EPS of $0.00 increased by 191.7% from previous year
Gross margin of 83.7%
Net income of 108.74K
"No earnings call transcript available in dataset." - N/A
CXJ Group Co Limited (ECXJ) QQ3 2024 Results: Strong profitability amid revenue variability and pronounced liquidity headwinds in China’s specialty retail auto-parts market
Executive Summary
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.
Cash Flow: Net cash provided by operating activities -37,731 USD; Free cash flow -37,766 USD; CFO conversion limited by working capital changes
Financial Highlights
Revenue: 390,268 USD; YoY +103.65%, QoQ -54.95%
- Gross Profit: 326,740 USD; Gross Margin 83.72%; YoY +168.78%, QoQ -38.40%
- Operating Income: 113,904 USD; Operating Margin 29.19%; YoY +180.71%, QoQ -42.26%
- Net Income: 108,741 USD; Net Margin 27.89%; YoY +185.55%, QoQ -46.49%
- EPS: 0.0011; Diluted 0.0011; YoY +191.67%, QoQ -45.00%
- Cash Flow: Net cash provided by operating activities -37,731 USD; Free cash flow -37,766 USD; CFO conversion limited by working capital changes
- Balance Sheet Highlights: Cash 18,088 USD; Total assets 4,658,529 USD; Total liabilities 2,453,459 USD; Total equity 2,205,070 USD; Goodwill 2,792,561 USD; Intangible assets 1,193,788 USD; Retained earnings -3,523,856 USD; Deferred revenue 420,830 USD; Current ratio 0.237x; Quick ratio 0.210x; Net debt 74,537 USD; Total debt 92,625 USD
- Efficiency/Turnover: Receivables turnover 2.65x; Inventory turnover 0.99x; Fixed asset turnover 3.99x; Asset turnover 0.0838x; CCC -0.221x; DSO 33.95 days; DIO 90.87 days; DPO 125.05 days
- Valuation context: No peers found for ECXJ in the dataset; notable liquidity and scale challenges imply a higher risk profile relative to typical consumer cyclical peers.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
390.27K
103.65%
-54.95%
Gross Profit
326.74K
168.78%
-38.40%
Operating Income
113.90K
180.71%
-42.26%
Net Income
108.74K
185.55%
-46.49%
EPS
0.00
191.67%
-45.00%
Key Financial Ratios
currentRatio
0.24
grossProfitMargin
83.7%
operatingProfitMargin
29.2%
netProfitMargin
27.9%
returnOnAssets
2.33%
returnOnEquity
4.93%
debtEquityRatio
0.04
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0
priceToBookRatio
0
priceEarningsRatio
0
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript or management quotes were provided in the dataset. Consequently, transcript highlights or themes cannot be authored from management commentary.
No earnings call transcript available in dataset.
— N/A
No second transcript quote available in dataset.
— N/A
Forward Guidance
No explicit forward guidance was provided in the supplied dataset. Given the quarterly cash burn and highly leveraged balance sheet, investors should look for management commentary on:
- Plans to improve operating cash flow and working capital efficiency (reducing the working capital drain of -118,135 USD and other working capital movements of -156,708 USD across QQ3).
- Potential monetization opportunities for Teenage Hero Car branding/IP and scale-up opportunities within China’s auto-parts distribution network.
- Any anticipated capex, financing arrangements, or potential capital raises to strengthen liquidity.
- Management’s view on demand durability in the consumer cyclical space and the competitive environment in China’s specialty retail auto-parts market.
Key indicators to monitor: quarterly cash flow progression (CFO, FCF), changes in working capital (accounts receivable/payables, inventory), and any guidance revisions for revenue and margin targets.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ECXJ Focus
83.72%
29.20%
4.93%
0.23%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
CXJ Group presents a bifurcated investment profile: high near-term profitability on a quarterly basis but weak liquidity and negative cash flow raise red flags for sustainability. The QQ3 2024 results demonstrate meaningful margin resilience and a path to profitability on modest scale, yet the balance sheet reveals substantial goodwill and intangible assets, a small cash buffer, and a heavily levered working capital cycle. Investors should adopt a cautious stance pending improvements in cash generation and liquidity. The key catalysts would include (1) stabilization and expansion of revenue in subsequent quarters, (2) tangible progress on converting revenue growth into positive operating cash flow, and (3) any strategic updates on licensing, brand monetization, or capital-raising plans that could bolster liquidity. Absent clear guidance, the risk-reward remains skewed toward higher risk given the liquidity constraints and the lack of peer benchmarks in the dataset.
Key Investment Factors
Growth Potential
YoY revenue increase of 103.65% in Q3 2024 signals improving market traction; potential to accelerate with Teenage Hero Car brand monetization and expanded China distribution; high gross margins provide a cushion for profitability as the business scales.
Profitability Risk
Significant liquidity risk evidenced by current ratio 0.237x, cash ratio 0.007x, and negative free cash flow; heavy goodwill/intangible base raises impairment risk; dependence on small quarterly base and large working capital swings; lack of peer comparables complicates benchmarking.
Financial Position
Strong gross margin and positive quarterly net income contrast with weak liquidity and negative cash flow; leverage exists (net debt 74,537 USD) with ongoing cash burn and limited cash reserves.
SWOT Analysis
Strengths
Very high gross margin (~83.7%) and solid quarterly profitability (net margin ~27.9%).
Year-over-year revenue up 103.6% indicating strong market traction and potential brand/IP leverage (Teenage Hero Car).
Positive quarterly earnings signal operational efficiency at current scale.
Weaknesses
Pronounced liquidity constraints: current ratio 0.237x and cash balance only 18,088 USD.
Negative free cash flow despite net income; CFO is negative (-37,731 USD) due to working capital movements.
Heavy balance sheet intangibles and goodwill (2,792,561 USD and 1,193,788 USD) with negative retained earnings (-3,523,856 USD) implying impairment risk and capital-intense structure.
Small scale with quarterly base; revenue remains modest and highly seasonal.
Opportunities
Monetization of Teenage Hero Car branding/IP.
Expansion of distribution networks in China and potential online channels to improve cash cycle.
Opportunities to optimize working capital and drive healthier cash conversion.
Threats
Liquidity risk requiring external funding or dilutive financing; reliance on brand/IP licensing.
Regulatory and macro risk in China’s consumer cyclicals and auto-parts sectors; potential supply-chain disruptions.
Competitive landscape in the Chinese auto-parts retail space; limited visibility due to lack of comparables and market data.