Pop Culture Group Co., Ltd Reports First Six Months of Fiscal Year 2022 Unaudited Financial Results
Pop Culture Group Co., Ltd (CPOP) reported a revenue increase of 46% to $20.15 million for the first six months of fiscal year 2022, compared to $13.84 million in the same period last year. Event hosting revenue saw a 73% rise, contributing $11.97 million. However, net profit fell to $0.45 million from $2.37 million a year ago, with earnings per share decreasing to $0.02 from $0.13. The gross margin declined to 20% due to increased operational costs amidst the pandemic. The company aims to capitalize on the growing street dance culture in China.
- Revenue increased by $6.31 million, or 46%, to $20.15 million.
- Event hosting revenue rose by 73% to $11.97 million.
- Brand promotion revenue jumped by 169% to $1.46 million.
- Net profit dropped to $0.45 million, down from $2.37 million.
- Basic and diluted EPS decreased to $0.02 from $0.13.
- Gross margin fell to 20% from 28% due to increased operational costs.
XIAMEN, China, May 17, 2022 /PRNewswire/ -- Pop Culture Group Co., Ltd ("Pop Culture" or the "Company") (Nasdaq: CPOP), a hip-pop culture company in China, today reported its unaudited financial results for the first six months of fiscal year 2022.
First Six Months of Fiscal Year 2022 Financial Highlights
- Total revenue was
$20.15 million , an increase of46% from$13.84 million in the first six months of fiscal year 2021. - Revenue from event hosting was
$11.97 million , an increase of73% from$6.93 million in the first six months of fiscal year 2021. - Revenue from event planning and execution was
$6.72 million , an increase of9% from$6.18 million in the first six months of fiscal year 2021. - Revenue from brand promotion was
$1.46 million , an increase of169% from$0.54 million in the first six months of fiscal year 2021. - Gross profit was
$4.12 million , an increase of6% from$3.88 million in the first six months of fiscal year 2021. - Net profit was
$0.45 million , compared with$2 .37 million in the first six months of fiscal year 2021. - Basic and diluted earnings per share were
$0.02 , compared with$0.13 in the first six months of fiscal year 2021.
First Six Months of Fiscal Year 2022 Operational Highlights
- The Company's concerts and hip-hop events generated an aggregate attendance of 203,233 during the six months ended December 31, 2021.
- The Company's online hip-hop programs generated over 156.86 million views during the six months ended December 31, 2021.
- The Company served 11 clients and 23 events with respect to event planning and execution during the six months ended December 31, 2021.
Mr. Zhuoqin Huang, Chairman and Chief Executive Officer of Pop Culture, commented, "The global COVID-19 pandemic has undeniably affected our offline events related to our intellectual property portfolio. Under the unfavorable circumstances, our revenue still increased by
Mr. Huang continued, "As a public company that focuses on hip-hop culture, our intellectual properties are the core of our business development. We will maintain our competitive advantages in the industry and improve our business model, which will enable us to achieve revenue growth in the short and medium term and strategic development in the long term. In addition, our customers and partners' recognition and support have laid a solid foundation for our future business growth, and we are incredibly grateful to them. Looking forward, we are committed to focusing on the operation and promotion of Chinese trendy culture and will strive to maintain our role as the pioneer of the hip-pop culture industry."
First Six Months of Fiscal Year 2022 Financial Results
Revenue
Following table presents the Company's revenue by revenue source and by proportion:
For the Six Months Ended December 31, | Change | |||||||||||||||||||||||
2021 | % | 2020 | % | Amount | % | |||||||||||||||||||
Event Hosting | $ | 11,966,659 | 59 | % | $ | 6,932,911 | 50 | % | $ | 5,033,748 | 73 | % | ||||||||||||
Event Planning and | 6,724,615 | 33 | % | 6,177,834 | 45 | % | 546,781 | 9 | % | |||||||||||||||
Brand Promotion | 1,456,929 | 7 | % | 542,179 | 4 | % | 914,750 | 169 | % | |||||||||||||||
Other services | - | - | % | 188,278 | 1 | % | (188,278) | (100) | % | |||||||||||||||
Total revenue | $ | 20,148,203 | 100 | % | $ | 13,841,202 | 100 | % | $ | 6,307,002 | 46 | % |
Total revenue increased by
Revenue from event planning and execution increased by
Revenue from brand promotion increased by
No other revenue from other services occurred in the first six months of fiscal year 2022.
Cost of Revenue
The cost of revenue increased by
The cost of revenue was derived from the following sources:
For the Six Months Ended December 31, | Change | |||||||||||||||||||||||
2021 | % | 2020 | % | Amount | % | |||||||||||||||||||
Event Hosting | $ | 8,956,898 | 56 | % | $ | 4,718,706 | 47 | % | $ | 4,238,192 | 90 | % | ||||||||||||
Event Planning and | 5,778,554 | 36 | % | 4,972,303 | 50 | % | 806,251 | 16 | % | |||||||||||||||
Brand Promotion | 1,295,843 | 8 | % | 250,713 | 3 | % | 1,045,130 | 417 | % | |||||||||||||||
Other services | - | - | % | 17,043 | 0 | % | (17,043) | (100) | % | |||||||||||||||
Total Cost of revenue | $ | 16,031,295 | 100 | % | $ | 9,958,765 | 100 | % | $ | 6,072,530 | 61 | % |
Gross Profit and Gross Margin
Gross profit increased by
The following table displays the gross profit:
For the Six Months Ended December 31, | Change | |||||||||||||||||||||||||||||||
2021 | % | Gross | 2020 | % | Gross | Amount | % | |||||||||||||||||||||||||
Event Hosting | $ | 3,009,761 | 73 | % | 25 | % | $ | 2,214,205 | 57 | % | 32 | % | $ | 795,556 | 36 | % | ||||||||||||||||
Event Planning and | 946,061 | 23 | % | 14 | % | 1,205,531 | 31 | % | 20 | % | (259,470) | (22) | % | |||||||||||||||||||
Brand Promotion | 161,086 | 4 | % | 11 | % | 291,466 | 8 | % | 54 | % | (130,380) | (45) | % | |||||||||||||||||||
Other services | - | - | % | - | % | 171,235 | 4 | % | 91 | % | (171,235) | (100) | % | |||||||||||||||||||
Total gross profit | $ | 4,116,908 | 100 | % | 20 | % | $ | 3,882,437 | 100 | % | 28 | % | $ | 234,471 | 6 | % |
Operating Expenses
Total operating expenses increased by
Selling and marketing expenses increased by
General and administrative expenses increased by
Operating Profit for the Period
Operating profit was
Income Tax Expenses
Income tax expenses were
Net Profit for the Period
Net profit was
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were
Cash Flows
Net cash used in operating activities was
Cash, Cash Equivalents, Term Deposits and Short-term Investments
As of December 31, 2021, the combined balance of the Company's cash, cash equivalents, term deposits, and short-term investments amounted to
Exchange Rate
This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.3726 to
Recent Developments
Regular Season of 2021 China Battle Championships Completed
The preseason of 2021 China Battle Championships was completed in September 2021. A total of 294 outstanding street dancers from eight regions, namely Guangxi autonomous region, Shaanxi province, Fujian province, Yunnan province, Sichuan province, Shandong province, Chongqing city, and Hubei province, participated in this online competition.
The regular season was divided into a northern division and a southern division and was held during the China National Day holidays. Four teams representing Guangxi autonomous region, Yunnan province, Fujian province and Hubei province competed in the southern division and four teams representing Sichuan province, Chongqing city, Shaanxi province and Shandong province competed in the northern division.
Established Joint Venture Shenzhen Jam Box Technology Co., Ltd
On November 18, 2021, the Company established a joint venture with Shenzhen HipHopJust Information Technology Co., Ltd. ("HIT"), Shenzhen Jam Box Technology Co., Ltd ("JBT"). The Company owns a
The Company believes that JBT will be the first-ever software-as-a-service("SaaS") platform provider that focuses on street dance chain in China, and it will enable the Company to scale its business and to support the growing number of dance organizations. JBT is expected to provide comprehensive services on its SaaS platform, covering event intellectual property services, educational services, teaching and research services, sales services, and management services.
Organizational Structure Upgraded
The Company has upgraded its organizational structure and determined its growth strategies, which center on three core business groups: POPIDEA, POPSPORTS, and POPFUN. As a result of the organizational structure upgrade, the Company now has businesses in Northeast, North, Central, East, and South China, which are expected to establish an efficient operating system and abundant resource reserves.
The POPIDEA business includes marketing strategic consulting services, creative design services, implementation of offline brand promotion activities, and online marketing promotion activities. In the future, this business portfolio will be strategy-oriented to provide customers with a variety of one-stop services
The POPSPORTS business is dedicated to find excellent hip-hop dancers and coaches through the promotion and use of SaaS system of hip-hop dance training institutions and the holding of the China Battle Championships and other hip-hop dance events, to transport excellent hip-hop dance talents for the local and national hip-hop dance team, and cooperate to establish a hip-hop dance vocational education system, and to build a hip-hop dance industry base, to seek the business opportunities for the Company.
The POPFUN business includes the strategic cooperation of multiple hip-hop music labels, the entertainment and performing arts brokerage services, the Chinese cultural and hip-hop relative commodities e-commerce, and the business development in metaverse about the digital contents of hip-hop, to further develop the Company's business in the field of digital content copyright.
Won the Tender for Hanfu Cultural Festival
On October 22, 2021, the Company won the tender for Hanfu Cultural Festival (the "Festival") put out by Migu Comic Co., Ltd., a digital content provider that operates the app Migu Quanquan. Migu Quanquan promotes Hanfu (traditional styles of clothing worn by the Han people in China) culture and provides Hanfu fans with a one-stop service of various Hanfu culture related activities. The Company expects to provide customized services for the Festival, including online and offline special event planning, event execution, and app promotion.
According to a report by iiMedia Research, the sales of Hanfu in China surged from RMB190 million (approximately US
About Pop Culture Group Co., Ltd
Headquartered in Xiamen, China, Pop Culture Group Co., Ltd is a hip-hop culture company. The Company aims to promote hip-hop culture and its values of love, peace, unity, respect, and having fun, and to promote cultural exchanges with respect to hip-hop between the United States and China. With the values of hip-hop culture at its core and the younger generation as its primary target audience, the Company hosts entertainment events, operates hip-hop related online programs, and provides event planning and execution services and marketing services to corporate clients. The Company has in recent years focused on developing and hosting its own hip-hop events. For more information, visit the Company's website at http://ir.cpop.cn/.
Forward-Looking Statements
Certain statements made in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, including the further spread of the COVID-19 virus or new variants thereof, or the occurrence of another wave of cases and the impact it may have on the Company's operations and the demand for the Company's services, 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 its other filings with the SEC.
For more information, please contact:
Pop Culture Group Co., Ltd
Investor Relations Department
Email: ir@cpop.cn
Ascent Investors Relations LLC
Tina Xiao
President
Phone: 917-609-0333
Email: tina.xiao@ascent-ir.com
POP CULTURE GROUP CO., LTD AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In U.S. dollars, except share data) | ||||||||
As of | As of | |||||||
2021 | 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 28,510,993 | $ | 1,319,977 | ||||
Accounts receivable, net | 26,566,497 | 25,537,236 | ||||||
Advance to suppliers | 6,452,036 | 1,999,876 | ||||||
Prepaid expenses and other current assets | 1,384,074 | 3,553,028 | ||||||
TOTAL CURRENT ASSETS | 62,913,600 | 32,410,117 | ||||||
Property and equipment, net | 105,068 | 48,393 | ||||||
Intangible asset, net | 1,545,488 | 1,635,321 | ||||||
Operating right-of-use asset | 155,359 | 194,747 | ||||||
Deferred tax assets | 403,302 | 140,757 | ||||||
Other non-current assets | 740,197 | - | ||||||
TOTAL ASSETS | $ | 65,863,014 | $ | 34,429,335 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank loans | $ | 3,985,814 | $ | 5,140,990 | ||||
Accounts payable | 1,238,992 | 1,900,883 | ||||||
Deferred revenue | 393,874 | 1,648,847 | ||||||
Taxes payable | 4,544,132 | 4,232,391 | ||||||
Due to a related party | - | 225,000 | ||||||
Accrued liabilities and other payables | 262,447 | 77,567 | ||||||
Operating lease liability - current | 96,227 | 98,427 | ||||||
TOTAL CURRENT LIABILITIES | 10,521,486 | 13,324,105 | ||||||
Long-term bank loans | 1,506,449 | 1,672,370 | ||||||
Operating lease liability - non-current | 50,583 | 104,755 | ||||||
TOTAL LIABILITIES | 12,078,518 | 15,101,230 | ||||||
Commitments and contingencies | - | |||||||
SHAREHOLDERS' EQUITY | ||||||||
Ordinary Shares (par value | 24,050 | 17,850 | ||||||
Subscription receivable | (15,441) | (15,441) | ||||||
Additional paid-in capital | 40,706,356 | 6,643,118 | ||||||
Statutory reserve | 1,391,770 | 1,241,573 | ||||||
Retained earnings | 10,794,621 | 10,498,183 | ||||||
Accumulated other comprehensive (loss) income | 883,140 | 942,822 | ||||||
TOTAL POP CULTURE GROUP CO., LTD | 53,784,496 | 19,328,105 | ||||||
Non-controlling interests | - | - | ||||||
TOTAL SHAREHOLDERS' EQUITY | 53,784,496 | 19,328,105 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 65,863,014 | $ | 34,429,335 |
POP CULTURE GROUP CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In U.S. dollars, except share data) (UNAUDITED) | ||||||||
For the Six Months | ||||||||
2021 | 2020 | |||||||
REVENUE, NET | $ | 20,148,203 | $ | 13,841,202 | ||||
Cost of revenue | 16,031,295 | 9,958,765 | ||||||
GROSS PROFIT | 4,116,908 | 3,882,437 | ||||||
Selling and marketing | 193,720 | 104,961 | ||||||
General and administrative | 2,844,154 | 675,325 | ||||||
Total operating expenses | 3,037,874 | 780,286 | ||||||
INCOME FROM OPERATIONS | 1,079,034 | 3,102,151 | ||||||
Other (expenses) income: | ||||||||
Interest expenses, net | (194,616) | (99,126) | ||||||
Other (expenses) income, net | 74,476 | 49,704 | ||||||
Total other expenses, net | (120,140) | (49,422) | ||||||
INCOME BEFORE INCOME TAX PROVISION | 958,894 | 3,052,729 | ||||||
PROVISION FOR INCOME TAXES | 512,259 | 686,102 | ||||||
NET INCOME | 446,635 | 2,366,627 | ||||||
Less: net income attributable to non-controlling interests | - | 164,468 | ||||||
NET INCOME ATTRIBUTABLE TO POP CULTURE | 446,635 | 2,202,159 | ||||||
Other comprehensive (loss) income: | ||||||||
Foreign currency translation adjustment | (59,682) | 1,223,994 | ||||||
COMPREHENSIVE INCOME | 386,953 | 3,590,621 | ||||||
Less: comprehensive income attributable to non- | - | 240,471 | ||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO POP | $ | 386,953 | $ | 3,350,150 | ||||
Net income per share | ||||||||
Basic and diluted | $ | 0.02 | $ | 0.13 | ||||
Weighted average shares used in calculating net income | 20,950,000 | 16,784,911 | ||||||
Basic and diluted |
POP CULTURE GROUP CO. LTD AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In U.S. dollars) (UNAUDITED) | ||||||||
For the Six Months December 31 | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net Income | $ | 446,635 | $ | 2,366,627 | ||||
Adjustments to reconcile net income to net cash provided | ||||||||
Allowance for doubtful accounts | 1,038,762 | 147,505 | ||||||
Depreciation and amortization | 129,203 | 117,086 | ||||||
Deferred tax benefit | 39,388 | (38,797) | ||||||
Non-cash lease expense | (1,105) | 62,813 | ||||||
Loss from disposal of property and equipment | (262,545) | - | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (2,093,244) | (3,285,638) | ||||||
Advance to suppliers | (4,452,160) | 1,178,486 | ||||||
Amounts due from related parties | - | - | ||||||
Prepaid expenses and other current assets | 2,111,735 | (1,196,329) | ||||||
Other non-current assets | (740,197) | 257,493 | ||||||
Accounts payable | (661,891) | 317,130 | ||||||
Deferred revenue | (1,254,973) | (419,123) | ||||||
Taxes payable | 311,741 | 665,261 | ||||||
Accrued liabilities and other payables | 184,880 | (32,207) | ||||||
Due to a related party | (225,000) | - | ||||||
Operating lease liability | (56,372) | (63,208) | ||||||
Net cash provided by (used in) operating activities | (5,485,143) | 77,099 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (74,411) | - | ||||||
Net cash (used in) provided by investing activities | (74,411) | - | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term bank loans | 1,569,218 | 4,200,348 | ||||||
Repayments of short-term bank loans | (2,981,515) | (1,448,396) | ||||||
Proceeds from long-term bank loans | (351,740) | - | ||||||
Contribution from shareholders | 34,069,438 | - | ||||||
Payment for deferred offering costs | 82,440 | (478,953) | ||||||
Net cash provided by financing activities | 32,387,841 | 2,272,999 | ||||||
Effect of exchange rate changes | 362,729 | 190,760 | ||||||
Net increase (decrease) in cash | 27,191,016 | 2,540,858 | ||||||
Cash at beginning of year | 1,319,977 | 1,359,137 | ||||||
Cash at end of year | $ | 28,510,993 | $ | 3,899,995 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW | ||||||||
Income tax paid | $ | 418,718 | $ | 8,883 | ||||
Interest expense paid | $ | 56,771 | $ | 98,163 |
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SOURCE Pop Culture Group Co., Ltd
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