markdown [Financial Performance Analysis](index=1&type=section&id=First%20Half%202024%20Financial%20Highlights) For the first half of fiscal year 2024, Golden Heaven experienced a significant **31.09% decrease** in total revenue to **$13.8 million**, primarily due to a **34.59% drop** in in-park recreation sales caused by a park closure and adverse weather, partially offset by a **106.65% increase** in rental income, leading to a **50.3%** sharp fall in gross profit and a **65.69%** decline in net income to **$2.54 million**, despite a **9.13% reduction** in operating expenses [Revenue Analysis](index=1&type=section&id=Revenue) Total revenue for the first half of 2024 was **$13.82 million**, a **31.09% decrease** from **$20.06 million** in the same period of 2023, driven by a **$6.77 million** decline in in-park recreation sales due to park closure and poor weather, while rental income more than doubled to **$1.03 million** from a new rental agreement Revenue Breakdown (YoY) | Revenue Source | Six months ended March 31, 2024 | Six months ended March 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Sales of in-park recreation | $12,795,422 | $19,563,330 | (34.59)% | | Rental income | $1,028,891 | $497,882 | 106.65% | | **Total revenue** | **$13,824,313** | **$20,061,212** | **(31.09)%** | - The decrease in in-park recreation sales was mainly due to the temporary closure of Mangshi Jinsheng Amusement Park since September 2023 and increased cold and rainy weather, which led to fewer tourists[6](index=6&type=chunk) - The increase in rental income was primarily from a new rental agreement for electricity-free park attractions at Tongling West Lake Amusement World, which commenced on May 1, 2023[6](index=6&type=chunk) [Cost of Revenue](index=2&type=section&id=Cost%20of%20Revenue) Cost of revenue increased by **18.61%** to **$6.64 million** in the first half of 2024, up from **$5.60 million** in the prior-year period, primarily due to increased rental fees and depreciation costs associated with new leased assets and projects - Cost of revenue increased by **$1,042,211 (18.61%)** YoY to **$6,642,323**[7](index=7&type=chunk) - The increase was mainly driven by: (i) new leased assets from Nanping Golden Heaven Amusement Park Management Co., Ltd., and (ii) depreciation costs for the Children's Castle project and Tongling West Lake Amusement World[7](index=7&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit for the first half of 2024 was **$7.18 million**, a significant decrease from **$14.46 million** in the same period of 2023, with the overall gross margin contracting from **72.08% to 51.95%** due to lower in-park recreation revenue and increased costs Gross Profit and Margin Comparison | Metric | Six months ended March 31, 2024 | Six months ended March 31, 2023 | | :--- | :--- | :--- | | Gross Profit | $7,181,990 | $14,461,100 | | Gross Margin | 51.95% | 72.08% | - The gross margin for sales of in-park recreation specifically decreased from **71.37% to 48.09%** due to the park closure, increased maintenance and rental fees, and poor weather impacting visitor numbers[9](index=9&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses decreased by **9.13%** to **$3.66 million**, down from **$4.03 million** in the prior-year period, mainly due to a **$0.33 million** reduction in general and administrative (G&A) expenses as IPO-related professional fees were not incurred - Total operating expenses decreased by **$367,999 (9.13%)** YoY[10](index=10&type=chunk) - G&A expenses decreased by approximately **$0.33 million** due to the absence of IPO-related professional fees (attorney, audit, brokerage) that were incurred in the first half of fiscal 2023[10](index=10&type=chunk) - Selling expenses saw a minor decrease of approximately **$0.03 million** due to lower advertising fees[10](index=10&type=chunk) [Other Income and Income Tax](index=3&type=section&id=Other%20(expense)%20income,%20net) Net other income was **$471,566**, a significant positive swing from a net expense of **$47,490** in the prior year, primarily due to a gain on the disposal of property, plant, and equipment, while income tax expense decreased by **51.22%** to **$1.45 million** in line with lower pre-tax profits - Other income increased by **$519,056**, primarily due to a gain on the disposal of property, plant and equipment from Mangshi Jinsheng Amusement Park Co., Ltd[12](index=12&type=chunk) - Income tax expense decreased by **$1,520,857 (51.22%)** to **$1,448,480**[13](index=13&type=chunk) [Net Income](index=3&type=section&id=Net%20income) Net income for the first half of fiscal 2024 was **$2.54 million**, representing a **65.69% decrease** from **$7.42 million** in the same period of 2023, directly resulting from lower revenues and gross profit not fully offset by reduced operating expenses Net Income Comparison | Metric | Six months ended March 31, 2024 | Six months ended March 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income | $2,544,020 | $7,415,218 | (65.69)% | Key Financial Metrics (First Half 2024 vs. 2023) | Financial Metric | Six months ended March 31, 2024 | Six months ended March 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $13,824,313 | $20,061,212 | (31.09)% | | Gross Profit | $7,181,990 | $14,461,100 | (50.33)% | | Net Income | $2,544,020 | $7,415,218 | (65.69)% | | Earnings Per Share | $0.05 | $0.15 | (66.67)% | [Liquidity and Financial Position](index=3&type=section&id=Liquidity) As of March 31, 2024, the company's liquidity position weakened, with cash and cash equivalents decreasing to **~$0.13 million** from **~$0.25 million**, working capital turning negative to approximately **~($4.62) million** from a positive **~$0.21 million**, while total shareholders' equity increased to **~$64.29 million** Liquidity and Capital Position | Metric | As of March 31, 2024 | As of September 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | ~$0.13 million | ~$0.25 million | | Working capital | ~($4.62) million | ~$0.21 million | | Total shareholders' equity | ~$64.29 million | ~$61.05 million | [Recent Developments](index=3&type=section&id=Recent%20Developments) The company has been active with several key developments, including granting **9,800,000 Class A ordinary shares** to employees, settling a contract dispute, facing **three punitive class-action lawsuits** alleging false and misleading statements which the company denies, and temporarily closing two amusement parks for strategic and maintenance reasons, while the board concluded its internal investigation into the Hindenburg Research report - On May 9, 2024, the company granted **9,800,000 Class A ordinary shares** to certain officers, directors, and employees under its 2024 Omnibus Equity Plan[16](index=16&type=chunk) - The company is facing **three punitive class-action lawsuits** filed between December 2023 and January 2024, alleging violations of the Securities Exchange Act. The company denies wrongdoing and intends to defend itself vigorously[17](index=17&type=chunk) - Mangshi Jinsheng Amusement Park has been temporarily closed since September 2023 for strategic business development, and Qujing Jinsheng Amusement Park has been temporarily closed since July 2024 for electrical conversion and maintenance[18](index=18&type=chunk) - The Board of Directors conducted an internal investigation regarding the Hindenburg Research report and has decided to conclude the matter after considering the findings[19](index=19&type=chunk) [Company Overview](index=5&type=section&id=About%20Golden%20Heaven%20Group%20Holdings%20Ltd.) Golden Heaven Group Holdings Ltd. is a Cayman Islands-incorporated holding company that operates amusement parks, water parks, and recreational facilities in China through its local entities, offering a variety of attractions including rides, water parks, gourmet festivals, circus performances, and high-tech facilities - The Company is an offshore holding company that manages and operates amusement parks, water parks, and complementary recreational facilities through its Chinese operating entities[20](index=20&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for the six months ended March 31, 2024, detail the company's financial position, operational results, changes in equity, and cash flows, reflecting the performance trends discussed in the report [Condensed Consolidated Balance Sheets](index=6&type=section&id=GOLDEN%20HEAVEN%20GROUP%20HOLDING%20LTD.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2024, total assets were **$82.9 million**, a slight increase from **$82.2 million** as of September 30, 2023, while total liabilities decreased to **$18.6 million** from **$21.2 million** primarily due to a reduction in accounts payable and advances from customers, consequently increasing total stockholders' equity from **$61.1 million** to **$64.3 million** Key Balance Sheet Items (As of March 31, 2024 vs. Sept 30, 2023) | Balance Sheet Item | March 31, 2024 (Unaudited) | September 30, 2023 (Audited) | | :--- | :--- | :--- | | Total Current Assets | $3,869,121 | $14,736,700 | | Total Assets | $82,916,296 | $82,227,433 | | Total Current Liabilities | $8,490,118 | $14,526,649 | | Total Liabilities | $18,625,478 | $21,176,675 | | Total Stockholders' Equity | $64,290,818 | $61,050,758 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=GOLDEN%20HEAVEN%20GROUP%20HOLDING%20LTD.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) For the six months ended March 31, 2024, the company reported a net income of **$2.54 million**, a **65.7% decrease** from **$7.42 million** in the prior-year period, resulting in earnings per share (EPS) of **$0.05**, down from **$0.15**, driven by a **31.1% drop** in revenue and a lower gross margin not fully offset by a **9.1% reduction** in operating expenses Income Statement Summary (YoY) | Item | Six months ended March 31, 2024 | Six months ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $13,824,313 | $20,061,212 | | Gross Profit | $7,181,990 | $14,461,100 | | Income from Operations | $3,520,934 | $10,432,045 | | Net Income | $2,544,020 | $7,415,218 | | Earnings Per Share | $0.05 | $0.15 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=GOLDEN%20HEAVEN%20GROUP%20HOLDING%20LTD.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) Total stockholders' equity increased from **$61.05 million** at September 30, 2023, to **$64.29 million** at March 31, 2024, primarily driven by a net income of **$2.54 million** and a positive foreign currency translation adjustment of **$0.70 million** - Stockholders' equity grew to **$64,290,818** as of March 31, 2024, up from **$61,050,758** at the start of the period[30](index=30&type=chunk) - The increase was driven by net income of **$2,544,020** and a foreign currency translation gain of **$696,040**[30](index=30&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=GOLDEN%20HEAVEN%20GROUP%20HOLDING%20LTD.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended March 31, 2024, the company experienced a net cash outflow from operating activities of **$0.91 million**, a sharp reversal from a **$5.91 million** inflow in the prior-year period, mainly due to lower net income and unfavorable changes in working capital, with net cash provided by investing activities at **$1.03 million** from asset disposals, resulting in an overall cash and cash equivalents decrease of **$0.12 million**, ending at **$0.13 million** Cash Flow Summary (YoY) | Cash Flow Activity | Six months ended March 31, 2024 | Six months ended March 31, 2023 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($911,646) | $5,909,619 | | Net cash provided by investing activities | $1,029,760 | $0 | | Net cash used in financing activities | ($72,544) | ($899,965) | | **Net (decrease) increase in cash** | **($116,491)** | **$5,815,782** | | **Cash and cash equivalents, end of period** | **$129,417** | **$28,262,926** |
Golden Heaven(GDHG) - 2024 Q2 - Quarterly Report