SHENZHEN,China,Dec. 17,2024 -- ZJK Industrial Co.,Ltd. (Nasdaq: ZJK) ("ZJK Industrial","ZJK",or the "Company"),a high-tech enterprise specialized in the manufacturing and sale of precision fasteners,structural parts and other precision metal parts products for new energy vehicles and intelligent electronic devices,today announced its unaudited financial results for the first six months of fiscal year 2024 endedJune 30,2024.
First Six Months of Fiscal Year 2024 Financial Highlights
Revenue increased by 72.81%,to US$16.23 million for the six months ended June 30,2024,from US$9.39 million for the same period of last year.
Gross profit increased by 134.31%,to US$7.56 million for the six months ended June 30,from US$3.23 millionfor the same period of last year.
Income from operations increased by 149.33%,to US$4.91 million for the six months endedJune 30,fromUS$1.97 millionfor the same period of last year.
Net income increased by 106.98%,to US$5.43 million for the six months endedJune 30,fromUS$2.62 millionfor the same period of last year.
Basic and diluted earnings per share wasUS$0.09for the six months endedJune 30,increased fromUS$0.04for the same period of last year.
Mr.Ning Ding,Chief Executive Officer and Chairman,commented,"We are thrilled to report outstanding performance in the first half of fiscal year 2024,with revenues surging 72.81% to US$16.23 million. This growth reflects our strategic efforts to expand our market presence and meet the high demand for our product offerings amidst the rapidly evolving technology revolution.
Our remarkable growth has been driven primarily by our unwavering commitment to innovation,advancements in production technology,stringent cost control measures,and adaptive sales and marketing strategies. These efforts contributed to an increase in our average unit sales price,resulting in gross profit rising 134.31% to US$7.6 million for the period,while gross profit margin improved significantly from 34.34% to 46.57%.
To meet surging demand,we expanded our production capacity by leasing three additional factories during this period. Simultaneously,we enhanced sales and marketing initiatives to drive sales and maintained investment in research and development,even as mature product models required less material consumption.
Looking ahead,we remain optimistic and confident in our sustainable growth potential. Our steadfast focus on technology innovation and specialized advanced solutions will continue to distinguish us from our competitors. By deeply cultivating our expertise in sub-assembly and assembly manufacturing,we believe we are poised to deliver long-term value to our shareholders."
First Six Months of Fiscal Year 2024 Financial Results
Revenue
Revenue increased by 72.81%,from US$9.39 million for the same period of last year. Revenues generated from customers in China accounted for 97.27% and 86.50% of the total revenue for the six months ended June 30,2023,and 2024,respectively.
Revenue from sales of hardware products increased by 72.81%,from US$9.39 million for the same period of last year. The increase was mainly due to (i) the total sales volume of the Company's products for the six months ended June 30,2024 increased by 44.55% compared to that for the same period of last year and (ii) the average unit sales price of the Company's products for the six months ended June 30,2024 increased by 21.91% compared to that for the same period of last year as the Company reduced the discount provided to one of its major customers with stable cooperation.
For turned parts,the average unit sales price increased by 28.25% and the sales volume increased by 39.73% for the six months ended June 30,compared to those for the same period of last year,resulting in an increase of US$3.29 million in revenue. For screws,the average unit sales price of screws increased by 8.10% and the sales volume increased by 45.98% for the six months ended June 30,resulting in a total increase of US$2.51 million in revenue. For stamping parts,the sales volume increased by 12.84% for the six months ended June 30,compared to that for the same period of last year,resulting in a total increase of US$0.79 million in revenue.
Cost of Revenue
Cost of revenues increased by 40.64%,to US$8.67 million for the six months ended June 30,from US$6.17 million for the same period of last year,which was in line with the increase of sales volume of self-production products and products from third party manufacturers,and the total sales volume increased by 44.55% for the six months ended June 30,2024 compared to that for the same period of last year.
Gross Profit and Gross Profit Margin
Gross profit increased by 134.31%,from US$3.23 million for the same period of last year. The gross profit increased mainly due to the increased sales volume and the increased average unit sales price of turned parts and stamping parts.
The gross profit margin increased by 12.23%,to 46.57% for the six months ended June 30,from 34.34% for the same period of last year,mainly due to (i) the average unit sales price of the Company's products increased as the Company reduced the discount provided to one of its major customers with stable cooperation; (ii) the average unit cost decreased resulting from the improvement of the Company's production technology and the discount provided by its suppliers.
General and administrative expenses
The general and administrative expenses increased by 245.36%,to US$1.22 million for the six months ended June 30,from US$0.35 million for the same period of last year,which was primarily attributable to (i) an increase of US$0.58 million in professional service fees due to an increase of accounting advisory fee,(ii) an increase of US$0.04 million in salaries and benefits for administrative personnel due to an increase of employee headcounts resulting from the Company's business growth,(iii) an increase of US$0.04 million in rental expenses as the Company entered into a lease agreement for a factory in Vietnam in April 2023 and two lease agreements for factories in Qingyuan,China in June 2024 to expand its production scale.
Selling and marketing expenses
The selling and marketing expenses increased by 123.17%,to US$1.18 million for the six months ended June 30,from US$0.53 million for the same period of last year,which was primarily due to an increase of US$0.38 million in sales commission and an increase of US$0.24 million in freight for selling activities which were both attribute to the increase of the Company's revenue for the six months ended June 30,2024.
Research and development costs
The research and development costs decreased by 35.69%,from US$0.37 million for the six months ended June 30,to US$0.24 million for the same period of last year,which was primarily attributable to a decrease of US$0.13 million in material consumption as the types of products the Company developed in 2024 have a less material consumption than what the Company's consumed for the same period of last year.
Income from operations
Income from operations increased by 149.33%,to US$4.91 million for the six months ended June 30,from US$1.97 million for the same period of last year.
Other income,net
Other income,net increased by 31.78%,to US$1.26 million for the six months ended June 30,from US$0.95 million for the same period of last year,which was primarily attributable to (i) an increase in investment income of US$0.19 million generated from long-term equity investment in PSM-ZJK Fasteners (Shenzhen) Co.,Ltd,(ii) a decrease of US$0.06 million in interest expenses due to the decrease of commercial vehicle mortgage loan for the six months ended June 30,2024.
Net Income
Net income increased by 106.98% to US$5.43 million for the six months ended June 30,from US$2.62 million for the same period of last year.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share wasUS$0.09for the six months endedJune 30,compared toUS$0.04for the same period of last year.
Financial Condition
As of June 30,the Company had cash of US$8.56 million and restricted cash of US$1.70 million,compared to US$2.83 million and US$1.08 million as of December 31,respectively. Net cash provided by operating activities was US$7.73 million for the six months ended June 30,compared to US$3.93 million for the same period of last year.
Net cash used in investing activities was US$0.32 million for the six months ended June 30,compared to US$0.04 million for the same period of last year.
Net cash used in financing activities was US$0.47 million for the six months ended June 30,compared to US$0.51 million for the same period of last year.
Recent Development
OnOctober 1,the Company completed its initial public offering (the "Offering") of 1,250,000 ordinary shares at a public price ofUS$5.00per share. OnOctober 30,the underwriters of the Offering partially exercised their over-allotment option to purchase an additional 131,249 ordinary shares of the Company at the public offering price ofUS$5.00per share. The gross proceeds wereUS$6.91 millionfrom the Offering,before deducting underwriting discounts and commissions,and other expenses. The Company's ordinary shares began trading on the Nasdaq Capital Market onSeptember 30,under the ticker symbol "ZJK."
About ZJK Industrial Co.,Ltd.
ZJK Industrial Co.,Ltd. is a high-tech enterprise specializing in the manufacturing and sale of precision fasteners,structural parts and other precision metal parts applied in a variety of industries,including intelligent electronic equipment,new energy vehicles,aerospace,energy storage systems,medical and liquid cooling systems used in artificial intelligence supercomputers. With thirteen-year involvement in the precision metal parts manufacturing industry,the Company maintains a skilled professional team,a series of highly automated and precision manufacturing equipment,stable and strong customer group,and complete quality management systems. ZJK mainly offers standard screws,precision screws and nuts,high-strength bolts and nuts,turning and Computer Numerical Control (CNC) machining parts,Surface Mounting Technology (SMT) for miniature parts packaging,and technology service for research and development from a professional engineering team. For more information,please visit the Company's website athttps://ir.zjk-industrial.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 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 find many (but not all) of these statements by the use of words such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "likely to" or other similar expressions in this announcement. 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 U.S. Securities and Exchange Commission.
For more information,please contact:
ZJK Industrial Co.,Ltd.
Phone: +86-755-28341175
Email: [email protected]
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: [email protected]
ZJKIndustrial Co.,Ltd.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In U.S. dollars,except for numbers of shares data)
As of
December 31,2023
June 30,2024
(Unaudited)
ASSETS
Current assets
Cash
2,826,725
8,559,892
Restricted cash
1,075,047
1,704,278
Accounts receivable,net
10,268,807
6,982,123
Accounts receivable-due from a related party
8,816,184
5,295,551
Inventories,net
4,765,742
6,721,310
Prepaid expenses and other current assets,net
503,914
644,290
Other receivables-due from related parties
277,786
309,243
Deferred initial public offering ("IPO") costs,current
-
697,613
Total current assets
28,534,205
30,914,300
Non-current assets
Property,plant and equipment,net
5,596,699
5,758,823
Operating lease right-of-use assets
522,148
1,200,188
Finance lease right-of-use assets
336,257
168,463
Construction in progress
41,200
57,167
Long-term investment
2,517,538
3,395
Deferred tax assets,net
165,969
289,959
Deferred IPO costs,non-current
566,417
-
Total non-current assets
9,746,228
11,033,995
TOTAL ASSETS
38,280,433
41,948,295
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term bank borrowings
37,184
97,699
Accounts payable
11,569,828
10,454,466
Income tax payable
1,035,152
1,367,684
Accrued expenses and other current liabilities
841,402
712,785
Other payables-due to related parties
1,867,459
1,537,393
Operating lease liability,current
157,980
328,383
Finance lease liability,current
230,460
92,947
Other long-term debt,current
9,379
-
Total current liabilities
15,748,844
14,591,357
Non-current liabilities
Operating lease liability,non-current
290,684
790,147
Other long-term debt,non-current
20,321
-
Deferred tax liabilities
518,156
418,331
Total non-current liabilities
829,161
1,208,478
TOTAL LIABILITIES
16,578,005
15,799,835
Commitments and contingencies (Note 14)
Shareholders' equity
Ordinary shares,$0.000016666667 par value,3,000,000 shares
authorized,60,000 and 60,000 shares issued and
outstanding as of December 31,2023 and June 30,
respectively*
1,000
1,000
Additional paid-in capital
1,792,559
1,559
Statutory surplus reserves
2,283,180
2,180
Retained earnings
18,644,082
24,070,993
Accumulated other comprehensive loss
(1,016,563)
(1,999,098)
Total ZJK Industrial Co.,Ltd. shareholders' equity
21,258
26,148,634
Non-controlling interests
(1,830)
(174)
Total shareholders' equity
21,702,428
26,460
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
38,295
* The shares and per share information are presented on a retroactive basis to reflect the reorganization completed on March 28,2023 (Note 1) and the two share splits that occurred on June 19,2023 and June 6,respectively (Note 15).
ZJKIndustrial Co.,Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
(In U.S. dollars,except for the number of shares data)
For the six months ended June 30,
2023
2024
(Unaudited)
Revenues
Third-party sales
4,211,947
8,508,295
Related-party sales
5,179,789
7,659
Total revenues
9,391,736
16,229,954
Cost of revenues
Third-party sales
(1,755,183)
(3,553,017)
Related-party sales
(4,411,119)
(5,119,335)
Total cost of revenues
(6,166,302)
(8,672,352)
Gross profit
3,225,434
7,557,602
Operating expenses
Selling and marketing expenses
(527,810)
(1,177,918)
General and administrative expenses
(354,610)
(1,224,664)
Research and development costs
(371,298)
(238,779)
Gain from disposal of property,plant and equipment
80
-
Total operating expenses
(1,253,638)
(2,641,361)
Income from operations
1,971,796
4,916,241
Other income,net
Interest expenses
(73,591)
(12,474)
Interest income
7,764
35,678
Share of profits from equity method investment
917,045
1,107,771
Currency exchange (loss) gain
(7,457)
45,534
Other income,net
110,200
80,639
Total other income,net
953,961
1,257,148
Income before income tax provision
2,925,757
6,173,389
Income tax provision
(303,021)
(744,853)
Net income
2,622,736
5,428,536
Less: net income attributable to non-controlling interests
1,470
1,625
Net income attributable to ZJK Industrial Co.,Ltd.'s
shareholders
2,621,266
5,426,911
Other comprehensive (loss) income
Foreign currency translation adjustment attributable to parent
company
(808,054)
(982,535)
Foreign currency translation adjustment attributable to non-
controlling interest
(27)
31
Total comprehensive income
1,814,655
4,446,032
Comprehensive income attributable to non-controlling interests
1,443
1,656
Comprehensive income attributable to ZJK Industrial Co.,Ltd.'s
shareholders
1,813,212
4,444,376
Earnings per share
Basic and Diluted*
0.04
0.09
Weighted average shares used in calculating earnings per
share
Basic and Diluted*
60,000
60,000
* The shares and per share information are presented on a retroactive basis to reflect the reorganization completed on March 28,Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars,
2023
2024
(Unaudited)
Cash flows from operating activities:
Net income
2,736
5,536
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for credit loss
-
8,575
Depreciation of property,plant and equipment
244,618
274,016
Amortization of operating lease right-of-use assets
118,733
158,590
Amortization of finance lease right-of-use assets
122,851
161,212
Interest expense of finance lease liabilities
-
3,344
Gain from the disposal of property,plant and equipment
(80)
-
Provision for inventories
123,713
134,294
Share of profits from equity method investment
(917,045)
(1,771)
Provisions for deferred income tax
81,179
(218,239)
Changes in operating assets and liabilities:
Accounts receivable
4,171,981
3,063,777
Accounts receivable-due from related parties
3,161,302
3,341,677
Inventories
(396,437)
(2,214,518)
Prepaid expenses and other current assets
(220,824)
(153,075)
Other receivables-due from related parties
(58,909)
(6,248)
Accounts payable
(4,471,736)
(1,688)
Income tax payable
(601,204)
358,940
Accrued expenses and other current liabilities
(263,641)
(62,010)
Other payables-due to related parties
334,138
(67,392)
Operating lease liability
(122,221)
(177,538)
Net cash provided by operating activities
3,929,154
7,725,482
Cash flows from investing activities:
Purchase of property,plant and equipment
(36,378)
(221,552)
Purchase of construction in progress
-
(65,066)
Loan to a related party
-
(230,710)
Collection of loan to a related party
-
198,832
Net cash used in investing activities
(36,378)
(318,496)
Cash flows from financing activities:
Proceeds from short-term bank borrowings
43,035
69,300
Repayments of short-term bank borrowings
-
(7,484)
Repayments of long-term debts
(235,260)
(29,226)
Deferred IPO costs
(112,389)
(145,279)
Repayments of financing lease liabilities
(200,524)
(136,508)
Repayments of loan from related parties
-
(221,760)
Net cash used in financing activities
(505,138)
(470,957)
Effect of exchange rate changes
(204,947)
(573,631)
Net change in cash and restricted cash
3,182,691
6,362,398
Cash and restricted cashat the beginning of period
1,516,314
3,901,772
Cash and restricted cashat the end of period
4,699,005
10,264,170
Supplemental disclosure of cash flow information:
Income tax paid
155,321
605,294
Interest expenses paid
14,387
8,140
Supplemental disclosures of non-cash activities:
Obtaining finance lease right-of-use assets in exchange for finance lease
liabilities
465,511
-
Obtaining operating right-of-use assets in exchange for operating lease
liabilities
-
862,655
Acquiring property,plant and equipment through accounts payable
-
345,535
Property,plant and equipment transferred from construction in progress
22,622
-
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
