Chunghwa Telecom Co., Ltd.

Good afternoon, ladies and gentlemen. Welcome to Zhonghua Telecom conference call for the company's fourth 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 within an hour after the conference is finished. Please visit CHT IR website at 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 begin.

Thank you. I'm Angela Tsai. Vice President of Finance at Zhonghua Telecom. Welcome to our fourth quarter 2025 earnings conference call. Joining me on the call today are Zhonghua's President, Yongxi Lin, and our Chief Financial Officer, Audrey Xu. During today's call, management will begin by sharing our recent strategic achievements and providing an overview of our fourth quarter business results. This will be followed by a discussion of our segment performance and financial highlights. We will then open the floor for questions and answers. Please turn to slide two to review our disclaimers and forward-looking statements, disclosures. Now, without further delay, I will turn the call over to our president. President Lin, please go ahead.

Thank you, Angela. And hello, everyone. Welcome to our fourth quarter, 2025 Result Conference Call. To begin, I am pleased to report our exceptional financial performance for 2025. Driven by our dedicated efforts, Zhonghua Telecom's revenue, operating income, income before tax, and EPS for 2025 all exceeded the upper end of our guidance, reflecting our strong execution and market-leading position. On the revenue front, our full-year our revenue reached an all-time high, demonstrating our continued focus on strengthening our core businesses and active expansion in the ICT sector. Notably, our full-year EPS of NT4.99 marked an eight-year high, extending our annual growth momentum for the sixth consecutive year This milestone underscores our commitment to driving innovation and enhancing long-term shareholders' value. Based on the strong auto performance in 2025, we are entering 2026 with confidence. For our telecom businesses, we see Taiwan's mobile market remaining stable and favorable to us as the market leader. We are also pleased with our fixed broadband performance and will extend the successful existing strategy for further ARPU enhancement. In terms of ICT business, our technology capability will continue to remain cutting-edge to support future growth. A particular highlight is our centralized opportunities. as we believe demand of satellite services as the communication backup solution will increase with our satellites of OneWeb and SES commencing operation in 2025. The Australian satellite will join in second half of 2026 to enhance our multi-layered satellite capability. Furthermore, we will also focus on extending pre-6G related opportunities in AIoT, etc., and the big data services. and expect their combined revenue to surpass the $10 billion in 2026. We particularly expect to convert our AI capabilities into our service offering. We expect to assist our customer to integrate AI into their operational processes, legal compliance, and infrastructure management. In addition, as a leader in AI drive connectivity, we are introducing AI edge computing into our AIDC to create a new revenue stream alongside our continued construction in 2026. Ultimately, in the fourth quarter, we were honored with multiple awards recognizing both our ESG accomplishments and the technical acknowledgments. We won the SSJET Award for Corporate Sustainability Leadership for the fifth time, received the Silver AI Innovation Award and the World Communication Awards for our smart customer services solution, and was recognized as the only Taiwanese telecom company on this week's World's Most Trustworthy Companies 2025 list. More importantly, We have secured 4.6 billion kilowatt-hour of renewable energy through a 20-year corporate power purchase agreement, CPPA, to support our 2045 net zero commitment. Now let's turn to our fourth quarter 2025 result. Please read to page four for the business overview. Please turn to page five to review our success in Taiwan mobile market. In the first quarter, we solidified our leadership position in Taiwan's mobile market for 2025 with record highs across all dimensions. According to data from our telecom regulator, our mobile revenue market share climbed to unprecedented 41%. while our subscriber market share rose to 39.7%, mainly driven by continued growth in the post-pay subscriber. We are pleased with this strong result. Our 5G performance was equally impressive. Based on regulators' data, our 5G subscriber market share increased to 39.2%, Further solidifying our industry-leading position, the 5G penetration rate among our smartphone users climbed to 46.4% by the end of 2025, while the average monthly fee uplifted from 5G migration remained robust at 41%. Given this solid momentum, we were especially encouraged by our strong mobile service revenue growth in the first quarter, which achieved a recent record high of 4.7% year-over-year. Post-pay approval also grew 3.6% year-over-year. We expect this positive trajectory to continue, supported by Taiwan's favorable mobile market landscape. Let's move on to slide six for our fixed broadband business update. In the fourth quarter, our fixed broadband, ARPU, continued its upward trajectory, reaching a new high of NT$819 per month. This represents a 3.8% increase in revenue and a 0.5% increase in subscribers year-over-year. This strong result was driven by our high-speed upgrade promotion and MOD bundle packages, which successfully boosted customer adoption of higher-key plans. Subscribers' choosing speed of 300 Mbps and above grew by 13% year-over-year, while those opting for 500 Mbps and above recorded double-digit growth, and the subscription for 1 Gbps and above doubled in the fourth quarter. Service 7 provides a detailed overview of the highlights from our consumer application services. In the fourth quarter, our multiple play packages, which integrate mobile fixed broadband and Wi-Fi services, increased by 17% year-over-year, matching the 16th consecutive quarter of expansion and representing the collective growth momentum of our customer business group. In 2025, despite the absence of major global sporting events broadcasting, resulting in overall subscription loss, our Hami Video service demonstrated solid resilience as its output increased by more than 25% year-over-year in the fourth quarter, Looking ahead with the launch of Disney+, Bungle This January, and our ongoing partnership with Netflix, coupled with the exciting pipeline of popular sporting events such as the FIFA World Cup, Asia Games, and etc., we expect to drive further revenue growth throughout 2026. Meanwhile, our consumer cybersecurity subscription recorded 11% year-over-year growth, with revenue also achieving double-digit gains, contributing to the steady growth for our consumer business group. Slide eight illustrates the key development in our enterprise ICT business. In the first quarter, Our group's ICT revenue declined due to a higher comparison base in the same period of last year, though our full-year ICT revenue still recorded robust year-over-year growth. Meanwhile, our recurring ICT revenue grew 15% year-over-year, continuing to show strong momentum. supported by increases across all major service lines, particularly contributions of AIoT, IDC, and international public cloud services. Looking at the specific service categories, revenue from IDC, Big Data, and 5G private network grew by 19%, 3%, and 88% year over year respectively. ITC performance benefited primarily from project completion in Mexico, while big data service revenue increased driven by its recurring revenue growth. Revenue from 5G private network surged, supported by the project revenue recognition from both public and private sector customers. However, revenue from cloud and AIDC business declined by 16% and 27% year-over-year respectively due to a high base last year. Our cybersecurity services revenue also decreased by 16% year-over-year as the majority of our cybersecurity revenue for 2025 had already been recognized in three quarters. Notably, despite the quarterly frustration, both cloud service and cybersecurity business still deliver full-year revenue growth. We are also proud to share that we secure an AI customer service solution to build the first integrated AI customer services system for a leading financial institution in Taiwan. Furthermore, we secured a flagship government system integration project to upgrade the labor insurance platform to next-generation infrastructure with a contract value exceeding NT3 billion. In addition to further leverage our sea, land, and sky network deployment and expand our satellite business scale, we successfully incorporated with incorporated our satellite services as part of the government's joint procurement contract framework, paving the way for more long-term service contracts from government agencies. Lastly, our deployment of remote surveillance platform for correctional institutions nationwide brought us five additional new projects in the first quarter with a total contract value nearing NT150 million. We expect to further replicate and scale this success in the coming year. Slide nine illustrates the performance of our international subsidiaries. In the first quarter, our international subsidiaries Revenue decreased 7% year-over-year, mainly due to sovereign demand for voice services as well as higher comparison bets in the United States and the Japan ICT market last year. However, we were glad to see a 12% year-over-year in North Asia and Southeast Asia. Asia market as we completed the multiple planned construction project in Singapore and Thailand, a trend that we expect to continue through 2026. Notably, our Malaysia subsidiary commenced operations in December 2025, aiming to provide more timely high-efficient ICT integration services for Taiwanese and multinational enterprises in the growing Southeast Asia market. Look ahead of 2026, we maintain a relatively optimistic outlook for our global market development as we have secured several AI supply chain projects in the United States in our pipeline. including key projects in Texas and California, which is expected to significantly boost our U.S. market performance in 2026. Now let's move on to page 10 for the financial performance of our three business groups. In the first quarter, our CDG delivered a robust 6% year-over-year revenue growth, supported by steady and fixed broadband services, plus higher sales driven by the iPhone demand. However, its income before tax slightly decreased, mainly dragged by the final phase of 3G telecom equipment impairment. which has fully recognized in the first quarters and a higher comparison base from government subsidies recorded in the same period last year. Our EVG revenue decreased by 7.9% year over year, as most of our major ICD project has already been recognized in previous quarters, resulting Relating a 7% year-over-year drop in the EBG ICT revenue, income before tax was also impacted by the one-time impairment mentioned earlier. Encouragingly, EBG mobile and fixed broadband services, as well as its satellite services, still deliver solid growth momentum this quarter. As for our IBG business, revenue grew by 2.5% and income before tax increased by 1.8% year over year, driven by rising demand for the international IDC services and a stronger roaming revenue. Furthermore, we are pleased to report that our summary tables, S-2 and the first phase of APRICOM were completed this quarter and further boosted the IBG's fixed-line services revenue by 20.2% year-over-year. Now I would like to hand the call over to Audrey for financial updates.