Haoxi Health Technology Limited Reports Financial Results for Fiscal Year Ended June 30, 2024

GlobeNewswire10-29

BEIJING, Oct. 29, 2024 (GLOBE NEWSWIRE) -- Haoxi Health Technology Limited (the “Company” or “HAO”), an online marketing solution provider headquartered in Beijing, China, today reported its financial results for the fiscal year ended June 30, 2024.

Financial Highlights for Fiscal 2024

  • Net revenue for the fiscal year ended June 30, 2024 grew by 72% to $48.52 million, up from $28.23 million in 2023.
  • Gross profit increased by 33% to $2.75 million for the fiscal year ended June 30, 2024 from $2.06 million in the fiscal year ended June 30, 2023.
  • Net income grew by 33.0% to $1.29 million for the fiscal year ended June 30, 2024, up from $0.97 million in the fiscal year ended June 30, 2023.

Mr. Zhen Fan, Chairman and Chief Executive Officer of the Company, stated that, “HAO has experienced financial growth in the fiscal year ended June 30, 2024, with net revenue increasing from $28.23 million in the fiscal year ended June 30, 2023 to $48.52 in the fiscal year ended June 30, 2024, reflecting a 72% increase. This growth is largely due to a rise in average revenue per client in 2024, which increased from $71,830 to $89,355, and an expanded customer base that grew from 393 to 543 clients. These results are attributed to our marketing strategies and the growing demand for our services, particularly in the healthcare sector.”

“While costs rose in tandem with revenue, which increased from $26.17 million to $45.77 million, this was in line with our growth strategy to scale up sales. Gross profit improved to $2.75 million, though the margin dipped slightly to 5.7% due to competitive pressures. Overall, we achieved net income of $1.29 million for the fiscal year ended June 30, 2024, up from $0.97 million in the fiscal year ended June 30, 2023.”

Recent Developments

On September 25, 2024, the Company announced a strategic partnership with AI platform Gauss Intelligence (Beijing) Technology Co., Ltd., a subsidiary of Global Mofy AI Ltd (Nasdaq: GMM). This collaboration aims to leverage the advanced capabilities of Gausspeed, a generative AI platform, with HAO’s application scenarios to deliver AI marketing solutions.

On September 20, 2024, the Company announced the closing of a follow-on offering underwritten by EF Hutton LLC, to raise aggregate gross proceeds of $12 million, before deducting underwriting discounts and other offering expenses.

Results of Operations for the Fiscal Year Ended June 30, 2024

Revenue

The Company generates revenue from one-stop online marketing solutions, including traffic acquisition from mainstream online media platforms, content production, data analysis and advertising campaign optimization, to advertisers through its operating entity, Beijing Haoxi Digital Technology Co. Ltd. in the People’s Republic of China.

Net revenue was $28.23 million and $48.52 million for the fiscal years ended June 30, 2023 and 2024, respectively. The increase in revenue is mainly attributable to the increase in the average revenue per client from $71,830 in fiscal 2023 to $89,355 in the fiscal year ended June 30, 2024. The operating entity served 393 and 543 customers in the fiscal year ended June 30, 2023, and 2024, respectively. The higher average revenue per client in the current year is mainly attributable to higher advertisement expenditures made by our health care industry clients.

The average revenue per client under our advertisement pricing model consists of two components: 1) the average per unit-of-service price, which is the average price per click-through that we charge our advertiser customers, and 2) the quantity of services, which is the actual number of click-throughs with respect to each advertiser.

The increase in our quantity of services was because more people determined to use online services since the beginning of the COVID-19 pandemic, and the strong recovery from our client base since January 2024 occurred when the COVID control measures were lifted in China. In addition we attribute the increase in services, in part to the increasing popularity of ByteDance media platforms, which we mainly collaborated with, among our advertiser customers.

Cost of revenue

Our cost of revenue(“COR”) consists primarily of the purchase of online traffic from third-party media platforms after deducting rebates, and salaries and benefits for business operation staff. The cost of revenue increased by $19.60 million, or 75%, from $26.17 million for fiscal 2023 to $45.77 million for the fiscal year ended June 30, 2024. The increase in COR was in line with the increase in revenue.

Gross profit and gross margin

Our gross profit increased by $0.69 million, from $2.06 million for the fiscal year ended June 30, 2023 to $2.75 million for the fiscal year ended June 30, 2024. Gross profit as a percentage of revenue (“profit margin”) was 5.7% for the fiscal year ended June 30, 2024, lower than 7.3% for the fiscal year ended June 30, 2023, which was mainly due to market competition. The Company needed to provide rebates to some customers, to maintain and expand the customer base.

Selling and marketing expenses

Our selling and marketing expenses primarily consist of payroll costs and office related expenses. Selling and marketing expenses increased by 30% from $32,133 in the fiscal year ended June 30, 2023 to $41,613 in the fiscal year ended June 30, 2024. This was mainly because we had a higher customer retention rate in fiscal 2024, leading to lower marketing expenses.

General and administrative expenses

Our general and administrative expenses mainly consist of salaries and bonus, as well as office related expenses. General and administrative expenses increased by $135,570, or 17%, from $775,961 for the fiscal year ended June 30, 2023 to $911,531 for the fiscal year ended June 30, 2024. The increase was mainly attributable to an increase in salary and bonuses of the management team and professional fees in connection with our initial public offering on January 30, 2024.

Research and development expenses

Our research and development(“R&D”) expenses mainly consist of salaries and benefits of our R&D staff for the development of Bidding Compass, our online ads bidding analysis software. R&D expenses increased by $21,824, or 38%, from $58,161 for the fiscal year ended June 30, 2023 to $79,985 for the fiscal year ended June 30, 2024. It was mainly attributable to the increase in salaries of R&D staff.

Income taxes

We had income taxes of $220,653 and $443,582 for the fiscal year ended June 30, 2023 and 2024, respectively.

Net (loss)/income

As a result of the foregoing, we had net income of $0.97 million and $1.29 million for the fiscal year ended June 30, 2023 and 2024, respectively.

Cash and equivalents

As of the fiscal year ended June 30, 2024, HAO had $6,655,734 in cash and cash equivalents as compared to $1,203,203 as of the fiscal year ended June 30, 2023.

About Haoxi Health Technology Limited

Haoxi Health Technology Limited is an online marketing solution provider headquartered in Beijing, China, specializing in serving healthcare industry advertiser clients. The Company’s growth is driven by the rise of news feed ads and the rapid development of the healthcare sector. The Company offers one-stop online marketing solutions, especially in online short video marketing, helping advertisers acquire and retain customers on popular platforms in China, such as Toutiao, Douyin, WeChat, and Sina Weibo. The Company is dedicated to reducing costs, increasing efficiency, and providing easy online marketing solutions to advertisers. For more information, please visit: http://ir.haoximedia.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 the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These 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 registration statement filed with the U. S. Securities and Exchange Commission (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: services@wealthfsllc.com
Phone: +86 13811768599
+1 628 283 9214

HAOXI HEALTH TECHNOLOGY LIMITED

CONSOLIDATED BALANCE SHEETS

  As of June 30, 
  2024  2023 
ASSETS      
Current Assets      
Cash and cash equivalents $6,655,734  $1,203,203 
Trade receivables, net  226,747   7,748 
Advances to suppliers  5,174,302   2,404,680 
Prepaid expense, receivables and other assets  3,323,047   58,474 
Total current assets  15,379,830   3,674,105 
         
Non-current assets        
Property and equipment, net  126,743   143,836 
Operating right-of-use asset     89,544 
Deferred listing costs     556,752 
Total non-current assets  126,743   790,132 
Total Assets $15,506,573  $4,464,237 
         
LIABILITIES AND EQUITY        
Current Liabilities        
Short-term loans $833,521  $511,409 
Accounts payable  653,694   27,312 
Advance from customers  1,185,130   1,493,947 
Due to a related party  6,187   20,210 
Taxes payable  1,044,532   328,093 
Accrued expenses and other liabilities  102,436   41,517 
Salary and welfare payable  41,075   37,145 
Operating right-of-use liabilities-current     89,544 
Long-term accounts payable-current     27,344 
Total current liabilities  3,866,575   2,576,521 
         
Non-current Liabilities        
         
Long-term accounts payable  66,365   72,104 
Long-term borrowing  301,678   249,107 
Total non-current liabilities  368,043   321,211 
Total Liabilities  4,234,618   2,897,732 
         
Commitments and contingencies        
         
SHAREHOLDERS’ EQUITY:        
Class A Ordinary Shares (Par value US$0.0001 per share, 150,000,000 shares authorized 14,970,000 and 12,210,000 shares issued and outstanding as of June 30,2024 and June 30,2023)  1,497   1,221 
Class B Ordinary Shares (Par value US$0.0001 per share, 50,000,000 shares authorized, and 17,270,000 shares issued and outstanding)  1,727   1,727 
Additional paid-in capital  10,589,916   2,176,796 
Retained earnings (Accumulated deficit)  723,207   (568,460)
Accumulated other comprehensive loss  (44,392)  (44,779)
Total shareholders’ equity  11,271,955   1,566,505 
         
Total liabilities and shareholders’ equity $15,506,573  $4,464,237 

HAOXI HEALTH TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

  Years Ended June 30, 
  2024  2023  2022 
Revenues $48,519,836  $28,229,149  $16,156,865 
Cost of revenues  45,769,459   26,167,083   15,508,144 
Gross profit  2,750,377   2,062,066   648,721 
             
Operating expenses:            
Selling  41,613   32,133   37,488 
General and administrative  911,531   775,961   239,941 
R&D  79,985   58,161   102,524 
Total operating expenses  1,033,129   866,255   379,953 
             
Income from operations  1,717,248   1,195,811   268,768 
             
Other income (loss):            
Interest expense  (41,186)  (20,902)  (9,961)
Interest income  76,096        
Other income (expense)  (16,909)  15,496   788 
Total other income (loss), net  18,001   (5,406)  (9,173)
             
Income before income taxes  1,735,249   1,190,405   259,595 
             
Income tax expense  (443,582)  (220,653)  (15,008)
             
Net income $1,291,667  $969,752  $244,587 
             
Comprehensive income            
Net income $1,291,667  $969,752  $244,587 
Foreign currency translation gain  387   68,180   63,037 
Total Comprehensive income $1,292,054  $1,037,932  $307,624 
             
Earnings per ordinary share*            
– Basic and diluted $0.04  $0.04  $0.010 
             
Weighted average number of ordinary shares outstanding            
– Basic and diluted  30,600,000   27,613,333   25,000,000 

HAOXI HEALTH TECHNOLOGY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

  Years Ended
June 30,
 
  2024  2023  2022 
Cash flows from operating activities         
Net income $1,291,667  $969,752  $244,587 
Adjustments to reconcile net income to net cash used in operating activities:            
Depreciation  10,567   8,393   2,212 
Changes in operating assets and liabilities:            
Accounts receivable  (217,900)  (4,279)  665,618 
Advances to suppliers  (2,723,828)  (2,473,178)  439,423 
Prepayments, receivables and other assets  (175,298)  51,862   8,088 
Accounts payable  623,168   (1,201,034)  (1,604,129)
Advance from customers  (328,077)  1,393,774   (369,220)
Accrued expenses and other liabilities  60,069   14,406   (31,572)
Taxes payable  708,658   330,316   (29,025)
Operating lease right-of-use assets  (90,377)  (7,618)  90,409 
Operating lease liabilities  90,377   29,402   (87,689)
Salary and welfare payable  3,398   16,072   (4,063)
Net cash used in operating activities  (747,576)  (872,132)  (675,361)
             
Cash flows from investing activities         
Purchase of property and equipment  (55,367)  (45,500)  (8,698)
Loans to third parties  (3,073,684)       
Net cash used in investing activities  (3,129,051)  (45,500)  (8,698)
             
Cash flows from financing activities            
Proceeds from short-term borrowings  478,404   453,123   329,869 
Repayment of short-term borrowings  (115,934)  (345,604)  (52,062)
(Repayment of) due to a related party  (14,329)  21,038   (811,260)
Payment received from related party          1,302,752 
Proceeds from IPO (a shareholder)  8,975,416   1,994,258   163,920 
Proceeds from long-term borrowings     259,311     
Deferred listing costs     (579,558)    
Net cash provided by financing activities  9,323,557   1,802,568   933,219 
             
Effect of foreign exchange rate on cash and restricted cash  5,601   24,756   (11,534)
Net increase in cash  5,452,531   909,692   237,626 
Cash at the beginning of the year  1,203,203   293,511   55,886 
Cash at the end of the year $6,655,734  $1,203,203  $293,511 
             
Supplemental disclosures of cash flow information:            
Income taxes paid $27,570  $  $7,388 
Interest paid $37,265  $19,775  $206 
Operating right-of-use asset    $89,544  $88,528 

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