BEIJING - NaaS Technology Inc. (NASDAQ: NaaS), a pioneer in the electric vehicle (EV) charging service sector in China and the first of its kind to be listed in the U.S., has declared its intention to revise the ratio of its American Depositary Shares (ADSs) to Class A ordinary shares. The adjustment will modify the current ratio from one ADS representing 10 Class A ordinary shares to one ADS for 200 Class A ordinary shares.
This modification is tantamount to a one-for-twenty reverse ADS split for the company's ADS holders. NaaS Technology Inc. anticipates the new ADS Ratio to take effect on or around June 10, 2024. Shareholders will be required to exchange every 20 existing ADSs for one new ADS after the effective date. The exchange process will be facilitated by JPMorgan Chase (NYSE:JPM) Bank, N.A., the depositary bank for the company's ADS program.
The company's ADSs will continue trading on the Nasdaq Stock Market under the ticker "NaaS". No new fractional ADSs will be issued in the process. Instead, fractional ADSs will be aggregated, sold, and the proceeds, after deductions, will be distributed to the respective ADS holders.
The underlying Class A ordinary shares of the company will remain unaffected by this change, with no new shares being issued or cancelled. While the adjustment is expected to proportionally increase the ADS trading price, the company has stated there is no guarantee that the post-change trading price will be equal to or greater than 20 times the pre-change price.
To align with current standards and reflect the new ADS Ratio, NaaS Technology Inc. and the depositary have agreed to amend and restate their deposit agreement, originally dated October 19, 2017, and amended on May 31, 2022.
NaaS Technology Inc. is a subsidiary of Newlinks Technology Limited, a notable player in China's energy digitalization. The company delivers comprehensive solutions for energy assets, encompassing charging services, energy solutions, and new initiatives, aiding in the lifecycle management of energy assets and promoting the transition to sustainable energy.
The information in this article is based on a press release statement from NaaS Technology Inc.
InvestingPro Insights
In light of NaaS Technology Inc.'s recent announcement regarding the revision of its ADS ratio, there are several financial metrics and expert analyses from InvestingPro that could provide shareholders and potential investors with a deeper understanding of the company's current financial health and market performance.
An InvestingPro Tip suggests that NaaS operates with a significant debt burden and may have trouble making interest payments on its debt. This is particularly relevant for investors to consider, especially in the context of the company's decision to adjust its ADS ratio, which could be indicative of efforts to improve its capital structure and financial stability.
From a performance standpoint, the company has shown a remarkable revenue growth rate of 232.02% over the last twelve months as of Q1 2024. However, despite this impressive top-line growth, NaaS has not been profitable during the same period, with a reported operating income margin of -299.84%. This highlights the challenges the company faces in terms of cost management and achieving profitability.
Investors should also note the high price volatility of NaaS's stock, as indicated by an InvestingPro Tip. Over the last week, the stock has seen a significant return of 22.13%, yet it has also experienced a steep 1-month price total return of -57.01% and a 3-month price total return of -71.34% as of the 151st day of 2024. This could suggest that while there may be short-term gains, the stock's price stability is uncertain in the medium to long term.
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