Ladies and gentlemen, thank you for standing by and welcome to the NaaS First Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. I must advise you that this conference is being recorded. I would now like to turn the conference over to your first speaker today, Mr. John Wang, Director of Investor Relations. Thank you, and please go ahead. Thank you, Operator. Hello everyone, and welcome to NaaS First Quarter 2024 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, Ms. Vivian Wu Ye, our Chief Strategy 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. Ms. Wu will discuss our operating results, and Mr. Wu will go through our financial highlights. 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 discussions 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. I will now turn the call over to our CEO, Ms. Cathy Wang Yang. Cathy, please go ahead. Hello everyone. I'm NaaS's CEO, Cathy Wang Yang. It's my pleasure to share NaaS's first quarter 2024 earnings results with you and discuss our recent developments. 2024 is off to a great start, showing significant growth across our business. In the first quarter, we achieved revenue of RMB 96.24 million, a 166% increase year-over-year. Our gross margin expanded by 8.4 percentage points year-over-year to 25%. These financial achievements reflect our strong operational execution and the power of our strategic steps, making significant progress as we transform our business into one with lucrative and diversified revenue streams across our comprehensive energy solution offerings. Our fundamental capabilities in mobile connectivity have laid a solid foundation for our overall competitiveness. Enhancement in scale and operational efficiency has enabled us to achieve positive gains at both the GTR and NTR levels. Simultaneously, we have actively empowered charging pile operators with our ecosystem and continuously delivering innovation and energy solutions. This dual-engine approach not only drives revenue diversification but also strengthens our position in the broader comprehensive energy market. While we have maintained steady revenue growth, we have also focused on optimizing our cost structure. The cost reduction and efficiency strides we have made are translating directly to our bottom line, and we are on track to turn our single-month EBIT positive by the end of this year. In summary, the first quarter of 2024 has laid a strong foundation for the rest of the year. With our robust financial performance, strategic advancement in mobility connectivity, and continued improvements in operating efficiency, we are well positioned for sustained growth and long-term value creation. We have established a unique dual-engine model in the charging service industry chain, comprising both charging services and energy solutions. Thank you for your continued support and trust in NaaS. We look forward to continuing our journey of innovation and leadership in the new energy sector. Now I will turn things over to Ms. Wu, our CSO, for a closer look at our operating results. Thanks, Cathy, and hello everyone. I'd like to start by highlighting our recent developments. Firstly, our photovoltaic operations in Hong Kong continued to drive revenue growth, and we expanded our market share in the region. This growth stems from increasing demand as well as our ability to capitalize on emerging market opportunities. Starting in April, we began piloting our EV services in Hong Kong, leveraging our established capabilities in the EPC and local community resources of the PV business. We're now offering EPC services for private charging piles in residential areas, along with selling and installing our company-certified European standard chargers, effectively re-proposing our existing capabilities. In March 2024, we established a significant partnership with Jiaorun New Energy Technology, one of the largest CPOs in the Central China region. In this collaboration, we provide comprehensive services including site selection, hardware supply, and asset operation. The successful signing and execution of these projects are crucial for our company for several reasons. Firstly, this initiative marks the large-scale application of our AI analytics model in business operations, where we provide site selection services to help operators secure optimal locations. Secondly, we facilitate the sale of charging piles and integrate these operations with our online systems to enhance the compatibility between our hardware and software. Thirdly, by leveraging the synergy between our online and offline activities, we can thereby enhance the efficiency of site operations. This approach not only ensures cost recovery for operators but also enables us to share in additional revenue. We also continued to focus intensely on technological development and have joined the Open Invention Network, OIN, the largest patent non-aggression community aimed at protecting open source. As of March 31st, 2024, NaaS has filed over 250 patent applications across more than 10 countries and regions, including the United States, the United Kingdom, Norway, Japan, Thailand, Brazil, and Australia. Our active participation in OIN highlights our dedication to leveraging open-source technology to enhance our charging infrastructure networks. This move is a critical part of our strategy to boost our intellectual property and R&D capabilities, which is crucial for refining our AI models and analytical capacity. In conclusion, our initiatives in Hong Kong, strategic partnerships, and focus on technology and IP demonstrate our proactive approach to growth and innovation. These efforts ensure that NaaS remains at the forefront of the new energy sector, driving the development of advanced, sustainable energy solutions. With that, I'll give the floor to our CFO, Alex, for a deeper dive into our financials. Thanks, Vivian. I'll start with a review of our results for the first quarter of 2024. In the first quarter, revenue increased by a remarkable 166% year over year, reaching RMB 96.2 million. This growth was primarily fueled by our evolving mobility connectivity business and expanded diversified revenue streams. Additionally, our revenue from our energy solutions business increased by 334% year over year to RMB 47.2 million, owing largely to our sustained efforts in delivering comprehensive energy solutions, including renewable energy generation, energy management, and storage solutions. Our sustained revenue growth underscores the strength and viability of our business model and the increasing demand for our services. In the first quarter of 2024, we considerably advanced our operations. Specifically, the charging volumes through NaaS Network increased 19% year over year to 1,216 GWh. The gross transaction value increased 17% to RMB 1.2 billion, and the number of orders surged by 13% to 50.4 million. These metrics highlight our central role in expanding the new energy ecosystem while bolstering our revenues. Alongside our revenue growth, our strategic focus on cost control optimization boosted our gross profit in the first quarter, which increased 4x year-over-year to RMB 24.3 million. Our gross margin also improved to 25.3%, up by 8.4 percentage points year-over-year, reflecting our enhanced operational efficiency and the positive impact of our strategic pricing initiatives. We also made considerable progress in refining our online operational efficiency, which we can see in our improved gross and net take rates. Our ongoing efforts increased our GTR and turned our NTR positive, beginning in January, for a record high NTR witnessed in April. These achievements emphasize our leadership in operational excellence and customer engagement. We remain committed to improving our cost controls while maintaining steady revenue growth, continuously reducing losses. This quarter, we successfully decreased our operating expenses as a percentage of revenue to 224%, marking a decrease of 107 percentage points year-over-year and 421 percentage points sequentially. Our disciplined approach to expanding revenue and strategic cost reductions set us firmly on path to reach our goal of positive EBIT by the end of 2024. The reduction in labor costs and incentives, coupled with increased transaction volumes that offer operating leverage, has enabled us to effectively continue reducing costs. With this powerful combination, we are actively narrowing our losses and advancing our financial sustainability goals. In conclusion, this quarter has marked a significant milestone in our journey toward becoming a global leader in new energy asset management. With strong revenue growth, improved profitability, and strategic cost reductions, we are well positioned to continue our sustained growth in the new energy sector. This concludes our prepared remarks for today. Operator, we're now ready to take questions. Thank you. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. We'll just pause for a moment to allow questioners to enter the queue. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your first question comes from Zoe Feng. Hi. Thank you for sharing your impressive results with us. Could you share some color on the gross profit margin on different business lines and their trends? Thank you. Sure. Sure. This is Alex. Let me answer this question. So from a gross profit perspective, overall, we have achieved an encouraging gross profit margin improvement in first quarter 2024 with an 8 percentage point year-over-year increase to 25%. Right? This is the most important thing. Now, if you look at the major segments of business that we have, for connectivity business, as our NTR continues to improve, as we explained before, the cost and expenses are mainly in the human capital invested to build the digital infrastructure, and these costs are relatively fixed. So once we have the revenue scale of connectivity business, we expect margin on the business to improve meaningfully. And by the way, since the way that we recognize our revenue in this business has been pretty conservative and consistent, we are actually having a pretty good gross margin on our connectivity business already. For energy solution business, due to its project-based nature, we normally can achieve somewhere between 10%-20% margin on average. But it's important to mention that our Sinopower solar business has achieved a pretty remarkable 30%-40% gross margin in Hong Kong and overseas markets. Finally, for the full-station operation business, we're still at a pretty early stage where we're improving our digital analytics capability and inject those capabilities into the operation itself to improve the margin. I think a medium-term objective for margin for that particular business will be somewhere between 15%-20%. Thank you. Your next question comes from Amber Ye with Jefferies. Hi. This is Amber Ye from Jefferies. I'll have two questions. First will be, with regards to the EV charging market, can you share more color on the market trends? With the EV penetration past 50% in the new car sales, how is the sentiment in EV charging station investments, and what's your strategy to capture the fast-growing market? And the second would be, your sales and marketing expenses have been significantly reduced quarter-over-quarter, so how are you able to achieve that? Can we expect the continued improvement in S&M efficiency? Thank you, Callie. This is Vivian, and I'm going to answer the first question. Yes, as you rightly pointed out, that we can see from the faster ramp-up on EV sales, and the EV penetration is increasing, and particularly in private family cars and lower-tier cities. This trend, undoubtedly, I would believe that will increase the demand for the public charging. Also, we think that the transformation process from the ICE to EV is only 6%, which means that only 6% of the vehicles are converted from ICE to EV at this moment. So we believe that the whole EV market still has a huge space for development. For NaaS, in the near future, we unlock huge business opportunities for sure. From the supply side, we also noticed that the EV charging operation business is highly localized, which means that different EV charging stations may have totally different customer base and totally different traffic patterns and cost structures. The above differences lead to totally different returns on investment profiles. In some cases, the payback period of an EV charging station may be as short as 1.5 years-2 years, while in other cases, it can be as long as 10 years-15 years. Certainly, we see much more participation from the private capital than the SOE. The SOE is owning only a small fraction of the EV charging station comparing to half of the market share in the gas station side. The increased participation from the private capital means that the operation of EV charging stations is more market-oriented and multilayered collaboration with us. Finally, the EV charging station market is becoming, we think, more and more fragmented. According to the third-party data, the top five operators' market share has dropped from 87% in 2018 to around 60% in 2023. So the more fragmented upstream markets, the more value that we can provide. Then with above trends, we adopted our ABC strategies to capture the market opportunities. The first of the A stands for analytic capabilities in that we leverage AI-based digital technology to drive insights and enable use cases like the real-time dynamic pricing. And the B refers to our BD team, along with the quantity of the CPOs. As we know, charging is a localized business and requires knowledge of the local market. We know that the market we know the market well, and we are equipped with nearly 2,000 CPOs in China and a ground team of more than 150 people, which enable us to engage the local business across different regions in China. And finally, the C goes to the connectivity. We've connected to a market-leading number of the EV charging stations and EV drivers in China. As we continue to expand this network, a comprehensive offering of services could bring to the EV drivers and the station owners. So therefore, we believe that based on the above capabilities, we can seize the market opportunities well and continue to expand our market share. Thanks. Right. The next question regarding, sorry, I know we still have the second half of the question. So the second half of the question is related to the sales and marketing cost, right? As a platform company, the sales and marketing expenses are mainly invested in acquiring new customers and retaining existing customers. Typically, you will see those costs that are pretty high in the early stages of the company, but they tend to go down as the company grows into a bigger scale. In the new customer acquisition side, we've built a market-leading ecosystem that includes a big network of EV charging stations across China. We've partnered with 80% of the EV OEMs, and we've worked together with all the major map providers and all major online payments. NaaS. With this ecosystem, the synergies from our parent company and the market-leading branding help us acquire 70% of our new users in an organic manner. For customer retention, our continued iteration and improvement in AI-based algorithms and models help us to make smarter decisions in giving users subsidies, which then translates to a better return on investment in our sales and marketing dollars and a lower reliance from user subsidies in retaining existing customers. And finally, we are also expanding our business lines, especially in the 2B space, that leverage more of our analytical capabilities that doesn't require a large number of sales and marketing costs. These elements, all adding together, I think you're going to be continuing to see a lower percentage of sales and marketing costs in the coming quarters. Thank you. Your next question comes from Ting Song with Goldman Sachs. Hi. Thanks for taking my question. Can you please discuss the pricing trend in the charging services market for both short-term and long-term perspectives? Thank you. I think it's a very big question, and I'm very happy to answer it. Here are some of my observations. Firstly, for short term, we are seeing generally stable market prices for the EV charging. But over the past several months, our gross take rate has been consistently improving, which means that we are providing more value to the market. For the long term, we believe that the price for the EV charging still has plenty enough upside for following reasons. First, I think that EV has only 10%-20% of the cost per mileage of the equivalent ICE cars. Thus, even if the charging price is doubled, the attractiveness of EV is still there. And secondly, the EV penetration in private family cars is increasing at a fast pace, and drivers are getting more used to charging their cars at public charging stations. Thus, users are getting less and less price-sensitive, we think. And lastly, comparing to the developed markets, where the charging price can be EUR 1 or $1 per kWh, the charging price in China still has a very large upside. Even comparing to the industrial and household electricity consumption, the transportation energy consumption has more flexibility to even out the peak and valley stage of the electricity consumption. So we believe that the policymakers could leverage these features to give more pricing freedom to the market participants. And above are my thoughts on pricing trends. And simply put, that is, I believe there is still a lot of room for the charging prices to increase. Thank you. Your next question comes from James Zhu with UBS. Hello, management. I have one question. You have highlighted the progress in your patents and intellectual property in the earnings release. What will be your R&D focus in the next one to two years, and how that could translate to your business growth and efficient improvement? Thanks. Yes. Definitely, R&D will be the cornerstone of our business development, and our digital analytics capabilities will be the key enabler for our business monetization. The truth is, we have more than 100 employees in our data engineering team and online operation team, which are our key R&D forces to develop our digital energy asset operation tools and models. Our R&D team has developed a variety of AI models that can be applied to different business segments and also under different business scenarios. For example, our AI location suggestion model can help energy asset investors to find the most appropriate locations to set up the new charging stations. Similarly, our AI dynamic pricing model could also optimize the charging pricing based on the real-time traffic data in order to maximize the efficiency of the charging station. With these digital analytic models, could enable us to expand our business and monetize through the different business frontiers. For example, with our AI location suggestion model, we are able to capture the fast EV charging infrastructure buildout trend with digitally enabling solutions with hardware sales and EPCs. Additionally, with our AI dynamic pricing model, we're expanding our full station operation business with a higher level of confidence where we can capture the upside of the improved operational efficiency of the charging station. Thus, we will continue to drive our business expansion and efficiency increased with our R&D efforts. I also firmly believe that the R&D, especially in the in-depth R&D of AI plus energy sector, is one of NaaS very important competitive advantages. Thank you. Your next question comes from Ethan Zhang with Nomura. Thanks, management, for taking my questions. I have two questions. First, it's regarding the take rates. We have noted some positive trends regarding your Q1 net take rates and gross take rates. How can we expect these take rates to perform in the second quarter as well as the rest of this year? And my second question is regarding the synergies of your business with your parent group. How we should see this contribution from your newly parent group to drive the business in this year. Thank you. Great. Thanks, Ethan. I will answer your first question, and Vivian will answer your second question. For GTR and NTR, the take rate, since September 2023, the company has put a lot of focus in improving NTR and would manage to improve the NTR consecutively while expanding our GTR. As we disclosed in our earnings report, both GTR and NTR have reached historical peak since our listing in April. So there are a couple of things that we've done in that space. For GTR, as we're expanding our CPO or operator network and increasing our user base, we have the advantage to negotiate a higher GTR with the operators. As we disclosed in the earnings report, our GTR has increased to record high. We believe the supply-side market is getting more and more fragmented and localized, and value that we can bring to the operators from an operation traffic acquisition perspective is getting higher and higher. And therefore, we believe that we have space to further improve our bargaining power and therefore the GTR. On the net take rate side, we're able to achieve a positive NTR since the beginning of 2024, and now the NTR level has been extended to a new high. The achievement are mainly derived from the improved capability to optimize user subsidies. For example, we have deployed a membership loyalty program that can meet more specific demands from different types of users. We have also leveraged our AI technology to further improve operation efficiency of the operators on our platform by optimizing the real-time dynamic charging pricing. Experience from our parent company, NewLink gas-fueling mobile app, is that the NTR can reach somewhere between 2%-3% in a mature gas-fueling industry. That is the benchmark that can be considered. And for the next quarters to come, I think we will continue to be working on both the GTR and NTR and can potentially bring even higher NTR as months to come. Thank you. Yes, I'm going to answer just the second question. Firstly, I want to emphasize that our parent company, NewLink Group, has already reached net profit break-even, if excluding NaaS. So I think this is very significant for the whole company. And we think the following aspects could also help NaaS to achieve our business goals. Firstly, as I mentioned, the rest of the business segments of NewLink Group as a whole has reached a net profit break-even, which means NaaS could have more financial resources to support the business development. And secondly, since NewLink Group's online fueling platform has a much larger traffic flow, so when the user on our parent group's platform needs to switch from ICE cars to EV, we could enjoy an organic traffic conversion. As a matter of fact, 70% of our new users are acquired without marketing incentives, and a large portion of this organic traffic is actually from our parent group's conversion. So these synergies in the energy transition process between oil and electricity is huge. And then last but not least, the business models of our other business line in our parent group, NewLink, are quite similar to NaaS. So therefore, we could have more cost control capabilities in team sharing and rental sharing. So this will also be a great help in accelerating the profitability of NaaS. And we're also very excited to continue to see more synergies in the future. Thank you. Thank you, Ma'am. I have a follow-up. So I think you have mentioned that you will reach break-even by the end of this year. So can we assume that we are still on this target unchanged to reach this profit break-even? And also, could you give us more colors on these cost reduction methods that can help to achieve this goal? Thank you. Thanks, Ethan. That's a very good follow-up question. We are confident that the objective that we'll achieve monthly EBIT break-even by the end of the year. We're confident we're on the right track to deliver that very important result. As we have published in our Q1 results, we have reduced our expense ratio quite significantly. I believe in Q2 numbers, we'll be able to further reduce the expense ratio, and we should be able to deliver a pretty linear path to an EBIT break-even by the end of the year. Now, if I elaborate a little bit on that point, historically, part of our loss was due to subsidies that we give to charging users in the early stage of the charging service business. Since January 2024, we have managed to maintain our net take rate as positive, hence, at the transaction level, become profitable. So that is for our connectivity business. Our energy solution business, meanwhile, will continue to contribute more gross profit as it scales up and maintains a stable gross profit margin. I gave an example in some of my early answers that, for example, our solar business can contribute somewhere between 30%-40% of gross profit margin. Now, if you look at the overhead expense, these expenses are stable and very well controlled. As a matter of fact, in Q1, we've managed to reduce the cost in absolute terms, and we're getting more and more disciplined in expenses and improving our efficiencies in daily operation. So if you add this all together, as a result, with the gross profit from our business lines growing, with our operating leverage improving, and with a stable or even reduced overhead, we should be able to hit our EBIT break-even target by the end of the year. 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 once again for joining us today. If you have any further questions, please feel free to contact us. Thanks. This concludes the conference call for today. You may disconnect your line. Thank you.