Lucas GC Limited Announces 1H 2024 Financial Results: Revenue at US$83.32 million with Increases in Both Gross Margin and Net Income Margin
NEW YORK, Sept. 26, 2024 (GLOBE NEWSWIRE) -- Lucas GC Limited (NASDAQ:LGCL) ("Lucas" or the "Company"), an artificial intelligence (the "AI") technology-driven Platform-as-a-Service (the "PaaS") company whose technologies have been applied to the human resources, insurance and wealth management industry verticals, today announced its financial results for 1H fiscal year of 2024.
1H 2024 Financial Highlights
Our revenue was RMB605.52 million (US$83.32 million) for the six months ended June 30, 2024, compared with RMB820.07 million for the six months ended June 30, 2023, representing a decrease of 26.16%.
We recorded a gross margin of 33.54% for the six months ended June 30, 2024, representing an increase of 516 bps compared with that of the six months ended June 30, 2023.
We recorded net income of RMB53.93 million (US$7.42 million) for the six months ended June 30, 2024, compared with RMB53.69 million for the six months ended June 30, 2023.
Our net income margin increased to 8.91% for the six months ended June 30, 2024, compared with 6.55% for the six months ended June 30, 2023.
1H 2024 Operational Highlights
Increased active registered users by 10% to 702,060 in 1H 2024 as compared to Dec 2023.
Obtained two patents related to core Artificial Intelligence (AI) technology, bringing the total number of granted patents to 18.
Signed two strategic agreements with publicly traded financial institutions, i.e. Bank of Ningbo and Industrial Securities Co., Limited., to port the AI LLM technology into wealth management vertical.
Signed a strategic agreement with Beijing Fourth Paradigm Technology Co., Limited to develop Artificial Intelligence training programs.
Won The 2024 Cberi Prize in The Most Valuable Brand for Investment during the Asian Brand Economy Conference (ABEC).
Management Commentary
Howard Lee, Chief Executive Officer of Lucas, said "We adopted a change of strategy in 1H 2024. We decided to position ourselves as a technology company rather than a service company. As a result, we started selling our technology to peers and let them deliver the assignments themselves, rather than compete with them. We tried to reduce our activities in delivering the recruitment assignments directly ourselves, and instead we focused on selling the technology and information to our peers and clients with products that have higher margins than those of assignment delivery services. That's why we had significant gross margin improvement in 1H 2024 compared to 1H 2023. The revenue decrease was due to our change of strategy to focus on higher-margin products, as well as the effect of one-time post COVID recovery spike in China, making 1H 2023 a higher-than-normal-business-run-rate comparison."
"In order to sustain our technological leads as a technology company, we have continued to invest significantly in research and development. R&D expenses increased by 2.45% compared to 1H 2023 due to continuous investments in AI-enabled technologies including Generative Pre-trained Transformer (GPT) and related artificial intelligence generated content (AIGC) technologies. R&D as a percentage of revenue was 13.31% in 1H 2024 compared with 9.59% in 1H 2023."
"We had a strong growth of our user base: our active registered users reached 702,060 by June 2024, representing 10% growth in 1H 2024, compared to Dec 2023, setting the stage for strong revenue growth for the future, not only within human resource services, but in the areas such as IT outsourcing and information services. I also expect to execute acquisitions or form partnerships outside China that are accretive and will drive value for shareholders in the coming months."
About Lucas GC Limited
With 18 granted U.S. and Chinese patents and over 74 registered software copyrights in the AI, data analytics and blockchain technologies, Lucas GC Limited is an AI technology-driven Platform as a Service (PaaS) company with over 702,060 agents working on its platform. Lucas' technologies have been applied to the human resources, insurance and wealth management industry verticals. For more information, please visit: https://www.lucasgc.com/.
Forward-Looking Statements
Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements." The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the uncertainties related to market conditions. Any forward-looking statements contained in this press release speak only as of the date hereof, and Lucas GC Limited specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
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LUCAS GC LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands, except for share and per share data, or otherwise noted)
As of December 31,
As of June 30,
2023
2024
RMB
RMB
US$
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
30,123
51,513
7,088
Restricted cash
100
-
-
Accounts receivable, net
28,144
46,448
6,391
Advance to suppliers, net
164,802
223,004
30,686
Deferred offering costs
6,541
706
97
Prepaid expenses and other current assets
1,626
1,616
222
Total current assets
231,336
323,287
44,484
Non-current assets
Software and equipment, net
48,299
76,388
10,511
Operating lease right-of-use assets, net
84
797
110
Deferred tax assets
12,103
12,897
1,775
Total non-current assets
60,486
90,082
12,396
TOTAL ASSETS
291,822
413,369
56,880
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings
39,381
57,829
7,958
Accounts payable
35,217
51,997
7,155
