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SunCar Technology Group Inc. Announces First Half Year 2023 Results

NEW YORK, Sept. 28, 2023 (GLOBE NEWSWIRE) -- SunCar Technology Group Inc. (“SunCar” or the “Company”) (Nasdaq: SDA), a leading provider of digitalized enterprise automotive after-sales services and online auto insurance intermediation service in China, today announced its unaudited financial results for the six months ended June 30, 2023.

Six months ended June 30, 2023 Financial Highlights

  • Total revenues increased by 28% to $159.4 million from $124.7 million for the same period ended June 30, 2022.

  • Operating profit decreased by 81% to $1.1 million from $6.0 million for the same period ended June 30, 2022.

  • Net profit was $1.1 million, compared to net profit of $5.7 million for the same period ended June 30, 2022.

  • Net cash used in operating activities was $20.5 million, compared to net cash used in operating activities of $20.5 million for the same period ended June 30, 2022.

Management Commentary

Mr. Ye Zaichang, Chairman & CEO of SunCar, commented, “We are pleased to report our financial results for the first half of the year 2023. Our revenue increased by 28% to $159.4 million for the first half of fiscal year 2023 as compared to the same period of last year. In the first half of 2023, we successfully executed our sustainable growth strategy and strengthened our leadership in automotive after-sales services and the online insurance market for NEV. We attributed our solid results to increased institutional partner base, expanded network and new service initiatives. In the meanwhile, we made efforts to improve operational efficiency and maintain a healthy balance sheet. Looking into the future, we plan to continuously develop strategic cooperation with leading NEV companies, expand supplier network, and invest in technology.”

Six months ended June 30, 2023 Financial Results

Total revenues in the six months ended June 30, 2023 were $159.4 million, representing an increase of 28% from $124.7 million in the same period ended June 30, 2022.

Revenue from automotive after-sales service in the six months ended June 2023 increased by 10% to $98.8 million from $89.9 million in the same period ended June 30, 2022.

Revenue from insurance intermediation service in the six months ended June 2023 increased by 63% to $47.7 million from $29.3 million in the same period ended June 30, 2022.

Revenue from technology service in the six months ended June 2023 increased by 132% to $12.9 million from $5.5 million in the same period ended June 30, 2022.

Operating costs and expenses in the six months ended June 2023 increased by 33% to $158.3 million from $118.7 million in the same period ended June 30, 2022.

Integrated service cost in the six months ended June 2023 increased by 15% to $87.9 million from $76.7 million in the same period ended June 30, 2022.

Promotional service expenses in the six months ended June 30, 2023 increased by 75% to $49.6 million from $28.4 million in the same period ended June 30, 2022.

Selling expenses in the six months ended June 30, 2023 increased by 88% to $12.8 million from $6.8 million in the same period ended June 30, 2022

General and administrative expenses in the six months ended June 30, 2023 decreased by 19% to $4.0 million from $4.9 million in the same period ended June 30, 2022.

Research and development expenses in the six months ended June 30, 2023 increased by 108% to $4.0 million from $1.9 million in the same period ended June 30, 2022.

Operating profit in the six months ended June 30, 2023 decreased by 81% to $1.1 million from $6.0 million in the same period ended June 30, 2022.

Net profit in the six months ended June 30, 2023 was $1.1 million, compared to net profit of $5.7 million in the same period ended June 30, 2022.

Net loss attributable to ordinary shareholders in the six months ended June 30, 2023 was $3.4 million, compared to net income attributable to ordinary shareholders of $2.1 million in the same period ended June 30, 2022.

Basic and diluted net loss per share is $0.04 in the six months ended June 30, 2023, compared with basic and diluted net income per share of $0.04 in the same period ended June 30, 2022.

As of June 30, 2023, the aggregate amount of the Company's cash and cash equivalents was $38.1 million.

Net cash used in operating activities in the six months ended June 30, 2023 was $20.5 million, compared to net cash used in operating activities of $20.5 million in the same period ended June 30, 2022.

About SunCar Technology Group Inc.

Originally founded in 2007, SunCar is transforming the customer journey for car insurance and aftermarket services in China, the largest passenger vehicle market in the world. SunCar develops and operates online platforms that seamlessly connect drivers with a wide range of automotive services and insurance coverage options from a nationwide network of provider partners. As a result, SunCar has established itself as the leader in China in the B2B automotive after-sales services market and the online insurance market for electric vehicles. The company’s multi-tenant, cloud-based platform empowers its enterprise clients to optimally access and manage their customer database and offerings, and drivers gain access to hundreds of services from tens of thousands of independent providers in a single application.

Forward-Looking Statements

This press release contains information about the Company's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. The Company's encourages you to review other factors that may affect its future results in the Company's annual reports and in its other filings with the Securities and Exchange Commission.

Contact

SunCar:

Mr. Stanley Yang
Email: yang.ts@car1768.com
Ms. Hui Jiang
Email: jianghui@4008801768.com

 

 

SUNCAR TECHNOLOGY GROUP INC

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In U.S. Dollar thousands, except for share and per share data, or otherwise noted)

 

 

 

 

 

December 31,

 

 

June 30,

 

 

 

 

2022

 

 

2023

 

 

 

 

 

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash

 

$

21,200

 

 

$

35,460

 

 

Restricted cash

 

 

2,717

 

 

 

2,653

 

 

Short-term investments

 

 

26,544

 

 

 

20,985

 

 

Accounts receivable, net

 

 

85,619

 

 

 

74,593

 

 

Prepaid expenses and other current asset

 

 

9,270

 

 

 

43,601

 

 

Total current assets

 

 

145,350

 

 

 

177,292

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

Long-term investment

 

 

290

 

 

 

276

 

 

Software and equipment, net

 

 

18,491

 

 

 

15,040

 

 

Deferred tax assets, net

 

 

13,070

 

 

 

12,630

 

 

Other non-current assets

 

 

14,423

 

 

 

17,267

 

 

Right-of-use assets

 

 

344

 

 

 

1,514

 

 

Total non-current assets

 

 

46,618

 

 

 

46,727

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

191,968

 

 

$

224,019

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Short-term loans

 

$

74,653

 

 

$

85,199

 

 

Accounts payable

 

 

24,200

 

 

 

30,326

 

 

Contract liabilities

 

 

3,569

 

 

 

3,870

 

 

Tax Payable

 

 

2,042

 

 

 

1,749

 

 

Accrued expenses and other current liabilities

 

 

4,849

 

 

 

4,037

 

 

Amount due to related parties

 

 

45,564

 

 

 

168

 

 

Lease liabilities

 

 

315

 

 

 

624

 

 

Total current liabilities

 

 

155,192

 

 

 

125,973

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

Lease liabilities

 

 

-

 

 

 

796

 

 

Amount due to a related party

 

 

-

 

 

 

43,330

 

 

Warrant liabilities

 

 

-

 

 

 

32

 

 

Total non-current liabilities

 

 

-

 

 

 

44,158

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

155,192

 

 

$

170,131

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 17)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

Class A ordinary shares* (par value of US$0.0001 per share; 400,000,000 Class A Ordinary Shares authorized as of December 31, 2022 and June 30, 2023, respectively; 30,371,435 and 36,058,102 Class A Ordinary Shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)

 

$

3

 

 

$

4

 

 

Class B Ordinary Shares* (par value of US$0.0001 per share; 100,000,000 Class B Ordinary Shares authorized as of December 31, 2022 and June 30, 2023, respectively; 49,628,565 and 49,628,565 Class B Ordinary Shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)

 

 

5

 

 

 

5

 

 

Additional paid in capital

 

 

95,764

 

 

 

114,084

 

 

Accumulated deficit

 

 

(99,580

)

 

 

(103,200

)

 

Accumulated other comprehensive loss

 

 

(1,476

)

 

 

(1,643

)

 

Total SUNCAR TECHNOLOGY GROUP INC’s shareholders’ (deficit) equity

 

 

(5,284

)

 

 



9,250

 

 

Non-controlling interests

 

 

42,060

 

 

 

44,638

 

 

Total equity

 

 

36,776

 

 

 

53,888

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

$

191,968

 

 

$

224,019

 

 

 

 

 

 

 

 

 

 

 

 

* Shares are related to the reverse recapitalization on May 17, 2023 for the business combination and presented on a retroactive basis to reflect the reverse recapitalization.

 

SUNCAR TECHNOLOGY GROUP INC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In U.S. Dollar thousands, except for share and per share data, or otherwise noted)

 

 

 

For the Six Months Ended June 30,

 

 

 

2022

 

 

2023

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Automotive after-sales service

 

$

89,851

 

 

 

98,813

 

 

Insurance intermediation service

 

 

29,346

 

 

 

47,710

 

 

Technology service

 

 

5,531

 

 

 

12,855

 

 

Total revenues

 

 

124,728

 

 

 

159,378

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

 

Integrated service cost

 

 

(76,717

)

 

 

(87,854

)

 

Promotional service cost

 

 

(28,363

)

 

 

(49,563

)

 

Selling expenses

 

 

(6,802

)

 

 

(12,793

)

 

General and administrative expenses

 

 

(4,935

)

 

 

(4,020

)

 

Research and development expenses

 

 

(1,930

)

 

 

(4,020

)

 

Total operating costs and expenses

 

 

(118,747

)

 

 

(158,250

)

 

 

 

 

 

 

 

 

 

 

Operating profit

 

 

5,981

 

 

 

1,128

 

 

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

 

Financial expenses, net

 

 

(1,756

)

 

 

(1,915

)

 

Investment income

 

 

249

 

 

 

323

 

 

Other income, net

 

 

3,139

 

 

 

2,450

 

 

Total other income, net

 

 

1,632

 

 

 

858

 

 

 

 

 

 

 

 

 

 

 

Profit before income tax

 

 

7,613

 

 

 

1,986

 

 

Income tax expense

 

 

(890

)

 

 

(850

)

 

Income from continuing operations, net of tax

 

 

6,723

 

 

 

1,136

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

Net loss from the operations of the discontinued operations, net of tax

 

 

(1,031

)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Net profit

 

 

5,692

 

 

 

1,136

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

 

 

6,723

 

 

 

1,136

 

 

Less: Net income attributable to non-controlling interests of continuing operations

 

 

3,568

 

 

 



4,515

 

 

Net income (loss) from continuing operations attributable to SunCar Technology Group Inc’s ordinary shareholders

 

 

3,155

 

 

 



(3,379



)

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of tax

 

 

(1,031

)

 

 

-

 

 

Less: Net loss attributable to non-controlling interests of discontinue operations

 

 

(1

)

 

 

-

 

 

Net loss from discontinued operations attributable to SunCar Technology Group Inc’s ordinary shareholders

 

 

(1,030

)

 

 



-

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to SunCar Technology Group Inc’s ordinary shareholders

 

 

2,125

 

 

 



(3,379



)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per ordinary share from continuing operations:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.04

 

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

 

Net loss per ordinary share from discontinued operations:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.01

)

 

$

-

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to SunCar Technology Group Inc’s ordinary shareholders per ordinary share

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.03

 

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding used in calculating basic and diluted income (loss) per share

 

 

 

 

 

 

 

 

Basic and diluted

 

 

80,000,000

 

 

 

81,374,609

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before non-controlling interests

 

$

6,723

 

 

$

1,136

 

 

Loss from discontinued operation, net of tax

 

 

(1,031

)

 

 

-

 

 

Net income

 

 

5,692

 

 

 

1,136

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

Foreign currency translation difference

 

 

(2,412

)

 

 

(2,614

)

 

Total other comprehensive loss

 

 

(2,412

)

 

 

(2,614

)

 

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss)

 

 

3,280

 

 

 

(1,478

)

 

Less: total comprehensive income attributable to non-controlling interest

 

 

800

 

 

 



2,068

 

 

Total comprehensive (loss) income attributable to SUNCAR TECHNOLOGY GROUP INC’s shareholders

 

$

2,480

 

 

$



(3,546



)

 

 

 

 

 

 

 

 

 

 

 

Shares are related to the reverse recapitalization on May 17, 2023 for the business combination and presented on a retroactive basis to reflect the reverse recapitalization.

 

SUNCAR TECHNOLOGY GROUP INC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. Dollar thousands, except for share and per share data, or otherwise noted)

 

 

 

For the Six Months Ended
June 30,

 

 

 

2022

 

 

2023

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net profit from continuing operations

 

$

6,723

 

 

$

1,136

 

 

Net loss from discontinued operations

 

 

(1,031

)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Provision for doubtful accounts

 

 

245

 

 

 

(3,694

)

 

Depreciation and amortization

 

 

2,077

 

 

 

2,840

 

 

Amortization of right-of-use assets

 

 

-

 

 

 

350

 

 

Share-based compensation of subsidiary

 

 

830

 

 

 

776

 

 

Loss on disposal of software and equipment

 

 

2

 

 

 

-

 

 

Change in deferred taxes

 

 

(249

)

 

 

(207

)

 

Fair value income from short-term investments

 

 

-

 

 

 

(323

)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(13,894

)

 

 

10,353

 

 

Prepaid expenses and other current asset, net

 

 

(1,084

)

 

 

(38,757

)

 

Accounts payable

 

 

(17,696

)

 

 

7,647

 

 

Contract liabilities

 

 

548

 

 

 

497

 

 

Accrued expenses and other current liabilities

 

 

916

 

 

 

(787

)

 

Tax payable

 

 

(86

)

 

 

(202

)

 

Operating lease liabilities

 

 

-

 

 

 

(321

)

 

Amount due to related parties

 

 

1,185

 

 

 

167

 

 

Net cash used in operating activities of continuing operations

 

 

(20,483

)

 

 

(20,525

)

 

Net cash used in operating activities of discontinued operations

 

 

(54

)

 

 

-

 

 

Total net cash used in operating activities

 

 

(20,537

)

 

 

(20,525

)

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of software and equipment

 

 

(1,082

)

 

 

(577

)

 

Purchase short-term investment

 

 

(105

)

 

 

-

 

 

Proceeds from sale of short-term investment

 

 

-

 

 

 

4,784

 

 

Purchase of other non-current assets

 

 

-

 

 

 

(3,310

)

 

Net cash (used in) provided by investing activities of continuing operations

 

 

(1,187

)

 

 

897

 

 

Net cash used in investing activities of discontinued operations

 

 

(537

)

 

 

-

 

 

Total net cash (used in) provided by investing activities

 

 

(1,724

)

 

 

897

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FORM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from short-term bank loans

 

 

70,564

 

 

 

68,271

 

 

Repayments of short-term bank loans

 

 

(43,942

)

 

 

(53,418

)

 

Repurchase of non-controlling interests

 

 

(496

)

 

 

-

 

 

Proceeds from Private Placement

 

 

-

 

 

 

21,737

 

 

Net cash paid on reverse recapitalization

 

 

-

 

 

 

(482

)

 

Payment for the offering cost

 

 

-

 

 

 

(623

)

 

Net cash provided by financing activities of continuing operations

 

 

26,126

 

 

 

35,485

 

 

Net cash provided by financing activities of discontinued operations

 

 

-

 

 

 

 

 

Total net cash provided by financing activities

 

 

26,126

 

 

 

35,485

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(1,463

)

 

 

(1,661

)

 

 

 

 

 

 

 

 

 

 

Net change in cash and restricted cash

 

 

2,402

 

 

 

14,196

 

 

 

 

 

 

 

 

 

 

 

Cash and restricted cash, beginning of the period

 

$

37,347

 

 

$

23,917

 

 

Cash and restricted cash, end of the period

 

$

39,749

 

 

$

38,113

 

 

 

 

 

 

 

 

 

 

 

Less: cash of discontinued operations at end of the period

 

 

-

 

 

 

-

 

 

Cash and restricted cash at end of the period for continuing operations

 

$

39,749

 

 

$

38,113

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash and restricted cash to the consolidated balance sheets:

 

 

 

 

 

 

 

 

Cash

 

$

36,958

 

 

$

35,460

 

 

Restricted cash

 

$

2,791

 

 

$

2,653

 

 

Total cash and restricted cash

 

$

39,749

 

 

$

38,113

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Income tax paid

 

$

1,108

 

 

$

1,128

 

 

Interest expense paid

 

$

2,271

 

 

$

1,704

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of non-cash activities:

 

 

 

 

 

 

 

 

Disposal of Shengda Group

 

 

24,042

 

 

 

-