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HONG KONG, Feb. 10, 2021 /PRNewswire/ -- Wine's Link International Holdings Limited ("Wine's Link" or the "Company"; HKEX: 8509) announced the unaudited results of the Company and its subsidiaries (collectively, the "Group") for the third quarter ("3Q2020") and nine months ended 31 December 2020 (the "Period").
Results Highlights for 3Q2020 and the nine months ended 31 December 2020, as compared to same period of last year:
During the Period, despite the outbreak of the novel coronavirus ("COVID-19") pandemic, the wine industry in Hong Kong has seen an increasing trend, driven by the expansion of off-trade distribution channels such as grocery stores and convenience stores.
Solid Financial Results and Signs of Gradual Recovery in 3Q2020
During the Period, the Group's revenue amounted to HK$204.3 million, down by approximately 7.2% from approximately HK$220.1 million compared to the same period last year. The decrease was primarily caused by the outbreak of COVID-19. Yet, revenue for 3Q2020 surged 7.3% to approximately HK$90.2 million compared to the same quarter last year, showing a gradual recovery of sales in 3Q2020.
The overall gross profit margin for the Period increased 3.7 p.p. to approximately 24.1% compared to the same period last year. A relatively higher gross profit margin was recorded due to the increase in the sales of certain highly sought-after Premium Collectible Red Wine which yielded a relatively higher gross profit margin.
Selling and distribution expenses for the Period decreased from approximately HK$13.1 million to approximately HK$11.5 million compared to the same period last year, which was primarily attributable to a decrease in rent and rates in connection with the rental concession granted by the landlords of the retail stores in light of the outbreak of COVID-19.
During the Period, the Group recorded robust growth in profit, notwithstanding the challenging operating environment. Profit and total comprehensive income attributable to the owners of the Company for the Period amounted to approximately HK$17.1 million, representing a growth of 37.2% compared to the same period last year. For 3Q2020, the Group even recorded an increase of 93.6% in profit and total comprehensive income attributable to the owners of the Company to HK$12.6 million. The board of directors of the Company does not recommend the payment of an interim dividend to the shareholders of the Company for the Period (2019: nil).
Accelerated Digital Transformation and Expansion of Sales Network
As an innovator in a traditional industry, Wine's Link attaches great importance to the digital transformation of its business. The Group successfully implemented its e-commerce platform to further enhance its fine and luxury wine business (i.e., red wine with selling prices at or above HK$10,000 per bottle) and to diversify its income stream as well as achieve a synergistic effect with its existing business. During the Period, the Group has developed and launched an online auction platform. Aside from online auction platform, the Group also expanded its geography by setting up an office in Shanghai, China, to promote its products and expand its sales network through various marketing and sales activities including wine dinners, master classes, wine trips and excursions. The Group is set to expand its business from the wholesale and retail of a wide spectrum of wine products and other alcoholic beverages to delivering a luxury lifestyle and wine experiences to wine lovers, collectors and aspiring young entrepreneurs. The Group believes that the aforesaid developments will optimize its business portfolio and bolster a sustainable and healthy performance of the Group in the long run.
Successfully Completed the Online Auction and Achieved Satisfactory Results
The Group held its first rare and fine wine online auction from 25 Jan to 7 Feb 2021. It was an online timed-auction that allows bidders to place their bids throughout the auction period. Key lots in this auction include a Nebuchadnezzar (15L) bottle of 2000 Château Mouton Rothschild, a bottle of 1985 Henri Jayer Richebourg Magnum (1.5L) and a sixty-bottle 1951 - 2010 Penfolds Grange Vertical Collection. The online auction drew considerable attraction from young entrepreneurs and top executives of large Chinese corporations. Amongst the top bidders was Yi Hai Yan (also known as Mr. Yi), Executive President of Tencent Guangdong Network on behalf of herself and her private circle. The two-week auction was well received by the Company's VIP clients and achieved remarkable results. The highest bid price for the lots was more than HK$5 million.
Prospect
The global economy and retail environment remain uncertain and full of challenges. However, the wine industry found a silver lining emerging from the increasing interest of general customers in wine. As a result of the proven health benefits and high affordability of wine products, customers' increasing interest is expected to benefit the wine industry and the Group in the long run.
Ms. Shirley Wong, Founder and Chief Executive Officer of Wine's Link, concluded, "Though facing the continuing impact of the COVID-19 on the economy, the Group's results for 3Q2020 still performed better as compared to the same quarter last year, showing a gradual recovery of sales in the wine industry. In addition, the Group has benefited from the popularization and younger trend of wine, resulting an increasing demand for wine from consumers. The Group has also successfully developed and launched an online auction platform. The Group completed its first rare and fine wine auction recently and recorded satisfactory auction results. Looking ahead, the Group will further refine and expand its business, and put more emphasis in diversifying and creating new sales channels and expanding its business geographically in order to bring better returns to shareholders."
About Wine's Link
Wine's Link is a fine wine company that has been listed on the Hong Kong Stock Exchange since January 2018. As one of the market leaders in the wine industry in Hong Kong, the company aims to act as a bridge between wine consumers in Asia Pacific and top wine producers around the world.
