NAAS - Earnings call transcript Q1 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the NaaS First Quarter 2024 Earnings Conference Call.

At this time, all participants will be 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. go please and you, ahead. Thank

John Jingzhi Wang

posted Hello, Thank First issued welcome are NaaS and XXXX you, earlier Earnings and were operator. Quarter results Conference to company's everyone, Call. online. today The

today Financial Joining me Chief Officer; Officer. Wu, Officer; Vivian Ms. our Ms. Strategy Wang Ye, Chief Mr. Yang, Executive our are Wu and on our Cathy President call the Alex and Chief

results, Wang recent will agenda, Ms. will Mr. operating performance discuss highlights. today's overview highlights. our provide go For of will Wu and Ms. our financial through and Wu an our

Before non-IFRS earnings statement note will please we continue, IFRS measures. financial which I make applies refer release, release, we you to comparable measures. reconciliation a contains Also, certain to statements. that measures our Please refer this in of safe earnings to harbor non-IFRS forward-looking as call the this includes our most to call which of press the discussions

in conference that figures are all note unless call stated, please Finally, otherwise during RMB. mentioned this

I Cathy, please call will Yang. Cathy ahead. over CEO, Ms. now to go Wang our turn the

Wang Yang

pleasure I'm my Wang achieved XXXX and year-over-year. first revenue our off significant million, XXX% shows developments. everyone. XX.XX NaaS great a our we growth earnings a share increase with start, Yang. to CEO, In discuss recent quarter It's our across you business. is Cathy results quarter, first Hello, XXXX to the of RMB

margin by year-over-year Our XX%. X.X tended is points gross percentage to

energy power as revenue execution operational diversified one the we our lucrative into strong of business significant across strategic our with our reflect streams offerings. and achievements financial comprehensive transform steps, our These making progress solution and

achieve enhancement have our us GTR enabled and connectivity in scale NTR both mobile laid a operational at gains in have competitiveness, for capabilities networks. efficiency and positive the solid overall fundamental foundation Our to

power in broader also dual revenue market. our our comprehensive charging to position innovation energy delivering and approach with and we the engine strengthens drive diversification solutions. operators importing but This ecosystem continuously actively now have Simultaneously, only energy

we The EBIT focused and we revenue maintained translating end our we have by cost our strike we structure. reduction positive have this line, cost efficiency our of are on year. steady month are stride also turn While to bottom to made single growth, the and direct on optimizing have

the investment In year. strong for in improvements has summary, signed performance, of the financial quarter efficiency. the strategic in and foundation connectivity first our XXXX a mobility, of robust With operating rest continued

are long-term We positioned value well and growth for sustained creation.

energy have engine industry charging unique established comprising solutions. dual in model for services charging chain, a and We both

and our the look for sector. in you innovation your energy and to We support trust forward NaaS. continue in continued Thank journey of new leadership

turn Ms. I results. our over closer look CFO, our Now Wu, to at will operating a for things

Ye Wu

hello, and recent I'd everyone. start highlighting Cathy, by our like Thanks, developments. to

drive our continued increasing capitalize well demand revenue Hong to to photovoltaic share emerging growth the market Firstly, This region. Kong market as and on as opportunities. ability in expanded we our in operations growth, stems from our

business. Kong, chargers in company-certified charging capabilities. We're Starting EPC in in along reproposing for services capabilities piloting PV of began and installing effectively with European leveraging and residential our standard the local Hong our resources now our private in April, we EV our existing EPC areas selling piles the community established offering services

projects comprehensive the are operation. region. hardware asset and selection, we'll for XXXX, significant one March In of the largest these provide this several for company Chaoran CPO in collaboration, New successful services, signing Technology, China with of and site reasons. And crucial including our we Energy established in a execution partnership The Central supply

business help where site operations, optimal application selection Firstly, analytics this AI initiative to provide marks services locations. the our of secure in operators large-scale we model

the compatibility charging our online and Secondly, software. systems operations these of our integrate and we'll enhance piles with sale to facilitate hardware the between

also the leveraging approach between recovery enhance to not and operators by only ensures revenue. the operations. but in activities, site cost us online synergy for This can we efficiency offline enables our of thereby share Thirdly, additional

continued joined Open and the non-aggression OIN, at Network, focus have development open protecting the also on patent largest and technological Invention to We source. community intensely

March of applications XX, including countries Japan, and NaaS XX As United United and more across has than XXX XXXX, Thailand, regions, Brazil over Australia. filed the Norway, the States, patent Kingdom,

part highlights Our leverage boost strategy intellectual to infrastructure active to AI capacity. to This models is R&D charging source and a refining participation crucial dedication our which in capabilities, enhance our and technology our our property analytical critical an open of move OIN is for networks. our

strategic technology remains proactive our NaaS at efforts In conclusion, the energy of Kong, Hong in energy initiatives forefront focus on demonstrate and to the these of growth innovation. that the ensure approach new partnerships and driving development sector sustainable solutions. advanced, our and IP And

Alex, with CFO, our give into And that, financials. I'll a floor for to the deeper our dive

Alex Wu

first I'll of our In our increased remarkable quarter, This by revenue year-over-year and quarter mobility Vivian. was of with by review the XX.X business XXXX. connectivity fueled diversified XXX% reaching expanded the primarily RMB Thanks, streams. evolving start first results for a million. a growth revenue

including solutions. business storage Additionally, sustained XXX% RMB renewable to year-over-year Solutions largely our million, XX.X from increased energy management in comprehensive generation, our our delivering to and by energy efforts owing energy revenue Energy solutions,

first advanced increasing strength and demand the Our business In our and XXXX, sustained operations. of underscores our viability the the services. of we model quarter revenue growth for our considerably

XX.X XX% gross RMB to to gigawatt Specifically, transaction the NaaS the increased value year-over-year through hours. million. RMB network number XX% of by X,XXX surged orders billion, increased and to The X.X charging volumes XX%

first the central revenues. focus on our our growth, our strategic expanding our the our revenue increased while which boosted cost to XX.X highlight control gross profit quarter, optimization in year-over-year ecosystem in metrics million. Alongside These new bolstering Xx role energy RMB

up and pricing our Our reflecting of efficiency positive gross margin operational improved by X.X initiatives. impact points our XX.X%, percentage to enhanced also the year-over-year, strategic

we efficiency, can online see rates. net in also improved in operational considerable which refining progress our and gross We made our take

beginning and a positive NTR NTR GTR in for record-high efforts turned in our increased April. witnessed January Our ongoing our

These while growth, operational maintaining controls We improving engagement. leadership revenue our continuously excellence in cost emphasize achievements reducing and losses. steady remain our to customer committed

we This our percentage percentage points XXX to decreased year-over-year of of marking XXX revenue sequentially. a points decrease a successfully percentage operating as and expenses quarter, XXX%,

and reductions to Our revenue firmly set the expanding strategic on us end reach positive disciplined by cost of EBIT approach path goal of to XXXX. our

reducing sustainability costs has combination, this labor in leverage coupled our volumes reduction we With effectively transaction financial advancing powerful are costs. that losses operating actively The goals. and us with increased incentives, enabled continue our to narrowing offer and

becoming management. questions. With strong a the in new This growth, to in energy asset are a cost you. now quarter this conclusion, remarks milestone sustained improved Thank to take significant in today. new we energy our leader ready concludes has positioned In marked continue global for Operator, are growth and revenue well our sector. prepared strategic journey profitability we our towards reductions,

Operator

[Operator Instructions]

[ from Fang comes question first Your Zoe ].

Unknown Analyst

gross Could different some on color business on you share their profit trends? the margin lines and

Alex Wu

Sure. This Alex. is

this question. answer me Let

achieved So important X-point profit encouraging XXXX overall, first improvement we most in margin right? profit to is have from gross gross the an a This XX%, thing. an year-over-year perspective, quarter increase with

look of you the business we have. Now segments if that major at

human the as NTR relatively continues the we infrastructure build these cost business, capital digital and the to our invested mainly before, in fixed. connectivity and explained to as costs expenses are For improve, are

way, on the we of margin pretty And expect actually this a margin way the gross -- the business revenue conservative good and to the have business, we we once been our revenue our consistent, business we improve meaningfully. having by connectivity on in since has recognize business already. this scale So that are connectivity pretty

achieve between pretty gross For our Sinopower Energy in it's margin to due nature, and XX% on XX% mention important market. margin somewhere Hong a we achieved Kong to solar XX% has to to XX% can business, remarkable overseas Solutions its average. normally business But project-based that

analytics where Finally, for a improve our station the fuel those capability pretty margin. improving into to stage capabilities early still operation we're and itself operations inject at the we're the digital business,

I XX% objective XX%. business particular margin think to that a be medium-term between for somewhere will for

Operator

with Kelly next question comes from Jefferies. Your Zou

Min Zou

is Jefferies. X This Zou have from Kelly I'll questions.

market How EV more station color And the with path market? EV on the to the in the car in can be, what's will is EV market, charging charging capture with to regards the investment? you fast-growing new First strategy to trends your sales? the sentiment share XX% penetration

been second sales your marketing the be, and would quarter-over-quarter. reduced have significantly expenses And

how S&M efficiency? So in able are improvement you to Can we achieve continued the expect that?

Ye Wu

only the This you, pointed I'm cities. rightly Thank is Kelly. family going the that ICE this out And undoubtedly, is X% public from in And also, and private from means believe is cars this ICE for penetration and first moment. the only will the to Vivian, the lower-tier increasing to demand see EV as yes, EV trend on answer sales and and transformation we question. increase at process are EV the X%, which vehicle that can that you faster ramp-up to charging. think particularly converted we And that EV of the I from

So believe a whole EV for markets the we development. huge have state still that

in sure. NaaS, for unlock we the business So huge opportunities future, for

noticed means pattern And base different operation business localized, EV highly different structures. customer the and totally side, also and that totally may cost we station that charging supply from traffic charging the which is EV have different

differences above profile. to totally on lead So return different the investment

payback be short So may X EV of years. X.X in cases, period an station the as some to charging as

XX years. as XX other can to in it cases, be While long as

a private SOE. in So of fraction small SOE the of charging participation -- share capital owning the the comparing gas site. and station suddenly, more we station to is see market the on much half from than EV

more increased operation private the charging the station is multilayered and So us. that means the with of collaboration capital participation from EV market-oriented

market to XX% is from becoming data. to XX% in The X fragmented the operators third-party in is station like EV and share -- think, dropped according has market XXXX. Finally, the more charging XXXX top around we more

capture opportunities. Then the fragmented we our ABC trends, market more the can provide. more upstream we strategies above markets, the with that to value adopted So

use The analytic leverage to drive pricing. first us insight cases AI-based that A technology stands enable and enable we the digital capabilities dynamic -- real-time in like for

enable the local regions and are nearly well, business than of X,XXX and -- across China as the Charging We a and engage we different which know we more of CPOs team, is And along markets. the to is, requires of with business knowledge our people, a know to B the know, charging China. refers local us in the market CPOs. XXX in team with market that quantity BD we ground localized equipped

C our in EV the finally, China. connectivity. We've stations charging the market-leading goes And EV to number connected of and drivers to

bring As network, and the could drivers of to comprehensive the EV offering owners. this a continue we services expand to station

therefore, the the can believe market continue expand that opportunities seize we our above market we well to capabilities, share. and based So on

Alex Wu

of question. have the still second Sorry, we the half

new acquiring sales to is and down China. major existing scale. stages the We've in So they honored go marketing as online of a marketing big acquisition second with you EV costs customers cost, of built early the see leading are company customers. the retaining a a the the company, with related those the bigger right? stations pretty network In providers. we've and charging of sales company, across and half will Typically, all the new grow the side, major high As to but OEMs. ecosystem EV mainly tend map expenses worked of the we've into that a question XX% And are the platform invested together and/or includes much [ ] customer in providers

and us parent users of manner. With in our XX% organic our the market-leading from an synergies company acquire help this branding, new ecosystem,

make and subsidies, user algorithm to and retention, translates in retaining giving subsidies and AI-based customer on to and reliance in continued For better investment models return help then decisions a user lower in marketing customers. existing us our sales our iteration dollars which smarter from improvement in

the together, you're a think costs. cost analytical also business quarters. in are see are especially a of continuing lower going in be and doesn't adding sales our the elements more large our expanding number sales we that These and that of to to finally, require EV of lines, percentage leverage And space capabilities marketing marketing coming I

Operator

] King Your next from [ San Goldman Sachs. with question comes

Unknown Analyst

pricing both and in perspective? the services charging trend discuss you long-term for market the Can short-term

Wang Yang

I'm it. observations. and And question, think to here happy a are it's I my big some of answer very very

of rate we value believe the short that stable consistently generally following take term, And reasons. charging are still for price that for we gross plenty seeing are term, EV been providing for the past means EV has months, charging. But we Firstly, more over which for the long market market. prices for a the to improving, the the several has our upside

there. attractive has that is the only First, base I price of cars. think XX% even EV still of the mileage doubled, if to the cost equivalent XX% EV is of the ICE charging Thus, per

EV to the public in their private cars and at secondly, drivers station. charging family penetration getting charge increasing used fast And at pace are car more is

think. and are price-sensitive, So we less getting less thus, users

lastly, price be $X consumption. valid consumption a to markets can the electricity and household still developed electricity large hours, or And kilowatt charging in even the flexibility and EUR peak of price comparing where consumption, energy per to has China comparing upside. X Even the to the like more the very to the has the charging out transportation and industrial stage

that features to could So freedom believe that of still market the room on we is I put more these believe charging the there policymakers prices participants. simply lot for my pricing And the is, leverage pricing all to trends about increase. give and views to a

Operator

[ from Jane ] question with Hu next Your UBS. comes

Unknown Analyst

Dear management, have one I question.

X R&D the could your business the improvement? to property intellectual your You efficient growth have And progress and how to focus earnings will the release. in highlighted and What X patent be years? next that translate your in in

Wang Yang

R&D And have engineering and will team Definitely, operation, our our enabler of business than digital is XXX online our our key are models. R&D the business more in truth our analytics develop be our team, for energy tours -- forces the this and employees the be digital Yes. cornerstone key will asset is operation monetization. we which to data development. And capabilities

a AI different can models R&D team developed of scenarios. business to also has segments on be variety and applied Our different business the that

charging most stations. to For locations up location can set ] new model [ find AI example, the our the energy help asset to stress-free investors appropriate

AI in enable expand model pricing data business could And station. our optimize of different could efficiency And this monetize similarly, the also and digital the us pricing on real-time order based to charging the maximize business traffic frontiers. the analytic to through dynamic with models our the charging

build-out we with fast example, are enabling the AI digitally EV location trains with and to capture ] with infrastructure hardware stress-free sales model, solutions our For [ able charging EPC.

pricing station efficiency the with we of operational AI additionally, where dynamic also we to energy with model, charging we're of drive our especially plus increased and advantages. fuel R&D higher efficiency NaaS' And And expanding of of efforts. upside our continue confidence of in in-depth believe the is R&D, the improved capture our sector very our with firmly level that business operation the will expansion R&D important I business can Thus, station. competitive one AI the

Operator

Ethan comes from Zhang Your next question with Nomura.

Ethan Zhang

X have questions. So I

First is take rates. regarding the

your we noticed gross QX net take some rates have So take rates. and regarding trends positive

quarter So year? to this take how can as as we of expect these well rates rest perform in the second the

synergies your And my is the parent second question regarding business your with of group.

So from your Newlink this drive Group year? should see this to in how your we contribution business

Alex Wu

answer answer and will will Vivian second question, first I your your question.

since consecutively focus For GTR rate and put NTR of company and lot September take the to XXXX, NTR, we've the GTR. the improving in NTR expanding our managed has improve a while

our both April. our since NTR in earnings historical in and we disclosed As report, peak has listing reached GTR

things of space. we've couple done a are there that that So in

user a operators. as we advantage our network to with the CPO higher the GTR GTR, our have expanding and operator increasing negotiate base, we're For

report, power and As the bring to side increased our we to disclosed that is our in the GTR. getting therefore, to higher And GTR traffic localized. space therefore, further believe fragmented supply record more And operation value we and have the getting bargaining is and market earnings operators high. perspective believe we that more can from we and improve has an higher. the acquisition We

subsidies. the derived been side, high. a new improved optimize from On and to NTR of The to net the extended achievement level NTR are the positive the XXXX able to capability user mainly rate take we're has since beginning achieve now a

a specific meet have users. program we more loyalty demands different can membership from that example, of deployed types For

reach dynamic X% We fueling also the That further mature from our leveraged is can on gas platform somewhere efficiency real-time industry. by NTR charging Newlink, optimizing to AI a have technology in pricing. that is benchmark mobile our operation the gas operators Experience considered. current be between company our X% improve app, the can of filling to that the

to on And to we the as NTR quarters working come, and next NTR bring to GTR even come. continue months both for potentially think can will higher be I the and

Ye Wu

our the breakeven, second reached NewLink that net to want answer emphasize excluding I'll Group, I if question. parent already NaaS. firstly, profit And has company,

we this whole significant So And help the following is also I think very company. our think the business aspects for could goals. to achieve NaaS

means has development. Firstly, segments could as a net as I whole which the Newlink profit to reached Group support breakeven, the rest mentioned, business business of more the have financial resources of NaaS a

the platform parent traffic cars when could online our And of EV traffic group's large on portion our of and so from And selling we secondly, to conversion. enjoy from organic Group's since to group's is fact, without and needs has new conversion. user ICE XX% much Newlink flow, as this larger platform incentives users a organic are traffic of marketing a matter actually parent acquired our switch

synergies these energy electricity process is in between So and huge. oil transition the

business last models similar in group, business of least, but our then, And parent the our other not are quite NaaS. to Newlink, line

we capabilities more in therefore, cost and have sharing control rental team sharing. could So

more So And this accelerating excited to will future. also to synergies of profitability the see continue very NaaS. great in also help be in the we're a

Ethan Zhang

I follow-up. have a

had reach will this of breakeven end that So you mentioned by the year. think I you

this can can this you on help more that could we assume this target this like profit unchanged achieve goal? And So that to to reduction colors us on are give we cost still breakeven? also, reach methods

Alex Wu

good a question. follow-up very That's

confident of objective We deliver year. breakeven end result. very We're that to on EBIT that are the the the track that confident monthly right by we'll we're achieve important

I we path linear a have to the be we'll the reduced further we be our reduce able deliver to ratio, in in As pretty breakeven and should we have of to quite results, expense EBIT significantly. numbers, by end able expense year. published QX QX believe our ratio

point, that maintain charging managed I rate have gave the due become if subsidies bit users to as little Hence, on level charging Since loss profitable. of Now in January take elaborate we to we stage part early XXXX, transaction a was historically, of that at net to service our our business. the positive. the

So our connectivity for business. that is

continue somewhere Energy stable scales business example more maintain of gross our margin. up early XX% as profit for Our of I an gave solar gross gross contribute in some that, profit can will my margin. meanwhile, to profit contribute and a business, to example, Solutions answers between XX% it

look if overhead very expenses these and are controlled. at expense, stable the Now you well

As cost we the efficiencies to a matter more disciplined and of fact, QX, we're getting reduce more in expenses in daily managed absolute in and improving and terms, operation. in our

all leverage the as add So with reduced hit overhead, by improving we even business stable operating gross able growing EBIT end result, target a together, this the year. breakeven should be with with if a of or our from our you profit lines our and to

Operator

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

John Jingzhi Wang

again Thank for us today. you, joining once

If to you contact Thanks. free please feel us. have further questions,

Operator

call the today. conference concludes This for

you. You may Thank disconnect your lines.

NaaS Technology (NAAS) 10 May 242024 Q1 Earnings call transcript