1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
CTNT
Event Date
2023-08-01
Sector
Consumer
Subsector
Automobile Components
Offer Range
$4.00
Shares Offered
1.25M
17.92M
$37.1M
7.0%
Implied Upside vs Midpoint
Description
We are a supplier of parallel-import vehicles sourced in the U.S. to be sold in the PRC market. In the PRC, parallel-import vehicles refer to those purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers’ official distribution systems. To our knowledge, there are currently no U.S. federal or state laws, regulation, or rules on trade or export that prohibit the export of vehicles that will be parallel imported into foreign countries. Nonetheless, manufacturers and their distributors sometimes regard parallel-import vehicles as a competitor to their network of franchised dealerships, and thus may take measures to limit or reduce the opportunities for third parties, such as parallel-import vehicle dealers, to profit through leveraging the manufacturers’ different pricing strategies across the world. For example, they may add provisions in their sales agreements that restrict the export of the purchased automobiles, or they may build and update a database of customers who they suspect of purchasing vehicles for export (the “Suspect Customer Database”) and monitor and limit the sales of automobiles to those suspect customers. In China, sales of parallel-import vehicles have benefited from a series of related regulations and policies that have been promulgated by the PRC government since 2016, including “Several Opinions on Promoting Pilot Parallel Import of Automobiles,” “Opinions on Further Promoting the Development of Parallel Import of Automobiles,” and the “Circular on Several Measures for Invigorating Automobile Circulation and Promoting Automobile Consumption.” Such regulations and policies are in compliance with U.S. laws on trade and export. We purchase automobiles, primarily luxury brands such as Mercedes, BMW, Porsche, Lexus, and Bentley, from the U.S. market and resell them to our customers, including both U.S. and PRC parallel-import car dealers. We derive profits primarily from the price difference between our buying and selling prices for parallel-import vehicles. The primary driver for our industry is the continued growth of wealthy groups in China. The core of our business is the ability to identify the type of parallel-import vehicles that are in high demand and to procure them in a timely manner. Since our inception in 2016, our management has focused on building our procurement team. We procure our automobiles from U.S. automobile dealers via a network of independent contractors acting as purchasing agents on our behalf. As of March 31, 2023 and December 31, 2022 and 2021, we actively worked with 368, 342, and 300 purchasing agents, respectively. We believe that our corporate focus and dedication to the market, manifested in the size and sophistication of our purchasing agent team and our ability to source and train new purchasing agents, provides us with a significant marketing advantage and sets us apart from our competitors. Although we compete directly with many other companies that sell parallel-import vehicles to the PRC, most of our competitors are small family businesses that obtain U.S. cars through their family members or friends in the U.S. and therefore cannot guarantee a steady supply. We have developed a standardized system of recruiting, training, and managing a large number of professional purchasing agents, enabling us to sell on a recurring basis a large number of automobiles to the PRC market. Since purchasing agents work part-time and are paid on a commission basis, a high turnover rate poses a particular challenge for us, as agents may quit their jobs at any time without prior notice. Nonetheless, with our newly developed referral program that offers referral commissions to existing agents for each successfully closed transaction completed by a new agent whom they referred to us, we are currently able to maintain sufficient purchasing agents to meet our purchasing demand. As a result, we have become a reliable source of parallel-import vehicles and have built long-term relationships with multiple U.S. and PRC parallel-import car dealers, which have contributed significantly to our sales growth. As of March 31, 2023 and December 31, 2022 and 2021, we had an active customer base of three, 17, and eight dealers, respectively. Specifically, we had one U.S. customer and two PRC customers during the three months ended March 31, 2023. We had eight U.S. customers and nine PRC customers in 2022 and had four customers in each of the U.S. and the PRC in 2021. During the three months ended March 31, 2023 and the years ended December 31, 2022 and 2021, we sold 67, 434, and 167 parallel-import vehicles to Chinese parallel-import car dealers, respectively. During the same period and years, we sold 15, 29, and 220 parallel-import vehicles to our U.S. domestic customers, respectively. We sold 82, 463, and 387 vehicles during the three months ended March 31, 2023 and the years ended December 31, 2022 and 2021, respectively. For the three months ended March 31, 2023, we had total revenue of $10.2 million, representing a decrease of 20.3% from the same period in 2022. For the years ended December 31, 2022 and 2021, we had total revenue of $55.2 million and $39.2 million, respectively, representing an increase of 40.7% from 2021 to 2022. We had a net loss of $0.1 million for the three months ended March 31, 2023, compared to net loss of $0.5 million for the same period in 2022. We earned net income of $0.8 million for the year ended December 31, 2022, compared to net income of $1.2 million for the year ended December 31, 2021. Our net income for the year ended December 31, 2022 included approximately $1.3 million of subsidy income from a business recovery grant program. Sales to the PRC market represent a significant part of our revenue. During the three months ended March 31, 2023 and the years ended December 31, 2022 and 2021, sales to the PRC market accounted for approximately 83.8%, 93.1%, and 43.9% of our revenue, respectively. --- Our principal executive offices are located at 6201 Fairview Road, Suite 225, Charlotte, North Carolina, 28210. Our telephone number at our principal executive office is (704) 972-0209. Our corporate website is www.cheetah-net.com.
CHEETAH NET SUPPLY CHAIN SERVICE INC. annual income statement and balance sheet, FY 2022 to FY 2025, as reported in SEC filings.
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | $55.2M | — | $456K | $1.3M |
| Gross profit | $4.5M | — | $179K | $167K |
| Operating income | $2.1M | ($2.2M) | ($3.7M) | ($4.6M) |
| Net income | $817K | $134K | ($5.2M) | ($3.6M) |
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | $14.7M | $10.1M | $15.4M | — |
| Total liabilities | $12.9M | $3.2M | $2.8M | — |
| Total equity | $1.8M | $6.9M | $12.6M | — |
| Cash & equivalents | $58.4K | $433K | $1.7M | — |