丝路物流控股(00988) - 2023 - 年度业绩

Annual Performance Summary UBTECH Robotics' 2023 fiscal year revenue increased by 4.7% to RMB 1,055.7 million, but gross profit decreased by 16.2% to RMB 333 million, and net loss expanded to RMB 1,264.6 million Financial Summary UBTECH Robotics' 2023 fiscal year revenue increased by 4.7% to RMB 1,055.7 million, but gross profit decreased by 16.2% to RMB 333 million, and net loss expanded to RMB 1,264.6 million Table: Financial Performance Overview | Metric | 2023 (RMB million) | 2022 (RMB million) | | :--- | :--- | :--- | | Revenue | 1,055.7 | 1,008.3 | | Gross Profit | 333 | 397 | | Loss | 1,264.6 | 987.4 | - Revenue increased by 4.7% from RMB 1,008.3 million in 2022 to RMB 1,055.7 million in 2023[4] - Gross profit decreased by 16.2% from RMB 397 million in 2022 to RMB 333 million in 2023[4] - Loss expanded to RMB 1,264.6 million in 2023, compared to RMB 987.4 million in 2022[4] Management Discussion and Analysis The company achieved significant technological breakthroughs in robotics and AI amidst a recovering macro environment, with varied performance across business segments, and plans to focus on humanoid robots and embodied intelligence for future growth 2023 Macroeconomic Environment and Technological Breakthroughs In 2023, China's economy recovered rapidly, with humanoid robots, large models, and AI industries booming; UBTECH achieved breakthroughs in robotics, AI, and their integration, increasing R&D investment as a percentage of total revenue - In 2023, China's economy rapidly recovered, with the explosion of humanoid robots, large models, and AI industries becoming a significant driving force for global technological development[6] Table: R&D Expenditure Overview | Metric | 2023 (RMB million) | 2022 (RMB million) | % of Total Revenue (2023) | % of Total Revenue (2022) | | :--- | :--- | :--- | :--- | :--- | | R&D Expenditure | 490.5 | 428.3 | 46.5% | 42.5% | Robotics Technology The company continuously enhanced humanoid robot motion planning and control, full-body torque control, and initiated research on reinforcement learning-based gait planning algorithms, making progress in perception-driven gait planning and servo drive and transmission technology - Continuously enhanced robot motion planning and control technology, full-body torque control technology, and initiated research on end-to-end humanoid robot gait planning algorithms based on reinforcement learning[6] - Achieved progress in perception-driven gait planning and generation, enabling robots to autonomously navigate complex scenarios like slopes and stairs based on identified terrain information[6] - Developed various servo drive and transmission technologies, including large-thrust linear servo drives, laying the hardware foundation for enhancing the motion capabilities of next-generation large humanoid robots[6] Artificial Intelligence Technology The company applied lightweight high-performance visual models to robots for edge-side human-machine interaction, self-developed low-cost binocular depth cameras, and achieved multi-sensor multi-modal fusion perception in autonomous vehicles; it also developed offline speech full-chain interaction technology to enhance interaction fluency and user privacy protection - Applied lightweight high-performance visual models to robots and smart products; also self-developed low-cost binocular depth camera kits to achieve binocular vision perception technology[7] - Achieved stable and reliable panoramic perception in autonomous vehicles based on multi-sensor multi-modal fusion, including target detection, semantic segmentation, and drivable area functions[7] - Developed offline speech full-chain interaction technology, covering key components such as automatic speech recognition (ASR), natural language processing (NLP), and text-to-speech (TTS), which operates without network connection and features low latency and high speed[7] Robotics and AI Integration Technology The company continuously upgraded its USLAM positioning and navigation system, achieving breakthroughs in indoor and outdoor scenarios, including campus outdoor low-speed autonomous driving and indoor multi-type obstacle perception; it also researched multi-modal large language models for robot perception, decision-making, and operation, enhancing multi-task decision and execution capabilities - Continuously upgraded its self-developed USLAM positioning and navigation system to adapt to more diverse scenarios and software/hardware platforms, achieving technological breakthroughs in both indoor and outdoor settings, and implementing an intelligent driving solution for unmanned logistics vehicles that does not rely on RTK high-precision positioning[9] - Researched multi-modal large language model technology for robot perception, decision-making, and operation, successfully implementing a framework for robots to interact with the environment and multi-modal large language models for autonomous task planning[10] - This technology integrates multi-modal information such as map data, visual object recognition, and speech recognition, providing robots with more comprehensive and accurate environmental perception, understanding, and interaction capabilities, thereby enhancing multi-task decision-making and execution abilities[10] 2023 Business Review In 2023, UBTECH made significant progress across its four business segments: education, logistics, customized solutions, and consumer robots; education and customized business revenue declined due to project delays, while logistics and consumer businesses saw substantial growth from enhanced product competitiveness and new launches - In 2023, the company was committed to exploring broader market areas and actively developing intelligent robot + diversified integrated application solutions[13] Table: Revenue by Business Segment | Business Segment | 2023 Revenue (RMB million) | 2022 Revenue (RMB million) | Year-over-Year Change | % of Total Revenue (2023) | | :--- | :--- | :--- | :--- | :--- | | Educational Intelligent Robots and Solutions | 347.4 | 516.7 | -32.8% | 32.9% | | Logistics Intelligent Robots and Solutions | 389.7 | 263.4 | +47.9% | 36.9% | | Customized Intelligent Robots and Solutions for Other Industries | 62.2 | 82.4 | -24.5% | 5.9% | | Consumer-Grade Robots and Other Hardware | 253.6 | 132.4 | +91.5% | 24.0% | Educational Intelligent Robots and Solutions The company built a comprehensive educational software and hardware development platform, upgraded its new-generation education platform with AI large model integration, enhancing eight key AI functions and significantly improving the winning rate for educational projects; it successfully launched the UGOT general bionic building robot and actively explored "science, education, research, and tourism" integrated solutions, though revenue for this business decreased by 32.8% due to project delivery and acceptance delays - Developed a new generation education platform, integrating high-tech AI large model applications to empower core platform businesses, further strengthening eight key AI functions: image recognition, speech recognition, machine learning, facial recognition, natural language processing, posture recognition, graffiti recognition, and generative artificial intelligence (AIGC)[12] - Successfully launched UGOT, a versatile bionic building robot with rich AI attributes, high openness, and ease of assembly, along with AI education-related courses, achieving its crowdfunding goal on Kickstarter[13] - Revenue from educational intelligent robots and solutions reached RMB 347.4 million in 2023, a 32.8% decrease from 2022, primarily due to delays in delivery and acceptance of some awarded or signed projects by year-end[13] Logistics Intelligent Robots and Solutions This business focuses on five major industries: new energy vehicles, tires, 3C electronics, batteries, and e-commerce, leveraging the UPilot operating system and ACU controller to launch the Wali series AGV/AMR and Chitu L4 autonomous logistics vehicle, providing full-stack logistics robot solutions; Chitu achieved a breakthrough from 0 to 1, and Wali T3000 entered mass production, with revenue for this business increasing by 47.9% due to enhanced product competitiveness, new product launches, repeat customer purchases, and expanded application scenarios - Focused on five major industries: new energy vehicle manufacturers, tire production factories, 3C electronic equipment factories, battery production lines, and e-commerce, launching key products including the Wali series of automated guided vehicles (AGV) and autonomous mobile robots (AMR), and the Chitu L4 autonomous logistics vehicle[15] - The Chitu L4 autonomous logistics vehicle was grandly released, winning the "New Strategy • Golden Stone Award" for innovative products, breaking the boundaries of indoor and outdoor logistics scenarios, and creating an integrated indoor-outdoor unmanned factory solution[15] - Revenue from logistics intelligent robots and solutions reached RMB 389.7 million in 2023, a 47.9% increase from 2022, primarily due to enhanced product and solution competitiveness, continuous new product launches, increased repeat purchases from existing customers, growth in new customers, and expansion into new application scenarios[16] Customized Intelligent Robots and Solutions for Other Industries The company continued to provide customized intelligent robot solutions for schools, hospitals, shopping malls, and restaurants; the Cruzr series was developed for overseas 4S stores and vocational education, the Cadebot delivery robot was launched, and the Walker S series explored applications in new energy vehicle production lines; its elder care solution won the Edison Award for Technology Innovation, though revenue for this business decreased by 24.5% due to project delivery and acceptance delays - The Cruzr series was specifically developed for the overseas 4S store needs of a leading new energy vehicle company in Shenzhen, providing greeting, car knowledge Q&A, and product promotion services in multiple languages, and collaborated with a well-known traditional fuel vehicle manufacturer in China for customized R&D for 4S store services[18] - Developed the Cadebot delivery robot, which has now been launched into the market and is rapidly expanding in overseas markets; the Walker S series began exploring applications on new energy vehicle assembly lines, developing a specialized industrial humanoid robot currently being piloted on leading domestic new energy vehicle assembly lines[18] - The elder care solution and products won the Edison Award for Technology Innovation in the United States and have been successfully applied in multiple institutions, communities, and home care service scenarios[19] - Revenue from customized intelligent robots and solutions for other industries reached RMB 62.2 million in 2023, a 24.5% decrease from 2022, primarily due to delays in delivery and acceptance of some awarded or signed projects by year-end[19] Consumer-Grade Robots and Other Hardware The company's first-generation smart litter box received positive reviews globally, and a complete secondary distribution system was established; the second-generation smart litter box and cyclone strong suction robot vacuum have entered mass production, and the boundary-free smart lawnmower project is progressing smoothly, with revenue for this business increasing by 91.5% due to continuous new consumer-grade smart product launches - The company's first-generation smart litter box received consistent praise from users and customers in China, the United States, Europe, South Korea, Turkey, Southeast Asia, and other regions; through a year of channel development, a complete secondary distribution system has been established, covering mainstream global markets[21] - The second-generation smart litter box and cyclone strong suction robot vacuum have both entered mass production, with the latter becoming a hot product on Kickstarter crowdfunding; the boundary-free smart lawnmower project is also progressing smoothly[21] - Revenue from consumer-grade robots and other hardware reached RMB 253.6 million in 2023, a 91.5% increase from 2022, primarily driven by the continuous launch of new consumer-grade smart products[21] Operations and Future Outlook As of year-end 2023, the company had 2,013 employees, with increased compensation costs primarily due to share-based payments; capital expenditures focused on Shenzhen headquarters construction, and future strategy centers on humanoid robots and AI, targeting embodied intelligence breakthroughs and optimizing overseas expansion - As of December 31, 2023, the company had 2,013 full-time employees, with total compensation costs of RMB 1,006.8 million, an increase of RMB 144 million from 2022, primarily due to an increase of RMB 179.5 million in share-based compensation expenses[22] - In 2023, the group's capital expenditure, mainly related to the construction of its Shenzhen headquarters, was RMB 540.7 million[25] - The company's core strategy is humanoid robots and artificial intelligence, aiming to bring humanoid robots into thousands of households, with future expectations of achieving breakthroughs in embodied intelligence technology[27] Employees and Compensation Policy As of year-end 2023, the company had 2,013 full-time employees, with total compensation costs of RMB 1,006.8 million, a 16.7% year-over-year increase, mainly due to increased share-based payment expenses; the company attracts talent through diversified recruitment channels, offers competitive compensation and equity incentive plans, and focuses on employee training and cultural development Table: Compensation Costs | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Total Compensation Costs | 1,006.8 | 862.8 | +16.7% | | Of which: Increase in Share-based Compensation Expenses | 179.5 | - | - | - The company has approved and adopted multiple equity incentive plans since 2015 to motivate, retain, and reward talent who contribute to the group's development[22] - The company invests in continuing education and regular and customized internal and external training courses to provide employees with training to enhance their professional knowledge and management skills[24] Capital Expenditure, Right-of-Use Assets and Lease Liabilities Capital expenditure in 2023 reached RMB 540.7 million, primarily for the construction of the Shenzhen headquarters; right-of-use assets and lease liabilities both increased, resulting in corresponding depreciation and interest expenses - In 2023, the group's capital expenditure, mainly related to the construction of its Shenzhen headquarters, was RMB 540.7 million[25] Table: Right-of-Use Assets and Lease Liabilities | Metric | December 31, 2023 (RMB million) | December 31, 2022 (RMB million) | | :--- | :--- | :--- | | Right-of-Use Assets | 65.7 | 55.2 | | Lease Liabilities | 77.0 | 66.1 | | Depreciation Expense for Right-of-Use Assets (2023) | 32.0 | - | | Interest Expense for Lease Liabilities (2023) | 2.8 | - | Future Outlook The company's future strategy centers on humanoid robots and artificial intelligence, continuously investing in humanoid robot software and hardware R&D, deeply integrating multi-modal large language models, and promoting industrial and service scenario applications; simultaneously, it will prioritize multi-modal perception and large model technology to build a robot brain, research embodied intelligence to enhance robot interaction, operation, and learning capabilities in the physical world, accelerate the development of new productive forces, and optimize its overseas layout - The company's core strategy is humanoid robots and artificial intelligence, aiming to bring humanoid robots into thousands of households, with future expectations of achieving breakthroughs in embodied intelligence technology[27] - Will focus on humanoid robot software and hardware R&D, enhancing motion capabilities, intelligence, and operational abilities, deeply integrating the latest artificial intelligence technologies such as multi-modal large language models[27] - Will prioritize multi-modal perception and large model technology as important strategies, researching large model robots to enhance multi-modal perception, data analysis, reasoning, decision-making, and multi-task generalization capabilities in dynamic scenarios, thereby building a robot brain[29] - Will research embodied intelligence technology to enhance robots' physical world interaction, operation, and learning capabilities, enabling them to autonomously perform complex and even unfamiliar tasks, and will further optimize its overseas layout to expand international markets[30] Financial Review The company experienced revenue growth driven by logistics and consumer segments, but profitability declined due to sales mix and increased expenses, while liquidity improved significantly from operating cash flow and IPO proceeds, with prudent financial policies in place Revenue Overview and Structure Total revenue reached RMB 1,055.7 million in 2023, a 4.7% year-over-year increase, primarily from education, logistics, customized, and consumer robot solutions, with logistics and consumer segments significantly increasing their revenue share while education and customized businesses declined - The group's revenue in 2023 was RMB 1,055.7 million, an increase of 4.7% from RMB 1,008.3 million in 2022[32] Table: Revenue by Business Segment | Business Segment | 2023 Revenue (RMB thousand) | 2023 % | 2022 Revenue (RMB thousand) | 2022 % | | :--- | :--- | :--- | :--- | :--- | | Educational Intelligent Robots and Solutions | 347,328 | 32.9% | 516,688 | 51.2% | | Logistics Intelligent Robots and Solutions | 389,724 | 36.9% | 263,437 | 26.1% | | Customized Intelligent Robots and Solutions for Other Industries | 62,238 | 5.9% | 82,418 | 8.2% | | Consumer-Grade Robots and Other Hardware | 253,583 | 24.0% | 132,448 | 13.1% | | Other | 2,825 | 0.3% | 13,281 | 1.3% | | Total | 1,055,698 | 100.0% | 1,008,272 | 100.0% | - Revenue from educational intelligent robots and solutions decreased by 32.8%, primarily due to delays in delivery and acceptance of some awarded or signed projects by year-end[34] - Revenue from logistics intelligent robots and solutions increased by 47.9%, primarily due to enhanced product and solution competitiveness, continuous new product launches, increased repeat purchases from existing customers, growth in new customers, and expansion into new application scenarios[34] - Revenue from consumer-grade robots and other hardware increased by 91.5%, primarily driven by the continuous launch of new consumer-grade smart products[36] Profitability Analysis In 2023, the company's gross profit and margin declined due to product sales mix changes, while selling and R&D expenses significantly increased from share-based payments and promotional costs, leading to an expanded net loss - Gross profit decreased by 16.2% from RMB 397.2 million in 2022 to RMB 332.8 million in 2023, with gross margins of 31.5% and 39.4% respectively[37] - Selling expenses increased by RMB 132.8 million from RMB 373.3 million in 2022 to RMB 506.1 million in 2023, with the percentage of the group's revenue increasing from 37.0% to 47.9%[39] - R&D expenses increased by RMB 62.2 million from RMB 428.3 million in 2022 to RMB 490.5 million in 2023, with the percentage of the group's revenue increasing from 42.5% to 46.4%[42] - Loss for the year expanded from RMB 987.4 million in 2022 to RMB 1,264.6 million in 2023[47] Gross Profit and Gross Margin In 2023, gross profit decreased by 16.2% to RMB 332.8 million, and gross margin narrowed from 39.4% to 31.5%, primarily due to changes in product sales mix, with an increased proportion of lower-margin logistics intelligent robot solutions and a decreased proportion of higher-margin educational intelligent robot products and services Table: Gross Profit and Gross Margin | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 332.8 | 397.2 | -16.2% | | Gross Margin | 31.5% | 39.4% | -7.9 percentage points | - The decrease in gross profit and gross margin was primarily due to changes in product sales mix, with an increased proportion of revenue from logistics intelligent robots and solutions, which have relatively lower gross margins, and a decreased proportion of revenue from the company's higher-margin educational intelligent robot products and services[37] Other Income In 2023, other income significantly increased by 189.4% year-over-year to RMB 27.2 million, mainly due to a lower base in 2022 resulting from partial VAT refunds Table: Other Income | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Other Income | 27.2 | 9.4 | +189.4% | - The increase in other income was primarily due to a smaller amount of other income in 2022 resulting from partial VAT refunds[38] Selling Expenses In 2023, selling expenses increased by 35.6% year-over-year to RMB 506.1 million, with its proportion of revenue rising from 37.0% to 47.9%, mainly due to an increase of RMB 91.8 million in share-based payment expenses and RMB 40.1 million in e-commerce promotion expenses Table: Selling Expenses | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | % of Revenue (2023) | % of Revenue (2022) | | :--- | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 506.1 | 373.3 | +35.6% | 47.9% | 37.0% | | Of which: Increase in Share-based Payments | 91.8 | - | - | - | - | | Of which: Increase in E-commerce Promotion Expenses | 40.1 | - | - | - | - | Administrative Expenses In 2023, administrative expenses decreased by 2.4% year-over-year to RMB 399.7 million, with its proportion of revenue falling from 40.6% to 37.9%, primarily because the RMB 92 million expense from subsidiary acquisition in 2022 did not recur in 2023, though this was partially offset by RMB 63.7 million in one-off listing expenses and an increase of RMB 25.8 million in share-based payment expenses in 2023 Table: Administrative Expenses | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | % of Revenue (2023) | % of Revenue (2022) | | :--- | :--- | :--- | :--- | :--- | :--- | | Administrative Expenses | 399.7 | 409.7 | -2.4% | 37.9% | 40.6% | - The decrease in administrative expenses was primarily due to an expense of RMB 92 million incurred in 2022 for the acquisition of a subsidiary, which did not recur in 2023; however, this was partially offset by RMB 63.7 million in one-off listing expenses and an increase of RMB 25.8 million in share-based payment expenses incurred in 2023[41] Research and Development Expenses In 2023, R&D expenses increased by 14.5% year-over-year to RMB 490.5 million, with its proportion of revenue rising from 42.5% to 46.4%, mainly due to an increase of RMB 60.7 million in share-based payment expenses Table: R&D Expenses | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | % of Revenue (2023) | % of Revenue (2022) | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | 490.5 | 428.3 | +14.5% | 46.4% | 42.5% | | Of which: Increase in Share-based Payment Expenses | 60.7 | - | - | - | - | Credit Impairment Losses In 2023, credit impairment losses significantly increased by 212.3% year-over-year to RMB 145.0 million, primarily due to delayed payments from individual government-related customers, leading to a provision for impairment based on prudence Table: Credit Impairment Losses | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Credit Impairment Losses | 145.0 | 46.4 | +212.3% | - The increase in credit impairment losses was primarily due to delayed payments from individual government-related customers, leading to a provision for impairment in 2023 based on prudence[43] Finance Costs and Income Tax Expense In 2023, finance costs increased to RMB 9.0 million, primarily due to the combined effect of decreased exchange gains and decreased interest expenses; income tax expense increased to RMB 37.4 million, mainly due to increased pre-tax income of taxable subsidiaries Table: Finance Costs and Income Tax Expense | Metric | 2023 (RMB million) | 2022 (RMB million) | | :--- | :--- | :--- | | Finance Costs | 9.0 | 0.2 | | Income Tax Expense | 37.4 | 16.5 | - The increase in finance costs was primarily due to the combined effect of a decrease of RMB 19.9 million in exchange gains and a decrease of RMB 9.5 million in interest expenses in 2023[44] - The increase in income tax expense was primarily due to an increase in the pre-tax income of taxable subsidiaries[45] Loss for the Year Considering the aforementioned factors, the company's net loss for 2023 further expanded to RMB 1,264.6 million, an increase of 28.1% from RMB 987.4 million in 2022 Table: Loss for the Year | Metric | 2023 (RMB million) | 2022 (RMB million) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Loss for the Year | 1,264.6 | 987.4 | +28.1% | Non-GAAP Measures To supplement GAAP financial statements, the company uses "adjusted net loss for the year" and "adjusted EBITDA" as non-GAAP measures to better assess financial performance, reporting an adjusted net loss of RMB 817.0 million and adjusted EBITDA of RMB -515.5 million in 2023 - The company uses "adjusted net loss for the year (non-GAAP measure)" and "adjusted EBITDA (non-GAAP measure)" as additional financial measures to evaluate financial performance[48] Table: Non-GAAP Financial Measures | Metric | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Net Loss for the Year | (1,264,590) | (987,368) | | Add: Share-based Compensation | 383,839 | 204,387 | | Add: Listing Expenses | 63,749 | 944 | | Adjusted Net Loss for the Year | (817,002) | (782,037) | | Adjusted EBITDA | (515,454) | (537,674) | Liquidity and Capital Resources Operating cash flow significantly increased to RMB 1,000.0 million in 2023, with cash and cash equivalents rising to RMB 520.9 million and external bank borrowings to RMB 1,453.5 million by year-end; the leverage ratio increased to 73.3%, current ratio improved to 1.5 times, and global offering proceeds further strengthened liquidity Table: Liquidity and Capital Resources | Metric | December 31, 2023 (RMB million) | December 31, 2022 (RMB million) | | :--- | :--- | :--- | | Operating Cash Flow | 1,000.0 | 538.7 | | Cash and Cash Equivalents | 520.9 | 145.4 | | External Bank Borrowings | 1,453.5 | 622.7 | | Leverage Ratio | 73.3% | 65.4% | | Current Ratio | 1.5 times | 1.0 times | - As of December 31, 2023, the group's liquidity remained robust, sufficient to meet its working capital needs, supported by its cash and bank balances, and the net proceeds of approximately RMB 789.2 million from the international placement of the global offering received in early 2024[53] Asset Pledge and Financial Policy As of year-end 2023, 100% equity of subsidiary Shenzhen UBTECH Robotics Industry Co., Ltd. was pledged as bank loan collateral; the company's business is primarily RMB-denominated, with most cash in RMB and some in HKD from IPO, and it adopts a prudent foreign exchange risk management policy without specific hedging - As of December 31, 2023, 100% equity of the group's subsidiary, Shenzhen UBTECH Robotics Industry Co., Ltd., was pledged as collateral for the group's bank loans[54] - The group's business is primarily located in China, and most of its revenue is denominated in RMB; as of December 31, 2023, approximately 79.0% of the group's bank balances and cash were denominated in RMB, and 17.4% in HKD[55] - The group continues to adopt a prudent policy for foreign exchange risk management; for the year ended December 31, 2023, the group had not formulated a foreign currency hedging policy for foreign currency transactions, assets, and liabilities[55] Financial Statements The consolidated financial statements for 2023 reflect a net loss of RMB 1,264,590 thousand and a significant increase in total assets to RMB 4,765,635 thousand, with improved liquidity metrics Consolidated Income Statement UBTECH Robotics' 2023 consolidated income statement shows revenue of RMB 1,055,698 thousand, operating loss of RMB 1,227,636 thousand, net loss of RMB 1,264,590 thousand, and net loss attributable to parent company shareholders of RMB 1,234,048 thousand, with basic and diluted loss per share at RMB 3.05 Table: Consolidated Income Statement | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Operating Revenue | 1,055,698 | 1,008,272 | | Operating Costs | (722,880) | (611,104) | | Selling Expenses | (506,113) | (373,344) | | Administrative Expenses | (399,706) | (409,652) | | R&D Expenses | (490,502) | (428,280) | | Credit Impairment Losses | (144,995) | (46,386) | | Net Loss | (1,264,590) | (987,368) | | Net Loss Attributable to Parent Company Shareholders | (1,234,048) | (974,809) | | Basic and Diluted Loss Per Share (RMB) | (3.05) | (2.50) | Consolidated Balance Sheet As of December 31, 2023, UBTECH Robotics' consolidated balance sheet reported total assets of RMB 4,765,635 thousand, a significant increase from 2022, with total current assets of RMB 2,917,237 thousand, total current liabilities of RMB 1,952,105 thousand, and total equity of RMB 2,088,883 thousand Table: Consolidated Balance Sheet | Item | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Assets | | | | Total Current Assets | 2,917,237 | 1,385,159 | | Total Non-Current Assets | 1,848,398 | 1,402,843 | | Total Assets | 4,765,635 | 2,788,002 | | Liabilities and Equity | | | | Total Current Liabilities | 1,952,105 | 1,364,495 | | Total Non-Current Liabilities | 724,647 | 369,583 | | Total Liabilities | 2,676,752 | 1,734,078 | | Total Equity Attributable to Parent Company Shareholders | 1,960,413 | 961,279 | | Non-Controlling Interests | 128,470 | 92,645 | | Total Equity | 2,088,883 | 1,053,924 | Notes to Financial Statements The notes detail the company's establishment, accounting policies, segment information, revenue breakdown, expense categories, tax rates, per-share loss, and significant changes in receivables, borrowings, share capital, and dividend policy Company Overview Shenzhen UBTECH Robotics Corp. Ltd. was established in China on March 31, 2012, with its H-shares listed on the HKEX main board on December 29, 2023; Mr. Zhou Jian is the ultimate controlling shareholder with approximately 51.17% voting power, and the company primarily engages in robot R&D, design, production, sales, and related services - Shenzhen UBTECH Robotics Corp. Ltd. was established in the People's Republic of China on March 31, 2012, and its H-shares were listed and traded on the Main Board of The Stock Exchange of Hong Kong Limited on December 29, 2023[63][64] - Mr. Zhou Jian effectively controls approximately 51.17% of the company's voting rights and is considered the ultimate controlling shareholder of the company[63] - The company and its subsidiaries are primarily engaged in the research and development, design, production, and sales of robots, as well as providing related services and solutions[63] Basis of Preparation of Financial Statements Financial statements are prepared in accordance with Chinese Enterprise Accounting Standards on a going concern basis, with specific accounting policies and estimates applied to receivables, inventory, fixed assets, intangible assets, right-of-use assets, and revenue recognition - These financial statements are prepared in accordance with the "Enterprise Accounting Standards – Basic Standards" and various specific accounting standards and related regulations issued by the Ministry of Finance on February 15, 2006, and thereafter[65] - These financial statements are prepared on a going concern basis[66] - The group determines specific accounting policies and accounting estimates based on its production and operation characteristics, mainly reflected in the measurement of expected credit losses for accounts receivable, inventory valuation methods, depreciation of fixed assets, amortization of intangible assets and right-of-use assets, and revenue recognition and measurement[66] Segment Information Management considers the group to have only one operating segment, thus no segment information is disclosed, with over 90% of non-current assets located in mainland China - The group's management believes that the group has only one operating segment, and therefore, the group has not disclosed segment information[67] - For the year 2023, over 90% of the group's non-current assets (excluding financial instruments and deferred tax assets) were located in mainland China[68] Changes in Accounting Policies The accounting treatment for deferred income tax related to assets and liabilities arising from a single transaction, as per Interpretation No. 16 of the Chinese Enterprise Accounting Standards, had no significant impact on the group's financial statements - The accounting treatment provisions in Interpretation No. 16 of the Chinese Enterprise Accounting Standards, issued by the Ministry of Finance in 2022, regarding deferred income tax related to assets and liabilities arising from a single transaction not applying the initial recognition exemption, had no significant impact on the financial statements of the group and the company[70] Operating Revenue and Operating Costs Total operating revenue in 2023 was RMB 1,055,698 thousand, comprising RMB 964,273 thousand from goods sales and RMB 91,425 thousand from services, with over 90% of revenue from mainland China and two customers contributing 40% of total revenue Table: Operating Revenue and Operating Costs | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Main Business Revenue (Sales of Goods) | 964,273 | 910,778 | | Main Business Revenue (Provision of Services) | 91,425 | 97,494 | | Total Operating Revenue | 1,055,698 | 1,008,272 | | Operating Costs | 722,880 | 611,104 | - In 2023, two customers contributed over 10% each to the group's operating revenue, with a combined total of RMB 422,822,000, accounting for 40% of the group's operating revenue[71] Expenses by Nature Expenses by nature in 2023 included RMB 654,352 thousand for raw materials, RMB 622,970 thousand for staff compensation, RMB 383,839 thousand for share-based payments, and significantly increased listing fees of RMB 63,749 thousand Table: Expenses by Nature | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Raw Materials and Low-Value Consumables Consumed | 654,352 | 347,271 | | Staff Compensation Expenses | 622,970 | 658,418 | | Share-based Payments | 383,839 | 204,387 | | Advertising and Marketing Expenses | 90,932 | 50,784 | | Depreciation and Amortization | 85,945 | 90,043 | | Listing Expenses | 63,749 | 944 | Income Tax Expense Income tax expense in 2023 was RMB 37,361 thousand, with the group's statutory tax rate in mainland China at 25%, some companies enjoying preferential rates of 5% and 15%, Hong Kong subsidiaries at 16.5%, and North American subsidiaries at 29.84% Table: Income Tax Expense | Item | 2023 (RMB thousand) | 2022 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax Calculated According to Tax Laws and Regulations | 37,361 | 16,509 | - The group's statutory tax rate in China is 25%, with some companies applying preferential tax rates of 5% and 15%; the company's subsidiary established in Hong Kong applies an income tax rate of 16.5%, and its subsidiary established in North America applies an income tax rate of 29.84%[73] Loss Per Share Basic loss per share for 2023 expanded to RMB 3.05 from RMB 2.50 in 2022, with diluted loss per share being the same as basic loss per share due to the absence of dilutive potential ordinary shares Table: Loss Per Share | Metric | 2023 (RMB) | 2022 (RMB) | | :--- | :--- | :--- | | Consolidated Net Loss Attributable to Ordinary Shareholders of the Parent Company | 1,234,048 | 974,809 | | Weighted Average Number of Ordinary Shares Outstanding (shares) | 405,149 | 389,194 | | Basic Loss Per Share | 3.05 | 2.50 | - For the years 2023 and 2022, diluted loss per share was the same as basic loss per share because the group had no dilutive potential ordinary shares[74] Accounts Receivable As of December 31, 2023, total accounts receivable were RMB 1,068,734 thousand, with a bad debt provision of RMB 235,061 thousand, resulting in a net amount of RMB 833,673 thousand; the aging structure shows the highest proportion within six months, but accounts receivable over one year also significantly increased Table: Accounts Receivable | Item | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Accounts Receivable | 1,068,734 | 739,284 | | Less: Provision for Bad Debts | (235,061) | (89,629) | | Net Amount | 833,673 | 649,655 | Table: Accounts Receivable Aging Analysis | Aging | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within Six Months | 618,188 | 469,282 | | Six Months to One Year | 67,318 | 119,912 | | One to Two Years | 291,208 | 89,978 | | Two to Three Years | 59,991 | 11,916 | | Over Three Years | 32,029 | 48,196 | Other Receivables As of December 31, 2023, net other receivables significantly increased to RMB 869,456 thousand from 2022, primarily due to RMB 828,142 thousand in proceeds from the listing offering Table: Other Receivables | Item | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Receivables from Listing Offering Proceeds | 828,142 | — | | Deposits and Guarantees | 36,134 | 48,781 | | Total Other Receivables | 886,108 | 67,530 | | Less: Provision for Bad Debts | (16,652) | (17,089) | | Net Amount | 869,456 | 50,441 | - Receivables from listing offering proceeds amounted to RMB 828,142,000, which were transferred to the company's fundraising account in Hong Kong on January 3, 2024[79] Short-Term Borrowings As of December 31, 2023, total short-term borrowings significantly increased to RMB 777,223 thousand from 2022, with guaranteed borrowings being the largest component, secured by parent and other subsidiary guarantees, and some loans collateralized by land use rights, subsidiary equity, and patents Table: Short-Term Borrowings by Type | Type | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Mortgaged, Pledged, and Guaranteed Borrowings | 72,146 | 30,028 | | Pledged Borrowings | 2,000 | 58,000 | | Guaranteed Borrowings | 643,063 | 236,440 | | Credit Borrowings | 60,014 | — | | Total | 777,223 | 324,468 | - Bank mortgaged, pledged, and guaranteed borrowings are secured by certain land use right assets of the group as collateral, 100% equity of subsidiary Shenzhen UBTECH Robotics Industry Co., Ltd., and 16 self-developed patents of the group as pledges, and guaranteed by the company and Mr. Zhou Jian[80] - Bank guaranteed borrowings are loans obtained by subsidiaries within the group with guarantees provided by the parent company and other subsidiaries[81] Accounts Payable As of December 31, 2023, total accounts payable were RMB 412,534 thousand, mainly comprising material and outsourced labor payments, with RMB 64,312 thousand over one year primarily for outsourced projects Table: Accounts Payable | Item | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Payables for Materials | 260,408 | 156,804 | | Payables for Outsourced Labor | 148,351 | 129,083 | | Total | 412,534 | 305,406 | - As of December 31, 2023, accounts payable overdue for more than one year amounted to RMB 64,312,000, primarily for outsourced project payments, as some payments require final settlement after project acceptance due to longer project durations[82] Long-Term Borrowings As of December 31, 2023, net long-term borrowings significantly increased to RMB 648,989 thousand from 2022, secured by land use rights, subsidiary equity, and patents, guaranteed by the company and Mr. Zhou Jian, with principal repayable by June 18, 2031 Table: Long-Term Borrowings | Item | December 31, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Mortgaged, Pledged, and Guaranteed Borrowings | 676,311 | 298,194 | | Less: Long-Term Borrowings Due Within One Year | (27,322) | (2,303) | | Net Amount | 648,989 | 295,891 | - Bank mortgaged, pledged, and guaranteed borrowings are secured by certain land use right assets of the group as collateral, 100% equity of Shenzhen UBTECH Robotics Industry Co., Ltd., and 16 self-developed patents of the group as pledges, and guaranteed by the company and Mr. Zhou Jian[85] - The principal is to be fully repaid by June 18, 2031[85] Share Capital As of December 31, 2023, the company's share capital was RMB 417,851 thousand; in 2023, new shares were issued through private placement and H-share listing, raising capital recorded in share capital and share premium Table: Share Capital | Item | As of December 31, 2022 (RMB thousand) | New Shares Issued This Year (RMB thousand) | As of December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | :--- | | Share Capital | 396,173 | 21,678 | 417,851 | - In 2023, the company privately placed a total of 10,395,538 shares to investors at a price of RMB 78.88 per share, raising a total of RMB 820,000,000[86] - On December 29, 2023, the company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited, and a total of 11,282,000 shares were publicly offered at a price of HKD 90.00 per share, raising a total of HKD 1,015,380,000[86] Dividends The Board does not recommend distributing dividends for the 2023 financial year - On March 28, 2024, the company's Board of Directors did not recommend distributing dividends for the 2023 financial year[87] Corporate Governance and Other Information The company adheres to corporate governance standards, including a securities trading code for directors, and has not engaged in listed securities transactions; no significant legal proceedings were reported, and global offering proceeds remain largely unused, with post-reporting events including partial exercise of over-allotment option and shareholder approvals for key financial and governance matters Compliance with Corporate Governance Code Following its H-share listing on December 29, 2023, the company adopted the Corporate Governance Code, complying with all applicable provisions as of December 31, 2023, except for the combined roles of Chairman and CEO, which the Board deems in the company's and shareholders' best interests - Following the listing of the company's H-shares on December 29, 2023, the company adopted corporate governance practices based on the principles and code provisions set out in the Corporate Governance Code as its own corporate governance practice code[89] - For the period ended December 31, 2023, the company complied with all applicable code provisions contained in the Corporate Governance Code, except for a deviation from code provision C.2.1 (the roles of chairman and chief executive should be separate and should not be performed by the same individual)[89][90] - The Board believes that Mr. Zhou Jian concurrently serving as Chief Executive Officer and Chairman of the Board is most appropriate, and the current arrangement is beneficial to the group's management and is in the overall best interests of the company and its shareholders[90] Standard Code for Securities Transactions by Directors Post-listing, the company adopted the Standard Securities Dealing Code for Directors of Listed Issuers, with all directors and supervisors confirming compliance during the reporting period, and no employee violations found - The company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as its code of conduct for securities transactions by directors, supervisors, and employees of the group[92] - The company has made specific inquiries to all directors and supervisors, and the directors and supervisors have confirmed that they have complied with the required standards set out in the Standard Code during the relevant period[92] Listed Securities Transactions From the listing date to the announcement date, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - From the listing date to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[94] Significant Legal Proceedings For the year ended December 31, 2023, the group was not involved in any significant legal proceedings - For the year ended December 31, 2023, the group was not involved in any significant legal proceedings[95] Proceeds from Global Offering and Use The company's global offering raised net proceeds of approximately HKD 905.9 million (excluding partial exercise of over-allotment option), all of which remained unused as of December 31, 2023; detailed fund utilization plans were disclosed, and additional proceeds from the over-allotment option were resolved for working capital and general corporate purposes - After deducting underwriting commissions and all related expenses, the net proceeds received by the company from the global offering amounted to approximately HKD 905.9 million[96] Table: Global Offering Net Proceeds and Expected Use | Use | Approximate Percentage of Total Net Proceeds | Global Offering Net Proceeds (HKD million) | Expected Time for Full Utilization of Remaining Net Proceeds | | :--- | :--- | :--- | :--- | | Further enhance our R&D capabilities to strengthen our core technologies, products, and service offerings | 47% | 425.8 | Before end of 2026 | | Repay bank loans | 19.4% | 175.7 | Before end of 2024 | | Strengthen R&D infrastructure to enhance R&D capabilities and efficiency | 7.9% | 71.6 | Before end of 2024 | | Enhance brand awareness and market penetration | 9.5% | 86.1 | Before end of 2025 | | Further optimize our management and operational efficiency | 6.2% | 56.2 | Before end of 2026 | | General working capital | 10.0% | 90.6 | Before end of 2024 | | Total | 100% | 905.9 | | - From the listing date until December 31, 2023, all net proceeds from the global offering remained unused[100] - The Board resolved to change the use of the additional net proceeds to working capital and other general corporate purposes[102] Audit Committee and Auditors The Audit Committee, comprising three independent non-executive directors, reviewed the 2023 consolidated annual results, deeming them compliant with applicable accounting standards, laws, and regulations; PwC Zhongtian CPAs acknowledged the financial data in the announcement but did not express an assurance opinion - The Audit Committee currently comprises three independent non-executive directors, with Mr. Xiong Chuxiong serving as the Chairman of the Audit Committee[103] - The Audit Committee has reviewed the group's consolidated annual results for the year ended December 31, 2023, with the company's management and auditors, and believes they comply with applicable accounting standards, laws, and regulations[103] - The consolidated balance sheet, consolidated income statement, and related notes for the group for the year ended December 31, 2023, as contained in this annual results announcement, have been agreed upon by the group's auditors, PricewaterhouseCoopers Zhongtian LLP, but the work performed does not constitute an audit, and therefore no assurance opinion will be expressed[104] Events After Reporting Period Subsequent to the reporting period, the over-allotment option was partially exercised, yielding approximately HKD 25.3 million in additional net proceeds; the Board resolved to propose adopting Chinese Enterprise Accounting Standards, amending articles, appointing auditors, providing guarantees, and applying for bank credit, all approved by shareholders - The over-allotment option was partially exercised on January 19, 2024, and the company received approximately HKD 25.3 million in additional net proceeds on January 24, 2024, after deducting partial listing fees and underwriting commissions from the partial exercise of the over-allotment option[106] - The Board resolved to propose adopting Chinese Enterprise Accounting Standards, amending the company's articles of association, appointing auditors, the company providing guarantee arrangements to certain subsidiaries, and the company applying for bank credit arrangements, all of which were approved by shareholders at the first extraordinary general meeting held on February 8, 2024[106] Public Shareholding and Final Dividend Based on public information, public shareholders held no less than 25% of issued shares from the listing date to the announcement date, meeting listing rule requirements; the Board does not recommend a final dividend for 2023 - Based on publicly available information and to the best knowledge of the directors, public shareholders held no less than 25% of the issued shares from the listing date until the date of this announcement, complying with the Listing Rules requirements[108] - The Board does not recommend the payment of any final dividend for the year ended December 31, 2023[109] Announcement Publication This annual results announcement has been published on the HKEX and company websites; the annual report containing all information required by listing rules will be dispatched to shareholders and published in due course - This announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.ubtrobot.com)[110](index=110&type=chunk) - The company's annual report for the year ended December 31, 2023, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned HKEX and company websites in due course[112]