Senmiao Technology Ltd SEC 10-K Report

Senmiao Technology Ltd, a U.S. holding company incorporated in Nevada, primarily operating through its subsidiaries in China, has released its annual 10-K report. The company focuses on providing automobile transaction and related services, particularly in the online ride-hailing industry. The report outlines the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the competitive and regulatory landscape of China.

Financial Highlights

• Total Revenues: $3.39 million, a decrease of approximately 21.5% compared to the previous year due to a decreased number of automobiles for operating lease.
• Gross Profit: $0.85 million, decreased by $74,928 from the previous year, mainly due to a decrease in gross profit from Auto Operating Leasing.
• Loss from Operations: $(3.87) million, improved by $508,012 compared to the previous year, reflecting a reduction in operating expenses.
• Net Loss from Continuing Operations: $(3.47) million, improved by $387,041 compared to the previous year.
• Net Loss Per Share - Basic and Diluted: $(0.35), reflecting a decrease in net loss attributable to the Company's stockholders.

Business Highlights

• Business Overview: Senmiao operates through its subsidiaries in China, focusing on providing automobile transaction and related services, particularly in the online ride-hailing industry.
• Operational Structure: The company operates through subsidiaries including Yicheng, Corenel, Jiekai, and Hunan Ruixi, and an equity investee company, Jinkailong, involved in various aspects of automobile transactions and services.
• Automobile Transaction Services: Services include automobile operating leases, NEV leasing services, automobile purchase services, monthly service commissions, auto financing, and other supporting services.
• Revenue Segments: Revenue is generated from several service lines, including auto operating leasing, NEV leasing, automobile purchase services, and auto commissions.
• Sales Units: As of March 31, 2025, the company facilitated financing for 312 automobiles, sold 1,516 automobiles, and delivered 2,116 automobiles under operating leases and 191 under financing leases.
• Discontinued Operations: The company discontinued its online ride-hailing platform services in August 2024, following the sale of its subsidiary XXTX.
• Geographical Performance: The company operates primarily in Chengdu and Changsha, China, focusing on the local ride-hailing market and related automobile services.
• Risk Management: The company conducts assessments and evaluations of prospective online ride-hailing drivers to mitigate risks associated with its services.
• Competition: The online ride-hailing industry in China is highly competitive, with significant competition from companies like Didi Chuxing and other local service providers.
• Regulatory Environment: The company operates under various regulations related to cybersecurity, information security, online ride-hailing, vehicle rental services, and financial leasing in China.
• Future Outlook: The company aims to continue focusing on its core automobile transaction and related services, adapting to regulatory changes and market demands in China.

Strategic Initiatives

• Strategic Initiatives: The company has focused on expanding its automobile transaction and related services, particularly in the online ride-hailing industry in China. This includes providing operating leases, financial leasing, and other related services to ride-hailing drivers. The company has also divested its online ride-hailing platform services to streamline operations and focus on its core business areas.
• Capital Management: The company has financed its operations primarily through equity offerings, stockholder loans, commercial debt, and borrowings from financial institutions. It has also engaged in cost control measures to streamline expenses and improve its financial position. The company has a working capital deficit and is actively seeking additional financing to meet its obligations and sustain operations.
• Future Outlook: The company plans to alleviate its going concern risk by pursuing equity financing, exploring other available sources of financing, and seeking financial support from related parties. It aims to continue expanding its automobile leasing business and improve its service offerings to attract more customers. The company acknowledges the need for additional financing to meet its working capital requirements and debt obligations in the coming year.

Challenges and Risks

• Market Competition: The company faces intense competition in the online ride-hailing market in China, particularly in key markets like Chengdu and Changsha. This competition is characterized by rapid technological changes and shifting user preferences, which could lead to a loss of market share and adversely affect business operations and financial condition.
• Regulatory Risks: The company is exposed to significant regulatory risks, particularly in China, where the online ride-hailing industry is highly regulated. Compliance with PRC online ride-hailing-related laws is critical, and failure to comply could result in penalties and negatively impact operations. The company must navigate complex PRC regulations regarding foreign investment, data security, and telecommunication business certificates, which could impose additional compliance costs and operational restrictions.
• Operational Risks: Operational risks include the potential for illegal or inappropriate activities by customers, which could harm the company's reputation and financial condition. The company also faces challenges in managing disintermediation and fraud by users, which could materially affect business outcomes. Additionally, the company is exposed to credit risk in its auto businesses, and failure to manage this risk could adversely impact financial results.
• Management Strategies: Management has identified the need to strengthen relationships with existing partners and develop new ones to support business growth. The company is also focused on enhancing its risk management systems to better assess and mitigate credit risks. Efforts are being made to improve internal controls over financial reporting, as material weaknesses have been identified, including insufficient personnel with appropriate accounting knowledge and deficiencies in IT general controls.
• Market Risks: The company is subject to market risks related to fluctuations in exchange rates, which could materially affect financial results. Additionally, government policies on automobile purchases and usage in the online ride-hailing industry may impact operations, particularly with the emphasis on new energy vehicles (NEVs). The company is working to strengthen cooperation with NEV manufacturers to secure favorable terms for business expansion.

SEC Filing: Senmiao Technology Ltd [ AIHS ] - 10-K - Jul. 10, 2025