SEMK (2250.HK) Announces 2021 Adjusted Net Profit Increases by Nearly 30% to HK$77 million, Becomes the Largest Domestic Character IP Company In China
HONG KONG, Mar 30, 2022 – (ACN Newswire via SEAPRWire.com) – SEMK Holdings International Limited (“SEMK”, together with its subsidiaries, the “Group”, stock code: 2250.HK), the largest domestic character Intellectual Property (IP) company* engaged in the provision of licensing services, design consultation services and retail of licensed brand products of its self-created B.Duck family characters, announced today the first annual results after its listing on the Main Board of The Stock Exchange of Hong Kong Limited on 17 January 2022.
– 4,000 unique and original design 3D B.Duck NFTs as collectibles and potential future gaming celebrities.
Despite the unprecedented challenges due to the COVID-19 pandemic (the “Pandemic”), SEMK’s business remains resilient. The Group’s total revenue for the year ended 31 December 2021 (“FY2021” or the “Year”) was approximately HK$290.0 million (FY2020: HK$233.5 million), representing a year-on-year growth of 24.2%. Excluding listing-expenses, the adjusted net profit for the Year was HK$77.3 million (FY2020: HK$59.8 million), representing a significant increase of 29.1% from the previous year.
The Board has resolved to declare a final dividend of HK$4.8 cents per ordinary share issued for the year ended 31 December 2021.
Mr. Eddie Hui, Chairman and Chief Executive Officer of SEMK, said, “It is an honor for me, for the first time as Chairman of SEMK, to relate to you our first annual results after listing. I am thrilled to announce that SEMK has become the largest domestic character IP company and ranked the fourth among all character IP companies in China, in terms of character licensing revenue in 2021*. It is our mission to be one of the pioneer Chinese character IP to expand in overseas so that can bring happiness and “Playful” lifestyle worldwide and empower soft power in Chinese cultural style. Indeed, the global licensing market is dominated by American and Japanese IPs, more than 60% of global retail sales of licensed goods attributable to North America. China only occupied less than 4% of global retail value of licensed products in 2021, which is not in same pace of global GDP sharing for China, this implies that the licensing market in China is in a very high growth potential. Our historical pace of growth is much faster than the overall growth rate of licensing market in China. Among other top 10 largest licensors in China, B.Duck is the youngest one and has demonstrated its high growth track records in the past years.
The listing of SEMK on the Main Board of the Hong Kong Stock Exchange in early 2022 is undoubtedly an important milestone for us. Looking forward, we will continue to adhere to our product-oriented development strategy, draw on our strong design capabilities and extensive licensees’ network to bring more high-quality products to our fans.”
Resilient Business Performance
The Group are principally engaged in two major businesses – character licensing business, as well as e-commerce and other business.
Character Licensing Business
The Group’s character licensing business can be broadly divided into five service types, namely (i) merchandise licensing; (ii) location-based entertainment (“LBE”) licensing; (iii) content and media licensing; (iv) promotion licensing; and (v) design consultation, which are interrelated and complementary to each other, with each of them being provided on a single, multi-service or integrated basis.
The Group’s revenue from character licensing business increased by 69.9% to HK$166.6 million during the Year (FY2020: HK$98.0 million), mainly driven by the increase in excess royalties charged from the Group’s licencees as a result of their increased sales of goods or services featuring the Group’s IP characters. This segment accounted for 57.4% of the Group’s total revenue in FY2021. The number of licencees (exclusive of licensing agents) the Group had increased to 385 as at the end of FY2021 (FY2020: 315).
E-commerce and Other Business
The Group’ s e-commerce and other business mainly involve the sale of B.Duck family characters-featured products on e-commerce platforms of third parties and through offline sales channels. Seeing the potential synergies to be generated from the character licensing business, the Group began to explore the possibility of designing and selling its own products on e-commerce platforms. In 2015, SEMK launched its first online flagship store on Tmall, a well-known business to customer online shopping platform in China.
Following the success in the opening of such flagship store, the Group subsequently expanded onto other e-commerce platforms, such as JD.com, VIP.com and HKTVmall, to offer its products and allow customers to pay online with products directly shipped to the customers. During the Year, revenue from e-commerce and other business was approximately HK$123.4 million.
Launch of B. Duck NFTs and MOU with MADworld
With robust design capabilities and creativity, over the decades, the Group was able to ride on its self-create characters to launch various kind of licensed products in order to cope with changing consumption habits of B.Duck’s fans. Recently, SEMK deployed a globalized business blueprint with an NFT “Non-fungible token” market. Joining hands with MADworld, the launch of B.Duck NFTs was a three-part series. The first drop, which was already launched, included 4,000 unique and original design 3D B.Duck NFTs as collectibles and potential future gaming celebrities. It was well received by the market and was sold out in 5 hours during the public session.
To facilitate strategic moves in this field in the future, SEMK has also entered into a memorandum of understanding (the “MOU”) with MADworld Advisory Limited (“MADworld”), which specializes in development of licensed or licensable IPs into NFTs and other digital creatives, and marketing and offering to sell the same on platforms to be developed and/or accessed by such company. Pursuant to the MOU, SEMK and MADworld shall within two (2) months from the date of the MOU, enter into a joint venture agreement to establish a joint venture entity intended to be principally engaged in, amongst others, development of artworks and IPs owned by the Group into NFTs
Mr. Eddie Hui, Chairman and Chief Executive Officer of SEMK, concluded, “2021 was a peculiar year for us. Against the backdrop of the pandemic, thanks to the robust commitment of our team in delivering the strategic plans, we managed to sustain a resilient performance albeit the market challenges. The opportunities presented by the pandemic prompted us to make sufficient progress in online commercial operations, product flexibility, and B.Duck community online and offline digitalization integration.
Looking forward, through our strong fan base and coverage on social media-and e-commerce platforms, we will continue to accelerate the development of our product design capabilities in different territory, so as to expand to different variety licensing categories, including but not limited to LBE and digital assets projects. We will also proactively look for opportunities of strategic partnerships, alliances and acquisitions to facilitate sustainable business development.”
About SEMK Holdings International Limited
SEMK Holdings International Limited (stock code: 2250.HK) is the largest domestic character IP company engaged in the provision of licensing services, design consultation services and retail of brand products of its self-created B.Duck family characters.
With strong in-house artistic design capabilities, SEMK has developed and nurtured a proprietary portfolio of approximately 26 self-created characters created under the motto of “Be Playful”. As at 31 December 2021, B.Duck family characters had recorded in aggregate more than 10.5 million subscriptions or follows by B.Duck fans on various e-commerce platforms and social networking platforms, with in aggregate, over 740 million views of various types of content in relation to the elements of B.Duck family characters along with our “Be playful” motto.
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