Lucas GC Limited Reports Strong Financial Growth in First Half of 2024

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

NEW YORK, Sept. 26, 2024 (GLOBE NEWSWIRE) -- Lucas GC Limited 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/. 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/ [email protected] 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 Market News and Data brought to you by Benzinga APIs

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

, (GLOBE NEWSWIRE) -- (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. , 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 , 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 , representing 10% growth in 1H 2024, compared to , 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 that are accretive and will drive value for shareholders in the coming months." About With 18 granted and Chinese patents and over 74 registered software copyrights in the AI, data analytics and blockchain technologies, 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.