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EQS TodayIR | Last Updated: 24 Apr, 2024 03:48 pm
SEHK: 0863
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HKD9.93
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EQS TodayIR | Last Updated: 24 Apr, 2024 03:48 pm

BC Technology Group 2021 Interim Results: Group Revenues Increase 54% YoY to HKD153 Million, OSL Digital Asset Platform Revenues up 70% YoY to HKD114 Million

Overall digital asset platform volumes increase 70% YoY to HKD117 billion

Digital assets account for 75% of all Group revenues in the Period, up 10% YoY

Hong Kong – 17 August 2021 – BC Technology Group, Asia’s leading listed (stock code: 863 HK) digital asset and fintech company and parent company of the SFC-licensed OSL digital asset platform, today reported its results for the six months ended 30 June 2021 (the Period).

Summary

  • Group revenues increase 54% YoY to HKD153 million
  • OSL digital asset platform revenue increase 70% YoY to HKD114 million
  • Overall digital asset platform volumes increase 70% YoY to HKD117 billion
  • Digital assets account for 75% of all Group revenues, up 10% YoY
  • Active clients for the OSL digital asset platform grow 1,261% YoY
  • Group signs landmark joint venture with Standard Chartered’s SC Ventures in UK and Europe
  • Group completes HKD1.24 billion in share placements, with new investors including GIC
  • OSL DS goes live, becomes first licensed platform to trade security tokens in Hong Kong
  • OSL bolsters leadership team with six senior hires across key business units
  • Group offsets carbon footprint for 2018-20 with voluntary carbon credits and develops ESG governance and strategy 

 

Management Commentary

BC Group CEO Hugh Madden said: “As the world continues to grapple with geopolitical risks, inflationary fears and the ongoing COVID-19 pandemic, BC Group and OSL experienced important development milestones in 1H 2021. We rapidly expanded our footprint as a result of a landmark joint venture with Standard Chartered’s SC Ventures in the UK and Europe. Our licensed venue in Hong Kong went live, conducting the first licensed trade of a security token in Hong Kong. And we bolstered our leading team by adding senior industry veterans across technology, business development, and operations. 

Additionally, the Group closed two share placements totalling HKD1.24 billion with participation from long-term strategic investors Fidelity, Robeco, UBS and GIC, amongst others.

Our growth during the Period was in-line with the broader digital asset sector, which saw increased investment and participation from both the institutional and retail segments despite price retraction. At every level – from investors and customers, to the company’s approach to regulatory compliance, and its business model and strategy – OSL is now uniquely positioned as one of the most regulated and institutionally ready digital asset participants in the world.”

BC Group CFO Steve Zhang said: “In the first half of 2021, BC Group and OSL again delivered on our strategic roadmap and objectives, including growing SaaS technology capabilities, reach and client numbers. The first quarter was a transition period for OSL as we focused on onboarding new brokerage and exchange counterparties to the platform and shifting SaaS client focus to the regulated segment. 

While these activities had some short-term impact on revenues, a record number of individual, professional and institutional investors also onboarded to the platform in Q1 through our Hong Kong and Singapore exchanges and our B2B2C SaaS relationships. 

The Group closed several material deals in 2021 and these are set to scale significantly next year. We also expect new digital asset regulatory frameworks to come into effect in 2022, and this represents an opportunity for the Group given our positioning with licensing. As such, the Group will place even more focus on OSL Platform scalability initiatives for the remainder of 2021 to ensure we are able to take full advantage of what is shaping up to be a bumper period in 2022 and beyond.”

Financial Performance

In the six months ended 30 June 2021, BC Group saw overall revenues increase 54% year-on-year (YoY) to HKD153 million (1H2020: HKD99 million) despite ongoing global macro headwinds from COVID-19, inflationary fears and other factors. 

The OSL digital asset platform again showed strong performance across all business units 1H 2021, with a 70% YoY increase in revenue to HKD114 million (1H2020: HKD67 million). Prime brokerage revenues for 1H2021 were up 65% YoY to HKD105.3 million (1H2020: HKD63.8 million), and exchange revenues for the Period were up 5,003% YoY to HKD3.1 million (1H2020: HKD0.06 million). Revenue from custody and other fees were up 180% YoY to HKD2.1 million (1H2020:HKD0.7 million), and SaaS service fee revenue increased 32% YoY to HKD3.5 million (1H2020: HKD2.7 million).

OSL continues to be the Group’s best performing business and largest revenue contributor, and comprises 75% of all Group income and revenues, up 10% from 1H2020. 

The significant increases were driven by an increase in trading volume from the Group’s digital asset trading services and the provision of digital assets SaaS and related services, with overall digital asset platform volumes up 70% YoY to HKD117 billion (1H2020: HKD69 billion). Exchange volumes were up 7,506% YoY to HKD24.3 billion (H12020: HKD319 million); brokerage trading volume increased 28% YoY to HKD88 billion (1H2020: HKD68 billion); and SaaS trading volume increased 3,029% YoY to HKD4.9 billion (1H2020: HKD2 million). Assets on platform increased 36% in the Period to HKD3.8 billion (31 December 2020: HKD2.8 billion).

Active clients for the OSL digital asset platform also increased to over 77,000, a 1,261% increase compared to the same period the previous year, and verified clients increased 1,128% YoY to over 118,000. 

The Group’s China business also performed well on a year-on-year basis, with overall revenue increasing 22% YoY to HKD39 million (1H2020: HKD32 million). The business park management services business saw a 23% YoY increase in revenues to HKD23.1 million (1H2020: HKD18.9 million), while the advertising business experienced an 21% increase in revenues to HKD16 million in 1H 2021 (1H2020: HKD13 million).

In the six months ended 30 June 2021, the Group’s net loss was HKD158 million (1H2020: HKD100 million).

Key Business Milestones

On 2 June 2021, the Group and SC Ventures, the innovation and ventures unit of Standard Chartered, announced a partnership to establish a digital asset brokerage and exchange platform for institutional and  corporate clients in the UK and Europe. Former BC Group Chief Information Officer Usman Ahmad is now CEO of the new company, and Nick Philpott, formerly of SC Ventures, is the COO. 

The joint venture will be underpinned by BC Group’s leading OSL digital-asset technology and Standard Chartered’s global network and experience in brokerage and providing access to European markets. 

Also during the Period, BC Group raised HKD1.24 billion in two share placements. The first, a top-up placement completed in January and led by Morgan Stanley as the sole placing agent, raised HKD698 million, and included several top-tier institutional investors such as UBS, Fidelity and Robeco. The second, which was led in June by Macquarie as the placing agent, raised HKD543 million with Singapore’s GIC as the sole placee.

In March 2021, the Group announced that it had signed an MOU with Venture Smart Asia Limited (“VSAL”), a Hong Kong-licensed asset manager and investment advisory firm, to provide brokerage and related services for VSAL’s Hong Kong-regulated digital asset funds (the DigiTrackers Bitcoin fund and the Arrano Alpha Fund). 

Also in March, OSL Digital Securities executed its first regulated digital asset trades in Hong Kong, with the SFC-licensed OSL exchange and brokerage commencing live trading. 

In April, OSL Digital Securities, acted as the trade execution and custody partner for Hong Kong-listed Meitu, Inc. (HKEX: 1357) (Meitu), and facilitated a purchase of approximately 175 units of Bitcoin with a total value of USD10 million.

Two months later, OSL Digital Securities conducted its first successful security token trades with the Blockchain Capital (BCAP) token. BCAP is the first security token to be traded via a regulated digital asset trading platform operator in Hong Kong. OSL is currently the only firm in Hong Kong licensed to trade security tokens, and the initial BCAP token transaction marks the start of what is expected to be a long and steady line of tokenized securities and other financial products to enter the digital asset ecosystem in Hong Kong. 

Also during the Period, the Group offset its carbon footprint for the last three years (2018-2020) through the purchase and retirement of voluntary carbon credits. The Group also made a strategic investment in AllInfra, a blockchain company providing access to climate-related products and services in 1H 2020.

In line with the Group’s commitment to business expansion and being an employer of choice, OSL in June announced six key senior hires across software-as-a-service, business development, operations and technology, including Colm Furlong as Head of SaaS (formerly of Fidessa), Arion Ho as Head of UK Exchange operations, and Joe Zhou as Director of Business Development (both formerly of the Hong Kong Stock Exchange).

About BC Group and the OSL Platform

BC Technology Group (stock code: HK 863) is Asia’s leading public fintech and digital asset company. It is the parent company of OSL, the region’s most comprehensive licensed digital asset platform. 

OSL is the world’s first and only insured and SFC-licensed digital asset platform, providing brokerage, custody, exchange and SaaS services for institutional clients and professional investors.

The company offers OTC, iRFQ and electronic trading services giving traders access to the world’s deepest liquidity pools, as well as secure and insured wallets to ensure the safekeeping of digital assets with timely transaction settlement. 

BC Group and the OSL platform deliver best-in-class access to digital assets, setting the global standard for innovation, performance, security and compliance. 

For more information: bc.group  and osl.com.

Contact

[email protected]