Listed Hong Kong pawn business Oi Wah says it is looking to open more stores after profit rose 95 per cent.
Oi Wah, founded in 1975, currently owns 12 pawnshops in various locations in Hong Kong and is independently ranked the largest pawn business in the territory. Oi Wah diversified into mortgage loan business in 2009.
In the year to February, pre-tax profit rose 92 per cent, profit attributable to shareholders 95 per cent, to HK$80.1 million.
Turnover rose 52.9 per cent to $146.5 million, mainly attributable to an increase in the group’s interest income earned on its loan receivables by approximately $48.8 million or 51.7 per cent to $143.1 million and an increase in the gain on disposal of repossessed assets of $1.9 million or 126.7 per cent.
Oi Wah says the Hong Kong pawn loan business was a cornerstone for the group, with interest income maintaining steady growth and a total of $578 million granted.
“Although the gold price we pawned per ounce decreased during the year when compared to that in last year, the group recorded a healthy growth in turnover. The average loan amount of transaction increased to approximately $5200 per transaction.
During the year, Oi Wah focused on high net worth customers, increasing the number of loans it terms “large amount” from 220 transactions in 2014 to 325 last year.
It attracted new customers in this sector from increased advertising and promotional activity.
Looking ahead, the group says it expects its pawn loan business to continue to record organic growth and bring stable income.
“The group will continue to target on high net worth customers and enhance its advertising efforts to generate more income from one-to-one pawn loan appointment services, which usually involves pawn loan transactions of larger loan amount. The group is also considering allocating more resources to set up more pawn shops in order to expand its business scope and market share.”
Chairman and CEO Edward Chan said there is “ample development opportunities” for loan business in the Southeast Asia regions, and the group is examining and considering to enter other markets in the region to conduct small-scale loan businesses and diversify its business portfolio.