Strong business performance amidst competitive environments
Revenue hit a record high of HK$300 million, up 25% YOY
(Hong Kong – 24 November 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 interim results for the six months ended 30 September 2022 (“FY2023 1H” or the “Period”).
The key financial and business highlights are as follows:
- Record breaking revenue of HK$300.9 million, representing an increase of approximately 25.5% YoY, or HK$61.2 million. The growth was driven by strong sustained demand for cybersecurity products and services during the Period
- Gross profit reached approximately HK$72.4 million, up 17.0% YoY; gross profit margin slightly decreased by 1.7% to 24.1%, mainly due to the product mix in the cybersecurity products segment, which generated a comparatively lower gross profit margin in FY2023 1H
- The loss attributable to owners of the Company was approximately HK$18.3 million (FY2022 1H: net profit of approximately HK$98.9 million). The change from net profit to net loss was due to the fair value loss on financial assets at fair value through profit and loss (“FVTPL”) of approximately HK$23.0 million in relation to the unlisted investment of the holding company of Hong Kong Digital Asset Ex Limited (“HKbitEX”)
- For illustration purpose, after excluding the impact of the fair value loss, the Group recorded net profit of approximately HK$7.1 million in the Period compared to a net loss of approximately HK$1.3 million for FY2022 1H.
Robust and persistent demand sled to a strong performance in cybersecurity businesses
During the Period, robust and persistent demand for cybersecurity solutions was seen in the market, which contributed to the performance of our cybersecurity business units. The cybersecurity products and services business continued to perform strongly, with revenue growth of approximately 25.5%. This was highlighted by project wins from key client sectors, including government and financial services institutions. The Company also expanded its product range to a Chinese-branded product, TianJi Partners, a leading provider of Digital Risk Protection (DRP) Solutions, to cater to the emerging need for mainland cybersecurity products in Hong Kong market.
Green Radar, the in-house email security brand also benefited from the strong market demand and delivered encouraging business performance. The brand further strengthened the reseller ecosystem through managed security service providers (MSSP) and has secured partnerships with one of the largest resellers of Microsoft 365 in Hong Kong. During the Period, Green Radar continued to gain traction in the enterprise segment, including winning businesses from extensive cooperation and receiving industry award recognitions for our flagship product, grMail.
Significant regulatory announcements paving way for the future growth of the financial services business
After having received the digital asset manager approval from the Securities and Futures Commission (SFC), Axion Global Asset Management Limited (“AGAM”) has expanded its regulated activities to provide virtual asset funds to professional investors and has successfully launched the Smart Beta Fund. In addition, we have delightedly appointed a new chief operations officer for AGAM as we look to strengthen our product development capabilities and introduce new regulated product offerings, including virtual asset advisory and discretionary account management.
The initiatives announced by the Hong Kong Government’s Financial Services and Treasury Bureau that set out the policy stance and approach towards developing a vibrant sector and ecosystem for Virtual Assets (VA) in Hong Kong were encouraging. The Group expects the ultimate implementation of those policies to provide a more favorable environment for regulated entities, including AGAM, to offer VA-related products and services, and attract investments from local and foreign investors.
Mr. Raymond Liu, Chairman and Group CEO of Edvance International, commented, “We believe demand for cybersecurity will remain strong, and the transformation to a subscription-based revenue model will help increase the stickiness of our services for our customers, eventually boosting our recurring income. The Group is also working diligently to execute the geographical expansion of Green Radar’s international footprint beyond Singapore and into the Association of Southeast Asian Nations (ASEAN) markets.”
“On the financial services side, AGAM will ramp up our product development efforts and leverage our position as one of the first SFC-approved virtual asset fund managers to capture growth opportunities in this nascent but fast-growing asset class,” Liu added.