Ladies and gentlemen, thank you for standing by, and welcome to the NaaS Second Quarter and First Half 2023 Earnings Conference Call. At this time all participants are in listen-only mode. I must advice you that this conference is being recorded. I would now like to turn the conference over to your speaker today, Ms. Cynthia Tan, Senior IR Director. Thank you. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to NaaS Second Quarter and First Half 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 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 our recent performance and 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 non-IFRS financial measures. Please refer to our earnings release, which contains a reconciliation of non-IFRS measures to 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.

Okay. Hello, everyone. I'm a NaaS CEO, Cathy Wang. It's my pleasure to share our second quarter 2023 earnings results with our view and to discuss our recent development. In the second quarter of 2023, we continued to deliver solid operating and financial performance with revenue margin leverage and a significant loss reduction. Such our continued network expansion, still in client base of station owners across various stage of charging station construction, operation and upgrades as well as improving operating efficiency. Our strategic partnerships also continued to deepen and expand. With leading enterprises, such as Hyundai Motor Group, PICC Real Estate Investment and CR Capital MGMT attracted to our innovative solutions and one-stop services. We are expected about collaborating with these partners to further propel development of EV charging industry. This year, new energy storage facilities experienced broad-based exponential growth. According to the NEA, newly commissioned installations in the first half of this year alone exceeded the past 10-year total installation to reach 8.63 gigawatts, seeking capacity in operation to 17.7 gigawatt hours. China's energy storage demand is also growing rapidly. It's expected to exceed 17 gigawatt hours by 2025 with the market size reaching over RMB100 billion. In September 2023, we signed a RMB204 million energy storage order in cooperation with several companies providing over 380 and charging stations with energy storage equipment and comprehensive solutions with in energy storage capability of over 130-megawatt hours in total. This initiative shows our strength and innovation in station integrated energy storage technology, making a crucial step forward in our integrated photovoltaic storage charging contracts. This order further booted our confidence to deliver our full year revenue guidance. Furthermore, our total fund raising year-to-date to $91 million, significantly enhancing our financial strength and fulfilling our growth initiatives. Internationally, we are actually accelerating our global expansion into, we acquired 89.99% stake in Sinopower, a leading rooftop solar energy developer in Hong Kong on August ‘22. We also entered into a definite agreement to acquire Charge Amps, a leading European provider of EV charging service solutions, capitalizing on the strong market presence and channel capability as well our extended product and service portfolio and financial strength, we will further strengthen the standing of Sinopower and Charge Amps in their respective regions, while promoting the global exploration of our product and service offerings. Looking ahead, we will elaborate the supporting policies worldwide and increasing market demand actively exploring the integrated development of charging stations, the new energy system and smart IoT devices while elevating both user experience and service quality, aiming for a 10% market share in the global new energy asset operation and management services market in long term. 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.

Thank you, Cathy. Hello, everyone, and thank you for joining our call today. In the second quarter of 2023, we delivered solid operating and financial performances. By offering diversified service offerings while leveraging the industry-leading scale of our charging network, we continued to solidify our leadership in the charging services industry. We have also made significant progress in our transformation journey towards becoming an integrated new energy services provider, highlighted by our achievements in energy storage, among others. In the second quarter, we more than doubled our revenue year-over-year while achieving a significant loss reduction. Specifically, our revenues grew 121% year-over-year to reach RMB48.6 million, driven by our ongoing network expansion and our growing station owner client base across the construction, operating and upgrade stages for charging stations. Our gross margin reached 39%, representing a notable increase of 22 percentage points quarter-over-quarter. This improvement highlights our unwavering commitment to innovative business practices that drive favorable revenue mix changes. Additionally, we reduced our net loss by 94% year-over-year to RMB334.7 million. Our net loss margin narrowed by 385% quarter-over-quarter. And our operating loss margin narrowed by 373% quarter-over-quarter, benefiting from greater economies of scale. Our network experienced significant growth during the quarter with total charging volume increasing by 112% year-over-year reaching 1,228 gigawatt hours. This accounted for 21.7% of all charging volume completed through public chargers in China in the same period. Moreover, the gross transaction value conducted through our network rose to RMB1.2 billion, reflecting a 109% year-over-year increase. Simultaneously, our total number of orders rose by 110% to 53.8 million from 25.6 million in the second quarter of 2022. In the second quarter, revenues from off-line EV charging solutions increased by 153% year-over-year, accounting for a higher share of total revenues compared with the first quarter. The robust growth…

Ladies and gentlemen, this is the conference operator, we have temporarily lost connection with the speaker line. Please hold and the conference will begin momentarily. Please go ahead, Alex.

Sorry, I just got disconnected. Let me continue. Now let's delve into our global expansion strategy. Our agreement to acquire Charge Amps in August marked an important milestone in our globalization levers. We are pleased to welcome the Charge Amps brand and team to our NaaS platform. As a pioneer in integrated EV charging solutions industry, specializing in home, work and destination AC charging solutions, Sweden-based Charge Amps has a strong reputation throughout Europe. For over a decade, Charge Amps' broad portfolio of intelligent, sustainable, user-friendly and particularly pleasing product offerings has been satisfying customers as proven by its 22% local market share with an established international footprint in 13 markets. Charge Amps' commitment to sustainability is manifested throughout its entire production chain and reflected by participation in the UN Global Compact. There are significant synergies between NaaS and Charge Amps. First, Charge Amps can leverage NaaS' relationship network to expand its sales channels. While NaaS can utilize Charge Amps' existing channels to launch affordable AC, DC and household storage products to enrich its product portfolio. In addition, we can reduce Charge Amps' cost of revenue and improve its margins through our advantages in the domestic supply chain and procurement as well as resource consolidation. Furthermore, as Cathy mentioned, we acquired 89.99% of Sinopower stake in June, another critical component of our expanding global layout. Sinopower is Hong Kong's largest one-stop solar panel service provider, posing a significant 35% market share in rooftop solar PV development in Hong Kong. Through the Sinopower acquisition, we entered the distributed solar power market in Hong Kong, which broadened our boundaries from charging services to upstream power plant services, opening a new chapter for energy asset management. We are working on integrating the technology products capital and markets of both parties. With Charge Amps…

[Operator Instructions] Your first question comes from Kelly Zhao [ph] with Jefferies. Please go ahead.

Can you hear me? Yes, firstly, congratulations about the second quarter result. I have two questions. Firstly, is can you please discuss the progress of the -- your Sinopower acquisition, how about the integration after the acquisition closed in June and share more color about the progress of this project? And secondly, the question is can you please talk more about the strategic partnership you recently developed? And how does this fit in with your long-term strategic growth of your business?

Got it. Thank you. So two questions, one is about Sinopower integration. The other one is about the strategic partnership, right? So let me address one by one. So for Sinopower, I'm currently very excited. Now we finished the acquisition of Sinopower in Hong Kong in June. Since then, Sinopower has strategically leveraged NaaS' strength to strengthen its presence in both EV and PV and have made significant progress in both of those two areas. On the PV side, Sinopower completed a 2.6 milliwatts rooftop solar project in Hong Kong, which is expected to generate 31 million kilowatt hours annually. It has also secured contracts for 9 NaaS projects. Sinopower has over 50 projects under construction currently, totaling 10.2 million watts in capacity. On the EV side, Sinopower has qualified as a contractor for the Hong Kong government-sponsored EV charging at home subsidy scheme or EHSS, currently advancing over 40 EHSS projects aiming to cover around 6,100 parking slots upon completion. In addition to that, Sinopower has also integrated into the mass ecosystem, expanding its business both in Mainland China and in Southeast Asia. Sinopower are actively involved in the PV project in MG County, which is currently under construction and the industrial and commercial PV project in Vietnam. So I'm very excited about this acquisition. I think the integration is well underway. And as I mentioned before, Sinopower now has a very, very healthy pipeline of projects that it will deliver over the coming months and will generate healthy revenue and EBITDA for the whole group. That's my answer for the first question. The second question regarding the partnership. We are very excited with these new three new partnerships. There are three partnerships that we achieved in the quarter. The first one is with Hyundai where we aim to face our charging infrastructure and mobility services tailored for Hyundai's EV models. Partnership with PICC, which is one of the biggest insurance companies in China, we will work towards building a top-notch new energy charging service system, including integrated infrastructure and co-branded stations and also insurance services. With China Resource Capital Management, which is an investment fund that's backed by China Resource, we will incubate and invest in to operate new energy infrastructure projects and also looking at a potential to securitize new energy assets. We'll be able to leverage our industry expertise and China Resources' capital markets capabilities. These partnerships, if you put them together, right, you can see we are working with one major OEM, one insurance company and one major commercial real estate developer and investor. These are the three pillars that we have -- all have in mind as the important partners we need to work with in the new energy ecosystem. And we will continue to build more partnerships in these spaces and build a strong ecosystem that we can work in. Thank you.

[Operator Instructions] Your next question comes from Will Leo with Tian [ph]. Please go ahead.

Hi this is Will. Congratulations for a great performance in second quarter and first half 2023. I have two questions. First, can you discuss more details on the acquisition of Charge Amps and your strategy in Europe market? My second question is about energy storage. Can you share more color on your energy storage in the charging station business? These are my questions. Thank you very much.

Thank you. Thanks for asking these questions. So the first question is to do with the Charge Amps acquisition that I will now elaborate on our strategy on Charge Amps acquisition. The second question is to do with energy storage, right? Okay. So let me address your first question first. The acquisition of Charge Amps is a strategic step that we take in Europe. Europe is the world's second largest in energy market -- in the energy vehicle market with currently 8.1 million EV in 2023. The projection is by 2025 there will be 16 million EVs in Europe and by 2030, there will be 55 million EV in Europe. And from a penetration perspective, the penetration rate in the EU countries, the European Union countries, has reached 53% in 2023, which forecasts to 80% by 2030. As a comparison to that, the on the spot China EV penetration rate is about 36% in 2023. The two countries that have highest EV penetration rate, both in North Europe with Norway now the highest at over 80% and Sweden just closely following with somewhere between 65% to 70%. So we are acquiring a brand that is in a very well-developed market, in a fast-growing market. And Charge Amps has a decade of experience in creating some of the best quality and best design products in the charging industry. It holds a very strong market position in Sweden and has established its presence in certain new countries. For the acquisition, our objective is to have access to this leading brand and also have access to the sales channels and AC products. The growth channels in Europe is something that we are particularly exciting to have access to because those channels will enable us to launch new products through. We currently have plans…

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

Thank you all for joining us today. If you have any further questions, please always feel free to contact us. Good night.

This concludes the conference call. You may now all disconnect your lines. Thank you.