Smart Powerr Corp. (CREG) Bundle
Understanding Smart Powerr Corp. (CREG) Revenue Streams
Understanding Smart Powerr Corp's Revenue Streams
As of September 30, 2024, Smart Powerr Corp reported a total operating income of $0. The company has not generated any revenue from its contingent rental income or interest income on sales-type leases during the nine months ended September 30, 2024, nor in the comparable period in 2023.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown a consistent decline as the company reported $0 in revenue for both the nine months ended September 30, 2024, and the same period in 2023. This indicates a 0% growth rate, reflecting no change in revenue generation capabilities.
Contribution of Different Business Segments to Overall Revenue
Smart Powerr Corp currently has no reported revenue contributions from its business segments. The company has ceased operations related to power generating systems and is in the process of transforming into an energy storage integrated solution provider. Therefore, the contribution from various segments remains $0 for the periods analyzed.
Analysis of Significant Changes in Revenue Streams
There have been significant changes in revenue streams with a complete cessation of revenue generation from power generating systems. Previously, the company had engaged in sales-type leases related to energy recycling projects, but as of September 30, 2024, the company has reported $0 from these activities. This strategic pivot towards energy storage solutions marks a notable shift in operational focus.
| Period | Operating Income | Revenue Growth Rate | Net Loss |
|---|---|---|---|
| 9 Months Ended September 30, 2024 | $0 | 0% | $(952,285) |
| 9 Months Ended September 30, 2023 | $0 | 0% | $(518,069) |
In summary, the transition from traditional revenue streams to potential future income through energy storage solutions illustrates a critical juncture for Smart Powerr Corp, as it seeks to redefine its market presence and operational capabilities.
A Deep Dive into Smart Powerr Corp. (CREG) Profitability
A Deep Dive into Smart Power Corp's Profitability
Gross Profit Margin: The company reported a gross profit margin of 0% for the nine months ended September 30, 2024, and 0% for the same period in 2023, indicating no revenue generation from operations during these periods.
Operating Profit Margin: The operating profit margin was -100% for the nine months ended September 30, 2024, with operating expenses totaling $747,540 against revenue of $0. The same trend was observed in 2023 with an operating profit margin of -100%, where operating expenses were $606,105 with no revenue.
Net Profit Margin: The net profit margins for the nine months ended September 30, 2024, and 2023 were -150% and -81%, respectively. The company recorded a net loss of $952,285 in 2024 compared to a net loss of $518,069 in 2023.
Trends in Profitability Over Time
For the nine months ended September 30, the net loss increased by 83% from $518,069 in 2023 to $952,285 in 2024. The losses for the three months ended September 30 also rose from $180,723 in 2023 to $262,731 in 2024, marking a 45% increase.
Comparison of Profitability Ratios with Industry Averages
Industry averages for companies in the energy sector typically show a gross profit margin of approximately 20-30%, while operating margins can range from 10-15%. In contrast, the company has not generated any revenue, resulting in significantly lower profitability ratios:
| Metric | Smart Power Corp (2024) | Smart Power Corp (2023) | Industry Average |
|---|---|---|---|
| Gross Profit Margin | 0% | 0% | 20-30% |
| Operating Profit Margin | -100% | -100% | 10-15% |
| Net Profit Margin | -150% | -81% | 5-10% |
Analysis of Operational Efficiency
The company’s operational efficiency is notably poor, as evidenced by its inability to generate revenue. The total operating expenses for the nine months ended September 30, 2024, were $747,540, compared to $606,105 in 2023, reflecting a 23% increase in costs without corresponding revenue generation. The significant increase in general and administrative expenses from $606,105 in 2023 to $747,540 in 2024 highlights challenges in cost management.
Additionally, the company’s accumulated deficit reached $61,449,656 as of September 30, 2024, up from $60,497,371 at the end of 2023, indicating ongoing losses over time.
Overall, the company's profitability metrics indicate a challenging financial situation with no revenue and increasing losses, underscoring the need for strategic operational adjustments.
Debt vs. Equity: How Smart Powerr Corp. (CREG) Finances Its Growth
Debt vs. Equity: How Smart Powerr Corp. Finances Its Growth
Debt Levels:
As of September 30, 2024, the company's total liabilities were $27,416,730, which included both current and long-term debt. The current liabilities amounted to $24,003,537, while non-current liabilities stood at $3,413,193.
Debt-to-Equity Ratio:
The debt-to-equity ratio is a critical measurement for evaluating a company's financial leverage. As of September 30, 2024, the total stockholders’ equity was $110,237,873. Therefore, the debt-to-equity ratio can be calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Equity = $27,416,730 / $110,237,873 = 0.25.
This ratio is significantly lower than the industry average, which typically ranges between 0.5 and 1.5, indicating a conservative approach to leveraging debt.
Recent Debt Issuances and Credit Ratings:
In January 2024, the company received repayment of a short-term loan of $68.7 million, which was previously issued to Jinan Youkai Engineering Consulting Co., Ltd. This short-term loan was secured with a capital utilization fee of $14,119 per day for five days .
As of the latest available data, the company has not received a formal credit rating from major agencies, which may reflect its smaller size and emerging growth status.
Balancing Debt Financing and Equity Funding:
The company has been actively balancing its capital structure by converting long-term notes into common shares. In 2024, the company converted notes valued at $321,243 into common shares. This strategy helps reduce debt levels while increasing equity, which supports financial flexibility and growth potential.
| Financial Metric | Value (as of September 30, 2024) |
|---|---|
| Total Liabilities | $27,416,730 |
| Total Equity | $110,237,873 |
| Debt-to-Equity Ratio | 0.25 |
| Short-term Loan Received | $68.7 million |
| Long-term Notes Converted | $321,243 |
This data provides a snapshot of the company's financial health, particularly in terms of its debt and equity structure, as it navigates its growth trajectory in the energy sector.
Assessing Smart Powerr Corp. (CREG) Liquidity
Assessing Smart Powerr Corp's Liquidity
Current and Quick Ratios
As of September 30, 2024, the current ratio of the company is 5.73:1, indicating strong liquidity. The quick ratio, which excludes inventories from current assets, is calculated as follows:
Quick Ratio = (Current Assets - Inventories) / Current Liabilities. Given that there are no inventories reported, the quick ratio is also 5.73:1.
Analysis of Working Capital Trends
The working capital as of September 30, 2024 is $113.51 million. This represents a significant increase from the previous period, reflecting improved liquidity management.
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Current Assets | $137.51 million | $136.47 million |
| Current Liabilities | $24.00 million | $23.87 million |
| Working Capital | $113.51 million | $112.60 million |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow from operating activities shows a net outflow of $(330,673), a significant reduction compared to $(68,264,743) for the same period in 2023. The changes in cash flows are detailed below:
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Operating Activities | $(330,673) | $(68,264,743) |
| Investing Activities | $68,502,372 | $0 |
| Financing Activities | $0 | $0 |
Potential Liquidity Concerns or Strengths
The company holds cash and equivalents of $69.12 million as of September 30, 2024. This positions the company well against its current liabilities of $24.00 million. Additionally, the company has an accumulated deficit of $61.45 million, which could pose a risk if not managed carefully. However, the substantial cash reserves indicate a strong ability to meet short-term obligations.
Is Smart Powerr Corp. (CREG) Overvalued or Undervalued?
Valuation Analysis
To evaluate the financial health of the company, we will analyze its valuation metrics including Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is not applicable as the company reported a net loss of $952,285 for the nine months ended September 30, 2024, resulting in a basic and diluted net loss per share of $0.11.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the company's total stockholders' equity was $110,237,873, with 8,765,857 shares outstanding. This results in a book value per share of approximately $12.57. If the stock price is $10.00, the P/B ratio would be 0.80 (calculated as Stock Price / Book Value per Share).
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
Due to the absence of positive EBITDA, the EV/EBITDA ratio cannot be calculated. The company recorded zero operating income as of September 30, 2024.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated significantly. It started at approximately $5.00 and has shown a downward trend, reaching around $10.00.
Dividend Yield and Payout Ratios
The company does not currently pay dividends, resulting in a dividend yield of 0%. The payout ratio is also 0% due to the absence of earnings.
Analyst Consensus
Analysts have a mixed outlook on the stock, with a consensus rating of Hold. Some analysts suggest it may be undervalued based on its book value, while others caution due to the ongoing losses.
Summary of Key Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | 0.80 |
| EV/EBITDA Ratio | N/A |
| Stock Price | $10.00 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Smart Powerr Corp. (CREG)
Key Risks Facing Smart Powerr Corp.
Smart Powerr Corp. faces a variety of internal and external risks that significantly impact its financial health. These risks can be broadly categorized into industry competition, regulatory changes, and market conditions.
Industry Competition
The energy sector is highly competitive, with numerous players vying for market share. The company has reported challenges in maintaining its competitive edge, especially as it transitions into energy storage solutions. The pressure from established competitors and new entrants may affect pricing power and market penetration.
Regulatory Changes
As a company operating in the energy sector, regulatory compliance is paramount. Changes in regulations can impose additional costs or limit operational capabilities. For instance, the company's recent shift to energy storage solutions must align with environmental regulations, which may evolve unpredictably.
Market Conditions
The overall market conditions, including fluctuations in energy prices, can impact revenue. The company had a net loss of $952,285 for the nine months ended September 30, 2024, compared to a net loss of $518,069 for the same period in 2023. This deterioration underlines the sensitivity of its financial performance to external market factors.
Operational Risks
Operational risks are also a concern, particularly related to the company's current asset base. As of September 30, 2024, the company reported total current assets of $137,510,962. However, the company has disposed of all its systems and currently holds five power generating systems that are not producing electricity. This situation raises concerns about the efficiency and productivity of its remaining assets.
Financial Risks
Financially, the company has an accumulated deficit of $61,449,656 as of September 30, 2024. This significant deficit raises questions about the company's ability to sustain operations without additional funding. The company has indicated intentions to raise additional funds through private or public offerings, but the success of these efforts is uncertain.
Strategic Risks
Strategically, the company is in a transitional phase, moving towards energy storage solutions. This shift involves risks associated with execution and market acceptance. The total contractual obligation related to notes payable, including accrued interest, is $4,978,821. The ability to manage these obligations while investing in new projects is critical to the company's future success.
Mitigation Strategies
The company has outlined several mitigation strategies, including disciplined expansion into new markets and rigorous financial management to ensure liquidity. The forecast indicates sufficient cash flow to fund operations for the next 12 months. However, the execution of these strategies remains a key risk factor as the company navigates its transformation.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | High competition in the energy sector affecting pricing and market share. | Pressure on margins, potential revenue decline. |
| Regulatory Changes | Compliance with evolving energy regulations. | Increased costs, operational limitations. |
| Market Conditions | Fluctuations in energy prices impacting revenue. | Net loss of $952,285 for 2024. |
| Operational Risks | Holding non-productive assets. | Efficiency concerns, potential cash flow issues. |
| Financial Risks | Significant accumulated deficit. | Liquidity risks, need for additional funding. |
| Strategic Risks | Transitioning to energy storage solutions. | Execution risks, potential market acceptance challenges. |
Future Growth Prospects for Smart Powerr Corp. (CREG)
Future Growth Prospects for Smart Powerr Corp.
Analysis of Key Growth Drivers
Smart Powerr Corp. is actively pursuing opportunities to expand its business through various strategic initiatives. The company is transitioning into an energy storage integrated solution provider, with a focus on high-growth segments such as:
- Industrial and commercial complexes
- Large scale photovoltaic (PV) and wind power stations
- Remote islands without electricity
- Smart energy cities with multi-energy supplies
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, the company reported a net loss of $952,285, compared to a net loss of $518,069 for the same period in 2023. Despite these losses, the company has substantial growth potential, especially with its strategic investments and market expansion plans.
Strategic Initiatives or Partnerships Driving Future Growth
In June 2023, Smart Powerr Corp. entered a purchase agreement with Hubei Bangyu New Energy Technology Co., Ltd. for energy storage battery systems, with a total contract value of $82.3 million (RMB 595.0 million). The company made a prepayment of $66.8 million (RMB 476.0 million). This partnership is a critical component of its strategy to enhance its energy storage offerings.
Competitive Advantages Positioning the Company for Growth
The company maintains a competitive edge with significant cash reserves, totaling $69,117,942 as of September 30, 2024, up from $32,370 at the end of 2023. This liquidity positions the company favorably for further investments and operational scaling.
| Financial Metrics | 2024 | 2023 |
|---|---|---|
| Net Loss | $952,285 | $518,069 |
| Cash Reserves | $69,117,942 | $32,370 |
| Prepayment for Energy Storage Systems | $66.8 million | N/A |
| Total Contract Amount with Bangyu | $82.3 million | N/A |
Conclusion on Growth Opportunities
As Smart Powerr Corp. continues to develop its energy storage solutions and explore new markets, its strategic initiatives and partnerships are expected to drive future growth, despite the current financial losses. The company's strong liquidity and targeted market expansion efforts position it well for potential recovery and profitability in the coming years.
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Updated on 16 Nov 2024
Resources:
- Smart Powerr Corp. (CREG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Smart Powerr Corp. (CREG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Smart Powerr Corp. (CREG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.