Pingtan Marine Enterprise Ltd.

For the quarter, management did not state a top-line revenue figure in the prepared remarks, but said revenue decreased by $1.7 million versus Q2 2019 and sales volume reached 21.8 million kg, up 41% year over year. For the six months ended June 30, 2020, revenue was $45.8 million versus $43.9 million in the prior-year period, a decrease of $3.1 million or 7.1%; volume rose 46% to 35.3 million kg from 24.2 million kg. Gross margin was 9.2% in Q2 versus 36.4% a year ago, and 19.4% for the first half versus 30.4% last year. Q2 net loss attributable to owners was $1.6 million, or $0.02 per share, versus net income of $3.6 million, or $0.06 per share, a year earlier; first-half net income attributable to owners was $6.1 million, or $0.08 per share, versus $2.7 million, or $0.03 per share. Cash and cash equivalents were $3.4 million at June 30, 2020, down from $10.1 million at December 31, 2019. No explicit next-quarter or full-year financial guidance was provided; management instead said it believes Chinese seafood demand should return and grow in the second half of 2020 if the market recovery continues.

CEO Xinrong Zhuo framed the quarter around COVID-19’s uneven impact: China was recovering, but regional outbreaks and seafood-market concerns still pressured catch prices. He highlighted that volume was strong despite lower revenue, calling 21.8 million kg the highest quarterly sales volume in five years. Strategically, he emphasized fleet modernization and growth into new catch species, especially the 8,600 gross-ton Antarctica krill vessel, which he said should expand fishing areas and capacity.

CFO Liming Yung walked through the financial drivers in detail, pointing to lower average unit sales prices and a different sales mix as the main reasons revenue and gross margin declined. He cited Q2 gross margin of 9.2% versus 36.4% a year ago, and first-half gross margin of 19.4% versus 30.4%. He also noted selling expenses rose to $1.0 million in Q2 and $2.0 million for the first half, while G&A fell to $1.6 million in Q2 and $3.6 million for the first half, with the decline tied to lower compensation and related benefits and other G&A costs. On the balance sheet, he reported $3.4 million in cash and cash equivalents, $567.4 million in total assets, $183.1 million in current liabilities, and $160 million in shareholders’ equity as of June 30, 2020.

There was no substantive analyst Q&A in the transcript; after the prepared remarks, the host moved to the Q&A segment, but no questions were captured before the call ended. Management did, however, reiterate that it expects Chinese consumer demand for seafood to return and grow in the second half of 2020, and said it is planning expansion into seafood processing and direct-to-consumer channels online and offline.