NaaS Technology, Inc. Q4 FY2022 earnings call

• Energy transformation trend: Traditional energy faces environmental and efficiency issues, while new energy is clean, friendly, safe, and efficient. The energy transition is a global trend. China's EV sales in 2022 were 3.9 million units, accounting for 30% of global sales, and are expected to grow significantly.
• NaaS's charging network: In 2022, Chinese charging network expanded rapidly with a 115% year-over-year rise in total charging volume, accounting for 20% of China's total public charging volume. Ended 2022 with 515,000 chargers in 50,000 stations across over 330 cities.
• One-stop services: Provided end-to-end one-stop solutions covering charging station construction, operation, and upgrading. Served enterprise throughout the new unit value chain. Leveraged technology like EV charging robots with features like connecting to OEM APIs and automatic charging.
• Overseas expansion: Established Asia Pacific and European headquarters in Singapore and Amsterdam, respectively. Hired Allen Dong for European and Middle Eastern operations. Plan to replicate China's EV charging ecosystem success in overseas markets.
• ESG efforts: Released first ESG report in 2022, achieving a carbon emission reduction of about 1.85 million tons in 2022, up 106% year-over-year.

In the fourth quarter, total net revenues reached RMB 29.5 million, up 95% year-over-year. For the full year 2022, net revenues were RMB 92.8 million, an increase of 177% year-over-year. Online charging services were a cornerstone, with gross transaction value through NaaS network reaching RMB 2.7 billion in 2022, a 119% year-over-year increase. Offline EV charging solutions contributed 44% of the revenue in 2022. At the end of 2022, NaaS had connected 515,000 chargers in 50,000 charging stations across over 330 cities, with total charging volume in China growing 115% year-over-year and accounting for 20% of China's total public charging volume.

Full year 2023 net revenues are expected to be in the range of RMB 500 million to RMB 600 million, growing by 5x to 6x from 2022. This forecast is based on the company's current view of business situation and market conditions, subject to change.

Q: About the revenue growth of offline business in this year and next year and which parts support growth.

A: Offline business provides one-stop turnkey solutions across charging station life cycle stages (building, operating, upgrading). Services include big data-backed site selection, hardware/software procurement, EPC, operation maintenance, energy storage, etc. These services have high growth potential, especially in operation, hardware/software procurement, EPC, operation maintenance, and energy storage.

Q: Application scenario and market space of EV charging robots.

A: Short-term use cases include enclosed areas like parking lots, commercial properties. Long-term use case is for autonomous driving. The robot can connect to OEM APIs and detect/plug in charging guns. Will test in interested areas and prepare for commercial use.

Q: Profitability differences between online and offline business segments.

A: For online charging platform, NTI has been improving, with operating vehicles contributing royalty fees and private vehicles contributing takeaway rates. Trend shows improvement towards profitability. For offline solutions, it's naturally profitable as it's B2B services with positive gross margin in all stages, currently in expansion stage but business itself is profitable.

Q: Overseas expansion plans and timing.

A: NaaS is a global company. Marked key regions like Europe, Middle East, Asia Pacific. In Europe, potential M&A strategy. In Middle East, work with local governments. In Asia Pacific, work with energy companies. Aim to establish existence in overseas market and land 1-2 major projects in 2023.

Q: Relationship with Newlink Group and synergies.

A: Newlink Group has 300 million registered users on Tuanyou app, with 70% user overlap with NaaS's EV service users. Newlink covers 25,000 gas stations, 30% of which are interested in constructing charging stations. Newlink's local network helps in maintenance and service business, leveraging their existing network for charging and station management.