Q1 2020 Earnings Call
Please continue to standby for today's idea. It all makes conference call. The presentation will begin momentarily things continue to stand pie.
[music].
Greetings and welcome to ideal dynamics Q1, Twentytwenty earnings call.
At this time, all participants are in listen only mode.
Question and answer session will follow the formal presentation.
Anyone to require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host Tony School, our head of IR.
Thank you very much operator, welcome everybody to the idea Q1 2020 earnings conference call joining me on the call could actually tonnage.
Our Chief Executive Officer, and Mr. Clark Mccarthy, our Chief Financial Officer, a webcast of today's call will be archived and available. That's in presentation section of our web site for a minimum 30 days and as a reminder, again this conference is being recorded.
During our call we will make forward looking statements such as dialogue regarding our revenue expectations are forecast for quarters and the folks it's well your 2020 related to what did you.
These statements are based on our current expectations information available as of today and I stepped up to a variety of risks uncertainties assumptions actual results may differ materially and outdoor adult varying risk factor that a business I've been a periodic filings with the FCC as a result, we caution you really get placing undue.
The last on the forward looking statements, we assume no obligation to update forward looking statement as a result, new information or future events as required by law. In addition, there are more fully described in the.
Public filings with the U.S. Securities Exchange Commission, which can be viewed www dot does he see dot Gov. Today May 11, 2020 becomes filed its 10-Q with yes. He see then after working through the press release announcing its financial adult all participants in this call may not have already done so may wish to low.
Those documents as Nick the by the summary of those results on the call.
The format for todays call will be as follows Mr. outboard, yeah, we'll see some companies overview and business strategy as well you actually do you think about mix for the first quarter and fiscal 2020.
Calling the Mccarthy, our CFO will speak to the companies operating and financial results for the first quarter.
Then everybody's favorite might help the QNX session I know very exciting I'll now hand, the conversation over to Mr. Alfred poor economic sorry, Oh.
Thank you Tony here, Thank you and good afternoon, everyone joining our call.
Going to begin with some general remarks about the Coke at 19 outbreak.
What impact it has had continues to have I might have into future.
I'd like to start off by saying that we hope you would get a lot funds a safe and healthy.
And so all the frontline work as medical staff and those working out supermarkets pharmacies public transportation et cetera are extremely grateful to you in upload your coverage and dedication.
Given the where a company with operations in China and the U.S.. That's what it's been later in the Ukraine, we've seen the copious 19 outbreak play out through multiple different places.
We have remained more or less operational throughout most of the staff in China have returned to their offices wont be able to rotational work from home program in place to ensure the staff maintain appropriate social distancing.
The wearing a box in flu season is common place in China, Mustapha continuing to wear masks during the what I would now in our offices.
To help minimize disruption to our business here in the U.S., we secured surgical break nom 95 nights expire colleagues in China.
We didn't want to take not and 95 masks away from our frontline medical staff. So we had some ship over the next best thing and this has allowed us to provide our U.S. operation staff, but the reasonable supply put themselves.
Please.
Despite the fact, we closed on New York offices are my body to work from home in early March we have had several suspect cases of coated 90, but they're not new York by staff ranging from persistent cult lack of smell and taste the company, but several days a fever and more traditional food like symptoms.
All of these occurred after we announced a welcome home policy and I'm pleased to say that each of those the suspected symptoms, but relatively young healthy so they sell quarantined I'm recovered to Todd.
Long term impact the caused by thing is still being assessed and while we are confident in our ability to execute on the timing of styles going forward results may shift due to 1% complications resulting from the pandemic.
Any second wave to the extent seen so far this year is likely to course, another shutdown this will impact our ability to conduct deliveries therefore to ride revenues.
Additionally, other business performance objectives, such as the planned IPO treat electric they haven't dependency on how the pandemic plays out.
Moving onto our Q1 performance Toby 19, effectively disrupted our China based business and I treat electric business in Malaysia Justice is currently disrupting the majority of businesses in the U.S. at this time.
What we are experiencing Q2 in the U.S. is essentially what China went through in Q1.
Our results were impacted as I make business is dependent upon physical deliveries, but those were just not permissible in China for mid January on but.
Even after we restored operation seemed like.
The restrictions will listen slogan, partially until well into Q2.
The problems travel restrictions still in place the type of cities such as Beijing.
I want to make the story clear to today's audience, the oldest or otherwise intact.
Simply could not be fulfilled his plans you took the outbreak and while we were only able to achieve a small number of deliveries in Q1 other areas of the business continued to drive forward.
We have been unable to progress how orders in the Bucks boss taxi divisions as mass transit slots, we offline for anyone other than a central workers in China.
Understandably fleet renewal and expansion was not on the immediate public transport agenda during the pandemic.
Conversely, the logistical vehicle segment did see strong demand as a result of a spike in online ordering as people stay probably never relied on deliveries.
Indeed, we are currently proceeding with meaningful orders offense and small trucks, we do not logistical vehicles division as a result.
While delivering some related financing were interrupted in Q1 I business development teams were busy and able to continue the momentum in a deal pipeline to add to the order gains in 29 team.
Despite the disruption caused by Corona virus, we continued ideal origination activities with pleasing results. Some of these will be significant revenue drivers such as our announcement of the deal with Beijing Silk Road Rainbow car rental group, which is among several we were able to announce in the quarter. Despite the disruption.
One of the benefits of operating at a comfortable changes driven by regulations, such as China is that making its customers can continue to plan confidently for the future even if some of the it'd be viewed objectives could not be achieved.
[noise] in January we announced an investment a 50 million renminbi or approximately 7 million U.S. dollars come Qingdao, She Yang Citi investment.
Part of a series of investments valuing I'd be happy Qingdao.
I had 2 billion renminbi or approximately 298 million U.S. dollar.
This was an important milestone in the development of every business. We're very pleased to have a stronger progressive partner the city of tricked out.
The strategic discussions continue on a daily basis, Qingdao officials, and we'll be making further announcements in the coming months in this regard.
Well, that's what they called US was impacted a software teams were able to continue without disruption in Q1.
We continue to focus on suddenly developed applications and systems designed to support our make tree metric operations with a customer Onboarding unquote systems being extended to include automatic order agreement generation, that's part of feedback to see from outage.
These are important customer acquisition of attention tools, which will help us scale the execution of our water pipeline I won't be integrated into the since the launch make website, which will initially be available in both English and Chinese.
Well, we are laser focused on growing revenues.
We remain disciplined in controlling our costs and we're always looking to improve our efficiency across the board. This is an important discipline should that be a reemergence will second wave of Coke is 90 in the future.
I'd like to speak now about the macroeconomic outlook on Q2.
The fundamental economic backdrop is intact in China as China continues to support the adoption of the and the recent economic stimulus measures in that country FIFA Progressive industries, such as electric vehicles.
Cope with 19 caused disruption.
The key drivers for global he'd be you'd be adoption zero emissions cost of ownership and technological advancement have not changed and the locked down in China only served to accept the environmental benefits actually witnessed a dramatic reduction in air pollution during that time.
The Chinese government is taking aggressive I was it measures to revise its economy with at least 1.1 trillion and economic stimulus Hammacher Twentytwenty.
And the strategic focus these new infrastructure investments, which include E. B D V. Charging in addition to Fiveg smart cities in high speed rail among others.
Well Cobiz 19, so let's take a hit in the short term companies such as I didn't always make a well placed the benefits in such stimulus measures.
One work. An example of this is a gas station to charging station conversion part it eventually which is in Genx, who province by province plans to promote the adoption of 250000 clean energy vehicles under its regional stimulus package.
And he's talking apartment development for the charging infrastructure necessary to support this level of sculptures by the end of this year.
Outside of China, the automotive industry in general continues to make statements, which provides us with confidence for the bumps in years ahead.
Recently became the CEO older Colombia said on a recent Q1 earnings cool. That's the thing the organization continues to invest in key technologies, including electrification digitized sanction.
They are non negotiable elements about future.
That's that's the statements a meaningful not only proteomics, but also set to validate our customers commitment to moving desolate sober from gasoline and diesel to fully electric.
Put simply we are confident about the investment we put into pursuing our staff to see model. When D.V. sector is one which will create significant shareholder value I'd like to speak now about a Q2 activities to date and overall outlook.
We had previously announced that the funds required to support our order book would begin to go live in Q2 and I'm pleased to let you know that the first of these funds are on schedule.
Working with our lease financing consortium partners.
Competing for the funds at this time and should have an additional three funds for a total of six online by the end of the year.
These are important developments as they enable us to be good fitting multiyear orders with confidence from what is now a robust and by both pipeline.
We had hoped to provide investors with revenue guidance at this juncture based on what the being a decent Q1 from the start of a meaningful ramp up in Q2 as well the coke it might you know because obviously push that out further into twentytwenty.
However, we do find someone else I'm more meaningful deliveries as they occur so investors in the market in general can begin to gauge I performance throughout the remainder of yes.
In terms of existing orders previously slated for Q1, so just trying to do taxi sales I can advise that the local government introduced emergency budget I just to free up access to funds to support its was pandemic among those funds in impacted what those the amount that TBV bags and subsidies. We anticipate these rebate funds, which are under consideration for approval.
Jim will become available once again, and then I'd love to service the outstanding oldest reaching three onwards.
Indeed, the main priority at this time is to execute on Navy orders and related energy orders as a result of buzzy be deliveries.
Make sales revenues are diversified becomes for key contributors.
One of the commercially b cells that did not require financing.
To lease financing from dependent sales, which is the majority of I make order book.
The three salus derived from a hub Qingdao and number four trying to sell some treat electric and other partnerships being established.
In terms of energy South we are in process procuring a license that we see us divide revenues from four key areas, which are one prepaid electricity sales to commercial fleet operators to electricity sales from TV charging stations.
Electricity sales to Fiveg towers, and full and did you sell some afford one energy cost be applying to launch this year in conjunction with China Unionpay.
Additionally, as mentioned in our recent press releases.
He be hopping Qingdao had a soft launch from my first and as such will be a contributor to our Q2 revenues.
This new business, we assumed that our national South Central Qingdao services, both consumer and commercial inquiries and I'm pleased to announce the oldest for the center already underway.
With that in mine I'd like to finish my remarks by announcing that we are planned to how about AG in the some of this year, possibly as early as the end of June on mid July to be held in New York City in Qingdao the purpose debris well, what well be traditionally held it at the end of each year to showcase our make business and the commencement of meaningful orders as well as to align with.
The formal ribbon cutting Frac Ching Tao Levy help and to introduce select partners participating with us in Qingdao.
There is of course, not dependent some pandemic tailing off but our intention is to facilitate this interactive be through video conferencing, they've been person who's not possible.
That concludes my remarks, so how did you back to tons CLO.
Thank you so much out.
Now I will turn the conversation over to our Chief Financial Officer Mr. corner Mccarthy.
Thank you Tony and thank you to everyone joining our call.
As I discussed earlier, despite the disruption to the Kuroda virus, we've been able to execute on our order book.
Certainly the current state of the World begins to gradually improve.
Teach make progress throughout the year, we expect the steps taken over the last year will provide us with both near and long term of revenues.
Subsequent increase shareholder value [noise].
Turning to results for the quarter ended March 31 Twentytwenty.
At a high level they take ways for this quarter.
Despite cobot 19 disruption I do it all looks fulfill sales orders just demonstrating the ability to execute on our order book.
Cash cash equivalents at the end of quarter wasn't Twentytwenty increased 5.9 billion from 2.6 million its previous quarter.
And we maintain cost discipline and implemented some cost saving initiatives.
Turning to revenues.
Revenues for the quarter ended March 31, Twentytwenty was four.
Point $4 million, that's compared to 26.9 billion for the same period and 20.
Isn't that 90.
Piece of 26.6 billion, 99%.
The revenue the first quarter of 22, 19 to 26.8 million from the provision of digital asset management service.
There was no revenue from this survey source of the current quarter, we do not anticipate any revenues from this contract and the remainder of 20 to 20.
The current quarter, we recorded 55000 dollar sales from say the E V taxis.
Given these sales during a period with almost all economic activity in China, what sort of stuff still is a testament to the dedication and innovation of our China based sales and operations cheap.
$55000 are easy revenue was recorded on a net basis.
The U.S. GAAP rules relating to revenue recognition. It was determined that I'd analytics acted in the agent capacity, but these sales rather than as a principal [noise].
For informational purposes, only if we have acted in a principal capacity the revenues would've been approximately $300000 weather related cost of revenue of approximately 245000, the gross profit would it be 55000.
Gross profit for the three months ended March 31.
Worked 44000 as compared to 26.7 billion during the same period in 2019.
Gross profit margin for these months ended.
Three months ended March 31st 2020 was 12% versus 99% to the same quarter last year.
The Creek Dick the decrease was almost entirely due to the very high gross margin on digital asset management service revenue, which was not what pieces of the current core.
Turning to operating expenses.
Operating expenses in the current quarter were $9.5 million versus 5.8, they get in the prior year.
Increase of 3.7 billion, which was principally due to an increase in stock based compensation expense of $2 billion.
Additionally, we recorded an impairment charge of.
$800000 related to the early termination of a long term property.
We recorded offsetting gain in the second quarter of approximately 9 billion.
900000 [noise].
With the net result, being that we actually it's a long term lease commitment for minimal cost.
Finally.
There was an additional half a million dollars related to the final true up expense for the deepest acquisition.
[noise] [noise] operating loss for the quarter ended March 31, 20 to 20 was 9.44 billion.
Pair trade gain of 20.9 billion in the first quarter of Twitchy 19 lots of 14.2 big into the fourth quarter of 29, Tiet, excluding experiments that $14.2 billion excludes the impairment charges taken in quarter four.
Interest expense increased by 2.5 million to 3.2 billion for the three months ended March 31st.
From the hope from 700000 during the same ph intervention 19.
The increase in interest expense was primarily due to the amortization of beneficial conversion feature and the interest associated with convertible notes into 20 shooting 2090.
There was no interest expense paid in cash in the first quarter all.
20 like T. M. Dot ends my remarks are going to pass it back to Tony.
Thank you very much kind of this concludes my prepared remarks, and now very excited for us to answer you have the investor and analyst question. So Brock if you Wanna get to that but either instructions, we can give them, but just a couple of minutes.
[laughter].
Thank you at this time will be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad.
A confirmation tonal indicate your line is in the question Q.
The press Star too if you would like to remove your question from the Q.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we pull for questions.
Our first question today comes from Ryan Yonke of Bridge Rock Partners. Please proceed with your question.
Hi, There <unk> Asian region is a big opportunity for electric bikes given that is one of the biggest modes of transportation I, just wondering when will treat electric equally operation operational and selling electric bikes that a bigger scale.
Hi, guys. Thank you for that question.
It's an interesting question treat electric secure the towards the end of last year, a very large scale deal for more than 10 million units over three years.
Indonesia.
In order to do that we need to set up by a subsidiary didn't need deal.
That was the process to tighten quite quickly until the cobiz not 19 locked down because until in Indonesia.
Government administration departments come out of the lock down we won't be able to finalize that but it's our intention to begin.
Working on large scale old is obviously in the leaves is the largest most populous country in southeast Asia.
But otherwise, we'll be looking to India and some of the other countries, which will I have no budget as well the lottery division. So the big area of growth Ross, we already have some exciting deals that they said with the.
They have a 1 million units in Indonesia that they secure towards the end of last year.
As soon as we get list of the locked down I believe will be this addition to begin fulfilling.
Okay. Thanks, Grand Siena, and the second one and it's been mentioned many times financing or umbrella financing has been one of the primary hurdle for sales I see that there's been several financing pools announced I just want to know what's the total amount of the financing pool funds that.
That being secured and if there's any noteworthy restrictions on their deployment at all.
Yes. So there is the first two announced we're in the region of about 100 million women Beach. The second they'll be about a third will be about half of back.
The first of them coming online HM.
The one to help us we've truck orders a primarily in inner Mongolia, when somebody off of modeling rich areas quickly followed by one coming online for logistical vehicles and then the more mainstream stuff that will come off a Boston taxes.
So in terms of restrictions.
The obviously the parties come you'd need to be a credit worthy customers of course.
There's a lot of state to state on densities in our pipeline. So that gives us the shipments that we'll be able to place successfully those or.
But so does the types of restrictions in place really I'll typically once you would see for lease financing that based on well we have a buyback program in place with the battery off right. Its looks the IPO. So that's an important part of that but secondarily. It's it's really just the balance sheet and the ability for those.
Business.
This is to be out afford the financing airplanes.
Okay got it thanks for that those but your question Sir.
The next question is from Rosie Ruby a private Investor. Please proceed with your question.
Hi.
Their name names revenue derived from the spread on group buying activity.
Which commercial electric vehicle segment.
I just that actually is having a heavy duty trucks taxis logistical vehicle, which one of those are the most attractive.
There's there's a rough rule of thumb here the big of a ticket the big of the spread that's achievable. So heavy trucks on the buses the ones the ones, where we expected Mike.
The the largest spreads and you know, 8% to 10% region and in the trucks and the in the taxis and logistical vehicles. Obviously those are smaller ticket purchases. So those would typically be within the 4% to 7% range. Although most of the types of spreads we expect to that I think the spread was slightly high on the from the few taxi sales that were able to fulfill in Q.
But the typically so it's a thinner margin business so.
Smaller ticket the smallest bump that you can buy.
The next question is from Alan Stone of Wall Street Research. Please proceed with your question.
Yeah, Hi, Tony.
A question that bounce the Oh.
Ah filing that you did recently for the because she called the Sito wind a credit I believe it was at 50 million dollar.
Facility Sandoz wondering if you care to address that and how that's coming along when you anticipate a it may be able to start to begin to draw down on that facility.
Thank you answer the question hope you're well yeah. So we decided to to put the cedar up there. It's it's good corporate housekeeping for public company to have a shelf registration.
But to get that legislation type of effective.
And essentially this is here for working capital if we needed in the short Oh, we did recently to do a draw down about a million dollars.
Essentially that was to help us.
We took a look at basically what we could do with the SEDAR. So we made in the initial draw down a 1 million bucks, but that was to assist us with Alan do you know freemont.
With rising cost of D. and over public companies, obviously, we got a feeling slightly larger than we expected. So we use the seed to I test the waters on that them be too or to take care of that that'd be my opinion as it came up.
So it's fully open right now you can draw down additional down so I'm not one that yeah. It's fully effective now and then obviously very close we we need to lead to bring Kathleen for the company. So as I said generally speaking I think comic con or would agree it's good housekeeping for for public companies, particularly small cap.
I'm pleased to high.
And effective show.
I don't times, because obviously it gives you greater flexibility when do you want to raise funds you can do it quite quickly so.
Now, let's call. It has anything to add up I'd say, that's my answer no I I think you.
Stage at the that if it's basically health.
Thank you.
[laughter]. Thank you stay safe guys.
Thank you all.
The next question is from miles Murphy of miles Gray investments. Please proceed with your question.
Hey off how are you.
Hi mouse good afternoon How're you.
Good good good Hey, I'm just a couple of questions here. So my question wasn't able to come through effectively in the last conference call.
And in regard to the $2 billion and guidance can you speak to that as we continue to move through the year in and not hear anything about deliveries whatsoever, and then just hearing $400000.
Are we can we expect to revise guidance dramatically down to more attainable number considering that.
Yes, we were going to be reporting that versus gross.
Yeah, I think how many color can speak most of them that buses gross because it goes on my a pretty much by deal by deal basis by the way I think that's a multi use was the agent but principle.
In the Cobiz 19, wells, obviously, a opex or off but does it for us it's a little bit of us gets a funding situation. Obviously, we've seen now first quarter, the essentially the light and kicked over into Q2.
But I would also say that the response from China in terms of it.
Economic stimulus package is very different to what we'll see here in the U.S., but I still don't know elections in China. They loved it being an election year, which I think you'll see a big political slumped to the to the economic stimulus in the U.S. This year, China's gone specifically for infrastructure investment and progressive infrastructure investment as well so I think.
In terms of you know what that means fastest suddenly an opportunity because China is trying to accelerate some of the infrastructure and that might be something we can take advantage off but at this point until the coffee planting pandemic shakes out a bit better it's gonna be hard for us the good bye.
Any kind of any kind of real number except for the fact that as commas said you know I think we did welfare to to get some oldest deliberate I think that was a stake in the ground for us in a very important thing for us to do there was some more incomplete oldest we couldn't get over the life and Q2 have some some bolt is more significant older deliveries in it so you know.
Providing there's no second wife as I mentioned in my prepared remarks.
I think will be good for a decent number of revenue this year, but exactly to what percentage I can't say.
Sure, Okay, there or would it make sure I can just come in the area not [noise].
That.
Sorry, My follow up question was there would it make sense to withdraw guidance and then to restate a number that we can't commit to I'm just wondering as we sit it.
49 cents.
Moving from the Russell.
End of potentially de listing it I feel like.
Withdrawing the guide would be very prudent.
Well I think I've got a go I've got three three answers to the Threeq. Once you make as the first one is obviously you didn't give kinda formal guidance. We said we were looking to do revenues within the region.
Formal guidance out.
Maybe different like second point I would say is you know the Russell rebalance is underway, we don't know what it'll mean this year they've got some unprecedented times ahead.
I would hope that considerations around the fact that they'll be looking up the types of companies because no. One will have reported that Q2 results by the time to bustle reshaped happens and so the last thing they'll want to do is have a lot of companies that are being bad shape. I would say you know people looking for good long term investments will it be looking the progressive industries like.
The types of industries that we read in the V. I think anybody in the restaurant Tourism Hotel business airline business is gonna be absolutely slammed with labor pool that Q2.
Proceeding cortisone.
You know, it's it's a difficult question in terms of de listing to NASDAQ has been working with the FCC to extend guidelines.
We now have until mid mid to late September to to get out.
Page requirement backup to at least the dollar for 10 consecutive days, we believe between Q2 and right G.M., which is likely sometime between like June digital night, I think we'll be able to restore the confidence in the market, we'll see that naturally take care of itself.
Is there any points you wouldn't like huh.
Yeah, I just wanted to come back as you know I've said this before to previous calls I mean, our business is you know feet commercial sales from that definition those deals our enterprise deals and consequently, there all heavily negotiated.
So whether we will be reporting them on as an age or principal also known as gross or Nash will depend very much of the facts or circumstances of each deal.
However, I would point out that.
Regardless of whether we are on a gross or net basis gross profit is the same <unk>.
EBITDA for the ticket is the same cash burn from the deal is the same so yes, the headline number revenue.
Hey can be quite different buckets in terms of our profitability and cash generation and counting doesn't.
Materially change that.
<unk>.
<unk> Peter right of Intro Act. Please proceed with your question.
Great. Thank you guys for Ah the update in taking my question.
I'm, hoping you can validate my thinking on that so if if we go to a visible number of business across the different segments within Meg up about 2 billion and we just for conservative purposes assume everything is on agency.
That my math is suggesting that moves you know the 2 billion dollar number down to about 100, how did million to kinda net revenue.
And then and then there's several factors that that might impact that number competitive win rate Colgate of course the percent that you think all hit in 2020.
I know you're not issuing formal guidance at this point, but when you link all goes.
Impacts you know out there that chasing the world, including idea Nomics in 2020.
I guess, what I'm really trying to get that is do you think that it's possible still today that the properties generated in the second half a 2020.
For it in an effort for the Meg business unit.
And I have one problem.
Yes. Thanks for the question Peter It's an interesting one yes, I absolutely do believe that so we'll achieve profitability this year.
The the reason I say that these you know where we're in a progressive industry. We're in a industry, which is driven by regulation timelines and I love. The stimulus packages that have been put out a regional level as well as national level in China are accelerating.
The adoption to be something unique happens when we put a pause on society to the Cobi 19 outbreak, which was major cities like the Chung do in Beijing, which usually are just a fix smoke in the winter months had blue skies. So there was no weights and I would just how bad the traffic was a little bit blame on the micro polluting.
This was on the.
Coal powered.
Energy, so electricity stations over there, but it looks like the the automotive industry, just having the traffic having a much greater impact and even though the most skeptical analysts is put forward. So China is doubling down on those types of investments and that leads us to the conversations that we're having with our partners that manufacturing left number that customers.
To believe that you know well, we'll have a significant business I'm in the second half of the.
Is there is there any comments you can have one kind of the competitive environment its or anyone else that Ah Ah you guys are going against when it comes to procurement or on the financing side of your business today.
I'm sorry decided this.
On the financing side, specifically in China, No, we've set things up bringing in some of the biggest the enterprise customers with cash on their balance sheet from utilities, who have a downstream interest in this because they'll they'll be selling but the spring selling you haven't GDB geology, two big insurance companies, who you know typically look to.
Do these types of corporate that investments.
They come to us as we've helped them set up these lease financing tool. These large scale funds have tough somewhere its place their money. They believe these the sound.
That's about placing here, let me the sound investments.
So that makes us feel good but you know that even though capitals type in the world of Cobiz 19, there's a lot of capital in China and I'm sure as soon as people start to recognize what we're doing them. They see the profitability fundamentally there will be competition I don't think you should assume they'll never be competition, but at least at this point, we've got a first mover advantage we believe.
That's wonderful and my my very last question is a follow up on one of the other questions.
If you can if you can help us understand how you're thinking of seed and how you're thinking of capital needs. This year in light of that profitability can you put a band around or kind of at least to help us think strategically how you're thinking of your capital needs for this year.
Oh, we have a couple of couple as if threats running internally you know one is the day to day funding of the business them until we derive those revenues you know we kinda has the ability to repatriate the revenue from China back through to the U.S.
The second one days as I mentioned my answer to the previous question is China's doubling down it's a stimulus packages is very favorable for E.D. and for he'd be challenging.
The clean energy.
So you know we have to take considerations as we see the market that stops come out of the Cobiz 19, if we need to accelerate some of what we're doing to take advantage of that.
That might be one of the reviews for a Catholic lines in second half.
Thank you guys.
Thank you so much.
That's all the time, we have for questions today, I would now up to turn the call back to Tony Sklar for closing remarks.
Thank you very much.
Today. This concludes the Audionomics. He went 2020 <unk> earnings conference call, we incurred or can you do need to continue to reach out to what we can answer any additional questions. You may have individually [noise].
You can say question Phil I R.
Dotcom, we'd like to thank all by listener shareholders analysts and others were taking the time to listen to hear you called clearances, we heard or anything filing for any additional information that you might need this call will be available on our website in the Investor section and you will find the link that to be Olin, where news events and other nations and the time.
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Dotcom. Thank you everyone for participating or thing on the call to me.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
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