Chunghwa Telecom Co., Ltd.

Good afternoon, ladies and gentlemen. Welcome to Zhonghua Telecom conference call for the company's second quarter 2025 operating results. During the presentation, all lines will be on listen-only mode. When the briefing is finished, directions for submitting your questions will be given in the Q&A session. And for your information, this conference call is now being broadcasted live over the Internet. A webcast replay will be available after the conference is finished. Please visit CHT IR website, www.cht.com.tw slash IR under the IR calendar section. And now I would like to turn the call over to Ms. Angela Tsai, Vice President of Financial Department. Thank you. Ms. Tsai, please go ahead.

Thank you. I'm Angela Tsai, Vice President of Financial Departments for Zhonghua Telecom. Welcome to our second quarter 2025 result conference call. Joining me on the call today are our President, Rongxi Lin, and our Chief Financial Officer, Audrey Xu. During today's call, management will begin with the recent strategic achievements and provide an overview of our business in the second quarter, followed by a discussion of our segment performance in the financial results. After, we will move on to the question and answer portion of the call. On slide two, please read our disclaimers and notes concerning forward-looking statements. Now, I will turn the call over to President. President Lin, please go ahead.

Thank you, Angela, and hello, everyone. Welcome to our second quarter 2025 results conference call. We are pleased to report our exceptional financial results with revenue operating income net income and EPS exceeded the upper end of our forecast. For both the second quarter and the first half of the year, second quarter revenue reached a 10-year high for the same period, fueled by the solid growth momentum of the core business and expanding ICT segment. Notably, ICT revenue also set a new record for any second quarters since 2021. These achievements underscore our strong commitment to innovation, operational excellence, and delivering sustained value to our stakeholders. Meanwhile, I'll continue to execute our Sea, Land, and Sky strategy to enhance network resilience and assist future opportunities. In July, we officially launched the Southeast Asia Japan Cable 2, STC2, enhancing network performance across the Asia-Pacific region and supporting the rapid growth of bandwidth-intensive applications such as AI and cloud computing. In addition to the previously announced investment in E2A, the Trans-Pacific undersea cable connecting Asia to North America We announced to invest in New Asia United Gateway AOG East Submarine Cable in July, which connects the Asia and is expected to bring in revenue after its completion in 2029. In terms of our multi-orbit satellite business, in the second quarter, China Telecom not only obtained the new exclusive commercial license for OneWeb LEO services, but also extend the satellite services to broader use, including the in-flight Wi-Fi services for aviation industry and the applications for maritime industry. Moreover, for the land, we have partnered with NTT to successfully present the world's first cross-border co-performance conducted in both Taiwan and Osaka. At the same time, through ION, the old photonics network in X-Pro 2025, demonstrating the ultra-low latency and its application. Notably, we are honored to receive the highest MSCI ESG rating of AAA in May. The only Taiwan telecom to be recognized the highest rating, reflecting our strong performance in governance and data privacy and carbon management. We also earned the prestigious 2025 Taiwan Data Center Service Competitive Strategy Leadership Award from Foster Sullivan, recognizing our AI-ready data center capability. In addition, our longstanding commitment to corporate governance was reaffirmed by the Taiwan Stock Exchange, which recognized us as one of the top 5% of listed companies Now let's move on to the business overview of the second quarter of 2025. Please turn to page 5 to review our success in Taiwan mobile market. In the second quarter, we further strengthened our leadership position in Taiwan mobile market. According to the data from Taiwan's telecom regulator, our mobile market share rose to 40.7% as of June. reaching a new high. We also achieved the highest subscriber share among peers at 39.1%, driven by the continued growth of post-pay subscribers. Both revenue and subscriber shares increased year over year, highlighting our solid and sustained growth momentum. Our 5G market share reached 38.7%, Maintaining our leading position in this segment, supported by robust network quality, the ongoing expansion of our subscriber base, and continued 5G migration, mobile service revenue grew approximately 2% year-over-year. Additionally, the average month fee increased by 38% as more users upgraded to 5G, helping stabilize mobile output. which delivered a modest quarter-over-quarter increase in the second quarter. Let's move on to slide six for update of our outperforming fixed broadband business. In the second quarter, our fixed broadband revenue increased 1.8% year-over-year, driven by the success of our strategic bundle plan and our distinguished offerings of symmetrical uplink and downlink speeds for service above 300 Mbps. Six broadband R2 also rose approximately 2% on years as well, representing an increase of $14 per month, an encouraging sign of value expansion. Our cross-tier upgrade promotions featuring bundled plans such as MOD, Wi-Fi, and streaming services, continue to perform well. Nearly 70% of adopters opted for plans with speeds of 300 Mbps and higher, including 1 Gbps services. As a result, the number of subscribers with speeds of 300 Mbps and above increased by 14% year-over-year, while those with speeds of 1 Gbps subscription multiplied impressively. Building on this momentum, we will continue promoting strategic bundling to support ARPU growth. We also plan to incentivize existing mobile subscribers to add fixed broadband services, further expanding our market share. Slide 7 provides a deeper overview of highlights from our consumer application services. In the second quarter, we were pleased to see solid growth across all consumer service categories. Our multiple-player packages, which integrate mobile fixed broadband and Wi-Fi services, achieved impressive year-over-year growth of 26%, marking it its 14th consecutive quarters of expansion. This momentum was largely driven by the successful launch of new fixed broadband promotion bundles in May. Our video business also maintained its strong growth trajectory with total subscriptions increasing 6% and the revenues increased 5% on a year's basis. This was fueled by the growth of Hami video subscribers, particularly among users seeking live-spot content. Additionally, our exclusive investment in Taiwanese dramas and the broadcast of Korean variety shows has attracted a wider user base. With a robust pipeline of new content scheduled for release we are confident in accelerating user growth in the second half of this year. Meanwhile, our consumer cybersecurity services recorded a 20% year-over-year growth, contributing to steady revenue gains in line with our expectations. This performance was driven by our service offering to assist users and families to block malicious links filter appropriate content, and manage internet serving scheduling. Slide A illustrated the key highlights in our enterprise ICT business. In the second quarter, we are excited by the strong performance of enterprise ICT business, group enterprise ICT revenue, increased by 27% year-over-year, with recurring ICT revenue also rising 25%. Both were encouraging results. Our core service pillars, including IDC, AIOT, and cloud, remained the primary revenue drivers, delivering robust year-over-year growth of 40%, 71%, and 40% respectively. Cybersecurity and 5G private networks also reported healthy growth of 11% and 150% respectively. A close look shows that demand from the financial and high-tech sectors continue to significantly contribute to the increase in IDC and cloud revenues. In the second quarter, ITC not only accounted for the largest share of absolute revenue growth, but also demonstrated strong future growth potential. Meanwhile, AIoT service saw a sharp revenue increase, largely driven by projects related to smart energy, smart surveillance, smart building, and smart transportation. Our 5G private network deployment for the national Cultural Center and the Exhibition Hall delivered a year-over-year revenue increase at 1.5 times, while cybersecurity revenue rose 11% in response to growing market demand. Among the newly secured projects in the second quarter, a highlight was our deployment of building remote surveillance platform for correctional institution nationwide. This project integrated the IDC cybersecurity, AIoT, and the VPN capabilities to support their smart surveillance operation. We were also proud to share that our AIDC AI data center construction expertise continue to win recognition both domestically and internationally with new contract awards exceeding $80 billion during this quarter. Lastly, we signed contracts to assist leading petrochemical companies to implement AI-powered image recognition and automatic optical inspection. This solution is expected to expand to other chemical-related sectors, generating additional revenue opportunities going forward. Slide 9 illustrated our international subsidiaries' performance. In the second quarter, revenue from our international subsidiaries declined by 41% year-over-year, primarily due to the project-based fluctuations resulting from the one-time revenue recognition from the U.S. and Japan subsidiaries for the same period last year, excluding the higher sector, their performance actually exceeded our internal expectation for the second quarter. On the other hand, Southeast Asia market delivered double-digit revenue growth driven by the continued demand for the ICT services from high-tech companies. We are pleased to have secure ICT solution contracts in Vietnam and Singapore, which are expected to support continued growth in the region. While global market sentiment remains cautious amid ongoing uncertainty around tariffs and exchange rates, we continue to invest strategically for long-term growth in the United States, Japan, and Southeast Asia. In particular, we are targeting overseas AIDC-related construction projects for Taiwan-based high-tech firms leveraging our proven capabilities in both air cooling and liquid cooling solutions. Now let's move on to the performance summary of our three business groups. As mentioned in the beginning, our revenue and profit performance were all better than expected. In line with these results, In the second quarter, our CBG delivered a solid year-over-year increase of 4.8% in income before tax, driven by steady growth in both mobile and fixed broadband output. In addition to stable performance of our core service revenue, CBG also benefited from higher smartphone sales as consumers accelerated the purchase in anticipation of potential tariffs fluctuation. Our EBGs exceeded expectations with strong ICT performance. Total revenue rose 12% year-over-year, while ICT revenue grew even more significantly, up 37% year-over-year. As a result, EBG reported a robust 5.4% increase in income before tax during this quarter. In contrast, our IBG first headwinds revenue and income before tax both declined year over year, primarily due to softening demand for international fixed voice services and a decline in international roaming services. Now I would like to hand the call over to Audrey for financial updates.