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Haoxi Health Technology Limited Reports Unaudited Financial

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BEIJING, May 31, 2024 (GLOBE NEWSWIRE) — Haoxi Health Technology Limited (the “Company” or “HAO”), an online marketing solution provider headquartered in Beijing, China, today reported its unaudited financial results for the six months ended December 31, 2023.

Financial Highlights for the Six Months Ended December 31, 2023

  • Total revenue for the six months ended December 31, 2023 was US$23.50 million, increased by US$14.34 million, or 157%, from US$9.16 million for the same period in 2022.
  • Gross profit for the six months ended December 31, 2023 was US$1.20 million, representing an increase of 65% from US$0.73 million for the same period in 2022.
  • Net income for the six months ended December 31, 2023 was US$0.76 million, increasing by US$0.31 million, or 70%, from US$0.45 million for the six months ended December 31, 2022.

Mr. Zhen Fan, Chairman and Chief Executive Officer of the Company, stated that, “We are pleased to record an increase in revenue of 157% to US$23.50 million, and in gross profit of 65% to US$1.20 million during the first six months ended December 31, 2023. The growth we achieved during this period underscores our commitment to providing innovative and effective online marketing solutions. Looking ahead, we remain committed to leveraging the power of popular media platforms in China to drive success for our advertiser clients and deliver sustainable value to our shareholders. With our experience in the online marketing industry, we believe HAO is prepared to enhance its financial performance in the future.”

Recent Developments

On April 28, 2024, the Company, through its wholly owned subsidiary, Beijing Haoxi Digital Technology Co., Ltd. (“Beijing Haoxi”), entered into a Framework Contract for Cooperation on Information Placement on Media Platforms (the “Framework Contract) with Wuhan Yiya Simei Dental Clinic Co., Ltd. (“Yiya Dental”), a regional dentistry chain in China. This partnership underscores the Company’s goal in delivering internet marketing solutions. Pursuant to the Framework Contract, Beijing Haoxi agreed to provide comprehensive advertising services on popular social media platforms, such as Douyin, Toutiao, and Xigua Video, for Yiya Dental, through various forms of media, including short-video, text, images, flash, as well as mobile app contents.

On April 29, 2024, the Company, through its wholly owned subsidiary, Beijing Haoxi, entered into a Bidding Data Promotion Rebate Agreement (the “Rebate Agreement) with Jinan Yanling Biotechnology Co., Ltd. and its subsidiaries and affiliated companies (collectively, “Yanling”). Pursuant to the Rebate Agreement, Beijing Haoxi agreed to provide comprehensive advertising and promotion services to Yanling through advertising platforms, such as Jinri Toutiao (Today’s Headlines), Douyin, and Xigua Video.

Results of Operations for the Six Months Ended December 31, 2023

Revenue

We generate revenue from providing one-stop online marketing solutions, including traffic acquisition from mainstream online media platforms, content production, data analysis and advertising campaign optimization, to advertisers through the operating entity. Net revenue was $9.16 million and $23.50 million for the six months ended December 31, 2022 and 2023, respectively. The increase in our revenue is mainly attributable to the increase in the number of clients we served, which increased from 183 for the six months ended December 31, 2022 to 338 in the comparative period ended December 31,2023, as well as an increase in the average revenue per client from $50,070 for the six months ended December 31, 2022 to $69,538 for the six months ended December 31, 2023. The higher average revenue per client in the current year is mainly attributable to higher advertisement expenditure by our health care industry clients.

The average revenue per client under our advertisement pricing model consists of two components: 1) the average per unit-of-service price, which is the average price per click-through that we charge our advertiser customers, and 2) the quantity of services, which is actual number of click-throughs with respect to each advertiser. The following table shows the components that impact our revenue and their correlation.

        Six Months Ended
December 31,
 
        2022     2023  
Revenue per click-through ($)   a     0.51       0.97  
Average number of click-throughs with respect to each advertiser client   b     98,432       71,627  
Average revenue per client ($)   c=a*b     50,070       69,538  
Number of clients   d     183       338  
Revenue ($)   e=c*d     9,162,832       23,503,910  
                     

The increase in the revenue per click-through was higher in the current period mainly due to the increasing popularity of ByteDance media platforms, which we mainly collaborated with through ByteDance’s subsidiary, Ocean Engine. For the six months ended December 31, 2023, a growing number of our advertiser clients have chosen to place ads on ByteDance’s media platforms. In addition, the costs we paid to Ocean Engine to acquire user traffic for our clients’ ads were increased, leading to an increase in our service charge.

Cost of revenue

Our cost of revenue consists primarily of the purchase of online traffic from third-party media platforms after deducting rebates, and salaries and benefits for business operation staff. The cost of revenue increased by $13.87 million or 164%, from $8.43 million for the six months ended December 31, 2022 to $22.30 million for the six months ended December 31, 2023. The increase in cost of revenue was basically in line with the increase in revenue.

Gross profit and gross margin

Our gross profit increased by $0.47 million, from $0.73 million for the six months ended December 31, 2022 to $1.20 million for the six months ended December 31, 2023. Gross profit as a percentage of revenue (“profit margin”) was 5.11% for the six months ended December 31, 2023, lower than 7.97% for the six months ended December 31, 2022, mainly due to market competition. The Company needed to provide rebates to some customers, in order to maintain and expand the customer base.

Selling and marketing expenses

Our selling and marketing expenses primarily consist of payroll costs and office related expenses. Selling and marketing expenses increased by 44% from $14,312 in the six months ended December 31,2022 to $20,564 in the six months ended December 31, 2023. It was mainly due to an increase in bonuses paid to our sales staff, which were calculated based on sales performance. 

General and administrative expenses

Our general and administrative expenses mainly consist of salaries and bonuses, as well as administrative related expenses. General and administrative expenses increased by $132,326, or 66%, from $199,284 for the six months ended December 31, 2022 to $331,610 for the six months ended December 31, 2023. The increase was mainly attributable to an increase in salary and bonuses of the management team and professional fees in connection with our IPO.

Research and development expenses

Our R&D expenses mainly consist of salaries and benefits of our R&D staff developing Bidding Compass and our online ads bidding analysis software. R&D expenses increased by $7,000, or 29%, from $23,842 for the six months ended December 31, 2022 to $30,842 for the six months ended December 31, 2023. It was mainly attributable to the increase in salaries of R&D staff.

Income taxes

We had income taxes of $39,001 and $40,030 for the six months ended December 31, 2022 and 2023, respectively.

Net (loss)/income

As a result of the foregoing, we had net income of $0.45 million and $0.76 million for the six months ended December 31, 2022 and 2023, respectively.

About Haoxi Health Technology Limited

Haoxi Health Technology Limited is an online marketing solution provider headquartered in Beijing, China, specializing in serving healthcare industry advertiser clients. The Company’s growth is driven by the rise of news feed ads and the rapid development of the healthcare sector. The Company offers one-stop online marketing solutions, especially in online short video marketing, helping advertisers acquire and retain customers on popular platforms in China, such as Toutiao, Douyin, WeChat, and Sina Weibo. The Company is dedicated to reducing costs, increasing efficiency, and providing easy online marketing solutions to advertisers. For more information, please visit:

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 other factors discussed in the “Risk Factors” section of the registration statement filed with the U. S. Securities and Exchange Commission (the “SEC”). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:
Investor Relations
WFS Investor Relations Inc.
Janice Wang, Managing Partner
Email: services@wealthfsllc.com 
Phone: +86 13811768599
+1 628 283 9214
  


HAOXI HEALTH TECHNOLOGY LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

    December 31,
2023
    June 30,
2023
 
    (Unaudited)        
ASSETS            
Current Assets            
Cash and cash equivalents   $ 1,112,634     $ 1,203,203  
Trade receivables, net     218,492       7,748  
Supplier advances     3,465,160       2,404,680  
Prepaid expense, receivables and other assets     609,793       58,474  
Total current assets     5,406,079       3,674,105  
                 
Non-current assets                
Property and equipment, net     135,033       143,836  
Operating right-of-use asset     46,213       89,544  
Deferred listing costs     587,471       556,756  
Total non-current assets     768,717       790,132  
                 
Total Assets   $ 6,174,796     $ 4,464,237  
                 
LIABILITIES AND EQUITY                
Current Liabilities                
Short-term loans   $ 722,230     $ 511,409  
Accounts payable     1,001,888       27,312  
Due to related parties     81,564       20,210  
Advances from customers     1,030,329       1,493,947  
Taxes payable     982,535       328,093  
Accrued expenses and other liabilities     209,486       41,518  
Salary and welfare payable     39,520       37,145  
Operating right-of-use liabilities-current     46,213       89,544  
Long-term payable-current     13,982       27,344  
Total current liabilities     4,127,747       2,576,521  
                 
Non-current Liabilities                
Long-term payable     71,140       72,104  
Long-term borrowing     254,140       249,107  
Total non-current liabilities     325,280       321,211  
Total Liabilities     4,453,027       2,897,732  
                 
Commitments and contingencies                
                 
SHAREHOLDERS’ EQUITY:                
Class A Ordinary Shares (Par value US$0.0001 per share, 150,000,000 shares authorized, and 12.210,000 and 7,730,000 shares issued and outstanding.     1,221       1,221  
Class B Ordinary Shares (Par value US$0.0001 per share, 50,000,000 shares authorized, and 17,270,00 and 17,270,000 shares issued and outstanding.     1,727       1,727  
Additional paid-in capital     2,176,796       2,176,796  
Retained earnings (Accumulated deficit)     191,738       (568,460 )
Accumulated other comprehensive loss     (649,713 )     (44,779 )
Total shareholders’ equity     1,721,769       1,566,505  
                 
Total liabilities and shareholders’ equity   $ 6,174,796     $ 4,464,237  
                 

  

HAOXI HEALTH TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

    Six Months Ended
December 31,
 
    2023     2022  
    (Unaudited)     (Unaudited)  
             
Revenues   $ 23,503,910     $ 9,162,832  
Cost of revenues     (22,302,522 )     (8,432,603 )
Gross profit     1,201,388       730,229  
                 
Operating expenses:                
Selling     20,564       14,312  
General and administrative     331,610       199,284  
Research and development     30,842       23,842  
Total operating expenses     383,016       237,438  
                 
Income from operations     818,372       492,791  
                 
Other income (loss):                
Financial expenses     (16,789 )     (6,744 )
Other income     (1,355 )        
Total other income (loss), net     (18,144 )     (6,744 )
                 
Income before income taxes     800,228       486,047  
                 
Income tax expense     (40,030 )     (39,001 )
                 
Net income   $ 760,198     $ 447,046  
                 
Comprehensive income                
Net income   $ 760,198     $ 447,046  
Foreign currency translation gain (loss)     (604,934 )     65,529  
Total Comprehensive income   $ 155,264     $ 512,575  
                 
Earnings per ordinary share*                
– Basic and diluted   $ 0.03     $ 0.02  
                 
Weighted average number of ordinary shares outstanding                
–Basic and diluted     29,480,000       25,373,333  

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