U Power Announces First Half of 2024 Financial Results
SHANGHAI, Oct. 8, 2024 /PRNewswire/ -- U Power Limited (Nasdaq: UCAR) (the "Company" or "U Power"), a vehicle sourcing services provider with a vision to becoming a comprehensive EV battery power solution provider in China, today announced its financial results for the six months ended June 30, 2024.
Mr. Jia Li, Chief Executive Officer and Chairman of the Board of Directors of the Company, commented, "In the first half of fiscal year 2024, our business achieved 595.7% year-over-year revenue growth to reach RMB13.2 million. This growth stemmed from increased orders from both existing clients and new customers for our battery-swapping stations as the economy continued to gradually recover following the COVID-19 pandemic. We've been successful in transforming our vehicle sourcing business to provide EV battery power solutions in China. We believe that this shift has enhanced our competitiveness, and we expect it to expand our future revenue growth potential."
Ms. Bingyi Zhao, Chief Financial Officer of the Company, added, "Our financial results for the first half of fiscal year 2024 demonstrate our commitment to responsible financial management while simultaneously making strategic investments for our future growth. Our R&D expenses decreased as we have successfully completed several key projects, and we remain committed to innovation and have strategically allocated resources to new and high-potential research initiatives. Our improved credit management practices have yielded positive results, as we generated an expected gain on credit of RMB0.5 million in the first half, compared to a loss in the same period last year. We believe we are well-positioned with the necessary working capital and strong foundation to support our growth plans, including the launch of operations in multiple international markets, and we are confident in the current financial state of the business."
First Half of 2024 Financial Results
Revenues
Total revenues increased by 595.7% year over year to RMB13.2 million (US$1.8 million) in the first half of 2024.
-- Product sales revenues were RMB12.4 million (US$1.7 million) in the
first half of 2024, compared to nil in the same period of 2023,
representing 93.9% of total net revenues. This was a result of the
Company's ability to sell more battery stations as the economy gradually
recovered from the impact of COVID-19 in 2023.
-- Sourcing services revenues were RMB0.1 million (US$10,000) in the first
half of 2024, compared to RMB1.4 million in the same period of 2023,
representing 0.6% of total net revenues. The decrease was a result of
the company's shift in focus towards charging- and swapping-related
products.
-- Battery-swapping services revenues were RMB0.7 million (US$0.1 million)
in the first half of 2024, compared to RMB0.5 million in the same period
of 2023, representing 5.5% of total net revenues. The increase was
primarily driven by the Company's operation of a second battery-swapping
station beginning in March 2023, which remained operational through the
reporting period.
Cost of revenues, gross profit and margin
Total cost of revenues increased 1,893.6% year over year to RMB11.9 million (US$1.6 million) for the first half of 2024, primarily driven by significant revenue growth and strategic shifts in the supply chain. This increase was primarily due to the increased cost of product sales of battery swapping stations.
Total gross profit decreased 0.8% year over year to RMB1.3 million (US$0.2 million) for the first half of 2024, representing a gross margin of 9.8%.
Operating expenses
Total operating expenses were RMB27.7 million (US$3.8 million) for the first half of 2024, representing an increase of 26.8% from the same period last year.
-- Sales and marketing expenses were RMB1.5 million (US$0.2 million) in the
first half of 2024, compared to RMB1.0 million in the same period of
last year, representing an increase of 46.5%. This increase is primarily
due to the increase in marketing expenses for selling battery swapping
stations.
-- General and administrative expenses were RMB26.2 million (US$3.6
million) in the first half of 2024, compared to RMB16.8 million in the
same period of last year, representing an increase of 55.8%, primarily
driven by an increase in audit costs and other professional service
costs.
-- Research and development expenses were RMB0.6 million (US$0.1 million)
in the first half of 2024, compared to RMB1.9 million in the same period
of last year, representing a decrease of 70.4%, primarily due to the
decreased UOTTA technology innovation activities related to research and
development programs.
-- Expected gain/loss on credit resulted in a gain of RMB0.5 million
(US$70,000) in the first half of 2024, compared to a loss of RMB2.1
million in the same period of last year. The decrease was primarily due
to the decreased impact of potential uncollectible amounts for advances
to suppliers and other current assets, and reflects improved credit
management practices and a stronger collection process.
Net loss
Net loss was RMB26.5 million (US$3.6 million) in the first half of 2024, compared with RMB7.2 million in the same period of last year.
Loss per share
Basic and diluted loss per share were both RMB7.42 (US$1.02) in the first half of 2024, compared with basic and diluted loss per share of RMB6.88 in the same period of last year.
Liquidity
As of June 30, 2024, the Company had cash and cash equivalents and restricted cash of RMB40.5 million (US$5.6 million), compared with RMB36.2 million as of December 31, 2023.
Business Developments
On August 5, 2024, the Company announced that it signed a Memorandum of Understanding with Velo Labs Technology Ltd., a global fintech company, to establish a battery infrastructure investment ecosystem in Thailand. This collaboration aims to accelerate the development of battery bank operations within the UOTTA battery-swapping ecosystem.
On July 3, 2024, the Company announced that it had signed a Memorandum of Understanding ("MoU") with Pattaya AI Terminal Co., Ltd. to jointly drive the strategic development of green logistics and electric vehicle ("EV") infrastructure in Thailand.
On June 5, 2024, the Company announced that its UOTTA technology and battery swapping station model is to be adopted in a strategic collaboration between UNEX EV B.V. ("UNEX") and Associação Nacional dos Transportes Rodoviários em Automóveis Ligeiros ("ANTRAL"). ANTRAL is an association of companies in Portugal, representing public passenger road transport companies operating light vehicles designated as taxis. Through their collaboration, UNEX and ANTRAL aim to significantly reduce greenhouse gas emissions in the transport sector by 2030, in line with the European Union's decarbonization targets and Portugal's regulatory requirements for taxi vehicles.
Exchange Rate Information
This announcement contains translations of certain Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from Renminbi to U.S. dollars were made at the rate of RMB7.2672 to US$1.00, the exchange rate on June 30, 2024, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on June 30, 2024. The Company makes no representation that the Renminbi or U.S. dollars amounts referred to could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.
Safe Harbor Statements
This press release may contain "forward-looking statements". Forward-looking statements reflect the Company's current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "could," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "propose," "potential," "continue" or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.
About U Power Limited
U Power Limited is a vehicle sourcing services provider, with a vision to becoming an EV market player primarily focused on its proprietary battery-swapping technology, or UOTTA technology, which is an intelligent modular battery-swapping technology designed to provide a comprehensive battery power solution for EVs. Since its operation in 2013, the Company has established a vehicle sourcing network in China's lower-tier cities. The Company has developed two types of battery-swapping stations for compatible EVs and is operating one manufacturing factory in Zibo City, Shandong Province, China. For more information, please visit the Company's website: http://ir.upincar.com/.
Contact
U Power Limited
Investor Relations Department
Email: ir@upincar.com
Robin Yang, Partner
ICR, LLC
Email: UPower.IR@icrinc.com
Phone: +1 (212) 475-0415
U Power Limited
Consolidated Income
Statement
For the For the For the
six six six
months months months
ended ended ended
Jun 30, Jun 30, Jun 30,
2023 2024 2024
(unaudited) (unaudited) (unaudited)
RMB'000 RMB'000 USD'000
Net revenues
Sourcing services 1,435 75 10
Product sales 12,389 1,705
Battery-swapping
service 461 726 100
Total net revenues 1,896 13,190 1,815
Cost of revenues (597) (11,902) (1,638)
Gross profit 1,299 1,288 177
Sales and marketing (1,012) (1,483) (204)
expenses
General and
administrative (16,792) (26,157) (3,599)
expenses
Research and
development (1,941) (575) (79)
expenses
Expected credit losses (2,086) 531 73
Total operating
expenses (21,831) (27,684) (3,809)
Operating loss (20,532) (26,396) (3,632)
Interest income 31 7 1
Interest expenses (497) (877) (121)
Other income 16,145 1,435 197
Other expenses (981) (685) (94)
Loss before income
taxes (5,834) (26,516) (3,649)
Income tax expense (1,344)
Net loss (7,178) (26,516) (3,649)
Less: Net loss
attributable (3,711) (2,991) (412)
to non-controlling
interests
Net loss attributable
to (3,467) (23,525) (3,237)
the Company's
shareholders and total
comprehensive loss
Loss per share
Ordinary shares-basic
and (6.88) (7.42) (1.02)
diluted
Weighted average shares
outstanding used in
calculating basic and
diluted loss per share
Ordinary shares-basic
and 504,167 3,168,544 3,168,544
diluted
U Power Limited
Consolidated Balance Sheet
Jun 30,2024 Jun 30,2024 Dec 31,2023
(unaudited) (unaudited) (audited)
RMB'000 USD'000 RMB'000
Assets
Current assets
Cash and cash equivalents 39,615 5,451 1,927
Restricted cash 900 124 34,312
Accounts receivable 18,553 2,553 15,748
Inventories 5,990 824 5,439
Advance to suppliers 11,251 1,548 10,816
Other current assets 75,966 10,454 94,813
Amount due from related parties 406 56 142
Total current assets 152,681 21,010 163,197
Non-current assets
Property and equipment, net 9,506 1,308 11,764
Intangible assets, net 167 23 201
Operating lease right-of-use assets, net 18,855 2,595 21,656
Long-term investments 143,912 19,803 123,367
Refundable deposit for investment 58,953 8,112 72,774
Deferred tax assets
Other non-current assets 36,865 5,073 36,029
Total non-current assets 268,258 36,914 265,791
Total assets 420,939 57,924 428,988
---
Equities and liabilities
Liabilities
Current liabilities
Short-term bank borrowing 5,000 688 5,000
Current portion of long-term borrowing 9,000 1,238 9,500
Accounts payable 18,134 2,495 10,231
Accrued expenses and other liabilities 29,085 4,003 35,231
Income tax payables 5,200 716 5,201
Advances from customers 1,299 179 2,537
Operating lease liabilities-current 1,811 249 1,750
Amount due to related parties 291 40 5,431
Total current liabilities 69,820 9,608 74,881
Non-current liabilities
Operating lease liabilities-non-current 5,054 695 5,980
Total non-current liabilities 5,054 695 5,980
Total liabilities 74,874 10,303 80,861
3,507
Commitments and contingencies
Equities
Ordinary shares (US$0.0000001 par value,
500,000,000,000 shares
authorized; 1,243,140 and 3,168,544 issued
and outstanding as of December 31, 2023 and
June 30, 2024, respectively)
Additional paid-in capital 507,807 69,877 479,400
Translation reserve 446
Accumulated deficit (196,701) (27,067) (173,176)
Total equities for controlling shareholders 311,106 42,810 306,670
Non-controlling interests 34,959 4,811 37,950
Total equities 346,065 47,621 344,620
Total equities and liabilities 420,939 57,924 428,988
---
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SOURCE U Power Limited
