Robust business performance with revenue up 28%
Increased investments and expenses for the business expansion
(Hong Kong – 22 June 2022) Edvance International Holdings Limited (“Edvance International” or the “Company”, together with the Company’s subsidiaries, collectively the “Group”) (SEHK stock code: 1410.HK), a technology and investment holdings company in Hong Kong, is pleased to announce its annual results for the year ended 31 March 2022 (“FY2022” or the “Year”).
The key financial and business highlights are as follows:
- Revenue increased by approximately 28.0%, or HK$114.9 million, to HK$525.4 million YOY. The growth was driven by continuous strong demand of core cybersecurity products and services during the Year
- Gross profit amounted to approximately HK$128.4 million, up 3.5% YoY; gross profit margin decreased to 24.4%, mainly due to the product mix in the cybersecurity products segment, which generated a comparatively lower gross profit margin in FY2022
- Profit attributable to owners of the Company was approximately HK$22.8 million (FY2021: HK$34.7 million); due to the increase in operation expenses incurred to cope with the Group’s business expansions
Strong market demand led to robust performance in cybersecurity businesses
The cybersecurity products and services business continued to perform strongly with revenue growth of approximately 28.0%. The Group continues to see robust demand for cybersecurity solutions, especially in the enterprise and government sectors. The Group also expanded its solutions catalogue by working with globally renowned providers to solidify offerings across seven focused areas in cybersecurity. Green Radar, the Group’s in-house email security solution brand, has made tremendous progress in the email protection market during the Year. The Company tripled the number of mailboxes protected and won contracts from several well-known brands and multinational conglomerates.
Higher operating costs and investments for future growth
The Group acted decisively during the reporting period to manage the challenges brought about by the pandemic and the changing geopolitical environment. The Group’s future success will continue to depend greatly on ability to attract and retain talent and expertise to service customers. During the Year, the Group incurred higher operating expenses especially in salaries and distribution and selling expense to ensure employee remuneration to remain competitive in a market where there is a shortage of IT professionals, especially in the cybersecurity field. On the other hand, the Group also invested substantially in research and development and acquisitions to grow and scale its business in the long term. In FY22, the Group entered into sale and purchase agreements to purchase Maldun Network Limited, a technology service provider, and Silverstone Network Limited and its subsidiaries, an IT security solution provider, respectively, to enhance the Group’s competitiveness and scale in the email security business.
Significant milestone achieved as one of the first regulated digital asset managers
For the financial services and investment business, Axion Global Asset Management Limited (“AGAM”), an indirect non-wholly-owned subsidiary of the Group, was granted the approval from Securities and Futures Commission of Hong Kong (“SFC”) to manage virtual assets in January 2022, and launched its flagship “Smart Beta Fund”, a risk-adjusted fund tracking the top ten qualified cryptocurrencies in market value. In addition, the Group’s long-term investment in Hong Kong Digital Asset EX Limited (“HKbitEX”) recorded fair value gain for the Group. These are strategic initiatives to elevate the Group’s role in the digital asset market and accelerate the business growth. The Group believes that with greater clarity in regulation and higher level of participation from institutions and new entrants, it is well-positioned to capture the opportunities growth ahead.
Growth opportunities ahead
Looking ahead, effort is underway by the Group to align and augment its sales approach to a recurring revenue model by increasing the proportion of subscription-based cybersecurity services, which will provide a more sustainable income stream. For the Green Radar business, the Group is also actively seeking to expand its service offerings beyond email protection to broaden the “security-as-a-service” approach.
Mr. Raymond Liu, Chairman and Group CEO of Edvance International, commented, “Cybersecurity has become a top-of-mind concern of business decision maker in the digital era, and we see a huge opportunity to help our customers adopt cybersecurity easily and cost effectively. To this end, we plan to ramp up our research and development spend to strengthen our offerings towards a service and subscription business model. Similarly, we are excited by the prospect of our financial services and investment business and, we believe will be a significant catalyst to the Group’s growth in the future.”