For the year ended 28 February 2023 ("FY2023"), the Group recorded revenue of approximately HK$165.8 million and profit attributable to shareholders of the Company of approximately HK$86.1 million. During the year, net interest margin improved by 0.6 percentage point to 15.6%.
During the year, earnings per share was HK 4.5 cents. The Board of Directors recommends a final dividend of HK 0.87 cents.
Business Review
Mortgage loan business
In FY2023, the Group recorded interest income of the mortgage loan business of approximately HK$91.5 million, which accounted for approximately 55.2% of the Group's total revenue. The gross mortgage loan receivables was approximately HK$754.5 million as at 28 February 2023 with the total new mortgage loans granted amounted to approximately HK$596.5 million in FY2023. During the year, there were 101 new cases of mortgage loan transactions, with average loan size of approximately HK$5.9 million.
During FY2023, the Group has continued to maintain a prudent approach when granting loans, underpinned by a focus on building a resilient loan portfolio amid the uncertain environment brought about by the pandemic. We are of the view that maintaining a cautious underwriting stance and healthy loan portfolio will position the Group well for the economic recovery and eventual normalization ahead. During FY2023, the loan-to-value ratio for the first mortgage is approximately 55.2%, while overall loan-to-value ratio for subordinary mortgage was approximately 56.2%, of which, loan-to-value ratio of subordinary mortgage that the Group participate in was approximately 9.8%.
Pawn Loan Business
During FY2023, the revenue from the pawn loan business increased by 7.2% to approximately HK$74.3 million and the aggregate pawn loan amount granted increased by approximately 22.1% to approximately HK$966.3 million, thanks to an active second-hand luxury market, especially for watches, which has driven relevant refinancing demand. During FY2023, 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 of such amount increased to 725 transactions in FY2023. The average loan amount also increased to approximately HK$13,600 per transaction.
Prospects
Looking ahead, the lifting of COVID-19 restrictions and the launch of the "Hello Hong Kong" campaign by the HKSAR government to welcome global visitors mean the economy is poised for recovery. The Group plans to leverage the economic upswing by opening a new premium service center at MTR station in the first half of the next fiscal year. It will provide customers with a private and streamlined alternative financing solution that differentiates us from traditional banks and money lenders. The Group plans to integrate with fintech developments of a pawn loan app, acting as a pick-up point for customers. The entire application process will be digitized and made convenient through the app where customers can book appointments, get initial collateral evaluations, loan quotes and apply for loans. Our Group believes that by offering a simple, quick and efficient one-stop loan solution catering to the needs of high net worth individuals, MTR travelers and SMEs, we will gain a core competitive advantage and driver of future growth.
As Hong Kong reconnects with the world, the Group is excited to seek overseas expansion opportunities, including partnering with reputable foreign funds to grow our syndicated loan businesses. With over 45 years of industry experience in pawn loans and alternative financing as well the first large-scale listed pawnbroker in Hong Kong, the Group has built a strong reputation and expertise in this segment. The Group believes that it can leverage this competitive edge to further expand its loan portfolio internationally, diversify geographically beyond Hong Kong and drive business momentum. With Hong Kong's role as a global financial hub and connectivity to Mainland China and the rest of Asia, the Group is well positioned to serve as a financing partner for foreign funds and institutions.
Mr. Edward Chan, Chairman and CEO of the Company, said, "With the recession of the pandemic and the gradual recovery of the economy, pawn loan business and mortgage loan business of the Group has maintained steady growth during the year. Looking ahead, we will strive to capture the opportunity to expand our market share when the business activities pick up, and to create greater returns to our shareholders."
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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 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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