Following our strategic review, a key element of our business strategy is to re-purpose the Group&rsquo s physical assets, in particular our malls, by identifying new uses, including but not limited to Esports

hub, immersive sports experiences, co-sharing office spaces, talent innovation centre, edutainmentrelated activities, cinema operations, crypto mining and renewable energy activities.

 

To potentially enhance the value of our physical assets as well as create digital assets at the same time, with sustainability efforts in mind, the Group has obtained shareholders&rsquo approval to diversify our

business to include renewable energy, physical-digital malls, cryptocurrency mining (&ldquo crypto mining&rdquo ) and the Metaverse via an extraordinary general meeting on 30 December 2021.

 

Since then, the Group has continued to advance on our strategic pivot, exploring various collaborations and partnerships with government agencies and prominent partners in the Metaverse, Esports, mobile

gaming and digital-related experiences.

 

Property Development

 

With rising consumer demand as COVID becomes endemic, the Group is working with partners to gradually reopen our malls. MBO cinema in ElementX, the largest cinema in Melaka, has reopened in

early 2022.

 

Since the announcement of ElementX in April 2022, the Group has seen a surge of rental enquiries from interested and potential tenants. For ElementX, the Group has taken a phased approach for the

reopening with the initial launch of approximately 50% of the mall in its first phase (&ldquo First Phase&rdquo ) scheduled in the 4th quarter of 2022. The Group has secured approximately 65% occupancy rate for

the First Phase of ElementX. The remaining 35% is being negotiated at various stages with interested tenants. The Group&rsquo s properties are located within the prime and strategic locations in Melaka and this

has helped preserve the value of the Group&rsquo s property assets.

 

For the Group&rsquo s property-related business activities, we are cautiously optimistic of the sustained recovery of our business activities in the endemic phase. Our retail malls are expected to benefit with

the progressive re-opening of the economy and social activities in Melaka as well as the resurgence of tourism activities from Malaysia&rsquo s full reopening of international borders from 1 April 2022 for fullyvaccinated travellers.

 

The Group has completed the co-sharing offices in both Singapore and Melaka, in ElementX, under the Group&rsquo s Prime 53 brand. The Group is in discussion with potential tenants to take up space in

Prime 53, upon the initial launch of ElementX.

 

The Group has also entered into tenancy agreement with Stamford College to commence activities in 2022. Beyond4 is still keen to set up its latest centre in Hatten City, following its existing WCOE centre in Penang and Hong Leong&rsquo s HLX centre in Kuala Lumpur city centre. Beyond4, together with other edutainment tenants in the Group&rsquo s Future of Learning ecosystem, expects to complete its set-up after

the launching of ElementX mall scheduled in the 4th quarter of 2022.

 

Re-purposing our Malls for Phygital Experience

 

Since the announcement on 13 April 2022 in relation to the rebranding of Element Mall to ElementX, positioned as Southeast Asia&rsquo s first large-scale integrated Esports experiential hub, Metaverse gateway and themed award-winning hotel accommodation, the Group has signed various collaborations and agreements with strategic partners such as leading Esports organisations, Kitamen Holdings Sdn. Bhd. (&ldquo KITAMEN&rdquo ) and MELAKA ESPORTS ASSOCIATION (&ldquo MEA&rdquo ) as well as Focus Media Sports (Shanghai) Co., Ltd (&ldquo Focus Media&rdquo ), a subsidiary of China&rsquo s largest commercial media group, to boost the branding and revenue streams of ElementX. Notably, the Group and Focus Media are finalising the content and design with Focus Media undertaking the production of the Focus Media Immersive Experience Centre, the first-of-its-kind outside of China, at ElementX.

 

On 18 August 2022, the Group announced a partnership agreement with MOONTON Games. Under the partnership agreement, MOONTON Games and Hatten Land will endeavor to jointly develop and

transform ElementX mall and hotel in Melaka into the world&rsquo s first Mobile Legends- themed Integrated Esports Hub that aims to attract 20 million visitors from around the region.

 

For our Metaverse venture, the Group and our blockchain advisors, which includes EnjinStarter, have been working in close collaboration on the conceptualisation and set-up of our Metaverse and phygital

system, including token system, which aims to have high levels of interoperability with different strategic partners as the project progresses, from physical to the digital space. The timeline in the development of the token system with EnjinStarter has been extended as there are different partners involved in our Metaverse ventures and such systems need to be adapted with new partners. The Group is also working closely with our technological partners for the Metaverse development, including Huawei and HydraX, The Group&rsquo s in-house development team is working with Huawei&rsquo s engineers and technical team on the infrastructure and architecture, the backbone of our Metaverse. The Group has incorporated H2X Pte. Ltd. (&ldquo H2X&rdquo ) jointly with HydraX, a MAS Capital Markets Services licensee and is working closely with HydraX to commence work to grow its business in the digital asset space.

 

Renewable Energy

 

Since the announcement of the Group&rsquo s ambitions and strategies in investing in renewable energy, the Group has built up a dedicated team led by in-house experts to explore market opportunities and partnership networks within the industry in both Singapore and Malaysia. The Group will continue to provide timely updates via SGXnet once relevant agreements have been signed.

 

On the Dataran Pahlawan Melaka Megamall project, which the Group will install more than 6,000 solar panels on the roof of Melaka&rsquo s largest mall, the Group has started preliminary works that include the completion of site inspections and feasibility studies. The next stage is to commence the installation of the solar panels in the 4th quarter of 2022. It is a prolonged process as the Group and our partners has to evaluate various implementation plans before it can be executed.

 

In January 2022, despite multiple challenges from Covid and border control measures which resulted in supply chain and logistics disruptions, the Group has started our trial operation of crypto mining, with various partners as announced by the Group. With just 3 months of full-fledged operations since April 2022, the crypto mining business has positively contributed approximately RM1.7 million revenue and RM545,000 net profit (32% net profit margin) to the Group. The Group has shifted its strategic focus towards quality and profitable crypto mining equipment. Hence, the Group is currently managing

more than 500 top-tiered crypto mining equipments (under the Group&rsquo s previous rig-quantity-centric strategy, the Group estimated that it will have 1,500 rigs by January 2022, more than 2,500 rigs by

end of 2022 and at least 10,000 rigs by 2023). As agreed with crypto mining partners, including Frontier and SMI, the Group&rsquo s current strategy is to secure more top-end crypto mining equipment so as to increase our efficiency and maximise the profit from our crypto mining operations, rather than focusing on increasing the number of crypto mining rigs. Currently, the Group is mainly mining Bitcoin (BTC)

and Ethereum (ETH).

 

Barring unforeseen circumstances, we expect the Group&rsquo s performance in the financial year ending 30 June 2023 to benefit as a result of the above-mentioned initiatives.