HK TECH VENTURE(HK:01137)2021-09-14 09:00Company Overview - The company officially changed its name to "Hong Kong Technology Venture Company Limited" in July 2021, reflecting its focus on technology and exploration for future development [6]. - Shoalter Technology Limited is playing a crucial role in driving technological advancements and applications within the company [10]. - The company has been focusing on technological innovations, which have been the cornerstone of its success over the past 30 years [6]. - The company established its first overseas R&D center in Taiwan in October 2020, alongside an R&D center in Hong Kong, employing approximately 300 technology professionals [54]. E-commerce Performance - HKTVmall has established itself as the largest online shopping mall in Hong Kong, with a unique business model supported by years of experience and data analytics [8]. - The company believes that HKTVmall will maintain its leadership position in the Hong Kong e-commerce market until a competitor invests billions to build a similar infrastructure [8]. - The management is confident in their execution capabilities and the maturity of their team, which enhances their competitive edge [8]. - The company aims to develop HKTVmall into an online ecosystem, contributing not only to profitability but also serving as a successful case study in technology-driven business models [8]. - Total merchandise transaction value for the six months ended June 30, 2021, reached HKD 3,040 million, representing a 10.7% increase from HKD 2,746 million in the same period last year [17]. - The average daily order volume increased by 21.5% to approximately 36,100 orders, compared to 29,700 orders in the previous year [17]. - The number of consolidated independent customers rose to 896,000, a 10.2% increase from 813,000 in the prior year [17]. - HKTVmall has achieved profitability within five years, distinguishing itself as one of the few e-commerce operators to do so globally [15]. - The company maintained a leading position in the Hong Kong e-commerce market despite economic challenges [24]. Financial Highlights - Net profit for the period was HKD 95,804,000, a decrease of 12.3% from HKD 109,277,000 [23]. - Adjusted EBITDA was HKD 144,445,000, down 4.9% from HKD 159,412,000 in the prior period [23]. - The average order value decreased by 8.5% to HKD 465 from HKD 508 in the previous year [17]. - The net profit margin decreased to 3.2% from 4.0% in the previous period [20]. - The company achieved approximately 43.4% to 46.1% of its annual merchandise transaction target of HKD 6,600,000,000 to HKD 7,000,000,000 in the first half of the year [26]. - The total gross merchandise transaction value for completed orders reached HKD 3,028,488,000, representing a 12.6% increase compared to HKD 2,689,307,000 in the previous period [20]. - Revenue for the first half of 2021 increased by 13.3% to HKD 1,518,100,000, up from HKD 1,340,000,000 in the first half of 2020 [55]. - The gross profit for the same period was HKD 232,461,000, a decrease of 6.5% compared to HKD 248,806,000 in 2020 [91]. Strategic Initiatives - The company plans to launch the automated retail store and system in the first half of 2022, aiming to revolutionize the retail experience globally [12]. - A partnership was established with PT Kalbe, a major Indonesian healthcare group, to develop an online shopping platform focused on health and wellness products [12]. - The company aims to increase its workforce from approximately 300 to 400 employees by the end of the year, focusing on software, hardware, and mechanical engineering talent [12]. - The company plans to launch a pilot program for its fully automated retail system in the first half of 2022, with an expected rollout to about 10 stores [82]. - The company launched the HKTV eCommerce Academy in August 2021 to support retail partners' digital transformation through various online marketing training courses [76]. Marketing and Customer Engagement - The company implemented various marketing initiatives to reactivate dormant customers and attract new ones, including a senior citizen discount program that has attracted over 61,000 members [41]. - The average daily order volume increased from 35,700 in January 2021 to 40,600 in July 2021, driven by growth from 2020 and new marketing activities [42]. - The company aims to strengthen online-offline synergy, with 55.0% of new customers engaging with HKTVmall through offline channels in the first half of 2021 [74]. - The introduction of a simplified app for elderly customers resulted in a 204% increase in visits from gamers compared to non-gamers in Q2 2021 [48]. Operational Efficiency - The company continues to enhance its logistics and delivery systems to provide a seamless end-to-end service experience for customers [8]. - The automated retail system is designed to operate without human intervention, optimizing store space and reducing operational costs [12]. - The delivery cost as a percentage of total GMV was stable at 11.3% in the first half of 2021, compared to 11.4% in the first half of 2020 [50]. - The logistics cost as a percentage of completed orders decreased slightly from 11.4% in the first half of 2020 to 11.3% in the first half of 2021 [57]. Shareholder and Governance - The company declared an interim dividend of HKD 0.08 per share, amounting to HKD 73,306,000, compared to no dividend declared for the same period in 2020 [122]. - The board has proposed an interim cash dividend of HKD 0.08 per ordinary share for the six months ended June 30, 2021, compared to no dividend for the same period in 2020 [179]. - The company emphasizes maintaining sufficient capital and reserves for sustainable growth while sharing profits with shareholders [177]. - The audit committee has reviewed and discussed the unaudited interim results for the six months ended June 30, 2021 [176].