Microvast Holdings Inc (MVST) 2024 Q2 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Microvast second quarter 2024 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded.

謝謝你的支持。這是會議操作員。歡迎參加 Microvast 2024 年第二季財報電話會議。提醒一下，所有與會者都處於僅聽模式，並且正在錄製會議。

I would now like to turn the conference over to Mr. Yaser Ali, Chief Financial Officer of Microvast Holdings. Please go ahead.

我現在請微宏控股財務長 Yaser Ali 先生主持會議。請繼續。

Thank you, operator, and thank you, everyone, for joining us today. Joining me on today's call is Mr. Yang Wu, Founder, Chairman and CEO of Microvast Holdings. Mr. Wu will start off with a high-level overview of the quarter before providing some operational update. I will then discuss our financials in more detail before handing it back to Mr. Wu.

謝謝運營商，也謝謝大家今天加入我們。參加今天電話會議的是微宏控股創辦人、董事長兼執行長楊武先生。吳先生將首先對本季度進行總體概述，然後提供一些營運方面的最新情況。然後我將更詳細地討論我們的財務狀況，然後將其交還給吳先生。

To wrap up with our second quarter 2024 outlook ahead of this call, Microvast issued its second quarter earnings press release, which can be found on the Investor Relations section of the company's website, ir.microvast.com.

為了在這次電話會議之前總結我們對 2024 年第二季度的展望，Microvast 發布了第二季度收益新聞稿，該新聞稿可以在該公司網站 ir.microvast.com 的投資者關係部分找到。

In addition, we have posted a slide presentation to the company's website to accompany management's prepared remarks. As a reminder, please note that statements made in this call may include forward-looking statements based on current expectations and assumptions, they should not be relied upon as representative our views for a subsequent date, and we undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements due to new information or future events. Actual results may differ materially from expectations due to a variety of risks and uncertainties for more information on material risks and other important factors that could affect our financial results, please refer to our filings with the SEC.

此外，我們還在公司網站上發布了幻燈片演示文稿，以配合管理層準備好的講話。提醒一下，請注意，本次電話會議中的陳述可能包括基於當前預期和假設的前瞻性陳述，不應將其視為代表我們隨後日期的觀點，並且我們不承擔修改或公開發布的義務由於新資訊或未來事件而對這些前瞻性陳述進行任何修改的結果。由於各種風險和不確定性，實際結果可能與預期存在重大差異，有關重大風險和其他可能影響我們財務業績的重要因素的更多信息，請參閱我們向 SEC 提交的文件。

We may also discuss non-GAAP financial measures during this call. These measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. These non-GAAP measures have been reconciled to their most comparable GAAP metrics and the tables included at the end of our press release. After the conclusion of this call, a webcast replay will be available on the Investor Relations section of Microvast website.

我們也可能在本次電話會議中討論非公認會計準則財務指標。這些措施應作為公認會計準則結果的補充而非替代或孤立考慮。這些非公認會計準則指標已與最具可比性的公認會計準則指標以及我們新聞稿末尾包含的表格進行了調整。本次電話會議結束後，Microvast 網站的投資者關係部分將提供網路直播重播。

And now I will turn the call over to Mr. Wu for opening remarks.

現在請吳先生致開幕詞。

Thank you, and thank you, everyone, for joining today's call.

謝謝大家，也謝謝大家參加今天的電話會議。

Please turn to slide 3. As I cover a few highlights from our second quarter. The business posted a record second quarter revenue with 12% growth year over year in Q2 2024, delivering revenue of $83.7 million. We achieved this growth while maintaining a gross margin of 32.5% at 17.2% improvement year over year. This incredible growth comes largely from sales increases in EMEA business year over year, we saw triple-digit percentage growth of 401% for EMEA.

請翻到幻燈片 3。我將介紹第二季的一些亮點。該業務第二季營收創歷史新高，2024 年第二季年增 12%，營收達 8,370 萬美元。我們實現了這一成長，同時維持了 32.5% 的毛利率，年增了 17.2%。這種令人難以置信的成長主要來自 EMEA 業務的銷售額逐年成長，我們看到 EMEA 的三位數百分比成長為 401%。

Please join me on slide 5. The company was successful in further expanding its commercial vehicle footprint. We have entered into a strategic partnership with Evoy, a Norwegian pioneer in electric boat motor system. We have begun to tap into the Korean market and have secured a $40 million order from a Korean e-bus customer.

請跟我一起看投影片 5。該公司成功進一步擴大其商用車足跡。我們與挪威電動船電機系統先驅 Evoy 建立了戰略合作夥伴關係。我們已經開始進軍韓國市場，並獲得了韓國電動巴士客戶4000萬美元的訂單。

We closed the second quarter with a backlog of $278.6 million and we continue to strive for operational efficiency. The company posted significant improvements to adjusted gross margin at a 34.3%, a 17 percentage point increase year over year. The company posted yet another banner quarter, and we expect continued growth and successes. So this also come with challenges in addition to decelerated rollout of light commercial vehicle platforms in European market we experienced delay in CV customer deliveries pushed into second half of this year.

第二季結束時，我們的積壓金額為 2.786 億美元，我們將繼續努力提高營運效率。該公司調整後毛利率顯著改善，達到 34.3%，年增 17 個百分點。該公司又發布了一個出色的季度業績，我們預計將繼續成長並取得成功。因此，除了歐洲市場輕型商用車平台的推出減速之外，這也帶來了挑戰，我們的商用車客戶交付延遲到了今年下半年。

Turning to slide 6. We have some exciting new customers globally in various commercial vehicle segments. These customers will utilize Gen 4 packs and MV-I pack with our 53 point-amp-power and a 48 point-amp-power cell technology. While we aren't quite ready to announce the projects publicly, we have made significant progress with the customers on product ramp-up and prototype development. Additionally, we are excited to be working with Evoy on e-boat motor systems.

轉到投影片 6。我們在全球各個商用車領域擁有一些令人興奮的新客戶。這些客戶將使用採用我們的 53 點安培電源和 48 點安培電源電池技術的 Gen 4 電池組和 MV-I 電池組。雖然我們還沒有準備好公開宣布這些項目，但我們已經與客戶在產品升級和原型開發方面取得了重大進展。此外，我們很高興與 Evoy 合作開發電動船電機系統。

I would now like to turn the call over to Mr. Ali to discuss our financials in more detail.

我現在想把電話轉給阿里先生，更詳細地討論我們的財務狀況。

Thank you, Mr. Wu, and thank you, everyone, for tuning in. I'll spend the next few minutes discussing our Q2 2024 financial results.

謝謝吳先生，也謝謝大家的收聽。我將在接下來的幾分鐘內討論我們 2024 年第二季的財務表現。

Please turn to slide 8, and I will summarize the main line items from our Q2 P&L. We booked a record second quarter with Q2 revenue of $83.7 million, an increase of 12% from $75 million in Q2 2023. This growth was driven primarily by strong sales demand in EMEA markets for commercial vehicles as OEMs continue to adopt our technologies.

請翻到投影片 8，我將總結第二季損益表中的主要項目。我們第二季的營收創歷史新高，達到 8,370 萬美元，比 2023 年第二季的 7,500 萬美元成長 12%。這一成長主要是由於原始設備製造商繼續採用我們的技術，歐洲、中東和非洲市場對商用車的強勁銷售需求所推動的。

Our gross margin improved to 32.5% in Q2 2024 compared to 15.3% in Q2 2023. After adjusting for non-cash settled share-based compensation expense and cost of sales, adjusted gross margin increased to 34.3% in Q2 2024 compared to 17.3% in Q2 2023. That's a 17 percentage point improvement. This increase in gross margin was due to a combination of factors, including better economies of scale through improving utilization, more favorable product mix and lower raw material prices.

我們的毛利率在 2024 年第二季提高至 32.5%，而 2023 年第二季為 15.3%。在調整非現金結算的股權激勵費用和銷售成本後，2024 年第二季調整後毛利率增加至 34.3%，而 2023 年第二季為 17.3%。提高了 17 個百分點。毛利率的成長歸因於多種因素，包括透過提高利用率來實現更好的規模經濟、更有利的產品組合和更低的原物料價格。

Operating expenses were $103.6 million in Q2 2024 compared to $39 million in Q2 2023, an increase of 166% from the prior year period. This increase in operating expense is mainly due to the impairment loss of the long-lived assets of $64.9 million, $64.8 million of which was for impairment losses in the US as we decided to cease use of certain buildings and facilities under our strategic shift towards LFP technology in the US.

2024 年第二季的營運費用為 1.036 億美元，而 2023 年第二季的營運費用為 3,900 萬美元，比去年同期成長 166%。營運費用的增加主要是由於長期資產減損損失 6,490 萬美元，其中 6,480 萬美元是美國的減損損失，因為我們決定在向 LFP 的戰略轉變下停止使用某些建築物和設施技術在美國。

Without adjustment for impairment loss, our operating expense would have been $38.7 million in Q2 2024. After adjusting for non-cash SBC expense in SG&A, our adjusted operating expense in Q2 2024 were$ 92.9 million compared to $22.7 million in Q2 2023, an increase of $70.2 million, mainly due to the impairment loss mentioned just now.

如果不調整減損損失，我們 2024 年第二季的營運費用將為 3,870 萬美元。在對SG&A 中的非現金SBC 費用進行調整後，我們2024 年第二季調整後的營運費用為9,290 萬美元，比2023 年第二季的2,270 萬美元增加了7,020 萬美元，主要是因為剛才提到的減損損失。

GAAP net loss was $78.4 million in Q2 2024 compared to net loss of $26.1 million in Q2 2023. After adjusting for noncash SBC expense and changes in fair value of our warrant liability and convertible loan was shareholder, adjusted net loss was $64.7 million in Q2 2024 compared to an adjusted net loss of $8.3 million in Q2 2023. The impact of these adjustments is shown in slide 19 and reconciliations of these non-GAAP metrics to the most comparable GAAP metrics are included in the tables at the end of our earnings press release.

2024 年第二季的 GAAP 淨虧損為 7,840 萬美元，而 2023 年第二季的淨虧損為 2,610 萬美元。在對非現金SBC 費用以及我們的認股權證負債和股東可轉換貸款的公允價值變化進行調整後，2024 年第二季調整後淨虧損為6,470 萬美元，而2023 年第二季調整後淨虧損為830 萬美元。這些調整的影響如投影片 19 所示，這些非 GAAP 指標與最具可比性的 GAAP 指標的調整結果包含在我們收益新聞稿末尾的表格中。

Slide 10 shows the geographic breakdown of our revenue for Q2 2024 compared to the prior year period. As you can see, we booked outstanding sales increases. Our EMEA business was up by 401% year over year and accounted for 55% of our revenue, up from 13% a year ago as key customers began their vehicle ramps.

投影片 10 顯示了我們 2024 年第二季與去年同期相比營收的地理分佈。正如您所看到的，我們實現了出色的銷售成長。隨著主要客戶開始增產，我們的 EMEA 業務年增 401%，占我們營收的 55%，高於一年前的 13%。

And with that, I will turn it back over to Mr. Wu to briefly go over our outlook for the third quarter.

接下來，我將把它轉回給吳先生，簡要回顧一下我們對第三季度的展望。

Thank you.

謝謝。

Please turn to slide 12, which provide a summary outlook for upcoming months. For the third quarter, we expect revenue to be in the range of $85 million to $90 million, up 9% from Q3 a year ago at the midpoint. As anticipated, growth is primarily expected to be generated through increased deliveries to our A-Pac and EMEA commercial vehicle customers. We continue to strive for operational efficiencies, and we are maintaining our target gross margin of 25%. For APAC, we will be delivering 21 amp power sales from our wholesale facility. We plan to do this while we are also targeting growth in Southeast Asia and continued R&D progress on new upcoming products.

請參閱投影片 12，其中概述了未來幾個月的前景。對於第三季度，我們預計營收將在 8,500 萬美元至 9,000 萬美元之間，比去年第三季的中點成長 9%。正如預期的那樣，成長預計將主要透過增加向亞太地區和歐洲、中東和非洲商用車客戶的交付量來實現。我們持續努力提高營運效率，並維持 25% 的毛利率目標。對於亞太地區，我們將從我們的批發工廠提供 21 安培的電力銷售。我們計劃這樣做的同時，我們也瞄準了東南亞的成長，並繼續對即將推出的新產品進行研發。

In EMEA, we anticipated Q3 2024 revenue to grow more than 100% year over year and expect to ramp out of the Series deliveries to the European commercial vehicle OEMs for the Americas. We continue to focus on financing solutions to companies across will while exploring new commercial vehicle markets in the Americas.

在歐洲、中東和非洲地區，我們預計 2024 年第三季的營收將年增 100% 以上，並預計向美洲的歐洲商用車 OEM 供應該系列產品。我們繼續專注於為不同意願的公司提供融資解決方案，同時探索美洲新的商用車市場。

Turning to slide 13. We are excited to launch our new battery technology, the 565 amp-hour LFP cell. This is the newest product line in our extensive battery portfolio. This 565 amp-hour LFP cell provides a host of specifications, designed to meet the needs of renewable energy customers, including lower cost, enhanced reliability and a longer lifespan. Our domestically produced LFP batteries are expected to qualify for IRA Section 45X, enhancing their economic attractiveness for Microvast and our customers.

轉到投影片 13。我們很高興推出新的電池技術，即 565 安培小時 LFP 電池。這是我們廣泛的電池產品組合中的最新產品線。這款 565 安培小時 LFP 電池提供多種規格，旨在滿足再生能源客戶的需求，包括更低的成本、更高的可靠性和更長的使用壽命。我們國產的磷酸鐵鋰電池預計將符合 IRA 第 45X 條的要求，從而增強其對 Microvast 和我們的客戶的經濟吸引力。

Please join me on slide 14, where you can see our new LFP-based ME6 energy storage solution. This new product offers a compelling combination of benefits, including up to 30-year lifespan with Microvast's new overhaulable battery design, boasting a high-energy density offering a six megawatt hour in a compact 21-foot container, high efficiency and optimize the total cost of ownership, with a robust design. We are excited to work to bring this product to market.

請跟我一起觀看投影片 14，您可以在其中看到我們基於 LFP 的全新 ME6 能源儲存解決方案。這款新產品提供了引人注目的優勢組合，包括採用Microvast 全新可檢修電池設計，使用壽命長達30 年，擁有高能量密度，可在緊湊的21 英尺集裝箱中提供6 兆瓦時的電力，效率高，並優化了總成本所有權，具有穩健的設計。我們很高興能夠將該產品推向市場。

Thank you all for joining us today. We look forward to updating you on our progress again next quarter.

感謝大家今天加入我們。我們期待下個季度再次向您通報我們的進展。