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Joint Sponsors
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Stock Code :  1284
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Incorporated in the Cayman Islands with limited liability
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New Media Lab Limited
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New Media Lab Limited
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New Media Lab Limited
Overall Coordinators
Joint Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Joint Sponsors
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If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
ʮ̡
New Media Lab Limited
(incorporated in the Cayman Islands with limited liability)
SHARE OFFER
Number of Offer Shares : 150,000,000 Shares
Number of Public Offer Shares : 15,000,000 (including 1,500,000 Employee
Reserved Shares)(subject to re-allocation)
Number of Placing Shares : 135,000,000 Shares (subject to re-allocation)
Offer Price : Not more than HK$0.92 per Offer Share and
expected to be not less than HK$0.84 per
Offer Share, plus 1% brokerage, 0.0027%
SFC transaction levy, 0.00015% AFRC
transaction levy and 0.00565% Stock
Exchange trading fee (payable in full on
application and subject to refund)
Nominal Value : HK$0.01 per Share
Stock Code : 1284
Joint Sponsors
Overall Coordinators
Joint Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take
no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liabilit y
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, having attached thereto the documents specified in the paragraph headed “Documents delivered to the Registrar of
Companies and on Display” in Appendix V to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by
section 342C of the CWUMPO. 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 agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company on the Price Determination Date. The Offer Price will not be more than HK$0.92 per Offer Share and will not be less than HK$0.84 per
Offer Share. Applicants for Public Offer Shares are required to pay, on application, the maximum Offer Price of HK$0.92 for each Public Offer Share
together with 1% brokerage, 0.00565% Stock Exchange trading fee, 0.0027% SFC transaction levy and 0.00015% AFRC transaction levy, subject to
refund if the Offer Price as finally determined is less than HK$0.92 per Offer Share.
If, for any reason, the final Offer Price is not agreed upon between the Overall Coordinators (for themselves and on behalf of the Underwriters) and
our Company by Friday, 7 July 2023, the Share Offer will not proceed and will lapse immediately.
Prior to making an investment decision, prospective investors should read the entire document carefully and, in particular, should consider carefu lly
all of the information set out in this prospectus, including the risk factors set out in the section headed “Risk Factors” in this prospectus.
Pursuant to the provisions of the Underwriting Agreement, the Overall Coordinators (for themselves and on behalf of the Underwriters) has the right,
in certain circumstances, to terminate the obligations of the Underwriters by notice in writing to our Company at any time prior to 8:00 a.m. (Hong
Kong time) on the Listing Date. Such events include, but without limitation to, acts of God, war, riot, public disorder, civil commotion, economic
sanctions, fire, flood, explosion, epidemic, terrorism, strike or lockout involving Hong Kong, the PRC or any other jurisdiction. It is important th at
you refer to the section headed “Underwriting” in this prospectus for further details.
An announcement will be published on the website of the Stock Exchange at www.hkexnews.hk and the website of our Company at
www.newmedialab.com.hk if there is any change to the expected timetable.
IMPORTANT
30 June 2023


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Y our application through the HK eIPO White Form service or the CCASS EIPO
service must be for a minimum of 5,000 Public Offer Shares and in one of the numbers set
out in the table. Y ou are required to pay the amount next to the number you select.
No. of
Public
Offer
Shares
applied for
Amount
payable on
application
No. of
Public
Offer
Shares
applied for
Amount
payable on
application
No. of
Public
Offer
Shares
applied for
Amount
payable on
application
HK$ HK$ HK$
5,000 4,646.39 60,000 55,756.69 700,000 650,494.75
10,000 9,292.78 70,000 65,049.48 800,000 743,422.55
15,000 13,939.17 80,000 74,342.26 900,000 836,350.38
20,000 18,585.57 90,000 83,635.04 1,000,000 929,278.20
25,000 23,231.95 100,000 92,927.82 2,000,000 1,858,556.40
30,000 27,878.35 200,000 185,855.65 3,000,000 2,787,834.60
35,000 32,524.74 300,000 278,783.45 4,000,000 3,717,112.80
40,000 37,171.13 400,000 371,711.28 5,000,000 4,646,391.00
45,000 41,817.52 500,000 464,639.10 6,000,000 5,575,669.20
50,000 46,463.91 600,000 557,566.92 6,750,000
1 6,272,627.86
Note:
1 Maximum number of Public Offer Shares that you may apply for.
No application for any other number of the Public Offer Shares will be considered and
any such application is liable to be rejected.
IMPORTANT


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If there is any change in the following expected timetable of the Public Offer , we
will issue an announcement to be published on the websites of the Stock Exchange at
www.hkexnews.hk and our Company at www.newmedialab.com.hk .
Date(1)
Public Offer commences ........................ 9:00 a.m. on Friday, 30 June 2023
Latest time for lodging PINK application form ....... 4:00 p.m. on Tuesday, 4 July 2023
Latest time for completing electronic applications under
the HK eIPO White Form service through one of
the below ways: (2)
(1) the IPO App , which can be downloaded by
searching “ IPO App ” in App Store or Google Play
or downloaded at www.hkeipo.hk/IPOApp or
www.tricorglobal.com/IPOApp
(2) the designated website www.hkeipo.hk .............. 1 1:30 a.m. on Wednesday,
5 July 2023
Application lists open (3) ...................... 1 1:45 a.m. on Wednesday, 5 July 2023
Latest time for (a) completing payment
for HK eIPO White Form applications
by effecting internet banking transfer(s)
or PPS payment transfer(s) and (b)
giving electronic application instructions
to HKSCC
(4) ..................................... 12:00 noon on Wednesday,
5 July 2023
If you are instructing your broker or custodian who is a CCASS Clearing Participant or a
CCASS Custodian Participant to give electronic application instructions via CCASS
terminals to apply for the Public Offer Shares on your behalf, you are advised to contact
your broker or custodian for the latest time for giving such instructions which may be
different from the latest time as stated above.
Application lists close
(3) ..................... 12:00 noon on Wednesday, 5 July 2023
Expected Price Determination Date (5) .......................... Friday, 7 July 2023
Announcement of the Offer Price on the websites of the
Company and the Stock Exchange at www.newmedialab.com.hk (6)
and www.hkexnews.hk on or around (9) ...................... Friday, 14 July 2023
EXPECTED TIMETABLE
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Announcement of the level of indication of interest
in the Placing, the level of applications
in the Public Offer and the Employee Preferential
Offering and the basis of allocation of the Public Offer Shares
and the Employee Reserved Shares on the websites of the
Company and the Stock Exchange at www.newmedialab.com.hk
and www.hkexnews.hk on or before (9) ...................... Friday, 14 July 2023
Results of allocations in the Public Offer (with successful applicants’ identification
document numbers, where appropriate) and Employee Preferential Offering to be available
through a variety of channels as described in “How to apply for Public Offer Shares and
Employee Reserved Shares – D. Publication of Results”, including
(9):
 in the announcement to be posted on our website and
the website of the Stock Exchange at www.newmedialab.com.hk (6)
and www.hkexnews.hk , respectively ..................... Friday, 14 July 2023
 from the “IPO Results” function in the IPO App or
at www.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResult
with a “search by ID” function from .................... 8:00 a.m. on Friday,
14 July 2023 to 12:00 midnight
on Thursday, 20 July 2023
 from the allocation results telephone enquiry line
by calling +852 3691 8488 between 9:00 a.m.
and 6:00 p.m. from ................................ Friday, 14 July 2023 to
Wednesday, 19 July 2023
(excluding Saturday, Sunday and
public holiday in Hong Kong)
Share certificates in respect of wholly or partially successful
applications to be despatched/collected or deposited into
CCASS on or before
(7) .................................. Friday, 14 July 2023
HK eIPO White Form e-Auto Refund payment instructions/refund
cheques in respect of wholly or partially successful applications
(if applicable) or wholly or partially unsuccessful
applications to be despatched/collected on or before
(8) .......... Friday, 14 July 2023
Dealings in the Shares on the Stock Exchange
expected to commence ................................ a t 9:00 a.m. on Monday,
17 July 2023
Notes:
(1) All times refer to Hong Kong local time, except as otherwise stated.
(2) Y ou will not be permitted to submit your application under the HK eIPO White Form service through the
IPO App or the designated website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting
applications. If you have already submitted your application and obtained a payment reference number from
EXPECTED TIMETABLE
–i i–


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the IPO App or the designated website at or before 11:30 a.m., you will be permitted to continue the
application process (by completing payment of application monies) until 12:00 noon on the last day for
submitting applications, when the application lists close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, 5
July 2023, the application lists will not open or close on that day. See “How to apply for Public Offer
Shares and Employee Reserved Shares – C. Effect of bad weather and/or Extreme Conditions on the
opening and closing of the application lists”.
(4) Applicants who apply for Public Offer Shares by giving electronic application instructions to HKSCC via
CCASS or instructing your broker or custodian to apply on your behalf via CCASS should refer to “How
to apply for Public Offer Shares and Employee Reserved Shares – 6. Applying through the CCASS EIPO
service”.
(5) The Price Determination Date is expected to be on or around Friday, 7 July 2023 and, in any event, not
later than Monday, 10 July 2023. If, for any reason, we do not agree with the Overall Coordinators (for
itself and on behalf of the Underwriters) on the pricing of the Offer Shares by Monday, 10 July 2023, the
Public Offer will not proceed and will lapse.
(6) None of the website or any of the information contained on the website forms part of this prospectus.
(7) No temporary evidence of title will be issued in respect of the Offer Shares. Share certificates will only
become valid at 8:00 a.m. on the Listing Date provided that the Public Offer has become unconditional and
the right of termination described in “Underwriting – Underwriting arrangements and expenses – Grounds
for termination” has not been exercised. Investors who trade Shares on the basis of publicly available
allocation details or prior to the receipt of Share certificates or the Share certificates becoming valid do so
entirely at their own risk.
(8) e-Auto Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Public Offer and also in respect of wholly or partially successful
applications in the event that the Offer Price is less than the price payable per Offer Share on application.
Applicants who have applied through the HK eIPO White Form service and paid their applications monies
through single bank accounts may have refund monies (if any) despatched to the bank account in the form
of e-Auto Refund payment instructions. Applicants who have applied through the HK eIPO White Form
service and paid their application monies through multiple bank accounts may have refund monies (if any)
despatched to the address as specified in their application instructions in the form of refund cheques in
favour of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at
their own risk.
(9) In case a typhoon warning signal no. 8 or above, a black rainstorm warning signal and/or Extreme
Conditions between Friday, 30 June 2023 and Monday, 17 July 2023, then the day of (i) announcement of
results of allocations in the Public Offer and Employee Preferential Offer; (ii) despatch of Share certificates
and refund checks/ HK eIPO White Form e-Auto Refund payment instructions; and (iii) dealings in the
Shares on the Stock Exchange may be postponed and an announcement may be made in such event.
Share certificates for the Public Offer Shares and Employee Reserved Shares are
expected to be issued on Friday, 14 July 2023 but will only become valid evidence of
title if the Public Offer has become unconditional in all respects and neither of the
Underwriting Agreements is terminated in accordance with its terms before 8:00 a.m.
on the Listing Date, which is expected to be Monday, 17 July 2023.
The above expected timetable is a summary only. Y ou should see “Structure and
Conditions of the Share Offer” and “How to apply for Public Offer Shares and Employee
Reserved Shares” for details of the structure of the Public Offer, including the conditions of
the Public Offer, and the procedures for application for the Public Offer Shares.
EXPECTED TIMETABLE
– iii –


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If the Public Offer does not become unconditional or is terminated in accordance with
its terms, the Public Offer will not proceed. In such a case, we will make an announcement
as soon as practicable thereafter.
EXPECTED TIMETABLE
–i v–


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This prospectus is issued by us solely in connection with the Share Offer and the
Offer Shares and does not constitute an offer to sell or a solicitation of an offer to
subscribe for or buy any security other than the Offer Shares. This prospectus may not be
used for the purpose of, and does not constitute, an offer to sell or a solicitation of an
offer to buy any security in any other jurisdiction or in any other circumstances. No
action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong.
You should rely only on the information contained in this prospectus and the related
Application Forms to make your investment decision.
The Company has not authorised anyone to provide you with information that is
different from what is contained in this prospectus and the related Application Forms.
Any information or representation not made in this prospectus or the related Application
Forms must not be relied on by you as having been authorised by the Company, the Joint
Sponsors, the Overall Coordinators, the Capital Market Intermediaries, the Joint
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of
their respective directors, officers, employees, advisers, agents or representatives or any
other parties involved in the Share Offer . The contents on the website at
www.newmedialab.com.hk do not form part of this prospectus.
Page
Expected Timetable .................................................. i
Contents ........................................................... v
Summary .......................................................... 1
Definitions ......................................................... 1 7
Glossary of Technical Terms ........................................... 3 2
Forward-Looking Statements ........................................... 3 5
Risk Factors ........................................................ 3 6
Information about this Prospectus and the Share Offer ...................... 5 0
Directors and Parties involved in the Share Offer .......................... 5 4
Corporate Information ................................................ 5 9
Industry Overview ................................................... 6 1
Regulatory Overview ................................................. 8 7
History, Reorganisation and Corporate Structure .......................... 9 8
CONTENTS
–v–


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Page
Business ........................................................... 1 1 1
Directors, Senior Management and Employees ............................. 1 9 1
Share Capital ....................................................... 2 0 5
Controlling and Substantial Shareholders ................................. 2 0 8
Relationship with Controlling Shareholders ............................... 2 1 1
Connected Transactions ............................................... 2 1 7
Financial Information ................................................ 2 3 0
Future Plans and Use of Proceeds ....................................... 2 7 4
Underwriting ....................................................... 2 9 2
Structure and Conditions of the Share Offer .............................. 3 0 1
How to Apply for Public Offer Shares and Employee Reserved Shares .......... 3 1 0
Appendix I – Accountants’ Report .................................. I - 1
Appendix II – Unaudited Pro Forma Financial Information ............... II-1
Appendix III – Summary of the Constitution of the Company and
Cayman Islands Company Law ......................... III-1
Appendix IV – Statutory and General Information ....................... I V - 1
Appendix V – Documents delivered to the Registrar of Companies and
on Display ......................................... V - 1
CONTENTS
–v i–


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This summary aims to give you an overview of the information contained in this
prospectus and should be read in conjunction with the full text of this prospectus. As this
is a summary, it does not contain all the information that may be important to you and is
qualified in its entirety by, and should be read in conjunction with, the full text of this
prospectus. You should read the whole prospectus including the Appendices hereto, which
constitute an integral part of this prospectus, 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.
BUSINESS OVERVIEW
We are a digital media company that operates in Hong Kong, providing integrated
advertising solutions to advertisers ranging from multi-national brand owners, advertising
agencies to SMEs primarily through our Digital Media Platforms. We produce and distribute
contents on diverse areas of interest under our different well-known and popular media
brands. Coupled with our strong digital media presence, including our own websites and
mobile apps as well as on third party social media platforms such as Facebook, Instagram,
Y outube and LinkedIn, we are able to reach and attract different types of audience, which in
turn generates value for our advertisers. To complement our Digital Media Platforms we still
maintained, though with diminishing importance as compared to our digital business, the
publication of some magazines and travel guidebooks in which advertisers can also place
advertisements. With our reach to audience of different categories on multiple media
platforms we are able to offer integrated advertising solutions to and cater for the different
advertising needs of our clients and monetise the traffic generated by our contents on our
Digital Media Platforms and audience’s interest in our print publications into our revenue.
According to the Euromonitor Report, our Group ranked second amongst online advertising
companies in Hong Kong for three consecutive years of 2020, 2021 and 2022 in terms of
revenue with a market share of approximately 1.9%, 1.8% and 1.8% respectively.
Our media brands
During the Track Record Period and as at the Latest Practicable Date, our Group
operates nine (9) media brands, namely “
อ৿ಂ” (Weekend Weekly), “˙อή” (Oriental
Sunday), “ ຾᏶ɓ඄” (Economic Digest) and “ อ Monday” (New Monday/NM+) which started
off as print magazines in the early 2000s and have a strong heritage, as well as More,
GOtrip, Sunday Kiss, and the two more recent brands SSwagger and Madame Figaro
introduced in 2018 and 2019 respectively. They offer contents ranging from lifestyle such as
dining and local attractions, gourmet and gastronomy, fashion, beauty and travel,
entertainment news, kids and parenting, electronic gadgets and gaming to designer and
luxury labels, finance and investment related contents.
We have strong digital presence with millions of subscribers that follow our contents
on our Digital Media Platforms. As at the end of the Track Record Period, the total number
of followers of the Facebook fanpages and Instagram profiles operated by our Group has
exceeded 7.4 million and 1.2 million respectively; for the year ended 31 December 2022,
our 9 websites recorded unique visits of over 219.7 million with cumulative web impression
SUMMARY
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reaching over 4.2 billion. In 2020, our Group has launched seven mobile applications for
“Weekend Weekly”, “Economic Digest”, “More”, “Oriental Sunday”, “Sunday Kiss”,
“GOtrip” and “New Monday” respectively, and has achieved a total acquisition of
approximately 1.4 million as at 31 December 2022.
Our advertising business
We offer integrated advertising products and services which can be distributed on both
our Digital Media Platforms and in books and magazines we publish. We provide a wide
spectrum of advertising products and services including display banners, advertorials and
reviews, social newsfeeds, creative and production across our Digital Media Platforms and in
our print circulations, whether alone or in different types of combinations or even as part of
an advertising campaign to achieve maximum exposure and publicity. Other than
conventional advertising products, we also utilise features of search engines to provide
strategic services including segment marketing and SEO which helps our clients rank their
information higher in search engines and improve their online visibility. We offer flexibility
in our product offerings and services such that advertisers can pick and choose the specific
or combination of products and services that best suit their marketing objectives and
budgets, and we may be engaged directly by the advertisers and brand owners themselves or
through advertising agencies. Our charges for tailor-made integrated advertising solutions are
negotiated on project basis depending on the products purchased by and services to be
provided to the client, taking into account factors including the prevailing standard rates
(where applicable) on our rate card, the budget of the client, time duration and scale of the
advertising campaign, our cost for providing the services, the client’s relationship with our
Group including the frequency and volume of the client’s past engagement(s) and future
business opportunities with the client. We price our products and services by taking into
account various factors including market demands for our services and products, client’s
budget, the market rates and costs of providing the relevant services.
On the other hand, we also have programmatic advertising service agreements in place
with various digital partners (i.e. the SSPs) under which we offer our available
advertisement inventories (i.e. the number of advertisement or amount of advertisement
space available for sale to advertisers) to these SSPs for pairing up with offers made by
advertisers on the SSP’s platforms. Our Group, as publisher, acts as the platform for
displaying the advertisements allocated by the SSPs platforms and we do not produce any
content for these advertisements. Since programmatic advertisement is basically an automatic
bidding for our advertisement inventory on SSPs’ platforms, our Group will usually specify
a floor price (in terms of CPM) for advertisement inventories on our Digital Media
Platforms. Driven by the bidding process, advertisement of the advertiser with the highest
bidding CPM will be placed to respective advertisement inventories on our Digital Media
Platforms through respective SSP’s platform. Programmatic advertising revenue from sales
of our advertisement inventories on our Digital Media Platforms is determined based on a
pre-agreed portion of the aggregate CPM (i.e. the highest bids in terms of CPM) generated
from respective SSP’s platform from time to time. Such revenue sharing portion is based on
the terms and conditions with each SSP . During the Track Record Period, the whole of our
programmatic advertising revenue was derived from SSPs.
SUMMARY
–2–


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Our print media business
During the Track Record Period, we published four magazines, being (i) the 3-in-1
Oriental Sunday Magazine (combined with Weekend Weekly magazine and New Monday
magazine) on a weekly basis (which ceased publication with the last issue in December
2020), (ii) Economic Digest Magazine as a weekly magazine, (iii) since third quarter of
2019, Madame Figaro Magazine as a quarterly magazine and (iv) in 2021, the Weekend
Weekly x GOtrip Magazine as a quarterly magazine (though the 2022 issues were cancelled
in view of reduced overseas travelling during this period).
The retail or cover price of each of our print publications is determined taking into
account the cost of production, prevailing market price for publications of similar market
positioning and demand for our publications. Our publications are primarily sold to the
Distributors at pre-agreed discounts to the retail or cover price of the publications
determined based on industry norms. For details of the distribution arrangements between
our Group and the Distributors, please refer to the section headed “Business – Production
Workflow – Distribution of magazines and books” of this prospectus.
The following table sets forth the breakdown of our revenue during the Track Record
Period:
Y ear ended 31 December
2020 2021 2022
HK$’000
%o f
revenue HK$’000
%o f
revenue HK$’000
%o f
revenue
Advertising
Digital advertising
– Online advertising
income 157,401 74.4 195,071 79.6 188,090 78.1
– Programmatic
advertising income 22,851 10.8 36,787 15.0 41,079 17.1
180,252 85.2 231,858 94.6 229,169 95.2
Print advertising 12,608 5.9 9,849 4.0 8,608 3.6
Subtotal 192,860 91.1 241,707 98.6 237,777 98.8
Circulation 18,729 8.9 3,492 1.4 2,901 1.2
Total 211,589 100.0 245,199 100.0 240,678 100.0
During the Track Record Period, our income is derived principally from the provision
of integrated advertising solutions which are primarily distributed on our Digital Media
Platforms and, with diminishing proportion, our print publications. For each of the three
years ended 31 December 2022, our income derived from (i) the digital advertising business
SUMMARY
–3–


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represented approximately 85.2%, 94.6% and 95.2% of our total revenue respectively; (ii)
the circulation of our publications represented approximately 8.9%, 1.4% and 1.2% of our
total revenue respectively; and (iii) advertising in our publications represented approximately
5.9%, 4.0% and 3.6% of our total revenue respectively.
The following table sets forth the breakdown of our advertising revenue by major
media platforms from which our Group operated on during the Track Record Period:
For the year ended 31 December
2020 2021 2022
HK$’000
%o f
advertising
revenue HK$’000
%o f
advertising
revenue HK$’000
%o f
advertising
revenue
Third party social media
platforms
– Facebook 118,731 61.6 151,362 62.6 134,753 56.7
– Instagram 9,846 5.1 14,105 5.8 13,610 5.7
– Y outube 274 0.1 274 0.1 203 0.1
– LinkedIn N/A N/A N/A N/A 190 0.1
Sub-total 128,851 66.8 165,741 68.5 148,756 62.6
Own platforms
– Website 33,154 17.2 39,286 16.3 51,017 21.5
– App 694 0.3 3,541 1.5 4,630 1.9
– Print 12,608 6.5 9,849 4.1 8,608 3.6
Sub-total 45,456 24.0 52,676 21.9 64,255 27.0
Multi-platform (Note 1) 12,441 6.5 18,165 7.5 16,322 6.9
Production service & others
(Note 2) 5,112 2.7 5,125 2.1 8,444 3.5
Total 192,860 100 241,707 100 237,777 100
Note 1: This represents invoices which covered advertising solutions posted onto more than one platform
without specific allocation of the fees to the respective platforms.
Note 2: This represents primarily revenue derived from services which did not relate specifically to the
media platforms mentioned above. The amount for the financial year ended 31 December 2020
also included approximately HK$400,000 representing project management fee charged under
various print advertising contracts. For details please refer to the section headed “Business –
Advertising Solutions” of this prospectus. The increase in revenue under this category for the year
ended 31 December 2022 was mainly due to the increase in the number of contracts for project
management services for credit card offers.
SUMMARY
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Our revenue generated through Facebook for the financial year ended 31 December
2022 dropped by approximately HK$16.6 million, i.e. approximately 11.0%, as compared to
that for the year ended 31 December 2021. Such drop was primarily due to the drop in
advertising revenue from the cosmetics and skin care, toiletries and household,
pharmaceuticals sectors and the hotel, travel and tourism services sectors in view of the
stringent social distancing measures introduced following the outbreak of the fifth wave of
the COVID-19 pandemic, and Facebook is a popular social media platform for advertisers in
these sectors to conduct their advertising campaigns. For details of the breakdown of our
non-programmatic advertising revenue by industry sectors for the Track Record Period
please refer to the section “Financial Information – Discussion and Analysis on Principal
Items in the Consolidated Statements of Profit or Loss and Other Comprehensive Income –
Advertising” of this prospectus.
On the other hand, our revenue derived from our own websites for the financial year
ended 31 December 2022 shown a significant growth of approximately HK$11.7 million (i.e.
approximately 30%) from that for the year ended 31 December 2021, and revenue derived
from our apps also showed a steady growth from that of the year ended 31 December 2021.
As disclosed in the paragraph below, in 2022 we endeavoured to drive organic traffic to our
websites and apps by both search engine optimisation and generating more branded contents.
We believe this led to a growth in our programmatic advertising revenue generated from our
own websites and also enabled us to increase our advertising inventories for direct sale to
our non-programmatic advertisers, especially those who were not so affected by the fifth
wave of the COVID-19 pandemic.
SUPPLIERS AND CLIENTS
Clients
During the Track Record Period, clients of our integrated advertising solutions mainly
comprised of multinational and local brand owners across a variety of industries as well as
advertising agencies operating in Hong Kong, with four out of five of our top five clients
for each financial year during such period being 4A’s advertising agencies. For each of the
financial years ended 31 December 2020, 2021 and 2022, revenue derived from our top five
clients accounted for approximately 48.1%, 45.6% and 41.7% of our revenue respectively
and the largest client accounted for approximately 13.7%, 14.2% and 10.0% of our revenue
for the respective financial year. None of our Company, our Directors, their close associates
or the substantial Shareholders of our Company has any interest in any of our five largest
clients for each year during the Track Record Period. Please refer to the section headed
“Business – Suppliers and Clients – Clients” of this prospectus for further details.
Suppliers
During the Track Record Period, save for Supplier A (Meta Platform Ireland Limited)
which operates a social networking platform which provides boosting services, our suppliers
were primarily printing houses, production houses and freelancers in Hong Kong. For each
of the financial years ended 31 December 2020, 2021 and 2022, costs paid by our Group to
our top five suppliers accounted for approximately 68.3%, 68.5% and 58.7% of our total
production and printing costs respectively and the largest supplier accounted for
SUMMARY
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approximately 52.5%, 62.6% and 50.8% of our total production and printing costs. None of
our Company, our Directors, their close associates or the substantial Shareholders of our
Company has any interest in any of our five largest suppliers for each year during the Track
Record Period.
Reliance on Supplier A
Supplier A operates a social networking platform which provides boosting services for
our online marketing solutions. On the other hand, posting on social media platforms of
Supplier A also generates programmatic revenue for our Group, which makes Supplier A
also a client of our Group. The costs paid to Supplier A for the three financial years ended
31 December 2020, 2021 and 2022 were approximately HK$29.2 million, HK$35.5 million
and HK$31.7 million respectively, representing approximately 52.5%, 62.6% and 50.8% of
the total production and printing costs of our Group for the respective years. The
programmatic revenue generated from the social media platforms of Supplier A amounted to
approximately HK$8.4 million, HK$19.0 million and HK$19.2 million during the three
financial years ended 31 December 2020, 2021 and 2022 respectively, representing
approximately 4.4%, 7.9% and 8.0% of our total advertising revenue for the respective years
and making it one of the top five clients of our Group for the years ended 31 December
2021 and 2022. During the Track Record Period, our revenue generated through social media
platforms operated by Supplier A (i.e. Facebook and Instagram) accounted for approximately
66.7%, 68.4% and 62.4% of our total advertising revenue for the three financial years ended
31 December 2020, 2021 and 2022 respectively.
Please refer to the section headed “Business – Suppliers and Clients – Suppliers” of
this prospectus for further details.
COMPETITION AND COMPETITIVE STRENGTHS
The digital advertising market is a fragmented market with fierce competition. Despite
such fierce competition, according to the Euromonitor Report, for three consecutive years of
2020, 2021 and 2022 our Group was ranked second among online advertising companies in
Hong Kong in terms of revenue with market share of approximately 1.9%, 1.8% and 1.8%
respectively.
We believe our success and future potentials are attributable to our competitive
strengths which include our (i) strong digital presence reaching millions of audience and
brand recognition; (ii) diversified and strong audience base to attract advertising clients with
different target audience; (iii) capability of offering broad range of advertising products and
services and tailor-made solutions to clients; (iv) long-established history and
well-established relationships with clients across different industries; and (v) experienced
management team and dedicated operation structure.
SUMMARY
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RISK FACTORS
Our Group’s business is subject to a number of risks, including but not limited to risks
relating to our business and industry and the Share Offer. Investors are advised to read
carefully the entire section headed “Risk Factors” of this prospectus. The major risks
relating to our Group include:
/L50188our business is subject to risks associated with operating in a rapidly developing
and competitive industry and our business is highly susceptible to changing
preferences and tastes of audience;
/L50188we experienced decrease in revenue because of the outbreak of COVID-19; any
resurgence thereof or other public health crisis may have a material adverse
impact on our business;
/L50188interests of our Shareholders may be adversely affected in the future due to
potential corporate actions, where the interest of our Controlling Shareholders and
that of the other Shareholders may not align;
/L50188our business depends on our strong brand recognition and any negative publicity
could adversely affect our brand reputation and business; and
/L50188we rely heavily on third-party social media platforms, in particular, Supplier A,
for distribution of our contents and advertisements, any change in third-party
social media platform policy and any decline or termination in the use of
third-party social media platforms may materially affect our operations and
business performance.
DIVIDENDS
Dividends of approximately HK$20.8 million, HK$34.0 million and HK$12.0 million
were declared by our Group for the year ended 31 December 2020, 2021 and 2022
respectively, which had been fully settled. Dividends of approximately HK$10.0 million was
also declared by our Group in March 2023, which had also been fully settled.
The declaration and payment of dividends during the Track Record Period and prior to
the Listing should not be considered as a guarantee or indication that we will declare and
pay dividends in such manner in the future, or will declare and pay any dividends in the
future at all. Currently, our Board has absolute discretion as to whether to recommend any
dividend payment for any financial year end and if any, the amount of dividend and the
means of payment, and we do not have a predetermined dividend distribution ratio. Such
discretion is subject to the applicable laws and regulations including the Cayman Companies
Act and the Articles which also requires the approval of our Shareholders. The amount of
any dividends to be declared and paid in the future will depend on, amongst other things, (i)
general financial conditions; (ii) actual and future operations and liquidity positions; (iii)
future cash requirements and availability; (iv) restrictions on payment of dividends that may
be imposed by our Group’s lenders; (v) general market conditions; and (vi) any other factors
which our Board may deem appropriate at such time.
SUMMARY
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SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
The following is a summary of the consolidated statements of profit or loss and other
comprehensive income during the Track Record Period as derived from the Accountants’
Report, the full text of which is set out in Appendix I to this prospectus. This summary
should be read in conjunction with the aforesaid Accountants’ Report and the section headed
“Financial Information” of this prospectus.
Selected items in our consolidated statements of profit and loss
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Revenue 211,589 245,199 240,678
Government subsidies 15,959 – 5,680
Production costs (47,250) (53,893) (59,522)
Printing costs (8,430) (2,884) (2,982)
Profit before tax 46,696 42,120 46,844
Profit for the year 41,168 33,049 39,431
Non-HKFRS Measure
Non-HKFRS measure is not a standard measure under HKFRSs. We believe the
non-HKFRS measure set out below provides useful information to investors about our
operating performance, and enhances the overall understanding of our past performance and
future prospects in the same manner as our management. We define adjusted net profit
(non-HKFRS measure) as profit for the year adjusted by expenses for the Listing. Given that
Listing expenses were incurred for the purpose of the Share Offer, the adjustment has been
consistently made during the Track Record Period.
The non-HKFRS measure shall not be considered in isolation from, or as substitute for
analysis of, our consolidated statement of profit or loss or financial condition as reported
under HKFRSs. In addition, the non-HKFRS measure may be defined separately from
similar terms used by other companies and therefore may not be comparable to similar
measures presented by other companies.
SUMMARY
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The table below sets forth our adjusted net profit (Non-HKFRS measure) for each
respective years during the Track Record Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Profit for the year 41,168 33,049 39,431
Adjustment for:
Listing expenses – 9,356 4,125
Adjusted net profit
(Non-HKFRS measure) for
the year 41,168 42,405 43,556
Adjusted net profit margin
(Non-HKFRS measure) for
the year 19.5% 17.3% 18.1%
Our adjusted net profit (Non-HKFRS measure) increased by approximately 3.0% from
approximately HK$41.2 million for the year ended 31 December 2020 to approximately
HK$42.4 million for the year ended 31 December 2021, which was mainly attributable to
the combined effect of (i) the increase in our revenue of approximately HK$33.6 million as
businesses and the general public being adapted to the COVID-19 pandemic and, in
particular, our digital advertising income increased by approximately HK$51.6 million for
the year ended 31 December 2021; (ii) the increase in our production costs due to the
increase in our boosting costs and was partly offset by the decrease in our printing costs due
to the cessation of the publication of the weekly 3-in-1 Oriental Sunday Magazine with the
last issue in December 2020; and (iii) the decrease in our other income and gains of
approximately HK$13.0 million, which was mainly attributable to no government subsidy
was received for the year ended 31 December 2021.
Our adjusted net profit (Non-HKFRS measure) increased by approximately HK$1.2
million from approximately HK$42.4 million for the year ended 31 December 2021 to
approximately HK$43.6 million for the year ended 31 December 2022, which was
principally attributable to the combined effect of (i) the decrease in our revenue by
approximately HK$4.5 million for the year ended 31 December 2022; and (ii) the increase in
our production costs, depreciation and amortisation and finance costs of approximately
HK$5.6 million, HK$3.1 million and HK$2.5 million, respectively, which was partly offset
by (i) the decrease in our employee benefit expense of approximately HK$9.9 million for the
year ended 31 December 2022; and (ii) the increase in our other income and gains of
approximately HK$2.9 million, which was partly due to the government subsidies received
for the year ended 31 December 2022.
SUMMARY
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Revenue
Our revenue for the year ended 31 December 2021 increased from approximately
HK$211.6 million to approximately HK$245.2 million comparing to that for the year ended
31 December 2020, which is attributable to the increase in our digital advertising revenue by
approximately 28.6% from approximately HK$180.3 million for the year ended 31 December
2020 to approximately HK$231.9 million for the year ended 31 December 2021, which our
Directors believe was primarily due to the gradual recovery of consumer spending power in
Hong Kong as consumers have adapted to the pandemic environment, which drove the
advertising spending of businesses particularly during the last quarter of 2021.
Our revenue for the year ended 31 December 2022 remained stable as compared to the
year ended 31 December 2021, decreased only by approximately HK$4.5 million, or
approximately 1.8%, from approximately HK$245.2 million for the year ended 31 December
2021 to approximately HK$240.7 million for the year ended 31 December 2022, which is
primarily attributable to the combined effect of (i) the decrease in revenue during the first
quarter of 2022 due to the fifth wave of the COVID-19 pandemic and the consequent
implementation of stringent social distancing measures in the first quarter of 2022, which
weighed heavily on a wide range of economic activities as well as economic sentiment in
Hong Kong which in turn lowered the advertising spending of advertisers and led to an
approximately 6% drop in revenue for the first four months when compared with the
corresponding period in 2021; and (ii) the gradual easing of the fifth wave of the pandemic
from April 2022 and the relaxation of social distancing measures, quarantine measures and
travel-related measures from the last quarter of 2022, which led to the gradual recovery in
the advertising spending and in turn recovery of our revenue in the second half of 2022. For
details, please refer to “Business — Impact of COVID-19” and “Financial Information —
Discussion and Analysis of Results of Operations — Revenue” in this prospectus.
On the other hand, due to the continuous shrank in the print media industry and the
restructuring of our print media business, our circulation revenue and print advertising
revenue experienced a significant drop during the Track Record Period.
Government Subsidies
During the year ended 31 December 2020, we had income of approximately HK$16.0
million being subsidies we received from the Employment Support Scheme under the
anti-epidemic fund from the HKSAR Government, and which represented approximately
7.5% and 38.8% of our revenue and net profit for such financial year respectively. During
the year ended 31 December 2022, we received government subsidies under the Employment
Support Scheme of approximately HK$5.7 million due to the fifth wave of COVID-19
pandemic, which represented approximately 2.4% and 14.4% of our revenue and net profit
for the year ended 31 December 2022 respectively.
SUMMARY
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Net profit
Our net profit decreased by approximately 19.7% from approximately HK$41.2 million
for the year ended 31 December 2020 to approximately HK$33.0 million for the year ended
31 December 2021 and our net profit margin decreased from approximately 19.5% for the
year ended 31 December 2020 to approximately 13.5% for the year ended 31 December
2021. The decrease in net profit and net profit margin was mainly attributable to the Listing
expenses of approximately HK$9.4 million incurred during the year ended 31 December
2021 and absence of the government subsidies received during the year ended 31 December
2020 of approximately HK$16.0 million.
Our net profit increased by approximately 19.3% from approximately HK$33.0 million
for the year ended 31 December 2021 to approximately HK$39.4 million for the year ended
31 December 2022 and our net profit margin increased from approximately 13.5% for the
year ended 31 December 2021 to approximately 16.4% for the year ended 31 December
2022. The increase in net profit and net profit margin was mainly attributable to the
combined impacts of (i) decrease in revenue of approximately HK$4.5 million; (ii)
government subsidies received of approximately HK$5.7 million; (iii) decrease on employee
benefit expense of approximately HK$9.9 million; (iv) increase on production costs of
approximately HK$5.6 million; and (v) decrease in Listing expenses incurred during the year
as compared with the previous year.
Effect of COVID-19
The Track Record Period lied squarely from the onset of the COVID-19 pandemic from
early 2020 to the gradual recovery from the fifth wave towards the end of 2022.
During various phases of the pandemic advertisers’ spending fluctuated. For example
entering into 2021, the general public has gradually adapted to the COVID-19 pandemic and
hence businesses resumed their advertising spendings that were delayed due to the pandemic
to promote business momentum, which attributed to the increase in our digital advertising
revenue for the year ended 31 December 2021 as compared to 2020.
The Company’s business was then affected by the fifth wave outbreak in Hong Kong in
the first quarter of 2022, which weighed heavily on a wide range of economic activities as
well as economic sentiment, recording an approximately 6% drop in revenue for the first
four months of 2022 as compared with that for the same period in 2021. Following the
gradual easing of the fifth wave of pandemic, the Group’s business recovered with the
revenue for May to July 2022 recorded a slight increase of approximately 3% when
compared with the corresponding period in 2021, and our revenue for the year ended 31
December 2022 recovered to similar level as that for the financial year ended 31 December
2021 due to the relaxation of various anti-pandemic measures in the last quarter of 2022 and
exceeded that for the financial year ended 31 December 2020 by approximately 13.7%.
Our management considers the shifting of advertisers’ demands from offline advertising
solutions to online advertising solutions to be one of the major market drivers for the digital
advertising market and our Group’s business will benefit from such change in market
behaviour in the long run. Accordingly, the Directors are of the view that the Group’s
business prospects is promising and the business is sustainable in the foreseeable future.
SUMMARY
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Selected cash flow data from our consolidated statements of cash flows
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Net cash flows from operating activities 40,981 29,989 59,526
Net cash flows used in investing
activities (1,316) (5,119) (21,774)
Net cash flows used in financing
activities (25,344) (32,803) (41,379)
Net increase/(decrease) in cash and cash
equivalents 14,321 (7,933) (3,627)
Cash and cash equivalents at beginning
of year 17,052 31,466 23,525
Effect of foreign exchange rate changes,
net 93 (8) 32
Cash and cash equivalents at end of
year represented by cash and bank
balances 31,466 23,525 19,930
For details, please refer to the section headed “Financial Information – Liquidity and
Capital Resources” of this prospectus.
Selected items in our consolidated statements of financial position
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Non-current assets 23,460 103,788 89,275
Current assets 98,956 112,428 101,344
Current liabilities 52,524 102,932 59,608
Non-current liabilities 14,898 69,249 59,513
Net assets 54,994 44,035 71,498
Net current assets 46,432 9,496 41,736
Our Group’s net assets decreased from approximately HK$55.0 million as at 31
December 2020 to approximately HK$44.0 million as at 31 December 2021 which was
mainly due to the dividend recognised for the year of approximately HK$44.0 million partly
offset by the profit for the year of approximately HK$33.0 million. Despite the dividend
declared of HK$12.0 million for the year ended 31 December 2022, our net assets increased
to approximately HK$71.5 million as at 31 December 2022 mainly due to the
aforementioned profit for the year of approximately HK$39.4 million.
SUMMARY
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Our net current assets decreased from approximately HK$46.4 million as at 31
December 2020 to approximately HK$9.5 million as at 31 December 2021 which was
mainly due to increase in interest-bearing bank and other borrowings and increase in other
payables and accruals arising from the new lease for our new headquarter. Our net current
assets increased from approximately HK$9.5 million as at 31 December 2021 to
approximately HK$41.7 million as at 31 December 2022 which was mainly due to the
decrease in other payables and accruals.
For details, please refer to the section headed “Financial Information – Discussion on
Major Items of the Consolidated Statements of Financial Position” of this prospectus.
Major financial ratios
The following table sets forth certain key financial ratios of our Group during the
Track Record Period:
Y ear ended/As at 31 December
2020 2021 2022
Net profit margin (%) 19.5 13.5 16.4
Return on equity (%) 74.9 75.1 55.1
Return on total assets (%) 33.6 15.3 20.7
Current ratio (times) 1.9 1.1 1.7
Quick ratio (times) 1.9 1.1 1.7
Interest coverage (times) 26.7 14.3 9.3
Gearing ratio (%) 21.5 82.7 31.1
Debt-to-equity ratio (%) N/A 27.5 2.1
Please refer to the section headed “Financial Information – Major Financial Ratios” of
this prospectus for calculation of the above financial ratios.
LISTING EXPENSES
Listing expenses mainly comprise of legal and other professional fees in connection
with the Share Offer. Listing expenses, including underwriting fee for the Share Offer, are
estimated to be approximately HK$37.0 million (comprising (i) underwriting fee of
approximately HK$6.6 million, and (ii) non-underwriting related expenses of approximately
HK$30.4 million, which consist of fees and expenses of legal advisors and Reporting
Accountant of approximately HK$15.2 million and other fees and expenses of approximately
HK$15.2 million), representing approximately 28.0% of the gross proceeds from the Share
Offer (assuming an Offer Price of HK$0.88 per Share, being the mid-point of our indicative
Offer Price range of HK$0.84 to HK$0.92), among which approximately HK$12.9 million is
expected to be recognised as a deduction from equity upon the issuance of the Offer Shares,
and approximately HK$24.1 million is expected to be reflected in our consolidated
statements of profit or loss of which (i) approximately HK$9.4 million have been recognised
for the year ended 31 December 2021; (ii) and approximately HK$4.1 million have been
recognised for the year ended 31 December 2022, and the balance of approximately
SUMMARY
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HK$10.6 million is expected to be recognised subsequent to the Track Record Period. Our
Group’s financial performance and results of operations for the year ending 31 December
2023 will be significantly and adversely affected by the Listing expenses.
Our Directors would like to emphasise that the aforesaid Listing expenses are the
current estimate for reference only and the actual amount to be recognised is subject to
adjustment based on audit and the changes in variables and assumptions.
LATEST DEVELOPMENT SUBSEQUENT TO THE TRACK RECORD PERIOD
Subsequent to the Track Record Period and up to the Latest Practicable Date, save as
disclosed in the paragraphs headed “Listing Expenses” in this section, we did not have any
significant non-recurrent items in our consolidated financial statements. Our Directors also
confirmed that, subsequent to the Track Record Period and up to the Latest Practicable Date,
(i) there was no material adverse change in the market conditions or the industry and
environment in which we operate that materially and adversely affect our financial or
operating position; (ii) there was no material adverse change in the trading and financial
position or prospects of our Group; and (iii) no event occurred that would materially and
adversely affect the information shown in the Accountant’s Report set out in Appendix I to
this prospectus.
Nevertheless, we expect that our net profit for the year ending 31 December 2023 will
drop as compared with that for the year ended 31 December 2022, which is mainly
attributable to the staff costs for developing the APS, PSS and E-Commerce Solution
Platforms in the third and fourth quarters of 2023. For details of such proposed expenses
please refer to the section headed “Future Plans and Use of Proceeds” of this prospectus.
MAJOR SHAREHOLDERS
Immediately following the completion of the Share Offer and the Capitalisation Issue,
NMLG Holdings will hold 315,000,000 Shares, representing 52.5% of the issued shares of
our Company. The entire issued share capital of NMLG Holdings is held by AY Holdings,
which in turn is held by First Trust Services AG as trustee of AY Discretionary Trust. AY
Holdings and First Trust Services AG are deemed to be interested in the same 315,000,000
Shares held by NMLG Holdings under the SFO. Mr. Royce Lee, our CEO, will also remain
a substantial Shareholder immediately following completion of the Share Offer and the
Capitalisation Issue, holding 90,000,000 Shares, representing 15% of the issued Shares of
our Company. Please refer to the section headed “Controlling and Substantial Shareholders”
of this prospectus for details.
Corporate history
New Media Group Holdings Limited was listed on the Main Board on 12 February
2008 with AY Discretionary Trust being interested in 75% of its shareholding. In 2015, AY
Holdings and Evergrande Real Estate Group Limited (“ Evergrande Real Estate ”) entered
into a sale and purchase agreement in relation to the disposal by AY Holdings of its entire
shareholding in New Media Group Holdings Limited and its subsidiaries (including NMG)
to Evergrande Real Estate and AY Holdings acquired 9.99% interests in NMG. Subsequently
SUMMARY
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in 2017, AY Discretionary Trust acquired the other 90.01% interests in NMG which then
became beneficially wholly owned by AY Discretionary Trust. For details of our corporate
history, please refer to the section headed “History and Development – Our history” of this
prospectus, and the potential risk, please refer to “Risk Factors – Risk relating to our
business and industry – Interests of our Shareholders may be adversely affected in the future
due to potential corporate actions, where the interest of our Controlling Shareholders and
that of the other Shareholders may not align”.
OUR STRATEGIES AND REASONS FOR LISTING
The digital advertising market is a fast-changing market with fierce competition. We
believe that being able to identify and capture rising trends in a timely manner is essential
for solidifying and expanding our market share. We aim to sustain our business growth
through both acquisitions of and/or strategic alliances with other market players and organic
expansion in terms of more and better product offerings and services, thereby enhancing our
ability to retain existing clients and attract new advertisers. We believe the Share Offer will
strengthen our financial resources and therefore our ability to implement our strategies for
expansion and sustaining growth. A listed status will also provide us with a platform for
raising further funds in the future should suitable opportunities arise.
We intend to adopt the following business strategies: (i) pursue growth through
acquisitions and/or strategic alliance; (ii) expand our product lines and our client base and
explore opportunities in specific industry verticals; (iii) enhance data collection and
analytical capabilities through the development of e-commerce solution platform; (iv)
unleash our potential by enhancing productivity; and (v) continual investment in
technological infrastructure and recruitment of talent, further details of which are set out in
the section headed “Business – Our Strategies” of this prospectus.
USE OF PROCEEDS
Our future plans and intended use of the net proceeds from the Share Offer are set out
in details under the section headed “Future Plans and Use of Proceeds” of this prospectus
and a summary of which is set out as follows:
– approximately HK$25.0 million, representing approximately 26.3%, of the net
proceeds is expected to be to be applied for mergers and acquisitions and/or
strategic alliances with other media or e-commerce market players to accelerate
our Group’s growth beyond organic;
– as to approximately HK$42.2 million, representing approximately 44.4%, of the
net proceeds is expected to be used for expanding and enhancing our product
lines and our data collection and analytical capabilities, which we believe will
enable us to deepen our penetration into our existing clientele and expanding our
clientele, through launching of the APS Platform, PSS Platform and E-Commerce
Solution Platform;
SUMMARY
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– approximately HK$11.9 million, representing approximately 12.5%, of the net
proceeds is expected to be used for constructing our in-house media content
management platform to enhance our editors’ research capabilities and help
monitoring the performances of our contents qualitatively and quantitatively and
enabling us to be prepared for handling the increasing volume of data along with
the anticipated expansion of our business;
– approximately HK$6.5 million, representing 6.9%, of the net proceeds is expected
to be used for repayment of bank borrowings; and
– approximately HK$9.4 million, representing approximately 9.9%, of the net
proceeds is expected to be used to fund our working capital and for general
corporate purposes.
SHARE OFFER STATISTICS
Based on the Offer Price of
HK$0.84
per Share
HK$0.92
per Share
Market capitalisation
(1) HK$504,000,000 HK$552,000,000
Unaudited pro forma adjusted consolidated net
tangible assets per Share (2) HK$0.29 HK$0.31
Notes:
(1) The calculation of market capitalisation is based on 600,000,000 Shares in issue immediately after
completion of the Capitalisation Issue and the Share Offer.
(2) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at on the basis that
600,000,000 Shares were in issue assuming that the Capitalisation Issue and the Share Offer had been
completed on 31 December 2022. Please refer to “Unaudited Pro Forma Financial Information” in Appendix
II to this prospectus for details regarding the assumptions and the calculation basis used.
SUMMARY
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In this prospectus, unless the context otherwise requires, the following expressions have
the following meanings:
“affiliate(s)” any other person, directly or indirectly, controlling or
controlled by or under direct or indirect common
control with such specified person
“AFRC” the Accounting and Financial Reporting Council of
Hong Kong
“Application Form(s)” PINK application form(s) and GREEN application
form(s) or where the context so requires, any of them
to be used in connection with the Public Offer
“Articles of Association” or
“Articles”
the articles of association of our Company
conditionally adopted on 26 June 2023 which shall
become effective upon commencement of trading of our
Shares on the Stock Exchange, a summary of which is
set out in Appendix III to this prospectus, as amended
from time to time
“associate(s)” has the meaning ascribed thereto under the Listing
Rules
“AY Discretionary Trust” The Albert Y eung Discretionary Trust (of which Dr.
Albert Y eung is the founder and settlor)
“AY Holdings” Albert Y eung Holdings Limited (formerly known as
Million Way Holdings Limited), an investment holding
company incorporated in BVI on 7 December 2007 and
held by First Trust Services AG acting as trustee of AY
Discretionary Trust
“Board” the board of Directors
“Business Day” a day on which banks in Hong Kong are generally
open for normal banking business to the public and
which is not a Saturday, Sunday or public holiday in
Hong Kong
“Business Unit(s)” the business units of our Group, each primarily
responsible for operation of their respective media
brand(s)
“Business Development Team” or
“Revenue Team”
the team of our Group primarily responsible for
strategic development of business and products, which
has been rebranded “Revenue Team” since 1 March
2022
DEFINITIONS
–1 7–


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“BVI” the British Virgin Islands
“Capital Market Intermediaries” the Overall Coordinators, the Joint Bookrunners, the
Joint Coordinators, the Joint Lead Managers, the
Underwriters and other Capital Market Intermediaries
(within the meaning ascribed thereto under the Listing
Rules), participating in the Share Offer
“Capitalisation Issue” the issue of Shares on the Listing Date by way of the
capitalisation of certain sums standing to the credit of
the share premium account of our Company to the
holders of the Shares whose names appear on the
register of members of our Company at the close of
business on the Business Day preceding the Listing
Date in proportion to their then existing respective
shareholdings
“Cayman Companies Act” or
“Companies Act”
the Companies Act (As Revised) of the Cayman Islands
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“CCASS Clearing Participant” a person admitted to participate in CCASS as a direct
clearing participant or general clearing participant
“CCASS Custodian Participant” a person admitted to participate in CCASS as a
custodian participant
“CCASS EIPO” the application for the Public Offer Shares to be issued
in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to the applicant or
a designated CCASS Participant’s stock account
through causing HKSCC Nominees to apply on behalf
of the applicant, including by (i) instructing the
applicant’s broker or custodian who is a CCASS
Clearing Participant or a CCASS Custodian Participant
to give electronic application instructions via CCASS
terminals to apply for the Public Offer Shares on the
applicant’s behalf, or (ii) if the applicant is an existing
CCASS Investor Participant, giving electronic
application instructions through the CCASS Internet
System ( https://ip.ccass.com ) or through the CCASS
Phone System (using the procedures in HKSCC’s “An
Operating Guide for Investor Participants” in effect
from time to time). HKSCC can also input electronic
application instructions for CCASS Investor
Participants through HKSCC’s Customer Service Centre
by completing an input request
DEFINITIONS
–1 8–


--- page 28 ---
“CCASS Investor Participant” a person admitted to participate in CCASS as an
investor participant who may be an individual or joint
individuals or a corporation
“CCASS Participant” a CCASS Clearing Participant, a CCASS Custodian
Participant or a CCASS Investor Participant
“CEO” the chief executive officer of our Group
“COO” the chief operation officer of our Group
“close associate(s)” has the meaning ascribed thereto under the Listing
Rules
“Code of Conduct” the code of conduct for person licensed by or
registered with the SFC
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company” or “our Company” New Media Lab Limited
ʮ̡, a company
incorporated in the Cayman Islands on 22 March 2021
with limited liability
“connected person” has the meaning ascribed to it under the Listing Rules
“connected transaction” has the meaning ascribed to it under the Listing Rules
“Controlling Shareholder(s)” has the meaning ascribed thereto under the Listing
Rules and in the context of this prospectus, includes
NMLG Holdings, AY Holdings, First Trust Services
AG, AY Discretionary Trust, Dr. Albert Y eung or any
one of them
“core connected person” has the meaning ascribed to it under the Listing Rules
“Covenantors” NMLG Holdings, AY Holdings, AY Discretionary Trust
and Dr. Albert Y eung, being the covenantors under the
Underwriting Agreement
“CWUMPO” the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
DEFINITIONS
–1 9–


--- page 29 ---
“Deed of Indemnity” the deed of indemnity dated 26 June 2023 provided by
the Indemnifiers in favour of our Group relating to,
among other matters, the tax liabilities of our Group
“Deed of Non-Competition” the deed of non-competition dated 26 June 2023
provided by the DNC Covenantors in favour of our
Company (for itself and for the benefit of the members
of our Group) relating to certain non-competition
undertakings by the DNC Covenantors
“Director(s)” the director(s) of our Company
“Distributor A” two affiliated companies, being the sole distributors of
our magazines to newsstands and convenience stores in
Hong Kong during the Track Record Period
“Distributor B” sole distributor of the Madame Figaro Magazine and
travel guidebooks published by our Group to primarily
bookstores in Hong Kong during the Track Record
Period
“Distributors” Distributor A and Distributor B
“DNC Covenantors” the Covenantors, and Mr. Royce Lee and Double
Blossoms under the Deed of Non-Competition
“Double Blossoms” Double Blossoms Limited, a company incorporated in
BVI on 8 December 2017 and wholly-owned by Mr.
Royce Lee
“Double Fantastic” Double Fantastic Group Limited, a company
incorporated in BVI on 8 February 2019 and
wholly-owned by Ms. V enus Lee
“Dr. Albert Y eung” Dr. Y eung Sau Shing, Albert
“EIML” Emperor Investment (Management) Limited, a company
incorporated in Hong Kong on 25 October 1990 and
indirectly wholly-owned by Emperor International
“Eligible Employee(s)” all full-time employee(s) of our Group who joined our
Group on or before the Latest Practicable Date who are
not under employment probationary period and have a
Hong Kong address (other than the chief executive or
directors of our Company or its subsidiaries, existing
beneficial owners of Shares or any of their respective
close associates and any other connected persons of our
Company)
DEFINITIONS
–2 0–


--- page 30 ---
“Emperor Capital Group” Emperor Capital Group Limited, an exempted company
incorporated in Bermuda with limited liability on 27
June 2006, the subsidiaries of which are principally
engaged in the provision of financial services in Hong
Kong and whose shares are listed on the Main Board
(Stock Code: 717), and directly owned as to
approximately 42.7% by a wholly-owned subsidiary of
Albert Y eung Capital Holdings Limited which was in
turn held by CDM Trust & Board Services AG in trust
for a private discretionary trust set up by Dr. Albert
Y eung
“Emperor Corporate Finance” Emperor Corporate Finance Limited (formerly known
as Emperor Capital Limited), a company incorporated
in Hong Kong on 28 September 1993, a licensed
corporation to carry on type 1 (dealing in securities)
and type 6 (advising on corporate finance) regulated
activities under the SFO and one of the Joint Sponsors
and one of the Overall Coordinators for the Listing and
an indirect wholly-owned subsidiary of Emperor
Capital Group
“Emperor Culture” Emperor Culture Group Limited (formerly known as
See Corporation Limited), an exempted company
incorporated in Bermuda with limited liability on 27
March 1992, the subsidiaries of which are principally
engaged in entertainment, media and cultural
development businesses and whose shares are listed on
the Main Board (Stock Code: 491), and indirectly
owned as to approximately 73.8% by a wholly-owned
subsidiary of Albert Y eung Entertainment Holdings
Limited which was in turn held by Alto Trust Limited
in trust for a private discretionary trust set up by Dr.
Albert Y eung
“Emperor E Hotel” Emperor Entertainment Hotel Limited, a company
indirectly owned as to approximately 71.6% by
Emperor International, an exempted company
incorporated in Bermuda with limited liability on 1
May 1992, the subsidiaries of which are principally
engaged in provision of entertainment and hospitality
services and whose issued shares are listed on the Main
Board (Stock Code: 296)
DEFINITIONS
–2 1–


--- page 31 ---
“Emperor Group” all companies (including their respective associates)
directly or indirectly controlled by various private
discretionary trusts set up by Dr. Albert Y eung
(including but not limited to listed members of
Emperor Group and non-listed members) other than the
Group, and “member of Emperor Group” shall be
construed accordingly
“Emperor International” Emperor International Holdings Limited, an exempted
company incorporated in Bermuda with limited liability
on 30 August 1991, the subsidiaries of which are
principally engaged in property investment, property
development and hospitality business and whose issued
shares are listed on the Main Board (Stock Code: 163),
and indirectly owned as to approximately 74.7% by a
wholly-owned subsidiary of AY Holdings
“Emperor W&J” Emperor Watch & Jewellery Limited, a company
incorporated in Hong Kong with limited liability on 13
March 2008, the subsidiaries of which are principally
engaged in the sales of watches and jewellery in Hong
Kong, Macau and the PRC and whose issued shares are
listed on the Main Board (Stock Code: 887), and
directly owned as to approximately 63.4% by a
wholly-owned subsidiary of Albert Y eung Watch &
Jewellery Holdings Limited which was in turn held by
First Family Advisors Trust reg. in trust for a private
discretionary trust set up by Dr. Albert Y eung
“Emperor Securities” Emperor Securities Limited, a company incorporated in
Hong Kong on 6 July 1990, a licensed corporation to
carry on type 1 (dealing in securities) and type 4
(advising on securities) regulated activities under the
SFO and an indirect wholly-owned subsidiary of
Emperor Capital Group
“Employee Preferential Offering” the offer of up to 1,500,000 Public Offer Shares to the
Eligible Employees as described in the paragraph
headed “Employee Preferential Offering” under the
section headed “Structure and Conditions of the Share
Offer” in this prospectus
“Employee Reserved Shares” up to 1,500,000 Public Offer Shares (representing 10%
of the Offer Shares available under the Public Offer)
available in the Employee Preferential Offering and
which are to be allocated out of the Public Offer
Shares
DEFINITIONS
–2 2–


--- page 32 ---
“Euromonitor Report” the industry report prepared by Euromonitor
International Limited commissioned by the Company, a
summary of which is set out in the “Industry
Overview” section of this prospectus
“Fast Fame” Fast Fame Limited, a company incorporated in Hong
Kong on 1 June 2018, and an indirect wholly-owned
subsidiary of our Company
“First Trust Services AG” First Trust Services AG, a company incorporated in
Switzerland, the trustee of the AY Discretionary Trust
“First Six-Month Period” the period from the Listing Date up to and including
the date falling six months after the Listing Date
“GAAP” generally accepted accounting principles in Hong Kong,
including Hong Kong Financial Reporting Standards,
Hong Kong Accounting Standards and Interpretations
“GDP” gross domestic product
“GREEN application form(s)” the application form(s) to be completed by the HK
eIPO White Form Service Provider designated by the
Company
“Group”, “our Group”, “we” or
“us”
our Company and our subsidiaries or, where the
context so requires, in respect of the period before our
Company became the holding company of its present
subsidiaries, such subsidiaries as if they were our
Company’s subsidiaries at that time
“Guangdong Xinchuan”
ʮ̡ Guangdong Xinchuan
Network Technology Company Limited* (formerly
known as
ʮ̡ Guangdong
Xinchuan Publishing Technology Development Co
Ltd*), a company established in the PRC on 10
September 2008, and an indirect wholly-owned
subsidiary of our Company
“HIBOR” Hong Kong Interbank Offered Rate
“HK eIPO White Form ” the application for the Public Offer Shares to be issued
in the applicant’s own name by submitting applications
online through the designated website of HK eIPO
White Form Service Provider at www.hkeipo.hk or the
IPO APP
DEFINITIONS
–2 3–


--- page 33 ---
“HK eIPO White Form Service
Provider”
the HK eIPO White Form service provider designated
by our Company, as specified on the designated
website at www.hkeipo.hk or the IPO APP
“HKFRSs” Hong Kong Financial Reporting Standards issued by
the HKICPA
“HKICPA” the Hong Kong Institute of Certified Public
Accountants
“HKSAR Government” or
“Hong Kong Government”
the Government of Hong Kong Special Administrative
Region
“HKSCC” Hong Kong Securities Clearing Company Limited
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“Hong Kong”, “HKSAR” or
“HK”
the Hong Kong Special Administrative Region of the
PRC
“Hong Kong Share Registrar” Tricor Secretaries Limited, the branch share registrar of
our Company in Hong Kong
“Indemnifiers” the Covenantors, First Trust Services AG, Mr. Royce
Lee and Double Blossoms, being the indemnifiers
pursuant to the Deed of Indemnity
“Independent Third Party(ies)” person(s) or company(ies) which is/are independent of
and not connected with any members of our Group, the
directors, chief executive or substantial Shareholders
(as defined in the Listing Rules) of our Company and
its subsidiaries and any of their respective associates
“Issue Mandate” as defined in the paragraph headed “Written resolutions
of the Shareholders passed on 26 June 2023” in
Appendix IV to this prospectus
”IPO App” the mobile application for HK eIPO White Form
service which can be downloaded by searching “ IPO
App” in App Store or Google Play or downloaded at
www.hkeipo.hk/IPOApp or www.tricorglobal.com/
IPOApp
“Joint Coordinators”,
“Joint Bookrunners” or
“Joint Lead Managers”
the joint coordinators, the joint bookrunners and the
joint lead managers as named in “Directors and Parties
Involved in the Share Offer” in this prospectus
DEFINITIONS
–2 4–


--- page 34 ---
“Joint Sponsors” together (i) Lego Corporate Finance Limited, a
corporation licensed by the SFC to carry out type 6
(advising on corporate finance) regulated activity under
the SFO; and (ii) Emperor Corporate Finance
“Latest Practicable Date” 21 June 2023, being the latest practicable date prior to
the printing of this prospectus for the purpose of
ascertaining certain information contained herein
“Listing” the listing of the Shares on the Main Board
“Listing Committee” the listing sub-committee of the board of directors of
the Stock Exchange
“Listing Date” the date on which dealings in the Shares first
commence on the Stock Exchange, expected to be on
or about 17 July 2023
“Listing Rules” the Rules Governing the Listing of Securities on the
Stock Exchange, as amended from time to time
“Macau” the Macau Special Administrative Region of the PRC
“Main Board” the stock exchange (excluding the option market)
operated by the Stock Exchange which is independent
from and operated in parallel with GEM of the Stock
Exchange
“Media Publishing” Media Publishing Limited
ʮ̡(formerly
known as Pacific Globe Limited and New Media Group
(HK) Limited), a company incorporated in Hong Kong
on 18 February 2000 and an indirect wholly-owned
subsidiary of our Company
“Memorandum of Association” or
“Memorandum”
the memorandum of association of our Company
conditionally adopted on 26 June 2023 which shall
become effective on the Listing Date, a summary of
which is set out in Appendix III to this prospectus, as
amended from time to time
“Mr. Royce Lee” Mr. Lee Y at Pui, Royce
ҽɓ੃, an executive Director
and our CEO and the sole shareholder of Double
Blossoms
“Ms. Esther Cheung” Ms. Cheung Wai Y u
ੵᅆন, our COO
DEFINITIONS
–2 5–


--- page 35 ---
“Ms. V enus Lee” Ms. Lee Lan Kiu ҽᚆᄮ, the sole shareholder of
Double Fantastic and managing director of one of the
Business Units
“New Monday Publishing” New Monday Publishing Limited (formerly known as
Wide Connection Limited), a company incorporated in
Hong Kong on 17 December 1999 and an indirect
wholly-owned subsidiary of our Company
“NMG” New Media Group Limited
ʮ̡
(formerly known as Merslake Limited and New Media
Enterprise Investment Limited), a company
incorporated in BVI on 15 August 2007 and
wholly-owned by our Company
“NMG Digital” New Media Group Digital Services Limited
อෂదᅰᇁ
ʮ̡ (formerly known as Lightwell Limited
and Hong Kong Media Services Company Limited), a
company incorporated in Hong Kong on 4 July 1997
and an indirect wholly-owned subsidiary of our
Company
“NMG (HK)” NMG (Hong Kong) Company Limited (formerly known
as Sheen Aim Limited), a company incorporated in
Hong Kong on 5 June 2019 and an indirect
wholly-owned subsidiary of our Company
“NMG Investment” New Media Group Investment Limited
อෂదණྠҳ༟
ʮ̡(formerly known as Rawlings Limited), a
company incorporated in Anguilla on 13 October 2014
and wholly-owned by AY Holdings
“NMG Publishing” New Media Group Publishing Limited
ࠢ
ʮ̡ (formerly known as Honvest Market Research
Limited, Economic Digest Publications Limited̈
ʮ̡, Economic Digest Publications Limited ຾᏶
ʮ̡, New Media Group (HK) Limited,
Silver Road Investments Limited and World Sources
(HK) Limited), a company incorporated in Hong Kong
on 14 July 1981 and an indirect wholly-owned
subsidiary of our Company
“NMG Tower” the 10-storey building located at No. 82 Hung To Road,
Kowloon, Hong Kong now known as Store Friendly
Tower with occupied site area of approximately 10,000
sq. ft. and gross area of approximately 89,500 sq. ft.
DEFINITIONS
–2 6–


--- page 36 ---
“NMLG Holdings” New Media Lab Group Holdings Limited, a company
incorporated in BVI on 10 March 2021 and a direct
wholly-owned subsidiary of AY Holdings
“NM Services Consultant” New Media Services Consultant Company Limited
อ
ʮ̡ (formerly known as Sunpark
Limited, eDaily Publishing Limited and Economic
Digest Publishing Limited), a company incorporated in
Hong Kong on 14 April 2000 and an indirect
wholly-owned subsidiary of our Company
“Offer Price” the final price per Offer Share in Hong Kong dollars
(exclusive of brokerage fee, Stock Exchange trading
fee, SFC transaction levy and AFRC transaction levy)
at which the Offer Shares are to be subscribed under
the Share Offer
“Offer Shares” together the Public Offer Shares and the Placing Shares
“Overall Coordinators” the overall coordinators as named in the section headed
“Directors and Parties involved in the Share Offer” in
this prospectus
“PINK application form(s)” the application form(s) to be completed by Eligible
Employees
“Placing” the conditional placing of the Placing Shares at the
Offer Price, to selected professional, institutional and
other investors, on and subject to the terms and
conditions stated in this prospectus
“Placing Shares” 135,000,000 new Shares initially offered for
subscription under the Placing subject to re-allocation
as described in the section headed “Structure and
Conditions of the Share Offer” in this prospectus
“Placing Underwriters” the underwriters of the Placing listed in the section
headed “Underwriting – Placing Underwriters” in this
prospectus
“Platform Team” the team of our Group primarily responsible for
monitoring activities and analyzing audience behaviour
on our Digital Media Platforms operated by the Group
“PRC” or “China” the People’s Republic of China which, for the purpose
of this prospectus (unless otherwise specified),
excludes Hong Kong, Macau and Taiwan
DEFINITIONS
–2 7–


--- page 37 ---
“Price Determination Agreement” the agreement to be entered into between our Company
and the Overall Coordinators (for themselves and on
behalf of the Underwriters) on the Price Determination
Date to record and fix the Offer Price
“Price Determination Date” the date, expected to be on or around Friday, 7 July
2023, on which the Offer Price is fixed for the purpose
of the Share Offer
“Principal Share Registrar” Conyers Trust Company (Cayman) Limited
“Public Offer” the offer of Public Offer Shares for subscription by the
public in Hong Kong for cash at the Offer Price, on
and subject to the terms and conditions described in the
sections headed “Structure and Conditions of the Share
Offer” in this prospectus, and for the avoidance of
doubt, includes the Employee Preferential Offering
“Public Offer Shares” 15,000,000 new Shares initially being offered for
subscription under the Public Offer subject to
re-allocation as described in the section headed
“Structure and Conditions of the Share Offer” in this
prospectus, including the Public Offer Shares which are
available for subscription by the Eligible Employees
pursuant to the Employee Preferential Offering
“Public Offer Underwriters” the underwriters of the Public Offer listed in the
section headed “Underwriting – Public Offer
Underwriters” in this prospectus
“Reach Gain” Reach Gain Limited
ʮ̡, a company
incorporated in Hong Kong on 26 May 2010 and an
indirect wholly-owned subsidiary of our Company
“Reorganisation” the corporate reorganisation of the companies
undergone by our Group in preparation for the Listing
as set out in the section headed “History,
Reorganisation and Corporate Structure –
Reorganisation” in this prospectus
“Repurchase Mandate” as defined in the paragraph headed “Written resolutions
of the Shareholders on 26 June 2023” in Appendix IV
in this prospectus
“Second Six-Month Period” the six-month period immediately following the expiry
of the First Six-Month Period
“SFC” Securities and Futures Commission of Hong Kong
DEFINITIONS
–2 8–


--- page 38 ---
“SFO” Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Share(s)” ordinary share(s) of our Company
“Shareholder(s)” the holder(s) of issued Share(s)
“Share Offer” the Public Offer and the Placing
“Share Option Scheme” the share option scheme conditionally approved and
adopted by our Company on 26 June 2023, the
principal terms of which are summarised in the
paragraph headed “Share Option Scheme” in Appendix
IV to this prospectus
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“substantial shareholder” has the meaning ascribed to it in the Listing Rules
“Supplier A” and “Client E” Meta Platform Ireland Limited**, a company
incorporated in Ireland with limited liability, which
operates the social media platforms Facebook and
Instagram
“Time Y ear” Time Y ear Limited
ʮ̡, a company
incorporated in Hong Kong on 3 November 2000 and
an indirect wholly-owned subsidiary of our Company
“Track Record Period” the period comprising the three consecutive financial
years ended 31 December 2020, 2021 and 2022
“Ulferts” Ulferts International Limited, a company incorporated
in Hong Kong with limited liability on 27 June 2012,
the subsidiaries of which are principally engaged in the
retail of high quality home furniture mainly imported
from Europe and whose issued shares are listed on the
Main Board (Stock Code: 1711), and directly owned as
to 75.0% by a wholly-owned subsidiary of Albert
Y eung Investments Holdings Limited which was in turn
held by First Trust Management AG in trust for a
private discretionary trust set up by Dr. Albert Y eung
“Underwriters” the Public Offer Underwriters and the Placing
Underwriters
DEFINITIONS
–2 9–


--- page 39 ---
“Underwriting Agreement” the conditional underwriting agreement dated 29 June
2023 entered into between our Company, our executive
Directors, the Covenantors, the Joint Sponsors, the
Overall Coordinators, the Joint Coordinators and the
Underwriters relating to the Share Offer, particulars of
which are summarised in the section headed
“Underwriting” in this prospectus
“U.S. Securities Act” the United States Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“Winning Treasure” Winning Treasure Limited
ʮ̡, a company
incorporated in Hong Kong on 9 September 2010 and
an indirect wholly-owned subsidiary of Emperor
International up to 21 April 2021 and thereafter an
Independent Third Party
“WW Publishing” Weekend Weekly Publishing Limited
ʮ
̡ (formerly known as Smart Ideal Limited), a
company incorporated in Hong Kong on 7 May 1999
and an indirect wholly-owned subsidiary of our
Company
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“RMB” Renminbi, the lawful currency of the PRC
“US” United States of America
“US$” United States dollars, the lawful currency of the US
“sq.ft.” and “sq.m.” square foot(feet) and square metre(s), respectively
“%” per cent.
In this prospectus:
* The English names of the PRC nationals, enterprises, entities, departments, facilities,
certificates, regulations, titles and the like are translation and/or transliteration of
their Chinese names and are included for identification purposes only. In the event of
inconsistency between the Chinese names and their English translations and/or
transliterations, the Chinese names shall prevail.
** The references of Meta Platform Ireland Limited, Facebook and Instagram in this
prospectus does not amount to any partnership, sponsorship and endorsement from
Meta Platform Ireland Limited, Facebook and Instagram; and our Group does not own
any intellectual property rights associated with the respective tradenames/logos of
Meta Platform Ireland Limited, Facebook or Instagram referred to in this prospectus.
DEFINITIONS
–3 0–


--- page 40 ---
Certain amounts and percentage figures included in this prospectus have been subject
to rounding adjustments. Accordingly, figures shown as totals in certain tables may be an
arithmetic aggregation of the figures preceding them.
The English language version of this prospectus has been translated into the Chinese
language. If there should be any inconsistency between the English and Chinese versions,
the English version shall prevail.
DEFINITIONS
–3 1–


--- page 41 ---
This glossary contains definitions of certain terms used in this prospectus in
connection with our Group and our business. These terms and their definitions may not
correspond to meanings or usage of these terms as used by others or standard industry
definitions.
“3-in-1 Oriental Sunday
Magazine”
˙อή, a weekly Chinese language magazine
published by our Group combined with two other
magazines, Weekend Weekly magazine and New
Monday magazine
“4A” the Association of Accredited Advertising Agencies of
Hong Kong
“advertisement inventory(ies)” the number of advertisement or amount of
advertisement space available for sale to advertisers
“advertiser(s)” a person(s), company(ies) or organisation(s) which
place(s) advertisements or deploy(s) marketing
strategies to promote its (their) brand(s), product(s) or
service(s)
“advertorial” advertisement giving information about a product or
service in the form of an editorial or objective
journalistic article
“app(s)” software application(s) that can be downloaded and
operated on computing devices, including mobile
devices such as mobile phones and tablet computers
“AI” artificial intelligence
“APS Platform” the advertisement placement platform for SMEs which
our Group plans to develop by using part of the
proceeds from the Share Offer
“banner” an advertisement displayed on a webpage, the clicking
of which navigates the audience to the advertiser’s
website
“CAGR” compound annual growth rate
“content pillar” a subset of topics or themes which create the
foundation for the overall content
GLOSSARY OF TECHNICAL TERMS
–3 2–


--- page 42 ---
“conversion rate” the ratio of internet users who take a desired action by
the advertiser, such as signing up a new account or
making a purchase, to the number of total internet
users who viewed or clicked the advertisement
“CPM” cost per thousand, a price determination method for
online advertising service in which the advertising fee
is calculated on the basis of thousand impressions
achieved by the advertisement
“Digital Media Platforms” digital platforms that our media brands operate on
including (i) third party social media platforms, and (ii)
our own websites and apps
“Economic Digest Magazine”
຾᏶ɓ඄, a weekly Chinese language magazine
published by our Group.
“eDM” electronic direct mail
“ESG” environmental, social and corporate governance
“impression” a count for the number of times an online
advertisement is loaded on a webpage or app page
“Madame Figaro Magazine” Madame Figaro Hong Kong, a quarterly Chinese
language magazine published by our Group
“MPVs” monthly page views, being the number of times a
website is being viewed in a month
“MUVs” monthly unique visitors, the number of individual users
accessing a website in a month, such number of
individual users may duplicate if they visit the website
through different IP addresses
“newsfeed” a screen that updates often to show the latest
information in social media platforms or websites
“page break” the point where a webpage ends and a new page
begins, when the end of the current page is reached, a
new page may load automatically or to click a button
manually to load the next page
“PSS Platform” the personal smart spending platform which our Group
plans to develop by using part of the proceeds from the
Share Offer
GLOSSARY OF TECHNICAL TERMS
–3 3–


--- page 43 ---
“Repeat Clients” clients who have been a client of our Group prior to
either the commencement of the Track Record Period
or where applicable, the commencement of the relevant
financial year
“SEO” search engine optimisation, methods for increasing the
chances that a website or page will receive higher
ranking on search engine results pages, usually done by
editing the content of the website to increase its
relevance to specific popular keywords
“SME(s)” small and medium enterprise(s)
“SSP(s)” supply side platform(s)
“text link” hyperlinked brief text description, the clicking of which
navigates the audience to the advertiser’s website
“traffic” in terms of traffic in digital advertising, the flow of
advertisement audience on the digital media
“UX” user experience
“Weekend Weekly x GOtrip
Magazine”
Weekend Weekly X GOtrip, a quarterly Chinese
language magazine published by our Group
GLOSSARY OF TECHNICAL TERMS
–3 4–


--- page 44 ---
This prospectus contains forward-looking statements that are, by their nature, subject to
significant risks and uncertainties. These forward-looking statements include, without
limitation, statements relating to:
 our goals and strategies and our various measures to implement such strategies;
 our capital expenditure plans;
 our operations and business prospects, including our development plans for our
businesses and future expansions;
 our financial condition and results of operations;
 changes in economic conditions and competition in Hong Kong and the world in
general;
 future developments and competitive environment for the media advertising
industry.
The words “aim”, “anticipate”, “believe”, “continue”, “could”, “desire”, “expect”,
“estimate”, “future”, “intend”, “may”, “ought to”, “plan”, “potential”, “predict”, “project”,
“seek”, “should”, “will”, “would” and the negatives of these terms and similar expressions,
as they relate to us, are intended to identify a number of these forward-looking statements.
These forward-looking statements reflect our current views with respect to future events and
are not a guarantee of future performance and are subject to risks, uncertainties and
assumptions, including the risk factors as disclosed in this prospectus. Should one or more
of the risks or uncertainties materialise, or should underlying assumptions prove to be
incorrect, our financial condition may be adversely affected and may vary materially from
those described herein as anticipated, believed, estimated or expected.
Accordingly, the statements herein are not a guarantee of our future performance and
you should not place undue reliance on such forward-looking information. We undertake no
obligation to publicly update or revise any forward-looking statements contained in this
prospectus, whether as a result of new information, future events or otherwise, except as
required by applicable laws, rules and regulations. All forward-looking statements contained
in this prospectus are qualified by reference to this cautionary statement.
FORW ARD-LOOKING STATEMENTS
–3 5–


--- page 45 ---
Potential investors should consider carefully all the information set out in this
prospectus and, in particular , should evaluate the following risks and uncertainties
associated with an investment in our Company before making any investment decision in
relation to the Offer Shares. Our business, financial condition or results of operations
may be adversely affected by any of such risk factors. In such circumstances, the market
price of the Shares could decline and you may lose all or part of your investment.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our business is subject to risks associated with operating in a rapidly developing and
competitive industry and our business is highly susceptible to changing preferences and
tastes of audience
The digital advertising industry is a fast-growing industry that is constantly evolving
and is highly fragmented and dependent on audience preference. A predominant portion of
our revenue is generated through our digital advertising business. As such, our future
success largely depends on our ability to constantly generate engaging digital contents for
our audience, thus to attract traffic to our Digital Media Platforms. Internet users are
however highly sensitive to the timing and the execution of the provision of contents, and
whether or not the contents provided are within the scope of their preference.
Under current regulatory requirements, the threshold to enter into the digital advertising
market in Hong Kong is relatively low and we face fierce competition from various types of
advertisers including traditional publishers, online content creators or even influencers on
various social media platforms. Our Group’s existing competitors may gain competitive
advantage over us via greater market recognition that may enable them to erode our market
share. It is also possible that potential competitors may emerge and disrupt the current
dynamics of the industry. Furthermore, new marketing media or channels and the
introduction of new technology such as AI-content generation may threaten to compete with
us, resulting in reduced demand for our services, thereby adversely affecting our business
prospects.
Failure to adapt to operating in such highly competitive and rapidly evolving
environment may result in reduced revenue and/or loss of our market share that would
adversely and materially affect our business and financial performance. If we fail to catch up
with the market trend or generate quality contents, our audience may quickly lose interest in
our Group’s platforms, switch to platforms offered by our competitors and may be reluctant
to revisit our platforms again.
We experienced decrease in revenue because of the outbreak of COVID-19, any
resurgence thereof or other public health crisis may have a material adverse impact on
our business
The global outbreak of the virus has resulted in lockdowns, quarantines, travel
restrictions and social distancing measures being implemented by the HKSAR Government.
According to the Euromonitor Report, there has been reduced demand for advertising
spending as businesses in Hong Kong need to reduce unnecessary spending to cope with the
adverse impact brought by the worsening economic and business environment caused by the
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COVID-19 pandemic in order to refine their advertising strategy for a more cost-effective
solution, leading to delay to the overall advertising spending in 2020, resulting in a 15.5%
decrease in online advertising market in 2020 as well as a 35.6% decrease in print
advertising market in 2020.
Following the end of the fourth wave outbreak of the pandemic in Hong Kong in mid
2021, there has been relaxation of the social distancing and other restrictive measures in
Hong Kong during the latter half of 2021. However, since late November 2021, COVID-19
with Omicron variant has been rapidly spreading across the globe and causing the fifth wave
outbreak of the pandemic in Hong Kong since January 2022. Our Group’s revenue for the
first four months of 2022 experienced an approximately 6% drop in revenue as compared
with the corresponding period in 2021. We cannot therefore foretell whether there will be
any resurgence of the COVID-19 pandemic or any outbreak of other public health crisis
which is beyond our control. If such event shall occur, demand for media advertising
services and budget of advertisers may decrease, thereby negatively affect our business,
operations and financial condition.
For more details on the impact of COVID-19 on our business, please refer to the
section headed “Business – Impact of COVID-19” of this prospectus.
Interests of our Shareholders may be adversely affected in the future due to potential
corporate actions, where the interest of our Controlling Shareholders and that of the
other Shareholders may not align
As disclosed in the section headed “History and Development- Our history” of this
prospectus, there has been various transactions resulting in change in controlling shareholder
(as such term is defined under the Listing Rules) of some of our existing subsidiaries prior
to the Track Record Period. The first operating company of our Group, WW Publishing, was
established under Emperor International, a listed company which was then controlled by Dr.
Albert Y eung, in 1999. Then in 2006 seven of our existing subsidiaries (together with
various other businesses) became privatised and wholly-owned by AY Discretionary Trust,
and in 2008, these seven subsidiaries became subsidiaries of New Media Group Holdings
Limited which became listed on the Main Board in 2008 with AY Discretionary Trust being
interested in 75% of its shareholding. In 2015, AY Holdings disposed of its entire
shareholding in New Media Group Holdings Limited (including NMG) to Evergrande Real
Estate but at the same time AY Discretionary Trust acquired 9.99% interests in NMG and in
2017 AY Discretionary Trust acquired the other 90.01% interests in NMG which then
became beneficially wholly owned by AY Discretionary Trust.
As our Controlling Shareholders retain substantial control over our Company after
Listing, there is no assurance whether there will be any corporate actions regarding our
business, such as disposal of our subsidiaries or any one or more of them after Listing. Also,
there is no assurance whether or not our Controlling Shareholders will dispose of their
Shares following the expiration of the applicable lock-up periods after Listing. Any such
corporate action may adversely affect the prevailing market price of our Shares and/or other
interest of our Shareholders.
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We received subsidies from the HKSAR Government during the year ended 31
December 2020 and 2022 which may not be recurring
During the year ended 31 December 2020, we received approximately HK$16.0 million
from the Employment Support Scheme under the anti-epidemic fund from the HKSAR
Government, which accounted for approximately 7.5% and 38.8% of our revenue and net
profit for the year ended 31 December 2020. During the year ended 31 December 2022, we
received government subsidies under the Employment Support Scheme of approximately
HK$5.7 million, representing approximately 2.4% and 14.4% of our revenue and net profit
for such year. Please refer to the section headed “Financial Information – Discussion and
Analysis on Principal Items in the Consolidated Statements of Profit or Loss and Other
Comprehensive Income – Other income and gains” in this prospectus. Each of such income
may not be recurring. As such, we may not be able to maintain the same level of income or
net profit in future financial years.
Our business mainly operates in Hong Kong and any adverse economic, social and/or
political development affecting the market may have a material adverse impact to our
operations
During the Track Record Period and up to the Latest Practicable Date, our business
operation and revenue stream were mainly based in Hong Kong. Our Directors anticipate
that Hong Kong will continue to be the principal place of business of the Group. Our
business and financial performance is therefore heavily dependent on a stable economic,
social and/or political development in Hong Kong. Our business is vulnerable to any adverse
events such as economic recession, extensive social unrest, civil disturbance or disobedience
that may cause devastating effect and/or cast uncertainty over the general stability or
prospect of the business environment in Hong Kong. In the unfortunate event if such adverse
event takes place in Hong Kong, it would render material adverse effect on our business and
financial performance.
For example, the social unrest in Hong Kong which started in the second half of 2019
distracted the attention of general public and was detrimental to the effectiveness of
advertising campaigns targeting the Hong Kong market and in turn led to conservative
spending of Hong Kong businesses on their advertising budgets. We cannot predict the
occurrence or duration of any social movement in Hong Kong. Occurrence of such
movement may worsen the economic, political and social circumstances in Hong Kong such
that advertisers may not be willing to allocate their budget on marketing and advertisements,
thereby rendering material adverse effect on our business and financial performance.
We rely heavily on third-party social media platforms for distribution of our contents,
any change in third-party social media platform policy and any decline or termination
in the use of third-party social media platforms may materially affect our operations
and business performance
During the Track Record Period, most of our contents are distributed through third
party social media platforms. The traffic on the third-party social media platforms will
re-direct the followers to our websites via the hyperlinks on the third-party social media
platforms, hence creating advertising opportunities on the websites and mobile apps of our
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Group. Our digital advertising business heavily relies on third-party social media platforms
not only in the exposure they provided for our contents and advertisements, but also to
enhance user engagement and facilitate interactions between our advertisers and their target
audience, which in turn enables us to deliver effective advertising solutions.
Any change in the third-party social media platforms’ policy for their algorithm of
distributing our contents to followers on such platforms may reduce viewership, thereby
undermining our reach to audience, who in turn are ultimate consumers of our advertisers’
products and services. For example, in January 2018, Facebook announced the change in
order of the newsfeed settings which will essentially prioritise posts that promote social
interactions rather than posts that are commercial in nature. More recently, Apple and
Google adapted their privacy policies in response to growing concern over personal privacy
and users may opt out of behaviour tracking. We cannot foretell whether there will be any
further change or reinforcement of such policy from Facebook, Apple and/or Google, or
other similar policy will be implemented on other third-party social media platforms that our
Group operates through. If we fail to adjust and/or underestimate the effect of any further
policy change from such third-party social media platforms, our operations and business
performance may be materially adversely affected.
Any decline in use by our target audience of the third party social media platforms
through which our Group operates may also materially adversely affect our business. Such
decline could be caused by competition among different social media platforms and/or loss
in users of such third-party social media platforms for various reasons such as policy
change, changes in user privacy settings, control of published contents or the general users’
experience. For instance, according to the Euromonitor Report, the decrease of AAMU of
Facebook in Hong Kong in 2022 can be most directly attributed to data breach incident in
2021 and Facebook faced criticism for not taking adequate actions to prevent the apps from
accessing user data, which had a negative impact on overall user confidence. If our target
audience migrate away from the third-party social media platforms that our Group operates
through, and our Group fails to adapt to audience preference and expand or diversify our
digital distribution channels, we may lose viewership which in turn will materially adversely
affect our business and financial performance.
Furthermore, we are subject to the terms and conditions as well as policies laid down
by the third-party social media platforms through which our Group operates. If those
platforms determine that the content we posted have violated their terms and conditions or
policies, they may remove or restrict access to the content in question or even suspend or
terminate our access to their services, which will cause substantial damage on our business
and reputation among our current and potential clients. The number of followers and
audience we could reach and redirect to our websites may also decrease significantly as a
result of any temporary or permanent termination of our account, leading to loss in
popularity and viewership which in turn will materially adversely affect our business
performance.
Also, in the event of any cessation of operations of such third-party social media
platform in Hong Kong, our audience will migrate to other social media platforms and
clients of our advertising solutions will also seek to conduct their advertising campaigns on
other social media platforms that can engage with their target customers. If we fail to
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establish our presence on other third party social media platforms, or our audience profile on
such other third party social media platforms fail to match with the target customers of our
clients’ products and services, our Group’s business operations and financial performance
would be materially adversely affected.
We rely on Supplier A, which operates an online social networking platform, to provide
us with boosting services for online marketing solutions and Supplier A became one of
the top five clients of our Group for the financial years ended 31 December 2021 and
2022. Any alteration in terms or termination of such services by Supplier A may have
significant negative impact on our business operation and financial position.
As mentioned in preceding paragraph, we rely heavily on third-party social media
platforms for distribution of our contents. In particular, we rely on Supplier A, which
operates an online social networking platform, for boosting services for our online
advertising solutions with contents distributed on its platforms. The costs we paid to them
for the three financial years ended 31 December 2020, 2021 and 2022 were approximately
HK$29.2 million, HK$35.5 million and HK$31.7 million respectively, representing
approximately 52.5%, 62.6% and 50.8% of the total production and printing costs of our
Group for the respective year.
According to the Euromonitor Report, Supplier A remains one of the most influential
platforms in Hong Kong. As our business model highly relies on the traffic and exposure of
our contents on our Digital Media Platforms operated on the social media sites of Supplier
A, it is unlikely that our demand for the boosting services from Supplier A will be shifted to
other social media platforms. Our advertising revenue derived from our operation on the
social media sites of Supplier A amounted to approximately 67%, 68% and 62% of our total
advertising revenue for the three years ended 31 December 2022 respectively.
We have not entered into any service agreement with Supplier A in relation to the
provision of such boosting service. In the event that Supplier A ceases to offer such service
to us on comparable price or scope or at all, the exposure of our online advertising solutions
may drop significantly and may not be able to reach the advertiser’s desired amount of
intended target audience, thereby reducing the effectiveness of our advertising solutions.
This may, in the long run, deter us from retaining existing clients and attracting new clients
and therefore be detrimental to our business operation and financial performance.
At the same time, we generated programmatic revenue by posting on social media
platforms of Supplier A which amounted to approximately HK$8.4 million, HK$19.0 million
and HK$19.2 million during the three financial years ended 31 December 2020, 2021 and
2022, representing approximately 4.4%, 7.8% and 8.0% of our total advertising revenue for
the corresponding year. Supplier A became one of the top five clients of our Group for the
years ended 31 December 2021 and 2022.
Our Group’s entitlement of programmatic revenue generated from Supplier A ’s social
media platforms is regulated by their standard terms and conditions which our Group is
deemed to have accepted upon establishing our business accounts with Supplier A.
According to such standard terms and conditions, our Group is entitled to a percentage of
the net revenue actually collected by Supplier A from advertisers for advertisements being
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displayed over contents of our Group that are published on Supplier A ’s social media
platforms, which percentage is to be decided by Supplier A at its sole discretion.
Furthermore, the programmatic revenue generated from Supplier A also depends on the
popularity of its platforms to advertisers. This relationship is driven by market demand and
popularity of Supplier A, and may shift to or be substituted by other digital media platforms
which gain popularity and attract audience. As such, the programmatic revenue which we are
able to generate from Supplier A ’s social media platforms will be affected if the popularity
of Supplier A ’s social media platforms declines. If programmatic revenue generated from
social media platform of Supplier A substantially decreases, the performance and results of
our operation may be adversely effected.
Our business depends on our strong brand recognition and any negative publicity could
adversely affect our brand reputation and business
We believe our strong brand recognition is one of the keys to our success in solidifying
the leading position in our viewership and reputation in the digital advertising industry and
that the maintenance and enhancement of our brand image is critical to our Group’s business
growth.
Our brand image may be adversely affected if our reputation is tarnished or defamed
by any negative publicity, which in turn may significantly and adversely impact our
reputation and popularity and thereby lead to drop in our viewership and market shares.
If we are unable to maintain, protect or enhance our brand image against negative
publicity, this could pose a material and adverse effect on our business, results of operations
and prospects.
We are generally engaged by clients on a project-by-project basis and we may not be
able to retain them
Our clients generally engage our services on a project-by-project basis and enter into
contracts with us for individual campaigns as and when the need arises. Our business
prospect depends on our ability to maintain the relationship with our existing clients. There
is no guarantee that clients who engage us before will engage us in the future and our
revenue may fluctuate depending on the engagements that we are able to secure for the
relevant period.
We believe our ability to maintain constant engagement from our clients is largely
dependent on our business relationships with them via providing a wide range of advertising
solutions that can achieve their business objectives. We have a dedicated in-house Platform
Team that analyses audience behaviour on our Digital Media Platforms which allow us to
gain insights to serve our clients’ needs and objectives. However, if our advertising solutions
fail to achieve our clients’ objectives or deviate from their expectations, they may lose trust
in us, which in turn may deter them from engaging us again and opt for our competitors
instead. Even if our services and products fulfil our clients’ objectives or expectations, they
may still relocate their advertising budget away from us due to budget constraints. If we fail
to retain current clients and attract new clients, our business and financial performance
would be materially and adversely affected.
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We derived a significant portion of our revenue from some major clients
For each of the three years ended 31 December 2022, the total revenue derived from
our top five clients accounted for approximately 48.1%, 45.6% and 41.7% respectively of
our revenue and the largest client accounted for approximately 13.7%, 14.2% and 10.0% of
our revenue for the respective year. There is no assurance that we could continue the
business relationship with these clients, or these clients would require services, or the same
amount of services, from us in future. If we are unable to maintain business relationship
with these clients, or services these clients require substantially decrease, the performance
and results of our operation may be materially and adversely affected.
Our business operation is exposed to credit risk and timing mismatch between receipt
of payments from clients and payments to suppliers, and any material payment delays
or defaults by our clients may adversely affect our cashflow and financial position
Credit terms offered to our clients vary on case-by-case basis. For most of the cases we
do not require any payment of deposit or upfront payment from our clients, which our
Directors believe is in line with industry practice. Meanwhile, the credit term offered by our
suppliers to us are generally shorter, leading to timing mismatch between receipt of
payments from our clients and payments to our suppliers. For each of the three years ended
31 December 2022, our trade payables turnover days were approximately 53.6 days, 43.3
days and 33.7 days respectively, while our trade receivables turnover days for the relevant
period were approximately 124.3 days, 113.3 days and 122.4 days respectively. Such timing
mismatch exposes our business operation to credit risk that could adversely affect our cash
flow and profitability in the event of any material payment delay or default by our clients.
As at 31 December 2020, 2021 and 2022, our trade receivables which were past due based
on the invoice date and net of loss allowance amounted to approximately HK$63.4 million,
HK$78.8 million and HK$71.5 million, respectively, with the gross trade receivables
amounted to approximately HK$67.4 million, HK$84.9 million and HK$76.6 million, and
the impairment losses on trade receivables amounted to HK$4.0 million, HK$6.1 million and
HK$5.1 million, respectively. For further details, please refer to the section headed
“Financial Information – Discussion on Selected Consolidated Statements of Financial
Position Items – Trade receivables” of this prospectus.
Our cash flow and therefore profitability would be adversely affected if we experience
delay in recovering our trade receivables. Even if the payment was subsequently recovered,
the recovery process is usually burdensome along with extra time and resources spent. We
cannot guarantee partial or full recovery for every outstanding payment, especially for our
advertising agency clients who usually only make payment to us after receiving payment
from their customers. Failure to secure adequate payments in time or to manage past due
debts effectively could have a material and adverse effect on our business, financial position
and results of operations.
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Our contents may expose us to potential liabilities
As advised by our legal advisors as to Hong Kong laws, if any of the contents or
advertisement on our media platforms contains any false description to any goods or services
supplied, any obscene or indecent article, any defamatory materials or copyright infringe
work, our Group as the publisher of the contents and advertisement on our digital media
platforms, no matter whether the advertising contents are primarily produced by our Group
or provided by our clients, will be liable, whether or not our clients are also liable for
contents provided and/or approved by them. We may be charged by the relevant authorities
for breach of the relevant ordinances and regulations of Hong Kong. We may also be liable
to compensate (i) the copyright owner if the contents or advertisement on our media
platforms contains copyright infringing work or (ii) the subject of the contents or
advertisement if it contains defamatory remark against the subject, and/or publish any
clarification notice or apology (as the case maybe).
During the Track Record Period and up to the Latest Practicable Date, there were 33
claims for using copyrighted images of others which resulted either in our paying of licence
fees and and/or removal of the relevant images and 2 claims for using copyrighted contents
of others which resulted in either our apology and/or removal of the relevant article, and
total licence fees/compensation paid by us arising from such claims amounted to
approximately HK$76,000.
If we are involved in claim, dispute and/or litigation in relation to infringement of
intellectual property rights of other third parties, accusation of defamation or other third
parties’ rights, we may need to devote significant time and resources to defend ourselves. If
we are unable to defend ourselves in such claim, dispute and/or litigation, we may be liable
to payment of substantial compensation or other sanctions such as compliance with
injunction order requiring us to remove the content in question or take other steps to prevent
infringement which could impact our financial condition adversely. Such claim, dispute and/
or litigation might also taint our reputation, thus deterring our clients from engaging our
services and harm our financial performance.
Our internal control measures and procedures may be subject to failures and
limitations
In order to monitor our operation risk and comply with applicable laws or regulations
in relation to our business, we have risk management and other internal controls and
compliance measures and procedures in place. There is no assurance that these measures and
procedures will prove at all times adequate and effective to deal with all possible risks given
the fast changing business environment in which we operate. Furthermore, no matter how
well-considered the internal control measures and procedures are, they may still contain
inherent limitations caused by misjudgment or fault of the Board, senior management and/or
staff. Any deficiencies in the internal control measures and procedures may fail to prevent or
address all potential risks, and as a result our Group’s business, prospects, results of
operations and financial condition may be materially and adversely affected.
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We may experience breakdowns in our information technology systems or undetected
programming errors or other defects that could disrupt our business operations
During the Track Record Period, our Group’s digital advertising revenue respectively
accounted for 85.2%, 94.6% and 95.2% of the total revenue of the respective financial year.
Therefore our business heavily depends on the stable operation of our information
technology systems including the software and hardware, which we utilise to, among other
things, support our daily operation, including our sales system, expenses system and
accounting system; host our websites and mobile apps for our media brands; analyse viewers
behaviours; and design, execute and place contents and advertisements on our platforms.
A system malfunction or data loss could seriously interrupt or even paralyse our
business operations. During such malfunction, we may also fail to deliver our services and
products to clients in timely manner and affect our business relationships with our clients.
Our hardware systems are also vulnerable to a variety of events, including, among
others, telecommunications failures, power shortages, malicious human acts and natural
disasters, which would also lead to disruption to our business operations that could lead to
material adverse effect on our financial condition.
We may not be able to safeguard personal data of our audience and clients which may
lead to penalty and/or claims by third parties which may in turn materially and
adversely affect our reputation and business
We collect, receive, use, retain, store and process various personal data and other
information of our audience, subscribers and users of our websites, mobile applications and
our social media platforms operated on third party social media sites and clients in the
operation of our business. Our privacy policy statement, which can be located at our
websites and mobile apps, aims to ensure our collection and use of personal data is in
compliance with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong
Kong) (“ PDPO”) and its six data protection principles or other applicable laws and other
relevant regulations. We have implemented measures to comply with the requirements of
PDPO on data protection and privacy. For more information, please refer to the section
headed “Business – Data Protection and Security” of this prospectus.
However, we cannot guarantee that such measures can prevent any unauthorised use of
personal data and other information of our audience, subscribers and users and clients. We
could be found liable in litigation or public investigation as a result of our failure or
perceived failure to comply with our privacy policy statement, or applicable privacy laws or
regulations, or any unauthorised leak or use of personal data. Such failure would have an
adverse impact on our reputation and the operation of our business.
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We may not succeed in implementing our business strategies and future expansion plan
We cannot guarantee our business strategies and future expansion plans as proposed in
this prospectus will be successful as there are a number of factors which are beyond our
control and may affect our business prospects such as economic and political conditions,
global economic conditions, change in government regulations, audience behaviour and
client preferences. In particular, there is no assurance that we will be able to successfully
implement our strategies as more particularly outlined in the section headed “Business – Our
Strategies” of this prospectus. As disclosed in the section headed “Future Plans and Use of
Proceeds” of this prospectus, we will be incurring expenditure of approximately HK$14.0
million, HK$22.4 million and HK$5.8 million during the year ending 31 December 2023,
2024 and 2025 respectively for the purpose of implementing the APS Platform, the PSS
Platform and the E-Commerce Solution Platform, including capital expenditure and staff cost
for developing these platforms and marketing expenses for them. We may not be able to
generate the level of revenue from these platforms as expected. If we fail to generate
revenue or sufficient revenue from these platforms to cover the costs incurred, our net profit
for the respective years may drop and our results of operation and financial condition may
be adversely affected.
If we fail to attract, recruit or retain our key personnel including our executive officers
and key employees, our ongoing operations and growth could be affected
The success of our Group depends, to a significant extent, on the expertise and
experience of our executive officers and other key employees, most of whom have played an
important role in the development of our business. We benefit from a strong management
with extensive experience in digital marketing sector and rely on our key employees in our
daily operation when making business and editorial decisions. The performance of our
Group also depends on our ability to retain and motivate our executive officers and key
employees. There is no assurance that our Group could retain its executive officers and key
employees for their future services. If we were to lose the services of any of them without a
suitable and timely replacement, or were unable to recruit qualified members to join our
Group for future expansion, there could be a material adverse effect on our business, results
of operations and business prospect. Moreover, if any of our executive officers or key
employees join our competitors, we may lose know-how and clients, thereby affecting our
business adversely.
Adverse change in government regulations may materially and adversely affect our
operations and financial condition
Our principal business operations are based in Hong Kong and at present, save as those
set out in the section headed “Regulatory Overview – Laws and Regulations in Hong Kong”
of this prospectus, there are no particular laws or regulations governing our business.
Currently our Group has obtained all licences necessary for carrying on its businesses in the
current scope. Should there be any changes in the regulatory requirements and our Group is
not able to comply with them in a timely manner or if compliance of these requirements
involve substantial costs, the business, results of operation and financial position of our
Group may be adversely affected.
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We cannot assure that the insurance policies we have taken out are always able to
cover all losses we sustain during the course of our business operations
We maintain a number of insurance policies on our assets and against our operation
risks including property damage insurance, electronic equipment insurance, cash all risk
insurance, business interruption insurance and public liability insurance. Please refer to the
section headed “Business – Insurance” of this prospectus for details of our existing
insurance coverage. We cannot guarantee that our existing insurance policies will sufficiently
cover all potential liabilities or risks associated with our business operation. In the event
that our insurance does not or is insufficient to compensate, or should we be unable to effect
any insurance, for the losses or damages arising from such potential liabilities, our financial
condition and operations could be adversely affected.
Our Controlling Shareholders have substantial control over our Company and their
interests may not be aligned with the interests of the other Shareholders
Our Controlling Shareholders will still be retaining substantial control over our
Company after Listing. Subject to our Articles of Association and the Companies Act, our
Controlling Shareholders will still be able to exert significant influence over our business
and/or other matters of significance to us and other Shareholders in the general meetings of
the Shareholders and Board meetings. The interests of other Shareholders can be undermined
where the interests of the Controlling Shareholders conflict with that of other Shareholders.
We may not be able to catch up with the technological advancements in the digital
advertising industry in a timely and cost-effective manner
The digital advertising industry is ever-changing due to rapid evolvement of
information technology which allows innovative and precise advertising solutions to be
delivered to advertisers. With the inevitable emergence of new technologies, we need to
closely monitor the development of such technologies and make use of those that may
improve the quality of our advertising products and services and/or business efficiency in
order to stay competitive in the market.
We cannot guarantee our success in anticipating and screening which technologies
would best advance our business or that the new technologies we adopt will satisfy the
expectations and preferences of our clients and/or our audience. Furthermore, we may not be
able to manage the technological, operational and financial risks associated with adaptation
of such new technologies. If we fail to adapt a well-accepted new technology and/or fail to
adapt such new technology in a timely and cost-effective manner, our business and financial
performance may experience a material adverse effect.
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RISKS RELATING TO THIS SHARE OFFER
There has been no prior public market for the Shares, and the liquidity and market
price of our Shares may be volatile
Prior to the Listing, there has been no public market for our Shares. The initial Offer
Price range of the Offer Shares, and the Offer Price will be determined by the Overall
Coordinators (for themselves and on behalf of the Underwriters) and us. The Offer Price
may not be indicative of the price at which our Shares will be traded following the
completion of the Share Offer. In addition, there can be no guarantee that (i) an active
trading market for our Shares will develop, or (ii) if it does develop, that it will be sustained
following the completion of the Share Offer, or (iii) that the market price of our Shares will
not decline below the Offer Price.
Future sales by our Controlling Shareholders or substantial Shareholders of a substantial
number of our Shares in the public market could materially and adversely affect the
prevailing market price of our Shares
We cannot assure that our Controlling Shareholders or substantial Shareholders will not
dispose of their Shares following the expiration of their respective lock-up periods after
completion of the Share Offer. We cannot predict the effect, if any, that any future sales of
Shares by any Controlling Shareholders or substantial Shareholders, or the availability of
Shares for sale by any Controlling Shareholders or substantial Shareholders may have on the
market price of our Shares. Sales of substantial amounts of Shares by any Controlling
Shareholders or substantial Shareholders, or the market perception that such sales may occur,
could materially and adversely affect the prevailing market price of our Shares.
The interests of Shareholders may be diluted as a result of additional equity fund
raising in the future
Our Group may need to raise additional funds in the future, subject to the financial
condition, for the expansion of operations or new acquisition. The fund raising may involve
issuance of new Shares or other equity related securities of our Company other than on
pro-rata basis to existing Shareholders. In addition, any such new securities may entail
preferred rights, preferences and/or privileges over those attaching to the Shares. Therefore,
the Shareholders may experience substantial dilution in their interests in our Company.
Past dividends should not be used as a reference for dividend policy of our Company in
the future
Dividends of approximately HK$20.8 million, HK$34.0 million and HK$12.0 million
were declared by our Group for the year ended 31 December 2020, 2021 and 2022
respectively, which have been fully paid. Dividends of approximately HK$10.0 million was
also declared by our Group in March 2023, which had also been fully settled. Investors are
cautioned not to use historical dividend distribution by the Company as the indication of our
future dividend policy and there is no assurance that dividends will be declared or paid in an
amount equivalent to or exceeding historical dividends declared or at all. The declaration,
payment and amount of any further dividends are subject to the recommendation of our
RISK FACTORS
–4 7–


--- page 57 ---
Directors at their discretion depending on, amongst other factors, our revenue, financial
condition, cash requirements, provisions governing the declaration and distribution as
contained in our Articles of Association, applicable law and other relevant factors.
There will be a time gap between the pricing and trading of our Offer Shares, and the
price of our Offer Shares could fall below the Offer Price when the trading of our
Shares commences
The Offer Price of the Shares is expected to be determined on the Price Determination
Date. The Shares will not commence trading on the Stock Exchange until our Shares are
delivered, which is expected to be a short period after the Price Determination Date. As a
result, investors may not be able to sell or otherwise deal in our Shares during that period.
Accordingly, holders of our Shares are subject to the risk that the price of our Shares could
fall below the Offer Price when trading of our Shares commences as a result of adverse
market conditions or other adverse developments, that could occur between the Price
Determination Date and the date on which trading of our Shares commences.
RISKS RELATING TO STATEMENTS MADE IN THIS PROSPECTUS
Certain information and statistics included in this prospectus may not be reliable
Certain information and statistics contained in this prospectus have been extracted and
derived, in part, from various sources including the Euromonitor Report, various official
government sources and publicly available publications. We believe that the sources of such
information and statistics are appropriate and have taken reasonable care in extracting and
reproducing such information and statistics. We have no reason to believe that such
information or statistics is false or misleading or that any fact has been omitted that could
render such information or statistics false or misleading. The information from official
government sources has not been independently verified by our Company, our Controlling
Shareholders, the Joint Sponsors, the Overall Coordinators, the Capital Market
Intermediaries, the Joint Coordinators, the Joint Bookrunners, the Joint Lead Managers, nor
any of the Underwriter(s), any of our or their respective affiliates, officers or representatives
or any other person involved in the Share Offer and such parties do not make any
representation as to their accuracy and completeness.
While we have taken reasonable care to reproduce such information from official
government sources, we cannot guarantee the accuracy and reliability of the information
contained in such sources. Those facts and statistics may not be consistent with other
information compiled within or outside Hong Kong and may not be complete or up-to-date.
In all cases, investors should take into account the level of reliability and importance for all
such information and statistics.
RISK FACTORS
–4 8–


--- page 58 ---
Investors should not rely on any information contained in press articles or other media
regarding our Group or the Share Offer
There may be press and media coverage regarding us or the Share Offer, which may
include certain events, financial information, financial projections and other information
about us that do not appear in this prospectus. We have not authorised the disclosure of any
other information not contained in this prospectus. We do not accept any responsibility for
any such press or media coverage and we make no representation as to the accuracy or
completeness or reliability of any such information or publication. To the extent that any
such information appearing in publications other than this prospectus is inconsistent or
conflicts with the information contained in this prospectus, we disclaim responsibility for
them. Accordingly, prospective investors should not rely on any such information. In making
your decision as to whether to subscribe for and/or purchase the Shares, you should rely
only on the financial, operational and other information included in this prospectus.
RISK RELATING TO COMPANY NOT INCORPORATED IN HONG KONG
Our Shareholders may face difficulties in protecting their interests because we are
incorporated under Cayman Islands laws, and the laws of the Cayman Islands for
minority shareholders’ protection may be different from those under the laws of Hong
Kong or other jurisdictions
We are a Cayman Islands company and our corporate affairs are governed by our
Memorandum and Articles of Association, the Companies Act and other laws of the Cayman
Islands. The rights of Shareholders to take action against our Directors, actions by minority
shareholders and the fiduciary responsibilities of our Directors to us under the Cayman
Islands laws are to a large extent governed by the common law of the Cayman Islands. The
laws of Cayman Islands relating to the protection of the interests of minority shareholders
may differ from those under statutes and judicial precedent in existence in Hong Kong and
other jurisdictions. Therefore, remedies available to the minority shareholders of our
Company may differ from those they would have under the laws of Hong Kong or other
jurisdictions. Please refer to the section headed “Summary of the Constitution of the
Company and Cayman Islands Company Law” in Appendix III to this prospectus for more
information.
RISK FACTORS
–4 9–


--- page 59 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus includes particulars given in compliance with the CWUMPO, the
Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong
Kong) and the Listing Rules for the purpose of giving information to the public with regard
to us. Our Directors (including any proposed Director who is named as such in this
prospectus) collectively and individually accept full responsibility for the accuracy of the
information contained in this prospectus. Our Directors confirm, having made all reasonable
enquiries that, to the best of their knowledge and belief, the information contained in this
prospectus is accurate and complete in all material respects and not misleading or deceptive,
and there are no other facts the omission of which would make any statement in this
prospectus misleading.
All opinions expressed in this prospectus have been arrived at after due and careful
consideration and are formed on basis and assumptions that are fair and reasonable.
INFORMATION ON THE PUBLIC OFFER
The Offer Shares are offered solely on the basis of the information contained and the
representations made in this prospectus and the Application Forms and on terms and subject
to the conditions set out herein and therein. So far as the Share Offer is concerned, no
person is authorised and the Application Forms to give any information or to make any
representation not contained in this prospectus, and any information or representation not
contained herein must not be relied upon as having been authorised by our Company, the
Joint Sponsors, the Overall Coordinators, the Capital Market Intermediaries, the Joint
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their
respective directors or affiliates, or any other parties involved in the Share Offer. Neither the
delivery of this prospectus nor any offering, sale or delivery made in connection with the
Offer Shares should, under any circumstances, constitute a representation that there has been
no change or development reasonably likely to involve a change in our Group’s affairs since
the date of this prospectus or imply that the information contained in this prospectus is
correct as of any date subsequent to the date of this prospectus.
Details of the structure of the Public Offer, including its conditions, are set out in the
section headed “Structure and Conditions of the Share Offer” in this prospectus, and the
procedures for applying for Public Offer Shares are set out in the section headed “How to
Apply for Public Offer Shares and Employee Reserved Shares” in this prospectus and in the
Application Forms.
UNDERWRITING
The Share Offer comprises the Public Offer and the Placing. This prospectus set out
the terms and conditions of the Share Offer. The Public Offer Shares and the Placing Shares
are being offered for subscription at the Offer Price. Details of the structure of the Share
Offer are set out in the section headed “Structure and Conditions of the Share Offer” in this
prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–5 0–


--- page 60 ---
The Listing of our Shares on the Stock Exchange is sponsored by the Joint Sponsors.
The Share Offer is managed by the Overall Coordinators and fully underwritten by the
Underwriters subject to the terms and conditions of the Underwriting Agreement. For further
information about the Underwriters and the underwriting arrangements, please refer to the
section headed “Underwriting” in this prospectus.
DETERMINATION OF THE OFFER PRICE
The Offer Shares are being offered at the Offer Price which will be determined by the
Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company
on or around Friday, 7 July 2023, or such later date as may be agreed between the Overall
Coordinators (for themselves and on behalf of the Underwriters) and our Company but in
any event no later than Monday, 10 July 2023. The Offer Price is currently expected to be
mot more than HK$0.92 per Offer Share and not less than HK$0.84 per Offer Share.
If the Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company are unable to reach an agreement on the Offer Price on Friday, 7 July 2023, or
such later date as may be agreed between the Overall Coordinators (for themselves and on
behalf of the Underwriters) and our Company but in any event not later than Monday, 10
July 2023, the Share Offer will not become unconditional and will lapse.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
Further details of the structure and conditions of the Share Offer are set out under the
section headed “Structure and Conditions of the Share Offer” in this prospectus.
RESTRICTIONS ON SHARE OFFER AND SALE OF OFFER SHARES
No action has been taken to permit any public offering of the Offer Shares or the
distribution of this prospectus in any jurisdiction other than Hong Kong. Accordingly,
without limitation to the following, this prospectus may not be used for the purpose of, and
does not constitute, an offer or invitation in any jurisdiction or in any circumstances in
which such offer or invitation is not authorised or to any person to whom it is unlawful to
make such offer or invitation.
Each person acquiring the Offer Shares will be required, and is deemed by his
acquisition of the Offer Shares, to confirm that he is aware of the restrictions on offers of
the Offer Shares described in this prospectus and that he is not acquiring, and has not been
offered, any Offer Shares in circumstances that contravene any such restrictions.
Prospective applicants for Offer Shares should consult their financial advisers and take
legal advice, as appropriate, to inform themselves of, and to observe, all applicable laws and
regulations of any relevant jurisdiction. Prospective applicants for the Offer Shares should
inform themselves as to the relevant legal requirements and any applicable exchange control
regulations and applicable taxes in the countries of their respective citizenship, residence or
domicile.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–5 1–


--- page 61 ---
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
Our Company has applied to the Stock Exchange for listing of, and permission to deal
in, the Shares in issue and to be issued as mentioned herein including the Offer Shares and
any Shares which may be issued pursuant to the exercise of the options granted or to be
granted under the Share Option Scheme which represent 10% of our Shares in issue on the
Listing Date, on the Main Board respectively.
Under Section 44B(1) of the CWUMPO, if the permission for the Shares offered under
this prospectus to be listed on the Stock Exchange has been refused before the expiration of
three weeks from the date of the closing of the Share Offer or such longer period not
exceeding six weeks as may, within the said three weeks, be notified to our Company for
permission by or on behalf of the Stock Exchange, then any allotment made on an
application in pursuance of this prospectus shall, whenever made, be void.
Save as disclosed above, no part of our Company’s share capital is listed or dealt in on
any other stock exchange. At present, our Company is not seeking or proposing to seek a
listing of, or permission to deal in, our Shares on any other stock exchange.
REGISTER OF MEMBERS AND STAMP DUTY
All Shares in issue and to be issued pursuant to the Share Offer will upon Listing be
registered on our Company’s branch register of members in Hong Kong maintained by the
Tricor Secretaries Limited. Only Shares registered on our Company’s branch register of
members in Hong Kong may be traded on the Stock Exchange.
Dealings in Shares will be subject to Hong Kong stamp duty.
PROFESSIONAL TAX ADVICE RECOMMENDED
If you are unsure about the taxation implications of subscribing for or purchasing,
holding, disposing of or dealing in the Offer Shares, you should consult an expert.
Our Company, the Joint Sponsors, the Overall Coordinators, the Joint Coordinators, the
Capital Market Intermediaries, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, their respective directors, agents, advisers or any other person involved in the
Share Offer do not accept responsibility for any tax effects on, or liabilities of, any person
resulting from subscribing for, or purchasing, holding, disposing of or dealing in the Offer
Shares.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the approval for listing of, and permission to deal in, our
Shares on the Stock Exchange and the compliance with the stock admission requirements of
HKSCC, our Shares will be accepted as eligible securities by HKSCC for deposit, clearance
and settlement in CCASS with effect from the Listing Date or any other date HKSCC
chooses. Settlement of transactions between participants of the Stock Exchange is required
to take place in CCASS on the second business day after any trading day.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–5 2–


--- page 62 ---
All activities under CCASS are subject to the General Rules of CCASS and CCASS
Operational Procedures in effect from time to time.
All necessary arrangements have been made for our Shares to be admitted into CCASS.
Investors should seek the advice of their stockbrokers or other professional advisers for
details of those settlement arrangements and how such arrangements will affect their rights
and interests.
COMMENCEMENT OF DEALINGS IN THE SHARES
Dealings in our Shares on the Main Board are expected to commence at 9:00 a.m. on
Monday, 17 July 2023. Shares will be traded in board lots of 5,000 Shares each.
INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER
–5 3–


--- page 63 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. WONG Chi Fai
රқሾ Flat B, 19/F, Tower II
Clovelly Court
12 May Road
Hong Kong
Chinese
Mr. LEE Y at Pui, Royce
ҽɓ੃ Unit G, 26/F, Tower 3
Mantin Heights
28 Sheung Shing Street
Ho Man Tin, Kowloon
Hong Kong
Chinese
Ms. FAN Man Seung, V anessa
ઽྱ
Flat E, 5/F
Woodland Heights
2 Wong Nai Chung Gap Road
Hong Kong
Chinese
Independent non-executive Directors
Ms. Cheng Ka Y u
ቍྗ༃ Flat A, 6/F, Block 1
Welcome Gardens
39 Broadcast Drive
Kowloon Tong, Kowloon,
Hong Kong
Chinese
Mr. Mak Kam Chiu
௥ᎀ১ Flat A, 11/F, Block 13
South Horizons
Ap Lei Chau, Hong Kong
Chinese
Mr. Niu Zhongjie
ˬᒤ᭘ Flat C2, G/F
Repulse Bay Apartments
101 Repulse Bay Road
Hong Kong
Chinese
Further information of the Directors is disclosed in the section headed “Directors,
Senior Management and Employees” in this prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–5 4–


--- page 64 ---
PARTIES INVOLVED IN THE SHARE OFFER
Joint Sponsors Emperor Corporate Finance Limited
23/F Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
Lego Corporate Finance Limited
Room 1601, 16/F
China Building
29 Queen’s Road Central
Hong Kong
Overall Coordinators
and Capital Market
Intermediaries
Emperor Corporate Finance Limited
23/F Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
Lego Securities Limited
(Sponsor-Overall Coordinator)
Room 301, 3/F
China Building
29 Queen’s Road Central
Hong Kong
Joint Coordinators Emperor Securities Limited
23-24th Floor
Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
China Galaxy International Securities (Hong Kong)
Co., Limited
20/F Wing On Centre,
111 Connaught Road Central,
Hong Kong
Lego Securities Limited
Room 301,3/F
China Building
29 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–5 5–


--- page 65 ---
Joint Bookrunners and
Joint Lead Managers
Emperor Securities Limited
23-24th Floor
Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
China Galaxy International Securities (Hong Kong)
Co., Limited
20/F Wing On Centre,
111 Connaught Road Central,
Hong Kong
Lego Securities Limited
Room 301,3/F
China Building
29 Queen’s Road Central
Hong Kong
Guotai Junan Securities (Hong Kong) Limited
26/F-28/F Floor, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
Soochow Securities International Brokerage Limited
Level 17, Three Pacific Place
1 Queen’s Road East
Hong Kong
Capital Market Intermediaries Emperor Corporate Finance Limited
23/F Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–5 6–


--- page 66 ---
Emperor Securities Limited
23-24th Floor
Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
China Galaxy International Securities (Hong Kong)
Co., Limited
20/F Wing On Centre,
111 Connaught Road Central,
Hong Kong
Lego Securities Limited
Room 301,3/F
China Building
29 Queen’s Road Central
Hong Kong
Guotai Junan Securities (Hong Kong) Limited
26/F-28/F Floor, Low Block
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
Soochow Securities International Brokerage Limited
Level 17, Three Pacific Place
1 Queen’s Road East
Hong Kong
Legal Advisors to the Company As to Hong Kong law
David Chan & Carmen Chan, Solicitors
Suite 1210, 12/F
COSCO Tower
183 Queen’s Road Central
Hong Kong
As to Hong Kong law relating to tenancies
Mr. Chan Chung, Barrister-at-law
10/F, Grand Building
15-18 Connaught Road Central
Central, Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–5 7–


--- page 67 ---
As to Cayman Islands law
Conyers Dill & Pearman
29/F One Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law
Dentons
3/F & 4/F, Block A
Shenzhen International Innovation Center
No. 1006, Shennan Boulevard
Futian District, Shenzhen
PRC
Legal Advisor to the Joint
Sponsors and the
Underwriters
As to Hong Kong law
Vincent T.K. Cheung, Y ap & Co.
Unit 2302, 23/F, Office Tower
Convention Plaza
No.1 Harbour Road
Wanchai
Hong Kong
Auditor and Reporting
Accountants
Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road, Quarry Bay
Hong Kong
Industry Consultant Euromonitor International Limited
29/F
The Gateway Tower 5
15 Canton Road
Tsim Sha Tsui
Hong Kong
Valuer Ravia Global Appraisal Advisory Limited
17/F
83 Wan Chai Road
Wanchai
Hong Kong
Receiving Bank Industrial and Commercial Bank of China (Asia) Limited
33/F, ICBC Tower
3 Garden Road
Central, Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER
–5 8–


--- page 68 ---
Registered Office Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman
KY1-1111
Cayman Islands
Principal place of business in
Hong Kong
8/F, Tower 1
The Quayside
77 Hoi Bun Road
Kwun Tong, Kowloon,
Hong Kong
Company’s website www.newmedialab.com.hk
(information contained in our Company’s website does
not form part of this prospectus)
Company Secretary Ms. Liu Suet Ying
(associate member of both the Hong Kong Chartered
Governance Institute and the Chartered Governance
Institute)
28/F Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
Authorised Representatives Ms. Fan Man Seung, V anessa
Flat E, 5/F
Woodland Heights
2 Wong Nai Chung Gap Road
Hong Kong
Ms. Liu Suet Ying
28/F Emperor Group Centre
288 Hennessy Road
Wanchai
Hong Kong
Audit Committee Mr. Mak Kam Chiu (Chairman)
Ms. Cheng Ka Y u
Mr. Niu Zhongjie
Nomination Committee Ms. Cheng Ka Y u (Chairperson)
Ms. Fan Man Seung, V anessa
Mr. Niu Zhongjie
CORPORATE INFORMATION
–5 9–


--- page 69 ---
Remuneration Committee Mr. Niu Zhongjie (Chairman)
Mr. Wong Chi Fai
Mr. Mak Kam Chiu
Corporate Governance
Committee
Ms. Fan Man Seung, V anessa (Chairperson)
Mr. Mak Kam Chiu
Ms. Cheng Ka Y u
a representative from company secretarial function
a representative from finance and accounts function
Compliance Advisor Lego Corporate Finance Limited
Room 1601, 16/F
China Building
29 Queen’s Road Central
Central, Hong Kong
Principal Share Registrar Office Conyers Trust Company (Cayman) Limited
Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KY1- 1111
Cayman Islands
Hong Kong Share Registrar Tricor Secretaries Limited
17/F
Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banker The Bank of East Asia, Limited
10 Des V oeux Road Central
Hong Kong
Bank of Communications (Hong Kong) Limited
20 Pedder Street
Central
Hong Kong
CORPORATE INFORMATION
–6 0–


--- page 70 ---
The information and statistics set out in this section were extracted from the
independent industry report prepared by Euromonitor International Limited
(“Euromonitor ”), an independent third party, in connection with the Share Offer , which
included information and statistics from different official government publications,
available sources from public market research and other sources from independent
suppliers. We believe that the sources of information contained in this section are
appropriate sources for such information and have taken reasonable care in extracting
and reproducing such information. We have no reason to believe that such information is
false or misleading or that any part has been omitted that would render such information
false or misleading. The information from official government sources has not been
independently verified by us, the Joint Sponsors, the Overall Coordinators, the Capital
Market Intermediaries, the Joint Coordinators, the Joint Bookrunners, the Joint Lead
Managers, any of the Underwriters, any of their respective directors and advisers, or any
other persons or parties involved in the Share Offer , and no representation is given as to
their accuracy and none of them gives any representations as to its accuracy and
completeness. Accordingly, the information from official government sources contained
herein may not be accurate and should not be unduly relied upon.
SOURCE OF INFORMATION
We commissioned a report from Euromonitor, an Independent Third Party, to conduct
an analysis of, and to report on, the advertising industry in Hong Kong, as well as the
online advertising and print advertising industry in Hong Kong. A total fee of US$86,500
was paid to Euromonitor for the preparation of the report.
RESEARCH METHODOLOGY
In compiling the Euromonitor Report, Euromonitor obtained and gathered data and
intelligence by (i) conducting desk research; and (ii) conducting primary research by
interviewing leading industry participants and experts. The information and statistics set
forth in this section are extracted from the Euromonitor Report.
FORECASTING BASES AND ASSUMPTIONS
Euromonitor prepared the Euromonitor Report based on the following assumptions: (i)
the economy of Hong Kong is expected to maintain a steady recovery over the forecast
period, having taken into consideration the effects of the COVID-19 pandemic and other
external factors; (ii) the Hong Kong social, economic and political environments are
expected to recover steadily during the forecast period, having taken into account the effects
of the social unrest in 2019 and the COVID-19 pandemic in 2020 to 2022; (iii) key market
drivers such as the penetration of e-commerce are expected to boost the development of the
Hong Kong online advertising market over the forecast period; (iv) key market drivers
including the possession of smartphones and time spent on digital devices are likely to drive
the growth of the Hong Kong online advertising market over the forecast period; and (v) no
adverse change in information since March 2023.
INDUSTRY OVERVIEW
–6 1–


--- page 71 ---
SCOPE OF THE ADVERTISING INDUSTRY
The advertising industry is defined as the aggregation of online, outdoor, print,
television and radio and other advertising segments. It consists of the creation of media and
advertising contents, placement of advertising contents, planning of the advertising strategy
on various media platforms, as well as other strategic services including search engine
optimisation, social media marketing and other related value-added services.
/L50188Online advertising is defined as a form of marketing and advertising which uses
the Internet to deliver promotional marketing messages to consumers. It includes
electronic direct marketing (eDM), search engine optimisation (SEO), social
media marketing, many types of display advertising (including web banner
advertising), and mobile advertising.
/L50188Outdoor advertising refers to the placement of advertising contents, both print
and video contents, on any types of outdoor advertising platforms, including
billboards, bus benches, interiors and exteriors of buses, taxis and business
vehicles, and signage posted on the exterior of brick-and-mortar locations.
/L50188Print advertising refers to the creation and placement of physically printed
advertising contents placed on any types of publications such as newspapers,
magazines, brochures, or direct mail.
/L50188Television and radio advertising refers to a span of television programming
produced and paid for by an advertiser, with advertising contents embedded
within. It involves three main tasks: creating a television advertisement, placing
the advertisement on television, and measuring the outcomes of advertising
campaigns; whereas radio advertising refers to a span of radio programming
produced and paid for by an advertiser, with advertising contents embedded
within. It involves three main tasks: creating a radio advertisement, placing the
advertisement on radio, and measuring the outcomes of advertising campaigns.
OVERVIEW OF THE ADVERTISING INDUSTRY IN HONG KONG
Hong Kong’s advertising industry has grown from HK$29.4 billion in 2017 to HK$31.9
billion in 2018, in line with the growth in Hong Kong’s economy where real GDP grew at
2.8% in 2018. At the beginning of 2020, while the social unrest happened in 2019 started to
settle down, the outbreak of the COVID-19 pandemic in Hong Kong negatively impacted
both Hong Kong’s economy and the advertising industry. The demand for advertising
spending dropped as companies in Hong Kong reduced unnecessary spending to cope with
the adverse impact caused by the worsening economic and business environment. Companies
also need more time to digest changes caused by both social unrest and the COVID-19
pandemic in order to refine their advertising strategy for more cost-effective results, hence
further suppressed the overall advertising spending in 2020. As a result, the advertising
industry shrank to HK$20.9 billion in 2020, which registered a decline of 28.2% compared
to HK$29.0 billion in 2019. In 2021, Hong Kong’s advertising industry gradually recovered
in line with increased economic and consumption activities, recording HK$27.6 billion in
revenue which constituted a growth of 32.2% from the HK$20.9 billion recorded in 2020.
INDUSTRY OVERVIEW
–6 2–


--- page 72 ---
Although there was ongoing recovery from the pandemic, the advertising industry shrank
slightly to HK$26.9 billion in 2022 due to negative impacts from various global events and
supply chain disruptions. Overall, the advertising industry is still far from its pre-pandemic
size and recorded a negative CAGR of 4.2% over the historical period of 2018 to 2022.
The table below sets forth the revenue of the advertising industry by segment in Hong
Kong from 2018 to 2022 and forecast for 2023 to 2027:
Table 1 The Advertising Industry in Hong Kong (2018 – 2027F)*
HK$ billion 2018 2019 2020 2021 2022
CAGR
2018-
2022
The Advertising Industry 31.9 29.0 20.9 27.6 26.9 -4.2%
Online 12.1 11.0 9.3 12.5 12.6 1.0%
Outdoor 6.1 6.5 3.4 4.6 4.5 -7.3%
Print 7.2 6.0 3.9 4.5 4.0 -13.5%
Television & Radio 6.3 5.4 4.2 5.9 5.7 -2.5%
Others
# (HK$ million) 145.9 98.8 7.9 20.0 26.9 -34.5%
HK$ billion 2023F 2024F 2025F 2026F 2027F
CAGR
2023F-
2027F
The Advertising Industry 29.8 32.5 35.0 37.2 39.6 7.3%
Online 14.9 17.2 19.4 21.2 23.0 11.4%
Outdoor 5.1 5.7 6.4 6.9 7.4 9.7%
Print 3.9 3.7 3.4 3.2 3.1 -5.0%
Television & Radio 5.9 5.8 5.7 5.8 5.9 -0.1%
Others
# (HK$ million) 36.4 44.0 48.1 51.3 52.9 9.8%
Source: Euromonitor estimates from customer research and trade interviews with industry stakeholders;
Hong Kong Adspend Report 2022, AdmanGo; WARC Adspend Outlook 2022/23.
* 2023 to 2027 figures are forecasted data based on Euromonitor estimates from customer research and
trade interviews with industry stakeholders
# Others are mostly composed of cinema advertising
Advertising activities in Hong Kong are highly aligned with the overall economic and
business environment. Therefore, the better the overall economic and business environment,
the more business-friendly the market is for companies to operate in, hence creating further
demand to allocate budget on advertising campaigns and expand their businesses.
Among various advertising segments, the outdoor, print and television and radio
advertising segments have recorded negative CAGR of 7.3%, 13.5% and 2.5% respectively
over the historical period of 2018 to 2022. Other advertising, which is mostly comprised of
cinema advertising, recorded a negative CAGR of 34.5% from 2018 to 2022. This is mainly
due to the influence of the social unrest in 2019 and the subsequent COVID-19 pandemic.
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Cinemas in Hong Kong were forced to close for prolonged periods and saw a significant
drop in cinema attendance, which had a devastating impact on their advertising revenue.
Running counter to the general decline in total revenue of the advertising industry with an
aggregate negative 4.2% CAGR, the online advertising segment has recorded a positive
CAGR of 1.0% over the same period. The growth in the online advertising segment is
mainly attributable to (i) technology advancement and high internet penetration rate; and (ii)
rapid growth in e-commerce market as a major driving force for online advertising.
After more than three years of COVID-19 pandemic, Hong Kong has finally lifted all
travel restrictions and pandemic containment measures and the overall consumer expenditure
is expected to recover and grow over the forecast period, from HK$2,002.0 billion in 2023
to HK$2,468.9 billion in 2027, at a CAGR of 5.4%.
The expected momentum in the recovery of consumer spending power also drives the
expected advertising spending in Hong Kong over the forecast period.
Similar to the historical period performance, the ongoing digital transformation of the
advertising industry, as well as the digital-savvy generation of the Hong Kong population is
expected to increase further over the forecast period, the online media would be expected to
grow at a double-digit CAGR of 11.4%, from HK$14.9 billion in 2023 to HK$23.0 billion in
2027. By 2027, online media is expected to contribute to approximately 58% of the total
advertising industry and become the major media platform for advertisers to stay connected
with targeted consumers. In comparison to online media, traditional media such as television
& radio is expected to record negative CAGR of 0.1% and print media is expected to record
negative CAGR of 5.0%, respectively, over the forecast period. It is expected that the
forecasted 7.3% CAGR of the advertising industry is driven by the demand shift from
traditional media to online media.
The relaxation of travel restriction and social distancing measures in the latter half of
2022 would also fuel momentum for outdoor and other media to recovery and grow over the
forecast period, at 9.7% and 9.8% CAGR, from HK$5.1 billion and HK$36.4 million in
2023, to HK$7.4 billion and HK$52.9 million in 2027, respectively.
In Hong Kong, seasonality is a well-known factor considered by marketers and
advertisers when making advertising spending allocation decisions in the year. Traditionally,
the fourth quarter covers festivals such as Christmas, which is the time for advertisers to
allocate a significant amount of their advertising spending at. Among those festivals,
Christmas is known as the most important season for most advertisers in Hong Kong to
allocate a significant portion of their advertising budget to boost their sales. The gifting
tradition of Christmas makes it a strong motivation for consumers to do shopping, hence
making it the most popular holiday season for advertisers to plan and carry out their
advertising campaigns. On the other hand, the rapidly growing e-commerce trend influences
the seasonality in a way that a heavier focus on advertising spending in the fourth quarter of
a calendar year was placed by advertisers as the notable e-commerce event of “Double
Eleven Shopping Festival” take place on the eleventh day of November each year.
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Save for the social unrest in Hong Kong exposed during the second half of 2019
resulted in substantial reduction of advertising spending during such period, it is observed
that the general spending atmosphere in Hong Kong is constantly affected by the said
seasonality factor happened in the fourth quarter. According to Euromonitor custom research,
throughout 2018 to 2022, the fourth quarter of each year recorded the heaviest weighing of
the overall advertising spending of the year in Hong Kong, save for 2019 for the reason
mentioned above, ranging from 24.8% to 29.4%, to capture the potentially higher spending
power of Hong Kong consumers during the fourth quarter exhibited throughout the historical
period.
IMPACT OF COVID-19 PANDEMIC IN HONG KONG
At the beginning of 2020, while the social unrest started to settle down, the outbreak of
the COVID-19 pandemic in Hong Kong caused further damage to both Hong Kong’s
economic condition and the advertising industry’s environment. The real GDP and consumer
expenditure recorded a decline of 6.1% and 9.7% in 2020, respectively. Consumer
expenditure on newspapers, magazines, books and stationery has also recorded a decline of
14.6% in 2020.
According to the “From Data To Insights” report by Vpon Big Data Group, a big data
company focused on mobile data analytics marketing solutions, the Hong Kong population
in commercial districts such as the Central and Western District, has significantly declined
right after the outbreak of the first identified COVID-19 case in 2020, meaning that the
Hong Kong population, in general, has reduced their traffic to commercial districts, where
most outdoor advertising contents are in place, since the outbreak of the COVID-19
pandemic. Similarly, the proportion of mobile users not going out during weekdays after the
outbreak has increased by 25.6%, compared to the pre-COVID-19 era. These observations
have proven the reduction of physical foot traffic caused by the COVID-19 pandemic in
2020.
The COVID-19 pandemic lockdown accelerated e-commerce usage of food delivery
services and personal hygiene products. During the COVID-19 pandemic, the Hong Kong
government rolled out several social distancing measures to reduce gatherings and contain
the spread of the coronavirus. Those measures include locking down designated buildings or
districts with infected cases, capping the number of people for social gatherings, restricting
the dine-in time of restaurants, and mandating quarantine for people travelling into Hong
Kong.
These measures reduced offline consumption and encouraged purchases through online
channels and boosted the growth of certain segments of Hong Kong’s e-commerce market.
The e-commerce market of Hong Kong has increased from HK$85.4 billion in 2018 to
HK$136.0 billion in 2021, with a CAGR of 16.8%.
Despite the expected slow down on advertising spending towards traditional advertising
platforms, the growing e-commerce market in Hong Kong would shift the demand of
advertising spending from traditional advertising to online and social media advertising over
the forecast period.
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The partial recovery of the pandemic in mid-2021 fuels momentum in advertising
spending
Subsequent to the lockdown measures implemented in the first quarter of 2021, Hong
Kong consumers have adapted to the COVID-19 pandemic and started to “return to normal”.
With the lowered number of identified coronavirus cases and the roll out of vaccines in
March 2021, foot traffic in shopping malls and offices resumed. In light of the partial
recovery of social activities, advertisers, especially luxury and cosmetic brand owners,
started to resume their delayed advertising budget to launch massive marketing campaigns to
attract consumers spending.
The resumption of advertising spending had successfully boosted the overall retailing
sales revenue in the second quarter of 2021. Advertisers were then continued to allocate
their advertising spending to the third quarter of 2021, further accelerated the recovery of
the overall advertising spending of Hong Kong, resulted in a swift Y oY growth of 32.2% of
advertising spending in 2021 compared with 2020.
The fifth wave of COVID-19 pandemic created both opportunities and threats to the
advertising industry
The first Omicron variant of COVID-19 case was identified in November 2021, which
eventually led to the outbreak of the fifth wave of the pandemic in January 2022. In light of
the development of the pandemic, the Hong Kong government devised a series of
precautionary measures, including the social distancing rules and the “vaccine pass”
arrangements which only those who have received COVID-19 vaccination may be permitted
to enter scheduled premises. Businesses in Hong Kong, as well as major advertisers have
reduced their reliance on offline retailing and traditional advertising solutions by shifting
their focus on online retailing and online advertising. Similarly, Hong Kong consumers have
experienced the period of working from home, as well as when scheduled premises were
shut and have to rely on e-commerce platforms, to purchase both grocery and non-grocery
products for their daily needs. The fifth wave of the pandemic caused an immediate
weakening in consumers sentiments, but Hong Kong consumers have eventually adapted to
the “new normal” once again.
It is observed that both consumer and advertising spending in Hong Kong have
recovered from the fifth wave of the pandemic in May 2022. Advertisers in Hong Kong,
instead of reducing their advertising spending, have shifted their budget to the latter half of
this year to capture the potential recovery.
Driven by the economic recovery, advertising spending in Hong Kong also recorded
partial recovery in the latter half of 2022 and achieved approximately HK$15.1 billion from
June to December 2022. Overall, advertising spending in Hong Kong slightly fell by 2.5%
from the previous year, moderated by the strong recovery in the second half of 2022.
It is expected that advertisers would continue shifting advertising spending towards
online advertising solutions as online media platforms are less susceptible to any potential
new waves of the pandemic in near future, thereby benefiting online advertising companies.
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The growing e-commerce market in Hong Kong would also shift the demand of
advertising spending from traditional advertising to online and social media advertising over
the forecast period.
Full recovery of advertising spending expected in 2023
As predicted by the Financial Secretary of Hong Kong, the economy of Hong Kong is
expected to make a strong recovery in 2023. The GDP of Hong Kong is expected to reach
HK$3,034.2 billion by the end of 2023, with a 6.2% growth from 2022 and continue to
show strong momentum, with a 5.0% CAGR predicted from 2023 to 2027.
Specifically, Hong Kong’s tourism and retail businesses are expected to see substantial
growth in 2023, with quarantine measures lifted in Q4 2022, China re-opening its border in
early 2023 and the removal of all social distancing measures, including the mandatory
wearing of face masks in public places in March 2023. Additionally, the Hong Kong
Tourism Board (HKTB) is launching a new limited-edition cruise, departing October 28,
2023, to promote the city and help boost the industry’s recovery. As a result, the hospitality
sector is expected to benefit from the recovery, with Fitch Ratings predicting that hotel
occupancy rates will rise to 70% by the end of 2023. According to Euromonitor Passport
Data, in-destination spending of tourists in Hong Kong is expected to reach HK$13,179.9
million in 2023. The financial sector is also expected to make a recovery in 2023, with Fitch
Ratings predicting that the earnings of securities companies will recover from the market
downturn.
A full recovery of advertising spending is therefore predicted from 2023, with an
expected advertising spending of HK$29.8 billion in 2023. From 2024 onwards, the market
is expected to grow continuously, further surpassing pre-Covid levels to reach HK$39.6
billion in 2027. The growing e-commerce market in Hong Kong would also shift the demand
of advertising spending from traditional advertising to online and social media advertising
over the forecast period. Online advertising, a strong market driver during the pandemic, is
also expected to continue growing, with a 11.4% CAGR predicted in the forecast period. In
particular, product display and social will likely be the main driving forces of online
advertising, with a forecast CAGR of 13.7% and 12.3% from 2023 to 2027, respectively.
INTERNET AND DIGITAL DEVICES LANDSCAPE IN HONG KONG
Hong Kong’s internet users have increased from 6.5 million in 2018, to 6.8 million in
2022, at a CAGR of 1.7%. Considering the fact that Hong Kong recorded a 7.5 million
population, the 6.8 million internet users representing a high penetration rate of 91.3%,
meaning that over 90% of the population have access to online media contents.
Among digital devices commonly possessed by Hong Kong citizens, smartphone is the
most popular device type. In 2022, the possession of smartphone per household reached
99.6%, which was well above the possession of other digital devices such as laptop, desktop
and tablet, which recorded a possession of 71.2%, 75.1% and 71.8%, respectively.
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Table 2 Internet and Digital Devices Landscape in Hong Kong (2018 – 2027F)*
HK$ 2018 2019 2020 2021 2022
CAGR
2018-
2022
Internet Users (’000) 6,492.0 6,632.9 6,697.5 6,831.4 6,906.2 1.6%
Internet Penetration Rates
(%) 90.5 91.7 92.8 93.7 91.3 0.2%
Possession of Digital
Devices (%)
Laptop 69.7 72.4 74.9 77.3 71.2 0.5%
Desktop 81.4 82.2 82.9 83.6 75.1 -2.0%
Smartphone 99.1 99.3 99.4 99.5 99.6 0.1%
Tablet 64.4 67.4 70.0 72.4 71.8 2.8%
HK$ 2023F 2024F 2025F 2026F 2027F
CAGR
2023F-
2027F
Internet Users (’000) 6,994.0 7,083.3 7,161.8 7,223.4 7,279.5 1.0%
Internet Penetration Rates
(%) 92.2 93.0 93.8 94.3 94.9 0.7%
Possession of Digital
Devices (%)
Laptop 71.6 71.8 72.0 72.1 72.2 0.2%
Desktop 74.4 73.9 73.5 73.2 72.9 -0.5%
Smartphone 99.6 99.7 99.7 99.8 99.8 0.1%
Tablet 71.1 70.6 70.2 70.0 69.7 -0.5%
Source: Euromonitor Passport Database, Digital Consumer 2023 Edition
* 2023 to 2027 figures are forecasted data based on Euromonitor Passport Database, Digital Consumer
2023 Edition
The e-commerce market of Hong Kong has increased from HK$85.4 billion in 2018 to
HK$136.0 billion in 2021, with a CAGR of 16.8%. Among all digital devices, smartphone
continues to be the major window for e-commerce transactions in Hong Kong. Over the
historical period, e-commerce transactions made through smartphone devices increased from
HK$49.0 billion in 2018 to HK$87.6 billion in 2021, recorded a double-digit CAGR growth
of 21.3%. In 2022, the e-commerce market of Hong Kong was valued at HK$183.6 billion,
and transactions made through smartphone devices constituted 65.4% of the total
e-commerce market. Having regard to the rapid growth in the e-commerce market,
advertising industry players have allocated more resources on their online advertising
solutions and capability, in order to help their client companies to better reach their targeted
consumers through online and social media marketing campaigns. The total spending on
advertisements, as a result, has moved towards online advertising away from traditional
media advertising, including print, radio and television.
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SOCIAL MEDIA LANDSCAPE IN HONG KONG
Alongside the development of the digital landscape in Hong Kong, social media sites
also gain traction over the historical period. Leading social media sites such as Facebook,
Y ouTube and Instagram, with average active monthly users of 5.1 million, 5.2 million and
3.1 million in 2022, representing a 69.1%, 70.5% and 41.4% penetration on Hong Kong
population, respectively. The average active monthly users (AAMU) refer to the number of
unique customers who interacted with the aforementioned social media sites within a month,
such number is not mutually exclusive to each of the social media sites, meaning that the
aggregated number of active monthly users would exceed the total number of Hong Kong
population, hence a market share by active monthly users for social media sites is
ambiguous and unavailable.
Amongst leading social media sites, Facebook remains one of the most influential
platforms in Hong Kong not only because of the highest average active monthly users it has
compared to its peers for 2018 to 2021 and the second highest for 2022, but also because of
the mixed types of content including text, photos, videos, gifs and more, that could be
placed through its platform, making it an irreplaceable social media platform in Hong Kong.
This also explains the strong influence it has as a placement platform for advertisement
content.
A high penetration rate means that advertisements placed on those social media sites
would be able to reach a large proportion of the Hong Kong population, hence an effective
way for advertising merchants’ goods and services. Both Facebook and Instagram have
become e-commerce gateways to further promote the e-commerce market in Hong Kong
through their Instagram Shop and Facebook Shop features. Y ouTube, being the most popular
video streaming platform in the world, also has gained popularity among merchants as a
gateway to deliver advertising content, and even interactive advertising videos to offer
consumers’ experiences online.
Besides social media platforms like Facebook and Instagram, a hybrid of social media
networking and jobs posting platforms like LinkedIn also has gained popularity over the past
decade in Hong Kong, as the highly competitive job market creates a demand for an
interactive social networking platform that could professionally link hirers and job seekers.
This explained the leading position of LinkedIn as a popular social media site in Hong
Kong.
Apart from the top five leading social media sites, there are no other sites that have a
comparable number of active monthly users in Hong Kong to be tracked as influential
platforms in 2022.
According to the Digital 2023: Hong Kong report issued in February 2023 by
Hootsuite, a social media management platform, and We Are Social, a global social creative
agency, social media sites are amongst the most frequently visited sites in Hong Kong, with
Facebook and Y outube ranked second and fourth of top websites visited in Hong Kong, by
average monthly traffic, with an average time per visit of 21 minutes and 9 minutes,
respectively. This indicates the high potential for advertising on these social media
platforms, hence explained the rapid growth in social media advertising in Hong Kong.
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Table 3 Leading Social Media Sites in Hong Kong (2018 – 2027F), Average Active
Monthly Users (AAMU) ’000
Rank
Social
Media
Sites 2018 2019 2020 2021 2022
CAGR
2018-2022
AAMU to
Population*
(2022)
1 Y ouTube 4,840.3 5,022.3 5,060.9 5,107.7 5,222.5 1.9% 70.5%
2 Facebook 5,249.6 5,431.9 5,123.3 5,201.1 5,117.7 -0.6% 69.1%
3 Instagram 2,660.3 2,282.0 2,769.3 2,916.8 3,064.5 3.6% 41.4%
4 LinkedIn 1,536.6 2,053.4 2,223.5 2,361.6 2,900.3 17.2% 39.2%
5 Twitter 442.5 474.5 750.0 772.9 888.8 19.0% 12.0%
Source: Euromonitor International Digital Consumer 2022 Edition
Rank
Social
Media
Sites 2023F 2024F 2025F 2026F 2027F
CAGR
2023F-2027F
AAMU to
Population*
(2027)
1 Y ouTube 5,298.9 5,331.2 5,356.9 5,408.9 5,450.3 0.7% 72.5%
2 Facebook 5,178.4 5,198.9 5,205.7 5,214.4 5,221.8 0.2% 69.5%
3 Instagram 3,076.4 3,237.4 3,469.3 3,530.1 3,651.3 4.4% 48.6%
4 LinkedIn 2,964.4 3,120.2 3,234.2 3,410.0 3,531.4 4.5% 47.0%
5 Twitter 890.8 987.4 1,054.2 1,065.6 1,104.6 5.5% 14.7%
* The AAMU to population ratio is calculated by dividing the average active monthly users of a social media
site in Hong Kong by the total population of Hong Kong. The historical population data from 2018 to 2022
was extracted from the Census and Statistics Department of the Government of the Hong Kong Special
Administrative Region. Population forecasts for 2023 to 2027 were estimated based on macroeconomic
trends, such as birth rate and immigration, by Euromonitor .
Source: Euromonitor International Digital Consumer 2023 Edition; Digital 2022:Hong Kong Report, Hootsuite;
Meta Earnings Presentation Q4, 2022; Alphabet Inc. Q4 & Fiscal Year Earnings Report, 2022; Microsoft
Earnings Release FY22 Q4; Twitter Inc. Second Quarter 2022 Results; Euromonitor estimates from
custom research and trade interviews with industry stakeholders.
Despite the 5.7% decline in Facebook’s average active monthly users in 2020,
Instagram, another leading social media platform owned by Meta Platforms, Inc., the parent
company of Facebook, has recorded a 21.4% increase in its average active monthly users in
2020. The shift of AAMU from Facebook to Instagram in 2020 does not negatively impact
the position of Meta Platforms in Hong Kong. The aggregated number of AAMU between
Facebook and Instagram continue to increase from 7.7 million in 2019 to 7.9 million in
2020, indicating a larger users base during the year of the COVID-19 pandemic. In 2021, all
platform recorded a rebound in AAMU, with Facebook, Y ouTube and Instagram recording
growth of 1.5%, 0.9% and 5.3% respectively. The first two now attract 5.1 million and 5.2
million AAMU in Hong Kong in 2022, while Instagram draws about 3.1 million AAMU. In
2022, all platforms recorded growth in AAMU, with the exception of Facebook, which
declined slightly by 1.6% from the previous year, but the aggregated AAMU of Facebook
and Instagram grew to 8.2 million. The decrease of AAMU of Facebook in Hong Kong in
2022 can be most directly attributed to data breach incident in 2021 and Facebook faced
criticism for not taking adequate actions to prevent the apps from accessing user data, which
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had a negative impact on overall user confidence. However, the AAMU of Facebook is
expected to grow in the forecast period after the data breach incident has calmed down.
Benefited by the large user base in Hong Kong, Facebook, Y ouTube and Instagram are
expected to remain the dominant social media sites in Hong Kong over the forecast period.
Interactive content offered by Facebook and Instagram gain popularity among advertisers to
better engage with audience compared to Y ouTube. Furthermore, in the world of online
advertising, posting video content is more expensive compared to non-video content with
similar number of views. Compared to Y ouTube which majority of advertising content are
video contents, both Facebook and Instagram’s platforms can be well fitted to both video
and non-video content, providing both a diverse range of pricing for advertising needs. Such
flexibility in terms of content types and pricing makes Facebook and Instagram favourable
platforms for advertisers in Hong Kong. Considering the aggregated number of average
active monthly users of 8.2 million for both Facebook and Instagram in Hong Kong in 2022,
the interactive function embedded with the content, as well as a diverse range of pricing for
advertising solutions offered by both leading social media sites, it is an industry norm for
advertisers in Hong Kong to rely on Facebook and Instagram as their key platforms to place
advertising contents, as well as advertising solutions, including boosting services.
The realities of the COVID-19 pandemic have encouraged consumers to engage more
with live streaming, which was seen as the ideal way to spend one’s free time during
periods of social distancing, especially during the quarantine lockdown. With the interactive
function that allows audience or followers to submit questions to questions sticker added to
the content owners’ stories, it is expected that Instagram would grow faster than both
Facebook and Y ouTube over the forecast period.
With similar functions that allow LinkedIn users to start a poll on the platform, it is
expected that this platform would continue to grow faster than Facebook and Y ouTube over
the forecast period, but at a slower rate compared to its historical growth. This is because
LinkedIn’s target audience in Hong Kong are the working population, including both
employed and unemployed. In comparison, the target audience for Facebook, Y ouTube,
Instagram and Twitter are audience who are capable to access internet platforms through
digital devices. The difference in target audience limited the growth of LinkedIn in Hong
Kong over the forecast period.
Twitter, the American microblogging and social networking platform that recorded
double-digit growth in monthly active users in Hong Kong over the historical period, is
expected to see a slower CAGR growth over the forecast period. This is mainly due to the
lack of interactive content function launched makes it to be inferior to both Facebook and
Instagram in the Hong Kong market.
Nevertheless, when choosing platform hosting their advertising campaigns, advertisers
tend to be platform-neutral and demonstrate low stickiness towards social media platforms.
When advertisers and/or advertising agencies choose the best-fit social media platform for
placing of their advertisements, major factors to be taken into consideration include such
platform’s audience size, audience type, average conversion rate, the price charged for
advertisement placement, as well as availability of value-added services such as boosting
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services. In particular, advertisers and/or advertising agencies place heavy emphasis on
whether the audience profile of such social media platform matches with the target
customers of their own products and services.
In recent years, there has been a growing concern over personal privacy. In 2022,
Apple and Google have both adapted their privacy policies in response to this increased
awareness. Some users have chosen to opt out of behavior tracking and withhold their
personal information. These changes have had some impact on media platforms, particularly
the smaller ones. However, according to trade interviews with industry players, advertisers
are less concerned with the privacy policy changes; they still would prefer larger-scale
platforms, such as Facebook and Y ouTube, which have more experience and expertise in AI
technology to quickly adapt to any changes in privacy terms and help advertisers optimise
tracking using AI.
MARKET OVERVIEW OF ONLINE ADVERTISING INDUSTRY IN HONG KONG
Overview of the products and services in the online advertising industry
Along with the rapid transformation in the digital landscape, Hong Kong’s media and
advertising industry have been restructured over the historical period by altering ways to
deliver marketing contents and messages to target customers. More industry players have
expanded their capability in delivering online advertising services and solutions to
advertisers who are seeking more customised and interactive content to better target their
customer groups.
Hong Kong’s online advertising industry has showed growth of 1.0% CAGR over the
historical period, weathering the drastic impact caused by social unrest in 2019, as well as
the outbreak of the COVID-19 pandemic during 2020, 2021 and 2022. The online
advertising industry recorded a market value of HK$12.6 billion in 2022, exceeding
pre-pandemic levels. This followed two consecutive years of decline, of 9.0% in 2019 due to
the social unrest and 15.5% in 2020 due to the social distancing and lockdown measures.
However, the industry shift from traditional advertising to online advertising continues
apace, with a strong rebound of 34.8% in 2021 and remaining steady for 2022. The
aggregated growth, albeit small, of the online advertising industry in Hong Kong stands in
stark contrast to the decline in market value of the rest of the advertising industry over the
historical period.
Advertising agencies act as industry professional which provides services ranging from
the consultation, ideation, planning, design and creation of advertising content to advertisers.
Advertising agencies that possess the knowledge and experience in formulating tailored
advertising solutions, play an important role in the Hong Kong advertising industry to advise
advertisers on their marketing strategies and formulating advertising solutions for advertisers
to achieve their marketing objective in a more cost-efficient manner. In light of advertising
agencies’ expertise in initiating, managing and implementing advertising campaigns,
advertisers of larger scale tend to engage advertising agencies to coordinate their advertising
campaigns.
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Since the primary role of an advertising agency is to create advertising and marketing
content and campaign tailored to the advertiser’s product, brand and target customers,
advertising agencies, therefore, remain as the key agent for advertisers to rely on when
seeking adequate advertising companies. It is expected that advertising agencies, as agents of
various advertisers, will continue to be the main source of revenue as repeat clients to the
industry over the foreseeable future.
Key online advertising segments in Hong Kong
There are four key segments of the online advertising industry in Hong Kong. They are
display, social, creative and production, as well as strategic services.
Product display, or display advertising, is one of the most popular types of online
marketing, where advertisers can pay online advertising company to display advertising
contents on designated platforms, or to designated target customers. Such display
advertisement can range from static, animated, video to interactive.
Social, or social media advertising, is the rising star among all segments of the online
advertising industry. This refers to advertisements served to users on social media platforms.
The high penetration of social media platforms in Hong Kong makes it the fastest-growing
segment of the industry over the historical period. In the forecast period, the development of
the social media landscape in Hong Kong will continue to drive the growth of the online
advertising industry, particularly in social advertising. Firstly, increasing penetration rates of
social media platforms act as a strong base for social advertising growth. From 2022 to
2027, all five leading social media platforms in Hong Kong will likely see growth in AAMU
to population. LinkedIn and Instagram are expected to record the strongest growth rates of
20% and 17%, respectively. Secondly, social media provides advertisers with the ability to
target their desired audience based on demographics, interests, behaviors, and geographic
location, all of which can be critical to the success of advertising campaigns. Social media
platforms like Facebook, Twitter, Instagram, and LinkedIn, advertisers have a wealth of
audience targeting options available to them compared to other types of online advertising,
which will likely make advertisers increasingly favor social media over traditional and other
online advertising formats. Thirdly, it is expected that user-generated content (UGC) will see
significant revenue growth in the forecast period with advertisers capitalizing on the trend
by incorporating UGC into their advertising campaigns, but as it is still a relatively new
trend with small revenue base, despite its expected fast growth, it’s unlikely to have any
significant impact on the current advertising platforms.
Creative and production refer to the services offered by online advertising companies to
advertisers, from the production of various online contents to formulate a full-scale
marketing campaign.
Strategic services refer to all other advertising services which relate to the overall
marketing and advertising campaigns. This includes key opinion leader (KOL) marketing,
search engine optimisation (SEO), conversion rate optimisation (CRO), online reputation
management (ORM), and so on. Such services allow online advertising companies to
optimise the efficiency and result of the existing advertising contents and campaigns.
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Table 4 Online Advertising Industry in Hong Kong (2018 – 2027F)*
HK$ billion 2018 2019 2020 2021 2022
CAGR
2018-
2022
Online Advertising
Industry 12.1 11.0 9.3 12.5 12.6 1.0%
Product Display 5.5 3.4 1.6 3.1 3.2 -13.1%
Social 2.3 2.9 3.9 4.7 4.7 19.8%
Creative & Production 2.3 2.5 2.1 2.6 2.6 4.0%
Strategic Services 2.0 2.3 1.7 2.1 2.1 0.9%
HK$ billion 2023F 2024F 2025F 2026F 2027F
CAGR
2023F-
2027F
Online Advertising
Industry 14.9 17.2 19.4 21.2 23.0 11.4%
Product Display 3.9 4.6 5.3 5.9 6.6 13.7%
Social 5.5 6.8 7.9 8.0 8.8 12.3%
Creative & Production 3.0 3.1 3.4 4.4 4.7 12.0%
Strategic Services 2.5 2.7 2.7 2.9 3.0 4.6%
Source: Euromonitor estimates from customer research and trade interviews with industry stakeholders;
Hong Kong Adspend Report 2022, AdmanGo; WARC Adspend Outlook 2022/23.
* 2023 to 2027 figures are forecasted data based on Euromonitor estimates from customer research and
trade interviews
The pricing of advertising inventories
For the online advertising industry, an advertising placement or a single post on social
media or online advertising platform, the price can vary depending on the number of
targeted audience can be reached, as well as the visual space. For social media advertising,
post boosting can be offered to advertisers who wish their existing post to reach their
specific group of audience at a specific time. Such cost of post boosting depends on the
overall exposure, artwork requirement, and many more factors that could cause an impact on
the exposure gained from the boost.
According to Euromonitor’s custom research, the costs for advertisers to place a single
post on online advertising platforms and for the post boosting services, have remained stable
over the historical period. During the social unrest and the outbreak of the COVID-19
pandemic respectively, because of the shift in demand from traditional advertising to online
advertising, the price range was resilient to both events, hence remained constant.
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The online advertising industry in Hong Kong is a fragmented and competitive market,
it is expected that the increasing demand for online advertising solutions would be offset by
the highly competitive nature of the industry, hence the growth of the price range of
advertising inventories would follow the trend of the expected inflation over the forecast
period.
COST ANALYSIS OF ONLINE ADVERTISING INDUSTRY
Staff and production costs being two major cost items of the online advertising industry
To cope with the rapidly evolving online advertising solutions, digital marketers,
content creator and information technology specialists are three major types of labour to
keep the advertising industry in operation. Compared to other sub-industries of advertising,
the online advertising industry is relatively less capital intensive as the production, creation
and display of online contents require less, or even no physical space, meaning that the
office space and storage facilities will no longer be the major cost drivers compared to
traditional advertising industry such as print and broadcast advertising.
According to the Manpower Survey and 2021 Job Seeker Salary Survey conducted by
the V ocational Training Council and JobsDB respectively, as well as the customer research
conducted by Euromonitor, the average monthly salary of content creator in Hong Kong has
increased from HK$18,506.6 in 2018 to HK$19,125.7 in 2022, recording a CAGR of 0.8%
over the historical period. The stable trend observed on the number of the labour force for
all major job types, as well as the stable salary trend of content creator in Hong Kong,
represent the stable supply of key labours of the industry in Hong Kong, hence the staff cost
is relatively stable over the historical period.
Based on the custom research conduct by Euromonitor, the average monthly salary of
IT developer in Hong Kong, which comprises of IT development, and software programmer,
has increased from HK$29,527.4 in 2018 to HK$35,105.3 in 2022, recorded a CAGR of
4.4% over the historical period. The role of IT developer includes but not limited to the
planning, testing, analysis, programming, and many other activities throughout the course of
the information technology project. The salary increase is well explained by the increasing
demand for IT development manpower in Hong Kong, especially by the digital creative
sector as indicated by the Manpower Survey conducted by the V ocational Training Council
for innovation and technology sector. The survey showed the number of full-time employees
and freelancers of IT & Communications Services Organisations for the digital creative
sector has increased from 560 to 736 from 2018 to 2022, recording a 31.4% growth.
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17,000
17,500
18,000
18,500
19,000
19,500
 -
 50
 100
 150
2018 2019 2020 2021 2022
Hong Kong Dollar
Number of Labour Force '000
The Labour Force and Salary of Advertising Industry’s Job Types in
Hong Kong (2018 – 2022)
Content Creation Digital Marketing
IT Development Content Creation (Salary)
Source: Euromonitor Passport, the Census and Statistics Department of the Government of the Hong Kong
Special Administrative Region, Euromonitor Passport data, the International Monetary Fund
(IMF), 2022 Manpower Survey – V ocational Training Council and 2021 Job Seeker Salary Survey
Report – JobsDB
COMPETITIVE LANDSCAPE OF ONLINE ADVERTISING INDUSTRY
Local network and dynamic advertisers keep less competitive players away from the
market
As aforementioned, the COVID-19 pandemic impact and evolving digital landscape in
Hong Kong have further shifted advertisers’ demand from traditional advertising to online
advertising, and only experienced advertising companies who know the local market well
and have the capacity to offer a mix of traditional and online advertising solutions can cope
with such dynamic demand.
The tables below set forth the major market players in the online advertising companies
in Hong Kong:
Table 5 Ranking of Leading Online Advertising Companies in Hong Kong, 2020 (Top 5)
Ranking Company Name
Revenue
Receipts
Market
Share
Listing
Status Company Profile
(HK$ Million) (%)
1 Company A 283.1 3.0 Listed Company A is a Hong Kong newspaper,
magazine and books publisher. Its
publication mainly focuses on finance and
business and has a footprint on
information technology as well as lifestyle.
2 NMG Ltd. 180.3 1.9 Private
3 Company B 170.5 1.8 Listed Company B is a Hong Kong media and
publication company. It provides
advertising services and on print and
online media platforms.
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Ranking Company Name
Revenue
Receipts
Market
Share
Listing
Status Company Profile
(HK$ Million) (%)
4 Company C 148.0 1.6 Listed
(delisted in
January
2023)
Company C was a Hong Kong and Taiwan
newspaper and magazine publisher. It
offered paid subscription for newspaper
and magazine contents and offered news
and media contents through both online
and print media platforms. A winding up
order was made against the company in
December 2021.
5 Company D 107.5 1.2 Listed Company D is a Hong Kong publishing
company, publishes newspaper, magazines
and video contents. The Company also
offers a financial information website and
mobile app that offers real-time financial
information in Hong Kong.
Table 6 Ranking of Leading Online Advertising Companies in Hong Kong, 2021 (Top 5)
Ranking Company Name
Revenue
Receipts
Market
Share
Listing
Status Company Profile
(HK$ Million) (%)
1 Company A 382.7 3.1 Listed Company A is a Hong Kong newspaper,
magazine and books publisher. Its
publication mainly focuses on finance and
business and has a footprint on
information technology as well as lifestyle.
2 NMG Ltd. 231.9 1.8 Private
3 Company B 170.6 1.4 Listed Company B is a Hong Kong media and
publication company. It provides
advertising services and on print and
online media platforms.
4 Company D 121.9 1.0 Listed Company D is a Hong Kong publishing
company, publishes newspaper, magazines
and video contents. The Company also
offers a financial information website and
mobile app that offers real-time financial
information in Hong Kong.
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Ranking Company Name
Revenue
Receipts
Market
Share
Listing
Status Company Profile
(HK$ Million) (%)
5 Company E 51.0 0.4 Listed Company E is a Hong Kong-based
magazine and online media company. It
offers advertising services including video
and print media advertising.
Table 7 Ranking of Leading Online Advertising Companies in Hong Kong, 2022 (Top 5)
Ranking Company Name
Revenue
Receipts
Market
Share
Listing
Status Company Profile
(HK$ Million) (%)
1 Company A 386.5 3.1 Listed Company A is a Hong Kong newspaper,
magazine and books publisher. Its
publication mainly focuses on finance and
business and has a footprint on
information technology as well as lifestyle.
2 NMG Ltd. 229.2 1.8 Private
3 Company B 169.6 1.3 Listed Company B is a Hong Kong media and
publication company. It provides
advertising services and on print and
online media platforms.
4 Company D 114.1 0.9 Listed Company D is a Hong Kong publishing
company, publishes newspaper, magazines
and video contents. The Company also
offers a financial information website and
mobile app that offers real-time financial
information in Hong Kong.
5 Company E 50.4 0.4 Listed Company E is a Hong Kong-based
magazine and online media company. It
offers advertising services including video
and print media advertising.
Source: Euromonitor estimates from custom research and trade interviews with industry stakeholders; Hong
Kong Adspend Report 2022, AdmanGo; WARC Adspend Outlook 2022/23
Note: Euromonitor has conducted primary market research (industry survey / trade interview), including but
not limited to, interviews with leading industry participants, such as advertising companies,
advertisers and members of industry association. The Company was advised by Euromonitor that in
accordance with the guidelines set out by the European Society for Opinion and Market Research
(ESOMAR), a global association for research industry, any disclosure without the subject’s consent
might breach the confidentiality between parties. Euromonitor also advised the Company that it is
maintaining third-party independency and that it is common industry practice for industry consultants
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not to disclose the identities of competitors in ranking tables. The Company has been further advised
by Euromonitor that the information could not be disclosed as the interviewees did not give consent
for such disclosure.
Among the top five leading players in Hong Kong, NMG Ltd. ranked second in online
advertising revenue receipts in consecutive years. In particular, NMG Ltd. and Company E
both have a strong focus on their online media platforms businesses, while Company A and
D have a relative balance on their online and print media businesses. Company B, on the
other hand, has a stronger portfolio in their print media business compared to online media.
In terms of the branding strategy, all the top five companies pursue a multi-brand strategy
by introducing multiple media brands, each of them has its segment focus of contents and
target audience, hence better cater to advertisements with different advertising needs. Among
them, NMG Ltd. owns a total of 9 brands, whilst Company A, B, D and E each owns 4, 10,
6 and 2 media brands, hence both NMG Ltd. and Company B has a well-diversified brand
portfolio compared to Company A, D and E.
NMG Ltd. and Company E are the leading players in Hong Kong solely focus on
non-newspaper media platform businesses, this differentiates them from the other three
leading players which have a mixed focus on both online and traditional medial platform
businesses.
MARKET DRIVERS AND OPPORTUNITIES
Online advertising becomes the rising star under the COVID-19 pandemic
The rapid digital transformation in Hong Kong then caused a structural change in the
industry over the historical period, advertisement spending followed the shift in terms of
consumer daily time spent from traditional media platforms to online media platforms, has
also leaned towards online advertisement. With less geographic and time restriction, online
media platforms became a popular choice for companies to place and plan for their
advertising campaign over the pandemic, making online advertising resilient to the adverse
impact brought by the pandemic, and recorded a 1.0% CAGR, the only advertising media
platform recorded a positive CAGR over the historical period.
The omnichannel retail model creates demand for strategic online advertising campaigns
Recognising the digital landscape evolvement in the Hong Kong market, major retailers
have started to renovate and enhance their omnichannel capabilities to cope with the
dynamic consumer behaviours. The rapid growth in omnichannel transformation, as well as
the usage of online purchases of goods and services, have changed the overall consumer
behaviour of Hong Kong population, in a way that shifted their daily life activities from
offline to online, meaning that the overall time spent on digital devices has been increased,
hence increasing the demand on online advertising solution.
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5G mobile network and high smartphone penetration continue to fertile the industry
growth
The demand of the online advertising industry is correlated to the number of active
digital device users, as well as the average amount of time each user spends on digital
devices. The recently launched 5G mobile network and smartphone technologies are
expected to continue to grow over the forecast period. Besides, the digital transformation in
payment, banking, as well as social networking have yielded success over the historical
period, with the launch of virtual banks, the widespread of digital wallets and social media
platforms, all indicated that the Hong Kong population would spend more time on their
digital devices. With the continued advancement in technologies for internet networks and
online media platforms in Hong Kong, the online advertising industry is now on a well
fertile ground to grow further over the forecast period.
The Greater Bay Area initiative widen the spectrum of targeted audience
The Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation
in the Development of the Greater Bay Area, signed in July 2017, resulting in the
introduction of the five relaxation measures agreed in April 2019, aimed to further facilitate
entry of Hong Kong films and film practitioners into the PRC market, allowing film
contents produced by Hong Kong producers to have less restriction to circulate in the PRC
market.
The integration between Hong Kong and PRC’s creative industries allow advertising
contents created by the Hong Kong advertising industry to reach a wider audience group
stationed in the Greater Bay Area. Besides, the deepened integration also encourages
frequent travelling between Hong Kong and the Greater Bay Area, making advertising
contents in Hong Kong able to deliver to consumers originally stations in the Greater Bay
Area, hence increasing the potential number of targeted customers can be reached by placing
advertising contents in Hong Kong, and driving the growth of the advertising industry.
Social media advertising will continue to drive the industry to grow
The increasing number of Hong Kong consumers usage of mobile devices for payment,
shopping, communication, as well as many other leisure and business activities, has driven
the demand for online advertising solutions from advertisers across all industries.
Over the forecast period, the online advertising industry is expected to grow from
HK$14.9 billion in 2023 to HK$23.0 billion in 2027, at a CAGR of 11.4%, significantly
faster compared to the 1.0% CAGR recorded in the historical period.
Among all segments, social media advertising will continue to be the key growth driver
as online experience would remain the key advertising strategy focus for many
world-leading companies with sales office and retail outlets in Hong Kong. It is expected
that social media advertising will continue to grow at a 12.3% CAGR, from HK$5.5 billion
in 2023 to HK$8.8 billion in 2027, over the forecast period. Other subsegments including
product display, creative and production, as well as strategic services, would also continue to
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grow alongside the online advertising industry, at a 13.7%, 12.0% and 4.6% CAGRs,
respectively over the forecast period, expected to reach HK$6.6 billion, HK$4.7 billion and
HK$3.0 billion by 2027.
THREATS TO THE ONLINE ADVERTISING INDUSTRY
Experience remains an essential element between brands and customers
Current online experience brought by online advertising contents and online shops
layout cannot fully replace the physical experience brought by traditional advertising
contents and physical stores. This is especially the case for a market like Hong Kong where
high population density and well-established transportation infrastructure give people easy
access to traditional advertising contents and physical stores.
Similar observations have also been made by both advertising companies as well as
advertisers. The compact nature of the Hong Kong city landscape and the well-established
transportation system maintained the significance of traditional media advertising, especially
outdoor advertising. The move by e-commerce players has proven the importance of mixed
advertising strategy of online and offline advertising in the local market.
Therefore, advertisers are expected to allocate a significant portion of their advertising
spending to traditional advertising media platforms in order to keep a balanced mix of
advertising strategy, hence constrain the growth of the online advertising industry.
The proliferation of digital content diminished the effectiveness of online advertising
The drawback of rapid development of the digital media industries is that audience are
exposed to growing volume of digital contents, meaning that the time spent on each digital
content would be reduced, even though the total amount of time spent on digital devices is
growing.
Advertisers are being more cautious on the channel, the amount of budget spent on
each solution and services, as well as the effectiveness of selected advertising strategies
before they are willing to place their budget on online advertisement. Industry players then
need to offer a comprehensive and specific online advertising strategy, by integrating
technologies such as AI and big data analysis, to fulfil the rapidly evolving demand of
advertisers.
ENTRY BARRIERS TO THE ONLINE ADVERTISING INDUSTRY
Low barriers of entry would continue to impact the fragmented industry
Align with the advertising industry, there is no license requirement, rigid tariff nor
regulations that repel new players to enter the market.
Among those 3,766 advertising and marketing research establishments in Hong Kong,
recorded by HK Census and Statistic Department in September 2022, the majority of them
offers online advertising services or solutions to certain extents. In 2022, the aggregated
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market share captured by the top five industry players is 7.6%, once again proving the
fragmented nature of the online advertising industry in Hong Kong. With no expected
regulation changes nor notable market entries would take place over the forecast period, it is
expected that the competitive landscape of the online advertising industry would remain
stable and fragmented.
Potential merger and acquisition sharpens the competitive edge of the industry
Besides starting things from scratch, acquiring an established advertising company is
always an option in Hong Kong. Under the era of digitalisation, not all traditional
advertising companies can manage to cope with the transformation well as it can be costly
and risky to develop their own online and social media advertising technologies, solutions
and inventories.
According to the current digital media landscape of Hong Kong, three major segments
of online advertising platforms could be an attractive choice as the target for merger and
acquisition. They are i) digital advertising placement platform, ii) platform service system
platform, and iii) e-commerce solution platform.
Digital advertising placement platforms allow advertisers, especially small to medium
enterprises (SMEs), to make a reservation of advertising inventories on available digital
media platforms. According to the Trade and Industry Department, as of December 2021,
there were over 340,000 SMEs in Hong Kong, which the number grew to over 350,000 as at
November 2022, accounted for more than 98% of the total number of enterprises. Expanding
ownership in platforms that cater to SMEs advertising needs would help acquirers to
strengthen their business reach to the vast number of enterprises locally, hence driving
further growth opportunities and retaining market share in the dynamic market of Hong
Kong. With the latest trend of online advertising and technology-driven automation function,
a digital advertising placement platform would also enable a cost-effective way to drive the
sales of advertisement inventories online.
Platform service system platform refers to digital media platforms that provide updated
information and recommendations on products and services to advertisers and advertising
platforms of certain industry segments. In Hong Kong, it usually refers to the banking,
insurance, foodservice and travel segments. The ongoing boom in the new economies and
digital payment capabilities, as well as the e-commerce market, fuels the demand for such
platforms. Given the rapid growth in e-commerce players and therefore the number of
products and services available online, the amount of time a consumer needs to allocate to
research the best-fit products and services can be disproportionally high compared to the
value of the goods and services itself. Platforms that provide updated information and
recommendations on products and services of specific industry segments with review
consolidation functions would be useful to consumers in helping them to make better
purchasing decisions and would be in demand especially given the busy lifestyle of people
in Hong Kong, hence making it an attractive buy in the industry for acquirers who intended
to widen their spectrum in terms of solutions offered.
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E-commerce solution platforms provide data collection and analytic solutions to help
e-commerce players to understand their current performance, targeted audience’s behaviour,
in order to help their strategic marketing decision-making process. The rise of the
e-commerce market and social media networks in Hong Kong resulted in a growing number
of internet users from 2018 to 2022 at a CAGR of 1.6% and is expected to grow at a CAGR
of 1.0% from 2023 to 2027. The growing number of internet users means that the potential
and target customers for advertisers to reach over online advertising will also continue to
grow, which also increases the overall difficulty of analysing consumer behaviour.
Considering the swift developing e-commerce market in Hong Kong driven by both
digitalisation and the COVID-19 pandemic, acquiring e-commerce solution platforms would
help acquirers to ride on both the swift growth of the online advertising industry, as well as
the e-commerce market in Hong Kong, hence making this segment exposed to potential
merger and acquisition activities.
Euromonitor has conducted custom research and, based on the principal criteria
provided by the Company such as years in operation and amount of web traffic in terms of
average monthly visitors, identified over 20 potential merger and acquisition targets as
described above available in the Hong Kong market in 2022. The numbers of these
platforms are expected to grow alongside the rapid-growth in the e-commerce market which
would drive the demand for these platforms over the forecast period, resulting in more
potential targets being available.
Considering the fragmented nature of the industry, it is expected potential mergers and
acquisitions that could happen over the forecast period would vitalise the overall competitive
landscape of the industry and result in healthy competition, hence accelerate the
development and growth of the online advertising industry of Hong Kong.
MARKET OVERVIEW OF PRINT ADVERTISING INDUSTRY
The print advertising industry in Hong Kong is mainly dominated by two major
sub-categories, magazines and newspaper. Compared to magazines which aim to capture the
audience by specific area of interest, newspaper is the essential media content type that
provides daily news from the global environment to local communities.
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Table 8 The Print Advertising Industry in Hong Kong (2018 – 2027F)*
HK$ billion 2018 2019 2020 2021 2022
CAGR
2018-
2022
Print Advertising 7.2 6.0 3.9 4.5 4.0 -13.5%
Magazines 3.8 2.8 1.2 1.8 1.3 -22.7%
Newspaper 3.4 3.2 2.6 2.8 2.7 -6.0%
HK$ billion 2023F 2024F 2025F 2026F 2027F
CAGR
2023F-
2027F
Print Advertising 3.9 3.7 3.4 3.2 3.1 -5.0%
Magazines 1.6 1.6 1.6 1.5 1.5 -2.1%
Newspaper 2.3 2.0 1.9 1.7 1.7 -7.2%
Source: Euromonitor estimates from customer research and trade interviews with industry stakeholders;
Hong Kong Adspend Report 2022, AdmanGo; WARC Adspend Outlook 2022/2023
* 2023 to 2027 figures are forecasted data based on Euromonitor estimates from customer research and
trade interviews with industry stakeholders
In contrast, apart from finance and business focus magazines, lifestyle, travel, dining
and fashion types of magazines are not seen as part of discretionary spending on media
contents, and the consumption pattern can vary from time to time. Travel magazines, for
example, its demand was boosted by the booming of travel flow driven by the uprising trend
of budget airline over the historical period, whilst the demand then declined since the
outbreak of COVID-19 when most of the travel activities were restricted.
Magazines, in particular, publications for fashion, sports and lifestyle themes, have a
captive audience belonging to the younger demography, and thus are more in tune with the
digitalisation trend over the historical period. This is mainly due to the fact that younger
generations are more open to and adept with to digital devices, hence online content is
comparably more attractive to these younger consumers.
Therefore, over the historical period, while the print advertising industry shrank at a
negative CAGR of 13.5%, from HK$7.2 billion in 2018 down to HK$4.0 billion in 2022, the
newspaper advertising shows a negative CAGR of 6.0%, declining from HK$3.4 billion in
2018 to HK$2.7 billion in 2022. Magazines exhibited a steeper decline at a negative CAGR
of 22.7% over the historical period, dropping from HK$3.8 billion in 2018 to HK$1.3 billion
in 2022, as a result of shifting from print to online media contents.
The ongoing digitalisation of the media and advertising industry is expected to
continue to draw audience from print to online media platforms, similar to the historical
period, but at a slower rate. Such a slowing down of the trend is because the physical touch,
as well as the elder population which is stickier to the reading habit of the print newspaper
and magazines, would remain significant over the forecast period.
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COMPETITIVE LANDSCAPE OF PRINT ADVERTISING INDUSTRY
Over the historical period, the newspaper segment was dominated by roughly ten paid
newspapers, and eight free newspapers, owned by approximately ten companies in Hong
Kong. The relatively concentrated competitive landscape shaped the oligopoly market nature
of the newspaper industry.
In comparison, the magazines industry is more competitive as the Hong Kong market
has long been a popular destination for foreign magazines imported to satisfy local
audience’s penchant for other markets’ culture and lifestyle, namely Japan, South Korea,
Taiwan, Malaysia and other European countries. This led to a relatively fragmented market
of magazines compared to newspaper.
With the ongoing digitalisation trend, as well as the slow decline trend expected over
the forecast period, it is expected that the overall newspaper industry to remain relatively
concentrated, while magazines industry remains fragmented.
MARKET DRIVERS AND OPPORTUNITIES OF THE PRINT ADVERTISING
INDUSTRY
Prior to the widespread of digital platforms and contents, print media players use
different types of paper, ink, paper art, as well as typesetting, to differentiate them from
each other. The physical texture of magazines and newspaper, as well as the creativity
embedded within, is irreplaceable by online media contents which only audio and visual
experience can be delivered to targeted consumers.
The unique character of print publication is expected to sustain print media advertising
in the market.
THREATS TO THE PRINT ADVERTISING INDUSTRY
An increasingly digitalised population reduces the demand for print advertising
While online and outdoor advertising benefit from the change in consumer behaviours
as a result of the rapid digital transformation in Hong Kong, the print advertising platforms,
include both magazine and newspaper, went through a challenging time throughout the
historical period.
To cope with the increasing number of internet and mobile users, magazines and
newspaper publishers in Hong Kong actively launch mobile applications to allow users to
view written and news contents online. Print contents, therefore, have been reduced and
resources were allocated to online content creation and publication, such as advertising
contents.
With the additional online advertising option offered by both magazines and newspaper
publishers, the advertising spending on print media further shifted towards online
advertising, hence held back the overall advertising industry in Hong Kong.
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Over the historical period, both magazines and newspaper platforms recorded shrinkage
at a negative CAGR of 22.7% and 6.0%, respectively. The aggregated sum of print
advertising platforms was the second-worst performer among the advertising industry, after
other advertising which recorded a negative CAGR of 34.5%.
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LA WS AND REGULATIONS IN HONG KONG
This section sets out a summary of major laws and regulations which are relevant to
our business operations in Hong Kong.
During the Track Record Period, we conducted our business in Hong Kong and our
revenue was generated from our operations in Hong Kong. We are principally subject to the
following specific laws and regulations in Hong Kong in relation to our business in addition
to the general laws and regulations applicable to all business carried out in Hong Kong.
GENERAL
There is no specific legislation governing advertising business in Hong Kong. However,
there are several ordinances and regulations containing provisions regarding publication of
our branded contents and advertising and promotion of products and services which may be
relevant to our digital and advertising practice and the breach of these ordinances and
regulations may result in criminal offence. These include the Defamation Ordinance (Chapter
21 of the Law of Hong Kong), the Trade Descriptions Ordinance (Chapter 362 of the Laws
of Hong Kong), the Control of Obscene and Indecent Articles Ordinance (Chapter 390 of the
Laws of Hong Kong), the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of
Hong Kong) and the Copyright Ordinance (Chapter 528 of the Laws of Hong Kong).
In addition, our publication and sales of magazines and books in Hong Kong are
regulated by a number of laws and regulations which include the Book Registration
Ordinance (Chapter 142 of the Laws of Hong Kong), the Registration of Local Newspapers
Ordinance (Chapter 268 of the Laws of Hong Kong) and the Newspapers Registration and
Distribution Regulations (Chapter 268B of the Laws of Hong Kong).
SUMMARY OF THE LA WS AND REGULATIONS OF HONG KONG
Below sets out a summary of the relevant sections of the above mentioned laws and
regulations of Hong Kong.
Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (the “TDO ”)
The TDO aims to prohibit false trade description, false, misleading or incomplete
information, false marks and misstatements in respect of goods, and to false trade
descriptions in respect of services, provided in the course of trade. The definition of trade
description under the TDO is broad, which covers, amongst others, the (i) quantity, size or
gauge, (ii) method of manufacture, (iii) composition, (iv) fitness for purpose, performance or
accuracy, (v) availability, (vi) compliance with a standard specified, (vii) approval by any
person, (viii) a person by whom the goods have been acquired, (ix) the goods being of the
same kind as goods supplied to a person, (x) person by whom manufactured, and (xi) other
history, including previous ownership or use.
Section 7 of the TDO provides that any person who in the course of any trade or
business applies a false trade description to any goods or supplies or offers to supply any
goods to which a false trade description is applied commits an offence.
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Section 7A of the TDO provides that a trader who applies a false trade description to a
service supplied or offered to be supplied to a consumer, or supplies or offers to supply to a
consumer a service to which a false trade description is applied commits an offence.
Under sections 13E, 13F, 13G, 13H and 13I of the TDO, a trader commits an offence if
the trader engages, in relation to a consumer, in a commercial practice that is a misleading
omission or is aggressive, or that constitutes bait advertising, a bait and switch or wrongly
accepting payment for a product.
Anyone who commits an offence under sections 7, 7A, 13E, 13F, 13G, 13H or 13I of
the TDO shall be liable, on conviction on indictment, to a fine of HK$500,000 and to
imprisonment for 5 years, and on summary conviction, to a fine at level 6 (currently is
HK$100,000) and to imprisonment for 2 years.
We may be held liable for the above offences in the operation of our business as the
TDO provides that any reference to a trader in the ordinance includes any person acting in
the name of, or on behalf of, a trader.
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (the
“PDPO”)
The PDPO aims to protect the privacy of individuals in relation to personal data, which
is defined in section 2 of the PDPO as any data (i) relating directly or indirectly to a living
individual; (ii) from which it is practicable for the identity of the individual to be directly or
indirectly ascertained; and (iii) in a form in which access to or processing of the data is
practicable. The PDPO regulates the conducts of a data user, i.e. any person who, either
alone or jointly or in common with other persons, controls the collection, holding,
processing or use of personal data.
In carrying out our Group’s operations, we need to comply with the PDPO and its six
data protection principles (the “ DPPs”), which are:
Principl e 1 – Purpose and manner of collection. It provides that personal data shall
only be collected for a lawful purpose directly related to a function or activity of the data
user. The data collected should be necessary and adequate but not excessive for such
purpose. At the time of collection, a data user must inform the data subjects whether it is
obligatory or voluntary to supply the data, the purpose of using their data and the classes of
person to whom their data may be transferred.
Principle 2 – Accuracy and duration of retention. It requires data users to take all
practicable steps to ensure that personal data is accurate and is not kept longer than is
necessary for the fulfilment of the purpose for which the data is used.
Principl e 3 – Use of personal data. It prohibits the use of personal data for any new
purpose which is not or is unrelated to the original purpose when collecting the data, unless
with the data subject’s express and voluntary consent.
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Principle 4 – Data security. It requires that data users take all practicable steps to
protect the personal data they hold against unauthorised or accidental access, processing,
erasure, loss or use. Data users should have particular regard to the nature of the data, the
potential harm if those events happen, measures taken for ensuring the integrity, prudence
and competence of persons having access to the data, etc.
Principl e 5 – Openness and transparency. It obliges data users to take all practicable
steps to ensure openness of their personal data policies and practices, the kind of personal
data held and the main purposes for holding it.
Principle 6 – Access and correction. It provides data subjects with the right to request
access to and correction of their own personal data. A data user should give reasons when
refusing a data subject’s request to access to or correction of his/her personal data.
In the course of our business, our Group falls within the definition of “data user” under
the PDPO when we possess private and confidential data. Hence, we are subject to the
DPPS and the provisions set out in the PDPO regarding the collection, use, retention,
accuracy and security of and access to personal data. The Office of the Privacy
Commissioner for Personal Data (the “ Commissioner ”) may issue enforcement notice
requiring relevant persons to comply and is entitled to inspect personal data system of a data
user for the purpose of making recommendations on how compliance may be enhanced by
the data user.
Copyright Ordinance (Chapter 528 of the Laws of Hong Kong) (the “Copyright
Ordinance”)
The Copyright Ordinance provides protection for work which includes but not limited
to literary, dramatic, musical and artistic works, sound recordings, films and typographical
arrangement of published editions. Such protection extends to making available to the public
such works on the Internet. Certain copyrights may subsist in the works we create in relation
to our publications, digital media content and advertising materials, including artistic works
(such as artworks and photos), films (such as videos) or literary works (such as text) that
qualify for copyright protection without registration. On the other hand, we have to observe
the copyright of third parties in our publication both on our Digital Media Platforms and in
our print circulations.
The Copyright Ordinance restricts certain acts such as copying and/or issuing or
making available copies to the public of a copyright work without the authorisation from the
copyright owner which, if done, constitutes “primary infringement” of copyright which does
not require knowledge of infringement.
The Copyright Ordinance permits certain acts that can be done in relation to copyright
works without authorisation from the copyright owner, one of which being fair dealing with
a copyright work for the purpose of criticism, review or reporting current events if
accompanied by a sufficient acknowledgement of such copyright work and its author.
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A person, amongst others, imports, exports, possesses, sells, distributes or deals with a
copy of a work which is, and which he knows or has reason to believe to be, an infringing
copy of the work for the purposes of or in the course of any trade or business without the
consent of the copyright owner, may incur civil liability for “secondary infringement” under
the Copyright Ordinance. However, the person will only be liable if, at the time he
committed the act, he knew or had reason to believe that he was dealing with infringing
copies of the work.
Control of Obscene and Indecent Articles Ordinance (Chapter 390 of the Laws of Hong
Kong) (the “COIAO”)
The contents we post on our Digital Media Platforms and publish in our print
publications are subject to the regulations of the COIAO. Subject to the defence provided in
the COIAO, any person who publishes, possesses for the purpose of publication or imports
for the purpose of the publication, any obscene article, whether or not he knows that it is an
obscene article, commits an offence and is liable for a fine of HK$1 million and
imprisonment for three years.
Subject to the defence provided in the COIAO, section 22 of the COIAO provides that
it is an offence to publish any indecent article to a person who is a juvenile, whether it is
known that it is an indecent article or that such person is a juvenile. It is also an offence to
publish any indecent article without sealing such article in wrappers and displaying a notice
as prescribed by the COIAO. Such offences impose a fine of HK$400,000 and imprisonment
of 12 months on first conviction. A second or subsequent conviction will give rise to a fine
of HK$800,000 and imprisonment of 12 months.
The Obscene Articles Tribunal is tasked to classify articles into three classes, namely
Class I – neither obscene nor indecent; Class II – indecent; or Class III – obscene, and
additionally a court or magistrate may, in the course of proceedings, refer an article or
matter to the Tribunal, asking it to determine whether (i) an article is obscene or indecent,
or (ii) the matter is indecent or (iii) the publication of an article or the public display of the
matter is intended for the public good.
Defamation Ordinance (Chapter 21 of the Laws of Hong Kong) (the “DO”)
Any person who maliciously publishes defamatory matter regarding another person or
an organisation in writing or by word of mouth or by conduct may be liable for defamation.
Broadly speaking, there are two main kinds of defamation, which are libel and slander. Libel
is the malicious publication of defamatory matter in writing or in some other permanent
form. Slander is the publication of defamatory matter by word of mouth or in some other
transient (temporary) form.
Section 5 of the DO provides that any person who maliciously publishes any
defamatory libel, knowing the same to be false, shall be liable to imprisonment for two
years, and, in addition, to pay such fine as the court may award.
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There are several defences available. They include but are not limited to (a)
unintentional defamation with an offer of amends; (b) defence of justification, which means
the words were true in substance and in fact; (c) fair comment; and (d) publication which
was privileged as prescribed in the schedule of the DO.
Registration of Local Newspapers Ordinance (Chapter 268 of the Laws of Hong Kong)
(the “RLNO”)
Section 7 of the RLNO provides that every local newspaper shall be registered in
accordance with regulations made under section 18 thereof and section 2 of the RLNO
defines “newspaper” as any paper or other publication and any supplement thereto available
to the general public which (a) contains news, intelligence, occurrences or any remarks,
observations or comments in relation to such news, intelligence, or occurrences or to any
other matter of public interest; and (b) is printed or produced for sale or free distribution
and published either periodically (whether half-yearly, quarterly, monthly, fortnightly,
weekly, daily or otherwise) or in parts or numbers at intervals not exceeding six months.
Section 17(1) of the RLNO provides that the publisher or the printer of every local
newspaper shall, on every day on which that local newspaper is published or on the day next
following (other than a holiday), deliver or cause to be delivered to the Registrar of
Newspapers (the “ Newspapers Registrar ”) of the Office for Film, Newspaper and Article
Administration a copy of that local newspaper and of every published second or other varied
edition or impression thereof.
Section 17(2) of the RLNO further provides that the copy of every local newspaper
delivered to the Newspapers Registrar under subsection (1) shall bear the signature, full
name and address of the printer or publisher thereof or the signature, full name and address
of some other person appointed and authorised by that printer or publisher for that purpose
and whose appointment and authority have been lodged with the Newspapers Registrar.
Section 20(1) of the RLNO provides that any person who contravenes the registration
requirement in the RLNO shall be guilty of an offence and shall be liable, on summary
conviction, to a fine at level 2 (currently is HK$5,000) and imprisonment for one year, and
on conviction, to a fine at level 4 (currently is HK$25,000) and imprisonment for three
years.
Section 20(2) of the RLNO provides that every printer or publisher of a local
newspaper who contravenes section 17 as to the delivery of copies of such local newspaper
at the office of the Newspapers Registrar shall be liable on summary conviction to a fine at
level 1 (currently is HK$2,000).
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Newspapers Registration and Distribution Regulations (Chapter 268B of the Laws of
Hong Kong) (the “NRDR”)
The NRDR, which is the subsidiary legislation of the RLNO provides that the
registration of magazines shall be renewed annually.
Regulation 13(1) provides that distribution of magazines for sale is only permitted by a
licensed newspaper distributor. Regulation 13(3) of the NRDR excludes the licensing
requirement for the retail sale of magazines to any member of the public.
Regulation 19 of the NRDR provides that any person who contravenes the NRDR shall
be guilty of an offence and shall be liable to a fine at level 1 (currently is HK$2,000) and
imprisonment for six months.
Book Registration Ordinance (Chapter 142 of the Laws of Hong Kong) (the “BRO”)
The BRO imposes an obligation on the publisher of a magazine or a book or similar
kind of periodical publication (subject to the exceptions specified in the BRO) that will be
made available to the public at large to deliver five copies of each edition to the Secretary
for Home Affairs of Hong Kong for registration within one month after the magazine or a
book or such periodical publication is published, printed, produced or otherwise made in
Hong Kong. Any person who contravenes such requirement under the BRO shall be guilty of
an offence and shall be liable on conviction to a fine at level 1 (currently is HK$2,000).
LA WS AND REGULATIONS IN THE PRC
Applicable laws and regulations which our PRC subsidiaries shall comply with are set
out below:
REGULATIONS RELATING TO CYBER SECURITY
According to the Cyber Security Law of the PRC
, which
was published by the SCNPC on 7 November 2016 and took effect on 1 June 2017, no
individual or organisation may engage in activities that threaten cybersecurity such as
unlawful intrusion into others’ networks, interfering with the normal functions of others’
network and stealing network data, provide programmes or tools for such intrusions,
interference or stealing, or provide any assistance such as technical support, advertisement,
payment or settlement for any other person if the individual or organisation is fully aware
that such person engages in an activity endangering cybersecurity.
COMPANY LA W
The establishment, operation and management of corporate entities in the PRC is
governed by the Company Law of the PRC
, the “ Company Law ”),
which was promulgated by the SCNPC on 29 December 1993, became effective on 1 July
1994 and subsequently amended on 25 December 1999, 28 August 2004, 27 October 2005,
28 December 2013 and 26 October 2018. The latest Company Law became effective since
26 October 2018.
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The Company Law generally governs two types of companies: limited liability
companies and joint stock limited companies. Both types of companies have the status of
legal persons, and the liability of a company to its creditors is limited to the entire value of
assets owned by the company. Liabilities of shareholders of a limited liability company are
limited to the contributions which they have subscribed. Liabilities of shareholders of a joint
stock limited company are limited to the amount of capital they are legally obliged to
contribute for the shares for which they have subscribed.
REGULATIONS RELATING TO FOREIGN-OWNED ENTERPRISE
The Foreign Investment Law of the PRC
was promulgated
by the SCNPC on 15 March 2019 and became effective on 1 January 2020 and the
Implementing Regulation for the Foreign Investment Law of the PRC
ʕശɛ͏΍ձ਷̮ਠҳ
ૢԷwas promulgated by the State Council on 26 December 2019 and became
effective on 1 January 2020. The State adopts the management system of pre-establishment
national treatment and negative list for foreign investment. Foreign investors shall not invest
in any field with investment prohibited by the negative list for foreign investment access.
Foreign investors shall meet the investment conditions stipulated under the negative list for
any field with investment restricted by the negative list for foreign investment access. For
the fields not included in the negative list for foreign investment access, management shall
be conducted under the principle of consistency for domestic and foreign investment.
According to the Catalogue of Industries for Encouraging Foreign Investment (2022
V ersion)
ོᎸ̮ਠҳ༟ପุͦ፽2022which was jointly promulgated by the National
Development and Reform Committee of the PRC (ึ, the “ NDRC”) and
the Ministry of Commerce ( ਠਕ௅, the “ MOFCOM ”) and implemented on 1 January 2023
and Foreign Investment Access Special Management Measures (Negative List) (2021 V ersion)
૶ఊ2021 (the “ Negative List ”) which was
promulgated on 27 December 2021 and implemented on 1 January 2022, industries for
foreign investment are classified into the encouraged foreign investment industry, restricted
foreign investment industry and prohibited foreign investment industry as listed in the
Negative List. The business engaged by our Group is not listed in the Negative List.
According to the Measures on Reporting of Foreign Investment Information
̮ਠҳ༟
 which was jointly promulgated by the MOFCOM and the State
Administration for Market Regulation on 30 December 2019 and became effective on 1
January 2020, foreign investors carrying out investment activities in China directly or
indirectly shall submit investment information to the commerce administrative authorities
pursuant to these measures. The investment information includes, among others, initial
reports, change reports, deregistration reports and annual reports.
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REGULATIONS RELATING TO EMPLOYMENT AND SOCIAL SECURITY
Labour
The Labour Law of the PRC, which was promulgated by the
SCNPC on 5 July 1994 and was amended on 27 August 2009 and 29 December 2018 (the
latest revised version became effective from 29 December 2018), the PRC Employment
Contract Law
, which was promulgated by the SCNPC on 29
June 2007 and was amended on 28 December 2012 (the latest revised version became
effective from 1 July 2013) and the Implementing Regulations of the Employment Contract
Law of the PRC
ૢԷ, which were promulgated and became
effective on 18 September 2008, regulates the legal relationship between employers and
employees. These laws together stipulate the employment contracts, settlement of labour
dispute, labour remuneration, protection of occupational safety and healthcare, social
insurance and welfare, etc. Written labour contracts must be entered into in order to
establish the labour relationship between employers and employees. Employers are also
required to pay wages no lower than the local minimum wage standards to their employees.
Social Insurance and Housing Provident Funds
The Social Insurance Law of the PRC
, which was
promulgated by the SCNPC on 28 October 2010 and amended on 29 December 2018,
governs the PRC social insurance system. It requires employers and/or employees (as the
case may be) to register social insurance with competent authorities and contribute required
amount of social insurance funds, including funds for basic pension insurance,
unemployment insurance, basic medical insurance, occupational injury insurance and
maternity insurance. Employers who failed to complete social security registration shall be
ordered by the social security administrative authorities to make correction within a
stipulated period; where correction is not made within the stipulated period, the employer
shall be subject to a fine ranging from one to three times the amount of the social security
premiums payable, and the person(s)-in-charge who is/are directly accountable and other
directly accountable personnel shall be subject to a fine ranging from RMB500 to
RMB3,000. Employers who failed to promptly contribute social security premiums in full
amount shall be ordered by the social security premium collection agency to make or
supplement contributions within a stipulated period, and shall be subject to a late payment
fine computed from the due date at the rate of 0.05% per day; where payment is not made
within the stipulated period, the relevant administrative authorities shall impose a fine
ranging from one to three times the amount of the amount in arrears.
Under the Regulations on the Administration of Housing Provident Fund
၍
ଣૢԷ, which was promulgated by the State Council on 3 April 1999 and subsequently
amended on 24 March 2002 and 24 March 2019 respectively, all business entities are
required to conduct registration with local administrative center of housing provident funds,
maintain their housing fund accounts and pay the funds for their employees. Where an
employer fails to undertake payment and deposit registration of housing provident fund or
fails to go through the formalities of opening housing provident fund accounts for its
employees, the housing provident fund management center shall order it to go through the
formalities within a prescribed time limit; where failing to do so at the expiration of the
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time limit, a fine of not less than RMB10,000 nor more than RMB50,000 shall be imposed.
Where an employer is overdue in the payment of, or underpays, the housing provident fund,
the housing provident fund management center shall order it to make the payment within a
prescribed time limit; where the payment has not been made after the expiration of the time
limit, an application may be made to a people’s court for compulsory enforcement.
REGULATIONS RELATING TO FOREIGN EXCHANGE
Foreign exchange in the PRC is mainly regulated by the Foreign Exchange
Administration Regulations
ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ, promulgated by the State
Council on 29 January 1996 and amended on 14 January 1997 and 5 August 2008 (the latest
revised version became effective from 5 August 2008). Renminbi is freely convertible for
current account items, including the distribution of dividends, interest payments, trade and
service-related foreign exchange transactions, but not for capital account items, such as
direct investments, loans, repatriation of investments and investments in securities outside of
the PRC, unless prior approval is obtained from the SAFE and/or prior registration with the
SAFE is made.
On 30 March 2015, SAFE issued the Notice of the State Administration of Foreign
Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of
Foreign-invested Enterprises (
 the
“SAFE Circular 19 ”), which took effect on 1 June 2015. SAFE further issued the Notice of
the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign
Exchange Settlement Management Policy of Capital Account (
ձ஝ᇍ༟͉ධͦഐි၍
, the “ SAFE Circular 16 ”), effective on 9 June 2016, which, among other
things, amend certain provisions of SAFE Circular 19. According to SAFE Circular 19 and
SAFE Circular 16, the flow and use of the Renminbi capital converted from foreign
currency denominated registered capital of a foreign-invested company is regulated such that
Renminbi capital may not be used for business beyond its business scope or to provide loans
to persons other than affiliates unless otherwise permitted under its business scope.
Violations of SAFE Circular 19 or SAFE Circular 16 could result in administrative penalties.
On 26 January 2017, SAFE issued the Notice on Improving the Check of Authenticity
and Compliance to Further Promote Foreign Exchange Control (
ආɓӉપ
, the “ SAFE Circular 3 ”), which stipulates several
capital control measures with respect to the outbound remittance of profit from domestic
entities to offshore entities, including (i) under the principle of genuine transaction, banks
shall check board resolutions regarding profit distribution, the original version of tax filing
records and audited financial statements; and (ii) domestic entities shall hold income to
account for previous years’ losses before remitting the profits.
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REGULATIONS RELATING TO TAXATION
Value-added Tax
According to the Interim Regulations of the PRC on V alue-added Tax ʕശɛ͏΍ձ਷
೼ᅲБૢԷ promulgated on 13 December 1993, amended on 10 November 2008, 6
February 2016 and 19 November 2017 (the latest amendment was implemented from 19
November 2017), and the Detailed Rules for the Implementation of the Interim Regulations
of the PRC on V alue-Added Tax
promulgated on
25 December 1993 and lately revised on 15 December 2008 and 28 October 2011 (the latest
revision became effective from 1 November 2011), all entities and individuals in the PRC
engaging in sale of goods or labour services of processing, repair or replacement, sale of
services, intangible assets, or immovables, or import of goods are required to pay
value-added tax for the added value derived from the process of processing, sale or services.
According to the Notice of the Ministry of Finance and the State Administration of
Taxation on Implementing the Pilot Program of Replacing Business Tax with V alue-Added
Tax in an All-round Manner

and its Appendix 4: Provisions on Zero VAT Rate and Tax Exemption Policies Applicable for
Cross-border Taxable Acts, which
was promulgated by the Ministry of Finance௅and the SA T on 23 March 2016 and
amended on 11 July 2017 and 20 March 2019, the pilot program of the collection of
value-added tax in lieu of business tax shall be promoted nationwide in a comprehensive
manner as of 1 May 2016, and all taxpayer of business tax engaged in the building industry,
the real estate industry, the financial industry and the life service industry shall be included
in the scope of the pilot program with regard to payment of value-added tax instead of
business tax. Zero V A T rate shall apply to sale of the following services by organisations
and individuals in the PRC if the services are provided to overseas organisations and are
fully consumed overseas: R&D services, software services, information system services and
offshore service outsourcing business, etc.
Enterprise Income Tax
Pursuant to the Enterprise Income Tax Law of the PRC (
,
the “ EIT Law ”) promulgated on 16 March 2007, amended on 24 February 2017 and 29
December 2018 (the latest amendment was implemented from 29 December 2018) and the
Implementation Regulations for the Corporate Income Tax Law of the PRC
ʕശɛ͏΍ձ਷
ૢԷ enacted on 6 December 2007 and amended on 23 April 2019,
taxpayers consist of resident enterprises and non-resident enterprises. Resident enterprises
are defined as enterprises that are established in the PRC in accordance with PRC laws, or
that are established in accordance with the laws of foreign countries but whose actual
administration is conducted in the PRC. Non-resident enterprises refers to enterprises that
are established in accordance with the laws of foreign countries and whose actual
administration is conducted outside the PRC, but have established institutions or premises in
the PRC, or have no such established institutions or premises but have income generated
from inside the PRC. Under the EIT Laws and relevant implementing regulations, a unified
enterprise income tax rate of 25% is applicable.
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Pursuant to the Agreement between Mainland China and Hong Kong for the Avoidance
of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income (ʫή
τર, the “ Tax Treaties ”) issued by
the SA T on 21 August 2006, amend on 30 January 2008, 27 May 2010, 1 April 2015 and 19
July 2019, PRC resident enterprises shall pay enterprise income tax in accordance with PRC
law when distributing dividends to their Hong Kong shareholders and 5% withholding tax
rate applies to dividends paid by a PRC company to a Hong Kong resident if the recipient is
a company that holds directly no less than 25% of the capital of the PRC company.
According to the Notice of the State Administration of Taxation on Issues Relating to the
Implementation of Dividend Clauses in Tax Treaties
ૢಛ
issued on 20 February 2009, the proportion of the capitals of the Chinese
resident company directly owned by the Hong Kong shareholders shall, at any time within
the consecutive 12 months before obtaining dividends, satisfy the provisions on the
proportion prescribed in the tax treaty.
In addition, the SA T issued the Announcement of the State Administration of Taxation
on Promulgation of the “ Administrative Measures on Entitlement of Non-residents to
Treatment under Treaties ”
ʮѓ
on 14 October 2019. According to this announcement, non-resident taxpayers which satisfy
the criteria for entitlement to tax treaty benefits may, at the time of tax declaration or
withholding declaration through a withholding agent, enjoy the tax treaty benefits, and be
subject to follow-up administration by the tax authorities.
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HISTORY AND DEVELOPMENT
Our history
Our Company was incorporated in the Cayman Islands on 22 March 2021 and on the
same day became the direct holding company of NMG. NMG is now the holding company
of all of our Group’s subsidiaries.
The first operating company of our Group, WW Publishing, was established under
Emperor International, a listed company which was then controlled by Dr. Albert Y eung, in
1999. On 15 September 2005, Joybridge Services Limited (“ Joybridge ”), a wholly-owned
subsidiary of Emperor International, entered into a sale and purchase agreement with Gain
Wealth Investments Limited (“ Gain Wealth ”), which was then wholly owned by AY
Discretionary Trust, pursuant to which Joybridge agreed to sell to Gain Wealth the entire
shareholding interests in Profit Noble Holdings Limited (“ Profit Noble ”). Profit Noble was
then the holding company of seven of our existing subsidiaries, namely WW Publishing,
New Monday Publishing, NMG Publishing, Media Publishing, NM Services Consultant,
NMG Digital and Time Y ear, as well as engaging in a wide range of diversified businesses
such as wholesale and retailing of furniture, printing and restaurant operations. The sale and
purchase was completed in March 2006 and these seven subsidiaries became privatised and
wholly-owned by AY Discretionary Trust.
On 18 January 2008, by way of internal reorganisation for the purpose of listing, New
Media Group Holdings Limited, a company then wholly-owned by AY Discretionary Trust,
acquired the said seven subsidiaries through NMG. New Media Group Holdings Limited was
subsequently listed on the Main Board on 12 February 2008 (stock code: 708) with AY
Discretionary Trust being interested in 75% of its shareholding.
In November 2010, in order to provide larger premises to cope with its expanding
business scope and the increasing capacity of its operation, New Media Group Holdings
Limited, through Winning Treasure which was its wholly owned subsidiary at the time,
entered into a provisional agreement for sale and purchase for the acquisition of NMG
Tower at the consideration of HK$255 million, being the then market value of NMG Tower
as valued by Savills V aluation and Professional Services Limited. The acquisition was
completed in April 2011, following which the offices and production areas of New Media
Group Holdings Limited and its subsidiaries were moved into NMG Tower.
In early November 2014, Evergrande Real Estate, an independent third party and the
shares of which are listed on the Main Board (stock code: 3333), commenced discussion on
the possible investment in New Media Group Holdings Limited with AY Holdings. On 14
November 2014, considered the indicative terms offered by Evergrande Real Estate being
appropriate, in particular the indicative price of HK$950 million represented a substantial
premium of more than 200% over the market capitalisation of New Media Group Holdings
Limited (based on the share price as quoted on the Stock Exchange on 13 November 2014),
a non-binding memorandum of understanding was entered into between AY Holdings and
Evergrande Real Estate regarding the possible sale and purchase of shares in New Media
Group Holdings Limited. On 25 November 2014, AY Holdings and Evergrande Real Estate
entered into a sale and purchase agreement in relation to the disposal by AY Holdings of its
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 108 ---
entire shareholding in New Media Group Holdings Limited and its subsidiaries (including
NMG) to Evergrande Real Estate at the consideration of HK$950,000,000. As disclosed in
the joint announcement of New Media Group Holdings Limited and Evergrande Real Estate
Group Limited dated 23 December 2014, the consideration of the disposal was determined
with reference to (i) the audited net asset value of New Media Group Holdings Limited and
its subsidiaries as at 30 June 2014, which amounted to approximately HK$456.1 million, (ii)
the terms of the disposal of NMG Tower and the 9.99% interest in NMG (as mentioned
below); and (iii) the listing status of New Media Group Holdings Limited. New Media
Group Holdings Limited subsequently changed its name and is now known as China
Evergrande New Energy V ehicle Group Limited (“ CEG”). The said sale and purchase
agreement was completed on 27 February 2015.
Simultaneously with the said completion, on 27 February 2015, New Media Group
Holdings Limited disposed of its entire shareholding in Jade Talent Holdings Limited (“ Jade
Talent”) which indirectly owned NMG Tower at the time through its wholly owned
subsidiary, Winning Treasure, together with the shareholder’s loan due from Jade Talent to
it, to Emperor International at the aggregate consideration of approximately HK$414.7
million, which represented the consolidated net asset value of Jade Talent as at date of such
disposal (with the carrying value of NMG Tower being revalued from HK$384 million as at
30 June 2014 to HK$420 million as at 24 November 2014 by Cushman & Wakefield
V aluation Advisory Services (HK) Limited (“ C&W”), an independent valuer) and the
amount of the shareholder’s loan. Upon completion of the disposal of Jade Talent, NMG
Publishing entered into leaseback agreement of NMG Tower with Winning Treasure for a
term of 3 years at the monthly rent of HK$1,225,000 (exclusive of government rent and
rates, management fees and other outgoings), which C&W considered was fair and
reasonable, to ensure the operation of the publishing business of New Media Group
Holdings Limited would be unaffected. As disclosed in the section headed “Connected
Transactions – Discontinued Connected Transactions” in this prospectus, our Group
continued to rent various parts of NMG Tower from Winning Treasure for our operation
during the Track Record Period. On the other hand, in order to retain an interest in NMG to
ensure smooth transition as well as to ensure minimal effect on the business operation as a
result of the change in controlling shareholder, at the same time AY Discretionary Trust
acquired 9.99% interests in NMG through Rawlings Limited (now known as NMG
Investment), a company under the AY Discretionary Trust, at a consideration agreed to be
9.99% of the consolidated net asset value of NMG as at completion. Based on the
consolidated net asset value of NMG at that time of approximately HK$103 million, the
consideration was HK$10.3 million. Such disposal of interest in NMG to AY Discretionary
Trust and the disposal of NMG Tower were special deals under Note 4 to Rule 25 of the
Takeovers Code which has been approved by the independent shareholders of CEG and to
which the Executive had granted his consent. NMG then became owned as to 90.01% by an
independent third party and 9.99% by AY Discretionary Trust. NMG at that time retained the
entire equity interest in the said seven subsidiaries and also established Reach Gain and
Guangdong Xinchuan. Their revenue was mainly derived from the publication and marketing
of Chinese language periodic magazines, books and sale of advertising spaces in the
magazines.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
–9 9–


--- page 109 ---
In September 2017, AY Discretionary Trust acquired 90.01% interests in NMG from
CEG, and accordingly AY Discretionary Trust increased its interests in NMG from 9.99% to
100%, pursuant to a sale and purchase agreement dated 26 September 2017 entered into
between Right Bliss Limited, a company under CEG, as vendor and Future Blossom
Limited, a wholly-owned subsidiary of AY Holdings, in respect of 90.01% equity interest in
NMG and the entire loan due and payable by NMG to Right Bliss Limited as at completion
thereof, at the aggregate consideration of HK$63 million. The said consideration of HK$63
million was determined after taking into account the historical financial performance of
NMG and its then subsidiaries up to 31 August 2017, the unaudited carrying amount of the
subject shares of approximately HK$18.48 million as at 31 August 2017 (being 90.01% of
the net asset value of NMG and its subsidiaries) and the unaudited carrying amount of the
loan due from NMG to the vendor of approximately HK$55.57 million as at 31 August
2017. At the time of completion of the acquisition on 9 November 2017, NMG was the
holding company of our subsidiaries as at the commencement of the Track Record Period
except New Monday Publishing. As disclosed in the circular of CEG in relation to such
transaction dated 19 October 2017, the profit after taxation of NMG and its subsidiaries
dropped from approximately HK$117 million for the 18 months ended 31 December 2015 to
approximately HK$4.33 million for the year ended 31 December 2016, and CEG, in view of
the increasingly challenging and uncertain business environment in the media segment,
considered that the disposal of such operation would enable it to focus on the strategic
development in its healthcare business. The consolidated net asset value of NMG was
HK$20.54 million as at 31 August 2017, which had significantly dropped as compared to
that as at 27 February 2015. On the other hand, AY Discretionary Trust, being familiar with
the business and believe that, riding on the strong brand recognition of NMG, its continual
transformation into a digital media business would made NMG well-positioned to capitalise
on the growing demand for digital advertising, and eventually turnaround the performance of
the business and taken into account the consideration amount, believed it to be an attractive
investment opportunity and decided to acquire the 90.01% interest in NMG from CEG.
New Monday Publishing was disposed of by CEG in 2016 to Top Wheel Holdings
Limited (“ Top Wheel ”) at the consideration of HK$200,000. As disclosed in CEG’s
announcement dated 29 June 2016, Top Wheel and its ultimate beneficial owner, Mr. Wong
Chun Loong, were third parties independent of CEG and its connected persons, and the said
consideration was determined after taking into account the then unaudited net asset deficit of
New Monday Publishing of approximately HK$21 million. CEG stated in its announcement
that the disposal would reduce its loss and enable it to streamline its business. Our Group
has no business relationship with CEG since then and, for the avoidance of doubt, no
amount is owing by CEG to our Group as at the Latest Practicable Date.
In order to consolidate the media business under NMG for future development, AY
Discretionary Trust acquired New Monday Publishing from Top Wheel on 15 December
2017 at the consideration of HK$100,000, taking into account the increase in the unaudited
net asset deficit of New Monday Publishing to approximately HK$22.4 million as at 30
September 2017. From then on, NMG and all our subsidiaries as at the commencement of
the Track Record Period became wholly beneficially owned by AY Discretionary Trust.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 110 ---
After re-acquiring the entire interest in NMG, AY Discretionary Trust initiated plans
with Mr. Royce Lee, our CEO, with a view to revamp the business and performance of
NMG and to accelerate its transformation from traditional printing to digital media. On 29
December 2017, in order to align the interest of Mr. Royce Lee with that of our Group by a
participation in equity, NMG Investment (a company wholly owned by AY Discretionary
Trust) entered into an agreement for sale and purchase with Double Blossoms, a company
wholly owned by Mr. Royce Lee, for the sale by NMG Investment to Double Blossoms of
3,000 shares (representing 30% of the entire issued share capital) of NMG at the
consideration of HK$75 million, which was arrived at after arm’s length negotiation with
reference to the prospect of our Group. The sale and purchase was completed on the same
day and NMG became held as to 70% by NMG Investment (a company wholly owned by
AY Discretionary Trust) and 30% by Double Blossoms.
On 14 June 2019, Double Blossoms sold and transferred to Double Fantastic 1,000
shares (representing 10% of the entire issued capital) of NMG, at the consideration of
HK$20 million. By such time Double Blossoms has become entitled to dividends of
HK$13.5 million declared by NMG. The consideration therefore represented approximately
the pro rata net cash investment of Double Blossoms.
From then on, NMG is owned as to 70% by NMG Investment (a company wholly
owned by AY Discretionary Trust), 20% by Double Blossoms and 10% by Double Fantastic.
Double Fantastic is wholly owned by Ms. V enus Lee, the managing director of the Business
Unit “Economic Digest”. Ms. V enus Lee joined our Group in January 2018. Prior to joining
our Group, Ms. V enus Lee had over 20 years’ experience in marketing and brand
management and specialised in digital marketing. Mr. Royce Lee got acquainted with her
around mid 1990 when they both worked in Nestlé China Limited. Ms. V enus Lee and Mr.
Royce Lee became business partners when Mr. Royce Lee invested in e-Crusade Marketing
Co. Ltd. (“ e-Crusade ”) , a company of which Ms. V enus Lee was also shareholder and
director, in 2001. As disclosed in Mr. Royce Lee’s biography under the section “Directors,
Senior Management and Employees” of this prospectus, e-Crusade was a start-up creative
agency for digital marketing and was acquired by aQuantive International Holdings, Inc., a
leading interactive marketing services firm in the U.S., in 2006. At the time Ms. V enus Lee
held a 41% interest in e-Crusade too and after selling her shares she became employed as
co-managing director of e-Crusade until 2010, and she was the chief innovation officer when
she left e-Crusade in 2011. Other than their investment in e-Crusade Ms. V enus Lee and Mr.
Royce Lee were also joint venture partners, either just between the two of them or with
other partners, in various other business ventures, such as Aedify Technology Limited (also
disclosed in the biography of Mr. Royce Lee in the aforesaid section) and FeedMe Limited
(as disclosed under the paragraph “Relationship with Controlling Shareholders – Competing
Interest” of this prospectus). Each of Mr. Royce Lee and Ms. V enus Lee confirmed that
since their respective joining of the Group, none of their business joint ventures were
engaged in business which competed, competes or was or is likely to compete with our
Group’s business. Save for being business partners, during the Track Record Period Mr.
Royce Lee obtained two interest bearing loans from Ms. V enus Lee which have been fully
repaid. Each of Mr. Royce Lee and Ms. V enus Lee confirmed that they do not have any
family relationships and, save for being business partners and the loan arrangements as
aforesaid, they have no employment, trust, financing or other relationships, whether past or
present. Each of Mr. Royce Lee and Ms. V enus Lee further confirmed that no companies of
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 111 ---
which he/she hold interests has entered into any transactions with our Group during the
Track Record Period. Ms. V enus Lee entered into an employment contract with a subsidiary
of the Group, under which her remuneration amounted to approximately HK$1.5 million,
HK$1.5 million and HK$1.3 million respectively for each of the financial year during the
Track Record Period.
Business Milestones
The milestones events in the history of our business development are set out below:
1999 our Group was founded with the incorporation of WW
Publishing (then known as Smart Ideal Limited) in May 1999
and published the magazine “
อ৿ಂ (Weekend Weekly)”
2000 our Group published and launched a new magazine, “ อMonday
(New Monday)” in October 2000
2001 our Group acquired the publication right and trade mark of “؇
˙อή (Oriental Sunday)” and relaunched in Hong Kong “˙
อή (Oriental Sunday)” with its supplementary booklet,
namely, “More”
June 2003 NMG Publishing (then known as Economic Digest Publications
Limited), the then publisher of the magazine “ ຾᏶ɓ඄
(Economic Digest)”, was transferred from a subsidiary of
Emperor International to our Group
2006/2007 our Group created and launched websites for “
˙อή
(Oriental Sunday)” and “ อ৿ಂ (Weekend Weekly)”
2010/2011 our Group launched a new online business unit and started
generating online income
2011 New Monday developed the first fully interactive iPad digital
magazine in Hong Kong showcasing interactive effects such as
direct-streaming videos and 360 rotation features
by 2014 all of our Group’s flagship brands have already developed and
launched their own digital platforms that extend into different
channels and devices
March 2017 our Group’s monthly website sessions has reached 30,000,000
2018 our Group launched our influencer network, Zolar
September 2019 our Group obtained the license to publish a Hong Kong edition
of “Madame Figaro” magazine
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 112 ---
2020 our Group has launched mobile applications for “Weekend
Weekly”, “Economic Digest”, “More”, “Oriental Sunday”,
“Sunday Kiss”, “GOtrip” and “New Monday”, and has
achieved a total download of over 400,000 within one year
Corporate history and structure
Our Company is an investment holding company incorporated in the Cayman Islands
on 22 March 2021 and became the holding company of our Group on 22 March 2021 as a
result of the Reorganisation. Details of the Reorganisation are set out in paragraph headed
“Reorganisation” in this section.
Immediately prior to the Reorganisation, our Group comprised of the following
subsidiaries and the corporate history of each of these subsidiaries is set out below.
NMG Publishing
On 14 July 1981, NMG Publishing, then known as Honvest Market Research Limited,
was incorporated in Hong Kong with limited liability.
On 13 April 1984, the company name was changed to Economic Digest Publications
Limited and a Chinese name
ʮ̡ was added on 12 June 1984. The Chinese
company name was subsequently changed toʮ̡ on 29 December
2000. On 29 July 2005, the English company name was changed to New Media Group (HK)
Limited, which was changed to Silver Road Investments Limited and then to World Sources
(HK) Limited on 22 September 2005 and 28 February 2006 respectively. On 25 February
2013, the company name was changed to New Media Group Publishing Limited
و
ʮ̡.
NMG Publishing became a wholly-owned subsidiary of NMG on 18 January 2008. It
was disposed of to an Independent Third Party together with NMG on 27 February 2015,
and re-acquired by AY Holdings through its subsidiary on 9 November 2017. It is principally
engaged in the provision of equipment services to our Group and digital and print media
businesses.
NMG Digital
On 4 July 1997, NMG Digital, then known as Lightwell Limited, was incorporated in
Hong Kong with limited liability. The company name was changed to Hong Kong Media
Services Company Limited and then to New Media Group Digital Services Limited on 14
July 2004 and 25 February 2013 respectively.
NMG Digital became a wholly-owned subsidiary of NMG on 18 January 2008. It was
disposed of to an Independent Third Party together with NMG on 27 February 2015, and
re-acquired by AY Holdings through its subsidiary on 9 November 2017. It is principally
engaged in investment holding and digital media business.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 113 ---
WW Publishing
On 7 May 1999, WW Publishing, then known as Smart Ideal Limited, was incorporated
in Hong Kong with limited liability. The company name was changed to Weekend Weekly
Publishing Limited on 25 February 2013.
WW Publishing became a wholly-owned subsidiary of NMG on 12 February 2008. It
was disposed of to an Independent Third Party together with NMG on 27 February 2015,
and re-acquired by AY Holdings through its subsidiary on 9 November 2017. It is principally
engaged as registered publisher.
New Monday Publishing
On 17 December 1999, New Monday Publishing, then known as Wide Connection
Limited, was incorporated in Hong Kong with limited liability. The company name was
changed to New Monday Publishing Limited on 25 February 2013.
New Monday Publishing first became a wholly-owned subsidiary of our Group on 18
January 2008. It was disposed of to an Independent Third Party together with NMG on 27
February 2015 and re-acquired by AY Discretionary Trust through its subsidiary (then
wholly-owned by AY Discretionary Trust) on 15 December 2017. It is principally engaged as
registered publisher.
Media Publishing
On 18 February 2000, Media Publishing, then known as Pacific Globe Limited, was
incorporated in Hong Kong with limited liability. On 29 September 2005 and 25 February
2013, the company name was changed to New Media Group (HK) Limited and then to
Media Publishing Limited respectively.
Media Publishing became a wholly-owned subsidiary of NMG on 18 January 2008. It
was disposed of to an Independent Third Party together with NMG on 27 February 2015,
and re-acquired by AY Holdings through its subsidiary on 9 November 2017. It is the
registered publisher of “Economic Digest” and is principally engaged in magazine and book
publishing, digital and print media businesses and copyright holding.
NM Services Consultant
On 14 April 2000, NM Services Consultant, then known as Sunpark Limited, was
incorporated in Hong Kong with limited liability. The company name was changed to eDaily
Publishing Limited and then to Economic Digest Publishing Limited on 23 August 2000 and
30 May 2001 respectively. The company name was subsequently changed to New Media
Services Consultant Company Limited on 27 November 2014.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 114 ---
NM Services Consultant became a wholly-owned subsidiary of NMG on 18 January
2008. It was disposed of to an Independent Third Party together with NMG on 27 February
2015, and re-acquired by AY Holdings through its subsidiary on 9 November 2017. It is the
registered publisher of “Oriental Sunday”, and is principally engaged in provision of
administrative services for our Group.
Time Y ear
On 3 November 2000, Time Y ear was incorporated in Hong Kong with limited liability.
Time Y ear became a wholly-owned subsidiary of NMG on 18 January 2008. It was
disposed of to an Independent Third Party together with NMG on 27 February 2015, and
re-acquired by AY Holdings through its subsidiary on 9 November 2017. It is principally
engaged in trademark holding and licensing.
NMG
On 15 August 2007, NMG, then known as Merslake Limited, was incorporated in BVI
with limited liability. On 18 January, 2008, it became the intermediate holding company of
various subsidiaries of our Group and became wholly-owned by New Media Group Holdings
Limited (a company listed on the Stock Exchange). Details of the subsequent changes of
shareholders of NMG was set out in the sub-section headed “Our history” above. NMG
became wholly owned subsidiary of AY Discretionary Trust once again on 9 November 2017
and it became a wholly owned subsidiary of our Company on 22 March 2021 under and
pursuant to the Reorganisation.
The company name was changed to New Media Enterprise Investment Limited on 29
May 2012 and was subsequently changed to New Media Group Limited on 26 November
2014.
Guangdong Xinchuan
Guangdong Xinchuan, formerly known as
ʮ̡ (Guangdong
Xinchuan Publishing Technology Development Co Ltd*), was established in the PRC on 10
September 2008 with limited liability, and wholly-owned by NMG Digital (then known as
Hong Kong Media Services Company Limited). It was disposed of to an Independent Third
Party together with NMG and NMG Digital on 27 February 2015, and re-acquired by AY
Holdings through its subsidiary on 9 November 2017.
The company name was changed to
ʮ̡ (Guangdong Xinchuan
Network Technology Company Limited*) on 18 June 2019.
Guangdong Xinchuan is principally engaged in provision of information technology
support services to our Group for the development and maintenance of our Group’s websites,
apps and operating systems.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 115 ---
Reach Gain
On 26 May 2010, Reach Gain was incorporated in Hong Kong with limited liability
and on 8 July 2010 was acquired by NMG from a corporate service provider (which was an
Independent Third Party of our Group) and became a wholly owned subsidiary of our
Group. It was disposed of to an Independent Third Party together with NMG on 27 February
2015, and re-acquired by AY Holdings through its subsidiary on 9 November 2017.
Reach Gain is principally engaged in digital media business.
NMG (HK)
On 5 June 2019, NMG (HK) (then known as Sheen Aim Limited) was incorporated in
Hong Kong with limited liability and on 29 July 2019 was acquired by NMG from a
corporate service provider (which was an Independent Third Parties of our Group) and
became a wholly-owned subsidiary of our Group. The company name was changed to NMG
(Hong Kong) Company Limited on 30 July 2019. NMG (HK) is the registered publisher of
“Madame Figaro” Hong Kong and is principally engaged in magazine publishing and digital
and print media businesses.
Fast Fame
On 1 June 2018, Fast Fame was incorporated in Hong Kong with limited liability. Fast
Fame first became an indirect wholly-owned subsidiary of our Group on 3 September 2018.
It was disposed of to NMG Investments (through the sale and purchase of its then
immediate holding company at the nominal consideration of HK$1) on 15 March 2019, and
re-acquired by NMG at the nominal consideration of HK$1 on 1 January 2020. It was
inactive both at the time of its disposal to NMG Investment and its re-acquisition by NMG
and is then principally engaged in digital media business.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 116 ---
REORGANISATION
In preparation of the Listing, the companies comprising our Group underwent the
Reorganisation, pursuant to which our Company became the holding company of our Group.
Set out below is the corporate structure of our Group immediately before the Reorganisation:
The Albert Yeung Discretionary Trust
Note
Albert Yeung Holdings Limited
(BVI)
New Media Group Investment Limited
(Anguilla)
20%70% 10%
New Media Group Limited
(BVI)
Double Blossoms Limited
(BVI)
Double Fantastic Group Limited
(BVI)
Time Year
Limited
(HK)
New
Monday
Publishing
Limited
(HK)
Weekend
Weekly
Publishing
Limited
(HK)
New
Media
Group
Publishing
Limited
(HK)
Media
Publishing
Limited
(HK)
NMG
(Hong
Kong)
Company
Limited
(HK)
New
Media
Group
Digital
Services
Limited
(HK)
ᑚෂ
Ҧ
ʮ̡
(PRC)
Reach
Gain
Limited
(HK)
New
Media
Services
Consultant
Company
Limited
(HK)
Fast Fame
Limited
(HK)
100%
100%
100%
100%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Note: AY Discretionary Trust is a discretionary trust of which Dr. Albert Y eung is the settlor and founder and
First Trust Services AG is the trustee.
The Reorganisation involved the following material steps:
A. Incorporation NMLG Holdings
On 10 March 2021, NMLG Holdings was incorporated in BVI and authorised to
issue a maximum of 50,000 shares with a par value of US$1.00 each, out of which 1
share has been allotted and issued to NMG Investment as founder member. NMLG
Holdings is an investment holding company.
On 22 March 2021, by way of capital contribution, NMG Investment transferred
7,000 shares (representing 70% equity interest) in NMG to NMLG Holdings at nil
consideration.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
– 107 –


--- page 117 ---
B. Incorporation of our Company
On 22 March 2021, our Company was incorporated in the Cayman Islands with an
authorised share capital of HK$50,000 divided into 5,000,000 Shares of HK$0.01 each,
of which the 1 subscriber share has been transferred to NMLG Holdings, and 6,999
Shares, 2,000 Shares and 1,000 Shares were allotted and issued to NMLG Holdings,
Double Blossoms and Double Fantastic respectively on the same date.
Our Company was registered under Part 16 of the Companies Ordinance as a
non-Hong Kong company on 22 April 2021.
C. Acquisition of subsidiaries by our Company
(a) Transfer of shares in NMG to our Company
On 22 March 2021, our Company, NMLG Holdings, Double Blossoms and
Double Fantastic entered into a share for share exchange agreement to give effect
to the share exchange that NMLG Holdings, Double Blossoms and Double
Fantastic transferred all shares each of them held in NMG to our Company, and in
return our Company allotted and issued 7,000 Shares, 2,000 Shares and 1,000
Shares respectively to NMLG Holdings, Double Blossoms and Double Fantastic
so that their attributable shareholding interests in our Company would be the same
as in NMG immediately before the share exchange.
Upon completion of the said share exchange on 22 March 2021, NMG
became a wholly-owned subsidiary of our Company.
(b) Distribution in kind by NMG Investment
On 22 March 2021, NMG Investment transferred its entire interests in
NMLG Holdings, being 1 share of US$1 (representing the entire issued share
capital) of NMLG Holdings, as distribution in kind to AY Holdings.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 118 ---
The following chart sets out the shareholding and corporate structure of our Group
after the Reorganisation and as at the Latest Practicable Date:
Albert Yeung Holdings Limited
(BVI)
The Albert Yeung Discretionary Trust
Note
New Media Lab Group Holdings Limited
(BVI)
20%70% 10%
New Media Lab Limited
(Cayman Islands)
New Media Group Limited
(BVI)
Double Blossoms Limited
(BVI)
Double Fantastic Group Limited
(BVI)
Time Year
Limited
(HK)
New
Monday
Publishing
Limited
(HK)
Weekend
Weekly
Publishing
Limited
(HK)
New
Media
Group
Publishing
Limited
(HK)
Media
Publishing
Limited
(HK)
NMG
(Hong
Kong)
Company
Limited
(HK)
New
Media
Group
Digital
Services
Limited
(HK)
ᑚෂ
Ҧ
ʮ̡
(PRC)
Reach
Gain
Limited
(HK)
New
Media
Services
Consultant
Company
Limited
(HK)
Fast Fame
Limited
(HK)
100%
100%
100%
100%
100%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Note: AY Discretionary Trust is a discretionary trust of which Dr. Albert Y eung is the settlor and founder and
First Trust Services AG is the trustee.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
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--- page 119 ---
CORPORATE STRUCTURE AFTER LISTING
The following chart sets out the shareholding and corporate structure of our Group
immediately after completion of the Share Offer:
Albert Yeung Holdings
Limited (BVI)
The Albert Yeung Discretionary Trust
Note
New Media Lab Group
Holdings Limited (BVI)
15%52.5% 7.5%
New Media Lab Limited
(Cayman Islands)
New Media Group Limited
(BVI)
Double Blossoms
Limited (BVI)
Double Fantastic Group
Limited (BVI)
25%
Public Shareholders
Time Year
Limited
(HK)
New
Monday
Publishing
Limited
(HK)
Weekend
Weekly
Publishing
Limited
(HK)
New
Media
Group
Publishing
Limited
(HK)
Media
Publishing
Limited
(HK)
NMG
(Hong
Kong)
Company
Limited
(HK)
New
Media
Group
Digital
Services
Limited
(HK)
ᑚෂ
Ҧ
ʮ̡
(PRC)
Reach
Gain
Limited
(HK)
New
Media
Services
Consultant
Company
Limited
(HK)
Fast Fame
Limited
(HK)
100%
100%
100%
100%
100%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Note: AY Discretionary Trust is a discretionary trust of which Dr. Albert Y eung is the settlor and founder and
First Trust Services AG is the trustee.
HISTORY, REORGANISATION AND CORPORATE STRUCTURE
–1 1 0–


--- page 120 ---
OVERVIEW
We are a digital media company, providing integrated advertising solutions to
advertisers ranging from multi-national brand owners, advertising agencies to SMEs
primarily through our Digital Media Platforms. We produce and distribute contents on
diverse areas of interest under our different well-known and popular media brands. Coupled
with our strong digital media presence, including our own websites and mobile apps as well
as on third party social media platforms such as Facebook, Instagram, Y outube and
LinkedIn, we are able to reach and attract different types of audience, which in turn
generates value for our advertisers. We have now fully transformed from a traditional
publication media business into a leading player in the digital media landscape ranking,
according to the Euromonitor Report, second amongst online advertising companies in Hong
Kong for three consecutive years of 2020, 2021 and 2022 in terms of revenue with a market
share of approximately 1.9%, 1.8% and 1.8% respectively. To complement our Digital Media
Platforms we still maintained, though with diminishing importance as compared to our
digital business, the publication of some magazines and travel guidebooks in which
advertisers can also place advertisements.
During the Track Record Period and as at the Latest Practicable Date, our Group
operates nine (9) media brands, namely “
อ৿ಂ” (Weekend Weekly), “˙อή” (Oriental
Sunday), “ ຾᏶ɓ඄” (Economic Digest) and “ อMonday” (New Monday / NM+) which
started off as print magazines in the early 2000s and have a strong heritage, as well as
More, GOtrip, Sunday Kiss, and two more recent brands SSwagger and Madame Figaro
introduced in 2018 and 2019 respectively. They offer contents ranging from lifestyle such as
dining and local attractions, gourmet and gastronomy, fashion, beauty and travel,
entertainment news, kids and parenting, electronic gadgets and gaming to designer and
luxury labels, finance and investment related contents. Our Group strives to stay on top of
trends, being adaptive to market changes based on viewer preferences and continue to create
contents that interest our audience and to ensure viewership and internet traffics.
With our reach to audience of different categories on multiple media platforms, we are
able to offer integrated advertising solutions to and cater for the different advertising needs
of our clients. We provide a wide spectrum of advertising products and services including
display banners, advertorials and reviews, social newsfeeds, creative and production, across
our Digital Media Platforms and in our print circulations, whether alone or in different types
of combinations or even as part of an advertising campaign to achieve maximum exposure
and publicity. Other than conventional advertising products, we also utilise features of
search engines to provide strategic services including segment marketing and SEO which
help our clients to rank their information higher in search engines and improve their online
visibility. Furthermore, we also offer our digital advertisement inventories to third party
SSPs to extend our reach of advertisers.
During the Track Record Period, we published the weekly Economic Digest Magazine,
the quarterly Madame Figaro Magazine and the weekly 3-in-1 Oriental Sunday Magazine,
which we ceased with the last issue in December 2020 in view of the trend for audience to
move online. In 2021 we published the quarterly Weekend Weekly x GOtrip Magazine but
the 2022 issues were cancelled as tourism travelling has been restricted due to the fifth wave
of the COVID-19 pandemic.
BUSINESS
– 111 –


--- page 121 ---
For the three financial years ended 31 December 2020, 2021 and 2022, our income
derived from digital business amounted to approximately HK$180.3 million, HK$231.9
million and HK$229.2 million, representing approximately 85.2%, 94.6% and 95.2% of our
revenue, respectively, and income derived from circulation of our publication and
advertisements in print circulation amounted to approximately HK$31.3 million, HK$13.3
million and HK$11.5 million, representing approximately 14.8%, 5.4% and 4.8% of our
revenue, respectively.
COMPETITIVE STRENGTHS
We believe our success and future potentials are attributable to our competitive
strengths which include the following:
Strong digital presence reaching millions of audience and brand recognition
We have a strong digital presence with millions of subscribers that follow our
contents on our websites, mobile applications and third party social media platforms.
As at the end of the Track Record Period, we have 9 media brands, with 10 fanpages
on Facebook recorded a total of over 7.4 million followers and 9 profiles on Instagram
recorded over 1.2 million followers. The 9 websites operated by our Group recorded
unique visits of over 156.7 million for the year ended 31 December 2021 and exceeded
219.7 million for the year ended 31 December 2022. Such social media engagement
creates an ideal platform for advertisers to communicate with and collect feedback
from their current and potential consumers and broaden their reach.
We believe such immense digital presence is created in association with a strong
recognition for our media brands generated by our engaging contents and effective
social media strategy. Such popularity would in turn attract more attention from the
advertisers, thereby propelling our business.
We are a frontrunner in providing online marketing solutions and have
transformed from a traditional publisher providing advertising solutions solely in our
magazines and books to a leading digital media company. Our Group established a new
online business unit as early as 2011 to proactively explore business opportunities for
online and mobile content development. By 2014, all of our Group’s then flagship
brands have already developed and launched their own digital platforms that extended
into different channels and devices. According to the Euromonitor Report, our Group
ranked second amongst online advertising companies in Hong Kong for three
consecutive years of 2020, 2021 and 2022 in terms of revenue with a market share of
approximately 1.9%, 1.8% and 1.8% respectively.
We believe our strong digital presence, frontrunner advantage with accumulated
experience in digital business and leading market position differentiate us from our
competitors and well position us to capture the momentum in this fast-growing
industry.
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Diversified and strong audience base to attract advertising clients with different
target audience
Our business model thrives on our ability to attract a wide range of audience,
followers and visitors to our media platforms. As at the Latest Practicable Date, we
have nine (9) media brands, in particular the well-known and popular Weekend Weekly,
More, GOtrip and New Monday, each with dedicated content pillars covering a broad
spectrum of area of interests including but not limited to dining and local attractions,
gourmet and gastronomy, fashion, beauty and travel, entertainment news, kids and
parenting as well as electronic gadgets and gaming, finance and investment, designer
and luxury labels, appealing to audience with an extensive demographic background.
We gain insight in the rapidly changing trends of the market as well as
preferences and taste of consumers of different sectors. Thus, we are able to respond to
such changes by providing current and relevant contents to the target audience of our
clients, thereby able to retain our audience, which can continually attract clients’
engagement for our advertising services. As at the end of the Track Record Period, the
total number of followers of the 10 Facebook fanpages and 9 Instagram profiles under
the principal Digital Media Platforms operated by our Group has exceeded 7.4 million
and 1.2 million respectively; for the year ended 31 December 2021, our 9 websites
recorded unique visits of over 156.7 million with cumulative web impressions reaching
over 2.6 billion; and for the year ended 31 December 2022 recorded unique visits of
over 219.7 million with cumulative web impressions reaching over 4.2 billion.
Despite the fact that each of our media brands has their own dedicated content
pillars, occasionally materials or topics for content development of our respective
media brands may overlap. Our media brands may share raw materials collected by the
Group yet develop specific contents from different perspectives and with respective
media brand’s character which suit the taste of their own target audience. On the other
hand, given that our media brands are each established brands with their own market
positioning and respective audience base, one of the unique features of our Group is
that our media brands will collaborate with each other as different media platform. For
instance the launching of the Weekend Weekly x GOtrip Magazine in early 2021 is an
attempt to bring together Weekend Weekly’s strong presence in provision of lifestyle
contents and GOtrip’s expertise in exploring local excursion or scenic spots. The
versatility of our media brands and their contents, whether developed collectively or
individually, helps to keep our audience freshened. We believe that our diversity and
relevance in terms of contents and distribution channels provides extensive choices to a
deep range of clients to suit their individual advertising models, objectives and
budgets.
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Capability of offering broad range of advertising products and services and
tailor-made solutions to clients
We offer a wide spectrum of advertising products on different media platforms
and integrated services to advertisers. Form of our advertising solutions includes but is
not limited to display banners, advertorial and reviews, social newsfeeds, creative and
production and strategic services such as SEO and segment marketing. We have an
in-house Platform Team dedicated to analysing audience behaviour on our media
platforms via analytic tools which allows us to gain insights into our target audience
and their preferences. We believe that such analysis gives us with a deeper
understanding of our audience and those of our competitors so that we can have a
better grasp of the market trends in creating our contents and to improve the efficiency
of communication between the advertisers and their target audience through advertising
on the appropriate media platforms.
As disclosed in the Euromonitor Report, apart from our Group, all the top five
leading players of the online advertising companies in Hong Kong for 2021 and 2022
pursue multi-brand strategy, yet our Group and one of the other four, which respectively
operate 9 and 10 media brands, have a more well-diversified brand portfolio when
comparing with the remaining three leading online advertising companies. We believe
what differentiate our Group’s advertising solutions from other market players is that our
Group adopted a multi-brand strategy with a well-diversified brand portfolio, under
which we operate various channels under different media brands with distinctive brand
names, each with dedicated content pillars, but with versatility in the sharing of raw
materials and ideas for content development between different media brands, with a view
to attract audience with particular areas of interest, thereby enabling us to segregate our
audience profile and in turn helping advertisers to more precisely identify their target
audience so that we can offer tailor-made advertising solutions to appeal to specific
group or groups of audience to suit the advertisers’ marketing campaign. For instance,
New Monday’s target audience mainly comprises the younger generation, when
promoting advertisers’ products and services on New Monday’s platforms, we may
employ a more colloquial style of copywriting and entail trending presentation styles
such as memes to attract target audience’s attention. Whereas for the same advertising
campaign on another Digital Media Platform, the copywriting may be adjusted to suit the
target audience of that media brand. Unlike other market players who operate their digital
platforms with a less well-diversified portfolio, which the presentation style of
advertisements may likely be required to conform to certain style or tone in order to
maintain brand image, our media brands are stand alone brands each with their own
presentation style and market positioning. As such, we can offer flexibility in the choice
of one or more media brands for the conduct of advertising campaigns whichever that
may suit advertisers’ needs better – for advertisers aiming at promoting its products
among a distinct group of end users, particular media brand of our Group may offer
advertising solutions with precise segment marketing; as for advertisers whose
advertising objective is to reach as much people as possible, we can offer cross-platform
advertisement placement service with tailor-made advertisements for different viewers,
thus maximise the effectiveness of advertising campaigns. On the other hand, when
comparing with other market players who also adopted multi-brand strategies, our Group
places heavier emphasis on developing our Digital Media Platforms. Among the other
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leading online advertising companies in Hong Kong in 2021 and 2022 as identified in the
Euromonitor Report, despite all adopted multi-brand strategy, our Group is the only
market player whose digital advertising revenue contributed to over 90% of total revenue.
Our Directors believe that our dedication in developing our digital media business
enables us to accommodate surging demands for digital advertising solutions in light of
this digitalisation era.
We believe that the diversified advertising solutions on multi-brand platforms and
quality of audience behavioural insights we offer are vital in keeping up with the
market changes and maintaining our competitiveness in the ever-evolving digital media
industry.
Long-established history and well-established relationships with clients across
different industries
We have been engaged in the media industry in Hong Kong for over 20 years and
are renowned for our popular flagship media brands including Oriental Sunday,
Weekend Weekly, New Monday and Economic Digest. With our long history in the
advertising business in the print media and our early entry into the digital marketing
business, we have established an extensive client network. Our Group has a diverse
client portfolio ranging from 4A’s and non-4A’s advertising agencies, multinational
corporations and brand owners as well as small and medium-sized enterprises, covering
a large variety of business sectors. As disclosed in the section headed “Business –
Suppliers and Clients – Clients”, we have been able to maintain over 10 years of
business relationship with all of our top five clients for each year during the Track
Record Period save for one during the year ended 31 December 2021 and 2022, with
whom our Group has also maintained over 5 years of business relationship.
Experienced management team and dedicated operation structure
We have a strong management team that possesses extensive management skills,
operating experience and solid industry knowledge and expertise. For example, our
CEO and substantial shareholder, Mr. Royce Lee, has been engaged in the digital
marketing business for over 20 years, and our COO, Ms. Esther Cheung, has over 15
years of experience in digital media and marketing. Further details of their background
are set out in the section headed “Directors, Senior Management and Employees” of
this prospectus. Other than our CEO and COO, a number of our management team
members also came from strong digital marketing background prior to joining our
Group, for example having been directors at 4A’s advertising agencies and
international brand owners. With our management’s profound experience in digital
marketing, we believe our Group will continue to excel at the digital advertising
business under their strong leadership.
On the other hand, our management team is supported by a dedicated operation
structure, which enables us to offer flexible and effective support to clients. Each of
our Business Units serves clients whose target audience are most correlated to the
contents of its media brands with its own sales and contents or editorial teams under
separate team heads, whilst always open for inter-units collaborations where required in
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order to cater for special needs of our clients. We believe such structured yet flexible
operation model helps to better monitor the performance of each media brand,
encourage the management to respond timely to clients’ needs, enhance production
efficiency while maximizing the synergistic effect of our diversified distribution
platform strategy, thus enabling us to gain a competitive edge that helps our Group
coping with the dynamic digital media industry.
OUR STRATEGIES
According to the Euromonitor Report, the online advertising industry is expected to
grow at a double-digit CAGR of 11.4% from 2023 to 2027. We aim to capture the business
opportunities from this momentum by enhancing our capabilities and offerings through the
following strategies:
Pursue growth through acquisitions and/or strategic alliance
To accelerate our business growth and expand our market share, our Group will
explore opportunities for mergers and acquisitions and/or strategic alliances with other
media or e-commerce players. In particular, we intend to acquire or partner up with
platforms engaging in e-commerce, digital advertising and media service in order to
enhance our horizontal growth. We are of the view that the fields of job searching and
posting, product and service listing and price comparison, and businesses related to
purchasing and ordering facilitating platforms offer the most potential for our
horizontal growth.
According to the Euromonitor Report, platform service system platforms, which
are platforms that provide updated information and recommendations on products and
services, and e-commerce solution platforms, which provide data collection and
analytic solutions to help e-commerce players getting in-depth understanding of the
market, are two major segments with good potentials to expand into within the current
digital media landscape. According to the Euromonitor Report the e-commerce market
of Hong Kong has increased from HK$85.4 billion in 2018 to HK$136.0 billion in
2021, with a CAGR of 16.8% and in 2022 the e-commerce market accelerated its
growth and reached HK$183.6 billion which represented a 35.0% increase from the
previous year; whereas LinkedIn as a hybrid of social media networking site and job
posting platform has recorded a CAGR of 17.2% in its average active monthly users
over the period from 2018 to 2022. In light of the above, we see the potential in online
job-searching markets, product-listing platforms and businesses related to purchasing
and ordering facilitating platforms, and our Group intends to expand into these
segments. Ideal acquisition targets will be platforms with small to medium operation
scale but with good traffic.
As at the Latest Practicable Date, we have not identified any potential acquisition
target with detailed feasibility study nor have we entered into any agreement for any
acquisition or strategic alliance. We have no intention to acquire any company or
business which would lead to a material change of the current principal business and/or
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corporate structure of our Group. For further details of our plans on merger and
acquisition or strategic alliance, please refer to the section headed “Future Plans and
Use of Proceeds” of this prospectus.
Expand our product lines and our client base and explore opportunities in specific
industry verticals
Demands for digital advertising products are ever-evolving and we intend to
further expand our product lines to cater for diversified needs of different advertisers.
In light of the growing popularity of online finance and banking activities, we set
up the structure of a new platform under the name of Jetsobee with a Facebook page,
an official website and mobile app, but so far with minimal content. We plan to
dedicate resources in developing it into a personal smart spending platform focused on
providing recommendation on financial tools and choices, such as credit card usages.
This platform is designed to be featuring a loyalty programme and the technological
infrastructure will also incorporate data analytics, AI and machine learning capabilities.
To support Jetsobee’s development and operation we will also recruit new staff to set
up a new team, to develop product features and programmes and content creation to
drive audience engagement. Although our existing clients already included some major
banks and credit card companies, we expect the Jetsobee platform will enable us to
attract more advertisers from the financial sector, including banks, credit card
companies, electronic payment providers and insurance companies, thereby expanding
our clientele base.
On the other end, a rising trend of people establishing their own business is
observed. According to the statistics of the Hong Kong Government, as of December
2021, there were over 340,000 SMEs in Hong Kong, which number grew to over
350,000 as at November 2022, which accounts for over 98% of the total number of
enterprises in Hong Kong. In order to capture the opportunities in this rising market,
we intend to develop an automated advertisement placement platform to provide
alternative advertising solutions to serve this segment. The proposed new platform
offers opportunities for SMEs to publish their own promotion materials at a designated
section on our existing renowned Digital Media Platforms at an affordable price such
that on one hand, we can cater for the needs of these clients and on the other hand, we
can tab into the SMEs segment and strengthen our market presence in digital
advertising market. We plan to expand our sales team and technical support team to
back up the development of such platform.
Enhance data collection and analytical capabilities through the development of
e-commerce solution platform
We discern the increasing reliance on data analytics in the digital advertising
industry with rapid technological advancement. We intend to enhance our capabilities
in collecting, storing and analysing data and to increase the varieties and dimensions of
the data we can collect. According to the Euromonitor Report, the e-commerce market
of Hong Kong has increased from HK$85.4 billion in 2018 to HK$136.0 billion in
2021, with a CAGR of 16.8%, and a further jump of 35.0% in 2022 to HK$183.6
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billion, which in turn creates demand for strategic online advertising campaigns. We
therefore plan to develop an e-commerce solution platform comprising a front-end
mobile app with implementation of a loyalty programme for its subscribers which will
encourage them to record their spending on e-commerce through incentives such as
bonus points, gift redemption and other promotions, the creation of a data lake on such
data collected and machine learning data modelling. To support this development we
plan to recruit additional staff to set up a new team, including a data analyst, to
develop product features and programmes and content creation to drive subscribers
engagement. This platform will enable us to collect and analyse spending on
e-commerce, thereby enhancing the precision in identifying the target audience for our
advertisers and optimising the effectiveness of our advertising solutions. Through these
initiatives, we expect to solidify our clientele and strengthen our market presence.
Unleash our potential by enhancing productivity
To ensure the contents we create remain engaging and relevant, we also intend to
upgrade our content monitoring system by developing and implementing a media
content management system, which is a tailor-made platform for our Group to gather
further performance data of our contents and that of other market players on different
third party social media platforms. Although we have a dedicated Platform Team
specialising in understanding audience behaviour and preferences through analysing
data of our branded contents and those of our competitors, which has contributed to
our success during the Track Record Period, it was done manually with the aid of third
party analytic tools. With the proposed implementation of the media content
management platform, we may also collect further information on audience feedback to
our digital contents and market trends including virality of our fanpages, profiles and
channels on different third party social media platforms, online traffics of our digital
platforms, demographics of our audience, ranking of our self-operated digital platforms,
contents that generates most engagement rates and daily trend of keywords gaining
popularity. This would provide us with a cornerstone infrastructure enabling us to be
prepared for handling increasing volume of data along with the expansion of our
business which may not be coped with manually in an efficient manner. With the aid of
data collected and presented on the media content management platform, we can
closely monitor the performance of our digital contents and utilise such data as
parameters measuring the performance of our different Business Units, thus to enhance
productivity.
Continual investment in technological infrastructure and recruitment of talent
We believe the development of digital advertising market will centre around the
use of machine learning tools and we therefore intend to strengthen our technological
infrastructure through applying AI and machine learning models in the back-end
operations of our platforms. The abovementioned e-commerce solution platform and
Jetsobee platform to be launched will incorporate data analytics, AI and machine
learning capabilities and spearhead the integration of AI and machine learning
technologies in our daily operation. Moreover, we will also upgrade our physical
information technology facilities to achieve a more comprehensive upgrade of our
technological infrastructure. In addition, we also intend to recruit talent of different
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areas, including staff specialising in data analytics, sales and marketing, business
strategic development and content development in support of the growth of our
business.
We believe these strategies will help deepen our penetration in our existing clientele,
diversify our client base and expand our market share, hence to strengthen our market
position and sustain our business growth. Meanwhile, we will keep abreast of the latest
market trend to identify and capture further market opportunities.
OUR MEDIA BRANDS
Our Group has been operating nine (9) media brands, offering contents across different
areas of interest over a number of platforms. Media brands of our Group are operated by
individual Business Units with dedicated content teams to provide constant updates on their
own media platforms. Each of the Business Units will review their content pillars regularly
and revamp their branded contents from time to time in order to ensure quality of our
contents and enhance user engagement on our media platforms, which in turn helps generate
additional monetisation opportunities with the advertising products and services we offer to
clients.
The strategy that our Group adopts to offer contents with particular areas of interest by
different media brands helps not only to build brand recognition of individual media brands
among their target audience but also to segregate our audience profile and assist our clients
to identify their targeted customers with reference to topics that these customers are
interested in. Our media brands utilise different digital media platforms in order to maximise
reach to audience. During the Track Record Period, media brands of our Group operated
digital platforms including (i) its own website; (ii) mobile application; and (iii) fanpages,
profiles and channels across different third party social media platforms (including
Facebook, Instagram, Y ouTube and LinkedIn). Contents available on our Digital Media
Platforms may appear in various styles and forms such as social newsfeeds, videos and
photos, which may appeal to different types of internet users thus extend our reach to wider
scope of audience.
As discussed in the paragraph headed “Our Products and Services” in this section, we
generate advertising income from our Digital Media Platforms, which are operated through
third party social media platforms or our own websites and apps, through offering
advertising solutions such as Facebook newsfeeds, Instagram newsfeeds and contents
featuring advertisers’ products to be posted onto our Digital Media Platforms. As at the end
of the Track Record Period, for our 9 media brands, our principal Digital Media Platforms
(other that the Jetsobee platforms which we plan to fully develop by using part of the
proceeds from the Share Offer) includes 9 websites and 7 apps as our own platforms and we
are operating on third party social media platforms including 10 Facebook fanpages, 9
Instagram profiles and 9 Y ouTube channels. Further details of our principal Digital Media
Platforms are set out under the description of each of the media brands below.
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Set out below is a brief description of our media brands:
“อ৿ಂ” (Weekend Weekly)
Weekend Weekly specialises in providing lifestyle contents ranging from topical dining
trends, discovery around towns to best dining and shopping offers, tips and
recommendations to meet demands of people from all walks of life. Weekend Weekly has
strived to develop contents to stay in trend, for instance in 2020, it launched a special
column compiling quality take-away food and special discounts for take-away on its website
in order to cater for audience’s surging demands for take-away services as COVID-19 hits
the city hard. Weekend Weekly has also launched thematic campaigns such as the Best-Ever
Dining Awards (
ɽᆤ) for several years, to capture audience with specific areas of
interest and cover talk-of-the-town topics. It is a brand with long history and was first
launched as a magazine by our Group in September 1999 and has developed a solid
audience base. Weekend Weekly has its official website, mobile app, Facebook page,
Instagram profile and Y outube channel. It is one of our media brands with most followers on
its third party social media platforms, one of which reached over 1.7 million followers as at
the Latest Practicable Date, and is popular among younger generation.
Weekend Weekly also published a print magazine with GOtrip on a quarterly basis in
2021. It also collaborates with GOtrip from time to time to publish travel guidebooks with
updated and holistic travelling information on different overseas destinations.
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“อMonday”
(NM+ / New Monday)
New Monday offers contents on latest social trends, covering topics such as online
shopping, online games, electronic gadgets, sports trend, fashion, entertainment news and
beauty tips. To catch up with the latest market trend, New Monday has been exploring new
cooperation opportunities with advertisers engaging in different rising industries. New
Monday has experimented with new form of contents such as video games live streaming
and thematic video programmes on the media brand’s digital media platforms with a view to
enhancing user engagement as well as explore further business opportunities with advertisers
from different segments.
New Monday was first launched by our Group in 2000 and was well-known for its
brand positioning as a local youth magazine. New Monday was the first brand among our
Group in digitalising its contents, launching its online portal and individual website as early
as 2004 and 2006 respectively. “NM+” was introduced as a multimedia platform version of
New Monday and launched the “NM+ eMag” and “NM+ eMag Lite” tablet and smartphone
apps in the financial year ended 30 June 2012. This media brand currently operates through
its official website, mobile app, Facebook page, Instagram profile and Y ouTube channel.
“˙อή” (Oriental Sunday)
Oriental Sunday offers updated entertainment gossip news of artists and celebrities’
activities and providing updates on developments in the entertainment industry.
It became a fully digitalised platform since the beginning of 2021 after the cessation of
the 3-in-1 Oriental Sunday Magazine. Oriental Sunday has its official website, mobile app,
Facebook page, Instagram profile and Y ouTube channel.
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“຾᏶ɓ඄” (Economic Digest)
Economic Digest is a long-established and well-recognised media brand of our Group
focusing on providing latest information on economics, investment, financial market and
personal finance with major target audience comprising professional investors, white collars
and general public who is interested in investment and financial market. During the Track
Record Period, its content covered conventional topics including property market, insurance,
entrepreneurship and personal financial management to trending topics in relation to
workplace culture, start-ups, virtual banking and fintech. Economic Digest also hosted the
annual Hong Kong Outstanding Enterprise
ಥ௫̈ΆุԚᓿ(which was rebranded as the
Hong Kong Outstanding Listed Enterprisesಥ௫̈ɪ̹Άุ in 2021 and as EDigest
Outstanding Listed Enterprises and ESG Award ຾ɓ௫̈ɪ̹ΆุʿESGɽᆤin 2022), The
Outstanding Brand Awards೐ɽᆤ(now rebranded as the EDigest Brand Awards ຾ɓ
೐ɽᆤ) and EDigest Best SME Award ຾ɓʕʃΆɽᆤ(suspended in 2021 and 2022 due
to the COVID-19 pandemic) ceremonies.
With increasing use of digital platforms in media industry, Economic Digest also
utilises digital media platforms and third party social media platforms such as its official
website, mobile app, Facebook page, Instagram profile, LinkedIn profile, Patreon page,
Spotify podcasting channel and Y ouTube channel to distribute its content. Economic Digest
currently also publishes a weekly magazine with subscription services of its e-magazine and
physical copies.
“GOtrip”
GOtrip provides comprehensive travelling information and suggested itineraries ranging
from local excursions, staycation to global destinations to keep viewers updated with the
latest tourism and vacation trend. The brand aims to attract audience who enjoy travelling or
visiting the countryside. GOtrip maintains its own official website, Facebook page,
Instagram profile, mobile app and Y ouTube channel. Apart from running various digital
platforms, GOtrip also from time to time collaborates with Weekend Weekly to publish
travel guidebooks to offer up-to-date itineraries and sightseeing information of different
destinations to audience.
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In 2021, GOtrip also published a quarterly periodical as a crossover with Weekend
Weekly.
“More”
More provides introduction and comparisons of trending beauty products or fashion
items launched by different brands in the latest season, beauty tips in skincare and make-up,
nutritious menus for healthy diets and an array of topics that female audience are interested
in. It focuses on topics including fashion, skincare, makeup, wedding planning and targets at
female audience. As at the Latest Practicable Date, More has accumulated over 1 million
followers on one of its third party social media platforms. The media brand operates through
its official website, mobile app, Facebook page, Instagram profile and Y ouTube channel.
More organises an annual poll, Beauty Product Awards (“ɽሧ”) for viewers to
vote their favourite beauty brands or products. This event not only provides an opportunity
to interact with our viewers, but also for our customer brands to promote their products.
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“Sunday Kiss”
Sunday Kiss targets young parents and provides information on latest trends of
child-care, parenting, education as well as shopping tips. It also has a directory on its
website on learning centres and kids products in Hong Kong aiming to build a
comprehensive database of vendors engaging in these sectors. Sunday Kiss now has its
official website, mobile app, Facebook page, Instagram profile and Y ouTube channel.
In 2019, Sunday Kiss launched the “Dear Future Kids” campaign inviting pregnant
women to write letters to their unborn babies, to record their thoughts during pregnancies
and messages they would like to send to their future kids. By sharing experience of different
women during their pregnancies, the campaign offers opportunities to look into motherhood
from different perspectives. The campaign was awarded merit prizes in both “Co-creation
and User generated Content” and “Influencer / Talent” of the “Digital and Social – Social
Single” categories in 2019 Kam Fan Awards. In 2022, Sunday Kiss organised awards for
parents to vote for their favourite brands and products under various categories.
“SSwagger”
SSwagger focuses on latest sports-related trends including information on fashion,
sneakers, gadgets, lifestyle products and latest sports news, targeting at male youngsters and
sports lovers. It was launched in 2018 as our Group was aware of the transformation of
sportswear from being a functional apparel to fashion items. SSwagger currently has its
official website, Facebook page, Instagram profile and Y ouTube channel.
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“Madame Figaro Hong Kong”
Madame Figaro was brought into the Hong Kong market from France by our Group in
2019. Our Group entered into an exclusive licence agreement (the “ Licence Agreement ”)
with Société du Figaro in September 2019, pursuant to which our Group was granted the
exclusive right to create and operate a Hong Kong version of Madame Figaro French
website, social network accounts under the name of “madamefigarohk” and
“madamefigaro.hk” and a Hong Kong edition of Madame Figaro magazine under the title
“Madame Figaro Hong Kong” for an initial term of three (3) years and thereafter with
automatic renewals unless terminated by either party with prior notice.
The Madame Figaro brand in France positions as an upmarket and prestigious platform
on fashion and beauty. The history of its French media conglomerate, Groupe Figaro, can be
traced back to the early 19th century. It is currently one of the leading media groups in
France and has a strong presence in the French media industry. Leveraging on the
well-founded history and reputation of the French brand, our Group introduced the media
brand to Hong Kong with a view to capture the luxury market. We aspire to coalesce
Parisian aesthetics and the Hong Kong community by exploring art and fashion related
topics with local elements while maintaining the flair of the brand.
The brand currently operates through the publication of a print quarterly periodical and
content circulation on its official website, Facebook page, Instagram profile and Y ouTube
channel. Print anniversary issues were published in 2021 and 2022 to celebrate the brand
being brought to Hong Kong.
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OUR PRODUCTS AND SERVICES
Advertising Solutions
We offer integrated advertising products and services which can be distributed on both
our digital media platforms and in our books and magazines. During the Track Record
Period, our revenue from advertising solutions amounted to approximately HK$192.9
million, HK$241.7 million and HK$237.8 million for the financial years ended 31 December
2020, 2021 and 2022 respectively, representing approximately 91.1%, 98.6% and 98.8% of
our total revenue for the relevant year, of which approximately 85.2%, 94.6% and 95.2%
respectively were generated by digital advertising solutions.
Since each of our media brands has its own content pillars with presence on various
media platforms, clients can choose which of our platforms they would like to place
advertisements or carry out their advertising campaigns and select in what forms they wish
to advertise their products and services. Our comprehensive advertising products include:–
(i) advertorials, which may be posted on both our digital and print platforms. These
are editorial or journalistic articles which can serve to accomplish clients’
marketing objectives by promoting their products or services in the articles;
(ii) newsfeeds and videos for promotion of advertisers’ products on our Digital Media
Platforms including our websites and mobile apps, as well as our fanpages,
channels or profiles hosted on third party social media platforms;
(iii) sponsorship featuring advertisers’ names in our Group’s branded contents;
(iv) display advertisements, including banners, video banners and text links on our
Digital Media Platforms. Advertisers can choose the number of impressions or
length of time the advertisement is to be posted on our Digital Media Platforms;
(v) SEO (search engine optimisation) to help advertisers to rank their information
higher in search engines results, which in turn helps to bring in more targeted
clients and hence improve conversion rate. Our media brands cover a great variety
of interests on various media platforms appealing to audience across
demographics, which offer advertisers different perspectives for their targeted
keywords in search engines. We believe each of our media brands owns high
traffic keywords that sustain their chance of meeting quality audience when
internet users search up these keywords;
(vi) influencers marketing where we pair up the objective of the advertising project
with appropriate influencers to reach target audience efficiently. Our Group has
our own network of influencers from generation Z called Zolar, while Zparkler is
a branch for members who are studying in college or have graduated within two
years;
(vii) electronic direct mail (eDM) to subscribers on our Digital Media Platforms; and
(viii) advertising spaces in our print circulations, including magazines and travel
guidebooks.
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In addition to merely offering advertising space on our platforms where the contents
are provided by clients themselves, to enhance competitiveness of our Group, we offer
extensive and integrated advertising solutions and services to suit different client needs and
budgets. We offer full-range advertising and project management services throughout the
entire advertisement pre-production, production and distribution stages. These include
conceptualising advertising ideas and advising on strategy for optimal result, such as which
media brand(s) and platform(s) to be engaged in order to help advertisers to identify their
target audience precisely and the best timing for posting to attract different viewer types.
Our service package can also cover posting of feeds and advertising materials on other
social media platforms with which we collaborate. We are able to aid our clients to
understand consumer behaviour and achieve their marketing goals by providing analytical
insights through studying the performance of our contents including traffic and user
engagement data and those of other market players.
In terms of the production process of the advertisement, we are able to provide services
including artistic design, photographic production, custom layout, digital graphics design,
video shooting and editing, which may be undertaken by our in-house teams or outsourced
to third party production houses with whom we work closely depending on client preference
or our production capacity at the time.
We offer flexibility in our product offerings and services such that advertisers can pick
and choose the specific or combination of products and services that best suit their
marketing objectives and budgets, and we may be engaged directly by the advertisers and
brand owners themselves or through advertising agencies.
As ancillary service principally to our major brand owner clients, during the Track
Record Period we also provided advertising solutions which did not include posting onto our
Group’s Digital Media Platforms or print circulations. For example, we provided project
management services to various credit card companies and banks in respect of year-round
credit card offers, which included development, production and printing of marketing
materials, data input and participating merchants liaison; for the various awards our Group
organised such as the EDigest Outstanding Listed Enterprises and ESG Award and EDigest
Brand Award, we provided sponsorship where participating brand owners can have their
names featured in the event; we produced tailor made articles, and designed and produced
booklet/leaflet and gift card for clients’ ad hoc events such as shopping mall promotion.
Some of these projects were amongst our top ten projects in terms of revenue recognised
during the respective financial year in the Track Record Period (please refer to the
sub-section headed “ Our Major Projects ” below). Nevertheless, total revenue from such
ancillary services did not exceed 3% of our advertising revenue for the financial years ended
31 December 2020 and 2021 and 4% of our advertising revenue for the financial year ended
31 December 2022 respectively.
We also have programmatic advertising service agreements in place with various digital
partners (generally known as supply side platforms, “ SSPs”). Further details of these
agreements are set out in the section headed “Business – Suppliers and Clients – Clients” of
this prospectus. Under these arrangements, available advertisement slots (advertisement
inventories) on our digital media platforms are offered to advertisers through platforms
operated by these SSPs. The advertisement inventories system of our Digital Media
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Platforms will be connected to the advertising platforms operated by the SSPs, which will
identify the available advertisement slots on our Digital Media Platforms and pair up with
offers made by advertisers on their platforms. Programmatic advertisement is therefore
basically an automatic bidding for our advertisement inventory on SSPs’ platforms, our
Group will usually specify a floor price (in terms of CPM) for advertisement inventories on
our Digital Media Platforms. Driven by the bidding process, advertisement of the advertiser
with the highest bidding CPM will be placed to respective advertisement inventories on our
Digital Media Platforms through respective SSP’s platform. Programmatic advertising
revenue from sales of our advertisement inventories on our Digital Media Platforms is
determined based on a pre-agreed portion of the aggregate CPM (i.e. the highest bids in
terms of CPM) generated from respective SSP’s platform from time to time. Such revenue
sharing portion is based on the terms and conditions with each SSP . Our Group, as
publisher, acts as the platform for displaying the advertisements allocated by the SSPs’
platforms and we do not produce any content for these advertisements.
The following table sets forth the breakdown of our advertising revenue by major
media platforms from which our Group operated on during the Track Record Period:
For the year ended 31 December
2020 2021 2022
HK$’000
%o f
advertising
revenue HK$’000
%o f
advertising
revenue HK$’000
%o f
advertising
revenue
Third party social media
platforms
– Facebook 118,731 61.6 151,362 62.6 134,753 56.7
– Instagram 9,846 5.1 14,105 5.8 13,610 5.7
– Y outube 274 0.1 274 0.1 203 0.1
– LinkedIn N/A N/A N/A N/A 190 0.1
Sub-total 128,851 66.8 165,741 68.5 148,756 62.6
Own platforms
– Website 33,154 17.2 39,286 16.3 51,017 21.5
– App 694 0.3 3,541 1.5 4,630 1.9
– Print 12,608 6.5 9,849 4.1 8,608 3.6
Sub-total 45,456 24.0 52,676 21.9 64,255 27.0
Multi-platform (Note 1) 12,441 6.5 18,165 7.5 16,322 6.9
Production service & others
(Note 2) 5,112 2.7 5,125 2.1 8,444 3.5
Total 192,860 100 241,707 100 237,777 100
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Note 1: This represents invoices which covered advertising solutions posted onto more than one platform
without specific allocation of the fees to the respective platforms.
Note 2: This represents primarily revenue derived from services which did not relate specifically to the
media platforms mentioned above. The amount for the financial year ended 31 December 2020
also included approximately HK$400,000 representing project management fee charged under
various print advertising contracts. The increase in revenue under this category for the year ended
31 December 2022 was mainly due to the increase in the number of contracts for project
management services for credit card offers.
Our revenue generated through Facebook for the financial year ended 31 December
2022 dropped by approximately HK$16.6 million, i.e. approximately 11.0%, as compared to
that for the year ended 31 December 2021. Such drop was primarily due to the drop in
advertising revenue from the cosmetics and skin care, toiletries and household,
pharmaceuticals sectors and the hotel, travel and tourism services sectors in view of the
stringent social distancing measures introduced following the outbreak of the fifth wave of
the COVID-19 pandemic, and Facebook is a popular social media platform for advertisers in
these sectors to conduct their advertising campaigns. For details of the breakdown of our
non-programmatic advertising revenue by industry sectors for the Track Record Period
please refer to the section “Financial Information – Discussion and Analysis on Principal
Items in the Consolidated Statements of Profit or Loss and Other Comprehensive Income –
Advertising” of this prospectus.
On the other hand, our revenue derived from our own websites for the financial year
ended 31 December 2022 shown a significant growth of approximately HK$11.7 million (i.e.
approximately 30%) from that for the year ended 31 December 2021, and revenue derived
from our apps also showed a steady growth from that of the year ended 31 December 2021.
As disclosed in the paragraph below, in 2022 we endeavoured to drive organic traffic to our
websites and apps by both search engine optimisation and generating more branded contents.
We believe this led to a growth in our programmatic advertising revenue generated from our
own websites and also enabled us to increase our advertising inventories for direct sale to
our non-programmatic advertisers, especially those who were not so affected by the fifth
wave of the COVID-19 pandemic.
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The following table sets forth selected key operating data of the Digital Media
Platforms of our nine media brands during the Track Record Period:
As at/for the year ended
31 December
2020 2021 2022
’000
(approx.)
’000
(approx.)
’000
(approx.)
Websites (Note 1)
Unique visits (Note 1) 110,075 156,718 219,707
– new visit 106,414 151,200 213,984
– returning visit 3,661 5,518 5,723
Web sessions (Note 2) 332,457 422,587 573,238
– Weekend Weekly 112,814 157,836 207,166
– New Monday 28,371 26,607 43,050
– Oriental Sunday 59,637 73,241 76,168
– Economic Digest 29,746 31,850 37,687
– GOtrip 29,583 37,211 59,256
– More 37,459 39,473 55,657
– Sunday Kiss 29,052 50,905 88,842
– SSwagger 2,328 1,564 246
– Madame Figaro 3,467 3,899 5,167
Web impressions (Note 3) 2,322,768 2,609,158 4,267,451
Apps (Note 4)
Acquisitions (Note 4) 216 916 1,421
App sessions (Note 2) 4,678 26,860 38,286
App impressions (Note 3) 51,439 222,531 405,501
Social Media Platforms
Facebook followers (Note 5) 7,225 7,301 7,466
Instagram followers (Note 6) 1,012 1,172 1,252
Notes:
(1) Unique visits is the number of unduplicated (counted only once) visitors to our nine websites over
the course of a year. The figures provided in relation to our websites comprises the aggregate data of
all our websites.
(2) Session refers to the number of visits a website or app has, from both new and returning users. A
session starts right away when someone loads a page and ends after 30 minutes of inactivity.
(3) An impression is counted each time when an advertisement is shown on our Digital Media Platform,
excluding advertisements for our integrated advertising solutions of which we do not maintain record.
(4) Acquisition refers to the accumulative number of new downloads of our mobile apps. The figures
provided comprises the aggregate data of all our apps. New downloads refer to number of users who
have installed our app once and exclude the number of redownloads on a device-auto-downloads,
restores or updates.
(5) The figure comprises the aggregate number of followers of our ten principal Facebook fanpages.
(6) The figure comprises the aggregate number of followers of our nine principal Instagram profiles.
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We continuously evaluate and review our operating strategies with a view to
maximising our digital advertising revenue. In 2019, we modified our strategy to enhance
user experience by reducing the page breaks of the website articles. As advertisements are
pushed onto a webpage when a webpage is loaded by the reader, a reduction in page break
means more content could be shown in a single webpage and the users could read the
content with less interruption by advertisements, and the improved user experience would in
turn attract and retain more users to spend more time on our websites. In 2022, we evaluated
our strategies and endeavoured to drive growth of organic traffic to our websites and apps.
As disclosed in the sub-section headed “Our Operation – Dedicated Platform Team to
Monitor Digital Performance for Optimal Operation Results” below, our Platform Team
analyse audience behaviour on our Digital Media Platforms and provide insights to the
Business Units. In 2022 we recruited additional staff to our Platform Team specifically for
search engine optimisation, i.e. analysing media content such as contents that generate
higher engagement rates and trending keywords in order to enhance our branded contents so
that they would more likely appear on the result pages when audience conduct keyword
searches, which in turn would help to bring in more targeted clients to our Digital Media
Platforms. At the same time, we also increased engagement of third party freelancers for
generating more branded contents. The unique visits to our websites increased from
approximately 110.1 million for the year ended 31 December 2020 to approximately 156.7
million for the year ended 31 December 2021, and further increased to approximately 219.7
million for the year ended 31 December 2022, among which the new visits doubled from
approximately 106.4 million for the year ended 31 December 2020 to approximately 214.0
million for the year ended 31 December 2022. Our web sessions have recorded a growth of
approximately 27.1% from approximately 332.5 million for the year ended 31 December
2020 to approximately 422.6 million for the year ended 31 December 2021, and a further
growth of approximately 35.6% to approximately 573.2 million for the year ended 31
December 2022. For SSwagger, our Group focused on developing its growth on Instagram
instead in view of its rather specific target audience of youngster and sports lovers, its web
sessions recorded drops for both 2021 and 2022.
Along with the increasing unique visits and web sessions to our websites, our web
impressions for the three years ended 31 December 2022 also demonstrated a continuing
growth, recording approximately 2.3 billion, 2.6 billion and 4.3 billion impressions
respectively. Our Directors believe that our strategy in enhancing user experience, coupled
with the drive to optimise our Digital Media Platforms on search engine result pages in
2022, led to the substantial increase in the number of web impressions for 2022.
Our mobile applications were launched since the second half of 2020 and attained
significant increase in acquisitions, app sessions and app impressions during 2021 and 2022.
Riding on the strengthening brand recognition and increasing number of unique visits to our
websites, acquisition of our apps has reached over 900,000 as at 31 December 2021 and
approximately 1.4 million as at 31 December 2022. Our app sessions and app impressions
have respectively reached 26.8 million and 222.5 million for the year ended 31 December
2021 and with increasing acquisition of our apps increased to approximately 38.3 million
and 405.5 million respectively for year ended 31 December 2022.
During the Track Record Period, followers of our social media platforms have been
increasing steadily which is attributable to the organic growth of our platforms.
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Our Group’s operating data also includes reach of our advertisements to audience by
conversion rate, which means the ratio of audience who take an action desired by the
advertiser, such as signing up a new account or making a purchase, to the total number of
audience who viewed or clicked on the display advertisements. Conversion rate may be
measured by data such as chargeable clicks, click through rate or engagement rate for our
Digital Media Platforms over any particular period. We do not track and record such data
except in the limited circumstances mentioned below. Firstly, we may retain certain data for
a particular campaign and upon our clients’ requests, we may share the relevant data with
client for evaluation of the effectiveness of advertising campaigns. Depending on the type of
advertising products and services provided and/or the advertising objectives of our clients,
data to be shared varies. For example if client’s advertising objective is to extend the reach
or media coverage of its products, the data to be shared may include the number of
impressions, views and/or likes of the relevant feeds and posts; for clients who wish to
attract traffic to their designated websites, we may also provide the number of leads
generated such as user registration or number of transactions on project basis. Secondly, we
will record such data when the agreed contract sum is calculated in form of commission by
revenue sharing or profit sharing based on purchases of products or services advertised
completed by users driven from the traffic of our Digital Media Platforms. During the Track
Record Period, our Group’s revenue generated from contracts involving such commission
based element, inclusive of the fixed fees under such contracts, amounted to approximately
HK$2.2 million, HK$3.1 million and HK$4.5 million respectively for the three years ended
31 December 2022, representing only approximately 1.1%, 1.3% and 1.9% of the total
revenue of the respective periods.
Print circulation
During the Track Record Period, we published four magazines, being (i) the 3-in-1
Oriental Sunday Magazine (combined with Weekend Weekly magazine and New Monday
magazine) on a weekly basis in 2020, (ii) Economic Digest Magazine as a weekly magazine,
(iii) since third quarter of 2019, Madame Figaro Magazine as a quarterly magazine, and (iv)
in 2021, the Weekend Weekly x GOtrip Magazine as a quarterly magazine.
In light of the market trend where demand for print magazines has been decreasing, we
restructured our print media service in late 2020 and ceased the publication of the 3-in-1
Oriental Sunday Magazine with the last issue in December 2020. On the other hand we
released four issues of the quarterly Weekend Weekly x GOtrip Magazine in 2021 but the
2022 issues were cancelled in view of reduced overseas travelling as a result of travel
restrictions due to the fifth wave of the COVID-19 pandemic. Nevertheless we believe that
maintaining our print media complements our multi-media strategy and offers advertisers
additional avenue to reach their target audience, whilst at the same time the well-known
titles of Economic Digest, Weekend Weekly, GOtrip and Madame Figaro also serve to
bolster brand recognition for our Group. Although we do not have plans at this stage to
further reduce our magazine titles, we will monitor changes in market trends for print
magazines and print advertising and review from time to time whether to implement any
further adjustments to our print media service.
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The following table sets forth the copies sold, unit price of and revenue generated by
circulation of our Group’s magazines during the Track Record Period:
For the year ended 31 December
2020 2021 2022
3-in-1 Oriental Sunday Magazine (Note 1)
Unit Price (HK$) (Note 2) 18 N/A N/A
Copies sold (’000 copies) 1,154 N/A N/A
Revenue (HK$’000) 15,365 N/A N/A
Economic Digest Magazine
Unit Price (HK$) (Note 2) 20 20 20
Copies sold (’000 copies) 129 125 102
Revenue (HK$’000) 2,399 2,506 2,008
Madame Figaro Magazine (Note 3)
Unit Price (HK$) (Note 2) 120 120 120
Copies sold (’000 copies) 158
Revenue (HK$’000) 99 475 801
Weekend Weekly x GOtrip Magazine (Note 4)
Unit Price (HK$) (Note 2) N/A 30 N/A
Copies sold (’000 copies) N/A 13 N/A
Revenue (HK$’000) N/A 266 N/A
Others (Note 5)
Revenue (HK$’000) 866 245 92
Total revenue generated by our
print circulation (HK$’000) 18,729 3,492 2,901
Note:
1. The 3-in-1 Oriental Sunday Magazine published its last issue in December 2020.
2. The unit price represents the official selling price of the relevant magazine.
3. The Madame Figaro Magazine was first published in 2019 as a quarterly magazine.
4. The Weekend Weekly x GOtrip Magazine was first published in March 2021 as a quarterly magazine.
5. This comprised income from sales of travel guidebooks and licence fee for posting of magazine
contents on third party social media platforms.
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We have been also publishing travel guidebooks for over 10 years, during which we
have published different travel guidebook titles covering various travel destinations which
are popular amongst the Hong Kong public such as Tokyo, Seoul, Taipei, Sapporo and
Bangkok. The travel guidebooks were first published under Weekend Weekly’s label and
later under the joint label of Weekend Weekly and GOtrip. Travel guidebooks publication
has been substantially reduced during the Track Record Period due to reduced overseas
travelling during the outbreak of the COVID-19 pandemic.
Other than distributions through the Distributors as disclosed in the section headed
“Business – Production Workflow – Distribution of magazines and books” of this prospectus,
Economic Digest is available for subscription from our Group directly and some of the
magazines are available for subscription in digital formats and online sales.
During the Track Record Period, our revenue from circulation of magazines and book
publications amounted to approximately HK$18.7 million, HK$3.5 million and HK$2.9
million for the financial year ended 31 December 2020, 2021 and 2022 respectively,
representing approximately 8.9%, 1.4% and 1.2% of our total revenue for the relevant year.
OUR OPERATION
Key Features of our operation model
Specialised Business Units for individual media brands
We believe the ability to offer diverse, relevant and quality contents is a cornerstone to
our business. As such, one of the salient features of our operation model is that each of the
media brand is operated by individual Business Units, which enables each Business Unit to
specialise in monitoring trending topics under its content pillars, thus catering to audience
with specific areas of interests and enhancing attachment of target audience of respective
media brands. Occasionally where some trending topics are relevant to content pillars of
different media brands, our Business Units may also collaborate with each other and/or share
materials collected yet tailoring contents that suit the taste of target audience of respective
media brands by adapting the materials to presentation styles preferred by target audience.
Each Business Unit has its own team responsible for content creation on its media
platforms in order to enhance responsiveness to trending topics as the key to keeping the
audience tuned in and ensuring our contents stay connected and relevant. Frequent editorial
meetings are held for sharing of information collected by editorial team members on
potential topics to be covered by its media brands on different platforms and brainstorming
for directions of contents development in order to ensure our contents are uptrend and
engaging.
Client-oriented sales and account servicing teams
Each Business Unit is primarily responsible for serving clients that are the most
correlated with that media brand. Each Business Unit has its own sales and account
servicing team dedicated to maintaining relationships with existing clients, understanding
their marketing needs from time to time and updating clients on our new products as well as
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to develop new business opportunities with potential clients. The sales and account servicing
teams are also responsible for liaising with advertisers when enquiries are received from
potential clients or existing clients who wish to engage our services. They will collect
information regarding the marketing objectives of the campaign, formulate and propose to
clients tailor-made advertising solutions on how to maximise the advertising effect or to be
more effective in reaching intended audience by suggesting the form of the advertisements
and/or platforms to publish the advertisements and give fee quotes based on solutions and
services to be provided.
We also have a Business Development Team (which was rebranded as Revenue Team
as from March 2022) responsible for strategic development of business and products, key
client relationship and deal negotiations with key clients. For each of the three financial
years ended 31 December 2022, four out of our top five clients are 4A’s agencies which in
aggregate contributed approximately 39.9%, 37.8% and 33.7% of our total revenue for the
respective years. Constant review on products we offer and business arrangements with our
agency clients and other key clients is also conducted by this team to ensure our service
quality and that our products and services are capable of addressing clients’ needs which in
turn contribute to our business growth.
Flexible yet regulated workflow
Our Group adopts a bottom-up approach in our content creation process. Junior staff
will generate contents under the supervision of senior staff, whereas senior staff will be
responsible for proofreading and commenting on the drafts while concurrently identifying
whether there are any issues with the draft, for example copyrights which require consents
to be obtained. Apart from contents created by our in-house teams, in order to keep track of
the latest trends and get insights by interacting with content creators outside the Group, we
may also from time to time engage freelance writers, stringers and columnists to contribute
to the contents under our different platforms on topics chosen by the Business Units. All
contents, whether created by freelancers or third party contributors, must be approved by the
responsible personnel of respective Business Units before publication onto any of our media
platforms. If there is anything in the drafts that does not align with the specified topic, or
that may be deemed inappropriate, we will request them to make the necessary revision
before publishing the piece on our media platforms. The senior editors will need to ensure
all contents align with the tone and manner for the respective brand and to screen any
potential copyright infringement.
To accommodate our production needs, we have our own studios with professional
equipment for in-house photos and video shootings, audio recording and live streaming for
both our branded contents and advertising solutions. We may also engage external
production houses and freelancers to support our content development from time to time
depending on factors such as scale of production, specific client requirements and our
workload at the time, which we believe is an industry practice. We have internal control
mandates and procedures in place for engaging production house, for example obtaining a
few fee quotes for price comparison, submitting applications for engagement of production
houses and freelancers via our intranet for cost control and keeping internal records on past
engagements with third party production houses and/or freelancers and colleagues’
evaluations on quality of work of these external service providers. We have centralised lists
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of approved external production houses and freelancers offering production services ranging
from copywriting to multi-media production services. The Business Units can only engage
third party production houses on the approved lists in order to ensure external parties’
quality.
As for programmatic advertising, we do not produce any contents for advertisements
published on our Digital Media Platforms through programmatic advertising. However, we
do have policy to filter out advertisements we consider unsuitable or inappropriate for our
Digital Media Platforms, for example, obscene or offensive contents or advertisements of
our competitors. To achieve this we set our profile on the SSPs to block certain categories
of advertisements from being published on our Digital Media Platforms. We also have
designated persons in the Platform Team assigned to monitor our Digital Media Platforms on
daily basis to check whether the contents published through programmatic advertising
contain the blocked categories, filter out undesirable advertisements by keywords and for
those that cannot be ruled out by the above methods, to block these advertisements
manually. These measures help to maximise our control exerted on contents to be published
on our Digital Media Platforms that are not produced by us.
Dedicated Platform Team to monitor digital performance for optimal operation results
Other than each Business Unit monitoring the social interactions (if it was a third-party
social media feed) of the published content on its own Digital Media Platforms, we have a
dedicated Platform Team to monitor activities on all Digital Media Platforms operated by
our Group, as well as analyzing audience behaviour on our Digital Media Platforms.
Following the publishing and uploading of digital content by each Business Unit, the
Platform Team will monitor the contents across platforms. The performance of digital
contents, unlike traditional print media, can be tracked once they are published onto the
internet. Therefore, the Platform Team will analyse the data collected and provide insights to
the Business Units.
Monthly meetings will be held for each Business Unit between the CEO, heads of the
Platform Team and IT team and managing directors of respective Business Unit for
formulating content pillars. During such monthly meetings, Platform Team will give analysis
on the online data collected in respect of each Digital Media Platform operated by the
Business Units, evaluate response of contents published and provide update on competitors’
digital content. With insights gained from analysis provided by the Platform Team, managing
directors of each Business Unit will then be able to work with their own content teams to
adopt the strategies derived from the observations of the Platform Team in execution of our
branded contents and advertising products, including the timing for posting and layout
design, such that user engagement on our Digital Media Platforms can be enhanced,
advertisements of clients can be effectively delivered and to achieve targeted results of
client’s advertising campaigns.
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PRODUCTION WORKFLOW
Our production workflow can be generally categorised into two types, namely the
production of branded contents and the provision of advertising solutions.
Branded Contents
Branded contents refer to the core contents published on different media platforms
under our brands. The following flowchart illustrates the general operation workflow for
production of branded contents:
Formulating
Content
Pillars

•Regular meetings among management, Buiness Units and the Platform Team
Editorial Meetings within Business Units
Content
Creation
Gathering necessary information and materials by editorial teams
Coordinating production plans and materialising contents
Execution
n
Obtaining necessary internal approvals and conducting compliance check for all
contents before publishing
Content processing for print circulations and print publications to be distributed by
Distributors
Evaluation
n
Digital contents performance to be monitored by Platform Team
Internal evaluation of performance of user engagement and response of audience
on contents offered by our Group
As mentioned above, regular meetings among Business Units, CEO and Platform Team
are held to define content pillars and thematic campaigns in order to optimise performance
of contents offered by our Group; frequent editorial meetings are also held within Business
Units where there will be discussions on whether the materials collected are suitable for
respective media brands, approach of developing contents with the information collected, the
appropriate presentation method and platforms for publication of the relevant contents.
Senior editors of respective Business Units will make editorial decisions and report to the
managing director for final approvals. Upon obtaining approvals from managing directors,
content team members will proceed with production of contents.
Forms of the branded contents of different Business Units are highly diversified
ranging from large scale thematic campaigns to newsfeeds and articles on Digital Media
Platforms, to multi-media contents such as videos and podcasts and traditional cover stories
and columns in print magazines, depending on the type of platforms managed by respective
Business Units. After confirming presentation style and topics to be covered as our branded
contents, content team members will begin mapping out the production plan and
materializing our contents. As at the Latest Practicable Date, our Group had a total of 86
content and production staff serving in different Business Units, including editors,
photographers, scriptwriters, producers, video editors and designers, for production of both
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branded contents and advertising solutions. We also outsource from time to time part of the
production works to freelancers and/or production houses on project basis, which we believe
is a common industry practice.
For digital contents, the draft created by junior editors and freelancers will be uploaded
to our content management system for senior editors’ review. Senior editors are granted the
access to publish contents onto our Digital Media Platforms. After proofreading the content,
the responsible senior editors will proceed with publishing the same on the designated
Digital Media Platform at the scheduled time.
As for print publications, all contents must be approved by the chief editor and/or
managing director of responsible Business Units before being sent to our central
administration team for customised works on colour optimisation, initial typesetting and
proofreading. The finalised digital proof will be uploaded to an online system for
preparation of the “blueprint”, which is a draft for the final output, for the Group’s
approval. Alongside with the upload of the finalised digital proof, our central processing
management staff will also produce the physical colour proof for the printing houses to
carry out the pre-press typesetting. The blueprint produced by the printing house will then
be handed back to such staff for final check and confirmation. The final printing proof will
be used for bulk printing.
Advertising Solutions
The following flowchart illustrates the general operation workflow for the provision of
advertising solution services:
Sales and
Pitching
Identifying needs of potential clients and conceptualising advertising ideas
Attending brainstorming sessions with clients to pitch for advertising campaigns
Finalising scope of contract and contract execution
Copywriting
and
Production
g
In-house copywriting and production
Outsourcing of production where required
Project management for clients' advertising campaigns
ObtainingApprovals
Obtaining all necessary approvals in accordance with internal approval matrix and from
clients
Execution
Delivering products or services on launch date as specified in contract
Monitoring performance of advertisements, managing user engagement on third party social media
platforms where applicable
Collection of
payment
ffff
Producing job proof and issuing invoice to clients for payment collection
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As mentioned above, when our sales and account servicing team receives enquiry for a
potential advertising campaign, they will prepare the scope of services and fee quote based
on the rate card and estimate of hard costs to be incurred in the production process for
approval by the managing directors of respective Business Units. After obtaining the
approval, the sales and account servicing team will provide the quotation to client and
negotiate with client to finalise the terms of the sales contracts. After the initial terms are
accepted by client, the sales staff will proceed to prepare the sales contract, all details of
which are required to be input onto our self-developed sales system to give an instantaneous
overview of the project for the final approval by the managing director of respective
Business Units. Once such approval is obtained, the sales and account servicing team will
arrange for execution of contracts with clients. Copywriting and production will only
commence after the executed contracts are uploaded onto our sales system. Nevertheless,
there existed occasional circumstances that physically signed written contracts have been
issued by the Group to clients but the clients did not return the countersigned copy to the
Group (“ Informal Contracts (Signed by Group only) ”) and isolated incidents where no
physical written contracts have been signed by either party (“ Informal Contracts
(Unwritten) ”) (collectively, “ Informal Contracts ”). For the financial year ended 31
December 2019 there were 35 Informal Contracts (Signed by Group only) with advertising
revenue recognised of approximately HK$2.4 million, and 59 Informal Contracts (Unwritten)
with advertising revenue recognised of approximately HK$3.7 million, the majority of the
latter occurred in or after the second quarter of 2019 where there have been disruption
caused by the social unrest and the physical contracts were not followed up or pursued after
the advertising campaign has been launched. During the Track Record Period, there were a
total of 47 Informal Contracts (Signed by Group only) with advertising revenue recognised
of approximately $3.0 million and 3 Informal Contracts (Unwritten) (all of which occurred
in 2020) with aggregate revenue recognised of approximately $0.15 million. All of these
Informal Contracts have been performed and the relevant invoices have been settled by the
clients. With the gradual upgrade of our sales system in 2020 which allows us to sign in the
system after which it will be sent electronically to client for signature, there were no
Informal Contracts (Unwritten) in 2021 and 2022.
Upon confirmation of contract details, our creative service teams of the relevant
Business Units will then take over to conceptualise advertising ideas and confirming
production directions with clients, and put together production plans and coordinate the
production of contents with production teams. Our creative service teams are also
responsible for copywriting, that is to compose the description to be contained in the
advertisements. Our editors will prepare the articles or feeds by composing and editing the
text and adding relevant imagery to the articles. Senior editors will proofread the text to be
contained in our advertisements to ensure that it is properly processed, all relevant internal
guidelines and regulations are complied with and that all third-party sourced materials are
identified and acknowledged. As mentioned above, we have in-house production team, which
comprised 86 content and production staff as at the Latest Practicable Date, which is
responsible for production of both branded contents and advertisements. The production
team handled the technical aspects of the production such as artistic design, photographic
production, custom layout, digital graphics design, video shooting and editing. Among these
content and production staff, 6 are designers and art directors. During the production process
they provide support in layout and graphic designs and presentation style of the contents.
They are also responsible for processing and touching up the raw images and footages
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received from photographers, editing videos and design of the opening graphics of videos.
We also engage third-party production houses and photographers when the need arise to
assist in the production process. Our creative service team may also attend shootings where
required to ensure the end products have met requirements of clients and that the production
direction is in line with the production plans. Clients are often involved in the production
process too.
Similar to our approval procedures with branded contents, senior creative service staff
will review and approve the draft advertisement after which it will be sent to client for final
approval. Upon obtaining all necessary internal approvals and clients’ approval, the finalised
drafts of our advertisements will be set for publication on the media platform(s) at the
launch time specified in the sales contracts.
Our Group does not produce the contents for programmatic advertising and where
advertisers only purchase advertising spaces, including display banner, large rectangle
advertisement and splash advertisements from our products. In these cases the contents for
the advertisements are provided by the advertisers. The following table sets forth a summary
of the approximate revenue generated by advertising contents provided by advertisers
aforesaid and that generated by advertising contents produced by our Group (including
through engagement of third party production houses and freelancers and/or with
involvement of advertisers during the conceptualisation and/or production stage):
For the year ended 31 December
2020 2021 2022
HK$’000 % HK$’000 % HK$’000 %
Breakdown of advertising
contents that are:
– primarily produced by
our Group (Note) 155,441 86.2 191,225 82.5 177,221 77.3
– provided by advertisers 24,811 13.8 40,633 17.5 51,948 22.7
180,252 100.0 231,858 100.0 229,169 100.0
Note: Contents primarily produced by our Group included contents produced through engagement of third
party production houses and freelancers and that produced by our in-house team.
As advised by our legal advisers as to Hong Kong laws, there is no requirement for
any prior governmental registration or approval or specific legislation governing the general
advertising business in Hong Kong that our Group is operating, but there are several
ordinances and regulations containing provisions regarding publication of our branded
contents and advertisements and promotion of products and services on our media platforms
which may be relevant to our business and the breach of these ordinances and regulations
may result in statutory offences. Brief summary of these ordinances and the possible
maximum penalties are set out in the section headed “Regulatory Overview” of this
prospectus.
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As advised by our legal advisers as to Hong Kong laws, if any of the contents or
advertisement on our media platforms contains any false description to any goods or services
supplied, any obscene or indecent article, any defamatory materials or copyright infringe
work, our Group as the publisher of the contents and advertisement on our digital media
platforms, no matter whether the advertising contents are primarily produced by our Group
or provided by our clients, will be liable, whether or not our clients are also liable for
contents provided and/or approved by them. We may be charged by the relevant authorities
for breach of the relevant ordinances and regulations of Hong Kong. We may also be liable
to compensate (i) the copyright owner if the contents or advertisement on our media
platforms contains copyright infringing work or (ii) the subject of the contents or
advertisement if it contains defamatory remark against the subject, and/or publish any
clarification notice or apology (as the case maybe). We may need to withdraw the relevant
contents or advertisements.
We have adopted internal control measures over the contents to be published on our
media platforms to ensure legal and regulatory compliance of our contents and avoid
infringement of intellectual property rights of third parties. Details of our risk management
and internal control measures are set out in the sub-section headed “Risk management and
internal control” of this section.
After the finalised advertisement is posted or published on the relevant media platform,
our creative service team will also be responsible for producing the job proof and uploading
the same onto our sales system in order to signify closure of the transaction. Our accounting
department will check for completed transactions on our sales system on regular basis and
issue invoices accordingly. Typically, we will issue invoices to our clients within a week
after the release of the advertising product and collect payments from our clients.
Distribution of magazines and books
During the Track Record Period and as at the Latest Practicable Date, our Group has
engaged Distributor A and Distributor B, both of whom are Independent Third Parties, for
distribution of our magazines and travel guidebooks through different channels. Both
Distributor A and Distributor B have been our distributors for over 15 years. Distributor A is
our sole distributor for our magazines and travel guidebooks mainly to newsstands and
specified convenience stores and supermarkets in Hong Kong and Macau, whereas
Distributor B is our sole distributor of the Madame Figaro Magazine and travel guidebooks
mainly to bookstores in Hong Kong and Macau and online bookstores.
For distribution by Distributor A, we will give them prior pickup notice and it will
pick up the publications from the printer in accordance with the pickup notice at its costs,
whereas for Distributor B, generally printing houses will arrange direct delivery of the
publications to it. The Distributors will then at their own costs distribute the publications to
their respective retail points. There are no specified number of retail points under our
agreements with the Distributors and in order to ensure demand at different retail points can
be met the Distributors have the right to allocate and reallocate the number of copies to the
different retail points.
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We specify the retail or cover price of each magazine and travel guidebooks and the
Distributors pay us for the actual number of copies sold by the retail points at a pre-agreed
discounted price to such specified retail or cover price. The actual selling price at the retail
points however are determined by the retail points themselves. We do not control the pricing
or other sales arrangements between the Distributors and their respective retail points.
The Distributors will collect unsold copies of each issue of the magazines and travel
guidebooks from the retail points to their warehouses at specified intervals depending on the
frequency of the publication. We will then verify the number of unsold copies with the
Distributor such that the number of sold copies can be ascertained for calculating the sales
amount of that issue. The Distributors are required to pay our Group regardless of whether
they receive settlement from the retail points. The unsold copies will be handled by the
Distributors according to our instructions and at our cost.
We have specified staff to monitor the distribution of our print publications, including
visiting the retail points to understand the sales of our publications there, for example
whether the publications are placed at a prominent position, assisting with the collection or
delivery of publications by or to the Distributors and carry out stock takes of unsold copies
at the Distributors’ warehouses.
During the Track Record Period, we have entered into fixed term agreements with each
of the Distributors. As at the Latest Practicable Date, we have separate distribution
agreements covering separate title publications, all of which are for fixed terms of one (1) to
two (2) years subject to early termination by either party by prior written notice.
Our Directors consider our relationship with the Distributors to be that of a seller/buyer
relationship with the Distributors being our clients. During the Track Record Period, our
Group recognised revenue from sales of our publications on the date of delivery, net of trade
discounts and our best estimation of return of unsold copies, and adjusted the difference
between the actual and estimated return when the number of unsold copies of that
publication collected by the Distributors was verified by us. Our Directors confirmed that it
is industry norm in Hong Kong for publishers to engage distributors for sales of magazines
and books and regard distributors as customers of the publisher and they believe that the
aforesaid revenue recognition policy is in line with industry practice.
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SUPPLIERS AND CLIENTS
Clients
Advertising solutions
During the Track Record Period, clients of our integrated advertising solutions mainly
comprised of multinational and local brand owners across a variety of industries as well as
advertising agencies operating in Hong Kong.
The following table sets forth a summary of the number of our Repeat Clients and new
clients (meaning clients which are not Repeat Clients) and their respective approximate
revenue (both digital and print, but excluding programmatic advertising) contribution during
the Track Record Period:
For the year ended 31 December
2020 2021 2022
HK$’000
%o f
advertising
revenue
No. of
clients HK$’000
%o f
advertising
revenue
No. of
clients HK$’000
%o f
advertising
revenue
No. of
clients
Repeat Clients 159,882 94.0 410 183,849 89.7 415 168,833 85.8 347
New clients 10,127 6.0 191 21,071 10.3 250 27,865 14.2 304
Total 170,009 100.0 601 204,920 100.0 665 196,698 100.0 651
Based on our advertising revenue (both digital and print, but excluding programmatic
advertising revenue) of approximately HK$170.0 million, HK$204.9 million and HK$196.7
million for the year ended 31 December 2020, 2021 and 2022 respectively, the average
revenue derived from each client (excluding SSPs and clients under print circulation)
amounted to approximately HK$0.3 million, HK$0.3 million and HK$ 0.3 million for each
of such financial year respectively.
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The following table sets forth the breakdown of our clients engaging in different
industry sectors based on a percentage of our advertising revenue (both digital and print,
excluding programmatic advertising revenue) during the Track Record Period as indicated:
Approximate percentage of the total
non-programmatic advertising revenue (%)
For the year ended 31 December
Business sectors of our clients 2020 2021 2022
Cosmetics and skincare, toiletries and
household, pharmaceuticals 32.5 35.1 25.7
Banking, insurance and investment services 14.2 17.9 18.3
Jewellery and watches, fashion and luxury
products 12.3 9.5 14.4
Retail and online shop, electronic appliances 11.3 13.8 15.6
Food and beverage, restaurant and food
delivery 14.1 11.5 13.4
Government, non-public organisation and
public services 2.6 3.2 4.9
Hotel, travel and tourism services 2.9 3.4 2.6
Telecommunication, mobile phones and
services 1.4 1.4 1.5
Properties and real estate 1.2 0.7 0.6
Others 7.5 3.5 3.0
Total: 100.0 100.0 100.0
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The following table sets forth the breakdown of the advertising revenue attributable to
different types of clients during the Track Record Period:
For the year ended 31 December
Category 2020 2021 2022
HK$’000
% of total
advertising
revenue HK$’000
% of total
advertising
revenue HK$’000
% of total
advertising
revenue
Non-programmatic
Advertising agencies 105,785 54.9 114,152 47.2 101,152 42.5
Brand owners and others 64,224 33.3 90,768 37.6 95,546 40.2
Subtotal 170,009 88.2 204,920 84.8 196,698 82.7
Programmatic
SSPs 22,851 11.8 36,787 15.2 41,079 17.3
Total 192,860 100.0 241,707 100.0 237,777 100.0
During the Track Record Period, a predominant portion of our advertising revenue was
attributable to Repeat Clients. As shown in the table above, the revenue attributable to
advertising agencies amounted to approximately 54.9%, 47.2% and 42.5% of our revenue
generated from provision of advertising solutions (including both digital and print) for the
years ended 31 December 2020, 2021 and 2022 respectively. Throughout the Track Record
Period, our top five clients (other than Distributor A and Supplier A (i.e. Client E)) for each
year are 4A’s advertising agencies, all of which have maintained more than 10 years of
business relationship with our Group and are Repeat Clients of our Group.
Whilst the amount of advertising revenue from advertising agencies remained relatively
stable for the three financial years of the Track Record Period, the proportion of their
contribution to our total advertising revenue dropped from approximately 54.9% for the
financial year ended 31 December 2020 to approximately 47.2% for the financial year ended
31 December 2021 and further dropped to approximately 42.5% for the financial year ended
31 December 2022. This was mainly attributable in part to an increasing percentage
contribution from brand owners and others in the cosmetics and skincare, toiletries and
household, pharmaceuticals sectors, and partly to an increase in our programmatic
advertising revenue and therefor contribution from SSPs. The drop in percentage
contribution from Repeat Clients to our non-programmatic advertising revenue during the
Track Record Period was also attributable in part to the drop in revenue from advertising
agencies clients as most of our advertising agencies clients are our Repeat Clients. The drop
in the revenue from advertising agencies for the financial year ended 31 December 2022 as
compared with that for the financial year ended 31 December 2021 was primarily due to the
drop in advertising campaigns for the cosmetics and skin care, toiletries and household,
pharmaceuticals sectors. Our Directors believe this was due to the outbreak of the fifth wave
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of the COVID-19 pandemic in Hong Kong since January 2022 and the consequential
stringent social distancing measures imposed in the first quarter of 2022 which were only
relaxed from the last quarter of 2022, as these sectors were highly susceptible to the impact
of these social distancing measures which led to reduced demand for such products and
businesses from these sectors therefore tended to be more cautious on their advertising
campaigns.
During the Track Record Period, the whole of our programmatic advertising revenue
was derived from SSPs.
Our Business Development team (which was rebranded as Revenue Team as from
March 2022) is dedicated to manage client relations with key clients and business
development of our Group and maintains contact with advertising agencies or key direct
clients to understand their needs and collect feedbacks on our advertising products and
services in order to build rapport and maintain good business relationships with them. Our
sales and account servicing team will contact our existing clients from time to time to
update them on our Group’s latest products offerings and special events. Despite the fact
that a significant portion of our revenue is attributable to Repeat Clients, our staff of the
sales and account servicing team will also cold call advertisers placing advertisements on
our competitors’ digital media platforms, which we identified with the aid of third party
monitoring tools, to introduce to them our products and services and pitch for potential
business opportunities.
We generally enter into contracts in our standard forms for our integrated advertising
solutions with clients on project basis, principal terms of which will cover our service fees,
the products and/or services to be provided, time and duration of the advertising campaign
and/or launch date of the advertisement and payment clauses. As for programmatic
advertising, we enter into standard agreements provided by SSPs typically with terms of one
year with automatic renewal clauses, all of which can be terminated by either parties with
prior written notice ranging from twenty-four hours to ninety days. During the Track Record
Period, we have not entered into long term contracts with our clients for our integrated
advertising solutions. Our Directors confirm that these arrangements are in line with the
industry norms.
Print circulation
For our print magazines and travel guidebooks, please refer to the section headed
“Business – Production Workflow – Distribution of magazines and books” of this prospectus.
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The table below sets out the revenue from, and brief particulars of, our Group’s five
largest clients during the Track Record Period:
Rank
Name of
Client
Principal business/ business
profile
Products/
services
provided by
our Group
Y ears of
business
relationship
with our
Group Revenue
Percentage of
our Group’s
revenue
HK$’000 %
(approximately) (approximately)
For the year ended 31 December 2020
1 Client A
(Note)
A group of advertising agencies,
some of which are recognised as
4A ’s members, operating in Hong
Kong. These companies are
principally engaged in, among
others, providing media
consultancy services to brand
owners and part of a global
media investment group whose
ultimate holding company is
listed on the London Stock
Exchange and the New Y ork
Stock Exchange.
provision of
advertising
solutions
over 10 years 28,954 13.7
2 Client B
(Note)
A group of advertising agencies,
some of which are recognised as
4A ’s members, operating in Hong
Kong. These companies are
principally engaged in providing
media services to brand owners
and part of a multinational
advertising and public relations
group whose ultimate holding
company is listed on an
European stock exchange.
provision of
advertising
solutions
over 10 years 27,313 12.9
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Rank
Name of
Client
Principal business/ business
profile
Products/
services
provided by
our Group
Y ears of
business
relationship
with our
Group Revenue
Percentage of
our Group’s
revenue
HK$’000 %
(approximately) (approximately)
3 Client C
(Note)
A group of advertising agencies,
some of which are recognised as
4A ’s members, principally
engaged in providing media
services to brand owners, which
are part of a global media,
marketing and corporate
communications group
headquartered in New Y ork, the
USA.
provision of
advertising
solutions
over 10 years 18,495 8.7
4 Distributor A
(Note)
Two affiliated distributors in
Hong Kong engaged in the
distribution of newspaper and
magazines in Hong Kong.
magazines and
travel
guidebooks
over 10 years 17,278 8.2
5 Client D
(Note)
A group of advertising agencies,
some of which are recognised as
4A ’s members, operating in Hong
Kong. These companies are
principally engaged in, among
others, media planning and
buying and their ultimate holding
company is listed on the Tokyo
Stock Exchange.
provision of
advertising
solutions
over 10 years 9,703 4.6
For the year ended 31 December 2021
1 Client A
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 34,790 14.2
2 Client B
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 24,333 9.9
3 Client C
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 21,757 8.9
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Rank
Name of
Client
Principal business/ business
profile
Products/
services
provided by
our Group
Y ears of
business
relationship
with our
Group Revenue
Percentage of
our Group’s
revenue
HK$’000 %
(approximately) (approximately)
4 Client E i.e. Supplier A, which operates
social network platforms
provision of
advertising
space
over 5 years 19,010 7.8
5 Client D
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 11,819 4.8
For the year ended 31 December 2022
1 Client A
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 24,168 10.0
2 Client C
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 23,696 9.8
3 Client B
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 20,247 8.4
4 Client E Please refer to the description
above
provision of
advertising
space
over 5 years 19,230 8.0
5 Client D
(Note)
Please refer to the description
above
provision of
advertising
solutions
over 10 years 12,915 5.4
Note:
The Company has made requests to the client for its consent to disclose its identity in this prospectus. As at
the Latest Practicable Date, no consent has been provided.
Revenue derived from our top five clients accounted for approximately 48.1%, 45.6%
and 41.7% of our revenue respectively and the largest client accounted for approximately
13.7%, 14.2% and 10.0% of our revenue respectively for each year during the Track Record
Period. None of our Company, our Directors, their close associates or the substantial
Shareholders of our Company has any interest in any of our five largest clients for each year
during the Track Record Period.
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During the Track Record Period, our Group had neither experienced any material
disruption of business due to material delay or default of payment by our clients due to their
financial difficulties, nor any material dispute with our clients causing material disruption to
our business. During the Track Record Period and up to the Latest Practicable Date, we have
not received any complaints from our clients which had a material adverse impact on our
business or resulted in material monetary compensation being made by our Group to our
clients.
Our Major Projects
We summarised below our top ten projects in terms of revenue recognised during
respective financial year in the Track Record Period:
For the financial year ended 31 December 2020
No.
Summary of products and/or services provided under each
project (which may comprise a series of contracts for each
project)
Business profile and
background of advertiser
Revenue
recognised
during the year
Duration of the
contracts (from
the contract date
to the last launch
date of the
campaign)
Approximately
(HK$’000)
Approximately
(number of
months)
1. Project management of year-round credit card offers including
merchant liaison and marketing services
An international credit card
company
1,220 12
2. Development, production and printing of marketing materials,
liaising with participating merchants and data input for a
year-round credit card offer
A licensed bank in Hong Kong 1,136 9
3. Production of social media feeds and advertorials for posting on
our Digital Media Platforms, coordination with participating
merchants for a year-round credit card offer
A licensed bank in Hong Kong 767 15
4. Development, production and printing of marketing materials,
liaising with participating merchants and data input for a
year-round credit card offer
A licensed bank in Hong Kong 712 9
5. Production of social media feeds and display advertisements to be
posted onto our Digital Media Platforms, coordination with
influencers and boosting services for an advertising campaign for
a baby product
Hong Kong affiliate of a
manufacturer of nutritional
solutions with international
presence
653 4
6. Production of social media feeds and website articles to be posted
onto our Digital Media Platforms
An international beauty product
manufacturer
615 3
7. Production of social media feeds and advertorials to be posted
onto our Digital Media Platforms
An international beauty product
manufacturer
600 8
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No.
Summary of products and/or services provided under each
project (which may comprise a series of contracts for each
project)
Business profile and
background of advertiser
Revenue
recognised
during the year
Duration of the
contracts (from
the contract date
to the last launch
date of the
campaign)
Approximately
(HK$’000)
Approximately
(number of
months)
8. Production of social media feeds for posting on our Digital Media
Platforms and coordinating photo and video shoots with
celebrities
A Japanese beauty brand with
international presence
552 7
9. Production of social media feeds and advertorials for posting onto
our Digital Media Platforms and coordinating with participating
merchants for credit card year round offer programme
A licensed bank in Hong Kong 550 13
10. Production of social media feeds, video feed and display banners
being posted onto our Digital Media Platform, coordinating with
influencers and boosting services for a beauty product brand
A multinational consumer
goods corporation
517 1
For the financial year ended 31 December 2021
No.
Summary of products and/or services provided under each
project (which may comprise a series of contracts for each
project)
Business profile and
background of ultimate clients
Revenue
recognised
during the year
Duration of the
contracts (from
the contract date
to the last launch
date of the
campaign)
Approximately
(HK$’000)
Approximately
(number of
months)
1. Development, production and printing of marketing materials,
liaising with participating merchants and data input for a
year-round credit card offer
A licensed bank in Hong Kong 1,394 8
2. Development and production of promotional materials for posting
onto our Digital Media Platforms, provision of eDM services,
liaising with participating merchants for credit card offer
A company engaging in the
provision of financial services
based in the United States of
America
1,040 7
3. Production of social media feeds and advertorials for posting on
our Digital Media Platforms, coordination with participating
merchants for a year-round credit card offers
A licensed bank in Hong Kong 1,022 8
4. Production of social media feeds and videos for publication onto
our Digital Media Platforms, provision of video shooting services
and project management services
A company of a leading retailer
group in Asia
960 3
5. Production of social media feeds and website articles to be posted
onto our Digital Media Platforms, provision of advertising project
management services and boosting services for client’s advertising
campaign
An international health care
product brand
880 1
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No.
Summary of products and/or services provided under each
project (which may comprise a series of contracts for each
project)
Business profile and
background of ultimate clients
Revenue
recognised
during the year
Duration of the
contracts (from
the contract date
to the last launch
date of the
campaign)
Approximately
(HK$’000)
Approximately
(number of
months)
6. Production of advertorial in one of our media brands (either in
print circulation or online)
A life insurance company based
in Canada with Hong Kong
office
809 13
7. Project management of year-round credit card offers including
merchant liaison and production of promotion materials
A subsidiary of a Hong Kong
licensed bank providing card
products and services
685 13
8. Project management of year-round credit card offers including
merchant liaison and marketing services
An international credit card
company
677 6
9. A marketing campaign of client by featuring client’s products on
our Digital Media Platforms to drive traffics to client’s website
An international sportswear
manufacturer
600 6
10. Development, production and printing of marketing materials,
liaising with participating merchants and data input for a
year-round credit card offer
A licensed bank in Hong Kong 588 9
For the year ended 31 December 2022
No.
Summary of products and/or services provided under each
project (which may comprise a series of contracts for each
project)
Business profile and
background of ultimate clients
Revenue
recognised
during the year
Duration of the
contracts (from
the contract date
to the last launch
date of the
campaign)
Approximately
(HK$’000)
Approximately
(number of
months)
1. Production of editorial for print circulation and production of
social media feeds and website articles to be posted on the media
platforms of one of our media brands, provision of event and
project management services
A subsidiary of a company
listed in Hong Kong engaging
in the retail of jewellery and
watches
3,950 3
2. Production of editorial for print circulation and posting on the
media platforms of one of our media brands, provision of event
and project management services
Same as above 1,190 4
3. Development, production and printing of marketing materials,
liaising with participating merchants and data input for a
year-round credit card offer
A licensed bank in Hong Kong 1,083 10
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No.
Summary of products and/or services provided under each
project (which may comprise a series of contracts for each
project)
Business profile and
background of ultimate clients
Revenue
recognised
during the year
Duration of the
contracts (from
the contract date
to the last launch
date of the
campaign)
Approximately
(HK$’000)
Approximately
(number of
months)
4. Production of website articles and social media feeds for
publication onto our Digital Media Platforms, provision of
website banner spaces and provision of project management
services and boosting services for client’s branding campaign
A company operating an online
lending platform in Hong Kong
964 4
5. Production of advertorial for print circulation, production of social
media feeds, website articles and videos to be posted onto our
Digital Media Platforms and provision of project and event
management services for client’s advertising campaign
A global electronics brand 958 3
6. Project management of year-round credit card offers including
merchant liaison and production of promotion materials
A subsidiary of a Hong Kong
licensed bank providing card
products and services
835 13
7. Provision of website banners A subsidiary of a company
listed in Hong Kong engaging
in production, distribution and
retailing of food products
800 1
8. Provision of website banners Same as above 800 1
9. Production of social media feeds and website articles to be posted
onto our Digital Media Platforms, provision of boosting and
project management services for client’s advertising campaign
A licensed bank in Hong Kong 771 8
10. Production of editorial for print circulation and posting on the
media platforms of one of our media brands, provision of video
production and project management services
Same client as (1) and (2)
above
750 2
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The following table sets forth a summary of the contracts signed during, but not yet
launched and/or completed as at 31 December of each financial year during the Track
Record Period and as at/for the period up to the Latest Practicable Date by number of
projects and the relevant contract sums:
As at/for the year ended 31 December
As at/for the
period up to the
Latest Practicable
Date2020 2021 2022
No. of
projects
Contract
Sum
HK$’000
No. of
projects
Contract
Sum
HK$’000
No. of
projects
Contract
Sum
HK$’000
No. of
projects
Contract
Sum
HK$’000
Opening balance as at
1 January 90 25,643 86 18,275 107 22,831 125 23,625
Addition of new contracts by
contract amount 2,810 170,537 3,242 205,670 2,973 196,004 1,033 66,258
Completed contracts (2,814) (177,905) (3,221) (201,114) (2,955) (195,210) (1,013) (66,195)
Closing balance as at the end of the
relevant period 86 18,275 107 22,831 125 23,625 145 23,688
Seasonality
Our business is subject to seasonal fluctuations. The fourth quarter of every year is
generally regarded as the peak season of the advertising industry as consumers tend to spend
more during festive season and several major shopping events such as Cyber Monday and
Black Friday. To maximise the cost-effectiveness of their marketing budgets, advertisers tend
to launch advertising campaigns during this period to boost sales. During the three financial
years ended 31 December 2020, 2021 and 2022, the revenue generated from the fourth
quarter amounted to approximately 32.2%, 31.5% and 32.3% of the total advertising revenue
of respective financial year. It is observed that the fourth quarter generally recorded higher
revenue than other quarters. According to the Euromonitor Report, advertising spending for
the fourth quarter during the historical period ranged from 24.8% to 29.4% of the annual
advertising spending to capture the potentially higher spending power of Hong Kong
consumers exhibited throughout the historical period. We expect our revenue to continue to
fluctuate based on the seasonal factor that affects the advertising industry as a whole.
Suppliers
During the Track Record Period, save for Supplier A which operates a social
networking platform which provided boosting services, our suppliers were primarily printing
houses, production houses and freelancers in Hong Kong. We generally select our suppliers
based on factors such as their proven track record including the quality of the services
provided and the efficiency with which the services were provided, their pricing and the
needs and requirements of our clients.
During the Track Record Period and up to the Latest Practicable Date, our Group has
entered into periodic contracts with printing houses for the printing of our books and
magazines. Material terms of the agreements include specifications of the print publications,
such as printing size, materials used and finishing, as well as payment terms, production
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schedule and delivery arrangements. Duration of these agreements ranges from three (3)
months to one (1) year which can be terminated by either party giving prior notice to the
other.
Save that we entered into a fixed term contract of two years in 2022 with a supplier
for the provision of video hosting services to our Group, the annual fee of which is less than
1.5% of our total production costs for the year ended 31 December 2021, during the Track
Record Period and up to the Latest Practicable Date, there was no long term agreement
between our Group and any of our suppliers.
For each of the financial years ended 31 December 2020, 2021 and 2022, costs paid by
our Group to our top five suppliers accounted for approximately 68.3%, 68.5% and 58.7%
respectively of our total production and printing costs and the largest supplier accounted for
approximately 52.5%, 62.6% and 50.8% of our total production and printing costs. The table
below sets out the costs paid to, and brief particulars of, our Group’s five largest suppliers
for each year during the Track Record Period:
Rank
Name of
Supplier
Principal business/
business profile
Products/services
provided by Supplier
Y ears of business
relationship with our
Group
Cost paid to
the Supplier
Percentage
to total
production
and printing
costs of our
Group
Percentage
to total cost
of our
Group
HK$’000 % %
(approximately) (approximately) (approximately)
For the year ended 31 December 2020
1 Supplier A A company which
operates social
networking platforms
engaged in provision of
online social media
advertising services
whose ultimate holding
company is listed on
NASDAQ Stock
Exchange.
provision of boosting
services for online
marketing solution
over 5 years 29,246 52.5 16.0
2 Supplier B
(Note 1&2)
A printing house
incorporated in 1968 in
Hong Kong whose
ultimate holding
company was listed on
the Stock Exchange,
the shares of which has
been delisted since
January 2023.
provision of printing
services for print
circulation
over 10 years 4,776 8.6 2.6
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Rank
Name of
Supplier
Principal business/
business profile
Products/services
provided by Supplier
Y ears of business
relationship with our
Group
Cost paid to
the Supplier
Percentage
to total
production
and printing
costs of our
Group
Percentage
to total cost
of our
Group
HK$’000 % %
(approximately) (approximately) (approximately)
3 Supplier C
(Note 1)
A printing house
incorporated in 1987 in
Hong Kong whose
ultimated holding
company is listed on
the Stock Exchange
with market
capitalisation of over
HK$522 million as at
30 June 2022.
provision of printing
services for print
circulation
relationship first
established in around
2003 with breaks
between from
approximately early
2009 to late 2010 and
late 2012 to mid-2018
2,869 5.2 1.6
4 Supplier E
(Note 1)
A printing house
incorporated in Hong
Kong in 1983 which is
a privately owned SME
primarily engaged in
provision of printing
services.
provision of printing
services for print
circulation
over 2 years 559 1.0 0.3
5 Supplier D
(Note 1)
A production house
established in 2012 in
Hong Kong as a
partnership with two
partners and engaged in
provision of advertising
photography and
videography to brand
owners and advertising
agencies.
provision of
photography and
videography production
services
over 4 years 545 1.0 0.3
For the year ended 31 December 2021
1 Supplier A Please refer to the
description above.
provision of boosting
services for online
marketing solution
Please refer to the
disclosure above.
35,547 62.6 17.1
2 Supplier C
(Note 1)
Please refer to the
description above.
provision of printing
services for print
circulation
Please refer to the
disclosure above.
980 1.7 0.5
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Rank
Name of
Supplier
Principal business/
business profile
Products/services
provided by Supplier
Y ears of business
relationship with our
Group
Cost paid to
the Supplier
Percentage
to total
production
and printing
costs of our
Group
Percentage
to total cost
of our
Group
HK$’000 % %
(approximately) (approximately) (approximately)
3 Supplier E
(Note 1)
Please refer to the
description above.
provision of printing
services for print
circulation
Please refer to the
disclosure above.
924 1.6 0.4
4 Supplier B
(Note 1&2)
Please refer to the
description above.
provision of printing
services for print
circulation
Please refer to the
disclosure above.
775 1.4 0.4
5 Supplier F
(Note 1)
A production house
incorporated in Hong
Kong in 2012, which is
primarily engaged in
the production of
advertisements.
provision of shooting
services in relation to a
production of video
advertisement
less than 1 year 691 1.2 0.3
For the year ended 31 December 2022
1 Supplier A Please refer to the
description above.
provision of boosting
services for online
marketing solution
Please refer to the
disclosure above.
31,723 50.8 15.8
2 Supplier C
(Note 1)
Please refer to the
description above.
provision of printing
services for print
circulation
Please refer to the
disclosure above.
1,847 3.0 0.9
3 Supplier G
(Note 1)
A company
incorporated in Hong
Kong in 1993 engaging
in artiste management
organise collaboration
between a celebrity
artiste and one of our
brands, incorporating
advertising campaign
of a brand owner client
of our Group
Less than 1 year 1,235 2.0 0.6
4 Supplier E Please refer to the
description above.
provision of printing
services for print
circulation
Please refer to the
disclosure above.
1,115 1.8 0.6
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Rank
Name of
Supplier
Principal business/
business profile
Products/services
provided by Supplier
Y ears of business
relationship with our
Group
Cost paid to
the Supplier
Percentage
to total
production
and printing
costs of our
Group
Percentage
to total cost
of our
Group
HK$’000 % %
(approximately) (approximately) (approximately)
5. Supplier H
(Note 1)
A company
incorporated in Hong
Kong in 2022 engaging
in artiste management
organise collaboration
between a celebrity
artiste and one of our
brands, incorporating
advertising campaign
of a brand owner client
of our Group
Less than 1 year 740 1.2 0.4
Note:
1. The Company has made requests to the supplier for its consent to disclose its identity in this prospectus. As
at the Latest Practicable Date, no consent has been provided.
2. The contract between the Group and Supplier B has been terminated by mutual consent since June 2021.
Our business relationship with Supplier B was terminated by mutual consent in June
2021. We maintained good business relationship with Supplier B and did not have any
material disagreements or disputes with it during the Track Record Period. As at the Latest
Practicable Date, there were no outstanding trade payables due by us to Supplier B.
During the Track Record Period, there has not been any material delay or
non-completion of clients advertising campaigns due to defaults of our suppliers. Save for
Supplier A (i.e. Client E) has become one of our Group’s top five clients for the years ended
31 December 2021 and 2022, our Directors confirmed that none of our suppliers was our
major clients during the Track Record Period.
None of our Company, our Directors, their close associates or the substantial
Shareholders of our Company has any interest in any of our five largest suppliers for each
year during the Track Record Period.
Reliance on Supplier A
As disclosed in the table above, the costs paid to Supplier A for the three financial
years ended 31 December 2020, 2021 and 2022 were approximately HK$29.2 million,
HK$35.5 million and HK$31.7 million respectively, representing approximately 52.5%,
62.6% and 50.8% of the total production and printing costs of our Group for the respective
period. Supplier A operates a social networking platform which provides boosting services
for our online marketing solutions. On the other hand, posting on social media platforms of
Supplier A also generates programmatic revenue for our Group, which makes Supplier A
also a client of our Group. The programmatic revenue generated from the social media
platforms of Supplier A amounted to approximately HK$8.4 million, HK$19.0 million and
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HK$19.2 million during the three financial years ended 31 December 2020, 2021 and 2022,
representing approximately 4.4%, 7.9% and 8.0% of our total advertising revenue and
making it one of the top five clients of our Group for the years ended 31 December 2021
and 2022.
As disclosed in the table setting forth the breakdown of our advertising revenue by
major media platforms which our Group operated on during the Track Record Period set out
in the sub-section headed “Our Products and Services - Advertising Solutions”, our revenue
generated through social media platforms operated by Supplier A accounted for
approximately 66.7%, 68.4% and 62.4% of our total advertising revenue for each of the
three financial years ended 31 December 2022 respectively.
According to the Euromonitor Report, Supplier A remains one of the most influential
platforms in Hong Kong because of the highest average active monthly users it has
compared to its peers from 2018 to 2021 and only dropped to second place in 2021 but only
by a very tight margin with the top place holder, as well as versatility of contents offered on
its platform, making it one of the dominant social media platforms in Hong Kong. As our
business model highly relies on the traffic and exposure of our contents on our Digital
Media Platforms operated on the social media sites of Supplier A, unless there is a drastic
change in the social media landscape in Hong Kong, it is unlikely that our demand for the
boosting services from Supplier A and/or clients’ demand for advertising solutions to be
posted on Supplier A ’s social media sites will be shifted to other social media platforms and
it is still an industry norm for advertisers in Hong Kong to rely on advertising solutions,
including boosting services from Supplier A.
Our Group has not entered into any service agreement with Supplier A in relation to
the provision of the said boosting services. All boosting orders by our Group are placed
through an automated system available in administrator interface of our Group’s account
with Supplier A’s platform. Invoices from Supplier A will be issued on monthly interval and
made available on the Group’s account and the Group will settle the invoices accordingly.
As for the programmatic revenue generated from social media platforms of Supplier A,
separate statements will be provided by Supplier A confirming total revenue our Group is
entitled to on a monthly basis and Supplier A will settle the sum accordingly. There are no
setting off between the amount payable to and due from Supplier A.
In light of the strong influence and dominant market presence of Supplier A in the
social media landscape in Hong Kong, the Directors and Joint Sponsors are of the view that
it is unlikely that our Group will terminate its cooperation with Supplier A in the near
future. On the other hand, unless our Group violates the relevant terms or policies of the
social media platforms run by Supplier A, our Directors consider it unlikely that Supplier A
will terminate our presence on its social media platforms. The Joint Sponsors concur with
the view of the Directors, in particular that our Group has internal control measures in place
to ensure such compliance and that the Directors confirm there is no material breach of the
relevant terms or guidelines of the social media platforms of Supplier A during the Track
Record Period and up to the Latest Practicable Date.
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Despite the fact that Supplier A operates one of the most influential platforms in Hong
Kong for its highest average active monthly users from 2018 to 2021 as compared to its
peers, our reliance on Supplier A is driven by market demand and may shift to or be
substituted by other digital media platforms which gain popularity. As disclosed in the
Euromonitor Report, when choosing platform hosting their advertising campaign, advertisers
tend to be platform-neutral and demonstrate low stickiness towards social media platforms.
When advertisers and/or advertising agencies choose the best-fit social media platform for
placing of their advertisements, major factors to be taken into consideration include such
platform’s audience size, audience type, average conversion rate, the price charged for
advertisement placement, as well as availability of value-added services such as boosting
services. In particular, advertisers and/or advertising agencies place heavy emphasis on
whether the audience profile of such social media platform matches with the target
customers of their own products and services. Accordingly, where there is an emerging new
social media platform which demonstrates better ability to attract appropriate audience for
advertisers, the demands for placing advertisements on platforms operated by Supplier A
may shift to such emerging platform. Our contents, both advertising solutions and branded
contents, are not platform-specific either, and contents posted on the social media platforms
of Supplier A may be easily adapted to other currently popular social media platforms at
minimal costs to the Group without need to engage third party vendors. On the other hand,
as disclosed in the section headed “Business – Our Media Brands”, our Group has been
actively developing our own platforms including launching our own apps in the second half
of 2020. The total development costs (comprising primarily capital expenditure for engaging
third party vendor for app development and costs for adaptation of these apps for their
launching) amounted to approximately HK$550,000 and it took about one year from
engagement of third party vendor for development of apps to the respective launching
thereof. Key operating data of the Group’s self-owned platforms also demonstrated that the
traffic and number of users of such self-owned platforms are on a rising trend. Since the
launching of our first app under the media brand of Weekend Weekly in around mid 2020,
apps operated by our Group has acquired an aggregate downloads (excluding recurring
downloads) of approximately 1.4 million times up to 31 December 2022. On the other hand,
the unique visits to our websites has reached approximately 156.7 million for the year ended
31 December 2021, representing a growth of approximately 42.4% when comparing with
that for the year ended 31 December 2020 and reached approximately 219.7 million for the
year ended 31 December 2022, representing a further growth of 40.2% from that for the year
ended 31 December 2021. Our Directors therefore believe that the growing popularity of our
apps and websites ameliorates to a certain extent the Group’s reliance on third party social
media platforms. We plan to drive traffic growth on our own digital media platforms by
several means. Firstly we strive to continue driving growth of organic traffic to our websites
(i.e. visitors coming to our websites from unpaid sources such as search engines) by
increasing and improving our branded contents on social media platforms for SEO. As
demonstrated by the effect of the adoption of such strategy in 2022, we believe this will
increase the number of users who are exposed to our contents through third party social
media platforms and then decide to revisit by directly visiting our websites and apps,
thereby increasing direct traffic to our websites and own apps. We also plan to place
advertisements on app stores for both iOS and android system to promote our apps.
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PRICING POLICY
(A) Advertising solutions
We price our products and services by taking into account various factors including
market demands for our services and products, client’s budget, the market rates and costs of
providing the relevant services. We provide our sales and account servicing teams with a
pricing rate card for our standard products. The rate card is reviewed on an annual basis by
our CEO, COO and the head of Business Development Team (rebranded as Revenue Team
since March 2022). We have internal mandates in place to regulate discounts that may be
offered to clients. Set out below is a breakdown of our advertising projects during the Track
Record Period by range of contract sums:
During the year ended
31 December
2020 2021 2022
Number of projects 2,810 3,242 2,973
Number of projects by contract sum
HK$5,000 or below 258 202 221
HK$5,001 – HK$10,000 147 134 128
HK$10,001 – HK$50,000 1,237 1,455 1,280
HK$50,001 – HK$100,000 798 1,054 940
HK$100,001 – HK$500,000 357 382 382
HK$500,001 – HK$1,000,000 10 14 20
HK$1,000,001 or above 3 1 2
Total Contract Sum (HK$’000) 170,537 205,670 196,004
Average contract sum per project (HK$’000) 61 63 66
The total number of projects and total contract sum for the financial year ended 31
December 2022 dropped as compared with that for the financial year ended 31 December
2021. The decrease in number of projects occurred for projects with contract sums of
HK$100,000 or below, whereas projects with contract sums between HK$100,001 to
HK$500,000 remained stable, and projects with contract sums of over HK$500,000 has
increased. Therefore the average contract sum per project for the financial year ended 31
December 2022 increased as compared with that for the financial year ended 31 December
2021 even though total number of projects and total contract sum decreased.
Our charges for tailor-made integrated advertising solutions are negotiated on project
basis depending on the products purchased by and services to be provided to the client,
taking into account factors including the prevailing standard rates (where applicable) on the
rate card, the budget of the client, time duration and scale of the advertising campaign, our
cost for providing the services, the client’s relationship with our Group including the
frequency and volume of the client’s past engagement(s) and future business opportunities
with the client. We may offer bonus services and incentive arrangement to clients with
significant spending volume on a case by case basis. During the Track Record Period, we
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entered into incentive arrangement with two of our major clients, under which the clients
were entitled to a progressive percentage of their actual advertising spending (based on
amount of invoices paid at the end of a 12 month period). Our Directors believe that such
incentive arrangement is a common industry practice. Such incentive fee accrued in our
audited financial statements amounted to approximately HK$72,000 for the financial year
ended 31 December 2020 and approximately HK$99,000 for the financial year ended 31
December 2021, which amounts were to be provided by way of credit notes for settling
invoices to the relevant clients and which have been netted off against our gross revenue for
the same financial year. For the financial year ended 31 December 2022, incentive fee of
approximately HK$13,200 has been incurred but the amount accrued for the financial year
ended 31 December 2021 has been written back as the client did not achieve the advertising
spending to which the accrued amount related by expiry of the arrangement in 2022. Our
charges may also include or take the form of commission based on purchases of products or
services advertised completed by a user driven from the traffic of our Digital Media
Platforms.
Any deviations in fee quote from the standard pricing and our internal mandate must
be approved by the managing directors of respective Business Units before being provided
to clients. Every sales agreement between our Group and the client will set out the details of
the products and/or scope of services and our charges. All draft contracts must be uploaded
onto the sales system for internal approval to ensure compliance with our Group’s pricing
and internal control policies before being sent to client for execution.
For programmatic advertisement, since it is basically an automatic bidding for our
advertisement inventory on SSPs’ platforms, our Group will usually specify a floor price (in
terms of CPM) for advertisement inventories on our Digital Media Platforms. Driven by the
bidding process, advertisement of the advertiser with the highest bidding CPM will be
placed to respective advertisement inventories on our Digital Media Platforms through
respective SSP’s platform. Programmatic advertising revenue from sales of our advertisement
inventories on our Digital Media Platforms is determined based on a pre-agreed portion of
the aggregate CPM (i.e. the highest bids in terms of CPM) generated from respective SSP’s
platform from time to time. Such revenue sharing portion is based on the terms and
conditions with each SSP . Our Group’s entitlement of programmatic revenue generated from
Supplier A ’s social media platforms is regulated by their standard terms and conditions
which our Group is deemed to have accepted upon establishing our business accounts with
Supplier A. According to such standard terms and conditions, our Group is entitled to a
percentage of the net revenue actually collected by Supplier A from advertisers for
advertisements being displayed over contents of our Group that are published on Supplier
A ’s social media platforms, which percentage is to be decided by Supplier A at its sole
discretion.
(B) Print Publications
The retail or cover price of each of our print publications is determined taking into
account the cost of production, prevailing market price for publications of similar market
positioning and demand for our publications. Our publications are primarily sold to the
Distributors at pre-agreed discounts to the retail or cover price of the publications
determined based on industry norms. We do not stipulate the price at which the Distributors
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sell or provide the publications to the retail points, nor the price at which the publications
are sold at the retail points. We do not offer any rebate or other incentive to the Distributors
or the retail points.
PAYMENT TERMS, REVENUE RECOGNITION POLICY, CREDIT POLICY AND
CREDIT CONTROL
Payment Terms
Payment terms of our advertising products and services vary depending on the nature
of the advertising solutions and are typically clearly set out in the contracts with clients. For
standard advertising products and services such as advertorials, website banners, social
newsfeeds and eDMs, clients are usually billed upon launch of each advertisement. For
projects involving longer time spans or where we would need to make pre-payment to third
parties, we may require client to make an advance payment which amount will depend on
factors such as the duration and total contract sum of, and hard costs to be incurred for, the
project. We have an internal billing policy providing guidelines to our sales and account
servicing staff when negotiating the contractual payment terms with clients. Deviations from
the best practice set out in the internal billing policy will have to be approved by the
managing director of the relevant Business Unit and/or the COO. For programmatic
advertising, we generally charge SSPs on monthly basis according to monthly traffic reports
provided by them specifying their revenue generated through sales of our advertisement
inventories. Our Platform Team will also monitor the traffic on our Digital Media Platforms
to identify major discrepancies between our records and the aggregate data provided by the
SSPs.
Payment terms for our publications have been disclosed in the section headed
“Business – Production Workflow – Distribution of magazines and books” of this prospectus.
Revenue Recognition Policies
Revenue from our print advertising is generally recognised at the point in time when
the print publication which contained such advertisement is published. For programmatic
advertising, revenues are generally recognised as impressions are delivered, whereas
revenues from non-programmatic digital advertising are generally recognised over the period
that the related products or services are delivered and/or rendered, depending on the nature
of the products or services provided. For print circulation, as disclosed in the paragraph
headed “Business – Production Workflow – Distribution of magazines and books” of this
prospectus, we recognised revenue from sales of our publications on the date of delivery, net
of trade discounts and our best estimation of return of unsold copies, and adjusted the
difference between the actual and estimated return when the number of unsold copies of that
publication collected by the Distributors was verified by us. For further details of the
revenue recognition policies of our Group, please refer to the Accountants’ Report in
Appendix I of this prospectus. The Directors believe that these revenue recognition policies
are in line with industry practice.
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Credit Policy and Credit Control
Our accounting department is responsible for issuing bills for products or services
delivered in accordance with the terms stipulated in the contracts and monitoring the
settlement status of our bills and receivables. The credit term granted to each client is
determined on a case-by-case basis taking into account trade practices, clients’ historical
payment records and their business relationships with our Group. During the Track Record
Period, credit period granted to clients generally ranged from 0 to 90 days. In general, we
grant longer credit period to advertising agencies as they may require longer period of time
to gather performance data for advertising campaigns before receiving payments from the
advertisers and our Directors believe such practice is in line with industry practice.
As at 31 December 2020, 2021 and 2022, our Group’s trade receivables amounted to
approximately HK$63.4 million, HK$78.8 million and HK$71.5 million respectively. During
the Track Record Period, we had recorded long overdue trade receivables from our clients,
for which our Directors consider that there is minimal recoverability issue after considering
the clients to which such amounts relate. For further details of the analysis on our trade
receivables, please refer to the section headed “Financial Information – Discussion on
Selected Consolidated Statements of Financial Position Items – Trade receivables” of this
prospectus.
We have a designated credit control team in our accounting department who will keep
track on the payment settlement status by our clients. We also have specific internal
guidelines in place for recovery of long overdue payments, including issuing warning letters
at designated intervals to clients who failed to make payments and if the relevant client still
fails to pay, referring the case to payment collection agencies and/or commencement of legal
proceedings. We will make remarks in our sales system indicating clients with unsatisfactory
payment records and full prepayment will be required from such clients for subsequent
transactions to ensure timely settlements of our fees.
Save for some of our revenue from those SSPs not based in Hong Kong being
denominated in US dollars, our revenue are all denominated in Hong Kong dollars, and are
generally settled by way of cheque or bank transfer.
BRANDING AND MARKETING
As mentioned in the section headed “Business – Competitive Strengths”, we pride
ourselves as one of the digital media companies that has immense digital presence and
strong brand recognition. Our media platforms act as the primary branding and marketing
channel for our Group. Our popularity and brand-awareness from our followers and clients
are generated through constant updates on our media platforms with engaging and relevant
contents.
Our Group mainly launches brand building events through our own Digital Media
Platforms. For example the award-winning thematic campaign “Dear Future Kids”, which
was carried out by our media brand Sunday Kiss in 2019, was mainly conducted through our
Digital Media Platforms. By initiating these thematic campaigns, we aim to attract traffic
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through activities to be conducted on our Digital Media Platforms and encourage audience
engagements. Meanwhile, we believe if audience finds our campaign activities interesting,
our brand awareness can be prompted through brand advocacy from audience.
Our media brands will also host award programmes to reinforce our brand images and
market positioning. We believe these programmes will strengthen our brand presence and
serve as opportunities to maintain relationship with existing clients and to get in touch with
prospective clients. Every year Economic Digest holds three awards ceremonies, namely
Hong Kong Outstanding Enterprise
ಥ௫̈ΆุԚᓿ(which was rebranded as the Hong
Kong Outstanding Listed Enterprisesಥ௫̈ɪ̹Άุin 2021 and as EDigest Outstanding
Listed Enterprises and ESG Award ຾ɓ௫̈ɪ̹ΆุʿESGɽᆤin 2022), The Outstanding
Brand Awards೐ɽᆤ(now rebranded as the EDigest Brand Awards೐ɽᆤ)
and EDigest Best SME Award ຾ɓʕʃΆɽᆤ(suspended in 2021 and 2022 due to the
COVID-19 pandemic), to recognise accomplishments of businesses across different sectors
in that relevant year. Similarly, Beauty Product Awards
ɽሧis an annual brand
positioning event of More. These award programmes would attract advertisement placements
by brand owners and some of the award-winning brands will take this opportunity to engage
us to advertise their products, which in turn create business opportunities for our Group.
Our Group believes that these events not only help increase our advertising revenue,
but also raise our brand presence, generate new sales leads and maintain relationships with
our existing long-term clients.
MARKET AND COMPETITION
According to the Euromonitor Report, the digital advertising industry in Hong Kong is
highly fragmented where in the three years of 2020, 2021 and 2022 no single player is able
to capture over 5% of the market share; the fragmented nature resulting from the low entry
barrier and regulatory requirement for new players to enter the market and it is expected that
the digital advertising market in Hong Kong would remain fragmented and highly
competitive.
Despite the fierce competition in the digital advertising market, our Group was ranked
second among the top five online advertising companies in terms of revenue for three
consecutive years of 2020, 2021 and 2022 according to the Euromonitor Report. We pride
ourselves as a leading player in the digital advertising industry offering contents over
various areas of interest and reaches a wide spectrum of audience. For further details of the
competitive strengths of our Group, please refer to the section headed “Business –
Competitive Strengths” of this prospectus. Our competitors include various types of
advertisers including traditional publishers, online content creators and even influencers on
various social media platforms. Please refer to the section headed “Industry Overview” of
this prospectus for a more detailed discussion regarding the markets in which our Group
operates.
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RISK MANAGEMENT AND INTERNAL CONTROL
We have adopted a series of internal control measures and have in place various
corporate policies and key internal control guidelines and procedures that we consider to be
appropriate for our business operations.
Operation risk management
Our Group maintains standard operation procedures, written manuals or policies,
workflows and standard forms to regulate daily operation of the Group. These standard
operation procedures, written manuals or policies, workflows and standard forms are updated
and/or reviewed from time to time and are made available to all staff on our Group’s
intranet to ensure they are easily accessible by our employees. Our Group adopts various
operation workflows setting out standard procedures in handling daily operation tasks and
respective levels of authorisation and approvals required for these tasks. We also have an
employee handbook which lists out and provides guidance on proper conducts and duty
obligations over various aspects of daily works. The handbook is circulated to every staff
upon joining our Group and employees are required to attend trainings to ensure all our staff
understand our internal control policies.
Risk management in relation to article contents and use of images/photos
We have adopted internal control practices over newsfeeds and articles to be published
and images and photos to be used on our media platforms to ensure legal and regulatory
compliance of our contents and avoid infringement of intellectual property rights of third
parties. Newsfeeds and articles are required to be fact checked and reviewed by senior
creative services staff or senior editors before publication. Publication functions to publish
newsfeeds and/or articles onto our third party social media platforms are restricted to
administrator accounts of these platforms, to which only senior staff has authority and
access. For publication of magazines, the overall contents of every issue must be reviewed
and approved by chief editors of the respective Business Units. We maintain our own photo
database and we have a set of standard operating procedures to give guidance to staff when
using images and/or photos from third party sources. Our strategic planning manager and
Platform Team also gathers real-life examples of image copyrights infringements. Regular
training sessions are held to provide guidance to staff and bring to their attention latest
real-life examples and updates in our standard operating procedures in order to mitigate risk
of infringement.
To enhance the effectiveness of the abovementioned practices in preventing legal or
regulatory breach and avoiding infringement of intellectual property rights of others, we
have compiled:
(a) a set of Standard Operating Procedure which systematically sets out, among
others:
– the job duties of the different posts of the content team;
– a fact check checklist;
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– guidelines for creating posts;
– code of ethics prohibiting unauthorised use of copyrighted images and
contents and encouraging originality;
– link for easy access to guidelines for using images and photos from third
party sources;
(b) an Article Formatting Standard Operating Procedure which, among other matters:
– specified requirements for crediting photo and content sources;
– emphasised the duty of the editors and senior editors to fact check contents
to be posted;
– provided guidelines on the use of evergreen content.
During the Track Record Period and up to the Latest Practicable Date, our Group has
not been involved in any administrative or legal proceedings or material claims in relation to
the content and advertisement on our Digital Media Platforms and our publications. During
the Track Record Period and up to the Latest Practicable Date, there have only been 33
claims against us for using copyrighted images of others which resulted either in our paying
of licence fees and and/or removal of the relevant images and 2 claims against us for using
copyrighted contents of others which resulted in either our apology and/or removal of the
relevant article, and total licence fees/compensation paid by us arising from such claims
amounted to approximately HK$76,000. All of these claims, except several with total
claimed amount of less than HK$47,000, have been settled.
We consider, and the Joint Sponsors concur, that we have adequate procedures in place
for approving the publication of our Group’s feeds and articles on our Digital Media
Platforms, taking into account that there were only 33 claims which resulted in payment of
licence fee and/or action by our Group as abovementioned, while our Group published over
180,000 social posts on our Digital Media Platforms, over the Track Record Period.
We and our Hong Kong legal advisers consider that our Group’s use of contents
previously published by other media without their consents under those 33 claims disclosed
above, out of such enormous amount of feeds and articles that our Group published
throughout the Track Record Period, together with their nature of claims and compensation
paid, were isolated events and were immaterial.
We have also recently formalised our internal procedures for handling content
complaints and enquiries into a written operating procedure for easy reference and guidance
to our staff.
For instance, in late August 2021, Sunday Kiss noted there were social media feeds by
a reader on its Facebook and Instagram pages concerning an Instagram feed posted by
Sunday Kiss (“ Sunday Kiss Feed ”), and the said reader alleged the captions of the Sunday
Kiss Feed may give certain impression and may cause misunderstandings of certain medical
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condition. Having noted the alleged impression, although we are of the view that it was
misconceived, Sunday Kiss took prompt action and quickly revised the captions of the
Sunday Kiss Feed to minimise the possibility of being misinterpreted or misunderstood, and
then decided to withdraw, and had withdrawn, the Sunday Kiss Feed within three working
days from its publication because Sunday Kiss decided to compile a special piece to explain
the subject matter from a medical perspective with participation of a specialist to provide
further insight and information on the relevant subject, which Sunday Kiss published within
two weeks from the Sunday Kiss Feed.
We did not intend to publish any content contained in the Sunday Kiss Feed to be false
and considered the content so published was not false. Our Hong Kong legal advisers had
reviewed the Sunday Kiss Feed and the said reader’s allegation, and are of the view that
while it may be very subjective for a reader to construe an article he reads, on balance of
possibilities, it is not likely that the captions of the Sunday Kiss Feed before revision be
understood to bear the meaning as alleged by the said reader.
Information system risk management
We collect and receive from our audience, visitors and clients a variety of information.
Data collected are maintained in our centralised information systems located behind virtual
private clouds (“ VPC”) maintained by reputable third party cloud computing service
providers. Restriction in access to these information is implemented with different levels of
authority set for different departments and function teams, and our staff can only access
information correlated to his/her role when such information is required for performing his/
her job duties. Please refer to the paragraph headed “Data Protection and Security” of this
section.
Credit risk management
Our credit risk is primarily attributable to our trade receivables. As disclosed in the
section headed “Business – Payment Terms, Credit Policy and Credit Control” of this
prospectus, we have internal guidelines in place providing guidelines on recovery of long
overdue payments and we have a designated credit control team to monitor the settlement
status of our bills on daily basis. Our management will also closely monitor the payment
collection status from our clients. For further details of the analysis on our trade receivables,
please refer to the section headed “Financial Information – Discussion on Selected
Consolidated Statements of Financial Position Items – Trade receivables” of this prospectus.
Regulatory compliance risk management
To ensure compliance with the applicable laws and regulations and the Listing Rules,
our Group formed the audit committee and the corporate governance committee which are
responsible for overseeing the implementation of our risk management policies on an
ongoing basis to ensure that our internal control system is effective in identifying, managing
and mitigating risks involved in our business operations. Our audit committee comprises
three independent non-executive Directors, namely Mr. Mak Kam Chiu, Ms. Cheng Ka Y u
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and Mr. Niu Zhongjie. Mr. Mak Kam Chiu is the chairman of the audit committee. For the
professional qualifications and experiences of the members of our audit committee, please
see “Directors, Senior Management and Employees – Board of Directors”.
We have also engaged an independent internal control reviewer to prepare an internal
control review report on our Group. No material deficiency was identified in relation to the
business and operation of our Group. Our Board of Directors, senior management and
accounting department will continue to monitor compliance with our internal control systems
and policies on an ongoing basis to ensure our risk management policies are effective and
adequate for our daily operation.
MAJOR QUALIFICATIONS AND LICENSES
Our Directors confirmed that our Group has obtained all requisite business registration
certificates, permits and licences in accordance with all relevant laws and regulations in the
jurisdictions where our Group has operations. As disclosed in the section headed
“Regulatory Overview” of this prospectus, we are required to register our magazines and
books with the relevant authorities. Details of the registration during the Track Record
Period up to the Latest Practicable Date are set out below:
Type of Registration Publisher Relevant authority
Current validity
period
Registration of Economic
Digest Magazine as
local newspaper
Media Publishing Office for Film, Newspaper
and Article
Administration
4 June 2023 –
3 June 2024
Registration of Weekend
Weekly Magazine as
local newspaper
WW Publishing Office for Film, Newspaper
and Article
Administration
13 September 2022 –
12 September 2023
Registration of New
Monday Magazine as
local newspaper
New Monday
Publishing
Office for Film, Newspaper
and Article
Administration
27 September 2022 –
26 September 2023
Registration of Oriental
Sunday Magazine as
local newspaper
NM Services
Consultant
Office for Film, Newspaper
and Article
Administration
6 May 2023 –
5 May 2024
Registration of Madame
Figaro Hong Kong
Magazine as local
newspaper
NMG (HK) Office for Film, Newspaper
and Article
Administration
26 September 2022 –
25 September 2023
Registration of Economic
Digest Magazine as a
new book
Media Publishing Books Registration Office
of the Hong Kong Public
Libraries
N/A*
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Type of Registration Publisher Relevant authority
Current validity
period
Registration of Weekend
Weekly Magazine as a
new book
WW Publishing Books Registration Office
of the Hong Kong Public
Libraries
N/A*
Registration of New
Monday Magazine as a
new book
New Monday
Publishing
Books Registration Office
of the Hong Kong Public
Libraries
N/A*
Registration of Oriental
Sunday Magazine as a
new book
NM Services
Consultant
Books Registration Office
of the Hong Kong Public
Libraries
N/A*
Registration of Madame
Figaro Hong Kong
Magazine as a new
book
NMG (HK) Books Registration Office
of the Hong Kong Public
Libraries
N/A*
Registration of each
travel guidebooks as a
new book
WW Publishing Books Registration Office
of the Hong Kong Public
Libraries
N/A*
*Note: Each issue of a print magazine or travel guidebook is required to be registered with the Books
Registration Office within one month from publication. There is no expiration or validity period in
respect of such registrations.
The registration of our magazines and books were in full force and effect as at the
Latest Practicable Date. We did not experience any material difficulties in renewing the said
registrations during the Track Record Period and up to the Latest Practicable Date, and we
currently do not expect to have any material difficulties in renewing such registrations when
they are to expire.
INTELLECTUAL PROPERTY
As at the Latest Practicable Date, our Group has registered a number of trademarks and
domain names for our media platforms and corporate names. Further details of our
intellectual property rights are set out in “Further Information about Our Business –
Intellectual Property Rights” of Appendix IV in this prospectus.
As disclosed in the section headed “Business – Our Media Brands – Madame Figaro
Hong Kong” of this prospectus, we are granted the exclusive right under the Licence
Agreement to create and operate a Hong Kong version of Madame Figaro French website
dedicated social network accounts under the name of “madamefigarohk” and
“madamefigaro.hk” and a Hong Kong edition of Madame Figaro magazine under the title
“Madame Figaro Hong Kong”. Under the Licence Agreement our Group was also granted
the right to use various trademarks as set out in the section headed “Statutory and General
Information” of Appendix IV in this prospectus.
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During the Track Record Period and up to the Latest Practicable Date, we did not have
any knowledge of any material disputes or infringements in connection with our intellectual
property rights by any third party in Hong Kong, nor have we knowingly violated or been
the subject of any claims relating to the intellectual property rights of any third party which
could have a material adverse effect on our operations or financial performance.
PROPERTIES LEASED BY OUR GROUP
During the Track Record Period and as at the Latest Practicable Date, our Group did
not own any real property. As at the Latest Practicable Date, we had no single property with
a carrying amount of 15% or more of our total assets, and on this basis, we are not required
by Rule 5.01A of the Listing Rules to include in this prospectus any valuation reports.
Accordingly, pursuant to section 6(2) of the Companies Ordinance (Exemption of Companies
and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of
Hong Kong), this prospectus is exempted from compliance with the requirements of section
342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in
relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, which requires a valuation report with respect to all of
our interests in land or buildings.
Hong Kong
During the Track Record Period our Group has rented various parts of NMG Tower
from Winning Treasure for our business operation, included as our main office, data centre
and production studios. Details of the tenancy agreements are set out in the section headed
“Connected Transactions” of this prospectus. On 21 April 2021, Winning Treasure served on
us an early termination notice pursuant to the terms of the tenancy agreement terminating
the tenancy on 31 January 2022. We have relocated our headquarter to our current office,
which has a total gross floor area of approximately 36,000 square feet, in late November
2021. In late December 2021, we have rented additional spaces of approximately 2,500 sq.ft.
in aggregate in the vicinity of our headquarter for ancillary use.
PRC
During the Track Record Period, our Group has leased a property in Guangzhou, PRC
with an approximate gross floor area of 366 sq.m. from an Independent Third Party for use
as the office premises of Guangdong Xinchuan, which expired on 4 January 2023.
Guangdong Xinchuan has since relocated to another premises in Guangzhou with an
approximate gross floor area of 86.58 sq.m., which was leased from another Independent
Third Party for the duration of one year from 1 January 2023 to 31 December 2023.
EMPLOYEES
As at 31 December 2020, 2021 and 2022 and the Latest Practicable Date, our Group
had in total 267, 263, 240 and 236 full-time employees respectively, out of which 12, 10, 11
and 11 were based in Guangzhou, PRC.
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During the financial year ended 31 December 2020, we laid off approximately 20 staff
due to the restructuring of our print circulation. Save for the aforesaid, we have not
conducted any material laid off exercise during the Track Record Period.
A breakdown of the number of our full-time employees by functions and geographic
locations as at the Latest Practicable Date is as follows:–
Functions
As at
the Latest Practicable Date
Hong Kong
Guangzhou,
PRC
Management 11 –
Content and production 86 –
Sales, account servicing and project delivery 55 –
Platform specialist 17 –
Product specialist 5 –
IT development and project management 11 10
Administrative and supporting 36 1
Trainee 4 –
Sub-total 225 11
Total 236
We generally recruit our employees from the open market and enter into employment
contracts with our employees. The Group has not experienced any labour shortage or
difficulties in recruitment during the Track Record Period.
We provide a defined contribution to the Mandatory Provident Fund as required under
the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong)
for our eligible employees in Hong Kong. During the Track Record Period, we have also
complied with applicable laws and regulations relating to social welfare in all material
aspects and have paid in full the social insurance funds and housing provident fund
contributions payable as required by the PRC laws and regulations for our employees
located in the PRC. In addition to salaries, our employees who are retained after the
probation period are entitled to discretionary bonuses and medical insurance coverage in
Hong Kong. Our Group also has a sales commission scheme in place, where employees in
our sales teams are entitled to commissions aligned with key performance indicators of each
individual, reviewed on quarterly basis. During the Track Record Period, such commissions
paid by our Group amounted to HK$4.5 million, HK$7.7 million and HK$5.8 million for the
years ended 31 December 2020, 2021 and 2022 respectively.
We provide regular internal training programmes to our employees so as to enhance our
overall efficiency and legal and regulatory compliance. We will continue to offer training on
industry knowledge and provide updated market information to our employees. For instance,
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the training topics include production techniques (e.g. photography or content writing) and
management skills, new software features, copyrights control measures, guidance on personal
information collection, and updates on third party social media platforms’ policies.
We have maintained a good working relationship with our employees during the Track
Record Period and up to the Latest Practicable Date. During the Track Record Period, we
have not experienced any labour disputes which have materially and adversely interfered
with our operations.
INFORMATION SYSTEM
As at the Latest Practicable Date, our Group has information technology systems for
our daily operation procedures and which also serves to strengthen our internal control
system. These systems include (i) a self developed sales system which incorporates our
internal approval matrix for creating and execution of contracts, monitors progress of our
projects from the acceptance of client engagements, internal job assignments, setting out
billing schedules to retaining job proofs of the advertising solutions we offered; and (ii) an
expense and claiming system maintained by third party service provider under which
budgets, payments and expenses of each project are recorded and tracked in order to monitor
our hard costs and to ensure compliance with our internal payment approval policy.
As confirmed by our Directors, there had been no system or network failure which
caused material interruption to our operations during the Track Record Period.
DATA PROTECTION AND SECURITY
Data collection, storage and use
In the course of our business operation, we collect and receive different types of data
from subscribers, users and audience of our media platforms. The data are generally
collected in the following ways:
a. personal data (such as name, email address, phone number, mailing address,
delivery address, gender, month and year of birth, age, age range, Hong Kong
identity card number (collectively as “ Personal Data ”) – when subscribers
subscribe to our print or e-copy of the Economic Digest magazine, our website or
mobile apps membership or digital newsletters or participating in promotional
campaigns on our Digital Media Platforms;
b. device-specific data (such as device IDs) – when the users use our mobile apps;
c. demographic and behavioural data (e.g. audience browsing behaviour and interest
preference, which do not contain Personal Data) (“ Demographic Data ”) – when
users browse our Digital Media Platforms; and
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d. transactional data (e.g. purchase transaction history and patterns, which do not
contain Personal Data) (“ Transactional Data ”), when users or audience subscribe
to our magazines or make purchases through or participate in promotional
campaigns on our Digital Media Platforms.
The Personal Data are collected by our Group predominantly digitally through our
Digital Media Platforms and some in print forms such as submitted by the subscribers for
our print Economic Digest magazine. The print forms containing Personal Data are stored in
our office in locked cabinets, while those Personal Data collected electronically are stored in
our VPC. We have in place internal control measures for periodic deletion (if in digital
form) or destruction (if contained in print forms) to ensure our compliance with the PDPO
and the relevant DPPs.
The Demographic Data collected by the third party social media platforms which
hosted our Digital Media Platforms are provided to us through the data analytic tools which
we subscribed to. The Demographic Data and other digital data we received are stored in
our VPCs.
We utilise the data we collected to analyse audience behaviour in order to enhance
engagement on our Digital Media Platforms and improve effectiveness of our advertising
solutions. As disclosed in the section headed “Our Products and Services – Advertising
Solutions” above, we may share analysis of selected Demographic Data with clients on case
by case basis to measure the effectiveness of specific advertising campaigns.
We do not however share any Personal Data of our subscribers, audience or visitors
with any third party except for the required use of such data, e.g. the delivery address and
name of subscriber/recipient will be passed to our service provider for delivery of the
magazine or goods purpose only, or as required by law.
Internal control measures
To ensure due compliance with the relevant laws and regulations, our Group has
adopted internal control practices over collection and use of Personal Data by our Group,
which have been compiled into a specific set of personal data guidelines for more effective
implementation and which:
(a) sets out the data protection principals under the PDPO;
(b) classifying the nature of information and data which may be collected by our
Group in our ordinary course of business;
(c) providing guidelines and examples as to the information that can be collected to
ensure that no excessive data is being collected;
(d) providing templates for data collection to ensure that all requisite explanatory
statements such as the purpose of collecting the relevant data, possible use of
such data, the rights of information provider and opt-in statement for receiving
marketing information etc are included;
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(e) set out the specific procedures for handling opt-out requests and listed out
contacts of the relevant personnel to ensure all enquiries regarding data access
and opt-out requests are handled in a timely manner.
Our employees are also required to complete trainings on personal data protection as
part of their induction training and to take annual quizzes on personal data protection to
emphasis the importance of handling personal data in compliance with legal requirements.
As mentioned above, information and data we collected from our audience and visitors
to our Digital Media Platforms as well as those of our clients in the course of our business
are stored in VPCs. Network access to the VPCs holding these data are protected by
firewalls and inbound and outbound traffic control to avoid unauthorised access from third
parties outside our Group. We have also adopted internal controls and measures to protect
the security of these data and to ensure the data are handled in compliance with the PDPO.
These include:
(a) access to the data within our Group are limited by restricted IP access and
password protection, such that only designated personnel will have access to the
data or the relevant part thereof on a need to know basis;
(b) Personal Data will only be kept for reasonable period of time to carry out the
purpose for which these data are collected, and will be deleted permanently at
designated intervals to ensure Personal Data is not kept longer than is necessary
for the fulfillment of such purposes; and
(c) to perform regular check to identify unauthorised access.
Compliance with PDPO
As confirmed by our Directors and our Hong Kong legal advisers, only the Personal
Data are regulated under the PDPO. In April 2018, our Group received an enquiry notice
from the Privacy Commissioner for Personal Data, Hong Kong concerning the data that
would be collected in the then subscription form of Economic Digest, who was satisfied
with the measures we adopted to address the subject of the enquiry and no further action
was taken by the Privacy Commissioner.
Our Hong Kong legal advisers are of the view that during the Track Record Period and
up to the Latest Practicable Date, our Group are generally and materially in compliance with
the relevant provisions of the PDPO and the six DPPs.
INSURANCE
We maintain employees’ compensation insurance in compliance with the Employees’
Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) to cover compensation
and costs liable by our Group for personal injuries of our employees in Hong Kong in the
course of employment with us. We have also taken out and maintained (i) accidental damage
insurance, (ii) electronic equipment insurance, (iii) public liability insurance, (iv) business
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interruption insurance, (v) cash all risk insurance; and (vi) senior management fidelity
guarantee insurance. Our Directors consider that our Group’s insurance coverage is sufficient
and in line with the general industry practice in Hong Kong.
No material claim has been made by our Group during the Track Record Period under
any of the insurance policies taken out by our Group.
A W ARDS AND RECOGNITION
During the last few years, we have received the awards set out in the table below in
recognition of our achievement in the digital advertising industry:
Award Recipient
Y ear(s)
awarded Issuing Organisation
Kam Fan Awards – Digital
& Social – Social
Single – Co-Creation &
User Generated Content
(Merit)
ωᄿѓɽᆤ
Sunday Kiss 2019 The Association of
Accredited Advertising
Agencies of Hong Kong
ಥᄿѓਠึ
Kam Fan Awards – Digital
& Social – Social
Single – Influencer /
Talent (Merit)
ωᄿѓ
ɽᆤ
Sunday Kiss 2019 The Association of
Accredited Advertising
Agencies of Hong Kong
ಥᄿѓਠึ
Marketing Excellence
Awards 2020 –
Excellence in Content
Marketing (Gold)
New Media
Group
2020 Marketing Magazines
ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE MATTERS
In order to fulfil our obligations as a responsible corporate, we are dedicated to
promoting environmental protection, corporate social responsibility, and best corporate
governance practises. Our Directors are responsible for identifying risks and implementing
risk reduction strategies. A summary of the environmental, social and climate related risks
associated with our business, and measures implemented to reduce such risks, during the
Track Record Period is set out below. We have formulated a set of ESG policies, details of
which are set out in the paragraph headed “ESG Policies and Governance” below, with an
aim that our Group can operate our business in a responsible and sustainable manner and to
drive ESG related opportunities.
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Environmental
As we do not operate any printing or manufacturing facilities, we are not a major
source of environmental pollution as our operations do not generate material air, noise,
water, physical waste or other types of pollutants, and we believe we are not subject to any
significant environmental risks. Therefore, we do not anticipate incurring any significant
obligations or expenses in these areas. The operation of our Group is not subject to any
environmental laws and/or regulations and accordingly has not incurred any cost of
compliance during the Track Record Period and up to the Latest Practicable Date. During
the Track Record Period, our Group was not subject to any environmental claims, lawsuits,
penalties or disciplinary actions.
We strive to make our best endeavours to protect the environment in our business
activities and workplace. Despite the fact that the operation of our Group will only have
minimal environmental impact due to its business nature, we still seek to identify and
manage environmental impacts attributable to our operations in order to minimise these
impacts if possible.
Energy consumption and saving measures
Our energy usage is mostly caused by the use of electricity in our offices and the
maintenance of IT services at the data centres of our external service providers. Indirect
greenhouse gas emissions are primarily caused by the usage of electricity. As a result, one of
the main focuses in our operations is to increase energy efficiency and decrease our carbon
impact.
In late 2021, we have relocated our headquarter to our current office at The Quayside,
an eco-friendly building which has received various certifications and awards in this respect
by institutions such as Beam Plus platinum rating at Hong Kong Green Building Council
and gold award at MIPIM Asia awards 2019. For instance, it has adopted a lighting control
system whereby certain lightings are preset to turn off automatically during non-office hours
unless motion sensor is activated and daylight sensors are installed which adjusts the
lighting level and turn off the lights near windows in the daytime as appropriate, which
helps reduce energy consumption. Prior to moving to our new headquarters, we have also
used energy saving lighting system in our office.
The table below sets forth our electricity consumption during the Track Record Period.
Y ear ended 31 December
2020 2021 2022
Total electricity consumption
in kWh 301,466 296,502 214,048
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Since moving to our new headquarter our electricity consumption for the year ended 31
December 2022 decreased by approximately 21.1% from that for the year ended 31
December 2021. It is anticipated that our overall electricity usage will remain relatively
stable over the course of the next three years, as we have relocated to an eco-friendly office
building. As we anticipate an increase in the number of employees from expansion of our
business operations, we recognise the potential for an increase in our overall energy
consumption. To address this, we have set a target to maintain our total electricity usage at a
similar level without exceeding an increase of 5%. This goal aligns with our commitment to
sustainable practices and reducing our environmental impact. We believe that by closely
monitoring and controlling our electricity consumption, we can reduce our carbon footprint
but also potentially save costs on energy bills.
Paper consumption and saving measures
Another major resource consumption for our business is paper. Over 99% of the
Group’s total paper consumption was attributable to magazine publication. It’s the major raw
material used in the printing of our Group’s print magazines. To the best of our Directors
knowledge information and believe, one of our top five suppliers which provide print
services for our print magazines used papers supplied by paper mills that are members of
Forest Stewardship Council or Programme for the Endorsement of Forest Certification,
promoting responsible and sustainable management of the world’s forests.
During the Track Record Period we have also introduced new operating systems which
convert more operating functions to go online and paperless, and unsold copies of our print
magazines and books were disposed of for waste recycling. The table below set out our
paper consumption over the Track Record Period:
Y ear ended 31 December
2020 2021 2022
Total paper consumption in
tons 645.7 198.3 186.7
Total paper collected for
recycling in tons 43.5 65.3 38.9
As such, our total paper consumption has an overall declined over the Track Record
Period. As disclosed in the “Business” section of this prospectus, during the Track Record
Period we have reduced our print publications. We do not have plans at this stage to further
reduce our magazine titles but will monitor changes in market trends and review from time
to time whether to implement any further adjustments to our print circulation. We are also
exploring more eco-friendly printing such as recycled paper and eco-friendly ink from
sustainable forestry practices and chemical waste. By switching to these sustainable
practices, we hope to reduce environmental impact and demonstrate commitment to
sustainability.
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Electronic waste and pollution
We also endeavour to reduce electronic waste in our business operation. We donate our
obsolete IT devices such as personal computers, monitors and laptops to charitable
organisations which will be re-used or pass to government recognised recyclers for
recycling.
Climate-related Issues
Climate change may potentially cause disruptions to our business operations, thereby
affecting our financial performance. Set out below are climate-related risks we have
identified as relevant to our business, which can be categorised into physical risks and
transition risks, their potential impact to our business and the measures to mitigate such
risks.
Physical Risks
Physical risks are the risks that may potentially cause physical impact to our Group’s
operations. For instance, extreme weather may disrupt power supply and hence internet
outage, which in turn may hinder audience from visiting our Digital Media Platforms, affect
those of our operations and those of our suppliers which have gone online and the printing
of our publications; and the increase in global temperature may lead to an increase in energy
consumption by our Group’s offices. We expect that such risks apply to our competitors as
well and therefore would not have a material impact on our operations and financial
performance in the short or medium term. A range of measures, such as contingency plan for
extreme weather or emergency conditions, are in place to enhance the resilience of the
Group’s operation to such risk.
Transition Risks
Transition risks are the risks related to the transition to a lower-carbon economy, which
may entail extensive policy, legal, technology, and market changes to address mitigation and
adaptation requirements related to climate change. For instance, (i) regulators may impose
more stringent ESG-related disclosure requirements; and (ii) technological advancements
may affect our ability to compete unless we invest in the relevant technology. Such changes
may therefore result in increased operating costs for us. The Group shall regularly monitor
existing and emerging trends, climate-related policies and regulations.
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Metrics and Targets Used by the Group and Assessment of Risk Caused by Energy
Consumption by the Group
As mentioned above, the majority of our energy usage results from the electricity
consumption required to operate our office and business functions. Electricity consumption
is identified as the primary source of carbon emissions of the Group.
The following table sets forth a breakdown of our greenhouse gas (“GHG”) emission
during the Track Record Period:
Y ear ended 31 December
2020 2021 2022
GHG emission from energy
consumption (KgCO2
e) 117,517 115,635 83,478
Total energy consumption (GJ) 1,085.3 1,067.4 770.6
In setting targets for the concerned metrics, our Group has taken into account the
historical levels during the Track Record Period, and has considered our future business
expansion in a thorough and prudent manner with a view of balancing business growth and
environmental protection to achieve sustainable development. As we anticipate an increase in
number of employees from expansion in our business operation, we have set a target to
maintain our total electricity usage at a similar level without exceeding an increase of 5%.
Based on this, as electricity consumption is identified as the primary source of carbon
emission of the Group, we also target to maintain similar level of GHG emission without
exceeding an increase of 5%. Therefore, the Group intends to adopt the following initiatives
to reduce future energy consumption and improve overall energy efficiency.
– Higher priority given to purchasing electrical appliances with high energy
efficiency grades
– Apply energy-saving modes by default for all electrical appliances
– Require staff to turn off the lights in their zones after work
– Maintain constant room temperature with thermostats in the air-conditioning
system
– Remind staff to maintain the room temperature at 25.5
oC
– Require staff to switch off the air-conditioning when rooms are not in use
Through consistent measurement, target setting and monitoring of GHG emission, we
are able to effectively assess and manage risks from increased energy consumption, lower
environmental impact and achieve cost savings. Our Group will make continuous efforts in
working towards the target of reducing our GHG emission.
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Workforce Distribution and Diversity
We have a diverse workforce in terms of both gender and age. The demographics of
our Group’s workforce as at 31 December 2022 are summarised below:
By Gender
Male: 33%
Female: 67%
By Age
30 or below: 46%
31 to 45: 38%
46 or above: 16%
Occupational Safety and Health
We place emphasis on occupational safety and health of our employees. We have set
out in our employee handbook the policies adopted by our Group in relation to workplace
safety and the relevant procedures to be followed for matters relating to occupational safety.
We strive to provide a safe, effective and congenial work environment for its staff. Health
and safety training is provided to employees on induction. Workshops and seminars on
different topics are regularly held to present the latest information and raise awareness of
occupational health and safety issues for employees. Employees are also encouraged to
actively report to the relevant departments where risks in relation to workplace safety is
identified. During the Track Record Period and up to the Latest Practicable Date, there were
no material accidents in the course of our operation which resulted in claims for personal or
property damage or compensation paid to employees and we had not encountered any
material claims or complaints from our employees in respect of health or occupational safety
issues relating to our business operations.
The outbreak of COVID-19 in early 2020 has been declared a Public Health
Emergency of International Concern by the World Health Organisation. In light of the
situation, our Group has adopted precautionary measures to safeguard the health and
well-being of the Group’s staff and customers, for example, surgical masks and disinfectant
products were available in the offices for the use of our employees. Policies such as visitors
to our Group’s office were required to fill in health declaration forms and taking body
temperatures before entering our office were adopted in order to minimise risks of spread of
COVID-19 in office.
Community Involvement
During the year ended 31 December 2020 and 2021, the Group was awarded the Caring
Company Logo by the Hong Kong Council of Social Service, recognising its ongoing
commitment to fulfilling its corporate social responsibilities. During the year ended 31
December 2020 and 2021, our Group have acted as media sponsor and provided both print
and online advertising spaces free of charge to non-profit making or non-governmental
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organisations such as Orbis, Po Leung Kuk, S.K.H. St. Christopher’s Home, Tung Wah
Group of Hospitals and the Society for the Prevention of Cruelty to Animals (SPCA), to
help promote their campaigns and in turn benefit the local community and people in need.
ESG Policies and Governance
Upon the recommendation of our internal control consultant, our Group formulated a
set of policies (the “ ESG Policy ”) concerning the environmental, social and corporate
governance practices of our Group in order to ensure due compliance with the relevant
requirements under applicable laws and regulations and promotes our corporate social
responsibility. By implementing the ESG Policy, we aim to strengthen sustainable
development in the following aspects of our daily operations: (i) addressing equal
opportunities, diversity, anti-discrimination in workplace; (ii) enhancing occupational safety;
(iii) promoting benefits and welfare of our employees; and (iv) evaluating our environmental
policies and performances regularly.
The ESG policy which outlines, among others, (i) ESG governance structure; (ii) ESG
strategies, approaches and implemented measures and (iii) ESG risk management and
monitoring. The set of ESG policies covers aspects including climate change, health and
safety policy and the Group’s environmental-sustainability and people-sustainability.
Our Board has the overall responsibility for the effectiveness of our Company’s ESG
strategies and their execution. Under the ESG Policy, we have created a ESG work team
which comprises executive Director(s), representatives from operations and supporting
departments including legal & secretarial, finance & accounts, human resources &
administration, investor relations and communications departments, with the following
responsibilities:
ESG Work Team shall work through the key performance indicators (KPIs) and assess
the following related matters:–
a) the scope of the ESG report
b) comprehensive list of stakeholders
c) list of KPIs
d) list of material issues from the Company (internally) and from stakeholders
(externally)
e) develop methodology to collect data for relevant KPIs
 formulate and execute action plan taken by the Group in furtherance of the
ESG initiates, and report to the executive committee / Board from time to
time
 foster the identification, evaluation, control and reporting of ESG related
risks and issues.
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The ESG work team then reports to the executive committee, which comprises of the
executive Directors of the Company. The executive Directors are mainly responsible for
overseeing the formulation and implementation of our ESG Policy and ESG strategy and
make recommendation to the Board on setting of ESG goals and targets.
Based on the recommendations from executive committee, our Board will review the
progress made towards achieving the ESG-related goals as well as effectiveness of the
management approach and strategy and implement enhancement as appropriate.
After Listing, the Board will also conduct annual review of the implementation status
of the ESG Policy and publish an Environmental, Social and Governance Report to ensure
continuous compliance with the relevant laws and regulations.
IMPACT OF COVID-19
Overall business environment and our business in 2020 and 2021
COVID-19 has brought about unforeseen adverse impact on the global economy across
different industries and has been declared a Public Health Emergency of International
Concern by the World Health Organisation since early 2020. According to the Euromonitor
Report, the advertising industry has recorded a decline of approximately 28% in overall
revenue to HK$20.9 billion in 2020 from HK$29.0 billion in 2019. In particular, the online
advertising segment has experienced approximately 15.5% decrease in total revenue in 2020
when compared to that of 2019, whereas the print advertising segment recorded a 35%
decrease in total revenue when compared to 2019. As mentioned in the Euromonitor Report,
advertising activities in Hong Kong are highly aligned with the overall economic and
business environment. The disruption in business activities caused by COVID-19 has
reduced demand for advertising spending as businesses in Hong Kong need to reduce
unnecessary spending to cope with the adverse impact brought by the worsening economic
and business environment, and the business sector also require more time to digest changes
caused by the pandemic in order to refine their advertising strategy for a more cost-effective
solution, leading to delay to the overall advertising spending in 2020.
According to the Euromonitor Report, in 2021, Hong Kong’s advertising industry
gradually recovered alongside the diminishing adverse impact brought about by the
COVID-19 pandemic, and with the increase in economic and consumption activities, a total
revenue of the advertising industry of approximately HK$27.6 billion was recorded in 2021,
which represented a growth of 32.2% as compared with that of HK$20.9 billion recorded in
2020.
For the year ended 31 December 2021, our Group recorded an increase in revenue to
approximately HK$245.2 million from approximately HK$211.6 million for the year ended
31 December 2020, representing an increase of approximately 15.9%. The increase in
revenue was mainly attributable to the increase in our digital advertising income by
approximately HK$51.6 million from approximately HK$180.3 million for the year ended 31
December 2020 to approximately HK$231.9 million for the year ended 31 December 2021.
Our Directors believe that the increase was primarily attributable to businesses and the
general public being adapted to the COVID-19 pandemic, and hence the businesses resumed
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their advertising spending during the latter half of 2021 that were delayed due to the
pandemic. Businesses that were more adapted to pandemic environment and with targeted
consumers being the local general public, including the banking, insurance and investment
services, retail and online stores, electronic appliances, cosmetic and skincare, toiletries and
household, pharmaceuticals sectors drove the increase in our digital advertising income.
During the two years ended 31 December 2021, no clients’ confirmed project was
cancelled or delayed due to the pandemic. Accordingly, there were no potential loss and/or
penalties caused and/or delay in recognition of revenue from one accounting period to
another. Some of our Group’s own marketing events more affected by the pandemic such as
the Weekend Weekly dining awards have been cancelled though.
On the other hand, due to the nature of our business, apart from printing houses and
Supplier A which operates a social networking platform which we engaged it for boosting
for our online marketing solutions, most of our suppliers are production houses and
freelancers which are engaged for production of still photos, videos and other multi-media
contents. In light of the scale of production of our advertisements, we usually do not require
substantive team of production staff and the social distancing measures implemented by the
Hong Kong Government did not pose substantial impact on our production workflow.
Furthermore, as we have a list of approved suppliers for production, when some suppliers
are affected by the pandemic, we can always engage other suppliers providing similar
service, which makes our operation less prone to the impact of COVID-19. As for our print
magazines, most of the printing process took place in Hong Kong and our print magazines
were mainly distributed locally. The impact of anti-pandemic lock-down measures on our
business operation has therefore been minimal, and we have not encountered any material
disruption to our production and delivery of our products and services because of the
COVID-19 pandemic. We also confirm that our Group has not suspended operation during
the Track Record Period.
Impact of the fifth wave pandemic outbreak with Omicron variant in 2022 and our
overall business and financial performance during the year ended 31 December 2022
Since late November 2021, COVID-19 with Omicron variant has been rapidly
spreading across the globe and causing the fifth wave outbreak of the pandemic in Hong
Kong since January 2022. Number of confirmed cases in Hong Kong surged and peaked in
early March 2022. Stringent social distancing measures have been imposed in the first
quarter of 2022, which weighed heavily on a wide range of economic activities as well as
economic sentiment in Hong Kong. A marked deterioration in the Hong Kong economy is
seen in the first quarter of 2022 with real GDP contracting by 4.0% year-on-year according
to the First Quarter Economic Report 2022 published by the Office of the Government
Economist. During the first four months of 2022, our Group experienced an approximately
6% drop in revenue when compared with the corresponding period in 2021, which is
generally in line with the contraction of Hong Kong’s real GDP during this period.
Nevertheless, during the year ended 31 December 2022, the Group has not received
any requests to cancel confirmed advertising campaigns or to delay execution of confirmed
advertising projects as a result of the fifth wave of pandemic, and none of our Group’s top
10 clients have ceased or suspended business. Furthermore, despite that during the early
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outbreak of the fifth wave we have 40 employees tested positive in February and March
2022, as the occurrences were spread out and we have re-adopted work from home policy
since the outbreak of the fifth wave, our Group’s business operation has not been hindered
due to such occurrences.
Following the gradual easing of the fifth wave of the pandemic, our business recovered
with the revenue for May to July 2022 recorded a slight increase of approximately 3% as
compared with the corresponding period in 2021, evidencing the (i) the pent-up advertising
needs during the fifth-wave; and (ii) the recovery along with the relaxation of social
distancing measures since late April 2022. With the relaxation of the social distancing
measures, quarantine measures and travel-related tests in the last quarter of 2022, our
revenue for the year ended 31 December 2022 recovered to the same level as that for the
financial year ended 31 December 2021 and exceeded that for the year ended 31 December
2020 by approximately 13.7%.
Directors’ and Joint Sponsors’ views on the sustainability of the Group’s business
Industry trend and future market demand
The rapid digital transformation in Hong Kong resulted in a structural change in the
industry over the historical period, advertisement spending, following the shift in terms of
consumer daily time spent from traditional media platforms to online media platforms, has
also leaned towards online advertisement. According to the Euromonitor Report, after more
than three years of COVID-19 pandemic, Hong Kong has finally lifted all travel restrictions
and pandemic containment measures and the overall consumer expenditure is expected to
recover and grow over the forecast period from 2023 to 2027. The expected momentum in
the recovery of consumer spending power also drives the expected advertising spending in
Hong Kong over the forecast period. Revenue of the advertising industry is expected to
regain its growth momentum and increase to approximately HK$29.8 billion in 2023, and
grow with a CAGR of approximately 7.3% from 2023 to 2027. Among the segments of
advertising industry, online advertising segment is expected to record the largest growth at a
CAGR of approximately 11.4% from 2023 to 2027, whereas print advertising is expected to
record negative growth of 5% during the same period. As one of the major digital media
companies in Hong Kong, the Directors are of the view that the financial performance of the
Group will align with the abovementioned growth trend in the online advertising segment.
For details of the revenue of the advertising industry in Hong Kong, please refer to the
section headed “Industry Overview” of this Prospectus.
Financial performance of the Group in 2021 and 2022
The financial performance of the Group for the financial year ended 31 December 2021
has achieved a notable improvement from the recovery of the overall market sentiment of
the advertising industry in Hong Kong. The Group recorded revenue of approximately
HK$245.2 million for the year ended 31 December 2021, representing an increase of
approximately 15.9% as compared to the corresponding period in 2020. The Group also
recorded adjusted net profit (non-HKFRS measure) of approximately HK$42.4 million for
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the year ended 31 December 2021, representing an increase of approximately 3.0% as
compared to the adjusted net profit (non-HKFRS measure) of approximately HK$41.2
million for the year ended 31 December 2020.
Our Group’s adjusted net profit margin (non-HKFRS measure) for the year ended 31
December 2021 was approximately 17.3%, which is slightly lower than the adjusted net
profit margin (non-HKFRS measure) of approximately 19.5% for the year ended 31
December 2020.
The Company’s business was however affected by the fifth wave outbreak in Hong
Kong in early 2022, which weighed heavily on a wide range of economic activities as well
as economic sentiment. Nevertheless, despite the Group experiencing an approximately 6%
drop in revenue for the first four months of 2022 as compared with that for the
corresponding period in 2021, the Group has not received any requests to cancel confirmed
advertising campaigns or to delay execution of confirmed advertising projects as a result of
the fifth wave of pandemic, and following the gradual easing of the fifth wave of pandemic,
the Group’s business recovered with our revenue for the six months ended 30 June 2022
remained stable as compared to the corresponding period in 2021, decreased only slightly by
approximately HK$1.2 million, or approximately 1.2%, from approximately HK$106.1
million for the six months ended 30 June 2021 to approximately HK$104.9 million for the
corresponding period in 2022 and the revenue for May to July 2022 recorded a slight
increase of approximately 3% as compared with the corresponding period in 2021. With the
relaxation of the social distancing measures, quarantine measures and travel-related tests in
the last quarter of 2022, our revenue for the year ended 31 December 2022 recovered to the
same level as that for the financial year ended 31 December 2021 and exceeded that for the
year ended 31 December 2020 by approximately 13.7%. Based on the foregoing, the
Directors are of the view that the business of our Group will continue to be sustainable
notwithstanding the continuing effect of the pandemic.
The Group as a frontrunner in providing online marketing solutions
The Group has been a frontrunner in providing online marketing solutions and has
established the online business unit as early as 2011 to proactively explore business
opportunities for online and mobile content development. According to the Euromonitor
Report, the Group ranked second amongst online advertising companies in Hong Kong in
terms of revenue for three consecutive years of 2020, 2021 and 2022. Selected key operating
data of the Group’s Digital Media Platforms have been disclosed in the section headed
“Business – Our Products and Services – Advertising Solutions” of this prospectus. With the
steady growth in viewership and number of followers on the Group’s social media platforms
and the rapidly developing self-owned digital platforms of the Group, the Directors are of
the view that the strong and growing audience base of the Group’s Digital Media Platforms
will continue to contribute to the growth of the Group’s business.
In light of the Group’s competitive strengths as disclosed in the section headed
“Business – Competitive Strengths”, the Directors consider the Group will be able to grasp
the opportunities in the market recovery of the industry.
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Significance of the revenue generated from Repeat Clients
During the Track Record Period, advertising revenue of the Group attributable to
advertising agencies amounted to 54.9%, 47.2% and 42.5% of our revenue generated from
provision of advertising solutions for the years ended 31 December 2020, 2021 and 2022,
respectively. For each financial year during the Track Record Period, the majority of the top
five clients of the Group are 4A ’s advertising agencies, all of which have maintained more
than 10 years of business relationship with the Group and are considered as Repeat Clients
of the Group. According to the Euromonitor Report, in light of advertising agencies’
expertise in initiating, managing and implementing advertising campaigns, advertisers of
larger scale tend to engage advertising agencies to coordinate their advertising campaigns.
The advertising agencies serve as the key agent for advertisers to rely on when seeking
adequate advertising companies and will continue to be the main source of revenue as
Repeat Clients to the Group over the foreseeable future.
Reliance of certain social media sites for distribution of contents
As disclosed in the paragraph headed “Business – Suppliers and Clients – Suppliers –
Reliance on Supplier A” of this prospectus, during the Track Record Period, the cost paid by
the Company to Supplier A which operates social networking platforms engaging in the
provision of online social media advertising services amounted to approximately 52.5%,
62.6% and 50.8% of the Group’s total production and printing costs for the three years
ended 31 December 2020, 2021 and 2022, respectively. The Group also generates
programmatic revenue through the Group’s posts on Supplier A’s social media platforms.
The programmatic revenue generated from the social media platforms of Supplier A
amounted to approximately HK$8.4 million, HK$19.0 million and HK$19.2 million during
the three financial years ended 31 December 2020, 2021 and 2022, representing
approximately 4.4%, 7.9% and 8.0% of our total advertising revenue respectively. It became
one of the top five clients of our Group for the years ended 31 December 2021 and 2022.
The transaction amount between the Group and Supplier A during the Track Record
Period is primarily attributable to the dominating position of Supplier A in the social media
landscape in Hong Kong. According to the Euromonitor Report, Supplier A operates an
influential platform in Hong Kong for its highest average active monthly users from 2018 to
2021 and the second highest in 2022 as compared to its peers and versatility of contents
offered on its platforms, making it one of the most influential social media platforms in
Hong Kong. As disclosed in the “Industry Overview” section of this prospectus, according
to the Euromonitor Report, although the AAMU of Facebook in Hong Kong for 2022
dropped by approximately 1.6% from the previous year, which can be most directly
attributed to data breach incident in 2021 which had a negative impact on overall user
confidence, the AAMU of Facebook is expected to grow during the forecast period of 2023
to 2027 after the incident has calmed down. Furthermore, as demonstrated by the
programmatic revenue generated from Supplier A having remained stable at approximately
HK$19.2 million for the year ended 31 December 2022 as compared to that of
approximately HK$19.0 million for the year ended 31 December 2021, our Directors are of
the view that the data breach incident did not have any material impact on the business
operations and financial performance of the Group. With the popularity of social media
platforms operated by Supplier A, advertisers tend to place advertisements on these
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platforms when considering employing social media platforms as the principal channel for
distribution of their advertisements. The demands for Supplier A’s services is entirely driven
by advertisers’ choice of distribution platforms and unless there is a drastic change in the
social media landscape in Hong Kong, it is unlikely that the demand for the boosting
services provided by Supplier A will be shifted to other social media platform operators. The
Directors confirm that it is an industry norm for advertisers to rely on advertising solutions
(including boosting services) from Supplier A.
That said, in order to mitigate the risk of reliance on the social media platforms
operated by Supplier A, the Group also operates its own platforms including websites and
apps, and has been accelerating the development of its self-owned platforms by promoting
downloads of the Group’s apps. As at 31 December 2022, the Group has recorded over 1.4
million cumulative new downloads for the apps developed by the Group with over 38
million aggregate app sessions and 405 million aggregate app impressions. The Directors are
of the view that despite the Group’s current heavy reliance on the social media platforms of
Supplier A, the nature of the Group’s business can be shifted to other emerging social media
platforms if so requested by clients.
The Group has not entered into any contractual arrangement with Supplier A apart from
agreeing to the user policies when establishing its accounts on social media platforms
operated by Supplier A and the Directors confirm that such arrangement is an industry
practice. While the Group’s operation regarding posting advertisements on social media sites
relies on platforms operated by Supplier A, the operation of Supplier A, to a certain extent
relies on content publishers like the Group to provide content and constantly update
newsfeed to retain traffics on its platform.
Strong and stable workforce
The Group has a strong management team that possesses extensive management skills,
operating experience and solid industry knowledge and expertise. Leading by its CEO, who
is also a substantial Shareholder, Mr. Royce Lee, who has been engaged in the digital
marketing business for over 20 years, and its COO, Ms. Esther Cheung, who has over 15
years of experience in digital media and marketing, together with other management team
members with strong digital marketing background prior to joining the Group, for example
having been directors at 4A’s advertising agencies and international brand owners.
During the Track Record Period, the Group has not experienced any significant
problems with its employees or disruption to its operations due to labour disputes, nor have
the Group experienced any difficulties in the recruitment and retention of experienced staff.
As at the Latest Practicable Date, the Group has a total of 236 full-time employees, among
which 89 employees have been serving in the Group for over three years and 43 of them
have been serving in the Group for over ten years.
In addition, in order to expand and enhance the Group’s product lines and enhance the
Group’s data collection and analytical capabilities, certain net proceeds is expected to be
allocated to launch the three platforms (namely APS Platform, PSS Platform and
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E-Commerce Solution Platform) with an aim to deepen the penetration into the existing
clientele and expanding the clientele of the Group, and portion of such net proceeds is
further allocated to the hiring of appropriate personnel for these new platforms.
Conclusion
Based on the above, the Directors are of the view, and the Joint Sponsors concur that
the Group’s business prospects is promising and the business is sustainable in the
foreseeable future.
COMPLIANCE AND LEGAL PROCEEDINGS
As disclosed in the section headed “Business – Properties Leased by our Group”,
during the Track Record Period we have leased various floors of NMG Tower (the
“Premises ”) for our Group’s operation which may not conform entirely with the user set out
in the occupation permit of NMG Tower (“ Occupation Permit ”) and the Government Lease
subject to which NMG Tower is held.
The Occupation Permit stipulates that the 1st floor, 2nd floor and the 5th to 9th floors
of NMG Tower are for “workshop” use, whilst the Government Lease of NMG Tower
provides that the lessee of the land on which NMG Tower is erected is not allowed to use
the building for any purpose other than for industrial and/or godown purposes. The user of
the Premises as stated in the tenancy agreements between our Group and Winning Treasure
is industrial/godown purpose only.
Under section 25(1) of the Buildings Ordinance (“ BO”), one month’s notice in the
specified form shall be given to the Building Authority (“ BA”) of any intended material
change in the use of a building by the person intending to carry out or authorizing the
carrying out of such change; if the BA is of the opinion that such intended change of use is
not suitable then it may by order in writing served on the owner or occupier requiring the
discontinuance of the new use within 1 month. The maximum penalty is a fine of
HK$100,000.00 and imprisonment for 2 years for contravening section 25(1) of the BO. In
the event that a notice is served by the BA requiring the discontinuance of such use and
such notice is not complied with without reasonable excuse, the maximum penalty is a fine
of HK$50,000 and imprisonment for 1 year and a maximum daily default fine of HK$5,000.
The directors of a company are also liable if the non-compliances are committed with the
consent or connivance of, or to be attributable to any neglect or default on the part of them.
We have not, up to the Latest Practicable Date, received any notice or order from the BA
regarding the change in use of the Premises. We have obtained counsel opinion that the
likelihood of the maximum penalty being imposed is remote and that since there is no basis
to suggest the above non-compliances have any impact on safety, the likelihood of
imprisonment for the Directors is also remote.
The Lands Department can exercise the right of re-entry of the Government Lease in
the event of a breach of the provisions thereof and/or claim damages for such breach. It is
set out in the website of the Lands Department that if a breach of lease conditions is
detected, the Lands Department will normally issue a warning letter to the owner concerned
requesting rectification of the lease breach within a specified time. If the owner does not
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rectify the breach by the deadline, the Lands Department may register the warning letter at
the Land Registry. If the seriousness of the breach warrants further action, for instance
where the breach poses a serious threat to public safety, the Lands Department may proceed
with re-entry of the lot or vesting of the relevant interest to Government. The Government’s
press release of 29 August 2016 indicated that cases with breach of uses not attracting flow
of people, such as offices, does not fall into such category. We have not, up to the Latest
Practicable Date, received any notice or order from the Lands Department requiring us to
discontinue any of our present use of the Premises.
Winning Treasure has the right to terminate the tenancy agreement with our Group and
to claim damages against us for breach of the tenancy agreements. Notwithstanding the
breach of user as mentioned above, Winning Treasure has not raised any complaint as to
such breach and there is no subsisting disputes between our Group and Winning Treasure in
relation to our use of the Premises.
As disclosed in the section headed “Business – Properties leased by our Group” above,
Winning Treasure (which became an Independent Third Party since 21 April 2021) served a
notice of early termination of the tenancy agreement on our Group, pursuant to which our
Group had to vacate the Premises latest by the end of January 2022. Our Group has
relocated to our current office, which is located in a grade A office building, in late
November 2021.
Save as disclosed above, our Group is in material compliance of laws and regulations
applicable to our business. No member of our Group was engaged in any litigation, claim or
arbitration of material importance and no litigation, claim or arbitration of material
importance is known to the Directors to be pending or threatened against any member of our
Group during the Track Record Period and up to the Latest Practicable Date.
Our Directors confirm that, during the Track Record Period and up to the Latest
Practicable Date, our Group did not receive any material complaint from our customers
which had materially and adversely affected our business nor did our Group make any
material compensation to our customers as a result of any complaints from our customers.
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BOARD OF DIRECTORS
Our Board is responsible and has general powers for the management and conduct of
our business, and consists of six Directors including three executive Directors and three
independent non-executive Directors. We have entered into service agreements with each of
our executive Directors and letters of appointment with each of our independent
non-executive Directors.
The following table sets forth certain information in respect of members of our Board:
Name Age Position
Date of first
joining our
Group
Date of
appointment
as Director Main duties
Relationship
with other
Directors or
senior
management
WONG Chi Fai
රқሾ
67 Executive
Director and
Chairman
June 1999 22 March
2021
Overseeing the
financial
management and
advising on the
business strategic
planning and
development of
our Group
N/A
LEE Y at Pui,
Royce
ҽɓ੃
53 Executive
Director and
Chief Executive
Officer
1 October
2016
22 March
2021
Overall
management of
our Group and
planning our
Group’s business
and strategies
N/A
FAN Man Seung,
V anessa
ઽྱ
60 Executive
Director
June 1999 22 March
2021
Overseeing the
overall corporate
management and
advising on the
business
strategies of our
Group
N/A
CHENG Ka Y u
ቍྗ༃
50 Independent
Non-executive
Director
26 June
2023
26 June
2023
Overseeing the
internal control
and risk
management
systems;
provision of
independent
advice and
objective views
N/A
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Name Age Position
Date of first
joining our
Group
Date of
appointment
as Director Main duties
Relationship
with other
Directors or
senior
management
MAK Kam Chiu
௥ᎀ১
47 Independent
Non-executive
Director
26 June
2023
26 June
2023
Overseeing the
internal control
and risk
management
systems;
provision of
independent
advice and
objective views
N/A
NIU Zhongjie
ˬᒤ᭘
55 Independent
Non-executive
Director
26 June
2023
26 June
2023
Overseeing the
internal control
and risk
management
systems;
provision of
independent
advice and
objective views
N/A
Executive Directors
Mr. WONG Chi Fai රқሾaged 67, is an executive Director, the Chairman of the
Board. He has first been involved in the management of our Group in June 1999. He was
appointed as a Director on 22 March 2021. Mr. Wong is responsible for overseeing the
financial management and advising on the business strategic planning and development of
our Group. During the Track Record Period, Mr. Wong was not involved in the daily
operation of our Group, but was participating in the business of our Group on a supervisory
level and overseeing the strategic growth of our Group.
Mr. Wong is a Certified Public Accountant of the Hong Kong Institute of Certified
Public Accountants since October 1981 and a fellow of the Association of Chartered
Certified Accountants since May 1987. Having over 34 years of experience in finance and
management, Mr. Wong has diversified experiences ranging from media and publication to
manufacturing, property investment and development, hotel and hospitality, watch and
jewellery retailing, financial and securities services, wholesaling and retailing of furniture,
artiste management, entertainment production and investment as well as cinema development
and operation. He is also the managing director of Emperor International Holdings Limited
(stock code: 163), an executive director of Emperor Entertainment Hotel Limited (stock
code: 296), Emperor Watch & Jewellery Limited (stock code: 887), Emperor Culture Group
Limited (stock code: 491), Ulferts International Limited (stock code: 1711) and Emperor
Capital Group Limited (stock code: 717), all of which are listed on the Main Board.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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Save as disclosed above, Mr. Wong has not held any directorship in other public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years, nor does he hold any other positions with our Company and
other members of our Group (other than being director of the subsidiaries of the Company)
in the past three years immediately preceding the date of this prospectus.
Mr. Wong is not related to any other Directors, senior management, substantial or
Controlling Shareholders of the Company.
Save as disclosed herein, there are no other matters in relation to Mr. Wong which are
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
Mr. LEE Y at Pui, Royce
ҽɓ੃, aged 53, is an executive Director and the chief
executive officer of our Group. Mr. Royce Lee joined our Group as consultant on 1 October
2016 and became our CEO since 1 January 2017. He was appointed as a Director on 22
March 2021. He is responsible for overall management of our Group and planning our
Group’s business and strategies.
Mr. Royce Lee holds a Bachelor of Science awarded by the Chinese University of
Hong Kong in December 1992. He also holds a Degree of Master in Philosophy awarded by
the Chinese University of Hong Kong in December 1995. Mr. Royce Lee has over 20 years’
experience in marketing and brand management and specialised in digital marketing. After
graduation, Mr. Royce Lee worked in Nestlé China Limited from September 1995 to July
1997 first as a marketing executive trainee and then as marketing executive. He then joined
Coca-Cola China Limited initially as brand executive in the marketing department and was
consumer marketing manager when he left the company in September 1999. In February
2001, he invested and also took up directorship in e-Crusade Marketing Co. Ltd.
(“e-Crusade”, which changed its name to Razorfish (Hong Kong) Co., Limited in February
2009), a start-up creative agency for digital marketing in which Ms. V enus Lee was also
shareholder and director. Mr. Royce Lee, then holding over 41% interest in e-Crusade,
together with the other shareholders sold all their interest in e-Crusade in 2006 to aQuantive
International Holdings, Inc., a leading interactive marketing services firm in the U.S., and
became employed as managing director of e-Crusade until he left in 2010. Mr. Royce Lee
then ventured into e-learning and co-founded Aedify Technology Limited with Ms. V enus
Lee in 2012, aiming to apply digital technology to facilitate learning, but which ceased
business at about the time Mr. Royce Lee joined our Group in 2016.
Save as disclosed herein, Mr. Royce Lee has not held any directorship in other public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years, nor does he hold any other positions with our Company and
other members of our Group (other than being chief executive officer of our Group and
director of the subsidiaries of our Company) in the past three years immediately preceding
the date of this prospectus.
Mr. Royce Lee is not related to any other Directors, senior management, substantial or
Controlling Shareholders of the Company.
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Save as disclosed herein, there are no other matters in relation to Mr. Royce Lee which
are required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
Ms. FAN Man Seung, Vanessaઽྱ, aged 60, is an executive Director. She has
first been involved in the management of our Group in June 1999. Ms. Fan was appointed as
a Director on 22 March 2021. She is a Chairperson of the Corporate Governance Committee
of the Company. During the Track Record Period, Ms. Fan was not involved in the daily
operation of our Group, but was participating in the business of our Group on a supervisory
level and overseeing the strategic growth of our Group.
Ms. Fan was admitted as a lawyer in Hong Kong in August 1988 and a fellow of the
Association of Chartered Certified Accountants since September 2007. She also holds a
Degree of Master of Business Administration awarded by the Asia International Open
University (Macau) in May 1995. Besides having over 34 years of experience in corporate
management, she possesses diversified experience in media and publication, property
investment and development, hotel and hospitality, watch and jewellery retailing, financial
and securities operations, wholesaling and retailing of furniture, artiste management,
entertainment production and investment as well as cinema development and operation. She
is also the managing director of Emperor International Holdings Limited (stock code: 163),
an executive director of Emperor Entertainment Hotel Limited (stock code: 296), Emperor
Watch & Jewellery Limited (stock code: 887), Emperor Culture Group Limited (stock code:
491), Ulferts International Limited (stock code: 1711) and Emperor Capital Group Limited
(stock code: 717), all of which are listed on the Main Board.
In November 2001, the SFC publicly reprimanded Ms. Fan, a former responsible
officer of Emperor Securities, impugning Ms. Fan’s fitness and properness for failing to (i)
make sufficient inquiry in respect of the independence of prospective subscribers of shares
in the initial public offering of a company listed in July 1998; and (ii) provide the SFC with
detailed and accurate information during its investigation into an initial public offering. In
SFC’s decision, the SFC acknowledged Ms. Fan’s previous clear record and her commitment
to ensure the failings identified are not repeated. Save as disclosed herein, the SFC has not
made any other public reprimand against Ms. Fan.
A civil action was commenced in August 2005 against various defendants including
Ms. Fan, who was a former director of the two defendant companies. The plaintiff alleged
wrongful termination of a sub-licence agreement by one of the defendant companies and
civil conspiracy amongst the directors of the defendant companies in respect of the
termination of the sub-licence agreement. The defendants filed defence in 2005 and the
action has remained dormant since December 2005.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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Ms. Fan was a director ofʮ̡ (Emperor UA Cinemas
(Guangdong) Company Limited), (“PRC Company”), a company established under the PRC
laws and an indirect non-wholly owned subsidiary of Emperor Culture, from 6 November
2020 to 26 August 2022. The immediate sole shareholder and intermediate shareholders of
the PRC Company resolved on 21 November 2022 to cease the entire operation of the PRC
Company, and upon the PRC Company’s voluntary liquidation application filed on 14 March
2023, an order was made by the PRC Court on 25 April 2023 accepting the application on
the ground that the PRC Company was insolvent. The PRC Company was primarily engaged
in cinema operation in the PRC. Ms. Fan confirmed that she was not a party to the
liquidation application and is not aware of any actual or potential claim that has been or will
be made against her because of such liquidation.
Save as disclosed above, Ms. Fan has not held any directorship in other public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years, nor does she hold any other positions with the Company and
other members of the Group (other than being director of certain subsidiaries of the
Company) in the past three years immediately preceding the date of this prospectus.
Our Directors (including the independent non-executive Directors but excluding Ms.
Fan herself) and the Joint Sponsors consider that Ms. Fan is suitable to act as a Director
pursuant to Rules 3.08 and 3.09 of the Listing Rules as she possesses the experience,
knowledge and skill as well as the character to be a director of the Company, after taking
into account the fact that the SFC’s reprimand against Ms. Fan and the civil action were
isolated incidents, which respectively happened about 20 years and 15 years ago and that the
civil litigation has been dormant ever since the defendants filed defence.
As at the Latest Practicable Date, Ms. Fan is interested in 10,500,000 shares
(representing about 0.29%) of Emperor International, which is an associated corporation of
the Company within the meaning of Part XV of the SFO.
Ms. Fan is not related to any other directors, senior management, substantial or
Controlling Shareholders of the Company.
Save as disclosed herein, there are no other matters in relation to Ms. Fan which are
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
Independent Non-executive Directors
Ms. CHENG Ka Yu
ቍྗ༃, aged 50, was appointed as an independent non-executive
Director on 26 June 2023. She is the Chairperson of the Nomination Committee of the
Company.
Ms. Cheng was admitted as a solicitor in Hong Kong in July 1998 and was admitted as
a solicitor in England and Wales in December 2000. She holds a Bachelor of Laws Degree
awarded by The University of Hong Kong in November 1995. Ms. Cheng joined P . C. Woo
& Co, a solicitors firm, and became a partner of the said firm since February 2008 up till
now.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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Ms. Cheng was an independent non-executive director of Emperor International
Holdings Limited (stock code: 163) from August 2012 to August 2021, the shares of which
are listed on the Stock Exchange.
Save as disclosed herein, Ms. Cheng has not held any directorship in other public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years, nor does she hold any other positions with our Company
and other members of our Group in the past three years immediately preceding the date of
this prospectus.
Ms. Cheng is not related to any other Directors, senior management, substantial or
Controlling Shareholders of the Company.
Save as disclosed herein, there are no other matters in relation to Ms. Cheng which are
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
Mr. MAK Kam Chiu
௥ᎀ১, aged 47, was appointed as an independent
non-executive Director on 26 June 2023. He is the Chairman of the Audit Committee of the
Company.
Mr. Mak holds a Bachelor of Business Administration in Accountancy awarded by the
City University of Hong Kong in November 1999. He also holds a Degree of Master of
Business Administration awarded by the Chinese University of Hong Kong in December
2005. Mr. Mak is a fellow of the Association of Chartered Certified Accountants in Hong
Kong since March 2009 and a fellow of the Hong Kong Institute of Certified Public
Accountants since July 2010. Mr. Mak has over 20 years of experience in financial
management and internal audit. Mr. Mak has served as finance director and/or held
management positions with various multinational corporations engaging in retailing and/or
food and beverage industry. Currently, he is the finance director of Skechers Hong Kong
Limited.
Mr. Mak has not held any directorship in other public companies, the securities of
which are listed on any securities market in Hong Kong or overseas in the last three years,
nor does he hold any other positions with our Company and other members of our Group in
the past three years immediately preceding the date of this prospectus.
Mr. Mak is not related to any other Directors, senior management, substantial or
Controlling Shareholders of the Company.
Save as disclosed herein, there are no other matters in relation to Mr. Mak which are
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
Mr. NIU Zhongjie
ˬᒤ᭘, aged 55, was appointed as an independent non-executive
Director on 26 June 2023. He is the Chairman of the Remuneration Committee of the
Company.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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Mr. Niu holds a Bachelor of Arts in Business Administration awarded by Northeast
Missouri State University, Missouri USA in May 1994. He also holds a Degree of Master of
Business Administration awarded by The University of Hong Kong in December 1999. Mr.
Niu has worked with various financial institutions and has extensive experience in equity
capital markets. He is currently the responsible officer for type 4 (advising on securities)
and type 9 (asset management) regulated activities of Vision Finance Asset Management
Limited. He is also a director of Vision Finance International Company Limited and the
responsible officer of the company to carry on type 1 (dealing in securities) and type 6
(advising on corporate finance) regulated activities.
He is currently an independent non-executive director of Nanjing Sample Technology
Company Limited (stock code: 1708) and Peiport Holdings Limited (stock code: 2885), the
shares of which are listed on the Main Board. He was an executive director of Beijing
Sports and Entertainment Industry Group Limited, the shares of which are listed on the Main
Board (stock code: 1803) between 23 April 2015 to 7 November 2018.
Mr. Niu was an independent non-executive director of Gold-Finance Holdings Limited
(“Gold-Finance ”) between 3 February 2016 and 15 May 2019. Gold-Finance was a
Company listed on the Main Board (stock code: 1462) but the trading of Gold-Finance’s
securities on the Stock Exchange was suspended on 5 May 2019 and it was eventually
delisted on 16 March 2021. As disclosed in the announcements made by Gold-Finance prior
to its delisting, a winding-up petition was filed against Gold-Finance on 3 June 2019 in the
High Court of Hong Kong and provisional liquidators were appointed in respect of
Gold-Finance on 5 June 2019 as a result of a winding-up petition filed against
Gold-Finance’s controlling shareholder in April 2019, which falls within 12 months after Mr.
Niu’s ceasing to act as its independent non-executive director. Based on public information,
Gold-Finance was an investment holding company incorporated in the Cayman Islands as an
exempted company with limited liability, and its principal activities were investment and
asset management services in the PRC, property investment and development in the PRC
and building services in Hong Kong.
Save as disclosed herein, Mr. Niu has not held any directorship in other public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years, nor does he hold any other positions with our Company and
other members of our Group in the past three years immediately preceding the date of this
prospectus.
Mr. Niu is not related to any other Directors, senior management, substantial or
Controlling Shareholders of the Company.
Save as disclosed herein, there are no other matters in relation to Mr. Niu which are
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
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SENIOR MANAGEMENT
The following table sets forth certain information concerning our Group’s senior
management:
Name Age Position
Date of
joining our
Group Main duties
Relationship with
Directors or other
senior
management
CHEUNG Wai Y u
ੵᅆন
48 Chief Operating
Officer
5 October
2018
Responsible for
overseeing and guiding
the day-to-day
operations of our
Group
N/A
Y eung Man Leung
เ͏ᆃ
47 Chief Information
Officer
23 July
2018
Responsible for
managing the technical
team and project
management team of
our Group for
delivering new digital
experience in house
and to our consumers
to help boosting
operational efficiency
and business growth
N/A
Ms. CHEUNG Wai Yu ੵᅆন, aged 48, is the Chief Operating Officer of our Group.
Ms. Cheung joined our Group on 5 October 2018. She is responsible for overseeing and
guiding the day-to-day operations of our Group, and presides over the revenue and sales
growth, expenses, costs and margin control, and monthly, quarterly and annual financial goal
management of our Group.
Ms. Cheung holds a Bachelor of Business Administration awarded by the Chinese
University of Hong Kong in 1997. She has over 18 years of experience in overseeing
finance and operation of media companies. Prior to joining our Group, Ms. Cheung has been
the commercial director of GroupM (Shanghai) Advertising Co., Ltd from March 2011 to
October 2017. Before that she was director of finance and operations of Razorfish
Consulting (Shanghai) Co., Limited from November 2008 to February 2011 and finance and
human resources manager of e-Crusade Marketing Co. Limited from 2005 to 2008.
Mr. YEUNG Man Leung
เ͏ᆃ, aged 47, is the Chief Information Officer of our
Group. Mr. Y eung joined our Group on 23 July 2018. He is responsible for driving
digitalisation in the Group from in-house operation to users’ digital experience through
leading the technical and project team.
Mr. Y eung holds a Bachelor of Engineering in Computer Science awarded by The Hong
Kong University of Science and Technology in 1998. After graduation, Mr. Y eung joined
Hong Kong Telecommunications Limited as a software engineer in 1998. Mr. Y eung was
then employed as a system engineer by netalone.com Limited in January 2000 and then by
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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iASPEC Services Limited from March to July 2001. Mr. Y eung was a web developer, project
manager and team lead of technical team of e-Crusade Marketing Co. Limited from 2003 to
2009 and then Tech Team Lead and business director of Razorfish Consulting (Shanghai)
Co., Limited from 2009 to 2014, and after that he has been setting his hand in start-up
projects regarding mobile application development, operation and marketing.
COMPANY SECRETARY
Ms. Liu Suet Ying
is appointed as the company secretary of the Company by
the Board on 30 September 2022. She is also the company secretary of Emperor Culture
Group Limited (Stock Code: 491). Ms. Liu is an associate member of both The Chartered
Governance Institute in the United Kingdom and The Hong Kong Chartered Governance
Institute.
EMPLOYEES
As of the Latest Practicable Date, our Group has a total of 236 full-time employees.
The following table sets forth a breakdown of our employees by functions as of such date:
Functions
Number of
employees
Management 11
Content and production 86
Sales and, account servicing and project delivery 55
Platform specialists 17
Product specialists 5
IT development and project management 21
Administrative and supporting 37
Trainees 4
236
During the Track Record Period, our Group has not experienced any significant
problems with our employees or disruption to our operations due to labour disputes, nor
have we experienced any difficulties in the recruitment and retention of experienced staff.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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CORPORATE GOVERNANCE CODE
Our Company will comply with the Corporate Governance Code as set out in Appendix
14 of the Listing Rules in accordance with the applicable Listing Rules.
BOARD COMMITTEES
Audit Committee
Our Company has established its Audit Committee on 26 June 2023 with written terms
of reference in compliance with the Corporate Governance Code as set out in Appendix 14
of the Listing Rules. The Audit Committee is primarily responsible for making
recommendations to the Board on the appointment and removal of the external auditor, to
approve the remuneration and terms of engagement of external auditor, review financial
information and oversight of the financial reporting system and internal control procedures.
The Audit Committee has three members comprising all the independent non-executive
Directors of the Company, namely Ms. Cheng Ka Y u, Mr. Mak Kam Chiu and Mr. Niu
Zhongjie. Mr. Mak Kam Chiu is the chairman of the Audit Committee.
Remuneration Committee
The Company established a Remuneration Committee on 26 June 2023 with written
terms of reference in compliance with the Corporate Governance Code as set out in
Appendix 14 of the Listing Rules. The primary duties of the Remuneration Committee are
making recommendation to the Board on the Company’s policy and structure for the
remuneration of directors and senior management, reviewing and making recommendations
to the Board on the directors’ fee and remuneration packages of directors. The remuneration
committee has three members comprising two independent non-executive Directors and an
executive Director, namely Mr. Niu Zhongjie, Mr. Mak Kam Chiu and Mr. Wong Chi Fai.
Mr. Niu Zhongjie is the chairman of the Remuneration Committee.
Nomination Committee
The Company established a Nomination Committee on 26 June 2023 with written terms
of reference in compliance with the Corporate Governance Code as set out in Appendix 14
of the Listing Rules. The primary duties of the Nomination Committee include identifying
potential candidates for directorship, reviewing the nomination of directors, assessing the
independence of independent non-executive directors and making recommendations to the
Board on such appointments. The Nomination Committee has three members comprising two
independent non-executive Directors and an executive Director, namely Ms. Cheng Ka Y u,
Mr. Niu Zhongjie and Ms. Fan Man Seung, V anessa. Ms. Cheng Ka Y u is the chairperson of
the Nomination Committee.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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Corporate Governance Committee
The Company established a Corporate Governance Committee on 26 June 2023 with
written terms of reference. The major responsibilities of Corporate Governance Committee
include reviewing the corporate governance practice and disclosure systems of the Company
and introducing relevant principles concerning corporate governance so as to enhance the
standard of corporate governance of the Company. The Corporate Governance Committee
has five members comprising an executive Director of the Company, namely Ms. Fan Man
Seung, V anessa, two independent non-executive Directors, namely Mr. Mak Kam Chiu and
Ms. Cheng Ka Y u, a representative from company secretarial function and a representative
from finance and accounts function. Ms. Fan Man Seung, V anessa is the chairperson of the
Corporate Governance Committee.
BOARD DIVERSITY POLICY
We have adopted our board diversity policy which aims to achieve diversity on our
Board in the broadest sense in order to have a balance of skills, experience and diversity of
perspectives to the business nature of our Company. Selection of candidates on our Board is
based on a range of diversity perspectives, including but not limited to gender, age, cultural
and educational background, professional experience, skills, knowledge and length of
service. Our Nomination Committee will also assess the merits and contribution of any
Director proposed for re-election or any candidate nominated to be appointed as Director
that will bring to the Board against the objective criteria, with due regard for the benefits of
diversity on our Board that would complement our Company’s corporate strategy.
Upon Listing, two out of our six Directors are female. Our Directors obtained
professional and academic qualifications including law, business administration, accounting
and finance. We are of the view that our Board has a balance mix of gender, experience and
perspectives, and satisfies our board diversity policy. Our Board and our Nomination
Committee shall assess the composition of our Board regularly.
COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Directors (save for Mr. Wong and Ms. Fan during the Track Record Period as
mentioned below) and senior management received compensation in the form of salaries and
bonuses based on the performance of the individual and our Group. We also reimburse them
for expenses which are necessarily and reasonably incurred for providing services to our
Group or executing their functions in relation to our operations. We regularly review and
determine the remuneration and compensation packages of our Directors and senior
management.
As disclosed above, during the Track Record Period, Ms. Fan and Mr. Wong were not
involved in the daily operation of our Group, and were participating in the business of our
Group on a supervisory level and overseeing the strategic growth of our Group. In view that
they were not engaged in the day-to-day operation of our Group during the Track Record
Period and that there has been no deliberation by the Board on revamp of the strategies or
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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--- page 211 ---
other corporate matters of our Group during the Track Record Period which entailed
substantial time spent by them, no remuneration were paid to them during the Track Record
Period.
Mr. Royce Lee, the Chief Executive Officer of our Group, has entered into an
employment contract with a subsidiary of the Company. Under the terms of the employment
contract during the Track Record Period, Mr. Royce Lee was entitled to a basic salary of
HK$176,000.00 per month, as well as (for the year 2020) performance related incentive
bonus based on specific percentage of the net profit of the Group, subject to the Company’s
review from time to time and (from 2021 onwards) discretionary bonus to be determined by
the Company from time to time at its sole discretion and may be based on factors such as
overall performance of the Group, the individual performance of Mr. Royce Lee and such
other factors as the Company considers appropriate. The discretionary bonus of Mr. Royce
Lee for the financial year ended 31 December 2021 amounted to approximately HK$4.6
million, which was determined by the Company based on the unaudited net profit before tax
(before taking into account any bonus payable to Mr. Royce Lee for the year) of the Group
for the financial year ended 31 December 2021, adjusted by adding the Listing expenses
incurred and taking into account provision for tax, and applying a flat rate of 10% thereto.
Mr. Royce Lee confirmed that he and any entity in which he has interests have not (a)
received any remuneration, compensation or benefits in kind or economic benefits (other
than those received from the Group) from; or (b) entered into any side agreement or
arrangement (other than the employment contract with the Group, those agreements relating
to his acquisition of 30% interests in the Group from NMG Investment in December 2017,
and the current shareholdings interests in Investco and hence the indirect interest in FeedMe
Limited, and the agreement related thereto) with, the Controlling Shareholders or their
associates.
The remunerations (including fees, salaries, contributions to pensions, bonuses and
other allowances) of Directors for the years ended 31 December 2020, 2021 and 2022 were
approximately HK$2.1 million, HK$6.7 million and HK$2.1 million respectively, which
fluctuation was due to no performance related bonus to Mr. Royce Lee for the financial
years ended 31 December 2020 and 2022.
Pursuant to the service agreements entered into between our Company and our
executive Directors (which are for an initial term of three years commencing from the
Listing Date), each executive Director is entitled to a fixed annual fee of HK$150,000 for
his/her service in the office of executive Director. It was not expected that Mr. Wong and
Ms. Fan will receive any renumeration (whether in form of cash or otherwise) in addition to
such fixed Directors’ fee of HK$150,000 per annum after Listing, as it is not anticipated that
there will be a substantial change in their role after Listing. Pursuant to the letters of
appointment entered into between our Company and the independent non-executive Directors
(which are for an initial term of three years commencing from the Listing Date), each
independent non-executive Director is entitled to a fixed annual fee of HK$180,000.
After Listing, our Remuneration Committee will review and determine the
remuneration and compensation packages of our Directors and senior management with
reference to salaries paid by comparable companies, time commitment and responsibilities of
the relevant Directors and senior management and performance of our Group.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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--- page 212 ---
No remuneration was paid to our Directors or the five highest paid individuals as an
inducement to join, or upon joining, our Group. During the Track Record Period, no
compensation was paid to, or has been received by, our Directors, former Directors or the
five highest paid individuals for the loss of office as director of any member of our Group
or of any other office in connection with the management of the affairs of any member of
our Group. None of our Directors waived any emoluments during the Track Record Period.
SHARE OPTION SCHEME
We have conditionally adopted the Share Option Scheme, the purpose of which is to
provide incentives to the relevant participants to contribute to our Group and to enable our
Group to recruit high-calibre employees and attract human resources that are valuable to our
Group. The principal terms of such scheme are summarised in the paragraph headed “Share
Option Scheme” in Appendix IV to this prospectus.
COMPLIANCE ADVISER
We have appointed Lego Corporate Finance Limited, one of our Joint Sponsors, as our
compliance adviser pursuant to Rule 3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of
the Listing Rules, the compliance adviser will advise us in the following circumstances:
(a) before the publication of any regulatory announcement, circular or financial
report;
(b) where a transaction, which might be a notifiable or connected transaction, is
contemplated including Share issues and Share repurchases;
(c) where the Company proposes to use the proceeds of the Share Offer in a manner
different from that detailed in this prospectus or where the business activities,
developments or results of our Company deviate from any forecast, estimate, or
other information in this prospectus; and
(d) where the Stock Exchange makes an inquiry of us under Rule 13.10 of the Listing
Rules.
In addition, the compliance adviser will also provide, inter alia, the following services
to us:
(a) if required by the Stock Exchange, deal with the Stock Exchange in respect of
any or all matters listed in paragraphs (a) to (d) above;
(b) provide guidance and assistance with due care and skill to the Company on
continuing compliance with the Company’s obligations under the Listing Rules,
the Hong Kong Codes on Takeovers and Mergers and Share Buy backs as
amended from time to time and all other applicable laws, rules, codes and
guidelines; and
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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(c) assess the understanding of all new appointees to the Board regarding the nature
of their responsibilities and fiduciary duties as a Director of the Company, and, to
the extent the compliance adviser forms an opinion that the new appointees’
understanding is inadequate, discuss the inadequacies with the Board and make
recommendations to the Board regarding appropriate remedial steps, such as
training.
The terms of the appointment shall commence on the Listing Date and end on the date
on which our Company distributes the annual report of our financial results for the first full
financial year commencing after the Listing Date and such appointment may be subject to
extension by mutual agreement.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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SHARE CAPITAL
The following is a description of the authorised share capital of our Company as of the
Latest Practicable Date and the issued share capital of our Company in issue and to be
issued as fully paid or credited as fully paid immediately following the completion of the
Capitalisation Issue and the Share Offer:
Authorised share capital
HK$
1,000,000,000 Shares of HK$0.01 each 10,000,000
Issued and to be issued, fully paid or credited as fully paid upon completion of the
Capitalisation Issue and the Share Offer
HK$
20,000 Shares in issue as at the Latest Practicable Date 200
449,980,000 Shares to be issued under the Capitalisation Issue 4,499,800
150,000,000 Shares to be issued pursuant to the Share Offer 1,500,000
600,000,000 Total 6,000,000
Assumptions
The above table assumes that the Capitalisation Issue and the Share Offer become
unconditional and the issue of Offer Shares and the Shares to be issued under the
Capitalisation Issue pursuant thereto is made as described herein. It does not take into
account: (i) any Shares which may be allotted and issued pursuant to the exercise of any
options which may be granted under the Share Option Scheme; (ii) any Shares which may
be allotted and issued pursuant to the general mandate as mentioned in “General Mandate to
Issue New Shares” in this section below; or (iii) any Shares which may be repurchased by
our Company pursuant to the repurchase mandate as mentioned in “General Mandate to
Repurchase Shares” in this section below.
MINIMUM PUBLIC FLOAT
Pursuant to Rule 8.08(1)(a) of the Listing Rules, at least 25% of the issued Shares of
our Company must at all times be held by the public. We must therefore maintain the
minimum public float of 25% of our Company’s issued Shares in the hands of the public
upon Listing and at all times thereafter.
SHARE CAPITAL
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RANKING
The Offer Shares will rank pari passu in all respects with all Shares in issue on the
date of allotment and issue of such Shares, and will qualify for all dividends or other
distributions declared, made or paid on the Shares after allotment and issue save for
entitlement under the Capitalisation Issue.
SHARE OPTION SCHEME
The Company has conditionally adopted the Share Option Scheme. A summary of the
principal terms of the Share Option Scheme is set out in the paragraph headed “Share
Option Scheme” in Appendix IV to this prospectus.
GENERAL MANDATE TO ISSUE NEW SHARES
The Directors have been conditionally granted the Issue Mandate being a general
unconditional mandate to allot, issue and deal with Shares with a total number of Shares that
is not more than the sum of:
1. 20% of the total number of Shares in issue immediately following completion of
the Capitalisation Issue and the Share Offer; and
2. the total number of Shares repurchased by the Company (if any) pursuant to the
Repurchase Mandate (as referred to below).
The Directors may, in addition to Shares which they are authorised to issue under the
Issue Mandate, allot, issue or deal with Shares under a rights issue, scrip dividend scheme
or similar arrangement providing for the allotment and issue of Shares in lieu of dividend in
accordance with the Articles of Association, or on the exercise of options which may be
granted under the Share Option Scheme.
This Issue Mandate will expire upon the earliest occurrence of any of the following:
– at the conclusion of the Company’s next annual general meeting; or
– at the expiry of the period within which the Company is required by its Articles
of Association, the Cayman Companies Act or any other applicable laws to hold
its next annual general meeting; or
– when varied or revoked by an ordinary resolution of the Company’s shareholders
in general meeting.
For further details of this Issue Mandate, please refer to the paragraph headed “Written
resolutions of the Shareholders passed on 26 June 2023” in Appendix IV to this prospectus.
SHARE CAPITAL
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GENERAL MANDATE TO REPURCHASE SHARES
The Directors have been conditionally granted the Repurchase Mandate being a general
unconditional mandate to exercise all the powers of the Company to repurchase Shares with
a total number of Shares not more than 10% of the total number of Shares in issue
immediately following completion of the Capitalisation Issue and the Share Offer.
This Repurchase Mandate only relates to repurchases made on the Stock Exchange, or
any other stock exchange on which the Shares are listed (and which is recognised by the
SFC and the Stock Exchange for this purpose), and which are in accordance with the Listing
Rules. The information required by the Listing Rules concerning the Repurchase Mandate is
set out in the paragraph headed “Repurchases of our own securities” in Appendix IV to this
prospectus.
This Repurchase Mandate will expire upon the earliest occurrence of any of the
following:
– at the conclusion of our Company’s next annual general meeting; or
– at the expiry of the period within which our Company is required by its Articles
of Association, the Cayman Companies Act or any other applicable laws to hold
its next annual general meeting; or
– when varied or revoked by an ordinary resolution of the Company’s shareholders
in general meeting.
For further details of this Repurchase Mandate, please see the paragraph headed
“Written resolutions of the Shareholders passed on 26 June 2023” in Appendix IV to this
prospectus.
CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING
ARE REQUIRED
Our Company has only one class of Shares, namely ordinary shares, each of which
carries the same rights as the other Shares.
As a matter of the Cayman Companies Act, an exempted company is not required by
law to hold any general meeting or class meeting. The holding of general meeting or class
meeting is prescribed under the articles of association of a company. Accordingly, our
Company will hold general meetings as prescribed under the Articles, a summary of which
is set out in “Summary of the Constitution of the Company and Cayman Islands Company
Law” in Appendix III to this prospectus.
SHARE CAPITAL
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CONTROLLING AND SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, immediately following the completion of the Share
Offer and the Capitalisation Issue (without taking into account any Shares that may be
issued pursuant to the exercise of any options that may be granted under the Share Option
Scheme), the following persons will have or be deemed or taken to have an interest and/or
short position in the Shares or the underlying Shares which would fall to be disclosed to our
Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or are directly
and/or indirectly interested in 10% or more of the nominal value of any class of share
capital carrying rights to vote in all circumstances at general meetings of our Company:
Name
Capacity/
Nature of Interest
Number of
Shares held as
at the Latest
Practicable Date
Approximate
percentage of
shareholding
interest as at
the Latest
Practicable Date
(%)
Number of
Shares or
Underlying
Shares
interested after
completion of
the Share Offer
and the
Capitalisation
Issue (Note 1)
Approximate
percentage of
shareholding
interest after
completion of
the Share Offer
and the
Capitalisation
Issue (%)
NMLG Holdings Legal/beneficial owner 14,000 70 315,000,000 (L) 52.5
AY Holdings Interest in controlled
corporation (Note 2)
14,000 70 315,000,000 (L) 52.5
First Trust
Services AG
Trustee (Note 3) 14,000 70 315,000,000 (L) 52.5
Dr. Albert Y eung Founder of a
discretionary trust
(Note 3)
14,000 70 315,000,000 (L) 52.5
Ms. Luk Siu Man,
Semon
Interest of spouse
(Note 4)
14,000 70 315,000,000 (L) 52.5
Double Blossoms Legal/beneficial owner 4,000 20 90,000,000 (L) 15
Mr. Royce Lee Interest in controlled
corporation (Note 5)
4,000 20 90,000,000 (L) 15
Double Fantastic Legal/beneficial owner 2,000 10 45,000,000 (L) 7.5
Ms. V enus Lee Interest in controlled
corporation (Note 6)
2,000 10 45,000,000 (L) 7.5
Mr. Y au Yi Ping Interest of spouse (note
7)
2,000 10 45,000,000 (L) 7.5
Notes:
1 The letter “L” denotes long position in the Shares.
2 The entire issued share capital of NMLG Holdings is held by AY Holdings, which in turn is held by
First Trust Services AG as trustee of AY Discretionary Trust. AY Holdings is deemed to be interested
in the same 315,000,000 Shares held by NMLG Holdings.
CONTROLLING AND SUBSTANTIAL SHAREHOLDERS
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3 First Trust Services AG is the trustee and Dr. Albert Y eung is the founder and settlor of the AY
Discretionary Trust respectively. By virtue of the SFO, each of First Trust Services AG and Dr.
Albert Y eung is deemed to be interested in the same 315,000,000 Shares held by NMLG Holdings.
4 Ms. Luk Siu Man, Semon is deemed to be interested in the same 315,000,000 Shares held by NMLG
Holdings by virtue of the deemed interest held by her spouse, Dr. Albert Y eung.
5 Mr. Royce Lee legally and beneficially owns the entire issued share capital of Double Blossoms. Mr.
Royce Lee is deemed to be interested in the same 90,000,000 Shares held by Double Blossoms.
6 Ms. V enus Lee legally and beneficially owns the entire issued share capital of Double Fantastic. Ms.
V enus Lee is deemed to be interested in the same 45,000,000 Shares held by Double Fantastic.
7 Mr. Y au Yi Ping is deemed to be interested in the same 45,000,000 Shares held by Double Fantastic
by virtue of the deemed interest held by his spouse, Ms. V enus Lee.
Except as disclosed above, the Directors are not aware of any person who will,
immediately following the allotment and issue of the Offer Shares and the Capitalisation
Issue (without taking into account any Shares that may be issued pursuant to the exercise of
any options that may be granted under the Share Option Scheme), have an interest or short
position in the Shares or underlying Shares of our Company which would fall to be
disclosed pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who is,
directly or indirectly, interested in 10% or more of the nominal value of any class of share
capital carrying rights to vote in all circumstances at general meetings of our Company.
RESTRICTIONS ON DISPOSAL OF SHARES
Our Controlling Shareholders have, under Rule 10.07(1) of the Listing Rules,
undertaken to the Company and the Stock Exchange that they will not at any time:
(a) in the First Six-Month Period dispose of, nor enter into any agreement to dispose
of or otherwise create any options, rights, interests or encumbrances in respect of,
any of our Shares in respect of which they are shown by this prospectus to be the
beneficial owners; or
(b) in the Second Six-Month Period, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of their Shares referred to in (a) above if, immediately following
such disposal or upon the exercise or enforcement of such options, rights,
interests or encumbrances, our Controlling Shareholders would cease to be a
Controlling Shareholder of our Company.
Each of our Controlling Shareholders has further undertaken to our Company and the
Stock Exchange that during the First Six-Month Period and the Second Six-Month Period:
(a) if he/she/it pledges or charges any securities of our Company beneficially owned
by him/her/it in favour of an authorised institution, he/she/it shall immediately
give written notice to our Company of such pledge or charge together with the
number and class of securities so pledged or charged and the purpose for which
the pledge or charge is made; and
CONTROLLING AND SUBSTANTIAL SHAREHOLDERS
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(b) when he/she/it is aware of or receives indications, either verbal or written, from
the pledgee or chargee that any of such pledged or charged securities or interests
in the securities of our Company will be disposed of, he/she/it shall immediately
thereafter give written notice to our Company of such indications.
Our Company will inform the Stock Exchange immediately of the aforesaid pledges,
charges or the said indications in relation to our Controlling Shareholders and publish an
announcement thereof in accordance with the Listing Rules as soon as possible upon receipt
of the notification from any of our Controlling Shareholders.
Mr. Royce Lee and Double Blossoms, being substantial Shareholders as at the Latest
Practicable Date and immediately after completion of the Share Offer and the Capitalisation
Issue, have undertaken to the Company that they will not at any time:
(a) in the First Six-Month Period dispose of, nor enter into any agreement to dispose
of or otherwise create any options, rights, interests or encumbrances in respect of,
any of our Shares in respect of which they are shown by this prospectus to be the
beneficial owners; and
(b) during the First Six-Month Period:
(i) if he/it pledges or charges any securities of our Company beneficially owned
by him/it in favour of an authorised institution, he/it shall immediately give
written notice to our Company of such pledge or charge together with the
number and class of securities so pledged or charged and the purpose for
which the pledge or charge is made; and
(ii) when he/it is aware of or receives indications, either verbal or written, from
the pledgee or chargee that any of such pledged or charged securities or
interests in the securities of our Company will be disposed of, he/it shall
immediately thereafter give written notice to our Company of such
indications.
Ms. V enus Lee and Double Fantastic, being substantial Shareholders under the SFO as
at the Latest Practicable Date but whose interests in our Shares will be reduced to 7.5%
immediately following completion of the Share Offer and the Capitalisation Issue, have
given the Company the same undertakings as those given by Mr. Royce Lee and Double
Blossoms as set out in the above paragraph.
Further details of undertakings given by our Controlling Shareholders are set out under
the section headed “Underwriting” in this prospectus.
CONTROLLING AND SUBSTANTIAL SHAREHOLDERS
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CONTROLLING SHAREHOLDERS
Details of the shareholdings of our Controlling Shareholders are set forth in the section
headed “Controlling and Substantial Shareholders” above and the section headed “Further
Information about Directors and Substantial Shareholders” in Appendix IV to this
prospectus.
COMPETING INTEREST
Our Controlling Shareholders do not have any interest in a business apart from our
Group’s business which competes or is likely to compete, directly or indirectly, with our
Group’s business, and would require disclosure pursuant to Rule 8.10 of the Listing Rules.
In late March 2019, an investment holding company (the “ Investco ”), which was then
held as to 70% by AY Holdings and 30% by Double Blossoms and subsequently became
held as to 70% by AY Holdings, 20% by Double Blossoms and 10% by Double Fantastic,
invested into certain preference shares in FeedMe Limited (“ FeedMe ”) entitling Investco to
exercise approximately 21.7% of the voting rights of FeedMe. During the Track Record
Period, FeedMe engaged mainly in the business of providing food and beverage experience
to customers and operated an online reservation platform for booking of dining experiences
with its online contents primarily limited to tasting menus offered by restaurants. As such
the business model of our Group and that of FeedMe were very different and there was a
clear delineation between the business of our Group and that of FeedMe. Therefore, Investco
and FeedMe were not included as members of the Group but AY Holdings and Mr. Royce
Lee pursued the investment under the said structure due to the fact that (i) the principal
business activities of FeedMe were different to that of the Group; and (ii) it would be
expected that continuous investment was required to sustain and expand the then business of
FeedMe and such investment was not in line with the business strategies of the Group. So
far as our Directors are aware, FeedMe had only minimal operation in 2021 and 2022; and
FeedMe has ceased its business operation since 31 July 2022. Taking into account the
business nature and scale of operation of FeedMe before it ceased its business operation, our
Directors are of the view, and the Joint Sponsors concur, that the business of FeedMe was
not competing with the business of our Group. During the Track Record Period, our Group
has generated revenue from the provision of advertising services to FeedMe amounting to
approximately HK$438,000, nil and nil, and payment gateway service fee of approximately
HK$120,000, HK$174,000 and nil was charged by FeedMe to our Group, for the years
ended 31 December 2020, 2021 and 2022 respectively. Besides, our Group made a
prepayment of HK$600,000 to FeedMe during the year ended 31 December 2019 in respect
of certain project which was delayed due to the growing social unrest since mid 2019 and
was ultimately cancelled due to the outbreak of COVID-19 pandemic and the prepayment
was fully returned to the Group during the year ended 31 December 2021.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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DEED OF NON-COMPETITION
The DNC Covenantors have entered into the Deed of Non-Competition, pursuant to
which each of the DNC Covenantors has irrevocably and unconditionally undertaken to and
covenanted with our Company (for itself and for the benefit of the members of our Group)
that during the continuation of the Deed of Non-Competition each of the DNC Covenantors
shall not, and shall procure each of his/its close associates will not, whether on his/its own
account or in conjunction with or on behalf of any person, firm or company and whether
directly or indirectly, carry on a business which is, or be interested or involved or engaged
in or acquire or hold any rights or interest or otherwise, involved in (in each case whether
as a shareholder, partner, agent or otherwise and whether for profit, reward or otherwise)
any business which competes or is likely to compete directly or indirectly with the business
currently and from time to time engaged by our Group (including but not limited to
provision of advertising services and businesses ancillary to any of the foregoing) in Hong
Kong and any other country or jurisdiction to which our Group markets, sells, distributes,
supplies or otherwise provides such services and/or in which any member of our Group
carries on business mentioned above from time to time (the “ Restricted Business ”) except
for the holding of each DNC Covenantor and his/its close associates in aggregate of not
more than 5% shareholding interests in any listed company. Each of the DNC Covenantors
has represented and warranted to our Company that none of the DNC Covenantors nor his/
its close associates (other than any member of our Group) is currently interested, involved
or engaging, directly or indirectly, in (whether as a shareholder, partner, agent or otherwise
and whether for profit, reward or otherwise) any Restricted Business otherwise than through
our Group.
Pursuant to the Deed of Non-Competition, each of the DNC Covenantors has also
undertaken that if such DNC Covenantor and/or any of his/its close associates (other than
any member of our Group) is offered or becomes aware of any project or new business
opportunity (“ New Business Opportunity ”) that relates to the Restricted Business, whether
directly or indirectly, he/it shall (i) promptly in any event within seven (7) Business Days
notify our Company in writing of such opportunity and provide such information as is
reasonably required by our Company in order to enable our Company to come to an
informed assessment of such opportunity; and (ii) use his/its best endeavours to procure that
such opportunity is offered to our Company on terms no less favourable than the terms on
which such opportunity is offered to him/it and/or his/its close associates (other than any
member of our Group).
The Directors (including the independent non-executive Directors) will review the New
Business Opportunity and decide whether to invest in the New Business Opportunity. If our
Group has not given written notice of our desire to invest in such New Business Opportunity
or has given written notice giving up the New Business Opportunity within thirty (30) days
of receipt of notice from the relevant DNC Covenantor, such DNC Covenantor and/or his/its
close associates (other than any member of our Group) shall be permitted to invest in or
participate in the New Business Opportunity on his/its own accord.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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--- page 222 ---
In addition, each of the DNC Covenantors has also undertaken, upon Listing:
(i) to provide our Company and our Directors (including our independent
non-executive Directors) from time to time with all information necessary for the
annual review by our independent non-executive Directors with regard to
compliance of the terms of the Deed of Non-Competition and the enforcement of
the non-competition undertakings in the Deed of Non-Competition;
(ii) to allow our Directors (including our independent non-executive Directors), their
respective representatives and the auditors to have sufficient access (with
reasonable prior notice) to the records of the DNC Covenantor and his/its close
associates to ensure their compliance with the terms and conditions under the
Deed of Non-Competition; and
(iii) to abstain from voting at any general meeting of our Company for consideration
and approval of the matters referred to in the Deed of Non-Competition if there is
any actual or potential conflict of interests.
Further, each of the DNC Covenantors has undertaken that during the period in which
he/it and/or his/its close associates (other than any member of our Group), individually or
taken as a whole, remains as a Controlling Shareholder, or remains as a Director:
(i) he/it will not solicit or interfere with or enticing any existing or then existing
employee, customers or suppliers of our Group for employment by his/its own
business (excluding our Group); and
(ii) he/it will not, without the consent from our Company, make use of any
information pertaining to the business of our Group (other than those information
that has been published by our Company by way of announcements or public
disclosure) which may have come to his/its knowledge in his/its capacity as our
Controlling Shareholder for any purposes.
The Deed of Non-Competition will take effect upon Listing and shall:
(i) cease to bind the DNC Covenantors the day on which our Shares cease to be
listed on the Main Board; or
(ii) cease to bind the relevant DNC Covenantor the day on which the relevant DNC
Covenantor (a) is not a Director and (b) his/its close associates (other than any
member of our Group), individually or taken as a whole, cease to own, in
aggregate, 30% or more of the then issued share capital of our Company directly
or indirectly or cease to be deemed as controlling Shareholder or cease to have
power to control the Board or there is at least one other independent Shareholder
other than the relevant DNC Covenantor and his/its close associates (other than
any member of our Group) holding more Shares than the relevant DNC
Covenantor and his/its close associates (other than any member of our Group)
taken together.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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--- page 223 ---
In order to strengthen the corporate governance in respect of any existing and potential
conflict of interests between our Group and the DNC Covenantors, upon Listing:
(i) our Company shall disclose in the annual reports the compliance and enforcement
of the undertakings by the DNC Covenantors under the Deed of Non-Competition
and the appropriate action to be taken by our Company;
(ii) our Company shall disclose the details and basis of decisions on matters reviewed
by the independent non-executive Directors in relation to the compliance and
enforcement of the arrangement in respect of the New Business Opportunity in
our annual reports;
(iii) when any of the executive Directors become aware of potential conflict of
interests between our Group and the DNC Covenantors relating to the business of
our Group, such executive Directors shall alert our Board, including the
independent non-executive Directors, to review and evaluate the implications and
risk exposures of such event and the compliance of the Listing Rules and to take
any necessary actions;
(iv) in the event that any of our Directors and/or his/her close associates has material
interest in any matter to be deliberated by our Board in relation to compliance
and enforcement of the Deed of Non-Competition or other proposed transactions
in which such Director and/or his/her close associates have material interest, such
Director would, according to the Articles or the Listing Rules, be required to
declare his/her interests and, where required, abstain from participating in the
relevant board meeting and voting on the transaction and not count as quorum
where required; and
(v) where advice from independent professional, such as that from financial adviser,
is reasonably requested by our Directors (including our independent non-executive
Directors), the appointment of such independent professional will be made at our
Company’s expenses.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Prior to Listing, NMLG Holdings is the owner of 70% interests of the issued share
capital of our Company. NMLG Holdings is held by AY Holdings, which in turn is held by
First Trust Services AG acting as trustee of AY Discretionary Trust. Dr. Albert Y eung is the
settlor of AY Discretionary Trust and the eligible beneficiaries of AY Discretionary Trust are
family members of Dr. Albert Y eung. Upon Listing, the shareholding of NMLG Holdings in
the Company (being 315,000,000 Shares) shall represent 52.5% of the issued Shares of the
Company immediately following the allotment and issue of the Offer Shares and the
Capitalisation Issue. As such, AY Holdings and First Trust Services AG are Controlling
Shareholders of our Company deemed to be interested in 315,000,000 Shares upon Listing.
Having considered the following factors, we believe that our Group is capable of
carrying on its business independently of our Controlling Shareholders and their respective
close associates after the Share Offer.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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--- page 224 ---
Management Independence
Our Board consists of three executive Directors and three independent non-executive
Directors. Mr. Wong Chi Fai and Ms. Fan Man Seung, V anessa, two of our executive
Directors, have common directorships in both our Group and certain companies under the
Emperor Group. For information of Mr. Wong and Ms. Fan, please refer to the section
headed “Directors, Senior Management and Employees” in this prospectus.
Each of our Directors is aware of his/her fiduciary duties as a director of our Company
which require, among other things, that he/she acts for the benefit and in the best interests
of our Company and does not allow any conflict between his/her duties as a director of our
Company and his/her personal interest. In the event that there is a potential conflict of
interest in respect of any matters, the interested Director(s) shall abstain from voting at the
relevant board meetings of our Company in respect of such matters and shall not be counted
in the quorum.
Our day-to-day operation will be led by Mr. Royce Lee and our Group’s senior
management, who have the expertise in the industry with substantial experience and can
exercise judgments and decisions independently without being influenced by our Controlling
Shareholders.
Operational Independence
During the Track Record Period, some members of the Emperor Group have been our
clients and have engaged our services for their marketing campaigns. Services to these
companies only amounted to approximately HK$0.4 million, HK$0.2 million and HK$2.2
million during the financial years ended 31 December 2020, 2021 and 2022 respectively.
Our Group will continue to offer our services to such companies and do business with them
should they demand our services. Our Directors consider that our Group has no reliance on
the business from these companies.
Our Group leased offices from Winning Treasure, an indirect wholly-owned subsidiary
of Emperor International up to 21 April 2021, in relation to the operation of our business
during the Track Record Period. For details, please refer to the section headed “Connected
Transactions” in this prospectus. On 21 April 2021, Emperor International disposed of its
entire shareholding in Winning Treasure to an Independent Third Party and since then
Winning Treasure became an Independent Third Party.
Our Directors confirmed that none of the costs or expenses relating to our Group’s
operations during the Track Record Period were borne by related parties or connected
persons of our Group or any other third parties without being recharged to our Group.
Although we have engaged and will continue to engage EIML for providing back office
support services, including human resources, information technology support, legal advising
services and other administrative services to our Group, we have our own organisational
structure with independent operation and administrative departments and units, each with
specific areas of responsibilities and sufficient operating capacity in terms of capital,
operating assets and employees to operate our business independently.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
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--- page 225 ---
Financial Independence
We have sufficient working capital and banking facilities to operate our business
independently, and have adequate internal resources to support our daily operations and
expansion. Our net cash flows from operating activities was approximately HK$59.5 million
for the year ended 31 December 2022. As at the Latest Practicable Date, we have bank
facilities amounted to approximately HK$36.0 million, out of which approximately HK$28.0
million remained available for drawing.
We have established our own internal control and accounting systems, and independent
treasury function for cash receipts and payments. We have independent bank accounts and
business registrations as well as a sufficient number of accounting personnel.
During the Track Record Period, we had shareholder’s loans due to NMG Investment,
which have been fully repaid during the Track Record Period.
Having considered the above factors, our Directors are satisfied that our Group is able
to operate and to sustain without dependence on our Controlling Shareholders.
RELATIONSHIP WITH CONTROLLING SHAREHOLDERS
– 216 –


--- page 226 ---
OVERVIEW
We have entered into certain transactions with the Emperor Group in the ordinary and
usual course of business of our Group during the Track Record Period. Some of these
transactions have ceased and some of them are expected to continue, details of which are set
out below.
SUMMARY OF TRANSACTIONS WITH THE EMPEROR GROUP
The following table sets forth a summary of the transactions with the Emperor Group
during the Track Record Period:
Transactions Relevant Entities
Historical figures
For the year ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
A Non-recurring connected
transactions
1 Sponsor fee and overall
coordinator’s fee in connection
with the Listing
Emperor Corporate
Finance
– 932 281
Underwriting fee in connection
with the Listing
Emperor Securities – – –
Transactions Relevant Entities
Historical figures
For the year ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
B Exempted connected
transactions
2 The deed of undertaking in
relation to a term loan facility
AY Holdings – – –
Transactions Relevant Entities
Historical figures
For the year ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
C Exempted continuing connected
transactions
3 Reimbursement of administrative
expenses
EIML 770 1,793 1,330
4 Corporate finance advisory
services
Emperor Corporate
Finance
–––
5 Provision of advertising service various members of the
Emperor Group
380 248 2,206
6 Use of modelling services Emperor Entertainment
(Hong Kong) Limited
126 – 185
7 Use of advertising space Honour Fine Limited – – 110
CONNECTED TRANSACTIONS
– 217 –


--- page 227 ---
Transactions
Entities under the
Emperor Group
Historical figures
For the years ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
C Discontinued connected
transactions
1 Tenancy agreements for our
office in Kwun Tong
Winning Treasure 6,330 2,596 –
2 Licence agreements in relation to
certain areas in NMG Tower
Winning Treasure 707 222 –
The following sets out details of these transactions.
A. Non-recurring connected transactions
1. Sponsor fee, overall coordinator’s fee and underwriting fee in connection with
the Listing
Emperor Corporate Finance has been appointed as one of the Joint Sponsors for
the Listing pursuant to an engagement letter dated 23 February 2021 (as supplemented
by supplemental engagement letters dated 11 May 2022 and 30 March 2023). Emperor
Corporate Finance charges a total fee of HK$1.65 million under the engagement letter
and all expenses incurred by Emperor Corporate Finance in relation to the performance
of service thereunder shall be reimbursed by our Company. Up to the Latest Practicable
Date, fee paid to Emperor Corporate Finance amounted to HK$1.15 million and the
balance of the sponsor fee of HK$0.5 million shall be payable in accordance with the
terms of the engagement letter.
Emperor Corporate Finance has also been appointed as one of the Overall
Coordinators for the Listing pursuant to an engagement letter dated 8 March 2023.
Emperor Corporate Finance Limited will receive a fee for acting as one of the Overall
Coordinators equal to 0.5% of the aggregated Offer Price payable for the Offer Shares.
The maximum overall coordinator’s fee to be received by Emperor Corporate Finance
is estimated to be approximately HK$0.7 million, based on the Offer Price of HK$0.92
per Offer Share, being the highest of the range of the Offer Price of between HK$0.84
per Share and HK$0.92 per Share.
On 29 June 2023, our Company entered into the Underwriting Agreement with,
inter alia, Emperor Securities. Pursuant to the terms of the Underwriting Agreement,
the Underwriters (including Emperor Securities) will receive a commission equal to
3.5% of the aggregate Offer Price payable for the Offer Shares. The maximum
underwriting fee to be received by Emperor Securities is estimated to be approximately
HK$0.6 million, based on the Offer Price of HK$0.92 per Offer Share, being the
highest of the range of the Offer Price of between HK$0.84 per Share and HK$0.92
per Share and an underwriting commitment of not more than 19,990,000 Shares
pursuant to the terms of the Underwriting Agreement.
CONNECTED TRANSACTIONS
– 218 –


--- page 228 ---
Emperor Corporate Finance and Emperor Securities are indirect wholly-owned
subsidiaries of Emperor Capital Group, which was in turn owned as to approximately
42.72% by Emperor Capital Group Holdings Limited, a wholly-owned subsidiary of
Albert Y eung Capital Holdings Limited (“ AY Capital Holdings ”). AY Capital Holdings
was as at the Latest Practicable Date, in turn held by CDM Trust & Board Services AG
(“CDM Trust ”) in trust for a private discretionary trust set up by Dr. Albert Y eung.
Our Group has obtained quotations from other licensed corporations for provision
of services in connection with the Listing. The Board considers the sponsor fee, overall
coordinator’s fee and underwriting commission charged by Emperor Corporate Finance
and Emperor Securities are of normal commercial terms or better when compared with
fees charged by other providers of similar services. The Directors (including the
independent non-executive Directors) are of the view that the sponsor fee and overall
coordinator’s fee payable to Emperor Corporate Finance and underwriting commission
payable to Emperor Securities and the terms of the agreements are fair and reasonable
and are on normal commercial terms or better.
The above engagements of Emperor Corporate Finance and Underwriting
Agreement with Emperor Securities are one-off transactions in connection with the
Listing and not recurring thereafter.
B. Exempted connected transactions
2. The deed of undertaking in relation to a term loan facility
In November 2022, Media Publishing obtained a term loan facility (the “ Term
Loan Facility ”) from a bank with a facility limit of HK$6,000,000. The Term Loan
Facility is guaranteed by the Company for an unlimited amount. A deed of undertaking
was executed by AY Holdings (the “ Deed of Undertaking ”), pursuant to which AY
Holdings unconditionally and irrecoverably covenants and undertakes with the bank
that if the Company’s Shares are not listed on the Stock Exchange within eleven
months from 30 November 2022, i.e. on or before 31 October 2023, AY Holdings shall
immediately provide or cause to be provided to Media Publishing with sufficient
funding for repaying all outstanding indebtedness under the Term Loan Facility in full.
The Deed of Undertaking will therefore be of no further application upon Listing.
No consideration has been paid by us to AY Holdings for the Deed of
Undertaking and no counter guarantee, indemnity or security over the assets of our
Group has been given by our Group to AY Holdings in this connection.
The Directors, including the independent non-executive Directors, considered that
the Deed of Undertaking has been provided on normal commercial terms or better to
our Company, and since no counter guarantee, indemnity or security over the assets of
our Group have been granted in respect of the Deed of Undertaking, the above
transaction will be regarded as exempted connected transaction of our Group under
Rule 14A.90 of the Listing Rules, which would be exempt from the reporting,
announcement, circular, annual review and independent Shareholders’ approval
requirements.
CONNECTED TRANSACTIONS
– 219 –


--- page 229 ---
C. Exempted continuing connected transactions
3. Reimbursement of administrative expenses
Background:
EIML has been providing administrative and back office support services,
including human resources, information technology support, legal advisory services
and other administrative services to our Group. The costs of such services provided
by EIML were shared among other operations of Emperor Group. For the financial
years ended 31 December 2020, 2021 and 2022, the administrative and back office
support service fees paid by our Group to EIML amounted to approximately
HK$0.8 million, HK$1.8 million and HK$1.3 million respectively.
EIML is a wholly-owned subsidiary of Emperor International, which is
controlled by AY Holdings. Accordingly, EIML is a connected person of the
Company under the Listing Rules.
Reasons for the transaction:
The Directors consider the administrative and back office support services
provided to our Group by EIML enable our Group to cut down administration
costs and to operate at a cost-effective manner. Our Group will continue to engage
the administrative and back office support services including human resources,
information technology support, professional consultancy and legal advisory
services and other administrative services from EIML and such services will
constitute a continuing connected transaction under Rule 14A.31 of the Listing
Rules after Listing.
Pricing:
The administrative and back office support services to be shared by our
Group and other operations of the Emperor Group shall be based on actual cost
incurred, the actual usage of the services and utilisation of staff time in terms of
percentage by each individual operation (including our Group) to calculate the
portion of cost to be charged to us. As a result, the price for these administrative
and back office support service fees shall be charged on a cost basis. The costs to
be shared are mainly salaries, bonus, provident funds and other related expenses
of the staff providing the services and the relevant expenses incidental to the
provision of such services including telecommunication charges and repair and
maintenance expenses. In view that the cost of administrative and back office
support services is to be allocated to our Group on cost and actual usage basis,
the Directors, including the independent non-executive Directors, consider that the
terms of the administrative and back office services are fair and reasonable and on
normal commercial terms. The sharing of administrative and back office services
on a cost basis fall within the exemption under Rule 14A.73(8) of the Listing
Rules.
CONNECTED TRANSACTIONS
– 220 –


--- page 230 ---
4. Corporate finance advisory services
Background:
Our Company has engaged Emperor Corporate Finance as one of the Joint
Sponsors and one of the Overall Coordinators for the Listing. Upon Listing, our
Company will continue to engage Emperor Corporate Finance for the provision of
corporate finance advisory services on annual retainer basis and on project basis
from time to time. No similar cost was incurred during the Track Record Period.
Emperor Corporate Finance is a corporation licensed under the SFO to carry
out type 1 (dealing in securities) and type 6 (advising on corporate finance)
regulated activities. It is an indirect wholly-owned subsidiary of Emperor Capital
Group. AY Capital Holdings is the controlling shareholder of Emperor Capital
Group. AY Capital Holdings is in turn held by CDM Trust in trust for a private
discretionary trust set up by Dr. Albert Y eung. The ongoing provision of corporate
financial advisory services by Emperor Corporate Finance will constitute a
continuing connected transaction under Rule 14A.31 of the Listing Rules after
Listing.
Pricing:
The price for these corporate financial advisory services will be determined
with reference to the market price for such corporate finance advisory services in
the open market on an arm’s length basis. The annual retainer fee payable by our
Group to Emperor Corporate Finance shall be HK$20,000 per month and the fees
payable for projects shall be determined on a case by case basis on arms-length
negotiation with reference to the complexity of the transactions and time
requirement at time of the engagement. The fee payable for such services shall be
no less favourable to our Group than those offered by other financial advisors
who are Independent Third Parties. The Directors, including the independent
non-executive Directors, consider that the engagement of such services is in the
ordinary course of business of our Group after Listing and on normal commercial
terms that are fair and reasonable and is in the interests of our Company and the
Shareholders as a whole.
As the annual amount of fee payable by our Group to Emperor Corporate
Finance for such services for the financial years ending 31 December 2023, 31
December 2024 and 31 December 2025 (excluding the sponsor fee and
underwriting fee for the Listing) is expected to be less than 5% of the applicable
percentage ratios as defined in Rule 14.07 of the Listing Rules (other than the
profit ratio) and the total consideration is less than HK$3,000,000, the
engagement shall be exempt from reporting, announcement, annual review and
independent shareholders’ approval requirements under Chapter 14A of the Listing
Rules.
CONNECTED TRANSACTIONS
– 221 –


--- page 231 ---
5. Provision of advertising service
A number of connected persons, including the members of the Emperor Group,
have been clients of the Group for our diversified advertising products and services.
For each of the three years ended 31 December 2022, the aggregate amount received
by our Group for these services, including service fee and commission income, was
approximately HK$0.4 million, HK$0.2 million and HK$2.2 million respectively.
The prices for these advertising services have been determined by our Group and
these connected persons after arm’s length negotiation with reference to the market
prices and on such terms that are no more favourable to them than those applicable to
our clients who are Independent Third Parties.
The Directors, including the independent non-executive Directors, consider that
the provision of these advertising services is in the ordinary course of business of our
Group and on normal commercial terms that are fair and reasonable and is in the
interests of our Company and the Shareholders as a whole.
The Directors believe that these services may recur in the future. However, it
cannot be ascertained whether and when any connected persons will require any
advertising service from our Group and therefore it is difficult to ascertain a cap for
future financial years after Listing. Our Company will comply with relevant
requirements of the applicable Listing Rules after Listing as and when appropriate.
6. Use of modelling services
During the Track Record Period, Emperor Entertainment (Hong Kong) Limited
provided modelling services to the events and campaigns organised by our Group. For
each of the three years ended 31 December 2022, the expenses for modelling services
provided by Emperor Entertainment (Hong Kong) Limited amounted to approximately
HK$126,000, nil and HK$185,000 respectively.
Emperor Entertainment (Hong Kong) Limited is principally engaged in trading
and production of audio-visual products, licensing of musical works, provision of
management services to artistes, and concert management and organisation. It is
controlled by a private discretionary trust which was set up by Dr. Albert Y eung.
The service fee paid by our Group to Emperor Entertainment (Hong Kong)
Limited for these services were based on arm’s length negotiation and on such terms
that are no less favourable to our Group than those offered by Independent Third
Parties.
The Directors, including the independent non-executive Directors, consider that
the expenses for the modelling services provided by Emperor Entertainment (Hong
Kong) Limited to the Group is on normal commercial terms, fair and reasonable and in
the interests of the Company and the Shareholders as a whole.
CONNECTED TRANSACTIONS
– 222 –


--- page 232 ---
It is expected that the Group may continue to obtain modelling services from
Emperor Entertainment (Hong Kong) Limited following Listing. However, the annual
fee payable by our Group to it for such services for the financial years ending 31
December 2023, 31 December 2024 and 31 December 2025 is expected to be less than
5% of the applicable percentage ratios as defined in Rule 14.07 of the Listing Rules
(other than the profits ratio) and HK$3,000,000 in total, they shall be fully exempt
from reporting, announcement, annual review and independent Shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
7. Use of advertising space
During the year ended 31 December 2022, Honour Fine Limited, a wholly-owned
subsidiary of Emperor Capital Group, provided advertising space for a campaign
organised by our Group; the amount of licence fee paid by our Group to Honour Fine
Limited amounted to HK$110,000.
Honour Fine Limited manages a channel on a social digital media platform which
shares financial news with commentary, and live-stream interviews with guests.
The license fees paid by our Group to Honour Fine Limited for the advertising
space were based on arm’s length negotiation. Our Directors, including the independent
non-executive Directors, consider that the expenses for the advertising spaces provided
by Honour Fine Limited to our Group is on normal commercial terms, fair and
reasonable and in the interests of our Company and the Shareholders as a whole.
It is expected that our Group may continue to obtain advertising space from
Honour Fine Limited following Listing. However, the annual fee payable by our Group
to it for such space for the financial years ending 31 December 2023, 31 December
2024 and 31 December 2025 is expected to be less than 5% of the applicable
percentage ratios as defined in Rule 14.07 of the Listing Rules (other than the profits
ratio) and HK$3,000,000 in total, they shall be fully exempt from reporting,
announcement, annual review and independent Shareholders’ approval requirements
under Chapter 14A of the Listing Rules.
CONNECTED TRANSACTIONS
– 223 –


--- page 233 ---
C. Discontinued connected transactions
1. Tenancy agreements for the Premises
Background:
During the Track Record Period, our Group had the following tenancy
agreements with Winning Treasure, a wholly-owned subsidiary of Emperor
International during the two financial years ended 31 December 2020 and up to
21 April 2021, in relation to our Group’s office in Hong Kong:
Date of
Agreement
Tenant
(subsidiary
of the
Company) Location Term
Monthly
rental
Other
charges
payable to
landlord
(a) 10 April
2017
NMG
Publishing
Whole of 1st
Floor, 2nd
Floor, 6th Floor,
7th Floor, 8th
Floor and 9th
Floor, NMG
Tower (saleable
area:
approximately
46,294 square
feet)
from 1 April
2017 to 31
March 2020
with an
option to
renew for a
further term
of three
years
1st Y ear –
HK$750,000
2nd Y ear –
HK$920,000
3rd Y ear –
HK$1,080,000
(all
exclusive of
rates,
management
fees and all
other
outgoings)
management
fee and
air-conditioning
charges of
HK$173,037.20
per month
Note: The parties entered into a surrender agreement dated 31 December 2019 terminating
the above tenancy with effect from 31 August 2019 and entered into the tenancy
agreement dated 31 December 2019 described in (b) below.
Date of
Agreement
Tenant
(subsidiary
of the
Company) Location Term
Monthly
rental
Other
charges
payable to
landlord
(b) 31 December
2019
Media
Publishing
All that Portion
of 1st Floor,
Whole Floor of
2nd Floor, 6th
Floor, 7th Floor,
8th Floor and
9th Floor, NMG
Tower, (saleable
area:
approximately
46,294 square
feet)
from 1
September
2019 to 31
August 2022
HK$823,000
(exclusive of
management
fees and
air-conditioning
charges,
rates and all
other
outgoings)
with six
months’ rent
free period
during the
term
management
fee and
air-conditioning
charges of
HK$156,072.20
per month
Note: The parties entered into a surrender agreement dated 27 November 2020 terminating
this tenancy with effect from 31 May 2020 and entered into the tenancy agreement
described in (c) below.
CONNECTED TRANSACTIONS
– 224 –


--- page 234 ---
Date of
Agreement
Tenant
(subsidiary
of the
Company) Location Term
Monthly
rental
Other
charges
payable to
landlord
(c) 11
December
2020
Media
Publishing
All that Portion
of 1st Floor, 6th
Floor, 7th Floor,
8th Floor and 9th
Floor, NMG
Tower (saleable
area:
approximately
37,336 square
feet)
from 1 June
2020 to 31
August 2022
HK$649,000
(exclusive of
management
fees and
air-conditioning
charges,
rates and all
other
outgoings)
with four
months’ rent
free period
during the
term
management
fee and
air-conditioning
charges of
HK$123,070.20
per month
Note: Winning Treasure served notice of early termination dated 21 April 2021 terminating
the tenancies with effect from 31 January 2022.
2. Licence agreements in relation to certain areas in NMG Tower
Background:
During the Track Record Period, our Group had the following licence
agreements with Winning Treasure in relation to certain areas in NMG Tower:
Date of
Agreement
Licensee
(subsidiary of
the Company) Location Term
Monthly
rental
(a) nine Licence
Agreements all
dated 20 April
2017
NMG
Publishing
Car Parks Nos.
1 to 9, Ground
Floor, NMG
Tower
on monthly basis
commencing from 1
April 2017
HK$3,200 per
car park
(inclusive of
management
fee,
government
rent and rates)
Note: The licences for Car Parks Nos. 1, 4 to 5 and 8 to 9 were superseded by the Licence
Agreements all dated 4 June 2020 described in (b) below while the licences for Car
Parks Nos. 2 and 3 were superseded by the Licence Agreements all dated 5 June 2020
described in (c) below.
(b) five Licence
Agreements all
dated 4 June 2020
Media Publishing Car Parks
Nos. 1, 4 to
5a n d8t o9 ,
Ground
Floor, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$3,200
per car park
(inclusive of
management
fee,
government
rent and
rates)
Note: The licences have been terminated with effect from 31 May 2021.
CONNECTED TRANSACTIONS
– 225 –


--- page 235 ---
Date of
Agreement
Licensee
(subsidiary
of the
Company) Location Term Monthly rental
(c) two Licence
Agreements all
dated 5 June
2020
Media
Publishing
Car Parks Nos.2
and 3, Ground
Floor, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$3,200 per car
park (inclusive of
management fee,
government rent
and rates)
Note: The licences have been terminated with effect from 31 May 2021.
(d) 6 April 2017 NMG
Publishing
Area of CRAC
Units, Roof
Floor, NMG
Tower
from 1 April
2017 to 31
March 2020
HK$5,000
(inclusive of
management fee,
rates and
government rent but
exclusive of other
outgoings)
(e) 30 November
2020
Media
Publishing
Area of CRAC
Units, Roof
Floor, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$5,000
(inclusive of
management fee,
rates and
government rent but
exclusive of other
outgoings)
Note: Winning Treasure served notice of early termination dated 21 April 2021 terminating
the licence with effect from 31 January 2022.
(f) 6 April 2017 NMG
Publishing
Area of
Emergency
Generator, Roof
Floor, NMG
Tower
from 1 April
2017 to 31
March 2020
HK$1,000
(inclusive of
management fee,
rates and
government rent but
exclusive of other
outgoings)
(g) 30 November
2020
Media
Publishing
Area of
Emergency
Generator, Roof
Floor, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$1,000
(inclusive of
management fee,
rates and
government rent but
exclusive of other
outgoings)
Note: The licence has been terminated with effect from 21 April 2021.
(h) 10 April 2017 NMG
Publishing
Redemption
Centre with a
Storeroom,
Ground Floor,
NMG Tower
from 1 April
2017 to 31
March 2020
1st year –
HK$8,049.72
2nd year –
HK$9,996
3rd year –
HK$11,760
(all inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
CONNECTED TRANSACTIONS
– 226 –


--- page 236 ---
Date of
Agreement
Licensee
(subsidiary
of the
Company) Location Term Monthly rental
(i) 30 November
2020
Media
Publishing
Redemption
Centre with a
Storeroom,
Ground Floor,
NMG Tower
from 1 April
2020 to 31
August 2022
HK$8,991
(inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
Note: The licence was terminated with effect from 30 April 2021.
(j) 6 April 2017 NMG
Publishing
Signage No.1,
G/F, NMG
Tower
from 1 April
2017 to 31
March 2020
HK$2,000
(inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
(k) 30 November
2020
Media
Publishing
Signage No.1,
G/F, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$2,000
(inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
Note: The license was terminated with effect from 4 May 2021.
(l) 10 April 2017 NMG
Publishing
Signage No.2,
R/F , NMG
Tower
from 1 April
2017 to 31
March 2020
HK$1,000
(inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
(m) 30 November
2020
Media
Publishing
Signage No.2,
R/F, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$1,000
(inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
Note: The license was terminated with effect from 4 May 2021.
(n) 6 April 2017 NMG
Publishing
Storeroom No.
1, Ground
Floor, NMG
Tower
from 1 April
2017 to 31
March 2020
1st year –
HK$10,924.62
2nd year –
HK$13,566
3rd year –
HK$15,960
(all inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
CONNECTED TRANSACTIONS
– 227 –


--- page 237 ---
Date of
Agreement
Licensee
(subsidiary
of the
Company) Location Term Monthly rental
(o) 30 November
2020
Media
Publishing
Storeroom No.
1, Ground
Floor, NMG
Tower
from 1 April
2020 to 31
August 2022
HK$12,201
(inclusive of
government rent,
rates and
management fee but
exclusive of all
other outgoings)
Note: The licence has been terminated with effect from 30 April 2021.
For the financial years ended 31 December 2020, 2021 and 2022, the
aggregate amount of rental, management fee and air-conditioning charges and
license fee paid by the Group to Emperor International amounted to approximately
HK$7.0 million, HK$2.8 million and nil respectively.
The Directors (including the independent non-executive Directors) are of the
view that the rental and licence fee under the said tenancy agreements and licence
agreements was at market rental and the terms of the agreements were fair and
reasonable and on normal commercial terms and in the interest of our Group. In
particular, the management fee and air-conditioning charges were in line with
those charged to independent tenants of NMG Tower.
Ravia Global Appraisal Advisory Limited, a professional valuer which is an
Independent Third Party, has reviewed the above tenancy agreements and licence
agreements and confirmed that the rental and licence fee payable under the
tenancy agreements and licence agreements were at the market rental prevailing at
the commencement date of the relevant tenancies and licences and that the
commercial terms in the agreements were fair and reasonable and on normal
commercial terms.
Based on the above, the Joint Sponsors concur with the view of the
Directors that the charging bases of the said rental, management fee,
air-conditioning charges and license fee paid by our Group to Emperor
International were market rates and were fair and reasonable.
Connected person
At the time of entering into these tenancy agreements and licence
agreements and during the two financial years ended 31 December 2020 and up to
21 April 2021, Winning Treasure was an indirect wholly-owned subsidiary of
Emperor International, whose principal business is the holding and leasing of
NMG Tower.
As AY Holdings was the controlling shareholder of Emperor International at
the material time, the aforesaid transactions constituted connected transactions of
our Company under Chapter 14A of the Listing Rules.
CONNECTED TRANSACTIONS
– 228 –


--- page 238 ---
As Emperor International disposed of its entire interest in Winning Treasure
on 21 April 2021, Winning Treasure ceased to be a connected person of our
Company thereafter. Winning Treasure has served a notice of termination on us
terminating the tenancy agreement dated 11 December 2020 and the licence
agreement dated 30 November 2020 with effect from 31 January 2022 and we
have vacated the Premises before such date.
CONNECTED TRANSACTIONS
– 229 –


--- page 239 ---
You should read the following discussion and analysis in conjunction with our
consolidated financial information and notes thereto set forth in the Accountants’ Report
included as Appendix I and our selected historical consolidated financial information as
of and for each of the years ended 31 December 2020, 2021 and 2022 and operating
data included elsewhere in this prospectus. Our consolidated financial information has
been prepared in accordance with Hong Kong Financial Reporting Standards, which may
differ in material respects from the generally accepted accounting principles in other
jurisdictions.
This discussion and analysis contains forward-looking statements that are based on
assumptions and analysis in light of our current conditions. Our actual results may differ
significantly from our expectations and predictions and will be affected by a number of
risks and uncertainties over which we do not have control. Factors that might cause or
contribute to such differences include, without limitation, those discussed in the section
headed “Risk Factors” in this prospectus.
OVERVIEW
We are a digital media company, providing integrated advertising solutions to
advertisers ranging from multi-national brand owners, advertising agencies to SMEs
primarily through our digital media platforms. We produce and distribute contents on diverse
areas of interest under our different well-known and popular brands, including “
อ৿ಂ”
(Weekend Weekly), “˙อή” (Oriental Sunday), “ ຾᏶ɓ඄” (Economic Digest) and “ อ
Monday” (New Monday / NM+) which started off as print magazines in the early 2000s and
have a strong heritage.
During the Track Record Period, our income is derived principally from the provision
of integrated advertising solutions which are primarily distributed on our Digital Media
Platforms and, with diminishing proportion, our print publications. For each of the three
years ended 31 December 2022, our income derived from (i) the digital business represented
approximately 85.2%, 94.6% and 95.2% of our total revenue respectively; (ii) the circulation
of our publications represented approximately 8.9%, 1.4% and 1.2% of our total revenue
respectively; and (iii) advertising in our print publications represented approximately 5.9%,
4.0% and 3.6% of our total revenue respectively.
BASIS OF PRESENTATION AND PREPARATION
In preparation for the Listing, our Group completed the Reorganisation pursuant to
which our Company became the holding company of the companies now comprising our
Group on 22 March 2021. Please see “History, Reorganisation and Corporate Structure —
Reorganisation” for more information about the Reorganisation. Since our Group was under
the common control of our Controlling Shareholders throughout the Track Record Period and
prior to and after the Reorganisation, our Group comprising our Company and its
subsidiaries resulting from the Reorganisation is regarded as a continuing entity.
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Our consolidated financial information for the Track Record Period has been prepared
in accordance with the HKFRSs and applicable disclosures requirements of the Listing Rules
and the Companies Ordinance. Our consolidated financial information for the Track Record
Period is presented in HK$, our Company’s functional and presentation currency. Details
regarding the basis of presentation and basis of preparation of our consolidated financial
information for the Track Record Period are set out in notes 2.1 and 2.2, respectively to the
Accountants’ Report.
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND
FINANCIAL CONDITIONS
Our Group’s financial results will be affected by a number of factors, some of which
may not be within our Group’s control. Our Directors believe that major factors affecting
our Group’s revenue and ability to continue to generate profits include the following:
Changing preferences and tastes of audience
The digital advertising industry is a fast-growing industry that is constantly evolving
and is highly fragmented and dependent on audience preference. A predominant portion of
our revenue is generated through our digital advertising business. As such, our future
success largely depends on our ability to constantly generate engaging digital contents for
our audience, thus to attract traffic to our Digital Media Platforms. With loose regulatory
requirements, the threshold to enter into the digital advertising market in Hong Kong is
relatively low and we face fierce competitions from various types of advertisers including
traditional publishers, online content creators or even influencers on various social media
platforms.
Economic conditions in Hong Kong
Given the nature of the principal business of our Group as an integrated advertising
solutions provider in Hong Kong, our Directors are of the view that the business
performance of our Group was and will be highly correlated with the economic conditions
and the purchasing power of the consumers in Hong Kong. Our Directors believe that any
change in economic conditions in Hong Kong will affect our Group’s revenue and future
profits.
Brand image and recognition
We believe our strong brand recognition is one of the keys to our success in solidifying
the leading position in our viewership and reputation in the digital advertising industry and
that the maintenance and enhancement of our brand image is critical to our Group’s business
growth.
Our brand image may be adversely affected if our reputation is tarnished or defamed
by any negative publicity, which in turn may significantly and adversely impact our
reputation and popularity and thereby lead to drop in our viewership and market shares.
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Ability to retain clients
Our clients generally engage our services on a project-by-project basis and enter into
contracts with us for individual campaigns as and when the need arise. Our business
prospect depends on our ability to maintain the relationship with our existing clients. There
is no guarantee that clients who engage us repeatedly before will engage us in the future and
our revenue may fluctuate depending on the engagements that we are able to secure for the
relevant period.
We believe our ability to maintain constant engagement from our clients is mostly
dependent on our business relationships with them via providing a wide range of advertising
solutions that can achieve their business objectives. If our advertising solutions fail to
achieve our clients’ objectives or deviate from their expectations, they may lose trust in us,
which in turn may deter them from engaging with us again and opt for our competitors
instead.
SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTING
JUDGEMENTS AND ESTIMATES
Our consolidated financial information has been prepared in accordance with HKFRSs.
We have identified certain accounting policies that are significant to the preparation of our
consolidated financial information. These accounting policies are important for an
understanding of our financial position and results of operations and are set forth in note 2.4
of Section II of the Accountants’ Report set forth in Appendix I to this prospectus.
In the process of applying the Group’s accounting policies, we have to make
judgements, estimates and assumptions that affected the reported amounts and the disclosure
of our consolidated financial information, at the end of each of the three years ended 31
December 2020, 2021 and 2022. However, uncertainties about these assumptions, estimates
and judgements could result in outcomes that require a material adjustment to the carrying
amounts of the assets and liabilities in the future. These key assumptions and estimates are
subject to change in the future, as necessary, and are set forth in note 3 of Section II of the
Accountants’ Report set forth in Appendix I to this prospectus. We continually evaluate our
judgements and estimates based on various factors, including, but not limited to, historical
experience and expectation of future events/outcomes that are believed to be reasonable
under the circumstances. As a result, actual outcomes might differ from these estimates.
RESULTS OF OPERATIONS
The following is a summary of the audited consolidated statements of profit or loss and
other comprehensive income of our Group for the three years ended 31 December 2020,
2021 and the 2022 which are extracted from, and should be read in conjunction with, the
Accountants’ Report set out in Appendix I to this prospectus.
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Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Revenue 211,589 245,199 240,678
Other income and gains 17,421 4,437 7,311
Employee benefit expense (99,474) (104,622) (94,684)
Production costs (47,250) (53,893) (59,522)
Printing costs (8,430) (2,884) (2,982)
Depreciation and amortisation (11,346) (14,015) (17,079)
Other expense, net (13,997) (28,943) (21,252)
Finance costs (1,817) (3,159) (5,626)
Profit before tax 46,696 42,120 46,844
Income tax expense (5,528) (9,071) (7,413)
Profit for the year 41,168 33,049 39,431
Other comprehensive income/(loss)
that may be reclassified to profit
or loss in subsequent periods:
Exchange differences on translation
of foreign operations 100 (8) 32
Total comprehensive income for the
year 41,268 33,041 39,463
Non-HKFRS Measure
Non-HKFRS measure is not a standard measure under HKFRSs. We believe the
non-HKFRS measure set out below provides useful information to investors about our
operating performance, and enhances the overall understanding of our past performance and
future prospects in the same manner as our management.
We define adjusted net profit (non-HKFRS measure) as profit for the year adjusted by
expenses for the Listing. Given that Listing expenses were incurred for the purpose of the
Share Offer, the adjustment has been consistently made during the Track Record Period.
The non-HKFRS measure shall not be considered in isolation from, or as substitute for
analysis of, our consolidated statement of profit or loss or financial condition as reported
under HKFRSs. In addition, the non-HKFRS measure may be defined separately from
similar terms used by other companies and therefore may not be comparable to similar
measures presented by other companies.
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The table below sets forth our adjusted net profit (Non-HKFRS measure) for each
respective years during the Track Record Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Profit for the year 41,168 33,049 39,431
Adjustment for:
Listing expenses – 9,356 4,125
Adjusted net profit
(Non-HKFRS measure) for
the year 41,168 42,405 43,556
Adjusted net profit margin
(Non-HKFRS measure) for
the year 19.5% 17.3% 18.1%
Our adjusted net profit (Non-HKFRS measure) increased by approximately 3.0% from
approximately HK$41.2 million for the year ended 31 December 2020 to approximately
HK$42.4 million for the year ended 31 December 2021, which was mainly attributable to
the combined effect of (i) the increase in our revenue of approximately HK$33.6 million as
businesses and the general public being adapted to the COVID-19 pandemic and, in
particular, our digital advertising income increased by approximately HK$51.6 million for
the year ended 31 December 2021; (ii) the increase in our production costs due to the
increase in our boosting costs and was partly offset by the decrease in our printing costs due
to the cessation of the publication of the weekly 3-in-1 Oriental Sunday Magazine with the
last issue in December 2020; and (iii) the decrease in our other income and gains of
approximately HK$13.0 million, which was mainly attributable to no government subsidy
was received for the year ended 31 December 2021.
Our adjusted net profit (Non-HKFRS measure) increased by approximately HK$1.2
million from approximately HK$42.4 million for the year ended 31 December 2021 to
approximately HK$43.6 million for the year ended 31 December 2022, which was
principally attributable to the combined effect of (i) the decrease in our revenue by
approximately HK$4.5 million for the year ended 31 December 2022; and (ii) the increase in
our production costs, depreciation and amortisation and finance costs of approximately
HK$5.6 million, HK$3.1 million and HK$2.5 million, respectively, which was partly offset
by (i) the decrease in our employee benefit expense of approximately HK$9.9 million for the
year ended 31 December 2022; and (ii) the increase in our other income and gains of
approximately HK$2.9 million, which was partly due to the government subsidies received
for the year ended 31 December 2022.
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DISCUSSION AND ANALYSIS ON PRINCIPAL ITEMS IN THE CONSOLIDATED
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Revenue
During the Track Record Period, we derived our revenue from (i) the provision of
integrated advertising solutions which are principally distributed on our Digital Media
Platforms and print publications; and (ii) the circulation of our publications.
The following table sets forth the breakdown of our revenue during the Track Record
Period:
Y ear ended 31 December
2020 2021 2022
HK$’000
%o f
revenue HK$’000
%o f
revenue HK$’000
%o f
revenue
Advertising
Digital advertising
– Online advertising income 157,401 74.4 195,071 79.6 188,090 78.1
– Programmatic advertising
income 22,851 10.8 36,787 15.0 41,079 17.1
180,252 85.2 231,858 94.6 229,169 95.2
Print advertising 12,608 5.9 9,849 4.0 8,608 3.6
Subtotal 192,860 91.1 241,707 98.6 237,777 98.8
Circulation 18,729 8.9 3,492 1.4 2,901 1.2
Total 211,589 100.0 245,199 100.0 240,678 100.0
Advertising
During the Track Record Period, the majority of our revenue is derived from the
provision of online advertising solutions on our media platforms, which amounted to
approximately HK$157.4 million, HK$195.1 million and HK$188.1 million, and accounted
for approximately 74.4%, 79.6% and 78.1% of our total revenue for the years ended 31
December 2020, 2021 and 2022, respectively.
For the year ended 31 December 2021, our advertising revenue increased by
approximately 25.3% from approximately HK$192.9 million for the year ended 31 December
2020 to approximately HK$241.7 million, which our Directors believe was primarily due to
the gradual recovery of consumer spending power in Hong Kong as consumers have adapted
to the COVID-19 pandemic environment, which drove the advertising spending of brand
owners particularly during the last quarter of 2021.
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For the year ended 31 December 2022, our advertising revenue slightly decreased by
approximately 1.6% from approximately HK$241.7 million for the year ended 31 December
2021 to approximately HK$237.8 million, which was primarily attributable to the decrease
in the advertising spending of advertisers impacted by the fifth wave of COVID-19
pandemic during the first quarter of 2022 in Hong Kong and the gradual easing of the fifth
wave of the pandemic from April 2022 and the relaxation of social distancing measures,
quarantine measures and travel-related measures in the last quarter of 2022.
For details of the impact of COVID-19 on our business and financial performance,
please refer to “Business – Impact of COVID-19” in this prospectus.
During the Track Record Period, clients of our advertising solutions generally consisted
of advertising agencies and brand owners through direct contracts, and we also generated
revenue from programmatic advertising through platforms of the SSPs. The following table
sets forth the breakdown of such advertising revenue by type of clients during the Track
Record Period:
Y ear ended 31 December
Category 2020 2021 2022
HK$’000
% of total
advertising
revenue HK$’000
% of total
advertising
revenue HK$’000
% of total
advertising
revenue
Non-programmatic
Advertising agencies 105,785 54.9 114,152 47.2 101,152 42.5
Brand owners and others 64,224 33.3 90,768 37.6 95,546 40.2
Subtotal 170,009 88.2 204,920 84.8 196,698 82.7
Programmatic
SSPs 22,851 11.8 36,787 15.2 41,079 17.3
Total 192,860 100.0 241,707 100.0 237,777 100.0
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During the Track Record Period, we derived advertising revenue from a large number
of clients ranging from multinational and local brand owners to SMEs across a variety of
industries as well as advertising agencies operating in Hong Kong. The following table
shows a breakdown of our Group’s non-programmatic advertising revenue by industry
sectors for the Track Record Period:
Y ear ended 31 December
Business sector 2020 2021 2022
HK$’000
% of total
non-
programmatic
advertising
revenue HK$’000
% of total
non-
programmatic
advertising
revenue HK$’000
% of total
non-
programmatic
advertising
revenue
Cosmetics and skincare, toiletries
and household, pharmaceuticals 55,221 32.5 71,950 35.1 50,440 25.6
Banking, insurance and investment
services 24,163 14.2 36,647 17.9 35,978 18.3
Jewellery and watches and fashion
and luxury products 20,844 12.3 19,504 9.5 28,368 14.4
Retail and online shop, electronic
appliances 19,249 11.3 28,243 13.8 30,765 15.6
Food and beverage, restaurant and
food delivery 23,940 14.1 23,635 11.5 26,291 13.4
Government, non-profit organisations
and public services 4,462 2.6 6,476 3.2 9,549 4.9
Hotel, travel and tourism services 5,010 2.9 6,945 3.4 5,190 2.6
Telecommunication, mobile phones
and services 2,352 1.4 2,886 1.4 2,980 1.5
Properties and real estate 2,078 1.2 1,384 0.7 1,064 0.6
Others 12,690 7.5 7,250 3.5 6,073 3.1
Total 170,009 100.0 204,920 100.0 196,698 100.0
For the year ended 31 December 2021, we recorded an increase in advertising revenue
from majority of the industry sectors due to business being gradually adapted to the
COVID-19 pandemic environment. The increase was significant in the (i) banking, insurance
and investment services; (ii) retail and online shop, electronic appliances and (iii) cosmetic
and skincare, toiletries and household, pharmaceuticals sector. Our Directors consider the
increases in revenue from these sectors were mainly due to (i) general adaptation of living
under the COVID-19 pandemic by the public and hence businesses from these sectors
relaunched their advertising campaigns; and (ii) people pay more attention to financial
management due to more spare time and direct some travel spending to local market as a
result of travelling restriction and social distancing measures.
For the year ended 31 December 2022, we recorded mixed performance from different
industry sectors as compared to the year ended 31 December 2021. There were significant
drop in the cosmetics and skin care, toiletries and household, pharmaceuticals sectors. With
the outbreak of the fifth wave of the COVID-19 pandemic in Hong Kong since January
2022, stringent social distancing measures have been imposed in the first quarter of 2022,
and these measures were only relaxed from the last quarter of 2022. Our Directors believe
that the cosmetics and skin care and toiletries businesses were highly susceptible to the
impact of these social distancing measures which led to reduced demand for such products,
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and businesses from these sectors therefore tended to be more cautious on their advertising
campaigns during the first quarter of 2022. On the other hand, there was a significant
increase in the jewellery and watches and fashion and luxury products sector while the
banking, insurance and investment services sector remained stable, with both the food and
beverage, restaurant and food delivery sector and retail and online shop, electronic
appliances sector recording a marked increase. As the increases in these various sectors have
to a large extent compensated the drop in the cosmetics and skin care, toiletries and
household, pharmaceuticals sectors, and the banking, insurance and investment services
sectors have remained stable, therefore despite the drop in the cosmetics and skin care,
toiletries and household, pharmaceuticals sectors, the overall non-programmatic advertising
revenue of the Group for the financial year ended 31 December 2022 had only dropped by
approximately 4.0% as compared with that for the year ended 31 December 2021. For these
reasons, the Directors are of the view, and the Joint Sponsors concur, that there is no
material reliance by the Group on a particular business sector.
During Track Record Period, we generated programmatic advertising revenue through
platforms of SSPs. The programmatic advertising revenue we receive as publisher is
typically calculated by CPM. For illustrative purpose only, the following table sets forth our
average programmatic advertising revenue per CPM (“ Average CPM ”).
Y ear ended 31 December
2020 2021 2022
(approx.) (approx.) (approx.)
Programmatic advertising income (HK$’000) 22,851 36,787 41,079
Impressions (‘000)
– Web impressions 2,322,768 2,609,158 4,267,451
– App impressions 51,439 222,531 405,501
Total 2,374,207 2,831,689 4,672,952
Average CPM (HK$) (Note) 9.6 13.0 8.8
Note: Average CPM is calculated by dividing the programmatic advertising income by the total impressions
on our Digital Media Platforms as discussed in the section headed “Business – Our Products and
Services – Advertising Solutions”
The Average CPM went up from HK$9.6 in 2020 to HK$13.0 in 2021, and dropped to
HK$8.8 in 2022. We believe that since the final price of our programmatic inventory is
determined by automatic bidding on SSPs, the fluctuation in the Average CPM was mainly
as a result of demand and supply of the overall advertisement inventories market.
Accordingly, the fluctuation in the Average CPM generally reflected the overall advertising
market sentiment throughout the Track Record Period which lied squarely from the onset of
the COVID-19 pandemic in 2020 to a gradual easing and adaptation by the market in 2021,
followed by the fifth wave in 2022 with a relatively intense and adverse effect to the
market. The Industry Consultant expressed that average CPM can vary greatly depending on
the products or services being advertised and advertising format. For instance, advertisers of
products or services with narrower market may offer higher bids for advertisement inventory
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against other advertisers with less niche preference as there is less specific inventory
targeting their desired audience. Therefore, a direct comparison of average CPM across
different publishers could be constrained. Nevertheless, the Industry Consultant, having
conducted trade interview with industry experts, is of the view that the fluctuation of the
Group’s Average CPM have remained largely in line with industry overall trend. In light of
above, the Industry Consultant considered the fluctuation of the Group’s Average CPM
shared the similar growth and decline with the market trend during the Track Record Period.
Circulation
Our Group’s revenue in publication circulation is primarily attributed to our printed
magazines and books. During the Track Record Period, revenue derived from circulation of
our publication amounted to approximately HK$18.7 million, HK$3.5 million and HK$2.9
million, and accounted for approximately 8.9%, 1.4% and 1.2% of our total revenue for the
years ended 31 December 2020, 2021 and 2022, respectively. The following table shows a
breakdown of such revenue by principal publication categories during the Track Record
Period:
Y ear ended 31 December
2020 2021 2022
HK$’000
% of total
circulation
revenue HK$’000
% of total
circulation
revenue HK$’000
% of total
circulation
revenue
3-in-1 Oriental Sunday Magazine 15,365 82.1 ––––
Weekend Weekly x GOtrip – – 266 7.6 – –
Economic Digest 2,399 12.8 2,506 71.8 2,008 69.2
Madame Figaro 99 0.5 475 13.6 801 27.6
Travel guidebooks 677 3.6 170 4.9 43 1.5
Others 189 1.0 75 2.1 49 1.7
Total 18,729 100.0 3,492 100.0 2,901 100.0
Due to the structural shift in media platforms from traditional ones such as television,
print and radio to online ones, our revenue generated from circulation recorded a decreasing
trend during the Track Record Period. In view of the continuous shrank of the print media
industry and the decrease in circulation and advertising revenue generated from the 3-in-1
Oriental Sunday Magazine, we ceased its publication after the last issue in December 2020
and launched the Weekend Weekly X GOtrip Magazine, which is a quarterly magazine, in
2021. Hence, our circulation revenue substantially decreased from approximately HK$18.7
million for the year ended 31 December 2020 to approximately HK$3.5 million for the year
ended 31 December 2021. For the year ended 31 December 2022, as the issues of the
Weekend Weekly x GOtrip Magazine were cancelled, the majority of revenue generated from
circulation was attributable to Economic Digest Magazine and Madame Figaro Magazine
which accounted for approximately HK$2.0 million and HK$0.8 million, respectively.
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Other income and gains
Other income and gains of our Group amounted to approximately HK$17.4 million,
HK$4.4 million and HK$7.3 million for the years ended 31 December 2020, 2021 and 2022
respectively, which mainly comprised of income from licensing of content, gain on lease
modification, commission income, income from sales of scrap, the government subsidies for
the years ended 31 December 2020 and 2022, gain on reversal of provisions for
reinstatement costs for the year ended 31 December 2021 and subscribers fee to the Patreon
page of Economic Digest. Income from sales of content represented the licensing fee
received by our Group for granting of rights to third parties to use our digital contents
outside of Hong Kong. The table below sets forth the breakdown of our Group’s other
income and gains for the Track Record Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Bank interest income 23 5 8
Accretion of interest on
rental deposit paid – 42 85
Government subsidies 15,959 – 5,680
Gain on lease modification 354 1,193 –
Gain on reversal of provisions for
reinstatement costs – 2,415 –
Commission income 496 191 145
Licensing of content 318 283 107
Sales of scrap 17 61 44
Covid-19-related rent concession
from a lessor – 29 –
Others 254 218 1,242
Total 17,421 4,437 7,311
Government Subsidies
During the year ended 31 December 2020, we received government subsidies of
approximately HK$16.0 million under the Employment Support Scheme launched by the
HKSAR Government. Such income represented approximately 7.5% and 38.8% of our
revenue and profit for the year ended 31 December 2020, respectively.
During the year ended 31 December 2022, we received government subsidies of
approximately HK$5.7 million under the Employment Support Scheme. Such income
represented approximately 2.4% and 14.4% of our revenue and profit for and the year ended
31 December 2022, respectively.
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Expenses
Employee benefit expense
Our business is highly people-oriented and relied on the retention of talented staff.
During the Track Record Period, employee benefit expense represented the largest
component of our Group’s operating expenses. Employee benefit expense of our Group
(including chief executive’s remuneration) amounted to approximately HK$99.5 million,
HK$104.6 million and HK$94.7 million for the years ended 31 December 2020, 2021 and
2022 respectively, representing approximately 47.0%, 42.7% and 39.3% of our total revenue
for the corresponding periods. The employee benefits expense consisted of salaries and
allowances, sales commission and bonuses and pension scheme contributions. The following
table below sets forth the breakdown of our employee benefit expense for the Track Record
Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Salaries, wages and allowances 89,539 84,058 84,087
Sales commission and bonuses 6,006 17,148 7,172
Pension scheme contributions 3,929 3,416 3,425
Total 99,474 104,622 94,684
For the years ended 31 December 2020, 2021 and 2022, salaries, wages and allowances
amounted to approximately HK$89.5 million, HK$84.1 million and HK$84.1 million,
respectively. The comparatively higher amount for salaries, wages and allowances incurred
for the year ended 31 December 2020 was mainly attributable to the higher number of
employees prior to the restructuring of our print business towards the end of 2020.
Our sales commission is determined in accordance with our Group’s sales commission
scheme, where sales staff are entitled to commissions aligned with key performance
indicators of each individual at pre-defined and incremental commission rates depending on
the level of achievement on the pre-set revenue targets. For the years ended 31 December
2020, 2021 and 2022, we incurred sales commission of approximately HK$4.5 million,
HK$7.7 million and HK$5.8 million, respectively, which were generally in line with the
trend of our advertising revenue during the Track Record Period. The higher sales
commission for the year ended 31 December 2021 was mainly attributable to the increase of
the Group’s advertising revenue resulting from the resumption of advertising spending by
advertisers. The decrease in our sales commission for the year ended 31 December 2022 as
compared with that for the year ended 31 December 2021 was due to the sales revenue
achieved by most sales staff falling into a lower band of the revenue targets primarily due to
the outbreak of the fifth wave of the COVID-19 pandemic and the consequential stringent
social distancing measures imposed in the first quarter of 2022 which were only relaxed
from the last quarter of 2022 and has weighed heavily on a wide range of economic
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activities as well as economic sentiment in Hong Kong which in turn lowered the
advertising spending of advertisers, which resulted in commission at the lower rate
applicable to most of the advertising revenue for 2022.
With respect to the bonuses, approximately HK$1.5 million, HK$9.4 million and
HK$1.4 million were incurred for the years ended 31 December 2020, 2021 and 2022,
respectively. These were discretionary bonuses determined mainly with reference to the
financial performance of the Group, among which performance related bonus to Mr. Royce
Lee, being the Chief Executive Office of our Group, amounted to nil, approximately HK$4.6
million and nil for the years ended 31 December 2020, 2021 and 2022, respectively. For the
year ended 31 December 2020, Mr. Royce Lee’s entitlement to bonuses under his
employment contract with the Group was to be determined based on agreed percentage of
the net profit of the Group, and since the threshold set was not reached Mr. Royce Lee did
not receive any bonus for that year. The higher bonuses for the year ended 31 December
2021 was determined by the Company with reference to the increase in the adjusted net
profit (non-HKFRS measure) of approximately HK$1.2 million and the government subsidies
of approximately HK$16.0 million and nil received for the years ended 31 December 2020
and 2021 respectively. For the financial year ended 31 December 2022, notwithstanding that
the Group’s adjusted net profit (non-HKFRS measure) increased slightly by approximately
HK$1.2 million, the Group recorded minor decline in revenue of approximately 1.8% and
received the government subsidies of approximately HK$5.7 million (nil for the year ended
31 December 2021), and in view that there was a spike in the COVID-19 pandemic cases in
Mainland China in late 2022, a conservative approach was adopted in bonus payment for the
year. As a result, the amount of bonuses for the financial year ended 31 December 2022
reduced to approximately HK$1.4 million.
The following table sets forth the number of full-time employees of our Group as at
the end of, and the average monthly salary per employee for, the respective year stated
below.
As at 31 December
2020 2021 2022
Number of full-time employees 267 263 240
For the year ended 31 December
2020 2021 2022
HK$
(approximately)
HK$
(approximately)
HK$
(approximately)
Average monthly salary
per employee (Note) 25,300 26,400 27,900
Notes: Average monthly salary per employee is calculated by dividing the amount of salaries, wages and
allowances by the average number of full-time employees of the Group (being the average head
count of our full-time employees at the beginning and closing of the relevant year).
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The average monthly salary per employee amounted to approximately HK$25,300,
HK$26,400 and HK$27,900 for the three years ended 31 December 2020, 2021 and 2022,
representing a year-on-year increase of approximately 4.7% and 5.4% for the years ended 31
December 2021 and 2022, respectively.
Production costs
During the Track Record Period, production costs comprised of boosting costs and
other production costs which mainly represented payments to photographers, writers,
freelancers and production houses for production of content and advertisements. The
following table sets out the breakdown of our Group’s production costs during the Track
Record Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Boosting costs 29,246 35,547 31,723
Other production costs 18,004 18,346 27,799
Total 47,250 53,893 59,522
Boosting costs primarily represent costs paid to the social media platforms for gaining
exposures of our contents among targeted audience of our social media platforms. In
formulating the advertising solution campaign, our clients generally agree to a budget on
boosting and we generally charge our clients the boosting costs on a cost-plus basis based
on the boosting costs charged by the social media platforms plus a fixed percentage, which
our Directors consider being generally in line with the market practice. The boosting costs
charged by the social media platforms may vary due to a number of factors, including,
among others, time and duration of the advertising campaigns, and the different pricing
policies of social media platforms. As we publish the clients’ advertisement on the social
media platforms, we will set the boosting budget and ad space bidding strategy to cater our
clients’ needs and budget, and the social media platforms will utilise such budgets in
accordance with its automatic algorithm until the entire budget is utilised. Our Directors
consider that the boosting costs we charge is generally in line with the market practice. Such
boosting costs accounted for a majority of our production costs and generally reflects our
online advertising revenue during the Track Record Period. Other production costs were
stable for the years ended 31 December 2020 and 2021. The increase in our other production
costs for year ended 31 December 2022 of approximately HK$9.5 million was mainly
attributable to (i) increase in freelancing expense of approximately HK$4.9 million primarily
for generating more branded content with a view to increasing viewership and traffics on our
Digital Media Platforms; and (ii) the involvement of celebrities in an advertising project
during 2022, amounting to approximately HK$2.8 million, which was absent in the previous
year.
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Printing costs
Printing costs of our Group amounted to approximately HK$8.4 million, HK$2.9
million and HK$3.0 million for the years ended 31 December 2020, 2021 and 2022
respectively. Our printing costs for the year ended 31 December 2021 decreased significantly
by approximately 65.8% from the year ended 31 December 2020 due to the reduction in
number of copies printed as a result of the continuous shrank of the print media industry
and particularly the cessation of publication of the 3-in-1 Oriental Sunday Magazine in
2021.
During the year ended 31 December 2022, the printing costs increased slightly by 3.4%
from approximately HK$2.9 million for the year ended 31 December 2021 to approximately
HK$3.0 million, which was mainly due to the combined effect of the increase of print
amount of Madame Figaro Magazine during the year and the cancellation of the 2022 issues
of the Weekend Weekly x GOtrip Magazine.
Depreciation and amortisation
Depreciation represents the depreciation charge on right-of-use assets, property, plant
and equipment, including, among others, leasehold improvements, furniture, fixtures and
equipment. Amortisation represents amortisation expense on intangible assets, namely the
mobile applications of our media brands developed externally during the year ended 31
December 2020. Depreciation and amortisation of our Group amounted to approximately,
HK$11.3 million, HK$14.0 million and HK$17.1 million for the years ended 31 December
2020, 2021 and 2022 respectively. The increase of depreciation of right-of-use assets for the
years ended 31 December 2021 and 2022 was mainly due to the entering into of new
tenancy agreement in relation to our current offices. The following table sets out the
breakdown of our Group’s depreciation and amortisation during the Track Record Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Depreciation of right-of-use assets 9,411 12,347 12,620
Depreciation of property, plant and
equipment 1,747 1,251 3,989
Amortisation of intangible assets 188 417 470
Total 11,346 14,015 17,079
Other expenses, net
Other expenses primarily comprised of information technology expenses, rental and
management fees, impairment of trade receivables, net of reversal, corporate charges payable
to the Emperor Group for legal and administrative services, repair and maintenance, utilities
expenses, insurance, legal and professional fees, recruitment expenses paid to agents, storage
fee and bank charges and, for the years ended 31 December 2021 and 2022, Listing
expenses. These expenses amounted to approximately HK$14.0 million, HK$28.9 million
FINANCIAL INFORMATION
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and HK$21.3 million for the years ended 31 December 2020, 2021 and 2022, respectively.
The following table sets out the breakdown of the other expenses for the Track Record
Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Information technology expenses 5,916 6,662 8,320
Rental and management fees 2,563 3,426 3,487
Impairment/(reversal of impairment) of
trade receivables, net of reversal 74 2,107 (360)
Corporate charges 770 1,793 1,330
Office and utilities expenses 1,135 1,446 1,010
Repair and maintenance 637 547 186
Recruitment expenses 274 324 198
Insurance 944 810 949
Staff messing and welfare expenses 187 423 504
Legal and professional fees 572 1,066 710
Bank charges 218 283 624
Listing expenses – 9,356 4,125
Others 707 700 169
13,997 28,943 21,252
Finance costs
Finance costs comprised of interest on bank borrowings, interest on other borrowing
and interest of lease liabilities. The following table sets out the breakdown of our Group’s
finance costs during the Track Record Period:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Interest on bank borrowings 199 935 1,932
Interest on other borrowing 162 – –
Interest on lease liabilities 1,456 2,224 3,694
Total 1,817 3,159 5,626
The major component of finance costs was interest on lease liabilities, which were
approximately HK$1.5 million, HK$2.2 million and HK$3.7 million, accounting for
approximately 80.1%, 70.4% and 65.7% of our total finance costs for the years ended 31
December 2020, 2021 and 2022 respectively. The increase in the interest on lease liabilities
for the year ended 31 December 2021 and 2022 was mainly due to the relocation of our
FINANCIAL INFORMATION
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headquarter to our current office. The other borrowing represented the loan from NMG
Investment which has been fully repaid by 31 December 2020. The decrease in finance costs
on other borrowing was because of the repayment of loan provided by NMG Investment.
Income tax expense
Our Group is subject to Hong Kong Profits Tax which is calculated based on the
applicable tax rates and the assessable profits of our Company and its subsidiaries. Our
applicable tax rate in Hong Kong for the years ended 31 December 2020, 2021 and 2022
was 16.5%. Our Directors confirm that our Group has made all required tax filings and paid
all outstanding tax liabilities with the relevant tax authorities, and has not been subject to
any dispute or potential dispute with any tax authorities during the Track Record Period and
up to the Latest Practicable Date.
For the three years ended 31 December 2020, 2021 and 2022, the effective tax rates of
our Group were approximately 11.8%, 21.5% and 15.8%, respectively. The comparatively
lower effective tax rate for the year ended 31 December 2020 and 2022 were mainly due to
the government subsidies received by our Group under the Employment Support Scheme not
being subject to tax. The increase in effective tax rate for the year ended 31 December 2021
was mainly due to the increase in expenses that were not deductible for tax purpose, in
particular the Listing expenses.
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
Y ear ended 31 December 2022 compared to year ended 31 December 2021
Revenue
Our revenue for the year ended 31 December 2022 decreased by approximately 1.8%
from approximately HK$245.2 million for the year ended 31 December 2021 to
approximately HK$240.7 million. The drop in revenue was mainly attributable to the slight
decrease in both (i) digital advertising income of the Group by approximately HK$2.7
million from approximately HK$231.9 million for the year ended 31 December 2021 to
approximately HK$229.2 million for the year ended 31 December 2022; and (ii) print
advertising income of the Group by approximately HK$1.2 million from approximately
HK$9.8 million for the year ended 31 December 2021 to approximately HK$8.6 million for
31 December 2022. Such decrease was attributable to the outbreak of the fifth wave of the
COVID-19 pandemic in Hong Kong in January 2022. Stringent social distancing measures
have been imposed in the first quarter of 2022, which weighed heavily on a wide range of
economic activities as well as economic sentiment in Hong Kong, with Hong Kong’s real
GDP for the first quarter of 2022 contracting by 4.0% year-on-year. In line with the
contraction of the real GDP during this period, our Group experienced an approximately 6%
drop in revenue for the first four months when compared with the corresponding period in
2021, with our business recovering following the gradual easing of the fifth wave of the
pandemic and the relaxation of social distancing measures, quarantine measures and
travel-related measures in the last quarter of 2022.
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Other income and gains
Other income and gains of our Group for the year ended 31 December 2022 amounted
to approximately HK$7.3 million, which increased by approximately 64.8% as compared to
approximately HK$4.4 million for the year ended 31 December 2021. Such increase was
mainly attributable to the government subsidies of approximately HK$5.7 million received
under the Employment Support Scheme in relation to the fifth wave of the COVID-19
pandemic in 2022.
Employee benefit expense
Our employee benefit expense decreased by approximately 9.5% from approximately
HK$104.6 million for the year ended 31 December 2021 to approximately HK$94.7 million
for the year ended 31 December 2022. Such decrease was mainly attributable to the decrease
in sales commission and bonuses paid to employees of the Group as the sales revenue
achieved by most sales staff falling into a lower band of the revenue target and the
Company adopted a conservative approach in bonus payment.
Production costs
Our production costs increased by approximately 10.4%, from approximately HK$53.9
million, for the year ended 31 December 2021 to approximately HK$59.5 million for the
year ended 31 December 2022. The increase was mainly attributable to the combine effect of
increase in the engagements of third party freelancers and celebrities for our content creation
and production work, mitigated by the decrease in boosting costs.
Printing costs
Our printing costs for the year ended 31 December 2022 amounted to approximately
HK$3.0 million, representing an increase of approximately 3.4% from approximately
HK$2.9 million for the year ended 31 December 2021, which was mainly due to the
combined effect of the increase of print amount of Madame Figaro Magazine in the year
ended 31 December 2022 and the cancellation of the 2022 issues of the Weekend Weekly x
GOtrip Magazine.
Depreciation and amortisation
Depreciation and amortisation increased by approximately 21.9% from approximately
HK$14.0 million for the year ended 31 December 2021 to approximately HK$17.1 million
for the year ended 31 December 2022, which was mainly attributable to the increase in
depreciation of right-of-use assets and depreciation of property, plant and equipment as a
result of the relocation to our current office in November 2021.
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Other expense net
Net other expense decreased by approximately HK$7.7 million, or by approximately
26.6%, from approximately HK$28.9 million for the year ended 31 December 2021 to
approximately HK$21.3 million for the year ended 31 December 2022. The decrease was
mainly attributable to the combined effect of (i) the decreased in the Listing expenses by
approximately HK$5.2 million; and (ii) less impairment was made on expected credit loss as
compared to that for the year ended 31 December 2021.
Finance costs
Our finance cost increased by approximately HK$2.5 million from approximately
HK$3.2 million for the year ended 31 December 2021 to approximately HK$5.6 million for
the year ended 31 December 2022, which was primarily attributable to the increase in
interest payment on bank borrowings and increase on lease liabilities arising from the
relocation of our headquarter.
Profit before tax
Our profit before tax increased by approximately HK$4.7 million, or approximately
11.2%, from approximately HK$42.1 million for the year ended 31 December 2021 to
approximately HK$46.8 million for the year ended 31 December 2022. Our profit margin
before tax increased from approximately 17.2% for the year ended 31 December 2021 to
approximately 19.5% for the year ended 31 December 2022, which was mainly attributable
to the combined effect of (i) increase of other income and gains on government subsidies;
(ii) decrease in Listing expenses incurred for the year ended 31 December 2022; (iii)
decrease in employment benefit expense; and (iv) mitigated by the increase in production
costs as explained above.
Income tax expense
Our income tax expenses decreased from approximately HK$9.1 million for the year
ended 31 December 2021 to HK$7.4 million for the year ended 31 December 2022. The
decrease was mainly due to (i) increase in amount of income not subject to tax for the year
ended 31 December 2022, being government subsidies received by our Group under the
Employment Support Scheme; and (ii) the Listing expenses, which was non tax-deductible,
incurred decreased from approximately HK$9.4 million for the year ended 31 December
2021 to approximately HK$4.1 million for the year ended 31 December 2022.
Profit for the year
As a result of the foregoing, our net profit increased by approximately 19.3% from
approximately HK$33.0 million for the year ended 31 December 2021 to approximately
HK$39.4 million for the year ended 31 December 2022 and our net profit margin increased
from approximately 13.5% for the year ended 31 December 2021 to approximately 16.4%
for the year ended 31 December 2022.
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Y ear ended 31 December 2021 compared to year ended 31 December 2020
Revenue
Our revenue increased by approximately HK$33.6 million, or approximately 15.9%,
from approximately HK$211.6 million for the year ended 31 December 2020 to
approximately HK$245.2 million for the year ended 31 December 2021.
The increase in revenue was mainly attributable to the increase in our digital
advertising income by approximately HK$51.6 million from approximately HK$180.3
million for the year ended 31 December 2020 to approximately HK$231.9 million for the
year ended 31 December 2021. Our Directors believe that the increase was primarily
attributable to businesses and the general public being adapted to the COVID-19 pandemic,
and hence businesses resumed their advertising spending during the latter half of 2021 that
were delayed due to the pandemic to promote business momentum. Businesses that were
more adapted to pandemic environment and with targeted consumers being local general
publics, including the banking, insurance and investment services, retail and online stores,
electronic appliances, cosmetic and skincare, toiletries and household, pharmaceuticals
sectors drove the increase in our digital advertising income.
On the other hand, we recorded decrease in both print advertising income and
circulation income, as we ceased publication of the 3-in-1 Oriental Sunday Magazine with
the last issue in December 2020 and instead launched the Weekend Weekly x GOtrip
Magazine as a quarterly magazine, the first issue of which was released in March 2021.
Other income and gains
Other income and gains of our Group for the year ended 31 December 2021 amounted
to approximately HK$4.4 million, which decreased by approximately 74.5% as compared to
approximately HK$17.4 million for the year ended 31 December 2020. The decrease was
mainly attributable to the government subsidies of approximately HK$16.0 million for the
year ended 31 December 2020.
Employee benefit expense
Our employee benefit expense slightly increased to approximately HK$104.6 million
for the year ended 31 December 2021 as compared to approximately HK$99.5 million for
the year ended 31 December 2020, which was mainly because of the increase in sales
commission and bonuses from HK$6.0 million for the year ended 31 December 2020 to
HK$17.1 million for the year ended 31 December 2021. Such increase was mainly
attributable to the increase in the bonuses of approximately HK$7.9 million due to the
increase in the adjusted net profit (non-HKFRS measure) of approximately HK$1.2 million
despite the Group received no government subsidies for the year ended 31 December 2021
as compared to approximately HK$16.0 million for the year ended 31 December 2020.
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Production costs
Our production costs increased by approximately HK$6.6 million, or approximately
14.1%, from approximately HK$47.3 million for the year ended 31 December 2020 to
approximately HK$53.9 million for the year ended 31 December 2021. The increase was
mainly attributable to the increase in our boosting costs as we continued to shift our
business focus to digital advertising from the print business.
Printing costs
Our printing costs decreased by approximately HK$5.5 million, or approximately
65.8%, from approximately HK$8.4 million for the year ended 31 December 2020 to
approximately HK$2.9 million for the year ended 31 December 2021. The decrease was
mainly attributable to the cessation of publication of the weekly 3-in-1 Oriental Sunday
Magazine with the last issue in December 2020 and instead launched the Weekend Weekly x
GOtrip Magazine as a quarterly magazine, the first issue of which was released in March
2021.
Depreciation and amortisation
Depreciation and amortisation increased by approximately HK$2.7 million, or
approximately 23.5%, from approximately HK$11.3 million for the year ended 31 December
2020 to approximately HK$14.0 million for the year ended 31 December 2021.
Other expenses, net
Net other expenses increased by approximately HK$14.9 million, or approximately
106.8%, from approximately HK$14.0 million for the year ended 31 December 2020 to
approximately HK$28.9 million for the year ended 31 December 2021. The increase was
mainly attributable to (i) the Listing expenses, which amounted to approximately HK$9.4
million for the year ended 31 December 2021; and (ii) the increase in impairment of trade
receivables of approximately HK$2.0 million, corporate charges of approximately HK$1.0
million, rental and management fees of approximately HK$0.8 million and information
technology expenses of approximately HK$0.7 million.
Finance costs
Our finance costs increased by approximately HK$1.3 million, being approximately
73.8%, from approximately HK$1.8 million for the year ended 31 December 2020 to
approximately HK$3.2 million for the year ended 31 December 2021, which was mainly
because of the decrease in interest on other borrowing after repayment of loan to NMG
Investment by 31 December 2020, the increase in interest on bank borrowing and interest on
lease liabilities.
FINANCIAL INFORMATION
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Profit before tax
Our profit before tax decreased by approximately HK$4.6 million, or approximately
9.8%, from approximately HK$46.7 million for the year ended 31 December 2020 to
approximately HK$42.1 million for the year ended 31 December 2021. Our profit margin
before tax decreased from approximately 22.1% for the year ended 31 December 2020 to
approximately 17.2% for the year ended 31 December 2021 which was due to the combined
effect of the increase of revenue and net other expense and reduction in other income and
gains recorded as explained above.
Income tax expense
Our income tax expense increased from approximately HK$5.5 million for the year
ended 31 December 2020 to approximately HK$9.1 million for the year ended 31 December
2021. This increase was mainly due to the increase in expense that were not deductible for
tax purpose, in particular the Listing expenses.
Profit for the year
As a result of the foregoing, our net profit decreased by approximately 19.7% from
approximately HK$41.2 million for the year ended 31 December 2020 to approximately
HK$33.0 million for the year ended 31 December 2021 and our net profit margin decreased
from approximately 19.5% for the year ended 31 December 2020 to approximately 13.5%
for the year ended 31 December 2021. The decrease in net profit was mainly attributable to
the Listing expenses of approximately HK$9.4 million incurred during the year and absence
of the government subsidies received during the year ended 31 December 2020 of
approximately HK$16.0 million.
LISTING EXPENSES
Listing expenses mainly comprise of legal and other professional fees in connection
with the Share Offer. Listing expenses, including underwriting fee for the Share Offer, are
estimated to be approximately HK$37.0 million (comprising (i) underwriting fee of
approximately HK$6.6 million, and (ii) non-underwriting related expenses of approximately
HK$30.4 million, which consist of fees and expenses of legal advisors and Reporting
Accountant of approximately HK$15.2 million and other fees and expenses of approximately
HK$15.2 million), representing approximately 28.0% of the gross proceeds from the Share
Offer (assuming an Offer Price of HK$0.88 per Share, being the mid-point of our indicative
Offer Price range of HK$0.84 to HK$0.92), among which approximately HK$12.9 million
relating to the Share Offer is expected to be recognised as a deduction from equity upon the
issuance of the Offer Shares, and approximately HK$24.1 million is expected to be reflected
in our consolidated statements of profit or loss of which (i) approximately HK$9.4 million
have been recognised for the year ended 31 December 2021; and (ii) approximately HK$4.1
million have been recognised for year ended 31 December 2022, and the balance of
approximately HK$10.6 million is expected to be recognised subsequent to the Track Record
Period. Our Group’s financial performance and results of operations for the year ending 31
December 2023 will be significantly and adversely affected by the Listing expenses.
FINANCIAL INFORMATION
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Our Directors would like to emphasise that the aforesaid Listing expenses are the
current estimate for reference only and the actual amount to be recognised is subject to
adjustment based on audit and the changes in variables and assumptions.
LIQUIDITY AND CAPITAL RESOURCES
We have historically funded our liquidity and capital requirements primarily from cash
inflows from our operating activities, short-term bank borrowings and unsecured interest-
bearing loan from NMG Investment. We had net cash inflows from operating activities of
approximately HK$41.0 million, HK$30.0 million and HK$59.5 million for the years ended
31 December 2020, 2021 and 2022 respectively.
In general, we have the ability to generate adequate cash from our operations to fund
our ongoing operating cash needs and the general expansion of our business. We have not
experienced and do not expect to experience any difficulties in meeting our financial
obligations as they become due.
Going forward, we believe our funding requirements will be satisfied through a
combination of the net proceeds from the Share Offer, cash generated from our operating
activities and borrowings from banks.
The following table sets out selected cash flow data from the consolidated statements
of cash flows for the Track Record Period.
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Net cash flows from operating activities 40,981 29,989 59,526
Net cash flows used in investing activities (1,316) (5,119) (21,774)
Net cash flows used in financing activities (25,344) (32,803) (41,379)
Net increase/(decrease) in cash and cash
equivalents 14,321 (7,933) (3,627)
Cash and cash equivalents at beginning of year 17,052 31,466 23,525
Effect of foreign exchange rate changes, net 93 (8) 32
Cash and cash equivalents at end of year
represented by cash and bank balances 31,466 23,525 19,930
FINANCIAL INFORMATION
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Cash flows from operating activities
Cash flows from operating activities are principally related to receipt of payment from
provision of digital and print advertising solutions and sale of print circulation. Cash used in
operating activities is mainly related to payment for production costs, employee benefit
expense and other costs relating to operating our business. Our net cash flows from
operating activities reflects the profit before tax for the year adjusted for non-cash items
such as depreciation of property, plant and equipment and changes in working capital.
Our net cash flows from operating activities was approximately HK$41.0 million for
the year ended 31 December 2020, primarily reflecting cash inflow from operations before
working capital changes of approximately HK$59.8 million, as adjusted by movements in
working capital which comprised (i) decrease in trade receivables of approximately HK$8.9
million as a result of decrease in revenue during the year; (ii) decrease in prepayments,
deposits and other receivables of HK$1.1 million due to less deposit required under the
tenancy agreement for our office premises as we surrendered part of the spaces during the
year; (iii) decrease in trade payables of approximately HK$0.2 million; and (iv) decrease in
other payables and accruals of approximately HK$8.0 million mainly because of the
decrease in payables and accruals for employee benefit expense.
Our net cash flows from operating activities was approximately HK$30.0 million for
the year ended 31 December 2021, primarily reflecting cash inflow from operations before
working capital changes of approximately HK$57.7 million, as adjusted by movements in
working capital which comprised (i) increase in trade receivables of approximately HK$17.5
million; (ii) increase in prepayments, deposits and other receivables of approximately
HK$7.1 million; (iii) decrease in trade payables of approximately HK$2.6 million; and (iv)
increase in other payables and accruals of approximately HK$10.1 million.
Our net cash flows from operating activities was approximately HK$59.5 million for
the year ended 31 December 2022, primarily reflecting cash inflow from operations before
working capital changes of approximately HK$69.1 million, as adjusted by movements in
working capital which mainly comprised (i) decrease in trade receivables of approximately
HK$7.7 million; (ii) increase in prepayments, deposits and other receivables of
approximately HK$0.6 million; (iii) increase in trade payables of approximately HK$0.7
million; and (iv) decrease in other payables and accruals of HK$12.9 million in relation to
operating activities.
Cash flows used in investing activities
Cash flows used in investing activities mainly consist of purchases of items of
property, plant and equipment and additions to intangible assets.
Our net cash flows used in investing activities was approximately HK$1.3 million for
the year ended 31 December 2020, primarily reflecting the additions to intangible assets in
respect of the mobile applications of our media brands developed externally during the year
of approximately HK$1.2 million.
FINANCIAL INFORMATION
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Our net cash flows used in investing activities was approximately HK$5.1 million for
the year ended 31 December 2021, primarily reflecting the purchase of items of property,
plant and equipment in relation to the relocation of our headquarter to our current office.
Our net cash flows used in investing activities was approximately HK$21.8 million for
the year ended 31 December 2022, primarily reflecting the purchase of property, plant and
equipment in relation to the relocation of our headquarter to our current office.
Net cash flows used in financing activities
Cash flows used in financing activities mainly consisted of repayment of bank
borrowings and other borrowing, interest paid for these borrowings, dividend paid and
payment for lease liabilities and the interest thereon.
Our net cash flows used in financing activities was approximately HK$25.3 million for
the year ended 31 December 2020, which mainly represented (i) repayments of other
borrowing of approximately HK$36.5 million; (ii) payment of dividends by a company now
comprising our Group to its then shareholders of HK$21.0 million; (iii) payments of lease
liabilities and the interests thereon of approximately HK$10.3 million; and (iv) repayments
of bank borrowings of approximately HK$5.2 million, which were partially offset by (i) new
other borrowing drawdown of HK$32.5 million; and (ii) new bank loan drawdown of
approximately HK$15.5 million.
Our net cash flows used in financing activities was approximately HK$32.8 million for
the year ended 31 December 2021, which mainly represented (i) payment of dividend of
HK$44.0 million; (ii) payments of lease liabilities and the interests thereon of approximately
HK$12.6 million; (iii) repayments of bank borrowings of approximately HK$10.3 million;
and (iv) new bank loan drawdown of HK$35.0 million.
Our net cash flows used in financing activities was approximately HK$41.4 million for
the year ended 31 December 2022, which mainly represented (i) repayments of bank
borrowings of approximately HK$60.7 million; and (ii) payments of lease liabilities and the
interests thereon of approximately HK$13.4 million, offset by new bank loan drawdown of
approximately HK$46.7 million.
WORKING CAPITAL
Our Directors are of the opinion that, after taking into consideration of the financial
resources available to our Group, including (i) our Group’s available banking facilities; (ii)
the amounts of net cash generated from our operating activities during the Track Record
Period; (iii) our cash and cash equivalents of approximately HK$19.9 million as at 31
December 2022 and approximately HK$16.2 million as at 30 April 2023; and (iv) the
estimated net proceeds from the Share Offer of approximately HK$95.0 million (assuming
an Offer Price of HK$0.88 per Offer Share, being the mid-point of the indicative Offer Price
range) to be received by us, our Group has sufficient working capital for our present
working capital requirements for at least the next 12 months from the date of this
prospectus.
FINANCIAL INFORMATION
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DISCUSSION ON MAJOR ITEMS OF THE CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
Statement of financial position
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
NON-CURRENT ASSETS
Property, plant and equipment 907 24,971 22,610
Right-of-use assets 17,683 74,714 62,789
Intangible assets 1,016 725 408
Prepayments, deposits and other receivables 2,652 3,027 2,960
Deferred tax assets 1,202 351 508
Total non-current assets 23,460 103,788 89,275
CURRENT ASSETS
Trade receivables 63,417 78,814 71,470
Prepayments, deposits and other receivables 3,273 8,384 9,144
Tax recoverable – 905 –
Pledged bank deposit 800 800 800
Cash and cash equivalents 31,466 23,525 19,930
Total current assets 98,956 112,428 101,344
CURRENT LIABILITIES
Trade payables 8,037 5,439 6,107
Other payables and accruals 20,849 51,272 18,371
Interest-bearing bank and other borrowings 10,318 35,000 21,000
Lease liabilities 10,460 9,858 10,536
Tax payable 2,860 1,363 3,594
Total current liabilities 52,524 102,932 59,608
NET CURRENT ASSETS 46,432 9,496 41,736
TOTAL ASSETS LESS CURRENT LIABILITIES 69,892 113,284 131,011
NON-CURRENT LIABILITIES
Lease liabilities 12,483 62,692 52,956
Provisions 2,415 6,557 6,557
Total non-current liabilities 14,898 69,249 59,513
Net assets 54,994 44,035 71,498
EQUITY
Equity attributable to owners of the parent
Issued capital – – –
Reserves 54,994 44,035 71,498
Total equity 54,994 44,035 71,498
FINANCIAL INFORMATION
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Non-current assets
Our non-current assets mainly consisted of property, plant and equipment, right-of-use
assets, intangible assets, prepayments, deposits and other receivables and deferred tax assets.
Our total non-current assets increased from approximately HK$23.5 million as at 31
December 2020 to approximately HK$103.8 million as at 31 December 2021, representing
an increase of approximately HK$80.3 million or 342.4%. The increase was mainly
attributable to the increase in right-of-use assets and plant and equipment arising from the
re-location of our headquarter.
Our total non-current assets decreased from approximately HK$103.8 million as at 31
December 2021 to approximately HK$89.3 million as at 31 December 2022, representing a
decrease of approximately HK$14.5 million or 14.0%. The decrease was mainly attributable
to the decrease in right-of-use assets which was recognised under the tenancy agreement of
our current offices.
Current assets
Our current assets mainly consisted of trade receivables, prepayments, deposits and
other receivables, tax recoverable, pledged bank deposit and cash and cash equivalents.
Our trade receivables increased by approximately 24.3%, from approximately HK$63.4
million as at 31 December 2020 to approximately HK$78.8 million as at 31 December 2021.
As at 31 December 2022, our trade receivables decreased to approximately HK$71.5 million.
Such balances were generally in line with the revenue of the Group for the corresponding
financial year.
Our prepayments, deposits and other receivables increased by approximately 156.2%
from approximately HK$3.3 million as at 31 December 2020 to approximately HK$8.4
million as at 31 December 2021, which was mainly attributable to the prepayment for
Listing expenses and the increase in deposit for the new tenancy of our current headquarter.
As at 31 December 2022, our prepayments, deposit and other receivables increased to
approximately HK$9.1 million, or by 9.1%, from approximately HK$8.4 million as at 31
December 2021. Such increase was mainly attributable to the additional prepayment for
Listing expenses.
Our tax recoverable amounted to nil, approximately HK$0.9 million and nil as at 31
December 2020, 2021 and 2022, respectively.
Our pledged bank deposit remained stable at HK$0.8 million as at 31 December 2020,
2021 and 2022.
Our cash and cash equivalents decreased by approximately 25.2%, from approximately
HK$31.5 million as at 31 December 2020 to approximately HK$23.5 million as at 31
December 2021, which was mainly attributable to the incurrence of Listing expenses. As at
31 December 2022, our cash and cash equivalents further decreased to approximately
HK$19.9 million, or approximately 15.3%, mainly due to incurrence of Listing expenses.
FINANCIAL INFORMATION
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Current liabilities
Our current liabilities mainly consisted of trade payables, other payables and accruals,
interest-bearing bank and other borrowings, lease liabilities and tax payable.
Our trade payables decreased by approximately 32.3%, from approximately HK$8.0
million as at 31 December 2020 to approximately HK$5.4 million as at 31 December 2021,
which was mainly due to cessation of publication of the 3-in-1 Oriental Sunday Magazine
which reduced the printing costs. As at 31 December 2022, our trade payables increased to
approximately HK$6.1 million which was in line with the increase in our other production
costs during the year ended 31 December 2022.
Our other payables and accruals increased by approximately 145.9%, from
approximately HK$20.8 million as at 31 December 2020 to approximately HK$51.3 million
as at 31 December 2021, which was mainly because of the accruals for leasehold
improvements for new lease for our current headquarter. As at 31 December 2022, our other
payables and accruals decreased to approximately HK$18.4 million, which was mainly
attributable to settlement of the accruals for leasehold improvements and decrease in accrued
staff costs during the year ended 31 December 2022.
Our interest-bearing bank and other borrowings substantially increased by
approximately 3.4 times, from approximately HK$10.3 million as at 31 December 2020 to
approximately HK$35.0 million as at 31 December 2021, which was principally due to
drawdown of loan from a bank during the year. As at 31 December 2022, the balance
decreased to approximately HK$21.0 million, which was mainly due to repayment of part of
the said bank loan in the sum of HK$20.0 million and new bank loan drawdown of HK$6.0
million.
Our current lease liabilities decreased by approximately 5.8%, from approximately
HK$10.5 million as at 31 December 2020 to approximately HK$9.9 million as at 31
December 2021 which was a result of early termination of the tenancy agreement at NMG
Tower and the entering into of new tenancy agreement in relation to our current headquarter.
As at 31 December 2022, our current lease liabilities remained relatively stable at
approximately HK$10.5 million.
Our tax payable decreased by approximately 52.3%, from approximately HK$2.9
million as at 31 December 2020 to approximately HK$1.4 million as at 31 December 2021.
Our tax payable increased by approximately HK$2.2 million, or 163.7%, from approximately
HK$1.4 million as at 31 December 2021 to approximately HK$3.6 million as at 31
December 2022 which was mainly attributable to the accrual of income tax expense of
approximately HK$7.4 million and the Hong Kong profits tax paid of approximately HK$4.4
million.
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Net current assets
Our net current assets decreased from approximately HK$46.4 million as at 31
December 2020 to approximately HK$9.5 million as at 31 December 2021 which was
mainly due to increase in interest-bearing bank and other borrowings and increase in other
payables and accruals arising from the new lease for our new headquarter. Our net current
assets increased from approximately HK$9.5 million as at 31 December 2021 to
approximately HK$41.7 million as at 31 December 2022 which was mainly due to the
decrease in other payables and accruals.
DISCUSSION ON SELECTED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION ITEMS
Trade receivables
Trade receivables represented account receivables from our clients for advertising
services and circulation income. Our Group’s trading terms/settlement arrangements with
clients are generally based on specific contractual terms or in accordance with industry
practice with reference to their historical payment records and/or business relationships,
which might include payment in advance, payment upon delivery/service rendered or with
credit period extending up to 90 days or more. Settlements of circulation income from sales
of magazine are generally made by respective distributors to our Group around 10 days after
the verification of the quantity of magazines sold. Our Group seeks to maintain strict control
over our outstanding receivables. Overdue balances are reviewed by management. Our
Group does not hold any collateral or other credit enhancements over our trade receivable
balances. Trade receivables are non-interest-bearing.
Our Group’s trade receivables amounted to approximately HK$63.4 million, HK$78.8
million and HK$71.5 million as at 31 December 2020, 2021 and 2022 respectively, which
mainly represented the unsettled amount under invoices for digital advertising services. The
following table sets forth a breakdown of our trade receivables as at the dates indicated:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Trade receivables 67,387 84,891 76,570
Impairment (3,970) (6,077) (5,100)
63,417 78,814 71,470
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The following table sets forth the ageing of our Group’s trade receivables based on the
invoice date and net of loss allowance:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Within 1 month 23,792 26,676 27,116
1 to 3 months 22,475 26,990 22,988
3 to 6 months 14,108 18,524 13,886
6 to 12 months 2,298 5,297 6,573
1 year to 2 years 688 964 862
Over 2 years 56 363 45
63,417 78,814 71,470
Our trade receivables increased from approximately HK$63.4 million as at 31
December 2020 to approximately HK$78.8 million as at 31 December 2021 and decreased to
approximately HK$71.5 million as at 31 December 2022. The increase in trade receivables
as at 31 December 2021 were the combined effect of increase in revenue and our clients
required longer time to settle payment as their operations affected by the fourth wave of
COVID-19 pandemic respectively.
The following table sets out our trade receivables turnover days during the Track
Record Period:
Y ear ended 31 December
2020 2021 2022
days days days
Trade receivables turnover days (Note) 124.3 113.3 122.4
Note: Trade receivable turnover days are calculated by dividing the average gross trade receivables
balance (without net of loss allowance) by the revenue for the relevant year multiplied by the
number of days during the year (i.e. 365 days for the years ended 31 December 2021 and 2022, 366
days for the year ended 31 December 2020). Average trade receivables balance is the average of the
beginning and ending gross trade receivables balances (without net of loss allowance) for the
relevant year .
Our trade receivables turnover days of were around 124.3 days, 113.3 and 122.4 days
for the years ended 31 December 2020, 2021 and 2022 respectively. Our trade receivables
turnovers were relatively long since our major clients, which were primarily advertising
agencies, generally require longer period of time to settle invoices which our Directors
consider is in line with industry norm. Our higher average turnover days of trade receivables
were primarily due to our clients requiring longer time to settle payment as their operations
affected by the COVID-19 pandemic.
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Nevertheless, our Directors are of the view that there are no material collectability
issues with the outstanding trade receivables, in particular for those aged over 90 days, as at
each period end during the Track Record Period and as at the Latest Practicable Date,
considering (i) the trade receivables balances were generally due from clients with ongoing
and/or potential future business relationship with our Group including 4A’s advertising
agencies which are top customers of the Group during the Track Record Period with over 10
years business relationship with our Group and which generally take relatively longer time
to settle the trade receivables; (ii) there were no material disagreement or disputes with our
clients on trade receivables; and (iii) these clients had been making continuous payments of
the outstanding invoices to our Group during the Track Record Period. The Directors
consider that our Group made sufficient provision on trade receivables based on expected
credit losses model for each respective year during the Track Record Period in accordance
with relevant accounting principles.
As at the Latest Practicable Date, approximately HK$64.4 million or 84.2% of our
gross trade receivables as at 31 December 2022 have been subsequently settled out of which
(i) approximately HK$34.3 million, representing approximately 93.0% of the gross trade
receivables past due less than 1 month, have been subsequently settled; (ii) approximately
HK$16.4 million, representing approximately 86.2% of the gross trade receivables past due 1
month to 3 months, have been subsequently settled; (iii) approximately HK$7.6 million,
representing approximately 75.9% of the gross trade receivables past due 3 months to 6
months, have been subsequently settled; (iv) approximately HK$4.9 million, representing
approximately 60.6% of the gross trade receivables past due 6 months to 12 months, have
been subsequently settled; and (v) approximately HK$1.3 million, representing
approximately 49.2% of the gross trade receivables past due over 1 year, have been
subsequently settled.
Based on the due diligence works performed, the Joint Sponsors are of the view that
nothing has come to their attention in relation to the recoverability issue of the trade
receivables of the Group during the Track Record Period.
Prepayments, deposits and other receivables
The table below sets forth, as of the dates indicated, our prepayments, deposits and
other receivables:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Prepayments 2,854 6,031 6,727
Deposits and other receivables 3,071 5,380 5,377
5,925 11,411 12,104
Less: non-current portion (2,652) (3,027) (2,960)
Current portion 3,273 8,384 9,144
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Our prepayments mainly include prepayments for information technology services such
as data analytic tools, cloud storage services, prepayment for insurance and production costs.
Deposits and other receivables primarily comprised rental deposits for our office premises
and ancillary facilities such as storeroom and carparks, deposits for utilities and receivables
of other income. The total balance increased from approximately HK$5.9 million as at 31
December 2020 to approximately HK$11.4 million as at 31 December 2021, which was
mainly due to the prepayment for Listing expenses of approximately HK$2.8 million and the
increase in the rental deposit for the new tenancy of our current headquarter of
approximately HK$3.5 million. The total balance slightly increased to approximately
HK$12.1 million as at 31 December 2022, which was mainly due to (i) the increase in the
prepayment for Listing expenses of approximately HK$1.2 million; and (ii) approximately
HK$1.9 million government subsidies under the Employment Support Scheme yet to be
received as at 31 December 2022, offset by the refund of deposit on termination of the
tenancy for NMG Tower of approximately HK$1.5 million.
As at the Latest Practicable Date, approximately 98.4%, 40.7% and 36.1% of deposits
and other receivables as at 31 December 2020, 2021 and 2022 have been subsequently
refunded and settled. The remaining portion of the deposits and other receivables as at 31
December 2021 and 2022 consists of rental deposit and deposits for office utilities and
equipment held by licensors.
Trade payables
Our trade payables primarily consist of outstanding payables for boosting costs on
social media platforms, other production costs and printing costs. In general, our Group is
granted by our suppliers credit period up to 90 days.
As at 31 December 2020, 2021 and 2022, our Group’s trade payables amounted to
approximately HK$8.0 million, HK$5.4 million and HK$6.1 million respectively. The
decrease in our trade payables balance as at 31 December 2021 was mainly due to cessation
of publication of the weekly 3-in-1 Oriental Sunday Magazine while the newly launched
Weekend Weekly x GOtrip Magazine is a quarterly magazine which reduced the printing
cost. The increase in our trade payables as at 31 December 2022 was in line with the
increase in our production costs for the year ended 31 December 2022.
The following table sets forth the ageing of our Group’s trade payables, based on the
invoice date, as at 31 December 2020, 2021 and 2022:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Less than 30 days 5,840 5,052 5,350
30 to 90 days 1,846 321 436
More than 90 days 351 66 321
8,037 5,439 6,107
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The following table sets out our trade payables turnover days during the Track Record
Period:
Y ear ended 31 December
2020 2021 2022
days days days
Trade payable turnover days (Note) 53.6 43.3 33.7
Note: Trade payable turnover days are calculated by dividing the average trade payable balance by the
aggregate of production costs and printing costs for the relevant year and multiply by the number of
days during the year (i.e. 365 days for the years ended 31 December 2021 and 2022, 366 days for
the year ended 31 December 2020). Average trade payable balance is the average of the beginning
and ending balance of trade payables of the relevant year .
Our trade payable turnover days decreased from approximately 53.6 days for the year
ended 31 December 2020 to approximately 43.3 days for the year ended 31 December 2021,
and further decreased to approximately 33.7 days for the year ended 31 December 2022. The
decreasing trade payable turnover days were primarily due to the decreasing printing costs
as a result of the restructuring of our print business which costs generally bear longer credit
period when compared to that of our production costs. Our trade payable turnover days were
generally within the credit terms granted by our suppliers.
As at the Latest Practicable Date, approximately HK$6.1 million, or 99.4%, of our
trade payables as at 31 December 2022 was subsequently settled. Our Directors confirmed
that our Group did not have any material default in payment of trade payables during the
Track Record Period and up to the Latest Practicable Date.
Other payables and accruals
The table below sets forth, as of the dates indicated, our other payables and accruals:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Contract liabilities 2,510 1,506 1,510
Other payables and accruals 18,339 49,766 16,861
20,849 51,272 18,371
Our Group’s other payables and accruals primarily comprised of payables and accruals
for employee benefit expense, payment in advance received from our clients, accrued
production costs, payables and accruals for information technology expenses and
administrative expenses, charges payable to Emperor Group for corporate services, deposits
received from the Distributors, provision of audit fees and sales incentives payables and
accrual for leasehold improvement as at 31 December 2021. Our contract liabilities
represented advances received relating to digital advertising and circulation income. The
decrease in contract liabilities as at 31 December 2021 was mainly because of the decrease
FINANCIAL INFORMATION
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in short-term advances received from customers in relation to the sales/subscription of
magazines and books and digital advertising. Our contract liabilities remain relatively stable
as at 31 December 2022.
Our other payables and accruals increased from approximately HK$18.3 million as at
31 December 2020 to approximately HK$49.8 million as at 31 December 2021, which was
mainly resulted from other payables and accrual for leasehold improvement of approximately
HK$20.8 million for the new lease of our new headquarter and staff costs payable and
accruals of approximately HK$15.3 million.
Our other payables and accruals decreased to approximately HK$16.9 million as at 31
December 2022, which was mainly resulted from (i) decrease in staff costs payable and
accruals to approximately HK$4.5 million as at 31 December 2022 from approximately
HK$15.3 million as at 31 December 2021 and (ii) the settlement of leasehold improvement
of approximately HK$20.8 million which incurred during the year ended 31 December 2021.
FINANCIAL INFORMATION
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NET CURRENT ASSETS
The following table sets out our current assets and liabilities as at the date indicated:
As at 31 December
As at 30
April
20232020 2021 2022
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited)
CURRENT ASSETS
Trade receivables 63,417 78,814 71,470 55,472
Prepayment, deposits and other
receivables 3,273 8,384 9,144 7,747
Tax recoverable – 905 – –
Pledged bank deposit 800 800 800 800
Cash and cash equivalents 31,466 23,525 19,930 16,207
Total current assets 98,956 112,428 101,344 80,226
CURRENT LIABILITIES
Trade payables 8,037 5,439 6,107 4,530
Other payables and accruals 20,849 51,272 18,371 18,938
Interest-bearing bank and other
borrowings 10,318 35,000 21,000 13,000
Lease liabilities 10,460 9,858 10,536 9,653
Tax payable 2,860 1,363 3,594 2,379
Total current liabilities 52,524 102,932 59,608 48,500
Net current assets 46,432 9,496 41,736 31,726
We had net current assets of approximately HK$46.4 million, HK$9.5 million,
HK$41.7 million and HK$40.8 million as at 31 December 2020, 2021 and 2022, and 30
April 2023, respectively.
The explanations of fluctuation of the major items of current assets and current
liabilities for the Track Record Period are set out in the paragraph headed “Discussion on
major items of the consolidated statements of financial position” in this section.
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MAJOR FINANCIAL RATIOS
The following table sets forth certain key financial ratios of our Group during the
Track Record Period:
Y ear ended/As at 31 December
2020 2021 2022
Net profit margin (%) (1) 19.5 13.5 16.4
Return on equity (%) (2) 74.9 75.1 55.1
Return on total assets (%) (3) 33.6 15.3 20.7
Current ratio (times) (4) 1.9 1.1 1.7
Quick ratio (times) (5) 1.9 1.1 1.7
Interest coverage (times) (6) 26.7 14.3 9.3
Gearing ratio (%) (7) 21.5 82.7 31.1
Debt-to-equity ratio (%) (8) N/A 27.5 2.1
Notes:
(1) Net profit margin is calculated based on the net profit for the year divided by total revenue for the
year and multiplied by 100%.
(2) Return on equity is calculated based on the net profit for the year divided by total equity at the end
of the year and multiplied by 100%.
(3) Return on total assets is calculated based on the net profit for the year divided by total assets at the
end of the year and multiplied by 100%.
(4) Current ratio is calculated based on the total current assets at the end of the year divided by the total
current liabilities at the end of the year.
(5) Quick ratio is calculated based on the total current assets (excluding inventories) at the end of the
year divided by the total current liabilities at the end of the year.
(6) Interest coverage is calculated based on the profit before interest and tax for the year divided by
finance costs for the year.
(7) Gearing ratio is calculated based on total debt at the end of the year divided by total equity at the
end of the year and multiplied by 100%. Total debt includes interest-bearing bank and other
borrowings, amounts due to related parties.
(8) Debt-to-equity ratio is calculated based on net debt at the end of the year divided by total equity at
the end of the year and multiplied by 100%. Net debt is defined to include total debt net of cash and
cash equivalents and pledged bank deposit.
FINANCIAL INFORMATION
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Return on equity
Return on equity of our Group maintained at a stable level of approximately 74.9% and
75.1% for year ended 31 December 2020 and 2021 respectively. The return on equity of our
Group decreased to approximately 55.1% for the year ended 31 December 2022, which was
mainly attributable to (i) the decrease in interest-bearing bank and other borrowings by
approximately HK$14.0 million, (ii) decrease in staff costs payable and accruals to
approximately HK$4.5 million as at 31 December 2022 from approximately HK$15.3
million as at 31 December 2021, and (iii) the settlement of leasehold improvement of
approximately HK$20.8 million which was incurred during the year ended 31 December
2021 leading to increase in equity.
Return on total assets
Our return on total assets decreased from approximately 33.6% for the year ended 31
December 2020 to approximately 15.3% for the year ended 31 December 2021, which was
principally due to the combined effect of the decrease in net profit and the increase in total
assets. Our return on total assets increased to approximately 20.7% for the year ended 31
December 2022, which was mainly attributable to the combined effect of the increase in net
profit and the decrease in total assets as discussed.
Current ratio and quick ratio
The current ratio of our Group decreased from approximately 1.9 times as at 31
December 2020 to approximately 1.1 times as at 31 December 2021. The current ratio of our
Group increased to approximately 1.7 times as at 31 December 2022. The decrease in
current ratio as at 31 December 2021 was mainly attributable to the increase in
interest-bearing bank and other borrowings. The increase in current ratio as at 31 December
2022 was mainly attributable to the significant decrease in other payables and accruals and
the decrease in interest-bearing bank and other borrowings. As we do not have inventory, the
quick ratios were the same as the current ratios.
Interest coverage
Our interest coverage decreased from approximately 26.7 times for the year ended 31
December 2020 to approximately 14.3 times for the year ended 31 December 2021, which
was primarily due to the Listing expenses incurred in 2021 and increase in finance cost for
2021. Our interest coverage further decreased to approximately 9.3 times for the year ended
31 December 2022, which was mainly due to increase in finance cost due to increase in
interest amount on interest-bearing bank borrowings during the year.
Gearing ratio
Our gearing ratio increased from approximately 21.5% as at 31 December 2020 to
approximately 82.7% as at 31 December 2021, which was primarily due to the increase in
interest-bearing bank borrowings details of which can be found in the paragraph headed
“Bank borrowings” below. Our gearing ratio decreased to approximately 31.1% as at 31
December 2022, which was mainly attributable to the combined effect of the decrease in
FINANCIAL INFORMATION
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interest-bearing bank borrowings and the significant decrease in other payables and accruals
as at 31 December 2022, which resulted in increase in total equity of the Group as at 31
December 2022.
Debt-to-equity ratio
Debt-to-equity ratio was not applicable to our Group as we had net cash position as at
31 December 2020. As at 31 December 2021, debt-to-equity ratio of approximately 27.5%
was primarily attributable to the drawdown of HK$35.0 million from a revolving banking
facility during the year. As at 31 December 2022, the debt-to-equity ratio of approximately
2.1% was primarily attributable to the decrease in interest-bearing bank and other
borrowings by approximately HK$14.0 million as discussed above, which in turn reduced
the net debt of the Group.
INDEBTEDNESS
The table below sets forth, as of the dates indicated, our indebtedness:
As at 31 December
As at 30
April
20232020 2021 2022
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited)
Bank borrowings repayable within one year
or on demand*
– secured – 35,000 15,000 7,000
– unsecured 10,318 – 6,000 6,000
Amounts due to related
companies – unsecured 1,485 1,431 1,234 870
11,803 36,431 22,234 13,870
Lease liabilities 22,943 72,550 63,492 59,812
Total 34,746 108,981 85,726 73,682
* The relevant agreements contain repayment on demand clauses giving the respective lenders the
unconditional rights to call in the respective borrowings at any time and, therefore, for the purpose of
the above analysis, the total amount is classified as “on demand”.
Bank borrowings
During the Track Record Period, we obtained certain short-term bank borrowing
facilities from certain banks in Hong Kong. As at 31 December 2020, the Group’s bank
borrowings bore interest at 1.45% per annum over HIBOR. The short-term bank borrowing
facilities were secured by corporate guarantees provided by NMG.
FINANCIAL INFORMATION
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As at 31 December 2020, the Group had aggregate bank borrowing facilities amounting
to approximately HK$15.5 million, of which an aggregate amount of approximately
HK$10.3 million was utilised as at 31 December 2020. During the year ended 31 December
2021, the Group’s bank borrowings drawn under the short-term bank borrowing facilities
were fully repaid.
In June 2021, we obtained an uncommitted revolving bank loan facility with a facility
limit of HK$35.0 million from a bank (the “Bank”) in Hong Kong for working capital
purposes, which was secured by a corporate guarantee of our Company and certain trade
receivables of our Group. As at 31 December 2021, the bank loans drawdown under the
revolving bank loan facility carried an interest rate at the higher of the Bank’s Hong Kong
dollar best lending rate or its cost of funds. During the year ended 31 December 2022, the
Group’s bank borrowings drawn under the revolving bank loan facility were fully repaid.
Upon the expiry of the above revolving bank loan facility, we obtained another
uncommitted revolving loan facility from the Bank in December 2022 with a facility limit of
HK$30.0 million, of which the amount utilised was HK$15.0 million and HK$7.0 million as
at 31 December 2022 and 30 April 2023 respectively. The revolving loan facility is secured
by a corporate guarantee of our Company and certain trade receivables of the Group. The
loan drawdown under this revolving bank loan facility bears interest at 4.5% per annum over
1-month HIBOR or 4.5% per annum over the Bank’s cost of funds, whichever is higher.
Further details of this uncommitted revolving bank loan facility are set forth in note 22 of
Section II of the Accountants’ Report set forth in Appendix I to this prospectus. As at the
Latest Practicable Date, principal amount outstanding under this facility was HK$2.0
million, and, subject to the Bank’s customary overriding right of withdrawal, the maximum
amount of this uncommitted revolving bank loan facility remained available for drawing
amounted to HK$28.0 million.
In the last quarter of 2022, we obtained a term loan facility (the “Facility”) from a
bank with a facility limit of HK$6.0 million, the whole of which was utilised as at 31
December 2022. The Facility is guaranteed by the Company for an unlimited amount, and a
deed of undertaking was executed by AY Holdings that in the event the Company does not
become listed on the Stock Exchange within eleven months of the acceptance of the Facility
by the Group, AY Holdings shall provide or procure sufficient fund to the Group for
repayment of all outstanding amount under the facility in full. The loan drawdown under the
Facility bears interest at 2.75% per annum over HIBOR and is repayable in November 2023.
Further details of this term loan facility are set forth in note 22 of Section II of the
Accountants’ Report set forth in Appendix I to this prospectus.
Amounts due to related companies
Amounts due to related companies amounted to approximately HK$1.5 million, HK$1.4
million, HK$1.2 million and HK$0.9 million as at 31 December 2020, 2021, 2022, and 30
April 2023, respectively. The amounts due to related companies are non-trade related,
unsecured, non-interest bearing and repayable on demand. Such amounts will be settled prior
to the Listing.
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Lease liabilities
Our lease liabilities represented the present value of the lease payments to be made
over the lease terms of our respective tenancy agreements for our office premises and certain
equipment, which were discounted using our Group’s incremental borrowing rate at the lease
commencement date.
In April 2021, Winning Treasure served on us an early termination notice pursuant to
the terms of the corresponding tenancy agreement terminating the tenancy on 31 January
2022. The increase in lease liabilities of our Group in 2021 was mainly attributable to the
combined effect of the commencement of new lease in relation to the relocation of our
headquarter and the modification and payments of lease liabilities in respect of existing
leases.
Our Directors confirm that there had been no material delay or default in the
repayment of our borrowings or material non-compliance with the terms and provisions
contained in our Group’s bank and other borrowing facilities throughout the Track Record
Period and up to the Latest Practicable Date.
Contingent liabilities
As at 31 December 2020, 2021, 2022, and 30 April 2023, our Group did not have any
significant contingent liabilities.
Disclaimer
Save as otherwise disclosed under section headed “INDEBTEDNESS” and apart from
intra-group liabilities and normal trade payables, our Group did not have any outstanding
loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other
similar indebtedness, liabilities under acceptances (other than normal trade bills) or
acceptance credits, debentures, mortgages, charges, lease liabilities, guarantees or other
material contingent liabilities as at 30 April 2023, being the latest practicable date for the
preparation of the indebtedness statement in this prospectus.
Material indebtedness change
Our Directors have confirmed that there was no material adverse change in our
indebtedness, capital commitment and contingent liabilities since 30 April 2023, being the
latest practicable date for determining our indebtedness, and up to the date of this
prospectus. Our Directors have confirmed that as at the Latest Practicable Date, our Group
did not have any plans to raise any material debt financing shortly after Listing.
DIVIDENDS
Dividends of approximately HK$20.8 million, HK$34.0 million and HK$12.0 million
were declared by our Group for the years ended 31 December 2020, 2021 and 2022
respectively, which had been fully settled. Dividends of approximately HK$10.0 million was
also declared by our Group in March 2023, which had also been fully settled.
FINANCIAL INFORMATION
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The declaration and payment of dividends during the Track Record Period and prior to
the Listing should not be considered as a guarantee or indication that we will declare and
pay dividends in such manner in the future, or will declare and pay any dividends in the
future at all. Currently, our Board has absolute discretion as to whether to recommend any
dividend payment for any financial year end and if any, the amount of dividend and the
means of payment, and we do not have a predetermined dividend distribution ratio. Such
discretion is subject to the applicable laws and regulations including the Cayman Companies
Act and the Articles which also requires the approval of our Shareholders. The amount of
any dividends to be declared and paid in the future will depend on, amongst other things, (i)
general financial conditions; (ii) actual and future operations and liquidity positions; (iii)
future cash requirements and availability; (iv) restrictions on payment of dividends that may
be imposed by our Group’ s lenders; (v) general market conditions; and (vi) any other
factors which our Board may deem appropriate at such time.
DISTRIBUTABLE RESERVE
The Cayman Companies Act provides that share premium account of an exempted
company incorporated in the Cayman Islands, such as our Company, may be applied in such
manner as it may from time to time determine, subject to the provisions, if any, of its
Memorandum and Articles of Association, provided that no distribution or dividend may be
paid to its members out of the share premium account unless, immediately following the
date on which the distribution or dividend is proposed to be paid, such company shall be
able to pay its debt as they fall due in the ordinary course of business.
CAPITAL COMMITMENTS
Our Group did not have any material capital commitment as at 31 December 2020,
2021 and 2022, and as at the Latest Practicable Date.
CAPITAL EXPENDITURE
Historical capital expenditures
During the Track Record Period, our capital expenditure mainly related to leasehold
improvements, furniture, fixtures and equipment acquired for our offices. For the years
ended 31 December 2020, 2021 and 2022, our total capital expenditures in relation to
addition of leasehold improvements, furniture, fixtures and equipment amounted to
approximately HK$0.2 million, HK$25.3 million and HK$1.6 million, respectively. The
capital expenditure of the HK$25.3 million incurred for the year ended 31 December 2021
was for our office relocation and enhancing our information technology system. We
principally funded our capital expenditures through internally generated funds and bank
borrowings during the Track Record Period.
FINANCIAL INFORMATION
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Planned capital expenditures
We intend to apply part of the net proceeds from the Share Offer to, among others, (i)
develop the new platforms, including the APS Platform, PSS Platform and the E-Commerce
Solution Platform; and (ii) construct an in-house media content management platform, with
estimated capital expenditures of approximately HK$12.4 million and HK$11.9 million,
respectively.
Save for the planned capital expenditures as disclosed above and in “Future Plans and
Use of Proceeds” in this prospectus, the remaining capital expenditure for our office
relocation and enhancing our information technology system of approximately HK$2.3
million and the additions of leasehold improvements, furniture, fixtures and equipment and
intangible assets necessary for our business operations which will be made by our Group
from time to time, our Group had no material planned capital expenditures as at the Latest
Practicable Date.
PROPERTY INTERESTS
As at the Latest Practicable Date, we did not own any property and all of our places of
operations are leased properties. For details of our leased properties, please refer to
“Business — Properties Leased by Our Group” in this prospectus.
RELATED PARTY TRANSACTIONS
During the Track Record Period, we had entered into certain related party transactions,
details of which are set out in note 28 to the Accountants’ Report. Our Directors confirmed
that during the Track Record Period, these related party transactions were conducted on
arm’s length basis, normal commercial terms and were no less favourable to our Group than
terms available from Independent Third Parties which are considered fair and reasonable.
Having considered that the amounts of these related party transactions as compared to
the revenue generated by our Group, our Directors are of the view that the aforesaid related
party transactions did not distort our financial results during the Track Record Period or
cause our Track Record Period results to be unreflective of our future performance. For
details of related party transactions that will continue after Listing, please refer to
“Connected Transactions” in this prospectus.
OFF-BALANCE SHEET TRANSACTIONS
Our Directors confirmed that our Group did not have any material off-balance sheet
transactions as at 31 December 2020, 2021 and 2022.
FINANCIAL INFORMATION
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QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
Liquidity risk
Our Group recorded net cash inflows from its operating activities during the Track
Record Period which is mainly because our Group was able to maintain a positive profit
before tax level. Our Directors will closely monitor current and expected liquidity
requirements to enable our Group with sufficient cash resources to meet its short and long
term requirements associated with its financial liabilities.
Credit risk
The credit risk of our Group’s financial assets, which comprises trade receivables,
financial assets included in prepayments, deposits and other receivables, and cash and cash
equivalents, arises from default of the counterparty, with a maximum exposure equal to the
carrying amounts of these instruments.
Fluctuation in production costs and employee benefit expenses
The following sensitivity analysis illustrates the impact of hypothetical fluctuations of
our production costs and printing costs and employee benefit expense (being the major
components of our financial statements) on our profit before tax during the Track Record
Period.
The table below sets forth the sensitivity analysis on the impact of hypothetical
fluctuations in production costs and printing costs on our profit before tax if our production
costs and printing costs had been 5%, 10%, 15% higher or lower for the Track Record
Period, assuming all other variables remained constant:
Y ear ended 31 December
2020 2021 2022
Profit
before tax
Change in
profit
before tax
Profit
before tax
Change in
profit
before tax
Profit
before tax
Change in
profit
before tax
HK$’000 % HK$’000 % HK$’000 %
Change in production
costs and printing
costs
15% 38,344 (17.9) 33,603 (20.2) 37,468 (20.0)
10% 41,128 (11.9) 36,442 (13.5) 40,594 (13.3)
5% 43,912 (6.0) 39,281 (6.7) 43,719 (6.7)
0% 46,696 – 42,120 – 46,844 –
-5% 49,480 6.0 44,959 6.7 49,969 6.7
-10% 52,264 11.9 47,798 13.5 53,094 13.3
-15% 55,048 17.9 50,637 20.2 56,220 20.0
FINANCIAL INFORMATION
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The table below sets forth the sensitivity analysis on the impact of hypothetical
fluctuations in employee benefit expenses on our profit before tax if our employee benefit
expenses had been 5%, 10%, 15% higher or lower for the Track Record Period, assuming all
other variables remained constant:
Y ear ended 31 December
2020 2021 2022
Profit
before tax
Change in
profit
before tax
Profit
before tax
Change in
profit
before tax
Profit
before tax
Change in
profit
before tax
HK$’000 % HK$’000 % HK$’000 %
Change in employee
benefit expense
15% 31,775 (32.0) 26,427 (37.3) 32,641 (30.3)
10% 36,749 (21.3) 31,658 (24.8) 37,376 (20.2)
5% 41,722 (10.7) 36,889 (12.4) 42,110 (10.1)
0% 46,696 – 42,120 – 46,844 –
-5% 51,670 10.7 47,351 12.4 51,578 10.1
-10% 56,643 21.3 52,582 24.8 56,312 20.2
-15% 61,617 32.0 57,813 37.3 61,047 30.3
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that there has been no material adverse change in the financial
or trading position or prospects of our Group since 31 December 2022 (being the date to
which the latest audited consolidated financial statements of our Group were made up) and
up to the date of this prospectus, and there had been no event which would materially affect
the information shown in the Accountants’ Report as set out in Appendix I to this
prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there is no circumstance
that would give rise to a disclosure requirement under Rule 13.13 to 13.19 of the Listing
Rules.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
Please see “A. Unaudited pro forma statement of adjusted consolidated net tangible
assets” in Appendix II to this prospectus for further details.
LATEST DEVELOPMENT SUBSEQUENT TO TRACK RECORD PERIOD
Please see “Summary — Latest development subsequent to the Track Record Period” in
this prospectus for details.
FINANCIAL INFORMATION
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FUTURE PLANS
Please refer to the section headed “Business – Our Strategies” in this prospectus for a
detailed description of our business strategies and future plans.
REASONS FOR THE LISTING
Our Directors believe that the Listing will provide our Group with financial resources
for the execution of our business strategies and future plans as stated in the section headed
“Business – Our Strategies” and strengthen our competitiveness in the market.
As disclosed in the section headed “Business” of this prospectus, our Group has now
fully transformed into a leading player in the digital media landscape ranking, according to
the Euromonitor Report, second amongst online advertising companies in Hong Kong in
terms of revenue for three consecutive years of 2020, 2021 and 2022. When NMG and its
subsidiaries first became listed on the Stock Exchange in 2008 under New Media Group
Holdings Limited, they were engaged in the traditional print media business. Even by the
time CEG disposed of its entire interest of the media segment under NMG and its then
subsidiaries to AY Discretionary Trust in September 2017, details of which are set out in the
section headed “History and Development – Our history” of this prospectus, revenue from
digital business only comprised less than 50% of total revenue.
The digital advertising market is a fast-changing market with fierce competition. Our
business model thrives on our ability to attract audience to our media platforms, thereby
enabling us to monetise the traffic and viewership generated therefrom by offering
advertising solutions through our media platforms. We believe that being able to identify and
capture rising trends in a timely manner would solidify and expand our market share.
According to the Euromonitor Report, the total revenue of the e-Commerce market of Hong
Kong has increased from HK$85.4 billion in 2018 to HK$183.6 billion in 2022, with a
CAGR of 21.1% and that in view of the rapid growth in the e-commerce market, advertising
industry players have allocated more resources on their online advertising solutions and
capability, in order to help their client companies better reach their targeted consumers
through online and social media marketing campaigns. The total spending on advertisements,
as a result, has moved towards online advertising away from traditional media advertising.
In comparison to online media, traditional media such as television and radio are expected to
recorded a negative CAGR of 0.1%, and print media is expected to record a negative CAGR
of 5.0% over the forecast period. It is expected that the forecasted 7.3% CAGR of the
advertising industry is driven by the demand shift from traditional media to online media.
The Company is well aware of this development and intends to ride on the trend and capture
such growth by expanding the Group’s capabilities through development of new platforms
and acquisition of related platforms. Our Directors are of the view that such expansion
should be executed in a timely manner due to the dynamic nature of the advertising industry
and that the earlier the Group makes the initiative, the more likely it is able to capture the
most market opportunities by harnessing the network effect with the Group’s existing
platforms. Our Directors believe that the Listing will be the most effective way to strengthen
the liquidity level of our Group, thus enabling our Group to promptly execute its expansion
plan and maintain the Group’s frontrunner advantage and scale our Group’s business.
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Some market players of smaller size have innovative ideas yet lack the resources to
materialise their ideas, sustain or expand their operations to maximise the revenue which
may be generated through their ideas. We believe that acquiring or establishing strategic
alliances with these market players will generate synergistic effect and expand our media
network and potential for monetisation. The acquisition of dedicated platforms specifically
developed for particular purposes and/or markets would enable us to gain deeper insights
into certain consumer segments not currently covered by our platforms and hence enhance
our advertising solutions and services.
On the other hand, in light of the trend of digitalisation across different industries, our
Group also intends to invest further in our technology infrastructure to increase our
productivity and capture further market opportunities. Our Group intends to develop three
new platforms, one of which will feature an automated advertisement placement system to
streamline our production flow; whereas the other two will be incorporating machine
learning models to enhance our data analytic capacity, thereby gather further market
information and utilise the data available to us to enhance our segment marketing
capabilities and effectiveness of our advertising solutions. To support the development of our
new platforms, we would need to have new project teams with relevant skill sets for their
development.
Our Directors consider a higher liquidity level will enable our Group to swiftly
implement such strategy and capture the potential market ahead of our competitors, thereby
maintaining our frontrunner advantage which is of paramount importance in our industry. We
have historically funded our liquidity and capital requirements primarily from cash inflows
from our operating activities, short-term bank borrowings and unsecured interest bearing
loan from NMG Investment. All loans from NMG Investment have been fully repaid during
the year ended 31 December 2020. In June 2021, we obtained a revolving banking facility
with a facility limit of HK$35.0 million from a bank in Hong Kong for working capital
purpose, which have to be secured by all accounts receivables of the principal operating
subsidiary of our Group in addition to a corporate guarantee of our Company. Upon renewal
of such facility in December 2022 the facility amount was reduced to HK$30.0 million and
the interest rate has been increased. This facility is to expire in December 2023 and
HK$28.0 million remained available for drawing as at the Latest Practicable Date. In
January 2022 we obtained from another bank aggregate facilities of HK$15.7 million,
capped at 150% of tax payable amount as shown in the respective tax demand notes of three
of our subsidiaries, which have a maturity period of one year only and have been fully
repaid by November 2022. Although we were able to obtain general banking facilities of
HK$6.0 million from another bank in November 2022, secured by the corporate guarantee of
our Company, it is a condition of such facilities that it must be fully repaid immediately if
our Company does not become listed on the Stock Exchange within a certain period. As at
the Latest Practicable Date, such general banking facilities have been fully utilised. Our
Directors believe that without a listing status, it would be difficult for us to obtain additional
debt financing of significant amount without assets security and/or support provided by our
Controlling Shareholders. In view of the nature of our Group’s business which is light in
assets, our Directors believe that debt financing in the amount sufficient to finance our
business strategies and future plans as envisaged in the section headed “Business – Our
Strategies” in this prospectus would be infeasible as we do not have material fixed assets or
other current assets which we can provide as security for such debt financing. Furthermore,
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if the Company is to raise additional funds by way of debt financing, the Group will have to
incur interest and other finance costs such as commitment fee and front end fee for raising
and maintaining the loan and also be subject to various covenants and limitations under the
debt instruments. Debt financing in the amount of the net proceeds of the Share Offer will
also expose the Group to high gearing ratio, and the Group’s financial performance and
liquidity will be negatively affected due to principal and finance costs payment. We
therefore believe the Share Offer will serve as an opportunity to strengthen our ability to
capture business opportunity for our expansion. The Listing will strengthen our Group’s
financial position such that we have resources to sustain our Group’s organic growth,
improve our product offerings, thereby retain existing clients and attract new clients.
Furthermore, the Listing will provide us with a platform to raise funds in future for our
further expansion as and when suitable opportunities arise.
In addition, our Directors believe that a listing on the Stock Exchange will enhance our
corporate image and raise brand awareness, thereby increasing our market competitiveness.
We believe that the public listing status will further enhance our corporate profile and will
be a complimentary advertising for our Group to potential clients on both local and
international level. We believe that the Listing will strengthen our internal control and
corporate governance practices, which in turn would increase our clients’ and suppliers’
confidence in us.
The Directors have considered that the cost effectiveness of equity financing by way of
the Share Offer as compared to debt financing in light of the amount of Listing expenses to
be incurred. The Directors are of the view that the listing expenses to be incurred for the
Share Offer is one-off in nature, but the Group can utilise the Listing platform from time to
time for equity fund raising and mergers and acquisitions by the issue of equities in future,
together with all other benefits inherent for a listing platform as mentioned above. The
Directors therefore consider, and the Joint Sponsors agree, that the cost effectiveness of the
Share Offer should not be assessed only by comparing the Listing expenses with the size of
the proceeds to be raised initially.
USE OF PROCEEDS
The net proceeds from the Share Offer (after deducting underwriting fees and other
estimated related costs payable by us for the purposes of the Share Offer and assuming an
Offer Price of HK$0.88 per Share, being mid-point of the indicative Offer Price range) are
estimated to be approximately HK$95.0 million. Our Group currently intends to apply the
net proceeds as follows:–
– approximately HK$25.0 million, representing approximately 26.3%, of the net
proceeds is expected to be to be applied for future mergers and acquisitions and/
or strategic alliances with other media or e-Commerce market players to
accelerate our Group’s growth beyond organic.
As mentioned in the paragraph headed “Reasons for the Listing” of this section,
given the dynamics and competitiveness of the digital advertising market, in order
to stay relevant, expand our digital presence swiftly and enhance the effectiveness
FUTURE PLANS AND USE OF PROCEEDS
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of our advertising solutions, thereby solidifying our market position, we intend to
acquire and/or enter into strategic alliance with small to medium sized platforms,
which are dedicated platforms specifically developed for particular purposes as
mentioned below, with good traffics, strong market presence and usage. Some
market players of smaller size have innovative ideas yet lack the resources to
materialise their ideas, sustain or expand their operations to maximise the revenue
which may be generated through their ideas. We believe that acquiring or
establishing strategic alliances with these market players will generate synergistic
effect and expand our media network and potential for monetisation. We have not
identified specific targets as at the Latest Practicable Date but we are of the view
that the fields of job searching and posting, product and service listing and price
comparison, and businesses related to purchasing and ordering facilitating
platforms offer the most potential for our horizontal growth. For example, product
and service listing and price comparison platforms and purchasing and ordering
facilitating platforms strive to provide information for audience to make better
transactions online such as product listing and knowledge, price comparisons and
special offers. Audience looking for specific products and services when visiting
these platforms usually has high intent to make purchases. These platforms would
therefore enable us to gain deeper insights into certain consumer segments and
their behaviour, thereby enhancing content creation and our ability to provide
effective advertising solutions and would provide great value for our segment
marketing, not only within that particular platform, but through our whole media
network. On the other hand, currently our Group’s media platforms offer contents
mostly concerning lifestyles and economics and finance. The addition of job
searching and posting platforms would represent horizontal expansion of our
media platforms as it covers an additional area of interest with distinct content
pillars and expand the diversity of potential advertisers. Accordingly, our
Directors believe that our initiatives in the acquisitions of and/or alliances with
these platforms would enhance our Group’s business in the near term and provide
great value for our Group.
Euromonitor has conducted custom research and identified over 20 potential
merger and acquisition targets as described above available in the Hong Kong
market in 2022, and the numbers of these platforms are expected to grow
alongside the rapid-growth in the e-Commerce market which would drive the
demand for these platforms over the forecast period, resulting in more potential
targets being available.
We intend to acquire majority interest in two to three companies located in Hong
Kong and targeting audience in Hong Kong, which have already attained
breakeven or generated small profit with the valuation of the target business
ranging between HK$8 million to HK$13 million. We believe that it would be
optimal to acquire two to three such platforms to enable the Group to quickly
assimilate them to capture in the near term the forecast growth in the digital
advertising industry, and the budget allocated for this purpose is based on the
estimated initial costs needed for establishing platforms of similar maturity. We
expect to invest between HK$8 million to HK$13 million for each acquisition
depending on the valuation of the actual target and the percentage of the stake to
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be acquired, and as such we intend to allocate approximately HK$25 million for
such acquisitions, and we intend to achieve an investment payback period of three
to five years and a rate of return of twenty percent (20%) on average. We intend
to complete the acquisitions within 2 years from the Listing. The actual timing of
the use of the proceeds will depend on the availability of suitable targets and
progress of the relevant negotiations.
– as to approximately HK$42.2 million, representing approximately 44.4%, of the
net proceeds is expected to be used for expanding and enhancing our product
lines and enhancing our data collection and analytical capabilities which we
believe will enable us to deepen our penetration into our existing clientele and
expanding our clientele, through launching of the three platforms as detailed
below:
(i) APS Platform
The APS platform is proposed to be launched as an advertisement placement
platform designed for SMEs featuring self-service direct booking interfaces
enabling SMEs to make reservation of advertisement slots and inventories
among our Digital Media Platforms, primarily accessible through its website
and app with different user interfaces for advertisers and audience.
Furthermore, by adopting automation, where sale of advertisement
inventories will be driven automatically from the platform, our production
flow will be streamlined thereby not only saving our Group inordinate
human resources from manual advertisement placement activities but also
better prepare our Group for expanding business volume.
Benefit of the APS Platform
According to the statistics of the Trade and Industry Department of the Hong
Kong Government, as of December 2021, there were over 340,000 SMEs in
Hong Kong which number rose to 350,000 in November 2022, which
accounted for more than 98% of the total number of enterprises. We see the
opportunities to serve this segment, as we discern SME owners’ advertising
needs and their concern over the lack of financial resources for advertising
campaigns. With the technology-driven automation in advertisement
placement through our APS Platform, advertisers will be able to utilise our
products and services at more affordable prices. According to the
Euromonitor Report, expanding ownership in platforms that cater to SMEs
advertising needs would help acquirers to strengthen their business reach to
the vast number of enterprises locally, hence drive further growth
opportunities and retain market share in the dynamic market of Hong Kong,
and that with the latest trend of online advertising and technology-driven
automation function, a digital advertising placement platform would also
enable a cost-effective way to drive the sales of advertisement inventories
online.
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Planned use of net proceeds for the APS Platform
It is expected that as to approximately HK$12.2 million, representing
approximately 12.9%, of the net proceeds will be applied for the
development and initial marketing of the APS Platform, currently planned to
be utilised within 18 months of Listing, where:
 as to approximately HK$3.3 million is intended to be applied as capital
expenditure for engaging third party vendor to develop the information
technology infrastructure required for the APS platform, including a
web base system with app audience interface;
 as to approximately HK$4.7 million is intended to be applied for staff
expenses for the initial development and marketing of the APS Platform
including a team leader managing daily operation, driving product
development, revenue growth and delivering the profit and loss; a
product team to develop product features and programmes to drive
audience engagement and sales opportunities comprising a team head,
an app manager and an UX designer; as well as a sales team to deliver
the revenue target, explore new business opportunities and provide
client services to advertisers comprising a team manager and three
telesales; and
 as to approximately HK$4.2 million is intended to be applied for
marketing expenses for the promotion of the APS Platform;
Implementation timeline, marketing plan and expected revenue generation
We will enter into contract with third party vendor for setting up the
information technology infrastructure required for the APS Platform as soon
as practicable after Listing, which set up is expected to be completed in the
fourth quarter of 2023. We planned to commence marketing of the platform
to SMEs in the fourth quarter of 2023 after the hiring of the sales manager
and one or more telesales in the fourth quarter of 2023, and the APS
Platform is expected to commence operation in the first quarter of 2024.
We planned to market the APS Platform initially to SMEs who are our
existing clients or engaged our services before. To drive awareness of the
platform, we will promote it on our own Digital Media Platforms, and other
promotion plans for 2024 and 2025 include industry seminars and placing
advertisements on Google Display Network. We also plan to place
advertisement on app stores to promote the app. We target to acquire 6,500
SMEs, representing approximately 1.9% of total number of SMEs in Hong
Kong, as users of the APS Platform by 2025. As we have not introduced the
APS Platform to our existing clients or market this platform yet, we have
not received any secured order, quotation request or indication of interest for
services on this platform. Nevertheless, our SME clients have expressed the
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need for more affordable advertising solutions for SMEs to suit their
financial resources, we believe that the APS Platform would be able to
capture the opportunities from this segment of potential advertisers.
We expect to generate revenue from the APS Platform through digital
advertising service fees from display advertisement inventories on the APS
Platform, and to generate revenue from the SMEs listed on the platform by
way of fixed fee on directory listing and commission based revenue on
purchases, leads or clicks driven from the APS Platform to the platforms of
the SMEs listed.
(ii) PSS Platform
Our Group discerns the market opportunity for a platform providing updated
information on finance and banking information. In mid-2020 we set up the
structure for a new platform under the name of “Jetsobee” with Facebook
page, official website and mobile app, but so far with minimal content. We
plan to dedicate resources to develop the digital media platforms of Jetsobee
positioning as a personal smart spending platform providing updated
information and recommendations on financial tools and choices.
Benefit of the PSS Platform
As disclosed in the section headed “Business – Suppliers and Clients –
Clients”, our Group has existing clients engaging in banking, insurance and
investment services accounting for 14.2%, 17.9% and 18.3% of our total
non-programmatic advertising revenue for the financial years ended 31
December, 2020, 2021 and 2022 respectively. On the other hand, our Group
has been providing vast content to audience on smart spending over a wide
spectrum of products and services through our different media brands. We
see a huge demand for reliable recommendation on how to spend wisely.
According to the Euromonitor Report, the ongoing boom in the new
economies and digital payment capabilities as well as the e-commerce
market fuels the demand for such platforms. Given the rapid growth in
e-Commerce players and therefore the number of products and services
available online, the amount of time a consumer needs to allocate to research
the best-fit products and services can be disproportionally high compared to
the value of the goods and services itself. Platforms that provide updated
information and recommendations on products and services of specific
industry segments with review consolidation functions would be useful to
consumers in helping them to make better purchasing decisions and,
according to the Euromonitor Report, would be in demand especially given
the busy lifestyle of people in Hong Kong. The establishment of the PSS
Platform would enable us to provide more focused and dedicated content
pillars for this area, under which we will be able to offer customised
recommendations to our audience, offer them with tailor-made contents and
thus increase user engagement; on the other hand, we will also be able to
increase the conversion rate of our clients’ advertisements by enhancing
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precision in identifying the potential customers for advertisers in this area.
Our Group believes that the “Jetsobee” platform will help deepen our
penetration in such sectors.
Planned use of net proceeds for the PSS Platform
It is expected that as to HK$13.8 million, representing 14.4%, of the net
proceeds will be applied for the development and initial marketing of the
PSS Platform, currently planned to be utilised within 18 month of Listing,
where:
 as to approximately HK$3.3 million is intended to be applied as capital
expenditure for engaging third party vendor to enhancement of the
information technology infrastructure for the PSS Platform;
 as to approximately HK$5.9 million is intended to be applied for staff
expenses for development and marketing of the PSS Platform including
a team leader for managing daily operation, driving product
development, revenue growth and delivering the profit and loss; a
product team to develop product features and programmes to drive
audience engagement and sales opportunities comprising a team head,
an app manager, an UX designer, a product executive and a data
analyst; a content manager and a content executive to be responsible
for content direction, creation and adaptation on the platform, such as
to drive downloads, traffic and audience engagement; as well as a
business development manager being responsible for delivering the
revenue target, driving revenue growth and exploring new business
opportunities through partnering up with our Group’s existing sales
team; and
 as to approximately HK$4.6 million is intended to be applied for the
marketing expenses for the promotion of the PSS Platform.
Implementation timeline, marketing plan and expected revenue generation
We will enter into contract with third party vendor for setting up the
information technology infrastructure required for the PSS Platform as soon
as practicable after Listing, which set up is expected to be completed in the
fourth quarter of 2023. We planned to commence marketing of the platform
in the fourth quarter of 2023 after the hiring of the business development
manager in the fourth quarter of 2023, and the PSS Platform is expected to
commence operation in the first quarter of 2024.
We planned to market the PSS Platform to advertisers leveraging on
our existing sales and clients networks, and to drive awareness of the
platform in 2024 and 2025 mainly through our own Digital Media Platforms,
hosting roadshows and placing advertisements on Google Display Network.
As we have not introduced the PSS Platform to our existing clients or
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market this platform yet, we have not received any secured order, quotation
request or indication of interest for services on this platform. Our key
advertisers included licenced banks, credit card companies and insurance
companies. As mentioned in the section “Business – Suppliers and Clients”
above, our Business Development team maintains contacts with key clients
to understand their needs, and we are confident that a focused platform such
as the PSS Platform would be well-received by advertisers in the financial
and investment services segments. We also plan to promote the app by
placing advertisements on app stores and target to acquire approximately
455,000 downloads of the app by 2025.
We expect to generate revenue from the PSS Platform through digital
advertising service fees from both display advertisement inventories on the
PSS Platform and integrated digital advertising services on the platform.
(iii) E-Commerce Solution Platform
In light of the increasing reliance on technologies, our Group believes that
data analytics would become a cornerstone of our business infrastructure.
According to the Euromonitor Report, the rise of the e-commerce market and
social media networks in Hong Kong resulted in a growing number of
internet users from 2018 to 2022 at a CAGR of 1.6% and is expected to
grow at a CAGR of 1.0% from 2023 to 2027. The growing number of
internet users means that the potential and target customers for advertisers to
reach over online advertising will also continue to grow, which also
increases the overall difficulty of analysing consumer behaviour. We
therefore propose to launch the E-Commerce Solution Platform in order to
enhance our capabilities in collecting data with respect to consumer spending
on e-commerce, increasing the varieties and dimensions of the relevant data
we can collect, to store and to analyse these data. The E-Commerce Solution
Platform will be under one of our existing media brands, incorporating a
front-end mobile app with implementation of a loyalty programme for its
subscribers which will encourage them to record their spending on
e-commerce through incentives such as bonus points, gift redemption and
other promotions, the creation of a back-end data lake on such data collected
and machine learning data modelling.
Benefit of the E-Commerce Solution Platform
According to the Euromonitor Report, e-commerce solutions platforms
providing data collection and analytic solutions for e-commerce players to
understand their current performance and targeted audience’s behaviour will
enhance strategic marketing decision-making process. With the data collected
on the E-Commerce Solution Platform, we will be able to gather current
information on consumer’s actual spending on e-commerce, such that we can
better understand consumer’s spending behavior and consumption pattern,
thus improve the accuracy of our strategic marketing solutions by having a
better grasp of consumer preference are on e-commerce spending. In light of
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the swift development of the e-commerce market in Hong Kong driven by
both digitalisation and the COVID-19 pandemic, introduction of an
e-commerce solutions platform would help us ride on both the swift growth
of the online advertising industry propelled by the growth of the e-commerce
market in Hong Kong. The data collected through the E-Commerce Solution
Platform will offer great value to the Group by enhancing the performance
of our segment marketing solutions and create complimentary and synergistic
effect with our existing advertising business.
Planned use of net proceeds for the E-Commerce Solution Platform
It is expected that as to approximately HK$16.3 million, representing
approximately 17.1%, of the net proceeds will be applied for the
development and initial marketing of the E-Commerce Solution Platform,
currently planned to be utilised within 18 months of Listing, where:
 as to approximately HK$5.8 million is intended to be applied for
capital expenditure for engaging third party vendor to develop the
information technology infrastructure of the platform;
 as to approximately HK$5.9 million is intended to be applied for staff
expenses for the initial development and marketing of the E-Commerce
Solution Platform including a team leader for managing daily operation,
driving product development, revenue growth and delivering the profit
and loss; a product team to develop product features and programmes
to drive audience engagement and sales opportunities comprising a
team head, an app manager, an UX designer, a product executive and a
data analyst; a content manager and a content executive to be
responsible for content direction, creation and adaptation on the
platform, such as to drive downloads, traffic and audience engagement;
as well as a business development manager being responsible for
delivering the revenue target, driving revenue growth and exploring
new business opportunities through cooperating with our Group’s
existing sales team; and
 as to approximately HK$4.6 million is intended to be applied for
marketing expenses for the promotion of the E-Commerce Solution
Platform.
Implementation timeline, marketing plan and expected revenue generation
We will enter into contract with third party vendor for setting up the
information technology infrastructure required for the E-Commerce Solution
Platform as soon as practicable after Listing, which set up is expected to be
completed in the fourth quarter of 2023. We planned to commence marketing
of the platform in the fourth quarter of 2023 after the hiring of the business
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development manager in the fourth quarter of 2023, and the E-Commerce
Solution Platform is expected to commence operation in the first quarter of
2024.
As the E-Commerce Solution Platform will be under one of our
existing media brands, incorporating a front-end mobile app with
implementation of a loyalty programme for subscribers, we planned to
market the E-Commerce Solution Platform to advertisers leveraging on our
existing sales and clients networks, to seek partnerships with shopping malls
for subscribers to the loyalty programme and to drive awareness of the
platform in 2024 and 2025 mainly through our own Digital Media Platforms
and placing advertisements on Google Display Network. Again, as we have
not introduced the E-Commerce Solution Platform to our existing clients or
market this platform yet, we have not received any secured order, quotation
request or indication of interest for services on this platform. Based on our
understanding of the advertising needs of our existing key clients who are
engaged in e-commerce or retails, we believe that the E-Commerce Solution
Platform would increase the effectiveness and enable an increase in
conversion rate of our clients’ advertising campaigns on our Digital Media
Platforms, thereby leading to an increase in our commission-based digital
advertising revenue. We also plan to promote the app by placing
advertisements on app stores and target to acquire approximately 455,000
downloads by 2025.
We expect to generate revenue from the E-Commerce Solution Platform
through integrated digital advertising services to advertisers on e-commerce
promotions and campaigns.
– approximately HK$11.9 million, representing approximately 12.5%, of the net
proceeds is expected to be used for capital expenditure for engaging third party
vendor constructing our in-house media content management platform and is
currently planned to be used within 30 months of the Listing. As a digital media
company, creating contents that are in trend and interest our audience is the key
to ensure viewership and internet traffics, thereby generates revenue for our
Group. To ensure our content stays on top of trend, it is proposed that a media
content management platform be set up to provide end-to-end digital media
content management for our Group. This platform features functions such as
maintaining a content contributors network assisting our Group’s editors to
research and to build content efficiently and effectively, measuring and monitoring
market trend and building a centralised dashboard for monitoring and measuring
the key performance indicators of articles published by different editors and/or
content contributors. We believe the implementation of such platform will help to
enhance the efficiency and productivity of our content creation process which is
crucial as it would provide us with a cornerstone infrastructure enabling us to be
prepared for handling increasing volume of data along with the expansion of our
business which may not be coped with manually in an efficient manner;
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– approximately HK$6.5 million, representing approximately 6.9%, of the net
proceeds is expected to be used for repayment of bank borrowings, which is
currently expected to be utilised within 3 months of the Listing. As at the Latest
Practicable Date we have bank borrowings of approximately HK$8.0 million, all
of which are repayable within one year or on demand. In view of the increasing
borrowing costs and likelihood of banks in Hong Kong having to further increase
loan interest rates to move in lockstep with potential further interest rate hikes by
the US Federal Reserve, our Directors are of the view that it would be in the
interest of our Group to reduce finance costs by applying part of the net proceeds
to pay down part of the bank borrowings instead of seeking extension of the
relevant facilities or alternative bank financing.
– approximately HK$9.4 million, representing approximately 9.9%, of the net
proceeds is expected to be used to fund our working capital and for general
corporate purposes.
As the APS Platform, the PSS Platform and the E-Commerce Solution Platform are all
new product lines of our Group, new headcounts are needed for the development of the
respective platforms. In addition to a team leader, recruitment for product manager,
data analysts, UX designers and app managers are essential and dedicated sales staff
would also be needed to introduce and market the new platforms and products to
clients. The new staff to be recruited for these new platforms should possess the
relevant skill sets for their development, which are quite distinct from the reduced
headcounts of the Group during the Track Record Period who were mainly staff
engaged in print media content production. Set out below is a brief description of the
expected experience and qualifications of the new hiring for each of the APS Platform,
the PSS Platform and the E-Commerce Solution Platform:
Job duties
Expected minimum
year(s) of experience Qualifications
Expected time
of hire
APS Platform
One team
leader
Managing daily
operation, driving
product development
and revenue growth
and delivering the
profit and loss
At least eight years
of experience in
digital marketing
and e-Commerce
Bachelor degree or
above in marketing,
communications or
e-Commerce or
related disciplines
2023 Q3
One product
manager
Strategic planning for
product development
and programme
management to drive
audience engagement
and sales
opportunities
Five to six years
experience in
digital content,
social media
platforms and
digital marketing
and has knowledge
in relation to SEO
and web and social
media platform
analytics tools
Bachelor degree or
above in marketing
or communications
or related
disciplines
2023 Q3
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Job duties
Expected minimum
year(s) of experience Qualifications
Expected time
of hire
One sales
manager
Exploring new
business opportunities
and provide customer
services to the
advertisers,
supervising the work
of telesales
Four to five years
experience in
telesales and team
management
Bachelor degree or
above in business
administration or
related disciplines
2023 Q4
One app
manager
Analysing apps
figures about trends,
social phenomenon
and user habits
Product development
and managing
advertisement
inventories on app
Three to four years
experience in app
or digital platform
operation
Bachelor degree
holder, preferably
in communications
2023 Q4
One UX
designer
Conducting user
research and survey,
and translating
feedbacks into
wireframes and
prototypes to provide
insights on future
trends and assist in
the Group’s product
development; defining
and implementing
design parameters,
style guideline, UX
documentation,
interface design for
both our Group’s
online platforms
(web/mobile) and
internal system
development
Three to four years
experience in user
experience design
Bachelor degree or
above in user
experience design
or related
disciplines
2023 Q3
Three telesales Pitching for business
opportunities through
telephone coverage
and managing client
relationship
Two to three years
experience in
telesales relating to
online advertising
business
Bachelor degree or
above in business
administration or
related disciplines
2023 Q4 to
2024 Q1
PSS Platform
One team
leader
Managing daily
operation, drive
product development
and revenue growth
and deliver the profit
and loss
At least eight years
of experience in
digital marketing
and e-Commerce
Bachelor degree or
above in marketing,
communications or
e-Commerce or
related disciplines
2023 Q3
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Job duties
Expected minimum
year(s) of experience Qualifications
Expected time
of hire
One product
manager
Strategic planning for
product development
and programme
management to drive
audience engagement
and sales
opportunities
Five to six year
experience in
digital content,
social media
platforms and
digital marketing
and has knowledge
in relation to SEO
and web and social
media platform
analytics tools
Bachelor degree or
above in marketing
or communications
or related
disciplines
2023 Q3
One business
development
manager
Responsible for
driving the business
growth, developing
new business
opportunities, driving
sales revenue,
approaching potential
clients and
maintaining business
relationships with
existing client of our
Group
Five to six year
experience in
client/business
development,
digital content
platform, client
side and/or client
servicing
Bachelor degree or
above in business
administration or
related disciplines
2023 Q3
One content
manager
Responsible for
content direction and
execution plan,
ensure traffic and
viewership targets are
achieved
Three to four years
experience in
journalism and
editorial
experience, with
experience in
finance /
investment /
property /
insurance /
management &
leadership
Bachelor degree or
above in
communications or
related disciplines
2023 Q4
One app
manager
Analysing apps
figures about trends,
phenomenon and user
habit; product
development and
managing
advertisement
inventories on app
Three to four years
experience in app
or digital platform
operation
Bachelor degree
holder, preferably
in communications
2023 Q4
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--- page 297 ---
Job duties
Expected minimum
year(s) of experience Qualifications
Expected time
of hire
One UX
designer
Conducting user
research and survey,
and translate
feedbacks into
wireframes and
prototypes to provide
insights on future
trends and assist in
the Group’s product
development; define
and implement design
parameters, style
guideline, UX
documentation ,
interface design for
both our Group’s
online platforms (web
/ mobile) and internal
system development
Three to four years
experience in
UX/UI design and
multiple digital
platforms
Bachelor degree or
above in UX
design or related
disciplines
2023 Q3
One data
analyst
Conducting
researches, analyse
data collected by our
Group in daily course
of business,
compiling data and
deriving insights
therefrom for
formulation of media
and business
strategies
Two to three years
experience in
research
methodology, and
data analyses,
preferably with at
least one year
research experience
A research degree
(MPhil, PhD) in
Social Science,
Computers or
Statistics
2023 Q4
One product
executive
Execution of product
development plan and
achieve programme
or sales project
objectives
Two to three years
experience in
digital content,
social media
platforms and
digital marketing
Bachelor degree or
above in marketing
or communications
or related
disciplines
2023 Q4
Two content
executives
Daily content creation
or adaption, achieve
traffic and viewership
targets
One to two years of
experience in
editorial in
finance/investment/
property/ insurance
Bachelor degree or
above in
communications or
related disciplines
2023 Q3 to Q4
E-Commerce Solution Platform
One team
leader
Managing daily
operation, drive
product development
and revenue growth
and deliver the profit
and loss
At least eight years
of experience in
digital marketing
and e-Commerce
Bachelor degree or
above in marketing,
communications or
e-Commerce or
related disciplines
2023 Q3
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--- page 298 ---
Job duties
Expected minimum
year(s) of experience Qualifications
Expected time
of hire
One product
manager
Strategic planning for
product development
and programme
management to drive
audience engagement
and sales
opportunities
Five to six year
experience in
digital content,
social media
platforms and
digital marketing
and has knowledge
in relation to SEO
and web and social
media platform
analytics tools
Bachelor degree or
above in marketing
or communications
or related
disciplines
2023 Q3
One business
development
manager
Responsible for
driving the business
growth, developing
new business
opportunities, driving
sales revenue,
approaching potential
clients and
maintaining business
relationships with
existing client of our
Group
Five to six year
experience in
client/business
development,
digital content
platform, client
side and/or client
servicing
Bachelor degree or
above in business
administration or
related disciplines
2023 Q3
One content
manager
Responsible for
content direction and
execution plan,
ensure traffic and
viewership targets are
achieved
Three to four years
experience in
journalism and
editorial
experience, with
experience in
beauty and health
care
Bachelor degree or
above in
communications or
related disciplines
2023 Q4
One app
manager
Analyse apps figures
about trends,
phenomenon and user
habit; product
development and
managing
advertisement
inventories on app
Three to four years
experience in app
or digital operation
Bachelor degree
holder, preferably
in communications
2023 Q4
FUTURE PLANS AND USE OF PROCEEDS
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--- page 299 ---
Job duties
Expected minimum
year(s) of experience Qualifications
Expected time
of hire
One UX
designer
Conduct user research
and survey, and
translate feedbacks
into wireframes and
prototypes to provide
insights on future
trends and assist in
the Group’s product
development; define
and implement design
parameters, style
guideline, UX
documentation ,
interface design for
both our Group’s
online platforms (web
/ mobile) and internal
system development
Three to four years
experience in
UX/UI design and
multiple digital
platforms
Bachelor degree or
above in UX
design or related
disciplines
2023 Q3
One data
analyst
Conducting
researches, analyse
data collected by our
Group in daily course
of business,
compiling data and
deriving insights
therefrom for
formulation of media
and business
strategies
Two to three years
experience in
research
methodology, and
data analyses,
preferably with at
least one year
research experience
A research degree
(MPhil, PhD) in
Social Science,
Computers or
Statistics
2023 Q4
One product
executive
Execution of product
development plan and
achieve programme
or sale project
objectives
Two to three years
experience in
digital content,
social media
platforms and
digital marketing
Bachelor degree or
above in marketing
and
communications or
related disciplines
2023 Q4
Two content
executives
Daily content creation
or adaption, achieve
traffic and viewership
targets
One to two years of
experience in
editorial in
finance/investment/
property/insurance
Bachelor degree or
above in
communications or
related disciplines
2023 Q3 to Q4
FUTURE PLANS AND USE OF PROCEEDS
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--- page 300 ---
The following table sets forth the expected implementation timetable of our planned
use of the net proceeds from the Share Offer:
By the year ending 31 December Total
2023 2024 2025
(HK$ million) (HK$ million) (HK$ million) (HK$ million)
APS Platform
Upgrading information technology
infrastructure 3.3 – – 3.3
Staff costs 1.1 3.5 0.1 4.7
Marketing expenses – 2.5 1.7 4.2
Subtotal: 4.4 6 1.8 12.2
PSS Platform
Upgrading information technology
infrastructure 3.3 – – 3.3
Staff costs 1.5 4.2 0.2 5.9
Marketing expenses – 2.72 1.83 4.55
Subtotal: 4.8 6.92 2.03 13.75
E-Commerce Solution Platform
Upgrading information technology
infrastructure 3.2 2.6 – 5.8
Staff costs 1.5 4.2 0.2 5.9
Marketing expenses – 2.72 1.83 4.55
Subtotal: 4.7 9.52 2.03 16.25
Development of the in-house media content
management platform 2.9 4.9 4.1 11.9
Repayment of bank borrowings 6.5 – – 6.5
Mergers and acquisitions – 25.0 – 25.0
Working capital and general corporate
purpose 9.4 – – 9.4
Total 32.7 52.3 10.0 95.0
In the event that the Offer Price is determined at a price other than HK$0.88, we will
apply the net proceeds in the proportion as shown above. To the extent that the net proceeds
are not immediately required for the above purposes, the Company may hold such funds in
deposits with licensed banks and/or authorised financial institutions (as defined under the
Securities and Future Ordinance) for so long as it is in the best interest of our Group.
The Company will issue an announcement in case there is any material change in the
use of proceeds described above.
FUTURE PLANS AND USE OF PROCEEDS
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--- page 301 ---
UNDERWRITERS
Placing Underwriters
Emperor Securities Limited
China Galaxy International Securities (Hong Kong) Co., Limited
Lego Securities Limited
Guotai Junan Securities (Hong Kong) Limited
Public Offer Underwriters
Emperor Securities Limited
China Galaxy International Securities (Hong Kong) Co., Limited
Lego Securities Limited
Guotai Junan Securities (Hong Kong) Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
1. Underwriting Agreement
Pursuant to the Underwriting Agreement, our Company is offering the Public Offer
Shares for subscription on and subject to the terms and conditions of this prospectus and the
Application Forms relating thereto. Our Company is also offering the Placing Shares for
subscription by professional, institutional and other investors on and subject to the terms and
conditions of the Placing, in each case at the Offer Price.
Subject to the approval of the listing of and permission to deal in the Shares in issue
and to be issued as mentioned herein (and such listing and permission not subsequently
being revoked prior to the date on which dealings in the Shares first commence on the Stock
Exchange) being granted by the Stock Exchange on or before Wednesday, 12 July 2023 or
such later date as our Company, the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Joint Coordinators and the Underwriters) may agree in
writing and to the conditions set out in the Underwriting Agreement, (a) the Public Offer
Underwriters have agreed to subscribe or procure subscribers, on the terms and conditions of
this prospectus and the Application Forms relating hereto, for the Public Offer Shares now
being offered for subscription but not taken up under the Public Offer, and (b) the Placing
Underwriters have severally agreed to subscribe or procure subscribers, on and subject to the
terms and conditions of the Placing, for the Placing Shares.
UNDERWRITING
– 292 –


--- page 302 ---
Grounds for termination
The Overall Coordinators (acting for themselves and on behalf of the Joint
Sponsors, the Joint Coordinators and the Underwriters) is entitled to terminate the
Underwriting Agreement upon the occurrence of any of the following events by notice
in writing to our Company given at any time prior to 8:00 a.m. on the Listing Date
(the “ Termination Time ”) if, certain events, including without limitation the following,
shall occur at any time before the Termination Time:
(a) there has come to the notice of any of the Joint Sponsors, the Overall
Coordinators, the Joint Coordinators and/or the Underwriters that:
(i) any statement contained in this prospectus or the Application Forms
relating thereto or the documents for the Share Offer was when such
document was issued, or has become, untrue, incorrect or misleading in
any material respect in the sole and absolute opinion of the Overall
Coordinators (for themselves and on behalf of the Joint Sponsors, the
Joint Coordinators and the Underwriters) is material in the context of
the Share Offer; or
(ii) any matter has arisen or has been discovered which would, had it arisen
or been discovered immediately before the date of this prospectus or
the issue of the documents for the Share Offer, constitute a material
omission therefrom in the sole and absolute opinion of the Overall
Coordinators (for themselves and on behalf of the Joint Sponsors, the
Joint Coordinators and the Underwriters); or
(iii) any of the representations, warranties and undertakings contained in the
Underwriting Agreement is untrue or inaccurate in any material respect
which the Overall Coordinators (for themselves and on behalf of the
Joint Sponsors, the Joint Coordinators and the Underwriters) in its sole
opinion considers to be material in the context of the Share Offer; or
(iv) any event, act or omission which gives or is reasonably likely to give
rise to a liability of a material nature of any of our Company, our
executive Directors and the Covenantors pursuant to the indemnities
given under the Underwriting Agreement; or
(v) any of the obligations or undertakings expressed to be assumed by or
imposed on any of our Company, our executive Directors and the
Covenantors under the Underwriting Agreement has not been complied
with or observed by any of them in any respect considered by the
Overall Coordinators (for themselves and on behalf of the Joint
Sponsors, the Joint Coordinators and the Underwriters) in its reasonable
opinion to be material; or
UNDERWRITING
– 293 –


--- page 303 ---
(vi) any information, matter or event which in the reasonable opinion of the
Overall Coordinators (for themselves and on behalf of the Joint
Sponsors, the Joint Coordinators and the Underwriters) may lead to a
material adverse change or prospective material adverse change in the
business or in the financial or trading position or prospects of our
Group as a whole, or
(b) there shall develop, occur, exist or come into effect:
(i) any new law or regulation or any change in existing laws or regulations
of any nature whatsoever or any change in the interpretation or
application thereof by any court or other competent authority of Hong
Kong, PRC, the BVI and the Cayman Islands or any other jurisdiction
relevant to any member of our Group (each a “ Relevant
Jurisdiction ”); or
(ii) any change (whether or not forming part of a series of changes
occurring or continuing before, on and/or after the date of the
Underwriting Agreement and including an event or change in relation to
or a development of an existing state of affairs) in local, national, or
international financial, political, military, industrial, fiscal or economic
conditions or prospects in or affecting any Relevant Jurisdiction; or
(iii) any change in the conditions of the local, national or international
securities markets (or in conditions affecting a sector only of such
market) in or affecting any Relevant Jurisdiction including, for the
avoidance of doubt, any significant adverse change in the index level or
volume of turnover of any such markets; or
(iv) the imposition of any moratorium, suspension or material restriction on
trading in securities generally on the Stock Exchange occurring due to
exceptional financial circumstances or otherwise; or
(v) a change or development involving a prospective change in taxation or
exchange control (or the implementation of exchange control) in or
affecting any Relevant Jurisdiction; or
(vi) any event, or series of events, including, without limitation, acts of
government, strikes, lock-outs, fire, explosion, flooding, civil
commotion, acts of war, acts of God, acts of terrorism, accident,
interruption or delay in transportation, economic sanctions, public
disorder, riot and epidemic in or affecting any Relevant Jurisdiction; or
(vii) any litigation or claim brought by any third party against any member
of our Group which will result in our Group incurring liability that is
material to our Group as a whole; or
UNDERWRITING
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--- page 304 ---
(viii) the imposition of economic sanctions relating to the business of our
Group, in whatever form, directly or indirectly, by Hong Kong or any
other Relevant Jurisdiction; or
(ix) a petition is presented for the winding-up or liquidation of any member
of our Group or any member of our Group makes any composition or
arrangement with its creditors or enters in a scheme of arrangement or
any resolution is passed for the winding-up of any member of our
Group or a provisional liquidator, receiver or manager is appointed over
all or part of the assets or undertaking of any member of our Group or
anything analogous thereto occurs in respect of any member of our
Group,
which in the sole and absolute opinion of the Overall Coordinators:
(1) is or will or could be reasonably expected to have a material adverse effect
on the business, financial or other condition or prospects of our Group taken
as a whole; or
(2) has or will have or could be reasonably expected to have a material adverse
effect on the success of the Share Offer or the level of interest under the
Share Offer; or
(3) makes it inadvisable or inexpedient for the Share Offer to proceed.
Undertakings pursuant to the Underwriting Agreement
Undertakings given by the Covenantors
Under the Underwriting Agreement, each of the Covenantors jointly and severally
undertakes to our Company, the Joint Sponsors, the Overall Coordinators, the Joint
Coordinators and the Underwriters that, unless with the prior written consent of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Joint
Coordinators and the Underwriters) (which consent shall not be unreasonably withheld
or delayed) and save for Shares issued pursuant to the Share Offer and the
Capitalisation Issue or the exercise of any options which may be granted under the
Share Option Scheme:
(a) he/it shall not, and shall procure that his/its close associates or companies
controlled by him/it or nominees or trustees holding in trust for him/it shall
not, unless in compliance with the requirements of the Listing Rules and the
applicable laws, sell, transfer or otherwise dispose of (including without
limitation the creation of any options, rights, interests or encumbrance in
respect of) any of the Shares or securities of our Company owned by him/it
or the relevant company, nominee or trustee (including any interest in any
shares in any company controlled by him/it which is directly or indirectly
the beneficial owner of any of the Shares or securities of our Company)
immediately following the completion of the Share Offer (the “ Relevant
Securities ”) within the First Six-Month Period; and
UNDERWRITING
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(b) he/it shall not, and shall procure that none of his/its close associates or
companies controlled by him/it or nominees or trustees holding in trust for
him/it shall, unless in compliance with the requirements of the Listing Rules,
within the Second Six-Month Period sell, transfer or otherwise, dispose of
(including without limitation the creation of any options, rights, interests or
encumbrance in respect of) any of the Relevant Securities, if immediately
following such sale, transfer or disposal, any Covenantors, either
individually or taken together with other Covenantors, cease to be a
Controlling Shareholder of our Company, and that in the event of any such
sale, transfer or disposal, all reasonable steps shall be taken to ensure that
such sale, transfer or disposal shall be effected in such a manner so as not to
create a disorderly or false market for the Shares during the progress of such
sale, transfer or disposal or after the completion thereof.
Under the Underwriting Agreement, each of the Covenantors has further jointly
and severally undertaken to our Company, the Joint Sponsors, the Overall Coordinators,
the Joint Coordinators and the Underwriters that, during the First Six-Month Period and
the Second Six-Month Period, he/it will:
(a) when he/it pledges or charges any securities or interests in the Relevant
Securities in favour of the authorised institution pursuant to Note (2) to Rule
10.07(2) of the Listing Rules, immediately inform our Company in writing
of such pledges or charges together with the number of Shares and nature of
interest so pledged or charged; and
(b) when he/it receives indications, either verbal or written, from any pledgee or
chargee that any of the pledged or charged securities or interests in the
securities of our Company will be sold, transferred or disposed of,
immediately inform our Company in writing of such indications.
Undertakings given by our Company
Under the Underwriting Agreement, we have undertaken to the Overall
Coordinators (for themselves and on behalf of the Joint Sponsors, the Joint
Coordinators and the Underwriters) to inform it as soon as we have received
information in writing relating to the pledge or charge referred to above from the
Covenantors or any of them and will disclose such matters by way of public
announcements in accordance with the Listing Rules as soon as possible.
Under the Underwriting Agreement, we have undertaken to and covenanted with the
Joint Sponsors, the Overall Coordinators, the Joint Coordinators and the Underwriters that
we will, and each of the Covenantors and our executive Directors has jointly and severally
undertaken and covenanted with the Joint Sponsors, the Overall Coordinators, the Joint
Coordinators and the Underwriters to procure that, without the prior written consent of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Joint
Coordinators and the Underwriters) (such consent not to be unreasonably withheld or
delayed), and subject always to the requirements of the Stock Exchange, save for the Offer
Shares and Shares to be issued pursuant to the Capitalisation Issue, the grant of options
under the Share Option Scheme, and any Shares which may fall to be issued pursuant to any
UNDERWRITING
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option which may be granted under the Share Option Scheme, or otherwise than by way of
scrip dividend schemes or similar arrangements in accordance with the Articles, neither we
nor any of our subsidiaries shall:
(a) allot and issue or agree to allot and issue any shares in our Company or any
subsidiary of our Company or grant or agree to grant any options, warrants
or other rights carrying any rights to subscribe for or otherwise acquire any
securities of our Company or any subsidiary of our Company during the
First Six-Month Period; or
(b) allot and issue or agree to allot and issue any of the Shares or other interests
referred to in (a) above during the Second Six-Month Period if, immediately
following such allotment and issue, any Covenantors, either individually or
taken together with the other Covenantors, would cease to be a Controlling
Shareholder; or
(c) during the First Six-Month Period purchase any Shares or securities of our
Company.
Undertakings to the Stock Exchange pursuant to the Listing Rules
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling
Shareholders have jointly and severally undertaken to and covenanted with the Stock
Exchange and to our Company that save as provided in the notes to Rule 10.07 of the
Listing Rules, he/she/it shall not and shall procure that the relevant registered holder(s)
of the Shares shall not:
(a) in the First Six-Month Period, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances
in respect of the Relevant Securities; and
(b) in the Second Six-Month Period, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances
in respect of, any of the Relevant Securities if, immediately following such
disposal or upon the exercise or enforcement of such options, rights,
interests or encumbrances, he/she/it would cease to be a Controlling
Shareholder.
Each of our Controlling Shareholders has further undertaken to our Company and
the Stock Exchange that during the First Six-Month Period and the Second Six-Month
Period:
(a) if he/she/it pledges or charges any securities of our Company beneficially
owned by him/it in favour of an authorised institution, he/she/it shall
immediately give written notice to our Company of such pledge or charge
together with the number and class of securities so pledged or charged and
the purpose for which the pledge or charge is made; and
UNDERWRITING
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(b) when he/she/it is aware of or receives indications, either verbal or written,
from the pledgee or chargee that any of such pledged or charged securities
or interests in the securities of our Company will be disposed of, he/she/it
shall immediately thereafter give written notice to our Company of such
indications.
Our Company will inform the Stock Exchange immediately of the aforesaid
pledges, charges or the said indications and publish an announcement thereof in
accordance with the Listing Rules as soon as possible upon receipt of the notification
from any of our Controlling Shareholders.
Pursuant to Rule 10.08 of the Listing Rules, our Company has undertaken to the
Stock Exchange that no further Shares or securities convertible into equity securities
(whether or not of a class already listed) may be issued or form the subject of any
agreement to such an issue within the First Six-Month Period (whether or not such
issue of Shares or securities will be completed within the First Six-Month Period),
except in certain prescribed circumstances which includes the issue of Shares pursuant
to the Share Option Scheme.
Indemnities
Our Company, the Covenantors and our executive Directors have under the
Underwriting Agreement, jointly and severally agreed and undertaken to indemnify and
hold harmless the Joint Sponsors, the Overall Coordinators, the Joint Coordinators and
the Underwriters and each of them, for themselves and as trustees for their respective
directors, officers, employees, agents and assignees (collectively the “ indemnified
parties ” and individually, an “ indemnified party ”) against any and all claims, actions,
liabilities, proceedings or damages which may be made or established against the
indemnified parties or any of them by any party including any applicant or placee of
the Offer Shares or any subsequent purchaser or transferee of any Offer Shares or any
other person, governmental agency or regulatory body whatsoever, and against all
costs, charges, losses or expenses which the indemnified parties or any of them may
suffer or properly incur in disputing any such claim or defending any such action or
proceedings, on the grounds of or otherwise arising out of or in connection with:
(a) the lawful performance by the Joint Sponsors, the Overall Coordinators, the
Joint Coordinators and the Underwriters of their obligations under the
Underwriting Agreement; or
(b) the issue, circulation or distribution of the documents in connection with the
Placing, the post hearing information pack of our Company posted on the
Stock Exchange’s website on 28 June 2023 (“ PHIP”), this prospectus, the
Application Forms, the formal notice and/or allotment results announcement;
or
(c) the allotment and issue of the Offer Shares; or
UNDERWRITING
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(d) any representation, statement of fact or opinion, estimate or forecast made
by or on behalf of our Company or our Directors and contained in this
prospectus or the PHIP being, or being alleged to be, untrue, incomplete,
inaccurate or misleading or not honestly or reasonably held in any respect of
the fact or any allegation that this prospectus or the PHIP does not contain
all information material in the context of the Share Offer or otherwise
required to be stated in this prospectus or necessary to enable an informed
assessment to be made of the assets, liabilities, earnings, financial or trading
position or prospects of our Group; or
(e) any breach or alleged breach of any of the representation, warranties and
undertakings contained in the Underwriting Agreement,
provided that the above indemnity contained in the Underwriting Agreement shall not
apply in respect of an indemnified party to the extent but only to the extent that any
such claim, action, liabilities, proceedings or damages made against, suffered or
incurred by such indemnified party arises out of the fraud, negligence, breach or
default of such indemnified party. The non-application of the above indemnity
contained in the Underwriting Agreement in respect of any one indemnified party shall
not affect the application of such indemnity in respect of any other indemnified parties.
2. Commission and expenses
The Public Offer Underwriters and the Placing Underwriters will receive an
underwriting commission of 3.5% of the aggregate Offer Price payable for the Public Offer
Shares/Placing Shares offered under the Public Offer (excluding any Public Offer Shares
reallocated to the Placing) and the Placing, out of which they will pay any sub-underwriting
commission and other fees, if any. The Overall Coordinators are entitled to a total overall
coordinators’ fee of 1.5% of the gross proceeds from the Share Offer (together with the
underwriting commissions in respect of the Offer Shares, the “ Fixed Fees ”). Our Company
will not pay Underwriters discretionary incentive fee for the Share Offer (the “ Discretionary
Fee”). The ratio of the Fixed Fees and Discretionary Fee is therefore 100:0.
The aggregate of the underwriting commissions payable to the Underwriters and the
overall coordinators’ fee to the Overall Coordinators in relation to the Share Offer (assuming
the Offer Price is HK$0.88, being the mid-point of the indicative Offer Price range) will be
approximately HK$6.6 million.
Based on the Offer Price of HK$0.88 per Share, being the midpoint of the stated range
of the Offer Price between HK$0.84 to HK$0.92 per Share, the fees and commissions in
connection with the Public Offer and the Placing, together with the Stock Exchange listing
fees, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015%, Stock
Exchange trading fee of 0.00565%, legal and other professional fees, printing and other
expenses relating to the Share Offer, are estimated to amount to approximately HK$37.0
million in aggregate (assuming an Offer Price of HK$0.88 per Share, being the mid-point of
our indicative Offer Price range of HK$0.84 to HK$0.92) and will be payable by our
Company.
UNDERWRITING
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3. Underwriters’ interest in our Company
As disclosed in the section headed “Connected Transactions”, Emperor Securities,
being one of the Joint Coordinators and an Underwriter, is an indirect wholly-owned
subsidiary of Emperor Capital Group, which is in turn directly owned as to approximately
42.72% by Emperor Capital Group Holdings Limited, a wholly-owned subsidiary of Albert
Y eung Capital Holdings Limited (“ AY Capital Holdings ”). AY Capital Holdings is in turn
held by CDM Trust & Board Services AG (“ CDM Trust ”) in trust for a private
discretionary trust set up by Dr. Albert Y eung.
Save for its securities trading and dealing business, which may involve trading and
dealing in the securities of our Company, and as contemplated pursuant to the Underwriting
Agreement, Emperor Securities is not interested in any shares in any member of our Group
or has any right (whether legally enforceable or not) or option to subscribe for or to
nominate persons to subscribe for any securities in any member of our Group.
JOINT SPONSORS’ INDEPENDENCE
Lego Corporate Finance Limited is independent from our Company pursuant to Rule
3A.07 of the Listing Rules. Emperor Corporate Finance is an indirect wholly-owned
subsidiary of Emperor Capital Group, which is directly owned as to approximately 42.72%
by Emperor Capital Group Holdings Limited, a wholly-owned subsidiary of Albert Y eung
Capital Holdings Limited (“ AY Capital Holdings ”). AY Capital Holdings was in turn held
by CDM Trust & Board Services AG (“ CDM Trust ”) in trust for a private discretionary
trust set up by Dr. Albert Y eung. Accordingly, Emperor Corporate Finance is not
independent from our Company pursuant to Rule 3A.07 of the Listing Rules.
Save for the interests of Emperor Corporate Finance and its associates (including
Emperor Securities) in our Company set out above, none of the Joint Sponsors nor their
associates expect to have accrued any material benefit as a result of the successful listing of
the Shares, other than the following: (i) the respective advisory and documentation fees to
be paid to the Joint Sponsors; and (ii) certain associates of Emperor Corporate Finance,
whose ordinary business involve the trading and dealing in securities, may be involved in
the trading and dealing in the securities of our Company.
Save for the interest of Emperor Corporate Finance and its associates in our Company
set out above, the Joint Sponsors have no shareholding in any member of our Group nor any
right (whether legally enforceable or not) to subscribe for or to nominate persons to
subscribe for securities in any member of our Group.
MINIMUM PUBLIC FLOAT
Our Company and the Directors will ensure that a minimum of 25% of the total issued
Shares will be held by the public after the completion of the Share Offer.
UNDERWRITING
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THE SHARE OFFER
This prospectus is published in connection with the Public Offer as part of the Share
Offer. The Share Offer comprises:
(i) the Public Offer of initially 15,000,000 Public Offer Shares (including the
Employee Reserved Shares pursuant to the Employee Preferential Offering, and
subject to reallocation) in Hong Kong as described in the paragraph headed “–
The Public Offer” below; and
(ii) the Placing of initially 135,000,000 Placing Shares (subject to reallocation) in
Hong Kong as described in the paragraph headed “– The Placing” below.
Of the 15,000,000 Shares initially being offered under the Public Offer, 1,500,000
Shares (representing approximately 1.0% of the total number of Offer Shares initially being
offered under the Share Offer) are available for subscription by Eligible Employees on a
preferential basis under the Employee Preferential Offer, subject to the terms and conditions
set forth in this prospectus and the PINK Application Form.
Investors may apply for Offer Shares under the Public Offer or apply for or indicate an
interest for Placing Shares under the Placing, but may not do both. All Eligible Employees
may apply for Public Offer Shares in the Public Offer and Employee Reserved Shares in the
Employee Preferential Offering but may not apply for or indicate an interest for Offer
Shares under the Placing.
The Offer Shares will represent 25% of the enlarged issued share capital of the
Company immediately after completion of the Share Offer.
References in this prospectus to applications, GREEN Application Form, application
monies or the procedure for applications relate solely to the Public Offer.
THE PUBLIC OFFER
Number of Offer Shares initially offered
The Company is initially offering 15,000,000 Public Offer Shares for subscription by
the public in Hong Kong at the Offer Price, representing 10% of the total number of Offer
Shares initially available under the Share Offer. The number of Offer Shares initially offered
under the Public Offer, subject to any reallocation of Offer Shares between the Placing and
the Public Offer, will represent 2.5% of the total Shares in issue immediately following the
completion of the Share Offer.
The Public Offer is open to members of the public in Hong Kong as well as to
institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities that regularly invest in shares and other
securities.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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Completion of the Public Offer is subject to the conditions set out in “– Conditions of
the Share Offer” below.
Allocation
Allocation of Offer Shares to investors under the Public Offer will be based solely on
the level of valid applications received under the Public Offer. The basis of allocation may
vary, depending on the number of Public Offer Shares validly applied for by applicants.
Such allocation could, where appropriate, consist of balloting, which could mean that some
applicants may receive a higher allocation than others who have applied for the same
number of Public Offer Shares, and those applicants who are not successful in the ballot
may not receive any Public Offer Shares.
For allocation purposes only, the total number of Public Offer Shares available under
the Public Offer (after taking into account any reallocation referred to below) and after
deducting the number of Employee Reserved Shares validly applied for under the Employee
Preferential Offering will be divided equally (to the nearest board lot) into two pools: pool
A and pool B. The Public Offer Shares in pool A will be allocated on an equitable basis to
applicants who have applied for Public Offer Shares with an aggregate price of HK$5
million (excluding the brokerage, the SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy payable) or less. The Public Offer Shares in pool B will be
allocated on an equitable basis to applicants who have applied for Public Offer Shares with
an aggregate price of more than HK$5 million (excluding the brokerage, the SFC transaction
levy, the Stock Exchange trading fee and AFRC transaction levy payable) and up to the total
value in pool B.
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If any Public Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Public Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose
of the immediately preceding paragraph only, the “price” for Public Offer Shares means the
price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Public Offer Shares from either
pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Public Offer and any application for more than 6,750,000 Public Offer Shares is liable to
be rejected.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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Reallocation
The allocation of Offer Shares between the Public Offer and the Placing is subject to
reallocation. Paragraph 4.2 of Practise Note 18 of the Listing Rules requires a clawback
mechanism to be put in place which would have the effect of increasing the number of Offer
Shares under the Public Offer to a certain percentage of the total number of Offer Shares
offered under the Share Offer if certain prescribed total demand levels are reached as further
described below:
– if the number of Offer Shares validly applied for under the Public Offer
represents 15 times or more but less than 50 times the number of Offer Shares
initially available for subscription under the Public Offer, then Offer Shares will
be reallocated to the Public Offer from the Placing so that the total number of
Offer Shares available under the Public Offer will be 45,000,000 Offer Shares,
representing approximately 30% of the Offer Shares initially available under the
Share Offer;
– if the number of Offer Shares validly applied for under the Public Offer
represents 50 times or more but less than 100 times the number of Offer Shares
initially available for subscription under the Public Offer, then the number of
Offer Shares to be reallocated to the Public Offer from the Placing will be
increased so that the total number of Offer Shares available under the Public
Offer will be 60,000,000 Offer Shares, representing approximately 40% of the
Offer Shares initially available under the Share Offer; and
– if the number of Offer Shares validly applied for under the Public Offer
represents 100 times or more the number of Offer Shares initially available for
subscription under the Public Offer, then the number of Offer Shares to be
reallocated to the Public Offer from the Placing will be increased so that the total
number of Offer Shares available under the Public Offer will be 75,000,000 Offer
Shares, representing approximately 50% of the Offer Shares initially available
under the Share Offer.
In each case, the additional Offer Shares reallocated to the Public Offer will be
allocated between pool A and pool B and the number of Offer Shares allocated to the
Placing will be correspondingly reduced in such manner as the Overall Coordinators deem
appropriate.
In addition, the Overall Coordinators may, at its discretion, reallocate Offer Shares
initially allocated for the Placing to the Public Offer to satisfy valid applications in pool A
and pool B under the Public Offer. In accordance with the Guidance Letter HKEX-GL91-18
issued by the Stock Exchange, if such reallocation is done other than pursuant to Practise
Note 18 of the Listing Rules, the maximum total number of Offer Shares that may be
reallocated to the Public Offer following such reallocation shall be not more than double the
initial allocation to the Public Offer (i.e. 30,000,000 Offer Shares) (representing
approximately 20% of the Offer Shares initially available under the Share Offer), and the
final Offer Price shall be fixed at the bottom end of the indicative Offer Price range (i.e.
HK$0.84 per Offer Share).
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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If the Public Offer is not fully subscribed, the Overall Coordinators may reallocate all
or any unsubscribed Public Offer Shares to the Placing, in such proportions as the Overall
Coordinators deem appropriate.
Details of any reallocation of Offer Shares between the Public Offer and the Placing
will be disclosed in the results announcement of the Public Offer, which is expected to be
published on Friday, 14 July 2023.
Applications
Each applicant under the Public Offer will be required to give an undertaking and
confirmation in the application submitted by him/her that he/she and any person(s) for
whose benefit he/she is making the application has not applied for or taken up, or indicated
an interest for, and will not apply for or take up, or indicate an interest for, any Placing
Shares under the Placing. Such applicant’s application is liable to be rejected if such
undertaking and/or confirmation is/are breached and/or untrue (as the case may be) or if he/
she has been or will be placed or allocated Placing Shares under the Placing.
Applicants under the Public Offer are required to pay, on application, the maximum
Offer Price in addition to the brokerage, the SFC transaction levy, the Stock Exchange
trading fee and AFRC transaction levy payable on each Offer Share, amounting to a total of
HK$4,646.39 for one board lot of 5,000 Shares. If the Offer Price, as finally determined in
the manner described in “– Pricing and Allocation” below, is less than the maximum Offer
Price, appropriate refund payments (including the brokerage, the SFC transaction levy, the
Stock Exchange trading fee and AFRC transaction levy attributable to the surplus application
monies) will be made to successful applicants, without interest. Further details are set out in
the section headed “How to Apply for Public Offer Shares and Employee Reserved Shares”
in this prospectus.
References in this prospectus to applications, the GREEN Application Form,
application monies or the procedure for application relate solely to the Public Offer.
THE EMPLOYEE PREFERENTIAL OFFERING
Of the 15,000,000 Offer Shares initially being offered under the Public Offer,
1,500,000 Offer Shares (representing approximately 1.0% of the total number of Offer
Shares initially being offered under the Share Offer) are available for subscription by the
Eligible Employees on a preferential basis, subject to the terms and conditions set forth in
this prospectus and the PINK Application Form.
The Employee Reserved Shares are being offered out of the Public Offer and are not
subject to the clawback mechanism as set forth in the paragraph headed “The Public Offer –
Reallocation” above. As at the Latest Practicable Date, there were 201 Eligible Employees
being eligible to apply for Employee Reserved Shares under the Employee Preferential
Offering.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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Allocation of the Employee Reserved Shares under the Employee Preferential Offering
will be based on the written guidelines distributed to the Eligible Employees which are
consistent with the allocation guidelines contained in Practice Note 20 of the Listing Rules.
The allocation of the Employee Reserved Shares under the Employee Preferential Offering
will, in any event, be made on an equitable basis and will not be based on the identity, the
seniority, the length of service or the work performance of the Eligible Employees. No
favour will be given to the Eligible Employees who apply for a large number of Employee
Reserved Shares. Eligible Employees applying for Employee Reserved Shares will be subject
to an allocation basis that is based on the level of valid applications received. The allocation
basis will be determined by our Company’s Hong Kong Share Registrar based on the level
of valid applications received under the Employee Preferential Offering and the number of
Employee Reserved Shares validly applied for within each application tier. The allocation
will be on a pro-rata basis in proportion (as nearly as possible without involving portions of
a board lot) to the level of valid applications received from Eligible Employees, or balloted
if such remaining Employee Reserved Shares are not sufficient. If balloting is conducted,
some Eligible Employees may be allocated more Employee Reserved Shares than others who
have applied for the same number of Employee Reserved Shares.
Any application made on a PINK Application Form for more than 1,500,000 Employee
Reserved Shares will be rejected. Any Employee Reserved Shares not subscribed for by the
Eligible Employees under the Employee Preferential Offering will be available for
subscription by the public in Hong Kong under the Public Offer after the reallocation as
described above in the paragraph headed “The Public Offer” in this section.
If you are an Eligible Employee, in addition to being able to apply for Employee
Reserved Shares under the Employee Preferential Offering by a PINK Application Form,
you may also apply for Public Offer Shares as a member of the public in the Public Offer
by submitting application online through the HK eIPO White Form service or the CCASS
EIPO service, but you may not apply for or indicate an interest for Placing Shares under the
Placing. Eligible Employees will receive no preference as to entitlement or allocation in
respect of such further application for Public Offer Shares.
THE PLACING
Number of Offer Shares initially offered
The Placing will consist of an initial offering of 135,000,000 Placing Shares offered by
us (subject to reallocation), representing 90% of the total number of Offer Shares initially
available under the Share Offer. The number of Offer Shares initially offered under the
Placing, subject to any reallocation of Offer Shares between the Placing and the Public
Offer, will represent approximately 22.5% of the total Shares in issue immediately following
the completion of the Share Offer.
Allocation
The Placing will include selective marketing of Offer Shares to institutional and
professional investors and other investors anticipated to have a sizeable demand for such
Offer Shares in Hong Kong. Professional investors generally include brokers, dealers,
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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--- page 315 ---
companies (including fund managers) whose ordinary business involves dealing in shares
and other securities and corporate entities which regularly invest in shares and other
securities. Allocation of Offer Shares pursuant to the Placing will be effected in accordance
with the “book-building” process described in the paragraph heade d “ – Pricing and
Allocation” below and based on a number of factors, including the level and timing of
demand, the total size of the relevant investor’s invested assets or equity assets in the
relevant sector and whether or not it is expected that the relevant investor is likely to buy
further Shares, and/or hold or sell its Shares, after the listing of the Shares on the Stock
Exchange. Such allocation is intended to result in a distribution of the Shares on a basis
which would lead to the establishment of a solid professional and institutional shareholder
base to the benefit of our Company and the Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may
require any investor who has been offered Offer Shares under the Placing, and who has
made an application under the Public Offer, to provide sufficient information to the Overall
Coordinators so as to allow them to identify the relevant applications under the Public Offer
and to ensure that they are excluded from any application of Offer Shares under the Public
Offer.
Reallocation
The total number of Offer Shares to be issued pursuant to the Placing may change as a
result of the clawback arrangement described in the section headed “– The Public Offer –
Reallocation” above.
PRICING AND ALLOCATION
Determining the Pricing of the Offer Shares
Pricing for the Offer Shares for the purpose of the various offerings under the Share
Offer will be determined on the Price Determination Date, which is expected to be on or
about Friday, 7 July 2023 and, in any event, no later than Monday, 10 July 2023, by
agreement between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and the Company and the number of Offer Shares to be allocated under the
various offerings will be determined shortly thereafter.
The Offer Price will not be more than HK$0.92 per Offer Share and is expected to be
not less than HK$0.84 per Offer Share, unless otherwise announced, as further explained
below. Applicants under the Public Offer must pay, on application, the maximum Offer Price
plus brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of
0.00565% and AFRC transaction levy of 0.00015%, amounting to a total of HK$4,646.39 for
one board lot of 5,000 Shares. Prospective investors should be aware that the Offer Price
to be determined on the Price Determination Date may be, but is not expected to be,
lower than the minimum Offer Price stated in this prospectus.
The Placing Underwriters will be soliciting from prospective investors’ indications of
interest in acquiring Offer Shares in the Placing. Prospective professional and institutional
investors will be required to specify the number of Offer Shares under the Placing they
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
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would be prepared to acquire either at different prices or at a particular price. This process,
known as “book-building,” is expected to continue up to, and to cease on or about, the last
day for lodging applications under the Public Offer.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may,
where they deems appropriate, based on the level of interest expressed by prospective
investors during the book-building process in respect of the Placing, and with the consent of
the Company, reduce the number of Offer Shares offered below and/or the Offer Price range
as stated in this prospectus at any time on or prior to the morning of the last day for lodging
applications under the Public Offer. In such a case, we will, as soon as practicable following
the decision to make such reduction, and in any event not later than the morning of the last
day for lodging applications under the Public Offer, cause to be published on the websites of
the Company and the Stock Exchange at www.newmedialab.com.hk and
www.hkexnews.hk , respectively, notices of the reduction. The Company will also, as soon
as practicable following the decision to make such change, issue a supplemental prospectus
updating investors of the change in the number of Offer Shares being offered under the
Share Offer and/or the Offer Price, extend the period under which the Public Offer was
opened for acceptance to allow potential investors sufficient time to consider their
subscriptions or reconsider their submitted subscriptions, and require investors who had
applied for the Public Offer Shares to positively confirm their applications for Offer Shares
in light of the change in the number of Offer Shares and/or the Offer Price. Upon the issue
of such a notice and supplemental prospectus, the revised number of Offer Shares and/or the
Offer Price range will be final and conclusive and the Offer Price, if agreed upon by the
Overall Coordinators (on behalf of the Underwriters) and the Company, will be fixed within
such revised Offer Price range.
Before submitting applications for the Public Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
and/or Offer Price range may not be made until the last day for lodging applications under
the Public Offer. Such notice will also include confirmation or revision, as appropriate, of
the working capital statement and the Share Offer statistics as currently set out in this
prospectus, and any other financial information which may change as a result of any such
reduction. In the absence of any such notice so published, the number of Offer Shares will
not be reduced and/or the Offer Price, if agreed upon by the Overall Coordinators (on behalf
of the Underwriters) and the Company, will under no circumstances be set outside the Offer
Price range as stated in this prospectus.
Announcement of Final Pricing of the Offer Shares
The final pricing of the Offer Shares, the level of indications of interest in the Placing,
the level of applications in the Public Offer, the basis of allocations of the Public Offer
Shares and the results of allocations in the Public Offer are expected to be made available
through a variety of channels in the manner described in the section headed “How to Apply
for Public Offer Shares and Employee Reserved Shares – D. Publication of results” in this
prospectus.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
– 307 –


--- page 317 ---
UNDERWRITING
The Public Offer is fully underwritten by the Public Offer Underwriters under the
terms and conditions of the Underwriting Agreement and is subject to the Overall
Coordinators (for themselves and on behalf of the Underwriters) and the Company agreeing
on the Offer Price. These underwriting arrangements, including the Underwriting Agreement,
are summarised in the section headed “Underwriting” in this prospectus.
CONDITIONS OF THE SHARE OFFER
Acceptance of all applications for Offer Shares will be conditional on:
– the Stock Exchange granting approval for the listing of, and permission to deal in,
the Offer Shares being offered pursuant to the Share Offer, and such listing and
permission not subsequently having been revoked prior to the commencement of
dealings in the Shares on the Stock Exchange;
– the pricing of the Offer Shares having been agreed between the Overall
Coordinators (for themselves and on behalf of the Underwriters) and the
Company;
– the obligations of the Underwriters under the Underwriting Agreement becoming
and remaining unconditional and not having been terminated in accordance with
the terms of the respective agreements,
in each case on or before the dates and times specified in the Underwriting Agreement
(unless and to the extent such conditions are validly waived on or before such dates and
times) and, in any event, not later than the date which is 30 days after the date of this
prospectus.
If, for any reason, the Offer Price is not agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and the Company on or before Monday, 10
July 2023, the Share Offer will not proceed and will lapse.
The consummation of each of the Public Offer and the Placing is conditional upon the
other offering becoming unconditional and not having been terminated in accordance with its
terms.
If the above conditions are not fulfilled or waived prior to the dates and times
specified, the Share Offer will lapse and the Stock Exchange will be notified immediately.
Notice of the lapse of the Public Offer will be published by the Company on the websites of
the Company and the Stock Exchange at www.newmedialab.com.hk and www.hkexnews.hk
respectively, on the next day following such lapse. In such a situation, all application monies
will be returned, without interest, on the terms set out in the section headed “How to Apply
for Public Offer Shares and Employee Reserved Shares – F. Refund of application monies”
in this prospectus. In the meantime, all application monies will be held in separate bank
account(s) with the receiving bank or other bank(s) in Hong Kong licenced under the
Banking Ordinance (Chapter 155 of the Laws of Hong Kong).
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
– 308 –


--- page 318 ---
Share certificates for the Offer Shares will only become valid at 8:00 a.m. on Monday,
17 July 2023; provided that the Share Offer has become unconditional in all respects at or
before that time.
DEALINGS IN THE SHARES
Assuming that the Public Offer becomes unconditional at or before 8:00 a.m. in Hong
Kong on Monday, 17 July 2023, it is expected that dealings in the Shares on the Stock
Exchange will commence at 9:00 a.m. on Monday, 17 July 2023.
The Shares will be traded in board lots of 5,000 Shares each and the stock code of the
Shares will be 1284.
STRUCTURE AND CONDITIONS OF THE SHARE OFFER
– 309 –


--- page 319 ---
NOTICE TO INVESTORS
FULLY ELECTRONIC APPLICATION PROCESS
The Public Offer (except the Employee Preferential Offer) is being conducted in
a fully electronic manner and no printed copies of this prospectus or any copies of
any application forms for use by the public will be provided by the Company in
accordance with the Listing Rules.
This prospectus is available at the website of Stock Exchange at www.hkexnews.hk
under the “ HKEXnews > New Listings > New Listing Information ” section, and the
Company’s website at www.newmedialab.com.hk . If you require a printed copy of this
prospectus, you may download and print from the website addresses above. If you are an
intermediary, broker or agent, please remind your customers, clients or principals, as
applicable, that this prospectus is available online at the website addresses above.
Set out below are procedures through which you can apply for the Public Offer
Shares electronically. No physical channels to accept any application for the Public Offer
Shares by the public will be provided by the Company in accordance with the Listing
Rules.
A. APPLICATIONS FOR PUBLIC OFFER SHARES
1. How to Apply
To apply for Offer Shares, you may:
(1) apply online through the HK eIPO White Form service in the IPO App
(which can be downloaded by searching “ IPO App ” in App Store or Google
Play or downloaded at www.hkeipo.hk/IPOApp or www.tricorglobal.com/
IPOApp )o ra t www.hkeipo.hk ;o r
(2) apply through the CCASS EIPO service to electronically cause HKSCC
Nominees to apply on your behalf, including by:
(i) instructing your broker or custodian who is a CCASS Clearing
Participant or a CCASS Custodian Participant to give electronic
application instructions via CCASS terminals to apply for Public Offer
Shares on your behalf; or
(ii) (if you are an existing CCASS Investor Participant) giving electronic
application instructions through the CCASS Internet System
(https://ip.ccass.com ) or through the CCASS Phone System by calling
+852 2979 7888 (using the procedures in HKSCC’s “An Operating
Guide for Investor Participants” in effect from time to time). HKSCC
can also input electronic application instructions for CCASS Investor
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 310 –


--- page 320 ---
Participants through HKSCC’s Customer Service Centre at 1/F, One &
Two Exchange Square, 8 Connaught Place, Central, Hong Kong by
completing an input request form.
If you apply through channel (1) above, the Offer Shares successfully applied for
will be issued in your own name.
If you apply through channels (2)(i) or (2)(ii) above, the Public Offer Shares
successfully applied for will be issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your or a designated CCASS Participant’s stock
account.
None of you or your joint applicant(s) may make more than one application,
except where you are a nominee and provide the required information in your
application.
In addition, if you are an Eligible Employee, you may also apply for Employee
Reserved Shares by using a PINK application form. However, Eligible Employees may
not apply for or indicate an interest for Placing Shares under the Placing.
The Company, the Joint Sponsors, the Overall Coordinators, the HK eIPO White
Form Service Provider and their respective agents may reject or accept any
application, in full or in part, for any reason at their discretion.
2. Who Can Apply
Eligibility for the Application
Y ou can apply for Public Offer Shares if you or any person(s) for whose
benefit you are applying:
 are 18 years of age or older;
 have a Hong Kong address;
 are outside the United States, and are not a United States Person (as
defined in Regulation S under the U.S. Securities Act); and
 are not a legal or natural person of the PRC.
The number of joint applicants may not exceed four.
If you are a firm, the application must be in the individual members’ names.
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
–3 1 1–


--- page 321 ---
Unless permitted by the Listing Rules, you cannot apply for any Offer
Shares if you are:
 an existing beneficial owner of Shares in the Company and/or any of
its subsidiaries;
 a Director or chief executive officer of the Company and/or any
member of the Group;
 a close associate (as defined in the Listing Rules) of any of the above
persons; and
 have been allocated or have applied for any Public Offer Shares or
otherwise participate in the Placing.
except for Eligible Employees who may apply for the Employee Reserved
Shares apart from application for the Public Offer Shares.
Items Required for the Application
If you apply for Public Offer Shares online through the HK eIPO White
Form service, you must:
 have a valid Hong Kong identity card number/passport number (for
individual applicant) or Hong Kong business registration number/
certificate of incorporation number (for body corporate applicant);
 have a Hong Kong address; and
 provide a valid email address and a contact telephone number.
Y ou can also or alternatively apply for Employee Reserved Shares if you
satisfy the above criteria and are also an Eligible Employee.
If you are applying for the Public Offer Shares online by instructing your
broker or custodian who is a CCASS Clearing Participant or a CCASS Custodian
Participant to give electronic application instructions via CCASS terminals, please
contact them for the items required for the application.
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 312 –


--- page 322 ---
3. Terms and Conditions of an Application
By applying through the application channels specified in this prospectus, you:
 undertake to execute all relevant documents and instruct and authorise the
Company, the Joint Sponsors and/or the Overall Coordinators (or their agents
or nominees), as the Company’s agents, to execute any documents for you
and to do on your behalf all things necessary to register any Public Offer
Shares allocated to you in your name or in the name of HKSCC Nominees
as required by the Articles of Association;
 agree to comply with the Articles of Association, the Companies (Winding
Up and Miscellaneous Provisions) Ordinance and the Cayman Companies
Act;
 confirm that you have read the terms and conditions and application
procedures set out in this prospectus and agree to be bound by them;
 confirm that you have received and read this prospectus and have relied only
on the information and representations in this prospectus in making your
application and will not rely on any other information or representations,
except those in any supplement to this prospectus;
 confirm that you are aware of the restrictions on the Public Offer set out in
this prospectus;
 agree that none of the Company, the Joint Sponsors, the Overall
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital
Market Intermediaries, the Underwriters, the HK eIPO White Form Service
Provider, their respective directors, officers, employees, partners, agents,
advisers and any other parties involved in the Share Offer (the Relevant
Persons ), is or will be liable for any information and representations not in
this prospectus (and any supplement to this prospectus);
 undertake and confirm that you or the person(s) for whose benefit you have
made the application have not applied for or taken up, or indicated an
interest for, and will not apply for or take up, or indicate an interest for, any
Placing Shares nor participated in the Placing;
 agree to disclose to the Company, the Hong Kong Share Registrar, the
receiving bank and the Relevant Persons any personal data which the
Company or any of them may require about you and the person(s) for whose
benefit you have made the application;
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 313 –


--- page 323 ---
 if the laws of any place outside Hong Kong apply to your application, agree
and warrant that you have complied with all such laws and neither the
Company nor the Relevant Persons will breach any laws outside Hong Kong
as a result of the acceptance of your offer to purchase, or any action arising
from your rights and obligations under the terms and conditions in this
prospectus;
 agree that once your application has been accepted, you may not rescind it
because of an innocent misrepresentation;
 agree that your application will be governed by the Laws of Hong Kong;
 represent, warrant and undertake that (i) you understand that the Public Offer
Shares have not been and will not be registered under the U.S. Securities
Act; and (ii) you and any person for whose benefit you are applying for the
Public Offer Shares are outside the United States (within the meaning of
Regulation S) or are a person described in paragraph (h)(3) of Rule 902 of
Regulation S;
 warrant that the information you have provided is true and accurate;
 agree to accept the Public Offer Shares applied for or any lesser number
allocated to you under the application;
 authorise (i) the Company to place your name(s) or the name of HKSCC
Nominees on the Company’s register of members as the holder(s) of any
Public Offer Shares allocated to you and such other registers as required
under the Articles of Association and (ii) the Company and/or the
Company’s agents to send any Share certificate(s) and/or any e-Auto Refund
payment instructions and/or any refund cheque(s) to you or the first-named
applicant for joint applications by ordinary post at your own risk to the
address stated on the application, unless you have fulfilled the criteria
mentioned in “– G. Despatch/ collection of Share certificates/e-Auto Refund
payment instructions/refund cheques– Personal Collection” below to collect
the Share certificate(s) and/or refund cheque(s) in person;
 declare and represent that this is the only application made and the only
application intended by you to be made to benefit you or the person for
whose benefit you are applying;
 understand that the Company, the Directors, the Joint Sponsors and the
Overall Coordinators will rely on your declarations and representations in
deciding whether or not to allocate any of the Public Offer Shares to you
and that you may be prosecuted for making a false declaration;
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 314 –


--- page 324 ---
 (if the application is made for your own benefit) warrant that no other
application has been or will be made for your benefit by giving electronic
application instructions to HKSCC directly or indirectly or through the HK
eIPO White Form service by you or by any one as your agent or by any
other person; and
 (if you are making the application as an agent for the benefit of another
person) warrant that (i) no other application has been or will be made by
you as agent for or for the benefit of that person or by that person or by any
other person as agent for that person by giving electronic application
instructions to HKSCC or to the HK eIPO White Form Service Provider
and (ii) you have due authority to give electronic application instructions on
behalf of that other person as its agent.
For the avoidance of doubt, the Company and all other parties involved in
the preparation of this prospectus acknowledge that each applicant and CCASS
Participant who gives or causes to give electronic application instructions is a
person who may be entitled to compensation under Section 40 of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance (as applied by Section
342E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance).
4. Minimum Application Amount and Permitted Numbers
Y our application through the HK eIPO White Form service or the CCASS EIPO
service must be for a minimum of 5,000 Public Offer Shares and in one of the numbers
set out in the table. Y ou are required to pay the amount next to the number you select.
No. of
Public
Offer
Shares
applied for
Amount
payable on
application
No. of
Public
Offer
Shares
applied for
Amount
payable on
application
No. of
Public
Offer
Shares
applied for
Amount
payable on
application
HK$ HK$ HK$
5,000 4,646.39 60,000 55,756.69 700,000 650,494.75
10,000 9,292.78 70,000 65,049.48 800,000 743,422.55
15,000 13,939.17 80,000 74,342.26 900,000 836,350.38
20,000 18,585.57 90,000 83,635.04 1,000,000 929,278.20
25,000 23,231.95 100,000 92,927.82 2,000,000 1,858,556.40
30,000 27,878.35 200,000 185,855.65 3,000,000 2,787,834.60
35,000 32,524.74 300,000 278,783.45 4,000,000 3,717,112.80
40,000 37,171.13 400,000 371,711.28 5,000,000 4,646,391.00
45,000 41,817.52 500,000 464,639.10 6,000,000 5,575,669.20
50,000 46,463.91 600,000 557,566.92 6,750,000
1 6,272,627.86
Note:
1 Maximum number of Public Offer Shares that you may apply for.
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 315 –


--- page 325 ---
No application for any other number of the Public Offer Shares will be considered
and any such application is liable to be rejected.
5. Applying Through the HK eIPO White Form Service
General
Applicants who meet the criteria in “Who Can Apply” above may apply
through the HK eIPO White Form service for the Offer Shares to be allocated
and registered in their own names through the IPO App or the designated website
at www.hkeipo.hk .
Detailed instructions for application through the HK eIPO White Form
service are set out in the IPO App or on the designated website. If you do not
follow the instructions, your application may be rejected and may not be
submitted to the Company. If you apply through the IPO App or the designated
website, you authorise the HK eIPO White Form Service Provider to apply on
the terms and conditions in this prospectus, as supplemented and amended by the
terms and conditions of the HK eIPO White Form service.
Time for Submitting Applications under the HK eIPO White Form Service
Y ou may submit your application through the HK eIPO White Form service
through the IPO App or the designated website at www.hkeipo.hk (24 hours
daily, except on the last day for applications) from 9:00 a.m. on Friday, 30 June
2023 until 11:30 a.m. on Wednesday, 5 July 2023 and the latest time for
completing full payment of application monies in respect of such applications will
be 12:00 noon on Wednesday, 5 July 2023, the last day for applications, or such
later time as described in “– C. Effect of Bad Weather and/or Extreme Conditions
on the Opening and Closing of the Application Lists” below.
6. Applying Through The CCASS EIPO Service
For Public Offer Shares to be issued in the name of HKSCC Nominees and
deposited directly into CCASS to be credited to your or a designated CCASS
Participant’s stock account, electronically instruct HKSCC via CCASS to cause
HKSCC Nominees to apply for you.
General
CCASS Participants may give electronic application instructions to apply for
the Public Offer Shares and to arrange payment of the money due on application
and payment of refunds under their participant agreements with HKSCC and the
General Rules of CCASS and the CCASS Operational Procedures.
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 316 –


--- page 326 ---
If you are a CCASS Investor Participant , you may give these electronic
application instructions through the CCASS Internet System ( https://ip.ccass.com )
or through the CCASS Phone System by calling +852 2979 7888 (using the
procedures in HKSCC’s “An Operating Guide for Investor Participants” in effect
from time to time). HKSCC can also input electronic application instructions for
CCASS Investor Participants though HKSCC’s Customer Service Centre at 1/F,
One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong by
completing an input request.
If you are not a CCASS Investor Participant , you may instruct your broker
or custodian who is a CCASS Clearing Participant or a CCASS Custodian
Participant to give electronic application instructions via CCASS terminals to
apply for the Public Offer Shares on your behalf.
Y ou will be deemed to have authorised HKSCC and/or HKSCC Nominees to
transfer the details of your application to the Company, the Joint Sponsors, the
Overall Coordinators and the Hong Kong Share Registrar.
Applying through the CCASS EIPO service
Where you have applied through the CCASS EIPO service (either indirectly
through a broker or custodian or directly) and an application is made by HKSCC
Nominees on your behalf:
 HKSCC Nominees will only be acting as a nominee for you and is not
liable for any breach of the terms and conditions of this prospectus;
and
 HKSCC Nominees will do the following things on your behalf:
 agree that the Public Offer Shares to be allocated shall be
registered in the name of HKSCC Nominees and deposited
directly into CCASS for the credit of the CCASS Participant’s
stock account on your behalf or your CCASS Investor
Participant’s stock account;
 agree to accept the Public Offer Shares applied for or any lesser
number allocated;
 undertake and confirm that you have not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or
indicate an interest for, any Offer Shares nor participated in the
Placing;
 (if the electronic application instructions are given for your
benefit) declare that only one set of electronic application
instructions has been given for your benefit;
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 317 –


--- page 327 ---
 (if you are an agent for another person) declare that you have only
given one set of electronic application instructions for the other
person’s benefit and are duly authorised to give those instructions
as its agent;
 confirm that you understand that the Company, the Directors, the
Joint Sponsors and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to
allocate any of the Public Offer Shares to you and that you may
be prosecuted for making a false declaration;
 authorise the Company to place HKSCC Nominees’ name on the
Company’s register of members as the holder of the Public Offer
Shares allocated to you, and despatch Share certificate(s) and/or
refund monies in accordance with the arrangements separately
agreed between the Company and HKSCC;
 confirm that you have read the terms and conditions and
application procedures set out in this prospectus and agree to be
bound by them;
 confirm that you have received and read a copy of this prospectus
and have relied only on the information and representations in this
prospectus in causing the application to be made and will not rely
on any other information or representations, except those in any
supplement to this prospectus;
 agree that neither the Company nor any of the Relevant Persons is
or will be liable for any information and representations not in
this prospectus (and any supplement to this prospectus);
 agree to disclose to the Company, the Hong Kong Share Registrar,
the receiving bank and the Relevant Persons any personal data
which the Company or they may require about you;
 agree (without prejudice to any other rights which you may have)
that once HKSCC Nominees’ application has been accepted, it
cannot be rescinded for innocent misrepresentation;
 agree that any application made by HKSCC Nominees on your
behalf is irrevocable on or before the fifth day after the time of
opening of the application lists (excluding any days which is
Saturday, Sunday or public holiday in Hong Kong), such
agreement to take effect as a collateral contract with the Company,
and to become binding when you give the instructions and such
collateral contract to be in consideration of the Company’s
agreeing that the Company will not offer any Public Offer Shares
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 318 –


--- page 328 ---
to any person on or before the fifth day after the time of opening
of the application lists (excluding any days which is Saturday,
Sunday or public holiday in Hong Kong) except by means of one
of the procedures referred to in this prospectus. However, HKSCC
Nominees may revoke the application on or before the fifth day
after the time of opening of the application lists (excluding any
days which is Saturday, Sunday or public holiday in Hong Kong)
if a person responsible for this prospectus under Section 40 of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance
(as applied by Section 342E of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance) gives a public notice under
that section on or before the fifth day after the time of the
opening of the application lists (excluding any day which is a
Saturday, Sunday or public holiday in Hong Kong) which excludes
or limits that person’s responsibility for this prospectus;
 agree that once HKSCC Nominees’ application is accepted, neither
that application nor your electronic application instructions can be
revoked, and that acceptance of that application will be evidenced
by the announcement of the results of the Public Offer by the
Company;
 agree to the arrangements, undertakings and warranties under the
participant agreement between you and HKSCC, read with the
General Rules of CCASS and the CCASS Operational Procedures,
for giving electronic application instructions to apply for Public
Offer Shares;
 agree with the Company, for itself and for the benefit of each
Shareholder (and so that the Company will be deemed by its
acceptance in whole or in part of the application by HKSCC
Nominees to have agreed, for the Company and on behalf of each
Shareholder, with each CCASS Participant giving electronic
application instructions) to observe and comply with the Articles
of Association, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance the Cayman Companies Act; and
 agree that your application, any acceptance of it and the resulting
contract will be governed by, and construed in accordance with
the Laws of Hong Kong.
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 319 –


--- page 329 ---
Effect of Applying through the CCASS EIPO Service
By applying through the CCASS EIPO service, you (and, if you are joint
applicants, each of you jointly and severally) are deemed to have done the
following things. Neither HKSCC nor HKSCC Nominees will be liable to the
Company or any other person in respect of the things mentioned below:
 instructed and authorised HKSCC to cause HKSCC Nominees (acting
as nominee for the relevant CCASS Participants) to apply for the
Public Offer Shares on your behalf;
 instructed and authorised HKSCC to arrange payment of the maximum
Offer Price, brokerage, SFC transaction levy, Stock Exchange trading
fee and AFRC transaction levy by debiting your designated bank
account and, in the case of a wholly or partially unsuccessful
application and/or if the Offer Price is less than the maximum Offer
Price initially paid on application, refund of the application monies
(including brokerage, SFC transaction levy, Stock Exchange trading fee
and AFRC transaction levy) by crediting your designated bank account;
and
 instructed and authorised HKSCC to cause HKSCC Nominees to do on
your behalf all the things stated in this prospectus.
Time for Inputting Electronic Application Instructions
(1)
CCASS Clearing/Custodian Participants can input electronic application
instructions at the following times on the following dates and times:
Friday, 30 June 2023 – 9:00 a.m. to 8:30 p.m.
Monday, 3 July 2023 – 8:00 a.m. to 8:30 p.m.
Tuesday, 4 July 2023 – 8:00 a.m. to 8:30 p.m.
Wednesday, 5 July 2023 – 8:00 a.m. to 12:00 noon
CCASS Investor Participants can input electronic application instructions
from 9:00 a.m. on Friday, 30 June 2023 until 12:00 noon on Wednesday, 5 July
2023 (24 hours daily, except on Wednesday, 5 July 2023, the last day for
applications).
The latest time for inputting your electronic application instructions will be
12:00 noon on Wednesday, 5 July 2023, the last day for applications, or such later
time as described in “– C. Effect of Bad Weather and/or Extreme Conditions on
the Opening and Closing of the Application Lists” below.
HOW TO APPLY FOR PUBLIC OFFER SHARES AND
EMPLOYEE RESERVED SHARES
– 320 –


--- page 330 ---
Note:
(1) The times in this subsection are subject to change as HKSCC may determine from time
to time with prior notification to CCASS Clearing Participants, CCASS Custodian
Participants and/or CCASS Investor Participants.
If you are instructing your broker or custodian who is a CCASS Clearing
Participant or a CCASS Custodian Participant to give electronic application
instructions via CCASS terminals to apply for the Public Offer Shares on your
behalf, you are advised to contact your broker or custodian for the latest time for
giving such instructions which may be different from the latest time as stated
above.
No Multiple Applications
If you are suspected of having made multiple applications or if more than
one application is made for your benefit, the number of Public Offer Shares
applied for by HKSCC Nominees will be automatically reduced by the number of
Public Offer Shares for which you have given such instructions and/or for which
such instructions have been given for your benefit. Any electronic application
instructions to make an application for the Public Offer Shares given by you or
for your benefit to HKSCC shall be deemed to be an actual application for the
purposes of considering whether multiple applications have been made.
Section 40 of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance
For the avoidance of doubt, the Company and all other parties involved in
the preparation of this prospectus acknowledge that each CCASS Participant who
gives or causes to give electronic application instructions is a person who may be
entitled to compensation under Section 40 of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (as applied by Section 342E of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance).
Personal Data
The following Personal Information Collection Statement applies to any
personal data held by the Company, the Hong Kong Share Registrar, the receiving
bank and the Relevant Persons about you in the same way as it applies to
personal data about applicants other than HKSCC Nominees. By applying through
the CCASS EIPO service, you agree to all of the terms of the Personal
Information Collection Statement below.
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Personal Information Collection Statement
This Personal Information Collection Statement informs applicant for, and
holder of, the Public Offer Shares, of the policies and practises of the Company
and the Hong Kong Share Registrar in relation to personal data and the Personal
Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
Reasons for the collection of your personal data
It is necessary for applicants and registered holders of the Public Offer
Shares to supply correct personal data to the Company or the Company’s agents
and the Hong Kong Share Registrar when applying for the Public Offer Shares or
transferring the Public Offer Shares into or out of their names or in procuring the
services of the Hong Kong Share Registrar.
Failure to supply the requested data may result in your application for the
Public Offer Shares being rejected, or in delay or the inability of the Company or
the Hong Kong Share Registrar to effect transfers or otherwise render their
services. It may also prevent or delay registration or transfers of the Public Offer
Shares which you have successfully applied for and/or the despatch of Share
certificate(s) to which you are entitled.
It is important that the holders of the Public Offer Shares inform the
Company and the Hong Kong Share Registrar immediately of any inaccuracies in
the personal data supplied.
Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever
means) for the following purposes:
 processing your application and refund cheque, where applicable,
verification of compliance with the terms and application procedures set
out in this prospectus and announcing results of allocation of the Public
Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and
elsewhere;
 registering new issues or transfers into or out of the names of the
holders of the Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the Register of Members;
 verifying identities of the holders of the Shares;
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 establishing benefit entitlements of holders of the Shares, such as
dividends, rights issues, bonus issues, etc.;
 distributing communications from the Company and other member of
the Group;
 compiling statistical information and profiles of the holder of the
Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or
to enable the Company and the Hong Kong Share Registrar to
discharge their obligations to holders of the Shares and/or regulators
and/or any other purposes to which the securities’ holders may from
time to time agree.
Transfer of personal data
Personal data held by the Company and the Hong Kong Share Registrar
relating to the holders of the Public Offer Shares will be kept confidential but the
Company and the Hong Kong Share Registrar may, to the extent necessary for
achieving any of the above purposes, disclose, obtain or transfer (whether within
or outside Hong Kong) the personal data to, from or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving
bankers and overseas principal share registrar;
 where applicants for the Public Offer Shares request a deposit into
CCASS, HKSCC or HKSCC Nominees, who will use the personal data
for the purposes of operating CCASS;
 any agents, contractors or third-party service providers who offer
administrative, telecommunications, computer, payment or other
services to the Company or the Hong Kong Share Registrar in
connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or
regulations; and
 any persons or institutions with which the holders of the Public Offer
Shares have or propose to have dealings, such as their bankers,
solicitors, accountants or stockbrokers, etc.
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Retention of personal data
The Company and the Hong Kong Share Registrar will keep the personal
data of the applicants and holders of the Public Offer Shares for as long as
necessary to fulfil the purposes for which the personal data were collected.
Personal data which is no longer required will be destroyed or dealt with in
accordance with the Personal Data (Privacy) Ordinance.
Access to and correction of personal data
Holders of the Public Offer Shares have the right to ascertain whether the
Company or the Hong Kong Share Registrar hold their personal data, to obtain a
copy of that data, and to correct any data that is inaccurate. The Company and the
Hong Kong Share Registrar have the right to charge a reasonable fee for the
processing of such requests. All requests for access to data or correction of data
should be addressed to the Company, at the Company’s registered address
disclosed in “Corporate Information” or as notified from time to time, for the
attention of the secretary, or the Hong Kong Share Registrar for the attention of
the privacy compliance officer.
7. Warning for Electronic Applications
The application for the Public Offer Shares by the CCASS EIPO service (directly
or indirectly through your broker or custodian) is only a facility provided to CCASS
Participants. Similarly, the application for the Public Offer Shares through the HK
eIPO White Form service is only a facility provided by the HK eIPO White Form
Service Provider to public investors. Such facilities are subject to capacity limitations
and potential service interruptions and you are advised not to wait until the last day for
applications to make your electronic application. The Company, the Directors, the
Relevant Persons and the HK eIPO White Form Service Provider take no
responsibility for such applications and provide no assurance that any CCASS
Participant applying through the CCASS EIPO service or person applying through the
HK eIPO White Form service will be allocated any Public Offer Shares.
To ensure that CCASS Investor Participants can give their electronic application
instructions, they are advised not to wait until the last minute to input their instructions
to the systems.
In the event that CCASS Investor Participants have problems in the connection to
CCASS Phone System/CCASS Internet System for submission of electronic application
instructions, they should go to HKSCC’s Customer Service Centre to complete an input
request form for electronic application instructions before 12:00 noon on Wednesday, 5
July 2023, the last day for applications, or such later time as described in “– C. Effect
of Bad Weather and/or Extreme Conditions on the Opening and Closing of the
Application Lists” below.
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8. How Many Applications Y ou Can Make
Multiple applications for the Public Offer Shares are not allowed except by
nominees. If you are a nominee and apply through the HK eIPO White Form service,
in the box marked “For Nominees,” you must include an account number or some other
identification code for each beneficial owner or, in the case of joint beneficial owners,
for each joint beneficial owner when you fill in the application details. If you do not
include this information, the application will be treated as being made for your own
benefit.
In addition, if you are an Eligible Employee, you may also make an additional
application for the Employee Reserved Shares by using the PINK application form.
Only one application for the Employee Reserved Shares is permitted per Eligible
Employee under the Employee Preferential Offering. Multiple applications by any
Eligible Employee are liable to be rejected.
All of your applications will be rejected if more than one application through the
CCASS EIPO service (directly or indirectly through your broker or custodian) or
through the HK eIPO White Form service is made for your benefit (including the part
of the application made by HKSCC Nominees acting on electronic application
instructions), and the number of Public Offer Shares applied by HKSCC Nominees will
be automatically reduced by the number of Public Offer Shares for which you have
given such instructions and/or for which such instructions have been given for your
behalf. If you are suspected of submitting more than one application through the HK
eIPO White Form service or by any other means, all of your applications are liable to
be rejected.
For the avoidance of doubt, giving an electronic application instruction under the
HK eIPO White Form service more than once and obtaining different payment
reference numbers without effecting full payment in respect of a particular reference
number will not constitute an actual application. However, any electronic application
instructions to make an application for the Public Offer Shares given by you or for
your behalf to HKSCC will be deemed to be an actual application for the purposes of
considering whether multiple applications have been made.
The Hong Kong Share Registrar would record all applications into its system and
identify suspected multiple applications with identical names, identification document
numbers and reference numbers according to the Best Practice Note on Treatment of
Multiple / Suspected Multiple Applications (“ Best Practice Note ”) issued by the
Federation of Share Registrars Limited.
With regard to the announcement of results of allocations under the section
headed “Results of Applications Made by Giving Electronic Application Instructions to
HKSCC via CCASS”, the list of identification document number(s) may not be a
complete list of successful applicants, only successful applicants whose identification
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document numbers are provided to HKSCC by CCASS Participants are disclosed.
Applicants who applied for the Offer Shares through their brokers can consult their
brokers to enquire about their application results.
Since applications are subject to personal information collection statements,
beneficial owner identification codes displayed are redacted. Applicants with beneficial
names only but not identification document numbers are not disclosed due to personal
privacy issue.
If an application is made by an unlisted company and:
 the principal business of that company is dealing in securities; and
 you exercise statutory control over that company,
then the application will be treated as being made for your benefit.
Unlisted company means a company with no equity securities listed on the Stock
Exchange.
Statutory control means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting
any part of it which carries no right to participate beyond a specified amount
in a distribution of either profits or capital).
B. HOW MUCH THE PUBLIC OFFER SHARES ARE
The maximum Offer Price is HK$0.92 per Offer Share. Y ou must also pay brokerage of
1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%. This means that for one board lot of 5,000 Shares, you will
pay HK$4,646.39.
Y ou must pay the maximum Offer Price, together with brokerage, SFC transaction levy,
Stock Exchange trading fee and AFRC transaction levy, in full upon application for Public
Offer Shares.
Y ou may submit an application through the HK eIPO White Form service or the
CCASS EIPO service in respect of a minimum of 5,000 Public Offer Shares and if you are
an Eligible Employee at the same time, you may also submit an application using a PINK
application form. If you make an electronic application instruction for more than 5,000
Public Offer Shares, the number of Public Offer Shares you apply for must be in one of the
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specified numbers set out in the section “– A. Applications for Public Offer Shares – 4.
Minimum Application Amount and Permitted Numbers”, or as otherwise, specified in the
IPO App or on the designated website at www.hkeipo.hk .
If your application is successful, brokerage will be paid to the Exchange Participants
(as defined in the Listing Rules), and the SFC transaction levy, the Stock Exchange trading
fee and AFRC transaction levy will be paid to the Stock Exchange (in the case of the SFC
transaction levy, collected by the Stock Exchange on behalf of the SFC, and in the case of
AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
For further details on the Offer Price, see the section headed “Structure and Conditions
of the Share Offer-Pricing and allocation” in this prospectus.
C. EFFECT OF BAD WEATHER AND/OR EXTREME CONDITIONS ON THE
OPENING AND CLOSING OF THE APPLICATION LISTS
The application lists will not open or close if there is/are:
 a tropical cyclone warning signal number 8 or above;
 a “black” rainstorm warning; and/or
 Extreme Conditions,
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, 5 July
2023. Instead, they will open between 11:45 a.m. and 12:00 noon on the next business day
which does not have any of those warnings and/or Extreme Conditions in force in Hong
Kong at any time between 9:00 a.m. and 12:00 noon.
If the application lists do not open and close on Wednesday, 5 July 2023 or if there is/are a
tropical cyclone warning signal number 8 or above, a “black” rainstorm warning signal and/
or Extreme Conditions in force in Hong Kong that may affect the dates mentioned in
“Expected Timetable,” an announcement will be made on the Company’s website at
www.newmedialab.com.hk and the website of Stock Exchange at www.hkexnews.hk .
D. PUBLICATION OF RESULTS
The Company expects to announce the final Offer Price, the level of indications of
interest in the Placing, the level of applications in the Public Offer and the Employee
Preferential Offering and the basis of allocation of the Public Offer Shares and the
Employee Reserved Shares on Friday, 14 July 2023 on its website at
www.newmedialab.com.hk and the website of Stock Exchange at www.hkexnews.hk .
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The results of allocations and the Hong Kong identity card/passport/Hong Kong
business registration/certificate of incorporation numbers of successful applicants under the
Public Offer (if provided) will be available at the times and dates and in the manner set out
below:
 in the announcement to be posted on the Company’s website and the website of Stock
Exchange at www.newmedialab.com.hk and www.hkexnews.hk, respectively, by no
later than 9:00 a.m. on Friday, 14 July 2023;
 from “IPO Results” function in the IPO App or the designated results of allocations
website at www.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResult with a “search
by ID function” on a 24 hour basis from 8:00 a.m. on Friday, 14 July 2023 to 12:00
midnight on Thursday, 20 July 2023; and
 from the allocation results telephone enquiry line by calling +852 3691 8488
between 9:00 a.m. and 6:00 p.m. from Friday, 14 July 2023 to Wednesday, 19
July 2023 (excluding Saturday, Sunday and public holiday in Hong Kong).
If the Company accept your offer to purchase (in whole or in part), which it may do by
announcing the basis of allocations and/or making available the results of allocations
publicly, there will be a binding contract under which you will be required to purchase the
Public Offer Shares if the conditions of the Share Offer are satisfied and the Share Offer is
not otherwise terminated. Further details are set out in the section headed “Structure and
conditions of the Share Offer” in this prospectus.
Y ou will not be entitled to exercise any remedy of rescission for innocent
misrepresentation at any time after acceptance of your application. This does not affect any
other right you may have.
E. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED PUBLIC
OFFER SHARES
Y ou should note the following situations in which the Public Offer Shares will not be
allocated to you:
If your application is revoked:
By applying through the CCASS EIPO service or through the HK eIPO White
Form service, you agree that your application or the application made by HKSCC
Nominees on your behalf cannot be revoked on or before the fifth day after the time of
opening of the application lists (excluding any days which is Saturday, Sunday or
public holiday in Hong Kong). This agreement will take effect as a collateral contract
with the Company.
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Y our application or the application made by HKSCC Nominees on your behalf
may only be revoked on or before the fifth day after the time of opening of the
application lists (excluding any days which is Saturday, Sunday or public holiday in
Hong Kong) in the following circumstances:
 if a person responsible for this prospectus under Section 40 of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (as
applied by Section 342E of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance) gives a public notice under that section on or before
the fifth day after the time of the opening of the application lists (excluding
any day which is a Saturday, Sunday or public holiday in Hong Kong) which
excludes or limits that person’s responsibility for this prospectus; or
 if any supplement to this prospectus is issued, in which case applicants who
have already submitted an application will be notified that they are required
to confirm their applications. If applicants have been so notified but have
not confirmed their applications in accordance with the procedure to be
notified, all unconfirmed applications will be deemed revoked.
If your application or the application made by HKSCC Nominees on your behalf
has been accepted, it cannot be revoked. For this purpose, acceptance of applications
which are not rejected will be constituted by notification in the press of the results of
allocation, and where such basis of allocation is subject to certain conditions or
provides for allocation by ballot, such acceptance will be subject to the satisfaction of
such conditions or results of the ballot, respectively.
If the Company or its agents exercise discretion to reject your application:
The Company, the Joint Sponsors, the Overall Coordinators, the HK eIPO White
Form Service Provider and their respective agents or nominees have full discretion to
reject or accept any application, or to accept only part of any application, without
giving any reasons.
If the allotment of Public Offer Shares is void:
The allotment of Public Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies the
Company of that longer period within three weeks of the closing date of the
application lists.
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If:
 you make multiple applications or are suspected of making multiple
applications;
 you or the person for whose benefit you apply for, have applied for or taken
up, or indicated an interest for, or have been or will be placed or allocated
(including conditionally and/or provisionally) Public Offer Shares and
Placing Shares;
 your payment is not made correctly;
 your electronic application instructions through the HK eIPO White Form
service are not completed in accordance with the instructions, terms and
conditions in the IPO App or on the designated website at www.hkeipo.hk ;
 you apply for more than 6,750,000 Public Offer Shares,
 you apply for more than 1,500,000 Employee Reserved Shares;
 the Company, the Joint Sponsors or the Overall Coordinators believe that by
accepting your application, a violation of applicable securities or other laws,
rules or regulations would result; or
 the Underwriting Agreements do not become unconditional or are terminated.
F. REFUND OF APPLICATION MONIES
If an application is rejected, not accepted or accepted in part only, or if the Offer Price
as finally determined is less than the maximum Offer Price per Offer Share (excluding
brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy
payable thereon) paid on application, or if the conditions of the Public Offer as set out in
“Structure and Conditions of the Share Offer – Conditions of the Share Offer” are not
satisfied or if any application is revoked, the application monies, or the appropriate portion
thereof, together with the related brokerage, SFC transaction levy, Stock Exchange trading
fee and AFRC transaction levy, will be refunded, without interest.
Any refund of your application monies will be made on or before Friday, 14 July 2023.
G. DESPATCH/COLLECTION OF SHARE CERTIFICATES/E-AUTO REFUND
PAYMENT INSTRUCTIONS/REFUND CHEQUES
Y ou will receive one Share certificate for all Public Offer Shares allocated to you
under the Public Offer (except pursuant to applications made through the CCASS EIPO
service where the Share certificates will be deposited into CCASS as described below) and
one share certificate for all Employee Reserved Shares allocated to you under the Employee
Preferential Offering.
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The Company will not issue any temporary evidence of title in respect of the Offer
Shares. The Company will not issue receipt for sums paid on application.
Subject to arrangement on despatch/collection of Share certificates and refund cheques
as mentioned below, any refund cheques and Share certificate(s) are expected to be posted
on or before Friday, 14 July 2023. The right is reserved to retain any Share certificate(s) and
any surplus application monies pending clearance of cheque(s) or banker’s cashier order(s).
Share certificates will only become valid at 8:00 a.m. on Monday, 17 July 2023,
provided that the Public Offer has become unconditional in all respects and the Underwriting
Agreement has not been terminated in accordance with its respective terms at or before that
time. Investors who trade Shares on the basis of publicly available allocation details or prior
to the receipt of the Share certificates or prior to the Share certificates becoming valid do so
entirely at their own risk.
Personal collection
 If you apply through the HK eIPO White Form service:
 If you apply for 1,000,000 Public Offer Shares or more through the HK
eIPO White Form service and your application is wholly or partially
successful, you may collect your Share certificate(s) (where applicable)
in person from the Hong Kong Share Registrar, Tricor Secretaries
Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong
Kong, from 9:00 a.m. to 1:00 p.m. on Friday, 14 July 2023, or any
other place or date notified by the Company. If you are an individual
who is eligible for personal collection, you must not authorise any
other person to collect for you.
 If you are a corporate applicant which is eligible for personal
collection, your authorised representative must bear a letter of
authorisation from your corporation stamped with your corporation’s
chop. Both individuals and authorised representatives must produce, at
the time of collection, evidence of identity acceptable to the Hong
Kong Share Registrar.
 If you do not personally collect your Share certificate(s) within the
time specified for collection, they will be sent to the address specified
in your application instructions by ordinary post and at your own risk.
 If you apply for less than 1,000,000 Public Offer Shares through the
HK eIPO White Form service, your Share certificate(s) (where
applicable) will be sent to the address specified in your application
instructions on or before Friday, 14 July 2023 by ordinary post and at
your own risk.
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 If you apply and pay the application monies from a single bank
account, any refund monies will be despatched to that bank account in
the form of e-Auto Refund payment instructions. If you apply and pay
the application monies from multiple bank accounts, any refund monies
will be despatched to the address specified in your application
instructions in the form of refund cheque(s) in your name (or, in the
case of joint applications, the first– named applicant) by ordinary post
and at your own risk.
 If you apply through the CCASS EIPO service:
Allocation of Public Offer Shares
 For the purposes of allocating Public Offer Shares, HKSCC
Nominees will not be treated as an applicant. Instead, each
CCASS Participant who gives electronic application instructions
or each person for whose benefit instructions are given will be
treated as an applicant.
Deposit of Share Certificates into CCASS and Refund of Application
Monies
 If your application is wholly or partially successful, your Share
certificate(s) will be issued in the name of HKSCC Nominees and
deposited into CCASS for the credit of your designated CCASS
Participant’s stock account or your CCASS Investor Participant
stock account on Friday, 14 July 2023 or on any other date
determined by HKSCC or HKSCC Nominees.
 The Company expects to publish the application results of CCASS
Participants (and where the CCASS Participant is a broker or
custodian, the Company will include information relating to the
relevant beneficial owner), your Hong Kong identity card/passport/
Hong Kong business registration number or other identification
code (Hong Kong business registration number for corporations)
and the basis of allocations of the Public Offer Shares in the
manner as described in “Publication of Results” above on Friday,
14 July 2023. Y ou should check the announcement published by
the Company and report any discrepancies to HKSCC before 5:00
p.m. on Friday, 14 July 2023 or such other date as determined by
HKSCC or HKSCC Nominees.
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 If you have instructed your broker or custodian who is a CCASS
Clearing Participant or a CCASS Custodian Participant to give
electronic application instructions via CCASS terminals to apply
for the Public Offer Shares on your behalf, you can also check the
number of the Public Offer Shares allocated to you and the
amount of refund monies (if any) payable to you with that broker
or custodian.
 If you have applied as a CCASS Investor Participant, you can also
check the number of Public Offer Shares allocated to you and the
amount of refund monies (if any) payable to you via the CCASS
Phone System and the CCASS Internet System (under the
procedures contained in HKSCC’s “An Operating Guide for
Investor Participants” in effect from time to time) on Friday, 14
July 2023. Immediately following the credit of the Public Offer
Shares to your stock account and the credit of the refund monies
to your bank account, HKSCC will also make available to you an
activity statement showing the number of Public Offer Shares
credited to your CCASS Investor Participant stock account and the
amount of refund monies (if any) credited to your designated bank
account.
 Refund of your application monies (if any) in respect of wholly
and partially unsuccessful applications and/or difference between
the Offer Price and the maximum Offer Price per Offer Share
initially paid on application (including brokerage, SFC transaction
levy, Stock Exchange trading fee and AFRC transaction levy but
without interest) will be credited to your designated bank account
or the designated bank account of your broker or custodian on
Friday, 14 July 2023.
If you apply using a PINK Application Form
 If you are an Eligible Employee and you apply for 1,000,000
Employee Reserved Shares or more under the Employee
Preferential Offering and have provided all information required
by your Application Form, you may collect your refund cheque(s)
an/or share certificate(s) from the Hong Kong Share Registrar,
Tricor Secretaries Limited, at 17/F, Far East Finance Centre, 16
Harcourt Road, Hong Kong, from 9:00 a.m. to 1:00 p.m. on
Friday, 14 July 2023 or any other place or date as notified by the
Company.
If you are an individual who is eligible for personal collection,
you must not authorise any other person to collect for you.
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If you do not collect your refund cheque(s) and/or share
certificate(s) personally within the time specified for collection,
they will be despatched promptly to the address specified in your
Application Form by ordinary post at your own risk.
If you apply for less than 1,000,000 Employee Reserved Shares
your refund cheque(s) and/or share certificate(s) will be sent to
the address on the relevant Application Form on or before Friday,
14 July 2023 by ordinary post and at your own risk.
H. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares and
the Company complies with the stock admission requirements of HKSCC, the Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the Shares on the Stock Exchange
or any other date HKSCC chooses. Settlement of transactions between Exchange Participants
(as defined in the Listing Rules) is required to take place in CCASS on the second
settlement day after any trading day.
All activities under CCASS are subject to the General Rules of CCASS and CCASS
Operational Procedures in effect from time to time.
Investors should seek the advice of their stockbroker or other professional adviser for
details of the settlement arrangements as such arrangements may affect their rights and
interests.
All necessary arrangements have been made to enable the Shares to be admitted into
CCASS.
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The following is the text of a report, prepared for the purpose of incorporation in this
prospectus, received from our Company’s Reporting Accountants, Ernst & Young, Certified
Public Accountants, Hong Kong.
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺 979 噆
⤑⏋✱ᷧ⺎ 27 㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF NEW MEDIA LAB LIMITED, EMPEROR CORPORATE FINANCE
LIMITED AND LEGO CORPORATE FINANCE LIMITED
Introduction
We report on the historical financial information of New Media Lab Limited (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-61, which
comprises the consolidated statements of profit or loss, statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the
years ended 31 December 2020, 2021 and 2022 (the “Relevant Periods”), and the
consolidated statements of financial position of the Group as at 31 December 2020, 2021
and 2022, and the statements of financial position of the Company as at 31 December 2021
and 2022 and a summary of significant accounting policies and other explanatory
information (together, the “Historical Financial Information”). The Historical Financial
Information set out on pages I-4 to I-61 forms an integral part of this report, which has been
prepared for inclusion in the prospectus of the Company dated 30 June 2023 (the
“Prospectus”) in connection with the initial listing of the shares of the Company on the
Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of
presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical
Financial Information, respectively, and for such internal control as the directors determine
is necessary to enable the preparation of the Historical Financial Information that is free
from material misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and
to report our opinion to you. We conducted our work in accordance with Hong Kong
Standard on Investment Circular Reporting Engagements 200 Accountants’ Reports on
Historical Financial Information in Investment Circulars issued by the Hong Kong Institute
of Certified Public Accountants (“HKICPA”). This standard requires that we comply with
ethical standards and plan and perform our work to obtain reasonable assurance about
whether the Historical Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 345 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in
accordance with the basis of presentation and the basis of preparation set out in notes 2.1
and 2.2 to the Historical Financial Information, respectively, in order to design procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. Our work also included evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the Historical
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group as at 31
December 2020, 2021 and 2022 and of the Company as at 31 December 2021 and 2022, and
of the financial performance and cash flows of the Group for each of the Relevant Periods
in accordance with the basis of presentation and the basis of preparation set out in notes 2.1
and 2.2 to the Historical Financial Information, respectively.
Report on matters under the Rules Governing the Listing of Securities on the Stock
Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 346 ---
No historical financial statements for the Company
As at the date of this report, no statutory financial statements have been prepared for
the Company since its date of incorporation.
Ernst & Y oung
Certified Public Accountants
Hong Kong
30 June 2023
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 347 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of
this accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical
Financial Information is based, were audited by Ernst & Y oung in accordance with Hong
Kong Standards on Auditing issued by the HKICPA (the “Underlying Financial Statements”).
The Historical Financial Information is presented in Hong Kong dollars and all values
are rounded to the nearest thousand (HK$’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 348 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Y ear ended 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
REVENUE 5 211,589 245,199 240,678
Other income and gains 5 17,421 4,437 7,311
Employee benefit expense (99,474) (104,622) (94,684)
Production costs (47,250) (53,893) (59,522)
Printing costs (8,430) (2,884) (2,982)
Depreciation and amortisation (11,346) (14,015) (17,079)
Other expenses, net (13,997) (28,943) (21,252)
Finance costs 7 (1,817) (3,159) (5,626)
PROFIT BEFORE TAX 6 46,696 42,120 46,844
Income tax expense 10 (5,528) (9,071) (7,413)
PROFIT FOR THE YEAR 41,168 33,049 39,431
Attributable to:
Owners of the parent 41,168 33,049 39,431
EARNINGS PER SHARE
A TTRIBUTABLE TO
ORDINARY EQUITY
HOLDERS OF THE PARENT 12
Basic and diluted N/A N/A N/A
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 349 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
PROFIT FOR THE YEAR 41,168 33,049 39,431
OTHER COMPREHENSIVE INCOME/
(LOSS)
Other comprehensive income/(loss) that may
be reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of
foreign operations 100 (8) 32
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR 41,268 33,041 39,463
Attributable to:
Owners of the parent 41,268 33,041 39,463
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 350 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
NON-CURRENT ASSETS
Property, plant and equipment 14 907 24,971 22,610
Right-of-use assets 15 17,683 74,714 62,789
Intangible assets 16 1,016 725 408
Prepayments, deposits and other
receivables 18 2,652 3,027 2,960
Deferred tax assets 24 1,202 351 508
Total non-current assets 23,460 103,788 89,275
CURRENT ASSETS
Trade receivables 17 63,417 78,814 71,470
Prepayments, deposits and other
receivables 18 3,273 8,384 9,144
Tax recoverable – 905 –
Pledged bank deposit 19 800 800 800
Cash and cash equivalents 19 31,466 23,525 19,930
Total current assets 98,956 112,428 101,344
CURRENT LIABILITIES
Trade payables 20 8,037 5,439 6,107
Other payables and accruals 21 20,849 51,272 18,371
Interest-bearing bank borrowings 22 10,318 35,000 21,000
Lease liabilities 15 10,460 9,858 10,536
Tax payable 2,860 1,363 3,594
Total current liabilities 52,524 102,932 59,608
NET CURRENT ASSETS 46,432 9,496 41,736
TOTAL ASSETS LESS CURRENT
LIABILITIES 69,892 113,284 131,011
NON-CURRENT LIABILITIES
Lease liabilities 15 12,483 62,692 52,956
Provisions 23 2,415 6,557 6,557
Total non-current liabilities 14,898 69,249 59,513
Net assets 54,994 44,035 71,498
EQUITY
Equity attributable to owners of the
parent
Issued capital 25 –––
Reserves 26 54,994 44,035 71,498
Total equity 54,994 44,035 71,498
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 351 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Issued
capital
Exchange
fluctuation
reserve
Other
reserves
Accumulated
losses
Total
equity
Notes HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(note 25) (note 26)
At 1 January 2020 – (76) 93,407 (53,845) 39,486
Profit for the year – – – 41,168 41,168
Other comprehensive income for
the year:
Exchange differences on
translation of foreign
operations – 100 – – 100
Total comprehensive income for
the year – 100 – 41,168 41,268
Dividends 11 – – – (25,760) (25,760)
At 31 December 2020 – 24* 93,407* (38,437)* 54,994
At 1 January 2021 – 24 93,407 (38,437) 54,994
Profit for the year – – – 33,049 33,049
Other comprehensive loss for the
year:
Exchange differences on
translation of foreign
operations – (8) – – (8)
Total comprehensive income for
the year – (8) – 33,049 33,041
Issue of shares 25 –
# ––––
Dividends 11 – – – (44,000) (44,000)
At 31 December 2021 – 16* 93,407* (49,388)* 44,035
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 352 ---
Attributable to owners of the parent
Issued
capital
Exchange
fluctuation
reserve
Other
reserves
Accumulated
losses
Total
equity
Notes HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(note 25) (note 26)
At 1 January 2022 – 16 93,407 (49,388) 44,035
Profit for the year – – – 39,431 39,431
Other comprehensive income for
the year:
Exchange differences on
translation of foreign
operations – 32 – – 32
Total comprehensive income for
the year – 32 – 39,431 39,463
Dividend 11 – – – (12,000) (12,000)
At 31 December 2022 – 48* 93,407* (21,957)* 71,498
# Amount less than HK$1,000
* These reserve accounts comprise the consolidated reserves of approximately HK$54,994,000,
HK$44,035,000 and HK$71,498,000 in the consolidated statements of financial position as at 31 December
2020, 2021 and 2022, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 353 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
CASH FLOWS FROM OPERA TING
ACTIVITIES
Profit before tax 46,696 42,120 46,844
Adjustments for:
Finance costs 7 1,817 3,159 5,626
Interest income 5 (23) (47) (93)
Depreciation of property, plant and
equipment 6 1,747 1,251 3,989
Depreciation of right-of-use assets 6 9,411 12,347 12,620
Amortisation of intangible assets 6 188 417 470
Loss on disposal/write-off of
property, plant and equipment,
net 6 260 29 –
Gain on lease modification 5 (354) (1,193) –
Gain on reversal of provisions for
reinstatement costs 5 – (2,415) –
Covid-19-related rent concession
from a lessor 5 – (29) –
Impairment/(reversal of
impairment) of trade receivables,
net 6 74 2,107 (360)
59,816 57,746 69,096
Decrease/(increase) in trade
receivables 8,890 (17,504) 7,704
Decrease/(increase) in prepayments,
deposits and other receivables 1,071 (7,113) (608)
Increase/(decrease) in trade payables (240) (2,598) 668
Increase/(decrease) in other payables
and accruals (8,011) 10,080 (12,900)
Cash generated from operations 61,526 40,611 63,960
Hong Kong profits tax paid (20,545) (10,622) (4,434)
Net cash flows from operating
activities 40,981 29,989 59,526
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest received 23 5 8
Purchases of items of property, plant
and equipment (184) (4,998) (21,629)
Proceeds from disposals of items of
property, plant and equipment 49 – –
Additions to intangible assets (1,204) (126) (153)
Net cash flows used in investing
activities (1,316) (5,119) (21,774)
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 354 ---
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
CASH FLOWS FROM FINANCING
ACTIVITIES
Interest paid (361) (935) (1,932)
Dividends paid (21,000) (44,000) (12,000)
New bank borrowings 15,477 35,000 46,686
New other borrowings 32,500 – –
Repayment of bank borrowings (5,159) (10,318) (60,686)
Repayment of other borrowings (36,484) – –
Principal portion of lease payments (8,861) (10,326) (9,753)
Interest portion of lease payments (1,456) (2,224) (3,694)
Net cash flows used in financing activities (25,344) (32,803) (41,379)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIV ALENTS 14,321 (7,933) (3,627)
Cash and cash equivalents at beginning of
year 17,052 31,466 23,525
Effect of foreign exchange rate changes, net 93 (8) 32
CASH AND CASH EQUIV ALENTS A T END
OF YEAR 31,466 23,525 19,930
ANAL YSIS OF BALANCE OF CASH AND
CASH EQUIV ALENTS
Cash and bank balances 31,466 23,525 19,930
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 355 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
2021 2022
Notes HK$’000 HK$’000
NON-CURRENT ASSET
Investment in a subsidiary 13 14,229 14,229
CURRENT ASSETS
Due from a subsidiary 13 51,000 66,000
Prepayments 2,761 4,050
Total current assets 53,761 70,050
CURRENT LIABILITY
Due to a subsidiary 13 46,226 63,653
NET CURRENT ASSETS 7,535 6,397
Net assets 21,764 20,626
EQUITY
Issued capital 25 –* –*
Reserves 26 21,764 20,626
Total equity 21,764 20,626
* Amount less than HK$1,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 356 ---
II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
New Media Lab Limited is a limited liability company incorporated in the Cayman Islands on 22 March
2021. The address of the registered office of the Company is Cricket Square, Hutchins Drive, PO Box 2681,
Grand Cayman, KY1- 1111, Cayman Islands. During the Relevant Periods, the principal place of business of the
Company was located at 9th Floor, Store Friendly Tower (formerly known as New Media Tower), 82 Hung To
Road, Kwun Tong, Kowloon, Hong Kong. Starting from the end of November 2021, the principal place of
business of the Company has been relocated to 8th Floor, Tower 1, The Quayside, 77 Hoi Bun Road, Kwun Tong,
Kowloon, Hong Kong.
The Company is an investment holding company. During the Relevant Periods, the Company’s subsidiaries
were involved in the following principal activities:
/L50188provision of digital and print advertising products and services, and related businesses (collectively,
“digital and print media businesses”); and
/L50188magazine and book publishing
In the opinion of the directors of the Company, the immediate holding company and the ultimate holding
company of the Company are New Media Lab Group Holdings Limited and Albert Y eung Holdings Limited (“AY
Holdings”), respectively, both are incorporated in the British Virgin Islands, and AY Holdings is legally
wholly-owned by First Trust Services AG acting as the trustee of The Albert Y eung Discretionary Trust, a private
discretionary trust set up by Dr. Y eung Sau Shing, Albert (“Dr. Albert Y eung”).
For the purposes of this report, all companies (including their respective “associates” (for this particular
sentence and in this specific context, have the meaning as defined under Rule 14A.12-15 of the Rules Governing
the Listing of Securities on The Stock Exchange of Hong Kong Limited)) directly or indirectly controlled by
respective private discretionary trusts set up by Dr. Albert Y eung other than the Group are collectively referred to
as the “Emperor Group”.
The Company and its subsidiaries now comprising the Group underwent the Reorganisation as set out in the
paragraph headed “Reorganisation” in the section headed “History, Reorganisation and Corporate Structure” in the
Prospectus. Apart from the Reorganisation, the Company has not commenced any business or operation since its
incorporation.
As at the end of the Relevant Periods, the Company had direct and indirect interests in its subsidiaries, all
of which are private limited liability companies (or, if incorporated outside Hong Kong, have substantially similar
characteristics to a private company incorporated in Hong Kong), the particulars of which are set out below:
Name
Place and date of
incorporation/
registration and place
of operations
Nominal
value of
issued
ordinary/
registered
share capital
Percentage of equity
attributable to the
Company Principal activities
Direct Indirect
New Media Group
Limited (note (a))
British Virgin Islands
15 August 2007
HK$78,000 100 – Investment holding
New Media Group
Publishing Limited
(note (b))
Hong Kong
14 July 1981
HK$800,000 – 100 Provision of group
equipment services
and digital and print
media businesses
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 357 ---
Name
Place and date of
incorporation/
registration and place
of operations
Nominal
value of
issued
ordinary/
registered
share capital
Percentage of equity
attributable to the
Company Principal activities
Direct Indirect
New Media Group
Digital Services
Limited (note (b))
Hong Kong
4 July 1997
HK$2 – 100 Investment holding and
digital media
business
Weekend Weekly
Publishing Limited
(note (b))
Hong Kong
7 May 1999
HK$100 – 100 Registered publisher
New Monday Publishing
Limited (note (b))
Hong Kong
17 December 1999
HK$2 - 100 Registered publisher
Media Publishing
Limited (note (b))
Hong Kong
18 February 2000
HK$2 – 100 Magazine and book
publishing, digital
and print media
businesses and
copyright holding
New Media Services
Consultant Company
Limited (note (b))
Hong Kong
14 April 2000
HK$2 – 100 Provision of group
administrative
services
Time Y ear Limited (note
(b))
Hong Kong
3 November 2000
HK$2 – 100 Trademark holding and
licensing
ʮ̡
Guangdong Xinchuan
Network Technology
Company Limited
(note (c)) *
The People’s Republic of
China (the “PRC”)/
Mainland China
10 September 2008
HK$7,600,000 – 100 Provision of group
information
technology support
services
Reach Gain Limited
(note (b))
Hong Kong
26 May 2010
HK$1 – 100 Digital media business
Fast Fame Limited
(note (b))
Hong Kong
1 June 2018
HK$1 – 100 Digital media business
NMG (Hong Kong)
Company Limited
(note (b))
Hong Kong
5 June 2019
HK$1 – 100 Magazine publishing
and digital and print
media businesses
* The English name of this entity registered in the PRC represents the best efforts made by the
management of the Company to directly translate its Chinese name as it does not register any official
English name.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 358 ---
Notes:
(a) No audited financial statements have been prepared for this entity for the years ended 31 December
2020, 2021 and 2022, as this entity was not subject to any statutory audit requirements under the
relevant rules and regulations in its jurisdiction of incorporation.
(b) The statutory financial statements of these entities for the years ended 31 December 2020, 2021 and
2022 prepared under Hong Kong Financial Reporting Standards (“HKFRSs”) were audited by Ernst &
Y oung, Hong Kong.
(c)
ʮ̡ is registered as a wholly-foreign-owned enterprise under PRC law. The
statutory financial statements of the entity for the years ended 31 December 2020, 2021 and 2022
prepared under PRC GAAP were audited by Guangdong Shu Cheng Certified Public Accountants
Company Limited (
ʮ̡), certified public accountants registered in the PRC.
2.1 BASIS OF PRESENTATION
Pursuant to the Reorganisation, as more fully explained in the paragraphs headed “Reorganisation” in the
section headed “History, Reorganisation and Corporate Structure” in the Prospectus, the Company became the
holding company of the companies now comprising the Group on 22 March 2021. The Reorganisation mainly
involved the incorporation of the Company, inserting the Company at the top of an existing group and the transfer
of equity interests in New Media Group Limited from certain then shareholders of New Media Group Limited to
the Company. The Reorganisation has not resulted in any changes of economic substance of the businesses of New
Media Group Limited and its subsidiaries before and after the Reorganisation. Accordingly, for the purpose of this
report, the Historical Financial Information has been presented as a continuation of New Media Group Limited
and its subsidiaries as if the Reorganisation had been completed at the beginning of the Relevant Periods.
Accordingly, the consolidated statements of profit or loss, the consolidated statements of comprehensive
income, the consolidated statements of changes in equity and the consolidated statements of cash flows of the
Group for the Relevant Periods are prepared as if the current group structure had been in existence throughout the
Relevant Periods. The consolidated statements of financial position of the Group as at 31 December 2020, 2021
and 2022 have been prepared to present the assets and liabilities of the companies now comprising the Group, as
if the current group structure had been in existence at those dates. No adjustments are made to reflect fair values,
or recognise any new assets or liabilities as a result of the Reorganisation.
All intra-group transactions and balances have been eliminated on consolidation.
2.2 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with HKFRSs (which include all
Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations)
issued by the HKICPA and accounting principles generally accepted in Hong Kong. All HKFRSs effective for the
accounting period commencing from 1 January 2022, together with the relevant transitional provisions, have been
early adopted by the Group in the preparation of the Historical Financial Information throughout the Relevant
Periods.
The Historical Financial Information has been prepared under the historical cost convention.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 359 ---
2.3 ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL REPORTING STANDARDS
The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet
effective, in the Historical Financial Information:
Amendments to HKFRS 10 and HKAS 28 (2011) Sale or Contribution of Assets between an Investor
and its Associate or Joint V enture 3
Amendments to HKFRS 16 Lease Liability in a Sale and Leaseback 2
HKFRS 17 Insurance Contracts 1
Amendments to HKFRS 17 Insurance Contracts 1, 5
Amendment to HKFRS 17 Initial Application of HKFRS 17 and HKFRS 9
– Comparative Information 6
Amendments to HKAS 1 Classification of Liabilities as Current or
Non-current (the “2020 Amendments”) 2, 4
Amendments to HKAS 1 Non-current Liabilities with Covenants (the “2022
Amendments”) 2
Amendments to HKAS 1 and HKFRS Practice
Statement 2
Disclosure of Accounting Policies 1
Amendments to HKAS 8 Definition of Accounting Estimates 1
Amendments to HKAS 12 Deferred Tax related to Assets and Liabilities
arising from a Single Transaction 1
1 Effective for annual periods beginning on or after 1 January 2023
2 Effective for annual periods beginning on or after 1 January 2024
3 No mandatory effective date yet determined but available for adoption
4 As a consequence of the 2022 Amendments, the effective date of the 2020 Amendments was deferred
to annual periods beginning on or after 1 January 2024. In addition, as a consequence of the 2020
Amendments and 2022 Amendments, Hong Kong Interpretation 5 Presentation of Financial
Statements – Classification by the Borrower of a Term Loan that Contains a Repayment on Demand
Clause was revised to align the corresponding wording with no change in conclusion
5 As a consequence of the amendments to HKFRS 17 issued in October 2020, HKFRS 4 was amended
to extend the temporary exemption that permits insurers to apply HKAS 39 rather than HKFRS 9 for
annual periods beginning before 1 January 2023
6 An entity that chooses to apply the transition option relating to the classification overlay set out in
this amendment shall apply it on initial application of HKFRS 17
The Group is in the process of making a detailed assessment of the impact of these new and revised
HKFRSs upon initial application. So far, the Group considers that these new and revised HKFRSs may result in
changes in certain accounting policies and are unlikely to have a significant impact on the Group’s financial
performance and financial position in the period of initial application.
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Subsidiaries
A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the
Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee
(i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the
Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the
Group considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 360 ---
(c) the Group’s voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control described above. A change in the
ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and
liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative
translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii)
the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The
Group’s share of components previously recognised in other comprehensive income is reclassified to profit
or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly
disposed of the related assets or liabilities.
Business combinations other than those under common control
Business combinations are accounted for using the acquisition method. The consideration transferred
is measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets
transferred by the Group, liabilities assumed by the Group to the former owners of the acquiree and the
equity interests issued by the Group in exchange for control of the acquiree. For each business combination,
the Group elects whether to measure the non-controlling interests in the acquiree that are present ownership
interests and entitle their holders to a proportionate share of net assets in the event of liquidation at fair
value or at the proportionate share of the acquiree’s identifiable net assets. All other components of
non-controlling interests are measured at fair value. Acquisition-related costs are expensed as incurred.
The Group determines that it has acquired a business when the acquired set of activities and assets
includes an input and a substantive process that together significantly contribute to the ability to create
outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic circumstances
and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in
host contracts of the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at
its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the
acquisition date. Contingent consideration classified as an asset or liability is measured at fair value with
changes in fair value recognised in profit or loss. Contingent consideration that is classified as equity is not
remeasured and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred, the amount recognised for non-controlling interests and any fair value of the Group’s previously
held equity interests in the acquiree over the identifiable net assets acquired and liabilities assumed. If the
sum of this consideration and other items is lower than the fair value of the net assets acquired, the
difference is, after reassessment, recognised in profit or loss as a gain on bargain purchase.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. The Group performs its annual impairment test of
goodwill as at 31 December. For the purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups
of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the Group are assigned to those units or groups of units.
APPENDIX I ACCOUNTANTS’ REPORT
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Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of
cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating
unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. An
impairment loss recognised for goodwill is not reversed in a subsequent period.
Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and
part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of
is included in the carrying amount of the operation when determining the gain or loss on the disposal.
Goodwill disposed of in these circumstances is measured based on the relative value of the operation
disposed of and the portion of the cash-generating unit retained.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required
(other than deferred tax assets and financial assets), the asset’s recoverable amount is estimated. An asset’s
recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less
costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets, in which case the recoverable
amount is determined for the cash-generating unit to which the asset belongs. In testing a cash-generating
unit for impairment, a portion of the carrying amount of a corporate asset (e.g., a headquarters building) is
allocated to an individual cash-generating unit if it can be allocated on a reasonable and consistent basis or,
otherwise, to the smallest group of cash-generating units.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable
amount. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. An impairment loss is charged to profit or loss in the period in which it arises in
those expense categories consistent with the function of the impaired asset.
An assessment is made at the end of each reporting period as to whether there is an indication that
previously recognised impairment losses may no longer exist or may have decreased. If such an indication
exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than
goodwill is reversed only if there has been a change in the estimates used to determine the recoverable
amount of that asset, but not to an amount higher than the carrying amount that would have been
determined (net of any depreciation/amortisation) had no impairment loss been recognised for the asset in
prior years. A reversal of such an impairment loss is credited to the statement of profit or loss in the period
in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate* or joint venture of the other entity (or of a parent, subsidiary or
fellow subsidiary of the other entity);
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 362 ---
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate* of the third
entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group
or an entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the parent of the Group.
* Has the meaning as defined in HKAS 28 Investments in Associates and Joint V entures.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment
losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly
attributable costs of bringing the asset to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such
as repairs and maintenance, is normally charged to the statement of profit or loss in the period in which it
is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection
is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property,
plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual
assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write-off the cost of each item of property,
plant and equipment to its residual value over its estimated useful life. The estimated useful lives of
property, plant and equipment are as follows:
Leasehold improvements Over the lease terms
Furniture, fixtures and equipment 3 to 5 years
Where parts of an item of property, plant and equipment have different useful lives, the cost of that
item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual
values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each
financial year end.
An item of property, plant and equipment including any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any
gain or loss on disposal or retirement recognised in the statement of profit or loss in the year the asset is
derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is the fair value at the date of acquisition. The useful
lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
subsequently amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method
for an intangible asset with a finite useful life are reviewed at least at each financial year end.
Mobile applications are amortised on the straight-line basis over their estimated useful lives of 3
years.
APPENDIX I ACCOUNTANTS’ REPORT
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Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for
short-term leases. The Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease
terms and the estimated useful lives of the assets as follows:
Properties 2 to 8 years
Equipment 80 months
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of
the asset.
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments
that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects
the Group exercising the option to terminate the lease. The variable lease payments that do not
depend on an index or a rate are recognised as an expense in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing
rate at the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease
payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a
change in assessment of an option to purchase the underlying asset.
(c) Short-term leases
The Group applies the short-term lease recognition exemption to its short-term leases of office
premises and car parks (that is those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). Lease payments on short-term leases are
recognised as an expense on a straight-line basis over the lease term.
APPENDIX I ACCOUNTANTS’ REPORT
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Financial assets
Initial recognition and measurement
Financial assets of the Group are classified, at initial recognition, as subsequently measured at
amortised cost.
The classification of financial assets at initial recognition depends on the financial asset’s contractual
cash flow characteristics and the Group’s business model for managing them. With the exception of trade
receivables that do not contain a significant financing component or for which the Group has applied the
practical expedient of not adjusting the effect of a significant financing component, the Group initially
measures a financial asset at its fair value, plus in the case of a financial asset not at fair value through
profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or
for which the Group has applied the practical expedient are measured at the transaction price determined
under HKFRS 15 in accordance with the policies set out for “Revenue recognition” below.
In order for a financial asset (debt instrument) to be classified and measured at amortised cost, it
needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal
amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair
value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and
measured at amortised cost are held within a business model with the objective to hold financial assets in
order to collect contractual cash flows, while financial assets classified and measured at fair value through
other comprehensive income are held within a business model with the objective of both holding to collect
contractual cash flows and selling. Financial assets which are not held within the aforementioned business
models are classified and measured at fair value through profit or loss.
All regular way purchases and sales of financial assets are recognised on the trade date, that is, the
date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or
sales of financial assets that require delivery of assets within the period generally established by regulation
or convention in the marketplace.
Subsequent measurement of financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest method and
are subject to impairment. Gains and losses are recognised in the statement of profit or loss when the asset
is derecognised, modified or impaired.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of
financial position) when:
/L50188the rights to receive cash flows from the asset have expired; or
/L50188the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
“pass-through” arrangement; and either (a) the Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all
the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of
ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards
of the asset nor transferred control of the asset, the Group continues to recognise the transferred asset to the
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 365 ---
extent of the Group’s continuing involvement. In that case, the Group also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset and the maximum amount of consideration that the
Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not
held at fair value through profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The expected cash flows will include
cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual
terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default
events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial recognition, a loss allowance is required for
credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a
lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition. When making the assessment, the Group compares the risk
of a default occurring on the financial instrument as at the reporting date with the risk of a default
occurring on the financial instrument as at the date of initial recognition and considers reasonable and
supportable information that is available without undue cost or effort, including historical and
forward-looking information.
The Group generally considers a financial asset in default when contractual payments are 90 days
past due, while for certain debtors/under certain circumstances, the Group may assess whether there is
reasonable and supportable information, including the Group’s credit risk control practices and the historical
recovery rate of financial assets over 90 days past due, to demonstrate that a more lagging default criterion
is more appropriate. However, the Group may also consider a financial asset to be in default when internal
or external information indicates that the Group is unlikely to receive the outstanding contractual amounts
in full before taking into account any credit enhancements held by the Group. A financial asset is written
off when there is no reasonable expectation of recovering the contractual cash flows.
Financial assets at amortised cost are subject to impairment under the general approach and they are
classified within the following stages for measurement of ECLs except for trade receivables and contract
assets which apply the simplified approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial
recognition and for which the loss allowance is measured at an amount equal to
12-month ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial
recognition but that are not credit-impaired financial assets and for which the loss
allowance is measured at an amount equal to lifetime ECLs
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased
or originated credit-impaired) and for which the loss allowance is measured at an
amount equal to lifetime ECLs
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 366 ---
Simplified approach
The Group uses a provision matrix, or other applicable approaches, to calculate ECLs for trade
receivables and contract assets that is generally based on its historical loss experience, supplemented/
substituted by relevant external information as appropriate, especially when there is insufficient sources of
appropriate entity-specific data, and adjusted for forward-looking factors specific to the debtors and the
economic environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities of the Group are classified, at initial recognition, as loans and borrowings or
payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.
Subsequent measurement of financial liabilities at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost, using the effective interest rate method unless the effect of discounting would be
immaterial, in which case they are stated at cost. Gains and losses are recognised in the statement of profit
or loss when the liabilities are derecognised as well as through the effective interest rate amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is
included in the statement of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled,
or expires.
When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and a recognition of a new liability, and
the difference between the respective carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, cash and cash equivalents comprise
cash on hand and demand deposits, and short term highly liquid investments that are readily convertible
into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short
maturity of generally within three months when acquired, less bank overdrafts which are repayable on
demand and form an integral part of the Group’s cash management.
For the purpose of the consolidated statements of financial position, cash and cash equivalents
comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are
not restricted as to use.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 367 ---
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a
past event and it is probable that a future outflow of resources will be required to settle the obligation,
provided that a reliable estimate can be made of the amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value
at the end of the reporting period of the future expenditures expected to be required to settle the obligation.
The increase in the discounted present value amount arising from the passage of time is recognised in profit
or loss.
A provision for reinstatement costs is recognised when a contractual obligation under the terms of a
lease arrangement has arisen to reinstate a leased property at the end of the lease. Reinstatement costs are
provided at the value of the expected costs to settle the obligation at the end of the reporting period using
estimated cash flows and an equivalent asset is recognised and depreciated over the term of the lease
arrangement. The estimated future costs of reinstatement are reviewed, and adjusted if appropriate, at least
at each financial year end.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit
or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted
by the end of each reporting period, taking into consideration interpretations and practices prevailing in the
countries/jurisdictions in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the
reporting period between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
/L50188when the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
/L50188in respect of taxable temporary differences associated with investments in subsidiaries and
associates, when the timing of the reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the carryforward of
unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences, and the
carryforward of unused tax credits and unused tax losses can be utilised, except:
/L50188when the deferred tax asset relating to the deductible temporary differences arises from the
initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; and
/L50188in respect of deductible temporary differences associated with investments in subsidiaries and
associates, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 368 ---
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all
or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of
each reporting period and are recognised to the extent that it has become probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of each reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a
net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis over the periods that the costs, for which it
is intended to compensate, are expensed.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is transferred
to the customers at an amount that reflects the consideration to which the Group expects to be entitled in
exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is
estimated to which the Group will be entitled in exchange for transferring the goods or services to the
customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur
when the associated uncertainty with the variable consideration is subsequently resolved.
When the contract contains a financing component which provides the customer with a significant
benefit of financing the transfer of goods or services to the customer for more than one year, revenue is
measured at the present value of the amount receivable, discounted using the discount rate that would be
reflected in a separate financing transaction between the Group and the customer at contract inception.
When the contract contains a financing component which provides the Group with a significant financial
benefit for more than one year, revenue recognised under the contract includes the interest expense accreted
on the contract liability under the effective interest method. For a contract where the period between the
payment by the customer and the transfer of the promised goods or services is one year or less, the
transaction price is not adjusted for the effects of a significant financing component, using the practical
expedient in HKFRS 15.
(a) Advertising revenues
Revenue from print advertising is generally recognised at the point in time when the print
advertisement is published. For programmatic advertising, revenues are generally recognised as impressions
are delivered. Revenues from non-programmatic digital advertising are generally recognised over the period
that the related products or services are delivered/rendered, as the customer simultaneously received and
consumes the benefits provided by the Group, or upon complete satisfaction the related performance
obligation, such as, at the point in time when the related product(s) are published/delivered, based on the
nature of the products or services provided. Advertising revenues are recognised net of provisions for
estimated sales incentives, including rebates, rate adjustments or discounts, as appropriate.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 369 ---
Incentive arrangements
Specific incentives may be offered to certain customers once certain advertising spending
amount for the relevant period exceeds particular threshold specified in the contract. To estimate the
expected amount of incentives to be offered, which in turn will affect the net consideration that the
Group will be entitled under the arrangement, the Group applies the method that it expects to better
predict the amount. The requirements on constraining estimates of variable consideration are applied
and a liability relating to the expected incentives is recognised as a reduction of revenues (i.e., the
amount not included in the transaction price), based on the total amount of estimated expected
incentives related to the underlying revenue transactions during the relevant period. Measurement of
such expected incentives is estimated mainly based on historical experience, current economic trends
and accumulated advertising spending to date.
(b) Circulation revenues
Circulation revenues mainly include revenues from sales/subscriptions of magazines and books.
Circulation revenue is based on the number of copies of magazines and books and/or digital subscriptions
sold, and the associated rates charged to the respective customers, net of provisions for related returns.
Circulation revenue is recognised at the point in time when control of the asset is transferred to the
customer, generally upon delivery of the magazines or books. Revenue from subscriptions (including digital
subscriptions) is recognised over the subscription term, generally as the printed or digital publication is
delivered.
Returns of unsold copies of publications
Some contracts with distributors include provisions for returns of unsold copies of magazines
and books within certain period. The Group generally uses the expected value method to estimate the
goods that will not be returned because this method best predicts the amount of variable
consideration to which the Group will be entitled. The requirements in HKFRS 15 on constraining
estimates of variable consideration are applied in order to determine the amount of variable
consideration that can be included in the transaction price. The Group records the estimated impact of
such returns as a reduction of revenue (i.e., the amount not included in the transaction price). To
estimate publications that will be returned, the Group considers historical returns, current economic
trends and changes in end customers’ demand and acceptance of the Group’s publications.
Other income
Interest income is recognised on an accrual basis using the effective interest method by applying the
rate that exactly discounts the estimated future cash receipts over the expected life of the financial
instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is
earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are
recognised as revenue when the Group performs under the contract (i.e., transfers control of the related
goods or services to the customer).
Refund liabilities
A refund liability is recognised for the obligation to refund some or all of the consideration received
(or receivable) from a customer and is measured at the amount the Group ultimately expects it will have to
return to the customer. The Group updates its estimates of refund liabilities (and the corresponding change
in the transaction price) at the end of each reporting period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 370 ---
Employee benefits
Pension schemes
The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the
“MPF Scheme”) in Hong Kong under the Hong Kong Mandatory Provident Fund Schemes Ordinance for
those employees who are eligible to participate in the MPF Scheme. Contributions are made based on a
percentage of the employees’ basic salaries and are charged to profit or loss as they become payable in
accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately from
those of the Group in an independently administered fund. The Group’s employer contributions vest fully
with the employees when contributed into the MPF Scheme.
The employees of the Group’s subsidiary which operates in Mainland China is required to participate
in a central pension scheme operated by the local municipal government. The subsidiary is required to
contribute certain percentage of its payroll costs to the central pension scheme. The contributions are
charged to the statement of profit or loss as they become payable in accordance with the rules of the central
pension scheme.
Dividends
For certain entities of the Group, interim dividends are simultaneously proposed and declared because
the respective entities’ memorandum and articles of association grant the directors of the respective entities
the authority to declare interim dividends. Consequently, interim dividends are recognised immediately as a
liability when they are proposed and declared by the directors of the respective entities.
Foreign currencies
The Historical Financial Information is presented in Hong Kong dollars, which is the Company’s
functional currency. Each entity in the Group determines its own functional currency and items included in
the financial statements of each entity are measured using that functional currency. Foreign currency
transactions recorded by the entities in the Group are initially recorded using their respective functional
currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at the functional currency rates of exchange ruling at the end of the
reporting period. Differences arising on settlement or translation of monetary items are recognised in the
statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value
in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
The gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with
the recognition of the gain or loss on change in fair value of the item (i.e., translation difference on the
item whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also
recognised in other comprehensive income or profit or loss, respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income on the
derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the
date of initial transaction is the date on which the Group initially recognises the non-monetary asset or
non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in
advance, the Group determines the transaction date for each payment or receipt of the advance
consideration.
The functional currency of an overseas subsidiary is currency other than the Hong Kong dollar. As at
the end of the reporting period, the assets and liabilities of this entity are translated into Hong Kong dollars
at the exchange rates prevailing at the end of the reporting period and its statement of profit or loss is
translated into Hong Kong dollars at the exchange rates that approximate the foreign exchange rates ruling
at the dates of the transactions. The resulting exchange differences are recognised in other comprehensive
income and accumulated in the exchange fluctuation reserve. On disposal of a foreign operation, the
component of other comprehensive income relating to that particular foreign operation is recognised in the
statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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For the purpose of the consolidated statements of cash flows, the cash flows of an overseas
subsidiary are translated into Hong Kong dollars at the exchange rates ruling at the dates of the cash flows.
Frequently recurring cash flows of the overseas subsidiary which arise throughout the year are translated
into Hong Kong dollars at the weighted average exchange rate for the year.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets
or liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following
judgements, apart from those involving estimations, which have the most significant effect on the amounts
recognised in the Historical Financial Information:
Identification of a customer and gross versus net revenue recognition
In the normal course of the Group’s businesses, an intermediary may be involved. When the
intermediary is determined to be the Group’s customer, the Group records revenue based on the amount it
expects to receive from the intermediary.
In other circumstances, the determination of whether revenue should be reported on a gross or net
basis is based on an assessment of whether the Group is acting as the principal or an agent in the
transaction. If the Group is acting as a principal in a transaction, the Group reports revenue on a gross
basis. If the Group is acting as an agent in a transaction, the Group reports revenue on a net basis. The
determination of whether the Group is acting as a principal or an agent in a transaction involves judgment
and is based on an evaluation of the terms of the arrangement. The Group is considered a principal if it
controls a promised good or service before transferring that good or service to the customer. The Group
considers several factors to determine if it controls the good or service and therefore is the principal. These
factors include: (a) if the Group has primary responsibility for fulfilling the promise; (b) if the Group has
inventory risk before the good or service is transferred to the customer or after the transfer of control to the
customer; and (c) if the Group has discretion in establishing price for the specified good or service.
Significant judgement in determining the lease term of a contract with a renewal option
The Group has a lease contract that includes an extension option. At the commencement date of the
lease, the Group applied judgement in evaluating whether or not to exercise the option to renew the lease.
That is, it considered all relevant factors that create an economic incentive for it to exercise the renewal.
After the commencement date, the Group reassesses the lease term if there is a significant event or change
in circumstances that is within its control and affects its ability to exercise or not to exercise the option to
renew the lease.
The Group includes the renewal period as part of the lease term for a lease of its office premises due
to the significance of the office premises to its operations and the significant leasehold improvements
undertaken (or expected to be undertaken) over the term of the relevant lease contract that are expected to
have significant economic benefit for the Group when the option to extend that lease becomes exercisable.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end
of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year, are described below.
APPENDIX I ACCOUNTANTS’ REPORT
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Revenue recognition-estimating variable consideration for expected returns and incentives
The Group estimates variable consideration to be included in the transaction price for certain
transactions, including the sales of magazines and books subject to returns of unsold copies and certain
advertising arrangements subject to incentives to customers. The requirements in HKFRS 15 on constraining
estimates of variable consideration are applied in order to determine the amount of variable consideration
that can be included in the transaction price.
When estimating returns, the Group may use the historical data of each product to come up with
expected return percentages. These percentages and other relevant information including current economic
trends, changes in end customers demand and acceptance of the Group’s publications are considered to
determine the expected value of the variable consideration. Any significant changes in experience as
compared to historical return pattern will impact the expected return percentages estimated by the Group.
Determining whether a customer will likely be entitled to an incentive depends on the customer’s
historical net advertising spending pattern and incentive entitlements, current economic trends, and
accumulated net advertising spending to date. Any significant changes as compared to historical net
advertising spending patterns and rebate entitlements of customers will impact the expected incentive
percentages estimated by the Group.
The Group updates its assessment of expected returns and incentives at the end of each reporting
period and the obligations for returns and incentives are adjusted accordingly. Estimates of expected returns
and incentives are sensitive to changes in circumstances and the Group’s past experience regarding returns
and incentives entitlements may not be representative of customers’ actual returns and incentives
entitlements in the future.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets
(including the right-of-use assets) at the end of each reporting period. Non-financial assets with finite useful
lives are tested for impairment when there are indicators that the carrying amounts may not be recoverable.
An impairment exists when the carrying value of an asset or a cash-generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The calculation of
the fair value less costs of disposal is based on available data from binding sales transactions in an arm’s
length transaction of similar assets or observable market prices less incremental costs for disposing of the
asset. When value in use calculations are undertaken, management must estimate the expected future cash
flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the
present value of those cash flows.
Provision for reinstatement costs
The Group makes provision for reinstatement costs associated with certain lease properties under
operating leases attributable to the Group based on the estimates of the expected costs to be incurred to
settle the relevant contractual obligations under the terms of the leases at the end of the reporting period,
which are subject to uncertainties and might differ from the actual costs to be incurred. Significant
judgements and estimates are required, including, inter alia, making various assumptions with reference to
past experience and available information to determine the expected costs to be incurred. Further details are
included in note 23 to the Historical Financial Information.
Provision for expected credit losses on trade receivables
The Group uses a provision matrix, or other applicable approaches, to calculate ECLs for trade
receivables. Generally, the provision matrix may initially be based on the Group’s historical observed
default rates, supplemented/substituted by relevant external information as appropriate, especially when
there is insufficient sources of appropriate entity-specific data. The Group will calibrate the matrix to adjust
the historical credit loss experience/relevant external information with forward-looking information. At each
reporting date, the historical observed default rates/relevant external information are updated and changes in
the forward-looking estimates are analysed.
APPENDIX I ACCOUNTANTS’ REPORT
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The assessment of the correlation among historical observed default rates/relevant external
information, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is
sensitive to changes in circumstances and forecast economic conditions. The Group’s historical credit loss
experience/relevant external information and forecast of economic conditions may also not be representative
of a customer’s actual default in the future. The information about the ECLs on the Group’s trade
receivables is disclosed in note 17 to the Historical Financial Information.
Leases – Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses an
incremental borrowing rate (“IBR”) to measure lease liabilities. The IBR is the rate of interest that the
Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR
therefore reflects what the Group “would have to pay”, which requires estimation when no observable rates
are available (such as for subsidiaries that do not enter into financing transactions) or when it needs to be
adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the
subsidiary’s functional currency). The Group estimates the IBR using observable inputs when available and
is required to make certain entity-specific estimates.
4. OPERATING SEGMENT INFORMATION
The Group principally focuses on digital and print media businesses and magazine and book publishing.
Information reported to the Group’s chief operating decision maker, for the purpose of resources allocation and
performance assessment, focuses on the operating results of the Group as a whole as the Group’s resources are
integrated and no discrete operating segment information is available. Accordingly, no operating segment
information is presented.
Geographical information
(a) Revenue from external customers
Substantially all of the Group’s revenues from external customers during each of the Relevant
Periods were attributed to Hong Kong based on the location in which the relevant Group’s activities which
generated such revenues were carried out.
(b) Non-current assets
Substantially all of the Group’s non-current assets as at the end of each of the Relevant Periods were
located in Hong Kong based on the location of the assets.
Information about major customers
Revenues from external customers derived from digital and print media businesses and magazine and
book publishing contributing over 10% of the total revenue of the Group for the years ended 31 December
2020, 2021 and 2022 are as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Customer A 28,954 34,790 24,168
Customer B 27,313 N/A* N/A*
Revenues from these customers include revenue from a group of entities which are known to be
under common control of these customers.
* Less than 10% of the total revenue of the Group in the respective years.
APPENDIX I ACCOUNTANTS’ REPORT
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5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Revenue from contracts with customers
(i) Disaggregated revenue information
Types of goods or services
Digital advertising (other than
programmatic advertising) 157,401* 195,071 188,090
Programmatic advertising 22,851 36,787 41,079
180,252 231,858 229,169
Print advertising 12,608 9,849 8,608
Circulation 18,729 3,492 2,901
Total revenue from contracts
with customers 211,589 245,199 240,678
Timing of revenue
recognition
At a point in time 151,852 176,526 167,722
Over time 59,737 68,673 72,956
Total revenue from contracts
with customers 211,589 245,199 240,678
* Including project management fees charged under various print advertising contracts of
approximately HK$0.4 million for the year ended 31 December 2020.
The following table shows the amounts of revenue recognised in the Relevant Periods that were
included in the contract liabilities at the beginning of each of the Relevant Periods and recognised from
performance obligations satisfied in previous periods:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Revenue recognised that was included in
contract liabilities at the beginning of
each of the Relevant Periods:
Circulation 467 263 255
Digital advertising 853 2,187 1,226
1,320 2,450 1,481
APPENDIX I ACCOUNTANTS’ REPORT
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Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Revenue recognised from performance
obligations satisfied in previous periods:
Sale of goods not previously recognised
due to constraints on variable
consideration 637 198 37
(ii) Performance obligations
Information about the Group’s performance obligations is summarised below:
Digital advertising (including programmatic advertising)
The performance obligation is generally satisfied upon the related services are performed or
products are delivered/published, or over time as services are rendered, and payment is normally due
upon delivery or within 90 days from the date of billing.
Print advertising
The performance obligation is generally satisfied upon the print advertisement is published and
payment is generally due within 90 days from the date of billing.
Circulation
The performance obligation is generally satisfied upon delivery of the magazines or books and
payment is generally based on terms agreed by the relevant parties as set out in respective
agreements. For subscription revenue, payment in advance or at the beginning of each relevant period
is normally required.
Practical expedient
As a practical expedient, the transaction prices allocated to the remaining performance
obligations (unsatisfied or partially unsatisfied) are not disclosed because all the remaining
performance obligations are part of respective contracts that have an original expected duration of
one year or less.
APPENDIX I ACCOUNTANTS’ REPORT
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An analysis of other income and gains is as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Other income and gains
Bank interest income 23 5 8
Accretion of interest on rental deposit paid – 42 85
Government subsidies* 15,959 – 5,680
Gain on lease modification 354 1,193 –
Gain on reversal of provisions for reinstatement
costs – 2,415 –
Commission income 496 191 145
Licensing of content 318 283 107
Sales of scrap 17 61 44
Covid-19-related rent concession from
a lessor – 29 –
Others 254 218 1,242
17,421 4,437 7,311
* The government subsidies represent subsidies granted under the Employment Support Scheme of the
Government of the Hong Kong Special Administrative Region. There were no unfulfilled conditions or
contingencies relating to the subsidies.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 377 ---
6. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Y ear ended 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
Cost of goods sold and other services
rendered 55,680 56,777 62,504
Depreciation of property, plant and
equipment 14 1,747 1,251 3,989
Depreciation of right-of-use assets 15 9,411 12,347 12,620
Amortisation of intangible assets 16 188 417 470
Lease payments not included in the
measurement of lease liabilities 15 707 355 219
Auditor’s remuneration 350 350 395
Listing expenses – 9,356 4,125
Loss on disposal/write-off of property,
plant and equipment, net 260 29 –
Employee benefit expense (including
directors’ and chief executive’s
remuneration
(note 8) ):
Salaries, bonuses and other benefits 95,545 101,206 91,259
Pension scheme contributions*
(defined contribution schemes) 3,929 3,416 3,425
99,474 104,622 94,684
Impairment/(reversal of impairment) of
trade receivables, net 17 74 2,107 (360)
Foreign exchange differences, net 85 196 (29)
* There are no forfeited contribution that may be used by the Group as the employer to reduce the
existing level of contributions. At 31 December 2020, 2021 and 2022, the Group had no forfeited
contributions available to reduce its contributions to the pension scheme(s) in future years.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December
2020 2021 2022
Note HK$’000 HK$’000 HK$’000
Interest on bank borrowings 199 935 1,932
Interest on other borrowing 162 – –
Interest on lease liabilities 15 1,456 2,224 3,694
1,817 3,159 5,626
APPENDIX I ACCOUNTANTS’ REPORT
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8. DIRECTORS’ AND CHIEF EXECUTIVE’S REMUNERATION
A director of the Company received remuneration from a subsidiary now comprising the Group for his
appointment as a director of this subsidiary during the Relevant Periods. The remuneration of this director is
included in the Historical Financial Information for each of the Relevant Periods.
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Fees – – –
Other emoluments:
Salaries and allowances 2,092 2,112 2,112
Performance related bonuses* – 4,604 –
Pension scheme contributions 18 18 18
2,110 6,734 2,130
* Based on the Group’ s performance.
(a) Independent non-executive directors
Subsequent to the end of the Relevant Periods, Ms. Cheng Ka Y u, Mr. Mak Kam Chiu and Mr. Niu
Zhongjie were appointed as independent non-executive directors of the Company on 26 June 2023.
There were no fees or other emoluments paid or payable to the independent non-executive directors
of the Company during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 379 ---
(b) Executive directors and the chief executive
Ms. Fan Man Seung, V anessa, Mr. Wong Chi Fai and Mr. Lee Y at Pui, Royce were appointed as
executive directors of the Company on 22 March 2021.
Salaries and
allowances
Performance
related
bonus
Pension
scheme
contributions
Total
remuneration
HK$’000 HK$’000 HK$’000 HK$’000
Y ear ended 31 December 2020
Ms. Fan Man Seung, V anessa ––––
M r . W o n g C h i F a i ––––
Mr. Lee Y at Pui, Royce* 2,092 – 18 2,110
2,092 – 18 2,110
Y ear ended 31 December 2021
Ms. Fan Man Seung, V anessa ––––
M r . W o n g C h i F a i ––––
Mr. Lee Y at Pui, Royce* 2,112 4,604 18 6,734
2,112 4,604 18 6,734
Y ear ended 31 December 2022
Ms. Fan Man Seung, V anessa ––––
M r . W o n g C h i F a i ––––
Mr. Lee Y at Pui, Royce* 2,112 – 18 2,130
2,112 – 18 2,130
* Chief executive officer
During the Relevant Periods, no remuneration was paid or payable by the Group to the executive
directors and the chief executive as an inducement to join or upon joining the Group or as compensation for
the loss of office.
There was no arrangement under which a director or a chief executive waived or agreed to waive any
remuneration during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
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9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees of the Group during the Relevant Periods included one director, details of
whose remuneration are set out in note 8 above. Details of the remuneration for each of the Relevant Periods of
the remaining four highest paid employees of the Group who are neither a director nor chief executive of the
Company are as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Salaries and allowances 5,548 5,075 5,712
Discretionary bonuses 984 1,596 –
Pension scheme contributions 72 72 72
6,604 6,743 5,784
The number of non-director and non-chief executive highest paid employees whose remuneration fell within
the following bands is as follows:
Y ear ended 31 December
2020 2021 2022
HK$1,000,001 to HK$1,500,000 1 1 3
HK$1,500,001 to HK$2,000,000 3 2 1
HK$2,000,001 to HK$2,500,000 – 1 –
444
During the Relevant Periods, no remuneration was paid or payable by the Group to the non-director and
non-chief executive highest paid employees as an inducement to join or upon joining the Group or as
compensation for the loss of office.
10. INCOME TAX
Hong Kong profits tax has been provided at the rate of 16.5% for each of the Relevant Periods on the
estimated assessable profits arising in Hong Kong during each of the Relevant Periods.
For the subsidiary established in Mainland China, Corporate Income Tax has been provided at the rate of
25% for each of the Relevant Periods.
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Current – Hong Kong
Charge for the year 5,757 8,214 7,547
Overprovision in prior years (2) – (13)
Current – Mainland China
Charge for the year 19 6 36
Deferred (note 24) (246) 851 (157)
Total tax charge for the year 5,528 9,071 7,413
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


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A reconciliation of the tax expense applicable to profit before tax at the statutory rate for the jurisdiction in
which the majority of the Group’s subsidiaries are domiciled to the tax expense at the Group’s effective tax rate is
as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Profit before tax 46,696 42,120 46,844
Tax at the Hong Kong statutory tax rate of 16.5% 7,705 6,950 7,729
Higher tax rate enacted by overseas authority (58) (33) (179)
Adjustments in respect of current tax of previous
periods (2) – (13)
Income not subject to tax (2,637) (402) (943)
Expenses not deductible for tax 573 2,615 826
Tax losses not recognised 86 60 60
Others (139) (119) (67)
Tax charge at the Group’s effective tax rate 5,528 9,071 7,413
11. DIVIDENDS
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Dividends recognised as distributions 25,760 44,000 12,000
On 3 July 2020, New Media Group Limited declared a dividend of HK$15,000,000 to its then shareholders
in respect of the year ended 31 December 2019.
On 28 October 2020 and 30 December 2020, New Media Group Limited declared dividends of
HK$6,000,000 and HK$4,760,000 (note 27(a)), respectively, to its then shareholders in respect of the year ended
31 December 2020.
On 3 March 2021, New Media Group Limited declared a dividend of HK$10,000,000 to its then
shareholders in respect of the year ended 31 December 2020.
On 26 April 2021, the Company declared a dividend of HK$4,000,000 to its shareholders.
On 12 August 2021, the Company declared a dividend of HK$30,000,000 to its shareholders.
On 29 August 2022, the Company declared a dividend of HK$12,000,000 to its shareholders.
Dividend per share information is not presented, as, in the opinion of the directors of the Company, its
inclusion for the purpose of the Historical Financial Information is not considered meaningful due to the
Reorganisation and the basis of presentation of the Group for the Relevant Periods as disclosed in note 2.1 to the
Historical Financial Information.
12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
Earnings per share information is not presented, as, in the opinion of the directors of the Company, its
inclusion for the purpose of the Historical Financial Information is not considered meaningful due to the
Reorganisation and the basis of presentation of the Group for the Relevant Periods as disclosed in note 2.1 to the
Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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13. INVESTMENT IN A SUBSIDIARY
Company
As at 31 December
2021 2022
HK$’000 HK$’000
Unlisted investment, at cost 14,229 14,229
Particulars of the subsidiary, New Media Group Limited, are disclosed in note 1 to the Historical
Financial Information.
The balances with subsidiaries are non-trade related, unsecured, non-interest-bearing and repayable on
demand.
14. PROPERTY, PLANT AND EQUIPMENT
Leasehold
improvements
Furniture,
fixtures and
equipment Total
HK$’000 HK$’000 HK$’000
31 December 2020
At 1 January 2020:
Cost 9,668 22,758 32,426
Accumulated depreciation (8,388) (21,269) (29,657)
Net carrying amount 1,280 1,489 2,769
At 1 January 2020, net of accumulated depreciation 1,280 1,489 2,769
Additions 4 180 184
Disposals (257) (52) (309)
Depreciation provided for the year (807) (940) (1,747)
Exchange realignment 10 – 10
At 31 December 2020, net of accumulated depreciation 230 677 907
At 31 December 2020:
Cost 9,317 20,343 29,660
Accumulated depreciation (9,087) (19,666) (28,753)
Net carrying amount 230 677 907
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 383 ---
Leasehold
improvements
Furniture,
fixtures and
equipment Total
HK$’000 HK$’000 HK$’000
31 December 2021
At 1 January 2021:
Cost 9,317 20,343 29,660
Accumulated depreciation (9,087) (19,666) (28,753)
Net carrying amount 230 677 907
At 1 January 2021, net of accumulated depreciation 230 677 907
Additions 20,896 4,445 25,341
Disposal/write-off (2) (27) (29)
Depreciation provided for the year (456) (795) (1,251)
Exchange realignment 1 2 3
At 31 December 2021, net of accumulated depreciation 20,669 4,302 24,971
At 31 December 2021:
Cost 22,363 8,613 30,976
Accumulated depreciation (1,694) (4,311) (6,005)
Net carrying amount 20,669 4,302 24,971
31 December 2022
At 1 January 2022:
Cost 22,363 8,613 30,976
Accumulated depreciation (1,694) (4,311) (6,005)
Net carrying amount 20,669 4,302 24,971
At 1 January 2022, net of accumulated depreciation 20,669 4,302 24,971
Additions 631 997 1,628
Depreciation provided for the year (2,818) (1,171) (3,989)
Exchange realignment – – –
At 31 December 2022, net of accumulated depreciation 18,482 4,128 22,610
At 31 December 2022:
Cost 22,841 8,665 31,506
Accumulated depreciation (4,359) (4,537) (8,896)
Net carrying amount 18,482 4,128 22,610
APPENDIX I ACCOUNTANTS’ REPORT
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15. LEASES
The Group as a lessee
The Group has lease contracts for various properties, carparks and items of equipment used in its
operations. Lease of equipment has lease term of 80 months, while properties generally have lease terms
between 2 and 8 years. Certain properties and carparks have lease terms of 12 months or less.
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements during the Relevant
Periods are as follows:
Properties Equipment Total
HK$’000 HK$’000 HK$’000
As at 1 January 2020 20,255 10,226 30,481
Lease modification (3,414) – (3,414)
Depreciation charge (6,854) (2,557) (9,411)
Exchange realignment 27 – 27
As at 31 December 2020 and 1 January 2021 10,014 7,669 17,683
Additions 72,475 – 72,475
Lease modification (early termination of lease term*) (3,120) – (3,120)
Depreciation charge (9,790) (2,557) (12,347)
Exchange realignment 23 – 23
As at 31 December 2021 and 1 January 2022 69,602 5,112 74,714
Addition 695 – 695
Depreciation charge (10,063) (2,557) (12,620)
As at 31 December 2022 60,234 2,555 62,789
* An early termination notice was served pursuant to the terms of the corresponding tenancy
agreement to terminate the tenancy in December 2021.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 385 ---
(b) Lease liabilities
The carrying amount of lease liabilities and the movements during the Relevant Periods are as
follows:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Carrying amount at 1 January 35,542 22,943 72,550
New leases – 64,249 695
Lease modifications (3,768) (4,313) –
Accretion of interest recognised during the
year (note 7) 1,456 2,224 3,694
Covid-19-related rent concession from a
lessor – (29) –
Payments (10,317) (12,550) (13,447)
Exchange realignment 30 26 –
Carrying amount at 31 December 22,943 72,550 63,492
Analysed into:
Current portion 10,460 9,858 10,536
Non-current portion 12,483 62,692 52,956
The maturity analysis of lease liabilities is disclosed in note 31 to the Historical Financial
Information.
(c) The amounts recognised in profit or loss in relation to leases are as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Interest on lease liabilities 1,456 2,224 3,694
Depreciation charge of right-of-use assets 9,411 12,347 12,620
Lease payments not included in the
measurement of lease liabilities (included
in other expenses, net) 707 355 219
Gain on lease modification (354) (1,193) –
Covid-19-related rent concession from a
lessor – (29) –
Total amount recognised in profit or loss 11,220 13,704 16,533
(d) The total cash outflow for leases is disclosed in note 27(c) to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 386 ---
16. INTANGIBLE ASSETS
Mobile
applications
HK$’000
31 December 2020, 2021 and 2022
Cost at 1 January 2020 –
Additions – acquired separately 1,204
Amortisation provided during the year (188)
At 31 December 2020 and 1 January 2021 1,016
Additions – acquired separately 126
Amortisation provided during the year (417)
At 31 December 2021 and 1 January 2022 725
Additions – acquired separately 153
Amortisation provided during the year (470)
At 31 December 2022 408
At 31 December 2020:
Cost 1,204
Accumulated amortisation (188)
Net carrying amount 1,016
At 31 December 2021:
Cost 1,330
Accumulated amortisation (605)
Net carrying amount 725
At 31 December 2022:
Cost 1,483
Accumulated amortisation (1,075)
Net carrying amount 408
17. TRADE RECEIV ABLES
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Trade receivables 67,387 84,891 76,570
Impairment (3,970) (6,077) (5,100)
63,417 78,814 71,470
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 387 ---
The Group’s trading terms/settlement arrangements with its customers are generally based on specific
contractual terms or in accordance with specific arrangements/trade practices with reference to their historical
payment records and/or business relationships, which might include payment in advance, payment upon delivery/
service rendered or with credit period extending up to 90 days. Settlements of circulation income from sales of
magazine are generally made by respective distributors to the Group around 10 days after the verification of the
quantity of magazines sold. The Group seeks to maintain strict control over its outstanding receivables. Overdue
balances are reviewed by management. The Group does not hold any collateral or other credit enhancements over
its trade receivable balances. Trade receivables are non-interest-bearing.
Included in the Group’s trade receivables are amounts due from related companies, which are members of a
group in which AY Holdings is the ultimate holding company (the “AY Holdings Group”), of approximately nil,
HK$10,000 and HK$400,000 as at 31 December 2020, 2021 and 2022, respectively, which are trade related,
unsecured, non-interest-bearing and repayable on demand.
Included in the Group’s trade receivables are amounts due from members of the Emperor Group other than
the AY Holdings Group (“Other Members of the Emperor Group”) of approximately HK$15,000, HK$12,000 and
HK$1,612,000 as at 31 December 2020, 2021 and 2022, respectively, which are trade related, unsecured,
non-interest-bearing and repayable on demand.
At 31 December 2021 and 2022, certain of the Group’s trade receivables with a net carrying amount of
approximately HK$71 million and HK$66 million, respectively, were pledged to secure a bank loan facility
granted to the Group (note 22).
An ageing analysis of the trade receivables, based on the invoice date and net of loss allowance, is as
follows:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Within 1 month 23,792 26,676 27,116
1 to 3 months 22,475 26,990 22,988
3 to 6 months 14,108 18,524 13,886
Over 6 months 3,042 6,624 7,480
63,417 78,814 71,470
The movements in the loss allowance for impairment of trade receivables are as follows:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
At beginning of year 3,896 3,970 6,077
Impairment/(reversal of impairment), net (note 6) 74 2,107 (360)
Amount written off as uncollectible – – (617)
At end of year 3,970 6,077 5,100
An impairment analysis is performed at each reporting date using a provision matrix, or other applicable
approach, to measure expected credit losses. The provision rates are generally based on days past due for
groupings of various customer segments with similar loss patterns. The calculation reflects, as appropriate, the
probability-weighted outcome, the time value of money and reasonable and supportable information that is
available at the reporting date about past events, current conditions and forecasts of future economic conditions.
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 388 ---
Set out below is the information about the credit risk exposure on the Group’s trade receivables:
As at 31 December 2020
Current
to past
due less
than 1
month
Past due
1t o3
months
Past due
3t o6
months
Past due
6t o9
months
Past due
over 9
months Total
Expected credit loss rate 1.27% 2.30% 4.69% 15.01% 67.48% 5.89%
Gross carrying amount
(HK$’000) 32,644 16,717 12,607 2,052 3,367 67,387
Expected credit losses
(HK$’000) 415 384 591 308 2,272 3,970
As at 31 December 2021
Current
to past
due less
than 1
month
Past due
1t o3
months
Past due
3t o6
months
Past due
6t o9
months
Past due
over 9
months Total
Expected credit loss rate 1.21% 2.28% 4.55% 14.24% 65.49% 7.16%
Gross carrying amount
(HK$’000) 38,832 21,656 14,162 4,367 5,874 84,891
Expected credit losses
(HK$’000) 471 493 644 622 3,847 6,077
As at 31 December 2022
Current
to past
due less
than 1
month
Past due
1t o3
months
Past due
3t o6
months
Past due
6t o9
months
Past due
over 9
months Total
Expected credit loss rate 1.21% 2.33% 4.50% 11.08% 64.92% 6.66%
Gross carrying amount
(HK$’000) 36,839 19,040 9,964 5,947 4,780 76,570
Expected credit losses
(HK$’000) 447 443 448 659 3,103 5,100
18. PREPAYMENTS, DEPOSITS AND OTHER RECEIV ABLES
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Prepayments 2,854 6,031 6,727
Deposits and other receivables 3,071 5,380 5,377
5,925 11,411 12,104
Less: Non-current portion (2,652) (3,027) (2,960)
Current portion 3,273 8,384 9,144
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 389 ---
The financial assets included in the above balances relate to receivables for which there was no recent
history of significant default and past due amounts. As at 31 December 2020, 2021 and 2022, the loss allowance
was assessed by management to be minimal.
Included in the Group’s deposits and other receivables are amounts due from related companies, which are
members of the AY Holdings Group, of approximately HK$2,595,000, nil and nil as at 31 December 2020, 2021
and 2022, respectively, which are non-trade related, unsecured, non-interest-bearing and repayable on demand.
Included in the Group’s deposits and other receivables are amounts due from Other Members of the
Emperor Group of approximately HK$97,000, nil and nil as at 31 December 2020, 2021 and 2022, respectively,
which are non-trade related, unsecured, non-interest-bearing and repayable on demand.
Included in the Group’s prepayments is a non-trade related prepayment to an Other Member of the Emperor
Group of approximately HK$225,000 and HK$288,000 as at 31 December 2021 and 2022, respectively.
Included in the Group’s prepayments is a trade related prepayment to a related company, which is an
indirect associate of the AY Holdings, of approximately HK$600,000, nil and nil as at 31 December 2020, 2021
and 2022, respectively (note 28(a)(v)).
19. CASH AND CASH EQUIV ALENTS AND PLEDGED BANK DEPOSIT
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Cash and bank balances 31,466 23,525 19,930
Bank deposit 800 800 800
32,266 24,325 20,730
Less: Pledged bank deposit (800) (800) (800)
Cash and cash equivalents 31,466 23,525 19,930
The Group’s cash and cash equivalents are denominated in the following currencies:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
HK$ 29,893 22,429 18,821
RMB 1,515 1,070 1,025
Others 58 26 84
Cash and cash equivalents 31,466 23,525 19,930
The RMB is not freely convertible into other currencies, however, under Mainland China’s Foreign
Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange
Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct
foreign exchange business.
Certain cash at banks earns interest at floating rates based on relevant bank deposit rates. The bank
balances and pledged bank deposit are deposited with creditworthy banks with no recent history of default.
The Group’s credit card facilities have been secured by the pledge of certain of the Group’s bank deposit
amounting to HK$800,000, HK$800,000 and HK$800,000 as at 31 December 2020, 2021 and 2022, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 390 ---
20. TRADE PAYABLES
An ageing analysis of the trade payables, based on the invoice date or equivalent, is as follows:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Less than 30 days 5,840 5,052 5,350
30 to 90 days 1,846 321 436
More than 90 days 351 66 321
8,037 5,439 6,107
Included in the Group’s trade payables are amounts due to related companies, which are members of the AY
Holdings Group, of approximately nil, HK$127,000 and HK$36,000 as at 31 December 2020, 2021 and 2022,
respectively, which are trade related, unsecured, non-interest-bearing and repayable on demand. The trade payables
are non-interest-bearing and are normally settled on terms of 30 to 90 days.
21. OTHER PAYABLES AND ACCRUALS
As at 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
Contract liabilities (a) 2,510 1,506 1,510
Other payables and accruals* (b) 18,339 49,766 16,861
20,849 51,272 18,371
* Included in the Group’ s other payables and accruals are amounts due to related companies, which
are members of the AY Holdings Group, of approximately HK$1,485,000, HK$1,431,000 and
HK$1,234,000 as at 31 December 2020, 2021 and 2022, respectively, which are non-trade related,
unsecured, non-interest-bearing and repayable on demand. The directors of the Company have
confirmed such amounts will be settled prior to the Listing.
Notes:
(a) Details of contract liabilities are as follows:
As at
1 January As at 31 December
2020 2020 2021 2022
HK$’000 HK$’000 HK$’000 HK$’000
Payments received in
advance
Circulation 467 263 255 223
Digital advertising 979 2,247 1,251 1,287
1,446 2,510 1,506 1,510
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 391 ---
Contract liabilities include short-term advances received relating to circulation and digital advertising.
The increase in contract liabilities in 2020 was mainly due to an increase in short-term advances
received from customers in relation to digital advertising being offset by a decrease due to the
termination of the publication of one magazine in 2020. The decrease in contract liabilities in 2021
was mainly due to a decrease in short-term advances received from customers in relation to the sales/
subscription of magazines and books, and digital advertising near the end of the year ended 31
December 2021. The increase in contract liabilities in 2022 was mainly due to an increase in
short-term advances received from customers in relation to digital advertising near the end of the
year ended 31 December 2022.
(b) Included in the Group’s other payables as at 31 December 2021 and 2022 were aggregate amounts of
approximately HK$20,752,000 and HK$1,336,000, respectively, in connection with the additions of
property, plant and equipment.
Other payables are non-interest-bearing and are normally settled on terms of 30 to 90 days.
22. INTEREST-BEARING BANK BORROWINGS
As at 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
Current
Bank borrowings – unsecured (a) 10,318 – 6,000
Bank borrowing – secured (b) – 35,000 15,000
10,318 35,000 21,000
Analysed into:
Bank borrowings repayable:
Within one year or on demand* 10,318 35,000 21,000
* The relevant agreements contain repayment on demand clauses giving the respective lenders the
unconditional rights to call in the respective borrowings at any time and, therefore, for the purpose
of the above analysis, the total amount is classified as “on demand”.
Notes:
(a) As at 31 December 2020, the bank borrowings bore interest at 1.45% per annum over Hong Kong
Interbank Offered Rate (“HIBOR”) and were repayable in 2021.
As at 31 December 2020, the Group had aggregate bank borrowing facilities from a bank amounting
to approximately HK$15,477,000, of which an aggregate amount of approximately HK$10,318,000
was utilised as at 31 December 2020.
In the last quarter of 2022, an indirect subsidiary of the Company (the “Subsidiary”) obtained a term
loan facility (the “Facility”) from a bank (the “Lender”) with a facility limit of HK$6,000,000, of
which HK$6,000,000 was utilised as at 31 December 2022. The Facility is guaranteed by the
Company for an unlimited amount. A deed of undertaking was executed by AY Holdings, pursuant to
which AY Holdings unconditionally and irrevocably covenants and undertakes with the Lender that if
the Company’s shares are not listed on the Stock Exchange within eleven months from 30 November
2022, AY Holdings shall immediately provide or cause to be provided to the Subsidiary with
sufficient funding in cash for repaying all outstanding indebtedness under the Facility in full. The
loan drawdown under the Facility bears interest at 2.75% per annum over HIBOR and is repayable in
November 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 392 ---
(b) In June 2021, the Subsidiary obtained an uncommitted revolving loan facility from a bank (the
“Bank”) amounting to HK$35,000,000, of which an aggregate amount of HK$35,000,000 was utilised
as at 31 December 2021, which was secured by a corporate guarantee of the Company and certain
trade receivables of the Group (note 17). As at 31 December 2021, the bank loans bore interest at the
Bank’s Hong Kong dollar best lending rate or its cost of funds, whichever is higher, and aggregate
accrued interest and principal amounts of the bank borrowings of HK$10,000,000 and
HK$25,000,000 were repayable on or before 21 January 2022 and 7 March 2022, respectively.
After the expiry of the above revolving loan facility, the Subsidiary obtained another uncommitted
revolving loan facility from the Bank in December 2022 with a facility limit of HK$30,000,000, of
which HK$15,000,000 was utilised as at 31 December 2022. The revolving loan facility is secured by
a corporate guarantee of the Company and certain trade receivables of the Group (note 17). The loan
drawdown under this revolving bank loan facility bears interest at 4.5% per annum over 1-month
HIBOR or 4.5% per annum over the Bank’s cost of funds, whichever is higher, and aggregate
accrued interest and principal amount of the bank borrowing outstanding at 31 December 2022 of
HK$15,000,000 are repayable on or before 7 February 2023. Pursuant to the terms and conditions of
this revolving bank loan facility, the maximum loan finance ratio shall be up to a certain percentage
(the “Threshold Percentage”) of the total amount of accounts receivable as shown on the concerned
accounts receivable report of the Subsidiary (the “AR Report”) for each drawing and the then loan
outstanding with the maximum drawdown amount shall not exceed the facility limit. If the balance on
the AR Report is below a certain amount and its loan-to-value ratio (“LTV Ratio”) against the loan
drawn under the facility (“Loan Outstanding”) exceeded the Threshold Percentage, at any time, the
Subsidiary shall reduce the Loan Outstanding in order to restore the LTV Ratio to not more than the
Threshold Percentage within the time limit imposed by the Bank from time to time. In case of the
LTV Ratio exceeding the Threshold Percentage, the Subsidiary is required to pay off the shortfall
difference by early partial repayment or providing acceptable collateral to the bank in order to get
back the original LTV Ratio position within one month.
The Group’s interest-bearing bank borrowings are denominated in HK$.
23. PROVISIONS
Pursuant to the terms of relevant tenancy agreements, the Group, as the lessee of certain properties, has the
obligations to reinstate certain leased properties to their original state or to a condition as specified in the
respective tenancy agreements at the end/upon the termination of the relevant lease terms.
Provisions for reinstatements costs
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
At beginning of year 2,415 2,415 6,557
Additional provision – 6,557 –
Reversal of provision – (2,415) –
At end of year 2,415 6,557 6,557
The provisions for reinstatement costs were determined based on certain assumptions and estimates made by
management of the Group reference to inter alia, past experience and available information. The assumptions and
estimates are reviewed and revised where appropriate, at least at the end of each reporting period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 393 ---
24. DEFERRED TAX
Deferred tax assets
Depreciation in
excess of related
depreciation
allowance/
(depreciation
allowance in
excess of related
depreciation)
Impairment of
trade receivables Total
Note HK$’000 HK$’000 HK$’000
At 1 January 2020 693 263 956
Deferred tax credited to profit or
loss during the year 10 – 246 246
At 31 December 2020 and
1 January 2021 693 509 1,202
Deferred tax credited/(charged) to
profit or loss during the year 10 (1,253) 402 (851)
At 31 December 2021 and
1 January 2022 (560) 911 351
Deferred tax credited/(charged) to
profit or loss during the year 10 305 (148) 157
At 31 December 2022 (255) 763 508
The Group has tax losses arising in Hong Kong of approximately HK$32,956,000, HK$33,319,000
and HK$33,682,000 as at 31 December 2020, 2021 and 2022, respectively, that are available indefinitely for
offsetting against future taxable profits of the companies in which the losses arose.
Deferred tax assets have not been recognised in respect of these tax losses as at 31 December 2020,
2021 and 2022 due to the unpredictability of the future taxable profits streams of the subsidiaries in which
the tax losses arose and it is not considered probable that future taxable profits will be available against
which the tax losses can be utilised.
25. ISSUED CAPITAL
As at 31 December
2021 2022
HK$’000 HK$’000
Authorised:
5,000,000 ordinary shares of HK$0.01 each 50 50
Issued and fully paid:
20,000 ordinary shares of HK$0.01 each –* –*
* Amount less than HK$1,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 394 ---
On 22 March 2021, the Company was incorporated as an exempted company with limited liability in the
Cayman Islands with authorised share capital of HK$50,000 divided into 5,000,000 ordinary shares of HK$0.01
each. Upon incorporation, 1 ordinary share of HK$0.01 of the Company was issued at par as the subscriber’s
share and, on the same date, 9,999 additional ordinary shares of HK$0.01 of the Company each were allotted and
issued for cash at par.
On the same date, 10,000 additional ordinary shares of HK$0.01 each of the Company were allotted and
issued in exchange for the entire issued share capital of New Media Group Limited and credited as fully paid
pursuant to the Reorganisation.
26. RESERVES
Group
The amounts of the Group’s reserves and the movements therein for each of the Relevant Periods are
presented in the consolidated statements of changes in equity on pages I-9 to I-10 of this report.
The other reserves are mainly arising from:
(a) the differences between the aggregate amount of issued capital and share premium of the
relevant subsidiaries and the nominal value of an entity’s shares issued for the acquisition
thereof in prior periods;
(b) the acquisition of additional 15% equity interest in a subsidiary from a non-controlling
shareholder in 2006 and was deemed as a capital contribution;
(c) the current accounts waived by the then immediate holding company as a result of the
deregistration of certain subsidiaries in prior periods;
(d) the deemed contribution arising from the discounting of a non-current interest-free loan from
the then immediate holding company in prior periods; and
(e) the difference between the nominal amount of the issued capital of New Media Group Limited
and the nominal value of the shares of the Company issued in exchange therefor pursuant to
the Reorganisation.
Company
A summary of the movements of the Company’s reserves is as follows:
Other
reserve
Retained
profits Total
HK$’000 HK$’000 HK$’000
Arising from the Reorganisation 14,229 – 14,229
Total comprehensive income for the period – 41,535 41,535
Dividends (note 11) – (34,000) (34,000)
At 31 December 2021 and 1 January 2022 14,229 7,535 21,764
Dividend (note 11) – (12,000) (12,000)
Total comprehensive income for the year – 10,862 10,862
At 31 December 2022 14,229 6,397 20,626
The Company’s other reserve represents the excess of the equity of a subsidiary acquired pursuant to
the Reorganisation over the nominal value of the Company’s shares issued in exchange therefor.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 395 ---
27. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2020, 2021 and 2022, the Group had non-cash additions to
right-of-use assets of approximately nil, HK$64,249,000 and HK$695,000 and lease liabilities of approximately
nil, HK$64,249,000 and HK$695,000, respectively, in respect of lease arrangements for properties.
During the years ended 31 December 2020, 2021 and 2022, the Group had non-cash lease modification
resulting in decrease in right-of-use assets of approximately HK$3,414,000, HK$3,120,000 and nil (note 15(a))
and lease liabilities of approximately HK$3,768,000, HK$4,313,000 and nil (note 15(b)), and gain on lease
modification of approximately HK$354,000, HK$1,193,000 and nil (note 15(c)), respectively, in respect of lease
arrangements for properties.
During the year ended 31 December 2020, a dividend declared by New Media Group Limited of
approximately HK$4,760,000 was settled through the balance with the then immediate holding company.
During the year ended 31 December 2021, the Group had non-cash additional provisions for reinstatement
costs in respect of certain leased properties of the Group amounting to approximately HK$6,557,000 and a
corresponding non-cash additions to the right-of-use assets of the Group of HK$6,557,000 during that year.
(b) Changes in liabilities arising from financing activities
Lease
liabilities
Interest-
bearing bank
borrowings
Interest-
bearing other
borrowing
HK$’000 HK$’000 HK$’000
At 1 January 2020 35,542 – 3,984
Changes from financing cash flows (10,317) 10,318 (3,984)
Lease modification (3,768) – –
Foreign exchange movement 30 – –
Interest expense 1,456 – –
At 31 December 2020 and at 1 January 2021 22,943 10,318 –
Changes from financing cash flows (12,550) 24,682 –
Covid-19-related rent concession from a lessor (29) – –
New leases 64,249 – –
Lease modification (4,313) – –
Foreign exchange movement 26 – –
Interest expense 2,224 – –
At 31 December 2021 and at 1 January 2022 72,550 35,000 –
Changes from financing cash flows (13,447) (14,000) –
New lease 695 – –
Interest expense 3,694 – –
At 31 December 2022 63,492 21,000 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 396 ---
(c) Total cash outflow for leases
The total cash outflow for leases included in the consolidated statements of cash flows is as follows:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Within operating activities 707 355 219
Within financing activities 10,317 12,550 13,447
11,024 12,905 13,666
28. TRANSACTIONS WITH RELATED PARTIES AND OTHER MEMBERS OF THE EMPEROR
GROUP
(a) The Group had the following transactions with related parties during the Relevant Periods:
Y ear ended 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
Then immediate holding
company
Finance cost (i) 1 6 2––
Other members of the AY
Holdings Group
Advertising income (ii) 61 42 427
Interest expense on lease
liabilities (c) 789 171 –
Lease payments (c) 6,330 2,596 –
Gain on lease modification (c) 3 5 4––
Lease payments not included in
measurement of lease liabilities (iii) 707 222 –
Reimbursements of administrative
expenses (iv) 770 1,793 1,330
Indirect associate of AY
Holdings
Advertising income (ii) 4 3 8––
Production and other costs (v) 120 174 –
Notes:
(i) Finance cost charged by the then immediate holding company was based on terms as set out in
the corresponding loan agreement (note 7).
(ii) Advertising income was charged based on terms as agreed by the relevant parties as set out in
respective agreements.
(iii) The amounts charged by a related company were on terms as agreed by the relevant parties as
set out in respective tenancy agreements.
(iv) The amounts charged by a related company were with reference to the costs incurred. The
amounts outstanding are included in other payables and accruals (note 21).
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 397 ---
(v) Prior to the year ended 31 December 2020, the Group prepaid certain production costs of
approximately HK$600,000 to an indirect associate of AY Holdings (note 18) and during the
years ended 31 December 2020 and 2021, certain costs of approximately HK$120,000 and
HK$174,000, respectively, were charged by that entity to the Group, all based on terms as
agreed between the relevant parties. The prepaid production costs were fully returned to the
Group during the year ended 31 December 2021.
(b) The Group had the following transactions with Other Members of the Emperor Group during the
Relevant Periods:
Y ear ended 31 December
2020 2021 2022
Notes HK$’000 HK$’000 HK$’000
Advertising income (i) 319 206 1,779
Production costs and printing
costs (ii) 126 – 295
Sponsor fee (iii) – 707 219
Notes:
(i) Advertising income was charged based on terms as agreed by the relevant parties as set out in
respective agreements.
(ii) Production costs and printing costs were charged based on terms as agreed by the relevant
parties as set out in respective agreements.
(iii) An Other Member of the Emperor Group has been appointed as one of the Joint Sponsors for
the initial public offer of the shares of the Company on the Main Board of the Stock Exchange
pursuant to an engagement letter for a total agreed sponsor fee of HK$1,650,000. Up to 31
December 2021 and 2022, the total amounts of such sponsor fee incurred were approximately
HK$932,000 and HK$1,213,000, respectively, of which approximately HK$707,000 and
HK$219,000 were charged to profit or loss for the years ended 31 December 2021 and 2022,
respectively.
(c) Lease arrangements with a related company and related deposits paid
During the years ended 31 December 2020 and 2021, the Group had certain lease arrangements
(“Lease Arrangements”) originally ranging from two to three years with a company (the “lessor”),
which is a member of the AY Holdings Group, in connection with the leasing of certain properties.
The lessor was no longer a related company as at 31 December 2021. The respective total amounts of
deposits paid to the related company in connection with the Lease Arrangements of HK$2,397,000
were included in the Group’s non-current deposits as at 31 December 2020. The right-of-use assets
and lease liabilities in connection with the Lease Arrangements were recognised in the consolidated
statements of financial position of the Group as at 31 December 2020. As at 31 December 2020, the
right-of-use assets in connection with the Lease Arrangements amounted to approximately
HK$9,432,000. As at 31 December 2020, the lease liabilities in connection with the Lease
Arrangements amounted to approximately HK$11,181,000. The amounts recognised in profit or loss
and the consolidated statements of cash flows for the years ended 31 December 2020 and 2021 in
relation to the Lease Arrangements are set out in note 28(a).
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 398 ---
(d) Balances with related parties
(i) Trade balances with related parties
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Trade receivables
Members of the AY Holdings Group – 10 400
Other Members of the Emperor Group 15 12 1,612
15 22 2,012
The trade receivables are unsecured, non-interest-bearing and repayable on demand.
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Prepayment
An indirect associate of AY Holdings 600 – –
Trade payables
Members of the AY Holdings Group – 127 36
The trade payables are unsecured, non-interest-bearing and repayable on demand.
(ii) Non-trade balances with related parties
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Deposits and other receivables
Members of the AY Holdings Group 2,595 – –
Other Members of the Emperor Group 97 – –
2,692 – –
The other receivables are unsecured, non-interest-bearing and repayable on demand.
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Prepayment
An Other Member of the Emperor
Group – 225 288
The directors of the Company have confirmed the prepayment to an Other Member of the
Emperor Group will be utilised prior to the Listing.
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Other payables and accruals
Members of the AY Holdings Group 1,485 1,431 1,234
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 399 ---
The other payables and accruals are unsecured, non-interest-bearing and repayable on demand.
The directors of the Company have confirmed the other payables and accruals due to members
of the AY Holdings Group will be settled prior to the Listing.
(e) Compensation of key management personnel of the Group:
Y ear ended 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Short-term employee benefits 4,777 9,474 4,752
Post-employment benefits 54 54 54
Total compensation paid to key
management personnel 4,831 9,528 4,806
Further details of directors’ and chief executive’s remuneration are included in note 8 to the
Historical Financial Information.
29. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the
Relevant Periods are as follows:
Financial assets
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Financial assets at amortised cost:
Trade receivables 63,417 78,814 71,470
Financial assets included in prepayments,
deposits and other receivables 3,071 5,380 3,517
Pledged bank deposit 800 800 800
Cash and cash equivalents 31,466 23,525 19,930
98,754 108,519 95,717
Financial liabilities
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Financial liabilities at amortised cost:
Trade payables 8,037 5,439 6,107
Financial liabilities included in other payables
and accruals 11,417 33,479 12,660
Interest-bearing bank borrowings 10,318 35,000 21,000
Lease liabilities 22,943 72,550 63,492
52,715 146,468 103,259
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 400 ---
30. FAIR V ALUE AND FAIR V ALUE HIERARCHY
At the end of each of the Relevant Periods, the carrying amounts of the Group’s financial assets and
financial liabilities reasonably approximated to their fair values.
The fair values of the financial assets and liabilities are included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The
following methods and assumption were used to estimate the fair values:
The fair values of cash and cash equivalents, pledged bank deposit, trade receivables, financial assets
included in prepayments, deposits and other receivables, trade payables, financial liabilities included in other
payables and accruals, and interest-bearing bank borrowings approximate to their carrying amounts largely due to
the short-term maturities/are repayable on demand or the effect of discounting is not material.
The fair values of the non-current portion of financial assets included in prepayments, deposits and other
receivables had been calculated and assessed mainly by discounting the expected future cash flows using rates
currently available for instruments with similar terms, credit risk and remaining maturities, as appropriate. The
changes in fair value as a result of the Group’s own non-performance risk as at the Relevant Periods were
assessed to be insignificant.
31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise interest-bearing bank borrowings, lease liabilities,
pledged bank deposit and cash and cash equivalents. The main purpose of these financial instruments is to raise
finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade
receivables, financial assets included in prepayments, deposits and other receivables, trade payables and financial
liabilities included in other payables and accruals, which mainly arise directly from its operations.
It is, and has been, throughout the Relevant Periods, the Group’s policy that no trading in financial
instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity
risk. The management of the Group reviews and agrees policies for managing each of these risks and they are
summarised below.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s
interest-bearing bank borrowings with floating interest rates. The Group mitigates the risk by monitoring
closely the movements in interest rates regularly.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates,
with all other variables held constant, of the Group’s profit before tax for the years ended 31 December
2020, 2021, and 2022 (through the impact on floating rate interest-bearing bank borrowings).
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 401 ---
Increase/
(decrease)
in basis
points
Increase/
(decrease)
in profit
before tax
HK$’000
Y ear ended 31 December 2020
HK$ 50 (52)
(50) 52
Y ear ended 31 December 2021
HK$ 50 (175)
(50) 175
Y ear ended 31 December 2022
HK$ 50 (105)
(50) 105
Credit risk
The Group mainly transacts on credit with recognised/creditworthy third parties. It is the Group’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the
Group’s credit policy, which is mainly based on past due information unless other information is available
without undue cost or effort, and year-end staging classification as at 31 December 2020, 2021 and 2022.
The amounts presented are gross carrying amounts for financial assets.
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 31 December 2020
Trade receivables* – – – 67,387 67,387
Financial assets included in
prepayments, other receivables and
other assets
– Normal** 3,071 – – – 3,071
Pledged deposits
– Not yet past due 800 – – – 800
Cash and cash equivalents
– Not yet past due 31,466 – – – 31,466
35,337 – – 67,387 102,724
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 402 ---
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 31 December 2021
Trade receivables* – – – 84,891 84,891
Financial assets included in
prepayments, other receivables and
other assets
– Normal** 5,380 – – – 5,380
Pledged deposit
– Not yet past due 800 – – – 800
Cash and cash equivalents
– Not yet past due 23,525 – – – 23,525
29,705 – – 84,891 114,596
As at 31 December 2022
Trade receivables* – – – 76,570 76,570
Financial assets included in
prepayments, other receivables and
other assets
– Normal** 3,517 – – – 3,517
Pledged deposit
– Not yet past due 800 – – – 800
Cash and cash equivalents
– Not yet past due 19,930 – – – 19,930
24,247 – – 76,570 100,817
* For trade receivables to which the Group applies the simplified approach for impairment,
relevant information is disclosed in note 17 to the Historical Financial Information.
** The credit quality of the financial assets included in prepayments, deposits and other
receivables is considered to be “normal” when they are not past due and there is no
information indicating that the financial assets had a significant increase in credit risk since
initial recognition. Otherwise, the credit quality of the financial assets is considered to be
“doubtful”.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade
receivables are disclosed in note 17 to the Historical Financial Information.
Liquidity risk
The Group regularly monitors its risk to a shortage of funds and considers the maturity of both its
financial liabilities and financial assets and projected cash flows from operations.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through
the use of interest-bearing bank borrowings.
The following tables show the maturity profile of the Group’s financial liabilities as at the end of
each of the Relevant Periods, based on the contractual undiscounted payments.
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 403 ---
On demand
or less than
1 year 1 to 5 years Over 5 years Total
HK$’000 HK$’000 HK$’000 HK$’000
As at 31 December 2020
Trade payables 8,037 – – 8,037
Financial liabilities included in other
payables and accruals 11,417 – – 11,417
Interest-bearing bank borrowings 10,318 – – 10,318
Lease liabilities 11,049 12,970 – 24,019
40,821 12,970 – 53,791
On demand
or less than
1 year 1 to 5 years Over 5 years Total
HK$’000 HK$’000 HK$’000 HK$’000
As at 31 December 2021
Trade payables 5,439 – – 5,439
Financial liabilities included in other
payables and accruals 33,479 – – 33,479
Interest-bearing bank borrowings 35,000 – – 35,000
Lease liabilities 13,797 45,921 28,245 87,963
87,715 45,921 28,245 161,881
On demand
or less than
1 year 1 to 5 years Over 5 years Total
HK$’000 HK$’000 HK$’000 HK$’000
As at 31 December 2022
Trade payables 6,107 – – 6,107
Financial liabilities included in other
payables and accruals 12,660 – – 12,660
Interest-bearing bank borrowings 21,000 – – 21,000
Lease liabilities 14,122 43,996 17,311 75,429
53,889 43,996 17,311 115,196
As at 31 December 2020, 2021 and 2022, the above interest-bearing bank borrowings with carrying
amounts of approximately HK$10,318,000, HK$35,000,000 and HK$21,000,000, respectively, contain
repayment on demand clauses giving the respective lenders the unconditional rights to call in the respective
borrowings at any time and, therefore, for the purpose of the above maturity profile, the total amount is
classified as “on demand”.
Notwithstanding the repayment on demand clauses, the directors of the Company do not believe that
the borrowings will be called in in their entirety at any time and they consider that the borrowings will be
repaid in accordance with the maturity dates as set out in the corresponding agreements. This evaluation
was made after considering the financial position of the Group at the end of each of the Relevant Periods,
the lack of events of default, and the fact that the Group has made all previously scheduled repayments on
time.
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 404 ---
In accordance with the terms of the bank borrowings which contain repayment on demand clauses,
the maturity profile of the bank borrowings as at the end of each of the Relevant Periods, based on the
contractual undiscounted payments and ignoring the effect of any repayment on demand clause, is as
follows:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Less than 1 year 10,533 35,386 21,171
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to
continue as a going concern and to maintain healthy capital ratios in order to support its business and
maximise shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure,
the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new
shares. The Group is not subject to any externally imposed capital requirements. No changes were made in
the objectives, policies or processes for managing capital during the Relevant Periods.
The Group monitors capital using a gearing ratio, which is determined based of the Group’s total
debts divided by its total equity. Total debts include interest-bearing bank borrowings, and amounts due to
related companies. The gearing ratios as at the end of each of the Relevant Periods were as follows:
As at 31 December
2020 2021 2022
HK$’000 HK$’000 HK$’000
Amounts due to related companies
(note 21) 1,485 1,431 1,234
Interest-bearing bank borrowings (note 22) 10,318 35,000 21,000
Total debts 11,803 36,431 22,234
Total equity 54,994 44,035 71,498
Gearing ratio (%) 21.5 82.7 31.1
32. EVENT AFTER THE RELEV ANT PERIODS
On 17 March 2023, the Company declared an interim dividend of HK$500 per ordinary share amounting to
HK$10,000,000 in aggregate for the year ending 31 December 2023 to its shareholders.
33. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of its subsidiaries in
respect of any period subsequent to 31 December 2022.
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 405 ---
The following information sets out in this appendix does not form part of the
Accountants’ Report from Ernst & Young, Certified Public Accountants, Hong Kong, the
Company’s reporting accountants, as set out in Appendix I to this prospectus, and is
included herein for illustrative purpose only.
The unaudited pro forma financial information should be read in conjunction with the
section headed “Financial Information” in this prospectus and the Accountants’ Report set
out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED
NET TANGIBLE ASSETS
The following is an illustrative unaudited pro forma statement of adjusted consolidated
net tangible assets of the Group prepared in accordance with paragraph 4.29 of the Listing
Rules and on the basis of the notes set out below for the purpose of illustrating the effect of
the Share Offer on the consolidated net tangible assets of the Group attributable to owners
of the parent as at 31 December 2022 as if the Share Offer had taken place on 31 December
2022.
This unaudited pro forma statement of adjusted consolidated net tangible assets of the
Group has been prepared for illustrative purposes only and, because of its hypothetical
nature, it may not give a true picture of the consolidated net tangible assets of the Group
had the Share Offer been completed as at 31 December 2022 or any future dates:
Consolidated
net tangible
assets of the
Group
attributable
to owners of
the parent
as at 31
December
2022
Estimated
net proceeds
from the
Share Offer
Unaudited
pro forma
adjusted
consolidated
net tangible
assets of the
Group
attributable
to owners of
the parent
Unaudited
pro forma
adjusted
consolidated
net tangible
assets per
Share
HK$’000 HK$’000 HK$’000 HK$
(Note 1) (Note 2) (Note 3)
Based on the Offer Price
of HK$0.92 per Share 71,090 116,251 187,341 0.31
Based on the Offer Price
of HK$0.84 per Share 71,090 104,671 175,761 0.29
Notes:
(1) The consolidated net tangible assets of the Group attributable to owners of the parent as at 31
December 2022 is based on the audited consolidated equity attributable to owners of the parent as at
31 December 2022 of approximately HK$71,498,000 with adjustment for intangible assets of the
Group as at 31 December 2022 of approximately HK$408,000 as extracted from the Accountants’
Report set out in Appendix I to this prospectus.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 406 ---
(2) The estimated net proceeds from the Share Offer are based on the Offer Prices of HK$0.84 per Share
and HK$0.92 per Share, being the minimum Offer Price and the maximum Offer Price of the
indicative Offer Price range, respectively, after deduction of the estimated underwriting fees and other
listing related expenses expected to be incurred by the Group subsequent to 31 December 2022.
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the
adjustment referred to in Note 2 above and on the basis that 600,000,000 Shares were in issue
assuming that the Capitalisation Issue and the Share Offer had been completed on 31 December 2022.
It does not take into account any Shares which may be issued upon the exercise of any options which
may be granted under the Share Option Scheme or any Shares which may be issued or repurchased
by the Company pursuant to the general mandates granted to the Directors as described in the section
headed “Share Capital” in this prospectus.
(4) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets of
the Group to reflect any trading results or other transactions of the Group entered into subsequent to
31 December 2022.
(5) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners
of the parent does not take into account a dividend of HK$10 million paid by the Company before
the Listing. Had the dividend been taken into account, the unaudited pro forma adjusted consolidated
net tangible assets of the Group attributable to owners of the parent and the unaudited pro forma
adjusted consolidated net tangible assets per Share would be approximately HK$177,341,000 and
HK$0.30, respectively (assuming an Offer Price of HK$0.92 per Share) and HK$165,761,000 and
HK$0.28, respectively (assuming an Offer Price of HK$0.84 per Share).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 407 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON
THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION
The following is the text of a report, received from the reporting accountants of the
Company, Ernst & Young, Certified Public Accountants, Hong Kong, for the purpose of
incorporation in this prospectus, in respect of the Group’s pro forma financial information.
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺 979 噆
⤑⏋✱ᷧ⺎ 27 㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of New Media Lab Limited
We have completed our assurance engagement to report on the compilation of pro
forma financial information of New Media Lab Limited (the “Company”) and its subsidiaries
(hereinafter collectively referred to as the “Group”) by the directors of the Company (the
“Directors”) for illustrative purposes only. The pro forma financial information consists of
the pro forma consolidated net tangible assets as at 31 December 2022 and related notes as
set out on pages II-1 to II-2 of the prospectus dated 30 June 2023 issued by the Company
(the “Pro Forma Financial Information”). The applicable criteria on the basis of which the
Directors have compiled the Pro Forma Financial Information are described on pages II-1 to
II-2 of Appendix II to the prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate
the impact of the public offer and placing of shares of the Company on the Group’s
financial position as at 31 December 2022 as if the transaction had taken place at 31
December 2022. As part of this process, information about the Group’s financial position has
been extracted by the Directors from the Group’s financial statements for the year ended 31
December 2022, on which an accountants’ report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to
Accounting Guideline (“AG”) 7 Preparation of Pro Forma Financial Information for
Inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants (the “HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 408 ---
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on
fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory
requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Pro Forma Financial Information and to report our opinion to you. We
do not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the Pro Forma Financial Information beyond that
owed to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the Pro Forma Financial Information
in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued
by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is
solely to illustrate the impact of the public offer and placing of shares of the Company on
unadjusted financial information of the Group as if the transaction had been undertaken at
an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the Pro Forma Financial Information provide a reasonable basis for
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 409 ---
presenting the significant effects directly attributable to the transaction, and to obtain
sufficient appropriate evidence about whether:
/L50188the related pro forma adjustments give appropriate effect to those criteria; and
/L50188the Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard
to the reporting accountants’ understanding of the nature of the Group, the transaction in
respect of which the Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis
stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Y oung
Certified Public Accountants
Hong Kong
30 June 2023
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 410 ---
Set out below is a summary of certain provisions of the Memorandum and Articles of
Association of the Company and of certain aspects of Cayman company law.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 22 March 2021 under the Companies Act (As Revised) of the Cayman
Islands (the “Companies Act”). The Company’s constitutional documents consist of its
Memorandum of Association (the “Memorandum”) and its Articles of Association (the
“Articles”).
1. MEMORANDUM OF ASSOCIATION
(a) The Memorandum states, inter alia, that the liability of members of the Company
is limited to the amount, if any, for the time being unpaid on the shares
respectively held by them and that the objects for which the Company is
established are unrestricted (including acting as an investment company), and that
the Company shall have and be capable of exercising all the functions of a natural
person of full capacity irrespective of any question of corporate benefit, as
provided in section 27(2) of the Companies Act and in view of the fact that the
Company is an exempted company that the Company will not trade in the
Cayman Islands with any person, firm or corporation except in furtherance of the
business of the Company carried on outside the Cayman Islands.
(b) The Company may by special resolution alter its Memorandum with respect to
any objects, powers or other matters specified therein.
2. ARTICLES OF ASSOCIATION
The Articles were conditionally adopted on 26 June 2023 with effect from the Listing
Date. The following is a summary of certain provisions of the Articles:
(a) Shares
(i) Classes of shares
The share capital of the Company consists of ordinary shares.
(ii) V ariation of rights of existing shares or classes of shares
Subject to the Companies Act, if at any time the share capital of the
Company is divided into different classes of shares, all or any of the special
rights attached to the shares or any class of shares may (unless otherwise
provided for by the terms of issue of that class) be varied, modified or abrogated
either with the consent in writing of the holders of not less than three-fourths in
nominal value of the issued shares of that class or with the sanction of a special
resolution passed at a separate general meeting of the holders of the shares of that
class. To every such separate general meeting the provisions of the Articles
relating to general meetings will mutatis mutandis apply, but so that the necessary
APPENDIX III SUMMARY OF THE CONSTITUTION OF THE
COMPANY AND CAYMAN ISLANDS COMPANY LA W
– III-1 –


--- page 411 ---
quorum (including at an adjourned meeting) shall be two persons holding or
representing by proxy not less than one-third in nominal value of the issued
shares of that class. Every holder of shares of the class shall be entitled to one
vote for every such share held by him.
Any special rights conferred upon the holders of any shares or class of
shares shall not, unless otherwise expressly provided in the rights attaching to the
terms of issue of such shares, be deemed to be varied, modified or abrogated by
the creation or issue of further shares ranking pari passu therewith.
(iii) Alteration of capital
The Company may by ordinary resolution of its members:
(i) increase its share capital by the creation of new shares;
(ii) consolidate all or any of its capital into shares of larger amount than its
existing shares;
(iii) divide its shares into several classes and attach to such shares any
preferential, deferred, qualified or special rights, privileges, conditions
or restrictions as the Company in general meeting or as the directors
may determine;
(iv) subdivide its shares or any of them into shares of smaller amount than
is fixed by the Memorandum;
(v) make provision for the issue and allotment of shares which do not carry
any voting rights; or
(vi) cancel any shares which, at the date of passing of the resolution, have
not been taken and diminish the amount of its capital by the amount of
the shares so cancelled.
The Company may reduce its share capital or any capital redemption reserve
or other undistributable reserve in any way by special resolution.
(iv) Transfer of shares
All transfers of shares may be effected by an instrument of transfer in the
usual or common form or in a form prescribed by The Stock Exchange of Hong
Kong Limited (the “ Stock Exchange ”) or in such other form as the board may
approve and which may be under hand or, if the transferor or transferee is a
clearing house or its nominee(s), by hand or by machine imprinted signature or by
such other manner of execution as the board may approve from time to time.
APPENDIX III SUMMARY OF THE CONSTITUTION OF THE
COMPANY AND CAYMAN ISLANDS COMPANY LA W
– III-2 –


--- page 412 ---
Notwithstanding the foregoing, for so long as any shares are listed on the
Stock Exchange, titles to such listed shares may be evidenced and transferred in
accordance with the laws applicable to and the rules and regulations of the Stock
Exchange (the “ Listing Rules ”) that are or shall be applicable to such listed
shares. The register of members in respect of its listed shares (whether the
principal register or a branch register) may be kept by recording the particulars
required by Section 40 of the Companies Act in a form otherwise than legible if
such recording otherwise complies with the laws applicable to and the Listing
Rules that are or shall be applicable to such listed shares.
The instrument of transfer shall be executed by or on behalf of the transferor
and the transferee provided that the board may dispense with the execution of the
instrument of transfer by the transferee. The transferor shall be deemed to remain
the holder of the share until the name of the transferee is entered in the register
of members in respect of that share.
The board may, in its absolute discretion, at any time transfer any share
upon the principal register to any branch register or any share on any branch
register to the principal register or any other branch register.
The board may decline to recognise any instrument of transfer unless a fee
(not exceeding the maximum sum as the Stock Exchange may determine to be
payable) determined by the Directors is paid to the Company, the instrument of
transfer is properly stamped (if applicable), it is in respect of only one class of
share and is lodged at the relevant registration office or registered office or such
other place at which the principal register is kept accompanied by the relevant
share certificate(s) and such other evidence as the board may reasonably require
to show the right of the transferor to make the transfer (and if the instrument of
transfer is executed by some other person on his behalf, the authority of that
person so to do).
The registration of transfers may be suspended and the register closed on
giving notice by announcement or by electronic communication or by
advertisement in any newspaper or by any other means in accordance with the
requirements of the Stock Exchange, at such times and for such periods as the
board may determine. The register of members must not be closed for periods
exceeding in the whole thirty (30) days in any year. The period of thirty (30) days
may be extended for a further period or periods not exceeding thirty (30) days in
respect of any year if approved by the Members by ordinary resolution.
Subject to the above, fully paid shares are free from any restriction on
transfer and free of all liens in favour of the Company.
APPENDIX III SUMMARY OF THE CONSTITUTION OF THE
COMPANY AND CAYMAN ISLANDS COMPANY LA W
– III-3 –


--- page 413 ---
(v) Power of the Company to purchase its own shares
The Company is empowered by the Companies Act and the Articles to
purchase its own shares subject to certain restrictions and the board may only
exercise this power on behalf of the Company subject to any applicable
requirements imposed from time to time by the Stock Exchange.
The board may accept the surrender for no consideration of any fully paid
share.
(vi) Power of any subsidiary of the Company to own shares in the Company
There are no provisions in the Articles relating to ownership of shares in the
Company by a subsidiary.
(vii) Calls on shares and forfeiture of shares
The board may from time to time make such calls upon the members in
respect of any monies unpaid on the shares held by them respectively (whether on
account of the nominal value of the shares or by way of premium). A call may be
made payable either in one lump sum or by installments. If the sum payable in
respect of any call or instalment is not paid on or before the day appointed for
payment thereof, the person or persons from whom the sum is due shall pay
interest on the same at such rate not exceeding twenty per cent. (20%) per annum
as the board may agree to accept from the day appointed for the payment thereof
to the time of actual payment, but the board may waive payment of such interest
wholly or in part. The board may, if it thinks fit, receive from any member
willing to advance the same, either in money or money’s worth, all or any part of
the monies uncalled and unpaid or installments payable upon any shares held by
him, and upon all or any of the monies so advanced the Company may pay
interest at such rate (if any) as the board may decide.
If a member fails to pay any call on the day appointed for payment thereof,
the board may serve not less than fourteen (14) clear days’ notice on him
requiring payment of so much of the call as is unpaid, together with any interest
which may have accrued and which may still accrue up to the date of actual
payment and stating that, in the event of non-payment at or before the time
appointed, the shares in respect of which the call was made will be liable to be
forfeited.
If the requirements of any such notice are not complied with, any share in
respect of which the notice has been given may at any time thereafter, before the
payment required by the notice has been made, be forfeited by a resolution of the
board to that effect. Such forfeiture will include all dividends and bonuses
declared in respect of the forfeited share and not actually paid before the
forfeiture.
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A person whose shares have been forfeited shall cease to be a member in
respect of the forfeited shares but shall, notwithstanding, remain liable to pay to
the Company all monies which, at the date of forfeiture, were payable by him to
the Company in respect of the shares, together with (if the board shall in its
discretion so require) interest thereon from the date of forfeiture until the date of
actual payment at such rate not exceeding twenty per cent. (20%) per annum as
the board determines.
(b) Directors
(i) Appointment, retirement and removal
At each annual general meeting, one third of the Directors for the time being
(or if their number is not a multiple of three, then the number nearest to but not
less than one third) shall retire from office by rotation provided that every
Director shall be subject to retirement at an annual general meeting at least once
every three years. The Directors to retire by rotation shall include any Director
who wishes to retire and not offer himself for re-election. Any further Directors
so to retire shall be those who have been longest in office since their last
re-election or appointment but as between persons who became or were last
re-elected Directors on the same day those to retire will (unless they otherwise
agree among themselves) be determined by lot.
Neither a Director nor an alternate Director is required to hold any shares in
the Company by way of qualification. Further, there are no provisions in the
Articles relating to retirement of Directors upon reaching any age limit. The
Directors have the power to appoint any person as a Director either to fill a
casual vacancy on the board or as an addition to the existing board. Any Director
so appointed shall hold office only until the first annual general meeting of the
Company after his appointment and shall then be eligible for re-election.
A Director (including a managing or other executive Director) may be
removed by an ordinary resolution of the Company before the expiration of his
term of office (but without prejudice to any claim which such Director may have
for damages for any breach of any contract between him and the Company) and
members of the Company may by ordinary resolution appoint another in his place.
Unless otherwise determined by the Company in general meeting, the number of
Directors shall not be less than two. There is no maximum number of Directors.
The office of director shall be vacated if:
(aa) he resigns by notice in writing delivered to the Company;
(bb) he becomes of unsound mind or dies;
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(cc) without special leave, he is absent from meetings of the board for six
(6) consecutive months, and the board resolves that his office is
vacated;
(dd) he becomes bankrupt or has a receiving order made against him or
suspends payment or compounds with his creditors;
(ee) he is prohibited from being a director by law; or
(ff) he ceases to be a director by virtue of any provision of law or is
removed from office pursuant to the Articles.
The board may appoint one or more of its body to be managing director,
joint managing director, or deputy managing director or to hold any other
employment or executive office with the Company for such period and upon such
terms as the board may determine and the board may revoke or terminate any of
such appointments. The board may delegate any of its powers, authorities and
discretions to committees consisting of such Director or Directors and other
persons as the board thinks fit, and it may from time to time revoke such
delegation or revoke the appointment of and discharge any such committees either
wholly or in part, and either as to persons or purposes, but every committee so
formed must, in the exercise of the powers, authorities and discretions so
delegated, conform to any regulations that may from time to time be imposed
upon it by the board.
(ii) Power to allot and issue shares and warrants
Subject to the provisions of the Companies Act and the Memorandum and
Articles and to any special rights conferred on the holders of any shares or class
of shares, any share may be issued with or have attached thereto such rights, or
such restrictions, whether with regard to dividend, voting, return of capital, or
otherwise as the Company may by ordinary resolution determine or, if there has
not been any such determination or so far as the same shall not make specific
provision, as the Directors may determine.
Subject to the provisions of the Companies Act, the Listing Rules and the
Memorandum and Articles , and to any special rights conferred on the holders of
any shares or attaching to any class of shares, any preference shares may be
issued or converted into shares that, at a determinable date, or at the option of the
Company or the holder if so authorised by the Articles are, liable to be redeemed
on such terms and in such manner, including out of capital, as the Company
before the issue or conversion may by ordinary resolution determine.
The board may issue warrants or convertible securities or securities of
similar nature conferring the right upon the holders thereof to subscribe for any
class of shares or securities in the capital of the Company on such terms as it
may determine.
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Subject to the provisions of the Companies Act and the Articles and, where
applicable, the Listing Rules and without prejudice to any special rights or
restrictions for the time being attached to any shares or any class of shares, all
unissued shares in the Company are at the disposal of the board, which may offer,
allot, grant options over or otherwise dispose of them to such persons, at such
times, for such consideration and on such terms and conditions as it in its
absolute discretion thinks fit, but so that no shares shall be issued at a discount to
their nominal value.
Neither the Company nor the board is obliged, when making or granting any
allotment of, offer of, option over or disposal of shares, to make, or make
available, any such allotment, offer, option or shares to members or others with
registered addresses in any particular territory or territories being a territory or
territories where, in the absence of a registration statement or other special
formalities, this would or might, in the opinion of the board, be unlawful or
impracticable. Members affected as a result of the foregoing sentence shall not be,
or be deemed to be, a separate class of members for any purpose whatsoever.
(iii) Power to dispose of the assets of the Company or any of its subsidiaries
There are no specific provisions in the Articles relating to the disposal of the
assets of the Company or any of its subsidiaries. The Directors may, however,
exercise all powers and do all acts and things which may be exercised or done or
approved by the Company and which are not required by the Articles or the
Companies Act to be exercised or done by the Company in general meeting.
(iv) Borrowing powers
The board may exercise all the powers of the Company to raise or borrow
money, to mortgage or charge all or any part of the undertaking, property and
assets and uncalled capital of the Company and, subject to the Companies Act, to
issue debentures, bonds and other securities of the Company, whether outright or
as collateral security for any debt, liability or obligation of the Company or of
any third party.
(v) Remuneration
The ordinary remuneration of the Directors is to be determined by the
Company in general meeting, such sum (unless otherwise directed by the
resolution by which it is voted) to be divided amongst the Directors in such
proportions and in such manner as the board may agree or, failing agreement,
equally, except that any Director holding office for part only of the period in
respect of which the remuneration is payable shall only rank in such division in
proportion to the time during such period for which he held office. The Directors
are also entitled to be prepaid or repaid all travelling, hotel and incidental
expenses reasonably expected to be incurred or incurred by them in attending any
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board meetings, committee meetings or general meetings or separate meetings of
any class of shares or of debentures of the Company or otherwise in connection
with the discharge of their duties as Directors.
Any Director who, by request, goes or resides abroad for any purpose of the
Company or who performs services which in the opinion of the board go beyond
the ordinary duties of a Director may be paid such extra remuneration as the
board may determine and such extra remuneration shall be in addition to or in
substitution for any ordinary remuneration as a Director. An executive Director
appointed to be a managing director, joint managing director, deputy managing
director or other executive officer shall receive such remuneration and such other
benefits and allowances as the board may from time to time decide. Such
remuneration may be either in addition to or in lieu of his remuneration as a
Director.
The board may establish or concur or join with other companies (being
subsidiary companies of the Company or companies with which it is associated in
business) in establishing and making contributions out of the Company’s monies
to any schemes or funds for providing pensions, sickness or compassionate
allowances, life assurance or other benefits for employees (which expression as
used in this and the following paragraph shall include any Director or past
Director who may hold or have held any executive office or any office of profit
with the Company or any of its subsidiaries) and ex-employees of the Company
and their dependents or any class or classes of such persons.
The board may pay, enter into agreements to pay or make grants of
revocable or irrevocable, and either subject or not subject to any terms or
conditions, pensions or other benefits to employees and ex-employees and their
dependents, or to any of such persons, including pensions or benefits additional to
those, if any, to which such employees or ex-employees or their dependents are or
may become entitled under any such scheme or fund as is mentioned in the
previous paragraph. Any such pension or benefit may, as the board considers
desirable, be granted to an employee either before and in anticipation of, or upon
or at any time after, his actual retirement.
The board may resolve to capitalise all or any part of any amount for the
time being standing to the credit of any reserve or fund (including a share
premium account and the capital redemption reserve and the profit and loss
account) whether or not the same is available for distribution by applying such
sum in paying up unissued shares to be allotted to (i) employees (including
directors) of the Company and/or its affiliates (meaning any individual,
corporation, partnership, association, joint-stock company, trust, unincorporated
association or other entity (other than the Company) that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under common
control with, the Company) upon exercise or vesting of any options or awards
granted under any share incentive scheme or employee benefit scheme or other
arrangement which relates to such persons that has been adopted or approved by
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the members in general meeting, or (ii) any trustee of any trust to whom shares
are to be allotted and issued by the Company in connection with the operation of
any share incentive scheme or employee benefit scheme or other arrangement
which relates to such persons that has been adopted or approved by the members
in general meeting.
(vi) Compensation or payments for loss of office
Pursuant to the Articles, payments to any Director or past Director of any
sum by way of compensation for loss of office or as consideration for or in
connection with his retirement from office (not being a payment to which the
Director is contractually entitled) must be approved by the Company in general
meeting.
(vii) Loans and provision of security for loans to Directors
The Company must not make any loan, directly or indirectly, to a Director
or his close associate(s) if and to the extent it would be prohibited by the
Companies Ordinance (Chapter 622 of the laws of Hong Kong) as if the Company
were a company incorporated in Hong Kong.
(viii) Disclosure of interests in contracts with the Company or any of its
subsidiaries
A Director may hold any other office or place of profit with the Company
(except that of the auditor of the Company) in conjunction with his office of
Director for such period and upon such terms as the board may determine, and
may be paid such extra remuneration therefor in addition to any remuneration
provided for by or pursuant to the Articles. A Director may be or become a
director or other officer of, or otherwise interested in, any company promoted by
the Company or any other company in which the Company may be interested, and
shall not be liable to account to the Company or the members for any
remuneration, profits or other benefits received by him as a director, officer or
member of, or from his interest in, such other company. The board may also cause
the voting power conferred by the shares in any other company held or owned by
the Company to be exercised in such manner in all respects as it thinks fit,
including the exercise thereof in favour of any resolution appointing the Directors
or any of them to be directors or officers of such other company, or voting or
providing for the payment of remuneration to the directors or officers of such
other company.
No Director or proposed or intended Director shall be disqualified by his
office from contracting with the Company, either with regard to his tenure of any
office or place of profit or as vendor, purchaser or in any other manner
whatsoever, nor shall any such contract or any other contract or arrangement in
which any Director is in any way interested be liable to be avoided, nor shall any
Director so contracting or being so interested be liable to account to the Company
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or the members for any remuneration, profit or other benefits realised by any such
contract or arrangement by reason of such Director holding that office or the
fiduciary relationship thereby established. A Director who to his knowledge is in
any way, whether directly or indirectly, interested in a contract or arrangement or
proposed contract or arrangement with the Company must declare the nature of
his interest at the meeting of the board at which the question of entering into the
contract or arrangement is first taken into consideration, if he knows his interest
then exists, or in any other case, at the first meeting of the board after he knows
that he is or has become so interested. A Director shall not vote (nor be counted
in the quorum) on any resolution of the board approving any contract or
arrangement or other proposal in which he or any of his close associates is
materially interested, but this prohibition does not apply to any of the following
matters, namely:
(aa) the giving of any security or indemnity either:–
(aaa) to the Director or his close associate(s) in respect of money lent
or obligations incurred or undertaken by him or any of them at the
request of or for the benefit of the Company or any of its
subsidiaries; or
(bbb) to a third party in respect of a debt or obligation of the Company
or any of its subsidiaries for which the Director or his close
associate(s) has himself/ themselves assumed responsibility in
whole or in part and whether alone or jointly under a guarantee or
indemnity or by the giving of security;
(bb) any proposal concerning an offer of shares or debentures or other
securities of or by the Company or any other company which the
Company may promote or be interested in for subscription or purchase
where the Director or his close associate(s) is/are or is/are to be
interested as a participant in the underwriting or sub-underwriting of
the offer;
(cc) any proposal or arrangement concerning the benefit of employees of the
Company or its subsidiaries including:–
(aaa) the adoption, modification or operation of any employees’ share
scheme or any share incentive or share option scheme under
which the Director or his close associate(s) may benefit; or
(bbb) the adoption, modification or operation of a pension fund or
retirement, death or disability benefits scheme which relates to the
Directors, his close associate(s) and employee(s) of the Company
or any of its subsidiaries and does not provide in respect of any
Director, or his close associate(s), as such any privilege or
advantage not generally accorded to the class of persons to which
such scheme or fund relates;
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(dd) any contract or arrangement in which the Director or his close
associate(s) is/are interested in the same manner as other holders of
shares or debentures or other securities of the Company by virtue only
of his/their interest in shares or debentures or other securities of the
Company.
(c) Proceedings of the Board
The board may meet for the despatch of business, adjourn or postpone and
otherwise regulate its meetings as it considers appropriate. Questions arising at any
meeting shall be determined by a majority of votes. In the case of an equality of votes,
the chairman of the meeting shall have an additional or casting vote.
(d) Alterations to constitutional documents and the Company’s name
The Articles may be rescinded, altered or amended by the Company in general
meeting by special resolution. The Articles state that a special resolution shall be
required to alter the provisions of the Memorandum, to amend the Articles or to change
the name of the Company.
(e) Meetings of members
(i) Special and ordinary resolutions
A special resolution of the Company must be passed by a majority of not
less than three-fourths of the votes cast by such members as, being entitled so to
do, vote in person or, in the case of such members as are corporations, by their
duly authorised representatives or, where proxies are allowed, by proxy at a
general meeting of which notice has been duly given in accordance with the
Articles.
Under the Companies Act, a copy of any special resolution must be
forwarded to the Registrar of Companies in the Cayman Islands within fifteen
(15) days of being passed.
An ordinary resolution is defined in the Articles to mean a resolution passed
by a simple majority of the votes of such members of the Company as, being
entitled to do so, vote in person or, in the case of corporations, by their duly
authorised representatives or, where proxies are allowed, by proxy at a general
meeting of which notice has been duly given in accordance with the Articles.
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(ii) V oting rights and right to demand a poll
Subject to any special rights or restrictions as to voting for the time being
attached to any shares, at any general meeting on a poll every member present in
person or by proxy or, in the case of a member being a corporation, by its duly
authorised representative shall have one vote for every fully paid share of which
he is the holder but so that no amount paid up or credited as paid up on a share
in advance of calls or installments is treated for the foregoing purposes as paid up
on the share. A member entitled to more than one vote need not use all his votes
or cast all the votes he uses in the same way.
At any general meeting a resolution put to the vote of the meeting is to be
decided by way of a poll save that in the case of a physical meeting, the chairman
of the meeting may in good faith, allow a resolution which relates purely to a
procedural or administrative matter to be voted on by a show of hands in which
case every member present in person (or being a corporation, is present by a duly
authorised representative), or by proxy(ies) shall have one vote provided that
where more than one proxy is appointed by a member which is a clearing house
(or its nominee(s)), each such proxy shall have one vote on a show of hands.
V otes (whether on a show of hands or by way of poll) may be cast by such
means, electronic or otherwise, as the Directors or the chairman of the meeting
may determine.
Any corporation which is a member may by resolution of its directors or
other governing body authorise such person as it thinks fit to act as its
representative at any general meeting of the Company or at any meeting of any
class of members.
The person so authorised shall be entitled to exercise the same powers on
behalf of such corporation as the corporation could exercise if it were an
individual member and such corporation shall for the purposes of the Articles be
deemed to be present in person at any such meeting if a person so authorised is
present thereat.
If a recognised clearing house (or its nominee(s)) is a member of the
Company it may authorise such person or persons as it thinks fit to act as its
representative(s) at any meeting of the Company or at any meeting of any class of
members of the Company provided that, if more than one person is so authorised,
the authorisation shall specify the number and class of shares in respect of which
each such person is so authorised. A person authorised pursuant to this provision
shall be deemed to have been duly authorised without further evidence of the
facts and be entitled to exercise the same powers on behalf of the recognised
clearing house (or its nominee(s)) as if such person was the registered holder of
the shares of the Company held by that clearing house (or its nominee(s))
including, the right to speak and to vote, and where a show of hands is allowed,
the right to vote individually on a show of hands.
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All members have the right to speak and vote at a general meeting except
where a member is required, by the rules of the Stock Exchange, to abstain from
voting to approve the matter under consideration.
Where the Company has any knowledge that any member is, under the
Listing Rules, required to abstain from voting on any particular resolution of the
Company or restricted to voting only for or only against any particular resolution
of the Company, any votes cast by or on behalf of such member in contravention
of such requirement or restriction shall not be counted.
(iii) Annual general meetings and extraordinary general meetings
The Company must hold an annual general meeting of the Company for each
financial year and such general meeting must be held within six (6) months after
the end of the Company’s financial year unless a longer period would not infringe
the Listing Rules.
Extraordinary general meetings may be convened on the requisition of one or
more members holding, at the date of deposit of the requisition, not less than
one-tenth of the paid up capital of the Company having the right of voting at
general meetings, on a one vote per share basis. Such requisition shall be made in
writing to the board or the secretary for the purpose of requiring an extraordinary
general meeting to be called by the board for the transaction of any business or
resolution specified in such requisition. Such meeting shall be held within 2
months after the deposit of such requisition. If within 21 days of such deposit, the
board fails to proceed to convene such meeting, the requisitionist(s) himself/
herself (themselves) may convene a physical meeting at only one location which
will be the Principal Meeting Place (as defined below), and all reasonable
expenses incurred by the requisitionist(s) as a result of the failure of the board
shall be reimbursed to the requisitionist(s) by the Company.
Notwithstanding any provisions in the Articles, any general meeting or any
class meeting may be held by means of such telephone, electronic or other
communication facilities as to permit all persons participating in the meeting to
communicate with each other, and participation in such a meeting shall constitute
presence at such meeting.
(iv) Notices of meetings and business to be conducted
An annual general meeting must be called by notice of not less than
twenty-one (21) clear days. All other general meetings must be called by notice of
at least fourteen (14) clear days. The notice is exclusive of the day on which it is
served or deemed to be served and of the day for which it is given, and must
specify (a) the time and date of the meeting, (b) save for an electronic meeting,
the place of the meeting and if there is more than one meeting location as
determined by the Board pursuant to the Articles, the principal place of the
meeting (the “ Principal Meeting Place ”), (c) if the general meeting is to be a
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hybrid meeting or an electronic meeting, the notice shall include a statement to
that effect and with details of the electronic facilities for attendance and
participation by electronic means at the meeting or where such details will be
made available by the Company prior to the meeting, and (d) particulars of
resolutions to be considered at the meeting.
In addition, notice of every general meeting must be given to all members of
the Company other than to such members as, under the provisions of the Articles
or the terms of issue of the shares they hold, are not entitled to receive such
notices from the Company, and also to, among others, the auditors for the time
being of the Company.
Any notice to be given to or by any person pursuant to the Articles may be
given or issued by the following means:
(aa) by serving it personally on the relevant person;
(bb) by sending it through the post to such member’s registered address;
(cc) by delivering or leaving it at such member’s registered address;
(dd) by placing an advertisement in newspapers or other publication and
where applicable, in accordance with the requirements of the Stock
Exchange;
(ee) by sending or transmitting it as an electronic communication to the
relevant person at such electronic address as he may provide under the
Articles, subject to the Company complying with the Cayman Islands
laws and any other applicable laws, rules and regulations from time to
time in force with regard to any requirements for the obtaining of
consent (or deemed consent) from such person;
(ff) by publishing it on the Company’s website to which the relevant person
may have access, subject to the Company complying with the Cayman
Islands law and any other applicable laws, rules and regulations from
time to time in force with regard to any requirements for the obtaining
of consent (or deemed consent) from such person and/or for giving
notification to any such person stating that the notice, document or
publication is available on the Company’s computer network website;
or
(gg) by sending or otherwise making it available to such person through
such other means to the extent permitted by and in accordance with the
Cayman Islands law and other applicable laws, rules and regulations.
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All business that is transacted at an extraordinary general meeting and at an
annual general meeting is deemed special, save that in the case of an annual
general meeting, each of the following business is deemed an ordinary business:
(aaa) the declaration and sanctioning of dividends;
(bbb) the consideration and adoption of the accounts and balance sheet and
the reports of the directors and the auditors;
(ccc) the election of directors in place of those retiring;
(ddd) the appointment of auditors and other officers; and
(eee) the fixing of the remuneration of the directors and of the auditors.
(v) Quorum for meetings and separate class meetings
No business shall be transacted at any general meeting unless a quorum is
present when the meeting proceeds to business, but the absence of a quorum shall
not preclude the appointment of a chairman.
The quorum for a general meeting shall be two members present in person
(or, in the case of a member being a corporation, by its duly authorised
representative) or by proxy or, for quorum purposes only, two persons appointed
by the clearing house as authorised representative or proxy, and entitled to vote.
In respect of a separate class meeting (including an adjourned meeting) convened
to sanction the modification of class rights the necessary quorum shall be two
persons holding or representing by proxy not less than one-third in nominal value
of the issued shares of that class.
(vi) Proxies
Any member of the Company entitled to attend and vote at a meeting of the
Company is entitled to appoint another person as his proxy to attend and vote
instead of him. A member who is the holder of two or more shares may appoint
more than one proxy to represent him and vote on his behalf at a general meeting
of the Company or at a class meeting. A proxy need not be a member of the
Company and is entitled to exercise the same powers on behalf of a member who
is an individual and for whom he acts as proxy as such member could exercise. In
addition, a proxy is entitled to exercise the same powers on behalf of a member
which is a corporation and for which he acts as proxy as such member could
exercise as if it were an individual member. V otes may be given either personally
(or, in the case of a member being a corporation, by its duly authorised
representative) or by proxy.
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(f) Accounts and audit
The board shall cause true accounts to be kept of the sums of money received and
expended by the Company, and the matters in respect of which such receipt and
expenditure take place, and of the property, assets, credits and liabilities of the
Company and of all other matters required by the Companies Act or necessary to give
a true and fair view of the Company’s affairs and to explain its transactions.
The accounting records must be kept at the registered office or at such other place
or places as the board decides and shall always be open to inspection by any Director.
No member (other than a Director) shall have any right to inspect any accounting
record or book or document of the Company except as conferred by law or authorised
by the board or the Company in general meeting. However, an exempted company must
make available at its registered office in electronic form or any other medium, copies
of its books of account or parts thereof as may be required of it upon service of an
order or notice by the Tax Information Authority pursuant to the Tax Information
Authority Act of the Cayman Islands.
A copy of every balance sheet and profit and loss account (including every
document required by law to be annexed thereto) which is to be laid before the
Company at its general meeting, together with a printed copy of the Directors’ report
and a copy of the auditors’ report, shall not less than twenty-one (21) days before the
date of the meeting and at the same time as the notice of annual general meeting be
sent to every person entitled to receive notices of general meetings of the Company
under the provisions of the Articles; however, subject to compliance with all applicable
laws, including the Listing Rules, the Company may send to such persons summarised
financial statements derived from the Company’s annual accounts and the directors’
report instead provided that any such person may by notice in writing served on the
Company, demand that the Company sends to him, in addition to summarised financial
statements, a complete printed copy of the Company’s annual financial statement and
the directors’ report thereon.
At the annual general meeting or at a subsequent extraordinary general meeting in
each year, the members shall by ordinary resolution appoint an auditor to audit the
accounts of the Company and such auditor shall hold office until the next annual
general meeting. Moreover, the members may, at any general meeting, by ordinary
resolution remove the auditor at any time before the expiration of his terms of office
and shall by ordinary resolution at that meeting appoint another auditor for the
remainder of his term. The remuneration of the auditors shall be fixed and approved by
the Company by an ordinary resolution passed at a general meeting or in such manner
as the members may by ordinary resolution determine.
The financial statements of the Company shall be audited by the auditor in
accordance with generally accepted auditing standards which may be those of a country
or jurisdiction other than the Cayman Islands. The auditor shall make a written report
thereon in accordance with generally accepted auditing standards and the report of the
auditor must be submitted to the members in general meeting.
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(g) Dividends and other methods of distribution
The Company in general meeting may declare dividends in any currency to be
paid to the members but no dividend shall be declared in excess of the amount
recommended by the board.
The Articles provide dividends may be declared and paid out of the profits of the
Company, realised or unrealised, or from any reserve set aside from profits which the
directors determine is no longer needed. With the sanction of an ordinary resolution
dividends may also be declared and paid out of share premium account or any other
fund or account which can be authorised for this purpose in accordance with the
Companies Act.
Except in so far as the rights attaching to, or the terms of issue of, any share may
otherwise provide, (i) all dividends shall be declared and paid according to the amounts
paid up on the shares in respect whereof the dividend is paid but no amount paid up on
a share in advance of calls shall for this purpose be treated as paid up on the share and
(ii) all dividends shall be apportioned and paid pro rata according to the amount paid
up on the shares during any portion or portions of the period in respect of which the
dividend is paid. The Directors may deduct from any dividend or other monies payable
to any member or in respect of any shares all sums of money (if any) presently payable
by him to the Company on account of calls or otherwise.
Whenever the board or the Company in general meeting has resolved that a
dividend be paid or declared on the share capital of the Company, the board may
further resolve either (a) that such dividend be satisfied wholly or in part in the form
of an allotment of shares credited as fully paid up, provided that the members entitled
thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu
of such allotment, or (b) that members entitled to such dividend will be entitled to
elect to receive an allotment of shares credited as fully paid up in lieu of the whole or
such part of the dividend as the board may think fit.
The Company may also upon the recommendation of the board by an ordinary
resolution resolve in respect of any one particular dividend of the Company that it may
be satisfied wholly in the form of an allotment of shares credited as fully paid up
without offering any right to members to elect to receive such dividend in cash in lieu
of such allotment.
Any dividend, interest or other sum payable in cash to the holder of shares may
be paid by cheque or warrant sent through the post addressed to the holder at his
registered address, or in the case of joint holders, addressed to the holder whose name
stands first in the register of the Company in respect of the shares at his address as
appearing in the register or addressed to such person and at such addresses as the
holder or joint holders may in writing direct. Every such cheque or warrant shall,
unless the holder or joint holders otherwise direct, be made payable to the order of the
holder or, in the case of joint holders, to the order of the holder whose name stands
first on the register in respect of such shares, and shall be sent at his or their risk and
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payment of the cheque or warrant by the bank on which it is drawn shall constitute a
good discharge to the Company. Any one of two or more joint holders may give
effectual receipts for any dividends or other moneys payable or property distributable
in respect of the shares held by such joint holders.
Whenever the board or the Company in general meeting has resolved that a
dividend be paid or declared the board may further resolve that such dividend be
satisfied wholly or in part by the distribution of specific assets of any kind.
All dividends or bonuses unclaimed for one year after having been declared may
be invested or otherwise made use of by the board for the benefit of the Company until
claimed and the Company shall not be constituted a trustee in respect thereof. All
dividends or bonuses unclaimed for six years after having been declared may be
forfeited by the board and shall revert to the Company.
No dividend or other monies payable by the Company on or in respect of any
share shall bear interest against the Company.
(h) Inspection of corporate records
Pursuant to the Articles, the register and branch register of members maintained in
Hong Kong shall be open to inspection for at least two (2) hours during business hours
by members without charge at the registered office or such other place at which the
register is kept in accordance with the Companies Act, unless the register is closed in
accordance with the Articles.
(i) Rights of minorities in relation to fraud or oppression
There are no provisions in the Articles relating to rights of minority shareholders
in relation to fraud or oppression. However, certain remedies are available to member
of the Company under Cayman Islands law, as summarised in paragraph 3(f) of this
Appendix.
(j) Procedures on liquidation
Unless otherwise provided by the Companies Act, a resolution that the Company
be wound up by the court or be wound up voluntarily shall be a special resolution.
Subject to any special rights, privileges or restrictions as to the distribution of
available surplus assets on liquidation for the time being attached to any class or
classes of shares:
(i) if the Company is wound up and the assets available for distribution
amongst the members of the Company shall be more than sufficient to repay
the whole of the capital paid up at the commencement of the winding up, the
excess shall be distributed pari passu amongst such members in proportion
to the amount paid up on the shares held by them respectively; and
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(ii) if the Company is wound up and the assets available for distribution
amongst the members as such shall be insufficient to repay the whole of the
paid-up capital, such assets shall be distributed so that, as nearly as may be,
the losses shall be borne by the members in proportion to the capital paid
up, or which ought to have been paid up, at the commencement of the
winding up on the shares held by them respectively.
If the Company is wound up (whether the liquidation is voluntary or by the court)
the liquidator may, with the authority of a special resolution and any other sanction
required by the Companies Act divide among the members in specie or kind the whole
or any part of the assets of the Company whether the assets shall consist of property of
one kind or shall consist of properties of different kinds and the liquidator may, for
such purpose, set such value as he deems fair upon any one or more class or classes of
property to be divided as aforesaid and may determine how such division shall be
carried out as between the members or different classes of members. The liquidator
may, with the like authority, vest any part of the assets in trustees upon such trusts for
the benefit of members as the liquidator, with the like authority, shall think fit, but so
that no contributory shall be compelled to accept any shares or other property in
respect of which there is a liability.
(k) Subscription rights reserve
The Articles provide that to the extent that it is not prohibited by and is in
compliance with the Companies Act, if warrants to subscribe for shares have been
issued by the Company and the Company does any act or engages in any transaction
which would result in the subscription price of such warrants being reduced below the
par value of a share, a subscription rights reserve shall be established and applied in
paying up the difference between the subscription price and the par value of a share on
any exercise of the warrants.
3. CAYMAN ISLANDS COMPANY LA W
The Company is incorporated in the Cayman Islands subject to the Companies Act and,
therefore, operates subject to Cayman Islands law. Set out below is a summary of certain
provisions of Cayman company law, although this does not purport to contain all applicable
qualifications and exceptions or to be a complete review of all matters of Cayman company
law and taxation, which may differ from equivalent provisions in jurisdictions with which
interested parties may be more familiar:
(a) Company operations
As an exempted company, the Company’s operations must be conducted mainly
outside the Cayman Islands. The Company is required to file an annual return each
year with the Registrar of Companies of the Cayman Islands and pay a fee which is
based on the amount of its authorised share capital.
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(b) Share capital
The Companies Act provides that where a company issues shares at a premium,
whether for cash or otherwise, a sum equal to the aggregate amount of the value of the
premiums on those shares shall be transferred to an account, to be called the “share
premium account”. At the option of a company, these provisions may not apply to
premiums on shares of that company allotted pursuant to any arrangement in
consideration of the acquisition or cancellation of shares in any other company and
issued at a premium.
The Companies Act provides that the share premium account may be applied by
the company subject to the provisions, if any, of its memorandum and articles of
association in (a) paying distributions or dividends to members; (b) paying up unissued
shares of the company to be issued to members as fully paid bonus shares; (c) the
redemption and repurchase of shares (subject to the provisions of section 37 of the
Companies Act); (d) writing-off the preliminary expenses of the company; and (e)
writing-off the expenses of, or the commission paid or discount allowed on, any issue
of shares or debentures of the company.
No distribution or dividend may be paid to members out of the share premium
account unless immediately following the date on which the distribution or dividend is
proposed to be paid, the company will be able to pay its debts as they fall due in the
ordinary course of business.
The Companies Act provides that, subject to confirmation by the Grand Court of
the Cayman Islands (the “ Court ”), a company limited by shares or a company limited
by guarantee and having a share capital may, if so authorised by its articles of
association, by special resolution reduce its share capital in any way.
(c) Financial assistance to purchase shares of a company or its holding company
There is no statutory restriction in the Cayman Islands on the provision of
financial assistance by a company to another person for the purchase of, or subscription
for, its own or its holding company’s shares. Accordingly, a company may provide
financial assistance if the directors of the company consider, in discharging their duties
of care and acting in good faith, for a proper purpose and in the interests of the
company, that such assistance can properly be given. Such assistance should be on an
arm’s-length basis.
(d) Purchase of shares and warrants by a company and its subsidiaries
A company limited by shares or a company limited by guarantee and having a
share capital may, if so authorised by its articles of association, issue shares which are
to be redeemed or are liable to be redeemed at the option of the company or a
shareholder and the Companies Act expressly provides that it shall be lawful for the
rights attaching to any shares to be varied, subject to the provisions of the company’s
articles of association, so as to provide that such shares are to be or are liable to be so
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redeemed. In addition, such a company may, if authorised to do so by its articles of
association, purchase its own shares, including any redeemable shares. However, if the
articles of association do not authorise the manner and terms of purchase, a company
cannot purchase any of its own shares unless the manner and terms of purchase have
first been authorised by an ordinary resolution of the company. At no time may a
company redeem or purchase its shares unless they are fully paid. A company may not
redeem or purchase any of its shares if, as a result of the redemption or purchase, there
would no longer be any issued shares of the company other than shares held as
treasury shares. A payment out of capital by a company for the redemption or purchase
of its own shares is not lawful unless immediately following the date on which the
payment is proposed to be made, the company shall be able to pay its debts as they fall
due in the ordinary course of business.
Shares purchased by a company is to be treated as cancelled unless, subject to the
memorandum and articles of association of the company, the directors of the company
resolve to hold such shares in the name of the company as treasury shares prior to the
purchase. Where shares of a company are held as treasury shares, the company shall be
entered in the register of members as holding those shares, however, notwithstanding
the foregoing, the company is not to be treated as a member for any purpose and must
not exercise any right in respect of the treasury shares, and any purported exercise of
such a right shall be void, and a treasury share must not be voted, directly or
indirectly, at any meeting of the company and must not be counted in determining the
total number of issued shares at any given time, whether for the purposes of the
company’s articles of association or the Companies Act.
A company is not prohibited from purchasing and may purchase its own warrants
subject to and in accordance with the terms and conditions of the relevant warrant
instrument or certificate. There is no requirement under Cayman Islands law that a
company’s memorandum or articles of association contain a specific provision enabling
such purchases and the directors of a company may rely upon the general power
contained in its memorandum of association to buy and sell and deal in personal
property of all kinds.
Under Cayman Islands law, a subsidiary may hold shares in its holding company
and, in certain circumstances, may acquire such shares.
(e) Dividends and distributions
The Companies Act permits, subject to a solvency test and the provisions, if any,
of the company’s memorandum and articles of association, the payment of dividends
and distributions out of the share premium account. With the exception of the
foregoing, there are no statutory provisions relating to the payment of dividends. Based
upon English case law, which is regarded as persuasive in the Cayman Islands,
dividends may be paid only out of profits.
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No dividend may be declared or paid, and no other distribution (whether in cash
or otherwise) of the company’s assets (including any distribution of assets to members
on a winding up) may be made to the company, in respect of a treasury share.
(f) Protection of minorities and shareholders’ suits
The Courts ordinarily would be expected to follow English case law precedents
which permit a minority shareholder to commence a representative action against or
derivative actions in the name of the company to challenge (a) an act which is ultra
vires the company or illegal, (b) an act which constitutes a fraud against the minority
and the wrongdoers are themselves in control of the company, and (c) an irregularity in
the passing of a resolution which requires a qualified (or special) majority.
In the case of a company (not being a bank) having a share capital divided into
shares, the Court may, on the application of members holding not less than one fifth of
the shares of the company in issue, appoint an inspector to examine into the affairs of
the company and to report thereon in such manner as the Court shall direct.
Any shareholder of a company may petition the Court which may make a winding
up order if the Court is of the opinion that it is just and equitable that the company
should be wound up or, as an alternative to a winding up order, (a) an order regulating
the conduct of the company’s affairs in the future, (b) an order requiring the company
to refrain from doing or continuing an act complained of by the shareholder petitioner
or to do an act which the shareholder petitioner has complained it has omitted to do,
(c) an order authorising civil proceedings to be brought in the name and on behalf of
the company by the shareholder petitioner on such terms as the Court may direct, or
(d) an order providing for the purchase of the shares of any shareholders of the
company by other shareholders or by the company itself and, in the case of a purchase
by the company itself, a reduction of the company’s capital accordingly.
Generally claims against a company by its shareholders must be based on the
general laws of contract or tort applicable in the Cayman Islands or their individual
rights as shareholders as established by the company’s memorandum and articles of
association.
(g) Disposal of assets
The Companies Act contains no specific restrictions on the power of directors to
dispose of assets of a company. However, as a matter of general law, every officer of a
company, which includes a director, managing director and secretary, in exercising his
powers and discharging his duties must do so honestly and in good faith with a view to
the best interests of the company and exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
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(h) Accounting and auditing requirements
A company must cause proper books of account to be kept with respect to (i) all
sums of money received and expended by the company and the matters in respect of
which the receipt and expenditure takes place; (ii) all sales and purchases of goods by
the company; and (iii) the assets and liabilities of the company.
Proper books of account shall not be deemed to be kept if there are not kept such
books as are necessary to give a true and fair view of the state of the company’s
affairs and to explain its transactions.
An exempted company must make available at its registered office in electronic
form or any other medium, copies of its books of account or parts thereof as may be
required of it upon service of an order or notice by the Tax Information Authority
pursuant to the Tax Information Authority Act of the Cayman Islands.
(i) Exchange control
There are no exchange control regulations or currency restrictions in the Cayman
Islands.
(j) Taxation
Pursuant to the Tax Concessions Act of the Cayman Islands, the Company has
obtained an undertaking:
(1) that no law which is enacted in the Cayman Islands imposing any tax to be
levied on profits, income, gains or appreciation shall apply to the Company
or its operations; and
(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance
tax shall not be payable on or in respect of the shares, debentures or other
obligations of the Company.
The undertaking for the Company is for a period of twenty years from 25 March
2021.
The Cayman Islands currently levy no taxes on individuals or corporations based
upon profits, income, gains or appreciations and there is no taxation in the nature of
inheritance tax or estate duty. There are no other taxes likely to be material to the
Company levied by the Government of the Cayman Islands save for certain stamp
duties which may be applicable, from time to time, on certain instruments executed in
or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are a
party to a double tax treaty entered into with the United Kingdom in 2010 but
otherwise is not party to any double tax treaties.
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(k) Stamp duty on transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman
Islands companies except those which hold interests in land in the Cayman Islands.
(l) Loans to directors
There is no express provision in the Companies Act prohibiting the making of
loans by a company to any of its directors.
(m) Inspection of corporate records
The notice of registered office is a matter of public record. A list of the names of
the current directors and alternate directors (if applicable) is made available by the
Registrar of Companies for inspection by any person on payment of a fee. The register
of mortgages is open to inspection by creditors and members.
Members of the Company have no general right under the Companies Act to
inspect or obtain copies of the register of members or corporate records of the
Company. They will, however, have such rights as may be set out in the Company’s
Articles.
(n) Register of members
An exempted company may maintain its principal register of members and any
branch registers at such locations, whether within or without the Cayman Islands, as
the directors may, from time to time, think fit. The register of members shall contain
such particulars as required by Section 40 of the Companies Act. A branch register
must be kept in the same manner in which a principal register is by the Companies Act
required or permitted to be kept. The company shall cause to be kept at the place
where the company’s principal register is kept a duplicate of any branch register duly
entered up from time to time.
There is no requirement under the Companies Act for an exempted company to
make any returns of members to the Registrar of Companies of the Cayman Islands.
The names and addresses of the members are, accordingly, not a matter of public
record and are not available for public inspection. However, an exempted company
shall make available at its registered office, in electronic form or any other medium,
such register of members, including any branch register of members, as may be
required of it upon service of an order or notice by the Tax Information Authority
pursuant to the Tax Information Authority Act of the Cayman Islands.
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(o) Register of Directors and Officers
The Company is required to maintain at its registered office a register of directors
and officers which is not available for inspection by the public. A copy of such register
must be filed with the Registrar of Companies in the Cayman Islands and any change
must be notified to the Registrar within thirty (30) days of any change in such directors
or officers.
(p) Beneficial Ownership Register
An exempted company is required to maintain a beneficial ownership register at
its registered office that records details of the persons who ultimately own or control,
directly or indirectly, 25% or more of the equity interests or voting rights of the
company or have rights to appoint or remove a majority of the directors of the
company. The beneficial ownership register is not a public document and is only
accessible by a designated competent authority of the Cayman Islands. Such
requirement does not, however, apply to an exempted company with its shares listed on
an approved stock exchange, which includes the Stock Exchange. Accordingly, for so
long as the shares of the Company are listed on the Stock Exchange, the Company is
not required to maintain a beneficial ownership register.
(q) Winding up
A company may be wound up (a) compulsorily by order of the Court, (b)
voluntarily, or (c) under the supervision of the Court.
The Court has authority to order winding up in a number of specified
circumstances including where the members of the company have passed a special
resolution requiring the company to be wound up by the Court, or where the company
is unable to pay its debts, or where it is, in the opinion of the Court, just and equitable
to do so. Where a petition is presented by members of the company as contributories
on the ground that it is just and equitable that the company should be wound up, the
Court has the jurisdiction to make certain other orders as an alternative to a winding-up
order, such as making an order regulating the conduct of the company’s affairs in the
future, making an order authorising civil proceedings to be brought in the name and on
behalf of the company by the petitioner on such terms as the Court may direct, or
making an order providing for the purchase of the shares of any of the members of the
company by other members or by the company itself.
A company (save with respect to a limited duration company) may be wound up
voluntarily when the company so resolves by special resolution or when the company
in general meeting resolves by ordinary resolution that it be wound up voluntarily
because it is unable to pay its debts. In the case of a voluntary winding up, such
company is obliged to cease to carry on its business (except so far as it may be
beneficial for its winding up) from the time of passing the resolution for voluntary
winding up or upon the expiry of the period or the occurrence of the event referred to
above.
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For the purpose of conducting the proceedings in winding up a company and
assisting the Court therein, there may be appointed an official liquidator or official
liquidators; and the court may appoint to such office such person, either provisionally
or otherwise, as it thinks fit, and if more persons than one are appointed to such office,
the Court must declare whether any act required or authorised to be done by the
official liquidator is to be done by all or any one or more of such persons. The Court
may also determine whether any and what security is to be given by an official
liquidator on his appointment; if no official liquidator is appointed, or during any
vacancy in such office, all the property of the company shall be in the custody of the
Court.
As soon as the affairs of the company are fully wound up, the liquidator must
make a report and an account of the winding up, showing how the winding up has been
conducted and how the property of the company has been disposed of, and thereupon
call a general meeting of the company for the purposes of laying before it the account
and giving an explanation thereof. This final general meeting must be called by at least
21 days’ notice to each contributory in any manner authorised by the company’s
articles of association and published in the Gazette.
(r) Reconstructions
There are statutory provisions which facilitate reconstructions and amalgamations
approved by (i) a majority in number representing seventy-five per cent. (75%) in
value of creditors, or (ii) seventy-five per cent. (75%) in value of shareholders or class
of shareholders, as the case may be, as are present at a meeting called for such purpose
and thereafter sanctioned by the Court. Whilst a dissenting shareholder would have the
right to express to the Court his view that the transaction for which approval is sought
would not provide the shareholders with a fair value for their shares, the Court is
unlikely to disapprove the transaction on that ground alone in the absence of evidence
of fraud or bad faith on behalf of management.
The Companies Act also contains statutory provisions which provide that a
company may present a petition to the Court for the appointment of a restructuring
officer on the grounds that the company (a) is or is likely to become unable to pay its
debts within the meaning of section 93 of the Companies Act; and (b) intends to
present a compromise or arrangement to its creditors (or classes thereof) either,
pursuant to the Companies Act, the law of a foreign country or by way of a consensual
restructuring. The petition may be presented by a company acting by its directors,
without a resolution of its shareholders or an express power in its articles of
association. On hearing such a petition, the Court may, among other things, make an
order appointing a restructuring officer or make any other order as the Court thinks fit.
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(s) Take-overs
Where an offer is made by a company for the shares of another company and,
within four (4) months of the offer, the holders of not less than ninety per cent. (90%)
of the shares which are the subject of the offer accept, the offeror may at any time
within two (2) months after the expiration of the said four (4) months, by notice in the
prescribed manner require the dissenting shareholders to transfer their shares on the
terms of the offer. A dissenting shareholder may apply to the Court within one (1)
month of the notice objecting to the transfer. The burden is on the dissenting
shareholder to show that the Court should exercise its discretion, which it will be
unlikely to do unless there is evidence of fraud or bad faith or collusion as between the
offeror and the holders of the shares who have accepted the offer as a means of
unfairly forcing out minority shareholders.
(t) Indemnification
Cayman Islands law does not limit the extent to which a company’s articles of
association may provide for indemnification of officers and directors, except to the
extent any such provision may be held by the Court to be contrary to public policy
(e.g. for purporting to provide indemnification against the consequences of committing
a crime).
(u) Economic Substance Requirements
Pursuant to the International Tax Cooperation (Economic Substance) Act of the
Cayman Islands (“ES Act”) that came into force on 1 January 2019, a “relevant entity”
is required to satisfy the economic substance test set out in the ES Act. A “relevant
entity” includes an exempted company incorporated in the Cayman Islands as is the
Company; however, it does not include an entity that is tax resident outside the
Cayman Islands. Accordingly, for so long as the Company is a tax resident outside the
Cayman Islands, including in Hong Kong, it is not required to satisfy the economic
substance test set out in the ES Act.
4. GENERAL
Conyers Dill & Pearman, the Company’s special legal counsel on Cayman Islands law,
have sent to the Company a letter of advice summarising certain aspects of Cayman Islands
company law. This letter, together with a copy of the Companies Act, is available for
inspection as referred to in the paragraph headed “Documents available for inspection” in
Appendix V to this prospectus. Any person wishing to have a detailed summary of Cayman
Islands company law or advice on the differences between it and the laws of any jurisdiction
with which he is more familiar is recommended to seek independent legal advice.
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A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation
Our Company was incorporated in the Cayman Islands as an exempted company
with limited liability under the Companies Act on 22 March 2021.
Our Company’s registered office is at Cricket Square, Hutchins Drive, PO Box
2681, Grand Cayman, KY1- 1111, Cayman Islands, and we established a principal place
of business in Hong Kong at 8/F, Tower 1, The Quayside, 77 Hoi Bun Road, Kwun
Tong, Kowloon, Hong Kong. Our Company was registered as a non-Hong Kong
company under Part 16 of the Companies Ordinance with the Registrar of Companies
in Hong Kong on 22 April 2021. The address for service of process on our Company in
Hong Kong is the same as our place of business in Hong Kong (as set out above). Ms.
Fan Man Seung, V anessa has been appointed as the authorised representative of our
Company for the acceptance of service of process and notices on behalf of our
Company in Hong Kong.
As our Company was incorporated in the Cayman Islands, our corporate structure
and operation is subject to the laws and regulations of the Cayman Islands and our
constitutional documents which comprise the Memorandum and Articles of Association.
A summary of certain parts of our constitution is set out in the section entitled
“Summary of the Constitution of the Company and Cayman Islands Company Law” in
Appendix III to this prospectus.
2. Changes in share capital of our Company
The following sets out the changes in our Company’s share capital since the date
of our incorporation:
(a) As at the date of our incorporation, our Company had an authorised share
capital of HK$50,000 divided into 5,000,000 Shares of par value of HK$0.01
each. NMLG Holdings acquired 1 Share from the subscriber, an independent
third party, at the consideration of HK$0.01. On the same date, 6,999 Shares,
2,000 Shares and 1,000 Shares were allotted and issued for cash at par to
NMLG Holdings, Double Blossoms and Double Fantastic respectively.
(b) On 22 March 2021, our Company, NMLG Holdings, Double Blossoms and
Double Fantastic entered into a share for share exchange agreement to give
effect to the share exchange that NMLG Holdings, Double Blossoms and
Double Fantastic (collectively as sellers) transferred all shares each of them
held in NMG to our Company (as buyer) and our Company allotted and
issued 7,000 Shares, 2,000 Shares and 1,000 Shares (all credited as fully
paid) to NMLG Holdings, Double Blossoms and Double Fantastic
respectively so that their attributable shareholding interests in our Company
would be the same as in NMG immediately before the share exchange.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1–


--- page 438 ---
(c) After the aforesaid share for share exchange agreement, our Company was
owned directly by NMLG Holdings, Double Blossoms and Double Fantastic
as to 70%, 20% and 10% respectively. Since then and up to the Latest
Practicable Date, the issued share capital of our Company is HK$200,
comprising 20,000 Shares of HK$0.01 each, all fully paid or credited as
fully paid.
(d) On 26 June 2023, our Shareholders resolved to increase the authorised share
capital of our Company from HK$50,000 divided into 5,000,000 Shares of
par value of HK$0.01 each to HK$10,000,000 divided into 1,000,000,000
Shares of par value of HK$0.01 each by the creation of an additional of
995,000,000 Shares of par value of HK$0.01 each, each ranking pari passu
with the Shares then in issue in all respects.
Save as aforesaid, there has not been any alteration in the share capital of our
Company since the date of incorporation up to the date of this prospectus.
Conditional on the share premium account of our Company being credited with
the proceeds from the Share Offer, the Capitalisation Issue will be implemented under
which HK$4,499,800 will be capitalised from the share premium account and applied
in paying up in full at par an aggregate of 449,980,000 Shares, of which 314,986,000
Shares, 89,996,000 Shares and 44,998,000 Shares will be allotted and issued to NMLG
Holdings, Double Blossoms and Double Fantastic respectively.
Assuming the Share Offer becomes unconditional and the issue of Shares is made
pursuant to the Capitalisation Issue and the Share Offer, the issued share capital of our
Company immediately following the completion of the Share Offer (without taking into
account the Shares which may be issued upon the exercise of the options which may be
granted under the Share Option Scheme) will be HK$6,000,000 comprising
600,000,000 Shares of HK$0.01 each, all fully paid or credited as fully paid.
3. Written resolutions of our Shareholders passed on 26 June 2023
By resolutions in writing passed by our Shareholders on 26 June 2023, (A) the
authorised share capital of our Company was increased from HK$50,000 divided into
5,000,000 Shares to HK$10,000,000 divided into 1,000,000,000 Shares by the creation
of an additional 995,000,000 Shares, and (B) conditional on all the conditions set out
in “Structure and Conditions of the Share Offer” in this prospectus being fulfilled, the
following resolutions, among others, were duly approved:
(a) the Memorandum of Association and Articles of Association were approved
and adopted with effect from the Listing Date;
(b) the Share Offer was approved and our Directors were authorised to allot and
issue the Offer Shares;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2–


--- page 439 ---
(c) conditional on the share premium account of our Company being credited as
a result of the Share Offer, our Directors were authorised to capitalise
HK$4,499,800 from the share premium account and apply the same in
paying up in full at par an aggregate of 449,980,000 Shares for allotment
and issue to the following Shareholders in the following manner:
Shareholders
Number of
Shares to be
allotted and
issued
NMLG Holdings 314,986,000
Double Blossoms 89,996,000
Double Fantastic 44,998,000
449,980,000
(d) the rules of the Share Option Scheme, the principal terms of which are set
out in the paragraph headed “Share Option Scheme” of this Appendix, were
approved and adopted and our Directors were authorised to approve any
amendments to the rules of the Share Option Scheme as may be acceptable
or not objected to by the Stock Exchange, and at their absolute discretion to
grant options (the “ Options ”) to subscribe for Shares thereunder and to allot,
issue and deal with Shares upon the exercise of Options which may be
granted under the Share Option Scheme and to take all such steps as may be
necessary, desirable or expedient to carry into effect to the Share Option
Scheme;
(e) a general mandate (the “ Issue Mandate ”) was given to our Directors to
exercise all powers of our Company to allot, issue and deal with, otherwise
than by way of rights issue, scrip dividend schemes or similar arrangements
in accordance with the Articles, or upon the exercise of any Options which
may be granted under the Share Option Scheme or under the Share Offer,
Shares with an aggregate number of not exceeding the sum of (aa) 20% of
the total number of Shares in issue immediately following completion of the
Capitalisation Issue and the Share Offer; and (bb) the number of Shares
which may be bought back by our Company pursuant to the authority
granted to our Directors as referred to in sub-paragraph (f) below, until the
conclusion of the next annual general meeting of our Company, or the date
by which the next annual general meeting of our Company is required by the
Articles, the Companies Act or any other applicable laws to be held, or the
passing of an ordinary resolution by Shareholders revoking or varying the
authority given to our Directors, whichever occurs first;
(f) a general mandate (the “ Repurchase Mandate ”) was given to our Directors
to exercise all powers of our Company to purchase Shares on the Stock
Exchange or other stock exchange on which the securities of our Company
may be listed and recognised by the SFC and the Stock Exchange for this
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3–


--- page 440 ---
purpose, with an aggregate number not exceeding 10% of the total number
of Shares in issue immediately following completion of the Capitalisation
Issue and the Share Offer until the conclusion of the next annual general
meeting of our Company, or the date by which the next annual general
meeting of our Company is required by the Articles, the Companies Act, or
any other applicable laws to be held, or the passing of an ordinary resolution
by Shareholders revoking or varying the authority given to our Directors,
whichever occurs first; and
(g) the extension of the Issue Mandate pursuant to paragraph (e) above to
include the number of Shares which may be purchased under the Repurchase
Mandate pursuant to paragraph (f) above.
4. Changes in share capital of subsidiaries
Our subsidiaries are listed in the Accountants’ Report set out in Appendix I to this
prospectus.
Save as disclosed in the paragraph headed “A. Further Information about our
Group – 5. Corporate reorganisation” in this Appendix and the section headed “History,
Reorganisation and Corporate Structure” in this prospectus, there has been no other
alteration in the share capital of the subsidiaries of our Company within the two years
immediately preceding the date of this prospectus.
5. Corporate reorganisation
The companies comprising our Group underwent the Reorganisation to rationalise
our Group’s structure in preparation for the Listing pursuant to which our Company
became the holding company of our Group. For information relating to the
Reorganisation, please refer to the section headed “History, Reorganisation and
Corporate Structure” in this prospectus.
6. Repurchases of our own securities
This paragraph includes information required by the Stock Exchange to be
included in this prospectus concerning the repurchase by us of our Shares.
(a) Provisions of the Listing Rules
The Listing Rules permit companies with a primary listing on the Stock
Exchange to repurchase their securities on the Stock Exchange subject to certain
restrictions, the most important of which are summarised below:
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4–


--- page 441 ---
(i) Shareholders’ approval
All proposed repurchases of securities (which must be fully paid up in
the case of shares) by a company with a primary listing on the Stock
Exchange must be approved in advance by an ordinary resolution of its
shareholders, either by way of general mandate or by specific approval of a
particular transaction.
On 26 June 2023, our Directors were granted the Repurchase Mandate
to repurchase up to 10% of the aggregate number of Shares in issue
immediately following the Capitalisation Issue and the Share Offer on the
Stock Exchange which our securities may be listed. The mandate will expire
at the earliest of (i) the conclusion of the next annual general meeting of our
Company, (ii) the expiration of the period within which the next annual
general meeting of our Company is required by the Articles of Association
or any applicable laws to be held, or (iii) such mandate being revoked,
varied or renewed by an ordinary resolution of our Shareholders in a general
meeting.
(ii) Source of Funds
Repurchases must be paid out of funds legally available for the purpose
in accordance with the Articles of Association and applicable laws and
regulations of the Cayman Islands and any other laws and regulations
applicable to our Company. A listed company shall not repurchase its own
securities on the Stock Exchange for a consideration other than cash or for
settlement otherwise than in accordance with the trading rules of the Stock
Exchange. Subject to the foregoing, any repurchases by us may be made out
of profits or share premium or out of the proceeds of a new issue of shares
made for the purpose of the repurchase or, subject to satisfaction of a
statutory solvency test, out of share capital.
(iii) Status of repurchased Shares
All repurchased Shares (whether effected on the Stock Exchange or
otherwise) will be automatically delisted and the certificates for those Shares
must be cancelled and destroyed.
(iv) Core connected persons
Our Company is prohibited from knowingly repurchasing Shares on the
Stock Exchange from a “core connected person” (as defined in the Listing
Rules) and a core connected person shall not knowingly sell his securities to
our Company on the Stock Exchange.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 5–


--- page 442 ---
(v) Trading restrictions
Our Company may repurchase up to 10% of the total number of Shares
in issue (excluding any Shares which may be issued upon exercise of any
Options that may be granted under the Share Option Scheme). Our Company
may not issue or announce a proposed new issue of the Shares for a period
of 30 days immediately following a repurchase of Shares (other than an
issue of securities pursuant to an exercise of warrants, share options or
similar instruments requiring the Company to issue securities which were
outstanding prior to such repurchase) without the prior approval of the Stock
Exchange. Our Company is also prohibited from repurchasing the Shares on
the Stock Exchange if the repurchase would result in the number of listed
Shares which are in the hands of the public falling below the minimum
percentage required by the Stock Exchange. The broker appointed by our
Company to effect a repurchase of the Shares is required to disclose to the
Stock Exchange any information with respect to a Share repurchase as the
Stock Exchange may require.
(vi) Suspension of repurchase
Share repurchases are prohibited after inside information has come to
the Company’s knowledge until such time as the information has been made
publicly available. In addition, the Stock Exchange reserves the right to
prohibit repurchases of our Shares on the Stock Exchange if our Company
has breached the Listing Rules.
(vii) Reporting requirements
Repurchases of our Shares on the Stock Exchange or otherwise must be
reported to the Stock Exchange not later than 30 minutes before the earlier
of the commencement of the morning trading session or any pre-opening
session on the following trading day. In addition, our Company’s annual
report and accounts are required to disclose details regarding repurchases of
our Shares made during the financial year under review, showing the number
of our Shares repurchased each month and the purchase price per Share or
the highest and lowest price paid for all such repurchases (where relevant),
and the aggregate prices paid for such repurchases.
(b) Reasons for repurchases
Our Directors believe that it is in the best interests of our Company and our
Shareholders for our Directors to have general authority from our Shareholders to
enable our Company to repurchase Shares in the market. Such repurchases may,
depending on market conditions and funding arrangements at the time, lead to an
enhancement of the net asset value per Share and/or earnings per Share and will
only be made if our Directors believe that such repurchases will benefit our
Company and our Shareholders. However, our Directors do not propose to
exercise the Repurchase Mandate to such an extent as would, in the
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 6–


--- page 443 ---
circumstances, have a material adverse effect on the working capital requirements
of our Company or its gearing levels which, in the opinion of the Directors, are
from time to time appropriate for our Company.
(c) General
The exercise in full of the Repurchase Mandate, on the basis of 600,000,000
Shares in issue immediately after the Listing (assuming that any Options that may
be granted under the Share Option Scheme are not exercised at all), would result
in up to 60,000,000 Shares being repurchased by us during the period in which
the Repurchase Mandate remains in force.
None of our Directors nor, to the best of their knowledge having made all
reasonable enquiries, any of their close associates currently intends to sell any
Shares to our Company or our subsidiaries.
Our Directors have undertaken to the Stock Exchange that, so far as the
same may be applicable, they will exercise the Repurchase Mandate in accordance
with the Listing Rules and other applicable laws of the Cayman Islands and Hong
Kong, the Articles of Association and the Companies Act. If, as a result of a
securities repurchase, a Shareholder’s proportionate interest in the voting rights of
our Company is increased, such increase will be treated as an acquisition for the
purpose of the Hong Kong Code on Takeovers and Mergers (the “ Takeovers
Code”). Accordingly, a Shareholder or a group of Shareholders acting in concert
could obtain or consolidate control of our Company and become obliged to make
a mandatory offer in accordance with Rule 26 of the Takeovers Code. Save as
aforesaid, our Directors are not aware of any consequences which would arise
under the Takeovers Code as a consequence of any repurchases pursuant to the
Repurchase Mandate.
Our Directors will not exercise the Repurchase Mandate if the repurchase
would result in the number of Shares which are in the hands of the public falling
below 25% of the total number of Shares in issue (or such other percentage as
may be prescribed as the minimum public shareholding under the Listing Rules).
No core connected person of our Company has notified us that he/she/it has
a present intention to sell Shares to our Company, or has undertaken not to do so
if the Repurchase Mandate is exercised.
Our Company did not make any repurchase of our Shares in the previous six
months.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 7–


--- page 444 ---
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following material contracts (not being contracts in the ordinary course of
business) have been entered into by our Group within two years immediately preceding
the date of this prospectus:
1. the Deed of Indemnity;
2. the Deed of Non-Competition; and
3. the Underwriting Agreement.
2. Intellectual property rights
(a) Trademarks
(i) Trademarks registered in the name of our Group members
As at the Latest Practicable Date, our Group members were the
registered owners of the following trademarks which were registered in the
following jurisdictions and are considered to be or may be material in
relation to our business:
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
PRC 16 3898715 27/01/2029
䣠˙อή Oriental
Sunday
Time Y ear
Limited
PRC 16 4128720 06/06/2027
䣠˙อή Oriental
Sunday
Time Y ear
Limited
PRC 35 7616153 06/02/2024
Time Y ear
Limited
PRC 16 6312784 13/06/2024
Time Y ear
Limited
Hong Kong 16, 41 300958294 19/09/2027
Time Y ear
Limited
Hong Kong 35, 38 301402253 09/08/2029
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 8–


--- page 445 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
PRC 38 34484136 06/07/2029
NEW MEDIA Time Y ear
Limited
PRC 16 6312789 06/09/2024
อෂద Time Y ear
Limited
PRC 16 6312790 13/05/2024
WEEKEND WEEKL Y Time Y ear
Limited
PRC 35 7616502 06/12/2033
อ৿ಂ Time Y ear
Limited
Hong Kong 16, 41 300958203 19/09/2027
อ৿ಂ Time Y ear
Limited
PRC 16 6312792 27/02/2030
New Monday Time Y ear
Limited
Hong Kong 16, 41 300958212 19/09/2027
New Monday Time Y ear
Limited
Hong Kong 35, 38 301402299 09/08/2029
อ Monday Time Y ear
Limited
Hong Kong 16, 41 300958221 19/09/2027
อ Monday Time Y ear
Limited
Hong Kong 35, 38 301402307 09/08/2029
຾᏶ɓմ Time Y ear
Limited
PRC 16 6312778 06/03/2030
຾᏶ɓմ Time Y ear
Limited
PRC 41 6312761 27/09/2030
຾᏶ɓ඄ Time Y ear
Limited
PRC 9 11057447 13/01/2028
Time Y ear
Limited
PRC 9 10375649 13/03/2033
Time Y ear
Limited
PRC 16 10375648 20/03/2033
Time Y ear
Limited
PRC 35 10375647 20/03/2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 9–


--- page 446 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
PRC 38 10375646 20/03/2033
Time Y ear
Limited
PRC 41 10375645 20/03/2033
Time Y ear
Limited
PRC 42 10375644 20/03/2033
Time Y ear
Limited
PRC 9 10375637 13/04/2025
Time Y ear
Limited
PRC 16 10375636 13/03/2024
Time Y ear
Limited
PRC 35 10375635 13/08/2024
Time Y ear
Limited
PRC 39 10375633 20/04/2024
Time Y ear
Limited
PRC 42 12115938 20/08/2025
Time Y ear
Limited
PRC 43 10375630 27/04/2024
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
39, 41,
42, 43
302501892AB 21/01/2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 447 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
PRC 9 12125587 27/09/2025
Time Y ear
Limited
PRC 16 12125588 20/07/2024
Time Y ear
Limited
PRC 35 12125589 20/08/2024
Time Y ear
Limited
PRC 38 12125590 20/07/2024
Time Y ear
Limited
PRC 39 12125591 20/07/2024
Time Y ear
Limited
PRC 41 12125592 20/07/2024
Time Y ear
Limited
PRC 42 12125593 06/05/2025
Time Y ear
Limited
PRC 43 12125594 20/07/2024
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
39, 41,
42, 43
302501892AA 21/01/2033
Time Y ear
Limited
PRC 9 10463346 06/06/2033
Time Y ear
Limited
PRC 16 10463344 06/06/2033
Time Y ear
Limited
PRC 38 10463345 06/06/2024
Time Y ear
Limited
PRC 41 10463343 06/02/2026
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 1–


--- page 448 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
PRC 42 10463342 06/06/2033
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42
304870954 26/03/2029
Time Y ear
Limited
PRC 16 13230587 13/05/2026
Time Y ear
Limited
PRC 41 13230588 27/12/2025
Time Y ear
Limited
Hong Kong 9, 16,
35, 36,
38, 39,
41, 42,
43, 44,
45
302703348 12/08/2033
SUNDAY KISS Time Y ear
Limited
PRC 35 18125885 27/11/2026
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42,
45
304172995 14/06/2027
New Media Group
Limited
PRC 9 24735417 27/04/2031
New Media Group
Limited
PRC 35 24735419 13/12/2029
New Media Group
Limited
PRC 38 24735420 06/08/2029
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 449 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
New Media Group
Limited
PRC 42 24735422 13/12/2029
New Media Group
Limited
PRC 45 24735423 13/12/2029
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42
304738410 18/11/2028
Time Y ear
Limited
PRC 41 34400540 27/07/2029
Time Y ear
Limited
PRC 38 34400541 27/07/2029
Time Y ear
Limited
PRC 16 34400543 27/07/2029
Time Y ear
Limited
Hong Kong 35, 38,
41, 42
304996027 17/07/2029
Time Y ear
Limited
Hong Kong 35, 38,
41, 42
304996036 17/07/2029
Time Y ear
Limited
PRC 41 40209493 20/03/2030
Time Y ear
Limited
PRC 38 40209494 06/04/2030
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 450 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42
305264389 05/05/2030
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42
305264334 05/05/2030
Time Y ear
Limited
PRC 9 45618874 13/01/2031
Time Y ear
Limited
PRC 16 45618873 13/01/2031
Time Y ear
Limited
PRC 35 45618872 13/01/2031
Time Y ear
Limited
PRC 38 45618871 13/01/2031
Time Y ear
Limited
PRC 41 45618870 13/01/2031
Time Y ear
Limited
PRC 42 45618869 13/01/2031
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 451 ---
Trademark Registered owner
Place of
Registration Class
Registration
Number Expiry Date
Time Y ear
Limited
Hong Kong 16, 35,
41, 42
305310026AB 21/06/2030
Time Y ear
Limited
Hong Kong 9, 38 305310026AA 21/06/2030
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42
305296401 07/06/2030
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42
305552262 04/03/2031(ii) Trademark pending registration
As at the Latest Practicable Date, our Group has applied for the
following trademark:
Trademark Applicant
Place of
Application Class
Application
Number
Application
Date
Time Y ear
Limited
Hong Kong 9, 16,
35, 38,
41, 42,
45
305858227 14-01-2022
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 452 ---
(iii) Trademarks licensed to use
As at the Latest Practicable Date, we had been granted a license, inter alia,
to use the following trademarks, which are considered to be or may be material
to our business:
Trademark
Registered
owner
Place of
Registration Class
Registration
Number Expiry Date
Société du
Figaro
Hong Kong 9, 16,
35, 38,
41
304947481 3 June 2029
Société du
Figaro
Hong Kong 9, 16 199305492AA 11 May 2033
Société du
Figaro
Hong Kong 35, 41 199610978AA 11 May 2026
Société du
Figaro
Macau 16 N9556 9 August
2023
(iv) Classes of trademarks registered
The products and/or services under the respective classes above for
trademarks registered in the name of our Group members and trademarks
licensed to use in Hong Kong generally include, among others:
Class Specifications of goods/services
9 Scientific, photographic, cinematographic, optical, checking
(supervision), teaching apparatus and instruments; apparatus
for recording, transmission or reproduction of sound or
images; magnetic data carriers, recording discs; mechanisms
for coin-operated apparatus; software for processing
electronic payments to and from others; authentication
software; calculating machines, data processing equipment
and computers; electronic publications downloadable from
the Internet; electronic publications in compact discs and
tapes; encoded cards; magnetic carriers; computer peripheral
apparatus; computer hardware; computer software; software
downloadable from the Internet; digital music (downloadable
from the Internet); telecommunications apparatus; mobile
phone accessories; on-line electronic publications
(downloadable from the Internet or on a computer network or
a computer database); all included in Class 9.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 453 ---
Class Specifications of goods/services
16 Paper, cardboard and goods made from these materials, not
included in other classes; printed matter and/or publications;
bookbinding material; photographs; stationery; adhesives for
stationery or household purposes; artists’ materials; paint
brushes; typewriters and office requisites (except furniture);
instructional and teaching material (except apparatus); plastic
materials for packaging (not included in other classes);
printers’ type; printing blocks; magazines; newspaper;
newsletter; journals; periodical publications; posters; diaries;
calendars; writing instruments, all included in Class 16.
35 Advertising; business management; business administration;
office functions; provisions of information in relation to
advertising and business matters, operation and supervision
of loyalty and incentive schemes; advertising services
provided via the Internet and data communication network;
production of television and radio advertisings; rental of
advertising space and time on communication media, renting
of publicity materials; publicity agencies; dissemination of
advertising materials; advertising by mail orders; publication
of publicity texts; arranging newspaper subscriptions for
others; provision of news clipping services; provision of
business information; provision of information results from
market researches, market studies and opinion polling
conducted by third parties; business and marketing
researches; auctioneering; trade fairs; publicity services;
retailing in relation to publications, printed matters,
advertising and publicity texts; agency services relating to
personnel recruiting; publication of publicity materials; rental
and/or sale of advertising space; rental and/or sale of
advertising time on communication media; marketing
research; marketing studies; systemisation of data into
computer databases; merchandise ordering services; provision
of business information via the Internet or other
communications network; organisation of exhibition for
commercial and/or advertising purposes; customer
relationship management; promotion, marketing and business
information services relating thereto; computer data
processing; computerised data storage and retrieval services
for digital text, data, image, audio, and video works;
dissemination of advertising for others via computer and
communication networks; promoting the goods and services
of others via computer and communication networks; online
advertisements; all included in Class 35.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 454 ---
Class Specifications of goods/services
38 Telecommunications; streaming of audio and video materials
on the Internet or other communications network;
broadcasting services, namely uploading, posting, showing
displaying, tagging, blogging, sharing, distributing,
publishing, reproducing or otherwise providing data, video,
movies, pictures, images, text, photos, games, user-generated
content, audio content and information over the Internet or
other communications network; providing access to a
multimedia software application to enable sharing of
multimedia content and comments among users; providing
access to database to enable content providers to track
multimedia content; providing access to computer database
on the global computer network and handheld device
database on the global communications networks for
searching and retrieving information, data, websites and
resources available on computer or other communications
networks; peer-to-peer network computer services, namely,
electronic transmission of images, audio-visual and video
content, photographs, videos, data, text, messages,
advertisements, media advertising communications and
information; providing online and telecommunication
facilities for real-time interaction between and among users
of computers, mobile and handheld computers, all included
in Class 38.
39 Travel agency services; transportation reservations and travel
ticket reservation services (by means of a computer network);
provision of transportation information and travel
reservations; travel information services; arranging of tours;
travel guide services; sightseeing tours; making reservations
and bookings for travel; ticketing services for travel; travel
booking agencies; and all the above also provided via a
global computer network; all included in Class 39.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 455 ---
Class Specifications of goods/services
41 provision of entertainment and infotainment via electronic
and digital interactive media; digital video and video film
production services; distribution and rental of electronic
media, recording disc, audio and video compact disc, laser
discs, digital video discs/digital versatile discs (DVD) and
tapes containing television programmes; provision of
information relating to education, entertainment, news,
games, music, movies, drama, television programmes and
performers, celebrity personality, training, recreation,
sporting, social and cultural activities via the Internet and/or
other communications networks; rental of photography and/or
videography kiosks for capturing, uploading, editing and
sharing of pictures and videos; provision of online computer
games and contest; providing online electronic publications
(not downloadable) from the Internet or other
communications networks; publication and electronic
publication of books, newspapers, newsletters, magazines,
journals and periodicals; provision of editing of data, texts,
messages, advertisements, media advertising communication
and information, film, audio program, video program,
audiovisual program, audio content and information, radio,
pictures, photos, images, and compilation services;
publication of electronic journals and blogs featuring user
generated or specified content; publishing services, namely,
publishing of electronic publications for others; all included
in Class 41.
42 Creating and maintaining websites; hosting multi-media
digital content for others; providing a website that gives
users the ability to engage in social networking and manage
their social networking content, providing temporary use of
non-downloadable software for social networking, managing
social networking content, creating a virtual community, and
transmission of images, audio-visual and video content,
photographs, videos, data, text, messages, advertisements,
media advertising communications and information; all
included in Class 42.
43 Services for providing food and drink; temporary
accommodation; travel agency services for booking
accommodation; booking services for hotel accommodation,
temporary lodging, restaurant, bar, cafes, cafeterias, lounges,
self-service and buffet restaurants; and all the above also
provided via the Internet and global computer network; all
included in Class 43.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 456 ---
Class Specifications of goods/services
45 online social networking services; legal services; security
services for the physical protection of tangible property and
individuals; personal and social services rendered by others
to meet the needs of individuals; licensing of data,
multimedia content, video, movies, pictures, images, text,
photos, games, user-generated content, audio content;
licensing of digital data, still images, moving images, audio
and text; all included in Class 45.
The products and/or services under the respective classes above for
trademark registrations in PRC generally include, among others:
Class Specifications of goods/services
9 Scientific, researching, navigation, surveying, photographic,
cinematographic, audio-visual, optical, weighing, measuring,
signaling, detecting, testing, checking, life-saving, and
teaching apparatus and instruments; apparatus and
instruments that process, switch, convert, accumulate,
regulate, or control the distribution or use of electricity;
apparatus and instruments that record, transmit, replay or
process sound, images or data; recorded and downloadable
media, computer software, blank digital or analog media for
recording and storage; mechanisms devices for coin-operated
apparatus; cash registers, computing devices; computers and
computer peripherals; diving suits, diving masks, earplugs for
diving, nose clips for diving and swimming, gloves for
divers and diving breathing apparatus; fire extinguishing
equipment; all included in Class 9.
16 Paper and cardboard; printed matter; book binding materials;
photographs; stationery and office supplies (except furniture);
adhesives for stationery or household purposes; painting
materials and artists’ materials; paint brushes; educational or
teaching supplies; packaging and packaging plastic paper,
plastic film and plastic bags; printing type, printing blocks;
all included in Class 16.
35 Advertising; business operation, organisation and management;
office affairs; all included in Class 35.
38 Telecommunications service; all included in Class 38.
39 Transportation; packaging and storage of goods; travel
arrangements; all included in Class 39.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 457 ---
Class Specifications of goods/services
41 Education; providing of training; entertainment; sporting and
cultural activities; all included in Class 41.
42 Scientific and technological services and research and design
relating thereto; industrial analysis, industrial research and
industrial design services; quality control and quality
certification services; design and development of computer
hardware and software; all included in Class 42.
43 Services for providing food and drink; temporary
accommodation; all included in Class 43.
45 Legal services; provide physical protection security services
for tangible property and individuals; private and social
services provided by others to meet individual needs; all
included in Class 45.
(b) Domain Names
As at the Latest Practicable Date, our Group was the registered proprietor of
the following domain names which are considered to be or may be material in
relation to our business:
Domain Name Registrant Expiry Date
edigest.hk Time Y ear Limited 10/08/2023
emag.com.hk Time Y ear Limited 07/03/2024
gotrip.hk Time Y ear Limited 20/10/2023
itrial.hk Time Y ear Limited 20/09/2023
jetsobee.com Time Y ear Limited 29/11/2023
madamefigaro.hk Time Y ear Limited 24/05/2024
newmedialab.com.hk Time Y ear Limited 27/12/2023
newmonday.com.hk Time Y ear Limited 29/08/2023
nmg.com.hk Time Y ear Limited 11/08/2023
nmplus.hk Time Y ear Limited 03/10/2023
orientalsunday.hk Time Y ear Limited 10/08/2023
somethingwanted.com Time Y ear Limited 20/02/2024
sswagger.hk Time Y ear Limited 02/03/2024
sundaykiss.com Time Y ear Limited 08/04/2024
sundaymore.com Time Y ear Limited 01/08/2023
weekendhk.com Time Y ear Limited 09/08/2023
Save as aforesaid, there are no other trademarks, service marks, intellectual
or industrial property rights which are material for the Group’s business.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 458 ---
3. Connected transactions and related party transactions
Save as disclosed in the section headed “Connected Transactions” in this
prospectus and in note 28 to our consolidated financial statements included in the
Accountants’ Report, the text of which is set out in Appendix I to this prospectus,
during the three years immediately preceding the date of this prospectus, we have not
engaged in any other material connected transactions or related party transactions.
C. FURTHER INFORMATION ABOUT DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Disclosure of interests
A. Disclosures of interest of Directors and Chief Executive
The following Directors of our Company has the following interests in the
Shares, underlying Shares and debentures of (a) our Company immediately
following completion of the Share Offer and the Capitalisation Issue (taking no
account of any additional Shares which may be issued pursuant to the exercise of
any Options under the Share Option Scheme), or (b) its associated corporations
(within the meaning of Part XV of the SFO) as at the Latest Practicable Date;
which will be required to be notified to our Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest or short
positions which they were taken or deemed to have under such provisions of the
SFO) or which will be required, pursuant to section 352 of the SFO, to be entered
in the register referred to therein, or which will be required, pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers as set out
in Appendix 10 to the Listing Rules to be notified to our Company, once the
Shares are listed.
(a) Interests in our Company
Name of Director
Capacity/
Nature of Interests
Number of
Shares or
Underlying
Shares
interested
(Note 1)
Approximate
percentage
of
shareholding
interests
Mr. Royce Lee Interest in controlled
corporation (Note 2)
90,000,000
(L)
15%
Notes:
1. The letter “L” denotes long position in the Shares.
2. Mr. Royce Lee legally and beneficially owns the entire issued share capital of
Double Blossoms. Mr. Royce Lee is deemed to be interested in the same
90,000,000 Shares held by Double Blossoms.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 459 ---
(b) Interests in associated corporation
Ordinary shares of associated corporation
Name of Director
Name of
associated
corporation
Capacity/
Nature of
interests
Number of
issued shares
interested
(Note 1)
Approximate
percentage
of
shareholding
interests
Ms. Fan Man Seung,
V anessa
Emperor
International
Beneficial
owner
10,500,000
(L)
0.29%
Note:
1. The letter “L” denotes long position in the shares.
B. Disclosure of interests of Substantial Shareholders
So far as our Directors are aware, immediately following the completion of
the Share Offer and the Capitalisation Issue (taking no account of any additional
Shares which may be issued pursuant to the exercise of any Options under the
Share Option Scheme), the following persons (not being Directors or chief
executive of our Company) will have or be deemed or taken to have an interest
and/or short position in the Shares or the underlying Shares which would fall to
be disclosed to our Company under the provisions of Divisions 2 and 3 of Part
XV of the SFO or are directly and/or indirectly interested in 10% or more of the
issued voting shares of any members of our Group:
Name
Capacity/
Nature of Interests
Number of
Shares or
underlying
Shares
interested
(Note 1)
Approximate
percentage
of
shareholding
interests
(%)
NMLG Holdings Legal/beneficial owner 315,000,000
(L)
52.5
AY Holdings Interest in controlled
corporation (Note 2)
315,000,000
(L)
52.5
First Trust Services AG Trustee (Note 3) 315,000,000
(L)
52.5
Dr. Albert Y eung Founder of a
discretionary trust
(Note 3)
315,000,000
(L)
52.5
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 460 ---
Name
Capacity/
Nature of Interests
Number of
Shares or
underlying
Shares
interested
(Note 1)
Approximate
percentage
of
shareholding
interests
(%)
Ms. Luk Siu Man, Semon Interests of spouse
(Note 4)
315,000,000
(L)
52.5
Double Blossoms Legal/beneficial owner 90,000,000
(L) (Note 5)
15
Double Fantastic Legal/beneficial owner 45,000,000
(L)
7.5
Ms. V enus Lee Interest in controlled
corporation (Note 6)
45,000,000
(L)
7.5
Mr. Y au Yi Ping Interest of spouse
(Note 7)
45,000,000
(L)
7.5
Notes:
1. The letter “L” denotes long position in the Shares.
2. The entire issued share capital of NMLG Holdings is held by AY Holdings, which in
turn is held by First Trust Services AG as trustee of AY Discretionary Trust. AY
Holdings is deemed to be interested in the same 315,000,000 Shares held by NMLG
Holdings.
3. First Trust Services AG is the trustee and Dr. Albert Y eung is the founder and settlor of
the AY Discretionary Trust respectively. By virtue of the SFO, each of First Trust
Services AG and Dr. Albert Y eung is deemed to be interested in the same 315,000,000
Shares held by NMLG Holdings.
4. Ms. Luk Siu Man, Semon is deemed to be interested in the same 315,000,000 Shares
held by NMLG Holdings by virtue of the deemed interest held by her spouse, Dr. Albert
Y eung.
5. These Shares were the same Shares of which Mr. Royce Lee are deemed interest in and
is set out under the sub-section headed “A. Disclosure of interest of Directors and Chief
Executive” above.
6. Ms. V enus Lee legally and beneficially owns the entire issued share capital of Double
Fantastic and is deemed to be interested in the same 45,000,000 Shares held by Double
Fantastic.
7 Mr. Y au Yi Ping is deemed to be interested in the same 45,000,000 Shares held by
Double Fantastic by virtue of the deemed interest held by his spouse, Ms. V enus Lee.
Except as disclosed above, the Directors are not aware of any person (who is
not a Director or a chief executive of our Company) who will, immediately
following the completion of the Share Offer and the Capitalisation Issue (taking
no account of any additional Shares which may be issued pursuant to the exercise
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


--- page 461 ---
of any Options under the Share Option Scheme), have an interest or short position
in the Shares or underlying Shares which would fall to be disclosed to our
Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or are
directly or indirectly, interested in 10% or more of the issued voting shares of any
members of our Group.
2. Particulars of services agreements and letters of appointment
(a) Executive Directors
Each of the executive Directors has entered into a service agreement with
our Company, pursuant to which each of them accepts their respective
appointment as an executive Director for an initial term of three years from the
Listing Date, subject to the terms and conditions set out therein. The agreement
may be terminated by, among others, serving not less than three months’ prior
notice in writing by either party on the other, and upon such termination, the
executive Director shall resign immediately from such offices held by him in the
Company and all other members of the Group. The appointments of the executive
Directors are subject to the provisions of retirement and rotation of Directors
under the Articles of Association and Appendix 14 of the Listing Rules.
Each of the executive Directors is entitled to a fixed director’s fee under
their service agreements, on top of their respective basic salaries and other
remuneration package, if any, entitled under their employment agreements with
the Group. For further details, please refer to the paragraph headed
“Compensation of Directors and senior management” in the section headed
“Directors, senior management and employees” in this prospectus.
(b) Independent non-executive Directors
Each of the independent non-executive Directors has signed a letter of
appointment with our Company on 26 June 2023, pursuant to which each of them
accepts their respective appointment as an independent non-executive Director
until terminated by not less than three months’ prior notice in writing served by
either party subject to the terms and conditions set out therein. In case of such
termination by notice, the independent non-executive Director shall cease to hold
such office in the Company. Under their respective letters of appointment, each of
the independent non-executive Directors is entitled to a fixed director’s fee. For
further details, please refer to the paragraph headed “Compensation of Directors
and Senior Management” in the section headed “Directors, Senior Management
and Employees” in this prospectus.
The appointments are subject to the provisions of retirement and rotation of
Directors under the Articles of Association and Appendix 14 to the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 462 ---
Save as disclosed above, none of our Directors has entered or proposed to
enter into any service agreements with any member of our Group (excluding
contracts expiring or determinable by the employer within one year without
payment of compensation (other than statutory compensation)).
3. Directors’ remuneration
For details of our Directors’ remuneration during the Track Record Period, please
refer to the section headed “Directors, Senior Management and Employees” in this
prospectus.
Under the service agreements entered into between our Company and our
executive Directors (excluding remuneration package, if any, entitled under their
employment contracts with the Group) and the letters of appointment entered into
between our Company and the independent non-executive Directors, the aggregate
remuneration and benefits in kind our Directors will be entitled to receive for the
financial year ending 31 December 2023 is expected to be approximately HK$485,000.
After taking into account the remuneration package of Mr. Royce Lee under his
employment contract with the Group and that Mr. Wong and Ms. Fan do not have any
employment contract with the Group, the aggregate remuneration and benefits in kind
our Directors will be entitled to receive for the financial year ending 31 December
2023 is expected to be approximately HK$2,597,000.
Save as disclosed in Appendix I to this prospectus, no Director received any
remuneration or benefits in kind from our Group for the financial year ended 31
December 2022.
No emoluments were paid to Directors of our Group or the five highest paid
individuals (including Directors and employees) as an inducement to join or upon
joining our Group or as compensation for loss of office.
4. Disclaimers
(i) None of the Directors nor any of the parties listed in the paragraph headed
“Consents of Experts” of this Appendix was interested in the promotion of,
or in any assets which had been, within the two years immediately preceding
the date of this prospectus, acquired by or disposed of or leased to the
Company or any of its subsidiaries, or were proposed to be acquired by or
disposed of or leased to the Company or any of its subsidiaries.
(ii) None of the Directors nor any of the parties listed in the paragraph headed
“Consents of Experts” of this Appendix was materially interested in any
contract or arrangement subsisting at the date of this prospectus which was
significant in relation to the business of our Group.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 463 ---
(iii) None of the parties listed in the paragraph headed “Consents of Experts” of
this Appendix has any shareholding in any member of our Group or the right
(whether legally enforceable or not) to subscribe for or to nominate persons
to subscribe for securities in any member of our Group.
(iv) So far as is known to the Directors, none of the Directors nor their
associates nor any Shareholder which to the knowledge of the Directors held
more than 5% of the total issued Shares as at the Latest Practicable Date had
any interest in any of the top five customers or the top five suppliers of our
Group.
(v) None of the Directors are interested in any business apart from our Group’s
business which competes or is likely to compete, directly or indirectly, with
the business of our Group.
D. SHARE OPTION SCHEME
The following is a summary of the principal terms of the Share Option Scheme
approved by the resolution of the Shareholders passed on 26 June 2023:
(a) Purpose
The purpose of the Share Option Scheme is for our Group to attract, retain and
motivate talented Participants (as defined in paragraph (c) below) to strive for future
developments and expansion of our Group. The Share Option Scheme shall be an
incentive to encourage the Participants to perform their best in achieving the goals of
our Group and allow the Participants to enjoy the results of our Company attained
through their efforts and contributions.
(b) Conditions
The Share Option Scheme is conditional upon:
(i) the Stock Exchange granting the listing of, and permission to deal in, the
Shares which may be issued pursuant to the exercise of the Options granted
under the Share Option Scheme;
(ii) the commencement of dealings in the Shares on the Stock Exchange; and
(iii) the passing of an ordinary resolution by the Shareholders to approve and
adopt the Share Option Scheme and to authorise the Directors to grant
Options to subscribe for Shares under the Share Option Scheme and to allot,
issue and deal in the Shares pursuant to the exercise of any Option.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 464 ---
(c) Scope of Participants and eligibility of Participants
The Board may, at its discretion, invite:
(i) any employee (whether full time or part time, including any executive
director but excluding any non-executive director) of the Company or any
Subsidiary including persons who are granted Options under the Share
Option Scheme as an inducement to enter into employment contracts with
these companies; and
(ii) any non-executive directors (including independent non-executive directors)
of the Company or any Subsidiary.
In determining the basis of eligibility of each participant (the “ Participant ”), the
Board would take into account such factors as the Board may at its discretion consider
appropriate, including, among others,
(i) his skills, knowledge, experience, expertise and other relevant personal
qualities;
(ii) his contribution made or expected to be made to the growth of the Group;
(iii) his educational and professional qualifications, and knowledge in the
industry; and
(iv) the period of employment with the Group.
“Subsidiary” used in this sub-section “D. Share Option Scheme” shall mean a
subsidiary or subsidiaries (as defined under the Listing Rules) of the Company for the
time being.
(d) Acceptance of offer
Offer of an Option shall be deemed to have been accepted by the grantee when
the duplicate of the relevant offer letter comprising acceptance of the Option duly
signed by the grantee together with a remittance in favour of our Company of HK$1.00
by way of consideration for the grant thereof, is received by our Company within 28
days from the date of the offer.
(e) Exercise price
The exercise price for the Shares under the Share Option Scheme shall be a price
determined by the Board at its sole discretion and notified to the Participant and shall
be no less than the highest of (i) the closing price of the Shares as stated in the Stock
Exchange’s daily quotations sheet on the date on which an Option is granted which
must be a trading day; and (ii) the average closing price of the Shares as stated in the
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-28 –


--- page 465 ---
Stock Exchange’s daily quotation sheets for the five trading days immediately
preceding the date on which an Option is granted. In addition, the exercise price in
relation to each Option shall not be at a discount to the nominal value of each Share.
(f) Maximum number of Shares available for subscription
(i) Subject to (iii) and (iv) below, the total number of Shares which may be
issued upon exercise of all Options to be granted under the Share Option
Scheme and any other share option or share award schemes of our Company
shall not in aggregate exceed 60,000,000 Shares, being 10% of the total
number of Shares in issue as at the date of commencement of dealings in the
Shares on the Stock Exchange, unless our Company obtains an approval
from its Shareholders pursuant to (v) and (vi) below.
(ii) For the purpose of calculating the 10% limit under (i) above, Options lapsed
in accordance with the terms of the Share Option Scheme will not be
regarded as utilised for the purpose of calculating the 10% limit.
(iii) If our Company conducts a share consolidation or subdivision after the 10%
limit has been approved in general meeting, the maximum number of Shares
that may be issued in respect of all Options to be granted under the Share
Option Scheme and any other share option schemes of the Company under
the 10% limit as a percentage of the total number of issued Shares at the
date immediately before and after such consolidation or subdivision shall be
the same, rounded to the nearest whole Share.
(iv) Our Company may seek separate approval from its Shareholders in general
meeting for granting Options to specified Participants beyond the 10% limit
provided that the Options granted in excess of such limit are specially
approved by the Shareholders in general meeting and the Participants are
specifically identified by the Company before such approval is sought. In
such case, our Company shall send a circular to its Shareholders containing
the information required under the Listing Rules for their approval. In
respect of any options to be granted, the date of the Board meeting for
proposing such grant should be taken as the date of grant for the purpose of
calculating the exercise price.
(v) Our Company may seek to refresh the 10% limit after three years from the
date of Shareholders’ approval for the last refreshment (or the adoption of
the Share Option Scheme) by Shareholders’ approval in general meeting.
(vi) Our Company may seek to refresh the 10% limit within any three years from
the date of Shareholders’ approval for the last refreshment (or the adoption
of the Share Option Scheme) by independent Shareholders’ approval in
general meeting where any controlling Shareholders (as defined under the
Listing Rules) and their associates (or if there is no controlling Shareholder,
Directors (excluding independent non-executive Directors) and the chief
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-29 –


--- page 466 ---
executive of the Company and their respective associates) must abstain from
voting in favour of the relevant resolution at the general meeting; and the
Company must comply with the requirements under Listing Rules.
(vii) The 10% limit as refreshed shall not exceed 10% of the total number of
Shares in issue as at the date of the Shareholders’ approval of the refreshed
10% limit.
(g) Conditions, vesting period, restrictions or limitations on offers of Options
Unless otherwise determined by the Board and specified in the offer letter at the
time of the offer of the Option, there are no performance targets that need to be
achieved by the grantee before an Option could be exercised.
The Options to be granted will have a vesting period not less than 12 months
unless the Board (or the remuneration committee of the Company where the grantee is
a Director and/or senior manager) determines to grant a shorter period under “specific
circumstances” on a case-by-case basis:
(a) the grant of performance-based options (in lieu of time-based options);
(b) the grant of compensatory options to Participants whose options being
forfeited when leaving their previous employers to join the Group;
(c) the grant of options in batches during a year for administrative and
compliance reasons;
(d) the variation or cessation of terms of employment contract of the relevant
Participant; and
(e) the grant of Options with a mixed or accelerated vesting schedule such as
where the Options may vest evenly over a period of 12 months.
Subject to the provisions of the Share Option Scheme and the Listing Rules, the
Board may when making the offer of Options impose any conditions, restrictions or
limitations in relation to the Option as it may at its absolute discretion think fit.
All Options granted or outstanding under the Share Option Scheme but not yet
vested to or exercised by any Participant is subject to clawback, namely part or all the
outstanding Options granted to the relevant grantee but not yet vested or exercised may
be forfeited upon occurrence of any of the following events as the Board may at its
absolute discretion think fit on a case-by-case basis: the date on which the grantee
ceases to be a Participant by reason of the termination of his or her employment or
directorship on the grounds that he or she has been guilty of misconduct, or appears
either to be unable to pay or have no reasonable prospect to pay debts, or has become
insolvent, or has made any arrangements or composition with his or her creditors
generally, or has been convicted of any criminal offence involving his or her integrity
or honesty.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 467 ---
(h) Maximum entitlement of Shares of each Participant
(i) Subject to paragraph (ii) below, the total number of Shares issued and to be
issued upon exercise of the Options granted to each Participant (including
both exercised, cancelled and outstanding Options) in any 12-month period
shall not exceed 1% of the total number of Shares in issue.
(ii) Notwithstanding (i) above, any further grant of Options to a Participant in
excess of the 1% limit shall be subject to approval by our Shareholders in
general meeting with such Participant and his or her close associates (or his
associates if such Participant is a connected person) abstaining from voting.
The number and the terms of the Options to be granted to such Participant
shall be fixed before our Shareholders’ approval and the date of the Board
meeting for proposing such further grant should be taken as the date of grant
for the purpose of calculating the exercise price.
(i) Grant of Options to connected persons
(i) Any grant of Options to a Participant who is a Director, chief executive or
substantial Shareholder (as defined under the Listing Rules) of our Company
or their respective associates must be approved by the independent
non-executive Directors (excluding independent non-executive Director who
is the Participant).
(ii) Where the Board proposes to grant any Option to a Participant who is a
substantial Shareholder or an independent non-executive Director, or any of
their respective associates, and such Option which if exercised in full, would
result in such Participant becomes entitled to subscribe for such number of
Shares, when aggregated with the total number of Shares already issued and
issuable to him or her pursuant to all Options granted (excluding Options
lapsed in accordance with the terms of the Share Option Scheme) to him or
her in the 12-month period up to and including the date of such grant,
representing in aggregate more than 0.1% of the relevant class of securities
of the Company in issue on the date of such grant, such proposed grant of
Options must be approved by our Shareholders in general meeting in
compliance with the requirements under the Listing Rules. In such case, our
Company shall send a circular to its Shareholders containing all those terms
as required under the Listing Rules. The Participant concerned and his
associates and all core connected persons of our Company must abstain from
voting in favour at such general meeting. Any vote taken at the meeting to
approve the grant of such Options must be taken by a poll.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 468 ---
(j) Exercise of Options
An Option may be exercised in accordance with the terms of the Share Option
Scheme and such other terms and conditions upon which an Option was granted, at any
time during the option period after the Option has been granted by the Board but in
any event, not longer than 10 years from the date of grant. An Option shall lapse
automatically and not be exercisable (to the extent not already exercised) on the expiry
of the option period.
(k) Transferability of Options
An Option shall be personal to the grantee and shall not be assignable and no
grantee shall in any way sell, transfer, charge, mortgage, encumber or create any
interests (legal or beneficial) in favour of any third party over or in relation to any
Option (save for where a waiver is granted from the Stock Exchange for the benefit of
the Participant and his family members that would continue to meet the purpose of the
Share Option Scheme and comply with other requirements of Chapter 17 of the Listing
Rules). Any breach of the foregoing shall entitle the Company to cancel any
outstanding Option or any part thereof granted to such grantee.
(l) If a grantee ceased to be a Participant by reason other than death or
misconduct
If the grantee ceases to be a Participant for any reason other than on the grantee’s
death or the termination of the grantee’s employment or directorship on one or more of
the grounds specified in paragraph (n) below, the grantee may exercise the Option up
to his entitlement at the date of cessation (to the extent exercisable as at the date of
cessation and not already exercised) within the period of 9 months (or such longer
period as the Board may determine (but not exceeding the expiry date of the option
period)) following the date of such cessation, which date shall be the last actual
working day with the relevant company in our Group whether salary is paid in lieu of
notice or not, or the last date of appointment as director of the relevant company in our
Group, as the case may be, failing which it will lapse.
(m) On the death of a grantee
If the grantee dies before exercising the Option in full and none of the events
which would be a ground for termination of the grantee’s employment or directorship
under paragraph (n) below arises, the personal representative(s) of the grantee shall be
entitled to exercise the Option up to the entitlement of such grantee at the date of
death (to the extent exercisable as at the date of his death and not already exercised)
within a period of 12 months or such longer period as the Board may determine (but
not exceeding the expiry date of the option period) from the date of death, failing
which it will lapse.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-32 –


--- page 469 ---
(n) Termination of employment of a grantee by reason of misconduct
An Option shall lapse automatically (to the extent not already exercised) on the
date on which the grantee ceased to be a Participant by reason of the termination of his
or her employment or directorship on the grounds that he or she has been guilty of
misconduct, or appears either to be unable to pay or have no reasonable prospect to
pay debts, or has become insolvent, or has made any arrangements or composition with
his or her creditors generally, or has been convicted of any criminal offence involving
his or her integrity or honesty.
(o) Voluntary winding-up of the Company
In the event a notice is given by our Company to its Shareholders to convene a
Shareholders’ meeting for the purpose of considering, and if thought fit, approving a
resolution to voluntarily wind-up our Company, our Company shall forthwith give
notice thereof to all grantees. Each grantee (or his or her legal representative(s)) may
by notice in writing to our Company (such notice to be received by our Company not
later than 4 trading days prior to the proposed general meeting) exercise the Option (to
the extent exercisable as at the date of the notice and not already exercised) either to
its full extent or to the extent specified in such notice, and our Company shall as soon
as possible and, in any event, no later than the day immediately prior to the date of the
proposed Shareholders’ meeting, allot and issue such number of Shares to the grantee
which falls to be issued on such exercise. Subject to the above, an Option shall lapse
automatically and not be exercisable (to the extent not already exercised) on the expiry
of the period referred to above.
(p) Rights on a general offer or partial offer
If a general or partial offer whether by way of take-over offer, share re-purchase
offer, or scheme of arrangement is made to all the holders of Shares, or all such
holders other than the offeror and/or any person controlled by the offeror and/or any
person acting in association or concert with the offeror, the Company shall use all its
reasonable endeavours to procure that such offer is extended to all the grantees on the
same terms, mutatis mutandis , and assuming that they will become, by the exercise in
full of the options granted to them, Shareholders of the Company. If such offer
becomes or is declared unconditional, the grantee shall, notwithstanding any other term
on which his options were granted, be entitled to exercise the option (to the extent
exercisable as at the date on which such offer becomes or is declared to be
unconditional and not already exercised) to its full extent or to the extent specified in
the grantee’s notice to the Company at any time thereafter and up to the close of such
offer (or any revised offer) or the record date for entitlements under the scheme of
arrangement, as the case may be. Subject to the above, an Option shall lapse
automatically and not be exercisable (to the extent not already exercised) on the expiry
of the period referred to above.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-33 –


--- page 470 ---
(q) Rights on a compromise or arrangement
If a compromise or arrangement between our Company and its Shareholders or
creditors is proposed for the purposes of or in connection with a scheme for the
reconstruction of our Company or its amalgamation with any other company or
companies, our Company shall give notice thereof to the grantee on the same date as it
despatches the notice which is sent to each Shareholder or creditor of our Company
summoning the meeting to consider such a compromise or arrangement, and thereupon
the grantee (or his or her personal representative(s)) may until the expiry of the period
commencing with such date and ending with the earlier of the date 2 months thereafter
and the date on which such compromise or arrangement is sanctioned by the Court
provided that the relevant Options are not subject to a term or condition precedent to
them being exercisable which has not been fulfilled, exercise any of his or her Options
(to the extent exercisable as at the date of the notice and not already exercised)
whether in full or in part, but the exercise of an Option as aforesaid shall be
conditional upon such compromise or arrangement being sanctioned by the court and
becoming effective. Upon such compromise or arrangement becoming effective, all
Options shall lapse except insofar as previously exercised under the Share Option
Scheme.
(r) Rank pari passu
The Shares to be allotted and issued upon the exercise of an Option will be
subject to all the provisions of the Articles of Association for the time being in force
and will rank pari passu with the fully paid Shares in issue as from the date of
allotment and in particular will entitle the holders to participate in all dividends or
other distributions paid or made on or after the date of allotment other than any
dividend or other distribution previously declared or recommended or resolved to be
paid or made if the record date thereof is before the date of allotment.
(s) Alteration in capital structure
In the event of any alteration in the capital structure of our Company whilst any
Option remains exercisable, whether by way of capitalisation of profits or reserves,
rights issue, open offer, consolidation, sub-division, or reduction of share capital of our
Company or otherwise howsoever in accordance with legal requirements and
requirements of the Stock Exchange, excluding any alteration in the capital structure of
our Company as a result of an issue of Shares pursuant to, or in connection with, any
share option scheme, share appreciation rights scheme or any arrangement for
remunerating or incentivising any employee, consultant or adviser to our Company or
any employee, consultant or adviser to our Group or in the event of any distribution of
our Company’s legal assets to its Shareholders on a pro rata basis (whether in cash or
in specie) other than dividends paid out of the net profits attributable to its
Shareholders for each financial year of our Company, such corresponding alterations (if
any) shall be made to:
(i) the number of Shares subject to the Option so far as unexercised; or
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-34 –


--- page 471 ---
(ii) the subscription price or any combination thereof, as an independent
financial adviser or the auditors of our Company shall certify in writing,
either generally or as regards any particular grantee, to have, in their
opinion, fairly and reasonably satisfied the requirement that any such
adjustment shall be in compliance with the relevant provisions of the Listing
Rules or such other guidelines or the supplemental guidance as may be
issued by the Stock Exchange from time to time, but no such adjustments
shall be made to the extent that a Share would be issued at less than its
nominal value.
(t) Duration of the Share Option Scheme
The Share Option Scheme will remain valid and effective for a period of 10 years
commencing from the date on which the Share Option Scheme is adopted, after which
period no further Options will be granted but the provisions of the Share Option
Scheme shall in all other respects remain in full force and effect and Options which are
granted during the life of the Share Option Scheme may continue to be exercisable in
accordance with their terms of issue.
(u) Cancellation of Options granted
The Board may at any time at its absolute discretion cancel any Option previously
granted to, but not exercised by the grantee. No compensation shall be payable to the
grantee for cancellation of the Options granted but not exercised. Where the Company
cancels Options and offers Options to the same grantee, the offer of the grant of such
new Options may only be made with available Options to the extent not yet granted
(excluding the cancelled Options) within the limit approved by our Shareholders as
mentioned in paragraph (f) above. An Option shall lapse automatically and not be
exercisable (to the extent not already exercised) on the date on which the Option is
cancelled by the Board as provided above.
(v) Termination of the Share Option Scheme
The Company may by resolution in general meeting or the Board may at any time
terminate the operation of the Share Option Scheme and in such event no further
Options will be offered but in all other respects the provisions of the Share Option
Scheme in relation to any outstanding Options shall remain in full force and effect.
(w) Alteration of provisions of the Share Option Scheme
The provisions of the Share Option Scheme may be waived or amended by
resolution of the Board except that provisions relating to matters set out in Rule 17.03
of the Listing Rules cannot be altered to extend the class of person eligible for the
grant of Options or to the advantage of the Participants without the prior approval of
our Shareholders in general meeting. Any alterations to the terms and conditions of the
Share Option Scheme which are of a material nature or any change to the terms of the
Options granted must be approved by the Stock Exchange and our Shareholders (with
the relevant Participants and their associates abstained from voting) in general meeting,
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-35 –


--- page 472 ---
except where the alterations take effect automatically under the existing terms of the
Share Option Scheme. The amended terms and conditions of the Share Option Scheme
must still comply with the relevant requirements of Chapter 17 of the Listing Rules.
Any change to the authority of the Board or scheme administrators in relation to any
alteration to the terms of the Share Option Scheme must be approved by our
Shareholders in general meeting.
(x) Restrictions on the time of grant of Options
No offer shall be made after inside information has come to the Company’s
knowledge until the Company has announced the information and, in particular and
subject to the Listing Rules as amended from time to time, the Company shall not
make any Offer, during the period commencing one month immediately preceding the
earlier of (i) the date of the meeting of the Board (as such date is first notified to the
Stock Exchange in accordance with the Listing Rules) for the approval of our
Company’s results for any year, half-year, quarterly or any other interim period
(whether or not required under the Listing Rules); and (ii) the deadline for the
Company to announce its results for any year or half-year under the Listing Rules, or
quarterly or any other interim period (whether or not required under the Listing Rules)
and ending on the date of the results announcement (including any period of delay in
the publication of the relevant announcements), no Option may be granted.
As at the date of this prospectus, no Option has been granted or agreed to be
granted under the Share Option Scheme. On the assumption that 600,000,000 Shares
are in issue on the date of commencement of dealings in the Shares on the Stock
Exchange, the application to the Stock Exchange for the listing of, and permission to
deal in the Shares on the Stock Exchange includes the 60,000,000 Shares which may
be issued upon the exercise of the Options which may be granted under the Share
Option Scheme.
The terms of the Share Option Scheme are in compliance with Chapter 17 of the
Listing Rules.
E. OTHER INFORMATION
1. Joint Sponsors
The Joint Sponsors have made an application on behalf of our Company to the
Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to
be issued pursuant to the Capitalisation Issue and the Share Offer. All necessary
arrangements have been made to enable such Shares to be admitted into CCASS.
Lego Corporate Finance Limited, being one of the Joint Sponsors, has confirmed
to the Stock Exchange that it satisfies the independence criteria applicable to sponsors
as set out in Rule 3A.07 of the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-36 –


--- page 473 ---
The aggregate fees payable by our Company to the Joint Sponsors is HK$5.7
million, and the Joint Sponsors will be reimbursed for their expenses properly incurred
in connection with the Share Offer.
2. Tax and other indemnities
The Indemnifiers have entered into the Deed of Indemnity with and in favour of
our Company (for itself and as trustee for each of our present subsidiaries) to provide
indemnities on a joint and several basis in respect of, among other matters,
(i) any claim (including claim, counterclaim, any assessment, notice, demand,
fine or other form of liability) falling on any member of our Group relating
to the non-compliance incidents of any member of our Group under the
relevant applicable prevailing law and regulations at the material time on or
before the Listing Date; and
(ii) any taxation (including all fines, penalties, costs, charges, expenses and
interests incidental to or relating to taxation) and claims falling on any
member of the Group resulting from or by reference to any income, profits,
gains earned, accrued or received, or any transactions or events entered into
or occurring, on or before the Listing Date, whether alone or in conjunction
with any other circumstances whenever occurring and whether or not such
taxation or claims are chargeable against or attributable to any other person,
firm, company or corporation.
The Indemnifiers will however, not be liable under the Deed of Indemnity for any
claim and/or taxation where (a) provision has been made for the tax claims, claims
relating to non-compliance incidents and/or taxation in the audited consolidated
accounts of our Group or the audited accounts of any member of our Group during the
Track Record Period; (b) the tax claims, claims relating to non-compliance incidents
and/or taxation arises or is incurred as a result of a retrospective change in law and/or
a retrospective increase of tax rates coming into force after the Listing Date; and (c)
liability under tax claims and/or taxation which arises as a result of any act or
omission of, or transaction voluntarily effected by any member of our Group in the
ordinary course of business after 31 December 2022 up to the Listing Date.
The aggregate liability of First Trust Services AG, being one of the Indemnifiers,
under Deed of Indemnity shall be limited to the total value of the trust fund, property
and assets in respect of the business of our Group from time to time held by First Trust
Services AG as the trustee on trust for the AY Discretionary Trust.
3. Litigation
As at the Latest Practicable Date, no member of our Group was engaged in any
litigation, claim or arbitration of material importance, and no litigation, claim or
arbitration of material importance is known to the Directors to be pending or
threatened against any member of our Group.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-37 –


--- page 474 ---
4. Consents of experts
The following are the qualifications of the experts who have given opinions or
advice which are contained in this prospectus:
Name Qualifications
Emperor Corporate Finance
Limited
Licenced corporation permitted to carry out type 1
(dealing in securities) and type 6 (advising on
corporate finance) regulated activities under the
SFO
Lego Corporate Finance
Limited
Licenced corporation permitted to carry out type 6
(advising on corporate finance) regulated activity
under the SFO
Ernst & Y oung Certified Public Accountants and Registered
Public Interest Entity Auditor
Conyers Dill & Pearman Cayman Islands attorneys-at-law
Dentons Legal advisers to Company as to PRC law
Ravia Global Appraisal
Advisory Limited
Independent professional valuer
Mr. Chan Chung Barrister-at-law
Euromonitor International
Limited
Industry consultant
Each of Emperor Corporate Finance Limited, Lego Corporate Finance Limited,
Ernst & Y oung, Conyers Dill & Pearman, Dentons, Ravia Global Appraisal Advisory
Limited, Mr. Chan Chung and Euromonitor International Limited has given and has not
withdrawn their respective written consents to the issue of this prospectus with copies
of their reports, valuation certificate, letters, opinions or summaries of opinions (as the
case may be), all of which are dated the date of this prospectus and made for
incorporation in this prospectus, and the references to their names included herein in
the form and context in which they are respectively included.
None of the experts named above has any shareholding interests in our Company
or any of our subsidiaries or the right or option (whether legally enforceable or not) to
subscribe for or to nominate persons to subscribe for securities in our Company or any
of our subsidiaries.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-38 –


--- page 475 ---
5. Promoter
Our Company has no promoter for the purpose of the Listing Rules. Within the
two years immediately preceding the date of this prospectus, no cash, securities or
other benefit has been paid, allotted or given nor are any proposed to paid, allotted or
given to any promoters in connection with the Share Offer and the related transaction
described in this prospectus.
6. Preliminary expenses
The amount of preliminary expenses incurred by our Company is approximately
HK$54,000 and has been paid by our Company.
7. Binding effect
This prospectus shall have the effect, if an application is made in pursuance
hereof, of rendering all persons concerned bound by all the provisions (other than the
penal provisions) of sections 44A and 44B of the CWUMPO insofar as applicable.
8. Miscellaneous
(a) Within the two years immediately preceding the date of this prospectus:
(i) no share or loan capital of our Company or of any of our subsidiaries
has been issued, agreed to be issued or is proposed to be issued fully or
partly paid either for cash or for a consideration other than cash;
(ii) no commissions, discounts, brokerages or other special terms have been
granted in connection with the issue or sale of any capital of our
Company or any of our subsidiaries;
(iii) no commission has been paid or payable (except to sub-underwriter) for
subscribing or agreeing to subscribe, or procuring or agreeing to
procure subscriptions, for any Shares; and
(iv) no founder, management or deferred shares or any debentures in our
Company or any of its subsidiaries have been issued or agreed to be
issued.
(b) No share, warrant or loan capital of our Company or any of our subsidiaries
is under option or is agreed conditionally or unconditionally to be put under
option.
(c) None of the equity and debt securities of our Company is listed or dealt with
in any other stock exchange nor is any listing or permission to deal being or
proposed to be sought.
(d) Our Company has no outstanding convertible debt securities.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-39 –


--- page 476 ---
(e) There has been no material adverse change in the financial or trading
position or prospects of our Group since 31 December 2022 (being the date
to which the latest audited consolidated financial statements of our Group
were made up).
(f) There has not been any interruption in the business of our Group which may
have or have had a significant effect on the financial position of our Group
in the 12 months immediately preceding the date of this prospectus.
(g) There is no restriction affecting the remittance of profits or repatriation of
capital into Hong Kong and from outside Hong Kong.
(h) There are no arrangements in existence under which future dividends are to
be or agreed to be waived.
(i) The principal register of members of our Company will be maintained in the
Cayman Islands by Conyers Trust Company (Cayman) Limited and a branch
register of members of our Company will be maintained in Hong Kong by
Tricor Secretaries Limited. Unless our Directors otherwise agree, all transfer
and other documents of title of Shares must be lodged for registration with
and registered by the Hong Kong Share Registrar and may not be lodged in
the Cayman Islands.
(j) Our Directors have been advised that under the Companies Act the use of a
Chinese name by our Company in conjunction with its English name does
not contravene the Companies Act.
9. Taxation of Holders of Shares
(a) Hong Kong
The sale, purchase and transfer of Shares registered with our Hong Kong
branch register of members will be subject to Hong Kong stamp duty. The current
rate charged on each of the purchaser and seller is 0.13% of the consideration of
or, if higher, of the fair value of the Shares being sold or transferred.
Profits from dealings in the Shares arising in or derived from Hong Kong
may also be subject to Hong Kong profits tax.
Pursuant to The Revenue (Abolition of Estate Duty) Ordinance 2005 which
came into effect on 11 February 2006 in Hong Kong, estate duty ceased to be
chargeable in Hong Kong in respect of the estates of persons dying on or after
that date. No Hong Kong estate duty is payable and no estate duty clearance
papers are needed for an application for a grant of representation in respect of
holders of Shares whose death occur on or after 11 February 2006.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-40 –


--- page 477 ---
(b) Cayman Islands
There is no stamp duty payable in the Cayman Islands on transfers of shares
of Cayman Islands companies save for those which hold interests in land in the
Cayman Islands.
(c) Consultation with professional advisors
Potential investors in the Share Offer are recommended to consult their
professional advisers if they are in any doubt as to the taxation implications of
subscribing for, purchasing, holding or disposing of or dealing in the Shares. It is
emphasised that none of our Company, our Directors or parties involved in the
Share Offer accepts responsibility for any tax effect on, or liabilities of holders of
Shares resulting from their subscription for, purchase, holding or disposal of or
dealing in Shares or exercise of any rights attaching to them.
10. Material adverse change
Our Directors confirm that, save for the matters disclosed in the section headed
“Summary – Latest Development subsequent to the Track Record Period” in this
prospectus, there has been no material adverse change in the financial or trading
position or prospects of our Group since 31 December 2022 (being the date to which
the latest audited consolidated financial statements of our Group were made up) up to
the date of this prospectus.
11. Bilingual prospectus
The English language and Chinese language versions of this prospectus are being
published separately in reliance upon the exemption provided by section 4 of the
Companies Ordinance (Exemption of Companies and Prospectuses from Compliance
with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).
In case of any discrepancies between the English language version and Chinese
language version of this prospectus, the English language version shall prevail.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-41 –


--- page 478 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG
KONG
The documents attached to the copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were (i) copies of the Application Forms; (ii) the
written consents referred to in the paragraph headed “Consents of experts” in Appendix IV
to this prospectus; and (iii) copies of each of the material contracts referred to in the
paragraph headed “Summary of material contracts” in Appendix IV to this prospectus.
DOCUMENTS ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at www.hkexnews.hk and our website at www.newmedialab.com.hk during a
period of 14 days from the date of this prospectus:
1. the Memorandum and Articles of Association;
2. the accountants’ report prepared by Ernst & Y oung, the text of which is set out in
Appendix I to this prospectus;
3. the letter report on unaudited pro forma financial information issued by Ernst &
Y oung, the text of which is set out in Appendix II to this prospectus;
4. the rules of the Share Option Scheme;
5. the service agreements and letters of appointment referred to in the paragraph
headed “Further information about Directors and substantial shareholders” in
Appendix IV to this prospectus;
6. the material contracts referred to in the paragraph headed “Summary of material
contracts” in Appendix IV to this prospectus;
7. the written consents referred to in the paragraph headed “Consents of experts” in
Appendix IV to this prospectus;
8. the audited consolidated financial statements of our Group for the financial years
ended 31 December 2020, 2021 and 2022;
9. the Companies Act;
10. the opinion letter in relation to the tenancies/licences of the premises leased/
licenced from Winning Treasure issued by Ravia Global Appraisal Advisory
Limited, an independent valuer;
11. the legal opinion issued by Mr. Chan Chung, barrister-at-law;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND ON DISPLAY
–V - 1–


--- page 479 ---
12. the legal opinion from Conyers Dill & Pearman, our Cayman Islands legal
advisers, summarising certain aspects of Cayman Islands company law referred to
in the section headed “Summary of the Constitution of the Company and the
Company Law of the Cayman Islands” in Appendix III to this prospectus; and
13. the legal opinion dated the prospectus date issued by Dentons, our PRC Legal
Adviser in respect of our Group’s operations and property interests in the PRC.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND ON DISPLAY
–V - 2–


--- page 480 ---
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