The board (the “Board”) of directors (the “Directors”) of OKG Technology Holdings Limited (the “Company”, together with subsidiaries of the Company, the “Group”, 1499.HK) is pleased to announce the audited consolidated financial results of the Group for the year ended 31 March 2023 (the “Year”).
The revenue of the Group for the Year was approximately HK$356.4 million. Profit attributable to the owners of the Company for the Year amounted to approximately HK$43.5 million, compared to a loss of approximately HK$58.1 million for the year ended 31 March 2022. This successful financial turnaround from loss to profit was mainly attributable to the explosive growth of the Group’s digital assets related businesses, which have become the most important growth driver of the Group.
The gross profit of the Group for the Year amounted to approximately HK$155.2 million, representing an increase of approximately 84.1% as compared with approximately HK$84.3 million for the corresponding period in 2022. The gross profit margin increased by 21.6 percentage points to 43.5% for the Year from 21.9% for the same period of last year. During the Year, the Group has further optimised its revenue structure through strategic diversification of its business operations. Notably, revenue generated from innovative businesses (apart from the construction-related business) now accounts for 47.0% of total revenues, a substantial increase from 7.6% during the same period of the previous year.
Promoting Business Diversification as a Catalyst for Sustained Profitability Enhancement
During the Year, the Group’s revenue from digital assets related businesses—including proprietary trading in digital assets and trust and custody services—surged to approximately HK$134 million, the gross profit amounting to approximately HK$92.8 million, which increased by 1,618.5% as compared with the corresponding period in 2022. The gross profit margin of this segment for the Year was approximately 69.0%, representing an increase of approximately 29.6 percentage points for the year ended 31 March 2022. Notably, the revenue from trading in digital assets and net fair value changes on digital assets was approximately HK$130 million, which increased by approximately 2,525.5% compared with HK$5.0 million for the corresponding period in 2022, constituting a significant increase. The market value of the Group’s digital assets was approximately HK$650 million, registering a growth of 16.1% from HK$560 million for the corresponding period last year.
At the end of the Year, the total assets of the Group’s custody clients were HK$313.5 million, increased approximately 11.8% compared with approximately HK$280.5 million as at 31 March 2022. During the Year, the revenue generated from the provision of trust and custody services was approximately HK$4.4 million.
Furthermore, during the Year, the Group’s technical services consistently strived for product optimisation and innovation, resulting in a revenue of approximately HK$34.4 million from this segment, which increased by 71.1% as compared with the corresponding period in 2022. The gross profit of this segment was approximately HK$19.5 million which increased by 160.0% as compared with the corresponding period in 2022.
Our wholly-owned subsidiary, OKLink Fintech Limited (“OKLink“), seized the policy opportunity to develop Onchain AML and KYT (Know Your Transaction) based on the clear licensing mechanism for virtual assets industry in Hong Kong. And recently OKLink completed its product upgrade. The Group now provides a wide range of product offerings through our Web3 one-stop data analysis platform oklink.com, which includes blockchain explorer (the “Explorer”), on-chain anti-money laundering solution (the “On-chain AML”), and on-chain monitoring solution (the “Chaintelligence”) for regulators’ supervision. OKLink now covers more than 100 blockchain networks, managing up to 3 billion address tags, and delivers comprehensive analyses of over 2 million projects. By performing multidimensional evaluations, comparisons, and risk identifications of this vast data and address tags, we’ve created visualized products that adequately meet the compliance and safety requirements of regulators, financial practitioners, virtual asset service providers, and law enforcement departments regarding on-chain assets.
Bright Prospects for Digital Asset Business: Actively Seizing Opportunities in an Era of Rapid Development
As an international financial center, Hong Kong has seen its economic development also damaged by the global economic downturn over the past few years. During this crucial moment of economic development, digital assets and Web3 space were frequently discussed among the public. On 31 October 2022, the Hong Kong SAR Government (the “Government”) officially issued the “Policy Statement on the Development of Virtual Assets in Hong Kong” (the “Policy Statement”). According to the Policy Statement, the Securities and Futures Commission (SFC) will be conducting a public consultation on how retail investors may be given a suitable degree of access to virtual assets under the new licensing regime. The Government will also be open to the possibility of having Exchange Traded Funds (ETF) on virtual assets in its market. Moreover, the Government and the regulators are exploring a number of pilot projects to test the technological benefits brought by virtual assets and their further applications in the financial markets.
On 1 June 2023, the “Guidelines for Virtual Asset Trading Platform Operators” and the “Anti-Money Laundering and Counter-Terrorist Financing Ordinance” have officially come into effect. The SFC has started to accept applications for virtual asset trading platform operators and allowed retail access to licensed virtual asset trading platforms. The new licensing regime coming into force demonstrates that Hong Kong maintains its leading position in the world’s innovation and compliance development of virtual assets and Web3.
The increasingly clear regulatory framework creates a good foundation for the Group to grow. With our long-term investments in product development and profound experiences accumulated over past years, the Group has already created competitive advantages for our products. We truly believe the technical services represented by OKLink can significantly enhance our product capability and market competitiveness. In addition, our proprietary trading in digital assets business, together with our trust and custody services, will maintain a sound momentum of development, and continue to contribute considerable cash flow for the Group’s developments.
Looking ahead, we are optimistic about the future development of digital assets and Web3 industry. We will also seize this new era opportunities, and actively explore long-term business development opportunities, to bring remarkable returns to the Shareholders in the long run. Meanwhile, we will continue to operate prudently our foundation works and ancillary services as well as construction wastes handling services in Hong Kong. We will assess and adjust our business segments based on the market environments and Company strategies, when appropriate.