Operator: For our next question, and our next question will come from the line of Timothy Zhao from Goldman Sachs.
Timothy Zhao : My question is regarding the EBITDA. Just wondering compared to your full year guidance, the low end and high end. Just wondering what are tables that you are thinking for the second half of this year in order for the company to achieve the midpoint or the high-end. And, also any color into the EBITDA margin into the second half, including any like a trend that you see from the tariff power — tariff power cost, et cetera, that would be very helpful.
Tim Chen: Tim, let me take this question here. Look, good question on the EBITDA margins. Obviously, for both first and second quarter, we’ve been working very hard on the cost control side. And so that’s actually helped. There are a few, I would say, one-offs on the positive side both in first and second quarter, which we’ve shared with the market. That will not be repeated in the third and fourth quarters. So we do expect there to be, I guess, a reversion in terms of third quarter. Some of the bigger factors that have impacted in second quarter and expect it to continue to impact in the third quarter relates to power and tariff costs. The average unit cost actually has been relatively stable in the second quarter. However — and this is not unlike our peers in China right now.
There is now so in terms of the summer months, where we do expect the utility cost to be higher. Also, as you can see from our figures in the PPT, we’ve had some substantial ramp-up in terms of customers moving into our data centers. And obviously, that also increases our overall utility costs. Last but not least, in terms of an outlook, I would say that in a moment, our guidance for the full year EBITDA remains unchanged. There is, I guess, an element of uncertainty around, let’s say, second half power costs. There is an NDRC notification about provincial electricity transmission distribution prices during the third regulatory period. So we expect that, that will inject another layer of uncertainty, I would say, around power. And I think for third quarter at the moment, we’re probably expecting that EBITDA margins will contract a bit as compared to second quarter as some of these one-offs will disappear from the second quarter.
But if the power costs remain stable, then we expect that third into fourth quarter, fourth quarter will then have an improvement in margins, obviously, given the cooler weather of the winter months.
Operator: That’s all the time we have for Q&A today. And with that, ladies and gentlemen, that concludes our conference for, thank you for participating. You may now disconnect. Everyone, have a good day.
