NaaS(NAAS) Winrich Securities·2025-03-07 18:14Investment Rating - The report initiates coverage on NaaS Technology (NAAS.US) with a "Buy" rating and a target price of 1.15 [4][3]. Core Insights - NaaS Technology is positioned as a leading electric vehicle charging service platform in China, capitalizing on a vast market opportunity as the industry expands rapidly [5][8]. - The company has undergone strategic refocusing in 2024, enhancing its asset-light business model, which has led to a significant increase in gross margin from 19% in Q4 2023 to 57% in Q3 2024, and a turnaround in net profit margin from -525% to 46% in the same period [3][22]. Summary by Sections Company Overview - NaaS Technology, established in 2019 and listed on NASDAQ in 2022, is a major player in China's electric vehicle charging service market, providing charging solutions and value-added services to both operators and users [8][9]. Market Growth - The Chinese electric vehicle market is experiencing rapid growth, with the number of electric vehicles expected to exceed 45 million by 2025, driven by policy support and technological advancements [17][18]. - The charging service market is also expanding, with public charging stations projected to reach approximately 358,000 by the end of 2024, reflecting a robust infrastructure development [18][21]. Strategic Focus - In 2024, the company has strategically focused on its core charging service business, which now accounts for over 95% of total revenue, leading to improved profitability metrics [22][24]. - The gross profit has increased from 12 million RMB in Q4 2023 to 25 million RMB in Q3 2024, showcasing the effectiveness of the strategic shift [22][23]. Competitive Landscape - The competitive environment is stabilizing, with major players like NaaS Technology and its closest competitor, New Electric Path, entering a phase of steady competition, reducing the intensity of rivalry [34][35]. - The company has improved its bargaining power due to the fragmented nature of the upstream charging station market, leading to an increase in its gross take rate from approximately 10% to 16.1% [33][30]. AI and Data Utilization - NaaS Technology is leveraging its extensive transaction data to enhance operational efficiency through its NEF (NaaS Energy Fintech) system, which aims to optimize service pricing and improve user engagement [39][40]. - The company is establishing a comprehensive ecosystem by collaborating with major automotive manufacturers and digital map providers, enhancing its service offerings and market reach [40][41]. Valuation Transition - The company is expected to achieve breakeven by 2025, transitioning from a startup valuation model to a growth-oriented valuation framework, with projected revenues of 1.83 billion RMB in 2024 and 2.29 billion RMB in 2025 [3][42]. - The target price of $3.20 is based on a projected P/S ratio of 1.4x for 2025, reflecting the anticipated growth and stability in the competitive landscape [43].