SOLOWIN HOLDINGS Reports Unaudited Financial Results for The First Six Months of Fiscal Year 2025

PR Newswire

HONG KONG, Dec. 31, 2024

HONG KONG, Dec. 31, 2024 /PRNewswire/ -- SOLOWIN HOLDINGS ("SOLOWIN" or the "Company", or "we") (Nasdaq: SWIN), a leading financial services firm providing high-net-worth and institutional investors with solutions across traditional and virtual assets, today announced its unaudited financial results for the first six months of fiscal year 2025 ended September 30, 2024.

Mr. Shing Tak Tam, Chief Executive Officer of SOLOWIN, commented, "Amid macroeconomic headwinds and volatile market conditions in Hong Kong and Mainland China, SOLOWIN reports a decrease in revenue for the first six months of 2025, with a loss per share of $0.39 compared to a EPS of 0.10 for the same period in 2024.

To navigate these challenges, we have taken extensive measures to mitigate negative trends and pursue new breakthroughs and business opportunities. Our ongoing business transformation is driven by advancements in Web3 and the latest Fintech developments, as we expand partnerships with key Web3 industry players such as OSL, China AMC, and Zodia Custody. This collaboration allows us to explore emerging opportunities for sustainable growth, leveraging the rise of artificial intelligence and the expanding adoption of digital assets.

We remain confident in our brand strength, robust strategies, and commitment to long-term, sustainable growth within the financial services industry. Notably, in December 2024, SOLOWIN was shortlisted -- alongside industry leaders like China AMC (HK), HSBC, Hang Seng Bank, and Fosun Wealth Holdings -- to participate in the Hong Kong Monetary Authority's (HKMA) Project Ensemble Sandbox. As part of this initiative, SOLOWIN became one of the first-phase testers, initially focusing on the "Fixed Income and Investment Funds" use case for local applications of tokenized currencies and assets.

Looking ahead, we believe our steady yet adaptable strategies, coupled with strong execution, will enable us to navigate uncertainties and seize opportunities, ultimately delivering long-term value to our shareholders."

First Six Months of Fiscal Year 2025 Financial Results

Revenue

Revenue decreased by 60% to $1.06 million for the six months ended September 30, 2024, from $2.64 million for the same period of last year. The decrease in revenue was mainly driven by the decrease in revenue from investment advisory services.

 
                        For the six months ended September 30, 
               --------------------------------------------------------- 
                         2024                           2023 
               ------------------------      --------------------------- 
                                 % of                            % of 
               (in thousands)   revenue       (in thousands)    revenue 
Securities 
 brokerage 
 commissions 
 and handling 
 income        $            75        8%      $            16          1% 
Investment 
 advisory 
 fees                      318       30%                1,559         59% 
Corporate 
 consultancy 
 service 
 income                    237       22%                    -          - 
Asset 
 management 
 income                    380       36%                  498         18% 
Virtual 
 assets 
 transaction 
 income                     15        1%                    -          - 
Interest 
 income                     30        3%                   17          1% 
Referral 
 income                      -        -                   550         21% 
                --------------  -------          ------------  --------- 
Total          $         1,055      100%      $         2,640        100% 
                ==============  =======          ============  ========= 
 
   -- Revenue from securities brokerage commissions and handling income 
      increased to $75,000 for the six months ended September 30, 2024, from 
      $16,000 for the same period of 2023. The slight increase in commissions 
      earned is due to a higher volume of trading activity in the U.S. market. 
   -- Revenue from investment advisory fees decreased by 80% to $318,000 for 
      the six months ended September 30, 2024, from $1,559,000 for the same 
      period of 2023. The decrease was primarily due to a reduced client base 
      and decrease in value-added services to institutional clients. 
   -- Revenue from corporate consultancy service increased to $237,000 for the 
      six months ended September 30, 2024 and the Company did not have 
      corporate consultancy service income for the same period of 2023. The 
      increase was primarily driven by the acquisition of new clients and 
      growing interest from corporate clients seeking to list in the U.S. 
      market. 
   -- Revenue from asset management from related parties decreased by 24% to 
      $380,000 for the six months ended September 30, 2024, from $498,000 for 
      the same period of 2023. The decrease was primarily due to decrease of 
      performance fees derived from Solomon Capital Fund SPC - Solomon Capital 
      SP2, resulting from reduced investor subscriptions and weaker fund 
      performance for the six months ended September 30, 2024. 
   -- Virtual assets transaction income of $15,000 was first recognized for the 
      six months ended September 30, 2024. The increase is primarily 
      attributable to the launch and growing adoption of the Company's virtual 
      assets services, including trading of digital assets through Solomon VA+, 
      and subscription and redemption services for the Bitcoin spot ETF and 
      Ethereum spot ETF. 
   -- Revenue from interest income increased by $13,000, or 76% to $30,000 for 
      the six months ended September 30, 2024, from $17,000 for the same period 
      of 2023. The increase was primarily due to increase in outstanding 
      deposits from the rolling balance cash clients in relation to the 
      securities brokerage services. 
   -- The Company did not have referral income for the six months ended 
      September 30, 2024, compared to $550,000 referral income for the same 
      period of 2023. The referral income was generated by referring investors 
      to our corporate customers or brokers for IPO subscriptions in oversea 
      markets. The Company acted as an agent and earned referral income in a 
      percentage of subscription amount stipulated in the agreement. No such 
      referral activities occurred for the six months ended September 30, 2024. 

Expenses

Expenses increased to $7.35 million for the six months ended September 30, 2024, from $1.30 million for the same period of last year. The increase was mainly due to increase in general and administrative expenses, marketing and promotion expenses and employee benefits expenses for the six months ended September 30, 2024.

   -- Commission and handling expenses -- Commission and handling expenses 
      increased to $18,000 for the six months ended September 30, 2024, from 
      $4,000 for the same period of 2023. The increase was mainly due to more 
      trading activities in US market and was in line with the Company's 
      increase in securities brokerage commissions and handling income. 
   -- General and administrative expenses -- General and administrative 
      expenses increased to $2,016,000 for the six months ended September 30, 
      2024, from $648,000 for the same period of 2023. The Company's general 
      and administrative expenses consist primarily of depreciation of property 
      and equipment, amortization of intangible assets, professional fee, 
      information technology expenses, office leases, and general office 
      expenses. Such increase was mainly due to increase in professional and 
      consultation fee in relation to the newly launched virtual assets 
      business and increase in office lease expenses for new office. 
   -- Marketing and promotion expenses -- The Company's marketing and promotion 
      expenses consist primarily of advertising and other promotional 
      activities. The Company's marketing and promotion expenses increased by 
      $929,000, to $934,000 for the six months ended September 30, 2024, from 
      $5,000 for the six months ended September 30, 2023. This increase 
      includes expenses related to the Hong Kong FinTech Week 2024 and other 
      significant marketing events which were aimed to enhance brand visibility, 
      and promote the Company's services to attract more investors and 
      potential clients. 
   -- (Reversal of) Provision for Expected Credit Losses -- The Company 
      recorded reversal of provision for expected credit losses of $412,000 for 
      the six months ended September 30, 2024, compared to the provision for 
      expected credit losses of $155,000. This is mainly due to the loan 
      receivables which were previously subject to an allowance for expected 
      credit losses but were fully repaid in July 2024. The reversal also 
      reflects the improved recoverability of the receivables in accordance 
      with the Company's credit loss policy. 
   -- Employee Benefits Expenses -- The Company employee benefits expenses 
      increased substantially by $3,875,000, or 788%, to $4,367,000 for the six 
      months ended September 30, 2024, from $492,000 for the six months ended 
      September 30, 2023. This significant increase was mainly due to the 
      implementation of the 2023 Equity Incentive Plan under which 1,980,000 
      ordinary shares were issued to employees as share rewards and higher 
      staff costs associated with retaining and recruiting employees to support 
      the Company's expanded business operations. 
   -- Referral fee -- For the six months ended September 30, 2024, the Company 
      incurred referral fee of $139,000 related to the Company's investment 
      banking segment. These expenses were associated with the successful 
      referral of clients for corporate consultancy or financial advisory 

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