NaaS Technology, Inc. Q1 FY2023 earnings call

• On June 13, launched the virtual power plant platform, which integrates charging stations, chargers, and millions of EV users into the power system for efficient power supply-demand matching. • Developed an AI-driven Digital Energy Asset Management System (DEAMS) for load forecasting, operational strategy optimization, etc., with over 20 patent applications submitted, and expected to deploy in the second half of 2023. • Signed an agreement to acquire over 89% stake in Sinopower, a leading solar energy project developer in Hong Kong, entering Hong Kong's distributed solar energy sector. • Completed an important HPO transaction on May 31, 2023, with support from notable investors.

In the first quarter of 2023, NaaS' total revenues reached RMB 36.2 million, a year-over-year increase of 150%. Revenues from online EV charging solutions grew by 145% year-over-year. Total operating costs in the first quarter were RMB 149.8 million, up 37% year-over-year. The net loss for the first quarter was RMB 109.7 million, compared to RMB 99.3 million in the same period of 2022.

• Reaffirmed that full-year 2023 revenues will be in the range of RMB 500 million to RMB 600 million, representing a 5 to 6 times increase from 2022.

Q: Would you kindly elaborate a little bit more on the acquisition of Sinopower, especially for the synergies with our current business as well as current mainland market? And also like in the future, what are the other acquisition directions that you're looking at?

A: Sinopower is a leading rooftop solar PV developer in Hong Kong with a strong market share. We can work with Sinopower to strengthen its capabilities in Hong Kong and globally. We plan to expand Sinopower's capabilities in charging solutions in Hong Kong and other markets. We are looking to expand in Europe, the Middle East, and Southeast Asia.

Q: First of all, congratulations for our great performance in the first quarter. And I have 2 questions about our business. First, what do you think of the future change of charging services? And second, about our energy storage business, please share your focus for energy storage business.

A: On charging services: Service fees are a result of demand and supply; with increasing EV adoption, service fees may rise in the coming years. On energy storage: Excited about energy storage in charging stations; EV charging volume is expected to significantly increase in the future, and energy storage solutions in charging stations have a strong commercial case due to price gaps between peak and valley, with work already underway on such solutions.

Q: Thank you for your team presentation. I missed the projected timeline of your virtual power plant platform and the automatic EV charging robots. And how are they going to impact the company's financials?

A: The virtual power plant platform was launched on June 13, 2023; currently leveraging data for algorithm training. The automatic charging robots prototype was launched in April, and we plan to launch a commercial one before Q4. Revenue from charging robots is still 1-2 years away, but the virtual power plant is already involved in electricity trading and procurement projects, contributing to revenue streams.