BEIJING - NaaS Technology Inc. (NASDAQ:NaaS), a U.S.-listed electric vehicle (EV) charging service provider in China, has announced an updated effective date for its previously disclosed change in the American Depositary Shares (ADS) ratio. The alteration will now take effect at the start of business on June 13, 2024, according to the depositary bank, JPMorgan Chase (NYSE:JPM) Bank, N.A.
The company had initially planned for the change to be effective around June 10, 2024. The updated ADS ratio will be equivalent to a one-for-twenty reverse ADS split. Currently, one ADS represents 10 Class A ordinary shares, but following the change, one ADS will represent 200 Class A ordinary shares.
For shareholders, this means that each holder of record at the close of business on the effective date will need to exchange every 20 existing ADSs for one new ADS. The trading of the ADSs under the symbol "NaaS" will continue on the Nasdaq Stock Market without interruption.
No fractional ADSs will be issued when the ratio changes. Instead, any fractional shares will be aggregated, sold by the depositary bank, and the resulting net cash proceeds (after fees, taxes, and expenses are deducted) will be distributed to the relevant ADS holders.
The company has stated that while the trading price of the ADS is expected to increase proportionally with the ratio change, there is no guarantee that the post-change trading price will be equal to or greater than 20 times the pre-change price. It is important to note that there will be no impact on the company's underlying Class A ordinary shares, and no shares will be issued or cancelled as a result of the ADS ratio modification.
NaaS Technology Inc. operates as a subsidiary of Newlinks Technology Limited and is notable for being the first U.S. listed EV charging service company in China. The company aims to provide comprehensive solutions for energy asset owners, encompassing charging services, energy solutions, and new initiatives to support the lifecycle of energy assets and promote energy transition.
This update is based on a press release statement from NaaS Technology Inc. and provides shareholders with the latest information on the administrative changes to the company's ADS program.
In other recent news, NaaS Technology Inc. announced robust growth in the first quarter of 2024, with an impressive 156% increase in revenue year-over-year, reaching RMB96.24 million. This remarkable growth is credited to the firm's dual-engine model in the charging service industry. The company also reported an expansion of its gross margin to 25%, marking an 8.4 percentage point increase. In addition, NaaS Technology Inc. is making strides towards achieving positive EBIT by the end of the year.
In another development, the company has declared an adjustment to the ratio of its American Depositary Shares (ADSs) to Class A ordinary shares. The modification, which is expected to take effect on or around June 10, 2024, will change the current ratio from one ADS representing 10 Class A ordinary shares to one ADS for 200 Class A ordinary shares. This adjustment is equivalent to a one-for-twenty reverse ADS split for the company's ADS holders.
Furthermore, NaaS Technology Inc. has filed over 250 patent applications and joined the Open Invention Network, reinforcing its position in the charging infrastructure networks. These recent developments underline the company's commitment to innovation and growth in the rapidly evolving electric vehicle charging service sector.
InvestingPro Insights
In light of NaaS Technology Inc.'s announcement regarding the update to its ADS ratio, investors might be looking for deeper insights into the company's financial health and market performance. According to InvestingPro data, NaaS Technology Inc. has a market capitalization of $101.71 million, which places it in the category of smaller cap stocks that often exhibit higher volatility. Indeed, the company's stock has demonstrated significant price fluctuations, with a 1-week total return of 19.52% as of the latest data, highlighting its volatile nature.
Despite the recent positive short-term return, the broader trend for NaaS Technology Inc. has been less favorable. The company's 1-year price total return has plummeted by 94.56%, reflecting substantial investor concern and a challenging market environment for the firm. This is in line with the InvestingPro Tip that the stock has fared poorly over the last month, quarter, and six-month periods, indicating a sustained downward trend in the stock's performance.
InvestingPro Tips also highlight the company's significant debt burden and concerns about its ability to make interest payments, which could be further exacerbated by its rapid cash burn rate. These financial pressures are important for investors to consider, especially those looking for stable, long-term investments. On a more positive note, analysts anticipate sales growth in the current year, which could offer a glimmer of hope for the company's future revenue potential.
For investors seeking a comprehensive analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/NAAS. These tips can provide further guidance on the investment potential of NaaS Technology Inc. Additionally, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more value from the InvestingPro platform.
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