Investment Rating - The report initiates coverage on NaaS (NAAS.US) with a "Buy" rating and a target price of $3.20, indicating a potential upside of 178% from the current price of $1.15 [4][3]. Core Insights - NaaS is positioned as a leading electric vehicle charging service platform in China, capitalizing on a vast market opportunity as the industry expands [5][8]. - The company has shifted its strategy towards a light-asset business model, significantly improving its profitability metrics, with gross margins rising from 19% in Q4 2023 to 57% in Q3 2024 [3][22]. - The report anticipates that NaaS will achieve breakeven in 2025, transitioning from a startup valuation model to a growth-oriented valuation framework [3][43]. Summary by Sections Company Overview - NaaS, established in 2019 and listed on NASDAQ in 2022, is a major player in China's electric vehicle charging service sector, providing solutions for both operators and EV owners [8][9]. Market Growth - The Chinese electric vehicle market is experiencing rapid growth, with the number of EVs expected to exceed 45 million by 2025, driven by supportive policies and technological advancements [17][18]. - The charging service market is also expanding, with projections indicating a 50% year-on-year increase in charging volume, reaching over 110 billion kWh in 2024 [18][19]. Strategic Focus - In 2024, NaaS has refocused its strategy on its core charging service business, which now accounts for over 95% of total revenue, leading to improved operational efficiency and profitability [22][24]. - The company has established a comprehensive ecosystem with partnerships across various sectors, enhancing its market position [13][40]. Competitive Landscape - The competitive environment is stabilizing, with NaaS improving its bargaining power due to a fragmented supply base and reduced competition from smaller players [30][34]. - The report notes that NaaS's gross take rate has increased from approximately 10% in 2023 to 16.1% in Q3 2024, reflecting enhanced negotiation capabilities [33][29]. AI and Data Utilization - NaaS is leveraging its extensive transaction data to develop AI-driven solutions that optimize service delivery and enhance user engagement [39][38]. - The NEF (NaaS Energy Fintech) system is designed to improve operational efficiency and customer retention through personalized services and intelligent pricing models [39][40]. Valuation Transition - The report predicts a shift in NaaS's valuation from a startup model to a growth-oriented model by 2025, with expected revenues of 1.83 billion, 2.29 billion, and 3.60 billion yuan from 2024 to 2026 [3][42]. - The target price of $3.20 is based on a projected P/S ratio of 1.4x for 2025, reflecting the company's growth potential and stable market position [43].