Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 13, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Entity Registrant Name | Highpower International, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Trading Symbol | HPJ | |
Entity Common Stock, Shares Outstanding | 15,690,533 | |
Entity Central Index Key | 0001368308 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 18,092,242 | $ 24,916,484 |
Restricted cash | 29,154,304 | 44,495,633 |
Accounts receivable, net | 68,999,026 | 77,279,817 |
Amount due from a related party | 146,119 | 477,663 |
Notes receivable | 3,664,108 | 256,712 |
Advances to suppliers | 463,891 | 2,292,843 |
Prepayments and other receivables | 6,419,803 | 10,457,789 |
Inventories | 51,980,426 | 54,790,461 |
Total Current Assets | 178,919,919 | 214,967,402 |
Property, plant and equipment, net | 65,089,990 | 56,523,177 |
Long-term prepayments | 2,373,543 | 2,617,419 |
Land use right, net | 2,406,173 | 2,445,751 |
Other assets | 770,717 | 643,128 |
Deferred tax assets, net | 935,443 | 865,370 |
Long-term investments | 8,387,618 | 9,993,852 |
Right-of-use assets | 10,213,704 | 0 |
TOTAL ASSETS | 269,097,107 | 288,056,099 |
Current Liabilities: | ||
Accounts payable | 64,413,566 | 66,486,690 |
Deferred government grants | 680,915 | 464,206 |
Short-term loans | 24,662,933 | 24,856,744 |
Non-financial institution borrowing | 0 | 8,761,426 |
Notes payable | 60,168,272 | 73,607,284 |
Foreign exchange derivative liabilities | 932,378 | 521,509 |
Amount due to related parties | 101,869 | 6,116,851 |
Other payables and accrued liabilities | 21,818,077 | 25,860,703 |
Income taxes payable | 3,394,112 | 4,124,719 |
Lease liabilities, current | 2,334,110 | 0 |
Total Current Liabilities | 178,506,232 | 210,800,132 |
Long-term payable | 359,033 | |
Lease liabilities, non current | 8,040,487 | 0 |
TOTAL LIABILITIES | 186,905,752 | 210,800,132 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity | ||
Preferred stock (Par value: $0.0001, Authorized: 10,000,000 shares, Issued and outstanding: none) | 0 | 0 |
Common stock (Par value: $0.0001, Authorized: 100,000,000 shares, 15,567,953 shares issued and outstanding at June 30, 2019 and 15,559,658 at December 31, 2018, respectively) | 1,557 | 1,556 |
Additional paid-in capital | 14,257,469 | 13,863,282 |
Statutory and other reserves | 8,012,052 | 8,012,052 |
Retained earnings | 61,169,856 | 56,173,912 |
Accumulated other comprehensive loss | (1,249,579) | (794,835) |
TOTAL EQUITY | 82,191,355 | 77,255,967 |
TOTAL LIABILITIES AND EQUITY | $ 269,097,107 | $ 288,056,099 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value per share | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 15,567,953 | 15,559,658 |
Common Stock, shares outstanding | 15,567,953 | 15,559,658 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||
Net sales | $ 75,807,093 | $ 64,923,960 | $ 133,920,573 | $ 114,707,413 |
Cost of sales | (57,436,018) | (53,614,034) | (102,888,969) | (95,831,160) |
Gross profit | 18,371,075 | 11,309,926 | 31,031,604 | 18,876,253 |
Research and development expenses | (4,380,399) | (3,592,760) | (7,367,108) | (6,154,597) |
Selling and distribution expenses | (3,279,570) | (2,121,650) | (6,072,432) | (4,096,746) |
General and administrative expenses | (5,027,418) | (3,910,188) | (9,850,907) | (8,024,998) |
Foreign currency transaction gain (loss) | 1,213,623 | 1,670,932 | (37,272) | 656,239 |
Total operating expenses | (11,473,764) | (7,953,666) | (23,327,719) | (17,620,102) |
Income from operations | 6,897,311 | 3,356,260 | 7,703,885 | 1,256,151 |
Changes in fair value of foreign exchange derivatives | (996,012) | (1,125,140) | (608,912) | (421,425) |
Government grants | 729,204 | 988,679 | 950,639 | 1,318,499 |
Other income | 15,550 | 56,581 | 82,248 | 80,142 |
Equity in (loss) earnings of investees | (1,177,639) | 160,070 | (1,595,843) | 316,320 |
Interest expenses , net | (38,675) | (312,814) | (509,098) | (554,666) |
Income before taxes | 5,429,739 | 3,123,636 | 6,022,919 | 1,995,021 |
Income taxes expenses | (741,516) | (409,321) | (1,026,975) | (399,642) |
Net income | 4,688,223 | 2,714,315 | 4,995,944 | 1,595,379 |
Comprehensive income | ||||
Net income | 4,688,223 | 2,714,315 | 4,995,944 | 1,595,379 |
Foreign currency translation loss | (2,160,506) | (4,168,216) | (454,744) | (1,331,660) |
Comprehensive income (loss) | $ 2,527,717 | $ (1,453,901) | $ 4,541,200 | $ 263,719 |
Earnings per share of common stock | ||||
- Basic | $ 0.30 | $ 0.17 | $ 0.32 | $ 0.10 |
- Diluted | $ 0.30 | $ 0.17 | $ 0.32 | $ 0.10 |
Weighted average number of common stock outstanding | ||||
- Basic | 15,567,953 | 15,556,361 | 15,567,220 | 15,533,139 |
- Diluted | 15,626,265 | 15,629,413 | 15,615,590 | 15,619,771 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 4,995,944 | $ 1,595,379 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,616,314 | 3,003,872 |
Bad debt expense | 93,576 | (472,799) |
Loss on disposal of property, plant and equipment | 94,147 | 159,458 |
Impairment of plant and equipment | 75,783 | 0 |
Deferred taxes | (73,794) | (498,878) |
Changes in fair value of foreign exchange derivatives | 608,912 | 955,790 |
Equity in loss (earnings) of investees | 1,595,843 | (316,320) |
Share based compensation | 394,188 | 488,117 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,198,062 | (3,877,577) |
Notes receivable | (3,459,522) | 986,591 |
Advances to suppliers | 1,848,529 | (2,154,883) |
Prepayments and other receivables | 4,064,320 | (4,921,059) |
Amount due from a related party | 334,879 | 740,408 |
Amount due to related parties | (138,767) | 0 |
Inventories | 2,668,278 | (27,915,901) |
Accounts payable | (7,588,132) | 21,683,401 |
Deferred government grants | 221,572 | 469,895 |
Other payables and accrued liabilities | (3,379,969) | 3,578,815 |
Income taxes payable | (727,876) | (1,140,753) |
Net cash flows provided by (used in) operating activities | 13,442,287 | (7,636,444) |
Cash flows from investing activities | ||
Acquisitions of plant and equipment | (6,700,225) | (5,681,723) |
Payment for long-term investment | (310,201) | (328,927) |
Net cash flows used in investing activities | (7,010,426) | (6,010,650) |
Cash flows from financing activities | ||
Proceeds from short-term bank loans | 14,771,485 | 15,664,587 |
Repayments of short-term bank loans | (14,882,292) | 0 |
Proceeds from a related party | 2,954,297 | 0 |
Repayment of loan from a related party | (8,589,619) | 0 |
Repayments of non-financial institution borrowing | (8,862,891) | (1,566,318) |
Proceeds from notes payable | 58,314,662 | 53,584,205 |
Repayments of notes payable | (71,701,335) | (55,920,682) |
Payment of derivative instruments | (190,062) | 0 |
Net cash flows (used in) provided by financing activities | (28,185,755) | 11,761,792 |
Effect of foreign currency translation on cash | (411,677) | (1,130,850) |
Net decrease in cash and restricted cash | (22,165,571) | (3,016,152) |
Cash and restricted cash- beginning of year | 69,412,117 | 40,456,117 |
Cash and restricted cash- end of year | 47,246,546 | 37,439,965 |
Cash paid for: | ||
Income taxes | 1,960,545 | 2,039,273 |
Interest expenses | 1,394,561 | 1,002,653 |
Non-cash investing and financing activities: | ||
Shares issued for legal case settlement | 212,500 | |
Purchase of plant and equipment financed by accounts payable | 5,715,931 | 0 |
Reconciliation of cash and restricted cash: | ||
Cash | 18,092,242 | 7,280,576 |
Restricted cash | 29,154,304 | 30,159,389 |
Total cash and restricted cash shown in the condensed consolidated statements of cash flows | $ 69,412,117 | $ 40,456,117 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY - USD ($) | Common stock [Member] | Additional paid-in capital [Member] | Statutory and other reserves [Member] | Retained earnings [Member] | Accumulated other comprehensive income [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,551 | $ 12,709,756 | $ 6,549,815 | $ 44,481,568 | $ 3,469,495 | $ 67,212,185 |
Balance (in shares) at Dec. 31, 2017 | 15,509,658 | |||||
Foreign currency translation adjustments | $ 0 | 0 | 0 | 0 | 2,836,556 | 2,836,556 |
Share-based compensation expenses | 0 | 241,421 | 0 | 0 | 0 | 241,421 |
Net income | 0 | 0 | 0 | (1,118,936) | 0 | (1,118,936) |
Balance at Mar. 31, 2018 | $ 1,551 | 12,951,177 | 6,549,815 | 43,362,632 | 6,306,051 | 69,171,226 |
Balance (in shares) at Mar. 31, 2018 | 15,509,658 | |||||
Balance at Dec. 31, 2017 | $ 1,551 | 12,709,756 | 6,549,815 | 44,481,568 | 3,469,495 | 67,212,185 |
Balance (in shares) at Dec. 31, 2017 | 15,509,658 | |||||
Foreign currency translation adjustments | (1,331,660) | |||||
Net income | 1,595,379 | |||||
Balance at Jun. 30, 2018 | $ 1,556 | 13,410,368 | 6,549,815 | 46,076,947 | 2,137,835 | 68,176,521 |
Balance (in shares) at Jun. 30, 2018 | 15,559,658 | |||||
Balance at Mar. 31, 2018 | $ 1,551 | 12,951,177 | 6,549,815 | 43,362,632 | 6,306,051 | 69,171,226 |
Balance (in shares) at Mar. 31, 2018 | 15,509,658 | |||||
Shares issued for legal case settlement | $ 5 | 212,495 | 0 | 0 | 0 | 212,500 |
Shares issued for legal case settlement (in shares) | 50,000 | |||||
Foreign currency translation adjustments | $ 0 | 0 | 0 | 0 | (4,168,216) | (4,168,216) |
Share-based compensation expenses | 0 | 246,696 | 0 | 0 | 0 | 246,696 |
Net income | 0 | 0 | 0 | 2,714,315 | 0 | 2,714,315 |
Balance at Jun. 30, 2018 | $ 1,556 | 13,410,368 | 6,549,815 | 46,076,947 | 2,137,835 | 68,176,521 |
Balance (in shares) at Jun. 30, 2018 | 15,559,658 | |||||
Balance at Dec. 31, 2018 | $ 1,556 | 13,863,282 | 8,012,052 | 56,173,912 | (794,835) | 77,255,967 |
Balance (in shares) at Dec. 31, 2018 | 15,559,658 | |||||
Exercise of the warrants | $ 1 | (1) | 0 | 0 | 0 | 0 |
Exercise of the warrants (in shares) | 8,295 | |||||
Foreign currency translation adjustments | $ 0 | 0 | 0 | 0 | 1,705,762 | 1,705,762 |
Share-based compensation expenses | 0 | 204,602 | 0 | 0 | 0 | 204,602 |
Net income | 0 | 0 | 0 | 307,721 | 0 | 307,721 |
Balance at Mar. 31, 2019 | $ 1,557 | 14,067,883 | 8,012,052 | 56,481,633 | 910,927 | 79,474,052 |
Balance (in shares) at Mar. 31, 2019 | 15,567,953 | |||||
Balance at Dec. 31, 2018 | $ 1,556 | 13,863,282 | 8,012,052 | 56,173,912 | (794,835) | 77,255,967 |
Balance (in shares) at Dec. 31, 2018 | 15,559,658 | |||||
Foreign currency translation adjustments | (454,744) | |||||
Net income | 4,995,944 | |||||
Balance at Jun. 30, 2019 | $ 1,557 | 14,257,469 | 8,012,052 | 61,169,856 | (1,249,579) | 82,191,355 |
Balance (in shares) at Jun. 30, 2019 | 15,567,953 | |||||
Balance at Mar. 31, 2019 | $ 1,557 | 14,067,883 | 8,012,052 | 56,481,633 | 910,927 | 79,474,052 |
Balance (in shares) at Mar. 31, 2019 | 15,567,953 | |||||
Foreign currency translation adjustments | $ 0 | 0 | 0 | 0 | (2,160,506) | (2,160,506) |
Share-based compensation expenses | 0 | 189,586 | 0 | 0 | 0 | 189,586 |
Net income | 0 | 0 | 0 | 4,688,223 | 0 | 4,688,223 |
Balance at Jun. 30, 2019 | $ 1,557 | $ 14,257,469 | $ 8,012,052 | $ 61,169,856 | $ (1,249,579) | $ 82,191,355 |
Balance (in shares) at Jun. 30, 2019 | 15,567,953 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Organization | |
Organization | 1. Organization The consolidated financial statements include the financial statements of Highpower International, Inc. ("Highpower") and its 100%-owned subsidiary Hong Kong Highpower Technology Company Limited (“HKHTC”), HKHTC’s wholly-owned subsidiary Shenzhen Highpower Technology Company Limited (“SZ Highpower”), SZ Highpower’s and HKHTC’s jointly owned subsidiaries, Springpower Technology (Shenzhen) Company Limited (“SZ Springpower”) and Icon Energy System Company Limited (“ICON”) and SZ Highpower’s and SZ Springpower’s jointly owned subsidiary Huizhou Highpower Technology Company Limited (“HZ HTC”). Highpower and its direct and indirect wholly owned subsidiaries are collectively referred to as the "Company". |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Basis of presentation The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10‑Q and Article 8 of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The interim financial information should be read in conjunction with the Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018, filed with the SEC on March 28, 2019. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s consolidated financial position as of June 30, 2019, its consolidated results of operations for the three and six months ended June 30, 2019, cash flows for the six months ended June 30, 2019 and change in equity for the three and six months ended June 30, 2019, as applicable, have been made. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2019 or any future periods. Concentrations of credit risk One major customer accounted for 12.7% and 12.2% of the total sales for the three and six months ended June 30, 2019, respectively. No customer accounted for over 10% or more of the total sales during the three and six months ended June 30, 2018. One supplier accounted for 12.1% and 12.2% of the total purchase amount during the three and six months ended June 30, 2019, respectively. One supplier accounted for 12.0% and 13.3% of the total purchase amount during the three and six months ended June 30, 2018, respectively. One customer accounted for 16.4% of the accounts receivable as of June 30, 2019. No customer accounted for 10% or more of the accounts receivable as of December 31, 2018. Recently issued accounting standards On February 25, 2017, the FASB issued ASU 2016‑02, Leases (Topic 842). It requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset (“ROU asset”) representing its right to use the underlying asset for the lease term. We adopted this guidance in the first quarter of 2019 using the modified retrospective approach, electing the package of practical expedients, and the practical expedient to not separate lease and non-lease components for data center operating leases. We also elected the optional transition method that permits adoption of the new standard prospectively, as of the effective date, without adjusting comparative periods presented. See Note 7 for disclosure required by ASC 842. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition | |
Revenue Recognition | 3. Revenue Recognition The Company follows the guidance under ASC 606 effective January 1, 2018. The following table disaggregates product sales by business segment and by geography, which provides information as to the major source of revenue. See Note 16 for additional description of the reportable business segments and the products being sold in each segment. Three months ended June 30, 2019 Six months ended June 30, 2019 Ni-MH Batteries and Ni-MH Batteries and Lithium Business Accessories Consolidated Lithium Business Accessories Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ $ $ Primary Geographic Markets China Mainland 26,502,519 3,641,324 30,143,843 49,567,039 8,547,839 58,114,878 Asia, others 33,804,072 1,911,993 35,716,065 50,815,302 7,971,477 58,786,779 Europe 1,501,876 7,487,090 8,988,966 2,905,190 10,704,107 13,609,297 North America 446,867 511,352 958,219 1,697,970 1,577,775 3,275,745 Others — — — — 133,874 133,874 Total sales 62,255,334 13,551,759 75,807,093 104,985,501 28,935,072 133,920,573 The Company has elected to apply the practical expedient in paragraph ASC 606‑10‑50‑14 and does not disclose information about remaining performance obligations (i) contracts that have an original expected length of one year or less; and (ii) contracts where revenue is recognized as invoiced. The Company does not have amounts of contract assets since revenue is recognized as control of goods is transferred. The contract liabilities consist of advance payments from customers. The contract liabilities are reported in a net position on a customer-by-customer basis at the end of each reporting period. All contract liabilities are expected to be recognized as revenue within one year and are included in other payables and accrued liabilities in the condensed consolidated balance sheets. |
Accounts receivable, net
Accounts receivable, net | 6 Months Ended |
Jun. 30, 2019 | |
Accounts receivable, net | |
Accounts receivable, net | 4. Accounts receivable, net June 30, December 31, 2019 2018 (Unaudited) $ $ Accounts receivable 69,152,027 77,340,837 Less: allowance for doubtful accounts 153,001 61,020 68,999,026 77,279,817 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Inventories | 5. Inventories June 30, December 31, 2019 2018 (Unaudited) $ $ Raw materials 20,577,090 25,952,099 Work in progress 10,619,229 10,192,772 Finished goods 20,560,649 18,348,119 Packing materials 33,291 14,394 Consumables 190,167 283,077 51,980,426 54,790,461 |
Property, plant and equipment,
Property, plant and equipment, net | 6 Months Ended |
Jun. 30, 2019 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 6. Property, plant and equipment, net June 30, December 31, 2019 2018 (Unaudited) $ $ Cost Construction in progress 8,615,548 6,991,889 Furniture, fixtures and office equipment 8,011,061 7,221,527 Leasehold improvement 7,707,640 7,090,162 Machinery and equipment 49,048,270 40,316,428 Motor vehicles 1,574,860 1,508,398 Buildings 19,101,682 19,166,951 94,059,061 82,295,355 Less: accumulated depreciation 28,969,071 25,772,178 65,089,990 56,523,177 The construction in process represented buildings and machines under construction or testing as of June 30, 2019 and December 31, 2018. The Company recorded depreciation expenses of $1,858,661 and $1,499,538 for the three months ended June 30, 2019 and 2018, respectively, and $3,559,595 and $2,945,238 for the six months ended June 30, 2019 and 2018, respectively. During the six months ended June 30, 2019, the Company deducted deferred government grants of $nil on the carrying amount of property, plant and equipment. During the year ended December 31, 2018, the Company deducted deferred government grants of $75,584 in calculating the carrying amount of property, plant and equipment. The buildings comprising the Huizhou facilities were pledged as collateral for bank loan. The net carrying amounts of the buildings were $8,392,542 and $8,536,246 as of June 30, 2019 and December 31, 2018, respectively. The building located in Shenzhen, Guangdong was pledged as collateral for bank loans. The net carrying amount of the building was $340,901 and $353,752 as of June 30, 2019 and December 31, 2018, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | 7. Leases The Company has various non-cancelable lease agreements for certain of the warehouses and accommodations with original lease periods expiring between 2019 and 2024. The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Certain of the arrangements have free rent periods or escalating rent payment provisions. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheets. The Company recognizes rental expense on a straight-line basis over the lease term. The following table provides a summary of leases by balance sheet location as of June 30, 2019: Balance Sheet Location June 30, 2019 (Unaudited) $ Assets Operating Right-of-use assets 10,213,704 Total leased assets 10,213,704 Liabilities Operating - current Lease Liabilities, current 2,334,110 Operating - non current Lease liabilities, non current 8,040,487 Total lease liabilities 10,374,597 The components of lease expense for the three and six months ended June 30, 2019 were as follows: Three months ended Six months ended Statement of Income Location June 30, 2019 June 30, 2019 (Unaudited) (Unaudited) $ $ Lease Costs Operating lease expense Cost of sales, Selling and distribution expenses, General and administrative expenses, Research and development expenses 1,521,856 Total net lease costs 1,521,856 Maturity of lease liabilities under the non-cancelable operating leases as of June 30, 2019 were as follows: Operating (Unaudited) $ Remaining 2019 1,281,201 2020 3,189,784 2021 3,361,853 2022 2,596,847 2023 980,182 2024 167,850 Total lease payments 11,577,717 Less: interest 1,203,120 Present value of lease liabilities 10,374,597 Future minimum rental payments under the non-cancelable operating leases as of December 31, 2018 were as follows: Leases (1) $ 2019 2,288,437 2020 1,790,861 2021 1,621,298 2022 668,792 6,369,388 (1) Amounts are based on ASC 840, Leases that was superseded upon our adoption of ASC 842, Leases on January 1, 2019. The following table provides a summary of the lease terms and discount rates as of June 30, 2019: June 30, 2019 Weighted Average Remaining Lease Term Operating leases 3.52 years Weighted Average Discount Rate Operating leases 6.18 % As most of the leases do not provide an implicit rate, the Company use the incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. Supplemental information related to the leases for the three and six months ended June 30, 2019 is as follows: Three months ended Six months ended June 30, 2019 June 30, 2019 (Unaudited) (Unaudited) $ $ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,358,235 |
Long-term investments
Long-term investments | 6 Months Ended |
Jun. 30, 2019 | |
Long-term investments | |
Long-term investments | 8. Long-term investments June 30, 2019 December 31, 2018 (Unaudited) Interest Interest $ % $ % Equity method investments -Ganzhou Highpower Technology Company Limited (“GZ Highpower”) (1) 6,188,223 31.294 % 7,683,900 31.294 % -Shenzhen V-power Innovative Technology Co., Ltd (“V-power”) (2) 491,011 49.000 % 595,730 49.000 % Cost method investment -Huizhou Yipeng Energy Technology Co Ltd. 1,708,384 4.654 % 1,714,222 4.654 % 8,387,618 9,993,852 (1) Investment in GZ Highpower On December 21, 2017, after the completion of the capital increase to GZ Highpower by other shareholders, the Company lost the controlling power over GZ Highpower and deconsolidated GZ Highpower. Thereafter, the investment was recorded under the equity method. The equity in loss of investee was $1,150,032 and $1,491,608 for the three and six months ended June 30, 2019, respectively. The equity in earnings of investee was $179,964 and $336,214 for the three and six months ended June 30, 2018, respectively. (2) Investment in V-power On February 28, 2018, the Company signed an investment agreement with a related company and a group of individuals (the “Founder Team”) with an aggregate amount of RMB4.9 million (approximately $0.7 million) for 49% of the equity interest of V-power, which was recorded under the equity method. In addition, the Company agreed to transfer the 15% of original equity interest of V-power to the Founder Team as compensation under voluntary assignment as any of the following requirements met: 1. annual sales revenue higher or equal to RMB30 million before the first capital increase of V-power; and 2. valuation of V-power higher or equal to RMB30 million before equity issuance. As of June 30, 2019, the requirements have not been met and no such transfer was needed. As of June 30, 2019, the Company has injected RMB4.2 million (approximately $0.6 million) to V-power, and the unpaid amount was recorded as amount due to a related party (See Note 17). The equity in loss of investee was $27,607 and $104,235 for the three and six months ended June 30, 2019, respectively. The equity in loss of investee was $19,894 and $19,894 for the three and six months ended June 30, 2018, respectively. |
Taxation
Taxation | 6 Months Ended |
Jun. 30, 2019 | |
Taxation | |
Taxation | 9. Taxation Highpower and its direct and indirect wholly owned subsidiaries file tax returns separately. 1) VAT Pursuant to the Provisional Regulation of the PRC on VAT and the related implementing rules, all entities and individuals ("taxpayers") that are engaged in the sale of products in the PRC are generally required to pay VAT, at a rate of which was changed from 17% to 16% on May 1, 2018, and changed from 16% to 13% on April 1, 2019 of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayers. Further, when exporting goods, the exporter is entitled to a portion of or all the refund of VAT that it has already paid or incurred. The Company’s PRC subsidiaries are subject to VAT on their revenues. 2) Income tax United States Tax Reform On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into legislation. The 2017 Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 34% to 21%, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. On December 22, 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. The one-time transition tax is based on the total post‑1986 earnings and profits (“E&P”) for which the Company has previously deferred U.S. income taxes. The Company evaluated the Global Intangible Low Taxed Income ("GILTI") inclusion on current earnings and profits of greater than 10% owned foreign controlled corporations. The Company has evaluated whether it has additional provision amount resulted by the GILTI inclusion on current earnings and profits of its foreign controlled corporations. The law also provides that corporate taxpayers may benefit from a 50% reduction in the GILTI inclusion, which effectively reduces the 21% U.S. corporate tax rate on the foreign income to an effective rate of 10.5%. The GILTI inclusion further provides for a foreign tax credit in connection with the foreign taxes paid. In 2019, the Company recorded a GILTI inclusion of $8,210,686. However, the total tax of $898,875 is fully offset by the deemed paid foreign tax credit. The Company completed quantification of the Tax Act impact in 2018. The final adjustment is not material. Hong Kong HKHTC, which was incorporated in Hong Kong, is subject to a corporate income tax rate of 16.5%. In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the “Ordinance”). Under the two-tiered profits tax rate regime, the first $2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity’s assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Company, HKHTC is subject to income tax at a rate of 16.5%. PRC In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. In China, the companies granted with National High-tech Enterprise (“NHTE”) status enjoy 15% income tax rate. This status needs to be renewed every three years. If these subsidiaries fail to renew NHTE status, they will be subject to income tax at a rate of 25% after the expiration of NHTE status. All the PRC subsidiaries received NHTE status and enjoy 15% income tax rate for calendar year 2019 and 2018. The components of the income taxes expenses are: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Current 712,944 551,583 1,100,769 898,520 Deferred 28,572 (142,262) (73,794) (498,878) Total income taxes expenses 741,516 409,321 1,026,975 399,642 The reconciliation of income taxes expenses computed at the PRC statutory tax rate to income tax expense is as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Income before tax 5,429,739 3,123,636 6,022,919 1,995,021 Provision for income taxes at PRC statutory income tax rate (25%) 1,357,435 780,909 1,505,730 498,755 Impact of different tax rates in other jurisdictions 88,722 37,886 207,343 96,546 Effect of PRC preferential tax rate (494,344) (272,880) (684,651) (266,427) R&D expenses eligible for super deduction (541,876) (334,892) (680,270) (334,892) Other non-deductible expenses 87,610 32,175 187,972 48,751 Change in valuation allowance of deferred tax assets 243,969 166,123 490,851 356,909 Effective enterprise income tax expenses 741,516 409,321 1,026,975 399,642 3) Deferred tax assets, net Deferred tax assets and deferred tax liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose and the tax bases used for income tax purpose. The following represents the tax effect of each major type of temporary difference. June 30, December 31, 2019 2018 (Unaudited) $ $ Deferred tax assets Tax loss carry-forward 1,604,854 1,096,956 Allowance for doubtful receivables 22,950 9,153 Impairment for inventory 409,863 382,375 Difference for sales cut-off 33,519 15,526 Deferred government grants 102,137 69,631 Property, plant and equipment subsidized by government grant 233,274 250,563 Impairment for property, plant and equipment 122,431 138,122 Total gross deferred tax assets 2,529,028 1,962,326 Valuation allowance (1,403,764) (1,096,956) Total deferred tax assets, net of valuation allowance 1,125,264 865,370 Deferred tax liability PPE, due to difference in depreciation (189,821) — Total deferred tax liability (189,821) — Total net deferred tax assets 935,443 865,370 As of June 30, 2019, the Company had net operating loss carry-forwards in Hong Kong of $8,507,665 without expiration and in the PRC of $1,340,597, which will start to expire in 2023. The Company has deferred tax assets which consisted of tax loss carry-forwards and other items that can be carried forward to offset future taxable income. Management determined it is more likely than not that part of the deferred tax assets could not be utilized, so a valuation allowance was provided for as of June 30, 2019 and December 31, 2018. The net valuation allowance increased by $0.3 million and $0.4 million during the six months ended June 30, 2019 and 2018, respectively. |
Notes payable
Notes payable | 6 Months Ended |
Jun. 30, 2019 | |
Notes payable | |
Notes payable | 10. Notes payable Notes payable presented to certain suppliers as a payment against the outstanding trade payables. Notes payable are mainly bank acceptance bills which are non-interest bearing and generally mature within one year. The outstanding bank acceptance bills are secured by restricted cash deposited in banks. Outstanding bank acceptance bills were $60,168,272 and $73,607,284 as of June 30, 2019 and December 31, 2018, respectively. |
Short-term loans
Short-term loans | 6 Months Ended |
Jun. 30, 2019 | |
Short-term loans | |
Short-term loans | 11. Short-term loans As of June 30, 2019, the bank borrowings were for working capital and capital expenditure purposes with maturity of one year and were secured by personal guarantees executed by the Company’s Chief Executive Officer, Mr. Dang Yu Pan, the land use right with a net carrying amount of $2,406,173 and the buildings with a net carrying amount of $8,733,443, respectively. The loans were primarily obtained from three banks with interest rates ranging from 5.2200% to 6.5253% per annum and 5.2300% to 6.5253% per annum as of June 30, 2019 and December 31, 2018, respectively. The interest expenses were $344,983 and $653,565 for the three and six months ended June 30, 2019, respectively. The interest expenses were $118,886 and $230,599 for the three and six months ended June 30, 2018, respectively. |
Non-financial institution borro
Non-financial institution borrowing | 6 Months Ended |
Jun. 30, 2019 | |
Non-financial institution borrowings | |
Non-financial institution borrowing | 12. Non-financial institution borrowing For the six months ended June 30, 2019, the Company paid back $8,862,891 to the third party non-financial institution. The interest expense of the above borrowing was $nil and $4,877 for the three and six months ended June 30, 2019. The interest expense of the above borrowing was $134,660 and $296,963 for the three and six months ended June 30, 2018. |
Lines of credit
Lines of credit | 6 Months Ended |
Jun. 30, 2019 | |
Lines of credit | |
Lines of credit | 13. Lines of credit The Company entered into various credit contracts and revolving lines of credit, which were used for short-term loans and bank acceptance bills. As of June 30, 2019, the total and unused lines of credit were $107.2 million and $27.6 million, respectively, with maturity dates from August 2019 to October 2021. As of December 31, 2018, the total and unused lines of credit were $102.6 million and $23.8 million, respectively, with maturity dates from March 2019 to October 2021. These lines of credit were guaranteed by the Company’s Chief Executive Officer, Mr. Dang Yu Pan and his wife. The Company’s buildings and the land use right were pledged as collateral for these lines of credit. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings per share | |
Earnings per share | 14. Earnings per share The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2019 and 2018. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Numerator: Net income 4,688,223 2,714,315 4,995,944 1,595,379 Denominator: Weighted-average shares outstanding - Basic 15,567,953 15,556,361 15,567,220 15,533,139 - Dilutive effects of equity incentive awards 58,312 73,052 48,370 86,632 - Diluted 15,626,265 15,629,413 15,615,590 15,619,771 Net income per share: - Basic 0.30 0.17 0.32 0.10 - Diluted 0.30 0.17 0.32 0.10 Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. |
Defined contribution plan
Defined contribution plan | 6 Months Ended |
Jun. 30, 2019 | |
Defined contribution plan | |
Defined contribution plan | 15. Defined contribution plan Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits (“the Benefits”) are provided to employees. Chinese labor regulations require that the PRC operating subsidiaries of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries. Except for contributions made related to the Benefits, the Company has no legal obligation. The total contributions made, which were expensed as incurred, were $996,410 and $1,979,784 for the three and six months ended June 30, 2019. The total contributions made, which were expensed as incurred, were $729,595 and $1,383,552 for the three and six months ended June 30, 2018. |
Segment information
Segment information | 6 Months Ended |
Jun. 30, 2019 | |
Segment information | |
Segment information | 16. Segment information The reportable segments are components of the Company that offer different products and are separately managed, with separate financial information available that is separately evaluated regularly by the Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, in determining the performance of the business. The Company categorizes its business into two reportable segments, namely (i) Lithium Business and (ii) Ni-MH Batteries and Accessories. The CODM evaluates performance based on each reporting segment’s net sales, cost of sales, gross profit and total assets. Net sales, cost of sales, gross profit and total assets by segments is set out as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Net sales Lithium Business 62,255,334 48,503,856 104,985,501 85,100,511 Ni-MH Batteries and Accessories 13,551,759 16,420,104 28,935,072 29,606,902 Total 75,807,093 64,923,960 133,920,573 114,707,413 Cost of Sales Lithium Business 47,382,082 39,755,643 81,010,550 70,546,982 Ni-MH Batteries and Accessories 10,053,936 13,858,391 21,878,419 25,284,178 Total 57,436,018 53,614,034 102,888,969 95,831,160 Gross Profit Lithium Business 14,873,252 8,748,213 23,974,951 14,553,529 Ni-MH Batteries and Accessories 3,497,823 2,561,713 7,056,653 4,322,724 Total 18,371,075 11,309,926 31,031,604 18,876,253 June 30, December 31, 2019 2018 (Unaudited) $ $ Total Assets Lithium Business 215,321,303 231,795,621 Ni-MH Batteries and Accessories 53,775,804 56,260,478 Total 269,097,107 288,056,099 All long-lived assets of the Company are located in the PRC. Geographic information about the sales and accounts receivable based on the locations of the Company’s customers is set out as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Net sales China Mainland 30,143,843 32,880,005 58,114,878 61,185,768 Asia, others 35,716,065 25,183,900 58,786,779 40,938,296 Europe 8,988,966 4,849,360 13,609,297 9,387,263 North America 958,219 1,998,243 3,275,745 3,163,074 Others — 12,452 133,874 33,012 75,807,093 64,923,960 133,920,573 114,707,413 June 30, December 31, 2019 2018 (Unaudited) $ $ Accounts receivable China Mainland 33,494,645 38,048,651 Asia, others 28,138,970 33,237,051 Europe 6,596,124 5,413,343 North America 769,287 566,769 Others — 14,003 68,999,026 77,279,817 |
Related party balance and trans
Related party balance and transaction | 6 Months Ended |
Jun. 30, 2019 | |
Related party transaction | |
Related party transaction | 17. Related party balance and transaction Related party balance June 30, December 31, 2019 2018 (Unaudited) $ $ Accounts receivable 86,343 476,093 Other receivable 59,776 1,570 Amount due from a related party- GZ Highpower 146,119 477,663 Other payable-investment (1) 101,869 408,867 Loan from Mr. Dang Yu Pan (2) — 5,707,984 Amount due to related parties 101,869 6,116,851 (1) The Company signed an investment agreement with an aggregate amount of RMB4.9 million (approximately $0.7 million) in investing for 49% of the equity interest of V-power which was set up on March 1, 2018. On April 28, 2018, the Company injected RMB2.1 million (approximately $0.3 million) to V-power. On January 14, 2019, the Company injected RMB2.1 million (approximately $0.3 million) to V-power and the unpaid amount was recorded as amount due to a related party. (See Note 8) (2) The Company entered into a loan agreement with a maximum amount of RMB60 million (approximately $8.7 million) with Mr. Dang Yu Pan on July 20, 2018. As of June 30, 2019, the Company repaid the loans. The interest rate is 5.65% per annum. The Company accrued interest expense $20,135 and $133,930 for the three and six months ended June 30, 2019, respectively. Related party transaction Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ GZ Highpower Sales 239,573 433,147 440,306 658,934 V-Power Payment of investment — — 310,201 — Dang Yu Pan Loan from Dang Yu Pan — — 2,954,297 — Repayment of Loan from Dang Yu Pan 8,589,619 — 8,589,619 — Interest expense 20,135 — 133,930 — |
Subsequent event
Subsequent event | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent event | |
Subsequent event | 18. Subsequent event The Company has evaluated subsequent events through the issuance of the unaudited condensed consolidated financial statements and no other subsequent event is identified that would have required adjustment or disclosure in the consolidated financial statements. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10‑Q and Article 8 of Regulation S-X. They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The interim financial information should be read in conjunction with the Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018, filed with the SEC on March 28, 2019. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s consolidated financial position as of June 30, 2019, its consolidated results of operations for the three and six months ended June 30, 2019, cash flows for the six months ended June 30, 2019 and change in equity for the three and six months ended June 30, 2019, as applicable, have been made. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2019 or any future periods. |
Concentrations of credit risk | Concentrations of credit risk One major customer accounted for 12.7% and 12.2% of the total sales for the three and six months ended June 30, 2019, respectively. No customer accounted for over 10% or more of the total sales during the three and six months ended June 30, 2018. One supplier accounted for 12.1% and 12.2% of the total purchase amount during the three and six months ended June 30, 2019, respectively. One supplier accounted for 12.0% and 13.3% of the total purchase amount during the three and six months ended June 30, 2018, respectively. One customer accounted for 16.4% of the accounts receivable as of June 30, 2019. No customer accounted for 10% or more of the accounts receivable as of December 31, 2018. |
Recently issued accounting standards | Recently issued accounting standards On February 25, 2017, the FASB issued ASU 2016‑02, Leases (Topic 842). It requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset (“ROU asset”) representing its right to use the underlying asset for the lease term. We adopted this guidance in the first quarter of 2019 using the modified retrospective approach, electing the package of practical expedients, and the practical expedient to not separate lease and non-lease components for data center operating leases. We also elected the optional transition method that permits adoption of the new standard prospectively, as of the effective date, without adjusting comparative periods presented. See Note 7 for disclosure required by ASC 842. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition | |
Schedule of Reportable Business Segments | The following table disaggregates product sales by business segment and by geography, which provides information as to the major source of revenue. See Note 16 for additional description of the reportable business segments and the products being sold in each segment. Three months ended June 30, 2019 Six months ended June 30, 2019 Ni-MH Batteries and Ni-MH Batteries and Lithium Business Accessories Consolidated Lithium Business Accessories Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ $ $ Primary Geographic Markets China Mainland 26,502,519 3,641,324 30,143,843 49,567,039 8,547,839 58,114,878 Asia, others 33,804,072 1,911,993 35,716,065 50,815,302 7,971,477 58,786,779 Europe 1,501,876 7,487,090 8,988,966 2,905,190 10,704,107 13,609,297 North America 446,867 511,352 958,219 1,697,970 1,577,775 3,275,745 Others — — — — 133,874 133,874 Total sales 62,255,334 13,551,759 75,807,093 104,985,501 28,935,072 133,920,573 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounts receivable, net | |
Schedule of Accounts Receivable | June 30, December 31, 2019 2018 (Unaudited) $ $ Accounts receivable 69,152,027 77,340,837 Less: allowance for doubtful accounts 153,001 61,020 68,999,026 77,279,817 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Schedule of Inventory | June 30, December 31, 2019 2018 (Unaudited) $ $ Raw materials 20,577,090 25,952,099 Work in progress 10,619,229 10,192,772 Finished goods 20,560,649 18,348,119 Packing materials 33,291 14,394 Consumables 190,167 283,077 51,980,426 54,790,461 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, plant and equipment, net | |
Schedule of Property Plant and Equipment | June 30, December 31, 2019 2018 (Unaudited) $ $ Cost Construction in progress 8,615,548 6,991,889 Furniture, fixtures and office equipment 8,011,061 7,221,527 Leasehold improvement 7,707,640 7,090,162 Machinery and equipment 49,048,270 40,316,428 Motor vehicles 1,574,860 1,508,398 Buildings 19,101,682 19,166,951 94,059,061 82,295,355 Less: accumulated depreciation 28,969,071 25,772,178 65,089,990 56,523,177 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Summary of Leases by Balance Sheet Location | The following table provides a summary of leases by balance sheet location as of June 30, 2019: Balance Sheet Location June 30, 2019 (Unaudited) $ Assets Operating Right-of-use assets 10,213,704 Total leased assets 10,213,704 Liabilities Operating - current Lease Liabilities, current 2,334,110 Operating - non current Lease liabilities, non current 8,040,487 Total lease liabilities 10,374,597 |
Schedule of Components of Lease Expense | The components of lease expense for the three and six months ended June 30, 2019 were as follows: Three months ended Six months ended Statement of Income Location June 30, 2019 June 30, 2019 (Unaudited) (Unaudited) $ $ Lease Costs Operating lease expense Cost of sales, Selling and distribution expenses, General and administrative expenses, Research and development expenses 1,521,856 Total net lease costs 1,521,856 |
Schedule of Maturity of Lease Liabilities | Maturity of lease liabilities under the non-cancelable operating leases as of June 30, 2019 were as follows: Operating (Unaudited) $ Remaining 2019 1,281,201 2020 3,189,784 2021 3,361,853 2022 2,596,847 2023 980,182 2024 167,850 Total lease payments 11,577,717 Less: interest 1,203,120 Present value of lease liabilities 10,374,597 |
Schedule of Future Minimum Rental Payments under Non-cancelable Operating Leases | Future minimum rental payments under the non-cancelable operating leases as of December 31, 2018 were as follows: Leases (1) $ 2019 2,288,437 2020 1,790,861 2021 1,621,298 2022 668,792 6,369,388 |
Schedule of Lease Terms and Discount Rates | The following table provides a summary of the lease terms and discount rates as of June 30, 2019: June 30, 2019 Weighted Average Remaining Lease Term Operating leases 3.52 years Weighted Average Discount Rate Operating leases 6.18 % |
Schedule of Supplemental Information Related to Leases | Supplemental information related to the leases for the three and six months ended June 30, 2019 is as follows: Three months ended Six months ended June 30, 2019 June 30, 2019 (Unaudited) (Unaudited) $ $ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,358,235 |
Long-term investments (Tables)
Long-term investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long-term investments | |
Schedule Of Long Term Investment | June 30, 2019 December 31, 2018 (Unaudited) Interest Interest $ % $ % Equity method investments -Ganzhou Highpower Technology Company Limited (“GZ Highpower”) (1) 6,188,223 31.294 % 7,683,900 31.294 % -Shenzhen V-power Innovative Technology Co., Ltd (“V-power”) (2) 491,011 49.000 % 595,730 49.000 % Cost method investment -Huizhou Yipeng Energy Technology Co Ltd. 1,708,384 4.654 % 1,714,222 4.654 % 8,387,618 9,993,852 (1) Investment in GZ Highpower On December 21, 2017, after the completion of the capital increase to GZ Highpower by other shareholders, the Company lost the controlling power over GZ Highpower and deconsolidated GZ Highpower. Thereafter, the investment was recorded under the equity method. The equity in loss of investee was $1,150,032 and $1,491,608 for the three and six months ended June 30, 2019, respectively. The equity in earnings of investee was $179,964 and $336,214 for the three and six months ended June 30, 2018, respectively. (2) Investment in V-power On February 28, 2018, the Company signed an investment agreement with a related company and a group of individuals (the “Founder Team”) with an aggregate amount of RMB4.9 million (approximately $0.7 million) for 49% of the equity interest of V-power, which was recorded under the equity method. In addition, the Company agreed to transfer the 15% of original equity interest of V-power to the Founder Team as compensation under voluntary assignment as any of the following requirements met: 1. annual sales revenue higher or equal to RMB30 million before the first capital increase of V-power; and 2. valuation of V-power higher or equal to RMB30 million before equity issuance. As of June 30, 2019, the requirements have not been met and no such transfer was needed. As of June 30, 2019, the Company has injected RMB4.2 million (approximately $0.6 million) to V-power, and the unpaid amount was recorded as amount due to a related party (See Note 17). |
Taxation (Tables)
Taxation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Taxation | |
Schedule of Components of Income Taxes Expenses | The components of the income taxes expenses are: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Current 712,944 551,583 1,100,769 898,520 Deferred 28,572 (142,262) (73,794) (498,878) Total income taxes expenses 741,516 409,321 1,026,975 399,642 |
Schedule of Reconciliation of Income Taxes Expenses Computed at PRC Statutory Tax Rate to Income Tax Expense | The reconciliation of income taxes expenses computed at the PRC statutory tax rate to income tax expense is as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Income before tax 5,429,739 3,123,636 6,022,919 1,995,021 Provision for income taxes at PRC statutory income tax rate (25%) 1,357,435 780,909 1,505,730 498,755 Impact of different tax rates in other jurisdictions 88,722 37,886 207,343 96,546 Effect of PRC preferential tax rate (494,344) (272,880) (684,651) (266,427) R&D expenses eligible for super deduction (541,876) (334,892) (680,270) (334,892) Other non-deductible expenses 87,610 32,175 187,972 48,751 Change in valuation allowance of deferred tax assets 243,969 166,123 490,851 356,909 Effective enterprise income tax expenses 741,516 409,321 1,026,975 399,642 |
Schedule of Tax Effect of Major Type of Temporary Difference | The following represents the tax effect of each major type of temporary difference. June 30, December 31, 2019 2018 (Unaudited) $ $ Deferred tax assets Tax loss carry-forward 1,604,854 1,096,956 Allowance for doubtful receivables 22,950 9,153 Impairment for inventory 409,863 382,375 Difference for sales cut-off 33,519 15,526 Deferred government grants 102,137 69,631 Property, plant and equipment subsidized by government grant 233,274 250,563 Impairment for property, plant and equipment 122,431 138,122 Total gross deferred tax assets 2,529,028 1,962,326 Valuation allowance (1,403,764) (1,096,956) Total deferred tax assets, net of valuation allowance 1,125,264 865,370 Deferred tax liability PPE, due to difference in depreciation (189,821) — Total deferred tax liability (189,821) — Total net deferred tax assets 935,443 865,370 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings per share | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2019 and 2018. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Numerator: Net income 4,688,223 2,714,315 4,995,944 1,595,379 Denominator: Weighted-average shares outstanding - Basic 15,567,953 15,556,361 15,567,220 15,533,139 - Dilutive effects of equity incentive awards 58,312 73,052 48,370 86,632 - Diluted 15,626,265 15,629,413 15,615,590 15,619,771 Net income per share: - Basic 0.30 0.17 0.32 0.10 - Diluted 0.30 0.17 0.32 0.10 |
Segment information (Tables)
Segment information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment information | |
Schedule of Segment Reporting Information,by segment | The CODM evaluates performance based on each reporting segment’s net sales, cost of sales, gross profit and total assets. Net sales, cost of sales, gross profit and total assets by segments is set out as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Net sales Lithium Business 62,255,334 48,503,856 104,985,501 85,100,511 Ni-MH Batteries and Accessories 13,551,759 16,420,104 28,935,072 29,606,902 Total 75,807,093 64,923,960 133,920,573 114,707,413 Cost of Sales Lithium Business 47,382,082 39,755,643 81,010,550 70,546,982 Ni-MH Batteries and Accessories 10,053,936 13,858,391 21,878,419 25,284,178 Total 57,436,018 53,614,034 102,888,969 95,831,160 Gross Profit Lithium Business 14,873,252 8,748,213 23,974,951 14,553,529 Ni-MH Batteries and Accessories 3,497,823 2,561,713 7,056,653 4,322,724 Total 18,371,075 11,309,926 31,031,604 18,876,253 June 30, December 31, 2019 2018 (Unaudited) $ $ Total Assets Lithium Business 215,321,303 231,795,621 Ni-MH Batteries and Accessories 53,775,804 56,260,478 Total 269,097,107 288,056,099 |
Schedule of Revenue from External Customers by Geographic Areas | All long-lived assets of the Company are located in the PRC. Geographic information about the sales and accounts receivable based on the locations of the Company’s customers is set out as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Net sales China Mainland 30,143,843 32,880,005 58,114,878 61,185,768 Asia, others 35,716,065 25,183,900 58,786,779 40,938,296 Europe 8,988,966 4,849,360 13,609,297 9,387,263 North America 958,219 1,998,243 3,275,745 3,163,074 Others — 12,452 133,874 33,012 75,807,093 64,923,960 133,920,573 114,707,413 June 30, December 31, 2019 2018 (Unaudited) $ $ Accounts receivable China Mainland 33,494,645 38,048,651 Asia, others 28,138,970 33,237,051 Europe 6,596,124 5,413,343 North America 769,287 566,769 Others — 14,003 68,999,026 77,279,817 |
Related party balance and tra_2
Related party balance and transaction (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related party transaction | |
Schedule Of Related Party Balance | Related party balance June 30, December 31, 2019 2018 (Unaudited) $ $ Accounts receivable 86,343 476,093 Other receivable 59,776 1,570 Amount due from a related party- GZ Highpower 146,119 477,663 Other payable-investment (1) 101,869 408,867 Loan from Mr. Dang Yu Pan (2) — 5,707,984 Amount due to related parties 101,869 6,116,851 (1) The Company signed an investment agreement with an aggregate amount of RMB4.9 million (approximately $0.7 million) in investing for 49% of the equity interest of V-power which was set up on March 1, 2018. On April 28, 2018, the Company injected RMB2.1 million (approximately $0.3 million) to V-power. On January 14, 2019, the Company injected RMB2.1 million (approximately $0.3 million) to V-power and the unpaid amount was recorded as amount due to a related party. (See Note 8) (2) The Company entered into a loan agreement with a maximum amount of RMB60 million (approximately $8.7 million) with Mr. Dang Yu Pan on July 20, 2018. As of June 30, 2019, the Company repaid the loans. The interest rate is 5.65% per annum. The Company accrued interest expense $20,135 and $133,930 for the three and six months ended June 30, 2019, respectively. |
Schedule of Related Party Transactions | Related party transaction Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ GZ Highpower Sales 239,573 433,147 440,306 658,934 V-Power Payment of investment — — 310,201 — Dang Yu Pan Loan from Dang Yu Pan — — 2,954,297 — Repayment of Loan from Dang Yu Pan 8,589,619 — 8,589,619 — Interest expense 20,135 — 133,930 — |
Summary of significant accoun_3
Summary of significant accounting policies - Additional Information (Details) - customer | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Customer Concentration Risk [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 12.70% | 10.00% | 12.20% | 10.00% |
Number of Customer Accounted More Than Ten Percentege | 0 | 0 | ||
Number of Customers Accounted For 12.7% and 12.2% | 1 | 1 | ||
Supplier Concentration Risk [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 12.10% | 12.00% | 12.20% | 13.30% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 16.40% |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | $ 75,807,093 | $ 64,923,960 | $ 133,920,573 | $ 114,707,413 |
Lithium Business [Member] | ||||
Revenues | 62,255,334 | 48,503,856 | 104,985,501 | 85,100,511 |
Ni-MH Batteries and Accessories [Member] | ||||
Revenues | 13,551,759 | 16,420,104 | 28,935,072 | 29,606,902 |
China Mainland [Member] | ||||
Revenues | 30,143,843 | 32,880,005 | 58,114,878 | 61,185,768 |
China Mainland [Member] | Lithium Business [Member] | ||||
Revenues | 26,502,519 | 49,567,039 | ||
China Mainland [Member] | Ni-MH Batteries and Accessories [Member] | ||||
Revenues | 3,641,324 | 8,547,839 | ||
Asia, others [Member] | ||||
Revenues | 35,716,065 | 25,183,900 | 58,786,779 | 40,938,296 |
Asia, others [Member] | Lithium Business [Member] | ||||
Revenues | 33,804,072 | 50,815,302 | ||
Asia, others [Member] | Ni-MH Batteries and Accessories [Member] | ||||
Revenues | 1,911,993 | 7,971,477 | ||
Europe [Member] | ||||
Revenues | 8,988,966 | 4,849,360 | 13,609,297 | 9,387,263 |
Europe [Member] | Lithium Business [Member] | ||||
Revenues | 1,501,876 | 2,905,190 | ||
Europe [Member] | Ni-MH Batteries and Accessories [Member] | ||||
Revenues | 7,487,090 | 10,704,107 | ||
North America [Member] | ||||
Revenues | 958,219 | 1,998,243 | 3,275,745 | 3,163,074 |
North America [Member] | Lithium Business [Member] | ||||
Revenues | 446,867 | 1,697,970 | ||
North America [Member] | Ni-MH Batteries and Accessories [Member] | ||||
Revenues | 511,352 | 1,577,775 | ||
Others [Member] | ||||
Revenues | 0 | $ 12,452 | 133,874 | $ 33,012 |
Others [Member] | Lithium Business [Member] | ||||
Revenues | 0 | 0 | ||
Others [Member] | Ni-MH Batteries and Accessories [Member] | ||||
Revenues | $ 0 | $ 133,874 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, net | ||
Accounts receivable | $ 69,152,027 | $ 77,340,837 |
Less: allowance for doubtful accounts | 153,001 | 61,020 |
Accounts receivable, net | $ 68,999,026 | $ 77,279,817 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 20,577,090 | $ 25,952,099 |
Work in progress | 10,619,229 | 10,192,772 |
Finished goods | 20,560,649 | 18,348,119 |
Packing materials | 33,291 | 14,394 |
Consumables | 190,167 | 283,077 |
Inventories | $ 51,980,426 | $ 54,790,461 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Cost | ||
Construction in progress | $ 8,615,548 | $ 6,991,889 |
Furniture, fixtures and office equipment | 8,011,061 | 7,221,527 |
Leasehold improvement | 7,707,640 | 7,090,162 |
Machinery and equipment | 49,048,270 | 40,316,428 |
Motor vehicles | 1,574,860 | 1,508,398 |
Buildings | 19,101,682 | 19,166,951 |
Property, plant and equipment, cost | 94,059,061 | 82,295,355 |
Less: accumulated depreciation | 28,969,071 | 25,772,178 |
Property, plant and equipment, net | $ 65,089,990 | $ 56,523,177 |
Property, plant and equipment_4
Property, plant and equipment, net (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 1,858,661 | $ 1,499,538 | $ 3,559,595,000 | $ 2,945,238,000 | |
Property Plant And Equipment Deductions For Government Grants | 0 | $ 75,584 | |||
Pledged Assets Not Separately Reported Property Plant And Equipment | 8,733,443 | 8,733,443 | |||
Huizhou Facilities [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Pledged Assets Not Separately Reported Property Plant And Equipment | 8,392,542 | 8,392,542 | 8,536,246 | ||
Shenzhen Building [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Pledged Assets Not Separately Reported Property Plant And Equipment | $ 340,901 | $ 340,901 | $ 353,752 |
Leases - Summary of Leases (Det
Leases - Summary of Leases (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Operating | $ 10,213,704 | $ 0 |
Total leased assets | 10,213,704 | |
Liabilities | ||
Operating - current | 2,334,110 | 0 |
Operating - non current | 8,040,487 | $ 0 |
Total lease liabilities | 10,374,597 | |
Right-of-use assets [Member] | ||
Assets | ||
Operating | 10,213,704 | |
Lease liabilities, current [Member] | ||
Liabilities | ||
Operating - current | 2,334,110 | |
Lease liabilities, non current [Member] | ||
Liabilities | ||
Operating - non current | $ 8,040,487 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lease Costs | ||
Total net lease costs | $ 764,149 | $ 1,521,856 |
Cost of sales Selling and distribution expenses General and administrative expenses Research and development expenses [Member] | ||
Lease Costs | ||
Operating lease expense | $ 764,149 | $ 1,521,856 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) | Jun. 30, 2019USD ($) |
Leases | |
Remaining 2019 | $ 1,281,201 |
2020 | 3,189,784 |
2021 | 3,361,853 |
2022 | 2,596,847 |
2023 | 980,182 |
2024 | 167,850 |
Total lease payments | 11,577,717 |
Less: interest | 1,203,120 |
Present value of lease liabilities | $ 10,374,597 |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Payments under Non-cancelable Operating Leases (Details) | Dec. 31, 2018USD ($) |
Leases | |
2019 | $ 2,288,437 |
2020 | 1,790,861 |
2021 | 1,621,298 |
2022 | 668,792 |
Future minimum rental payments | $ 6,369,388 |
Leases - Lease terms and Discou
Leases - Lease terms and Discounts Rates (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Weighted Average Remaining Lease Term | |
Operating leases | 3 years 6 months 7 days |
Weighted Average Discount Rate | |
Operating leases | 6.18% |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 732,090 | $ 1,358,235 |
Long-term investments (Details)
Long-term investments (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | |
Long-term Investments | $ 8,387,618 | $ 9,993,852 | |
Ganzhou Highpower Technology Company Limited [Member] | |||
Equity Method Investments | [1] | $ 6,188,223 | $ 7,683,900 |
Equity Method Investment, Ownership Percentage | [1] | 31.294% | 31.294% |
Shenzhen V-power Innovative Technology Co., Ltd ("V-power") [Member] | |||
Equity Method Investments | [2] | $ 491,011 | $ 595,730 |
Equity Method Investment, Ownership Percentage | [2] | 49.00% | 49.00% |
Huizhou Yipeng Energy Technology Co Ltd [Member] | |||
Cost Method Investments | $ 1,708,384 | $ 1,714,222 | |
Cost Method Investments Ownership Percentage | 4.654% | 4.654% | |
[1] | Investment in GZ HighpowerOn December 21, 2017, after the completion of the capital increase to GZ Highpower by other shareholders, the Company lost the controlling power over GZ Highpower and deconsolidated GZ Highpower. Thereafter, the investment was recorded under the equity method. | ||
[2] | (2) Investment in V-powerOn February 28, 2018, the Company signed an investment agreement with a related company and a group of individuals (the “Founder Team”) with an aggregate amount of RMB4.9 million (approximately $0.7 million) for 49% of the equity interest of V-power, which was recorded under the equity method. In addition, the Company agreed to transfer the 15% of original equity interest of V-power to the Founder Team as compensation under voluntary assignment as any of the following requirements met: 1. annual sales revenue higher or equal to RMB30 million before the first capital increase of V-power; and 2. valuation of V-power higher or equal to RMB30 million before equity issuance. As of June 30, 2019, the requirements have not been met and no such transfer was needed. As of June 30, 2019, the Company has injected RMB4.2 million (approximately $0.6 million) to V-power, and the unpaid amount was recorded as amount due to a related party (See Note 17). |
Long-term investments - Additio
Long-term investments - Additional information (Details) ¥ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Feb. 28, 2018CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jan. 14, 2019CNY (¥) | Jan. 14, 2019USD ($) | Apr. 28, 2018CNY (¥) | Apr. 28, 2018USD ($) | Feb. 28, 2018USD ($) | |
Income (Loss) from Equity Method Investments | $ (1,177,639) | $ 160,070 | $ (1,595,843) | $ 316,320 | ||||||||
Equity Method Investment, Additional Information | In addition, the Company agreed to transfer the 15% of original equity interest of V-power to the Founder Team as compensation under voluntary assignment as any of the following requirements met: 1. annual sales revenue higher or equal to RMB30 million before the first capital increase of V-power; and 2. valuation of V-power higher or equal to RMB30 million before equity issuance. | |||||||||||
Shenzhen V-Power Innovative Technology Co Ltd [Member] | ||||||||||||
Equity Method Investments | ¥ 4.9 | $ 700,000 | ||||||||||
Equity Method Investment, Ownership Percentage | 49.00% | 49.00% | ||||||||||
Equity Method Investment Ownership Percentage transfer | 15.00% | 15.00% | ||||||||||
V-Power [Member] | ||||||||||||
Annual sales revenue before the first capital increase,maximum | ¥ | ¥ 30 | |||||||||||
Annual sales revenuebefore equity issuance,maximum. | ¥ | 30 | |||||||||||
Income (Loss) from Equity Method Investments | (27,607) | 19,894 | 104,235 | 19,894 | ||||||||
Related Party Transaction, Due from (to) Related Party | ¥ 4.2 | $ 600,000 | ¥ 2.1 | $ 300,000 | ¥ 2.1 | $ 300,000 | ||||||
GZ Highpower [Member] | ||||||||||||
Income (Loss) from Equity Method Investments | $ (1,150,032) | $ 179,964 | $ 1,491,608 | $ 336,214 |
Taxation - Components of Income
Taxation - Components of Income Taxes Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Taxation | ||||
Current | $ 712,944 | $ 551,583 | $ 1,100,769 | $ 898,520 |
Deferred | 28,572 | (142,262) | (73,794) | (498,878) |
Total income taxes expenses | $ 741,516 | $ 409,321 | $ 1,026,975 | $ 399,642 |
Taxation - Reconciliation (Deta
Taxation - Reconciliation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Taxation | ||||
Income before tax | $ 5,429,739 | $ 3,123,636 | $ 6,022,919 | $ 1,995,021 |
Provision for income taxes at PRC statutory income tax rate (25%) | 1,357,435 | 780,909 | 1,505,730 | 498,755 |
Impact of different tax rates in other jurisdictions | 88,722 | 37,886 | 207,343 | 96,546 |
Effect of PRC preferential tax rate | (494,344) | (272,880) | (684,651) | (266,427) |
R&D expenses eligible for super deduction | (541,876) | (334,892) | (680,270) | (334,892) |
Other non-deductible expenses | 87,610 | 32,175 | 187,972 | 48,751 |
Change in valuation allowance of deferred tax assets | 243,969 | 166,123 | 490,851 | 356,909 |
Total income taxes expenses | $ 741,516 | $ 409,321 | $ 1,026,975 | $ 399,642 |
Taxation - Deferred Tax Assets,
Taxation - Deferred Tax Assets, Net (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Tax loss carry-forward | $ 1,604,854 | $ 1,096,956 |
Allowance for doubtful receivables | 22,950 | 9,153 |
Impairment for inventory | 409,863 | 382,375 |
Difference for sales cut-off | 33,519 | 15,526 |
Deferred government grants | 102,137 | 69,631 |
Property, plant and equipment subsidized by government grant | 233,274 | 250,563 |
Impairment for property, plant and equipment | 122,431 | 138,122 |
Total gross deferred tax assets | 2,529,028 | 1,962,326 |
Valuation allowance | (1,403,764) | (1,096,956) |
Total deferred tax assets, net of valuation allowance | 1,125,264 | 865,370 |
Deferred tax liability | ||
PPE, due to difference in depreciation | (189,821) | 0 |
Total deferred tax liability | (189,821) | 0 |
Total net deferred tax assets | $ 935,443 | $ 865,370 |
Taxation - Additional informati
Taxation - Additional information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Mar. 31, 2019 | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017 | Dec. 31, 2018 | |
Schedule Of Taxation [Line Items] | ||||||
Value Added Tax Percentage Of Revenue | 16.00% | 13.00% | 17.00% | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 34.00% | |||
Valuation Allowance Deferred Tax Asset In Increase | $ 300,000 | $ 400,000 | ||||
Low Taxed Income Description | profits of greater than 10% | |||||
Global Intangible Low Taxed Income | $ 8,210,686 | |||||
Amount of Tax Offset by Foreign Tax Credit | $ 898,875 | |||||
Effective Income Tax Rate Reconciliation At Federal Statutory future Income Tax Rate | 10.50% | |||||
Percentage of Reduction in Global Intangible Low Taxed Income | 50.00% | |||||
Description Of The New or Amended Rate Of Federal Statutory Tax | According to the policy, if no election has been made, the whole of the taxpaying entity's assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Company, HKHTC is subject to income tax at a rate of 16.5%. | According to the policy, if no election has been made, the whole of the taxpaying entity's assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Company, HKHTC is subject to income tax at a rate of 16.5%. | ||||
Other Information Pertaining to Income Taxes | HKHTC, which was incorporated in Hong Kong, is subject to a corporate income tax rate of 16.5%.In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the "Ordinance"). Under the two-tiered profits tax rate regime, the first $2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity's assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Company, HKHTC is subject to income tax at a rate of 16.5%. | HKHTC, which was incorporated in Hong Kong, is subject to a corporate income tax rate of 16.5%.In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the "Ordinance"). Under the two-tiered profits tax rate regime, the first $2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity's assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Company, HKHTC is subject to income tax at a rate of 16.5%. | ||||
HONG KONG | ||||||
Schedule Of Taxation [Line Items] | ||||||
Corporate Income Tax Percentage | 16.50% | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 8.25% | 8.25% | ||||
Operating Loss Carryforwards | $ 8,507,665 | |||||
Effective Income Tax Rate Reconciliation at Federal Statutory Rate On Amount Which Is Over and Above The Amount Assessable At Minimum Leviable Tax Rate | 16.5 | 16.5 | ||||
CHINA | ||||||
Schedule Of Taxation [Line Items] | ||||||
Income Tax Exemption Percentage | 15.00% | 15.00% | ||||
Operating Loss Carryforwards | $ 1,340,597 | |||||
Operating Loss Carryforwards Expiration Year | 2023 | |||||
CHINA | National High-tech Enterprise [Member] | ||||||
Schedule Of Taxation [Line Items] | ||||||
Income Tax Exemption Percentage | 15.00% | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% |
Notes payable (Details)
Notes payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Notes payable | ||
Notes payable to bank | $ 60,168,272 | $ 73,607,284 |
Short-term loans (Details)
Short-term loans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | |||||
Pledged Assets Not Separately Reported Property Plant And Equipment | $ 8,733,443 | $ 8,733,443 | |||
Interest Expense, Short-term Borrowings | 344,983 | $ 118,886 | 653,565 | $ 230,599 | |
Pledged Asset Land Use Right | $ 2,406,173 | $ 2,406,173 | |||
Minimum [Member] | |||||
Short-term Debt [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.22% | 5.22% | 5.23% | ||
Maximum [Member] | |||||
Short-term Debt [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.5253% | 6.5253% | 6.5253% |
Non-financial institution bor_2
Non-financial institution borrowing (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Non-financial institution borrowings | ||||
Interest Expense, Debt | $ 0 | $ 134,660 | $ 4,877 | $ 296,963 |
Repayments of Other Short-term Debt | $ 8,862,891 | $ 1,566,318 |
Lines of credit (Details)
Lines of credit (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Lines of credit | ||
Total Line of Credit | $ 107.2 | $ 102.6 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 27.6 | $ 23.8 |
Line of Credit Facility, Initiation Date | Aug. 31, 2019 | Mar. 31, 2019 |
Line of Credit Facility, Expiration Date | Oct. 31, 2021 | Oct. 31, 2021 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||||
Net income attributable to the Company | $ 4,688,223 | $ 307,721 | $ 2,714,315 | $ (1,118,936) | $ 4,995,944 | $ 1,595,379 |
Weighted-average shares outstanding | ||||||
- Basic | 15,567,953 | 15,556,361 | 15,567,220 | 15,533,139 | ||
- Dilutive effects of equity incentive awards | 58,312 | 73,052 | 48,370 | 86,632 | ||
- Diluted | 15,626,265 | 15,629,413 | 15,615,590 | 15,619,771 | ||
Net income per share: | ||||||
- Basic | $ 0.30 | $ 0.17 | $ 0.32 | $ 0.10 | ||
- Diluted | $ 0.30 | $ 0.17 | $ 0.32 | $ 0.10 |
Defined contribution plan (Deta
Defined contribution plan (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined contribution plan | ||||
Defined Contribution Plan, Cost | $ 996,410 | $ 729,595 | $ 1,979,784 | $ 1,383,552 |
Segment information (Details)
Segment information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 75,807,093 | $ 64,923,960 | $ 133,920,573 | $ 114,707,413 |
Cost of Sales | 57,436,018 | 53,614,034 | 102,888,969 | 95,831,160 |
Gross Profit | 18,371,075 | 11,309,926 | $ 31,031,604 | 18,876,253 |
Number of Reportable Segments | segment | 2 | |||
Lithium Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 62,255,334 | 48,503,856 | $ 104,985,501 | 85,100,511 |
Cost of Sales | 47,382,082 | 39,755,643 | 81,010,550 | 70,546,982 |
Gross Profit | 14,873,252 | 8,748,213 | 23,974,951 | 14,553,529 |
Ni-MH Batteries and Accessories [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 13,551,759 | 16,420,104 | 28,935,072 | 29,606,902 |
Cost of Sales | 10,053,936 | 13,858,391 | 21,878,419 | 25,284,178 |
Gross Profit | $ 3,497,823 | $ 2,561,713 | $ 7,056,653 | $ 4,322,724 |
Segment information - Total Ass
Segment information - Total Assets (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 269,097,107 | $ 288,056,099 |
Lithium Business [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 215,321,303 | 231,795,621 |
Ni-MH Batteries and Accessories [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | $ 53,775,804 | $ 56,260,478 |
Segment information - Geographi
Segment information - Geographic information net sales (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | $ 75,807,093 | $ 64,923,960 | $ 133,920,573 | $ 114,707,413 |
China Mainland [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 30,143,843 | 32,880,005 | 58,114,878 | 61,185,768 |
Asia, others [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 35,716,065 | 25,183,900 | 58,786,779 | 40,938,296 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 8,988,966 | 4,849,360 | 13,609,297 | 9,387,263 |
North America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 958,219 | 1,998,243 | 3,275,745 | 3,163,074 |
Others [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | $ 0 | $ 12,452 | $ 133,874 | $ 33,012 |
Segment information - Geograp_2
Segment information - Geographic information accounts receivable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Accounts receivable | $ 68,999,026 | $ 77,279,817 |
China Mainland [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Accounts receivable | 33,494,645 | 38,048,651 |
Asia, others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Accounts receivable | 28,138,970 | 33,237,051 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Accounts receivable | 6,596,124 | 5,413,343 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Accounts receivable | 769,287 | 566,769 |
Others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Accounts receivable | $ 0 | $ 14,003 |
Related party balance and tra_3
Related party balance and transaction (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | |
Related party transaction | |||
Accounts receivable | $ 86,343 | $ 476,093 | |
Other receivable | 59,776 | 1,570 | |
Amount due from a related party- GZ Highpower | 146,119 | 477,663 | |
Other payable-investment | [1] | 101,869 | 408,867 |
Loan from Mr. Dang Yu Pan | 0 | 5,707,984 | |
Amount due to related parties | $ 101,869 | $ 6,116,851 | |
[1] | The Company signed an investment agreement with an aggregate amount of RMB4.9 million (approximately $0.7 million) in investing for 49% of the equity interest of V-power which was set up on March 1, 2018. On April 28, 2018, the Company injected RMB2.1 million (approximately $0.3 million) to V-power. On January 14, 2019, the Company injected RMB2.1 million (approximately $0.3 million) to V-power and the unpaid amount was recorded as amount due to a related party. (See Note 8) |
Related party balance and tra_4
Related party balance and transaction - Related party transaction (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
V-Power | ||||
Payment of investment | $ 310,201 | $ 328,927 | ||
Dang Yu Pan | ||||
Loan from Dang Yu Pan | 2,954,297 | 0 | ||
Repayment of Loan from Dang Yu Pan | 8,589,619 | 0 | ||
GZ Highpower [Member] | ||||
GZ Highpower | ||||
Sales | $ 239,573 | $ 433,147 | 440,306 | 658,934 |
V-Power [Member] | ||||
V-Power | ||||
Payment of investment | 0 | 0 | 310,201 | 0 |
Dang Yu Pan Member | ||||
Dang Yu Pan | ||||
Loan from Dang Yu Pan | 0 | 0 | 2,954,297 | 0 |
Repayment of Loan from Dang Yu Pan | 8,589,619 | 0 | 8,589,619 | 0 |
Interest expense | $ 20,135 | $ 0 | $ 133,930 | $ 0 |
Related party balance and tra_5
Related party balance and transaction - Additional Information (Details) ¥ in Millions | 3 Months Ended | 6 Months Ended | ||||||||||
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jan. 14, 2019CNY (¥) | Jan. 14, 2019USD ($) | Jul. 20, 2018CNY (¥) | Jul. 20, 2018USD ($) | Apr. 28, 2018CNY (¥) | Apr. 28, 2018USD ($) | Feb. 28, 2018CNY (¥) | Feb. 28, 2018USD ($) | |
Mr. Dang Yu Pan [Member] | ||||||||||||
Interest Expense, Related Party | $ 20,135 | $ 133,930 | ||||||||||
Loan Agreement Amount | ¥ 60 | $ 8,700,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.65% | 5.65% | ||||||||||
Shenzhen V-Power Innovative Technology Co Ltd [Member] | ||||||||||||
Equity Method Investments | ¥ 4.9 | $ 700,000 | ||||||||||
Equity Method Investment, Ownership Percentage | 49.00% | 49.00% | ||||||||||
V-Power [Member] | ||||||||||||
Related Party Transaction, Due from (to) Related Party | ¥ 4.2 | $ 600,000 | ¥ 2.1 | $ 300,000 | ¥ 2.1 | $ 300,000 |