Activation Group (9919.HK) 2021 Annual Results Hit a Record High

Net Profit Significantly Increased by 307.1% YoY to Approx. RMB102.6 Million

RESULTS HIGHLIGHTS (as of 31 December 2021)

• Revenue increased by 97.4% YoY to approximalty RMB904.1 million.
• Net profit increased by 307.1% YoY to approximalty RMB102.6 million; and profit attributable to owners of the Company was about RMB92.5 million.
• Basic earnings per share of RMB12.51 cents
• Gross profit margin increased from 28.8% in FY2020 to 29.6% in FY2021
• Net profit margin increased from 5.5% in FY2020 to 11.3% in FY2021
• The Group continues to have a robust financial position with cash and cash equivalents balance of approximately RMB405.8 million as at 31 December 2021 (31 December 2020: RMB302.9 million).

HONG KONG SAR – Media OutReach – 7 March 2022 – A leading Interactive Data Performance Marketing Group for Pan-Fashion Brands in Greater China, Activation Group Holdings Limited (�Activation” or the “Company”, collectively, the “Group”, stock code: 9919), has today announced record high 2021 annual results for the year ended 31 December 2021 (“FY2021”). Powered by its successful strategic upgraded to a pan-fashion brand data interactive marketing group, opportunities created by strong growth of the domestic Chinese luxury market and accelerated digitalization continue to fuel the Group’s long-term and sustainable profitability increases.

During the Period under Review, the Group’s revenue was up by 97.4% year-on-year (“YoY”) YoY to approx. RMB904.1 million and net profit surging by 307.1% YoY to approx. RMB102.6 million. Net profit margin was 11.3%, representing a YoY increased of 5.8 percentage points. The profit attributable to equity shareholders of the Company was approx. RMB92.5 million. The basic earnings per share were RMB12.51 cents.

For FY2021, the Board has recommended the payment of a final dividend of HK2.00 cents per share. Together with the interim dividend, the Group would provide a total dividend of HK9.96 cents per share for the whole financial year (FY2020: nil).

Business Review

During the Period under Review, revenu e for the experiential marketing business segment was approx. RMB686.0 million, an increase of 120.3% from approx. RMB311.4 million in FY2020. The Group has actively promoted its interactive data marketing business in FY2021. Fashion shows and exhibitions are now not only primary events in China with a large volume of guests on-site, but also as vehicles for online content for secondary marketing activities, creating massive online exposure through data interactive services. More than 200 offline events were completed throughout FY2021 including CHANEL first global fragrance exhibition, CARTIER “Trees” Exhibition, CINDY CHAO “The Art Jewel” Exhibition, and GUCCI “Aria Collection” Fashion Show, etc.

Revenue for digital and communication business was approx. RMB201.7 million, an increase of 51.3% compared with approx. RMB133.3 million in FY2020. During the year, the Group formed a joint venture with Vision Entertainment to expand its Douyin live-streaming e-commerce, with promising progress after just five months. The Group’s annual GMV has achieved approx. RMB473.9 million for an event with only two celebrity spokespersons, Zhang Li and Chen Yanfei joining livestreaming e-commerce. In December 2021, the Group further introduced three new celebrities for this business, for a total of five celebrities by the end of FY2021, including Lin Xiaozhai ( ??? ) and Rosamund Kwan Chi Lam.

Revenue generated by IP development business was approx. RMB16.3 million, up 22.6% compared with approx. RMB13.3 million in FY2020. During the year, the Group has signed a memorandum of understanding (“MOU”) with Hongkong Land’s affiliated company, planning to establish a joint venture for long-term cooperation on operating relevant venues in West Bund Financial Hub within Xuhui District, Shanghai. Besides, the Group entered into a strategic co-creation partnership with Shanghai Design Week in February 2022 , became one of the co-creation partners with government agencies and industry leaders to participate in the branding and operation of Shanghai Design Week. The Group, together with Shanghai Design Week, is committed to promoting Shanghai as a world-class City of Design, attracting high-quality global design talent and resources to create a local and international original design center.

Outlook and Strategy

The Group adheres to the development strategy of “content + marketing + technology” and “organic growth + external merger & acquisition + diversified innovation.” Meanwhile, the Group has expanded its layout in the fields of digitalization and innovation to prepare for new opportunities. Thus, the Group has invested in Velocious Technologies Inc., a leading enterprise in the metaverse and virtual reality technology in China, forming a joint venture with that company’s subsidiary, Beijing Weikuai Technology Co., Ltd. ( ?????????? ) (“VeeR”), to create a new field of pan-fashion metaverse marketing and provide complete “offline events + online data interaction + metaverse” marketing services for the brands.

The Group’s two major metaverse projects expected in 2022:

1. Establishment of the Laliga Land ( ???????? ) ecosystem with LaLiga Club: to enable football fans to have access in watching football matches and purchase the related merchandise in metaverse world;

2. Establishment of DesignVerse of Shanghai Design Week: to provide the design industry with a design communication platform in metaverse, meanwhile, it helps local brands to go abroad and attract foreign brands to China, promoting Shanghai as a “world-class” design center.

Mr. Steve Lau Kam Yiu, Joint-chairman and Chief Executive Officer of Activation, said, : “In the future, our businesses will focus on data interactive marketing as the core business model. We will constantly accelerate the overall digitalized marketing layout, so as to provide one-stop comprehensive “offline + online + metaverse” marketing service solutions for our clients, striving to be the world’s leading pan-fashion data interactive marketing group. Recently, we have made a new breakthrough in IP development business, and Shanghai Design Week will become one of our major growth drivers in future. At present, Shanghai is already ranked among the top in the field of culture and creative design in China, and the total output of the creative and design industry will exceed RMB 2 trillion by 2025, which will drive the development in China in the future. With the rapid growth of digitalization, we will speed-up our metaverse projects and actively looking for acquisition opportunites on e-commerce operation companies, planning to close the deal within this year, aming to create synergy with our existing brand resources.”

About Activation Group Holdings Limited

Activation Group Holdings Limited (9919.HK) was listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 16, 2020, is a leading Interactive Data Performance Marketing Group for Pan-Fashion Brands in Greater China. The Company’s core business covers experiential marketing, digital and brand communication and IP operation including experiential marketing and PR services, digital marketing, metaverse marketing, live streaming e-commerce services, and world-class IP operation, etc. Currently, the Company has accumulated more than 500 brands, and its mid-to-high-end experiential marketing services rank first in the Greater China, claiming a 9.2% share of the market. All businesses of the Company are driven by interactive data performance marketing, continuously accelerate its digital capabilities to provide brands with one-stop comprehensive marketing service solutions for “offline + online + metaverse marketing”.

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