YEIG Digital Economy (Chenggong) Industrial Park Project

Project Name

云南能投数字经济（呈贡）产业园项目

YEIG Digital Economy (Chenggong) Industrial Park Project

Project

Industry

Information Industry

Project Site

Kunming Chenggong Information Industrial Park

Project Overview

The YEIG Digital Economy (Chenggong) Industrial Park Project is a new infrastructure project run by Yunnan Energy Investment Information Industry Development Co., Ltd. in the digital economy field. It looks to serve markets in Yunnan, China, South Asia and Southeast Asia, works in accordance with the concept of "safe, eco-friendly, smart and innovative operation", focuses on the construction of new infrastructures in the data center, builds the supporting industry, operation, and R&D centers, and strives to create the "Yunnan Core Digital Economy Infrastructure Base, Yunnan Digital Economy Innovation Pilot Zone, and the Digital Economy Cluster for Driving Development in South Asia and Southeast Asia".

Project Construction Content

Construction Scale: The Project Construction Content includes the data center (29,500 m²), operation center (69,000 m²), R&D center (30,500 m²), industry center (10,100 m²) and park supporting facilities, with a total land area of 115 mu and a total construction area of 170,000 m². The above-ground buildings cover a total area of 140,000 m²; the underground buildings total 31,100 m² in area.

Construction Duration: 1-2 years.

Land Area: 115 mu.

Supporting Conditions

1. Project Advantages and Opportunities:

Chenggong New District boasts a convenient 3D transportation network comprising high-speed rails, expressways, flight routes and rail transit.

High-speed rails: Chenggong is located along the Kunming-Bangkok Economic Corridor and the Kunming-Hanoi Economic Corridor. It is the intersection of the middle and east sections of the Pan-Asian International Passage. Kunming South High-Speed Railway Station, which offers eight entrances and five exits, has been opened to traffic, shortening the distance between Chenggong and developed areas in China like Beijing, Shanghai, and Guangzhou as well as countries in South Asia and Southeast Asia. Chenggong has become China's rail transit gateway to South Asia and Southeast Asia. Metro Lines 1, 4 and 9 pass through the city, bringing the historical and modern sections of Kunming together.

Expressways: Huangtupo-Majinpu Expressway, Chenggong-Chengjiang Expressway, Kunming-Yuxi Expressway are arranged in a crisscross pattern, and are just a one-hour drive to cities in central Yunnan.

Aviation: In terms of straight-line distance, the central area of Chenggong New District is about 22 km away from Changshui International Airport, and it takes about 30 minutes by car from Chenggong to Changshui Airport.

Chenggong Information Industrial Park is 4 km away from the municipal-level administrative center and 3 km away from Kunming New South Railway Station (high-speed railway station), which can be reached in 5 minutes by car. It is 25 km away from Changshui Airport, with four expressways connecting the airport directly. Huangtupo-Majinpu Expressway is on the east side and Fude-Yiliang Expressway, under construction, is on the west side of the project site.

2. Associated Industries:

In 2019, the main business income of the information industry in Yunnan Province reached RMB 146.5 billion, a growth rate of 18.3%. Intelligent products such as mobile phones, computers and servers were "Made in Yunnan", and the first provincial-level blockchain traceability commodity code "Peacock Code" was released. Yunnan Province has built 309,000 mobile base stations, of which 11,399 are 5G base stations. Kunming is the fourth city in China where the three major telecom operators establish their international telecommunication bureaus. In 2019, Kunming successfully held the "Digital Yunnan" International Forum on Blockchain, the Yunnan International Smart Tourism Conference and the China-Thailand Digital Economy Annual Meeting.

Chenggong Information Industrial Park, where the project is run, was established in 2012. It was approved by the People's Government of Yunnan Province as a provincial industrial park in 2015. Chenggong Information Industrial Park is the only specialized industrial park featuring big data and cloud computing in Yunnan Province, and is well equipped with gas, communication, and power infrastructures. Thus far, a large number of well-known enterprises including Huawei, Inspur, Microsoft, Google, TUSC, Venustech, Ubtech, Jay Forrester have established their facilities in Chenggong Information Industrial Park.

3. Early Preparations:

The main part of the project is already under construction.

Investment Estimate and Fund Raising

Investment Estimate: RMB 1.784 billion.

Fund Raising: Self-raised by enterprises, bank loans and other ways of financing

Preferential Policies Applicable

Preferential policies specified mainly in the Kunming Municipal People's Government's Notice on Publishing Policies and Measures to Support the Development of Chenggong Information Industrial Park (for Trial Implementation) (KZF [2016] No. 69).

Market Prediction (Analysis)

The rapid evolution of new generation information technologies such as 5G, Internet of Things, artificial intelligence and VR/AR will have an important impact on the scale, construction and performance of the data center, and give rise to a sharp increase in the demands of the data center. Yunnan Province has about 10,000 Party, government, military, and public institutions (of which about 200 are at the departmental level, about 1,600 are at the prefectural and municipal levels, and about 8,000 are at the county level). It has officially launched the "Migrate Enterprises to Cloud" plan. By the end of 2020, a total of 10,000 enterprises in Yunnan will have migrated to cloud platforms. Currently, more than 2,000 foreign-funded enterprises operate in Yunnan. As progress is made to make Yunnan the "bridgehead" and to undertake the Belt and Road Initiative, the figure may well double. Yunnan Province lags behind Guizhou, Sichuan and Chongqing when it comes to the overall scale of data centers. It has no more than 10 large-scale data centers that are in operation or under construction, and the total number of equipment cabinets does not exceed 50,000. Compared with developed areas such as the eastern coastal areas and neighboring provinces and cities, there is still much room for development.

Profit Model and Preliminary Benefit Analysis

The project combines light and heavy assets in a bid to make profit through the diversified "Park+Service" operation model. At the initial stage of project operation, profit came mainly from heavy assets; at the middle and late stages of project operation, more profit will come from light assets. Operating income based on heavy assets comes mainly from the rental and sales of real estates such as data centers, R&D centers, operation centers, and industrial centers in the park. Operating income based on light assets comes mainly from service fees charged on industrial platforms and returns from investment and incubation. Industrial platforms mainly provide corresponding supporting facilities and services for enterprises in the park. Returns from investment and incubation are equity dividends obtained by associating the gains of the park with those of enterprises through industrial incubation and investment, and by growing together with enterprises.

It is estimated that the project investment return rate is 15.21%, the investment internal rate of return is 8.01%, the investment net present value is RMB 2,278,100, the investment payback period is 12.64 years, and the interest coverage ratio is 5.49. The project investment internal rate of return is greater than the benchmark rate of return in the industry, and the investment payback period is shorter than the benchmark investment payback period (20 years) in the industry.

Risk Analysis

The risk to project construction is small.

Cooperation Pattern

Investment cooperation, project cooperation and equity cooperation.

Contact Information

Contact Authority: Yunnan Energy Investment Information Industry Development Co., Ltd.

Contact Person: Yang Zhiwei

Tel.: 18008809696

Fixed-line Tel.: 0871-64980333