Jianzhi Education Technology Group Company Limited Reports First Half 2023 Financial Results
December 08 2023 - 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 2023.
- Net revenues were RMB280.6 million
($38.7 million) for the first six months of 2023, compared to
RMB260.4 million during the same period in 2022.
- Gross profit was RMB23.9million
($3.3million) for the first six months of 2023, compared to RMB40.0
million during the same period in 2022.
- Net loss for the first half 2023
was RMB93.6 million ($12.9 million), compared to net loss of RMB2.9
million during the same period in 2022.
Yong Hu, CEO of the Company commented: “Our
company’s half-year performance demonstrated positive growth in net
revenues, primarily driven by the strong performance of our
IT-related solution services. We achieved a notable 7.8% increase
in net revenues, showcasing our ability to capture market
opportunities.”
“We also faced challenges in our educational
content services, which led to a decline in net revenues.
Recognizing the potential risks of educational content becoming
obsolete before generating profitability, we adopted conservative
strategies and reduced investment in this area. While this impacted
our revenues, we believe it was a prudent decision to mitigate
future risks.”
“On a positive note, our acquisition of a
cloud-based customer in 2022 significantly contributed to the
growth in our IT-related solution services. We saw a remarkable
62.6% increase in revenue from this segment, reflecting our ability
to provide value-added services and meet the evolving needs of our
customers.”
“We successfully reduced our total operating
expenses, demonstrating our commitment to optimizing operational
efficiency. Sales and marketing expenses were slightly reduced, and
general and administrative expenses also decreased. Furthermore, we
achieved a decline in research and development expenses by
streamlining outsourcing costs.”
“Looking ahead, we recognize the importance of
reassessing our strategies for educational content services to
overcome the challenges we faced. Our focus will be on optimizing
the gross profit margin in our successful IT-related solution
services segment. We remain committed to sustaining profitability
by implementing continued cost management measures and capitalizing
on market opportunities. We are confident in our ability to
navigate the market landscape and drive future success.”
First Six Months of 2023 Financial
Results
Net revenues
Net revenues increased by 7.8% from RMB260.4
million for the first half of 2022 to RMB280.6 million (US$38.7)
million for the first half of 2023. This increase was primarily due
to an increase of RMB97.0 million, or 62.6% in revenue generated
from IT related solution services, partially offset by a decrease
of RMB76.8 million, or 72.9% in net revenues from the provision of
educational content services and other services.
- Educational content service and other services. Net revenue
from the educational content service and other services decreased
by RMB76.8 million from RMB105.3 million for the first
half of 2022 to RMB28.5 million (US$3.9 million) for the
first half of 2023.Educational content services require us to make
continuous capital expenditure to keep update of existing contents
and development new educational contents to meet the latest market
trends, which exposed us to potential risks of education contents
becoming obsolete before making profitability. Accordingly, we
determined to adopt conservative strategies to reduce investment in
educational content services. The decrease in educational content
services was primarily due to a decrease in subscription from our
end customers since our adoption of conservative strategies in the
second half of 2022.
- IT related solution services. Net
revenue from IT related solution services increased by
RMB97.1 million, or 62.6% from RMB155.0 million for the
first half of 2022 to RMB252.1 million (US$34.8 million)
for the first half of 2023, primarily attributable to net effects
of an increase in revenue of RMB71.2 million from procurement and
assembling of IT equipment and an increase in revenue of RMB26.6
million from design and development of customized IT system
service, both attributable to our acquisition of a
cloud-based customer in the year of 2022 which contributed increase
of revenues in IT-related solution services.
The following table sets forth the Company’s
unaudited consolidated revenue by business segments for the six
months ended June 30, 2022 and 2023:
|
|
For the Six Months Ended June 30, |
|
|
|
2022 |
|
|
2023 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
|
(in thousands) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Educational content service and other services |
|
|
|
|
|
|
|
|
|
– Educational content service |
|
|
|
|
|
|
|
|
|
– B2B2C |
|
|
30,991 |
|
|
|
23,579 |
|
|
|
3,252 |
|
– B2C |
|
|
71,837 |
|
|
|
3,112 |
|
|
|
429 |
|
– Other services |
|
|
2,488 |
|
|
|
1,858 |
|
|
|
256 |
|
Subtotal |
|
|
105,316 |
|
|
|
28,549 |
|
|
|
3,937 |
|
IT related solution services |
|
|
|
|
|
|
|
|
|
|
|
|
– Design and development of customized IT system |
|
|
28,398 |
|
|
|
54,992 |
|
|
|
7,584 |
|
– Procurement and assembling of equipment |
|
|
125,840 |
|
|
|
197,052 |
|
|
|
27,175 |
|
– Technological support and maintenance |
|
|
800 |
|
|
|
13 |
|
|
|
2 |
|
Subtotal |
|
|
155,038 |
|
|
|
252,057 |
|
|
|
34,761 |
|
Total revenues |
|
|
260,354 |
|
|
|
280,606 |
|
|
|
38,698 |
|
Cost of revenues
Cost of revenue increased by 16.5 % from
RMB220.4 million for the first half of 2022 to RMB256.6 million
(US$35.4 million) for the first half of 2023. The increase of cost
of revenues was primarily attributable to the increase in
amortization of educational contents with increased purchase of
education contents over the past years, and increase of revenues in
IT related solution services. Compared with the revenue growth, the
higher percentage of increase in cost of revenues was mainly
attributable to the high equipment purchase cost we incurred for IT
procurement and assembling projects during the six months ended
June 30, 2023.
Gross profit
Gross profit decreased from RMB40.0 million for
the first half of 2022 to RMB23.9 million (US$3.3 million) for the
first half of 2023. Gross profit margin decreased from 15.4% for
the first half of 2022 to 8.5% for the first half of 2023. 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 2023, 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 2023, revenues from educational content services decreased
leading to a decrease in gross margin.
Operating expenses
The total operating expenses increased from
RMB41.7 million for the first half of 2022 to
RMB115.3 million (US$15,894. million) for the first half
of 2023.
- Sales and Marketing Expenses: The sales and marketing expenses
was RMB4.1 million and RMB3.9 million (US$0.5 million) for the
first half of 2022 and 2023, respectively. The slight decrease of
RMB0.2 million in sales and marketing expenses was primarily due to
a decrease of RMB0.2 million in payroll and welfare expenses.
- General and Administrative Expenses: The general and
administrative expenses increased from RMB9.1 million for the
first half of 2022 to RMB9.6 million (US$1.3 million) for the
first half of 2023. This increase was primarily attributable to a
increase of RMB1.1million in allowance of doubtful accounts.
- Research and Development Expenses: The research and development
expenses decreased from RMB8.1 million for the first half of
2022 to RMB4.4 million (US$0.6 million) for the first
half of 2023. This increase was mainly driven by a decrease in the
expenses incurred on outsourcing research and development
projects.
- Impairment of intangible assets: Impairment of intangible
assets increased from RMB 12.7millon for the first half of 2022 to
RMB 97.3 million (US$13.4 million). The substantial increase can
primarily be attributed to the cancellation of customized training
course product orders developed for multiple overseas clients.
During the first half of 2023, these course product orders were
permanently canceled due to adjustments and transformations in the
business operations of these overseas clients. Consequently, the
Company foresees that these customized development course products
will no longer yield consistent revenue in the foreseeable
future.
Income Tax Expenses
The income tax expenses decreased from RMB2.6
million for the first half of 2022 to RMB2.2 million for the same
period of 2023. The changes in income tax expenses for the first
half of 2023 was primarily due to utilization of net operating
losses of certain of our profit-making subsidiaries.
Net loss
As a result of the foregoing, we reported a net
loss of RMB2.9 million for the first half of 2022, as compared with
a net loss of RMB93.6 million for the first half of 2023.
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, 2022 |
|
|
June 30,2023 |
|
|
June 30,2023 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
65,055,278 |
|
|
|
28,626,530 |
|
|
|
3,947,779 |
|
Accounts receivable, net |
|
|
17,173,021 |
|
|
|
26,178,493 |
|
|
|
3,610,179 |
|
Inventories |
|
|
399,439 |
|
|
|
399,439 |
|
|
|
55,085 |
|
Due from a related party |
|
|
1,051,869 |
|
|
|
956,665 |
|
|
|
131,930 |
|
Short-term prepayments |
|
|
254,493,399 |
|
|
|
120,257,158 |
|
|
|
16,584,220 |
|
Short-term investments |
|
|
4,080,000 |
|
|
|
4,102,744 |
|
|
|
565,794 |
|
Prepaid expenses and other
current assets |
|
|
9,518,326 |
|
|
|
22,557,289 |
|
|
|
3,110,792 |
|
Total current
assets |
|
|
351,771,332 |
|
|
|
203,078,318 |
|
|
|
28,005,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Right-of-use assets, net |
|
|
— |
|
|
|
1,665,864 |
|
|
|
229,733 |
|
Deferred tax assets, net |
|
|
9,176,875 |
|
|
|
9,432,316 |
|
|
|
1,300,776 |
|
Property and equipment,
net |
|
|
153,880 |
|
|
|
432,783 |
|
|
|
59,684 |
|
Educational contents, net |
|
|
214,441,814 |
|
|
|
206,258,794 |
|
|
|
28,444,388 |
|
Long-term prepayments |
|
|
151,779,105 |
|
|
|
55,145,358 |
|
|
|
7,604,893 |
|
Total non-current
assets |
|
|
375,551,674 |
|
|
|
272,935,115 |
|
|
|
37,639,474 |
|
Total
assets |
|
|
727,323,006 |
|
|
|
476,013,433 |
|
|
|
65,645,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
8,037,004 |
|
|
|
7,282,575 |
|
|
|
1,004,313 |
|
Contract liabilities |
|
|
290,028,010 |
|
|
|
127,661,754 |
|
|
|
17,605,361 |
|
Salary and welfare
payable |
|
|
2,302,646 |
|
|
|
1,165,769 |
|
|
|
160,767 |
|
Income taxes payable |
|
|
1,170,795 |
|
|
|
4,041,630 |
|
|
|
557,366 |
|
Value added tax (“VAT”) and
other tax payable |
|
|
4,063,389 |
|
|
|
2,198,217 |
|
|
|
303,148 |
|
Other payables |
|
|
2,658,243 |
|
|
|
3,426,251 |
|
|
|
472,501 |
|
Lease liabilities,
current |
|
|
— |
|
|
|
624,716 |
|
|
|
86,152 |
|
Amount due to related
parties |
|
|
52,711,457 |
|
|
|
54,861,723 |
|
|
|
7,565,778 |
|
Total current
liabilities |
|
|
360,971,544 |
|
|
|
201,262,635 |
|
|
|
27,755,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
— |
|
|
|
7,563 |
|
|
|
1,043 |
|
Lease liabilities,
non-current |
|
|
— |
|
|
|
1,138,723 |
|
|
|
157,037 |
|
Total non-current
liabilities |
|
|
— |
|
|
|
1,146,286 |
|
|
|
158,080 |
|
Total
liabilities |
|
|
360,971,544 |
|
|
|
202,408,921 |
|
|
|
27,913,466 |
|
|
JIANZHI EDUCATION TECHNOLOGY GROUP COMPANY
LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS
(continued)(Amounts in Renminbi (“RMB”) and U.S.
dollars (“US$”),except for number of shares and
per share data) |
|
|
|
December 31, 2022 |
|
|
June 30,2023 |
|
|
June 30,2023 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
|
Ordinary shares (US$0.0001 par value; 500,000,000 shares
authorized, 121,110,000 and 121,110,000 issued and outstanding as
of December 31, 2022 and June 30, 2023) |
|
|
77,747 |
|
|
|
77,747 |
|
|
|
12,111 |
|
Additional paid-in
capital |
|
|
242,093,942 |
|
|
|
242,093,942 |
|
|
|
33,384,892 |
|
Statutory reserves |
|
|
23,599,304 |
|
|
|
23,599,304 |
|
|
|
3,254,493 |
|
Retained earnings |
|
|
81,822,029 |
|
|
|
(8,869,813 |
) |
|
|
(1,223,276 |
) |
Accumulated other
comprehensive income |
|
|
2,520,630 |
|
|
|
3,350,763 |
|
|
|
462,164 |
|
Total Jianzhi Education
Technology Group Company Limited’s shareholders’ equity |
|
|
350,113,652 |
|
|
|
260,251,943 |
|
|
|
35,890,384 |
|
Noncontrolling interests |
|
|
16,237,810 |
|
|
|
13,352,569 |
|
|
|
1,841,403 |
|
Total shareholders’
equity |
|
|
366,351,462 |
|
|
|
273,604,512 |
|
|
|
37,731,787 |
|
Total liabilities,
mezzanine equity and shareholders’ equity |
|
|
727,323,006 |
|
|
|
476,013,433 |
|
|
|
65,645,253 |
|
|
JIANZHI EDUCATION TECHNOLOGY GROUP COMPANY
LIMITEDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS(Amounts in
Renminbi (“RMB”) and U.S. dollars (“US$”),except
for number of shares and per share data) |
|
|
|
For the Six Months Ended June 30, |
|
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
Net revenues |
|
|
260,353,542 |
|
|
|
280,606,379 |
|
|
|
38,697,389 |
|
Cost of revenues |
|
|
(220,373,446 |
) |
|
|
(256,660,584 |
) |
|
|
(35,395,113 |
) |
Gross
profit |
|
|
39,980,096 |
|
|
|
23,945,795 |
|
|
|
3,302,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses |
|
|
4,134,088 |
|
|
|
3,943,550 |
|
|
|
543,840 |
|
General and administrative
expenses |
|
|
9,093,274 |
|
|
|
9,581,756 |
|
|
|
1,319,808 |
|
Research and development
expenses |
|
|
8,118,990 |
|
|
|
4,412,218 |
|
|
|
608,473 |
|
Impairment of intangible
assets |
|
|
12,662,000 |
|
|
|
97,332,087 |
|
|
|
13,422,709 |
|
Impairment of goodwill |
|
|
7,712,011 |
|
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
|
41,720,363 |
|
|
|
115,269,611 |
|
|
|
15,894,830 |
|
Loss from
operations |
|
|
(1,740,267 |
) |
|
|
(91,323,816 |
) |
|
|
(12,592,554 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expenses)
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment income |
|
|
589,424 |
|
|
|
60,649 |
|
|
|
8,364 |
|
Interest expenses, net |
|
|
(523,388 |
) |
|
|
(701,899 |
) |
|
|
(96,796 |
) |
Other expenses |
|
|
(7,997 |
) |
|
|
(16,781 |
) |
|
|
(2,312 |
) |
Government grants |
|
|
1,430,551 |
|
|
|
643,646 |
|
|
|
88,763 |
|
Total other income (expenses),
net |
|
|
1,488,590 |
|
|
|
(14,385 |
) |
|
|
(1,981 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
tax |
|
|
(251,677 |
) |
|
|
(91,338,201 |
) |
|
|
(12,594,535 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
2,644,464 |
|
|
|
2,238,882 |
|
|
|
308,756 |
|
Net loss |
|
|
(2,896,141 |
) |
|
|
(93,577,083 |
) |
|
|
(12,903,291 |
) |
Net income (loss) attributable
to noncontrolling interests |
|
|
1,938,601 |
|
|
|
(2,885,241 |
) |
|
|
(397,893 |
) |
Net loss attributable
to the Jianzhi Education Technology Group Company Limited’s
shareholders |
|
|
(4,834,742 |
) |
|
|
(90,691,842 |
) |
|
|
(12,505,398 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(2,896,141 |
) |
|
|
(93,577,083 |
) |
|
|
(12,903,291 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments |
|
|
1,047,899 |
|
|
|
830,133 |
|
|
|
114,481 |
|
Total comprehensive
loss |
|
|
(1,848,242 |
) |
|
|
(92,746,950 |
) |
|
|
(12,788,810 |
) |
Net comprehensive income
(loss) attributable to noncontrolling interests |
|
|
1,938,601 |
|
|
|
(2,885,241 |
) |
|
|
(397,893 |
) |
Comprehensive loss
attributable to the Jianzhi Education Technology Group Company
Limited’s shareholders |
|
|
(3,786,843 |
) |
|
|
(89,861,709 |
) |
|
|
(12,390,917 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
(0.04 |
) |
|
|
(0.75 |
) |
|
|
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
111,110,000 |
|
|
|
121,100,000 |
|
|
|
121,100,000 |
|
Jianzhi Education Techno... (NASDAQ:JZ)
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Jianzhi Education Techno... (NASDAQ:JZ)
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