Executive Summary / Key Takeaways

• Antelope Enterprise Holdings (AEHL) has undergone a profound strategic transformation, divesting its legacy ceramic tile business to focus on high-growth technology sectors, primarily livestreaming e-commerce and an emerging energy supply business.
• The company's KylinCloud livestreaming e-commerce subsidiary, while experiencing a modest revenue decline in the first half of 2024 due to a strategic shift towards mid-tier clients, remains a core operation with management anticipating future gross margin improvements.
• AEHL's timely entry into the Texas energy supply market, utilizing natural gas generators to directly power rapidly expanding computing sectors like AI data centers, represents a significant new growth vector poised to capitalize on surging electricity demand.
• A recent $50 million strategic financing agreement and partnership with BitGo signal AEHL's aggressive move into Bitcoin acquisition and secure digital asset management, further diversifying its strategic portfolio.
• Investors should closely monitor the execution and ramp-up of the new energy and Bitcoin initiatives, alongside the stabilization and scaling of the livestreaming e-commerce segment, as these endeavors are critical to AEHL's long-term revenue growth and profitability.

A Strategic Metamorphosis: From Tiles to Tech and Energy

Antelope Enterprise Holdings Limited (NASDAQ:AEHL) is in the midst of a dramatic strategic metamorphosis, having shed its industrial past to embrace the dynamic future of technology and energy. Founded in 1993 as China Ceramics Co., Ltd., the company initiated a pivotal transformation in October 2020, signaling a decisive pivot away from its legacy ceramic tile building materials business. This strategic shift gained significant momentum, with technology businesses rapidly increasing their contribution to total revenue, ultimately leading to the divestiture of the ceramic tile operations in April 2023. AEHL's current focus is squarely on its majority-owned KylinCloud livestreaming e-commerce business in China and an ambitious new venture into energy supply in Texas, complemented by a recent foray into digital asset acquisition.

The company's overarching strategy is to diversify into high-growth technology areas, leveraging its operational infrastructure and team culture to achieve sustained growth. This strategic pivot aligns with significant industry trends, including the explosive growth of livestreaming e-commerce in China and the unprecedented demand for energy driven by the global computing power industry. AEHL aims to position itself at the nexus of these trends, building foundational strengths in digital marketing and energy infrastructure.

KylinCloud: The Livestreaming E-commerce Engine

At the heart of AEHL's current operations is KylinCloud, its majority-owned subsidiary providing turnkey livestreaming marketing and broadcasting services to consumer brand companies across China. KylinCloud operates a sophisticated Software as a Service (SaaS) platform designed to strategically match consumer brand products with appropriate hosts and influencers. This system facilitates unique content creation, aiming for higher conversion rates compared to traditional e-commerce models. The company views this as a "first mover" advantage in China's burgeoning livestreaming e-commerce sector.

KylinCloud's technological differentiator lies in its advanced analytics, which intelligently pairs brands with influencers to optimize marketing campaigns. While specific quantitative metrics on the direct uplift in conversion rates were not provided, management emphasizes that this analytical approach is key to generating unique and engaging content, thereby driving increased sales for its clients. This strategic matching capability is intended to enhance brand awareness and build consumer trust, which are critical in the competitive e-commerce landscape.

The market opportunity for livestreaming e-commerce in China is substantial, driven by a young demographic and high mobile device usage. Management believes this sector will continue to comprise an ever-increasing percentage of China's e-commerce sales, experiencing high double-digit growth for many years to come. Despite holding a "very small market share at this moment," AEHL sees "a huge room to grow in our sector". The company has also adjusted its operational strategy, shifting from an over-reliance on a few major clients to securing a larger number of mid-tier clients. This move, which saw client engagements increase to over 70 in the first half of 2024 (up nearly 20 from the same period in 2023), is designed to mitigate client concentration risk.

Powering the Future: The Texas Energy Venture

A significant strategic development for AEHL is its planned entry into the energy supply field, with a launch targeted for the fourth quarter of 2024 in Texas. This initiative is a direct response to the rapidly escalating energy demands of the computing power industry, particularly from AI data centers and cryptocurrency mining operations. Management views this new positioning as "extremely timely to meet the high expected demand for energy due to the growth of these sectors".

The market drivers for this venture are compelling and quantitatively supported. The U.S. Energy Information Administration projects that electricity demand in the United States will increase to record highs in 2024 and 2025, largely driven by large-scale computing facilities. Furthermore, the International Energy Agency (IEA) predicts that global data center electricity demand is on track to double from 2022 to 2026, with artificial intelligence playing a major role in this surge. The IEA has even forecasted that within two years, data centers could consume as much energy as entire countries like Sweden or Germany.

AEHL's operational model for this energy business is designed for cost-effectiveness and efficiency. The company plans to produce electricity using natural gas generators, currently owning four such units. These generators will be strategically located close to natural gas production sites to minimize transportation, compression, and storage costs. Crucially, the electricity will be transmitted directly to computing sectors, eliminating intermediary steps like transmission to the public power grid and processing by public utilities. This direct supply model is expected to result in "lower energy losses and higher efficiency". By strategically positioning close to both natural gas sources and customers, AEHL aims to provide a "cost-effective and stable means of providing electricity". This new segment is anticipated to offer a runway for "significant growth in the near future".

Embracing Digital Assets: Bitcoin Strategy

Further diversifying its strategic portfolio, AEHL has made a significant entry into the cryptocurrency asset space. In July 2025, the company secured a $50 million strategic financing agreement with Streeterville Capital, LLC, with the proceeds earmarked "exclusively to purchase Bitcoin (BTC)". This move underscores AEHL's commitment to exploring new avenues for growth in the digital economy.

Building on this, in August 2025, AEHL formalized a cooperation agreement with BitGo, a leader in digital asset custody. This partnership is designed to enhance Bitcoin acquisition and security, with acquired Bitcoin to be "stored on-chain and safeguarded through a multi-signature private key management mechanism". This strategic step into digital assets provides AEHL with exposure to the burgeoning cryptocurrency market, potentially creating a new revenue stream and further diversifying its asset base.

Financial Performance and Liquidity: A Transformative Journey

AEHL's financial performance reflects its ongoing transformation and the early stages of its new ventures. For the first half of 2024, the livestreaming e-commerce business generated $43.4 million in revenue, a modest decrease from $44.6 million in the first half of 2023. This slight decline was attributed to the loss of a few major clients and the strategic shift to a larger number of mid-tier clients, whose sales volumes are still developing. Gross profit for the livestreaming business decreased by 46.7% to $3.5 million in the first half of 2024, down from $6.8 million in the same period of 2023, resulting in a gross profit margin of 8%, compared to 15.3% previously. This was primarily due to the revenue decrease and an increase in the cost of goods sold.

Despite the recent dip, the livestreaming segment demonstrated robust growth in earlier periods. In the first half of 2023, livestreaming e-commerce revenue surged to $44.2 million, marking a 172.5% increase over the first half of 2022 and constituting 99% of the company's total revenue. Gross profit for this segment in the first half of 2023 was $7.5 million, a remarkable 1,591.4% increase from the prior year, with the gross profit margin expanding to 17% from 2.7%. Management expressed confidence in the segment's potential, expecting gross margins to "goes up in the coming period and years," believing there is "a lot of room, a number of room to grow in our gross margin".

Operating expenses saw mixed trends in the first half of 2024. Selling and distribution expenses decreased by $4 million, or 55.9%, to $3.1 million, primarily due to reduced advertising, promotion, and commission expenses. However, administrative expenses increased by $1.3 million, or 22.8%, to $6.9 million, driven by higher stock compensation and professional service expenses. Consequently, the loss from continuing operations before taxation increased by 19.3% to $6.5 million in the first half of 2024.

From a liquidity perspective, AEHL's balance sheet showed improvement as of June 30, 2024. Cash and cash equivalents increased by $1.8 million to $2.3 million compared to December 31, 2023.

Working capital stood at $5.8 million, with a current ratio of 2.6 times, and shareholders' equity grew by $3.6 million to $18 million. The $50 million strategic financing secured in July 2025 further bolsters the company's capital resources for its Bitcoin acquisition strategy.

Competitive Landscape and Strategic Positioning

AEHL's competitive positioning is defined by its strategic pivot and the unique aspects of its new ventures. In the livestreaming e-commerce sector, KylinCloud differentiates itself through its "advanced analytics that matches hosts and influencers to consumer brand products". This technological edge is intended to facilitate unique content and achieve higher conversion rates compared to traditional e-commerce. While the market is vast, and AEHL currently holds a "very small market share," management believes its "first mover" status and unique approach provide a strong foundation for growth. The company acknowledges that there is "no strict comparison for the public company" in its specific niche, though it notes some qualitative similarity with a Hong Kong-listed entity (2291).

For its nascent energy supply business in Texas, AEHL's competitive advantage is rooted in its operational model. By strategically locating near natural gas production sites and directly transmitting electricity to high-demand computing customers, the company aims to offer a "cost-effective and stable means of providing electricity". This direct-to-customer approach bypasses traditional grid infrastructure, potentially leading to lower energy losses and higher efficiency. The competitive landscape here is characterized by the immense and growing demand from data centers and AI, where reliable and efficient power supply is paramount.

Overall, AEHL's strategic positioning emphasizes agility and a focus on high-growth, technology-driven sectors. Its strengths lie in its ability to identify and pivot towards emerging market opportunities, as demonstrated by its rapid transformation. However, vulnerabilities include the inherent execution risks associated with launching new businesses, particularly the capital-intensive energy venture, and the need to scale its mid-tier client base in livestreaming e-commerce to offset the loss of major clients. The company's past experience with NASDAQ compliance issues, addressed by a reverse stock split in April 2025, highlights the importance of maintaining market capitalization and share price stability for continued listing.

Risks and Challenges

Investing in AEHL carries several pertinent risks inherent in its transformative journey. The livestreaming e-commerce segment faces intense competition in China, and the strategic shift to mid-tier clients requires time for these new engagements to develop and increase sales volume, which could impact near-term revenue growth and profitability. Furthermore, the new energy supply business in Texas, while promising, is a significant undertaking with execution risks related to project development, natural gas procurement, and securing customer contracts in a competitive energy market. Fluctuations in natural gas prices could also impact the profitability of this segment.

The company's recent foray into Bitcoin acquisition introduces exposure to the volatile cryptocurrency market, where asset values can fluctuate dramatically. While the partnership with BitGo aims to enhance security, the underlying asset's price movements remain a significant risk. General macroeconomic conditions in China could also affect the livestreaming business, while broader economic shifts in the U.S. could influence the energy sector. Finally, while AEHL regained NASDAQ compliance after its reverse stock split in April 2025, the ongoing need to maintain listing requirements remains a factor for investors to monitor.

Conclusion

Antelope Enterprise Holdings is charting a bold new course, having successfully transitioned from its legacy manufacturing roots to become a diversified player in high-growth technology and energy sectors. The company's core investment thesis hinges on the successful execution and scaling of its KylinCloud livestreaming e-commerce business and the promising new energy supply venture in Texas, further augmented by its strategic entry into digital asset acquisition. While the livestreaming segment is navigating a strategic adjustment to its client base, the immense market opportunity in China and management's focus on margin improvement offer a compelling growth narrative.

The timely entry into the energy supply market, driven by the insatiable demand from computing power industries, positions AEHL to capitalize on a critical infrastructure need with a differentiated, efficient delivery model. Coupled with its Bitcoin strategy, AEHL is actively constructing a multi-faceted growth platform. Investors considering AEHL should weigh the significant potential for long-term value creation from these transformative initiatives against the inherent execution risks and the need for sustained operational performance across its evolving business segments.