mF International Limited Announces Fiscal Year 2023 Financial Results

Rhea-AI Summary

mF International (MFI), a Hong Kong-based financial trading solution provider, announced its fiscal year 2023 financial results. The company reported a revenue decrease of 8.5% to HK$32.0 million (US$4.1 million) from HK$34.9 million in 2022. Despite this, the gross profit margin increased to 56.2%. Net income slightly declined to HK$6.6 million (US$0.8 million), and earnings per share were HK$0.572 (US$0.073). Cost reductions in employee expenses and outsourcing fees helped improve the profit margin. The company saw increased revenue from customization and white label services but faced declines in liquidity and subscription services. In April 2024, mF International completed its IPO and started trading on Nasdaq under the symbol MFI, raising funds to support future growth initiatives.

Positive

• Gross profit margin increased to 56.2%, up from 52.7% in 2022.
• Net income was HK$6.6 million (US$0.8 million), maintaining strong profitability despite a slight decline.
• Customization service revenue increased by 25.7% to HK$9.0 million (US$1.1 million).
• Successful IPO in April 2024, raising capital for future growth.
• Cost of revenue decreased by 15.2%, mainly due to reduced expenses in staff, outsourcing, and commissions.

Negative

• Overall revenue decreased by 8.5% to HK$32.0 million (US$4.1 million) in 2023.
• Revenue from liquidity services dropped significantly by 60.8%.
• Net cash provided by operating activities decreased to HK$11.3 million (US$1.4 million) from HK$13.5 million.
• General and administrative expenses increased by 4.5% to HK$11.1 million (US$1.4 million), partly due to IPO costs.
• Research and development expenses declined by 85.8%, potentially indicating less investment in innovation.

Financial Analyst

The fiscal year 2023 financial results for mF International Limited provide substantial insights into their performance amidst macroeconomic challenges. Revenue decreased by 8.5% to US$4.1 million, primarily due to a decline in liquidity services and subscription services. However, it's notable that the gross profit margin improved from 52.7% to 56.2%, driven by reduced outsourcing costs and leveraging in-house capabilities.

The overall net income showed a marginal decline, down from US$0.8 million to US$0.7 million. The basic and diluted earnings per share also saw a slight dip, which could be interpreted as a minor setback. However, the Company's successful initial public offering (IPO) and listing on Nasdaq in April 2024 suggest a strategic move towards enhancing their growth and competitive edge globally.

Operating expenses saw a minimal increase, with significant IPO-related costs being a primary driver. The decrease in research and development expenses points to a shift in focus towards more implementation rather than preliminary research, which might indicate a more matured stage in product offerings.

While there are short-term challenges reflected in some of the financial metrics, the strategic adjustments and enhanced service offerings present a cautiously optimistic long-term outlook.

Investors should monitor the Company’s ability to leverage its IPO proceeds for future growth and how it manages macroeconomic uncertainties.

Market Research Analyst

The shift in mF International’s revenue mix highlights a strategic pivot in its business model. The marked reduction in liquidity services revenue, down by 60.8%, signals a potential risk area, attributed to a significant customer reducing demand during their in-house development phase. Conversely, revenues from customization and white label services have shown robust growth, indicating a rising demand for tailored solutions in the financial trading landscape.

The slight decline in overall revenue is noteworthy but may be part of a broader strategic realignment. The Company's focus on innovation, operational efficiency and its I-A-D-T philosophy aligns well with current market needs, suggesting they are positioning themselves well for future opportunities in a competitive market.

The long-term success will depend on how effectively the Company capitalizes on its investments in customization and white label services, as well as its ability to attract and retain customers through its enhanced service offerings.

Investors should consider the Company's market positioning and strategic direction, which appears focused on sustainable growth through innovation and operational excellence.

Tech Expert

mF International's emphasis on customization and support services reflects a current trend in the financial technology sector where clients demand more tailored solutions. The 25.7% increase in revenue from customization services indicates a positive reception towards their product enhancements, suggesting that the Company's investments in technology and customization capabilities are paying off.

The improvement in the gross profit margin, despite a decrease in overall revenue, can be partially attributed to optimizing in-house resources for implementation tasks historically outsourced. This shift not only improves cost efficiency but also enhances the Company's control over service quality and delivery timelines.

The successful IPO and Nasdaq listing imply that the Company is in a strong position to further invest in technology and expand its market reach, potentially driving future growth and innovation.

Investors should keep an eye on ongoing investments in technology and customization, which are key differentiators in a competitive market.

HONG KONG, May 16, 2024 /PRNewswire/ -- mF International Limited (the "Company" or "mF International") (Nasdaq: MFI), a Hong Kong-based experienced financial trading solution provider, today announced its financial results for the fiscal year ended December 31, 2023.

Mr. Chi Weng Tam, Executive Director and Chief Executive Officer of the Company, commented, "I'm pleased to present our financial results for fiscal year 2023. Despite facing significant macroeconomic uncertainties, we have improved our gross profit margin and enhanced our service offerings in a challenging environment, particularly with respect to customization and support services, which have seen robust growth. The slight decrease in overall revenue is largely attributable to strategic adjustments in our service portfolio, which are already showing promising results. Our focus on innovation and operational efficiency has enabled us to maintain a strong financial position. Our unique I-A-D-T philosophy of Information, Analysis, Decision, and Transaction continues to guide our strategic focus, ensuring that our trading solutions are both at the cutting-edge and aligned with market needs. It's also worth noting that in April 2024, we completed our initial public offering (the "IPO") and listing on the Nasdaq Capital Market under the ticker symbol "MFI," which we expect may enhance our competitiveness globally and position favorably for future investments and expansion, in order to provide us with the capital to pursue ambitious initiatives that align with our long-term vision. Looking forward, we are dedicated to continuous research and development to improve the services we offer our customers. I am confident that mF International will continue to thrive, deliver increased value to our shareholders and enhance our customer partnerships."

Fiscal Year 2023 Financial Highlights

• Revenue was HK$32.0 million (US$4.1 million) for fiscal year 2023, compared to HK$34.9 million for fiscal year 2022.
• Gross profit was HK$18.0 million (US$2.3 million) for fiscal year 2023, compared to HK$18.4 million for fiscal year 2022.
• Gross profit margin was 56.2% for fiscal year 2023, increased from 52.7% for fiscal year 2022.
• Net income was HK$6.6 million (US$0.8 million) for fiscal year 2023, compared to HK$6.8 million for fiscal year 2022.
• Basic and diluted earnings per share was HK$0.572 (US$0.073) for fiscal year 2023, compared to HK$0.589 for fiscal year 2022.

Fiscal Year 2023 Financial Results

Revenue

Total revenue of the Company was HK$32.0 million (US$4.1 million) for fiscal year 2023, which decreased by 8.5% from HK$34.9 million for fiscal year 2022, primarily because of the decrease in the Company's revenue derived from (i) liquidity services; and (ii) quotes/news/package subscription services, and was partially offset by the increase in revenue derived from (i) initial set up, installation and customization services; (ii) white label services; and (iii) hosting, support and maintenance services.

• Revenue from initial set up, installation and customization services was HK$9.0 million (US$1.1 million) for fiscal year 2023, which increased by 25.7% from HK$7.1 million for fiscal year 2022. The increase was mainly due to the increase in demand for the Company's customization services provided to customers to customize the functions and features of the trading platforms during fiscal year 2023.
• Revenue from subscriptions was HK$11.4 million (US$1.5 million) for fiscal year 2023, which increased by 0.3% from HK$11.4 million for fiscal year 2022. The Company maintained the same business activities for this revenue source during fiscal year 2023.
• Revenue from hosting, support and maintenance services was HK$4.3 million (US$0.6 million) for fiscal year 2023, which increased by 3.6% from HK$4.2 million for fiscal year 2022. The increase was mainly due to the increase in customers for the Company's hosting, support and maintenance services for fiscal year 2023.
• Revenue from liquidity services was HK$2.6 million (US$0.3 million) for fiscal year 2023, which decreased by 60.8% from HK$6.7 million for fiscal year 2022. The decrease was mainly due to a customer who was engaging in in-house research on a trading signal and was developing new trading signals to replace the existing one. During the testing phase, the demand for the Company's liquidity services was reduced, as the trading volume was maintained at a lower level until the new trading signals had been optimized.
• Revenue from white label services was HK$2.1 million (US$0.3 million) for fiscal year 2023, which increased by 12.3% from HK$1.9 million for fiscal year 2022. The increase was mainly due to the increase in customers for the Company's white label services for fiscal year 2023.
• Revenue from quotes/news/package subscription services was HK$2.5 million (US$0.3 million) for fiscal year 2023, which decreased by 31.8% from HK$3.6 million for fiscal year 2022. The decrease was mainly due to customers subscribed for fewer quotes/news/package services for fiscal year 2023.

Cost of Revenue

Cost of revenue was HK$14.0 million (US$1.8 million) for fiscal year 2023, which decreased by 15.2% from HK$16.5 million for fiscal year 2022, which was mainly due to (i) the decrease in employee-related costs because lesser staff costs were allocated for supporting the Company's financial trading solution services for fiscal year 2023, (ii) decrease in the amortization of intangible assets, due to part of the intangible assets the Company developed being fully amortized, (iii) the decrease in outsourcing fees, and (iv) the decrease in commission expenses.

Gross Profit

Gross profit was HK$18.0 million (US$2.3 million) for fiscal year 2023, which decreased by 2.5% from HK$18.4 million for fiscal year 2022.

Gross profit margin was 56.2% for fiscal year 2023, which increased from 52.7% for fiscal year 2022. The increase in the Company's gross profit margin was primarily due to the decrease in outsourcing costs, since the Company used its own staff to handle more implementation works.

Operating Expenses

Total operating expenses were HK$11.3 million (US$1.4 million) for fiscal year 2023, which increased by 3.7% from HK$10.9 million for fiscal year 2022.

• Selling and marketing expenses were HK$160,976 (US$20,609) for fiscal year 2023, which slightly decreased by 0.5% from HK$161,791 for fiscal year 2022, mainly because of a reduction in marketing expenses incurred during fiscal year 2023.
• Research and development expenses were HK$11,373 (US$1,456) for fiscal year 2023, which decreased by 85.8% from HK$80,012 for fiscal year 2022, because more staff costs were incurred at the project development stage, rather than the preliminary project research stage, for fiscal year 2023.
• General and administrative expenses were HK$11.1 million (US$1.4 million) for fiscal year 2023, which increased by 4.5% from HK$10.6 million for fiscal year 2022, because the IPO expenses of HK$3.4 million that were incurred in fiscal year 2023.

Total Other Income (Expense)

Total other income, net was HK$94,974 (US$12,158) for fiscal year 2023, compared to total other expense, net of HK$0.3 million for fiscal year 2022.

Net Income

Net income was HK$6.6 million (US$0.8 million) for fiscal year 2023, which decreased by 2.8% from HK$6.8 million for fiscal year 2022.

Basic and Diluted Earnings per Share

Basic and diluted earnings per share was HK$0.572 (US$0.073) for fiscal year 2023, compared to HK$0.589 for fiscal year 2022.

Financial Condition

As of December 31, 2023, the Company had cash and cash equivalents of HK$6.8 million (US$0.9 million), compared to HK$12.1 million as of December 31, 2022.

Net cash provided by operating activities was HK$11.3 million (US$1.4 million) for fiscal year 2023, compared to HK$13.5 million for fiscal year 2022.

Net cash used in investing activity was HK$5.7 million (US$0.7 million) for fiscal year 2023, compared to HK$2.1 million for fiscal year 2022.

Net cash used in financing activities was HK$10.9 million (US$1.4 million) for fiscal year 2023, compared to HK$9.4 million for fiscal year 2022.

Exchange Rate Information

Translations of amounts from HK$ into US$ as of and for the years ended December 31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1 = HK$7.8109, as published in H.10 statistical release of the United States Federal Reserve Board.

Recent Development

On April 24, 2024, the Company completed its IPO of 1,666,667 ordinary shares at a public offering price of $4.50 per ordinary share. The ordinary shares began trading on the Nasdaq Capital Market on April 22, 2024 under the ticker symbol "MFI."

About mF International Limited

mF International Limited is a British Virgin Islands holding company with three operating subsidiaries in Hong Kong. The Company's principal Hong Kong subsidiary, m-FINANCE Limited ("mF" or m-FINANCE), is a Hong Kong-based experienced financial trading solution provider principally engaged in the development and provision of financial trading solutions via internet or platform as software as a service, or SaaS. m-FINANCE has approximately 20 years of experience providing real-time mission critical forex, bullion/commodities trading platform solutions, financial value-added services, mobile applications and financial information for brokers and institutional clients in the region. With clients located over mainland China, Hong Kong and Southeast Asia, m-FINANCE provides customers with the mF4 Trading Platform, Bridge and Plugins, CRM System, ECN System, Liquidity Solutions, Cross-platform "Broker+" Solution, Social Trading Apps and other value-added services. For more information, please visit the Company's website: https://ir.m-finance.com/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.

For investor and media inquiries, please contact:

mF International Limited
Investor Relations Department
Email: ir@m-finance.net

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

 

 

mF International Limited and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2022 and 2023
		HK$				HK$				US$
		As of December 31,
		2022				2023				2023
		HK$				HK$				US$
Assets
Current assets
Cash			12,063,731				6,810,418				871,912
Accounts receivable, net			1,133,370				2,579,475				330,240
Prepaid expenses and other current assets			346,064				371,143				47,516
Investment at fair value			1,979,268				343,862				44,023
Total current assets			15,522,433				10,104,898				1,293,691
Non-current assets
Property and equipment, net			123,305				36,511				4,674
Intangible assets, net			13,564,772				15,336,589				1,963,486
Operating lease right-of-use assets			1,730,717				2,957,515				378,639
Long term deposit			479,076				431,972				55,304
Deferred initial public offering ("IPO") costs			3,119,900				4,984,334				638,125
Total assets			34,540,203				33,851,819				4,333,919
Liabilities and Shareholders' Equity
Current liabilities
Accrued expenses and other current liabilities			1,844,246				1,782,265				228,177
Amounts due to a related party			306,110				306,110				39,190
Current portion of bank borrowings			3,701,162				3,863,852				494,674
Contract liabilities			4,199,173				4,619,690				591,441
Current portion of operating lease liabilities			1,624,066				1,392,826				178,318
Tax payable			229,355				217,478				27,843
Total current liabilities			11,904,112				12,182,221				1,559,643
Non-current liabilities
Bank borrowings, non-current			9,919,236				6,062,904				776,211
Operating lease liabilities, non-current			138,289				1,570,307				201,040
Deferred tax liabilities			2,152,668				2,292,955				293,558
Total liabilities			24,114,305				22,108,387				2,830,452
COMMITMENTS AND CONTINGENCIES (Note 14)
Shareholders' equity
Ordinary shares, authorized to issue an unlimited number of Ordinary Shares of no par value, 11,585,000 shares issued and outstanding as of December 31, 2022 and 2023*			3,900				3,900				500
Additional paid-in capital			2,042,379				2,042,379				261,478
Retained earnings			8,478,877				9,778,545				1,251,910
Accumulated other comprehensive loss			(99,258)				(81,392)				(10,421)
Total shareholders' equity			10,425,898				11,743,432				1,503,467
Total liabilities and shareholders' equity			34,540,203				33,851,819				4,333,919

 

*

Giving retroactive effect to the 1 for 231.7 share split effected on August 11, 2023.

 

 

mF International Limited and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
For the Years Ended December 31, 2021, 2022 and 2023
		2021				2022				2023				2023
		For the years ended December 31,
		2021				2022				2023				2023
		HK$				HK$				HK$				US$
Revenue			32,212,970				34,931,827				31,961,177				4,091,869
Cost of revenue			16,260,407				16,512,702				13,995,670				1,791,813
Gross profit			15,952,563				18,419,125				17,965,507				2,300,056
Operating expenses
Selling and marketing expenses			220,681				161,791				160,976				20,609
Research and development expenses			29,478				80,012				11,373				1,456
General and administrative expenses			5,167,704				10,634,851				11,110,942				1,422,492
Total operating expenses			5,417,863				10,876,654				11,283,291				1,444,557
Income from operations			10,534,700				7,542,471				6,682,216				855,499
Other income (expense)
Other income, net			1,402,874				1,265,200				457,941				58,628
Realized loss on disposal of financial assets at fair value			(16,120)				-				(7,874)				(1,008)
Change in fair value on financial assets at fair value			(660,325)				(1,157,650)				(2,091)				(268)
Interest expenses, net			(479,904)				(443,577)				(353,002)				(45,194)
Total other (expense) income, net			246,525				(336,027)				94,974				12,158
Income before income taxes			10,781,225				7,206,444				6,777,190				867,657
Income tax expenses			(431,630)				(387,845)				(148,309)				(18,987)
Net income			10,349,595				6,818,599				6,628,881				848,670
Other comprehensive (loss) income
Foreign currency translation adjustment			(14,168)				7,496				17,866				2,287
Comprehensive income			10,335,427				6,826,095				6,646,747				850,957
Weighted average shares outstanding – basic and diluted*			11,585,000				11,585,000				11,585,000				11,585,000
Earnings per share – basic and diluted*			0.893				0.589				0.572				0.073

 

*

Giving retroactive effect to the 1 for 231.7 share split effected on August 11, 2023.

 

 

 

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SOURCE mF International Limited

FAQ

What were the fiscal year 2023 financial results for mF International (MFI)?

mF International reported a revenue of HK$32.0 million (US$4.1 million), a gross profit of HK$18.0 million (US$2.3 million), and a net income of HK$6.6 million (US$0.8 million) for fiscal year 2023.

How did mF International's gross profit margin change in fiscal year 2023?

The gross profit margin increased to 56.2% in fiscal year 2023, up from 52.7% in 2022.

What was the impact of mF International's IPO in April 2024?

mF International completed its IPO in April 2024, raising funds to support future growth and starting to trade on Nasdaq under the ticker symbol MFI.

Why did mF International's revenue decrease in fiscal year 2023?

The decrease in revenue was primarily attributed to a decline in liquidity services and subscription services.

How did customization services perform for mF International in fiscal year 2023?

Revenue from customization services increased by 25.7% to HK$9.0 million (US$1.1 million) in fiscal year 2023.