Cenntro Electric Group Limited

For the first half of 2022, net revenue was $5 million, up 105% year over year, driven by 337 electric commercial vehicles sold, up 23%, and a higher average selling price from $7,354 to $14,400. Gross profit was $0.53 million, up 18%, while gross margin fell to 10.6% from 18.3% a year ago. Operating expenses were $24.7 million versus $5 million last year, net loss was $23.1 million versus $4.5 million, and adjusted EBITDA was negative $12.9 million versus negative $3 million. Cash and cash equivalents were $183 million as of June 30, 2022, versus $2 million a year earlier. The company did not give formal next-quarter or full-year financial guidance, but it said initial deliveries of LS 100 and LS 260 are scheduled for September 2022, EPA certification for LS 400 is expected by the end of September 2022, and trial production at Cennatic is expected to begin in the first half of 2023.

Peter Wang framed the quarter as evidence that Cenntro is expanding despite supply chain and logistics challenges. He emphasized product diversification, with new launches in Europe and North America, EU type approvals for LS 100 and LS 260, and progress on LS 400 in the U.S. He also highlighted the creation of Cennatic Power to make in-house lithium batteries as a strategic move to reduce dependence on China, lower costs, and improve supply security. His tone was constructive and forward-looking, stressing that the company is building production, distribution, and service infrastructure for long-term growth.

Edmond Cheng focused on the financial benefits of higher sales volume and improved product mix, noting ASP rose from $7,354 to $14,400, helped by 132 LS 200 units. He explained that gross margin compressed to 10.6% from 18.3% because of inflationary pressure on batteries and shipping, with a 40-foot container to Hamburg or New York peaking at $20,000 for the first half before easing to $5,000 in August. He also flagged operating expense growth to $24.7 million, including $8.3 million of one-time costs, and said the company is being prudent with spending and working capital while keeping cash and cash equivalents at $183 million.

There was no analyst Q&A, as no questions were asked after the prepared remarks. The only open issues discussed were management’s concerns about supply chain disruptions, shipping costs, and rising battery input costs, along with efforts to contain legal, compliance, and headcount-related expenses. Management answered these concerns by pointing to in-house battery manufacturing plans, direct B2B distribution, and a more measured pace of hiring after key positions were filled.