Good afternoon, everyone, and welcome to Far EasTone 2025 fourth quarter investor conference call. We have with us today our President Chee and CFO Sharon.

Both will share updates on [unclear] and 2026 guidance. Before we begin, I would like to remind everyone to pay close attention to Safe Harbor statement on the first page of the presentation.

Thank you for your attention, and now let's proceed with Chee's presentation. Thank you.

Thank you, Gary. Good afternoon, everyone, and happy Chinese New Year to everyone again.

All right, we would like to report to you, our fourth quarter performance and, the the the entire year of 2025. Actually, we have, had a good year, and we, we delivered good results.

For the fourth quarter, we have some new record highs. If you look at, on the left-hand side, the fourth quarter, our, revenue comes to 32.68, billion, and that actually is also the highest quarterly revenue that we have ever scored.

Then in terms of the YoY, it's a more than 12% [increase?] , is also 8% more than our targeted, revenue.

If you look down, all the way down to the EPS, the the fourth quarter is pretty impressive. If we look at the full year, we have achieved 5.5% YoY, even though our BOD was, 3.5.

Then so we overachieved by about 2%. Then EBITDA is, the YoY is 4.[unclear] above our target.

Then the net income here shows 6.9%, and what didn't show here is, our operating income that actually scored, almost 12% YoY increase. Our EPS, we have done better than we originally forecast, and that is, we have now 3.81 EPS, relatively to our original target that was set as 3.63.

Our achievement rate is also 5% better. Continue.

This chart shows, our kind of quarterly trends. As you see, we are definitely moving in the right direction, with the fourth quarter last year that really has hit, record high, except for the net income, that is the 20-year high.

Last time I was told, the the the the higher number was in 2006. It's a 20-year high record, for for the fourth quarter.

Okay? All right, and then, some other financial metrics for your information.

Our debt has come down to 36.03 billion, and our net debt to EBITDA ratio has come down to less than 1, it's a 0.98. Free cash flow, it remains really strong, and then you look at, 25.91 as of the fourth quarter 2025.

Our cash-based CapEx, that is 7.01, we underspent than what we original, budgeted for. That, that is just due to some cost efficiency savings on the network side and also some deferred payment in spending, which will be realized in this year.

Then, oh, this is another record high. This is for the whole year.

All right, similar chart, but this is a yearly chart, annual chart. Like I said, 2025, we just set new record highs again for everything, it's looking good.

Okay? Then break it down to mobile business, which is still, accounts for our majority, about 50% or so.

In, in terms of, the, the growth, given the market is really pretty much saturated, and, but then we still show a strong, solid, YoY growth. Also from our net portability, neutral portability market, still, we are looking at an MP numbers, that, that is, encouraging.

We've been kind of tracking that. I'm seeing the solid growth even though it's a very oversaturated market.

If you look at, postpaid 5G penetration, that we ended the year at 47.5%. This year, for sure, we going to cross that 50% line.

Then, we will have more 5G users, more users on the 5G than on 4G. Okay?

Then the mobile, postpaid ARPU has come to 719, it's, it's about $14 higher than the year before. Although it is still, less than what we, be before the merger.

We still have room, we'll continue to grow, to improve. Then we continue to be ahead of our peers in the industry.

Then postpaid churn rate, that is something we continue to work it down. Also the, the market is not as, active as before, I think, in terms of all the churns, which is a good thing.

Then so we also work really hard to, improve our customer loyalty and, and all that. We come to a record low, for 0.79%, for churn rate.

Okay? A couple things to mention that, we have, because last year, end of last year, is the official date that we had committed to the Fair Trade Committee that we will honor, those, old [contracts?]

. We are really coming to close that pretty soon.

There are still some lingering numbers of, APT customers, and we are in the final process of wrapping them up. Then it is, delivering a good, almost 20% of renewal ARPU uplift.

Then so at the same time, we managed the churn very well. Also we have launched this, TA-focused service.

Instead service plan, instead of, looking at, okay, it it it is 1399 or 999, 699, 799, we wanted to have a different TA. For modern times, it's more for the 50-plus, kind of a people.

Then since its launch in September, we are actually seeing a good traction that the service getting. Especially online.

Actually, quite a bit of them, applied online. Then for the fraud prevention service, that is something we see that definitely, the the, the the right feature for this, for this difficult time, lots of fraud, calls and, and all that, and then also the links.

This service is continuing, actually has a 49% YoY growth. Some highlights for our, consumer essential services highlights.

This Mobile Circle application, it's our app. We launched this in, late 2020.

I think the, the official launch is 2021. The idea to have this, is really serve as a digital platform that we want to increase FET's footprint in the consumer service that will go beyond telecom, right?

We wanted to, not only offer what we already have, like our video, our shopping, our insurance, all those digital services, but we want to find very good partners that we can offer more services through this platform. At the same time, this platform is accumulating very good traffic, and which becomes our base for further monetization for the platform economy.

Right now, it has already 800, 8 million, downloads for this, app, and then the monthly active users is more than 2 million. It is looking good.

Then for the direct carrier billing, this is always something that we are ahead of our peers. Also last year, it hits a record high transactions, it's a 14% YoY.

Then, and then also the team has been very innovative and very aggressive in, kind of going out-of-box. Then so [regulation?]

is already approved for life insurance payment through, DCB. Once this is done, it is really done for the industry.

It's, we are the pioneer there, but then it benefits the whole industry. Okay?

Then for the mobile insurance, we started with handset insurance, and then the market share is already number one for many years. We continue to do well there.

Then also we have increased the telemarketing sales, and then direct EBITDA also has a very impressive YoY increase for 107%. Also for travel insurance, along that's also a, 266% YoY.

Then, of course, this is launched like a later in 2024, about just half year base, there's some, there's some difference there, too. Still, for 266%, that is still quite impressive, I have to say.

Okay? Then we also have the Friday Video, which is still ranked number one local paid OTT, and the number of paid subscribers has come, has increased for 18%, compared to last year.

Also we have extended our entertainment business, more than the OTT video. We have, we have been doing some content production, and then also hosted and invested in some popular concerts and musicals events.

Then that is also another way of kind of increasing our, FET's, brand in consumer business. Then we have a couple of a good cultural content related, funds that we invested, combined is about 1.6 billion.

You know, for one of them, half of the funding will come from the TAICCA. That is actually, given us the extra funding to do, more business with the entertainment area and then supporting the local content.

Okay? Right, and then now, for the enterprise business, last year, we actually have very good, smart ICT business.

The, the smart ICT alone, we see a 28% YoY increase for the revenue. It remains our growth engine.

Then, it accounted for, combined with the fixed service, it come, it accounted for 19% of our total revenue. Then for, we, we have used like a four dragons to, characterize our, smart city, smart ICT type of projects.

The, the number one is the telecom-based SI. That is using our telecom infra and then also our expertise in this area, and the related projects.

Then that actually is showing a 64% YoY growth. Then also we see that with the, GenAI, the, adoption and then also the anxiety and then the, all the interest that come from the enterprise or, or small and medium business, definitely it has fueled the demand for digital transformation type of professional services.

It also helped us in, in this Microsoft Azure and Copilot program, because we are the LSP for Microsoft, and with this, this wave of GenAI, which definitely see the, the wave that is pushing it forward even more. Just, Azure and Copilot related contract values alone, it has increased 94% compared to a year before.

Then FET's own Intelligent Angel, that's the platform we, we have debuted, last year, and then it's, initially it's for internal use, and we also monetize it for enterprise clients, since the second quarter, and it has gained a very strong traction, and then we already have built a pipeline for it. Okay?

Then for our homegrown solutions, and that is, in the smart city solutions, green and smart city solutions, a lot of that is built around this energy management, right? Then the, the various applications.

That alone, the contract values has grown 48%, YoY. Then these are the different areas where we have a project that, that we committed, and then, and then also successfully got a contract.

On the right-hand side, it's the smart health solutions, area. Of course, we started with telemedicine, right?

Then that has been evolved into the emergency, system for the ambulance. Then last year, we, dived into the cloud HIS, cloud HIS, area.

This is one that where, the, the Ministry of, Welfare and Health, that they, they are looking at how we get these, clinics onto the cloud. Their HIS otherwise is more like a siloed island.

This is a one big push from the, the government, and we are aligned with that policy. We got into this cloud HIS business because, a lot of the features they asked for is what we already have, and then that came from our telemedicine platform.

We definitely see the synergy there. Then we are also, collaborating with some HIS, vendor or, or companies that already in this area.

So, we are looking, to some good growth this year in this area. Then we already have more than 500 home care clinics that have already adopted our solutions for the telemedicine.

Then for the cloud HIS, last year, even though we only launched it kind of like a friendly launch in the fourth quarter, but then we have, more than 100 clinics and pharmaceutical, pharmacies that already, adopted. It's, it's showing good progress.

Okay? We have received some, major honors and recognitions.

I won't just, count them through, but then the one that is the most recent is that we, again, is the number one, for the tele, for DJSI, Dow Jones Sustainability Index, we ranked number one again. This would, this is a third time in a row, for the telecom industry.

That, that is, quite, quite a recognition. Even our board today, acknowledged us for that.

Okay? I, the others, I think, I just won't go through them in detail.

All right, thank you. Now the dividend.

Since we have hit the record high in 3.81, we have, proposed that that we will just, keep it at 3.81 with a 100% payout, and this is 7% increase from the year before. Then you can also see the trend, that, below there, right?

We are, seeing a healthy, steady, going upward, just like how we are doing with our, bottom line and top line. Okay?

All right. For our 2026 targets, we have had, some, made some, investment last year, keep us, keep my investment team very busy, lots of, good companies that that they evaluated and also went for.

Each and every one of them took some time. Then we actually have had some good, M&As or small M&As.

Then, that in particular, they in particular will help us in the smart city and, the smart health, area. We, every time we invest in some companies, we look at the synergies.

It's not purely for the financial investment, but then also how they can work with, what we already have and expand it, and then it's good for both. We are looking at this year, we want to do everything we can to really maximize and realize the synergies from these recent investments.

In both the smart city and the smart health area. Also one thing to mention, one of our, one of our new subsidiary is ETC, and then that's something you you may not be, you are not unfamiliar with, because we have had, close to 40% of a shareholder, shares.

Then just started this year that we will, that the revenue will combine into ours. There, there will be some revenue boost there.

Um, and then all the, the cost, and then their demand on the CapEx, that will be reflected in our forecast as well. Okay.

Then ETC, it has its subsidiary that is also working on both consumer-facing, because they have all the, ETC the, the tag, and then the parking, and also they are doing a lot of business in the Southeast Asia, for the ET the toll, the electronic, toll, that they are doing that business. This year, they should see some, already some, results with Thailand, and there are several countries already in the pipeline.

Okay. All right.

The second is to unlock the value from digital platform. Then that's what I was referring to, the Mobile Circle has accumulated 8, 8 million downloads and then more than 2 million active users every month.

Then so we want to, merge the online and the offline kind of a business that, and then where we can give the, the our customers more, more values, and at the same time, that can also help us, increase our ARPU, for the in integrated or, overall kind of services that we are able to offer to our users, the consumers. So, we will continue to promote, promote more TA-focused, integrated mobile service products, with our alliance, and then we will also launch new essential services this year, with alliance.

We actually have, have one major service that will be coming soon. Okay.

Then we will accelerate our return on AI. Last year, we I I personally was pretty impressed with what my team was able to do across all the divisions, especially in the Network Technology, NT area, and also IT.

Then what they were able to do to adopt the AI and blend this AI, technology into their operations and the SOP. Also we have adopted this error-free, principles, and then how they do the check and balance, and then, early detection of any issues, and then double checking on the change requests before they hit the network, and all that.

Then also, not to mention the productivity increase, right, for, for our workforce. I'm really looking forward to, more of that return can be quantified, and then more can be realized this year.

We are basically already kind of like in a hiring freeze because of all these, efficiency and productivity increase. I'm already seeing the return.

Okay? Then, furthermore, for what we have done well, and we always like to, share that, monetize it, commercialize it.

Then so just like I mentioned, Intelligent Angel was already debuted for our enterprise business, and we will have more solutions that we have a homegrown solutions that will be AI-empowered or enhanced. We are looking to do more there.

Okay. Last, but not least, so, part of the reason that you will see our CapEx, this year will, will go up a little bit, that is because we're going to have some major network, so, for capacity, for 5G SA, and then also, LEO service, and so we have some, network and operations work there, lined up for them.

Okay? This is our consolidated financial forecast for the next year.

We are looking at for the total revenue, it's going to be 117.48 billion, and that is a, 6.5% increase. Then, for the EBITDA, it's a 39.83, and then it's a 4.6%, year-over-year.

Then operating income, it's a 19 billion, and it's close to 10% YoY. Our net income is 14.17, and it's a, 3.2% increase.

Our EPS is 3.93, and I I know I would have liked my team to give me a 4.0 number, but I did tell them if they hit 4, and I'll give them more raise next year. So 3.93 is what we, proposed as our target for for the guidance, for 2026 guidance.

Okay? For the CapEx, it's going to be, the the cash CapEx is the forecast at as 9.6 billion, it's up, by, 1.3 billion from what we, have projected for 2025.

As I mentioned earlier, that our we underspend our 2025 CapEx, some of that is going to defer to 2026. Really, the net increase, increment for 2026 is that 1.3 billion.

Then mainly, in several things. One is, because we have, we actually have more subsidiaries now, and then so they all have some CapEx, demand, already forecast there.

Then also our RAN network, upgrade for capacity and then for the 5G SA. It's really more than RAN, there's a core network as well, related.

These are the two major things that are driving this 1.3 billion additional CapEx that will be for this year. Okay?

Then, no worries, because our CapEx to sales level remains very healthy at about 8%. With that, okay, I concluded my, presentation for you all, and we welcome your questions.

I'm reading the questions. Okay.

We have HSBC on toll for the question. Maybe we go that first?

Oh, that's the first one? Okay.

On the phone.

On the phone.

Hi, this is Charlie from HSBC.

Congratulation

to your very strong results, this is very impressive. I have two question.

The first one is about your CapEx guidance. I noticed that additional 1.3 billion because of the two reason you mentioned.

May I have more color regarding the subsidiary demands? Why this could drive so much additional CapEx?

I also noticed that your actual 2024, 2025 CapEx is meaningfully below your budget. Can I assume your 2026 budget is also very conservative budget and you have a large room to maneuver and probably the actual will also be lower than the forecast?

This is my first question. Thank you.

That's pretty much. I think so.

I would think so, too.

Oh, okay, got you. My next question is about your 2026 guidance, because I look at your guidance, seems to me that your forecast a higher revenue growth and then net income growth.

May I know why that's the case? It seems to me revenue growth guidance is higher than EBITDA growth, and EBITDA growth is higher than net income.

May I know if there are some area that causes some margin pressure? Could you please give me more color on this?

Thank you, Charlie. Let me explain.

As I mentioned, ETC, right, which we already have 40% of the shares. By having it come into our P&L, so that does help with the YoY.

The 6.5, if without ETC, which would have about 3 billion, I think that is roughly 3 billion level. Without that piece, and then the YoY would be about 3.5.

That would be just like what we set out for 2025 forecast last year. Then with the increase from ETC, then that gave us the extra 3%.

You're looking at a 6.5% because of that. Now why didn't it accordingly increase the up in the other lines?

That is because before we have realized its revenue in our booking, we already are taking its 40% of its net income and all that. Those already accounted for in our past P&L.

Got you. Yes.

Thank you, Sharon. This is very helpful.

Congratulation again to your great results. Thank you.

Thank you very much, Charlie.

If there is no questions on the phone, maybe we can start with questions online? Let me read it.

We can answer it later.

Oh, for the AI? The first one?

Yes.

Okay.

With AI, are there initiatives that you can undertake to reduce costs or even downsize headcount over time?

I actually wrote in a magazine, make the Business Weekly magazine, I wrote in the column about how to adopt AI. It is my humble opinion, right?

I think that it's good for companies to really focus on getting the results, and not necessarily the return, because it's the employees that need to really adopt them, and it's the employees that need to be willing to push forward with it. If we now reduce so many headcounts, you can bet nobody is going to want to do this seriously.

Then also that's really not my original purpose for doing this. Then, just because it is the technology evolution, AI is for everyone to really learn, right?

Then we already have not very good work-life balance, I wanted to help resolve that problem for my employees, and then they will see the benefit and then how AI helped them with a lot of their pain points. Self-motivated, they are encouraged to do whatever they can to really utilize AI and then to learn AI.

Now once they do that, and then as I mentioned earlier, we already are basically doing a hiring freeze. I'm not adding headcounts because of all this efficiency every department already is realizing, they don't come to me for more headcounts.

Also every year, we have this performance evaluation. For those underperformed, if it's not satisfactory or need improvement in those bottom two categories, some of them are show in the past, and then the managers will come to us, 'Now I need to backfill.'

Then now they don't do that, because they know some of the work the low performers have left behind are easily picked up, because now with the AI assistants and all that, the workload is very different than before. I believe there's more value out of this.

It's not like they are going to be idle, but then rather, now they don't have to deal with very trivial kind of a task, but then they really can spend more time on the higher quality and then the more insightful type of business even more. Then while we are growing our business, as you've seen, and I don't need to add more headcounts.

I can keep the revenue go growing, but I don't need to keep my expense go growing. That is how I look at it.

I don't have a specific initiative that I said I will reduce costs because of AI, but it is happening. I'd like to keep it that way, and then so the employees are self-motivated to do this.

The ones that resist or the ones who can't keep up with it, and they will be left at that bottom two categories, and then eventually over time if they can't improve, then they will leave the company.

Thank you, Chee. Next questions: 'Congratulations on the strong results and a very solid guidance.

Can we have some breakdown on how we can achieve the 6.5% revenue growth rate, the guidance? Also want to understand a bit more about the profitability on the enterprise business, and do we expect it to continue improving on year-on-year basis?

Thanks.'

Yeah. I think part of the question about the 6.5, I already explained because of the ETC piece.

Then without that, it's back to kind of 3.5%, like what we projected for last year. Then for the enterprise, that is our driving engine, it will continue to move the needle a little bit further.

Then on the other hand, our device and also the mobile service, they will continue to shoulder their share, and then, the portfolio, in terms of the contribution, doesn't change much if at all from last year as far as I can tell. It will still be because we have a large base for the mobile service.

A couple percent of growth there plus the device, and we have probably less than a 10% or so increase. Then for the fixed service and also this year we have more focus on the fixed service as well, not only just the smart ICT, we will see some focus on the fixed service as well.

Next question: 'Given that debt has come down to less than one time net debt to EBITDA...' Oh,

there's another piece about the profitability. Yes.

With more solutions that are homegrown, I do see that is part of the reason we do these synergies, so that will improve the profitability even more. Okay.

Next question again: 'Given that debt has come down to less than one time net debt to EBITDA and our free cash flow generation is substantially higher than our net income, is there a possibility for above 100% next year?'

There's always a possibility. You never say never.

I guess, yeah, we will, we will do this year by year. So, to be honest, like, even last year when we looked at, our improved EPS, our board has different opinion, and then we have to convince them to keep it at 100%, and this year they agree with us with 100%.

I guess we have to work a lot more. Then also if this is the case that I, we don't do as well, just like, in the past we have a over, we paid more than our EPS, right?

Then now I think we are in a healthier kind of, condition, in terms of the payout. Then so we will grow it, together as we really grow our bottom line.

Then now what we, so, and we have a, healthy cash flow, yes, but then given the global economy and all this uncertainty, I think it's good that we we leave us, ourselves some buffer. I never say never.

Next question is in Chinese. Let me translate to English first.

'Far EasTone's ARPU is the highest among the industry, and it seems the competition is still quite severe. Can we expect the core telecom business to continue to grow, and in what kind of a strategy, and what kind of expectation on the profitability growth on...'

Sure.

'...corporate? Okay.'

Okay. For the first part, for the ARPU, right, even though, yes, it's very competitive, and that's why we are saying based on our Mobile Circle as the digital platform, we want to offer a variety of services that are of value to our users, they will be willing to pay for them.

Then how to pick the right services? Then, of course, we need to understand our customers' needs, and then we need to pick the right service, and then also in some cases, we need to create such new service.

That's where I call it essential services, and then that is actually something we are currently working on. I do see there's still quite a bit of room for us to grow in the consumer area.

The telecom piece may be saturated, but then I think the users' demands are always there, and then we definitely haven't done enough in there. Okay?

This ARPU, if you take into account all those additional essential services we will be able to offer, and then we will continue to grow. Then in terms of the enterprise profits, like I said, the homegrown solutions will be the key, right?

With our own homegrown solutions, I can actually control the margin. That's why we believe our homegrown solutions are essential for us.

Okay.

Next: 'Will 2026 CapEx guidance be a base for future CapEx spending?'

I wouldn't say so, because, like I said, until then, I think for 2026, because part of these are if you spend it now, or you want to kind of break it down to three years, and then what are the terms and all that. We have all that taken into account.

I believe quite a bit of that is going to be realized this year, I don't think next year we'll be at the same level. It should come down.

This year actually is higher. Have we answered all of them?

I think so. Okay.

Questions?

If there's more questions, please, you can ask online or on the phone, please.

In any case, I'd like to take the opportunity to thank the investors and analysts, right? We have got good results from the reviews and from the surveys and all that, and we get some good awards.

Thank you very much for your support. Our stock price has been good not today in particular, but then we cannot complain.

Thank you. If you have any more questions, you can always find Amy and Gary to follow up.

Then we have the next questions: 'May I kindly check how much of our mobile revenue is device-related and how much is purely services?'

The mobile service without the device part is about 50%, 50% of our 45% of our total revenue, and the device is 31, right? Last year, the device and merchandise revenue is down.

If you're thinking about the bundled, not bundled, that's a very different kind of math that I don't have it here. Yeah, 31 and 50, 50 including the essential service.

Right? Yeah.

So 45% for the mobile service alone, not including the digital services, and 31% for the device and merchandise.

We believe there's no more questions.

For... Quite a bit of questions.

It's already quite a lot.

It's time.

It's time, that.

Okay.

If you have any further questions...

It's going to be a long break again, right, long weekend.

Thank you again, everyone. See you next quarter.

Thank you all.