GTEC Advances Dilutive Equity Raise with SEC-Approved Business Combination Vote

What happened

Greenland Technologies announced the SEC has declared effective the registration statement for its business combination with Pelican Acquisition Corporation, scheduling a shareholder vote for March 17, 2026. This step formalizes the pending 6-million-unit equity offering at ~$0.99 per unit, which the DeepValue report highlights as a ~35% dilutive event aimed at funding HEVI expansion and managing PRC liquidity. Current earnings rely on aggressive R&D cuts and favorable raw-material costs, with transmission gross margins around 30-32% but vulnerable to OEM pricing pressure in China. The HEVI EV business remains immaterial at ~$2M annualized revenue, raising doubts about growth execution amid governance concerns like low AGM participation. Investors now face a binary outcome: approval could provide capital but dilute per-share value, while rejection might strain liquidity and delay strategic plans.

Implication

Approval of the business combination likely triggers the ~35% equity dilution at ~$0.99 per unit, compressing per-share earnings and requiring a re-rating based on fully diluted metrics around $0.45-$0.60 EPS. Liquidity may improve, but proceeds must demonstrably boost HEVI revenue beyond its current ~$2M run-rate to justify the capital allocation amid weak EV adoption signals. Margin sustainability in the core transmission business becomes more critical post-dilution, with any slippage below 25% gross margin risking further downside to the $0.80 bear-case value. Governance risks are heightened by the vote itself, as low shareholder turnout or control issues could undermine confidence in future capital decisions and internal controls. Investors should avoid new positions until after the deal closes, focusing on Q4-25 results and AR quality to gauge if current profitability translates into durable cash flow.

Thesis delta

The SEC effectiveness confirms the dilutive equity raise is progressing as anticipated, aligning with the report's caution on entering before deal completion. No fundamental shift occurs, but the scheduled vote intensifies focus on shareholder approval and post-raise earnings normalization, underscoring the need to monitor margin trends and HEVI traction closely over the next 3-6 months.