Ladies and gentlemen, thank you for standing by, and welcome to the NaaS First Quarter 2023 Earnings Conference Call. [Operator Instructions] I must advise you that this conference is being recorded. 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 First Quarter 2023 Earnings Conference Call. The company's results were issued earlier today and are posted online. Joining me on the call today are Ms. Cathy Wang, 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 our recent performance and highlight 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 non-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 this conference call are in RMB terms. I will now turn the call over to our CEO, Ms. Cathy Wang Yang. Cathy, please go ahead.

Hello, everyone. I'm NaaS CEO, Cathy Wang. It's my pleasure to share NaaS' first quarter 2023 earnings results with all of you and to discuss our recent development. We just celebrated the 1-year anniversary of NaaS going public. First and the foremost, I'd like to express my heartfelt gratitude to the entire team of NaaS. The hard work and dedication of our team members combined with our significant first-mover advantage empower us to lead the EV charging solar industry, both domestically and globally and procure the world transition from faster fields to electricity. Next, I'd like to take this opportunity to briefly review the development of our industry and the strategies we have started fastly executed and will continue to pursue. The worldwide consensus and energy transformation is undeniable. With our primary energy service, transitioning from faster sales to clean energy, new energy technologies focused on clean and efficient solutions have become key drivers of the ongoing technological and industrial revolutions guided by dispute carbon goals announced in 2020. China has made remarkable progress in the -- transforming its energy supply into a diversified and integrated clean energy system. According to IEA report in 2022, almost 30% of global emissions reductions came from the electrification of passenger cars in China. According to CIC, China's AUA installed base will grow from 30.1 million in 2022 to 145 million by 2030. And the total public charging capacity will increase from 30.7 billion kilowatt hour to 337.9 -- sorry, 337.8 billion kilowatt hour, growing by 11x and 25x with tactility. Even more exactly as the installed base of smart electric vehicles, smart homes and intermittent renewable energy growth, the power grade is becoming increasingly decentralized with driving digitalization, distributed sources of energy, coupled with big data analysis and AI technology are catalyzing the…

Thank you, Cathy. Hello, everyone, and thank you for joining our call today. In the first quarter of 2023, we delivered solid performance amid a rapidly evolving business environment and solidified our leadership in the third-party charging service market. In the first quarter, our revenues saw a 2.5-fold growth year-over-year to reach RMB 36.2 million driven by our progress in expanding our network and optimizing our user experience across the construction, operating and upgrade stages for charging station owners. The total charging volume transacted through our network during the quarter increased by 112% year-over-year, reaching 1,023 gigawatt hour. This accounted for 21% of all charging volume completed through public chargers in China during the same period. Additionally, the gross transaction value transacted through our network amounted to RMB 990.5 million in the first quarter of 2023, representing an increase of 107% year-over-year. At the same time, our total number of orders surged by 110% from 21.2 million in the first quarter of 2022 to 44.4 million. Notably, in the first quarter, revenues from online EV charging solutions increased by 145% year-over-year, outpacing the total charging volume growth and GTV growth over the same period. Benefiting from greater operating leverage, our net loss margin in the first quarter declined by 383 percentage points year-over-year. While expanding our charging network, we're committed to providing a full suite of one-stop EV charging solutions,for station owners to address their key pain points and at the same time, enhancing our customer stickiness and create additional revenue streams. As of May 31, 2023, we have provided operational maintenance services for over 20,000 parking slots across 3,000 charging stations in 300 cities. We have launched multiple charging products, specifically designed for Europe market, to complement our one-stop charging solution. These include our AC Wallbox for EV charging…

[Operator Instructions] Your first question comes from Megan Chen with Macquarie.

We have 2 questions. The first question is that would you kindly elaborate a little bit more on the acquisition of Sinopower, especially for the synergies with our current business as well as current mainland market? And also like in the future, what are the other acquisition directions that you're looking at?

Thank you, Megan. This is a great question. Sinopower is a leading rooftop solar PV development in Hong Kong. As I mentioned before, it has a superstrong 32% market share in that particular market, and we believe it's a clear leader in that space. We can obviously work with Sinopower to further strengthen its capability in that space that can be underpinned by the policy of Hong Kong to strengthen the PV solar panel industry. Separately, we will also work with Sinopower to expand its capability globally. As we shared in our previous earnings calls, NaaS has planned to expand in 3 major markets, including Europe, Middle East and Southeast Asia. We believe Sinopower's capability can be expanded and replicated in other markets. So once we finish the closing of the transaction, we work very closely with the founder and management of Sinopower to leverage that capability. And finally, from a charging perspective, which is the core capability of NaaS, we're also working with Sinopower to build and expand that capability in Hong Kong, especially with the charging solutions in leading estate. Sinopower has proved that it has the capability to work with the asset owners to build solar solutions. We will work with Sinopower to expand those capabilities into charging solutions in the United States. So we're very excited with this acquisition, and we look forward to work with the Sinopower management team.

Your next question comes from Yizhen Du with CICC.

Yizhen Du from CICC. First of all, congratulations for our great performance in the first quarter. And I have 2 questions about our business. First line is about the online charging service. So what do you think of the future change of charging services? Do you think the charging services will continue to replace? This is the first question. And second one is about our energy storage business. As we all know, last launched service of energy storage products within just share with us your focus for energy storage business. This is my 2 questions.

Thank you, Yizhen. Thanks for your questions. Let me answer those one by one. So from a charging service perspective, obviously, I don't have the crystal ball in terms of giving the forecast for future service change. I think what we've seen now is there has been a sort of diversed trend of service fee. We have seen, for example, nationwide, the average service fee per kilowatt hour that's has been hovering around $0.40 to $0.50 per kilowatt hour, right? But if you sort of look closer, there would be quite a lot of diversity in terms of the service fee. For example, in some stations, in Beijing and Shanghai, the service fee per kilowatt hour could reach $0.80 during the busy hour. So what I believe is ultimately, the service fee is a result of demand and supply. I think with the adoption of EV with the penetration rate in some of the key cities like Shenzhen, Shanghai, it is loss of 50%. We will see more EVs on the street. So there will demand of the charging solutions, right? So I think eventually, we will see the charging service fee going higher. And that trend may need a couple of years to be implemented. That's the answer for your first question. For energy storage, I think we are very, very excited about the future of energy storage, especially the energy storage in charging stations, right? So if we take a step back and look at the overall market or overall industry, the charging -- the EV charging volume only accounted for less than 1% of the overall power grid output in 2022, but it is expected in about 10 years, the charging for EV will be accounting for 5% to 10% of the overall power grid output. That…

Your next question comes from Megan Feng with Tianping.

Thank you for your team presentation. I missed the projected time line of your virtual power plant platform and the automatic EV charging robots. And how are they going to impact the company's financials?

Okay. Okay. So for VPP solution, we've already launched the VPP solution on June 13, 2023. We are currently leveraging data from EV energy storage and charging station in our energy base to provide input to our virtual pumps and train its algorithm. As for automatic charging robots, we launched the prototype in April, and we have used the prototype to attend its business, especially in, for example, EVIS in Abu Dhabi and power to drive in Munis. What we plan to do with the charging robot is we plan to launch a commercial charging robot in energy close to our customer base before Q4. Our team is working on that. There are a couple of work streams we're trying to be working on to be able to see the first commercial product launched. I hope we can invite you to see the near charging robots in commercial capacity before Q4. Both services from a revenue perspective, I think the charging robot is probably still 1 or 2 years away. But for the virtual power plant, we are already doing, for example, electricity trading and electricity procurement projects. And these projects can be further impacted by the virtual power plant capabilities. So for virtual power plant, if you see -- for example, our revenue streams, we have a revenue stream that is dedicated to innovative solutions. So the revenue from the virtual power plant will get into that particular stream. So you can keep an eye on that.

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

Thank you, everyone, for participating tonight. And if you have any further questions, please, please feel free to just contact us. Thank you.

This concludes this conference call. You may now disconnect your line. Thank you.