Oi Wah Announces 2015 - 2016 Annual Results

Profit attributable to shareholders and revenue increase 14.1% and 27.4% respectively

Interest income from mortgage business increases 46.8%

HONG KONG--()--Oi Wah Pawnshop Credit Holdings Limited

Financial Highlights

  Year ended 29 February
HK$   2016   2015   Change
Revenue 186,657,644   146,516,719   +27.4%
Profit before taxation 109,367,871 96,125,260 +13.8%
Profit attributable to shareholders of the Company 91,365,939 80,091,046 +14.1%
Net profit margin 48.9% 54.7% -5.8ppt
Earnings per share (HK cents) 4.4

3.91

+12.8%
Dividend (HK cents)
—Final dividend

0.652

3.0
—Special dividend 0.43 Nil
 

The board of directors of Oi Wah Pawnshop Credit Holdings Limited (HKEx stock code: 1319, the “Group” or “Oi Wah”) announced its annual results and its financial position. For the year ended 29 February 2016 (“FY2016”), profit attributable to shareholders of the Company has increased by 14.1% and reached approximately HK$91.4M (year ended 28 February 2015 (“FY2015”): approximately HK$80.1M). The Board of Directors recommends a final dividend of HK$0.65 cents and special dividend of HK$0.43 cents.

In FY2016, the Group recorded revenue of approximately HK$186.7M (FY2015: approximately HK$146.5M), representing an increase of approximately 27.4%. The increase was attributable to an increase in our interest income from mortgage business by approximately 46.8%.

Business Review

Mortgage loan Business

During FY2016, the mortgage loan business has been a major source of income of the Group. During the year, the interest income increased from approximately HK$85.5 million in FY2015 to HK$125.6 million in FY2016, representing an increase of 46.8%. Revenue generated from the mortgage loan business in FY2016 accounted for approximately 67.3% of the Group’s total revenue during the year. The mortgage loan receivables increased from HK$543.2 million at 28 February 2015 to HK$890.8 million at 29 February 2016, representing an increase of 64.0%. During the year, there were 251 new cases of mortgage loan transactions while no bad debt was recorded.

Despite the uncertainties of the local economy and property market, our Group observed that the demand for mortgage loan is still robust. During the year, our mortgage loan business has maintained a steady growth with fair asset quality. The Group will continue to implement a prudent strategy, to maintain its focus on high net worth customers and remain cautious when granting mortgage loans. In order to broaden our income sources and customer base, the Group will continue to partner with other money lenders to grant syndicated mortgage loans of large principal amounts.

Pawn loan business

During FY2016, the revenue from the pawn loan business slightly increased to HK$61.1 million, with aggregate loan amount increased 3.1% to HK$595.7 million (FY2015: HK$578.0 million). Average loan amount increased to approximately HK$5,700 per transaction (FY2015: HK$5,200 per transaction).

During the year, the Group continued to channel resources to advertising and promotion to enhance the Group’s brand awareness. Such effort has generated demand of one-to-one pawn loan appointment services for pawn loans that exceed HK$0.1 million. Number of pawn loan transactions with such amount granted increased from 325 transactions in FY2015 to 354 transactions in FY2016.

Prospects

Looking forward, the Group expects the demand for mortgage loan in Hong Kong to remain robust. The Group will continue to expand its business in a cautious and prudent manner, with measures such as increasing the proportion of first mortgage of mortgage loan receivables. The Group will actively seek diversified financing channels (such as issuing bonds, obtaining loans from overseas banks, etc) to maintain abundant capital reserve, in order to fulfill customers’ needs and expand the Group’s market share.

Regarding to the pawn loan business, the Group is of the view that luxurious goods market has bottomed and that its pawn loan business will remain stable. To provide more convenient services to customers, the Group has enhanced its website in October 2015 to provide mortgage loan application and pawn loan valuation services to customers via mobile devices at anywhere and anytime.

Mr. Edward Chan, Chairman and CEO of the Company, said, “Despite the weak of the retail market and uncertainties of the local property market, our Group remain steady growth in FY2016. We are optimistic of mortgage loan and pawn loan business. We aim to provide better return to our shareholders and investors.”

About Oi Wah Pawnshop Credit Holdings Limited

Oi Wah is a financing service provider in Hong Kong, mainly providing secured financing, including pawn loans and mortgage loans. According to the Ipsos Report, Oi Wah is the largest pawn loan service provider in Hong Kong in 2011 in terms of loan amount granted and number of pawnshops, and has been constantly growing since. The Group established its first pawnshop in 1975 and currently owns 11 pawnshops in various locations in Hong Kong. Oi Wah diversified into mortgage loan business in 2009.

1 Amount for the year ended 28 February 2015 adjusted for the bonus shares issued on 18 August 2015
2 The final dividend proposed for 2016 is calculated based on 2,120,000,000 ordinary shares (2015: 450,000,000 ordinary shares) in issue as at 29 February 2016.

Contacts

Stimulus Investor Relations
Hill Ho, +852 6505 1569
hill.ho@stimulus-ir.com
or
Rachel Fong, +852-6180 1691
rachel.fong@stimulus-ir.com

Contacts

Stimulus Investor Relations
Hill Ho, +852 6505 1569
hill.ho@stimulus-ir.com
or
Rachel Fong, +852-6180 1691
rachel.fong@stimulus-ir.com