EX-99.3 4 ea022588101ex99-3_ccsctech.htm PRESS RELEASE

Exhibit 99.3

 

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

 

Hong Kong, December 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) 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. 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 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.

 

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.

 

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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 Interconnect HK 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

 

CCSC Technology International Holdings Limited, is a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products. The Company specializes in customized interconnect products, including connectors, cables and wire harnesses that are used for a range of applications in a diversified set of industries, including industrial, automotive, robotics, medical equipment, computer, network and telecommunication, and consumer products. The Company produces both OEM (“original equipment manufacturer”) and ODM (“original design manufacture”) interconnect products for manufacturing companies that produce end products, as well as electronic manufacturing services (“EMS”) companies that procure and assemble products on behalf of such manufacturing companies. The Company has a diversified global customer base located in more than 25 countries throughout Asia, Europe and the Americas. For more information, please visit the Company’s website: http://ir.ccsc-interconnect.com.

 

Forward-Looking Statements

 

Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company’s proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue”, or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any 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 other filings with the U.S. Securities and Exchange Commission.

 

For more information, please contact:

 

CCSC Technology International Holdings Limited

Investor Relations Department

Email: ir@ccsc-interconnect.com

 

Ascent Investor Relations LLC

Tina Xiao

Phone: +1-646-932-7242

Email: investors@ascent-ir.com

 

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CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in U.S. dollars, except for number of shares)

 

   As of
September 30,
2024
   As of
March 31,
2024
 
   (Unaudited)     
Assets        
Current assets:        
Cash  $3,789,806   $5,525,430 
Restricted cash   209,622    209,317 
Accounts receivable   3,256,687    2,750,214 
Inventories   1,967,824    2,023,456 
Prepaid expenses and other current assets   1,737,454    1,474,405 
Total current assets   10,961,393    11,982,822 
           
Non-current assets:          
Property, plant and equipment, net   681,342    198,901 
Intangible asset, net   103,768    38,183 
Operating right-of-use assets, net   1,441,593    1,659,297 
Finance lease right-of-use asset   15,915    17,788 
Deferred tax assets, net   488,190    287,394 
Other non-current assets   3,733,073    3,753,646 
Total non-current assets   6,463,881    5,955,209 
TOTAL ASSETS  $17,425,274   $17,938,031 
           
Liabilities and Shareholders’ Equity          
Current liabilities:          
Accounts payable  $2,567,890   $2,175,974 
Advance from customers   151,594    207,293 
Accrued expenses and other current liabilities   1,333,630    1,523,843 
Taxes payable   27,248    24,974 
Operating lease liabilities – current   517,985    506,061 
Finance lease liabilities – current   4,682    4,454 
Total current liabilities   4,603,029    4,442,599 
           
Non-current liabilities:          
Operating lease liabilities – non current   961,965    1,184,056 
Finance lease liabilities – non current   11,739    13,709 
Total non – current liabilities   973,704    1,197,765 
TOTAL LIABILITIES  $5,576,733   $5,640,364 
           
Commitments and Contingencies        
           
Shareholders’ equity          
Class A ordinary shares, par value of US$0.0005 per share; 495,000,000 shares authorized, 6,581,250 shares issued and outstanding as of September 30, 2024 and March 31, 2024*   3,291    3,291 
Class B ordinary shares, par value of US$0.0005 per share; 5,000,000 shares authorized, 5,000,000 shares issued and outstanding as of September 30, 2024 and March 31, 2024*   2,500    2,500 
Additional paid-in capital   4,855,795    4,855,795 
Statutory reserve   813,235    813,235 
Retained earnings   7,747,463    8,491,783 
Accumulated other comprehensive loss   (1,573,743)   (1,868,937)
Total shareholders’ equity   11,848,541    12,297,667 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $17,425,274   $17,938,031 

 

*Retrospectively reflect the changes in class of shares effective on September 10, 2024

 

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CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE LOSS
(Amount in U.S. dollars, except for number of shares)

 

   For the six months ended
September 30,
 
   2024   2023 
Net revenue  $9,218,459   $7,503,520 
Cost of revenue    (6,470,715)   (5,223,159)
Gross profit    2,747,744     2,280,361 
           
Operating expenses:           
Selling expenses   (752,926)   (473,636)
General and administrative expenses    (2,468,416)   (1,753,179)
Research and development expenses    (332,155)   (338,038)
Total operating expenses    (3,553,497)   (2,564,853)
           
Loss from operations    (805,753)   (284,492)
           
Other (expenses)/income:           
Other non-operating (expenses)/income, net   (34,766)   51,628 
Government subsidies    138,845     - 
Foreign currency exchange (losses)/gains   (241,996)   539,844 
Financial and interest expenses, net    7,530     35,783 
Total other (expenses)/income    (130,387)   627,255 
            
(Loss)/income before income tax expense   (936,140)   342,763 
Income tax benefit    191,820     70,851 
Net (loss)/income    (744,320)   413,614 
            
Other comprehensive income/(loss)          
Foreign currency translation adjustment    295,194     (636,978)
Total comprehensive loss  $(449,126)  $(223,364)
            
(Loss)/earnings per share          
Basic and Diluted  $(0.06)  $0.04 
           
Weighted average number of ordinary shares           
Basic and Diluted    11,581,250     10,000,000 

 

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CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amount in U.S. dollars, except for number of shares)

 

  

For the six months ended
September 30,

 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net (loss)/income  $(744,320)  $413,614 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:          
Inventories write-down   108,257    73,643 
Depreciation and amortization   108,167    114,208 
Amortization of right-of-use asset   259,582    251,865 
Loss from disposal of fixed assets   1,497    595 
Deferred tax benefits   (191,820)   (79,198)
Foreign currency exchange losses/(gains)   189,653    (539,844)
Changes in operating assets and liabilities:          
Accounts receivable   (479,077)   (47,683)
Inventories   (10,449)   164,072 
Prepaid expenses and other current assets   (221,742)   (223,354)
Other non-current assets   54,925    - 
Accounts payable   336,256    418,473 
Advance from customers   (56,965)   (60,075)
Taxes payable   1,453    (4,408)
Accrued expenses and other current liabilities   (223,442)   (39,341)
Operating lease liabilities   (250,801)   (244,763)
Financing lease liabilities   (2,208)   - 
Net cash (used in)/provided by operating activities   (1,121,034)   197,804 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of property and equipment   (44,006)   (52,025)
Purchase of land   (539,513)   - 
Purchase of intangible asset   (83,346)   (19,217)
Net cash used in investing activities   (666,865)   (71,242)
           
CASH FLOWS FORM FINANCING ACTIVITIES          
Repayments of long-term bank loans   -    (39,817)
Payment for deferred initial public offering costs   -    (366,094)
Capital contribution by shareholder   -    5,000 
Net cash used in financing activities   -    (400,911)
           
Effect of exchange rate changes on cash and restricted cash   52,580    (63,670)
           
Net change in cash and restricted cash   (1,735,319)   (338,019)
Cash and restricted cash, beginning of the period   5,734,747    7,717,615 
Cash and restricted cash, end of the period  $3,999,428   $7,379,596 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for income tax  $-   $(39,402)
Cash paid for interest  $-   $(228)
Cash paid for operating lease  $(287,263)  $(288,667)

 

 

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