【Press Release】Results Announcement – Strong Demand for Cybersecurity Solutions Profit Surges by 19.1%

(Hong Kong – 22 June 2020) The leading cybersecurity company in Hong Kong, Edvance International Holdings Limited (“Edvance International” or the “Company”, together with the Company’s subsidiaries, collectively the “Group”) (SEHK stock code: 01410.HK), is pleased to announce annual results for the year ended 31 March 2020 (“FY2020”). This is the Group’s first financial announcement since its successful transfer of listing to the Main Board.

The key financial and business highlights are as follows:

  • Total revenue increased by 6.7% to approximately HK$394.3 million, mainly attributable to increase in IT security services business which includes technical implementation services and maintenance and support services, as a result of increasing cybersecurity demand
  • Gross profit reached HK$104.8 million, representing an increment of 6.4% year-on-year. Gross profit margin remained stable at 26.6%
  • Profit for the year attributable to owners of the Company was approximately HK$23.3 million. Excluding the non-recurring transfer of listing related expenses of approximately HK$7.9 million, the Group should have recorded a significant growth of Profit for the year attributable to owners of the Company by 19.1% to HK$31.2 million.
  • Return on equity rose by 27.7% (excluding non-recurring transfer of listing related expenses) (FY2019: 21.8%)
  • The Board has recommended a final dividend of HK$0.01 per share (FY2019: HK$0.03 per share)

Recorded steady growth against the unfavourable environment, the Group retained the largest cybersecurity solutions provider locally 

Despite the ever-changing global environment and challenging local market conditions, Edvance International managed to deliver solid business and financial growth in FY2020. The strong push to virtualize services and provide services to the masses via cloud technology, tightened compliance requirements (e.g. Cyber Resilience Assessment Framework (“C-RAF”) launched by Hong Kong Monetary Authority) and general increase in cybersecurity needs against emerging cyberthreats, have created massive opportunities for cybersecurity solutions. With the strong demand, the Group achieved a steady growth of revenue by 6.7% to HK$394.3 million due to outstanding results for the established recurrent business segment and encouraging sales performance in popular products and services including privileged access management, next-generation firewall, SIEM solutions and data and application security.

According to a market research prepared by Frost & Sullivan, the Group retained its leading position as the largest IT Security Solutions provider in Hong Kong, representing 11% of the market share in terms of total revenue in 2018. During the year, the Group’s recurrent business grew steadily year-on-year and continued to benefit from strong recurrent business segment and stickiness with clients, requiring consistent maintenance and support services.  Apart from the core business that ensure steady cash flow, the Group also made overall strong headway in developing new businesses and projects, and endeavor to maintain significant resources to ensure client needs are sufficiently met.

Rapid growth of net profit by 19.1% after the Group’s successful transfer to Main Board

The Group successfully transferred to the Main Board of the Hong Kong Stock Exchange in December 2019, marking a significant milestone in the development of the Group. During the year, Edvance International utilised the raised capital for workforce expansion and equipment and system enhancement, with an aim to solidify its strengths to reinforce the leading market position in the cybersecurity industry. The Group achieved satisfactory performance after transferring to the Main Board and recorded net profit of HK$31.2 million, representing a substantial increase by 19.1% year-on-year, excluding the non-recurring transfer of listing related expenses of approximately HK$7.9 million.

Green Radar, the self-developed email security brand, has achieved initial success and satisfactory progress

The Group invested heavily in its self-developed email security brand, Green Radar, throughout the year and made satisfactory progress. New modules and enhancements were built and integrated, while operational routines were developed and implemented to improve overall security threat detection and response effectiveness. Taking advantage of cloud-based homegrown technologies, Green Radar offers cybersecurity solutions as a service, which effectively alleviate the shortage of cybersecurity experts. Meanwhile, it is an essentially cost-effective recurrent business made available to the larger community. The Group expects this scalable platform will significantly contribute to expand the business chain and gain market share.

Mr. Raymond Liu, Chairman and Executive Director of Edvance International commented, “Green Radar has achieved initial success this year, we also see great progress in respect of product development and marketing, the Group is confident that Green Radar’s positioning can meet the needs of SME market and will be an important growth engine going forward.”

Looking forward, Mr. Liu continued, “Migration of services to online environment for local businesses continue to create new demands in cybersecurity solutions and the Group continues to see there is an immediate tangible demand in the short-term, while longer term outlook remains positive. As the operating environment is currently facing a lot of constant changes, we will ensure our core business is well ran, whilst transforming and innovating to capture opportunities of tomorrow.”