U Power Limited — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing; the text does not provide separate Q4 results. Financial statements are prepared under U.S. GAAP. Amounts below are in RMB unless stated otherwise.
Business context
U Power is a Cayman Islands holding company whose operations are conducted through PRC subsidiaries. Its business is shifting from vehicle sourcing toward UOTTA battery-swapping technology, stations and related services. In 2023, battery-swapping station sales drove most revenue; the company reported no revenue from sales of UOTTA-powered EVs. It reported sales of six stations during 2023 and operation of two stations.
Key financial results and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | RMB19.764 million (US$2.783 million) | RMB7.796 million |
| Gross profit / margin | RMB12.172 million / 61.6% | RMB2.659 million / 34.1% |
| Operating loss | RMB36.903 million | RMB56.249 million |
| Net loss | RMB25.466 million (US$3.587 million) | RMB57.667 million |
| Net cash used in operating activities | RMB65.442 million | RMB12.892 million |
| Net cash used in investing activities | RMB84.076 million | RMB11.387 million |
| Net cash provided by financing activities | RMB179.403 million | RMB4.500 million |
- Revenue mix in 2023: product sales RMB17.062 million (86.3%); sourcing services RMB1.513 million (7.7%); battery-swapping services RMB1.189 million (6.0%).
- General and administrative expense was RMB41.222 million. R&D expense fell to RMB2.184 million from RMB9.352 million in 2022. The company recorded RMB1.996 million of long-lived asset and investment impairment and RMB1.196 million of doubtful-account allowance.
- Other income rose to RMB16.927 million, mainly from a government grant. The filing does not clearly establish how much of this income is recurring.
- At year-end, cash and cash equivalents were RMB1.927 million and restricted cash RMB34.312 million. Total current assets were RMB163.197 million and current liabilities RMB74.881 million, yielding reported net current assets of RMB88.316 million. Much of current assets was not cash: other current assets were RMB94.813 million, including prepayments and third-party loans.
- Total liabilities were RMB80.861 million and equity RMB344.620 million. Bank borrowings totaled RMB14.5 million; a separate RMB5.2 million loan payable to WuYi was overdue and reported within accrued liabilities. Contractual obligations totaled RMB29.051 million, including leases, borrowings and the overdue WuYi balance.
Changes versus the prior year
- Revenue increased 153.5%, principally due to higher station product sales. Gross margin improved to 61.6% from 34.1%.
- Net loss narrowed by 55.8%, but operating cash outflow increased substantially to RMB65.442 million from RMB12.892 million.
- Financing cash inflow was largely supported by share issuance proceeds. Financing activities provided RMB179.403 million in 2023, including RMB156.197 million from ordinary-share issuance.
- G&A expense increased to RMB41.222 million, while R&D expense declined sharply. Management attributed the R&D reduction to lower UOTTA innovation activity.
- Revenue composition shifted toward station sales: sourcing services fell to 7.7% of revenue from 56.8% in 2022. The prior-year sourcing figure included a one-off battery transaction that contributed RMB3.1 million.
Outlook, risks and unusual matters
- Going concern: The auditor highlighted substantial doubt about the company’s ability to continue as a going concern. Management cited financing, cost controls, faster delivery and collections, sales initiatives, and equity financing as mitigation plans. The filing also says management believes available and anticipated funding should cover the next 12 months; funding availability and sufficiency are not assured.
- Liquidity and asset recoverability: The company reported RMB72.774 million in refundable investment deposits due from Shanghai Lingneng at year-end. A February 2024 termination agreement provides for repayment of at least one-third annually over three years; RMB2.285 million had been received by the report date. Current and non-current third-party loans and advances also require monitoring.
- Business execution: Commercial EV models and station operations remain at an early stage. Battery-swapping standards, customer adoption, partner performance, regulatory approvals and station utilization could constrain growth. UOTTA EV launches have experienced delays, and the company depends on automakers and other third parties for manufacturing and supply.
- China and listing risks: The company warns of PRC regulatory, data-security, foreign-exchange and cross-border cash-transfer uncertainty. Its Singapore-based auditor was subject to PCAOB inspection, but future access risks are disclosed. It states it was not required to obtain CSRC filing for its completed IPO, while subsequent offerings may require filing.
- Controls and legal matters: Management found a material weakness in internal control over financial reporting due to insufficient U.S. GAAP/SEC reporting expertise and lack of formal accounting procedures; disclosure controls were deemed ineffective. The filing describes multiple legal proceedings, including an overdue settled loan, repayment and guarantee matters, and other claims. It also discloses a RMB2.3 million investor-fund repayment obligation following a court decision.
- Other items: The company reports no expected dividends in the foreseeable future. It completed a 1-for-100 reverse share split on March 31, 2024. Its auditor issued an unqualified opinion on the financial statements, but did not attest to internal-control effectiveness.
Most important facts for investors to verify
- Whether operating cash burn can be reduced and funding is sufficient, especially given the going-concern warning and low unrestricted cash balance.
- Collectability and repayment timing for the Lingneng deposit, third-party loans, supplier advances and receivables; clarify restrictions attached to the reported restricted cash.
- Whether government-grant income is recurring, and whether station sales and service revenue can grow without continued equity financing.
- Current status of UOTTA vehicle approvals, launches, station deployments, utilization, partner agreements and product-level margins.
- Repayment of the overdue WuYi loan, outcomes of disclosed litigation and guarantees, and any additional contingent liabilities.
- Remediation of the material weakness and effectiveness of financial reporting controls, plus share counts and dilution following offerings and the reverse split.