ECargo : 2021 Preliminary Final Report

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ASX PRELIMINARY FINAL REPORT

eCargo Holdings Limited

ARBN 601 083 069

December 31, 2021

Lodged with ASX under Listing Rule 4.3A

This preliminary final report covers the consolidated entity, consisting of eCargo Holdings Limited and its controlled entities ("ECG" or the "Company"). The financial statements are presented in Hong Kong Dollars ("HK$"), the official currency of Hong Kong, unless otherwise stated.

The report is based on accounts which are in the process of being audited.

Contents
Results for announcement to the market …………………………………...…………….	2
Consolidated statement of comprehensive income ………………………..………….	Appendix	1
	- page 1
Consolidated statement of financial position…………….………………….…………….	Appendix	1
	- page 2
Consolidated statement of changes in equity ………….………………………………..	Appendix	1
	- page 4
Consolidated statement of cash flows …………………….………………………………….	Appendix	1
	- page 5
Notes to the consolidated financial statements…….……………………………………	Appendix	1
	- page 6

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Details of the reporting period and the previous corresponding period

Reporting period: January 1, 2021 to December 31, 2021

Prior corresponding period: January 1, 2020 to December 31, 2020

Results for announcement to the market

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Key information

(HK$)

Revenue from ordinary operations

Profit/(Loss) after income tax expense

Total comprehensive loss attributable to owners of the Company

Year ended	Year ended	% Change
December 31,	December 31,
2021	2020
156,598,239	218,453,159	-28%
896,702	(39,542,091)	-102%
(1,859,100)	(37,891,757)	-95%

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Dividends

No dividends have been paid nor are any dividends proposed to be paid.

Consolidated Statement of Comprehensive Income

Please refer to Appendix 1 - page 1

Consolidated Statement of Financial Position

Please refer to Appendix 1 - page 2

Consolidated Statement of Changes in Equity

Please refer to Appendix 1 - page 4
Consolidated Statement of Cash Flows
Please refer to Appendix 1 - page 5
Additional dividend information
The Company has not declared any dividends.
Dividend reinvestment plan
The Company has no dividend reinvestment plan.
Net tangible asset backing
Net tangible asset backing per ordinary share at:
December 31, 2021	(HK$14.6 cents)
December 31, 2020	(HK$15.3 cents)

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At December 31, 2021, there were 615,250,000 shares in issue, which would convert to a net asset backing of loss HK$11.4 cents per share (December 31, 2020: HK$11.1 cents per share).

Controlled entities acquired or disposed of

No controlled entities is being acquired or disposed of during the year.

Associates and joint venture entities

During the year, ECG had equity accounted for the interest in joint ventures.

Other significant information

Other than the details disclosed herein, there is no other information that needs to be disclosed to investors.

Foreign entities

The reports have been prepared under the Hong Kong Financial Reporting Standards.

Commentary on the operations and results

The results were primarily driven by new revenue streams resulting from early success of the Group's new technology-centric strategy, streamlining of key business centres, and continued implementation of operational efficiencies, resulting in cash-profitability across all key business lines.

The Group achieved a 21% increase in EBITDA to HK$9.2 million (FY20: HK$7.6 million).

The FY21 statutory net profit of HK$0.9 million (FY20: net loss of HK$39.5 million) represented an important step forward for the business and demonstrates the success of the Group's ongoing restructure.

The Group's first net profit in FY21 was underpinned by the trading and distribution (T&D) business, with the shift to new product categories and the launch of JJX leading to strong improvements, and subsequently the division's first EBITDA profit. This division accounted for 45% of total Group revenue (FY20: 53%) with an EBITDA profit HK$2.5 million, a significant improvement over FY20 (FY20 EBITDA loss: HK$0.1 million).

In the offline T&D business, relating to the trading of goods to offline retail operators across China, removal of product lines that had minimal profit contributions (i.e. Wine, Confectionary, and Private-Label products), and clearing overstock from previous years led to a fall in revenue and gross profit margin, but an improvement in EBITDA offset by new product mix (i.e. mother and baby products), reduce the loss to HK$5.1 million. Revenue also fell as the Group shifted facilitation of traditional B2B trading to the JJX B2B digital platform.

The online T&D business, pertaining to sales of contracted consumer products on eCommerce platforms including Alibaba's Tmall and JD.com, as well as the new JJX B2B trading platform, experienced a fall in revenue, primarily due to shifting product mix to higher margin products and removing high volume products that generated lower margins. Trades conducted via the JJX platform continue to grow month-over-month as the Group shifts facilitation of offline trading to the platform. The online T&D business delivered a

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positive EBITDA result of HK$7.6 million (FY20: profit of HK$6.0 million), growing 27%, growth expected to continue in 2022 and onwards.

The Group's joint venture business in Vietnam and Cambodia, ABG, achieved strong sales of Blackmore's baby formula in region, contributing positively to the Group's bottom line. This growth is foreseen to continue as the portfolio of exclusive products from China to Southeast Asia is expanded in 2022.

The eCommerce-services business recovered in the second half, and although full year revenue was lower than FY20, falling to HK$83.6 million (FY20: HK$100.8 million), EBITDA of the overall function increased by 1% to HK$14.9 million (FY20: HK$14.8 million).

Amblique's business in Australia generated HK$10.2 million in EBITDA, 16% less than 2020 (FY20: HK$12.2 million), mainly driven from the loss of revenue from the reseller agreement with Salesforce Commerce Cloud. However, the business outperformed forecasts as it saw both stronger demand in eCommerce project implementation and enhancements needed by Australian retailers, as well as from brands willing to invest more in their online business as online sales accelerated at a faster pace than offline retail.

Statement as to the audit status

The report is based on accounts which are in the process of being audited. The Company expects that the audit, when completed, will result in an unqualified audit opinion.

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Appendix1

eCARGO HOLDINGSLIMITED

CONSOLIDATEDFINANCIALSTATEMENTS

FORTHEYEARENDED

31 DECEMBER2021