Antelope Enterprise Announces First Half 2024 Financial Results

Rhea-AI Summary

Antelope Enterprise Holdings (NASDAQ: AEHL) announced its financial results for the first half of 2024. The company's livestreaming ecommerce business generated revenue of $43.4 million, a 2.6% decrease from the same period in 2023. Gross profit decreased by 48.7% to $3.5 million, while loss from operations increased to $6.5 million.

The company's strategy shifted to focus on mid-tier clients, resulting in engagements with over 70 clients, an increase of nearly 20 compared to 2023. AEHL plans to enter the energy field in Q3 2024, launching a business in Texas to meet the growing energy demands of the computing power industry.

Financial highlights include a gross profit margin of 8.0%, decreased selling and distribution expenses, and increased administrative expenses. As of June 30, 2024, AEHL had $2.3 million in cash and cash equivalents and a working capital of $5.8 million.

Positive

• Increased client base from 50 to over 70 in the livestreaming ecommerce business
• Cash and cash equivalents increased by 333.2% to $2.3 million
• Stockholders' equity increased by 25.2% to $18.0 million
• Planned expansion into the energy sector in Texas

Negative

• Revenue decreased by 2.6% to $43.4 million
• Gross profit declined by 48.7% to $3.5 million
• Loss from operations increased from $5.5 million to $6.5 million
• Gross profit margin decreased from 15.3% to 8.0%
• Administrative expenses increased by 22.8% to $6.9 million

Insights

Financial Analyst

The first half 2024 results for Antelope Enterprise Holdings (AEHL) show mixed performance in their livestreaming ecommerce business. Revenue slightly decreased by 2.6% to $43.4 million, while gross profit significantly dropped by 48.7% to $3.5 million. The company's strategic shift towards mid-tier clients to mitigate risk is notable, but it has impacted profitability in the short term.

Key financial points:

• Gross profit margin declined from 15.3% to 8.0%
• Loss from operations increased to $6.5 million
• Cash position improved to $2.3 million
• Working capital increased to $5.8 million

The company's planned entry into the energy sector in Texas could diversify revenue streams but also introduces new risks and capital requirements. Investors should closely monitor the execution of this new venture and its impact on the company's financial health.

Tech Industry Analyst

AEHL's livestreaming ecommerce business faces challenges in a competitive Chinese market. The increase from 50 to 70 clients demonstrates growth in their client base, but the loss of major clients has impacted revenue. Their SaaS+ platform, which matches influencers with brands, is a differentiator in the market, but maintaining technological edge will be crucial.

The shift to mid-tier clients is a sound risk management strategy, but it requires different operational approaches:

• Higher client acquisition and management costs
• Need for scalable technology to handle more clients efficiently
• Potential for lower revenue per client, necessitating volume growth

The planned entry into energy production for computing power industries is an interesting pivot. It aligns with the growing demand from data centers and crypto mining operations but represents a significant departure from their core business. Success will depend on their ability to execute in a new, highly regulated industry with different technological requirements.

NEW YORK, Sept. 30, 2024 (GLOBE NEWSWIRE) -- Antelope Enterprise Holdings Limited (NASDAQ Capital Market: AEHL) (“Antelope Enterprise”, “AEHL” or the “Company”), is the majority owner of Hainan Kylin Cloud Services Technology Co., Ltd (“Kylin Cloud”), the operator of a livestreaming ecommerce business in China, and the Company expects to shortly enter the energy field through the production of electricity in Texas using natural gas generators, today announced its financial results for the six months ended June 30, 2024.

First Half 2024 Summary

• Revenue generated from the livestreaming ecommerce business was $43.4 million, a 2.6% decrease as compared to $44.6 million for the same period of 2023.
• Gross profit generated from the livestreaming ecommerce business was $3.5 million, a 48.7% decrease as compared to $6.8 million for the same period of 2023.
• Loss from operations from the livestreaming ecommerce business was $6.5 million, as compared to loss from operations of $5.5 million for the same period of 2023.
  

Will Zhang, Chairman and CEO of Antelope Enterprise, commented, “The revenue for the livestreaming ecommerce business segment came in at $43.4 million for the first six months of 2024, modestly lower than the $44.6 million in revenue recorded for the six months of 2023. This slight decline was due to loss of a few major clients and a change in business strategy to secure a larger number of mid-tier clients to help to mitigate the risk of retaining major clients. Our majority-owned Kylin Cloud subsidiary had engagements with more than 70 clients in the first half of 2024 represents an increase of nearly 20 clients compared to the same period in 2023.”

“Kylin Cloud provides turnkey livestreaming marketing and broadcasting services to consumer brand companies by matching consumer brand products with the appropriate hosts and influencers. We believe that there is a tremendous market opportunity ahead for livestreaming ecommerce and believe that Kylin Cloud has the resources, infrastructure and team culture to achieve sustained growth in this B2C ecosystem,” CEO Will Zhang continued.

“In an important strategic development for the Company, we recently announced that we are planning to enter the energy field in the third quarter of 2024, and that we are going to launch this business in Texas to meet the rapidly growing needs of the computing power industry. We believe that our new positioning in the energy supply sector is extremely timely to meet the high expected demand for energy due to the growth of these sectors,” concluded Chairman and CEO Will Zhang.

Six Months Results Ended June 30, 2024

Revenue for the six months ended June 30, 2024 was $43.5 million, a decrease of $1.1 million or 2.6% from $44.6 million for the same period of 2023. The decrease in revenue was due to the loss of a few of the livestreaming businesses’ major clients in the current period. This propelled a change in business strategy to focus on securing a larger number of mid-tier clients to mitigate the risk associated with an over-concentration of major clients. In the first half of 2024, we had business engagements with more than 70 clients which represented an increase of nearly 20 clients compared to the same period in 2023.

Gross profit for the six months ended June 30, 2024 was $3.5 million, a decrease of $3.3 million or 48.7% as compared to $6.8 million for the same period of 2023. The decrease in gross profit was due to the decrease in revenue and an increase in the cost of goods sold of $2.1 million or 5.7% in the current period. The increase in cost of goods sold was due to increased training, management and support costs attributable to the livestreaming businesses’ focus on mid-tier clients. For the first half of 2024, the gross profit margin was 8.0% for the livestreaming ecommerce business as compared to a gross profit margin of 15.3% for the first half of 2023.

Other income for the six months ended June 30, 2024 was $0.7 million, an increase of $0.2 million or 59.2% as compared to $0.4 million for the same period of 2023. Other income primarily consists of interest income of $0.2 million and other income of $0.4 million.

Selling and distribution expenses for the six months ended June 30, 2024 were $3.1 million, a decrease of $4.0 million or 55.9% as compared to $7.1 million for the same period of 2023. The decrease in selling and distribution expenses was due to decreased advertising and promotion expenses of $3.5 million and decreased commission expenses of $0.5 million.

Administrative expenses for the six months ended June 30, 2024 were $6.9 million, an increase of $1.3 million or 22.8% as compared to $5.6 million for the same period of 2023. The increase in administrative expenses was due to an increase in stock compensation expense of $0.8 million and the $0.5 million increase in professional service expenses.

Loss from continuing operations before taxation for the six months ended June 30, 2024 was $6.5 million, an increase of $1.1 million or 19.3% as compared to a loss from continuing operations before taxation of $5.5 million for the same period of 2023. The increase was due to the decrease in gross profit in the current period as compared to the same period of 2023, as described above, as well as an increase in administrative expenses which was partly offset by a decrease in selling and distribution expenses.

Loss per basic share and fully diluted share from continuing operations for the six months ended June 30, 2024 were $0.96, as compared to loss per basic and fully diluted share of $3.38 for the same period of 2023.

Financial Condition

As of June 30, 2024, the Company had $2.3 million in cash and cash equivalents, an increase of $1.7 million or 333.2% as compared to $0.6 million as of December 31, 2023. As of June 30, 2024, working capital (current assets minus current liabilities) was $5.8 million and the current ratio (current assets divided by current liabilities) was 2.6 times, as compared to working capital of $4.2 million and a current ratio of 8.0 times as of December 31, 2023. Stockholders’ equity as of June 30, 2024 was $18.0 million, an increase of $3.6 million or 25.2% as compared to $14.4 million as of December 31, 2023.

Liquidity and Capital Resources

Our cash flow analysis for each of the accounts includes the cash flow transactions of discontinued operations.

Cash flow used in operating activities was $7.2 million for the six months ended June 30, 2024, an increase of $1.6 million as compared to $5.6 million for the same period of 2023. The increase of cash outflow was mainly due to an increase in cash outflow on loan receivables of $0.9 million, an increase in cash outflow on other receivables and prepayments of $0.9 million, and increased cash outflow on trade receivables of $1.5 million. This was partly offset by a decrease in operating cash outflow before working capital changes of $0.6 million, a decrease in cash outflow from trade payable of $0.7 million, a decrease in cash outflow on accrued liabilities and other payables of $0.8 million, a decrease in cash outflow on taxes payable of $0.6 million and increased cash inflow on unearned revenue of $0.9 million. Also, there was cash inflow from operating activities of $2.0 million from our discontinued operations for the six months ended June 30, 2023.

Cash flow used in investing activities was $0.3 million, compared to a cash inflow of $0.3 million for the same period of 2023. The increase in cash outflow was mainly due to the acquisition of fixed assets of $1.8 million, which was partly offset by collection of note receivable of $1.5 million and decrease in restricted cash of $0.1 million. 

Cash flow generated from financing activities was $10.1 million for the six months ended June 30, 2024, compared to $5.7 million for the same period of 2023, primarily due to an increase in the proceeds from warrants exercised of $1.2 million and an increase in proceeds from a promissory note of $4.6 million. This was partly offset by a decrease in equity financing of $3.4 million for the six months ended June 30, 2024 compared with the six months ended June 30, 2023. For the six months ended June 30, 2023, net cash used in financing activities includes a cash outflow of $2.1 million from our discontinued operations.

Business Outlook

We own a majority position of a livestreaming ecommerce business, Hainan Kylin Cloud Services Technology Co., Ltd (“Kylin Cloud”), and aim to launch an energy supply business in the third quarter of 2024. Kylin Cloud’s SaaS+ systems platform strategically matches hosts and influencers to consumer brand products which results in increased sales for these companies.

In the last few years, livestreaming ecommerce has comprised an ever-increasing percentage of China's ecommerce sales which we expect to continue in the years ahead, spurred by a consumer ecosystem that includes a young demographic and their high usage rate of mobile devices. We believe that Kylin Cloud is unique in the livestreaming space since it utilizes advanced analytics that matches hosts and influencers to consumer brand products which facilitates unique content for higher conversion rates as compared to traditional ecommerce.

In the current period, the business strategy of the livestreaming business was modified to focus on securing a larger number of mid-tier clients to mitigate the risk associated with an over-concentration of major clients. Since some of these new clients are still in the beginning stages of collaboration and their business volume has just started to grow, it will take time for the new mid-tier clients to develop and increase their sales volume. In the first half of 2024, the livestreaming business had business engagements with more than 70 clients, which represented an increase of nearly 20 clients compared to the same period in 2023.

In an important strategic development for the Company, we recently announced plans to enter the energy field through the production of electricity using natural gas generators in Texas. This electricity would then be transmitted directly to rapidly growing computing power sectors who require high amounts of energy. Compared to conventional methods, this model eliminates intermediary steps like transmission to the power grid and processing by public utilities, which could result in lower energy losses and higher efficiency. Given the strong market demand of computing power industries, the Company believes it has a runway for significant growth in the near future.

This business outlook reflects the Company's current and preliminary views and is based on the information currently available to us, which are subject to change, and is subject to risks and uncertainties, as well as risks and uncertainties identified in the Company’s public filings.

Conference Call Information

We will host a conference call at 8:00 am ET on September 30, 2024. Listeners may access the call by dialing 1-844-695-5522 five to ten minutes prior to the scheduled conference call time, and international callers should dial 1-412-317-0698; all callers should ask to join the Antelope Enterprise Holdings Ltd. earnings conference call. A replay of the conference call will be available for 14 days starting from 11:00 am ET on September 30, 2024. To access the replay, dial 1-877-344-7529 and international callers should dial 1-412-317-0088. The replay access code is 7480379.

About Antelope Enterprise Holdings Limited

Antelope Enterprise Holdings Limited Limited (“Antelope Enterprise”, “AEHL” or the “Company”), is the 51% owner of Hainan Kylin Cloud Services Technology Co., Ltd (“Kylin Cloud”), the operator of a growing livestreaming ecommerce business in China with access to 800,000+ hosts and influencers. Through its wholly owned US subsidiary, AEHL US LLC, the Company expects to begin generating electricity for the rapidly growing needs of  Company expects to begin generating electricity for the rapidly growing needs of computing power industries in the fourth quarter of 2024. For more information, please visit our website at https://aehltd.com/.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this press release include, without limitation, the continued stable macroeconomic environment in the PRC, the PRC technology sectors continuing to exhibit sound long-term fundamentals, and our ability to continue to grow our energy, livestreaming ecommerce, business management and information system consulting businesses. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. 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 registration statement and other filings with the U.S. Securities and Exchange Commission.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 20-F for the year ended December 31, 2023 and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

FINANCIAL TABLES FOLLOW

ANTELOPE ENTERPRISE HOLDINGS., LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 

		As of June 30, 2024				As of December 31, 2023
		USD’000				USD’000
		(Unaudited)				(Audited)
ASSETS AND LIABILITIES
NONCURRENT ASSETS
Property and equipment, net			1,946				161
Intangible assets, net			1				1
Right-of-use assets, net			310				-
Security deposit			166				-
Loan receivable			10,768				5,181
Note Receivable			5,490				6,949
Total noncurrent assets			18,681				12,292
CURRENT ASSETS
Trade receivable			1,508				-
Other receivables and prepayments			4,367				2,871
Available-for-sale financial assets			-				99
Due from related parties			1,286				1,316
Cash and bank balances			2,322				536
Total current assets			9,483				4,822
Total assets			28,164				17,114
CURRENT LIABILITIES
Trade payables			639				-
Accrued liabilities and other payables			1,077				216
Unearned revenue			1,009				27
Amounts owed to related parties			53				78
Lease liabilities			117				-
Taxes payable			763				281
Total current liabilities			3,658				602
NET CURRENT ASSETS			5,825				4,220
NONCURRENT LIABILITIES
Lease liabilities			227				-
Note payable			6,245				2,111
Total noncurrent liabilities			6,472				2,111
Total liabilities			10,130				2,713
NET ASSETS			18,034				14,401
EQUITY
Reserves			17,145				13,985
Noncontrolling interest			889				416
Total equity			18,034				14,401

ANTELOPE ENTERPRISE HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

		SIX MONTHS ENDED JUNE 30,
		2024				2023
		USD’000				USD’000
Net sales			43,462				44,636
Cost of goods sold			39,969				37,824
Gross profit			3,493				6,812
Other income			651				409
Selling and distribution expenses			(3,130	)			(7,100	)
Administrative expenses			(6,863	)			(5,588	)
Finance costs			(537	)			-
Other expenses			(139	)			-
Loss before taxation			(6,525	)			(5,467	)
Income tax expense			2				-
Net loss for the period from continuing operations			(6,527	)			(5,467	)
Discontinued operations
Gain on disposal of discontinued operations			-				10,659
Loss from discontinued operations			-				(200	)
Net income (loss)			(6,527	)			4,992
Net income (loss) attributable to :
Equity holders of the Company			(6,635	)			4,997
Non-controlling interest			108				(5	)
Net income (loss)			(6,527	)			4,992
Net loss attributable to the equity holders of the Company arising from:
Continuing operations			(6,635	)			(5,462	)
Discontinued operations			-				10,459
Other comprehensive loss
Exchange differences on translation of financial statements of foreign operations			(913	)			(598	)
Total comprehensive income (loss)			(7,440	)			4,394
Total comprehensive income (loss) attributable to:
Equity holders of the Company			(7,548	)			4,399
Non-controlling interest			108				(5	)
Total comprehensive income (loss)			(7,440	)			4,394
Total comprehensive income (loss) arising from:
Continuing operations			(7,440	)			(6,065	)
Discontinued operations			-				10,459
Income (loss) per share attributable to the equity holders of the Company
Basic (USD)
— from continuing operations			(0.96	)			(3.38	)
— from discontinued operations			-				6.48
Diluted (USD)
— from continuing operations			(0.96	)			(3.38	)
— from discontinued operations			-				5.27

ANTELOPE ENTERPRISE HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		Six Months Ended June 30,
		2024				2023
		USD’000				USD’000
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) before taxation			(6,524	)			5,192
Adjustments for
Operating lease charge			33				-
Depreciation of property, plant and equipment			40				26
Gain on disposal of subsidiaries			-				(10,659	)
Loan forgiveness by related party			-				(167	)
Loss on convertible note			6				5
Standstill fee on note payable			125				-
Share based compensation			5,442				4,115
Interest expense on lease liability			13				-
Amortization of OID of convertible note			28				22
Operating cash flows before working capital changes			(838	)			(1,466	)
Increase in trade receivables			(1,508	)			-
Increase in other receivables and prepayments			(2,189	)			(1,325	)
Increase in loan receivable			(5,587	)			(4,688	)
Increase (Decrease) in trade payables			639				(70	)
Increase in unearned revenue			982				56
Increase (Decrease) in taxes payable			480				(106	)
Increase in accrued liabilities and other payables			861				8
Cash used in operations			(7,160	)			(7,591	)
Interest paid			-				-
Income tax paid			-				(14	)
Net cash generated from operating activities from discontinued operations			-				2,038
Net cash used in operating activities			(7,160	)			(5,567	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of fixed assets			(1,825	)			(72	)
Decrease in notes receivable			1,460				-
Decrease in available-for-sale financial asset			99				126
Decrease in restricted cash			-				299
Cash disposed as a result of disposal of subsidiaries			-				(37	)
Net cash used in investing activities from discontinued operations			-				-
Net cash generated from (used in) investing activities			(266	)			316
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment for lease liabilities			(13	)			-
Insurance of share capital for equity financing			4,297				7,661
Warrants exercised			1,228				-
Proceeds from promissory note			4,630				-
Repayment of promissory note			(550	)			-
Advance from related parties			533				55
Net cash used in financing activities from discontinued operations			-				(2,064	)
Net cash generated from financing activities			10,125				5,652
NET INCREASE IN CASH & EQUIVALENTS			2,699				401
CASH & EQUIVALENTS, BEGINNING OF PERIOD			536				612
EFFECT OF FOREIGN EXCHANGE RATE DIFFERENCES			(913	)			(560	)
CASH & EQUIVALENTS, END OF PERIOD			2,322				453

The accompanying notes in the Company’s Form 6-K as filed with the SEC are an integral part of these
consolidated financial statements.

Source: Antelope Enterprise Holdings Ltd.

Contact Information:
Antelope Enterprise Holdings Limited	Precept Investor Relations LLC
Edmund Hen, Chief Financial Officer	David Rudnick, Account Manager
Email: info@aehltd.com	Email: david.rudnick@preceptir.com
	Phone: +1 646-694-8538

FAQ

What was Antelope Enterprise's (AEHL) revenue for the first half of 2024?

Antelope Enterprise's (AEHL) revenue for the first half of 2024 was $43.4 million, a 2.6% decrease compared to the same period in 2023.

How many clients did AEHL's livestreaming ecommerce business engage with in H1 2024?

AEHL's livestreaming ecommerce business engaged with more than 70 clients in the first half of 2024, an increase of nearly 20 clients compared to the same period in 2023.

What new business sector is AEHL planning to enter in Q3 2024?

AEHL is planning to enter the energy field in the third quarter of 2024, launching a business in Texas to meet the growing energy demands of the computing power industry.

What was AEHL's gross profit margin for the livestreaming ecommerce business in H1 2024?

AEHL's gross profit margin for the livestreaming ecommerce business in the first half of 2024 was 8.0%, compared to 15.3% for the same period in 2023.