NaaS(US:NAAS)2024-11-20 15:16Financial Data and Key Metrics Changes - The company achieved a positive non-IFRS net profit of RMB20.6 million in Q3 2024, marking the first time in a single quarter [9][23] - Revenue from core charging services reached RMB42.37 million, a year-over-year increase of 36%, with gross margin improving to 57% [11][26] - Operating expenses saw significant reductions, with selling and marketing expenses decreasing to 67% of revenue from 160% year-over-year [13] Business Line Data and Key Metrics Changes - Core charging services revenue surged by 36% year-over-year, while Energy Solutions revenue was only RMB0.56 million due to a strategic shift away from low-margin businesses [24][25] - The gross profit margin improved from 29% in the same period last year to a historical high of 57% [26] Market Data and Key Metrics Changes - The new energy vehicle market in China is growing rapidly, with domestic sales increasing by 45.5% year-over-year and EV market share surpassing 50% [14] - The number of users transacting through the NaaS platform grew by 30% year-over-year, indicating strong market engagement [13] Company Strategy and Development Direction - The company is focusing on profitability, scale, and technology, particularly in interconnectivity charging services [15] - A strategic shift towards high-margin core charging services is aimed at leveraging technological capabilities to meet market demand [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining profitability and growth, emphasizing the importance of operational efficiency and scaling high-margin services [57][59] - The competitive landscape is stable, allowing the company to reduce reliance on customer subsidies while enhancing user experience [61][62] Other Important Information - The company has made significant partnerships, including a recent collaboration in Fujian that adds over 100 charging stations and 1,600 chargers to its network [21][75] - The AI-driven NEF system is enhancing operational efficiency and user experience, contributing to the company's competitive advantage [22][76] Q&A Session Summary Question: Progress on gross profit and margin improvement - Management highlighted a gross profit increase of 19% quarter-on-quarter, with gross margin rising from 38% in Q2 to 57% in Q3 [37][38] Question: Operational efficiency and expense trends - Significant reductions in operational losses were achieved, with selling expenses decreasing from RMB50.9 million in Q2 to RMB29.7 million in Q3 [42][44] Question: Revenue composition shift and strategic focus - The company is realigning its strategy to focus on high-margin core services, moving away from capital-intensive Energy Solutions [49][50] Question: Competitive advantages in a tough market - The company leverages advanced AI analytics, strong partnerships, and an asset-light model to maintain its leadership position [52][53] Question: Expectations for sustainable profitability - Management expressed confidence in maintaining profitability, driven by healthy growth in the charging services business and improved operating leverage [57][59] Question: Trends in user subsidies and profitability impact - The company is gradually reducing user subsidies, focusing on enhancing user experience and organic growth [62][63]