I think in terms of business plan, it definitely will boost in the next few quarters. But in terms of move-in, there’s a lot of effects to impact the move-in in terms of the shipment, in terms of their previous — they still have some inventory, right? So, I think, in general, I think the — still — that’s why we’re still very conservative to assume cloud service provider move-in pace still maintain a solid level, a neutral level, not aggressive. So, it’s normal. So, I think the — but given the whole environment looks like it will improve in the next few quarters.
Dan Newman: With regard to adjusted EBITDA margin, I feel like this year’s margin is probably the trough, but it does depend on several different drivers. One, of course, is pricing. Yeah, it’s another topic for discussion, but we feel like pricing is important. And there’s a setup, which could see pricing recover in future years. Secondly is power tariffs. The input fuel costs have started to come down, but we haven’t seen that reflected in power tariffs yet. And even if it is reflected, it wouldn’t benefit us this year. It could benefit us in future years. And Chinese government policy may influence that if the government wishes to see power tariffs come down as was their inclination historically, or the tendency historically.
And then the third part is international, where we are creating significant value or we will create significant value in future. But at the moment, it’s EBITDA negative. I think it will be EBITDA breakeven in the first half of next year, but that’s still depressing on the margin. So, it will take until 2025 before the EBITDA margin of international sale is in the (ph). So that growth drag will persist for some time. I think for forecasting purposes, maybe you use this year as a trough and then see a slight step up over the next couple of years as (ph).
Gokul Hariharan: Got it. Thank you.
Operator: Thank you. We’ll now take our next question. Please standby. It is from the line of Frank Louthan from Raymond James. Please go ahead.
Frank Louthan: Great. Thank you. Can you comment on the state of the market for the capital recycling and the appetite for those assets? Is it the same or better or worse than when you originally sort of put this plan together? And I apologize if I missed this, but can you quantify the amount of capital recycling you expect to do in each of the next two years? And is CapEx — is it the sort of low for CapEx this year? Thank you.
Dan Newman: Let me start with the numbers. I mean, what I showed was that, in 2023, our free cash flow before financing is negative by around — sorry, it’s around — just over RMB2.5 billion. And some of that can be financed by drawing down on project finance facilities. And then, the remainder needs to be financed with our capital. Having done that convertible bond in January, assuming we go ahead and repurchase the CB if it is possible, on a net basis, we increased our financial resources. And so, I think pro forma, we had around RMB9 billion of cash. So that is available to be allocated to China, to be allocated to international, if we choose to do so. But we try to prioritize raising additional capital, recycling capital at the country level before we allocate our cash.
In China, if we assume that the target for this year is to recycle around RMB1 billion to RMB2 billion, we’re already 10 months down the road of working on our onshore — sorry, offshore China data center fund. We had the regulatory approval. When we signed the limited (ph) agreement, we also signed a sale and purchase agreement for the first asset to be transferred to that fund. And that will realize cash proceeds to us net of what we put into the funds of RMB1.5 billion — RMB1.45 billion. So that goes a substantial way to fulfilling whatever requirement we have this year. I think the chances are that next year the requirement will be similar, if not less, because operating cash flow will hopefully increase and CapEx, I don’t expect to be higher, it might be lower.
