Decent Holding Inc. Reports Full Year 2024 Financial Results

Rhea-AI Summary

Decent Holding (Nasdaq: DXST), a Chinese wastewater treatment provider, reported its fiscal year 2024 results with a 22.2% revenue increase to $11.5 million. While gross profit remained stable at $3.2 million, gross margin declined to 27.8% from 34.0%. Net income rose to $2.1 million from $1.9 million year-over-year.

Revenue breakdown shows:

• Wastewater Treatment Service revenue up 4.8% to $2.5 million
• River Water Quality Management revenue increased 54.7% to $6.9 million
• Product Sales declined 17.2% to $2.2 million

Operating expenses decreased by 29.0% to $0.7 million, reflecting improved operational efficiency. The company plans to invest in innovative technologies and expand its market presence in sustainable water management solutions.

Positive

• Revenue growth of 22.2% to $11.5 million
• Net income increased to $2.1 million from $1.9 million
• Operating expenses reduced by 29% to $0.7 million
• River Water Quality Management revenue up 54.7%
• Other Related Revenues grew 121.2% with 100% gross margin

Negative

• Gross margin declined to 27.8% from 34.0%
• Product Sales revenue decreased 17.2% to $2.2 million
• Product Sales gross margin dropped to 35.8% from 53.8%
• Higher proportion of lower-margin projects affecting overall profitability

Insights

Financial Analyst

Decent Holding reported a solid performance for FY2024 with $11.5 million in revenue, representing 22.2% year-over-year growth despite operating in China's challenging economic environment. The company successfully expanded its two core segments, with River Water Quality Management showing particularly strong growth of 54.7%.

The earnings quality presents a more nuanced picture. While net income increased to $2.1 million from $1.9 million, overall gross margin contracted significantly from 34.0% to 27.8%. This margin compression stems from a revenue mix shift toward lower-margin civil works projects in the River Water Quality Management segment, alongside concerning deterioration in the Product Sales segment, where margins fell from 53.8% to 35.8%.

Management's cost discipline is evident in the 29.0% reduction in operating expenses, which helped offset margin pressures. The Wastewater Treatment Service segment shows encouraging signs with margin improvement to 25.2%, indicating potential operational efficiencies taking hold in this core business.

With a market cap of just $17.55 million and the stock trading at a P/E ratio of approximately 8.4x based on FY2024 earnings, DXST appears undervalued relative to the water treatment sector. However, investors should carefully monitor the company's ability to reverse margin deterioration in future quarters while maintaining its impressive revenue growth trajectory.

YANTAI, China, March 10, 2025 (GLOBE NEWSWIRE) -- Decent Holding Inc. (Nasdaq: DXST) (“Decent“ or the ”Company“), an established wastewater treatment services provider in China, today announced its financial results for the fiscal year ended October 31, 2024.

Full Year 2024 Financial Highlights

• Total revenue for the full year of 2024 increased by 22.2% to US$11.5 million, from US$9.4 million in the prior year.
  
  
• Gross profit for the full year of 2024 remained stable at $3.2 million, even though the gross profit margin declined to 27.8% from 34.0% in the prior year.
  
  
• Net income for the full year of 2024 increased to $2.1 million, compared with $1.9 million in the prior year.
  
  
• Operating expenses for the full year of 2024 decreased by 29.0% to $0.7 million from $1.0 million in the prior year, benefiting from improved operational efficiency.

Mr. Dingxin Sun, Chairman of the Company commented: “In fiscal year 2024, we achieved a significant 22.2% increase in total revenue, which reflects our resilience and adaptability in navigating a dynamic economic environment. This growth was driven by successful strategies across our business segments, particularly in wastewater treatment and river water quality management.”

“Despite this positive revenue trajectory, our gross profit margin approximately to about 27.8% in fiscal year 2024. This decline was largely due to a higher proportion of revenue derived from lower-margin projects. Nevertheless, we maintained a stable gross profit of $3.2 million, underscoring our commitment to profitability even in challenging conditions. We are particularly encouraged by the 121.2% increase in other related revenues, which maintained a 100% gross profit margin. This demonstrates our ability to identify and capitalize on new opportunities without incurring additional costs.”

Mr. Sun added: “Our focus on operational efficiency was reflected in the approximately 29% reduction in total operating expenses, which has been instrumental in sustaining our profitability. As a result, net income rose to $2.1 million, compared with $1.9 million in the prior year.”

“Looking ahead, we remain committed to enhancing our service offerings and optimizing our revenue mix to improve margins. We plan to invest in innovative technologies and expand our market presence, particularly in high-growth areas such as sustainable water management solutions. By fostering strategic partnerships and leveraging our expertise, we aim to drive long-term growth and create additional value for our stakeholders.”

Selected Financial Results

Total revenue

Total revenue increased by 22.2%, or $2.1 million, to $11.5 million for the fiscal year ended October 31, 2024, compared with $9.4 million for the fiscal year ended October 31, 2023, demonstrating the Company’s resilience and adaptability to maintain profitability in a fluctuating economic environment. Specifically:

• Revenue from Wastewater Treatment Service for the fiscal year ended October 31, 2024 rose to $2.5 million from $2.4 million for the fiscal year ended October 31, 2023, reflecting a 4.8% increase driven by new customer acquisitions. Cost of revenue for wastewater treatment service was $1.8 million in fiscal year 2024, a 0.2% increase from 2023. This resulted in an increase in gross profit margins of 15.7% to 25.2 % for fiscal year 2024 from 21.8% for fiscal year 2023.
  
  
• Revenue from River Water Quality Management for the fiscal year ended October 31, 2024 rose significantly to $6.9 million, a 54.7% increase from $4.4 million in fiscal year 2023, driven by successful bids and project completions. However, most projects involved civil works like dredging and stormwater networks, which typically yield lower margins. Consequently, the gross profit margin declined to 26.1% in fiscal year 2024 from 28.6% in fiscal year 2023.
  
  
• Revenue from Product Sales for the fiscal year ended October 31, 2024, declined by 17.2% to approximately $2.2 million, down from $2.6 million in fiscal year 2023. This decrease was mainly due to reduced procurement from local enterprises, particularly in microbial inoculum used for river water quality management. Cost of revenue for this segment increased by 15.07% to about $1.4 million in fiscal year 2024, due to upgrades in pharmaceutical formulations. As a result, gross profit fell by 18.0% to approximately $0.78 million, compared with $1.4 million in fiscal year 2023, leading to a gross profit margin of 35.8%, compared with 53.8% in the prior year.
  
  
• Other Related Revenues increased by 121.2% to $16,700 for the fiscal year ended October 31, 2024, compared with $7,549 in fiscal year 2023, maintaining a 100% gross profit margin with no associated costs.

Cost of Revenue

Total cost of revenue for the fiscal years ended October 31, 2024, and 2023, was $8.3 million and $6.2 million, respectively. The increase was driven by higher revenues and the reclassification of maintenance guarantee expenses for wastewater treatment and river water quality management projects from selling expenses to cost of revenue.

Gross Profit and Margin

Gross profit for the year ended October 31, 2024, was $3.2 million, remaining relatively stable compared with fiscal year 2023. Gross margin declined to 27.8% in fiscal year 2024 from 34.0% in fiscal year 2023, primarily due to a greater proportion of revenue coming from lower-margin wastewater treatment and river water quality management projects.

Operating Expenses

Total operating expenses decreased by 29.0% to $0.7 million for the fiscal year ended October 31, 2024, from $1.0 million in fiscal year 2023. The decrease is primarily attributed to a decrease in selling expenses due to reduced marketing costs from improved reputation, the reclassification of maintenance guarantee expenses to costs of revenue, and a decrease in both general and administrative expenses and research and development expenses.

Net income

As a result of the factors described above, net income for the fiscal years ended October 31, 2024 and 2023 was $2.1 million and $1.9 million, respectively.

About Decent Holding Inc.

Decent Holding Inc. specializes in the provision of wastewater treatment by cleansing the industrial wastewater, ecological river restoration and river ecosystem management by enhancing the water quality, as well as microbial products primarily used for pollutant removal and water quality enhancement, through the Company’s subsidiary, Shandong Dingxin Ecology Environmental Co., Ltd. For more information, please visit: https://ir.dxshengtai.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 all other factors discussed in the ”Risk Factors“ section of the Company’s latest Annual Report on Form 20-F filed with the SEC, available for review at www.sec.gov. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For investor and media inquiries, please contact:

Wealth Financial Services LLC

Connie Kang, Partner

Email: ckang@wealthfsllc.com

Tel: +86 1381 185 7742 (CN)

DECENT HOLDING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Stated in US dollars, except for share and per share data)
		As of October 31, 2024				As of October 31, 2023
ASSETS
CURRENT ASSETS
Cash		$	407,031			$	1,325,458
Accounts receivable, net			8,702,303				2,178,923
Prepayment, net			7,699				530,215
Other receivables			11,410				22,741
Contract assets			603,979				144,876
Due from related parties			40,154				514
Inventories			134				187
Total current assets			9,772,710				4,202,914
NON-CURRENT ASSETS
Deferred IPO costs			967,793				531,491
Other long-term assets			—				15,888
Operating lease assets, net			67,934				118,181
Finance lease assets, net			43,520				56,853
Property and equipment, net			242,185				266,987
Intangible assets, net			6,088				6,264
Deferred tax asset			136,799				142,957
Total non-current assets			1,464,319				1,138,621
TOTAL ASSETS		$	11,237,029			$	5,341,535
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	1,851,723			$	87,591
Due to related parties			63,222				106,789
Payroll payable			23,401				5,724
Tax payables			821,010				434,631
Other payables			3,353,963				1,749,615
Finance lease liabilities – current			21,893				23,235
Operating lease liabilities – current			6,382				52,094
Estimated warranty liabilities			64,576				26,513
Total current liabilities			6,206,170				2,486,192
NON-CURRENT LIABILITIES
Finance lease liabilities – non-current			—				21,299
Operating lease liabilities – non-current			13,550				19,390
Total non-current liabilities			13,550				40,689
TOTAL LIABILITIES			6,219,720				2,526,881
SHAREHOLDERS’ EQUITY
Ordinary shares, US$0.0001 par value, authorized 500,000,000 shares as of October 31, 2024 and 2023; 15,000,000 shares issued and outstanding as of October 31, 2024 and 2023, respectively			1,500				1,500
Subscription receivable			(1,500	)			(1,500	)
Additional paid-in capital			1,210,094				1,210,094
Statutory reserve			402,621				188,144
Retained earnings			3,551,019				1,662,139
Accumulated other comprehensive loss			(146,425	)			(245,723	)
Total shareholders’ equity			5,017,309				2,814,654
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	11,237,029			$	5,341,535

DECENT HOLDING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Stated in US dollars, except for share and per share data)
		For The Years Ended October 31,
		2024				2023				2022
REVENUE
Wastewater treatment revenue		$	2,468,097			$	2,355,126			$	650,308
River water quality management revenue			6,864,631				4,436,214				1,910,425
Product sales revenue			2,192,864				2,648,445				1,008,042
Others			16,700				7,549				24,927
TOTAL REVENUE			11,542,292				9,447,334				3,593,702
COST OF REVENUE
Wastewater treatment revenue			1,845,434				1,841,604				482,554
River water quality management revenue			5,075,552				3,165,712				1,227,365
Product sales revenue			1,408,894				1,224,396				229,894
TOTAL COST OF REVENUE			8,329,880				6,231,712				1,939,813
GROSS PROFIT			3,212,412				3,215,622				1,653,889
OPERATING EXPENSES
Selling expenses			16,489				70,128				32,517
General and administrative expenses			662,158				851,130				1,061,967
Research and development expenses			28,981				122,441				60,883
Impairment loss			33,841				—				—
Total operating expenses, net			741,469				1,043,699				1,155,367
NET PROFIT FROM OPERATIONS			2,470,943				2,171,923				498,522
OTHER INCOME (EXPENSES)
Interest income			12,343				5,420				1,341
Interest expense			—				(6,017	)			(86,671	)
Other income			851				5,214				18,257
Other expense			(13	)			—				—
Total other income (expenses), net			13,181				4,617				(67,073	)
NET INCOME BEFORE TAXES			2,484,124				2,176,540				431,449
Income tax expenses			(380,767	)			(316,927	)			(59,014	)
NET INCOME			2,103,357				1,859,613				372,435
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment			99,298				(67,065	)			(131,378	)
COMPREHENSIVE INCOME		$	2,202,655			$	1,792,548				241,057
Weighted average number of shares outstanding during the year – basic and diluted			15,000,000				15,000,000				15,000,000
Earnings per Ordinary Share – basic and diluted		$	0.14			$	0.12				0.02

DECENT HOLDING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Stated in US dollars, except for share and per share data)
		For The Years Ended October 31,
		2024				2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	2,103,357			$	1,859,613			$	372,435
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses and bad debts			(95,193	)			132,561				400,411
Provision for inventory obsolescence			185				26,585				—
Gain from the disposal of property and equipment			—				(5,214	)			(18,236	)
Depreciation and amortization			76,594				45,455				19,527
Impairment of property and equipment			33,841				—				—
Amortization of finance lease assets			14,781				15,098				1,271
Non-cash operating lease expenses			53,044				49,446				45,574
Deferred income tax effect			10,054				(27,991	)			(53,400	)
Estimated warranty expenses			36,971				27,462				—
Changes in operating assets and liabilities:
Accounts receivable			(6,318,575	)			(626,233	)			130,082
Prepayment - third parties			544,461				1,626,312				(2,311,240	)
Prepayment - related party			—				—				101,708
Other receivables			12,393				(15,197	)			13,402
Contract assets			(450,769	)			(150,063	)			—
Due from related party			96				7,995				(7,752	)
Inventories			(127	)			1,775,773				479,331
Deferred expenses			16,178				(16,457	)			—
Tax payables			370,714				344,918				112,414
Other payables			1,540,827				1,015,988				401,304
Accounts payable			1,745,087				87,085				(371,389	)
Contract liabilities			—				(4,591,413	)			2,397,667
Operating lease liabilities			(53,044	)			(52,396	)			(52,580	)
Amount due to related parties			(20,643	)			56,628				(271,800	)
Payroll payable			17,446				(1,709	)			2,193
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			(362,322	)			1,584,246				1,390,922
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment			(78,133	)			(153,794	)			(241,211	)
Proceed of disposal of property and equipment			—				—				21,995
Purchase of intangible assets			—				—				(7,559	)
Payment to acquire finance lease assets			—				—				(13,615	)
Loan made to related parties			(39,348	)			—				(1,472,562	)
Repayment from related parties			—				10,759				2,312,566
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES			(117,481	)			(143,035	)			599,614
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred IPO costs			(417,487	)			(207,969	)			(365,786	)
Proceeds of bank loans			—				—				1,510,204
Repayment of bank loans			—				(1,867,293	)			(1,637,652	)
Principal payment for obligation under finance leases			(23,659	)			(24,067	)			(2,142	)
Proceeds from related parties			—				132,084				29,630
Repayment to related parties			(25,468	)			(133,924	)			(78,609	)
CASH USED IN FINANCING ACTIVITIES			(466,614	)			(2,101,169	)			(544,355	)
EFFECT OF EXCHANGE RATE ON CASH			27,990				20,058				(228,683	)
NET CHANGE IN CASH			(918,427	)			(639,900	)			1,217,498
CASH AT BEGINNING OF YEAR			1,325,458				1,965,358				747,860
CASH AT END OF YEAR		$	407,031			$	1,325,458				1,965,358
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes		$	—			$	—				—
Interest		$	—			$	6,017				86,671
NON-CASH TRANSACTIONS
Operating lease assets obtained in exchange for lease obligations		$	—			$	32,742				152,632
Finance lease assets obtained in exchange for lease obligations			—				—				77,098

FAQ

What was DXST's revenue growth in fiscal year 2024?

Decent Holding (DXST) reported a 22.2% revenue increase to $11.5 million in fiscal year 2024, up from $9.4 million in 2023.

How did DXST's River Water Quality Management segment perform in 2024?

The segment revenue increased 54.7% to $6.9 million, though gross margin declined to 26.1% from 28.6% due to lower-margin civil works projects.

What caused DXST's gross margin decline in fiscal 2024?

Gross margin fell to 27.8% from 34.0% due to a higher proportion of revenue from lower-margin wastewater treatment and river water quality management projects.

How much did DXST reduce its operating expenses in 2024?

Operating expenses decreased by 29.0% to $0.7 million from $1.0 million, due to reduced marketing costs and improved operational efficiency.

What was DXST's net income for fiscal year 2024?

Net income increased to $2.1 million in fiscal year 2024, compared to $1.9 million in the previous year.