Nisun International Reports Unaudited Financial Results for the First Half of 2023
- Revenues increased by 8% to $126.9 million from the same period of the prior year
- Cash and cash equivalents experienced an aggregate growth of 66%
- Net cash provided by operating activities was approximately $57.2 million
- Gross profit decreased by 8% to $19.8 million
- Total operating expenses increased by 31% to $8.2 million
Insights
The recent financial results reported by Nisun International Enterprise Development Group Co., Ltd indicate a mixed financial performance with several key indicators of interest to stakeholders. The reported 8% increase in total revenue to $126.9 million, despite the broader economic challenges in China, is a positive sign of the company's resilience and may be viewed favorably by investors. However, the shift in revenue sources, with a decrease in supply chain trading business and an increase in financing services, suggests a strategic realignment that could have implications for future revenue stability and growth.
The 66% increase in cash and cash equivalents is a strong liquidity indicator, potentially bolstering investor confidence in the company's financial health. Nonetheless, the 11% increase in the cost of revenue and the subsequent 8% decrease in gross profit raise concerns about cost management and margin pressure. The significant 908% increase in selling expenses reflects aggressive marketing and distribution investments, which could either indicate a strategic push for market expansion or a response to competitive pressures.
The decrease in R&D expenses by 58% could be interpreted as a reduced focus on innovation, which may concern investors looking for long-term growth through new product development. However, it could also imply a strategic decision to allocate resources more efficiently. The net income decrease to $11.4 million from $14.4 million, along with a reduced net income per share, may impact investor sentiment and could suggest a need for strategic reassessment.
Overall, the financial report provides a complex picture of Nisun's current business state, with both strengths and vulnerabilities. Stakeholders should consider these results in the context of the company's strategic direction, market conditions and operational efficiency when assessing the potential impact on the company's valuation and future performance.
Nisun's financial results reflect broader trends in the Chinese market, where many industries are facing downward pressure and contraction. The company's pivot towards agricultural products supply chain trading and services and away from chemical products, is indicative of strategic flexibility and adaptation to changing market demands. The 28% increase in revenue from financing services, particularly from SME financing solutions, highlights a potential market opportunity as SMEs seek alternatives to traditional bank financing.
This shift in business strategy could have long-term implications for Nisun's market positioning and revenue diversification. The increased emphasis on financing services may provide a more stable revenue stream if the demand for alternative financing continues to grow. However, the reliance on a single market segment, such as SME financing, could also introduce risk if market conditions change or if competition intensifies.
The increase in short-term investments and the changes in cash flow from the previous year signal a strategic use of capital that may support the company's growth initiatives. These financial maneuvers will need to be monitored to ensure they contribute to sustainable growth and do not overextend the company's financial commitments.
Mr. Xiaoyun Huang, Chief Executive Officer of Nisun, commented, "We are pleased to announce our revenues remained resilient for the six months ended June 30, 2023, with an increase of
Financial Results for the Six Months Ended June 30, 2023
All comparisons made on a year-over-year ("yoy") basis.
Revenue
- Total revenue increased by
8% to$126.9 million $118.0 million - Revenue from Supply Chain Trading Business decreased by
6% to$66.2 million $70.7 million - Revenue from Financing Services increased by
28% to$60.7 million $47.3 million - Revenues generated from the Small and Medium Enterprise (SME) financing solutions business increased by
29% to$58.0 million $44.8 million - Revenue generated from supply chain financing solutions increased by
10% to$2.7 million $2.5 million
For the six months ended June 30, | Changes | |||||||||||||||||||||||
2023 | % | 2022 | % | ($) | ( %) | |||||||||||||||||||
Revenue from Supply Chain Trading Business | $ | 66,249,853 | 52 | % | $ | 70,727,078 | 60 | % | (4,477,225) | (6) | % | |||||||||||||
Revenue from financing services: | ||||||||||||||||||||||||
SME financing solutions | 57,956,690 | 46 | % | 44,822,386 | 38 | % | 13,134,304 | 29 | % | |||||||||||||||
Supply chain financing solutions | 2,737,265 | 2 | % | 2,498,446 | 2 | % | 238,819 | 10 | % | |||||||||||||||
Total revenue from financing service | 60,693,955 | 51 | % | 47,320,832 | 40 | % | 13,373,123 | 28 | % | |||||||||||||||
Total revenue | $ | 126,943,808 | 100 | % | $ | 118,047,910 | 100 | % | 8,895,898 | 8 | % | |||||||||||||
Cost of revenue
Cost of revenue was
Gross Profit
Gross profit decreased by
Operating Expenses
Total operating expense increased by
- Selling expenses increased by
908% to$2.6 million $0.3 million - General and administrative expenses increased by
6% to$5.5 million $5.2 million - R&D expenses decreased by
58% to$0.3 million $0.8 million - Bad debt expenses were
$(0.2) million
Other Income (Expense), net
The Company had a net other income of
Net Income
In the six months ended June 30, 2023, the Company achieved a net income of
Net Income per Share
Net income per share was
Financial Condition and Cash Flow
As of June 30, 2023, the Company had cash, cash equivalents and restricted cash of
In the six months ended June 30, 2023, net cash provided by operating activities was approximately
In the six months ended June 30, 2022, net cash used in operating activities was approximately
About Nisun International Enterprise Development Group Co., Ltd
Nisun International Enterprise Development Group Co., Ltd (NASDAQ: NISN) is a technology-driven, integrated supply chain solutions provider focused on transforming the corporate finance industry. Leveraging its industry experience, Nisun is dedicated to providing professional supply chain solutions to Chinese and foreign enterprises and financial institutions. Through its subsidiaries, Nisun provides users with professional solutions for technology supply chain management, technology asset routing, and digital transformation of tech and finance institutions, enabling the industry to strengthen and grow. At the same time, Nisun continues to deepen the field of industry segmentation through industrial and financial integration, by cultivating/creating an ecosystem of openness and empowerment. Nisun has built a linked platform that incorporates supply chain, banking, securities, trust, insurance, funds, state-owned enterprises, among other businesses. Focusing on industry-finance linkages, Nisun aims to serve the upstream and downstream of the industrial supply chain while also assisting with supply-side sub-sector reform. For more information, please visit http://ir.nisun-international.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains information about Nisun's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Nisun encourages you to review other factors that may affect its future results in Nisun's registration statement and in its other filings with the Securities and Exchange Commission. Nisun assumes no obligation to update or revise its forward-looking statements as a result of new information, future events or otherwise, except as expressly required by applicable law.
Contacts:
Nisun International Enterprise Development Group Co., Ltd
Investor Relations
Tel: +86 (21) 2357-0055
Email: ir@cnisun.com
Ascent Investor Relations LLC
Tina Xiao
Email: investors@ascent-ir.com
Tel: +1 (646) 932-7242
NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF JUNE 30, 2023 AND DECEMBER 31, 2022 | ||||||||
(EXPRESSED IN US DOLLARS) | ||||||||
June 30, | December 31, | |||||||
ASSETS | (Unaudited) | |||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 105,994,692 | $ | 63,901,329 | ||||
Restricted cash | 643,020 | 3,417,244 | ||||||
Short-term investments | 18,659,413 | 11,700,400 | ||||||
Accounts receivable, net | 28,967,293 | 18,931,346 | ||||||
Advance to suppliers, net | 17,406,052 | 46,968,549 | ||||||
Receivables from supply chain solutions | 38,035,826 | 43,475,981 | ||||||
Inventories | 48,819,585 | 31,609,877 | ||||||
Prepaid expenses and other current assets | 29,629,649 | 10,890,083 | ||||||
TOTAL CURRENT ASSETS | 288,155,530 | 230,894,809 | ||||||
NON-CURRENT ASSETS: | ||||||||
Property and equipment, net | 725,806 | 719,574 | ||||||
Intangible assets, net | 1,302,682 | 1,795,234 | ||||||
Right-of-use assets, net | 2,639,192 | 3,349,432 | ||||||
Equity investments | 355,064 | 373,292 | ||||||
Investment in limited partnership | - | 14,913,539 | ||||||
Goodwill | 22,651,104 | 23,814,005 | ||||||
Deferred tax assets, net | 14,852 | 310,577 | ||||||
Long-term investments | 4,137,189 | 7,249,319 | ||||||
TOTAL NON-CURRENT ASSETS | 31,825,889 | 52,524,972 | ||||||
TOTAL ASSETS | $ | 319,981,419 | $ | 283,419,781 | ||||
LIABILITIES | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 37,109,910 | $ | 40,925,155 | ||||
Short-term bank loans | 551,625 | 434,959 | ||||||
Accrued expenses and other current liabilities | 10,054,282 | 6,090,582 | ||||||
Operating lease liabilities - current | 897,816 | 1,008,766 | ||||||
Payables to supply chain solutions | 10,815,864 | 9,122,978 | ||||||
Advances from customer | 61,733,220 | 21,827,387 | ||||||
Taxes payable | 3,361,634 | 2,748,474 | ||||||
Loan from related party | 28,965 | 8,028,965 | ||||||
Due to related parties - current | 268,917 | 282,724 | ||||||
TOTAL CURRENT LIABILITIES | 124,822,233 | 90,469,990 | ||||||
Operating lease liabilities – non-current | 1,883,981 | 2,425,597 | ||||||
Deferred tax liabilities | 360,280 | 727,326 | ||||||
TOTAL LIABILITIES | 127,066,494 | 93,622,913 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Class A common stock, | 40,063 | 40,063 | ||||||
Class B common stock, | - | - | ||||||
Treasury shares | (373,358) | (355,844) | ||||||
Additional paid-in capital | 130,503,387 | 130,503,387 | ||||||
Retained earnings | 63,534,936 | 53,214,304 | ||||||
Statutory reserves | 10,166,600 | 9,167,845 | ||||||
Unearned compensation | - | - | ||||||
Accumulated other comprehensive (loss) income | (15,115,268) | (6,937,950) | ||||||
COMMON SHAREHOLDERS' EQUITY | 188,756,360 | 185,631,805 | ||||||
Non-controlling interests | 4,158,565 | 4,165,063 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 192,914,925 | 189,796,868 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 319,981,419 | $ | 283,419,781 | ||||
NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 | ||||||||
(EXPRESSED IN US DOLLARS) | ||||||||
(Unaudited) | ||||||||
For the Six Months Ended | ||||||||
2023 | 2022 | |||||||
REVENUES: | ||||||||
Revenues generated from sales: | ||||||||
Supply chain trading business | $ | 66,249,853 | $ | 70,727,078 | ||||
Revenues generated from services: | ||||||||
Small and Medium Enterprise financing solutions | 57,956,690 | 44,822,386 | ||||||
Supply Chain financing solutions | 2,737,265 | 2,498,446 | ||||||
Total revenue generated from services | 60,693,955 | 47,320,832 | ||||||
TOTAL REVENUES | 126,943,808 | 118,047,910 | ||||||
COST OF REVENUE: | ||||||||
Cost of revenue - services | (39,529,203) | (26,451,468) | ||||||
Cost of revenue - sales | (67,342,086) | (69,854,217) | ||||||
Business and sales related taxes | (231,103) | (165,506) | ||||||
GROSS PROFIT | 19,841,416 | 21,576,719 | ||||||
OPERATING EXPENSES: | ||||||||
Selling expenses | 2,637,517 | 261,590 | ||||||
General and administrative expenses | 5,489,580 | 5,177,548 | ||||||
Research and development expenses | 351,200 | 834,195 | ||||||
Bad debt expenses | (235,377) | - | ||||||
Total operating expenses | 8,242,920 | 6,273,333 | ||||||
INCOME FROM OPERATIONS | 11,598,496 | 15,303,386 | ||||||
OTHER INCOME (EXPENSE): | ||||||||
Interest and investment income | 1,498,856 | 1,249,509 | ||||||
Other income, net | 880,144 | 1,512,562 | ||||||
Total other income (expense), net | 2,379,000 | 2,762,071 | ||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 13,977,496 | 18,065,457 | ||||||
PROVISION FOR INCOME TAXES | 2,610,535 | 3,414,449 | ||||||
NET INCOME FROM CONTINUING OPERATIONS | 11,366,961 | 14,651,008 | ||||||
DISCONTINUED OPERATIONS: | ||||||||
(Loss) from discontinued operations, net of tax | - | (292,069) | ||||||
NET (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | - | (292,069) | ||||||
NET INCOME | 11,366,961 | 14,358,939 | ||||||
Less: net income from continuing operations attributable to non-controlling interest | 47,574 | 330,620 | ||||||
Less: net (loss) from discontinued operations attributable to non-controlling interest | - | (143,114) | ||||||
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS' | $ | 11,319,387 | $ | 14,171,433 | ||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
Foreign currency translation (loss) income | (8,175,831) | (8,182,987) | ||||||
COMPREHENSIVE INCOME | 3,143,556 | 5,988,446 | ||||||
Comprehensive (loss) attributable to non-controlling interests | (1,487) | 6,658 | ||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS' | $ | 3,142,069 | $ | 5,995,104 | ||||
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE: | ||||||||
Income from continuing operations | $ | 2.87 | $ | 3.67 | ||||
(Loss) from discontinued operations | - | (0.07) | ||||||
TOTAL EARNINGS (LOSS) PER COMMON SHARE | $ | 2.87 | $ | 3.60 | ||||
Weighted average number of shares outstanding-basic and diluted | 3,943,288 | 3,991,263 | ||||||
NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES | ||||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
FOR THE SIX MOTHS ENDED JUNE 30, 2023 AND 2022 | ||||||||
(EXPRESSED IN US DOLLARS) | ||||||||
(Unaudited) | ||||||||
For the Six Months Ended | ||||||||
2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 11,366,961 | $ | 14,358,939 | ||||
Net (loss) from discontinued operations | - | (292,069) | ||||||
Net income from continuing operations | 11,366,961 | 14,651,008 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating | ||||||||
Depreciation and amortization | 1,294,166 | 639,002 | ||||||
Stock-based compensation | - | 125,630 | ||||||
Bad debt expense | (234,120) | - | ||||||
Loss on disposition of property and equipment | 4,178 | - | ||||||
Loss (Income) from investments | (7,296) | 218,929 | ||||||
Deferred tax (benefit) expense | (51,609) | (92,798) | ||||||
Issuance of stock for services | - | 185,000 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (11,089,756) | (4,310,119) | ||||||
Advance to suppliers | 28,012,573 | (15,246,921) | ||||||
Prepaid expenses and other current assets | (3,140,645) | 1,444,248 | ||||||
Operating lease right-of-use assets | - | (3,115,440) | ||||||
Receivables from supply chain solutions | 3,411,356 | 32,564,078 | ||||||
Inventories | (18,988,807) | (17,968,203) | ||||||
Accounts payable | (1,839,578) | (25,094,299) | ||||||
Advance from customers | 41,474,328 | 9,408,745 | ||||||
Taxes payable | 754,075 | (6,205,647) | ||||||
Other payables | 4,016,393 | (735,659) | ||||||
Payable to supply chain solutions | 2,165,239 | (19,913,058) | ||||||
Operating lease liabilities | (490,946) | 3,041,808 | ||||||
Accrued expenses and other current liabilities | 567,503 | 340,313 | ||||||
Net cash (used in) provided by operating activities from continuing operations | 57,224,015 | (30,063,383) | ||||||
Net cash (used in) operating activities of discontinued operations | - | (356,347) | ||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 57,224,015 | (30,419,730) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisition of property and equipment | (226,403) | (178,953) | ||||||
Purchase of intangible asset | (43,534) | - | ||||||
Cash paid for acquisitions | - | (78,944) | ||||||
Purchase of long-term investment | - | (2,985,921) | ||||||
Cash received on disposal of discontinued operations | - | - | ||||||
Proceeds from sale of short-term investments | 53,004,461 | 49,210,720 | ||||||
Proceeds from sale of Long-term investment | 2,792,763 | - | ||||||
Proceeds from investment in debt securities | 14,204,625 | - | ||||||
Purchase of short-term investments | (60,463,319) | (21,825,681) | ||||||
Repayments from loans to third parties | 471,604 | - | ||||||
Payments made for loans to third parties | (16,756,578) | - | ||||||
Net cash provided by (used in) investing activities from continuing operations | (7,016,381) | 24,141,221 | ||||||
Net cash (used in) investing activities from discontinued operations | - | - | ||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (7,016,381) | 24,141,221 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term bank loans | 139,638 | - | ||||||
Repayment of short-term bank loans | (11,912) | (773,960) | ||||||
Proceeds from third party loans | 1,954,934 | 3,363,632 | ||||||
Repayment to related party | (8,000,000) | (1,010,517) | ||||||
Repayment of third party loans | (2,252,363) | - | ||||||
Proceeds from related party | - | 8,049,187 | ||||||
Capital contribution from non-controlling interest | 37,116 | - | ||||||
Repurchase Treasury shares | (17,514) | - | ||||||
Net cash provided by (used in) financing activities from continuing operations | (8,150,101) | 9,628,342 | ||||||
Net cash (used in) financing activities from discontinued operations | - | - | ||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (8,150,101) | 9,628,342 | ||||||
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS | (2,738,394) | (3,539,963) | ||||||
NET (DECREASE) IN CASH AND CASH EQUIVALENTS | 39,319,139 | (190,130) | ||||||
Add: decrease in cash and cash equivalents from discontinued operations | - | 356,347 | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 39,319,139 | 166,217 | ||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH- | 67,318,573 | 91,627,041 | ||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH-ENDING | $ | 106,637,712 | $ | 91,793,258 | ||||
SUPPLEMENTAL CASH FLOW DISCLOSURES: | ||||||||
Cash paid for income taxes | $ | 1,560,580 | $ | 8,163,616 | ||||
Cash paid for interest | $ | 11,912 | $ | 5,420 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||||||||
Accrued lease liabilities | $ | 2,781,797 | $ | 3,396,841 | ||||
Issuance of shares for compensation | $ | - | $ | 185,000 | ||||
CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS | ||||||||
Cash and cash equivalents | $ | 105,994,692 | $ | 90,988,227 | ||||
Restricted cash | 643,020 | 805,031 | ||||||
Total cash, cash equivalents and restricted cash | $ | 106,637,712 | $ | 91,793,258 | ||||
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SOURCE Nisun International Enterprise Development Group Co., Ltd
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