GigaCloud Technology Inc. (GCT) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of GigaCloud Technology, Inc. Please note that today's meeting is being recorded. During the meeting, we will have a question-and-answer session. You can submit questions or comments at any time by clicking on the message icon if you are joining the meeting virtually. If you are joining the meeting at the physical meeting room you will be asked to raise your hands if you have any questions or comments when the Q&A session starts. It is now my pleasure to turn today's meeting over to Mr. Larry Wu, Chairman of the Board of Directors; and Chief Executive Officer of GigaCloud Technology Inc. The floor is yours.

Thank you for the introduction. Good morning, everyone. I want to welcome all of you to the Annual General Meeting of Shareholders of GigaCloud Technology, Inc., which I will hereafter refer as the company. I'm Larry Lei Wu, the Chairman of the Board of Directors of the company and its Chief Executive Officer. In accordance with the Article 69 of the company's Articles of Association, I will proceed as the Chairman of this meeting. Zoe Wong, General Counsel of the company, will act as the secretary of the meeting. Computershare will act as inspector of election and in that capacity, will swear an oath of inspectors that the duty of the inspector of election will be faithfully executed at this meeting with the strict [ partiality ] and according to the best of their ability.

Thank you, Larry. I'm Zoe Wong, General Counsel of the company and Secretary of today's meeting. Each of you who is basically attending the meeting should have registered at the desk as you enter the meeting. If there are any of you physically attending the meeting but who have not yet registered, please staff over to the desk and sign the register at this time. At point entering the meeting, each of you attending physically was presented with an agenda and a list of rules of conduct for the Annual General Meeting. To conduct an orderly meeting, we ask the participants abide by these rules and to remain silent throughout the meeting until the Q&A session. For shareholders and proxy holders who are physically attending the meeting, the Inspector of Elections will collect any outstanding ballots during the voting process. For shareholders who are virtually attending the meeting, the poll is open. If you have already appointed a proxy or proxies to vote on your behalf prior to the proxy cutoff date, you do not need to vote today unless you would like to change your vote. Thank you for your cooperation with these rules. We now move to the next agenda item. Notice of this meeting was dispatched by the company to its shareholders on April 26, 2024. If there is no objection from the floor, it is proposed to [ dispense ] with the formality of reading the notice. Copies of the notice and the proxy materials for the Annual General Meeting are available for inspections throughout this general meeting or any adjournment thereof. Only registered holders of ordinary shares of the company at the close of business on April 23, 2024, which is the record date for this meeting, are entitled to attend and vote at the Annual General Meeting.

Our first order of business at this meeting is to determine whether the shares represented at the meeting are sufficient to constitute a quorom for the purpose of transacting business. Secretary of the meeting. Do we have a report?

Yes. According to the memorandum and Articles of Association of the company, the quorum require a general meeting of shareholders consists of 1 or more shareholders of the company, holding shares, which carry in aggregate or representing by proxy, not less than 1/3 of all votes attaching to all shares in issue and entitled to vote at such general meeting, present in person or by proxy or if a corporation or other nonnatural person is duly authorized representative. The shareholders list shows that as of the record date, there were a total of 40,990,115 ordinary shares issued and outstanding, comprising 32,913,383 Class A ordinary shares and 8,076,732 Class B ordinary shares. Each Class A ordinary share is entitled to 1 vote and each Class B ordinary share is entitled to 10 votes. Therefore, the total number of votes attaching to all shares in issue and entitled to vote at this meeting is 113,680,703. The shareholders who are present at this meeting in person or by proxy or virtually hold shares, which in aggregate, 96,098,712 votes which is more than 1/3 of the total votes attaching to all shares in issue and entitled to attend and vote at this meeting. On such basis and in accordance with Article 66 of the company's Article of Association, I declare a quorum present at this Annual General Meeting.

Thank you because duly notice of this meeting has been given and quorum is present. I declare this meeting to be duly convened.

As set out in the notice, proposal will be considered and vote on at this meeting. In relation to proposal #1, the wording of the resolution is as follow. As a special resolution that the seventh amended and restated memorandum and Articles of Association of GigaCloud Technology, Inc. currently in effect, all the current memorandum and articles be amended and restated by their deletion in their entirety and a substitution in their place of the [ eighth ] amended and restated memorandum and Articles of Association, in the form attached as Exhibit A to the notice of the meeting. A copy of the [ eighth ] amended and restated memorandum and articles of association is available for inspection throughout this Annual General Meeting. Full details of proposal #1, including an explanation for the purpose of the proposed amendments and the effect of approval of the amendments were set out in the proxy materials for the meeting. Does anyone have any question related to proposal #1, if you wish to raise a question, you may raise your hand now. There were no questions related to proposal #1. The Board of Directors of the company has recommended that the shareholders vote for the resolution in proposal #1. In relation to Proposal #2, the wording of the resolution is as follows: as an ordinary resolution that the selection and appointment of KPMG Huazhen LLP margin an independent registered public accounting firm as the independent auditor of GigaCloud Technology, Inc. for the fiscal year ended December 31, 2024, and is hereby ratified and confirmed. A full description of proposal #2 was set out in the proxy materials for the meeting. Does anyone have any questions relating to Proposal #2, if you wish to raise the question, you may raise your hand now. We have a question related to proposal #2. Let me repeat the question so that everyone attending virtually here. A shareholder as the company as an American company, why are we using a Chinese-based auditor as the independent registered accountant?

Yes, it's a good question. I think number one, technically, it's not really a U.S. company, although we are being regulated as a new domestic company, but we are still a Cayman company, with the Cayman domicile. Although the regulation requires that we have a similar filing, everything requirement of -- as a domestic company will have. Also, the choice of using KPMG Huazhen is a legacy of the company's operation because the majority of the accounting team actually back office in China benefit of having lower operation cost. And also it's because we were not a technically S1 filer or being regulated as a domestic company. So we definitely do have the choice of choosing that the China-based auditor. And there was a law that could trigger some kind of delisting risk before December of 2022, but that concern has been removed. So it's not a kind of a legal requirement or legal risk we're dealing with, right now is a more commercial thing. And we believe, at least for now, we're looking at this issue very closely. But again, it's a commercial decision. We believe it's still the company's best interest to keep Huazhen, which is international accounting network to be our auditor. And there is some, even we want to transfer the some kind of technical issue we need to deal with that we don't have a solution for now. So that's what we're really the way and the reason behind that.

Thank you, Larry. The Board of Directors of the company has recommended that shareholders vote for resolution in proposed #2.

I hereby demand that the voting on both proposals to be conducted by poll.

If you desire a ballot, please raise your hand and it will be provided. The Inspector of Elections will provide ballots to those who desire them. If you have previously appointed a proxy or proxies to vote on your behalf prior to the proxy cutoff date, you do not need to vote today unless you wish to change your vote. The Inspector of Elections will now collect any outstanding ballots. If you have brought your proxy to vote by ballot, please also provide your proxy or ballot to the Inspector of Election. Again, if you have already appointed a proxy or proxies to vote on your behalf, prior to the proxy cutoff date, you do not need to vote today unless you would like to change your vote. Please hold up your hand so that your ballot can be collected. We now seem to have all the ballots. And since all those desiring to vote by ballot have done so, I hereby declare the polls closed. The ballot and proxies will be held in the possession of the Inspector of Election. The Inspector of Election will count the votes. We will announce shortly the preliminary result of the vote submitted by 8:59 a.m. Pacific Time on June 12, 2024 via Internet and telephone voting and by mail. We will provide the final results by filing a current report on Form 8-K with the United States Securities and Exchange Commission as soon as possible. The final voting results will also set out in the certificate of Inspector of Elections, which shall be attached to the minutes of this meeting. The Inspector of Elections, Computershare, have counted the votes of the shareholders taking into account that the Class A ordinary shares of the company carry 1 vote per share and the Class B ordinary shares of the company carry 10 votes per share. I hereby report that based on the proxy report generated by Computershare, the preliminary results of the voting submitted by 8:59 a.m. Pacific Time on June 12, 2024 via Internet and telephone voting and by mail are as follow. In relation to proposal #1, 88,454,270 of the votes were cast for the resolution. 59,430 of the votes were against the resolution. All shares which were not vote for or against the resolution whether as a result of the shareholder not being present at the meeting or abstaining from voting or as a result of spoil proxy or ballot paper have been excluded from voting and do not affect the outcome for the resolution.

It is more than 2/3 of the votes were voted for the proposed resolution. I hereby declare the proposal #1 has been duly passed as a special resolution of the company.

In relation to proposal #2, 95,720,490 of the votes were cast for the resolution, 316,694 of the votes were cast against the resolution. All shares which were not vote for or against the resolution have been excluded from voting and do not affect the outcome of resolution.

There's more than half of the votes were voted for or the proposed resolution. I hereby declare proposal #2 has been duly passed as ordinary resolution of the company.

We are now turning to the final Q&A session. Only shareholders of record as of the close of business on April 23, 2024, being the record date for the meeting, or their proxy holders may address the meeting. In this session, we will discuss a total of no more than 3 questions or comments raised virtually or in the meeting room. Each speaker is limited to 1 question or comment, which must be no more than 2 minutes in length. Our Chairman of the meeting will only answer questions pertinent to matters discussed at the meeting. The views and comments of all shareholders are welcome. However, the purpose of the meeting will be observed and the Chairman will stop discussion on the questions and comments that are irrelevant to the business of the company or the conduct of its operations, related to pending or [ threatened ] litigation, derogatory reference that are not in good case and dearly prolonged longer than 5 minutes, substantially repetitious of statements made by other shareholders or discussion relating to personal grievances. We do not have any questions online. Now let us turn to the shareholders in the meeting room.

Okay. Okay. Update for operations. Yes. I think we're making progress on the integration of Noble House, and we're expanding our footprint of warehousing infrastructure system. And I don't think that there is anything that is so material enough that we need to report to publicly lead to the shareholder right now. The operations in normal situation.

We have a second question.

Yes. We have [ declared ] all the kind of related party transaction based on SEC law and applicable accounting rule, and you can find information from either the public statement we made or actually, there was a pretty recent interview I did with the media that it's also public information if you have any interest that you can find a little bit more from that interview.

We have no more questions in the meeting room. As we have discussed the questions and comments, I hereby declare the Q&A session is closed.

Yes. Thank you for attending today's meeting. Since there is no other question on the business, I hereby declare the Annual General Meeting of the company closed. Thank you.

The meeting Chairman has declared the meeting closed. This concludes the meeting. All the speakers and participants can disconnect device, and all the attendees in the meeting room can leave now.