Q2 2023 NaaS Technology Inc. Earnings Call
Yeah.
Yeah.
Okay.
Ladies and gentlemen, thank you for standing by and welcome to the second quarter and first half 2023 earnings conference call.
At this time all participants are in listen only mode. I must advise you that this conference is being recorded.
I'd now like to turn the lights on.
Was that to your speaker today, Ms Cynthia Tan.
C N IR director thank.
Please go ahead.
Thank you operator, Hello, everyone and welcome to <unk> second quarter, and first half 'twenty from Q3 earnings Conference call. The company's results were issued earlier today and are posted online joining me on the call today are Ms. Kathy warn young our Chief Executive Officer, and Mr. Alex <unk>, our president and Chief Financial Officer.
But the base agenda Ms. Wang will provide an overview of our recent performance and highlights and Richard who 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 this call as we will make forward looking statements also please note that this call.
We'll include discussion of certain non I S.
All financial measures Christmas Bird to our earnings release, which contains a reconciliation of non <unk> measures to most comparable ISR measures. Finally, please note that unless otherwise stated all figures mentioned during this conference call are in RMB terms I'll now turn the call over to our CEO .
MS. Kathy one young Kathy. Please go ahead.
Okay, Hello, everyone I'm not C O, causing one it's my pleasure to shower not second culture Hunter and Hunter three earnings result was all field and to discuss our recent developments in.
And the second the culture of Tundra tundra three with continued with July was solid operating and financial performance with revenue more than doubled on a significant loss reduction.
Two hour continue it's not a concern.
Our client base to all the stores you own it.
Claus wireless stage of charging station construction operation and upgrade.
Also while us improving.
Improving operating efficiency.
I was just shake partnership also continued to deepen and expand.
Leading enterprises, such as hunger module cool PR safely real upgrade investments.
The three R. Taco M to M. P accepted two hour into what's your solution and there was some silicon.
We are excited about call of breaking Westlake partners.
But that's a positive development of E rate target in Gulfstream.
Yeah.
No on the cheap storage facilities.
Terrorists.
Well.
It's personal goals.
According to the E. A newly commissioned the installations in the first half of this year alone exceeded the past 20 years total is great inspiration to the H H Qantas fifth grade gigawatt.
He can capacity in operation two that went to import to seven Gigawatts hour.
Pardon us I'm the discourage demand is also growing rapidly.
It's in Pacifico excuse me.
But I wouldn't take gigawatt hours by 2025, what's the market size, reaching over 100, feeling a and b.
In September our tons of junk of three way Sun, We signed a 200 and a call mailing I M. B on the just dollars older in collaborations with that was a company called.
Oh was 300 and 8-K charging station waste on the solid equipment.
And the comprehensive solution.
And so we're just capability of over 100 on the Cookie Michael watch hours in total.
This initial two shows I was just on innovation in station integration on the just dollars technology.
King of cultural stuff, well watch in our entire glitchy photovoltaics courage charging construct.
It's all of the Florida book, our Cobra does choose to lower our full year revenue guidance.
It wasn't a mall.
Our total fund raising year to date 219, one nine.
One mailing U S dollar.
Like a major country enhancing our financial strength and are building our growth initiatives.
Internationally.
We're actually accelerating our global expansion into.
But acquire H, a nightclub 19, notwithstanding stake in Santa Paula.
Leading rooftop solar developer in Hong Kong.
Well I'll go to trusted food.
We also entered into a document a government to acquire charge as well.
A leading European provider of E rate charging so it solutions.
Capitalizing on the strong market at Christmas.
The China capability.
While our country X 10 days of production and if so what's the portfolio under financial stress.
What are they all sort of stretching the standing of Santa Paula and touch on indoor goods punchy religious why promoting the global equation of our product and if so is offering.
Nokia Hyde was.
It was our language just supporting policies worldwide and increasing market demand acutely exploit exploiting the integrated development of charging stations.
The new images with Sun and the smart Iot devices.
Well on the way to impose even thought it.
And just go with collagen.
We saw a 20% market share in the global new energy outside operation on the measurement, so let's take the market and launch of <unk>.
Now I will turn the call over to Alex <unk>, our president and Oh.
A closer look at our operating either financial plumbing.
Thank you.
Yeah.
Thank you Kathy.
Hello, everyone and thank you for joining our call today.
In the second quarter of 2023.
Average solid operating and financial performance.
I also a diversified service offerings, while leveraging the industry, leading scale or charging networks.
Continued to solidify our leadership in the charge in 2015.
Sure.
We have also made significant progress in our transformation journey towards becoming an integrity.
Energy services provider.
Highlighted biology humans energy storage among others.
In the second quarter, we more than double our revenue year over year, while achieving a significant loss reduction.
Specifically, our revenues grew 121% year over year to reach $48 6 million RMB driven.
Driven by our ongoing network expansion in our growing station on the client base across the construction upgrading and upgrade stages for charging stations.
Our gross margin reached 39%.
Representing a notable increase of 22 percentage points.
They're over closely.
This improvement highlights our unwavering commitment to innovative business practices.
Right.
Revenue mix changes.
Additionally, we reduced our net loss by 94% year over year to RMB $334 7 million.
Our net loss margin not narrowed by 385% quarter over quarter.
And our operating loss margin.
372 cents.
Quarter over quarter.
Benefiting from greater economies of scale.
Our networks experienced.
During the quarter.
Total charges volume, increasing by 112% year over year.
Reaching 1228 gigawatt hours.
This accounted for 21, 7% of all charging volume completed two public charges in China in the same period.
Moreover, the gross transaction value conducted through our network rose to RMB, one 2 billion.
Reflecting the 109% year over year increase.
You maintained your sleep.
Total number of holders you always buy a 110% to $53 8 million from 25 6 million in the second quarter of 2022.
Second quarter revenues from offline EV charging solutions increased 153% year over year.
Accounting for a higher share of total revenues compared with the first quarter.
The robust growth of our revenues from offline EV charging solutions.
Mainly driven by the increasing number of clients attracted to our full suite.
One stop EV charging solutions.
And in station construction operation and upgrades.
On August 20, we celebrated the commencement of operation of the first Integra wages energy pulse employee programs for which we are deeply involved in construction.
Working closely with energy.
We offered vehicle owners straightforward efficient and environmentally friendly one stop energy service.
In addition, we signed a strategic collaboration agreement with C&I multifamily, China Limited TICC real estate investment and China resources capital Amendment to extend and expand our partnership roster.
It's hinder yeah, Nancy charging infrastructure and mobility connectivity and therefore their T V models.
You can see ITT.
A top notch you energy charging seven system, incorporating integra age of infrastructure co branded stations online connectivity and a comprehensive insurance services.
With China resources capital management, we're working on integrity.
Energy policy construction innovative centralization of your energy assets.
And have you seen from Eaton to Beijing, and investing into operating digital.
The TV application.
The name of your energy together, promoting green and low carbon energy different on that.
In addition, we're excited to have received a RMB 204 million energy storage larger to be executed in the upcoming few months.
Signifying a solid step forward and properly integrated PV storage charging station development.
And so that gives you more confidence you can achieve.
Our full year revenue target.
And the 500 million to RMB 600 million.
We will outfit over 300 HD charging stations.
518 integrity to cabinets.
Matching comprehensive energy storage management system.
Complemented by intelligent connection services and supervisory antibody synthesis.
The benefits of energy storage are threefold.
First there has been a lack of effective means to take advantage of the peak to value price spreads.
And additional operations during power outages.
Whereas energy storage and transmission charging stations can earn incremental revenues from off peak price differentials, while maintaining uninterrupted operations.
Okay.
Eliminate high power fast strategy.
Conventional approach involves costly greet upgrades increased baseload, which can be effectively replaced with a much more cost effective energy storage solutions.
Third energy storage can also ensure power grid safety.
In cases of false charges charging Halloween the local grid could exceed 1 million walls.
Potentially causing multiple points in the Greek to collapse.
Energy storage provides an effective solution to address the challenges of managing peak loads.
Moving to our capital market Endeavours I'd like to take a moment to highlight some accomplishments that have bolstered our financial strength.
Becky.
Ladies and gentlemen, this is the conference operator, we've temporarily lost connection with the Speaker line. Please hold and the conference will begin momentarily.
[music].
Operator: Ladies and gentlemen, thank you for standing by and welcome to the Naas second quarter and first half 2023 earnings conference call. At this time all participants are in listen only mode. I must advise you that this conference is being recorded.
Cynthia Tan: I would now like to turn this over to your speaker today, Ms. Cynthia Tan, seeing IR Director. Thank you, please go ahead. Thank you, operator.
Cynthia Tan: Hello everyone and welcome to Naas second quarter and first half 2023 earnings conference call. The company's results were issued earlier today and are posted online. Joining me on the call today are Ms. Kathy Wang Yang, our chief executive officer and Mr. Alex Wu, our president and chief financial officer. But the days agenda, Ms. Wang will provide an overview of our recent performance and highlights and Mr. Wu will discuss our operating and financial results.
Please go ahead, Alex I just got Lucky.
Cynthia Tan: Before we continue, I would refer you to our state proper statement in the earnings press release, which applies to this call as we will make for the statement. Also, please know that this call includes discussion of certain non-IFRS financial measures. Please refer to our earning release, which contains a reconciliation of non-IFRS measures to most comparable IFRS measures.
Yeah, sorry, I, just got disconnected in the country.
Yeah.
Now, let's delve into our global expansion strategy.
Our agreement to acquire charge an August marked an important milestone in our globalization beavers.
We're pleased to welcome the charge Amsterdam and team to our platform.
As a pioneer you mean integrity change EV charging solutions.
Cynthia Tan: Finally, please know that unless otherwise stated, all figures mentioned during this conference call are in R&B terms. I'll now turn the call over to our CEO, Ms. Kathy Wang Yang. Kathy, please go ahead.
Specializing in home work and destination AC charging solutions.
We didn't base charge and has a strong reputation throughout Europe .
For over a decade charge and broad portfolio of intelligent sustainable user friendly and particularly pleasing product offerings has been satisfying customers.
Wang Yang: Okay, hello everyone, I'm not CEO, Kathy Wang. It's my pleasure to share our second quarter 2023 earnings results without you and to discuss our recent development. In the second quarter of 2023, we continue to deliver solid operating and financial performance with revenue more than double. And a significant loss reduction. So, to our continued network extension, still in client base of decision owners, across various stage of charging station construction, operation and upgrades, as well as improving operating efficiency.
That's proven by 22% local market share with an established international footprint in certain markets.
Charging times commitment to sustainability is manifested throughout its entire production chain.
Affected by it.
It's a patient in the UN global compact.
There are significant synergies between mass and charge offs.
Charging them can leverage nasty relationship network to expand sales channels.
Well, no and utilized chugging along.
Existing channels to launch affordable H D D C and household storage products.
Wang Yang: Our strategic partnerships also continued to deepen and expand with leading enterprises, such as Hyundai Motor Group, PICC real estate investment, and CRCACCO MGMT, attracted to our inner virtual solutions and one-stop services. We are excited about collaborating with these partners to further prepare the development of e-recharging industry. This year, new energy storage facilities, experience, broad space, expansion of groups, according to the NEA, newly commissioned installations in the first half of this year alone, exceeded the past two years, as total installation to reach 8.63 gigawatts, seeking capacity in operation to 7.7 gigawatts hours.
It's product formula.
Yeah.
In addition, we can reduce child jams cost of revenue and improve its margin through all advantages in the domestic supply chain and procurement.
Well ask yourselves consolidation.
Yeah.
Oh the mall as Kathy mentioned, we acquired 80, 999% final Apollo education in June .
A critical component of our expanding global layout.
Idaho power is Hong Kong lobbyist advanced talks all the time and so it was Florida.
A significant 35% market share in rooftop solar PV development in Hong Kong.
And then the final part of our position we entered the distributed power market in Hong Kong, which broaden our boundaries from charging services to upstream Pollack lump sum is opening a new chapter for energy asset management.
Wang Yang: Tan'an's energy storage demand is also growing rapidly. It's a party to exceed 70 gigawatts hours by 2025, with the market size reaching over 100 billion RMB. In September 2023, we signed a 200 and 4 million RMB energy storage order, in collaboration with several companies, providing over 300 and 80 charging stations with energy storage equipment, and the comprehensive solutions. 14 energy storage capacity of over 100 and 13 microwat hours in total. This initiative shows our stress and innovation in station integrity and energy storage technology, making a crucial step forward in our integrity, photovoltaic storage charging constructs.
We are working on integrity.
Allergy buybacks capital in the market for sponsors.
With shutdowns and assign Apollo Homebase, that's for the European and South Eastern Asia market, we will accelerate the global expansion of all services, while integrating PV and energy storage products and charging solutions and other facilities to drive innovation and sustainability in the new energy industries.
Moving to our second quarter financial results.
Our total revenues reached RMB $48 6 million in the second quarter.
121% year over year.
The rapid increase was mainly the result of the increased mobile like all the volumes and additional capabilities you know all U P. C business established and acquired C. With the first half of 2023.
Our total operating costs were RMB $388 6 million in second quarter.
Wang Yang: These are the further put into our confidence to deliver our full-year revenue guidance. Furthermore, our total fundraising year today to 91 million U.S, dollars, significantly enhancing our financial stress and building our growth initiatives. Intimidantly, we're actually accelerating our global expansion into, we require an 899.99% stake in China power, a leading rooftop solar energy developer in Hong Kong, on August 22. We also entered into additional agreement to acquire charge ads, a leading European provider of e-way charging service solutions, capitalizing on the strong market crisis and China capability, as well as our extended product and the service portfolio and financial stress.
Cleveland about 82% year over year.
This was primarily due to our significant business expansion.
Our net loss attributed to two ordinary shareholders was RMB 354 7 million from the SEC.
I'm quoting off 2019 suites.
Compared with a loss of RMB 5302, and 10 2 million for the same period of 2022.
Based on all current and the preliminary view of our business situation and market conditions.
While subject to change we are reaffirming our guidance that full year 2023 revenues will be in the range of RMB 500 million to RMB 600 media.
Crazy like five to six times from 2022.
To summarize.
<unk>, one stop charging sensors advanced integrated energy systems, and strategic acquisitions, we are well on our way to becoming a leading global energy operation and management service provider.
Wang Yang: We will further strengthen the standing of central power and charge ads in their respective regions, while promoting the global expansion of our product and the service offering. Looking ahead, we will elaborate supporting policies worldwide and increasing market demand, actually exploring the integrity development of charging stations, the new energy system, and smart IoT devices, while evaluating both user experience and service quality. Aiming for a 10% market share in the global new energy asset operation and management services market in long term.
As we move forward.
<unk> committed to providing sustainable energy solutions, while continuously exploring.
You avenues for expansion.
Propelling the industry's ongoing evolution.
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 speaker phone. Please pick up the handset to ask you a question for.
For the benefit of all participants on today's call. If you wish to ask a question to management in Chinese. Please immediately repeat your question in English.
Alex Wu: Now, I will turn the call over to Alex, our president and CSO. For closer look at our operating at the financial performance. Thank you. Thank you, Cassie.
Your first question comes from Kelly Zhao with Jefferies. Please go ahead.
Hello can you hear me.
Oh yeah.
Alex Wu: Hello, everyone, and thank you for joining our call today. In the second quarter of 2023, we delivered solid operating and financial performances. I also in diversified service offerings while leveraging the industry leading scale of our charging network, were continued to certify our leadership in the charging services industry. We have also made significant progress in our transformation journey toward becoming an integrated new energy services provider, highlighted by our team members in energy storage among others.
Yeah, Firstly congratulation about the second quarter to come in at all.
I have two questions 60 is can you discuss the progress of the yours that will power the acquisition how about the integration after the call.
Acquisition closed in June .
Share more color about the progress up to this project.
It really is the question is can you actually talk more about the strategic partnership that you recently develops and how did these 15 with you a long term strategic goals.
Alex Wu: In the second quarter, we more than doubled our revenue year over year while achieving a significant loss reduction. Specifically, our revenues grew 121 percent year over year to reach 48.6 million RMB, given by our ongoing network expansion and our growing station owner client base across the construction, operating, and upgrade stages for charging stations. Our growth margin reached 39 percent, representing a notable increase of 22 percentage points or the over quarter. This improvement highlights our unwilling commitment to innovative business practices that drive favorable revenue exchanges.
Yes.
Yeah.
Okay.
Got it thank you so.
So the two questions one is about Santa Paula integration you have the language about the strategic on premise right.
So now let me address them one by one.
Our final power.
I was wondering very excited now we are finishing in a condition of final power Hong Kong in June .
Since then southern power has a strategically leveraged NASA strengths.
And its presence in Apple's CV and PV.
<unk> made significant progress in both of those areas.
Yes.
On the PD side kind of power completed a two 6 million was rooftop solar project in Hong Kong, which is expected.
Do you have to generate 61 billion kilowatt hours annually.
Alex Wu: Additionally, we reduced our net loss by 94 percent year over year to the 344.7 million. Our net loss margin narrowed by 385 percent quarter over quarter, and our operating loss margin narrowed by 373 percent quarter over quarter, benefiting from greater economies of scale. Our network experienced significant growth during the quarter, with total charging volume increasing by 112 percent year over year, reaching 1228 gigawatt hour. This accounted for 21.7 percent of all charging volume completed through public charging through China in the same period.
<unk> has also secured contracts for nine months projects.
Southern power has over 50 projects under construction actually totaling $10 2 million watts.
Yesterday.
On the UV side, Santa Paula has qualified as a contractor for the Hong Kong government sponsored EV charging at home subsidy scheme.
Okay.
Currently advancing over 40 year projects aiming to cover around 6000 206100 <unk>.
Upon completion.
In addition to that southern power has most of the integration into the basket ecosystem expanding its business in mainland China and in Southeast Asia.
Thermal power and are actively involved in the PV project E. N G County, which are just crimes are under construction and the industrial and commercial PV project.
Alex Wu: Moreover, the growth transaction value conducted through our network rose to RMB 1.2 billion, reflecting a 109 percent year over year increase. And, materially, our total number of orders rose by 110 percent to 53.8 million from 25.6 million in the second quarter of 2022. In the second quarter, revenues from offline EV charging solutions increased by 153 percent year over year, accounting for a higher share of total revenues compared with the first quarter. The robust growth of our revenues from offline EV charging solutions was mainly driven by the increasing number of clients attracted to our full suite one-stop EV charging solutions that cover end-to-end station construction, operation, and upgrades.
Yes ma'am.
So I'm very excited about this acquisition I think.
Integration is well underway.
And as I mentioned before I know, Paula Hi, Meredith and healthy pipeline of projects that will deliver over the coming months and we will generate a healthy.
And and that'd be down for the whole group.
That's my answer for your first question second question regarding the partnerships.
We're very excited.
Q3, new partnerships.
The off Street and Michigan.
<unk> achieved in <unk>.
Quarter.
This aligns with Kinder.
While we aim to have all the charging.
Infrastructure in the mobility services tailored beforehand.
Muslims.
Our partnership with GIC Chi, which is selling off the biggest insurance companies in China, we will work towards prudently a topnotch energy charging for the system.
Alex Wu: On August 28th, we celebrated the commencement of operations of the first Integrated Energy Port in Anhui Province, for which we were deeply involved in construction. Working closely with the energy group, we offer vehicle owners straightforward, efficient and environmentally friendly, one-stop energy service.
<unk> integrated.
Gotcha and co branded stations and also insurance services.
We've China resource capital management, which is an investment fund.
But I'm trying to resource.
We will incubate and investing.
<unk> operates in the LNG infrastructure projects and also looking at potential to securitize your energy.
Alex Wu: In addition, we signed strategic collaboration agreements with Hyundai Motor Group, China Limited, PICC Real Estate Investment, and China Resources, Capital Management, to further expand our partnership roster. With Hyundai, we are enhancing charging infrastructure and mobility connectivity, payment for the European models. With PICC, we are building a top-notch, new energy charging service system, incorporating integrated infrastructure, co-granted stations, online connectivity, and components of the ETIRAN services. With China Resources, Capital Management, we are working on integrated energy port construction, innovative declarations of new energy assets, and everything from incubating and investing into operating digital and intelligent applications within the realm of new energy, together promoting green and low-carbon energy development.
We will be able to leverage our industry expertise and a time of resources capital market.
Our capabilities.
These partnerships if you put them together you can see that we are working very well.
One major OEM, one insurance company and one major commercial real estates team them up here in Boston.
Hobby three opinions, we have always have in mind.
You can pull from the partners that we need to be very pleased.
In the new energy ecosystem.
We will continue to contribute more partnerships spaces and build a strong ecosystem probably can walk them.
Okay.
Yeah.
Thank you 11 again, if you wish to ask a question. Please press star one on your telephone and wait for your name to be announced your next question comes from will Liao with T. On please go ahead.
Alex Wu: In addition, we are excited to have received a R&B 200 and 4 million energy storage order to be executed in the upcoming few months, signifying a service that forward in preparing the integrated PV storage charging station development, and further boosting our confidence in achieving our full-year revenue target of the 500 million to R&B 600 million. We will outfit over 380 charging stations with 580 integrity cabinets and matching comprehensive energy storage management systems, complemented by intelligent sign selection services and supervisory and debugging service.
Hi, This is Leo congratulation for a great performance in second quarter, and first half 'twenty to 'twenty three I have two questions. First can you just talk more detail on the activation with chocolate in India Jet AG in Europe market.
My second question is about the energy storage can you share more color on your energy storage and the charging station business.
My question. Thank you very much.
Thank you. Thanks for asking these questions. So the first question has to do with the childrens population not elaborate on strategy on charge off position.
What kind of questions do is energy storage.
So let me address your first question first.
The acquisition of charging on peoples J T. He expects that we take Europe Europe is the worlds second largest energy market energy vehicle market.
Alex Wu: The benefits of energy storage are threefold. First, there has been a lack of effective means to take advantage of the peak-to-value price spreads and ensure operations during power aggregates. Whereas energy storage integration, charging stations can earn incremental revenues from on-off peak price definitions while maintaining uninterrupted operations. Second, to accommodate high power of fast charging, the convention milk approach involves costly grid upgrades to increase base load, which can be effectively replaced with a much more cost-effective energy storage solutions.
With currency.
One 1 billion in 2023.
The projection is about 2020 phones. So it will be 16 million, New York and thanks Shlomo.
The 65 million.
<unk>.
And then from a penetration perspective, what penetration rates.
E countries in European Union countries.
Has reached 53% in 2023.
Okay to 80% by two in Turkey.
Alex Wu: Third, energy storage can also ensure power grid safety. In cases of fast charging, charging power in the local grid could exceed one million million. Potentially causing multiple points in the grid to collapse. Energy storage provides an effective solution to address the challenges of managing peak loads.
The components as a comparison to.
The almost bumps, China EV penetration rate of 76%.
Hmm T C L.
The two countries.
He used to be the penetration rates.
Most of them are theirs.
There's no way is the highest.
And then 80%.
And Sweden just closely for me.
Alex Wu: Moving to our capital market endeavors, I'd like to take a moment to highlight some accomplishments that have boistered our financial strengths. Back in the day.
Between 65% to 7% to 70%.
So we have plenty of men.
I, maybe wrong, you've gone into the market and the fast growing market.
And <unk> has a E E.
Alex Wu: Ladies and gentlemen, this is the conference operator. We've temporarily lost connection with the speaker line. Please hold, and the conference will begin momentarily. [inaudible] you, thank you, thank you, thank you,[inaudible] Group. Moving to our second quarter financial results, our total revenues reached R&B 48.6 million in the second quarter, up 121% year over year. The rapid increase was mainly the result of the increased network of the volumes and additional capabilities in our EPC business established and acquired, so the first half of 2023.
Decade of experience.
In creating some of the best quality and that's designed for that Oh.
Yes Pete.
Yeah.
And there is strong market condition, Sweden and has established its presence in certain countries.
Oh.
Florida acquisition I'll answer all objective is to make sense to this leading brand and also have access to the sales channels and an 84 months.
Channels in Europe , and so on.
Yeah, we feel particularly exciting.
Excited to have access to it called smells tunnels will enable us to launch new products.
What country they have plans to launch a product like a D C children.
Like energy storage products and PD program. So there's some channels.
We have created a strategic approach for all of our European multi country.
Hum.
Also created a.
That's very clear Entravision test.
Sure.
We have completed.
102 P M.
180 day plan for the integration to happen.
And we will have a small team Oh awesome.
Called the Chief transformation office.
To be present in Sweden.
Hi, James.
So that should lead you to match system.
Well, we're very excited.
Yeah, a lot of opportunities, although can potentially take off on this acquisition.
The first step would take is.
When we accomplish all print programs children being born and so it's almost like I mentioned before.
And second we stopped easily integrate and did you say for that.
If you do it for them.
And I mean to offer comprehensive integrated solution you can get it.
And I'll I'll stop is long to.
These facilitating the energy transactions.
The household level.
Which means we'll be grouping Hudson's Bay.
Potential.
Potential energy trading as a public REIT.
So we've gotten through swaps and we have although it won't be long and finish off with that.
And we will continue although development.
So you are going to close.
And you see a position to achieve almost sketchy coupons.
Yeah.
So that's my answer to your first question second question regarding energy storage.
Sure.
And storage for.
What type of inflation is a.
Sitting in the trucking market.
Vocal phone market is very big today, there are a bunch of 140000.
Stations in China.
We are connected to about 55 on the margin.
We've had that you found since.
So she's logged inflation.
Not all the cities, where the PK and why do you power prices.
Can often generate no commercials.
Does it slow the energy storage to be to be have to be to be commercially feasible.
If we can capture this UBS.
A lot of opportunities, where we can take.
We just announced.
We're going to go out on the 18th.
Energy storage solutions.
380 stations.
A total of 930 <unk> maybe.
Maybe one on <unk>.
Energy storage capacity.
That's an aggregate contract value of over 200 million a hobby.
Which supports off.
The government policies and a growing number of childhood sometime stations we can.
Expect 2024.
5000, charging stations would be suitable for energy storage.
<unk> 1800 agents today.
With potentially translate to a two to 3 billion RMB one off opportunities in Capex right, we can potentially.
Great.
Oh I've just talked about the three models awful long energy storage solutions are important.
In their children.
Next.
We can close them.
Hum.
Analytics intelligent technology capabilities.
We aim to become the largest ethanol producers and just always network, which had been station.
Thank you.
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 all for joining US today, if you have any further questions. Please feel free to contact us Goodnight.
This concludes the conference call you May now all disconnect. Your line. Thank you.
Yeah.
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Okay.
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Yes.
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Okay.
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Okay.
Okay.
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Alex Wu: Our total operating costs were R&B 388.6 million in the second quarter, decreasing by 82% year over year. This was pretty primarily due to our significant business expansion. Our net loss actually due to ordinary shareholders was R&B 364.7 million for the second quarter of 2023, compared with the loss of R&B 53002.2 million for the same period of 2022. Based on our current and preliminary view of our business situation and market conditions, which are subject to change, we are reaffirming our guidance that four-year 2023 revenues will be in the range of R&B 500 million to R&B 600 million, increasing by five to six times from 2022.
Okay.
Okay.
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Yes.
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Alex Wu: To summarize, through expanding our long-stop charging sensors, advancing integrated energy systems and strategic acquisitions, we are well on our way to becoming a leading global new energy asset operation and management service provider. As we move forward, we remain committed to providing sustainable new energy solutions while continuously exploring new avenues for expansion and preparing the industry's ongoing evolution.
Operator: This concludes our prepared remarks for today. Operator, we are ready to take questions. 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 speaker phone, 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.
Okay.
Kelly Zhao: Your first question comes from Kelly Zhao with Jeffries. Please go ahead. After the acquisition clause in June, share more color about the progress of this project. And secondly, the question is, can you actually talk more about the strategic entrepreneurship that you recently developed and how did this decision with your long-term strategic goals of your business? Thank you. So the two questions, one is about Sina Power integration. The other one is about the strategic promise.
Okay.
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Wang Yang: So let me address them one by one. So for Sina Power, I'm going to be very excited. Now we finish the position of Sina Power Hong Kong in June. Since then, Sina Power has strategically leveraged mass strength to strengthen its presence in both TV and the PV, and have made significant progress in both of those two areas. On the PV side, Sina Power completed a 2.6 million watts rooftop thermal project in Hong Kong, which is expected to generate a 31 million kilowatt hour annually.
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Wang Yang: It has also secured contracts for nine most projects. Sina Power has over 50 projects on the construction, currently, totaling 10.2 million watts in capacity. On the PV side, Sina Power has qualified as a contractor for the Hong Kong government sponsored EV charging at home subsidy or EHSS, currently advancing over 14 EHSS projects, aiming to cover around 6,000, so 6,100 parking slots upon configuration. In addition to that, Sina Power has also integrated into the mass ecosystem, expanding its business, both in mainland China and in Southeast Asia.
Okay.
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Wang Yang: Sina Power are actively involved in the PV project in MG County, which is currently under construction, and the Industrial and Commercial PV project in Vietnam. So, I'm very excited about this application. I think the integration is well on the way, and as I mentioned before, Sina Power now has a very, very healthy pipeline of projects that you will deliver over the coming months, and we will generate healthy revenue and a bidon for the whole group. That's my also for the first question.
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Wang Yang: The second question regarding the partnership. We are very excited with these three new partnerships. There are three partnerships that we achieved in the quarter. The first one is with Hyundai, while we aim to enhance our charging infrastructure and mobility services, KLAB for Hyundai's EV models. Partnership with PICT, which is not the biggest insurance company in China, will work towards building a couple of new energy charging service systems, including integrated infrastructure and co-branded stations, and also insurance services.
Wang Yang: With China resource, capital management, which is an investment fund that's backed by China resource, we will incubate and invest in to operate new energy infrastructure projects, and also looking at potential to secure the new energy. We'll be able to leverage our industry expertise and our resources as capital market capabilities. These partnerships, if you put them together, right, you can see that we're working with one major OEM, one insurance company, and one major collector estate developer and investor.
Okay.
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Wang Yang: These are the three pillars that we have all the time in mind as the important partners that we can work with in the new energy ecosystem. We'll continue to build more partnerships in the spaces and build a strong ecosystem that we can work with. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced.
Will Liao: Your next question comes from Will Liao with Tian. Please go ahead. Hi, this is Will. Congratulations for our great performance in second quarter and first half 2023. I have two questions. First, can you discuss more details on the acquisition of charge M and your strategy in Europe market? My second question is about the energy storage. Can you share more color on your energy storage in the charging station business? These are my questions.
Will Liao: Thank you very much. Thank you. Thanks for asking these questions. So the first question is to deal with the charge M's acquisition. That's not a lot of elaborate on our strategy on charge M's acquisition. The second question is to do with energy storage. Okay, so let me answer first question first.
Wang Yang: The acquisition of charge M is a strategic step that we take in Europe. Europe is the world's second largest energy market, the energy vehicle market was currently 8.1 million in 2023. The projection is by 2025, there will be 16 million in Europe and by 2030 there will be 55 million in Europe. And from a penetration perspective, penetration rates in the EU countries and European Union countries has reached 53% in 2023. We spoke up to 80% by 21% of the components and the components into the on the spot China EU penetration rate is about 35% in 2023.
Wang Yang: There are two countries that are highest in the EU penetration rate, both in North Europe. There's no way as the highest is over 80% and Sweden is closely fully with some more between 65% to 70%. So we are acquiring a brand that is a very well developed market in the fast growing market. And charge M has a decade of experience in creating some of the best quality and best design products in the charging industry.
Wang Yang: It holds a very strong market position in Sweden and has established its presence in sitting in countries. For the acquisition, our objective is to have access to this meeting ground and also have access to the sales channels and M8 products. The sales channels in Europe is something that we are particularly excited to have access to because those channels will only go as to launch new products too. We currently have plans to launch products like DC charging products, like energy storage products and PV products through the same channels.
Wang Yang: We have created a strategic approach for our European market entry. We have also created a very clear intervention plan for this commission. We have completed an M182 plan, a 180-bit plan for the integration to happen. We will have a smart team from a local chief's confirmation office to be present in Sweden to help charging to be targeted to the mass system. We are very excited that there are a lot of opportunities that we can potentially take from this acquisition.
Wang Yang: The first step we will take is establishing our presence with chargers, meeting ground and sales channels, as I mentioned before. The second step is to integrate energy storage products and PV products and to offer a comprehensive and targeted solution in Europe. Our last step is we want to be facilitating the energy transactions at a household level, which means we will be grouping houses together and engaging in potential energy trading with a public grid.
Wang Yang: We have added three steps and we are now very happy that we finish our first step. We will continue our development and growth in Europe through organic growth and through acquisition to achieve our strategic growth. That's now to your first question.
Wang Yang: The second question regarding energy storage and charging stations. Energy storage for charging stations is in the shipping and trucking market. First of all, the market is very big.
Wang Yang: Today, there are about 140,000 public charging stations in China. We are connected to about $55 billion. We have identified over 60,000 stations that are in cities where the peak and wavy power prices can generate enough commercial benefit for the energy storage to be to be to be to be commercially feasible. If we can capture this, there is a lot of opportunities that we can take. We just announced that we are going to roll out all 180 sets of energy storage solutions.
Wang Yang: We are at 300 AP stations, with a total of not only 30 million hours of energy storage capacity. That can aggregate contract value of over 200 million RMB. With support of the government policies and a growing number of charges and charges stations, we expect by 2024, 5,000 charges stations will be suitable for energy storage up from 1,800 HG today. This would potentially translate to a 2-3 billion RMB with opportunity capax that we can potentially take.
Wang Yang: I've just talked about the three models of our energy storage solutions are important in the charging context. We can further enhance the systems, the global health, analytics, and intelligence technology capabilities that we're aiming to become more of the largest asset operators of energy storage network for charging stations.
Wang Yang: 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 all for joining us today. If you have any further questions, please always feel free to contact us. Good night.
Operator: This concludes the conference call. You may now all disconnect your line. Thank you. John Wang, Eugene Haier, Ethan Zhang, Wang Yang, Eugene Haier, Ethan Zhang, Wang Yang, Eugene Haier, Ethan Zhang[inaudible] John Wang, Eugene Haier, Ethan Zhang, Yizhen Du, Li Wu, Vivienne Wu, Vivienne Wu, Vivienne Wu, Vivienne Wu, Vivienne Wu,[inaudible]