Lucas GC Limited Announces 1H 2024 Financial Results: Revenue at US$83.32 million with Increases in Both Gross Margin and Net Income Margin
September 26 2024 - 5:00PM
Lucas GC Limited (NASDAQ: LGCL) (“Lucas” or the “Company”), an
artificial intelligence (the “AI”) technology-driven
Platform-as-a-Service (the “PaaS”) company whose technologies have
been applied to the human resources, insurance and wealth
management industry verticals, today announced its financial
results for 1H fiscal year of 2024.
1H 2024 Financial
Highlights
- Our revenue was RMB605.52 million (US$83.32 million) for the
six months ended June 30, 2024, compared with RMB820.07 million for
the six months ended June 30, 2023, representing a decrease of
26.16%.
- We recorded a gross margin of 33.54% for the six months ended
June 30, 2024, representing an increase of 516 bps compared with
that of the six months ended June 30, 2023.
- We recorded net income of RMB53.93 million (US$7.42 million)
for the six months ended June 30, 2024, compared with RMB53.69
million for the six months ended June 30, 2023.
- Our net income margin increased to 8.91% for the six months
ended June 30, 2024, compared with 6.55% for the six months ended
June 30, 2023.
1H 2024 Operational Highlights
- Increased active registered users by 10% to 702,060 in 1H 2024
as compared to Dec 2023.
- Obtained two patents related to core Artificial Intelligence
(AI) technology, bringing the total number of granted patents to
18.
- Signed two strategic agreements with publicly traded financial
institutions, i.e. Bank of Ningbo and Industrial Securities Co.,
Limited., to port the AI LLM technology into wealth management
vertical.
- Signed a strategic agreement with Beijing Fourth Paradigm
Technology Co., Limited to develop Artificial Intelligence training
programs.
- Won The 2024 Cberi Prize in The Most Valuable Brand for
Investment during the Asian Brand Economy Conference (ABEC).
Management Commentary
Howard Lee, Chief Executive Officer of Lucas,
said “We adopted a change of strategy in 1H 2024. We decided to
position ourselves as a technology company rather than a service
company. As a result, we started selling our technology to peers
and let them deliver the assignments themselves, rather than
compete with them. We tried to reduce our activities in delivering
the recruitment assignments directly ourselves, and instead we
focused on selling the technology and information to our peers and
clients with products that have higher margins than those of
assignment delivery services. That’s why we had significant gross
margin improvement in 1H 2024 compared to 1H 2023. The revenue
decrease was due to our change of strategy to focus on
higher-margin products, as well as the effect of one-time post
COVID recovery spike in China, making 1H 2023 a
higher-than-normal-business-run-rate comparison.”
“In order to sustain our technological leads as
a technology company, we have continued to invest significantly in
research and development. R&D expenses increased by 2.45%
compared to 1H 2023 due to continuous investments in AI-enabled
technologies including Generative Pre-trained Transformer (GPT) and
related artificial intelligence generated content (AIGC)
technologies. R&D as a percentage of revenue was 13.31% in 1H
2024 compared with 9.59% in 1H 2023.”
“We had a strong growth of our user base: our
active registered users reached 702,060 by June 2024, representing
10% growth in 1H 2024, compared to Dec 2023, setting the stage for
strong revenue growth for the future, not only within human
resource services, but in the areas such as IT outsourcing and
information services. I also expect to execute acquisitions or form
partnerships outside China that are accretive and will drive value
for shareholders in the coming months.”
About Lucas GC Limited
With 18 granted U.S. and Chinese patents and
over 74 registered software copyrights in the AI, data analytics
and blockchain technologies, Lucas GC Limited is an AI
technology-driven Platform as a Service (PaaS) company with over
702,060 agents working on its platform. Lucas’ technologies have
been applied to the human resources, insurance and wealth
management industry verticals. For more information, please visit:
https://www.lucasgc.com/.
Forward-Looking Statements
Statements in this press release about future
expectations, plans, and prospects, as well as any other statements
regarding matters that are not historical facts, may constitute
“forward-looking statements.” The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “will,”
“would” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including the
uncertainties related to market conditions. Any forward-looking
statements contained in this press release speak only as of the
date hereof, and Lucas GC Limited specifically disclaims any
obligation to update any forward-looking statement, whether as a
result of new information, future events, or otherwise.
For Investor Inquiries and Media
Contact:https://www.lucasgc.com/ir@lucasgc.comT: 818-741-0923
|
LUCAS GC LIMITEDUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS(All amounts in thousands, except for share
and per share data, or otherwise noted) |
|
|
|
As of December 31, |
|
As of June 30, |
|
2023 |
|
2024 |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
(Unaudited) |
ASSETS |
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
30,123 |
|
|
51,513 |
|
|
7,088 |
|
Restricted cash |
|
100 |
|
|
- |
|
|
- |
|
Accounts receivable, net |
|
28,144 |
|
|
46,448 |
|
|
6,391 |
|
Advance to suppliers, net |
|
164,802 |
|
|
223,004 |
|
|
30,686 |
|
Deferred offering costs |
|
6,541 |
|
|
706 |
|
|
97 |
|
Prepaid expenses and other
current assets |
|
1,626 |
|
|
1,616 |
|
|
222 |
|
Total current
assets |
|
231,336 |
|
|
323,287 |
|
|
44,484 |
|
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
Software and equipment,
net |
|
48,299 |
|
|
76,388 |
|
|
10,511 |
|
Operating lease right-of-use
assets, net |
|
84 |
|
|
797 |
|
|
110 |
|
Deferred tax assets |
|
12,103 |
|
|
12,897 |
|
|
1,775 |
|
Total non-current
assets |
|
60,486 |
|
|
90,082 |
|
|
12,396 |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
291,822 |
|
|
413,369 |
|
|
56,880 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
Short-term borrowings |
|
39,381 |
|
|
57,829 |
|
|
7,958 |
|
Accounts payable |
|
35,217 |
|
|
51,997 |
|
|
7,155 |
|
Contract liabilities |
|
13,552 |
|
|
17,203 |
|
|
2,367 |
|
Income tax payable |
|
131 |
|
|
131 |
|
|
18 |
|
Amounts due to related
parties |
|
3,097 |
|
|
2,120 |
|
|
292 |
|
Operating lease liabilities,
current |
|
86 |
|
|
449 |
|
|
62 |
|
Accrued expenses and other
current liabilities |
|
3,766 |
|
|
3,580 |
|
|
490 |
|
Total current
liabilities |
|
95,230 |
|
|
133,309 |
|
|
18,342 |
|
|
|
|
|
|
|
|
|
Operating lease liabilities,
non-current |
|
- |
|
|
401 |
|
|
55 |
|
Total non-current
liability |
|
- |
|
|
401 |
|
|
55 |
|
TOTAL
LIABILITIES |
|
95,230 |
|
|
133,710 |
|
|
18,397 |
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
Ordinary shares (US$0.000005
par value; 10,000,000,000 and 10,000,000,000 shares authorized as
of December 31, 2023 and June 30, 2024; 78,063,300 and 78,063,300
shares issued and outstanding as of December 31, 2023 and June 30,
2024, respectively) |
|
3 |
|
|
3 |
|
|
- |
|
Subscription receivables |
|
(3 |
) |
|
(3 |
) |
|
- |
|
Additional paid-in
capital |
|
113,554 |
|
|
142,255 |
|
|
19,575 |
|
Statutory reserve |
|
19,559 |
|
|
23,758 |
|
|
3,269 |
|
Retained earnings |
|
61,041 |
|
|
110,372 |
|
|
15,188 |
|
Accumulated other
comprehensive (loss)/income |
|
(11 |
) |
|
427 |
|
|
59 |
|
Total Lucas GC Limited
shareholders’ equity |
|
194,143 |
|
|
276,812 |
|
|
38,091 |
|
Non-controlling interests |
|
2,449 |
|
|
2,847 |
|
|
392 |
|
Total shareholders’
equity |
|
196,592 |
|
|
279,659 |
|
|
38,483 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
291,822 |
|
|
413,369 |
|
|
56,880 |
|
|
|
|
|
|
|
|
|
|
|
LUCAS GC LIMITEDUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME(All amounts
in thousands, except for share and per share data, or otherwise
noted) |
|
|
|
For the six months ended June 30, |
|
|
2023 |
|
2024 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
(Unaudited) |
|
(Unaudited) |
Revenues |
|
|
|
|
|
|
Recruitment service |
|
395,360 |
|
|
155,812 |
|
|
21,440 |
|
Outsourcing service |
|
366,550 |
|
|
418,456 |
|
|
57,581 |
|
Others |
|
58,162 |
|
|
31,250 |
|
|
4,300 |
|
Total
revenues |
|
820,072 |
|
|
605,518 |
|
|
83,321 |
|
Cost of
revenues |
|
(587,382 |
) |
|
(402,438 |
) |
|
(55,377 |
) |
Gross
profit |
|
232,690 |
|
|
203,080 |
|
|
27,944 |
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
Selling and marketing
expenses |
|
(41,678 |
) |
|
(39,000 |
) |
|
(5,367 |
) |
General and administrative
expenses |
|
(61,389 |
) |
|
(30,298 |
) |
|
(4,169 |
) |
Research and development
expenses |
|
(78,675 |
) |
|
(80,612 |
) |
|
(11,093 |
) |
Total operating
expenses |
|
(181,742 |
) |
|
(149,910 |
) |
|
(20,629 |
) |
|
|
|
|
|
|
|
Income from
operations |
|
50,948 |
|
|
53,170 |
|
|
7,315 |
|
|
|
|
|
|
|
|
Other/(expenses)
income |
|
|
|
|
|
|
Financial expenses, net |
|
(273 |
) |
|
(754 |
) |
|
(104 |
) |
Other income, net |
|
2,535 |
|
|
718 |
|
|
99 |
|
Total other
income/(expenses), net |
|
2,262 |
|
|
(36 |
) |
|
(5 |
) |
|
|
|
|
|
|
|
Income before income
tax benefit |
|
53,210 |
|
|
53,134 |
|
|
7,310 |
|
Income tax benefit |
|
482 |
|
|
794 |
|
|
109 |
|
Net
income |
|
53,692 |
|
|
53,928 |
|
|
7,419 |
|
Less: net income attributable
to non-controlling interests |
|
(397 |
) |
|
(398 |
) |
|
(55 |
) |
Net income
attributable to Lucas GC Limited |
|
53,295 |
|
|
53,530 |
|
|
7,364 |
|
|
|
|
|
|
|
|
Net
income |
|
53,692 |
|
|
53,928 |
|
|
7,419 |
|
Other comprehensive
income: |
|
|
|
|
|
|
Foreign currency translation
difference, net of tax of nil |
|
6 |
|
|
438 |
|
|
60 |
|
Total comprehensive
income |
|
53,698 |
|
|
54,366 |
|
|
7,479 |
|
Less: total comprehensive
income attributable to non-controlling interests |
|
(397 |
) |
|
(398 |
) |
|
(55 |
) |
Comprehensive income
attributable to Lucas GC Limited |
|
53,301 |
|
|
53,968 |
|
|
7,424 |
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
Basic |
|
0.68 |
|
|
0.69 |
|
|
0.09 |
|
Diluted |
|
0.68 |
|
|
0.69 |
|
|
0.09 |
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in calculating basic and diluted loss per
share: |
|
|
|
|
|
|
Basic |
|
78,063,300 |
|
|
78,063,300 |
|
|
78,063,300 |
|
Diluted |
|
78,063,300 |
|
|
78,063,300 |
|
|
78,063,300 |
|
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