U Power Limited Class A Ordinary Shares (UCAR) fair value

ACCE thesis

U Power is a small Chinese company that sells and services battery swap and charging solutions for electric vehicles, a niche inside the broader auto dealership space. The reported gross margin of 36.3% is respectable for hardware and service sales, but an operating margin of -174.4% shows the cost base is far too large for current revenue. Revenue fell 24.8%, and return on equity sits at -26.4%, so the business is shrinking while it burns through its equity. The thesis rests on whether swap-station demand in China can scale fast enough to close that gap, and the figures given to us show no sign of that yet. At a market capitalisation of roughly $6 million and a composite score of 29/100, the name is not on a screen we would act on without a far more detailed look at liquidity, financing needs and the operating roadmap.