Pond Technologies

Greenland Technologies Reports Second Quarter and First Half 2023 Unaudited Financial Results

21 August 2023
  • 2Q23 Revenue Increased 14% Year-over-Year
  • 2Q23 Gross Margin Improved 590 Basis Points Year-over-Year
  • 2Q23 Net Income Increased 24% Year-over-Year
  • Cash and Cash Equivalents Grew 373% Year-over-Year to $15.2 Million

EAST WINDSOR, N.J., Aug. 21, 2023 /PRNewswire/ -- Greenland Technologies Holding Corporation (NASDAQ: GTEC) ("Greenland" or the "Company"), a technology developer and manufacturer of electric industrial vehicles and drivetrain systems for material handling machineries and vehicles, today announced its unaudited financial results for the second quarter and first half ended June 30, 2023.

Second Quarter 2023 Financial and Operating Highlights

  • Revenue was $23.6 million, an increase of 14% from $20.6 million a year ago.
  • Gross margin was 29.4%, up 590 basis points from 23.5% a year ago on improved product mix. 
  • Net income was $2.9 million, an increase of 24% from $2.4 million in the second quarter of 2022.
  • Transmissions products sold were 38,256 units, an increase of 32% from 28,939 units a year ago.

First Half 2023 Financial and Operating Highlights

  • Revenue was $45.7 million, compared with $49.9 million a year ago.
  • Gross margin was 27.2%, up 470 basis points from 22.5% a year ago on improved product mix. 
  • Net income was $5.4 million, a slight increase of 2% from $5.3 million in the first half of 2022.
  • Transmissions products sold were 75,097 units, an increase of 6% from 70,841 units a year ago.

"We are pleased to deliver strong second quarter results as our core markets in China have largely returned to a new-normal following years of COVID disruptions", said Mr. Raymond Wang, Chief Executive Officer of Greenland Technologies. "Demand for our transmission products increased significantly from the second quarter of last year and drove revenue growth of 14%. On a constant currency basis, our revenue growth was even stronger at 19% year-over-year, after excluding the impact of FX. Further, our strategic focus on higher value products continued to pay off and drove our gross margin to improve nearly 600 basis points to 29.4%, which is a record high for us over the last few years. Looking into the second half of the year, we expect demand to remain strong and we continue to anticipate revenue growth for our core transmission business in 2023."

Mr. Jing Jin, Chief Financial Officer of Greenland, commented: "Improved demand and product mix in the second quarter drove strong financial results across almost every metric. Notably, our net income to grew 24% year-over-year and we ended the quarter with $15.2 million of cash, up nearly 400% from a year ago. These impressive results demonstrate our leading position in the industry and the effectiveness of our business strategies. Going forward, we will continue to leverage our core strengths and execute growth strategies to bolster our core transmission business while also expanding our HEVI division."

Second Quarter 2023 Financial Results

Revenue was $23.6 million, an increase of 14% from $20.6 million in the second quarter of 2022, due to the increase in the Company's sales volume of its transmission products. On an RMB basis, excluding the impact of FX, revenue increased approximately 19% from the second quarter of 2022. The number of transmission products sold was 38,256 units, an increase of 32% from 28,939 in the second quarter of 2022. 

Costs of goods sold were $16.6 million, an increase of 6% from $15.8 million in the second quarter of 2022, primarily due to the increase in sales volume.

Gross profit was $6.9 million, an increase of 43% from $4.8 million in the second quarter of 2022. Gross margin was 29.4%, up 590 basis points from 23.5% in the second quarter of 2022, resulting from a strategic shift in Greenland's product mix towards higher value and sophistication products such as hydraulic transmissions.

Total operating expenses were $3.5 million, an increase of 34% from $2.6 million in the second quarter of 2022. The increase was primarily due to the Company's focus on R&D investment as well as advertising, marketing, general and administrative activities related to its expansion, along with higher shipping fees.

Income from operations was $3.4 million, an increase of 54% from $2.2 million in the second quarter of 2022. 

Net income was $2.9 million, an increase of 24% from $2.4 million in the second quarter of 2022.

Basic and diluted net income per ordinary share were both $0.18, an increase of 38% from $0.13 per ordinary share in the second quarter of 2022.

First Half 2023 Financial Results

Revenue was $45.7 million, a decrease of 8% from $49.9 million in the first half of 2022, primarily due to logistical and supply chain challenges in the first quarter from the initial wave of covid cases following the end of China's zero covid policies and significant pent-up demand-related travel during this year's Chinese New Year holiday. Revenue was also impacted by a stronger dollar relative to the Chinese RMB. On an RMB basis, excluding the impact of FX, revenue decreased approximately 2% from the first half of 2022. The number of transmission products sold was 75,097 units, an increase of 6% from 70,841 units in the first half of 2022. 

Costs of goods sold were $33.3 million, a decrease of 14% from $38.7 million in the first half of 2022, primarily due to the decrease in sales.

Gross profit was $12.5 million, an increase of 11% from $11.2 million in the first half of 2022. Gross margin was 27.2%, up 470 basis points from 22.5% in the first half of 2022, resulting from a strategic shift in Greenland's product mix towards higher value and sophistication products such as hydraulic transmissions.

Total operating expenses were $6.7 million, an increase of 18% from $5.6 million in the first half of 2022. The Company has focused on R&D investment and general and administrative activities related to the Company's expansion, which offset the decrease in after-sales service fees. 

Income from operations was $5.8 million, an increase of 4% from $5.6 million in the first half of 2022. 

Net income was $5.4 million, a slight increase of 2% from $5.3 million in the first half of 2022.

Basic and diluted net income per ordinary share were both $0.3, up 3% from $0.29 per ordinary share in the first half of 2022.

Conference Call

Greenland Technologies management will host an earnings conference call at 4:30 PM on Monday, August 21, 2023, U.S. Eastern Time (4:30 AM on August 22, 2023, Beijing/Hong Kong Time). 

Participant Registration

Investors and analysts interested in participating in Greenland's second quarter and first half 2023 earnings call need to register in advance using the URL provided below. Conference access information will be provided upon registration.

Participant Online Pre-Registration:

https://register.vevent.com/register/BI3891950c447148bf9c94f6a78f21defb

A live and archived webcast will also be available on the investor relations section of Greenland's website at https://ir.gtec-tech.com/.

About Greenland Technologies Holding Corporation

Greenland Technologies Holding Corporation (NASDAQ: GTEC) is a developer and a manufacturer of drivetrain systems for material handling machineries and electric vehicles, as well as electric industrial vehicles. Information on the Company's clean industrial heavy equipment division can be found at HEVI Corp.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking statements." Such statements reflect Greenland's current views with respect to future events and are subject to such risks and uncertainties, many of which are beyond the control of Greenland, including those set forth in the Risk Factors section of Greenland's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC"). Copies are available on the SEC's website, www.sec.gov. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Greenland's expectations with respect to future performance. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains and economic activity in general. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Statements contained in this news release regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Greenland does not intend and does not assume any obligation to update these forward-looking statements, other than as required by law.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited financial information.

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

 AS OF JUNE 30, 2023 AND DECEMBER 31, 2022

(IN U.S. DOLLARS)

  

June 30,

  

December 31,

 
  

2023

  

2022

 

ASSETS

      

Current assets

        

Cash and cash equivalents

 

$

15,232,289

  

$

16,295,695

 

Restricted cash

  

3,815,661

   

3,433,361

 

Short Term Investment

  

5,653,055

   

7,800,723

 

Notes receivable

  

31,366,381

   

28,748,879

 

Accounts receivable, net of allowance for doubtful accounts of $1,104,705 and
    $762,325, respectively

  

20,908,968

   

14,337,760

 

Inventories

  

20,216,673

   

23,096,382

 

Due from related parties-current

  

34,675,437

   

36,669,907

 

Advance to suppliers

  

1,068,716

   

412,766

 

Prepayments and other current assets

  

375,495

   

1,568,687

 

Total Current Assets

 

$

133,312,675

  

$

132,364,160

 
         

Non-current asset

        

Property, plant, equipment and construction in progress, net

  

14,132,165

   

15,585,214

 

Land use rights, net

  

3,418,932

   

3,639,067

 

Other intangible assets

  

120,947

   

147,465

 

Long term investment

  

300,000

   

250,000

 

Deferred tax assets

  

277,222

   

219,207

 

Operating lease right-of-use assets

  

2,379,271

   

2,627,110

 

Other non-current assets

  

255,977

   

283,118

 

Total non-current assets

 

$

20,884,514

  

$

22,751,181

 

TOTAL ASSETS

 

$

154,197,189

  

$

155,115,341

 

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2023 AND DECEMBER 31, 2022 (Continued)

(IN U.S. DOLLARS)

  

June 30,

  

December 31,

 
  

2023

  

2022

 
       

Current Liabilities

      

Short-term bank loans

 

$

7,309,034

  

$

8,986,255

 

Notes payable-bank acceptance notes

  

28,120,761

   

28,272,472

 

Accounts payable

  

24,983,677

   

24,817,165

 

Taxes payables

  

-

   

192,478

 

Customer deposits

  

217,674

   

227,432

 

Due to related parties

  

1,690,031

   

1,693,315

 

Other current liabilities

  

2,433,957

   

1,547,390

 

Current portion of operating lease liabilities

  

533,157

   

472,182

 

Total current liabilities

 

$

65,288,291

  

$

66,208,689

 
         

Long-term liabilities

        

Long term operating lease  liabilities

  

1,928,680

   

2,176,130

 

Other long-term liabilities

  

1,641,079

   

1,812,759

 

Total long-term liabilities

 

$

3,569,759

  

$

3,988,889

 

TOTAL LIABILITIES

 

$

68,858,050

  

$

70,197,578

 
         

COMMITMENTS AND CONTINGENCIES

        

EQUITY

        

Ordinary shares, no par value, unlimited shares authorized; 12,978,504 and
  12,978,504 shares issued and outstanding as of
June 30, 2023 and December 31,
  20
22.

  

-

   

-

 

Additional paid-in capital

  

32,955,927

   

32,955,927

 

Statutory reserves

  

3,842,331

   

3,842,331

 

Retained earnings

  

41,074,374

   

37,228,261

 

Accumulated other comprehensive income (loss)

  

(5,804,429)

   

(2,831,419)

 

Total shareholders' equity

 

$

72,068,203

  

$

71,195,100

 

Non-controlling interest

  

13,270,936

   

13,722,663

 

TOTAL EQUITY

 

$

85,339,139

  

$

84,917,763

 
         

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

154,197,189

  

$

155,115,341

 

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED, IN U.S. DOLLARS)

  

Three months ended

June 30,

  

Six months ended

June 30,

 
  

2023

  

2022

  

2023

  

2022

 

REVENUES

 

$

23,569,449

  

$

20,602,505

  

$

45,718,809

  

$

49,909,462

 

COST OF GOODS SOLD

  

16,641,612

   

15,763,344

   

33,267,542

   

38,702,327

 

GROSS PROFIT

  

6,927,837

   

4,839,161

   

12,451,267

   

11,207,135

 

Selling expenses

  

574,040

   

518,088

   

961,525

   

1,157,735

 

General and administrative expenses

  

1,519,564

   

1,244,634

   

3,161,468

   

2,524,380

 

Research and development expenses

  

1,425,394

   

862,535

   

2,545,285

   

1,945,129

 

Total operating expenses

 

$

3,518,998

  

$

2,625,257

  

$

6,668,278

  

$

5,627,244

 

INCOME FROM OPERATIONS

 

$

3,408,839

  

$

2,213,904

  

$

5,782,989

  

$

5,579,891

 

Interest income

  

44,683

   

9,887

   

75,076

   

22,449

 

Interest expense

  

(79,504)

   

(91,651)

   

(145,997)

   

(196,660)

 

Loss on disposal of property and equipment

  

(239)

   

10

   

(239)

   

(394)

 

Other income

  

(128,768)

   

501,710

   

288,614

   

762,742

 

INCOME BEFORE INCOME TAX

 

$

3,245,011

  

$

2,633,860

  

$

6,000,443

  

$

6,168,028

 

INCOME TAX

  

304,815

   

254,434

   

601,673

   

873,804

 

NET INCOME

 

$

2,940,196

  

$

2,379,426

  

$

5,398,770

  

$

5,294,224

 

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING
    INTEREST

  

541,058

   

892,162

   

1,552,657

   

2,019,908

 

NET INCOME ATTRIBUTABLE TO GREENLAND
    TECHNOLOGIES HOLDING CORPORATION AND
    SUBSIDIARIES

 

$

2,399,138

  

$

1,487,264

  

$

3,846,113

  

$

3,274,316

 

OTHER COMPREHENSIVE INCOME (LOSS):

  

(4,591,131)

   

(4,075,452)

   

(4,273,799)

   

(3,701,542)

 

Unrealized foreign currency translation income (loss)
    attributable to Greenland Technologies Holding
    Corporation and subsidiaries

  

(3,185,362)

   

(2,720,040)

   

(2,973,010)

   

(2,471,958)

 

Unrealized foreign currency translation income (loss)
    attributable to Noncontrolling interest

  

(1,405,769)

   

(1,355,412)

   

(1,300,789)

   

(1,229,584)

 

Comprehensive income (loss)

  

(786,224)

   

(1,232,776)

   

873,103

   

802,358

 

Noncontrolling interest

  

(864,711)

   

(463,250)

   

251,868

   

790,324

 

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:

                

Basic and diluted

  

12,978,504

   

11,329,530

   

12,978,504

   

11,329,530

 

NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO
    OWNERS OF THE COMPANY:

                

Basic and diluted

  

0.18

   

0.13

   

0.30

   

0.29

 

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