GTEC Stock: Greenland Technologies Flies on a New Agreement

Greenland Technologies Holding Corp (NASDAQ: GTEC) is gaining in multiples in the market this morning after announcing that it has entered into an agreement surrounding the support of its production of electric industrial vehicles in the United States. 

Here’s what’s happening:

Skip to What You Want to Read

Greenland Technologies Announces Agreement

In a press release issued early this morning, Greenland Technology announced that it has entered into a cooperation agreement with Fujian South China Heavy Machinery Manufacture Co. Ltd., also known as SOCMA. 

SOCMA is a leading design, manufacture, and distribution of heavy industry machinery and vehicles company. 

Under the terms of the agreement, SOCMA’s existing supply-chain and certain technologies will be used to support GTEC in its production of electric industrial vehicles in the United States. Moreover, the agreement includes a commitment by GTEC to invest in the U.S. as a key center of innovation in the global electric vehicles market. 

As a result of the agreement, the two parties will work to establish a strategic partnership to fully cooperate on technology sharing and supply chain management for the production of electric industrial vehicles in the United States. As part of that commitment, SOCMA has agreed to provide and supply to GTEC the materials, parts and components, and related supply chain required for the development and manufacture of electric industrial vehicles. 

This gives GTEC the ability to use all relevant SOCMA technologies and patents for the purpose of engineering vehicle parts and materials free of charge. Ultimately, this will assist in speeding up the launch of these vehicles. 

Management Commentary

In a statement, Rrmond Wang, CEO at Greenland Technologies, had the following to offer:

We are excited to partner with SOCMA, a proven leader in the manufacture of heavy machinery, and see this as a positive development, which will ensure the utilization of SOCMA’s existing supply-chain for GTEC’s U.S. production of its electric industrial vehicles. This cooperation agreement was designed to leverage both companies’ expertise, best practices and vast proprietary knowledge for our mutual benefit, and enhancement of our respective competitive positions.

For GTEC, this cooperation will accelerate our electric industrial vehicle production in the United States. We believe the competitive advantage we will gain by now having access to SOCMA’s supply chain, technologies and patents is invaluable. Today’s announcement is a first but very important step. We look forward to sharing additional details as we progress, with initial production of our own electric, GTEC’s first industrial vehicle, integrating our own components, targeted between 3Q 2021 and 4Q 2021. We plan to focus on the 1.8 ton electric load vehicle segment, given the addressable market size and favorable competitive environment. We believe this will significantly expand GTEC’s long-term growth prospects and ability to build shareholder value.

Risks to Consider Before Buying GTEC Stock 

Before making the decision to jump into GTEC stock, it’s important to consider the risks. After all, every investment you make will come with the risk of loss. When it comes to an investment in Greenland Technologies, the most significant risks to consider include:

  • Speculation. Greenland Technologies is a relatively young company that doesn’t necessarily have a proven business model. As a result, an investment in the company is a speculative bet, which could prove to be a dangerous concept. 
  • Capital Risk. As a new company, GTEC hasn’t quite reached profitability. Until it does, it will have to rely on the money it has in the bank to survive. Of course, if this isn’t enough, other opportunities will be explored. In most cases, when funds run dry on new companies, these companies seek to raise funds by issuing new shares, ultimately leading to dilution of existing shareholder value and declines in the stock. 
  • Volatility. Finally, GTEC stock is known for high levels of volatility. This makes entrance and exit decisions difficult and could lead to significant losses over a very short period of time. 

Final Thoughts

Sure, there are risks to consider here, but given today’s news, it’s hard to ignore Greenland Technologies. Ultimately, the company has the potential to become a big player in the emerging electric vehicles market. 

Now, with the agreement signed, the company has further access to technologies, supply chains, and other factors that will help to speed up the production process. All in all, GTEC stock is one for the watchlist. 

Don't Miss the Next Big Story

Join our free mailing list below to receive real-time, actionable alerts!