Cheetah Net Supply Chain Service Inc. Expands Amidst Challenging Market Conditions
$CTNT
Cheetah Net Supply Chain Service Inc. (NASDAQ:CTNT) has recently garnered significant attention in the financial markets. Known for its innovative solutions in supply chain management, the company has made headlines with its latest strategic partnership aimed at enhancing its logistics capabilities. This collaboration is expected to streamline operations and reduce costs, positioning Cheetah Net Supply Chain Service Inc. as a formidable player in the industry.
Cheetah Net Supply Chain Service Inc. is a supplier of parallel-import vehicles sourced in the US for the PRC market. The industry recently reported its financial results for the three- and nine-month periods ending September 30. Challenging market conditions in the PRC, the company has maintained a robust financial performance. Revenue for the third quarter was $10 million, compared to $11.9 million for the same period last year, reflecting lower sales volume and a change in the mix of vehicles sold.
The company sold 79 vehicles during the quarter, compared to 90 in the same period last year. The average selling price per vehicle decreased by 4% to $127,066. Gross profit for the quarter was $1.2 million, a decrease of 24.4% compared to the same period last year, with a gross profit margin of 11.6%. In addition to its financial performance, Cheetah Net Supply Chain Service has been actively pursuing strategic acquisitions to strengthen its logistics services. The company announced the signing of a letter of intent with Edward Transit Express Group Inc., a California-based carrier specializing in ocean and air transportation services.
The total purchase price for Edward is $1.5 million, consisting of $300,000 in cash and $1.2 million in Cheetah’s Class A common stock. This acquisition is expected to enhance Cheetah’s logistics capabilities and support its long-term growth strategy. Chairman and CEO Tony Liu commented on the company’s strategic focus amidst a challenging business environment in the PRC. He emphasized the importance of concentrating efforts on higher-priced automobile models that can be profitably purchased in the US and sold in the PRC. The company aims to manage the spread between procurement costs and selling prices to maximize overall profit per vehicle transaction.
Additionally, Cheetah Net Supply Chain Service is moving ahead with plans to acquire US-based logistics and warehousing service providers to augment its core operations, which is anticipated to reduce transaction costs and generate revenue by selling these services to third-party parallel importers. The company’s recent initial public offering (IPO) of Class A common stock also marks a significant milestone. The IPO, which raised $5 million in gross proceeds, is expected to provide the necessary capital to support the company’s growth initiatives. The shares of Class A common stock began trading on the Nasdaq Capital Market under the symbol “CTNT.” This move is seen as a critical step towards achieving the company’s long-term ambition of becoming an integrated provider of international trade services for small- and medium-sized traders.
Revenue for the first six months was $22.4 million, compared to $33.6 million for the same period last year. The company sold 175 vehicles during the period, compared to 296 last year, with an average selling price per vehicle increasing by 12.9% to $128,214. Gross profit for the first half of the year was $2.4 million, an increase of 35% compared to the same period last year, with a gross profit margin of 10.7%.
Looking ahead, Cheetah Net Supply Chain Service remains optimistic about the parallel import business for the rest of the year. The company plans to develop logistics and warehouse capabilities to facilitate its parallel-import vehicle business and offer these services as a standalone business to small and medium-sized parallel import dealers. This strategic move is expected to enhance the overall financial performance and support its long-term growth objectives. The corporation continues to navigate through challenging market conditions with a strategic focus on growth and expansion. The recent financial performance, strategic acquisitions and successful IPO highlight its commitment to becoming a comprehensive international trade service provider.
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