mF International Limited Announces Fiscal Year 2023 Financial Results
HONG KONG, May 16, 2024 /PRNewswire/ -- mF International Limited (the "Company" or "mF International") (Nasdaq: MFI), a Hong Kong-based experienced financial trading solution provider, today announced its financial results for the fiscal year ended December 31, 2023.
Mr. Chi Weng Tam, Executive Director and Chief Executive Officer of the Company, commented, "I'm pleased to present our financial results for fiscal year 2023. Despite facing significant macroeconomic uncertainties, we have improved our gross profit margin and enhanced our service offerings in a challenging environment, particularly with respect to customization and support services, which have seen robust growth. The slight decrease in overall revenue is largely attributable to strategic adjustments in our service portfolio, which are already showing promising results. Our focus on innovation and operational efficiency has enabled us to maintain a strong financial position. Our unique I-A-D-T philosophy of Information, Analysis, Decision, and Transaction continues to guide our strategic focus, ensuring that our trading solutions are both at the cutting-edge and aligned with market needs. It's also worth noting that in April 2024, we completed our initial public offering (the "IPO") and listing on the Nasdaq Capital Market under the ticker symbol "MFI," which we expect may enhance our competitiveness globally and position favorably for future investments and expansion, in order to provide us with the capital to pursue ambitious initiatives that align with our long-term vision. Looking forward, we are dedicated to continuous research and development to improve the services we offer our customers. I am confident that mF International will continue to thrive, deliver increased value to our shareholders and enhance our customer partnerships."
Fiscal Year 2023 Financial Highlights
- Revenue was HK$32.0 million (US$4.1 million) for fiscal year 2023, compared to HK$34.9 million for fiscal year 2022.
- Gross profit was HK$18.0 million (US$2.3 million) for fiscal year 2023, compared to HK$18.4 million for fiscal year 2022.
- Gross profit margin was 56.2% for fiscal year 2023, increased from 52.7% for fiscal year 2022.
- Net income was HK$6.6 million (US$0.8 million) for fiscal year 2023, compared to HK$6.8 million for fiscal year 2022.
- Basic and diluted earnings per share was HK$0.572 (US$0.073) for fiscal year 2023, compared to HK$0.589 for fiscal year 2022.
Fiscal Year 2023 Financial Results
Revenue
Total revenue of the Company was HK$32.0 million (US$4.1 million) for fiscal year 2023, which decreased by 8.5% from HK$34.9 million for fiscal year 2022, primarily because of the decrease in the Company's revenue derived from (i) liquidity services; and (ii) quotes/news/package subscription services, and was partially offset by the increase in revenue derived from (i) initial set up, installation and customization services; (ii) white label services; and (iii) hosting, support and maintenance services.
- Revenue from initial set up, installation and customization services was HK$9.0 million (US$1.1 million) for fiscal year 2023, which increased by 25.7% from HK$7.1 million for fiscal year 2022. The increase was mainly due to the increase in demand for the Company's customization services provided to customers to customize the functions and features of the trading platforms during fiscal year 2023.
- Revenue from subscriptions was HK$11.4 million (US$1.5 million) for fiscal year 2023, which increased by 0.3% from HK$11.4 million for fiscal year 2022. The Company maintained the same business activities for this revenue source during fiscal year 2023.
- Revenue from hosting, support and maintenance services was HK$4.3 million (US$0.6 million) for fiscal year 2023, which increased by 3.6% from HK$4.2 million for fiscal year 2022. The increase was mainly due to the increase in customers for the Company's hosting, support and maintenance services for fiscal year 2023.
- Revenue from liquidity services was HK$2.6 million (US$0.3 million) for fiscal year 2023, which decreased by 60.8% from HK$6.7 million for fiscal year 2022. The decrease was mainly due to a customer who was engaging in in-house research on a trading signal and was developing new trading signals to replace the existing one. During the testing phase, the demand for the Company's liquidity services was reduced, as the trading volume was maintained at a lower level until the new trading signals had been optimized.
- Revenue from white label services was HK$2.1 million (US$0.3 million) for fiscal year 2023, which increased by 12.3% from HK$1.9 million for fiscal year 2022. The increase was mainly due to the increase in customers for the Company's white label services for fiscal year 2023.
- Revenue from quotes/news/package subscription services was HK$2.5 million (US$0.3 million) for fiscal year 2023, which decreased by 31.8% from HK$3.6 million for fiscal year 2022. The decrease was mainly due to customers subscribed for fewer quotes/news/package services for fiscal year 2023.
Cost of Revenue
Cost of revenue was HK$14.0 million (US$1.8 million) for fiscal year 2023, which decreased by 15.2% from HK$16.5 million for fiscal year 2022, which was mainly due to (i) the decrease in employee-related costs because lesser staff costs were allocated for supporting the Company's financial trading solution services for fiscal year 2023, (ii) decrease in the amortization of intangible assets, due to part of the intangible assets the Company developed being fully amortized, (iii) the decrease in outsourcing fees, and (iv) the decrease in commission expenses.
Gross Profit
Gross profit was HK$18.0 million (US$2.3 million) for fiscal year 2023, which decreased by 2.5% from HK$18.4 million for fiscal year 2022.
Gross profit margin was 56.2% for fiscal year 2023, which increased from 52.7% for fiscal year 2022. The increase in the Company's gross profit margin was primarily due to the decrease in outsourcing costs, since the Company used its own staff to handle more implementation works.
Operating Expenses
Total operating expenses were HK$11.3 million (US$1.4 million) for fiscal year 2023, which increased by 3.7% from HK$10.9 million for fiscal year 2022.
- Selling and marketing expenses were HK$160,976 (US$20,609) for fiscal year 2023, which slightly decreased by 0.5% from HK$161,791 for fiscal year 2022, mainly because of a reduction in marketing expenses incurred during fiscal year 2023.
- Research and development expenses were HK$11,373 (US$1,456) for fiscal year 2023, which decreased by 85.8% from HK$80,012 for fiscal year 2022, because more staff costs were incurred at the project development stage, rather than the preliminary project research stage, for fiscal year 2023.
- General and administrative expenses were HK$11.1 million (US$1.4 million) for fiscal year 2023, which increased by 4.5% from HK$10.6 million for fiscal year 2022, because the IPO expenses of HK$3.4 million that were incurred in fiscal year 2023.
Total Other Income (Expense)
Total other income, net was HK$94,974 (US$12,158) for fiscal year 2023, compared to total other expense, net of HK$0.3 million for fiscal year 2022.
Net Income
Net income was HK$6.6 million (US$0.8 million) for fiscal year 2023, which decreased by 2.8% from HK$6.8 million for fiscal year 2022.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share was HK$0.572 (US$0.073) for fiscal year 2023, compared to HK$0.589 for fiscal year 2022.
Financial Condition
As of December 31, 2023, the Company had cash and cash equivalents of HK$6.8 million (US$0.9 million), compared to HK$12.1 million as of December 31, 2022.
Net cash provided by operating activities was HK$11.3 million (US$1.4 million) for fiscal year 2023, compared to HK$13.5 million for fiscal year 2022.
Net cash used in investing activity was HK$5.7 million (US$0.7 million) for fiscal year 2023, compared to HK$2.1 million for fiscal year 2022.
Net cash used in financing activities was HK$10.9 million (US$1.4 million) for fiscal year 2023, compared to HK$9.4 million for fiscal year 2022.
Exchange Rate Information
Translations of amounts from HK$ into US$ as of and for the years ended December 31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1 = HK$7.8109, as published in H.10 statistical release of the United States Federal Reserve Board.
Recent Development
On April 24, 2024, the Company completed its IPO of 1,666,667 ordinary shares at a public offering price of $4.50 per ordinary share. The ordinary shares began trading on the Nasdaq Capital Market on April 22, 2024 under the ticker symbol "MFI."
About mF International Limited
mF International Limited is a British Virgin Islands holding company with three operating subsidiaries in Hong Kong. The Company's principal Hong Kong subsidiary, m-FINANCE Limited ("mF" or m-FINANCE), is a Hong Kong-based experienced financial trading solution provider principally engaged in the development and provision of financial trading solutions via internet or platform as software as a service, or SaaS. m-FINANCE has approximately 20 years of experience providing real-time mission critical forex, bullion/commodities trading platform solutions, financial value-added services, mobile applications and financial information for brokers and institutional clients in the region. With clients located over mainland China, Hong Kong and Southeast Asia, m-FINANCE provides customers with the mF4 Trading Platform, Bridge and Plugins, CRM System, ECN System, Liquidity Solutions, Cross-platform "Broker+" Solution, Social Trading Apps and other value-added services. For more information, please visit the Company's website: https://ir.m-finance.com/.
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.
For investor and media inquiries, please contact:
mF International Limited
Investor Relations Department
Email: ir@m-finance.net
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
mF International Limited and Subsidiaries | ||||||||||||
Consolidated Balance Sheets | ||||||||||||
As of December 31, 2022 and 2023 | ||||||||||||
HK$ | HK$ | US$ | ||||||||||
As of December 31, | ||||||||||||
2022 | 2023 | 2023 | ||||||||||
HK$ | HK$ | US$ | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash | 12,063,731 | 6,810,418 | 871,912 | |||||||||
Accounts receivable, net | 1,133,370 | 2,579,475 | 330,240 | |||||||||
Prepaid expenses and other current assets | 346,064 | 371,143 | 47,516 | |||||||||
Investment at fair value | 1,979,268 | 343,862 | 44,023 | |||||||||
Total current assets | 15,522,433 | 10,104,898 | 1,293,691 | |||||||||
Non-current assets | ||||||||||||
Property and equipment, net | 123,305 | 36,511 | 4,674 | |||||||||
Intangible assets, net | 13,564,772 | 15,336,589 | 1,963,486 | |||||||||
Operating lease right-of-use assets | 1,730,717 | 2,957,515 | 378,639 | |||||||||
Long term deposit | 479,076 | 431,972 | 55,304 | |||||||||
Deferred initial public offering ("IPO") costs | 3,119,900 | 4,984,334 | 638,125 | |||||||||
Total assets | 34,540,203 | 33,851,819 | 4,333,919 | |||||||||
Liabilities and Shareholders' Equity | ||||||||||||
Current liabilities | ||||||||||||
Accrued expenses and other current liabilities | 1,844,246 | 1,782,265 | 228,177 | |||||||||
Amounts due to a related party | 306,110 | 306,110 | 39,190 | |||||||||
Current portion of bank borrowings | 3,701,162 | 3,863,852 | 494,674 | |||||||||
Contract liabilities | 4,199,173 | 4,619,690 | 591,441 | |||||||||
Current portion of operating lease liabilities | 1,624,066 | 1,392,826 | 178,318 | |||||||||
Tax payable | 229,355 | 217,478 | 27,843 | |||||||||
Total current liabilities | 11,904,112 | 12,182,221 | 1,559,643 | |||||||||
Non-current liabilities | ||||||||||||
Bank borrowings, non-current | 9,919,236 | 6,062,904 | 776,211 | |||||||||
Operating lease liabilities, non-current | 138,289 | 1,570,307 | 201,040 | |||||||||
Deferred tax liabilities | 2,152,668 | 2,292,955 | 293,558 | |||||||||
Total liabilities | 24,114,305 | 22,108,387 | 2,830,452 | |||||||||
COMMITMENTS AND CONTINGENCIES (Note 14) | ||||||||||||
Shareholders' equity | ||||||||||||
Ordinary shares, authorized to issue an unlimited number of | 3,900 | 3,900 | 500 | |||||||||
Additional paid-in capital | 2,042,379 | 2,042,379 | 261,478 | |||||||||
Retained earnings | 8,478,877 | 9,778,545 | 1,251,910 | |||||||||
Accumulated other comprehensive loss | (99,258) | (81,392) | (10,421) | |||||||||
Total shareholders' equity | 10,425,898 | 11,743,432 | 1,503,467 | |||||||||
Total liabilities and shareholders' equity | 34,540,203 | 33,851,819 | 4,333,919 | |||||||||
* | Giving retroactive effect to the 1 for 231.7 share split effected on August 11, 2023. |
mF International Limited and Subsidiaries | ||||||||||||||||
Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||
For the Years Ended December 31, 2021, 2022 and 2023 | ||||||||||||||||
2021 | 2022 | 2023 | 2023 | |||||||||||||
For the years ended December 31, | ||||||||||||||||
2021 | 2022 | 2023 | 2023 | |||||||||||||
HK$ | HK$ | HK$ | US$ | |||||||||||||
Revenue | 32,212,970 | 34,931,827 | 31,961,177 | 4,091,869 | ||||||||||||
Cost of revenue | 16,260,407 | 16,512,702 | 13,995,670 | 1,791,813 | ||||||||||||
Gross profit | 15,952,563 | 18,419,125 | 17,965,507 | 2,300,056 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling and marketing expenses | 220,681 | 161,791 | 160,976 | 20,609 | ||||||||||||
Research and development expenses | 29,478 | 80,012 | 11,373 | 1,456 | ||||||||||||
General and administrative expenses | 5,167,704 | 10,634,851 | 11,110,942 | 1,422,492 | ||||||||||||
Total operating expenses | 5,417,863 | 10,876,654 | 11,283,291 | 1,444,557 | ||||||||||||
Income from operations | 10,534,700 | 7,542,471 | 6,682,216 | 855,499 | ||||||||||||
Other income (expense) | ||||||||||||||||
Other income, net | 1,402,874 | 1,265,200 | 457,941 | 58,628 | ||||||||||||
Realized loss on disposal of financial assets at | (16,120) | - | (7,874) | (1,008) | ||||||||||||
Change in fair value on financial assets at fair | (660,325) | (1,157,650) | (2,091) | (268) | ||||||||||||
Interest expenses, net | (479,904) | (443,577) | (353,002) | (45,194) | ||||||||||||
Total other (expense) income, net | 246,525 | (336,027) | 94,974 | 12,158 | ||||||||||||
Income before income taxes | 10,781,225 | 7,206,444 | 6,777,190 | 867,657 | ||||||||||||
Income tax expenses | (431,630) | (387,845) | (148,309) | (18,987) | ||||||||||||
Net income | 10,349,595 | 6,818,599 | 6,628,881 | 848,670 | ||||||||||||
Other comprehensive (loss) income | ||||||||||||||||
Foreign currency translation adjustment | (14,168) | 7,496 | 17,866 | 2,287 | ||||||||||||
Comprehensive income | 10,335,427 | 6,826,095 | 6,646,747 | 850,957 | ||||||||||||
Weighted average shares outstanding – basic | 11,585,000 | 11,585,000 | 11,585,000 | 11,585,000 | ||||||||||||
Earnings per share – basic and diluted* | 0.893 | 0.589 | 0.572 | 0.073 | ||||||||||||
* | Giving retroactive effect to the 1 for 231.7 share split effected on August 11, 2023. |
SOURCE mF International Limited
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