For the six months ended 31 August 2023 ("FP2024"), the Group recorded revenue of approximately HK$90.2 million and profit attributable to shareholders of the Company of approximately HK$49.6 million. During the period, net interest margin improved by 0.7 percentage point to 16.3%.
During the period, earnings per share was HK 2.6 cents. The Board of Directors recommends an interim dividend of HK 1.04 cents.
Business Review
Mortgage loan business
In FP2024, the interest income of the mortgage loan business of the Group increased by 10.4% to approximately HK$50.0 million, which accounted for approximately 55.4% of the Group's total revenue. As at 31 August 2023, the gross mortgage loan receivable was approximately HK$849.1 million and during the period, the total new mortgage loans granted amounted to approximately HK$282.7 million. The net interest margin of the mortgage loan business increased by 0.8 percentage point to 11.4% and there were 52 new cases of mortgage loan transactions in FP2024.
The Group continued to maintain a cautious oversight of its loan portfolio, particularly on the repayment activities of its existing customers. With such effort, there was no bad debt recorded during the period. In FP2024, the loan-to-value ratio for first mortgage was approximately 54.9%, while the overall loan-to-value ratio for subordinate mortgage was approximately 54.2%, of which, loan-to-value ratio of subordinate mortgage that the Group participated in was approximately 13.3%.
Pawn Loan Business
In FP2024, the interest income generated from the pawn loan business increased by 4.9% to approximately HK$36.3 million. It is primarily attributable to the increase in the average month end balance for the gross pawn loan receivables from March to August from approximately HK$183.2 million in FP2023 to approximately HK$190.5 million in FP2024. The Group also recorded gain from disposal on repossessed assets of approximately HK$3.9 million, representing an increase of 85.7%.
During the period, the Group continued to channel resources to advertising and promotion, in order to enhance the Group's brand exposure. Such effort has generated demand of one-to-one pawn loan appointment services for pawn loans of loan size exceeding HK$0.1 million. During FP2024, the Group recorded 345 pawn loan transactions with amount exceeding HK$0.1 million and the average loan amount of approximately HK$10,500 per transaction.
Prospects
Having a strong foothold in the Hong Kong pawnbroking industry for nearly half a century, Oi Wah has consistently been at the forefront of industry innovation, with a dedicated commitment to modernizing the pawn sector. The Group has recently launched a premium service center at East Tsim Sha Tsui MTR Station of Tuen Ma Line, marking a significant milestone for the Group by establishing our presence within Hong Kong's railway system, one of the busiest and most crowded locales in the city. The design of our new store seamlessly blends modern aesthetics with traditional pawnshop features. Complemented by our cutting-edge mobile app, customers can obtain preliminary collateral evaluation, loan valuation and application of loan, etc. By digitizing the entire pawn loan application process, we offer an efficient and streamlined one-stop loan solution, catering for the evolving needs of our clients. The Board believes that the pawn industry continually adapts to meet the evolving demands of modern consumers. The Group will continue to break with tradition, introducing more innovative services for our clients.
Given the current global inflation and monetary tightening policies, various asset classes have witnessed increased volatility. Consequently, real estate-backed private credit has emerged as an alternative investment option for capital. Leveraging on our real estate expertise, Oi Wah strategically partnered with PACM Group (Holdings) Limited ("PACM Group") to venture into this new business opportunity. This partnership marks our entry into the real estate private credit institutional investment management sector, with investment strategies including asset-backed direct lending, non-performing debt acquisition, acquisition financing, stretch senior financing, project financing, bridge financing and other debt related strategies within Hong Kong and overseas. The board of the directors of the Company believe that the cooperation provides an invaluable opportunity for efficient allocation of resources, simultaneously aiding in the expansion of overseas market, broadening revenue sources and customer base. We firmly believe that our prudent management approach and cautious vetting process will bolster our investment management business, ensuring the protection of investor assets and maximizing returns.
Mr. Edward Chan, Chairman and CEO of the Company, said, "Despite the uncertainty in the macroeconomic environment, the Group stays optimistic about the loan market in Hong Kong and keeps our prudent pace of expansion, including the launch of the premium service center at MTR station and strategic cooperation with PACM Group in the reporting period. We will explore and capture different business opportunities continuously to expand our market share and to maximize return for shareholders."
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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 10 pawnshops, a property mortgage center, and a MTR premium service centre 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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