Lucas GC Limited Announces 1H 2024 Financial Results: Revenue at US$83.32 million with Increases in Both Gross Margin and Net Income Margin

  • by

NEW YORK, Sept. 26, 2024 (GLOBE NEWSWIRE) — 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.com
T: 818-741-0923

 LUCAS GC LIMITED
UNAUDITED 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 LIMITED
UNAUDITED 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 
 

Leave a Reply

Your email address will not be published.