Company Operations - Addentax Group Corp. operates primarily through its wholly owned subsidiary in China, Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd., and has ceased operations in epidemic prevention supplies as of Q1 2023[85]. - The company dissolved two subsidiaries in 2024 to focus on core businesses, receiving approval from regulatory authorities[93]. - Addentax Group Corp. is listed on the Nasdaq Capital Market under the symbol "ATXG" and operates in three main segments: garment manufacturing, logistics services, and property management[85]. Financial Performance - Total revenue for the three months ended December 31, 2024, decreased by approximately $409,134, or 27.9%, compared to the same period in 2023, primarily due to a decline in logistics services business[124]. - Gross profit for the three months ended December 31, 2024, was $82,819, representing a decrease of $79,508, or 49.0%, from $162,327 in 2023[141]. - Total revenue for the nine months ended December 31, 2024 decreased by approximately $0.6 million, or 15.7%, compared to the same period in 2023[153]. - Net loss for the three months ended December 31, 2024, was $1,085,721, a reduction of $1,521,941, or 58.4%, from a net loss of $2,607,662 in 2023[123]. - Net loss for the nine months ended December 31, 2024, was approximately $3.0 million, an improvement from a net loss of $4.0 million in 2023[179]. Revenue Breakdown - Revenue from the logistics services business contributed approximately $831,103, or 78.5%, of total revenue for the three months ended December 31, 2024, down from $1,189,004, or 81.0%, in 2023[127]. - The garment manufacturing business generated revenue of approximately $33,773, or 3.2% of total revenue for the three months ended December 31, 2024, compared to $27,015, or 1.8%, in 2023[125]. - Revenue from logistics services contributed approximately $2.3 million, or 70.2%, of total revenue for the nine months ended December 31, 2024, down from $3.4 million, or 87.5%, in 2023[155]. - Revenue from property management and subleasing business was $0.7 million, or 21.6%, of total revenue for the nine months ended December 31, 2024, up from $0.3 million, or 8.1%, in 2023[156]. Cost and Profitability - Cost of revenue for the logistics services business decreased by approximately $409,530, or 38.8%, to $646,557 for the three months ended December 31, 2024, from $1,056,087 in 2023[129]. - Gross profit margin for the logistics services business improved to 22.2% in the three months ended December 31, 2024, compared to 11.2% in 2023, due to reallocation of orders and reduced fuel costs[139]. - The gross loss for the property management and subleasing business was $107,348 for the three months ended December 31, 2024, compared to a gross profit of $16,186 in 2023, reflecting a significant decline in performance[140]. - Gross profit for the nine months ended December 31, 2024 was $614,055, representing 18.9% of total revenue, down from $802,123, or 20.8%, in 2023[152]. - Cost of revenue for garment manufacturing increased to approximately 81.2% of revenue in 2024 from 76.5% in 2023[157]. Operational Insights - The garment manufacturing segment aims to expand its customer base and improve profit, focusing on exceptional quality and timely delivery[95]. - The logistics services segment currently covers 44 cities across 10 provinces and 2 municipalities in China, with plans to develop 20 additional logistics routes in existing cities[96]. - The property management and subleasing segment provides approximately 1,300 shop spaces and 56,238 square meters of floor space, aiming to integrate resources in shopping malls and develop e-commerce bases[92][97]. - Economic uncertainty in China has increased clients' sensitivity to costs, leading to continued pricing pressure, although timely collections from customers have not yet been impacted[104]. - The company expects to improve profits in the logistics segment for the remainder of 2024[96]. Future Outlook - The company expects capacity in the garment manufacturing business to recover by the fiscal year ending 2025 due to ongoing factory facilities renewal and repairs[125]. - The CEO has indicated the intent and ability to provide additional debt or equity financing to support the company's growth and strategic objectives[185].
Addentax(ATXG) - 2025 Q3 - Quarterly Report