TIAN RUIXIANG Holdings Ltd Reports Financial Results for Fiscal Year Ended October 31, 2023
TIAN RUIXIANG Holdings (Nasdaq: TIRX) reported financial results for the fiscal year ended October 31, 2023. The company, a China-based insurance broker, experienced an 8.0% decrease in revenue to $1.2 million, primarily due to lower commissions from several insurance products and loss of certain partners. However, they achieved a significant increase of $612,000 in commissions from liability insurance products. Despite the revenue decline, TIRX managed to reduce its net loss by 47.6% to $2.5 million, down from $4.7 million in the previous year. This improvement demonstrates enhanced financial performance and operational efficiency. The company's total operating expenses decreased by 33.6% to $4.3 million, while the loss from operations narrowed by 40.5% to $3.0 million.
- Significant increase of $612,000 in commissions from liability insurance products
- Net loss reduced by 47.6% to $2.5 million
- Total operating expenses decreased by 33.6% to $4.3 million
- Loss from operations narrowed by 40.5% to $3.0 million
- Loss per share improved by 55.4% to $3.87
- Revenue decreased by 8.0% to $1.2 million
- Lower commissions from several insurance products
- Loss of certain insurance company partners
- Challenging macroeconomic environment in China
Insights
TIAN RUIXIANG Holdings Ltd has reported a mix of positive and negative financial outcomes for the fiscal year ending October 31, 2023. A key takeaway is the 8% decline in revenue, from
However, on the positive side, the company saw a substantial increase of approximately
The most notable improvement is the significant reduction in net loss by 47.6% to
For retail investors, while the revenue decline may seem discouraging, the company's ability to cut its net loss substantially and grow its liability insurance segment offers a more optimistic outlook. It would be prudent to monitor how the company continues to navigate the competitive landscape and whether it can sustain and expand its growth in liability insurance.
From a market research perspective, the challenges faced by TIAN RUIXIANG Holdings Ltd are indicative of broader industry trends in the insurance sector in China. The competitive market and the macroeconomic environment have played significant roles in the decline in revenue.
The reported 8% revenue drop highlights the vulnerabilities the company faces, particularly in its traditional insurance products. However, the growth in liability insurance commissions by a significant margin underscores a strategic pivot that could position the company favorably in a niche market. Liability insurance is increasingly important for businesses, offering protection against risks and legal uncertainties.
Retail investors should consider the strategic implications of this shift. If the company can continue to capitalize on this segment, it could stabilize and potentially increase its revenue streams, despite the competitive pressures in the traditional insurance market. Additionally, the improved operational efficiency and reduced net loss are promising signs of a leaner and potentially more resilient business model moving forward.
BEIJING, July 17, 2024 (GLOBE NEWSWIRE) -- TIAN RUIXIANG Holdings Ltd (Nasdaq: TIRX) (the "Company"), a China-based insurance broker conducting business through its variable interest entity in China, today announced its financial results for the fiscal year ended October 31, 2023.
Ms. Sheng Xu, the Chief Executive Officer of the Company, commented, “For the year ended October 31, 2023, the Company generated revenue of about
“However, we achieved a significant increase of approximately
“Despite the revenue decline, we were able to reduce the net loss by
Selected Fiscal Year 2023 Financial Metrics
| Years Ended October 31, | Changes in | ||||||||
| ($ in millions, except per share data, differences due to rounding.) | 2023 | 2022 | Percentage | ||||||
| Revenues | $ | 1.2 | $ | 1.4 | (8.0) | % | |||
| Total operating expenses | 4.3 | 6.4 | (33.6) | % | |||||
| Loss from operations | (3.0) | (5.1) | (40.5) | % | |||||
| Net loss | (2.5) | (4.7) | (47.6) | % | |||||
| Loss per share | (3.87) | (9.03) | (55.4) | % | |||||
- Revenue decreased by
8.0% to$1.2 million for the year ended October 31, 2023, compared with$1.4 million for the same period in 2022. - Total operating expenses were
$4.3 million for the year ended October 31, 2023, decreased from$6.4 million for the same period in 2022. - Loss from operations narrowed by
40.5% to$3.0 million for the year ended October 31, 2023, from$5.1 million for the same period in 2022. - Net loss also decreased by
47.6% to$2.5 million for the year ended October 31, 2023, from$4.7 million for the same period in 2022.
About TIAN RUIXIANG Holdings Ltd
TIAN RUIXIANG Holdings Ltd, headquartered in Beijing, China, is an insurance broker operating in China through its China-based variable interest entity. It distributes a wide range of insurance products, which are categorized into two major groups: (1) property and casualty insurance, such as commercial property insurance, liability insurance, accidental insurance, and automobile insurance; and (2) other types of insurance, such as health insurance, life insurance, and other miscellaneous insurance. For more information, visit the company's website at http://ir.tianrx.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 risk factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.
For investor and media enquiries, please contact:
TIAN RUIXIANG Holdings Ltd
Investor Relations Department
Email: ir@tianrx.com
Wealth Financial Services LLC
Connie Kang
Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)
| TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN U.S. DOLLARS) | ||||||||
| As of October 31, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 2,383 | $ | 2,508 | ||||
| Restricted cash | 692,692 | 692,734 | ||||||
| Short-term investments | 26,797,081 | 26,179,662 | ||||||
| Accounts receivable | 18,960 | 51,202 | ||||||
| Note receivable | — | 7,500,000 | ||||||
| Interest receivable | — | 262,192 | ||||||
| Due from related party | — | 1,369 | ||||||
| Other current assets | 107,508 | 168,957 | ||||||
| Total Current Assets | 27,618,624 | 34,858,624 | ||||||
| NON-CURRENT ASSETS: | ||||||||
| Note receivable | 7,800,000 | — | ||||||
| Property and equipment, net | 6,280 | 8,688 | ||||||
| Right-of-use assets, operating leases, net | 54,870 | 143,438 | ||||||
| Other non-current assets | — | 20,078 | ||||||
| Total Non-current Assets | 7,861,150 | 172,204 | ||||||
| Total Assets | $ | 35,479,774 | $ | 35,030,828 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Taxes payable | $ | 623,825 | $ | 466,878 | ||||
| Salary payable | 726,330 | 424,987 | ||||||
| Accrued liabilities and other payables | 481,801 | 384,893 | ||||||
| Due to related parties | 1,173,510 | 126,530 | ||||||
| Operating lease liabilities | 57,402 | 90,800 | ||||||
| Total Current Liabilities | 3,062,868 | 1,494,088 | ||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Operating lease liabilities - noncurrent portion | — | 54,718 | ||||||
| Total Non-current Liabilities | — | 54,718 | ||||||
| Total Liabilities | 3,062,868 | 1,548,806 | ||||||
| EQUITY: | ||||||||
| TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||||||||
| Ordinary shares: | ||||||||
| Class A ordinary shares: | 16,874 | 12,636 | ||||||
| Class B ordinary shares: | 1,250 | 1,250 | ||||||
| Additional paid-in capital | 44,108,774 | 42,663,012 | ||||||
| Less: ordinary stock held in treasury, at cost; 0 share at October 31, 2023 and 2,000 shares at October 31, 2022 | — | — | ||||||
| Accumulated deficit | (8,303,691 | ) | (5,800,817 | ) | ||||
| Statutory reserve | 275,150 | 226,253 | ||||||
| Accumulated other comprehensive loss | (3,681,845 | ) | (3,620,712 | ) | ||||
| Total TIAN RUIXIANG Holdings Ltd shareholders' equity | 32,416,512 | 33,481,622 | ||||||
| Non-controlling interest | 394 | 400 | ||||||
| Total Equity | 32,416,906 | 33,482,022 | ||||||
| Total Liabilities and Equity | $ | 35,479,774 | $ | 35,030,828 | ||||
| TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (IN U.S. DOLLARS) | ||||||||||||
| For the Years Ended October 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| REVENUES | ||||||||||||
| Commissions | $ | 1,244,247 | $ | 1,324,655 | $ | 2,675,611 | ||||||
| Risk management services | — | 27,254 | 115,006 | |||||||||
| Total Revenues | 1,244,247 | 1,351,909 | 2,790,617 | |||||||||
| OPERATING EXPENSES | ||||||||||||
| Selling and marketing | 2,438,248 | 1,764,909 | 2,517,497 | |||||||||
| General and administrative - professional fees | 1,220,367 | 1,185,930 | 1,011,053 | |||||||||
| General and administrative - compensation and related benefits | 460,791 | 2,691,751 | 948,900 | |||||||||
| General and administrative - other | 141,167 | 654,587 | 566,971 | |||||||||
| Impairment loss | — | 123,646 | — | |||||||||
| Total Operating Expenses | 4,260,573 | 6,420,823 | 5,044,421 | |||||||||
| LOSS FROM OPERATIONS | (3,016,326 | ) | (5,068,914 | ) | (2,253,804 | ) | ||||||
| OTHER INCOME (EXPENSE) | ||||||||||||
| Interest income | 731,961 | 434,406 | 315,070 | |||||||||
| Other (expense) income | (8,278 | ) | (26,042 | ) | 18,686 | |||||||
| Total Other Income, net | 723,683 | 408,364 | 333,756 | |||||||||
| LOSS BEFORE INCOME TAXES | (2,292,643 | ) | (4,660,550 | ) | (1,920,048 | ) | ||||||
| INCOME TAXES | 161,339 | 23,639 | 24,529 | |||||||||
| NET LOSS | $ | (2,453,982 | ) | $ | (4,684,189 | ) | $ | (1,944,577 | ) | |||
| LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (5 | ) | (32 | ) | (28 | ) | ||||||
| NET LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | $ | (2,453,977 | ) | $ | (4,684,157 | ) | $ | (1,944,549 | ) | |||
| NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS: | ||||||||||||
| Basic and diluted | $ | (3.87 | ) | $ | (9.03 | ) | $ | (5.65 | ) | |||
| WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | ||||||||||||
| Basic and diluted | 633,336 | 518,655 | 344,425 | |||||||||
| COMPREHENSIVE LOSS: | ||||||||||||
| NET LOSS | $ | (2,453,982 | ) | $ | (4,684,189 | ) | $ | (1,944,577 | ) | |||
| OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||
| Unrealized foreign currency translation (loss) gain | (61,134 | ) | (3,717,478 | ) | 214,123 | |||||||
| COMPREHENSIVE LOSS | (2,515,116 | ) | (8,401,667 | ) | (1,730,454 | ) | ||||||
| LESS: COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (6 | ) | (89 | ) | (6 | ) | ||||||
| COMPREHENSIVE LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | $ | (2,515,110 | ) | $ | (8,401,578 | ) | $ | (1,730,448 | ) | |||
| TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN U.S. DOLLARS) | ||||||||||||
| For the Years Ended October 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net loss | $ | (2,453,982 | ) | $ | (4,684,189 | ) | $ | (1,944,577 | ) | |||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation expense and amortization of intangible assets | 1,631 | 22,853 | 27,447 | |||||||||
| Amortization of right-of-use assets | 78,126 | 185,421 | 227,661 | |||||||||
| Impairment loss | — | 123,646 | 696 | |||||||||
| Stock-based compensation and service expense | 1,450,000 | 2,888,787 | — | |||||||||
| Bad debt provision | 7,338 | — | — | |||||||||
| Loss on disposal of property and equipment | 848 | — | — | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 25,983 | 254,109 | 969,374 | |||||||||
| Security deposit | 6,726 | 37,853 | (43,750 | ) | ||||||||
| Interest receivable | 262,192 | (149,178 | ) | (113,014 | ) | |||||||
| Due from related party | 1,417 | (1,511 | ) | — | ||||||||
| Other assets | 91,348 | 495,668 | (74,120 | ) | ||||||||
| Taxes payable | 163,500 | 36,553 | (78,932 | ) | ||||||||
| Salary payable | 347,567 | 349,436 | — | |||||||||
| Accrued liabilities and other payables | 99,649 | 304,576 | (123,052 | ) | ||||||||
| Due to related parties | 992,277 | 126,228 | 12,025 | |||||||||
| Operating lease liabilities - related party | — | — | (29,355 | ) | ||||||||
| Operating lease liabilities | (80,316 | ) | (189,012 | ) | (194,341 | ) | ||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 994,304 | (198,760 | ) | (1,363,938 | ) | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchase of property and equipment | — | (2,346 | ) | (3,411 | ) | |||||||
| Investment in note receivable | (7,800,000 | ) | — | (7,500,000 | ) | |||||||
| Proceeds from note receivable | 7,500,000 | — | — | |||||||||
| Purchase of short-term investments | (27,779,231 | ) | (29,011,783 | ) | - | |||||||
| Proceeds from sale of short-term investments | 27,086,514 | 116,663 | - | |||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (992,717 | ) | (28,897,466 | ) | (7,503,411 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Proceeds from note payable | — | — | 75,581 | |||||||||
| Repayment of note payable | — | — | (75,581 | ) | ||||||||
| Proceeds from related parties' borrowings | 9,535 | 225,171 | 1,893,932 | |||||||||
| Repayments of related parties' borrowings | (9,818 | ) | (225,171 | ) | (2,272,145 | ) | ||||||
| Proceeds from initial public offering | — | — | 12,300,000 | |||||||||
| Disbursements for initial public offering costs | — | — | (1,489,388 | ) | ||||||||
| Proceeds from the June 2021 public offering | — | — | 24,562,500 | |||||||||
| Disbursements for the June 2021 public offering costs | — | — | (2,352,418 | ) | ||||||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (283 | ) | — | 32,642,481 | ||||||||
| EFFECT OF EXCHANGE RATE ON CASH AND RESTRICTED CASH | (1,471 | ) | (1,052,173 | ) | 145,014 | |||||||
| NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH | (167 | ) | (30,148,399 | ) | 23,920,146 | |||||||
| CASH AND RESTRICTED CASH - beginning of year | 695,242 | 30,843,641 | 6,923,495 | |||||||||
| CASH AND RESTRICTED CASH - end of year | $ | 695,075 | $ | 695,242 | $ | 30,843,641 | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||
| Cash paid for: | ||||||||||||
| Interest | $ | — | $ | 22 | $ | 725 | ||||||
| Income taxes | $ | 807 | $ | — | $ | 2,251 | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||||||
| Reissuance of treasury stock | $ | 25,000 | $ | — | $ | — | ||||||
| Payments made by related parties on the Company’s behalf | $ | 1,068,700 | $ | — | $ | 119,886 | ||||||
| RECONCILIATION OF CASH AND RESTRICTED CASH | ||||||||||||
| Cash at beginning of year | $ | 2,508 | $ | 30,024,372 | $ | 6,137,689 | ||||||
| Restricted cash at beginning of year | 692,734 | 819,269 | 785,806 | |||||||||
| Total cash and restricted cash at beginning of year | $ | 695,242 | $ | 30,843,641 | $ | 6,923,495 | ||||||
| Cash at end of year | $ | 2,383 | $ | 2,508 | $ | 30,024,372 | ||||||
| Restricted cash at end of year | 692,692 | 692,734 | 819,269 | |||||||||
| Total cash and restricted cash at end of year | $ | 695,075 | $ | 695,242 | $ | 30,843,641 | ||||||
FAQ
What was TIAN RUIXIANG Holdings 's (TIRX) revenue for the fiscal year ended October 31, 2023?
How much did TIRX reduce its net loss in fiscal year 2023?
What was the main driver of growth for TIRX in fiscal year 2023?
How did TIRX's operating expenses change in fiscal year 2023?
