What happened
Shares of EV battery maker Microvast Holdings (MVST -1.32%) had risen more than 30% year to date before investors sold in droves today. After seeing its fourth-quarter and full-year 2021 earnings report last night, investors are taking those 2022 profits. After dropping as much as 15% earlier today, Microvast stock was lower by 9.7% as of 1:56 p.m. ET.
So what
The company's fourth-quarter report closes out its first fiscal year as a public company after it merged with a special purpose acquisition company (SPAC) in July 2021. While its sales soared 41% for the full year 2021, so did its net loss. Microvast reported a loss of $33.6 million in 2020 on revenue of almost $108 million. But even with sales growing to $152 million in 2021, its net loss rocketed to more than $206 million.
Image source: Microvast Holdings.
While the company sees another year of 40% revenue growth in 2022 at the midpoint of its guidance, it didn't give investors an estimate for the bottom line. But with 2022 capital expenditures expected to be between $300 million and $350 million, it's safe to say Microvast won't be close to turning a profit this year either.
Now what
Those investments are being made to grow the business in the long term. The company said it expects its capital to mainly be used for "ongoing manufacturing capacity expansions in Huzhou, China and Clarksville, Tennessee, as well as research and development projects at the Company's facility in Orlando, Florida."
Microvast ended 2021 with about $536 million in cash. That should be enough to keep its growth going without needing additional capital this year. But investors seem to be looking beyond that today, driving shares down without visibility for its first profits.
