New Year's Strategy Roadshow Record | NaaS Technology, Inc. Sponsored ADR (NAAS.US): Strategic focus on interconnection business, operating side profit margin nearly 60%

On December 11th, the 9th GMTEight Capital Market Annual Conference was grandly opened. The conference was jointly organized by GMTEight, a leading Hong Kong and US stock information platform, and New Wisdom Fund Network, a one-stop service platform for Chinese overseas private equity funds. Hithink RoyalFlush Information Network acted as a long-term strategic partner, financial public relations comprehensive service provider Donova exclusively undertook the event, and professional financial roadshow live platform "Daluyan" provided roadshow support. During the roadshow at the conference, Mr. Wang Jingzhi, Director of Capital Markets and Investor Relations at NaaS Technology, Inc. Sponsored ADR (NAAS.US), had a close face-to-face communication with investors on the company's business development, future prospects, and other topics. Here is a summary of the research transcript: Platform's Matthew Effect Highlights Building Comprehensive Ecosystem NaaS Technology, Inc. Sponsored ADR (NAAS.US) is the first stock of Chinese charging services listed on the US stock market. Currently, there are several issues facing vehicle charging in China. First is the efficiency problem - most people install slow chargers in their parking spots, resulting in very low efficiency. Second is the impact on the power grid. If every private parking spot had a charger, it would put a high demand on the grid, requiring the government to invest more in increasing grid capacity. As a result, 70% - 80% of new energy vehicles in China are charged using public chargers. For those living in cities like Shenzhen, you can see many public charging stations. It is expected that in the next six years, the volume of new energy vehicle charging will increase nearly tenfold. As the popularity of new energy vehicles continues to grow, there is still a lot of room for growth by 2050. In a wide market of new energy vehicles, there is a great demand for charging, where owners of charging stations are often decentralized, with some being part of larger chains. If you drive a new energy vehicle and arrive at a charging station that is unmanned, similar to a gas station but without staff to assist, how do you start the charging process? In China, users can directly scan a QR code on their phone to activate the charger, make payments, and complete the charging process. As a platform, we help facilitate the charging process between charging stations and end-users. We have approximately 14 million registered users and have connected around 100,000 charging stations and 1.15 million charging points as of the third quarter of this year. As a platform, we aim to address the pain points of users by providing a range of services related to charging, such as finding available charging stations, comparing prices, and identifying fast charging options. This level of service is different from traditional gas stations, as it is unmanned and requires users to manage the process themselves. Our business model is simple - for every RMB spent on a charge, around 60% goes towards electricity costs, and the remaining 40% is divided between the charging station and our operational services. Our platform helps direct users to the stations and provide them with the necessary services. This business model has strong platform characteristics, as the larger the scale, the lower the marginal cost, leading to increased profitability. In terms of competitive advantage, we focus on expanding our ecosystem to attract more charging stations and users to our platform. We aim to integrate data from each charging transaction to help increase efficiency at charging stations and help users save money - this is our long-term competitive advantage. In conclusion, building a cooperative ecosystem and partnerships is crucial for our platform's growth. We have established partnerships with over 1.14 million charging points and have integrated data from over 80% of top vehicle manufacturers. National power grid companies also work with us to sell electricity and provide charging stations.There are many "national team" charging stations.On the demand side, we have nearly 14 million transaction users, and now the total number of new energy vehicles is about 28 million. At the same time, the Energis Group above our listed company actually cooperates with many enterprise fleets, of course, most of the fleet is still oil-based, but gradually as these fleets switch to electric vehicles, they will also become core customers of our listed company. Including on the government side, they also need to do precise regulation. For example, in the third quarter, we implemented a comprehensive monitoring service platform for new energy vehicle charging in the entire Zhejiang province. The core purpose is to, in the whole province, if there is a certain fluctuation in electricity load, dispatch the charging stations to perform peak shaving, because charging has a certain supply and demand elasticity. If there is excess electricity generation, the provincial government's regulatory platform can guide the charging stations to provide greater discounts to absorb the excess electricity. Strengthening the value of large-scale data to improve operational efficiency Currently, the total amount of electricity consumed by new energy vehicle charging nationwide is only about 5% of residential electricity consumption, but in the next five to ten years, this amount is likely to approach 10% or even exceed it. Currently, apart from industrial and residential electricity consumption, new energy vehicle charging will be the third largest electricity demand market in the future. How can we use the data from charging stations spread across the country to better flexibly allocate electricity in the power system? We provide rich data to help the government solve the balance between supply and demand. As mentioned earlier, the amount of data we generate every quarter is very large, with over 50 million transactions per quarter, distributed across over 300 cities in China, including rural areas. I want to emphasize here that the three major map companies are our partners. If you open Amap, Baidu Maps, or Tencent Maps, you can find charging stations, but they cannot complete the payment process. The data about these stations, including the price data, is provided by our platform. Of course, including government data, integrating all these data together, building models, what can we do? For example, if a charging station owner who has built 3~5 charging stations feels that the demand is still increasing and wants to build more, I can help you find the places where there is a mismatch between supply and demand, where it would be most suitable to build, and the investment return cycle for the station in the future will be shortened. Another example, such as how to dynamically price at different times of the day, different seasons, and different weather conditions? As I mentioned earlier, the operator only takes a portion of the total revenue, but how can we help the operators we attract to increase their value? For example, if the charging station operator operates around residential areas, it means that their large customer base is relatively insensitive to price. If they operate near places where taxi drivers change shifts, their main customer base might be taxi drivers who are very price-sensitive. With the large-scale data we currently have, we can immediately provide corresponding pricing strategies to the operators, which will not affect their demand. We have also conducted experiments at pilot stations to help increase the revenue of the operating stations by around 20%. So, how can we help stations operate better? Stations are generally unmanned, and my platform is directly connected to each machine, each charging gun. How to do predictive maintenance management? This includes identifying charging piles that have reduced efficiency and need to be replaced, as well as some private flow operations, our membership system, user perception enhancement, and helping the government with policy planning, there are many potential applications. Of course, we are still continuously improving the accuracy of our models by generating approximately 7 to 8 orders per second, and we believe that we can do better in the future and create greater value. Industry structure extremely decentralized The general structure of our industry is divided into several groups. The first is the vehicle manufacturers that produce new energy vehicles, the main demand side, selling directly to individual vehicle owners for charging. The next link is the charging pile manufacturers, we call them pile companies, which are hardware manufacturers. In China, the top-ranking pile companies we have some cooperation with, meaning they control the underlying operating system of the stations and are integrated with our platform. Next is the owners of charging stations, or operators, who are more well-known internationally such as Charge Point, EVgo, and Blink Charge. Then there are service providers or service platforms such as us, and we aggregate a large number of charging stations on our platform, provide consumers with power or drive traffic to stations. At the bottom is the payment platform, in China it is the two major traditional third-party payment channels, Alipay and WeChat. Currently, in our upstream in China, the market structure is actually very decentralized. About 5% of the charging stations are built by vehicle manufacturers themselves, such as Tesla, NIO, and XPeng. So the proportion of charging stations owned by vehicle manufacturers is actually very small in the market. The second group is the state-owned companies like State Grid, Southern Grid, PetroChina, Sinopec, etc., accounting for about ten percent. In other words, the market is mainly participated by private entities, approximately eighty percent of the stations providing us with supply are private enterprises. For such an industry, there will be more market-based pricing and less likelihood of a monopoly. This is very helpful for us, after deducting the proportion of the first two groups, in the remaining close to 80% of the market share, approximately half are chain service providers, and the other half are the very long tail of the market. Our mainstream supply side profile is that the average owner operates 3~5 charging stations. Because chargingThe biggest cost for a charging station is still the cost of the site. In the outskirts of first and second-tier cities, as well as third and fourth-tier cities, the investment threshold is actually very low, and it costs only about 2 million to build a charging station.So it led to the industry actually being a highly decentralized market. In such a market environment, we helped to build an online platform for it, helping it to attract more customers, complete payment transactions, so the overall industry landscape in China is like this. Achieved profitability for the first time in the third quarter We released our third quarter results in mid to late November, still maintaining very healthy revenue growth, close to a 40% year-on-year growth rate. At the same time, we strategically adjusted our business structure to focus more on the core platform-based interconnected business model. In the third quarter, 95% of our business contributions came from interconnected business. A good aspect of this business model is that its gross profit margin is very high. Currently, the market is still in a very early stage, and our gross profit margin is close to 60%, with the gross profit level continuing to grow in a healthy direction. At the same time, expenses continued to shift towards a healthy direction. The core logic is very simple: our expenses are mainly composed of labor costs, which are relatively stable. With the growth of our income, the leverage effect of the entire operation will gradually become evident. In the third quarter, we achieved profitability for the first time in our entire business. We expect that in the future, with the continued growth of our business, we will continue to create value and increase our profit levels. In summary, the core achievements we made in the third quarter are as follows: on one hand, our charging volume and revenue increased by 36%. In the third quarter, we charged about 1.28 billion kWh, close to 1.3 billion kWh. Our order volume exceeded 50 million, a 34% year-on-year growth. The number of charging stations and charging guns we connected also grew rapidly, by about 40% to nearly 50%. Leveraging synergy with the group company It should be emphasized that our listed company has a group company called Nenglian Group, which originally started in the field of refueling. The business model is similar to the current NaaS Technology, Inc. Sponsored ADR, but at the time of establishment there were not many electric vehicles, so they focused on gasoline vehicles, which have a larger stock. So, over the eight years of our entrepreneurship, the total number of transaction users has exceeded 100 million. Our national coverage of gas stations is 22%, and the number of corporate users on our group side is over 8,000. The group's app is called Tuan You, with a monthly active user count exceeding 12 million. Therefore, it can be imagined that in terms of overall transaction volume, it is actually on a different scale compared to our charging business, approaching nearly two orders of magnitude advantage. What synergies exist between the group and us? We found that 70% of the users on the charging app overlap with the users on our Tuan You app, which indicates that there is group support. The logic is simple: when a car owner switches from a gasoline car to an electric car, they no longer need to use our Tuan You app for refueling, but they may still see our ads on it. With the strategic cooperation with our partner Kuaidian, they naturally come over. Of course, on the group side, there are over 8,000 corporate users, such as agricultural users, logistics users, express delivery companies, financial companies, etc., all of whom are our clients. These clients are still using gasoline vehicles now, but when they switch to electric vehicles, they will naturally become enterprise-level clients of our listed company. So, the group company's overall business landscape is very complete, with four companies under the gasoline side and all electric-related businesses centralized on our listed company. Lastly, the management team is very young and has been continuously entrepreneurial, so I won't go into too much detail. We have also performed very well in terms of social responsibility. In the Huifeng Evergreen ESG sustainability rating, we ranked first in China, second in Asia, and fifth globally. Of course, this also includes our participation in global summits to help the entire Chinese transportation and energy sector save energy, reduce emissions, and reduce carbon emissions. We have introduced carbon credit accounts, promoted carbon-inclusive applications, and continue to help car owners and society as a whole save energy and reduce emissions. This is our introduction, and if you have any questions, please feel free to communicate. Q&A section: Q: What is the company's current market share? How many charging piles are there in the industry? What is the company's share? A: The data on charging volume has different algorithms. Currently, official data reveals that the total monthly charging volume of electric vehicles in China is approximately over 50 billion kWh. This data is comprehensive, meaning that it includes some private charging piles as well as those used by specialized vehicles such as buses. According to the data disclosed by the China Electric Vehicle Charging Alliance, as of the end of October, the total number of charging infrastructures in China has reached 11.884 million units, with public charging piles accounting for 3.391 million units. NaaS Technology, Inc. Sponsored ADR connects only public charging piles, and our charging volume in the last quarter was approximately 1.3 billion kWh. Q: As penetration rates increase, how does the operating cost of our personnel change? Does it increase in sync? A: As mentioned earlier, we have made many intelligent upgrades, whether using artificial intelligence or large models. I'll give you two data points to help you understand. The first data point is that the average number of charging guns per ground team member, that is, the colleague responsible for signing new charging stations on the ground, has tripled from last year to this year. The second data point is that if we divide the marketing expenses by the number of transaction users in the quarter, we can approximate the marketing expenses required to retain users and have them transact on the platform. The per capita amount has decreased by about 80%. That's roughly the answer to your question, I can't say how many billions more we need to invest as the business grows, we are not a heavy asset model.