CCSC Technology International Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2025 Ended September 30, 2024

PR Newswire

HONG KONG, Dec. 27, 2024

HONG KONG, Dec. 27, 2024 /PRNewswire/ -- CCSC Technology International Holdings Limited (the "Company" or "CCSC") (Nasdaq: CCTG), a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products, including connectors, cables and wire harnesses, today announced its unaudited financial results for the first six months of fiscal year 2025 ended September 30, 2024.

Mr. Kung Lok Chiu, Chief Executive Officer and Director of the Company, commented, "The first six months of fiscal year 2025 has been a remarkable period of growth for our Company. We are proud to report a 22.9% increase in revenue compared to the same period last year, while our gross margin remained stable despite a net loss of $0.74 million in a challenging environment. Furthermore, in January 2024, we successfully completed our initial public offering $(IPO.UK)$ and got listed on the Nasdaq Capital Market under the ticker symbol "CCTG". Building on the momentum, we launched a plan in May 2024 to establish a new supply chain management center in Serbia, Central Europe. Once completed, this center will serve as the headquarter of our supply chain operations in Europe to support our operations across the region. As of the date of the report, we have acquired the land plot for our new center and expect to complete this project by the fourth quarter of 2025. Looking forward, we plan to strategically focus on further expanding into high-growth industries, such as new energy, robotics, and medical technologies. By continuing to invest in research and development, we aim to deliver innovative and cost-effective products that meet the evolving needs of our customers. We are committed to delivering high-quality products to our customers and generating long-term value for our shareholders."

First Six Months of Fiscal Year 2025 Financial Highlights

   -- Revenue increased by 22.9% to $9.2 million for the six months ended 
      September 30, 2024, from $7.5 million for the same period of last year. 
 
   -- Gross profit increased by 20.5% to $2.7 million for the six months ended 
      September 30, 2024, from $2.3 million for the same period of last year. 
 
   -- Gross profit margin was 29.8% for the six months ended September 30, 
      2024, compared to 30.4% for the same period of last year. 
 
   -- Net loss was $0.7 million for the six months ended September 30, 2024, 
      compared to net income of $0.4 million for the same period of last year. 

First Six Months of Fiscal Year 2025 Financial Results

Revenue

Total revenue was $9.2 million for the six months ended September 30, 2024, which increased by 22.9% from $7.5 million for the same period of last year.

The following table sets forth revenue by interconnect products:

 
               For the six months ended September 30,         Change 
              ----------------------------------------  ------------------- 
                 2024        %        2023        %       Amount       % 
              ----------  -------  ----------  -------  ----------  ------- 
                           (Amounts expressed in U.S. dollars) 
              ------------------------------------------------------------- 
Cable and 
 wire 
 harness      $8,604,502   93.3 %  $6,887,303   91.8 %  $1,717,199   24.9 % 
Connectors       613,957    6.7 %     616,217    8.2 %     (2,260)  (0.4) % 
               ---------            ---------            ---------  ------- 
Total         $9,218,459  100.0 %  $7,503,520  100.0 %  $1,714,939   22.9 % 
               =========            =========            =========  ======= 
 

Revenue generated from cables and wire harnesses increased by 24.9%, to $8.6 million for the six months ended September 30, 2024, from $6.9 million for the same period of last year. Revenue generated from connectors remained essentially unchanged compared to the same period last year.

The increase in revenue was primarily attributable to the increase in sales volume and partially offset by the decrease in the average selling price of products. The increase in demand was mainly due to that customers had utilized their inventories previously purchased and increased their orders accordingly.

The following table sets forth the disaggregation of revenue by regions:

 
            For the six months ended September 30,         Change 
            ---------------------------------------  ------------------ 
               2024       %        2023        %       Amount      % 
            ----------  ------  ----------  -------  ----------  ------ 
                        (Amounts expressed in U.S. dollars) 
            ----------------------------------------------------------- 
Europe      $5,626,272  61.0 %  $4,336,284   57.8 %  $1,289,988  29.7 % 
Asia         2,736,289  29.7 %   2,388,511   31.8 %     347,778  14.6 % 
Americas       855,847   9.3 %     778,725   10.4 %      77,122   9.9 % 
Other 
 regions            51   0.0 %           -    0.0 %          51   0.0 % 
             ---------           ---------            ---------  ------ 
Total       $9,218,459   100 %  $7,503,520    100 %  $1,714,939  22.9 % 
             =========           =========            =========  ====== 
 

Revenue generated from Europe increased by 29.7%, to $5.6 million for the six months ended September 30, 2024, from $4.3 million for the same period of last year. The increase was primarily due to the increase of sales in Denmark of $1.0 million and Bulgaria of $0.2 million.

Revenue generated from Asia increased by 14.6%, to $2.7 million for the six months ended September 30, 2024, from $2.4 million for the same period of last year. The increase was primarily due to sales increases in Hong Kong, China of $0.1 million, and sales increases in the Association of Southeast Asian Nations, or ASEAN, of $0.2 million.

Revenue generated from the Americas increased by 9.9%, to $0.9 million for the six months ended September 30, 2024, from $0.8 million for the same period of last year. The increase was primarily due to sales increases in Northern America of $0.08 million.

Revenue from other regions was mainly derived from Australia.

Cost of Revenue

Cost of revenue increased by 23.9%, to $6.5 million for the six months ended September 30, 2024, from $5.2 million for the same period of last year, which was in line with the increase of the total revenue.

Inventory costs amounted to $4.4 million for the six months ended September 30, 2024, compared to $3.5 million for the same period of last year. The increase of inventory costs was primarily due to a 47.5% increase in the total sales volume and a 13.6% decrease in the inventory cost per unit.

Labor costs amounted to $1.5 million for the six months ended September 30, 2024, compared to $1.2 million for the same period of last year. The increase of labor costs was primarily due to the increase in production volume as a result of an increase in sales volume.

Gross Profit and Gross Margin

Gross profit increased by 20.5%, to $2.7 million for the six months ended September 30, 2024, from $2.3 million for the same period of last year.

Gross profit margin was 29.8% for the six months ended September 30, 2024, compared with 30.4% for the same period of last year. The gross profit margin was basically consistent with the same period of 2023. The Company recruited more workers to cope with the increased sales volume, and the increased labor costs eroded profits, resulting in a decrease in gross profit margin.

Operating Expenses

Operating expenses increased by 38.5%, to $3.6 million for the six months ended September 30, 2024, from $2.6 million for the same period of last year. The expense increase was mainly due to the increases in the selling expenses of $0.3 million, inclusive of $0.2 million in costs relating to market development and expansion to ASEAN market, and general and administrative expenses of $0.7 million, inclusive of $0.6 million in agent and professional fees for expenses related to compliance requirements as a public company following the IPO in the U.S..

Other Income/(Expenses)

Other income/(expenses) decreased by $0.8 million, to other expenses of $0.1 million for the six months ended September 30, 2024, from other income of $0.6 million for the same period of last year, primarily due to the decrease in foreign exchange gain.

Income tax benefit

Income tax benefit increased by 170.7%, to $0.2 million for the six months ended September 30, 2024, from $0.1 million for the same period of last year, which was due to the loss of CCSC Technology Group for the six months ended September 30, 2024.

Net (Loss)/Income

Net income decreased by 280.0%, to net loss of $0.7 million for the six months ended September 30, 2024, from net income of $0.4 million for the same period of last year.

Basic and Diluted (Loss)/Earnings per Share

Basic and diluted loss per share was $0.06 for the six months ended September 30, 2024, compared to basic and diluted earnings per share of $0.04 for the same period of last year.

About CCSC Technology International Holdings Limited

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