Breaking Down Smart Powerr Corp. (CREG) Financial Health: Key Insights for Investors

You're looking at Smart Powerr Corp. (CREG) and seeing a classic high-stakes puzzle: massive liquidity against clear operational distress. The direct takeaway is that while the balance sheet offers a significant safety net, the underlying business is still struggling to find its footing, demanding extreme caution. For the last 12 months, the company generated impressive positive free cash flow of $53.22 million and boasts a current ratio of 8.97, which is defintely a sign of strong short-term financial health and a low Debt/Equity ratio of just 0.03. But, this liquidity is currently masking deep-seated issues, evidenced by the Q3 2025 earnings per share (EPS) of -$0.08 and a trailing EPS of -$1.73. The Altman Z-Score of 0.84 screams a high risk of financial distress, and the stock price has plummeted -78.25% over the last 52 weeks, plus the shares outstanding ballooned by over 1,337% in one year, which is a serious dilution event you can't ignore. Here's the quick math: they have cash, but they're burning through it operationally, so the next move must be about unit economics, not just survival.

Revenue Analysis

You need to know where Smart Powerr Corp.'s (CREG) money is actually coming from, and honestly, the picture is complex because their operational revenue remains minimal, masking a huge balance sheet transformation. The company is in a deep strategic pivot, moving away from its legacy waste energy recycling business toward high-growth energy storage integrated solutions in China.

For the nine months ended September 30, 2025 (9M 2025), the total operating revenue was only around $174,000. This negligible top-line number is a clear signal that the legacy business is effectively non-operational. For context, the entire 2024 fiscal year revenue was essentially $0.0.

Here's the breakdown of what little revenue is currently flowing:

• Primary Source: A single, new 10-year Operation and Maintenance (O&M) contract.
• Q3 2025 Contribution: This single source generated $90,820 in revenue for the third quarter alone.
• Legacy Systems: Revenue from the legacy waste heat recovery systems is stalled, with five key power systems non-operational.

The year-over-year revenue growth rate is highly volatile and misleading due to the near-zero base. While the Q2 2025 revenue of $62.2k was reported as up 201.6% from the previous quarter, that spike is from an extremely low starting point and doesn't signal a sustainable operational turnaround yet. The real story is that the company's new energy storage business, which is the future focus, is currently non-operational.

The most significant change isn't in revenue, but in liquidity, which is crucial for their strategic shift. Cash surged from just $25,000 at year-end 2024 to a massive $132 million by the end of Q3 2025. This cash influx was inorganic, meaning it didn't come from sales; it was driven by asset recovery-specifically, collecting $56 million in short-term loan receivables and recovering $65.6 million in advance payments to a failed supplier.

What this estimate hides is the ballooning cost structure; General and Administrative expenses surged 232% Y/Y to $2.5 million for 9M 2025, leading to a 9-month net loss of $2.4 million against negligible sales. This high fixed-cost base means Smart Powerr Corp. must defintely execute on the unproven energy storage segment fast.

For a deeper dive into how this cash position impacts their valuation, you can read the full report at Breaking Down Smart Powerr Corp. (CREG) Financial Health: Key Insights for Investors.

Profitability Metrics

When you look at Smart Powerr Corp. (CREG), the profitability picture is a classic study in contrasts, showing strong operational execution but significant overhead costs. The headline is clear: the company is generating a solid gross profit but is bleeding cash further down the income statement, which is a major red flag for investors.

For the trailing twelve months (TTM) ending around mid-2025, the company's financial health shows a critical disconnect between its core business efficiency and its total cost structure. Here's the quick math on the key margins:

• Gross Margin: 45.85%
• Operating Margin: -1,581.90%
• Net Profit Margin: -3,620%

That 45.85% Gross Margin is defintely a bright spot, showing that the cost of goods sold (COGS) is well-managed relative to revenue. It provides evidence of operational efficiency in their waste energy recycling projects. But, once you factor in all the operating expenses-like selling, general, and administrative (SG&A)-the Operating Margin tanks to a staggering -1,581.90%. This tells you the company's overhead is crushing the gross profit, and that's before even accounting for interest and taxes.

Trends in Profitability and Operational Efficiency

The trend in profitability is concerning. The TTM Net Income ending June 30, 2025, was a loss of -$3.0M. To put that in perspective, the net loss for the full fiscal year 2024 was smaller, at -$1.6M. This indicates that the rate of loss has worsened significantly in the most recent reporting period, which is a trend you cannot ignore. The revenue has also been reported to have 'skidded down the slope to mere thousands,' which amplifies the negative margin figures.

Operational efficiency, beyond the gross margin, also shows weakness. Metrics like Return on Assets (ROA) at -1.27% and Return on Invested Capital (ROIC) at -1.39% confirm that the company is not effectively using its assets or capital to generate profit. This is a clear action point for management: get more from the assets you own.

Industry Comparison: A Major Gap

To truly understand the severity of CREG's position, you have to compare it to its peers in the Utilities - Renewable sector. The gap is enormous, which signals a fundamental challenge in their business model or execution. For example, look at the Return on Equity (ROE), which measures how much profit a company generates with the money shareholders have invested. Here's how Smart Powerr Corp. stacks up:

A negative ROE of -2.7% means the company is destroying shareholder value, not creating it. The industry average of 13.4% shows that profitable, value-creating models exist, but CREG is nowhere near them. The negative margins and ROE are the core reasons why the TipRanks' AI Analyst assigned an 'Underperform' rating, citing zero revenue and ongoing losses as significant concerns. For more on the company's long-term vision, you can review their Mission Statement, Vision, & Core Values of Smart Powerr Corp. (CREG).

Debt vs. Equity Structure

You're looking at Smart Powerr Corp. (CREG) and wondering how they fund their operations-it's a fair question, especially in the capital-intensive utility sector. The direct takeaway is that Smart Powerr Corp. operates with an exceptionally low amount of financial leverage (debt), relying almost entirely on equity, which is highly unusual for a utility company.

As of the trailing twelve months (TTM) ending June 30, 2025, the company's total debt is minimal at around $4.82 million. What's interesting is that the vast majority of this is classified as short-term, with a current portion of long-term debt and capital lease obligation listed at $4.42 million. This means nearly all of their debt comes due within the next year.

Here's the quick math: with total debt at roughly $4.82 million and common equity at a substantial $116.09 million, the company's Debt-to-Equity (D/E) ratio is remarkably low at approximately 0.03 (or 3%). That's a defintely low number.

What this ratio hides is the industry context. Utilities are capital-intensive, meaning they need huge upfront investment for infrastructure like power plants or recycling facilities, so they typically carry high debt levels. The average D/E ratio for the broader Utilities Select Sector SPDR ETF (XLU) is closer to 1.84, and the general utilities sector often sees ratios of 0.5 and above. Compare CREG's 0.03 to the industry average, and you see a company that is almost debt-free, which reduces interest rate risk but may signal a lack of large-scale, debt-financed growth projects.

Smart Powerr Corp. has been actively focused on equity funding in 2025. This is the clearest sign of their financing strategy: lean on debt, raise equity. On November 10, 2025, the company completed a private placement, raising substantial gross proceeds of $22,185,000. This issuance involved 17,000,000 units, each consisting of one common share and one warrant, injecting fresh capital directly into the business. Also, to address a Nasdaq compliance issue, they executed a 1-for-10 reverse stock split on July 18, 2025, which is an equity-side maneuver aimed at increasing the share price to maintain their listing.

The company's financing balance is heavily tilted toward equity, which provides a strong balance sheet but may also limit the scale of their waste energy recycling projects, which often thrive on leveraged (debt-financed) models like Build-Operate-Transfer (BOT). This is a low-leverage, high-liquidity profile, but it comes with the trade-off of potentially slower asset growth. For a deeper dive into who is buying this equity, you should check out Exploring Smart Powerr Corp. (CREG) Investor Profile: Who's Buying and Why?

• Total Debt (TTM Jun '25): $4.82 million
• Common Equity (TTM Jun '25): $116.09 million
• Debt-to-Equity Ratio: 0.03
• Industry D/E Average (Utilities): ~1.84

Liquidity and Solvency

You're looking at Smart Powerr Corp. (CREG)'s balance sheet and seeing a massive, almost unbelievable jump in cash. The direct takeaway is this: Smart Powerr Corp. has engineered a profound, albeit inorganic, liquidity transformation, giving them significant dry powder for their strategic pivot.

As of the third quarter of 2025, the company's liquidity position is defintely a strength on paper. The Current Ratio and the Quick Ratio both stand at an extremely healthy $\mathbf{8.97}$. Here's the quick math: a ratio of nearly $\mathbf{9}$ means the company has $\mathbf{\$8.97}$ in liquid assets for every dollar of short-term debt. A ratio this high signals zero immediate risk of meeting current obligations, which stood at a manageable $\mathbf{\$14,725,256}$ in current liabilities as of September 30, 2025.

Analysis of Working Capital Trends

The trend in working capital is the key story here. Smart Powerr Corp.'s working capital has exploded, but this increase is almost entirely inorganic. Cash surged from a mere $\mathbf{\$25}$ thousand at year-end 2024 to $\mathbf{\$131.88}$ million by Q3 2025. This massive influx wasn't driven by selling their core product; it was a one-time balance sheet clean-up and a capital raise. The company successfully recovered $\mathbf{\$56}$ million in short-term loan receivables and $\mathbf{\$65.6}$ million in advance payments to a failed supplier.

• Cash surged to $\mathbf{\$131.88}$ million by Q3 2025.
• Working capital is strong, but not operationally generated.
• The high ratio provides a cushion for the new energy storage pivot.

Cash Flow Statements Overview

The cash flow statement for the nine months ended September 30, 2025, perfectly illustrates this non-operational liquidity. The cash flow from operating activities (CFO) was a positive $\mathbf{\$64,443,002}$. But wait, the company only generated $\mathbf{\$174}$ thousand in revenue for the same period, resulting in a $\mathbf{\$2.4}$ million net loss. So, how is CFO positive? That $\mathbf{\$64.44}$ million in operating cash flow is largely the result of collecting those old, non-core receivables and advances-a massive change in non-cash working capital items, not profitable sales. That's a one-off event. It's a cash-in, but it's not a sustainable business model yet.

The other cash flow movements are also critical:

Liquidity Concerns and Strengths

The strength is obvious: the company has over $\mathbf{\$130}$ million in cash to fund its pivot into high-growth energy storage integrated solutions in China. That's a huge strategic advantage. The concern, however, is the operational cash burn. The legacy waste heat recovery business is essentially non-operational, and the company posted a $\mathbf{\$2.4}$ million net loss for the nine-month period. General and administrative expenses alone surged $\mathbf{232\%}$ to $\mathbf{\$2.5}$ million. This high fixed-cost base means the new energy storage segment must generate material revenue quickly to prevent the rapid depletion of this newly secured capital. For a deeper dive into who is betting on this pivot, you should read Exploring Smart Powerr Corp. (CREG) Investor Profile: Who's Buying and Why?

The action item is clear: monitor the Q4 2025 and Q1 2026 reports for the first signs of revenue and positive cash flow from the new energy storage business, not from asset recovery.

Valuation Analysis

You're looking at Smart Powerr Corp. (CREG) and seeing a stock price that has cratered, so the first question is always: is this a deep-value opportunity or a value trap? The raw numbers suggest the former, but the market's action is defintely screaming the latter. As of mid-November 2025, the stock trades around $1.36, and while its Price-to-Book (P/B) ratio is an extremely low 0.04, the negative earnings and severe price trend map out a clear risk profile. A P/B this low means the market values the company's equity at just four cents on the dollar of its book value-a classic indicator of potential undervaluation, but only if profitability is on the horizon.

Key Multiples: What the Ratios Tell Us

When a company is struggling with profitability, traditional metrics like Price-to-Earnings (P/E) become less useful. Smart Powerr Corp. currently has a negative P/E ratio, sitting around -0.79, because its earnings per share (EPS) are negative. This is a red flag: the company is losing money. Also, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio is negative at approximately -11.3x, which is primarily due to the Enterprise Value (EV) itself being negative at roughly -$98.89 million. Here's the quick math: a negative EV usually means the company has more cash than debt, or a large net cash position, but in this context, it mostly signals operational distress that overshadows the balance sheet's liquidity.

• P/E Ratio: -0.79 (Negative earnings make P/E less relevant).
• Price-to-Book (P/B): 0.04 (Suggests significant undervaluation relative to assets).
• EV/EBITDA: -11.3x (Negative, indicating a negative Enterprise Value).

Stock Trend and Analyst Consensus

The market has been brutal to Smart Powerr Corp. over the past year. The stock price has fallen by a staggering -80.01% over the last 12 months, with a 52-week trading range spanning from a low of $1.02 to a high of $14.70. This extreme volatility, plus the 1-for-10 reverse stock split in July 2025, signals a company fighting to maintain its Nasdaq listing and investor confidence. Still, the underlying business mission is critical, as you can see in their Mission Statement, Vision, & Core Values of Smart Powerr Corp. (CREG).

The lack of a dividend further simplifies the picture: Smart Powerr Corp. does not pay a dividend, so the dividend yield and payout ratio are both not applicable (N/A). The analyst community is equally cautious. The consensus rating from the single Wall Street analyst covering the stock is a clear Sell, with a predicted downside of -100.00%. That's a strong signal that the market sees the operational risks as far outweighing the low valuation multiples.

The low P/B ratio suggests an asset-rich company, but the negative P/E and the analyst consensus suggest those assets are not generating sufficient returns or are at risk. Your next step should be to look closely at the balance sheet and cash flow statement to see if that -$98.89 million Enterprise Value is truly a net cash buffer or if it's masking significant operational cash burn. Finance: check the quarterly free cash flow trend by end of next week.

Risk Factors

You're looking at Smart Powerr Corp. (CREG) and seeing a company in the middle of a major strategic pivot, but you need to map the risks before you commit capital. The direct takeaway is this: Smart Powerr Corp. faces critical financial and operational risks due to a lack of revenue and reliance on a capital-intensive business model, which is only partially offset by a strong balance sheet liquidity and a strategic shift to energy storage.

Honestly, the biggest near-term risk is the lack of a functioning business model that generates sales. The company reported $0 million in sales and $0 million in Gross Profit for both the years ended December 31, 2024, and 2023. This led to a Net Loss of over $(1,559,012) million in 2024, reflecting a basic and diluted Net Loss Per Share of $(0.18). That's a fundamental problem: zero revenue means zero margin for error.

Operational and Financial Headwinds

The core business-waste energy recycling using a Build-Operate-Transfer (BOT) model-requires substantial upfront investment, making it vulnerable to cash flow discrepancies. Plus, their reliance on a consistent waste energy supply from customers for power generation is a huge single point of failure that could adversely affect revenues. Here's the quick math on their financial stability versus profitability:

• Liquidity Strength: The Current Ratio is high at 8.97, and the Debt/Equity ratio is very low at 0.03. They aren't saddled with debt.
• Profitability Weakness: The Altman Z-Score, a measure of bankruptcy risk, is a concerning 0.84. A score under 3 suggests an increased risk of bankrupcy.

The good news is that operating cash flow for the last 12 months was $54.01 million, with Free Cash Flow at $53.22 million, which is a defintely needed cushion to fund operations for the next year, but the long-term going concern depends on generating sufficient revenue and securing favorable financing terms to avoid stockholder dilution.

External and Regulatory Pressures

Smart Powerr Corp. operates primarily in China, which introduces a layer of geopolitical and regulatory risk you can't ignore. Changes in Chinese laws, like the Foreign Investment Law and cybersecurity regulations, can shift the goalposts quickly. Also, the energy market itself is volatile.

External risks are complex, but they boil down to a few key areas:

• Market Volatility: Fluctuations in the prices of coal, oil, and gas directly impact the economics of their waste energy recycling projects, potentially reducing customer demand.
• Government Support: Changes in Chinese government support for green energy technologies or shifts in electricity demand and pricing can impact growth prospects.
• Foreign Exchange Risk: As a US-listed company with primary operations in China, fluctuations in the value of the Renminbi against the US Dollar will impact reported financial results and their ability to repatriate profits.

Mitigation and Strategic Pivot

The company is not standing still; they are actively trying to mitigate these existential risks through a strategic transformation. The biggest move is shifting from a pure waste energy recycler to an energy storage integrated solution provider. This is a clear attempt to diversify and tap into high-growth segments like large-scale photovoltaic (PV) and wind power stations, plus smart energy cities.

On the compliance front, management took direct action to address the Nasdaq delisting risk. They executed a 1-for-10 reverse stock split in July 2025, which helped them regain compliance with the Nasdaq Capital Market's minimum bid price requirement in August 2025. That was a necessary, though not sufficient, step to maintain investor confidence. To truly understand the market's reaction to these moves, you should be Exploring Smart Powerr Corp. (CREG) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking at Smart Powerr Corp. (CREG) and seeing a classic high-risk, high-reward setup. The direct takeaway is this: CREG's future hinges on its strategic pivot from pure waste energy recycling to an integrated green energy solutions provider, but near-term profitability remains a serious challenge. Their move into energy storage and charging is a defintely necessary step, but it's still early days for the financial results to catch up.

Strategic Pivot to Integrated Solutions

The company's primary growth driver is a decisive strategic shift toward integrated energy solutions, a move that aligns perfectly with China's 'dual carbon' objectives. This isn't just a vague idea; it's a concrete partnership with Shidai Huazhi (Jiangsu) Energy Technology Co., Ltd.. This strategic cooperation focuses on bundling photovoltaic, energy storage, charging, and inspection services. That's a smart play.

The product innovation here is the plan for ultra-fast charging stations equipped with lithium iron phosphate batteries, plus intelligent microgrid systems. This is a significant market expansion beyond their traditional Build-Operate-Transfer (BOT) model in industrial waste energy recycling. They are essentially trying to capture more value across the entire energy chain, not just the back-end recycling.

Capital Infusion and Operational Wins

To fund this pivot and stabilize operations, Smart Powerr Corp. has been active on the capital front in 2025. They completed a registered direct offering in March, selling 4,060,000 shares of common stock at $0.61 per share. Plus, a later private placement funding in late 2025 raised a substantial $20M. That cash is the fuel for their new initiatives.

Also, an operational win that can't be understated is regaining Nasdaq compliance in August 2025. This followed a 1-for-10 reverse stock split in July 2025. Losing the Nasdaq listing would have been a catastrophic blow to investor confidence and capital access, so this move buys them critical time. You can dive deeper into who is betting on this turnaround by Exploring Smart Powerr Corp. (CREG) Investor Profile: Who's Buying and Why?

Projections and Profitability Reality Check

Here's the quick math on the near-term picture: While the strategic direction is positive, the financial metrics for 2025 still show a company struggling for profitability. Q2 2025 revenue was only $62.2k, though that was a 201.6% jump from the previous quarter. Still, Q3 2025 actual Earnings Per Share (EPS) came in at -$0.08.

The market is clearly pricing in the future potential, not the current financials. One forecast suggests an average stock price of $1.7938 for 2025, which would be a +24.14% rise from a recent price. But this estimate hides the fact that most analysts lack the data to reliably forecast future earnings, and the company is still dealing with negative cash flow.

The competitive advantage lies in their historical BOT model in waste energy recycling, but they face intense competition from both domestic and international players in the broader renewable energy sector.

If they can't translate their new partnerships and R&D investments into significant revenue within the next two quarters, the market's patience will wear thin. Your next step is to monitor the Q4 2025 earnings report for any concrete revenue contribution from the Shidai Huazhi partnership.