NAAS

• Achieved positive non-IFRS net profit for the first time in a single quarter in Q3 2024, with non-IFRS net profit reaching RMB20.6 million. • Core charging services revenue grew 36% year-over-year to RMB42.37 million. • Gross margin improved for four consecutive quarters to an all-time high of 57% in Q3 2024. • Accelerated strategic shift towards core charging services, leveraging technological capabilities and analytical insights. • Significantly reduced operating costs; selling and marketing expenses as a percentage of revenue decreased to 67% in Q3 2024 from 160% in Q3 2023. • Number of users transacting through the NaaS platform grew by 30% year-over-year, with user activity hitting a record high. • China's new energy vehicle market continues to grow rapidly, with September 2024 seeing record production and sales of new energy vehicles. • Priorities for Q4 2024 and full year 2025 center on profitability, scale, and technology, focusing on interconnectivity charging services and leveraging technology and innovation.

• Continue to strategically focus on interconnectivity charging services, leverage technology and innovation to support growth on both supply and demand side. • Capitalize on scale to strengthen industry position and enhance profitability by capitalizing on economies of scale. • The goal is to deepen efficiencies and keep gross margin strong, with confidence in sustaining positive trends by expanding high-margin services and leveraging AI-driven efficiency and platform scaling.

The core charging services business reported revenues of RMB42.37 million in the third quarter of 2024, a year-over-year increase of 36%. Energy Solutions revenue was RMB0.56 million. The core charging services segment contributes significantly to revenue, with its 36% year-over-year growth. The gross margin reached an all-time high of 57% in the third quarter, driven by the focus on high-margin core charging services.

Q: Could you elaborate more on how you are able to make progress on gross profit and margin improvement in third quarter this year and what we could expect in the future? And for the improving operational efficiency this year, could you tell more about operational expenses trend and how you could significantly narrow your operational loss this quarter?

A: Steven Sim responded that in Q3 2024, gross profit increased 19% to RMB25.1 million from RMB21.1 million Q2 quarter-on-quarter, with gross margin reaching 57% from 38% in Q2. Margin growth due to strategy focus on high-margin revenue and cost control. Operating expenses saw reductions: selling expenses decreased from RMB50.9 million in Q2 to RMB29.7 million in Q3, administrative expenses had 15% reduction from Q2 to Q3. Operational loss reduced by 44% compared with last quarter, total operating losses decreased by RMB39 million from Q2.

Q: It seems your revenue composition is shifting rapidly and the margins are improving due to your strategic focus on your core charging service. Could you please talk about the background and why you made that decision and how has it been impacting the company's operations and financials? And what competitive advantage does NaaS plan to leverage to maintain its leadership?

A: Steven Sim stated that the strategic focus on core charging service realigns thinking to increase platform value. Energy Solutions business was phased out as it required heavy investments and low margins. This shift led to gross profit margins reaching 57%. Competitive advantages include advanced AI-powered analytics for real-time insights, strong partnerships with ecosystem players, and an asset-light platform enabling scalable growth.

Q: First of all, very happy to see NaaS has finally seen some positive non-IFRS net profit for the first time in this quarter. And moving forward, can we expect sustainable profitability in the long run? And regarding key trends in user subsidies and how they've been impacting the company's overall profitability?

A: Steven Sim said Q3 marked significant milestone with positive non-IFRS net profit. Confident in sustaining profitability by expanding high-margin services, leveraging AI-driven efficiency and platform scaling. On user subsidies, since 2024, gradual reduction in subsidies led to higher net and gross take rates, fostering sustainable revenue model, and user growth continued despite subsidy reduction.

Q: We saw NaaS has achieved a significant increase in the charger connections, which is higher than the industry average growth rate. What do you think -- how do you attribute this fast growth to and how is NaaS positioning yourself as a leader in China's expanding EV charging network?

A: Steven Sim attributed the fast growth in charger connections to technological innovation, specifically the AI-powered NEF system which optimizes station operations and site selection. Strategic partnerships and advanced technology help in quickly expanding the network, positioning NaaS as a leader in China's EV charging market by creating a strong, connected network with smart site placement and efficient operations.

Q: NaaS' recent partnership in Fujian Province has expanded the company's presence in key cities. How does this regional expansion contribute to NaaS' long-term strategy? And how is the company's AI-powered technology enhancing the user experience and operational efficiency for regional charging operators?

A: Steven Sim said the Fujian partnership strengthens regional presence, extending coverage to key and smaller cities. This expansion is part of creating a highly interconnected EV charging network. The AI-powered NEF system enhances user experience by providing real-time charging station availability, predictive maintenance, and optimized site selection, while boosting operational efficiency and profitability for regional charging operators through dynamic pricing based on real-time demand.