J-Long Group Limited Announces First Half 2024 Unaudited Financial Results
- Revenue decreased by 34.9% to US$14.6 million compared to US$22.4 million in 2022.
- Net income fell to US$1.4 million from US$3.4 million in 2022.
- Selling, general and administrative expenses increased by 22% to US$2.4 million.
- Other net income decreased to US$0.2 million from US$0.3 million in 2022.
- Income tax expense decreased to US$0.3 million from US$0.7 million in 2022.
- Basic and diluted EPS were US$0.05 per ordinary share compared to US$0.11 in 2022.
- The Company had cash of US$768,159, total current assets of $17,018,359, and total current liabilities of US$6,259,310 as of September 30, 2023.
- Total assets and total liabilities amounted to US$20,753,700 and US$7,986,428, respectively.
- Total stockholder’s equity was US$12,767,272 with a gearing ratio of 18.3% as of September 30, 2023.
- The Company does not have any off-balance sheet arrangements.
- None.
Insights
The reported 34.9% decrease in revenue and significant drop in net income for J-Long Group Limited is a red flag for investors, indicating a potential contraction in the company's market share or operational challenges. The decline in sales of heat transfers, which was only partially offset by an increase in sales of other products, suggests a shift in product demand or competitive pressures that need to be closely monitored. Additionally, the increase in selling, general and administrative expenses, particularly due to higher payroll and rental fees, raises concerns about cost management and the scalability of the company's business model in the current economic climate.
From a liquidity standpoint, while the company has a positive working capital ratio, the relatively low cash position of US$768,159 could limit its ability to navigate short-term obligations without resorting to additional financing or operational adjustments. The gearing ratio of 18.3% provides some insight into the company's leverage and financial risk, which appears moderate but warrants caution given the declining profitability.
The apparel trims solution sector is highly competitive and subject to rapid shifts in consumer preferences and technological advancements. J-Long Group's performance needs to be contextualized within industry trends, such as the rise of sustainable materials and digital supply chain solutions. The significant reduction in heat transfer sales could be indicative of broader market trends away from traditional trims towards innovative, eco-friendly alternatives. It's important for the company to adapt its product portfolio to align with these trends to maintain relevance and market share.
Furthermore, the Hong Kong market has been facing unique challenges, including political unrest and the impact of global trade tensions, which may have contributed to the company's performance. Investors should consider these external factors when evaluating the company's outlook and strategic direction.
The decrease in income tax expense aligns with the lower net income, reflecting a reduced tax burden due to declining profits. This is a straightforward consequence of the company's financial performance, as most tax jurisdictions calculate corporate tax based on profitability. However, investors should note that while a lower tax expense may provide some short-term relief, it is not a sustainable strategy for profitability. The company must address the underlying causes of the revenue decrease to improve its financial health and tax planning strategy in the long term.
HONG KONG, March 25, 2024 (GLOBE NEWSWIRE) -- J-Long Group Limited (“JL” or the “Company”) (NASDAQ: JL), JL conducts its primary operations of apparel trims solution services in Hong Kong, today announced its unaudited financial results for the six months ended September 30, 2023.
Overview:
- Revenue was approximately US
$14.6 million for the six months ended September 30, 2023, representing a decrease of approximately34.9% from the same period in 2022. - Net income was approximately US
$1.4 million for the six months ended September 30, 2023 (2022: approximately US$3.4 million ).
Six Month Financial Results Ended September 30, 2023
Revenue. Revenue decreased by approximately
Selling, general and administrative expenses. Selling, general and administrative expenses increased by approximately
Other income, net. Other net income decreased by approximately US
Income tax expense. Income tax expense decreased to US
Net income. Net income decreased by approximately US
Basic and diluted EPS. Basic and diluted EPS were approximately US
Liquidity and Capital Resources
As of September 30, 2023, the Company had cash of US
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, credit risk support, or other benefits.
About J-Long Group Limited
J-Long Group Limited is an established distributor in Hong Kong of reflective and non-reflective garment trims including, among others, heat transfers, fabrics, woven labels and tapes, sewing badges, piping, zipper pullers and drawcords. The Company offer a wide range of services to cater to customers’ needs in reflective and non-reflective garment trims, including market trend analysis, product design and development and production and quality control. For more information, visit the Company’s website at http://j-long.com.
Safe Harbor Statement
Certain statements in this announcement are forward-looking statements. 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 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,” “is/are likely to,” “potential,” “continue” or other similar expressions. 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 SEC, which are available for review at www.sec.gov.
Hong Kong:
J-Long Group Limited
Edwin Wong, CEO and Director
ir@j-long.com +852 3693 2110
| J-LONG GROUP LIMITED UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||
| As of | |||||||
March 31, | September 30, | ||||||
| 2023 | 2023 | ||||||
| USD | USD | ||||||
| (Audited) | (Unaudited) | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | 5,959,927 | 768,159 | |||||
| Accounts receivable, net | 2,085,776 | 1,905,455 | |||||
| Accounts receivable, net – related parties | 17,562 | 66,298 | |||||
| Investment in marketable debt securities | 243,284 | 44,070 | |||||
| Inventories | 5,785,616 | 6,676,754 | |||||
| Notes receivable | 393,442 | - | |||||
| Prepaid expenses and other current assets, net | 126,208 | 248,219 | |||||
| Due from related parties | 2,109,768 | 7,309,404 | |||||
| Total current assets | 16,721,583 | 17,018,359 | |||||
| Property, plant and equipment, net | 2,367,136 | 2,313,122 | |||||
| Right-of-use assets – Operating lease | 447,475 | 262,831 | |||||
| Deferred cost | 989,793 | 1,079,762 | |||||
| Deferred tax assets | 79,626 | 79,626 | |||||
| Total non-current assets | 3,884,030 | 3,735,341 | |||||
| TOTAL ASSETS | 20,605,613 | 20,753,700 | |||||
| Liabilities | |||||||
| Current liabilities: | |||||||
| Bank loans – current | 626,657 | 626,657 | |||||
| Operating lease liabilities – current | 7,151 | - | |||||
| Operating lease liabilities – current – related parties | 359,658 | 258,322 | |||||
| Accounts payable, accruals and other current liabilities | 3,167,676 | 3,169,449 | |||||
| Accounts payable – related parties | 2,382,072 | 1,625,969 | |||||
| Contract liabilities | 231,475 | - | |||||
| Due to related parties | 240,375 | 158,182 | |||||
| Income taxes payable | 140,236 | 420,731 | |||||
| Total current liabilities | 7,155,300 | 6,259,310 | |||||
| Non-current liabilities | |||||||
| Bank loans – non-current | 2,014,375 | 1,715,472 | |||||
| Operating lease liabilities – non-current – related parties | 88,139 | 11,646 | |||||
| Total non-current liabilities | 2,102,514 | 1,727,118 | |||||
| TOTAL LIABILITIES | 9,257,814 | 7,986,428 | |||||
| Commitments and contingencies | — | — | |||||
| Shareholders’ equity | |||||||
| Ordinary shares US | 1,125 | 1,125 | |||||
| Additional Paid-in Capital | 256,410 | 256,410 | |||||
| Accumulated other comprehensive income/(loss) | (414 | ) | (414 | ) | |||
| Retained earnings | 11,090,678 | 12,510,151 | |||||
| Total shareholders’ equity | 11,347,799 | 12,767,272 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 20,605,613 | 20,753,700 | |||||
J-LONG GROUP LIMITED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||||
| For the six months ended September 30, | ||||||
| 2022 | 2023 | |||||
| USD | USD | |||||
| (Unaudited) | (Unaudited) | |||||
| Revenues | 22,384,724 | 14,571,703 | ||||
| Cost of sales | 16,579,568 | 10,589,566 | ||||
| Gross profit | 5,805,156 | 3,982,137 | ||||
| Operating expenses: | ||||||
| Selling and marketing expenses | 1,040,775 | 1,037,531 | ||||
| General and administrative expenses | 966,350 | 1,411,237 | ||||
| Total operating expenses | 2,007,125 | 2,448,768 | ||||
| Income from operations | 3,798,031 | 1,533,369 | ||||
| Other income (expenses): | ||||||
| Other income (expenses) | 183,497 | 25,816 | ||||
| Currency exchange gain | 124,306 | 222,203 | ||||
| Interest (expenses) income, net | (45,255 | ) | (81,420 | ) | ||
| Total other income (expense) | 262,548 | 166,599 | ||||
| Income before tax expense | 4,060,579 | 1,699,968 | ||||
| Income tax expense | 670,013 | 280,495 | ||||
| Net income | 3,390,566 | 1,419,473 | ||||
| Other comprehensive income/(loss) | ||||||
| Unrealized gain (losses) on investment in marketable debt securities, net of tax | - | - | ||||
| Total comprehensive income | 3,390,566 | 1,419,473 | ||||
| Net income per share attributable to ordinary shareholders | ||||||
| Basic and diluted | 0.11 | 0.05 | ||||
| Weighted average number of ordinary shares used in computing net income per share | ||||||
| Basic and diluted | 30,000,000 | 30,000,000 | ||||
FAQ
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