Most Kwai Chung warn of sharp drop in profits as media services hit

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Magazine and online company Most Kwai Chung are expected to post a sharp decline in profits in the first half of this fiscal year from April 1, 2021, as its digital media segments and other media services saw a decline in the gross profit margin. In a statement, the company said based on the preliminary examination of the company’s management accounts for the six-month period ended September 30, 2021, it is expected to record a significant decline of at least 70% year-over-year. profit for a number of reasons.

The company said it recorded a lower gross profit margin from the group’s digital media and other multimedia services segments. In addition, the Hong Kong government provided grants to businesses in the city through the Employment Support Program last year, while the government offered no grants this year.

The company also recorded an increase in administrative and other operating expenses mainly due to the increase in personnel costs.

The company’s activity has already been affected by the pandemic. Group revenue decreased by approximately HK $ 17.8 million or 23.1% from approximately HK $ 76.9 million for the fiscal year ended March 31, 2020 to approximately 59.1 million HK dollars for this year. The decrease is mainly attributable to lower revenues in the digital media services sector and the other media services sector.

Most of Kwai Chung provide integrated advertising and media services, including digital media services whereby the group provides clients with a set of one-stop advertising solutions, with different types of ads including videos , online banners, news feeds and infomercials; print media services which include the sale of book publications; and other media services which include event organization and artist management.

In August, one of its founders Tsui Ka-ho resigned to devote more time to his personal commitments. After his resignation, Tsui also ceased to retain any role in the group. At the same time, the board of directors confirmed that on August 1, 2021, executive directors Iu Kar-ho, Luk Ka-chun had entered into the sale and purchase agreement with Tsui. The sale share for a total consideration of HK $ 8 million, subject to the terms and conditions of the sale and purchase agreement. Further, Iu and Luk have committed to Tsui that within six months of the completion date each of them will procure Blackpaper BVI to transfer 6,750,000 common shares of the company held by Blackpaper BVI to certain employees of long-standing group nominated by Tsui. .

After the transaction, Lu and Luk will own 50% of the shares of Blackpaper BVI, which owns 67.5% of the total issued share capital of the company.

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