Recently, Jianzhi Education announced that Xiaolei Ni has resigned from the position of Chief Financial Officer due to personal reasons and appointed Wang Huichao as the new CFO of the company, effective from October 25, 2023.
The announcement shows that Wang Huichao graduated from Chongqing Jiaotong University with a major in Accounting in 2003. Before joining Jianzhi Education, he worked at Fujian Rongrongji Software Co., Ltd., Daxin Certified Public Accountants Co., Ltd., and Ruihua Certified Public Accountants as an accountant and project manager. In April 2015, Wang Huichao joined Beijing Sentu Education Technology Co., Ltd. as the CFO and has been serving as the CFO of Jianzhi Century Technology (Beijing) Co., Ltd. since August 2018.
Public information shows that Jianzhi Education is an online higher education institution vocational training service provider founded in 2011. It was listed on the New Third Board in 2016 and delisted a year later. Since October 2018, Jian Zhi Education has submitted four failed prospectuses to the Hong Kong Stock Exchange. In July 2021, Jianzhi Education attempted to go public in the United States through a prospectus with the SEC.
On August 26, 2022, Jianzhi Education successfully landed on NASDAQ. On the first day of issuance, the company's stock price rose as high as $186.01, a 37 fold increase from the issuance price, triggering circuit breakers multiple times. Although the stock price fell slightly afterwards, Jian Zhi Education ultimately closed at $18.75, an increase of 275%. At that time, the astonishing increase made Jianzhi Education known as a "monster stock", but the upward trend did not continue. The company's stock price continued to decline for eight trading days and fell below the issuance price for the first time on September 6th. Afterwards, there was no significant increase in the stock price of Jianzhi Education.
Starting from the end of 2022, the stock price of Jianzhi Education has fluctuated frequently around the $1 red line. By September this year, Jianzhi Education announced that it had received a low price delisting warning from NASDAQ. However, 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. Afterwards, the company failed to take effective measures to boost its stock price and remained trapped on the edge of the $1 red line.
In terms of performance, the situation of Jianzhi Education is also concerning. In May of this year, Jianzhi Education received a notice from the NASDAQ Market Listing Qualification Department that it failed to submit its annual report as of December 31, 2022 in a timely manner, and therefore did not comply with the NASDAQ listing rules. It was not until the end of September this year that the 2022 annual report of Jianzhi Education arrived late. According to the financial report, the company's total revenue in 2022 was 506 million yuan, a year-on-year increase of 6.9%, and recorded a net loss of 197 million yuan, which turned from profit to loss compared to a profit of 52.93 million yuan in the same period last year.
Regarding performance changes, the company mentioned in its financial report that the revenue from educational content services and other services decreased by 25% year-on-year during the period. This is due to market demands for the company to continuously update existing content and develop new content. However, the company reduced its investment in this sector during the period and did not update courses or provide new attractive content in a timely manner, resulting in a significant decline in user subscriptions. However, in 2022, the company acquired a cloud based customer who contributed 198 million yuan in revenue in IT procurement and equipment assembly, leading to a significant year-on-year increase in revenue from IT related solutions. However, it is precisely because of this that the company incurred significant equipment procurement costs, which worsened its gross profit situation.
During the reporting period, the operating expenses of Jianzhi Education increased by 283% year-on-year to 203 million yuan, of which general and administrative expenses were 179 million yuan, compared to only 19.5 million yuan in the same period last year. Sales and marketing expenses, as well as research and development expenses, were 7.1 million yuan and 15.6 million yuan respectively, both showing a year-on-year decrease.
In 2022, Jianzhi Education's operating activities generated a net cash inflow of 94.22 million yuan, financing activities resulted in a large cash outflow of 218 million yuan, and financing activities generated a net cash inflow of 127 million yuan. As of December 31, 2022, the cash and cash equivalents of Jianzhi Education amounted to 65.06 million yuan. At the same time, the company's current ratio was 0.97 and its asset liability ratio was 50%, indicating significant financial pressure.
Some viewpoints point out that, Jianzhi Education is a typical light asset company that mainly profits from producing content, but its course competitiveness is weak, marketing costs are high, and profits are also declining. At the same time, it faces great challenges in seeking to transform into a C-end company. The current competition for traffic has reached a white hot stage. How to differentiate its own content from others, how to make C-end users willing to use the company's services, and how to achieve drainage even when cash flow is tight, are all aspects It is the problem it needs to face. "
As of November 20, 2023, Jianzhi Education reported a revenue of $0.76, an increase of 4.25%, with a total market value of $46.02 million.