Decent Holding Inc. Reports Full Year 2024 Financial Results

March 10, 2025 08:30 ET | Source: Decent Holding Inc. 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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Stated in US dollars, except for share and per share data) As ofOctober 31,2024 As ofOctober 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME(Stated in US dollars, except for share and per share data) For The Years EndedOctober 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Stated in US dollars, except for share and per share data) For The Years EndedOctober 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

Decent Holding Inc. Reports Full Year 2024 Financial Results

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