Hongkongers spending their cash online while staying home to avoid the coronavirus have fuelled a record HK$1.2 billion in forecast orders for outspoken businessman Ricky Wong Wai-kay’s internet shopping platform, even as his flagship Hong Kong Television Network posted bigger annual losses.
The network, which operates HKTV Mall, is set to increase its shopping revenue as Wong announced on Thursday it would start selling surgical masks in a couple of weeks after setting up its own production line.
The firm is estimated to have received more than HK$1.2 billion (US$155 million) worth of orders in the first quarter of this year – almost double the HK$634 million from the same period in 2019.
CEO Wong also predicted the company’s online shopping business performance between April and June would improve on the same period last year, after witnessing a surge in orders from customers going out less in recent months because of the Covid-19 threat.
“People naturally stayed at home and shop with their mobile phones. I believe this situation will sustain for the next two to three months,” he told a press briefing.
The firm predicted it could adjust its 2020 target for transaction value, which was initially set at HK$3.4 billion, but he did not reveal a new figure.
“A positive factor is many Hong Kong residents have enjoyed the advantage of online shopping,” he said.
“But there are also negative factors, such as local and global political environment and global economy. They have uncertainties in the coming year.”
The firm’s orders hit a record HK$338 million in January and rose again to HK$482.4 million the following month. Between March 1 and March 20, the sum stood at HK$324.6 million.
As Hong Kong hunkers down for a second wave of infections expected from imported cases, parts of the city have been brought to a standstill, with all but three border checkpoints with mainland China shut, tourism numbers falling off a cliff, schools closed and unemployment rising.
Although Hong Kong Television Network appeared relatively unscathed from the hammering the pandemic had given businesses across most sectors, it still posted a net loss of HK$289.9 million last year, up from HK$133 million in 2018.
Wong explained the firm had a smaller net loss figure in 2018 because the firm had sold properties to Hong Kong Broadband Network that year, bringing in about HK$160 million.
He argued operational performance had improved in terms of the loss before interest, taxes, depreciation and amortisation (Ebitda), from HK$271.4 million in 2018 to HK$216 million last year.
Its sales value on order intake also surged 46.9 per cent to HK$2.78 billion from a year earlier.
On when the firm could break even, Wong said its Ebitda figure could achieve that if it hit 25,000 orders each day.
Aside from its online shopping platform, the firm has invested more than HK$2.5 million into surgical mask production, including a machine and a specialist room for making the products, to ease the shortages in the city.
Wong aims to make between 60,000 and 100,000 masks per day – and plans to sell them for about HK$2 each – that matched the standards of American Society for Testing and Materials Level 2.
The raw materials in stock could already make 10 million masks, Wong said, adding the firm so far had no plans to apply for subsidies from a HK$1.5 billion government fund supporting the local production of surgical masks.
Purchase the China AI Report 2020 brought to you by SCMP Research and enjoy a 20% discount (original price US$400). This 60-page all new intelligence report gives you first-hand insights and analysis into the latest industry developments and intelligence about China AI. Get exclusive access to our webinars for continuous learning, and interact with China AI executives in live Q&A. Offer valid until 31 March 2020.
More from South China Morning Post: