Company: JXG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043744
Chunk: 123

Company: JX Luxventure Group Inc.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 123
---
.01 in 2022. The increase is mainly due to the Company started its imported luxury vehicle business in 2023.

Cost of sales and gross profit rate

Cost of sales primarily consisted of (a) the purchased costs of products
sold in connection with the revenue from cross-border merchandize, (b) the cost to purchase tourism supply up front and cancelling cost
if any, and (c) the cost for outsourcing the travelling work to certain travel agencies.

Our cost of sales increased from $26.4 million in year 2023 to $41.5
million in year 2024, by 57%. The increase was mainly due to the increase of cost in connection with the increasing cross board merchandize
segment’s revenue in year 2024 compared to 2023.

The gross profit ratio kept at 17% in 2023 and 2024. However, the gross
profit ratio of our tourism segment decreased from 9% in 2023 to 3% in 2024, which contributed 44% of total revenue in 2024. The decrease
in the gross profit ratio of our tourism segment mainly resulted from the Company intentionally decreasing its selling prices due to the
competition in this segment. The gross profit ratio of technology sub-segment in 2024 decreased to 39% from 99% in 2023 due to the reason
that amortization of purchased software was recorded as cost of revenue in 2024, while no such amortization in 2023. The gross profit
ratio of cross board merchandise sub-segment increased from 10% in 2023 to 27% in 2024. The increase of gross profit ratio is mainly due
to the higher gross margin of imported luxury cars and yachts sales in 2024.

Our cost of sales decreased from $78.4 million in year 2022 to $26.4
million in year 2023. The decrease was mainly due to the decrease of cost in connection with the decreasing tourism segment’s revenue
in year 2023 compared to 2022.

The gross profit ratio increased from 2% in 2022 to 17% in 2023, which
is mainly due to the reason that the suppliers offered to the Company lower purchase prices as compared to 2022 due to the Company achieved
certain purchase target set up by airline companies for year 2022. The gross profit ratio of technology sub-segment in 2023 and