Greenland Technologies Holding Corporation Q4 FY2022 earnings call

• Core Component Business: Impacted by pandemic and yen weakness, but market recovery seen in 2023 with China's economic recovery and stronger yen forecasted. Exploring strategies to expand core components business to other markets.
• HEVI Division: Expanded product line including GEL-5000 front loader and DC mobile chargers. Partnered with Cyngn for GPS asset tracking, multiple demos with staple organizations, first U.S. assembly site in Baltimore, MD on schedule, and focus on market penetration and product adoption with plans to establish approved service providers.

Core Component Business: In 2022, 129,686 drivetrain units were produced and delivered, generating $90.8 million in revenue. In the fourth quarter of 2022, 27,542 drivetrain units were delivered, resulting in $19.1 million in revenue. This segment was impacted by the slower market recovery post-China's pandemic restrictions and the weakened yen. HEVI Electric Industrial Equipment Division: Focus on expanding product line, partnering with Cyngn for GPS asset tracking, multiple demos with staple organizations like United Rentals, and a U.S. assembly site in Baltimore, MD on schedule. Specific revenue contribution for HEVI not provided in absolute terms but highlighted as a focus for growth.

• Expect rebound in core component business starting in Q2 2023 as market recovery gains momentum. 2023 forecasts indicate a stronger yen supporting financials. HEVI to continue market penetration and product adoption, with focus on expanding manufacturing capabilities and securing fleet deals.

• Dependence on the Chinese yen impacting financial results. - Lingering pandemic regulations continuing to impact business operations.

Q: What's the bigger driver for 2023, backlog or China market recovery?

A: Both are significant drivers. Backlog needs to be filled and China market recovery is starting, with ramp-up expected in Q2 2023.

Q: What's driving higher margins and room for further improvement?

A: Integrated drivetrain units for lithium product and electric forklifts are a key driver. There's opportunity to expand this product to larger material handling vehicles.

Q: Customer feedback on HEVI products and timing of orders?

A: Feedback is extremely positive. For flagship orders, after demos, it transitions to pilots (50-150 units), and if positive, proceeds to nationwide/global distribution. First production in Q2.

Q: Pent-up demand in China and market share?

A: Pent-up demand exists due to delayed ramp-up post-pandemic restrictions. Market share was impacted but normalization expected by end of Q1 2023.

Q: Supply chain and freight costs?

A: Seeing benefit of lower freight costs as supply chain improves, but need to further diversify core components business markets.