Jianzhi Education Technology Group Company Limited Reports First Half 2022 Financial Results
December 22 2022 - 4:30PM
Jianzhi Education Technology Group Company Limited (the “Company”
or “Jianzhi”) (NASDAQ: JZ), a leading provider of digital
educational content in China, today announced its financial results
for the first half of 2022.
- Net revenues were RMB260.3 million
($38.8 million) for the first six months of 2022, compared to
RMB276.4 million during the same period in 2021.
- Gross profit was RMB40.0 million
($6.0 million) for the first six months of 2022, compared to
RMB71.7 million during the same period in 2021.
- Net loss for the first half 2022
was RMB2.9 million ($0.4 million) for the first six months of 2022,
compared to net income of RMB43.8 million during the same period in
2021.
Yong Hu, CEO of the Company commented: “In the
first half of 2022, our team worked relentlessly and managed to
significantly scale up our business of IT related solution services
via winning more projects as we continue to building our
credentials in procurement and assembling of IT equipment. But our
overall performance was affected by complying with local COVID-19
prevention and control policies that subjected some of our
operations to on-and-off suspension, slowing down our topline
growth. We dedicated and will continue to dedicate our efforts to
ongoing innovations in the coming year, and focus on long-term
value creation for the Company.”
First Six Months of 2022 Financial
Results
Net revenues
Net revenues decreased by 5.8% from RMB276.4
million for the first half of 2021 to RMB260.3 million (US$38.8
million) for the first half of 2022. This decrease was primarily
due to a decrease of RMB72.8 million, or 40.9% in net revenues from
the provision of educational content services and other services,
and partially offset by an increase of RMB56.7 million, or 57.6% in
revenue generated from IT related solution services.
- Educational content service and
other services. Net revenue from the
educational content service and other services decreased by
RMB72.8 million from RMB178.1 million for the first half
of 2021 to RMB105.3 million (US$15.7 million) for the
first half of 2022. The decrease was primarily due to combined
effects of (i) a decrease in revenues from Light Class, because one
of our VIE’s subsidiaries did not offer Light Class to mobile users
through China United Network Communications Group Company Limited
(“China Unicom”) or Wechat during the first half of 2022. The
Company has resumed offering Light Class since August 2022, and
(ii) a decrease of revenues from redemption of reward points by
mobile users and from Fish Learning. The decrease was primarily
because one of our major customers, Telefen, was subject to a
three-month lockdown policy in Shanghai. Accordingly Telefen
provided free online products including Fish Learning to public,
leading to dramatic decrease in our revenues.
- IT related solution
services. Net revenue from IT related
solution services increased by RMB56.7 million, or 57.6% from
RMB98.4 million for the first half of 2021 to
RMB155.0 million (US$23.1 million) for the first half of
2022, primarily attributable to net effects of (i) an increase in
revenue from procurement and assembling of IT equipment as a result
of increase in the number of procurement and assembling projects we
completed in the first half of 2022, and higher contract value of
the procurement and assembling projects we completed in the first
half of 2022, against (ii) a decrease in revenue from design and
development of customized IT system service, resulting from the
fact that the Company placed more focus on the procurement and
assembling of IT equipment projects with advanced cash from
customers in 2021.
The following table sets forth the Company’s
revenue by business segments for the years indicated:
|
|
For the six months ended June 30, |
|
|
2021 |
|
2022 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
(in millions) |
Revenues: |
|
|
|
|
|
|
Educational content service
and other services |
|
|
|
|
|
|
– Educational content service |
|
|
|
|
|
|
– B2B2C |
|
29.6 |
|
31.0 |
|
4.6 |
– B2C |
|
141.7 |
|
71.8 |
|
10.7 |
– Other services |
|
6.7 |
|
2.5 |
|
0.4 |
Subtotal |
|
178.0 |
|
105.3 |
|
15.7 |
IT related solution
services |
|
|
|
|
|
|
– Design and development of customized IT system |
|
34.9 |
|
28.4 |
|
4.2 |
– Procurement and assembling of equipment |
|
63.4 |
|
125.8 |
|
18.8 |
– Technological support and maintenance |
|
0.1 |
|
0.8 |
|
0.1 |
Subtotal |
|
98.4 |
|
155.0 |
|
23.1 |
Total
revenues |
|
276.4 |
|
260.3 |
|
38.8 |
|
|
|
|
|
|
|
Cost of revenues
Cost of revenue increased by 7.6% from RMB204.8
million for the first half of 2021 to RMB220.4 million (US$32.9
million) for the first half of 2022. The increase of cost of
revenues was mainly caused by increase of revenues from procurement
and assembling of IT equipment, which bears lower gross margin as
compared with educational content services.
Gross profit
Gross profit decreased from RMB71.7 million for
the first half of 2021 to RMB40.0 million (US$6.0 million) for the
first half of 2022. Gross profit margin decreased from 25.9% for
the first half of 2021 to 15.4% for the first half of 2022. The
decrease was mainly due to the fact that (i) the gross profits
margin for IT related solution services decreased for the first
half of 2022, which was primarily because we completed more
procurement and assembling equipment projects, for which we
incurred significant equipment purchasing cost, resulting in
relatively lower gross profit margin; and (ii) for the first half
of 2022, revenues from educational content services decreased,
while we continued to purchase new educational content to enrich
current user’s experience and attract more customers with our
comprehensive educational content library leading to a decrease in
gross margin.
Operating expenses
The total operating expenses increased from
RMB23.1 million for the first half of 2021 to
RMB41.7 million (US$6.2 million) for the first half of
2022.
- Sales and Marketing
Expenses: The sales and marketing expenses kept
stable at RMB 4.1 million and RMB 4.1 million (US$0.6 million) for
the first half of 2021 and 2022, respectively. This situation was
mainly attributable to an increase in the service fee due to our
continued efforts to further expand our user base in the first half
2022, partially net off against a decrease in payroll expenses
because the Company cut 30% off on payroll expenses as affected by
COVID-19 related measures, including quarantine and lockdown,
reinstated by local government in the first half of 2022.
- General and Administrative
Expenses: The general and administrative expenses
decreased from RMB11.7 million for the first half of 2021 to
RMB9.1 million (US$1.4 million) for the first half of
2022. This decrease was primarily due to (i) a decrease in the
professional service expenses as we incurred higher audit fees
during our process of IPO for the first half of 2021, and
(ii) a decrease in payroll and welfare expenses because the
Company cut 30% off on payroll expenses as affected by COVID-19
related measures, including quarantine and lockdown, reinstated by
local government in the first half of 2022.
- Research and Development
Expenses: The research and development
expenses increased from RMB7.4 million for the first half of
2021 to RMB8.1 million (US$1.2 million) for the first
half of 2022. This increase was mainly driven by an increase in the
expenses incurred on outsourcing research and development
projects.
- Impairment of intangible assets and
goodwill: Impairment of intangible assets and goodwill increased
from RMB nil for the first half of 2021 to RMB 20.4 million (US$3.0
million). The increase was due to provision of the full impairment
of RMB 12.7 million and RMB 7.7 million, respectively, against the
customer relationship and goodwill acquired from the business
combination with Guangzhou Xingzhiqiao Information Technology Co.,
Ltd. which generated RMB 0.1 million revenues from Light Class for
the six months ended June 30, 2022.
Income Tax Expenses
The income tax expenses decreased from RMB8.1
million for the first half of 2021 to RMB2.6 million (US$0.4
million) for the first half of 2022. The changes in income tax
expenses for the first half of 2022 was primarily due to a change
from a taxable profit for the first half of 2021 to a taxable loss
for the same period of 2022, and adjustment non-deductible
impairment of goodwill for the first half of 2022.Net income
(loss)
As a result of the foregoing, net income
decreased from RMB43.8 million for the first half of 2021 to net
loss of RMB2.9 million ($0.4 million) for the first half of
2022.
Recent Development
On August 30, 2022, the Company closed its
initial public offering of 5,000,000 American Depositary Shares
(the “ADS”), representing 10,000,000 ordinary shares, at a public
offering price of US$5.00 per ADS for the total gross proceeds of
$25 million. The ADSs began trading on August 26, 2022 on the
Nasdaq Stock Market under the ticker symbol “JZ”.
About Jianzhi Education Technology Group
Company Limited
Headquartered in Beijing and established in
2011, Jianzhi is a leading provider of digital educational content
in China and has been committed to developing educational content
to fulfill the massive demand for high-quality, professional
development training resources in China. Jianzhi started operations
by providing educational content products and IT services to higher
education institutions. Jianzhi also provides products to
individual customers. Leveraging its strong capabilities in
developing proprietary professional development training content
and success in consolidating educational content resources within
the industry, Jianzhi has successfully built up a comprehensive,
multi-dimensional digital educational content database which offers
a wide range of professional development products. Jianzhi embed
proprietary digital education content into the self-developed
online learning platforms, which are provided to a wide range of
customers through its omni-channel sales system. Jianzhi is also
fully committed to the digitalization and informatization of the
education sector in China. For more information, please visit:
www.jianzhi-jiaoyu.com
Safe Harbor Statement
This press release contains statements that may
constitute “forward-looking” statements pursuant to the “safe
harbor” provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “aims,”
“future,” “intends,” “plans,” “believes,” “estimates,” “likely to,”
and similar statements. Statements that are not historical facts,
including statements about the Company’s beliefs, plans, and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. Further
information regarding these and other risks is included in the
Company’s filings with the SEC. All information provided in this
press release is as of the date of this press release, and the
Company does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
For investor and media inquiries, please
contact:
Janice WangWealth Financial Services LLCPhone:
+86 13811768559+1 628 283 9214Email: services@wealthfsllc.com
JIANZHI EDUCATION TECHNOLOGY GROUP
COMPANY LIMITEDCONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in Renminbi (“RMB”) and U.S.
dollars (“US$”),except for number of shares and
per share data)
|
|
December 31,2021 |
|
June 30,2022 |
|
June 30,2022 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
(unaudited) |
|
(unaudited) |
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
61,266,782 |
|
4,152,252 |
|
619,915 |
Notes receivable |
|
- |
|
5,000,000 |
|
746,480 |
Accounts receivable, net |
|
104,775,266 |
|
53,577,350 |
|
7,998,888 |
Inventories |
|
1,960,277 |
|
1,952,756 |
|
291,539 |
Deferred offering
expenses |
|
8,494,583 |
|
10,255,933 |
|
1,531,170 |
Due from a related party |
|
2,473,750 |
|
842,920 |
|
125,845 |
Short-term prepayments |
|
288,101,452 |
|
202,705,914 |
|
30,263,196 |
Short-term investments |
|
11,430,000 |
|
4,080,000 |
|
609,128 |
Prepaid expenses and other
current assets |
|
5,123,221 |
|
7,831,392 |
|
1,169,196 |
Total current
assets |
|
483,625,331 |
|
290,398,517 |
|
43,355,357 |
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
Right-of-use assets, net |
|
300,024 |
|
138,050 |
|
20,611 |
Deferred tax assets, net |
|
388,321 |
|
1,017,221 |
|
151,867 |
Property and equipment,
net |
|
214,717 |
|
176,377 |
|
26,332 |
Educational contents, net |
|
206,695,356 |
|
354,732,044 |
|
52,960,100 |
Intangible assets, net |
|
17,187,208 |
|
2,032,293 |
|
303,413 |
Goodwill |
|
7,712,011 |
|
- |
|
- |
Long-term prepayments |
|
143,494,187 |
|
47,762,313 |
|
7,130,726 |
Total non-current
assets |
|
375,991,824 |
|
405,858,298 |
|
60,593,049 |
Total
assets |
|
859,617,155 |
|
696,256,815 |
|
103,948,406 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
24,286,309 |
|
17,926,594 |
|
2,676,370 |
Contract liabilities |
|
327,299,227 |
|
214,133,232 |
|
31,969,250 |
Salary and welfare
payable |
|
3,411,486 |
|
870,318 |
|
129,935 |
Income taxes payable |
|
3,743,247 |
|
8,127,988 |
|
1,213,476 |
Value added tax (“VAT”) and
other tax payable |
|
2,669,408 |
|
- |
|
- |
Other payables |
|
5,276,472 |
|
6,234,539 |
|
930,792 |
Lease liabilities,
current |
|
295,367 |
|
242,757 |
|
36,243 |
Amount due to related
parties |
|
71,707,642 |
|
31,833,132 |
|
4,752,561 |
Total current
liabilities |
|
438,689,158 |
|
279,368,560 |
|
41,708,627 |
|
|
|
|
|
|
|
Deferred tax liabilities |
|
2,191,500 |
|
- |
|
- |
Total
liabilities |
|
440,880,658 |
|
279,368,560 |
|
41,708,627 |
JIANZHI EDUCATION TECHNOLOGY GROUP
COMPANY LIMITEDCONDENSED CONSOLIDATED BALANCE
SHEETS — (Continued)(Amounts in Renminbi (“RMB”)
and U.S. dollars (“US$”),except for number of
shares and per share data)
|
|
December 31,2021 |
|
June 30,2022 |
|
June 30,2022 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
(unaudited) |
|
(unaudited) |
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine
equity: |
|
|
|
|
|
|
Redeemable ordinary shares (US$0.0001 par value; 11,110,000 shares
issued and outstanding as of December 31, 2021 and June 30,
2022)* |
|
45,984,876 |
|
45,984,876 |
|
6,865,361 |
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
Ordinary shares (US$0.0001 par
value; 500,000,000 shares authorized, 100,000,000 shares issued and
outstanding as of December 31, 2021 and June 30, 2022)* |
|
63,291 |
|
63,291 |
|
10,000 |
Additional paid-in
capital |
|
54,045,908 |
|
54,045,908 |
|
8,068,291 |
Statutory reserves |
|
23,599,304 |
|
23,599,304 |
|
3,523,283 |
Retained earnings |
|
280,983,836 |
|
276,149,094 |
|
41,227,973 |
Accumulated other
comprehensive income |
|
400,233 |
|
1,448,132 |
|
216,203 |
Total Jianzhi Education
Technology Group Company Limited’s shareholders’ equity |
|
359,092,572 |
|
355,305,729 |
|
53,045,750 |
Noncontrolling interests |
|
13,659,049 |
|
15,597,650 |
|
2,328,668 |
Total shareholders’
equity |
|
372,751,621 |
|
370,903,379 |
|
55,374,418 |
Total liabilities,
mezzanine equity and shareholders’ equity |
|
859,617,155 |
|
696,256,815 |
|
103,948,406 |
|
|
|
|
|
|
|
* Retrospectively
restated for effect of stock split. |
|
|
|
|
|
|
JIANZHI EDUCATION TECHNOLOGY GROUP
COMPANY LIMITEDUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)(Amounts in Renminbi (“RMB”) and U.S.
dollars (“US$”),except for number of shares and
per share data)
|
|
For the six months ended June 30, |
|
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
Net
revenues |
|
276,453,921 |
|
|
260,353,542 |
|
|
38,869,760 |
|
Cost of revenues |
|
(204,799,427 |
) |
|
(220,373,446 |
) |
|
(32,900,889 |
) |
Gross
profit |
|
71,654,494 |
|
|
39,980,096 |
|
|
5,968,871 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses |
|
4,061,771 |
|
|
4,134,088 |
|
|
617,203 |
|
General and administrative
expenses |
|
11,681,849 |
|
|
9,093,274 |
|
|
1,357,590 |
|
Research and development
expenses |
|
7,361,472 |
|
|
8,118,990 |
|
|
1,212,133 |
|
Impairment of intangible
assets |
|
- |
|
|
12,662,000 |
|
|
1,890,387 |
|
Impairment of goodwill |
|
- |
|
|
7,712,011 |
|
|
1,151,373 |
|
Total operating expenses |
|
23,105,092 |
|
|
41,720,363 |
|
|
6,228,686 |
|
Income (loss) from
operations |
|
48,549,402 |
|
|
(1,740,267 |
) |
|
(259,815 |
) |
|
|
|
|
|
|
|
|
|
|
Other (expenses)
income: |
|
|
|
|
|
|
|
|
|
Investment income |
|
105,415 |
|
|
589,424 |
|
|
87,999 |
|
Interest income (expenses),
net |
|
20,090 |
|
|
(523,388 |
) |
|
(78,140 |
) |
Other expenses |
|
- |
|
|
(7,997 |
) |
|
(1,194 |
) |
Government grants |
|
3,207,090 |
|
|
1,430,551 |
|
|
213,576 |
|
Total other income (expenses),
net |
|
3,332,595 |
|
|
1,488,590 |
|
|
222,241 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax |
|
51,881,997 |
|
|
(251,677 |
) |
|
(37,574 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
8,061,996 |
|
|
2,644,464 |
|
|
394,808 |
|
Net income
(loss) |
|
43,820,001 |
|
|
(2,896,141 |
) |
|
(432,382 |
) |
Net income attributable to
noncontrolling interests |
|
5,140,095 |
|
|
1,938,601 |
|
|
289,426 |
|
Net income (loss)
attributable to the Jianzhi Education Technology Group Company
Limited’s shareholders |
|
38,679,906 |
|
|
(4,834,742 |
) |
|
(721,808 |
) |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
43,820,001 |
|
|
(2,896,141 |
) |
|
(432,382 |
) |
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments |
|
59,146 |
|
|
1,047,899 |
|
|
156,447 |
|
Total comprehensive
income (loss) |
|
43,879,147 |
|
|
(1,848,242 |
) |
|
(275,935 |
) |
Net comprehensive income
attributable to noncontrolling interests |
|
5,140,095 |
|
|
1,938,601 |
|
|
289,426 |
|
Comprehensive income
(loss) attributable to the Jianzhi Education Technology Group
Company Limited’s shareholders |
|
38,739,052 |
|
|
(3,786,843 |
) |
|
(565,361 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
|
|
Basic and diluted* |
|
0.35 |
|
|
(0.04 |
) |
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares |
|
|
|
|
|
|
|
|
|
Basic and diluted* |
|
111,110,000 |
|
|
111,110,000 |
|
|
111,110,000 |
|
|
|
|
|
|
|
|
|
|
|
* Retrospectively
restated for effect of stock split |
|
|
|
|
|
|
|
|
|
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