Chunghwa Telecom Co., Ltd.

Good afternoon, ladies and gentlemen. Welcome to Zhonghua Telecom conference call for the company's first quarter 2026 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 question and answer session. For your information, this conference call is now being broadcast live over the internet. Webcast replay will be available within an hour after the conference is finished. please visit the CHT IR website, www.cht.com.tw slash IR, under the IR calendar section. Now I would like to turn it over to Ms. Angela Tsai, the Vice President of Finance. Thank you. Ms. Tsai, please go ahead.

Thank you. I'm Angela Tsai, Vice President of Finance, Zhonghua Telecom. Welcome to our first quarter 2026 earnings conference call. Joining me today are Chonghua's President, Rongxi Lin, and our Chief Financial Officer, Aoqi Xu. During today's call, management will begin by sharing our recent strategic achievements and providing an overview of our first 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 statement 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 first quarter 2026 Result Conference Call. To begin, we are pleased to announce that our 2025 cash dividend per share is set to NT dollars 5.2. with a payout ratio of 104.2%, reflecting both our confidence in operation performance and the commitment to shareholders. For 2026, we are glad to see strong financial performance of the first quarter, with all metrics exceeding quarterly guidance. Our revenue for this first quarter hit a record high for any first quarter since 2012. mainly driven by outstanding ICT revenue growth. In addition to our strong mobile and fixed line performance, our operation income, net income, and EPS in the first quarter further evident elevated on a healthy upward trajectory. This represents a very positive start to the year. Given the steady business growth in 2026, we plan to further deploy resources for capturing pre-6G and AI-related opportunities. In the mobile front, we will continue our gradual construction of 5G standalone network. The SA deployment in our plan is a necessity to transition to 6G and will be progressively rolled out in phases. Based on demand, Certain select verticals, such as unmanned vehicle and autonomous driving, are using SA Network. In addition, we are extending SA deployment to high-traffic areas to support commercial demands and events like exhibitions, sport games, and art performances. Another important development in 2026 is the utilization of agentic AI. Building on the generative AI catalyst initiatives launched internally in 2025, we further expanded the use of agentic AI to enhance operational workload and upgrade our service offering. From a revenue perspective, we continue to monetize our AI infrastructure, delivering solid revenue growth, particularly driven by AI data center. On the technology front, we would like to highlight our self-developed CHP AI factory platform by integrating deep flow solutions, compute power, and a portfolio of AI models and agents The platform not just supports the development of our own enterprise co-pilots through various AI agents, but also enables us to offer AI-enabled applications to enterprise customers, including smart home ecosystem and smart manufacturing in 2026. We remain confident in the growth potential of this AI-enabled solution. Finally, in the first quarter, alongside our technological leadership, we remain equally dedicated to setting new global ESG benchmarks. We retained our MSCI ESG rating of AAA in 2026, underscoring our position as the top-tier telecom with the highest scores among global peers by April. In February, One year ahead of regulators' requirement, we successfully became the first in Taiwan to file a group-based sustainability-related financial information of 2025, fully compliant to IFIS Standard 1 and Standard 2, representing our transparent ESG financial disclosure. In addition, at the forefront of the industry, we ranked in the top 5% of the S&P Global Sustainability Yearbook for the fourth consecutive year and maintain our position in the Dow Jones Best-in-Class World and Emerging Market Indices. Furthermore, we secure our third consecutive A ranking from the CDB survey, maintaining the time main leadership position. Now let's move on to our first quarter, 2026 results. Please turn to page five for our success in Taiwan's mobile market. In the first quarter, we continued our market share leadership in Taiwan's mobile market. According to data from our telecom regulator, our mobile revenue market share rose to 41.1%, a historic high, while our subscriber share among peers climbed to 39.7%, mainly driven by the continued growth in the post-pay subscribers and the strong roaming performance in the quarter. Our 5G performance was equally impressive. Based on regulators' data, our 5G subscriber market share was up to 39.4%. Maintaining our industry leading position, the 5G penetration rate among our smartphone users further increased to near 48% by this March, while the average month fee uplift from 5G migration slightly decreased to 36% due to a one-time factor. With the combined strength of our expanding subscriber base and the growing 5G adoption, our mobile service revenue growth outpassed the industry, achieving an exciting 4.4% increase year-over-year. Postpaid outputs are also grouped by 3.6%. 20 NT dollars on a year-over-year basis. 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 first quarter, we are glad to see the number of subscribers Adopting service speed of 300 megabits per second and above reached 40% of our total fixed broadband subscriber base, which is encouraging. As a result, our fixed broadband revenue in the first quarter caused a 3% increase year-over-year, while our pool obtained a year-over-year raise of $20 to $20. NT 818 per month. Fixed broadband subscribers deliver the positive growth year over year. Going forward, we will continue to promote high-speed services, such as 500 Mbps and 1 Gbps and above, to further enhance our customer profile and gain incremental output. Page 7 highlights the performance of our million subscriber consumer services. The first growth driver was our multiple play offering, which integrates mobile fixed broadband and Wi-Fi services. Subscription surpassed the milestone of one million in the first quarter, representing a 15% year-over-year growth. Notably, our Wi-Fi penetration among fixed broadband subscribers reached 55%, reflecting our significantly enhanced in-home coverage, anchoring customer loyalty, and driving sustained output expansion. The most encouraging performance was recorded in our video business thanks to the excitement around the 2026 or the best ball classic in the first quarter. Total video subscribers, including MOD and Hami Video, recorded a 6% quarter-over-quarter increase, successfully exceeding 3 million subscribers. Meanwhile, Hami Video APU also demonstrated encouraging double-digit growth year-over-year. Looking ahead, As we are preparing for the upcoming FIFA World Cup in the second quarter and the Asia game in the third quarter, we plan to leverage long-term subscription offering and sustain user engagement across consecutive major sports events throughout the year. Lastly, our digital service delivered two additional million subscriber milestones The subscriber number of our consumer cybersecurity services maintained above 1 million during the quarter, while the number of transaction users of our DCB services also exceeded the 1 million threshold during the same period, reflecting the sustainable growth momentum of our digital ecosystem. Slide six illustrates the key development in our enterprise ICT business. With the group collaboration, our group ICT revenue in the first quarter increased 25% a year due to continued expansion of the emerging services. Recurring ICT revenue also grew by 11%, maintaining strong growth momentum across all major services line. particularly cybersecurity, IDC, and international public cloud services. Among our core ICT services pillars, IDC, cloud, and AIoT continue to be the key growth drivers, posting year-over-year growth of 29%, 43%, and 26% respectively. ITG revenue was mainly driven by the installation projects from manufacturing companies. Cloud revenue received contributions from government taxation projects, and the smart environment solutions continue to support AIoT revenue growth. In addition, on a year-over-year basis, our big data service revenue grew by 8%. and the 5G private network services revenue surged, both thanks to project revenue recognition from both domestic and international public sectors. However, revenue from cybersecurity services declined due to the high comparison base last year. We are even more proud to share that our ICD order in tech in the first quarter recorded a new high with country value amounting to NT$20 billion, mainly representing opportunities from network resilience project and the large follow-on project on national fisher and surveillance system. Notably, the value of the smart surveillance project obtained exceeded NT$1 billion, underscoring our number one market leadership position in surveillance services. In addition, our home ground AI traffic flow, identification, and analysis technologies continued to win us smart transportation projects, while our subsidiary, NextBank, also worked with us to leverage our telecom data on loan decisions Both represent replicable solutions for more future projects in specific verticals. Slide 9 highlights the robust performance of our international subsidiaries. In the first quarter, international subsidiary revenue grew 20% year-over-year, mainly driven by major ICT project delivers across the United States and the Southeast Asia market. Specially, U.S. revenue surged 89% year-over-year, driven by successful revenue recognition of large-scale AI supply chain projects, while Southeast Asia revenue increased 16% year-over-year due to contributions from a fast construction project at a key customer facility in Singapore, we continue to secure large-scale project countries in the United States while extending this proven expertise into Southeast Asia. Starting from this quarter, we are pleased to report our financial return from network resilience deployment in In the first quarter, our satellite service revenue increased 16% year-over-year, stemming from our satellite connectivity solution across multiple sectors, including government, multinational enterprise, high-tech, and offshore energy industry. Additionally, revenue of international private list circuits or IPRC rose 6% year-over-year, mainly driven by the recurring revenue contribution from our SDG2 and APRICOT submarine cables starting from the previous quarter. Excitingly, to meet surging connectivity demands, we expanded the capacity of AUG East submarine cables by an additional 18 terabits per second spanning routes from Taiwan to Japan and Taiwan to Singapore. The expansion is expected to support medium to long-term bandwidth demands across Asia and serve as a key driver of long-term revenue growth. Now let's move on to page 10 for the financial performance of our three business groups. In the first quarter, thanks to steady revenue growth in mobile and fixed broadband services plus higher sales revenue driven by the strong iPhone demand, our consumer business group delivered a robust 6.2% year-over-year revenue increase and a solid 5.3% year-over-year income before tax increase. Bordering underpins the group's outperformance. For Enterprise Business Group, its revenue rose by 8.5% year-over-year, driven by strong ICT business and growth in mobile and fixed broadband services. However, its income before tax dropped by 2.7%, mainly due to fixed voice service decrease, which offset the growth in ICT business, as mentioned earlier. For international business group, both of his revenue and income before tax grew positively by 10.7% and 1.6% respectively, driven by the rising ICT service demand from the overseas AI supply chain, together with stronger roaming performance. That concludes the business overview of the first quarter. Now I would like to hand the call over to Audrey for the financial comments.