		10 - 20 years
– Other equipment		3 - 5 years
Furniture and office equipment		3 - 5 years
Vehicles		5 years

Leases

(j) Leases

The Company determines if an arrangement is or contains a lease at its inception.

Asset retirement costs

(k) 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, 2019		35,879
Additions		13,572
Accretion expense		2,990
Asset retirement obligations as of December 31, 2019		52,441
Additions		20,384
Accretion expense		4,084
Asset retirement obligations as of December 31, 2020		76,909
Additions		22,745
Accretion expense		6,227
Settlement		(998)
Asset retirement obligations as of December 31, 2021		104,883

Intangible assets

(l) Intangible assets

Intangible assets acquired in the acquisitions comprised of customer contracts and licenses.

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


Customer contracts		5-15 years
Licenses		20 years

Licenses are amortized using a straight-line method over the terms of those licenses.

Prepaid land use rights

(m) Prepaid land use rights

Business combinations and goodwill

(n) Business combinations and goodwill

The Company accounts for our business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations.

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

(o) Impairment of long-lived assets

Value-added-tax ("VAT")

(p) Value-added-tax (“VAT”)

Derivative financial instruments

(q) Derivative financial instruments

For further information on derivative financial instruments, see Note 16 below.

Commitment and contingencies

(r) Commitment and contingencies

Revenue recognition

(s) Revenue recognition

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.

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

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.

Cost of revenues

(t) Cost of revenues

Research and development and advertising costs

(u) Research and development and advertising costs

Advertising costs amounted to RMB7,454, RMB14,778 and RMB15,043 in 2019, 2020 and 2021, respectively.

Government grants

(v) Government grants

As of December 31, 2020 and 2021, deferred government grants of RMB6,196 and RMB22,245 are recorded in other long-term liabilities, respectively.

Capitalized interest

(w) Capitalized interest

A reconciliation of total interest costs to ‘‘Interest expenses’’ as reported in the consolidated statements of operations for the years ended December 31, 2019, 2020 and 2021 is as follows:


	Years ended December 31,
	2019	2020	2021

Total interest costs	1,040,898	1,402,015	1,805,434
Less: interest costs capitalized	(72,205)	(85,509)	(150,697)

Interest expenses	968,693	1,316,506	1,654,737

Debt issuance costs and commitment costs

(x) Debt issuance costs and commitment costs

Income tax

(y) Income tax

Share-based compensation

(z) Share-based compensation

The Company accounts for forfeitures when they occur. Compensation cost previously recognized are reversed in the period the award is forfeited before completion of the requisite service period.

For further information on share-based compensation, see Note 19 below.

Employee benefits

(aa) Employee benefits

Foreign currency translation and foreign currency risks

(bb) Foreign currency translation and foreign currency risks


	RMB	USD	HKD	JPY	EUR	SGD	MYR
In PRC	5,788,295	205,328	—	—	—	—	—
In Hong Kong SAR	21,458	160,565	106,301	45,234	146	—	—
In US	—	80,009	—	—	—	—	—
In Singapore	—	505,299	—	—	—	12,552	—
In Malaysia	—	365	—	—	—	—	12
Total in original currency	5,809,753	951,566	106,301	45,234	146	12,552	12
RMB equivalent	5,809,753	6,066,900	86,912	2,507	1,057	59,220	18

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

Recently issued accounting standards

(ff)Recently issued accounting standards

REDEEMABLE PREFERRED SHARES

12 Months Ended

Dec. 31, 2021

REDEEMABLE PREFERRED SHARES

REDEEMABLE PREFERRED SHARES

14 REDEEMABLE PREFERRED SHARES

On March 27, 2019 (the “Issue Date”), GDS Holdings completed its issuance of 150,000 Convertible Preferred Shares (“redeemable preferred shares”) to an investor at the subscription price of US$1 thousand per share with total consideration of US$150 million.

The movement of redeemable preferred shares is set out as below:


		Redeemable
		preferred shares
Balance at January 1, 2019		—
Issuance of redeemable preferred shares		989,349
Change in redemption value of redeemable preferred shares		17,760
Accrual of redeemable preferred shares dividends		40,344
Settlement of redeemable preferred shares dividends		(25,014)
Foreign exchange impact		39,542

Balance at December 31, 2019		1,061,981
Accrual of redeemable preferred shares dividends		52,709
Settlement of redeemable preferred shares dividends		(65,489)
Foreign exchange impact		(68,291)

Balance at December 31, 2020		980,910
Accrual of redeemable preferred shares dividends		49,073
Settlement of redeemable preferred shares dividends		(49,221)
Foreign exchange impact		(22,282)
Balance at December 31, 2021		958,480

Key terms of the convertible preferred shares

Dividends

The holders of the preferred shares are entitled to receive, in priority to the holders of the ordinary shares, cumulative preferred share dividends which are payable quarterly in arrears on March 15, June 15, September 15 and December 15, commencing on June 15, 2019 (each such payment date being a “Regular Dividend Payment Date”). The dividends are 5.0% per annum of the respective preferred shares Stated Value (i.e. the subscription price of preferred shares plus any accrued dividends that are not paid on Regular Dividend Payment Date) (and shall be adjusted to an amount equal to the ordinary share dividend rate if higher). The dividend rate will increase to 7.0% per annum and further increase by 50 basis points each quarter thereafter if the Company has not redeemed all of the preferred shares outstanding as of the eighth anniversary of the Issue Date. The dividends are computed on a basis of a 360-day year and the actual number of days elapsed. Dividends may, at the option of the Company, be paid in cash only, be paid in cash or in additional preferred shares, or a combination thereof.

Conversion

The holders of preferred shares have the right to convert any or all of their holdings of preferred shares Stated Value into Class A Ordinary Shares based on the conversion rate then in effect.

In addition, if, at any time beginning on March 15, 2022, (i) the volume-weighted average price (“VWAP”) per ADS of the GDS Holdings equals or exceeds US$53.40 (adjusted as according to anti-dilution provisions) for at least 20 trading days in any period of 30 consecutive trading days and (ii) the average daily trading volume of the ADS for such 20 qualifying trading days is at least US$10 million in the aggregate, at the Company’s election, all of the preferred shares then outstanding shall be converted into a number of Class A Ordinary Shares based on the conversion rate then in effect.

The initial conversion rate is corresponding to a conversion price of US$35.60 per ADS, and will be subject to adjustments for any split, subdivision, combination, consolidation, recapitalization or similar event.

Liquidation preference

Upon a liquidation, after satisfaction of all liabilities and obligations to creditors of the Company and before any distribution or payment shall be made to holders of ordinary shares, each holder of preferred shares shall be entitled to receive an amount per preferred share equal to the greater of: (1) the Stated Value of preferred shares plus any dividends accumulated but unpaid thereon after the immediately preceding Regular Dividend Payment Date to but excluding the date of liquidation; (2) the payment such holders would have received had such holders, immediately prior to such liquidation converted their preferred shares into Class A Ordinary Shares.

Optional Redemption by the Company

The preferred shares may be redeemed, in whole or in part, at any time after March 15, 2027, at the option of the Company at a redemption price per share equal to the sum of the Stated Value per preferred share to be redeemed plus an amount per share equal to accrued but unpaid dividends on such preferred shares after the immediately preceding Regular Dividend Payment Date to but excluding the date of redemption.

Repurchase at the Option of the Holder Upon a Fundamental Change

Upon the occurrence of a Fundamental Change, as defined in the share subscription agreement, each holder of preferred shares shall have the right to require the Company to repurchase all or any portion of such holder’s preferred shares at a purchase price per preferred share equal to the greater of

(i)

the sum of (x) 100% multiplied by the Stated Value per preferred share plus (y) an amount equal to accrued but unpaid dividends on such preferred share after the immediately preceding Regular Dividend Payment Date to but excluding the date of repurchase, plus (z) solely in the event that such Fundamental Change occurs prior to the third anniversary of the Issue Date, the present value of all undeclared dividends from the date of redemption to, and including, the third anniversary of the Issue Date, in each case, discounted to the date of redemption on the basis of actual days elapsed (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, which is the yield to maturity at the time of computation of United States Treasury securities with a constant maturity, plus 50 basis points, and

(ii)

the amount of cash and/or other assets such holder would have received had such holder, immediately prior to the occurrence of such Fundamental Change, converted such preferred shares into Class A Ordinary Shares.

Financing for Redemption of Convertible Preferred Shares

In the event that any preferred shares remain outstanding from and after the tenth anniversary of the Issue Date, the holders of preferred shares constituting at least 90% of the preferred shares issued as of the Issue Date (as adjusted for any split, subdivision, combination, consolidation, recapitalization or similar event with respect to the preferred shares) shall have the right to require the Company to sell all or a portion of its business and/or to conduct other fundraising or refinancing activities, and use reasonable best efforts to consummate such sale or to issue equity or debt securities (or obtain other debt financing) in an amount sufficient to redeem in full in cash, and use best endeavors to as soon as reasonably practicable redeem in full in cash, all of the preferred shares then outstanding at a redemption price per share equal to the sum of the Stated Value per preferred share to be redeemed plus an amount per share equal to accrued but unpaid dividends on such preferred shares after the immediately preceding Regular Dividend Payment Date to but excluding the date of redemption.

Voting rights

The holders of the preferred shares have voting rights equivalent to the ordinary shareholders on an “if converted” basis. In addition, the Company shall not take certain actions without first obtaining the written consent or affirmative vote at a meeting called for that purpose by holders of at least 75% of the then outstanding preferred shares.

The Company has classified these preferred shares as mezzanine equity in the consolidated balance sheets since they are contingently redeemable upon a Fundamental Change or include liquidation preference provisions that are not solely within the Company’s control. The Company evaluated the embedded conversion, call and put options in the preferred shares to determine if they require bifurcation and are accounted for as derivatives, and concluded that there were no embedded derivatives to be bifurcated from the preferred share pursuant to ASC 815. The Company also determined that there was no BCF attributable to the preferred shares because the initial conversion price was higher than the fair value of the Company’s ordinary shares.

The Company incurred issuance cost of US$2,646 thousand for the issuance of such preferred shares, which was treated as an adjustment to the initial value of the redeemable preferred shares. The Company has elected to measure the redeemable preferred shares by recognizing changes in the redemption value immediately as they occur and adjust the carrying amount to equal the redemption value at the end of each reporting period. As a result, such issuance cost is immediately recognized as a change in redemption value and charged against retained earnings or, in the absence of retained earnings, by charges against additional paid-in capital.

INCOME TAX - Deferred tax assets and liabilities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Allowance for accounts receivable	¥ 2,858	¥ 1,959
Government subsidy	5,561	1,549
Accrued expenses	47,068	24,597
Asset retirement obligation	24,167	19,227
Operating lease liabilities	467,734	411,289
Finance lease and other financing obligations	1,636,506	1,577,663
Net operating losses carry forwards	713,135	386,999
Other non-current assets	41,853
Other non-current liabilities	26,621
Total gross deferred tax assets	2,965,503	2,423,283
Valuation allowance on deferred tax assets	(775,528)	(328,821)	¥ (205,976)	¥ (155,852)
Deferred tax assets, net of valuation allowance	2,189,975	2,094,462
Deferred tax liabilities:
Property and equipment	(1,687,122)	(1,663,342)
Intangible assets	(319,037)	(195,093)
Prepaid land use rights	(1,532)	(1,572)
Operating lease right-of-use assets	(711,444)	(550,374)
Other current assets	(18,622)
Total deferred tax liabilities	(2,737,757)	(2,410,381)
Net deferred tax liabilities	(547,782)	(315,919)
Analysis as:
Deferred tax assets	186,496	146,088
Deferred tax liabilities	(734,278)	(462,007)
Net deferred tax liabilities	¥ (547,782)	¥ (315,919)

SHARE-BASED COMPENSATION - Expenses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SHARE-BASED COMPENSATION
Compensation expense	¥ 391,275	¥ 333,686	¥ 189,756
Costs of revenue
SHARE-BASED COMPENSATION
Compensation expense	110,291	89,943	46,007
Selling and marketing expenses
SHARE-BASED COMPENSATION
Compensation expense	53,560	54,204	39,436
General and administrative expenses
SHARE-BASED COMPENSATION
Compensation expense	219,328	184,943	101,949
Research and development expenses
SHARE-BASED COMPENSATION
Compensation expense	¥ 8,096	¥ 4,596	¥ 2,364

MAJOR CUSTOMERS AND SUPPLIERS (Details) ¥ in Thousands	12 Months Ended
MAJOR CUSTOMERS AND SUPPLIERS (Details) ¥ in Thousands	Dec. 31, 2021 CNY (¥) item customer	Dec. 31, 2020 CNY (¥) item customer	Dec. 31, 2019 CNY (¥) item customer
Revenue
Revenue	¥ 7,818,681	¥ 5,738,972	¥ 4,122,405
Number of Suppliers \| item	1	2	2
Revenues \| Customer concentration
Revenue
Number of contracting customers generated over 10% of the Company's total revenues \| customer	4	3	3
Revenues \| Customer concentration \| Customer A
Revenue
Revenue	¥ 1,736,295	¥ 1,347,165	¥ 1,010,794
Revenues \| Customer concentration \| Customer B
Revenue
Revenue	964,414	847,620	712,780
Revenues \| Customer concentration \| Customer C
Revenue
Revenue	873,378	¥ 674,621	¥ 535,990
Revenues \| Customer concentration \| Customer D
Revenue
Revenue	¥ 785,528

CONVERTIBLE BONDS PAYABLE

12 Months Ended

Dec. 31, 2021

CONVERTIBLE BONDS PAYABLE

CONVERTIBLE BONDS PAYABLE

10 CONVERTIBLE BONDS PAYABLE

Convertible Notes 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 million. The related issuance costs of US$8,948 thousand 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. In the year ended December 31, 2021, interest expenses of RMB50,337 was recorded for the Convertible Bonds, including RMB38,720 for the contractual interest and RMB11,617 for the amortization of the issuance costs. As of December 31, 2020 and 2021, accrued interests of RMB3,262 and RMB3,187, respectively, 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 a 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 beneficial conversion feature (“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.

In the year ended December 31, 2020, Convertible Bonds with principal amount of US$10 thousand were converted into ordinary shares as the holders exercised their conversion option. The Company recorded additional paid-in capital of RMB65 upon conversion. As of December 31, 2020 and 2021, the outstanding principal amount of Convertible Bonds due 2025 was US$299,990 thousand.

The effective interest rate of the convertible bonds, after considering the related issuance cost, was 2.65%as of December 31, 2020 and 2021, respectively.

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2021

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

5 PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:


	As of December 31,
	2020	2021
At cost:
Land	808,651	1,552,704
Buildings	9,552,953	12,178,017
Data center equipment	10,694,057	17,710,351
Leasehold improvement	7,307,207	8,230,992
Furniture and office equipment	97,039	137,691
Vehicles	4,383	4,606
	28,464,290	39,814,361
Less: Accumulated depreciation	(4,127,504)	(6,425,293)
	24,336,786	33,389,068
Construction in progress	5,259,275	7,234,435
Property and equipment, net	29,596,061	40,623,503

(1)

The carrying amounts of the Company’s property and equipment acquired under finance leases and other financing arrangement were RMB8,207,825 and RMB8,867,222 as of December 31, 2020 and 2021, respectively.

(2)

Depreciation of property and equipment (including assets acquired under finance leases and other financing arrangement) was RMB1,057,171, RMB1,543,130 and RMB2,399,451 for the years ended December 31, 2019, 2020 and 2021, respectively, and included in the following captions:


	Years ended December 31,
	2019	2020	2021

Cost of revenue	1,045,446	1,418,846	2,264,620
General and administrative expenses	10,448	120,604	129,128
Research and development expenses	1,277	3,680	5,703
	1,057,171	1,543,130	2,399,451

(3)

Property and equipment with net a book value of RMB3,497,447 and RMB4,479,259 was pledged as security for bank loans (Note 9) and other financing obligations (Note 12) as of December 31, 2020 and 2021, respectively.

(4)

As of December 31, 2020 and 2021, payables for purchase of property and equipment that are contractually due beyond one year of RMB139,162 and nil, respectively, are recorded in other long-term liabilities (Note 13) in the consolidated balance sheets.

CONTRACT BALANCES

12 Months Ended

Dec. 31, 2021

CONTRACT BALANCES

CONTRACT BALANCES

4 CONTRACT BALANCES

Accounts Receivable, Net

Accounts receivable, net consisted of the following:


	As of December 31,
	2020	2021

Accounts receivable	1,482,498	1,744,810
Less: allowance for doubtful accounts	(2,163)	(12,124)
Accounts receivable, net	1,480,335	1,732,686

Accounts receivable of RMB819,578 and RMB1,040,521 was pledged as security for bank loans (Note 9) as of December 31, 2020 and 2021, respectively. Accounts receivable of RMB128,353 and RMB110,391 was pledged as security for finance lease and other financing obligations (Note 12) as of December 31, 2020 and 2021, respectively.

The following table presents the movement of the allowance for doubtful accounts:


	Years ended December 31,
	2019	2020	2021

Balance at the beginning of the year	241	133	2,163
Allowance made during the year	274	2,032	10,070
Write-off during the year	(382)	—	—
Foreign exchange impact	—	(2)	(109)
Balance at the end of the year	133	2,163	12,124

During the years ended December 31, 2019, 2020 and 2021, the Company made an allowance on accounts receivable of RMB274, RMB2,032 and RMB10,070, respectively.

Deferred Revenue

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


		Deferred revenue

Beginning balance as of January 1, 2021		111,539
Increase		24,361

Closing balance as of December 31, 2021		135,900

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. As of December 31, 2020 and 2021, the deferred revenue expected to be recognized as revenue after one year amounted to RMB14,871 and RMB44,908, respectively, were recorded in other long-term liabilities in the consolidated balance sheet. The amounts of revenue recognized during the years ended December 31, 2019, 2020 and 2021 from the opening deferred revenue balance was RMB66,500, RMB96,084 and RMB104,640, respectively.

Remaining performance obligations

The Company enters into certain usage-based contracts for colocation and managed services in which revenues are based on the agreed usage-based fees as the actual services are rendered throughout the contract term. The Company elected to apply the practical expedient under ASC606-10-50-14(b) that allows the Company not to disclose the remaining performance obligations for variable considerations, which are charged based on the agreed unit price and number of racks in usage, in connection with these contracts with remaining durations ranging from 1 year to 15 years.

As of December 31, 2021, the revenues, excluding any variable considerations, expected to be recognized in future periods related to remaining performance obligations that are unsatisfied were as follows:


Revenue expected to be recognized		RMB

Within 1 year		1,084,635
After 1 year but within 2 years		1,208,157
After 2 years but within 3 years		1,251,249
After 3 years but within 4 years		1,197,587
After 4 years but within 5 years		1,040,895
After 5 years		2,403,630

Total		8,186,153

ACQUISITIONS AND GOODWILL - Allocation of purchase price (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Business Combinations, Allocation of Purchase Price
Fair value of consideration	¥ 5,230,362	¥ 1,660,685	¥ 423,075
Effective settlement of pre-existing relationships upon consolidation	20,000	(31,229)
Other net assets acquired	(256,650)	(547,815)	(255,245)
Identifiable intangible assets	(689,800)	(449,600)	(15,000)
Deferred tax liabilities	159,592	75,120	1,040
Total identifiable net assets	(786,858)	(922,295)	(269,205)
Goodwill	7,076,505	2,596,393	1,905,840
Property and equipment	(2,974,715)	(2,783,257)	(493,026)
Accounts payable	412,380	1,133,760	118,486
Adjustments to assets acquired and liabilities assumed	16,608	(55,462)
Accounts receivable	(224,307)
Short-term borrowings	461,494
Long-term borrowings	840,000
Finance lease and other financing obligations, current and non-current	1,463,851	1,362,103	174,194
Net revenue	7,818,681	5,738,972	4,122,405
Net (loss) income	(1,191,213)	(669,214)	(442,083)
Asset acquisitions
Non-controlling interests recognized upon these asset acquisitions	56,519
Customer contracts
Business Combinations, Allocation of Purchase Price
Identifiable intangible assets	¥ (689,800)	¥ (449,600)	¥ (15,000)
Estimated useful life (in years)			7 years 9 months 18 days
Customer contracts \| Maximum
Business Combinations, Allocation of Purchase Price
Estimated useful life (in years)	7 years	12 years 1 month 6 days
Customer contracts \| Minimum
Business Combinations, Allocation of Purchase Price
Estimated useful life (in years)	5 years 8 months 12 days	6 years 6 months
Various Business Combinations
Business Combinations, Allocation of Purchase Price
Goodwill	¥ 4,463,504	¥ 707,161	¥ 153,870

PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive Loss (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Condensed Statements of Comprehensive Loss
Net income	¥ (1,191,213)	¥ (669,214)	¥ (442,083)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of nil tax	(159,714)	(386,951)	86,570
Comprehensive loss	(1,350,927)	(1,056,165)	(355,513)
Parent Company \| Reportable Legal Entities
Condensed Statements of Comprehensive Loss
Net income	(1,187,218)	(666,407)	(442,083)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of nil tax	(159,714)	(386,951)	86,570
Comprehensive loss	¥ (1,346,932)	¥ (1,053,358)	¥ (355,513)

- Definition

+ References + Details

- Definition

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

+ References

+ Details

LOANS AND BORROWINGS - Type of short-term borrowings (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Short-term borrowings by type
Unsecured short-term loans and borrowings	¥ 512,387	¥ 221,436
Secured short-term loans and borrowings	4,127,287	1,009,320
Short-term borrowings	¥ 4,639,674	¥ 1,230,756

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - CNY (¥) ¥ in Thousands	Ordinary Shares	Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Accumulated deficit	Total GDS Holdings Limited shareholders' equity	Non- controlling interests	Total
Balance at Dec. 31, 2018	¥ 341	¥ 7,275,945	¥ (139,254)	¥ (1,615,107)	¥ 5,521,925		¥ 5,521,925
Balance (in shares) at Dec. 31, 2018	1,007,069,643
Changes in shareholders' equity
Loss for the year				(442,083)	(442,083)		(442,083)
Other comprehensive loss			86,570		86,570		86,570
Total comprehensive loss			86,570	(442,083)	(355,513)		(355,513)
Issuance of ordinary shares	¥ 55	4,934,071			4,934,126		4,934,126
Issuance of shares (in shares)	160,400,184
Shares surrendered (in shares)	(8)
Shares issued to depository bank	¥ 16	(16)
Shares issued to depository bank (in shares)	48,962,896
Redeemable preferred shares dividends		(40,344)			(40,344)		(40,344)
Change in redemption value of redeemable preferred shares		(17,760)			(17,760)		(17,760)
Share-based compensation		189,756			189,756		189,756
Exercise of share options		53,407			53,407		¥ 53,407
Exercise of share options (in shares)	10,150,336						10,150,336
Vesting of restricted shares (in shares)	8,885,120
Settlement of liability-classified restricted share award		7,984			7,984		¥ 7,984
Settlement of liability-classified restricted shares award (in shares)	237,312
Settlement of share options and restricted share awards with shares held by depository bank (in shares)	(19,272,768)
Balance at Dec. 31, 2019	¥ 412	12,403,043	(52,684)	(2,057,190)	10,293,581		10,293,581
Balance (in shares) at Dec. 31, 2019	1,216,432,715
Changes in shareholders' equity
Loss for the year				(666,407)	(666,407)		(666,407)
Other comprehensive loss			(386,951)		(386,951)		(386,951)
Total comprehensive loss			(386,951)	(666,407)	(1,053,358)		(1,053,358)
Issuance of ordinary shares	¥ 84	15,974,433			15,974,517		15,974,517
Issuance of shares (in shares)	246,153,848
Accretion to redemption value of redeemable non-controlling interests		(18,627)			(18,627)		(18,627)
Shares issued to depository bank	¥ 11	(11)
Shares issued to depository bank (in shares)	32,592,288
Conversion of convertible bonds		65			65		65
Conversion of convertible bonds (in shares)	1,544
Redeemable preferred shares dividends		(52,709)			(52,709)		(52,709)
Share-based compensation		(333,686)			(333,686)		(333,686)
Exercise of share options		78,748			78,748		¥ 78,748
Exercise of share options (in shares)	14,222,096						14,222,096
Vesting of restricted shares (in shares)	12,494,104
Settlement of liability-classified restricted share award		10,089			10,089		¥ 10,089
Settlement of liability-classified restricted shares award (in shares)	190,536
Settlement of share options and restricted share awards with shares held by depository bank (in shares)	(26,906,736)
Balance at Dec. 31, 2020	¥ 507	28,728,717	(439,635)	(2,723,597)	25,565,992		25,565,992
Balance (in shares) at Dec. 31, 2020	1,495,180,395
Changes in shareholders' equity
Loss for the year				(1,187,218)	(1,187,218)	¥ (1,403)	(1,187,218)
Loss for the year							(1,188,621)
Other comprehensive loss			(159,551)		(159,551)	(163)	(159,714)
Total comprehensive loss			(159,551)	(1,187,218)	(1,346,769)	(1,566)	(1,346,769)
Total comprehensive loss							(1,348,335)
Accretion to redemption value of redeemable non-controlling interests		(77,644)			(77,644)		(77,644)
Redeemable preferred shares dividends		(49,073)			(49,073)		(49,073)
Acquisition of subsidiaries						56,519	56,519
Capital contribution from non-controlling interests						17,147	17,147
Acquisition of non-controlling interests		(25,267)			(25,267)	(39,846)	(65,113)
Sales of equity interests of a subsidiary		2,093			2,093	26,919	29,012
Share-based compensation		391,275			391,275		391,275
Exercise of share options		2,082			2,082		¥ 2,082
Exercise of share options (in shares)	407,000						407,000
Vesting of restricted shares (in shares)	12,453,824
Settlement of liability-classified restricted share award		11,147			11,147		¥ 11,147
Settlement of liability-classified restricted shares award (in shares)	178,280
Settlement of share options and restricted share awards with shares held by depository bank (in shares)	(13,039,104)
Balance at Dec. 31, 2021	¥ 507	¥ 28,983,330	¥ (599,186)	¥ (3,910,815)	¥ 24,473,836	¥ 59,173	¥ 24,533,009
Balance (in shares) at Dec. 31, 2021	1,495,180,395

RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
RESTRICTED NET ASSETS
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	¥ 20,939,896	¥ 13,109,939
Amount of non-distributable general reserve fund	¥ 66,098	¥ 55,333

OTHER LONG-TERM LIABILITIES

12 Months Ended

Dec. 31, 2021

OTHER LONG-TERM LIABILITIES

OTHER LONG-TERM LIABILITIES

13 OTHER LONG-TERM LIABILITIES

Other long-term liabilities consisted of the following:


	As of December 31,
	2020	2021

Consideration payable for acquisitions	97,457	261,000
Asset retirement obligations	76,909	96,862
Deferred revenue – non-current (Note 4)	14,871	44,908
Deferred government grants	6,196	22,245
Payables for purchase of property and equipment	139,162	—
Others	14,662	114,285
Total	349,257	539,300

REDEEMABLE NON-CONTROLLING INTERESTS (Tables)

12 Months Ended

Dec. 31, 2021

REDEEMABLE PREFERRED SHARES

Schedule of change in the carrying amount of redeemable non-controlling interests


	Year ended December 31,
	2020	2021
Balance at beginning of the year	—	120,820
Capital injection from CPE Fund	105,000	208,801
Net loss attributable to redeemable non-controlling interests	(2,807)	(2,592)
Accretion to redemption value of redeemable non-controlling interests	18,627	77,644
Balance at end of the year	120,820	404,673

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial statement balances and amounts of the VIEs and their subsidiaries (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash	¥ 9,968,109	¥ 16,259,457
Accounts receivable, net of allowance for doubtful accounts	1,732,686	1,480,335
VAT recoverable	229,090	155,620
Prepaid expenses	202,744	163,986
Other current assets	316,942	172,579
Total current assets	14,463,875	18,318,806
Property and equipment, net	40,623,503	29,596,061
Intangible assets, net	1,282,636	785,322
Operating lease right-of-use assets	4,030,205	3,059,700
Deferred tax assets	186,496	146,088
Restricted cash	43,954	146,643
VAT recoverable	2,218,944	1,445,521
Other non-current assets	1,071,372	486,071
Total assets	71,632,443	57,258,795
Current liabilities
Short-term borrowings and current portion of long-term borrowings	5,948,013	2,153,390
Accounts payable	3,901,799	3,657,112
Accrued expenses and other payables	2,679,555	1,395,981
Deferred revenue	90,992	96,668
Operating lease liabilities, current	145,739	86,258
Finance lease and other financing obligations, current	699,145	254,412
Total current liabilities	13,465,243	7,643,821
Long-term borrowings, excluding current portion	18,284,514	10,566,746
Operating lease liabilities, non-current	1,883,560	1,542,895
Finance lease and other financing obligations, non-current	8,933,540	8,097,881
Deferred tax liabilities	734,278	462,007
Other long-term liabilities	539,300	349,257
Amounts due to GDS Holdings and its non-VIE subsidiaries, net	24,144	15,360
Total liabilities	45,736,281	30,591,073
Net revenue, net income, operating, investing and financing cash flows
Net revenue	7,818,681	5,738,972	¥ 4,122,405
Net income	(1,191,213)	(669,214)	(442,083)
Net cash provided by operating activities	1,201,363	320,887	293,436
Net cash used in investing activities	(13,691,538)	(9,378,007)	(5,131,231)
Net cash used in financing activities	8,119,155	20,143,661	8,361,939
VIEs
Current assets
Cash	1,338,525	1,310,269
Accounts receivable, net of allowance for doubtful accounts	1,677,171	1,388,128
VAT recoverable	138,304	85,760
Prepaid expenses	90,848	76,505
Other current assets	99,231	13,259
Total current assets	3,344,079	2,873,921
Property and equipment, net	2,671,567	2,760,618
Intangible assets, net	175,004	194,230
Operating lease right-of-use assets	204,825	430,525
Deferred tax assets	32,949	43,126
Restricted cash		49,905
VAT recoverable	111,982	113,684
Other non-current assets	153,696	115,315
Total assets	6,694,102	6,581,324
Current liabilities
Amounts due to GDS Holdings and its non-VIE subsidiaries, net	2,947,857	2,531,025
Total liabilities	6,364,256	6,361,362
Net revenue, net income, operating, investing and financing cash flows
Net revenue	7,516,345	5,453,802	4,013,561
Net income	112,257	129,254	99,857
Net cash provided by operating activities	744,493	899,132	414,424
Net cash used in investing activities	(205,041)	(278,744)	(201,995)
Net cash used in financing activities	(561,101)	(20,682)	¥ (43,547)
VIEs \| Restricted cash
Current liabilities
Assets pledged	0	49,905
VIEs \| Accounts receivable
Current liabilities
Assets pledged	70,945	66,969
VIEs \| Other non-current assets
Current liabilities
Assets pledged	14,691	0
VIEs \| Property and equipment, net
Current liabilities
Assets pledged	46,007	102,248
VIEs \| Third party
Current liabilities
Short-term borrowings and current portion of long-term borrowings	426,000	628,721
Accounts payable	430,518	194,325
Accrued expenses and other payables	223,563	152,534
Deferred revenue	87,364	90,192
Operating lease liabilities, current	40,371	50,888
Finance lease and other financing obligations, current	28,161	31,629
Total current third-party liabilities	1,235,977	1,148,289
Long-term borrowings, excluding current portion	899,769	1,213,020
Operating lease liabilities, non-current	172,458	361,502
Finance lease and other financing obligations, non-current	965,356	982,209
Deferred tax liabilities	76,460	91,036
Other long-term liabilities	66,379	34,281
Total third-party liabilities	¥ 3,416,399	¥ 3,830,337

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2021

RELATED PARTY TRANSACTIONS

Schedule of material related party relationship


Name of party		Relationship

STT GDC		Principal ordinary shareholder of the Company
STT Singapore DC Pte. Ltd.		Subsidiary of STT GDC
STT DEFU 2 Pte. Ltd.		Subsidiary of STT GDC

Schedule of major transactions with related parties


		Years ended December 31,
		2019	2020	2021

Commission income	(Note)
STT Singapore DC Pte. Ltd.		624	553	546
STT DEFU 2 Pte. Ltd.		332	485	464
		956	1,038	1,010

Schedule of major balances with related parties


		As of December 31,
		2020	2021

Amount due to related parties:	(Note)
STT Singapore DC Pte. Ltd.		7,938	13,905
STT DEFU 2 Pte. Ltd.		7,422	10,239
		15,360	24,144

These amounts due to related parties are trade in nature and are settled on a recurring basis.

LOANS AND BORROWINGS

12 Months Ended

Dec. 31, 2021

LOANS AND BORROWINGS

LOANS AND BORROWINGS

9 LOANS AND BORROWINGS

The Company’s borrowings consisted of the following:


	As of December 31,
	2020	2021

Short-term borrowings	1,230,756	4,639,674
Current portion of long-term borrowings	922,634	1,308,339
Sub-total	2,153,390	5,948,013
Long-term borrowings, excluding current portion	10,566,746	18,284,514
Total loans and borrowings	12,720,136	24,232,527

Short-term borrowings

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


	As of December 31,
	2020	2021

Unsecured short-term loans and borrowings	221,436	512,387
Secured short-term loans and borrowings	1,009,320	4,127,287
	1,230,756	4,639,674

Short-term borrowings were secured by the following assets:


	As of December 31,
	2020	2021

Accounts receivable	76,547	65,985
Property and equipment, net	—	397,285
Operating lease ROU assets	—	81,397

	76,547	544,667

As of December 31, 2020 and 2021, short-term borrowings of the consolidated VIEs of RMB89,400 and RMB18,460, respectively, were guaranteed by GDS Holdings Limited and its subsidiaries.

The weighted average interest rates of short-term borrowings outstanding as of December 31, 2020 and 2021 were 4.67% and 4.91% per annum, respectively.

Long-term borrowings

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


	As of December 31,
	2020	2021

Unsecured long-term loans and borrowings	112,500	60,000
Secured long-term loans and borrowings	11,376,880	19,532,853
	11,489,380	19,592,853

Long-term borrowings were secured by the following assets:


	As of December 31,
	2020	2021

Accounts receivable	743,031	974,536
Property and equipment, net	2,918,670	2,629,904
Prepaid land use rights, net	678,190	634,953
Operating lease ROU assets	599,120	1,537,304
Other non-current assets	—	14,691
	4,939,011	5,791,388

As of December 31, 2020 and 2021, long-term borrowings of the consolidated VIEs of RMB1,348,355 and RMB1,060,250, respectively, were guaranteed by GDS Holdings Limited and its subsidiaries.

In addition to the above assets pledged for secured borrowings, some of the borrowings were guaranteed by the equity interests of the subsidiaries of GDS Holdings Limited.

The weighted average interest rates of long-term borrowings as of December 31, 2020 and 2021 were 6.73% and 5.53% per annum, respectively, taking into the consideration of debt issuance costs incurred relating to the facilities.

The outstanding long-term borrowings mature serially from 2022 to 2036. The aggregate maturities of the above long-term borrowings for each for the five years and thereafter subsequent to December 31, 2021 are as follows:



		Long-term borrowings
Twelve months ending December 31,
2022		1,308,339
2023		2,117,151
2024		1,951,579
2025		2,231,414
2026		2,555,507
Thereafter		9,428,863
		19,592,853

The Company entered into secured loan agreements with various financial institutions for project development and working capital purpose with terms ranging from 1 to 15 years.

As of December 31, 2021, the Company had total working capital and project financing credit facilities of RMB31,433,242 from various financial institutions, of which the unused amount was RMB7,362,664. As of December 31, 2021, the Company had drawn down RMB24,070,578 from such facilities, of which RMB4,297,406 (net of debt issuance costs of RMB39,926) was recorded in short-term loans and borrowings and RMB19,592,853 (net of debt issuance costs of RMB140,393) was recorded in long-term loans and borrowings, respectively. In addition, the Company also had other short-term loans and borrowings from non-financial institutions which were assumed through certain acquisitions of subsidiaries. Drawdowns from the credit facility from financial institutions are subject to the approval of the banks and are subject to the terms and conditions of each agreement.

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 GDC Pte. Ltd. (a) is not or ceases to, directly or indirectly, be the beneficial owner of at least 25% of the issued share capital of GDS Holdings, 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 25% of the votes that may be cast at a meeting of the board of directors (or similar governing body) of GDS Holdings, or (c) is not or ceases to be the single largest shareholder of GDS Holdings;

(ii)

GDS Holdings and GDS Investment Company are not or cease to be, directly or indirectly, the legal and beneficial owner of 100% of the equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, GDS Investment Company (in the case of GDS Holdings), GDS Beijing, Global Data Solutions Co., Ltd. (“GDS Suzhou”), a subsidiary company of GDS Beijing and the relevant borrowing subsidiaries;

(iii)

Management HoldCo ceases to, directly or indirectly, own at least 100% of the equity interests of and have the power to control GDS Beijing or GDS Suzhou;

(iv)

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

(v)

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

(vi)

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

There are certain other events in the loan facility agreements the occurrence of which could obligate GDS Holdings to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule,including, among others, if 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, or if GDS Holdings fails to maintain its shares listed on at least one of the following stock exchanges before the maturity date under the relevant loan facility agreement : (i) Nasdaq; or (ii) The Singapore Exchange Securities Trading Limited; or (iii) The Hong Kong Stock Exchange; or (iv) any other stock exchange acceptable to the lender. In addition, the terms of these loan agreements include 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 agreements. The terms of these loan agreements also include cross default provisions which could be triggered if the Company (i) fails to repay any financial indebtedness in an aggregate amount equivalent to or exceeding US$4,500 thousand, or,in some cases, RMB50,000, when due or within any originally applicable grace period; (ii) fails to repay any financial indebtedness or perform any of its obligations under any agreement which could have a material adverse effect on its performance of the loan facility agreements; (iii) fails to repay any financial indebtedness raised with any financial institution; or (iv) fails to perform any loan facility agreement with any financial institution which could result in immediate or accelerated repayment of the financial indebtedness or downgrading of the borrowing subsidiary by any credit rating agency administered by the People’s Bank of China (“PBOC”) in accordance with the regulations promulgated by PBOC governing loan market rating standards. As of December 31, 2021, the Company was in compliance with all of the abovementioned covenants.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

CASH AND RESTRICTED CASH (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CASH AND RESTRICTED CASH
Cash	¥ 9,968,109	¥ 16,259,457
Restricted cash - current assets	2,014,304	86,829
Restricted cash - non-current assets	43,954	146,643
Total cash and restricted cash shown in the consolidated statements of cash flows	¥ 12,026,367	¥ 16,492,929	¥ 5,973,262	¥ 2,284,748

INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2021

INCOME TAX

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


	Years ended December 31,
	2019	2020	2021
Loss (income) before income taxes:
PRC	68,080	(19,765)	287,250
Other jurisdictions	358,353	568,201	661,502
Total loss before income taxes	426,433	548,436	948,752

Current tax expenses:
PRC	65,819	210,503	290,924
Other jurisdictions	3	14	—
Total current tax expenses	65,822	210,517	290,924

Deferred tax benefits:
PRC	(50,172)	(89,739)	(48,463)
Other jurisdictions	—	—	—
Total deferred tax benefits	(50,172)	(89,739)	(48,463)

Total income taxes expenses	15,650	120,778	242,461

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


	Years ended December 31,
	2019		2020		2021

PRC enterprise income tax rate	25.0	%	25.0	%	25.0	%
Non-PRC resident enterprises not subject to income tax	(21.4)	%	(27.6)	%	0.0	%
Tax differential for entities in non-PRC jurisdiction	(1.4)	%	(1.3)	%	(0.2)	%
Preferential tax rate	0.0	%	(0.3)	%	0.6	%
Tax effect of current year permanent differences	1.5	%	1.0	%	(5.4)	%
Expiration of unused net operating losses	(1.4)	%	(1.3)	%	(1.5)	%
Non-taxable income and non-deductible expenses	0.0	%	2.5	%	(14.2)	%
Change in valuation allowance	(8.7)	%	(21.3)	%	(31.0)	%
Return to provision adjustment	2.7	%	1.3	%	1.1	%
	(3.7)	%	(22.0)	%	(25.6)	%

Schedule of components of deferred tax assets and liabilities


	As of December 31,
	2020	2021
Deferred tax assets:
Allowance for accounts receivable	1,959	2,858
Government subsidy	1,549	5,561
Accrued expenses	24,597	47,068
Asset retirement obligation	19,227	24,167
Operating lease liabilities	411,289	467,734
Finance lease and other financing obligations	1,577,663	1,636,506
Net operating losses carry forwards	386,999	713,135
Other non-current assets	—	41,853
Other non-current liabilities	—	26,621
Total gross deferred tax assets	2,423,283	2,965,503
Valuation allowance on deferred tax assets	(328,821)	(775,528)
Deferred tax assets, net of valuation allowance	2,094,462	2,189,975

Deferred tax liabilities:
Property and equipment	(1,663,342)	(1,687,122)
Intangible assets	(195,093)	(319,037)
Prepaid land use rights	(1,572)	(1,532)
Operating lease right-of-use assets	(550,374)	(711,444)
Other current assets	—	(18,622)
Total deferred tax liabilities	(2,410,381)	(2,737,757)

Net deferred tax liabilities	(315,919)	(547,782)

Analysis as:
Deferred tax assets	146,088	186,496
Deferred tax liabilities	(462,007)	(734,278)
Net deferred tax liabilities	(315,919)	(547,782)

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


	Years ended December 31,
	2019	2020	2021

Balance at the beginning of the year	155,852	205,976	328,821
Increase during the year	50,124	122,845	446,707
Balance at the end of the year	205,976	328,821	775,528

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ¥ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2019 CNY (¥) director	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
VIEs financial information
Ownership transferred (as a percent)	100.00%
Number of directors replacing prior sold director \| director	3
Shareholders of Management HoldCo
VIEs financial information
Loans	¥ 1,000			¥ 1,000
VIEs
VIEs financial information
Costs for outsourcing and other services provided by other consolidated entities within the Company		¥ 5,160,638	¥ 3,076,398	2,017,032
VIEs \| Management HoldCo
VIEs financial information
Loans	¥ 310,100			¥ 310,100
Right of GDS Investment Company to require repayment of the loans, prior notice period				30 days

SEGMENT INFORMATION (Details) ¥ in Thousands	12 Months Ended
SEGMENT INFORMATION (Details) ¥ in Thousands	Dec. 31, 2021 CNY (¥) segment	Dec. 31, 2020 CNY (¥)
Number of operating segments \| segment	1
Hong Kong SAR
Long-lived assets	¥ 2,670,937	¥ 1,627,832
Singapore
Long-lived assets	¥ 167,818	¥ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Value-added-tax ("VAT") (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Value-added-tax ("VAT")
VAT recoverable	¥ 229,090	¥ 155,620
VAT recoverable	2,218,944	1,445,521
Current assets
Value-added-tax ("VAT")
VAT recoverable	229,090	155,620
Noncurrent assets
Value-added-tax ("VAT")
VAT recoverable	2,218,944	1,445,521
Accrued expenses and other payables
Value-added-tax ("VAT")
VAT payables	¥ 19,251	¥ 6,838

MAJOR CUSTOMERS AND SUPPLIERS

12 Months Ended

Dec. 31, 2021

MAJOR CUSTOMERS AND SUPPLIERS

MAJOR CUSTOMERS AND SUPPLIERS

25 MAJOR CUSTOMERS AND SUPPLIERS

During the year ended December 31, 2019, the Company had three contracting customers, which generated over 10% of the Company’s total revenues or RMB1,010,794, RMB712,780 and RMB535,990, respectively. During the year ended December 31, 2020, the Company had three contracting customers, which generated over 10% of the Company’s total revenues or RMB1,347,165, RMB847,620 and RMB674,621, respectively. During the year ended December 31, 2021, the Company had four contracting customers, which generated over 10% of the Company’s total revenues or RMB1,736,295, RMB964,414, RMB873,378 and RMB785,528, respectively.

During the years ended December 31, 2019, 2020 and 2021, the numbers of major suppliers of the Company were two, two and one, respectively, from whom the purchase amounts from each of them accounted for over 10% of the Company’s operating expenditures. Severe impact can result from total or partial loss of the business relationship.

LEASES - Maturities of Lease Liabilities (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Finance lease obligations
Within 1 year	¥ 621,196	¥ 577,933
After 1 year but within 2 years	640,445	600,348
After 2 years but within 3 years	672,306	620,461
After 3 years but within 4 years	714,035	650,855
After 4 years but within 5 years	735,219	681,090
After 5 years	7,623,211	7,792,794
Total undiscounted lease payments	11,006,412	10,923,481
Less: total future interest	(4,192,322)	(4,343,379)
Present value of lease obligations	6,814,090	6,580,102
Other financing obligations
Within 1 year	701,350	225,350
After 1 year but within 2 years	713,338	354,625
After 2 years but within 3 years	714,084	356,204
After 3 years but within 4 years	454,918	377,930
After 4 years but within 5 years	417,214	361,073
After 5 years	473,110	723,755
Total undiscounted lease payments	3,474,014	2,398,937
Less: total future interest	(608,178)	(578,822)
Less: estimated construction costs	(47,241)	(47,924)
Present value of lease obligations	2,818,595	1,772,191
Total of finance lease and other financing obligations
Within 1 year	1,322,546	803,283
After 1 year but within 2 years	1,353,783	954,973
After 2 years but within 3 years	1,386,390	976,665
After 3 years but within 4 years	1,168,953	1,028,785
After 4 years but within 5 years	1,152,433	1,042,163
After 5 years	8,096,321	8,516,549
Total undiscounted lease payments	14,480,426	13,322,418
Less: total future interest	(4,800,500)	(4,922,201)
Less: estimated construction costs	(47,241)	(47,924)
Present value of total of finance lease and other financing obligations	9,632,685	8,352,293
Finance lease and other financing obligations, current	699,145	254,412
Finance lease and other financing obligations, non-current	8,933,540	8,097,881
Operating lease obligations
Within 1 year	260,935	180,447
After 1 year but within 2 years	246,970	190,243
After 2 years but within 3 years	249,383	149,300
After 3 years but within 4 years	212,829	151,545
After 4 years but within 5 years	178,627	151,063
After 5 years	1,935,590	1,839,384
Total undiscounted lease payments	3,084,334	2,661,982
Less: total future interest	(1,055,035)	(1,032,829)
Present value of lease obligations	2,029,299	1,629,153
Operating lease liabilities, current	145,739	86,258
Operating lease liabilities, non-current	1,883,560	1,542,895
Total
Within 1 year	1,583,481	983,730
After 1 year but within 2 years	1,600,753	1,145,216
After 2 years but within 3 years	1,635,773	1,125,965
After 3 years but within 4 years	1,381,782	1,180,330
After 4 years but within 5 years	1,331,060	1,193,226
After 5 years	10,031,911	10,355,933
Total undiscounted lease payments	17,564,760	15,984,400
Less: total future interest	(5,855,535)	(5,955,030)
Less: estimated construction costs	(47,241)	(47,924)
Present value of lease obligations	11,661,984	9,981,446
Current Portion	844,884	340,670
Non-current portion	10,817,100	¥ 9,640,776
Other disclosures
Total future lease payments for additional leases that have not yet commenced, primarily for data center buildings	¥ 70,928
Data center building leases \| Minimum
Other disclosures
Lease terms	1 year
Data center building leases \| Maximum
Other disclosures
Lease terms	20 years

RELATED PARTY TRANSACTIONS (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Related Party Transactions
Amount due to related parties	¥ 24,144	¥ 15,360
STT Singapore DC Pte. Ltd.
Related Party Transactions
Commission income	546	553	¥ 624
Amount due to related parties	13,905	7,938
Billed on behalf of related parties	45,345	40,503	55,392
STT DEFU 2 Pte. Ltd.
Related Party Transactions
Commission income	464	485	332
Amount due to related parties	10,239	7,422
Billed on behalf of related parties	39,818	40,256	43,069
Affiliated Entity
Related Party Transactions
Commission income	¥ 1,010	¥ 1,038	¥ 956

- Definition

Carrying amount as of the balance sheet date of obligations due all related parties.

+ References

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- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

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+ Details

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

19 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 ordinary shares, which may be subject to Awards under the Plan, is 56,707,560 ordinary shares, provided, however, that the maximum number of unallocated ordinary shares which may be issuable pursuant to Awards are subject to certain automatic approval mechanism up to 3% of total issued and outstanding ordinary shares of the Company, if and whenever the unallocated ordinary shares which may be subject to equity awards under the 2016 Plan accounts for less than 1.5% of the Company’s total issued and outstanding ordinary shares.

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, 2019	24,779,432	5.3	2.2
Granted	—
Exercised	(10,150,336)	5.6	3.5
Forfeited	—

Options outstanding at December 31, 2019	14,629,096	5.4	1.7
Granted	—
Exercised	(14,222,096)	5.5	1.6
Forfeited	—

Options outstanding at December 31, 2020	407,000	5.1	1.6
Granted	—
Exercised	(407,000)	5.1	1.6
Forfeited	—

Options outstanding at December 31, 2021	—

Options vested and expected to be vested at December 31, 2021	—

Total intrinsic value of options exercised was RMB266,863, RMB633,606 and RMB27,775, respectively, for the years ended December 31, 2019, 2020 and 2021.

Settlement of liability-classified restricted shares award

In March, May, August and November 2019, the Company issued a total of 237,312 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 RMB7,984.

In March, June, July and October 2020, the Company issued a total of 190,536 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 RMB10,089.

In January, June, July and October 2021, the Company issued a total of 178,280 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 RMB11,147.

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 August 2019, August 2020 and August 2021, the Company granted non-vested restricted shares of 14,314,160, 11,520,312 and 11,929,608, respectively, to employees, officers and directors. The restricted share awards contained service and market conditions, or service and performance conditions, which are tied to the financial performance of the Company. For restricted shares granted, the value of the restricted shares was determined by the fair value of the restricted shares on the grant date, when all criteria for establishing the grant dates were satisfied. The value of restricted shares subject to service conditions and market conditions 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. For restricted shares with market conditions, the probability to achieve market conditions is reflected in the grant date fair value.

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, 2019	29,510,504	9.3
Granted	14,551,472	34.2
Vested	(9,122,432)	9.3
Forfeited	(1,582,248)	10.7

Unvested at December 31, 2019	33,357,296	22.4
Granted	11,710,848	66.7
Vested	(12,684,640)	14.1
Forfeited	(1,364,736)	25.1

Unvested at December 31, 2020	31,018,768	42.4
Granted	12,107,888	31.6
Vested	(12,632,104)	29.3
Forfeited	(1,563,832)	37.7

Unvested at December 31, 2021	28,930,720	43.9

The Company recognized share-based compensation expenses of RMB189,447, RMB333,686 and RMB391,275 for the years ended December 31, 2019, 2020 and 2021, respectively, for the restricted share awards. As of December 31, 2021, total unrecognized compensation expense relating to the unvested shares was RMB422,369. The expense is expected to be recognized over a weighted average period of 1.53 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, 2019, 2020 and 2021.

Total intrinsic value of restricted shares vested was RMB311,923, RMB827,396 and RMB674,147, respectively, for the years ended December 31, 2019, 2020 and 2021. Aggregate intrinsic value of unvested restricted shares as of December 31, 2021 was RMB1,087,349.

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:	August 2019		August 2020		August 2021
Risk-free rate of return	1.67% - 1.88	%	0.14% - 0.19	%	0.07% - 0.33	%
Volatility	63.22	%	59.23	%	49.271% - 50.295	%
Expected dividend yield	0.00	%	0.00	%	0.00	%
Share price at grant date	US$5.02375		US$10.1475		US$7.45
	(RMB34.6)		(RMB70.5)		(RMB48.2)
Expected term	1 – 3 years		1 – 3 years		1 – 3 years

(1)

Volatility

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

(2)

Risk-free interest rate

Risk-free rate equal to the United States Government Treasury Yield Rates 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, 2019, 2020 and 2021 is as follows:


	Years ended December 31,
	2019	2020	2021

Costs of revenue	46,007	89,943	110,291
Selling and marketing expenses	39,436	54,204	53,560
General and administrative expenses	101,949	184,943	219,328
Research and development expenses	2,364	4,596	8,096
Total share-based compensation expenses	189,756	333,686	391,275

CASH AND RESTRICTED CASH (Tables)

12 Months Ended

Dec. 31, 2021

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 of December 31,
	2020	2021

Cash	16,259,457	9,968,109
Restricted cash - current assets	86,829	2,014,304
Restricted cash - non-current assets	146,643	43,954

Total cash and restricted cash shown in the consolidated statements of cash flows	16,492,929	12,026,367

OTHER LONG-TERM LIABILITIES (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Other long-term liabilities
Consideration payable for acquisitions	¥ 261,000	¥ 97,457
Asset retirement obligations	96,862	76,909
Deferred revenue - non-current (Note 4)	44,908	14,871
Deferred government grants	22,245	6,196
Payables for purchase of property and equipment		139,162
Others	114,285	14,662
Total	¥ 539,300	¥ 349,257

RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2021

RESTRICTED NET ASSETS

RESTRICTED NET ASSETS

22 RESTRICTED NET ASSETS

Pursuant to the laws and regulations of the PRC, the 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 RMB 13,109,939 and RMB 20,939,896 as of December 31, 2020 and 2021, respectively, including non-distributable general reserve fund of RMB 55,333 and RMB 66,098 as of December 31, 2020 and 2021, respectively.

SHARE-BASED COMPENSATION - Fair Value Assumptions - Restricted Shares (Details) - Restricted shares	1 Months Ended
	Aug. 31, 2021 ¥ / shares	Aug. 31, 2020 ¥ / shares	Aug. 31, 2019 ¥ / shares	Aug. 31, 2021 $ / shares	Aug. 31, 2020 $ / shares	Aug. 31, 2019 $ / shares
Fair value assumptions
Volatility (as a percent)		59.23%	63.22%
Expected dividend yield (as a percent)	0.00%	0.00%	0.00%
Share price at grant date \| (per share)	¥ 48.2	¥ 70.5	¥ 34.6	$ 7.45	$ 10.1475	$ 5.02375
Minimum
Fair value assumptions
Risk-free rate of return (as a percent)	0.07%	0.14%	1.67%
Volatility (as a percent)	49.271%
Expected term	1 year	1 year	1 year
Maximum
Fair value assumptions
Risk-free rate of return (as a percent)	0.33%	0.19%	1.88%
Volatility (as a percent)	50.295%
Expected term	3 years	3 years	3 years

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2021

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

29 SUBSEQUENT EVENTS

Private Placement of Convertible Senior Notes

On March 8, 2022, the Company completed the private placement of convertible senior notes due 2029 (the “Notes”) with aggregate principal of US$ 620,000 thousand to certain investors. The Notes bore an annual interest rate of 0.25% and are convertible into American Depositary Shares (“ADSs”) or Class A ordinary shares of the Company at the option of the holders, at any time prior to the close of business on the third scheduled trading day (or the fifth scheduled trading day, if the converting holder elects to receive Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date at a conversion price initially being US$ 50 per ADS, subject to customary anti-dilution adjustments. The Company has the right to force a conversion by the holders of all (but not some only) of the relevant series of Notes at any time on or after the fifth anniversary of the issuance of the Notes in exchange for ADSs or Class A ordinary shares at the then-prevailing conversion rate, provided certain conditions are met. In addition, the Company has the right to redeem all (but not some only) of the relevant series of Notes upon the occurrence of certain changes in tax law subject to a right of holders of such Notes to elect not to have their Notes to be redeemed. The holders of the Notes have the right to require the Company to repurchase all or part of their Notes in cash on the fifth anniversary of the issuance of the Notes, or in the event of certain fundamental changes, in each case at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.

REDEEMABLE PREFERRED SHARES - Movement of redeemable preferred shares (Details) $ / shares in Units, ¥ in Thousands, $ in Millions				12 Months Ended
	Dec. 10, 2019 shares	Mar. 27, 2019 USD ($) $ / shares shares	Mar. 19, 2019 shares	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Movement of the redeemable preferred shares
Issuance of shares (in shares) \| shares	6,318,680		13,731,343
Balance at beginning of year				¥ 980,910
Balance at end of year				¥ 958,480	¥ 980,910
Redeemable preferred shares
Movement of the redeemable preferred shares
Issuance of redeemable preferred shares						¥ 989,349
Dividend rate per annum				5.00%
Increase dividend rate per annum				7.00%
Increase in dividend rate each quarter thereafter if the Company has not redeemed all of the preferred shares outstanding as of the eighth anniversary of the Issue Date				0.50%
Balance at beginning of year				¥ 980,910	1,061,981
Change in redemption value of redeemable preferred shares						17,760
Accrual of dividends				49,073	52,709	40,344
Settlement of dividends				(49,221)	(65,489)	(25,014)
Foreign exchange impact				(22,282)	(68,291)	39,542
Balance at end of year				¥ 958,480	¥ 980,910	¥ 1,061,981
Redeemable preferred shares \| PA Goldilocks Limited
Movement of the redeemable preferred shares
Issuance of shares (in shares) \| shares		150,000
Share price \| $ / shares		$ 1
Issuance of redeemable preferred shares \| $		$ 150

COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Capital additional purchase commitments
Capital commitments
Capital commitments outstanding not provided for in the financial statements, Contracted for	¥ 3,790,769	¥ 3,949,623
Purchase of land use rights
Capital commitments
Capital commitments outstanding not provided for in the financial statements, Contracted for	¥ 90,938	¥ 20,650

CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net loss	¥ (1,191,213)	¥ (669,214)	¥ (442,083)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of debt issuance and commitment cost and debt discount	200,069	160,699	99,380
Depreciation and amortization	2,616,898	1,638,474	1,142,032
Operating lease cost relating to prepaid land use rights	40,422	20,412
Net gain on disposal of property and equipment	(1,763)	(256)	(703)
Share-based compensation expenses	391,275	333,686	189,756
Gain from purchase price adjustment	(7,010)	(55,154)
Loss from equity method investment	968	3,375	1,213
Allowance for doubtful accounts	10,070	2,037	274
Deferred tax benefit	(48,463)	(89,739)	(50,172)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(37,992)	(465,189)	(342,191)
VAT recoverable	(631,562)	(463,630)	(323,044)
Prepaid expenses	(35,192)	(53,933)	(13,320)
Other current assets	(55,452)	65,756	(8,095)
Other non-current assets	(53,702)	(72,099)	(8,678)
Accounts payable	35,496	119,163	22,540
Deferred revenue	24,470	6,285	31,417
Accrued expenses and other payables	(121,828)	(139,891)	(20,434)
Other long-term liabilities	15,190	9,015	1,299
Operating leases	50,682	(28,910)	14,245
Net cash provided by operating activities	1,201,363	320,887	293,436
Cash flows from investing activities
Payments for purchase of property and equipment and land use rights	(9,700,536)	(8,037,002)	(4,557,686)
Cash acquired from the business combinations	57,236	4,801	12,091
Cash paid for the business combinations	(3,451,941)	(1,172,518)	(190,066)
Cash paid for the asset acquisitions	(179,770)	(180,910)	(363,939)
Cash paid for equity investments	(3,000)	(4,500)	(6,000)
Receipts from collection of loans	20,866
Deposits and prepayments for potential acquisitions	(435,804)	(4,300)	(30,700)
Proceeds from sale of property and equipment	1,411	16,422	5,069
Net cash used in investing activities	(13,691,538)	(9,378,007)	(5,131,231)
Cash flows from financing activities
Proceeds from short-term borrowings	3,775,353	1,156,215	467,744
Proceeds from long-term borrowings	12,409,833	6,939,140	5,000,510
Repayment of short-term borrowings	(902,659)	(438,925)	(758,941)
Repayment of long-term borrowings	(5,177,495)	(4,187,184)	(1,968,913)
Payment of issuance cost and commitment cost of borrowings	(150,008)	(158,480)	(156,742)
Proceeds from exercise of stock options	2,082	78,748	55,469
Net proceeds from issuance of ordinary shares		15,974,517	4,934,126
Net proceeds from issuance of redeemable preferred shares			989,349
Payment of redeemable preferred shares dividends	(49,221)	(65,489)	(25,014)
Capital contribution from non-controlling shareholders	225,948	105,000
Payments under finance leases and other financing obligations	(265,481)	(198,234)	(289,467)
Proceeds from other financing arrangements	50,312	1,079,370	302,761
Payment for purchase of property and equipment through vendor financing	(808,200)	(92,299)	(68,864)
Payment of contingent consideration for acquisition of subsidiaries	(926,196)	(48,718)	(120,079)
Payment for acquisition of non-controlling interests	(65,113)
Net cash provided by financing activities	8,119,155	20,143,661	8,361,939
Effect of exchange rate changes on cash and restricted cash	(95,542)	(566,874)	164,370
Net increase (decrease) in cash and restricted cash	(4,466,562)	10,519,667	3,688,514
Cash and restricted cash at beginning of year	16,492,929	5,973,262	2,284,748
Cash and restricted cash at end of year	12,026,367	16,492,929	5,973,262
Supplemental disclosures of cash flow information
Interest paid	1,538,974	1,113,443	841,388
Income tax paid	252,071	211,612	17,031
Supplemental disclosures of non-cash investing and financing activities
Non-cash effect of acquisitions of subsidiaries	2,044,575	718,546	239,096
Settlement of liability-classified restricted share award	¥ 11,147	10,089	¥ 7,984
Conversion of convertible bonds		¥ 65

DERIVATIVE FINANCIAL INSTRUMENTS - Statement of operations location (Details) - Interest rate swap contracts - Not designated as hedging instrument - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Interest rate swap contracts	¥ (9,775)	¥ (12,258)
Interest expenses
DERIVATIVE FINANCIAL INSTRUMENTS
Realized loss	(19,814)	(1,652)
Unrealized (loss) gain	¥ 10,039	¥ (10,606)

PROPERTY AND EQUIPMENT, NET - Acquired under finance leases and other financing arrangement (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Carrying amounts
Finance leases, net	¥ 8,867,222	¥ 8,207,825
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization