NaaS Technology Inc.

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.

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.

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.