Earnings call transcript Q1 2023

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Operator

Good day, ladies and gentlemen. Thank you for standing by, and we warmly welcome you all to the Greenland Technologies First Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, we are recording today's call.

If you have any objections, you may disconnect at this time.

call Greenland. Joston the Relations [ph], turn of Director I'll over Sami to Investor Now Mr. proceed. please Sami,

Unidentified Company Representative

Thank you, hello, XXXX operator, and earnings first Greenland conference quarter Technologies call. everyone. Welcome to

Officer. press release available is Wang, Mr. ir.gtec-tech.com Joining website company's is results from as us The Chief well on today as Executive today. earlier We IR Raymond at the released services. Newswire

our this available in hours on be call a also IR will of replay A website. few

made discussion Before Reform safe under we statements please contain continue, U.S. Act Litigation the today's provisions Securities will the that XXXX. of harbor forward-looking note Private of

statements Forward-looking risks inherent involve and uncertainties.

the be materially such, different today. actual expressed expectations As results company's from may the

does these company's please obligation figures conference to not included and regarding except mentioned and risks update in any information forward-looking the in public uncertainties required Also, the U.S. the with stated, law. statements, under applicable is otherwise all during company dollars. are assume Further filings as note any other The unless that call SEC.

me Raymond Wang. With that, ahead, Mr. our go now to over let Wang. Mr. Please CEO, call the turn

Raymond Wang

global voice Jing and has and you, to this difficult everyone, team you market by call. CFO, and for for a as today. Thank condition and contribute is of morning, I'll to efficient business I'd global no operation. be a today's continuing start my majority thanking continuing the our good to us like to during to joining his handling Josh, lost more in a call thank drive develop Jin,

Again, as and policy. conditions manufacturing material the zero-tolerance conditions in and continues industry the earnings this our from country's quarter. business market recover ramp our handling in to from last during stated the first to and global recover China current is due and OEMs up call, expected As market the component

PMI showing of of manufacturing on which slowdown. has a global below slower this year, a XX.X% fears fallen XX.X%, is China's to recovery Now estimates the

and the especially from forecast our component feedback this business grow, stand of clients internal estimates, half in our our still business in by our second the we and that based However, year. on normalize will

handling a reaching View continues XX.X% XXXX material growth towards to their Research global market compound industry the shift The with grow highs. a around with of emission forecast annual increased forklifts all-time world. of recently forklift through electric rate due greater Grand to the increased regulations demand to

results. leader the industry, in As this on drivetrain reflect market transmission will a and market and forklift our own growth metrics

systems. on all demand And as components to capitalize advanced our we are with material and this ready handling for forklift

and our innovation, our displayed margins this compared later to results, year. to margins XX.X% last success points as product accelerates we improve market XXXX lower of As recovers Gross a in are and through the further will XXX contribute to to improvements continue costs, operational year. up These efficiencies. basis

business, HEVI HEVI really the Switching our success infrastructure is recently to It this always We fossil Chief to of pioneer continue company. area. in traditional has we the the compared educate electric the as and to and the who make Operating machinery industrial recruited developing new Dana HEVI Hopkins, strides for Officer, running the laying electric ground hit foundation succeed. to systems, need been continue industry machinery a we to has great see we on to responsibility advantages fuel a

where tremendous with industry of quarter signing product. alone our we have demos met were interest trade We at one. each for and this more participated more organizations shows and pilots three HEVI up in

demand perspective this how opportunity. that HEVI products the Speaking path improve for always there with is HEVI can capture the operations attendees fuels and right learning and equipment my is our electric on their to

faster so accordingly. strategy toward move needs HEVI we But will I and that our to advance adapt milestones, their understand

network new their and and a incorporate of and leads sales open providers, our to our warm develop increase new with of deploy authorized service will leverage opportunities. we This close personnel doors. uncover we referral to effectiveness the new will network As incentive

maintenance, new name industries new few. focus itself explore utility and markets we property in operations, possess will companies territories, and benefit and our States. United away will significant internationally market product take for HEVI lends landscaping, a manner a domestically calculated be in from our presence from opportunity. as This of doing line that also the that region Mid-Atlantic to the to as And such can exploring both so prudent us not to establishing our on clean

received them our products we expand will companies from HEVI these and feedback heavy that electrification. to machinery various shows, also interest a would our lot benefit have in other has expressing greatly We of target accordingly. marketing trade to interest begin from in industries received at in

more to those worth milestones proud of the work work and originally to and has reach I the is done team be study These lead market to we product believe further still accomplished. opportunities we GTEC am and are be of research our than line track expansion goals. and are an There to planned. may sooner achieved, on the I right that

into with XXXX. the financial me dive for that, the results And let of first quarter

refer As filings our details for financial always, our full of results. earnings please to

So, the following XXXX, a was cases a challenges China's of zero largely chain year's to of initial end COVID supply Chinese ago this policies for demand during significant from the logistical wave the resulting COVID Year decrease million, quarter XX.X% of pent-up holiday. of travel year total New XX% and and revenue $XX.X first due from

to was addition, RMB stronger relative impacted Chinese basis. yen a revenue In an dollar on by the

from And first quarter compared sorry, the the impact units, XX,XXX units sold total of revenue product transmission XX,XXX in Excluding foreign the year. with about of exchange, XXXX. the we by decreased previous XX%

due $X.X to $X.X to fell million in XX% XXXX. Our volume. profit primarily with lower QX goods cost XXXX, QX $XX.X in million of compared sold was sales Gross million

from points by a transition mix component products XXX driven XX.X% XX.X% our higher a ago. rose Greenland's product more to However, transmissions, sophisticated like a strategic margin and value towards in year hydraulic gross basis

to has increased over costs activities significantly streamlining The year, the Meanwhile, investment the expansion. $X.X related X% on which development focused operating in company's research past increases mostly expenses offset total and year-over-year has company million. to marketing and

was operations income Our compared XXXX. $X.X QX was in with $X.X XXXX. QX million in million Net income with $X.X compared $X.X million from million

As million with financials an as division core growth sound end we the value confident cash on our our of the as ability are we significant from deliver as strong business our of for and solid remained of $XX.X well year HEVI hand, sheet With March, grow XXX% increase to transmission balance both a earlier. strategies, in shareholders.

open I'm with And our to going the for up that that, remarks. questions. prepared call concludes

operator, So, go please, you may ahead.

Operator

Instructions]. [Operator Thank you.

Theodore from Litchfield line Please Research. of question Hills go ahead. the First O'Neill comes from

Theodore O'Neill

Congratulations the Good on quarter. morning. good

Raymond Wang

Thank you.

Theodore O'Neill

Yes.

pivot And resources the were in -- HEVI? as you resources towards call, I experienced more saying you so, think growth can this you slower China, on your but

Raymond Wang

talent And of can. accelerating actually and our properly team, be team opportunities important been to the our us the the be capitalize we Yes, uncovering. very execute part have of been on that for we expanding is to on vision. expansion able focus able is our now to to right This we've

And sooner -- on investment also and planned marketing efforts anticipate further both So, initially further expansion. we our and in we little efforts than have been that aspect our in we had our territory a as and well, of sales investing marketing it.

Theodore O'Neill

permanent? margin pricing channel? you to pressure have gross from mentioned And that, related here any Does on product you And that in anything improvement do reflect mix. that

Raymond Wang

Great question.

towards forklifts switch the is shift margin of market the how towards portion big based product in a higher particular. on So, over our the actually lithium, in

because forklifts. lithium, unit Our And cater over really our expensive is driving on transmission the a OEMs switching been in to yet that's drivetrain highest margin, towards our specifically market most that lithium-powered product. scale, offer, global we is

it's to fossil And right both actually product a with still, traditional, just now, our and hydraulic fuel. premier transmissions, support like

always driven a but away cost from that clientele. product we've been our not premier standpoint, the Forklifts, has

Theodore O'Neill

Thank you, very much.

Operator

Please question next Dionisio from of ahead. Aegis Capital. from The line Rommel comes go the

Rommel Dionisio

side some the as these so, know I trade as programs, you you if with some been you of New show recently. you share thank pilot morning, could to so programs pilot wonder Good believe, and with initial I HEVI I shows you. in at, involved feedback that York you. trade the also well Thank just can extent us And on Rentals attending. on you've forth. the presented United the were Raymond, the

Raymond Wang

Absolutely.

United travel over to pilot, They've have And been both they a they been location so to feedback. United truly been demo. the learn the of it's always introduce Rentals more about that equipment. lot enjoying extension it's products Rentals the an and with of well excited company positive can have to getting requested stored our their to So, where sales see teams as it and our additional And how has well clientele. their that pilot to gone

demand. we demand much our most and little New that our Maryland, anticipated product our meet few. York, properly able pilots for getting a demos on are But be have so Pennsylvania, line It's New for a we Delaware to been for GEL-XXXX, largest they a challenge GEL-XXXX, shuffling across Jersey, logistically now, and support actually our around and to and our requests influx this Right to and that products of popular to just both than name we've more been unit. product both of our inventory

truly able now demo with campaign to multiple actually are at doing to once material, stronger it single days is a we product our We drive and that looking feel our invite instead towards a we're do to to with what opportunity be smoother will a couple catering we more demos, of utilize But be effective initiate move sales. hope where out organizations operation the individual an to use of and equipment to equipment, generate that sales and process. experience it more

Rommel Dionisio

just follow-up. in eventually was XXX Okay. to units Baltimore over your And a annually. know maybe facility XX,XXX-square-foot supposed produce I quick

the track? assembly line. units still to Is the second that the assembly off you I roll targeting were on think in quarter, line of first

Raymond Wang

are for We on track still that.

excavator units a popular loader. our and electric GEL-X,XXX, first and most is our front The a GEX-XXXX, be will largest which

Rommel Dionisio

you. by Thank wish I J.J. way, recovery. to want Raymond. Thank the Great. And you, quick

Raymond Wang

Thank much. that. will you to very hear be He glad

Operator

Water ahead. Please Graham The comes the Tower go next from line question Research. of from Mattison

Graham Mattison

question the morning, A Raymond. good quick Hi, on quarter.

and last best quarter had three. guys first you So, have quarter financial in I mean the results the the certainly

quarters looks before? you seeing it like things And to market. what still thought quarter recovering had gives banner four quarter Are So, the Chinese you confidence? that you the be the and are three in

Raymond Wang

the shutdowns lifting that of from see business. truly in a be still is OEMs the to last COVID banner strongest the am being of trend for the the that year particularly I due aggressive the in and optimistic just come quarter XXXX and core it for earnings That the where even to China control policy do still the the to and we big will sense our outlined zero that was I a Yes. pandemic. that a production year primarily at devastating I And caused trying us. region, fourth component were third to lot manufacturing for back the in to entire policies gap try but cycle call, time,

clients were their the is to of but bumps stronger there -- So, go, has the operations of part a just ready ever. majority been in revving are our end of at than up demand it's the bruises the lot and ramp-up and XXXX, overcoming of still and They cycle.

a normalize it's ready then process So, is go. we've ramp as execute. running get everything as up, quickly. to flow we're not beginning our they them to And fast And in because seeing so to been and our up results. will But of the for deliveries that,

Graham Mattison

changes and any market the business? then see coming position of the competitive COVID competitive of the Great. lockdowns, out And for in you the transmission the landscape do

Raymond Wang

so was talking towards say, outside at beginning move majority to say, started I'd XX%, middle. in XXXX to of XX% to end of about few a XXXX, mostly from Still, through XX% sales about percent, We're we the a our during, of we a of XXXX shift switch a Initially, from China. China. start did, the see let's

China. we seeing shift OEMs trends lot are some that trying a of their the of were country manufacturing outside to So, of

expertise to it right However, now in still because markets, seeing time, are come the the manufacturing more experienced and challenges who back. that manufacturers of ramp that international actually We're investment, up that up opportunities. their they I needed think starting rev and to

again, So to around entirely now, right majority the of Chinese OEMs again. our XX%, a are sales right XX%

Graham Mattison

one then great. that's And All and Great. question, right. last

cycle it, what's the do sense they a us in typically Can just With that When come customer you're coming getting they're get you and the do potential sales the next at people. demo trade as a site? in industry? there? step? is And through just the to you're Is of the how on and sort walk interested shows get saying product or really you around can the in process it their give talking a long you you some feedback

Raymond Wang

Yes.

because machinery it's recognition. compare very the actually players it's these of average by to just industrial strong small industry a difficult with HEVI to for handful led -- sales very So, cycle brand industry,

So -- and so similar delivery focused certain for faster service. of besides, have let's say, a either and brand. almost that, on much politics go classes That's sales they process to or more a brand one machinery, because it's you it's another of

overcome Now for comfortable our have big people technology. with of we and challenge the the to side, brand-new educating getting

double But really that lot questions you of product it? learned machinery they they How How electric. get in a it every trade much the shows time charge see that advantages buzz that actually interest people And we benefits and with it's driving the when does And last? take is line. it see How does our the cost? questions. will are of a showcase that these and long the our because then

gets it excited. them very So,

Now from able an were our we support we on how go envision would a to pursuing can and interest this be utilize the a that from the logistical the power, opportunity provide received. from that expensive the sales challenge was to standpoint, see and traditional But process We operations, there. was really slow. demo to the is them client's with vehicle, schedule site we their

were multi-day We doing demos.

cases, site in would week for at while waiting many an others in So, line. that have we asset plus a the prospect be

NYC show, we actually York. Queens, New dozen from For York walked pilots example, requests for with were just we in New away that the Show organizations from two week, And and demos area. over around at last the Fleet City

too it So, resist by were slow. we if to one do we're one, it finding

on-site And pilot changing we're than demo of looking now or just are longer no more a demos few in up. hours a for for we to day. a So, actually it do group

Graham Mattison

XQ, you're one that the to help beginning add as the process? demo then question in, will And off to line it. more in Got Quinn roll as starting [ph] that

Raymond Wang

will. it Yes.

have As now, dedicated vehicle waiting with to that right fleet I'm demos, just organizations for their for their pipeline now it turn different machines, right a still XXX stands we sorry. is our entire of over are the and

Graham Mattison

very I'll jump much. Great. in right. All it. Got you, back queue. Thank

Raymond Wang

Thank you, the questions. for

Operator

Seeing more the no in questions queue.

Let me back closing call remarks. Wang the to for Mr. turn

Raymond Wang

to participating the in So, again progress our just everyone, our I wanted call, everyone and continuing of to thank for company. follow

for reflect that I for the still it path not value, down in opportunity that and the line. believe our great become on coming though are company where stock timing We things, significant our strongly and recognized is may purposes will surely and value our the the shareholders,

shareholders. just want thank everyone our a again team every your participating hope for to this for call. to everyone hard deliver day continuing work to on I to of to want thank rest value I my I our And So, fantastic so day. has

Operator

call. you Thank This concludes the again.

disconnect. You may now

Greenland Technologies Holding (GTEC) 19 May 232023 Q1 Earnings call transcript