NAAS — NaaS Technology Inc.

NaaS Q3 2024 Earnings Call Summary

1. Key Financial Results and Metrics

• Non-IFRS Net Profit: Achieved RMB 20.6 million, marking the first positive quarterly net profit.
• Core Charging Services Revenue: Increased by 36% year-over-year to RMB 42.37 million.
• Gross Margin: Reached a record high of 57%, up from 29% in Q3 2023.
• Operating Expenses: Selling and marketing expenses decreased significantly to 67% of revenue from 160% a year ago.
• User Growth: Transaction users increased by 30% year-over-year, with user activity at a record high.

2. Strategic Updates and Business Highlights

• NaaS has shifted focus to high-margin core charging services, reducing reliance on lower-margin Energy Solutions.
• The company is leveraging AI-driven technology for improved operational efficiency and resource allocation.
• Partnerships with major players like FAW-Volkswagen and IM Motors are enhancing the EV charging ecosystem.
• A recent partnership in Fujian added 100 stations and 1,600 chargers, improving accessibility.

3. Forward Guidance and Outlook

• NaaS aims to prioritize profitability, scale, and technology in Q4 2024 and throughout 2025.
• The company is confident in sustaining profitability and plans to maintain high gross margins while expanding its user base and charging network.
• Focus will continue on optimizing operational efficiencies and leveraging AI for growth.

4. Bad News, Challenges, or Points of Concern

• Transitioning away from lower-margin Energy Solutions may pose short-term challenges as the company reallocates resources.
• Competitive pressures remain high in the EV charging market, necessitating continuous innovation and efficiency improvements.
• The company has begun reducing user subsidies, which could impact user growth if not managed carefully.

5. Notable Q&A Insights

• Management emphasized the importance of maintaining profitability and operational efficiency while scaling the business.
• The strategic shift towards core services is seen as essential for long-term value creation, moving away from capital-intensive projects.
• NaaS is focusing on enhancing user experience through improved app functionalities and real-time data analytics, which are critical for retaining users in a competitive landscape.
• The company is optimistic about sustaining growth in charger connections and user transactions, attributing this to strategic partnerships and technological advancements.

Overall, NaaS reported strong financial performance in Q3 2024, with a clear strategic focus on core charging services and operational efficiency, while navigating competitive challenges and transitioning away from lower-margin business segments.