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spk01: Ladies and gentlemen, thank you for standing by and welcome to the NASS Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. I must advise you that this conference is being recorded today. I would now like to turn the conference over to your first speaker today, Ms. Gao Ying Peng, Vice President of Strategy. Thank you and please go ahead.
spk05: Thank you, operator. Hello, everyone, and welcome to NAP's second quarter 2022 Earnings Commerce Call. The company's results were issued earlier today and are posted online. Joining me today on the call are Ms. Cathy Wang Yang, our founder and chief executive officer, Mr. Stanley Soley, chief financial officer, and other members of our team. For today's agenda, Ms. Wang will provide an overview of our recent performance and highlights and Mr. Dunn will discuss our financial results. Before we continue, I will refer you to our State Harbor Statement in Earnings Press Relief, which applies to this call as we will make a follow-up statement. Also, please note that this call includes discussions of certain non-IFRS financial measures. Please refer to our Earnings Relief, which contains a reconsolidation of non-IFRS measures, the most drastically comparable IFRS measures. Finally, quick note that unlike otherwise stated, all figures mentioned during this conference poll are in Renminbi. I will now turn the call over to our CEO, Ms. Wang Yang, whom I will translate for. Hello, everyone. I am CEO, Wang Yang, and I am happy to share with you the business situation in 2022 and the first half of the year. Greetings, everyone. I am NUT CEO, Cathy Wang Yang, and it's my pleasure to be able to share with everyone NUT's second quarter 2022 and first quarter 2022 earnings report. First of financial situation, second quarter NUT revenue increased by 5.9%. In the second quarter of 2022, net total revenues increased by 47% and net revenues increased by 5.9 times, while losses only increased by 5%, reflecting our strong improvement in operational efficiency. During the first half of the year, the macroeconomic environment was complex, which, based on previous data, has also reduced the demand for travel. It was under these difficult circumstances that mass overall revenues continued to increase. by 90%, reaching $108 billion. In the first half of the year, mass offline service revenues increased by 4.3 pounds and by 5.6 pounds in the second quarter. This was primarily the result of strong increases in offline charging station service revenue and the growth in charger sales. Second, this is overview. Total charging volume reached 1.06 billion more, an increase of 160%. According to the EVCIPA, in the first half of 2002, China's public and specialized charging market volume increased by 73%. During the same period, that charting volume reached 1.016 or more, an increase of 150% year over year, representing growth that was more than double that of the overall market. As of June 30, NAP coverage extended to China's 358 primary cities, connecting 44,000 charging stations, 400,000 chargers, with a charger compound growth rate over the last four quarters of approximately 22.4%, and the number of active chargers increasing by 75% in the second quarter and comprehensive operational capabilities to work with a state-free, The China Southern Power Grid, Qigong, Subcharge, Huaiyuan, and other partners jointly help drivers quickly find quality working chargers and help relieve the Chinese EV charging market problems of over-capacity, under-utilization, and a lack of quality chargers. Zhijian, as a new energy service provider, provides a new energy solution for main airport, car network, logistics company, and large-scale Internet of Things enterprises. In the first half of 2022, Zhijian began to cooperate with partners such as Biqi, Dazhong, Shenzhen Motor Vehicles, Jingdong Motor Vehicles, Jing Congdian, Tencent Travel Services, etc. to sign contracts with them and provide services. In July, Zhijian reached cooperation with Ideal Motors. NAPS, as a new energy service provider, offers new energy solutions to other OEMs, other websites, logistics companies, and major internet companies. In the first half of 2022, working with our former ,, NAPS signed agreements and provided services to FDW, Volkswagen, New Horizons Auto, Ping An Auto, Shenzhen Auto Charging, and Tencent Smart Mobility. In July, NAPS reached Cooperation agreement will be followed. In the first half of the year, mass charger sales reached running beat. 17.84 million, an increase of 71%. Our charter sales typically exhibit this analogy. We are expecting charter sales to increase even more dramatically in third and fourth quarters. In the first half of the year, NAP provided 77 customers with electricity procurement services, enabling virtual electricity provider services to offer an additional reserve ecosystem. Third, the new energy market. In the first half of the year, globally, new electric vehicle sales increased by 71%, and China's total number of EVs reached over 10 million. In the second half of 2022, China's new energy car sales amounted to 2.34 million, accounting for 56% of the world. At the end of June, China's new energy car maintenance amounted to 10 million. In July, China's new energy car sales amounted to 26.7%, with more than 25% in 88 cities. In the first half of 2022, China's new passenger EV sales reached 2.34 million, representing 56% of the global total. At the end of June, China's total number of EVs reached over 10 million. In July, China's total penetration rate for new passenger EVs reached 26.7%. and over 25% in 88 cities. In August, the CPCA raised its forecast for China's total passenger EV sales for the year to $6.5 million. On August 18, State Council President Li Keqiang held a long-term State Council meeting to confirm the support policies such as new energy vehicle purchase tax, vehicle deposit tax, and consumption tax. On August 18, of the state council at a meeting of the state council concerns, the EV purchase tax, auto tax, and consumption tax, as well as other supported policies. The carbon neutral is the fate of all human beings. The overseas new energy market is also on fire. In the first half of 2022, global new energy commercial vehicles sold 4.21 million, a 71% increase. The European Union proposed that from 2035, the sale of gasoline-powered cars and light commercial vehicles will be completed by 2050. U.S. President Biden also announced that by 2030, 50% of new car sales will achieve zero emissions. Carbon neutrality is a core concern for all mankind, and the international new energy market is experiencing similarly rapid growth. In the first half of 2022, total global eBay sales reached 4.21 million, an increase of 71%. The European Union proposed rules demanding the sale of ICE passenger vehicles and light business vehicles by 2035, and the tools achieving carbon neutrality by 2050. President Biden in the U.S. has also announced that by 2030, 50% of all new cars should be zero emissions vehicles. Currently, many countries are experiencing high-temperature challenges. Part of the region is at higher energy risks. China has also experienced rare high temperatures. Part of the provinces have had power outages. Currently, multiple countries are facing high-temperature challenges. China is also encountering very encountered hot temperatures, causing several processes to restrict or stop electric use. As compared to the U.S. or European public charging market, China's charging market will require that public charging become the main form of charging. China's charging market is a highly recommended market In 2030, China's total number of EVs might reach 80 million, and with a 5 to 1 charger ratio, the market may require 20 million charging piles. When the time comes, China's charging supply might face an enormous challenge. Building a smart charging network and a virtual electric provider to enable distribution and transaction represents a difficult task, but also the right thing to do. will require a company like NAS to work with everyone to improve efficiency in different parts of the market. Fourth, guidance. NAS four-year charging volume will reach over 2.7 billion volts, 2.2 times the 2021 volume. As China's first listed EV charging stock, NAS will continue to deepen our involvement and engagement in the market by providing a wide range of services, including site selection, consultation, charger procurement, electricity procurement, port station operation, and station maintenance, providing a one-stop solution to all potential EV charging needs. We estimate that in the second half of this year, the battery charge will rise by 99% compared to the same period last year. The total annual charge will exceed 2.7 billion degrees, reaching 2.2 times that of 2021. The total annual charge will reach 1.3 to 1.5 billion RMB, which is 2.5 to 3 times that of 2021. We anticipate that in the second half of the year, NAP's total electricity charge will increase by 99% year over year, reaching 2,700 GW, 2.2 times 2021's charging volume. Total charger sales for the year are expected to reach 130 to 150 million RMB, representing an increase of 2.5 to 3 times versus 2021. China's transportation carbon emissions represent 10.4% of all carbon emissions. That dream and ambition is to make energy more efficient, reduce carbon emissions by 10% and to lower China's carbon emissions by 1%. Next, I'd like to invite our CFO Stanley to discuss financial performance.
spk10: Thank you, Cathy. As mentioned, we are very proud to announce our record-setting quarter for our first reporting quarter as a public company. In the interest of time, we will now go over each individual line of the financial statement, and instead, we'll focus on the key highlights. For additional details, please refer to our earnings price release. Our total gross revenue for the first half reached RMB 108 million, representing year-over-year growth of 90%. Net revenues grew by 4.5 times year-over-year to raise RMB 18.1 million for the first half of the year. It should also be noted that our final results were also impacted by the one-time cost associated with our merger and leasing. Our non-effortless loss for the first half was RMB 140.3 million. Representing year-over-year growth of 19%, our non-offer loss rate was 130%, decreasing from 209% for the same period last year. In addition, I'm also pleased to announce that we have secured an additional RMB 400 million in financing from the China Construction Bank. from this financing will be used to further develop our charging operations and services, as well as to improve our charger sales. With that, I conclude our prepared remarks. Operator, please proceed with the question and answer session.
spk01: Thank you. And ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star then 1 on your touch-tone phone. and wait for your name to be announced. If you wish to cancel your request, please press star then 2. Once again, that is star then 1 to ask a question. Please ask your question in Chinese. If you can, then kindly repeat the question in English. One moment, please, for the first question. And our question today will come from with Credit Suisse. Please go ahead.
spk08: Hello, Manager Ge. I am a car engineer at RuiHsing.
spk05: I would like to know more about the role of the company in the entire industrial chain. For example, the charging operator, Trident, and our downstream vehicle, such as WeiLai, and you just mentioned LiXiang, and Xiaopeng. What is the cooperation model with them? What is the division of work and roles in the cooperation process? Thank you, management. My question is about, could you please elaborate on the role of the company in the cooperation with charging operator like T-Good, TLD, and the downstream OEMs like Li Xiang, Xiaopeng, and NIO? Thank you. Thank you for your question. In terms of who we are, we're a service provider within the industry value chain. First, in terms of some of the companies you mentioned,
spk14: for the upstream, we're partners. We're partners with, whether it's the state grid, with T-Grid, or with StarCharge.
spk05: First of all, the cooperation between Energy Power and the upstream operators. There are thousands of operators in China that are registered and operating. Energy Power provides them with a one-stop solution. So first, with regards to how we serve players in the upstream,
spk14: We have strong relationships with over 1,000 partners. And what we're essentially offering is a one-stop solution to address all their needs and problems. We can help them with site selection for the development of a charging station, additional consultation. We can help them with procurement. And this procurement extends not only to purchasing chargers and charging piles, but also with electricity procurement. We can also help with their daily operations, including full outsourcing, as well as provide additional retail, including such things as, for example, F&B and massage chairs. So ultimately, what we're offering is a single-stop solution offering everything.
spk05: So given that we provide a full menu of services through our one-stop solution,
spk14: So naturally, getting back to your question, where we position ourselves and what we offer to the players is going to be different depending on each individual player. So for example, a SME or smaller player, they may choose five or more services from us, whereas a larger player, regional player, may do the same or they may offer less services.
spk05: For downstream players such as auto OEMs, logistic companies, and other similar type large companies, we provide digital solutions and the ability to digitize. including Li-Hsiang, Future Motors, Dongfeng, LanTou, QianQian Motors, etc. The energy generation and power generation companies put together the Chinese charging operators to provide a solution for the new energy in a one-stop market. For example, a car owner bought a Dongfeng LanTou car. Through Dongfeng LanTou, he can search for a good charger in the middle of Dongfeng LanTou's car. Through Dongfeng LanTou's APP, he can start a charger to charge.
spk14: 那這些服務的背後服務商都有能量之間的因子。 So for the major auto OEMs, whether as we both mentioned, Li Xiang, Wei Lai, Dongfeng Lantian, and others, what we offer is a one-stop solution to help address their key concerns when it comes to new energy vehicles. So for example, specifically, for a purchaser of a Dongfeng Lantian automobile, they will be able to access the charger stations through their platform and their app and find the chargers that they would need in order to charge their car, addressing some of the anxieties associated with purchasing the vehicle. So in the backend for a lot of these companies, a lot of these OEMs, the real engine, if you will, that's providing the services is us.
spk05: In the future, energy-saving electricity will also do more of this kind of joint solution on the energy supply of autonomous driving. There was a survey in China. The main reason why car owners do not go to buy new energy vehicles is that they are worried that charging is not convenient enough. Energy-saving electricity and these main factories and car network together, let the car owners be able to find better charging stations faster.
spk14: Well, in the future, as we continue to expand our relationship with OEMs, we'll also participate in their self-driving efforts and offer new solutions. We can see from various surveys of potential EV purchasers that their main concern has historically been inconvenience when it comes to charging. And hence, in the future, we'll provide additional solutions to address these issues.
spk05: So to sum up, the power of energy in the entire new energy industry is a role of an industry service provider. As a connector, from the upstream installation to the operator, then to the host factory, car network, and various platform companies, the power of energy takes on the role of a connector. We are an industry service provider, so we are the first service provider in China.
spk14: To summarize, ultimately, what NAS is is an industry service provider connecting all different parts and segments of the industry, whether it's the OEMs, upstream companies, the different major platforms. We are the connector. We are the industry service provider, and we are first in providing these things to everyone.
spk05: Thank you very much for your question. I hope I was able to answer your question. Let's move on to the next question.
spk14: Thank you for your question and hope we've addressed your question. Operator, please proceed to the next question.
spk01: And our next question will come from Billing Zhu with TICC. Please go ahead.
spk12: Hi, I'm Billing Zhu from TICC. I would like to ask a simple question.
spk11: Actually, we see that the price of this market is more intense than before. 我们如何看待这个市场上的一个价格战? 主要就这么一个问题。 我也用英文简单问一下, How do we expect the price war in this market? Thank you.
spk14: Thank you for your question. So first, the Chinese market is undergoing a transition from oil to electric.
spk05: In China, we have 400 million cars and 300 million cars. According to China's car development plan, our car number is expected to reach 500 million to 600 million.
spk14: So currently, we're looking at 400 million ICE, 300 million cars. In the future, we will be reaching 600 to 700 million. Correct me if I got some of the numbers wrong.
spk00: It's okay. Okay.
spk05: China is now in the process of oil and electricity exchange. The new energy market is a new force in the market. We can understand that it is not a challenger, but a new force. So I think it's important to emphasize in the current situation that we are undergoing a transition, a transition from oil to electrics.
spk14: So on one hand, maybe we should not describe ourselves as a challenger or disruptive. But as the transition is occurring and as we have to encourage more people to adopt the new model, obviously electric prices will be affected as a result. But ultimately, growth is the key, especially in the longer term.
spk05: When we look at the comparison of cost, though, when we talk about, say, cars that are vehicles that are being used publicly,
spk14: In terms of their charging costs or their costs, it could be a quarter of gas. Now, for private cars, those that can charge, say, at home, it could be a tenth of gas.
spk05: China's charging prices will end the price war. Currently, I am working hard to... So I think as the transition is occurring, you will continue to see these trends. But before the transition ends, we do expect some of the price wars to end.
spk14: And as the saturation or penetration rate for EV vehicles as a whole in the market reaches a certain stage, we believe that the electric prices will begin to return to a more rational or normal level.
spk05: The second point is that among the 10 million smart cars that China currently sells, the ones that are currently charging in the public market are mainly for operating vehicles. The ones that are currently buying private cars, there are also a considerable part of them that have parking spaces at home or have charging stations in the community, and they do not charge in the public market. So currently, the target audience in the public market is mainly commercial cars and private cars.
spk14: I think when we look at the 10 million EVs sold in China, for a lot of public charging and for, in fact, the majority of charging, it is for, if you will, business use. So these are not private cars, but rather, shall we say, business or shared or light-hailing type vehicles. And for some of those available with private charging, we believe that will not be the mainstream. The mainstream will continue to be public and business use. Now, another way to look at the issue of pricing is that as the number of private EV vehicles increase moving away from the business, you can also see that the private vehicle owners, they are in fact not that sensitive to the price, unlike the business users, which is easy to understand. Instead, they're sensitive to things like time and the services that are available when they are charging. So they want to find that when they are charging, that there are, for example, F&B services available, that potentially they have a place to do their mail, or other ancillary services. So they're not sensitive to price. They are sensitive to whether or not there's these other things that can be provided so that they can better use their time. And these are the things that NAS is able to provide and is ready to provide right now.
spk05: So to summarize and get back to your question directly, we believe in two things.
spk14: As the market increasingly transitions from traditional ICE to EV, once the transition reaches a certain point, the electric prices will become much more rational. Also, as the number of private cars continues to increase, we should see less sensitivity to pricing for the electricity, and hence, as a result, also better pricing for the electricity.
spk02: Thank you.
spk14: Thank you.
spk01: And once again, if you would like to ask a question, please press star then 1. Once again, that is star then 1 to ask a question. And our next question will come from Siwen Gong with Katong Securities. Please go ahead.
spk13: Okay. My question is the cost advantage available to the company in centralized power procurement.
spk05: Thank you very much for your question. China's electricity trading market has been open for the past few years. In different provinces, the rules for trading thresholds are actually different. Some provinces stipulate that they can trade independently for more than 5 million degrees per year, while others have to trade through a power company like ours. Currently, we are mainly trading in two provinces, Shaanxi and Sichuan. thank you very much for the question I think first it's important to point out that the liberalization of the market
spk14: has only occurred recently in the liberalization of the electricity market. And very importantly, different provinces, they're going to have different levels of restrictions and liberalization. So some provinces, for example, you need to have a certain amount of value, say over $50 million. Others is perhaps more liberal. Currently, we are doing transactions involved in this procurement in Asahi and the Sichuan provinces. And there we have done centralized purchases where clearly we can potentially save on the procurement costs for various parties. But however, as mentioned, because there's different levels of liberalization for different provinces, you're going to see different levels of savings across different provinces.
spk05: So through this, we can lower costs for our customers and partners.
spk14: There's going to be differences depending on the usage time, safety usage, and location. And it can range very greatly from, say, several multiple lending B, or alternatively, maybe only in the sense.
spk05: We believe that actually in the bigger picture, when we look at ways of reducing the cost of procurement for electricity,
spk14: These types of centralized procurement, if you will, is only one method. Ultimately, we believe that there's other areas that will generate greater savings for our customers and partners, whether it's working with, for example, PV, photovoltaic sources, or having virtual power generation, or alternatively, other network solutions. We believe that those particular types of methods in the longer term will be the larger sources of cost savings.
spk05: I would like to share a small video I saw in our user group today. As you know, China is in a state of power outage due to high temperatures in many provinces. Today, I saw two drivers and two older brothers fighting for a charging plug. There was a physical conflict in the charging station.
spk14: So I'd like to share a little story or video that I saw earlier today in one of our user groups. So I think as many of you know, due to the current conditions in certain provinces, there are limits when it comes to the electric use. So I saw a certain video where two EV drivers, they basically got into a tussle or a fight over a single charger.
spk05: 我们可以想象一下,到了2030年,中国如果有8000万辆的新能源车,那么这些车辆每年大概需要1400亿到2000亿度电的消耗。 We can imagine that in 2030, when there are 80 million or so EVs,
spk14: At that time, you're going to need $1,400 million to $2,100 million in terms of electric charge. Correct me if I got that last number wrong.
spk10: I think the chargers we need at 2030 is about maybe 20 million.
spk14: Okay, I thought we mentioned the charging amount, but I guess we need 20 million chargers. In a few years, we're going to be looking at the requirement for 80,000 million in terms of the watts. And as a result, you're going to see tremendous pressure on the electrical grid and the networks.
spk05: So we think that the cost savings of the entire charging market in China's future is part of the large-scale electricity purchase of upstream oil. By opening upstream and downstream oil to make virtual power plants, by means of big data and AI, to promote the distribution efficiency of the entire electricity, for us, it is more important and more cost-saving.
spk14: So ultimately, when we look at the longer term and what is needed to lower costs, the upstream procurement that is needed, that is one part. But we feel that in terms of the longer term, being able to provide the virtual electric generation, better supply management through AI, and greater efficiencies within the downstream through digitalization technology, Those will actually be the bigger or the biggest cost savings. So to summarize, yes, while the current types of procurement that we are doing does lower costs for our customers, but ultimately, longer term, the bigger savings, we believe, will come from virtual power generation or virtual electric factories, as well as greater transparency and more, if you will, connections of liquidity between the downstream and upstream
spk07: Thank you for your question.
spk01: And ladies and gentlemen, that does conclude the question and answer session, also concluding today's conference call. Thank you for participating and at this time you may all now disconnect. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Bye. you Thank you. Thank you. Bye. Ladies and gentlemen, thank you for standing by and welcome to the NASS Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. I must advise you that this conference is being recorded today. I would now like to turn the conference over to your first speaker today, Ms. Gao Ying Peng, Vice President of Strategy. Thank you, and please go ahead.
spk05: Thank you, Heather. Hello, everyone, and welcome to NAP's second quarter 2022 Earnings Commerce Call. The company's results were issued earlier today and are posted online. Joining me today on the call are Ms. Cathy Wang Yang, our founder and chief executive officer, Mr. Stanley Stolle, chief financial officer, and other members of our team. For today's agenda, Ms. Wang will provide an overview of our recent performance and highlights and Mr. Dunn will discuss our financial results. Before we continue, I refer you to our State Harbor Statement in Earnings Press Relief, which applies to this call as we will make a follow-up statement. Also, please note that this call includes discussions of certain non-IFRS financial measures. Please refer to our Earnings Relief, which contains a reconsolidation of non-IFRS measures, the most drastically comparable IFRS measures. Finally, please note that unlike otherwise stated, all figures mentioned during this conference poll are in Renminbi. I will now turn the call over to our CEO, Ms. Wang Yang, whom I will translate for. Hello, everyone. I am CEO, Wang Yang, and I am happy to share with you the business situation of the 2022 second quarter and the first half of the year. First of financial situation, second quarter net revenue increased by 5.9%. In the second quarter of 2022, net total revenues increased by 47% and net revenues increased by 5.9 times, while losses only increased by 5%, reflecting our strong improvement in operational efficiency. During the first half of the year, the macroeconomic environment was complex, which based on previous data has allowed us to reduce the demand for travel. It was under these difficult circumstances that mass overall revenues continued to increase. In the first half of the year, mass offline service revenues increased by 4.3 pounds and by 5.6 pounds in the second quarter. This was primarily the result of strong increases in offline charging station service revenue and the growth in charger sales. Second, this is overview. Total charging volume reached 1.06 billion more, an increase of 160%. According to the EVCIPA, in the first half of 2002, China's public and specialized charging market volume increased by 73%. During the same period, that charting volume reached 1.016 or more, an increase of 150% year over year, representing growth that was more than double that of the overall market. As of June 30, NAP coverage extended to China's 358 primary cities, connecting 44,000 charging stations, 400,000 chargers, with a charger compound growth rate over the last four quarters of approximately 22.4 percent, and the number of active chargers increasing by 75 percent in the second quarter Now, you can like this big data, AI technologies, and comprehensive operational capabilities to work with a state-free, The China Southern Power Grid, Qigong, Subcharge, Huaiyuan, and other partners jointly help drivers quickly find quality working chargers and help relieve the Chinese EV charging market problems of over-capacity, under-utilization, and a lack of quality chargers. Zhijian, as a new energy service provider, provides a new energy solution for main airport, car network, logistics company, and large-scale Internet of Things enterprises. In the first half of 2022, Zhijian began to cooperate with partners such as E-Qi Dazhong, Shenzhen Motors, Jingdong Motors, Jing Congdian, Tencent Travel Services, etc. to sign a contract with them and provide services. In July, Zhijian reached cooperation with Ideal Motors. NAPS, as a new energy service provider, offers new energy solutions to other OEMs, other websites, logistics companies, and major internet companies. In the first half of 2022, working with our former ,, NAPS signed agreements and provided services to FDW, Volkswagen, New Horizons Auto, Ping An Auto, Shenzhen Auto Charging, and Tencent Smart Mobility. In July, NAPS reached cooperation agreement with the other. In the first half of 2022, the cost of charging the charging station was 17,840,000 yuan, which is 71% of the total growth. Due to the obvious seasonality of the charging station sales, we predict that the increase in the third quarter will be more obvious. In the first half of the year, the charging station, including 77 charging stations, provided electricity trading services and made further ecological reserves for the virtual power plant business. In the first half of the year, NASS charged sales reached $17.84 million, an increase of 71%. A charge of sales typically exhibits seasonality. We're expecting charge of sales to increase even more dramatically in third and fourth quarters. In the first half of the year, NASS provided 77 customers with electricity procurement services, enabling virtual electricity provider services to offer an additional reserve ecosystem. 第三部分是全球的新能源市場情況。 上半年全球新能源乘用車銷量增長71%, 中國新能源車保有量突破1000萬。 Third, the new energy market. In the first half of the year, globally, new electric vehicle sales increased by 71%, and China's total number of EVs reached over 10 million. In the first half of 2022, China's new passenger EV sales reached 2.34 million, representing 56% of the global total. At the end of June, China's total number of EVs reached over 10 million. In July, China's total penetration rate for new passenger EVs reached 26.7%. and over 25% in 88 cities. In August, the CPCA raised its forecast for China's total passenger EV sales for the year to $6.5 million. On August 18, State Council President Li Keqiang held a long-term State Council meeting to confirm the support policies such as new energy vehicle purchase tax, vehicle deposit tax, and consumption tax. On August 18, of the State Council at a meeting of the State Council to confirm the EV purchase tax, auto tax, and consumption tax moratorium, as well as other supported policies. The carbon neutrality is the fate of all mankind. The overseas new energy market is also on fire. In the first half of 2022, global new energy commercial vehicles sold 4.21 million, which is a 71% increase. The European Union proposed that from 2035 onward, the sale of gasoline-powered cars and light commercial vehicles will be completed by 2050. President Biden also announced that by 2030, 50% of new car sales will be zero emissions. Carbon neutrality is a core concern for all mankind, and the international new energy market is experiencing similarly rapid growth. In the first half of 2022, total global eBay sales reached 4.21 million, an increase of 71%. The European Union proposed rules examining the sales of ICE passenger vehicles and light business vehicles by 2035, and the tools achieving carbon neutrality by 2050. President Biden in the U.S. has also announced that by 2030, 50% of all new cars should be zero emissions vehicles. Currently, many countries are experiencing high-temperature challenges. Part of the region is at a higher energy risk. China has also experienced rare high temperatures. Part of the provinces have had power outages. Currently, multiple countries are facing high-temperature challenges. China is also encountering very encountered hot temperatures, causing several processes to restrict or stop electric use. As compared to the U.S. or European private charging market, China's charging market will require that public charging become the main form of charging. China's public charging market is a highly recommended market In 2030, China's total number of EVs might reach 80 million, and with a 5 to 1 charger ratio, the market may require 20 million charging piles. When the time comes, China's charging supply might face an enormous challenge. Building a smart charging network and a virtual electric provider to enable distribution and transaction represents a difficult task, but also the right thing to do. will require a company like NAS to work with everyone to improve efficiency in different parts of the market. Fourth, guidance. NAS four-year charging volume will reach over 2.7 billion volts, 2.2 times the 2021 volume. As China's first listed EV charging stock, NAS will continue to deepen our involvement and engagement in the market by providing a wide range of services, including site selection, consultation, charger procurement, electricity procurement, station operation, and station maintenance, providing a one-stop solution to all potential EV charging needs. We estimate that in the second half of this year, the battery charging capacity will rise by 99% compared to the same period last year. The total annual charging capacity will exceed 2.7 billion degrees, reaching 2.2 times that of 2021. The total annual charging capacity sales amount is expected to reach 1.3 to 1.5 billion RMB, which is 2.5 to 3 times that of 2021. We anticipate that in the second half of the year, NAS total electricity charge will increase by 99% year-over-year, reaching 2,700 GW, 2.2 times 2021's charging volume. Total charger sales for the year are expected to reach 130 to 150 million RMB, representing an increase of 2.5 to 3 times versus 2021. China's transportation carbon emissions represent 10.4% of all carbon emissions. That dream and ambition is to make energy more efficient reduce carbon emissions by 10 percent and to lower China's carbon emissions by 1 percent. Next, I'd like to invite our CFO Stanley to discuss financial performance.
spk10: Thank you, Cathy. As mentioned, we are very proud to announce our record selling quarter for our first reported quarter as a public company. In the interest of time, we will now go over each individual line of the financial statement, and instead, we'll focus on the key highlights. For additional details, please refer to our earnings press release. Our total gross revenue for the first half reached RMB 108 million, representing year-over-year growth of 90%. Net revenues grew by 4.5 times year-over-year to raise RMB 18.1 million for the first half of the year. It should also be noted that our final results were also impacted by the one-time cost associated with our merger and leasing. Our non-effort loss for the first half was RMB 140.3 million. representing year-over-year growth of 19%. Our non-offer loss rate was 130%, decreasing from 209% for the same period last year. In addition, I'm also pleased to announce that we have secured an additional RMB 400 million in financing from the China Construction Bank. The proceeds from this financing will be used to further develop our charging operations and services, as well as to improve our charger sales. With that, I conclude our prepared remarks. Operator, please proceed with the question and answer session.
spk01: Thank you. And ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star then 1 on your touch-tone phone. and wait for your name to be announced. If you wish to cancel your request, please press star then 2. Once again, that is star then 1 to ask a question. Please ask your question in Chinese. If you can, then kindly repeat the question in English. One moment, please, for the first question. And our question today will come from with Credit Suisse. Please go ahead.
spk08: Hello, Manager Ge. I am a car engineer at RuiHsing.
spk05: I would like to know more about the role of the company in the entire industry chain. For example, like the charging operator, Trident, and the car that we drive down the road, such as WeiLai, and you just mentioned LiXiang, and Xiaopeng. What is their cooperation model? What is the division of work and roles in this cooperation process? 好,这是我的问题。那我来再用英文讲一下。 So, thank you, management. My question is about, could you please elaborate on the role of the company in the cooperation with charging operator like T-Good, TLD, and the downstream OEMs like Li Xiang, Xiao Peng, and NIO? Thank you. Thank you for your question. In terms of who we are, we're a service provider within the industry value chain. First, in terms of some of the companies you mentioned,
spk14: for the upstream, we're partners. We're partners with whether it's the state grid, with T-Grid, or with StarCharge.
spk05: First of all, the cooperation between Energy Power and the upstream operators. There are thousands of operators in China that are registered and operating. Energy Power provides them with a one-stop solution. So first, with regards to how we serve players in the upstream,
spk14: We have strong relationships with over 1,000 partners. And what we're essentially offering is a one-stop solution to address all their needs and problems. We can help them with site selection for the development of a charging station, additional consultation. We can help them with procurement. And this procurement extends not only to purchasing chargers and charging piles, but also with electricity procurement. We can also help with their daily operations, including full outsourcing, as well as provide additional retail, including such things as, for example, F&B and massage chairs. So ultimately, what we're offering is a single-stop solution offering everything.
spk05: So given that we provide a full menu of services through our one-stop solution,
spk14: So naturally, getting back to your question, where we position ourselves and what we offer to the players is going to be different depending on each individual player. So for example, a SME or smaller player, they may choose five or more services from us, whereas a larger player, regional player, may do the same or they may offer less.
spk05: For downstream players such as auto OEMs, logistic companies, and other similar type large companies, we provide digital solutions and the ability to digitize. Uh, what do you think? What do you think? What do you think?
spk14: So for the major auto OEMs, whether as we both mentioned Li Xiang, Wei Lai, Dongfeng Lantian, and others, what we offer is a one-stop solution to help address their key concerns when it comes to new energy vehicles. So for example, specifically, for a purchaser of a Dongfeng Lantian automobile, they will be able to access the charger stations through their platform and their app and find the chargers that they would need in order to charge their car, addressing some of the anxieties associated with purchasing the vehicle. So in the backend for a lot of these companies, a lot of these OEMs, the real engine, if you will, that's providing the services is us.
spk05: In the future, energy-saving electricity will also do more of this kind of joint solution on the energy supply of autonomous driving. There was a study in China. The main reason why car owners don't go to buy new energy vehicles is that they are worried that charging is not convenient enough. Energy-saving electricity with these main factories and car network together allows car owners to find better charging stations faster.
spk14: Well, in the future, as we continue to expand our relationship with OEMs, we'll also participate in their self-driving efforts and offer new solutions. We can see from various surveys of potential EV purchasers that their main concern has historically been inconvenience when it comes to charging. And HESA, in the future, will provide additional solutions to address these issues.
spk05: So to sum it up, the power supply is a role of a service provider in the entire new energy industry. As a connector, from the upstream installation to the operator, then to the host factory, car network, and various platform companies, the power supply takes on the role of a connector. We are a service provider in the industry, so we are the first service provider in China.
spk14: Well, to summarize, ultimately, what NAS is is an industry service provider connecting all different parts and segments of the industry, whether it's the OEMs, upstream companies, the different major platforms. We are the connector. We are the industry service provider, and we are first in providing these things to everyone. Thank you for your question and hope we've addressed your question. Operator, please proceed to the next question.
spk01: And our next question will come from Billing Zhu with TICC. Please go ahead.
spk12: Hi, I'm Billing Zhu from TICC. I would like to ask a simple question.
spk11: Actually, we see that the price of this market is more intense than before. 我们如何看待这个市场上的一个价格战? 主要就这么一个问题。 我也用英文简单问一下, How do we expect the price war in this market? Thank you.
spk14: Thank you for your question. So first, the Chinese market is undergoing a transition from oil to electric.
spk05: In China, we have 400 million cars and 300 million cars. According to China's car development plan, our car number is expected to reach 500 million to 600 million cars.
spk14: So currently, we're looking at 400 million ICE, 300 million cars. In the future, we will be reaching 600 to 700 million. Correct me if I got some of the numbers wrong.
spk00: It's okay. Okay.
spk05: So China is now in the process of oil and electricity exchange. The new energy market is a new force in the market. We can understand that it is not a challenger, but a new force. So I think it's important to emphasize in the current situation that we are undergoing a transition, a transition from oil to electrics.
spk14: So on one hand, maybe we should not describe ourselves as a challenger or disruptive. But as the transition is occurring and as we have to encourage more people to adopt the new model, obviously electric prices will be affected as a result. But ultimately, growth is the key, especially in the longer term.
spk05: When we look at the comparison of cost, though, when we talk about, say, cars that are vehicles that are being used publicly,
spk14: In terms of their charging costs or their costs, it could be a quarter of gas. Now, for private cars, those that can charge, say, at home, it could be a tenth of gas.
spk05: China. China. China. So I think as the transition is occurring, you will continue to see these trends. But before the transition ends, we do expect some of the price wars to end.
spk14: And as the saturation or penetration rate for EV vehicles as a whole in the market reaches a certain stage, we believe that the electric prices will begin to return to a more rational or normal level.
spk05: The second point is that among the tens of millions of smart cars sold in China, the ones that are currently being charged in the public market are mainly for operating vehicles. The ones that are currently buying private cars, there are also quite a few that have parking spaces in their homes or have charging stations in the community, but they don't charge in the public market. So currently, the target customers in the public market are mainly commercial cars and private cars.
spk14: I think when we look at the 10 million EVs sold in China, for a lot of public charging and for, in fact, the majority of charging, it is for, if you will, business use. So these are not private cars, but rather, shall we say, business or shared or light-hailing type vehicles. And for some of those available with private charging, we believe that will not be the mainstream. The mainstream will continue to be public and business use.
spk05: China China China China China
spk14: Now, another way to look at the issue of pricing is that as the number of private EV vehicles increase moving away from the business, you can also see that the private vehicle owners, they are in fact not that sensitive to the price, unlike the business users, which is easy to understand. Instead, they're sensitive to things like time and the services that are available when they are charging. So they want to find that when they are charging, that there are, for example, F&B services available, that potentially they have a place to do their mail, or other ancillary services. So they're not sensitive to price. They are sensitive to whether or not there's these other things that can be provided so that they can better use their time. And these are the things that NAS is able to provide and is ready to provide right now.
spk05: So to summarize and get back to your question directly, we believe in two things.
spk14: As the market increasingly transitions from traditional ICE to EV, once the transition reaches a certain point, the electric prices will become much more rational. Also, as the number of private cars continues to increase, we should see less sensitivity to pricing for the electricity, and hence, as a result, also better pricing for the electricity.
spk02: Thank you.
spk14: Thank you.
spk01: And once again, if you would like to ask a question, please press star then 1. Once again, that is star then 1 to ask a question. And our next question will come from Siwen Gong with Katong Securities. Please go ahead.
spk13: Okay. My question is the cost advantage available to the company in centralized power procurement.
spk05: Thank you very much for your question. China's electricity trading market has been open for the past few years. In different provinces, the rules for trading thresholds are actually different. In some provinces, it is stipulated that more than 5 million degrees per year can be traded independently, while others must be traded through a power company like ours. Currently, we are mainly trading in two provinces, Shaanxi and Sichuan. Thank you very much for the question. I think first it's important to point out that the liberalization of the markets
spk14: has only occurred recently, as in the liberalization of the electricity market. And very importantly, different provinces, they're going to have different levels of restrictions and liberalization. So some provinces, for example, you need to have a certain amount of value, say over 50 million. Others is perhaps more liberal. Currently, we are doing transactions involved in this procurement in Asahi and Sichuan provinces. And there we have done centralized purchases where clearly we can potentially save on the procurement costs for various parties. But however, as mentioned, because there's different levels of liberalization for different provinces, you're going to see different levels of savings across different provinces.
spk05: So through this, we can lower costs for our customers and partners.
spk14: There's going to be differences depending on the usage time, safety usage, and location. And it can range very greatly from, say, several multiple lending B, or alternatively, maybe only in the sense.
spk05: We believe that actually in the bigger picture, when we look at ways of reducing the cost of procurement for electricity,
spk14: These types of centralized procurement, if you will, is only one method. Ultimately, we believe that there's other areas that will generate greater savings for our customers and partners, whether it's working with, for example, PV, photovoltaic sources, or having virtual power generation, or alternatively, other network solutions. We believe that those particular types of methods in the longer term will be the larger sources of cost savings.
spk05: I also want to share a small video I saw in our user group today. As you all know, China is now in a state of power outage due to high temperatures in many provinces. Today, I saw two drivers and two older brothers fighting over a charging plug. There was a physical conflict in the charging station.
spk14: So I'd like to share a little story or video that I saw earlier today in one of our user groups. So I think as many of you know, due to the current conditions in certain provinces, there are limits when it comes to the electric use. So I saw a certain video where two EV drivers, they basically got into a tussle or fight over a single charger.
spk05: So we can see that, or we can imagine that in 2030, when there are 80 million or so EVs,
spk14: At that time, you're going to need $1,400 million to $2,100 million in terms of electric charge. Correct me if I got that last number wrong.
spk10: I think the chargers we need at 2030 is about maybe 20 million.
spk14: Okay, I thought we mentioned the charging amount, but I guess we need 20 million chargers. In a few years, we're going to be looking at the requirement for 80,100 million in terms of the watts. And as a result, you're going to see tremendous pressure on the electrical grid and the networks.
spk05: So we think that the cost savings of the entire charging market in China's future is one of the major electricity purchases on oil. By opening up and down oil to make virtual power plants, by means of big data and AI, to promote the distribution efficiency of the entire electricity, for us, it is more important and more cost-saving.
spk14: So ultimately, when we look at the longer term and what is needed to lower costs, the upstream procurement that is needed, that is one part. But we feel that in terms of the longer term, being able to provide a virtual electric generation, better supply management through AI, and greater efficiencies within the downstream through digitalization technology, those will actually be the bigger or the biggest cost savings. So to summarize, yes, while the current types of procurement that we are doing does lower costs for our customers, but ultimately, longer term, the bigger savings, we believe, will come from virtual power generation or virtual electric factories, as well as greater transparency and more, if you will, connections of liquidity between the downstream and upstream.
spk07: Thank you for your question.
spk01: And ladies and gentlemen, that does conclude the question and answer session, also concluding today's conference call. Thank you for participating. And at this time, you may all now disconnect.
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