XIAMEN,
China, Nov. 7, 2023 /PRNewswire/ -- Hitek Global
Inc. (Nasdaq: HKIT) (the "Company"), a China-based information technology consulting
and solutions service provider, today announced its unaudited
financial results for the six months ended June 30, 2023.
Ms. Xiaoyang Huang, Chief
Executive Officer and Director of Hitek Global Inc. commented, "We
are proud to share our robust financial performance for the first
half of fiscal year 2023, which underscores another six months of
growth and profitability. At the beginning of 2023, China saw the COVID-19 pandamic impact
receding, paving the way for a market revival. Amidst these
positive changes, we stood strong, adapted to the evolving market
landscape, and demonstrated remarkable resilience. Our revenues
witnessed a steady rise of 3.1% from the same period of last year,
which is a testament to the hard work and dedication of our team.
In light of this improved environment and the wealth of
opportunities it presents, we believe the time is ripe for
expansion. We plan to work diligently to diversify our business
into new areas, particularly in supply chain finance and Software
as a Service (SaaS). We believe these strategic moves will enrich
our business portfolio and position us for enduring success in the
ever-evolving market landscape."
First Half 2023 Financial Highlights
- Revenue was $2.95 million for the
six months ended June 30, 2023,
increased by 3.1% from $2.86 million
for the same period of last year.
- Gross profit was $1.50 million
for the six months ended June 30,
2023, compared to $1.84
million for the same period of last year.
- Gross margin was 50.9% for the six months ended June 30, 2023, compared to 64.4% for the same
period of last year.
- Net income was $0.62 million for
the six months ended June 30, 2023,
compared to $0.64 million for the
same period of last year.
- Basic and diluted earnings per share was $0.05 for the six months ended June 30, 2023, compared to $0.06 for the same period of last year.
First Half 2023 Financial Results
Revenue
Total revenues were $2.95 million
for the six months ended June 30,
2023, increased by 3.1% from $2.86
million for the same period of last year. The overall
increase in revenue was mainly resulted from the increase of
hardware sales.
- Revenue generated from hardware sales was $1.31 million for the six months ended
June 30, 2023, increased by 64.3%
from $0.80 million for the same
period of last year. The increase was mainly from large customer
sales.
- Revenue generated from software sales was $0.78 million for the six months ended
June 30, 2023, decreased by 29.5%
from $1.10 million for the same
period of last year. The decrease was mainly due to decrease of
software sales to large customers.
- Revenue generated from tax devices and services was
$0.86 million for the six months
ended June 30, 2023, decreased by
10.5% from $0.96 million for the same
period of last year. The decrease was due to the new policies
carried from January 2021 that the
new taxpayers in Xiamen could get free tax Ukeys from the Tax
authorization.
Gross Profit and Gross Margin
Gross profit was $1.50 million for
the six months ended June 30, 2023,
compared to $1.84 million for the
same period of last year. Gross margin was 50.9% for the six months
ended June 30, 2023, compared to
64.4% for the same period of last year. The decrease was mainly due
to the decrease of software sales with high gross profit
margin.
Operating Expenses
Operating expenses were $0.99
million for the six months ended June
30, 2023, decreased by 8.0% from $1.08 million for the same period of last
year.
- Selling expenses were $325 for
the six months ended June 30, 2023,
decreased by 99.9% from $291,272 for
the same period of last year. The decrease was mainly because of
the decrease of the Company's sales commission in connection with
obtaining new orders in 2023.
- General and administrative expenses were $0.99 million for the six months ended
June 30, 2023, increased by 25.9%
from $0.79 million for the same
period of last year. The increase was mainly due to the increase of
auding fee of $152,260, other fees
related to offering of $99,514,
impairment losses of $72,472 and
offset with the decrease of salary expense of $120,536.
Operating Income
Operating income was $0.51 million
for the six months ended June 30,
2023, compared to $0.76
million for the same period of last year. The decrease in
operating income in 2022 was primary due to the decrease in gross
profit.
Other Income
Other income was $0.44 million for
the six months ended June 30, 2023,
increased by 254.9% from $0.12
million for the same period of last year. The increase was
primarily due to the increase of investment income of $94,970 and increase of government subsidies of
$140,314.
Net Income
Net income was $0.62 million for
the six months ended June 30, 2023,
compared to $0.64 million for the
same period of last year.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share was $0.05 for the six months ended June 30, 2023, compared to $0.06 for the same period of last year.
Balance Sheet
As of June 30, 2023, the Company
had cash of $5.50 million, compared
to $1.20 million as of December 31, 2022.
Cash Flow
Net cash provided by operating activities was $0.20 million for the six months ended
June 30, 2023, compared to
$4.22 million for the same period of
last year.
Net cash used in investing activities was $11.00 million for the six months ended
June 30, 2023, compared to
$7.64 million for the same period of
last year.
Net cash provided by financing activities was $15.14 million for the six months ended
June 30, 2023, compared to
$3.09 million for the same period of
last year.
About Hitek Global Inc.
Hitek Global Inc., headquartered in Xiamen, China, is an information technology
("IT") consulting and solutions service provider in China. The Company has two lines of business:
1) services to small and medium businesses, which consists of
Anti-Counterfeiting Tax Control System ("ACTCS") tax devices, ACTCS
services, and IT services, and 2) services to large businesses,
which consists of hardware sales and software sales. The Company's
vision is to become a one-stop consulting destination for holistic
IT and other business consulting services in China. For more information, visit the
Company's website at http://ir.xmhitek.com/.
Forward-Looking Statements
This announcement contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on current
expectations and projections about future events and financial
trends that the Company believes may affect its financial
condition, results of operations, business strategy and financial
needs. Investors can identify these forward-looking statements by
words or phrases such as "may," "will," "expect," "anticipate,"
"aim," "estimate," "intend," "plan," "believe," "potential,"
"continue," "is/are likely to" or other similar expressions. The
Company undertakes no obligation to update 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 in its other filings with the
SEC.
For investor and media inquiries please contact:
Hitek Global Inc.
Investor Relations Department
Email: ir@xmhitek.com
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
HITEK GLOBAL
INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash
|
|
$
|
5,495,270
|
|
|
$
|
1,203,160
|
|
Short-term
investments
|
|
|
6,727,141
|
|
|
|
4,290,348
|
|
Accounts receivable,
net
|
|
|
1,263,451
|
|
|
|
3,271,218
|
|
Accounts receivable -
related party, net
|
|
|
-
|
|
|
|
399,465
|
|
Advances to suppliers,
net
|
|
|
342,737
|
|
|
|
481,769
|
|
Inventories,
net
|
|
|
456,516
|
|
|
|
430,670
|
|
Deferred offering
cost
|
|
|
-
|
|
|
|
917,446
|
|
Loans
receivable
|
|
|
7,487,166
|
|
|
|
1,013,157
|
|
Prepaid expenses and
other current assets
|
|
|
602,496
|
|
|
|
94,925
|
|
Total current
assets
|
|
|
22,374,777
|
|
|
|
12,102,158
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Non-current accounts
receivable
|
|
|
5,165,528
|
|
|
|
4,209,546
|
|
Non-current advance to
a third party
|
|
|
401,647
|
|
|
|
421,679
|
|
Non-current loan
receivable
|
|
|
-
|
|
|
|
4,342,100
|
|
Property, equipment and
software, net
|
|
|
235,395
|
|
|
|
122,967
|
|
Operating lease
right-of-use assets
|
|
|
4,800
|
|
|
|
6,641
|
|
Long-term
investments
|
|
|
5,000,000
|
|
|
|
-
|
|
Total non-current
assets
|
|
|
10,807,370
|
|
|
|
9,102,933
|
|
Total
Assets
|
|
$
|
33,182,147
|
|
|
$
|
21,205,091
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
559,573
|
|
|
$
|
696,734
|
|
Advances from
customers
|
|
|
70,538
|
|
|
|
-
|
|
Loan payable
|
|
|
2,550,423
|
|
|
|
506,578
|
|
Deferred
revenue
|
|
|
503,757
|
|
|
|
977,054
|
|
Taxes
payable
|
|
|
1,708,684
|
|
|
|
1,671,322
|
|
Due to related
parties
|
|
|
1,114
|
|
|
|
598
|
|
Accrued expenses and
other current liabilities
|
|
|
310,772
|
|
|
|
348,167
|
|
Operating lease
liabilities
|
|
|
3,162
|
|
|
|
3,242
|
|
Total current
liabilities
|
|
|
5,708,023
|
|
|
|
4,203,695
|
|
|
|
|
|
|
|
|
|
|
Non-current
Liabilities
|
|
|
|
|
|
|
|
|
Loan payable,
non-current
|
|
|
-
|
|
|
|
2,171,050
|
|
Deferred income tax
liabilities, non-current
|
|
|
1,515,182
|
|
|
|
1,300,421
|
|
Operating lease
liabilities, non-current
|
|
|
1,638
|
|
|
|
3,399
|
|
Total non-current
liabilities
|
|
|
1,516,820
|
|
|
|
3,474,870
|
|
Total
Liabilities
|
|
|
7,224,843
|
|
|
|
7,678,565
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Ordinary Shares, par
value $0.0001 per share, 490,000,000 shares authorized;
14,392,364 shares and
10,987,679 shares issued and outstanding as of June 30,
2023 and December 31, 2022, respectively.
|
|
|
1,439
|
|
|
|
1,099
|
|
Additional paid-in
capital
|
|
|
16,721,551
|
|
|
|
2,628,356
|
|
Statutory
reserve
|
|
|
836,215
|
|
|
|
836,215
|
|
Retained
earnings
|
|
|
9,174,695
|
|
|
|
10,340,107
|
|
Accumulated other
comprehensive loss
|
|
|
(776,596)
|
|
|
|
(279,251)
|
|
Total Shareholders'
Equity
|
|
|
25,957,304
|
|
|
|
13,526,526
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
33,182,147
|
|
|
$
|
21,205,091
|
|
HITEK GLOBAL
INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
AND COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
Revenues
|
|
$
|
2,948,115
|
|
|
$
|
2,859,150
|
|
Cost of
revenues
|
|
|
(1,448,835)
|
|
|
|
(1,019,028)
|
|
Gross
profit
|
|
|
1,499,280
|
|
|
|
1,840,122
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
991,254
|
|
|
|
787,113
|
|
Selling
|
|
|
325
|
|
|
|
291,272
|
|
Total operating
expenses
|
|
|
991,579
|
|
|
|
1,078,385
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
507,701
|
|
|
|
761,737
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Government
subsidies
|
|
|
148,902
|
|
|
|
8,588
|
|
Net investment income
(loss)
|
|
|
88,846
|
|
|
|
(6,124)
|
|
Interest
income
|
|
|
364,042
|
|
|
|
250,666
|
|
Interest
expense
|
|
|
(160,319)
|
|
|
|
(122,765)
|
|
Other expense,
net
|
|
|
(1,257)
|
|
|
|
(6,325)
|
|
Total other
income
|
|
|
440,214
|
|
|
|
124,040
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
|
947,915
|
|
|
|
885,777
|
|
Income tax
expense
|
|
|
325,941
|
|
|
|
247,350
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
621,974
|
|
|
$
|
638,427
|
|
Comprehensive
loss
|
|
|
|
|
|
|
|
|
Net income
|
|
|
621,974
|
|
|
|
638,427
|
|
Foreign currency
translation loss
|
|
|
(497,345)
|
|
|
|
(638,625)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss)
|
|
$
|
124,629
|
|
|
$
|
(198)
|
|
Earnings per
ordinary share
|
|
|
|
|
|
|
|
|
– Basic and
diluted
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares outstanding
|
|
|
|
|
|
|
|
|
– Basic and
diluted
|
|
|
12,122,574
|
|
|
|
10,987,679
|
|
HITEK GLOBAL
INC. AND SUBSIDIARIES
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Operating
Activities
|
|
|
|
|
|
|
Net income
|
|
$
|
621,974
|
|
|
$
|
638,427
|
|
Adjustments to
reconcile net income to net cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
15,185
|
|
|
|
11,367
|
|
Amortization of right
of use assets
|
|
|
1,598
|
|
|
|
-
|
|
Loss on disposal of
property, plant and equipment
|
|
|
1,444
|
|
|
|
-
|
|
Accrued interest income
from loans, net
|
|
|
(47,807)
|
|
|
|
(23,163)
|
|
Net investment (gain)
loss
|
|
|
(88,846)
|
|
|
|
6,124
|
|
Provision for (reversal
of) credit losses of receivables and advances to
suppliers
|
|
|
71,984
|
|
|
|
(4,241)
|
|
Reversal of obsolete
inventories provision
|
|
|
(4,469)
|
|
|
|
(2,853)
|
|
Deferred income
tax
|
|
|
289,720
|
|
|
|
163,677
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Short-term investments
– trading securities
|
|
|
400,374
|
|
|
|
3,742,348
|
|
Accounts
receivable
|
|
|
(1,081,209)
|
|
|
|
(1,015,176)
|
|
Accounts receivable –
related party
|
|
|
398,622
|
|
|
|
216,190
|
|
Advances to
suppliers
|
|
|
469,979
|
|
|
|
44,047
|
|
Deferred offering
cost
|
|
|
(130,134)
|
|
|
|
60,000
|
|
Inventories
|
|
|
(44,044)
|
|
|
|
(228,306)
|
|
Prepaid expenses and
other current assets
|
|
|
(189,358)
|
|
|
|
34,285
|
|
Accounts
payable
|
|
|
(109,021)
|
|
|
|
25,606
|
|
Advances from
customers
|
|
|
73,900
|
|
|
|
-
|
|
Deferred
revenue
|
|
|
(447,227)
|
|
|
|
313,257
|
|
Taxes
payable
|
|
|
122,326
|
|
|
|
176,134
|
|
Operating lease
liabilities
|
|
|
(1,598)
|
|
|
|
-
|
|
Due to related
parties
|
|
|
571
|
|
|
|
(3,450)
|
|
Accrued expenses and
other current liabilities
|
|
|
(123,095)
|
|
|
|
68,040
|
|
Net cash provided by
operating activities
|
|
|
200,869
|
|
|
|
4,222,313
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Advance payment for
software development
|
|
|
(346,635)
|
|
|
|
(122,207)
|
|
Loans to third
parties
|
|
|
(2,986,321)
|
|
|
|
(6,176,843)
|
|
Repayment from
third-party loans
|
|
|
600,000
|
|
|
|
207,247
|
|
Prepayment for
renovation
|
|
|
(123,597)
|
|
|
|
-
|
|
Purchases of property,
plant and equipment
|
|
|
(140,536)
|
|
|
|
-
|
|
Purchases of
held-to-maturity investments
|
|
|
(8,000,000)
|
|
|
|
(1,544,211)
|
|
Net cash used in
investing activities
|
|
|
(10,997,089)
|
|
|
|
(7,636,014)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowing from
third parties
|
|
|
-
|
|
|
|
3,088,422
|
|
Proceeds from
issuance of ordinary shares
|
|
|
15,142,902
|
|
|
|
-
|
|
Net cash
provided by financing activities
|
|
|
15,142,902
|
|
|
|
3,088,422
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
|
|
(54,572)
|
|
|
|
(75,210)
|
|
Net increase
(decrease) in cash
|
|
|
4,292,110
|
|
|
|
(400,489)
|
|
Cash at beginning of
period
|
|
|
1,203,160
|
|
|
|
2,091,308
|
|
Cash at end of
period
|
|
$
|
5,495,270
|
|
|
$
|
1,690,819
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
21,104
|
|
|
$
|
34,202
|
|
Cash paid for
interest
|
|
$
|
80,159
|
|
|
$
|
94,969
|
|
|
|
|
|
|
|
|
|
|
Non-cash
transactions:
|
|
|
|
|
|
|
|
|
Deferred offering
cost
|
|
$
|
1,049,367
|
|
|
$
|
-
|
|
View original
content:https://www.prnewswire.com/news-releases/hitek-global-inc-announces-first-half-of-fiscal-year-2023-financial-results-301979387.html
SOURCE Hitek Global Inc.