Microvast Holdings Inc (MVST) 2024 Q3 法說會逐字稿

Thank you for standing by. This is the conference operator. Welcome to the Microvast third-quarter 2024 earnings call. The conference is being recorded. (Operator Instructions) I would now like to turn the conference over to Microvast Investor Relations. Please go ahead.

謝謝你的支持。這是會議操作員。歡迎參加 Microvast 2024 年第三季財報電話會議。會議正在錄製中。（操作員指示）我現在想將會議轉交給微宏投資者關係部。請繼續。

Thank you, operator. And thank you, everyone, for joining our quarterly update today. With me on today's call are Mr. Yang Wu, Founder, Chairman and CEO; and Ms. Fariyal Khanbabi, CFO. Mr. Wu will start off with a high-level overview of the quarter before providing some operational and business updates. Ms. Khanbabi will then discuss our financial results in detail before handing it back to Mr. Wu to wrap up our 2024 outlook and closing remarks.

謝謝你，接線生。感謝大家今天加入我們的季度更新。與我一起參加今天電話會議的有創辦人、董事長兼執行長楊武先生；和財務長 Fariyal Khanbabi 女士。吳先生將首先對本季度進行總體概述，然後提供一些營運和業務更新。然後 Khanbabi 女士將詳細討論我們的財務業績，然後將其交還給吳先生以總結我們的 2024 年展望和結束語。

Ahead of this call, Microvast issued its third-quarter earnings press release, which can be found on the Investor Relations section of our website, ir.microvast.com. We have also posted a slide presentation to accompany management's prepared remarks.

在此次電話會議之前，Microvast 發布了第三季財報新聞稿，您可以在我們網站 ir.microvast.com 的投資者關係部分找到新聞稿。我們也發布了幻燈片演示文稿，以配合管理層準備好的演講。

As a reminder, please note that this call may include forward-looking statements. These statements are based on current expectations and assumptions and should not be relied upon as representative views for subsequent dates. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements due to new information or future results.

請注意，本次電話會議可能包含前瞻性陳述。這些陳述是基於目前的預期和假設，不應被視為後續日期的代表性觀點。我們不承擔因新資訊或未來結果而修改或公開發布這些前瞻性陳述的任何修改結果的義務。

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.

由於各種風險和不確定性，實際結果可能與預期有重大差異。有關重大風險和可能影響我們財務業績的其他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 in the tables included at the end of our press release.

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我們新聞稿末尾的表格中最具可比性的公認會計準則指標進行了調整。

After the conclusion of this call, a webcast replay will be available on the Investor Relations section of Microvast's website. And now I will turn the call over to Mr. Wu for opening remarks.

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廣播重播。現在請吳先生致開幕詞。

Thank you, and thank you, everyone, for joining today's call. Please turn to Slide 3, and I will cover the key messages from our third quarter. As we communicated earlier this year, we are keenly focused on improving both efficiency and profitability.

謝謝大家，也謝謝大家參加今天的電話會議。請轉到投影片 3，我將介紹第三季的關鍵資訊。正如我們今年早些時候所傳達的那樣，我們非常注重提高效率和盈利能力。

Throughout 2024, Microvast has been executing on the strategies of our solid business in EMEA and APAC while implementing strategic cost-cutting measures in the US, despite the challenging environment in the US.

儘管美國的環境充滿挑戰，2024 年，微宏一直在執行歐洲、中東和非洲和亞太地區穩健業務的策略，同時在美國實施戰略成本削減措施。

I'm excited to announce we have achieved profitability in the quarter with a net profit of $13.2 million and adjusted EBITDA of $29 million. This is a historical milestone for us. I want to thank the entire team here at Microvast that made it happen. This is an incredible achievement for both the company and the domestic lithium battery segment in the US

我很高興地宣布，我們在本季度實現了盈利，淨利潤為 1,320 萬美元，調整後 EBITDA 為 2,900 萬美元。這對我們來說是一個歷史里程碑。我要感謝 Microvast 的整個團隊，是他們讓這一切得以實現。這對公司和美國國內鋰電池產業來說都是一個令人難以置信的成就

The lithium battery manufacturing industry is a difficult business with a long-term investment horizon. We have learned much during our rapid growth period. Microvast has commercialized the products across our technology stack and industrialized the manufacturing process many times over.

鋰電池製造業是一項難度高、投資年限長的產業。在我們的快速成長期間，我們學到了很多。微宏已將我們的技術堆疊中的產品商業化，並多次實現製造過程的工業化。

We aim to continue innovating and focusing on our business strategy as we grow both in the US and globally. To reiterate to our shareholders what our business strategy included, I'd like to briefly touch on it.

隨著我們在美國和全球的發展，我們的目標是繼續創新並專注於我們的業務策略。為了向我們的股東重申我們的業務策略包括哪些內容，我想簡單地談談。

First and foremost, Microvast is a vertically integrated battery technology company. The core driver of our business is innovation. We remain focused on technology and product development. With many exciting products on the way, our newest products, including our industry-first overhaulable ME6 LFP ESS containers and silicon-enhanced cell technologies. We have also made material progress on our all solid-state battery.

首先，微宏是一家垂直整合的電池技術公司。我們業務的核心驅動力是創新。我們仍然專注於技術和產品開發。隨著許多令人興奮的產品即將推出，我們的最新產品包括業界首創的可檢修 ME6 LFP ESS 容器和矽增強電池技術。我們的全固態電池也取得了實質進展。

We are continually seeking to broaden our revenue stream through products and services that support the global energy transformation. To achieve our goals, we must also capture future market shares. Microvast continue to invest in commercialization of both current and future high-demand advanced products.

我們不斷尋求透過支持全球能源轉型的產品和服務來擴大我們的收入來源。為了實現我們的目標，我們還必須佔領未來的市場份額。Microvast 繼續投資當前和未來高需求先進產品的商業化。

With our focus on the product innovation and capturing market share, Microvast strives to achieve further growth. We continue to optimize our core business and aim to attain sustained profitability.

透過專注於產品創新和佔領市場份額，微宏致力於實現進一步的成長。我們持續優化核心業務，力爭持續獲利。

Now if you will please join me on slide 5. Microvast continues to be successful in expanding our commercial vehicle reach, particularly in EMEA. Highlights from the quarter include our successful unveiling of a new silicon-based cell technology at a premier electric mobility exhibition in Germany. This enhanced sales have improved energy density for ever-evolving performance requirements of our customers.

現在請跟我一起看投影片 5。Microvast 持續成功擴大我們的商用車業務範圍，特別是在歐洲、中東和非洲地區。本季的亮點包括我們在德國頂級電動車展覽會上成功推出了新型矽基電池技術。銷售量的增加提高了能量密度，並滿足客戶不斷變化的性能要求。

While we are very excited about the trajectory we are on, this quarter wasn't without its challenges. Global uncertainty around policy shifts in Europe and within the US has decelerated rollout of certain light commercial vehicle platforms. In addition, rapidly growing markets such as India and Thailand have prioritized LFP chemistries for their affordability with high performance.

雖然我們對目前的發展軌跡感到非常興奮，但本季也並非沒有挑戰。歐洲和美國政策變化的全球不確定性減緩了某些輕型商用車平台的推出。此外，印度和泰國等快速成長的市場已優先考慮 LFP 化學品，因為其價格實惠且性能優異。

Overall, in addition to being a historic quarter achieving profitability, the business posted record third quarter revenue with 27% growth year over year, delivering $101.4 million. We achieved this growth while maintaining a gross margin of 33.2%, a 10.9 point improvement year over year. This incredible growth comes largely from sales increase in EMEA. We once more saw triple-digit percentage growth of 212% for EMEA year over year.

總體而言，除了實現歷史性季度獲利外，該業務第三季營收創歷史新高，年增 27%，達到 1.014 億美元。我們在實現這一成長的同時保持了 33.2% 的毛利率，比去年同期提高了 10.9 個百分點。這種令人難以置信的成長主要來自歐洲、中東和非洲地區的銷售成長。我們再次看到 EMEA 年比成長 212%。

Now if you will join me on slide 6, we have some exciting new business developments in our commercial vehicle segment. Propel is a leading Indian industry mining, crushing, screening and construction company. Microvast will be fulfilling orders to power their mining and dump trucks.

現在，如果您願意跟我一起看第 6 張投影片，我們在商用車領域有一些令人興奮的新業務發展。Propel 是印度領先的工業採礦、破碎、篩分和建築公司。Microvast 將履行為其採礦和自卸卡車提供動力的訂單。

XCMG was founded in 1943 and has stood at the forefront of the construction and machinery industry in China. We are proud to partner with them and expect to start serial production of our battery packs for use in their construction equipment next year. And finally, LGMG is a major player in the mining and auxiliary equipment industry. Microvast will be supplying them with our battery packs, and we expect to see revenues by the end of the year.

徐工集團成立於1943年，一直站在中國工程機械產業的前列。我們很榮幸與他們合作，並預計明年開始大量生產我們的電池組，用於他們的建築設備。最後，LGMG 是採礦和輔助設備行業的主要參與者。微宏將為他們提供我們的電池組，我們預計在今年年底前看到收入。

This customer will utilize Gen 4 packs with both our 53.5 ampere-hour and 48 ampere-hour cell technologies. The heavy industry segment has increasingly adopted our high-performance cells for their applications.

該客戶將使用採用我們的 53.5 安培小時和 48 安培小時電池技術的第 4 代電池組。重工業領域越來越多地在其應用中採用我們的高性能電池。

We also continue to find success in adoption by hybrid and fuel cell OEMs as well as the agriculture segment. I would now like to turn the call over to Ms. Khanbabi to discuss our financials in more detail.

我們也繼續在混合動力和燃料電池原始設備製造商以及農業領域取得成功。我現在想將電話轉給 Khanbabi 女士，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'm going to start by walking you through our Q3 2024 financial performance, focusing on some key metrics that underscore our progress.

謝謝吳先生，也謝謝大家的收聽。首先，我將向您介紹我們 2024 年第三季的財務業績，並專注於一些強調我們進展的關鍵指標。

Starting with slide 8, we will review the core financial highlights for the quarter. As Mr. Mu mentioned, Q3 was a record quarter with revenue reaching $101.4 million, up 27% from $80.1 million in Q3 2023. This growth was fueled by strong EMEA sales for commercial vehicles driven by OEMs increasingly adopting our technologies.

從幻燈片 8 開始，我們將回顧本季的核心財務亮點。正如 Mu 先生所提到的，第三季營收達到創紀錄的 1.014 億美元，比 2023 年第三季的 8,010 萬美元成長 27%。這一增長得益於商用車在歐洲、中東和非洲地區的強勁銷售，而原始設備製造商越來越多地採用我們的技術。

Our gross margin improved this quarter to 33.2%, up from 22.3% in Q3 2023. Excluding noncash share-based compensation expenses, the adjusted gross margin rose to 33.9%, a 9.7 percentage point increase versus the prior year period. This increase in gross margin is due to a combination of factors, including better economies of scale through operational efficiencies, more favorable product mix, and sustained lower raw material prices.

本季我們的毛利率從 2023 年第三季的 22.3% 提高至 33.2%。剔除非現金股權激勵費用後，調整後毛利率升至33.9%，較上年同期成長9.7個百分點。毛利率的成長是多種因素共同作用的結果，包括營運效率提高帶來的規模經濟、更有利的產品組合以及原物料價格持續走低。

Adjusted EBITDA turned positive, reaching $29 million as we focus on achieving sustainable profitability. We reported a GAAP net profit of $13.2 million in Q3 2024 compared to a net loss of $26.2 million in Q3 2023. After adjusting for noncash items such as share-based compensation expenses and fair value changes of our warrant liability and convertible loans, adjusted net profit came to $16.8 million, a substantial improvement from an adjusted net loss of $10.3 million in Q3 2023.

由於我們專注於實現可持續盈利能力，調整後 EBITDA 轉正，達到 2,900 萬美元。我們報告 2024 年第三季的 GAAP 淨利潤為 1,320 萬美元，而 2023 年第三季的淨虧損為 2,620 萬美元。在對股票補償費用以及我們的認股權證負債和可轉換貸款的公允價值變動等非現金項目進行調整後，調整後淨利潤達到1,680 萬美元，比2023 年第三季調整後淨虧損1,030 萬美元有了大幅改善。

Turning to slide 9. We will review the rest of the P&L in more detail. Operating expenses reduced to $27.5 million in Q3 2024 compared to $44.7 million in Q3 2023, a 38% decrease from the prior year period. This reduction across G&A, R&D, and sales and marketing were largely due to reductions in share-based compensation and cost control measures we began implementing in May this year.

轉到投影片 9。我們將更詳細地審查損益表的其餘部分。2024 年第三季營運費用減少至 2,750 萬美元，而 2023 年第三季營運費用為 4,470 萬美元，比去年同期減少 38%。G＆A、研發以及銷售和行銷的減少主要是由於我們從今年 5 月開始實施的基於股權的薪酬和成本控制措施的減少。

After adjusting for noncash share-based compensation expenses, our adjusted operating expenses in Q3 2024 were $22 million compared to $30.3 million in Q3 2023, a decrease of $8.4 million. The impact of these adjustments 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.

調整非現金股份補償費用後，我們 2024 年第三季調整後的營運費用為 2,200 萬美元，比 2023 年第三季的 3,030 萬美元減少了 840 萬美元。這些調整以及這些非公認會計原則指標與最具可比性的公認會計原則指標的調節的影響包含在我們收益新聞稿末尾的表格中。

On slide 10, we show the geographic breakdown of our revenue mix for Q3 2024 compared to the prior year period. Our EMEA business grew by 212% year over year and accounted for 59% of our quarterly revenue, up from 24% a year ago, as we continue to grow our partnerships and key customers continue their vehicle ramps.

在投影片 10 上，我們展示了 2024 年第三季與去年同期相比的收入組合的地理分佈。隨著我們不斷發展合作夥伴關係以及主要客戶繼續增加車輛數量，我們的 EMEA 業務年增 212%，佔季度收入的 59%，高於一年前的 24%。

Please turn to slide 11, and we will briefly review our cash flow. Net loss for the nine-month period has impacted cash flow but has been substantially offset by noncash adjustments, including $30.3 million of share-based compensation and $68.8 million from impairments, write-downs and disposals.

請翻到投影片 11，我們將簡單回顧一下我們的現金流。這九個月期間的淨虧損影響了現金流，但已被非現金調整大幅抵消，其中包括 3,030 萬美元的股權激勵以及 6,880 萬美元的減損、減記和處置。

For operating cash flow in the nine-month period, we saw a net outflow of $3.3 million. We received positive adjustments from improvements in our receivables, while we've substantially reduced aged liabilities and expenses for an overall net negative adjustment.

對於這 9 個月期間的營運現金流，我們看到淨流出 330 萬美元。我們因應收帳款的改善而獲得了積極的調整，同時我們大幅減少了帳齡負債和費用，實現了整體淨負調整。

From investing activities, we saw a net outflow of $12 million for the nine-month period, primarily due to capital expenditures, partially offset by short-term investments. For financing cash flow in the nine-month period, we saw a net inflow of $46.6 million. Overall, combined with a negative impact from exchange rates of $4.6 million, we had an increase of cash of $26.8 million for the nine-month period, showing improved financial stability.

從投資活動來看，我們發現這 9 個月期間淨流出 1,200 萬美元，主要是因為資本支出，部分被短期投資抵銷。就前 9 個月期間的融資現金流而言，我們看到淨流入 4,660 萬美元。總體而言，加上匯率 460 萬美元的負面影響，我們在這 9 個月期間增加了 2,680 萬美元的現金，這表明財務穩定性有所改善。

We believe that our financial results demonstrate that we are building a profitable, resilient foundation with expanding market demand, especially in EMEA. Our focus on driving sustainable profitability, improving margins and achieving operational efficiencies continues to strengthen our position.

我們相信，我們的財務表現表明，我們正在憑藉不斷擴大的市場需求（尤其是在歐洲、中東和非洲地區）建立盈利、有彈性的基礎。我們專注於推動永續獲利能力、提高利潤率和實現營運效率，繼續鞏固我們的地位。

We are committed to executing our strategic vision, and we believe that as our results continue to unfold, the market will recognize the intrinsic value that Microvast brings to the energy storage and electric vehicle sectors. With that, I will hand it back over to Mr. Wu to go over our outlook for the remainder of 2024 and closing remarks.

我們致力於執行我們的策略願景，相信隨著我們業績的不斷展現，市場將會認識到微宏為儲能和電動車領域帶來的內在價值。接下來，我將把它交還給吳先生，以回顧我們對 2024 年剩餘時間的展望和結束語。

Thank you. Please turn to slide 13, which provides a summary outlook for the rest of the year. For the fourth quarter, we expect revenue to be in the range of $90 million to $95 million, which puts the full year anticipated revenue growth in the range of 15% to 18%.

謝謝。請參閱投影片 13，其中概述了今年剩餘時間的前景。對於第四季度，我們預計營收將在 9,000 萬美元至 9,500 萬美元之間，這使得全年預期營收成長在 15% 至 18% 之間。

We continue to strive for operational efficiencies, and we are maintaining our target gross margin of at least 25%. For our APAC business, we continue to target production capacity improvements at our Huzhou facility as well as progressing towards exciting products to add to our extensive product portfolio. We also anticipate that our high-growth EMEA business will achieve an 80% revenue increase year over year, and we are working to secure new strategic partners for both current and upcoming products.

我們繼續努力提高營運效率，並將毛利率維持在至少 25% 的目標。對於我們的亞太業務，我們繼續致力於提高湖州工廠的產能，並不斷開發令人興奮的產品，以添加到我們廣泛的產品組合中。我們也預計，我們高成長的 EMEA 業務將實現同比 80% 的收入成長，並且我們正在努力為當前和即將推出的產品尋找新的策略合作夥伴。

For the American segment, we are focused on expansion of our commercial vehicle footprint while securing future orders for our new ME6 LFP ESS platform. We are also looking into options for a full financing solution for our Clarksville facility.

對於美國市場，我們專注於擴大我們的商用車足跡，同時確保我們新的 ME6 LFP ESS 平台的未來訂單。我們也正在尋找為克拉克斯維爾工廠提供全面融資解決方案的選項。

I would also like to reiterate on the global level that our focus is on profitability through regional efficiency and growth. We are targeting sustained positive adjusted EBITDA contributions from our established business in EMEA and APAC. Consistent revenue growth and the ability to maintain a healthy gross margin profile is the key to improving our liquidity and providing a route to long-term profitability. To summarize, our full focus continues to be on product development, operational efficiencies, key customer growth, reducing liabilities, and strategic cost cutting.

我還想在全球層面重申，我們的重點是透過區域效率和成長來實現獲利。我們的目標是從我們在歐洲、中東和非洲和亞太地區的既定業務中獲得持續積極的調整後 EBITDA 貢獻。持續的收入成長和維持健康的毛利率狀況的能力是改善我們的流動性並提供長期獲利能力的關鍵。總而言之，我們的全部重點仍然是產品開發、營運效率、關鍵客戶成長、減少負債和策略成本削減。

Please join me on slide 14. I would like to take a moment to welcome new investors as well as reinforce who Microvast is as a company to our legacy stockholders. Microvast is a US company founded and headquartered still today in Texas, where I founded the company. We strive to be a trusted global provider of cutting-edge energy technology solutions.

請跟我一起看投影片 14。我想花點時間歡迎新投資者，並向我們的傳統股東強調 Microvast 作為一家公司的形象。Microvast 是一家在美國成立的公司，其總部至今仍位於德克薩斯州，我也是在那裡創立了該公司。我們致力於成為值得信賴的全球尖端能源技術解決方案提供者。

The company holds more than 775 patents that are either granted or pending. With our products currently powering equipment worldwide, we aspire to continue our groundbreaking product innovation across our extensive technology stack. And we aim to be steward of the electric energy revolution to create a cleaner and a more resilient planet for all our humanity.

該公司擁有超過 775 項已授予或正在申請的專利。我們的產品目前為全球設備提供動力，我們渴望在廣泛的技術堆疊中繼續進行突破性的產品創新。我們的目標是成為電能革命的管理者，為全人類創造一個更乾淨、更有彈性的星球。

At Microvast, our eyes remain firmly on the future of technology. We have recently announced our ME6, an overhaulable high-performance LFP-based ESS container. Our new container provides customers with an excellent value proposition in total cost of ownership and a system that is reliable across a spectrum of applications. This includes everything from solar and wind utility scale storage to powering the data center required for cloud storage or AI computation.

在微宏，我們的目光始終聚焦在科技的未來。我們最近發布了 ME6，這是一種可檢修、基於 LFP 的高效能 ESS 容器。我們的新容器為客戶提供了在總擁有成本方面卓越的價值主張以及在各種應用程式中可靠的系統。這包括從太陽能和風能公用事業規模儲存到為雲端儲存或人工智慧運算所需的資料中心供電的一切。

Additionally, at IAA 2024 in Germany, we unveiled multiple new cell technologies, leveraging silicon that provide improved energy density for high-performance applications. Thank you all for attending our historical quarter update. We look forward to updating you on our progress again next quarter.

此外，在德國 IAA 2024 上，我們推出了多種新型電池技術，利用矽為高效能應用提供更高的能量密度。感謝大家參加我們的歷史季度更新。我們期待下個季度再次向您通報我們的進展。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。