Tantech's U.S. Subsidiary Signs $5 Million Sales Contract

Rhea-AI Summary

Tantech Holdings (NASDAQ: TANH) announced that its U.S. subsidiary, Gohomeway Group Inc, has secured a significant annual purchase agreement with Heidi Enterprise Group. The contract, signed on December 26, 2024, spans from January 2025 to December 2025, with monthly flooring product orders ranging from $400,000 to $500,000, totaling $5 million annually. This development represents a notable milestone in Tantech's U.S. market expansion strategy, with plans to develop a comprehensive distribution network and franchise system through Gohomeway Group Inc.

Positive

• Secured $5 million annual purchase agreement for flooring products
• Guaranteed monthly revenue stream of $400,000-$500,000
• Strategic expansion into U.S. market with established purchase commitment

Negative

• None.

Insights

Financial Analyst

The $5 million annual purchase agreement represents a strategic win for TANH, providing steady revenue visibility for 2025. Monthly purchases of $400,000 to $500,000 establish a reliable income stream, important for a micro-cap company with a market value around $1.36 million. The contract value surprisingly exceeds the current market capitalization by nearly 4x, suggesting potential market undervaluation or investor skepticism. The U.S. expansion through Gohomeway Group demonstrates geographic diversification from the Chinese market, though execution risks remain with planned distribution network development. The flooring products segment enters a competitive U.S. market worth over $24 billion, but success will depend on margin preservation and efficient distribution infrastructure. Simple explanation: Think of this like a small store getting a guaranteed customer who promises to buy $5 million worth of goods over a year - it's significant because the whole company is currently valued at much less than that amount by investors.

Market Research Analyst

The timing of this contract intersects with projected stability in the U.S. housing renovation market for 2025, despite higher interest rates. The $5 million commitment from Heidi Enterprise Group provides TANH a foothold in the U.S. flooring distribution landscape, though it represents less than 0.1% of the total market share. The planned franchise system expansion strategy aligns with successful models in the flooring industry, but requires substantial operational expertise and capital investment. Key risk factors include supply chain management, quality control across international operations and competitive pricing pressures from established players. Simple explanation: Imagine entering a huge market where giants like Home Depot already exist - while getting a guaranteed customer is great news, the company still needs to prove it can deliver quality products on time and build a reliable network of stores and dealers.

LISHUI, China, Dec. 27, 2024 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) ("Tantech" or the "Company") today announced that, on December 26, 2024, its U.S. subsidiary, Gohomeway Group Inc, signed an annual purchase agreement with Heidi Enterprise Group for the period of January 2025 to December 2025. Under the terms of the agreement, Heidi Enterprise Group will procure flooring products worth $400,000 to $500,000 monthly, totaling $5 million annually, from Gohomeway Group Inc.

This agreement marks a milestone in Tantech's successful expansion into the U.S. market.
Tantech's CEO, Wangfeng Yan, stated, "The substantial progress achieved in our construction materials sales in the U.S. reflects our commitment to market growth. We will continue to strengthen our efforts to expand operations in the U.S., aiming to establish a robust market ecosystem that is planned to include a comprehensive distribution network and franchise system through the operations of Gohomeway Group Inc."

About Tantech Holdings Ltd

For the past decade, Tantech has been a highly specialized high-tech enterprise producing, researching and developing bamboo charcoal-based products with an established domestic and international sales and distribution network. Since 2017, when the Company acquired 70% of Shangchi Automobile, a vehicle manufacturer based in Zhangjiagang City, Jiangsu Province, it has manufactured and sold vehicles. The Company established two new subsidiaries, Lishui Smart New Energy Automobile Co., Ltd. and Zhejiang Shangchi New Energy Automobile Co., Ltd., in November 2020, to produce and sell street sweepers and other electric vehicles. The Company is fully ISO 90000 and ISO 14000 certified and has received a number of national, provincial and local honors, awards and certifications for its products and scientific research efforts. The Company's subsidiary, First International Commercial Factoring (Shenzhen) Co., LTD, is engaged in commercial factoring for businesses in and related to its supply chain. For more information, please visit: https://tanhtech.com.

Forward-Looking Statements

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the sales, plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

For more information, please contact:

Tantech Holdings Ltd
Investor Relations
Tel: +86 (578) 226-2305
ir@tantech.cn 

View original content:https://www.prnewswire.com/news-releases/tantechs-us-subsidiary-signs-5-million-sales-contract-302339500.html

SOURCE Tantech Holdings Ltd.

FAQ

What is the value of Tantech's (TANH) new U.S. sales contract signed in December 2024?

Tantech's U.S. subsidiary signed a $5 million annual sales contract with Heidi Enterprise Group for flooring products.

How much monthly revenue will TANH generate from the Heidi Enterprise Group contract?

The contract specifies monthly purchases of flooring products worth $400,000 to $500,000.

When does Tantech's (TANH) new U.S. sales contract begin and end?

The contract period runs from January 2025 to December 2025.

What are Tantech's (TANH) expansion plans for the U.S. market through Gohomeway Group?

Tantech plans to establish a comprehensive distribution network and franchise system through Gohomeway Group Inc in the U.S. market.