CXJ Group’s QQ3 2024 results show a sharp year-over-year revenue acceleration but significant quarterly volatility and persistent liquidity constraints. Revenue rose to 390,268 USD, up 103.6% vs. the prior-year Q3, while gross margin remained highly favorable at 83.72%, enabling a robust operating margin of 29.19% and a net margin of 27.86% on a quarterly basis. Net income reached 108,741 USD with EPS of 0.0011, signaling meaningful profitability at the quarter level despite the small base and limited scale.
Notwithstanding the above, cash flow deteriorated materially. Operating cash flow was negative (-37,731 USD) and free cash flow also negative (-37,766 USD), even as reported net income was positive. The company ended the period with cash of 18,088 USD and a net debt position of 74,537 USD (total debt 92,625 USD), underscored by a very tight liquidity profile (current ratio 0.237x, quick ratio 0.210x, cash ratio 0.007x). The balance sheet is skewed by substantial goodwill (2,792,561 USD) and intangible assets (1,193,788 USD), with retained earnings deeply negative (-3,523,856 USD). These features imply meaningful impairment and liquidity risks absent a stronger cash conversion cycle.
Management commentary is not provided in the dataset; as a result, the transcript-derived insights and quotes are not available. The near-term investment thesis rests on two pillars: (1) a return to positive cash flow through improved working capital management and potential monetization of Teenage Hero Car branding/IP, and (2) continued revenue growth in China’s auto-parts ecosystem. Given the absence of explicit forward guidance, investors should monitor quarterly cash flow progression, working capital dynamics, and any strategic updates around brand licensing and distribution expansion.