SHANGHAI, Oct. 8, 2024 /PRNewswire/ -- U Power Limited (NASDAQ:UCAR) (the "Company" or "U Power"), a vehicle sourcing services provider with a vision to becoming a comprehensive EV battery power solution provider in China, today announced its financial results for the six months ended June 30, 2024.

Mr. Jia Li, Chief Executive Officer and Chairman of the Board of Directors of the Company, commented, "In the first half of fiscal year 2024, our business achieved 595.7% year-over-year revenue growth to reach RMB13.2 million. This growth stemmed from increased orders from both existing clients and new customers for our battery-swapping stations as the economy continued to gradually recover following the COVID-19 pandemic. We've been successful in transforming our vehicle sourcing business to provide EV battery power solutions in China. We believe that this shift has enhanced our competitiveness, and we expect it to expand our future revenue growth potential."

Ms. Bingyi Zhao, Chief Financial Officer of the Company, added, "Our financial results for the first half of fiscal year 2024 demonstrate our commitment to responsible financial management while simultaneously making strategic investments for our future growth. Our R&D expenses decreased as we have successfully completed several key projects, and we remain committed to innovation and have strategically allocated resources to new and high-potential research initiatives. Our improved credit management practices have yielded positive results, as we generated an expected gain on credit of RMB0.5 million in the first half, compared to a loss in the same period last year. We believe we are well-positioned with the necessary working capital and strong foundation to support our growth plans, including the launch of operations in multiple international markets, and we are confident in the current financial state of the business."

First Half of 2024 Financial Results

Revenues

Total revenues increased by 595.7% year over year to RMB13.2 million (US$1.8 million) in the first half of 2024.

Product sales revenues were RMB12.4 million (US$1.7 million) in the first half of 2024, compared to nil in the same period of 2023, representing 93.9% of total net revenues. This was a result of the Company's ability to sell more battery stations as the economy gradually recovered from the impact of COVID-19 in 2023.
Sourcing services revenues were RMB0.1 million (US$10,000) in the first half of 2024, compared to RMB1.4 million in the same period of 2023, representing 0.6% of total net revenues. The decrease was a result of the company's shift in focus towards charging- and swapping-related products.
Battery-swapping services revenues were RMB0.7 million (US$0.1 million) in the first half of 2024, compared to RMB0.5 million in the same period of 2023, representing 5.5% of total net revenues. The increase was primarily driven by the Company's operation of a second battery-swapping station beginning in March 2023, which remained operational through the reporting period.

Cost of revenues, gross profit and margin

Total cost of revenues increased 1,893.6% year over year to RMB11.9 million (US$1.6 million) for the first half of 2024, primarily driven by significant revenue growth and strategic shifts in the supply chain. This increase was primarily due to the increased cost of product sales of battery swapping stations.

Total gross profit decreased 0.8% year over year to RMB1.3 million (US$0.2 million) for the first half of 2024, representing a gross margin of 9.8%.

Operating expenses

Total operating expenses were RMB27.7 million (US$3.8 million) for the first half of 2024, representing an increase of 26.8% from the same period last year.

Sales and marketing expenses were RMB1.5 million (US$0.2 million) in the first half of 2024, compared to RMB1.0 million in the same period of last year, representing an increase of 46.5%. This increase is primarily due to the increase in marketing expenses for selling battery swapping stations.
General and administrative expenses were RMB26.2 million (US$3.6 million) in the first half of 2024, compared to RMB16.8 million in the same period of last year, representing an increase of 55.8%, primarily driven by an increase in audit costs and other professional service costs.
Research and development expenses were RMB0.6 million (US$0.1 million) in the first half of 2024, compared to RMB1.9 million in the same period of last year, representing a decrease of 70.4%, primarily due to the decreased UOTTA technology innovation activities related to research and development programs.
Expected gain/loss on credit resulted in a gain of RMB0.5 million (US$70,000) in the first half of 2024, compared to a loss of RMB2.1 million in the same period of last year. The decrease was primarily due to the decreased impact of potential uncollectible amounts for advances to suppliers and other current assets, and reflects improved credit management practices and a stronger collection process.

Net loss

Net loss was RMB26.5 million (US$3.6 million) in the first half of 2024, compared with RMB7.2 million in the same period of last year.

Loss per share

Basic and diluted loss per share were both RMB7.42 (US$1.02) in the first half of 2024, compared with basic and diluted loss per share of RMB6.88 in the same period of last year.

Liquidity

As of June 30, 2024, the Company had cash and cash equivalents and restricted cash of RMB40.5 million (US$5.6 million), compared with RMB36.2 million as of December 31, 2023.

Business Developments

On August 5, 2024, the Company announced that it signed a Memorandum of Understanding with Velo Labs Technology Ltd., a global fintech company, to establish a battery infrastructure investment ecosystem in Thailand. This collaboration aims to accelerate the development of battery bank operations within the UOTTA battery-swapping ecosystem.

On July 3, 2024, the Company announced that it had signed a Memorandum of Understanding ("MoU") with Pattaya AI Terminal Co., Ltd. to jointly drive the strategic development of green logistics and electric vehicle ("EV") infrastructure in Thailand.

On June 5, 2024, the Company announced that its UOTTA technology and battery swapping station model is to be adopted in a strategic collaboration between UNEX EV B.V. ("UNEX") and Associação Nacional dos Transportes Rodoviários em Automóveis Ligeiros ("ANTRAL"). ANTRAL is an association of companies in Portugal, representing public passenger road transport companies operating light vehicles designated as taxis. Through their collaboration, UNEX and ANTRAL aim to significantly reduce greenhouse gas emissions in the transport sector by 2030, in line with the European Union's decarbonization targets and Portugal's regulatory requirements for taxi vehicles.

Exchange Rate Information

This announcement contains translations of certain Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from Renminbi to U.S. dollars were made at the rate of RMB7.2672 to US$1.00, the exchange rate on June 30, 2024, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on June 30, 2024. The Company makes no representation that the Renminbi or U.S. dollars amounts referred to could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

Safe Harbor Statements

This press release may contain "forward-looking statements". Forward-looking statements reflect the Company's current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "could," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "propose," "potential," "continue" or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.

About U Power Limited

U Power Limited is a vehicle sourcing services provider, with a vision to becoming an EV market player primarily focused on its proprietary battery-swapping technology, or UOTTA technology, which is an intelligent modular battery-swapping technology designed to provide a comprehensive battery power solution for EVs. Since its operation in 2013, the Company has established a vehicle sourcing network in China's lower-tier cities. The Company has developed two types of battery-swapping stations for compatible EVs and is operating one manufacturing factory in Zibo City, Shandong Province, China. For more information, please visit the Company's website: http://ir.upincar.com/.

Contact

U Power Limited

Investor Relations Department

Email: ir@upincar.com

Robin Yang, Partner

ICR, LLC

Email: UPower.IR@icrinc.com

Phone: +1 (212) 475-0415

U Power Limited
Consolidated Income Statement

		For the six months ended Jun 30,	For the six months ended Jun 30,	For the six months ended Jun 30,
		2023	2024	2024
		(unaudited)	(unaudited)	(unaudited)
		RMB'000	RMB'000	USD'000
	Net revenues
	Sourcing services	1,435	75	10
	Product sales	-	12,389	1,705
	Battery-swapping service	461	726	100
	Total net revenues	1,896	13,190	1,815

	Cost of revenues	(597)	(11,902)	(1,638)

	Gross profit	1,299	1,288	177

	Sales and marketing expenses	(1,012)	(1,483)	(204)
	General and administrative expenses	(16,792)	(26,157)	(3,599)
	Research and development expenses	(1,941)	(575)	(79)
	Expected credit losses	(2,086)	531	73
	Total operating expenses	(21,831)	(27,684)	(3,809)

	Operating loss	(20,532)	(26,396)	(3,632)

	Interest income	31	7	1
	Interest expenses	(497)	(877)	(121)
	Other income	16,145	1,435	197
	Other expenses	(981)	(685)	(94)
	Loss before income taxes	(5,834)	(26,516)	(3,649)

	Income tax expense	(1,344)	-	-

	Net loss	(7,178)	(26,516)	(3,649)
	Less: Net loss attributable to non-controlling interests	(3,711)	(2,991)	(412)
	Net loss attributable to the Company's shareholders and total comprehensive loss	(3,467)	(23,525)	(3,237)

	*Loss per share*
	Ordinary shares-basic and diluted	(6.88)	(7.42)	(1.02)

	*Weighted average shares* *outstanding used in* *calculating basic and* *diluted loss per share*
	Ordinary shares-basic and diluted	504,167	3,168,544	3,168,544

U Power Limited
Consolidated Balance Sheet


	Jun 30,2024	Jun 30,2024	Dec 31,2023
	(unaudited)	(unaudited)	(audited)
	RMB'000	USD'000	RMB'000
Assets
*Current assets*
Cash and cash equivalents	39,615	5,451	1,927
Restricted cash	900	124	34,312
Accounts receivable	18,553	2,553	15,748
Inventories	5,990	824	5,439
Advance to suppliers	11,251	1,548	10,816
Other current assets	75,966	10,454	94,813
Amount due from related parties	406	56	142
*Total current assets*	152,681	21,010	163,197

*Non-current assets*
Property and equipment, net	9,506	1,308	11,764
Intangible assets, net	167	23	201
Operating lease right-of-use assets, net	18,855	2,595	21,656
Long-term investments	143,912	19,803	123,367
Refundable deposit for investment	58,953	8,112	72,774
Deferred tax assets	-	-	-
Other non-current assets	36,865	5,073	36,029
*Total non-current assets*	268,258	36,914	265,791
Total assets	420,939	57,924	428,988

Equities and liabilities
Liabilities
*Current liabilities*
Short-term bank borrowing	5,000	688	5,000
Current portion of long-term borrowing	9,000	1,238	9,500
Accounts payable	18,134	2,495	10,231
Accrued expenses and other liabilities	29,085	4,003	35,231
Income tax payables	5,200	716	5,201
Advances from customers	1,299	179	2,537
Operating lease liabilities-current	1,811	249	1,750
Amount due to related parties	291	40	5,431
*Total current liabilities*	69,820	9,608	74,881

*Non-current liabilities*
Operating lease liabilities-non-current	5,054	695	5,980
*Total non-current liabilities*	5,054	695	5,980
*Total liabilities*	74,874	10,303	80,861
Commitments and contingencies	-	-	3,507
Equities
Ordinary shares (US$0.0000001 par value, 500,000,000,000 shares authorized; 1,243,140 and 3,168,544 issued and outstanding as of December 31, 2023 and June 30, 2024, respectively)	-	-	-
Additional paid-in capital	507,807	69,877	479,400
Translation reserve	-	-	446
Accumulated deficit	(196,701)	(27,067)	(173,176)
Total equities for controlling shareholders	311,106	42,810	306,670
Non-controlling interests	34,959	4,811	37,950
*Total equities*	346,065	47,621	344,620
Total equities and liabilities	420,939	57,924	428,988

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SOURCE U Power Limited