Ladies and gentlemen, thank you for standing by, and welcome to the NaaS Third Quarter 2023 Earnings Conference Call. [Operator Instructions]. I must advise you that this conference is being recorded. I'd now like to turn the conference over to your first speaker today, Ms. Cynthia Tan, Senior IR Director. Thank you. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to NaaS Third 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 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 today's call on 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 [indiscernible] . Finally, please note that unless otherwise stated, [indiscernible] RMB terms. I will now turn the call over to our CEO, Ms. Cathy Wang Yang. Cathy, please go ahead.

Hello, everyone. I'm not CEO, Kathy Wang Yang. It's my pleasure to share NaaS third quarter 2023 earnings results with all of you to discuss and discuss our recent development. In the third quarter of 2023, our total revenues increased by 536% year-over-year to reach and RMB 171 million. Our non-IFRS net margin attributable to ordinary shareholders narrowed by 256 percentage points compared with the same quarter last year, the total charge volume transacted through our network during the quarter increased by year-over-year. Reaching 1,383 gigawatt hours. This accounted for 21.8% of all charging volume completed through public chargers in China during the same period. Since the beginning of 2023, NaaS has undergone a fundamental shift in its revenue structure. In the second quarter of 2023, the proportion of off-line and innovation service revenue exceeded 50% for the first time, reaching 53.4% in the third quarter. Revenue from EPC Energy storage and other solutions accounted for 81% of the total revenues. We affirm our full year 2023 revenue guidance to be between RMB 500 million to RMB 600 million. And we expect our full year 2024 revenue to be between RMB 2 billion to RMB 3 billion, a growth of 4 to 5x. NaaS is transforming from a new energy service company into a new energy . In the third quarter, NaaS stands at RMB 204 million energy storage order. In addition, we won the bid for MG Green and low-carbon supply chain construction project, creating the global EV storage, charging swapping benchmarking project for the highway trucks. NaaS International business is forging at height, contributing 32.7% of our total energies in the third culture. In October, NaaS become one of the first batch of strategic [indiscernible] of the Hong Kong SAR office for attracting strategic enterprises. On September 22, sustainable which assigned NaaS the highest ESG entity score in China. 22nd in Asia and 50 worldwide. On October 23, NaaS joined United Nation's Global Compact organization, we embrace open source technology, open data access and an open ecosystem. This commitment to openings pays the way for our global initiative towards carbon neutrality. We look forward to join hands with our partners. To advance our vision of empowering the world with with Green Energy. Now I will turn our call to Alex, our President 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. As Cathy mentioned, we delivered an excellent performance across our key operating and financial metrics in the third quarter. Our top line growth was exceptional. And we remain the industry leader in China's growing charging services market. Simultaneously, we're expanding from a singular mobility connectivity business to a model that also monetize our digital analytic capabilities. We're doing this by achieving a rapid expansion of our charging station operation and energy storage businesses, which will allow us to reach our goal of becoming a leading integrated new energy asset operation and management service provider in China and abroad. In line with our business expansion, we introduced a new revenue reporting structure in the third quarter. Income from mobility, connectivity and self-operated charging stations has been consolidated under charging services revenue. Income from our integrated charging infrastructure, PV and energy storage now falls under Energy Solutions revenue, while income from our third revenue stream, electricity procurement services and other services has been remained new initiatives revenue. To assist with comparison, we have adjusted historical periods accordingly. We think these three revenue categories better describe our extended new energy asset ecosystem and more clearly reflect the direction of our business. For more information, please feel free to refer to our earnings release issued earlier today. We can see our business transition taking shape in our stellar third quarter growth, and we're pleased to be able to show a more visible profitability trajectory. Our total revenues reached an all-time high in the third quarter of RMB 170.9 million. The bulk of this rapid growth came from our Energy Solutions revenue. Which increased by 6x quarter-over-quarter, accounting for 81% of our total revenue in the third quarter. The substantial growth is…

[Operator Instructions]. Our first question comes from Kelly Zoot Jefferies.

Firstly, congratulations on about your strong third quarter results. I have two questions. Firstly is about the revenue guidance you just mentioned to us about the revenue [indiscernible] ? So can you share more color about the growth driver of your Energy Solutions business in China and also overseas market. [indiscernible]? And the second question is about the margin outlook. So can you share more color on your margin improvement? So basically helping us to know how to forecast the margin trend of your Energy Solutions business going forward?

Okay. Thank you, Kelly. Those are two very good questions. For your first question regarding Energy Solutions business and its growth drivers, let's look at what it's doing right now. So we have seen significant contribution from Energy Solutions in out of the Q3 revenues, the Energy Solutions has contributed RMB 139 million, which is a year-over-year 500% growth. If we look at the drivers, there are basically 3 segments that we're looking at in that business. Number one is what we call the EPC. The EPC driver is effectively we have the data advantage. We have the industry know-how, and we have a very strong customer base that will give us the capability to build the complex projects. And that will also give us the capability that we can give to our customers that we can pick the right spot to build those charging stations. Number 2 is the Energy Storage. For Energy Storage revenue driver, they are sort of twofold. The first one is we know that this year, we have the 380 contracted stations that we want to build the energy storage solutions. In Q3, so far, we've delivered 43 out of the 380. So the lion's share of the contracted stations that are yet to be delivered should be delivered in Q4 this year. If we look at the medium term that we picked 1,880 stations. Out of the 73,000 stations that we've connected to. This 1,880 stations are good candidates for us to build the Energy Storage Solutions, Inc. So we've already picked those stations. We already know where they are. The next step that we need to do in the midterm is to get those stations constructed and built that sorry, to get this Energy Storage Solutions build. So that's for energy storage. For…

Your next question comes from Yizhen Du from CICC.

First of all congratulations on excellent performance in the third quarter. And I have two questions this time. The first one is that you just shared us with the 2024 revenue guidance. which shows a significant increase compared to this year's guidance. So could you explain how NaaS will achieved such rapid growth in 2024? This is the first question. And the second one is about the overseas business. We all know that previously acquired [indiscernible] and, so what is the recent progress of the overseas business? And how would you predict the revenue contribution of overseas charging pile, [indiscernible] sales in 2023 and 2024. This is my two questions. Thank you.

Okay. Thank you, Yizhen. These are good questions. So the first question is about 2024 revenue guidance. I just would like to take a step back and look at the very to set the stage, right? So based on CIC report, for example, the public charging in China is expected to grow 20 times by 2030 and the public charging volume will be growing 25x by 2030, and we clearly still see EV coming into the market at a rapid speed. If you look at NaaS, NaaS is China's largest EV charging network. It has 73,000 charging stations covered, which is about 50% market share, has 768,000 charges connected, which is 42% market share and has charged 1,383 gigawatt hour of electricity in 1 quarter, which is about 21.8% market share. And if you look at the capability, this is a company that has analytic capability as a very strong big growing customer base and user traffic. And we are working very hard to move to the asset operation business, which is effectively a way to monetize our data analytics customer base, traffic and also the very well-connected customer. Customer base in China to run our assets more efficiently. Right? So that is to say the same. Now if you look at different segments, if you look at the charging station operation, for example, that I've already mentioned the largest EV charging network I've already mentioned our analytics and Chinese station base and also a professional operating team. Our objective is to see significantly increase the chargers under the management by end of 2023 and in 2024 to a number that is much bigger than what we have today. This these charges under management will be picked from our extensive network. The charges will be picked from the 768,000 that…

Your next question comes from Zoe Feng at TF Securities.

Hello. This is Zoe from [indiscernible]. Your Q3 financial results was very impressive. But based on your current results, you still need to achieve a significant revenue growth in Q4. Can you share more color on how to achieve that? That was my first question. And second question is, you previously disclosed a major contract in the Energy Storage business. Can you share some updates on the progress of that contract.

Great. Thank you, Zoe. So first question is about the Q4. So just to recap, we've delivered significant revenue growth, the Q3 revenue is RMB 171 million, as you have seen, which is a year-over-year growth of more than 500%. But most importantly, within that RMB 171 million we see September single month revenue exceeding RMB 100 million. So I believe that is a major step-up in our growth trajectory. And I believe we'll be able to stay in that revenue magnitude, if you like, for the rest of Q4. If we break that into business, I would just probably repeat some of the things I said before, but I think those are useful. In Energy Storage, we still have well more than 300 contracts, stations to be delivered that we plan to deliver in Q4. With solar power, we have a clear backlog in hand, I say backlog, I mean those are the projects that have already been committed. Some of them we've already started construction, we just haven't finished yet, right? And we also, as I said before, winning 3 out of 5 projects or contracts that we have under EHSS. EHSS is a project that we know is a project that we know very well, and we can deliver fairly quickly within 1 or 2 months. And in the EPC business, we have disclosed before that we won a RMB 67 million, OneStop PV storage project in [indiscernible] . Delivered a part of that, but there is part of that, that will be delivered in Q4. And we're working closely in the PV place. We're working closely with some of the the other sort of domestic local governments that want to build those high-tech charging stations. So we may have more good news to come in that…

Your next question comes from Alice Mara at UBS.

Thank you for the opportunity for asking this question. My question is actually about your classification like the revenue. Can we understand that actually the the online business in the past classification is very much similar to the current charging service revenue, except that we have another kind of business model like card full station operation model. And my next question is, can you like further elaborate more on the full station operation model, like what is the business model is? And how could it bring impact on your revenue and margin going forward?

Thank you, Alex. This is an excellent question because this is an important business model for us. So to, the easy way to understand the operating, operation business model, is that we basically operate these stations more efficiently than the current asset owner. So if you separate the layers, there is the layer that for asset owners, those are the people that have invested in assets and their own assets. And there is a another layer on top, which are the asset operators. These are the people like us that don't own assets, but we have capabilities, unique capabilities that we can operate the assets in a more efficient manner. And for us, in this, in the charging business, the operation has a lot to do to, with digital capabilities with analytics and most importantly, with pricing. So what we have is we have the largest charging network. We have covered the most number of charges and we've charged a large number of, a large percentage of the market, public charging market share with the data that we could collect from these chargers and charging stations. We could derive the best sort of running model for a particular charging station, right? And we could get the right pricing for a charging station for a charger at a particular hour of a particular day. So that helps us to drive for the higher efficiency of those charging stations, and that has been improved by the pilot project that I just mentioned. Out of the 13 piloted stations in 7 different provinces. We've managed to achieve a 10% charging volume improvement after our team take over the operation. So that is achieved basically by having the analytic capability right, and the ability to understand the seasonality to understand our by our charging…

Your next question comes from Chile New at Casa Securities.

Hello. Can you hear me?

Yes please?

Okay. I'm the analyst of the [indiscernible]. My question is about NaaS as a long partnership with China Construction Bank. Can you elaborate on how the partnership could support your business?

Thank you for your question. That's once again, a very good question. As a context, NaaS and it's parent company [indiscernible] group, have entered into a partnership with China Construction Bank, one of the biggest banks in China. To provide a credit line up to RMB 2.5 billion for [indiscernible] . And this is not really the end of the credit line, and we're talking about a collaboration on the same time. I believe the partnership with China Construction Bank could with our financial position in this fast-growing phase is growing very, very fast. So to get financial support and especially the financial support from one of the biggest banks in China definitely helps. It also helps to accelerate the energy transition and new energy adoption in our value chain. So as you know, energy transition is a is a policy that is very well taken and the Chinese government. So this partnership with China Construction Bank definitely helps to drive the speed of production, and finally, I think this is a mutually beneficial partnership to empower more business primarily in our ecosystem. We firmly believe win win situation, I think in the energy space, as we are facing this very unique opportunities that probably happens like in the life time. We want to ensure that all the partners that we work with in this ecosystem can get some benefit from us we want to be the ecosystem integrator to help everyone to get some benefit, right? So to work with CCB, that enable us to to have this capability to get more business partners into the system. So this is, so we are all very excited about this partnership with China Construction Bank. And we all feel very proud that we have support from CCB.

That concludes our question-and-answer session. I'd like to turn the call back to the company for closing remarks. Thank you.

Thank you all for joining our call today. Please feel free to contact us if you have any further questions. Good night, and Goodbye.

Thank you. That concludes today's conference call. You may now disconnect your lines. Thank you.