Jianzhi Education recently released its financial report as of June 30, 2023. In the first half of the year, Jianzhi Education's net income was 281 million yuan, a year-on-year increase of 7.8%.
The net loss was 93.6 million yuan, compared to 2.9 million yuan in the same period last year, with a significant increase of 31 times year-on-year.
Education content service revenue decreased by 72.9%
In the first half of 2023, Jianzhi Education's net income was 280.6 million yuan, a year-on-year increase of 7.8%. Among them, the net income from educational content services and other services was 28.5 million yuan, compared to 105.3 million yuan in the same period last year, a significant year-on-year decrease of 72.9%. Regarding this, Jianzhi Education stated that it is mainly due to a decrease in subscriptions from end customers, as it adopted a conservative strategy in the second half of 2022. It indicates that the education content service business requires continuous capital expenditure to maintain the updating of existing content and the development of new education content to meet the latest market trends, which puts the company at potential risk of outdated education content before it becomes profitable. Therefore, the company has decided to adopt a conservative strategy and reduce investment in educational content services.
The net revenue of IT related solution services was 252.1 million yuan, compared to 155 million yuan in the first half of 2022, a year-on-year increase of 62.6%. The main reason for the growth is that in 2022, Jianzhi Education completed an acquisition, which increased revenue from IT related solution services. Among them, the revenue from IT equipment procurement and assembly increased by 71.2 million yuan, and the revenue from customized IT system service design and development increased by 26.6 million yuan.
In terms of expenses, the sales and marketing expenses in the first half of 2023 were 3.9 million yuan, a slight decrease of 200000 yuan year-on-year, mainly due to a decrease in salary and welfare expenses. General and administrative expenses amounted to 9.6 million yuan, an increase of 500000 yuan year-on-year, mainly due to an increase in bad debt reserves. The R&D expenses were 4.4 million yuan, compared to 8.1 million yuan in the same period last year, mainly due to a decrease in expenses for outsourced research and development projects.
In addition, the impairment of intangible assets increased from 12.7 million yuan in the first half of 2022 to 97.3 million yuan. The main reason is the cancellation of orders for customized training course products developed for multiple overseas clients. In the first half of 2023, due to the adjustment and transformation of overseas customer business, these course product orders were permanently cancelled. Therefore, the company expects that these customized development course products will no longer generate consistent revenue in the foreseeable future.
In terms of profit, the gross profit decreased from 40 million yuan in the first half of 2022 to 23.9 million yuan in the first half of 2023. The gross profit margin has decreased from 15.4% in the first half of 2022 to 8.5% in the first half of 2023. The main reason for the decline is that the gross profit margin of IT related solution services decreased in the first half of 2023, mainly due to the company completing more procurement and assembly equipment projects, resulting in significant equipment procurement costs and relatively low gross profit margins. In the first half of 2023, revenue from educational content services decreased, leading to a decrease in gross profit margin.
In the first half of 2023, the net loss was 93.6 million yuan, and in the first half of 2022, the net loss was 2.9 million yuan, a significant increase of 31 times year-on-year.
The stock price has been below $1 for four consecutive months
For the semi annual performance, the CEO of Jianzhi Education stated that the company's semi annual performance showed a positive increase in net income, indicating its ability to seize market opportunities. Facing challenges in educational content services, resulting in a decrease in net income.
Recognizing the potential risk of educational content becoming outdated before generating profits, we have adopted a conservative strategy and reduced investment in this area. Although this has affected our revenue, we believe it is a cautious decision that can mitigate future risks. Looking ahead, the focus will be on optimizing the gross profit margin of our successful IT related solution service departments. We remain committed to continuous cost management to And utilize market opportunities to maintain profitability
After the financial report was released, Jianzhi Education's stock price closed at $0.73, down 5.42%, with a market value of only $44.5 million. From early August to four months ago, the stock price of Jianzhi Education has never returned to above $1.
In September of this year, Jianzhi Education announced that it had received a low price delisting warning from NASDAQ. The company stated that the NASDAQ notification letter would not have an impact on its business operations and that it would take all reasonable measures to restore compliance. Since then, the company's stock price has never returned to above $1. In October of this year, it even hit a new low of 0.5 US dollars since its listing.