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Oriental Culture Holding LTD Announces 2020 Fiscal Year Financial Results

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HONG KONG, April 30, 2021 (GLOBE NEWSWIRE) -- Oriental Culture Holding LTD. ("OCG" or the "Company") (NASDAQ: OCG), a leading online provider of collectibles and artwork e-commerce services, today announced its

HONG KONG, April 30, 2021 (GLOBE NEWSWIRE) -- Oriental Culture Holding LTD. ("OCG" or the "Company") (NASDAQ:OCG), a leading online provider of collectibles and artwork e-commerce services, today announced its financial results for the fiscal year ended December 31, 2020.
 

Key Financial Highlights for Fiscal Year 2020:

  • Operating revenues increased by $4.0 million or 29.7% from $13.4 million in fiscal year 2019 to $17.4 million in fiscal year 2020.
  • Gross profit was $14.8 million in 2020 as compared to $12.1 million in 2019, representing a 22.1% growth from the same period in 2019.
  • Net income was $2.0 million in 2020, a decline of $7.1 million or 77.5% from $9.1 million in the same period of 2019.

     

    For the Fiscal Years Ended December 31,
($ millions, except per share data) 2020     2019     % Change
Revenue   $17.4     $13.4     29.7%
Gross profit   $14.8     $12.1     22.1%
Gross margin   85.1%     90.3%     -5.2 percentage points
Income from operations $1.65     $8.98     -81.7%
Operating profit margin   9.5%     67.0%     -57.5 percentage points
Net income $2.0     $9.1     -77.5%
Earnings per share $0.13     $0.64     -79.6%
Net book value per share   $2.15     $0.92     133.7%

The information in this press release is subject to the more complete presentation set forth in in our Annual Report on Form 20-F for the period ended December 31, 2020 which will be filed with the Securities and Exchange Commission on April 30, 2021.

Mr. Lewis Wan, Chairman of the Board of Directors of the Company commented, "As Covid-19 vaccines become available to wider community in the world, we believe a global economic recovery in 2021 is around the corner. With quantitative easing and low interest rate, capital flow and world economy will likely head for a change. We believe that as money pours into the market as a common tool to stimulate economic growth, the scarcest asset will not be cash but real, liquid assets, especially those are valued in RMB considering the growth in China. The products traded on OCG's platforms are both valued in RMB, and are liquid assets that worth investing in with high collection values."

"The online artwork and collectible trading markets will continue to attract strong investor interests as investor and collector confidence grows with the rise of China's economy and the middle class. OCG rides on the right industry cycle and is confident that the Company's long-term performance will benefit from the capital inflow and number of clients growth. OCG looks forward to creating increasing value for shareholders and share its development with the wider capital market," Mr. Wan added.

Ms. Fiona Ni, Chief Financial Officer of the Company commented: "Our operating revenues increased by $4.0 million or 29.7% from $13.4 million in fiscal year 2019 to $17.4 million in fiscal year 2020. Gross profit was $14.8 million in 2020, representing a 22.1% growth from the same period in 2019. Newly listed products and new accounts opening have driven most of the positive rebound in OCG's performance in the second half of 2020, which generated sales mainly from the collectibles and artwork listing services, marketing services and transaction fees. As of December 31, 2020, the number of types of collectibles, artwork and commodities listed on OCG's platforms were 303, representing 163% increase from the previous year."

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"During the year 2020, OCG also had approximately 95,000 new accounts opened on the Company's trading platforms, representing a year-on-year growth of 44% from approximately 66,000 new accounts opened during the same period of 2019," Ms. Ni said.

About Oriental Culture Holding LTD

Oriental Culture Holding LTD is an online provider of collectibles and artwork e-commerce services, which allow collectors, artists, art dealers and owners to access an art trading market with a wider range of collectibles and artwork investors. Through its subsidiaries in Hong Kong, the Company provides trading facilitation for individual and institutional customers of all kinds of collectibles, artworks and certain commodities on its online platforms, as well as online and offline integrated marketing, storage and technical maintenance service to customers in China. For more information about the Company, please visit: www.ocgroup.hk.

Safe Harbor Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may, "will, "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements.  Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following:  the Company's goals and strategies; the Company's future business development; financial condition and results of operations; product and service demand and acceptance; reputation and brand; the impact of competition and pricing; changes in technology; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC.  For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward‐looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

The Company:

IR Department

Email: IR@ocgroup.hk

Phone: +86 (025) 85766891

Investor Relations:

Janice Wang        

EverGreen Consulting Inc.

Email: IR@changqingconsulting.com

Phone: +1 571-464-9470 (from U.S.)

+86 13811768559 (from China)

 

ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

    December 31,     December 31,  
    2020     2019  
ASSETS                
             
CURRENT ASSETS            
Cash and cash equivalents   $ 24,036,174     $ 9,184,671  
Short-term investment     1,056,286       1,749,092  
Accounts receivable, net     402,428       1,263,224  
Other receivables and prepaid expenses     199,515       32,942  
Deposit     13,333,538       -  
Total current assets     39,027,941       12,229,929  
                 
PROPERTY AND EQUIPMENT, NET     372,215       460,869  
                 
OTHER ASSETS                
Escrow     600,000       -  
Investment     535,617       500,967  
Intangible assets, net     572,992       739,793  
Deferred offering costs     -       782,029  
Total other assets     1,708,609       2,022,789  
                 
Total assets   $ 41,108,765     $ 14,713,587  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES                
Accounts payable   $ 4,831,394     $ 333,505  
Accounts payable - related parties     1,229,381       207,766  
Deferred revenue     243,355       176,457  
Other payables and accrued liabilities     1,043,383       695,806  
Other payables - related parties     7,312       61,318  
Taxes payable     184,694       139,463  
Total current liabilities     7,539,519       1,614,315  
                 
Total liabilities     7,539,519       1,614,315  
                 
COMMITMENTS AND CONTINGENCIES                
                 
SHAREHOLDERS' EQUITY                
Preferred shares, $0.00005 par value, 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and 2019, respectively*     -       -  
                 
Ordinary shares, $0.00005 par value, 900,000,000 shares authorized, 30,054,712 and 24,800,000 shares issued***, 20,444,712 and 15,190,000 shares outstanding as of December 31, 2020 and 2019, respectively**     1,503       1,240  
                 
Treasury shares, at cost, 9,610,000 shares issued as of December 31, 2020 and 2019, respectively***     (481 )     (481 )
                 
Additional paid-in capital     18,884,992       1,608,045  
Statutory reserves     112,347       112,347  
Retained earnings     13,647,770       11,599,663  
Accumulated other comprehensive income (loss)     923,115       (221,542 )
Total shareholders' equity     33,569,246       13,099,272  
Total liabilities and shareholders' equity   $ 41,108,765     $ 14,713,587  

 

* gives retroactive effect to the re-designation of preferred shares on September 12, 2019.
** gives retroactive effect to the re-designation of ordinary shares on September 12, 2019 and the 2-for-1 forward share split to authorized, issued and outstanding shares on November 8, 2019.
*** gives retroactive effect to the surrender of an aggregate of 12.5% of our then outstanding ordinary shares from our existing shareholders at no consideration to the Company as treasury shares on November 8, 2019 and retroactive effect to the second surrender of an aggregate of 30.0% of our then outstanding ordinary shares from our existing shareholders at no consideration to the Company as treasury shares on May 28, 2020.

The accompanying notes are an integral part of these consolidated financial statements.

 

ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

    For the Years Ended

December 31,

 
    2020     2019  
             
OPERATING REVENUES:            
Net revenues   $ 17,225,630     $ 13,203,049  
Net revenues - related parties     213,172       246,386  
Total operating revenues     17,438,802       13,449,435  
                 
COST OF REVENUES:                
Cost of revenues     (907,402 )     (722,198 )
Cost of revenues - related party     (1,734,761 )     (607,679 )
Total cost of revenues     (2,642,163 )     (1,329,877 )
                 
GROSS PROFIT     14,796,639       12,119,558  
                 
OPERATING EXPENSES:                
Selling and marketing     (4,242,231 )     (550,373 )
Selling and marketing - related party     (1,762,652 )     (124,857 )
General and administrative     (6,943,803 )     (2,037,762 )
General and administrative - related parties     (201,865 )     (427,473 )
Total operating expenses     (13,150,551 )     (3,140,465 )
                 
INCOME FROM OPERATIONS     1,646,088       8,979,093  
                 
OTHER INCOME                
Gain from short-term investment     93,007       29,008  
Interest income     139,916       75,544  
Other income, net     169,096       4,227  
Total other income, net     402,019       108,779  
                 
INCOME BEFORE INCOME TAXES     2,048,107       9,087,872  
                 
PROVISION FOR INCOME TAX     -       -  
                 
NET INCOME   $ 2,048,107     $ 9,087,872  
                 
OTHER COMPREHENSIVE INCOME (LOSS)                
Foreign currency translation adjustment     1,144,657       (132,280 )
                 
COMPREHENSIVE INCOME   $ 3,192,764     $ 8,955,592  
                 
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES                
Basic and diluted*     15,615,729       14,167,041  
                 
EARNINGS PER SHARE                
Basic and diluted*   $ 0.13     $ 0.64  

 

* gives retroactive effect to the 2-for-1 forward share split and the concurrent surrender of 12.5% of our then outstanding ordinary shares, from our existing shareholders on November 8, 2019 and retroactive effect to the second surrender of 30.0% of our then outstanding ordinary shares, from our existing shareholders on May 28, 2020.

The accompanying notes are an integral part of these consolidated financial statements.

 

ORIENTAL CULTURE HOLDING LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

    For the Years Ended

December 31,

 
    2020     2019  
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income   $ 2,048,107     $ 9,087,872  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:                
Depreciation and amortization     308,274       241,719  
Gain from short-term investment     (93,007 )     (29,008 )
Loss from disposal of equipment     437       4,074  
Bad debt expenses     117,432       -  
Change in operating assets and liabilities:                
Decrease (increase) in accounts receivable     779,503       (358,411 )
Decrease in accounts receivable - related parties     -       12,684  
(Increase) decrease in other receivables and prepaid expenses     (778,684 )     438,780  
Decrease in other receivables - related parties     -       255,262  
Decrease in prepayment     -       15,367  
Increase in accounts payable     4,392,974       323,551  
Increase (decrease) in accounts payable - related parties     952,820       (47,551 )
Increase (decrease) in deferred revenue     51,738       (642,459 )
Increase in other payables and accrued liabilities     288,331       282,651  
Increase (decrease) in taxes payable     33,662       (25,064 )
Net cash provided by operating activities     8,101,587       9,559,467  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of short-term investment     (24,422,988 )     (4,157,281 )
Proceed from sale of short-term investment     25,285,807       2,417,485  
Proceed from sale of investment     -       60,883  
Purchase of property, plant and equipment     (9,388 )     (271,258 )
Purchase of intangible assets     (9,642 )     (119,725 )
Deposit on real estate purchase     (12,613,083 )     -  
Cash acquired from business acquisition     -       631,136  
Net cash (used in) investing activities     (11,769,294 )     (1,438,760 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from initial public offerings, net     18,090,668       -  
Payments of other payables - related party     (54,273 )     (162,291 )
Deferred offering costs     -       (691,288 )
Net cash provided by (used in) financing activities     18,036,395       (853,579 )
                 
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS     482,815       (99,315 )
                 
INCREASE IN CASH AND CASH EQUIVALENTS     14,851,503       7,167,813  
                 
CASH AND CASH EQUIVALENTS, beginning of year     9,184,671       2,016,858  
                 
CASH AND CASH EQUIVALENTS, end of year   $ 24,036,174     $ 9,184,671  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
Cash paid for income tax   $ -     $ -  
Cash paid for interest   $ -     $ -  
                 
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES                
Business acquisition through issuance of ordinary shares   $ -     $ 1,495,505  
Deferred offering costs offset with additional paid-in capital upon initial public offerings   $ 1,413,458     $ -  
Proceeds from initial public offering placed in escrow   $ 600,000     $ -  

The accompanying notes are an integral part of these consolidated financial statements.

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