Business Operations - Addentax Group Corp. operates primarily through its wholly owned subsidiary, Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd., and does not directly own any substantive business operations in China[261]. - The company’s garment manufacturing segment aims to expand its customer base and improve profit, focusing on exceptional quality and timely delivery[270]. - As of March 31, 2024, the logistics services segment provides services to over 44 cities across approximately 10 provinces and 2 municipalities in China, with plans to develop 20 additional logistics routes[270]. - The property management and subleasing segment aims to integrate resources in shopping malls and develop e-commerce bases to increase store value, following the acquisition of Dongguan Hongxiang Commercial Co., Ltd. in September 2023[268]. Financial Performance - Total revenue for the year ended March 31, 2024, decreased by approximately $2.8 million, or 35.1%, compared to the previous year, primarily due to a decline in the garment manufacturing business[293]. - Revenue from the logistics services business contributed approximately $4.3 million, or 84.3%, of total revenue for the year ended March 31, 2024, down from $4.6 million, or 58.2%, in 2023[294]. - Revenue generated from property management and subleasing business was approximately $0.6 million, or 11.3%, of total revenue for the year ended March 31, 2024, down from $3.1 million, or 39.0%, in 2023[294]. - Net income for the year ended March 31, 2024, was a loss of $3,109,418, compared to a net income of $1,319,657 in 2023, representing a decrease of $4,429,075 or 335.6%[291]. - Gross profit for the year ended March 31, 2024 was approximately $1.1 million, a decrease of 39.4% compared to $1.8 million in 2023[304]. Cost and Expenses - Cost of revenue for the year ended March 31, 2024, was $4,038,668, an increase of 33.8% compared to $6,103,110 in 2023[296]. - The cost of revenue for property management and subleasing business was $0.5 million, approximately 81.4% of total revenue for the segment in 2024, compared to $2.4 million, or 78.9%, in 2023[300]. - Selling expenses for property management and subleasing business were approximately $84.0 million for the year ended March 31, 2024, compared to $78.8 million in 2023, reflecting an increase of 6.5%[305]. - General and administrative expenses in the logistics services segment decreased to approximately $767.0 million in 2024 from $832.7 million in 2023, a decrease of 7.8%[307]. Operational Challenges - The company has experienced continued pricing pressure due to economic uncertainty in China, which may negatively impact sales growth and operating margins[275]. - Loss from operations increased to approximately $1.1 million for the year ended March 31, 2024, compared to a loss of $0.5 million in 2023, representing a 144.4% increase[304]. - Subcontracting fees for logistics services increased to approximately $1.5 million for the year ended March 31, 2024, from $1.1 million in 2023, representing an increase of approximately 33.0%[299]. Cash Flow and Assets - Cash on hand as of March 31, 2024 was approximately $0.8 million, with total current assets of approximately $29.2 million and current liabilities of approximately $4.6 million[317]. - Net cash used in operating activities decreased by approximately $1.1 million to $411,473 in 2024 from $1.6 million in 2023[315]. - Net cash provided by investing activities was approximately $90,731 in 2024, a significant recovery from cash used of $21.2 million in 2023[316]. Revenue Recognition - The company’s revenue is recognized when a customer obtains control of promised goods or services, reflecting the consideration expected to be received[279]. - For new customers, the company typically requires orders to be backed by advances or deposits, while established customers may have payment terms of 30 to 180 days[272]. Segment Performance - Gross profit for the garment manufacturing business was approximately $63,544 for the year ended March 31, 2024, with a gross profit ratio of 27.7%, compared to approximately $0.2 million and 25.5% in 2023[302]. - Gross profit for the logistics services business was approximately $947,038 for the year ended March 31, 2024, with a gross profit ratio of 21.8%, down from approximately $1.1 million and 24.2% in 2023[302]. - Fuel, toll, and other costs for logistics business were approximately $1.9 million for the year ended March 31, 2024, down from $2.4 million in 2023, accounting for 43.3% of total service revenue[299]. - Income tax expense for the year ended March 31, 2024 was $11,605, down from $22,143 in 2023, reflecting a decrease of 47.5%[310].
Addentax(ATXG) - 2024 Q4 - Annual Report