Ladies and gentlemen, thank you for standing by, and welcome to the NaaS Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions]. 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. Cynthia Tan, Senior IR Director. Thank you, and please go ahead.

Thank you, operator. Hello, everyone, and welcome to NaaS Fourth Quarter and Full Year 2022 Earnings Conference Call. The company's results were shown earlier today and are posted online. Joining me today on the call are Ms. Kathy Wang Yang, our Chief Executive Officer; and Mr. Alex Wu, our President and Chief Financial Officer. For today's agenda, Ms. Wang will provide an overview of industry trends and recent performance highlights, and Mr. Wu will discuss our operating and financial results. Before we continue, I refer you to our safe Harbor Statement in the earnings press release. which applies to this call as we will make forward-looking statements. Also, please note that this call includes discussion of certain IFRS financial measures. Please refer to our earnings release which contains a reconciliation of non-IFRS measures to the most comparable IFRS measures. Finally, please note that unless otherwise stated, all figures mentioned during the conference call are in RMB. I will now turn the call over to our CEO, Ms. Kathy Wang Yang.

Hi. Good morning, everyone. I hope you are great. I'm Kathy Wang, the CEO of NaaS. It's my pleasure and such honor to share NaaS' Fourth Quarter and the Full Year of 2022 Earnings Result. Discuss our recent development with all of you. Firstly, I'd like to discuss with you the long-term trend of energy transformation as well the potential for new energy development and the content of the global consensus on carbon neutrality. Elon Musk recently announced Part 3 of Tesla's master plan as you may be aware. In a nutshell, this is a plan for fully replaced traditional energy with the new one. The traditional energy face issues of environmental pollution and low efficiency, while new energy offer clear advantage in terms of being clean, environmentally friendly, safe and efficient. The energy transition is inevitable global trend. So developing clean energy, reducing carbon emissions and building a green plant have become the most significant area of conscious among countries throughout the world, including China, the United States, Europe and the Middle East. EV sales in China reached 3.9 million units in 2022, accounting for 30% of total global sales. This year, that number is impacted to reach 9 million. According to CIC, the number of ICE cars in China will be peaking around 2025. While e-results will continue to grow, and the number of EV surpassed ICE cars by 2036. The total number of cars in China, is predicted to exceed 424 million by 2050, with the number of EVs over 328 million. At the same time, the total investment in the supporting EV-charging industry will exceed RMB 30 trillion. In 2022, China use to the global leader in terms of the existing number of EV cars, EV incremental growth and EV export volume. 2022 was also an important year for NAV. As we complete our netback lifting and strengthened our leadership position and charging service network. In 2022, our Chinese charging network expanded rapidly with a year-over-year rise in total charging volume of 115%, accounting for 20% of China's total public charging volume. At the end of 2022, we had connected 515,000 chargers in 50,000 charging stations across over 330 cities. We take advantage of this [ drone ] in re-charging network. We expand our one-stop service to energy outside operation, providing end-to-end one-stop solutions covering the whole cycle of charging station construction, operation and upgrading. Serving enterprise throughout the new unit value chain. Looking ahead, as the leading player in the world's largest EV market, we aim to see the historical opportunities of energy transformation by leveraging our unique business model and the industry position and commit to working together with partners to promote core initial reduction in transportation and have to the goal of carbon PP and neutrality. Now I will turn the call over to Alex our President and CFO, for a closer look at our operating and financial performance.

Thank you, Kathy. Hello, everyone, and thank you for joining our call today. Our strong performance in the fourth quarter capped off a year of rapid growth for NaaS. Riding on the tailwinds of the explosive EV market we continued to solidify our leadership across our charging service network and significantly scaled our client base for our one-stop charging solutions, nearly doubling our net revenues year-over-year in the fourth quarter. To effectively address the industry's pain points, NaaS offers one-stop services including online and off-line charging solutions and other innovative businesses for charging stations, auto OEMs and other enterprises across the new energy value chain. Thanks to strong customer endorsement of our one-stop EV charging solutions, our net revenues increased by 177% year-over-year in the full year of 2023 -- 2022 to RMB 92.8 million. Online charging services are the cornerstone of our business. Our high-quality services aided by network effects have driven our rapid market share expansion in the EV charging service industry. In 2022, gross transaction value through NaaS network reached RMB 2.7 billion, representing an increase of 119% year-over-year, with net take rate expanded by 3.74 bps. Building on the foundation of our EV charging network, we focused on expanding our services to provide one-stop EV charging solutions, which cover each stage of our translation life cycle. These range from construction to operation and upgrades, and there will be our growth engine and source of profitability going forward. Since 2022, we have made significant strides in our business across these stages, gathering recognition from an increasing number of customers with offline EV charging solutions, contributing 44% of our revenue in 2022. In the construction stage, we leveraged our big data backed industry insights, operational expertise and strong execution to offer site selection, hardware and software procurement and…

[Operator Instructions] Your first question is from Yixan Du from CICC.

Yes, yes. This is Yixan from CICC. Maybe first, congratulations for the great performance in the last year. And I have two questions for our future development. The first one is about the offline EV charger solutions. And I'm curious about the guidance of the liabilities. In other words, what do you think of the revenue growth of offline business in this year and next year. Besides, we all know that there are several different parts in the offline business. Which 1 or 2 or 3 parts do you think would support this growth? this is the first question. And my second question is about your EV charging robots. You know that EV charging robots is a very popular topic within China. And we see that we launched the lab smart charging robot, way to go what do you think of the application scenario and market space of this new project, you mentioned it just now that oh we need more details as this is my two questions.

Thank you, Yixan, for your questions. Let me address them one by one. So, first question about the offline business space. I think let me reiterate what are some of the services that we provide to our customers in the offline space. We provide the one-stop turnkey solutions to charging stations across the life cycle of the charging station in 3 stages: initial building, operating and upgrading stage. In initial building stage, we provide support for big data backed size selection, hardware and software procurement and EPC, which is design and construction of the site. In the operating stage, we provide services like user acquisition, operation maintenance and non-charging services, such as fast food and auto vendor machine. In the upgrading stage, we helped our customers build technological upgrades, including energy storage, solar PV, virtual power plant and electricity trading. So these are the list of services that we provide to our customers. During the course of 2023 and 2024, of course. We will continue to build our capabilities and help our customers establish these key capabilities through our services. All of these services have pretty high ceiling in terms of the amount of services we can provide to them. Specifically, I think for operations like user acquisition, hardware and software procurement, EPC, operation and maintenance and definitely energy storage. These are the same reps we can help our customers in the short to mid term. And I can see that we will be able to make a decent amount of revenue from these services. And these revenues will support our growth for this year and next year. And I think as the China's growth potential for charging station building and charging station operation continues to expand. We will have a lot of opportunities in these 3 years to deliver.…

The next question is from Eugene Haier from Macquarie Capital.

This is Eugene Haier from Macquarie. Kathy, Alex, I appreciate your time to answer our questions. I have two questions. First, I'd like to understand a bit more about how we think about the current and future profitability differences between the two major business segments on the online EV charging platform and then the offline EV charging services and how you think that develops over the next few years.

Okay. Thanks, Eugene. Let me address this question. I think we have a clear path to profitability on both online and offline EV charging solutions, but the path will be different for apparently different businesses. For online charging platform, I think let's talk about the current performance first. The NTI has been continuously improving for the past couple of quarters. The NTI improvement has been improved by about 3.74 bps in 2022, and we can see the trend continues in first quarter 2023. The way to see the online charging business is in a way pretty simple, right? So we have two sets of customers. The first set of customers is the operating vehicles, the second set of the customer is a private vehicles, the private cars. The operating vehicles are cost sensitive or price sensitive, but they obviously provide quite a lot of charging volume. The private vehicles are not price sensitive, but they charge less of it, right? So the easy way to think about it is the operating vehicles are what we call the VIPs. So they're charging effectively doesn't make money, but their VIP contributes to our royalty fee. The private vehicles, their charging actually makes money, we make a takeaway rate from the private vehicles. So currently as the number of EVs grow on a pretty significant number year-over-year, as Kathy introduced before, we believe the percentage in the mix of EVs weighed out to private vehicles in the future, according to the [ end ] in the future. So when we have the mixture of those two type of vehicles change towards private vehicles we will have higher and higher NTIs and eventually will be able to a breakeven and start making a profit. So I think we've already seen the clear trend from a quarter-to-quarter comparison and a year-over-year comparison. And we believe the trend will continue. So from the online perspective, what we need to do is to continue doing our job properly and improve our operational efficiency. And at the same time, I'm sure we have -- where we can keep and grow our percentage in the market. So that's for the online solutions. For the off-line solutions, I think it's pretty straightforward in a way because these are all the B2B type of services, and we make positive gross margin for all of our services in the three stages that we provide. So for the offline solutions, I think naturally, we will be able to make money. Currently, we're in the expansion stage, where we need to build the infrastructure, the technology, the teams to deliver the significant growth, but the business itself in offline self solution area is profitable.

And one more question from me. You mentioned on the prepared remarks that you've hired Allen and then you've also opened offices in Singapore and Europe, looking at the Middle East. Could you give a little bit more color on, I guess, the -- any overseas expansion plans and maybe some timing on when you think that would actually pan out.

Sure, sure. Thank you,. And this is a great and important initiative for us. So we are NASDAQ listed company, and we always see ourselves as a global company. We don't really see ourselves as a China-based company only. We see ourselves as a global company. So ever since our listing, we have started our overseas expansion plan. We've done some homework really, and we compared notes of the experience that people like Allen has in European market with the ecosystem of China EV charging market. And we find striking similarities between the two markets, right? And that gives us confidence that for mature markets, the ecosystem tends to be similar. Although in some cases, people call them different names of different layers, but they tend to be very similar. So what we believe now is the charging ecosystem in China is the most advanced and most mature, and we should be able to replicate some of the best practices that we've accumulated in China over the years to other less developed market in terms of EV charging. So that's really our strategy to start with. What we've come to done is we've marked down key regions, Europe, Middle East and Asia Pacific. We obviously will use different type of strategies to deal with those three different type of markets. Allen is our General Manager for Middle East and Europe. For Europe, which is a mature market, we plan to look at a potential M&A strategy, which will help us acquire the brand network in Europe. Because it's a mature market. In the Middle East, we plan to work with some of the local governments to look at how can we help the countries build their charging network. Middle East is a very unique market. To be successful in the Middle East, we will have to work with the local ecosystem. So that's exactly what we are doing in the Middle East. In Southeast Asia and in Japan, we're working with some of the energy companies to look at how can we leverage their existing network in the energy supply system to build the charging network, which we believe is probably the one -- the strategy that we can use with the most leverage. So we're changing some of those energy companies, and we believe we'll be able to see some of the results in this year. So we are changing all different type of opportunities. And I think for this year, what we can do is we'll clearly establish our existence in the overseas market, and we'll be able to land 1 or 2 major projects. And that's what we plan to achieve this year. Thank you.

Great. Thanks so much. If you don't mind, just one more. I'm interested in understanding a bit more about the relationship with the parent company with Newlink and then where do you feel that there could be some synergies there.

Sure. Thanks, Eugene, for that question. So the parent company is called Newlink Group. Newlink Group is an energy digitalization and energy asset operation company. And it's China's largest energy digital service company. Currency sales 300 million users through its digital app and covers 25,000 gas stations in China. So there are a couple of synergies that we can clearly see. The first is from a customer perspective, using digital app called Tuanyou has 300 million registered users. So these users gradually -- these users are drivers of ICE vehicles and they're gradually migrating to EVs. We have done an analysis between for the people that are continuing our EV service, there have been around 70% user overlap. So I believe the 300 million drivers or 300 million users, effectively a very good user conversion pipeline for our online solutions. The second point is in terms of the gas station, so Newlink Group covers about 25,000 gas stations. And a lot of those gas stations owners are already doing the charging station business or seriously considering the charging station business. We have done a survey about 30% of the gas station owners are interested to construct a charging station. So those are the people that have land and resources in the local network, and they need help to support them and to build a charging station from an expertise perspective, and we have existing relationship with them. So these are the good candidates for us to convert from a station pipeline perspective. And obviously, in terms of our local network, Newlink Group has got an established local network or in many, many cities in China because it has a very successful and very big fueling business. So the same local network can be leveraged for the charging and for the charging station management business, as a matter of fact, they're already helping NaaS in terms of the maintenance and service business that I just mentioned because the maintenance service business has already managed about 15,000 parking lots across 168 cities. So the local network of Newlink also tends to be quite helpful in terms of the synergy.

If there are no further questions now, I'd like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact us.

Thank you. That does conclude the conference call. You may now disconnect your lines. Thank you.