As a well-known agricultural technology enterprise, Shenzhen Kingkey Smart Agriculture Times Co., Ltd. (stock code: 000048), has been committed to the development and innovation of modern agriculture. However, based on the company's first-quarter report for 2024, its performance was not satisfactory, with many key financial data showing a decline, exposing a series of challenges that the company faces in the current market environment.
Total assets of Jingke Intelligent Agriculture decreased by 2.24% during the reporting period, from 12.128 billion yuan in the previous year to 11.857 billion yuan. This change is mainly due to the decrease in monetary funds, which has decreased by 18.80%, mainly due to the comprehensive impact of tax payment and normal operating expenditures. At the same time, accounts receivable increased significantly by 215.86%, indicating that the company faces risks in accounts receivable while expanding sales. On the other hand, the decrease in prepayments reflects the adjustment of the company's procurement strategy on hog farming business, which may have extended the payment terms to alleviate financial pressures.
The significant decrease in contract liabilities, 58.81%, is worth noting, which is mainly due to the entry of real estate projects during this reporting period, and the contract liabilities can be settled as revenues. The decrease in taxes and fees payable is related to the company's prepayment of corporate income tax for the fourth quarter of 2023. These changes jointly affect the company's debt-to-asset ratio. Although it remained at a high level of 66.47% at the end of the period, it has been optimized compared to the beginning of the period.
The decline in profit data is more significant. During the reporting period, the revenue of Jingke Intelligent Agriculture dropped sharply by 81.12% year-on-year, and net income fell by 95.56%. On the one hand, this is because no new projects were put into operation in this reporting period, resulting in a reduction in the delivery of commodity housing and a simultaneous reduction in revenue, costs, taxes, and enterprise management service fees. On the other hand, the increase in management and finance expenses also exacerbated the contraction of profits. The increase in management expenses is mainly due to the impact of the cost recognition of restricted stock incentives, while the significant increase in finance expenses is related to the decrease in monetary funds and the increase in borrowing interest caused by the expansion of financing scale.
It is worth noting that changes in asset impairment losses and asset disposal gains and losses also had a significant impact on profits. During the reporting period, the company reversed part of the impairment provision for consumable biological assets of the hog farming project, resulting in a significant increase in asset impairment losses. Nevertheless, by improving management levels, the company successfully reduced the losses from the elimination of breeding pigs in hog farming projects, thus partially improving asset disposal gains.
Although the net cash flow generated from operating activities is still negative, it has improved by 50.77% compared to the same period last year. This is mainly due to the effective management of accounts receivable and inventory by the company, as well as the settlement of contract liabilities after the real estate project entered this period. However, from the overall cash flow situation, the company still needs to further strengthen its fund management to ensure the stability and sustainability of operations.
In summary, the 2024 first-quarter report of Shenzhen Kingkey Smart Agriculture Times Co., Ltd. has shown that the company faces severe challenges in many aspects. Whether it is the adjustment of the debt-to-asset structure, the decline in profit levels, or the tight cash flow situation, it has put considerable pressure on the future management and development of the company. However, it can also be seen from the report that the company is actively responding to these challenges and seeking breakthroughs through optimized management and adjusted strategies. Therefore, investors should pay attention to the company's performance and potential opportunities contained therein.