Julong Holding Limited

Hello, ladies and gentlemen. Thank you for standing by for Julong's first half of fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host from Julong, Annie Tieng, IR Manager for the company. Please go ahead, Annie.

Thank you very much. Hello, everyone, and welcome to Julong's earnings conference call for the first half of fiscal year 2025. The company's financial and operational results were released earlier today and are available online by visiting the IR section of our website at ir.julongzx.com. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, forward-looking statements involving higher risks and uncertainties. As such, the company's results may materially differ from today's views. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the US SEC. The company does not assume any obligation to upgrade any forward-looking statements, except as required under applicable law. Participants on today's call will include our founder, chairman, and chief executive officer, Mr. Jiaqi Hu, who will provide a company overview and update on our strategic initiatives with highlights from the period. Our chief financial officer, Ms. Ai Ru Chen will then provide details on the company's financial results for the period. We will then open the call for questions. I will now turn the call over to Julong's Chief Executive Officer, Mr. Jiaqi Hu. Please go ahead, sir.

Hello, everyone.

Welcome to Julong's first earnings call.

Thank you for joining us

marking a major milestone in the group's journey. Our successful IPO stands as a testament to the group's enduring strength and trusted reputation built over the years, and more importantly, paves the way for our rapid, high-quality future development.

As a provider of China's leading smart and comprehensive solutions, our business covers the entire country. services to the public sector, commercial land and multi-housing residential communities, and other diversified customer groups. Over the years, we have made sure that the complex projects are completed on time through timely delivery and top-notch customers, established a good reputation, and gradually formed a smart project engineering solution, smart project operation and maintenance, and As a leading provider of intelligent integrated solutions in China, our business serves a diverse nationwide customer base, sending public utilities,

commercial properties and multi-family residential properties operating at scale. Over the years, we have established a trusted reputation by ensuring the successful and on-time execution of complex projects through initiatives like deliveries before deadline and our customer-first approach. We have gradually developed three key business lines, engineering solutions for intelligent projects, operation and maintenance of intelligent projects, and sales of intelligent systems, equipment, and materials. With a pioneering spirit, we aspire to lead China's intelligent integrated solutions industry, exceeding customers' expectations, embracing innovation, and investing in technology to define the industry's future.

In the midst of a period of global demand for artificial intelligence, the company has achieved a high growth in both revenue and profit with its technology and landing capabilities, as well as the double advantage of losing credit. I am very pleased with the strong performance of our team in the dynamic operation environment. Our business model is resilient and a combination of diversified solutions, In the first half of fiscal year 2025, we achieved robust, high-quality growth

in both revenue and profitability amid a surge in global demand for intelligent building solutions, harnessing our dual strengths of tech-powered execution prowess and strong credibility reinforced by our IPO. I am especially proud of our team's consistently exceptional execution in an ever-changing operating environment. Our business model's resilience and breadth of our diversified solutions empower us to adaptively navigate today's microeconomic conditions while laying a solid foundation for long-term sustainable growth. Let me walk you through our business performance and strategic initiatives and share how Julong is seeding this window of industry opportunity to create long-term value.

Today, we announced the first performance report. We released our first earnings report since our IPO earlier today.

For the six months ending March 31, 2025, defined as the first half of fiscal year 2025, the company achieved a total revenue of over RMB 100 million, up 10% year-over-year, driven primarily by structural optimization across our business lines. Let's take a closer look at each segment.

首先是智能项目的工程解决方案业务。 It is also the core of this business. The revenue ratio is more than 90%. In the first half of 2015, the revenue of the engineering solution project achieved 13.4% of the same growth. It is mainly due to the increase in project size and service capability. The specific performance is a growth in the number of new and newly opened projects. From the same period of 82 major growths last year to 144, to 76%. Second, high-value, customized solutions have been improved significantly, leading to an increase in the total amount of activities, and the company's technical support has been approved by the market. For example, Beijing International Airport's smart housing project, and the system of operating and upgrading of 460 branch institutions of a certain commercial bank in the Southwest China, have all achieved the technical support

First, our engineering solutions for intelligent projects, the core of our operations and the contributor of over 90% of revenue delivered 13.4% year-over-year revenue growth in the first half of fiscal year 2025. This was mainly driven by our enhanced ability to scale and replicate projects more effectively reflected by two key metrics. First, our new contracts signed and under execution increased significantly from 82 for the same period of last year to 144 this year, up 76% year-over-year. Second, boosted by a higher proportion of high value-added customized solutions, our average contract value increased year-over-year. and scoring broad market recognition of our ability to command a technology premium. Our intelligent security project at a major international airport in Beijing and our system operation and upgrade project across 460 branches of a leading commercial bank in southwest China are two prime examples. In both cases, we not only achieved technology premiums, but also delivered the benefits of long-term service.

其次是智能项目的运营和维保业务。 二五财年上半年, 我们战略性地将维保服务 与新建项目进行了一级化整合。 虽然由此造成了 该业务板块短期内的收入波动, 但有效提升了 客户联系性与全生命周期价值。 预计未来三年,

Next, let me turn to our operation and maintenance of intelligent project segment. In the first half of fiscal year 2025, we strategically integrated maintenance services with new projects. While this caused some short-term revenue fluctuation for the segment, it has effectively strengthened the customer retention and overall life cycle value. We expect the operation maintenance business to remain a reliable source of cash flow over the next three years.

In the smart system equipment and material sales business, we have made strategic adjustments to deeply integrate equipment sales into the overall engineering solution to avoid low-power single-use equipment sales competition.

Finally, for the sales of intelligent system equipment and materials, we strategically integrated equipment sales deeply into our overall engineering solutions. This adjustment allowed us to avoid competing on low margin standalone equipment, boosting overall project margins and customer retention.

Next, I will share with you our project signing and implementation situation. In the new project signing, the first half of the fiscal year, there are 144 projects that have been newly signed and opened. In the first half of the fiscal year, there are 25 projects that have been newly signed and have not been opened. The total amount of the signed contract is 17.66 million yuan. The rich order reserves are the basis for the growth of the industry. Next, let me share an update on project signing and implementation.

In terms of new projects, we signed 144 new engineering solutions contracts and began execution during the first half of fiscal year 2025. In addition, during the first half of fiscal year 2025, we signed 25 new engineering solutions contracts that have not yet commenced, with total contract amount of RMB 17.7 million, representing a healthy order backlog that will propel future revenue growth. Regarding project delivery, we continue to ensure high-quality execution thanks to our outstanding operational capabilities.

In addition, we continue to build It is a double advantage of knowledge and brand, and it forms a difference-making competitive barrier. G-LON Company has electronic and intelligent engineering professional reporting and knowledge, fire and construction engineering professional reporting and knowledge, and construction engineering design, construction, maintenance and knowledge. The combination of listed credit and top-level knowledge has formed the key difference between G-LON and domestic partners. This is a competitive advantage that is difficult to support, making it possible for us to open up the core of the overseas market. At the technical level, we continue to invest in the development of smart security, fire protection, and hardware command systems. Since March 31, 2025, the company has accumulated 23 donation rights and 28 software registration rights. At the brand construction and market opening level, The launch of NASDAQ has brought a significant impact on the company's brand. We will continue to work on the next step in the international market.

Meanwhile, we constantly enhance our credentials and brand reputation, deepening our differentiated competitive modes. Zhulong holds Class 1 licenses in Electronic and Intelligent Engineering Professional Contracting, in Fire Protection Engineering Professional Contracting, and in security system design, construction, and maintenance. Those top tier qualifications, combined with our IPO backed credibility, form a unique and hard to replicate advantage that will truly differentiate us from our domestic peers, serving as a key competitive barrier as we potentially expand into overseas markets. On the technology front, we have consistently invested in R&D for intelligent security, fire protection, IOT, and emergency command systems. As of March 31, 2025, the company had obtained a total of 23 patents and 28 software copyrights. In terms of brand building and market development, our NASA listing has greatly elevated our brand visibility, creating a solid foundation of trust for future global partnerships.

At the strategic level of the company, we are actively preparing to grasp the development opportunities brought by China's technical exports and China's technical exports to build a global smart engineering benchmark as a long-term development goal, and will steadily advance overseas market layout at different stages. At the same time, we will continue to deepen our domestic business and continue to advance technological innovation and business model upgrade,

strategically we are actively capitalizing on the opportunities unleashed by China's tech-powered global trend with a long-term goal of establishing our brand as a global benchmark intelligent engineering expanding into overseas markets in phases while consistently strengthening our core domestic operations At the same time, we will continue to drive innovation and upgrade our business model, fostering an open and collaborative ecosystem.

In the first half of 2025, we saw a growth of 10% in revenue and 30.2% in net profit, which proved the resilience of core capabilities. In summary, we proved the resilience of our core strength in the first half of fiscal year 2025.

highlighted by 10% revenue growth and a 30.2% net income growth. The global boom in intelligent buildings presents an opportunity for us to evolve from a China leading into a global benchmark. Moving forward, our strategy remains anchored in tech-driven execution as our foundation, now with IPO-backed credibility as our shield, capturing high margin returns while enhancing service for our domestic customer base to maintain stable cash flows.

我的分享到此结束,接下来有请我们的首席财务官陈爱如女士为大家讲述公司的财务情况。 With that, I will turn the call over to our CFO, Ms.

Ai Ru Chen, who will discuss our key financial results.

Please go ahead. Thank you.

Now, I'd like to discuss our financial results for the first half of fiscal year 2025. Please note, all amounts are in RMB unless otherwise stated.

In the first half of the fiscal year, we achieved a strong performance performance. Income and profits increased significantly. The total income increased by 10%, mainly due to the growth of our core business version, the engineering solution program of the intelligence project. The business increased by 13.4%. Our net profit increased by 15.6%. The net profit increased by 0.8%. mainly due to the following two points. First, by optimizing the structure and project management process, the cost efficiency of people is improved. Second, the software and services that are highly efficient are improved in the overall solution of the project. Business structure continues to optimize. What is even more remarkable is that we have achieved the same growth rate of 30% of business profits and 30.2% of net profits, which is significantly higher than the profit-saving rate. This proves the company's transformation from expanding in size to growing in quality.

We recorded strong financial results in the first half of fiscal year 2025 with significant year-over-year increases in revenue and profitability. Total revenue grew by 10% year-over-year, mainly driven by the 13.4% year-over-year revenue increase from our core engineering solutions for intelligent project business. Our growth profit rose 15.6% year-over-year, and growth margin improved 0.8 percentage points as we continue to reduce human resource costs through personnel structure and project management optimizations. We also enhance our revenue mix and overall business structure by prioritizing high margin software and services. Notably, operating income and net income increased by 30% and 30.2% year-over-year respectively, up-pacing revenue growth, demonstrating that our shift from scale expansion to quality growth has began to deliver the benefits of scale and operating leverage. Looking at our financial results for the first half of fiscal year 2025 in more detail,

Our total revenues increased by 10% to $102 million from $92.8 million in the same period last fiscal year.

primarily attributable to an increase in the number of intelligent projects for which we provided engineering solutions and an increase in the average service fee for engineering solutions for intelligent projects. Revenues from engineering solutions for intelligent projects increased by

13.4% to $97.9 million from $86.3 million in the same period last fiscal year.

Revenues from operation and maintenance of intelligent projects were 4.3 million compared with 4.9 million in the same period last fiscal year, a decrease of 0.6 million year-over-year.

Revenues from sales of intelligent system equipment and materials were 10,000,

compared with 1.67 million in the same period last fiscal year, a decrease of 1.66 million year over year.

Cost of revenues increased by 9% to 85.5 million from 78.4 million in the same period last fiscal year. Maoli Ren tongbi zhen zhang bai fen zhi shi wu diar liu zi yi qian liu bai qi shi yi diar jiu wan yuan, qi nian tong qi wei yi qian si bai shi shi liu wan yuan.

Gross profit increased by 15.6% to 16.7 million from 14.5 million in the same period the last fiscal year.

Maoli liu qi shen zi bai fen zhi shi liu diar si, qi nian tong qi wei bai fen zhi shi wu diar liu, shui zhe wo men shou ru de bu duan zhen jia, gui mo xiao yin de yi tixian.

Gross margin increased to 16.4% from 15.6% in the same period last fiscal year, primarily due to the growing benefits of scale as revenues increased.

Operating expenses decreased by 22.1%,

to 3.1 million from 4.0 million in the same period the last fiscal year, primarily due to our continuous efforts to reduce costs and improve efficiency.

Operating income increased by 30%,

to 13.6 million from 10.5 million in the same period the last fiscal year. Net income increased by 30.2% to 11.6 million from 8.9 million in the same period the last fiscal year. Basic and diluted net income per share increased to 0.58 from 0.44 per share in the same period last fiscal year.

Moving to our balance sheet as of March 31st, 2025, we had cash and cash equivalents

and a restricted cash of $21.4 million compared with $20.8 million as of September 30, 2024. Our cash-in-cash equivalents and restricted cash primarily consists of cash and time deposits with terms of three months or less.

总之,聚龙上市以后,首次业绩报告表现强劲, 我们对此深感欣慰。 我们坚信,凭借公司稳健的财务状况和不断征钱的竞争力,

我们能够为股东创造长期价值。 To sum up, we were pleased to deliver a strong financial performance in our first earnings report as a public company. We remain confident that our solid financial position and growing competitiveness will empower us to deliver long-term value to our shareholders.

我的发言到此结束。 现在可以开始提问。 有请主持人。

Okay, this concludes our prepared remarks today. We will now open the call to questions. Operator, please go ahead.

Thank you. We will now begin the question and answer session. If you wish to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1, 1 again. For the benefit of all participants on today's call, If you wish to ask management your question in Chinese, please immediately repeat your question in English. Please stand by while we compile the Q&A roster.

Once again, if you wish to ask a question, please press star 1, 1 on your telephone. There seems to be no questions. I will now hand the call back to management for closing remarks.

Thank you once again for joining us today. If you have further questions, feel free to contact Geelong's Investor Relations through the contact information provided on our website.

This concludes this conference call. You may now disconnect your line. Thank you.