10-K: Greenland Technologies 2025 Annual Report: Revenue Up, Net Income Down Amidst HEVI Suspension

Greenland Technologies Holding Corporation reported an 8% revenue increase in 2025, driven by transmission product sales, despite the suspension of its HEVI electric industrial vehicle operations due to tariff uncertainty.

Summary

• Revenue increased by 8.0% to $90.69 million for the fiscal year ended December 31, 2025, from $83.94 million in 2024.
• Sales volume of transmission products increased by 11.2% to 166,317 sets in 2025 from 149,597 sets in 2024.
• Gross profit increased by 26.2% to $28.45 million in 2025 from $22.53 million in 2024, with gross margin improving from 26.8% to 31.4%.
• Net income decreased by 43.3% to $8.60 million in 2025 from $15.15 million in 2024.
• Operating expenses surged by 110.5% to $20.92 million in 2025, primarily due to increased stock-based compensation, research and development expenses, and inventory provisions.
• HEVI Corp.'s electric industrial vehicle operations have been suspended since 2025 due to uncertainty regarding tariff policy.
• The company implemented a dual-class share structure on January 30, 2026, effective February 24, 2026, concentrating voting power with Class B ordinary shares (25 votes per share) held by Mr. Peter Zuguang Wang.
• A public offering closed on January 29, 2026, raising approximately $6.1 million in gross proceeds for working capital and general corporate purposes.
• Management identified a material weakness in internal controls over financial reporting due to a lack of sufficient and competent financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed filing with significant concerns. While revenue and gross profit growth in the core transmission business are positive, the substantial decline in net income and operating income, coupled with the complete suspension of HEVI's electric vehicle operations due to tariff uncertainty, indicates significant operational headwinds and strategic challenges. The identified material weakness in internal controls further adds to the negative sentiment.

Positives

• Revenue increased by 8.0% to $90.69 million in 2025, demonstrating growth in core business.
• Gross profit increased significantly by 26.2% to $28.45 million, with gross margin improving from 26.8% to 31.4% in 2025.
• Sales volume of transmission products grew by 11.2%, indicating strong demand in the material handling sector.
• The company maintains robust research and product development capabilities with a team of over 17 professionals and accredited technology centers.
• A strategic after-sales service network is established in key economic regions of the PRC, supporting customer loyalty.
• The management team is experienced, with proven track records in technology, operations, finance, and international management.
• Zhejiang Zhongchai, a PRC subsidiary, benefits from a reduced 15% income tax rate due to its high-tech enterprise status, which is valid until late 2028.
• Successfully completed an underwritten public offering in January 2026, raising approximately $6.1 million for working capital and general corporate purposes.

Negatives

• Net income decreased by 43.3% to $8.60 million in 2025, a substantial decline from $15.15 million in 2024.
• Income from operations decreased by 40.3% to $7.52 million in 2025 from $12.59 million in 2024.
• Total operating expenses surged by 110.5% to $20.92 million in 2025, primarily due to a $5.55 million increase in stock-based compensation expense, higher R&D expenses, and inventory provisions.
• HEVI Corp.'s electric industrial vehicle operations have been suspended since 2025 due to uncertainty regarding tariff policy, impacting diversification efforts.
• A material weakness in internal controls over financial reporting was identified due to insufficient U.S. GAAP and SEC reporting personnel.
• The company has a high dependence on a limited number of customers, with the top five contributing 40.32% of total revenues in 2025, creating potential pricing and competitive pressures.
• Relatively long payment terms for accounts receivable in China can adversely affect cash flow and increase credit risk.
• Interest expenses increased by 32.5% to $0.11 million in 2025.
• Government subsidies income decreased by 7.8% to $0.81 million in 2025.
• The dual-class share structure limits the ability of Class A ordinary shareholders to influence corporate matters, as Class B shares carry 25 votes per share and are concentrated with the Chairman of the Board.

Risks

• Business operations are cash intensive, and failure to maintain sufficient liquidity and working capital could adversely affect the business.
• Long payment terms for accounts receivable in China can adversely affect cash flow and lead to significant expected credit losses.
• Failure to meet short lead-times for product delivery to large manufacturers could result in loss of customers and damage to reputation.
• Intense competition in the fragmented transmission industry and the emerging electric industrial heavy equipment market could impact profitability.
• High dependence on a limited number of customers (top five contributed 40.32% of revenues in 2025) creates vulnerability to pricing pressures and customer loss.
• Expanding operations may require establishing a more diverse supplier network for raw materials, and failure to do so could adversely affect financial condition.
• Efforts to diversify into electric industrial heavy equipment may not be successful, and the suspension of HEVI's operations due to tariff uncertainty could materially affect the business.
• Tariffs and other trade barriers imposed on Chinese goods, including components for HEVI, significantly increase costs and could render products less competitive.
• Volatile steel prices can cause significant fluctuations in operating results if price increases cannot be passed on to customers.
• Risks and uncertainties in procuring low-cost, high-quality raw materials on a timely basis from suppliers.
• Failure to prevent the loss or misappropriation of, or disputes over, intellectual property, particularly in China where enforcement is less developed.
• Limited insurance coverage for PRC operations exposes the company to product liability claims, business interruption, and natural disasters.
• Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject the company to penalties.
• Substantial increases in labor costs in the PRC could adversely affect business and operating costs.
• Intense competition for highly skilled employees, potentially impacting the ability to attract and retain talent.
• Dependence on the continued efforts of senior management; loss of key executives could severely disrupt business.
• Lack of key person insurance, leading to potential losses if key employees terminate services.
• Geopolitical conflicts involving Iran, military actions in the Middle East, and the war in Ukraine may adversely affect economic conditions in the U.S., China, and globally, causing stock price volatility.
• High inflation rates may adversely affect the company by increasing costs beyond what can be recovered through price increases and limit future debt financing.
• The outcome of litigation, inquiries, investigations, or other legal proceedings could distract management, increase expenses, or result in significant damages or business restrictions.
• Changes in China's economic, political, or social conditions or government policies could have a material adverse effect on business and operations.
• Uncertainties with the PRC legal system, including interpretation and enforcement of laws, could hinder the ability to offer securities or materially affect business operations.
• The PRC government exerts substantial influence over business activities, and future regulations could materially and adversely affect operations.
• Future offerings will require CSRC filings, and failure to comply could lead to sanctions, fines, or a prohibition from conducting offerings.
• Potential liability for improper use or appropriation of personal information and failure to comply with PRC data security laws.
• Difficulty enforcing judgments against the company in the U.S. due to assets and operations primarily in the PRC.
• Potential classification as a PRC Resident Enterprise could result in unfavorable tax consequences for the company and non-PRC shareholders.
• PRC regulation of loans and direct investments by offshore holding companies may delay or prevent the use of financing proceeds for PRC subsidiaries.
• Reliance on dividends from PRC subsidiaries for cash needs, subject to limitations and restrictions on fund transfers out of China.
• Governmental control of currency conversion may limit the ability to utilize revenues effectively and affect investment value.
• U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of operations in China.
• Class A ordinary shares may be delisted and prohibited from trading under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors.
• Nasdaq's recently adopted and proposed new listing rules (minimum bid price, market value, discretionary delisting authority) could result in accelerated delisting.
• The dual-class share structure with different voting rights limits the ability of Class A ordinary shareholders to influence corporate matters and could discourage change of control transactions.
• The dual-class structure may adversely affect the trading market for Class A ordinary shares, potentially leading to exclusion from certain indices.
• Future sales of Class A ordinary shares, whether by the company or its shareholders, could cause the price to decline.
• No expected dividends in the foreseeable future, requiring reliance on price appreciation for investment return.
• Techniques employed by short sellers may drive down the market price of Class A ordinary shares.
• Class A ordinary shares may experience extreme price and volume fluctuations, leading to costly litigation and making investment less appealing.

Future Outlook

The company intends to resume HEVI operations once the tariff policy environment stabilizes and plans to focus its research and development efforts on next-generation electric industrial heavy equipment and supporting products. It expects cash flow to continue to improve for the remainder of fiscal year 2026 and believes existing funding sources will be sufficient to fund operations for the next 12 months. The company may also pursue opportunities for investment, acquisition, or strategic cooperation if additional cash resources are needed.

Management Comments

• "We believe that it is in the right position and the right time to supply a new generation of industrial heavy equipment, including electric industrial vehicles, that is green, safe, and cost-effective."
• "HEVI intends to resume operations once the policy environment stabilizes."
• "We believe that, over the long term, HEVI’s electric industrial vehicles, as U.S. branded products, will remain competitive in the U.S. market."
• "Greenland believes that it is well-positioned to capitalize on the increasing market demand for transmission products in the PRC as well as on the growing demand over the long term for emission-free and labor substitution by electric vehicles in the United States."
• "We believe that the Company has sufficient cash, even with uncertainty in the Company’s manufacturing and sale of electric industrial heavy equipment in the future and decline on sale of transmission products. However, our existing funding sources will be sufficient to fund our operations for the next 12 months. We remain confident and expect to continue to generate positive cash flow from our operations."

Industry Context

StockSavvy.ai notes that the global construction equipment market is projected to grow at a compound annual growth rate (CAGR) of 3.9% from 2024 to 2030, reaching US$187 billion, with the North American market expected to exhibit one of the fastest growth rates. Global efforts to reduce greenhouse gas and carbon emissions are boosting demand for eco-friendly electric-powered industrial heavy equipment. The electric industrial heavy equipment market is highly fragmented with high technology barriers for new entrants. However, traditional OEMs face challenges in adapting their established dealership models to electric alternatives due to significantly lower maintenance costs (over 40% less for electric products), which reduces service revenue for dealers.

Comparison to Industry Standards

• The global construction equipment market is anticipated to grow at a compound annual growth rate (CAGR) of 3.9% from 2024 to 2030, reaching US$187 billion, according to a February 2025 report by MarketsandMarkets, indicating a favorable long-term market trend for the company's electric industrial heavy equipment segment.
• HEVI's electric products require over 40% less maintenance costs compared to traditional diesel-powered equipment, which presents a competitive advantage in operational efficiency but a challenge for traditional OEM dealership models reliant on service revenue.
• Key competitors in the industrial heavy equipment industry, such as Caterpillar, Volvo CE, and John Deere, are primarily traditional diesel-powered manufacturers and are reportedly years away from full electric product deployment, potentially giving Greenland an early mover advantage in the electric segment.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not party to, and its property is not the subject of, any material legal proceedings.

Related Party Transactions

• Due to Cenntro Smart Manufacturing Tech. Co., Ltd.: $0 as of December 31, 2025 ($2,534 as of December 31, 2024) for employee wages paid on the company's behalf.
• Due to Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership): $94,442 as of December 31, 2025 and 2024 for temporary borrowings.
• Due to Cenntro Holding Limited: $1,341,627 as of December 31, 2025 and 2024 for dividend payment declared by Zhongchai Holding.
• Due to Peter Zuguang Wang: $2,392,961 as of December 31, 2025 and 2024 for capital reduction due to the dissolution of Shanghai Hengyu Business Management Consulting Co., Ltd.
• Due to Xinchang County Jiuhe Investment Management Partnership (LP): $0 as of December 31, 2025 ($5,205,979 as of December 31, 2024) for dividend payment and refund due to investment termination.
• Due to Xinchang County Jiuxin Investment Management Partnership (LP): $1,429,981 as of December 31, 2025 ($0 as of December 31, 2024) for dividend payment declared by Zhejiang Zhongchai.
• Due to Raymond Z. Wang: $16,000 as of December 31, 2025 ($0 as of December 31, 2024) for temporary borrowings.
• Due from Cenntro Inc.: $840,000 as of December 31, 2025 ($0 as of December 31, 2024) for a loan with an annual interest rate of 7.5%, maturing before April 14, 2026.
• Due from Zhuhai Hengzhong Industrial Investment Fund (Limited Partnership): $245,017 as of December 31, 2025 ($235,497 as of December 31, 2024) for a loan with an annual interest rate of 4.785%.
• Due from Cenntro Enterprise Limited: $21,400 as of December 31, 2025 ($0 as of December 31, 2024) for expenses paid on behalf of the related party.
• Dividend payment to Xinchang County Jiuxin Investment Management Partnership (LP): $2,221,760 for the year ended December 31, 2025.
• Dividend payment to Xinchang County Jiuhe Investment Management Partnership (LP): $5,934,100 for the year ended December 31, 2024.

Stakeholder Impact

• Shareholders: Class A shareholders' voting power is significantly diluted by the dual-class structure, concentrating control with Mr. Peter Zuguang Wang. There is a heightened risk of delisting from Nasdaq due to new rules or the HFCA Act, which could severely impact liquidity and share value. No dividends are expected in the foreseeable future, requiring reliance on price appreciation for investment return.
• Employees: The company offers competitive salaries, comprehensive training, and other fringe benefits and incentives. However, competition for highly skilled employees is intense, and the company's success depends on its ability to attract, retain, and motivate qualified personnel.
• Customers: The company's high dependence on a limited number of major customers (top five contributed 40.32% of revenue) creates potential pricing and competitive pressures. Short lead-times for product delivery require rapid response, which can lead to reduced purchasing efficiency and lower profit margins.
• Suppliers: Volatile raw material prices (e.g., steel) can affect the company's costs, and its ability to pass these increases on to customers is uncertain. The need to diversify the supplier network as operations expand presents a risk if sufficient supply at competitive prices cannot be secured.
• Creditors: Failure to roll over short-term borrowings at maturity or to service debt could result in a transfer of ownership of a portion of PRC subsidiary shares to secured lenders, the imposition of penalties, legal actions, or even insolvency.

Next Steps

• HEVI intends to resume operations once the tariff policy environment stabilizes.
• The company plans to focus its research and development efforts on its next generation of electric industrial heavy equipment and supporting products.
• The company expects cash flow to continue to improve for the remainder of fiscal year 2026.
• The company plans to maintain its current debt structure and rely on governmentally supported loans with lower cost, if necessary.
• The company might implement a stricter policy on sales to less creditworthy customers and plans to continue to improve its collection efforts on accounts with outstanding balances.
• Zhejiang Zhongchai's high-tech enterprise status will be reevaluated near the end of 2028.
• The company expects to implement remedial actions during fiscal year 2026 to strengthen internal control over financial reporting, including developing formal policies, recruiting personnel, targeted training, acquiring additional resources, and implementing a new review protocol.
• The company is currently evaluating the impact of several new FASB ASUs for future adoption, including ASU 2024-03, ASU 2025-01, ASU 2025-02, ASU 2025-04, ASU 2025-05, ASU 2025-06, ASU 2025-08, ASU 2025-10, ASU 2025-11, and ASU 2025-13.

Key Dates

Recommendation

The significant decline in net income and operating income despite revenue growth, coupled with the complete suspension of HEVI's electric vehicle business due to tariff uncertainty, signals substantial operational challenges. The dual-class share structure concentrates voting power, limiting minority shareholder influence, and the identified material weakness in internal controls raises governance concerns. Furthermore, the heightened risk of delisting from Nasdaq due to new rules or the HFCA Act, combined with geopolitical instability affecting the Chinese economy, presents considerable downside risk for investors. While the core transmission business shows some strength, the overall risk profile and negative financial trends outweigh the positives, suggesting a 'sell' recommendation for a seasoned investor.

Keywords

Greenland Technologies Holding Corporation, GTEC, Annual Report, Financial Results, Transmission Products, Electric Industrial Vehicles, HEVI Corp, China Operations, Nasdaq Capital Market, Dual-Class Shares, Corporate Governance, Risk Factors, Tariff Policy, PRC Regulations, Supply Chain, Manufacturing, Research and Development, Shareholder Voting Rights, Internal Controls, PCAOB Inspection, Geopolitical Risk, Capital Raise, SEC Filing