Strong Vaping Contribution Drives Jiayao Holdings to Expect More Than 40x YoY Growth in First-Half N

On August 4, Jiayao Holdings released a positive profit forecast, expecting to achieve a net profit after tax of approximately RMB 29 million to 31.5 million in the first half of 2023, compared to a net profit after tax of approximately RMB 700,000 in the same period of 2022. The increase in net profit after tax is mainly due to the e-cigarette division making a significant contribution to the group's gross profit, achieving rapid growth and a high profit margin in the first half of 2023.
Public information shows that Shenzhen Jiayao, on December 29, 2021 (an indirect wholly-owned subsidiary of Jiayao Holdings), entered into an investment cooperation agreement with Zhan Xingyu, Kong Lei, and Shenzhen Haohan Yangtian Technology Co., Ltd. (a licensed e-cigarette enterprise), under which Shenzhen Jiayao agreed to subscribe for RMB 14 million of the new registered capital of the target company at a cost of RMB 14 million. Upon completion, Shenzhen Jiayao, Zhan Xingyu, and Kong Lei will hold 70%, 20%, and 10% of the equity of the target company, respectively; Haohan Yangtian will become an indirect non-wholly-owned subsidiary of the company; and Haohan Yangtian's financial performance will be consolidated into Jiayao Holdings' financial statements.
According to Jiayao Holdings' 2022 annual report: in terms of the e-cigarette business, since focusing on expanding this business in 2022, Jiayao Holdings has been committed to expanding its business in the field of e-cigarette peripheral products and increasing its market share and development in this division. In the reporting year, this division generated revenue of RMB 217 million, accounting for approximately 22.4% of the group's total revenue.