Hitek Global Inc. Announces Fiscal Year 2024 Financial Results
Rhea-AI Summary
Hitek Global reported a challenging fiscal year 2024, with total revenue declining to $2.9 million from $4.6 million in 2023. The company experienced a significant shift in its revenue streams, posting a net loss of $896,690 compared to a net income of $1,047,641 in 2023.
Key financial highlights:
- Hardware sales dropped to $1.7M from $2.4M
- Tax devices revenue decreased to $0.4M from $1.4M
- CIS software revenue showed slight growth to $0.8M from $0.76M
- Gross margin declined to 34.6% from 42.1%
- Cash position decreased to $7.2M from $9.3M
The company's transition reflects challenges in hardware sales and tax device services, offset partially by growth in their CIS software segment. Operating expenses increased to $2.8M from $1.8M, impacted by higher marketing costs and professional service fees from financing activities.
Positive
- CIS software revenue increased to $0.8M in 2024 from $0.76M in 2023
- Successful launch of updated CIS software in March 2024 with growth expectations
- Strong cash position with $7.2M as of December 31, 2024
- Secured $8.2M from financing activities in 2024
Negative
- Total revenue declined 37% to $2.9M from $4.6M in 2023
- Hardware sales decreased to $1.7M from $2.4M due to reduced customer demand
- Tax devices revenue dropped significantly to $0.4M from $1.4M
- Gross margin declined to 34.6% from 42.1%
- Operating expenses increased 55.6% to $2.8M from $1.8M
- Net loss of $896,690 in 2024 vs net income of $1.04M in 2023
- Cash position decreased to $7.2M from $9.3M year-over-year
- Operating cash flow worsened to -$688,538 from -$61,912 in 2023
- Credit losses increased by $362,972 due to terminated software project
News Market Reaction 1 Alert
On the day this news was published, HKIT declined NaN%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Ms. Xiaoyang Huang, Chief Executive Officer and Director of Hitek Global Inc. commented, "Fiscal year 2024 was a year of strategic transition for our company. While we are affected by changes in hardware and tax device sales, we are encouraged by the growth in our CIS software segment following its successful update. As we look ahead, we remain focused on expanding our software and services, driving innovation, and creating long-term value for our customers and shareholders."
Fiscal Year 2024 Financial Results
Revenue
Total revenue was approximately
- Revenue generated from hardware sales was approximately
$1.7 $2.4 - Revenue generated from Tax devices and service was approximately
$0.4 $1.4 million in fiscal year 2023. The decrease was due mainly toXiamen tax authorities implemented the use of electronic invoices system to replace the traditional tax control system. - Revenue generated from CIS software was approximately
$0.8 $0.76
Gross Profit and Gross Margin
Gross profit was approximately
Operating Expenses
Operating expenses were approximately
- Selling expenses were
$1,716 in fiscal year 2024, an increase by164.8% from$648 in fiscal year 2023. The increase in selling expense was mainly attributable to the increase in one-off program marketing and promotion expense. - General and administrative expenses increased by
51.3% or$931,782 $2,751,313 $1,819,531 $373,531 $362,972 $138,972
Other Income
Other income was
Net Income
Net loss was
Balance Sheet
As of December 31, 2024, the Company had cash of
Cash Flow
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities was
About Hitek Global Inc.
Hitek Global Inc., headquartered in Xiamen,
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the SEC.
For Investor and Media Inquiries Please Contact:
Tianyu Xia
Phone: +86 18519770823
Email: xiaty@xmhitek.com
The following tables summarize our results of operations for the periods indicated:
HITEK GLOBAL INC. AND SUBSIDIARIES | ||||||||
Years Ended | ||||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 7,236,798 | $ | 9,311,537 | ||||
Short-term investments | 22,932,540 | 8,837,445 | ||||||
Accounts receivable, net | 1,385,761 | 2,118,738 | ||||||
Advances to suppliers, net | 11,315 | 338,166 | ||||||
Inventories, net | 154,471 | 219,505 | ||||||
Loans receivable | 958,996 | 3,608,289 | ||||||
Prepaid expenses and other current assets | 1,506,297 | 352,919 | ||||||
Total current assets | 34,186,178 | 24,786,599 | ||||||
Non-current assets | ||||||||
Non-current accounts receivable | 2,227,089 | 4,597,214 | ||||||
Non-current advance to a third party | - | 410,509 | ||||||
Non-current loan receivable | 4,383,982 | 4,227,079 | ||||||
Property, equipment and software, net | 744,941 | 403,330 | ||||||
Operating lease right-of-use assets | - | 3,309 | ||||||
Long-term investments | - | 1,000,000 | ||||||
Total non-current assets | 7,356,012 | 10,641,441 | ||||||
Total Assets | $ | 41,542,190 | $ | 35,428,040 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 255,950 | $ | 532,130 | ||||
Advances from customers | 11,034 | 4,616 | ||||||
Loan payable | 479,498 | 493,159 | ||||||
Deferred revenue | 55,720 | 166,760 | ||||||
Taxes payable | 1,680,476 | 1,917,647 | ||||||
Accrued expenses and other current liabilities | 130,691 | 255,131 | ||||||
Operating lease liabilities | - | 3,309 | ||||||
Total current liabilities | 2,613,369 | 3,372,752 | ||||||
Non-current Liabilities | ||||||||
Loan payable, non-current | 2,054,992 | 2,113,539 | ||||||
Deferred income tax liabilities, non-current | 1,598,909 | 1,604,163 | ||||||
Total non-current liabilities | 3,653,901 | 3,717,702 | ||||||
Total Liabilities | 6,267,270 | 7,090,454 | ||||||
Commitments and Contingencies | - | - | ||||||
Shareholders' Equity | ||||||||
Ordinary Shares, par value | - | 1,439 | ||||||
Class A Ordinary Shares, | 2,111 | - | ||||||
Class B Ordinary Shares, | 819 | - | ||||||
Additional paid-in capital | 24,920,060 | 16,721,551 | ||||||
Statutory reserve | 836,215 | 836,215 | ||||||
Retained earnings | 10,491,058 | 11,387,748 | ||||||
Accumulated other comprehensive loss | (975,343) | (609,367) | ||||||
Total Shareholders' Equity | 35,274,920 | 28,337,586 | ||||||
Total Liabilities and Shareholders' Equity | $ | 41,542,190 | $ | 35,428,040 | ||||
HITEK GLOBAL INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||||||
Years Ended December 31, | ||||||||||||
2024 | 2023 | 2022 | ||||||||||
Revenues | $ | 2,904,950 | $ | 4,563,731 | $ | 6,428,608 | ||||||
Cost of revenues | (1,899,065) | (2,642,491) | (2,891,565) | |||||||||
Gross profit | 1,005,885 | 1,921,240 | 3,537,043 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 2,751,313 | 1,819,531 | 1,472,648 | |||||||||
Selling | 1,716 | 648 | 437,185 | |||||||||
Total operating expenses | 2,753,029 | 1,820,179 | 1,909,833 | |||||||||
Operating (loss) income | (1,747,144) | 101,061 | 1,627,210 | |||||||||
Other income (expense) | ||||||||||||
Government subsidies | - | 569,928 | 9,838 | |||||||||
Net investment gain (loss) | 336,241 | 330,552 | (19,363) | |||||||||
Interest income | 921,228 | 911,875 | 545,555 | |||||||||
Interest expense | (313,937) | (313,861) | (285,353) | |||||||||
Deregistration cost | (104,127) | - | - | |||||||||
Other income (expense), net | 50,796 | (5,029) | (8,924) | |||||||||
Total other income, net | 890,201 | 1,493,465 | 241,753 | |||||||||
(Loss) income before provision for income taxes | (856,943) | 1,594,526 | 1,868,963 | |||||||||
Income tax expense | 39,747 | 546,885 | 453,218 | |||||||||
Net (loss) income | $ | (896,690) | $ | 1,047,641 | $ | 1,415,745 | ||||||
Comprehensive (loss) income | ||||||||||||
Net (loss) income | $ | (896,690) | $ | 1,047,641 | $ | 1,415,745 | ||||||
Foreign currency translation loss | (365,976) | (330,116) | (1,015,447) | |||||||||
Comprehensive (loss) income | $ | (1,262,666) | $ | 717,525 | $ | 400,298 | ||||||
(Loss) earnings per ordinary share | ||||||||||||
– Basic and diluted | $ | (0.04) | $ | 0.08 | $ | 0.13 | ||||||
Weighted average number of ordinary shares outstanding | ||||||||||||
– Basic and diluted | 20,603,614 | 13,257,469 | 10,987,679 | |||||||||
HITEK GLOBAL INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
Years Ended December 31, | ||||||||||||
2024 | 2023 | 2022 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net (loss) income | $ | (896,690) | $ | 1,047,641 | $ | 1,415,745 | ||||||
Adjustments to reconcile net (loss) income to net cash | ||||||||||||
Depreciation | 259,554 | 50,662 | 21,881 | |||||||||
Amortization of right-of-use assets | - | 3,167 | - | |||||||||
Loss on disposal of property, plant and equipment | - | 1,413 | - | |||||||||
Accrued interest income from loans, net | (225,665) | (102,418) | (21,699) | |||||||||
Net investment (gain) loss | (58,130) | (208,626) | 19,363 | |||||||||
Provision for (reversal of) expected credit losses of | 366,736 | (2,325) | (6,442) | |||||||||
Provision for obsolete inventories | - | 5,559 | 2,217 | |||||||||
Deferred income tax | 39,747 | 339,332 | 177,029 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Short-term investments – trading securities | (2,612,671) | (1,696,545) | 2,418,675 | |||||||||
Accounts receivable | 2,990,258 | 567,480 | (2,490,725) | |||||||||
Accounts receivable – related party | - | 390,197 | 499,933 | |||||||||
Advances to suppliers | (8,175) | 472,219 | 560,352 | |||||||||
Deferred offering cost | - | (130,134) | 60,000 | |||||||||
Inventories | 59,802 | 194,872 | (57,899) | |||||||||
Prepaid expenses and other current assets | 65,672 | (13,028) | 89,583 | |||||||||
Accounts payable | (265,203) | (146,642) | 225,198 | |||||||||
Advances from customers | 6,640 | 4,632 | - | |||||||||
Deferred revenue | (9,389) | (787,062) | 261,856 | |||||||||
Taxes payable | (281,961) | 291,578 | 488,419 | |||||||||
Operating lease liabilities | - | (3,167) | - | |||||||||
Due to related parties | - | (584) | (3,320) | |||||||||
Accrued expenses and other current liabilities | (119,063) | (340,133) | 163,884 | |||||||||
Net cash (used in) provided by operating activities | (688,538) | (61,912) | 3,824,050 | |||||||||
Cash flows from investing activities | ||||||||||||
Advance payment for software development | (290,488) | (339,309) | (117,617) | |||||||||
Loans to third parties | (2,899,088) | (11,260,542) | (5,498,997) | |||||||||
Repayment from third-party loans | 5,338,780 | 8,830,933 | 199,463 | |||||||||
Prepayment for office renovation | - | (150,156) | - | |||||||||
Purchases of property and equipment | - | (186,499) | - | |||||||||
Purchases of held-to-maturity investments | (18,200,000) | (11,000,000) | (1,932,080) | |||||||||
Redemption of held-to-maturity investments | 7,500,000 | 7,159,018 | - | |||||||||
Deposit for acquisition | (1,010,000) | - | - | |||||||||
Net cash used in investing activities | (9,560,796) | (6,946,555) | (7,349,231) | |||||||||
Cash flows from financing activities: | ||||||||||||
Borrowing from third parties | - | - | 2,749,498 | |||||||||
Proceeds from issuance of ordinary shares | 8,200,000 | 15,142,902 | - | |||||||||
Net cash provided by financing activities | 8,200,000 | 15,142,902 | 2,749,498 | |||||||||
Effect of exchange rate changes on cash | (25,405) | (26,058) | (112,465) | |||||||||
Net (decrease) increase in cash | (2,074,739) | 8,108,377 | (888,148) | |||||||||
Cash at beginning of the year | 9,311,537 | 1,203,160 | 2,091,308 | |||||||||
Cash at end of the year | $ | 7,236,798 | $ | 9,311,537 | $ | 1,203,160 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for income taxes | $ | 79,138 | $ | 36,504 | $ | 45,002 | ||||||
Cash paid for interest | 51,420 | 287,706 | 263,655 | |||||||||
Non-cash transactions: | ||||||||||||
Deferred offering cost | $ | - | $ | 1,049,367 | $ | - | ||||||
Operating right-of-use assets recognized for related | $ | - | $ | - | $ | 6,820 | ||||||
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SOURCE HITEK GLOBAL INC
FAQ
What caused Hitek Global (HKIT) revenue to drop from $4.6M to $2.9M in 2024?
How much did Hitek Global (HKIT) lose in fiscal year 2024?
Why did Hitek Global (HKIT) gross margin drop to 34.6% in 2024?
What is driving growth in Hitek Global's (HKIT) CIS software segment?
How much cash does Hitek Global (HKIT) have as of December 2024?
