Would crypto help this Japanese tour company to survive?
It does not take a scientist to figure out how many travel agencies were closed due to border closing in Hong Kong. But one listed company has found a new way to survive, although it still takes time to see how it works out.
Consider the case of WWPKG, one of the top names locals associate with Japanese group tours. Shareholders of the growth enterprise market listed firm might be shocked to find out that a significant amount of its revenue actually came from cryptocurrency mining.
That is according to its annual results ended 31 March 2022 released yesterday, disclosing that the company booked a revenue of HK$1.18 million from cryptocurrency mining, or over 40 per cent of its full-year turnover.
To be fair it is not a big investment but it has become significant for a company that has seen a collapse in group tour revenue under the pandemic.
WWPKG, which started the crypto business last July, reported a trading profit of HK$17,000 during the period but still sat on HK$2.4 million paper loss as of the end of March (and we can only wish it the best to avoid the 50 per cent Bitcoin crash in the last three months).
In an announcement, the firm told shareholders, “In view of the expected mild revival of outbound package tours, which is based on the latest developments of the pandemic and travel restrictions worldwide, especially for Japan, and the quarantine policy implemented by the Hong Kong SAR government, the Group will continue to operate the Cryptocurrency Mining as a means to broaden the Group’s source of income and future earning capability and potential.”
The gradual opening of travel within Asia could help WWPKG, but it may take some time to get back to the pre-pandemic level, given the group tour price to Japan surged at least three times to at least HK$40,000, including a one-week quarantine expense in Hong Kong.
That is also why the firm is not exactly excited about South Korea’s resumption of visa-free entry from next Friday after more than two years.
WWPKG executive director Yuen Chun-ning told local media that he would not expect great responses because no Korean tours from his agency have departed since the country opened up to foreign tourists on June 1, adding that the quarantine hotel rooms in Hong Kong cannot meet the demand for returning tourists as many overseas students will return to the city for the summer holiday.
WWPKG is not the only company that expands into crypto during downtime. Meitu, which runs the popular beauty app, accumulated US$100 million worth of Bitcoin last April.
Time can tell if it is “diworsification” , but it is common for Hong Kong and Chinese companies to speculate for survival.
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