The Zhizhong Finance APP reports that on December 11, the 9th Zhizhong Finance Capital Markets Annual Conference grandly opened. This conference is jointly hosted by Zhizhong Finance, a leading domestic platform for Hong Kong and US stock News, and New Wisdom Fund Network, a one-stop service platform for Chinese overseas private equity funds. Hithink RoyalFlush Information Network is a long-term strategic partner, while the financial public relations comprehensive service provider Donova is the exclusive organizer, and the professional financial roadshow live broadcast platform "Daluo Show" provides roadshow support.

During the roadshow at this grand event, Wang Jingzhi, the Capital Markets Director and Investor Relations Director of NaaS Technology (NAAS.US), engaged in face-to-face communication with onsite investors about the company's business development and future outlook.

The following is a record of the survey compiled by Zhitong Finance APP:

The platform's Matthew effect is highlighted in building a comprehensive ecosystem.

NaaS Technology (NAAS.US) is the first Chinese charging service company listed on the US stock market. Currently, China’s Electric Vehicles charging faces several issues. First is the efficiency issue; everyone installs Charging Stations in their own parking spaces, and since they are all slow charging, the efficiency is very low. Second is the impact on the power grid; if all private parking spaces are equipped with Charging Stations, the demand on the entire power grid will be very high, requiring substantial government investment to enhance grid capacity. Consequently, the reality is that 70% to 80% of Electric Vehicles charging in China is completed through public Charging Stations.

For those who have lived long-term in Shenzhen or other large cities, many public Charging Stations can be seen. It is estimated that in the next six years, the entire charging volume for Electric Vehicles will increase nearly tenfold, and with the continuous popularization of Electric Vehicles, there will still be significant growth potential by 2050.

It can be imagined that in the broad Electric Vehicles market, there is a significant demand for charging, and the owners providing public Charging Stations are often quite dispersed, constituting a long tail of charging sites, though there are also prominent chain Charging Stations.

For everyone who drives Electric Vehicles, upon arriving at the Charging Station, it is often found to be unmanned, unlike gas stations where employees help refuel. Typically, the process is self-service, with no one to collect payment. How can the machines be started? Generally in China, it is as simple as scanning a QR code with a mobile phone, using a mobile app to operate the machine and make payments to complete the entire charging process.

As a platform, we assist Charging Stations and end-users in completing the charging process. On the demand side, we have accumulated nearly 14 million users, while on the supply side, as of the third quarter of this year, we have connected nearly 100,000 Charging Stations and 1.15 million charging guns.

So as a platform, what user pain points are being addressed? As mentioned earlier, two core points are that Charging Stations are generally unmanned, making it necessary to figure out how to operate the machines and complete payments. More importantly, when Electric Vehicles need to charge, how can one locate nearby Charging Stations that meet their price requirements and check whether the charging stations are idle?

Generally speaking, our typical users spend about 20 to 30 minutes charging, which naturally leads to issues of charging gun occupancy. Is there a need to queue? How long is the queue? What are the prices at nearby stations? If one is a driver of an operation vehicle or an Online Car-hailing driver, they tend to be more price-sensitive, wondering if it's possible to drive a little further to find a cheaper station, and whether it's a fast charging station rather than a slow one. Additionally, the surrounding stations may offer services, such as dining options, allowing the completion of lunch or dinner while charging. This series of demands is entirely different from fueling scenarios, and the unmanned aspect increases the value dimensions brought by the entire platform, consequently increasing the volume of value generated.

As a platform addressing user pain points, in the words of our founder, "Meituan addresses the issue of satisfying people's hunger, while NaaS Technology meets the need for Electric Vehicles to get fully charged."

In short, our business model is very simple. The average price per kilowatt-hour of electricity is about one yuan, of which roughly 0.6 yuan goes towards the electricity bill, while the remaining 0.4 yuan is distributed between the Charging Stations and us as the service provider. We act as the platform service provider to help direct traffic and provide corresponding services to users.

This type of business has a very strong platform attribute, which actually has a strong Matthew effect, meaning that the larger the scale, the more limited the increase in marginal costs, while the profit's marginal increase effect is quite significant.

We believe our core competitiveness lies mainly in two aspects. One aspect, as I mentioned earlier, is the need for an increasingly larger ecosystem that can secure more charging stations on the supply side to provide charging services on our platform. At the same time, on the demand side, there are an increasing number of C-end users, including B-end users, continuously using our services on our platform.

After each charging action data occurs, how can we integrate this data to ultimately improve efficiency for the stations and help users save money? This is also our long-term competitive advantage on which we rely for survival.

The first point is how to establish our cooperative ecosystem or ecological partners. Firstly, on the platform side, the competitive environment of the whole market has now stabilized. In this context, our established ecological circle on both the supply and demand sides is becoming increasingly broad. On the supply side, we have already connected more than 1.14 million charging guns, and over 80% of leading automotive companies have the underlying data for their pre-installed apps provided by us. Additionally, including State Grid and Southern Grid, on one hand, they sell electricity to our platform, and on the other hand, they also have charging stations. We have also signed many charging stations from the 'national team'.

On the demand side, we have nearly 14 million trading users. Currently, the total number of Electric Vehicles is around 28 million. Additionally, the Energy Chain Group under our listed company has many service collaborations with corporate fleets. Of course, at present, corporate fleets mainly consist of gasoline vehicles. However, as these fleets gradually convert to electric vehicles, they will also become key customers of our listed company.

Including the government side, they also need to make precise adjustments. For example, in the third quarter, we launched a comprehensive regulatory service platform for Electric Vehicles charging in Zhejiang Province. The core purpose is to adjust charging stations throughout the province when electricity load experiences certain fluctuations, as charging has specific supply and demand elasticity. If excess electricity is generated, the provincial government regulatory platform can guide charging stations to implement greater discounts to absorb the surplus electricity.

Consolidate large model data to enhance operational efficiency.

Currently, Electric Vehicles charging accounts for only about 5% of the residential electricity consumption nationwide. However, in the next five to ten years, this figure is likely to approach or even exceed 10%. At present, aside from industrial and residential electricity, Electric Vehicle charging will be the third largest electricity demand market.

So how can we use the various charging stations located across the country to better facilitate flexible allocation for the electrical system? We provide rich data to help the government solve the balancing issues between supply and demand.

As mentioned earlier, the amount of data we generate each quarter is immense, with over 50 million trades each quarter, spread across more than 300 cities nationwide, including rural areas.

Here I want to emphasize that the three major mapping services are all our partners. If you open Gaode, Baidu, or Tencent Maps, you can find the Charging Stations, but they cannot complete the payment process. The data for finding these Charging Stations, including price data, is all provided by our platform.

Of course, it also includes government data. By integrating all these data and building a model, what can we do? For example, if the owner of 3 to 5 newly built Charging Stations feels that demand is continually growing and wants to build more, I can help identify the areas with a supply-demand mismatch that are most suitable for building, consequently shortening the future investment return cycle of the stations.

To give another example, how to implement dynamic pricing at different times of the day, in different seasons, and under various weather conditions? What I mentioned earlier is that the whole operator only takes a portion of the total revenue, but how can we assist our engaged operators in increasing their value?

For instance, if the Charging Stations operated by the operators are located around residential communities, it means they have a large customer base that is relatively price insensitive. If they are located where drivers change shifts, the customer group is primarily made up of drivers who are very price sensitive. The data from our existing large models can immediately provide operators with relevant pricing strategies, ensuring that your demand remains unaffected.

In the pilot stations, we have conducted experiments, and the results have also been very encouraging, as we can help the operating stations increase their revenue by about 20%.

So how can we help Stations achieve better operational management? Stations are generally unmanned, and my platform is directly connected to each machine and each charging gun. How can we carry out predictive maintenance management? This includes identifying which Charging Stations have declining efficiency and need to be replaced, managing some private traffic flows, establishing our membership systems, improving user experience, and assisting the government in relevant policy planning. There are many potential application scenarios.

Currently, we are still processing about 7 to 8 Orders per second, continuously improving the accuracy of our models. We believe that, in the future, we can achieve better results and deliver greater value.

The Industry landscape is extremely fragmented.

The overall structure of our Industry can be divided into several groups. First, the automobile manufacturers produce Electric Vehicles, which are the main demand side, selling directly to individual car owners for charging. The next link is the Charging Stations, referred to as Charging Station companies, which are the Hardware manufacturers. Among the leading Charging Station companies in China, they have certain collaborations with us, meaning they control the underlying operating systems of the Charging Stations, which are integrated with our platform.

Next are the owners of the charging stations, or operators, with well-known names abroad including Charge Point, EV Go, and Blink Charge.

Following that are service providers or service platforms referred to as operators, like our company, which aggregates a large number of Charging Stations onto our platform to push traffic to consumers or to guide traffic to the stations.

Below that are the payment platforms, which primarily consist of two major traditional third-party payment channels in China, Alipay and WeChat.

Currently, the structure of our upstream in China is very fragmented; about 5% of Charging Stations are built by the automobile manufacturers themselves, such as Tesla, NIO, and Xpeng. Therefore, the proportion of Charging Stations controlled by automobile manufacturers is quite small in terms of the market.

The second part includes the State Grid, Southern Grid, and other national teams, such as China National Petroleum and Sinopec, which account for about 10% of the market. In other words, the market is primarily driven by private entities, meaning that approximately 80% of the Charging Stations providing supply to us are private enterprises. This kind of Industry allows for more market-oriented pricing and makes it less likely to result in monopolies.

This is also very helpful for us, as after removing the proportions of the previous two groups, approximately 80% of the remaining market share consists of about half being chain service providers, while the other half represents a very long-tail market. Our supply-side mainstream profile consists of owners who generally operate 3 to 5 Charging Stations on average.

The biggest cost of a Charging Station is still the cost of the site. The investment threshold is very low in first- and second-tier cities as well as in third- and fourth-tier cities, around 2 million to build a Charging Station.

This has led to an extremely fragmented market in the Industry. In this market environment, we have built an online platform to help attract more foot traffic and create a payment environment, thus shaping the current landscape of the Industry in China.

In the third quarter, profitability was achieved on the Business side for the first time.

We released our third quarter performance in mid to late November, which continues to maintain very healthy revenue growth, with a year-on-year increase of nearly 40%. Meanwhile, we have strategically adjusted our Business structure to focus more on the core platform-based interconnectivity business model. In the third quarter, 95% of our Business was contributed by interconnectivity services. The advantage of this business model is its very high gross margin. The market is still in a very early stage, yet our gross margin has reached nearly 60%, and the overall gross margin level continues to grow in a healthy direction.

At the same time, expenses are also continuing to shift towards a healthier direction. The core logic is quite simple, where our expenses mainly consist of labor costs, which are relatively stable. As our revenue grows, the operational leverage effect will gradually become evident.

In the third quarter, we also achieved profitability on the entire Business side for the first time. We anticipate that as the company's Business continues to grow over time, it will consistently create value and enhance our profit levels.

In summary, the core results achieved in the third quarter are as follows: on the one hand, our Charging volume and revenue increased by 36%. We charged approximately 1.28 billion kWh in the third quarter, nearing 1.3 billion kWh. Our Order volume exceeded 50 million, reflecting a 34% year-on-year growth. The number of Charging Stations and Charging guns we connected saw rapid growth, around 40% to nearly 50%.

Leveraging the synergy with the group company.

It should also be emphasized that our entire listed company is under the group company NaaS Technology, which originally started in the fuel sector. The business model is very similar to our current NaaS Technology, but at the beginning, there were not many electric vehicles, so the track it deeply cultivated is fuel vehicles, which has a large existing stock.

Therefore, in our eight years of entrepreneurship, the total number of trading users has exceeded 100 million. Our coverage of gas stations across the country is 22%, and the number of enterprise users on our group side exceeds 8,000. The group's APP is called Tuan You, and its monthly active users exceed 12 million. So one can imagine that the entire flow of funds is actually more than an order of magnitude greater than our charging business, and to be precise, it should be close to two orders of magnitude in advantage.

What kind of synergy effect exists between the group and us? We found that 70% of the users on the charging APP overlap with the users of our Tuan You APP, indicating that there is support from the group.

The logic is also simple. When car owners switch from fuel vehicles to electric vehicles, they no longer need to use our Tuan You APP to refuel, but they often see our advertisements on it, and they can naturally be redirected to our strategic partner Kuaidian’s platform.

Of course, the group also has over 8,000 enterprise-level users, including users from the Agriculture sector, Logistics, such as express delivery, and financial companies, etc. These are all our customers.

These customers are still using fuel vehicles. When they switch to electric vehicles, they will naturally become enterprise-level customers of our listed company. Therefore, the entire business landscape of the group company is actually very complete. On the fuel side, we have four companies underneath, whether it is the consumer-facing Tuan You, the B2B Nengqi Technology, Zhongneng Chain for gas stations, or Nengcheng Technology responsible for the entire supply chain business, our entire group is involved and covered. All businesses related to electricity are concentrated within our listed company.

Lastly, the management team is very young and consists of continuous entrepreneurs, and I won't elaborate too much on that. We have also performed excellently in fulfilling social responsibility; we have achieved first place in China, second place in Asia, and fifth place globally in Fitch's Evergreen ESG Sustainability Rating.

Of course, we also participate in global summits to help the entire Chinese transportation energy sector in energy conservation and reducing carbon emissions. We have launched a carbon points account and promoted carbon universal applications, continuously assisting car owners and even helping society in energy conservation and emissions reduction. This concludes our introduction, and if anyone has any questions, please feel free to communicate.

Q&A Session:

Question: What is the company's current market share? How many Charging Stations are there in the Industry? What is the company's share?

Answer: The algorithm for calculating charging volume varies. Currently, official data discloses that the charging volume for Electric Vehicles in China is approximately over 5 billion kilowatt-hours per month. This data is comprehensive, meaning it includes some charging from private stations and also includes charging for dedicated vehicles and buses. According to data revealed by the China Charging Alliance, as of the end of October, the cumulative number of charging infrastructure in our country has reached 11.884 million units, of which public Charging Stations account for 3.391 million units. NaaS Technology is connected to all public Charging Stations, and our charging volume last quarter was approximately 1.3 billion kilowatt-hours.

Question: How has our operational cost changed with the increase in penetration rate? Has it risen simultaneously or?

Answer: As mentioned earlier, we have made many intelligent improvements, whether through AI or large models. To illustrate, I will provide two numbers. The first data point is that our average ground network team, which is responsible for each newly signed Charging Station, has increased the number of charging guns they manage by 3 times from last year to this year.

The second data point is that if we divide marketing expenses by the number of users trading in the season, it can closely approximate the marketing expenses spent to retain users on the platform; per capita, it has decreased by about 80%.

That roughly answers your question. I cannot specify how many billions the business will grow and how much more investment will be needed since we do not operate on a heavy asset model.