Baosheng Media Group Holdings Limited Reports Financial Results for the First Half of 2021
Baosheng Media Group Holdings Limited (NASDAQ: BAOS) has reported financial results for the first half of 2021, revealing significant declines in revenue and profitability. Total revenues fell by 75.4% to $2.4 million, while net loss escalated to $271,671, compared to a profit of $6.2 million in the same period last year. The gross profit also decreased by 84.3%, leading to a gross margin of 59.8%. Despite these challenges, the Company is optimistic about future growth, particularly through its partnerships with Alibaba and Bytedance in the Ocean Engine platform.
- Established partnerships with Alibaba and Bytedance to enhance advertising services.
- Plans for business innovations in the Ocean Engine mobile marketing platform.
- Revenue declined by 75.4% to $2.4 million from $9.8 million year-over-year.
- Net loss of $271,671 compared to a net income of $6.2 million in the prior year.
- Gross profit decreased by 84.3% to $1.4 million.
- Gross margin fell to 59.8% from 93.6% year-over-year.
- Income from operations turned to a loss of $2.2 million versus a profit of $5.8 million in H1 2020.
Beijing, China, Sept. 30, 2021 (GLOBE NEWSWIRE) -- Baosheng Media Group Holdings Limited (NASDAQ: BAOS) (“Baosheng” or the “Company”), a China-based online marketing solution provider, today announced its financial results for the first half of 2021.
Ms. Wenxiu Zhong, Chairwoman and CEO of the Company, commented, “In the first half of 2021, with the sporadic occurrences of COVID-19 cases and the implementation of stricter prevention controls to prevent further spread of COVID-19, the Company’s business was under significant pressure and the operating results declined, as the domestic travel market and consumer market both experienced reductions. Furthermore, many of our customers operating in Fintech, gaming, education, and real estate industries have experienced consumption declines, amid policy adjustment by the Chinese government to enhance regulation and supervision of these industries, which resulted in lower advertisement expenditures. Under the current circumstance, we have actively optimized our business plans and strategies and made progress in our Ocean Engine business, including establishing partnerships with well-known customers, such as Alibaba and Bytedance, in order to counter the adverse effects of COVID-19 and the governmental policy developments on the Company’s operations and financial results.”
Ms. Zhong continued, “Looking forward, we will continue to conduct in-depth research on the current market environment and take appropriate measures to respond accordingly. We plan to initiate a series of business innovations in the Ocean Engine mobile marketing platform in the consumer staples field. At the same time, we will continue to focus on a content innovation strategy to optimize products and services, enhance market models, expand in-depth cooperation, and help customers make substantial progress toward achieving their business goals. We are very optimistic about the future development of the Company.”
Financial Highlights for the First Half of 2021
For the Six Months Ended June 30, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | -75.4 | % | ||||||
Gross profit | $ | 1,444,334 | $ | 9,172,553 | -84.3 | % | ||||||
Gross margin | 59.8 | % | 93.6 | % | -33.8 | % | ||||||
Income (Loss) from Operations | $ | (2,242,820 | ) | $ | 5,795,583 | -138.7 | % | |||||
Net Income (Loss) | $ | (271,671 | ) | $ | 6,172,112 | -104.4 | % | |||||
Earnings (Loss) per share | $ | (0.01 | ) | $ | 0.30 | -103.3 | % |
● | Revenue decreased by |
● | Gross profit decreased by |
● | Gross margin was |
● | Income from operations decreased by |
● | Net income decreased by |
● | Earnings per share decreased by |
Financial Results for the First half of 2021 and 2020
The following table summarizes the results of our operations during the first half of 2021 and 2020, respectively.
For the Six Months Ended June 30, | Changes | |||||||||||||||
2021 | 2020 | Amount | % | |||||||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | $ | (7,385,864 | ) | -75.4 | % | |||||||
Cost of revenues | (971,018 | ) | (628,663 | ) | (342,355 | ) | 54.5 | % | ||||||||
Gross profit | 1,444,334 | 9,172,553 | (7,728,219 | ) | -84.3 | % | ||||||||||
Operating Expenses | ||||||||||||||||
Selling and marketing expenses | (541,953 | ) | (256,362 | ) | (285,591 | ) | 111.4 | % | ||||||||
General and administrative expenses | (3,145,201 | ) | (3,120,608 | ) | (24,593 | ) | 0.8 | % | ||||||||
Total Operating Expenses | (3,687,154 | ) | (3,376,970 | ) | (310,184 | ) | 9.2 | % | ||||||||
Income (Loss) from Operations | (2,242,820 | ) | 5,795,583 | (8,038,403 | ) | -138.7 | % | |||||||||
Interest expense, net | (64,203 | ) | (105,497 | ) | 41,294 | -39.1 | % | |||||||||
Changes in fair value of warrant liabilities | 1,902,153 | - | 1,902,153 | >100.0 | % | |||||||||||
Subsidy income | 249,102 | 589,820 | (340,718 | ) | -57.8 | % | ||||||||||
Other expenses, net | (115,903 | ) | (1,159 | ) | (114,744 | ) | 9,900.3 | % | ||||||||
Income (Loss) Before Income Taxes | (271,671 | ) | 6,278,747 | (6,550,418 | ) | -104.3 | % | |||||||||
Income tax expense | - | (106,635 | ) | 106,635 | -100.0 | % | ||||||||||
Net Income (Loss) | $ | (271,671 | ) | $ | 6,172,112 | $ | (6,443,783 | ) | -104.4 | % |
Revenues
The Company recognizes all revenues on a net basis, which are comprised of (i) rebates and incentives offered by publishers for procuring advertisers to place ads with them, which are typically calculated with reference to the advertising expenses of the Company’s advertisers and are closely correlated to the Company’s gross billing from advertisers; and (ii) net fees from advertisers, which are essentially the fees the Company charges its advertisers (i.e. gross billing), net of the media costs the Company incurred on their behalf.
Revenue decreased by
For the Six Months Ended June 30, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Rebates and incentives offered by publishers | $ | 2,355,036 | $ | 8,629,572 | -72.7 | % | ||||||
Net fees from advertisers | 60,316 | 1,171,644 | -94.9 | % | ||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | -75.4 | % |
The rebates and incentives offered by publishers decreased by
The net fees from advertisers decreased by
The Company has advertising agency revenues from Search Engine Marketing (“SEM”) services and non-SEM services.
For the Six Months Ended June 30, | ||||||||||||
2021 | 2020 | % Change | ||||||||||
Revenue from SEM services | $ | 2,356,200 | $ | 8,405,169 | -72.0 | % | ||||||
Revenue from Non-SEM services | 59,152 | 1,396,047 | -95.8 | % | ||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | -75.4 | % |
The revenues from SEM services consist of rebates and incentives offered by publishers. The revenues from SEM services decreased by
The revenues from non-SEM services consist of both rebates and incentives offered by publishers and the net fees from advertisers. The revenues from non-SEM services decreased by
Cost of revenues
The cost of revenues was primarily comprised of payroll and welfare expenses incurred by staff responsible for advertiser services and media relations, and taxes and surcharges. Total cost of revenues increased by
Gross profit
The Company’s gross profit decreased by
Selling and marketing expenses
Selling and marketing expenses increased by
General and administrative expenses
General and administrative expenses were
Subsidy income
Subsidy income in the first half of 2021 primarily consisted of subsidy income from the local tax authority of
Change in fair value of warrant liabilities
The change in fair value of warrant liability for the half year 2021 represents a net remeasurement gain of
Other expenses, net
Other expenses primarily consisted of a net nonrefundable rental deposit of
Income tax expense
Income tax expense was $nil in the first half of 2021, as compared to income tax expense of
For the first half of 2021, we did not incur income tax expenses, and instead we incurred taxable losses. For the first half 2020, the income tax expense increased, due to the reversal of the deferred tax assets recognized for Beijing Baosheng as of December 31, 2019.
Net income (loss)
Net loss was
Financial Condition
As of June 30, 2021, the Company had cash and cash equivalents of
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities was
About Baosheng Media Group Holdings Limited
Baosheng Media Group Holdings Limited, headquartered in Beijing, China, is an online marketing solution provider in China. The Company advises advertisers on online marketing strategies, offers value-added advertising optimization services and facilitates the deployment of online ads in various forms, such as search ads, in-feed ads, mobile app ads and social media marketing ads. The Company is dedicated to helping its advertiser clients manage their online marketing activities with a view to achieving their business goals. For more information, visit the Company’s website at http://ir.bsacme.com/
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” ”anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. 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 in its other filings with the SEC.
For more information, please contact:
Investor Relations Contact:
Tina Xiao
Ascent Investor Relations LLC
+1-917-609-0333
tina.xiao@ascent-ir.com
BAOSHENG MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2021 and December 31, 2020
(Expressed in U.S. dollar, except for the number of shares)
June 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 12,118,982 | $ | 6,576,658 | ||||
Restricted cash | 3,892,983 | 3,695,598 | ||||||
Accounts receivable, net – third parties | 56,559,692 | 65,154,845 | ||||||
Accounts receivable, net – related party | 88,863 | - | ||||||
Prepayments | 18,396,508 | 6,058,481 | ||||||
Media deposits | 1,610,774 | 6,837,879 | ||||||
Media deposits – related party | 1,407,862 | - | ||||||
Deferred offering cost | - | 425,537 | ||||||
Other current assets | 3,890,646 | 3,323,532 | ||||||
Total Current Assets | 97,966,310 | 92,072,530 | ||||||
Long-term investment | 1,548,803 | - | ||||||
Property and equipment, net | 1,216,708 | 909,236 | ||||||
Intangible assets, net | 831,209 | 5,504 | ||||||
Prepayments for intangible assets | 2,922,269 | - | ||||||
Right of use assets | 1,411,625 | 353,238 | ||||||
Total Assets | $ | 105,896,924 | $ | 93,340,508 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Bank borrowing | $ | - | $ | 1,532,567 | ||||
Accounts payable – third parties | 15,090,210 | 35,376,612 | ||||||
Accounts payable – related parties | 1,574,753 | - | ||||||
Advance from advertisers | 1,322,957 | 3,287,653 | ||||||
Advertiser deposits | 1,838,499 | 5,881,908 | ||||||
Dividends payable | 3,407,366 | 3,371,648 | ||||||
Income tax payable | 376,398 | 570,540 | ||||||
Due to related parties | 14,565 | 715,546 | ||||||
Operating lease liabilities, current | 492,316 | 351,551 | ||||||
Warrant liabilities | 468,223 | - | ||||||
Accrued expenses and other liabilities | 720,910 | 591,622 | ||||||
Total Current Liabilities | 25,306,197 | 51,679,647 | ||||||
Operating lease liabilities, noncurrent | 806,153 | - | ||||||
Total Liabilities | 26,112,350 | 51,679,647 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Ordinary Share (par value | 14,630 | 10,200 | ||||||
Additional paid-in capital | 41,505,782 | 3,814,665 | ||||||
Statutory reserve | 898,133 | 898,133 | ||||||
Retained earnings | 35,472,246 | 35,743,917 | ||||||
Accumulated other comprehensive gain | 1,893,783 | 1,193,946 | ||||||
Total Shareholders’ Equity | 79,784,574 | 41,660,861 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 105,896,924 | $ | 93,340,508 |
BAOSHENG MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2021 and 2020
(Expressed in U.S. dollar, except for the number of shares)
For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | ||||
Cost of revenues | (971,018 | ) | (628,663 | ) | ||||
Gross profit | 1,444,334 | 9,172,553 | ||||||
Operating Expenses | ||||||||
Selling and marketing expenses | (541,953 | ) | (256,362 | ) | ||||
General and administrative expenses | (3,145,201 | ) | (3,120,608 | ) | ||||
Total Operating Expenses | (3,687,154 | ) | (3,376,970 | ) | ||||
Income (Loss) from Operations | (2,242,820 | ) | 5,795,583 | |||||
Interest expense, net | (64,203 | ) | (105,497 | ) | ||||
Changes in fair value of warrant liabilities | 1,902,153 | - | ||||||
Subsidy income | 249,102 | 589,820 | ||||||
Other expenses, net | (115,903 | ) | (1,159 | ) | ||||
Income (Loss) Before Income Taxes | (271,671 | ) | 6,278,747 | |||||
Income tax expense | - | (106,635 | ) | |||||
Net Income (Loss) | $ | (271,671 | ) | $ | 6,172,112 | |||
Other Comprehensive Income (Loss) | ||||||||
Foreign currency translation adjustment | 699,837 | (472,332 | ) | |||||
Comprehensive Income | $ | 428,166 | $ | 5,699,780 | ||||
Weighted average number of ordinary share outstanding | ||||||||
Basic and Diluted | 26,759,235 | 20,400,000 | ||||||
Earnings (Loss) per share | ||||||||
Basic and Diluted | $ | (0.01 | ) | $ | 0.30 |
BAOSHENG MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2021 and 2020
(Expressed in U.S. dollar, except for the number of shares)
For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Net Cash Used in Operating Activities | $ | (27,756,592 | ) | $ | (3,092,900 | ) | ||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | (422,253 | ) | - | |||||
Purchases of intangible assets | (834,78 | ) | - | |||||
Prepayments for intangible assets | (2,916,127 | ) | - | |||||
Investment in an investee | (1,545,547 | ) | - | |||||
Net Cash Used in Investing Activities | (5,718,715 | ) | - | |||||
Cash Flows from Financing Activities: | ||||||||
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs | 25,989,264 | - | ||||||
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs | 4,185,000 | - | ||||||
Issuance of units pursuant to a private placement, net of issuance costs | 9,858,000 | - | ||||||
Proceeds from borrowings from banks | - | 1,421,686 | ||||||
Repayment of bank borrowings | (1,545,547 | ) | - | |||||
Proceeds from borrowings from third parties | - | 6,489,998 | ||||||
Repayment of borrowings to third parties | - | (6,774,336 | ) | |||||
Payments of issuance costs related to initial public offering | - | (362,212 | ) | |||||
Net Cash Provided by Financing Activities | 38,486,717 | 775,136 | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 728,299 | (126,156 | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 5,739,709 | (2,443,920 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 10,272,256 | 11,016,948 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 16,011,965 | $ | 8,573,028 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid for interest expense | $ | 98,514 | $ | 113,129 | ||||
Cash paid for income tax | $ | - | $ | - | ||||
Non-cash operating, investing and financing activities | ||||||||
Right of use assets obtained in exchange for operating lease obligations | $ | 1,553,829 | $ | - |
FAQ
What are Baosheng Media's revenue results for the first half of 2021?
How did Baosheng Media's net income change in the first half of 2021?
What impact did COVID-19 have on Baosheng Media's operations?