Oi Wah recorded net profit of 86.4 million with improved net interest margin in FY2024
- Written by Telegraph Magazine
Proposed final dividend of HK$0.76 cents per share
HONG KONG SAR - Media OutReach Newswire - 28 May 2024 - The board of directors of Oi Wah Pawnshop Credit Holdings Limited (HKEx stock code: 1319.HK, the "Group" or "Oi Wah") announced its annual results and its financial position.For the year ended 29 February 2024 ("FY2024"), the Group recorded revenue of approximately HK$179.3 million and profit attributable to shareholders of the Company of approximately HK$86.4 million. During the year, net interest margin improved to 16.4%.
During the year, earnings per share was HK 4.5 cents. The Board of Directors recommends a final dividend of HK 0.76 cents.
Business Review
Mortgage loan business
In FY2024, the Group recorded interest income of the mortgage loan business of approximately HK$99.7 million, which accounted for approximately 55.6% of the Group's total revenue. The gross mortgage loan receivables was approximately HK$769.5 million as at 29 February 2024. During the year, net interest margin of the mortgage loan business increased to 11.5%.
During FY2024, the Group has continued to maintain a prudent approach when granting loans, underpinned by a focus on building a resilient loan portfolio amid the uncertain environment brought about by the pandemic. We are of the view that maintaining a cautious underwriting stance and healthy loan portfolio will position the Group well for the economic recovery and eventual normalization ahead. During FY2024, the average loan-to-value ratio for first mortgage was approximately 54.1%, while average overall loan-to-value ratio for subordinary mortgage was approximately 52.7%, of which, average loan-to-value ratio of subordinary mortgage that the Group participate in was approximately 16.3%.
Pawn Loan Business
During FY2024, the revenue from the pawn loan business increased by 7.1% to approximately HK$79.6 million. The pawn loan receivables amount increased by approximately 4.3% to approximately HK$180.5 million as at 29 February 2024, which was mainly attributed to the increase in gold price and an active second-hand luxury market, especially for watches. During FY2024, the Group continued to channel resources to advertising and promotion to enhance the Group's brand exposure. Together with the effect of opening a new premium service certer in East Tsim Sha Tsui MTR station in October 2023, these effort has generated demand for one-to-one pawn loan appointment services for pawn loans.
Prospects
Looking ahead, the global economy is expected to recover with a slow and steady pace. Amidst looming uncertainties, including US presidential election results and the timing of the Fed's rate adjustments, we remain cautious about the local economy outlook.
With the launch of a new premium service center at East Tsim Sha Tsui MTR Station and cutting-edge mobile app, clients will be able to obtain preliminary collateral evaluation and loan valuation, as well as to apply for loan with increased convenience. By providing an efficient and streamlined one-stop loan solution, catering to the evolving needs of clients, the Group is dedicated to enhance customer experience and expand our potential customer base. We will continue to integrate new technologies into the pawn sector to modernize the industry, in order to maintain our strong industry leading position.
As the market has digested the deferral of Fed's interest-reducing cycle, the Directors believes that there will be limited impact on the Hong Kong property market. Property prices have been adjusting from historical high to a relatively reasonable level, thereby lowering the business risk. To grasp expansion opportunities, the Group strategically partnered with PACM Group (Holdings) Limited to establish a limited partnership fund (the "Fund") which marks our entry into the real estate private credit institutional investment management sector. For details of the Fund, please refer to the Company's announcements dated 12 March 2024 and 17 April 2024. We will remain cautious about the property market and prudently manage investment business to reduce the impact of market volatility and maximize the returns of investors and shareholders.
Mr. Edward Chan, Chairman and CEO of the Company, said, "Under the current high interest rate environment, together with geopolitical instability, the pace of economic recovery is likely to slow down and the global economic outlook will be continuously uncertain. Looking ahead, we will take a cautious approach to manage investment and expand our business, as well as striving to create greater returns to our shareholders."
Hashtag: #OiWah #Mortgage #Pawn #Loan
The issuer is solely responsible for the content of this announcement.
Oi Wah Pawnshop Credit Holdings Limited
Oi Wah is a financing service provider in Hong Kong, mainly providing short-term secured financing, including pawn loans and mortgage loans. The Group established its first pawnshop in 1975 and currently owns 10 pawnshops and one premium service center in various locations in Hong Kong. Oi Wah diversified into mortgage loan business in 2009. The Group is the first local pawn shop which successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on 12 March 2013.
