Greenland Technologies Holding Corporation (NASDAQ:GTEC) Q1 2022 Results Earnings Conference Call May 16, 2022 8:00 AM ET Company Participants Julia Qian - Managing Director of Blueshirt Group Asia Raymond Wang - Chief Executive Officer Jing Jin - Chief Financial Officer Conference Call Participants Rommel Dionisio - Aegis Capital Operator Good day ladies and gentlemen, thank you for standing by. And welcome to the Greenland Technologies First Quarter 2022 Earnings Conference Call. Currently all participant ...

Greenland Technologies Holding Corporation (NASDAQ:GTEC) Q4 2021 Earnings Conference Call March 28, 2022 8:00 AM ET Company Participants Julia Qian - Managing Director of Blueshirt Group Asia Raymond Wang - Chief Executive Officer Jing Jin - Chief Financial Officer Conference Call Participants Rommel Dionisio - Aegis Capital Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the a ...

Financial Performance - Revenues for the three months ended September 30, 2021, were $23,084,793, representing a 39.8% increase from $16,520,598 in the same period of 2020[20]. - Gross profit for the nine months ended September 30, 2021, was $15,906,986, up 93.8% from $8,204,274 in the same period of 2020[20]. - Net income for the three months ended September 30, 2021, was $1,253,529, compared to $460,001 for the same period in 2020, marking a 172.5% increase[20]. - Total revenues for the nine months ended September 30, 2021, were $75,899,994, up from $42,969,010 for the same period in 2020, representing an increase of approximately 76.7%[88]. - The company reported a basic and diluted net income per ordinary share of $0.09 for the three months ended September 30, 2021, compared to $0.02 for the same period in 2020[21]. - The Company recorded net income attributable to shareholders of $528,348 for the three months ended September 30, 2021, compared to $207,933 for the same period in 2020[190]. Assets and Liabilities - Total current assets as of September 30, 2021, were $134,442,643, an increase of 24.8% from $107,643,434 as of December 31, 2020[13]. - Total liabilities as of September 30, 2021, were $91,582,750, compared to $81,317,275 as of December 31, 2020, reflecting a 12.4% increase[17]. - Total shareholders' equity increased to $66,476,608 as of September 30, 2021, from $50,661,462 as of December 31, 2020, representing a 31.3% growth[17]. - Accounts receivable, net, increased to $21,321,082 as of September 30, 2021, from $12,408,548 as of December 31, 2020[126]. - Total inventories, net, rose to $20,608,956 as of September 30, 2021, up from $15,380,063 as of December 31, 2020[129]. - Accounts payable increased to $28,288,161 as of September 30, 2021, from $22,005,260 as of December 31, 2020[145]. Cash Flow and Financing - The company reported a net cash used in operating activities of $(5,864,423) for the nine months ended September 30, 2021, compared to $2,201,537 for the same period in 2020, indicating a decline in cash flow from operations[31]. - The net cash provided by financing activities was $12,669,108 for the nine months ended September 30, 2021, compared to $2,196,111 for the same period in 2020, showing a substantial increase[34]. - Cash and cash equivalents increased to $9,020,787 as of September 30, 2021, from $7,159,015 as of December 31, 2020, indicating a 25.9% rise[13]. - The total cash and cash equivalents at the end of the period was $15,656,356, compared to $11,194,616 at the end of September 30, 2020, reflecting a year-over-year increase of about 40.5%[34]. Research and Development - Research and development expenses for the nine months ended September 30, 2021, were $3,337,056, up 108.5% from $1,604,151 in the same period of 2020[20]. - Research and development costs totaled approximately $3,337,056 for the nine months ended September 30, 2021, compared to $1,604,151 for the same period in 2020, reflecting an increase of approximately 108.3%[93]. Market and Product Development - The company anticipates continued growth in revenues and profitability, driven by market expansion and new product development initiatives[8]. - Greenland launched a new division for electric industrial vehicles in December 2020, with the first batch of GEF-series electric forklifts beginning commercial sales in the U.S. market in November 2021[41]. - The company plans to establish assembly sites and experience centers in the United States in 2022 to support local sales, assembly, and distribution of electric vehicles[41]. - Greenland Technologies reported revenue growth from approximately $42.97 million for the nine months ended September 30, 2020, to approximately $75.90 million for the same period in 2021, representing an increase of 76.6%[40]. - The company sold 110,082 sets of transmission products to more than 100 forklift manufacturers in China during the nine months ended September 30, 2021, compared to 71,749 sets in the same period of 2020, marking a 53.3% increase in sales volume[40]. Shareholder Information - As of September 30, 2021, Cenntro Holding Limited owned 59.20% of Greenland's outstanding ordinary shares, indicating a significant shareholder concentration[43]. - The number of ordinary shares issued and outstanding increased from 10,225,142 as of December 31, 2020, to 11,371,171 as of September 30, 2021, reflecting an increase of about 11.2%[168]. Legal and Regulatory Matters - The Company has evaluated all legal proceedings and claims as of September 30, 2021, and December 31, 2020, related to contingencies[110]. - The Company has settled a class action lawsuit related to its Business Combination, resulting in a payment of $65,000 as of January 25, 2021[203]. Economic and Political Risks - The Company is subject to economic and political risks associated with operating in the PRC, which may affect its financial condition and results[112].

Financial Data and Key Metrics Changes - The company achieved gross revenue of $23.1 million in Q3 2021, representing a 39.7% year-over-year growth [7][15] - Gross profit increased to $5.1 million, a 50% rise from $3.4 million in Q3 2020, with gross margin improving to 22.1% [10][17] - Net income surged 172.5% year-over-year to $1.3 million [12][19] - Cash, restricted cash, and cash equivalents reached $15.7 million at the end of September, down from $20.5 million at the end of June [19] Business Line Data and Key Metrics Changes - The number of transmission products sold increased by 11.6% to 33,478 units from 29,985 units in Q3 2020 [15] - Operating expenses rose to $3 million, a 162% increase from $1.2 million in Q3 2020, primarily due to increased sales, consultancy, and R&D expenses [18] Market Data and Key Metrics Changes - The company noted a cooling down of the China market, with GDP falling from 18.3% in Q1 to 4.9% in Q3 2021 [7][8] - Despite the challenges in the China market, global warehousing and manufacturing demand remains strong [8] Company Strategy and Development Direction - The company is expanding into global markets with a new line of electric industrial vehicles, which is a key part of its strategy to mitigate risks and develop long-term value [8][9] - The first assembly plant location is being considered in Maryland, Virginia, or New Jersey, with plans to continue manufacturing in existing facilities [9][10] - The company is developing experience centers to allow potential customers to learn about and operate its industrial vehicles [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving year-end gross revenue guidance of $90 million to $100 million, despite challenges such as material shortages and freight delays [7][8] - The company is confident in its ability to adapt to supply chain challenges and maintain production levels [33] Other Important Information - The first batch of GEF-Series Electric Lithium Forklifts has arrived in the U.S. and is available for commercial sale, with strong demand already noted [10][11] - The company is also preparing for the arrival of its GEL-1800 electric loader and GEX-8000 excavator, with expectations for strong demand [11][12] Q&A Session Summary Question: Update on market share growth and drivers - Management highlighted robust manufacturing capabilities and established supply chains as key factors driving market share growth despite global constraints [23] Question: Design of Greenland forklifts and battery compatibility - The forklifts are designed around specific batteries and integrated drive trains, catering to lithium-powered forklifts [27] Question: Targeting upcoming demonstrations of the GEL-1800 - The company plans to market the GEL-1800 in industries suited for its charging needs, focusing on indoor facilities and urban settings [30] Question: Challenges in component sourcing for electric vehicles - Management acknowledged material shortages and supply chain challenges but emphasized their ability to adapt and procure necessary components [33] Question: Role of built-in chargers in forklift sales - The built-in charger is seen as a significant value add, simplifying logistics for customers transitioning to electric forklifts [36]

Financial Data and Key Metrics Changes - The company achieved a record revenue of $28.2 million, representing a 70.1% year-over-year growth [7][16] - The number of transmissions sold increased by 43.6% to 42,046 units from 28,305 units in the second quarter of 2020 [16] - Gross profit rose to $5.7 million, an increase of 98% from $2.9 million in the same quarter last year, with gross margin improving by 280 basis points to 20.2% [18][19] - Net income reached $3.2 million, marking a 114.2% increase from the previous year [20] Business Line Data and Key Metrics Changes - The company is expanding its product line to include lithium-powered electric forklifts and industrial-sized electric front loaders and excavators, with initial models ready for shipment [11][12] - The electric industrial vehicles are expected to be commercially available by the end of the year, with strong interest already noted [56] Market Data and Key Metrics Changes - Significant growth in global logistics and warehousing industries has driven sales of forklift trucks, particularly in markets outside of China [8] - The company has seen nearly doubled vehicle exports outside of China in the second quarter, indicating strong market momentum [8] Company Strategy and Development Direction - The company plans to establish assembly sites in the United States for its electric industrial vehicles, focusing on local assembly and distribution [13][50] - A strategic research partnership was formed with Zhongcha Heavy Industry Machinery to enhance the efficiency of lithium-powered electric forklifts [14] - The company aims to capture market share in North America by offering electric forklifts at competitive prices compared to lead-acid models [32][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, particularly with the launch of new electric industrial vehicles [15][70] - The company is navigating supply chain challenges effectively, which has contributed to its strong performance [17] - Management anticipates that reasonable sales for electric vehicles will begin in the second to third quarter of 2022 [31][58] Other Important Information - The company filed an S-3 registration for $155 million in shares to finance its expansion and product development [14] - The total operating expenses increased to $2.3 million, up 84.1% from the previous year, primarily due to increased sales and labor costs [19] Q&A Session Summary Question: What is driving the core revenue growth? - Management attributed the growth to supply chain security, manufacturing efficiencies, and increased adoption of newer products [22][23] Question: How are raw material price increases being managed? - The company has chosen not to pass raw material costs onto clients, which has helped build long-term relationships [26][27] Question: What is the outlook for the U.S. market? - Management is confident in the U.S. market's potential, especially for electric forklifts, and expects to see reasonable sales starting in 2022 [30][31] Question: How does the company plan to prevent competitors from entering the market? - The company highlighted the high skill level required for manufacturing electric industrial vehicles and the lack of incentive for current market leaders to shift from internal combustion engines [44][45] Question: What are the expected margins for electric vehicles? - Initial purchase prices for electric vehicles will be comparable to legacy combustion vehicles, with lower maintenance costs expected to enhance ROI [50][51]