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Company delivers ahead of schedule against targets for capitalizing on China's rapidly growing insurance market
MONTVALE, N.J., Nov. 23, 2020 /PRNewswire/—MICT, Inc. (Nasdaq: MICT) (the Company), today announced that its wholly-owned subsidiary GFH Intermediate Holdings Ltd. (GFHI), through an indirect wholly-owned operating company, signed a number of significant new insurance agency contracts which the Company anticipates to generate significant recurring monthly revenues, potentially up to several millions of dollars per month, beginning early in the first quarter of 2021.
Scheduled to launch in December 2020, GFHI's insurance division is led by a highly-decorated management team recruited from a number of China's largest insurance companies. The signing of these significant new contracts within only a few weeks of the division's launch demonstrates its management team's ability and their commitment towards meeting the division's year 1 targets, of more than $250 million of revenue and more than $10 million of gross margins. Such a steep growth trajectory also reflects well in terms of meeting the significantly higher revenue and gross margin targets for years 2 and 3.
"The early success in signing these valuable new contracts is a testament to the combination of our leading-edge technology platform, our innovative business model and the exceptional management team we have been able to attract," stated MICT's CEO, Darren Mercer. "We have achieved a number of key milestones since the acquisition of GFHI in September and are already ahead of schedule, including in relation to our operating Key Performance Indicators and financial metrics, and we are confident we will continue to rapidly grow our insurance business, aided by our partnerships with the leading insurance groups in China."
"We have also markedly increased cash reserves and strengthened our balance sheet, which is enabling us to significantly accelerate growth and take advantage of numerous expansion opportunities across all our business verticals," Mercer concluded.
Third Quarter and Recent Highlights Include:
Acquired 100% of GFHI giving MICT ownership of the platforms, technology and businesses that GFHI has built in the global fintech space, with the initial focus on China's burgeoning fintech market
Cash balance of $18.6 million as at 30th September 2020
Closed on an additional $25 million through a registered direct offering on November 4, 2020
Recruited top class operational and management teams for both its insurance and stock trading divisions
Acquired initial 9% stake in the Hong Kong securities and investments firm, with balance of 91% to be acquired upon receipt of regulatory approval for a total purchase price of $3 million. The brokerage firm currently has approximately $2.1 million in cash and equivalents on its balance sheet and is licensed to transact in substantial markets including Hong Kong, the U.S. and China, including China A-Shares
China's nascent market for insurance products is already the second largest in the world and is forecast to reach $2.36 trillion by 2032, eclipsing the U.S. market by almost $1 trillion. Online stock trading volumes in China reached nearly $2 trillion in 2019 and are expected to continue to climb significantly in the foreseeable future.
The data included herein with respect to the Chinese insurance market was made public by the Swiss Re Institute and Mordor Intelligence.
MICT, Inc. (NasdaqCM: MICT) operates through its subsidiaries, GFH Intermediate Holdings Ltd. (GFHI) and Micronet Ltd. (Micronet). GFHI's versatile proprietary trading technology platform is designed to serve a large number of high growth sectors in the global fintech space. Primary areas of focus include online brokerage for equities trading and wealth management services and sales of insurance products in several high-growth foreign markets including Asia where GFHI, through several operating companies, own a substantial propriety database of users. Micronet operates in the growing telematics and commercial Mobile Resource Management market, mainly in the United States and Europe. Micronet designs, develops, manufactures and sells mobile computing solutions that provide fleet operators and field workforces with computing solutions in challenging work environments.
This press release contains express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. Federal securities laws. These forward-looking statements include, but are not limited to, statements related to revenue targets, the growth of the Chinese Insurance market and other statements that are not historical facts. Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in the Company's annual report on Form 10-K for the year ended December 31, 2019, Form 10-Q for the quarter ended September 30, 2020 and in subsequent filings with the Securities and Exchange Commission. Except as otherwise required by law, the Company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.