The board of directors of Hypebeast Limited (HKG: 150) has announced the Group’s unaudited interim results for the six months ended 30 September 2021 (1H2022).
The Group has proven to overcome and emerge stronger from last year, indicated by the all-time high interim performance recorded in 1H2022. Revenue experienced an overall strong double-digit percentage growth, with an increase of 54.4% as compared to 1H2021, with the Media segment excelling with an 89.4% increase in revenue, reaching HK$326.9 million. Gross and net profits also saw exceptional growth, with an increase of 102% and 201.5%, amounting to HK$258.4 million and HK$63.0 million respectively. This translated to an increase of gross and net profit margins of 13.8 percentage points and 7.3 percentage points, reaching 58.6% and 14.3% respectively.
The significant growth in the Media segment was mainly driven by the expansion of the media and agency client base in the Group’s core markets (US, United Kingdom, China, Hong Kong and South Korea) which, combined, represented a period-on-period growth in total signed contract value (a key operating measure defined as the total dollar value of media contracts signed within a period) of 148.1% in 1H2022 versus 1H2021.
Hypebeast Ltd. made consistent efforts in strategic expansions that attracted and reached a broader customer base across different regions. Major launches include the introduction of food & beverage venture HYPEBEANS in South Korea, and also the recent launch of the HBX online flagship store on TMall Global in efforts to raise brand awareness and to convert customers to HBX.com. The Group continues to explore similar opportunities by establishing various offline channels and touchpoints in order to drive brand awareness and bring the online presence to the offline world.
“I am excited to share yet another record-breaking interim that is the result of our teams’ efforts in delivering exciting projects and activations,” said Kevin Ma, Founder and CEO of Hypebeast Ltd. “Our mission has always been to influence our fanbase, customers and as many groups of unreached audiences as possible through unique experiences that drive forward the boundaries of culture. From our Hypebeast Ecosystem, to the expansion of HYPEBEANS in Hong Kong and Seoul and our upcoming flagship store in New York City, we have displayed great cultural growth, which has always, and will continue to be reflected, in significant business growth.”
Media Segment
— The Group is and continues to be well-positioned to capture significant growth opportunities in the Media segment as indicated by record-high total signed contract value which represents an increase of approximately 54.4% as compared to 1H2021;
— The Group effectively adjusted its production strategies so as to adapt to the new environment. Campaign productions were more streamlined and cost-optimized and such adjustments resulted in a significant improvement in profitability. Gross profit soared in 1H2022 and reached a record high of HK$207.4 million, indicating an increase of HK$120.4 million, or 138.5%, versus 1H2021 (roughly, the period during COVID-19 pandemic) and 65.7% versus 1H2020 (pre-COVID-19 pandemic). The Group recorded a notable rise in gross profit margin in 1H2022, an increase of 13.0 percentage points to 63.4% in 1H2022 from 50.4% in 1H2021 or 15.7 percentage points from 47.7% in 1H2020.
E-Commerce and Retail Segment
— The E-Commerce and Retail Segment revenue increased steadily from HK$112.8 million in 1H2021 to HK$113.9 million in 1H2022, or an increase of 1.0%. Gross profit amounted to HK$51.0 million, representing an increase of HK$10.0 million, or 24.5%. Such increases were mainly driven by the increase in the proportion of full-price items and the improvements in sell-through rates;
— The Group continued to improve and refine its product offerings on HBX.com during the period, as the average retail price of products sold increased from approximately HK$969 in 1H2021 to HK$1,050 in 1H2022, whilst the average order value increased by 8.1% from HK$1,784 in 1H2021 to HK$1,929 in 1H2022, such increases are indicative of the Group’s customers’ focus on value over price and their willingness to spend on a widening range of HBX’s curated and high-quality products.
Overall
— Selling and marketing expenses of the Group increased by 43.7% from HK$49.7 million in 1H2021 to HK$71.4 million in 1H2022 and correspondingly as a percentage of revenue, decreased from 17.4% in 1H2021 to 16.2% in 1H2022. The recovery from the COVID-19 pandemic led to increases in (i) the new headcounts within the Group’s sales and marketing team to drive current and future revenue and business growth, (ii) variable commission paid for the respective size of our contracts and the level of production within our contractual pipeline for the relevant period, and (iii) spending in the Group’s social media marketing and advertising for digital and e-commerce platforms due to a shift to more cost-effective channels;
— Administrative and operating expenses of the Group increased by 74.4% from HK$53.6 million in 1H2021 to HK$93.8 million in 1H2022 and correspondingly as a percentage of revenue, increased from 18.8% in 1H2021 to 21.3% in 1H2022. The overall increase was mainly attributable to more favorable prior year comparatives due to management-led cost-saving measures employed during 1H2021.
Please view the full results announcement here, and visit our corporate website for more information.
https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1126/2021112600407.pdf
https://hypebeast.ltd/
Investor Enquiries: investors@hypebeast.com
Media Inquiries: pr@hypebeast.com
About Hypebeast Limited (HKG: 150)
Hypebeast Ltd. started from a sneaker website founded by Kevin Ma in 2005 to a publicly listed media company in 2016. With a total reach of over 44.6M users across all platforms, The media group boasts a global readership across Asia Pacific, North America, Europe and more, with the flagship platform available in five languages. The group has expanded its publishing brands to a wider scope in recent years, encompassing Hypebeast and its multiple content distribution platforms, HBX, our e-commerce and retail platform, and Hypemaker, our global agency.