- Gross profit of $6.3 million, up 27.5% and net income of $4.3 million, up 34.4%, both reaching a historical high since 2022
Fiscal Year 2024 Financial Highlights:
- With total of 164,217 consumer products distributed to our customers, the total revenue for the year ended September 30, 2024 was US$35.6 million, decreased by 29.2% from US$50.3 million for the year ended September 30, 2023. The decrease was mainly due to the decrease in wholesale revenue as the Company strategically established its market share and selected higher margin orders, which led to a decrease in revenue but increased gross profit during the period.
- Gross profit increased by 27.5%, from $5.0 million to $6.3 million for the year ended September 30, 2024. Gross profit margin was 17.8% and 9.9% for the years ended September 30, 2024 and 2023, respectively. Gross profit margins for all product categories smartphones, tablets and laptops improved to 18.1%, 14.5% and 17.8%, respectively, from 10.1%, 9.4% and 8.3%, respectively, for the year ended September 30, 2023.
- Income from operations increased by 36.7%, from $3.8 million to $5.2 million for the year ended September 30, 2024.
- Net income increased by approximately 34.4% to US$4.3 million for the year ended September 30, 2024, from US$3.2 million for the year ended September 30, 2023.
"Our Smartphone product category, contributing the most of our revenue, decreased from 81.8% to 73.8% of total revenue, reflecting a significant drop in units sold from 149,032 to 67,448. This shift resulted from our strategy to emphasize higher-margin products, leading to an increase in average unit cost from $248 to $319 and selling price from $272 to $390.”
"Consequently, the Company achieved a net income of US$4.3 million for the year ending September 30, 2024, a significant 34.4% increase from US$3.2 million for the year ending September 30, 2023, driven by higher gross profit and reduced expenses.”
"Looking ahead, we plan to further enhance profitability by expanding our product offerings, investing in marketing for high-margin segments, and optimizing our acquisition channels to reduce costs. These strategies will position us for sustainable growth and improved financial performance in the coming years.”
Financial Results for Fiscal Year 2024
Revenues
For the years ended September 30, 2024 and 2023, the Company's total revenue was US$35.6 million and US$50.3 million, respectively. The decrease was mainly due to the decrease in wholesale revenue from US$50.2 million in the year ended September 30, 2023 to US$35.6 million in the year ended September 30, 2024.
During the year ended September 30, 2024, the Company established its market share and intentionally selected higher margin orders, this resulted in decreased revenue but increased gross profit with higher profit margin over its products. All revenues were generated from Hong Kong.
The following table presents the Company's revenues disaggregated by product category for the years ended September 30, 2024 and 2023:
| million in USD | 2024 | 2023 | ||||||||||||
| Smartphones | 26.3 | 73.8 | % | $ | 41.1 | 81.8 | % | |||||||
| Tablets | 2.6 | 7.3 | % | 3.6 | 7.3 | % | ||||||||
| Laptops and others | 6.7 | 18.9 | % | 5.5 | 10.9 | % | ||||||||
| Total | $ | 35.6 | 100 | % | $ | 50.2 | 100.0 | % | ||||||
Smartphones
For the years ending September 30, 2024 and 2023, smartphone revenue represented 73.8% and 81.8% of total revenue, respectively. The decline was due to a drop in units sold from 149,032 to 67,448 as a result of a strategy prioritizing higher-margin orders. This led to an increase in average unit cost from $248 to $319 and in selling price from $272 to $390.
Tablets
Tablet revenue remained steady at about 7.3% of total revenue for both years. Units sold decreased from 44,603 to 31,066, driven by a lower market demand. The average cost per unit fell from $74 to $71, while the selling price slightly rose from $82 to $83.
Laptops and Others
Revenue from laptops and other products increased from 10.9% to 18.9% of total revenue. Units sold rose from 61,617 to 65,703, fueled by the market demand and the Company's focus on higher-margin orders, boosting gross profit margins from 8.3% to 17.8%. This increase in revenue was due to higher sales amid a reduced total revenue amount.
Cost of Revenues
For the years ended September 30, 2024 and 2023, the cost of revenues was US$29.3 million and US$45.3 million, respectively.
The decrease is mainly due to the decrease in acquisition volume by 35.7% from 255,252 units to 164,217 units, respectively, offset by an increase in acquisition cost for smartphones as explained above.
Gross Profit
Gross profit for the years ended September 30, 2024 and 2023 was US$6.3 million and US$5.0 million, respectively, of 17.8% and 9.9%, respectively, of operating revenue. The increase of gross profit margin was mainly due to the Company's intentional selection of higher margin orders after building up its market share during the year ended September 30, 2024.
Selling and marketing expenses
For the years ended September 30, 2024 and 2023, selling and marketing expenses were US$32,738 and US$34,132, respectively. The decrease is mainly attributable to the Company's efforts to control the expenses in the sales department for the year ended September 30, 2024.
General and administrative expenses
For the years ended September 30, 2024 and 2023, the general and administrative expenses remained stable, both at approximately US$1.1 million.
Net income
As a result of the above discussed, the Company recorded a net income of US$4.3 million for the year ended September 30, 2024, growing by about 34.4% from US$3.2 million for the year ended September 30, 2023. The increase was mainly driven by increase in gross profit.
Recent Development:
On November 27, 2024, the Company completed its initial public offering ("IPO”) and raised gross proceeds of US$5 million before deducting underwiring discounts and other offering expenses. On the same day, the Company also closed the sale of an additional 187,500 ordinary shares, pursuant to the full exercise of the underwriter's over-allotment option granted in connection with its IPO. As a result, it has raised gross proceeds of US$0.75 million, in addition to the previously announced IPO gross proceeds of US$5 million, for total gross proceeds of US$5.75 million raised in its IPO before deducting underwriting discounts and offering expenses.
About Creative Global Technology Holdings Limited
Creative Global Technology Holdings Limited is dedicated to extending the life of consumer electronics through effective recycling, supporting a sustainable circular economy and reducing electronic waste. The Company connects supply and demand for pre-owned devices, maximizing their utility. Specializing in sourcing and reselling recycled smartphones, tablets, and laptops, CGTL facilitates the flow of retired devices from affluent markets like the U.S. and Japan to developing regions in need of affordable technology. With a lean inventory and efficient logistics, CGTL ensures quick inspection and availability for clients. CGTL has also expanded into retail sales and device rentals, providing Hong Kong residents access to quality recycled electronics and meeting short-term needs. For more information, please visit: http://www.cgt-recycle.com; https://ir.cgt-recycle.com/.
Forward-Looking Statement
This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may, "will, "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These forward-looking statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and other factors discussed in the "Risk Factors” section of the Form 20-F filed with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For more information, please contact:
Investor Relations
WFS Investor Relations Inc.
Janice Wang, Managing Partner
Email: [email protected]
Phone: +86 13811768599
+1 628 283 9214
| CREATIVE GLOBAL TECHNOLOGY HOLDINGS LIMITED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2024 AND 2023 | |||||||
| 2024 | 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and equivalents | $ | 443,322 | $ | 4,305,577 | |||
| Accounts receivable, net | 10,491,664 | - | |||||
| Prepayments, other receivables and other current assets | 538,195 | 762,475 | |||||
| Inventories, net | 3,842,072 | 5,750,381 | |||||
| Total current assets | 15,315,253 | 10,818,433 | |||||
| Non-current assets: | |||||||
| Property, plant and equipment, net | 26,568 | 15,920 | |||||
| Deferred offering costs | 854,684 | 554,220 | |||||
| Right-of-use assets, net | 123,446 | - | |||||
| Total non-current assets | 1,004,698 | 570,140 | |||||
| Total Assets | $ | 16,319,951 | $ | 11,388,573 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current Liabilities: | |||||||
| Taxes payable | $ | 2,676,376 | $ | 1,757,908 | |||
| Other payables and accrued liabilities | 56,207 | 428,678 | |||||
| Lease liabilities - current | 108,227 | - | |||||
| Total current liabilities | 2,840,810 | 2,186,586 | |||||
| Non-current liabilities: | |||||||
| Deferred tax liabilities | 266 | 2,430 | |||||
| Lease liabilities - non current | 18,659 | - | |||||
| Total non-current liabilities | 18,925 | 2,430 | |||||
| Total liabilities | 2,859,735 | 2,189,016 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| SHAREHOLDERS' EQUITY | |||||||
| Ordinary shares: USD $0.001 par value per share, 500,000,000 authorized; 20,000,000 shares issued and outstanding | 20,000 | 20,000 | |||||
| Accumulated other comprehensive income (loss) | (15,584 | ) | 6,125 | ||||
| Retained earnings | 13,455,800 | 9,173,432 | |||||
| Total shareholders' equity | 13,460,216 | 9,199,557 | |||||
| Total liabilities and shareholders' equity | $ | 16,319,951 | $ | 11,388,573 | |||
| CREATIVE GLOBAL TECHNOLOGY HOLDINGS LIMITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME YEARS ENDED SEPTEMBER 30, 2024, 2023 AND 2022 | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | 35,611,761 | $ | 50,278,937 | ||||
| Cost of revenues | (29,275,274 | ) | (45,309,410 | ) | ||||
| Gross Profit | 6,336,487 | 4,969,527 | ||||||
| Operating expenses: | ||||||||
| Selling and marketing | (32,738 | ) | (34,132 | ) | ||||
| General and administrative | (1,118,217 | ) | (1,141,069 | ) | ||||
| Total operating expenses | (1,150,955 | ) | (1,175,201 | ) | ||||
| Income from operations | 5,185,532 | 3,794,326 | ||||||
| Other income (loss): | ||||||||
| Other income | 5,290 | 30,541 | ||||||
| Other expenses | (2,726 | ) | - | |||||