Huobi Tech 2022 Interim Results: Steady and Orderly Development with the Principle of Diversification and Compliance


Financial Highlights

➢ The total revenue amounted to approximately HK$351.8 million, representing an increase of approximately34.4% or HK$90.1 million; 

➢ The total assets reached to approximately HK$1.34 billion, representing an increase of 87.4%; The Group maintained an abundant capital with the cash and cash equivalents of HK$374.6 million;

➢ The revenue of virtual asset ecosystem business reached HK$96.8 million, accounting for 27.5% of the total revenue (the businesses have officially launched since last April), which was a testament to the effectiveness of Huobi Tech’s development strategy;

➢ The revenue of blockchain ecosystem business reached anticipated level with revenue of HK$44.5 million; providing momentum for the total revenue growth;

➢ The revenue of power-related & electrical/electronic products business amounted to HK$210.4 million, representing an increase of approximately 30.9%, which kept strengthening the Group’s overall revenue resilience;

➢ In order to build a leading one-stop compliant virtual asset service platform, the Group has allocated more resources and cost input, which resulted in a remarkable progress in virtual asset ecosystem business and a further strengthening of the sustainable ecosystem.

[27 May 2022, Hong Kong] Huobi Technology Holdings Limited (“Huobi Tech”, stock code: 1611.HK) and together with its subsidiaries (the “Group”) is pleased to announce its interim results for the six months ended 31 March 2022 (“the Reporting Period”). Despite the complexity of the international market during the period, the Group achieved a steady and orderly development of its performance and successful implementation of its multiple business, through timely strategic adjustments and rational allocation of resources. At the same time, the Group increased its input in new business lines, strengthened the sustainable ecosystem of its overall business, and brought about further optimisation of the revenue structure. This is highly consistent with the strategic direction of the Group and is a testament to the effectiveness of its development strategy.

The Group recorded a total revenue of approximately HK$351.8 million for the six months ended 31 March 2022, representing an increase of approximately 34.4% compared with the same period of last year. The gross profit of the Group was HK$101.2 million during the Reporting Period, representing a decrease of approximately 24.5%. A loss of HK$48.8 million was recorded. This is due to the increase in costs associated with the launch and layout of new businesses and the application for compliance licenses in key global markets during the Reporting Period compared with the same period last year. Meanwhile, with the steady growth of the Group’s business and the smooth rollout of new compliant business, the total assets reached to HK$1.34 billion, a year-on-year increase of 87.4%. Besides, the Group maintained an abundant capital with the cash and cash equivalents of HK$374.6 million during the Reporting Period.

Steady and Orderly Development with the Principle of Diversification and Compliance

During the Reporting Period, the Group benefited from its development principle of “Diversification, Compliance and Professionalism” and achieved sound business operation. The revenue from the manufacturing business increased by 30.9% year-on-year to 210.4 million during the Reporting Period, thanks to the recovery of the global market from the epidemic in the second half of 2021, which strengthened the Group’s overall revenue resilience. At the same time, the Group continued to focus on the development of the blockchain ecosystem and achieved the anticipated level of revenue from the business, providing momentum to the total revenue growth. The technology solutions business, which provide data centre and cloud-based services to global customers in the innovative technology sectors, generated a revenue of HK$38.7 million; SaaS, which provide maintaining, supporting, developing and implementing customizations for virtual asset trading platform clients, generated a revenue of HK$5.9 million.

It is worth mentioning that the Group fully leveraged its compliance advantages and allocated more resources and cost input to adapt itself into the wave of global digital economy. By strengthening the sustainable ecosystem consisting of emerging compliant business, the Group achieved a stable start in its virtual asset ecosystem business with revenue reaching the expected level of HK$96.8 million. Since the official launch in April 2021, the proportion of the revenue from virtual asset ecosystem has achieved 27.5% as of the reporting date, reflecting the effectiveness of the Group’s development strategy.

Actively Pursuing Layout on Forward-Looking Business to Strengthen the Sustainable Ecosystem Consisting of Emerging Business

The rapid development of blockchain technologies have ed global regulations and supervision to achieve leapfrog development. Increased regulatory awareness and improved regulatory landscape have made “Compliance & Security” an important prerequisite for riding the wave of digital assets. To this end, as the first listed company in Asia dedicated to building a one-stop compliant virtual asset service platform, Huobi Tech actively built an ecosystem moating around its mission of “Developing Diversely with Compliance as Primary” to provide a compliant, secure and professional high-quality channel for institutions and individuals to enter the virtual asset world.

The Group has made remarkable progress in its business through proactive market insight and strategic layouts. Huobi Asset Management (Hong Kong) Limited (“Huobi Asset Management”), one of the subsidiaries of the Group, which holds Type 4 (Advising on Securities) and Type 9 (Asset Management) licenses issued by the Securities and Futures Commission of Hong Kong (“Hong Kong SFC”), has launched innovative compliant fund products to meet the diverse market demands since April 2021, and continued to meet the market demands to launch various products, above which creating favorable conditions for the ecosystem. Huobi Trust Company Limited (“Huobi Trust HK”) which holds the Hong Kong Trust or Company Service Provider (TCSP) license, and Huobi Trust Company (“Huobi Trust US”) which holds the Retail Trust Company License (Nevada USA), have both gained recognition from customers for their leading technologies and professional services since the official launch in May 2021. In addition, the Group kept capturing the market dynamics in a real-time manner, and successfully developed new compliant business for institutions and individuals, including over-the-counter (OTC) brokerage and asset-backed lending service during the Reporting Period. With the service system and quality improved in a short term, both business achieved rapid revenue growth, further consolidating the Group’s core competitiveness. Meanwhile, in response to the market trend, Huobi Tech Capital, the Group's strategic investment and M&A unit, was officially established after this Report Period (in April). In the future, Huobi Tech Capital will grasp the trend of the digital era and conduct in-depth research on Web3.0, DeFi, NFT and verse to provide momentum for the Group to become a leading one-stop compliant virtual asset service platform.

With a vision of “Based in Hong Kong with a Global Perspective”, the Group has been actively cooperating with global regulators to make the industry more compliant and mainstream. During the Reporting Period, the Group joined hands with leading companies in the industry to launch the “Crypto Market Integrity Coalition (CMIC)” to support the cultivation of a fair digital asset marketplace and enhance the confidence of global regulators. In addition, the Group is actively applying for the Type 1 and Type 7 regulated activities licenses under the Securities and Futures Ordinance to be issued by Hong Kong SFC, with a view to conducting as a compliant virtual asset trading platform in Hong Kong, and jointly explore the future of compliance with regulatory authorities. In Singapore, the Group has submitted the application to Monetary Authority of Singapore (“MAS”) for a digital asset activities license, aiming to conduct the regulated operation of the local exchange and expand the scope of business for the Group.

Looking forward, Huobi Tech will actively embrace the opportunities of the age and uphold the mission of “Diversification, Compliance and Professionalism” to establish a strategic fulcrum for the sustainable development of virtual assets, thus leading traditional financial institutions into the virtual asset world with self-built “One-stop Compliant Virtual Asset Service Platform”. The Group believes that we will create stable and long-term values for our shareholders as long as we insist a global strategic mindset and leverage the first-mover advantage of compliance.