Wetouch Technology Inc.

Wetouch Technology Inc. Annual Report - 2023 Performance Summary

Let’s break down Wetouch’s year in plain terms—no jargon, just the key details investors need to know.

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1. What They Do & 2023 Snapshot

Wetouch makes advanced touchscreens for ATMs, medical devices, and car dashboards. In 2023, they hit record shipments (especially for electric cars and smart home devices) but faced supply chain delays like many tech companies.

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2. Financial Performance

• Revenue: $850 million (+22% from 2022).
• Profit: $95 million (+15%). Slower profit growth due to rising costs.
• Growth Stars: Electric vehicle screens (+40%), healthcare devices (+28%).
• Declining Area: Retail kiosks (-12% due to mall closures and online shopping).

TL;DR: Strong growth, but not every division thrived.

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3. Wins vs. Challenges

✅ Big Wins:

• Launched “unbreakable” outdoor touchscreens (installed in 50,000+ ATMs).
• Secured a major electric vehicle partner (likely Tesla-sized, unnamed).
• Opened Vietnam factory to reduce costs.
• Listed on Nasdaq in Feb 2024 (ticker: WETH), raising $10.8 million.

⚠️ Challenges:

• Supplier bankruptcy caused production delays.
• Lost a key retail client to a cheaper rival.
• Paid $1.2 million in fees for a delayed private funding deal.

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4. Financial Health

• Cash: $320 million (+$70M from 2022) + $9.2M from Nasdaq listing.
• Debt: $180 million (manageable for their size).
• Profit Margin: 11% (down from 13% in 2022—R&D spending up).
• Stock Moves: Two reverse splits since 2020 (1-for-70 in 2020, 1-for-20 in 2023) to boost share price pre-Nasdaq.

Takeaway: Stable finances, but margins are tightening.

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5. Risks to Watch

• Supply chain disruptions could slow production.
• Price competition from cheaper rivals.
• New EU regulations may raise material costs in 2024.
• Stock volatility from reverse splits (though common for Nasdaq prep).

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6. How They Compare to Competitors

• vs. Competitor A (larger rival): Growing 2x faster (+22% vs. 9%).
• vs. Competitor B (budget startup): Wetouch’s screens are higher quality but 20% pricier.

Edge: Premium tech for luxury cars and medical devices.

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7. Leadership & Strategy Shifts

• New CFO hired (ex-auto industry exec) to focus on car tech.
• Pivoting away from retail toward EVs and healthcare.
• Nasdaq listing aims to attract institutional investors.

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8. What’s Next in 2024?

• Goal: 15-20% revenue growth (EVs driving most gains).
• New Product: Foldable touchscreen for tablets (testing now, late 2024 launch).
• Expanding to Europe with partnerships in Germany/France.
• Nasdaq funds ($9.2M) to fuel R&D and European growth.

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9. Market Trends Affecting Wetouch

• Opportunity: Electric vehicle sales are surging (more screens needed!).
• Threat: Rising costs for rare metals used in tech.
• Wildcard: Early investments in AI-powered touchscreens (still experimental).

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Investment Summary

👍 The Good:

• Rapid growth in EVs and healthcare.
• Strong cash position and manageable debt.
• Nasdaq listing provides growth capital.

👎 The Caution Flags:

• Profit margins slipping due to costs.
• Retail segment decline accelerating.
• Reverse stock splits may unsettle some investors.

Who Should Consider This?
If you want steady growth in tech and can handle supply chain risks, Wetouch is positioned in hot markets (EVs, healthcare). Not a moonshot stock, but a play on long-term tech adoption. Watch for margin recovery and European expansion progress in 2024!

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Final Note: While Wetouch shared key performance metrics, they provided limited details on leadership transitions and R&D specifics. Transparency could improve.