News

Oi Wah Recorded an Increase of 5.2% and 10.5% in Revenue and Profit Respectively in FP2020

Plans to Launch an Online Pawn Loan Platform to Attract Customers and Will Continue to Adopt a Prudent Approach When Granting Loans

Financial
Highlights

������������������������������������������������������������������������������������������
For the 6 months ended 31 Aug

HK$

2019

2018

Change

Revenue

117,838

112,010

5.2%

�� Pawn Loan Business

36,608

33,132

10.6%

�� Mortgage loan business

81,230

78,878

3.0%

Profit before taxation

70,793

64,319

10.1%

Profit attributable to shareholders of
the Company

59,271

53,646

10.5%

Earnings per share (HK cents)

3.1

2.7

14.8%

��

HONG KONG, CHINA -�Media
OutReach�-�29 Oct 2019 - The board of directors of Oi Wah Pawnshop Credit Holdings Limited
(HKEx stock code: 1319.HK, the "Group" or "Oi Wah") announced
its interim
results and its financial position. For the six months ended 29
October 2019
("FP2020"), the
Group recorded revenue of approximately HK$117.8 million (6 months
ended 31 August 2018
("FP2019"): approximately HK$112.0 million), representing an increase of approximately
5.2%. During the
period, profit attributable to shareholders of the Company has
increased by 10.5%
and reached approximately HK$59.3 million (FP2019: approximately HK$53.6
million).

During the year,
earnings per share was HK3.1 cents (FP2019: HK2.7 cents). The Board of Directors
recommends an interim dividend of HK$1.07 cents.

Business Review

Mortgage loan business

For
the six months ended 31 August 2019 ("FP2020" or the "Period"?, the mortgage loan business remained as a major
source of income of the Group. During the Period, the interest income increased
by approximately HK$2.3 million or 2.9% from approximately HK$78.9 million for
the six months ended 31 August 2018 ("FP2019") to approximately HK$81.2 million
in FP2020. Revenue generated from the mortgage loan business in FP2020
accounted for approximately 68.9% of the Group's total revenue during the
Period. The gross mortgage loan receivables increased from approximately HK$1,223.3
million as at 28 February 2019 to approximately HK$1,269.1 million as at 31
August 2019, where the total amount of new mortgage loans granted was
approximately HK$306.6 million during FP2020. During the Period, there were 84
new cases of mortgage loan transactions while no bad debt was recorded.

In
FP2020, the Group continued to adopt a cautious and prudent approach when
granting loans, as well as maintain a higher proportion of first mortgage loans
in the Group's portfolio to manage risk. During the Period, the loan-to-value
ratio for first mortgage was approximately 49.4%, while the overall
loan-to-value ratio for subordinate mortgage was approximately 52.6%, in which
the loan-to-value ratio of subordinate mortgage that the Group participated in
was approximately 13.6%.

Pawn Loan Business

Due
to an ongoing rise in gold price during the Period, the revenue generated from
the pawn loan business increased by approximately HK$3.5 million or 10.6% from
approximately HK$33.1 million in FP2019 to approximately HK$36.6 million in
FP2020. Interest income derived from pawn loan receivables increased by
approximately HK$3.7 million or 12.7% from approximately HK$29.2 million in FP2019
to approximately HK$32.9 million in FP2020, while revenue derived from disposal
of repossessed assets slightly decreased by approximately HK$0.2 million or
5.1% from approximately HK$3.9 million in FP2019 to approximately HK$3.7
million in FP2020.

During
the Period, the Group continued to channel resources to advertising and
promotion to enhance the Group's brand exposure. Such effort has generated
demand for one-to-one pawn loan appointment services for pawn loans exceeding
HK$0.1 million. The number of pawn loan transactions granted with such amount
increased from 217 transactions in FP2019 to 274 transactions in FP2020. The
average loan amount also increased to approximately HK$9,200 per transaction (FP2019:
HK$7,700 per transaction).

Industry Overview

Due
to the uncertainties of the US-China trade conflict and Brexit, as well as risk
aversion among investors, gold price had increased sharply since the second
quarter of 2019 and reached a six-year high which was above the major
psychological level of US$1,500 per ounce. The Board believes that gold prices
will remain strong in the near future and will have a positive impact on the
Group's pawn loan business.

Meanwhile,
the Hong Kong government announced the relaxation of mortgage restrictions to increase
the ceiling for mortgage financing scheme. It is an initiative that aims to
help first-time homebuyers who have sufficient income to cover monthly mortgage
repayments but do not have enough funds for the down payment. It is expected to
result in a boost of property prices in the short run. However, the recent
social unrest in Hong Kong and uncertainties of the global economy have
rendered the property market unpredictable. Homebuyers should be cautious of
the increase in leverage level and market risk.

Prospects

Looking
ahead, the Group plans to launch an online pawn loan platform in next financial
year that enables customers to obtain loans in a discreet, simple and efficient
manner. It is believed that online pawn loan services will appeal to the younger
generation, and help promote the Group's pawn loan business at a lower cost.

For
mortgage loans, it is believed that the raise of the mortgage cap for
first-time property buyers in the "The Chief Executive's 2019 Policy Address"
will stimulate property prices in the short run. However, given the potential
downturn in local economy, social unrest and uncertainties in the global
economy, the Directors are of the view that the Hong Kong property market
remains unpredictable. The Group will continue to implement a prudent strategy,
maintain its focus on high net worth customers and remain cautious when
granting mortgage loans.

About 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 11 pawnshops 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.

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