Weyland Tech Continues Growth & Discloses More Than $6 Million in Revenue and Updates Shareholders on Its Business Strategy
HONG KONG–(Marketwired – Aug 24, 2017) – Weyland Tech, Inc. (OTCQB: WEYL) (“Weyland” or “Company”), a provider of mobile business applications, today provided a shareholder update on the heels of filing its second quarter financial results. The results may be found in the Company’s Form 10-Q filed with the Securities and Exchange Commission. A more comprehensive description of the Company’s business strategy is also discussed below.
Results of Operation
Service Revenue was $6,476,022 and $6,394,984 for the six months ended June 30, 2017 and 2016, respectively. The increase is due to the service income from our customers.
Although only slightly higher than the previous reporting period, there was a pricing reduction by our partners that was designed to incentivize resellers to increase the number of subscribers renewing their subscriptions based on lower pricing. The company expects revenue to per subscriber to grow as additional transaction services currently in development are deployed.
Cost of Service
Cost of Service was $5,095,509 and $3,673,639 for the six months ended June 30, 2017 and 2016, respectively. Included are development costs of $ 390,772 (2016: $1,750,000). The increase during the period reflects our revised normal gross margins for our core subscription business.
Although booked as Cost of Service, our audit committee and our auditor, took a highly conservative approach and will reclassify as R&D in the coming quarters.
General and Administrative expenses were $478,893 and $493,188 and for the six months ended June 30, 2017 and 2016, respectively.
Net Profit (Loss)
The Company had a net profit of $745,536 and $2,259,327 for the six months ended June 30, 2017 and 2016, respectively. Gross margins decreased from 43% to 21% for six months ended June 30, 2017, decreased from 28% to -11% for three months ended June 30, 2017.
Included in Net profit was amortization of $175,967 for the six months ended June 30, 2017. (2016: $125,000).
Updates on recent partnerships
DPEX Worldwide – In December 2016, the Company and DPEX announced a strategic relationship Weyland and DPEX have been working on launching the DPEX m-commerce platform and are targeting early to mid-September 2017 for official launch. Further details will be forthcoming.
Faith United O2O – On May 1, 2017, the Company signed a software development agreement with Faith United Technology LTD, a Hong Kong based software developer. Weyland Tech and Faith United are collaborating on Online-to-Offline (“O2O”) applications initially targeting the food service industry. Weyland Tech believes O2O solutions allow merchants to reach online buyers that are not directly served by Third Party Logistics providers (“3PL”) but can reach more centralized physical locations for pick-up.
During Q3-2017 an initial closed beta is being designed with potential for initial revenues on the O2O platform possible in Q4. This closed beta will be used to refine the O2O platform for subsequent license to Restaurants, Central Kitchens and Food companies.
The Company’s team, after building a business platform over the past two years, has learned much about the impact of mobile business apps and the impact it can have on a small-medium-sized business (“SMB”).
There are currently four key areas of focus that the Company is expanding upon:
1) Increase Access to and Reduce M-commerce Transaction friction in SE Asia
Weyland is focused on marketplace tools and services that support the establishment of a leading marketplace for SE Asia. The objective to deliver tools and marketplace services needed to create South East Asia Alibaba’s, EBay’s or Etsy’s.
In SE Asia payment, delivery/logistics and marketing for e-commerce differ from the US, European and North Asian approaches and are just emerging.
Importantly m-commerce is e-commerce as the mobile phone is the first platform upon which consumers can transact e-commerce. Additionally, small businesses (SMBs) constitute the vast majority of businesses and a smaller but significant amount of commerce.
As a result, WEYL first focus is on providing m-commerce applications and tools for SMBs to create their own. There is huge incentive for SMBs as entire “Taobao villages” have been created in China as the result of creating that market place. WEYL seeks to drive this opportunity in SE Asia.
Three of the most populous countries in the world and the three most populous in the ASEAN region are Indonesia, the Philippines and Thailand. Weyland Tech has strategic partnerships in all three as well as the other ASEAN nations.
2) Strategic Partnerships Build Strong Barriers to Entry
A strategic partnership with DPEX, one of the ASEAN regions incumbent logistics players with infrastructure throughout ever country in the region, enables Weyland Tech to provide delivery for e/m-commerce customers
Weyland Tech has partnered with and is finalizing partnerships with major payment gateways in the region AND also the incumbent telecoms which provide payment solutions to the disparate locales in countries like Indonesia.
3) Acquisition, Development and Scaling
In order to expand services that reduces m-commerce friction we expect the company will both build and buy Intellectual Property depending on time-to-market, available expertise and cost of either approach.
The Company has met with and is in the process of evaluating several synergistic merger opportunities and believes that any proposed merger or acquisition will be accretive in nature.
4) Partnerships With Other High Growth Mobile App industry Players
The Company has been approached by several mobile app based companies including e-sports, online gaming and loyalty card providers. As opportunities present themselves, the Company will selectively pursue those providing they fit into our existing core competencies and business model.
The Company’s management and partners believe that the current and historical business will evolve into a more scalable and higher margin business as the above initiatives are layered in.
All indications of the current partnerships and ones in negotiation are believed to create a revenue opportunity that will in turn equate to an increase in market valuation and shareholder equity.
The Company has been pursuing a NASDAQ uplisting, and is currently upgrading to the OTCQX market, the highest tier of the OTC Markets. The OTCQX is home to some of the World’s largest companies including Roche Holdings, Adidas, Nestle, BNP, Allianz Financial, AXA Insurance and many others that chose to dual list on the OTCQX instead of the NASDAQ or NYSE.
The Company will aggressively evaluate all options presented that enable an increase in shareholder value.
Safe Harbor Statement
This release contains certain “forward-looking statements” relating to the business of the Company. All statements, other than statements of historical fact included herein are “forward-looking statements.” The statements regarding the continued growth of the mobile app segment and the ability of the Company to continue its expansion into that segment and the ability of the Company to attract customers and partners and generate revenues. Often these forward-looking statements are identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions and involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks, and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). Expressly, all forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume any duty to update these forward-looking statements.