SOLOWIN HOLDINGS Reports Unaudited Financial Results for The First Six Months of Fiscal Year 2024
- Revenue surged by 126.4% to $2.64 million, driven by asset management and referral services.
- Net income rose to $1.25 million, indicating improved profitability.
- Investment advisory and asset management services saw substantial growth of 63.3% and 248.3%, respectively.
- Successful IPO on Nasdaq marked a milestone in global expansion.
- Cash and cash equivalents increased by 231.3% to $6.38 million.
- Company entered Private Wealth Management business through new subsidiary, Solomon Private Wealth
- Dynamic leadership team focused on innovation and customer satisfaction.
- Operational and financial achievements despite economic challenges.
- Commitment to developing innovative financial services for next-generation investors.
- Revenue from securities brokerage commissions decreased due to poor market performance.
- Decrease in revenue-generating clients contributed to lower revenue from securities brokerage.
- Expenses slightly decreased, impacting overall financial performance.
- No subsidies received during the reporting period.
Insights
The substantial year-over-year revenue growth reported by SOLOWIN HOLDINGS is indicative of a strong performance, particularly given the broader economic challenges such as high interest rates and inflation. The increase in net income and earnings per share is a positive signal to investors, reflecting the company's ability to translate top-line growth into bottom-line results. The diversification into asset management and investment advisory services seems to be a strategic move, as these sectors have provided significant contributions to the revenue stream. The increase in cash and cash equivalents provides the firm with a healthy liquidity position that can support further investment and cushion against market volatility.
The successful IPO is likely to have provided the capital necessary for the company's strategic expansion, as seen with the entry into the Private Wealth Management business. This expansion could potentially open up new revenue streams and client segments. However, investors should keep in mind that entering new markets and services entails risks and requires effective execution. The performance of the company's funds and the reception of its new services in the competitive wealth management space will be critical to monitor in the upcoming periods.
SOLOWIN's impressive revenue growth, particularly in investment advisory and asset management services, suggests a strong product-market fit and an ability to capture market share despite economic headwinds. The decline in securities brokerage commissions may reflect broader market trends and investor sentiment, which could be an area of concern if it indicates a longer-term shift away from traditional brokerage services. The company's strategic pivot and innovation in service offerings appear to be resonating with their client base, leading to a rapid expansion in these areas.
The firm's performance should be evaluated against industry benchmarks for asset management and advisory services growth rates. As SOLOWIN continues to expand, the scalability of their business model and the integration of their new Private Wealth Management subsidiary will be key factors to watch. The company's ability to attract high-net-worth clients in a competitive landscape and to manage the operational complexities of a growing business will be important for sustaining growth.
The financial results of SOLOWIN HOLDINGS must be contextualized within the current macroeconomic landscape. The company's resilience and substantial growth during a period of economic uncertainty and market recovery post-COVID-19 is noteworthy. The high growth in asset management and investment advisory services may be partially attributed to a shift in investor preferences towards more personalized and sophisticated financial services amidst market volatility. Moreover, the company's expansion into Private Wealth Management aligns with a global trend of wealth accumulation among high-net-worth individuals, a segment that has shown resilience even in fluctuating economic conditions.
It will be important to monitor how SOLOWIN navigates potential shifts in monetary policy that could affect interest rates and investment behaviors. Additionally, the company's performance should be considered against the backdrop of regulatory changes in financial markets, particularly within the Asia-Pacific region, which could impact operations and growth strategies.
Revenue Up
Mr. Shing Tak Tam, Chief Executive Officer of SOLOWIN, commented, "It is with great pride that I present our operational and financial achievements for the first time as a public company for the first six months ended September 30, 2023. Despite the sluggish economic recovery plagued by the high interest rates, inflation, inadequate investor confidence and market liquidity, we have achieved a remarkable
Mr. Tam continued, "Amid the economic uncertainty, our dynamic and experienced leadership team has steered the company towards innovation in our product and service offerings, which caters to a diverse client base and has fortified our market position. Our commitment to delivering a wide selection of innovative, secure, and high-quality services has gained wide recognition in the field, propelling the growth of our customer base. Consequently, our investment advisory and asset management services enjoy a rapid expansion by
First Six Months of Fiscal Year 2024 Financial Highlights
- Revenue increased by
126.4% to$2.64 million $1.17 million - Income from operations increased to
$1.34 million $0.25 million - Net income increased to
$1.25 million $0.20 million - Basic and diluted earnings per share increased to
$0.10 $0.02 - Cash and cash equivalents increased by
231.3% to$6.38 million $1.93 million
First Six Months of Fiscal Year 2024 Financial Results
Revenue
Revenue increased by
For the six months ended September 30, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in | % of | (in | % of | |||||||||||||
Securities brokerage commissions and handling income | $ | 16 | 1 | % | $ | 55 | 5 | % | ||||||||
Investment advisory fees | 1,559 | 59 | % | 955 | 82 | % | ||||||||||
Asset management income | 498 | 18 | % | 143 | 12 | % | ||||||||||
Interest income | 17 | 1 | % | 13 | 1 | % | ||||||||||
Referral income | 550 | 21 | % | - | - | |||||||||||
Total | $ | 2,640 | 100 | % | $ | 1,166 | 100 | % | ||||||||
- Revenue from securities brokerage commissions and handling income decreased to
$16,000 $55,000 Hong Kong and the under expected economic recovery from COVID-19, which led to lower investor confidence and lower liquidity in theHong Kong equity market. The decrease in the number of revenue-generating clients from approximately 1,565 on September 30, 2022 to 1,330 on September 30, 2023 also contributed to the decrease in revenue from securities brokerage. - Revenue from investment advisory fees increased by
63.3% to$1.56 million $0.96 million - Revenue from asset management income-related parties increased by
248.3% to$498,000 $143,000 - Revenue from interest income increased by
30.8% to$17,000 $13,000 - Revenue from referral income increased to
$550,000
Expenses
Expenses decreased to
- Commission and handling expenses decreased to
$4,000 $6,000 - General and administrative expenses decreased to
$1,300,000 $1,412,000
Income (Loss) from Operations
Income from operations increased to
Other Income
Other income for the six months ended September 30, 2022 mainly consisted of subsidies from The Hong Kong Special Administrative Region Government ("HKSAR"). From May to July 2022, the HKSAR launched the 2022 Employment Support Scheme under the Anti-Epidemic Fund to provide wage subsidies to employers aiming to retain current employees or even hire more staff when the business revives as soon as the epidemic situation permits. No such subsidies were received during the six months ended September 30, 2023.
Net Income (Loss)
Net income increased to
Basic and Diluted Earnings (Loss) per Share
Basic and diluted earnings per share increased to
Financial Condition
As of September 30, 2023, cash and cash equivalents increased to
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities increased to
Recent Development
On September 8, 2023, the Company closed its initial public offering (the "IPO") of 2,000,000 ordinary shares (the "Ordinary Shares") at a public offering price of
On March 14, 2024, the Company announced its strategic expansion into the Private Wealth Management business under its newly formed
About SOLOWIN HOLDINGS
Based in
Experiencing robust growth since 2021, SOLOWIN HOLDINGS distinguishes itself through its main subsidiary, Solomon JFZ (
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 identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" or other similar expressions. 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 that arise after the date hereof, except as may be required by law. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and other factors discussed in the "Risk Factors" section of the registration statement filed with the SEC. 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 SEC. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov.
For investor and media inquiries please contact:
SOLOWIN HOLDINGS
Investor Relations Department
Email: ir@solomonwin.com.hk
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
SOLOWIN HOLDINGS | ||||||||
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF SEPTEMBER 30, 2023 AND MARCH 31, 2023 | ||||||||
(Amount in U.S. dollars and in thousands, except for share and per share data, or otherwise noted) | ||||||||
As of | As of | |||||||
2023 | 2023 | |||||||
$'000 | $'000 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 6,377 | 1,925 | ||||||
Cash segregated for regulatory purpose | 5,477 | 5,589 | ||||||
Receivables from: | ||||||||
Customers, net of allowance for expected credit loss of | 792 | 970 | ||||||
Customers - related parties, net of allowance for expected credit loss of nil as of | 260 | 309 | ||||||
Brokers-dealers and clearing organizations, net of allowance for expected credit loss | 1,162 | 303 | ||||||
Prepaid expenses and other current assets, net | 2,383 | 513 | ||||||
Amount due from a director | - | 28 | ||||||
Amount due from related parties | 31 | 87 | ||||||
Total current assets | 16,482 | 9,724 | ||||||
Non-current assets: | ||||||||
Property and equipment, net | 24 | 32 | ||||||
Right-of-use assets, net | 174 | 251 | ||||||
Intangible assets, net | 82 | 64 | ||||||
Refundable deposits | 138 | 156 | ||||||
Total non-current assets | 418 | 503 | ||||||
TOTAL ASSETS | 16,900 | 10,227 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Payables to customers | 5,504 | 6,346 | ||||||
Accruals and other current liabilities | 93 | 163 | ||||||
Contract liabilities | 120 | 120 | ||||||
Income taxes payable | 88 | - | ||||||
Lease liabilities - current | 160 | 156 | ||||||
Amount due to a director | 3 | - | ||||||
Amount due to a related party | 6 | 6 | ||||||
Total current liabilities | 5,974 | 6,791 | ||||||
Non-current liabilities: | ||||||||
Lease liabilities - non-current | 14 | 95 | ||||||
Total non-current liabilities | 14 | 95 | ||||||
TOTAL LIABILITIES | 5,988 | 6,886 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Shareholders' equity | ||||||||
Ordinary shares | 1 | 1 | ||||||
Additional paid-in capital | 11,098 | 4,785 | ||||||
Accumulated losses | (180) | (1,428) | ||||||
Accumulated other comprehensive losses | (7) | (17) | ||||||
Total shareholders' equity | 10,912 | 3,341 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 16,900 | 10,227 | ||||||
SOLOWIN HOLDINGS | ||||||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND | ||||||||
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 | ||||||||
(Amount in U.S. dollars and in thousands, except for share and per share data, or otherwise noted) | ||||||||
For the six months | ||||||||
2023 | 2022 | |||||||
$'000 | $'000 | |||||||
Revenues | ||||||||
Securities brokerage commissions and handling income | 16 | 55 | ||||||
Investment advisory fees | 1,559 | 955 | ||||||
Asset management income - related parties | 498 | 143 | ||||||
Interest income | 17 | 13 | ||||||
Referral income | 550 | - | ||||||
Total revenues | 2,640 | 1,166 | ||||||
Expenses | ||||||||
Commission and handling expenses | 4 | 6 | ||||||
General and administrative expenses | 1,300 | 1,361 | ||||||
General and administrative expenses - related parties | - | 51 | ||||||
Total expenses | 1,304 | 1,418 | ||||||
Other income | ||||||||
Other income | - | 52 | ||||||
Total other income | - | 52 | ||||||
Income (loss) before income tax expense | 1,336 | (200) | ||||||
Income tax expense | 88 | - | ||||||
Net income (loss) | 1,248 | (200) | ||||||
Other comprehensive income (loss) | ||||||||
Foreign currency translation adjustment | 10 | (6) | ||||||
Total comprehensive income (loss) | 1,258 | (206) | ||||||
Basic and diluted net income (loss) per share | 0.10 | (0.02) | ||||||
Weighted average number of shares outstanding - basic and diluted | 12,252,747 | 12,000,000 | ||||||
SOLOWIN HOLDINGS | ||||||||||||||||||||||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN | ||||||||||||||||||||||||
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 | ||||||||||||||||||||||||
(Amount in U.S. dollars and in thousands, except for share and per share data, or otherwise noted) | ||||||||||||||||||||||||
Ordinary shares | Additional | Accumulated | ||||||||||||||||||||||
Number of | Amount | paid-in | Accumulated | comprehensive | Total | |||||||||||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||||||||||||
Balance as of April 1, 2022 | 12,000,000 | 1 | 4,785 | (2,777) | (9) | 2,000 | ||||||||||||||||||
Foreign currency translation | - | - | - | - | (6) | (6) | ||||||||||||||||||
Net loss | - | - | - | (200) | - | (200) | ||||||||||||||||||
Balance as of September 30, | 12,000,000 | 1 | 4,785 | (2,977) | (15) | 1,794 | ||||||||||||||||||
Ordinary shares | Additional | Accumulated | ||||||||||||||||||||||
Number of | Amount | paid-in | Accumulated | comprehensive | Total | |||||||||||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||||||||||||
Balance as of April 1, 2023 | 12,000,000 | 1 | 4,785 | (1,428) | (17) | 3,341 | ||||||||||||||||||
Issuance of ordinary shares | 2,000,000 | - | ** | 6,313 | - | - | 6,313 | |||||||||||||||||
Foreign currency translation | - | - | - | - | 10 | 10 | ||||||||||||||||||
Net income | - | - | - | 1,248 | - | 1,248 | ||||||||||||||||||
Balance as of September 30, | 14,000,000 | 1 | 11,098 | (180) | (7) | 10,912 | ||||||||||||||||||
SOLOWIN HOLDINGS | ||||||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 | ||||||||
(Amount in U.S. dollars and in thousands, except for share and per share data, or otherwise noted) | ||||||||
For the six months | ||||||||
2023 | 2022 | |||||||
$'000 | $'000 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | 1,248 | (200) | ||||||
Adjustment to reconcile net income (loss) to cash used in operating activities: | ||||||||
Amortization | 2 | - | ||||||
Depreciation | 10 | 9 | ||||||
Allowance for expected credit loss | 155 | - | ||||||
Change in operating assets and liabilities: | ||||||||
Change in receivables from customers | 72 | (316) | ||||||
Change in receivables from brokers-dealers and clearing organizations | (859) | 162 | ||||||
Change in prepaid expenses and other current assets | (2,185) | (4) | ||||||
Change in amount due from a director | 28 | - | ||||||
Change in payables to customers | (842) | (1,265) | ||||||
Change in accruals and other current liabilities | (89) | (1) | ||||||
Change in Income taxes payable | 88 | - | ||||||
Cash used in operating activities | (2,372) | (1,615) | ||||||
Cash flows from investing activities | ||||||||
Purchase of intangible assets | (20) | - | ||||||
Purchase of property and equipment | (2) | - | ||||||
Repayment of loan to a director | - | 272 | ||||||
Cash (used in) provided by investing activities | (22) | 272 | ||||||
Cash flows from financing activities | ||||||||
Net proceeds from initial public offering ("IPO") | 7,065 | - | ||||||
Payment for IPO costs | (390) | (70) | ||||||
Advance from related parties | 56 | - | ||||||
Advance from a director | 3 | - | ||||||
Cash provided by (used in) financing activities | 6,734 | (70) | ||||||
Net change in cash, cash equivalents and cash segregated for regulatory purpose | 4,340 | (1,413) | ||||||
Cash, cash equivalents and cash segregated for regulatory purpose at beginning of the | 7,514 | 8,073 | ||||||
Cash, cash equivalents and cash segregated for regulatory purpose at the end of the | 11,854 | 6,660 | ||||||
Supplementary cash flows information | ||||||||
Cash paid for income taxes | - | - | ||||||
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SOURCE SOLOWIN HOLDINGS
FAQ
What was the revenue growth percentage reported by Solowin Holdings for the first six months of fiscal year 2024?
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