Apex Ace Holding Limited 光麗科技控股有限公司

430 Pages·2017·3.39 MB·English

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L 光麗科技控股有限公司
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Stock code : 6036
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GLOBAL OFFERING
Sponsor Sole Global Coordinator, Joint Bookrunner Joint Bookrunner and
and Joint Lead Manager Joint Lead Manager
* for identification purpose only
IMPORTANT
If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice. S.342(2A)
A1A1
Apex Ace Holding Limited
3rd Sch 29
光 麗 科 技 控 股 有 限 公 司 *
(Incorporated in the Cayman Islands with limited liability) LR19.05(1)b
GLOBAL OFFERING
Number of Offer Shares in the Global Offering : 250,000,000 Shares (subject to the Over-allotment 3rd Sch 2
Option) A1A15(2)(a)
Number of Hong Kong Offer Shares : 25,000,000 Shares (subject to adjustment) A1A15(2)(b)
Number of International Placing Shares : 225,000,000 Shares (subject to adjustment and the
Over-allotment Option)
Offer Price : Not more than HK$0.58 per Offer Share and 3rd Sch 9
expected to be not less than HK$0.40 per Offer
Share, plus brokerage of 1%, SFC transaction A1A15(2)(c)
levy of 0.0027% and Stock Exchange trading fee
of 0.005%(payable in full on application in Hong A1A15(2)(d)
Kong dollars and subject to refund)
Nominal Value : HK$0.01 per Share
Stock Code : 6036
Sponsor
Sole Global Coordinator, Joint Bookrunner Joint Bookrunner and
and Joint Lead Manager Joint Lead Manager
Joint Lead Manager
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company LR11.20
Limited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly
disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this
prospectus. A copy of this prospectus, together with the documents specified under the paragraph headed “1. Documents delivered to the
Registrar of Companies in Hong Kong” in Appendix VII to this prospectus, has been registered by the Registrar of Companies in Hong Kong S.342
as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong S.342C
Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the
contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be fixed by the Price Determination Agreement to be entered into between the Company and the Sole Global
Coordinator (for itself and on behalf of the other Underwriters) on the Price Determination Date, which is expected to be on or around
Monday, 12 March 2018 or such later date or time as may be agreed by the Sole Global Coordinator (for itself and on behalf of the other
Underwriters) and the Company, and in any event, not later than 5:00 p.m. on Tuesday, 13 March 2018. The Offer Price will not be more
than HK$0.58 per Offer Share and is expected to be not less than HK$0.40 per Offer Share. If, for any reason, the Company and the Sole
Global Coordinator (for itself and on behalf of the other Underwriters) are unable to reach an agreement on the Offer Price by 5:00 p.m. on
Tuesday, 13 March 2018, the Global Offering will not proceed.
The Sole Global Coordinator (for itself and on behalf of the other Underwriters) may, with the consent of the Company, reduce the
indicative Offer Price range below that stated in this prospectus at any time prior to the Price Determination Date. In such a case, notices of
reduction of the indicative Offer Price range will be published on the Company’s website at www.apexace.com and the website of the Stock
Exchange at www.hkexnews.hk.
Prospective investors of the Global Offering should note that the other Underwriters are entitled to terminate the Underwriting Agreements
by giving written notice to our Company upon the occurrence of any of the events stated in the Underwriting Agreements, as summarised
under the paragraph headed “Grounds for termination” in the section headed “Underwriting” of this prospectus, at any time prior to 8:00 a.m.
(Hong Kong time) on the Listing Date. Should the Underwriters terminate the Underwriting Agreements, the Global Offering will not
proceed.
The Offer Shares have not been, and will not be, registered under the U.S. Securities Act and, subject to certain exceptions, may not be
offered or sold in the United States.
Prior to making an investment decision, prospective investors should carefully consider all the information set out in this prospectus,
including the risk factors set out in the section headed “Risk Factors” in this prospectus.
28 February 2018
* for identification purpose only S.342(1)
EXPECTED TIMETABLE
If there is any change in the following expected timetable of the Hong Kong Public Offer, our Group
will issue an announcement in Hong Kong to be published on the website of our Company at www.apexace.com
and the website of the Stock Exchange at www.hkexnews.hk.
Date and time(1)
Hong Kong Public Offer commences and WHITE and YELLOW
Application Forms available from................... . 9:00 a.m. on Wednesday, 28 February 2018
Application lists open(2) ................ ........... ... ... 11:45 a.m. on Monday, 5 March 2018 3rd Sch 8
Latest time to give electronic application
instructions to HKSCC(3) ....................... ..... .. 12:00 noon on Monday, 5 March 2018
Latest time to lodge WHITE and YELLOW
Application Forms ..................... ..... ......... 12:00 noon on Monday, 5 March 2018
Application lists of the Hong Kong Public Offer close(2) ........ 12:00 noon on Monday, 5 March 2018 3rd Sch 8
Expected Price Determination Date on or before(4) ..................... ...Monday, 12 March 2018
Announcement of:
• the final Offer Price,
• the level of indication of interest in the International Placing,
• the level of applications in Hong Kong Public Offer,
• the basis of allocation of the Hong Kong Offer Shares in the
Hong Kong Public Offer to be published on the website of
our Company at www.apexace.com and the website of
the Stock Exchange at www.hkexnews.hk on ............ ... .....Thursday, 15 March 2018
Announcement of results of allocations in the Hong Kong Public Offer
(with successful applicants’ identification document or business
registration numbers, where appropriate) to be available through
a variety of channels (for further details, please see
“How to Apply for Hong Kong Offer Shares” –
“10. Publication of Results” in this prospectus) from ...................Thursday, 15 March 2018
Results of allocations in the Hong Kong Public Offer
will be available at www.unioniporesults.com.hk with
a “search by ID” function from .................. ........... ..... .Thursday, 15 March 2018
Despatch/Collection of refund cheques in respect of wholly or
partially successful applications if the final Offer Price
is less than the price payable on application (if applicable)
or wholly or partially unsuccessful applications pursuant to
the Hong Kong Public Offer on (6), (7), (8) and (9) ....................... ...Thursday, 15 March 2018
i
EXPECTED TIMETABLE
Despatch/Collection of Share certificates on (5), (7), (8) and (9) ..................Thursday, 15 March 2018
Dealings in the Shares on the Stock Exchange
expected to commence at . .......................... ... ..9:00 a.m. on Friday, 16 March 2018 A1A22
Notes:
1. All times and dates refer to Hong Kong local time, except as otherwise stated. Details of the structure of the Global
Offering, including its conditions, are set out in the section headed “Structure and Conditions of the Global Offering” in
this prospectus.
2. If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above in Hong Kong at any time
between 9:00 a.m. and 12:00 noon on Monday, 5 March 2018, the application lists will not open or close on that day. For
details, please see the section headed “How to Apply for Hong Kong Offer Shares – 9. Effect of bad weather on the
opening of the application lists” in this prospectus.
3. Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC should refer
to “How to apply for Hong Kong Offer Shares – 5. Applying by giving electronic application instructions to HKSCC via
CCASS” in this prospectus.
4. The Price Determination Date is expected to be on or about Monday, 12 March 2018. If, for any reason, the Offer Price is
not agreed by 5:00 p.m. on Tuesday, 13 March 2018 between our Company and the Sole Global Coordinator (for itself and
on behalf of the other Underwriters), the Global Offering will not proceed.
5. Share certificates for the Offer Shares are expected to be issued on Thursday, 15 March 2018 but will only become valid
certificates of title at 8:00 a.m. on Friday, 16 March 2018 provided that (a) the Global Offering has become unconditional
in all respects; and (b) none of the Underwriting Agreements has been terminated in accordance with its terms.
6. Refund cheque(s) will be issued in respect of wholly or partially unsuccessful applications and also in respect of wholly or
partially successful applications if the Offer Price as finally determined is less than the price payable on application. Refund
by cheque(s) will be made out to you, or if you are joint applicants, to the first-named applicant on your Application Form.
Part of your Hong Kong identity card number/passport number, or, if you are joint applicants, part of the Hong Kong
identity card number/passport number of the first-named applicant provided by you may be printed on your refund cheque,
if any. Such data may also be transferred to a third party for refund purposes. Your banker may require verification of your
Hong Kong identity card number/passport number before encashment of your refund cheque, if any. Inaccurate completion
of your Hong Kong identity card number/passport number may lead to a delay in encashment of, or may invalidate, your
refund cheque.
7. Applicants for 1,000,000 Hong Kong Offer Shares or more on WHITE Application Forms may collect their refund cheques
(where relevant) and/or Share certificates (where relevant) personally from our Hong Kong Branch Share Registrar, Union
Registrars Limited at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong,
from 9:00 a.m. to 1:00 p.m. on Thursday, 15 March 2018 or any other day as announced by us as the date of despatch of
Share certificates/refund cheques. Individuals who opt for personal collection must not authorise any other person(s) to
make collection on their behalf. Corporate applicants which opt for personal collection must attend by their authorized
representative(s) bearing a letter of authorisation from such corporation(s) stamped with the corporation’s chop. Both
individuals and authorized representatives (if applicable) must produce, at the time of collection, evidence of identity
acceptable to our Hong Kong Branch Share Registrar.
8. Applicants for 1,000,000 Hong Kong Offer Shares or more on YELLOW Application Forms may collect their refund
cheques, if any, in person but may not collect their Share certificates personally which will be deposited into CCASS for
the credit of their designated CCASS Participants’ stock accounts or CCASS Investor Participants’ stock accounts, as
appropriate. The procedures for collection of refund cheques for YELLOW Application Form applicants are the same as
those for WHITE Application Form applicants.
ii
EXPECTED TIMETABLE
9. Uncollected Share certificates and refund cheques (if any) will be despatched by ordinary post at the applicant’s own risk to
the address specified in the relevant Application Form. For further information, applicants should refer to the section
headed “How to Apply for Hong Kong Offer Shares – 13. Despatch/collection of share certificates and refund monies” in
this prospectus.
For details of the structure of the Global Offering, including conditions of the Global Offering,
applicants should refer to the section headed “Structure and Conditions of the Global Offering” in this
prospectus.
iii
CONTENTS
IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong Public
Offer and the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the Offer Shares offered by this prospectus pursuant to the
Hong Kong Public Offer. This prospectus may not be used for the purpose of and does not constitute
an offer or invitation in any other jurisdiction or in any other circumstances. No action has been
taken to permit a public offer of the Offer Shares in any jurisdiction other than Hong Kong and no
action has been taken to permit the distribution of this prospectus in any jurisdiction other than
Hong Kong. The distribution of this prospectus and the offering and sale of the Offer Shares in
other jurisdictions are subject to restrictions, and may not be made except as permitted under the
applicable securities laws of such jurisdictions pursuant to registration with or authorisation by the
relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus and the Application
Forms to make your investment decision. We have not authorized anyone to provide you with
information that is different from what is contained in this prospectus and the Application Forms.
Any information or representation not made in this prospectus and the Application Forms must not
be relied on by you as having been authorized by our Company, the Sponsor, the Sole Global
Coordinator, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of our or their
affiliates or any of their respective directors, officers, employees or agents or any other person or
party involved in the Global Offering.
Page
Expected timetable ..................... ......... .... ........... ....... ....... .. i
Contents ..................... . ........ ........ .......... ....... .............. iv
Summary ............... ..... .... ........ ... ............... .................. 1
Definitions ............... ...... .............. ... .............. ............... 11
Glossary of technical terms ..................... ......... .... ........... ....... .. 22
Forward-looking statements ............... ..... ........... ..... .......... ....... 27
Risk factors ..................... .. ....... .... ........... ....... ....... ........ 29
Waiver from compliance with the Listing Rules and exemption from compliance
with the Companies (WUMP) Ordinance ................. ........... ..... ........ 37
Information about this prospectus and the Global Offering ..................... ....... 40
Directors and parties involved in the Global Offering ..................... ......... ... 44
iv
CONTENTS
Corporate information ................... ..... .......... ... ............... ...... 47
Industry overview .. .............. ..... ............ ... .............. ........... 49
Regulatory overview ................... ..... ........... ..... .......... ....... .. 70
History, reorganisation and group structure ..................... ..... ........... ... 79
Business .............. .. ...... ... ...... ... .............. ..................... 89
Directors, senior management and employees ................ ...... ........ ..... .... 149
Relationship with the Controlling Shareholders and non-competition undertaking ......... 159
Continuing connected transactions ................... ..... .......... ... ........... 166
Substantial shareholders .............. ...... .............. ... ............... .... 168
Share capital ................. .. ..... .......... ... ............... .............. 169
Financial information ................... .... ............. ... ............... .... 172
Future plans and use of proceeds ................. ..... ........... ..... .......... . 230
Underwriting ... .... ........ ..... ........... ..... .......... ....... ............ 237
Structure and conditions of the Global Offering .................. ..... ........... ... 248
How to apply for Hong Kong Offer Shares ................ ...... ........ ..... ...... 258
Appendix I – Accountants’ Report ................ ..... ............ ... ........ I-1
Appendix II – Unaudited pro forma financial information ..................... ..... II-1
Appendix III – Profit Estimate .................. ..... ......... ..... .......... .. III-1
Appendix IV – Valuation Report .. .................. ..... ......... ..... ........ IV-1
Appendix V – Summary of the constitution of the Company and
Cayman Islands company law .................. ..... ........... . V-1
Appendix VI – Statutory and general information ......................... .... .... VI-1
Appendix VII – Documents delivered to the Registrar of Companies
in Hong Kong and available for inspection ....................... . VII-1
v
SUMMARY
This summary aims to give you an overview of the information contained in this prospectus.
Since this is a summary, it does not contain all the information that may be important to you. You
should read the whole document before you decide to invest in the Offer Shares. There are risks
associated with any investment. Some of the particular risks in investing in the Offer Shares are set
out in the section headed “Risk Factors” in this prospectus. You should read that section carefully
before you decide to invest in the Offer Shares.
OVERVIEW
We are a Hong Kong-based semiconductor and other electronic components distributor. We 3rd Sch 1
principally engage in the supply of digital storage products, which comprises Memory and Data & Cloud 3rd Sch 3
3rd Sch 29
products, and general electronic components, along with the provision of our complimentary technical
supports. Our customers are primarily market players in the TMT sector in the PRC and Hong Kong. Since
the commencement of our business in 2005, our Group has been focusing on identifying, sourcing, selling
and distributing quality electronic components produced by brand name Upstream Manufacturers which
normally conduct sales of their products through electronic components distributors like our Group, except
that direct sales channels are established between Upstream Manufacturers and some sizeable Downstream
Manufacturers. Our Group adopts a low margin high volume strategy and our business model is capital
intensive. Please refer to the paragraphs headed ‘Business model’ in this section for details.
Memory products offered by us are widely used in multimedia and mobile devices such as mobile
phones, set-top boxes, smart TVs and wearables while Data & Cloud products offered by us are mainly used
in data centers such as enterprise-level secured server system. Besides, we also offer General Components
including switches, connectors, passive components, main chips, sensors, power semiconductors and analog
to digital converter which are applicable to mobile and multimedia devices. Apart from supplying digital
HKEX(8 Aug)
Q12(i) storage products and general electronic components to our customers, we also provide technical support on
a complimentary basis from the pre-sales to post-sales stages. Pre-sales application engineering support
services include advising customers on the compatibility and configuration of electronic components,
design-in, installation methods and communicating with Upstream Manufacturers and/or Downstream
Manufacturers to fine tune configuration. Post-sales technical support services include software upgrading,
component replacement and emergency support as well as RMA.
Our Group operates mainly in Hong Kong and the PRC. Our Group’s revenue was mainly derived
from customers based in Hong Kong and the PRC during the Track Record Period. For the year ended 31
December 2014 (FY2014), the year ended 31 December 2015 (FY2015), the year ended 31 December 2016
(FY2016) and the nine months ended 30 September 2017 (FP2017), our Group derived revenue of
approximately HKD780.4 million, HKD1,121.2 million, HKD1,702.3 million and HKD1,974.2 million from
the sales of electronic components respectively.
According to the Frost & Sullivan Report, in terms of total revenue, we ranked 19th in the highly
fragmented electronic components distribution market of the PRC and Hong Kong with market share of
approximately 0.08% in 2016.
The following table sets forth a breakdown of the revenue of our Group by types of products during
the Track Record Period:
Nine months ended
30 September 2016
FY2014 FY2015 FY2016 (FP2016) FP2017
HK$’000 % HK$’000 % HK$’000 % HK$’000 % HK$’000 %
(unaudited)
Memory products 372,489 47.8 540,439 48.2 1,027,422 60.4 648,705 57.9 1,337,531 67.7
Data & Cloud products 237,411 30.4 480,394 42.8 553,734 32.5 396,039 34.8 407,268 20.6
General Components 170,487 21.8 100,373 9.0 121,166 7.1 82,186 7.3 229,426 11.7
780,387 100 1,121,206 100 1,702,322 100 1,120,930 100 1,974,225 100
1
SUMMARY
BUSINESS MODEL
HKEX(21 Sept) The business model of our Group is set out below:
Q3
applying for
Authorised
Distributor status
(if necessary) 1. Suppliers and product product
enquiry
portfolio sourcing
TECHNICAL SUPPORT
providing product promoting product
information and and providing
training pre-sale engineering
2. Promotion and marketing support
providing on-site
engineering support
Suppliers 3. Field A(FpAplEic)a Stiuopnp Eonrtgineering d(iefs riegqnu-iinre d) Customers
placing purchase placing purchase
orders and/or orders and/or
providing providing forecast
consolidated forecast
delivery from 4. Sales, procurement, inventory
supplier and logistics management delivery to customer
TECHNICAL SUPPORT
RMA replacement
and failure RMA troubleshooting
analysis report 5. After sales service support
and support after sales services
& support
Note: For details of our business model, please refer to the section headed “Business – business model” in this prospectus.
HKEX (6 Nov) Since the commencement of our business, our Group has adopted a low margin high volume business
Q1 (iii) strategy which was proven to be sustainable to maintain our business operation and to capture the market
growth from time to time. For distributors like our Group in the electronic components industry, according
to the Frost & Sullivan Report, to remain profitable, pursuing high volume of sales is a common practice in
the industry. Moreover, improving the ability of forecasting the future trend of technology and distributing
products that are largely demanded by the market, and developing technological capabilities in order to
provide more value-added services, are also adopted by distributors like us to realise more profits. In view
of our Directors, our Group maintains a thin profit margin for our electronic components distribution
business which was in line with the industry norm. Having been actively sourcing brand name suppliers and
broadening our customer base through matching their needs in response to the market growth throughout the
Track Record Period and up to the Latest Practicable Date, our Group has demonstrated the ability and the
pursuit to continuously boost our sales volume, in order to achieve an overall growth in our overall net
profit. For details of our Group on-going profitability strategies and measures, please refer to “Business –
Profitability strategies and measures” of this prospectus.
HKEX (8 Aug) Our business model is capital intensive. According to the Frost & Sullivan Report, significant capital
Q1 (i) investment is necessary for market players of the electronic component distributing market. To remain
HKEX (6 and competitive in the market, electronic component distributors generally need to retain high level of working
10 Nov) capital to guarantee smooth business operation and support the growth in demand. Typically, electronic
Q1 (i) components distributors need capital for the early procurement of Upstream Manufacturer’s products. At the
same time, it is an industry norm that distributors always offer long credit period for downstream customers.
HKEX PH Therefore, the gap between accounts receivable turnover days and accounts payable turnover days can
(9 Feb 18) sometimes result in high gearing ratio for distributors when they rely on borrowings to ease the pressure of
Q3 cash flow.
In line with such market practice, which indicates potential mismatches of trade receivable turnover
days and trade payable turnover days, and along with the significant growth in our sales and business
operation, the credit period offered by us to customers is generally longer than the credit period offered to
us by our suppliers which result in a mismatch between the timing of the Company’s payment to suppliers
2
SUMMARY
and receipt of payment from customers. Our Group had incurred significant amount of net cash used in our
operating activities in order to finance the required working capital accordingly throughout the Track
Record Period. Our net cash generated from/(used in) operating activities was approximately HKD32.0
million, HKD -64.4 million, HKD -71.4 million and HKD -238.6 million for FY2014, FY2015 and FY2016
and FP2017, respectively. The further deteriorating net cash flow used in operating activities for FP2017
was mainly the results of the significant increase in our inventory levels, trade receivables, other
receivables, deposits and prepayment. As a result of our continuously growing net cash used in our
operating activities, our Group had maintained a high level of bank borrowing during the Track Record
Period, indicating a deteriorating liquidity and gearing ratio.
For FY2014, FY2015 and FY2016 and FP2017, our Group had bank borrowings of approximately
HKD47.1 million, HKD117.0 million, HKD262.4 million and HKD520.3 million respectively. These
banking facilities were mainly secured by our Group’s trade receivables and self-owned properties. Our
gearing ratio as at 31 December 2014, 2015 and 2016 and 30 September 2017 was approximately 60.1%,
123.7%, 177.5% and 278.8%, respectively. As at 30 September 2017, the further increase in our gearing
HKEX PH ratio was driven by the significant increase in our total bank borrowings by approximately HKD257.8
(9 Feb 18) million mainly in forms of factoring loans, and other bank loans in response to the increasing required
Q4 working capital for our inventory procurements.
HKEX (6 Nov) With our Group’s revenue continuously growing, very often the mismatch between account
Q1(i) receivables turnover days and account payable turnover days would lead to higher gearing ratio and hence
put us at liquidity risk. Despite short term loans could bridge this mismatch by way of cash inflow
generated from our financing activities to allow us to continuously undertake the growing numbers of our
customer orders, it also further enlarges our cash flow used in operating activities at the same time.
Our Directors are of the view that we may face liquidity risk in our future operation and that our
liquidity may further tighten as our business expands unless equity financing, instead of debt financing
obtained by us. For details analysis of liquidity risk faced by our Group, please refer to the section headed
HKEX PH “Risk Factors – We continuously maintain a high level of bank borrowings and our cost of borrowings is
(9 Feb 18) subject to the fluctuation in interest rate.” of this prospectus. Although the amount of our debts has been in
Q1 an ascending trend, our Directors were not aware of any difficulties in repaying and/or renewing our loans.
HKEX (29 Dec) During the Track Record Period, there was no occasion where our Group had defaulted in repayment or our
Q1(iv) customers had defaulted in payment of our trade receivables which were factored to our banks.
Our Directors believe that our Group has maintained sufficient working capital for our future
operation needs based on the following: (i) the continuous use of our factoring loans, which allowed our
Group to release liquidity through pledging a substantial amount of our trade receivables to our banks
(credit risk of which were covered by credit insurance), together with our other bank loans and bank
instalment loans during the Track Record Period are considered as our liquidity management policy to
strengthen the liquidity position of our Group as detailed under the section headed “Financial Information –
Bank Borrowings” and “Business – Liquidity Management Policy” of this prospectus; (ii) our Group had
adequate unutilised bank borrowings during FY2014, FY2015 and FY2016 and FP2017 to provide
additional funding for the need of our working capital and the expansion of our business, for details, please
refer to the section headed “Financial Information – Indebtedness” of this prospectus; (iii) our positive
financial position from being at a positive net current asset position during the Track Record Period, please
refer to section headed “Financial Information – Net Current Assets” in this prospectus.
CUSTOMERS
For FY2016, we had over 300 customers, which consisted of (i) Downstream Manufacturers and (ii)
other distributors who are not an Authorised Distributor of a particular Upstream Manufacturer. Most of
them are based in the PRC. Some of our Group’s customers are listed companies (or subsidiaries of listed
companies) in Hong Kong, the PRC, Taiwan, Singapore and the USA. The total revenue derived from
customers who are listed companies (or their subsidiaries) accounted for approximately 53.0%, 60.0%,
65.0% and 63.8% of our Group’s total revenue for FY2014, FY2015 and FY2016 and FP2017 respectively.
For FY2014 and FY2015, over 61% of our Group’s total revenue were derived from Downstream
Manufacturers while for FY2016 and FP2017, over 81% of our Group’s total revenue were derived from
Downstream Manufacturers, and the rest of them are other distributors who is not an Authorised Distributor
of a particular Upstream Manufacturer.
For FY2014, FY2015 and FY2016 and FP2017 our Group’s five largest customers accounted for
approximately 44.8%, 58.0%, 44.6% and 43.3% of our total revenue, respectively, with the largest customer
accounted for approximately 12.7%, 13.3%, 17.5% and 11.0% respectively.
We generally do not enter into any long-term or master sales agreement for committed amount of
sales with our customers, including our major customers. Sales of products by us to the major customers are
only based on individual purchase orders placed by the major customers from time to time.
3