TIANJIN, China, Oct.
15, 2021 /PRNewswire/ -- MDJM LTD (Nasdaq: MDJH) (the
"Company" or "MDJH"), an integrated real estate services company in
China, today announced its
unaudited financial results for the six months ended
June 30, 2021.
First Half of 2021 Financial Highlights
|
|
For the Six Months
Ended June 30,
|
($'000, except per
share data)
|
|
2021
|
|
2020
|
|
%
Change
|
Revenue
|
|
$2,713
|
|
$2,710
|
|
0.1%
|
Operating
expenses
|
|
$2,996
|
|
$2,630
|
|
13.9%
|
Income (loss) from
operations
|
|
$(283)
|
|
$80
|
|
-453.7%
|
Operating profit
(loss) margin
|
|
-10.4%
|
|
3.0%
|
|
13.4 pp
|
Net profit (loss)
attributable to MDJH ordinary shareholders
|
|
$(231)
|
|
$132
|
|
-275.0%
|
Earnings (loss) per
share
|
|
$(0.02)
|
|
$0.01
|
|
-300%
|
* pp: percentage
points
|
|
|
|
|
|
|
- Revenue was $2.71 million for the
first half of 2021, which was
approximately the same as revenue for the six months ended
June 30, 2020.
- Operating expenses increased by 13.9% to $3.00 million for the first half of 2021. The
increase was primarily related to the increases in operating
expenses across most categories of expenses and partially offset by
decreased selling expenses.
- Operating loss margin was 10.4% for the first half of 2021,
compared to the operating margin of 3.0% for the same period of
last year.
- Net loss attributable to ordinary shareholders was $0.23 million, or loss per share of $0.02, for the first half of 2021, compared to
net income attributable to ordinary shareholders of $0.13 million, or earnings per share of
$0.01, for the same period of last
year.
Mr. Siping Xu, Chairman and Chief
Executive Officer of the Company, commented, "The cooling down of new construction in the
residential housing market in China had a negative impact on our operation
results; however, we are glad to
see our establishment of a new joint venture company in the
United Kingdom in August 2021 for asset management business, which
was a significant step for our global expansion strategy. Going
forward, we expect the improved housing market in China will boost our revenue growth.
Meanwhile, we will keep exploring viable strategic alternatives to
strengthen our business."
First Half of 2021 Financial Results
Revenue
For the first half of 2021, revenue was $2.71 million, which was
approximately the same as the revenue for the six months
ended June 30, 2020, due to cooling
down of new construction in the residential housing market in
China. Primary real estate agency
services and other services accounted for 98.7% and 1.3% of
revenue, respectively, for the first half of 2021, compared to
98.2% and 1.8%, respectively, for the same period of last year. On
a geographical basis, revenue from primary real estate agency
services in Tianjin, Chengdu, Suzhou, and Yangzhou accounted for
62%, 38%, 0%, and 0% of the primary real estate agency service
revenue, respectively, for the first half of 2021, compared to 59%,
35%, 4%, and 2%, respectively, for the same period of last
year.
Operating Expenses
|
For the Six Months
Ended June 30,
|
($'000)
|
2021
|
|
2020
|
|
%
Change
|
Selling
expenses
|
$
27
|
|
$
28
|
|
-0.7%
|
Payroll, payroll
taxes, and others
|
2,282
|
|
2,030
|
|
12.4%
|
Professional
fees
|
335
|
|
309
|
|
8.1%
|
Operating lease
expenses
|
60
|
|
56
|
|
6.4%
|
Depreciation and
amortization
|
12
|
|
11
|
|
15.2%
|
Allowance for
doubtful accounts, net
|
37
|
|
28
|
|
34.5%
|
Other general and
administrative
|
242
|
|
168
|
|
44.0%
|
Total operating
expenses
|
$
2,996
|
|
$
2,630
|
|
13.9%
|
Selling expenses was $27,410 for
the first half of 2021, which was about the same compared to
$27,617 for the same period of last
year.
Payroll, payroll taxes, and others increased by $0.25 million, or 12.4%, to $2.28 million for the first half of 2021 from
$2.03 million for the same period of
last year. The increase in payroll, payroll taxes, and others in
the first half of 2021 was mainly because the Company paid the full
amount of social security insurance and fees for its employees in
the first half of 2021, while in the same period of 2020, part of
the social security insurance and fees were waived by the Chinese
Government due to COVID-19 pandemic.
Professional fees were $0.33
million for the first half of 2021, compared to $0.31 million for the same period of last year.
Professional fees consist of attorney, audit, investors
relationship, consulting, and other expenses. The increase in
professional fees was due to an increase in legal expenditures.
Operating lease expenses increased by $3,588, or 6.4%, to $59,658 in for the first half of 2021 from
$56,070 million for the same
period of last year. Currently, the Company has one operating lease
recognized in the balance sheet, which became effective on
January 1, 2019 and will expire on
December 31, 2023.
Depreciation and amortization expenses were $12,147 for the first half of 2021, compared
to $10,543 for the same period
of last year. The increase in depreciation and amortization
expenses resulted from new office equipment purchased in the third
and fourth quarters of 2020.
Allowance for doubtful accounts, net was $0.04 million for the first half of 2021,
compared to $0.03 million for the
period of last year.
Other general and administrative expenses increased by
$0.07 million, or 44.0%, to
$0.24 million for the first half of
2021 from $0.17 million for the same
period of last year.
As a result, total operating expenses increased by $0.37 million, or 13.9%, to $3.00 million for the first half of 2021 from
$2.63 million for the same period of
last year.
Operating Income (Loss)
Loss from operations was $0.28
million for the first half of 2021, compared to income from
operations of $0.08 million for the
same period of last year.
The operating loss margin was 10.4% for the first half of 2021,
compared to the operating profit margin of 3.0% for the same period
of last year. The decrease in operating margin was due to the
increases in operating expenses as discussed above.
Other Income
Total other income, including government grants, interest
income, and other income (expenses), was $0.05 million for the first half of 2021,
compared to $0.06 million for the
same period of last year.
Income (loss) before Income Tax
The loss before income tax was $0.24
million for the first half of 2021, compared to income
before income tax of $0.14 million
for the same period of last year.
The Company incurred income tax of
$(5,321), resulting from deferred
income tax adjustment, for the first half of 2021, compared to
$10,429 for the same period of last
year.
Net Income (loss)
The net loss was $0.23 million for
the first half of 2021, compared to net income of $0.13 million for the same period of last year.
After deduction of noncontrolling interest, the net loss
attributable to ordinary shareholders was $0.23 million, or a loss per share of
$0.02, for the first half of 2021,
compared to net income attributable to ordinary shareholders of
$0.13 million, or earnings per share
of $0.01, for the first half of last
year.
Financial Conditions
As of June 30, 2021, the Company
had cash and cash equivalents of $5.53
million, compared to $6.11
million as of December 31,
2020. Account receivable was $3.67
million as of June 30, 2021,
compared to $4.06 million as of
December 31, 2020. As of June 30, 2021, the Company had current assets
$9.37 million and current liabilities
of $0.74 million, leading to working
capital of $8.64 million, compared to
current assets, current liabilities, and working capital of
$10.29 million, $1.48 million, and $8.81
million, respectively, as of December
31, 2020.
Net cash used in operating activities was $0.59 million for the first half of 2021,
compared to $0.26 million for the
same period of last year. Net cash provided by investing activities
was $4,379 for the first half of
2021, compared to net cash used in investing activities of
$1,722 for the same period of last
year. Net cash provided by financing activities was $nil for the
first half of 2021, compare to $nil for the first half of last
year.
Recent Developments
On June 15, 2021, the Company,
through its wholly owned subsidiary, MD Local Global Limited,
together with Ocean Tide Wealth Limited, a specialist mortgage
broker in the United Kingdom, and
Mingzhe Zhang, established a joint
venture company in England and
Wales, Mansions Estate Agent Ltd
("Mansions Estate"), of which MD Local Global Limited holds 51% of
the equity interests. Mansions Estate will be engaged in asset
management business.
About MDJM LTD
With branch offices in Tianjin,
Chengdu, Suzhou, and Yangzhou,
China, MDJM provides primary real
estate agency services to real estate developer clients, and
as-needed real estate consulting and independent training services.
For more information regarding the Company, please visit
http://ir.mdjhchina.com.
Forward-Looking Statements
This announcement contains forward-looking statements. All
statements other than statements of historical fact in this
announcement are forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations and projections about future
events and financial trends that the Company believes may affect
its financial condition, results of operations, business strategy
and financial needs. In addition, there is uncertainty about the
further spread of the COVID-19 virus or new variants thereof, or
the occurrence of another wave of cases and the impact it may have
on the Company's operations. Investors can identify these
forward-looking statements by words or phrases such as "may,"
"will," "expect," "anticipate," "aim," "estimate," "intend,"
"plan," "believe," "potential," "continue," "is/are likely to" or
other similar expressions. The Company undertakes no obligation to
update forward-looking statements to reflect subsequent occurring
events or circumstances, or changes in its expectations, except as
may be required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results and
encourages investors to review other factors that may affect its
future results in the Company's annual report on Form 20-F and its
other filings with the Securities and Exchange Commission.
For more information, please contact Investor Relations at:
Sherry Zheng
Weitian Group LLC
Email: shunyu.zheng@weitian-ir.com
Phone: +1 718-213-7386
MDJM LTD and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss)
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
2,712,679
|
|
$
2,709,568
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
Selling
expenses
|
|
27,410
|
|
27,617
|
|
Payroll, payroll
taxes and others
|
|
2,281,869
|
|
2,029,745
|
|
Professional
fees
|
|
334,686
|
|
309,513
|
|
Operating leases
expenses
|
|
59,658
|
|
56,070
|
|
Depreciation and
amortization
|
|
12,147
|
|
10,543
|
|
Allowance for
doubtful accounts, net
|
|
37,398
|
|
27,810
|
|
Other general and
administrative
|
|
242,352
|
|
168,304
|
Total Operating
Expenses
|
|
2,995,520
|
|
2,629,602
|
|
|
|
|
|
|
Income (loss) from
Operations
|
|
(282,841)
|
|
79,966
|
|
|
|
|
|
|
Other income
(Expense):
|
|
|
|
|
|
(Loss) gain on
foreign currency transactions
|
|
(6,229)
|
|
7,634
|
|
Interest
income
|
|
11,236
|
|
42,998
|
|
Other
income
|
|
41,392
|
|
4,934
|
|
Total other income
|
|
46,399
|
|
55,566
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
(236,442)
|
|
135,532
|
Income tax
|
|
5,321
|
|
(10,429)
|
Net income
(loss)
|
|
(231,121)
|
|
125,103
|
Net loss attributable
to noncontrolling interest
|
|
(125)
|
|
(6,899)
|
Net income (loss)
attributable to MDJM Ltd ordinary shareholders
|
|
$
(230,996)
|
|
$
132,002
|
|
|
|
|
|
|
Net income (loss) per
ordinary share attributable to MDJM Ltd ordinary shareholders -
basic
|
|
$
(0.02)
|
|
$
0.01
|
Net income (loss) per
ordinary share attributable to MDJM Ltd ordinary shareholders -
diluted
|
|
$
(0.02)
|
|
$
0.01
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
Basic
|
|
11,675,216
|
|
11,640,820
|
|
Diluted
|
|
11,675,216
|
|
11,640,820
|
Comprehensive income
(loss):
|
|
|
|
|
Net Income
(loss)
|
|
$
(231,121)
|
|
$
125,103
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
Change in foreign
currency translation adjustments
|
|
51,087
|
|
(54,091)
|
Total other
comprehensive income (loss)
|
|
(180,034)
|
|
71,012
|
Comprehensive income
(loss) attributable to non-controlling interest
|
|
11,466
|
|
(1,836)
|
Comprehensive income
(loss) attributable to MDJM Ltd ordinary shareholders
|
|
$
(191,500)
|
|
$
72,848
|
|
|
|
|
|
|
MDJM LTD and
Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
June 30,
2021
|
|
December 31,
2020
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash, cash
equivalents, and restricted cash
|
$
5,532,516
|
|
$
6,110,693
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of $53,129 and $15,477,
respectively
|
3,670,277
|
|
4,062,343
|
|
|
Prepaid
expenses
|
45,852
|
|
23,346
|
|
|
Other
receivables
|
125,203
|
|
92,168
|
|
|
Total Current
Assets
|
9,373,848
|
|
10,288,550
|
|
|
|
|
|
|
|
Property and
equipment, net
|
57,708
|
|
65,703
|
|
|
|
|
|
|
|
Other
Assets
|
|
|
|
|
|
Deferred tax
assets
|
30,529
|
|
24,890
|
|
|
Operating lease
assets, net
|
272,694
|
|
319,828
|
|
|
Other receivable -
long term
|
55,310
|
|
53,794
|
|
|
Total Other
Assets
|
358,533
|
|
398,512
|
|
|
|
|
|
|
|
Total
Assets
|
$
9,790,089
|
|
$
10,752,765
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
396,512
|
|
$
1,147,530
|
|
|
VAT and other taxes
payable
|
166,415
|
|
207,352
|
|
|
Deferred
income
|
19,014
|
|
18,780
|
|
|
Operating lease
liabilities, current
|
156,676
|
|
102,056
|
|
|
Total Current
Liabilities
|
738,617
|
|
1,475,718
|
|
|
|
|
|
|
|
Long-term operating
lease liabilities
|
116,018
|
|
161,559
|
|
|
|
|
|
|
|
Total
Liabilities
|
854,635
|
|
1,637,277
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Ordinary shares:
50,000,000 shares authorized, par value: $0.001
per share, 11,675,216 and 11,675,216 shares issued and
outstanding as of June 30, 2021 and December 31, 2020,
respectively
|
11,675
|
|
11,675
|
|
|
Additional paid in
capital
|
6,845,394
|
|
6,845,394
|
|
|
Statutory
reserve
|
327,140
|
|
327,140
|
|
|
Retained
earnings
|
1,911,661
|
|
2,142,657
|
|
|
Accumulated other
comprehensive loss
|
2,063
|
|
(37,558)
|
|
Total MDJM Ltd
stockholders' equity
|
9,097,933
|
|
9,289,308
|
|
Noncontrolling
interest
|
(162,479)
|
|
(173,820)
|
|
Total Liabilities and
Equity
|
$
9,790,089
|
|
$
10,752,765
|
|
|
|
-
|
|
|
|
|
|
|
MDJM LTD and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net (loss)
income
|
|
$(231,121)
|
|
$125,103
|
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
12,147
|
|
10,543
|
|
Changes in allowance
for doubtful accounts
|
|
37,398
|
|
27,810
|
|
(Loss) gain on
foreign currency transactions
|
|
6,229
|
|
(7,634)
|
|
Non cash operating
lease expense
|
|
51,022
|
|
44,945
|
|
Non cash interest
income
|
|
(1,885)
|
|
-
|
|
Changes in deferred
tax assets
|
|
(5,321)
|
|
3,632
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Decrease (increase)
in accounts receivables
|
|
404,396
|
|
(1,017,278)
|
|
|
(Increase) decrease
in other receivables
|
|
(38,533)
|
|
26,021
|
|
|
(Increase) decrease in prepaid
expense
|
|
(22,204)
|
|
31,193
|
|
|
(Decrease) increase
in accounts payable and accrued expenses
|
|
(764,222)
|
|
470,507
|
|
|
(Decrease) increase
in VAT and other tax payable
|
|
(43,221)
|
|
16,488
|
|
|
Increase in operating
lease liabilities
|
|
5,795
|
|
7,306
|
|
|
Increase in deferred
income
|
|
-
|
|
1,886
|
Net Cash Used in
Operating Activities
|
|
(589,520)
|
|
(259,478)
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Purchase of office
equipment and software
|
|
(3,351)
|
|
(1,722)
|
|
Loan repayment
received
|
|
7,730
|
|
-
|
Net Cash Provided by
(Used in) Investing Activities
|
|
4,379
|
|
(1,722)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Net Cash Provided by
Financing Activities
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
|
6,964
|
|
(14,687)
|
|
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
(578,177)
|
|
(275,887)
|
Cash, cash
equivalents, and restricted cash - beginning of the
period
|
|
6,110,693
|
|
6,552,677
|
Cash, cash
equivalents, and restricted cash - end of the period
|
|
$5,532,516
|
|
$6,276,790
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$4,923,114
|
|
$4,981,392
|
Restricted foreign
currency
|
|
609,402
|
|
1,295,398
|
Total cash, cash
equivalents, and restricted cash
|
|
$5,532,516
|
|
$6,276,790
|
|
|
|
|
|
|
|
Supplemental
Disclosure Cash Flow Information:
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
|
Interest
|
|
$-
|
|
$-
|
|
Income
taxes
|
|
$-
|
|
$-
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/mdjm-ltd-reports-first-half-of-2021-financial-results-301401171.html
SOURCE MDJM LTD