RC365 Holding PLC

Business Overview

RC 365 Holding plc is the holding company of Regal Crown Technology Limited, a leading fintech service provider in China and Hong Kong. Founded in 2013 and Headquartered in Hong Kong, the company is looking to expand their payment gateway services into Europe and UK.

The major Business segmets are as follows: Payment gateway Solutions (online and offline), IT support and security services, CatchAR, Maid Maid Matching (E Agent).

“RC Wallet” and “RC prepaid card” are one stop solutions aimed at combining the latest measures and practices of Regulatory Technology and Payment Technology gateway solutions to both individual and corporate customers. These 2 solutions are aimed to strengthen the online and offline solutions provided to customers in the open market.

Some of the important milestones of the company are mentioned below:

2013-2015: Launched mPOS and Online Payment Gateway

2016: Invited by HKGOV to participate in a panel assessment on the Launch of iBeacon Prototype.

2017: Was certified in accordance with ISO27001 and became an exhibitor at G2E Asia Expo and ICE Expo

2018: Flipbook was launched in Wynn Palace Macau

2019: Enhanced its payment system and enabled customers to receive Amazon payments.

2020: Received its second ISO 27001 accreditations and began preparing for the proposed IPO and Standard Listing

2021: Catch AR was soft Launched and a new “Maid – Maid Matching” platform was launched.

2022: The group completed two major acquisitions in June 2022 by Acquiring the entire issued share capital of RCPAY Limited (Hong Kong) and Regal Crown Technology (Singapore) Pte Limited. The company in November 2022 went on to acquire RCPAY Limited (UK). These acquisitions offer an abundance of growth opportunities for the Group and offering local and cross border payment solutions to existing and potential clients located in those regions.

The exciting developments taking place in the coming months of calendar year 2023 puts RC365 ahead of the market and the company is well positioned to expand its products and services in other jurisdictions

During Q4 of FY23, the Group launched its “RC ERP” and “RC POS” products that have been co-developed between their in house IT team and outsourced experienced IT total solutions developers. The products are aimed at providing the existing and potential clients to manage their financial reporting, operation management, treasury management, inventory and invoicing management and cash flow in a simple and efficient manner.

In February 2023, the Company signed a Memorandum of Understanding with Hatcher Group Limited to leverage on the combined expertise and resources of the two companies to collaborate on the research and development of smart algorithm technology and to provide intuitive asset recommendations and other potential fintech-based solutions. The Company also announced that its wholly owned subsidiary Regal Crown Technology, has signed a White-Label Application Development Agreement with WCHING Technology Limited for the development of a mobile application product for use on Web, iOS and Android platforms. A key focus for the Group is developing innovative products and services to attract new customers and this allows the company to deliver on their commitments.

According to the management, the  vision of the company remains unchanged - to grow its share of its existing markets, develop new capabilities and expand into new geographies within the fast growing and attractive markets in which it operates. The Board believes that the advances made in FY-23 have positioned the firm well for FY24 and continued future growth.

The Company has announced several Agreements that have been signed lately. On 23 June 2023 the Company entered a collaboration agreement HKD15million to develop and upgrade the existing RC2.0 App, a mobile application providing wealth management solutions, to and advanced version under the name RC3.0. On 3 July 2023, the Group entered into an agreement as the sales agency for the MasterCard Credit Card and the legal and trustee services from famous Hong Kong financial service provider. RC365 has also required 100% of the issued share capital of Mr Meal Production Limited, a media and advertising service in Hong Kong. Outlook The Board continues to be optimistic about the outlook for FY24 given the Group’s growing pipeline of potential opportunities for further growth.

The Group is actively exploring several opportunities by forming different types of business relationships with corporates located in United Kingdom, Singapore and Hong Kong. The Group expects to introduce different marketing campaigns designed to promote the Company’s Catch AR and Maid Maid Matching offerings going forward, which the Board expects to provide opportunities for the continued growth for the Group’s target markets. The Group is exploring an opportunity to enter a co-operation agreement with a well-known Software and Application Development company in Hong Kong. The focus of such a co-operation agreement will be the development of an all-rounded Enterprise Resource Planning (ERP) software which can be sold to existing and potential clients. The ERP software is expected to encompass administrative, payroll, sale and purchase functions together with a payment function to enable subscriber to increase the effectiveness and efficiency of their operations. The Group expects to introduce the above services to Singapore and Malaysia market in Q1 of 2023.

Leadership

Chi Kit Law, Executive Chairman and CEO (appointed on 24 Mar 2021)

Mr. Law, age 42, has almost 20 years of payment solution and banking leadership experience, having previously held roles as Head of Banking Systems at Money Swap plc and Assistant Vice President of Group Technology and Operations at DBS Bank where he was awarded the Chairman's Reward for each year he was there. Mr. Law was also awarded the JP Morgan Services Star Award. Mr. Law has managed multi-national banking projects when he was at Standard Chartered Bank, HSBC, JP Morgan Chase and DBS Bank. Mr. Law holds a Masters in Advanced Management from the University of Liege and a Bachelor of Information Technology (Honours) from West Coast Institute of Management & Technology, Perth, Western Australia.

Timothy Wai Yiu Tang, Executive Director and CFO and Company Secretary (appointed on 30 August 2022)

Mr. Tang, aged 54, has held the role of Vice President, Finance of Regal Crown Hong Kong since October 2020 and was promoted on 30 August 2022. Mr. Tang has about 20 years of audit and accountancy experience, having previously been a Partner at William Lee, Paul Tang & Co. and a former senior Auditor at Ernst and Young. Mr. Tang holds a Bachelor of Commerce in Accounting from the University of New South Wales. Mr. Tang is an associate member of CPA Australia and a member of the Hong Kong Institute of Certified Public Accountants.

Robert Cairns, Non Executive Director (appointed on 9 March 2022)

Mr. Robert Cairns, age 52, has over 25 years' experience in accounting and finance control and served in senior positions at various private companies in the United Kingdom throughout his career. Robert is currently the Finance Director and a member of the Board of Directors & Executive Committee of Les Ambassadeurs Club. Robert graduated from Lancaster University with a Bachelor of Science Honours degree in Geography and is a member of the Chartered Association of Management Accountants in the United Kingdom.

Ajay Rajpal, Non Executive Director (appointed on 9 Mar 2022)

Mr. Ajay Rajpal, age 53 is a Chartered Accountant and member of the Institute of Chartered Accountants in England & Wales (ICAEW). During his career, he has gained broad-ranging commercial experience developed in the US, Europe, Middle East and Far East, with a particular focus on M&A, financial management and insolvency/restructuring. Post qualification, Mr. Rajpal held a number of finance-related roles which involved working for periods in the US, Europe, Middle East and Far East. Since 2011, Mr. Rajpal has run his own consultancy business, NAS Corporate Services Ltd, providing companies with various corporate services, such as assistance with their pre-IPO funding, the IPO process and post IPO management. Mr. Rajpal assisted Grand Vision Media Holdings Plc, a special purpose acquisition company listed on the standard segment of the London Stock Exchange, which successfully completed a reverse takeover of an outdoor media business in Hong Kong/China. Mr. Rajpal is currently non-executive director of Grand Vision (which continues to be listed on the standard segment).

Mr. Rajpal has also project managed the initial public offering process and assisted with the associated funding of two businesses on AIM, namely New Trend Lifestyle Group Plc, which provides Feng Shui products and services across Asia, and Zibao Metals Recycling Group Plc, a Hong Kong and China based metals recycling company. He currently acts as a non-executive director for Phimedix Plc (formerly named Zibao Metals Recycling Group Plc), and Dozens Savings Plc.

Kwai Wah Sunny Ng, Non Executive Director (appointed on 9 March 2022, resigned on 25 July 2023)

Mr. Kwai Wah Sunny Ng, age 44, has over 20 years' experience in corporate restructuring, mergers and acquisitions, project financing, lending, and investment management. He is the founder and managing director of Davidsons Group, a business and private equity consultancy service organization based in Hong Kong. He is an Executive Director of Times Universal Group Holdings Limited, a company listed in the Hong Kong stock exchange. Mr. Ng graduated with a Bachelor of Commerce degree in actual studies and accounting from the University of New South Wales. He is a member of both the Certified Practising Accountants in Australia and the Hong Kong Institute of Certified Public Accountants.

Ownership Structure

As of 31 March 2023, the group's total issued ordinary shares with voting rights stand at 125,534,591. The company reports significant ownership interests, specifically those exceeding 3% of its issued share capital. The following entities hold substantial interests in RC365 Holdings:

Entity Name	Number of Ordinary Shares	Percentage of Issued Share Capital
LYS Limited	64,000,000	50.98%
MacKay Preston Glen Kimpton	4,839,057	3.85%

It is also worth noting the ownership interests of the Board of Directors in RC365 Holdings.

Chi Kit Law, Executive Chairman and CEO, holds a significant stake through LYS Limited, reflecting a notable beneficial ownership of 75,000,000 ordinary shares representing 69.75% of issued share capital.

These prominent shareholders play an integral role in shaping the Group's strategic decisions and future directions. Their substantial ownership stakes underline their commitment to RC365 Holdings' growth and development. It is worth noting that the detailed ownership structure provides investors with essential insights into the distribution of ownership and control within the organization, fostering transparency and accountability.

Corporate Strategy

RC365 Holdings' corporate strategy for the year ended 31 March 2023 revolves around its core mission of providing innovative fintech solutions while adhering to high standards of corporate social responsibility and environmental stewardship. Leveraging the Board's experience, the Company is focused on delivering IT support, Security Services, and Payment Gateway solutions to customers in China and Hong Kong. Notably, the Company aims to extend its payment gateway services into the European and UK markets, aligning with its vision for global expansion.

In line with this strategic direction, the Company's key performance indicators (KPIs) center on revenue generation, cash reserves, and customer engagement. With revenues amounting to HK$16,883,359 and cash and cash equivalents of HK$9,548,364, the Company demonstrates its financial strength and self-sufficiency to support ongoing operations while pursuing growth opportunities. The number of customers, standing at 31, underscores the Company's commitment to building and maintaining strong client relationships.

RC365 Holdings' commitment to corporate social responsibility is evident in its approach to conducting business with integrity, openness, and respect for human rights. The Company's emphasis on providing a safe and healthy working environment fosters a positive atmosphere where employees are empowered to contribute to the Group's reputation and performance. Additionally, the Company's proactive approach to corporate environmental responsibility aligns with its history of compliance with relevant laws and regulations.

In accordance with Section 172(1) of the Companies Act 2006, the Directors prioritize decisions that promote the Company's long-term success for the benefit of its members. This encompasses considerations for stakeholders such as shareholders, employees, clients, suppliers, and the communities in which the Company operates. By engaging with these stakeholders, RC365 Holdings ensures that their interests are considered in strategic decision-making.

The Company's strategic partners, clients, and shareholders are pivotal in realizing its strategic goals. RC365 Holdings maintains a collaborative relationship with its major service provider in Hong Kong, enhancing its long-term success potential. The Company's commitment to providing outstanding services strengthens its reputation and client relationships, including expansion efforts into Singapore and the UK.

Industry Analysis

Hong Kong's fintech solutions service provider industry is a thriving, diverse, and resilient ecosystem that has established the city as a global fintech hub. With over 800 fintech companies and more than 3,900 start-ups, Hong Kong's fintech landscape is characterized by its dynamic growth, robust regulatory support, and innovative spirit. This section delves into the key aspects that contribute to the strength and potential of the fintech solutions service provider industry in Hong Kong.

Fertile Ground for Fintech Innovation

Hong Kong's small geographical size belies its status as a prominent international fintech hub. The city's fintech sector has shown remarkable resilience, even in the face of global economic challenges like the COVID-19 pandemic. Throughout the pandemic, Hong Kong's fintech companies continued to expand, secure capital, and hire talent, underscoring the industry's vitality.

The city's fintech ecosystem is home to a substantial number of start-ups covering a broad range of fintech sectors, including virtual banking, insurance technology, digital payments, blockchain, and more. Notably, Hong Kong houses over 10 unicorn companies, start-ups valued at over US$1 billion. These unicorns, such as ZA International, WeLab, and Airwallex, represent the city's prowess in fostering fintech innovation.

Strong Adoption and User Base

Hong Kong's residents and businesses have demonstrated a robust appetite for fintech services. A survey revealed that a significant portion of Hong Kong's population actively uses fintech services, with 74% of respondents utilizing at least two fintech services, and over 90% adopting digital payment methods. Virtual wealth management, virtual banking, and virtual insurance have also gained traction, with adoption rates of 57%, 55%, and 41%, respectively.

The city's strategic location as a gateway to mainland China further bolsters its fintech adoption. Many international companies view Hong Kong as the preferred entry point into the Greater Bay Area (GBA), a thriving economic region comprising Hong Kong, Macau, and several Guangdong cities.

Regulatory Support and Technological Development

Hong Kong's government has actively fostered an environment conducive to fintech innovation. The "FinTech 2025" strategy, announced by the Hong Kong Monetary Authority (HKMA) in June 2021, outlines key focus areas for the industry's development. These include promoting digital transformation across banks, future-proofing the city for central bank digital currencies and expanding the fintech-savvy workforce.

One of the significant milestones achieved is the establishment of the Commercial Data Interchange (CDI) platform in October 2022, enabling financial institutions to enhance efficiency and streamline various processes, such as credit assessment and loan approval, using innovative applications.

The city's regulatory agencies, such as the Securities and Futures Commission (SFC) and the Insurance Authority (IA), have also set out guidelines for virtual assets and fintech-related activities, enhancing the legitimacy and credibility of the sector.

Access to Funding and Investment

Hong Kong's fintech ecosystem benefits from a robust funding landscape that supports start-ups, scale-ups, and established companies. The government offers grants, funding, and subsidy schemes to support fintech initiatives. Private equity and venture funding are readily available, contributing to the city's position as a fund pool leader in Asia Pacific.

The Hong Kong Stock Exchange (HKEX) has maintained its status as a prominent IPO market, making it an attractive destination for fintech companies seeking capital. Additionally, innovative financial products like exchange-traded products (ETPs) further diversify the investment landscape and offer opportunities for emerging fintech sectors, such as metaverse-themed ETFs and crypto asset ETFs.

Collaborative Ecosystem and Innovation Labs

Hong Kong's fintech ecosystem is strengthened by the presence of numerous innovation labs, accelerators, and collaborative initiatives. These include globally recognized names like Standard Chartered's eXellerator, HSBC's ASTRI Research and Development Innovation Lab, and IBM Innovation Center, among others. These labs serve as platforms for collaboration between financial institutions, technology companies, and start-ups, fostering innovation and accelerating the development of cutting-edge fintech solutions.

Hong Kong's fintech solutions service provider industry has firmly established itself as a global leader, marked by its diverse landscape, strong adoption rates, regulatory support, and access to funding. With a multitude of start-ups, unicorn companies, and a robust ecosystem, the city is poised to continue its growth trajectory as a fintech powerhouse in the Asia Pacific region and beyond. The combination of a supportive regulatory environment, innovative initiatives, and a commitment to fostering talent ensures that Hong Kong will remain a focal point for fintech innovation and investment in the coming years.

Risks

The Group's risk exposure is evaluated below, encompassing key challenges that could impact RC365 Holdings' business:

1. Inability to Manage Growth: As the group pursues expansion, increased demands on management, operations, and resources are expected. Successful growth hinges on enhancing infrastructure, control systems, and operational efficiency. Failure to adapt could hinder the group's performance, impacting its operational results. Moreover, integration risks associated with acquisitions might lead to unanticipated returns.

2. Shifts in Payments Landscape: A decline in credit and debit card usage or adverse developments in the digital payments sector could adversely affect the group's financial standing. Evolving payment habits, regulatory changes, and the introduction of fees by financial institutions could potentially deter card usage, impacting the Group's financial condition.

3. Fraud Vulnerability: Transactions occurring remotely introduce vulnerabilities to fraud and misrepresentation. Online businesses, including the group, are at risk due to the anonymity and immediacy of fund transfers. Despite measures to detect and mitigate risks, the evolving nature of fraud poses challenges. New methods could evade existing checks and affect the group's operations, financials, and reputation.

4. COVID-19 Impact: The group prioritizes the safety of its stakeholders amid the pandemic. Continual assessment of developments is performed to ensure a safe resumption of operations. Escalation of COVID-19 and the enforcement of additional government-mandated restrictions could disrupt operations, delaying production, and negatively affecting financial outcomes.

To address these risks, the group employs comprehensive risk management strategies:

Managing Growth: The group aligns growth strategies with operational capabilities. Investments in management, infrastructure, and information systems are made in proportion to growth. Thorough due diligence and integration planning are executed for acquisitions to ensure seamless integration.

Adapting to Payments Trends: To mitigate risks related to shifts in payments behaviour, the group monitors market trends closely. The ability to swiftly adapt products and services to evolving payment preferences and regulatory changes is a strategic priority.

Combatting Fraud: While the group implements robust measures to detect and prevent fraud, it remains vigilant against emerging fraud methods. Continued enhancement of fraud detection systems and constant vigilance are crucial to stay ahead of evolving fraudulent activities.

Navigating COVID-19: The group maintains a commitment to stakeholder well-being, regularly assessing the pandemic's developments. Contingency plans are in place to ensure safe and appropriate operations. Adaptive strategies are employed to tackle potential disruptions and ensure minimal impact on operations and financial results.

The Board of Directors plays a pivotal role in risk oversight. Their expertise and diverse backgrounds contribute to the strategic alignment of risk management with business objectives. Regulatory compliance, continuous monitoring, and proactive adjustments to risk strategies are integral to the Board's approach.

RC365 Holdings' proactive risk management framework underscores its commitment to safeguarding stakeholders and ensuring sustained business growth. As the business landscape evolves, the group remains dedicated to identifying, mitigating, and effectively responding to potential challenges while capitalizing on growth opportunities.

ESG Factors

RC365 Holdings demonstrates its commitment to sustainability and societal impact through a comprehensive approach to environmental, social, and governance practices. The Group's initiatives and progress in these areas during the latest reporting year are highlighted below:

Climate Change: Recognizing the urgency of addressing climate change and its link to Greenhouse Gas emissions from fossil fuels, RC365 Holdings is taking decisive steps. The Group is in the process of establishing targets for 2023/24 to drive emission reductions. Notably, progress was made in reducing emissions from office spaces in 2023, considering the context of the COVID-19 pandemic that led to remote work. Although Scope 1 and 2 emissions remained consistent with 2022 levels, energy efficiency remained on par with the previous year.

Environmental Stewardship: RC365 Holdings maintains adherence to environmental regulations in all regions of operation. The Group has not incurred fines or penalties nor faced investigations for breaching environmental regulations during the reporting period. While the Group's operations are not deemed to have significant environmental impact, RC365 Holdings actively seeks to minimize its carbon footprint and integrate environmentally friendly practices where feasible. The Group continually assesses its environmental impact and undertakes initiatives such as waste reduction, resource conservation, and upgrading to LED lighting.

Office Environment: The Group places a priority on providing a secure and safe office environment for its employees. Close collaboration with office and facilities management partners ensures employee well-being.

Supply Chain Responsibility: RC365 Holdings is dedicated to upholding ethical standards and eradicating slavery and human trafficking from its supply chain and business operations. The Group maintains strong partnerships with suppliers and partners, focusing on efficiency and shared values. Continuous evaluation of the supplier network ensures alignment with ethical standards and equitable relationships.

Governance Focus: The Board of Directors at RC365 Holdings is committed to robust governance practices, emphasizing transparency and efficient administration. The board's diverse expertise spans technical, commercial, financial, and auditing domains. Upholding values of integrity, fairness, and non-discrimination, the Board promotes a culture of ethical behaviour throughout the organization.

Regulatory Compliance: RC365 Holdings adheres to the Companies Act 2006 and the Companies (Directors’ Report) and Limited Liability Partnership (Energy and Carbon Report) Regulations 2018, known as SECR (Streamlined Energy Carbon Reporting). The Group's energy consumption and GHG emissions calculations align with UK Government guidelines. No breaches of environmental legislation resulted in prosecutions or compliance notices during the year.

Incorporating these initiatives, RC365 Holdings underscores its commitment to ESG principles, demonstrating a holistic approach to sustainability, societal impact, and responsible governance. These efforts not only reflect the Group's dedication to its stakeholders but also contribute to a more resilient and responsible business model.