Catalist-listed Zixin Group Holdings 42W reverses into black for the FY2024 ended Mar 31, with a net profit of RMB13.4 million ($2.55 million).
The manufacturer of sweet potato food products attributes this to the increase in volume of fresh and processed sweet potato products produced and sold, due to improved economies of scale, maintaining average selling prices for its high-quality fresh and processed sweet potato products, and China’s gradual economic recovery post-Covid-19.
The group revenue saw a 45% y-o-y increase for the full year of RMB318.4 million, up from RMB219.6 million in the same period a year before.
Zixin’s gross profit for the FY2024 came in at RMB101.9 million, and gross profit margin increased to 32%.
The company’s interest income decreased by 22.1% y-o-y to RMB0.7 million in FY2024, due to lower interest income on lower average cash and bank balances with the banks.
Its other income increased 54.1% y-o-y to RMB1 million for the full year, due to sales of excess in-house cultivated sweet potato seedlings and subsidies received from e-commerce platforms.
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Marketing and distribution costs increased 11.7% y-o-y to RMB34.4 million due to higher delivery charges, publicity expenses, and operating expenses, which was partially offset by lower advertisement expenses.
For the full year, administrative expenses and other operating expenses also increased 19% y-o-y and 97.9% y-o-y to RMB42.5 million and RMB0.4 million respectively.
Elsewhere, losses increased to 53.6% y-o-y to RMB2.5 million for the full year due to increase in property, plant and equipment written-off and donations made in FY2024.
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The group maintained a net cash position of RMB97.7 million and recorded positive working capital of RMB183.1 million as at Mar 31.
The company is planning to raise funds for expansions into high-tech manufacturing, enhance the group’s research capabilities, and increase the size of contracted farmland for sweet potato cultivation and supplies of fresh sweet potatoes in China, as well as working capital for the group’s activities and expansion of business and operations in Singapore.
Funds would be raised through the rights-cum-warrants issue of up to 144,481,810 rights shares at the issue price of 1.65 cents per rights share, with up to 577,927,240 warrants.
Zixin expects to raise net proceeds of up to $2.1 million from the rights issue and additional gross proceeds of $26.0 million if the warrants are fully exercised.
As at 2.49pm, shares in Zixin Group Holdings are trading 0.1 cent lower of 5.56% down at 1.7 cents.
