Financial Performance - Total revenues for the year ended September 30, 2024, were $69,073,374, a decrease of 5.5% from $73,084,448 in 2023[29] - Gross profit for 2024 was $16,034,519, down from $18,379,041 in 2023, reflecting a gross margin of approximately 23.2%[29] - Net income attributable to Leishen Energy Holding Co., Ltd. for 2024 was $8,095,871, a decrease of 31.5% compared to $11,858,590 in 2023[29] - Earnings per ordinary share for 2024 were $0.52, down from $0.77 in 2023[29] - Operating expenses increased to $8,482,626 in 2024, compared to $6,488,526 in 2023, primarily due to higher selling and marketing expenses[29] - The company reported a comprehensive income of $8,981,306 for 2024, compared to $12,359,603 in 2023[29] - Net income for 2024 was $7.99 million, a decrease of 31.5% from $11.63 million in 2023[31] - Cash at the end of 2024 rose to $7.30 million, compared to $4.57 million in 2023, marking an increase of 59.5%[31] - Total current liabilities decreased to $27.14 million in 2024, down from $31.82 million in 2023, a reduction of 14.7%[30] - Accounts receivable decreased significantly to $21.83 million in 2024 from $30.74 million in 2023, a decline of 29.0%[30] - Cash flows from operating activities improved to $15.07 million in 2024, compared to $4.39 million in 2023, an increase of 242.4%[31] - Total equity attributable to Leishen Energy Holding Co., Ltd increased to $39.79 million in 2024, up from $30.81 million in 2023, a growth of 29.1%[30] - The company reported a provision for credit losses of receivables and advances to suppliers amounting to $1.50 million in 2024, compared to $840,900 in 2023[31] - The company incurred cash taxes paid of $307,462 in 2024, up from $107,926 in 2023, an increase of 184.5%[31] Regulatory and Compliance Risks - The company faced regulatory risks related to operations in China, including potential impacts from the Overseas Listing Trial Measures effective March 31, 2023[24] - The Holding Foreign Companies Accountable Act may affect the trading of the company's shares if the PCAOB cannot inspect its auditor[25] - The company does not anticipate being subject to cybersecurity reviews as it does not hold personal information of over one million individuals[24] - The company’s independent auditor, Wei, Wei & Co., LLP, is based in the U.S. and has been regularly inspected by the PCAOB, mitigating some regulatory risks[25] - The company faces risks related to compliance with PRC regulations, which may adversely affect its ability to operate and expand its business[40] - The PRC Anti-monopoly Law requires filings for concentrations of undertakings that reach specified thresholds, and non-compliance could lead to governmental investigations and adverse effects on the company's financial condition[84] - The company may face heightened regulatory scrutiny due to increased focus on anti-monopoly and anti-unfair competition compliance, potentially affecting its business operations and growth prospects[87] - PRC regulations on loans and direct investments by offshore holding companies may delay or prevent the company from using proceeds from offerings to fund its PRC subsidiaries, impacting liquidity[88] - The company is subject to SAFE regulations that may limit its ability to use RMB-denominated funds for operations in China, affecting its financial flexibility[89] - The currency conversion system in the PRC imposes limitations on converting RMB into foreign currencies, which may restrict the company's ability to remit dividends to shareholders[96] - A withholding tax of 10% applies to dividends payable by Chinese companies to non-PRC resident enterprises, unless reduced by treaties, impacting the company's dividend distribution strategy[96] - The company may face significant costs and procedural obstacles in legal processes due to jurisdictional challenges in China and Hong Kong[40] - The evolving regulatory landscape regarding cybersecurity and data protection in China may impose significant compliance costs and operational disruptions[142] - The company may incur administrative penalties if its PRC subsidiaries do not maintain consistent business and registered addresses, complicating regulatory compliance[151] Market and Industry Risks - The cyclical nature of the oil and natural gas industry significantly affects operating results, with fluctuations in commodity prices leading to changes in demand for oilfield services[42] - The ongoing military conflict in Ukraine may lead to significant market disruptions, including volatility in commodity prices and supply chain interruptions[43] - The company is heavily reliant on experienced personnel, and competition for skilled workers may impact growth potential and profitability[38] - The company must continually research and develop new technologies and products to remain competitive in a rapidly evolving industry[47] - Fluctuations in exchange rates could materially impact the company's results of operations and the value of investments[38] - The company’s financial performance is heavily dependent on the economic conditions of the oil and gas industry, with revenues primarily derived from integrated automation services[64] - The company’s profitability is linked to its ability to help customers exploit natural gas reserves at competitive costs, with potential risks from reserve depletion[66] - The company may require additional capital for growth strategies, which may not be available on favorable terms, potentially limiting business expansion[69] - The company is subject to various PRC laws and regulations, and failure to obtain or renew necessary permits could materially affect operations[70] - The COVID-19 pandemic has adversely impacted the company’s operations and may continue to do so in the future, affecting demand for services[73] - The company’s operations are significantly influenced by political, economic, and social conditions in China, which could adversely affect business performance[76] - The company faces competition for skilled personnel, which is crucial for maintaining service quality and operational effectiveness[67] - The company’s ability to attract and retain skilled workers is essential for growth potential and profitability, with labor shortages posing a risk[68] - Increases in labor costs in China are expected to continue, adversely affecting profitability unless these costs can be passed on to customers[120] - The average wage level for employees has increased, impacting overall operational costs[120] - Stricter regulatory requirements regarding labor contracts and employee benefits may limit the company's ability to adjust employment practices cost-effectively[121] Corporate Governance and Shareholder Matters - Hongliang Li, the CEO and director, controls a majority of the voting power of the company's Ordinary Shares, which may limit minority shareholders' influence on management decisions[153] - The company has not historically declared or paid dividends on its Ordinary Shares, and future returns will primarily depend on share price appreciation[155] - The company is classified as an "emerging growth company" and may take advantage of certain exemptions from disclosure requirements, potentially affecting investor confidence[163] - The company may incur significant additional expenses and management efforts once it ceases to qualify as an "emerging growth company" due to increased compliance requirements[168] - The trading price of the company's Ordinary Shares has been volatile, which could result in substantial losses for investors[158] - Future sales of substantial amounts of Ordinary Shares could adversely affect the market price and the company's ability to raise capital[154] - The company may face challenges in maintaining a sufficient number of independent directors, which could impact corporate governance and investor protection[171] - The company is not required to comply with all periodic disclosure requirements applicable to U.S. domestic issuers, resulting in potentially less publicly available information[172] - The concentrated control by Hongliang Li may discourage potential investors from acquiring Ordinary Shares, affecting trading prices[153] - The company may experience fluctuations in stock price due to market and industry factors, which may not reflect its actual operating performance[159] Business Operations and Technology - The company operates primarily in the energy sector, with four main segments: clean-energy equipment, new energy production and operation, digitalization and integration equipment, and oil and gas engineering technical services[186] - The company is the only manufacturer of ultra-high pressure reciprocating compressors in China, with a pressure discharge of up to 52MPa and a daily processing capacity exceeding 250,000 cubic meters[194] - The company has patented technologies for ultra-high pressure natural gas reciprocating compressors, enabling large-scale manufacturing of medium and high-speed compressor sets[195] - The company’s expansion units are covered by two PRC domestic invention patents, focusing on residual pressure difference power generation technology, which is a key development area[200] - The company’s electromagnetic/solar dual effect oil well heating units are designed to address high viscosity issues in crude oil, enhancing transportation and processing efficiency[201] - The company provides a range of technical solutions for oil and gas production, including equipment leasing, technical personnel support, and remote expert product diagnosis[189] - The company’s new energy production and operation business focuses on the production, storage, and transportation of natural gas, as well as the development of distributed energy solutions[190] - The company’s digitalization and integration business aims to provide informatization solutions for the oil and gas industry, focusing on industrial interconnectivity and big data trends[191] - The wellhead safety control system has an annual production capacity of over 200 sets, operating at pressures between 70 to 140 MPa, and has received high praise from users[209] - The integrated pre-water separation unit reduces investment and land requirements by 50% and 30% respectively compared to traditional processes, improving economic returns[215] - The polymer flexible composite pipes can withstand pressures up to 70 MPa and can replace 70% to 80% of traditional metal pipelines, offering high cost-effectiveness[217] - The online sampling system for natural gas can operate at pressures as high as 15 MPa and is suitable for various sampling methods, enhancing monitoring capabilities[212] - The solar powered wellhead safety control system addresses power supply issues in remote areas, reducing operating and maintenance costs[210] - The company has developed a patented online natural gas sampling system that ensures the quality of natural gas in long-distance pipelines[214] - The integrated pre-splitting device can treat oil-bearing produced water with an oil content of 350 mg/L to 1,500 mg/L, achieving stringent purification requirements[216] - The wellhead safety control system includes features for remote control and monitoring, significantly saving manpower and material resources[211] - The company has extensive installation experience of flexible composite pipes in various international projects, including oilfields in Kazakhstan and Turkmenistan[219] - The solar wellhead control panel can perform multiple shutdown functions, enhancing safety and operational efficiency in challenging environments[211]
Leishen Energy Holding Co., Ltd.(LSE) - 2024 Q4 - Annual Report