TIANJIN, China, Sept. 15, 2020 /PRNewswire/ -- MDJM LTD (Nasdaq:
MDJH) (the "Company" or "MDJH"), an integrated real estate services
company in China, today announced
its unaudited financial results for the six months ended
June 30, 2020.
First Half of 2020 Financial Highlights
|
|
For the Six Months
Ended June 30,
|
($'000, except per
share data)
|
|
2020
|
|
2019
|
|
%
Change
|
Revenue
|
|
$2,710
|
|
$2,235
|
|
21.2%
|
Operating
expenses
|
|
$2,630
|
|
$2,792
|
|
-5.8%
|
Income (loss) from
operations
|
|
$80
|
|
($557)
|
|
114.4%
|
Operating profit
(loss) margin
|
|
3.0%
|
|
-24.9%
|
|
27.9 pp
|
Net profit (loss)
attributable to MDJH ordinary shareholders
|
|
$132
|
|
($510)
|
|
125.9%
|
Earnings (loss) per
share
|
|
$0.01
|
|
-$0.04
|
|
125.0%
|
* pp: percentage
points
|
|
|
|
|
|
|
- Revenue increased by 21.2% to $2.71
million for the first half of 2020, primarily attributable
to an increased average commission rate for primary real estate
agency services.
- Operating expenses decreased by 5.8% to $2.63 million for the first half of 2020. The
decrease was primarily related to decreased professional fees and
operating lease expenses that more than offset the increase in
payroll.
- Operating profit margin was 3.0% for the first half of 2020,
compared to the operating loss margin of 24.9% for the same period
of last year.
- Net income attributable to ordinary shareholders was
$0.13 million, or earnings per share
of $0.01, for the first half of 2020,
compared to a net loss attributable to ordinary shareholders of
$0.51 million, or a net loss per
share of $0.04, for the same period
of last year.
Mr. Siping Xu, Chairman and Chief
Executive Officer of the Company, commented, "With revenue
increasing by 21.2% year-over-year and the return to profitability,
our first half of 2020 financial results underscore continued
strength in our primary real estate agency services business
despite the negative impact of the COVID-19 pandemic. Our
geographical expansion plan also continued to make progress with
the Chengdu, Suzhou, and Yangzhou
markets contributing over 40% of our total revenue in the first
half of 2020. Looking ahead, we are cautiously optimistic about the
second half of the year as the Chinese economy, particularly its
housing market, recovers from the pandemic."
First Half of 2020 Financial Results
Revenue
For the first half of 2020, revenue increased by $0.48 million, or 21.2%, to $2.71 million from $2.23
million for the same period of last year. The increase of
revenue was primarily attributable to an increased average
commission rate for primary real estate agency services. Primary
real estate agency services and consulting and other services
accounted for 98.2% and 1.8% of revenue, respectively, for the
first half of 2020, compared to 96.2% and 3.8%, respectively, for
the same period of last year. On a geographical basis, revenue from
primary real estate agency services in Tianjin, Chengdu, Suzhou, and Yangzhou accounted for
59%, 35%, 4%, and 2% of the primary real estate agency service
revenue, respectively, for the first half of 2020, compared to 90%,
0%, 4%, and 6%, respectively, for the same period of last
year.
Operating Expenses
|
For the Six Months
Ended June 30,
|
($'000)
|
2020
|
|
2019
|
|
%
Change
|
Selling
expenses
|
$
28
|
|
$
79
|
|
-65.0%
|
Payroll, payroll
taxes and others
|
2,030
|
|
1,841
|
|
10.2%
|
Professional
fees
|
309
|
|
526
|
|
-41.2%
|
Operating lease
expense
|
56
|
|
123
|
|
-54.2%
|
Depreciation and
amortization
|
11
|
|
6
|
|
70.7%
|
Allowance for
doubtful accounts, net
|
28
|
|
-
|
|
NM
|
Other general and
administrative
|
168
|
|
217
|
|
-22.3%
|
Total operating
expenses
|
$
2,630
|
|
$
2,792
|
|
-5.8%
|
Selling expenses decreased by $0.05
million, or 65.0%, to $0.03
million for the first half of 2020 from $0.08 million for the same period of last year.
The decrease in selling expenses was attributable to decreased
marketing planning fees during the pandemic.
Payroll, payroll taxes and others increased by $0.19 million, or 10.2%, to $2.03 million for the first half of 2020 from
$1.84 million for the same period of
last year. Our employee compensation was in connection with the
sales performance. Sales related compensation, such as bonuses and
commission, increased due to the increase in the amount of sales in
the first half of 2020.
Professional fees were $0.31
million for the first half of 2020, compared to $0.53 for the same period of last year.
Professional fees consist of attorney, audit, investor
relationship, consulting, and other expenses. The decrease in
professional fees was due to the Company incurring certain one-time
professional fees associated with its Nasdaq listing and initial
public offering in the first half of 2019.
Operating lease expenses decreased by $0.07 million, or 54.2%, to $0.06 million for the first half of 2020 from
$0.12 million for the same period of
last year. Currently, the Company has one long-term lease, which
became effective on January 1, 2019,
and will expire on December 31,
2023.
Depreciation and amortization expenses were $10,543 for the first half of 2020, compared to
$6,178 for the same period of last
year. The increase in depreciation and amortization expenses
resulted from new purchases of fixed assets of $66,354 in the second half of 2019.
Allowance for doubtful accounts, net was $0.03 million for the first half of 2020,
compared to $nil for the period of last year.
Other general and administrative expenses decreased by
$0.05 million, or 22.3%, to
$0.17 million for the first half of
2020 from $0.22 million for the same
period of last year.
As a result, total operating expenses decreased by $0.16 million, or 5.8%, to $2.63 million for the first half of 2020 from
$2.79 million for the same period of
last year.
Operating Income (Loss)
Income from operations was $0.08
million for the first half of 2020, compared to a loss from
operations of $0.56 million for the
same period of last year.
The operating profit margin was 3.0% for the first half of 2020,
compared to the operating loss margin of 24.9% for the same period
of last year. The improvement in operating margin was a combined
result of the increased revenue and decreased operating expenses as
above mentioned.
Other Income
Total other income, including government grants, interest
income, and other income (expenses), was $55,566 for the first half of 2020, compared to
$3,811 for the same period of last
year.
Income (Loss) before Income Tax
Income before income tax was $0.14
million for the first half of 2020, compared to a loss
before income tax of $0.55 million
for the same period of last year.
The Company incurred income tax of $10,429 for the first half of 2020, compared to
$13,224 for the same period of last
year.
Net Income (Loss)
Net income was $0.13 million for
the first half of 2020, compared to a net loss of $0.57 million for the same period of last year.
After deduction of noncontrolling interest, net income attributable
to ordinary shareholders was $0.13
million, or earnings per share of $0.01, for the first half of 2020, compared to a
net loss attributable to ordinary shareholders of $0.51 million, or a net loss per share of
$0.04, for the first half of last
year.
Financial Conditions
As of June 30, 2020, the Company
had cash and cash equivalents of $6.28
million, compared to $6.55
million as of December 31,
2019. Account receivable was $3.11
million as of June 30, 2020,
compared to $2.16 million as of
December 31, 2019. As of June 30, 2020, the Company had current assets of
$9.48 million and current liabilities
of $1.21 million, leading to working
capital of $8.27 million, compared to
current assets, current liabilities, and working capital of
$8.84 million, $0.69 million and $8.15
million, respectively, as of December
31, 2019.
Net cash used in operating activities was $0.26 million for the first half of 2020,
compared to $0.64 million for the
same period of last year. Net cash used in investing activities was
$1,722 for the first half of 2020,
compared to net cash provided by investing activities of
$3,389 for the same period of last
year. Net cash provided by financing activities was $nil for the
first half of 2020, compare to $0.07
million for the first half of last year.
Recent Developments
Because of the quarantines and travel restrictions mandated by
the Chinese government in response to COVID-19, from the end of
January to mid-March of 2020, many real estate projects the Company
was promoting and selling were suspended, which adversely impacted
its business during that period. However, because the Company's
operating income and earnings have historically been lower during
the first quarter than other quarters due to the winter and the
Chinese New Year holiday period, the Company believes this
seasonality partially mitigated the adverse impact on its full-year
operating results. Starting from the end of March 2020, these real estate projects began to
reopen. Although the Company believes its operations have resumed
to the level before the COVID-19 outbreak starting from
April 2020 and even though it
currently expects to continue the promotion and sales of real
estate projects as it typically did before the COVID-19 outbreak,
it is not currently possible to determine the future development of
the COVID-19 outbreak and further impact of COVID-19 on the
Company's operations. If a second wave of COVID-19 cases were to
occur in the autumn and winter seasons, it could have a material
adverse effect on the Company's business, results of operations,
financial condition, and cash flows.
About MDJM LTD
With branch offices in Tianjin,
Chengdu, Suzhou, and Yangzhou,
China, MDJM provides primary real
estate agency services to real estate developer clients, as well as
as-needed real estate consulting and independent training services.
The Company also provides tourism development services, including
real estate marketing and planning services, real estate agency
services, and advertisement planning services. For more information
regarding the Company, please visit: http://ir.mdjhchina.com.
Forward-Looking Statements
This announcement contains forward-looking statements. All
statements other than statements of historical fact in this
announcement are forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations and projections about future
events and financial trends that the Company believes may affect
its financial condition, results of operations, business strategy
and financial needs. Investors can identify these forward-looking
statements by words or phrases such as "may," "will," "expect,"
"anticipate," "aim," "estimate," "intend," "plan," "believe,"
"potential," "continue," "is/are likely to" or other similar
expressions. The Company undertakes no obligation to update
forward-looking statements to reflect subsequent occurring events
or circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results and
encourages investors to review other factors that may affect its
future results in the Company's annual report on Form 20-F and in
its other filings with the Securities and Exchange
Commission.
For more information, please contact Investor Relations at:
Tony Tian, CFA
Weitian Group LLC
Email: ttian@weitianco.com
Phone: +1-732-910-9692
MDJM LTD and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss)
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Revenue
|
|
$
|
2,709,568
|
|
|
$
|
2,234,801
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
27,617
|
|
|
|
78,938
|
|
Payroll, payroll
taxes and others
|
|
|
2,029,745
|
|
|
|
1,841,326
|
|
Professional
fees
|
|
|
309,513
|
|
|
|
526,445
|
|
Operating leases
expenses
|
|
|
56,070
|
|
|
|
122,545
|
|
Depreciation and
amortization
|
|
|
10,543
|
|
|
|
6,178
|
|
Allowance for
doubtful accounts, net
|
|
|
27,810
|
|
|
|
-
|
|
Other general and
administrative
|
|
|
168,304
|
|
|
|
216,612
|
|
Total Operating
Expenses
|
|
|
2,629,602
|
|
|
|
2,792,044
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
Operations
|
|
|
79,966
|
|
|
|
(557,243)
|
|
|
|
|
|
|
|
|
|
|
Other income
(Expense):
|
|
|
|
|
|
|
|
|
Gain on sale of
asset
|
|
|
-
|
|
|
|
1,735
|
|
Gain on foreign
currency transactions
|
|
|
7,634
|
|
|
|
-
|
|
Interest
income
|
|
|
42,998
|
|
|
|
2,076
|
|
Other income
(expense)
|
|
|
4,934
|
|
|
|
-
|
|
Total other income
|
|
|
55,566
|
|
|
|
3,811
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
|
135,532
|
|
|
|
(553,432)
|
|
Income tax
|
|
|
(10,429)
|
|
|
|
(13,224)
|
|
Net income
(loss)
|
|
|
125,103
|
|
|
|
(566,656)
|
|
Net loss attributable
to noncontrolling interest
|
|
|
(6,899)
|
|
|
|
(57,109)
|
|
Net income (loss)
attributable to MDJM Ltd ordinary shareholders
|
|
$
|
132,002
|
|
|
$
|
(509,547)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
ordinary share attributable to MDJM Ltd ordinary
shareholders
|
|
$
|
0.01
|
|
|
$
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding, basic and diluted
|
|
|
11,640,820
|
|
|
|
11,640,499
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
$
|
125,103
|
|
|
$
|
(566,656)
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
|
|
Change in foreign
currency translation adjustments
|
|
|
(54,091)
|
|
|
|
2,893
|
|
Total other
comprehensive income (loss)
|
|
|
71,012
|
|
|
|
(563,763)
|
|
Comprehensive
loss attributable to non-controlling interest
|
|
|
(1,836)
|
|
|
|
(1,496)
|
|
Comprehensive income
(loss) attributable to MDJM Ltd ordinary shareholders
|
|
$
|
72,848
|
|
|
$
|
(562,267)
|
|
MDJM LTD and
Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
|
December 31,
2019
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
6,276,790
|
|
|
$
|
6,552,677
|
|
Accounts receivable,
net of allowance for doubtful accounts $38,260 and
$10,774, respectively
|
|
|
3,106,125
|
|
|
|
2,155,158
|
|
Other
receivables
|
|
|
64,218
|
|
|
|
69,977
|
|
Prepaid
expenses
|
|
|
28,119
|
|
|
|
60,020
|
|
Total Current
Assets
|
|
|
9,475,252
|
|
|
|
8,837,832
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
60,317
|
|
|
|
70,154
|
|
|
|
|
|
|
|
|
|
|
Other
Assets
|
|
|
|
|
|
|
|
|
Deferred tax
assets
|
|
|
29,321
|
|
|
|
33,440
|
|
Operating lease
assets, net
|
|
|
341,225
|
|
|
|
391,871
|
|
Other receivable -
long term
|
|
|
76,843
|
|
|
|
99,532
|
|
Total Other
Assets
|
|
|
447,389
|
|
|
|
524,843
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
9,982,958
|
|
|
$
|
9,432,829
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
921,476
|
|
|
$
|
460,690
|
|
VAT and other taxes
payable
|
|
|
122,414
|
|
|
|
107,662
|
|
Deferred
income
|
|
|
27,902
|
|
|
|
26,429
|
|
Operating lease
liabilities, current
|
|
|
136,992
|
|
|
|
91,737
|
|
Total Current
Liabilities
|
|
|
1,208,784
|
|
|
|
686,518
|
|
|
|
|
|
|
|
|
|
|
Long-term operating
lease liabilities
|
|
|
204,233
|
|
|
|
247,382
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
1,413,017
|
|
|
|
933,900
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Ordinary shares:
50,000,000 shares authorized, par value: $0.001 per share,
11,640,820 and 11,640,820 shares issued and outstanding as of
June 30, 2020
and December 31, 2019, respectively
|
|
|
11,641
|
|
|
|
11,641
|
|
Additional paid in
capital
|
|
|
6,734,681
|
|
|
|
6,734,681
|
|
Statutory
reserve
|
|
|
262,954
|
|
|
|
262,954
|
|
Retained
earnings
|
|
|
2,080,806
|
|
|
|
1,948,804
|
|
Accumulated other
comprehensive loss
|
|
|
(332,600)
|
|
|
|
(280,345)
|
|
Total MDJM Ltd
shareholders' equity
|
|
|
8,757,482
|
|
|
|
8,677,735
|
|
Noncontrolling
interest
|
|
|
(187,541)
|
|
|
|
(178,806)
|
|
Total Liabilities and
Equity
|
|
$
|
9,982,958
|
|
|
$
|
9,432,829
|
|
MDJM LTD and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
$
|
125,103
|
|
|
$
|
(566,656)
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
10,543
|
|
|
|
6,178
|
|
Changes in allowance
for doubtful accounts
|
|
|
27,810
|
|
|
|
(50,630)
|
|
Gain on foreign
currency transactions
|
|
|
(7,634)
|
|
|
|
-
|
|
Gain on sale of
asset
|
|
|
-
|
|
|
|
(1,735)
|
|
Non cash operating
lease expense
|
|
|
44,945
|
|
|
|
522
|
|
Decrease in deferred
tax assets
|
|
|
3,632
|
|
|
|
19,710
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Increase in accounts
receivables
|
|
|
(1,017,278)
|
|
|
|
(71,117)
|
|
Decrease (increase)
in other receivables
|
|
|
26,021
|
|
|
|
(34,593)
|
|
Decrease in prepaid
expense
|
|
|
31,193
|
|
|
|
29,388
|
|
Increase (decrease)
in accounts payable and accrued expenses
|
|
|
470,507
|
|
|
|
(7,376)
|
|
Increase in VAT and
other tax payable
|
|
|
16,488
|
|
|
|
21,439
|
|
Increase in operating
lease liabilities
|
|
|
7,306
|
|
|
|
-
|
|
Increase in deferred
income
|
|
|
1,886
|
|
|
|
12,520
|
|
Net Cash Used in
Operating Activities
|
|
|
(259,478)
|
|
|
|
(642,350)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchase of office
equipment and software
|
|
|
(1,722)
|
|
|
|
-
|
|
Proceeds from sale of
asset
|
|
|
-
|
|
|
|
3,389
|
|
Net Cash (Used in)
Provided by Investing Activities
|
|
|
(1,722)
|
|
|
|
3,389
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from the
second closing of the initial public offering - January 4,
2019, net of offering costs of $26,399
|
|
|
-
|
|
|
|
70,406
|
|
Net Cash Provided by
Financing Activities
|
|
|
-
|
|
|
|
70,406
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(14,687)
|
|
|
|
(56,066)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
|
(275,887)
|
|
|
|
(624,621)
|
|
Cash and cash
equivalents - beginning of the period
|
|
|
6,552,677
|
|
|
|
6,692,557
|
|
Cash and cash
equivalents - end of the period
|
|
$
|
6,276,790
|
|
|
$
|
6,067,936
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/mdjm-ltd-reports-first-half-of-2020-financial-results-301131063.html
SOURCE MDJM LTD