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Greenland Technologies Holding Corp. (GTEC)·Q2 2021 Earnings Summary

Executive Summary

  • Record quarter: revenue $28.2M (+70.1% YoY), gross margin 20.2% (+280 bps YoY), net income $3.2M (+114.2% YoY), EPS $0.26; units sold 42,046 (+43.6% YoY). Management attributed strength to robust end-market demand, supply chain resilience, and higher-value product mix .
  • FY2021 revenue guidance raised to $90–$100M (from $80–$90M in May), implying ~35%–49% YoY growth versus 2020; key catalyst into the second half as North America GEF-series lithium forklifts begin deliveries in September .
  • Operational execution: cost discipline and economies of scale lifted gross margin despite raw material inflation; company chose to absorb short-term steel spikes to deepen Tier-1 OEM relationships instead of passing through pricing .
  • Strategic expansion: first industrial EVs (GEL-1800 loader, GEX-8000 excavator) slated to arrive in the U.S. in Q4; direct sales and modest U.S. assembly sites planned; $7M capital raise supports rollout .

What Went Well and What Went Wrong

What Went Well

  • “We have once again achieved a record quarter with revenue generated of $28.2 million … and 42,046 transmissions sold” (CEO), showcasing demand strength and operational throughput .
  • Gross margin improved to 20.2% (+280 bps YoY) on economies of scale and shift to more sophisticated hydraulic transmission products; production efficiency at the 650k sq ft facility supported margin expansion (CEO/CFO) .
  • Strengthened balance sheet and growth funding: completed $7M underwritten offering to support U.S. EV strategy; formed strategic partnership with Shandong Zhongcha to co-develop lithium forklifts .

What Went Wrong

  • Cost pressure: cost of goods sold rose 64.3% YoY to $22.5M on higher sales volume and raw material inflation; company cited steel price spikes, which it absorbed rather than pass-through, compressing near-term pricing power .
  • OpEx increased 84.1% YoY to $2.3M, with higher sales and labor costs; R&D up 111.4% to $1.0M as EV investments ramp (near-term margin headwind) .
  • Early EV pre-bookings: initial commitments were “low” ahead of U.S. vehicle arrivals; management expects conversion post demos and hands-on experience (Q&A) .

Financial Results

MetricQ2 2020Q1 2021Q2 2021
Revenue ($USD)$16,576,345 $24,610,894 $28,204,307
Gross Profit ($USD)$2,882,110 $5,104,387 $5,705,169
Gross Margin (%)17.4% 20.7% 20.2%
Operating Expenses ($USD)$1,223,660 $2,249,914 $2,252,970
Income from Operations ($USD)$1,658,450 $2,854,473 $3,452,199
Net Income ($USD)$1,471,508 $2,443,239 $3,152,323
EPS (Basic & Diluted) ($)$0.13 $0.21 $0.26
Units Sold (Transmissions)29,281 36,986 42,046

Notes:

  • YoY performance benefited from demand and product mix; QoQ progression reflected continued volume ramp and margin resilience despite input inflation .

KPIs

KPIQ2 2020Q1 2021Q2 2021
Units Sold (Transmissions)29,281 36,986 42,046
OpEx as % of Revenue7.4% 9.1% 8.0%

Segment Breakdown

  • Not disclosed; management cited mix shift to higher-value hydraulic transmission products supporting margin .

Estimates vs Actuals

  • Wall Street consensus (S&P Global) for Q2 2021 EPS and revenue was unavailable at time of analysis due to data access limits; thus beat/miss versus estimates cannot be determined. S&P Global consensus comparison unavailable [GetEstimates error].

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD)FY 2021$80M–$90M (issued May 12, 2021) $90M–$100M (issued Aug 10, 2021) Raised
  • No guidance provided on margins, OpEx, OI&E, tax rate, segment-specific targets, or dividends in Q2 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2021 and FY2020)Current Period (Q2 2021)Trend
Supply chain & operationsEmphasized established supply chain, manufacturing footprint; proactive inventory to meet demand Mitigated supply chain impacts vs peers; economies of scale improved margin despite raw material inflation Strengthening
Electrification roadmapFirst EV loader expected in Q4; expansion to forklifts/excavators; U.S. assembly plans GEF-series forklifts shipping to U.S. in September; GEL-1800 in October; GEX-8000 in December; direct sales strategy Accelerating
Pricing & pass-throughFocused on ROI for EVs; comparable pricing to combustion; value proposition Absorbed short-term steel inflation; did not pass-through; forklift lithium pricing targeted comparable to lead-acid Supportive for demand
Distribution strategyPlanning U.S. assembly footprint and market entry Building direct sales channels; modest U.S. assembly sites (40k–60k sq ft); avoid traditional dealer model Defined
Regional interestGlobal clean energy tailwinds highlighted Strong inbound interest from Europe/Australia/Africa; North America focus first Broadening

Management Commentary

  • CEO: “We have once again achieved a record quarter with revenue generated of $28.2 million … and 42,046 transmissions sold … We are benefitting from strong demand … Our latest electric GEF-series lithium powered forklifts … With deliveries starting by September in the North America market we expect this to be additive to second half of 2021 revenue” .
  • CFO: “In the first half of 2021, we generated a total revenue of $52.8 million and net income of $5.6 million … Our gross margin was 20.2% … These strong financial results demonstrate our market leading position … In June, we successfully raised $7 million for the strategic execution of new electric vehicle products launched in the U.S.” .
  • CEO (call): Margin gains reflect economies of scale and adoption of integrated drivetrains; supply chain resilience allowed Greenland to deliver while peers struggled .
  • CEO (call on pricing): Company absorbed short-term steel cost spikes to support Tier-1 OEM relationships; prices normalizing .

Q&A Highlights

  • Market share vs market growth: Outperformance driven by supply chain execution and higher-margin integrated drivetrains adopted by existing Tier-1 customers; manufacturing efficiencies lifted gross margin .
  • Raw material inflation: Steel spikes seen as short-term; company did not pass increases to customers, prioritizing long-term relationships; normalization underway .
  • U.S. market entry and timeline: EV forklifts available in September; loader in October; excavator in December; “reasonable” sales for construction EVs expected Q2–Q3 2022 post assembly site launch .
  • Distribution model: Direct sales and modest assembly sites (40k–60k sq ft), not traditional dealers; working capital per site $3M–$5M plus $1M–$2M OpEx; exploring domestic sourcing to mitigate tariffs .
  • Pricing strategy and demand: Lithium forklift pricing targeted at ~$24k–$25k for 1.8–3.5T models—comparable to lead-acid—addressing market gap where incumbents price lithium near ~$70k; ROI/maintenance advantages expected to drive adoption .

Estimates Context

  • S&P Global consensus for Q2 2021 EPS and revenue was unavailable due to data access limitations at the time of analysis; we cannot determine beat/miss versus Street for the quarter [GetEstimates error].
  • Given the guidance raise to $90–$100M, consensus revenue and margin models may need upward revisions for FY2021; forklift deliveries in September and U.S. EV rollout could influence 2H volume/mix assumptions .

Key Takeaways for Investors

  • Momentum intact: Strong QoQ/YoY progression in revenue, operating income, and EPS with margin resilience despite input cost headwinds .
  • Guidance upgrade is a tangible catalyst for 2H: FY2021 raised to $90–$100M as North American forklift deliveries begin; watch order conversion and backlog updates .
  • Strategic pivot to EVs broadens TAM: GEL-1800 and GEX-8000 expand beyond transmissions; direct-sales model seeks to capture EV economics and avoid dealer disincentives .
  • Near-term watch items: Raw material normalization, EV pre-booking traction post demos, progress on first U.S. assembly site and domestic component sourcing (tariff mitigation) .
  • Execution edge: Supply chain reliability vs peers and economies of scale underpin margin; continued R&D investment supports differentiated product roadmap .
  • Risk considerations: Elevated OpEx/R&D as EV program scales; early U.S. demand validation needed; absence of pass-through pricing may pressure margins if input inflation persists .
  • Data gap: Street consensus unavailable; monitor upcoming disclosures for sell-side revisions and potential estimate momentum following guidance raise .