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Jianzhi Education Technology Group Company Limited Reports Fiscal Year 2022 Financial Results

BEIJING, Sept. 29, 2023 (GLOBE NEWSWIRE) --  Jianzhi Education Technology Group Company Limited (the “Company” or “Jianzhi”) (NASDAQ: JZ), a leading provider of digital educational content in China, today announced its financial results for fiscal year 2022.

Yong Hu, CEO of the Company commented: “In the fiscal year 2022, we remained committed to meeting China's demand for high-quality vocational training resources and solidified our position as a leading digital educational content provider in the country. During the year ending December 31, 2022, our company achieved a revenue growth of about 6.9%, reaching approximately RMB505.7 million, compared to about RMB473.2 million in 2021. This growth was primarily driven by a significant increase in revenue from IT related solutions and services, which saw a substantial increase of RMB192.6 million ($US27.9 million), representing a growth rate of 178.1%.”

“Though our general and administrative expenses significantly increased in the past year, affecting our overall profitability to some extent, it is important to note that these expenses were primarily due to non-cash factors, including increased impairment expenses related to licensing copyrights and goodwill, as well as changes in provisions for doubtful accounts, mainly due to payment delays from educational content customers caused by the impact of COVID-19. We expect these factors that led to the increase to cease as we consolidate our market leadership and expand content promotion and distribution with our partners, thereby not affecting the company's overall performance in the future.”

“With our expertise in vocational education and strong content development capabilities, we continued to build a comprehensive digital education content database in 2022. Our library comprises over 39,000 online videos and video courses, totaling approximately 10,080 hours, with over 75.8% of the content being self-developed. Our content covers a wide range of professional development topics, including employability skills, entrepreneurship guidance, professional skill training, skill enhancement, and professional certification exams, to meet the growing demand for online educational content.”

“In 2022, we continued to strengthen our collaboration with telecom operators. For example, the monthly subscription purchase volume via telecom operators of our own mobile video package product ‘Fish Learning launched the fourth quarter of 2017 reached approximately 31.4 million by December 31, 2022, and total monthly subscription purchases were approximately 2.8 million for the years ended December 31, 2022. We expect to continue leveraging the telecom operator’s platform to promote our content and provide subscription services through our ‘Fish Learning’ mobile application. We also collaborated with another telecom operator in China to offer educational content redemption services for their mobile users. Approximately 3.4 million times course redemptions were made in fiscal year 2022. This arrangement generated revenue for us through point rewards paid by the telecom operator's subsidiary.”

“By December 31, 2022, we received over 5.9 million monthly subscriptions from our Light Class mobile video package product which we launched with telecom operator partner since in 2019, more than 570 quarterly subscriptions, and around 0.2 million annual subscriptions obtained from WeChat users and through the partnership.”

“In addition, we also collaborate with third-party content providers to supplement our own content database. These agreements allow us to use their educational videos and we aim to expand such partnerships.”

“Looking forward we are encouraged by our revenue growth and remain focused on optimizing our operations, improving the quality of our educational content, and exploring opportunities for further growth in the IT related solution services sector. We will keep committed to enhancing our performance and delivering value to our stakeholders.”

Fiscal Year 2022 Financial Results:
The following table sets forth a summary of our (including the VIEs’) consolidated results of operations for the years indicated, both in absolute amounts and as percentages of total income from us and the VIEs.

  For the Years Ended December 31,
  2021  2022  
  RMB RMB% Change
 (in RMB million, except earnings per share; differences due to rounding)     
Net revenues 473.25  505.72 6.86%
Gross profit (loss) 104.20  (5.54(105.32%)
Gross (loss) margin  22.02% (1.1%) N/A 
Income (loss) from operations 50.79  (207.45)(508.45%)
Net income (loss) 52.93  (196.58)(471.40%)
Earnings (loss) per share – basic and diluted 0.43  (1.68)(490.70%)

Net Revenues
Net revenue increased by 6.9% from RMB473.2 million for the year ended December 31, 2021 to RMB505.7 million (US$73.3 million) for the year ended December 31, 2022. This increase was primarily driven by the net effects of an increase of RMB192.6 million (US$27.9 million) in revenue generated from IT related solution services, partially net off by a decrease of RMB160.2 million (US$23.2 million) in net revenues from the provision of educational content services and other services.

  • Net revenue from the educational content service and other services decreased by RMB160.2 million (US$23.2 million) from RMB365.1 million for the year ended December 31, 2021 to RMB204.9 million (US$29.7 million) for the year ended December 31, 2022. Because there is constant need for updating and developing educational content, the Company faced the risk of content becoming outdated before generating profits. Therefore In 2022, Jianzhi adopted conservative strategies, resulting in a significant decline in revenues and lost subscriptions. The decrease was primarily due to the absence of new courses and attractive content, leading to decreased subscriptions from end customers.

  • Net revenue from IT related solution services increased by RMB192.6 million (US$27.9 million), or 178.1% from RMB108.2 million for the year ended December 31, 2021 to RMB300.8 million (US$43.6 million) for the year ended December 31, 2022. The increase was primarily attributable to acquisition of a cloud-based customer in the year of 2022 which contributed revenues of RMB 197.5 million (US$28.6 million) in IT procurement and assembling of equipment.

Cost of Revenues
Cost of revenue increased by 38.5% from RMB369.1 million for the year ended December 31, 2021 to RMB511.3million (US$74.1 million) for the year ended December 31, 2022. The increase of cost of revenues was primarily in line with the increase of revenues in IT related solution services. Compared with the revenue growth, the higher percentage of increase in cost of revenues was mainly attributable to the high equipment purchase cost we incurred for IT procurement and assembling projects during the year ended December 31, 2022.

Gross profit (loss)
Due to the aforementioned factors, gross profit declined from RMB104.2 million in 2021 to a gross loss of RMB5.5 million (US$0.8 million) in 2022. The decrease was mainly due to the decrease in the gross profits margin for IT related solution services for the year ended December 31, 2022, because we completed procurement and assembling equipment projects with contract value of RMB10.8 million (US$1.7 million) for the new customer, in which we incurred significant equipment purchasing cost, resulting in relatively lower gross profit margin.

Operating Expenses
Total operating expenses rose from RMB53.4 million in 2021 to RMB202.6million (US$29.4 million) in 2022.

  • Sales and marketing expenses decreased from RMB7.6 million in 2021 to RMB7.1 million (US$1.0 million) in 2022. This decrease was mainly driven by a decrease of RMB1.3 million (US$0.2 million) in salary and welfare expenses because we laid off certain salespersons and reduced marketing and promotion for educational content services, and there was a decrease of $0.7 million in travel and entertainment expenses as a result of decrease in salespersons, partially net off by an increase of RMB1.3 million (US$0.2 million) in the service fee which were used in tendering for IT solution service customers.

  • General and administrative expenses increased from RMB19.5 million in 2021 to RMB179.2 million (US$26.0 million) in 2022. This increase was caused by several factors, including an impairment of licensed copyrights due to outdated educational content, impairments of goodwill and customer relationships related to an acquisition, and changes in allowance of doubtful accounts due to delayed payments from educational content customers affected by COVID-19.

  • Research and development expenses decreased from RMB26.4 million in 2021 to RMB15.6 million (US$2.3 million) in 2022. This decrease was primarily due to reductions in salary and welfare expenses and outsourced labor costs as the VIEs reduced expenditures on the development of new educational content.

Income Tax Expenses
Income tax expenses changed from RMB4.3 million for the year ended December 31, 2021 to income tax benefits of RMB11.0 million (US$1.6 million) for the year ended December 31, 2022, because the Company incurred net operating losses during the year ended December 31, 2022 which could be carried forward for the next five years.

Net Income (Loss)
As a result of the foregoing, the Company reported net loss of RMB196.6 million (US$28.5 million) for the year ended December 31, 2022 compared to net income of RMB52.9 million for the year ended December 31, 2021.

Recent Development

On November 28, 2022, the Company announced its subsidiary Shanghai Ang’you Internet Technology Co., Ltd. has entered into strategic cooperation agreement with Jinqiao Management Bureau of Shanghai Pilot Free Trade Zone on its vocational training online platform.

On November 14, 2022, the Company announced it entered into a “Ten Schools and 100 Enterprises Action Plan” strategic cooperation agreement with Modern Industry-Education Integration Promotion Center of Shanghai Pudong New Area (the “Center”), to jointly develop initiatives to strengthen collaboration between local governments, schools and enterprises in order to cultivate cross-border e-commerce talents and create a platform ecosystem for modern vocational education (the “Cooperation”).

About Jianzhi Education Technology Group Company Limited

Headquartered in Beijing and established in 2011, Jianzhi is a leading provider of digital educational content in China and has been committed to developing educational content to fulfill the massive demand for high-quality, professional development training resources in China. Jianzhi started operations by providing educational content products and IT services to higher education institutions. Jianzhi also provides products to individual customers. Leveraging its strong capabilities in developing proprietary professional development training content and success in consolidating educational content resources within the industry, Jianzhi has successfully built up a comprehensive, multi-dimensional digital educational content database which offers a wide range of professional development products. Jianzhi embed proprietary digital education content into the self-developed online learning platforms, which are provided to a wide range of customers through its omni-channel sales system. Jianzhi is also fully committed to the digitalization and informatization of the education sector in China. For more information, please visit:

Safe Harbor Statement

This press release (the “Press Release”) contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this Press Release is as of the date of this Press Release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Janice Wang
WFS Investor Relations Inc.
Phone: +86 13811768559
+1 628 283 9214

(Amounts in Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)

  December 31,
  December 31,
  December 31,
  RMB  RMB  US$ 
Current assets:         
Cash and cash equivalents  61,266,782   65,055,278   9,432,129 
Accounts receivable, net  104,775,266   17,173,021   2,489,854 
Inventories  1,960,277   399,439   57,913 
Deferred offering expenses  8,494,583       
Due from a related party  2,473,750   1,051,869   152,507 
Short-term prepayments  288,101,452   254,493,399   36,898,074 
Short-term investments  11,430,000   4,080,000   591,544 
Prepaid expenses and other current assets  5,123,221   9,518,326   1,380,029 
Total current assets  483,625,331   351,771,332   51,002,050 
Non-current assets:            
Right-of-use assets, net  300,024       
Deferred tax assets, net  388,321   9,176,875   1,330,522 
Property and equipment, net  214,717   153,880   22,310 
Educational contents, net  206,695,356   214,441,814   31,091,140 
Intangible assets, net  17,187,208       
Goodwill  7,712,011       
Long-term prepayments  143,494,187   151,779,105   22,005,902 
Total non-current assets  375,991,824   375,551,674   54,449,874 
Total assets  859,617,155   727,323,006   105,451,924 
Current liabilities:            
Accounts payable  24,286,309   8,037,004   1,165,256 
Contract liabilities  327,299,227   290,028,010   42,050,109 
Salary and welfare payable  3,411,486   2,302,646   333,852 
Income taxes payable  3,743,247   1,170,795   169,749 
Value added tax (“VAT”) and other tax payable  2,669,408   4,063,389   589,136 
Other payables  5,276,472   2,658,243   385,409 
Lease liabilities, current  295,367       
Amount due to related parties  71,707,642   52,711,457   7,642,443 
Total current liabilities  438,689,158   360,971,544   52,335,954 
Non-current liabilities:            
Deferred tax liabilities  2,191,500       
Total non-current liabilities  2,191,500       
Total liabilities  440,880,658   360,971,544   52,335,954 

  December 31,
  December 31,
  December 31,
  RMB  RMB  US$ 
Commitments and contingencies         
Mezzanine equity:         
Redeemable ordinary shares (US$0.0001 par value; 11,110,000 and nil shares issued and outstanding as of December 31, 2021 and 2022, respectively)*  45,984,876       
Shareholders’ equity            
Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized, 100,000,000 shares and 121,110,000 issued and outstanding as of December 31, 2021 and 2022)*  63,291   77,747   12,111 
Additional paid-in capital  54,045,908   242,093,942   35,099,483 
Statutory reserves  23,599,304   23,599,304   3,421,577 
Retained earnings  280,983,836   81,822,029   11,863,081 
Accumulated other comprehensive income  400,233   2,520,630   365,457 
Total Jianzhi Education Technology Group Company Limited’s shareholders’ equity  359,092,572   350,113,652   50,761,709 
Noncontrolling interests  13,659,049   16,237,810   2,354,261 
Total shareholders’ equity  372,751,621   366,351,462   53,115,970 
Total liabilities, mezzanine equity and shareholders’ equity  859,617,155   727,323,006   105,451,924 

(Amounts in Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)

  For the Years Ended December 31, 
  2020  2021  2022  2022 
Net revenues  404,931,954   473,247,283   505,724,311   73,323,133 
Cost of revenues  (275,790,112)  (369,052,134)  (511,265,334)  (74,126,506)
Gross profit (loss)  129,141,842   104,195,149   (5,541,023)  (803,373)
Operating expenses:                
Sales and marketing expenses  5,031,526   7,576,963   7,087,625   1,027,609 
General and administrative expenses  26,054,063   19,476,375   179,249,830   25,988,783 
Research and development expenses  15,584,738   26,355,055   15,568,768   2,257,259 
Total operating expenses  46,670,327   53,408,393   201,906,223   29,273,651 
Income (loss) from operations  82,471,515   50,786,756   (207,447,246)  (30,077,024)
Other income (expenses):                
Investment income  407,827   569,737   603,058   87,435 
Interest income (expenses), net  53,596   (892,906)  (2,088,467)  (302,799)
Other expenses  (19,614)  (12,563)  (286,522)  (41,539)
Government grants  4,482,816   6,753,388   1,656,077   240,109 
Total other income, net  4,924,625   6,417,656   (115,854)  (16,794)
Income (loss) before income tax  87,396,140   57,204,412   (207,563,100)  (30,093,818)
Income tax (expense) benefits  (485,749)  (4,273,788)  10,980,054   1,591,958 
Net income (loss)  86,910,391   52,930,624   (196,583,046)  (28,501,860)
Net income attributable to noncontrolling interests  4,586,492   4,672,355   2,578,761   373,885 
Net income (loss) attributable to the Jianzhi Education Technology Group Company Limited’s shareholders  82,323,899   48,258,269   (199,161,807)  (28,875,745)
Net income (loss)  86,910,391   52,930,624   (196,583,046)  (28,501,860)
Other comprehensive (loss) income:                
Foreign currency translation adjustments  (35,391)  211,494   2,120,397   307,429 
Total other comprehensive (loss) income  (35,391)  211,494   2,120,397   307,429 
Total comprehensive income (loss)  86,875,000   53,142,118   (194,462,649)  (28,194,431)
Net comprehensive income attributable to noncontrolling interests  4,586,492   4,672,355   2,578,761   373,885 
Comprehensive income (loss) attributable to the Jianzhi Education Technology Group Company Limited’s shareholders  82,288,508   48,469,763   (197,041,410)  (28,568,316)
Earnings (loss) per share                
Basic and diluted*  0.74   0.43   (1.68)  (0.24)
Weighted average number of shares                
Basic and diluted*  111,110,000   111,110,000   118,512,959   118,512,959 

(Amounts in Renminbi (“RMB”) and U.S. dollars (“US$”)

  For the Years Ended December 31, 
  2020  2021  2022  2022 
Cash flows from operating activities:            
Net income (loss)  86,910,391   52,930,624   (196,583,046)  (28,501,860)
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation of property and equipment  538,303   78,000   60,837   8,821 
Amortization of educational contents  24,375,147   45,296,565   91,542,454   13,272,408 
Impairment of educational contents          106,182,780   15,395,056 
Amortization of intangible assets  7,805,096   6,656,298   16,840,435   2,441,634 
Impairment of intangible assets          12,139,226   1,760,022 
Impairment of goodwill          7,712,011   1,118,136 
Amortization of operating lease right-of-use assets  3,592,290   2,362,967   300,024   43,499 
Provision (Reversal of provision) for doubtful accounts  210,433   (119,539)  34,901,498   5,060,242 
Deferred tax benefit  (45,415)  (649,078)  (10,980,054)  (1,591,958)
Changes in operating assets and liabilities:                
Accounts receivable  (31,439,946)  10,148,705   52,700,747   7,640,890 
Inventories  1,877,720   15,655   1,560,838   226,300 
Prepaid expenses and other current assets  357,319   (2,197,407)  3,127,291   453,415 
Short-term prepayments  12,940,022   (285,437,271)  33,608,121   4,872,720 
Accounts payable  7,921,537   1,059,057   (16,249,305)  (2,355,928)
Salary and welfare payable  415,648   9,831   (1,108,840)  (160,767)
Contract liabilities  (9,365,507)  319,904,579   (37,271,217)  (5,403,819)
Income taxes payable  (903,026)  2,822,268   (2,572,452)  (372,970)
Value added tax (“VAT”) and other tax payable  (4,325,138)  (1,122,235)  1,393,981   202,108 
Other payables  455,342   (1,964,796)  (2,787,853)  (404,202)
Lease liabilities  (3,566,734)  (2,020,636)  (295,367)  (42,824)
Net cash provided by operating activities  97,753,482   147,773,587   94,222,109   13,660,923 
Cash flows from investing activities:                
Purchase of short-term investments  (140,145,000)  (24,405,127)  (3,850,000)  (558,198)
Proceeds from redemption of short-term investment  90,305,000   83,655,127   11,200,000   1,623,847 
Purchase of property and equipment  (39,980)  (76,280)      
Purchase of educational contents  (98,899,372)  (64,811,320)  (176,597,637)  (25,604,251)
Purchase of intangible assets  (3,669,811)         
Prepayment for educational contents  (12,407,962)  (139,002,868)  (46,223,984)  (6,701,848)
Lonas made to a third party        (3,015,018)  (437,137)
Net cash used in investing activities  (164,857,125)  (144,640,468)  (218,486,639)  (31,677,587)
Cash flows from financing activities:                
Repayment to related parties  (26,697)     (17,064,116)  (2,474,064)
Borrowing from related parties  75,604   48,808,057       
Net proceeds raised in connection with initial public offering        146,982,044   21,310,393 
Payments of issuance cost in relation with initial public offering     (8,621,261)  (481,408)  (69,798)
Advance to a related party for issuance costs in relation with initial public offering     (2,512,809)      
Refund from a related party for issuance costs in relation with initial public offering        1,421,881   206,153 
Deposits made to a redeemable ordinary shareholder        (4,296,606)  (622,949)
Net cash provided by financing activities  48,907   37,673,987   126,561,795   18,349,735 
Effect of exchange rate changes on cash and cash equivalents and restricted cash held in foreign currencies  (264,826)  (489,011)  1,491,231   216,210 
Net increase (decrease) in cash and cash equivalents and restricted cash  (67,319,562)  40,318,095   3,788,496   549,281 
Cash and cash equivalents and restricted cash at beginning of the year  88,268,249   20,948,687   61,266,782   8,882,848 
Cash and cash equivalents and restricted cash at end of the year  20,948,687   61,266,782   65,055,278   9,432,129 
Supplemental disclosures of cash flows information:                
Cash paid for income taxes  1,436,662   2,617,807   1,177,693   170,749 
Cash paid for interest expenses            
Non-cash Investing and Financing activities:                
Transfer of prepaid issuance cost to additional paid-in capital        8,943,892   1,296,742 

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