(CapitalWatch, May 12, New York) Luokung Technology Corp. (Nasdaq: LKCO) reported record revenue growth for its breakthrough year 2021 as the company's location-based services (LBS) business has taken off.
In the statement on Wednesday after the markets closed, the China-based company disclosed revenue of $145.1 million for the 12 months through December compared with $18.3 million for 2020.
Luokung is China's leading spatial-temporal intelligent big data services company and provider of interactive location-based services and high-definition maps. The company was able to achieve considerable growth after its acquisition of eMapgo Technology and the integration of its smart transportation, smart natural resource asset management, and LBS into its business.
The chairman and chief executive of Luokung, Xuesong Song, said in the statement today that the growth was spurred specifically by "LBS advertising business as a result of the integration and improvement of geographic information points of interest (POI), characteristic areas of interest (AOI) and other data with AI algorithms, which subsequently led to a growing customer base and increased demand."
The company said it has also significantly increased its R&D team and is set to continue strengthening its strategic position and competitive advantage in its core three businesses, as well as diversify its revenue streams with increased contributions from smart transportation and software and services.
Luokung said its gross profit margin increased to 11.1% in 2021 from 4.3% in 2020, and anticipates a continuous improvement.
Significantly, Song noted that Luokung saw increased cost of services and operating expenses last year but expects the R&D investments as a percentage of total revenues to remain stable. The cost of revenues last year increased to $129 million from 17.5 million in 2020, while operating expenses had doubled to $81.7 million.
Net loss was $61.5 million, or 21 cents per share, compared with losses of $40.1 million, or 18 cents a share, for the preceding year.
"We remain optimistic about our growth prospects from all lines of business in 2022 with the positive momentum we built in 2021," Song added.
In recent months, Luokung announced the strategic acquisition of Beijing Hongda Jiutong Technology Development to supplement its HD map business and optimize its vehicle-to-road system. Hongda Jiutong collects traffic information and discrete vehicle data to provide big data services for intelligent transportation and connected vehicles in China.
Covering roads nationwide and reaching 10 million vehicles, Hongda Jiutong provides safe, energy-efficient, and smart transportation services to its OEM customers, including real-time vehicle operation data analysis and vehicle energy-saving solutions. The acquisition by Luokung is expected to close in the second quarter.
In other recent developments, Luokung has integrated its mapping services into two new vehicle models of Ford Motor Co. (NYSE: F) this year, the Ford EVOS and Mustang Mach-E. And it's far from Luokung's only partnership with global brands: Among the company's partners are Microsoft (Nasdaq: MSFT), Geely Auto (HKEX: 0175), and Zenseact, a provider of Advanced Driver Assistance Systems operated by Volvo (OTC: VLVLY).
Further, Luokung announced the launch of its remote sensing holographic spatial-temporal portfolio of products and services, which, the CEO believes, will serve as another growth driver for Luokung. According to the company, select products have been successfully applied as pilot projects in Huangshan and Jixi, Anhui Province, in Jixian, Heilongjiang Province, and in other county-level regions.
Lastly, this month, Luokung announced that its operating affiliate, Beijing BotAiot Intelligent, has landed a contract to provide electronic blockchain data and certificate storage platform services to improve the efficiency of highway transport infrastructure and equipment calibration and to enhance traffic flow rates.
Earlier, CapitalWatch featured Luokung as a top stock pick under $1 per share for its partnerships and collaborations. Today, LKCO stock traded at 43 cents a share – a bargain, considering the fundamentals.
The earnings call is set to take place on the morning of May 12.
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