(Hong Kong – 24 November 2021) The innovative technology company in Hong Kong, Edvance International Holdings Limited (“Edvance International” or the “Company”, together with the Company’s subsidiaries, collectively the “Group”) (SEHK stock code: 1410.HK), is pleased to announce its interim results for the six months ended 30 September 2021 (the “Period” or “FY2022 1H”).

The key financial and business highlights are as follows:

• Profit attributable to owners of the Company surged 560.4% to HK$98.9 million. Such substantial increase was attributable to a fair value gain on financial assets at fair value through profit or loss (“FVTPL) of HK$100.2 million in respect of the Group’s investment in a holding company of Hong Kong Digital Asset Ex Limited (“HKbitEX”), a regulated virtual asset trading exchange
• Revenue increased by 19.6% or HK$39.3 million to HK$239.7 million YOY. The growth was driven by continuous strong demand for its core cybersecurity product and services during the Period
• Gross profit amounted to HK$61.9 million, up 9.9% YoY; gross profit margin decreased slightly to 25.8%, mainly because a relatively larger share of the Group’s revenue for FY2022 1H came from cybersecurity product business, which had a relatively lower profit margin compared with cybersecurity services business

Sustained and steady growth in core cybersecurity businesses thanks to favourable market demand

The Group achieved sustained and steady growth in its core cybersecurity businesses for FY2022 1H. As the COVID-19 pandemic led to the new normal of remote working, organization are more vulnerable to cyber threats and in need of better protection from internet than ever before. Against this backdrop, the Group saw strong demand for its cybersecurity product and services, especially from the government and enterprises sectors, during the Period.

Meanwhile, the increased traction in cloud adoption has been favourable to Green Radar, the Group’s cloud-based email security-as-a-service business unit. During the Period, Green Radar secured partnerships with three major telecom service players in Hong Kong, providing Green Radar a full coverage of the corresponding client base from small and medium sized enterprise to large enterprise.

In August 2021, the first-ever email threat index focusing on Hong Kong market, Green Radar Email Threat Index(“GRETI”), was launched as an extension of SOC (“Security Operations Center”) data use to give cybersecurity practitioners more insights into the risk level of email attacks on a quarter basis.

First success in growing the digital asset ecosystem

During the Period, the Group continued to execute its three-pronged strategy of venture investment, innovation and digital asset management through its investment and incubation arm Axion Global Digits (“AG Digits”).

On the venture investment front, the Group was buoyed by its long-term investment in a holding company of HKbitEX. Based on the post money valuation of the Group’s holding of its Series A2 Preference Shares, a fair value gain of HK$100.2 million, which represents a more than fourfold increase over its original investment, was recognised during the Period. This marked the Group’s first major success in capitalising on its fast-growing digital asset ecosystem.

On track to become one of the first fully regulated digital asset managers in Hong Kong

For asset management, Axion Global Asset Management Limited (“AGAM”), an indirect non-wholly owned subsidiary of the Company, has completed its transition into an institutional grade asset manager focusing on digital assets during the Period. Great strides have been made to become one of the first asset managers to operate a fully regulated digital asset management business and serve the needs of institutional and family office investors in Hong Kong. The team is also expanded to a new office location in Central in preparation for launching our digital asset products.

More exciting progress coming in FY2022 2H

In the second half of FY2022, the Group expects all ongoing initiatives to be delivered on course, including (i) the introduction of an enhanced service model to ESH (Hong Kong) Limited, its newly established cybersecurity service provider, to ensure effective use of solutions by clients; (ii) the approval of license uplift for AGAM followed by a virtual asset fund launch; and (iii) the roll-out of DocuRoom. In addition, it is expected that high client stickiness and strong renewal business of cybersecurity will continue to contribute to steady income growth and drive solid results for full year.

Looking ahead, the Group is set to benefit from the future of digitalisation, in a way to recognise strong pipeline in cybersecurity product sector in FY2022 2H. Mr. Raymond Liu, Chairman and Group CEO of Edvance International, commented, “We remain optimistic about the cybersecurity market and believe our continuous investment in research and development will enable the Group to stay ahead of the curve for years to come. Our overall goal of building up a digital asset ecosystem remains unchanged. With its sophisticated technology knowhow, experience and network, edvance is well positioned to tap into this disruptive market and unlock its full potential to maximise returns for our shareholders.”