U Power Limited — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022; this is an annual report, not a standalone Q4 filing. Financial statements are prepared under U.S. GAAP and presented primarily in RMB, with selected U.S. dollar equivalents.
Business context and reporting period
U Power is a Cayman Islands holding company with no material operations of its own; substantially all revenue is generated by its PRC operating subsidiaries. The business combines vehicle sourcing services with development and sales of UOTTA battery-swapping stations and related services. The company has been shifting its focus toward EV battery-swapping technology. It reported no revenue from sales of UOTTA-powered EVs in 2022.
Key financial metrics
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | RMB7.796 million (US$1.131 million) | RMB8.010 million |
| Gross profit / margin | RMB2.659 million / 34.1% | RMB2.873 million / 35.9% |
| Operating loss | RMB56.249 million | RMB44.951 million |
| Net loss | RMB57.667 million (US$8.361 million) | RMB49.064 million |
| Net loss attributable to U Power shareholders | RMB45.921 million | RMB41.399 million |
| Net cash used in operating activities | RMB12.892 million | RMB82.229 million |
| Net cash used in investing activities | RMB11.387 million | RMB14.759 million |
| Cash provided by (used in) financing activities | RMB4.500 million | (RMB4.003 million) |
| Cash and restricted cash at year-end | RMB5.908 million | RMB25.687 million |
At December 31, 2022, cash and cash equivalents were RMB4.881 million and restricted cash was RMB1.027 million. Total current assets were RMB54.012 million against current liabilities of RMB59.150 million, resulting in net current liabilities of RMB5.138 million. Total assets were RMB281.854 million; total liabilities were RMB73.939 million.
Borrowings included RMB10.0 million of long-term bank borrowing, bearing 6.87% annual interest and secured by a manufacturing facility, and RMB6.5 million of overdue loan payable to WuYi Transportation Construction. The latter was subject to a repayment settlement after year-end. Contractual obligations totaled RMB24.266 million, including leases and the above loan and settlement payables.
Material changes versus FY2021
- Revenue declined 2.7% (approximately 2.5% as described by management), mainly because battery-swapping-station sales fell as 2021 sales in established regions were not matched by new-region demand; COVID-related restrictions also delayed construction and installation.
- Sourcing-services revenue rose to RMB4.428 million from RMB1.394 million, but included a single RMB3.3 million battery sale to one customer—42.8% of total 2022 revenue. Vehicle-sourcing commissions themselves were RMB1.1 million.
- Product-sales revenue, primarily from battery-swapping stations, fell to RMB3.061 million from RMB6.616 million. Battery-swapping services began contributing revenue, at RMB0.307 million.
- Gross profit fell to RMB2.659 million from RMB2.873 million. Research and development expense rose 74.1% to RMB9.352 million, while sales and marketing expense fell 59.2% to RMB2.041 million and general and administrative expense was broadly flat at RMB37.714 million.
- The company recorded RMB9.801 million in allowance for doubtful accounts, primarily for supplier advances and other current assets. Operating cash outflow improved from RMB82.229 million to RMB12.892 million, but year-end cash and restricted cash fell by RMB19.779 million.
Outlook, commentary, risks, contingencies and unusual items
- Liquidity and going concern: The financial statements state that recurring losses, negative operating cash flow, net current liabilities and accumulated deficit raise substantial doubt about the company’s ability to continue as a going concern. Management said the doubt was alleviated by its April 2023 IPO proceeds and expected available resources to cover anticipated needs for 12 months from the report date. Additional financing may be needed, and availability and terms are not assured.
- IPO subsequent to year-end: The company completed its Nasdaq IPO in April 2023. The filing reports approximately US$13.0 million net proceeds in the financial-statement note and approximately US$13.4 million in the use-of-proceeds section; it says proceeds were unused as of the report date and deposited in a Hong Kong bank term deposit. These reported net figures differ.
- Business outlook: Management plans to develop UOTTA-powered commercial EVs with automakers, expand station sales and operations, and invest in technology and sales channels. No quantified revenue, earnings or cash-flow guidance is provided. Execution depends on customer adoption, partners, compatible battery standards, manufacturing and supply-chain readiness, and regulatory approvals.
- COVID-19 and supply chain: The filing attributes project delays, order cancellations, constrained sourcing and higher station-manufacturing and shipping costs to COVID-related disruption. Management could not quantify the pandemic’s future financial impact.
- Other significant risks: The company is exposed to PRC regulatory and cross-border cash-transfer risks, currency fluctuation, competitive and commercialization risks, dependence on third-party manufacturers and suppliers, and the potential loss of government EV incentives. PRC authorities’ future requirements for overseas offerings remain uncertain; the company’s counsel said the 2023 IPO did not require CSRC filing, but subsequent offerings may.
- Controls and audit: Management found disclosure controls and procedures ineffective at year-end because of a material weakness involving insufficient U.S. GAAP/SEC reporting expertise and a lack of formal accounting policies and procedures. Remediation was underway; no auditor attestation on internal controls was provided. The financial-statement audit opinions were unqualified. The auditor changed in May 2023, with no reported accounting or auditing disagreements.
- Legal matters: A RMB2.9 million provision was recorded for a lease dispute in which Youpin lost its first trial in April 2023. After year-end, AHYS agreed to pay RMB1.281 million to settle an equity-transfer dispute; ZJ Youguan agreed to repay RMB6.5 million by December 15, 2023. Another supplier settlement called for a RMB2.746 million deposit refund and damages receivable. A separate guarantee-related case remained on appeal.
- Governance and distributions: Founder and CEO Jia Li controlled approximately 70% of voting power at year-end. The company does not anticipate dividends in the foreseeable future; PRC subsidiary distributions are also constrained by accumulated-profit, reserve and foreign-exchange rules.
Most important facts for investors to verify
- Whether the RMB3.3 million battery sale was genuinely one-off and whether repeatable sourcing and station revenues can replace it.
- Recoverability and timing of supplier advances and other current assets, including the RMB9.801 million doubtful-account allowance.
- Progress on the RMB6.5 million overdue loan settlement, other legal settlements, and the RMB2.9 million lease-case provision.
- Post-IPO cash actually available to the operating subsidiaries, given the differing net-proceeds figures and PRC/Hong Kong transfer constraints.
- Whether operating cash burn, losses and net current liabilities improve, and whether management’s 12-month liquidity assessment is borne out.
- Remediation of the material weakness, and evidence that UOTTA stations and related services can scale commercially despite partner, standards and supply-chain dependencies.