Greenland Technologies Holding Corp. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; comparisons are to FY2020. This filing reports annual results, not standalone fourth-quarter results. The company primarily makes forklift transmission products in China and is developing electric industrial vehicles for North America.
Financial performance
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | $98.84 million | $66.86 million | +47.8% |
| Gross profit / margin | $19.59 million / 19.82% | $12.81 million / 19.16% | Profit +52.9% |
| Operating expenses | $11.34 million | $6.10 million | +85.8% |
| Operating income | $8.25 million | $6.71 million | +23.0% |
| Consolidated net income | $7.27 million | $6.37 million | +14.1% |
| Net income attributable to Greenland | $6.27 million | $6.76 million | Down |
| Basic and diluted EPS | $0.58 | $0.67 | Down |
| Net cash from operating activities | $(5.76) million | $2.70 million | Turned negative |
Revenue growth was primarily volume-driven, reflecting higher demand and the company’s ability to supply customers amid competitors’ material shortages. Gross margin improved with a shift toward higher-value products. Operating expenses rose sharply, particularly R&D, which increased 131.7% to $5.53 million. FY2020 included a one-time $1.94 million foreign-currency remeasurement gain; FY2021 did not.
Transmission boxes for forklifts generated $85.62 million of FY2021 revenue; non-forklift transmission boxes and other products generated $13.22 million. Domestic China sales were $98.28 million, with international sales of $0.56 million.
Balance sheet, debt and liquidity
- At December 31, 2021, cash and cash equivalents were $11.06 million; restricted cash was $6.74 million and unavailable for general use; short-term investments were $2.11 million.
- Current assets were $139.31 million and current liabilities $85.46 million, for reported working capital of approximately $53.84 million. Current assets included $37.55 million of notes receivable, $25.80 million of inventory, and $39.68 million due from related parties.
- Short-term bank loans were $8.76 million, down from $18.49 million. Bank acceptance notes payable were $42.09 million, up from $25.89 million; accounts payable were $29.06 million. Total liabilities were $87.72 million, compared with total equity of $74.84 million.
- Operating cash outflow reflected working-capital investment, notably a $9.97 million increase in inventory and a $5.95 million increase in notes receivable. Financing provided $14.46 million, including new bank borrowing, notes payable, equity/debt financing and non-controlling-interest investment; cash and restricted cash ended the year at $17.80 million.
Material changes, outlook and risks
- Sales of transmission-product sets increased to 141,431 from 108,913. The five largest customers accounted for 54.06% of revenue; the largest represented 18.47%.
- Management said it expects sufficient funding for the next 12 months from operating cash flow, bank borrowing renewals, possible equity financing and shareholder/affiliate support, and anticipated improved cash flow in 2022. It provided no quantified revenue or earnings guidance.
- The electric-vehicle business remains a growth initiative with market-acceptance and execution risks. Products available in the U.S. include electric forklifts and a wheeled front loader; the GEX-8000 electric excavator launched in February 2022. The company planned a U.S. assembly site and experience center during 2022.
- A significant related-party exposure is the receivable from controlling shareholder Cenntro Holding Limited: approximately $39.46 million owed by Cenntro at year-end, within total due-from-related-parties balances of $39.68 million. The repayment deadline was extended to June 30, 2024. A March 2022 subsequent-event disclosure says repayment was to begin in September 2022 and that Cenntro would secure the outstanding debt with marketable securities valued at approximately $30 million.
- Management identified risks from collection delays, customer concentration, steel and other input-cost inflation, short-term borrowing renewals, COVID-19, and PRC regulatory, currency-transfer and overseas-listing uncertainty. It disclosed potential employee-benefit underpayments and estimated maximum penalties of approximately $200,000; it had not been ordered to pay as of the filing date.
- Management concluded disclosure controls and internal control over financial reporting were ineffective because of a material weakness: insufficient personnel with appropriate U.S. GAAP and SEC-reporting expertise. Management described remediation plans. The independent auditor gave an unqualified opinion on the financial statements, but did not attest to internal controls; the company cited its emerging-growth-company exemption.
Key investor verification points
- Track collection and collateral coverage of the Cenntro related-party receivable, including whether the repayment schedule and approximately $30 million securities pledge are fulfilled.
- Assess operating cash conversion, inventory growth, notes-receivable quality and the company’s dependence on financing and bank acceptance notes.
- Verify whether internal-control remediation is completed and whether future filings report effective controls.
- Monitor customer concentration, raw-material cost pass-through and whether electric-vehicle sales and planned U.S. operations gain meaningful traction.
- Confirm applicable PRC approvals and filing requirements for overseas listings or future offerings as regulations evolve.