Antelope Enterprise Holdings Limited

For the six months ended June 30, 2024, revenue was $43.5 million, down $1.1 million or 2.6% from $44.6 million in the same period of 2023. Gross profit was $3.5 million, down $3.3 million or 46.7% from $6.8 million, and gross margin was 8% versus 15.3% last year. Selling and distribution expenses were $3.1 million, down 55.9% from $7.1 million, while administrative expenses rose to $6.9 million from $5.6 million. Loss from continuing operations before taxation was $6.5 million, versus a $5.5 million loss a year ago, and loss per basic and fully diluted share from continuing operations was $0.96 versus $3.38. Cash and cash equivalents were $2.3 million at June 30, 2024, up from $0.6 million at December 31, 2023; working capital was $5.8 million, current ratio 2.6x, and shareholders’ equity was $18 million. The company did not give formal quantitative revenue or earnings guidance, but said it expects the new mid-tier client strategy to take time to scale and reiterated plans to launch an energy supply business in Texas later in 2024.

Will Zhang framed the quarter around a deliberate shift in strategy: after losing a few major clients, the company is broadening the base by targeting more mid-tier customers to reduce concentration risk. He said the livestreaming ecommerce business still has a large opportunity and emphasized the company’s SaaS matching platform as a differentiator. On the new energy initiative, he sounded upbeat and said the company is entering at the right time to serve the growing electricity needs of data centers and AI-related computing.

Edmund Hen walked through the first-half numbers in detail, highlighting the revenue decline to $43.5 million and the steep drop in gross profit to $3.5 million as the main financial issue. He noted that selling and distribution expenses fell sharply to $3.1 million due to lower advertising, promotion, and commission costs, while administrative expenses increased to $6.9 million because of stock compensation and professional services. On the balance sheet, he pointed to improved liquidity with $2.3 million in cash and cash equivalents, $5.8 million in working capital, a 2.6x current ratio, and $18 million of shareholders’ equity.

In Q&A, Steve Silver asked why the company decided to enter the energy supply field and how the model would be cost-effective and stable. Management answered that electricity demand is expected to rise materially because of large-scale computing facilities and AI, and said the company can serve this market by producing electricity close to natural gas production sites and customers, reducing transportation, compression, storage, and transmission costs. They also said they own four generators and plan to launch the business in the fourth quarter of this year, which was slightly later than the third-quarter timing mentioned in prepared remarks.