CCSC Technology International Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2024
- Completion of an IPO on Nasdaq under the ticker symbol 'CCTG' to boost global competitiveness.
- Revenue decreased by 52.0% to $7.5 million for the first six months of fiscal year 2024 compared to the same period last year.
- Gross profit decreased to $2.3 million, with a stable gross margin despite challenging market conditions.
- Plans to focus on growing industries such as new energy, robotics, and medical, along with R&D investments for innovative products.
- Net income declined to $0.4 million, with a loss from operations of $0.3 million for the same period.
- Basic and diluted earnings per share dropped to $0.04 from $0.28 for the same period last year.
- Revenue decline of 52.0% due to decreased sales volume and customer inventory preferences.
- Gross profit decrease to $2.3 million compared to $5.4 million for the same period last year.
- Loss from operations of $0.3 million for the six months ended September 30, 2023, compared to income from operations of $2.1 million for the same period last year.
Insights
The financial results from CCSC Technology International Holdings Limited indicate a significant contraction in revenue and gross profit, with a 52% decrease in revenue and a 57.4% decrease in gross profit year-over-year. This downturn is reflective of a broader trend of economic uncertainty and supply chain challenges that have been impacting many sectors. The stable gross margin, despite reduced profit, suggests that the company has managed to control its cost of goods sold, which is a positive sign in terms of operational management.
From an investor's standpoint, the shift in customer purchasing behavior towards reduced inventory and advanced buying in anticipation of rising costs is noteworthy. This indicates that the company's performance may be subject to fluctuations based on external economic factors rather than internal inefficiencies. The recent IPO on the Nasdaq could provide CCSC with capital to invest in R&D and expansion into growing industries, potentially offsetting the current downturn in the long run.
CCSC's strategic focus on new energy, robotics and medical sectors aligns with global industry trends that are expected to experience significant growth. Investment in these areas could position the company to capture new market share and diversify its revenue streams. However, the short-term impact of the current macroeconomic climate cannot be overlooked.
Considering the company's recent IPO, it is important to monitor how effectively the raised capital is utilized for R&D and whether it translates into tangible product innovation. Investors should also consider the competitive landscape of the interconnect products market and how CCSC's offerings stack up against peers, particularly in the targeted growth industries.
The reported financial results from CCSC Technology International Holdings Limited must be contextualized within the broader macroeconomic environment. The company's decrease in revenue and gross profit is symptomatic of the economic headwinds faced globally, including supply chain disruptions and inflationary pressures. These factors have led to changes in customer behavior, such as advanced purchasing and inventory reduction, which have immediate impacts on sales volumes.
CCSC's decision to list on the Nasdaq is a strategic move to enhance its global competitiveness. However, the benefits of this move will likely materialize over the medium to long term. In the short term, the company's performance will be influenced by the prevailing economic conditions and its ability to adapt to the changing market demand.
Mr. Kung Lok Chiu, Chief Executive Officer and Director of the Company, commented, "During the first six months of fiscal year 2024, amidst macroeconomic uncertainties and rising supply chain costs, our revenue and gross profit decreased from the same period of last year; however, our gross margin remained stable despite the challenging environment. Furthermore, in January 2024, we completed our initial public offering and listing on the Nasdaq Capital Market under the ticker symbol "CCTG", which we expect to enhance our competitiveness globally. Looking forward, we plan to strategically focus on growing industries, such as new energy, robotics, and medical. We also plan to keep investing in research and development and offering innovative and cost-effective products to our customers. We are committed to delivering high-quality products to our customers and generating long-term value for our shareholders."
First Six Months of Fiscal Year 2024 Financial Highlights
- Revenue was
$7.5 million $15.6 million - Gross profit was
$2.3 million $5.4 million - Loss from operations was
$0.3 million $2.1 million - Net income was
$0.4 million $2.8 million - Basic and diluted earnings per share was
$0.04 $0.28
First Six Months of Fiscal Year 2024 Financial Results
Revenue
Total revenue was
The following table sets forth revenue by interconnect products:
For the Six Months Ended September 30, | Change | |||||||||||||||||||||||
($ millions) | 2023 | % | 2022 | % | Amount | % | ||||||||||||||||||
Cables and wire harnesses | 6.9 | 91.8 | % | 14.5 | 93.0 | % | (7.6) | (52.6) | % | |||||||||||||||
Connectors | 0.6 | 8.2 | % | 1.1 | 7.0 | % | (0.5) | (43.5) | % | |||||||||||||||
Total | 7.5 | 100.0 | % | 15.6 | 100.0 | % | (8.1) | (52.0) | % | |||||||||||||||
Revenue generated from cables and wire harnesses decreased by
The decrease in our revenue was primarily attributable to the decrease in sales volume. We experienced a contraction in demand, primarily because a number of our customers had purchased our products in advance in fiscal year 2022 and the first half of fiscal year 2023 in anticipation of higher supply chain costs. Customers also preferred reduced inventory, due to uncertainties about macroeconomic conditions.
The following table sets forth the disaggregation of revenue by regions:
For the Six Months Ended September 30, | Change | |||||||||||||||||||||||
($ millions) | 2023 | % | 2022 | % | Amount | % | ||||||||||||||||||
4.3 | 57.8 | % | 9.8 | 62.8 | % | (5.5) | (55.8) | % | ||||||||||||||||
2.4 | 31.8 | % | 4.7 | 29.8 | % | (2.3) | (48.7) | % | ||||||||||||||||
0.8 | 10.4 | % | 1.2 | 7.4 | % | (0.4) | (32.9) | % | ||||||||||||||||
Total | 7.5 | 100.0 | % | 15.6 | 100.0 | % | (8.1) | (52.0) | % | |||||||||||||||
Revenue generated from
Revenue generated from
Revenue generated from the
Cost of Revenue
Cost of revenue decreased by
Inventory costs amounted to
Labor costs amounted to
Gross Profit and Gross Margin
Gross profit decreased by
Gross profit margin decreased by
Operating Expenses
Operating expenses decreased by
Other Income/(Expenses)
Other income decreased by
Net Income
Net income decreased by
Basic and Diluted Earnings per Share
Basic and diluted earnings per share was
Recent Development
On January 22, 2024, the Company completed its initial public offering (the "Offering") of 1,375,000 ordinary shares at a public price of
About CCSC Technology International Holdings Limited
CCSC Technology International Holdings Limited, is a
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company's proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "may," "will," "could," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "propose," "potential," "continue", or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any 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 other filings with the
For more information, please contact:
CCSC Technology International Holdings Limited
Investor Relations Department
Email: ir@ccsc-interconnect.com
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Amount in U.S. dollars, except for number of shares) | ||||||||
As of | As of | |||||||
Assets | (Unaudited) | |||||||
Current assets: | ||||||||
Cash | $ | 7,370,501 | $ | 7,708,310 | ||||
Restricted cash | 9,095 | 9,305 | ||||||
Accounts receivable | 2,295,302 | 2,260,222 | ||||||
Inventories, net | 1,854,088 | 2,187,518 | ||||||
Deferred initial public offering costs | 1,419,736 | 1,051,038 | ||||||
Prepaid expenses and other current assets | 1,407,266 | 1,242,054 | ||||||
Total current assets | 14,355,988 | 14,458,447 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 179,169 | 211,949 | ||||||
Intangible asset, net | 66,787 | 88,319 | ||||||
Operating right-of-use assets, net | 1,754,977 | 2,121,070 | ||||||
Deferred tax assets, net | 115,989 | 41,015 | ||||||
Other non-current assets | 39,387 | 41,844 | ||||||
Total non-current assets | 2,156,309 | 2,504,197 | ||||||
TOTAL ASSETS | $ | 16,512,297 | $ | 16,962,644 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,009,560 | $ | 1,663,749 | ||||
Advance from customers | 125,218 | 186,874 | ||||||
Accrued expenses and other current liabilities | 1,537,312 | 1,648,970 | ||||||
Taxes payable | 361,035 | 365,851 | ||||||
Operating lease liabilities – current | 434,871 | 485,051 | ||||||
Long-term bank loan - current | — | 39,725 | ||||||
Total current liabilities | 4,467,996 | 4,390,220 | ||||||
Non-current liabilities: | ||||||||
Operating lease liabilities – non-current | 1,343,653 | 1,653,411 | ||||||
Total non – current liabilities | 1,343,653 | 1,653,411 | ||||||
TOTAL LIABILITIES | $ | 5,811,649 | $ | 6,043,631 | ||||
Commitments and Contingencies | — | — | ||||||
Shareholders' equity | ||||||||
Ordinary shares, par value of | 5,000 | 5,000 | ||||||
Subscription receivable | — | (5,000) | ||||||
Additional paid-in capital | 1,236,773 | 1,236,773 | ||||||
Statutory reserve | 813,235 | 813,235 | ||||||
Retained earnings | 10,628,306 | 10,214,692 | ||||||
Accumulated other comprehensive loss | (1,982,666) | (1,345,687) | ||||||
Total shareholders' equity | 10,700,648 | 10,919,013 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 16,512,297 | $ | 16,962,644 | ||||
*The shares and per share information are presented on a retroactive basis to reflect the corporate subdivision and 1 to 2 share split.
CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
AND COMPREHENSIVE (LOSS)/INCOME | ||||||||
(Amount in U.S. dollars, except for number of shares) | ||||||||
For the six months ended | ||||||||
2023 | 2022 | |||||||
Net revenue | $ | 7,503,520 | $ | 15,620,925 | ||||
Cost of revenue | (5,223,159) | (10,181,670) | ||||||
Gross profit | 2,280,361 | 5,439,255 | ||||||
Operating expenses: | ||||||||
Selling expenses | (473,636) | (566,879) | ||||||
General and administrative expenses | (1,753,179) | (2,202,153) | ||||||
Research and development expenses | (338,038) | (568,648) | ||||||
Total operating expenses | (2,564,853) | (3,337,680) | ||||||
Loss/(Income) from operations | (284,492) | 2,101,575 | ||||||
Other income/(expenses): | ||||||||
Other non-operating income, net | 51,628 | 16,221 | ||||||
Government subsidies | — | 59,079 | ||||||
Foreign currency exchange gains | 539,844 | 921,565 | ||||||
Financial and interest income/(expenses), net | 35,783 | (1,483) | ||||||
Total other income | 627,255 | 995,382 | ||||||
Income before income tax expense | 342,763 | 3,096,957 | ||||||
Income tax benefits/(expenses) | 70,851 | (256,607) | ||||||
Net income | 413,614 | 2,840,350 | ||||||
Other comprehensive (loss)/income | ||||||||
Foreign currency translation adjustment | (636,979) | (1,096,403) | ||||||
Total comprehensive (loss)/income | $ | (223,365) | $ | 1,743,947 | ||||
Earnings per share | ||||||||
Basic and Diluted | $ | 0.04 | $ | 0.28 | ||||
Weighted average number of ordinary shares | ||||||||
Basic and Diluted* | 10,000,000 | 10,000,000 | ||||||
* The shares and per share information are presented on a retroactive basis to reflect the corporate subdivision and 1 to 2 share split.
CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Amount in U.S. dollars, except for number of shares) | ||||||||
For the six months ended | ||||||||
2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 413,614 | $ | 2,840,350 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Change in inventory reserve | 73,643 | (10,202) | ||||||
Depreciation and amortization | 114,208 | 172,174 | ||||||
Amortization of right-of-use asset | 251,865 | 276,485 | ||||||
Loss from disposal of fixed assets | 595 | 363 | ||||||
Deferred tax (expenses)/benefits | (79,198) | 1,450 | ||||||
Foreign currency exchange gains | (539,844) | (921,565) | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (47,683) | (2,227,930) | ||||||
Inventories | 164,072 | 1,559,757 | ||||||
Amount due from related parties | — | 478,724 | ||||||
Prepaid expenses and other current assets | (223,354) | 39,894 | ||||||
Operating right-of-use assets | — | (2,281,448) | ||||||
Other non-current assets | — | 42,077 | ||||||
Accounts payable | 418,473 | (600,059) | ||||||
Advance from customers | (60,075) | (43,413) | ||||||
Taxes payable | (4,408) | 151,071 | ||||||
Accrued expenses and other current liabilities | (39,341) | (56,394) | ||||||
Operating lease liabilities | (244,763) | 1,987,398 | ||||||
Amount due to related parties | — | (215,163) | ||||||
Net cash provided by operating activities | 197,804 | 1,193,569 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchase of property and equipment | (52,025) | (110,498) | ||||||
Proceed from disposal of property and equipment | — | 11 | ||||||
Purchase of intangible asset | (19,217) | (23,691) | ||||||
Net cash used in investing activities | (71,242) | (134,178) | ||||||
CASH FLOWS FORM FINANCING ACTIVITIES | ||||||||
Proceeds from short-term bank loans | — | 136,641 | ||||||
Repayments of long-term bank loans | (39,817) | (77,478) | ||||||
Payment for deferred initial public offering costs | (366,094) | (442,399) | ||||||
Capital contribution by shareholders | 5,000 | — | ||||||
Net cash used in financing activities | (400,911) | (383,236) | ||||||
Effect of exchange rate changes on cash and restricted cash | (63,670) | (60,781) | ||||||
Net change in cash and restricted cash | (338,019) | 615,374 | ||||||
Cash and restricted cash, beginning of the period | 7,717,615 | 5,285,940 | ||||||
Cash and restricted cash, end of the period | $ | 7,379,596 | $ | 5,901,314 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for income tax | $ | (39,402) | $ | (39,113) | ||||
Cash paid for interest | $ | (228) | $ | (3,154) | ||||
Cash paid for operating lease | $ | (288,667) | $ | (309,679) | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Right-of-use assets obtained in exchange for operating lease obligations | $ | — | $ | 1,955,909 | ||||
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SOURCE CCSC Technology International Holdings Limited
FAQ
What was the revenue for CCSC for the first six months of fiscal year 2024?
What was the gross profit for CCSC for the same period?
What was the net income for CCSC for the six months ended September 30, 2023?
What are CCSC's plans for strategic focus in the future?
Did CCSC experience any revenue growth in the first six months of fiscal year 2024?
