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

Mar 8, 2022 | Business

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 upgrade 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.
RESULTS HIGHLIGHTS (as of 31 December 2021)
— Revenue increased by 97.4% YoY to approximately RMB904.1 million.
— Net profit increased by 307.1% YoY to approximately 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 a cash and cash equivalents balance of approximately RMB405.8 million as of 31 December 2021 (31 December 2020: RMB302.9 million).

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 increase 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, revenue 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’s 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 live streaming 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 are expected in 2022:
1. Establishment of the Laliga Land ecosystem with LaLiga Club: to enable football fans to have access to 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 the 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 the IP development business, and Shanghai Design Week will become one of our major growth drivers in the 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 look for acquisition opportunities on e-commerce operation companies, planning to close the deal within this year, aiming 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, 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 Greater China, claiming a 9.2% share of the market. All businesses of the Company are driven by interactive data performance marketing, continuously accelerating its digital capabilities to provide brands with one-stop comprehensive marketing service solutions for “offline + online + metaverse marketing”.






Topic: Press release summary

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Jan 12, 2022 | Business

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Activation Group Reports Significant Improvement in Its 2021 Interim Results

Aug 3, 2021 | Business

Activation Group Holdings Limited (“Activation” or the “Company”, collectively, the “Group”, stock code: 9919), a provider of integrated marketing solutions in Greater China, is pleased to announce its unaudited 2021 interim results. The Group has achieved a significant improvement, with revenue increasing substantially by approximately 436.5% to RMB385.2 million and profit to RMB38.5 million (2020 Interim: loss of RMB20.0 million). Profit attributable to owners of the Company was RMB35.5 million (2020 Interim: loss of RMB19.3 million). Basic earnings per share were RMB4.80 cents, compared with a loss per share of RMB2.47 cents in 2020 Interim.

The Board has declared the payment of an interim dividend of HK1.03 cents and an interim special dividend of HK6.93 cents for the six months ended 30 June 2021 (2020: nil).

Due to the rapid rise in luxury consumption in mainland China and the recovery of the Hong Kong market, the Group’s Experiential Service experienced exponential growth. Revenue generated from associated services has significantly increased by 1,286.5%, rising from RMB20.0 million in 2020 Interim to RMB277.3 million in 2021 Interim. Activation Events has launched numerous events, including CARTIER “Trees” Exhibition, GUCCI “Aria” Collection Launch Show, GUCCI Garden “Archetypes” Exhibition, DIOR 2021 FALL Fashion Show, CINDY CHAO “The Art Jewel” Exhibition, MERCEDES-AMG GLA 35 & GLB 35 Extraordinary Journey, etc. as well as other large-scale projects in the first half of 2021.

During the review period, the Group upgraded its original digital marketing offering to a comprehensive digital campaign offering which includes the MCN and Target Media Services. Revenue generated from such services increased by 66.2% to RMB78.3 million in 2021 Interim. With respect to public relations services, revenue generated from this segment surged by 427.0% to RMB19.5 million. During the interim report period, the group is the retainer agency of numerous brands, including MAXMARA, CLARINS, GIVENCHY BEAUTY, SK-II, TORY BURCH and LOEWE; the group has also launched quite a few digital marketing campaigns, for instance LEGO CNY Digital Campaign, BALABALA “Boundless Dream” Campaign and DIOR 2021 J’adore Infinissime MP Project.

During the interim period, Activation organized the 2021 Criterium Ride Race in Lin-gang, Shanghai, which attracted the participation of more than 2,000 riders. The Company is planning to organize two to three more events in the second half year. Revenue generated from this service significantly increased by 910.0% to RMB10.1 million as at 2021 Interim. Separately, the Group has signed two business cooperation agreements pertaining to its IP business, which include: (i) FISE (the world renowned X-games league under Hurricane Group); and (ii) Jiu Shi Sports Group (one of largest state-owned sports groups that hold the exclusive rights to Formula 1, ATP Shanghai 1000) to co-develop an IP that will be owned by both parties in China.

Mr. Steve Lau Kam Yiu, Joint-chairman and Chief Executive Officer of Activation, said, “After the impact of the pandemic in the first half of 2020, China’s economy has achieved rapid recovery and rebound, and this trend continues in 2021. As a result of economic recovery, and coupled with the impact of inflation, high-end consumption has been significantly stimulated, which has also driven the rapid growth of the luxury marketing industry. As an industry leader in the luxury experiential industry, our experiential marketing and public relations businesses have benefited greatly and achieved significant growth. The Group’s investment in digital marketing in recent years has started to bear fruits. The next step in the Group’s strategy will be to develop digital marketing technology and e-commerce, and to provide all-inclusive e-commerce services. We will further improve our capabilities and teams in e-commerce operations, and hope to integrate offline and online consumer data; constantly improve and amass data on consumer behavior and preferences, particularly on mid-to high-end brand consumers; assist brands in making operational decisions; enhance the strategic value and stickiness of the Group with such brands, and ultimately, to share our profits from the incremental rise in e-commerce sales.”

About Activation Group Holdings Limited
Activation Group Holdings Limited is a leading Interactive Data Performance Marketing Group for Fashion Brands in Greater China, offering experiential marketing, digital and brand communication, and public relations services, digital marketing, e-commerce services as well as IP operations etc. It is the largest experiential marketing company serving luxury and trendy brands in Greater China, claiming a 7% share of the market. Its shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 16, 2020. All businesses of the Company are driven by interactive data performance and the Company has kept accelerating the comprehensive deployment of its digital marketing capability, including setting up the MCN organization, providing effective marketing and live e-commerce services to brands, thereby build a closed loop – marketing to sales – system.


Topic: Press release summary

Activation Group and Vision Entertainment Enters into a Strategic Cooperation

Jul 10, 2021 | Business

A provider of integrated marketing solutions in Greater China, Activation Group Holdings Limited (“Activation” or the “Company”, collectively, the “Group”, stock code: 9919), has entered into a strategic cooperation with Vision Future (Shanghai) Media Technology Co., Ltd.* (“Vision Entertainment”) to form a joint venture, in which Activation owns majority shares. The partners will together explore the huge potential of livestream e-commerce business at the forefront of the digital marketing realm in mainland China.

Pursuant to the strategic cooperation, the two parties will jointly operate DouYin key opinion leaders (“KOLs”) livestream business and DouYin brand business to serve luxury and fashionable lifestyle brands. The joint venture will marry Activation’s celebrity and brand resources with Vision Entertainment’s rich experiences in the livestream e-commerce sector to help brands expand online marketing and their e-commerce business on the DouYin platform. It will draw on its professional marketing capabilities to bring in more live e-commerce celebrities, and nurture DouYin KOLs to build a DouYin KOLs matrix. Last year, Activation founded the MCN organization Avant Plus, which with its rich experiences and resources in the fashion industry, has forged long-term cooperation with a good number of trend-setting celebrities and KOLs, including the famous actress Charmaine Sheh, the fashion blogger Jiangnan BoyNam and “Di Bai Nai Nai”, assisting them in setting up social media accounts thereby facilitate word-of-mouth marketing for fashion and luxury brands. After Avant Plus, the Group will, through such cooperation with Vision Entertainment, strive to realize commercial brand advertising by the DouYin KOLs matrix, taking and selling customers’ products through livestreaming to form a closed-loop by generating business traffic with advertising + e-commerce. And leveraging the high user stickiness on DouYin platform, the Group will earn the dividend from celebrity livestream e-commerce and create a new ecological model of celebrity livestreaming and DouYin e-commerce.

Mr. Steve Lau Kam Yiu, Joint-Chairman and Chief Executive Officer of Activation, said, “As one of the first companies to tap the power of DouYin, Vision Entertainment has extensive experience in developing livestream e-commerce business and thorough understanding of the DouYin ecology and development pattern. It has been among those topping DouYin’s integrated organization ranking for two consecutive years, and has contracts with more than 120,000 KOLs and celebrities including Zhu Zixiao, Yu Zhen and Yuan Chengjie. The company also has rich experience in operating DouYin star accounts and in livestream e-commerce cooperation, with more than 2,000 brands as long-term partners. Whereas Activation, with the luxury products and fashion industry as its focus, has built up a formidable relevant customer base. This partnership will strengthen the Group’s capabilities in live e-commerce at the frontier of digital marketing to help brands build a closed-loop business from marketing to sales. In the future, the Group will continue to, through different partnerships, step up investment in enhancing the professionalism and competitiveness of its digital marketing and brand promotion endeavors.”

In the past few years, the e-commerce agency operation services and e-commerce services markets in mainland China have continued to grow rapidly. In 2019, the total transaction of live e-commerce amounted to RMB451.29 billion, a 200% increase year-on-year, and the relatively strong growth momentum is expected to continue in the coming two years. With content platforms and e-commerce transactions become more and more integrated, the penetration rate of live broadcasts is expected to increase from 4.5% in 2019 to 20.3% in 2022. Alive to consumers’ changing spending patterns, Activation is ready to make deployment in the area, so as to help luxury and fashion brands, previously rare players in the live broadcast arena, seize the mushrooming business opportunities therein.

About Activation Group Holdings Limited
Activation Group Holdings Limited is a leading and fast-growing integrated marketing solutions provider and brand/IP operator focusing on providing in Greater China experiential marketing, digital and brand communication, and public relations services. It is the largest integrated marketing company serving luxury and trendy brands in Greater China, claiming a 7% share of the market. Its shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 16, 2020. The Group also focuses in the IP activation and sports IP activation sectors. Sports IP activation business covers exclusive rights to organize authorized events with LaLiga Club brand and Le Tour de France brand in China. The Company has kept hastening comprehensive deployment of its digital marketing capability, including setting up the MCN organization, securing e-commerce sales of derivatives of LaLiga Club and Le Tour de France and providing effective marketing and live e-commerce services to brands, thereby build a closed loop – marketing to sales – system.

About Vision Future (Shanghai) Media Technology Co., Ltd.
As a leading multimedia display service organization in the PRC, Vision Future (Shanghai) Media Technology Co., Ltd. is committed to the star e-commerce business, with a number of branches in first-tier cities such as Beijing, Shanghai and Hangzhou. Since its establishment, it has been in a leading position in the field of star and KOL livestreaming and e-commerce businesses in the PRC. Its principal businesses include livestreaming, e-commerce, gaming, advertising, information flow, short video, etc. The company is professionally committed to the comprehensive training, packaging and publicity of signed livestreaming artists as well as the provision of first class talented hosts for its own platform and the industry through a “Star Host Training Program” in order to promote the healthy and orderly development of the livestreaming industry. With its professional operation team, it will also train up more amateur hosts and enable more stars to play an active role in livestreaming.

Media Enquiry:
Strategic Financial Relations Limited
Mandy Go +852 2864 4812 mandy.go@sprg.com.hk
Eddie Li +852 2114 4170 eddie.li@sprg.com.hk
Corinne Ho +852 2114 4911 corinne.ho@sprg.com.hk
Website: http://www.sprg.com.hk


Topic: Press release summary

Activation Group Issues Positive Profit Alert

Jul 7, 2021 | Business

A provider of integrated marketing solutions in Greater China, Activation Group Holdings Limited (“Activation” or the “Company”, collectively, the “Group”, stock code: 9919), today issued a positive profit alert. Based on a preliminary review of the unaudited management accounts of the Group for the six months ended 30 June 2021 (the “Interim Period”), the Group is expected to record a net profit of approximately RMB38.0 million for the Interim Period, as compared to the net loss of approximately RMB20.0 million for the six months ended 30 June 2020.

Based on the relevant information available, the expected increase in the net profit of the Company for the Interim Period is mainly attributable to the overall increase in the revenue generated from the integrated marketing businesses due to the recovery of the economy in the PRC as the COVID-19 pandemic gradually came under control which offset the adverse effect of the outbreak of pandemic in early 2020 on the revenue of the Group.

About Activation Group Holdings Limited
Activation Group Holdings Limited is a leading and fast-growing integrated marketing solutions provider and brand/IP operator focusing on providing in Greater China experiential marketing, digital and brand communication, and public relations services. It is the largest integrated marketing company serving luxury and trendy brands in Greater China, claiming a 7% share of the market. Its shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 16, 2020. The Group also focuses in the IP activation and sports IP activation sectors. Sports IP activation business covers exclusive rights to organize authorized events with LaLiga Club brand and Le Tour de France brand in China. The Company has kept hastening comprehensive deployment of its digital marketing capability, including setting up the MCN organization, securing e-commerce sales of derivatives of LaLiga Club and Le Tour de France and providing effective marketing and live e-commerce services to brands, thereby build a closed loop – marketing to sales – system.


Topic: Press release summary