The Board of Directors of Hypebeast Limited has announced the Group’s annual results for the year ended 31st March 2021.
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Revenue for the year totaled US$86.8 million; notably, revenues from the fiscal second half (“2H2021”) were 36.2% higher than revenues recorded in the first half of the fiscal (“1H2021”), chiefly due to strength in recovery of the Media business heading out of the COVID-19 pandemic, both by way of volume of campaign execution and by way of increasing contract values. Media recovered steadily, with total signed contract value during FY2021 increasing by approximately 20% compared to FY2020.
The Group’s net profits totaled US$9 million, representing a year-on-year increase of 7.3%, chiefly due to cost control measures adopted by management during COVID-19. Notably, net profit from 2H2021 was US$6.4 million compared to US$2.6 million for the first half of FY2021, representing a significant increase of 137.8%. Net profit margin for 2H2021 was 12.8%, compared to 7.3% for 1H2021. Such trends primarily reflect a resurgence of the Media business from COVID-19.
“The pandemic has led to an expected downside in our overall revenue, but we are expecting strong growth as countries begin heading out of lockdowns especially in view of significantly improving revenue, gross and net profits in the second half of the fiscal.” said Kevin Ma, Founder and CEO of Hypebeast Ltd.
“We are very much positioned for growth, ready to make a strong recovery out of the pandemic and extend our reach. Looking forward, we will focus on regional market expansion, category diversification to accommodate growing non-endemic sectors such as gaming, technology and F&B, and accelerating conversion of our editorial readers and visitors into e-commerce and retail customers alongside other strategies,” continued Ma.
The Group recorded strong revenue recovery most notably in 2H2021, with second half revenues totaling US$50 million which represented an increase of 36.2% over revenues for 1H2021 of US$36.7 million; total revenues were US$86.8 million compared to US$96.7 million for the prior year, which represented only a moderate year-on-year decrease of 10.3% despite significant COVID-19 pandemic-related impact in 1H2021.
It is reported that the total value in signed contracts for the Media segment increased by 20% during FY2021 as compared to the prior year.
Media gross margin for 2H2021 was 57.6% compared to 50.4% for 1H2021, reflecting an overall increase in revenues and more efficient cost control. E-commerce & Retail gross margin for 2H2021 was 42.2% compared to 36.3% for 1H2021, reflecting a higher mix of products sold at full price;
The Group delivered net profits of US$9 million, a significant 7.3% increase compared to FY2020 – notably net profit from 2H2021 was 137.8% higher than net profit for 1H2021. The 12-month average website monthly unique visitors and aggregated social media following improved to 15.6 million and 26.2 million, representing a 0.7% and 12.4% increase over the last fiscal year, respectively. Such increases reflect overall trends in user following being more heavily social media focused.
It is also seen that the COVID-19 pandemic accelerated digitalization of advertising as global brands continue to allocate an increased proportion of marketing dollars to online advertising; the Group forecasts a positive effect on the Media segment going forward.
COVID-19 pandemic-related disruptions in 1H2021 resulted in pent-up demand from brand partners for digital marketing services; the Group’s strong second half results reflect increased investment in its services, and the Group expects this momentum to carry over to the first half of the next fiscal year (“1H2022”) and beyond.
Strength built upon opinion leadership over a loyal community of Gen Z and millennial user-customers coupled with healthy balance sheet and liquidity, streamlined business model, and competitive, unique 360-degree advertising services allow Hypemaker, the Group’s agency, to continue to stand out amongst brand advertisers and advertising agencies.
There is planned integration of Hypebeast’s retail services with compelling and engaging content from its media platforms creates a powerful user-customer funnel for its e-commerce platform, allowing loyal community of readers to enjoy a seamless shopping experience on an integrated site and/or app.
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The Hypebeast building in New York City is slated to open in 2H2021, which will integrate its flagship retail store, a coveted venue for activations and cultural events, as well as host its Group’s US East Coast office; the Group plans to drive greater brand awareness and community building through this landmark location, which will benefit both Media and E-commerce & Retail segment growth within the U.S. region and globally.
The Group is geographically and strategically well positioned to capture significant growth opportunities in both Media and E-commerce & Retail in Asia through leveraging the Group’s brand popularity and high-profile networks – particularly, in South Korea, Japan, China and Southeast Asia.