NaaS Q4: 245% Topline Growth And Expected To Break Even In 2024

seekingalpha04-02

The company reported robust revenue growth and significant margin improvement, on track to achieve break-even by the end of 2024.NAAS is diversifying its revenue streams, with energy solution services...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2424344040?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1564615208/image_1564615208.jpg","is_english":true,"pubTime":"2024-04-02 23:08","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2424344040","market":"nz","top_or_hot":-1,"title":"NaaS Q4: 245% Topline Growth And Expected To Break Even In 2024","media":"seekingalpha","content":"<div>\n<p>The company reported robust revenue growth and significant margin improvement, on track to achieve break-even by the end of 2024.NAAS is diversifying its revenue streams, with energy solution services...</p>\n\n<a href=\"https://seekingalpha.com/article/4681737-naas-q4-245-percent-topline-growth-and-expected-to-break-even-in-2024\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NaaS Q4: 245% Topline Growth And Expected To Break Even In 2024</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNaaS Q4: 245% Topline Growth And Expected To Break Even In 2024\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-02 23:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4681737-naas-q4-245-percent-topline-growth-and-expected-to-break-even-in-2024><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The company reported robust revenue growth and significant margin improvement, on track to achieve break-even by the end of 2024.NAAS is diversifying its revenue streams, with energy solution services...</p>\n\n<a href=\"https://seekingalpha.com/article/4681737-naas-q4-245-percent-topline-growth-and-expected-to-break-even-in-2024\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4204","symbol_name":"教育服务","start_time":0,"source_url":"https://seekingalpha.com/article/4681737-naas-q4-245-percent-topline-growth-and-expected-to-break-even-in-2024","article_id":"2424344040","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1564615208/image_1564615208.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2424344040","pubTimestamp":1712070517,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"The company reported robust revenue growth and significant margin improvement, on track to achieve break-even by the end of 2024.NAAS is diversifying its revenue streams, with energy solution services","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4204":"教育服务","NAAS":"能链智电","BK4214":"汽车零售","ALLG":"Allego"},"translate_title":"NaaS第四季度：顶线增长245%，预计2024年实现收支平衡","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ALLG":1,"NAAS":1},"content_text":"The company reported robust revenue growth and significant margin improvement, on track to achieve break-even by the end of 2024.NAAS is diversifying its revenue streams, with energy solution services now accounting for 58% of total revenue.China's EV industry leads globally, experiencing unparalleled growth, which fuels substantial expansion in the EV public charging sector.   PhonlamaiPhotoNaaS Technology (NASDAQ:NAAS) is a one-stop charging solution provider to charging station owners offering services through a station's initial building, operating and upgrade, as well as additional service stages. Its services span across the entire life cycle of a charging station, including 1) mobility connectivity services to public users during a station's operation stage, 2) offline services including site selection, charging equipment procurement, EPC and financing to charging station owners at the initial station building stage, 3) offline operating/maintenance services, other non-charging station upgrade and additional services like ESS/PV EPC, Virtual Power Plant (VPP) trading and battery testing and recycling and battery swap services to charging station owners at the stations' operating and upgrade/additional service stages. In Oct'23, Jefferies published 'First Mover in Global Charging Ecosystem; Initiate Coverage on NaaS', and set NAAS target price as $4.50. Key investment thesis included 1) rapidly-rising EV population, 2) advantage of \"all-in-one\" solutions, and 3) Overseas expansion. Company WebsiteMy previous article published on March 4th 2024, Green Energy Leader NaaS Expecting 4-5x Topline Growth In FY24, focused on its potential for topline growth, the strong demand for public charging in China, and the key partnership development with Geely. NAAS Stock price dropped by 23% since then due to investors' worry about NAAS' path to profitability. In my opinion, topline acceleration and proper cost efficiency control are key to NAAS turning profitable. In this article, I want to discuss its key drivers alongside an update on its Q4'23 earnings release. NAAS reported robust revenue growth with significant margin improvement, on track to achieve break-even by the end of 2024  Key takeaways from the NAAS Q4'24 earnings release include bright spots such as 1) exceptional topline growth, 2) a significant improvement in gross margin of 21 ppts, and 3) solid growth in operational metrics. The primary risk on its P&L centers around profitability. See details as follows. Revenue: RMB64.4 million (+119% YoY) in Q4'23, and RMB320.1 million (+245% YoY) in FY23. While charging service revenues saw robust growth in FY23 (RMB129.1 million, +56% YoY) benefiting from a growing charging network, energy solutions revenues became an exceptionally bright spot (23x revenue increase YoY), accounting for 58% of total revenue. Gross margin: 26.0% in Q4'23, up from 24.4% in Q4'22, 27.7% in FY23, up from 6.6% in FY22. Gross margin improvement was primarily driven by product mix shift to Energy solutions by capitalizing the company's \"know-how and capabilities in delivering and executing energy solution projects of different scales\". Op loss: RMB386.3 million in Q4'23, and RMB1,073.3 million in FY23. Operating expenses decreased from RMB2,467.6 million in FY22 to RMB1,162.1 million in FY23 due to a one-time Equity-settled listing cost of RMB1.9 billion in 2022. Excluding the one-time cost, OpEx increased from 136% from RMB283.3 million in FY22 to RMB669.8 million in FY23 (+136% YoY) mainly due to \"professional fees to initiate market expansion as well as increased expected credit losses that reflected market conditions\". At this point, NAAS, at a rapid expansion stage, may continue to incur cost increase in sales and marketing. However, if we exclude costs that are likely not recurring, such as professional fees, I would think NAAS moved much closer to a breaking-even point. If NAAS achieves 4-5x topline increase in FY24, I believe it will be able to break even within FY24. What's the likelihood of hit that target? There are a couple of things providing me the confidence. First, the company previously provided revenue guidance of RMB2-3B in FY24, which is about 6x-9x of FY23 revenue. Second, as I discussed in my previous article, \"NAAS has a solid Energy Storage solutions pipeline. According to its prior earnings call, the company has 380 contracted stations that requires energy storage solutions. In Q3'23, 43 out of the 380 was delivered. Looking at longer teams, the company mentioned 1,880 stations in midterm, and 73,000 in the long run. This leading indicator gave me conviction in NAAS future revenue growth.\" Capital IQOperational metrics: 1,324 GWh in Q4'23 (+55% YoY), and 4,958 GWh in FY23 (+81% YoY); RMB1.2 billion (+47% YoY) Gross transaction value through Naas' network in Q4'23, RMB4.7 billion (+74% YoY) Gross transaction value through Naas' network in FY23; 77,017 (+54% YoY) charging stations in FY23; 875,655 (+70% YoY) EV chargers in FY23. Operational metrics demonstrated that NAAS is able to serve the strong demand in China very well. NAAS is diversifying its revenue streams, with energy solution services now accounting for 58% of total revenue The No.1 revenue growth driver for NAAS is their energy solution services, which now account for 58% of total revenue. Alongside the rapidly growing market in China, NAAS stands out with its deep know-how and resources on both the supply and demand sides. This space has a high barrier to entry, making it more profitable. NAAS' strategy of doubling down on energy solution services is a brilliant one in my opinion. As new entrants increasingly invest in EV charging, NAAS can position itself best by serving players in this ecosystem with its differentiated capability as a one-stop solution provider. Here is what a one-stop solutions project looks like (see details in the company press release). As shown in the following picture, this one-stop PV-storage-charging-swapping solution includes the supply, procurement, installation, and grid connection of charging systems, battery swapping systems, PV systems, and energy storage systems. This solution has a high impact, marking key milestones. According to the company's press release, \"upon completion, Anshan Station is expected to generate 4.328 million kWh of electricity annually, saving 1,358.9 tons of standard coal and reducing carbon emissions by about 3,580.5 tons per year.\" Moreover, this is just the start during the construction phase. NAAS is also developing an energy management platform and system for its operational stage. As the revenue mix continues to shift towards solution services, NAAS's operating margin will likely improve further. Company presentationChina's EV industry leads globally, experiencing unparalleled growth, which fuels substantial expansion in the EV public charging sector. The EV industry in China is experiencing unparalleled secular growth. According to Mordor Intelligence, \"the China Electric Vehicles Market size is estimated at USD 305.57 billion in 2024, and is expected to reach USD 674.27 billion by 2029, growing at a CAGR of 17.15% during the forecast period (2024-2029).\" This growth rate is nearly 2x of the growth rate of EV market worldwide. Mordor IntelligenceNAAS Stock Valuation NAAS is currently traded at $1.24, compared to a 52-week high of $12.78 and a 52-week low of $1.07. Year-to-date, it has been trending around its lower bound price. Here is how I calculate NAAS's value for a base case. For its energy solution business, its closest peer, Qingdao TGOOD Electric Co., Ltd. (SZSE:300001), is currently traded at 55x P/2024 Earnings. Qingdao TGOOD Electric LTM revenue was RMB2 billion, ~6x of NAAS, and Gross margin 21% is comparable to NAAS. I applied 30x for NAAS vs 55x for Qingdao TGOOD Electric, and the discount was due to different business size and risk profiles. For its charging service business, its closest peer, Allego N.V. (NYSE:ALLG), is traded at 2.7x P/2024 Sales. Allego LTM revenue is ~4x of NAAS, and Gross margin 23% is comparable to NAAS. I applied 2x for NAAS vs 2.7x for Allego to account for different business size. Therefore, applying 30x P/E for its energy solution business, and 2x P/S for its charging service business to my projection for 2024 (RMB2.5 billion in total revenue, and RMB180 million in energy solution earnings), the estimated fair value would be $4.3 per ADS. Comparing with my previous article I applied more conservative multiples (30x P/E for energy solution business vs 40x prior, 2x P/S for charging service business vs 5x prior) to account for risks around profitability. Capital IQConclusion and Investment Risks NAAS is underpriced, especially considering its potential revenue growth acceleration in FY24. Investors looking for ESG opportunities should definitely check this out. Investors should be mindful of the following risks associated with NAAS: Operation risk: NAAS is still experiencing significant operating losses (RMB1,073 million in FY23). Achieving profitability relies on accelerating growth in its topline and improving operational efficiency during the business expansion stage. One question from investors may be \"what about NAAS' ability to fund its operations\"? According to NAAS SEC filings, RMB 600 million banking facility was newly entered into in 2022. As of Dec'31 2023, NAAS had RMB506 million in cash and short-term investment, and RMB1,144 million in total current Assets. For short-term liquidity, current ratio 1.4x, and quick ratio 0.8x. For long-term solvency, long-term debt to capital ratio was 69%. I am positive about NAAS' ability to fund its operations.  Competition risk: In a market experiencing secular growth, competition will rise, and new players may disrupt the market with different business models or innovative products or services.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2424344040"}