We are a holding company incorporated in the British Virgin Islands. We are a
provider of securities brokerage and financial technology services primarily
through our Hong Kong subsidiaries, Waton Securities International Limited, or
WSI, and Waton Technology International Limited, or WTI.
WSI is principally engaged in the provision of (i) securities brokerage services
for securities listed on the Hong Kong Stock Exchange, including shares under
the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the
New York Stock Exchange (NYSE) and the Nasdaq Stock Market, margin financing
services and other ancillary services through WSI’s electronic trading platform
to its corporate and individual brokerage customers and bond distribution
services; and (ii) software licensing and related support services including the
licensing of trading platform APP, upgrades and enhancements, maintenance and
other related services to financial institutions. Since September 2023, WTI has
provided software licensing and related support services in order to focus on
the expertise of operations and service areas. WSI has developed and provided
Broker Cloud solutions to securities brokers with the combination of software
licensing and related support services, securities brokerage services, margin
financing services and other related services, where securities broker customers
are provided with a perpetual on-premise licensed trading platform APP and
optional related support services, with the front-, middle- and back-office
operation functions and securities trading function where securities trading
orders can be cleared and settled through WSI.
Founded in 1989, WSI is an established integrated securities broker in the Hong
Kong financial services industry. WSI is licensed to conduct Type 1 (dealing in
securities), Type 4 (advising on securities), Type 5 (advising on futures
contracts) and Type 9 (asset management) regulated activities under HKSFO in
Hong Kong. WSI is a Hong Kong Stock Exchange participant and holds one Hong Kong
Stock Exchange trading right. WSI provides securities brokerage services through
WSI’s integrated electronic trading platform, which is easy to access, use, and
deposit to WSI’s customers. The trading platform can be accessed through WSI’s
APP, which provides WSI’s customers with a seamless and secured trading
experience. WSI offers its customers comprehensive brokerage and value-added
services, including trade order placement and execution, account management, and
customer support. WSI further provides its customers with market data, news and
research, so as to help them make well-informed investment decisions. WSI has
accumulated a corporate and individual customer base across the globe, including
a securities brokerage company in New Zealand known as Wealth Guardian
Investment Limited (“WGI”), which is a related party of the Company. We derived
a substantial portion of revenues from WGI, which accounted for approximately
39.5% and 81.5% of our total revenues in the fiscal years ended March 31, 2024
and 2023, respectively, and approximately 68.0% and 98.2% of our total revenues
for the six months ended September 30, 2024 and 2023, respectively. By
capitalizing on its customer base, WSI commenced to provide bond distribution
services by acting as a manager, a placement agent or a non-syndicate capital
market intermediary, to procure subscribers to subscribe and pay for bonds in
principal amounts during the fiscal year ended March 31, 2024 and for the six
months ended September 30, 2024. As of September 30, 2024, WSI had more than
5,800 securities brokerage customers who opened trading accounts with WSI, 59 of
which are corporate customers who opened corporate accounts and three of which
are introducing broker customers who opened omnibus accounts. The remaining
portion of the securities brokerage customers are individual customers who
opened individual accounts and typically trade through WSI’s trading platform
APP. As of the same date, WSI had over 600 active customers, who were registered
customers with assets in their trading accounts. We generate brokerage and
commission income from WSI’s securities brokerage, bond distribution and other
ancillary services and interest income from WSI’s margin financing services, and
our brokerage and commission income and interest income which amounted to
approximately US$9.4 million and US$2.3 million, and accounted for approximately
93.4% and 39.9% of our total revenues, for the fiscal years ended March 31, 2024
and 2023, respectively, and amounted to approximately US$1.8 million and US$1.9
million, and accounted for approximately 61.3% and 83.7% of our total revenues,
for the six months ended September 30, 2024 and 2023, respectively.
Leveraging on WSI’s accumulated industry knowledge on the needs of small and
medium-sized securities brokers and operational experience in online brokerage
over the years, WSI started to develop the provision of fintech solutions in
trading platform APP software licensing and related support services targeting
the securities brokers and securities-related financial institutions in April
2021. We are a pioneer of business-to-business fintech services in the
Asia-Pacific region to offer one-stop brokerage software solutions to small and
medium-sized brokers, according to Frost & Sullivan Limited, or Frost &
Sullivan. WSI provides one-stop, integrated and customized software solutions to
develop trading platform APP that covers the front-, middle- and back-office
operations of securities brokerage business such as electronic trade order
placing, customer relationship management and operational data management, in
addition to the business-to-business securities order clearing and settlement
services provided by WSI in the Broker Cloud solutions, which enables the
securities broker customers to digitalize and streamline their business
operations, and interact with the financial market more efficiently. As of
September 30, 2024, March 31, 2024 and 2023, WSI and WTI provided software
licensing and related support services to a total of five, three and five
securities brokers and securities-related financial institutions, respectively,
including WGI, which is a related party of the Company. We generate software
licensing and related support service income from WSI’s and WTI’s software
licensing and related support services, which amounted to approximately US$1.4
million and US$3.5 million, and accounted for approximately 13.7% and 60.1% of
our total revenues for the fiscal years ended March 31, 2024 and 2023,
respectively, and amounted to approximately US$1.1 million and US$0.7 million,
and accounted for approximately 38.7% and 29.0% of our total revenues, for the
six months ended September 30, 2024 and 2023, respectively. WSI and WTI have
outsourced the software licensing and related support services to Shenzhen
Jinhui Technology Co., Ltd., a related party of the Company.
We have achieved significant growth in our total revenues. Our total revenues
grew by approximately 75.2% from approximately US$5.7 million for the fiscal
year ended March 31, 2023 to approximately US$10.1 million for the fiscal year
ended March 31, 2024. Our total revenues grew by approximately 27.2% to
approximately US$3.0 million for the six months ended September 30, 2024 from
approximately US$2.3 million for the same period in 2023. Approximately 39.5%
and 81.5% of the total revenues for the fiscal years ended March 31, 2024 and
2023, respectively, and approximately 68.0% and 98.2% of our total revenues for
the six months ended September 30, 2024 and 2023, respectively, were derived
from WGI, a related party of the Company. Our net income was approximately
US$2.5 million for the fiscal year ended March 31, 2024, compared to
approximately US$3.1 million for the fiscal year ended March 31, 2023. Our net
loss was approximately US$1.1 million for the six months ended September 30,
2024, compared to approximately US$0.4 million for the same period in 2023. Our
adjusted net income, which excludes share-based compensation expenses and its
related income tax effects, was approximately US$2.5 million for the fiscal year
ended March 31, 2024, compared to approximately US$3.4 million for the fiscal
year ended March 31, 2023.
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Our principal executive offices are located at Suites 3605-06, 36th Floor, Tower
6, The Gateway, Harbour City, Tsim Sha Tsui, Kowloon, Hong Kong. Telephone
number: +852 2853 1818. Our website can be found at https://www.waton.com/.
Our registered office is currently located at Rodus Building, P.O. Box 3093,
Road Town, Tortola, British Virgin Islands which may be changed from time to
time at the discretion of directors.
Our agent for service of process in the United States is Cogency Global Inc.
located at 122 East 42nd Street, 18th Floor, New York, NY 10168.