BEIJING, Sept. 27, 2024 (GLOBE NEWSWIRE) -- 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 six months ended June 30, 2024.
Revenue decreased by 25.4% from RMB280.6 million for the six months ended June 30, 2023 to RMB 209.3 million (US$28.8 million) for the six months ended June 30, 2024.
Gross profit was RMB 41.7 million (US$5.7 million) and RMB 23.9 million for the six months ended June 30, 2024 and 2023.
Gross profit margin rose to 19.9% for the six months ended June 30, 2024 from 8.5% for the six months ended June 30, 2023.
Net income was RMB27.6 million (US$3.8 million) for the six months ended June 30, 2024, a turnaround from net loss of RMB93.6 million for the same period in 2023.
The following table sets forth a summary of the consolidated results of operations for the years indicated:
For the Six Months Ended June 30,
2023
2024
RMB
RMB
% Change
(in million, except for percentages)
Revenue
280.6
209.3
(25.4
%)
Gross profit
23.9
41.7
74.5
%
Gross margin
8.5
%
19.9
%
11.4 percentage points
Total operating expenses
（115.3
）
(16.1
)
(86.0
%)
(Loss) income from operations
(91.3
)
25.6
128.0
%
(loss) income before income tax
(91.3
)
25.3
127.7
%
Net (loss) income
(93.6
)
27.6
129.5
%
Mr. Yong Hu, CEO of the Company, commented: "In the first half of 2024, we faced a 25.4% decline in net revenues, which was primarily driven by lower demand for IT-related solutions and educational content services. However, we view this as a strategic opportunity for improvement."
"Notably, we successfully reduced our cost of revenue by 34.7%, bringing it down to RMB167.6 million (US$23.1 million). This cost management initiative allowed us to achieve a gross profit of RMB41.7 million (US$5.7 million), resulting in a positive gross profit margin of 19.9%, a significant growth from 8.5% of the previous year."
"Our focus on operational efficiency is reflected in the reduction of operating expenses, which has contributed to our impressive transition from a net loss of RMB93.6 million in first half of 2023 to a net income of RMB27.6 million (US$3.8 million) during same period in 2024. This shift underscores our commitment to enhancing profitability and positioning the Company for sustainable growth moving forward."
"Looking ahead, we are rolling out several key initiatives including a partnership with China's top telecom operator to boost our B2B operations across multiple provinces, as we target to acquire massive paying users within the next three years. The partnership will offer various subscription plans, which we believe projects strong revenue and profit margins. Moreover, we are also expanding the partnership into AI applications that will initially target the education sector before expanding to other applications such as research institutions, public libraries to further enhance user engagement with our services."
"We remain optimistic about our future strategies and are dedicated to leveraging our strengths to navigate the challenges ahead."
Half Year 2024 Financial Results:
Net revenues
Revenues decreased by 25.4% from RMB280.6 million for the six months ended June 30, 2023 to RMB 209.3 million (US$28.8 million) for the six months ended June 30, 2024. This decrease was primarily driven by the net effects of a decrease of RMB53.4 million in net revenues from the provision of IT related solution services, and a decrease of RMB17.9 million in revenue generated from educational content services and other services.
Net revenue from the educational content service and other services decreased by RMB17.9 million from RMB28.5 million for the six months ended June 30, 2023 to RMB10.6 million (US$1.5 million) for the six months ended June 30, 2024 primarily caused by a decrease of revenue by RMB16.5 million (US$2.3 million) in Fish Learning. Such decrease in revenues were primarily because we did not provide new and attractive contents on the platform leading to decreased subscriptions from end customers.
Net revenue from IT related solution services decreased by RMB53.4 million (US$7.3 million), or 21.2% from RMB 252.1 million for the six months ended June 30, 2023 to RMB 198.7 million (US$27.3 million) for the six months ended June 30, 2024. The decrease was primarily caused by a decrease in customer orders for design and development of customized IT system, and procurement and assembling of equipment.
Cost of Revenues
Cost of revenue decreased by 34.7% from RMB256.7 million for the six months ended June 30, 2023, to RMB 167.6 million (US$23.1 million) for the six months ended June 30, 2024. The decrease was primarily attributable to the decrease of RMB27.4 million in amortization of educational and decrease of RMB57.7 million in purchase of IT equipment for IT related solution services, partially offset by an increase of RMB14.7 million in material costs used for educational content service and other services with decreased subscriptions from end customers and decreased orders from high schools.
Compared with the decrease in revenues growth, the higher percentage of decrease in cost of revenues was mainly attributable to the higher gross profit we earned from IT solution services in the first half of 2024 as compared with the same period of 2023.
Gross Profit
Gross profit was RMB 23.9 million and RMB 41.7 million (US$5.7 million) for the six months ended June 30, 2023 and 2024, respectively. The Company's gross profit margin changed from 8.5% for the six months ended June 30, 2023 to 19.9% for the six months ended June 30, 2024.
The change was mainly due to an increase in the gross profits margin for IT related solution services for the first half 2024, because the Company was primarily engaged in IT design and development services for customers in the first half of 2024, as compared with procurement and assembling equipment projects in the same period of 2023. The profit margin was higher in IT design and development services than procurement and assembling equipment projects.
Operating expenses
The Company's total operating expenses changed from RMB115.3 million for the six months ended June 30, 2023 to RMB16.1 million (US$2.2 million) for the six months ended June 30, 2024.
Sales and marketing expenses decreased from RMB3.9 million for the six months ended June 30, 2023 to RMB2.5 million (US$0.3 million) for the six months ended June 30, 2024.
General and administrative expenses increased from RMB9.6 million for the six months ended June 30, 2023 to RMB10.5 million (US$1.4 million) for the six months ended June 30, 2024.
Research and development expenses decreased from RMB4.4 million for the six months ended June 30, 2023 to RMB3.1 million (US$0.4 million) for the six months ended June 30, 2024.
The Company provided impairment of educational contents of RMB97.3 million for the six months ended June 2023, and nil during the same period in 2024.
Net income (loss)
As a result of the foregoing, the Company reported net loss of RMB93.6 million and net income of RMB27.6 million (US$3.8 million) for the six months ended June 30, 2023 and 2024, respectively.
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 embeds 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 Wang Wealth Financial Services LLC Phone: +86 13811768559 +1 628 283 9214 Email:
JIANZHI EDUCATION TECHNOLOGY GROUP COMPANY LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in Renminbi ("RMB") and U.S. dollars ("US$"),except for number of shares and per share data)
December 31,2023
June 30,2024
June 30,2024
RMB
RMB
US$
(unaudited)
(unaudited)
Assets
Current assets:
Cash
18,175,959
13,115,287
1,804,724
Accounts receivable, net
4,912,020
76,240,194
10,491,000
Amount due from related parties
2,172,565
1,115,565
153,507
Short-term prepayments
77,950,037
1,965,969
270,526
Short-term investments
4,223,894
7,648,722
1,052,499
Prepaid expenses and other current assets
14,914,484
10,534,089
1,449,538
Total current assets
122,348,959
110,619,826
15,221,794
Non-current assets:
Right-of-use assets, net
7,604,933
5,903,758
812,384
Deferred tax assets, net
11,226,164
13,518,156
1,860,160
Property and equipment, net
213,369
183,032
25,186
Intangible assets, net
1,257,860
1,106,916
152,317
Other non-current assets
219,416
176,949
24,349
Long-term prepayments
8,815,919
18,059,668
2,485,093
Total non-current assets
29,337,661
38,948,479
5,359,489
Total assets
151,686,620
149,568,305
20,581,283
Liabilities
Current liabilities:
Accounts payable
11,524,904
66,456,088
9,144,662
Contract liabilities
86,731,977
13,108,638
1,803,809
Salary and welfare payable
3,170,255
1,962,572
