Intensifying competition, falling prices push Zhida Technology to wider loss

Electric vehicle charging equipment maker Shanghai Zhida Technology Development Co. Ltd. (2650.HK) said on Monday that its revenue for the six months through June fell 13.3% year-on-year to 340 million yuan ($50 million). Its net loss widened to 117 million yuan from 30.01 million yuan a year earlier, while its gross margin fell sharply to 7.7% from 19.2%.

The company attributed the weaker performance to intensifying competition and generally lower average selling prices in the domestic market, which drove revenue from China down to 239 million yuan from 334 million yuan a year earlier. Meanwhile, selling and marketing expenses for the six-month period rose 35.4% to 52.8 million yuan from 39 million yuan, while general and administrative expenses increased 36.7% to 43.2 million yuan, further pressuring Zhida’s profitability.

The increase in selling and marketing expenses was mainly driven by advertising and promotional spending, which more than doubled to 21.3 million yuan from 9.2 million yuan a year earlier. The rise in administrative expenses was largely due to legal, consulting and other professional fees, which surged to 10.6 million yuan in the latest period from 1.2 million yuan a year earlier.

Overseas operations were a lone bright spot for the company. First-half overseas revenue jumped 73.2% to 101 million yuan, accounting for 29.7% of total revenue. Charging-pile sales more than tripled in Thailand, rose 48.5% in Brazil and increased about 3.6-fold in the UAE. Sales through domestic automaker channels also climbed 119% to 244,000 units.

Zhida’s shares opened higher on Tuesday and traded at HK$11.24 by the midday break, up 0.36%.

By Lee Shih Ta

To subscribe to Bamboo Works weekly free newsletter, click here