The Group's Revenue Hits New Heights
Net profit for 1H2023 increased more than 2.8 times YoY
Benefited from the Full Resumption of Normal Travel
Revenue Continues to Generate Profit in Future
Results Highlights
HONG KONG, Aug. 31, 2023 /PRNewswire/ -- Tycoon Group Holdings Limited ("Tycoon Group" or the "Group", Stock Code: 3390.HK), an omnichannel brand marketing and management service integrator of health products in Hong Kong, announced its unaudited consolidated interim results for the six months ended 30 June 2023 (the "Period" or "1H2023").
In early 2023, normal travel fully resumed between Hong Kong and Mainland China, with a rebound in traveller arrivals. This, coupled with the consumption vouchers issued by the HKSAR Government to stimulate the local economy, has provided further support to local consumption. During the Period, the Group's revenue is back on track and continues to generate profit. The Group recorded revenue of approximately HK$666.3 million, an increase of 13.3% from the six months ended 30 June 2022 (the "Last Period") of of HK$588.2 million. The gross profit of the Group increased by 34.9% to HK$173.1 million for 1H2023 as compared to that of HK$128.4 million for the Last Period, and the gross profit margin increased by 4.2 percentage points to 26.0% from 21.8% for the Last Period. The Group's net profit reached a record high for the half-yearly results, surging to HK$87.0 million (1H2022: HK$22.8 million), representing an increase of 281.9% year-on-year. Increase was primarily due to a significant rebound in the number of Individual Visit Scheme ("IVS") travellers as a result of the full resumption of normal travel between Hong Kong and Mainland China, and the relaxation of anti-epidemic restrictive measures, as well as the Group's continuous optimisation of its product portfolio, which has led to an increase in overall revenue and gross profit. The Directors has resolved to declare the payment of an interim dividend of HK3.5 cents per ordinary share for 1H2023 to the Shareholders (1H2022: Nil).
Building on the rapid growth, the Group will focus its resources on promoting its distribution business
During the Period, the Group mainly operates three major operating segments, namely distribution business, e-commerce business and retail store business. The sales environment of the Group's distribution business in Hong Kong and Macau has improved significantly as a result of the rebound in the number of travellers since the full resumption of travel between Hong Kong, Macau and Mainland China. In the first half of 2023, the Group's distribution sales in Hong Kong grew significantly by 28.0% year-on-year, while distribution sales in Macau also rose by 10.9%, with the growth attributable to the synergies under the resumption of normal travel between the three places. The Group has also invested resources in recent years to step up its efforts in expanding the Southeast Asian market, with the Group's distribution sales in Southeast Asia rising significantly by 114.2% year-on-year in 1H2023.
In view of the fact that the Group's distribution business is growing rapidly and is expected to return to the pre-epidemic level, the Group will focus its resources on promoting the distribution business in the future. In July 2023, the Group announced the sale of a 51% stake in Combo Win Asia Limited ("CWA"), for a consideration of HK$130 million. The proceeds from this transaction will provide the Group with more resources to strengthen its distribution business, including the distribution business in Hong Kong, Macau and Southeast Asia and its own-brand development. This will enable the Group to continue to diversify its product portfolio, increase gross profit margins and generate better results in the long term.
In view of the rebound in traveller arrivals, the Group is keen to widen its sales channels to offline retail shops. In May 2023, the Group acquired an additional 12% equity interest in Hong Ning Hong Limited ("HNH") at a cost of HK$9.12 million. Together with the 49% equity interest already owned by the Group, the Group now owns a total of 61% equity interest in HNH. Upon completion of the acquisition, HNH became a subsidiary of the Group, and its performance is consolidated into the financial results of the Group. The operating subsidiary company of HNH is principally engaged in the retail and wholesale of pharmaceutical products and proprietary medicines in Hong Kong. The e-commerce business continued to make steady profit contributions to the Group, during the Period, the segment result of the e-commerce business amounted to HK$19.8 million (1H2022: HK$14.1 million).
Acquired the distribution rights of many well-known best-selling brands and actively developing its own brands
During the Period, the Group continued to develop the omnichannel brand marketing and management business and has acquired the distribution rights of a number of internationally renowned brands, including the sole distributorship in China for global No.1 selling probiotic brands, Culturelle®, which has sold well because of its ability to promote intestinal health, maintain the ecological balance of the intestine and strengthen the immune system. The Group has also acquired the distribution rights for Japanese anti-hair loss and hair protection brand, Kaminowa; as well as French No.1 baby washing care brand, Biolane. For Biolane, the Group also has exclusive distribution rights in Singapore and Malaysia. The Group has acquired the exclusive distribution rights in Hong Kong for Korean anti-hair loss and hair protection brand, Dr Banggiwon, as it is optimistic about the future sales prospects of anti-hair loss products. In addition, the Group has also secured exclusive distribution rights in Hong Kong and Macau for Nu-Prep, one of the best-selling star products of the Malaysian herbal health product brand from Biotropics Malaysia Berhad.
In addition to its brand agency business, the Group is also actively developing its own brands, including the well-received brands of "Boost & Guard Pro (BG Pro 博健專研)", "Craft by Wakan (和漢匠心)", and "Kinmen Qiangxiao (金門強效)". The Group will also invest more resources in its own brands with higher gross profit margins, and will develop and launch more of its own brands and different products to cater for the needs of Mainland visitors travelling under the IVS after the reopening of the border, as well as the new trend of the PCM and healthcare products market as a whole.
Focus on Southeast Asia market
In order to build a diversified sourcing network and enrich its product portfolio, the Group has been strengthening its overseas presence, and has established sourcing centres in Japan, South Korea, Singapore, Malaysia, Thailand, Vietnam, Macau, Australia and France, diversifying and internationalising the product portfolio.
The Group's future development strategy will focus on Southeast Asia market. It has set up companies in Singapore and Malaysia before going public. With the passing of the epidemic, the Group will put more resources into the Southeast Asian market, focusing on strengthening the distribution business in Malaysia and Singapore, and making reference to the successful distribution model in Hong Kong by distributing products through large personal care product chains in Malaysia and Singapore, which is expected to become another major profit-contributing region for the Group in the future.
Mr. Wong Ka Chun Michael, the Chairman and the Chief Executive Officer of Tycoon Group, said, "With the full resumption of normal travel between Hong Kong and Mainland China early this year, the overall business environment of the retail market has continued to improve. Coupled with the fact that the second half of the year is traditionally a peak season for consumer spending, with a large number of long holidays as well as a number of international events, it is expected that Hong Kong's overall traveller arrivals in the second half of the year will continue to rise, which will help to boost local consumer spending and confidence, as well as the Group's offline sales business. On behalf of the Group, I would like to express my deepest gratitude to our shareholders, partners, employees and stakeholders for their steadfast support and patience during the epidemic. With all the favorable factors, I believe that the Group's offline sales business will once again take off and lead the overall development to new heights."
About Tycoon Group Holdings Limited (Stock Code: 3390)
Tycoon Group is a reputable omnichannel brand marketing and management service integrator of health and well-being related products in Hong Kong. The Group specialises in providing one-stop services for PCM, health supplements, skincare, personal care and other healthcare products, including omnichannel brand agent, marketing, management, distribution and sales. The Group has established a strong online and offline sales network in Hong Kong, Macau, the PRC and Southeast Asia by cultivating the industry for many years with the mission of bringing health and vitality to consumers in Mainland China, Hong Kong, Macau and Asia-Pacific. The Group has provided over 200 local and foreign brands. With a vision of establishing its own brands, the Group developed its own-brand products including "Boost & Guard Pro", " Craft by Wakan", and " Kinmen Qiangxiao". Tycoon has established sound relationships with chain retailer customers, with the top two chain retailer customers operating over 470 stores in Hong Kong. The Group is also one of the major distributors for PCM in Hong Kong. For more details, please visit the Group's official website: https://www.tycoongroup.com.hk/