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(Incorporated in the Cayman Islands with limited liability)
Stock Code: 6831
GLOBAL OFFERING
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
綠茶集團有限公司
Green Tea Group Limited
綠茶集團有限公司
Green Tea Group Limited
綠茶集團有限公司
Green Tea Group Limited


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If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
Green Tea Group Limited
ʮ̡
(Incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
Number of Offer Shares under
the Global Offering
: 168,364,000 Shares (comprising
117,854,800 New Shares and
50,509,200 Sale Shares and subject to
the Over-allotment Option)
Number of Hong Kong Offer Shares : 16,836,400 Shares (subject to
adjustment)
Number of International Offer Shares : 151,527,600 Shares (comprising
101,018,400 New Shares and
50,509,200 Sales Shares and subject to
adjustment and the Over-allotment
Option)
Offer Price : HK$7.19 per Offer Share, 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% (payable
in full on application in Hong Kong
dollars and subject to refund)
Nominal value : US$0.00002 per Share
Stock code : 6831
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Overall Coordinators
(in alphabetical order)
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility
for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for an y 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 section headed “Documents Delivered to the Registrar of Companies a nd Available on
Display” in Appendix V , has been registered by the Registrar of Companies in Hong Kong SAR as required by Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong SAR and the Registrar of Companies
in Hong Kong SAR take no responsibility for the contents of this prospectus or any of the other documents referred to above.
The Offer Price will be HK$7.19 per Offer Share, unless otherwise announced. The Sponsor-Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) may, with the consent of our Company and the Selling Shareholder, reduce the Offer Price stated in this prospectus and/or reduce the num ber of
Offer Shares being offered pursuant to the Global Offering at any time on or prior to the morning of the last day for lodging applications under the Hong K ong
Public Offering. In such a case, notices of the reduction of the Offer Price and/or the number of Offer Shares will be published on the website of our Comp any
at www.china-greentea.com.cn
and on the website of the Hong Kong Stock Exchange at www.hkexnews.hk 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 Hong Kong Public Offering. Further detail sa r e
set out in the section headed “Structure and Conditions of the Global Offering” and “How to Apply for the Hong Kong Offer Shares” in this prospectus.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out
in the section headed “Risk Factors” in this prospectus. The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to
termination by the Sponsor-Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a .m. on the Listing
Date. See “Underwriting – Underwriting Arrangements and Expenses – Hong Kong Public Offering – Grounds for Termination” in this prospectus. It is imp ortant that you
refer to that section for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offe red, sold, pledged
or transferred within the United States, except in transactions exempt from or not subject to, the registration requirements under the U.S. Securiti es Act. The Offer Shares
are being offered and sold outside the United States in offshore transactions in accordance with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic
in relation to the Hong Kong Public Offering. This prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our
website at www.china-greentea.com.cn . If you require a printed copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
May 8, 2025


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Y our application must be for a minimum of 400 Hong Kong 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. If you are applying through the HK eIPO White Form service, you may refer to the
table below for the amount payable for the number of Shares you have selected. Y ou must pay
the respective amount payable on application in full upon application for Hong Kong Offer
Shares. If you are applying through the HKSCC EIPO channel, you are required to prefund
your application based on the amount specified by your broker or custodian, as determined
based on the applicable laws and regulations in Hong Kong SAR.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
400 2,905.00 6,000 43,575.06 90,000 653,626.00 1,000,000 7,262,511.16
800 5,810.01 8,000 58,100.09 100,000 726,251.11 2,000,000 14,525,022.30
1,200 8,715.01 10,000 72,625.11 200,000 1,452,502.24 3,000,000 21,787,533.46
1,600 11,620.02 20,000 145,250.22 300,000 2,178,753.35 4,000,000 29,050,044.60
2,000 14,525.02 30,000 217,875.33 400,000 2,905,004.45 5,000,000 36,312,555.76
2,400 17,430.03 40,000 290,500.45 500,000 3,631,255.58 6,000,000 43,575,066.90
2,800 20,335.03 50,000 363,125.56 600,000 4,357,506.69 7,000,000 50,837,578.06
3,200 23,240.03 60,000 435,750.67 700,000 5,083,757.80 8,418,000
(1) 61,135,818.87
3,600 26,145.04 70,000 508,375.78 800,000 5,810,008.92
4,000 29,050.04 80,000 581,000.89 900,000 6,536,260.04
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the Hong
Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for applications made through
the application channel of the HK eIPO White Form service) while the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
No application for any other number of Hong Kong Offer Shares will be considered and
any such application is liable to be rejected.
IMPORTANT


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Hong Kong Public Offering commences ..................... .9:00 a.m. on Thursday,
May 8, 2025
Latest time for completing electronic applications under the
HK eIPO White Form service through the designated
website at www.hkeipo.hk .............................. 1 1:30 a.m. on Tuesday,
May 13, 2025
Application lists open (3) ................................... 1 1:45 a.m. on Tuesday,
May 13, 2025
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 Tuesday,
May 13, 2025
Application lists close (3) ................................. .12:00 noon on Tuesday,
May 13, 2025
An announcement of results of allocations in
the Hong Kong Public Offering to be available
through a variety of channels, including the website
of the Hong Kong Stock Exchange at www.hkexnews.hk
and the Company’s website at www.china-greentea.com.cn (5)
(see “How to Apply for the Hong Kong Offer Shares –
B. Publication of Results” in this prospectus) from ............ 1 1:00 p.m. on Thursday,
May 15, 2025
Results of allocation in the Public Offer to be available at
“Allotment Results” page at www.tricor.com.hk/ipo/result
and www.hkeipo.hk/IPOResult with a “search by ID”
function from ....................................... 1 1:00 p.m. on Thursday,
May 15, 2025
Share certificates in respect of wholly or partially
successful applications to be dispatched or
deposited into CCASS on or before
(6)(8) ............................... Thursday,
May 15, 2025
EXPECTED TIMETABLE
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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 dispatched on or before
(7)(8) ................. Friday,
May 16, 2025
Dealings in the Shares on the Stock Exchange expected
to commence at 9:00 a.m. on ......................................... Friday,
May 16, 2025
Notes:
(1) All times refer to Hong Kong SAR 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
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 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 a tropical cyclone warning signal number 8 or above or a “black” rainstorm warning and/or Extreme
Conditions in force in Hong Kong SAR at any time between 9:00 a.m. and 12:00 noon on Tuesday, May 13,
2025, the application lists will not open or close on that day. See “How to Apply for the Hong Kong Offer
Shares – E. Bad Weather Arrangements” in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via CCASS should refer to the section headed “How to Apply for the Hong Kong Offer Shares – 2. Application
Channels” in this prospectus.
(5) None of the website or any of the information contained on the website forms part of this prospectus.
(6) Share certificates will only become valid at 8:00 a.m. on the Listing Date provided that the Global Offering
has become unconditional and the right of termination described in the section headed “Underwriting –
Underwriting Arrangements and Expenses – Hong Kong Public Offering – Grounds for Termination” in this
prospectus 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.
(7) e-Auto Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially
successful applications.
(8) Applicants who have applied for Hong Kong Offer Shares by giving electronic application instructions to
HKSCC via CCASS should refer to the section headed “How to Apply for the Hong Kong Offer Shares –
D. Despatch/Collection of Share Certificates and Refund of Application Monies” in this prospectus for details.
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) dispatched 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) dispatched
to the address as specified in their application instructions in the form of refund cheques in favor of the
applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at their own risk.
Further information is set out in the sections headed “How to Apply for the Hong Kong Offer Shares –
D. Despatch/Collection of Share Certificates and Refund of Application Monies” in this prospectus.
EXPECTED TIMETABLE
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The above expected timetable is a summary only. For details of the structure and
conditions of the Global Offering, and the procedures for applications for Hong Kong Offer
Shares, see the sections headed “Structure and Conditions of the Global Offering” and “How
to Apply for the Hong Kong Offer Shares”, respectively.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such a case, the Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE
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IMPORTANT NOTICE TO INVESTORS
This prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the Hong Kong Offer Shares
offered by this prospectus pursuant to the Hong Kong Public Offering. This prospectus
may not be used for the purpose of making, and does not constitute, an offer or
invitation in any other jurisdiction or in any other circumstances. No action has been
taken to permit a public offering of the Offer Shares in any jurisdiction other than
Hong Kong SAR and no action has been taken to permit the distribution of this
prospectus in any jurisdiction other than Hong Kong SAR. The distribution of this
prospectus and the offering of the Offer Shares in other jurisdictions are subject to
restrictions and may not be made except as permitted under the applicable securities
laws of such jurisdictions pursuant to registration with or authorization by the relevant
securities regulatory authorities or an exemption therefrom.
Y ou should rely only on the information contained in this prospectus to make your
investment decision. We have not authorized anyone to provide you with information
that is different from what is contained in this prospectus. Any information or
representation not made in this prospectus must not be relied on by you as having been
authorized by us, the Selling Shareholder, the Joint Sponsors, Sponsor-Overall
Coordinators, the Overall Coordinators, the Capital Market Intermediaries, Joint
Global Coordinators, Joint Bookrunners and Joint Lead Managers, the Underwriters,
any of our or their respective directors or any other person or party involved in the
Global Offering.
Page
Expected Timetable ................................................. i
Contents ......................................................... i v
Summary ......................................................... 1
Definitions ........................................................ 2 5
Glossary ......................................................... 3 9
Forward-Looking Statements ......................................... 4 1
Risk Factors ...................................................... 4 3
Waivers from Strict Compliance with the Listing Rules .................... 7 6
CONTENTS
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Information about this Prospectus and the Global Offering ................ 8 1
Directors and Parties Involved in the Global Offering ..................... 8 5
Corporate Information .............................................. 9 3
Industry Overview ................................................. 9 6
Regulatory Overview ............................................... 1 0 8
History, Reorganization and Corporate Structure ........................ 1 2 9
Business .......................................................... 1 4 4
Relationship with our Controlling Shareholders .......................... 2 2 7
Directors and Senior Management ..................................... 2 3 0
Substantial Shareholders ............................................ 2 4 5
Share Capital ..................................................... 2 4 7
Cornerstone Investors ............................................... 2 5 1
Financial Information ............................................... 2 5 8
Future Plans and Use of Proceeds ..................................... 3 1 6
Underwriting ...................................................... 3 2 4
Structure and Conditions of the Global Offering ......................... 3 3 9
How to Apply for the Hong Kong Offer Shares .......................... 3 5 0
Appendix I – Accountants’ Report .............................. I - 1
Appendix II – Unaudited Pro Forma Financial Information .......... II-1
Appendix III – Summary of the Constitution of Our 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
Available on Display ............................ V - 1
CONTENTS
–v–


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This summary aims to give you an overview of the information contained in this
prospectus. As it 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 prospectus. Y ou should read the whole document before you decide to
invest in the Offer Shares. There are risks associated with any investment. Some of the
particular risks in investing in the Offer Shares are set forth in the section headed
“Risk Factors” of this prospectus. Y ou should read that section carefully before you
decide to invest in the Offer Shares.
OVERVIEW
We are a well-known operator of casual Chinese restaurants in Mainland China. We create
customer value by providing fusion cuisine at accessible price points and decoration inspired
by Chinese traditional culture. With this vision, we opened our first Green Tea restaurant in
2008 by the beautiful West Lake in Hangzhou, and have built a restaurant network consisting
of 493 restaurants and covering 21 provinces, four municipalities and two autonomous regions
in the PRC, as well as Hong Kong SAR as of the Latest Practicable Date. We ranked third in
terms of number of restaurants and fourth in terms of revenue among casual Chinese restaurant
brands in Mainland China in 2024, according to the CIC Report. According to the CIC report,
casual Chinese cuisine restaurant market is highly fragmented due to a large number of market
participants, and we had a market share of 0.7% in 2024. In addition, according to the CIC
report, casual Chinese cuisine restaurants have an average spending per guest in the range of
RMB50 to RMB100.
The vision for Green Tea restaurants was conceived by our co-founders, Mr. Wang
Qinsong (ؒand Ms. Lu Changmei (ૠ), during their days of managing Green Tea
Y outh Hostel, which they established near the West Lake of Hangzhou in 2004. Surrounded by
beautiful tea farms, the hostel attracted backpackers from across Mainland China and the rest
of the world. As our co-founders came to know their diverse guests, they gradually realized that
fusion cuisine was best suited to their restaurant. Therefore, they started to experiment with
fusion food and developed several popular dishes, such as roasted chicken and grilled shrimp.
Besides the food, guests loved the hostel restaurant because of its beautiful views of natural
sceneries. As the restaurant primarily served young backpackers, the menu items were offered
at accessible prices. The hostel restaurant was highly popular and became the prototype for
Green Tea restaurants.
Today, we operate a nationwide restaurant network, and we have remained true to our
original vision. Leveraging the flexibility of Chinese fusion cuisine, we regularly update our
menu to refresh and enhance our guests’ dining experience. We infuse the timeless elements of
Chinese traditional art and natural landscape into the decoration of our restaurants, offering a
dining experience that differentiates us from other casual restaurants. We also firmly believe
that gourmet should not be a privilege, and we have kept our menu items at accessible prices.
Fusion food, restaurant decoration, accessible pricing and close focus on food safety have
been the recipe for our success. We will keep applying this recipe to each of our restaurants.
SUMMARY
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RESTAURANT NETWORK
Our restaurant network experienced substantial growth during the Track Record Period.
Our total restaurants increased from 276 as of December 31, 2022 to 465 as of December 31,
2024, representing a CAGR of 29.8%. The number of our restaurants in operation further
increased to 493 as of the Latest Practicable Date. Our restaurants are typically located at
shopping malls. We opened 120 new restaurants in 2024 and plan to open 150, 200 and 213 new
restaurants in 2025, 2026 and 2027, respectively. As of the Latest Practicable Date, we have
commenced operation of 32 restaurants and signed the lease agreements for 17 restaurants to
be opened in 2025, and renovation has been commenced for nine restaurants. Among the 17
restaurants for which we have signed the lease agreements, the lease terms for 14 of such
restaurants have already started and the lease terms for three of such restaurants have yet to
started as of the Latest Practicable Date.
The following table sets forth the movement in the total number of our restaurants during
the Track Record Period and up to the Latest Practicable Date:
For the year ended December 31,
From
January 1,
2025 to the
Latest
Practicable
Date2022 2023 2024
Number of restaurants at the beginning
of the period 236 276 360 465
Number of new restaurants opened
during the period 47 89 120 32
Number of restaurants closed during
the period (7) (5) (15) (4)
Number of restaurants at the end of
the period 276 360 465 (1) 493(1)
Note:
(1) Including restaurants opened under the Mang Gang Le brand. See “Business – Our Business –
Restaurant Network Expansion” for further details about the Mang Gang Le brand.
We closed a total of seven, five, 15 and four restaurants in 2022, 2023, 2024 and the
period from January 1, 2025 to the Latest Practicable Date, respectively. The closing down of
most of such restaurants was determined on a case-by-case basis and primarily due to (i) the
expiration of the relevant lease agreements and our business decisions not to renew such lease
agreements, (ii) performance and other commercial reasons, including the impact of the
COVID-19 pandemic, or (iii) winding down of certain landlords’ operations.
SUMMARY
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RESTAURANT PERFORMANCE
Key Performance Indicators
We are a well-known operator of casual Chinese restaurants in Mainland China. During
the Track Record Period, we primarily generated our revenue from restaurant operations and
delivery service.
The following table sets forth the components of our revenue for the periods indicated.
Y ear Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Restaurant operations 1,976,519 83.2 3,059,989 85.3 3,099,173 80.8
Delivery service 397,114 16.7 517,153 14.4 723,057 18.8
Others
(1) 1,820 0.1 12,036 0.3 15,972 0.4
Total revenue 2,375,453 100.0 3,589,178 100.0 3,838,202 100.0
Note:
(1) Primarily consists of (i) commissions received from certain providers of cell phone charging services,
(ii) sales of products such as cooking oil, condiments and gift boxes and (iii) fees for parking services.
The following table sets forth certain key performance indicators of our restaurants by
location during the Track Record Period. According to CIC, the calculations of all key
performance indicators below are in line with the industry practice. Where applicable, the
revenue in the table represents revenue from restaurant operations and delivery service.
For the year ended December 31,
2022 2023 2024
Revenue (in thousands of RMB) (1)
Eastern China (2) 710,137 1,107,548 1,265,491
Guangdong province 621,811 814,699 762,035
Northern China
(3) 517,146 708,494 626,798
Other (4) 524,539 946,401 1,167,906
Total 2,373,633 3,577,142 3,822,230
SUMMARY
–3–


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For the year ended December 31,
2022 2023 2023 2024
Revenue growth (%):
Eastern China (2) 56.0 14.3
Guangdong province 31.0 (6.5)
Northern China
(3) 37.0 (11.5)
Other (4) 80.4 23.4
Overall 50.7 6.9
For the year ended December 31,
2022 2023 2024
Total guests served (thousand) (5)
Eastern China (2) 11,363 17,594 22,016
Guangdong province 9,804 13,184 14,355
Northern China
(3) 8,261 11,469 10,937
Other (4) 8,358 15,675 20,763
Overall 37,786 57,922 68,071
Average spending per guest (RMB) (6)
Eastern China (2) 62.6 63.0 57.5
Guangdong province 63.5 61.8 53.1
Northern China
(3) 62.7 61.8 57.3
Other (4) 62.8 60.4 56.2
Overall 62.9 61.8 56.2
Table turnover rate (times/day)
(7)
Eastern China (2) 2.71 3.11 2.82
Guangdong province 3.06 3.37 2.93
Northern China
(3) 2.78 3.52 3.38
Other (4) 2.72 3.28 3.04
Overall 2.81 3.30 3.00
SUMMARY
–4–


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Notes:
(1) Representing revenue generated from restaurant operation and delivery service.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Consisting of Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(5) Including dine-in guests and customers who order take-outs for the period in the same region. We count
one delivery order as one guest.
(6) Calculated by dividing revenue generated from restaurant operation and delivery service for the period
by total guests served, including both dine-in customers and customers who order take-outs, for the
period in the same region. For further details on how we calculate total guests served, see note (5).
(7) Calculated by dividing the total dine-in orders served for the period by the sum of products of total
restaurant operation days for the period and table count of each restaurant during the period in the same
region.
The COVID-19 pandemic and the restrictive measures imposed by the Chinese
government in response to the pandemic have been major factors that affected our results of
operations in 2022.
After the Chinese government phased out the “zero-COVID” policy in December 2022,
our results of operation showed a strong recovery in 2023 due to a significant surge in
consumer spending in the first half of 2023 following the COVID-19 pandemic. According to
CIC, the strong performance in the catering industry in the first half of 2023 is primarily due
to such significant surge in spending. In 2023, none of our restaurants suspended operation due
to the COVID-19 pandemic and our customer traffic rebounded. As a result, our table turnover
rate recovered to 3.30 in 2023, which was at similar level as the table turnover rate of 3.34 in
2019 before the COVID-19 pandemic. As our total guests served and table turnover rate
increased in 2023 as compared with that in 2022, we recorded an increase in our revenue from
restaurant operations and delivery service by 50.7% from RMB2,373.6 million in 2022 to
RMB3,577.1 million in 2023.
In 2024, our restaurant performance declined in general as compared to that in 2023,
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment. According to CIC, the industry in general
also showed the same trend. As a result, our overall average spending per guest decreased from
RMB61.8 in 2023 to RMB56.2 in 2024; and our overall table turnover rate also decreased from
3.30 in 2023 to 3.00 in 2024. On the other hand, our overall total guests served increased from
57.9 million in 2023 to 68.1 million in 2024, primarily attributable to the increase in the
number of our restaurants in operation. Meanwhile, our delivery orders increased from 2023
to 2024 as we strategically increased our focus on delivery services in 2024. As a result of the
foregoing, our revenue from restaurant operations and delivery service increased by 6.9% from
RMB3,577.1 million in 2023 to RMB3,822.2 million in 2024.
SUMMARY
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Same Store Sales
The following table sets forth details of our same store sales by location of the restaurants
during the Track Record Period. According to CIC, the calculations of all same store sales data
below are in line with the industry practice.
For the year ended December 31,
2022 2023 2023 2024
Number of same stores (1)
Eastern China (2) 45 61
Guangdong province 44 43
Northern China
(3) 46 45
Other (4) 40 48
Overall 175 197
Same store sales
(in thousands of RMB) (5)
Eastern China (2) 446,473 563,046 676,972 601,465
Guangdong province 447,320 524,034 516,138 451,301
Northern China
(3) 455,595 599,169 571,576 532,779
Other (4) 361,778 473,505 504,633 449,498
Overall 1,711,166 2,159,754 2,269,319 2,035,043
Same store sales
growth (%)
Eastern China (2) 26.1% (11.2%)
Guangdong province 17.1% (12.6%)
Northern China
(3) 31.5% (6.8%)
Other (4) 30.9% (10.9%)
Overall 26.2% (10.3%)
SUMMARY
–6–


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For the year ended December 31,
2022 2023 2023 2024
Average same store sales
per restaurant (in
thousands of RMB)
Eastern China
(2) 9,922 12,512 11,098 9,860
Guangdong province 10,166 11,910 12,003 10,495
Northern China
(3) 9,904 13,025 12,702 11,840
Other (4) 9,044 11,838 10,513 9,365
Overall 9,778 12,341 11,519 10,330
Notes:
(1) Consisting of restaurants that were open for more than 300 days during the years under comparison and
had the same number of tables during the years under comparison.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Consisting of Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(5) Refers to the aggregate revenue generated from restaurant operation and delivery service at our same
stores for the period indicated.
Explanation for changes in same store sales
In 2023, the same store sales in all three key regions increased as compared with that in
2022, as a result of the strong recovery of our customer traffic due to a significant surge in
consumer spending in the first half of 2023 following the easing of government-imposed
restrictions related to COVID-19 in December 2022. According to CIC, the strong performance
in the catering industry in the first half of 2023 is primarily due to such significant surge in
spending.
In 2024, we recorded decreases in same store sales in all regions. Such decreases were
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment. For example, consumers in general tend
to (i) order dishes that are more affordable, (ii) order fewer dishes when dining out and (iii)
prefer not to dine out unless necessary. Such changes in consumer behavior had led to
decreases in our table turnover rate and average spending per guest in all regions. According
to CIC, we outperformed the majority of our industry peers in terms same store sales growth
in 2024.
SUMMARY
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CHANGES IN U.S. TRADE POLICY
The U.S. government has recently indicated its intent to alter its approach to international
trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral
or multi-lateral trade agreements and treaties with foreign countries, and has made proposals
and taken actions related thereto. The U.S. government has imposed, and it is possible in the
future will further increase, tariffs on certain foreign goods, including from China, such as steel
and aluminum, and the Trump administration has imposed and indicated its intention to impose
additional tariffs on imports of certain products into the United States, including from Canada
and Mexico. Some foreign governments, including China, have instituted retaliatory tariffs on
certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S.
products.
Our business operations do not involve sales and purchases of goods to or from the U.S.
Therefore, our business operations are not directly negatively affected by such change in trade
policy. However, our business and results of operations may be negatively affected if such
changes in U.S. trade policy resulted in deterioration of the Chinese economy, which in turn
may lead to unfavorable changes to consumer behavior. See “Risk Factors – Risks Relating to
Our Industry – Macro-economic factors have had and may continue to have a material and
adverse effect upon our business, financial condition and results of operations.”
IMPACT OF THE COVID-19 OUTBREAK
In 2022, in an effort to control the COVID-19 pandemic, the Chinese government placed
significant restrictions on travel within Mainland China, implemented mandatory quarantine
and closed certain businesses, work places and facilities, and governments outside of Mainland
China have halted or sharply curtailed the movement of people, goods and services to and from
Mainland China.
Due to the regional outbreaks of COVID-19 in various parts of Mainland China in 2022,
we temporarily suspended the operation of a total of 208 restaurants across Mainland China for
one to 145 days in 2022. We have reopened all of these restaurants as of the Latest Practicable
Date. In addition, we also enjoyed rent concession granted by certain landlords due to the
COVID-19 pandemic. In 2022, 2023 and 2024, we recognized income on COVID-19 rent
concessions of RMB10.2 million, nil and nil, respectively. As the impact of the COVID-19 had
subsided, we do not expect the COVID-19 pandemic to have further impact on our operations
in the future. For further information, see “Financial Information – Impact of COVID-19.”
SUMMARY
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PROCUREMENT
Generally, the 2014 based consumption price index (the “ CPI”) (CPI, year of 2014 = 100)
of food remained relatively stable from 2020 to 2024. Among the different food price indices,
the food price index of pork has exhibited a notable decline from 2020 to 2024, primarily
attributable to the increased availability of pork following the recovery from the impact of the
COVID-19 pandemic. Going forward, the food price index in Mainland China is expected to
moderately increase, subject to economic growth and consumption environment, according to
CIC. See “Industry Overview – Cost of Raw Materials, Labor and Commercial Rent” for
further details.
We primarily procure (i) food ingredients, such as vegetables, fruits, semi-processed food
products and bakery products, as well as (ii) decoration materials, equipment and other
supplies used in our restaurants. We have established a procurement team at our headquarters
to implement a centralized purchase system for all purchase orders. We had 395 authorized
suppliers as of December 31, 2024. In each of 2022, 2023 and 2024, the total purchases from
our five largest suppliers in the aggregate accounted for 18.6%, 18.4% and 18.2%, respectively,
of our total purchases, and our purchases from our largest supplier accounted for 5.0%, 5.2%
and 4.5%, respectively, of our total purchases. Please see the section headed “Business –
Procurement” for further details.
STRENGTHS
We attribute our success to and distinguish ourselves by the following key competitive
strengths:
 well-known and fast-growing operator of casual Chinese restaurants in Mainland
China;
 fusion menu offerings and value-for-money experience to attract a broad base of
customers;
 dining environment infused with elements of Chinese traditional art to build our
iconic brand and strong customer traffic;
 highly standardized and scalable business model supported by flexible supply chain
arrangement;
 comprehensive and stringent food and operational safety control;
 digitalized restaurant and operations management; and
 experienced and professional management team with zeal to excel.
SUMMARY
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STRATEGIES
We intend to pursue the following growth strategies:
 strategically expand our restaurant network to deliver sustainable growth;
 drive sales and customer traffic flow by continuing to offer quality and value-for-
money gourmet;
 enhance operating efficiency through supply chain optimization; and
 continuous investment in technology and digital marketing.
COMPETITION LANDSCAPE
According to CIC, total revenue of Chinese cuisine restaurant market in Mainland China
in 2024 reached RMB3,071.5 billion and total revenue of casual Chinese cuisine restaurant
market reached RMB534.7 billion. Casual Chinese cuisine restaurant market is highly
fragmented, with a large number of restaurant brands participating in the market. In 2024, the
five largest brands accounted for approximate 3.9% of the total revenue of casual Chinese
cuisine restaurant market. In 2024, restaurants under our Green Tea brand achieved a total
revenue of RMB3.8 billion and ranked fourth with a market share of 0.7% in the casual Chinese
cuisine restaurant market in Mainland China. With a total of 465 restaurants at the end of 2024,
we ranked third in terms of number of restaurants among casual Chinese cuisine restaurant
brands in Mainland China. See the section headed “Industry Overview” for further details.
RISK FACTORS
Our business and the Global Offering involve certain risks, many of which are beyond of
our control. Detailed discussions on all the risk factors involved are set forth in “Risk Factors”
and you should read the entire section carefully before you decide to invest in the Global
Offering. Some of the major risks we face include:
 Our future growth depends on our ability to open and profitably operate in existing
and new geographical markets.
 We may not be able to maintain and increase the sales and profitability of our
existing restaurants.
 If we cannot obtain desirable restaurant locations or secure renewal of existing
leases on commercially reasonable terms, our business, results of operations and
ability to implement our growth strategy may be materially and adversely affected.
 If the quality of our dining experience declines, our restaurants may not continue to
be successful.
SUMMARY
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 Our business depends significantly on the market recognition of our Green Tea
brand, and if we are not able to maintain or enhance our brand recognition, our
business, financial condition and results of operations may be materially and
adversely affected.
 Our current restaurant locations may become unattractive, which may have a
material and adverse effect on our business, financial condition and results of
operations.
SUMMARY OF FINANCIAL INFORMATION
The summary historical data of financial information set forth below has been derived
from, and should be read in conjunction with, our consolidated audited financial statements,
including the accompanying notes, set forth in the Accountants’ Report set out in Appendix I
to this prospectus, as well as the information set forth in “Financial Information” of this
prospectus. Our financial information was prepared in accordance with IFRS.
Summary of Consolidated Statements of Profit or Loss
The following table sets forth summary data from consolidated statements of profit or loss
for the period indicated. Each item is presented in absolute amount and as a percentage of our
revenue.
Y ear Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Revenue 2,375,453 100.0 3,589,178 100.0 3,838,202 100.0
Other revenue 31,081 1.3 39,195 1.1 31,957 0.8
Raw materials and
consumables used (862,316) (36.3) (1,205,219) (33.6) (1,192,902) (31.1)
Staff costs (626,397) (26.4) (911,028) (25.4) (989,008) (25.8)
Depreciation of right-of-use
assets (161,048) (6.8) (177,036) (4.9) (202,868) (5.3)
Other rentals and related
expenses (56,611) (2.4) (80,294) (2.2) (76,064) (2.0)
Depreciation and
amortization of other
assets (163,641) (6.9) (192,947) (5.4) (217,875) (5.7)
Utilities expenses (90,049) (3.8) (123,562) (3.5) (141,251) (3.7)
Delivery service expenses (61,187) (2.6) (82,788) (2.3) (120,972) (3.1)
Other expenses (308,980) (13.0) (420,950) (11.7) (467,408) (12.1)
Other net income/(losses) 8,413 0.4 (3,919) (0.1) 2,153 0.1
Financial costs (41,541) (1.7) (42,657) (1.2) (45,309) (1.2)
SUMMARY
–1 1–


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Y ear Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Profit before taxation 43,177 1.8 387,973 10.8 418,655 10.9
Income tax (26,598) (1.1) (92,430) (2.6) (68,488) (1.8)
Profit for the year 113,856 0.7 295,543 8.2 350,167 9.1
Attributable to:
Equity shareholders of
the Company 16,579 0.7 295,543 8.2 350,167 9.1
Non-controlling interests – – – – 0.0 0.0
Profit for the year 16,579 0.7 295,543 8.2 350,167 9.1
Non-IFRS Measures
To supplement our consolidated statements of profit or loss, which are presented in
accordance with IFRS, we also use adjusted net profit (non-IFRS measure) and adjusted net
profit margin (non-IFRS measure) as additional financial measures. The presentation of
adjusted net profit (non-IFRS measure) and adjusted net profit margin (non-IFRS measure)
facilitates comparisons of operating performance from period to period by eliminating
potential impacts of certain items described below. Equity-settled share-based payment
expenses are non-cash expenses arising from the RSU Scheme. Listing expenses are related to
the Global Offering. The use of the non-IFRS measures has limitations as analytical tools, and
you should not consider it in isolation from, or as substitute for analysis of, our results of
operations or financial condition as reported under IFRS. For further details, see “Financial
Information – Principal Income Statement Components – Non-IFRS Measures.”
SUMMARY
–1 2–


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Adjusted net profit (non-IFRS measure) and adjusted net profit margin (non-IFRS
measure)
We define adjusted net profit (non-IFRS measure) as profit for the year adjusted by
excluding (i) equity-settled share-based payment expenses, (ii) listing expenses, and (iii)
impact on tax related to items (i) to (ii) above. The following table illustrates reconciliations
to our adjusted net profit (non-IFRS measure) from our profit for the periods indicated:
For the year ended December 31,
2022 2023 2024
(RMB in thousands)
Profit for the year 16,579 295,543 350,167
Equity-settled share-based payment
expenses (779) 844 5,447
Listing expenses 11,210 8,547 6,312
Impact on tax (1,794) (1,637) (1,060)
Adjusted net profit (non-IFRS
measure) 25,216 303,297 360,866
The following table sets forth our adjusted net profit margin (non-IFRS measure) for the
periods indicated:
For the year ended December 31,
2022 2023 2024
Adjusted net profit margin (%)
(non-IFRS measure) 1.1 8.5 9.4
(1) Adjusted net profit margin (non-IFRS measure) is calculated by dividing adjusted net profit (non-IFRS
measure) by revenue for the year.
Due to the resurgence of the COVID-19 outbreaks and the relevant restrictive measures
imposed by the relevant government authorities in 2022, our profit for the year decreased to
RMB16.6 million in 2022. Our profit for the year increased to RMB295.5 million in 2023,
primarily attributable to (i) the robust rebound of the performance of our restaurants and (ii)
a decrease in our raw materials and consumables used as a percentage of our revenue in 2023,
primarily due to (x) our effort in increasing direct procurement of raw materials from suppliers
to enjoy more favorable procurement prices and (y) decreases in the market price for certain
food ingredients such as pork. Our profit for the year increased to RMB350.2 million in 2024,
primarily due to (i) an increase in our revenue primarily attributable to our restaurant
expansion and (ii) a decrease in our raw materials and consumables used as a percentage of our
SUMMARY
–1 3–


--- page 22 ---
revenue in 2024, primarily due to (x) our increasing bargaining power with suppliers to obtain
raw materials at a more favorable price as we continued to streamline our menu offerings and
(y) our continuous effort in finding suppliers that provide quality ingredients at a lower cost.
In addition, we recognized income on COVID-19 rent concessions of RMB10.2 million, nil and
nil in 2022, 2023 and 2024, respectively.
Summary of Financial Position
The following table sets forth summary data from our consolidated statements of financial
positions as of December 31, 2022, 2023 and 2024.
As of December 31,
2022 2023 2024
(RMB in thousands)
Non-current assets 1,339,759 1,543,955 1,791,283
Current assets 473,922 877,049 673,062
Current liabilities (562,180) (1,177,690) (738,004)
Net current liabilities (88,258) (300,641) (64,942)
Non-current liabilities (783,460) (828,803) (955,208)
Net assets 468,041 414,511 771,133
We recorded net current liabilities as of December 31, 2022, 2023 and 2024, mainly
because we utilized significant portions of cash generated from our operations to expand our
restaurant network and pay dividends. As a result, we recorded significant amounts of (i) lease
liabilities in accordance with IFRS 16 and (ii) trade and other payables in relation to renovation
costs, purchases of food ingredients and recruitment and employee expenses. In particular, the
current portion of lease liabilities amounted to RMB181.9 million, RMB214.3 million and
RMB256.7 million as of December 31, 2022, 2023 and 2024, respectively.
We believe that our net current liabilities position will be improved with net cash inflows
generated from operating activities once the newly opened restaurants begin to make profit and
from the net proceeds from the Global Offering. In addition, we will also continue to improve
our net current liabilities position by leveraging centralized procurement through our direct
procurement center to control costs, as well as the improved economies of scale as our
restaurant network continues to grow. We also expect to take advantage of our strong brand
recognition to continue negotiating with landlords for more favorable lease terms in lower tier
cities in the future to control our costs. As of March 31, 2025, we recorded net current assets
of RMB21.1 million.
SUMMARY
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--- page 23 ---
Furthermore, we will continue to closely monitor our liquidity position to ensure that it
is in line with our business operations and expansion needs. We will also manage the level of
our cash and liquid assets to ensure the availability of sufficient cash flows to meet any planned
or unexpected cash requirements arising from our operations. We will continue to assess the
availability of resources for financing our business needs on an ongoing basis.
Taking into consideration the financial resources presently available to us, including cash
on hand and cash at banks, the available banking facilities, expected cash generated from our
operations and the estimated net proceeds from the Global Offering, our Directors are of the
view that we have sufficient working capital for our present working capital requirements for
at least the next 12 months from the date of this prospectus. As such, we believe that our
business operation and financial condition will not be materially and adversely affected by our
historical net current liabilities position.
We recorded net assets as of December 31, 2022, 2023 and 2024. Our net assets decreased
from RMB468.0 million as of December 31, 2022 to RMB414.5 million as of December 31,
2023, primarily due to the dividend we declared to our then Shareholders in May 2023 and was
settled in June 2024. Our net assets increased from RMB414.5 million as of December 31, 2023
to RMB771.1 million as of December 31, 2024, primarily due to our profit for the year
recognized in 2024 of RMB350.2 million.
Summary of Consolidated Cash Flow Statements
The following table sets forth summary data from our consolidated statement of cash
flows for the period indicated.
Y ear Ended December 31,
2022 2023 2024
(RMB in thousands)
Net cash generated from operating
activities 347,612 793,239 733,964
Net cash used in investing activities (215,843) (380,434) (247,787)
Net cash used in financing activities (127,866) (190,797) (595,484)
Net increase/(decrease) in cash and cash
equivalents 3,903 222,008 (109,307)
Effect of foreign exchange rate changes (711) (129) 170
Cash and cash equivalents at the
beginning of the year 131,218 134,410 356,289
Cash and cash equivalents at the end of
the year 134,410 356,289 247,152
SUMMARY
–1 5–


--- page 24 ---
We plan to improve our cash flows by using the net proceeds from the Global Offering
to support our strategic initiatives, including the plan to expand our restaurant network. We
also expect that as newly opened restaurants achieve breakeven, such restaurants will generate
operating cash inflows and contribute to our cash balance. In addition, our unutilized banking
facilities amounted to RMB600.0 million as of the Latest Practicable Date, and we may draw
down from such facilities if such measure is necessary to improve our liquidity.
Key Financial Ratios
The following table sets forth the key financial ratios as of the dates indicated:
As of December 31,
2022 2023 2024
Current ratio 0.84 0.74 0.91
Quick ratio 0.74 0.69 0.82
Gearing ratio 6.6% 12.1% –
For details, see “Financial Information – Key Financial Ratios.”
Lease Profile
The following table sets forth the lease profile of the restaurants in our restaurant network
that are in operation as of the Latest Practicable Date:
Lease term
Number of
restaurants Total GFA Average GFA
Average breakeven
period for restaurants
opened during the
Track Record Period
and are in operation
as of the Latest
Practicable Date (4)
(#) (square meter) (square meter) (months)
Eastern China (1) One year or less 2 802 401 1.6
Two years – – –
Three to five years 3 980 327
Six to 10 years 116 42,324 365
11 to 15 years 42 18,704 445
16 to 20 years 6 4,226 704
21 to 31 years 2 968 484
SUMMARY
–1 6–


--- page 25 ---
Lease term
Number of
restaurants Total GFA Average GFA
Average breakeven
period for restaurants
opened during the
Track Record Period
and are in operation
as of the Latest
Practicable Date (4)
(#) (square meter) (square meter) (months)
Guangdong
province
One year or less – – – 1.7
Two years 2 762 381
Three to five years 5 2,310 462
Six to 10 years 58 26,659 460
11 to 15 years 20 12,184 609
16 to 20 years – – –
21 to 31 years – – –
Northern
China
(2)
One year or less 2 1,460 730 1.8
Two years 3 2,298 766
Three to five years 6 2,725 454
Six to 10 years 36 15,621 434
11 to 15 years 13 7,018 540
16 to 20 years 1 498 498
21 to 31 years – – –
Other
(3) One year and less – – – 1.6
Two years – – –
Three to five years 8 2,251 281
Six to 10 years 143 54,181 379
11 to 15 years 24 11,198 467
16 to 20 years 1 800 800
21 to 31 years – – –
Overall 493 207,971 422 1.6
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(4) We did not include the only higher-end restaurant in our restaurant network that generally has higher
average spending per guest of above RMB500 when analyzing the average breakeven period.
SUMMARY
–1 7–


--- page 26 ---
OUR CONTROLLING SHAREHOLDERS
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised), Mr. Wang, his wholly-owned holding company Yielding
Sky, Ms. Lu, her wholly-owned holding company Contemporary Global Investments and Time
Sonic, which is controlled by Mr. Wang and Ms. Lu as it is owned as to (i) 99.9% by Absolute
Smart V entures, which is in turn wholly owned by East Superstar, both the holding vehicles
used by Vistra Trust, the trustee of Green Tea Family Trust that is a discretionary trust
established by Mr. Wang and Ms. Lu as the settlors and their respective wholly-owned holding
company Yielding Sky and Contemporary Global Investments as the beneficiaries; (ii) 0.049%
by Yielding Sky, which is wholly owned by Mr. Wang; and (iii) 0.051% by Contemporary
Global Investments, which is wholly owned by Ms. Lu, will be entitled to exercise voting
rights of approximately 54.29% of the issued share capital of our Company. Accordingly, Mr.
Wang, Yielding Sky, Ms. Lu, Contemporary Global Investments, Time Sonic, Absolute Smart
V entures, East Superstar and Vistra Trust are a group of controlling shareholders after the
Listing. Please refer to the section headed “Relationship with our Controlling Shareholders”
for further details.
STRATEGIC INVESTOR AND SELLING SHAREHOLDER
Our strategic investor and Selling Shareholder, Partners Gourmet, an investment vehicle
and independent third party save for its interests in our Company, held Shares representing
approximately 28.2% of our total issued share capital as of the Latest Practicable Date. Upon
completion of the Global Offering (assuming the Over-allotment Option is not exercised),
Partners Gourmet will hold approximately 15.76% of the issued share capital of our Company.
Please refer to the section headed “History, Reorganization and Corporate Structure – Strategic
Investment” for further details.
Partners Gourmet will sell 50,509,200 Sale Shares, representing approximately 7.50% of
the total issued share capital of our Company immediately upon completion of the Global
Offering (assuming that the Over-allotment Option is not exercised). Please refer to the section
headed “Appendix IV – Statutory and General Information – 13. Particulars of the Selling
Shareholder” for more details.
We will not receive any of the proceeds from the sale of the Sale Shares by the Selling
Shareholder. We estimate that the Selling Shareholder will receive net proceeds of
approximately HK$349 million from the sale of the Sale Shares, based on the Offer Price of
HK$7.19 per Share (assuming the Over-allotment Option is not exercised), and after deducting
the underwriting fees and commissions payable by the Selling Shareholder.
SUMMARY
–1 8–


--- page 27 ---
RSU SCHEME
We have adopted the RSU Scheme in order to motivate and retain skilled and experienced
personnel to strive for the future development and expansion of the Group by providing them
with the opportunity to own equity interests of the Company. Upon completion of the Global
Offering, the RSU Trustee will hold, on trust for the benefit of grantees and eligible
participants pursuant to the RSU Scheme, 33,350,000 Shares for the RSU Scheme, representing
approximately 4.95% of the total issued share capital of our Company. As of the Latest
Practicable Date, RSUs in respect of an aggregate of 31,922,924 Shares, representing
approximately 4.75% of the total issued share capital of our Company immediately following
the completion of the Global Offering (without taking into account any Shares which may be
issued pursuant to the exercise of the Over-allotment Option), were granted to 71 employees
of our Group pursuant to the RSU Scheme. The principal terms of the RSU Scheme are
summarized in the section headed “Appendix IV – Statutory and General Information – D.
Share Incentive Scheme”.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We are applying for the Listing under Rule 8.05(1) of the Listing Rules and satisfy the
profit test, among other things, with reference to (i) our profit attributable to our equity
shareholders for the two financial years ended December 31, 2023, in aggregate, being
approximately RMB312.1 million which is over HK$45.0 million required by Rule 8.05(1) of
the Listing Rules; and (ii) our profit attributable to our equity shareholders for the financial
year ended December 31, 2024, being approximately RMB350.2 million, which is over
HK$35.0 million as required by Rule 8.05(1) of the Listing Rules.
LISTING EXPENSES
Listing expenses to be borne by us are estimated to be approximately HK$101.6 million
(including underwriting fees and commission for both the Hong Kong Offer Shares and the
International Offer Shares), representing 12.0% of our estimated gross proceeds of HK$847.4
million from the Global Offering, based on an Offer Price of HK$7.19 per Offer Share and
assuming the Over-allotment Option is not exercised. The estimated listing expenses consist of
(i) underwriting-related expenses (including but not limited to underwriting fees and
commissions for both the Hong Kong Offer Shares and the International Offer Shares) of
HK$36.3 million, (ii) fees and expenses of legal advisers and accountants of HK$48.8 million
and (iii) other fees and expenses of HK$16.5 million. Until December 31, 2024, we incurred
listing expenses of RMB56.4 million (equivalent to HK$60.6 million), of which RMB43.9
million (equivalent to HK$47.2 million) were charged to our consolidated statements of profit
or loss and RMB12.5 million (equivalent to HK$13.4 million) were recognized as prepayment
(which will be deducted from equity upon the Listing). After December 31, 2024,
approximately HK$16.9 million is expected to be charged to our consolidated statements of
profit or loss, and approximately HK$24.1 million is expected to be accounted for as a
deduction from equity upon the Listing. The listing expenses above are the latest practicable
estimate for reference only, and the actual amount may differ from this estimate.
SUMMARY
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--- page 28 ---
The Selling Shareholder is responsible for the underwriting commission of 3%, and a
discretionary incentive fee of up to 1%, plus the brokerage, trading fees and Transaction
Levies, of the aggregate Offer Price of the Sale Shares, translating to an aggregate amount of
approximately HK$14.6 million (based on an Offer Price of HK$7.19, and assuming the
Over-allotment Option is not exercised). Such underwriting commission and incentive fee are
not included in the listing expenses of the Group.
GLOBAL OFFERING STATISTICS
Based on an Offer
Price of HK$7.19
per Share
Our Company’s market capitalization upon completion of the
Global Offering
(1) HK$4,842.1 million
Unaudited pro forma adjusted consolidated net tangible assets per
Share (2) HK$2.40
Notes:
(1) The calculation of the market capitalization is based on 673,454,800 Shares expected to be in issue
immediately upon completion of the Global Offering (assuming the Over-allotment Option is not exercised).
(2) The unaudited pro forma adjusted consolidated net tangible asset value per Share has been arrived at after
adjustments referred to in the section headed “Unaudited Pro Forma Financial Information” in Appendix II and
on the basis of 673,454,800 Shares in issue at an Offer Price of HK$7.19, assuming that the Shares issued
pursuant to the Global Offering were issued on December 31, 2024 (assuming the Over-allotment Option is
not exercised). No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible
assets attributable to equity shareholders of the Company to reflect any trading results or other transaction
entered into subsequent to December 31, 2024. The Company intends to declare and distribute by December
2025 a special dividend (the “ Special Dividend ”) in an amount of no less than RMB180 million to its
shareholders (including its new shareholders after the listing of the Company’s shares on the Stock Exchange)
based on its distributable retained profits from the subsidiaries as of December 31, 2024 and share premium,
upon the declaration of the Special Dividend. The Company will hold a general meeting after the Listing to
approve the declaration of the Special Dividend and will make announcements in due course in respect of the
declaration and payment of the Special Dividend. The Controlling Shareholders (including entities controlled
by them) have undertaken to vote in favor of the shareholders’ resolution for the declaration and payment of
such Special Dividend. This effect has not been adjusted in the unaudited pro forma adjusted consolidated net
tangible assets of the Group attributable to equity shareholders of the Company.
SUMMARY
–2 0–


--- page 29 ---
FUTURE PLAN AND USE OF PROCEEDS
We estimate the net proceeds of the Global Offering which we will receive, based on an
Offer Price of HK$7.19 per Offer Share, will be approximately HK$745.7 million, after
deduction of underwriting fees and commissions and estimated expenses payable by us in
connection with the Global Offering and assuming the Over-allotment Option is not exercised.
We intend to use the net proceeds of the Global Offering for the following purposes:
Amount
Approximate
% of Total
Estimated Net
Proceeds Intended Use
HK$471.9 million 63.3% Expansion of our restaurant network
HK$196.3 million 26.3% Establishment of our centralized food
processing facility
HK$40.3 million 5.4% Upgrade our IT system and related
infrastructure
HK$37.3 million 5.0% Provide funding for our working capital and
other general corporate purposes
We will not receive any of the proceeds from the sale of the Sale Shares by the Selling
Shareholder in the Global Offering.
DIVIDENDS
We do not have any pre-determined dividend pay-out ratio. The amount of dividends
actually distributed to our Shareholders will depend upon our earnings and financial condition,
operating requirements, capital requirements and any other conditions that our Directors may
deem relevant and will be subject to approval of our Shareholders. Our Board has the absolute
discretion to recommend any dividend. Our Board did not declare any dividend to our
Shareholders in 2022, primarily due to concerns of cash preservation for the potential needs in
relation to the COVID-19 pandemic. Considering the ease of the COVID-19 pandemic since
the first quarter of 2023, the robust rebound of our results of operations and the balance of our
net current assets, our Board believes it would be beneficial to distribute dividends to our
existing Shareholders. Therefore, in May 2023, the Board declared a dividend of RMB350.0
million to our then Shareholders, namely Time Sonic, Partners Gourmet and Longjing Memory
Limited in respect of our distributable retained profits of our PRC subsidiaries as of
December 31, 2022. We had settled such dividend with the cash available at hand in June 2024.
In addition, we intend to declare and distribute by December 2025 a special dividend (the
“Special Dividend ”) in an amount of no less than RMB180 million to our Shareholders
SUMMARY
–2 1–


--- page 30 ---
(including our new Shareholders after the Listing) based on our distributable retained profits
from our subsidiaries as of December 31, 2024 and share premium, upon the declaration of the
Special Dividend. We will hold a general meeting after the Listing to approve the declaration
of the Special Dividend and will make announcements in due course in respect of the
declaration and payment of the Special Dividend. The Controlling Shareholders have
undertaken to vote in favor of the Shareholders’ resolution for the declaration and payment of
such Special Dividend. Dividends declared in the past are not indicative of our future dividend
policy. See “Financial Information – Dividends.”
HISTORICAL NON-COMPLIANCES
We had certain non-compliance incidents relating to social insurance and housing
provident fund. See “Business – Compliance, Licenses and Permits.”
RECENT DEVELOPMENTS
Set forth below are certain material developments on our business and results of
operations after December 31, 2024, which is the end of the Track Record Period:
 We opened 32 restaurants from January 1, 2025 to the Latest Practicable Date,
including 18 in Eastern China, four in Guangdong province, three in Northern China
and seven in other regions (including two restaurants in Hong Kong SAR).
 As of the Latest Practicable Date, among the 26 restaurants that recorded restaurant
level operating loss in 2024, (i) 14 restaurants had recorded first monthly restaurant
level operating profit, and (ii) 12 restaurants had not recorded restaurant level
operating profit, of which five restaurants had limited time of operation during the
period and seven restaurants had unsatisfactory operating performance. These seven
restaurants had unsatisfactory operating performance primarily due to insufficient
customer traffic of the shopping malls where those relevant restaurants located.
We expect to incur listing expenses of RMB38.1 million (HK$41.0 million) after
December 31, 2024 (based on an Offer Price of HK$7.19 per Share and assuming the
Over-allotment Option is not exercised), of which RMB15.7 million (HK$16.9 million) are
expected to be recognized as listing expenses in the statement of profit or loss in 2025, and
RMB22.4 million (HK$24.1 million) is expected to be recognized as a deduction in equity
directly.
After due and careful consideration, our Directors confirm that, up to the date of this
prospectus, there has been no material adverse change in our finance and trading position or
prospects since December 31, 2024, and there is no event since December 31, 2024 which
would materially affect the information shown in the Accountants’ Report, the text of which is
set out in Appendix I to this prospectus.
SUMMARY
–2 2–


--- page 31 ---
Recent Regulatory Developments
Cybersecurity Review Measures
Cybersecurity Review Measures (2021) (ج2021) ) was promulgated
by the Cyberspace Administration of China (the “ CAC”) on December 28, 2021 and became
effective on February 15, 2022 (the “ Cybersecurity Review Measures ”). For details, please
see “Regulatory Overview – Cyber Security Law.”
On September 24, 2024, the State Council promulgated the Regulations on the
Administration of Cyber Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “ Data Security
Regulations ”), which took effect on January 1, 2025. For details, please see “Regulatory
Overview – Cyber Security Law.”
Our PRC Legal Adviser and the Joint Sponsors’ PRC legal adviser made a telephone
consultation on a named basis with the China Cybersecurity Review, Certification and Market
Regulation Big Data Center (the “ CCRC ”) which is the competent authority entrusted by the
CAC to set up cybersecurity review consultation hotline. The CCRC confirmed that the term
“listing in a foreign country” under the Cybersecurity Review Measures (2021) does not apply
to listings in Hong Kong, and thus the obligation to proactively apply for cybersecurity review
by an entity seeking listing in a foreign country shall not be applicable to the proposed Listing.
Potential Impact of the Cybersecurity Review Measures and Data Security Regulations
Based on the above and as advised by our PRC Legal Adviser, the Cybersecurity Review
Measures and the Data Security Regulations would not have a material adverse impact on our
business or our Listing. Based on our PRC Legal Adviser’s advice, as of the Latest Practicable
Date, considering each circumstance set forth in Article 10 of the Cybersecurity Review
Measures and we are not recognized as CIIO by any competent authority nor we are subject
to any cybersecurity review, the likelihood of our operation and Listing in Hong Kong SAR to
be recognized as having the effect on or may affect national security is low under the Article
10 of the Cybersecurity Review Measures.
Having considered the above and on the basis that the Joint Sponsors have (i) obtained
and reviewed relevant documents, internal policies and information provided by the Company
and its PRC legal adviser in relation to the Group’s privacy protection, cybersecurity and data
processing activities; (ii) discussed with the Company in relation to, among others, the
development and impact of the Cybersecurity Review Measures and the Data Security
Regulations on the Group; and (iii) discussed with the PRC legal advisers to the Company and
the Joint Sponsors to understand the relevant PRC laws, rules and regulations and implications
of recent regulatory environment on cybersecurity in the PRC on the Group, nothing has come
to the Joint Sponsors’ attention to disagree with the views of the Company and its PRC legal
advisers in this regard as disclosed above.
SUMMARY
–2 3–


--- page 32 ---
Regulations Relating to Overseas Securities Offering and Listing
On February 17, 2023, the CSRC released the Trial Administrative Measures of the
Overseas Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձ
) (the “ Overseas Listing Trial Measures ”), which became effective on
March 31, 2023 and stipulates that domestic companies that seek to offer or list securities
overseas, both directly and indirectly, shall complete the filing procedures and report relevant
information to the CSRC. On March 28, 2025, the CSRC issued a notification on our
Company’s completion of the PRC filing procedures for the listing of our Shares on the Stock
Exchange and the Global Offering. As advised by our PRC Legal Adviser, our Company has
completed all necessary filings with the CSRC in the PRC in relation to the Global Offering
and the Listing.
If there is any material events in the future, such as change of control, investigation or
punishment taken by overseas securities regulatory authorities or other competent authorities,
change of listing status or listing plate, or voluntary or forced delisting, we will file the
subsequent reports with the CSRC accordingly.
Updates on Financial Information
Our Directors confirm that, as of the date of this Prospectus, there has been no material
adverse change in our financial or trading position, indebtedness, mortgage, contingent
liabilities, guarantees or prospects since December 31, 2024, the end of the period reported in
the Accountant’s Report included in Appendix I to this Prospectus.
SUMMARY
–2 4–


--- page 33 ---
In this prospectus, unless the context otherwise requires, the following terms shall
have the meanings set out below.
“Absolute Smart V entures” Absolute Smart V entures Limited, a limited liability
company incorporated in the BVI on November 26, 2018,
which is wholly-owned by East Superstar
“AFRC” the Accounting and Financial Reporting Council
“Articles” or “Articles of
Association”
the second amended and restated articles of association of
our Company (as amended from time to time),
conditionally adopted on April 30, 2025 with effect from
the Listing Date, a summary of which is set out in
Appendix III to this prospectus
“Board” or “Board of Directors” the board of directors of our Company
“business day” any day (other than a Saturday, Sunday or public holiday)
on which banks in Hong Kong SAR are generally open
for business
“BVI” the British Virgin Islands
“Capital Market Intermediaries” the capital market intermediaries as named in the section
headed “Directors and Parties Involved in the Global
Offering” of this prospectus
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“CIC” China Insights Consultancy Limited, the industry
consultant to our Company
“CIC Report” or “Industry
Report”
the independent industry report issued by CIC
“Companies Act” the Companies Act (as amended) of the Cayman Islands
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended or supplemented from time to
time
DEFINITIONS
–2 5–


--- page 34 ---
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong), as amended or supplemented from time to time
“Company” or “our Company” Green Tea Group Limited (ʮ̡) (formerly
known as Affluent Fine Limited), an exempted company
incorporated in the Cayman Islands with limited liability
on June 4, 2015, and, except where the context otherwise
requires, all of our subsidiaries, or where the context
refers to the time before we became the holding company
of our present subsidiaries, our present subsidiaries
“Contemporary Global
Investments”
Contemporary Global Investments Limited, a limited
liability company incorporated in the Republic of
Seychelles on June 22, 2015, which is wholly owned by
Ms. Lu, one of our Controlling Shareholders
“Controlling Shareholders” has the meaning ascribed to it in the Listing Rules and
unless the context requires otherwise, refers to the group
of controlling shareholders of our Company, namely Mr.
Wang, Yielding Sky, Ms. Lu, Contemporary Global
Investments, Time Sonic, Absolute Smart V entures, East
Superstar and Vistra Trust, and a Controlling Shareholder
shall mean each or any one of them
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Deed of Indemnity” the deed of indemnity dated May 1, 2025 and entered into
by Mr. Wang and Ms. Lu, each a Controlling Shareholder,
in favor of our Company (for itself and as trustee for its
subsidiaries), further information of which is set out in
the section headed “Statutory and General Information –
E. Other Information – 1. Estate duty, tax and other
indemnities” in Appendix IV to this prospectus
“Director(s)” the director(s) of our Company
“East Superstar” East Superstar Limited, a BVI business company
incorporated in the BVI on November 26, 2018, which is
wholly owned by Vistra Trust (Hong Kong) Limited, the
trustee of the Green Tea Family Trust
DEFINITIONS
–2 6–


--- page 35 ---
“Eastern China” consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi
and Fujian
“EIT” enterprise income tax
“EIT Law” the PRC Enterprise Income Tax Law
“Extreme Conditions” the occurrence of “extreme conditions” as announced by
any government authority of Hong Kong SAR due to
serious disruption of public transport services, extensive
flooding, major landslides, large-scale power outage or
any other adverse conditions before Typhoon Signal No.
8 or above is replaced with Typhoon Signal No. 3 or
below
“FINI” “Fast Interface for New Issuance,” an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for all new listings
“Flourish Thrive Limited” Flourish Thrive Limited, a limited liability company
incorporated under the laws of Seychelles on June 11,
2015 and was wholly owned by our Company prior to the
Reorganization
“GDP” Gross Domestic Product
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Green Tea WFOE” Shenzhen Qianhai Green Tea Investment Consultancy
Company Limited (ʮ̡), a
limited company established under the laws of the PRC
on December 23, 2015
“Green Tea Family Trust” the discretionary trust established by Mr. Wang and Ms.
Lu as the settlors, with Vistra Trust as the trustee, details
of which are set out in the section headed “History,
Reorganization and Corporate Structure”
DEFINITIONS
–2 7–


--- page 36 ---
“Group”, “our Group”, “we”,
“our” 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 our present subsidiaries,
the business operated by such subsidiaries or their
predecessors (as the case may be)
“Guandongzao WFOE” Shenzhen Qianhai Guandongzao Investment Consultancy
Company Limited (ʮ̡),
a limited company established under the laws of the PRC
on December 23, 2015
“Guide” the Guide for New Listing Applicants published by the
Stock Exchange, as amended or supplemented from time
to time
“Hangzhou Dinghuan” Hangzhou Dinghuan Investment Management Company
Limited (ʮ̡), a limited liability
company established in the PRC on March 27, 2017 and
an indirect wholly-owned subsidiary of our Company
“Hangzhou Greentea” Hangzhou Greentea Catering Management Co., Ltd. (؄
ʮ̡), a limited liability company
established in the PRC on February 21, 2008 and an
indirect wholly-owned subsidiary of our Company since
December 25, 2024
“HK$” or “Hong Kong dollars”
or “HK dollars” or “cents”
Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong SAR
“HK August Fountain” HongKong August Fountain Group Limited (ණ
ʮ̡), a limited company incorporated under the
laws of Hong Kong SAR on August 21, 2015, and an
indirect wholly-owned subsidiary of our Company
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name through the designated
website www.hkeipo.hk
“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
DEFINITIONS
–2 8–


--- page 37 ---
“HK Green Tea Group” HongKong Greentea Group Limited (ࠢ
ʮ̡), a limited company incorporated under the laws of
Hong Kong SAR on August 21, 2015, and an indirect
wholly-owned subsidiary of our Company
“HK Guan Dong Zao” HongKong Guan Dong Zao Group Limited (ி
ʮ̡), a limited company incorporated under
the laws of Hong Kong SAR on August 21, 2015, and an
indirect wholly-owned subsidiary of our Company
“HKSCC” Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the Operational Procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“HKSCC Rules” the General Rules of HKSCC and as may be amended or
modified from time to time and where the context so
permits, shall include the Operational Procedures of
HKSCC
“Hong Kong” or “Hong Kong
SAR”
the Hong Kong Special Administrative Region of the
PRC
“Hong Kong Offer Shares” the 16,836,400 Shares being initially offered for
subscription in the Hong Kong Public Offering (subject
to reallocation as described in the section headed
“Structure and Conditions of the Global Offering” in this
prospectus)
DEFINITIONS
–2 9–


--- page 38 ---
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong SAR at the Offer Price on the
terms and conditions described in this prospectus
“Hong Kong Share Registrar” Tricor Investor Services Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed
in the section headed “Underwriting – Hong Kong
Underwriters” in this prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated May 7, 2025, relating
to the Hong Kong Public Offering and entered into by,
among others, the Joint Sponsors, the Sponsor-Overall
Coordinators, the Joint Global Coordinators, the Hong
Kong Underwriters, the Selling Shareholder and our
Company as further described in the section headed
“Underwriting – Underwriting Arrangements and
Expenses” in this prospectus
“Hongquan WFOE” Shenzhen Qianhai Hongquan Investment Consultancy
Company Limited (ʮ̡), a
limited company established under the laws of the PRC
on December 23, 2015
“IFRS” IFRS Accounting Standards issued by the International
Accounting Standards Board
“independent third party(ies)” person(s) or company(ies) and their respective ultimate
beneficial owner(s), who/which, to the best of our
Directors’ knowledge, information and belief, having
made all reasonable enquiries, is/are third party(ies)
independent of our Company and our connected persons
as defined under the Listing Rules
“International Offer Shares” the 151,527,600 Shares comprising 101,018,400 New
Shares and 50,509,200 Sale Shares, being initially
offered in the International Offering together with, where
relevant, any additional Shares which may be issued by
our Selling Shareholder pursuant to the exercise of the
Over-allotment Option, subject to adjustments as
described in the section headed “Structure and
Conditions of the Global Offering” in this prospectus
DEFINITIONS
–3 0–


--- page 39 ---
“International Offering” the offer of the International Offer Shares by the
International Underwriters at the Offer Price outside the
United States in offshore transactions in accordance with
Regulation S, as further described in “Structure and
Conditions of the Global Offering” in this prospectus
“International Underwriters” the group of underwriters, led by the Joint Global
Coordinators, that are expected to enter into the
International Underwriting Agreement to underwrite the
International Offering
“International Underwriting
Agreement”
the international underwriting agreement relating to the
International Offering, which is expected to be entered
into by, among others, the Joint Sponsors, the Sponsor-
Overall Coordinators, the Joint Global Coordinators, the
International Underwriters, the Selling Shareholder and
our Company on or about May 14, 2025, as further
described in the section headed “Underwriting – The
International Offering” in this prospectus
“Joint Bookrunners” or
“Joint Lead Managers”
the joint bookrunners and the joint lead managers as
named in the section headed “Directors and Parties
Involved in the Global Offering” of this prospectus
“Joint Global Coordinators” and
“Joint Sponsors”
Citigroup Global Markets Asia Limited and CMB
International Capital Limited (in alphabetical order)
“Latest Practicable Date” April 28, 2025, being the latest practicable date prior to
the printing of this prospectus for the purpose of
ascertaining certain information contained in this
prospectus
“Listing” the listing of the Shares on the Main Board of the Stock
Exchange
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or about Friday, May 16,
2025, on which the Shares are listed on the Stock
Exchange and from which dealings in the Shares are
permitted to commence on the Stock Exchange
DEFINITIONS
–3 1–


--- page 40 ---
“Listing Rules” the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended or
supplemented from time to time
“Main Board” the stock market (excluding the option market) operated
by the Stock Exchange which is independent from and
operated in parallel with GEM of the Stock Exchange
“Mainland China” or “the PRC” the People’s Republic of China excluding, for the purpose
of this prospectus, Hong Kong SAR, Macau Special
Administrative Region of the PRC and Taiwan
“Member of the Group” the Company and/or any subsidiary of the Company
“Memorandum” or
“Memorandum of Association”
the second amended and restated memorandum of
association of our Company (as amended from time to
time), adopted on April 30, 2025 with effect from the
Listing Date, a summary of which is set out in Appendix
III to this prospectus
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
“Mr. Wang” Wang Qinsong (ؒchairman of the Board,
executive Director, chief executive officer, the settlor of
the Green Tea Family Trust and one of our founders and
Controlling Shareholders
“Ms. Lu” Lu Changmei (ૠ), non-executive Director, the
settlor of the Green Tea Family Trust and one of our
founders and Controlling Shareholders
“NASDAQ” the NASDAQ Stock Market in the United States
“Ningbo Qingyu” Ningbo Haishu Qingyu Food & Beverage Management
Company Limited (ʮ̡), a
limited liability company established in the PRC on
March 13, 2017 and an indirect wholly-owned subsidiary
of our Company
“New Share(s)” the Share(s) to be offered for subscription by the
Company under the Global Offering
“Northern China” consisting of Beijing, Hebei and Tianjin
DEFINITIONS
–3 2–


--- page 41 ---
“Offer Price” HK$7.19, being the offer price per Offer Share (exclusive
of brokerage of 1.0%, SFC transaction levy of 0.0027%,
Stock Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015%), at which Hong Kong
Offer Shares are to be subscribed and to be determined in
the manner further described in the section headed
“Structure and Conditions of the Global Offering – The
International Offering – Pricing of the Global Offering”
in this prospectus
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares together with, where relevant, any additional
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option
“Overall Coordinators” the overall coordinators as named in the section headed
“Directors and Parties Involved in the Global Offering”
of this prospectus
“Over-allotment Option” the option expected to be granted by each of the
Company and the Selling Shareholder to the International
Underwriters, exercisable by the Sponsor-Overall
Coordinators (for themselves and on behalf of the
International Underwriters) pursuant to the International
Underwriting Agreement, pursuant to which the
Company may be required to issue and allot up to
15,152,400 New Shares, and the Selling Shareholder may
be required to sell up to 10,102,000 Sale Shares,
representing an aggregate of 25,254,400 additional
Shares at the Offer Price, among other things, cover
over-allocations in the International Offering, if any,
further details of which are described in the section
headed “Structure and Conditions of the Global Offering”
in this prospectus
“Partners Gourmet” Partners Group Gourmet House Limited, an exempted
company incorporated under the laws of the Cayman
Islands on December 8, 2016, our strategic investor and
our Selling Shareholder
“Partners Group” Partners Group Holding AG, a global private markets
investment manager listed on the SIX Swiss Exchange
(symbol: PGHN)
DEFINITIONS
–3 3–


--- page 42 ---
“PBOC” People’s Bank of China ( ʕ਷ɛ͏ვБ)
“PRC government” or “State” the central government of the PRC, including all political
subdivisions (including provincial, municipal and other
regional or local government entities) and its organs or,
as the context requires, any of them
“PRC Company Law” the Company Law of the PRC (ج,)
a enacted by the Standing Committee of the Eighth
National People’s Congress on December 29, 1993 and
effective on July 1, 1994, and subsequently amended on
December 25, 1999, August 28, 2004, October 27, 2005,
December 28, 2013 and October 26, 2018, as amended,
supplemented or otherwise modified from time to time
“PRC Legal Adviser” Commerce & Finance Law Offices, the legal adviser to
our Company as the laws of the PRC and PRC
cybersecurity and data compliance matters
“Preferred Shares Conversion” the conversion of preferred shares referred in “Statutory
and General Information – A. Further Information About
our Group – 3. Resolutions in Writing of the Shareholders
of Our Company Passed on April 30, 2025”
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“Regulation S” Regulation S under the U.S. Securities Act
“Reorganization” the corporate reorganization of our Group in preparation
for the Listing as described in “History, Reorganization
and Corporate Structure”
“RMB” Renminbi, the lawful currency of the PRC
“RSU” a restricted share unit awarded to a participant under the
RSU Scheme
DEFINITIONS
–3 4–


--- page 43 ---
“RSU Scheme” the restricted share unit scheme of our Company
approved and adopted by our Board on February 28,
2020, which was further amended and approved on
May 20, 2022 and April 30, 2025 respectively, the
principal terms of which are set out in “Statutory and
General Information – D. Share Incentive Scheme” in
Appendix IV to this prospectus
“SAFE” State Administration of Foreign Exchange of the PRC
(ʕശɛ͏΍ձ਷̮ි၍ଣ҅), the PRC governmental
agency responsible for matters relating to foreign
exchange administration, including local branches, when
applicable
“SAFE Circular No. 37” the Circular on Relevant Issues concerning Foreign
Exchange Administration of Overseas Investment and
Financing and Round-trip Investments by Domestic
Residents through Special Purpose V ehicles (̮ි
ڏ
) promulgated by
SAFE with effect from July 4, 2014
“Sale Shares” the Share(s) to be offered for sale by the Selling
Shareholder under the Global Offering
“Sanquan F&B” Sanquan Green Tea (Beijing) Food & Beverage
Management Company Limited (ၠ঩(̏ԯ)᎛භ၍
ʮ̡), a limited liability company established in
the PRC on March 27, 2017 and an indirect wholly-
owned subsidiary of our Company
“Series-A Preferred Share(s)” the voting, convertible and redeemable preferred shares
in the share capital of our Company each with a nominal
or par value of US$1.00 prior to share subdivision on
March 22, 2021 and of US$0.00002 after such share
subdivision
“Selling Shareholder” Partners Group Gourmet House Limited, particulars of
which are set out in the section headed “E. Other
Information – 13. Particulars of the Selling Shareholders”
in Appendix IV to this prospectus
“SFC” the Securities and Futures Commission of Hong Kong
SAR
DEFINITIONS
–3 5–


--- page 44 ---
“SFO” or “Securities and Futures
Ordinance”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended or supplemented from
time to time
“Shareholder(s)” holder(s) of Shares
“Shares” ordinary shares in the share capital of our Company with
par value of US$0.00002 each
“Stock Borrowing Agreement” the stock borrowing agreements expected to be entered
into on or around May 14, 2025 between the Stabilizing
Manager (or its agent) and Time Sonic pursuant to which
the Stabilizing Manager may borrow up to an aggregate
of 25,254,400 Shares from Time Sonic, to cover over-
allocations in the International Offering
“Shenzhen Green Tea Trading” Shenzhen Green Tea Renjia Trading Company Limited
(ʮ̡), a limited liability
company established in the PRC on June 24, 2016 and an
indirect wholly-owned subsidiary of our Company
“Sponsor-Overall Coordinators” the sponsor-overall coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering” of this prospectus
“Stabilizing Manager” CMB International Global Markets Limited
“State Council” the PRC State Council ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Strategic Investment” the strategic investment in our Group undertaken by
Partners Gourmet, details of which set out in “History,
Reorganization and Corporate Structure – Strategic
Investment”
“three key regions” including Eastern China, Guangdong province and
Northern China regions
“Tibet Green Tea F&B” Tibet Green Tea Food & Beverage Management
Company Limited (ʮ̡), a
limited liability company established in the PRC on
March 30, 2016 and an indirect wholly-owned subsidiary
of our Company
DEFINITIONS
–3 6–


--- page 45 ---
“Tibet Green Tea Enterprise” Tibet Green Tea Quan Enterprise Management Company
Limited (ʮ̡), (formerly
known as Tibet Green Tea Quan Investment Management
Company Limited (ʮ̡)), a
limited liability company established in the PRC on
March 30, 2016 and an indirect wholly-owned subsidiary
of our Company
“Tibet Guandongzao” Tibet Guandongzao Investment Management Company
Limited (ʮ̡), a limited
liability company established in the PRC on March 30,
2016 and an indirect wholly-owned subsidiary of our
Company
“Tibet Guandongzao F&B” Tibet Guandongzao Food & Beverage Company Limited
(ʮ̡), a limited liability company
established in the PRC on May 11, 2016 and an indirect
wholly-owned subsidiary of our Company
“Time Sonic” Time Sonic Investments Limited, a company
incorporated in the Seychelles with limited liability on
June 19, 2015, indirectly wholly-owned by Absolute
Smart V entures, Mr. Wang and Ms. Lu as to 99.9%,
0.049% and 0.051%, respectively, and is one of our
Controlling Shareholders
“Track Record Period” the years ended December 31, 2022, 2023 and 2024
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“US$”, “USD” or “U.S. dollars” United States dollars, the lawful currency for the time
being of the United States
“U.S.” or “United States” the United States of America
“U.S. Securities Act” the United States Securities Act of 1933, as amended and
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
DEFINITIONS
–3 7–


--- page 46 ---
“Vistra Trust” Vistra Trust (Hong Kong) Limited, an independent third
party professional trust company established in Hong
Kong SAR
“Wuhan Lujia” Wuhan Lujia Food & Beverage Management Company
Limited (ʮ̡), a limited liability
company established in the PRC on March 30, 2017 and
an indirect wholly-owned subsidiary of our Company
“Xipan Qiwang” Hangzhou Xipan Qiwang Food & Beverage Management
Company Limited (ʮ̡), a
limited liability company established in the PRC on
September 27, 2024 and an indirect wholly-owned
subsidiary of our Company
“Yielding Sky” Yielding Sky Limited, a limited liability company
incorporated in the Republic of Seychelles on June 12,
2015, which is wholly owned by Mr. Wang, one of our
Controlling Shareholders
“Zhejiang Daxin” Zhejiang Daxin Supply Chain Management Company
Limited (ʮ̡), a limited
liability company established in the PRC on May 24,
2023 and indirect wholly-owned subsidiary of our
Company
“Zhejiang Lvqin” Zhejiang Lvqin Supply Chain Management Company
Limited (ʮ̡), a limited liability
company established in the PRC on December 29, 2020 and
indirect wholly-owned subsidiary of our Company
“%” percent
* For identification purposes only
In this prospectus, the terms “associate(s)”, “close associate(s)”, “connected
person(s)”, “connected transaction(s)”, “core connected person(s)”, “controlling
shareholder(s)”, “subsidiary(ies)” and “substantial shareholder(s)” shall have the meanings
given to such terms in the Listing Rules, unless the context otherwise requires.
DEFINITIONS
–3 8–


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This glossary contains terms used in this prospectus in connection with us. As
such, these terms and their meanings may not correspond to standard industry
meanings or usage of these terms.
“breakeven” the first month for the revenue of a newly opened
restaurant to at least equal its expenses
“CAGR” compound annual growth rate
“cash investment payback
period”
the amount of time it takes for the cumulative earnings
before interest, tax and depreciation to cover the cost to
open a restaurant
“food processing” the process which transforms ingredients and condiments
into food, semi-processed food products and bakery
products
“GFA” gross floor area
“IT” information technology
“kWh” kilowatt-hour
“new tier one cities” for the purpose of this prospectus, Changsha, Chengdu,
Chongqing, Dongguan, Foshan, Hangzhou, Hefei,
Nanjing, Qingdao, Shenyang, Suzhou, Tianjin, Wuhan,
Xi’an and Zhengzhou
“office automation system” a system which enables its user to create, collect, store,
manipulate and relay office information digitally
“QR code” a machine-readable optical label that contains
information about the item to which it is attached
“semi-processed food products” semi-processed food ingredients which require relatively
few steps of standardized preparation at the restaurant
before serving, which primarily consist of
cleaned, processed or marinated meat, aquatic products,
vegetables and fruit
“tier one cities” for the purpose of this prospectus, Beijing, Shanghai,
Guangzhou and Shenzhen
GLOSSARY
–3 9–


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“tier two cities” for the purpose of this prospectus, Baoding, Changchun,
Changzhou, Dalian, Fuzhou, Guiyang, Harbin, Huizhou,
Jiaxing, Jinan, Jinhua, Kunming, Langfang, Lanzhou,
Nanchang, Nanning, Nantong, Ningbo, Quanzhou,
Shaoxing, Shijiazhuang, Taizhou (Zhejiang), Taiyuan,
Wenzhou, Xiamen, Xuzhou, Y antai, Yixing, Wuxi,
Zhongshan and Zhuhai
“tier three and lower tier cities” for the purpose of this prospectus, all the cities and
regions of Mainland China excluding tier one cities, new
tier one cities and tier two cities
GLOSSARY
–4 0–


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This prospectus contains certain forward-looking statements and information relating to
our Company and our subsidiaries that are based on the beliefs of our management as well as
assumptions made by and information currently available to our management. When used in
this prospectus, the words “aim”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “going
forward”, “intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would”
and the negative of these words and other similar expressions, as they relate to the Group or
our management, are intended to identify forward-looking statements. Such statements reflect
the current views of our management with respect to future events, operations, liquidity and
capital resources, some of which may not materialize or may change. These statements are
subject to certain risks, uncertainties and assumptions, including the other risk factors as
described in this prospectus. Y ou are strongly cautioned that reliance on any forward-looking
statements involves known and unknown risks and uncertainties. The risks and uncertainties
facing our Company which could affect the accuracy of forward-looking statements include,
but are not limited to, the following:
 our business prospects;
 future developments, trends and conditions in the industry and markets in which we
operate;
 our business strategies and plans to achieve these strategies;
 general economic, political and business conditions in the markets in which we
operate;
 changes to the regulatory environment and general outlook in the industry and
markets in which we operate;
 the effects of the global financial markets and economic crisis;
 our ability to reduce costs;
 our dividend policy;
 the amount and nature of, and potential for, future development of our business;
 capital market developments;
 the actions and developments of our competitors; and
 change or volatility in interest rates, foreign exchange rates, equity prices, volumes,
operations, margins, risk management and overall market trends.
FORW ARD-LOOKING STATEMENTS
–4 1–


--- page 50 ---
Subject to the requirements of applicable laws, rules and regulations, we do not have any
and undertake no obligation to update or otherwise revise the forward-looking statements in
this prospectus, whether as a result of new information, future events or otherwise. As a result
of these and other risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this prospectus might not occur in the way we expect or at all.
Accordingly, you should not place undue reliance on any forward-looking information. All
forward-looking statements in this prospectus are qualified by reference to the cautionary
statements in this section.
In this prospectus, statements of or references to our intentions or those of the Directors
are made as of the date of this prospectus. Any such information may change in light of future
developments.
FORW ARD-LOOKING STATEMENTS
–4 2–


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Y ou should carefully consider all of the information set out in this prospectus
before making an investment in the Shares, including the risks and uncertainties
described below in respect of our business and our industry and the Global Offering.
Y ou should pay particular attention to the fact that we are a company incorporated in
the Cayman Islands and that our principal operations are conducted in Mainland
China and are governed by a legal and regulatory environment that in some respects
differs from what prevails in other countries. Our business could be affected materially
and adversely by any of these risks.
RISKS RELATING TO OUR BUSINESS
Our future growth depends on our ability to open and profitably operate in existing and
new geographical markets.
Our future growth depends on our ability to open and profitably operate new restaurants.
In 2022, 2023 and 2024, we opened 47, 89 and 120 new restaurants, respectively. We may not
be able to open new restaurants at the same rate as in the past or as quickly as planned. Delays
or failures in opening new restaurants could materially and adversely affect our growth strategy
and our expected financial and operating results. In obtaining new restaurant sites, we may face
intense competition from our competitors in the catering industry. We may also encounter
delays when applying for relevant material licenses during the approval process from the
government authorities, for which the timeline is beyond our control. Even if we are able to
open additional restaurants as planned, these new restaurants may neither be profitable nor
have results comparable to our existing restaurants for a period of time. This growth strategy
and the substantial efforts associated with the development of each additional restaurant may
cause our operating results and profits to fluctuate.
We may also open new restaurants in markets where we have little or no operating
experience. Those new markets may have different competitive environment, consumer tastes
and discretionary spending patterns from our existing markets. As a result, we may not be able
to open new restaurants in these markets on a timely basis or at all. If the new restaurants do
open, they may be less profitable compared with restaurants in our existing markets.
Consumers in a new market may not be familiar with our brand and we may need to build brand
awareness in that market through advertising and promotional activities, which could result in
higher expenses than originally planned. We may find it more difficult in new markets to hire,
motivate and retain qualified employees who share our business philosophy and culture.
Opening restaurants in new markets may record lower average sales, lower average spending
per guest, higher renovation costs, higher occupancy costs or higher operating costs than
restaurants in existing markets. In addition, we may take longer to set up similar supply chains
with suitable quality control in such new markets. Restaurants opened in new markets may take
longer than expected to ramp up and reach, or may never reach, expected sales and profit
levels, thereby affecting our overall profitability. There can be no assurance that we will be
able to maintain our profitability as we continue to expand into new markets.
RISK FACTORS
–4 3–


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We may not be able to maintain and increase the sales and profitability of our existing
restaurants.
The sales of existing restaurants will also affect our sales growth and will continue to be
a critical factor affecting our revenue and profit. Our ability to increase sales of existing
restaurant depends in part on our ability to successfully implement our initiatives to increase
customer traffic, table turnover and spending per guest. Examples of these initiatives include
offering quality dishes and combinations, enhancing dining experience to attract repeat
customers, enhancing customer loyalty, attracting more customers during non-peak hours and
adjusting prices of our dishes. There can be no assurance that we will be able to achieve our
targeted sales growth and profitability for our existing restaurants. Also, we cannot ensure that
existing restaurant sales will not decrease. For example, there has been a general change in
consumer behavior recently to reduce expenses and frequencies of dining out given the current
economic environment. Such changes in consumer behavior had led to decreases in our table
turnover rate, average spending per guest and same store sales in all regions in 2024. See
“Business – Restaurant Performance” for further details. Furthermore, such changes in
consumer behavior may continue or reoccur in the future, which may hinder our ability to
achieve our targeted sales and profitability. If we are unable to achieve our targeted sales and
profitability in our existing markets, our business, financial condition and results of operations
may be materially and adversely affected.
As of December 31, 2024, we had 155, 83, 58 and 169 restaurants in Eastern China,
Guangdong province, Northern China and other regions, respectively. To minimize competition
among our own restaurants, we generally avoid opening a new restaurant within a three-
kilometer radius of an existing restaurant in a tier one or new tier one city. In other cities, we
may position our restaurants further apart from each other to ensure sufficient customer traffic
at each location. Nonetheless, as we open new restaurants in our existing geographic markets,
the sales performance and customer traffic of our existing restaurants near such new restaurants
may decline as a result of increased competition. This may in turn adversely affect our
business, financial condition and results of operations of our existing restaurants.
Increases in the cost of ingredients used in our restaurants may lead to declines in our
margins and operating results.
Any rise in our costs, particularly a rise in the cost of the ingredients, may lead to declines
in our margins and operating results. Our cost of raw materials and consumables used depends
on a variety of factors, many of which are beyond our control. Our raw materials and
consumables used represented approximately 36.3%, 33.6% and 31.1% of our revenue in 2022,
2023 and 2024, respectively. Fluctuations in weather, supply and demand, and economic
conditions could adversely affect the cost, availability, and quality of our critical food
ingredients. If we are not able to obtain requisite quantities of quality ingredients at
commercially reasonable prices, we may not be able to serve our dishes. Furthermore, if we
cannot pass these cost increases onto our customers, our operating margins may decrease.
RISK FACTORS
–4 4–


--- page 53 ---
In addition, the PRC government has promulgated laws and regulations including the
Pricing Law of the PRC () on December 29, 1997 under which
temporary measures may be taken to control price increases or decreases of certain material
commodities which include a number of ingredients that are important to our business, such as
rice, oil, meat and eggs. Such price control measures will have direct effects on the cost of
relevant ingredients. The measures that prevent the prices of ingredients from falling will keep
our cost of relevant ingredients at a higher level than it would be under free market conditions.
Although generally we may benefit from the measures that control price increases which keep
our ingredient costs from rising, there is no guarantee for how long and to what extent such
measures may be implemented, or whether such measures will effectively control price
increases in the long run. For example, there is a possibility that price control measures may
frustrate the relevant suppliers and discourage supply, which may materially and adversely
affect our business.
If we cannot obtain desirable restaurant locations or secure renewal of existing leases on
commercially reasonable terms, our business, results of operations and ability to
implement our growth strategy may be materially and adversely affected.
We compete with other restaurants for suitable locations. Also, some landlords and
developers may offer priority or grant exclusivity for desirable locations to some of our
competitors. We cannot assure you that we will be able to enter into new lease agreements for
prime locations or renew existing lease agreements on commercially reasonable terms. We
have encountered certain instances in which a landlord decided to change its business strategy,
and the relevant leases could not be renewed as a result. During the Track Record Period, we
closed three restaurants due to such reason.
The lease arrangements for our restaurants generally last for five to 10 years with an
option to renew. Where we do not have a provision providing an option to renew a lease
agreement, we may need to negotiate the terms of renewal with the lessor, who may insist on
a significant modification to the terms and conditions of the lease agreement. If a lease
agreement is renewed at a rate substantially higher than the existing rate or other existing
favorable terms granted by the lessor, if any, are not extended, we must evaluate whether
renewal on such modified terms is in our business interest. If we are unable to renew leases for
our restaurant sites, we will have to close or relocate the relevant restaurants, which would
eliminate the sales that the restaurants would have contributed to our revenue during the period
of closure, and could subject us to costs and risks relating to new restaurant openings. In
addition, the revenue and any profit generated at a relocated restaurant may be less than the
revenue and profit previously generated before such relocation. Therefore, any inability to
obtain leases for desirable restaurant locations or renew existing leases on commercially sound
terms could have a material and adverse effect on our business, financial condition and results
of operations.
RISK FACTORS
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--- page 54 ---
If the quality of our dining experience declines, our restaurants may not continue to be
successful.
The success of our restaurants revolves primarily around guest satisfaction, which is
dependent on the continued popularity of our Green Tea brand and lies in our ability to
maintain and enhance our dining experience. The quality of our dining experience may be
adversely affected by a number of factors, including, among others:
 decline in the quality of service provided by our restaurant staff;
 inability to pioneer and introduce new services or dishes that gain popularity
amongst guests;
 inability to meet the needs of our guests and changes in consumer tastes or
preferences;
 decline in food quality, or the perception of such decline amongst guests;
 any significant liability claims or food contamination complaints from our guests;
 inability to offer quality food at affordable prices;
 long waiting time;
 limited accessibility to public transportation;
 decrease in the attractiveness or quality of design of our restaurants; and
 low quality of delivery service.
We cannot guarantee that our dining experience will continue to be of high quality and
favored by guests, nor that our existing and new restaurants will continue to be successful.
Our business depends significantly on the market recognition of our Green Tea brand, and
if we are not able to maintain or enhance our brand recognition, our business, financial
condition and results of operations may be materially and adversely affected.
We believe that maintaining and enhancing our Green Tea brand is important to
maintaining our competitive advantage. However, our ability to maintain our brand recognition
depends on a number of factors, some of which are beyond our control. Our continued success
in preserving and enhancing our brand and image depends to a large extent on our ability to
further develop and maintain our combination of fusion cuisine, affordable prices, hospitable
services, pleasant dining environments throughout our restaurant network and our ability to
respond to any change in the competitive environment in the catering industry. If we are unable
to do so, the value of our brand or image will be diminished and our business and results of
RISK FACTORS
–4 6–


--- page 55 ---
operations may be materially and adversely affected. In addition, if any third parties use or
imitate our trademarks or trade names without our authorization to operate restaurant which
result in adverse side effect on customers, we may be associated with negative publicity and
our brand reputation may suffer as a result. As we continue to grow in size, expand our food
offerings and services and extend our geographic reach, maintaining quality and consistency
may be more difficult and we cannot assure you that customers’ confidence in our brand name
will not be diminished.
Our current restaurant locations may become unattractive, which may have a material
and adverse effect on our business, financial condition and results of operations.
The success of any restaurant depends substantially on its location. There can be no
assurance that our current restaurant locations will continue to be attractive as economic or
demographic conditions change. The economic and demographic conditions of our restaurant
locations could become unfavorable to us in the future, thus resulting in potentially reduced
sales of restaurants in these locations. As substantially all of our lease agreements have fixed
lease terms, these lease agreements expose us to the risk of having to make rental payments for
fixed periods of time in spite of unprofitable business operations or other unforeseen events
that may occur before each lease term expires. We may also have to incur losses, such as early
termination penalties, if we decide to terminate our leases before the terms expire. As of the
Latest Practicable Date, a substantial portion of our restaurants have a lease term of over five
years. In addition, as of the Latest Practicable Date, there were 10 restaurants that have a lease
term of over 15 years. Such long lease terms may further expose us to such risks. Therefore,
the inability and/or the lack of flexibility to terminate these leases early could have a material
and adverse effect on our business, financial condition and results of operation.
If we are unable to manage our growth effectively, our business and financial results may
be materially and adversely affected.
We have increased the number of our restaurants from 236 as of January 1, 2022 to 493
as of the Latest Practicable Date. We plan to continue to expand our restaurant network in
different geographic locations in the PRC. As of the Latest Practicable Date, we had opened
four restaurants in Hong Kong SAR, and we plan to open a total of around 28 new restaurants
overseas from 2025 to 2027. In addition, we may continue to selectively open new restaurants
in overseas metropolises in the future. This further expansion may place substantial demands
on our management team, and our operational, technological, labor and other resources. Our
planned expansion will also place significant demands on us to maintain consistent food and
service quality and preserve our corporate culture to ensure that our brand does not suffer from
any deterioration, whether actual or perceived, in the quality of our food or services.
Our continued success also depends on our ability to recruit, train and retain additional
qualified management, administrative, sales and marketing personnel, particularly as we
expand into new markets. We also need to continue to manage our relationships with our
suppliers and customers. All of these endeavors will require substantial management attention
and efforts, and require significant additional expenditures. We cannot assure you that we will
RISK FACTORS
–4 7–


--- page 56 ---
be able to manage any future growth effectively and efficiently, and any failure to do so may
materially and adversely affect our ability to capitalize on new business opportunities. This in
turn may have a material and adverse effect on our business, financial condition and results of
operations.
Our business is affected by changes in consumer taste and discretionary spending, and we
may not be able to respond to such changes.
The catering industry is defined by consumer taste and preference. We cannot assure you
that we can continue to develop new dishes and maintain an attractive menu to suit changing
customer demands.
To a significant extent, our success also depends on discretionary customer spending,
which is influenced by various factors beyond our control, such as general economic
conditions. Accordingly, we may experience declines in sales during economic downturns or
prolonged periods of high unemployment rates. Any material decline in the amount of
discretionary spending in the PRC may have a material and adverse effect on our business,
results of operations and financial condition. See also “– We may not be able to maintain and
increase the sales and profitability of our existing restaurants.”
We may not be able to quickly develop new dishes and adapt to evolving customer
preferences and tastes.
Our continued success depends on our ability to continuously launch new dishes and
improve the existing dishes to cater to the evolving customer preferences and tastes. There is
no guarantee that we will always be able to effectively gauge the direction of our key markets
and successfully identify, develop and promote new or improved dishes in the changing market,
or our new dishes will always be favored by customers or commercially successful. Our
financial results could be adversely affected by the lack of customer acceptance of new dishes;
customers’ reducing their demand for our current offerings as new dishes are introduced; or
that we are unable to effectively manage our cost of raw materials and consumables, especially
for newly launched dishes.
Our historical financial and operating results are not indicative of future performance,
and we may not be able to achieve and sustain the historical level of revenue and
profitability.
Our historical results and growth may not be indicative of our future performance. Our
financial and operating results may not meet the expectations of public market analysts or
investors, which could cause the future price of our Shares to decline. Our revenue, expenses
and operating results may vary from period to period in response to a variety of factors beyond
our control. These factors can include general economic conditions, special events, government
regulations and policies affecting our restaurant operations and/or our ability to control costs
and operating expenses. Our staff costs may fluctuate from month to month as we are required
by law to pay our staff a higher rate for work on public holidays. Y ou should not rely on our
historical results to predict our future financial performance.
RISK FACTORS
–4 8–


--- page 57 ---
We may be unable to detect, deter and prevent all instances of fraud or other misconduct
committed by our employees, customers or other third parties.
We are exposed to the risks of fraud, theft or other misconduct involving employees,
customers or other third parties, which may have a material adverse impact on our business.
We are also exposed to the risk of our staff members responsible for procurement and quality
control receiving bribes or kick-backs from our suppliers in violation of our policies, which in
turn may result in supplies that are overpriced or fail our quality standard. We may be unable
to prevent, detect or deter all instances of misconduct. Any misconduct committed against our
interests, which may include past acts that have gone undetected or future acts, could subject
us to financial losses and/or harm our reputation.
Our restaurants are susceptible to risks in relation to rental increases or fluctuations.
As we lease the property for all of our restaurants and offices, we have significant
exposure to the retail rental market in the PRC. In 2022, 2023 and 2024, our depreciation of
right-of-use assets amounted to RMB161.0 million, RMB177.0 million and RMB202.9 million,
respectively, representing 6.8%, 4.9% and 5.3% of our total revenue for the respective period,
and our other rentals and related expenses were RMB56.6 million, RMB80.3 million and
RMB76.1 million, respectively, representing 2.4%, 2.2% and 2.0% of our revenue for the
respective periods. Since our rental expenses represent a significant portion of our total
operating expenses, our profitability may be adversely affected by any substantial increase in
such expenses of our restaurant premises.
Shortages or interruptions in the availability and delivery of our food ingredients and
other supplies may have a material and adverse effect on our business, financial condition
and results of operations.
If our suppliers do not deliver food ingredients and other supplies in a timely manner, we
may experience supply shortages and increased food costs. The ability to source high-quality
food ingredients at competitive prices in a timely manner is crucial to our business. Our ability
to maintain consistent quality and maintain our menu offerings throughout our restaurant
network depends in part upon our ability to acquire food ingredients and related supplies in
sufficient quantities from reliable sources that meet our food safety and quality specifications.
While we generally enter into standard one-year framework agreements with our suppliers for
food ingredients, the purchase prices with suppliers for our food ingredients are typically set
by way of purchase orders. In each of 2022, 2023 and 2024, the total purchases from our five
largest suppliers in aggregate accounted for 18.6%, 18.4% and 18.2% respectively, and our
purchases from our largest supplier accounted for 5.0%, 5.2% and 4.5%, respectively, of our
total purchases. During the Track Record Period, none of our key suppliers ceased or indicated
that it would cease to provide supplies to us. Also, we did not experience any material delays
or interruptions in securing supplies from our key suppliers. However, there can be no
assurance that we will be able to maintain business relationships with our key suppliers.
RISK FACTORS
–4 9–


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A disruption of our food supplies can occur for a variety of reasons, many of which are
beyond our control, including adverse weather conditions, international trade disputes,
import/export restrictions, natural disasters, diseases, important suppliers ceasing operations or
unexpected production shortages. Moreover, there can be no assurance that our current
suppliers may always be able to meet our stringent quality control requirements in the future.
If any of our suppliers does not perform quality control adequately or otherwise fail to
distribute supplies to us in a timely manner, we cannot assure you that we will be able to find
suitable alternative suppliers in a short period of time on acceptable terms. As a result, our
failure to do so could increase our procurement costs and cause shortages of food ingredients
and other supplies at our restaurants. Any significant food shortages or supply disruptions will
lead to the unavailability of some menu items and a significant reduction in revenue as
customers seek out alternative dining options.
Rising labor costs and the long-term trend of higher wages may lead to declines in our
margins and operating results.
Historically, staff costs which comprise salaries and benefits payable to all our employees
and staff, including our Directors, senior management, headquarters personnel and restaurant
level staff, have been a major component of our operating costs. In 2022, 2023 and 2024, our
staff costs accounted for approximately 26.4%, 25.4% and 25.8% of our revenue, respectively.
Currently, substantially all of our staff are employed in the PRC, and thus we take advantage
of the availability of relatively low-cost labor in the PRC. The economy in the PRC has grown
significantly over the past 20 years, which has resulted in an increased average cost of labor.
The overall economy and the average wage in the PRC are expected to continue growing.
The Labor Contract Law of the PRC that became effective on January 1, 2008 and was
amended on December 28, 2012 formalizes workers’ rights concerning overtime hours,
pensions, layoffs, employment contracts, the role of labor unions, and provides for specific
standards and procedures for the termination of an employment contract. In addition, the Labor
Contract Law requires the payment of a statutory severance pay upon the termination of an
employment contract in most cases, including in cases of the expiration of a fixed term
employment contract. The implementation of the Labor Contract Law may significantly
increase our operating expenses, in particular our personnel expenses. In the event that we
decide to terminate the employment of some of our employees or otherwise change our
employment or labor practices, the Labor Contract Law may also limit our ability to effect
these changes in a manner that we believe to be cost-effective or desirable. Any shortages in
the availability of labor or any material increase in the cost of labor as a result of competition,
increased minimum wage requirements and employee benefits will diminish our competitive
advantage and have a material and adverse effect on our business, financial condition and
results of operations.
RISK FACTORS
–5 0–


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Any failure to maintain effective quality control systems could have a material and
adverse effect on our reputation, results of operations and financial condition.
The quality and safety of the food we serve is critical to our success. Maintaining
consistent food quality depends significantly on the effectiveness of our quality control
systems, which in turn depends on a number of factors, including the design of our quality
control systems and our ability to ensure that our employees and suppliers adhere to and
implement those quality control policies and guidelines. Our quality control systems consist of
(i) procurement quality control, (ii) storage and logistics quality control, and (iii) restaurant
operations quality control. For more details on our quality control systems, see “Business –
Food Safety and Quality Control.” There can be no assurance that our quality control systems
will prove to be effective. Any significant failure or deterioration of our quality control systems
could have a material and adverse effect on our reputation, results of operations and financial
condition.
Any failure or perceived failure to deal with customer complaints or adverse publicity
involving our food or services could materially and adversely impact our business and
results of operations.
A chain restaurant business such as ours can be adversely affected by negative publicity,
whether accurate or not. The negative publicity can arise from news reports or allegations in
printed and online media regarding our restaurant operations, in particular alleged food quality
and safety and fire safety issues. Reports on public health concerns and/or negative media
attention concerning our competitors or catering service providers across the food industry
supply chain may potentially affect customer perception of our business. Any such negative
publicity could materially harm our business, brands and results of operations.
A significant number of complaints or claims against us, even if meritless or
unsuccessful, could force us to divert management and resources from other main business
concerns, which may adversely affect our business and operations. Adverse publicity resulting
from such complaints or claims, even if meritless or unsuccessful, could cause customers to
lose confidence in us and our brand, which may also adversely affect the business of the
restaurants subject to such complaints and our restaurants under the same or related brand. As
a result, we may experience significant declines in our revenue and customer traffic from which
we may not be able to recover.
Any significant liability claims, food contamination complaints from our customers or
reports of food tampering incidents could adversely affect our reputation, business and
operations.
Being in the catering industry, we face an inherent risk of food contamination and liability
claims. Our food quality substantially depends on the quality of the food ingredients provided
by our suppliers and we may not be able to detect all defects in those supplies. As we expand
our business scale, we cannot assure you that these counterparties or our restaurant employees
will adhere to our internal procedures and requirements at all times. Any failure to detect
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defective food supplies, poor hygiene or cleanliness standards in our operations or other failure
to observe our requirements, could adversely affect the quality of the food served in our
restaurants, which could lead to liability claims, complaints, or related adverse publicity and
could result in the imposition of penalties by competent authorities or compensation awarded
by courts against us.
Most of the guest complaints we received were related to the taste and style of a particular
dish, long waiting time, and the service quality of our staff. We take these complaints seriously
and endeavor to reduce such complaints by implementing various remedial measures.
Nevertheless, we cannot assure you that we can successfully prevent all guest complaints of
similar nature.
Any complaints or claims against us or any restaurant we operate, even if meritless and
unsuccessful, may divert management attention and other resources from our business and
adversely affect our business and operations. Guests may lose confidence in us and our brand,
which may adversely affect the business of our restaurants, resulting in declines in our revenue
and even losses. Furthermore, negative publicity including but not limited to negative online
reviews on social media and crowd sourced review platforms or media reports related to food
quality, safety, public health concerns, illness, or injury, or industry findings, whether or not
accurate, and whether or not concerning our restaurants, can adversely affect our business,
results of operations and reputation.
We may be unable to receive compensation from suppliers if there are contaminated
ingredients used in our dishes and indemnity provisions in our supply contracts may be
insufficient.
In the event that we become subject to food safety claims caused by contaminated or
defective food ingredients from our suppliers, we can attempt to seek compensation from the
relevant suppliers. However, indemnities provided by suppliers may be limited and the claims
against suppliers may be subject to certain conditions precedent which may not be satisfied. In
addition, although our suppliers typically agree to indemnify our losses due to defective
products provided by the relevant supplier, our supply contracts usually do not have provisions
to cover lost profits and indirect or consequential losses. If no claim can be asserted against
a supplier, or amounts that we claim cannot be recovered from the supplier to the extent that
our insurance coverage is insufficient, we may be required to bear such losses and
compensation at our own costs. This could have a material and adverse effect on our business,
financial condition and results of operations.
Events that disrupt the operations of any of our restaurants, such as fires, floods,
earthquakes or other natural or man-made disasters, may materially and adversely affect
our business operations.
Our operations are vulnerable to interruption by fires, floods, typhoons, power failures
and shortages, terrorist attacks and other events beyond our control. Our business is also
dependent on prompt delivery and transportation of our food ingredients. Certain events, such
as adverse weather conditions, natural disasters, severe traffic accidents and delays, and labor
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strikes, could also lead to delayed or lost deliveries of food supplies to logistics facilities and
our restaurants. All of which may result in the loss of potential business, and thus sales
revenue. Perishable food ingredients, such as fresh, chilled or frozen food ingredients, may
deteriorate due to delivery delays, malfunctioning of refrigeration facilities or poor handling
during transportation by our suppliers or our logistics partners. For example, we temporarily
suspended the operation of certain restaurants in various parts of Mainland China in 2022 due
to the COVID-19 pandemic and in response to the restrictive measures imposed by the relevant
local governments. In addition, fires, floods, earthquakes and terrorist attacks may lead to
evacuations and other disruptions in our operations, which may also prevent us from providing
quality food and service to customers, thereby affecting our business and damaging our
reputation. Any such event could materially and adversely affect our business operations and
results of operations.
Information technology system failures, breaches of our network security or compromised
data privacy or information security could interrupt our operations and adversely affect
our business.
We rely on our computer systems and network infrastructure across our operations to
monitor the daily operations of our restaurants and to collect accurate up-to-date financial and
operating data for business analysis and decision making such as the procurement of supplies.
Any damage or failure of our computer systems or network infrastructure or computer virus
attacks that causes an interruption or inaccuracies in our operations could have a material and
adverse effect on our business and results of operations.
We also receive certain personal information about our customers through our
membership system and when our customers order through our WeChat mini programs or when
we provide delivery services through third-party platforms. Our network security may be
breached due to the actions of outside parties, employee error, malfeasance, or a combination
of these or otherwise. If any actual or perceived breach of our security occurs, we may become
subject to litigation or other proceedings relating to such incidents. Any such proceedings
could distract our management from running our business and cause us to incur significant
unplanned losses and expenses. In addition, our guests’ confidence in the effectiveness of our
security measures could be harmed and we may lose guests and suffer financial losses due to
such events or in connection with remediation efforts, investigation costs and system
protection measures. Any of the above could harm our reputation and materially and adversely
affect our business and results of operations.
Our insurance policies may not provide adequate coverage for all claims associated with
our business operations.
As of the date of this prospectus, we have obtained insurance policies that we believe are
customary for businesses of our size and type and in line with the standard commercial practice
in the PRC. For more details on our insurance policies, see “Business – Insurance.” However,
there are types of losses we may incur that cannot be insured against or that we believe are not
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commercially reasonable to insure, such as loss of reputation. If we were held liable for
uninsured losses or amounts and claims for insured losses exceeding the limits of our insurance
coverage, our business and results of operations may be materially and adversely affected.
We may not be able to adequately protect our intellectual property, which could harm the
value of our brand and adversely affect our business and operation.
We believe that our brand is essential to our success and our competitive position.
Although we have registered trademarks and have trademark applications pending in the PRC,
these steps may not be adequate to protect our intellectual property. There is no assurance that
any of our pending trademark applications will be granted. As of the Latest Practicable Date,
we have two pending trademark applications in the PRC. We cannot assure you that the
registrations will be successfully completed. If we fail to secure the registration of any
trademarks under application, or if we are held by any court or tribunal to be infringing on any
trademark of others, our business may be adversely affected. See “Statutory and General
Information” in Appendix IV to this prospectus. In addition, third parties may infringe upon
our intellectual property rights or misappropriate our proprietary knowledge, which could have
a material and adverse effect on our business, financial condition or operating results. While
our proprietary recipes are protected by confidentiality agreements between us and our
employees or certain suppliers, there can be no assurance that they will not breach such
agreements or leak the recipe to our competitors. In addition, although we can rely on
confidentiality and non-compete agreements with key personnel and other precautionary
procedures to protect our proprietary recipes, such measures may not be sufficient.
In the past, we have found that certain third parties used or imitated our trademarks or
trade names without our authorization to operate restaurants in cities where we do not have a
presence. While the conducts of such third parties did not have a material adverse effect on our
business, our reputation and brand may be damaged by infringements of our trademarks or
trade names in the future. If the operations of third parties who used or imitated our trademarks
or trade names without our authorization result in adverse side effects on consumers, we may
be associated with negative publicity as a result. Preventing trademark and trade name
infringement and trade secret misappropriation is difficult, costly and time-consuming. Such
litigation could result in substantial costs and diversion of resources, which could negatively
affect our sales, profitability and prospects. Even if any such litigation is resolved in our favor,
we may not be able to successfully enforce the judgment and remedies awarded by the court
and such remedies may not be adequate to compensate us for our actual or anticipated losses,
whether tangible or intangible.
On the other hand, we may face claims of infringement that could interfere with the use
of our proprietary know-how, concepts, recipes or trade secrets. Defending against such claims
may be costly and, if we are unsuccessful, we may be prohibited from continuing to use such
proprietary information in the future or be forced to pay damages, royalties or other fees for
using such proprietary information, any of which could negatively affect our sales, profitability
and prospects.
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Our success depends on the continuing efforts of our senior management team and other
key personnel, and therefore our business may be harmed if we lose their services.
Our future success depends heavily upon the continuing services and performance of our
key management personnel. We must continue to attract, retain and motivate a sufficient
number of qualified management and operating personnel to maintain consistency in the
quality and atmosphere of our restaurants and meet our planned expansion requirements.
If our senior management team fails to work together successfully, or if one or more of
our senior managers are unable to effectively implement our business strategy, we may be
unable to grow our business at the speed or in the manner in which we expect. Competition for
experienced management and operating personnel in the catering market is strong, and the pool
of qualified candidates is limited. We may not be able to retain the services of our key
management and operating personnel or attract and retain high-quality senior executives or key
personnel in the future.
In addition, if one or more of our key personnel are unable or unwilling to continue in
their present positions, we may not be able to replace them easily or at all. Therefore, our
business may be disrupted and our results of operations may be materially and adversely
affected. In addition, if any member of our senior management team or any of our other key
personnel joins a competitor or forms a competing business, business secrets and know-how
may leak as a result. Any failure to attract, retain and motivate these key personnel may harm
our reputation and result in a loss of business.
Our business could be adversely affected by difficulties in employee recruiting and
retention.
Our continued success depends in part upon our ability to attract, motivate and retain a
sufficient number of qualified employees for our chain restaurant operations, including
restaurant managers and kitchen staff. We cannot assure you that we will be able to recruit or
retain a sufficient number of qualified employees for our business. Any material increase in
employee turnover rates in our existing restaurants and any failure to recruit skilled personnel
and to retain key staff due to factors, such as failure to keep up with market average employee
salary levels, may make our growth strategy difficult to implement. Any of the above would
materially and adversely affect our business and results of operations.
Since we require various approvals, licenses and permits to operate our business, any
failure to obtain or renew any of these approvals, licenses and permits could materially
and adversely affect our business and results of operations.
In accordance with the PRC laws and regulations, we are required to maintain various
approvals, licenses and permits in order to operate our restaurant business in the PRC. Each of
our restaurants in the PRC is required to obtain the relevant catering service license. In
addition, each of our restaurants in the PRC is required to pass the necessary fire safety
inspection. These approvals, licenses and permits are achieved upon satisfactory compliance
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with, amongst other things, the applicable food hygiene and safety and fire safety laws and
regulations. Most of these licenses are subject to examinations or verifications by relevant
authorities and some are valid only for a fixed period of time subject to renewal and
accreditation.
Complying with government regulations may require substantial expense, and any
non-compliance may expose us to liability. In case of any non-compliance, we may have to
incur significant expense and divert substantial management time to resolving any deficiencies.
We may also experience adverse publicity arising from such non-compliance with government
regulations that negatively impacts our brand.
We have in the past failed to fully comply with the applicable laws and regulations to
complete certain fire safety procedures. We have fully rectified the relevant non-compliance
incidents. However, we cannot assure you that we will not be subject to any future regulatory
reviews and inspections where other non-compliance incidents might be identified, which
might materially and adversely affect our business, financial condition, results of operations
and prospects.
We may experience difficulties or failures in obtaining the necessary approvals, licenses
and permits for new restaurants. In addition, there can be no assurance that we will be able to
obtain, renew and/or convert all of the approvals, licenses and permits required for our existing
business operations upon expiration in a timely manner or at all. If we cannot obtain and/or
maintain all licenses required by us to operate our business, planned new business operations
and/or expansion may be delayed and our ongoing business could be interrupted. We may also
be subject to fines and penalties. For details, see “Business – Compliance, Licenses and
Permits.”
Failure to make social insurance and housing provident fund contributions for some of
our employees timely as required by PRC laws and regulations may subject us to late
payments and fines imposed by relevant governmental authorities.
Companies operating in the PRC are required to make social insurance and housing
provident funds for their employees. Our PRC subsidiaries have in the past failed to make
social security insurance and housing provident fund contributions for some of our employees
timely in accordance with the relevant PRC laws and regulations. For details, see “Business –
Compliance, Licenses and Permits – Social Insurance and Housing Provident Funds.” Our PRC
Legal Adviser has advised us that, pursuant to relevant PRC laws and regulations, we may be
ordered by the relevant PRC authorities to pay the outstanding social insurance contributions
within a prescribed time limit and may be subject to an overdue charge of 0.05% of the delayed
payment per day. If such payment is not made within the stipulated period, the competent
authority may further impose a fine from one to three times the amount of any overdue
payment. Our PRC Legal Adviser has further advised us that, pursuant to relevant PRC laws
and regulations, if we fail to pay the full amount of housing provident fund as required, the
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housing provident fund management center may order us to make the outstanding payment
within a prescribed time limit. If the payment is not made within such time limit, an application
may be made to the PRC courts for compulsory enforcement.
Our results of operations may fluctuate significantly due to several factors that are
beyond our control.
Our overall results of operations may fluctuate significantly from period to period
because of several factors, including: the timing of new restaurant openings and the amounts
of associated pre-opening costs and expenses; operating costs for our newly opened
restaurants, which are often substantially greater during the first few months of operations;
revenue loss and renovation expenses associated with the temporary closure of existing
restaurants for refurbishment; impairment of non-current assets, including goodwill and any
losses incurred on restaurant closures; and fluctuations in food and commodity prices. In
addition, our business and operating results may be subject to seasonal fluctuations because of
several factors including holidays, school vacations, and fluctuations in food prices. As a
result, our results of operations may fluctuate significantly from period to period and
comparisons of different periods may not be meaningful. Our results for a given period in a
fiscal year are not necessarily indicative of results to be expected for any other period in the
same fiscal year.
Our rights to use some of our leased properties could be challenged by property owners
or other third parties or due to usage defects, which may adversely affect our business
operations and financial condition.
As of the Latest Practicable Date, with respect to 48 out of 807 of our leased properties
in the PRC, the lessors of such properties still failed to provide us with sufficient or valid
ownership certificates or any form of permission to sublet from the owners, despite the
proactive requests we previously made, with an aggregate GFA of approximately 13,367.9
square meters, representing approximately 5.4% of the total GFA of our leased properties
(“Leased Properties Pending Title or Authorization Documents ”). Based on the advice of
our PRC Legal Adviser, if the lessors of the leased properties do not have the requisite rights
to lease the relevant properties, we would not be subject to any administrative penalties with
respect to these properties, but our leases may be affected, and as a result, we may be required
to vacate from the relevant properties and relocate our restaurants. In this event, our operation
of restaurants on such properties may be impaired and we may not be adequately indemnified
by the landlords for our related losses. Also, we will incur additional costs in relocating our
restaurants to other suitable locations, thus affecting our business operations and financial
condition.
The actual use of 12 leased properties (with an aggregate GFA of approximately 2,045.2
square meters, representing approximately 0.8% of our total leased GFA) does not fit into the
prescribed scope of usage shown on the relevant ownership certificates (“ Leased Properties
with Usage Defects ”). For the Leased Properties with Usage Defects, as advised by our PRC
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Legal Adviser, administrative penalties may be imposed on the owners if the properties are
leased for the usage incompatible with the prescribed scope, and our usage of the Leased
Properties with Usage Defects may be interrupted.
As of the Latest Practicable Date, the lease agreements with respect to 777 out of 807 of
our leased properties were not registered with the appropriate government authorities in the
PRC. As advised by our PRC Legal Adviser, failure to complete the registration of lease
agreements may lead to a fine ranging from RMB1,000 to RMB10,000 imposed by the relevant
PRC authorities for each unregistered lease. See “Business – Properties – Leased Properties –
Non-registration of Lease Agreements.”
Our net current liabilities may expose us to certain liquidity risks and could restrain our
operational flexibility as well as affect our ability to expand our business.
As of December 31, 2022, 2023 and 2024, we recorded net current liabilities of RMB88.3
million, RMB300.6 million and RMB64.9 million, respectively. As of March 31, 2025, we
recorded net current assets of RMB21.1 million. See “Financial Information – Working
Capital” for a detailed analysis of our historical net current liability position.
Net current liabilities may expose us to certain liquidity risks and could constrain our
operational flexibility as well as adversely affect our ability to expand our business. Our future
liquidity, the payment of trade and other payables, as and when they become due will primarily
depend on our ability to maintain adequate cash inflows from our operating activities and
adequate external financing, which will be affected by our future operating performance,
prevailing economic conditions, our financial, business and other factors, many of which are
beyond our control. If we do not have sufficient working capital to meet future financial needs,
we may need to resort to external funding. Our inability to obtain additional external
borrowings on a timely basis or on acceptable terms, or at all, may also force us to abandon
our development and expansion plans, and our business, financial condition and results of
operations may be materially and adversely affected.
We may need additional capital, and our ability to obtain additional capital is subject to
uncertainties.
We believe that our current cash and cash equivalents, anticipated cash flow from
operations and the proceeds from this Global Offering will be sufficient to meet our anticipated
cash needs, including our cash needs for working capital and capital expenditures, for at least
the next 12 months. We may, however, require additional cash resources to finance our
continued growth or other future developments, including any investments we may decide to
pursue. The amount and timing of such additional financing needs will vary depending on the
timing of our new restaurant openings, investments in new restaurants and the amount of cash
flow from our operations. If our resources are insufficient to satisfy our cash requirements, we
may seek additional financing by selling additional equity or debt securities or obtaining a
credit facility. The sale of additional equity securities could result in additional dilution to
shares held by our shareholders. The incurrence of indebtedness would result in increased debt
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service obligations and could result in operating and financing covenants that may, among
other things, restrict our operations or our ability to pay dividends. Servicing such debt
obligations could also be burdensome to our operations. If we fail to service the debt
obligations or are unable to comply with such debt covenants, we could be in default under the
relevant debt obligations and our liquidity and financial condition may be materially and
adversely affected.
Our ability to obtain additional capital on acceptable terms may be subject to a variety of
uncertainties, including but not limited to:
 investors’ perception of, and demand for, securities of businesses in the catering
industry;
 conditions of the Hong Kong SAR and other capital markets in which we may seek
to raise funds;
 our future results of operations, financial condition and cash flows;
 PRC governmental regulation of foreign investment in the catering industry in the
PRC;
 economic, political and other conditions in the PRC; and
 PRC governmental policies relating to foreign currency borrowings.
We cannot assure you that future financing will be available in amounts or on terms
acceptable to us, or at all. If we fail to raise additional funds, we may need to sell debt or
additional equity securities, reduce our growth to a level that can be supported by our cash flow
or defer planned expenditures.
We may be subject to the risk of obsolescence for our inventory.
Our inventory primarily consists of food ingredients, condiment product, beverage and
other materials used in our restaurant operations. As of December 31, 2022, 2023 and 2024, the
balances of our inventories amounted to RMB56.4 million, RMB59.6 million and RMB67.2
million, respectively.
Our major food ingredients, including semi-processed food products and vegetables and
fruits, have a typical shelf life of three months and three days, respectively. The risk of
obsolescence for our inventory increases as the age of our food ingredients increases. In
addition, though we adopt multiple methods to manage inventory levels, certain factors such
as unexpected fluctuations in the supply of raw materials or changes in customers’ tastes and
preferences are beyond our control and may lead to decreased demand and overstocking of
particular products, which in turn increases the risk of obsolescence for our inventory.
Furthermore, as our restaurant network expands, our inventory level increases and our
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inventory obsolescence risk may also increase along with the increased purchase of
inventories. In such circumstances, our business, financial condition and results of operations
may be materially and adversely affected.
We have granted, and may continue to grant, share-based incentive awards, which may
result in increased share-based compensation expenses.
We have adopted the RSU Scheme in 2020 in order to motivate and retain skilled and
experienced personnel to strive for the future development and expansion of the Group by
providing them with the opportunity to own equity interests of the Company. Expenses
associated with share-based compensation have affected our profitability and may continue to
affect our profitability in the future. We do not plan to issue any additional securities pursuant
to the RSU Scheme which constitutes a share scheme funded by existing shares only. However,
if we issue any additional securities under any share-based incentive plans we may adopt in the
future, such additional securities will dilute the ownership interests of our shareholders. We
believe the granting of share-based incentive awards is of significant importance to our ability
to attract and retain key employees, and we plan to grant additional share-based incentive
awards in the future. As a result, our share-based compensation expenses may increase, which
may have an adverse effect on our results of operations.
We may be exposed to credit risks resulting from delays and/or defaults in payments by
our customers, which would adversely affect our business, financial condition and results
of operations.
Our credit risk is primarily attributable to trade and other receivables. As of December 31,
2022, 2023 and 2024, our trade and other receivables amounted to approximately RMB240.2
million, RMB314.5 million and RMB332.3 million, respectively. For further details, see
“Financial Information – Analysis of Selected Statement of Financial Position Items – Trade
and Other Receivables.” Our trade and other receivables are primarily related to (i) bills settled
through third-party payment platforms such as Alipay or WeChat Pay, which were normally
settled within a short period of time, and (ii) bills received by shopping malls on behalf of us,
which were normally settled within one month.
If the abovementioned parties delay or default in their payments to us, we may have to
make impairment provisions and write-off the relevant receivables and hence our liquidity may
be adversely affected. This may in turn materially and adversely affect our business, financial
condition and results of operations.
We are subject to risk of recoverability of deferred tax assets.
As of December 31, 2022, 2023 and 2024, our deferred tax assets amounted to RMB36.9
million, RMB45.1 million and RMB44.3 million, respectively. As deferred tax assets can only
be recognized to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences and tax losses carried forward can be
utilized, management’s judgment is required to assess the probability of future taxable profits.
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During the Track Record Period, some of our PRC subsidiaries incurred losses which were
available for recognition of deferred tax assets to the extent that it was probable that future
taxable profit would be available against which losses could be utilized. Pursuant to the Notice
No. 8 issued by the Ministry of Finance and the State Administration of Taxation of the PRC
on February 6, 2020, the maximum carried forward period of the tax losses affected by
COVID-19 in certain affected industries, such as catering industry, is extended from five years
to eight years.
As of December 31, 2022, 2023 and 2024, we had unrecognized deferred tax assets in
respect of cumulative tax losses arising from some of our PRC subsidiaries of approximately
RMB2.1 million, RMB6.6 million and RMB4.1 million, respectively, that will expire in five
years or eight years. We also had unrecognized deferred tax assets in respective of certain
deductible tax losses arising from our subsidiaries in Hong Kong SAR of approximately
RMB2.7 million as of December 31, 2024, that are without expiry date. Future taxable profits
generated by existing restaurants may be offset by investment costs, such as upfront costs
incurred in establishing new restaurants for the management and operation of brands and
restaurants, which will increase the uncertainty in the utilization of tax losses prior to expiry.
Any changes in management’s judgment as well as the future operating results of the
relevant entities would affect the carrying amounts of deferred tax assets to be recognized and
the recoverability of deferred tax assets recognized in our consolidated financial statements,
and therefore could materially and adversely affect our financial condition and results of
operation in future years.
We may continue to recognize impairment losses for property, plant and equipment and
right-of-use assets.
For the years ended December 31, 2022, 2023 and 2024, we had 54, 30 and 26 restaurants
that recorded restaurant level operating loss and we recognized impairment losses of
approximately nil, RMB4.6 million and nil, respectively, due to the unfavorable future
prospects of certain restaurants at the end of each reporting period. For details of accounting
treatment, see note 11 to the Accountants’ Report set forth in Appendix I.
We may continue to recognize impairment losses for property, plant and equipment and
right-of-use assets in the future as we are actively expanding our restaurant network and the
performance of certain restaurants may not meet our expectation. If we continue to recognize
impairment losses for property, plant and equipment and right-of-use assets, our financial
condition and results of operations may be materially and adversely affected.
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Our financial condition, results of operations and prospects may be adversely affected by
the valuation uncertainty of financial assets at fair value through profit or loss due to the
use of unobservable inputs.
During the Track Record Period, we purchased low-risk financial assets at fair value
through profit or loss for cash management purposes, which are wealth management products.
As of December 31, 2022, 2023 and 2024, our financial assets measured at fair value through
profit or loss amounted to RMB40.0 million, RMB120.2 million and RMB25.0 million,
respectively. As we need to make significant estimates on assumptions in determining the fair
value of the wealth management products we purchased using unobservable inputs, the
valuation of these financial assets are subject to uncertainties. Any net changes in the fair value
of such assets are recorded as our other revenue, and therefore may adversely affect our results
of operations. Although we did not incur any fair value losses for financial assets at fair value
through profit or loss during the Track Record Period, we cannot assure you that we will not
incur any such fair value losses in the future. If we incur such fair value losses, our financial
condition, results of operations and prospects may be adversely affected.
Exemptions of value-added tax granted by the government in relation to the COVID-19
pandemic and certain government grants are non-recurring in nature and we may not be
able to enjoy the relevant exemptions and government grants again, which may result in
the decrease of our other income and adversely affect our financial condition and results
of operations.
During the Track Record Period, we recognized other government grants of RMB23.8
million and RMB28.3 million in other revenue in 2022 and 2023, respectively, mainly
representing additional deduction and exemption of value-added tax granted by the government
authorities in the PRC. Such government grant has been discontinued in 2024. There can be no
assurance that we will be able to enjoy the relevant tax exemptions and government grants
again. Furthermore, if there is any change in the policy regarding the relevant government
grants, we may not be able to continue to receive them in the future. Such changes relating to
our tax exemptions and government grants will result in the decrease of our other income and
adversely affect our financial condition and results of operations.
Rent concession granted by certain of our landlords in relation to the COVID-19
pandemic are non-recurring in nature and we may not be able to enjoy such rent
concession again, which may result in the decrease of our other income and adversely
affect our financial condition and results of operations.
In 2022, we received rent concession granted by certain of our landlords in relation to the
COVID-19 pandemic and recognized RMB10.2 million under our other income. As the
COVID-19 situation has been generally under control in Mainland China, we no longer enjoy
such rent concession now. There can be no assurance that we will be able to enjoy such rent
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concession again even if the pandemic seriously affects our business operations in the future.
If we cannot obtain such rent concession from our landlords in the future when our business
is seriously affected by the pandemic, our financial condition and results of operations may be
materially adversely affected.
We are exposed to risks relating to our plans for future expansion into overseas markets.
As of the Latest Practicable Date, we had opened four restaurants in Hong Kong SAR, and
we plan to open a total of around 28 new restaurants overseas from 2025 to 2027. We may
continue to selectively open new restaurants in overseas metropolises in the future. Overseas
operations may expose us to various risks including:
 different consumer preferences and discretionary spending patterns;
 the infringement of our intellectual property rights in foreign jurisdiction;
 political risks, including civil unrest, acts of terrorism, acts of war, regional and
global political or military tensions and strained or altered foreign relations;
 difficulties and costs associated with complying with, and enforcing remedies under,
a wide variety of complex domestic and international laws, treaties and regulations;
 difficulties with staffing and managing overseas operations;
 foreign currency exchange controls and fluctuations;
 uncertainties in the interpretation and application of tax laws and regulations, more
onerous tax obligations and unfavorable tax conditions; and
 cultural and language difficulties.
As a result of the above factors, restaurants opened in overseas markets may take longer
than expected to ramp up and reach, or may never reach, expected sales and profit levels,
thereby affecting our overall profitability.
RISKS RELATING TO OUR INDUSTRY
Intense competition in the catering industry could prevent us from increasing or
sustaining our revenue and profitability.
The catering industry is intensely competitive with respect to, among other things, food
quality and consistency, taste, price, ambience, service, location, supply of quality food
ingredients and employees. We face significant competition at each of our locations from a
variety of restaurants in various market segments, including locally-owned restaurants and
regional and international chains. Our competitors also offer dine-in, take-away and delivery
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services. There are a number of well-established competitors with substantially greater
financial, marketing, personnel and other resources than ours, and many of our competitors are
well established in the markets where we have restaurants or in which we intend to open new
restaurants. Additionally, other companies may develop new restaurants that operate with
similar concepts and target our customers, thus resulting in increased competition.
Any inability to successfully compete with the other restaurants in our markets may
prevent us from increasing or sustaining our revenue and profitability and thus lose market
share, which could have a material and adverse effect on our business, financial condition,
results of operations or cash flow. We may also need to modify or refine elements of our
restaurant network to evolve our concepts in order to compete with popular new restaurant
styles or concepts that develop from time to time. We cannot ensure that we will be successful
in implementing these modifications or that these modifications will not reduce our
profitability.
We may inadvertently fail to comply with the relevant regulations and laws due to
employee error, misunderstanding of regulations, or other circumstances beyond our
direct control. Failure to comply with existing or new government regulations relating to
the catering industry, fire safety, food hygiene and environmental protection could
materially and adversely affect our business and operating results.
Our business is subject to various compliance and operational requirements under PRC
laws and we may inadvertently fail to comply with the relevant regulations and laws due to
employee error, misunderstanding of regulations, or other circumstances beyond our direct
control. The failure of any of our restaurants to comply with applicable laws and regulations,
including laws governing our relationship with our employees, may incur substantial fines and
penalties from the relevant PRC government authorities. Each of our restaurants must hold a
basic business license issued by the local government authorities and must have restaurant
operations within the business scope of its business license. Our business is also subject to
various regulations that affect various aspects of our business in the cities in which we operate,
including fire safety, food hygiene and environmental protection. Each of our restaurants must
obtain various licenses and permits or conduct record filing procedures under these regulations.
If we fail to cure such non-compliance in a timely manner, we may be subject to fines,
confiscation of the gains derived from the related restaurants or the suspension of operations
of the restaurants that do not have all the requisite licenses and permits, which could materially
and adversely affect our business and results of operations. See also “Regulatory Overview –
Laws and Regulations on Food Safety and Licensing Requirements for Catering Services” and
“Regulatory Overview – Regulations on Fire Prevention.”
Our operations may be negatively affected by any industry-wide food safety related
concerns even if such concerns are through no fault of our own or related to our business.
The catering industry in Mainland China as a whole is subject to concern over food safety
and quality related issues. In particular, there have been numerous reports and negative
publicity related to the safety and quality incidents in Mainland China’s catering industry.
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While the reports and allegations are not targeted at us, the catering industry as a whole can
be negatively impacted by these incidents and associated reports. Our prospects, business,
results of operations and financial condition can be negatively impacted if the catering industry
experiences slower growth from concerns over food safety.
We face risks related to instances of food-borne illnesses, health epidemics and other
outbreaks.
Our business is susceptible to food-borne illnesses, health epidemics and other outbreaks.
We cannot guarantee that our internal controls and training will be fully effective in preventing
all food-borne illnesses. Furthermore, our reliance on third-party food processing companies,
suppliers and distributors increases the risk of food-borne illness incidents which could be
caused by third-party food processing companies, suppliers and distributors outside our control
and the risk of affecting multiple locations instead of a single restaurant being affected. Drug
resistant disease may develop in the future, or diseases with long incubation periods could
arise, such as mad-cow disease, which could give rise to claims or allegations. Reports in the
media of instances of food-borne illnesses could, if highly publicized, negatively affect our
industry overall and us, regardless of whether we were responsible for the spread of the illness.
Furthermore, other illnesses, such as hand, foot and mouth disease or avian influenza, could
adversely affect the supply of some of our ingredients and significantly increase our costs,
thereby impacting our restaurant sales, forcing the closure of some of our restaurants and
conceivably having significant adverse effects on our results of operations.
We also face risks related to health epidemics. Past occurrences of epidemics or
pandemics, depending on their scale of occurrence, have caused different degrees of damage
to the national and local economies in the PRC. In June 2009, the World Health Organization
declared the outbreak of H1N1 influenza to be a pandemic. In April 2013, there were outbreaks
of highly pathogenic avian flu caused by the H7N9 virus in certain parts of the PRC. In
December 2019, COVID-19 was first reported and was subsequently declared a pandemic by
the World Health Organization in March 2020. The catering industry in Mainland China has
been significantly affected by the COVID-19 outbreak and it forced the temporary closures of
many restaurants from early 2020 to 2022. Our results of operations were also significantly
affected by the COVID-19 pandemic and the relevant restrictive measures imposed by the
government in 2022. In recent years, there have also been seasonal outbreaks of the influenza
A virus worldwide which is prevalent during winter season. An outbreak of any epidemics or
pandemics in the PRC, especially in the areas where we have restaurants, may result in
temporary closures of our restaurants, travel restrictions or the sickness or death of key
personnel and our customers. Any of the above may cause material disruptions to our
operations, which in turn may materially and adversely affect our financial condition and
results of operations.
Since August 2018, there has been an outbreak of African swine fever (“ ASF”) in several
provinces in the PRC. ASF is not a human health threat but it is a dreadful disease in pigs and
can cause massive deaths of pigs in a short period of time. As a result of the ASF, the PRC has
slaughtered infected pigs and prohibited the export of pork from certain provinces, which
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affected our supply of fresh pork. To diversify our supply of pork, we have also been using pork
sourced from suppliers in other countries, such as Spain, Brazil and Germany. However, if
there is a prolonged or recurrence of shortage of fresh pork supply from the PRC, we cannot
guarantee that alternative sources of supply could continue to supply fresh pork to us at a
reasonable price; and if we could not shift such cost burden to our customers, we may
experience material and adverse impact on our business operation and financial performance.
The recurrence of epidemics and diseases like ASF may cause severe disruption to our supply
and we cannot guarantee that we will be able to find similar supplies at similar prices within
a reasonable time, which in turn may materially and adversely affect our business and results
of operations.
Macro-economic factors have had and may continue to have a material and adverse effect
upon our business, financial condition and results of operations.
The catering industry is affected by macro-economic factors, including changes in
international, national, regional and local economic conditions, employment levels and
consumer spending patterns. In particular, most of our restaurants are located in Mainland
China and accordingly, our results of operations are closely affected by the macro-economic
conditions in Mainland China. Any deterioration of the Chinese economy, decrease in
disposable consumer income, fear of recession and decreases in consumer confidence may lead
to a reduction of customer traffic and average spending per guest at our restaurants. These
macro-economic factors could materially and adversely affect our financial condition and
results of operations.
Moreover, the occurrence of a sovereign debt crisis, banking crisis or other disruptions in
the global financial markets that could impact the availability of credit generally may have a
material and adverse impact on financings available to us. Renewed turmoil affecting the
financial markets, banking systems or currency exchange rates may significantly restrict our
ability to obtain financing from the capital markets or from financial institutions on
commercially reasonable terms, or at all, which could materially and adversely affect our
business, financial condition and results of operations.
The increasing awareness of environmental, social and governance issues may lead to the
adoption of more stringent laws and regulations and increase our compliance costs.
With the rising awareness of environmental, social and governance (“ ESG”) issues,
including with respect to food and packaging waste, greenhouse gas emissions and
environmental protection, any revisions to laws and regulations may affect our business
operations. Accordingly, we may need to devote more effort and resources to ensure our
compliance with such laws or regulations. We have adopted a series of measures aiming to
ensure our compliance with the ESG-related laws and regulations applicable to us, as described
in “Business – Environmental Sustainability and Social Responsibility.” During the Track
Record Period, we incurred compliance costs in connection with applicable environmental
rules and regulations of RMB8.8 million, RMB13.6 million and RMB11.5 million in 2022,
2023 and 2024, respectively. Costs incurred during the Track Record Period in connection with
RISK FACTORS
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our environmental compliance efforts primarily included installation and maintenance of
exhaust duct system and purchase of eco-friendly packaging materials at our restaurants. We
cannot assure you that these risk management measures can effectively mitigate the relevant
risks and help us to constantly maintain compliance under relevant laws and regulations.
Revisions to existing ESG-related laws and regulations or the promulgation of new ESG-
related laws and regulations may increase our compliance costs, and if we fail to comply with
such ESG-related laws and regulations, our business and financial performance may be
materially and adversely affected.
RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS WHERE WE
OPERATE
The economic, political and social conditions in the jurisdictions where we operate, as well
as government policies, laws and regulations, could affect our business, financial
conditions and results of operations.
Substantially all our business operations are in Mainland China and substantially all our
revenue is derived from our operations in Mainland China. Accordingly, our results of
operations and prospects are, to a significant degree, subject to economic, political and legal
developments in Mainland China. The PRC government regulates the economy and industries
by imposing industry-related policies and regulating the macro economy in the PRC through
fiscal and monetary policies. Our performance is affected by Mainland China’s economy,
which may be influenced by the industry-related policies and other relevant regulations
promulgated by the Chinese government. We cannot predict all the risks that we face as a result
of the current economic and regulatory developments and many of these risks are beyond our
control. All such factors may materially and adversely affect our business, results of operations
as well as our financial performance.
PRC regulations of loans and direct investment by offshore holding companies to PRC
entities may delay or prevent us from using the proceeds of the Global Offering to make
loans or additional capital contributions to our PRC subsidiaries.
In utilizing the proceeds from the Global Offering or any further offering, as an offshore
holding company of our PRC subsidiaries, we may make loans to our PRC subsidiaries, or we
may make additional capital contributions to our PRC subsidiaries. Any loans provided by us
to our PRC subsidiaries are subject to PRC regulations. For example, loans by us to our PRC
subsidiaries in Mainland China to finance their activities cannot exceed statutory limits and
must be registered or filed on record. We may also decide to finance our PRC subsidiaries
through capital contributions. These capital contributions must be filed with the local
counterpart of the MOFCOM. We cannot assure you that we will be able to accomplish these
government registrations or filing procedures on a timely basis, if at all, with respect to future
loans or capital contributions by us to our subsidiaries or any of their respective subsidiaries.
If we fail to receive such registrations or approvals or fail to complete such filing procedures,
RISK FACTORS
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our ability to use the proceeds of the Global Offering and to capitalize our operations in
Mainland China may be negatively affected, which could adversely and materially affect our
liquidity and our ability to fund and expand our business.
We rely on dividends paid by our subsidiaries for our cash needs, and any limitation on
the ability of our subsidiaries to make payments to us could have a material and adverse
effect on our ability to conduct our business.
We conduct all our business through our consolidated subsidiaries incorporated in the
PRC. We rely on dividends paid by these consolidated subsidiaries for our cash needs,
including the funds necessary to pay any dividends and other cash distributions to our
Shareholders, to service any debt we may incur and to pay our operating expenses. The
payment of dividends by entities established in the PRC is subject to limitations. Regulations
in the PRC currently permit payment of dividends only out of accumulated profits as
determined in accordance with accounting standards and regulations in the PRC. Each of our
PRC subsidiaries is also required to set aside at least 10% of its after-tax profit based on PRC
laws and regulations each year to its general reserves or statutory capital reserve fund until the
aggregate amount of such reserves reaches 50% of its respective registered capital. Our
statutory reserves are not distributable as loans, advances or cash dividends. We anticipate that
in the foreseeable future our PRC subsidiaries will need to continue to set aside 10% of their
respective after-tax profits to their statutory reserves. Furthermore, if any of our subsidiaries
incurs debt on its own behalf in the future, the instruments governing the debt may restrict its
ability to pay dividends or make other distributions to us. Any limitations on the ability of our
subsidiaries to transfer funds to us could materially and adversely limit our ability to grow,
make investments or acquisitions that could be beneficial to our business, pay dividends and
otherwise fund and conduct our business.
In addition, under the EIT Law, the Regulation on the Implementation of the Enterprise
Income Tax Law of the PRC (ૢԷ), or Notice 112,
which was issued on January 29, 2008 and amended on February 29, 2008, the Arrangement
between the Mainland of China and Hong Kong Special Administrative Region on the
Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on
Income (τર(਷೼Ռ[2006]
ୋ884໮)) (the “ Double Tax Avoidance Arrangement ”), which became effective on
December 8, 2006, and the Announcement of the State Administration of Taxation on Issues
Concerning “Beneficial Owners” in Tax Treaties (ʕ“Ϟ
ɛ”ʮѓ) (the “ Announcement 9 ”), which became effective on April 1, 2018,
dividends from our PRC subsidiaries paid to us through our indirectly wholly-owned
subsidiary incorporated in Hong Kong SAR, which holds our PRC subsidiaries, may be subject
to a withholding tax at a rate of 10%, or at a rate of 5% if such Hong Kong subsidiary is
considered as a “beneficial owner” that is generally engaged in substantial business activities
and entitled to treaty benefits under the Double Tax Avoidance Arrangement. According to the
Announcement 9, the PRC tax authorities must evaluate whether an applicant qualifies as a
“beneficial owner” on a case-by-case basis. We are actively monitoring the withholding tax and
are evaluating appropriate organizational changes to minimize the corresponding tax impact.
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Dividends payable by us to our foreign investors and gains on the sale of our Shares may
become subject to withholding taxes under the PRC tax laws.
Under the EIT Law and EIT Implementation Rules, our foreign corporate Shareholders
may be subject to a 10% income tax upon any gains realized from the transfer of their Shares
and dividend distributable to such foreign corporate Shareholders, if such income is regarded
as income from “sources within the PRC.” According to the EIT Implementation Rules,
whether income generated from transferring equity investments is to be regarded as sources
within the PRC or from foreign territory shall depend upon the locations in which the
enterprises accepting the equity investment are located. However, it is unclear whether income
received by our Shareholders will be deemed to be income from sources within the PRC and
whether there will be any exemption or reduction in taxation for our foreign corporate
Shareholders due to the promulgation of the EIT Law. If our foreign corporate Shareholders are
required to pay PRC income tax on the transfers of our Shares that they hold or on the gains
on the sale of our Shares by them, the value of our foreign corporate Shareholders’ investments
in our Shares may be materially and adversely affected.
We may be classified as a “resident enterprise” for PRC enterprise income tax purposes,
which could result in unfavorable tax consequences to us and our non-PRC Shareholders.
The EIT Law provides that enterprises established outside the PRC whose “de facto
management bodies” are located in the PRC are considered “resident enterprises” and are
generally subject to the uniform 25% enterprise income tax rate on their worldwide income.
In addition, Issues about the Determination of Chinese-controlled Enterprises Registered
Abroad as Resident Enterprises on the Basis of Their Body of Actual Management (೼

਷೼೯[2009]82 ໮) issued by the State Administration of Taxation on April 22, 2009 regarding
the standards used to classify certain Chinese-invested enterprises controlled by Chinese
enterprises or Chinese group enterprises and established outside the PRC as “resident
enterprises” clarified that dividends and other income paid by such “resident enterprises” will
be considered to be PRC source income, subject to PRC withholding tax, currently at a rate of
10%, when recognized by non-PRC enterprise shareholders. This circular also subjects such
“resident enterprises” to various reporting requirements with the PRC tax authorities. Under
the implementation regulations to the enterprise income tax, a “de facto management body” is
defined as a body that has material and overall management and control over the manufacturing
and business operations, personnel and human resources, finances and properties of an
enterprise. In addition, the circular mentioned above sets out criteria for determining whether
“de facto management bodies” are located in the PRC for overseas incorporated, domestically
controlled enterprises. However, as this circular only applies to enterprises established outside
the PRC that are controlled by PRC enterprises or groups of PRC enterprises, it remains
unclear how the tax authorities will determine the location of “de facto management bodies”
for overseas incorporated enterprises that are controlled by individual PRC residents like us
and some of our subsidiaries. Therefore, although substantially all our management is currently
located in the PRC, it remains unclear whether the PRC tax authorities would require or permit
our overseas registered entities to be treated as PRC resident enterprises. We do not currently
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consider us to be a PRC resident enterprise. However, if the PRC tax authorities disagree with
our assessment and determine that we are a “resident enterprise,” we may be subject to
enterprise income tax at a rate of 25% on our worldwide income and dividends paid by us to
our non-PRC Shareholders as well as capital gains recognized by them with respect to the sale
of our Shares may be subject to a PRC withholding tax. This will have an impact on our
effective tax rate, a material and adverse effect on our net income and results of operations, and
may require us to withhold tax on our non-PRC Shareholders.
Certain judgments obtained against us by our shareholders may be difficult to enforce.
We are an exempted company incorporated in the Cayman Islands, and all of our assets
and subsidiaries are located in the PRC. The majority of our Directors, Supervisors and senior
management reside within the PRC. Judgments rendered by Hong Kong SAR courts may be
recognized and enforced in the PRC if the requirements set forth by the Arrangement on
Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by
Courts of Mainland and of the Hong Kong Special Administrative Region Pursuant to
Consensual Jurisdiction (΁кӔ
τર) are met. Nonetheless, it may be difficult for you to effect service of process within
Hong Kong SAR upon us or these persons, or to bring an action in Hong Kong SAR against
us or against these individuals in the event that you believe that your rights have been infringed
under the applicable securities laws or otherwise. In addition, it may be difficult for you to
bring an original action against us or our PRC resident officers and directors in a PRC court
based on the liability provisions of non-PRC securities laws. Even if you are successful in
bringing an action of this kind, the laws of the Cayman Islands and of regions where we operate
may render it difficult for you to enforce a judgment against our assets or the assets of our
Directors and officers.
Although we will be subject to the Listing Rules and the Codes on Takeovers and Mergers
and Share Repurchases of Hong Kong SAR upon the listing of our Shares on the Stock
Exchange, the holders of the Shares will not be able to bring actions on the basis of violations
of the Listing Rules and must rely on the Stock Exchange to enforce its rules. The Listing Rules
and the Codes on Takeovers and Mergers and Share Repurchases of Hong Kong SAR do not
have the force of law in Hong Kong SAR.
Fluctuations in the value of RMB and the regulations over foreign currency conversion
may adversely affect our business and results of operations and our ability to remit
dividends.
Substantially all our revenue and expenditures are denominated in RMB, while the net
proceeds from the Global Offering and any dividends we pay on our Shares will be in Hong
Kong dollars. Fluctuations in the exchange rates between the RMB and the Hong Kong dollars
or U.S. dollars will affect the relative purchasing power in RMB terms. Fluctuations in the
exchange rates may also cause us to incur foreign exchange losses and affect the relative value
of any dividend distributed by us. Currently, we have not entered into any hedging transactions
to mitigate our exposure to foreign exchange risk.
RISK FACTORS
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Movements in RMB exchange rates are affected by, among other things, any further
development of political and economic conditions and the PRC’s foreign exchange regime and
policy. PBOC regularly intervenes in the foreign exchange market to limit fluctuations in RMB
exchange rates and achieve certain exchange rate targets and policy goals. In the fourth quarter
of 2016, the RMB had depreciated significantly in the backdrop of a surging U.S. dollars and
persistent capital outflows of the PRC. This depreciation halted in 2017, and the RMB
appreciated approximately 7% against the U.S. dollars during this one-year period. Starting
from the beginning of 2019, the RMB has depreciated significantly against the U.S. dollars
again. In early August 2019, the PBOC set the RMB’s daily reference rate at RMB7.0039 to
US$1.00, the first time that the exchange rate of RMB to U.S. dollars exceeded 7.0 since 2008.
We cannot assure you that RMB will not appreciate or depreciate significantly in value against
Hong Kong dollars or U.S. dollars in the future.
In addition, conversion and remittance of foreign currencies are subject to PRC foreign
exchange regulations. It cannot be guaranteed that under a certain exchange rate, we shall have
sufficient foreign exchange to meet our foreign exchange needs. Under the PRC’s current
foreign exchange control system, foreign exchange transactions under the current account
conducted by us do not require advance approval from SAFE, but we are required to present
relevant documentary evidence of such transactions and conduct such transactions at
designated foreign exchange banks within the PRC that have the licenses to carry out foreign
exchange business. Foreign exchange transactions under the capital account, however, must be
approved by or registered with SAFE or its local branch. The PRC government may also at its
discretion restrict access in the future to foreign currencies for current account transactions.
Any insufficiency of foreign exchange may restrict our ability to obtain sufficient foreign
exchange for dividend payments to Shareholders or satisfy any other foreign exchange
obligation. If we fail to obtain approvals from the SAFE to convert RMB into any foreign
exchange, our potential offshore capital expenditure plans and even our business, may be
materially and adversely affected.
Failure by our Shareholders or beneficial owners who are PRC residents to make any
required applications and filings pursuant to regulations relating to offshore investment
activities by PRC residents may prevent us from being able to distribute profits or inject
capital and could expose us and our PRC resident Shareholders to liability under the PRC
laws.
The SAFE Circular No. 37 which was promulgated by SAFE and became effective on July
4, 2014, requires a PRC individual resident (“ PRC Resident ”) to register with the local SAFE
branch before he or she contributes assets or equity interests in an overseas special purpose
vehicle (“ Offshore SPV ”) that is directly established or controlled by the PRC Resident for the
purpose of conducting investment or financing. Following the initial registration, the PRC
Resident is also required to register with the local SAFE branch for any major change in respect
of the Offshore SPV , including, among other things, any major change of a PRC Resident
shareholder, name or term of operation of the Offshore SPV , or any increase or reduction of the
Offshore SPV’s registered capital, share transfer or swap, merger or division. Failure to comply
with the registration procedures of SAFE Circular No. 37 may result in penalties and sanctions,
including the imposition of restrictions on the ability of the Offshore SPV’s Chinese subsidiary
to distribute dividends to its overseas parent.
RISK FACTORS
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RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our Shares and an active trading market may
not develop.
Prior to the Global Offering, there has not been a public market for our Shares. An active
public market may not develop or be sustained after the Global Offering. The initial Offer Price
for our Shares was the result of, and the Offer Price will be the result of, negotiations among
us and the Joint Global Coordinators on behalf of the Underwriters and may not be indicative
of prices that will prevail in the trading market after the Global Offering.
We have applied to list and deal in our Shares on the Stock Exchange. However, even if
approved, being listed on the Stock Exchange does not guarantee that an active trading market
for our Shares will develop or be sustained. If an active market for our Shares does not develop
after the Global Offering, the market price and liquidity of our Shares may be adversely
affected. As a result, you may not be able to resell your Shares at prices equal to or greater than
the price paid for the Shares in the Global Offering.
The market price and trading volume of our Shares may be volatile, which could result
in substantial losses for investors purchasing Shares in the Global Offering. The market price
of our Shares may fluctuate significantly and rapidly as a result of a variety of factors, many
of which are beyond our control, including:
 actual and anticipated variations in our results of operations;
 changes in securities analysts’ estimates or market perception of our financial
performance;
 announcement by us of significant acquisitions, dispositions, strategic alliances or
joint ventures;
 recruitment or loss of key personnel by us or our competitors;
 market developments affecting us or the catering industry;
 the operating and stock price performance of other companies, other industries and
other events or factors beyond our control;
 fluctuations in trading volumes or the release of lock-up or other transfer restrictions
on our outstanding Shares or sales of additional Shares by us; and
 general economic, political and stock market conditions in Mainland China, Hong
Kong SAR and elsewhere in the world.
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Moreover, in recent years, stock markets in general have experienced significant price and
volume fluctuations, some of which have been unrelated or disproportionate to the operating
performance of the listed companies. These broad market and industry fluctuations may
adversely affect the market price of our Shares.
Purchasers of Shares will experience immediate dilution and may experience further
dilution if we issue additional Shares in the future.
The Offer Price is expected to be higher than the net tangible book value per Share prior
to the Global Offering. Therefore, you will experience an immediate dilution in pro forma net
tangible book value per Share. In addition, we may issue additional Shares or equity-related
securities. If we issue additional Shares or equity-related securities in the future, the percentage
ownership of our existing Shareholders may be diluted. In addition, such new securities may
have preferred rights, options or pre-emptive rights that make them more valuable than or
senior to the Shares.
There can be no assurance if and when we will pay dividends in the future. Dividends
distributed in the past may not be indicative of our dividend payment in the future.
Distribution of dividends shall be formulated by our Board of Directors at their discretion
and may be subject to Shareholders’ approval. A decision to declare or to pay any dividends
and the amount of any dividends will depend on various factors, including but not limited to
our results of operations, cash flows and financial conditions, operating and capital expenditure
requirements, distributable profits as determined under IFRS, our Articles of Association,
market conditions, our strategic plans and prospects for business development, contractual
limits and obligations, payment of dividends to us by our operating subsidiaries, taxation, and
any other factors determined by our Board of Directors from time to time to be relevant to the
declaration of dividend payments. As a result, our historical dividend distributions are not
indicative of our future dividend distribution policy. Save for the intended declaration of the
Special Dividend as disclosed in the sections headed “Summary – Dividends” and “Financial
Information – Dividends,” there can be no assurance whether, when and in what form we will
pay dividends in the future or that we will pay dividends in accordance with our dividend
policy. See “Financial Information – Dividends” for more details of our dividend policy.
Our Controlling Shareholders may exert substantial influence over our operation and
may not act in the best interests of our independent Shareholders.
Immediately following the completion of the Global Offering (assuming the Over-allotment
Option is not exercised, our Controlling Shareholders will control approximately 54.29% of our
issued share capital. Therefore, they will be able to exercise significant influence over all matters
requiring Shareholders’ approval, including the election of Directors and the approval of
significant corporate transactions. They will also have veto power with respect to any shareholder
action or approval requiring a majority vote except where it is required by relevant rules to
abstain from voting. Such concentration of ownership also may have the effect of delaying,
preventing or deterring a change in control of us that would otherwise benefit our Shareholders.
RISK FACTORS
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The interests of the Controlling Shareholders may not always coincide with us or your best
interests. If the interests of the Controlling Shareholders conflict with the interests of us or our
other Shareholders, or if the Controlling Shareholders choose to cause our business to pursue
strategic objectives that conflict with the interests of us or other Shareholders, we or those other
Shareholders, including you, may be disadvantaged as a result.
We were incorporated under the laws of the Cayman Islands and these laws may provide
different protections to minority Shareholders than the laws of Hong Kong SAR.
Our corporate affairs are governed by the Memorandum and the Articles and by the
Companies Act and laws of the Cayman Islands. The laws of the Cayman Islands relating to
the protection of the interest of minority Shareholders may differ in some respects from those
established under statutes or judicial precedent in existence in Hong Kong SAR. Such
differences could mean that the minority Shareholders may have different protections than they
could have under the laws of Hong Kong SAR.
Sale, or perceived sale, of substantial amounts of our Shares in the public market could
adversely affect the prevailing market price of our Shares.
Save for existing Shareholders who are subject to certain lock-up periods, our existing
Shareholders may dispose of our Shares that they may own now or in the future. Sales of
substantial amounts of our Shares in the public market, or the perception that these sales may
occur, could materially and adversely affect the prevailing market price of our Shares.
Statistics in this prospectus provided by CIC are subject to assumptions and
methodologies set forth in the “Industry Overview.”
Facts and statistics in this prospectus relating to the market and the industry we operate,
including those relating to the economy and the global catering industry, are derived from an
industry report prepared by CIC and commissioned by us, as well as from various official
government sources. On the other hand, information and statistics from official government
sources have not been independently verified by us, the Joint Sponsors, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,
the Underwriters or any other party involved in the Global Offering and no representation is
given as to its accuracy and completeness. Investors should not place undue reliance on such
facts or statistics.
Forward-looking statements contained in this prospectus are subject to risks and
uncertainties.
This prospectus contains certain statements and information that are forward-looking and
uses forward-looking terminology such as “anticipate,” “believe,” “could,” “going forward,”
“intend,” “plan,” “project,” “seek,” “expect,” “may,” “ought to,” “should,” “would” or “will”
and similar expressions. Y ou are cautioned that reliance on any forward-looking statement
involves risks and uncertainties and that any or all of those assumptions could prove to be
RISK FACTORS
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inaccurate and as a result, the forward-looking statements based on those assumptions could
also be incorrect. In light of these and other risks and uncertainties, the inclusion of
forward-looking statements in this prospectus should not be regarded as representations or
warranties by us that our plans and objectives will be achieved and these forward-looking
statements should be considered in light of various important factors, including those set forth
in this section. Subject to the requirements of the Listing Rules, we do not intend publicly to
update or otherwise revise the forward-looking statements in this prospectus, whether as a
result of new information, future events or otherwise. Accordingly, you should not place undue
reliance on any forward-looking information. All forward-looking statements in this prospectus
are qualified by reference to this cautionary statement.
Y ou should read the entire prospectus carefully and we strongly caution you not to place
any reliance on any information contained in press articles and/or other media regarding
us, our business, our industry and/or the Global Offering.
There may have been prior to the publication of this prospectus, and there may be
subsequent to the date of this prospectus but prior to the completion of the Global Offering,
press and/or media regarding us, our business, our industry and/or the Global Offering. None
of us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters or any other person involved in the
Global Offering has authorized the disclosure of information about the Global Offering in any
press or media and none of these parties accepts any responsibility for the accuracy or
completeness of any such information or the fairness or appropriateness of any forecasts, views
or opinions expressed by the press and/or other media regarding our Shares, the Global
Offering, our business, our industry or us. We make no representation as to the appropriateness,
accuracy, completeness or reliability of any such information, forecasts, views or opinions
expressed in any such publications. To the extent that such statements, forecasts, views or
opinions are inconsistent or conflict with the information contained in this prospectus, we
disclaim them. Accordingly, you should make your investment decisions on the basis of the
information contained in this prospectus only and should not rely on any other information.
RISK FACTORS
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In preparation for the Global Offering, our Company has sought the following waivers
from strict compliance with the relevant provisions of the Listing Rules.
MANAGEMENT PRESENCE IN HONG KONG SAR
Pursuant to Rule 8.12 of the Listing Rules, we must have sufficient management presence
in Hong Kong SAR. This normally means that at least two of the executive Directors must be
ordinarily resident in Hong Kong SAR. Since all of our Company’s business operations and
management are located in the PRC, there is no need to appoint executive Directors based in
Hong Kong SAR. As all of our executive Directors currently reside in the PRC, we do not and,
for the foreseeable future, will not have sufficient management presence in Hong Kong SAR
for the purpose of satisfying the requirement under Rule 8.12 of the Listing Rules.
Accordingly, we have applied for, and the Stock Exchange has granted, a waiver from
strict compliance with the requirements under Rule 8.12 of the Listing Rules. In order to
maintain effective communication with the Stock Exchange, we will put in place the following
measures in order to ensure that regular communication is maintained between the Stock
Exchange and us:
(a) we have appointed two authorized representatives pursuant to Rule 3.05 of the
Listing Rules, who will act as our principal channel of communication with the
Stock Exchange. The two authorized representatives are Mr. Wang, our executive
Director and Ms. Lai Siu Kuen (ࢇ“() Ms. Lai ”), one of our joint company
secretaries. Both of the authorized representatives: (i) are, and will be, readily
contactable by telephone, facsimile and/or email to deal promptly with any enquiries
which may be made by the Stock Exchange; (ii) have the means to contact all the
Directors (including the independent non-executive Directors) promptly at all times,
as and when the Stock Exchange wishes to contact the Directors on any matters; and
(iii) are to act at all times as the principal channel of communication between the
Stock Exchange and us;
(b) each of the authorized representatives has means to contact all Directors (including
the non-executive Directors and the independent non-executive Directors) promptly
at all times as and when the Stock Exchange wishes to contact our Directors on any
matters. We have implemented a policy whereby:
(i) each Director has provided his/her mobile phone number, office phone number,
email address and facsimile number to the authorized representatives;
(ii) each Director has provided his/her phone numbers or means of communication
to the authorized representatives when he/she is travelling; and
(iii) each Director has provided his/her mobile phone number, office phone number,
email address and facsimile number to the Stock Exchange;
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(c) in compliance with Rule 3A.19 of the Listing Rules, we have appointed Altus
Capital Limited as our compliance adviser who will act as an additional channel of
communication between the Stock Exchange and our Company for the period
commencing on the Listing Date and ending on the date that our Company publishes
our financial results for the first full financial year after the Listing Date pursuant
to Rule 13.46 of the Listing Rules;
(d) any meeting between the Stock Exchange and our Directors may be arranged
through the authorized representatives or the Company’s compliance adviser, or
directly with the Directors within a reasonable time frame;
(e) our Company will inform the Stock Exchange promptly in respect of any change in
our Company’s authorized representatives, the Directors, and/or the compliance
adviser of the Company in accordance with the Listing Rules;
(f) our Directors who are not ordinarily resident in Hong Kong SAR possess or are able
to apply for valid travel documents to visit Hong Kong SAR for business purposes
and would be able to come to Hong Kong SAR and meet with the Stock Exchange
upon reasonable notice; and
(g) we will retain a Hong Kong legal adviser to advise us on the application of the
Listing Rules and other applicable Hong Kong laws and regulations after our
Listing.
JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, our company secretary must be an
individual who by virtue of his or her academic or professional qualifications or relevant
experience is, in the opinion of the Stock Exchange, capable of discharging the functions of
company secretary. The Stock Exchange considers the following academic or professional
qualifications to be acceptable:
(a) a member of Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong); or
(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
We have appointed Ms. Lu Juan (ࢇas one of the joint company secretaries.
Ms. Lu Juan has extensive knowledge about our business operations and corporate culture and
has extensive experience in matters concerning the Board and our corporate governance. Our
Directors consider that it would be in the best interests of our Company and the corporate
governance of our Group to have Ms. Lu Juan as the Company’s joint company secretary as
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she possesses day-to-day knowledge of our Group’s affairs, and is familiar with our Group’s
business operations and management. She has been working closely with the management of
the Company since May 2021. For details of Ms. Lu Juan (ࢇs biography, please refer to
the section headed “Directors and Senior Management – Joint Company Secretaries” in this
prospectus. However, Ms. Lu Juan does not possess the specified qualifications strictly
required by Rule 3.28 of the Listing Rules and may not be able to solely fulfill the requirements
as stipulated under Rule 3.28 and Rule 8.17 of the Listing Rules. As a result, we have appointed
Ms. Lai, a fellow of both The Hong Kong Chartered Governance Institute (formerly known as
The Hong Kong Institute of Chartered Secretaries) and The Chartered Governance Institute
(formerly known as The Institute of Chartered Secretaries and Administrators), who meets the
requirements under Rule 3.28 of the Listing Rules, to act as the other joint company secretary
and to provide assistance to Ms. Lu Juan for an initial period of three years from the Listing
Date so as to fully comply with the requirements set forth under Rules 3.28 and 8.17 of the
Listing Rules.
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with the requirements of Rules 3.28 and 8.17 of the Listing Rules, for an initial period of three
years from the Listing Date, on the condition that Ms. Lai is engaged as a joint company
secretary and provides assistance to Ms. Lu Juan during this period. The waiver would be
immediately revoked if: (a) Ms. Lai ceased to provide assistance to Ms. Lu Juan as the joint
company secretary during the three years following the Listing; or (b) if there are material
breaches to the Listing Rules by our Company. In addition, Ms. Lu Juan will comply with the
annual professional training requirement under Rule 3.29 of the Listing Rules and will enhance
her knowledge of the Listing Rules during the three-year period from the Listing Date. Our
Company will further ensure that Ms. Lu Juan has access to the relevant training and support
that would enhance her understanding of the Listing Rules and the duties of a company
secretary of an issuer listed on the Stock Exchange. Before the expiry of the three-year period,
we will conduct a further evaluation of the qualification and experience of Ms. Lu Juan to
determine whether the requirements as stipulated in Rules 3.28 and 8.17 of the Listing Rules
can be satisfied and will demonstrate to the Stock Exchange’s satisfaction on the experience
of Ms. Lu Juan before the expiry of the three-year period. We and Ms. Lu Juan would then
endeavor to demonstrate to the Stock Exchange’s satisfaction that Ms. Lu Juan, having had the
benefit of Ms. Lai’s assistance for three years, would have acquired the relevant experience
within the meaning of Note 2 to Rule 3.28 of the Listing Rules and there is no need to further
apply for a waiver.
CONSENT IN RELATION TO ALLOCATION OF OFFER SHARES TO CONNECTED
CLIENT OF DISTRIBUTOR
Paragraph 5(1) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to “connected clients” of the overall coordinator(s), any syndicate member(s) (other
than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s))
(collectively, the “Distributors”, and each a “Distributor”), without the prior written consent of
the Stock Exchange.
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Paragraph 13(7) of the Appendix F1 to the Listing Rules states that “connected client” in
relation to an exchange participant means any client which is a member of the same group of
companies as such exchange participant.
As further described in the section headed “Cornerstone Investors” in this prospectus,
Anji Liangshan Rural Revitalization Equity Investment Partnership (Limited Partnership) ( τ
ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Anji Liangshan ”) has entered into a
cornerstone investment agreement with, among others, the Company and the Joint Sponsors to
subscribe for the Offer Shares and will hold the Offer Shares on a discretionary basis for and
on behalf of independent third parties under the International Offering.
Zhaoken Capital Management (Beijing) Co., Ltd. (ኤ༟͉၍ଣ(̏ԯ)ʮ̡)
(“Zhaoken Capital ”) is one of the general partners of Anji Liangshan with 0.1% partnership
interest, and is the sole executive partner of Anji Liangshan. Zhaoken Capital is an indirect
wholly owned subsidiary of China Merchants Group Limited (ʮ̡)( “CMG”),
which is ultimately wholly-owned by the State Council of the People’s Republic of China ( ʕ
ശɛ͏΍ձ਷਷ਕ৫). CMB International Capital Limited (“ CMBI ”) is an indirect wholly-
owned subsidiary of China Merchants Bank Co., Ltd. (ʮ̡), a company
listed on the Shanghai Stock Exchange (stock code: 600036) and the Stock Exchange (stock
code: 3968), which is directly and indirectly owned as to approximately 29% by CMG.
Therefore, Anji Liangshan and CMBI are members of the same group of companies, and
Anji Liangshan is a connected client of CMBI and the participation of Anji Liangshan as a
cornerstone investor in the Global Offering would constitute an allocation to a connected client
of a distributor.
As of the Latest Practicable Date, general partners of Anji Liangshan are (i) Zhaoken
Capital, which holds 0.1% of its partnership interest, and (ii) Hangzhou Senmiao Enterprise
Management Consulting Partnership (Limited Partnership) (ψಌ↿Άุ၍ଣፔ༔ΥྫΆุ
(Υྫ)) (“ Hangzhou Senmiao ”), a limited partnership established under the laws of the
PRC which holds 0.9% of its partnership interest. Hangzhou Senmiao is owed by Guochuang
Zhongding (Shanghai) Equity Investment Management Co., Ltd. ( ਷௴ʕཻ(ɪऎ)ᛆҳ༟၍
ʮ̡)( “ Guochuang Zhongding ”) (holding 10% interest of Hangzhou Senmiao), Mr.
Gu Qi (holding 49.50% interest of Hangzhou Senmiao), and Mr. Zhang Wei (holding 40.50%
interest of Hangzhou Senmiao), while Guochuang Zhongding is ultimately held by independent
third parties. Zhaoken Capital is the sole executive partner of Anji Liangshan and is an indirect
wholly owned subsidiary of China Merchants Group Limited (ʮ̡), which is
ultimately wholly-owned by the State Council of the People’s Republic of China ( ʕശɛ͏΍
ձ਷਷ਕ৫). Anji Liangshan’s largest limited partner is Anji County Guofeng Industrial Fund
Management Co., Ltd. (ʮ̡), a limited liability company
incorporated in the PRC, which holds 45% of the partnership interest and is ultimately wholly
owned by Anji County Finance Bureau. Zhejiang Rural Revitalization Investment Fund Co.,
Ltd (ʮ̡), a limited liability company incorporated in the PRC,
is the second largest limited partner of Anji Liangshan which holds 44% of the partnership
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interest and is ultimately wholly owned by Zhejiang Provincial Department of Finance. The
remaining 11% partnership interest are held by 6 limited partners who are Independent Third
Parties, each holding less than 5% partnership interest of Anji Liangshan.
We have applied to the Stock Exchange for, and the Stock Exchange has granted, its
consent pursuant to paragraph 5(1) of Appendix F1 to the Listing Rules for Anji Liangshan to
participate as a cornerstone investor in the Global Offering subject to the following conditions:
(a) the Offer Shares to be allocated to Anji Liangshan, to the best of the Overall
Coordinators’ knowledge and belief, will be held on a discretionary basis on behalf
of independent third parties;
(b) no preferential treatment has been, nor will be, given to Anji Liangshan by virtue of
its relationship with CMBI (other than the assured entitlement under a cornerstone
investment agreement for Anji Liangshan);
(c) CMBI has not participated in the decision-making process or relevant discussions as
to the selection of Anji Liangshan as a cornerstone investor and the allocation of
securities to it;
(d) each of our Company, the Overall Coordinators, CMBI and Anji Liangshan has
provided the Stock Exchange a written confirmation in accordance with Chapter
4.15 of the Guide; and
(e) details of the allocation have been disclosed in this prospectus and will be disclosed
in the allotment results announcement of our Company.
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DIRECTORS’ RESPONSIBILITY STATEMENT
This prospectus, for which the Directors (including any proposed director who is named as
such in this prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, 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 with regard to us. The
Directors, having made all reasonable enquiries, confirm 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 matters the omission of which
would make any statement herein or this prospectus misleading.
THE HONG KONG PUBLIC OFFERING AND THIS PROSPECTUS
This prospectus is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. For applicants under the Hong Kong Public Offering,
this prospectus set out the terms and conditions of the Hong Kong Public Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information contained
and representations made in this prospectus and on the terms and subject to the conditions set
out herein and therein. No person is authorized to give any information in connection with the
Global Offering 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
authorized by our Company, the Selling Shareholder, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Joint Sponsors and
any of the Underwriters, any of their respective directors, agents, employees or advisers or any
other party involved in the Global Offering.
The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the
Overall Coordinators. The Hong Kong Public Offering is fully underwritten by the Hong Kong
Underwriters under the terms and conditions of the Hong Kong Underwriting Agreement and
is subject to us, the Selling Shareholder and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters) agreeing on the Offer Price. The International Offering
is expected to be fully underwritten by the International Underwriters subject to the terms and
conditions of the International Underwriting Agreement, which is expected to be entered into
on or around the Price Determination Date.
Neither the delivery of this prospectus nor any offering, sale or delivery made in
connection with the Shares should, under any circumstances, constitute a representation that
there has been no change or development reasonably likely to involve a change in our 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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PROCEDURES FOR APPLICATION FOR THE HONG KONG OFFER SHARES
The procedures for applying for the Hong Kong Offer Shares are set forth in the section
headed “How to Apply for the Hong Kong Offer Shares” in this prospectus.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
Details of the Structure and Conditions of the Global Offering, including its conditions,
are set forth in the section headed “Structure and Conditions of the Global Offering” in this
prospectus.
OVER-ALLOTMENT OPTION AND STABILIZATION
Details of the arrangements relating to the Over-allotment Option and stabilization are set
forth in the section headed “Structure and Conditions of the Global Offering” in this
prospectus.
RESTRICTIONS ON OFFERS AND SALES OF SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his acquisition of Offer Shares to, confirm that he is aware
of the restrictions on offers of the Offer Shares described in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the general
distribution of this prospectus in any jurisdiction other than in Hong Kong SAR. Accordingly,
this prospectus may not be used for the purposes of, and does not constitute, an offer or
invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not
authorized or to any person to whom it is unlawful to make such an offer or invitation. The
distribution of this prospectus and the offering of the Offer Shares in other jurisdictions are
subject to restrictions and may not be made except as permitted under the applicable securities
laws of such jurisdictions and pursuant to registration with or authorization by the relevant
securities regulatory authorities or an exemption therefrom.
APPLICATION FOR LISTING OF THE SHARES ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the
Shares in issue and to be issued pursuant to the Global Offering (including the Shares which
may be issued pursuant to the exercise of the Over-allotment Option).
No part of our equity or debt securities is listed on or dealt in on any other stock exchange
and no such listing or permission to list is being or proposed to be sought in the near future.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of,
and permission to deal in, the Shares on the Stock Exchange is refused before the expiration
of three weeks from the date of the closing of the application lists, or such longer period (not
exceeding six weeks) as may, within the said three weeks, be notified to the Company by or
on behalf of the Stock Exchange.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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COMMENCEMENT OF DEALINGS IN THE SHARES
Dealings in the Shares on the Stock Exchange are expected to commence on Friday, May
16, 2025. The Shares will be traded in board lots of 400 Shares each. The stock code of the
Shares will be 6831.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares and we
comply 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 Listing Date or any other date as determined by HKSCC. Settlement of transactions
between participants of the Stock Exchange 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 HKSCC
Operational Procedures in effect from time to time.
Investors should seek the advice of their stockbroker or other professional advisers for
details of the settlement arrangement as such arrangements may affect their rights and interests.
All necessary arrangements have been made to enable the Shares to be admitted into CCASS.
PROFESSIONAL TAX ADVICE RECOMMENDED
Y ou should consult your professional advisers if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding or disposing of, or dealing in, the Shares
or exercising any rights attaching to the Shares. We emphasize that none of our Company, the
Selling Shareholder, the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of our or
their respective directors, officers or representatives or any other person involved in the Global
Offering accepts responsibility for any tax effects or liabilities resulting from your
subscription, purchase, holding or disposing of, or dealing in, the Shares or your exercise of
any rights attaching to the Shares.
REGISTER OF MEMBERS AND STAMP DUTY
Our principal register of members will be maintained by our principal share registrar,
Appleby Global Services (Cayman) Limited, in the Cayman Islands, and our Hong Kong
register of members will be maintained by the Hong Kong Share Registrar, Tricor Investor
Services Limited, in Hong Kong SAR. Unless the 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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Dealings in our Shares registered on our Hong Kong register will be subject to Hong
Kong stamp duty. The stamp duty is charged to each of the seller and purchaser at the ad
valorem rate of 0.10% of the consideration for, or (if greater) the value of, the Shares
transferred. In other words, a total of 0.20% is currently payable on a typical sale and purchase
transaction of the Shares. In addition, a fixed duty of HK$5 is charged on each instrument of
transfer (if required).
CSRC APPROV AL AND OTHER RELEV ANT PRC AUTHORITIES APPROV AL
On March 28, 2025, the CSRC has issued a notification on our Company’ completion of
the PRC filing procedures for the listing of our Shares on the Stock Exchange and the Global
Offering. As advised by our PRC Legal Adviser, our Company has completed all necessary
filings with the CSRC in the PRC in relation to the Global Offering and the Listing.
EXCHANGE RATE CONVERSION
Unless otherwise specified, amounts denominated in RMB and US$ have been translated,
for the purpose of illustration only, into Hong Kong dollars in this prospectus at the following
exchange rates: RMB0.9295: HK$1.00 and US$1.00: HK$7.7579.
No representation is made that any amounts in RMB or US$ were or could have been or
could be converted into Hong Kong dollars at such rates or any other exchange rates on such
date or any other date.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables, charts or
elsewhere may not be an arithmetic aggregation of the figures preceding them.
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail, provided that if there is any inconsistency between the Chinese names
of the entities or enterprises established in the PRC mentioned in this prospectus and their
English translations, the Chinese names shall prevail. The English translations of the Chinese
names of such PRC entities or enterprises are provided for identification purposes only.
OTHER
Unless otherwise specified, all references to any shareholdings in our Company following
the completion of the Global Offering assume that the Over-allotment Option is not exercised.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DIRECTORS
Name Residential Address Nationality
Executive Directors
Wang Qinsong (ؒRoom 101, Unit 1, No. 7 Building
Chunxiao Garden, Guihua Cheng
Wen’er Road West
Wenxin Street, Xihu District
Hangzhou, Zhejiang
PRC
Chinese
Y u Liying ( ɲᘆᅂ) Room 101, Unit 3, No. 10 Building
Chunxiao Garden, Guihua Cheng
Wen’er Road West
Wenxin Street, Xihu District
Hangzhou, Zhejiang
PRC
Chinese
Wang Jiawei ( ˮԳਃ) No. 335 Tiyuchang Road
Xiacheng District
Hangzhou, Zhejiang
PRC
Chinese
Non-executive Directors
Lu Changmei (ૠ) Room 101, Unit 1, No. 7 Building
Chunxiao Garden, Guihua Cheng
Wen’er Road West
Wenxin Street, Xihu District
Hangzhou, Zhejiang
PRC
Chinese
Liu Sheng ( ᄎସ) Room 102, No. 1
No. 1299 Lane, Dingxiang Road
Shanghai
PRC
Chinese
Xu Ruijie (ြẘ) Room 101, No. 3
Lane 180, Y uyao Road
Jing’an District
Shanghai
China
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Name Residential Address Nationality
Independent Non-Executive Directors
Shao Xiaodong (؇Room 1202, Unit 2, Building No. 32
Xinzhouhuayuan, Binjiang District
Hangzhou, Zhejiang
PRC
Chinese
Bruno Robert Mercier House 30 Tai Au Mun Village
Clear Water Bay, Sai Kung
Hong Kong SAR
French
Fan Y ongkui (۲Room 703, Unit 2, Building No. 5
Guanhejinting, Binjiang District
Hangzhou, Zhejiang
PRC
Chinese
Further information about the Directors and other senior management members are set out
in the section headed “Directors and Senior Management” in this prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Global Coordinators, the Overall
Coordinators, Sponsor-Overall
Coordinators and Joint Sponsors
(in alphabetical order)
Citigroup Global Markets Asia Limited
50/F Champion Tower
Three Garden Road
Central
Hong Kong SAR
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong SAR
Overall Coordinators
(in alphabetical order)
GF Securities (Hong Kong)
Brokerage Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong SAR
Guoyuan Securities Brokerage
(Hong Kong) Limited
17/F, Three Exchange Square
8 Connaught Place
Central
Hong Kong SAR
Joint Bookrunners, the Capital Market
Intermediaries and Joint Lead
Managers
(in alphabetical order)
Citigroup Global Markets Asia Limited
(in relation to the Hong Kong Public
Offering only)
50/F Champion Tower
Three Garden Road
Central
Hong Kong SAR
Citigroup Global Markets Limited
(in relation to the International
Offering only)
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 7–


--- page 96 ---
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong SAR
(in alphabetical order)
GF Securities (Hong Kong) Brokerage
Limited
27/F, GF Tower
81 Lockhart Road
Wan Chai
Hong Kong SAR
Guoyuan Securities Brokerage
(Hong Kong) Limited
17/F, Three Exchange Square
8 Connaught Place
Central
Hong Kong SAR
(in alphabetical order)
ABCI CAPITAL LIMITED
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong SAR
ABCI SECURITIES COMPANY
LIMITED
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong SAR
Celestial Securities Limited
22/F Manhattan Place, 23 Wang Tai Road
Kowloon Bay, Kowloon
Hong Kong SAR
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 8–


--- page 97 ---
China Galaxy International Securities
(Hong Kong) Co., Ltd
20/F Wing On Centre
111 Connaught Road Central
Hong Kong SAR
CMBC Securities Company Limited
45/F., One Exchange Square
8 Connaught Place
Central
Hong Kong SAR
First Shanghai Securities Limited
19/F, Wing On House
71 Des V oeux Road Central
Hong Kong SAR
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway, Admiralty
Hong Kong SAR
Long Bridge HK Limited
Unit No. 3302
33/F, West Tower Shun Tak Centre
168-200 Connaught Road Central
HKSAR
Morton Securities Limited
1804-05, 18/F, Allied Kajima Building
138 Gloucester Road
Wanchai
Hong Kong SAR
Orient Securities (Hong Kong) Limited
28/F-29/F, 100 Queen’s Road Central
Central
Hong Kong SAR
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–8 9–


--- page 98 ---
Patrons Securities Limited
Unit 3214, 32/F., Cosco Tower
183 Queen’s Road Central,
Sheung Wan
Hong Kong SAR
SDICS International Securities
(Hong Kong) Limited
39/F, One Exchange Square
Central
Hong Kong SAR
Zhongtai International Securities Limited
19 Floor, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong SAR
Legal Advisers to Our Company As to Hong Kong and U.S. laws:
Simpson Thacher & Bartlett
35/F, ICBC Tower
3 Garden Road
Central
Hong Kong SAR
As to PRC laws:
Commerce & Finance Law Offices
12-15th Floor, China World Office 2
No. 1 Jianguomenwai Avenue
Beijing 100004
China
As to PRC cybersecurity and data
compliance matters:
Commerce & Finance Law Offices
12-15th Floor, China World Office 2
No. 1 Jianguomenwai Avenue
Beijing 100004
China
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 0–


--- page 99 ---
As to Cayman Islands laws:
Appleby
Suites 3505-06
35/F, Two Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Legal Adviser to Partners Gourmet As to Hong Kong and U.S. laws:
Fangda Partners
26/F, One Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC laws:
Fangda Partners
24/F, HKRI Centre Two
HKRI Taikoo Hui
288 Shi Men Yi Road
Shanghai
Legal Advisers to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong SAR
As to PRC law:
Tian Yuan Law Firm
5/F, Tower A, Corporate Square
35 Financial Street
Xicheng District
Beijing
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 1–


--- page 100 ---
Auditor and Reporting Accountants KPMG
Certified Public Accountants
8
th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong SAR
Industry Consultant China Insights Consultancy Limited
10F, Block B
Jing’an International Center
88 Puji Road, Jing’an District
Shanghai 200070
China
Receiving Bank CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong SAR
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 2–


--- page 101 ---
Registered Office 71 Fort Street
PO Box 500
George Town
Grand Cayman
KY1-1106
Cayman Islands
Head Office in the PRC No. 1 Lingyin Road
Xihu District
Hangzhou
Zhejiang Province
PRC
Principal Place of Business in
Hong Kong SAR
Room 1918, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong SAR
Company’s Website www.china-greentea.com.cn
(The information on the website does not
form part of this prospectus)
Joint Company Secretaries Ms. Lu Juan (ࢇ)
Room 402, No. 45 Tongbo New Village
Songjiang District
Shanghai
PRC
Ms. Lai Siu Kuen (ࢇ)
FCG HKFCG)
Room 1918, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong SAR
CORPORATE INFORMATION
–9 3–


--- page 102 ---
Authorized Representatives Mr. Wang Qinsong (ؒ)
Room 101, Unit 1, No. 7 Building
Chunxiao Garden, Guihua Cheng
Wen’er Road West
Wenxin Street, Xihu District
Hangzhou, Zhejiang
PRC
Ms. Lai Siu Kuen (ࢇ)
Room 1918, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong SAR
Audit Committee Mr. Fan Y ongkui (Chairman)
Mr. Bruno Robert Mercier
Mr. Shao Xiaodong
Remuneration Committee Mr. Shao Xiaodong (Chairman)
Mr. Wang Qinsong
Mr. Fan Y ongkui
Nomination Committee Mr. Wang Qinsong (Chairman)
Mr. Bruno Robert Mercier
Mr. Shao Xiaodong
The Cayman Islands Principal Share
Registrar and Transfer Office
Appleby Global Services
(Cayman) Limited
71 Fort Street
PO Box 500
George Town
Grand Cayman
KY1-1106
Cayman Islands
Hong Kong Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong SAR
Compliance Adviser Altus Capital Limited
21 Wing Wo Street
Central
Hong Kong SAR
CORPORATE INFORMATION
–9 4–


--- page 103 ---
Principal Banks Bank of Communications Hong Kong
Branch
Wheelock House
20 Pedder Street
Central
Hong Kong SAR
United Rural Cooperative Bank of
Hangzhou, Wushan Branch
221 Xihu Avenue
Shangcheng District
Hangzhou Zhejiang
PRC
Bank of Hangzhou, Haichuangyuan
Branch
998 Wenyi Road West
Y uhang District
Hangzhou Zhejiang
PRC
Agricultural Bank of China, Nanshan
Branch
1/F, Shandong Building
Nanhai Avenue
Shenzhen Guangdong
PRC
China Merchants Bank, Hangzhou
Kejicheng Branch
84 Longyuan Road
Y uhang District
Hangzhou Zhejiang
PRC
CORPORATE INFORMATION
–9 5–


--- page 104 ---
Certain information and statistics presented in this section and elsewhere in this
prospectus relating to the industry in which we operate are derived from the CIC Report
prepared by CIC, an independent industry consultant which was commissioned by us, and
from various official government sources. The information extracted from the CIC Report
should not be considered as a basis for investments in the Offer Shares or as an opinion
of CIC as to the value of any securities or the advisability of investing in our Company.
Our Directors have confirmed, after making reasonable enquiries and exercising
reasonable care, that there is no adverse change in the market information since the date
of publication of the CIC Report or any of the other reports which may qualify, contradict
or have an impact on the information in this section. On the other hand, information and
statistics from official government sources have not been independently verified by us, the
Selling Shareholder , the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters or any
other parties involved in the Global Offering or their respective directors, officers,
employees, advisers, or agents, and no representation is given as to the accuracy or
completeness of such information and statistics. Accordingly, you should not place undue
reliance on such information and statistics. Unless and except for otherwise specified, the
market and industry information and data presented in this section is derived from the
CIC Report.
(1)
THE CATERING MARKET IN MAINLAND CHINA
Mainland China has become the world’s second largest catering market with its annual
catering revenue of RMB5.6 trillion in 2024. Total revenue of catering market in Mainland
China has grown from RMB3,952.7 billion in 2020 to RMB5,571.8 billion in 2024,
representing a CAGR of 9.0%. Although the catering market in Mainland China has been
continuously affected by regional outbreaks of COVID-19 in 2022, which forced the temporary
closures of many restaurants, Mainland China’s catering industry has generally recovered since
2023 as the Chinese government eased the “zero-COVID” policy in December 2022. The
revenue of catering market is expected to grow at a CAGR of 7.1% from 2024 to 2029,
reaching RMB7,851.5 billion in 2029, primarily attributable to the growing consumption
power of Chinese residents and their increasing frequency of dining out.
(1) The contract sum to CIC is RMB1,570,000 for the preparation and use of the CIC Report, and we believe that
such fees are consistent with the market rate. CIC is an investment consulting company originally established
in Hong Kong SAR. In compiling and preparing the CIC Report, CIC has adopted the following assumptions:
(i) the overall social, economic, and political environment in Mainland China is expected to remain stable
during the forecast period; (ii) related key industry drivers are likely to propel the continued growth in
Mainland China’s casual Chinese cuisine restaurant market, such as increasing demand for dining out, greater
growth potential for chain restaurants, rapid development of commercial activities, expansion into tier two, tier
three and lower tier cities, use of social media, rise of national style, advancement of technologies; and (iii)
there is no extreme force majeure or unforeseen industry regulations in which the market may be affected in
either a dramatic or fundamental way. CIC has conducted detailed primary research which involved discussing
the status of the industry with leading industry participants and industry experts.
CIC has also conducted secondary research which involved reviewing company reports, independent research
reports and data based on its own research database. CIC has obtained the figures for the projected total market
size from historical data analysis plotted against macroeconomic data as well as specific related industry
drivers.
INDUSTRY OVERVIEW
–9 6–


--- page 105 ---
The catering market in Mainland China can be divided into two categories based on
operating model, chain restaurants and non-chain restaurants. Chain restaurants refer to a
number of restaurants that operate under shared corporate ownership or franchise arrangement,
leverage economies of scale and share brand awareness. Non-chain restaurants refer to
standalone businesses that operate independently, serving customers in a specific location. The
catering market in Mainland China is highly fragmented and dominated by non-chain
restaurants. Chain restaurants in Mainland China accounted for only 23.3% of all restaurants
in terms of revenue in 2024, demonstrating a huge growth potential as compared to 59.2% in
the United States and 52.3% in Japan. In terms of concentration, the top 100 restaurant
companies in Mainland China accounted for approximately 10% of total revenue of catering
market in Mainland China in 2024, while in the United States, the top 100 restaurant companies
accounted for approximately 30.0% of the total revenue of the catering market. These
differences show that chain restaurants in Mainland China have great potential in expanding in
terms of market share. With higher operating efficiency, more standardized food and services,
better cost management and higher brand awareness, the total revenue of chain restaurants in
Mainland China is expected to continue to grow at a CAGR of 8.2% from 2024 to 2029, faster
than that of non-chain restaurants at a CAGR of 6.8%.
The following chart sets forth a breakdown of the catering market in Mainland China by
operating model.
3,952.7
4,689.5
Chain restaurant
Total 9.0% 7.1%
7.7%
13.6%
6.8%
8.2%
Non-chain restaurant
4,394.1
5,289.0 5,571.8
6,043.2
6,485.0
6,926.4
780.8
989.7 937.2
1,116.6 1,300.3
1,424.4
1,543.9
1,665.4
3,171.9 3,699.8 3,456.9
4,172.4 4,271.5 4,618.8 4,941.2 5,260.9
7,381.9
1,792.7
5,589.2
7,851.5
1,925.8
5,925.7
2029E2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E
RMB billion
Breakdown of catering market in China by operating model in terms of revenue, 2020-2029E
CAGR (2020-2024) CAGR (2024-2029E)
0
1,500
3,000
4,500
6,000
7,500
9,000
7,500
Source: National Bureau of Statistics, CIC Report
INDUSTRY OVERVIEW
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--- page 106 ---
The catering market in Mainland China can also be divided into four segments based on
cuisine and service type, including Chinese cuisine restaurants, Western and Asian (excluding
Mainland China) cuisine restaurants, fast food shops and other eating and drinking places.
Chinese cuisine restaurants constitute the largest segment in the catering market in Mainland
China in terms of revenue, with a market share of approximately 55.1% in 2024. The total
revenue of Chinese cuisine restaurant market increased from RMB2,198.1 billion in 2020 to
RMB3,071.5 billion in 2024 representing a CAGR of 8.7%. In addition, Chinese cuisine
restaurant market is expected to maintain a steady growth at a CAGR of 6.8% from 2024 to
2029, reaching RMB4,277.0 billion in 2029, maintaining its dominant position as the most
popular type of cuisine in Mainland China. The following chart sets forth a breakdown of the
catering market in Mainland China by cuisine and service type.
Total 9.0% 7.1%
8.7% 6.8%
6.8% 4.7%
9.6% 8.1%
12.1% 9.1%
Chinese cuisine restaurants
Western and Asian cuisine restaurants
Fast food shops
Other eating and drinking places
CAGR (2020-2024) CAGR (2024-2029E)
Market size of catering market in China by cuisine and service type in terms of revenue, 2020-2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
0
1,000
3,000
4,000
2,000
5,000
6,000
7,000
8,000
304.4
920.1
530.1
2,198.1
3,952.7
4,689.5
368.6
1,098.2
619.8
2,602.9
4,394.1
2,437.3
569.2
1,031.2
356.4 442.2
1,243.9
671.3
2,931.6
5,289.0
5,571.8
3,071.5
689.5
1,330.0
480.8 521.5
1,458.8
732.6
3,330.2
6,043.2
6,485.0
3,561.7
767.7
1,583.0
572.7 623.0
1,709.4
800.8
3,793.1
6,926.4
7,381.9
4,035.0
834.2
1,834.4
678.4 744.4
1,964.4
865.6
4,277.0
7,851.5
RMB billion
Source: National Bureau of Statistics, CIC Report
(1) Including, among others, Chinese quick-service restaurants.
(2) Including, among others, cafeterias.
CASUAL CHINESE CUISINE RESTAURANT MARKET
The Chinese cuisine restaurants market can be further divided into three segments based
on cuisine and service type, including casual Chinese cuisine restaurants, Chinese fine dining
restaurants, and Chinese hotpot and barbeque restaurants. Casual Chinese cuisine restaurant
refers to the catering segment where restaurants offer ready-to-eat Chinese cuisine at an
affordable price with an average spending per guest in the range of RMB50 to RMB100. The
other two sub-segments within the Chinese cuisine restaurants market are (i) Chinese fine
dining restaurants, which offer ready-to-eat Chinese cuisine with an average spending per guest
above RMB100 and (ii) Chinese hotpot and barbeque restaurants.
INDUSTRY OVERVIEW
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--- page 107 ---
With faster pace of life and increasing spending power among consumers in Mainland
China, casual Chinese cuisine restaurants are welcomed by consumers with their comfortable
dining environment, affordable price and convenient and efficient dining experience, as
compared to other Chinese cuisine restaurants, such as Chinese fine dining restaurants and
hotpot restaurants. As a result, casual Chinese dining that has better value for money has the
highest growth among all segments of Chinese restaurant market as consumers become more
value conscious, and the casual Chinese cuisine restaurants market grew from a total revenue
of RMB351.3 billion in 2020 to RMB534.7 billion in 2024, representing a CAGR of 11.1%.
Going forward, the total revenue of casual Chinese cuisine restaurants is expected to maintain
a steady growth at a CAGR of 9.1% from 2024 to 2029, reaching RMB826.1 billion in 2029.
With the declined popularity of fine dining catering in the market, casual Chinese cuisine
restaurants have gradually become mainstream, and their total revenue grew as a percentage of
Chinese cuisine restaurants from 16.0% in 2020 to 17.4% in 2024 and is expected to further
increase to 19.3% in 2029.
2029E
762.9
826.1
784.3
2,198.1
2,602.9 2,437.3
2,931.6 3,071.5
3,330.2
3,561.7
3,793.1
4,277.0
4,035.0
910.2 840.7
997.1 1,027.2 1,097.7 1,160.0 1,283.2
1,342.7
2,108.21,988.91,869.61,755.61,641.51,509.51,436.51,190.81,268.1
1,220.5
1,062.5
424.6 405.8
498.0 534.7
591.0
646.2
702.9
0
500
1,000
1,500
2,000
2,500
3,000
3,500
16.0% 16.3% 16.6% 17.0% 17.4% 17.7% 18.1%
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028
18.5% 19.3%18.9%Market size of casual Chinese cuisine restaurant market in terms of total revenue, 2020-2029E
Casual Chinese cuisine restaurant as % of Chinese cuisine restaurants
4,000
4,500 Casual Chinese cuisine restaurants
Chinese fine dining restaurants
Chinese hotpot and barbeque restaurants
CAGR (2020-2024) CAGR (2024-2029E)
8.7%
11.1%
7.0% 5.5%
9.2% 6.9%
9.1%
6.8%Total
351.3
RMB billion
Source: National Bureau of Statistics, CIC Report
Note: Numbers in circles refer to market size of casual Chinese cuisine restaurants as a percentage of Chinese cuisine
restaurants.
INDUSTRY OVERVIEW
–9 9–


--- page 108 ---
Casual Chinese Fusion Restaurants
Due to geographical and socioeconomic factors, consumers in Mainland China have
diverse tastes and dining habits. As a result, diversified cuisine styles are developed to meet
consumers’ demand. A single regional cuisine style primarily targets consumers within that
specific region, restricting its ability to serve people in other regions and resulting in limited
growth potential. In comparison, fusion cuisine which combines flavors, ingredients and
preparation techniques to create innovative dishes that can overcome cultural and geographic
barriers, thereby catering to diverse consumer preferences and tastes in different regions and
age groups. Furthermore, casual Chinese fusion restaurants which provide Chinese fusion
cuisine at affordable price points innovate their menu designs and introduce creative fusion
dishes to create dining environments that meet the demand of different dining scenarios. Guests
looking for a quick and light lunch during weekdays, or a proper dinner for friends and family
gatherings, or business meal can all find a pleasant experience. These casual Chinese fusion
restaurants have achieved strong customer followings and developed a competitive edge in the
following areas as compared with other casual Chinese cuisine restaurants that feature
traditional regional cuisines:
 Wider variety of tastes. Casual Chinese fusion restaurants provide dishes that
combine various elements from cuisines of different regions and adjust the taste to
satisfy the preferences of a diverse consumer base.
 Refreshing dining experience. Casual Chinese cuisine restaurants typically feature
beautiful decoration, creative dishes and high-quality and efficient service.
 Wider range of consumer groups. Casual Chinese fusion restaurants are positioned
to target the mass market due to their flexibilities in serving a diverse consumer
group.
COMPETITIVE LANDSCAPE OF CHINESE CUISINE MARKET AND CASUAL
CHINESE CUISINE MARKET IN MAINLAND CHINA
The total revenue of Chinese cuisine restaurant market in Mainland China reached
RMB3,071.5 billion in 2024, accounted for approximately 55.1% of the catering market in
Mainland China. The Chinese cuisine restaurant market in Mainland China is extremely
fragmented, with the three largest players holding approximately 1.8% of the total market share
in 2024.
The total revenue of casual Chinese cuisine restaurant market reached RMB534.7 billion
in 2024, accounted for approximately 17.4% of the Chinese cuisine restaurant market and 9.6%
of the catering market in Mainland China. Casual Chinese cuisine restaurant market is also
highly fragmented, with a large number of restaurant brands participating in the market. In
2024, the five largest brands accounted for approximately 3.9% of the total revenue of casual
Chinese cuisine restaurant market.
INDUSTRY OVERVIEW
– 100 –


--- page 109 ---
In 2024, restaurants under our Green Tea brand achieved a total revenue of RMB3.8
billion and ranked fourth with a market share of 0.7% in the casual Chinese cuisine restaurant
market in Mainland China. With a total of 465 restaurants at the end of 2024, we ranked third
in terms of number of restaurants among casual Chinese cuisine restaurant brands in Mainland
China. In addition, we are the largest player that focuses on offering fusion cuisine among the
top five casual Chinese restaurant operators. The table below sets forth the five largest casual
Chinese cuisine restaurant brands and their restaurant count, total revenue and market shares
in 2024:
Brand Description of the brand
Average
spending
per guest
Restaurant
Count
Total
Revenue
Market
Share (1)
(RMB)
(in RMB
billion)
Brand A A non-listed restaurant brand
established in 1988,
headquartered in Beijing, and
focusing on northwestern
Chinese cuisine, such as
noodles, lamb kebabs and
rougamo.
80-90 363 5.5 1.0%
Xiaocaiyuan A restaurant brand listed on the
Stock Exchange, established in
2013, headquartered in Tongling,
Anhui Province, and focusing on
Anhui cuisine which caters to
the mass Chinese population
60-70 667 5.2 1.0%
Tai Er A restaurant brand listed on the
Stock Exchange, established in
2015, headquartered in
Guangzhou, Guangdong
Province, and focusing on
pickled Chinese sauerkraut fish
70-80 634 4.4 0.8%
Green Tea See “Business” for more details 50-70 465 3.8 0.7%
Brand C A non-listed restaurant brand
established in 1998,
headquartered in Hangzhou City,
Zhejiang Province, and focusing
on Zhejiang cuisine with
authentic Hangzhou flavors
60-70 108 2.4 0.4%
Source: Annual Reports of Jiumaojiu International Holdings Limited and Xiaocaiyuan International Holding
Ltd., CIC Report
INDUSTRY OVERVIEW
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--- page 110 ---
Note:
(1) Market share is calculated based on the brands’ revenue in 2024 divided by the total revenue of Chinese
cuisine restaurant market in 2024
MARKET DRIVERS AND TRENDS
Key drivers and trends of the casual Chinese cuisine market and casual Chinese fusion
restaurant market in Mainland China are set forth below:
 Increasing demand for dining out. Along with the rapid growth of urbanization,
according to the National Bureau of Statistics, the per capita annual disposable
income of urban households in Mainland China increased from RMB43,834.0 in
2020 to RMB54,188.0 in 2024 at a CAGR of 5.4%. Although dining out was once
restricted because of the COVID-19 pandemic and the relevant restrictive measures
imposed by the government, demand for dining out has rebounded since the
government phased out the “zero-COVID” policy in December 2022. The per capita
dining out expenditure also increased from RMB2,799.8 in 2020 to RMB3,956.5 in
2024 at a CAGR of 9.0%. Consumers in Mainland China are expected to continue
to incorporate dining out consumption into their lifestyle, which will increase their
dining out frequencies and promote dining out culture. By 2029, per capita annual
disposable income of urban household and per capita dining out expenditure in
Mainland China is expected to reach RMB70,171.0 and RMB5,619.5, respectively,
at a CAGR of 5.3% and 7.3% from 2024 to 2029, respectively.
 Greater growth potential for chain restaurants. Generally, chain restaurants have
better control of food quality and safety as compared to non-chain restaurants. Chain
restaurants also typically have stronger capital support, control over supply chain
and brand awareness. As consumers in Mainland China are placing increasing
importance on food safety, quality, health and taste, chain casual Chinese cuisine
restaurants are likely to have greater growth potential in the future.
 Rapid development of commercial activities. The rapid development of commercial
activities generates new potential locations for casual Chinese fusion restaurants,
including shopping malls, transportation hubs, tourist sites, office buildings and
residential districts. These public places are expected to draw customer traffic and
bring strong demand for catering services.
 Expansion into tier two, tier three and lower tier cities. Casual Chinese fusion
restaurants are likely to continue to expand into tier two, tier three and lower tier
cities. Nowadays, Chinese consumers value cost-effective dining experiences,
quality of dishes, dining environment as well as dining services. As a result, casual
Chinese fusion restaurants have become the ideal dine-out option for consumers by
meeting the evolving demands of consumers for quality dishes with reasonable price
and diversified tastes, especially in tier two, tier three and lower tier cities.
Moreover, these cities typically have a large population base and growing economy.
INDUSTRY OVERVIEW
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--- page 111 ---
With the continuous development of tier two, tier three and lower tier cities, demand
for casual Chinese fusion restaurants is expected to increase as consumers in these
cities increase the frequency of dining out. Meanwhile, the growth of economy in
these cities also entails increase in consumer purchasing power, which is likely to
lead to higher spending at restaurants.
 Use of social media. Online social media platforms, where consumers share
comments about dining experiences, have significant influence over consumers’
dining decisions. As such, social media platforms are expected to continue to be the
main venue for restaurants to conduct their marketing activities and strengthen their
brand awareness. In the meantime, restaurants with unique design and menu are
usually more popular on social media platforms. Such restaurants may gain more
customer traffic as a result of the increasing influence of social media platforms.
 Rise of national style. In recent years, the younger generations in Mainland China
have demonstrated particular interest in domestic brands and products that display
traditional Chinese culture elements, which is also known as the rise of “national
style” ( ਷ᆓ). In order to attract these young customers and build brand image and
loyalty, some restaurant chains have collaborated with other domestic brands to
launch joint marketing events using elements of traditional Chinese culture. Overall,
the rise of national style is expected to benefit domestic brands and bring more
opportunities to Chinese cuisine restaurants.
 Advancement of technologies. Restaurants have increased their utilization of digital
technology in their businesses to improve customers’ dining experience and their
own operational efficiency. Advanced technologies have proven to be effective in
streamlining operation procedures, reducing consumers’ waiting time and improving
dining experience, and it is expected that restaurants will continue to utilize such
technologies to optimize their operations.
ENTRY BARRIERS AND CHALLENGES
Although there may not be significant entry barriers to operating and managing a single
restaurant, there are significant entry barriers and challenges in becoming a successful
large-scale restaurant chain brand, including the following:
 Ability to provide affordable high quality dining services. Consumers in Mainland
China are becoming more selective in choosing restaurants as their income and
living standards improve. They prefer restaurants that provide both delicious cuisine
and enjoyable dining environment with affordable prices. As such, the ability to
meet the demand for high-quality service with affordable pricing will be essential to
restaurants.
INDUSTRY OVERVIEW
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--- page 112 ---
 Ability to continuously innovate. Innovation and creativity are at the core of the
Chinese fusion concept. As a result of the fierce competition in the industry,
restaurants that continue to incorporate innovation into the development of menu
items will gain competitive advantages by meeting the demand of diversified dining
scenarios and broaden their customer base.
 Brand recognition and reputation. Brand awareness has become increasingly
important to catering business as it has great influence on consumers’ dining
decisions. Therefore, restaurants with strong brand awareness will have larger
customer base to achieve market leading position. In addition, as existing market
participants have already taken up favorable locations in busy areas, such as
shopping malls and popular sites with a high consumer traffic, new entrants may
find it difficult to occupy such locations with promising revenue and to gain
marketing exposure. Considering that existing market participants have already
established their brand recognition and reputation and taken up favorable locations,
new entrants with newly established brands may find it hard to gain brand
recognition from customers in the short term.
 Control over food safety and quality. Large restaurant chains typically have more
comprehensive food safety and supply chain management systems to ensure
consistent quality of food. With increasing public concern over food quality and
safety, consumers prefer to consume in restaurants that provide reliable and
high-quality food and services. In the meantime, the policies published by the
government also promote food quality and safety in the catering industry. Casual
Chinese restaurants that have a strong reputation for food safety and are able to offer
healthy food options are expected to experience stronger growth. Meanwhile, new
market players may not have enough resources to establish a comprehensive food
safety and quality control system.
 Supply chain management. Supply chain management is crucial to restaurants
operations to ensure food quality and safety, control purchase costs of supplies and
timely delivery of necessary ingredients to restaurants. Extensive experience in
supply chain management for large-scale operations and maintaining cost
efficiencies are key entry barriers for new market players.
CATERING SUPPLY CHAIN OF CASUAL CHINESE CUISINE RESTAURANT
MARKET
The catering supply chain of the casual Chinese cuisine restaurant market mainly involves
food procurement, food processing and food distribution. The food processing segment can be
further divided into three types of food processing arrangements, namely processing at central
kitchen, processing by designated food processing companies and processing by local
restaurant kitchen.
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 Processing at central kitchen. This type of arrangement allows restaurant operators
to prepare products at a centralized facility and then distribute the products to their
restaurants. It is beneficial to the restaurant operators as it simplifies the storage of
supplies and centralizes food processing procedures. Once the food products are
ready, the restaurant operators can deliver these food products to several locations
over a large geographic area.
 Processing by designated food processing companies. Under this type of
arrangement, the designated food processing companies produce semi-processed
food products according to the recipes and instructions given by the restaurant
operators. Such arrangement can save restaurant operators from making significant
upfront investment for building their own processing facilities or central kitchen. It
also creates higher utilization of the processing facilities as compared to central
kitchens.
 Processing by local restaurant kitchen . Under this type of arrangement, raw
materials are directly delivered to the restaurant without any prior food processing,
and the restaurant staff process the raw materials at the restaurant kitchen. Currently,
only smaller restaurant operators use this type of arrangement.
As medium to large restaurant chains increase their utilization of third-party food
processing arrangements, the percentage of expenditure on external supply chain services of
the overall raw material expenditure of catering market has increased from 10.5% in 2020 to
15.7% in 2024, and is expected to further increase to 25.4% in 2029.
Leading catering supply chain service providers are moving towards specialization and
diversification. With the development of the cold chain logistics industry, leading catering
supply chain service providers have begun to offer trans-provincial operations. By partnering
with these sizable catering supply chain service providers with trans-provincial operations,
restaurant chains, such as our Company, are able to rapidly scale up and expand nationally with
relatively low upfront investments, while maintaining the highest standard of food safety and
quality.
COST OF RA W MATERIALS, LABOR AND COMMERCIAL RENT
The major food ingredients used in our restaurants include crop products, vegetables,
aquatic products, beef, pork, and poultry. The price volatilities of such food ingredients are
subject to factors such as domestic supply and demand, seasonality, weather conditions and
natural disasters. Generally, the 2014 based consumption price index (the “ CPI”) (CPI, year of
2014 = 100) of food remained relatively stable from 2020 to 2024. Among the different food
price indices, the food price index of pork has exhibited a notable decline from 2020 to 2024,
primarily attributable to the increased availability of pork following the recovery from the
impact of the COVID-19 pandemic.
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2022
114.3
126.2
124.0
131.2
131.2
114.4
111.0
124.5
123.5
133.7
145.4
110.2
2021
100.4
117.9
113.5
126.0
224.1
105.2
2020 2024
111.9
125.8
121.3
100.7
123.0
111.2
2023
113.4
121.1
123.2
120.9
112.8
114.5
Crop production
Vegetables
Fishery Products
Beef
Pork
Poultry
Food Price Index of Raw Food Material, China, 2020-2024
Food Price Index (2014=100)
50
100
150
200
250
Source: National Bureau of Statistics
Note: The price indexes of crop products, vegetables, aquatic products, beef, pork and poultry refer to the price
indexes of agricultural production.
In addition, the annual income of employees in the catering industry in urban areas in
Mainland China has increased steadily from 2019 to 2023 at a CAGR of 3.6%. Labor cost is
expected to keep growing in the coming five years due to the developing macro-economy,
growing disposable income and CPI, as well as the inflation. The chart below sets forth the
trend of labor cost of catering industry in urban areas in Mainland China for the periods
indicated.
0
10
20
30
40
50
60
Labor cost 3.6%
CAGR (2019-2023)
Labour cost of catering industry in urban area, 2019–2023
RMB thousand
0
10
20
30
40
50
60
2021 2023 202220202019
54.0
58.1
53.6
48.850.3
Source: National Bureau of Statistics, CIC Report
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The rental cost of a restaurant is also considered to be one of the major costs in Mainland
China’s catering industry. The average rental cost for stores in shopping malls in Mainland
China remained stable at around RMB27.0 per m
2/day from 2020 to 2024 with a CAGR of
0.33%. With the further recovery of the consumer market, the average commercial rent of
stores in shopping malls in Mainland China is expected to moderately increase in the future.
0
5
10
15
20
25
30
Rental cost 0.33%
CAGR (2020-2024)
Average rental cost of stores in shopping malls, 2020-2024
RMB thousand
0
10
20
30
2022 2024 202320212020
27.1 27.127.026.926.8
Source: China Real Estate Index System, CIC Report
Note: It refers to the average rental cost of stores in 100 typical shopping malls in Mainland China.
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REGULATIONS ON FOREIGN INVESTMENT IN CATERING INDUSTRY
According to the Special Administrative Measures (Negative List) for Foreign Investment
Access (2024 Edition) (the “Negative List”,݄(૶ఊ)(2024 ϋ
و)) promulgated on September 6, 2024 and came into effect on November 1, 2024, the
catering industry falls into the industries where foreign investment is not prohibited or
restricted.
The Foreign Investment Law of the PRC (the “Foreign Investment Law”, ʕശɛ͏΍
) was promulgated by the National People’s Congress (the “NPC”) of the
PRC on March 15, 2019, which came into force as of January 1, 2020. Under the Foreign
Investment Law, the PRC adopts a system of pre-entry national treatment plus negative list
with respect to foreign investment administration. Foreign investment and domestic industries
outside the scope of the negative list would be treated equally.
LA WS AND REGULATIONS ON FOOD SAFETY AND LICENSING REQUIREMENTS
FOR CATERING SERVICES
The Food Safety Law and Implementation Rules
In accordance with the Food Safety Law of the PRC (the “Food Safety Law”, ʕശɛ͏
), which was promulgated on February 28, 2009 and amended on April 24,
2015, December 29, 2018 and April 29, 2021, respectively, food producers and traders must be
liable for the safety of the food produced or traded by them and shall produce and trade food
in accordance with relevant laws, regulations and food safety standards. Food producers and
traders must ensure food safety, act in good faith and be self-disciplined, be accountable to
society and the public, accept public supervision, and comply with their social responsibilities.
The Implementation Rules of the Food Safety Law (the “Implementation Rules”, ʕശ
ૢԷ), which further specify the detailed measures to be taken
and conformed to by food producers and business operators in order to ensure food safety, were
promulgated on July 20, 2009 and came into effect on the same date, and were amended on
February 6, 2016 and March 26, 2019, respectively. The Implementation Rules, which came
into effect on December 1, 2019, introduced extra regulatory measures such as conducting
random supervisory checks, improving the food safety violation reporting reward system, and
establishing a blacklist system for food producers and business operators with serious food
safety violations and a joint punishment mechanism against discreditable acts. The
Implementation Rules state that food producers and operators have primary responsibility for
food safety, detail the responsibilities of principals of enterprises, standardize food storage and
transportation requirements, forbid false publicity of food, and optimize the administrative
system for special food. The Implementation Rules also provide for strict legal liabilities for
violating food safety-related laws and regulations.
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In accordance with the Food Safety Law and the Implementation Rules, with the purpose
of guaranteeing food safety and safeguarding the health and safety of the public, the PRC has
set up a system for supervision, monitoring and appraisal of food safety risk, compulsory
adoption of food safety standards, operating standards for food production, food inspection,
food export and import and food safety accident response. Providers of food circulation
services and consumer food services must comply with the aforementioned law and rules.
According to the Food Safety Law, the State Council shall establish a food safety
committee whose duties shall be defined by the State Council. The food safety administration
under the State Council shall exercise supervision and administration over food production and
trading activities according to the duties defined by the Food Safety Law and the State Council
itself. The health administrative department under the State Council shall organize the
implementation of risk monitoring and risk assessment of food safety according to the duties
defined by the Food Safety Law and the State Council, and shall formulate and issue national
food safety standards together with the food and drug administration under the State Council.
Other relevant departments under the State Council shall carry out relevant food safety work
according to the duties defined by the Food Safety Law and the State Council.
As penalties for violation, the Food Safety Law sets out various legal liabilities in the
form of warnings, orders to rectify, confiscations of illegal gains, confiscations of utensils,
equipment, raw materials and other articles used for illegal production and operation, fines,
recalls and destructions of food in violation of laws and regulations, orders to suspend
production and/or operation, revocations of production and/or operation license, and even
criminal punishment.
Food Operation Licensing and Filing
On June 15, 2023, State Administration for Market Regulation promulgated the
Administrative Measures for Food Operation Licensing and Filing (၍
). According to Administrative Measures for Food Operation Licensing and Filing, the
issuing date of a food operation license is the date on which the decision on granting the license
is made, and the license is valid for five years. Food operators shall hang or place their food
operation license originals or display their electronic ones in prominent places of their
operation sites. If the information indicated on the food operation license change, the food
operator shall, within ten working days after the change, apply to the department for market
regulation which originally issued the license for alteration of the operation license. If a food
operator relocates its operation site, and engages in food operation in a site other than the
original operation site, it shall apply for a food operation license again.
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Measures for the Supervision and Administration of the Safety of Food Offered through
Online Catering Services
Pursuant to Measures for the Supervision and Administration of the Safety of Food
Offered through Online Catering Services ()
effective on January 1, 2018, which was amended on October 23, 2020, online catering service
providers must have their own physical stores and must have obtained food business licenses
according to the law, and shall carry out business activities pursuant to the business forms and
business items specified on their own food business licenses, and must not do business beyond
their business scope. A catering service provider that runs its own website must file the record
with the administration for market regulation at its locality at county level, within 30 working
days of filing for record with the competent authority of communications.
Regulations On The Sanitation Of The Public Assembly Venue
The Regulation for the Administration of Sanitation of the Public Assembly V enue ( ʮ
ሊ͛၍ଣૢԷ) effective on April 1, 1987 and as amended on February 6, 2016 and
April 23, 2019, and the Implementation Rules for the Regulation for the Administration of
Sanitation of the Public Assembly V enue () effective on
May 1, 2011, and as amended on January 19, 2016 and December 26, 2017, were promulgated
by the State Council and the Ministry of Health (later known as National Health Commission
of the PRC) respectively. The said regulations were adopted to create favorable and sanitary
conditions for the public assembly venues, prevent disease transmission and safeguard people’s
health. Depending on the requirements of the local health and family planning administrations,
a restaurant is required to obtain a public assembly venue hygiene license from the local health
authority after it applies for a business license to operate its business.
The Decision of the State Council on the Integration of Health permits and Food Business
licenses in Public places for Restaurant Services (ʮ΍
), which was promulgated by the State Council on
February 3, 2016, cancels the hygiene permits issued by the local health authorities to four
kinds of public places, such as restaurants, cafes, bars and teahouses, and integrates the
contents of the food safety permits into the food business licenses issued by the food and drug
regulatory authorities.
Food Recall System
China Food and Drug Administration (now merged into the State Administration for
Market Regulation) promulgated the Administrative Measures for Food Recall (the
“Administrative Measures for Recall”,) on March 11, 2015, which
became effective on September 1, 2015 and amended on October 23, 2020. According to the
Administrative Measures for Recall, where food operators find that the food involved thereby
is unsafe, they must immediately suspend the operations, inform relevant food producers and
operators of the suspension of production and operation, recommend consumers stop eating,
and take necessary measures to prevent and control food safety risks. Food producers knowing
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that any food produced and traded thereby is unsafe must voluntarily recall such food. Food
producers and operators must faithfully record the name, trademark, specification, production
date, batch number, quantity and other contents of unsafe food subject to the suspension of
production and operation, recall and disposal. Records must be kept for at least two years.
Where food operators violate the Food Safety Law and the Administrative Measures for Food
Recall and do not immediately suspend operation or voluntarily recall unsafe food, follow the
prescribed time limit to activate recall procedures, recall unsafe food products in accordance
with the recall plan or dispose of unsafe food products, the food and drug administrative
authorities shall issue warnings to them and impose fines between CNY10,000 and CNY30,000
on them.
LA WS AND REGULATIONS ON FOOD ADVERTISEMENT
According to the Advertising Law of the PRC (the “Advertising Law”, ʕശɛ͏΍ձ
) promulgated by the Standing Committee of the NPC (the “SCNPC”) on October
27, 1994 and most recently revised on April 29, 2021, no advertisement shall contain any false
or misleading information, and shall not deceive or mislead consumers. Any advertiser,
advertising agent or advertisement publisher shall, when engaging in advertising activities,
comply with laws and administrative regulations, act in good faith, and conduct fair
competition. In any advertisement, where there are statements regarding the performance,
function, place of origin, purpose, quality, ingredients, price, producer, valid period and
guarantees of the product, or the content, provider, form, quality, price and guarantees of the
service, such statements shall be accurate, clear and explicit.
REGULATIONS ON LIQUOR CIRCULATION
The Guidance of the Ministry of Commerce on promoting healthy development of liquor
circulation in the “13th Five-Y ear” period (׵“ɤɧʞ”࢝
ኬจԈ), which was promulgated by the Ministry of Commerce on February 13, 2017,
stipulates the elimination of the regional blockade of alcohol, the clean-up and abolition of any
relevant regulations and practices that hinder the free circulation of alcohol, and the promotion
of the establishment of a large market and a large circulation of alcohol.
However, liquor operators may be required by local governments to obtain local licenses
for the distribution of alcoholic products. For example, pursuant to the Administrative
Measures of Shanghai Municipality for Production and Sales of Alcohol Commodities ( ɪऎ
ପቖ၍ଣૢԷ), which was adopted by the Standing Committee of Shanghai
People’s Congress, local enterprises that engage in alcohol wholesaling must apply to the
municipal wine monopoly bureau for an alcohol wholesale license, while local enterprises that
engage in alcohol retailing must apply to the district wine administrative department for an
alcohol retail license.
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CYBER SECURITY LA W
The Cyber Security Law of the PRC (the “Cyber Security Law”, ʕശɛ͏΍ձ਷ၣഖ
) was promulgated by the SCNPC on November 7, 2016 and came into effect on
June 1, 2017. The Cyber Security Law applies to network construction, operation, maintenance
and use of the network as well as to the supervision and administration of cyber security within
PRC territory.
According to the Cyber Security Law, network operators, while carrying out business and
service activities, must abide by laws and administrative regulations, show respect for social
moralities, follow business ethics, act in good faith, comply with cyber security protection
obligations, accept supervision by the government and society and comply with their social
responsibilities. For the construction and operation of a network or the provision of services
through a network, network operators shall comply with the provisions of laws, administrative
regulations and mandatory national standards, and conduct technical and other necessary
measures required to ensure the secure and stable operation of the network, effectively respond
to cyber security incidents, prevent crimes committed on the network, and to maintain the
integrity, confidentiality and availability of cyber data.
Network operators must keep users’ personal information that they have collected strictly
confidential, and establish and improve their system for the protection of users’ information.
To collect and use personal information, network operators must follow the principles of
legitimacy, integrity and necessity, disclose their rules of data collection and use, clearly
express the purpose, means and scope of collecting and using the information, and obtain the
consent of the persons whose data is gathered. Network operators must adopt technical and
other necessary measures to ensure the security of the personal information they have collected
and to prevent such information from being divulged, damaged or lost. If personal information
has been or may be divulged, damaged or lost, it is necessary to take immediate remedial
measures and inform users promptly according and report the same to the relevant competent
departments. Network operators who do not comply with the Cyber Security Law may be
subject to fines, suspension of their businesses, shutdown of their websites, and revocation of
their business licenses.
On July 30, 2021, the State Council promulgated the Regulations for Safe Protection of
Critical Information Infrastructure (ᚐૢԷ) (the “Safe
Protection Regulations”) which came into effect on September 1, 2021. Pursuant to the Safe
Protection Regulations, critical information infrastructure refers to important network
infrastructure and information system in public telecommunications, information services,
energy sources, transportation and other critical industries and domains, in which any
destruction or data leakage will have severe impact on national security, the nation’s welfare,
the people’s living and public interests.
According to the Cybersecurity Review Measures (2021) (ج2021) )
jointly promulgated by the Cyberspace Administration of China and other relevant authorities
on December 28, 2021 and effective on February 15, 2022, critical information infrastructure
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operators who purchase network products and services that affect or may affect national
security shall report to the cybersecurity review office for a cybersecurity review. Online
platform operators possessing personal information of more than 1 million users must report
to the cybersecurity review office for a cybersecurity review before going public abroad.
Furthermore, where members of the cybersecurity review working mechanism believe that
network products and services and data processing activities affect or are likely to affect
national security, the Cybersecurity Review Office shall report to the Central Cyberspace
Affairs Commission for approval as per procedure, and then conduct a cybersecurity review in
accordance with the Cybersecurity Review Measures. According to the Cyber Data Security
Administration Regulations (Draft for Comment) ( ၣഖᅰኽτΌ၍ଣૢԷ(ᅄӋจԈᇃ))
promulgated by the Cyberspace Administration of China on November 14, 2021 but not yet
effective, any data processors processing personal information of more than one million
individuals and seeking to go public abroad, or any data processors seeking to go public in
Hong Kong SAR, affect or may affect national security are subject to a cybersecurity review
in accordance with relevant national regulations. On September 24, 2024, the State Council
promulgated the Regulations on the Administration of Cyber Data Security ( ၣഖᅰኽτΌ
၍ଣૢԷ) (the “Data Security Regulations”), which is applicable to network data processing
activities and the security supervision and administration thereof conducted within the territory
of the People’s Republic of China and took effect on January 1, 2025. The Data Security
Regulations stipulate that network data processors engaging in network data processing
activities that affect or may affect national security shall be subject to national security review
in accordance with relevant laws and regulations and do not include the content related to
cybersecurity review for listings in Hong Kong SAR that as presented in the Cyber Data
Security Administration Regulations (Draft for Comment).
REGULATIONS RELATING TO PERSONAL INFORMATION OR DATA
PROTECTION
On December 29, 2011, the MIIT issued Several Provisions on Regulating the Market
Order of Internet Information Services (֛which
became effective on March 15, 2012. Several Provisions on Regulating the Market Order of
Internet Information Services provides that an internet information service provider may not
collect any user’s personal information or provide any such information to third parties without
such user’s consent. Pursuant to the Several Provisions on Regulating the Market Order of
Internet Information Services, internet information service providers are required to, among
others, (i) expressly inform the users of the method, content and purpose of the collection and
processing of such users’ personal information and may only collect such information
necessary for the provision of its services; and (ii) properly maintain the users’ personal
information, and in case of any leak or possible leak of a user’s personal information, online
service providers must take immediate remedial measures and, in severe circumstances, make
an immediate report to the telecommunications regulatory authority.
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On August 22, 2019, the CAC issued the Provisions on the Cyber Protection of Children’ s
Personal Information (֛which became effective on October 1,
2019 and apply to the collection, storage, use, transfer and disclosure of the personal
information of the minors under the age of 14, or the Children, via the Internet.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT,
the General Office of the Ministry of Public Security and the General Office of the SAMR
jointly issued the Notice on the Measures for Determining the Illegal Collection and Use of
Personal Information through Mobile Applications (App֛
جwhich aims to provide reference for supervision and administration departments and
provide guidance for mobile applications operators’ self-examination and self-correction and
social supervision by netizens, and further elaborates the forms of behavior constituting illegal
collection and use of the personal information through mobile applications including: (i)
failing to publish the rules on the collection and use of personal information; (ii) failing to
explicitly explain the purposes, methods and scope of the collection and use of personal
information; (iii) collecting and using personal information without the users’ consent; (iv)
collecting personal information unrelated to the services they provide and beyond the
necessary principle; (v) providing personal information to others without the users’ consent;
(vi) failing to provide the function of deleting or correcting the personal information according
to the laws or failing to publish information such as ways of filing complaints and reports.
Pursuant to the Notice of the Ministry of Industry and Information Technology on the
Record-filing of Mobile Internet Apps (ʈ
ٝpromulgated by the MIIT on July 21, 2023 and took effective on the same day, any
operator of APP (including mini programs and quick applications) that engages in Internet
information services within the territory of the PRC shall go through the record-filing
formalities in accordance with the Law of the People’ s Republic of China Against
Telecommunications and Internet Frauds (جthe
Administrative Measures on Internet-based Information Services (ج)
and other regulations. Any APP operator that fails to complete the record-filing formalities
shall not engage in APP Internet information services.
Pursuant to the Ninth Amendment to the Criminal Law (ࣩ(ɘ)), issued by the
SCNPC on August 29, 2015, which became effective on November 1, 2015, any Internet
service provider that fails to fulfill its obligations related to Internet information security
administration as required under applicable laws and refuses to rectify upon orders shall be
subject to criminal penalty. In addition, Interpretations of the Supreme People’ s Court and the
Supreme People’ s Procuratorate on Several Issues Concerning the Application of Law in the
Handling of Criminal Cases Involving Infringement of Personal Information (৫e
༆ᙑ), issued on
May 8, 2017 and effective as of June 1, 2017, clarified certain standards for the conviction and
sentencing of the criminals in relation to personal information infringement.
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In addition, on May 28, 2020, the National People’s Congress of the PRC approved the
PRC Civil Code (Պ), which came into effect on January 1, 2021. Pursuant
to the PRC Civil Code, the collection, storage, use, process, transmission, provision and
disclosure of personal information should follow the principles of legality, legitimacy and
necessity. The personal information of a natural person shall be protected by the law. Any
organization or individual shall legally obtain such personal information of others when
necessary and ensure the safety of such information, and shall not illegally collect, use, process
or transmit personal information of others, or illegally purchase or sell, provide or make public
personal information of others.
On July 30, 2021, the state council promulgated the Regulations on Protection of Critical
Information Infrastructure (ᚐૢԷ), which became effective on
September 1, 2021. Pursuant to the Regulations on Protection of Critical Information
Infrastructure, a critical information infrastructure refers to an important network facilities or
information systems in important industries or fields such as public communication and
information service, energy, transportation, water conservation, finance, public services,
e-government affairs and national defense science, which may endanger national security,
people’s livelihood and public interest in case of damage, function loss or data leakage. In
addition, competent departments and administration departments of each important industry
and field, or Protection Departments, shall be responsible to formulate determination rules and
identify the critical information infrastructure in the respective important industry or field. The
results of the determination of critical information infrastructure shall be informed to the
operator, and notify the public security department of the State Council.
On August 20, 2021, the SCNPC promulgated the PRC Personal Information Protection
Law (جwhich took effect on November 1, 2021. Pursuant to the Personal
Information Protection Law, “personal information” refers to any kind of information related
to an identified or identifiable individual as electronically or otherwise recorded but excluding
the anonymised information. The processing of personal information includes the collection,
storage, use, processing, transmission, provision, disclosure and deletion of personal
information. The Personal Information Protection Law applies to the processing of personal
information of natural persons within the territory of the PRC, as well as personal information
processing activities outside the territory of PRC, for the purpose of providing products or
services to natural persons located within Mainland China, or for analysing or evaluating the
behaviors of natural persons located within Mainland China, or for other circumstances as
prescribed by laws and administrative regulations. A personal information processor may
process the personal information of this individual only under the following circumstances: (i)
where consent is obtained from the individual; (ii) where it is necessary for the execution or
performance of a contract to which the individual is a party, or where it is necessary for
carrying out human resource management pursuant to labor rules and regulations formulated
in accordance with the law or a collective contract legally concluded; (iii) where it is necessary
for performing a statutory responsibility or statutory obligation; (iv) where it is necessary in
response to a public health emergency, or for protecting the life, health or property safety of
a natural person in the case of an emergency; (v) where the personal information is processed
within a reasonable scope to carry out any news reporting, supervision by public opinions or
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any other activity for public interest purposes; (vi) where the personal information, which has
already been disclosed by an individual or otherwise legally disclosed, is processed within a
reasonable scope; or (vii) any other circumstance as provided by laws or administrative
regulations. In principle, the consent of an individual must be obtained for the processing of
his or her personal information, except under the circumstances of the aforementioned items
(ii) to (vii). Where personal information is to be processed based on the consent of an
individual, such consent shall be a voluntary and explicit indication of intent given by such
individual on a fully informed basis. If laws or administrative regulations provide that the
processing of personal information shall be subject to the separate consent or written consent
of the individual concerned, such provisions shall prevail.
On June 10, 2021, the SCNPC passed the Data Security Law (جwhich became
effective as of September 1, 2021. The Data Security Law clarifies the scope of data to cover
a wide range of information records and requires that data collection shall be conducted in a
legitimate and proper manner, and the theft or illegal collection of data is not permitted. Data
processors shall establish and improve whole-process data security management rules, organize
and implement data security education and training and take appropriate technical measures
and other necessary measures to protect data security. In addition, data processing activities
shall be conducted on the basis of the graded protection system for cybersecurity. Monitoring
of data processing activities shall be strengthened, and remedial measures shall be taken
immediately in case of discovery of risks regarding data security related defects or bugs. In
case of data security incidents, responsive measures shall be taken immediately, and disclosure
to users and report to the competent authorities shall be made in a timely manner.
On July 7, 2022, the CAC promulgated the Measures for Data Cross-border Transfer
Security Assessment (جwhich became effective on September 1, 2022.
According to the Measures for Data Cross-border Transfer Security Assessment, where a data
processor transfers data abroad, the data processor shall apply to the CAC for a data
cross-border transfer security assessment through the local CAC at the provincial level when:
(i) a data processor transfers important data abroad; (ii) a critical information infrastructure
operator or a data processor processing the personal information of more than one million
persons transfers personal information abroad; (iii) a data processor has provided a total of
100,000 persons’ personal information or 10,000 persons’ sensitive personal information
abroad since January 1 of the previous year; or (iv) under other circumstances as stipulated by
the CAC.
On March 22, 2024, the CAC promulgated the Provisions on Promoting and Regulating
Cross-border Data Flows (֛which became effective the same
day. According to the Provisions on Promoting and Regulating Cross-border Data Flows, where
a data processor transfers data abroad, it may be exempted from applying for a data
cross-border transfer security assessment, concluding a standard contract for personal
information to be provided abroad or passing a security certificate for protection of personal
information if it satisfies any of the following conditions: (i) where it is really necessary to
provide personal information abroad for the purpose of concluding or performing a contract to
which an individual concerned is a party, such as cross-border shopping, cross-border delivery,
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cross-border remittance, cross-border payment, cross-border account opening, air ticket and
hotel reservation, visa handling and examination services; (ii) where it is really necessary to
provide employees’ personal information abroad for the purpose of conducting cross-border
human resources management in accordance with the employment rules and regulations and
collective contracts formulated in accordance with the law; (iii) where it is really necessary to
provide personal information abroad in an emergency to protect the life, health and property
safety of a natural person; or (iv) where a data processor other than a critical information
infrastructure operator provides abroad the personal information (excluding sensitive personal
information) of not more than 100,000 persons accumulatively as of January 1 of the current
year.
On February 12, 2025, the CAC published the Administrative Measures for the
Compliance Audit of Personal Information Protection, which took effect on May 1, 2025.
According to the Administrative Measures for the Compliance Audit of Personal Information
Protection, the term “compliance audit of personal information protection” refers to the
supervision activities that review and evaluate whether the personal information processing
activities by personal information processors comply with laws and administrative regulations.
And personal information processors that process the personal information of more than 1
million individuals shall carry out the compliance audit of personal information protection at
least once every two years. Personal information processors, in any of the following
circumstances, may be required by Cyberspace Administration and other departments
performing personal information protection duties (hereinafter collectively referred to as the
“Protection Departments”) to entrust a professional agency to conduct a compliance audit of
their personal information processing activities: (1) Where significant risks are identified in the
personal information processing activities that severely impact individual rights or lack
adequate security measures; (2) Where the personal information processing activities may
infringe upon the rights and interests of a large number of individuals; (3) In the event of a
personal information security incident resulting in the leakage, tampering, loss, or destruction
of personal information of more than 1 million individuals or sensitive personal information of
more than 100,000 individuals.
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REGULATIONS RELATING TO OVERSEAS SECURITIES OFFERING AND LISTING
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the
Overseas Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձ
) (the “ Overseas Listing Trial Measures ”) and five supporting
guidelines, which came into effect on March 31, 2023.
Pursuant to the Overseas Listing Trial Measures, PRC domestic companies that seek to
offer and list securities in overseas markets, either directly or indirectly, are required to fulfill
the filing procedure with the CSRC and report the relevant information through filing reports
and legal opinions. The Overseas Listing Trial Measures provides that an overseas listing or
offering is explicitly prohibited, if any of the following: (i) such securities offering and listing
is explicitly prohibited by provisions in laws, administrative regulations and relevant state
rules; (ii) the intended securities offering and listing may endanger national security as
scrutinized and determined in accordance with law by competent authorities under the State
Council; (iii) the domestic company intending to make the securities offering and listing, or the
controlling shareholder(s) and the actual controller of such company, have committed relevant
crimes such as corruption, bribery, embezzlement, misappropriation of property or
undermining the order of the socialist market economy during the latest three years; (iv) the
domestic company intending to make the securities offering and listing is currently under
investigations for suspicion of criminal offenses or major violations of laws and regulations,
and no conclusion has yet been made thereof; or (v) there are material ownership disputes over
equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s)
that are controlled by the controlling shareholder(s) and/or actual controller.
The Overseas Listing Trial Measures also provides that the overseas securities offering
and listing will be deemed as an indirect overseas offering by PRC domestic companies if (i)
50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as
documented in its audited consolidated financial statements for the most recent fiscal year are
accounted for by PRC domestic companies; and (ii) the issuer’s principal business activities are
conducted in the PRC, or its principal place(s) of business are located in the PRC, or the senior
executives responsible for its business operations and management are mostly Chinese citizens
or persons domiciled in the PRC. Where an issuer submits an application for offering or listing
to competent overseas regulators or overseas stock exchanges, such issuer must file with the
CSRC within three business days after such application is submitted to the overseas regulators.
The Overseas Listing Trial Measures also requires subsequent reports to be filed with the
CSRC on any material events, such as change of control, investigation or punishment taken by
overseas securities regulatory authorities or other competent authorities, change of listing
status or listing plate, or voluntary or forced delisting of the issuer(s) who have completed
overseas offerings and listings.
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If domestic companies fail to fulfill the above-mentioned filing procedures or offer and
list in an overseas market against the prohibited circumstances, they would be ordered to
rectify, warned, and fined between RMB1 million and RMB10 million. The directly liable
personnel would be warned and fined between RMB0.5 million and RMB5 million. The
controlling shareholders and actual controllers of such domestic companies that organize or
instruct the aforementioned violations would be warned and fined between RMB1 million and
RMB10 million. The directly liable personnel would be fined between RMB0.5 million and
RMB5 million. The securities companies and securities service providers failing to supervise
the domestic companies for compliance of relevant rules would be warned and fined between
RMB0.5 million and RMB5 million. The directly liable personnel would be warned and fined
between RMB0.2 million and RMB2 million. Also, if there is any false records, misleading
statement or any material omission in the filing documents, the domestic companies would be
ordered to rectify, warned, and fined between RMB1 million and RMB10 million. The directly
liable personnel would be imposed warnings and fined between RMB0.5 million and RMB5
million. The controlling shareholders and actual controllers of such domestic companies who
organize or instruct the aforementioned violations or conceal the relevant matters leading to the
occurrence of the aforementioned violations would be warned and fined between RMB1
million and RMB10 million. The directly liable personnel would be fined between RMB0.5
million and RMB5 million. The securities companies or securities service providers who fail
to act with due diligence, make false records, misleading statements or material omissions in
the documents produced and issued domestically, or in the documents produced and issued
overseas which led to disruption of the domestic market order and infringement on the lawful
rights and interests of domestic investors, would be, amongst others, fined up to 10 times of
the service fees or between RMB0.5 million and RMB5 million if there are no service fees or
the service fees are less than RMB0.5 million. The directly liable personnel would be warned
and fined between RMB0.2 million and RMB2 million.
REGULATIONS ON FIRE PREVENTION
According to the Fire Prevention Law of the PRC (the “Fire Prevention Law”, ʕശɛ
) promulgated by the NPC on April 29, 1998 and amended on October 28,
2008, April 23, 2019 and April 29, 2021, respectively, and the Interim Provisions on Design
Inspection and Acceptance of Fire Protection of Construction Projects (ᄲ
) promulgated by the Ministry of Housing and Urban-Rural
Development of the PRC on April 1, 2020 and amended on August 21, 2023, for the restaurants,
teahouses or coffee houses with more than 500 square meters and with entertainment functions
are special construction projects, which must have their fire protection design reviewed by the
competent fire protection design review and acceptance authority. This authority is legally
responsible for the results of the review. If a special construction project has not undergone fire
protection design review or if the review is not passed, neither the construction unit nor the
construction company is allowed to commence construction.
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According to the revised Fire Prevention Law (revised in 2019 and 2021), the competent
housing and urban-rural development authority replaced fire prevention and rescue
departments to monitor and administer the fire protection as-built acceptance check and filing.
Upon completion of construction of a development project which is required to apply for fire
safety inspection and acceptance as stipulated by the housing and urban-rural development
authority, the developer shall apply to the housing and urban-rural development authority for
fire safety inspection and acceptance. For other development projects, the developer shall
complete filing formalities with the housing and urban-rural development authority following
the inspection and acceptance, the housing and urban-rural development department shall
conduct spot check. Pursuant to the Fire Prevention Law, the construction project that fails to
complete as-built acceptance check on fire prevention shall be ordered by the relevant
government authorities to close and shall be fined not less than CNY30,000 but not more than
CNY300,000. The construction project that fails to complete fire safety filing shall be ordered
to rectify and be subject to a fine of up to CNY5,000.
The Opinion on the Deepening the Reform of Fire Control Law Enforcement (ଉ
จԈ) promulgated jointly by the General Office of the CPC Central
Committee and the General Office of the State Council on May 30, 2019, provides for the
simplification of the fire protection inspections of public gathering places before their use and
operation, and management in the form of a notification and a representation to safety
standards. Fire protection authorities shall formulate the standards for fire safety in public
gathering places and disclose such standards to the public, making available the text in the
form of the letter of notification and representation to safety standards. A public gathering
place shall, after obtaining the business license or being qualifying for use and operation under
the law, commence use or operation by making a representation to the fire protection
authorities that it has reached the standards for fire safety through an application face-to-face
or via the online governmental affairs service platform. In practice, the relevant authority at its
locality may formulate and implement relevant fire protection policies or implementation rules
according to local conditions. Pursuant to the Fire Prevention Law amended on April 29, 2021,
the fire safety inspection of public gathering places before they are put into use and open for
business shall be subject to the management of notification and representation. Before the use
or commencement of the business operations of public gathering places, the construction
entities or the entities using such places shall file an application for fire safety inspection with
the fire rescue agencies of the local people’s governments of such places at or above the county
level, and make a representation that the place meets the fire control technical standards and
management regulations, and submit the requisite materials and be responsible for the
authenticity of their representations and the submitted materials. The fire rescue agency
inspects the materials submitted by the applicant, if the application materials are complete and
conform to legal forms, approval shall be granted. Fire rescue agencies shall, in accordance
with fire control technical standards and management regulations, conduct timely verification
on the public gathering places that have made representations. If the applicant chooses not to
take the form of notification and representation, the fire rescue agency shall inspect the site in
accordance with fire control technical standards and management regulations within 10
working days from the date of accepting the application. Approval shall be given to those
meeting the fire control safety requirements through inspection. Public gathering places shall
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not be put into use or open for business without approval of fire rescue agencies. If the public
gathering places are put into use or open for business without approval of fire rescue agencies,
or the use or business conditions of such places are found to be inconsistent with the contents
promised after the verification of fire rescue agencies, such places shall be ordered to
discontinue the use, production or operation and be fined not less than RMB30,000 but not
more than RMB300,000.
LA WS AND REGULATIONS ON ENVIRONMENTAL PROTECTION
The Environmental Protection Law of the PRC (the “Environmental Protection Law”,
) was promulgated and effective on December 26, 1989, and
amended on April 24, 2014. This Legislation has been formulated for the purpose of protecting
and improving both the living environment and the ecological environment, preventing and
controlling pollution, other public hazards and safeguarding people’s health.
According to the provisions of the Environmental Protection Law, in addition to other
relevant laws and regulations of the PRC, the Ministry of Environmental Protection and its
local counterparts take charge of administering and supervising said environmental protection
matters. According to the provisions of the Environmental Protection Law, the environmental
impact statement shall be made for any such construction project and construction projects
which have not carried out environmental impact assessment shall not commence construction.
Installations for the prevention and control of pollution in construction projects must be
designed, built and commissioned together with the principal part of the project.
Installations for the prevention and control of pollution shall not be dismantled or left idle
without authorization.
The Environmental Protection Law makes it clear that the liabilities for any violation of
said law include, fine, rectification within a time limit, compulsory ceasing of operations,
compulsory shutout or closedown, restitution, or even criminal punishment.
Law on Environment Impact Assessment
Pursuant to Law of the PRC on Environment Impact Assessment ( ʕശɛ͏΍ձ਷ᐑྤ
), which was issued on October 28, 2002 and amended on July 2, 2016 and
December 29, 2018, the State implements a classification-based management on the
environmental impact assessment (the “EIA”) of construction projects according to the impact
of the construction projects on the environment. Construction units shall prepare the
Environmental Impact Report (the “EIR”) or the Environmental Impact Statement (the “EIS”)
or fill out the Environmental Impact Registration Form (the “EIRF”) (hereinafter collectively
referred to as the “EIA documents”) according to the following rules: 1. For projects with
potentially serious environmental impacts, an EIR shall be prepared to provide a
comprehensive assessment of their environmental impacts; 2. For projects with potentially
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mild environmental impacts, an EIS shall be prepared to provide an analysis or specialized
assessment of their environmental impacts; and 3. For projects with very small environmental
impacts so that an EIA is not required, an EIRF shall be filled out.
The EIR or EIS of a construction project shall be submitted by the construction unit in
accordance with the regulations of the State Council to the ecological environment department
with powers to approve the project for review and approval. The State shall implement a
record-filing-based management on EIRF. However, according to the Catalogue for the
Classified Administration of the Environmental Impact Assessment of Construction Projects
(2021) (ணධͦᐑྤᅂᚤ൙ᄆʱᗳ၍ଣΤ፽(2021و)), construction projects with
regard to the catering industry are no longer required to submit the EIA documents.
Law on the Environmental Protection of Construction Projects
According to the Administrative Regulations on the Environmental Protection of
Construction Projects (ᚐ၍ଣૢԷ) effective as of November 29, 1998
and as amended on July 16, 2017, after the completion of a construction project for which an
environmental impact report or environmental impact statement is prepared, the construction
unit shall make an acceptance check of the matching environmental protection facilities and
prepare an acceptance report according to the standards and procedures stipulated by the
competent administrative department of environmental protection under the State Council.
A construction unit shall be punished in accordance with the Law of the PRC on
Environmental Impact Assessment if it: 1. commences construction before submitting the
environmental impact report or environmental impact statement of the construction project for
approval or re-examination in accordance with the law; 2. commences construction without
authorization before the environmental impact report or environmental impact statement of the
construction projects is approved or approved after re-examination; or 3. fails to file the
environmental impact registration form of the construction project for record in accordance
with the law.
Law on Prevention and Control of Water Pollution
The Law on Prevention and Control of Water Pollution of the PRC (the “Water Pollution
Prevention and Control Law”,) first came into effect as of
November 1, 1984 and was subsequently amended on May 15, 1996, February 28, 2008, and
June 27, 2017, respectively. The law applies to the prevention and control of pollution of rivers,
lakes, canals, irrigation channels, reservoirs and other surface water bodies and groundwater
within the PRC. According to the provisions of the Water Pollution Prevention and Control
Law and other relevant laws and regulations of the PRC, the Ministry of Environmental
Protection and its local counterparts at or above county level shall take charge of the
administration and supervision on the matters of prevention and control of water pollution.
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Enterprises that engage in the activities of industry, construction, catering, and medical
treatment, etc. that discharges sewage into urban drainage facilities shall apply to the relevant
competent urban drainage department for collecting the permit for discharging sewage into
drainage pipelines under relevant laws and regulations, including the Regulations on Urban
Drainage and Sewage Disposal (ᕄર˥ၾϮ˥ஈଣૢԷ), which was promulgated on
October 2, 2013 and came into force on January 1, 2014, and the Measures for the
Administration of Permits for the Discharge of Urban Sewage into the Drainage Network (۬
), which came into force on March 1, 2015 and was
subsequently amended on December 1, 2022. Drainage entities covered by urban drainage
facilities shall discharge sewage into urban drainage facilities in accordance with the relevant
provisions of the state. Where a drainage entity needs to discharge sewage into urban drainage
facilities, it shall apply for a drainage license in accordance with the provisions of these
Measures. The drainage entity that has not obtained the drainage license shall not discharge
sewage into urban drainage facilities. Urban residents that discharge domestic sewage are not
required to apply for the drainage license.
LA WS AND REGULATIONS ON LABOR
Labor Contract Law
According to the Labor Contract Law of the PRC (the “Labor Contract Law”, ʕശɛ
), which was implemented on January 1, 2008 and amended on
December 28, 2012, labor contracts must be concluded in writing if labor relationships are to
be or have been established between enterprises or institutions and the laborers. Enterprises
and institutions are forbidden to force the laborers to work beyond the time limit and the
employers must pay laborers compensation for working overtime in accordance with national
regulations. Labor wages must not be lower than local minimum wage standards and must be
paid to the laborers in a timely manner. According to the Labor Law of the PRC ( ʕശɛ͏
) effective as of January 1, 1995, as amended on August 27, 2009 and
December 29, 2018, enterprises and institutions must establish and perfect their system of work
place safety and sanitation, strictly abide by state rules and standards and educate laborers
regarding the same. Workplace safety and sanitation facilities must comply with state-fixed
standards.
Production Safety Law
Pursuant to the Law on Work Safety of the PRC (the “Law on Work Safety”, ʕശɛ͏
) (Order No. 70 of the PRC President, effective on November 1, 2002 and
amended on August 27, 2009, August 31, 2014 and June 10, 2021 respectively), enterprises
engaged in production activities must strengthen safety production management, establish and
improve the responsibility system for safe production and ensure a safe production
environment. The State establishes and implements a system for the accountability of
production safety accidents. If the company fails to comply with the provisions of the Law on
Work Safety, the supervisory authority on production safety may issue a rectification order,
impose a fine, order the company to cease production and operation, or revoke the relevant
permit.
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Regulations on Social Insurance and Housing Fund
According to the Social Insurance Law of the PRC ()
effective as of July 1, 2011 and as amended on December 29, 2018, the Regulations on
Occupational Injury Insurance (ᎈૢԷ) effective as of January 1, 2004 and as
amended on December 20, 2010, the Interim Measures concerning Maternity Insurance for
Enterprise Employees () effective as of January 1, 1995, the
Interim Regulations concerning the Levy of Social Insurance (ᎈ൬ᅄᖮᅲБૢԷ)
effective as of January 22, 1999 and as amended on March 24, 2019 and the Regulations
concerning the Administration of Housing Fund (၍ଣૢԷ) effective as of
April 3, 1999, and amended on March 24, 2002 and March 24, 2019, enterprises and
institutions in the PRC must provide their employees with welfare schemes covering pension
insurance, unemployment insurance, maternity insurance, occupational injury insurance and
medical insurance, as well as a housing fund and other welfare plans.
LA WS ON INTELLECTUAL PROPERTY RIGHTS
Trademarks
Trademarks are protected by the PRC Trademark Law ()
which was adopted in 1982 and subsequently amended in 1993, 2001, 2013 and 2019,
respectively, as well as the Implementation Regulation of the PRC Trademark Law ( ʕശɛ
ૢԷ) adopted in 2002 and amended in 2014 by the State Council. The
Trademark Office under National Intellectual Property Administration (the “NIPA”) handles
trademark registrations and grants a term of ten years to registered trademarks which may be
renewed for consecutive ten-year periods upon request by the trademark owner. The trademark
registrant may, by concluding a trademark licensing contract, authorize other persons to use the
registered trademark. The licensor shall supervise the quality of the goods for which the
licensee uses the licensor’s registered trademark, and the licensee shall guarantee the quality
of the goods for which the registered trademark is used. The party authorized to use another’s
registered trademark must indicate the name of the licensee and the place of origin on the goods
that bear the registered trademark. When granting others use of the registered trademarks, the
licensor shall file the trademark license with the Trademark Office for their records, and the
Office shall announce the same. Without putting the trademark license on record, the trademark
may not be used to defend a bona fide third party.
Domain Names
The Measures for the Administration of Internet Domain Names (the “Domain Name
Measures”,) was promulgated by the Ministry of Industry and
Information Technology of the PRC on August 24, 2017 and came into effect on November 1,
2017. The Implementation Rules for National Top-level Domain Name Registration (the
“Implementation Rules for Registration”,) was promulgated
by the China Internet Network Information Center on June 18, 2019 and came into effect on
the same date. The Domain Name Measures regulate the registration of domain names.
Application for registration of national top-level domain names “.CN” and “.China” and
provision of national top-level domain name registration related services shall further comply
with the Implementation Rules for Registration.
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Patent
The SCNPC adopted the PRC Patent Law () in 1984 and
amended it in 1992, 2000, 2008 and 2020, respectively. A patentable invention or utility model
must meet three conditions, e.g. novelty, inventiveness and practical applicability. Patents will
not be granted for scientific discoveries, rules and methods for intellectual activities, methods
used to diagnose or treat diseases, animal and plant breeds or substances obtained by means of
nuclear transformation. The Patent Office under the State Intellectual Property Office is
responsible for receiving, examining and approving patent applications. A patent is valid for a
twenty-year term for an invention, a ten-year term for a utility model, or a fifteen-year term
for a design, starting from the application date. Except for certain specific circumstances
provided by law, any third-party users must obtain consent or a proper license from the patent
owners to use the patent, otherwise the use of patent will constitute an infringement of the
rights of the patent holder.
REGULATIONS ON FOREIGN EXCHANGE
Pursuant to the Foreign Exchange Administrative Regulations of the PRC ( ʕശɛ͏΍
ձ਷̮ි၍ଣૢԷ), as amended in August 5, 2008, the RMB is freely convertible for current
account items, including for 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 the PRC,
unless prior approval of the State Administration of Foreign Exchange (“SAFE”) is obtained
and prior registration with SAFE is made.
Pursuant to the Circular on Relevant Issues concerning Foreign Exchange Administration
of Overseas Investment and Financing and Return Investments Conducted by Domestic
Residents through Overseas Special Purpose V ehicles (the “SAFE Circular No. 37”,ྤ
), promulgated by
SAFE and which became effective on July 4, 2014, (a) a PRC resident (“PRC Resident”) shall
register with the local SAFE branch before he or she contributes assets or equity interests in
an overseas special purpose vehicle (“Overseas SPV”), that is directly established or controlled
by the PRC Resident for the purpose of conducting investment or financing; and (b) following
the initial registration, the PRC Resident is also required to register with the local SAFE branch
for any major change, in respect of the Overseas SPV , including, among other things, a change
of the Overseas SPV’s PRC Resident shareholder(s), name of the Overseas SPV , term of
operation, or any increase or reduction of the Overseas SPV’s registered capital, share transfer
or swap, and merger or division. Pursuant to SAFE Circular No. 37, failure to comply with
these registration procedures may result in penalties.
According to the Circular of the State Administration of Foreign Exchange on Further
Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment
(“Circular 13”,),
which was promulgated on February 13, 2015 and with effect from June 1, 2015, enterprises
are not required to get foreign exchange registration approval under domestic direct investment
or overseas direct investment. Domestic investors (including domestic foreign-invested
enterprises, domestic investing entities of foreign enterprises) should carry out foreign
exchange registration of direct investment with banks.
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According to the Circular of the State Administration of Foreign Exchange on Reforming
the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-
invested Enterprises (“Circular 19”,ഐි
) promulgated on March 30, 2015 and effective on June 1, 2015 and the
Circular of the State Administration of Foreign Exchange on Reforming and Regulating
Policies on the Control over Foreign Exchange Settlement under Capital Accounts (“Circular
16”,) promulgated and
effective on June 9, 2016, domestic enterprises (including Chinese-funded enterprises and
foreign-invested enterprises, excluding financial institutions) may go through foreign exchange
settlement formalities for their foreign debts at their discretion. Where the current regulations
contain any restrictive provisions on the foreign exchange settlement of foreign exchange
receipts under capital accounts of domestic institutions, such provisions shall prevail.
Domestic institutions may, at their discretion, settle up to 100% of foreign exchange receipts
under capital accounts for the time being. The SAFE may adjust the above proportion in due
time according to the balance of payments. While being eligible for discretionary settlement of
foreign exchange receipts under capital accounts, domestic institutions may also opt to use
their foreign exchange receipts according to the payment-based settlement system. A bank
shall, in handling each transaction of foreign exchange settlement for a domestic institution
according to the principle of payment-based settlement, review the authenticity and compliance
of the use of the funds settled in the previous transaction (including discretionary settlement
and payment-based settlement) of such institution.
The Circular of the State Administration of Foreign Exchange on Further Promoting
Cross-border Trade and Investment Facilitation (“Circular 28”,ආɓӉ
) was promulgated and became effective on October 23,
2019. According to the Circular 28, non-investment foreign-funded enterprises are allowed to
lawfully make domestic equity investments using their capital if the domestic investment
projects are in compliance with the prevailing special administrative measures for access of
foreign investments and the relevant regulations.
LA WS AND REGULATIONS ON EMPLOYEE INCENTIVE PLANS
On February 15, 2012, the SAFE promulgated the Circular on Issues concerning the
Administration of Foreign Exchange Used for Domestic Individuals’ Participation in Equity
Incentive Plans of Companies Listed Overseas (“Circular 7”,ɛਞၾྤ̮ɪ̹ʮ
). According to Circular 7 and other relevant
provisions and rules, Chinese residents participating in the equity incentive plans of overseas
listed companies must file a registration and carry out other certain procedures with the SAFE
or its local institutions. Chinese residents participating in equity incentive plans must employ
a qualified Chinese agent, which may be the Chinese affiliated company of such overseas listed
company or any other qualified domestic organization appointed by such affiliate, to file the
registration and carry out other procedures related to equity incentive plans on their behalf.
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The participants must employ an overseas entrusted organization to deal with the
execution of share options, transactions relating to shares or rights, fund transfers, etc. In
addition, if any material changes are made to the equity incentive plan, Chinese agent or
overseas entrusted organization, the Chinese agent shall file the change registration concerning
the equity incentive plan. The Chinese agent shall, on behalf of the Chinese resident who has
the right to exercise the employee’s share options, apply to the SAFE or its local branch for
the amount of annual foreign exchange payment in respect of the foreign currency payment
related to the exercise of the employee’s share options by the Chinese resident. The foreign
exchange income received by the Chinese resident from the sale of shares under the equity
incentive plan and the dividends received from overseas listed companies shall be remitted to
the bank account opened in Mainland China by the Chinese agent before distribution to such
Chinese residents.
TAXES
Corporate Income Tax
Pursuant to the Enterprise Income Tax Law of the PRC (੻೼
), which was promulgated on March 16, 2007 and last amended on December 29, 2018,
and the Regulation on the Implementation of the Enterprise Income Tax Law of the PRC ( ʕ
ૢԷ) which was promulgated on December 6, 2007 and
further amended on April 23, 2019, the income tax rate for both domestic and foreign-invested
enterprises is 25%. Furthermore, resident enterprises, which are enterprises that are set up in
accordance with PRC law, or that are set up in accordance with the law of a foreign country
(region) but with their actual administration institution in the PRC, must pay enterprise income
tax originating both within and outside the PRC. While non-resident enterprises that have set
up institutions or premises in the PRC shall pay enterprise income tax in relation to their
income originating from the PRC and obtained by their institutions or establishments, and their
income incurred outside the PRC but where there is an actual relationship with the institutions
or establishments set up by such enterprises. Non-resident enterprises that have not set up
institutions or establishments in the PRC, or where institutions or establishments are set up but
where there is no actual relationship with the income obtained by the institutions or
establishments set up by such enterprises, they must pay enterprise income tax in relation to
the income originating from the PRC at the rate of 10%.
Value-added Tax
Pursuant to the Provisional Regulations on V alue-added Tax of the PRC ( ʕശɛ͏΍
೼ᅲБૢԷ) promulgated on December 13, 1993 and last amended on November
19, 2017 and its implementation rules, all entities or individuals in the PRC engaging in the
sale of goods, the provision of processing services, repairs and replacement services, and the
importation of goods are required to pay value-added tax (the “V A T”). Pursuant to the Circular
on Comprehensively Promoting the Pilot Program of the Collection of V alue-added Tax in Lieu
of Business Tax () promulgated on March 23,
2016 and as amended on July 11, 2017, December 25, 2017 and March 20, 2019 respectively,
REGULATORY OVERVIEW
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upon approval of the State Council, as of May 1, 2016, the pilot program of the collection of
value-added tax in lieu of business tax shall be promoted nationwide in a comprehensive
manner, and all taxpayers of business taxpayers 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.
Pursuant to the Provisional Regulations on V alue-added Tax of the PRC, the Circular on
Comprehensively Promoting the Pilot Program of the Collection of V alue-added Tax in Lieu of
Business Tax, the Circular of the Ministry of Finance and the State Administration of Taxation
on Adjusting V alue-added Tax Rates ()
promulgated by Ministry of Finance and State Administration of Taxation on April 4, 2018 and
became effective on May 1, 2018, and the Announcement on Relevant Policies for Deepening
V alue-Added Tax Reformʮ
ѓ promulgated by the Ministry of Finance, the State Administration of Taxation and General
Administration of Customs on March 20, 2019 and became effective on April 1, 2019, with
respect to V A T taxable sales of a V A T general taxpayer, the applicable V A T rates are 13%, 9%
and 6% respectively.
REGULATORY OVERVIEW
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OVERVIEW
We are a well-known operator of casual Chinese restaurants in Mainland China. Our
Company was incorporated in the Cayman Islands on June 4, 2015 and is the holding company
of our Group. Our business history traces back to 2008 when Mr. Wang and Ms. Lu (the spouse
of Mr. Wang), our co-founders, started our first Green Tea restaurant under the brand “Green
Tea” by the beautiful West Lake in Hangzhou, Zhejiang province. Prior to the opening of Green
Tea restaurant, Mr. Wang and Ms. Lu operated a youth hostel next to the West Lake in
Hangzhou, Zhejiang province where they explored the opportunity of setting up a business
venture in food and beverage industry focusing on innovative modern Chinese fusion cuisine.
Please refer to section headed “Directors and Senior Management – Directors – Executive
Directors” for the relevant industry experience of Mr. Wang and Ms. Lu.
Over the years, we have gradually expanded our restaurants, covering 21 provinces, four
municipalities and two autonomous regions in the PRC, as well as Hong Kong SAR. As of the
Latest Practicable Date, our restaurant network consisted of 493 restaurants, covering Hong
Kong SAR, as well as all tier one cities, 15 new tier one cities, 31 tier two cities, and 90 tier
three cities and below in the PRC.
BUSINESS MILESTONE
The following is a summary of our key business development milestones since our
inception:
Y ear Event
2008 We established our first Green Tea restaurant in Hangzhou, Zhejiang
province
2009 Our Green Tea restaurant was awarded 2009 Top 50 Most Popular
Restaurant (2009᎛ᝂ Top 50) by Dianping.com ( ɽ଺ᓃ൙)
2010 We opened our first Green Tea restaurant in Beijing, China and started
building our presence in tier one cities of China
2011 We opened our first Green Tea restaurant in Shanghai, China
2013 We opened our first Green Tea restaurant in Shenzhen, China
2015 Our Green Tea restaurant was awarded 2015 Top 10 Creative Culture
Restaurants (2015ܓ(ਕ)ɤԳ௴จ˖ʷ᎛ᝂ) by Chinese
Culinary Association
2018 We opened our 100
th Green Tea restaurant in Mainland China
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Y ear Event
2020 “Green Tea” brand was recognized as “Top 50 Most Influential Chain
Brand in China” (೐ᅂᚤɢ50੶) by Committee of
Development of China Brand Chain Conference (ɽ
ึ)
2021 We were recognized as Dianping’s “Must-Eat List” Restaurants ( ɽ଺ᓃ
൙“̀Φ࿮”᎛ᝂ) by Dianping.com ( ɽ଺ᓃ൙)
2023 We were awarded Meituan Waimai Best Category Innovation Award of
the Y ear of 2022 (ᗳ௴อᆤ) by Meituan Waimai
(ྠ̮ር)
2023 We were recognized as “Consumer’s Favorite Brand” (೐)
by Meituan (ྠ)
2024 We were awarded Red Eagle Award – Top 100 Catering Brands in 2024
(᜻ᆤ2024೐ɢϵ੶) by Hong Can Industry Research
Institute (Ӻ৫)
2024 We were recognized as “Annual Influential Brand” (೐)b y
Meituan (ྠ)
INFORMATION ON MEMBERS OF OUR GROUP
As of the Latest Practicable Date, we have a total of 402 intermediate holding companies
and subsidiaries in the PRC, the Republic of Seychelles and Hong Kong SAR. We set forth
below information on our subsidiaries that made material contribution to our results of
operations during the Track Record Period:
Name of subsidiary
Date of
establishment
Place of
establishment
Ownership as
of the date of
this prospectus
Principal business
activities
1. HK Green Tea Group August 21,
2015
Hong Kong
SAR
100% Investment holding
2. Hangzhou Dinghuan March 27,
2017
PRC 100% Restaurant
operations
3. Green Tea WFOE December 23,
2015
PRC 100% Investment holding
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Name of subsidiary
Date of
establishment
Place of
establishment
Ownership as
of the date of
this prospectus
Principal business
activities
4. Tibet Green Tea F&B March 30,
2016
PRC 100% Restaurant
operations
5. Zhejiang Lvqin December 29,
2020
PRC 100% Food procurement
We describe below the major changes in the shareholding of our Company and our
material operating subsidiaries up to the date of this prospectus:
Our Company
Our Company is the holding company of our Group. Our Company was incorporated as
an exempted company with limited liability in the Cayman Islands on June 4, 2015. At the time
of incorporation, our Company had an authorized share capital of US$50,000 divided into
50,000 ordinary shares of a nominal or par value of US$1.00 each. On July 9, 2015, one
ordinary share of our Company was issued and allotted to an initial subscriber, who on the
same day transferred the same to Time Sonic. On July 9, 2015, our Company allotted and
issued 9,999 ordinary shares, each with a par value of US$1.00, at par to Time Sonic.
Since the incorporation of our Company, we have completed one round of Strategic
Investment. On May 25, 2017, our Company repurchased 2,688 ordinary shares from Time
Sonic for an aggregate consideration of US$2,688.0 which was paid out of the proceeds from
the issuance of new Series-A Preferred Shares to Time Sonic (the “ Repurchase ”) as described
below. Upon completion of the Repurchase, the repurchased shares were cancelled. On the
same date following the Repurchase, the authorized share capital of US$50,000 was
re-designated and divided into 46,867 ordinary shares of a nominal or par value of US$1.00
each and 3,133 Series-A Preferred Shares of a nominal or par value of US$1.00 each (the
“Re-designation ”).
After the Re-designation on May 25, 2017, pursuant to the Strategic Investment, 2,688
and 445 Series-A Preferred Shares were issued and allotted to Time Sonic and Partners
Gourmet with a consideration of US$2,688.0 and US$10,036,686.7, respectively. On the same
date, Time Sonic transferred 2,688 Series-A Preferred Shares to Partners Gourmet with a
consideration of US$60,594,465.7 which was determined based on arm’s length negotiations
between the parties after taking into account the then operating results and prospect of our
business and operating entities. Upon completion of the Strategic Investment, a total of 7,312
ordinary shares and 3,133 Series-A Preferred Shares were held by Time Sonic and Partners
Gourmet, accounting for approximately 70.0% and 30.0% of the equity interests in our
Company, respectively. For further details, see the paragraphs headed “Strategic Investment”
and “Reorganization” in this section.
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On March 22, 2021, in preparation of the Listing, each ordinary share of par value
US$1.00 each was sub-divided into 50,000 Shares of par value US$0.00002 each, and each
Series-A Preferred Share with a par value of US$1.00 each was subdivided into 50,000
Series-A Preferred Shares with a par value of US$0.00002 each. Accordingly, the authorized
share capital of the Company comprises 2,343,350,000 Shares with a par value of US$0.00002
each and 156,650,000 Series-A Preferred Shares with a par value of US$0.00002 each.
HK Green Tea Group
HK Green Tea Group was incorporated in Hong Kong SAR with limited liability on
August 21, 2015. Upon incorporation, 10,000 shares were issued and allotted to Everlasting
Thrive Limited. As of the Latest Practicable Date, HK Green Tea Group was wholly owned by
Everlasting Thrive Limited. During the Track Record Period, our Company has exercised
control over Everlasting Thrive Limited.
Hangzhou Dinghuan
Hangzhou Dinghuan was established as a limited liability company in the PRC on March
27, 2017 with a registered capital of RMB10.0 million and was wholly owned by HK Green
Tea Group. As of the Latest Practicable Date, Hangzhou Dinghuan was wholly owned by HK
Green Tea Group.
Green Tea WFOE
Green Tea WFOE was established as a wholly foreign-owned in the PRC on December 23,
2015 with a registered capital of RMB0.5 million and was wholly owned by HK Green Tea
Group. The registered share capital was increased to RMB10.0 million by injection of
additional capital by HK Green Tea Group in July 12, 2018. As of the Latest Practicable Date,
Green Tea WFOE was wholly owned by HK Green Tea Group.
Tibet Green Tea F&B
Tibet Green Tea F&B was established as a limited liability company in the PRC on March
30, 2016 with a registered capital of RMB10.0 million and was wholly owned by Green Tea
WFOE. The registered capital of Tibet Green F&B was increased to RMB20.0 million in April
13, 2017 by injection of additional capital of RMB10.0 million by Hangzhou Dinghuan. As a
result of the above capital injection, Tibet Green Tea F&B was owned by Hangzhou Dinghuan
and Green Tea WFOE as to 50.0% and 50.0%, respectively. The registered capital of Tibet
Green F&B was increased to RMB20.4 million in February 27, 2023 by injection of additional
capital of RMB408,200 by Hangzhou Dinghuan. As a result of the above capital injection,
Tibet Green Tea F&B was owned by Hangzhou Dinghuan and Green Tea WFOE as to 51.0%
and 49.0%, respectively. As of the Latest Practicable Date, Tibet Green Tea F&B was held as
to 51.0% by Hangzhou Dinghuan and as to 49.0% by Green Tea WFOE.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Zhejiang Lvqin
Zhejiang Lvqin was established as a limited liability company in the PRC on December
29, 2020 with a registered capital of RMB10.0 million and was owned by Tibet Green Tea
Enterprise and Shenzhen Green Tea Trading as to 99.9% and as to 0.1%, respectively. As of the
Latest Practicable Date, Zhejiang Lvqin was held as to 99.9% by Tibet Green Tea Enterprise
and 0.1% by Shenzhen Green Tea Trading.
Major Acquisitions and Disposals
We did not conduct any major acquisitions, disposals or mergers during the Track Record
Period and up to the Latest Practicable Date.
STRATEGIC INVESTMENT
Pursuant to the subscription and purchase agreement dated January 17, 2017
(“Subscription and Purchase Agreement ”) entered into among our Company, Time Sonic,
our Controlling Shareholders and Partners Gourmet, Time Sonic transferred 2,688 Series-A
Preferred Shares, representing approximately 25.74% of the then total issued shares of our
Company on a fully diluted basis after the completion of subscription, to Partners Gourmet and
our Company issued 445 Series-A Preferred Shares, representing approximately 4.26% of the
then total issued shares of our Company on a fully diluted basis after the completion of
subscription. After the transfer and the subscription, our Company was held as to
approximately 30.0% by Partners Gourmet.
Principal Terms of the Strategic Investment
The following table sets out a summary of the principal terms of the equity investment
by Partners Gourmet:
Completion of the
subscription and payment
date of the consideration
: May 25, 2017
Amount of consideration
paid
: USD70,631,152.4
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Basis of determining the
consideration
: The consideration was determined based on arm’s
length negotiations between Partners Gourmet,
our Company and the Controlling Shareholders
after taking into consideration the then
consolidated operating results from 2013 to 2016,
the scale of operation of our Company, enterprise
value to EBITDA multiples with reference to
comparable private and public companies in the
market, and prospect of our business and
operating entities. Such valuation has not been
assessed by any third party.
Cost per Share paid
(1) : USD0.45
Discount to the Offer Price : 51.6%
Shareholding in the
Company immediately
after the investment
: Approximately 30.0%
Shareholding in the
Company immediately
after the completion of the
Global Offering (assuming
the Over-allotment Option
is not exercised)
: Approximately 15.76%
Use of strategic investment
proceeds
: The proceeds are intended to be utilized towards
our general working capital and expansion of
restaurant network. As of the Latest Practicable
Date, all of the proceeds from the strategic
investments had been utilized.
Strategic benefits to the
Company
: Our Directors are of the view that our Company
would benefit from the additional capital
provided by Partners Gourmet in our Company
and their investments serve as an endorsement of
our Company’s strength and prospects.
Note:
(1) The approximate cost per Share is calculated based on the amount of consideration paid by Partners
Gourmet divided by the number of Shares to be held by it as at the date of this prospectus.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Special Rights Granted to Partners Gourmet
With respect to the Strategic Investment, Partners Gourmet has been granted certain
special rights in relation to our Company, including, rights of first refusal, right of first
offering, co-sale rights, information rights and inspection rights, nomination rights, veto rights
on certain matters relating to our Group and redemption rights. The redemption rights shall
terminate and be of no further force or effect immediately before the Company submits its
application for the listing of our Shares on the Stock Exchange (the “ Submission ”), provided
in the event where the Submission is withdrawn, rejected, lapses and is not renewed within a
prescribed period of time, or the Company fails to consummate the Global Offering, such
redemption rights shall automatically be reinstated in full. All other special rights will be
terminated automatically upon completion of the Global Offering.
Each Series-A Preferred Share will be converted into one ordinary Share of US$0.00002
par value pursuant to Preferred Shares Conversion.
Information about Partners Gourmet
Partners Gourmet was incorporated under the laws of Cayman Islands on December 8,
2016, and was an investment holding company jointly owned by Partners Group Global V alue
SICA V (tradable fund, no limited partners) as to 32.2%, Partners Group Barrier Reef, L.P . (with
one general partner and one limited partner) as to 31.8%, Partners Group Global V alue 2014
(EUR) S.C.A., SICAR (with one general partner and 23 limited partners) as to 13.2%, SEDCO
Partners Group Opportunities Fund, L.P . (with one general partner and two limited partners) as
to 12.8%, Partners Group Global Growth 2014, L.P . Inc. (with one general partner and 18
limited partners) as to 4.3%, Partners Group Emerging Markets 2015, L.P . Inc. (with one
general partner and 13 limited partners) as to 4.3%, and Partners Group Access 564 L.P . (with
74 limited partners) as to 1.4%, which are investment vehicles managed and/or advised by
entities ultimately controlled by Partners Group. Partners Group is a global private market
investment manager listed on the SIX Swiss Exchange and has approximately USD152 billion
in assets under management as of December 31, 2024. Its investment sector coverage includes
private equity, private debt, private real estate and private infrastructure. Other than its
strategic investment in our Company, Partners Group has also invested in (i) a chain retailer
that offers a one-stop solution of baby products, (ii) a service provider that engages in design,
manufacturing and installation of retail display fixtures, and (iii) a cross-border logistics
service provider, in the PRC.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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We became acquainted with Partners Group in 2015 through introduction by private
equity investment team of Partners Group through their professional network. After its
assessment of the restaurant industry in Mainland China in 2015 and various meetings with our
Directors over the course of two years, Partners Gourmet decided to invest in our Company
after taking in account (i) the Green Tea brand reputation with nationwide coverage; (ii)
standardized and scalable business model; and (iii) the strong fit and aligned objectives
between our Company and Partners Group. Following the completion of the Global Offering
(assuming the Over-allotment Option is not exercised), Partners Gourmet will be interested in
106,140,800 Shares, representing approximately 15.76% of the total number of our Shares in
issue. As Partners Gourmet will be a substantial shareholder of our Company, hence the Shares
held by Partners Gourmet will not be treated as part of the public float of our Company
following Listing for the purpose of Rule 8.08 of the Listing Rules. Partners Gourmet will be
subject to a lock-up period of six months after Listing. The share price offered to Partners
Gourmet was substantially lower than the Offer Price because the then scale of operation of our
Company was relatively smaller with a total of 61 restaurants in 2016, and has reflected the
equity risk assumed by Partners Gourmet in investing in an unlisted company. Although the
share price offered to Partners Gourmet was substantially lower than the Offer Price and the
valuation has not been assessed by any third party, the Directors consider that the basis of
determination of the consideration was fair and reasonable as the valuation was determined
based on earnings before interest, taxes and amortization (EBITDA) of the Company in 2016
and enterprise value to EBITDA multiples with reference to comparable private and public
companies. Our Company, having taken into consideration that (i) the strategic investment and
the additional expertise would be beneficial to the future business development at the
prevailing time; (ii) the Listing is conditional and may or may not go forward; (iii) the equity
risk assumed by Partners Gourmet in investing in an unlisted company; and (iv) the basis of
determination of the consideration as disclosed above, believes that despite the significant
discount to the Offer Price, it is in our commercial interests to enter into the strategic
investment.
Compliance with the Guide
The Joint Sponsors have confirmed that the terms of the strategic investment as described
above are in compliance with the Chapter 4.2 under the Guide.
REORGANIZATION
In anticipation of the Listing, we underwent the Reorganization pursuant to which our
Company became the holding company and listing vehicle of our Group.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Set forth below is a diagram of our corporate structure immediately before the
Reorganization:
Our Company
(Cayman Islands)
100%
100%
100%
100%
100%
100%
100%
100% 100% 100% 81.0%
100%
100%Onshore
Offshore
HK August Fountain
(Hong Kong SAR)
HK Guan Dong Zao
(Hong Kong SAR)
HK Green Tea Group
(Hong Kong SAR)
Hong Kong Weitai
Group Company Limited
(Hong Kong SAR)
Shenzhen Qianhai Weitai
Investment Consultancy
Company Limited
(PRC)
Hongquan WFOE
(PRC)
Guandongzao
WFOE
(PRC)
Green Tea WFOE
(PRC)
Tibet Green Tea
Enterprise
(PRC)
Shenzhen Green Tea
Trading
(PRC)
Tibet
Guandongzao
(PRC)
Tibet
Guandongzao F&B
(PRC)
Tibet
Green Tea F&B
(PRC)
100%
100%
100%
100%
100%
Flourish Thrive Limited(1)
(Republic of Seychelles)
Everlasting Thrive
Limited
(Republic of Seychelles)
Emperor Favour
Limited
(Republic of Seychelles)
August Fountain
Limited
(Republic of Seychelles)
Mr. WangMs. Lu
49.0%51.0%
100% 100%
Yielding Sky
(Republic of Seychelles)
Contemporary Global
Investments
(Republic of Seychelles)
Time Sonic
(Republic of Seychelles)
Note:
(1) The remaining 10.0% and 9.0% equity interest in Flourish Thrive Limited was ultimately held by Mr. Shen
Lian and Mr. Zhou Hailong, all of which were independent third parties, respectively.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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We underwent the following steps in effecting the Reorganization:
1. Acquisition and subscription of Series-A Preferred Shares by Partners Gourmet
On January 17, 2017, our Company, Time Sonic, Mr. Wang, Ms. Lu and Partners Gourmet
entered into a subscription and purchase agreement for the transfer and subscription of
Series-A Preferred Shares of our Company. See “Information on Members of our Group – Our
Company” and “Strategic Investment” above for further details.
2. Establishment of Hangzhou Dinghuan and increase of registered capital in Tibet
Green Tea F&B by Hangzhou Dinghuan
Please see paragraph headed “Information on Members of our Group – Hangzhou
Dinghuan” and “Information on Members of our Group – Tibet Green Tea F&B” above for
more details.
3. Disposal of Flourish Thrive
As part of the Reorganization, in order to simplify our corporate structure, our Group had
disposed of Flourish Thrive, which is an investment holding company and incorporated under
the laws of Seychelles that had no business operations. Pursuant to the share purchase
agreement dated December 31, 2017, George Eugene Dent III, an independent third party,
purchased 81.0% equity interest in Flourish Thrive from our Company at a nominal
consideration of US$1.00 which was determined based on arm’s length negotiation among the
parties as Flourish Thrive did not have any business operation. After the completion of the said
transfer on December 31, 2017, Flourish Thrive ceased to be a subsidiary of our Company and
no longer formed part of our Group.
4. Establishment of Green Tea Family Trust
Green Tea Family Trust was established by Mr. Wang and Ms. Lu as the settlors and Vistra
Trust as the trustee. On March 5, 2021, Time Sonic allotted and issued 11,988,000 shares at par
value of US$1.00 each to Absolute Smart V entures, which is wholly owned by East Superstar,
representing 99.9% of the share capital of Time Sonic. East Superstar is wholly owned by
Vistra Trust. Green Tea Family Trust is a discretionary trust and the beneficiaries of which are
Yielding Sky, a wholly-owned holding company of Mr. Wang, and Contemporary Global
Investments, a wholly-owned holding company of Ms. Lu.
5. Establishment of onshore PRC subsidiaries
Since November 19, 2020, we have established 280 onshore PRC subsidiaries mainly to
conduct restaurant operations. Please see note 13 to Accountants’ Report set forth in Appendix
I for further details and particulars of the onshore PRC subsidiaries which principally affected
the results, assets or liabilities of the Group.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Under the Green Tea Family Trust, certain discretions of Vistra Trust as the trustee are
only exercisable by it at the direction of the respective settlors, namely Mr. Wang and Ms. Lu.
Based on the terms of the trust deed, for so long as Vistra Trust holds or controls any Shares,
all voting rights attaching to such Shares shall be exercised by Mr. Wang and Ms. Lu and/or
such other person(s) as Mr. Wang and Ms. Lu may wish to appoint.
As confirmed by our PRC Legal Advisers, we have obtained and completed all necessary
approvals and/or registrations in all material aspects from the relevant PRC regulatory
authorities in respective of the steps of the Reorganization as to PRC laws in relation to our
PRC subsidiary as described above.
RSU SCHEME
We adopted the RSU Scheme on February 28, 2020, which was further amended and
approved on May 20, 2022 and April 30, 2025, respectively to motivate and retain skilled and
experienced personnel to strive for the future development and expansion of the Group by
providing them with the opportunity to own equity interests of the Company. Longjing Memory
Limited (the “ RSU Nominee ”) was established in the BVI for the purpose of holding Shares
for grant under the RSU Scheme. On March 1, 2021, our Company entered into a trust deed
(the “ Trust Deed ”) with The Core Trust Company Limited (the “ RSU Trustee ”), pursuant to
which the RSU Trustee has agreed to act as the trustee to administer the RSU Scheme and to
hold the Shares underlying the RSU Scheme through the RSU Nominee. On March 17, 2021,
the Company issued 667 ordinary shares to the RSU Nominee, and subsequently on March 22,
2021, each ordinary shares of par value US$1.00 each was sub-divided into 50,000 Shares of
par value US$0.00002 each. As a result, 33,350,000 ordinary Shares were held by the RSU
Nominee, representing approximately 4.95% of the total issued share capital of our Company
upon the completion of the Global Offering. RSU Nominee will be ultimately beneficially
owned by the eligible participants under the RSU Scheme upon vesting and exercise of the
RSUs under the RSU Scheme, including employees, Directors or officers of the Company or
any of its subsidiaries or any eligible person as maybe designated by the Board who receive
an award under the RSU Scheme. The Shares held by the RSU Nominee will not be counted
towards the public float of our Company upon Listing. For details, please see section headed
“Statutory and General Information – D. Share Incentive Scheme” in Appendix IV to this
prospectus. Our Company will issue announcements according to applicable Listing Rules,
disclosing particulars of any RSUs granted under the RSU Scheme, including the date of grant,
number of Shares involved, the vesting period, the appointment and arrangement with the
Trustee and comply with Chapter 14A and Chapter 17 of the Listing Rules.
Partners Gourmet exerted its influence on our Company as a passive investor primarily
through Mr. Liu Sheng, our non-executive Director, Ms. Xu Ruijie, our non-executive Director,
Mr. Tao Y e, our former non-executive Director, and Mr. Tim Pihl Johannessen, our former
non-executive Director, who have been appointed since May 2017, since December 2023, from
September 2021 to December 2023, and from May 2017 to September 2021, respectively, and
as board representatives of Partners Gourmet, they were not involved in the day-to-day
management of our Company and were responsible for providing strategic guidance and
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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specialist advice. Accordingly, there was no material change in Partners Gourmet’s influence
on our management and the actual dynamics between Partners Gourmet, our Controlling
Shareholders and the management team of our Company during the Track Record Period.
Based on the above, our Directors are of the view that the decrease in Partners Gourmet’s
shareholding upon establishment of the RSU Scheme to approximately 28.2% does not affect
the Company’s ownership continuity under Rule 8.05(1)(c) of the Listing Rules. Based on the
reasoning above, the Joint Sponsors agree with the Directors’ view above.
CORPORATE STRUCTURE IMMEDIATELY BEFORE THE GLOBAL OFFERING
Set forth below is our corporate structure upon completion of the Reorganization and
immediately before completion of the Global Offering:
Our Company
Time Sonic
(Republic of Seychelles)
99.9%
65.8%
0.051% 0.049%
Absolute Smart Ventures
(BVI)
Yielding Sky
(Republic of Seychelles)
Contemporary Global
Investments
(Republic of Seychelles)
RSU Nominee(4)
6.0%
100%
Ms. Lu
100%
Mr. Wang
Offshore
Onshore
99.9%
100%
100% 100%
100%
100% 100%
August Fountain Limited(5)
(Republic of Seychelles)
Green Tea Group
International Limited
(Cayman Islands)
Everlasting Thrive
International Limited
(BVI)
HK August Fountain
(Hong Kong SAR)
Tibet Green Tea
Enterprise
(PRC)
90.9%
Hongquan WFOE
(PRC)
100%
0.1%
100%
Zhejiang Lvqin
(PRC)
Shenzhen
Green Tea
Trading
(PRC)
100%
100%
100%
Emperor Favour Limited(5)
(Republic of Seychelles)
HK Guan Dong Zao
(Hong Kong SAR)
100%
Tibet Guandongzao
(PRC)
100%
Guandongzao WFOE
(PRC)
Tibet
Guandongzao
F&B
(PRC)
100%
100%
Everlasting Thrive
Limited(5)
(Republic of Seychelles)
HK Green Tea Group
(Hong Kong SAR)
Tibet Green Tea F&B
(PRC)
Other PRC
subsidiaries(3)
100%
100%100% 100%
49.0% 51.0%
Green Tea
WFOE
(PRC)
Xipan Qiwang
(PRC)
Hangzhou
Dinghuan
(PRC)
9.1%
100% 100% 100%
Sanquan
F&B
(PRC)
Wuhan
Lujia
(PRC)
Ningbo
Qingyu
(PRC)
Partners Gourmet(3)
(Cayman Islands)
28.2%
100%
East Superstar(2)
(BVI)
Green Tea Family Trust(1)
Zhejiang Daxin
(PRC)
Green Tea (Singapore)
Pte. Ltd.
(Singapore)
Sgp Green Tea
International Pte. Ltd.
(Singapore)
Hong Kong Green Tea
International Limited
(Hong Kong SAR)
100% 100%
Lv Qin
Hong Kong Limited
(Hong Kong SAR)
100%
Notes:
(1) A discretionary trust established by Mr. Wang and Ms. Lu as the settlors, with Vista Trust as trustee and with
Yielding Sky and Contemporary Global Investments as the beneficiaries.
(2) East Superstar is wholly owned by Vistra Trust, the trustee of the Green Tea Family Trust.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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(3) Partners Gourmet mortgaged all its Shares as security for a term loan facility provided by J.P . Morgan SE.
(4) RSU Nominee was held by RSU Trustee for the benefit of the eligible participants under RSU Scheme as of
the Latest Practicable Date.
(5) These subsidiaries are investment holding companies of our Group and our Company incorporated these
subsidiaries in the Republic of Seychelles due to lower set up and administrative cost. As of the Latest
Practicable Date, other than restaurants in Hong Kong SAR, our Group did not have any overseas business and
operation.
(6) Please see section headed “Accountants’ Report” in Appendix I for further details and particulars of our other
PRC subsidiaries which principally affected the results, assets or liabilities of the Group.
CORPORATE STRUCTURE UPON COMPLETION OF THE GLOBAL OFFERING
Set forth below is our corporate structure immediately following the completion of the
Global Offering (assuming the Over-allotment Option is not exercised):
Our Company
100%
East Superstar(2)
(BVI)
Time Sonic
(Republic of Seychelles)
Partners Gourmet(3)
(Cayman Islands)
15.76% 54.29%
RSU Nominee(4)
4.95% 25.00%
Public Shareholders
100%
Ms. Lu
100%
Mr. Wang
99.9%0.051% 0.049%
Absolute Smart Ventures
(BVI)
Contemporary Global
Investments
(Republic of Seychelles)
Yielding Sky
(Republic of Seychelles)
Green Tea
Family Trust(1)
100%
100%
100% 100% 100%
100%100% 100%
49.0% 51.0%
Everlasting Thrive
Limited(5)
(Republic of Seychelles)
HK Green Tea Group
(Hong Kong SAR)
Green Tea
WFOE
(PRC)
Hangzhou
Dinghuan
(PRC)
Tibet Green Tea F&B
(PRC)
Sanquan
F&B
(PRC)
Wuhan
Lujia
(PRC)
Ningbo
Qingyu
(PRC)
100%
100%
100%
100%
100%
Emperor Favour Limited(5)
(Republic of Seychelles)
HK Guan Dong Zao
(Hong Kong SAR)
Guandongzao WFOE
(PRC)
Tibet Guandongzao
(PRC)
Tibet
Guandongzao
F&B
(PRC)
Offshore
Onshore
99.9%
100%
100%
100%
August Fountain Limited(5)
(Republic of Seychelles)
HK August Fountain
(Hong Kong SAR)
Tibet Green Tea
Enterprise
(PRC)
90.9%
Hongquan WFOE
(PRC)
100%
0.1%
Zhejiang Lvqin
(PRC)
Shenzhen
Green Tea
Trading
(PRC)
Other PRC
subsidiaries(3)
100%
9.1%
100%
Zhejiang Daxin
(PRC)
100%
100%
100%
Green Tea Group
International Limited
(Cayman Islands)
Everlasting Thrive
International Limited
(BVI)
Green Tea (Singapore)
Pte. Ltd.
(Singapore)
Sgp Green Tea
International Pte. Ltd.
(Singapore)
Hong Kong Green Tea
International Limited
(Hong Kong SAR)
100% 100%
Lv Qin Hong Kong Limited
(Hong Kong SAR)
100%
Xipan Qiwang
(PRC)
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Notes:
(1) A discretionary trust established by Mr. Wang and Ms. Lu as the settlors, with Vista Trust as trustee and with
Yielding Sky and Contemporary Global Investments as the beneficiaries.
(2) East Superstar is wholly owned by Vistra Trust, the trustee of the Green Tea Family Trust.
(3) Partners Gourmet mortgaged all its Shares as security for a term loan facility provided by J.P . Morgan SE.
(4) RSU Nominee was held by RSU Trustee for the benefit of the eligible participants under RSU Scheme as of
the Latest Practicable Date.
(5) These subsidiaries are investment holding companies of our Group and our Company incorporated these
subsidiaries in the Republic of Seychelles due to lower set up and administrative cost. As of the Latest
Practicable Date, other than restaurants in Hong Kong SAR, our Group did not have any overseas business and
operation.
(6) Please see section headed “Accountants’ Report” in Appendix I for further details and particulars of our other
PRC subsidiaries which principally affected the results, assets or liabilities of the Group.
PRC REGULATORY REQUIREMENTS
Reorganization of the Domestic Equity Companies of the Proposed Listed Company
In accordance with the Rules on the Acquisition of Domestic Enterprises by Foreign
Investors () (the “ M&A Rules ”) which was
promulgated by the MOFCOM, the State-owned Assets Supervision and Administration
Commission of the State Council, the State Administration of Taxation of PRC, the State
Administration for Industry and Commerce of PRC, China Securities Regulatory Commission
and the State Administration of Foreign Exchange of PRC, which took effect on September 8,
2006 and was subsequently amended on June 22, 2009 by the MOFCOM, a foreign investor
was required to obtain necessary approvals when (i) a foreign investor acquires equity in a
domestic non-foreign invested enterprise thereby converting it into a foreign-invested
enterprise, or subscribes for new equity in a domestic enterprise via an increase of registered
capital thereby converting it into a foreign-invested enterprise; or (ii) a foreign investor
establishes a foreign-invested enterprise which purchase and operates the assets of a domestic
enterprise, or which purchases the assets of a domestic enterprise and injects those assets to
establish a foreign-invested enterprise.
According to Article 11 of the M&A Rules, where a domestic company or enterprise, or
a domestic natural person, through an overseas company established or controlled by it/him,
acquires a domestic company which is related to or connected with it/him, approval from
Ministry of Commerce of PRC is required. Parties are not allowed to circumvent M&A Rules
through domestic investments by a foreign-invested enterprise. However, the indirect
investments of the proposed listed company to establish the domestic equity companies does
not fall in the Article 11 of the M&A Rules, and therefore is no need to obtain approval,
permission or other approval procedures from the China Securities Regulatory Commission
and the Ministry of Commerce.
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Overseas Investments by Domestic Residents
Pursuant to the Circular on Relevant Issues concerning Foreign Exchange Administration
of Overseas Investment and Financing and Return Investments Conducted by Domestic
Residents through Overseas Special Purpose V ehiclesʮ̡ྤ̮
, promulgated by SAFE and which became
effective on July 4, 2014, a PRC resident shall apply for going through procedures for foreign
exchange registration of overseas investments with the local SAFE branch before he or she
contributes his or her legal domestic or overseas assets or equity interests to an overseas special
purpose vehicle.
Pursuant to the Circular of the State Administration of Foreign Exchange on Further
Simplifying and Improving the Direct Investment-related Foreign Exchange Administration
Policies(the “ Circular 13 ”), which
was promulgated on February 13, 2015 and with effect from June 1, 2015, the foreign exchange
registration under domestic direct investment and the foreign exchange registration under
overseas direct investment is directly reviewed and handled by banks in accordance with the
Circular 13 and the attached Foreign Exchange Business Guidelines for the Direct Investment
under Capital Accounts (Bank V ersion) (ˏ(و,))
and the SAFE and its branches shall perform indirect regulation over the foreign exchange
registration via banks.
As advised by our PRC Legal Adviser, Mr. Wang and Ms. Lu have duly completed the
relevant registrations as required under SAFE Circular No. 37 and Circular 13.
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OVERVIEW
We are a well-known operator of casual Chinese restaurants in Mainland China. We create
customer value by providing fusion cuisine at accessible price points and decoration inspired
by Chinese traditional culture. With this vision, we opened our first Green Tea restaurant in
2008 by the beautiful West Lake in Hangzhou, and have built a nationwide restaurant network
consisting of 493 restaurants and covering 21 provinces, four municipalities and two
autonomous regions in the PRC, as well as Hong Kong SAR as of the Latest Practicable Date.
We ranked third in terms of number of restaurants and fourth in terms of revenue among casual
Chinese restaurant brands in Mainland China in 2024, according to the CIC Report. According
to the CIC report, casual Chinese cuisine restaurant market is highly fragmented due to a large
number of market participants, and we had a market share of 0.7% in 2024. In addition,
according to the CIC report, casual Chinese cuisine restaurants have an average spending per
guest in the range of RMB50 to RMB100.
The vision for Green Tea restaurants was conceived by our co-founders, Mr. Wang
Qinsong (ؒand Ms. Lu Changmei (ૠ), during their days of managing Green Tea
Y outh Hostel, which they established near the West Lake of Hangzhou in 2004. Surrounded by
beautiful tea farms, the hostel attracted backpackers from across Mainland China and the rest
of the world. As our co-founders came to know their diverse guests, they gradually realized that
fusion cuisine was best suited to their restaurant. Therefore, they started to experiment with
fusion food and developed several popular dishes, such as roasted chicken and grilled shrimp.
Besides the food, guests loved the hostel restaurant because of its beautiful views of natural
sceneries. As the restaurant primarily served young backpackers, the menu items were offered
at accessible prices. The hostel restaurant was highly popular and became the prototype for
Green Tea restaurants.
Today, we operate a nationwide restaurant network, and we have remained true to our
original vision. Leveraging the flexibility of Chinese fusion cuisine, we regularly update our
menu to refresh and enhance our guests’ dining experience. We infuse the timeless elements of
Chinese traditional art and natural landscape into the decoration of our restaurants, offering a
dining experience that differentiates us from other casual restaurants. We also firmly believe
that gourmet should not be a privilege, and we have kept our menu items at accessible prices.
Fusion food, restaurant decoration, accessible pricing and close focus on food safety have
been the recipe for our success. We will keep applying this recipe to each of our restaurants.
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Restaurant Network Expansion
Our restaurant network experienced substantial growth during the Track Record Period.
Our total restaurants increased from 276 as of December 31, 2022 to 465 as of December 31,
2024, representing a CAGR of 29.8%. The number of our restaurants in operation further
increased to 493 as of the Latest Practicable Date. During the Track Record Period, we
primarily focused on establishing our market presence in three key regions, namely Eastern
China, Guangdong province and Northern China, which are the major economic centers of
Mainland China. We took advantage of our brand reputation in these regions and opened new
restaurants in districts with high pedestrian traffic. We also opened a number of restaurants in
other regions during the Track Record Period as part of our effort to understand the market
conditions and customer preferences in such regions. We expect such effort will serve as a
foundation for our future expansion in these new markets. In addition to different geographical
regions, we also focused on penetrating the market in each region by developing our market
presence in tier two, tier three and lower tier cities. During the Track Record Period, we opened
a total of 158 restaurants in tier two, tier three and lower tier cities.
We opened 120 new restaurants in 2024 and we plan to open 150, 200 and 213 new
restaurants in 2025, 2026 and 2027, respectively. We aim to increase our market share by
further penetrating our existing markets as well as expanding our business into new markets.
Results of Operations
In 2022, our results of operations were affected by the impact of the COVID-19
pandemic, the relevant restrictive measures imposed by the relevant government authorities
and the business strategies we deployed in response to the COVID-19 pandemic. Our revenue
increased by 51.1% from RMB2,375.5 million in 2022 to RMB3,589.2 million in 2023,
primarily attributable to (i) the strong recovery of our customer traffic due to a significant
surge in consumer spending in the first half of 2023 following the easing of government-
imposed restrictions related to COVID-19 in December 2022 and (ii) an increase in the number
of our restaurants in operation due to our restaurant expansion. Our revenue also increased by
6.9% from RMB3,589.2 million in 2023 to RMB3,838.2 million in 2024, primarily attributable
to an increase in the number of our restaurants in operation. In addition, as a result of our
successful operation, we recorded net cash generated from operating activities of RMB347.6
million, RMB793.2 million and RMB734.0 million in 2022, 2023 and 2024, respectively.
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COMPETITIVE STRENGTHS
Well-known and fast-growing operator of casual Chinese restaurants in Mainland China
We are a well-known operator of casual Chinese restaurants in Mainland China. Our
iconic Green Tea brand is synonymous with a refreshing dining experience that combines
Chinese fusion cuisine with decoration inspired by Chinese traditional culture, which resonates
well with consumers across Mainland China. We ranked third in terms of number of restaurants
and fourth in terms of revenue among casual Chinese restaurant brands in Mainland China in
2024, according to the CIC Report.
Our fusion cuisine offerings are designed to address Mainland China’s entire casual
Chinese cuisine restaurant market, which had a size of RMB534.7 billion in 2024 and is
expected to grow at a CAGR of 9.1% from 2024 to 2029. Our Chinese fusion concept provides
us with a competitive edge and enables us to satisfy diverse customer preferences and tastes
in different regions and age groups. Because of our origin from Hangzhou, our menu is
influenced by Hangzhou and Zhejiang cuisine, and we also draw inspirations from other parts
of Mainland China, as well as cuisines from across the world. For example, Green Tea Roasted
Chicken (ၠ঩टᕒ) has been our signature dish since the early days of our business. Based on
both Chinese and Western culinary techniques, the dish was an instant success and remains
highly popular among guests of all age groups. Our focus on Chinese fusion cuisine also offers
us a competitive advantage in geographic expansion, as we have the flexibility to localize our
menu when entering into a new region. For example, we introduced Sautéed Beef with Cold
Noodles (४) to our restaurants in Nanchang, and the dish is inspired by a popular
local street food. Leveraging our flexible menu, we have built a nationwide restaurant network,
with strong presence in Eastern China, Guangdong province and Northern China, which are the
major economic centers of Mainland China. Our restaurants can also be found in all other
major geographic regions of Mainland China, such as Harbin in the northeast, Lanzhou in the
west, Kunming in the southwest, Zhengzhou and Wuhan in central China and the satellite cities
of these major cities. In addition, we have developed a variety of designs for restaurants of
different sizes and layouts, which makes us well positioned to occupy new sites across
Mainland China.
As a result of our Chinese fusion concept and refreshing dining experience, we were able
to significantly expand our restaurants from 276 as of December 31, 2022 to 493 as of the
Latest Practicable Date.
Fusion menu offerings and value-for-money experience to attract a broad base of
customers
We are dedicated to bringing fusion menu items to customers at accessible price points,
and we have lived up to this aspiration since our inception. As a result of such longstanding
dedication and our Chinese fusion concept, our Green Tea brand has become a household name
in the casual Chinese cuisine restaurant market. We have strategically designed our menu to
achieve an average spending per guest of approximately RMB50 to RMB70. Our value-for-
money pricing positions us well in competing in the casual Chinese cuisine restaurant market.
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Guests looking for a quick and light lunch during weekdays, or a proper dinner for friends and
family gatherings, or business meals with clients can all find a pleasant experience in our
restaurants. We tailor our menu and pricing based on different local conditions, with the goal
of maintaining our competitive advantage in value-for-money pricing. Our flexible pricing
strategy enhances our ability to expand into tier two, tier three and lower tier cities, where the
catering market has demonstrated stronger growth as compared with tier one cities.
When designing our menu items, we enjoy the full freedom to draw inspirations from
regional cuisines in Mainland China and other parts of the world. In the meantime, we respect
China’s culinary traditions to ensure the popularity of our food. As a result of our balance
between innovation and tradition, we are able to create food that satisfies the evolving
preferences of our diverse customer base. Our guests come from all age groups, and we have
something for everyone to enjoy. For example, young children may find our Bread Temptation
(ᙢ̍Ⴐ౅) irresistible, while our Stone Pot Tofu with Chicken Soup (ͩᒢᕒಷԌၵ)i s
particularly popular among elderly guests. Our Chinese fusion model also provides us with the
flexibility to adjust our menu based on price and availability of ingredients, thereby enabling
us to maintain food quality, achieve robust financial performance and enhance our adaptability
in expanding in new markets. Typically, each of our restaurants offers 50 to 80 menu items,
which mainly consist of signature dishes, appetizers, soups, main courses, vegetable dishes,
desserts and beverages.
Our strong menu development capability has been the engine of our growth. We have
devoted significant resources to menu development. Our menu development team is directly
led by our co-founder and chairman, Mr. Wang Qinsong (ؒand the team members have
over 17 years of experience in the catering industry on average. We also engage external
consultants, including award-winning chefs, to develop new menu items for us and advise on
menu improvement. While some recipes are designed for our nationwide restaurant network,
others are developed by our restaurant staff, which cater to local tastes.
Our menu development efforts are informed by analysis of market data. We analyze sales
results and other data collected from restaurants to understand our target guests from different
regions and their food preferences. In addition, we constantly experiment with different
elements to enhance our menu and continuously drive growth in customer flow and revenue.
For example, we incorporate traditional Chinese medicine concepts into our menu and roll out
dishes that suit the philosophies of traditional Chinese medicine. We typically engage in four
menu development cycles each year, with each cycle taking three to four months and consisting
of key steps including project proposal, committee approval and trial launch. We follow a
rigorous menu development process to ensure the quality of our menu items. Our tasting
committee evaluates dishes proposed by our menu development team based on visual
presentation, taste, profitability, marketability, preparation process and other relevant factors
and then selects the new items that will be launched at selected restaurants on a trial basis. If
a new item does not generate satisfactory sales results after the trial launch, our menu
development team will typically adjust the recipe based on customer preferences or take it off
our menu. We usually update around 20% of our menu items each year, and we introduced 172,
168 and 203 new menu items in 2022, 2023 and 2024, respectively.
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In addition to bringing culinary delights to our guests, our menu development efforts are
also guided by certain pragmatic principles. We develop our menu around ingredients that meet
our rigorous food safety standards and can be procured from stable sources. Furthermore, we
focus on developing menu items that can be prepared through standardized procedures. Such
practical approach ensures the consistency in food quality as well as the highest standard of
food safety throughout our restaurant network.
Dining environment infused with elements of Chinese traditional art to build our iconic
brand and strong customer traffic
Our mission is to establish a warm and compassionate brand image and offer a
comfortable dining environment for our guests. We believe in the lasting and universal appeal
of tradition and nature. Therefore, we infuse the timeless elements of Chinese traditional art
and natural landscape into the decoration of our restaurants. We typically choose among six
design templates to decorate our new restaurants. For example, our Longjing Boat Banquet
template (࢖features the essential elements of a beautiful Jiangnan water town, such
as boats, waterways and bridges. Our Jiangnan Landscape template (یfollows a
minimalist style and features screens with natural sceneries, as well as grey bricks and black
tiles, which are the hallmarks of traditional Jiangnan architecture. Our Bamboo Breeze template
(϶ᅂ) is inspired by the elegant bamboo forest in spring. It resembles the tranquil scenery
of dappled morning light which shines through Hangzhou bamboo groves abounding in breeze,
and creates an immersive yet refreshing dining experience. Inspired by the same design
philosophy, our design templates allow us to maintain a consistent brand image across
Mainland China.
We believe our dining environment and iconic brand image provide us with the following
competitive advantages:
 Participation in the rise of national style (
਷ᆓ). In recent years, elements of
Chinese traditional art are gaining popularity in fashion, interior design and other
aspects of mass culture. Our restaurants attract young consumers who are passionate
about Chinese traditional culture, as well as other guests who value the aesthetic
aspect of their dining experience. Our dining experience satisfies not only our
guests’ palate but also their pursuit of a memorable cultural experience. Some guests
are dressed in Hanfu (؂a type of Chinese traditional costume, while dining at
our restaurants and take selfies to record the memorable occasion.
 Strong brand image . Our restaurant designs create an immersive dining experience
for our guests. Our decoration offers a dining experience that differentiates our
brand from other casual restaurants. As our guests take pictures and share their
dining experience on social media, they help enhance our brand image and attract
more customer traffic to our restaurants.
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 Flexibility . Our design templates can be easily adapted to sites of various sizes and
layouts. The flexibility of our design templates enables us to standardize the design
and renovation process for our restaurants, thereby enhancing our ability to rapidly
expand our restaurant network. It typically takes 55 to 75 days to complete the
renovation project for a new restaurant.
 Favorable lease terms . Our proven track record and strong reputation make us an
attractive tenant in a wide variety of large-scale shopping malls, which allows us to
negotiate favorable lease terms. In tier two, tier three and lower tier cities, we are
often offered the opportunity to select the most desirable location of a shopping
mall, as well as reimbursement of renovation cost.
Highly standardized and scalable business model supported by flexible supply chain
arrangement
We have built a highly standardized and scalable business model, which has been
instrumental to our success in achieving value-for-money pricing and rapid restaurant network
expansion. In particular, we standardize the taste and quality of our dishes through a flexible
combination of third-party food processing and direct procurement. We have been
collaborating with third-party food processing companies for many years, and have developed
strong expertise in such arrangements. As of the Latest Practicable Date, we collaborated with
205 third-party food processing companies. We pay close attention to food preparation
processes in menu development and whenever feasible, allocate the major portion of the
preparation process for the ingredients to the highly automated facilities of these third-party
processing food companies. As a result, food products supplied by them require relatively few
steps of standardized preparation at our restaurants before cooking and serving to our guests,
which enables us to maintain consistent taste and quality and increase operating efficiency at
our restaurants.
Currently, some of our signature dishes involve preparation of semi-processed food
products and bakery products by third-party food processing companies. For example, our
signature dish Green Tea Roasted Chicken (ၠ঩टᕒ) only requires our kitchen staff to
marinate the chicken with prepared sauce packet and roast it in an oven for a set amount of
time.
Certain food ingredients, such as vegetables and fruits, have relatively short shelf lives,
and we procure them directly from local suppliers to ensure the freshness of such ingredients.
The preparation of menu items relating to such ingredients still often involves our food
processing partners to improve operating efficiency. To enhance our ability to source fresh
ingredients at competitive prices, we have established a direct procurement center in Hangzhou
in January 2021. The direct procurement center is managed and supervised by our supply chain
management department and is responsible for selecting and managing suppliers and procuring
semi-processed food products, bakery products and fresh ingredients, such as vegetables and
fruits. Our direct procurement center is also in charge of matching suppliers with our
restaurants and settling payments with our suppliers.
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We believe our supply chain arrangement provides us with the following competitive
advantages:
 Consistency . Centralized food preparation enables us to provide our food with
consistent taste, quality and presentation across our nationwide restaurant network.
V ariation in skills and styles of trained kitchen staff at different restaurants would
have minimum impact on our guests’ dining experience.
 Food safety . Centralized food preparation also allows us to efficiently implement
our food safety measures through careful selection and close monitoring of the
relevant food processing companies. We require our food processing partners to
implement stringent supplier selection criteria, and we periodically inspect the
quality of food ingredients that they procure. We also conduct site visits to confirm
that the facilities of our food processing partners have proper equipment and
procedures in place to ensure food safety. In addition, centralized food preparation
allows us to easily identify the party responsible for any deficiency in food safety
and take the appropriate corrective measures.
 Efficiency . Our collaboration with food processing companies enables us to focus on
developing new menu items and food processing procedures. Centralized food
preparation also standardizes our kitchen operations and reduces our reliance on
highly skilled chefs to a certain extent. As such, the limited supply in highly skilled
chefs does not present a bottleneck to our expansion plan. We further enhance
efficiency by adopting standard procedures for dish preparation at our kitchens.
Each member of our kitchen staff focuses on the preparation of a limited number of
menu items, and their specialization results in higher productivity.
 Fast expansion . We form collaboration with professional food processing companies
by signing framework agreements with such companies. Our collaboration with food
processing companies enables us to accelerate the expansion of our restaurant
network across Mainland China at a relatively low cost. We avoid the large
upfront investments related to the construction of self-operated central kitchens.
Furthermore, while food processing companies are typically able to deliver their
products across Mainland China, the role of central kitchens is constrained by a
limited service radius. As such, our food processing partners help us effectively
maintain consistency in the taste, quality and safety of our food while expanding
into new cities. Our collaboration with food processing partners also allows us to
take advantage of the well-established supply chain of such partners. We only need
to manage a limited number of food processing partners instead of numerous
suppliers in different regions, thereby freeing up our management capacities and
resources.
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Comprehensive and stringent food and operational safety control
We believe health and safety of our guests are fundamental to our long-term success. We
have established a comprehensive set of standards and specifications with respect to each
aspect of our operations, including procurement, storage and logistics and restaurant operations
to ensure our food and operational safety.
We have a safety center at our headquarters which oversees food safety, fire safety and
production safety matters, as well as disciplinary matters, throughout our Group and hire
external food safety consultant with experience working at the relevant regulatory authorities
to provide professional advice on such matters. Our safety center directly reports to our
co-founder and chairman, Mr. Wang Qinsong (ؒWe also designate an employee in each
region as food safety manager, who is responsible for ensuring that the day-to-day operations
at the restaurant in the region are in accordance with our food safety requirements.
We set comprehensive standards for the selection of suppliers and the inspection of
different categories of food ingredients and other supplies to ensure their safety and quality. In
addition to the quality inspection carried out by us, we also require our suppliers to provide us
with reports of food tests and regularly engage third parties to conduct quality inspections. Our
procurement team based at our headquarters is primarily responsible for coordinating and
monitoring the purchase, storage and delivery of supplies throughout our restaurant network.
We also rely on restaurant staff to inspect food ingredients and other supplies from our
suppliers.
Restaurant operations management is key to safeguarding our food and operational safety.
In 2019, we established a central monitoring team and installed a comprehensive video
monitoring system to visually monitor operations of all of our restaurants through closed-
circuit television. We also have a restaurant patrol team that conducts unannounced inspections
of our restaurants to identify and rectify potential quality and food safety issues. The team
evaluates, among other things, the storage condition of food ingredients and the quality and
hygiene of food to be served to guests. If the restaurant patrol team identifies any serious issue,
we may terminate employment with the manager of the relevant restaurant. In addition, we rely
on continuous training programs for our restaurant staff to ensure their understanding of and
compliance with our food safety and quality standards. Our employees and restaurant staff are
also required to obtain certain relevant certificates and qualifications.
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Digitalized restaurant and operations management
We have made significant investments to establish our technological infrastructure, which
serves as a foundation of our restaurant management and overall business operations. We are
committed to digitalize our restaurants by leveraging such technological infrastructure. Our
technological infrastructure supports various aspects of our business operation, including but
not limited to supply chain management, restaurant management, kitchen management,
delivery management, equipment management, as well as overall operation analysis.
We believe our technological infrastructure enables us to improve operational efficiency
and reduce cost by streamlining, digitalizing and automating our operations at both our
headquarters and restaurant level, which in turn improve the overall dining experience of our
customers.
We have implemented the following measures to digitalize our restaurants.
 Mobile-enabled restaurant experience . We were among the first major restaurant
chains in Mainland China to enable ordering through mobile phones, according to
the CIC Report. Mobile ordering system allows us to shorten the ordering time for
each table. Such system enables us to not only efficiently track guest orders but also
use such data to understand customer preferences and improve our menu offerings.
Furthermore, we allow our guests to use mobile payment and therefore streamline
our checkout process. Such mobile payment also includes payments settled by cash
vouchers our guest purchased from third-party platforms and through our WeChat
mini-program. In 2024, approximately 98.9% of the total amount paid by our dine-in
guests was settled through mobile payment.
 Digital supply system . We have implemented an efficient digital supply system that
is controlled by our procurement team and collects orders for supplies from our
restaurants and automatically assigns orders to specific suppliers. The system
enables our restaurant staff to order supplies based on the situations of their
respective restaurants and receive supplies on a timely basis. The system also
enables our procurement team to continuously monitor consumption patterns across
our restaurant network, as well as costs, procurement amount and inventory level at
each restaurant to reduce waste.
 Restaurant management . We have established a comprehensive monitoring system
that enables the staff of the central monitoring room at our headquarters to visually
monitor all of our restaurants through closed-circuit television. This system allows
us to ensure efficient and quality services are provided at our restaurants and make
timely adjustments to the restaurant operations as necessary. In addition, we have
implemented a menu and order management platform for enhancing the precision of
and standardizing the information on our dishes and menus. Furthermore, for better
management of our restaurant properties, we integrated a lease management
platform in our operation.
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 Operation management . We have implemented a business intelligence system,
which collects the operational information and data of restaurants in real time, and
perform business and financial analysis. Such analysis provides our management
with comprehensive insights into the operations of our entire restaurant network and
assist our management with decision making in optimizing our restaurant
operations. For example, our business intelligence system automatically push the
restaurants operating report for the previous day to each regional manager and the
relevant management personnel at our headquarters. Such report typically includes
information such as revenue, sales of our signature dishes and customer complaints.
With this information, our regional managers can quickly identify restaurants with
unsatisfactory performance, understand the situation and make necessary
adjustments in terms of marketing and promotional strategies, dish preparation
training and service quality, which will improve our operational management
efficiency.
 Kitchen management . Our kitchen management system digitally monitors the status
of orders, which enables us to prevent errors such as missed orders and duplicative
orders.
 Delivery management . We have implemented a comprehensive system that connects
our delivery management and kitchen management to create a seamless and more
efficient delivery operation.
 Equipment management . We introduced an equipment repair and maintenance
tracking system in our restaurants, which automatically sorts and dispatches
repairing orders entered into the system by restaurant staff to corresponding
maintenance team or maintenance suppliers, streamlining and ensuring the repair
and maintenance work orders being handled in a timely manner, as well as
optimizing equipment management.
Experienced and professional management team with zeal to excel
An experienced and professional management team has been instrumental to our success.
Our chairman and co-founder, Mr. Wang Qinsong (ؒhas over 20 years of experience in
the hospitality and catering industries. Mr. Wang Qinsong (ؒtogether with his spouse
Ms. Lu Changmei (ૠ), started their business career by founding Green Tea Y outh Hostel
in the West Lake Scenic Area in 2004 to provide customers from all over Mainland China and
the world with accommodations and restaurant services. In 2008, they opened the first Green
Tea restaurant and spearheaded our development into a well-known restaurant brand with their
zeal to excel and their deep understanding and expertise of the Chinese culinary culture and
modern culinary techniques. Meanwhile, we have assembled a talented senior management
team with substantial experience across a broad range of disciplines, including menu
development, marketing, restaurant operations, finance and accounting and supply chain
management. Most of our senior management personnel have over 10 years of experience in
the restaurant or catering industries and they are equipped with diverse professional experience
and complementary expertise. Our management team has driven our past success and will
continue to be a critical force in our future expansion and pursuit of excellence.
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GROWTH STRATEGIES
Strategically expand our restaurant network to deliver sustainable growth
We plan to open 150, 200 and 213 new restaurants in 2025, 2026 and 2027, respectively.
Our restaurants are typically located at shopping malls. We will continue to identify
suitable sites with significant pedestrian traffic, such as department stores and shopping malls.
According to the CIC Report, the number of department stores and shopping malls in Mainland
China amounted to approximately 11,900 in 2024 and is expected to increase to over 13,000
in 2029. As of the Latest Practicable Date, substantially all of our restaurants were located in
shopping malls. We are also exploring the opportunities to open restaurants in major tourist
sites across Mainland China. According to the CIC report, the number of certified tourist sites
in Mainland China amounted to approximately 15,700 in 2024. Furthermore, we may also
explore the opportunities to open restaurants in major transport hubs, such as airports and train
stations in the future. According to the CIC Report, there are approximately 260 airports and
3,300 railway hubs in Mainland China, providing ample growth opportunities for us.
Our expansion strategy consists of the following initiatives:
 Increase market share in existing geographic markets . During the Track Record
Period, we primarily focused on establishing our market presence in three key
regions, namely Eastern China, Guangdong province and Northern China, which are
the major economic centers of Mainland China. We plan to increase our market
share in existing geographic markets by expanding into selected new locations
within these markets, including tier one and tier two cities, as well as lower tier
cities. In particular, our value-for-money pricing gives us a competitive advantage
when expanding into lower tier cities. For example, during the Track Record Period,
we opened 92 new restaurants in Eastern China, of which 67 are located in tier two,
tier three or lower tier cities. We plan to follow a hub-and-spoke strategy, under
which we will penetrate a market by concentrating our resources in certain major
commercial districts to create an “operating cluster,” and gradually penetrate
adjacent areas afterwards. We also plan to leverage on our existing infrastructure,
local market expertise and brand recognition in the cities where we currently operate
and expand into adjacent cities efficiently. With our strong brand recognition and
ability to attract customer traffic, we will also benefit from the lower labor cost at
such cities. As a result, we expect to achieve higher restaurant level profit margin
in lower tier cities. See “– Our Business – Restaurant Network Expansion” for
further details.
 Expand into new geographic markets . Our Chinese fusion concept enables us to
adjust our menu items to satisfy diverse customer preferences and tastes in different
regions. When we enter a new geographic market, we will initially open a limited
number of restaurants to develop insights as to the local customers. After we identify
the appropriate approach for serving the market, we will open more restaurants to
further penetrate the market. As we have established ourselves as an attractive tenant
to shopping malls with our proven track record and strong brand recognition, we are
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well positioned to secure premium locations with favorable lease terms. Even during
the COVID-19 pandemic, we managed to continue our expansion by opening
restaurants in certain new markets. As a result, the total number of our restaurants
in other regions had increased to 169 as of December 31, 2024. As of the Latest
Practicable Date, we had opened four restaurants in Hong Kong SAR, and we plan
to open a total of around 28 new restaurants overseas from 2025 to 2027. We may
continue to selectively open new restaurants in overseas metropolises where we
expect our brand will resonate with a critical mass of local consumers.
 Increase number of restaurants at tourist sites . We plan to increase the number of
our restaurants located at famous tourist sites to further enhance our brand image
and increase our opportunities to further expand our restaurant network. Such
approach is also in line with the government policy of the PRC to promote tourism
industry. According to CIC, restaurants located at tourist sites in general have longer
lease term and higher table turnover rate compared to restaurants located elsewhere.
The nine restaurants that we had opened at tourist sites as of the Latest Practicable
Date had achieved higher profitability compared to our other restaurants. As such,
we plan to leverage our dining environment, which is complementary to the
landscape of tourist sites of historical value, to open more restaurants at such tourist
sites. In addition to the nine restaurants that we had opened as of the Latest
Practicable Date, we had signed the lease agreements for two restaurants at tourist
sites as of the Latest Practicable Date. We expect to open a total of 17 such
restaurants from 2025 to 2027.
 Increase number of small restaurants . Going forward, we plan to focus on opening
restaurants with smaller floor areas. Small restaurants are expected to have higher
table turnover rate and lower operating costs, thereby enabling us to pursue a more
flexible expansion strategy.
Drive sales and customer traffic flow by continuing to offer quality and value-for-money
gourmet
We are committed to enhancing our operating performance through further menu
development and value creation. A main reason why guests keep coming back to our restaurants
is that they can often discover new culinary delights at accessible price points. For example,
we rolled out Signature Prawns with V ermicelli (೐४ക႟ሃ) in August 2021 and Dongpo
Pork Ribs (ս˺ર) in March 2024. Such dishes became our top five dishes in terms of sales
within the first month after their debut and still remained our top five dishes as of the Latest
Practicable Date. As such, we will continue to devote substantial resources to menu
development, and we will continue to update at least 20% of our menu items each year. In
particular, we plan to introduce a number of special menu items in different regional markets
based on local tastes while continuing to offer our signature dishes across the nation.
Furthermore, we will continuously fine-tune our menu based on customer behavior. By giving
popular menu items greater prominence, we expect to reduce customers’ ordering time and
enhance the operating efficiency of our kitchen staff.
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We also plan to diversify our menu items to increase sales and table turnover rate. We plan
to design menu items for specific customer segments and occasions, such as guests who dine
alone and business gatherings. We will also develop menu items to address customer demands
outside regular mealtime. In addition, we plan to design menu items for deliveries outside
regular mealtime.
The comfortable ambience of our restaurants is integral to the Green Tea dining
experience. We plan to refresh our design templates periodically to incorporate new design
elements, and we apply such designs to our new restaurants. In addition, we explore efficient
ways to give our existing restaurants new looks. We typically renovate a restaurant after it has
been in operation for five years. We also periodically change some decorations or furniture to
enhance guests’ dining experience.
Enhance operating efficiency through supply chain optimization
Our centralized food preparation model has been instrumental to our success. To maintain
consistency in food quality and enhance operating efficiency across our expanding restaurant
network, we plan to implement the following initiatives:
 Increase cooperation with large scale food processing companies . Large scale food
processing partners offer several advantages, including high level of standardization
in production process, mature supply chain, stringent food safety standards and
economies of scale. We plan to increase our purchases from large scale food
processing companies that are capable of serving our restaurants across the nation
or a large part of it.
 Standardize food preparation procedures at restaurants . Our collaboration with
food processing partners enable us to provide food with consistent quality and taste.
We will continue to develop menu items that require relatively few steps of
standardized preparation at our restaurants before serving to our guests, while
maintaining the taste and quality of these menu items. Without compromising the
taste, such menu items enable us to enhance the operating efficiency of our kitchen
staff.
 Optimize supply chain for fresh ingredients . With respect to fresh ingredients, we
plan to increase our direct procurement from local sources, which will enable us to
save cost and reduce the risk of food spoilage. We have established a direct
procurement center in January 2021, which enables us to purchase fresh ingredients
at competitive prices from local suppliers. For example, we identified a supplier of
shrimps and started to procure shrimps directly from such supplier in 2023. We will
also continuously identify and engage new suppliers to ensure stable supply of fresh
ingredients.
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 Establish a self-operated food processing facility . We plan to establish our own
centralized food processing facility in Zhejiang Province, which is expected to be
completed in the second quarter of 2026. We plan to install state-of-the-art food
processing equipment at the facility, such as machines that automatically wash, cut
and marinate various types of raw materials. We will selectively prepare semi-
processed food products and bakery products at the facility, while continuing to
cooperate with third-party food processing companies. By establishing the facility,
we expect to achieve significant cost savings, enhance our menu development
capabilities and explore new retail offerings.
 Achieve better pricing . As our business expands, we expect to enjoy stronger
bargaining power during price negotiations, which will in turn enhance our profit
margin.
 Continue to ensure food safety . We will continue to prioritize on the health and
safety of our guests and explore new and more effective food safety measures. For
example, we are developing new kitchen designs to further enhance kitchen hygiene.
Continuous investment in technology and digital marketing
We will continue to invest in and upgrade our technology infrastructure to further digitize
our operations. We plan to optimize our customer relationship management system to better
analyze sales results and other data collected from restaurants. Our data insights will enable us
to further improve our food and service. In addition, we launched our own WeChat
mini-program in December 2020, which has enhanced our membership management and offers
new retail functions. We established a data-driven management platform connecting the
operation system, financial system and supply chain system to improve data decision-making
efficiency. Additionally, we also introduced a menu and order management platform for
enhancing the precision of and standardizing the information on our dishes and menus. For
better management of our restaurant properties, we integrated a lease management platform in
our operation. We plan to upgrade and enhance the functions in the data-driven management
platform, the menu and order management platform and the lease management platform. We
also plan to continue to enhance the cost management platform for better cost control
management and increase operational efficiency and profitability. Our other technological
initiatives include enhancing our restaurant patrolling platform, adopting a uniform format for
electronic invoices, further integration of various information technology functions and
upgrading our financial system.
We will also dedicate more resources to raise our profile on social media. We will
continue to engage key opinion leaders (“ KOLs ”) to promote our restaurants on popular social
media platforms. For example, we produce short videos of KOLs’ dining experience at our
restaurants and post such videos on social media.
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OUR BUSINESS
We are a well-known operator of casual Chinese restaurants in Mainland China. During
the Track Record Period, we primarily generated our revenue from restaurant operations and
delivery service. We also generated revenue from certain other sources, such as cell phone
charging services, sales of products such as cooking oil, condiments and gift boxes, and
parking services. The following table sets forth the components of our revenue for the periods
indicated.
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except percentages)
Restaurant operations 1,976,519 83.2 3,059,989 85.3 3,099,173 80.8
Delivery service 397,114 16.7 517,153 14.4 723,057 18.8
Others
(1) 1,820 0.1 12,036 0.3 15,972 0.4
Total revenue 2,375,453 100.0 3,589,178 100.0 3,838,202 100.0
Note:
(1) Primarily consists of (i) commissions received from certain providers of cell phone charging services,
(ii) sales of products such as cooking oil, condiments and gift boxes and (iii) fees for parking services.
Restaurant Network
We opened our first Green Tea restaurant in 2008 by the beautiful West Lake in
Hangzhou, Zhejiang province, and have gradually expanded our restaurants to 21 provinces,
four municipalities and two autonomous regions in the PRC, as well as Hong Kong SAR. As
of the Latest Practicable Date, our restaurant network consisted of 493 restaurants, covering
Hong Kong SAR, as well as all tier one cities, 15 new tier one cities, 31 tier two cities, and
90 tier three cities and below in the PRC.
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During the Track Record Period, we primarily focused on establishing our market
presence in three key regions, namely Eastern China, Guangdong province and Northern China,
which are the major economic centers of Mainland China. The map below illustrates the
geographic location of restaurants in our network that are in operation as of the Latest
Practicable Date.
# of Stores
>20 stores
5-20 stores
<5 stores
Jinhua (4)
Others (5)
Taizhou (6)
Wenzhou (5)
Jiaxing (4)
Beijing (45)
Tianjin (4)
Qingdao (4)
Jinan (3)
Shijiazhuang (3)
Others (9)
Guiyang (5)
Chengdu (20)
Others (10)
Chongqing (17)
Kunming (8)
Others (2)
Lanzhou (2)
Wuhan (7)
Others (1)
Xiamen (6)
Fuzhou (4)
Harbin (1)
Hefei (7)
Others (6) Shanghai (14)
Hohhot (2)
Taiyuan (4)
Others (3)
Xi’an (11)
Others (1)
Haikou (5)
Sanya (3)
Yantai (3)
Others (7)
Suzhou (8)
Taizhou (4)
Xuzhou (4)
Nanjing (4)
Huaian (3)
Yancheng (3)
Others (17)
Nanchang (6)
Others (6)
Nanning (6)
Others (8)
Hangzhou (33)
Shaoxing (10)
Ningbo (8)
Others (5)
Changsha (5)
Others (4)
Changchun (2)
Others (1)
Shenyang (2)
Dalian (2)
Others (4)
Zhengzhou (9)
Others (9)
Shenzhen (35)
Guangzhou (11)
Dongguan (8)
Huizhou (5)
Foshan (3)
Zhongshan (3)
Others (20)Hong Kong (4)
The Green Tea Dining Experience
The Green Tea dining experience is defined by flavorful menu items showcasing Chinese
fusion cuisine and decoration that distills the eternal beauty of Chinese traditional art for a
modern customer base. In addition, our restaurants offer value-for-money pricing to our guests.
We also try to make every guest feel at home through attentive service. Because of the broad
appeal of the Green Tea dining experience, guests may visit our restaurants for a variety of
casual occasions, such as meals with colleagues during weekdays and gatherings with family
members and friends during weekends. Guests may also come to our restaurants for business
gatherings, especially in tier three cities and below.
Cuisine and Menu
We strive to offer our guests a wide selection of menu items that are flavorful and with
quality. Featuring Chinese fusion cuisine, our menu broadly appeals to guests from across
Mainland China and most age groups. We enjoy full creative freedom when designing our menu
items. Because of our origin from Hangzhou, our menu is influenced by Hangzhou and
Zhejiang cuisine, particularly its emphasis on balanced flavors and fresh ingredients. We also
draw inspirations from other parts of Mainland China, as well as cuisines from across the
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world. In the meantime, we respect Mainland China’s culinary traditions to ensure the
popularity of our food. As a result of our balance between innovation and tradition, we are able
to create food that satisfies the evolving preferences of our diverse customer base.
We use quality ingredients to prepare our food, and our menu items are offered at
accessible price points to bring value-for-money proposition to our guests. We have
strategically designed our menu to achieve an average spending per guest of approximately
RMB50 to RMB70. Typically, each of our restaurants offers 50 to 80 menu items, which mainly
consist of signature dishes, appetizers, soups, main courses, vegetable dishes, desserts and
beverages. Our signature dishes are the highlights of our menu and have demonstrated enduring
popularity among our guests. The menu at our restaurants may differ from one another based
on food preferences and the size of our restaurants in the region considering our high standards
for freshness, quality and food safety. Set forth below are pictures and information with respect
to some of our popular menu items.
Signature Prawn with V ermicelli (೐४ക႟ሃ). The
recipe draws inspiration from traditional Cantonese
cooking style, which allows the ingredients to absorb our
special seafood sauce in the cooking process to create
succulent prawns and juicy vermicelli. Garnished with
our secret garlic sauce and served in a sizzling pot, this
dish brings a waft of wonderful aroma and deliciousness
to our customers.
Dongpo Pork Ribs (ս˺ર) The recipe was inspired
by the renowned Hangzhou dish of braised pork belly,
Dongpo Rou (սЂ). We carefully select high-quality
pork ribs, fry and braise them to perfection at our
restaurants. After the braising process, the tender pork
ribs absorb the rich and aromatic sauce, creating a
delightful melt-in-the-mouth deliciousness.
Green Tea Barbeque Pork (ၠ঩टЂ). We marinate pork
belly with special spices sourced from Southwest China
and cook the dish using Western barbeque method. The
dish features a balanced mixture of lean and fatty meat
and has proven its popularity among our guests across
Mainland China.
Stone Pot Tofu with Chicken Soup (ͩᒢᕒಷԌၵ). The
recipe combines the culinary techniques of Hangzhou
cuisine and Cantonese cuisine. We enhance the flavor of
tofu with thick chicken soup, and the dish appeals to
guests of all demographic backgrounds.
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Green Tea Roasted Chicken (ၠ঩टᕒ). Based on both
Chinese and Western culinary techniques, the recipe
involves marinating fresh chicken with over a dozen
condiments and then roasting it in a German-
manufactured oven. Featuring flavorful, juicy and tender
meat, Green Tea Roasted Chicken has garnered enduring
popularity among our guests.
Bread Temptation (ᙢ̍Ⴐ౅). Another iconic menu item
inspired by Western cuisine, the dessert features soft
bread cubes topped by a scoop of ice cream. While our
guests enjoy the dessert, the ice cream gradually melts
and soaks all bread cubes in sweet and delicious cream.
Leveraging the flexibility of Chinese fusion cuisine, we regularly update our menu to
refresh and enhance our guests’ dining experience and adapt to the latest trends. For details,
see “– Product and Menu Development.”
Ambience and Service
The comfortable ambience of our restaurants is integral to our warm and compassionate
brand image. We believe in the lasting and universal appeal of tradition and nature. Therefore,
we infuse the timeless elements of Chinese traditional culture and natural landscape into the
decoration of our restaurants, offering a dining experience that differentiates us from other
casual restaurants. Our design philosophy is validated by the rise of national style ( ਷ᆓ)i n
recent years, as elements of Chinese traditional art is gaining popularity in fashion, interior
design and other aspects of mass culture. Our restaurants attract young consumers who are
passionate about Chinese traditional culture, as well as other guests who value the aesthetic
aspect of their dining experience.
We typically choose among six design templates to decorate our new restaurants. Inspired
by the same design philosophy, these design templates allow us to maintain a consistent brand
image across Mainland China, while maintaining the flexibility to accommodate a variety of
site layouts. We collaborate with third-party studios to develop our design templates. We have
long-term relationships with such studios, which have developed a deep understanding of our
vision and design philosophy. We refresh our design templates periodically to incorporate new
design elements and adapt to the evolving taste of our guests.
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Set forth below is the picture and information with respect to our Bamboo Breeze (ࠬ
϶ᅂ) template.
Bamboo Breeze (϶ᅂ) is inspired by the elegant bamboo forest in spring. It resembles the tranquil scenery of
dappled morning light which shines through Hangzhou bamboo groves abounding in breeze, and creates an immersive
yet refreshing dining experience.
Set forth below is the picture and information with respect to our Longjing Boat Banquet
(࢖template.
Longjing Boat Banquet (࢖features the iconic elements of a beautiful Jiangnan water town, such as boats,
waterways and bridges. The design reminds our guests of their soothing trips to Jiangnan water towns.
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Set forth below is the picture and information with respect to our West Lake Banquet (Г
࢖template.
West Lake Banquet (࢖is inspired by the iconic natural sceneries of the West Lake of Hangzhou. The design
features traditional Chinese landscape paintings as wall decorations, as well as classic style furniture and lamps.
We aim to deliver warm hospitality and attentive service to our guests. We have adopted
a set of strict table service standards to meet the expectations of our guests that include every
step from welcoming the guests when they walk into the restaurant to properly saying goodbye.
We also utilize our IT system and technologies to enhance service efficiency. Orders from our
guests are collected by our central IT system, which is connected to both our restaurant kitchen
and cashier to reduce error and ensure the efficiency of service. Our restaurants also support
smart QR code menu ordering, which enables our customers to place orders with their smart
phones. Such orders are transmitted to both the restaurant kitchens and cashiers on a real time
basis.
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Restaurant Network Expansion
In 2022, 2023, 2024 and the period from January 1, 2025 to the Latest Practicable Date,
we opened 47, 89, 120 and 32 new restaurants, respectively. The following table sets out the
total number of our restaurants and their movement during the Track Record Period and up to
the Latest Practicable Date.
For the year ended December 31,
From
January 1,
2025 to
the Latest
Practicable
Date2022 2023 2024
Number of restaurants at the
beginning of the period 236 276 360 465
Number of new restaurants
opened during the period 47 89 120 32
Number of restaurants closed
during the period (7) (5) (15) (4)
Number of restaurants at the
end of the period 276 360 465 (1) 493(1)
Note:
(1) Including restaurants opened under the Mang Gang Le brand.
We slowed down the pace of restaurant expansion in 2022 due to the regional outbreaks
of COVID-19 and opened 47 new restaurants in 2022. We resumed the pace of restaurant
expansion in 2023 after the impact of COVID-19 pandemic started to subside and opened 89
and 120 new restaurants in 2023 and 2024, respectively. For details, see “– Expansion Plan and
Management.”
In addition, as of the Latest Practicable Date, we opened four restaurants in Eastern China
under a new brand called “ Mang Gang Le .” Mang Gang Le restaurants focus on offering Dim
Sum with an average spending per guest of approximately RMB30 to RMB40. We do not plan
to expand this new brand in the near future as we aim to continue focusing on the development
of our Green Tea restaurants while trial running the existing Mang Gang Le restaurants.
During the Track Record Period, we primarily focused on establishing our market
presence in three key regions, namely Eastern China, Guangdong province and Northern China,
which are the major economic centers of Mainland China. We increased market share in these
existing geographical markets by expanding into selected new locations within these markets
while increasing restaurant density in certain cities. In addition, we managed to continue our
expansion by opening restaurants in certain new markets during the Track Record Period. As
a result, the total number of our restaurants in other regions had increased to 169 as of
December 31, 2024. In addition, we also started to focus on expanding our restaurant
network in tier two, tier three and lower tier cities and the number of our restaurants in tier two,
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tier three and lower tier cities had increased from 113 as of December 31, 2022 to 234
as of December 31, 2024. Going forward, we will continue to explore expansion opportunities
in untapped locations to increase our footprint. The table below sets forth our market shares
in each geographical regions during the Track Record Period according to CIC:
For the year ended December 31,
2022 2023 2024
Eastern China (1) 0.51% 0.67% 0.80%
Guangdong province 1.37% 1.51% 1.61%
Northern China
(2) 1.30% 1.55% 1.46%
Other (3) 0.29% 0.41% 0.39%
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
We believe the increase in restaurant density in a city will deliver operational synergies
from economies of scale and improved restaurant level profitability, which will be driven by
more efficient and flexible staffing. Regional managers can re-deploy staff members among
nearby restaurants in cities with three or more restaurants to address short-term surges in
customer traffic, thereby achieving efficient distribution of staff among different restaurants
within the cluster. Restaurants located in different parts of a city, such as business districts and
residential neighborhoods, tend to have different peak hours. As our restaurant staff receive
standard training, a staff member does not need to undergo further training after being
deployed to a different restaurant and can start working immediately.
Our staff costs mainly consists of restaurant level staff cost and other staff cost, which
includes salaries and benefits payable to all other employees and staff, including Directors,
senior management and headquarters personnel. The restaurant level staff cost in cities with
three or more restaurants as a percentage of our revenue from restaurant operations and
delivery service was 1.7, 1.2 and 1.7 percentage points lower in 2022, 2023 and 2024,
respectively, when compared to that in cities with fewer than three restaurants, thereby
improving our restaurant level profitability. The table below sets forth the breakdown of our
staff costs during the periods indicated.
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For the year ended December 31,
2022 2023 2024
(RMB in thousands)
Restaurant level staff cost 548,939 804,516 868,451
Other staff cost 77,458 106,512 120,557
Staff costs 626,397 911,028 989,008
The table below sets forth our restaurant level staff cost as a percentage of our revenue
from restaurant operations and delivery service during the periods indicated in cities with
different level of restaurant density.
For the year ended December 31,
2022 2023 2024
Cities with fewer than three restaurants 24.4% 23.4% 22.8%
Cities with three or more restaurants 22.7% 22.2% 21.1%
Overall 23.1% 22.5% 21.5%
Historically, we operated certain restaurants owned by our connected persons pursuant to
our cooperation agreements with such parties. As of December 31, 2022 and 2023, four and
four of the restaurants in our restaurant network were operated under such arrangements,
respectively. Such cooperation agreements had been terminated on December 25, 2024,
following our acquisition of 100% of equity interest in Hangzhou Greentea, which allows us
to own and directly operate such restaurants without any cooperative arrangement.
We closed a total of seven, five, 15 and four restaurants in 2022, 2023, 2024 and the
period from January 1, 2025 to the Latest Practicable Date, respectively. The closing down of
most of such restaurants was determined on a case-by-case basis and primarily due to (i) the
expiration of the relevant lease agreements and our business decisions not to renew such lease
agreements, (ii) performance and other commercial reasons, including the impact of the
COVID-19 pandemic, or (iii) winding down of certain landlords’ operations.
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RESTAURANT PERFORMANCE
Key Performance Indicators
The following table sets forth certain key performance indicators of our restaurants by
location during the Track Record Period. Where applicable, the revenue in the table represents
revenue from restaurant operations and delivery service.
For the year ended December 31,
2022 2023 2024
Revenue (in thousands of RMB) (1)
Eastern China (2) 710,137 1,107,548 1,265,491
Guangdong province 621,811 814,699 762,035
Northern China
(3) 517,146 708,494 626,798
Other (4) 524,539 946,401 1,167,906
Total 2,373,633 3,577,142 3,822,230
For the year ended December 31,
2022 2023 2023 2024
Revenue growth (%):
Eastern China (2) 56.0 14.3
Guangdong province 31.0 (6.5)
Northern China
(3) 37.0 (11.5)
Other (4) 80.4 23.4
Overall 50.7 6.9
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As of December 31,
2022 2023 2024
Number of restaurants
Eastern China (2) 84 115 155
Guangdong province 63 72 83
Northern China
(3) 55 56 58
Other (4) 74 117 169
Total 276 360 465
Number of restaurants
Tier one and new tier one cities (5) 163 187 231
Tier two cities 59 84 115
Tier three and lower tier cities 54 89 119
Total 276 360 465
Number of restaurants
Small restaurants
(6) 100 174 284
Large restaurants (7) 176 186 181
Total 276 360 465
For the year ended December 31,
2022 2023 2024
Average daily restaurant sales per
store (in thousands of RMB) (8)
Eastern China (2) 23.9 27.2 21.5
Guangdong province 24.5 28.6 22.7
Northern China
(3) 21.7 28.9 24.6
Other (4) 22.4 25.0 20.2
Overall 23.2 27.2 21.7
Total guests served (thousand)
(9)
Eastern China (2) 11,363 17,594 22,016
Guangdong province 9,804 13,184 14,355
Northern China
(3) 8,261 11,469 10,937
Other (4) 8,358 15,675 20,763
Overall 37,786 57,922 68,071
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For the year ended December 31,
2022 2023 2024
Average guests served per day
per restaurant (10)
Eastern China (2) 441 508 471
Guangdong province 476 550 537
Northern China
(3) 457 566 551
Other (4) 404 470 420
Overall 444 516 477
Average spending per guest (RMB)
(11)
Eastern China (2) 62.6 63.0 57.5
Guangdong province 63.5 61.8 53.1
Northern China
(3) 62.7 61.8 57.3
Other (4) 62.8 60.4 56.2
Overall 62.9 61.8 56.2
Table turnover rate (times/day)
(12)
Eastern China (2) 2.71 3.11 2.82
Guangdong province 3.06 3.37 2.93
Northern China
(3) 2.78 3.52 3.38
Other (4) 2.72 3.28 3.04
Overall 2.81 3.30 3.00
Notes:
(1) Representing revenue generated from restaurant operation and delivery service.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Consisting of Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(5) For the purpose of this breakdown, including Hong Kong SAR.
(6) Refers to restaurants with GFA of less than 450 square meters.
(7) Refers to the restaurants with GFA of 450 square meters or more.
(8) Calculated by dividing revenue from restaurant operations for the period by the total restaurant
operation days for the period in the same region.
(9) Including dine-in guests and customers who order take-outs for the period in the same region. We count
one delivery order as one guest.
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(10) Calculated by dividing the total guests served for the period by the total restaurant operation days for
the period in the same region. For further details on how we calculate total guests served, see note (8).
(11) Calculated by dividing revenue generated from restaurant operation and delivery service for the period
by total guests served, including both dine-in customers and customers who order take-outs, for the
period in the same region. For further details on how we calculate total guests served, see note (8).
(12) Calculated by dividing the total dine-in orders served for the period by the sum of products of total
restaurant operation days for the period and table count of each restaurant during the period in the same
region.
The COVID-19 pandemic and the restrictive measures imposed by the Chinese
government in response to the pandemic have been major factors that affected our results of
operations in 2022.
After the Chinese government phased out the “zero-COVID” policy in December 2022,
our results of operation showed a strong recovery in 2023 due to a significant surge in
consumer spending in the first half of 2023 following the COVID-19 pandemic. According to
CIC, the strong performance in the catering industry in the first half of 2023 is primarily due
to such significant surge in spending. In 2023, none of our restaurants suspended operation due
to the COVID-19 pandemic and our customer traffic rebounded. As a result, our table turnover
rate recovered to 3.30 in 2023, which was at similar level as the table turnover rate of 3.34 in
2019 before the COVID-19 pandemic. As our total guests served and table turnover rate
increased in 2023 as compared with that in 2022, we recorded an increase in our revenue from
restaurant operations and delivery service by 50.7% from RMB2,373.6 million in 2022 to
RMB3,577.1 million in 2023.
In 2024, our restaurant performance declined in general as compared to that in 2023,
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment. According to CIC, the industry in general
also showed the same trend. As a result, our overall average spending per guest decreased from
RMB61.8 in 2023 to RMB56.2 in 2024; and our overall table turnover rate also decreased from
3.30 in 2023 to 3.00 in 2024. On the other hand, our overall total guests served increased from
57.9 million in 2023 to 68.1 million in 2024, primarily attributable to the increase in the
number of our restaurants in operation. Meanwhile, our delivery orders increased from 2023
to 2024 as we strategically increased our focus on delivery services in 2024. As a result of the
foregoing, our revenue from restaurant operations and delivery service increased by 6.9% from
RMB3,577.1 million in 2023 to RMB3,822.2 million in 2024.
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Initial Breakeven Period and Cash Investment Payback Period
Over 95% of our restaurants opened during the Track Record Period and in operation as
of the Latest Practicable Date achieved initial breakeven within two months. For the purpose
of providing a meaningful analysis, we did not include the only higher-end restaurant in our
restaurant network that generally has higher average spending per guest of above RMB500
when analyzing the average time to achieve initial breakeven. Among the restaurants which
have achieved cash investment payback as of the Latest Practicable Date, the average cash
investment payback period for our restaurants opened during the Track Record Period and in
operation as of the Latest Practicable Date was 17.0 months. After the COVID-19 pandemic,
our restaurant level performance showed a strong recovery. As such, among the restaurants
which have achieved cash investment payback as of the Latest Practicable Date, the average
cash investment payback period for our restaurants opened in 2023 and 2024 and in operation
as of the Latest Practicable Date was 14.3 months.
The table below sets forth the information relating to breakeven of our restaurants opened
during the periods indicated:
For the year ended December 31,
2022 2023 2024
Number of restaurants that
commenced operation during
the year 47 89 120
Number of restaurants that did not
achieve breakeven as of the end
of the year 10 7 1
When all of the restaurants that
commenced operation during the
year achieved initial breakeven January 2023 March 2024 January 2025
During the Track Record Period, we opened a total of 256 restaurants. As of the Latest
Practicable Date, all of our restaurants have achieved initial breakeven.
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Same Store Sales
The following table sets forth details of our same store sales by location of the restaurants
during the Track Record Period.
For the year ended December 31,
2022 2023 2023 2024
Number of same stores (1)
Eastern China (2) 45 61
Guangdong province 44 43
Northern China
(3) 46 45
Other (4) 40 48
Overall 175 197
Same store sales
(in thousands of RMB) (5)
Eastern China (2) 446,473 563,046 676,972 601,465
Guangdong province 447,320 524,034 516,138 451,301
Northern China
(3) 455,595 599,169 571,576 532,779
Other (4) 361,778 473,505 504,633 449,498
Overall 1,711,166 2,159,754 2,269,319 2,035,043
Same store sales
growth (%)
Eastern China (2) 26.1% (11.2%)
Guangdong province 17.1% (12.6%)
Northern China
(3) 31.5% (6.8%)
Other (4) 30.9% (10.9%)
Overall 26.2% (10.3%)
Average same store sales
per restaurant (in
thousands of RMB)
Eastern China
(2) 9,922 12,512 11,098 9,860
Guangdong province 10,166 11,910 12,003 10,495
Northern China
(3) 9,904 13,025 12,702 11,840
Other (4) 9,044 11,838 10,513 9,365
Overall 9,778 12,341 11,519 10,330
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Notes:
(1) Consisting of restaurants that were open for more than 300 days during the years under comparison and
had the same number of tables during the years under comparison.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Consisting of Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(5) Refers to the aggregate revenue generated from restaurant operation and delivery service at our same
stores for the period indicated.
Explanation for changes in same store sales
In 2023, the same store sales in all three key regions increased as compared with that in
2022, as a result of the strong recovery of our customer traffic due to a significant surge in
consumer spending in the first half of 2023 following the easing of government-imposed
restrictions related to COVID-19 in December 2022. According to CIC, the strong performance
in the catering industry in the first half of 2023 is primarily due to such significant surge in
spending.
In 2024, we recorded decreases in same store sales in all regions. Such decreases were
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment, which led to decreases in our table
turnover rate and average spending per guest in all regions. According to CIC, we
outperformed the majority of our industry peers in terms same store sales growth in 2024.
For details, see “Financial Information – Factors Affecting Our Financial Condition and
Results of Operations.”
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Top 10 Restaurants
The table below sets forth our top 10 restaurants in terms of revenue by region and their key operating data for the period indicated.
Revenue
Percentage
of total
revenue
Average time
to achieve
initial
breakeven (1)
Cash
investment
payback
period (1)
Table
turnover
rate
Total
guests
served
Average
spending
per guest
(RMB’000) (%) (months) (months) (thousand) (RMB)
2022
Eastern China (2) 158,090 7% 1.6 13.1 3.88 2,432 65.0
Guangdong province 159,906 7% 2.0 12.4 3.79 2,526 63.3
Northern China
(3) 137,638 6% 2.0 21.2 2.95 2,168 63.5
Other (4) 125,843 5% 1.7 15.7 3.53 1,889 66.6
2023
Eastern China (2) 204,608 6% 1.6 12.2 4.32 3,107 65.9
Guangdong province 197,287 5% 1.5 10.8 4.44 3,137 62.9
Northern China
(3) 174,475 5% 1.8 19.2 3.65 2,747 63.5
Other (4) 166,469 5% 1.9 18.4 4.59 2,554 65.2
2024
Eastern China (2) 192,891 5% 2.2 13.8 4.29 2,940 65.6
Guangdong province 170,866 4% 1.4 13.7 4.11 3,146 54.3
Northern China
(3) 155,761 4% 2.2 20.5 3.26 2,633 59.1
Other (4) 145,213 4% 2.0 18.9 4.03 2,457 59.1
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Notes:
* We did not include the only higher-end restaurant in our restaurant network that generally has higher average spending per guest of above RMB500 when analyzing the top
10 restaurants.
(1) Calculated based on the relevant data relating to the restaurants opened during the Track Record Period and are in operation as of the Latest Practi cable Date that are among
the top 10 restaurants in terms of revenue in each region during the year. For the purpose of providing a meaningful analysis, we only include restauran ts that had achieved
cash investment payback as of the Latest Practicable Date when analyzing the average cash investment payback period for our restaurants.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Consisting of Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu, Tibet, Guizhou, Chongqing, Shaanxi, Heilongji ang, Liaoning, Jilin, Hunan,
Hainan and Hong Kong SAR.
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Loss-Making Restaurants
The table below sets forth the number of loss-making restaurants, which refer to
restaurants that were in operation during the relevant period and recorded loss for the relevant
period, and the key operating data relating to such restaurants for the periods indicated.
As of/for the year ended December 31,
2022 2023 2024
Number of loss-making restaurants 54 30 26
Revenue of the loss-making restaurants
(in RMB thousands) 187,935 59,614 73,129
As a percentage of total revenue (%) 7.9% 1.7% 1.9%
Restaurant level operating loss
(1) (in
RMB thousands) (48,344) (9,897) (6,973)
Table turnover rate 2.35 3.03 2.31
Total guests served (thousand) 2,836 988 1,393
Average spending per
guest (RMB) 66.3 60.3 52.5
Note:
(1) Calculated by subtracting restaurant level revenue by the following restaurant level costs and expenses:
(i) staff costs, (ii) cost of raw materials, (iii) depreciation, (iv) rental expenses, (v) utilities expenses,
(vi) delivery service expenses and (vii) other restaurant related expenses.
We had a total of 54, 30 and 26 restaurants that recorded restaurant level operating loss
in 2022, 2023 and 2024, respectively. The reasons for such restaurants’ financial results were
(i) we had 28, 29 and 18 newly-opened restaurants that had limited time of operation in 2022,
2023 and 2024, respectively, and were still in the ramp-up phase, (ii) we had 22 restaurants that
were affected by the COVID-19 pandemic in 2022, (iii) we had one restaurant that recorded
restaurant level operating loss in 2022 as it had suspended operation due to lack of relevant fire
safety inspection approvals, and (iv) we had three, one and eight restaurants that recorded
restaurant level operating loss primarily due to unsatisfactory operating performance in 2022,
2023 and 2024, respectively.
The average turnaround period for the loss-making restaurants during the Track Record
Period and were in operation as of the Latest Practicable Date was 1.1 months, 1.5 months and
1.4 months in 2022, 2023 and 2024, respectively. The turnaround period for a previously
loss-making restaurant represents the amount of time for such restaurant to achieve its first
monthly restaurant level operating profit after the relevant loss-making period. All of our
restaurants opened in 2024 and in operation as of the Latest Practicable Date achieved first
monthly restaurant level operating profit after the relevant loss-making period. The restaurant
level operating profit mentioned above is prepared in accordance with the IFRS and reflects
adjustments in accordance with the IFRS, including the effect of IFRS 16 Leases , and deducted
depreciation and amortization.
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As of the Latest Practicable Date, among the 26 restaurants that recorded restaurant level
operating loss in 2024, (i) 14 restaurant had recorded its first monthly restaurant level
operating profit, (ii) 12 restaurants had not recorded restaurant level operating profit, of which
five restaurants had limited time of operation during the period and seven restaurants had
unsatisfactory operating performance. These seven restaurants had unsatisfactory operating
performance primarily due to insufficient customer traffic of the shopping malls where those
relevant restaurants located.
DELIVERY SERVICE
We offer our delivery services primarily through two major third-party online food
delivery platforms in the PRC. According to our agreements with these third-party online food
delivery platforms, we have agreed to pay 10% to 18% of the revenue generated through their
platforms as commission fee. We are responsible for costs and expenses incurred during food
preparation. Because we conduct all food preparation for orders made on these platforms, we
will be responsible for any liabilities related to these orders.
Our delivery service is catered to the demand of our delivery guests and we have
developed special dishes and combinations for such guests. During the Track Record Period,
we did not devote significant effort in promoting our delivery service due to (i) our focus on
dine-in customer experience and (ii) the increasing commission fees charged by third-party
online food delivery platform. For the years ended December 31, 2022, 2023 and 2024, revenue
from delivery service totaled RMB397.1 million, RMB517.2 million and RMB723.1 million,
respectively, and the average spending per order for our delivery services was around RMB58,
RMB59 and RMB53, respectively. Revenue from delivery service increased across all regions
in 2024 as we strategically increased our focus on delivery services in 2024. Going forward,
we may increase the scale of our delivery service to complement our dine-in service.
OTHER SOURCES OF REVENUE
During the Track Record Period, we also generated revenue from certain other sources.
For example, we collaborate with certain providers of cell phone charging services, and we
receive commissions from such service providers based on our guests’ usage of their services
at our restaurants. We also generate revenue from sales of products such as cooking oil,
condiments, flour and gift boxes, and parking services. Revenue from other sources amounted
to RMB1.8 million, RMB12.0 million and RMB16.0 million for the years ended December 31,
2022, 2023 and 2024, respectively.
PRODUCT AND MENU DEVELOPMENT
Leveraging the flexibility of Chinese fusion cuisine, we regularly update our menu to
refresh our guests’ dining experience and adapt to the latest trends. Our ability to continuously
introduce new and popular menu items drives guests’ enthusiasm towards our restaurants and
differentiates us from other casual restaurants. We introduced 172, 168 and 203 new menu
items in 2022, 2023 and 2024, respectively.
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To ensure culinary creativity, we devote significant resources to menu development. Our
menu development team is directly led by our co-founder and chairman, Mr. Wang Qinsong ( ˮ
ؒand constantly experiments with high-quality, fresh ingredients to create proprietary
recipes. We also engage external consultants, including award-winning chefs, to develop new
menu items for us and advise on menu improvement. While some recipes are designed for our
nationwide restaurant network, others are developed by our restaurant staff, which cater to
local tastes. In addition, we frequently introduce menu offerings that reflect the concept of a
healthy diet based on the philosophies of Chinese traditional medicine.
Our menu development efforts are informed by analysis of market data. We analyze sales
results and other data collected from our restaurant network to understand our target guests.
For example, we compare the sales results of same menu items across different regions to gain
insights as to food preferences in each region. We also track the product and menu development
of our competitors to gather further information as to market trends.
Besides bringing culinary delights to our guests, our menu development efforts are also
guided by the following principles.
 Food safety . We place the highest priority on food safety, and we avoid ingredients
that are prone to food safety issues.
 Stable supply of ingredients . We only use ingredients of which we are able to obtain
a stable supply. For example, we have selected chicken as an important ingredient
for our menu offerings, because there has been a stable supply of chicken in
Mainland China.
 Feasibility of standardization . We strive to maintain the consistency in taste, food
quality and presentation of our food across our restaurant network. To this end,
many of our menu items are designed to require relatively few steps of standardized
preparation at our restaurants for serving. For example, an oven can be operated
through simple and standard procedures, so we have designed a variety of popular
menu items that only require our kitchen staff to roast or bake the food.
We typically engage in four menu development cycles each year, with each cycle taking
three to four months and consisting of the following key steps.
 Project proposal . Based on the principles described above and thorough analysis of
market data, our menu development team proposes a number of new items for each
menu development cycle.
 Committee approval. The proposed dishes will be presented to a tasting committee
at our headquarters. The tasting committee comprises of our co-founder and
chairman, Mr. Wang Qinsong (ؒand members of our senior management and
other menu development specialists. Our tasting committee will evaluate the
proposed dishes based on visual presentation, taste, profitability, marketability,
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preparation process and other relevant factors. Once a new dish is approved by the
tasting committee, our menu pricing committee will assess and determine the price
of such dish. The menu pricing committee comprises of Mr. Wang Qinsong (ؒ,)
Ms. Y u Liying and Ms. Tai Fang, vice presidents of our Company, and regional
managers.
 Trial launch. We conduct trial launches in selected restaurants and have adopted a
set of strict criteria. If a new menu item does not generate satisfactory sales results
after the trial launch, our menu development team will typically adjust the recipe
based on customer preferences or take it off our menu. We also collect feedback
from our guests and fine-tune the taste and quality of the proposed menu item during
the trial launch.
ORGANIZATIONAL STRUCTURE
Our internal organization consists of three components, namely our headquarters,
regional groups and restaurants. Our organizational structure enables us to implement uniform
standards across our nationwide restaurant network, while providing our restaurants with
sufficient flexibility to address local conditions.
Headquarters
Our headquarters effectively maintain control over critical aspects of restaurant
management, including food safety, supplier selection and management, compliance,
information technology, finance and restaurant expansion management. We believe that these
aspects of our operations require standardized management to ensure the quality of our food
and service. Moreover, we believe that standardized operations in these aspects facilitate our
scalable expansion.
Regional Groups
Our restaurant network management consists of three regional groups, which are
responsible for directly supervising the restaurants within their respective regions. Our
regional managers are responsible for budgeting, cost control, operational management of the
restaurants within their respective regions. They also support and supervise the individual
restaurants to ensure their strict adherence to our uniform operational standards.
Restaurant Level
The day-to-day operations of our restaurants are managed by restaurant managers. Our
restaurant managers are responsible for supervising the restaurant staff and handling guest
complaints and emergency situations. Furthermore, restaurant managers are required to
implement the rules set out in our employee manual, which are primarily related to human
resource management, food safety and cash management. Each restaurant manager makes a
monthly report to the relevant regional group, and the report covers key aspects of restaurant
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operations, such as sales, costs and expenses, inventory status, maintenance needs and human
resources status. The employees at each restaurant are comprised of a kitchen staff and a
service staff. The kitchen staff is directly supervised by a head chef, and the service staff is
directly supervised by the restaurant manager.
EXPANSION PLAN AND MANAGEMENT
The success of our business depends on the continued healthy expansion of our restaurant
network. We believe there is tremendous whitespace opportunity to expand in both existing and
new cities in Mainland China and overseas. We have established a highly scalable business
model by standardizing key aspects of restaurant operations, and we will continue to grow our
restaurant network with discipline. In 2022, we slowed down our restaurant expansion plan and
opened 47 new restaurants due to the impact of COVID-19 pandemic. We resumed our
expansion plan after the impact of COVID-19 pandemic started to subside and opened 89 and
120 new restaurants in 2023 and 2024, respectively. We expect to open 150, 200 and 213 new
restaurants in 2025, 2026 and 2027, respectively. The following table sets forth details of our
plan to expand our restaurant network by geographical regions:
2025 2026 2027
Eastern China (1) 44 53 62
Guangdong Province 19 13 10
Northern China
(2) 18 13 19
Other (3) 64 111 109
Overseas (4) 51 01 3
Total 150 200 213
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan and Hainan.
(4) For the purpose of this prospectus, consisting of Hong Kong SAR, Southeast Asia and North America.
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The following table sets forth details of our plan to expand our restaurant network by city
tier:
2025 2026 2027
Mainland China
Tier one and new tier one cities 47 56 44
Tier two cities 40 40 43
Tier three and lower tier cities 58 94 113
Overseas
(1) 51 01 3
Total 150 200 213
Note:
(1) For the purpose of this prospectus, consisting of Hong Kong SAR, Southeast Asia and North America.
The following table sets forth details of our plan to expand our restaurant network by
restaurant size:
2025 2026 2027
Small restaurants (1) 139 183 193
Large restaurants (2) 11 17 20
Total 150 200 213
Notes:
(1) Refers to restaurants with GFA of less than 450 square meters.
(2) Refers to restaurants with GFA of 450 square meters or over.
We plan to open 150 new restaurants in 2025. As of the Latest Practicable Date, we have
commenced operation of 32 restaurants and signed the lease agreements for 17 restaurants to
be opened in 2025, and renovation has been commenced for nine restaurants. We conducted
feasibility studies before signing the lease agreement for each new restaurant and substantially
all of our new restaurants achieved or are expected to achieve initial breakeven within two
months of operation. During the Track Record Period, we opened more new restaurants in the
second half of the years, which is consistent with the norm in the industry. We expect to
continue to follow such pattern for our restaurant openings in the future.
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Our estimated capital expenditure and other operating expenses for opening each new
restaurant on average amount to approximately RMB2.1 million to RMB3.5 million in
Mainland China and RMB6.0 million to RMB15.0 million overseas, mainly depending on the
size of the restaurant. Such capital expenditure and operating expenses primarily include costs
relating to construction and renovation, purchase of equipment and other one-off expenses
associated with the opening of the relevant restaurant. In 2024, we opened a total of 120 new
restaurants and incurred RMB272.2 million of investment costs for opening such new
restaurants. For the years ending December 31, 2025, 2026 and 2027, our planned investment
costs for opening new restaurants is expected to be approximately RMB354.2 million,
RMB505.0 million and RMB556.1 million, respectively. We plan to fund such restaurant
network expansion with a mix of cash flow generated from our operations and the proceeds
from the Global Offering. For details, see the section headed “Future Plans and Use of
Proceeds.” With respect to the new restaurants that we expect to open in 2025, including the
32 restaurants that had already commenced operation as of the Latest Practicable Date, we have
incurred and committed amounts of approximately RMB97.4 million since January 1, 2025 and
up to the Latest Practicable Date. In addition, we may continue to selectively open new
restaurants in overseas metropolises where we expect our brand will resonate with a critical
mass of local consumers. As of the Latest Practicable Date, we had opened four restaurants in
Hong Kong SAR. Moreover, we plan to increase the number of our restaurants located at
famous tourist sites to further enhance our brand image and increase our opportunities to
further expand our restaurant network. As of the Latest Practicable Date, we had opened nine
restaurants and signed the lease agreements for two restaurants at tourist sites. We expect to
open a total of 17 such restaurants from 2025 to 2027. We expect substantially all of our new
restaurants to achieve an initial breakeven within one to four months and have an average
investment payback period of 18 months and we expect our restaurants opened or to be opened
in 2025 to achieve initial breakeven and investment payback within such time frame as well.
We plan to both increase our market share in existing geographic markets and expand into
new geographic markets. In particular, we believe our value-for-money pricing gives us a
competitive advantage when expanding into tier two, tier three and lower tier cities. According
to CIC, the casual Chinese cuisine restaurants market had witnessed a growth in the past few
years and is expected to maintain a steady growth at a CAGR of 9.1% from 2024 to 2029,
reaching RMB826.1 billion in 2029. In addition, the future growth potential of casual Chinese
fusion restaurant market is promising as it targets customers in tier two, tier three or lower tier
cities, which represent approximately 75% of the market share of the catering market in
Mainland China. These cities have also shown higher rates of market expansion as compared
to the tier one cities. Therefore, we believe there is still a significant market opportunity for
us to further expand our restaurant network. Specifically, we will continue to increase the
number of our restaurants in the three key regions, namely Eastern China, Guangdong province
and Northern China. We plan to expand our presence in cities that have relatively high GDP
and average disposable income, such as Chongqing, Haikou and Xiamen. We will also continue
to seek collaboration with leading shopping malls within the relevant regions. Our management
team typically devises annual restaurant expansion plans based on industry trends, our supply
chain, human resources and financial condition.
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As part of each annual restaurant expansion plan, we compile a list of potential restaurant
locations. We consider several additional factors when deciding whether to expand in a certain
region, including the level of urbanization, population, economic development, competition,
our target operation results, available locations and our cash flow. Our management team will
continue to review and adjust the expansion plan on a monthly basis based on the actual
situation. In addition, we usually conduct a feasibility study before we open a new restaurant.
Such study is normally conducted four to six months before the opening of each restaurant,
taking into account the time required to conduct such feasibility study and prepare for the
restaurant opening. The feasibility study typically covers the existing competitors close to the
potential location, the population and demographic of the neighborhood, floor plan of the
potential location and preliminary financial projections of the restaurant.
To avoid cannibalization among our own restaurants, we generally avoid opening a new
restaurant within a three-kilometer radius of an existing restaurant in a tier one or new tier one
city. In other cities, we may position our restaurants further apart from each other to ensure
sufficient customer traffic at each location. In general, we only open one restaurant for every
300,000 to 500,000 residents within a city.
The actual number, location and timing of new restaurant openings in any period will be
affected by a number of controllable and uncontrollable factors. We may make necessary
adjustment to the number, location and timing of planned new restaurant openings depending
on market conditions, status of preparation for new restaurant openings and other relevant
factors. Based on the estimated growth in the casual Chinese cuisine restaurants market in
Mainland China, as well as our well-established brand reputation and successful business
model, our Directors are of the view that there is sufficient demand to support our expansion
plans.
We have established a dedicated expansion management department, which is based at
our Hangzhou headquarters and led by Ms. Y u Liying, our executive director and vice
president, who is responsible for the management of supply chain, construction projects, public
relations and the expansion of restaurant network. The team coordinates the expansion of our
restaurant network across the nation, while paying close attention to local conditions. The team
is responsible for, among other things, selecting sites for new restaurants, negotiating lease
agreements with landlords, guiding the preparation for new restaurant openings and assessment
of compliance with relevant laws and regulations.
Site Selection
We focus on selecting suitable sites where people want to gather for delicious and
relaxing meals. Our restaurants are typically located at sites with significant pedestrian traffic,
such as shopping malls. When evaluating a site, our expansion management department
conducts thorough analysis of market data and site visits to form a holistic view as to its
suitability. Relevant factors for site selection include, among other things:
 average disposable income and population density of the local community;
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 performance of other casual Chinese restaurants in the vicinity;
 estimated customer traffic;
 accessibility to public transportation; and
 rental costs and estimated return on investment.
Lease Arrangement
The lease arrangements for our restaurants generally last for five to 10 years with an
option to renew. We do not own any property for our restaurant sites and believe such approach
reduces our capital investment requirements. Our leases typically include a rent-free period of
up to three months to facilitate the decoration and renovation of the premises. Due to our
popularity, certain landlords agree to reimburse our renovation cost. During the Track Record
Period, the aggregate amount of reimbursement on renovation costs we received from our
landlords was not material. As of December 31, 2022, 2023 and 2024 and the Latest Practicable
Date, 185, 245, 322 and 344 of our restaurants were under hybrid rent arrangements,
respectively, which include both variable payment and fixed payment, and our variable rent
payable was calculated with reference to the sales at the particular restaurant. Revenues
generated from such restaurants accounted for 66.2%, 67.8% and 67.6% of our total revenue
in 2022, 2023 and 2024, respectively. The leases under hybrid rent arrangements include a
minimum rent payment clause pursuant to which we are required to pay the higher of the
agreed minimum rent or the contingent rent calculated based on 1% to 12% of the sales of the
restaurant. Other leases were either under fixed rent arrangements or contingent rent
arrangements which are calculated based on 1% to 7% of the sales at the particular restaurant.
The table below sets forth the maturity profile of our lease agreements as of the Latest
Practicable Date.
Restaurants
Warehouses
and storage
units Offices
Employee
dormitories Total
One year and less 29 24 – 246 299
Two years 40 – 1 11 52
Three to five years 158 11 4 – 173
Six to 10 years 274 8 – – 282
Over 10 years 6 – – – 6
507* 43 5 257 812
Note:
* Including 14 leases (for which the lease terms have started as of the Latest Practicable Date) entered into
for restaurants that have not opened and were in the process of being opened as new restaurants in 2025.
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Project Execution
New restaurant managers, with the support of our expansion management department, are
responsible for executing new restaurant openings. To ensure the successful ramp up of our
new restaurants, we typically select restaurant managers of our existing restaurants to act as
new restaurant managers. We have standardized the new restaurant opening process, and our
expansion management department will supervise and provide guidance throughout the
process. Generally, it takes around four months from completing site selection to new
restaurant opening. Key aspects of our new restaurant opening process include:
 Licenses and compliance. With the guidance of our legal department, the restaurant
manager commences application for necessary licenses and permits, such as the
business license, food safety license and fire safety inspection certificate. We
commence license and permit applications as one of the first major steps in project
execution.
 Restaurant decoration. Our expansion management department selects the
appropriate design template for the new restaurant. We engage third parties to
undertake the decoration work based on our design template. The restaurant manager
also orders the necessary restaurant appliances and materials.
 Menu selection and pricing. Our regional managers are generally responsible for
selecting menu items for a new restaurant within their respective region and for
ensuring that the new restaurant follows the prices set by our pricing committee.
 Staff recruitment and training. After recruiting the employees for a new restaurant,
we provide training to such employees at our existing restaurants for two to four
weeks before the opening of the new restaurant. We also relocate a number of
employees from our existing restaurants to leverage their experience.
OPERATIONS MANAGEMENT
We closely supervise the operations of our restaurants to ensure the quality of food and
services provided by our restaurants and enhance operational efficiency. To effectively manage
our restaurant network, we mainly focus on standardization, pricing, restaurant performance,
customer feedbacks, as well as settlement and cash management.
Standardization
We rely on standardized operation to maintain the consistency in the quality of food and
services and the overall dining experience across our nationwide restaurant network. We have
established a comprehensive set of standards and specifications with respect to the key aspects
of our restaurant operations, including food storage, food preparation, restaurant hygiene, food
serving, employee conduct, as well as our staff training programs. For example, our kitchen
staff are required to follow standardized procedures to ensure the flavor, presentation, quality
and hygiene standards of our menu items meet our standards. As a result, our guests can enjoy
our food with consistent quality and taste at any of our restaurants in our network. Standardized
operation also allows us to efficiently share knowledge and spread best practices when opening
new restaurants.
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Pricing
We offer quality food at accessible price points to bring value-for-money proposition to
our guests. Generally, pricing of our menu items are determined by our headquarters with close
attention to local conditions. When making pricing decisions with respect to a city, we consider
a number of factors, including the average disposable income, spending patterns of consumers
in the local community, procurement and rental costs of the restaurants, prices set by
competitors and our target profit margin. We also closely monitor the pricing of our
competitors in the same city to evaluate our pricing. We may update our pricing from time to
time to reflect market trends and general economic conditions.
Restaurant Performance Evaluation
We conduct periodic evaluation of the performance of our restaurants. Considering the
nature of our business operations, our evaluation process combines traditional performance-
based evaluation and on-site inspections by secret guests, who are independent third parties.
Secret guests submit reports covering key areas such as service quality, food quality and
restaurant hygiene after their inspections.
We also maintain a restaurant patrol team, which conducts unannounced inspections of
our restaurants. We select a number employees to serve on the restaurant patrol team on a
rolling basis, and their membership on the team is kept confidential from our restaurant staff.
As of December 31, 2024, the restaurant patrol team consisted of 20 members. The team
evaluates, among other things, the storage condition of food ingredients and the quality and
hygiene of food to be served to guests.
When we identify an under-performing restaurant, we investigate the underlying reasons,
which may be related to, among other things, the restaurant staff, menu offerings, pricing
and/or restaurant location. We then take corrective actions to address the issues that we have
identified, and we assess the effectiveness of such corrective actions after a period of time. The
relevant restaurant manager may also be demoted if such step is deemed necessary.
Customer Feedback Management
We pay close attention to customer feedback to maintain the popularity of the Green Tea
dining experience. Our restaurant managers are responsible for promptly resolving any
complaint regarding quality of food and services at the restaurant level and are authorized to
take remedial actions, including replacing the dishes that are the subjects of the customer’s
complaints or waiving charges on dishes. We also receive feedback or complaints from guests
through various online channels, such as our online suggestion form and WeChat official
accounts, as well as third-party restaurant review platforms. Our marketing team are tasked to
provide timely response to such online customer feedback. During the Track Record Period, we
did not receive any material customer complaint with respect to our restaurants.
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Settlement and Cash Management
We accept cash, credit cards, WeChat Pay, Alipay and other online payment at our
restaurants, as non-cash payments become increasingly common. As a result, cash payments as
a percentage total payments from our guests was low during the Track Record Period, the
percentage was approximately 1.0%. On the other hand, 98.9% and 0.1% of total payments
from our guests were settled through mobile payment and credit card or debit card,
respectively, in 2024. As advised by our PRC Legal Adviser, we are not required to obtain any
specific license or permits, or subject to any laws and regulations, in order to accept mobile
payments through WeChat Pay, Alipay and other online payment platforms.
To avoid misappropriation and embezzlement of cash, we have deployed a cash
management and delivery system at each of our restaurants. Restaurant managers are
responsible for ensuring that cash received during the day matches the sales records and
transferring such cash to our bank accounts on a daily basis. In addition, our finance team
monitors the accuracy of sales records through payment systems installed at our restaurants and
cash balances in our bank accounts on a daily basis.
During the Track Record Period, we had not encountered any incident of cash
misappropriation or embezzlement that had a material adverse impact on our business, results
of operations or financial condition.
Cash Vouchers
We sign cooperation agreements with certain third-party platforms to use services
provided by such platforms, such as online payment and offering of cash vouchers. Such
agreements usually have a term of one year and are renewable for another year. These
third-party platforms may offer cash vouchers to consumers, and such cash vouchers serve as
a marketing measure for us. Customers can purchase such cash voucher at a discount from the
face value from these third-party platforms. These third-party platforms include well-known
online shopping platform and large commercial banks in the PRC. Such discount offered on the
cash vouchers is agreed between us and the relevant third-party platform before issuance.
According to the terms of the cash vouchers, holders of such cash vouchers (the “ Holder ”) can
use the cash vouchers when they make purchases at our restaurants. During the Track Record
Period, RMB401.2 million, RMB711.9 million and RMB872.3 million, representing 15.9%,
18.8% and 21.6% of total payments from our guests were settled by the use of such cash
vouchers in 2022, 2023 and 2024, respectively. The price paid by the customer at discount from
face value is referred to as the purchase amount.
As advised by our PRC Legal Adviser, before a Holder uses such cash voucher, we have
no contractual relationship with the Holder. We have no right to receive the purchase amount
of the cash voucher paid by the Holder before the Holder uses such cash voucher. After the
Holder has purchased, and before the use of, such cash voucher, only the third-party platform
that offer such cash voucher has a contractual relationship with the Holder. As such, we are not
bound by the terms of the cash vouchers before the Holders use such cash voucher and cash
vouchers held by the Holders are not recorded as our liabilities.
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After the Holder uses such cash voucher to make purchase at our restaurants according
to the terms of the cash voucher, we have the contractual obligation to complete such purchase
and provide services to the Holder according to the terms of the cash voucher. We also have
the right to receive the purchase amount of the cash voucher, after deducting the platform
service fees, from the third-party platform (the “ Platform Payment ”). According to the
relevant terms in the agreements, the third-party platforms generally should settle the Platform
Payment with us within seven days after the Holder uses such cash voucher. We will only
recognize the purchase amount of the cash voucher as revenue after the Holder uses the cash
voucher at our restaurants and record the platform service fees as expenses. The following table
sets forth the percentage of total payments settled by using the cash vouchers of each of the
five largest third-party platforms that we collaborated during the Track Record Period:
For the year ended December 31,
2022 2023 2024
Platform A (1) 10.8% 14.6% 17.5%
Platform B (2) 1.6% 2.4% 3.2%
Platform C (3) 1.7% 0.9% 0.4%
Platform D (4) 1.0% 0.4% 0.1%
Platform E (5) 0.4% 0.1% 0.0%
Notes:
(1) An e-commerce platform launched in 2003 that offers online group buying with coupons and allows
users to submit ratings and reviews on local restaurants, stores, and other lifestyle entertainment
consumptions in the PRC. This platform is operated by a private company. The number of its daily active
users reached approximately 19 million in 2023.
(2) A multimedia platform launched in 2016 that provides short-video entertainment, online group buying
with coupons and e-commerce services in the PRC. This platform is operated by a private company. The
number of its monthly active users reached approximately 700 million in 2023.
(3) The mobile application platform of a major commercial bank established in 1987 in the PRC. The
commercial bank is listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange. The
number of monthly active users of this platform reached approximately 60 million in 2023.
(4) The mobile application platform of a major commercial bank established in 1986 in the PRC. The
commercial bank is listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange. The
number of monthly active users of this platform reached approximately 36 million in 2023.
(5) A third-party payment service provider established in 2010 that offers prepaid card and business services
in PRC. This platform is operated by a private company. The number of special contracted merchants
where its prepaid cards can be used for payment has reached approximately 270, covering various
industries such as supermarkets, catering, hotels, tourism, auto repair and entertainment.
These third-party platforms usually allow the Holders to request for refund at any time
before usage and after expiration of such cash voucher, according to their agreements with the
Holders. The relevant third-party platform is responsible for the refund under such
circumstances as the Holder has not used the cash voucher at our restaurants. Since there is no
contractual relationship between us and the Holder before the usage of the cash vouchers, we
do not have any liabilities in relation to these refunds. A Holder has the right to file complaint
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to the relevant third-party platforms and request for refund and/or compensation if the service
provided by us to the Holder is inconsistent with the terms of the cash voucher, or if we refuse
to provide services to the Holders according to the terms of the effective cash voucher for any
reason. According to the agreements with the third-party platforms, after a Holder uses the cash
voucher, we should be responsible for such refund and/or compensation. During the Track
Record Period and up to the Latest Practicable Date, such refunds or compensations were
immaterial to us. In addition, after a Holder used the cash voucher, the Holder has the right to
request us to compensate for any damages caused by the services provided by us in accordance
with applicable laws and regulations. During the Track Record Period and up to the Latest
Practicable Date, such compensation was immaterial to us.
Although we have the right to know the amount of cash voucher sold or to be sold by the
relevant third-party platforms in advance, we do not have the right to decide or object to such
amount. Notwithstanding the foregoing, we will use the following measures to manage the
effect of such cash voucher on our overall discount policy:
(i) We may limit the use of cash voucher according to the terms of the cash voucher.
For example, we may limit the Holders to use one cash voucher for each purchase.
(ii) We will also negotiate with the third-party platforms to adjust the discount provided
on the cash voucher offered from time to time based on the its analysis of the overall
level of discount offered at our restaurants on a monthly basis to reach a balance
between our goal to attract more customer traffic and maintaining the overall level
of discount offered at our restaurants.
In addition, we started to offer cash vouchers to customers on our WeChat mini-programs
in April 2022. Customers can purchase such cash voucher at a discount from the face value on
our WeChat mini-program and can use the cash vouchers when they make purchases at our
restaurants. After the customer uses such cash voucher on our WeChat mini-program, we have
the contractual obligation to complete such purchase and provide services to the customer
according to the terms of the cash voucher. In 2022, 2023 and 2024, RMB1.0 million,
RMB1.27 million and RMB4.69 million, representing 0.04%, 0.03% and 0.1%, respectively, of
total payment from our guests, were settled by the use of cash vouchers offered by us. We had
also recorded contract liabilities and other payables associated with cash vouchers sold on our
WeChat mini-program of RMB0.8 million, RMB0.7 million and RMB0.4 million as of
December 31, 2022, 2023 and 2024, respectively. We allow customers who purchase cash
vouchers on our WeChat mini-program to request for refund at any time before usage and after
expiration of such unused cash voucher. During the Track Record Period and up to the Latest
Practicable Date, such refunds or compensations were immaterial to us. Going forward, we
plan to maintain the same level of settlement by cash voucher sold on our WeChat
mini-program as a percentage of total payment from our guests.
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PROCUREMENT
We strive to obtain high quality supplies from reliable sources at reasonable prices. We
primarily procure (i) food ingredients, such as vegetables, fruits, semi-processed food products
and bakery products, as well as (ii) decoration materials, equipment and other supplies used in
our restaurants. We have established a procurement team at our headquarters to implement a
centralized purchase system for all purchase orders.
We collaborate with third-party food processing companies, which prepare semi-
processed food products and bakery products for us based on our proprietary recipes. Such food
products require relatively few steps of standardized preparation at our restaurants for serving.
Our food processing partners are generally responsible for procuring the ingredients for their
products. The centralized food preparation model helps us maintain the consistency in taste,
food quality and presentation of our food across our restaurant network. Furthermore, it allows
us to efficiently implement our food safety measures through careful selection and close
monitoring of the relevant food processing companies. We typically have multiple suppliers for
each of our main semi-processed food products and bakery products to minimize any potential
disruption in our operations, maintain sourcing stability, avoid over-reliance risk, and secure
competitive prices from suppliers.
Certain food ingredients, such as vegetables and fruits, have relatively short shelf lives,
and we procure them directly from local suppliers to ensure the freshness of such ingredients.
We also procure decoration materials and renovation services, kitchen and restaurant
equipment and certain other supplies from various third parties.
Supplier Selection and Evaluation
We utilize a comprehensive set of criteria to evaluate the suitability of each prospective
supplier. Such criteria includes, among other things, market reputation, financial conditions,
qualifications, production capacities, pricing and quality and safety of products.
We continuously identify and evaluate prospective suppliers to optimize our supply chain
arrangements. Our procurement team conducts market research on an ongoing basis and invites
competent candidates to our selection process. We conduct thorough assessments, such as
product sampling, before we engage each new supplier. With respect to food processing
companies, we also conduct site visits of their facilities both before engagement and
periodically afterwards. During such site visits, we assess whether the equipment and
production environment meet our comprehensive set of quality control, hygiene and food
safety criteria. We also collect feedbacks from our restaurants as to the quality and timeliness
of the supplies they receive. Based on such assessments, we terminate suppliers that fail to
meet our stringent standards.
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Supply Agreements
Currently, we collaborate with 205 third-party food processing companies. We generally
enter into standard one-year framework agreements with our suppliers for food ingredients,
salient terms of which are set out as follows:
 Quality. We generally provide detailed specifications regarding the quality of the
goods supplied. We require all suppliers to provide an inspection report or a
certificate of quality, except for small volume seasonal procurements.
 Quantity and Pricing. We generally do not stipulate the purchase amount or price in
the agreements, but set out the amount and price monthly or bi-monthly in the
purchase orders depending on the types of product procured and with reference to
the then market prices.
 Delivery schedule. We generally stipulate the delivery schedule in our agreements.
The delivery schedule depends on the types of product procured.
 Inspection and Acceptance. The food products and ingredients are subject to our
inspection upon arrival at our designated place, and we may refuse acceptance of
any defective products and ingredients. In case of any quality defects that are not
due to our negligence in storage, we are entitled to replacement or refund by the
suppliers pursuant to the supply agreement.
 Most favorable clause. We generally require the supplier to give us prices and terms
that are no less favorable than those given to any other customer.
 Payment. We generally settle payments with our suppliers once every one to three
months.
In order to reduce our risks resulting from the relatively wide price fluctuations of
bullfrogs, we enter into an agreement with a bullfrog supplier in November 2019, pursuant to
which the price of bullfrogs we procure from it is fixed during the contract term. The material
terms of our agreement with such bullfrog supplier are set out as follows:
 Quality. We provide detailed specifications regarding the quality and packaging of
the bullfrogs supplied. We require the supplier to provide an inspection report or a
certificate of quality.
 Quantity and Pricing. The agreement specifies a fixed quantity of bullfrogs that we
are committed to purchase.
 Delivery schedule. We require the supplier to deliver bullfrog products to our
designated warehouses on a monthly basis.
Our purchase of bullfrogs from such bullfrog supplier amounted to RMB11.6 million,
RMB27.8 million and RMB17.4 million in 2022, 2023 and 2024, respectively.
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Supplier Management
We had 352, 377 and 395 authorized suppliers as of December 31, 2022, 2023 and 2024,
respectively. On average, we have approximately three years of business dealings with our
major suppliers.
We typically have multiple suppliers for each of our main food ingredients to minimize
any potential disruption in our operations, maintain sourcing stability, avoid over-reliance risk,
and secure competitive prices from suppliers. During the Track Record Period, we did not
experience any interruption in our supply of food ingredients, early termination of supply
agreements, or failure to secure sufficient quantities of supplies that had any material adverse
impact on our business or results of operations.
Our suppliers generally offer us a credit term up of 30 to 90 days. We typically settle trade
payable obligations with respect to our suppliers through bank transfers.
The table below sets forth the details of our top five largest suppliers in each year during
the Track Record Period:
For the year ended December 31, 2024
Rank Supplier
Nature of
Supplier
Type of Product
Suppliers
Purchase
amount (RMB
in thousands)
Percentage of
total purchase
1 Supplier H Processor of food
ingredients
Food production
and food
ingredients
59,407 4.5%
2 Supplier A Wholesaler and
processor of
food ingredients
Food ingredients 54,239 4.2%
3 Supplier I Wholesaler and
processor of
food ingredients
Food ingredients 44,195 3.4%
4 Supplier J Processor of food
ingredients
Food production
and food
ingredients
40,721 3.1%
5 Supplier K Processor of
semi-processed
food products
Food ingredients 39,665 3.0%
Total 238,227 18.2%
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Notes:
(1) Supplier H is a private company established in May 2012 and mainly provides food production and
edible products in the PRC. It has a registered capital of RMB10.0 million.
(2) Supplier A is a private company established in March 2006 and mainly provides aquatic products in the
PRC. It has a registered capital of RMB54.8 million.
(3) Supplier I is a private company established in November 2009 and mainly provides semi-processed
aquatic products in the PRC. It has a registered capital of RMB66.0 million.
(4) Supplier J is a private company established in March 2023 and mainly provides food production and
edible products in the PRC. It has a registered capital of RMB5.0 million. In 2024, Supplier J purchased
beef short rib from us, which amounted to RMB5.1 million, representing less than 0.2% of our total
revenue in 2024.
(5) Supplier K is a private company established in May 2011 and mainly provides semi-processed food
products and condiments in the PRC. It has a registered capital of RMB50.0 million.
For the year ended December 31, 2023
Rank Supplier
Nature of
Supplier
Type of Product
Suppliers
Purchase
amount (RMB
in thousands)
Percentage of
total purchase
1 Supplier A (1) Wholesaler and
processor of
food ingredients
Food ingredients 68,297 5.2%
2 Supplier C
(2) Processor of semi-
processed food
products and
condiments
Semi-processed
food products
and condiments
49,548 3.8%
3 Supplier D
(3) Wholesaler and
processor of
food ingredients
Food ingredients 42,380 3.2%
4 Supplier F
(4) Processor of semi-
processed food
products
Semi-processed
food products
41,754 3.2%
5 Supplier G
(5) Processor of food
ingredients
Bakery products 39,473 3.0%
Total 241,452 18.4%
Notes:
(1) Supplier A is a private company established in March 2006 and mainly provides aquatic products in the
PRC. It has a registered capital of RMB54.8 million. In 2023, Supplier A purchased beverage from us,
which amounted to approximately RMB18,600, representing less than 0.1% of our total revenue in 2023.
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(2) Supplier C is a private company established in November 2018 and mainly provides semi-processed
food products and condiments in the PRC. It has a registered capital of RMB30.0 million. In 2023,
Supplier C purchased cooking oil and beverage from us, which amounted to RMB0.5 million,
representing less than 0.1% of our total revenue in 2023.
(3) Supplier D is a private company established in March 2011 and mainly provides food ingredients in the
PRC. It has a registered capital of RMB17.0 million.
(4) Supplier F is a private company established in March 2015 and mainly provides semi-processed food
products in the PRC. It has a registered capital of RMB10.0 million.
(5) Supplier G is a private company established in July 2014 and mainly provides bakery products in the
PRC. It has a registered capital of RMB5.0 million. In 2023, Supplier G purchased flour and beverage
from us, which amounted to RMB2.7 million representing less than 0.1% of our total revenue in 2023.
For the year ended December 31, 2022
Rank Supplier
Nature of
Supplier
Type of Product
Suppliers
Purchase
amount (RMB
in thousands)
Percentage of
total purchase
1 Supplier A (1) Wholesaler and
processor of
food ingredients
Food ingredients 47,416 5.0%
2 Supplier B
(2) Processor of food
ingredients and
semi-processed
food products
Food ingredients
and semi-
processed food
products
40,207 4.2%
3 Supplier C
(3) Processor of semi-
processed food
products and
condiments
Semi-processed
food products
and condiments
35,071 3.7%
4 Supplier D
(4) Wholesaler and
processor of
food ingredients
Food ingredients 26,977 2.9%
5 Supplier E
(5) Processor of food
ingredients
Food ingredients 26,658 2.8%
Total 176,329 18.6%
Notes:
(1) Supplier A is a private company established in March 2006 and mainly provides aquatic products in the
PRC. It has a registered capital of RMB54.8 million.
(2) Supplier B is a private company established in July 2012 and mainly provides food ingredients and
semi-processed food products in the PRC. It has a registered capital of RMB40.0 million.
(3) Supplier C is a private company established in November 2018 and mainly provides semi-processed
food products and condiments in the PRC. It has a registered capital of RMB30.0 million.
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(4) Supplier D is a private company established in March 2011 and mainly provides food ingredients in the
PRC. It has a registered capital of RMB17.0 million.
(5) Supplier E is a private company established in January 2016 and mainly provides food ingredients in
the PRC. It has a registered capital of RMB10.0 million.
Our purchases from Supplier A declined during the Track Record Period due to our efforts
to diversify our supplier base and reduce our reliance on our largest supplier.
All of our top five largest suppliers are independent third parties. None of our Directors,
their associates or any of our current Shareholders (who, to the knowledge of our Directors,
own more than 5% of our share capital) has any interest in any of our top five largest suppliers
that is required to be disclosed under the Listing Rules.
Price Management
We manage our prices by closely monitoring market price fluctuations. We also
implement certain measures to control our purchase costs, such as (i) integrating multiple
supply sources in local, domestic and global markets to achieve cost optimization, (ii) entering
into framework agreements with certain suppliers to secure sufficient supplies at agreed price
and (iii) stocking certain ingredients according to market conditions and sales records.
Moreover, we believe we are able to obtain favorable prices from suppliers as we generally
conduct centralized procurement in large volumes. As is customary in our industry, we
typically do not pass any short-term price increases of our supplies to guests.
The table below sets forth the sensitivity analysis of the impact to our results of
operations during the Track Record Period from the fluctuation of the raw materials and
consumables used. The range of fluctuations is based on historical fluctuations of key raw
materials of our operations.
Hypothetical changes in raw materials
and consumables
used in 2024 12% 9% 6% -6% -9% -12%
(in RMB thousands)
Raw materials and consumables 1,336,050 1,300,263 1,264,476 1,121,328 1,085,541 1,049,754
Changes in raw materials and
consumables used 143,148 107,361 71,574 (71,574) (107,361) (143,148)
Changes in profit for the year (117,382) (88,036) (58,691) 58,691 88,036 117,382
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Hypothetical changes in raw materials
and consumables
used in 2023 12% 9% 6% -6% -9% -12%
(in RMB thousands)
Raw materials and consumables 1,349,845 1,313,689 1,277,532 1,132,906 1,096,749 1,060,593
Changes in raw materials and
consumables used 144,626 108,470 72,313 (72,313) (108,470) (144,626)
Changes in profit for the year (118,594) (88,945) (59,297) 59,297 88,945 118,594
Hypothetical changes in raw materials
and consumables
used in 2022 12% 9% 6% -6% -9% -12%
(in RMB thousands)
Raw materials and consumables 965,794 939,924 914,055 810,517 784,708 758,838
Changes in raw materials and
consumables used 103,478 77,608 51,739 (51,739) (77,608) (103,478)
Changes in profit for the year (84,852) (63,639) (42,426) 42,426 63,639 84,852
Anti-bribery Measures
We have set forth strict guidelines against engaging in bribery and creating circumstances
which may create a conflict of interest between us and our employees. In addition, we have a
set of anti-bribery internal procedures. For example, all of our suppliers are required to sign
an anti-bribery agreement with us and we may terminate our cooperation with the supplier if
it violates any relevant laws or regulations or fail to report incident of bribery involving such
supplier. We have also implemented a whistle-blower program under which employees will
report instances of bribery or kickbacks directly to our safety center. The safety center had 18
employees based at our headquarters as of December 31, 2024. The safety center
comprehensively oversees food safety, fire safety and production safety matters, as well as
disciplinary matters, throughout our Group. The safety center implements internal anti-
corruption policies, investigates relevant allegations and takes disciplinary actions when
necessary. The centralized procurement system also enables us to limit the number of
employees with the authority to select suppliers and thus to increase effectiveness of our
internal control measures. We have designated a team of employees with the authority to select
suppliers. As of the Latest Practicable Date, six employees had such authority. No other
employee has the authority to select suppliers. During the Track Record Period, there was no
kickback arrangement with any of our suppliers.
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Sources of Supply and Ingredient Shelf Lives
We manage our suppliers and procurement strategy based on the categories of food and
supply, and the source of our major food ingredients and their shelf life are summarized as
follows:
 Semi-processed pork products. The third-party food processing companies we
collaborate with source pork from the PRC. The semi-processed pork products
typically have shelf lives of three months. Third-party logistics companies receive
such products from the food processing companies and store such products in their
warehouses before delivering to our restaurants. The delivery and storage are under
cold-chain conditions. Upon delivery, our restaurant staff request test reports for
antibiotics, hormone residues and other chemical substances and conduct quality
inspection procedures such as visual inspection on color, smell, packaging and
indication of spoilage.
 Semi-processed chicken products. The third-party food processing companies we
collaborate with source chicken from the PRC. The semi-processed chicken products
typically have shelf lives of three months. Third-party logistics companies receive
such products from the food processing companies and store such products in their
warehouses before delivering to our restaurants. The delivery and storage are under
cold-chain conditions. Upon delivery to our restaurants, our restaurant staff request
test reports for antibiotics, hormone residues and other chemical substances and
conduct quality inspection procedures such as visual inspection on color, smell,
packaging and indication of spoilage.
 Semi-processed aquatic products. The third-party food processing companies we
collaborate with source aquatic products, such as fish and bullfrogs, from the PRC.
Third-party logistics companies receive the semi-processed aquatic products from
the third-party processing companies and store such products in their warehouses
before delivering to our restaurants. The delivery and storage are under cold-chain
conditions. Our semi-processed aquatic products typically have shelf lives of three
months. Upon delivery, our restaurant staff request test reports for antibiotics and
other chemical substances and conduct quality inspection procedures such as visual
inspection on color, smell, packaging and indication of spoilage.
 V egetables and fruits. To ensure freshness, we source vegetables and fruits from
local suppliers with typical shelf lives of three days. We replenish our vegetables
and fruits inventory at our restaurants on a daily basis. Upon delivery, our restaurant
staff request test reports for pesticides and other chemical substances and conduct
physical inspection to examine the freshness of the supplies.
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Procurement Procedure
We have established centralized procurement procedures for all purchase orders. Our
restaurants do not directly transact with suppliers, and we instead make payments to suppliers
from bank accounts managed by our headquarters. Our centralized approach enables us to
effectively manage our supply chain.
We utilize an ordering system for our restaurant staff to order supplies and our restaurant
staff are only authorized to place order up to certain amount. After orders are placed, the
ordering system automatically matches orders with our authorized suppliers. After our
restaurants receive the supplies, we settle payments with the suppliers in accordance with the
relevant credit terms.
FOOD PROCESSING FACILITY
We plan to establish our own centralized food processing facility in Zhejiang Province,
which is expected to commence construction in the third quarter of 2025 and be completed in
the second quarter of 2026. It is designed to have a total gross floor area of approximately
24,500 square meters. We have entered into a framework agreement with the local government
of a town in Zhejiang Province. Pursuant to the framework agreement, the local government
has agreed to assist us in acquiring land use rights to establish a food processing facility in the
local area. We will continue to explore available parcels of land and select a suitable location
once funding is in place. We expect to utilize HK$196.3 million, representing approximately
26.3% of our net proceeds to establish such facility. The facility is designed to produce (i)
semi-processed meat products, such as semi-processed chicken for our Green Tea Roasted
Chicken (ၠ঩टᕒ); (ii) bakery products, such as bread for our Bread Temptation (ᙢ̍Ⴐ౅);
and (iii) cleaned and processed ingredients, such as cleaned and processed vegetables. We plan
to install state-of-the-art food processing equipment at the facility, such as machines that
automatically wash, cut and marinate various types of raw materials.
During the initial 12 months of operation, we expect the facility to supply (i)
approximately 7,800 tons of semi-processed food products and bakery products to a third of our
restaurants nationwide and (ii) approximately 55,000 tons of cleaned and processed ingredients
to all of our restaurants in Eastern China. We expect the facility to reach its maximum annual
production capacity of approximately 165,000 tons by 2028, and will be able to produce
approximately (i) 44,600 tons of semi-processed food products and bakery products and (ii)
120,400 tons of cleaned and processed ingredients. In the long run, we expect approximately
90% of the semi-processed food products and bakery products produced by the facility to be
supplied to our restaurants nationwide and the remaining 10% will be sold to consumers as
retail food products. On the other hand, all cleaned and processed ingredients produced by the
facility will be supplied to all of our restaurants in Eastern China.
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We will selectively prepare semi-processed food products, bakery products and
ingredients at the facility, while continuing to cooperate with third-party food processing
companies where such arrangements are advantageous to us. We expect the facility to offer us
several benefits. First, it will give us direct control over raw material sourcing and production
processes. As a result, we expect to more efficiently implement our standards on product
quality and food safety in our facility. As we will continue to update 20% of our menu items
each year, we also expect to leverage the facility to develop our new menu items and better
protect the confidentiality of our proprietary recipes. We believe the facility can provide us
with more flexibility in further standardizing our menu items and strengthen our development
capabilities as compared to solely relying on third-party food processing companies.
In addition, given the production capabilities, the facility will enable us to explore new
retail product offerings, such as semi-processed food products for our signature dishes that can
be easily cooked by consumers with their home appliances, in the long run. In the meantime,
we expect the facility will further improve the operating efficiency of our restaurant kitchens
by providing semi-processed food products, bakery products, as well as cleaned, processed and
ready to cook food ingredients at lower costs with improved economies of scale through
centralized procurement. After taking into account of additional depreciation on long-term
assets, logistics expenses and other costs, we believe the facility will create synergies with our
overall operations, bring additional profit to our Group as a whole and further improve our
results of operations.
A W ARDS AND RECOGNITIONS
As a testament to the popular appeal of our brand and the quality of our dining experience,
we have received various awards and recognitions. The table below sets forth our major awards
and recognitions received prior to and during the Track Record Period.
Y ear Awards and recognitions Issuing authority
2024 2024 Meituan Catering Industry Conference
Annual Influential Brand (2024ྠ᎛භପุɽึ
೐)
Meituan (ྠ)
2024 Red Eagle Award – Top 100 Catering Brands in
2024 (೐ɢϵ੶)
Hong Can Industry Research Institute
(Ӻ৫)
2023 Consumer’s Favorite Brand (೐) Meituan (ྠ)
2023 Meituan Waimai Best Category Innovation Award
of the Y ear of 2022 (ᗳ௴อ
ᆤ)
Meituan Waimai
(ྠ̮ር)
2021 2021 Dianping’s “Must-Eat List” Restaurants
(2021 ϋɽ଺ᓃ൙“̀Φ࿮”᎛ᝂ)
Dianping.com
(ɽ଺ᓃ൙)
2020 Nominated for Top 20 Organizations in China
(Άุ20੶ɝఖᆤ)
CEIBS Business Review
(ʕᆄਠุ൙ሞ)
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Y ear Awards and recognitions Issuing authority
2020 Top 50 Influential Chain Brands in China
(೐ᅂᚤɢ50੶)
China Chain Brand Development Conference
(ɽึ)
2020 Exemplar Restaurants for Quality Dining
(ֳ)
Chinese Cuisine Association
(ʕ਷଒ප՘ึ)
2019 100 Restaurants in China with Tastiest Food
(ʕ਷100᎛ᝂ)
Sohu News
(อၲ)
2019 Outstanding Delivery Businesses on Meituan
(࢕)
Meituan
(ྠ)
2018 2018 Top 100 China Cuisine Brands
(2018೐)
2018 China Cuisine Brand Influence Summit
(2018ึ)
2015 2015 Top 10 Creative Culture Restaurants
2015ܓ(ਕ)ɤԳ௴จ˖ʷ᎛ᝂ
Chinese Culinary Association
(ʕ਷଒ප՘ึ)
FOOD SAFETY AND QUALITY CONTROL
We place the highest priority on the health and safety of our guests, and we dedicate
substantial resources, including our supply chain team and safety center staff, to help ensure
that our guests enjoy safe food at our restaurants. We also implement stringent food safety and
quality control standards and measures throughout different aspects of our operations,
including (i) procurement, (ii) storage and logistics and (iii) restaurant operations.
We established a safety center in 2018. Our safety center had 18 employees based at our
headquarters as of December 31, 2024. Among such 18 employees, two have the license to be
safety production manager, five have the license to be food inspector, one is certified auditor
for food safety management, one has the license to be food safety professional, three have the
relevant license to operate fire safety equipment and one has the experience as a fire safety
officer and has the license to work as a fire safety engineer. The safety center comprehensively
oversees food safety, fire safety and production safety matters, as well as disciplinary matters,
throughout our Group. The safety center supervises our restaurant patrol team, which consisted
of 20 employees as of December 31, 2024. Our safety center directly reports to our co-founder
and chairman, Mr. Wang Qinsong (ؒIn addition, our restaurant patrol team conducts
unannounced inspections of each of our restaurants four times a month. We also designate an
employee in each region as food safety manager, who is responsible for ensuring that the
day-to-day operations at the restaurant in the region are in accordance with our food safety
requirements. Furthermore, to enhance our food safety measures, we have engaged an
independent third party with deep knowledge of food safety regulations and 30 years of
regulatory experience as our consultant since July 2019.
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Procurement
We have established stringent standards for the selection and management of suppliers.
All of our suppliers are required to comply with quality standards imposed by relevant
regulatory authorities with respect to their food ingredients and other supplies. We have
formulated detailed quality inspection standards for different categories of food ingredients
and other supplies, which include specific inspection criteria, such as color, smell, taste and
shape. When evaluating prospective suppliers, we visit their facilities and test samples in
accordance with our comprehensive set of technical and safety criteria. Moreover, we actively
conduct quality inspections and reviews of our existing suppliers, including site visits to the
facilities of our suppliers. For more information on supply chain quality control, see
“– Procurement – Supplier Selection and Evaluation.”
Storage and Logistics
We request suppliers to deliver supplies with longer shelf lives, such as semi-processed
food products, bakery products, sauces and condiments, directly to warehouses operated by
third-party logistics companies that we collaborate with, which will then deliver such products
to our restaurants based on instructions given by our restaurant managers. Other supplies that
have shorter shelf lives, such as vegetables and fruits, are delivered to our restaurants directly
by our suppliers. Upon delivery of semi-processed food products, bakery products and food
ingredients to our restaurants, our staff will store such supplies under appropriate temperature
and storage conditions in accordance with our food safety requirements.
Restaurant Operations
We adopt stringent food safety and quality control standards for all our restaurants with
respect to (i) inspection of food ingredients and other supplies delivered from the suppliers and
(ii) food preparation at our restaurants. In terms of inspection of food ingredients and other
supplies, our restaurant staff report to our safety center on any deviation or irregularity in the
quality of food ingredients and other supplies and reject any supplies which do not meet our
standards after visual inspection upon delivery to the restaurants.
Our food safety and quality control measures for restaurant operations include the
following:
 Continuous training programs . We continuously provide periodical training
programs to our restaurant staff on food safety and quality standards. Furthermore,
our restaurants broadcast certain food safety messages to our restaurant staff both
before and after business hours every day, which serves to reinforce the importance
of food safety in their minds.
 Video monitoring system . Through a comprehensive monitoring system, the staff of
the central monitoring room at our headquarters can visually monitor all of our
restaurants through closed-circuit television.
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 Inspections by restaurant patrol team . Our restaurant patrol team conducts
unannounced inspections of our restaurants to identify and rectify potential quality
and food safety issues four times a month. The team evaluates, among other things,
the storage condition of food ingredients and the quality and hygiene of food to be
served to guests.
CUSTOMER BASE AND MARKETING
Guests
Our restaurants offer Chinese fusion cuisine, as well as value-for-money proposition, to
our guests. As a testament to our popular appeal, the total number of guests we served in 2022,
2023 and 2024 was 37.8 million, 57.9 million and 68.1 million, respectively. The total number
of guests we served significantly increased in 2023, primarily due to the strong recovery of our
customer traffic due to a significant surge in consumer spending in the first half of 2023
following the easing of government-imposed restrictions related to COVID-19 in December
2022. To foster customer loyalty and promote our brand, we have a membership system, and
guests create membership accounts free of charge by registering their name and cell phone
numbers on our system. We also post marketing information relating to new menu items, new
restaurant openings and new retail items on our membership system as part of our promotional
efforts. In addition, we introduced an upgraded version of our WeChat mini-program in April
2023. This new version enhanced the user interface of our membership system and introduced
new interactive functions, which in turn elevated our customer experience. We keep records of
our members’ ordering history and preferences, and we plan to leverage such behavioral data
to enhance customer experience in the future. We use social media platforms to attract new
members. As of the Latest Practicable Date, our membership system had attracted more than
16.2 million members.
Except for occasional promotional events, we typically do not grant any rebate or
discount to our members. During the occasional promotional events, discounts granted to
members typically ranged from 5% to 15%. In addition, we also grant discounts ranging from
20% to 40% during the first three days of the opening of a new restaurant. We launched our
membership reward system in January 2021 to enhance our customer loyalty and reward for
their long-term support which allows our members to earn reward points on their purchases.
Our members can utilize the reward points to enjoy discounts when purchasing menu items at
our restaurants. In 2024, the amount of discounts we offered through reward points was less
than 0.1% of our revenue.
Revenue derived from our five largest customers accounted for less than 1.0% of our total
revenue for each of the years ended December 31, 2022, 2023 and 2024. All of our five largest
customers in 2022, 2023 and 2024 are independent third parties. None of our Directors, their
associates or any of our Shareholders (who, to the knowledge of our Directors, own more than
5% of our share capital) has any interest in any of our five largest customers that is required
to be disclosed under the Listing Rules.
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Marketing
Our brand and reputation have primarily been built through word-of-mouth
recommendations by enthusiastic guests who have enjoyed the Green Tea dining experience,
and less so through active marketing and promotional efforts. We promote our restaurants
through both online and offline channels. We maintain official accounts on several leading
social media platforms, where we post marketing information relating to new menu items, new
restaurant openings and new retail items. We also create and update factual content relating to
our restaurants on a leading restaurant review platform. In addition, we place advertisements
at selected offline locations with high pedestrian traffic, such as shopping malls and public
transportation systems. To raise awareness of our new restaurants, we engage a third party to
offer performance and small games on the opening days of certain new restaurants.
Furthermore, we have also collaborated with certain major key players in the
consumer-oriented service industry to offer promotional discount information to their
customers to further expand the base of our customers. For example, we entered into a
promotion service agreement with a navigation application to promote our new dishes for a
one-week promotional event. During the promotion period, we were able to place
advertisement for our promotional events and discount information on the relevant
applications, for which we made a one-off payment for such promotion service.
We benefit from social media posts relating to the Green Tea dining experience by our
fans, particularly KOLs. We will continue to engage KOLs to promote our restaurants on
popular social media platforms. For example, we may produce short videos of KOLs’ dining
experience at our restaurants and post such videos on social media.
TECHNOLOGIES
We strive to stay at the forefront of Mainland China’s catering market in applying the
latest technologies, with a focus on enhancing guest experience and improving our operational
efficiency. We are continuously exploring new technological measures that will enable us to
create more value for our guests.
We have implemented the following measures to digitalize our restaurants.
 Mobile-enabled restaurant experience . We were among the first major restaurant
chains in Mainland China to enable ordering through mobile phones, according to
the CIC Report. Mobile ordering system allows us to shorten the ordering time for
each table. Such system enables us to not only efficiently track guest orders but also
use such data to understand customer preferences and improve our menu offerings.
Furthermore, we allow our guests to use mobile payment and therefore streamline
our checkout process. Such mobile payment also includes payments settled by cash
vouchers our guest purchased from third-party platforms and through our WeChat
mini-program. In 2024, approximately 98.9% of the total amount paid by our dine-in
guests was settled through mobile payment.
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 Digital supply system. We have implemented an efficient digital supply system that
is controlled by our procurement center and collects orders for supplies from our
restaurants and automatically assigns orders to specific suppliers. The system
enables our restaurant staff to order supplies based on the situations of their
respective restaurants and receive supplies on a timely basis. The system also
enables our procurement center to continuously monitor consumption patterns
across our restaurant network, as well as costs, procurement amount and inventory
level at each restaurant to reduce waste.
 Restaurant management . We have established a comprehensive monitoring system
that enables the staff of the central monitoring room at our headquarters to visually
monitor all of our restaurants through closed-circuit television. This system allows
us to ensure efficient and quality services are provided at our restaurants and make
timely adjustments to the restaurant operations as necessary. In addition, we have
implemented a menu and order management platform for enhancing the precision of
and standardizing the information on our dishes and menus. Furthermore, for better
management of our restaurant properties, we integrated a lease management
platform in our operation.
 Operation management . We have implemented a business intelligence system,
which collects the operational information and data of restaurants in real time, and
perform business and financial analysis. Such analysis provides our management
with comprehensive insights into the operations of our entire restaurant network and
assist our management with decision making in optimizing our restaurant
operations. For example, our business intelligence system automatically push the
restaurants operating report for the previous day to each regional manager and the
relevant management personnel at our headquarters. Such report typically includes
information such as revenue, sales of our signature dishes and customer complaints.
With this information, our regional managers can quickly identify restaurants with
unsatisfactory performance, understand the situation and make necessary
adjustments in terms of marketing and promotional strategies, dish preparation
training and service quality, which will improve our operational management
efficiency.
 Kitchen management . Our kitchen management system digitally monitors the status
of orders, which enables us to prevent errors such as missed orders and duplicative
orders.
 Delivery management . We have implemented a comprehensive system that connects
our delivery management and kitchen management to create a seamless and more
efficient delivery operation.
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 Equipment management . We introduced an equipment repair and maintenance
tracking system in our restaurants, which automatically sorts and dispatches
repairing orders entered into the system by restaurant staff to corresponding
maintenance team or maintenance suppliers, streamlining and ensuring the repair
and maintenance work orders being handled timely, as well as optimizing equipment
management.
In addition, we implemented the following measures to digitalize our operations
management.
 In 2016, we adopted a supply chain management system.
 In 2017, we adopted a human resources system.
 In 2019, we enhanced the level of automation for administrative tasks by adopting
an office automation system.
 In 2020, we established a cost management system and upgraded the supply chain
management system.
 In 2021, we implemented a restaurant patrolling platform, which allows the staff at
our headquarters and our restaurant managers to conveniently manage restaurant
operations through a mini-program on their mobile phones. We also introduced a
feature that allows users of the restaurant patrolling platform to follow through the
problems they previously identified. As advised by our PRC Legal Adviser, we are
not required to obtain any specific license or permits, or subject to any laws and
regulations, to operate the WeChat mini-program.
 In 2022, we integrated our human resources system and upgraded the office
automation system to enhance the efficiency of our administrative functions and
approval procedures. In addition, we implemented an equipment repair and
maintenance tracking system in our restaurants which reduces the cost of
maintenance by streamlining and ensuring the repair and maintenance work orders
being handled in a timely manner, as well as optimizing equipment management. In
order to simplify the procurement operation process and improve sorting efficiency,
we further upgraded our supply chain system.
 In 2023, we established a data-driven management platform connecting the
operation system, financial system and supply chain system to improve data
decision-making efficiency. We also introduced a menu and order management
platform for enhancing the precision of and standardizing the information on our
dishes and menus. In addition, for better management of our restaurant properties,
we integrated a lease management platform in our operation.
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 In 2024, upgraded and enhanced the functions in the data-driven management
platform, the menu and order management platform and the lease management
platform. These measures enabled us to further enhance our data-based decision
making efficiency and increase operational efficiency.
 In 2025, we plan to upgrade and enhance our human resources system to improve
human resources management efficiency and employee satisfaction. We also plan to
continue optimizing the data-driven management platform to further improve our
operational efficiency.
USER PRIV ACY AND DATA SAFETY
In the ordinary course of our business, we mainly collect, store and use certain personal
information of our members from time to time. Personal information of our members are
collected when our members fill out the relevant registration requests on our membership
system on WeChat. Such information primarily include their names, mobile phone numbers and
order information. In addition to the personal information of our members, we also collect
personal information of our customers when they use our WeChat mini-program or order
delivery though third-party platforms. Such information primarily includes the address, phone
number, name, location, and order information of our customers. Personal information is
collected with the consent of our members and customers and stored on the server provided by
our cloud service provider. We have designated a dedicated person responsible for our network
security and personal information protection, and established a series of internal systems and
policies to ensure the safety of personal information. Based on the job responsibilities of the
relevant employees, we determine their access permissions to data and monitor their data
operations. We also require employees to sign confidentiality agreements to ensure the safety
of personal information of our members and customers.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any data leakage of personal information of our customers and members. In
addition, we had not been subject to any warnings, penalties, sanctions or any claims or
litigations for violating applicable laws and regulations regarding data security or data privacy
protection. Based on the foregoing, as advised by our PRC Legal Adviser, we believe we have
complied with applicable laws and regulations on data security, personal information
protection in all material aspects. For more details, see “Regulatory Overview – Cyber Security
Law.” Due to the evolving nature of the legislation and law enforcement on user privacy and
data security in the PRC, we will closely monitor regulatory developments and take appropriate
measures accordingly in a timely manner.
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ENVIRONMENTAL SUSTAINABILITY AND SOCIAL RESPONSIBILITY
We are committed to building a lasting brand, and we believe our long-term success rests
on our ability to make positive impacts on the environment and society. Corporate social
responsibility is a core part of our business philosophy and will be pivotal to our ability to
create sustainable value for our Shareholders. Accordingly, we have adopted a comprehensive
policy on environmental, social and corporate governance responsibilities (the “ ESG Policy ”)
in accordance with the Listing Rules, which sets forth our corporate social responsibility
objectives and provides guidance on practicing corporate social responsibility in our daily
operations, including (i) the appropriate risk governance on environmental, social and
governance (“ ESG”) matters, including climate-related risks and opportunities; (ii)
identification of key stakeholders and the communication channels to engage with them; (iii)
ESG governance structure; (iv) ESG strategy formation procedures; (v) ESG risk management
and monitoring; and (vi) the identification of key performance indicators, the relevant
measurements and mitigating measures.
Governance
According to our ESG Policy, we have established an ESG Committee under our Board,
which is led by Mr. Wang Qinsong, our chairman and chief executive officer and Ms. Y u
Liying, our executive director and vice president. Our Board is ultimately responsible for all
ESG issues of our Company. Our ESG Committee is responsible for overseeing and guiding our
Company’s ESG initiatives and will report to our Board on such matters periodically. Set forth
below are the principal duties and responsibilities of our ESG Committee:
 keeping abreast of the latest ESG-related laws and regulations, including the
applicable sections of the Listing Rules, keeping the Board informed of any changes
in such laws and regulations and updating our ESG Policy in accordance with the
latest regulatory updates;
 identifying our Group’s key stakeholders based on our business operations and
understanding such stakeholders’ influences and dependence with respect to ESG
matters;
 assessing ESG-related risks on a regular basis according to the applicable laws,
regulations and policies, especially risks in relation to climate change, to ensure we
fulfill our responsibilities with respect to ESG matters;
 monitoring the effectiveness and ensuring the implementation of our ESG Policy;
and
 reporting to our management on an annual basis on the implementation of our ESG
Policy and preparing the ESG report.
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During the Track Record Period and up to the Latest Practicable Date, we had not been
materially adversely impacted by any ESG-related incidents.
Impact of ESG risks
We have identified the following ESG risks which we consider material and may have an
impact on our business, strategy or financial performance:
(i) Food safety and quality . Our food safety and quality control standards and measures,
inspections and checks, and training on proper food safety practices, among others,
may not be adequate, which may increase the chance of contamination and
food-borne illnesses. As a result, we may be subject to risks of receiving
administrative or criminal penalties and our reputation may be adversely impacted.
(ii) Supply chain management . Responsible sourcing and sound supply chain
management are essential for us to ensure reliable food quality and sustainability
along our supply chain. If we are unable to select quality third-party suppliers or
monitor, audit and manage different parties in the supply chain, we may be exposed
to risks of suppliers’ non-compliance with applicable laws and regulations and
unethical practices, which could diminish our competitiveness and harm our
reputation.
(iii) Climate change adaption . Floods, typhoons, storms, and other extreme weather
conditions and natural disasters may cause price volatility of raw materials,
fluctuation in supply and physical damage to our restaurants and offices, pose safety
risks to our staff and lead to unsatisfactory service to our customers, among other
consequences. In addition, against the backdrop of carbon peak and neutrality goals
of the Chinese government, we may incur additional costs to design and apply
innovative technologies and systems to improve energy efficiency, replace
undegradable packaging, promote sustainable sourcing and engage in low-carbon
footprint product development.
(iv) Environmental compliance . We are subject to relevant environmental laws and
regulations. For details, please refer to “Regulatory Overview – Laws and
Regulations on Environmental Protection.” Regulators may impose more stringent
environmental requirements and standards on us.
Identification, assessment, management and mitigation of ESG risks
Our ESG committee is responsible for identifying and evaluating ESG risks, and
formulating and assessing strategic plans and mitigating measures. Our regional managers are
responsible for the implementation of risk control and adaptation, and they report to our ESG
committee on a monthly basis. We have adopted the following measures to identify, assess,
manage and mitigate ESG risks.
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Food safety and quality
We comply with relevant laws and regulations regarding food safety in all material
respects in the PRC and are prudent in every aspect from procurement, storage and logistics,
to restaurant operations. For details of the food safety laws and regulations that apply to us,
please see “Regulatory Overview – Laws and Regulations on Food Safety and Licensing
Requirements for Catering Services.” Set forth below are the various measures that we
undertake to manage and mitigate risks relating to food safety and quality:
(i) established a safety center that supervises our restaurant patrol team which conducts
unannounced inspections of each of our restaurants four times a month to identify
and rectify potential quality and food safety issues;
(ii) engaging an independent third party with deep knowledge of food safety regulations
and 30 years of food safety regulatory compliance experience as our consultant;
(iii) establishing stringent standards for the selection and management of suppliers;
(iv) conducting quality inspections and reviews of our suppliers, including site visits to
the facilities of our suppliers and formulating corresponding measures;
(v) requiring each of our restaurants to conduct pesticide residue checks, on a daily
basis, on any two kinds of fresh fruits and vegetables delivered to the restaurants by
random sampling using the pesticide detection test cards;
(vi) sending food products and food ingredients samples selected by our procurement
center and safety center on a random basis to third-party food safety testing
organizations each month;
(vii) adopting stringent food safety and quality control standards for all our restaurants
with respect to (i) inspection of food ingredients and other supplies delivered from
the suppliers and (ii) food preparation at our restaurants;
(viii) continuously providing periodical training programs to our restaurant staff on food
safety and quality standard;
(ix) monitoring all of our restaurants through closed-circuit television; and
(x) using tamper proof covers and food safety seals in food delivery to prevent the risk
of contamination and ensure food quality.
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Supply chain management
We have established a supplier selection process, through which suppliers must provide
relevant qualifications or certifications, such as their business licenses or food production and
operation licenses, and demonstrate legal compliance with environmental and social policies.
We have implemented stringent standards for the management of suppliers. We actively
conduct quality inspections and reviews on our existing suppliers, including site visits to the
facilities of our suppliers both before engagement and periodically afterwards. During such site
visits, we assess whether the equipment, warehouse and production environment meet our
comprehensive set of quality control, hygiene and food safety criteria. When visiting their
facilities, we also test samples in accordance with our standards for the inspection of different
categories of food ingredients and other supplies to ensure their safety and quality. In addition
to the site visit and quality inspection carried out by us, we also require our suppliers to provide
us with reports of food tests and regularly engage third parties to conduct quality inspections.
If the suppliers are not compliant with the applicable laws and regulations regarding food
safety and quality or commit misconducts or do not meet our standards and pass our
inspections, we may terminate our contracts with them.
Climate change adaptation
We believe in the importance of caring for our planet and we strive to balance our role
as a for-profit company with the betterment of people on the planet. Under our ESG Policy, we
have established a comprehensive set of key performance indicators to evaluate and guide our
business operations. We conduct monthly reviews on our restaurants based on such
performance indicators. We also request our restaurant staff to attend mandatory trainings on
energy saving on a regular basis.
Power Usage
Metrics and targets . We evaluate our power usage level using the metric of average
annual power usage per restaurant. In 2022, 2023 and 2024, our average power usage per
restaurant for the relevant period was 295,595 kWh, 348,152 kWh and 333,784 kWh,
respectively. We intend to reduce the level of our average annual power usage per restaurant
by approximately 3% over the next five years.
Measures we take to achieve the target . We will continue to optimize our restaurant
design and apply innovative technologies and systems to improve energy efficiency. We
purchase and use environmental-friendly equipment and facilities and will also leverage our
video monitoring system to avoid unintended power usage during off-hours. In addition, we
also raise energy consumption awareness of our employees during our trainings.
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Water Usage
Metrics and targets . We evaluate our water usage level using the metric of average annual
water usage per restaurant. In 2022, 2023 and 2024, our average water usage per restaurant for
the relevant period was 6,815 tons, 7,338 tons and 6,268 tons, respectively. We intend to reduce
the level of our average annual water usage per restaurant by approximately 3% over the next
five years.
Measures we take to achieve the target . We continue to monitor and control water usage
for dish-washing. We regularly inspect our water tanks to prevent water leakage. We strive to
foster water conservation culture in our Group through a variety of activities and events.
In addition, we have continued to promote the application of innovative technologies and
systems to improve energy efficiency, including the installation of high-efficiency oven, heat
pump water heater and direct current air conditioning and ventilation system at certain of our
restaurants. We also conducted a thorough research on energy consumption at our restaurants
and devised a plan to adjust usage of each appliance to reduce energy consumption.
Environmental Compliance and Waste Management
We discharge wastewater mainly from restaurants and offices and emit a limited amount
of cooking fumes from kitchens in our restaurants during our daily operations. We also produce
packaging waste and food waste due to our packaging usage and unused or unfinished food in
our restaurants.
We respond to initiatives worldwide to tackle food waste in our daily operation by
continuously spreading food waste prevention message to minimize waste. We have also been
proactive in addressing environmental issues. The following sets forth the various measures we
take to ensure compliance with environmental laws and regulations and minimize the impact
of our operations on the environment and natural resources:
(i) discharging sewage into urban sewage systems with the aim to cause little pollution
to the environment;
(ii) installing fume extractors, smoke vents and smoke purifiers as stipulated by
regulations and conducting regular cleaning and renewal in accordance with the
requirements of local authorities in the PRC;
(iii) entering into disposal agreements with local authorities in the PRC to handle our
non-hazardous waste; and
(iv) scheduling employee mandatory trainings and tests on waste reduction.
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Corporate Social Responsibilities
During the Track Record Period, we have taken the following social responsibility
initiatives.
 Offering nutritious meals . Our broad menu selections allow guests to enjoy balanced
meals consisting of proteins, vegetables, grains and other nutritious ingredients. In
addition, we frequently introduce menu offerings that reflect the concept of a
healthy diet based on the philosophies of Chinese traditional medicine.
 Controlling usage of food additives and other chemicals . Our suppliers are required
to provide information on the use of food additives and other chemicals in their
products in accordance with Chinese national standards. We also adopted strict rules
for procurement, storage, inventory management and usage of food additives and
other chemicals at our restaurants.
 Charitable efforts . We have been proactively involved in various charitable causes.
For example, in August 2023, we donated food and supplies to Zhuozhou when the
city was affected by a flood.
We will also focus on embracing diversity within our organization, as well as equal and
respectful treatment of all of our employees in their hiring, training, wellness and professional
and personal development. We recognize and embrace the benefits of having a diverse Board
of Directors to enhance the quality of its performance. To this end, we have adopted a board
diversity policy which requires all board appointments to be based on meritocracy, and
candidates to be considered against objective criteria. While maximizing equal career
opportunity for everyone, we will also continue to promote work-life balance and create a
happy culture in our workplace and restaurants for all of our employees.
Our Board of Directors has the collective and overall responsibility for establishing,
adopting and reviewing the ESG vision, policy and target of our Group, and evaluating,
determining and addressing our ESG-related risks at least once a year. Our Board of Directors
may assess or engage independent third party(ies) to evaluate the ESG risks and review our
existing strategy, target and internal controls. Necessary improvement will then be
implemented to mitigate the risks.
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LOGISTICS
Our procurement team based at our headquarters is primarily responsible for coordinating
the purchase, storage and delivery of supplies throughout our restaurant network. Such
centralized logistics system enables us to devise an optimal delivery plan to ensure sufficient
level of inventories at our restaurants. Key benefits of our centralized logistics system also
include centralized quality monitoring and control, economies of scale and optimized inventory
management and logistics expenses.
We engage reputable and large-scale third-party logistics companies to provide logistics
and warehousing services to us. We currently collaborate with 26 third-party logistics
companies. We request suppliers to deliver certain supplies with longer shelf lives, such as
semi-processed food products, bakery products, sauces and condiments, directly to warehouses
operated by such logistics companies, which will then deliver such supplies to our restaurants
based on instructions given by our restaurant managers. Other supplies that have shorter shelf
lives, such as vegetables and fruits, are delivered to our restaurants directly by our suppliers.
We bear the cost for logistics and warehousing services, and risks associated with the shipment
are assumed by suppliers or third-party logistics companies, as the case may be.
COMPETITION
The casual Chinese cuisine restaurant market in Mainland China is intensely competitive
with respect to food quality and consistency, price-value relationship, ambience, service,
location, supply of high-quality ingredients and availability of trained employees. Key success
factors in the industry include affordable and high-quality dining services, continuous
innovation of menu items, strong brand awareness and utilization of technologies. We ranked
third in terms of number of restaurants and fourth in terms of revenue among casual Chinese
restaurant operators in Mainland China in 2024, according to the CIC Report. Our major
competitors include other casual Chinese cuisine restaurant brands with chain restaurants
mainly located in shopping malls.
We believe that our competitive advantage over our competitors lies in fusion menu
offerings and value-for-money experience, dining environment, highly standardized and
scalable business model, comprehensive and stringent food and operational safety control,
digitalized restaurant and operations management, and strong operational management
capabilities.
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EMPLOYEES
As of December 31, 2022, 2023 and 2024 and the Latest Practicable Date, we had a total
of 10,459, 11,410, 13,328 and 12,777 full-time employees, respectively. The table below sets
forth our full-time employees by functions as of the Latest Practicable Date:
Function
Number of
Employees
(Full-time)
Restaurant staff 12,320
Management and administrative staff 284
Supply chain management 93
Marketing and promotion 23
Menu development 21
Safety center 19
Expansion management 16
Engineering 1
Total 12,777
We may use third-party human resources companies from time to time to provide staff
members to us in order to ensure sufficient staffing and efficient transfer of staff among
different restaurants. We typically enter into agreements with such human resources companies
for a period of one year. We usually require third-party human resources companies to pay the
social insurance and housing provident funds for part-time restaurant staff. We have engaged
and may continue to engage part-time employees to better support our restaurant operations.
As of the Latest Practicable Date, we engaged 4,748 part-time employees, of which 4,575
part-time employees work as our restaurant staff, and the remaining 173 part-time employees
were either electric technicians that perform electricity maintenance or installation work at our
restaurants or staff that works at our supply chain warehouses. During the Track Record Period
and up to the Latest Practicable Date, we did not discover any third-party human resources
companies that did not fulfill their obligations or had made material underpayments; neither
had there been any disqualification of, or termination of collaboration with, third-party human
resources companies due to incidents of non-compliance with relevant laws and regulations or
breaches of agreements by them.
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We reward hard work with competitive compensation. Compensation for our employees
includes base salary, bonuses and other staff benefits, such as employee meals and staff
dormitories. In 2022, 2023 and 2024, our staff costs amounted to RMB626.4 million,
RMB911.0 million and RMB989.0 million, representing 26.4%, 25.4% and 25.8% of our
revenue, respectively.
We motivate our employees through our training and promotion program, which allows
them to envision their career paths and growth potential with us. Our employees have a chance
to be promoted to management positions at our restaurants after they successfully complete our
leadership training program, which we refer to as Green Tea University . The Green Tea
University curriculum trains our employees to embrace our core values, acquire the necessary
skills for their respective positions and develop leadership and management competencies for
career advancement. In addition, we currently cooperate with 12 vocational schools; eight of
these schools participate in “ Green Tea internship programs,” which allows students at these
schools to work as interns at our restaurants and potentially become our employees after
completing the programs. In 2024, our training and promotion program had enabled us to
promote over 300 of our restaurant staff to management positions at our restaurants, providing
solid support for our organic expansion. Our training and promotion program also enables us
to have high retention rate with our employees. As of the Latest Practicable Date,
approximately a third of our restaurant managers had been working with our Company for over
five years.
We are committed to hiring qualified candidates, including experienced restaurant
managers, supporting staff and industry experts, to support our business and operations. Our
human resources department is responsible for recruitment, primarily through recruitment
websites, on-campus events and colleague referral. We are committed to providing fair and
equal opportunities in all of our employment practices and have adopted policies and
procedures to ensure a fair hiring, selection and promotion process.
As required by regulations of the PRC, we participate in various employee social security
plans that are organized by municipal and provincial governments, including pension
insurance, unemployment insurance, maternity insurance, work-related injury insurance,
medical insurance and housing funds. Except as otherwise disclosed in “– Compliance,
Licenses and Permits,” our PRC Legal Adviser is of the view that, during the Track Record
Period and up to the Latest Practicable Date, we had complied with the applicable PRC labor
laws and regulations in all material respects.
Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, there were no material labor disputes or strikes that would have a material
and adverse effect on our business, financial condition or results of operations except as
otherwise disclosed in “– Compliance, Licenses and Permits”.
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INTELLECTUAL PROPERTY
We currently operate substantially all of our restaurant network under the Green Tea
brand. As of the Latest Practicable Date, we maintained 126 trademark registrations in
Mainland China. As our brand name becomes more recognized among the customers, we are
focused on enforcing our rights in our trademark portfolio, the protection of which is important
to our reputation and branding. In the past, we found that certain third parties used or imitated
our trademarks or trade name without our authorization to operate restaurants in cities where
we did not have a presence. We have successfully brought proceedings to stop these infringing
actions, and we do not believe these infringing actions had any material and adverse effects on
our reputation, prospects, business, results of operations and financial condition. Ms. Y u
Liying, our executive Director and vice president, is responsible for supervising our efforts in
enforcing our intellectual property rights. Certain members of our headquarters staff, as well
as our regional managers, are responsible for monitoring trademark and trade name
infringements on an ongoing basis. Such staff members and regional managers report any
instance of infringement to Ms. Y u Liying. If we notice any unauthorized use of our trademarks
or trade names, we will initiate a lawsuit to protect our intellectual property rights. However,
there can be no assurance that significant incidents of similar nature will not occur in the
future. See “Risk Factors – Risks Relating to our Business – We may not be able to adequately
protect our intellectual property, which could harm the value of our brand and adversely affect
our business and operation.”
We rely on trade secret protection and confidentiality agreements to safeguard our
interests in proprietary know-how that is not patentable and process for which patents are
difficult to enforce are also of significant importance to our operations. Certain elements in our
operations are not covered by patents or copyrights. We have taken security measures to protect
these elements.
All of our research and development personnel have entered into confidentiality and
proprietary information agreements with us. These agreements typically address intellectual
property protection issues and require our employees to assign to us all of the inventions,
designs, recipe and consolidated know-how they develop during their employment with us. We
also require our business partners to enter into confidentiality agreements before we disclose
any sensitive aspects of our operations, technology or business plans.
During the Track Record Period and up to the Latest Practicable Date, no material claims
or disputes were brought by or against us in relation to any infringement of intellectual
property.
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PROPERTIES
We do not own any property but instead lease certain properties in Mainland China in
connection with our business operations. These properties are used for non-property activities
as defined under Rule 5.01(2) of the Listing Rules. They mainly include premises for our
restaurants, offices, warehouses, storage units and employee dormitories.
According to section 6(2) of the Companies Ordinance (Exemption of Companies and
Prospectuses from Compliance with Provisions) Notice, this prospectus is exempted from
compliance with the requirements of section 342(1)(b) of the Companies Ordinance in relation
to paragraph 34(2) of the Third Schedule to the Companies Ordinance which require a
valuation report with respect to all our Group’s interests in land or buildings, for the reason
that, as of December 31, 2024, none of the properties held or leased by us has a carrying
amount of 15% or more of our consolidated total assets.
Leased Properties
As of the Latest Practicable Date, we leased 812 properties with an aggregate GFA of
approximately 248,427.9 square meters. Among such 812 properties, 507 were operated as
restaurants or were in the process of being opened as new restaurants, and 305 were used as
warehouses, storage units, offices or employee dormitories. The following table sets forth the
terms of our leases as of the Latest Practicable Date:
Restaurants
Warehouses
and storage
units Offices
Employee
dormitories Total
One year or less 4 20 – 231 255
Two years 6 1 – 20 27
Three to five years 22 1 2 6 31
Six to 10 years 364 14 3 – 381
11 to 15 years 101 5 – – 106
16 to 20 years 8 2 – – 10
21 to 31 years 2 – – – 2
507* 43 5 257 812
Note:
* Including 14 leases entered into for restaurants that have not opened and were in the process of being
opened as new restaurants in 2025.
As of the Latest Practicable Date, we had a total of 10 restaurants that had a lease term
of two years or less. We entered into such short term leases primarily because we are in the
process of negotiating with the shopping malls to change the shop space of the relevant
restaurants. While waiting for the vacancy of our ideal shop space, we decided to enter into
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short term leases for the restaurant at the same shopping mall to continue the operation of the
relevant restaurants. We usually start the negotiation process of lease renewal six months prior
to the expiration of the relevant lease. We do not foresee any material impediments for the
renewal of leases for the restaurants with a lease term of one year or less as of the Latest
Practicable Date.
As of the Latest Practicable Date, a total of 10 of our restaurants have a lease term of over
15 years. We entered into such long term leases based on the following commercial rationale:
(i) We have extensive experience in operating restaurants. As such, the risk of us having
to break the lease due to unsatisfactory performance of a certain restaurant is low.
(ii) We expected that the average commercial rent of stores in shopping malls in
Mainland China to continue to moderately increase in the future. As such, it would
be beneficial to us to enter into leases with fixed rent with a longer lease term to
control our rental expenses.
We entered into the long term lease for each of the 10 restaurants primarily due the
following reasons:
 For the four restaurants with lease terms of 15 to 16 years, we believe such lease
terms are generally in line with our usual length of leases. Entering into such leases
is in line with our strategy to control our rental costs by entering into leases with
longer terms.
 For the four restaurants with lease terms of 20 years, we entered into the relevant
leases primarily because (i) these restaurants are located in either the city center or
famous tourist sites and we wanted to secure such favorable location for a longer
term; and (ii) the relevant landlord of one of these restaurants is a well-known
developer of shopping malls with nationwide operations and we expect to establish
a long-term relationship with such landlord to secure suitable locations for our
restaurants in the future.
 The two restaurants with lease terms of 31 to 32 years are historically operated by
us according to the cooperation agreements with our connected persons. These
restaurants are located in a tourist attraction with a large number of tourists all year
round. The relevant landlord, which is the local government, is only willing to enter
into long-term leases to maintain stable business operations at such tourist
destination. We believe it is essential in building our brand image and reputation
among tourists who may be our potential customers and we also believe that we will
be able to negotiate with the landlord regarding potential termination if necessary.
As such, we decided to enter into long-term leases for these restaurants.
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According to the relevant lease agreements, breaking such leases generally require mutual
agreement by us and the relevant landlord. Such arrangements may allow us to negotiate with
the relevant landlords for better terms for such leases. According to CIC, our arrangements
with respect to longer lease terms and termination clauses are in line with the industry norm.
Title Defects
Of the 807 leased properties in the PRC leased by us, the actual usage of 12 leased
properties (with an aggregate GFA of approximately 2,045.2 square meters, representing
approximately 0.8% of our total leased GFA) was inconsistent with the usage set out in such
title certificates. Among such 12 properties, four was used as a restaurant (with a GFA of
approximately 1,529.4 square meters, representing approximately 0.6% of our total leased
GFA).
Among the 807 leased properties in the PRC leased by us, lessors of 37 leased properties
(with an aggregate GFA of approximately 10,653.0 square meters, representing approximately
4.3% of our total leased GFA) did not provide sufficient or valid title certificates. Among such
37 leased properties, 20 were used as restaurants (with an aggregate GFA of approximately
9,125.9 square meters, representing approximately 3.7% of our total leased GFA). The lease
agreements of such 37 properties will expire in the period from June 2025 to July 2032.
In addition, among the 807 leased properties in the PRC leased by us, lessors of 11 leased
properties (with an aggregate GFA of approximately 2,714.9 square meters, representing
approximately 1.1% of our total leased GFA) did not provide any form of permission to sublet
from owners. Among such 11 leased properties, six were used as restaurants (with an aggregate
GFA of approximately 2,242.3 square meters, representing approximately 0.9% of our total
leased GFA). The lease agreements of such 11 leased properties will expire from May 2025 to
May 2033.
In 2022, 2023 and 2024, revenue contribution from restaurants situated on leased
properties with title defects amounted to RMB187.4 million, RMB239.2 million and
RMB219.6 million, respectively, representing 7.9%, 6.7% and 5.7% of our total revenue for the
respective period.
As advised by our PRC Legal Adviser, our use of these defective leased properties may
be affected by third parties’ claims or challenges against the lease. In addition, if the lessors
do not have the requisite rights to lease these defective leased properties, the relevant lease
agreements may be deemed invalid, and as a result we may be required to vacate these
defective leased properties and relocate our restaurants. If we are required to vacate all of these
lease properties and relocate our restaurants, we expect to incur a total estimated costs of
RMB67.2 million. However, in the event that we are unable to continue using these defective
leased properties, based on the advice of our PRC Legal Adviser, we, as the tenant, will not
need to continue to pay the rents or the full amounts of such rents. Additionally, it is the
lessors’ responsibility to obtain the title certificates to enter into the leases, and, as a tenant,
we will not be subject to any administrative punishment or penalties in this regard. These
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statutory protections significantly mitigate our risks arising from these defective leased
properties due to claims for vacation from the legal owners of the properties. See also “Risk
Factors – Risks Relating to our Business – Our rights to use some of our leased properties could
be challenged by property owners or other third parties or due to usage defects, which may
adversely affect our business operations and financial condition.”
Having considered the foregoing, our Directors believe that these title defects described
above will not, individually or in the aggregate, materially affect our business and results of
operation, on the grounds that: (i) the abovementioned leased properties with title defects only
constitute 5.4% of our total leased GFA as of the Latest Practicable Date, and leased properties
with title defects and used as our restaurants constituted 4.6% of our total leased GFA as of the
same date; (ii) during the Track Record Period and up to the Latest Practicable Date, to the best
knowledge of our Directors, our leases with respect to these defective leased properties had
never been challenged by any third parties; (iii) given that a substantial portion of our landlords
are owners of large shopping malls and sizeable commercial real estate developers, we believe
the risk that we are required to vacate and relocate from these premises is remote; (iv)
considering these defective leased properties are geographically dispersed across Mainland
China under the jurisdiction of different local governmental authorities, we believe it is
unlikely that we would be at the same time subject to claims of rights from various third parties
or required by the governmental authorities to relocate with respect to a significant number of
these defective leased properties; and (v) according to the terms of certain lease agreements,
the landlords agreed to indemnify for our losses as a result of title defect of the property.
Based on reasons stated above, the Directors are of the view that title defects are not
material nor systemic non-compliance to the Company.
Nothing has come to the Joint Sponsors’ attention that would cause them to disagree with
the Directors’ view.
Upon expiry of these lease agreements, we will assess the legal risk and will not renew
such lease agreements if we believe the risks associated with the title defects are too high.
Starting in 2021, we have requested all of our lessors to provide the necessary
documentation with respect to the title of the relevant leased property before we enter into
lease agreements with them, and ask the lessors to indemnify us for any of our losses caused
by any title defects.
Non-registration of Lease Agreements
As of the Latest Practicable Date, 777 lease agreements had not been registered with
relevant authorities. The lease agreements of such 777 properties will expire in the period from
April 2025 to November 2042. We could not register these lease agreements primarily because
the registration of a lease agreement requires the cooperation between the lessor and lessee.
However, lessors are typically unwilling to undertake the administrative burden of registration
due to the low risk of penalty.
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The non-registration of these leases does not constitute material nor systemic non-
compliance of the Group for the following reasons.
 We have adopted internal policies that (i) request our employees to proactively
coordinate with lessors to complete the registration for all of our lease agreements
and (ii) require our employees to complete the registration of lease agreements in
instances in which lessors are willing to cooperate in such procedures. However, as
the registration of a lease agreement requires the cooperation between the lessor and
lessee and lessors are typically unwilling to undertake the administrative burden due
to the low risk of penalty, we were not able to complete the registration of lease
agreements mentioned above.
 As advised by our PRC Legal Adviser, failure to complete the registration of lease
agreements will not affect the validity of the lease agreements or the binding effect
of the lease agreements over contracting parties or result in us being required to
vacate the leased properties. In addition, such failure to complete the registration of
lease agreement will have limited adverse impact on our normal business operation.
 The potential penalty of non-registration of lease agreements is not material. As
advised by our PRC Legal Adviser, the relevant PRC authorities may impose a fine
ranging from RMB1,000 to RMB10,000 for each unregistered lease. The aggregate
amount of maximum fine will be approximately RMB7.8 million, which our
directors believe will not have any material adverse impact on our business
operations.
As of the Latest Practicable Date, no penalty had been imposed on us for our failure to
register or file the relevant lease agreements. Moreover, we have been more stringent in terms
of requiring our lessors to cooperate with us in registering our lease agreements with the
relevant housing administrative authorities.
Having considered the foregoing, our Directors believe that the non-registration of leases
described above will not, individually or in the aggregate, materially affect our business and
results of operation. See also “Risk Factors – Risks Relating to our Business – Our rights to
use some of our leased properties could be challenged by property owners or other third parties
or due to usage defects, which may adversely affect our business operations and financial
condition.”
INSURANCE
We maintain (i) public liability insurance to cover liability for damages arising out of our
business operations for all of our restaurants in Mainland China including, among other things,
claims of food and drink poisoning by our customers and (ii) property insurance covering all
risks for our restaurants to protect our business from certain natural disasters and other
unfortunate events. Our Directors consider our insurance coverage to be customary for
business of our size and type and in line with the standard commercial practice in Mainland
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China. However, our insurance coverage may not be adequate to cover all losses that may
occur. See “Risk Factors – Risks Relating to Our Business – Our insurance policies may not
provide adequate coverage for all claims associated with our business operations.”
ENVIRONMENTAL AND OCCUPATIONAL HEALTH AND SAFETY MATTERS
We are subject to environmental protection, occupational health and safety laws and
regulations in the PRC. During the Track Record Period, we complied with the relevant
environmental, occupational health and safety laws and regulations in all material respects in
the PRC, and we did not have any incidents or complaints which had a material and adverse
effect on our business, financial condition or results of operations during the same period.
We strive to provide a safe working environment for our employees. We have
implemented work safety guidelines setting out safety practices, accident prevention and
accident reporting. Our work safety guidelines provide clear guidance on various occupational
and restaurant safety matters which our staff are required to follow. In addition, the material
equipment and machinery at our restaurants are subject to periodical maintenance from time to
time and our employees are required to complete training programs that increase their
awareness of safety in the workplace. During the Track Record Period and up to the Latest
Practicable Date, we had not encountered any material safety incidents.
Due to the nature of our operations, we believe the waste we produced is not hazardous
and has minimal impact on the environment. In order to comply with the relevant
environmental laws and regulations, we have undertaken wastewater and solid waste disposal
and processing measures, such as (i) daily collection of solid waste for which we contract
qualified waste management companies and (ii) timely payment of wastewater processing fees
as part of our water bills to the relevant authorities. See “Regulatory Overview” for additional
information. Our Directors are of the view that the annual cost of compliance with applicable
PRC environmental laws, regulations and policies was not material during the Track Record
Period. Our environmental protection expenses were not material during the Track Record
Period and are expected to remain at similar levels.
LEGAL PROCEEDINGS
We may from time to time become a party to various legal, arbitral or administrative
proceedings arising in the ordinary course of our business. During the Track Record Period and
up to the Latest Practicable Date, we were not involved in any legal, arbitral or administrative
proceedings pending or, to our knowledge, threatened against us or any of our Directors that
could have a material and adverse effect on our business, reputation, financial condition or
results of operations.
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COMPLIANCE, LICENSES AND PERMITS
Our Directors, as advised by our PRC Legal Adviser, confirm that as of the Latest
Practicable Date, we had complied with all relevant PRC laws and regulations in all material
respects and have obtained all material licenses, approvals and permits from relevant
regulatory authorities for our operations in Mainland China, except as disclosed in the
subsection headed “Social Insurance and Housing Provident Funds” below. According to the
Food Safety Law in the PRC, a person who engages in food production, food selling, or
catering services must obtain a food operation license in accordance with the relevant
regulations. During the Track Record Period and up to the Latest Practicable Date, all of our
restaurants had obtained the necessary food operation license through the corresponding
subsidiary that owns such restaurants. The expiration date of such food operation licenses
ranges from May 28, 2025 to April 27, 2030. As of the Latest Practicable Date, neither our PRC
Legal Adviser nor we had been informed of any legal impediment in renewing all material
licenses, approvals and permits that have expired or are going to expire in 2025.
In addition, during the Track Record Period and up to the Latest Practicable Date, all of
our restaurants that are in operation had obtained the required as-built acceptance check on fire
prevention, fire safety filing and/or fire safety inspection (“ Fire Safety Inspection
Approvals ”). Moreover, all of the restaurants opened during the Track Record Period and up
to the Latest Practicable Date had obtained the relevant Fire Safety Inspection Approvals
before commencing their operations. Our Directors are committed to operating our restaurants
in compliance with the applicable fire safety laws and regulations and have implemented
rigorous internal control measures to this end. These internal control measures have been
proven to be effective and we plan to continue these measures.
Social Insurance and Housing Provident Funds
Background and Reasons for Non-compliance
During the Track Record Period and as of the Latest Practicable Date, we did not make
full social insurance and housing provident fund contributions for certain employees. In 2022,
2023 and 2024, the aggregate shortfall of social insurance and housing provident fund
contributions amounted to RMB7.1 million, RMB9.0 million and RMB11.5 million,
respectively. Such non-compliance was primarily because (i) we have a large labor force with
relatively high mobility, (ii) certain of our employees were not willing to bear the costs
associated with social insurance and housing provident funds strictly in proportion to their
salary and (iii) a certain number of our employees are migrant workers who are typically not
willing to participate in the social welfare schemes of the city where they temporarily reside
as such contributions are not transferable among cities. In the event that our employees are not
willing to participate in the housing provident fund schemes, we provided those employees
with compensation and benefits in lieu of the relevant contributions.
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Potential Legal Consequences
According to relevant PRC laws and regulations, (a) in respect of outstanding social
insurance contributions, the relevant PRC authorities may demand us to pay the outstanding
social insurance contributions within a stipulated deadline and we may be liable to a late
payment fee equal to 0.05% of the outstanding amount for each day of delay; if we fail to make
such payments, we may be liable to a fine of one to three times the amount of the outstanding
contributions; and (b) in respect of outstanding housing provident fund contributions, we may
be ordered to pay the outstanding housing provident fund contributions within a prescribed
time period. If we were ordered to make such payment, we will do so within the prescribed time
period.
As of the Latest Practicable Date, no material administrative action, fine or penalty had
been imposed by the relevant regulatory authorities with respect to our social insurance
contributions and housing provident funds, nor had we received any order or been informed to
settle the under-contributions.
For social insurance, pursuant to the Urgent Notice on Enforcing the Requirement of the
General Meeting of the State Council and Stabilizing the Levy of Social Insurance
Payment ()
promulgated on September 21, 2018, it is prohibited for administrative enforcement authorities
to organize and conduct centralized collection of enterprises’ historical social insurance
arrears.
Having considered the foregoing, our Directors believe that such non-compliance would
not have a material and adverse effect on our business and results of operations, considering
that: (i) as advised by our PRC Legal Adviser, based on the relevant regulatory policies and the
facts stated above, the likelihood that we would be required by relevant authorities to pay any
shortfall for social insurance and housing provident fund contribution or become subject to
material administrative penalties by relevant authorities due to our failure to provide full social
insurance and housing provident fund contributions for our employees is remote; (ii) as of the
Latest Practicable Date, we had not received any notification from the relevant PRC authorities
requiring us to pay material shortfalls or the penalties with respect to social insurance and
housing provident funds; (iii) we had not been subject to any material administrative penalties
during the Track Record Period and up to the Latest Practicable Date; and (iv) we were not
aware of any material employee complaints nor were involved in any material labor disputes
with our employees with respect to social insurance and housing provident funds during the
Track Record Period and up to the Latest Practicable Date.
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Internal Control and Remedial Measures
We have taken the following rectification measures to prevent future occurrences of such
non-compliances:
 We have enhanced our human resources management policies, which explicitly
require social insurance and housing provident fund contributions to be made in full
in accordance with applicable local requirements;
 We are in the process of communicating with our employees with a view to seeking
their understanding and cooperation in complying with the applicable payment base,
which also requires additional contributions from our employees;
 We have designated our human resources department to review and monitor the
reporting and contributions of social insurance and housing provident fund on a
monthly basis;
 We will keep abreast of latest developments in PRC laws and regulations in relation
to social insurance and housing provident funds; and
 We will consult our PRC legal counsel on a regular basis for advice on relevant PRC
laws and regulations to keep us abreast of relevant regulatory developments.
In addition, we have obtained confirmations from relevant local authorities that, in
respect of the relevant periods stated therein, no administrative penalties had been imposed.
Such local authorities include the relevant human resources and social insurance authorities at
the provincial, municipal and district levels, as well as the housing provident fund management
centers at the municipal level. We undertake to make timely payments for the deficient amount
and overdue charges, as soon as requested by the competent governmental authorities.
Indemnification by Controlling Shareholders
Our Controlling Shareholders have undertaken to indemnify us if we were to incur any
losses as a result of the non-compliance incidents mentioned above and the title defects of our
leased properties. Please refer to section headed “Statutory and General Information – E. Other
Information – 1. Estate duty, tax and other indemnities” in Appendix IV to this prospectus.
RISK MANAGEMENT AND INTERNAL CONTROL
We are exposed to various risks in our operations and have established a risk management
system with relevant policies and procedures that we believe are appropriate for our business
operations. For details on the major risks identified by our management, see “Risk Factors.”
Our policies and procedures relate to managing our restaurant operations, procurement and
food safety and quality.
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To monitor the ongoing implementation of our risk management policies and corporate
governance measures after the Listing, we have adopted or will continue to adopt, among other
things, the following risk management measures:
 establish an audit committee to review and supervise our financial reporting process
and internal control system. Our audit committee consists of three members, namely
Mr. Fan Y ongkui, who serves as chairman of the committee, Mr. Shao Xiaodong and
Mr. Bruno Robert Mercier. For the qualifications and experience of these committee
members, see “Directors and Senior Management;”
 adopt various policies to ensure compliance with the Listing Rules, including but not
limited to aspects related to risk management, connected transactions and
information disclosure; and
 continue to organize training sessions for our Directors and senior management in
respect of the relevant requirements of the Listing Rules and duties of directors of
companies listed in Hong Kong SAR.
In addition, we plan to engage an internal control consultant to review the effectiveness
of our internal controls associated with our major business processes, identify deficiencies and
areas for improvement, provide recommendations and review the implementation status of
these remedial actions on an annual basis.
Our Directors are of the view that our enhanced internal control system is adequate and
effective for our current operations.
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OUR CONTROLLING SHAREHOLDERS
Immediately following the completion of the Global Offering (assuming that the
Over-allotment Option is not exercised), Mr. Wang, his wholly-owned holding company
Yielding Sky, Ms. Lu, her wholly-owned holding company Contemporary Global Investments
and Time Sonic, which is controlled by Mr. Wang and Ms. Lu as it is owned as to 99.9% by
Absolute Smart V entures, which is in turn wholly owned by East Superstar, both the holding
vehicles used by Vistra Trust, will be entitled to exercise voting rights of approximately
54.29% of the issued share capital of our Company. Accordingly, Mr. Wang, Yielding Sky, Ms.
Lu, Contemporary Global Investments, Time Sonic, Absolute Smart V entures, East Superstar
and Vistra Trust are a group of controlling shareholders after the Listing.
COMPETING INTEREST
Each of our Controlling Shareholders and Directors confirm that he/she/it does not have
any interest in a business, apart from the business of our Group, which competes or is likely
to compete, directly or indirectly, with our business, which would require disclosure under
Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying out our business independently from the Controlling Shareholders and their
respective close associates after the Global Offering.
Management Independence
The Board comprises three executive Directors, three non-executive Directors and three
independent non-executive Directors. Although Mr. Wang is chairman of the Board, and
executive Director and also a Controlling Shareholder, our management and operational
decisions are made by our executive Directors and senior management as a whole, most of
whom have served our Group for a long time and have substantial experience in the industry
in which we are engaged. Please see the section “Directors and Senior Management” for further
details.
Each of our Directors is aware of his/her fiduciary duties as a director which require,
among others, that he/she must act for the benefit of and in the best interests of our Company
and not allow any conflict between his/her duties as a Director and his/her personal interests.
The Directors shall not vote in any Board resolution approving any contract or arrangement or
any other proposal in which he/she or any of his/her associates has a material interest and shall
not be counted in the quorum present at the particular Board meeting.
Based on the above, our Directors are satisfied that our Board as a whole together with
our senior management team are able to perform the managerial role in our Group
independently.
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Operational Independence
Although the Controlling Shareholders will retain a controlling interest in our Company
after the Listing, we have full rights to make all decisions regarding, and to carry out, our own
business operations independently from our Controlling Shareholders and their respective
close associates. Our Company (through our subsidiaries) holds or enjoys the benefit of all
relevant licenses necessary to carry out our businesses, and has sufficient capital, equipment
and employees to operate our business independently from our Controlling Shareholders and
their respective close associates.
Based on the above, our Directors are satisfied that we have been operating independently
from our Controlling Shareholders and their respective close associates during the Track
Record Period and will continue to operate independently.
Financial Independence
During the Track Record Period and up to the Latest Practicable Date, our Group has our
own internal control, accounting and financial management system, accounting and finance
department, independent treasury functions for cash receipts and payment and we make
financial decisions according to our own business needs.
In addition, we have independent access to third party financing and our Group does not
rely on our Controlling Shareholders and/or their close associates by virtue of their provision
of financial assistance. As of the Latest Practicable Date, the Company has no loans, advances
and balances due to the Controlling Shareholders. Our Directors believe that we are capable of
obtaining financing from external sources without reliance on the Controlling Shareholders.
Based on the above, our Directors believe that we have the ability to operate
independently of our Controlling Shareholders and their respective close associates from a
financial perspective and are able to maintain financial independence from our Controlling
Shareholders and their respective associates.
CORPORATE GOVERNANCE MEASURES
Our Directors believe that there will be adequate corporate governance measures in place
to manage conflicts of interest after Listing. In particular, we will implement the following
measures effective upon Listing:
(a) as part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules. In particular, our Articles of
Association provided that, unless otherwise provided, a Director shall not vote on
any resolution approving any contract or arrangement or any other proposal in which
such Director or any of his/her associates have a material interest nor shall such
Director be counted in the quorum present at the meeting;
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(b) a Director with material interests shall make full disclosure in respect of matters that
conflict or potentially conflict with our interest and abstain from voting at the board
meetings on matters in which such Director or his/her associates have a material
interest, unless the attendance or participation of such Director at such meeting of
the Board is specifically requested by a majority of the independent non-executive
Directors;
(c) we are committed that our Board should include a balanced composition of
executive and non-executive Directors (including independent non-executive
Directors). We have appointed three independent non-executive Directors and we
believe our independent non-executive Directors possess sufficient experience and
they are free of any business or other relationship which could interfere in any
material manner with the exercise of their independent judgment and will be able to
provide an impartial, external opinion to protect the interests of our public
Shareholders. Details of our independent non-executive Directors are set out in
“Directors and Senior Management – Directors – Independent Non-executive
Directors”;
(d) in the event that our independent non-executive Directors are requested to review
any conflicts of interests circumstances between our Group on the one hand and our
Controlling Shareholders and/or our Directors on the other hand, our Controlling
Shareholders and/or our Directors shall provide our independent non-executive
Directors with all necessary information and our Company shall disclose the
decisions of our independent non-executive Directors either through its annual
report or by way of announcements; and
(e) we have appointed Altus Capital Limited as our compliance adviser, which will
provide advice and guidance to us in respect of compliance with the applicable laws
and the Listing Rules including various requirements relating to directors’ duties and
corporate governance.
Further, any transaction that is proposed between our Company and our Controlling
Shareholders and their respective associates will be required to comply with the requirements
of the Listing Rules, including, where appropriate, the reporting, annual review, announcement
and independent Shareholders’ approval requirements.
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DIRECTORS
The following table sets out certain information in respect of our Directors:
Name Age Position(s)
Date of
appointment as
Director
Date of joining
our Group Roles and responsibilities
Relationship with
other Directors
or Senior
Management
Members
Wang Qinsong
(ؒ)
53 Chief executive
officer, chairman
of our Board and
executive Director
July 9, 2015 October 2008 Overseeing the overall
management and
business operation,
board affairs,
formulating strategies
and operational plans,
and making major
business decision of our
Group
Spouse of Ms. Lu
and uncle of
Mr. Wang
Jiawei
Y u Liying
(ɲᘆᅂ)
38 Executive Director
and vice president
May 25, 2017 October 2008 Responsible for the
management of supply
chain, construction
projects and public
relations and the
expansion of restaurant
network
Sister in law of
Ms. Lu
Wang Jiawei
(ˮԳਃ)
41 Executive Director,
financial director
and board
secretary
May 25, 2017 May 2013 Overseeing the
development, day-to-day
management and
financial and capital
management of our
Group
Nephew of
Mr. Wang
Lu Changmei
(ૠ)
44 Non-executive
Director
July 9, 2015 October 2008 Responsible for providing
strategic advice and
recommendations on the
operations and
management of our
Group
Spouse of Mr.
Wang
Liu Sheng ( ᄎସ) 42 Non-executive
Director
May 25, 2017 May 2017 Responsible for providing
strategic advice and
recommendations on the
operations and
management of our
Group
None
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Name Age Position(s)
Date of
appointment as
Director
Date of joining
our Group Roles and responsibilities
Relationship with
other Directors
or Senior
Management
Members
Xu Ruijie (ြẘ) 35 Non-executive
Director
December 5,
2023
December 5,
2023
Responsible for providing
strategic advice and
recommendations on the
operations and
management of our
Group
None
Shao Xiaodong
(؇)
53 Independent non-
executive Director
April 30, 2025 April 30, 2025 Providing independent
judgment and advice to
the Board
None
Bruno Robert
Mercier
65 Independent non-
executive Director
April 30, 2025 April 30, 2025 Providing independent
judgment and advice to
the Board
None
Fan Y ongkui
(۲)
40 Independent non-
executive Director
April 30, 2025 April 30, 2025 Providing independent
judgment and advice to
the Board
None
SENIOR MANAGEMENT
Our senior management team, in addition to the executive Directors listed above,
comprises the following:
Name Age Position(s)
Date of
appointment
Date of joining
our Group Roles and responsibilities
Relationship with
other Directors
or Senior
Management
Members
Zhang Li ( ੵͭ) 41 Chief Financial
Officer
August 31, 2020 August 2020 Overseeing the finance,
strategic investments and
investors’ relationship of
our Group
None
Tai Fang (ٹ50 Vice president January 15,
2019
January 2019 Responsible for business
operation and
management of our
Group
None
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DIRECTORS
The Board currently consists of nine Directors, comprising three executive Directors,
three non-executive Directors and three independent non-executive Directors. The functions
and duties of the Board include convening shareholders’ meetings, reporting on the Board’s
work at these meetings, implementing the resolutions passed on these meetings, determining
business and investment plans, formulating our annual budget and final accounts, and
formulating our proposals for profit distributions and for the increase or reduction of registered
capital. In addition, the Board is responsible for exercising other powers, functions and duties
in accordance with the Articles of Association, and all applicable laws and regulations,
including the Listing Rules.
The biography of each of our Directors is set out below.
Executive Directors
Mr. Wang Qinsong (ؒ)aged 53, is our co-founder, chairman of the Board, chief
executive officer and executive Director. Mr. Wang has around 20 years of experience in the
hospitality and food and beverage industries and is experienced in business management. With
his extensive experience in restaurant operations, he is principally responsible for overseeing
the overall management and business operation of our Group, including coordinating board
affairs, formulating strategies and operational plans and making major business decisions. Mr.
Wang has been the chairman of the board since January 2017 and the chief executive officer
since January 2018 at Tibet Green Tea F&B. Mr. Wang served as a general manager at
Hangzhou Green Tea Food & Beverage Management Company Limited (ψၠ঩᎛භ၍ଣϞ
ʮ̡)( “ Hangzhou Green Tea F&B ”) from October 2008 to December 2016, which was the
predecessor of Tibet Green Tea F&B. Prior to founding our Group, he established Green Tea
Y outh Hostel (ٸࣚat November 2004 and served as the general manager from
December 2004 to September 2007. Mr. Wang was admitted to Executive Education Program
at the Cheung Kong Graduate School of Business (Ϫਠኪ৫) in April 2019, in the PRC.
Mr. Wang does not hold any current or past directorship in any listed companies in the
last three years preceding the date of this prospectus.
Ms. Yu Liying ( ɲᘆᅂ), aged 38, is our executive Director and vice president. Ms. Y u
has around 15 years of experience in restaurant operations and is experienced in business
management. She is primarily responsible for the management of supply chain, construction
projects and public relations and the expansion of restaurant network. Ms. Y u has been serving
as a vice president at Tibet Green Tea F&B since January 2017. Ms. Y u managed stores
between October 2008 to December 2011 for Hangzhou Green Tea F&B, which was the
predecessor of Tibet Green Tea F&B. She was later promoted and successively served as a
regional manager, then a regional general manager and then a vice president in charge of brand
operation and chief operating officer at Hangzhou Green Tea F&B until December 2016. Ms.
Y u is pursuing an executive master of business administration (EMBA) degree from the
Cheung Kong Graduate School of Business (Ϫਠኪ৫) in the PRC.
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Ms. Y u does not hold any current or past directorship in any listed companies in the last
three years preceding the date of this prospectus.
Mr. Wang Jiawei ( ˮԳਃ), aged 41, is our executive Director, financial director and
board secretary. He has around 14 years of experience in finance and accounting and is
primarily overseeing the development, day-to-day management and financial and capital
management of our Group. Mr. Wang Jiawei has served as a board secretary at Tibet Green Tea
F&B since January 2017 and has served as a financial director since November 2019. Mr. Wang
Jiawei worked as a financial director at Hangzhou Green Tea F&B between May 2013 to
December 2016, which was the predecessor of Tibet Green Tea F&B. Prior to joining our
Group, Mr. Wang Jiawei was a project manager of BDO China Shu Lun Pan Certified Public
Accountants LLP , Zhejiang Branch (ה(౷ஷΥྫ)הfrom May
2010 to April 2013.
Mr. Wang Jiawei obtained his master’s degree in finance from Zhejiang Institute of
Finance & Economics ( एϪৌ຾ኪ৫) (now known as Zhejiang University of Finance &
Economics ( एϪৌ຾ɽኪ)) in the PRC in March 2010. He has been a PRC certified public
accountant (ࢪࠇcertified by Zhejiang Province Certified Public Accountant
Association (՘ึ) since June 2012.
Mr. Wang Jiawei does not hold any current or past directorship in any listed companies
in the last three years preceding the date of this prospectus.
Non-executive Directors
Ms. Lu Changmei (ૠ), aged 44, is our co-founder and non-executive Director. Ms.
Lu has around 20 years of experience in the hospitality and food and beverage industries and
is experienced in business management. She is responsible for providing strategic advice and
recommendations on the operations and management of our Group. Ms. Lu has been serving
as a deputy general manager at Tibet Green Tea F&B since January 2017. She worked as the
deputy general manager in Hangzhou Green Tea F&B between October 2008 to December
2016, which was the predecessor of Tibet Green Tea F&B. Prior to joining our Group, she
established Green Tea Y outh Hostel with Mr. Wang and served as the deputy general manager
from December 2004 to September 2007.
Ms. Lu does not hold any current or past directorship in any listed companies in the last
three years preceding the date of this prospectus.
Mr. Liu Sheng ( ᄎସ), aged 42, is our non-executive Director. With his extensive
experience in finance and investment, Mr. Liu is primarily responsible for providing strategic
advice and recommendations on the operations and management of our Group. Since 2013, he
has been with Partners Group and has around 20 years of experience in finance and investment
industry. He is managing director, head of Partner Group’s Shanghai office and a member of
the Private Equity Direct Co-Investment in Health and Life Investment Committee in Partners
Group and also a director in Partners Gourmet. Prior to joining Partners Group, Mr. Liu worked
DIRECTORS AND SENIOR MANAGEMENT
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as an investment director at Cathay Capital Investment Consulting (Shanghai) Co., Ltd. from
January 2007 to March 2013. He started his career at KPMG Hua Zhen LLP , Shanghai Branch,
where he worked as an auditor from August 2004 to August 2006.
Mr. Liu has extensive experience in managing public and private companies. He has
served as a director at Shanghai Aiyingshi Co., Ltd. (ʮ̡), a
leading maternal and infant products retailer and relevant services provider listed on the
Shanghai Stock Exchange (Stock Code: 603214) since its listing in March 2018. He has also
served as a director in Moda Solution Limited, a leading store fixture solution service provider
and in Apex Logistics Solutions International Pte. Ltd., a cross-border logistics service
provider since September 2019 and February 2021, respectively.
Mr. Liu obtained his bachelor’s degree in finance (securities and investment) from
Shanghai University of Finance and Economics ( ɪऎৌ຾ɽኪ) in the PRC in July 2004.
Ms. Xu Ruijie (ြẘ), aged 35, is our non-executive Director. She is primarily
responsible for providing strategic advice and recommendations on the operations and
management of our Group. She has over 10 years of experience in consulting and private equity
investment. She joined Partners Group in August 2016 and is currently a member of
management for private equity Asia in Partners Group (Shanghai) Co. Ltd. Prior to joining
Partners Group, Ms. Xu served as a senior consultant in consulting department at Booz &
Company from July 2011 to July 2014.
Ms. Xu obtained her bachelor’s degree in economics and international finance from
University of Macau in Macau in August 2011 and a Master of Business Administration degree
from Columbia University in the City of New Y ork in May 2016.
Ms. Xu does not hold any current or past directorship in any listed companies in the last
three years preceding the date of this prospectus.
Independent Non-executive Directors
Mr. Shao Xiaodong (؇)aged 53, was appointed as an independent non-executive
Director of our Company on April 30, 2025. He is primarily responsible for providing
independent judgment and advice to the Board.
Mr. Shao is a vice president of security and risk management group at Ant Group Co., Ltd.
(ʮ̡) (the “ Ant Group ”). He joined the Ant Group in July 2014 and
has successively undertaken different roles including the deputy general manager of
Alipay.com Co., Ltd, a leading third party payment platform provider and the general manager
of safety management department and Xianghubao (ʝᘒ). Prior to joining the Ant Group, he
worked as a policeman for more than 23 years in Hangzhou Public Security Bureau (ψ̹ʮ
τ҅) and was the head of the criminal investigation division when he left the Hangzhou Public
Security Bureau in March 2014.
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Mr. Shao graduated from East China University of Science and Technology (ଣʈɽ
ኪ) in business administration via correspondence course in July 2006. He was honored as the
outstanding chief security officer of the Y angtze River Delta region (֜)
in 2019 by Committee of the Outstanding Chief Security Officer of the Y angtze River Delta
Region.
Mr. Shao does not hold any current or past directorship in any listed companies in the last
three years preceding the date of this prospectus.
Mr. Bruno Robert Mercier , aged 65, was appointed as an independent non-executive
Director of our Company on April 30, 2025. He is primarily responsible for providing
independent judgment and advice to the Board.
He is currently an independent non-executive director of Blue Moon Group Holdings
Limited, a leader in the Chinese detergent market listed on the Main Board of the Stock
Exchange (stock code: 6993), a director of Gramona SA, a family-owned Spanish premium
winery and a non-executive member of the Supervisory Board of City Holdings Limited, a
leading consumer products retailer and distributor in Myanmar, since February 2022.
From February 2018 to April 2024, he was a director of Home Chain Foods Ltd., the
holder of the Burger King Franchise in Taiwan. He is also serving as an adviser to several other
companies, including Driscoll’s, a leading berries producer as well as a number of private
equity and venture capital funds and an investor in tech start-ups focusing on retail and
consumer goods. He was a member of Bain Advisors Network from June 2019 to December
2024. He also has provided one-off industry advice to Partners Group on three potential
investment opportunities in 2015, 2018 and 2019.
From 2011 to 2017, Mr. Mercier was chief executive officer and executive director of Sun
Art Retail Group Limited, one of China’s largest and most profitable food retailers listed on
the Main Board of the Stock Exchange (stock code: 6808) and was the chairman of the board
of RT Mart International in Taiwan. From 1999 to 2011, Mr. Mercier worked in the Auchan
Group with various positions as development director, store manager and chief executive
officer of Auchan (China) Investment Co., Ltd.. He also has many years of experience working
in the consumer goods and consulting industries from 1983 to 1998, notably with Groupe
Pernod Ricard, a global wines and spirits producer, in their China and Thailand operations as
well as with McKinsey & Company.
Mr. Mercier holds a master’s degree in business administration from European Institute
of Business Administration (Institut Européen d’Administration des Affaires, “ INSEAD ”), and
an engineering degree from the Ecole Nationale Supérieure Agronomique de Toulouse in
France. He is an honorary citizen of the city of Suzhou and was awarded the Golden Magnolia
medal by Shanghai City government in 2011.
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Mr. Mercier was a director of the following company incorporated in the PRC when its
business license was revoked. The relevant details are as follows:
Name of Company
Principal
Business
Place of
Incorporation
Reasons for the Revocation of Business
License
Tianjin Auchan
Supermarket
Company
Limited (ᆄ
ʮ̡)
(“Tianjin
Auchan ”)
Retail PRC Mr. Mercier was a director of Tianjin
Auchan at the time of the revocation.
To the best of Mr. Mercier’s knowledge,
the business licence of Tianjin Auchan
was revoked in 2010 because of its
failure to complete annual inspection as
required under relevant PRC regulations
and its failure to apply for deregistration
following the cessation of its supermarket
business. As confirmed by Mr. Mercier,
the shareholders of Tianjin Auchan
decided to cease the operation of Tianjin
Auchan before 2010, therefore no annual
inspection was conducted thereafter.
Mr. Mercier further confirmed that
Tianjin Auchan was solvent at the time
of such revocation and cessation of
business. Mr. Mercier confirmed that, as
at the Latest Practicable Date, he has not
incurred any liabilities as a result of such
revocation and is not aware of any actual
or potential claim that has been or will
be made against him or Tianjin Auchan
due to such revocation. In addition, our
PRC legal advisers advised that, Mr.
Mercier, as a director of Tianjin Auchan,
is not in the position to apply or resolve
to dissolve or deregister Tianjin Auchan,
(which is a right reserved for
shareholders) nor is at fault for the
revocation of the business license of
Tianjin Auchan.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Fan Y ongkui (۲)aged 40, was appointed as an independent non-executive
Director of our Company on April 30, 2025. He is primarily responsible for providing
independent judgment and advice to the Board.
Mr. Fan has extensive experience in finance and accounting. He has been the vice
president and chief financial officer of JNBY Design Limited (ʮ̡)( “ JNBY ”),
a leading designer brand fashion house listed on the Main Board of the Stock Exchange (stock
code: 3306), since August 2021 and December 2022, respectively. Mr. Fan served as the
finance director of JNBY from September 2015 to December 2022. Prior to joining JNBY , he
worked as a financial analysis manager in (ʮ̡), a company listed on
the Shenzhen Stock Exchange (stock code: 002236) from July 2010 to September 2015.
Between May 2008 to June 2010, he was a project manager of BDO China Shu Lun Pan
Certified Public Accountants LLP , Zhejiang Branch. He started his career in Zhejiang
Zhongcheng Certified Public Accountants LLP (הin September 2006
and worked there until April 2008.
Mr. Fan obtained his bachelor’s degree in landscape architecture from Zhejiang
University ( एϪɽኪ) in June 2006. He has been a PRC certified public accountant ( ʕ਷ൗ̅
ࢪࠇcertified by Zhejiang Province Certified Public Accountant Association (ൗ̅
՘ึ) since April 2009. He obtained the qualification for registered tax agent in the PRC
in November 2013 and the qualification for certified public valuer in December 2011. He
obtained a lawyer’s practice certificate issued by the Ministry of Justice of the People’s
Republic of China in April 2021.
Mr. Fan does not hold any current or past directorship in any listed companies in the last
three years preceding the date of this prospectus.
Save as disclosed above, each of our Directors had no other relationship with any
Directors, senior management, substantial shareholders or Controlling Shareholders of our
Company and none of our Directors had held any other directorships in any other company
listed in Hong Kong SAR or overseas during the three years immediately preceding the date
of this prospectus. Save as disclosed herein, to the best knowledge, information and belief of
our Directors having made all reasonable enquiries, there are no other matters in respect of
each of our Directors that is required to be disclosed pursuant to Rule 13.51(2)(a) to (v) of the
Listing Rules and there is no other material matter relating to our Directors that needs to be
brought to the attention of our shareholders.
DIRECTORS AND SENIOR MANAGEMENT
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SENIOR MANAGEMENT
The biography of each of our senior management members is set out below.
Mr. Zhang Li ( ੵͭ), aged 41, joined our Group and was appointed the chief financial
officer on August 31, 2020. He has also been serving as chief financial officer at Tibet Green
Tea F&B since August 2020. Mr. Zhang is primarily responsible for overseeing the finance,
strategic investments and investors’ relationship of our Group. He has around 15 years of
experience in finance and accounting.
Mr. Zhang has been serving as an independent director of Nantong Y undom Precision
Metal Works Co., Ltd (ʮ̡), an engineering and technology
provider, since March 2023. Prior to joining our Group, Mr. Zhang was the chief financial
officer at Hangzhou Runxian Finery Co., Ltd. between July 2019 to May 2020. Before that, he
worked at Zhejiang Ronghe Network Technology Limited (ʮ̡), a
website application developer and internet promotion marketing company as the chief financial
officer between January 2017 to June 2019. From September 2015 to December 2016, Mr.
Zhang served as a joint company secretary and board secretary at JNBY Design Limited ( Ϫ
ʮ̡), a leading designer brand fashion house listed on the Main Board of the Stock
Exchange (stock code: 3306). From July 2014 to September 2015, he worked as the financial
controller at JNBY Finery Co., Ltd. (ʮ̡), an indirectly wholly-owned
subsidiary of JNBY Design Limited. Mr. Zhang started his career at Ernst & Y oung Hua Ming
LLP , Shanghai Branch from October 2006 to April 2014, where he last served as an auditing
manager.
Mr. Zhang graduated from Suzhou University ( ᘽψɽኪ) with a bachelor’s degree in
international economy and trade in the PRC in June 2006 and obtained his EMBA degree from
Zhejiang University ( एϪɽኪ) in the PRC in June 2024. He has been a PRC Certified Public
Accountant (ࢪࠇcertified by The Chinese Institute of Certified Public
Accountants (՘ึ) since December 2009. He has been a Certified
Management Accountant certified by The Institute of Management Accountants of United
States of America since October 2020.
Mr. Zhang does not hold any current or past directorship in any listed companies in the
last three years preceding the date of this prospectus.
Ms. Tai Fang (ٹ)aged 50, joined our Group and was appointed as a vice president
on January 15, 2019, primarily responsible for business operation and management of our
Group. She has also been serving as vice president at Tibet Green Tea F&B since January 2019.
Prior to joining our Group, Ms. Tai served as a store general manager, regional operation
manager, senior operation director and vice president successively at South Beauty (Beijing)
Enterprise Management Co., Ltd (ی(̏ԯ)ʮ̡), an F&B service
management company in the PRC between 2004 to 2018.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. Tai completed the China F&B president senior study program ( ʕ਷᎛භุᐼ൒৷ॴ
फ) in the School of Continuing Education at Tsinghua University in October 2007.
Ms. Tai does not hold any current or past directorship in any listed companies in the last
three years preceding the date of this prospectus.
JOINT COMPANY SECRETARIES
Ms. Lu Juan (ࢇ)is the joint company secretary of our Company and was appointed
on April 30, 2025. She is primarily responsible for the financial and the overall company
secretarial matters of our Group.
Ms. Lu Juan joined our Group in May 2021 and has been serving as deputy director of
financial department since then. She has over 10 years of experience in finance management.
Prior to joining our Group, Ms. Lu Juan was the finance director at Zhejiang Yifuli Industrial
Co., Ltd (ʮ̡) from October 2019 to May 2021. Before that, she worked
at Ribo Fashion Group Co, Ltd. (ʮ̡), a fashion brand operation
management group listed on Shanghai Stock Exchange (stock code: 603196) from February
2016 to September 2019, where she last served as senior financial manager. Ms. Lu Juan
obtained a bachelor’s degree in management from Donghua University (ശɽኪ) in the PRC
in March 2016 through online courses. She obtained the title of intermediate accountant ( ʕॴ
ࢪࠇfrom Ministry of Finance of the People’s Republic of China in September 2016 and
a Certified Management Accountant certified by The Institute of Management Accountants
United States of America since January 2022.
Ms. Lu Juan does not hold any current or past directorship in any listed companies in the
last three years preceding the date of this prospectus.
Ms. Lai Siu Kuen (ࢇ)is the joint company secretary of our Company and was
appointed on April 30, 2025. She is a director of the company secretarial services of Tricor
Services Limited, a global professional services firm. She is currently the company secretary
or joint company secretary of certain companies, including Pujiang International Group
Limited (stock code: 2060), Shanghai Junshi Biosciences Co., Ltd. (stock code: 1877) and
Y angtze Optical Fibre and Cable Joint Stock Limited Company (stock code: 6869), the shares
of which are all listed on the Main Board of the Stock Exchange. She has over 20 years of
professional and in-house experience in the company secretarial field.
Ms. Lai obtained a bachelor’s degree in accountancy from The Hong Kong Polytechnic
University in November 1997. She is a fellow of both The Hong Kong Chartered Governance
Institute (formerly known as The Hong Kong Institute of Chartered Secretaries) and The
Chartered Governance Institute (formerly known as The Institute of Chartered Secretaries and
Administrators).
DIRECTORS AND SENIOR MANAGEMENT
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BOARD COMMITTEES
Audit Committee
The Company established an audit committee in compliance with Rules 3.21 to 3.23 of
the Listing Rules with written terms of reference in compliance with the Corporate Governance
Code in Appendix C1 to the Listing Rules. The primary duties of our audit committee are to
review, supervise and approve our financial reporting process and internal control system and
to provide advice and comments to our Board.
Member of the audit committee are Mr. Fan Y ongkui, Mr. Shao Xiaodong and Mr. Bruno
Robert Mercier. Mr. Fan Y ongkui is the chairman of the audit committee.
Remuneration Committee
The Company established a remuneration committee with written terms of reference in
compliance with the Corporate Governance Code in Appendix C1 to Listing Rules. The
remuneration committee reviews and recommends to our Board the remuneration and other
benefits paid by us to our Directors and senior management. The remuneration of all our
Directors and senior management is subject to regular monitoring by our remuneration
committee to ensure that levels of their remuneration and compensation are appropriate.
Member of the remuneration committee are Mr. Shao Xiaodong, Mr. Wang Qinsong and
Mr. Fan Y ongkui. Mr. Shao Xiaodong is the chairman of the remuneration committee.
Nomination Committee
The Company established a nomination committee with written terms of reference in
compliance with the Corporate Governance Code in Appendix C1 to the Listing Rules. The
primary responsibilities of the nomination committee are to consider and recommend to our
Board suitable and qualified candidates of Directors and to review the structure, size and
composition of our Board and the board diversity policy adopted by our Company on a regular
basis.
Member of the nomination committee are Mr. Wang Qinsong, Mr. Shao Xiaodong and Mr.
Bruno Robert Mercier. Mr. Wang Qinsong is the chairman of the nomination committee.
BOARD DIVERSITY
To enhance the effectiveness of our Board and to maintain the high standard of corporate
governance, we have adopted the board diversity policy which sets out the objective and
approach to achieve and maintain diversity of our Board. Pursuant to board diversity policy,
we seek to achieve board diversity by taking into consideration of various factors, including
but not limited to professional experience, skills, knowledge, gender, age, cultural and
education background, ethnicity and length of service with our Company.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 249 ---
Our Directors have a balanced mix of knowledge, skills and experience, including the
areas of food and beverage, accounting, consumer goods and hospitality industries. They
obtained academic degrees in various majors, including finance, accounting, landscape
architecture and business administration. We have three independent non-executive Directors
with different industry backgrounds, representing one-third of the members of our Board.
Furthermore, our Board has a wide range of age, ranging from 35 years old to 65 years old. We
have also taken, and will continue to take steps to promote gender diversity at all levels of our
Company, including but not limited to the Board and the management levels. In particular, one
of our executive Directors and two of our non-executive directors are also female. Going
forward, our Company will take into consideration factors based on its own business model and
specific needs from time to time in determining the optimum composition of our Board. All
Board appointments will be based on meritocracy having due regard for the benefits of
diversity on the Board.
Our Nomination Committee is responsible for ensuring the diversity of our Board
members and compliance with relevant codes governing board diversity under the Corporate
Governance Code contained in Appendix C1 of the Listing Rules. Our Nomination Committee
will review the board diversity policy and our diversity profile (including gender balance) from
time to time to ensure its continued effectiveness. We will also disclose in our corporate
governance report about the implementation of the board diversity policy on an annual basis.
We are also committed to adopting similar approach to promote diversity, including but
not limited to gender diversity, at all other levels of our Company from the Board downwards
to enhance the effectiveness of our corporate governance as a whole.
CONFIRMATIONS FROM OUR DIRECTORS
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules in June 2024, and (ii) understands his or her
obligations as a director of a listed issuer under the Listing Rules.
Each of the independent non-executive Directors has confirmed (i) his/her independence
as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) that
he/she has no past or present financial or other interest in the business of the Company or its
subsidiaries or any connection with any core connected person of the Company under the
Listing Rules as of the Latest Practicable Date, and (iii) that there are no other factors that may
affect his/her independence at the time of his/her appointments.
DIRECTORS AND SENIOR MANAGEMENT
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W AIVER GRANTED BY THE STOCK EXCHANGE
Management presence
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with the requirement under Rule 8.12 of the Listing Rules in relation to the requirement of
management presence in Hong Kong SAR. For details of the waiver, please see the section
headed “Waivers from Strict Compliance with the Listing Rules – Management Presence in
Hong Kong SAR” in this prospectus.
COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
The aggregate amount of remuneration our Directors have received (including fees,
salaries, allowances and other benefits, discretionary bonuses and retirement scheme
contributions) for the years ended December 31, 2022, 2023 and 2024 were approximately
RMB1.6 million, RMB3.2 million and RMB4.5 million, respectively.
The aggregate amount of fees, salaries, allowances and other benefits, discretionary
bonuses and retirement scheme contributions paid to the five highest paid individuals of our
Company, including Directors, for the years ended December 31, 2022, 2023 and 2024 were
approximately RMB3.6 million, RMB6.1 million and RMB8.4 million, respectively.
Under the arrangements currently in force, the aggregate amount of remuneration,
excluding discretionary bonuses, payable to our Directors for the year ending December 31,
2025 is estimated to be approximately RMB5.7 million.
No remuneration was paid by us to our Directors or the five highest paid individuals as
an inducement to join or upon joining us or as a compensation for loss of office in respect of
the years ended December 31, 2022, 2023 and 2024. Further, none of our Directors had waived
any remuneration during the same period.
Save as disclosed above, no other payments have been made or are payable in respect of
the years ended December 2022, 2023 and 2024 by our Group to the Directors.
Our Board will review and determine the remuneration and compensation packages of our
Directors and senior management which, following the Listing, will receive recommendation
from the Remuneration Committee which will take into account salaries paid by comparable
companies, time commitment and responsibilities of the Directors and performance of our
Group.
DIRECTORS AND SENIOR MANAGEMENT
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COMPLIANCE ADVISER
We have appointed Altus Capital Limited as our compliance adviser (the “ Compliance
Adviser ”) upon listing of our Shares on the Stock Exchange in compliance with Rule 3A.19
of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the Compliance Adviser will
provide advice to us when consulted by us in the following circumstances:
 the publication of any regulatory announcement, circular or financial report;
 where a transaction, which might be a notifiable or connected transaction, is
contemplated including share issues and share repurchases;
 where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where its business activities, developments
or results deviate from any forecast, estimate, or other information in this
prospectus; and
 where the Stock Exchange makes an inquiry of our Company regarding unusual
movements in the price or trading volume of the Shares.
The term of the appointment shall commence on the Listing Date and end on the date on
which our Company distributes its annual report in respect of its financial results for the first
full financial year commencing after the Listing Date. This appointment may be subject to
extension by mutual agreement.
CORPORATE GOVERNANCE CODE
Pursuant to code provision C.2.1 of the Corporate Governance Code in Appendix C1 to
the Listing Rules, the roles of chairman and chief executive officer should be separate and
should not be performed by the same individual. However, our Company does not have a
separate chairman and president and the responsibility of both chairman and Chief Executive
Officer vest in Mr. Wang. Our Board believes that vesting the responsibilities of both chairman
and Chief Executive Officer in the same person has the benefit of ensuring the consistent
leadership within our Group and enables more effective and efficient overall strategic planning
of our Group. Besides, with three independent non-executive Directors out of a total of nine
Directors in our Board, there will be sufficient independent voice within our Board to protect
the interests of our Company and our Shareholders as a whole. Therefore, our Board considers
that the balance of power and authority for the present arrangement will not be impaired and
this structure will enable our Company to make and implement decisions promptly and
effectively. Our Board will continue to review and consider splitting the roles of chairman of
our Board and Chief Executive Officer of our Company at a time when it is appropriate and
suitable by taking into account the circumstances of our Group as a whole.
DIRECTORS AND SENIOR MANAGEMENT
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As of the Latest Practicable Date, our Directors consider that our Company has fully
complied with the Corporate Governance Code as set out in Appendix C1 to the Listing Rules.
Our Directors will review the corporate governance policies of our Group and compliance with
the Corporate Governance Code each financial year.
RSU SCHEME
We adopted the RSU Scheme on February 28, 2020, which was further amended and
approved on May 20, 2022 and April 30, 2025, respectively to motivate and retain skilled and
experienced personnel to strive for the future development and expansion of the Group by
providing them with the opportunity to own equity interests of the Company. The principal
terms of the RSU Scheme are summarized in the section headed “Appendix IV – Statutory and
General Information – D. Share Incentive Scheme” in this prospectus.
DIRECTORS AND SENIOR MANAGEMENT
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So far as our Directors are aware, immediately following the completion of the Global
Offering and assuming that the Over-allotment Option is not exercised, the following persons
will have an interest or a short position in Shares or underlying Shares of our Company which
will be required to be disclosed to our Company and the Stock Exchange pursuant to the
provisions of Division 2 and 3 of Part XV of the SFO or will be, 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:
Immediately after the Global Offering
(assuming the Over-allotment
Option is not exercised) (1)
Name of Shareholder Nature of interest
Number of
Shares (2)
Approximate
percentage of
interest in our
Company
Vistra Trust Trustee of a trust (3) 365,600,000 54.29%
East Superstar Interest in a controlled
corporation (4)
365,600,000 54.29%
Absolute Smart V entures Interest in a controlled
corporation (3)
365,600,000 54.29%
Time Sonic Beneficial interest (3) 365,600,000 54.29%
Mr. Wang Founder of a
discretionary trust (3)
365,600,000 54.29%
Yielding Sky Beneficiary of trust (3) 365,600,000 54.29%
Ms. Lu Founder of a
discretionary trust (3)
365,600,000 54.29%
Contemporary Global
Investments
Beneficiary of trust (3) 365,600,000 54.29%
Partners Gourmet Beneficial interest (5) 106,140,800 15.76%
Partners Group Interest in controlled
corporation (5)
106,140,800 15.76%
Notes:
(1) The calculation is based on the total number of 673,454,800 Shares in issue immediately following the
completion of the Global Offering (assuming that the Over-allotment Option is not exercised).
(2) All interests stated are long positions.
(3) Time Sonic is owned as to (i) 99.9% by Absolute Smart V entures, the holding vehicle used by Vistra
Trust, the trustee of Green Tea Family Trust, which is a discretionary trust established by Mr. Wang and
Ms. Lu as the settlors and protectors and Yielding Sky (wholly-owned by Mr. Wang) and Contemporary
Global Investments (wholly-owned by Ms. Lu) as the beneficiaries; (ii) 0.049% by Yielding Sky, which
is wholly owned by Mr. Wang; and (iii) 0.051% by Contemporary Global Investments, which is wholly
owned by Ms. Lu. Accordingly, each of Absolute Smart V entures, Yielding Sky, Contemporary Global
Investments, Mr. Wang and Ms. Lu is deemed to be interested in all the Shares held by Time Sonic.
(4) Absolute Smart V entures is wholly owned by East Superstar, the holding vehicle used by Vistra Trust,
the trustee of Green Tea Family Trust.
SUBSTANTIAL SHAREHOLDERS
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(5) Assuming the Series-A Preferred Shares are converted into the Shares on a one-for-one basis, Partners
Gourmet shall hold 106,140,800 Shares, representing approximately 15.76% of the total issued share
capital of our Company upon Listing. Partners Gourmet is ultimately controlled by Partners Group, a
company listed on the SIX Swiss Exchange (symbol: PGHN). As such, Partners Group is deemed to have
an interest in the Shares held by Partners Gourmet.
Save as disclosed above and in the section headed “Statutory and General Information –
C. Further Information about our Directors and Substantial Shareholders – 1. Disclosure of
Interests” in Appendix IV to this prospectus, our Directors are not aware of any person who
will, immediately following the completion of the Global Offering and assuming that the
Over-allotment Option is not exercised, have an interest or a short position in the Shares or
underlying Shares which will be required to be disclosed to our Company and the Stock
Exchange under the provisions of Division 2 and 3 of Part XV of the SFO or will be, 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 any other Member of the
Group.
SUBSTANTIAL SHAREHOLDERS
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AUTHORIZED AND ISSUED SHARE CAPITAL
The following is a description of the authorized share capital of our Company as of the
Latest Practicable Date and immediately following the completion of the Global Offering
(without taking into account the exercise of the Over-allotment Option):
Authorized share capital
As of the Latest Practicable Date:
Number of
Shares Description of Shares
Total
Nominal
Value
Approximate
percentage
of total
share
capital
(US$)
156,650,000 Series-A Preferred Shares of
US$0.00002 each
3,133 6.27%
2,343,350,000 Shares of US$0.00002 each 46,867 93.73%
2,500,000,000 Total 50,000 100.00%
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised):
Number of
Shares Description of Shares
Total
Nominal
Value
Approximate
percentage
of total
share
capital
(US$)
2,500,000,000 Shares of US$0.00002 each 50,000 100.00%
SHARE CAPITAL
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The following is a description of the issued share capital of our Company in issue and to
be issued as fully paid or credited as fully paid prior to and following the completion of the
Global Offering (without taking into account the exercise of the Over-allotment Option):
Issued share capital
As of the Latest Practicable Date:
Number of
Shares Description of Shares
Total
Nominal
Value
Approximate
percentage
of total
share
capital
(US$)
398,950,000 Shares of US$0.00002 each 7,979 71.8%
156,650,000 Series-A Preferred Shares of
US$0.00002 each
3,133 28.2%
555,600,000 Total 11,112 100.0%
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised):
Number of
Shares Description of Shares
Total
Nominal
Value
Approximate
percentage
of total
share
capital
(US$)
555,600,000 Shares in issue as of the date of
this prospectus (including the
50,509,200 Sale Shares)
11,112 82.5%
117,854,800 Shares to be issued pursuant to the
Global Offering
2,357 17.5%
673,454,800 Total 13,469 100.00%
SHARE CAPITAL
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--- page 257 ---
ASSUMPTIONS
The above table assumes that the Global Offering becomes unconditional and the Shares
are issued pursuant to the Global Offering. The above does not take into account any Shares
which may be issued pursuant to the exercise of the Over-allotment Option or any Shares which
may be issued or repurchased by our Company pursuant to the general mandates granted to our
Directors to issue or repurchase Shares as described below.
MINIMUM PUBLIC FLOAT
At least 25% of the total issued share capital of our Company must at all times be held
by the public. The 168,364,000 Offer Shares represent not less than 25% of the issued share
capital of our Company upon Listing.
RANKING
The Shares are ordinary shares in the share capital of our Company and rank equally with
all Shares currently in issue or to be issued and, in particular, will rank in full for all dividends
or other distributions declared, made or paid on the Shares in respect of a record date which
falls after the date of this prospectus.
CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS AND CLASS MEETINGS
ARE REQUIRED
Pursuant to the Companies Act and the terms of our Memorandum and Articles of
Association, our Company may from time to time by ordinary resolution of shareholders
(i) increase its capital; (ii) consolidate and divide its Shares into Shares of larger amount;
(iii) divide its Shares into several classes; (iv) subdivide its Shares into Shares of smaller
amount; and (v) cancel any Shares which have not been taken. In addition, our Company may,
subject to the provisions of the Cayman Islands Law, reduce its capital or capital redemption
reserve by special resolution of shareholders. For details, please see section headed “Summary
of the Constitution of our Company and Cayman Islands Company Law – 2. Articles of
Association – (iii) Alteration of capital” in Appendix III to this prospectus.
Pursuant to the Companies Act and the terms of our Memorandum and Articles of
Association, all or any of the special rights attached to the Share or any class of Shares may
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. For details, please see section headed “Summary of the Constitution of our Company and
Cayman Islands Company Law – 2. Articles of Association – (a)(ii) V ariation of rights of
existing shares or classes of shares” in Appendix III to this prospectus.
SHARE CAPITAL
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Further, our Company will also hold general meetings from time to time as may be
required under the Articles of Association, a summary of which is set out in the section headed
“Summary of the Constitution of our Company and Cayman Islands Company Law” in
Appendix III to this prospectus.
GENERAL MANDATE TO ISSUE AND REPURCHASE SHARES
Subject to the conditions stated in “Structure and Conditions of the Global Offering –
Conditions of the Hong Kong Public Offering”, our Directors have been granted general
unconditional mandates to issue and repurchase our Shares.
For further details of these general mandate, please see section headed “Statutory and
General Information – A. Further Information About our Group – 3. Resolutions in Writing of
the Shareholders of Our Company Passed on April 30, 2025” in Appendix IV to this prospectus.
SHARE CAPITAL
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THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the
Offer Price for such number of Offer Shares which may be purchased (rounded down to the
nearest whole board lot of 400 Shares) with an aggregate amount of approximately US$87.33
million (approximately HK$672.77 million, calculated based on an exchange rate of US$1.00
to HK$7.7579) (the “ Cornerstone Placing ”).
Base on the Offer Price of HK$7.19 per Share, the total number of Shares to be subscribed
by the Cornerstone Investors would be approximately 93,568,800 Offer Shares, representing (i)
approximately 55.57% of the Offer Shares pursuant to the Global Offering and approximately
13.89% of the total issued share capital of the Company immediately following the completion
of the Global Offering (assuming the Over-allotment Option is not exercised); or (ii)
approximately 48.33% of the Offer Shares pursuant to the Global Offering and approximately
13.57% of the total issued share capital of the Company immediately following the completion
of the Global Offering (assuming the Over-allotment Option is fully exercised).
Our Company is of the view that the Cornerstone Placing will help to raise the profile of
our Company and to signify that such investors have confidence in our business and prospect.
Our Company become acquainted with each of the Cornerstone Investors through introduction
by the Overall Coordinators for the purpose of the Global Offering.
The Cornerstone Placing will form part of the International Offering and the Cornerstone
Investors will not subscribe for any Offer Shares under the Global Offering (other than
pursuant to the Cornerstone Investment Agreements). The Offer Shares to be subscribed for by
the Cornerstone Investors will rank pari passu in all respects with the other fully paid Offer
Shares in issue and will be counted towards the public float of our Company under Rule 8.08
of the Listing Rules. Immediately following the completion of the Global Offering, none of the
Cornerstone Investors will become a substantial shareholder of the Company, and the
Cornerstone Investors will not have any Board representation in our Company. Other than a
guaranteed allocation of the relevant Offer Shares at the final Offer price, the Cornerstone
Investors do not have any preferential rights in the Cornerstone Investment Agreements
compared with other public Shareholder. There are no side arrangements or agreements
between our Company and the Cornerstone Investors or any benefit, direct or indirect,
conferred on the Cornerstone Investors by virtue of or in relation to the Global Offering, other
than a guaranteed allocation of the relevant Offer Shares at the final Offer price. There will be
no delayed delivery or deferred settlement of Offer Shares to be subscribed by the Cornerstone
Investors. The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they
have subscribed for before dealings in the Company’s Shares commence on the Stock
Exchange.
CORNERSTONE INVESTORS
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Pursuant to the Administrative Measures for the Overseas Investment of Enterprises ( Ά
) promulgated by the National Development and Reform Commission
and Administrative Measures for Overseas Investment Management ()
promulgated by the MOFCOM (the “ ODI Rules ”), a domestic institution shall undergo
registration procedure for foreign investment in accordance with the provisions of the ODI
Rules, which require the domestic institution to register with relevant authorities prior to its
overseas direct investment and obtain relevant recordation, approval, certificate or permit.
Each of our Cornerstone Investors which requires to complete the overseas direct investment
registration, has completed the overseas direct investment registration with Wuxi Municipal
Development and Reform Commission on April 27, 2025 pursuant to the ODI Rules in relation
to their offshore investments as domestic institutions.
To the best knowledge of our Company, (i) each of the Cornerstone Investors and its
ultimate beneficial owners is an independent third party and is not a connected person of our
Company and its close associate (as defined in the Listing Rules); (ii) none of the Cornerstone
Investors is accustomed to take and has not taken instructions from the Company, Directors,
chief executive, Controlling Shareholders, substantial Shareholders or existing Shareholders or
any of its subsidiaries or their respective close associates in relation to the acquisition,
disposal, voting or other disposition of the Offer Shares; and (iii) none of the subscriptions of
the Offer Shares by the Cornerstone Investors is financed directly or indirectly by our
Company, Directors, chief executive of our Company, Controlling Shareholders, substantial
Shareholders or existing Shareholders, or any of its subsidiaries or their respective close
associates. In addition, to the best knowledge of our Company, each of the Cornerstone
Investors is independent from each other and makes independent investment decisions.
To the best knowledge of the Company and as confirmed by each of the Cornerstone
Investors, (i) each of the Cornerstone Investors’ subscription under the Cornerstone Investment
Agreements would be financed by their own internal resources or the assets managed for its
investors (in the case of Cornerstone Investors which are funds or investment managers) as
their source of funding for the subscription of the Offer Shares; and (ii) all necessary approvals
have been obtained with respect to the Cornerstone Placing, and that no specific approval from
any stock exchange (if relevant) or its shareholders is required for the relevant cornerstone
investment.
The total number of Offer Shares to be subscribed for by the Cornerstone Investors might
be affected by the reallocation of the Offer Shares between the International Offering and the
Hong Kong Public Offering in the event of over-subscription under the Hong Kong Public
Offering. If the total demand for Offer Shares in the Hong Kong Public Offering falls within
the circumstance as set out in the section headed “Structure and Conditions of the Global
Offering – The Hong Kong Public Offering – Reallocation and clawback” in this prospectus,
our Company and the Overall Coordinators have the absolute discretion, but not obliged, to
deduct the number of Offer Shares to be subscribed by the Cornerstone Investors on a pro rata
basis under the Hong Kong Public Offering pursuant to Practice Note 18 of the Listing Rules.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors will
be disclosed in the allotment results announcement to be issued by us on or around May 15,
2025.
CORNERSTONE INVESTORS
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OUR CORNERSTONE INVESTORS
The following information on the Cornerstone Investors was provided to the Company by
the Cornerstone Investors.
Wuxi Zixian
Wuxi Zixian Food Co., Ltd. (ʮ̡)( “ Wuxi Zixian ”) is a limited
liability company established in the PRC, and is principally engaged in food sales, packaging
materials and products sales. Wuxi Zixian is a wholly owned subsidiary of Shanghai Ziyan
Foods Co., Ltd. (ʮ̡)( “ Shanghai Ziyan ”), a PRC-based limited
liability company which became a listed company on the Shanghai Stock Exchange (stock
code: 603057) on September 26, 2022. Shanghai Ziyan, founded in 2000 and is currently
headquartered in Shanghai, mainly focuses on the research and development, production and
the sale of food products in China.
Anji Liangshan
Anji Liangshan Rural Revitalization Equity Investment Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Anji Liangshan ”) is a limited partnership
established under the laws of the PRC and is primarily engaged in equity investment. Its
general partners are (i) Zhaoken Capital Management (Beijing) Co., Ltd. (ኤ༟͉၍ଣ(̏ԯ)
ʮ̡)( “ Zhaoken Capital ”), a private equity fund manager registered under the relevant
PRC laws which holds 0.1% of the partnership interest, and (ii) Hangzhou Senmiao Enterprise
Management Consulting Partnership (Limited Partnership) (ψಌ↿Άุ၍ଣፔ༔ΥྫΆุ
(Υྫ)) (“ Hangzhou Senmiao ”), a limited partnership established under the laws of the
PRC which holds 0.9% of the partnership interest. Hangzhou Senmiao is owed by Guochuang
Zhongding (Shanghai) Equity Investment Management Co., Ltd. ( ਷௴ʕཻ(ɪऎ)ᛆҳ༟၍
ʮ̡)( “ Guochuang Zhongding ”) (holding 10% interest of Hangzhou Senmiao), Mr.
Gu Qi (holding 49.50% interest of Hangzhou Senmiao), and Mr. Zhang Wei (holding 40.50%
interest of Hangzhou Senmiao), while Guochuang Zhongding is ultimately held by independent
third parties. Zhaoken Capital is the sole executive partner of Anji Liangshan and is an indirect
wholly owned subsidiary of China Merchants Group Limited (ʮ̡), which is
ultimately wholly-owned by the State Council of the People’s Republic of China ( ʕശɛ͏΍
ձ਷਷ਕ৫). Anji Liangshan’s largest limited partner is Anji County Guofeng Industrial Fund
Management Co., Ltd. (ʮ̡), a limited liability company
incorporated in the PRC, which holds 45% of the partnership interest and is ultimately wholly
owned by Anji County Finance Bureau. Zhejiang Rural Revitalization Investment Fund Co.,
Ltd (ʮ̡), a limited liability company incorporated in the PRC,
is the second largest limited partner of Anji Liangshan which holds 44% of the partnership
interest and is ultimately wholly owned by Zhejiang Provincial Department of Finance. The
remaining 11% partnership interest are held by 6 limited partners each holding less than 5%
partnership interest of Anji Liangshan.
CORNERSTONE INVESTORS
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CMB International Capital Limited (“ CMBI ”) acts as the Joint Sponsor, the Sponsor
Overall Coordinator and the Overall Coordinator of the Global Offering. CMBI is an indirect
wholly-owned subsidiary of China Merchants Bank Co., Ltd. (ʮ̡), a
company listed on the Shanghai Stock Exchange (stock code: 600036) and the Stock Exchange
(stock code: 3968), which is directly and indirectly owned as to approximately 29% by CMG,
and therefore Anji Liangshan is a connected client of CMBI. We have applied to the Stock
Exchange for, and the Stock Exchange has granted us its consent under paragraph 5(1) of
Appendix F1 to the Listing Rules to permit Anji Liangshan to participate in the Global Offering
as a cornerstone investor subject to certain conditions. For details, please refer to the section
headed “Waivers from Strict Compliance with the Listing Rules – Consent in Relation to
Allocation of Offer Shares to Connected Client of Distributor” in this prospectus.
Action Chain
Action Chain International Limited (“ Action Chain ”) is a business company incorporated
under the laws of the BVI which primarily engaged in investment activities. Action Chain is
a wholly owned subsidiary of Guojun Evergreen Limited, which in turn is ultimately owned by
Mr. Shen Guojun. Mr. Shen Guojun is the founder and chairman of China Yintai Holdings
Company Limited, which is a diversified industrial development and investment group.
Chia Tai
Chia Tai Food Investment Company Limited (ʮ̡)( “ Chia Tai ”) is a
limited liability company incorporated in Hong Kong which is primarily engaged in investment
activities in PRC. Chia Tai is a wholly owned subsidiary of Charoen Pokphand Group
Company Limited (“ CPG”), which is a company incorporated in Thailand and engages in
various sectors such as agricultural and food products, retail and distribution. CPG is a
company with a diverse shareholding structure with more than 80 shareholders, the largest
shareholder being a company holding more than 10% of its shares and the ultimate beneficial
owner of which is Mr. Sumet Jiaravanon. Mr. Sumet Jiaravanon is one of the Honorary
Chairmen of CPG.
Sino Top
Sino Top Trading Limited (ʮ̡)( “ Sino Top ”) is a limited liability
company incorporated in Hong Kong which is primarily engaged in investment activities and
trading business. Sino Top is a wholly owned subsidiary of Huabao Flavours & Fragrances Co.,
Ltd (ʮ̡)( “ Huabao ”) a PRC-based limited liability company which
became a listed company on the Shenzhen Stock Exchange (stock code: 300741) in 2018.
Huabao, founded in 1996, mainly focuses on providing green, nutritious and healthy flavor,
fragrance and food ingredient solutions.
CORNERSTONE INVESTORS
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Wuxi Hexiang
Wuxi Hexiang Food Co., Ltd. (ʮ̡)( “ Wuxi Hexiang ”) is a limited
liability company incorporated in the PRC and is principally engaged in food sales, the
wholesale of water products, import and export of goods as well as general warehousing
services. Wuxi Hexiang is a wholly owned subsidiary of Y antai Tongxiang Food Co., Ltd. ( ๧
ʮ̡)( “ Y antai Tongxiang ”), a PRC-based limited liability company
established under the laws of PRC in 2011. Y antai Tongxiang is mainly engaged in frozen
chicken products processing, frozen beef product processing, and deep processing of processed
foods in China. Mr. Sun Dedong (؇a director and legal representative of Y antai
Tongxiang, is the ultimate beneficial owner of Y antai Tongxiang. Y antai Tongxiang is the one
of our suppliers and the total purchases from Y antai Tongxiang was 0.09%, 2.56% and 3.04%
of our total purchases respectively as of December 31, 2022, 2023 and 2024.
Wuxi Lvlian
Wuxi Lvlian Food Co., Ltd. (ʮ̡)( “ Wuxi Lvlian ”) is a limited
liability company incorporated in the PRC and is principally engaged in food sales and the
wholesale of agricultural products. Wuxi Lvlian is a wholly owned subsidiary of Shandong
Lvlian Food Co., Ltd. (ʮ̡)( “ Shandong Lvlian ”), a PRC-based limited
liability company established under the laws of PRC in 2023 which mainly engages in the food
sales and distributions as well as delivery and transportation services. Ms. Zheng Hongmei ( ቍ
ߕݳa director and general manager of Wuxi Lvlian, is the ultimate beneficial owner of
Shandong Lvlian. Shandong Lvlian is the one of our suppliers and the total purchases from
Shandong Lvlian was nil, 0.19% and 3.12% of our total purchases respectively as of December
31, 2022, 2023 and 2024.
Wuxi Qinyu
Wuxi Qinyu Food Co., Ltd. (ʮ̡)( “ Wuxi Qinyu ”) is a limited
liability company incorporated in the PRC and is principally engaged in food sales, import and
export of goods as well as consultation services. Wuxi Qinyu is a wholly owned subsidiary of
Shanghai Qinyu Food Co., Ltd. (ʮ̡)( “ Shanghai Qinyu ”), a PRC-based
limited liability company which mainly engages in the sales of food, edible agricultural
products as well as arts crafts. Mr. Liu Xiaoqing ( ᄎʃ૶), an executive director and legal
representative of Wuxi Qinyu, is the ultimate beneficial owner of Shanghai Qinyu.
CORNERSTONE INVESTORS
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The table below sets forth details of the Cornerstone Placing:
Based on an Offer Price of HK$7.19 per Share
Cornerstone
Investor
Subscription
amount
Subscription
amount
Number
of Offer
Shares to be
acquired 2
Assuming the
Over-allotment Option
is not exercised
Assuming the
Over-allotment Option
is fully exercised
Approximate
%o ft h e
Offer Shares
Approx.
%o ft h e
total issued
capital of our
Company
immediately
upon the
Global
Offering
Approximate
%o ft h e
Offer Shares
Approx.
%o ft h e
total issued
capital of our
Company
immediately
upon the
Global
Offering
(US$) (HK$) 1
Wuxi Zixian 35,000,000 268,815,496 37,387,200 22.21% 5.55% 19.31% 5.43%
Anji Liangshan 13,000,000 99,845,756 13,886,400 8.25% 2.06% 7.17% 2.01%
Action Chain 13,000,000 100,852,700 14,026,800 8.33% 2.08% 7.24% 2.04%
Chia Tai 7,089,547 55,000,000 7,649,200 4.54% 1.14% 3.95% 1.11%
Sino Top 6,240,494 48,413,125 6,733,200 4.00% 1.00% 3.48% 0.98%
Wuxi Hexiang 5,000,000 38,402,214 5,340,800 3.17% 0.79% 2.76% 0.77%
Wuxi Lvlian 5,000,000 38,402,214 5,340,800 3.17% 0.79% 2.76% 0.77%
Wuxi Qinyu 3,000,000 23,041,328 3,204,400 1.90% 0.48% 1.66% 0.46%
Total 87,330,041 672,772,832 93,568,800 55.57% 13.89% 48.33% 13.57%
Notes:
(1) Calculated based on the exchange rate as set out in the section headed “Information about this Prospectus and
the Global Offering.”
(2) Subject to the rounding down to the nearest whole board lot of 400 Shares.
CORNERSTONE INVESTORS
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CLOSING CONDITIONS
The obligation of the Cornerstone Investors to acquire the Offer Shares under the
Cornerstone Investment Agreements is subject to, among other things, the following closing
conditions:
(a) the underwriting agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in these underwriting agreements and neither of the aforesaid
underwriting agreement having been terminated;
(b) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering) in connection with the Global Offering;
(c) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the Shares (including the Shares under the
Cornerstone Placing) as well as other applicable waivers and approvals and such
approval, permission or waiver having not been revoked prior to the commencement
of dealings in the Shares on the Main Board of the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or the Cornerstone Investment Agreement, and there shall be no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions; and
(e) the respective representations, warranties, acknowledgements, undertakings and
confirmations of the Cornerstone Investor under the respective Cornerstone
Investment Agreements are accurate and true in all respects and not misleading and
that there is no breach of the Cornerstone Investment Agreement on the part of the
Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each Cornerstone Investor has agreed that it will not, and will cause its affiliates not to,
whether directly or indirectly, at any time during the period of six months from (and inclusive
of) the Listing Date (the “ Lock-up Period ”), dispose of, in any way, any of the Offer Shares
or any interest in any company or entity holding such Offer Shares that they have purchased
pursuant to the relevant Cornerstone Investment Agreement, save for certain limited
circumstances, such as transfers to any of its wholly-owned subsidiaries who will be bound by
the same obligations of such Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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Y ou should read the following discussion and analysis of our financial conditions
and results of operations in conjunction with our consolidated financial statements as
of and for each of the years ended December 31, 2022, 2023 and 2024, and the
accompanying notes included in the Accountants’ Report set out in Appendix I to this
prospectus. The consolidated financial statements have been prepared in accordance
with IFRSs. Potential investors should read the Accountants’ Report set out in
Appendix I to this prospectus in its entirety and not rely merely on the information
contained in this section. The following discussion and analysis contain forward-
looking statements that involve risks and uncertainties. For additional information
regarding these risks and uncertainties, see “Risk Factors.”
OVERVIEW
We are a well-known operator of casual Chinese restaurants in Mainland China. We create
customer value by providing fusion cuisine at accessible price points and decoration inspired
by Chinese traditional culture. With this vision, we opened our first Green Tea restaurant in
2008 by the beautiful West Lake in Hangzhou, and have built a nationwide restaurant network
consisting of 493 restaurants and covering 21 provinces, four municipalities and two
autonomous regions in the PRC, as well as Hong Kong SAR as of the Latest Practicable Date.
We ranked third in terms of number of restaurants and fourth in terms of revenue among casual
Chinese restaurant brands in Mainland China in 2024, according to the CIC Report. According
to the CIC report, casual Chinese cuisine restaurant market is highly fragmented due to a large
number of market participants, and we had a market share of 0.7% in 2024. In addition,
according to the CIC report, casual Chinese cuisine restaurants have an average spending per
guest in the range of RMB50 to RMB100.
Our restaurant network experienced substantial growth during the Track Record Period.
Our total restaurants increased from 276 as of December 31, 2022 to 465 as of December 31,
2024, representing a CAGR of 29.8%. The number of our restaurants in operation further
increased to 493 as of the Latest Practicable Date. During the Track Record Period, we
primarily focused on establishing our market presence in three key regions, namely Eastern
China, Guangdong province and Northern China, which are the major economic centers of
Mainland China. We took advantage of our brand reputation in these regions and opened new
restaurants in districts with high pedestrian traffic. We also opened a number of restaurants in
other regions during the Track Record Period as part of our effort to understand the market
conditions and customer preferences in such regions. We expect such effort will serve as a
foundation for our future expansion in these new markets.
Our revenue increased by 51.1% from RMB2,375.5 million in 2022 to RMB3,589.2
million in 2023, primarily attributable to (i) the strong recovery of our customer traffic due to
a significant surge in consumer spending in the first half of 2023 following the easing of
government-imposed restrictions related to COVID-19 in December 2022 and (ii) an increase
in the number of our restaurants in operation due to our restaurant expansion. Our revenue also
FINANCIAL INFORMATION
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increased by 6.9% from RMB3,589.2 million in 2023 to RMB3,838.2 million in 2024,
primarily attributable to an increase in the number of our restaurants in operation. In addition,
as a result of our successful operation, we recorded net cash generated from operating activities
of RMB347.6 million, RMB793.2 million and RMB734.0 million in 2022, 2023 and 2024,
respectively.
FACTORS AFFECTING OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
We believe the most significant factors that directly or indirectly affect our financial
performance and results of operations include:
 number of restaurants in operation and expansion of our restaurant network;
 customer traffic and average spending per guest;
 same store sales;
 food supply prices;
 staff costs; and
 depreciation of right-of-use assets and other rentals and related expenses.
Number of restaurants in operation and expansion of our restaurant network
Our revenue is largely affected by the number of our restaurants in operation, and our
future revenue growth depends on our ability to open new restaurants and expand our
restaurant network. Set forth below is a summary of the changes in the number of restaurants
in our network:
For the year ended December 31,
2022 2023 2024
Number of restaurants at
the beginning of the period 236 276 360
Number of new restaurants opened
during the period 47 89 120
Number of restaurants closed during
the period (7) (5) (15)
Number of restaurants at the end
of the period 276 360 465 (1)
Note:
(1) Including restaurants opened under the Mang Gang Le brand.
FINANCIAL INFORMATION
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During the Track Record Period, we primarily focused on establishing our market
presence in three key regions, namely Eastern China, Guangdong province and Northern China,
which are the major economic centers of Mainland China. We took advantage of our brand
reputation in these regions and opened new restaurants in districts with high pedestrian traffic.
The table below sets forth the breakdown of the number of our restaurants by geographical
regions:
As of December 31,
2022 2023 2024
Eastern China (1) 84 115 155
Guangdong province 63 72 83
Northern China
(2) 55 56 58
Others (3) 74 117 169
Total 276 360 465
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
Our revenue increased in 2023 as compared to that in 2022, primarily attributable to (i)
the strong recovery of our customer traffic due to a significant surge in consumer spending in
the first half of 2023 following the easing of government-imposed restrictions related to
COVID-19 in December 2022 and (ii) an increase in the number of our restaurants in operation
due to our restaurant expansion. Our overall revenue increased in 2024 as compared with that
in 2023, primarily attributable to an increase in the number of restaurants in operation due to
our restaurant expansion effort, partially offset by a decrease in our overall same store sales
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment. According to CIC, the industry in general
also showed the same trend. The table below sets forth the breakdown of our revenue generated
from restaurant operation and delivery service by geographic regions for the periods indicated:
For the year ended December 31,
2022 2023 2024
Revenue (in thousands of RMB):
Eastern China (1) 710,137 1,107,548 1,265,491
Guangdong province 621,811 814,699 762,035
Northern China
(2) 517,146 708,494 626,798
Others 524,539 946,401 1,167,906
Total 2,373,633 3,577,142 3,822,230
FINANCIAL INFORMATION
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For the year ended December 31,
2022 2023 2023 2024
Revenue growth (%):
Eastern China (1) 56.0 14.3
Guangdong province 31.0 (6.5)
Northern China
(2) 37.0 (11.5)
Other (3) 80.4 23.4
Total 50.7 6.9
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
We opened 120 new restaurants in 2024 and plan to open 150, 200 and 213 new
restaurants in 2025, 2026 and 2027, respectively.
Customer traffic and average spending per guest
Our business is significantly affected by changes in our customer traffic and average
spending per guest. The customer traffic and average spending per guest are affected by various
factors, including macroeconomic factors, location of the restaurants, our menu mix and
pricing, changes in discretionary spending patterns, as well as different spending and dine-out
patterns for customers in different geographical locations. The following table sets forth our
customer traffic and average spending per guest during the periods indicated:
For the years ended December 31,
2022 2023 2024
Total guests served (thousands) (1)
Eastern China (2) 11,363 17,594 22,016
Guangdong province 9,804 13,184 14,355
Northern China
(3) 8,261 11,469 10,937
Other (4) 8,358 15,675 20,763
Overall 37,786 57,922 68,071
FINANCIAL INFORMATION
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For the years ended December 31,
2022 2023 2024
Average spending per guest (RMB) (5)
Eastern China (2) 62.6 63.0 57.5
Guangdong province 63.5 61.8 53.1
Northern China
(3) 62.7 61.8 57.3
Other (4) 62.8 60.4 56.2
Overall 62.9 61.8 56.2
Notes:
(1) Includes dine-in guests and customers who order take-outs for the period in the same region. We count
one delivery order as one guest.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Including Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(5) Calculated by dividing revenue generated from restaurant operation and delivery service for the period
by total guests served, including both dine-in customers and customers who order take-outs, for the
period in the same region. For further details on how we calculate total guests served, see note (1).
In 2023, as the Chinese government lifted the “zero-COVID” policy in December 2022
and the performance of our restaurants showed a strong recovery due to a significant surge in
consumer spending in the first half of 2023 following the COVID-19 pandemic, we recorded
a strong recovery in total guests served in all regions as compared with that in 2022. On the
other hand, our overall average spending per guest decreased in 2023, primarily due to a
general change in consumer behavior to reduce expenses and frequencies of dining out given
the economic environment. According to CIC, such change is in line with the trend in our
industry.
Our overall average spending per guest decreased in 2024 as compared with that in 2023.
Such decrease was primarily due to a general change in consumer behavior to reduce expenses
and frequencies of dining out given the current economic environment. According to CIC, the
industry in general also showed the same trend. On the other hand, our overall total guests
served increased from 57.9 million in 2023 to 68.1 million in 2024, primarily attributable to
the increase in the number of our restaurants in operation.
FINANCIAL INFORMATION
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Same store sales
Our revenue and profitability are affected in part by our ability to successfully grow
revenue from existing restaurants. Same store sales provide a year-to-year comparison of
restaurant performance because it excludes the increases in revenue due to the opening of new
restaurants by comparing the operational and financial performance of those restaurants that
have been in operation.
The table below sets forth our same-store sales during the periods indicated.
For the year ended December 31,
2022 2023 2023 2024
Number of same stores (1)
Eastern China (2) 45 61
Guangdong province 44 43
Northern China
(3) 46 45
Other (4) 40 48
Overall 175 197
Same store sales
(in thousands of RMB) (5)
Eastern China (2) 446,473 563,046 676,972 601,465
Guangdong province 447,320 524,034 516,138 451,301
Northern China
(3) 455,595 599,169 571,576 532,779
Other (4) 361,778 473,505 504,633 449,498
Overall 1,711,166 2,159,754 2,269,319 2,035,043
Same-store sales
growth (%)
Eastern China (2) 26.1% (11.2%)
Guangdong province 17.1% (12.6%)
Northern China
(3) 31.5% (6.8%)
Other (4) 30.9% (10.9%)
Overall 26.2% (10.3%)
FINANCIAL INFORMATION
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For the year ended December 31,
2022 2023 2023 2024
Average same store sales
per restaurant (in
thousands
of RMB)
Eastern China
(2) 9,922 12,512 11,098 9,860
Guangdong province 10,166 11,910 12,003 10,495
Northern China
(3) 9,904 13,025 12,702 11,840
Other (4) 9,044 11,838 10,513 9,365
Overall 9,778 12,341 11,519 10,330
Notes:
(1) Consisting of restaurants that were open for more than 300 days during the years under comparison and
had the same number of tables during the years under comparison.
(2) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(3) Consisting of Beijing, Hebei and Tianjin.
(4) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
(5) Refers to the aggregate revenue generated from restaurant operation and delivery service at our same
stores for the period indicated.
Explanation for changes in same store sales
In 2023, the same store sales in all three key regions increased as compared with that in
2022, as a result of the strong recovery of our customer traffic due to a significant surge in
consumer spending in the first half of 2023 following the easing of government-imposed
restrictions related to COVID-19 in December 2022. According to CIC, the strong performance
in the catering industry in the first half of 2023 is primarily due to such significant surge in
spending.
In 2024, we recorded decreases in same store sales in all regions. Such decreases were
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment, which led to decreases in our table
turnover rate and average spending per guest in all regions. According to CIC, we
outperformed the majority of our industry peers in terms same store sales growth in 2024.
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Food supply prices
Food supply prices have a direct impact on our cost of raw materials and consumables
used, which in turn affects our profitability. Key supplies we use include semi-processed food
products, bakery products and food ingredients, such as vegetables and fruits. We have devoted
substantial efforts to secure sufficient supply of these supplies that meet our quality standards
and at competitive prices. See “Business – Procurement” for further details. However, despite
the various initiatives we have undertaken, the price and supply of these products and
ingredients are nonetheless subject to a number of factors that are beyond our control,
including availability and demand. See “Business – Procurement – Price Management.”
According to the National Bureau of Statistic of China, the PRC food price index, its food
inflation indicator, increased by 15.5% from January 2019 to December 2023.
In 2022, 2023 and 2024, our raw materials and consumables used amounted to RMB862.3
million, RMB1,205.2 million and RMB1,192.9 million, respectively, representing 36.3%,
33.6% and 31.1% of our revenue for the respective periods. Throughout the Track Record
Period, raw materials and consumables used as a percentage of our revenue continued to
decrease despite inflation and increasing food prices in Mainland China. This is primarily a
result of (i) improved economies of scale, (ii) our success in procurement cost control, (iii) our
inventory control efforts and (iv) our ability to optimize our menu.
Going forward, the food price index in Mainland China is expected to moderately
increase, subject to economic growth and consumption environment, according to CIC. In
addition, we expect our raw materials and consumables used to increase in the future as we
further expand our restaurant network. As a result, we plan to continue our procurement cost
control efforts for our restaurants by optimizing our supply chain arrangements. For example,
we have established a direct procurement center which will enable us to purchase fresh
ingredients at competitive prices from local suppliers and control our procurement cost and
monitor our inventory level. The establishment of our centralized food processing facility and
continuous collaboration with third-party food processing companies also enable us to
standardize our food preparation process at our restaurants and increase operating efficiency to
minimize our operational costs. We also plan to continue to adjust our menu and offer new
menu items to offset the effect of inflation and rising food prices so as to maintain our
profitability. We have conducted sensitivity analysis of the impact on our results of operations
during the Track Record Period from hypothetical fluctuations in the food ingredient prices.
See “Business – Procurement – Price Management” for more information.
Staff costs
Restaurant operations are highly service-oriented, and therefore our success, to a
considerable extent, depends upon our ability to attract, motivate and retain a sufficient number
of qualified employees, including restaurant managers and staff. Staff costs also have a direct
impact on our profitability. As employee turnover rate tend to be higher in the catering industry,
we offer competitive wages, career development opportunities and other benefits to our
restaurant employees to manage employee turnover.
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In 2022, 2023 and 2024, our staff costs amounted to RMB626.4 million, RMB911.0
million and RMB989.0 million, representing 26.4%, 25.4% and 25.8% of our revenue,
respectively. Our staff costs as a percentage of our revenue decreased from 26.4% in 2022 to
25.4% in 2023, primarily due to an increase in our restaurant level performance. Our staff costs
as a percentage of our revenue increased from 25.4% in 2023 to 25.8% in 2024, primarily due
to a decrease in our restaurant level performance.
Going forward, the salary level in Mainland China and, in particular, in the catering
industry is expected to further increase. We believe the resulting upward pressure on our staff
costs as a percentage of total revenue could be mitigated by (i) further optimization of the
restaurant level staffing and (ii) increasing utilization of food processing companies and further
standardization at our restaurants. We also endeavor to enhance our operation efficiency to
minimize the impact of the rising salary level in Mainland China.
Depreciation of Right-of-use Assets and Other Rentals and Related Expenses
We lease all of the properties on which we operate our restaurants and our headquarters.
The lease arrangements for our restaurants generally last for five to 10 years with an option to
renew. Our leases typically include a rent-free period of up to three months to facilitate the
decoration and renovation of the premises and ramp-up of new restaurants. As of the Latest
Practicable Date, we leased 812 properties with an aggregate GFA of approximately 248,427.9
square meters, which are mainly used as restaurants.
The following table sets forth the lease profile of the restaurants in our restaurant network
that are in operation as of the Latest Practicable Date:
Lease term
Number of
restaurants Total GFA Average GFA
(#) (square meter) (square meter)
Eastern China (1) One year or less 2 802 401
Two years – – –
Three to five
years
3 980 327
Six to 10 years 116 42,324 365
11 to 15 years 42 18,704 445
16 to 20 years 6 4,226 704
21 to 31 years 2 968 484
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Lease term
Number of
restaurants Total GFA Average GFA
(#) (square meter) (square meter)
Guangdong province One year or less – – –
Two years 2 762 381
Three to five
years
5 2,310 462
Six to 10 years 58 26,659 460
11 to 15 years 20 12,184 609
16 to 20 years – – –
21 to 31 years – – –
Northern China
(2) One year or less 2 1,460 730
Two years 3 2,298 766
Three to five
years
6 2,725 454
Six to 10 years 36 15,621 434
11 to 15 years 13 7,018 540
16 to 20 years 1 498 498
21 to 31 years – – –
Other
(3) One year and less – – –
Two years – – –
Three to five
years
8 2,251 281
Six to 10 years 143 54,181 379
11 to 15 years 24 11,198 467
16 to 20 years 1 800 800
21 to 31 years – – –
Overall 493 207,971 422
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
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In 2022, 2023 and 2024, our depreciation of right-of-use assets were RMB161.0 million,
RMB177.0 million and RMB202.9 million, respectively, representing 6.8%, 4.9% and 5.3% of
our revenue in the respective period, and our other rentals and related expenses were RMB56.6
million, RMB80.3 million and RMB76.1 million, respectively, representing 2.4%, 2.2% and
2.0% of our revenue in the respective periods. Our depreciation of right-of-use assets as a
percentage of our revenue decreased from 6.8% in 2022 to 4.9% in 2023, primarily attributable
to the strong recovery of our restaurant level performance in 2023. Our other rentals and
related expenses as a percentage of our revenue decreased from 2.4% in 2022 to 2.2% in 2023,
due to an increase in our restaurant level performance. Our depreciation of right-of-use assets
as a percentage of our revenue increased from 4.9% in 2023 to 5.3% in 2024, mainly
attributable to a decrease in our restaurant level performance. Our other rentals and related
expenses as a percentage of our revenue decreased from 2.2% in 2023 to 2.0% in 2024.
Going forward, we expect the rent for commercial real estate to further rise in Mainland
China, particularly in the larger and more developed cities where a majority of our restaurants
are located. As a result, we plan to take initiatives including (i) optimizing our location
selection procedures and (ii) leveraging our strong brand recognition to negotiate with
landlords and control our rental expenses and maintain our profitability. In addition, as we plan
to continue our effort in expanding into lower-tier cities, where rent for commercial real estate
is lower, we expect to incur lower rental expenses at these new locations.
IMPACT OF COVID-19
In 2022, in an effort to control the COVID-19 pandemic, the PRC government placed
significant restrictions on travel within Mainland China, implemented mandatory quarantine
and closed certain businesses, work places and facilities, and governments outside of Mainland
China have halted or sharply curtailed the movement of people, goods and services to and from
Mainland China.
Due to the regional outbreak of COVID-19 in various parts of Mainland China since
January 2022, we temporarily suspended the operation of a total of 208 restaurants across
Mainland China for one to 145 days in 2022 and have reopened all of these restaurants as of
the Latest Practicable Date.
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The table below sets forth the information of restaurants that suspended operations in
2022 by geographical regions:
Eastern
China (1)
Guangdong
province
Northern
China (2) Other (3) Total
Number of restaurants
closed for:
– 1 day to 15 days 18 11 2 9 40
– 16 days to 30 days 7 10 – 12 29
– 31 days to 60 days 7 28 25 18 78
– 61 days to 90 days 1 6 23 18 48
– 91 days to 145 days 5–53 13
Total 38 55 55 60 208
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan and Hainan.
The Chinese government phased out the “zero-COVID” policy in December 2022 and
there were no restaurants which suspended operation in 2023 due to the COVID-19 pandemic.
We slowed down the pace of restaurant expansion in 2022 due to the regional outbreaks
of COVID-19 and opened 47 new restaurants in 2022. We resumed our restaurant expansion
plan and opened 89 and 120 new restaurants in 2023 and 2024, respectively. We expect to
continue our restaurant expansion plan and open 150, 200 and 213 new restaurants in 2025,
2026 and 2027, respectively. See “Business – Expansion Plan and Management” for further
details.
We adopted certain hygiene and precautionary measures in accordance with the applicable
regulations implemented in relation to the pandemic. Meanwhile, our Directors monitored the
situation on a daily basis during the COVID-19 pandemic to ensure the sustainability of our
business and we adjusted the allocation of internal resources and strategies to ensure the
sustainability of our business. We implemented a series of measures such as (i) adopting a shift
system for our restaurant staff according to the customer traffic for each of our restaurants to
save staff costs while retaining our staff; (ii) negotiating with our landlords to obtain more
favorable terms including longer rent free period and lower variable rent payment; (iii)
implementing more stringent cost controls in areas such as utilities and consumables; (iv)
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adjusting our restaurant expansion strategy; (v) suspending the distribution of any
discretionary bonus for all employees, as well as the Directors; and (vi) obtaining short-term
bank loans, which have been fully repaid as of the Latest Practicable Date, to fund our working
capital.
We enjoyed rent concession granted by certain landlords due to the COVID-19 pandemic.
In 2022, we recognized income on COVID-19 rent concessions of RMB10.2 million.
We proactively communicated with our suppliers to ensure the stable supplies in raw
materials and consumables during the COVID-19 pandemic. As the disruption of supplies in
raw materials and labor overlapped with the suspension of certain of our restaurants’ operations
during the COVID-19 pandemic, except for such suspension, we did not encounter any material
disruptions in our supply chain that affected our operations. See “Summary – Impact of the
COVID-19 Outbreak” for further details.
As the impact of the COVID-19 had subsided, we do not expect the COVID-19 pandemic
to have further impact on our operations in the future.
The table below sets forth our revenue generated from restaurant operation and delivery
service and same store sales by geographical regions during the periods indicated:
For the year ended December 31,
2022 2023 2024
Revenue (RMB’000)
Eastern China (1) 710,137 1,107,548 1,265,491
Guangdong province 621,811 814,699 762,035
Northern China
(2) 517,146 708,494 626,798
Other (3) 524,539 946,401 1,167,906
Overall 2,373,633 3,577,142 3,822,230
For the year ended December 31,
2022 2023 2023 2024
Revenue growth (%)
Eastern China (1) 56.0 14.3
Guangdong province 31.0 (6.5)
Northern China
(2) 37.0 (11.5)
Other (3) 80.4 23.4
Overall 50.7 6.9
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For the year ended December 31,
2022 2023 2023 2024
Number of same stores (4)
Eastern China (1) 45 61
Guangdong province 44 43
Northern China
(2) 44 45
Other (3) 40 48
Overall 175 197
For the year ended December 31,
2022 2023 2023 2024
Same store sales
(RMB’000)(5)
Eastern China (1) 446,473 563,046 676,972 601,465
Guangdong province 447,320 524,034 516,138 451,301
Northern China
(2) 455,595 599,169 571,576 532,779
Other (3) 361,778 473,505 504,633 449,498
Overall 1,711,166 2,159,754 2,269,319 2,035,043
For the year ended December 31,
2022 2023 2023 2024
Same store sales
growth (%)
Eastern China (1) 26.1% (11.2%)
Guangdong province 17.1% (12.6%)
Northern China
(2) 31.5% (6.8%)
Other (3) 30.9% (10.9%)
Overall 26.2% (10.3%)
Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu,
Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong
SAR.
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(4) Consisting of restaurants that were open for more than 300 days during the years under comparison and
had the same number of tables during the years under comparison.
(5) Refers to the aggregate revenue generated from restaurant operation and delivery service at our same
stores for the period indicated.
Our overall revenue from restaurant operations and delivery service further increased by
50.7% from RMB2,373.6 million in 2022 to RMB3,577.1 million in 2023, primarily
attributable to (i) the strong recovery of our customer traffic due to a significant surge in
consumer spending in the first half of 2023 following the easing of government-imposed
restrictions related to COVID-19 in December 2022 and (ii) an increase in the number of our
restaurants in operation from 276 as of the end of 2022 to 360 as of the end of 2023 due to our
restaurant expansion. Our overall revenue from restaurant operations and delivery service
increased by 6.9% from RMB3,577.1 million in 2023 to RMB3,822.2 million in 2024,
primarily attributable to the increase in the number of our restaurants in operation from 360 as
of the end of 2023 to 465 as of the end of 2024, partially offset by a decrease in our overall
restaurant level performance in 2024. Such decrease was primarily due to a general change in
consumer behavior to reduce expenses and frequencies of dining out given the current
economic environment. According to CIC, the industry in general also showed the same trend.
Starting from the beginning of 2023, our customer traffic recovered and we recorded
increases in same store sales in all regions in 2023 as compared with that in 2022, as a result
of the easing of the COVID-19 pandemic in Mainland China since the beginning of 2023 and
the relaxation of government-imposed restrictive measures related to COVID-19 in December
2022. In 2024, we recorded decreases in same store sales in all regions. Such decreases were
primarily due to a general change in consumer behavior to reduce expenses and frequencies of
dining out given the current economic environment, which led to decreases in our table
turnover rate and average spending per guest in all regions.
The table below sets forth our table turnover rate by geographical regions during the
periods indicated:
Y ear ended December 31,
2022 2023 2024
Table turnover rate (time/day)
Eastern China 2.71 3.11 2.82
Guangdong province 3.06 3.37 2.93
Northern China 2.78 3.52 3.38
Other 2.72 3.28 3.04
Overall 2.81 3.30 3.00
Despite the sudden increase in cases of COVID-19 in January 2023 after the Chinese
government eased the “zero-COVID” policy in December 2022 which had a short-term impact
on our business, our customer traffic rebounded and our overall table turnover rate increased
to 3.30 in 2023 as compared to 2.81 in 2022 as the pandemic has generally been controlled and
the government eased the relevant restrictive measures related to COVID-19, and the
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performance of our restaurants showed a strong recovery due to a significant surge in consumer
spending in the first half of 2023. Our overall turnover rate in 2023 has also generally returned
to pre-pandemic level of 3.34 in 2019. However, due to a general change in consumer behavior
to reduce expenses and frequencies of dining out given the current economic environment, our
overall table turnover rate decreased from 3.30 in 2023 to 3.00 in 2024.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Some of our accounting policies require us to apply estimates and assumptions as well as
complex judgments relating to accounting items. The estimates and assumptions we use and the
judgments we make in applying our accounting policies have a significant impact on our
financial position and results of operations. Our management continually evaluates such
estimates, assumptions and judgments based on past experiences and other factors, including
industry practices and expectations of future events that are believed to be reasonable under the
circumstances. There has not been any material deviation between our management’s estimates
or assumptions and actual results, and we have not made any material changes to these
estimates or assumptions during the Track Record Period. We do not expect any material
changes in these estimates and assumptions in the foreseeable future.
Set forth below are discussions of the accounting policies that we believe are of critical
importance to us or involve the most significant estimates, assumptions and judgments used in
the preparation of our financial statements. Other material accounting policies, estimates,
assumptions and judgments, which are important for understanding our financial condition and
results of operations, are set forth in detail in Notes 2 and 3 to the Accountants’ Report in
Appendix I to this prospectus.
Revenue and other income
We classify income as revenue when it arises from the sales of goods or the provision of
services. Further details of our revenue and other income recognition policies are as follows:
(i) Revenue from contracts with customers
We principally generate revenue from restaurant operations. Revenue excludes value
added tax or other sales taxes and is after deduction of other sales taxes or any trade discounts.
For restaurant operations for which the control of services is transferred at a point in time,
revenue is recognized when the related services have been rendered to customers.
For sales of goods for which the control of goods is transferred at a point in time, revenue
is recognised when the goods are delivered and accepted by the customers.
Revenue for rendering of other services is recognized over time by reference to the
progress towards complete satisfaction of the relevant performance obligation as the customer
simultaneously receives the benefits provided by our performance as we perform.
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(ii) Interest income
Interest income is recognized as it accrues using the effective interest method.
(iii) Government grants
We recognize government grants in the statement of financial position initially when there
is reasonable assurance that they will be received and that we will comply with the conditions
attaching to them. Grants that compensate us for expenses incurred are recognized as income
in profit or loss on a systematic basis in the same periods in which the expenses are incurred.
Grants that compensate us for the cost of an asset are initially recognized as deferred income
at fair value and then recognized in profit or loss as other income on a systematic basis over
the useful life of the asset.
Leased assets
At inception of a contract, we assess whether the 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. Control is conveyed where
the customer has both the right to direct the use of the identified asset and to obtain
substantially all of the economic benefits from that use.
As a lessee
Where the contract contains lease component(s) and non-lease component(s), we have
elected not to separate non-lease components and accounts for each lease component and any
associated non-lease components as a single lease component for all leases.
At the lease commencement date, we recognize a right-of-use asset and a lease liability,
except for short-term leases that have a lease term of 12 months or less and leases of low-value
assets which, for us are primarily apartments and kitchen equipment. When we enter into a
lease in respect of a low-value asset, we decide whether to capitalise the lease on a
lease-by-lease basis. The lease payments associated with those leases which are not capitalized
are recognized as an expense on a systematic basis over the lease term.
Where the lease is capitalized, the lease liability is initially recognized at the present
value of the lease payments payable over the lease term, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, using a relevant incremental
borrowing rate. After initial recognition, the lease liability is measured at amortized cost and
interest expense is calculated using the effective interest method. V ariable lease payments that
do not depend on an index or rate are not included in the measurement of the lease liability and
hence are charged to profit or loss in the accounting period in which they are incurred.
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The right-of-use asset recognized when a lease is capitalized is initially measured at cost,
which comprises the initial amount of the lease liability plus any lease payments made at or
before the commencement date, and any initial direct costs incurred. Where applicable, the cost
of the right-of-use assets also includes an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, discounted
to their present value, less any lease incentives received. The right-of-use asset is subsequently
stated at cost less accumulated depreciation and impairment losses (see Note 2(h)(ii) set forth
in the Accountants’ Report set out in Appendix I to this prospectus).
Refundable rental deposits are accounted for separately from the right-of-use assets in
accordance with the accounting policy applicable to investments in debt securities carried at
amortized cost (see Note 2(d) set forth in the Accountants’ Report set out in Appendix I to this
prospectus). Any excess of the nominal value over the initial fair value of the deposits is
accounted for as additional lease payments made and is included in the cost of right-of-use
assets.
The lease liability is remeasured when there is a change in future lease payments arising
from a change in an index or rate, or there is a change in our estimate of the amount expected
to be payable under a residual value guarantee, or there is a change arising from the
reassessment of whether we will be reasonably certain to exercise a purchase, extension or
termination option. When the lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or
loss if the carrying amount of the right-of-use asset has been reduced to zero.
The lease liability is also remeasured when there is a lease modification, which means a
change in the scope of a lease or the consideration for a lease that is not originally provided
for in the lease contract, if such modification is not accounted for as a separate lease. In this
case, the lease liability is remeasured based on the revised lease payments and lease term using
a revised discount rate at the effective date of the modification. The only exceptions are rent
concessions that occurred as a direct consequence of the COVID-19 pandemic and met the
conditions set out in paragraph 46B of IFRS 16 Leases . In such cases, we have taken advantage
of the practical expedient not to assess whether the rent concessions are lease modifications,
and recognized the change in consideration as negative variable lease payments in profit or loss
in the period in which the event or condition that triggers the rent concessions occurred.
In the consolidated statement of financial position, the current portion of long-term lease
liabilities is determined as the present value of contractual payments that are due to be settled
within twelve months after the reporting period.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses (see Note 2(h)(ii) set forth in the Accountants’ Report set out in Appendix
I to this prospectus).
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If significant parts of an item of property, plant and equipment have different useful lives,
then they are accounted for as separate items (major components).
Any gain or loss on disposal of an item of property, plant and equipment is recognized
in profit or loss.
Depreciation is calculated to write-off the cost of items of property, plant and equipment,
less their estimated residual value, if any, using the straight-line method over their estimated
useful lives, and is generally recognized in profit or loss.
The estimated useful lives are as follows:
– Leasehold improvements 5-30 years, or
lease term,
which is
shorter
– Kitchen equipment 5 years
– Furniture and fixture 3-5 years
– Electronic equipment and others 3-5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date
and adjusted if appropriate.
Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies
of companies in our Group at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the
functional currency at the exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign currency are translated into the functional
currency at the exchange rate when the fair value was determined. Non-monetary assets and
liabilities that are measured based on historical cost in a foreign currency are translated at the
exchange rate at the date of the transaction. Foreign currency differences are generally
recognized in profit or loss.
The assets and liabilities of foreign operations, including goodwill and fair value
adjustments arising on acquisition, are translated into RMB at the exchange rates at the
reporting date. The income and expenses of foreign operations are translated into RMB at the
exchange rates at the dates of the transactions.
Foreign currency differences are recognized in other comprehensive income and
accumulated in the exchange reserve, except to the extent that the translation difference is
allocated to non-controlling interests.
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When a foreign operation is disposed of in its entirety or partially such that control,
significant influence or joint control is lost, the cumulative amount in the exchange reserve
related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. On disposal of a subsidiary that includes a foreign operation, the cumulative amount
of the exchange differences relating to that foreign operation that have been attributed to the
non-controlling interests shall be derecognized, but shall not be reclassified to profit or loss.
If we dispose of part of its interest in a subsidiary but retains control, then the relevant
proportion of the cumulative amount is reattributed to non-controlling interests. When we
dispose of only part of an associate or joint venture while retaining significant influence or
joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
Other comprehensive income which may not be reclassified to profit or loss during the
Track Record Period represents the exchange differences on translation of financial statements
of our Company from our Company’s functional currency, U.S. dollars, to the presentation
currency, Renminbi. Since our Company itself does not constitute a foreign operation under
International Accounting Standards (“ IAS”) 21, the exchange differences arising therefrom
will not be classified to profit or loss subsequently.
PRINCIPAL INCOME STATEMENT COMPONENTS
The following table sets forth a summary, for the periods indicated, of our consolidated
results of operations. Each item has also been expressed as a percentage of our revenue.
Y ear Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Revenue 2,375,453 100.0 3,589,178 100.0 3,838,202 100.0
Other revenue 31,081 1.3 39,195 1.1 31,957 0.8
Raw materials and
consumables used (862,316) (36.3) (1,205,219) (33.6) (1,192,902) (31.1)
Staff costs (626,397) (26.4) (911,028) (25.4) (989,008) (25.8)
Depreciation of right-of-use
assets (161,048) (6.8) (177,036) (4.9) (202,868) (5.3)
Other rentals and related
expenses (56,611) (2.4) (80,294) (2.2) (76,064) (2.0)
Depreciation and
amortization of
other assets (163,641) (6.9) (192,947) (5.4) (217,875) (5.7)
Utilities expenses (90,049) (3.8) (123,562) (3.5) (141,251) (3.7)
Delivery service expenses (61,187) (2.6) (82,788) (2.3) (120,972) (3.1)
Other expenses (308,980) (13.0) (420,950) (11.7) (467,408) (12.1)
Other net income/(losses) 8,413 0.4 (3,919) (0.1) 2,153 0.1
Financial costs (41,541) (1.7) (42,657) (1.2) (45,309) (1.2)
FINANCIAL INFORMATION
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Y ear Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Profit before taxation 43,177 1.8 387,973 10.8 418,655 10.9
Income tax (26,598) (1.1) (92,430) (2.6) (68,488) (1.8)
Profit for the year 16,579 0.7 295,543 8.2 350,167 9.1
Attributable to:
Equity shareholders of the
Company 16,579 0.7 295,543 8.2 350,167 9.1
Non-controlling interests – – – – 0.0 0.0
Profit for the year 16,579 0.7 295,543 8.2 350,167 9.1
Non-IFRS Measures
To supplement our consolidated statements of profit or loss, which are presented in
accordance with IFRS, we also use adjusted net profit (non-IFRS measure) and adjusted net
profit margin (non-IFRS measure) as additional financial measures. The presentation of
adjusted net profit (non-IFRS measure) and adjusted net profit margin (non-IFRS measure)
facilitates comparisons of operating performance from period to period by eliminating
potential impacts of certain items described below. Equity-settled share-based payment
expenses are non-cash expenses arising from the RSU Scheme. Listing expenses are related to
the Global Offering. We believe that adjusted net profit (non-IFRS measure) and adjusted net
profit margin (non-IFRS measure) are frequently used by other interested parties when
evaluating the performance of a company. Our management uses such non-IFRS measures as
additional measurement tools for business decision-making. In addition, we believe that such
non-IFRS measures provide additional information to investors and others in understanding
and evaluating our consolidated results of operations in the same manner as our management
and in comparing financial results across accounting periods and to those of our peer
companies. The use of the non-IFRS measures has limitations as analytical tools, and you
should not consider it in isolation from, or as substitute for analysis of, our results of operations
or financial condition as reported under IFRS. Other companies in our industry may calculate
these non-IFRS measures differently than we do. As such, our presentation of the non-IFRS
measures may not be comparable to similarly titled measures presented by other companies.
FINANCIAL INFORMATION
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We define adjusted net profit (non-IFRS measure) as profit for the year adjusted by
excluding (i) equity-settled share-based payment expenses, (ii) listing expenses, and (iii)
impact on tax related to items (i) to (ii) above. The following table illustrates reconciliations
to our adjusted net profit (non-IFRS measure) from our profit for the periods indicated:
For the year ended December 31,
2022 2023 2024
(in thousands of RMB)
Profit for the year 16,579 295,543 350,167
Equity-settled share-based payment
expenses (779) 844 5,447
Listing expenses 11,210 8,547 6,312
Impact on tax (1,794) (1,637) (1,060)
Adjusted net profit (non-IFRS
measure) 25,216 303,297 360,866
The following table sets forth our adjusted net profit margin (non-IFRS measure) for the
periods indicated:
For the year ended December 31,
2022 2023 2024
Adjusted net profit margin (%)
(non-IFRS measure) 1.1 8.5 9.4
(1) Adjusted net profit margin (non-IFRS measure) is calculated by dividing adjusted net profit (non-IFRS
measure) by revenue for the year.
FINANCIAL INFORMATION
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Revenue
During the Track Record Period, we generated revenue from three services, including (i)
restaurant operations, (ii) delivery service and (iii) others, including (a) commissions we
receive from service providers for cell phone charging services, (b) sales of products such as
cooking oil, condiments and gift boxes and (c) fees for parking services. The following table
sets forth a breakdown of our revenue by service, each presented in absolute amount and as a
percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except percentages)
Restaurant operation 1,976,519 83.2 3,059,989 85.3 3,099,173 80.8
Delivery service 397,114 16.7 517,153 14.4 723,057 18.8
Others
(1) 1,820 0.1 12,036 0.3 15,972 0.4
Total revenue 2,375,453 100.0 3,589,178 100.0 3,838,202 100.0
Note:
(1) Primarily consists of (i) commissions received from certain providers of cell phone charging services, (ii) sales
of products such as cooking oil, condiments and gift boxes and (iii) fees for parking services.
The following table sets forth a breakdown of our revenue generated from restaurant
operation and delivery service by geographical regions, each presented in absolute amount and
as a percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except percentages)
Eastern China (1) 710,137 29.9 1,107,548 31.0 1,265,491 33.1
Guangdong province 621,811 26.2 814,699 22.8 762,035 19.9
Northern China
(2) 517,146 21.8 708,494 19.8 626,798 16.4
Other (3) 524,539 22.1 946,401 26.4 1,167,906 30.6
Overall 2,373,633 100.0 3,577,142 100.0 3,822,230 100.0
FINANCIAL INFORMATION
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Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei, Gansu, Tibet,
Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan, Hainan and Hong Kong SAR.
Our revenue generated from restaurant operation increased in 2023 as compared with that
in 2022, primarily attributable to (i) the strong recovery of our customer traffic due to a
significant surge in consumer spending in the first half of 2023 following the easing of
government-imposed restrictions related to COVID-19 in December 2022 and (ii) an increase
in the number of our restaurants in operation due to our restaurant expansion. Our revenue
generated from restaurant operation increased in 2024 as compared to 2023, primarily
attributable to an increase in the number of our restaurants in operation and partially offset by
a decrease in our restaurant level performance. During the Track Record Period, we primarily
focused on opening new restaurants in Eastern China, Guangdong province and Northern
China, which are the major economic centers of Mainland China. In 2022, 2023 and 2024, we
generated 77.9%, 73.6% and 69.4%, respectively, of our revenue from restaurant operation and
delivery service from our restaurants in these three key regions. Going forward, we expect to
continue to capitalize on our established brand reputation in the three key regions by further
penetrating these markets. We also plan to expand into other geographical regions to continue
expand our restaurant network.
Other Revenue
Our other revenue primarily consists of (i) interest income on bank deposits and rental
deposits and (ii) government grants, which mainly represent additional deduction and
exemption on value-added tax granted by the government authorities in the PRC. The following
table sets forth a breakdown of our other revenue, each presented in absolute amount and as
a percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Interest income on:
Bank deposits 2,895 0.1 2,527 0.1 3,959 0.1
Rental deposits 1,876 0.1 2,120 0.1 2,483 0.0
Investment income on wealth
management products 1,214 0.0 4,418 0.1 2,490 0.1
Government grants 23,833 1.0 28,342 0.8 22,322 0.6
Lease incentives 1,263 0.1 1,788 0.0 703 0.0
Total 31,081 1.3 39,195 1.1 31,957 0.8
FINANCIAL INFORMATION
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Government grants during the Track Record Period mainly represented additional
deduction and exemption of value-added tax granted by the government authorities in the PRC
and various forms of incentives and subsidies granted to the Group by the local government
authorities in Mainland China. The additional deduction and exemption of value-added tax was
granted by the central government to taxpayers in life service industry, and such government
grant has been discontinued in 2024.
Raw Materials and Consumables Used
Our raw materials and consumables used consist of the costs of (i) semi-processed food
products and bakery products we procured from third-party food processing companies, (ii)
food ingredients we directly purchased from suppliers, and (iii) consumables used in our
restaurants, such as napkins, packaging materials and other consumables used at our kitchens.
In 2022, 2023 and 2024, our raw materials and consumables used amounted to RMB862.3
million, RMB1,205.2 million and RMB1,192.9 million, respectively, representing 36.3%,
33.6% and 31.1% of our revenue for the respective periods.
Changes in our raw materials and consumables used were generally in line with the
increasing trend of our revenue during the Track Record Period. See “– Factors Affecting Our
Financial Condition and Results of Operations – Food supply prices” and “– Results of
Operations” for the historical and future trend of our raw materials and consumables used.
Staff Costs
Our staff costs comprise salaries, wages and other benefits, contributions to defined
contribution retirement plan and equity-settled share-based payment expenses to our
employees. Our staff costs amounted to RMB626.4 million, RMB911.0 million and RMB989.0
million in 2022, 2023 and 2024, respectively, representing 26.4%, 25.4% and 25.8% of our
revenue for the respective periods. See “– Factors Affecting Our Financial Condition and
Results of Operations – Staff costs” and “– Results of Operations” for the historical and future
trend of our staff costs.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our staff costs, each presented in absolute
amount and as a percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Salaries, wages and other
benefits 615,115 25.9 895,245 25.0 965,419 25.2
Contributions to defined
contribution scheme 12,061 0.5 14,939 0.4 18,142 0.5
Equity-settled share-based
payment expenses (779) (0.0) 844 0.0 5,447 0.1
Total 626,397 26.4 911,028 25.4 989,008 25.8
Depreciation of Right-of-Use Assets
Our depreciation of right-of-use assets represents depreciation charges for our leases for
our restaurants and employee dormitories. In 2022, 2023 and 2024, we recorded depreciation
of right-of-use assets of RMB161.0 million, RMB177.0 million and RMB202.9 million,
respectively, representing 6.8%, 4.9% and 5.3% of our revenue for the respective periods. See
“– Factors Affecting Our Financial Condition and Results of Operations – Depreciation of
Right-of-use Assets and Other Rentals and Related Expenses” for further details.
Other Rentals and Related Expenses
Our other rentals and related expenses mainly represent (i) lease payments for leases of
low-value assets and leases that had a lease term of 12 months or less and (ii) the variable lease
payments based on operation results of related restaurants rather than fix rates. In 2022, 2023
and 2024, our other rentals and related expenses were RMB56.6 million, RMB80.3 million and
RMB76.1 million, respectively, representing 2.4%, 2.2% and 2.0% of our revenue for the
respective periods.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our other rentals and related expenses, each
presented in absolute amount and as a percentage of our revenue, for the periods indicated:
Y ear Ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Expense relating to leases of
low-value assets and
short-term leases 45,144 1.9 54,421 1.5 50,837 1.3
V ariable lease payments not
included in the
measurement of lease
liabilities 13,902 0.6 26,820 0.7 26,451 0.7
COVID-19 rent concessions
deducted from variable
payments (1,764) (0.1) – – – –
Lease incentives amortization
deducted from variable
payments (671) (0.0) (947) (0.0) (1,224) (0.0)
Total 56,611 2.4 80,294 2.2 76,064 2.0
Depreciation and Amortization of Other Assets
Our depreciation and amortization of other assets represent depreciation and amortization
charges for our kitchen equipment, capitalized renovation costs of our restaurants, restaurant
furniture, and amortization charges for software. In 2022, 2023 and 2024, we recorded
depreciation and amortization of other assets of RMB163.6 million, RMB192.9 million and
RMB217.9 million, respectively, or representing 6.9%, 5.4% and 5.7% of our revenue for the
respective periods.
Utilities Expenses
Our utilities expenses primarily consist of expenses incurred for electricity, gas and water
utilities by our restaurants. Our utilities expenses amounted to RMB90.0 million, RMB123.6
million and RMB141.3 million in 2022, 2023 and 2024, respectively, representing 3.8%, 3.5%
and 3.7% of our revenue for the respective periods.
FINANCIAL INFORMATION
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Delivery Service Expenses
Our delivery service expenses primarily consist of fees paid to third-party online food
delivery platforms. During the Track Record Period, we offered delivery services to our
customers through services provided by third-party online food delivery platforms. In 2022,
2023 and 2024, our delivery service expenses amounted to RMB61.2 million, RMB82.8
million and RMB121.0 million, respectively, representing 2.6%, 2.3% and 3.1% of our revenue
for the respective periods.
Other Expenses
Our other expenses are primarily comprised of property management fees, expenses for
cookware and kitchen utensils, services fees to third-party payment platforms and other
third-party service providers, and transportation charges for raw material shipments. The table
below sets forth a breakdown of our other expenses, each presented in absolute amount and as
a percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Property management
expenses 59,444 2.5 72,110 2.0 87,609 2.3
Low-value consumables 67,279 2.8 91,345 2.5 94,736 2.5
Services fees to
third-party service
providers
(1) 56,898 2.4 65,879 1.8 70,639 1.8
Platform service fees 11,247 0.5 48,696 1.4 65,498 1.7
Transportation charges 22,638 1.0 25,053 0.7 30,704 0.8
Business development
expenses 15,551 0.7 28,032 0.8 33,868 0.9
Advertising and promotion
expenses 23,966 1.0 27,448 0.8 30,105 0.8
Office expenses 3,322 0.1 6,060 0.2 5,746 0.1
Impairment losses of
property, plant and
equipment and
right-of-use assets – – 4,636 0.1 – –
Listing expenses 11,210 0.5 8,547 0.2 6,312 0.2
Others
(2) 37,425 1.5 43,144 1.2 42,191 1.0
308,980 13.0 420,950 11.7 467,408 12.1
FINANCIAL INFORMATION
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Note:
(1) Services fees to third-party service providers mainly include fees we paid to third-party service providers for
logistics, consultant, waste disposal, cleaning, pest control, staff hiring and information technology-related
services.
(2) Others mainly include expenses related to snacks we provide to customers while waiting, maintenance
expenses and upfront expenses related to the opening of new restaurants.
In 2022, 2023 and 2024, our other expenses amounted to RMB309.0 million, RMB421.0
million and RMB467.4 million, respectively, representing 13.0%, 11.7% and 12.1% of our
revenue for the respective periods. Our property management expenses, low-value
consumables, service fees to third-party service providers and platform service fees continued
to increase during the Track Record Period. Such increases were primarily due to the continued
growth of our restaurants operations.
Other Net Income/(Losses)
Other net income/(losses) primarily consisted of (i) restoration costs incurred when we
close certain restaurants and terminate relevant lease agreements with lessors and the
compensation received from landlords for the restaurants we closed due to breach of contract
on the part of the relevant landlords, (ii) rent concessions granted by lessors due to the
COVID-19 pandemic, (iii) net foreign exchange income/(losses), (iv) loss on disposal of assets,
and (v) other income/(losses), primarily relating to inventory write-down. The following table
sets forth a breakdown of our other net income/(losses), each presented in absolute amount and
as a percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Net losses on restaurant
closures (1,122) (0.0) (2,066) (0.1) (756) (0.0)
Income on COVID-19 rent
concessions 10,176 0.4 – – – –
Net foreign exchange
income/(losses) 62 0.0 14 0.0 (35) 0.0
Net (losses)/gains on
disposal of property,
plant and equipment and
right-of-use assets (494) (0.0) (840) (0.0) 485 0.0
Other (losses)/income (209) (0.0) (1,027) (0.0) 2,459 0.1
Total 8,413 0.4 (3,919) (0.1) 2,153 0.1
FINANCIAL INFORMATION
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Finance Costs
Our finance costs consist of interests on lease liabilities, long-term payable, provisions
and bank loans. In 2022, 2023 and 2024, our finance costs amounted to RMB41.5 million,
RMB42.7 million and RMB45.3 million, respectively, representing 1.7%, 1.2% and 1.2% of
our revenue for the respective periods.
The following table sets forth a breakdown of our finance costs, each presented in
absolute amount and as a percentage of our revenue, for the periods indicated:
For the year ended December 31,
2022 2023 2024
RMB % RMB % RMB %
(in thousands, except for percentages)
Interest on bank loans 594 0.0 188 0.0 37 0.0
Interest on lease liabilities 35,450 1.5 36,640 1.0 39,305 1.0
Interest on long-term payable 3,925 0.2 3,818 0.1 3,729 0.1
Interest on provisions 1,572 0.0 2,011 0.1 2,238 0.1
Total 41,541 1.7 42,657 1.2 45,309 1.2
Income Tax
Our income tax consists of income tax paid or payable at the applicable tax rates in
accordance with the relevant laws and regulations in each tax jurisdiction we operate or
domicile. Our income tax expenses in 2022, 2023 and 2024 amounted to RMB26.6 million,
RMB92.4 million and RMB68.5 million, respectively. Our income tax significantly increased
in 2023 primarily due to an increase in our taxable income as our results of operations
significantly improved in 2023. Our effective tax rate, calculated by dividing income tax by
profit before taxation, was 61.6%, 23.8% and 16.4% in 2022, 2023 and 2024, respectively.
Cayman Islands
Under the current laws of the Cayman Islands, we are not subject to income tax or capital
gains tax in the Cayman Islands.
FINANCIAL INFORMATION
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Hong Kong SAR
Our subsidiaries incorporated in Hong Kong SAR are generally subject to Hong Kong
profits tax at a rate of 16.5%. For the years 2019 and onwards, the first HK$2 million of profits
generated by one entity incorporated in Hong Kong SAR is taxed at a rate of 8.25%, while the
remaining profits will continue to be taxed at the 16.5% tax rate. For the years ended
December 31, 2022, 2023 and 2024, our subsidiaries in Hong Kong SAR did not incur any
profits tax in Hong Kong SAR as they did not have any assessable profit for these years.
PRC
Generally, taxable income for our subsidiaries in the PRC are subject to PRC income tax
rate of 25% for the years ended December 31, 2022, 2023 and 2024. On the other hand, Tibet
Green Tea F&B was established in Tibet in 2016 and was entitled to a preferential income tax
rate of 15% since its operation according to the Notice No. 51 issued by the Tibet People’s
Government on May 1, 2014. According to the Notice No. 23 issued by the Ministry of
Finance, State Taxation Administration and National Development and Reform Commission on
April 23, 2020, Tibet Green Tea F&B could continue to meet the relevant criteria to enjoy the
preferential income tax rate. Thus, Tibet Green Tea F&B will continue to be entitled to the
preferential income tax rate of 15% from 2021 to 2030.
For the year ended December 31, 2022, certain of our subsidiaries fulfilled the criteria
required for preferential income tax rate granted to small and low profit-making enterprises in
the PRC, and were entitled to a preferential income tax rate of 2.5% on taxable income for the
first RMB1 million and 5% on taxable income for the subsequent RMB1 million to RMB3
million.
For the years ended December 31, 2023 and 2024, certain of our subsidiaries fulfilled the
criteria required for preferential income tax rate granted to small and low profit-making
enterprises in the PRC, and were entitled to a preferential income tax rate of 5% on taxable
income within RMB3 million.
During the Track Record Period and as of the Latest Practicable Date, we did not have
any disputes or unresolved issues with the relevant tax authorities.
RESULTS OF OPERATIONS
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue. Our revenue increased by 6.9% from RMB3,589.2 million in 2023 to
RMB3,838.2 million in 2024, primarily attributable to an increase in the number of our
restaurants in operation which is partially offset by decreases in our same store sales in all
regions mainly due to a general change in consumer behavior to reduce expenses and
frequencies of dining out given the current economic environment, which led to decreases in
our table turnover rate and average spending per guest in all regions. According to CIC, the
industry in general also showed the same trend.
FINANCIAL INFORMATION
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Our revenue generated from restaurant operations and delivery services in Eastern China
increased by 14.3% from RMB1,107.5 million in 2023 to RMB1,265.5 million in 2024. Such
increase was primarily due to an increase in the number of our restaurants in this region from
115 as of December 31, 2023 to 155 as of December 31, 2024. Such increase was partially
offset by a decrease in our same store sales in this region by 11.2% in 2024 as compared to that
in 2023.
Our revenue generated from restaurant operations and delivery services in Guangdong
province decreased by 6.5% from RMB814.7 million in 2023 to RMB762.0 million in 2024.
Such decrease was primarily due to a decrease in our same store sales in this region by 12.6%
in 2024 as compared to that in 2023. Such decrease was partially offset by an increase in the
number of our restaurants in this region from 72 as of December 31, 2023 to 83 as of December
31, 2024.
Our revenue generated from restaurant operations and delivery services in Northern China
decreased by 11.5% from RMB708.5 million in 2023 to RMB626.8 million in 2024. Such
decrease was primarily due to a decrease in our same store sales in this region by 6.8% in 2024
as compared to that in 2023.
Our revenue generated from restaurant operations and delivery services in other region
increased by 23.4% from RMB946.4 million in 2023 to RMB1,167.9 million in 2024. Such
increase was primarily due to an increase in the number of our restaurants in this region from
117 as of December 31, 2023 to 169 as of December 31, 2024. Such increase was partially
offset by a decrease in our same store sales in this region by 10.9% in 2024 as compared to that
in 2023.
Our revenue generated from delivery service increased by 39.8% from RMB517.2 million
in 2023 to RMB723.1 million in 2024, primarily due to an increase in the number of our
delivery orders in 2024 as we strategically increased our focus on delivery services in 2024.
Our revenue generated from delivery service as a percentage of our total revenue increased
from 14.4% in 2023 to 18.8% in 2024, primarily due to the same reason.
Our revenue generated from others increased by 32.7% from RMB12.0 million in 2023
to RMB16.0 million in 2024, primarily due an increase in the sales of products such as beef
short rib, wheat flour and soybean oil.
Other revenue. Our other revenue decreased by 18.5% from RMB39.2 million in 2023 to
RMB32.0 million in 2024, primarily due to decreases in lease incentives and government
grants because the policy to provide additional deduction and exemption of value-added tax
was discontinued in 2024.
FINANCIAL INFORMATION
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Raw materials and consumables used. Our raw materials and consumables used slightly
decreased by 1.0% from RMB1,205.2 million in 2023 to RMB1,192.9 million in 2024,
primarily due to a decrease in the unit price of purchases. Our raw materials and consumables
used as a percentage of our revenue decreased from 33.6% in 2023 to 31.1% in 2024, primarily
due to (i) our increasing bargaining power with suppliers to obtain raw materials at a more
favorable price as we continued to streamline our menu offerings and (ii) our continuous effort
in finding suppliers that provide quality ingredients at a lower cost.
Staff costs. Our staff costs increased by 8.6% from RMB911.0 million in 2023 to
RMB989.0 million in 2024, primarily due to an increase in the number of our employees due
to the expansion of our restaurant network. Our staff costs as a percentage of our revenue
increased from 25.4% in 2023 to 25.8% in 2024, primarily due to a decrease in our restaurant
level performance.
Depreciation of right-of-use assets. Our depreciation of right-of-use assets increased by
14.6% from RMB177.0 million in 2023 to RMB202.9 million in 2024, primarily as a result of
an increase in our leases due to the increase in number of our restaurants. Our depreciation of
right-of-use assets as a percentage of our revenue increased from 4.9% in 2023 to 5.3% in
2024, primarily due to a decrease in our restaurant level performance.
Other rentals and related expenses. Our other rentals and related expenses decreased by
5.3% from RMB80.3 million in 2023 to RMB76.1 million in 2024, primarily due to a decrease
in the variable payment of rent for our restaurants which was calculated with reference to the
sales at the relevant restaurants. Our other rentals and related expenses as a percentage of our
revenue decreased from 2.2% in 2023 to 2.0% in 2024, primarily due to the same reason.
Depreciation and amortization of other assets. Our depreciation and amortization of other
assets increased by 12.9% from RMB192.9 million in 2023 to RMB217.9 million in 2024,
primarily due to an increase in restaurant renovation costs in relation to the expansion of our
restaurant network. Our depreciation and amortization of other assets as a percentage of our
revenue increased from 5.4% in 2023 to 5.7% in 2024, primarily due to a decrease in our
restaurant level performance.
Utilities expenses. Our utilities expenses increased by 14.3% from RMB123.6 million in
2023 to RMB141.3 million in 2024, primarily due to an increase in the number of our
restaurants in operation during the period. Our utilities expenses as a percentage of our revenue
increased from 3.5% in 2023 to 3.7% in 2024, primarily due to a decrease in our restaurant
level performance.
Delivery service expenses. Our delivery service expenses increased by 46.1% from
RMB82.8 million in 2023 to RMB121.0 million in 2024, primarily due to an increase in the
number of delivery orders. Our delivery service expenses as a percentage of our revenue
increased from 2.3% in 2023 to 3.1% in 2024, primarily due to an increase in the sales from
our delivery service as a percentage of our overall business.
FINANCIAL INFORMATION
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Other expenses. Our other expenses increased by 11.0% from RMB421.0 million in 2023
to RMB467.4 million in 2024, primarily due to increases in property management fees,
purchase of consumables, service fees to third-party service providers and transportation
expenses as we continue to expand our restaurant network and increase our sales. Our other
expenses as a percentage of our revenue increased from 11.7% in 2023 to 12.1% in 2024,
primarily due to a decrease in our restaurant level performance.
Other net income/(losses). We recorded net income of RMB2.2 million in 2024 as
compared to a net loss of RMB3.9 million in 2023. Such change was primarily due to the
one-off compensation we received from landlords for the restaurants we closed due to breach
of contract on the part of the relevant landlords.
Finance costs. Our finance costs increased by 6.2% from RMB42.7 million in 2023 to
RMB45.3 million in 2024, primarily due to an increase in interests on lease liabilities
associated with the increase in the number of our leases. Such increase was partially offset by
a decrease in the interest on a bank loan as we repaid such bank loan in January 2024. Our
finance costs as a percentage of our revenue remained stable at 1.2% in 2023 and 2024.
Profit before taxation. As a result of the foregoing, our profit before taxation increased
by 7.9% from RMB388.0 million in 2023 to RMB418.7 million in 2024. Our profit before
taxation as a percentage of our revenue was 10.8% in 2023 and 10.9% in 2024.
Income tax. Our income tax decreased by 25.9% from RMB92.4 million in 2023 to
RMB68.5 million in 2024, primarily due to a decrease in our effective tax rate at the group
level. Our effective tax rate, calculated by dividing our income tax by our profit before taxation
was 23.8% in 2023 and 16.4% in 2024.
Profit for the year . As a result of the cumulative effect of the above factors, our profit for
the year increased from RMB295.5 million in 2023 to RMB350.2 million in 2024.
Y ear Ended December 31, 2022 Compared to Y ear Ended December 31, 2023
Revenue. Our revenue increased by 51.1% from RMB2,375.5 million in 2022 to
RMB3,589.2 million in 2023, primarily attributable to (i) a robust rebound in our results of
operations in all regions mainly due to the recovery of our customer traffic due to a significant
surge in consumer spending in the first half of 2023 following the easing of government-
imposed restrictions related to COVID-19 in December 2022 and (ii) the successful expansion
of our restaurant network.
Our revenue generated from restaurant operations and delivery services in Eastern China
increased by 56.0% from RMB710.1 million in 2022 to RMB1,107.5 million in 2023. Such
increase was primarily due to (i) a robust rebound in our results of operations in this region,
which led to increases in total guests served in this region from 11.4 million in 2022 to 17.6
million in 2023, same store sales in this region by 26.1% and table turnover rate in this region
from 2.71 in 2022 to 3.11 in 2023 and (ii) the successful expansion of our restaurant network
in this region.
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Our revenue generated from restaurant operations and delivery services in Guangdong
province increased by 31.0% from RMB621.8 million in 2022 to RMB814.7 million in 2023.
Such increase was primarily attributable to (i) a robust rebound in our results of operations in
this region, which led to increases in total guests served in this region from 9.8 million in 2022
to 13.2 million in 2023, same store sales in this region by 17.1% and table turnover rate in this
region from 3.06 in 2022 to 3.37 in 2023 and (ii) the successful expansion of our restaurant
network in this region.
Our revenue generated from restaurant operations and delivery services in Northern China
increased by 37.0% from RMB517.1 million in 2022 to RMB708.5 million in 2023. Such
increase was primarily due to a robust rebound in our results of operations in this region, which
led to increases in total guests served in this region from 8.3 million in 2022 to 11.5 million
in 2023, same store sales in this region by 31.5% and table turnover rate in this region from
2.78 in 2022 to 3.52 in 2023.
Our revenue generated from restaurant operations and delivery services in other region
increased by 80.4% from RMB524.5 million in 2022 to RMB946.4 million in 2023. Such
increase was primarily attributable to (i) a robust rebound in our results of operations in this
region, which led to increases in total guests served in this region from 8.4 million in 2022 to
15.7 million in 2023, same store sales in this region by 30.9% and table turnover rate in this
region from 2.72 in 2022 to 3.28 in 2023 and (ii) our successful expansion in Sichuan, Y unnan,
Hainan and Shaanxi province.
Our revenue generated from delivery service increased by 30.2% from RMB397.1 million
in 2022 to RMB517.2 million in 2023, primarily due to an increase in the number of restaurants
which offered delivery service as a result of our restaurant expansion. Our revenue generated
from delivery service as a percentage of our total revenue decreased from 16.7% in 2022 to
14.4% in 2023, primarily due to the robust rebound in our revenue generated from restaurant
operation since the Chinese government lifted the “zero-COVID” policy in December 2022.
Our revenue generated from others increased by 561.3% from RMB1.8 million in 2022
to RMB12.0 million in 2023, primarily due to an increase in the sales of products such as
cooking oil, condiments and gift boxes.
Other revenue . Our other revenue increased by 26.1% from RMB31.1 million in 2022 to
RMB39.2 million in 2023, primarily due to an increase in additional deduction and exemption
of value-added tax granted by the government authorities.
Raw materials and consumables used. Our raw materials and consumables used increased
by 39.8% from RMB862.3 million in 2022 to RMB1,205.2 million in 2023, primarily due to
a robust rebound in our restaurant sales. Our raw materials and consumables used as a
percentage of our revenue decreased from 36.3% in 2022 to 33.6% in 2023, primarily due to
(i) our effective procurement cost control, (ii) our effort in increasing direct procurement of
raw materials from suppliers to enjoy more favorable procurement prices and (iii) decreases in
the market price for certain food ingredients such as pork.
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Staff costs. Our staff costs increased by 45.4% from RMB626.4 million in 2022 to
RMB911.0 million in 2023, primarily due to (i) an increase in the number of our employees
due to the expansion of our restaurant network and (ii) an increase in performance-based
salaries paid to our restaurant staff as we recorded a robust rebound in our restaurant
operations. Our staff costs as a percentage of our revenue decreased from 26.4% in 2022 to
25.4% in 2023, primarily due to the recovery of our restaurant level performance in 2023,
partially offset by an increase in overall staff salary.
Depreciation of right-of-use assets. Our depreciation of right-of-use assets increased by
9.9% from RMB161.0 million in 2022 to RMB177.0 million in 2023, primarily as a result of
an increase in our leases due to the increase in number of our restaurants. Our depreciation of
right-of-use assets as a percentage of our revenue decreased from 6.8% in 2022 to 4.9% in
2023, primarily due to the recovery of our restaurant level performance in 2023.
Other rentals and related expenses. Our other rentals and related expenses increased by
41.8% from RMB56.6 million in 2022 to RMB80.3 million in 2023, primarily as a result of an
increase in our leases due to the increase in the number of our restaurants. Our other rentals
and related expenses as a percentage of our revenue decreased from 2.4% in 2022 to 2.2% in
2023, primarily due to increase in our restaurant level performance.
Depreciation and amortization of other assets. Our depreciation and amortization of other
assets increased by 17.9% from RMB163.6 million in 2022 to RMB192.9 million in 2023,
primarily due to an increase in restaurant renovation costs in relation to the expansion of our
restaurant network. Our depreciation and amortization of other assets as a percentage of our
revenue decreased from 6.9% in 2022 to 5.4% in 2023, primarily due to the recovery of our
restaurant level performance in 2023.
Utilities expenses . Our utilities expenses increased by 37.2% from RMB90.0 million in
2022 to RMB123.6 million in 2023, primarily due to (i) an increase in the number of
restaurants in operation and (ii) an increase in the total operating hours of our restaurants as
the pandemic eases. Our utilities expenses as a percentage of our revenue decreased from 3.8%
in 2022 to 3.5% in 2023, primarily due to the recovery of our restaurant level performance in
2023.
Delivery service expenses. Our delivery service expenses increased by 35.3% from
RMB61.2 million in 2022 to RMB82.8 million in 2023, primarily due to an increase in the
number of delivery orders and an increase in delivery commission fees charged by third-party
online food delivery platforms. Our delivery service expenses as a percentage of our revenue
slightly decreased from 2.6% in 2022 to 2.3% in 2023.
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Other expenses. Our other expenses increased by 36.2% from RMB309.0 million in 2022
to RMB421.0 million in 2023, primarily due to increases in purchase of consumables, service
fees to third-party service providers and advertisement expenses as we continue to expand our
restaurant network and increase our sales. Our other expenses as a percentage of our revenue
decreased from 13.0% in 2022 to 11.7% in 2023, due to the recovery of our restaurant level
performance in 2023.
Other net (losses)/income. Our other net losses was RMB3.9 million in 2023 as compared
to a net income of RMB8.4 million in 2022. Such change was primarily because we did not
receive any rent concessions related to the COVID-19 pandemic in 2023 whereas we received
income on COVID-19 rent concessions of RMB10.2 million in 2022.
Finance costs. Our finance costs increased by 2.7% from RMB41.5 million in 2022 to
RMB42.7 million in 2023, primarily due to an increase in interests on lease liabilities
associated with the increase in the number of our leases. Our finance costs as a percentage of
our revenue decreased from 1.7% in 2022 to 1.2% in 2023, primarily due to the recovery of
our restaurant level performance in 2023.
Profit before taxation. As a result of the foregoing, our profit before taxation increased
to RMB388.0 million in 2023 from RMB43.2 million in 2022. Our profit before taxation as a
percentage of our revenue was 1.8% in 2022 and 10.8% in 2023.
Income tax. Our income tax increased by 247.5% from RMB26.6 million in 2022 to
RMB92.4 million in 2023 as a result of an increase in our taxable income in 2023. Our effective
tax rate, calculated by dividing our income tax by our profit before taxation, was 61.6% in 2022
and 23.8% in 2023. Such decrease was primarily due to (i) the strong recovery of the
performance of our restaurant in 2023 and (ii) an increase in the tax benefits our operating
subsidiaries enjoyed.
Profit for the year . As a result of the cumulative effect of the above factors, our profit for
the year increased from RMB16.6 million to RMB295.5 million.
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ANALYSIS OF SELECTED STATEMENT OF FINANCIAL POSITION ITEMS
Inventories
Our inventories consist of food and beverages and other consumables for restaurant
operations. The following table sets forth the balance of our inventories as of the dates
indicated:
As of December 31,
2022 2023 2024
(RMB in thousands)
Food and beverages, and other
operating items for restaurant
operations 56,395 59,576 67,227
The balance of our inventories increased from RMB56.4 million as of December 31, 2022
to RMB59.6 million as of December 31, 2023, and further increased to RMB67.2 million as of
December 31, 2024, primarily due to increases in the number of our restaurants in operation.
As of March 31, 2025, RMB67.2 million, or 100% of inventories as of December 31,
2024, had been used, consumed or sold subsequent to December 31, 2024.
The following table sets forth our restaurant related inventory turnover days for the Track
Record Period:
Y ear Ended December 31,
2022 2023 2024
Total inventory turnover days (1) 21.9 17.6 19.4
Note:
(1) Inventory turnover days are calculated using the average of opening balance and closing balance of
restaurant related inventory for a year divided by raw materials and consumables used for the relevant
year and multiplied by 365 days.
Our inventory turnover days decreased to 17.6 days in 2023, primarily attributable to the
robust recovery of our restaurant operations. Our inventory turnover days increased to 19.4
days in 2024, primarily due to preparations for the Chinese New Y ear holiday that resulted in
higher inventory level at the end of December. We aim to continue to actively manage our
inventory turnover in the future.
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Trade and Other Receivables
Our trade and other receivables primarily consist of (i) trade debtors, which primarily
represented receivables from third-party payment platforms; (ii) other receivables and deposits,
which mainly represented rental deposits for our restaurants and other deposits relating to our
business operations; (iii) prepayments, which primarily represented prepayments relating to
rental expenses, utilities expenses and marketing and advertisement expenses; (iv) value added
tax recoverable; and (v) amounts due from related parties, which represented (x) the expenses
relating to the expansion and renovation of the Longjing restaurant we advanced to Hangzhou
Greentea and (y) receivables relating to our operation of certain restaurants under the
cooperation agreements with our connected persons. Such cooperation agreements had been
terminated on December 25, 2024, following our acquisition of 100% of equity interest in
Hangzhou Greentea, which allows us to own and operate the relevant restaurants without any
cooperative arrangement.
The following table sets forth our trade and other receivables as of the dates indicated:
As of December 31,
2022 2023 2024
(RMB in thousands)
Trade debtors 18,485 36,298 22,550
Other receivables and deposits 50,320 45,137 76,216
Amounts due from related parties 24,298 28,943 –
V alue added tax recoverable 109,788 149,396 158,350
Prepayments 37,339 54,726 75,150
Trade and other receivables 240,230 314,500 332,266
As of the Latest Practicable Date, approximately RMB160.9 million, or 48.4%, of our
trade and other receivables as of December 31, 2024 had been settled subsequent to
December 31, 2024. The lower subsequent settlement percentage of our trade and other
receivables was primarily due to value added tax recoverables which we do not believe to have
any recoverability issue.
Trade debtors
The majority of our trade debtors were primarily in connection with (i) bills settled
through third-party payment platforms such as Alipay or WeChat Pay, which were normally
settled within a short period of time; and (ii) bills received by shopping malls on behalf of us
for certain restaurants, which were normally settled within one month.
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The following table sets forth an aging analysis of our trade debtors as of the dates
indicated.
As of December 31,
2022 2023 2024
(RMB in thousands)
Within one month 16,903 35,046 21,249
One to two months 372 864 1,037
Two to three months 371 279 247
Other three months but within one year 839 109 17
Total trade debtors 18,485 36,298 22,550
The following table sets forth our trade debtors turnover days for the Track Record
Period.
Y ear Ended December 31,
2022 2023 2024
Trade debtors turnover days (1) 2.6 2.8 2.8
Note:
(1) Trade debtor turnover days are calculated using the average of opening balance and closing balance of
trade debtors for a year divided by revenue for the relevant year and multiplied by 365 days.
Our trade debtor turnover days were primarily affected by the settlement periods with
third-party payment platforms and shopping malls. Going forward, we do not expect to
experience significant change in our trade debtor turnover days.
We did not have any past due trade debtors as of December 31, 2022, 2023 and 2024. As
of the Latest Practicable Date, all of our trade debtor as of December 31, 2024 had been settled
subsequent to December 31, 2024.
V alue added tax recoverable
Our value added tax recoverable increased from RMB109.8 million as of December 31,
2022 to RMB149.4 million as of December 31, 2023, and further increased to RMB158.4
million as of December 31, 2024. Such increases were primarily due to the expansion of our
restaurant network.
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V alue added tax (“ VAT”) recoverable at the end of each reporting period represents the
input V A T generated from the purchase of property, plant and equipment (mainly for
decorations of new restaurants), raw materials, operating services and receiving leasing
service, after deducting output V A T generated from our restaurant operations and delivery
services. Our Group’s applicable input V A T rates are 5%, 6%, 9% and 13%, depending on the
products and/or services purchased, and the applicable output V A T rate is 6%.
In addition, our Group enjoyed additional deduction of V A T of 15% and 10% in 2022 and
2023, respectively, according to the relevant tax regulations. Such policy ceased to be effective
on December 31, 2023.
As we continued to expand our restaurant network during the Track Record Period and
opened a total of 47, 89 and 120 new restaurants in 2022, 2023 and 2024, respectively, the input
V A T generated from the above purchase of property, plant and equipment and purchase of raw
materials, operating services and receiving leasing service for restaurant operations was larger
than the output V A T generated from restaurant operations and delivery services, which resulted
in the V A T recoverable at the end of each reporting period. The V A T recoverable can be utilized
through the future revenue generated from restaurant operations or refunded in certain
circumstances according to the relevant tax regulations.
Other receivables and deposits
Our other receivables and deposits primarily consist of rental deposits for our restaurants.
Our other receivables and deposits decreased from RMB50.3 million as of December 31, 2022
to RMB45.1 million as of December 31, 2023, primarily due to a decrease in our rental deposits
which were returned after the completion of restaurant renovation. Our other receivables and
deposits increased from RMB45.1 million as of December 31, 2023 to RMB76.2 million as of
December 31, 2024, mainly attributable to an increase in our rental deposits as we continued
to expand our restaurant network.
Prepayments
Our prepayments primarily consist of prepayments made for rental, utilities and
marketing and advertising related expenses. Our prepayments increased from RMB37.3 million
as of December 31, 2022 to RMB54.7 million as of December 31, 2023, primarily due to the
recovery of our business from the COVID-19 pandemic. Our prepayments increased from
RMB54.7 million as of December 31, 2023 to RMB75.2 million as of December 31, 2024,
primarily due to the expansion of our restaurant network.
Amounts due from related parties
Our amounts due from related parties primarily consist of (i) the expenses relating to the
expansion and renovation of the Longjing restaurant we advanced to Hangzhou Greentea prior
to our acquisition of Hangzhou Greentea and its subsidiary on December 25, 2024 and (ii)
receivables relating to our operation of certain restaurants under the cooperation agreements
FINANCIAL INFORMATION
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with our connected persons, which had been terminated on December 25, 2024. Our amounts
due from related parties increased from RMB24.3 million as of December 31, 2022 to
RMB28.9 million as of December 31, 2023. Such changes are primarily attributable to (i) the
changes in profit before tax of the restaurants we historically managed under the cooperation
agreements and (ii) an increase in the volume of food ingredients procurement from our Group
by the restaurants we historically managed under the cooperation agreements. Our amounts due
from related parties decreased to nil as of December 31, 2024 due to the termination of
cooperation agreements with our connected persons following the acquisition of Hangzhou
Greentea and its subsidiary on December 25, 2024.
Property, Plant and Equipment
Our property, plant and equipment is comprised of leasehold improvements, kitchen
equipment, furniture and fixture, electronic equipment and others and construction in progress
relating to our restaurants. Our property, plant and equipment increased from RMB518.9
million as of December 31, 2022 to RMB649.0 million as of December 31, 2023 and further
increased to RMB724.8 million as of December 31, 2024, primarily due to the expansion of our
restaurant network.
Right-of-Use Assets
Our right-of-use assets are comprised of the leases for our restaurants and employee
dormitories. Our right-of-use assets increased from RMB754.5 million as of December 31,
2022 to RMB822.1 million as of December 31, 2023 and further increased to RMB967.0
million as of December 31, 2024. Such increases were primarily due to the expansion of our
restaurant network.
Financial assets at fair value through profit or loss (“FVPL”)
Our financial assets at FVPL consist of low-risk wealth management products. We
managed and evaluated the performance of wealth management products on a fair value basis
in accordance with our business needs and investment strategy. Upon Listing, our investment
in financial assets at fair value through profit or loss will be subject to compliance with Chapter
14 of the Listing Rules. See “– Liquidity and Capital Resources – Policies for Wealth
Management Products” below for further details on our policies for wealth management
products.
In relation to the valuation of the financial assets at FVPL, we adopted the following
procedures:
(i) reviewed the terms of the relevant wealth management products;
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(ii) reviewed the fair value measurement assessment of the relevant wealth management
products presented by our finance department and carefully considered all
information available and various applicable valuation techniques and process in
determining the valuation of the relevant wealth management products; and
(iii) reviewed the fair value measurement of the financial assets at FVPL taking into
account of the valuation techniques and assumptions of unobservable inputs and
determine if the level 3 fair value measurement is in compliance with the applicable
IFRS.
Based on the above procedures, our Directors are of the view that the valuation analysis
is fair and reasonable, and our financial statements are properly prepared. The Joint Sponsors
have conducted the following independent due diligence work in relation to the level 3 fair
value measurement: they (i) reviewed the relevant notes included in the Accountants’ Report
as contained in Appendix I to this prospectus; (ii) discussed with the Company on the work
they have performed, primary factors taken into account, key assumptions and methodologies
adopted for the valuation of the level 3 financial assets, and the internal control measures
undertaken by the Company for reviewing and approving the relevant valuation; and (iii)
discussed with the Reporting Accountants in respect of the work performed in relation to the
valuation of the level 3 financial assets for the purpose of reporting on the historical financial
information of the Group for the Track Record Period as a whole. Having considered the work
done by the Directors and the Reporting Accountants as stated above, nothing material has
come to the attention of the Joint Sponsors that would cause the Joint Sponsors to disagree with
the valuation analysis performed by the Company.
Details of the fair value measurement of financial assets at FVPL, particularly the fair
value hierarchy, the valuation techniques and key inputs, including significant unobservable
inputs, the relationship of unobservable inputs to fair value are disclosed in Note 28(e) to the
Accountants’ Report in Appendix I to this prospectus. The Reporting Accountants’ opinion on
Historical Financial Information, as a whole, of the Group for the Track Record Period is set
out on pages I-1 to I-3 of Appendix I to this prospectus.
Impairment losses for property, plant and equipment and right-of-use assets
We performed impairment testing on property, plant and equipment and right-of-use
assets of each restaurant to identify whether there is any indication of impairment as of
December 31, 2022, 2023 and 2024. In view of the unfavorable future prospects of certain
restaurants, we recognized an impairment loss of RMB4.6 million for the year ended
December 31, 2023.
Although certain restaurants recorded operating losses for the years ended December 31,
2022 and 2024, the recoverable amount of these restaurants with an indication of impairment
exceeds the carrying amount. Therefore, no impairment loss was recognized for the years
ended December 31, 2022 and 2024.
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Trade and Other Payables
The following table sets forth our trade and other payables as of the dates indicated:
As of December 31,
2022 2023 2024
(RMB in thousands)
Trade payables 193,354 248,488 221,361
Staff cost payable 53,103 86,790 85,506
Listing expense payable 11,772 12,813 12,362
Other payables and accrued charges 70,689 139,778 138,392
Other taxes payable 2,944 5,466 4,718
Total trade and other payables 331,862 493,355 462,339
Trade payables
The majority of our trade payables were in connection with payables to our suppliers. Our
suppliers typically grant us a credit period of 30 to 90 days. The following is an aging analysis
of our trade payables based on the invoice date for the periods indicated:
As of December 31,
2022 2023 2024
(RMB in thousands)
Within one year 188,464 244,325 217,699
Over one year but within two years 4,862 1,443 190
Over two years but within three years 28 2,720 3,472
193,354 248,488 221,361
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The following table sets forth our trade payables turnover days during the Track Record
Period:
Y ear Ended December 31,
2022 2023 2024
Trade payable turnover days (1) 85.4 66.9 71.9
Note:
(1) Trade payables turnover days are calculated using the average of opening balance and closing balance
of trade payables for a year divided by raw materials and consumables used for the relevant year and
multiplied by 365 days.
Our trade payables turnover days decreased from 85.4 days in 2022 to 66.9 days in 2023
and 71.9 days in 2024, primarily due to the increase in procurement from suppliers which have
shorter payment terms as such suppliers generally offer lower procurement prices.
As of the Latest Practicable Date, RMB216.7 million, or 97.9% of our trade payables as
of December 31, 2024, had been settled subsequent to December 31, 2024.
Staff cost payables
Our staff cost payables increased from RMB53.1 million as of December 31, 2022 to
RMB86.8 million as of December 31, 2023, primarily due to an increase in performance-based
compensation as the performance of our restaurants showed a strong recovery after the easing
of the COVID-19 pandemic. Our staff cost payables decreased from RMB86.8 million as of
December 31, 2023 to RMB85.5 million as of December 31, 2024, primarily due to the
settlement of staff cost payables before the end of 2024.
Other payables and accrued charges
Our other payables and accrued charges are comprised of payables relating to restaurant
renovations, delivery services and utilities. Our other payables and accrued charges increased
from RMB70.7 million as of December 31, 2022 to RMB139.8 million as of December 31,
2023, primarily due to the increase in number of restaurants in operation. Our other payables
and accrued charges remained relatively stable at RMB138.4 million as of December 31, 2024.
Contract Liabilities
Our contract liabilities primarily consist of (i) prepayments made by customers for
subsequent spending at our restaurants, (ii) consideration from the offering of cash vouchers
on our WeChat mini-program and (iii) estimated loyalty points arising from our membership
reward system, which could be used in the future consumptions in our restaurants by members
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of our membership reward system. Our contract liabilities increased from RMB5.5 million as
of December 31, 2022 to RMB6.8 million as of December 31, 2023 and RMB8.0 million as of
December 31, 2024, primarily attributable to an increase in the estimated loyalty points arising
from our membership reward system as the number of our members continued to increase.
Deferred Lease Incentives
During the Track Record Period, certain landlords granted lease incentive amounts to us
under certain lease agreements for the reimbursement of leasehold improvement costs of the
leased properties. We firstly accounted for the benefit of the lease incentive amounts as a
deduction of the initial carrying amount of the right-of-use assets, and then the excess as
deferred lease incentives which are amortized on a straight-line basis over the term of the
leases. As of December 31, 2022, 2023 and 2024, we had deferred lease incentives of RMB15.5
million, RMB12.8 million and RMB12.8 million, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Overview
To date, we have financed our operations primarily through cash from our operations and
equity investments. As of December 31, 2024, we had RMB247.2 million in cash and cash
equivalents, substantially all of which were denominated in Renminbi. Our cash and cash
equivalents primarily consist of cash on hand and cash at bank.
The following table sets forth a summary of our cash flows for the periods indicated.
Y ear Ended December 31,
2022 2023 2024
(RMB in thousands)
Net cash generated from operating
activities 347,612 793,239 733,964
Net cash used in investing activities (215,843) (380,434) (247,787)
Net cash used in financing activities (127,866) (190,797) (595,484)
Net increase/(decrease) in cash and cash
equivalents 3,903 222,008 (109,307)
Effect of foreign exchange rate changes (711) (129) 170
Cash and cash equivalents at the
beginning of the year 131,218 134,410 356,289
Cash and cash equivalents at the end
of the year 134,410 356,289 247,152
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Operating Activities
Cash generated from operations reflects our profit before income tax, adjusted for (i) the
cash flow effects of non-cash items, including depreciation, equity-settled share-based
payment expenses, finance costs, net loss on disposal of property, plant and equipment and
right-of-use assets; amortization of intangible assets; impairment loss on property, plant and
equipment and right-of-use assets; gains on reassessment of right-of-use assets and lease
liabilities; and interest income (ii) the effects of changes in our working capital, including
changes in inventories, trade and other receivables, rental deposits, trade and other payables.
Net cash generated from operating activities in 2024 was RMB734.0 million, primarily
attributable to profit before taxation of RMB418.7 million, adjusted for certain non-cash items
and working capital adjustments. Negative working capital adjustments reflect (i) an increase
in trade and other receivables and rental deposits of RMB32.4 million, (ii) an increase in
inventories of RMB7.3 million and (iii) a decrease in trade and other payables of RMB2.4
million. Such negative working capital adjustments were offset by positive adjustments
reflected primarily an increase in contract liabilities of RMB1.2 million.
Net cash generated from operating activities in 2023 was RMB793.2 million, which was
primarily attributable to profit before taxation of RMB388.0 million, adjusted for certain
non-cash items and working capital adjustments. Negative working capital adjustment reflect
primarily (i) an increase in trade and other receivables and rental deposits of RMB69.5 million
and (ii) an increase in inventories of RMB3.2 million. Such negative working capital
adjustments were offset in part by positive adjustments reflected primarily an increase in trade
and other payables of RMB128.9 million, primarily due to the growth of our operation scale.
Net cash generated from operating activities in 2022 was RMB347.6 million, which was
primarily attributable to profit before taxation of RMB43.2 million, adjusted for certain
non-cash items and working capital adjustments. Negative working capital adjustment reflect
primarily (i) an increase in trade and other receivables and rental deposits of RMB30.3 million
and (ii) an increase in inventories of RMB9.2 million primarily due to the expansion of our
restaurant network. Such negative working capital adjustments were offset in part by positive
adjustments reflected primarily an increase in trade and other payables of RMB6.9 million,
primarily due to the growth of our operation scale.
Investing Activities
Net cash used in investing activities in 2024 was RMB247.8 million, primarily
attributable to (i) payment for purchase of wealth management products of RMB1,785.0
million and (ii) payment for the purchase of property, plant and equipment of RMB336.4
million in connection with the opening of new restaurants, which was partially offset by
proceeds from disposal of wealth management products of RMB1,882.7 million. In 2024, we
opened a total of 120 new restaurants.
FINANCIAL INFORMATION
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Net cash used in investing activities in 2023 was RMB380.4 million, primarily
attributable to (i) payment for purchase of wealth management products of RMB2,328.5
million and (ii) payment for the purchase of property, plant and equipment of RMB306.2
million in connection with the opening of new restaurants, which was partially offset by
proceeds from disposal of wealth management products of RMB2,248.5 million. In 2023, we
opened a total of 89 new restaurants.
Net cash used in investing activities in 2022 was RMB215.8 million, primarily
attributable to payment for the purchase of property, plant and equipment of RMB219.8 million
in connection with the opening of new restaurants. In 2022, we opened a total of 47 new
restaurants.
Financing Activities
Net cash used in financing activities in 2024 was RMB595.5 million, primarily
attributable to (i) the dividends paid to our existing Shareholders the Board declared in May
2023 and settled in June 2024 and (ii) payment of capital element and interest element of lease
liabilities of RMB218.2 million.
Net cash used in financing activities in 2023 was RMB190.8 million, primarily
attributable to (i) payment of capital element and interest element of lease liabilities of
RMB182.4 million, (ii) repayment of bank loans of RMB31.0 million and (iii) placements of
restricted bank deposits of RMB25.0 million.
Net cash used in financing activities in 2022 was RMB127.9 million, primarily
attributable to (i) payment of capital element and interest element of lease liabilities of
RMB155.0 million and (ii) repayment of bank loans of RMB85.5 million, which was partially
offset by proceeds from bank loans of RMB116.0 million.
Policies for Wealth Management Products
From time to time, we may purchase wealth management products, which are low-risk
investments with the primary purpose of capital preservation. We primarily consider the
following factors before purchasing wealth management products.
 Product selection and investment risk . We only invest in wealth management
products offered by reputable commercial banks that guarantee the principal
amounts of our investments.
 Investment return . We select wealth management products that offer competitive
returns compared to similar investment products.
 Investment amount and duration . We only invest in wealth management products
in amounts and with durations that are consistent with our working capital needs.
Such durations are generally between 30 days to 90 days.
FINANCIAL INFORMATION
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According to our internal control measures, the value of the wealth management product
will decide whether the purchase of such product is subject to pre-approval by our Board or by
our shareholders:
(i) If the value of such wealth management product is less than 10% of our net asset
according to our most recent audited financials, our chief executive officer is
authorized by the Board to approve the purchase of such product. Our chief
executive officer is only required to report such purchase in the next Board meeting.
(ii) If the value of such wealth management product is over 10% but less than 20% of
our net asset according to our most recent audited financials, purchase of such
product requires pre-approval by our Board.
(iii) If the value of such wealth management product is over 20% of our net asset
according to our most recent audited financials, purchase of such product needs to
be pre-approved by our shareholders at a shareholders’ meeting.
In addition, our internal audit team is responsible for monitoring the approval, purchase
and audit of such wealth management products. Our audit committee also has the authority to
review our investments, including the purchase of wealth management products.
COMMITMENTS
As of December 31, 2022, 2023 and 2024 the total amount of our capital expenditure
contracted for but not yet provided was RMB25.0 million, RMB15.9 million and RMB34.2
million, respectively.
CAPITAL EXPENDITURES
Our capital expenditure consists of payment for purchases of property, plant and
equipment, primarily used to open new restaurants, procure property, plant and equipment for
new restaurants, renovate existing restaurants and purchase furniture and equipment used for
our restaurant operations. We made payment for the capital expenditures of RMB219.8 million,
RMB306.2 million and RMB336.4 million in 2022, 2023 and 2024, respectively. These
historical capital expenditures were funded primarily by cash generated from our operating
activities.
We currently plan to open approximately 118 new restaurants in 2025 (excluding
restaurants that had been opened as of the Latest Practicable Date). We estimate the total
capital expenditure for the opening of the 118 new restaurants to be RMB273.1 million. We
plan to fund these capital expenditures with our existing cash and cash equivalents, cash flow
generated from operating activities and proceeds from the Global Offering. See “Business –
Growth Strategies,” “Business – Expansion Plan and Management” and “Future Plans and Use
of Proceeds” for further details about our planned capital expenditure.
FINANCIAL INFORMATION
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WORKING CAPITAL
The table below sets forth the details of our current assets and liabilities as of the dates
indicated:
As of December 31, As of
March 31,
20252022 2023 2024
(RMB in thousands)
(unaudited)
Current assets
Inventories 56,395 59,576 67,227 59,485
Trade and other receivables 240,230 314,500 332,266 296,678
Income tax prepayments 2,887 1,492 1,395 6,502
Financial assets at fair value
through profit or loss
(“FVPL”) 40,000 120,192 25,002 85,746
Restricted Deposits – 25,000 – –
Cash and cash equivalents 134,410 356,289 247,152 337,632
Total current assets 473,922 877,049 673,062 786,043
Current liabilities
Trade and other payables 331,862 493,335 462,339 475,413
Dividend payable – 350,028 – –
Contract liabilities 5,480 6,847 8,021 9,896
Current portion of long-term
payables 6,148 7,593 – –
Lease liabilities 181,859 214,345 256,728 260,469
Bank loans 31,000 50,100 – –
Current taxation 5,831 55,442 10,916 19,161
Total current liabilities 562,180 1,177,690 738,004 764,939
Net current (liabilities)/assets (88,258) (300,641) (64,942) 21,104
We recorded net current assets of RMB21.1 million as of March 31, 2025 as compared to
net current liabilities of RMB64.9 million as of December 31, 2024, primarily due to a strong
cash inflow generated from operating activities as we recorded profit for the period.
FINANCIAL INFORMATION
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Our net current liabilities decreased from RMB300.6 million as of December 31, 2023 to
RMB64.9 million as of December 31, 2024, primarily due to a strong cash inflow generated
from operating activities as we recorded profit for the year.
We recorded net current liabilities of RMB300.6 million as of December 31, 2023 as
compared to net current liabilities of RMB88.3 million as of December 31, 2022, primarily due
to (i) the dividend payable we recorded relating to the dividend to our existing Shareholders
our Board declared in May 2023 and (ii) an increase in trade and other payables which was
caused by the increase in the number of our restaurants in operation in 2023.
We recorded net current liabilities in 2022, 2023 and 2024, mainly because we utilized
significant portions of cash generated from our operations to expand our restaurant network.
As a result, we recorded significant amounts of (i) lease liabilities in accordance with IFRS 16
and (ii) trade and other payables in relation to renovation costs, purchases food ingredients and
recruitment and employee expenses. In particular, the current portion of lease liabilities
amounted to RMB181.9 million, RMB214.3 million and RMB256.7 million as of
December 31, 2022, 2023 and 2024, respectively.
We believe that our net current liabilities position will be improved with net cash inflows
generated from operating activities once the newly opened restaurants begin to make profit and
from the net proceeds from the Global Offering. In addition, we will also continue to improve
our net current liabilities position by leveraging centralized procurement through our direct
procurement center to control costs, as well as the improved economies of scale as our
restaurant network continues to grow. We also expect to take advantage of our strong brand
recognition to continue negotiating with landlords for more favorable lease terms in lower tier
cities in the future to control our costs.
Furthermore, we will continue to closely monitor our liquidity position to ensure that it
is in line with our business operations and expansion needs. We will also manage the level of
our cash and liquid assets to ensure the availability of sufficient cash flows to meet any planned
or unexpected cash requirements arising from our operations. We will continue to assess the
availability of resources for financing our business needs on an ongoing basis.
Taking into consideration the financial resources presently available to us, including cash
on hand and cash at banks, the available banking facilities, expected cash generated from our
operations and the estimated net proceeds from the Global Offering, our Directors are of the
view that we have sufficient working capital for our present working capital requirements for
at least the next 12 months from the date of this prospectus. As such, we believe that our
business operation and financial condition will not be materially and adversely affected by our
historical net current liabilities position.
FINANCIAL INFORMATION
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INDEBTEDNESS
The table below sets forth the details of our indebtedness as of the dates indicated:
As of December 31,
As of
March 31,
20252022 2023 2024
(RMB in thousands)
(unaudited)
Bank loans
– Unsecured loans 31,000 25,100 – –
– Secured loans – 25,000 – –
31,000 50,100 – –
Lease liabilities
– Short-term lease
liabilities 181,859 214,345 256,728 260,469
– Long-term lease
liabilities 605,933 659,207 846,212 872,006
787,792 873,552 1,102,940 1,132,475
Total indebtedness 818,792 923,652 1,102,940 1,132,475
Bank Loans
As of December 31, 2022, 2023 and 2024 and March 31, 2025, our outstanding bank loans
amounted to RMB31.0 million, RMB50.1 million, nil and nil, respectively. All of our bank
loans were repayable within one year or on demand. The interest rate on our bank loans is
3.50% to 3.85%.
As of the Latest Practicable Date, our unutilized banking facilities amounted to
RMB600.0 million.
Our bank loan agreements contain standard terms and conditions that are customary for
commercial bank loans and there had been no material covenant on any of our outstanding bank
loans. Our Directors confirm that there was no default in payments of our liabilities, difficulty
in obtaining bank loans or other borrowings, and/or breach of covenants during the Track
Record Period and up to the Latest Practicable Date.
FINANCIAL INFORMATION
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Lease Liabilities
We lease rental properties for our restaurants. These leases are typically made for fixed
terms and the longest lease term is between 31 to 32 years. As of December 31, 2022, 2023
and 2024 and the Latest Practicable Date, 185, 245, 322 and 344 of our restaurants were under
hybrid rent arrangements, respectively, which include both variable payment and fixed
payment, and our variable rent payable was tied to the sales at the particular restaurant.
Revenues generated from such restaurants accounted for 66.2%, 67.8%, 67.6% of our total
revenue in 2022, 2023 and 2024, respectively. The leases under hybrid rent arrangements
include a minimum rent payment clause pursuant to which we are required to pay the higher
of the minimum rent or the contingent rent calculated with reference to the revenue of the
restaurant. Other leases were under fixed rent arrangements. The following table shows the
remaining contractual maturities of our lease liabilities as of the dates indicated:
As of December 31,
As of
March 31,
20252022 2023 2024
(RMB in thousands)
(unaudited)
Within one year 181,859 214,345 256,728 260,469
After one year but within
two years 139,603 148,404 187,495 212,095
After two years but within
five years 308,436 336,390 417,395 418,952
After five years 157,894 174,413 241,322 240,959
787,792 873,552 1,102,940 1,132,475
Save as disclosed above, we did not have outstanding indebtedness or any loan capital
issued and outstanding or agreed to be issued, bank overdrafts, loans or similar indebtedness,
liabilities under acceptances (other than normal trade bills), acceptance credits, debentures,
mortgages, charges, finance leases or hire purchase commitments, guarantees or other
contingent liabilities or any covenant in connection therewith as of March 31, 2025, being our
indebtedness statement date. After due and careful consideration, our Directors confirm that,
up to the date of this prospectus, there has been no material change in our indebtedness since
March 31, 2025.
CONTINGENT LIABILITIES
As of March 31, 2025, we did not have significant contingent liabilities.
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
The following table sets forth the key financial ratios as of the dates indicated:
As of December 31,
2022 2023 2024
Current ratio (1) 0.84 0.74 0.91
Quick ratio (2) 0.74 0.69 0.82
Gearing ratio (3) 6.6% 12.1% –
Notes:
(1) Current ratio is calculated by dividing current assets by current liabilities.
(2) Quick ratio is calculated by dividing current assets less inventory by current liabilities.
(3) Gearing ratio equals bank loans divided by total equity and multiplied by 100%.
Current Ratio
Our current ratio decreased from 0.84 as of December 31, 2022 to 0.74 as of December
31, 2023, primarily due to the dividend payable we recorded in 2023 relating to the dividend
to our existing Shareholders our Board declared in May 2023. Our current ratio increased from
0.74 as of December 31, 2023 to 0.91 as of December 31, 2024, primarily due to our strong
cash inflow generated from operating activities as we recorded profit for the period and the
settlement of the dividend payable in June 2024, which significantly decreased our current
liabilities.
Quick Ratio
Our quick ratio decreased from 0.74 as of December 31, 2022 to 0.69 as of December 31,
2023, and increased to 0.82 as of December 31, 2024. Our quick ratio generally follows the
trend of our current ratio and the changes are for the same reasons.
Gearing Ratio
Our gearing ratio increased from 6.6% as of December 31, 2022 to 12.1% as of December
31, 2023. Such increase was primarily due to the increase in bank borrowings. We have repaid
all of our outstanding bank loan recorded as of December 31, 2023 and did not have any
outstanding bank loans as of December 31, 2024. As such, our gearing ratio had decreased to
nil as of December 31, 2024.
FINANCIAL INFORMATION
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OFF-BALANCE SHEET ARRANGEMENTS
We have not entered into, nor do we expect to enter into, any off-balance sheet
arrangements. We also have not entered into any financial guarantees or other commitments to
guarantee the payment obligations of third parties. In addition, we have not entered into any
derivative contracts that are indexed to our equity interests and classified as owners’ equity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an
unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We
do not have any variable interest in any unconsolidated entity that provides financing, liquidity,
market risk or credit support to us or that engages in leasing, hedging or research and
development services with us.
RELATED PARTY TRANSACTIONS
For a discussion of related party transactions, see note 30 to the Accountants’ Report set
forth in Appendix I to this prospectus.
Our Directors believe that the related party transactions were carried out on an arm’s
length basis and will not distort our results during the Track Record Period or make such results
not reflective of our future performance.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of market risks including credit risk and liquidity risk in the
normal course of our business. We manage and monitor these exposures to ensure appropriate
measures are implemented on a timely and effective manner. For details of the risks to which
we are exposed, see Note 28 in “Appendix I – Accountants’ Report” to this prospectus.
LISTING EXPENSES
The estimated total listing expenses to be borne by us (based on an Offer Price of
HK$7.19 per Share and assuming that the Over-allotment Option is not exercised and all
discretionary incentive fees in the Global Offering are paid in full) incurred or to be incurred
in relation to the Global Offering are approximately RMB94.5 million (HK$101.6 million).
Until December 31, 2024, RMB43.9 million (HK$47.2 million) of such listing expenses were
charged as other expenses to our consolidated statement of profit or loss and other
comprehensive income and approximately RMB12.5 million (HK$13.4 million) were
recognized as prepayment, which were expected to be charged against equity upon Listing. We
expect to incur additional listing expenses of RMB38.1 million (HK$41.0 million) after
December 31, 2024 (based on an Offer Price of HK$7.19 per Share), of which RMB15.7
million (HK$16.9 million) are expected to be recognized as listing expenses in 2025, and
RMB22.4 million (HK$24.1 million) is expected to be recognized as a deduction in equity
directly. The listing expenses amounted to 12.0% of our estimated gross proceeds of HK$847.4
million from the Global Offering, based on an Offer Price of HK$7.19 per Offer Share. The
estimated listing expenses consist of (i) underwriting-related expenses (including but not
FINANCIAL INFORMATION
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limited to underwriting fees and commissions) of HK$36.3 million, (ii) fees and expenses of
legal advisers and accountants of HK$48.8 million and (iii) other fees and expenses of
HK$16.5 million. Our Directors do not expect such expenses to have a material adverse impact
on our financial results in 2025.
DIVIDENDS
According to the Articles of Association, our Company may declare dividends in any
currency to be paid to our Shareholders in general meetings, provided that no dividend shall
exceed the amount recommended by our Directors. In addition, our Directors may from time
to time pay to our Shareholders such interim dividends as appeared to our Directors to be
justified by the financial conditions and profits of our Company. No dividend may be declared
or paid other than out of profits and reserves of the Company lawfully available for
distribution, including share premium.
We are a holding company incorporated under the laws of the Cayman Islands. As a result,
the payment and amount of any future dividend will also depend on the availability of
dividends received from our subsidiaries. PRC laws require a foreign-invested enterprise to set
aside at least 10% of its after-tax profits, each year to its general reserves or statutory capital
reserve fund until the aggregate amount of such reserves reaches 50% of its respective
registered capital. Distributions from us and our subsidiaries may also become subject to any
restrictive covenants in bank credit facilities, convertible bond instruments or other agreements
that we or our subsidiaries may enter into in the future.
Our Board did not declare any dividend to our Shareholders during the Track Record
Period, primarily due to concerns of cash preservation for the potential needs in relation to the
COVID-19 pandemic. Considering the ease of the COVID-19 pandemic since the first quarter
of 2023, the robust rebound of our results of operations and the balance of our net current
assets, our Board believes it would be beneficial to distribute dividends to our existing
Shareholders. Therefore, in May 2023, the Board declared a dividend of RMB350 million to
our then Shareholders, namely Time Sonic, Partners Gourmet and Longjing Memory Limited
in respect of our distributable retained profits of our PRC subsidiaries as of December 31,
2022. We had settled such dividend with the cash available at hand in June 2024.
In addition, we intend to declare and distribute by December 2025 a special dividend (the
“Special Dividend ”) in an amount of no less than RMB180 million to our Shareholders
(including our new Shareholders after the Listing) based on our distributable retained profits
from our subsidiaries as of December 31, 2024 and share premium, upon the declaration of the
Special Dividend. We will hold a general meeting after the Listing to approve the declaration
of the Special Dividend and will make announcements in due course in respect of the
declaration and payment of the Special Dividend. The Controlling Shareholders have
undertaken to vote in favor of the Shareholders’ resolution for the declaration and payment of
such Special Dividend.
FINANCIAL INFORMATION
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Dividends declared in the past are not indicative of our future dividend policy. All the
dividends declared have been or will be settled before Listing. The amount of dividends
actually distributed to our Shareholders will depend upon our earnings and financial condition,
operating requirements, capital requirements and any other conditions that our Directors may
deem relevant and will be subject to approval of our Shareholders. Our Board has the absolute
discretion to recommend any dividend. We do not have any pre-determined dividend pay-out
ratio.
DISTRIBUTABLE RESERVES
As of December 31, 2024, our Company had reserves of RMB30.2 million available for
distribution to our members.
NO MATERIAL ADVERSE CHANGE
After due and careful consideration, our Directors confirm that, up to the date of this
prospectus, there has been no material adverse change in our financial and trading position or
prospects since December 31, 2024, and there is no event since December 31, 2024 which
would materially affect the information shown in the Accountants’ Report, the text of which is
set out in Appendix I to this prospectus.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS OF THE GROUP
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group prepared in accordance with Rule 4.29 of the Listing Rules is to illustrate the
effect of the Global Offering on the consolidated net tangible assets of the Group attributable
to equity shareholders of the Company as if the Global Offering had been completed on
December 31, 2024. The unaudited pro forma statement of adjusted consolidated net tangible
assets has been prepared for illustrative purpose only and because of its hypothetical nature,
it may not give a true picture of the financial position of the Group had the Global Offering
been completed as of December 31, 2024 or any future date.
Consolidated
net tangible assets
of the Group
attributable to
equity shareholders
of the Company as
of December 31,
2024
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets of
the Group
attributable
to equity
shareholders of
the Company
Unaudited pro forma
adjusted consolidated net
tangible assets of the Group
attributable to equity
shareholders of
the Company per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price of
HK$7.19 per Share 767,678 737,036 1,504,714 2.23 2.40
FINANCIAL INFORMATION
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Notes:
(1) The consolidated net tangible assets of the Group attributable to equity shareholders of the Company as
of December 31, 2024 have been calculated based on the consolidated total equity of the Company as
of December 31, 2024 of RMB770,733,000 less intangible assets of RMB3,055,000, extracted from the
Accountants’ Report set out in Appendix I to this prospectus.
(2) The estimated net proceeds from the Global Offering are based on an Offer Price of HK$7.19 per Share
and the assumption that there are 117,854,800 newly issued Shares in the Global Offering, after
deduction of the estimated underwriting commissions and other listing related expenses paid and
payable by the Group (excluding the listing expenses charged to profit or loss up to December 31, 2024)
and taking no account of any Shares which may fall to be issued upon the exercise of Over-allotment
Option. The estimated net proceeds of the Global Offering have been converted to RMB at the exchange
rate of HK$1.0000 to RMB0.9295. No representation is made that the Hong Kong dollar amounts have
been, could have been or could be converted into RMB, or vice versa, at that rate or at any other rates.
(3) The number of shares used for the calculation of unaudited pro forma adjusted consolidated net tangible
assets of the Group attributable to equity shareholders of the Company per Share is based on
673,454,800 Shares in issue immediately upon the completion of the Global Offering, assuming that the
Global Offering has been completed on December 31, 2024, and taking no account of any Shares which
may fall to be issued upon the exercise of the Over-allotment Option.
(4) For illustrative purpose, the unaudited pro forma adjusted consolidated net tangible assets of the Group
attributable to equity shareholders of the Company per Share in RMB are converted to the Hong Kong
dollar at the exchange rate of HK$1.00 to RMB0.9295. No representation is made that the Hong Kong
dollar amounts have been, could have been or may be converted to RMB, or vice versa, at the rate or
at any other rates or at all.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into
subsequent to December 31, 2024. The Company intends to declare and distribute by December 2025
a special dividend (the “ Special Dividend ”) in an amount of no less than RMB180 million to its
shareholders (including its new shareholders after the listing of the Company’s shares on the Stock
Exchange) based on its distributable retained profits from the subsidiaries as of December 31, 2024 and
share premium, upon the declaration of the Special Dividend. The Company will make announcements
in due course after the listing of its shares on the Stock Exchange in respect of the declaration and
payment of the Special Dividend. The Controlling Shareholders (including entities controlled by them)
have undertaken to vote in favor of the shareholders’ resolution for the declaration and payment of such
Special Dividend. This effect has not been adjusted in the unaudited pro forma adjusted consolidated net
tangible assets of the Group attributable to equity shareholders of the Company.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
As of the Latest Practicable Date, our Directors confirmed that there are no circumstances
that will give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.
NO SIGNIFICANT INTERRUPTIONS
Our Directors confirm that there have been no interruptions in our business that may have
a material adverse effect on our financial position and results of operations in the 12 months
period prior to the Latest Practicable Date.
FINANCIAL INFORMATION
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FUTURE PLANS
See “Business – Growth Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
We estimate the net proceeds of the Global Offering which we will receive, based on an
Offer Price of HK$7.19 per Offer Share, will be approximately HK$745.7 million, after
deduction of underwriting fees and commissions and estimated expenses payable by us in
connection with the Global Offering and assuming the Over-allotment Option is not exercised.
We intend to use the net proceeds of the Global Offering for the following purposes based
on the Offer Price fixed at HK$7.19 per Offer Share.
 Approximately 63.3%, or HK$471.9 million, will be used to expand our restaurant
network. Our estimated investment costs (including renovation expenses, equipment
costs, rental deposits and start-up costs) for opening each new restaurant on average
amount to approximately RMB2.1 million to RMB3.5 million in Mainland China
and RMB6.0 million to RMB15.0 million overseas mainly depending on the size of
the restaurant. On average, approximately 95% of the investment costs for opening
each restaurant will be used as capital expenditure, such as construction, decoration
and purchase of equipment and furniture; the remaining 5% will be used as
pre-opening expense, including staff salary and training expenses, marketing
expenses and other miscellaneous expenses incurred prior to the opening of the new
restaurant. Set forth below is a breakdown of restaurants we expect to open by
geographical regions from 2025 to 2027. We plan to fund the expansion plan with
a mix of cash flow generated from our operations and the proceeds from the Global
Offering. Please refer to “Business – Expansion Plan and Management” for further
details of our restaurant expansion plan.
2025 2026 2027
Mainland China
Eastern China (1) 44 53 62
Guangdong Province 19 13 10
Northern China
(2) 18 13 19
Other (3) 64 111 109
Overseas (4) 51 01 3
Total 150 200 213
FUTURE PLANS AND USE OF PROCEEDS
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Notes:
(1) Consisting of Zhejiang, Shanghai, Anhui, Jiangsu, Jiangxi and Fujian.
(2) Consisting of Beijing, Hebei and Tianjin.
(3) Consisting of Y unnan, Inner Mongolia, Sichuan, Shandong, Shanxi, Guangxi, Henan, Hubei,
Gansu, Tibet, Guizhou, Chongqing, Shaanxi, Heilongjiang, Liaoning, Jilin, Hunan and Hainan.
(4) For the purpose of this prospectus, consisting of Hong Kong SAR, Southeast Asia and North
America.
Set forth below is a breakdown of restaurants we expect to open by city tiers from
2025 to 2027:
2025 2026 2027
Mainland China
Tier one and new tier one cities 47 56 44
Tier two cities 40 40 43
Tier three and lower tier cities 58 94 113
Overseas
(1) 51 01 3
Total 150 200 213
Note:
(1) For the purpose of this prospectus, consisting of Hong Kong SAR, Southeast Asia and North
America.
Set forth below is a breakdown of restaurants we expect to open by restaurant size
from 2025 to 2027:
2025 2026 2027
Small restaurants (1) 139 183 193
Large restaurants (2) 11 17 20
Total 150 200 213
Notes:
(1) Refers to restaurants with GFA of less than 450 square meters.
(2) Refers to restaurants with GFA of 450 square meters or more.
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Set forth below is a breakdown of estimated costs of new restaurants we plan to open
in the relevant periods:
Investment project Estimated cost
Percentage of
net proceeds
Open around 563 restaurants
from 2025 to 2027 (1)
2025: HK$262.5 million 2025: 35.2% (2)
2026: HK$209.4 million 2026: 28.1% (3)
Total Total: HK$471.9 million Total: 63.3%
Notes:
(1) We expect to fund our restaurant expansion plan in 2027 with cash flow generated from our
operations.
(2) Prior to the Global Offering, we expect to fund our restaurant expansion plan through cash flow
generated from our operations.
(3) We expect to fund our restaurant expansion plan in 2026 with a mix of cash flow generated from
our operations and the proceeds from the Global Offering.
 Approximately 26.3%, or HK$196.3 million, will be used to finance the capital
expenditures required in connection with the establishment of our centralized food
processing facility in Zhejiang Province. Set forth below is a breakdown of the
estimated costs by nature for the establishment of our centralized food processing
facility:
Investment projects Estimated cost
Percentage of
net proceeds
Estimated time frame
of implementation
Acquisition of the land for
the centralized food
processing facility
HK$32.3 million 4.3% 2025: HK$32.3 million
2026: nil
2027 onward: nil
Design, renovation and
construction of the facility
HK$94.4 million 12.7% 2025: HK$94.4 million
2026: nil
2027 onward: nil
Procurement of food
processing equipment
HK$69.6 million 9.3% 2025: nil
2026: HK$51.8 million
2027 onward: HK$17.7 million
Total HK$196.3 million 26.3%
The facility is designed to produce (i) semi-processed meat products, such as
semi-processed roasted chicken for our Green Tea Roasted Chicken (ၠ঩टᕒ); (ii)
bakery products, such as bread for our Bread Temptation (ᙢ̍Ⴐ౅); and (iii)
cleaned and processed ingredients, such as cleaned and processed vegetables.
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The construction of our centralized food processing facility is expected to
commence in the third quarter of 2025 and complete in the second quarter of 2026.
We have entered into a framework agreement with the local government of a town
in Zhejiang Province. Pursuant to the framework agreement, the local government
has agreed to assist us in acquiring land use rights to establish a food processing
facility in the local area. We will continue to explore available parcels of land and
select a suitable location once funding is in place. During the first 12 months of
operation, we expect the facility to supply (i) approximately 7,800 tons of
semi-processed food products and bakery products to a third of our restaurants
nationwide and (ii) approximately 55,000 tons of cleaned and processed ingredients
to all of our restaurants in Eastern China. We expect the facility to reach its
maximum annual production capacity of approximately 165,000 tons by 2028 along
with the expansion of our restaurant network nationwide, and will be able to produce
approximately (i) 44,600 tons of semi-processed products and bakery products and
(ii) 120,400 tons of cleaned and processed ingredients. In the long run, we expect
approximately 90% of the semi-processed food products and bakery products
produced by the facility to be supplied to our restaurants nationwide and the
remaining 10% will be sold to consumers as retail food products. On the other hand,
all cleaned and processed ingredients produced by the facility will be supplied to all
of our restaurants in Eastern China.
We expect the facility to offer us several benefits. First, it will give us direct control
over raw material sourcing and production processes. As a result, we expect to more
efficiently implement our standards on product quality and food safety in our
facility. As we will continue to update 20% of our menu items each year, we also
expect to leverage the facility to develop our new menu items and better protect the
confidentiality of our proprietary recipes. We believe the facility can provide us with
more flexibility in further standardizing our menu items and strengthen our
development capabilities as compared to solely relying on third-party food
processing companies.
In addition, given the production capabilities, the facility will enable us to explore
new retail product offerings, such as semi-processed food products for our signature
dishes that can be easily cooked by consumers with their home appliances, in the
long run. We expect to start offering retail products after 2026. In the meantime, we
expect the facility will further improve the operating efficiency of our restaurant
kitchens by providing semi-processed food products and bakery products, as well as
cleaned, processed and ready to cook food ingredients at lower costs with improved
economies of scale through centralized procurement. For details, see “Business –
Food Processing Facility.”
We have conducted a costs saving analysis comparing the costs of production at the
new facility and the costs of procuring semi-processed food products, bakery
products and cleaned and processed ingredients from third parties. The costs saving
analysis seeks to answer the question whether the new facility will generate
FUTURE PLANS AND USE OF PROCEEDS
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operating profit, assuming that (i) the facility procures raw materials from
third-party suppliers at fair market prices and (ii) the facility sells semi-processed
food products, bakery products and cleaned and processed ingredients to our
restaurants at fair market prices. Any operating profit of the new facility represents
our cost savings compared to procurements from third-party food processing
companies. Our analysis is primarily based on (i) our average historical procurement
amounts per restaurant from third-party food processing companies, (ii) the cost
structure of producing the semi-processed food products, bakery products provided
by CIC based on its market research, (iii) the assumptions that the centralized food
processing plants will be depreciated on a straight line basis over 30 years and the
relevant food processing equipment will be depreciated on a straight line basis over
10 years, and (iv) our estimates as to the number of restaurants that the new facility
will be able to support in each relevant year. The table below sets forth the
calculation of the estimated operating profit margin of our centralized food
processing facility for selling semi-processed food products, bakery products and
cleaned and processed ingredients to our restaurants at fair market prices. Actual
results may differ from the estimates set forth in this table.
Y ear of operation
First year* Second year* Third year*
(RMB in thousands, except for percentages)
Semi-processed food products and
bakery products:
Revenue (1) 287,278 372,926 726,937
Cost of raw materials (2) (215,458) (279,694) (545,203)
Cost of staff (3) (17,237) (22,376) (43,616)
Cost of land acquisition (4) (783) (783) (783)
Depreciation (5) (7,101) (7,101) (7,101)
Utilities expenses (6) (5,746) (7,459) (14,539)
Delivery service expenses (6) (8,618) (11,188) (21,808)
Other expenses (6) (7,182) (9,323) (18,173)
Operating profit 25,153 35,002 75,714
Operating profit margin 8.8% 9.4% 10.4%
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Y ear of operation
First year* Second year* Third year*
(RMB in thousands, except for percentages)
Cleaned and processed
ingredients:
Revenue (1) 142,914 185,548 240,792
Cost of raw materials (2) (100,040) (129,884) (168,555)
Cost of staff (3) (18,579) (24,121) (31,303)
Cost of land acquisition (4) (130) (130) (130)
Depreciation (5) (2,037) (2,037) (2,037)
Utilities expenses (6) (2,858) (3,711) (4,816)
Delivery service expenses (6) (4,287) (5,566) (7,224)
Other expenses (6) (6,431) (8,350) (10,836)
Operating profit 8,551 11,749 15,892
Operating profit margin 6.0% 6.3% 6.6%
Notes:
* For the purpose of the calculation of the estimated operating profit margin of our centralized food
processing facility, the first year, second year and third year means the first 12 months, second
12 months and third 12 months of operation of the facility, respectively.
(1) Estimated using our average historical procurement amounts per restaurant from third-party food
processing companies multiplied by the expected number of restaurants to be supported by the facility
in the relevant year.
(2) Estimated based on the assumption that cost of raw materials will account for 75% and 70% of revenues
for (i) semi-processed food products and bakery products and (ii) cleaned and processed ingredient,
respectively, which assumption is based on market research conducted by CIC.
(3) Estimated based on the assumption that cost of staff will account for 6% and 13% of revenues for (i)
semi-processed food products and bakery products and (ii) cleaned and processed ingredient,
respectively, which assumption is based on market research conducted by CIC.
(4) Estimated based on the assumption that the land use right will be depreciated on a straight line basis
over 30 years.
(5) Estimated based on the assumptions that the centralized food processing plants will be depreciated on
a straight line basis over 30 years and the relevant food processing equipment will be depreciated on
a straight line basis over 10 years.
(6) Estimated based on the assumption the relevant cost will account for a certain percentage of revenues,
which percentage is based on market research conducted by CIC.
Based on the above analysis, we estimate that the facility will generate an operating profit
margin of approximately 6% to 10%. Therefore, we expect to achieve cost savings by
establishing the centralized food processing facility as compared to purchasing from
third-party food processing companies.
FUTURE PLANS AND USE OF PROCEEDS
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We expect the facility to commence operation in the third quarter of 2026. We plan to
engage third-party logistics service providers to support the logistics of the products of the
facility.
 Approximately 5.4%, or HK$40.3 million, will be used over the next three years to
upgrade our IT system and related infrastructure. Set forth below is a breakdown of
estimated costs of each type of IT systems and related infrastructure we intend to
upgrade with our net proceeds from the Global Offering:
Investment projects Estimated costs
Percentage of
net proceeds
Estimated timeline of
implementation
Upgrade our finance,
budgeting and data
management systems
HK$15.5 million 2.1% 2025: HK$5.2 million
2026: HK$9.0 million
2027: HK$1.3 million
Upgrade our restaurant
management system
HK$9.1 million 1.2% 2025: HK$2.1 million
2026: HK$2.2 million
2027: HK$4.8 million
Upgrade our office
management systems
HK$1.9 million 0.2% 2025: HK$1.0 million
2026: HK$0.9 million
2027: nil
Upgrade our supply chain
management systems
HK$8.7 million 1.2% 2025: HK$2.8 million
2026: HK$3.7 million
2027: HK$2.2 million
Upgrade our customer
relations management
systems
HK$5.1 million 0.7% 2025: HK$1.1 million
2026: HK$3.2 million
2027: HK$0.8 million
 Approximately 5.0%, or HK$37.3 million, will be used to provide funding for our
working capital and other general corporate purposes.
To the extent that the net proceeds are not immediately applied to the above purposes and
to the extent permitted by applicable law and regulations, we will only deposit the net proceeds
into short-term interest-bearing accounts at licensed commercial banks and/or other authorized
financial institutions (as defined under the SFO or applicable laws and regulations in other
jurisdictions). We will make an appropriate announcement if there is any change to the above
proposed use of proceeds or if any amount of the proceeds will be used for general corporate
purpose.
FUTURE PLANS AND USE OF PROCEEDS
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Based on the Offer Price at HK$7.19 per Offer Share and assuming the Over-allotment
Option is not exercised, the net proceeds the Selling Shareholder receives will be
approximately HK$348.6 million, after deduction of underwriting fees and commissions and
estimated expenses payable by us in connection with the Global Offering.
In the event that the Over-allotment Option is exercised in full, we and the Selling
Shareholder will receive additional net proceeds of approximately HK$104.6 million and
HK$69.7 million, respectively, based on an Offer Price of HK$7.19 per Share, after deduction
of underwriting fees and commissions and estimated expenses payable by the Selling
Shareholder in connection with the Global Offering.
We will not receive any proceeds from the sale of Sale Shares by the Selling Shareholder
in the Global Offering.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Citigroup Global Markets Asia Limited
CMB International Capital Limited
(in alphabetical order)
GF Securities (Hong Kong) Brokerage Limited
Guoyuan Securities Brokerage (Hong Kong) Limited
(in alphabetical order)
ABCI SECURITIES COMPANY LIMITED
Celestial Securities Limited
China Galaxy International Securities (Hong Kong) Co., Ltd
CMBC Securities Company Limited
First Shanghai Securities Limited
Futu Securities International (Hong Kong) Limited
Long Bridge HK Limited
Morton Securities Limited
Orient Securities (Hong Kong) Limited
Patrons Securities Limited
SDICS International Securities (Hong Kong) Limited
Zhongtai International Securities Limited
(in alphabetical order)
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering initially
16,836,400 Hong Kong Offer Shares for subscription by the public in Hong Kong SAR on and
subject to the terms and conditions of this Prospectus. Subject to the Listing Committee
granting listing of, and permission to deal in, our Shares in issue and to be offered as mentioned
herein and to certain other conditions set out in the Hong Kong Underwriting Agreement, the
Hong Kong Underwriters have agreed severally and not jointly to subscribe or procure
subscribers for their respective applicable proportions of the Hong Kong Offer Shares now
being offered which are not taken up under the Hong Kong Public Offering on and subject to
the terms and conditions of this Prospectus and the Hong Kong Underwriting Agreement. The
Hong Kong Underwriting Agreement is conditional upon and subject to, among other things,
the International Underwriting Agreement having been signed and becoming unconditional and
not having been terminated in accordance with its terms.
UNDERWRITING
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Grounds for Termination
If any of the events set out below occur at any time prior to 8:00 a.m. on the Listing Date,
the Sponsor-Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) shall be entitled by written notice to the Company to terminate the Hong Kong
Underwriting Agreement with immediate effect:
(a) there develops, occurs, exists or comes into effect:
(i) any new Law or any change or development involving a prospective change in
existing Law, or any change or development involving a prospective change in
the interpretation or application thereof by any court or other competent
Authority in or affecting Hong Kong, the PRC, the United States, the United
Kingdom or Cayman Islands (each a “ Relevant Jurisdiction ” and collectively
“Relevant Jurisdictions ”); or
(ii) any change or development involving a prospective change or development, or
any event or circumstances or series of events resulting in or likely to result in
or representing a change or development, or prospective change or
development, in local, national, regional or international financial, political,
military, industrial, economic, trading, currency market, fiscal or regulatory
market conditions, equity securities or any monetary or trading settlement
system or other financial markets (including conditions in stock and bond
markets, money and foreign exchange markets, inter-bank markets and credit
markets) in or affecting any Relevant Jurisdiction; or
(iii) any event or a series of events, in the nature of force majeure (including any
act of government or order of any court, strike, labour dispute, calamity, crisis,
lock-out, fire, explosion, flooding, earthquake, civil commotion, act of war,
outbreak or escalation of hostilities (whether or not war is declared), act of
God, act of terrorism (whether or not responsibility has been claimed),
declaration of a national or international emergency, riot, public disorder,
pandemics or epidemics, including but not limited to COVID-19, SARS, swine
or avian flu, H5N1, H1N1, H1N7, H7N9, Ebola virus, Middle East respiratory
syndrome (MERS) and such related/mutated forms,, in or affecting the
Relevant Jurisdictions, in each case beyond the control of the Hong Kong
Underwriters; or
(iv) any moratorium, suspension or limitation (including any imposition of or
requirement for any minimum or maximum price limit or price range) on
trading in shares or securities generally on the Stock Exchange, the New Y ork
Stock Exchange, the NASDAQ Global Market, the London Stock Exchange,
the Shanghai Stock Exchange or the Shenzhen Stock Exchange; or
UNDERWRITING
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(v) any change or prospective change in or affecting taxation, foreign exchange
controls, currency exchange rates or foreign investment regulations (including
a devaluation of the United States Dollar, Hong Kong dollar or RMB against
any foreign currencies, a change in the system under which the value of the
Hong Kong dollar is linked to that of the United States dollar or RMB is linked
to any foreign currency or currencies) or the implementation of any exchange
control in any Relevant Jurisdiction adversely affecting an investment in the
Shares; or
(vi) any general moratorium on commercial banking activities in Hong Kong
(imposed by the Financial Secretary or the Hong Kong Monetary Authority or
other competent Authority), New Y ork (imposed at Federal or New Y ork State
level or other competent Authority), the PRC, or any other Relevant
Jurisdiction (declared by the relevant authorities) or any disruption in
commercial banking or foreign exchange trading or securities trading or
securities settlement or clearance services, procedures or matters in any
Relevant Jurisdictions; or
(vii) the imposition of economic sanctions, or the withdrawal of trading privileges,
in whatever form, directly or indirectly, by, or for, any Relevant Jurisdiction;
or
(viii) other than with the prior consent of the Sponsor-Overall Coordinators, the
issue or requirement to issue by the Company of a supplemental or amendment
to the Prospectus, Preliminary Offering Circular or Offering Circular or other
documents in connection with the offer and sale of the Shares pursuant to the
Companies (WUMP) Ordinance or the Listing Rules or upon any requirement
or request of the Stock Exchange, the SFC or the CSRC, that in the sole and
absolute opinion of the Sponsor-Overall Coordinators and the Joint Sponsors
is materially adverse to the completion of the Global Offering; or
(ix) any litigation, dispute or legal action or claim being threatened or instigated
against any Group Company or any Director or any member of the Group’s
senior management; or
(x) an Authority or organisation in any Relevant Jurisdiction commencing any
investigation or other action (including arrest or detainment) or proceedings, or
announcing an intention to investigate or take other action (including arrest or
detainment) or proceedings, against any Group Company or any Director or
any member of the Group’s senior management; or
(xi) any of the Director, the chief financial officer, or any other member of the
senior management of the Company vacating his or her office (other than by
reason of death, incapacity or serious illness); or
UNDERWRITING
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(xii) any executive Director being charged with an indictable offence or prohibited
by operation of Laws or otherwise disqualified from taking part in the
management of a company or the commencement by any governmental,
political or regulatory body of any investigation or other action against any
Director in his or her capacity as such, or an announcement by any
governmental, political or regulatory body that it intends to commence any
such investigation or take any such action; or
(xiii) any valid demand by creditors for repayment of indebtedness of any Group
Company or in respect of which the Group Company is liable prior to its stated
maturity; or
(xiv) a petition being presented for the winding-up or liquidation of any Group
Company or any Group Company making any composition or arrangement
with its creditors or entering into a scheme of arrangement or any resolution
being passed for the winding-up of any Group Company or a provisional
liquidator, receiver or manager being appointed over all or part of the assets or
undertaking of any Group Company or anything analogous thereto occurs in
respect of any Group Company; or
(xv) any contravention by any Group Company or any Director of any applicable
Laws including the Companies Ordinance, the PRC Company Law, the Listing
Rules except where waiver for non-compliance has been granted by the Stock
Exchange; or
(xvi) any non-compliance of the Prospectus, the CSRC Fillings or any other
documents used in connection with the contemplated subscription and sale of
the Offer Shares or any aspect of the Global Offering with the Listing Rules,
the CSRC Rules or any other applicable Laws; or
(xvii) any event, act or omission which gives or is likely to give rise to any liability
of the Company or the Indemnified Parties pursuant to the Hong Kong
Underwriting Agreement; or
(xviii) either (a) there has been a breach of any of the representations, warranties,
undertakings or provisions of either the Hong Kong Underwriting Agreement
or the International Underwriting Agreement by the Company or the
Controlling Shareholders or the Selling Shareholder or (b) any of the
representations, warranties and undertakings given by the Company, the
Controlling Shareholders or the Selling Shareholder in the Hong Kong
Underwriting Agreement or the International Underwriting Agreement, as
applicable, is (or would when repeated be) untrue, inaccurate or misleading; or
which, in any such case individually or in the aggregate, in the sole and absolute
opinion of the Joint Sponsors and the Sponsor-Overall Coordinators (for themselves
and on behalf of the Hong Kong Underwriters: (a) is, will be or may be materially
UNDERWRITING
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--- page 336 ---
adverse to, the assets, liabilities, business, general affairs, management, prospects,
shareholder’s equity, profitability, results of operations, position or condition
(financial or otherwise), or performance of any Group Company or the Group as a
whole; or (b) has, will have or is likely to have a material adverse effect on the
success of the Global Offering or the level of Offer Shares being applied for, under
the Hong Kong Public Offering or the level of interest under the International
Offering; or (c) makes, will make it or is likely to make it impracticable or
inadvisable or incapable to proceed with the Hong Kong Public Offering and/or the
International Offering or the delivery of the Offer Shares on the terms and in the
manner contemplated by the Prospectus or the Final Offering Circular; or (d) would
have or is likely to have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or which prevents the processing of applications and/or
payments pursuant to the Global Offering or pursuant to the underwriting thereof;
or
(b) there comes to the notice of any of the Sponsor-Overall Coordinators (for
themselves and on behalf of the Underwriters):
(i) a prohibition (including but not limited to a governmental or regulatory
prohibition by a competent authority) on the Company or the Selling
Shareholder for whatever reason from issuing or selling the Shares (including
the Option Shares) pursuant to the terms of the Global Offering; or
(ii) that any statement contained in any of the Hong Kong Public Offering
Documents, the Application Proof Prospectus, the PHIP , the CSRC Filings and
any notice, announcement, advertisement, communication or other documents
issued or used by or on behalf of the Company in connection with the Hong
Kong Public Offering (including any supplement or amendment thereto, but
excluding information relating to the Underwriters) was, when it was issued or
has become untrue, incomplete, inaccurate, incorrect in any material respect,
misleading or deceptive, or any forecast, estimate, expression of opinion,
intention or expectation expressed in any of the Hong Kong Public Offering
Documents, the CSRC Filings and/or any notice, announcement,
advertisement, communication or any other documents so issued or used is not
fair and honest and made on reasonable grounds or, where appropriate, based
on reasonable assumptions; or
(iii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the Prospectus Date, constitute a material
omission from or material misstatement in the Hong Kong Public Offering
Documents and/or any notice, announcement, advertisement, communication
or any other documents issued or used by or on behalf of the Company in
connection with the Hong Kong Public Offering (including any supplement or
amendment thereto); or
UNDERWRITING
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--- page 337 ---
(iv) any of the experts named in the Prospectus (other than the Joint Sponsors),
have withdrawn their respective consent to the issue of the Prospectus with the
inclusion of their reports, letters, summaries or legal opinions (as the case may
be) and references to their names included in the form and context in which
they respectively appear; or
(v) any material breach of any of the obligations imposed upon the Company or
any other party to the Hong Kong Underwriting Agreement under the Hong
Kong Underwriting Agreement or the International Underwriting Agreement
(other than upon any of the Sponsor-Overall Coordinators, the Joint Sponsors
or the International Underwriters) under the Hong Kong Underwriting
Agreement or the International Underwriting Agreement; or
(vi) (A) the notice of acceptance of the CSRC Filings issued by the CSRC and/or
the results of the CSRC Filings published on the website of the CSRC is
rejected, withdrawn, revoked or invalidated; or (B) other than with the prior
written consent of the Sponsor-Overall Coordinators, the issue or requirement
to issue by the Company of a supplement or amendment to the CSRC Filings
pursuant to the CSRC Rules or upon any requirement or request of the CSRC;
or (C) any non-compliance of the CSRC Filings with the CSRC Rules or any
other applicable Laws; or
(vii) a significant portion of the orders in the book-building process at the time the
International Underwriting Agreement is entered into, or the investment
commitments by any cornerstone investors after signing of the Cornerstone
Agreements, has been withdrawn, terminated or cancelled; or the Company has
withdrawn the Prospectus (and/or any other documents issued or used in
connection with the Global Offering) or the Global Offering; or
(viii) the Admission by the Listing Committee is refused or not granted, other than
subject to customary conditions, on or before the Listing Date, or if granted,
the approval is subsequently withdrawn, cancelled, qualified (other than by
customary conditions), revoked or withheld,
then the Sponsor-Overall Coordinators may (for themselves and on behalf of the
Underwriters), in their sole and absolute discretion and upon giving notice in writing
to the Company, terminate the Hong Kong Underwriting Agreement with immediate
effect.
UNDERWRITING
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Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by the Company
In accordance with Rule 10.08 of the Listing Rules, we have undertaken to the Stock
Exchange that (except pursuant to the Global Offering and the Over-allotment Option) at any
time during the period commencing on the Listing Date and ending on the expiry of the
6-month period after the Listing Date, our Company will not, without the prior consent of the
Stock Exchange and unless in compliance with the requirements of the Listing Rules, allot or
issue or agree to allot or issue any Shares or other securities convertible into equity securities
of our Company (including warrants or other convertible securities and whether or not such
allotment or issuance of shares or securities will be completed within 6 months from the
Listing Date), whether or not of a class already listed, except in certain circumstances
prescribed in Rule 10.08 of the Listing Rules.
Undertakings by the Controlling Shareholders
In accordance with Rule 10.07(1) of the Listing Rules, each of our Controlling
Shareholders has irrevocably and unconditionally undertaken to the Stock Exchange and to our
Company that, except pursuant to the Global Offering, including the Over-allotment Option
and the Stock Borrowing Agreement, it/he/she shall not and shall procure that the relevant
registered holder(s) it/he/she has a beneficial interest shall not, unless in compliance with the
requirements of the Listing Rules:
(i) in the period from the Listing Date and ending on the date (the “ End Date ”) which
is six months from the Listing Date, dispose of, or enter into any agreement to
dispose of, or otherwise create any options, rights, interests or encumbrances in
respect of, any of those securities of our Company in respect of which it/he/she is
shown by this Prospectus to be the beneficial owner (the “ Relevant Securities ”);
and
(ii) in the period of six months commencing on the End Date, dispose of, or enter into
any agreement to dispose of or otherwise create any options, rights, interests, or
encumbrances in respect of the Relevant Securities if, immediately following such
disposal or upon the exercise or enforcement of such options, rights, interests or
encumbrances, it/he/she would cease to be a controlling shareholder (as defined in
the Listing Rules) of our Company.
Pursuant to Note (2) to Rule 10.07(2) of the Listing Rules, Rule 10.07 does not prevent
a Controlling Shareholder from using the Shares beneficially owned by it/him/her as security
(including a charge or pledge) in favor of an authorized institution (as defined in the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial loan.
UNDERWRITING
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In accordance with Note (3) to Rule 10.07(2) of the Listing Rules, our Controlling
Shareholders have further undertaken to the Stock Exchange and to our Company that within
the 12 months from the Listing Date, he/she shall:
(i) when it/he/she or the relevant registered holder(s) controlled by it/him/her pledge or
charge any Shares beneficially owned by it/him/her in favor of an authorized
institution (as defined in the Banking Ordinance, Chapter 155 of the Laws of Hong
Kong), pursuant to Note 2 to Rule 10.07(2) of the Listing Rules, immediately inform
our Company in writing of such pledge or charge together with the number of Shares
so pledged or charged; and
(ii) when it/he/she receive indications, either verbal or written, from the pledgee or
chargee of any Shares that any of the pledged or charged Shares will be disposed of,
immediately inform our Company in writing of such indications.
We will inform the Stock Exchange as soon as we have been informed of the matters
referred to in paragraphs (i) and (ii) above (if any) by any of our Controlling Shareholders and
make a public disclosure in relation to such information by way of an announcement in
accordance with the Listing Rules.
Undertaking by Partners Gourmet
Partners Gourmet agrees and undertakes to each of the Joint Sponsors and the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers and the Underwriters
that it shall not, at any time during the First Six-Month Period,
(i) offer, pledge, charge, sell, mortgage, lend, create, transfer, assign or otherwise
dispose, grant any option, warrant or right to purchase, sell, lend or otherwise
transfer or dispose of, either directly or indirectly, conditionally or unconditionally,
or create any third party right of whatever nature over any and all Shares, as
reclassified, redesignated and subdivided from the Shares as held by Partners
Gourmet on the date of this undertaking in the manner as set out in the Prospectus
as if the reclassification, redesignation and subdivision has been completed on the
date of this undertaking, other than any Shares to be disposed of by Partners
Gourmet pursuant to the Global Offering (the “ Relevant Shares ”) or any other
securities convertible into or exercisable or exchangeable for such Relevant Shares,
or that represent the right to receive, such Relevant Shares, or any interest in them;
or
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(ii) enter into any option, swap or other arrangement that transfers to another, in whole
or in part, any beneficial ownership of the Relevant Shares or any of the economic
consequences or incidents of ownership of Relevant Shares or any other securities
of the Company or any interest therein or which transfers or derives any significant
part of its value from such Relevant Shares; or
(iii) enter into any transaction, directly or indirectly, with the same economic effect as
any transaction specified in paragraph (i) or (ii) above; or
(iv) offer to or agree or contract to effect or publicly disclose that it will or may enter
into any transaction specified in paragraph (i), (ii) or (iii) above, or
(v) permit or cause a change in control of any company or entity holding or controlling
(directly or indirectly) any Relevant Shares,
and it shall procure that no company or entity holding or controlling (directly or
indirectly) any Relevant Shares or any nominee or trustee holding in trust for Partners
Gourmet will dispose of any Relevant Shares.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by the Company
We have also undertaken to each of the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Sponsors, the Joint Bookrunners, the
Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters that
except pursuant to the Global Offering (including pursuant to the Over-allotment Option, at any
time after the date of the Hong Kong Underwriting Agreement up to and including the date
falling six months after the Listing Date (the “ First Six-Month Period ”), it will not, and each
of the Controlling Shareholders shall procure that our Company will not without the prior
written consent of the Joint Sponsors and the Sponsor-Overall Coordinators (for themselves
and on behalf of the Hong Kong Underwriters) (and such consent shall not be unreasonably
withheld or delayed) and unless in compliance with the requirements of the Listing Rules:
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, mortgage, charge, pledge, hypothecate, hedge, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create an Encumbrance over, or contract or agree to transfer
or dispose of or create an Encumbrance over, either directly or indirectly,
conditionally or unconditionally, any Shares or any other equity securities of the
Company or any interest in any of the foregoing (including any equity securities
convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to subscribe for or purchase, any Shares or
any other equity securities of the Company);
UNDERWRITING
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(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any Shares or any other
equity securities of the Company or any interest in any of the foregoing (including
any equity securities convertible into or exchangeable or exercisable for or that
represent the right to receive, or any warrants or other rights to subscribe for or
purchase, any Shares or any other equity securities of the Company);
(iii) enter into any transaction with the same economic effect as any transaction
described in (i) or (ii) above; or
(iv) offer to or agree to do any of the foregoing or announce any intention to do so,
in each case, whether any of the foregoing transactions is to be settled by delivery of share
capital or such other equity securities, in cash or otherwise (whether or not the issue of such
share capital or other equity securities will be completed within the First Six-Month Period).
We further agree that, in the event our Company is allowed to enter into any of the transactions
described in (i), (ii) or (iii) above or offers to or agrees to or announces any intention to effect
any such transaction during the period of six months commencing on the date on which the
First Six-Month Period expires (the “ Second Six-Month Period ”), we will take all reasonable
steps to ensure that such an issue or disposal will not, and no other act of our Company will,
create a disorderly or false market for any Shares or other securities of our Company.
Undertakings by the Controlling Shareholders
Each of the Controlling Shareholders agrees and undertakes to our Company and each of
the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the
Joint Sponsors, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwriters that except pursuant to the Global Offering
(including pursuant to the Over-allotment Option), at any time after the date of the Hong Kong
Underwriting Agreement up to and including the date falling the First Six-Month Period,
it/he/she will not, without the prior written consent of the Sponsor-Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters):
(a) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate,
hedge, lend, grant or sell any option, warrant, contract or right to purchase, grant or
purchase any option, warrant, contract or right to sell, or otherwise transfer or
dispose of or create an Encumbrance over, or agree to transfer or dispose of or create
an Encumbrance over, either directly or indirectly, conditionally or unconditionally,
any Shares or any other securities of the Company or any interest in any of the
foregoing (including any securities convertible into or exchangeable or exercisable
for or that represent the right to receive, or any warrants or other rights to purchase,
any Shares or any other securities of the Company) beneficially owned by it as at
the Listing Date (the “ Locked-up Securities ”);
UNDERWRITING
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(b) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any Locked-up Securities;
(c) enter into any transaction with the same economic effect as any transaction specified
in (a) or (b) above; or
(d) offer to or agree to do any of the foregoing or announce any intention to do so,
in each case, whether any of the foregoing transactions is to be settled by delivery of share
capital or such other securities, in cash or otherwise (whether or not the issue of such
share capital or other equity securities will be completed within the First Six-Month
Period); and
(i) during the Second Six-Month Period, each of our Controlling Shareholders will not
enter into any transaction described in paragraphs (a), (b) and (c) above or agree or
contract to or publicly announce any intention to enter into any such transaction if,
immediately following such transaction, the shareholding of Time Sonic in the
Company will be reduced to below 30%; and
(ii) until the expiry of the Second Six-Month Period, in the event that he/she enters into
any such transactions specified in paragraphs (a), (b) or (c) above or agrees or
contracts to, or publicly announces an intention to enter into any such transactions,
each of our Controlling Shareholders will take all reasonable steps to ensure that
he/she will not create a disorderly or false market in the securities of our Company.
The restrictions above do not apply to any pledge or charge of any Shares or other
equity securities of the Company, as applicable, or any interest in any of the
foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any Shares or other equity securities of the Company)
after the Global Offering in favor of an authorized institution as defined in the
Banking Ordinance (Cap. 155 of the Laws of Hong Kong) for a bona fide
commercial loan.
Indemnity
Each of the Company and the Controlling Shareholders jointly and severally, and the
Selling Shareholder has severally undertaken, from time to time, to indemnify, among others,
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Sponsors, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwriters for certain losses which they may suffer,
including losses arising from the performance of their obligations under the Underwriting
Agreements and any breach by us of the Underwriting Agreements, as the case may be.
UNDERWRITING
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The International Offering
In connection with the International Offering, it is expected that our Company, our
Controlling Shareholders and the Selling Shareholder will enter into the International
Underwriting Agreement with the International Underwriters. Under the International
Underwriting Agreement, the International Underwriters will, subject to certain conditions set
out therein, severally and not jointly, agree to procure subscribers or purchasers for the
International Offer Shares, failing which they agree to subscribe for or purchase their
respective proportions of the International Offer Shares which are not taken up under the
International Offering.
Each of the Company and the Selling Shareholder is expected to grant to the International
Underwriters the Over-allotment Option, exercisable by the Sponsor-Overall Coordinators on
behalf of the International Underwriters at any time from the date of the International
Underwriting Agreement until 30 days after the last day for the lodging of applications under
the Hong Kong Public Offering, to require the Company to issue and allot, and require the
Selling Shareholder to sell in aggregate up to an aggregate of 25,254,400 additional Offer
Shares representing approximately 15% of the initial Offer Shares, at the Offer Price to cover,
among other things, over-allocations (if any) in the International Offering.
It is expected that the International Underwriting Agreement may be terminated on
similar grounds as the Hong Kong Underwriting Agreement. Potential investors should note
that if the International Underwriting Agreement is not entered into, or is terminated, the
Global Offering will not proceed.
Total Commission and Expenses
The Underwriters will receive an underwriting commission of 3% of the aggregate Offer
Price of all the Offer Shares (including any Offer Shares to be issued pursuant to the exercise
of the Over-allotment Option) (the “ Fixed Fees ”), out of which they will pay any
sub-underwriting commissions and other fees.
The Company and the Selling Shareholder may, at their sole discretion, pay to any one
or more of the Underwriters a discretionary incentive fee of an aggregate of up to 1% of the
Offer Price for each New Share and Sale Share, respectively (the “ Discretionary Fees ”).
Assuming that the Discretionary Fees are paid in full, the ratio of the Fixed Fees and
Discretionary Fees payable is therefore approximately 61.5:38.5.
For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering,
the underwriting commission will not be paid to the Hong Kong Underwriters but will instead
be paid, at the rate applicable to the International Offering, and such commission will be paid
to the relevant International Underwriters.
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The aggregate underwriting commissions and fees payable by the Company, together with
the Stock Exchange listing fees, the SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee, legal and other professional fees and printing and all other expenses
relating to the Global Offering (collectively, the “ Commissions and Fees ”) are estimated to be
approximately HK$36.3 million (based on an Offer Price of HK$7.19 per Offer Share and
assuming the Over-allotment Option is not exercised).
The Selling Shareholder shall bear, and be responsible for the payment of, all the
underwriting commission, incentive fee (if any), the SFC transaction levy, the AFRC
transaction levy, the Stock Exchange trading fee and the stamp duty payable by the Selling
Shareholder in connection with the Sale Shares. Such listing expenses payable by the Selling
Shareholder in connection with the sale of the Sale Shares (based on the Offer Price of
HK$7.19 per Share) are estimated to be HK$14.6 million.
Each of the Company, the Controlling Shareholders and the Selling Shareholder has
agreed to indemnify the Hong Kong Underwriters and International Underwriters for certain
losses which they may suffer, including liabilities under the U.S. Securities Act, losses incurred
arising from their performance of their obligations under the Underwriting Agreements and any
breach by our Company of the Underwriting Agreements.
Activities by Syndicate Members
We describe below a variety of activities that underwriters of the Hong Kong Public
Offering and, together referred to as “Syndicate Members”, may each individually undertake,
and which do not form part of the underwriting or the stabilizing process. When engaging in
any of these activities, it should be noted that the Syndicate Members are subject to
restrictions, including the following:
The Syndicate Members (except for CMB International Global Markets Limited as the
Stabilizing Manager, its affiliates or any person acting for it) must not, in connection with the
distribution of the Offer Shares, effect any transactions (including issuing or entering into any
option or other derivative transactions relating to the Offer Shares), whether in the open market
or otherwise, with a view to stabilizing or maintaining the market price of any of the Offer
Shares at levels other than those which might otherwise prevail in the open market; and all of
them must comply with all applicable laws, including the market misconduct provisions of the
SFO, the provisions prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In relation
to the Shares, those activities could include acting as agent for buyers and sellers of the Shares,
entering into transactions with those buyers and sellers in a principal capacity, proprietary
trading in the Shares and entering into over the counter or listed derivative transactions or
UNDERWRITING
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listed and unlisted securities transactions (including issuing securities such as derivative
warrants listed on a stock exchange) which have the Shares as their or part of their underlying
assets. Those activities may require hedging activity by those entities involving, directly or
indirectly, buying and selling the Shares. All such activities could occur in Hong Kong SAR
and elsewhere in the world and may result in the Syndicate Members and their affiliates
holding long and/or short positions in the Shares, in baskets of securities or indices including
the Shares, in units of funds that may purchase the Shares, or in derivatives related to any of
the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the Shares as their or part of their underlying assets, whether on the Stock Exchange
or on any other stock exchange, the rules of the relevant exchange may require the issuer of
those securities (or one of its affiliates or agents) to act as a market maker or liquidity provider
in the security, and this will also result in hedging activity in the Shares in most cases.
All of these activities may occur both during and after the end of the stabilizing period
described in the sections headed “Structure and Conditions of the Global Offering – The
International Offering – Over-allotment Option” and “Structure and Conditions of the Global
Offering – The International Offering – Stabilization”. These activities may affect the market
price or value of the Shares, the liquidity or trading volume in the Shares and the volatility of
their share price, and the extent to which this occurs from day to day cannot be estimated.
Hong Kong Underwriters’ Interests in our Company
Save for its obligations under the Hong Kong Underwriting Agreement, none of the Hong
Kong Underwriters has any shareholding interests in our Company or the right or option
(whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for
securities in our Company.
Following the completion of the Global Offering, the Underwriters and their affiliated
companies may hold a certain portion of the Shares as a result of fulfilling their obligations
under the Underwriting Agreements.
Other Services to our Company
Certain of the Overall Coordinators, the Hong Kong Underwriters or their respective
affiliates have, from time to time, provided and expect to provide in the future investment
banking and other services to our Company and our respective affiliates, for which such
Overall Coordinators, Hong Kong Underwriters or their respective affiliates have received or
will receive customary fees and commissions.
UNDERWRITING
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Other Services Provided by the Overall Coordinators, the Joint Bookrunners and the
Underwriters
The Overall Coordinators, the Joint Bookrunners and the Underwriters may in their
ordinary course of business provide financing to investors subscribing for the Offer Shares
offered by this Prospectus. Such Overall Coordinators, Joint Bookrunners and Underwriters
may enter into hedges and/or dispose of such Offer Shares in relation to the financing which
may have a negative impact on the trading price of our Shares.
Over-Allotment and Stabilization
Details of the arrangements relating to the stabilization and Over-allotment Option are set
forth in the sections headed “Structure and Conditions of the Global Offering – The
International Offering – Stabilization”, and “Structure and Conditions of the Global Offering
– The International Offering – Over-allotment Option”.
Sponsor’s Independence
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors set
out in Rule 3A.07 of the Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This Prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering comprises:
(i) the Hong Kong Public Offering of initially 16,836,400 Offer Shares in Hong Kong
as described below in the paragraph headed “– The Hong Kong Public Offering”
below; and
(ii) the International Offering of initially 151,527,600 Offer Shares (comprising
101,018,400 New Shares and 50,509,200 Sale Shares) outside the United States in
reliance on Regulation S under the U.S. Securities Act. At any time from the date
of the International Underwriting Agreement until 30 days after the last day for the
lodging of applications under the Hong Kong Public Offering, the Sponsor-Overall
Coordinators, as representative of the International Underwriters, have an option to
require the Company to issue and allot, and require the Selling Shareholder to sell
in aggregate up to 25,254,400 additional Offer Shares, representing approximately
15% of the initial number of Offer Shares to be offered in the Global Offering, at
the Offer Price to, among other things, cover over-allocations in the International
Offering, if any. If the Over-allotment Option is exercised in full, the additional
Offer Shares will represent approximately 3.67% of the Company’s enlarged share
capital immediately following the completion of the Global Offering and the
exercise of the Over-allotment Option. In the event that the Over-allotment Option
is exercised, a press announcement will be made.
Investors may apply for Offer Shares under the Hong Kong Public Offering or apply for
or indicate an interest for Offer Shares under the International Offering, but may not do both.
The Offer Shares will represent approximately 25% of the enlarged issued share capital
of the Company immediately after completion of Global Offering (without taking into
consideration our Shares that may be allotted and issued or sold upon the exercise of the
Over-allotment Option. If the Over-allotment Option is exercised in full, the Offer Shares will
represent approximately 28.12% of the enlarged issued share capital of the Company
immediately after completion of the Global Offering and the exercise of the Over-allotment
Option as set out in the paragraph headed “– The International Offering – Over-allotment
Option” below.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallocation as described in the paragraph headed
“– The Hong Kong Public Offering – Reallocation and clawback” below.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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THE HONG KONG PUBLIC OFFERING
Number of Offer Shares initially offered
Our Company is initially offering 16,836,400 Offer Shares for subscription by the public
in Hong Kong SAR at the Offer Price, representing 10% of the total number of Offer Shares
initially available under the Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong SAR as
well as to institutional and professional investors. The Hong Kong Offer Shares will represent
approximately 2.5% of the Company’s registered share capital immediately after completion of
the Global Offering (without taking into consideration our Shares that may be allotted and
issued or sold upon the exercise of the Over-allotment Option). Professional investors
generally include brokers, dealers, 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.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in
the paragraph headed “– The International Offering – Conditions of the Hong Kong Public
Offering” below.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
would mean that some applicants may receive a higher allocation than others who have applied
for the same number of Hong Kong Offer Shares, and those applicants who are not successful
in the ballot may not receive any Hong Kong Offer Shares.
The total number of Offer Shares initially available under the Hong Kong Public Offering
(after taking account of any reallocation referred to below) is to be divided into two pools for
allocation purposes: 8,418,400 Offer Shares for pool A and 8,418,000 Offer Shares for pool B.
The Offer Shares in pool A will be allocated on an equitable basis to applicants who have
applied for Offer Shares with an aggregate subscription price of HK$5 million (excluding the
brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy
payable) or less. The Offer Shares in pool B will be allocated on an equitable basis to
applicants who have applied for Offer Shares with an aggregate subscription price of more than
HK$5 million (excluding the brokerage, SFC transaction levy, 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 Offer Shares in one (but not both) of the pools are undersubscribed, the surplus Offer Shares
will be transferred to the other pool to satisfy demand in this other pool and be allocated
accordingly. For the purpose of this paragraph only, the “price” for Offer Shares means the
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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price payable on application therefore. Applicants can only receive an allocation of Offer
Shares from either pool A or pool B but not from both pools. Multiple or suspected multiple
applications and any application for more than 8,418,000 Offer Shares are liable to be rejected.
Reallocation and clawback
The allocation of Shares between the Hong Kong Public Offering and the International
Offering is subject to adjustment. Paragraph 4.2 of Practice 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 Hong Kong Offer Shares to certain percentages of the total number of Offer
Shares to be offered in the Global Offering if certain prescribed total demand levels in the
Hong Kong Public Offering are to the effect as further described below (the “ Mandatory
Reallocation ”):
(i) 16,836,400 Offer Shares are initially available in the Hong Kong Public Offering,
representing 10% of the Offer Shares initially available under the Global Offering;
in the event that the International Offer Shares are fully subscribed or oversubscribed,
(ii) if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 15 times or more but less than 50 times the number of the Offer
Shares initially available for subscription under the Hong Kong Public Offering,
then Offer Shares will be reallocated to the Hong Kong Public Offering from the
International Offering, so that the total number of Offer Shares available under the
Hong Kong Public Offering will be 50,509,200 Offer Shares, representing 30% of
the Offer Shares initially available under the Global Offering;
(iii) if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 50 times or more but less than 100 times the number of the Offer
Shares initially available for subscription under the Hong Kong Public Offering,
then Offer Shares will be reallocated to the Hong Kong Public Offering from the
International Offering, so that the total number of Offer Shares available under the
Hong Kong Public Offering will be 67,345,600 Offer Shares, representing 40% of
the Offer Shares initially available under the Global Offering; and
(iv) if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 100 times or more than the number of the Offer Shares initially
available for subscription under the Hong Kong Public Offering, then Offer Shares
will be reallocated to the Hong Kong Public Offering from the International
Offering, so that the total number of Offer Shares available under the Hong Kong
Public Offering will be 84,182,000 Offer Shares, representing 50% of the Offer
Shares initially available under the Global Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Sponsor-Overall Coordinators (for themselves and on behalf of the
Underwriters) and the Joint Sponsors. Subject to the foregoing paragraph, the Sponsor-Overall
Coordinators and the Joint Sponsors may in their discretion reallocate Offer Shares from the
International Offering to the Hong Kong Public Offering to satisfy valid applications under the
Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not fully
subscribed for, the Sponsor-Overall Coordinators and the Joint Sponsors have the authority to
reallocate all or any unsubscribed Hong Kong Offer Shares to the International Offering, in
such proportions as the Sponsor-Overall Coordinators and the Joint Sponsors deem
appropriate.
In addition to any Mandatory Reallocation which may be required, the Sponsor-Overall
Coordinators (for themselves and on behalf of the Underwriters) and the Joint Sponsors may,
at their discretion, reallocate Offer Shares initially allocated for the International Offering to
the Hong Kong Public Offering to satisfy valid applications in Pool A and Pool B under the
Hong Kong Public Offering. In the event that (i) the International Offer Shares are
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times; or (ii) the International Offer Shares are fully subscribed
or oversubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed as
to less than 15 times of the number of Hong Kong Offer Shares initially available under the
Hong Kong Public Offering based on the Offer Price of HK$7.19, up to 16,836,400 Offer
Shares may be reallocated to the Hong Kong Public Offering from the International Offering,
so that the total number of the Offer Shares available under the Hong Kong Public Offer will
be increased to 33,672,800 Offer Shares, representing 20% of the number of the Offer Shares
initially available under the Global Offering (before any exercise of the Over-allotment
Option).
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him that he and any person(s) for
whose benefit he is making 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 Offer Shares under
the International Offering, and such applicant’s application is liable to be rejected if the said
undertaking and/or confirmation is breached and/or untrue (as the case may be) or it has been
or will be placed or allocated Offer Shares under the International Offering.
References in this Prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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THE INTERNATIONAL OFFERING
Number of Offer Shares offered
Subject to reallocation as described above and the Over-allotment Option, the
International Offering will consist of an aggregate of 151,527,600 Offer Shares (comprising
101,018,400 New Shares and 50,509,200 Sale Shares) to be initially offered by us.
Allocation
The International Offering 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. Professional investors generally include brokers, dealers,
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 International Offering will be effected in accordance
with the “book-building” process described in the paragraph headed “– The International
Offering – Pricing of the Global Offering” 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 Offer Shares, and/or hold or sell its Offer Shares, after the listing of the Offer
Shares on the Stock Exchange. Such allocation is intended to result in a distribution of the
Offer 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 our Shareholders as a whole.
The Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters)
may require any investor who has been offered Offer Shares under the International Offering,
and who has made an application under the Hong Kong Public Offering to provide sufficient
information to the Sponsor-Overall Coordinators so as to allow them to identify the relevant
application under the Hong Kong Public Offering and to ensure that it is excluded from any
application of Offer Shares under the Hong Kong Public Offering.
Over-allotment Option
In connection with the Global Offering, we are expected to grant an Over-allotment
Option to the International Underwriters exercisable by the Sponsor-Overall Coordinators on
behalf of the International Underwriters.
Pursuant to the Over-allotment Option, the Sponsor-Overall Coordinators have the right,
exercisable at any time from the date of the International Underwriting Agreement until 30
days after the last day for the lodging of applications under the Hong Kong Public Offering,
to require the Company to issue and allot, and require the Selling Shareholder to sell in
aggregate up to 25,254,400 additional Offer Shares, representing approximately 15% of the
initial Offer Shares, at the Offer Price to cover, among other things, over-allocation in the
International Offering, if any. If the Over-allotment Option is exercised in full, the additional
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 352 ---
Offer Shares will represent approximately 3.67% of the Company’s share capital immediately
following the completion of the Global Offering and the full exercise of the Over-allotment
Option. In the event that the Over-allotment Option is exercised, an announcement will be
made.
Stock Borrowing Agreement
In order to facilitate the settlement of over-allocations, if any, in connection with the
Global Offering, the Stabilizing Manager (or its affiliates or any person acting for it) may
choose to borrow up to 25,254,400 Shares (being the maximum number of Shares which may
be sold pursuant to the exercise of the Over-allotment Option and representing approximately
15.0% of the number of Offer Shares initially available under the Global Offering) from Time
Sonic, pursuant to the Stock Borrowing Agreement, which is expected to be entered into
between the Stabilizing Manager (or its affiliates or any person acting for it) and Time Sonic
on or about May 14, 2025. If the Stock Borrowing Agreement is entered into, the borrowing
of Shares will only be effected by the Stabilizing Manager (or its affiliates or any person acting
for it) for the settlement of over-allocations in the International Offering and such borrowing
arrangement is not subject to the restrictions of Rule 10.07(1)(a) of the Listing Rules, provided
that the requirements set out in Rule 10.07(3) of the Listing Rules, being that the Stock
Borrowing Agreement will be for the sole purpose of covering any short position prior to the
exercise of the Over-allotment Option in connection with the International Offering, are
complied with.
The same number of Shares so borrowed must be returned to Time Sonic on the third
business day following the earlier of (a) the last day the Over-allotment Option may be
exercised and (b) the day on which the Over-allotment Option is exercised. The Shares
borrowing arrangement described above will be affected in compliance with all applicable
laws, rules and regulatory requirements. No payment will be made to Time Sonic by the
Stabilizing Manager (or its affiliates or any person acting for it) in relation to such Shares
borrowing arrangement.
Stabilization
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market, during a specified period of time, to retard and, if possible, prevent,
any decline in the market price of the securities below the Offer Price. In Hong Kong SAR and
certain other jurisdictions, the price at which stabilization is effected is not permitted to exceed
the Offer Price.
In connection with the Global Offering, the Stabilizing Manager or any person acting for
them, on behalf of the Underwriters, may over-allocate or effect short sales or any other
stabilizing transactions with a view to stabilizing or maintaining the market price of the Shares
at a level higher than that which might otherwise prevail in the open market. Short sales
involve the sale by the Stabilizing Manager of a greater number of Shares than the
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 353 ---
Underwriters are required to purchase in the Global Offering. “Covered” short sales are sales
made in an amount not greater than the Over-allotment Option. The Stabilizing Manager may
close out the covered short position by either exercising the Over-allotment Option to purchase
additional Shares or purchasing Shares in the open market. In determining the source of the
Shares to close out the covered short position, the Stabilizing Manager will consider, among
others, the price of Shares in the open market as compared to the price at which they may
purchase additional Shares pursuant to the Over-allotment Option. Stabilizing transactions
consist of certain bids or purchases made for the purpose of preventing or retarding a decline
in the market price of the Shares while the Global Offering is in progress. Any market
purchases of the Shares may be effected on any stock exchange, including the Stock Exchange,
any over-the-counter market or otherwise, provided that they are made in compliance with all
applicable laws and regulatory requirements. However, there is no obligation on the Stabilizing
Manager or any person acting for it to conduct any such stabilizing activity, which if
commenced, will be done at the absolute discretion of the Stabilizing Manager and may be
discontinued at any time. Any such stabilizing activity is required to be brought to an end
within 30 days after the last day for the lodging of applications under the Hong Kong Public
Offering. The number of the Shares that may be over-allocated will not exceed the number of
the Shares that may be sold under the Over-allotment Option, namely, 25,254,400 Shares,
which is approximately 15% of the number of Offer Shares initially available under the Global
Offering, in the event that the whole or part of the Over-allotment Option is exercised.
In Hong Kong SAR, stabilizing activities must be carried out in accordance with the
Securities and Futures (Price Stabilizing) Rules. Stabilizing actions permitted pursuant to the
Securities and Futures (Price Stabilizing) Rules include:
(a) over-allocation for the purpose of preventing or minimising any reduction in the
market price;
(b) selling or agreeing to sell the Shares so as to establish a short position in them for
the purpose of preventing or minimising any deduction in the market price;
(c) subscribing, or agreeing to subscribe, for the Shares pursuant to the Over-allotment
Option, in order to close out any position established under (a) or (b) above;
(d) purchasing, or agreeing to purchase, the Shares for the sole purpose of preventing
or minimising any reduction in the market price;
(e) selling the Shares to liquidate a long position held as a result of those purchases; and
(f) offering or attempting to do anything described in (b), (c), (d) and (e) above.
Stabilizing actions by the Stabilizing Manager, or any person acting for it, will be entered
into in accordance with the laws, rules and regulations in place in Hong Kong SAR on
stabilization.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 354 ---
As a result of effecting transactions to stabilize or maintain the market price of the Shares,
the Stabilizing Manager, or any person acting for it, may maintain a long position in the Shares.
The size of the long position, and the period for which the Stabilizing Manager, or any person
acting for it, will maintain the long position is at the discretion of the Stabilizing Manager and
is uncertain. In the event that the Stabilizing Manager liquidates this long position by making
sales in the open market, this may lead to a decline in the market price of the Shares.
Stabilizing action by the Stabilizing Manager, or any person acting for it, is not permitted
to support the price of the Shares for longer than the stabilizing period, which begins on the
day on which trading of the Shares commences on the Stock Exchange and ends on the thirtieth
day after the last day for the lodging of applications under the Hong Kong Public Offering. The
stabilizing period is expected to end on Thursday, June 12, 2025. As a result, demand for the
Shares, and their market price, may fall after the end of the stabilizing period. These activities
by the Stabilizing Manager may stabilize, maintain or otherwise affect the market price of the
Shares. As a result, the price of the Shares may be higher than the price that otherwise may
exist in the open market. Any stabilizing action taken by the Stabilizing Manager, or any person
acting for it, may not necessarily result in the market price of the Shares staying at or above
the Offer Price either during or after the stabilizing period. Bids for or market purchases of the
Shares by the Stabilizing Manager, or any person acting for it, may be made at a price at or
below the Offer Price and therefore at or below the price paid for the Shares by purchasers. A
public announcement in compliance with the Securities and Futures (Price Stabilizing)
Ordinance will be made within seven days of the expiration of the stabilizing period.
Pricing of the Global Offering
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they 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 around, the last day for lodging applications under the Hong Kong Public Offering.
The Offer Price will be HK$7.19 per Offer Share unless otherwise announced.
The Sponsor-Overall Coordinators (on behalf of the Hong Kong Underwriters) may,
where considered appropriate, based on the level of interest expressed by prospective
professional and institutional investors during the book-building process, and with our consent,
reduce the number of Offer Shares and/or the Offer Price below as stated in this prospectus at
any time on or prior to the morning of the last day for lodging applications under the Hong
Kong Public Offering.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 355 ---
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 Hong Kong Public Offering, cause there to be published on the website of our
Company ( www.china-greentea.com.cn ) and the website of the Stock Exchange
(www.hkexnews.hk ) notices of the reduction. As soon as practicable of such reduction of the
number of Offer Shares and/or the Offer Price, our Company will cancel the Global Offering
and relaunch the offer and issue a supplemental Prospectus updating investors of such
reduction together with an update of all financial and other information in connection with such
change. Upon issue of such a notice, the revised Offer Price will be final and conclusive.
Applicants should have regard to the possibility that any announcement of a reduction in
the number of Offer Shares and/or the Offer Price may not be made until the last day for
lodging applications under the Hong Kong Public Offering. Such notice will also include
confirmation or revision, as appropriate, of the working capital statement and the Global
Offering 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 between our Company and the Sponsor-Overall Coordinators, will under no
circumstances be revised as stated in this prospectus.
In the event of a reduction in the number of Offer Shares, the Sponsor-Overall
Coordinators may, at their discretion, reallocate the number of Offer Shares to be offered in the
Hong Kong Public Offering and the International Offering, provided that the number of Offer
Shares comprised in the Hong Kong Public Offering shall not be less than 10.0% of the total
number of Offer Shares available under the Global Offering. The Offer Shares to be offered in
the Hong Kong Public Offering and the Offer Shares to be offered in the International Offering
may, in certain circumstances, be reallocated between these offerings at the discretion of the
Sponsor-Overall Coordinators.
Save for any subsequent changes in the number of Offer Shares and/or the Offer Price,
the level of indications of interest in the International Offering, the level of applications in the
Hong Kong Public Offering and the basis of and results of allocations of Offer Shares under
the Hong Kong Public Offering are expected to be announced on Thursday, May 15, 2025 on
the website of our Company ( www.china-greentea.com.cn ) and the website of the Stock
Exchange ( www.hkexnews.hk ).
Hong Kong Underwriting Agreement
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement and is conditional upon the
International Underwriting Agreement being signed and becoming unconditional.
Our Company expects to enter into the International Underwriting Agreement relating to
the International Offering on or around the Price Determination Date.
These underwriting arrangements, and the respective Underwriting Agreements, are
summarized in the section headed “Underwriting”.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 356 ---
Shares will be eligible for CCASS
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
If the Stock Exchange grants the listing of, and permission to deal in, the Shares and our
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 participants of the Stock
Exchange 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 HKSCC
Operational Procedures in effect from time to time.
Conditions of the Hong Kong Public Offering
Acceptance of all applications for Offer Shares pursuant to the Hong Kong Public
Offering will be conditional on:
(i) the Listing Committee of the Stock Exchange granting listing of, and permission to
deal in, the Offer Shares being offered pursuant to the Global Offering (including
the additional Offer Shares which may be made available pursuant to the exercise of
the Over-allotment Option) (subject only to allotment);
(ii) the execution and delivery of the International Underwriting Agreement on or
around the Price Determination Date; and
(iii) the obligations of the Underwriters under each of the respective Underwriting
Agreements becoming and remaining unconditional and not having been terminated
in accordance with the terms of the respective agreements.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, 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 times and dates
specified, the Global Offering will lapse and the Stock Exchange will be notified immediately.
Notice of the lapse of the Hong Kong Public Offering will be published by our Company on
the websites of the Hong Kong Stock Exchange at www.hkexnews.hk and our Company at
www.china-greentea.com.cn on the next day following such lapse. In such eventuality, all
application monies will be returned, without interest, on the terms set out in the section headed
“How to Apply for the Hong Kong Offer Shares”.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 357 ---
Share certificates for the Offer Shares are expected to be issued on Thursday, May 15,
2025 but will only become valid evidence of title at 8:00 a.m. on Friday, May 16, 2025
provided that (i) the Global Offering has become unconditional in all respects; and (ii) the right
of termination as described in the section headed “Underwriting – Underwriting Arrangements
and Expenses – Hong Kong Public Offering – Grounds for Termination” has not been
exercised.
Dealings in the Shares
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong SAR on Friday, May 16, 2025, it is expected that dealings in the Shares
on the Stock Exchange will commence at 9:00 a.m. on Friday, May 16, 2025.
The Shares will be traded in board lots of 400 Shares each and the stock code of the
Shares will be 6831.
STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING
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--- page 358 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.china-greentea.com.cn.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong SAR pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older; and
 have a Hong Kong SAR address (for the HK eIPO White Form service only) .
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Thursday, May 8, 2025
and end at 12:00 noon on Tuesday, May 13, 2025 (Hong Kong SAR time).
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 359 ---
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
HK eIPO White
Form service
www.hkeipo.hk
Investors who would
like to receive a
physical Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m. on
Thursday, May 8,
2025 to 11:30 a.m.
on Tuesday, May 13,
2025, Hong Kong
SAR time.
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Tuesday, May 13,
2025, Hong Kong
SAR time.
HKSCC EIPO
channel
Y our broker or custodian who is a
HKSCC Participant will submit
an EIPO application on your
behalf through HKSCC’s FINI
system in accordance with your
instruction
Investors who would
not like to receive a
physical Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in the
name of HKSCC
Nominees, deposited
directly into CCASS
and credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest
time for giving such
instructions, as this
may vary by broker
or custodian.
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to wait until
the last day of the application period to apply for Hong Kong Offer Shares.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 360 ---
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through the
HK eIPO White Form service to make an application for Hong Kong Offer Shares, an actual
application shall be deemed to have been made. If you are a person for whose benefit the
electronic application instructions are given, you shall be deemed to have declared that only
one set of electronic application instructions has been given for your benefit. If you are an
agent for another person, you shall be deemed to have declared that you have only given one
set of electronic application instructions for the benefit of the person for whom you are an
agent and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an 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.
If you apply through the HK eIPO White Form service, you are deemed to have
authorized 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.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO Channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through the HKSCC EIPO channel, an actual application will be
deemed to have been made for any application instructions given by you or for your benefit to
HKSCC (in which case an application will be made by HKSCC Nominees on your behalf)
provided such application instruction has not been withdrawn or otherwise invalidated before
the closing time of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 361 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate;
or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid
e-mail address, a contact telephone number and a Hong Kong SAR address. Y ou are also required to
declare that the identity information provided by you follows the requirements as described in Note 2
below. In particular, where you cannot provide a HKID number, you must confirm that you do not hold
a HKID card. The number of joint applicants may not exceed four. If you are a firm, the applicant must
be in the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
shares in a public offer. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 362 ---
4. The maximum number of joint account holders on FINI is capped at 4 1 in accordance with market
practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other 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).
For those applying through the HKSCC EIPO channel, and making an application under
a power of attorney, we and the Sponsor-Overall Coordinators, as our agent, have discretion to
consider whether to accept it on any conditions we think fit, including evidence of the
attorney’s authority.
Failing to provide any required information may result in your application being rejected.
1 Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower
cap.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 363 ---
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 400
Permitted number of
Hong Kong Offer
Shares for application
and amount payable on
application/successful
allotment
: Hong Kong Offer Shares are available for
application in specified board lot sizes only. Please
refer to the amount payable associated with each
specified board lot size in the table below.
The Offer Price is HK$7.19 per Share.
If you are applying through the HKSCC EIPO
channel, you are required to prefund your
application based on the amount specified by your
broker or custodian, as determined based on the
applicable laws and regulations in Hong Kong
SAR.
By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO Channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the Offer Price,
brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank account
at the Designated Bank for your broker or
custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the amount payable for the number of Shares you
have selected. Y ou must pay the respective amount
payable on application in full upon application for
Hong Kong Offer Shares.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 364 ---
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
400 2,905.00 6,000 43,575.06 90,000 653,626.00 1,000,000 7,262,511.16
800 5,810.01 8,000 58,100.09 100,000 726,251.11 2,000,000 14,525,022.30
1,200 8,715.01 10,000 72,625.11 200,000 1,452,502.24 3,000,000 21,787,533.46
1,600 11,620.02 20,000 145,250.22 300,000 2,178,753.35 4,000,000 29,050,044.60
2,000 14,525.02 30,000 217,875.33 400,000 2,905,004.45 5,000,000 36,312,555.76
2,400 17,430.03 40,000 290,500.45 500,000 3,631,255.58 6,000,000 43,575,066.90
2,800 20,335.03 50,000 363,125.56 600,000 4,357,506.69 7,000,000 50,837,578.06
3,200 23,240.03 60,000 435,750.67 700,000 5,083,757.80 8,418,000
(1) 61,135,818.87
3,600 26,145.04 70,000 508,375.78 800,000 5,810,008.92
4,000 29,050.04 80,000 581,000.89 900,000 6,536,260.04
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is approximately 50% of the Hong
Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for applications made through
the application channel of the HK eIPO White Form service) while the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “ – A. Applications for Hong Kong
Offer Shares – 3. Information Required to Apply ” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the HK eIPO White Form service,
(ii) HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be
rejected. If you have made an application through the HK eIPO White Form service or
HKSCC EIPO channel, you or the person(s) for whose benefit you have made the application
shall not apply further for any Offer Shares in the Global Offering.
The Hong Kong Share Registrar would record all applications into its system and identify
suspected multiple applications with identical names and identification document 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.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 365 ---
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Sponsor-Overall Coordinators, as our agents, to execute any documents for you and
to do on your behalf all things necessary to register any Hong Kong Offer Shares
allocated to you in your name or in the name of HKSCC Nominees as required by
the Articles of Association, and (if you are applying through the HKSCC EIPO
channel) to deposit the allotted Hong Kong Offer Shares directly into CCASS for the
credit of your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the HK eIPO
White Form service (or as the case may be, the agreement you entered into with
your broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(vi) agree that the Relevant Persons
(2), the Hong Kong Share Registrar and HKSCC will
not be liable for any information and representations not in this prospectus and any
supplement to it;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 366 ---
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the Hong Kong Share
Registrar, HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other
statutory regulatory or governmental bodies or otherwise as required by laws, rules
or regulations, for the purposes under the paragraph headed “ – G. Personal Data –
3. Purposes and 4. Transfer of personal data ” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the Hong Kong Share
Registrar by way of publication of the results at the time and in the manner as
specified in the paragraph headed “ – B. Publication of Results ” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “ –C .
Circumstances In Which You Will Not Be Allocated Hong Kong Offer Shares ” in this
section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong SAR;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong SAR that apply to your application and that neither we nor
the Relevant Persons will breach any law inside and/or outside Hong Kong SAR 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 contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 367 ---
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Sponsor-Overall Coordinators will rely
on your declarations and representations in deciding whether or not to allocate any
Hong Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) 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;
(xviii) (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 application channel of
the HK eIPO White Form service or by any one as your agent or by any other
person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) 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 and the HK
eIPO White Form Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 368 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website From the “Allotment Results”
function page at
www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result )
with a “search by ID” function
The full list of (i) wholly or
partially successful applicants
using the HK eIPO White
Form service and HKSCC EIPO
channel, and (ii) the number of
Hong Kong Offer Shares
conditionally allotted to them,
among other things, will be
displayed at
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result .
24 hours, from 11:00 p.m. on
Thursday, May 15, 2025 to
12:00 midnight on Wednesday,
May 21, 2025 (Hong Kong SAR
time)
The Stock Exchange’s website at
www.hkexnews.hk and
our website at
www.china-greentea.com.cn
which will provide links to the
above mentioned websites of
the Hong Kong Share Registrar.
No later than 11:00 p.m. on
Thursday, May 15, 2025
(Hong Kong SAR time).
Telephone +852 3691 8488 – the allocation
results telephone enquiry line
provided by the Hong Kong
Share Registrar
between 9:00 a.m. and 6:00 p.m.,
from Friday, May 16, 2025 to
Wednesday, May 21, 2025
(Hong Kong SAR time) on a
business day
For those applying through the HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Wednesday, May 14, 2025 (Hong Kong SAR
time)
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 369 ---
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Wednesday, May 14, 2025 (Hong Kong SAR time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the level of indications of interest in the Global Offering, the level
of applications in the Hong Kong Public Offering and the basis of allocations of Hong Kong
Offer Shares on the Stock Exchange’s website at www.hkexnews.hk and our website at
www.china-greentea.com.cn by no later than 11:00 p.m. on Thursday, May 15, 2025
(Hong Kong SAR time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Sponsor-Overall Coordinators, the Hong Kong Share Registrar and their
respective agents and nominees have full discretion to reject or accept any application, or to
accept only part of any application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong 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 us of that
longer period within three weeks of the closing date of the application lists.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 370 ---
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “ – A. Applications for Hong Kong Offer Shares – 5. Multiple
Applications Prohibited ” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Sponsor-Overall Coordinators believe that by accepting your application,
it or we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the Global Offering. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the Hong Kong Share Registrar and HKSCC is or will be liable if Hong Kong Offer
Shares are not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the Share certificates will be deposited into CCASS as described
below).
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 371 ---
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
Share certificates will only become valid at 8:00 a.m. on Friday, May 16, 2025 (Hong
Kong SAR time), provided that the Global Offering has become unconditional and the right of
termination described in the section headed “Underwriting” has not been exercised. Investors
who trade Shares prior to the receipt of Share certificates or the Share certificates becoming
valid do so entirely at their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of Share certificate 3
For application of
1,000,000 Hong
Kong Offer
Shares or more
Collection in person at the
Hong Kong Share Registrar,
Tricor Investor Services
Limited, at 17/F, Far East
Finance Centre, 16 Harcourt
Road, Hong Kong SAR
Time: 9:00 a.m. to 1:00 p.m.
on Friday, May 16, 2025
(Hong Kong SAR time)
If you are an individual, you
must not authorise any other
person to collect for you. If
you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s chop.
Share certificate(s) will be
issued in the name of
HKSCC Nominees, deposited
into CCASS and credited to
your designated HKSCC
Participant’s stock account
No action by you is required
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 372 ---
HK eIPO White Form service HKSCC EIPO channel
Both individuals and authorised
representatives must produce,
at the time of collection,
evidence of identity
acceptable to the Hong Kong
Share Registrar.
Note: If you do not collect your
Share certificate(s) personally
within the time above, it/they
will be sent to the address
specified in your application
instructions by ordinary post at
your own risk
For application of
less than
1,000,000 Hong
Kong Offer
Shares
Y our Share certificate(s) will
be sent to the address
specified in your application
instructions by ordinary post
at your own risk
Date: Thursday, May 15, 2025
Refund mechanism for surplus application monies paid by you
Date Friday, May 16, 2025 Subject to the arrangement
between you and your broker
or custodian
Responsible party Hong Kong Share Registrar Y our broker or custodian
Application monies
paid through
single bank
account
HK eIPO White Form e-Auto
Refund payment instructions
to your designated bank
account
Y our broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and it
Application monies
paid through
multiple bank
accounts
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post
at your own risk
3 Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or
an “extreme conditions” announcement issued after a super typhoon in force in Hong Kong SAR in the
morning on Thursday, May 15, 2025 rendering it impossible for the relevant Share certificates to be despatched
to HKSCC in a timely manner, the Company shall procure the Hong Kong Share Registrar to arrange for
delivery of the supporting documents and Share certificates in accordance with the contingency arrangements
as agreed between them. Y ou may refer to “ – E. Bad Weather Arrangements ” in this section.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 373 ---
E. BAD WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Tuesday, May 13, 2025 if, there is:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions
(collectively, “ Bad Weather Signals ”),
in force in Hong Kong SAR at any time between 9:00 a.m. and 12:00 noon on Tuesday,
May 13, 2025.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Bad Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.china-greentea.com.cn of the revised timetable.
If a Bad Weather Signal is hoisted on Thursday, May 15, 2025, the Hong Kong Share
Registrar will make appropriate arrangements for the delivery of the Share certificates to the
CCASS Depository’s service counter so that they would be available for trading on Friday,
May 16, 2025.
If a Bad Weather Signal is hoisted on Thursday, May 15, 2025, for application of less than
1,000,000 Hong Kong Offer Shares, the despatch of physical Share certificate(s) will be made
by ordinary post when the post office re-opens after the Bad Weather Signal is lowered or
cancelled (e.g. in the afternoon of Thursday, May 15, 2025 or on Friday, May 16, 2025).
If a Bad Weather Signal is hoisted on Friday, May 16, 2025, for application of 1,000,000
Hong Kong Offer Shares or more, physical Share certificate(s) will be available for collection
in person at the Hong Kong Share Registrar’s office after the Bad Weather Signal is lowered
or cancelled (e.g. in the afternoon of Friday, May 16, 2025 or on Monday, May 19, 2025).
Prospective investors should be aware that if they choose to receive physical Share
certificates issued in their own name, there may be a delay in receiving the Share
certificates.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 374 ---
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply 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 or any other date
HKSCC chooses. Settlement of transactions between Exchange Participants 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 HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the Hong Kong Share Registrar, the receiving banks and
the Relevant Persons about you in the same way as it applies to personal data about applicants
other than HKSCC Nominees. This personal data may include client identifier(s) and your
identification information. By giving application instructions to HKSCC, you acknowledge
that you have read, understood and agree to all of the terms of the Personal Information
Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices 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).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the Hong Kong Share Registrar
is accurate and up-to-date when applying for Hong Kong Offer Shares or transferring Hong
Kong Offer Shares into or out of their names or in procuring the services of the Hong Kong
Share Registrar.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 375 ---
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the 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 Hong Kong 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 applicants for and holders of Hong Kong Offer Shares inform the
Company and the Hong Kong Share Registrar immediately of any inaccuracies in the personal
data supplied.
3. 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 and HK eIPO White Form e-Auto
Refund payment instruction(s), where applicable, verification of compliance with
the terms and application procedures set out in this prospectus and announcing
results of allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong SAR 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 of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 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
applicants and holders of the Shares and/or regulators and/or any other purposes to
which applicants and holders of the Shares may from time to time agree.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 376 ---
4. Transfer of personal data
Personal data held by the Company and the Hong Kong Share Registrar relating to the
applicants for and holders of Hong Kong 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 SAR)
the personal data to, from or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving banks and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the Hong Kong Share Registrar, in each case for the purposes of
providing its services or facilities or performing its functions in accordance with its
rules or procedures and operating FINI and CCASS (including where applicants for
the Hong Kong Offer Shares request a deposit into 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, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
5. Retention of personal data
The Company and the Hong Kong Share Registrar will keep the personal data of the
applicants and holders of Hong Kong 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
(Chapter 486 of the Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong 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 and the
Hong Kong Share Registrar, at their registered address disclosed in the section headed
“Corporate information” in this prospectus or as notified from time to time, for the attention
of the company secretary, or the Hong Kong Share Registrar for the attention of the privacy
compliance officer.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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--- page 377 ---
The following is the text of a report set out on pages I-1 to I-64, received from the
Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF GREEN TEA GROUP LIMITED, CITIGROUP GLOBAL MARKETS
ASIA LIMITED AND CMB INTERNATIONAL CAPITAL LIMITED
Introduction
We report on the historical financial information of Green Tea Group Limited (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-64, which
comprises the consolidated statements of financial position of the Group and the statements of
financial position of the Company as at 31 December 2022, 2023 and 2024, and the
consolidated statements of profit or loss, the consolidated statements of profit or loss and other
comprehensive income, the consolidated statements of changes in equity and the consolidated
cash flow statements, for each of the years ended 31 December 2022, 2023 and 2024 (the
“Relevant Periods”), and material accounting policy information and other explanatory
information (together, the “Historical Financial Information”). The Historical Financial
Information set out on pages I-4 to I-64 forms an integral part of this report, which has been
prepared for inclusion in the prospectus of the Company dated 8 May 2025 (the “Prospectus”)
in connection with the initial listing of shares of the Company on the Main Board of The Stock
Exchange of Hong Kong Limited.
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 preparation
and presentation set out in Note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company 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 (the “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 378 ---
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 preparation and presentation set out in Note 1 to the Historical Financial
Information 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 purpose of the
accountants’ report, a true and fair view of the Company’s and the Group’s financial position
as at 31 December 2022, 2023 and 2024 and of the Group’s financial performance and cash
flows for the Relevant Periods in accordance with the basis of preparation and presentation set
out in Note 1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 379 ---
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited 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 27(d) to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Relevant Periods.
No statutory financial statements for the Company
No statutory financial statements have been prepared for the Company since its
incorporation.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
8 May 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 380 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Relevant Periods, on which the
Historical Financial Information is based, were audited by KPMG Huazhen LLP Hangzhou
Branch in accordance with Hong Kong Standards on Auditing issued by the HKICPA (the
“Underlying Financial Statements”).
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 381 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(Expressed in Renminbi)
Note 2022 2023 2024
RMB’000 RMB’000 RMB’000
Revenue 4 2,375,453 3,589,178 3,838,202
Other revenue 5 31,081 39,195 31,957
Raw materials and consumables used (862,316) (1,205,219) (1,192,902)
Staff costs 6(b) (626,397) (911,028) (989,008)
Depreciation of right-of-use assets (161,048) (177,036) (202,868)
Other rentals and related expenses (56,611) (80,294) (76,064)
Depreciation and amortisation of
other assets (163,641) (192,947) (217,875)
Utilities expenses (90,049) (123,562) (141,251)
Delivery service expenses (61,187) (82,788) (120,972)
Other expenses 6(c) (308,980) (420,950) (467,408)
Other net income/(losses) 6(d) 8,413 (3,919) 2,153
Finance costs 6(a) (41,541) (42,657) (45,309)
Profit before taxation 6 43,177 387,973 418,655
Income tax 7 (26,598) (92,430) (68,488)
Profit for the year 16,579 295,543 350,167
Attributable to:
Equity shareholders of the Company 16,579 295,543 350,167
Non-controlling interests – – –*
Earnings per share
Basic earnings per share (RMB) 10(a) 0.03 0.55 0.66
Diluted earnings per share (RMB) 10(b) 0.03 0.55 0.65
* The amount represents amount less than RMB1,000.
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 382 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
(Expressed in Renminbi)
Note 2022 2023 2024
RMB’000 RMB’000 RMB’000
Profit for the year 16,579 295,543 350,167
Other comprehensive income for
the year
Items that may not be reclassified to
profit or loss:
Exchange differences on translation of
financial statements of the Company 2,423 477 410
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translation of
financial statements of overseas
subsidiaries (1,841) (366) 198
Total comprehensive income for
the year 17,161 295,654 350,775
Attributable to:
Equity shareholders of the Company 17,161 295,654 350,775
Non-controlling interests – – –*
Total comprehensive income for
the year 17,161 295,654 350,775
* The amount represents amount less than RMB1,000.
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 383 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in Renminbi)
Note
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment 11(a) 518,851 648,973 724,765
Right-of-use assets 11(b) 754,525 822,055 966,954
Intangible assets 12 1,751 2,138 3,055
Deferred tax assets 24(c) 36,876 45,095 44,258
Rental deposits 27,470 25,287 39,038
Other non-current assets 25 286 407 13,213
1,339,759 1,543,955 1,791,283----------- ----------- -----------
Current assets
Inventories 14 56,395 59,576 67,227
Trade and other receivables 15 240,230 314,500 332,266
Income tax prepayments 24(a) 2,887 1,492 1,395
Financial assets at fair value through profit
or loss (“FVPL”) 28(e) 40,000 120,192 25,022
Restricted deposits 23 – 25,000 –
Cash and cash equivalents 16(a) 134,410 356,289 247,152
473,922 877,049 673,062----------- ----------- -----------
Current liabilities
Trade and other payables 17 331,862 493,335 462,339
Dividend payable 27(d) – 350,028 –
Contract liabilities 18 5,480 6,847 8,021
Current portion of long-term payables 20 6,148 7,593 –
Lease liabilities 19 181,859 214,345 256,728
Bank loans 23 31,000 50,100 –
Current taxation 24(a) 5,831 55,442 10,916
562,180 1,177,690 738,004-----------
----------- -----------
Net current liabilities (88,258) (300,641) (64,942)----------- ----------- -----------
Total assets less current liabilities 1,251,501 1,243,314 1,726,341----------- ----------- -----------
Non-current liabilities
Lease liabilities 19 605,933 659,207 846,212
Long-term payables 20 79,283 76,685 –
Provisions 21 35,040 43,116 51,620
Deferred lease incentives 22 15,504 12,769 12,823
Deferred tax liabilities 24(c) 47,700 37,026 44,553
783,460 828,803 955,208----------- ----------- -----------
NET ASSETS 468,041 414,511 771,133
CAPITAL AND RESERVES
Share capital 27(a) 76 76 76
Reserves 467,965 414,435 770,657
Total equity attributable to equity
shareholders of the Company – – 770,733
Non-controlling interests – – 400
TOTAL EQUITY 468,041 414,511 771,133
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 384 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
(Expressed in Renminbi)
Note
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Non-current assets
Interests in subsidiaries 13 80,912 82,234 136,675----------- ----------- -----------
Current assets
Cash and cash equivalents 308 5,223 22,180
Other receivables 15 8,194 403,780 14,082
8,502 409,003 36,262----------- ----------- -----------
Current liabilities
Other payables 17 34,072 49,589 83,010
Dividend payable 27(d) – 350,028 –
34,072 399,617 83,010----------- ----------- -----------
NET CURRENT (LIABILITIES)/
ASSETS (25,570) 9,386 (46,748)
NET ASSETS 55,342 91,620 89,927
CAPITAL AND RESERVES 27(b)
Share capital 76 76 76
Reserves 55,266 91,544 89,851
TOTAL EQUITY 55,342 91,620 89,927
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 385 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in Renminbi)
Note
Share
capital
Share
premium
Share-based
payments
reserve
Exchange
reserve
Statutory
surplus
reserve
Shares held
for RSU
schemes
Retained
profits
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
27(a) 27(c)(i) 27(c)(ii) 27(c)(iii) 27(c)(iv) 27(c)(v)
Balance at 1 January 2022 76 45,250 53,513 (1,652) 14,091 (4) 340,385 451,659
------ - ---- ------- ------ ------ ------- ------ - -----
Changes in equity for 2022:
Profit for the year – – – – – – 16,579 16,579
Other comprehensive income – – – 582 – – – 582
Total comprehensive income – – – 582 – – 16,579 17,161
------ - ---- ------- ------ ------ ------- ------ - -----
Appropriation to statutory reserve – – – – 8,092 – (8,092) –
RSU schemes:
– Equity settled share-based
transactions 27(c) – – (779) – – – – (779)
------ ----- ------- ------ ------ ------- ------ -----
Balance at 31 December 2022 76 45,250 52,734 (1,070) 22,183 (4) 348,872 468,041
Balance at 1 January 2023 76 45,250 52,734 (1,070) 22,183 (4) 348,872 468,041
------ - ---- ------- ------ ------ ------- ------ - -----
Changes in equity for 2023:
Profit for the year – – – – – – 295,543 295,543
Other comprehensive income – – – 111 – – – 111
Total comprehensive income – – – 111 – – 295,543 295,654
------ - ---- ------- ------ ------ ------- ------ - -----
Appropriation to statutory reserve – – – – 19,284 – (19,284) –
RSU schemes:
– Equity settled share-based
transactions 27(c) – – 844 – – – – 844
Dividends declared 27(d) – (45,250) – – – – (304,778) (350,028)
------ ----- ------- ------ ------ ------- ------ -----
Balance at 31 December 2023 76 – 53,578 (959) 41,467 (4) 320,353 414,511
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 386 ---
Attributable to equity shareholders of the Company
Note
Share
capital
Share
premium
Share-
based
payments
reserve
Exchange
reserve
Statutory
surplus
reserve
Share held
for RSU
schemes
Retained
profits Total
Non-
controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
27(a) 27(c)(i) 27(c)(ii) 27(c)(iii) 27(c)(iv) 27(c)(v)
Balance at
1 January 2024 76 – 53,578 (959) 41,467 (4) 320,353 414,511 – 414,511----- - ----- ------ ------ ------ ------ ------ - ----- ------ - ----
Changes in equity
for the
year ended
31 December
2024:
Profit for the year – –––– – 350,167 350,167 –* 350,167
Other
comprehensive
income – – – 608 – – – 608 – 608
Total
comprehensive
income – – – 608 – – 350,167 350,775 –* 350,775----- - ----- ------ ------ ------ ------ ------ - ----- ------ - ----
Appropriation to
statutory reserve – – – – 21,101 – (21,101) – – –
Recognition of
non-controlling
interests in an
acquisition of
subsidiaries – – – – – – – – 400 400
RSU schemes:
– Equity settled
share-based
transactions 27(c) – – 5,447 – – – – 5,447 – 5,447-----
----- ------ ------ ------ ------ ------ ----- ------ -----
Balance at
31 December
2024 76 – 59,025 (351) 62,568 (4) 649,419 770,733 400 771,133
* The amount represents amount less than RMB1,000.
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 387 ---
CONSOLIDATED CASH FLOW STATEMENTS
(Expressed in Renminbi)
Note 2022 2023 2024
RMB’000 RMB’000 RMB’000
Operating activities
Cash generated from operations 16(b) 364,702 853,556 838,517
Income tax paid 24(a) (17,090) (60,317) (104,553)
Net cash generated from operating activities 347,612 793,239 733,964-------- -------- --------
Investing activities
Payment for the purchase of property, plant and equipment (219,761) (306,224) (336,359)
Proceeds from disposal of property, plant and equipment 24 – 910
Payment for purchase of intangible assets – (734) (1,539)
Payment for purchase of wealth management products (931,200) (2,328,457) (1,785,000)
Proceeds from disposal of wealth management products 931,200 2,248,457 1,882,660
Payment for the acquisition of subsidiaries, net of cash acquired 16(e) – – (10,395)
Interest income received 4,266 6,753 3,959
Payment for provisions (372) (229) (2,023)
Net cash used in investing activities (215,843) (380,434) (247,787)-------- -------- --------
Financing activities
Proceeds from bank loans 16(c) 116,000 50,100 –
Repayment of bank loans 16(c) (85,500) (31,000) (50,100)
Payment of capital element of lease liabilities 16(c) (119,558) (145,804) (178,893)
Payment of interest element of lease liabilities 16(c) (35,450) (36,640) (39,305)
Interest expenses of bank loans paid 16(c) (595) (188) (37)
Placements of restricted bank deposits – (25,000) –
Withdrawal of restricted bank deposits – – 25,000
Dividends paid to equity shareholders of the Company 27(d) – – (350,028)
Payment of listing expenses 16(c) (2,763) (2,265) (2,121)
Net cash used in financing activities (127,866) (190,797) (595,484)--------
-------- --------
Net increase/(decrease) in cash and cash equivalents 3,903 222,008 (109,307)
Effect of foreign exchange rate changes (711) (129) 170
Cash and cash equivalents at 1 January 16(a) 131,218 134,410 356,289
Cash and cash equivalents at 31 December 16(a) 134,410 356,289 247,152
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 388 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in Renminbi unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION
Green Tea Group Limited (the “Company”) was incorporated in the Cayman Islands on 4 June 2015 as an
exempted company with limited liability under the Companies Act (as revised) of the Cayman Islands.
The Company is an investment holding company and has not carried on any business operation since the date
of its incorporation save for the group reorganisation as detailed in the section headed “History, Reorganization and
Corporate Structure” in the Prospectus. The Company and its subsidiaries (together, the “Group”) are principally
engaged in restaurant operations in the People’s Republic of China (the “PRC”). No statutory financial statements
have been prepared for the Company since the date of its incorporation. Details of the Group’s subsidiaries are set
out in Note 13.
The Historical Financial Information has been prepared assuming the Group will continue as a going concern
notwithstanding the net current liabilities of the Group of RMB64,942,000 as at 31 December 2024. Based on a
detailed review of the Group’s working capital forecast for the twelve months ending 31 December 2025 and the
unutilised banking facilities as at the date of this report, the directors are of the opinion that the Group has sufficient
financial resources to continue as a going concern for the next twelve months from 31 December 2024.
The Historical Financial Information has been prepared in accordance with all applicable IFRS Accounting
Standards issued by the International Accounting Standards Board (“IASB”). Further details of the material
accounting policy information adopted are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
this Historical Financial Information, the Group has adopted all applicable new and revised IFRS Accounting
Standards that are effective for the Relevant Periods consistently throughout the Relevant Periods. The Group has not
applied any new standard or interpretation that is not yet effective during the Relevant Periods. The revised and new
accounting standards and interpretations issued but not yet effective for the Relevant Periods are set out in Note 32.
The Historical Financial Information also complies with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
2 MATERIAL ACCOUNTING POLICY INFORMATION
(a) Statement of measurement
The Historical Financial Information is presented in Renminbi (“RMB”), rounded to the nearest thousand
except when otherwise indicated. The measurement basis used in the preparation of the Historical Financial
Information is the historical cost basis except that financial assets measured at FVPL are stated at their fair value as
explained in Note 2(d).
Item included in the Historical Financial Information of each entity in the Group are measured using the
currency that best reflects the economic substance of the underlying events and circumstances relevant to the entity.
(b) Use of estimates and judgements
The preparation of Historical Financial Information in conformity with IFRS Accounting Standards requires
management to make judgements, estimates and assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 389 ---
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS Accounting Standards that have significant effect
on the Historical Financial Information and major sources of estimation uncertainty are discussed in Note 3.
(c) Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has
rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the Historical Financial Information
from the date on which control commences until the date on which control ceases.
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency
transaction gains or losses) arising from intra-group transactions are eliminated. Unrealised losses resulting from
intra-group transactions are eliminated in the same way as unrealised gains but only to the extent that there is no
evidence of impairment.
For each business combination, the Group can elect to measure any non-controlling interests (“NCI”) either
at fair value or at the NCI’s proportionate share of the subsidiary’s net identifiable assets. NCI are presented in the
consolidated statement of financial position within equity, separately from equity attributable to the equity
shareholders of the Company. NCI in the results of the Group are presented on the face of the consolidated statement
of profit or loss and consolidated statement of profit or loss and other comprehensive income as an allocation of the
total profit or loss and total comprehensive income for the year between NCI and the equity shareholders of the
Company. Loans from holders of NCI and other contractual obligations towards these holders are presented as
financial liabilities in the consolidated statement of financial position in accordance with Notes 2(m) or (o) depending
on the nature of the liability.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as
equity transactions.
When the Group loses control of a subsidiary, it derecognises the assets and liabilities of the subsidiary, and
any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in that former subsidiary is measured at fair value when control is lost.
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less impairment
losses (see Note 2(h)(ii)).
(d) Other investments in securities
The Group’s policies for investments in securities, other than investments in subsidiaries, are set out below.
Investments in securities are recognised/derecognised on the date the Group commits to purchase/sell the
investment. The investments are initially stated at fair value plus directly attributable transaction costs, except for
those investments measured at FVPL for which transaction costs are recognised directly in profit or loss. For an
explanation of how the Group determines fair value of financial instruments, see Note 28(e). These investments are
subsequently accounted for as follows, depending on their classification.
(i) Non-equity investments
Non-equity investments are classified into one of the following measurement categories:
– amortised cost, if the investment is held for the collection of contractual cash flows which represent
solely payments of principal and interest. Expected credit losses, interest income calculated using the
effective interest method (see Note 2(s)(ii)), foreign exchange gains and losses are recognised in profit
or loss. Any gain or loss on derecognition is recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 390 ---
– Financial assets at fair value through other comprehensive income (“FVOCI”) – recycling, if the
contractual cash flows of the investment comprise solely payments of principal and interest and the
investment is held within a business model whose objective is achieved by both the collection of
contractual cash flows and sale. Expected credit losses, interest income (calculated using the effective
interest method) and foreign exchange gains and losses are recognised in profit or loss and computed
in the same manner as if the financial assets was measured at amortised cost. The difference between
the fair value and the amortised cost is recognised in other comprehensive income. When the investment
is derecognised, the amount accumulated in other comprehensive income is recycled from equity to
profit or loss.
– FVPL if the investment does not meet the criteria for being measured at amortised cost or FVOCI
(recycling). Changes in the fair value of the investment (including interest) are recognised in profit or
loss.
(e) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses
(see Note 2(h)(ii)).
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components).
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Depreciation is calculated to write-off the cost of items of property, plant and equipment, less their estimated
residual value, if any, using the straight-line method over their estimated useful lives, and is generally recognised in
profit or loss.
The estimated useful lives are as follows:
– Leasehold improvements 5 to 30 years,
or lease term,
whichever is
shorter
– Kitchen equipment 5 years
– Furniture and fixture 3-5 years
– Electronic equipment and others 3-5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(f) Intangible assets
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (where the
estimated useful life is finite) and impairment losses (see Note 2(h)(ii)).
Amortisation of intangible assets with finite useful lives is charged to profit or loss on a straight-line basis over
the assets’ estimated useful lives, if any, and is generally recognised in profit or loss.
The estimated useful lives are as follows:
– Software 5 years
– Others 2 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 391 ---
(g) Leased assets
At inception of a contract, the Group assesses whether the 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. Control is conveyed where the customer has both the right to direct the use of the
identified asset and to obtain substantially all of the economic benefits from that use.
As a lessee
Where the contract contains lease component(s) and non-lease component(s), the Group has elected not
to separate non-lease components and accounts for each lease component and any associated non-lease
components as a single lease component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except
for short-term leases that have a lease term of 12 months or less and leases of low-value assets which, for the
Group are primarily apartments and kitchen equipment. When the Group enters into a lease in respect of a
low-value asset, the Group decides whether to capitalise the lease on a lease-by-lease basis. The lease
payments associated with those leases which are not capitalised are recognised as an expense on a systematic
basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the lease
payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, using a relevant incremental borrowing rate. After initial recognition, the lease
liability is measured at amortised cost and interest expense is calculated using the effective interest method.
V ariable lease payments that do not depend on an index or rate are not included in the measurement of the lease
liability and hence are charged to profit or loss in the accounting period in which they are incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which
comprises the initial amount of the lease liability plus any lease payments made at or before the
commencement date, and any initial direct costs incurred. Where applicable, the cost of the right-of-use assets
also includes an estimate of costs to dismantle and remove the underlying asset or to restore the underlying
asset or the site on which it is located, discounted to their present value, less any lease incentives received.
The right-of-use asset is subsequently stated at cost less accumulated depreciation and impairment losses (see
Note 2(h)(ii).
Refundable rental deposits are accounted for separately from the right-of-use assets in accordance with
the accounting policy applicable to investments in debt securities carried at amortised cost (see Note 2(d)). Any
excess of the nominal value over the initial fair value of the deposits is accounted for as additional lease
payments made and is included in the cost of right-of-use assets.
The lease liability is remeasured when there is a change in future lease payments arising from a change
in an index or rate, or there is a change in the Group’s estimate of the amount expected to be payable under
a residual value guarantee, or there is a change arising from the reassessment of whether the Group will be
reasonably certain to exercise a purchase, extension or termination option. When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The lease liability is also remeasured when there is a lease modification, which means a change in the
scope of a lease or the consideration for a lease that is not originally provided for in the lease contract, if such
modification is not accounted for as a separate lease. In this case, the lease liability is remeasured based on
the revised lease payments and lease term using a revised discount rate at the effective date of the modification.
The only exceptions are rent concessions that occurred as a direct consequence of the COVID-19 pandemic
and met the conditions set out in paragraph 46B of IFRS 16 Leases . In such cases, the Group has taken
advantage of the practical expedient not to assess whether the rent concessions are lease modifications, and
recognised the change in consideration as negative variable lease payments in profit or loss in the period in
which the event or condition that triggers the rent concessions occurred.
In the consolidated statement of financial position, the current portion of long-term lease liabilities is
determined as the present value of contractual payments that are due to be settled within twelve months after
the reporting period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 392 ---
(h) Credit losses and impairment of assets
(i) Credit losses from financial instruments
The Group recognises a loss allowance for expected credit losses (ECLs) on financial assets measured
at amortised cost (including cash and cash equivalents, trade and other receivables and long-term rental
deposits).
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all expected cash shortfalls (i.e. the difference between the cash flows due to the Group
in accordance with the contract and the cash flows that the Group expects to receive).
The expected cash shortfalls are discounted using the following discount rates where the effect
of discounting is material:
– fixed-rate financial assets and trade and other receivables: effective interest rate
determined at initial recognition or an approximation thereof;
– variable-rate financial assets: current effective interest rate.
The maximum period considered when estimating ECLs is the maximum contractual period over
which the Group is exposed to credit risk.
ECLs are measured on either of the following bases:
– 12-month ECLs: these are losses that are expected to result from possible default events within
the 12 months after the reporting date; and
– lifetime ECLs: these are losses that are expected to result from all possible default events over
the expected lives of the items to which the ECL model applies.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the
following, which are measured at 12-months ECLs:
– financial instruments that are determined to have low credit risk at the reporting date; and
– other financial instruments for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs.
Significant increases in credit risk
When determining whether the credit risk of a financial instrument has increased significantly
since initial recognition and when measuring ECLs, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on the Group’s historical experience and informed credit
assessment, that includes forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly since initial
recognition:
– failure to make payments of principal or interest on their contractually due dates;
– an actual or expected significant deterioration in a financial instrument’s external or
internal credit rating (if available);
– an actual or expected significant deterioration in the operating results of the debtor; and
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 393 ---
– existing or forecast changes in the technological, market, economic or legal environment
that have a significant adverse effect on the debtor’s ability to meet its obligation to the
Group.
The Group considers a financial asset to be in default when:
– the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by
the Group to actions such as realising security (if any is held). The Group considers a
financial instrument to have low credit risk when its credit risk rating is equivalent to the
globally understood definition of “investment grade”.
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit
risk since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss
in profit or loss. The Group recognises an impairment gain or loss for all financial instruments with a
corresponding adjustment to their carrying amount through a loss allowance account.
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A
financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default or delinquency in interest or principal payments;
– it becoming probable that the borrower will enter into bankruptcy or other financial
reorganisation;
– significant changes in the technological, market, economic or legal environment that have
an adverse effect on the debtor; or
– the disappearance of an active market for a security because of financial difficulties of the
issuer.
Write-off policy
The gross carrying amount of a financial asset is written off (either partially or in full) to the
extent that there is no realistic prospect of recovery. This is generally the case when the Group
determines that the debtor does not have assets or sources of income that could generate sufficient cash
flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
(ii) Impairment of other non-current assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than
inventories and other contract costs, contract assets and deferred tax assets) to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating
units (“CGU”s).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs
of disposal. V alue in use is based on the estimated future cash flows, 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 or CGU.
APPENDIX I ACCOUNTANTS’ REPORT
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An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount
of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU
on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the resulting carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(i) Inventories and other contract costs
(i) Inventories
Inventories are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs
of conversion and other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
(ii) Other contract costs
Other contract costs are either the incremental costs of obtaining a contract with a customer or the costs
to fulfil a contract with a customer which are not capitalised as inventory (see Note 2(i)(i)), property, plant and
equipment (see Note 2(e)) or intangible assets (see Note 2(f)).
Incremental costs of obtaining a contract e.g. sales commission are capitalised if the costs relate to
revenue which will be recognised in a future reporting period and the costs are expected to be recovered. Other
costs of obtaining a contract are expensed when incurred.
Capitalised contract costs are stated at cost less accumulated amortisation and impairment losses.
Amortisation of capitalised contract costs is recognised in profit or loss when the revenue to which the asset
relates is recognised (see Note 2(s)(i)).
(j) Contract assets and contract liabilities
A contract asset is recognised when the Group recognises revenue (see Note 2(s)) before being unconditionally
entitled to the consideration under the payment terms set out in the contract. Contract assets are assessed for expected
credit losses (ECL) in accordance with the policy set out in Note 2(h)(i) and are reclassified to receivables when the
right to the consideration has become unconditional (see Note 2(k)).
A contract liability is recognised when the customer pays non-refundable consideration before the Group
recognises the related revenue (see Note 2(s)). A contract liability would also be recognised if the Group has an
unconditional right to receive non-refundable consideration before the Group recognises the related revenue. In such
cases, a corresponding receivable would also be recognised (see Note 2(k)).
When the contract includes a significant financing component, the contract balance includes interest accrued
under the effective interest method (see Note 2(s)).
(k) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration and only the
passage of time is required before payment of that consideration is due.
Trade receivables that do not contain a significant financing component are initially measured at their
transaction price. Trade receivables that contain a significant financing component and other receivables are initially
measured at fair value plus transaction costs. All receivables are subsequently stated at amortised cost (see Note
2(h)(i)).
APPENDIX I ACCOUNTANTS’ REPORT
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(l) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial
institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value, having been within three months of maturity at
acquisition. Cash and cash equivalents are assessed for expected credit losses (ECL) in accordance with the policy
set out in Note 2(h)(i).
(m) Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial recognition, trade and other
payables are stated at amortised cost unless the effect of discounting would be immaterial, in which case they are
stated at invoice amounts.
(n) Preference share capital
Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company’s
option, and any dividends are discretionary. Dividends on preference share capital classified as equity are recognised
as distributions within equity.
(o) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method. Interest
expense is recognised in accordance with the Group’s accounting policy for borrowing costs (see Note 2(u)).
(p) Employee benefits
(i) Short term employee benefits and contributions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Obligations for contributions to defined contribution retirement plans are expensed as the related service
is provided.
(ii) Share-based payments
The grant-date fair value of equity-settled share-based payments granted to employees is measured
using the income approach model. The amount is generally recognised as an expense, with a corresponding
increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to
reflect the number of awards for which the related service conditions are expected to be met, such that the
amount ultimately recognised is based on the number of awards that meet the related service conditions at the
vesting date.
(iii) Termination benefits
Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer
of those benefits and when the Group recognises costs for a restructuring.
(q) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity or in other comprehensive income
(“OCI”).
APPENDIX I ACCOUNTANTS’ REPORT
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Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the period and
any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects any uncertainty related
to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised
for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
– temporary differences related to investment in subsidiaries, associates and joint venture to the extent
that the Group is able to control the timing of the reversal of the temporary differences and it is probable
that they will not reverse in the foreseeable future;
– taxable temporary differences arising on the initial recognition of goodwill; and
– those related to the income taxes arising from tax laws enacted or substantively enacted to implement
the Pillar Two model rules published by the Organisation for Economic Co-operation and Development.
The Group recognised deferred tax assets and deferred tax liabilities separately in relation to its lease liabilities
and right-of-use assets.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount
of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability
of future taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(r) Provisions and contingent liabilities
Generally provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessment of the time value of money and the risks specific to the liability.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, a separate asset is recognised for any expected reimbursement that would be virtually certain. The amount
recognised for the reimbursement is limited to the carrying amount of the provision.
APPENDIX I ACCOUNTANTS’ REPORT
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(s) Revenue and other income
Income is classified by the Group as revenue when it arises from the sales of goods or the provision of services.
Further details of the Group’s revenue and other income recognition policies are as follows:
(i) Revenue from contracts with customers
The Group principally generates revenue from restaurant operations. Revenue excludes value added tax
or other sales taxes and is after deduction of other sales taxes or any trade discounts.
For restaurant operations for which the control of services is transferred at a point in time, revenue is
recognised when the related services have been rendered to customers.
For sales of goods for which the control of goods is transferred at a point in time, revenue is recognised
when the goods are delivered and accepted by the customers.
Revenue for rendering of other services is recognised over time by reference to the progress towards
complete satisfaction of the relevant performance obligation as the customer simultaneously receives the
benefits provided by the Group’s performance as the Group performs.
(ii) Interest income
Interest income is recognised as it accrues using the effective interest method.
(iii) Government grants
Government grants are recognised in the statement of financial position initially when there is
reasonable assurance that they will be received and that the Group will comply with the conditions attaching
to them. Grants that compensate the Group for expenses incurred are recognised as income in profit or loss
on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the Group
for the cost of an asset are initially recognised as deferred income at fair value and then recognised in profit
or loss as other income on a systematic basis over the useful life of the asset.
(t) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of Group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.
Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at
the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or
loss.
However, foreign currency differences arising from the translation of the following items are recognised in
OCI:
– an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign
currency differences that have been recognised in OCI are reclassified to profit or loss);
– a financial liability designated as a hedge of the net investment in a foreign operation to the extent that
the hedge is effective; and
– qualifying cash flow hedges to the extent that the hedges are effective.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated into RMB at the exchange rates at the reporting date. The income and expenses of foreign
operations are translated into RMB at the exchange rates at the dates of the transactions.
APPENDIX I ACCOUNTANTS’ REPORT
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Foreign currency differences are recognised in OCI and accumulated in the exchange reserve, except to the
extent that the translation difference is allocated to non-controlling interests (“NCI”).
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or
joint control is lost, the cumulative amount in the exchange reserve related to that foreign operation is reclassified
to profit or loss as part of the gain or loss on disposal. On disposal of a subsidiary that includes a foreign operation,
the cumulative amount of the exchange differences relating to that foreign operation that have been attributed to the
NCI shall be derecognised, but shall not be reclassified to profit or loss. If the Group disposes of part of its interest
in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When
the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control,
the relevant proportion of the cumulative amount is reclassified to profit or loss.
(u) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the
cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.
(v) Asset acquisition
Groups of assets acquired and liabilities assumed are assessed to determine if they are business or asset
acquisitions. On an acquisition-by-acquisition basis, the Group chooses to apply a simplified assessment of whether
an acquired set of activities and assets is an asset rather than business acquisition, when substantially all of the fair
value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
When a group of assets acquired and liabilities assumed do not constitute a business, the overall acquisition
cost is allocated to the individual identifiable assets and liabilities based on their relative fair values at the date of
acquisition. An exception is when the sum of the individual fair values of the identifiable assets and liabilities differs
from the overall acquisition cost. In such case, any identifiable assets and liabilities that are initially measured at an
amount other than cost in accordance with the Group’s policies are measured accordingly, and the residual acquisition
cost is allocated to the remaining identifiable assets and liabilities based on their relative fair values at the date of
acquisition.
(w) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if 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 the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities 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.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 399 ---
(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).
(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 Group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
(x) Segment reporting
Operating segments, and the amounts of each segment item reported in the Historical Financial Information,
are identified from the financial information provided regularly to the Group’s most senior executive management
for the purposes of allocating resources to, and assessing the performance of, the Group’s various lines of business.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and services, the
nature of production processes, the type or class of customers, the methods used to distribute the products or provide
the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENT AND ESTIMATES
(a) Critical accounting judgements in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, management has made the following accounting
judgement:
Control assessment of cooperation agreements
As further disclosed in Note 13(e), the Group entered into a series of cooperation agreements with
certain entities controlled by Wang Qinsong and Lu Changmei, controlling shareholders of the Group, pursuant
to which the Group is responsible for providing entrusted management services of running the restaurant
business of these entities and is awarded of the management fee which represents the operation results of the
restaurant business of these entities.
Pursuant to the cooperation agreements, the Group has the rights to use the underlying restaurant
premises, fixtures and furniture and kitchen equipment to provide catering services to the customers, and
acquires the procurement contracts with the suppliers. All staff employed by these entities are transferred to
the Group. The Group is responsible for approving the financial and operational policies and the annual
financial budgets of the underlying restaurant businesses and making decisions about the procurement process
and staff arrangement. The Group receives substantially all of the economic interest returns generated by these
restaurant businesses in consideration for the management service fee which equals to the profits before taxes
during the cooperation period less accumulated losses incurred during previous financial years (if any).
Therefore, the Group is acting as a principal to operate the underlying restaurant businesses with delegated
decision-making rights pursuant to the cooperation agreements and controls the underlying restaurant
businesses through the cooperation agreements under IFRS 10 Consolidated financial statements .
Accordingly, the operation results of the relevant restaurant businesses, and related property, plant and
equipment and right-of-use assets used for the operation of the restaurant businesses are consolidated in the
Historical Financial Information of the Group during the period of entrusted management services until the
Group terminated the cooperation agreements.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 400 ---
(b) Sources of estimation uncertainty
Significant sources of estimation uncertainty in the process of applying the Group’s accounting policies are as
follows:
(i) Depreciation and amortisation
Property, plant and equipment and right-of-use assets are depreciated on a straight-line basis over the
estimated useful lives of the assets. Intangible assets are amortised on a straight-line basis over the estimated
useful lives. The Group reviews the estimated useful lives of the assets regularly in order to determine the
amount of depreciation or amortisation expense to be recorded during any reporting period. The useful lives
are based on the Group’s historical experience with similar assets. The depreciation or amortisation expense
for future periods is adjusted if there are material changes from previous estimates.
(ii) Impairment of property, plant and equipment, right-of-use assets and intangible assets
Internal and external sources of information are reviewed at the end of each reporting period to assess
whether there is any indication that property, plant and equipment, right-of-use assets and intangible assets
may be impaired. If any such indication exists, the recoverable amount of the property, plant and equipment,
right-of-use assets and intangible assets is estimated. Changes in facts and circumstances may result in
revisions to the conclusion of whether an indication of impairment exists and revised estimates of recoverable
amounts, which would affect profit or loss in future periods.
(iii) Provision for restoration costs
As explained in Note 21, the Group makes provision for restoration costs based on the best estimate of
the expected costs to be incurred upon expiry of the respective tenancy agreements, which are subject to
uncertainty and might differ from the actual costs incurred. Any increase or decrease in the provision would
affect profit or loss in future periods.
(iv) Recognition of deferred tax assets
Deferred tax assets in respect of tax losses carried forward and deductible temporary differences are
recognised and measured based on the expected manner of realisation or settlement of the carrying amount of
the relevant assets and liabilities, using tax rates enacted or substantively enacted at the end of each reporting
date. In determining the carrying amounts of deferred tax assets, expected taxable profits are estimated which
involves a number of assumptions relating to the operating environment of the Group and require a significant
level of judgement exercised by the directors. Any change in such assumptions and judgement would affect
the carrying amounts of deferred tax assets to be recognised and hence the net profit in future years.
4 REVENUE AND SEGMENT REPORTING
(a) Revenue
The principal activities of the Group are restaurant operations in the PRC.
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major service lines is as follows:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Revenue from contracts with customers
within the scope of IFRS 15:
Restaurant operation 1,976,519 3,059,989 3,099,173
Delivery service 397,114 517,153 723,057
Other revenue 1,820 12,036 15,972
2,375,453 3,589,178 3,838,202
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 401 ---
2022 2023 2024
RMB’000 RMB’000 RMB’000
Disaggregated by timing of revenue
recognition
– Point in time 2,375,226 3,588,509 3,837,729
– Overtime (Note) 227 669 473
2,375,453 3,589,178 3,838,202
Note: Revenue from rendering of parking services was recognised over time during the contract period.
No revenue from individual customer contributed over 10% of total revenue of the Group for the
Relevant Periods.
(ii) Revenue expected to be recognised in the future arising from contracts in existence at the reporting
date
As at 31 December 2022, 2023 and 2024, the Group has applied the practical expedient in paragraph 121
of IFRS 15 to its contracts for rendering service such that information about revenue expected to be recognised
in the future is not disclosed in respect of revenue that the Group will be entitled to when it satisfies the
remaining performance obligations under the contracts for rendering service that had an expected duration of
one year or less.
(b) Segment reporting
The directors of the Company have been identified as the Group’s most senior executive management. The
Group manages its businesses as a whole by the most senior executive management for the purposes of resource
allocation and performance assessment. The Group has one operating segment, which is restaurant operations. The
Group’s most senior executive management reviews the Group’s consolidated results of operations in assessing
performance of and making decisions about allocations to this segment. Accordingly, no reportable segment
information is presented.
As substantially all of the Group’s operations and assets are in the PRC, no geographic information is
presented.
5 OTHER REVENUE
2022 2023 2024
RMB’000 RMB’000 RMB’000
Other revenue
Interest income on:
– bank deposits 2,895 2,527 3,959
– rental deposits 1,876 2,120 2,483
4,771 4,647 6,442
Investment income on wealth
management products 1,214 4,418 2,490
Government grants (Note (i)) 23,833 28,342 22,322
Lease incentives (Note 22) 1,263 1,788 703
Total 31,081 39,195 31,957
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 402 ---
Note:
(i) Government grants mainly represented additional deduction of value-added tax and various forms of
incentives and subsidies granted to the Group by the local government authorities in Mainland China.
The additional deduction of value-added tax policy has expired on 31 December 2023.
6 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging/(crediting):
(a) Finance costs
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interest on bank loans (Note 16(c)) 594 188 37
Interest on lease liabilities (Note 16(c)) 35,450 36,640 39,305
Interest on long-term payable 3,925 3,818 3,729
Interest on provisions (Note 21) 1,572 2,011 2,238
41,541 42,657 45,309
(b) Staff costs
2022 2023 2024
RMB’000 RMB’000 RMB’000
Salaries, wages and other benefits 615,115 895,245 965,419
Contributions to defined contribution scheme
(Note (i)) 12,061 14,939 18,142
Equity-settled share-based payment expenses
(Note 26) (779) 844 5,447
626,397 911,028 989,008
Note:
(i) The employees of the subsidiaries of the Group established in Mainland China participate in a defined
contribution scheme managed by the local municipal governments, whereby these companies are
required to contribute to the scheme at certain rates of the employees’ salaries as agreed by the local
municipal governments. Employees of these companies are entitled to benefits, calculated based on a
percentage of the average salaries level in Mainland China, from the above mentioned retirement
scheme at their normal retirement age.
The Group’s employees in Hong Kong SAR participate in a defined contribution scheme registered
under the Mandatory Provident Fund Scheme Ordinance (Cap. 485) (the “MPF Scheme”). The MPF
Scheme is a defined contribution retirement plan administered by an independent trustee. Under the
MPF Scheme, the employer and its employees are each required to make contributions to the plan at 5%
of the employees’ relevant income, subject to a cap of monthly relevant income of Hong Kong dollars
(“HKD”) 30,000. Contributions to the plan vest immediately.
The Group has no further obligation for payment of other retirement benefits beyond the above
contributions.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 403 ---
(c) Other expenses
2022 2023 2024
RMB’000 RMB’000 RMB’000
Property management expenses 59,444 72,110 87,609
Low-value consumables 67,279 91,345 94,736
Services fees to third-party service providers 56,898 65,879 70,639
Platform service fees 11,247 48,696 65,498
Transportation charges 22,638 25,053 30,704
Business development expenses 15,551 28,032 33,868
Advertising and promotion expenses 23,966 27,448 30,105
Office expenses 3,322 6,060 5,746
Impairment losses of property, plant and
equipment and right-of-use assets – 4,636 –
Listing expenses 11,210 8,547 6,312
Others 37,425 43,144 42,191
308,980 420,950 467,408
(d) Other net (income)/losses
2022 2023 2024
RMB’000 RMB’000 RMB’000
Net losses on restaurant closures 1,122 2,066 756
Income on COVID-19 rent concessions
(Note 11(b)(iv)) (10,176) – –
Net foreign exchange (income)/loss (62) (14) 35
Net losses/(gains) on disposal of property, plant
and equipment and right-of-use assets 494 840 (485)
Other losses/(income) 209 1,027 (2,459)
(8,413) 3,919 (2,153)
7 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(a) Taxation in the consolidated statements of profit or loss represents:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Current tax
Provision for the year 12,316 67,561 58,477
Over-provision in respect of prior years (42) (29) (733)
12,274 67,532 57,744
Deferred tax
Origination and reversal of tax losses and
temporary differences 14,324 24,898 10,744
26,598 92,430 68,488
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 404 ---
(b) Reconciliation between tax expense and accounting profit at applicable tax rates:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Profit before taxation 43,177 387,973 418,655
Notional tax on profit before taxation, calculated
at the applicable rates in the tax jurisdictions
concerned (Note i, ii, iii) 11,625 97,011 105,961
Tax benefit of subsidiaries subject to preferential
tax rates (Note iii) (5,614) (38,721) (48,176)
PRC dividend withholding tax (Note 24(b)) 20,697 33,117 9,907
Tax effect of non-deductible expenses 169 837 1,619
Tax effect of unused tax losses not recognised 29 236 15
Over-provision in respect of prior years (42) (29) (733)
Tax effect of utilisation of the tax losses not
recognised as deferred tax asset in
previous years (266) (21) (105)
Actual tax expenses 26,598 92,430 68,488
Notes:
(i) Pursuant to the tax rules and regulations of the Cayman Islands and the Republic of Seychelles, the
Group is not subject to any income tax in the Cayman Islands and the Republic of Seychelles.
(ii) The applicable profits tax rate of the Group’s subsidiaries incorporated in Hong Kong Special
Administrative Region (the “Hong Kong SAR”) was 16.5% for the Relevant Periods. A two-tiered
profits tax rates regime was introduced in 2018 whereby the first HKD2 million in assessable profits
earned by a company will be taxed at half of the current tax rate (8.25%) while the remaining profits
will continue to be taxed at 16.5%.
The subsidiaries in Hong Kong SAR of the Group did not have any assessable profits for the Relevant
Periods.
(iii) Taxable income for the subsidiaries of the Company in Mainland China are subject to PRC income tax
rate of 25% for the Relevant Periods, unless otherwise specified below.
Tibet Green Tea Food & Beverage Management Co., Ltd (“Tibet Green Tea F&B”) was established in
Tibet in Mainland China in 2016 and was entitled to the preferential income tax rate of 15% since its
operation according to the Notice No. 51 issued by the Tibet People’s Government on 1 May 2014.
According to the Notice No. 23 issued by the Ministry of Finance, State Taxation Administration and
National Development and Reform Commission on 23 April 2020, Tibet Green Tea F&B could continue
to meet the relevant criteria to enjoy the preferential income tax rate. Thus, Tibet Green Tea F&B will
continue to be entitled to the preferential income tax rate of 15% from 2021 to 2030.
For the year ended 31 December 2022, the Group’s certain subsidiaries fulfilled the criteria required for
preferential income tax rate granted to small and low profit-making enterprised in Mainland China, and
were entitled to a preferential income tax rate of 2.5% on taxable income for the first RMB1,000,000
and 5% on taxable income for the subsequent RMB1,000,000 to RMB3,000,000.
For the year ended 31 December 2023 and 2024, the Group’s certain subsidiaries fulfilled the criteria
required for preferential income tax rate granted to small and low profit-making enterprised in Mainland
China, and were entitled to a preferential income tax rate of 5% on taxable income within
RMB3,000,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 405 ---
8 DIRECTORS’ EMOLUMENTS
Directors’ emoluments as recorded in the Historical Financial Information are as follows:
For the year ended 31 December 2022
Directors’ and
supervisors’ fee
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payments
2022
Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman and
executive director
Mr. Wang Qinsong – 396 – 13 409 – 409
Executive directors
Ms. Y u Liying – 571 – 7 578 (156) 422
Mr. Wang Jiawei – 610 – 7 617 (83) 534
Non-executive directors
Ms. Lu Changmei – 219 – 4 223 – 223
Mr. Liu Sheng – – – – – – –
Mr. Tao Y e – – – – – – –
– 1,796 – 31 1,827 (239) 1,588
For the year ended 31 December 2023
Directors’ and
supervisors’ fee
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payments
2023
Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman and
executive director
Mr. Wang Qinsong – 1,032 – 13 1,045 – 1,045
Executive directors
Ms. Y u Liying – 823 – 7 830 74 904
Mr. Wang Jiawei – 798 – 7 805 40 845
Non-executive directors
Ms. Lu Changmei – 394 – 16 410 – 410
Mr. Liu Sheng – – – – – – –
Mr. Tao Y e (resigned on
5 December 2023) – – – – – – –
Ms. Xu Ruijie
(appointed on
5 December 2023) – – – – – – –
– 3,047 – 43 3,090 114 3,204
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 406 ---
For the year ended 31 December 2024
Directors’ and
supervisors’ fee
Salaries,
allowances
and other
benefits
Discretionary
bonuses
Retirement
scheme
contributions Sub-Total
Share-based
payments
2024
Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman and
executive director
Mr. Wang Qinsong – 1,937 – 74 2,011 – 2,011
Executive directors
Ms. Y u Liying – 834 – 9 843 266 1,109
Mr. Wang Jiawei – 816 – 9 825 142 967
Non-executive directors
Ms. Lu Changmei – 387 – 20 407 – 407
Mr. Liu Sheng – – – – – – –
Ms. Xu Ruijie – – – – – – –
– 3,974 – 112 4,086 408 4,494
Note:
During the Relevant Periods, there were no amounts paid or payable by the Group to the directors or any of
the highest paid individuals set out in Note 9 below as an inducement to join or upon joining the Group or as
a compensation for loss of office. There was no arrangement under which a director waived or agreed to waive
any remuneration during the Relevant Periods.
9 INDIVIDUALS WITH HIGHEST EMOLUMENTS
During the years ended 31 December 2022, 2023 and 2024, of the five individuals with the highest
emoluments, one, two and one are directors whose emoluments are disclosed in Note 8.
The aggregate of the emoluments in respect of the other four, three and four individuals are as follows:
Y ear ended
31 December
Y ear ended
31 December
Y ear ended
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Salaries and other emoluments 3,181 3,713 5,413
Contributions to defined contribution scheme 36 25 39
Equity-settled share-based payment expenses (129) 388 969
3,088 4,126 6,421
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 407 ---
The emoluments of the four, three and four individuals with the highest emoluments are within the following
bands:
Y ear ended
31 December
Y ear ended
31 December
Y ear ended
31 December
2022 2023 2024
Number of
individuals
Number of
individuals
Number of
individuals
Nil – HKD1,000,000 3 – –
HKD1,000,001 – HKD1,500,000 1 1 1
HKD1,500,001 – HKD2,000,000 – 2 2
HKD2,000,001 – HKD2,500,000 – – 1
10 EARNINGS PER SHARE
(a) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the equity shareholders of the
Company by the weighted average number of ordinary and preference shares in issue during the Relevant Periods as
follows:
Y ear ended
31 December
Y ear ended
31 December
Y ear ended
31 December
2022 2023 2024
Profit attributable to equity shareholders of the
Company (RMB’000) 16,579 295,543 350,167
Issued ordinary and preference shares at
1 January (Note (i)) 522,250,000 522,250,000 522,250,000
Effect of shares vested under RSU scheme
(Note (ii)) 10,742,823 10,625,561 10,513,727
Weighted average number of ordinary and
preference shares in issue at 31 December 532,992,823 532,875,561 532,763,727
Basic earnings per share (expressed in RMB
per share) 0.03 0.55 0.66
Notes:
(i) The preference shares issued by the Company have the same right to share in the profit of the Group
as ordinary shares. Therefore, the Company did not present separate earnings per share information for
the preference shares.
(ii) The shares vested under RSU scheme include those vested RSUs, which were granted to certain
directors and employees of the Group under Scheme A and Scheme B at a price of RMB0.01 per unit,
before the Relevant Periods. Under Scheme A, 7,125,570 RSUs and 972,300 RSUs were vested on 28
February 2020 and 28 December 2020, respectively. Under Scheme B, 3,079,182 RSUs were vested on
28 February 2021. Details of RSU scheme are set out in Note 26.
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 408 ---
(b) Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary and preference
shares outstanding to assume conversion of all dilutive potential ordinary shares.
For the years ended 31 December 2022, 2023 and 2024, the Company has one category of dilutive potential
ordinary shares, which is the restricted share units granted to certain directors and employees of the Group under
Scheme C with service condition only (see Note 26). The restricted share units are assumed to have been fully vested
and released from restrictions with no significant impact on earnings.
Y ear ended
31 December
Y ear ended
31 December
Y ear ended
31 December
2022 2023 2024
Profit attributable to equity shareholders of the
Company (RMB’000) 16,579 295,543 350,167
Weighted average number of ordinary and
preference shares in issue (Note (a)) 532,992,823 532,875,561 532,763,727
Effect of shares under RSU scheme 3,563,937 3,805,141 3,649,165
Weighted average number of ordinary and
preference shares for the calculation of diluted
earnings per share 536,556,760 536,680,702 536,412,892
Diluted earnings per share (expressed in RMB
per share) 0.03 0.55 0.65
11 PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS
(a) Reconciliation of carrying amount of property, plant and equipment
Kitchen
equipment
Furniture
and
fixture
Electronic
equipment
and others
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 153,653 80,764 17,994 611,495 1,576 865,482
Additions 6,639 829 1,926 1,494 197,862 208,750
Transfer from construction-in-
progress 18,726 17,612 2,969 138,318 (177,625) –
Disposals (6,564) (3,594) (1,508) (23,755) – (35,421)
At 31 December 2022 and
1 January 2023 172,454 95,611 21,381 727,552 21,813 1,038,811
Additions 500 137 5,143 3,297 323,212 332,289
Transfer from construction-in-
progress 59,209 29,151 7,377 230,824 (326,561) –
Disposals (8,185) (2,499) (547) (21,881) – (33,112)
At 31 December 2023 and
1 January 2024 223,978 122,400 33,354 939,792 18,464 1,337,988
Additions 9,035 609 1,667 3,054 283,559 297,924
Transfer from construction in
progress 42,853 23,354 6,986 201,648 (274,841) –
Disposals (13,743) (6,408) (1,572) (49,504) (64) (71,291)
Exchange adjustments 14 8 5 140 33 200
At 31 December 2024 262,137 139,963 40,440 1,095,130 27,151 1,564,821-------- ------- - ------- ----------- ---------- ------
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 409 ---
Kitchen
equipment
Furniture
and
fixture
Electronic
equipment
and others
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Accumulated depreciation:
At 1 January 2022 72,448 34,161 11,401 266,749 – 384,759
Charge for the year 27,416 16,375 3,775 115,744 – 163,310
Written back on disposals (6,163) (2,989) (932) (18,025) – (28,109)
At 31 December 2022
and 1 January 2023 93,701 47,547 14,244 364,468 – 519,960
Charge for the year 31,248 18,224 5,206 137,922 – 192,600
Written back on disposals (7,240) (2,169) (491) (18,281) – (28,181)
At 31 December 2023
and 1 January 2024 117,709 63,602 18,959 484,109 – 684,379
Charge for the year 37,167 20,063 7,571 152,436 – 217,237
Written back on disposals (13,008) (6,214) (1,496) (42,842) – (63,560)
Exchange adjustments – – – 4 – 4
At 31 December 2024 141,868 77,451 25,034 593,707 – 838,060-------- ------- - ------- ----------- ---------- ------
Impairment:
At 1 January 2022 17 9 2 42 – 70
Written back on disposals (17) (9) (2) (42) – (70)
At 31 December 2022
and 1 January 2023 – – – – – –
Charge for the year – – – 2,576 2,060 4,636
At 31 December 2023
and 1 January 2024 – – – 2,576 2,060 4,636
Written back on disposals – – – (2,576) (64) (2,640)
At 31 December 2024 – – – – 1,996 1,996
Net book value:
At 31 December 2024 120,269 62,512 15,406 501,423 25,155 724,765
At 31 December 2023 106,269 58,798 14,395 453,107 16,404 648,973
At 31 December 2022 78,753 48,064 7,137 363,084 21,813 518,851
All of the property, plant and equipment owned by the Group are located in Mainland China and Hong Kong
SAR.
Impairment assessment
The recoverable amount of each restaurant (“CGU”) with an indication of impairment is estimated at the end
of each reporting period. As at the end of each reporting period, in view of the unfavourable future prospects of
certain restaurants, there was an indication that the CGUs may suffer an impairment loss. Management of the Group
has conducted impairment testing. The recoverable amount of each CGU is determined based on fair value less cost
of disposal or value-in-use calculations by preparing cash flow projections of the relevant CGU derived from the most
recent financial forecast approved by management covering the remaining lease term, which is higher. The cash flows
are discounted using a discount rate of 14.5%, 14.2% and 13.9%, respectively as at 31 December 2022, 2023 and
2024. The discount rate used is pre-tax and reflects specific risks relating to the relevant CGU.
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 410 ---
As at 31 December 2023, the carrying amount of certain CGUs exceeds their recoverable amount and,
therefore, an impairment loss of RMB4,636,000 was recognised in profit or loss as the “Other expenses” in the
consolidated statements of profit or loss. As at 31 December 2022 and 2024, the recoverable amount of the respective
CGUs of the Group with an indication of impairment exceeds the carrying amount. Therefore, no impairment loss
was recognised in the profit or loss in the consolidated statements of profit or loss for the year ended 31 December
2022 and 2024.
(b) Right-of-use assets
The reconciliation of carrying amount of right-of-use assets by class of underlying asset is as follows:
Properties
Kitchen
equipment Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 1,114,528 13,509 1,128,037
Additions 218,121 5,852 223,973
Disposal (80,988) (1,628) (82,616)
At 31 December 2022 and
1 January 2023 1,251,661 17,733 1,269,394
Additions 241,898 6,181 248,079
Disposal (91,984) (2,310) (94,294)
At 31 December 2023 and
1 January 2024 1,401,575 21,604 1,423,179
Additions 363,039 4,548 367,587
Disposals (115,049) (4,267) (119,316)
Exchange adjustments 546 1 547
At 31 December 2024 1,650,111 21,886 1,671,997 ------------
------------ ------------
Accumulated depreciation:
At 1 January 2022 398,501 5,134 403,635
Charge for the year 158,125 2,923 161,048
Written back on disposals (48,264) (1,550) (49,814)
At 31 December 2022 and
1 January 2023 508,362 6,507 514,869
Charge for the year 173,145 3,891 177,036
Written back on disposals (88,744) (2,037) (90,781)
At 31 December 2023 and
1 January 2024 592,763 8,361 601,124
Charge for the year 198,309 4,559 202,868
Written back on disposals (95,080) (3,911) (98,991)
Exchange adjustments 42 – 42
At 31 December 2024 696,034 9,009 705,043 ------------
------------ ------------
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 411 ---
Properties
Kitchen
equipment Total
RMB’000 RMB’000 RMB’000
Impairment:
At 1 January 2022 740 18 758
Written back on disposals (740) (18) (758)
At 31 December 2022, 2023 and 2024 – – – ------------
------------ ------------
Net book value:
At 31 December 2024 954,077 12,877 966,954
At 31 December 2023 808,812 13,243 822,055
At 31 December 2022 743,299 11,226 754,525
The analysis of expense items in relation to leases recognised in profit or loss is as follows:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interest on lease liabilities (Note 6(a)) 35,450 36,640 39,305
Expense relating to leases of low-value assets and
short-term leases 45,144 54,421 50,837
V ariable lease payments not included in the
measurement of lease liabilities 13,902 26,820 26,451
COVID-19-related rent concessions received
(Note (iv)) (11,940) – –
Lease incentives (Note 22) (1,934) (2,735) (1,927)
Details of total cash outflow for leases and the maturity analysis of lease liabilities are set out in Notes 16 and
19, respectively.
The Group has adopted the Amendment to IFRS 16, Leases , Covid-19-Related Rent Concessions and IFRS 16,
Leases, Covid-19-Related Rent Concessions beyond 30 June 2021 , and applies the practical expedient introduced by
the Amendment to all eligible rent concessions received by the Group during the Relevant Periods. Further details
are disclosed in Note (iv) below.
Notes:
(i) Properties – right-of-use assets
The Group has obtained the right of use properties as its restaurants through tenancy agreements. The leases
typically run for an initial period of lease terms of 4 to 31.4 years. Lease payments are usually increased every
2 years to reflect market rentals.
(ii) Kitchen equipment – right-of-use assets
The Group leases certain kitchen equipment under leases expiring from 3 to 5 years.
(iii) Rental deposits
The refundable rental deposits themselves are not parts of the lease payments and the measurement are within
the scope of IFRS 9. Therefore, the rental deposits should be measured at fair value on initial recognition. The
difference between the initial fair value and the nominal value of the deposit is an additional lease payment
made by the Group and it is included in the measurement of the right-of-use assets.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 412 ---
(iv) COVID-19-related rent concessions received
2022
COVID-19 rent concessions
Fixed
payments
Variable
payments
Deducted
from variable
payments
Recognised
as income Subtotal
Total
payments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Properties 155,008 13,902 (1,764) (10,176) (11,940) 156,970
12 INTANGIBLE ASSETS
Software Others Total
RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2022 3,125 377 3,502
Additions – – –
At 31 December 2022 and
1 January 2023 3,125 377 3,502
Additions 734 – 734
At 31 December 2023 and
1 January 2024 3,859 377 4,236
Additions 1,555 – 1,555
At 31 December 2024 5,414 377 5,791 ------------
------------ ------------
Accumulated amortisation:
At 1 January 2022 1,144 276 1,420
Charge for the year 313 18 331
At 31 December 2022 and
1 January 2023 1,457 294 1,751
Charge for the year 331 16 347
At 31 December 2023 and
1 January 2024 1,788 310 2,098
Charge for the year 628 10 638
At 31 December 2024 2,416 320 2,736 ------------
------------ ------------
Net book value:
At 31 December 2024 2,998 57 3,055
At 31 December 2023 2,071 67 2,138
At 31 December 2022 1,668 83 1,751
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 413 ---
13 INTERESTS IN SUBSIDIARIES
The Company
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Interests in subsidiaries
– Investments in subsidiaries (Note (i)) 41 41 41
– Deemed investments arising from share-based
compensation (Note 26) 52,734 53,578 59,025
– Amounts due from subsidiaries (Note (ii)) 28,137 28,615 77,609
80,912 82,234 136,675
Notes:
(i) As at 31 December 2022, 2023 and 2024, the Company’s investments in subsidiaries was USD6,000,
equivalent to RMB41,000.
(ii) As at 31 December 2022, 2023 and 2024, the amounts due from subsidiaries were interest-free and had
no fixed terms of payment.
During the Relevant Periods and as at the date of this report, the Company has direct or indirect interests in
subsidiaries, all of which are private companies. The following list contains only the particulars of subsidiaries which
principally affected the results, assets or liabilities of the Group. The class of shares held is ordinary unless otherwise
stated:
Company name
Place and date of
incorporation/
establishment and
operations
Type of legal
entity
Particulars
of issued and
paid up capital
Effective interest held by the Group
Principal
activities
Name of
auditor
As at 31 December
At the
date of
this report2022 2023 2024
Directly held by the Company
Everlasting Thrive Limited (note (b)) The Republic
of Seychelles
23 July 2015
Limited liability
company
USD2,000 100% 100% 100% 100% Investment
holding
Note (b)
Emperor Favour Limited (note (b)) The Republic
of Seychelles
23 July 2015
Limited liability
company
USD2,000 100% 100% 100% 100% Investment
holding
Note (b)
August Fountain Limited (note (b)) The Republic
of Seychelles
23 July 2015
Limited liability
company
USD2,000 100% 100% 100% 100% Investment
holding
Note (b)
Indirectly held by the Company
Hong Kong Greentea Group Limited (note (c)) Hong Kong SAR
21 August 2015
Limited liability
company
HKD10,000 100% 100% 100% 100% Investment
holding
and
restaurant
operations
Note (c)
Hong Kong Guan Dong Zao Group Limited
(note (c))
Hong Kong SAR
21 August 2015
Limited liability
company
HKD10,000 100% 100% 100% 100% Investment
holding
Note (c)
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 414 ---
Company name
Place and date of
incorporation/
establishment and
operations
Type of legal
entity
Particulars
of issued and
paid up capital
Effective interest held by the Group
Principal
activities
Name of
auditor
As at 31 December
At the
date of
this report2022 2023 2024
Hong Kong August Fountain Group Limited
(note (c))
Hong Kong SAR
21 August 2015
Limited liability
company
HKD10,000 100% 100% 100% 100% Investment
holding
Note (c)
Shenzhen Qianhai Green Tea Investment
Consultancy Company Limitedऎၠ঩
ʮ̡ (note (a)(b))
The People’s
Republic of China
23 December
2015
Wholly foreign-
owned
enterprise
RMB10,000,000 100% 100% 100% 100% Investment
holding
Note (b)
Hangzhou Dinghuan Investment Management
Company Limited (“Hangzhou Dinghuan”)
ʮ̡ (note (a)(d))
The People’s
Republic of China
27 March 2017
Limited liability
company
RMB10,000,000 100% 100% 100% 100% Restaurant
operations
Note (d)
Tibet Green Tea Food & Beverage Management
Company Limited
ʮ̡ (note (a)(b))
The People’s
Republic of China
30 March 2016
Limited liability
company
RMB20,408,200 100% 100% 100% 100% Restaurant
operations
Note (b)
Wuhan Lujia Food & Beverage Management
Company Limitedʮ̡
(note (a)(b))
The People’s
Republic of China
30 March 2017
Limited liability
company
RMB100,000 100% 100% 100% 100% Restaurant
operations
Note (b)
Sanquan Green Tea (Beijing) Food & Beverage
Management Company Limitedၠ঩ (̏
ԯ)ʮ̡
(note (a)(b))
The People’s
Republic of China
27 March 2017
Limited liability
company
RMB100,000 100% 100% 100% 100% Restaurant
operations
Note (b)
Tibet Green Tea Quan Enterprise Management
Company Limitedʮ
̡ (formerly known as Tibet Green Tea Quan
Investment Management Company Limited Г
ʮ̡) (note (a)(b))
The People’s
Republic of China
30 March 2016
Limited liability
company
RMB5,000,000 100% 100% 100% 100% Investment
holding
Note (b)
Shenzhen Green Tea Renjia Trading Company
Limitedʮ̡ (note
(a)(b))
The People’s
Republic of China
24 June 2016
Limited liability
company
RMB5,000,000 100% 100% 100% 100% Food
procurement
Note (b)
Zhejiang Lvqin Supply Chain Management
Company Limitedʮ
̡ (note (a)(b))
The People’s
Republic of China
29 December
2020
Limited liability
company
RMB10,000,000 100% 100% 100% 100% Food
wholesale
industry
Note (b)
Yiwu Dinghuan Investment Management
Consultancy Company Limited ່ढཻ̹ካΆ
ʮ̡ (note (a)(b))
The People’s
Republic of China
8 January 2021
Limited liability
company
– 100% 100% 100% 100% Restaurant
operations
Note (b)
Shenzhen Maoye Dinghuan Food & Beverage
Management Company Limited.ุཻ
ʮ̡ (note (a)(b))
The People’s
Republic of China
13 January 2021
Limited liability
company
RMB1,000,000 100% 100% 100% 100% Restaurant
operations
Note (b)
Beijing Dinghuan Food & Beverage Management
Company Limitedʮ̡
(note (a)(b))
The People’s
Republic of China
25 January 2021
Limited liability
company
– 100% 100% 100% 100% Restaurant
operations
Note (b)
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 415 ---
Company name
Place and date of
incorporation/
establishment and
operations
Type of legal
entity
Particulars
of issued and
paid up capital
Effective interest held by the Group
Principal
activities
Name of
auditor
As at 31 December
At the
date of
this report2022 2023 2024
Shanxi Dinghuan Food & Beverage Management
Company Limitedʮ̡
(note (a)(b))
The People’s
Republic of China
2 February 2021
Limited liability
company
– 100% 100% 100% 100% Restaurant
operations
Note (b)
Hangzhou Lvwu Food & Beverage Management
Company Limitedʮ̡
(note (a)(b))
The People’s
Republic of China
22 March 2022
Limited liability
company
– 100% 100% 100% 100% Restaurant
operations
Note (b)
Miaohui (Zhejiang Zhoushan) Trading Company
Limited Ѷึ(एϪЋʆ)ப΂ʮ̡
(note (a)(b))
The People’s
Republic of China
15 December
2022
Limited liability
company
– 100% 100% 100% 100% Food
wholesale
industry
Note (b)
Zhejiang Daxin Supply Chain Management
Company Limitedʮ
̡ (note (a)(b))
The People’s
Republic of China
24 May 2023
Limited liability
company
– – 100% 100% 100% Food
wholesale
industry
Note (b)
Shaoxing Dinghuan Food & Beverage
Management Company Limited ୗጳཻካ᎛භ
ʮ̡
(note (a)(b))
The People’s
Republic of China
29 June 2023
Limited liability
company
RMB500,000 – 100% 100% 100% Restaurant
operations
Note (b)
Hangzhou Green Tea Food & Beverage
Management Company Limitedψၠ঩᎛භ
ʮ̡
(note (a)(b)(e))
The People’s
Republic of China
21 February 2008
Limited liability
company
RMB500,000 – – 100% 100% Restaurant
operations
Note (b)
Beijing Green Tea Food & Beverage
Management Company Limited ̏ԯၠ঩᎛භ
ʮ̡ (note (a)(b)(e))
The People’s
Republic of China
11 November 2009
Limited liability
company
RMB1,000,000 – – 60% 60% Restaurant
operations
Note (b)
Notes:
(a) These entities are PRC limited liability companies. The official names of these entities are in Chinese. The
English translation of the names is for identification only.
(b) No audited financial statements have been prepared for these entities for the Relevant Periods.
(c) Hong Kong Greentea Group Limited prepared the financial statements for the year ended 31 December 2022
in accordance with the Hong Kong Small and Medium-sized Entity Financial Reporting Standard
(“SME-FRS”) issued by the HKICPA and have been properly prepared in compliance with the Hong Kong
Companies Ordinance. The financial statements for the year ended 31 December 2022 were audited by Uniwin
International CPA Limited, certified public accountants registered in Hong Kong SAR. As at the date of this
report, no audited financial statements have been prepared for the years ended 31 December 2023 and 2024.
Hong Kong Guan Dong Zao Group Limited and Hong Kong August Fountain Group Limited prepared the
financial statements for the years ended 31 December 2022 and 2023 in accordance with the Hong Kong Small
and Medium-sized Entity Financial Reporting Standard (“SME-FRS”) issued by the HKICPA and have been
properly prepared in compliance with the Hong Kong Companies Ordinance. The financial statements for the
years ended 31 December 2022 and 2023 were audited by Uniwin International CPA Limited, certified public
accountants registered in Hong Kong SAR. As at the date of this report, no audited financial statements have
been prepared for the year ended 31 December 2024.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 416 ---
(d) The entity prepared the financial statements for the years ended 31 December 2022 and 2023 in accordance
with the requirements of Accounting Standards for Business Enterprises, issued by the Ministry of Finance of
the PRC. The financial statements for the years ended 31 December 2022 and 2023 were audited by Zhejiang
Tianping Accounting Firm Co., Ltd, certified public accountants registered in Mainland China. As at the date
of this report, no audited financial statements have been prepared for the year ended 31 December 2024.
(e) In 2017, the Group entered into a series of cooperation agreements with certain entities controlled by Wang
Qinsong and Lu Changmei, controlling shareholders of the Group, including Hangzhou Greentea Catering
Management Co., Ltd. (“Hangzhou Greentea”), Wuhan Jiangnan Greentea Catering Management Co., Ltd.
(“Wuhan Greentea”, deregistered on 19 March 2025), Beijing Greentea Catering Management Co., Ltd.
(“Beijing Greentea”) and Ningbo Greentea Catering Management Co., Ltd. (“Ningbo Greentea”, deregistered
on 22 October 2019), pursuant to which, the Group is responsible for providing entrusted management services
of running the restaurant business of these entities and is awarded of the management fee approximate to the
operation results of the restaurant business of these entities. The cooperation agreements expired on 30 April
2023 and were renewed for another three years till 30 April 2026. The cooperation agreements will be
automatically renewed unless the Group terminates the agreements upon expiry.
As the Group has the ability to use its power over the restaurant business of the above entities to affect the
amount of the Group’s returns, the operation results of the relevant restaurant business and related property,
plant and equipment and right-of-use assets used for the operation of the restaurant business are consolidated
in the Historical Financial Information of the Group during the period of entrusted management services until
the Group terminated the cooperation agreements.
In September 2024, the Group terminated the cooperation agreement with Wuhan Greentea since the lease
agreement associated with the restaurant expired in September 2024 and the Group ceased the operation of the
restaurant accordingly.
On 24 December 2024, Hangzhou Dinghuan, a subsidiary of the Group, entered into an equity transfer
agreement with Wang Qinsong, to acquire 100% equity interests in Hangzhou Greentea (including its
non-wholly owned subsidiary Beijing Greentea) at a total consideration of RMB21,278,400. On 25 December
2024, the transaction was completed and Hangzhou Greentea and Beijing Greentea became the subsidiaries of
the Group since then. On 25 December 2024, the Group also terminated the cooperation agreements with
Hangzhou Greentea and Beijing Greentea in relation to the entrusted management operations of the relevant
restaurant business of these entities. As the group of assets acquired and liabilities assumed do not constitute
a business, the transaction was accounted for an asset acquisition.
All companies now comprising the Group have adopted 31 December as their financial year end date.
14 INVENTORIES
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Food and beverages, and other operating
items for restaurant operations 56,395 59,576 67,227
All of the inventories are expected to be recovered within one year.
The analysis of the amount of inventories recognised as an expense and included in profit or loss is as follows:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Carrying amount of inventories sold and consumed 862,316 1,205,219 1,192,902
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 417 ---
15 TRADE AND OTHER RECEIV ABLES
The Group
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Trade debtors 18,485 36,298 22,550
Other receivables and deposits 50,320 45,137 76,216
Amounts due from related parties (Note 30(d)) 24,298 28,943 –
Financial assets measured at amortised cost 93,103 110,378 98,766------------ ------------ ------------
V alue added tax recoverable 109,788 149,396 158,350
Prepayments (Note) 37,339 54,726 75,150
147,127 204,122 233,500------------
------------ ------------
240,230 314,500 332,266
Note: Prepayments mainly represent prepayments for rental and property management expenses, utilities
expenses and listing expenses.
Ageing analysis:
As of the end of the reporting period, the ageing analysis of trade debtors (which are included in trade and
other receivables), based on the revenue recognition date, is as follows:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within 1 month 16,903 35,046 21,249
1 to 2 months 372 864 1,037
2 to 3 months 371 279 247
Over 3 months but within 1 year 839 109 17
18,485 36,298 22,550
Trade debtors are due within 1 year from the date of revenue recognition. Further details on the Group’s credit
policy are set out in Note 28.
The Company
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Prepayments for listing expenses 8,194 10,549 12,484
Dividends receivables – 393,231 –
Other receivables – – 1,598
8,194 403,780 14,082
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 418 ---
16 CASH AND CASH EQUIV ALENTS AND OTHER CASH FLOW INFORMATION
(a) Cash and cash equivalents comprise:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Cash on hand 369 609 1,281
Cash at bank 134,041 355,680 245,871
134,410 356,289 247,152
(b) Reconciliation of profit before taxation to cash generated from operations:
Note 2022 2023 2024
RMB’000 RMB’000 RMB’000
Profit before taxation 43,177 387,973 418,655
Adjustments for:
Interest income and investment income 5 (5,985) (9,065) (8,932)
Depreciation 324,358 369,636 420,105
Amortisation of lease incentives 5 (1,263) (1,788) (703)
Amortisation of intangible assets 331 347 638
Finance costs 6(a) 41,541 42,657 45,309
Net losses/(gains) on disposal of
property, plant and equipment and
right-of-use assets 1,263 707 (1,046)
Impairment loss on property, plant and
equipment and right-of-use assets 6(c) – 4,636 –
Equity-settled share-based payment
expenses 6(b) (779) 844 5,447
Income on COVID-19 rent concessions 6(d) (10,176) – –
Changes in working capital:
Increase in inventories (9,240) (3,181) (7,336)
Increase in trade and other receivables
and rental deposits (30,288) (69,500) (32,353)
Increase/(decrease) in trade and other
payables 6,943 128,923 (2,441)
Increase in contract liabilities 4,820 1,367 1,174
Cash generated from operations 364,702 853,556 838,517
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 419 ---
(c) Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated cash flow statements as cash flows from financing activities.
Lease
liabilities
Bank
loans
Dividend
payable
Listing expense
payable –
capital element
(included in
trade and
other payables) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 19) (Note 23) (Note 27(d))
At 1 January 2022 746,798 501 – 131 747,430-------- -------- ---------- ------------- --------
Proceeds from bank loans – 116,000 – – 116,000
Repayment of bank loans – (85,500) – – (85,500)
Interest of bank loans paid – (595) – – (595)
Payment of capital element of
lease liabilities (119,558) – – – (119,558)
Payment of interest element of
lease liabilities (35,450) – – – (35,450)
Listing expenses paid – – – (2,763) (2,763)
Total changes from financing
cash flows (155,008) 29,905 – (2,763) (127,866)-------- -------- ---------- ------------- --------
Other changes:
Interest expenses 35,450 594 – – 36,044
Additions 198,107 – – 3,064 201,171
Disposal (37,555) – – – (37,555)
Total other changes 196,002 594 – 3,064 199,660
--------
-------- --------- ------------- --------
At 31 December 2022 and
1 January 2023 787,792 31,000 – 432 819,224
Proceeds from bank loans – 50,100 – – 50,100
Repayment of bank loans – (31,000) – – (31,000)
Interest of bank loans paid – (188) – – (188)
Payment of capital element of
lease liabilities (145,804) – – – (145,804)
Payment of interest element of
lease liabilities (36,640) – – – (36,640)
Listing expenses paid – – – (2,265) (2,265)
Total changes from financing
cash flows (182,444) 18,912 – (2,265) (165,797)
-------- -------- ---------- ------------- --------
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 420 ---
Lease
liabilities
Bank
loans
Dividend
payable
Listing expense
payable –
capital element
(included in
trade and
other payables) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 19) (Note 23) (Note 27(d))
Other changes:
Interest expenses 36,640 188 – – 36,828
Additions 237,447 – – 2,355 239,802
Disposals (5,883) – – – (5,883)
Dividends declared – – 350,028 – 350,028
Total other changes 268,204 188 350,028 2,355 620,775
--------
-------- --------- ------------- --------
At 31 December 2023 and
1 January 2024 873,552 50,100 350,028 522 1,274,202
Repayment of bank loans – (50,100) – – (50,100)
Interest of bank loans paid – (37) – – (37)
Payment of capital element of
lease liabilities (178,893) – – – (178,893)
Payment of interest element of
lease liabilities (39,305) – – – (39,305)
Dividends paid – – (350,028) – (350,028)
Payment of listing expenses – – – (2,121) (2,121)
Total changes from financing
cash flows (218,198) (50,137) (350,028) (2,121) (620,484)
-------- -------- ---------- ------------- --------
Exchange adjustments 560 – – – 560
Other changes:
Interest expenses 39,305 37 – – 39,342
Additions 432,428 – – 1,935 434,363
Disposals (24,707) – – – (24,707)
Total other changes 447,026 37 – 1,935 448,998--------
-------- --------- ------------- --------
At 31 December 2024 1,102,940 – – 336 1,103,276
(d) Total cash out flow for leases:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within operating cash flows 56,611 80,294 76,064
Within financing cash flows 155,008 182,444 218,198
211,619 262,738 294,262
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 421 ---
(e) Net cash outflow arising from the acquisition:
The recognised amounts of assets and liabilities at the date of acquisition on (see Note 13(e)) comprise the
following:
RMB’000
Trade and other receivables 4,582
Lease receivables 26,725
Cash and cash equivalents 10,883
Other assets 331
Trade and other payables (20,843)
Total net assets acquired 21,678
Non-controlling interests arising from acquisition (400)
Total consideration paid in cash 21,278
Less: cash and cash equivalents of subsidiaries acquired (10,883)
10,395
17 TRADE AND OTHER PAYABLES
The Group
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Trade payables 193,354 248,488 221,361
Staff cost payable 53,103 86,790 85,506
Listing expense payable 11,772 12,813 12,362
Other payables and accrued charges 70,689 139,778 138,392
Other taxes payable 2,944 5,466 4,718
331,862 493,335 462,339
As of the end of the reporting period, the ageing analysis of trade payable (which are included in trade and
other payables), based on the invoice date, is as follows:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within 1 year 188,464 244,325 217,699
Over 1 year but within 2 years 4,862 1,443 190
Over 2 years but within 3 years 28 2,720 3,472
193,354 248,488 221,361
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 422 ---
The Company
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Amounts due to subsidiaries 22,294 40,657 71,715
Other payables 11,778 8,932 11,295
34,072 49,589 83,010
The amounts due to subsidiaries are unsecured and interest-free.
18 CONTRACT LIABILITIES
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Advanced payment received 3,053 2,463 2,107
Customer loyalty scheme (Note) 2,427 4,384 5,914
5,480 6,847 8,021
Note: The estimated loyalty points arising from the customer loyalty scheme could be used in the future
consumptions in the restaurants. The balance at the end of each reporting period represented the
transaction price allocated to unsatisfied performance obligation.
Movement in contract liabilities
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
At the beginning of the year 660 5,480 6,847
Net increase in contract liabilities during the year 5,480 4,498 7,250
Decrease in contract liabilities as a result of
recognising revenue during the year that was
included in the contract liabilities at the
beginning of the year (660) (3,131) (6,076)
At the end of the year 5,480 6,847 8,021
Certain contract liabilities related to the customer loyalty scheme will be recognised as revenue when the
points are redeemed by the customers, which are expected to occur over the next two years.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 423 ---
19 LEASE LIABILITIES
At 31 December 2022, 2023 and 2024 the lease liabilities were repayable as follows:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Lease liabilities included in the consolidated
statements of financial position
– Within 1 year 181,859 214,345 256,728 ------------ ------------ ------------
– After 1 year but within 2 years 139,603 148,404 187,495
– After 2 years but within 5 years 308,436 336,390 417,395
– After 5 years 157,894 174,413 241,322
605,933 659,207 846,212------------
------------ ------------
787,792 873,552 1,102,940
20 LONG-TERM PAYABLES
In respect of the entrusted management operations of certain restaurant businesses as disclosed in Note 13(e),
the Group recognised long term payables to related parties for the acquisition of certain property, plant and equipment
and right-of-use assets of the related parties.
The following table shows the remaining contractual maturities of the Group’s long-term payables at the end
of the reporting period:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Long-term payables included in the consolidated
statements of financial position
– Within 1 year 6,148 7,593 – ------------ ------------ ------------
– After 1 year but within 2 years 5,803 5,232 –
– After 2 years but within 5 years 13,581 11,696 –
– After 5 years 59,899 59,757 –
79,283 76,685 –------------
------------ ------------
85,431 84,278 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 424 ---
21 PROVISIONS
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Provisions for restoration costs 35,040 43,116 51,620
The movements of provisions during the Relevant Periods were as follows:
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Balance at the beginning 30,199 35,040 43,116
Additional provisions 3,641 6,294 8,271
Interest on provisions 1,572 2,011 2,238
Provisions utilised (372) (229) (2,023)
Exchange adjustments – – 18
Balance at the end 35,040 43,116 51,620
Pursuant to the terms of the respective tenancy agreements entered into by the Group, the Group is required
to restore certain leased properties to the conditions as stipulated in the tenancy agreements at the expiration of the
corresponding lease term as appropriate. The provision for restoration costs was estimated based on certain
assumptions and estimates made by the Group’s management with reference to historical restoration costs and/or
other available market information. The estimation basis is reviewed on an ongoing basis and revised where
appropriate.
22 DEFERRED LEASE INCENTIVES
In accordance with the Group’s lease agreements, the Group has been granted lease incentive amounts from
certain lessors for the reimbursement of leasehold improvement costs of the leased properties. The Group accounted
for the benefit of the lease incentive amounts firstly as a deduction of the initial carrying amount of the right-of-use
assets, and then the excess as deferred lease incentives which are amortised on a straight-line basis over the term of
the leases.
In the consolidated cash flow statements, payments to the suppliers by the lessors amounting to
RMB4,894,000, nil and RMB1,981,000 for the years ended 31 December 2022, 2023 and 2024 were non-cash
transactions.
The movement of deferred lease incentives during the Relevant Periods was as follows:
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Balance at the beginning 12,544 15,504 12,769
Additions 4,894 – 1,981
Less accumulated amortisation
– deducted from variable lease payments (671) (947) (1,224)
– recognised as other income (1,263) (1,788) (703)
Balance at the end 15,504 12,769 12,823
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 425 ---
23 BANK LOANS
The analysis of the carrying amount of current bank loans and other borrowings is as follows:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Within one year or on demand
– secured – 25,000 –
– unsecured 31,000 25,100 –
31,000 50,100 –
As at 31 December 2023, the secured bank loan was pledged by bank deposits of RMB25,000,000.
As at 31 December 2022, 2023 and 2024, banking facilities of the Group totaling RMB330,000,000,
RMB400,000,000 and RMB600,000,000 were utilised to the extent of RMB31,000,000, RMB25,100,000 and nil,
respectively.
24 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(a) Current taxation in the consolidated statements of financial position represents:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Balance at the beginning 7,760 2,944 53,950
Provision for the PRC Corporate Income Tax
(Note 7(a)) 12,274 67,532 57,744
Withholding tax payable – 43,791 2,380
PRC Corporate Income Tax paid for the year (17,090) (60,317) (104,553)
Balance at the end 2,944 53,950 9,521
Representing:
Current taxation 5,831 55,442 10,916
Income tax prepayments (2,887) (1,492) (1,395)
2,944 53,950 9,521
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 426 ---
(b) Deferred tax assets/(liabilities) recognised
The components of deferred tax assets recognised in the consolidated statements of financial position and the
movements during the year are as follows:
Unused
tax losses
Unrealised
profits
Right-of-
use assets
Lease
liabilities Impairment
Customer
loyalty
scheme
Withholding
tax on
dividends Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 3,467 – (149,226) 176,113 149 – (27,003) 3,500
Credit/(charged) to
profit or loss 4,576 75 38,988 (37,554) (149) 437 (20,697) (14,324)
At 31 December
2022 8,043 75 (110,238) 138,559 – 437 (47,700) (10,824)
Withholding tax
payable –––––– 43,791 43,791
Credit/(charged) to
profit or loss 4,817 733 5,058 (2,741) – 352 (33,117) (24,898)
At 31 December
2023 12,860 808 (105,180) 135,818 – 789 (37,026) 8,069
Withholding tax
payable –––––– 2,380 2,380
Credit/(charged) to
profit or loss (2,238) (336) 5,184 (3,722) – 275 (9,907) (10,744)
At 31 December
2024 10,622 472 (99,996) 132,096 – 1,064 (44,553) (295)
According to PRC corporate income tax laws and its implementation rules, dividends receivable by non-PRC
corporate residents from Mainland China enterprises are subject to withholding tax at a rate of 10%, unless reduced
by tax treaties or arrangements, for profits earned since 1 January 2008.
In 2024, the Company’s Hong Kong SAR subsidiary received the certificate of Hong Kong SAR resident
status. Pursuant to the Arrangement between the Mainland China and the Hong Kong SAR for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (“Tax Treaties”) and the
Announcement of the State Taxation Administration in relation to “Beneficial Owner” in Tax Treaties
(“Announcement No. 9”), the Hong Kong subsidiary meets the requirement for enjoying the preferential rate and is
subject to withholding tax at a rate of 5% for dividends received from Mainland China subsidiaries since 2024.
As at 31 December 2022, 2023 and 2024, deferred tax liabilities of RMB47,700,000, RMB37,026,000 and
RMB44,553,000 have been recognised in connection with the withholding tax that would be payable on the
distribution of retained profits of the Group’s Mainland China subsidiaries in the foreseeable future.
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 427 ---
(c) Reconciliation to consolidated statements of financial position
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in the
consolidated statements of financial position 36,876 45,095 44,258
Net deferred tax liabilities recognised in the
consolidated statements of financial position (47,700) (37,026) (44,553)
(10,824) 8,069 (295)
(d) Deferred tax assets not recognised
In accordance with the accounting policy set out in Note 2(q), the Group has not recognised deferred tax assets
in respect of certain deductible temporary differences and cumulative tax losses as it is not probable that future
taxable profits against which the losses or deductible temporary differences can be utilised will be available in the
relevant tax jurisdiction and entity.
The following table presents the Group’s unused tax losses at the reporting dates:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Unused tax losses 719 5,166 6,785
The expiration information of the Group’s unused tax losses is set out below:
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
2026 155 155 155
2027 116 116 116
2028 448 4,895 2,831
2029 – – 950
Deductible losses without expiry date – – 2,733
Total 719 5,166 6,785
All the tax losses of subsidiaries of the Group in the Mainland China can be carried forward for a maximum
period of five years. Pursuant to the Notice No. 8 issued by the Ministry of Finance and the State Administration of
Taxation of the PRC on 6 February 2020, the maximum carried forward period of the tax losses affected by
COVID-19 in certain difficult industries, such as catering industry, is extended from five years to eight years.
All the tax losses of subsidiaries of the Group in Hong Kong SAR can be carried forward without expiry date.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 428 ---
(e) Deferred tax liabilities not recognised
At 31 December 2022, 2023 and 2024, temporary differences relating to the undistributed profits of Mainland
China subsidiaries amounted to nil, nil and RMB198,140,000. Deferred tax liabilities of nil, nil and RMB9,907,000
have not been recognised in respect of the tax that would be payable on the distribution of these retained profits as
the Group controls the dividend policy of Mainland China subsidiaries and it has been determined that it is probable
that these profits will not be distributed in the foreseeable future.
25 OTHER NON-CURRENT ASSETS
At
31 December
At
31 December
At
31 December
2022 2023 2024
RMB’000 RMB’000 RMB’000
Prepayments for purchase of property, plant and
equipment 286 407 13,213
26 EQUITY SETTLED SHARE-BASED PAYMENTS
Pursuant to a resolution of the board of directors of the Company passed on 28 February 2020, a restricted
share unit (“RSU”) scheme (“the Scheme”) was adopted for purpose of providing incentives to the qualified
employees of the Group. The RSUs will be granted to qualified employees of the Group through an RSU platform
and each RSU gives the holder the right to own one ordinary share of the Company. Under the Scheme, the number
of total RSUs is not more than 33,350,000 units, equal to 4.5% of total ordinary and preference shares of the
Company immediately after the Global Offering as mentioned in the Prospectus. The Scheme shall be valid and
effective for a period of 10 years commencing from 28 February 2020. The RSUs shall be exercised no earlier than
6 months after the Listing. The unvested RSUs shall be forfeited if a grantee resigns or has his/her employment
terminated after the grant-date.
Pursuant to a resolution of the board of directors of the Company passed on 28 February 2020, 28 December
2020 and 31 May 2022, the Company granted 24,406,582 RSUs, 7,003,338 RSUs and 3,600,288 RSUs, respectively
to certain directors and employees of the Group as follows:
Scheme A: On 28 February 2020 and 28 December 2020, 7,125,570 and 972,300 RSUs were granted to 3
directors and 61 employees of the Group at a price of RMB0.01 per unit, respectively and vested
immediately.
Scheme B: On 28 February 2020, 9,547,060 RSUs were granted to 3 directors and 50 employees of the
Group at a price of RMB0.01 per unit and are scheduled to be vested over four tranches, among
which, the first tranche has only service conditions to be met and the remaining tranches have
service conditions and certain performance conditions to be met. Subject to the grantee
continuing to be an employee of the Group, 25%, 25%, 25% and 25% of RSUs shall be vested
on 28 February 2021, 2022, 2023 and 2024, respectively.
On 28 December 2020, 2,769,666 RSUs were granted to 11 employees of the Group at a price
of RMB0.01 per unit and are scheduled to be vested over four tranches, among which, the first
tranche has only service conditions and the remaining tranches have service conditions and
certain performance conditions to be met. Subject to the grantee continuing to be an employee
of the Group, 25%, 25%, 25% and 25% of RSUs shall be vested on 28 February 2021, 2022,
2023 and 2024, respectively.
If the ending date of six months after the Listing (“the Updated V esting Date”) is later than
28 February 2022, the second tranche of 25% of RSUs granted on 28 February 2020 and
28 December 2020 mentioned above shall be vested on the Updated V esting Date and the
remaining third and fourth tranches of RSUs shall be vested on the ending date of 12 months
and 24 months after the Updated V esting Date, respectively.
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On 31 May 2022, 2,283,516 RSUs were granted to 21 employees of the Group at a price of
RMB0.01 per unit and are scheduled to be vested over four tranches, which have service
conditions and certain performance conditions to be met. Subject to the grantee continuing to
be an employee of the Group, 25%, 25%, 25% and 25% of RSUs shall be vested on the ending
date of 6 months, 18 months, 30 months and 42 months after the Listing, respectively.
If the performance conditions are not fulfilled, the corresponding tranche of RSUs granted can
be renewed for one year. If the performance conditions are still not fulfilled in the subsequent
year, the corresponding tranche of RSUs granted cannot be vested.
Scheme C: On 28 February 2020, 7,733,952 RSUs were granted to 3 directors and 50 employees of the
Group at a price of RMB2.92 per unit respectively and are scheduled to be vested over four
tranches with service conditions only. Subject to the grantee continuing to be an employee of
the Group, 25%, 25%, 25% and 25% of RSUs shall be vested on 28 February 2021, 2022, 2023
and 2024, respectively.
On 28 December 2020, 3,261,372 RSUs were granted to 11 employees of the Group at a price
of RMB2.92 per unit respectively and are scheduled to be vested over four tranches with service
conditions only. Subject to the grantee continuing to be an employee of the Group, 25%, 25%,
25% and 25% of RSUs shall be vested on 28 February 2021, 2022, 2023 and 2024, respectively.
If the ending date of six months after the Listing (“the Updated V esting Date”) is later than
28 February 2022, the second tranche of 25% of RSUs granted on 28 February 2020 and
28 December 2020 mentioned above shall be vested on the Updated V esting Date and the
remaining third and fourth tranches of RSUs shall be vested on the ending date of 12 months
and 24 months after the Updated V esting Date, respectively.
On 31 May 2022, 1,316,772 RSUs were granted to 21 employees of the Group at a price of
RMB2.92 per unit and are scheduled to be vested over four tranches, which have service
conditions and certain performance conditions to be met. Subject to the grantee continuing to
be an employee of the Group, 25%, 25%, 25% and 25% of RSUs shall be vested on the ending
date of 6 months, 18 months, 30 months and 42 months after the Listing, respectively.
The numbers and fair value of RSUs are as follows:
Weighted grant date
fair value per RSU Number of RSUs
RMB
Outstanding as at 1 January 2022 3.16 16,632,580
Granted during the year 4.50 3,600,288
Forfeited during the year 2.94 (202,099)
Outstanding as at 31 December 2022 3.40 20,030,769
Forfeited during the year 3.85 (808,398)
Outstanding as at 31 December 2023 3.38 19,222,371
Forfeited during the year 4.37 (304,191)
Outstanding as at 31 December 2024 3.37 18,918,180
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Fair value of RSUs
The fair value of RSUs was calculated based on the fair value of underlying ordinary shares as at the grant
date. The directors have used the income approach to determine the fair value of the underlying shares of the
Company and adopted the discounted cash flow to determine the fair value of the underlying ordinary shares.
Grant-date fair value
Scheme A Scheme B Scheme C
RMB’000 RMB’000 RMB’000
28 February 2020 2.94 2.94 2.94
28 December 2020 3.85 3.85 3.85
31 May 2022 N/A 4.50 4.50
The discounted cash flow derived by management considered the Company’s future business plan, specific
business and financial risks, the stage of development of the Company’s operations and economic and competitive
elements affecting the Company’s business, industry and market. The discount rates used for the grant date fair value
were 15.6%, 15.5% and 15.4% for RSUs granted as at 28 February 2020, 28 December 2020 and 31 May 2022
respectively.
The directors estimated the risk-free interest rate based on the yield of Chinese government bonds with
maturity of 20 years. Weighted average cost of capital was estimated based on selected comparable companies.
Expected retention rate of grantees
The Group estimates the expected yearly percentage of grantees that will stay within the Group at the end of
vesting periods of RSUs (the “Expected Retention Rate”) in order to determine the amount of share-based payment
expenses charged to the consolidated statement of profit or loss. As at 31 December 2022, 2023 and 2024, the
Expected Retention Rate was assessed to be 100%, 100% and 100%, respectively.
Share-based payment expenses of RMB844,000 and RMB5,447,000 are recognised as staff costs in the
consolidated statements of profit or loss for the years ended 31 December 2023 and 2024, respectively. Deduction
of share-based payment expenses of RMB779,000 are adjusted in staff costs in the consolidated statements of profit
or loss for the year ended 31 December 2022 due to the updated expectation of the satisfaction of service conditions
after considering the expected Listing date.
27 CAPITAL, RESERVES AND DIVIDENDS
(a) Share capital
Ordinary Shares
Number of
shares Amount Share capital
USD RMB
As at 1 January 2022, 31 December
2022, 2023 and 2024 398,950,000 7,979 54,778
Preference Shares
Number of
shares Amount Share capital
USD RMB
As at 1 January 2022, 31 December
2022, 2023 and 2024 156,650,000 3,133 21,606
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Ordinary shares
The Company was incorporated in the Cayman Islands on 4 June 2015 with authorised share capital of
USD50,000 divided into 50,000 ordinary shares with a par value of USD1.00 each. 10,000 ordinary shares
were issued to Time Sonic Investments Limited on 9 July 2015.
On 25 May 2017, 2,688 ordinary shares of par value of USD1.00 each were repurchased by the
Company.
On 17 March 2021, 667 ordinary shares of par value of USD1.00 each were newly issued to Longjing
Memory Limited (the “ RSU Nominee ”) , which was established in the British Virgin Islands for the purpose
of holding share for grant under the RSU Scheme.
Preference shares
On 25 May 2017, the Company issued a total of 3,133 preference shares of par value of USD1.00 each
to Partners Group Gourmet House Limited. The preference shareholder were, subject to certain limitations,
entitled to certain customary special rights including (i) redemption right to transfer its shares to Wang
Qinsong and Lu Changmei if the listing of the Company approval was not obtained by 25 May 2023 or such
later date as may be extended for one year by the parties in the event of a force majeure event with regard to
an affected fiscal year, or the performance of the Group does not meet certain target performance since 2019,
(ii) right to appoint two directors, (iii) pre-emptive right, (iv) co-sale right, and (v) information right. The
redemption rights shall terminate and be of no further force or effect immediately before the Company submits
its application for the Listing (the “Submission”), provided in the event where the Submission is withdrawn,
rejected, lapses and is not renewed within a prescribed period of time, or the Company fails to consummate
the Global Offering, such redemption rights shall automatically be reinstated in full. All other special rights
will be terminated automatically upon completion of the Global Offering. Each preference share shall
automatically be converted into an ordinary share on a one to one ratio upon the Listing.
The preference shares were recorded as equity of the Company.
Share sub-division
Pursuant to the resolution passed by the board of directors of the Company on 22 March 2021, each of
the above shares of par value of USD1.00 each was sub-divided into 50,000 shares of par value of USD0.00002
each.
(b) Movements in components of equity
The reconciliation between the opening and closing balances of each component of the Group’s consolidated
equity is set out in the consolidated statements of changes in equity. Details of the changes in the Company’s
individual components of equity between the beginning and the end of the year are set out below:
The Company
Share
capital
Share
premium
Share-based
payments
reserve
Exchange
reserve
Shares held
for RSU
schemes
(Accumulated
losses)/retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January
2022 76 45,250 53,513 (2,702) (4) (30,937) 65,196
Changes in equity for
2022:
Loss for the year – – – – – (11,498) (11,498)
Other comprehensive
income – – – 2,423 – – 2,423
Equity settled share-
based transactions – – (779) – – – (779)
Balance at 31
December 2022 76 45,250 52,734 (279) (4) (42,435) 55,342
APPENDIX I ACCOUNTANTS’ REPORT
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Share
capital
Share
premium
Share-based
payments
reserve
Exchange
reserve
Shares held
for RSU
schemes
(Accumulated
losses)/retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January
2023 76 45,250 52,734 (279) (4) (42,435) 55,342
Changes in equity for
2023:
Profit for the year – – – – – 384,985 384,985
Other comprehensive
income – – – 477 – – 477
Equity settled share-
based transactions – – 844 – – – 844
Dividends declared – (45,250) – – – (304,778) (350,028)
Balance at
31 December 2023 76 – 53,578 198 (4) 37,772 91,620
Balance at
1 January 2024 76 – 53,578 198 (4) 37,772 91,620
Changes in equity for
2024:
Loss for the year – – – – – (7,550) (7,550)
Other comprehensive
income – – – 410 – – 410
Equity settled share-base
settled transactions – – 5,447 – – – 5,447
Balance at
31 December 2024 76 – 59,025 608 (4) 30,222 89,927
(c) Nature and purposes of reserves
(i) Share premium
As at 31 December 2022, the share premium comprises capital contribution from Partners Group
Gourmet House Limited in excess of the par value of preference shares issued.
Under the Companies Law of Cayman Islands, the share premium account of the Company is
distributable to the equity shareholders of the Company provided that immediately following the date on which
the dividend is proposed to be distributed, the Company would be in a position to pay off its debt as they fall
due in the ordinary course of business.
(ii) Share-based payments reserve
The share-based payments reserve represents the portion of the grant date fair value of RSUs granted
to the directors and employees of the Group that has been recognised in accordance with the accounting policy
adopted for share-based payments in Note 2(p)(ii).
(iii) Exchange reserve
The exchange reserve comprises all foreign exchange differences arising from the translation of the
financial information of operations with functional currency other than RMB.
(iv) Statutory reserve
Statutory reserves are established in accordance with the PRC Company Law and the Articles of
Association of the companies comprising the Group which are incorporated in Mainland China.
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Appropriations to the reserves were required to allocate 10% of their profits after tax until the reserves
reach 50% of their respective registered capital.
Statutory reserve fund can be used to cover previous years’ losses, if any, and may be converted into
share capital by the issue of new shares to shareholders in proportion to their existing shareholdings or by
increasing the par value of the shares currently held by them, provided that the balance after such issue is not
less than 25% of the registered capital.
(v) Shares held for RSU schemes
On 1 March 2021, the Company appointed The Core Trust Company Limited (the “RSU Trustee”) as the
trustee to assist with the administration and vesting of RSUs granted pursuant to the RSU Scheme through the
RSU Nominee, a wholly-owned subsidiary of the RSU Trustee. Further details of the RSU Scheme are set out
in Note 26.
The RSU Nominee’s activities are conducted on behalf of the Company to settle its obligation under the
RSU Scheme and the Company also has the right to deal with the outstanding RSUs if the Company terminates
the RSU Scheme. The directors are of the view that the RSU Nominee is controlled by the Company.
Accordingly, the ordinary shares held by the RSU Nominee for RSU scheme are deducted from shareholders’
equity on consolidation until the shares are vested unconditionally to the grantees.
(d) Dividends
In accordance with the resolution of the board of directors of the Company dated 10 May 2023, a dividend of
RMB350,028,000 (RMB0.63 per ordinary share and RMB0.63 per preference share) was declared to Time Sonic
Investments Limited, Partners Group Gourmet House Limited and Longjing Memory Limited by the Company out
of share premium of RMB45,250,000 and retained profits of RMB304,778,000. The dividends were paid to the equity
shareholders of the Company in June 2024.
(e) Capital management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by
pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable
cost.
The Group actively and regularly reviews and manages its capital structure to maintain a balance between the
higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic
conditions.
The Group’s overall strategy remains unchanged throughout the Relevant Periods. The Group monitors its
capital structure with reference to its debt position. The Group’s strategy is to maintain the equity and debt in a
balanced position and ensure there are adequate working capital to service its debt obligations. The Group’s debt to
asset ratio, being the Group’s total liabilities over its total assets, as at 31 December 2022, 2023 and 2024 was 74%,
83% and 69%.
28 FINANCIAL RISK MANAGEMENT AND FAIR V ALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the Group’s
business. The Group’s exposure to these risks and the financial risk management policies and practices used by the
Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a
financial loss to the Group. The Group’s credit risk is primarily attributable to trade and other receivables and rental
deposits. The Group’s exposure to credit risk arising from cash and cash equivalents and financial assets at FVPL
are limited because the counterparties are banks and financial institutions with high-credit-quality, for which the
Group considers to have low credit risk.
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The Group’s trade receivables in connection with bills settled through payment platforms such as Unionpay,
Alipay or WeChat Pay are with high credit rating and no past due history. Management of the Group considers these
assets are short-term in nature and the probability of default is negligible on the basis of high-credit-rating issuers
during the Relevant Periods, and accordingly, no provision for impairment of trade receivables is considered
necessary by management for the Relevant Periods.
The Group has concentration of credit risk on amounts due from related parties as at the end of each reporting
period with details set out in Note 30. Management has made periodic assessments as well as individual assessment
on recoverability based on historical settlement records and adjusts for forward-looking information. In view of the
strong financial capability of these related parties and considered the future prospects of the industry these related
parties operate, management do not consider there is a risk of default and do not expect any losses from
non-performance by these related parties, and accordingly, no impairment was recognised in respect of the amounts
due from related parties.
In determining the ECL for rental deposits and other receivables, management of the Group has taken into
account the historical default experience and forward-looking information, as appropriate. Management of the Group
has assessed that other receivables have not had a significant increase in credit risk since initial recognition and risk
of default is insignificant, and therefore, no provision for impairment of other receivables is considered necessary by
management for the Relevant Periods.
The expected credit loss rate is insignificant and close to zero.
The Group does not provide any guarantees which would expose the Group to credit risk.
(b) Liquidity risk
In management of liquidity risk, the Group’s policy is to regularly monitor its liquidity requirements and its
compliance with lending covenants, to ensure that it maintains sufficient reserves of cash, readily realisable
marketable securities and adequate committed lines of funding from major financial institutions to meet its liquidity
requirements in the short and longer term.
The following tables show the remaining contractual maturities at the end of the reporting period of the
Group’s financial liabilities, which are based on contractual undiscounted cash flows (including interest payments
computed using contracted rates or, if floating, based on rates current at the end of the reporting period) and the
earliest date the Group can be required to pay.
31 December 2022
Contractual undiscounted cash outflow
Within
1 year or
on demand
More than
1 year but
less than
2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and other
payables 331,862 – – – 331,862 331,862
Bank loans 31,188 – – – 31,188 31,000
Lease liabilities 211,954 165,183 350,874 178,632 906,643 787,792
Long-term payables 8,755 8,317 21,571 106,176 144,819 85,431
583,759 173,500 372,445 284,808 1,414,512 1,236,085
APPENDIX I ACCOUNTANTS’ REPORT
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31 December 2023
Contractual undiscounted cash outflow
Within
1 year or
on demand
More than
1 year but
less than
2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and other
payables 493,335 – – – 493,335 493,335
Bank loans 50,138 – – – 50,138 50,100
Dividend payable 350,028 – – – 350,028 350,028
Lease liabilities 246,885 175,160 380,786 194,841 997,672 873,552
Long-term payables 11,206 8,684 21,980 105,761 147,631 84,278
1,151,592 183,844 402,766 300,602 2,038,804 1,851,293
31 December 2024
Contractual undiscounted cash outflow
Within
1 year or
on demand
More than
1 year but
less than
2 years
More than
2 years but
less than
5 years
More than
5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and other
payables 462,339 – – – 462,339 462,339
Lease liabilities 300,652 221,341 477,516 300,491 1,300,000 1,102,940
762,991 221,341 477,516 300,491 1,762,339 1,565,279
(c) Interest rate risk
(i) Interest rate profile
The following table details the interest rate profile of the Group’s borrowings at the end the Relevant
Periods:
Effective
interest rate
At 31 December
2022
% RMB’000
Fixed rate borrowings
– Bank loans 3.20%-3.90% 31,000
– Lease liabilities 4.35%-5.37% 787,792
– Long-term payables 4.35%-5.37% 85,431
904,223
APPENDIX I ACCOUNTANTS’ REPORT
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Effective
interest rate
At 31 December
2023
% RMB’000
Fixed rate borrowings
– Bank loans 3.50%-3.85% 50,100
– Lease liabilities 3.50%-5.37% 873,552
– Long-term payables 3.83%-5.37% 84,278
1,007,930
Effective
Interest rate
At 31 December
2024
% RMB’000
Fixed rate borrowings
– Lease liabilities 3.50%-5.37% 1,102,940
The Group does not account for any fixed rate financial instruments at fair value through profit or loss.
Therefore, a change in interest rate at the end of the reporting period would not affect profit or loss.
In respect of the exposure to cash flow interest rate risk arising from floating rate non-derivative
financial instruments held by the Group, such as cash and cash equivalents, at the end of the reporting period,
the Group is not exposed to significant interest rate risk as the interest rates of cash at bank are not expected
to change significantly.
Overall, the Group’s exposure to interest rate risk is not significant.
(d) Currency risk
The Group is not exposed to significant foreign currency risk since financial assets and liabilities denominated
in currencies other than functional currencies of the respective entities comprising the Group are not significant.
(e) Fair value measurement
(i) Financial assets measured at fair value
Fair value hierarchy
The following table presents the fair value of the Group’s financial instruments measured at the
end of reporting period on a recurring basis, categorised into the three-level fair value hierarchy as
defined in IFRS 13, Fair value measurement . The level into which a fair value measurement is classified
is determined with reference to the observability and significance of the inputs used in the valuation
technique as follows:
 Level 1: Fair values measured using only Level 1 inputs i.e.
unadjusted quoted prices in active markets for
identical assets or liabilities at the measurement
date
 Level 2: Fair value measured using Level 2 inputs i.e.
observable inputs which fail to meet Level 1, and
not using significant unobservable inputs.
Unobservable inputs are inputs for which market
data are not available
 Level 3: Fair value measured using significant unobservable
inputs
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Fair value measurements
as at 31 December 2022 categorised into
Fair value at
31 December
2022
Quoted
prices in
active market
for identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
RMB’000 RMB’000 RMB’000 RMB’000
Recurring fair value
measurement
Financial assets at
FVPL:
– wealth management
products 40,000 – – 40,000
Fair value measurements
as at 31 December 2023 categorised into
Fair value at
31 December
2023
Quoted
prices in
active market
for identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
RMB’000 RMB’000 RMB’000 RMB’000
Recurring fair value
measurement
Financial assets at
FVPL:
– wealth management
products 120,192 – – 120,192
Fair value measurements
as at 31 December 2024 categorised into
Fair value at
31 December
2024
Quoted
prices in
active market
for identical
assets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
RMB’000 RMB’000 RMB’000 RMB’000
Recurring fair value
measurement
Financial assets at
FVPL:
– wealth management
products 25,022 – – 25,022
APPENDIX I ACCOUNTANTS’ REPORT
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Information about Level 3 fair value measurements
Valuation techniques
Significant unobservable
inputs
Wealth management products Discounted cash flow (Note) Discount rate
Note: The fair value of wealth management products are calculated by discounting the expected
future cash flows. The fair value measurement is negatively correlated to discount rate. The
discount rate is determined according to market expected return rate. As at 31 December
2022, 2023 and 2024, it is estimated that with all other variables held constant, an
increase/decrease in fair value of wealth management products by 5% would have
increased/decreased the Group’s profit for the year by RMB1,605,000, RMB4,683,000 and
RMB1,038,000.
(ii) Fair value of financial instruments carried at other than fair value
The carrying amounts of the Group’s financial instruments carried at amortised cost were not materially
different from their fair value as at 31 December 2022, 2023 and 2024.
29 COMMITMENTS
Capital commitments outstanding at each reporting date during the Relevant Periods not provided for in the
consolidated financial statements were as follows:
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Contracted for 25,011 15,932 34,150
30 MATERIAL RELATED PARTY TRANSACTIONS
The Group entered into the following material related party transactions.
(a) Name and relationship with related parties
Name of related party Nature of relationship
Wang Qinsong and Lu Changmeiૠ˃੉ Controlling shareholders
(the “Controlling Shareholders”)
Hangzhou Greentea, Wuhan Greentea and Beijing
Greentea (note)
Entities controlled by Wang Qinsong and
Lu Changmei
Note: The Group acquired Hangzhou Greentea (including its non-wholly owned subsidiary Beijing Greentea)
on 25 December 2024, as disclosed in Note 13(e). Since then Hangzhou Greentea and Beijing Greentea
are not related parties of the Group.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to the Company’s directors
as disclosed in Note 8 and certain of highest paid employees as disclosed in Note 9, is as follows:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Short-term employee benefits 3,687 5,836 7,190
Contributions to defined contribution scheme 48 60 134
Equity-settled share-based payment expenses (192) 410 964
3,543 6,306 8,288
(c) Related party transactions
During the Relevant Periods, the Group entered into the following material related party transactions:
2022 2023 2024
RMB’000 RMB’000 RMB’000
Acquisition in terms of Hangzhou Greentea
and Beijing Greentea
Wang Qinsong – – 21,278
(d) Balance with related parties
As at 31 December 2022, 2023 and 2024, the Group had the following balances with related parties in respect
of entrusted management services as detailed in Note 13(e):
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Amounts due from/(to):
Trade in nature
Hangzhou Greentea 17,089 29,193 –
Beijing Greentea 2,802 (1,607) –
Wuhan Greentea 4,407 1,357 –
24,298 28,943 –
At
31 December
2022
At
31 December
2023
At
31 December
2024
RMB’000 RMB’000 RMB’000
Amounts due to:
Trade in nature – long-term payables
Hangzhou Greentea 76,399 77,036 –
Beijing Greentea 7,725 6,646 –
Wuhan Greentea 1,307 596 –
85,431 84,278 –
APPENDIX I ACCOUNTANTS’ REPORT
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Long-term payables to the above related parties arose from the acquisition of certain property, plant and
equipment and right-of-use assets for the entrusted management operations.
31 IMMEDIATE AND ULTIMATE CONTROLLING PARTY
As at the date of this report, the Directors consider the immediate parent of the Group to be Time Sonic
Investments Limited and ultimate controlling party of the Group to be Wang Qinsong and Lu Changmei.
32 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE RELEV ANT PERIODS
Up to the date of issue of Historical Financial Information, the IASB has issued a number of amendments, and
new standard and interpretations, which are not yet effective for the Relevant Periods and which have not been
adopted in the Historical Financial Information. These developments include the following which may be relevant
to the Group.
Effective
for accounting
periods beginning
on or after
Amendments to IAS 21, Lack of exchangeability 1 January 2025
Amendments to IFRS 9 and IFRS 7, Contracts Referencing
Nature-dependent Electricity
1 January 2026
Amendments to IFRS 9 and IFRS 7, Amendments to the Classification and
Measurement of Financial Instruments
1 January 2026
Annual Improvements to IFRS Accounting Standards – V olume 11 1 January 2026
IFRS 18, Presentation and Disclosure in Financial Statements 1 January 2027
IFRS 19, Subsidiaries without Public Accountability: Disclosures 1 January 2027
Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an
investor and its associate or joint venture
No mandatory
effective date yet
determined
The Group is in the process of making an assessment of what the impact of these developments is expected
to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a
significant impact on the consolidated financial statements.
33 SUBSEQUENT EVENTS
The Company intends to declare and distribute by December 2025 a special dividend (the “ Special Dividend ”)
in an amount of no less than RMB180 million to its shareholders (including its new shareholders after the listing of
the Company’s shares on the Stock Exchange) based on its distributable retained profits from the subsidiaries as of
31 December 2024 and share premium, upon the declaration of the Special Dividend. The Company will make
announcements in due course after the listing of its shares on the Stock Exchange in respect of the declaration and
payment of the Special Dividend. The Controlling Shareholders (including entities controlled by them) have
undertaken to vote in favor of the shareholders’ resolution for the declaration and payment of such Special Dividend.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its subsidiaries in respect of any
period subsequent to 31 December 2024.
APPENDIX I ACCOUNTANTS’ REPORT
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The following information does not form part of the Accountant’ s Report from KPMG,
Certified Public Accountants, Hong Kong, the Company’ s reporting accountants, as set out in
Appendix I, and is included for information purposes only. The unaudited pro forma financial
information should be read in conjunction with the section headed “Financial Information”
and the Accountants’ Report set out in Appendix I.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group prepared in accordance with Rule 4.29 of the Listing Rules is to illustrate the
effect of the Global Offering on the consolidated net tangible assets of the Group attributable
to equity shareholders of the Company as if the Global Offering had been completed on 31
December 2024. The unaudited pro forma statement of adjusted consolidated net tangible
assets has been prepared for illustrative purpose only and because of its hypothetical nature,
it may not give a true picture of the financial position of the Group had the Global Offering
been completed as at 31 December 2024 or any future date.
Consolidated
net tangible assets
of the Group
attributable to
equity shareholders
of the Company as
of 31 December 2024
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets of
the Group
attributable
to equity
shareholders of
the Company
Unaudited pro forma
adjusted consolidated net
tangible assets of the Group
attributable to equity
shareholders of
the Company per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price
of HK$7.19 per Share 767,678 737,036 1,504,714 2.23 2.40
Notes:
(1) The consolidated net tangible assets of the Group attributable to equity shareholders of the Company as
at 31 December 2024 have been calculated based on the consolidated total equity of the Company as at
31 December 2024 of RMB770,733,000 less intangible assets of RMB3,055,000, extracted from the
Accountants’ Report set out in Appendix I to this Prospectus.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$7.19 per Share
and the assumption that there are 117,854,800 newly issued Shares in the Global Offering, after
deduction of the estimated underwriting commissions and other listing related expenses paid and
payable by the Group (excluding the listing expenses charged to profit or loss up to 31 December 2024)
and taking no account of any Shares which may fall to be issued upon the exercise of Over-allotment
Option.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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The estimated net proceeds of the Global Offering have been converted to Renminbi at the exchange rate
of HK$1.0000 to RMB0.9295. No representation is made that the Hong Kong dollar amounts have been,
could have been or could be converted into RMB, or vice versa, at that rate or at any other rates.
(3) The number of shares used for the calculation of unaudited pro forma adjusted consolidated net tangible
assets of the Group attributable to equity shareholders of the Company per Share is based on
673,454,800 Shares in issue immediately upon the completion of the Global Offerings, assuming that
the Global Offering have been completed on 31 December 2024, and taking no account of any Shares
which may fall to be issued upon the exercise of the Over-allotment Option.
(4) For illustrative purpose, the unaudited pro forma adjusted consolidated net tangible assets of the Group
attributable to equity shareholders of the Company per Share in RMB are converted to the Hong Kong
dollar at the exchange rate of HK$1.00 to RMB0.9295. No representation is made that the Hong Kong
dollar amounts have been, could have been or may be converted to Renminbi, or vice versa, at the rate
or at any other rates or at all.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into
subsequent to 31 December 2024. The Company intends to declare and distribute by December 2025 a
special dividend (the “ Special Dividend ”) in an amount of no less than RMB180 million to its
shareholders (including its new shareholders after the listing of the Company’s shares on the Stock
Exchange) based on its distributable retained profits from the subsidiaries as of 31 December 2024 and
share premium, upon the declaration of the Special Dividend. The Company will make announcements
in due course after the listing of its shares on the Stock Exchange in respect of the declaration and
payment of the Special Dividend. The Controlling Shareholders (including entities controlled by them)
have undertaken to vote in favor of the shareholders’ resolution for the declaration and payment of such
Special Dividend. This effect has not been adjusted in the unaudited pro forma adjusted consolidated net
tangible assets of the Group attributable to equity shareholders of the Company.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’ s pro forma financial
information for the purpose of incorporation in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of Green Tea Group Limited
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Green Tea Group Limited (the “Company”) and its subsidiaries
(collectively the “Group”) by the directors of the Company (the “Directors”) for illustrative
purposes only. The unaudited pro forma financial information consists of the unaudited pro
forma statement of adjusted consolidated net tangible assets as at 31 December 2024 and
related notes as set out in Part A of Appendix II to the prospectus dated 8 May 2025 (the
“Prospectus”) issued by the Company. The applicable criteria on the basis of which the
Directors have compiled the pro forma financial information are described in Part A of
Appendix II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the ordinary shares of the Company (the “Global Offering”)
on the Group’s financial position as at 31 December 2024 as if the Global Offering had taken
place at 31 December 2024. As part of this process, information about the Group’s financial
position as at 31 December 2024 has been extracted by the Directors from the Group’s
historical financial information included in the Accountants’ Report as set out in Appendix I
to the Prospectus.
Directors’ Responsibilities 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 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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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 behaviour.
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
(“HKSAE”) 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 purpose 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 pro forma financial information included in an investment circular is solely to
illustrate the impact of a significant event or transaction on unadjusted financial information
of the Group as if the event had occurred or 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 events or transactions as at 31 December 2024 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 presenting
the significant effects directly attributable to the event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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--- page 445 ---
 the pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the Group, the event or 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.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as
if they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company’s shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed “Future Plans and Use of
Proceeds” in the Prospectus.
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 purposes of the pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
Hong Kong
8 May 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
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SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS
COMPANY LA W
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 Islands company law.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on June 4, 2015 under the Companies Act. The Company’s constitutional
documents consist of its Amended and Restated Memorandum of Association (the
“Memorandum ”) and its Amended and Restated Articles of Association (the “ Articles ”).
1. Memorandum of Association
(a) The Memorandum provides, inter alia , that the liability of members of the Company
is limited and that the objects for which the Company is established are unrestricted
(and therefore include acting as an investment company), and that the Company
shall have and be capable of exercising any and all of the powers at any time or from
time to time exercisable by a natural person or body corporate whether as principal,
agent, contractor or otherwise and, since 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) By special resolution the Company may alter the Memorandum with respect to any
objects, powers or other matters specified in it.
2. Articles of Association
The Articles were adopted on April 30, 2025 with effect from the Listing Date. A
summary of certain provisions of the Articles is set out below.
(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
any class of shares may (unless otherwise provided for by the terms of issue of the
shares 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
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLANDS COMPANY LA W
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--- page 447 ---
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. The provisions of the
Articles relating to general meetings shall mutatis mutandis apply to every such
separate general meeting, but so that the necessary quorum (other than at an
adjourned meeting) shall be not less than two persons together holding (or, in the
case of a member being a corporation, by its duly authorized representative) 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 on a poll to one
vote for every such share held by him, and any holder of shares of the class present
in person or by proxy may demand a poll.
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 by the creation or issue of further shares
ranking pari passu therewith.
(iii) Alteration of capital
The Company may, by an ordinary resolution of its members: (a) increase its
share capital by the creation of new shares of such amount as it thinks expedient; (b)
consolidate or divide all or any of its share capital into shares of larger or smaller
amount than its existing shares; (c) divide its unissued shares into several classes
and attach to such shares any preferential, deferred, qualified or special rights,
privileges or conditions; (d) subdivide its shares or any of them into shares of an
amount smaller than that fixed by the Memorandum; (e) cancel any shares which, at
the date of the resolution, have not been taken or agreed to be taken by any person
and diminish the amount of its share capital by the amount of the shares so
cancelled; (f) make provision for the allotment and issue of shares which do not
carry any voting rights; and (g) change the currency of denomination of its share
capital.
(iv) Transfer of shares
Subject to the Companies Act and the requirements of The Stock Exchange of
Hong Kong Limited (the “ Stock Exchange ”), all transfers of shares shall be effected
by an instrument of transfer in the usual or common form or in such other form as
the Board may approve and may be under hand or, if the transferor or transferee is
a Clearing House or its nominee(s), under 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 OUR COMPANY
AND CAYMAN ISLANDS COMPANY LA W
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Execution of the instrument of transfer shall be 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 transferor or transferee or accept
mechanically executed transfers. The transferor shall be deemed to remain the
holder of a share until the name of the transferee is entered in the register of
members of the Company in respect of that share.
The Board may, in its absolute discretion, at any time and from time to time
remove any share on the principal register to any branch register or any share on any
branch register to the principal register or any other branch register. Unless the
Board otherwise agrees, no shares on the principal register shall be removed to any
branch register nor shall shares on any branch register be removed to the principal
register or any other branch register. All removals and other documents of title shall
be lodged for registration and registered, in the case of shares on any branch register,
at the relevant registration office and, in the case of shares on the principal register,
at the place at which the principal register is located.
The Board may, in its absolute discretion, decline to register a transfer of any
share (not being a fully paid up share) to a person of whom it does not approve or
on which the Company has a lien. It may also decline to register a transfer of any
share issued under any share option scheme upon which a restriction on transfer
subsists or a transfer of any share to more than four joint holders.
The Board may decline to recognise any instrument of transfer unless a certain
fee, up to such maximum sum as the Stock Exchange may determine to be payable,
is paid to the Company, the instrument of transfer is properly stamped (if
applicable), is in respect of only one class of share and is lodged at the relevant
registration office or the place at which the principal register is located accompanied
by the relevant share certificate(s) and such other evidence as the Board may
reasonably require is provided 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 register of members may, subject to the Listing Rules, be closed at such
time or for such period not exceeding in the whole 30 days in each year as the Board
may determine.
Fully paid shares shall be free from any restriction on transfer (except when
permitted by the Stock Exchange) and shall also be free from all liens.
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLANDS COMPANY LA W
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(v) Power of the Company to purchase its own shares
The Company may 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 requirement imposed from time to time by the Articles or any code, rules
or regulations issued from time to time by the Stock Exchange and/or the Securities
and Futures Commission of Hong Kong.
(vi) Power of any subsidiary of the Company to own shares in the Company
There are no provisions in the Articles relating to the 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 as it thinks fit 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) and
not by the conditions of allotment of such shares made payable at fixed times. A call
may be made payable either in one sum or by instalments. 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 20% per annum as the Board shall fix from
the day appointed for payment 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 money uncalled and unpaid or instalments payable upon
any shares held by him, and in respect of all or any of the monies so advanced the
Company may pay interest at such rate (if any) not exceeding 20% per annum as the
Board may decide.
If a member fails to pay any call or instalment of a call on the day appointed
for payment, the Board may, for so long as any part of the call or instalment remains
unpaid, serve not less than 14 days’ notice on the member requiring payment of so
much of the call or instalment as is unpaid, together with any interest which may
have accrued and which may still accrue up to the date of actual payment. The notice
shall name a further day (not earlier than the expiration of 14 days from the date of
the notice) on or before which the payment required by the notice is to be made, and
shall also name the place where payment is to be made. The notice shall also state
that, in the event of non-payment at or before the appointed time, the shares in
respect of which the call was made will be liable to be forfeited.
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
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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.
A person whose shares have been forfeited shall cease to be a member in
respect of the forfeited shares but shall, nevertheless, 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 payment at such rate not
exceeding 20% per annum as the Board may prescribe.
(b) Directors
(i) Appointment, retirement and removal
At any time or from time to time, the Board shall have the power to appoint
any person as a Director either to fill a casual vacancy on the Board or as an
additional Director to the existing Board subject to any maximum number of
Directors, if any, as may be determined by the members in general meeting. Any
Director so appointed to fill a casual vacancy shall hold office only until the first
annual general meeting of the Company after his appointment and be subject to
re-election at such meeting. Any Director so appointed as an addition to the existing
Board shall hold office only until the first annual general meeting of the Company
after his appointment and be eligible for re-election at such meeting. Any Director
so appointed by the Board shall not be taken into account in determining the
Directors or the number of Directors who are to retire by rotation at an annual
general meeting.
At each annual general meeting, one third of the Directors for the time being
shall retire from office by rotation. However, if the number of Directors is not a
multiple of three, then the number nearest to but not less than one third shall be the
number of retiring Directors. The Directors to retire in each year shall be those who
have been in office longest 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 shall (unless they otherwise agree among themselves) be determined
by lot.
No person, other than a retiring Director, shall, unless recommended by the
Board for election, be eligible for election to the office of Director at any general
meeting, unless notice in writing of the intention to propose that person for election
as a Director and notice in writing by that person of his willingness to be elected has
been lodged at the head office or at the registration office of the Company. The
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLANDS COMPANY LA W
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period for lodgment of such notices shall commence no earlier than the day after
despatch of the notice of the relevant meeting and end no later than seven days
before the date of such meeting and the minimum length of the period during which
such notices may be lodged must be at least seven days.
A Director is not required to hold any shares in the Company by way of
qualification nor is there any specified upper or lower age limit for Directors either
for accession to or retirement from the Board.
A Director may be removed by an ordinary resolution of the members 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 the Company may by an ordinary resolution appoint another in his
place. Any Director so appointed shall be subject to the “retirement by rotation”
provisions. The number of Directors shall not be less than two.
The office of a Director shall be vacated if he:
(aa) resigns;
(bb) dies;
(cc) is declared to be of unsound mind and the Board resolves that his office
be vacated;
(dd) becomes bankrupt or has a receiving order made against him or suspends
payment or compounds with his creditors generally;
(ee) is prohibited from being or ceases to be a director by operation of law;
(ff) without special leave, is absent from meetings of the Board for six
consecutive months, and the Board resolves that his office is vacated;
(gg) has been required by the stock exchange of the Relevant Territory (as
defined in the Articles) to cease to be a Director; or
(hh) is removed from office by the requisite majority of the Directors or
otherwise pursuant to the Articles.
From time to time 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 also delegate any of its powers
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
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--- page 452 ---
to committees consisting of such Director(s) or other person(s) as the Board thinks
fit, and from time to time it may also 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 shall, in the exercise
of the powers 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, the Memorandum and Articles
and without prejudice to any special rights conferred on the holders of any shares
or class of shares, any share may be issued with or have attached to it such rights,
or such restrictions, whether with regard to dividend, voting, return of capital or
otherwise, as the Company may by an ordinary resolution determine (or, in the
absence of any such determination or so far as the same may not make specific
provision, as the Board may determine). Any share may be issued on terms that,
upon the happening of a specified event or upon a given date and either at the option
of the Company or the holder of the share, it is liable to be redeemed.
The Board may issue warrants to subscribe for any class of shares or other
securities of the Company on such terms as it may from time to time determine.
Where warrants are issued to bearer, no certificate in respect of such warrants
shall be issued to replace one that has been lost unless the Board is satisfied beyond
reasonable doubt that the original certificate has been destroyed and the Company
has received an indemnity in such form as the Board thinks fit with regard to the
issue of any such replacement certificate.
Subject to the provisions of the Companies Act, the Articles and, where
applicable, the rules of any stock exchange of the Relevant Territory (as defined in
the Articles) 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 shall be 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.
Neither the Company nor the Board shall be 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 whose
registered addresses are in any particular territory or territories where, in the
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
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absence of a registration statement or other special formalities, this is or may, in the
opinion of the Board, be unlawful or impracticable. However, no member affected
as a result of the foregoing shall 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
While there are no specific provisions in the Articles relating to the disposal of
the assets of the Company or any of its subsidiaries, the Board may 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, but if such power or act is
regulated by the Company in general meeting, such regulation shall not invalidate
any prior act of the Board which would have been valid if such regulation had not
been made.
(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
uncalled capital of the Company and, subject to the Companies Act, to issue
debentures, debenture stock, 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 Directors shall be entitled to receive, as ordinary remuneration for their
services, such sums as shall from time to time be determined by the Board or the
Company in general meeting, as the case may be, such sum (unless otherwise
directed by the resolution by which it is determined) to be divided among the
Directors in such proportions and in such manner as they may agree or, failing
agreement, either equally or, in the case of any Director holding office for only a
portion of the period in respect of which the remuneration is payable, pro rata. The
Directors shall also be entitled to be repaid all expenses reasonably incurred by them
in attending any Board meetings, committee meetings or general meetings or
otherwise in connection with the discharge of their duties as Directors. Such
remuneration shall be in addition to any other remuneration to which a Director who
holds any salaried employment or office in the Company may be entitled by reason
of such employment or office.
Any Director who, at the request of the Company, performs services which in
the opinion of the Board goes beyond the ordinary duties of a Director may be paid
such special or extra remuneration as the Board may determine, in addition to or in
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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 shall be in addition to his ordinary remuneration as a Director.
The Board may establish, either on its own or jointly in concurrence or
agreement with subsidiaries of the Company or companies with which the Company
is associated in business, or may make 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 former Director
who may hold or have held any executive office or any office of profit with the
Company or any of its subsidiaries) and former employees of the Company and their
dependents or any class or classes of such persons.
The Board may also pay, enter into agreements to pay or make grants of
revocable or irrevocable, whether or not subject to any terms or conditions, pensions
or other benefits to employees and former employees and their dependents, or to any
of such persons, including pensions or benefits additional to those, if any, to which
such employees or former employees or their dependents are or may become entitled
under any such scheme or fund as mentioned above. Such pension or benefit may,
if deemed desirable by the Board, be granted to an employee either before and in
anticipation of, or upon or at any time after, his actual retirement.
(vi) Compensation or payments for loss of office
Payments to any present 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
or statutorily entitled) must be approved by the Company in general meeting.
(vii) Loans and provision of security for loans to Directors
The Company shall not directly or indirectly make a loan to a Director or a
director of any holding company of the Company or any of their respective close
associates, enter into any guarantee or provide any security in connection with a
loan made by any person to a Director or a director of any holding company of the
Company or any of their respective close associates, or, if any one or more of the
Directors hold(s) (jointly or severally or directly or indirectly) a controlling interest
in another company, make a loan to that other company or enter into any guarantee
or provide any security in connection with a loan made by any person to that other
company.
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(viii) Financial assistance to purchase Shares
Subject to the Companies Act, or any other law or so far as not prohibited by
any law and subject to any rights conferred on the holders of any class of Shares,
the Company shall have the power to give, directly or indirectly, by means of a loan,
a guarantee, an indemnity, the provision of security or otherwise howsoever,
financial assistance for the purpose of or in connection with a purchase or other
acquisition made or to be made by any person of any Shares or warrants or other
securities in the Company or any company which is a holding company of the
Company.
(ix) Disclosure of interest in contracts with the Company or any of its subsidiaries
With the exception of the office of auditor of the Company, a Director may
hold any other office or place of profit with 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 for that other office or place of profit, in
whatever form, in addition to any remuneration provided for by or pursuant to any
other Articles. A Director may be or become a director, officer or member of 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 or other benefit
received by him as a director, officer or member of 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 in favour of any resolution appointing the Directors or any
of them to be directors or officers of such other company.
No Director or intended Director shall be disqualified by his office from
contracting with the Company, 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 for any profit realised by any such contract or arrangement by reason
only of such Director holding that office or the fiduciary relationship established by
it. A Director who is, in any way, materially interested in a contract or arrangement
or proposed contract or arrangement with the Company shall declare the nature of
his interest at the earliest meeting of the Board at which he may practically do so.
There is no power to freeze or otherwise impair any of the rights attaching to
any share by reason that the person or persons who are interested directly or
indirectly in that share have failed to disclose their interests to the Company.
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A Director shall not vote or be counted in the quorum on any resolution of the
Board in respect of any contract or arrangement or proposal in which he or any of
his close associate(s) has/have a material interest, and if he shall do so his vote shall
not be counted nor shall he be counted in the quorum for that resolution, but this
prohibition shall not apply to any of the following matters:
(aa) the giving of any security or indemnity 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;
(bb) the giving of any security or indemnity 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/have himself/themselves assumed
responsibility in whole or in part whether alone or jointly under a
guarantee or indemnity or by the giving of security;
(cc) any proposal concerning an offer of shares, 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;
(dd) any proposal or arrangement concerning the benefit of employees of the
Company or any of its subsidiaries, including the adoption, modification
or operation of either: (i) any employees’ share scheme or any share
incentive or share option scheme under which the Director or his close
associate(s) may benefit; or (ii) any of a pension fund or retirement, death
or disability benefit scheme which relates to Directors, their close
associates and employees of the Company or any of its subsidiaries and
does not provide in respect of any Director or his close associate(s) any
privilege or advantage not generally accorded to the class of persons to
which such scheme or fund relates; and
(ee) 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, debentures or other securities of the Company by virtue only of
his/their interest in those shares, debentures or other securities.
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(x) Proceedings of the Board
The Board may meet anywhere in the world for the despatch of business and
may adjourn and otherwise regulate its meetings as it thinks fit. 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 a second or casting vote.
(c) Alterations to the constitutional documents and the Company’s name
To the extent that the same is permissible under Cayman Islands law and subject to
the Articles, the Memorandum and Articles of the Company may only be altered or
amended, and the name of the Company may only be changed, with the sanction of a
special resolution of the Company.
(d) Meetings of member
(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 by proxy or, in the case of members which are corporations, by their
duly authorised representatives or, where proxies are allowed, by proxy at a general
meeting of which notice specifying the intention to propose the resolution as a
special resolution has been duly given.
Under the Companies Act, a copy of any special resolution must be forwarded
to the Registrar of Companies in the Cayman Islands within 15 days of being passed.
An “ordinary resolution”, by contrast, is 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 members which 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.
A resolution in writing signed by or on behalf of all members shall be treated
as an ordinary resolution duly passed at a general meeting of the Company duly
convened and held, and where relevant as a special resolution so passed.
(ii) V oting rights and right to demand a poll
Subject to any special rights, restrictions or privileges as to voting for the time
being attached to any class or classes of shares at any general meeting: (a) 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 share
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which is fully paid or credited as fully paid registered in his name in the register of
members of the Company but so that no amount paid up or credited as paid up on
a share in advance of calls or instalments is treated for this purpose as paid up on
the share; and (b) on a show of hands every member who is present in person (or,
in the case of a member being a corporation, by its duly authorised representative)
or by proxy shall have one vote. Where more than one proxy is appointed by a
member which is a Clearing House (as defined in the Articles) or its nominee(s),
each such proxy shall have one vote on a show of hands. On a poll, a member
entitled to more than one vote need not use all his votes or cast all the votes he does
use in the same way.
At any general meeting a resolution put to the vote of the meeting is to be
decided by poll save that the chairman of the meeting may, pursuant to the Listing
Rules, allow a resolution to be voted on by a show of hands. Where a show of hands
is allowed, before or on the declaration of the result of the show of hands, a poll may
be demanded by (in each case by members present in person or by proxy or by a duly
authorised corporate representative):
(A) at least two members;
(B) any member or members representing not less than one-tenth of the total
voting rights of all the members having the right to vote at the meeting;
or
(C) a member or members holding shares in the Company conferring a right
to vote at the meeting on which an aggregate sum has been paid equal to
not less than one-tenth of the total sum paid up on all the shares
conferring that right.
Should a Clearing House or its nominee(s) be a member of the Company, such
person or persons may be authorised 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 in accordance with this provision shall be
deemed to have been duly authorised without further evidence of the facts and be
entitled to exercise the same rights and powers on behalf of the Clearing House or
its nominee(s) as if such person were an individual member including the right to
vote and the right to speak.
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Where the Company has knowledge that any member is, under the Listing
Rules, required to abstain from voting on any particular resolution or restricted to
voting only for or only against any particular resolution, 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
The Company must hold an annual general meeting each financial year other
than the financial year of the Company’s adoption of the Articles. Such annual
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, if any)
and shall be held in the Relevant Territory or elsewhere as may be determined by the
Board and at such time and place as the Board shall appoint.
(iv) Requisition of general meetings
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. Such requisition shall be made in writing to the Board or the secretary of
the Company for the purpose of requiring an extraordinary general meeting to be
called by the Board for the transaction of any business specified in such requisition.
Such meeting shall be held within two 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 (themselves) may do so in the same manner,
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.
(v) Notices of meetings and business to be conducted
An annual general meeting of the Company shall be called by at least 21 days’
notice in writing, and any other general meeting of the Company shall be called by
at least 14 days’ notice in writing. The notice shall be 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 the time, place and agenda of the meeting and particulars of the resolution(s)
to be considered at that meeting and, in the case of special business, the general
nature of that business.
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Except where otherwise expressly stated, any notice or document (including a
share certificate) to be given or issued under the Articles shall be in writing, and may
be served by the Company on any member personally, by post to such member’s
registered address or by advertisement in the newspapers or by electronic means or
by publishing it on the Company’s website and/or the website of the Stock
Exchange. Any member whose registered address is outside Hong Kong may notify
the Company in writing of (i) an address in Hong Kong which shall be deemed to
be his registered address for this purpose or (ii) an electronic address for the purpose
of service of notice. Subject to the Companies Act and the Listing Rules, a notice
or document may also be served or delivered by the Company to any member by
electronic means.
Although a meeting of the Company may be called by shorter notice than as
specified above, such meeting may be deemed to have been duly called if it is so
agreed:
(i) in the case of an annual general meeting, by all members of the Company
entitled to attend and vote thereat; and
(ii) in the case of any other meeting, by a majority in number of the members
having a right to attend and vote at the meeting holding not less than 95%
of the total voting rights in the Company.
All business transacted at an extraordinary general meeting shall be deemed
special business. All business shall also be deemed special business where it is
transacted at an annual general meeting, with the exception of certain routine
matters which shall be deemed ordinary business.
(vi) 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, and continues to be present until the
conclusion of the meeting.
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 and entitled to vote. In respect of a separate class meeting (other than
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.
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(vii) 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
shall be 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 shall be 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 if it were an individual member. On a poll or on a show of hands, votes may
be given either personally (or, in the case of a member being a corporation, by its
duly authorized representative) or by proxy.
The instrument appointing a proxy shall be in writing under the hand of the
appointor or of his attorney duly authorised in writing, or if the appointor is a
corporation, either under seal or under the hand of a duly authorised officer or
attorney. Every instrument of proxy, whether for a specified meeting or otherwise,
shall be in such form as the Board may from time to time approve, provided that it
shall not preclude the use of the two-way form. Any form issued to a member for
appointing a proxy to attend and vote at an extraordinary general meeting or at an
annual general meeting at which any business is to be transacted shall be such as to
enable the member, according to his intentions, to instruct the proxy to vote in
favour of or against (or, in default of instructions, to exercise his discretion in
respect of) each resolution dealing with any such business.
(viii) Right to Speak
All members have the right to (a) speak at a general meeting; and (b) vote at
a general meeting except where a member is required, by the Listing Rules, to
abstain from voting to approve the matter under consideration.
(e) Accounts and audit
The Board shall cause proper books of account to be kept of the sums of money
received and expended by the Company, and of the assets and liabilities of the Company
and of all other matters required by the Companies Act (which include all sales and
purchases of goods by the company) necessary to give a true and fair view of the state
of the Company’s affairs and to show and explain its transactions.
The books of accounts of the Company shall be kept at the head office of the
Company 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
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inspect any account, book or document of the Company except as conferred by the
Companies Act or ordered by a court of competent jurisdiction or authorised by the Board
or the Company in general meeting.
The Board shall from time to time cause to be prepared and laid before the Company
at its annual general meeting balance sheets and profit and loss accounts (including every
document required by law to be annexed thereto), together with a copy of the Directors’
report and a copy of the auditors’ report, not less than 21 days before the date of the
annual general meeting. Copies of these documents shall be sent to every person entitled
to receive notices of general meetings of the Company under the provisions of the Articles
together with the notice of annual general meeting, not less than 21 days before the date
of the meeting.
Subject to the rules of the stock exchange of the Relevant Territory (as defined in
the Articles), the Company may send summarized financial statements to members who
have, in accordance with the rules of the stock exchange of the Relevant Territory,
consented and elected to receive summarized financial statements instead of the full
financial statements. The summarized financial statements must be accompanied by any
other documents as may be required under the rules of the stock exchange of the Relevant
Territory, and must be sent to those members that have consented and elected to receive
the summarised financial statements not less than 21 days before the general meeting.
The members may by an ordinary resolution appoint auditor(s) to hold office until
the conclusion of the next annual general meeting on such terms and with such duties as
may be agreed with the Board. The auditors’ remuneration shall be fixed by the members
in a general meeting by an ordinary resolution in such manner as the members may
determine.
The members may, at a general meeting remove the auditor(s) by an ordinary
resolution at any time before the expiration of the term of office of the auditor(s) and
shall, by an ordinary resolution, at that meeting appoint new auditor(s) in place of the
removed auditor(s) for the remainder of the term.
The auditors shall audit the financial statements of the Company in accordance with
generally accepted accounting principles of Hong Kong, the International Accounting
Standards or such other standards as may be permitted by the Stock Exchange.
(f) 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.
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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 of which the dividend is paid, although no amount paid
up on a share in advance of calls shall for this purpose be treated as paid up
on the share;
(ii) all dividends shall be apportioned and paid pro rata in accordance with the
amount paid up on the shares during any portion(s) of the period in respect of
which the dividend is paid; and
(iii) the Board may deduct from any dividend or other monies payable to any
member all sums of money (if any) presently payable by him to the Company
on account of calls, instalments or otherwise.
Where the Board or the Company in general meeting has resolved that a
dividend should be paid or declared, the Board may resolve:
(aa) 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 to such dividend will be entitled to elect to receive such dividend
(or part thereof) in cash in lieu of such allotment; or
(bb) that the 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.
Upon the recommendation of the Board, the Company may by an ordinary resolution
in respect of any one particular dividend of the Company determine 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, bonus or other sum payable in cash to the holder of shares may be
paid by cheque or warrant sent through the post. Every such cheque or warrant shall be
made payable to the order of the person to whom it is sent and shall be sent at the holder’s
or joint holders’ risk and 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 monies payable or property
distributable in respect of the shares held by such joint holders.
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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.
The Board may, if it thinks fit, receive from any member willing to advance the
same, and either in money or money’s worth, all or any part of the money uncalled and
unpaid or instalments payable upon any shares held by him, and in respect of all or any
of the monies so advanced may pay interest at such rate (if any) not exceeding 20% per
annum, as the Board may decide, but a payment in advance of a call shall not entitle the
member to receive any dividend or to exercise any other rights or privileges as a member
in respect of the share or the due portion of the shares upon which payment has been
advanced by such member before it is called up.
All dividends, bonuses or other distributions unclaimed for one year after having
been declared may be invested or otherwise used 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, bonuses or other distributions unclaimed for six years after having
been declared may be forfeited by the Board and, upon such forfeiture, 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.
The Company may exercise the power to cease sending cheques for dividend
entitlements or dividend warrants by post if such cheques or warrants remain uncashed on
two consecutive occasions or after the first occasion on which such a cheque or warrant
is returned undelivered.
(g) Inspection of corporate records
For so long as any part of the share capital of the Company is listed on the Stock
Exchange, any member may inspect any register of members of the Company maintained
in Hong Kong (except when the register of members is closed) without charge and require
the provision to him of copies or extracts of such register in all respects as if the Company
were incorporated under and were subject to the Hong Kong Companies Ordinance.
(h) Rights of minorities in relation to fraud or oppression
There are no provisions in the Articles concerning the rights of minority members
in relation to fraud or oppression. However, certain remedies may be available to
members of the Company under Cayman Islands law, as summarized in paragraph 3(f) of
this Appendix.
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(i) Procedures on liquidation
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, the surplus assets remaining after payment to all
creditors shall be divided among the members in proportion to the capital paid
up on the shares held by them respectively; and
(ii) if the Company is wound up and the surplus assets available for distribution
among the members are insufficient to repay the whole of the paid-up capital,
such assets shall be distributed, subject to the rights of any shares which may
be issued on special terms and conditions, so that, as nearly as may be, the
losses shall be borne by the members in proportion to the capital paid up on the
shares held by them, respectively.
If the Company is wound up (whether the liquidation is voluntary or compelled by
the court), the liquidator may, with the sanction 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 consist of property of
one kind or 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 so divided and may
determine how such division shall be carried out as between the members or different
classes of members and the members within each class. The liquidator may, with the like
sanction, vest any part of the assets in trustees upon such trusts for the benefit of members
as the liquidator thinks fit, but so that no member shall be compelled to accept any shares
or other property upon which there is a liability.
(j) Subscription rights reserve
Provided that it is not prohibited by and is otherwise 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 the shares to be
issued on the exercise of such warrants, a subscription rights reserve shall be established
and applied in paying up the difference between the subscription price and the par value
of such shares.
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3. Cayman Islands Company Law
The Company was incorporated in the Cayman Islands as an exempted company on 4 June
2015 subject to the Companies Act. Certain provisions of Cayman Islands company law are set
out below but this section does not purport to contain all applicable qualifications and
exceptions or to be a complete review of all matters of the Companies Act and taxation, which
may differ from equivalent provisions in jurisdictions with which interested parties may be
more familiar.
(a) Company operations
An exempted company such as the Company must conduct its operations mainly
outside the Cayman Islands. An exempted company is also 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.
(b) Share capital
Under the Companies Act, a Cayman Islands company may issue ordinary,
preference or redeemable shares or any combination thereof. Where a company issues
shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount
or 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 arrangements in
consideration of the acquisition or cancellation of shares in any other company and issued
at a premium. The share premium account may be applied by the company subject to the
provisions, if any, of its memorandum and articles of association, in such manner as the
company may from time to time determine including, but without limitation, the
following:
(i) paying distributions or dividends to members;
(ii) paying up unissued shares of the company to be issued to members as fully
paid bonus shares;
(iii) any manner provided in section 37 of the Companies Act;
(iv) writing-off the preliminary expenses of the company; and
(v) writing-off the expenses of, or the commission paid or discount allowed on,
any issue of shares or debentures of the company.
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Notwithstanding the foregoing, 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.
Subject to confirmation by the court, a company limited by shares or a company
limited by guarantee and having a share capital may, if authorised to do so 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 are no statutory prohibitions in the Cayman Islands on the granting of
financial assistance by a company to another person for the purchase of, or subscription
for, its own, its holding company’s or a subsidiary’s shares. Therefore, a company may
provide financial assistance provided the directors of the company, when proposing to
grant such financial assistance, discharge their duties of care and act in good faith, for a
proper purpose and in the interests of the company. 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 member and, for
the avoidance of doubt, 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 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; an ordinary resolution of the company approving the
manner and terms of the purchase will be required if the articles of association do not
authorise the manner and terms of such purchase. A company may not redeem or purchase
its shares unless they are fully paid. Furthermore, 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. In addition,
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 that have been purchased or redeemed by a company or surrendered to the
company shall not be treated as cancelled but shall be classified as treasury shares if held
in compliance with the requirements of Section 37A(1) of the Companies Act. Any such
shares shall continue to be classified as treasury shares until such shares are either
cancelled or transferred pursuant to the Companies Act.
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A Cayman Islands company may be able to purchase its own warrants subject to and
in accordance with the terms and conditions of the relevant warrant instrument or
certificate. Thus there is no requirement under Cayman Islands law that a company’s
memorandum or articles of association contain a specific provision enabling such
purchases. The directors of a company may under the general power contained in its
memorandum of association be able to buy, sell and deal in personal property of all kinds.
A subsidiary may hold shares in its holding company and, in certain circumstances,
may acquire such shares.
(e) Dividends and distributions
Subject to a solvency test, as prescribed in the Companies Act, and the provisions,
if any, of the company’s memorandum and articles of association, a company may pay
dividends and distributions out of its share premium account. In addition, based upon
English case law which is likely to be persuasive in the Cayman Islands, dividends may
be paid out of profits.
For so long as a company holds treasury shares, 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, in
respect of a treasury share.
(f) Protection of minorities and shareholders’ suits
It can be expected that the Cayman Islands courts will ordinarily follow English case
law precedents (particularly the rule in the case of Foss v. Harbottle and the exceptions
to that rule) which permit a minority member to commence a representative action against
or derivative actions in the name of the company to challenge acts which are ultra vires,
illegal, fraudulent (and performed by those in control of the Company) against the
minority, or represent an irregularity in the passing of a resolution which requires a
qualified (or special) majority which has not been obtained.
Where a company (not being a bank) is one which has 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 the affairs of the
company and, at the direction of the court, to report on such affairs. In addition, any
member 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.
In general, claims against a company by its members must be based on the general
laws of contract or tort applicable in the Cayman Islands or be based on potential
violation of their individual rights as members as established by a company’s
memorandum and articles of association.
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(g) Disposal of assets
There are no specific restrictions on the power of directors to dispose of assets of
a company, however, the directors are expected to exercise certain duties of care,
diligence and skill to the standard that a reasonably prudent person would exercise in
comparable circumstances, in addition to fiduciary duties to act in good faith, for proper
purpose and in the best interests of the company under English common law (which the
Cayman Islands courts will ordinarily follow).
(h) Accounting and auditing requirements
A company must cause proper records of accounts to be kept with respect to: (i) all
sums of money received and expended by it; (ii) all sales and purchases of goods by it
and (iii) its assets and liabilities.
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.
If a company keeps its books of account at any place other than at its registered
office or any other place within the Cayman Islands, it shall, upon service of an order or
notice by the Tax Information Authority pursuant to the Tax Information Authority Act
(2013 Revision) of the Cayman Islands, make available, in electronic form or any other
medium, at its registered office copies of its books of account, or any part or parts thereof,
as are specified in such order or notice.
(i) Exchange control
There are no exchange control regulations or currency restrictions in effect in the
Cayman Islands.
(j) Taxation
Pursuant to section 6 of the Tax Concessions Act (2018 Revision) of the Cayman
Islands, the Company has obtained an undertaking from the Financial Secretary that:
(i) no law which is enacted in the Cayman Islands imposing any tax to be levied on
profits or income or gains or appreciations shall apply to the Company or its
operations; and
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(ii) no tax be levied on profits, income gains or appreciations or which is in the nature
of estate duty or inheritance tax shall be payable by the Company:
(aa) on or in respect of the shares, debentures or other obligations of the Company;
or
(bb) by way of the withholding in whole or in part of any relevant payment as
defined in section 6(3) of the Tax Concessions Act (2018 Revision).
The undertaking for the Company is for a period of 30 years from November 1, 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.
(k) Stamp duty on transfers
No stamp duty is 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.
(l) Loans to directors
There is no express provision prohibiting the making of loans by a company to any
of its directors. However, the company’s articles of association may provide for the
prohibition of such loans under specific circumstances.
(m) Inspection of corporate records
The members of a company have no general right 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 of association.
(n) Register of members
A Cayman Islands exempted company may maintain its principal register of
members and any branch registers in any country or territory, whether within or outside
the Cayman Islands, as the company may determine from time to time. There is no
requirement for an exempted company to make any returns of members to the Registrar
of Companies in 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
APPENDIX III SUMMARY OF THE CONSTITUTION OF OUR COMPANY
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--- page 471 ---
form or any other medium, such register of members, including any branch register of
member, 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 (2013 Revision) of
the Cayman Islands.
(o) Register of Directors and officers
Pursuant to the Companies Act, the Company is required to maintain at its registered
office a register of directors, alternate 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
30 days of any change in such directors or officers, including a change of the name of
such directors or officers.
(p) Winding up
A Cayman Islands company may be wound up by: (i) an order of the court; (ii)
voluntarily by its members; or (iii) under the supervision of the court.
The court has authority to order winding up in a number of specified circumstances
including where, in the opinion of the court, it is just and equitable that such company be
so wound up.
A voluntary winding up of a company (other than a limited duration company, for
which specific rules apply) occurs where the company resolves by special resolution that
it be wound up voluntarily or where the company in general meeting resolves that it be
wound up voluntarily because it is unable to pay its debt as they fall due. In the case of
a voluntary winding up, the company is obliged to cease to carry on its business from the
commencement of its winding up except so far as it may be beneficial for its winding up.
Upon appointment of a voluntary liquidator, all the powers of the directors cease, except
so far as the company in general meeting or the liquidator sanctions their continuance.
In the case of a members’ voluntary winding up of a company, one or more
liquidators are appointed for the purpose of winding up the affairs of the company and
distributing its assets.
As soon as the affairs of a 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 the property of the company disposed of, and call a general meeting of the
company for the purposes of laying before it the account and giving an explanation of that
account.
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When a resolution has been passed by a company to wind up voluntarily, the
liquidator or any contributory or creditor may apply to the court for an order for the
continuation of the winding up under the supervision of the court, on the grounds that: (i)
the company is or is likely to become insolvent; or (ii) the supervision of the court will
facilitate a more effective, economic or expeditious liquidation of the company in the
interests of the contributories and creditors. A supervision order takes effect for all
purposes as if it was an order that the company be wound up by the court except that a
commenced voluntary winding up and the prior actions of the voluntary liquidator shall
be valid and binding upon the company and its official liquidator.
For the purpose of conducting the proceedings in winding up a company and
assisting the court, one or more persons may be appointed to be called an official
liquidator(s). The court may appoint to such office such person or persons, either
provisionally or otherwise, as it thinks fit, and if more than one person is appointed to
such office, the court shall declare whether any act required or authorized 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.
(q) Reconstructions
Reconstructions and amalgamations may be approved by a (i) 75% in value of the
members or class of members or (ii) a majority in number representing 75% in value of
the creditors or class of creditors, depending on the circumstances, as are present at a
meeting called for such purpose and thereafter sanctioned by the courts. Whilst a
dissenting member has the right to express to the court his view that the transaction for
which approval is being sought would not provide the members with a fair value for their
shares, the courts are unlikely to disapprove the transaction on that ground alone in the
absence of evidence of fraud or bad faith on behalf of management, and if the transaction
were approved and consummated the dissenting member would have no rights
comparable to the appraisal rights (i.e. the right to receive payment in cash for the
judicially determined value of their shares) ordinarily available, for example, to
dissenting members of a United States corporation.
(r) Take-overs
Where an offer is made by a company for the shares of another company and, within
four months of the offer, the holders of not less than 90% of the shares which are the
subject of the offer accept, the offeror may, at any time within two months after the
expiration of that four-month period, by notice require the dissenting members to transfer
their shares on the terms of the offer. A dissenting member may apply to the Cayman
Islands courts within one month of the notice objecting to the transfer. The burden is on
the dissenting member to show that the court should exercise its discretion, which it will
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--- page 473 ---
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 members.
(s) 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, save to the extent
any such provision may be held by the court to be contrary to public policy, for example,
where a provision purports to provide indemnification against the consequences of
committing a crime.
4. General
Appleby, the Company’s legal adviser on Cayman Islands law, has sent to the Company
a letter of advice which summarises certain aspects of the Cayman Islands company law. This
letter, together with a copy of the Companies Act, is available on display as referred to in the
paragraph headed “Documents Available on Display” in Appendix V . 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 of Our Company
Our Company was incorporated in the Cayman Islands under Companies Act as an
exempted company with limited liability on June 4, 2015. We have established a principal place
of business in Hong Kong SAR at Room 1918, 19/F, Lee Garden One, 33 Hysan Avenue,
Causeway Bay, Hong Kong SAR and have been registered with the Registrar of Companies in
Hong Kong SAR as a non-Hong Kong company under Part 16 of the Companies Ordinance.
Ms. Lai Siu Kuen has been appointed as the authorized representative of our Company for the
acceptance of service of process and notices in Hong Kong SAR.
As our Company was incorporated in the Cayman Islands, our corporate structure and
Memorandum and Articles of Association are subject to the relevant laws and regulations of the
Cayman Islands. A summary of the relevant laws and regulations of the Cayman Islands and
of the Memorandum and Articles of Association is set out in “Summary of the Constitution of
Our Company and Cayman Islands Company Law” in Appendix III to this prospectus.
2. Changes in the Share Capital of Our Company
As of the date of incorporation of our Company, our Company had an authorized share
capital of US$50,000, divided into 50,000 ordinary shares of US$1.00 each.
The following changes in the share capital of our Company have taken place within two
years immediately preceding the date of this prospectus:
 Immediately after the Underwriting Agreements becoming unconditional and in any
event before the Listing, as part of the Preferred Shares Conversion, the authorized
share capital of our Company will be increased by creation of 156,650,000 ordinary
Shares with a par value of US$0.00002 each, and the authorized share capital of the
Company shall comprise 2,500,000,000 Shares with a par value of US$0.00002 each
and 156,650,000 Series-A Preferred Shares with a par value of US$0.00002 each.
On the same date, our Company shall repurchase 156,650,000 Series-A Preferred
Shares (the “ Repurchased Shares ”) of a nominal or par value of US$0.00002 each,
and issue and allot 156,650,000 ordinary shares with a par value of US$0.00002 to
Partners Gourmet, both repurchase and allotment were at par value. Accordingly,
after the above allotment, the issued share capital of our Company shall comprise
555,600,000 ordinary shares of US$0.00002 each and the Repurchased Shares will
be immediately cancelled. After the above steps are completed as part of Preferred
Shares Conversion, the authorized but unissued Series-A Preferred Shares of our
Company shall be cancelled, and the authorized share capital of our Company will
comprise 2,500,000,000 ordinary shares of par value of US$0.00002 each.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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Immediately following the completion of the Global Offering but without taking into
account any Shares which may be issued upon the exercise of the Over-allotment Option, the
issued share capital of our Company will be US$13,469, divided into 673,454,800 Shares of
US$0.00002 each, all fully paid or credited as fully paid and 1,826,545,200 Shares of
US$0.00002 each will remain unissued.
Save as disclosed above and in this prospectus, there has been no alteration in the share
capital of our Company since within two years immediately preceding the date of this
prospectus.
3. Resolutions in Writing of the Shareholders of Our Company Passed on April 30, 2025
Pursuant to the written resolutions passed by the Shareholders on April 30, 2025:
(a) immediately after the Underwriting Agreements becoming unconditional and in any
event before the Listing: (i) the authorized share capital of our Company be
increased by the creation of 156,650,000 ordinary shares with a par value of
US$0.00002 which will, upon issue and being fully paid rank pari passu in all
respects with the Shares of our Company in issue, so that the authorized share
capital of our Company shall comprise 2,500,000,000 ordinary shares with a par
value of US$0.00002 each and 156,650,000 Series-A Preferred Shares with a par
value of US$0.00002 each; (ii) following the increase in authorized share capital, to
repurchase 156,650,000 Series-A Preferred Shares of our Company of a nominal or
par value of US$0.00002 each (the “ Repurchase ”) in our Company at par value and
the repurchase price shall be set-off against and funded out of the Subscription Price
(as defined below) payable by Shareholders in connection to the Allotment of
Relevant Shares (as defined below); (iii) upon completion of the Repurchase, to
issue and allot 156,650,000 ordinary Shares (the “ Relevant Shares ”) with a par
value of US$0.00002 in the share capital of our Company on a one to one basis (the
“Allotment of Relevant Shares ”) at par value of US$0.00002 per share (the
“Subscription Price ”) to Partners Gourmet, such that after the Allotment of the
Relevant Shares, the issued share capital of our Company comprises 555,600,000
ordinary shares of US$0.00002 each and the Repurchased Shares were immediately
cancelled; (iv) subsequently, after the above steps were completed as part of
Preferred Shares Conversion, the authorized but unissued Series-A Preferred Shares
of our Company be cancelled so that the authorized share capital of our Company
comprises 2,500,000,000 Shares of par value of US$0.00002 each (the “ Preferred
Shares Conversion ”);
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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(b) our Company adopted the Memorandum of Association and the Articles of
Association with effect from the Listing Date; and
(c) conditional on (1) the Listing Committee granting the listing of, and permission to
deal in, the Shares in issue and to be issued as mentioned in this prospectus, (2) the
Offer Price being fixed on the Price Determination Date and (3) the obligations of
the Underwriters under the Underwriting Agreements becoming unconditional and
not being terminated in accordance with the terms therein or otherwise, in each case
on or before such dates as may be specified in the Underwriting Agreements:
(i) the Global Offering was approved and the Directors were authorized to allot
and issue the new Shares pursuant to the Global Offering;
(ii) the granting of the Over-allotment Option was approved;
(iii) the proposed Listing was approved and the Directors were authorized to
implement the Listing;
(iv) a general unconditional mandate was granted to the Directors to allot, issue and
deal with Shares or securities convertible into Shares or options, warrants or
similar rights to subscribe for Shares or such convertible securities and to make
or grant offers, agreements or options which would or might require the
exercise of such powers, provided that the aggregate nominal value of Shares
allotted or agreed to be allotted by the Directors other than pursuant to (a) a
rights issue, (b) any scrip dividend scheme or similar arrangement providing
for the allotment of Shares in lieu of the whole or part of a dividend on Shares
in accordance with the Articles of Association, (c) the exercise of any
subscription or conversion rights attaching to any warrants or securities which
are convertible into Shares or in issue prior to the date of passing the relevant
resolution or (d) a specific authority granted by the Shareholders in general
meeting, shall not exceed the aggregate of (1) 20% of the total nominal value
of the share capital of our Company in issue immediately following the
completion of the Global Offering (but excluding any Shares which may be
issued pursuant to the exercise of the Over-allotment Option and (2) the total
nominal value of the share capital of our Company repurchased by our
Company (if any) under the general mandate to repurchase Shares referred to
in paragraph (v) below, such mandate to remain in effect during the period
from the passing of the resolution until the earliest of the conclusion of our
next annual general meeting, the end of the period within which we are
required by any applicable law or the Articles of Association to hold our next
annual general meeting and the date on which the resolution is varied or
revoked by an ordinary resolution of the Shareholders in general meeting (the
“Applicable Period ”);
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 477 ---
(v) a general unconditional mandate was granted to the Directors to exercise all
powers of our Company to repurchase on the Stock Exchange or on any other
stock exchange on which the securities of our Company may be listed and
which is recognized by the SFC and the Stock Exchange for this purpose
Shares with a total nominal value of not more than 10% of the total nominal
value of the share capital of our Company in issue immediately following
completion of the Global Offering (but excluding any Shares which may be
issued pursuant to the exercise of the Over-allotment Option), such mandate to
remain in effect during the Applicable Period; and
(vi) the general unconditional mandate mentioned in paragraph (iv) above be
extended by the addition to the aggregate nominal amount of the share capital
of our Company which may be allotted or agreed conditionally or
unconditionally to be allotted by the Directors pursuant to such general
mandate of an amount representing the aggregate nominal amount of the share
capital of our Company repurchased by our Company pursuant to the mandate
to repurchase Shares referred to in paragraph (v) above, provided that such
extended amount shall not exceed 10% of the aggregate nominal amount of the
Company’s share capital in issue immediately following completion of the
Global Offering.
4. Our Corporate Reorganization
The companies comprising the Group underwent the Reorganization in preparation for the
Listing. Please see section headed “History, Reorganization and Corporate Structure” for
further details.
5. Changes in the Share Capital of Our Subsidiaries
Our subsidiaries which principally affected the results, assets or liabilities of the Group
are referred to in the Accountants’ Report, the text of which is set out in Appendix I to this
prospectus.
The following sets out the changes in the share capital of our subsidiaries during the two
years immediately preceding the date of this prospectus.
Zhangjiagang Anyou Food & Beverage Management Company Limited (
ಥτᎴ᎛භ၍
ʮ̡)
On January 6, 2023, the registered capital of Zhangjiagang Anyou Food & Beverage
Management Company Limited was increased from RMB500,000 to RMB2,000,000.
Tibet Green Tea F&B
On February 27, 2023, the registered capital of Tibet Green Tea F&B was increased from
RMB20,000,000 to RMB20,408,200.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 478 ---
Tibet Green Tea Enterprise
On January 24, 2024, the registered capital of Tibet Green Tea Enterprise was increased
from RMB5,000,000 to RMB5,500,000.
Yangzhou Xinhuan Food & Beverage Management Company Limited ( ౮ψอካ᎛භ၍ଣϞ
ʮ̡)
On October 18, 2024, the registered capital of Y angzhou Xinhuan Food & Beverage
Management Company Limited was increased from RMB200,000 to RMB500,000.
Save as disclosed above, there has been no alterations in the share capital of our
subsidiaries within the two years immediately preceding the date of this prospectus.
6. Repurchases of Our Own Securities
(a) Provisions of the Listing Rules
The Listing Rules permit companies with a primary listing on the Stock Exchange
to repurchase their own securities on the Stock Exchange subject to certain restrictions,
the more important of which are summarized below:
(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 the shareholders in general
meeting, either by way of general mandate or by specific approval of a particular
transaction.
Pursuant to a resolution passed by our then Shareholders on April 30, 2025, a
general unconditional mandate (the “ Repurchase Mandate ”) was given to the
Directors authorizing any repurchase by our Company of Shares on the Stock
Exchange or on any other stock exchange on which the securities may be listed and
which is recognized by the SFC and the Stock Exchange for this purpose, of not
more than 10% of the aggregate nominal value of our Company’s share capital in
issue immediately following the completion of the Global Offering (without taking
into account any Shares which may be issued pursuant to the exercise of the
Over-allotment Option), such mandate to expire at the conclusion of our next annual
general meeting, the date by which our next annual general meeting is required by
the Companies Act or by our Articles of Association or any other applicable laws of
the Cayman Islands to be held or when revoked or varied by an ordinary resolution
of Shareholders in general meeting, whichever first occurs.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 479 ---
(ii) Trading Restrictions
The total number of shares which a listed company may repurchase on the
Stock Exchange is the number of shares representing up to a maximum of 10% of
the aggregate number of shares in issue. A company may not issue or announce a
proposed issue of new securities for a period of 30 days immediately following a
repurchase (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. In addition, a listed company is prohibited from repurchasing its shares
on the Stock Exchange if the purchase price is 5% or more than the average closing
market price for the five preceding trading days on which its shares were traded on
the Stock Exchange. The Listing Rules also prohibit a listed company from
repurchasing its securities if the repurchase would result in the number of listed
securities which are in the hands of the public falling below the relevant prescribed
minimum percentage as required by the Stock Exchange. A company is required to
procure that the broker appointed by it to effect a repurchase of securities discloses
to the Stock Exchange such information with respect to the repurchase as the Stock
Exchange may require.
(iii) Status of Repurchased Shares
All repurchased securities (whether effected on the Stock Exchange or
otherwise) will be automatically delisted and the certificates for those securities
must be cancelled and destroyed.
(iv) Suspension of Repurchase
A listed company may not make any repurchase of securities at any time after
inside information has come to its knowledge until the information has been made
publicly available. In particular, during the period of one month immediately
preceding the earlier of (a) the date of the board meeting (as such date is first
notified to the Stock Exchange in accordance with the Listing Rules) for the
approval of a listed company’s results for any year, half-year, quarterly or any other
interim period (whether or not required under the Listing Rules) and (b) the deadline
for publication of an announcement of a listed company’s 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), the listed company may not repurchase its
shares on the Stock Exchange other than in exceptional circumstances. In addition,
the Stock Exchange may prohibit a repurchase of securities on the Stock Exchange
if a listed company has breached the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-6 –


--- page 480 ---
(v) Reporting Requirements
Certain information relating to repurchases of securities 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 business day. In addition, a listed company’s
annual report is required to disclose details regarding repurchases of securities made
during the year, including a monthly analysis of the number of securities
repurchased, the purchase price per share or the highest and lowest price paid for all
such repurchases, where relevant, and the aggregate prices paid.
(vi) Connected Persons
A listed company is prohibited from knowingly repurchasing securities on the
Stock Exchange from a “connected person”, that is, a director, chief executive or
substantial shareholder of the company or any of its subsidiaries or their associates
and a connected person is prohibited from knowingly selling his securities to the
company.
(b) Reasons for Repurchases
The Directors believe that the ability to repurchase Shares is in the interests of our
Company and the Shareholders. Repurchases may, depending on the circumstances, result
in an increase in the net assets and/or earnings per Share. The Directors sought the grant
of a general mandate to repurchase Shares to give our Company the flexibility to do so
if and when appropriate. The number of Shares to be repurchased on any occasion and the
price and other terms upon which the same are repurchased will be decided by the
Directors at the relevant time having regard to the circumstances then pertaining.
(c) Funding of Repurchases
Repurchases must be funded out of funds legally available for the purpose in
accordance with the Memorandum and the Articles of Association of our Company and
the Listing Rules and the applicable laws of the Cayman Islands.
A listed company may 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. Any repurchases of Shares by our Company must be
made out of the profits of our Company, the credit standing to the share premium account
of our Company or out of a fresh issue of Shares made for the purpose of the repurchase
or, subject to the Companies Act, out of capital. Any premium payable on a repurchase
must be provided for, out of the profits of our Company or from sums standing to the
credit of the share premium account of our Company or, subject to the Companies Act,
out of capital.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-7 –


--- page 481 ---
There could be a material adverse impact on the working capital and/or gearing
position of our Company (as compared with the position disclosed in this prospectus) in
the event that the repurchase mandate were to be carried out in full at any time during the
share repurchase period. However, the Directors do not propose to exercise the general
mandate to such extent as would, in the circumstances, have a material adverse effect on
the working capital requirements of our Company or the gearing levels which in the
opinion of the Directors are from time to time appropriate for our Company.
(d) General
The exercise in full of the repurchase mandate, on the basis of 673,454,800 Shares
in issue immediately following the completion of the Global Offering and assuming the
Over-allotment Option is not exercised, could accordingly result in up to approximately
67,345,480 Shares being repurchased by our Company during the period prior to:
(i) the conclusion of our next annual general meeting; or
(ii) the end of the period within which we are required by any applicable law or our
Articles of Association to hold our next annual general meeting; or
(iii) the date when the repurchase mandate is varied or revoked by an ordinary
resolution of our Shareholders in general meeting,
whichever is the earliest.
None of the Directors nor, to the best of their knowledge having made all reasonable
enquiries, any of their associates currently intends to sell any Shares to our Company.
The 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
the applicable laws in the Cayman Islands.
No connected person of our Company has notified our Company that he or she has a
present intention to sell Shares to our Company, or has undertaken not to do so, if the
repurchase mandate is exercised.
If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest in the
voting rights of our Company is increased, such increase will be treated as an acquisition for
the purposes 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, the 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.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-8 –


--- page 482 ---
Any repurchase of Shares that results in the number of Shares held by the public being
reduced to less than 25% of the Shares then in issue could only be implemented if the Stock
Exchange agreed to waive the Listing Rules requirements regarding the public shareholding
referred to above. It is believed that a waiver of this provision would not normally be given
other than in exceptional circumstances.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
The following contracts (not being contracts entered into in the ordinary course of
business) were entered into by our Company or its subsidiaries within the two years preceding
the date of this prospectus and are or may be material:
(a) the Hong Kong Underwriting Agreement;
(b) the Deed of Indemnity;
(c) the cornerstone investment agreement dated May 1, 2025 entered into between our
Company, Wuxi Zixian Food Co., Ltd (ʮ̡)( “ Wuxi Zixian ”),
Citigroup Global Markets Asia Limited, Citigroup Global Markets Limited and
CMB International Capital Limited, pursuant to which, Wuxi Zixian has agreed to
subscribe for the number of Offer Shares at the final Offer Price in the amount of
HK dollars equivalent to US$35,000,000;
(d) the cornerstone investment agreement dated May 6, 2025 entered into between our
Company, Anji Liangshan Rural Revitalization Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Anji
Liangshan ”), Citigroup Global Markets Asia Limited, Citigroup Global Markets
Limited and CMB International Capital Limited, pursuant to which, Anji Liangshan
has agreed to subscribe for the number of Offer Shares at the final Offer Price in the
amount of HK dollars equivalent to US$13,000,000;
(e) the cornerstone investment agreement dated May 3, 2025 entered into between our
Company, Action Chain International Limited (“ Action Chain ”), Citigroup Global
Markets Asia Limited, Citigroup Global Markets Limited and CMB International
Capital Limited, pursuant to which Action Chain has agreed to subscribe for the
number of Offer Shares at the final Offer Price in the amount of HK dollars
equivalent to US$13,000,000;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-9 –


--- page 483 ---
(f) the cornerstone investment agreement dated May 1, 2025 entered into between our
Company, Chia Tai Food Investment Company Limited (ʮ̡)
(“Chia Tai ”), Citigroup Global Markets Asia Limited, Citigroup Global Markets
Limited and CMB International Capital Limited, pursuant to which Chia Tai has
agreed to subscribe for the number of Offer Shares at the final Offer Price in the
amount of HK$55,000,000;
(g) the cornerstone investment agreement dated May 2, 2025 entered into between our
Company, Sino Top Trading Limited (ʮ̡)( “ Sino Top ”), Citigroup
Global Markets Asia Limited, Citigroup Global Markets Limited and CMB
International Capital Limited, pursuant to which Sino Top has agreed to subscribe
for the number of Offer Shares at the final Offer Price in the amount of HK dollars
equivalent to RMB45,000,000;
(h) the cornerstone investment agreement dated May 1, 2025 entered into between our
Company, Wuxi Hexiang Food Co., Ltd. (ʮ̡)( “ Wuxi
Hexiang ”), Citigroup Global Markets Asia Limited, Citigroup Global Markets
Limited and CMB International Capital Limited, pursuant to which Wuxi Hexiang
has agreed to subscribe for the number of Offer Shares at the final Offer Price in the
amount of HK dollars equivalent to US$5,000,000;
(i) the cornerstone investment agreement dated May 1, 2025 entered into between our
Company, Wuxi Lvlian Food Co., Ltd. (ʮ̡)( “ Wuxi Lvlian ”),
Citigroup Global Markets Asia Limited, Citigroup Global Markets Limited and
CMB International Capital Limited, pursuant to which Wuxi Lvlian has agreed to
subscribe for the number of Offer Shares at the final Offer Price in the amount of
HK dollars equivalent to US$5,000,000; and
(j) the cornerstone investment agreement dated May 1, 2025 entered into between our
Company, Wuxi Qinyu Food Co., Ltd. (ʮ̡)( “ Wuxi Qinyu ”),
Citigroup Global Markets Asia Limited, Citigroup Global Markets Limited and
CMB International Capital Limited, pursuant to which Wuxi Qinyu has agreed to
subscribe for the number of Offer Shares at the final Offer Price in the amount of
HK dollars equivalent to US$3,000,000.
2. Intellectual Property Rights of the Group
As of the Latest Practicable Date, we have registered or have applied for the registration
of the following intellectual property rights which are material in relation to our business.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-10 –


--- page 484 ---
(a) Trademarks
As of the Latest Practicable Date, we have registered the following trademarks
which are material to our business:
No. Trademark
Type and
class
Registered
owner
Place of
registration
Registration
number
Registration
date Expiry date
1.
 43 Tibet Green
Tea F&B
PRC 30679284 February 7, 2020 February 6, 2030
2.
 43 Tibet Green
Tea F&B
PRC 30988282 January 14, 2020 January 13, 2030
3.
 43 Tibet Green
Tea F&B
PRC 31116813 December 7,
2019
December 6,
2029
4.
 43 Tibet Green
Tea F&B
PRC 30977050 November 28,
2019
November 27,
2029
5.
 43 Tibet Green
Tea F&B
PRC 30977063 November 28,
2019
November 27,
2029
6.
 43 Tibet Green
Tea F&B
PRC 30983003 November 28,
2019
November 27,
2029
7.
 43 Tibet Green
Tea F&B
PRC 30979271 October 7, 2019 October 6, 2029
8.
 43 Tibet Green
Tea F&B
PRC 30982222 September 28,
2019
September 27,
2029
9.
 43 Tibet Green
Tea F&B
PRC 31551193 June 14, 2019 June 13, 2029
10.
 43 Tibet Green
Tea F&B
PRC 31121087 May 21, 2019 May 20, 2029
11.
 43 Tibet Green
Tea F&B
PRC 31563538 April 14, 2019 April 13, 2029
12.
 43 Tibet Green
Tea F&B
PRC 30765386 February 28,
2019
February 27,
2029
13.
 21 Tibet Green
Tea F&B
PRC 21571199 February 7, 2018 February 6, 2028
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-11 –


--- page 485 ---
No. Trademark
Type and
class
Registered
owner
Place of
registration
Registration
number
Registration
date Expiry date
14.
 35 Tibet Green
Tea F&B
PRC 17578433 October 7, 2017 October 6, 2027
15.
 35 Tibet Green
Tea F&B
PRC 16650872 May 7, 2017 May 6, 2027
16.
 43 Tibet Green
Tea F&B
PRC 56773987 December 21,
2021
December 20,
2031
17.
 35 Tibet Green
Tea F&B
PRC 56773987 December 21,
2021
December 20,
2031
18.
 35, 43 Tibet Green
Tea F&B
PRC 62649282 October 7, 2022 October 6, 2032
19.
 30 Tibet Green
Tea F&B
PRC 62630536 June 7, 2023 June 6, 2033
(b) Domain Names
As of the Latest Practicable Date, we do not have any domain names which we
consider to be material or may be material to our business.
(c) Patents
As of the Latest Practicable Date, we do not have any registered patents which we
consider to be material or may be material to our business.
C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Disclosure of Interests
(a) Interests of the Directors and the chief executive officer of our Company
Immediately following the completion of the Global Offering and without taking
into account any Shares which may be issued pursuant to the exercise of the
Over-allotment Option, the interests or short positions of the Directors and chief
executive of our Company in the shares, underlying shares and debentures of our
Company or our associated corporations (within the meaning of Part XV of the SFO)
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 interests or short positions which
they were taken or deemed to have under such provisions of the SFO) or which will be
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-12 –


--- page 486 ---
required, pursuant to Section 352 of the SFO, to be entered in the register referred to in
that section, or which will be required, pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules,
to be notified to our Company and the Stock Exchange, once the Shares are listed, will
be as follows:
(i) Interest in our Company
Name of Director Nature of interest
Immediately following the
completion of the Global
Offering
Number of
Shares held
Approximate
percentage of
shareholding
interest (1)
Mr. Wang (2) Founder of a discretionary
trust
365,600,000 54.29%
Ms. Lu (2) Founder of a discretionary
trust
365,600,000 54.29%
Ms. Y u Liying (3) Beneficial owner 2,083,500 0.31%
Mr. Wang Jiawei (4) Beneficial owner 894,516 0.13%
Notes:
(1) The calculation is based on the total number of Shares in issue immediately following the
completion of the Global Offering (assuming that the Over-allotment Option is not exercised).
(2) Time Sonic is owned as to (i) 99.9% by Absolute Smart V entures, the holding vehicle used by
Vistra Trust, the trustee of Green Tea Family Trust, which is a discretionary trust established by
Mr. Wang and Ms. Lu as the settlors and protectors and Yielding Sky (wholly-owned by Mr.
Wang) and Contemporary Global Investments (wholly-owned by Ms. Lu) as the beneficiaries;
(ii) 0.049% by Yielding Sky, which is wholly owned by Mr. Wang; and (iii) 0.051% by
Contemporary Global Investments, which is wholly owned by Ms. Lu. Accordingly, each of
Yielding Sky, Contemporary Global Investments, Mr. Wang and Ms. Lu is deemed to be interested
in all the Shares held by Time Sonic.
(3) Ms. Y u Liying is interested in 2,083,500 underlying Shares relating to the RSU granted to her
pursuant to the RSU Scheme.
(4) Mr. Wang Jiawei is interested in 894,516 underlying Shares relating to the RSU granted to him
pursuant to the RSU Scheme.
(b) Interests of the Substantial Shareholders
Save as disclosed in “Substantial Shareholders”, immediately following the
completion of the Global Offering and without taking into account any Shares which may
be issued pursuant to the exercise of the Over-allotment Option, our Directors or chief
executive are not aware of any other person (other than a Director or chief executive of
our Company) who will have an interest or short position in the Shares or the underlying
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-13 –


--- page 487 ---
Shares which would fall to be disclosed to our Company and the Stock Exchange 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 nominal value of any class of share capital carrying
rights to vote in all circumstances at general meetings of any other Member of the Group:
(c) Interests in other members of the Group
So far as our Directors are aware, as at the Latest Practicable Date, no other persons
(excluding us) are 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 any other Member of the Group.
2. Directors’ Service Contracts
Each of our executive Directors has entered into a service contract with our Company on
April 30, 2025, and we have issued letters of appointment to each of our independent
non-executive Directors. The service contracts with each of our executive Directors are for an
initial fixed term of three years commencing from April 30, 2025. The letters of appointment
with each of our independent non-executive Directors are for an initial fixed term of three
years. The service contracts and the letters of appointment are subject to termination in
accordance with their respective terms. The service contracts may be renewed in accordance
with our Articles of Association and the applicable Listing Rules.
Save as disclosed above, none of our Directors has entered, or has proposed to enter, a
service contract with any Member of the Group (other than contracts expiring or determinable
by the employer within one year without the payment of compensation (other than statutory
compensation)).
3. Directors’ Remuneration
The aggregate remuneration (including fees, salaries, allowances and other benefits,
discretionary bonuses and retirement scheme contributions) paid to the Directors for the three
years ended December 31, 2022, 2023 and 2024 were approximately RMB1.6 million, RMB3.2
million and RMB4.5 million, respectively.
Our independent non-executive Directors have been appointed for a term of three years.
The Company intends to pay a director’s fee of HK$300,000, per annum to each of the
independent non-executive Directors, respectively. Save for the director’s fees, none of our
independent non-executive Directors is expected to receive any other remuneration for holding
his office as an independent non-executive Director.
Under the arrangements currently in force, the aggregate amount of remuneration,
excluding discretionary bonuses, payable by our Group to our Directors for the year ending
December 31, 2025 is estimated to be approximately RMB5.7 million.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-14 –


--- page 488 ---
There was no arrangement under which a Director has waived or agreed to waive any
emoluments for each of the three financial years immediately preceding the issue of this
prospectus.
Further details of the terms of the above service contracts are set forth in the paragraph
headed “– C. Further Information About Our Directors and Substantial Shareholders – 2.
Director’s Service Contracts”.
4. Directors’ Competing Interests
None of our Directors are interested in any business apart from the Group’s business
which competes or is likely to compete, directly or indirectly, with the business of the Group.
5. Disclaimers
(a) Save as disclosed in the section headed “Substantial Shareholders” and in the
paragraph headed “– 1. Disclosure of Interests – (a) Interests of the Directors and
the Chief Executive of Our Company” above, none of the Directors or chief
executive of our Company has any interests or short positions in the shares,
underlying shares and debentures of our Company or our associated corporations
(within the meaning of Part XV of the SFO) 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 interests or short positions which he is taken or deemed to
have taken 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 in that section,
or which will be required, pursuant to the Model Code for Securities Transactions
by Directors of Listed Issuers, to be notified to our Company and the Stock
Exchange, once the Shares are listed on the Stock Exchange;
(b) save as disclosed in the sections headed “History, Reorganization and Corporate
Structure” and “Substantial Shareholders”, as well as the paragraph headed “– 1.
Disclosure of Interest – (b) Interests of the Substantial Shareholders” above, so far
as is known to any Director or chief executive of our Company, no person has an
interest or short position in the Shares and underlying Shares which would fall to be
disclosed to our Company and the Stock Exchange under the provisions of Divisions
2 and 3 of Part XV of the SFO, or 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 any other Member of the Group;
(c) save in connection with the Underwriting Agreements, none of the Directors nor any
of the persons listed in “– E. Other Information – 5. Qualification of Experts” below
is interested in the promotion of, or in any assets which have been, within the two
years immediately preceding the issue of this prospectus, acquired or disposed of by
or leased to any Member of the Group, or are proposed to be acquired or disposed
of by or leased to any Member of the Group;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-15 –


--- page 489 ---
(d) save in connection with the Underwriting Agreements, none of the Directors nor any
of the persons listed in “– E. Other Information – 5. Qualification of Experts” below
is materially interested in any contract or arrangement with the Group subsisting at
the date of this prospectus which is unusual in its nature or conditions or which is
significant in relation to the business of the Group as a whole;
(e) save in connection with the Underwriting Agreements, none of the persons listed in
“– E. Other Information – 5. Qualification of Experts” below has any shareholding
in any Member of the Group or the right (whether legally enforceable or not) to
subscribe for or to nominate persons to subscribe for securities in any Member of the
Group;
(f) none of the Directors has entered or has proposed to enter into any service
agreements with our Company or any Member of the Group (other than contracts
expiring or determinable by the employer within one year without payment of
compensation other than statutory compensation); and
(g) save as contemplated under the Underwriting Agreements, none of our Directors,
their respective associates (as defined under the Listing Rules), or Shareholders who
are interested in more than 5% of the issued share capital of our Company has any
interest in our Company’s five largest customers and five largest suppliers in each
year during the Track Record Period.
D. SHARE INCENTIVE SCHEME
RSU Scheme
The following is a summary of the principal terms of the RSU Scheme approved and
adopted by our Board on February 28, 2020, which was further amended and approved on
May 20, 2022 and April 30, 2025, respectively. The terms of the RSU Scheme constitutes a
share scheme funded by existing Shares under Chapter 17 of the Listing Rules (including the
amendments thereto which has taken effect on January 1, 2023). Our Company will comply
with Chapter 14A of the Listing Rules and other applicable rules under the Listing Rules.
(a) Purpose of the RSU Scheme
The purpose of the RSU Scheme is to incentivize our Directors, senior management
and employees for their contribution to our Group and to attract and retain skilled and
experienced personnel to enhance the development of our Group.
(b) RSUs
A RSU gives a participant in the RSU Scheme (the “ RSU Participant ”) a
conditional right when the RSU vests to obtain Shares, less any tax, stamp duty and other
charges applicable, as determined by our Board in its absolute discretion. Each RSU
represents one underlying Share.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-16 –


--- page 490 ---
(c) Participants in the RSU Scheme
Persons eligible to receive RSUs under the RSU Scheme are selected by our Board
from existing employees, directors, or officers of the Company or any of its subsidiaries
(collectively, the “ RSU Eligible Persons ”). The basis of eligibility of any selected person
for the grant of RSUs shall be determined by the Board from time to time on the basis of
their contribution to the development and growth of our Group or such other factors as
our Board may deem appropriate.
(d) Terms of the RSU Scheme
The RSU Scheme shall be valid and effective for a period of ten (10) years,
commencing on the date of the first grant of the RSUs (the “ RSU Scheme Period ”).
(e) Making an offer
An offer to grant a RSU will be made to a RSU Eligible Person selected by our
Board (“ RSU Selected Person ”) by a letter, in such form as our Board may determine
(“RSU Grant Letter ”).
The RSU Grant Letter shall specify (i) the RSU Selected Person’s name, (ii) the type
of RSUs granted, (iii) the number of underlying Shares represented by the RSUs or the
percentage of the issued share capital of the Company prior to the completion of IPO
represented by such RSUs, (iv) the vesting criteria, conditions and vesting schedule (if
any), (v) the exercise price of the RSUs and the way to exercise RSUs (where applicable);
(vi) the lapse of RSUs and (vii) such other terms and conditions as our Board shall
determine and are not inconsistent with the RSU Scheme. The RSU Grant Letter shall
serve as evidence of the grant of the RSUs and no further certificate shall be issued to the
RSU Selected Person.
(f) Acceptance of an offer
A RSU Selected Person may accept an offer of the grant of RSUs in such manner
as set out in the RSU Grant Letter. Once accepted, the RSUs are deemed granted from the
date of the RSU Grant Letter (“ RSU Grant Date ”). Upon acceptance, the RSU Selected
Person becomes a RSU Participant in the RSU Scheme.
(g) Restrictions on grants
Our Board may not grant any RSUs to any RSU Selected Persons in any of the
following circumstances:
(i) the securities laws or regulations require that a prospectus or other offering
document be issued in respect of the grant of the RSUs or in respect of the RSU
Scheme, unless our Board determines otherwise;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-17 –


--- page 491 ---
(ii) where granting the RSUs would result in a breach by the Company, its
subsidiaries or any of their directors of any applicable securities laws, rules or
regulations; or
(iii) where such grant of RSUs would result in breach of the limits of the RSU
Scheme (as set out in paragraph (h) below).
(h) Maximum number of RSUs
The maximum number of RSUs that may be granted under the RSU Scheme in
aggregate (excluding RSUs that have lapsed or been canceled in accordance with the rules
of the RSU Scheme) shall not be more than 10% of the Company’s existing share capital
as at the date of listing of the Company.
(i) Rights attached to RSUs and Shares
A RSU Participant may not exercise voting rights in respect of the Shares underlying
the RSUs prior to their exercise. Any Shares transferred to a RSU Participant in respect
of any RSUs will be subject to all the provisions of the Articles and will rank pari passu
with the fully paid Shares in issue on the date of the transfer or, if that date falls on a day
when the register of members of the Company is closed, the first day of the reopening of
the register of members, and accordingly will entitle the holders to participate in all
dividends or other distributions paid or made on or after the date of transfer or, if that date
falls on a day when the register of members of the Company closed, the first day of the
reopening of the register of members.
(j) Assignment of RSUs
Unless otherwise approved by our Board, the RSUs granted pursuant to the RSU
Scheme are personal to each RSU Participant, and are not assignable. RSU Participants
are prohibited from selling, transferring, assigning, charging, mortgaging, hedging or
creating any interest in favor of any other person over or in relation to any property held
by the Trustee on trust for the RSU Participants, the RSUs or any interest or benefits
therein, unless otherwise approved by our Board.
(k) V esting of RSUs
The vesting of the RSUs may be subject to criteria, conditions and the time schedule
when the RSUs will vest and such criteria, conditions and time schedule shall be stated
in the RSU Grant Letter.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-18 –


--- page 492 ---
Within a reasonable time after the vesting criteria, conditions and time schedule
have been reached, fulfilled, satisfied or waived, our Board shall send a vesting notice
(“Vesting Notice ”) to each of the relevant RSU Participants. The V esting Notice will
confirm the extent to which the vesting criteria, conditions and time schedule have been
reached, fulfilled, satisfied or waived. If the vesting conditions are not satisfied and no
waiver of such condition is granted, the RSU shall be cancelled according to conditions
as determined by the Board in its absolute discretion.
(l) Appointment of trustee
Our Company may appoint an independent professional trustee (the “ Trustee ”) to
assist with the administration and vesting of RSUs granted pursuant to the RSU Scheme
and to hold Shares underlying the RSUs as applicable. Our Company may direct and
procure the Trustee to receive existing Shares from any Shareholder of our Company or
purchase existing Shares (either on-market or off-market) to satisfy the RSUs upon
exercise. The Trustee holding unvested Shares of this Scheme, whether directly or
indirectly, shall abstain from voting on matters that require shareholders’ approval under
the Listing Rules, unless otherwise required by law to vote in accordance with the
beneficial owner’s direction and such a direction is given. Our Company shall procure
that sufficient funds are provided to the Trustee by whatever means as our Board may in
its absolute discretion determine to enable the Trustee to satisfy its obligations in
connection with the administration of the RSU Scheme.
(m) Exercise of RSUs
RSUs held by a RSU Participant that are vested as evidenced by the V esting Notice
may be exercised (in whole or in part) by the RSU Participant serving an exercise notice
in writing to the Trustee and copied to our Company. Upon receipt of an exercise notice,
our Board may decide at its absolute discretion to direct and procure the Trustee to, within
a reasonable time, transfer the Shares underlying the RSUs exercised to the RSU
Participant which our Company has allotted and issued to the Trustee as fully paid up
Shares or which the Trustee has either acquired by purchasing existing Shares or by
receiving existing Shares from any Shareholder of our Company, subject to the RSU
Participant paying the exercise price (where applicable) and all tax, stamp duty, levies and
charges applicable to such transfer to the Trustee or as the Trustee directs.
RSU Participants shall be responsible for conducting all necessary filings,
registration or other administrative proceedings as required by applicable PRC laws, rules
or regulations, including but not limited to foreign exchange registration, for their
exercise of RSUs.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-19 –


--- page 493 ---
(n) Rights on a compromise or arrangement or winding-up
If a compromise or arrangement between our Company and our Shareholders or
creditors is proposed in connection with a scheme for the reconstruction or winding-up
of our Company or its amalgamation with any other company or companies and a notice
is given by our Company to our Shareholders to convene a general meeting to consider
and if thought fit approve such compromise or arrangement and such Shareholders’
approval is obtained, a RSU Participant’s RSUs will vest immediately, even if the vesting
period has not yet commenced, unless as otherwise determined by our Board.
(o) Lapse of RSUs
(i) Any unvested RSUs will automatically lapse immediately where:
a. the RSU Participant’s employment or service terminates for any reason;
or
b. the RSU Participant is involved in businesses that are competing with or
similar to our Group during his or her employment period without prior
approval from our Company; or
c. the company that the RSU Participant working for is no longer a
subsidiary of our Group; or
d. the RSU Participant makes any attempt or takes any action to sell,
transfer, assign, charge, mortgage, encumber, hedge or create any interest
in favor of any other person over or in relation to any unvested RSUs or
any interests or benefits pursuant to the RSUs; or
e. the RSU Participant violates relevant rules under his/her respective local
labor laws, or breaches the employment agreement or non-disclosure
agreement with our Group.
(ii) If at any time, a RSU Participant:
a. ceases to be a RSU Eligible Person as a result of termination of his
employment with our Group with Cause, including but not limited to
conditions set forth in (o)(i); then all vested but not exercised RSUs and
unvested RSUs shall automatically lapse and such RSU Participant shall
have no claim whatsoever in respect of the RSUs or the underlying
Shares, unless as otherwise determined by our Board.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-20 –


--- page 494 ---
b. ceases to be a RSU Eligible Person as a result of termination of his
employment with our Group without Cause; then unvested RSUs shall
automatically lapse and such RSU Participant shall have no claim
whatsoever in respect of the RSUs or the underlying Shares, unless as
otherwise determined by our Board. The RSU Participant shall have the
right to retain the vested RSUs.
For the purpose of this paragraph (ii), “Cause” means the RSU Participant is in
breach of his contract of employment.
(p) Cancelation of RSUs
Our Board may at its discretion cancel any RSUs that has not vested or lapsed,
provided that:
(i) our Company or its Subsidiaries pay to the RSU Participant an amount equal
to the fair value of the RSUs at the date of the cancelation as determined by
our Board, after consultation with the auditors or an independent financial
adviser appointed by our Board;
(ii) our Company or its relevant Subsidiary provides to the RSU Participant a
replacement award of equivalent value to the RSUs to be cancelled; or
(iii) our Board makes any arrangement as the RSU Participant may agree in order
to compensate him/her for the cancelation of the RSUs, or
(iv) the vesting conditions are not satisfied and no waiver of such condition is
granted as prescribed in the paragraph (k).
(q) Reorganization of capital structure
In the event of any capitalization issue, rights issue, consolidation, sub-division or
reduction of the share capital of our Company, our Board may, but is not obliged to, make
such equitable adjustments, designed to protect the RSU Participants’ interests, to the
number of Shares underlying the outstanding RSUs or to the amount of the equivalent
value, as it may deem appropriate at its absolute discretion.
(r) Amendment of the RSU Scheme
Save as provided in the RSU Scheme, our Board may alter any of the terms of the
RSU Scheme at any time. Prior written notice of any amendment to the RSU Scheme shall
be given to all RSU Participants before the amendment.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-21 –


--- page 495 ---
Any alterations to the terms and conditions of the RSU Scheme which are of a
material nature or any changes to the terms of the RSUs granted which shall operate to
affect materially adversely any subsisting rights of any RSU Participant shall be subject
to the consent of the RSU Participants amounting to three-fourths in nominal value of all
underlying RSUs or Shares so held by the RSU Participants on the date of the relevant
resolution passed by our Board in approving the amendment of the RSU Scheme or the
terms of the RSUs granted, when written consents by all RSU Participants to such
alternations of the RSU Scheme shall also be procured. Our Board’s determination as to
whether any proposed alteration to the terms and conditions of the RSU Scheme or the
terms of the RSUs granted (as the case may be) is material shall be conclusive.
(s) Termination of the RSU Scheme
Our board may terminate the RSU Scheme at any time before the expiry of the RSU
Scheme Period. The provisions of the RSU Scheme shall remain in full force and effect
in respect of RSUs which are granted (including those unvested and vested but not yet
been exercised) pursuant to the rules of the RSU Scheme prior to the termination of the
operation of the RSU Scheme. Our Company or our relevant subsidiary shall notify the
Trustee and all RSU Participants of such termination and of how any property held by the
Trustee on trust for the RSU Participants (including, but not limited to, any Shares held)
and the outstanding RSUs shall be dealt with.
(t) Administration of the RSU Scheme
Subject to the Listing Rules, our Board has the power to administer the RSU
Scheme, including the power to construe and interpret the rules of the RSU Scheme and
the terms of the RSUs granted under it. Our Board may delegate the authority to
administer the RSU Scheme to a director of our Board. Our Board may also appoint an
independent third party contractors (including the Trustee) or designate any Director to
assist in the administration of the RSU Scheme and delegate such powers and/or functions
relating to the administration of the RSU Scheme as our Board thinks fit.
Our Board owns the final authority to all RSU Scheme related matters and the way
to interpret relevant terms and conditions under the RSU Scheme.
(u) Outstanding RSUs granted
As of the Latest Practicable Date, RSUs in respect of an aggregate of 31,922,924
Shares, representing approximately 4.75% of the total issued share capital of the
Company immediately following the completion of the Global Offering (without taking
into account any Shares which may be issued upon the exercise of the Over-allotment
Option) has been granted to 71 RSU Participants of which two of the RSU Participants
are Directors and one RSU Participant is director of our subsidiaries. The grant and
vesting of any RSUs which may be granted pursuant to the RSU Scheme will be in
compliance with Rule 10.08 of the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-22 –


--- page 496 ---
Details of the RSUs granted to the Directors and director of our subsidiaries are set
out below:
Name Position
Number of Shares
underlying the RSUs
Approximately %
of issued Shares
immediately after
completion of the
Global Offering
Ms. Y u Liying Director 2,083,500 0.31%
Mr. Wang Jiawei Director 894,516 0.13%
Ms. Wang Dandan
director of
subsidiaries 696,352 0.10%
Total 3,674,368 0.54%
Our Company will issue announcements according to applicable Listing Rules,
disclosing particulars of any RSUs granted under the RSU Scheme, including the date of
grant, number of Shares involved, the vesting period, the appointment and arrangement
with the Trustee and comply with Chapter 14A and Chapter 17 of the Listing Rules.
Details of the RSU Scheme, including particulars and movements of the RSUs granted
during each fiscal year of our Company, and our employee costs arising from the grant
of the RSUs will be disclosed in our annual report in accordance with the requirements
under Chapter 17 of the Listing Rules as amended from time to time.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-23 –


--- page 497 ---
(v) Type of RSUs
There are three types of RSUs under the RSU Scheme:
Consideration
For Exercising
RSUs Vesting Period
(RMB)
Type A 0.01 On the grant date
Type B and
Type C (for the
RSUs granted
prior to
December 31,
2020)
0.01  First tranche (as to 25%) on
February 28, 2021
 Second tranche (as to 25%) on
February 28, 2022 or on the date
starting from six months since the
listing date, whichever is later (the
“Second Vesting Date ”)
 Third and fourth tranches (as to
25%) on each anniversary of the
date starting from the Second
V esting Date
Type B and
Type C (for the
RSUs granted
after December
31, 2020)
2.92  First tranche (as to 25%) on
February 28, 2021 or on the date
starting from six months since the
listing date, whichever is later (the
“First Vesting Date ”)
 Second, third and fourth tranches
(as to 25%) on each anniversary of
the date starting from the First
V esting Date
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-24 –


--- page 498 ---
E. OTHER INFORMATION
1. Estate duty, tax and other indemnities
Mr. Wang and Ms. Lu have entered into a deed of indemnity in favor of the Company (for
itself and as trustee for its subsidiaries) (being the contract referred to in the paragraph headed
“– B. Further Information About our Business – 1. Summary of Material Contracts” in this
Appendix) to provide indemnities on a joint and several basis in respect of, among other things,
(i) any tax liabilities (including estate duty under the Estate Duty Ordinance, Chapter
111 of the Laws of Hong Kong SAR) which might be payable by any of the Group’s
subsidiary or branch in respect of any income, profits or gains, transactions, events,
acts, omissions, matters or things earned, accrued or received, entered into (or
deemed to be so earned, accrued, received or entered into) or occurring on or before
the Listing Date, save:
(a) to the extent that specific provision or reserve has been made for such taxation
in the audited consolidated financial statements of the Group as set out in
Appendix I to this prospectus (the “ Accounts ”);
(b) to the extent that the liability for such taxation would not have arisen but for
any act or omission of, or delay by, any Member of the Group after the Listing
Date; and
(c) to the extent such loss arises or is incurred only as a result of a retrospective
change in law or regulations or the interpretation or practice thereof by any
relevant authority coming into force after the Listing Date.
(ii) any losses, liabilities or damages (to the extent that provisions, reserve or allowance
has not been made for such fines, penalties, claims, costs, expenses or losses in the
Accounts) suffered from any fines, penalties, claims, costs, expenses and losses (to
the extent that provision, reserve or allowance has not been made for such fines,
penalties, claims, costs, expenses or losses in the Accounts) incurred by any Member
of the Group after the Listing Date resulting from any non-compliance incidents of
any Member of the Group with applicable laws and regulations on or before the
Listing Date.
The Deed of Indemnity shall become effective on the Listing Date and shall continue in
full force and effect until it is terminated.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-25 –


--- page 499 ---
2. Litigation
As of the Latest Practicable Date, no Member of the Group was engaged in any litigation,
arbitration or claim of material importance, and no litigation, arbitration or claim of material
importance was known to the Directors to be pending or threatened by or against the Group,
that would have a material adverse effect on its business, financial condition or results of
operations.
3. Joint Sponsors
The Joint Sponsors have made an application on behalf of our Company to the Listing
Committee for the listing of, and permission to deal in, the Shares in issue, the Shares to be
issued pursuant to the Global Offering (including the additional Shares which may be issued
pursuant to the exercise of the Over-allotment Option). All necessary arrangements have been
made to enable such Shares to be admitted into CCASS.
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. Please refer to the section headed “Underwriting – Sponsors’
Independence” for details regarding the independence of the Joint Sponsors.
The Joint Sponsors will receive a fee of US$1 million for acting as the sponsors for the
Listing, which are still payable by the Company as of the Latest Practicable Date.
4. No Material Adverse Change
The Directors confirm that there has been no material adverse change in the financial or
trading position or prospects of the Group since December 31, 2024 (being the date to which
the latest audited consolidated financial statements of the Group were prepared).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-26 –


--- page 500 ---
5. Qualification of Experts
The following are the qualifications of the experts (as defined under the Listing Rules and
the Companies (Winding Up and Miscellaneous Provisions) Ordinance) who have given
opinions or advice which are contained in this prospectus:
Name Qualification
Citigroup Global Markets Asia
Limited
A corporation licensed to conduct Type 1
(dealing in securities), Type 2 (dealing in
futures contracts), Type 4 (advising on
securities), Type 5 (advising on futures
contracts), Type 6 (advising on corporate
finance) and Type 7 (providing automated
trading services) of the regulated activities
under the SFO
CMB International Capital Limited A corporation licensed to conduct Type 1
(dealing in securities) and Type 6 (advising on
corporate finance) of the regulated activities
under the SFO
KPMG Certified Public Accountants and Public Interest
Entity Auditor recognised in accordance with
the Accounting and Financial Reporting Council
Ordinance
Commerce & Finance Law Offices Legal adviser to Company as to PRC law and
PRC cybersecurity and data compliance matters
Appleby Legal adviser to Company as to Cayman Islands
law
China Insights Consultancy Limited Industry Consultant
6. Consents of Experts
Each of the Joint Sponsors, KPMG, Commerce & Finance Law Offices, Appleby and
China Insights Consultancy Limited has given and has not withdrawn its consent to the issue
of this prospectus with the inclusion of its report and/or letter and/or legal opinion (as the case
may be) and references to its name included in the form and context in which it respectively
appears.
None of the experts named above has any shareholding interests in our Company or any
of our subsidiaries or the right (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-27 –


--- page 501 ---
7. 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 be paid, allotted or given to any promoters in
connection with the Global Offering and the related transactions described in this prospectus.
8. Preliminary Expenses
The preliminary expenses incurred by our Company were immaterial.
9. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of this
prospectus, of rendering all persons concerned bound by all of the provisions (other than the
penal provisions) of Sections 44A and 44B of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance insofar as applicable.
10. 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
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong SAR).
11. Taxation of Holders of Shares
(a) Hong Kong SAR
The sale, purchase and transfer of Shares registered with our Hong Kong branch
register of members will be subject to stamp duty in Hong Kong SAR. The current rate
charged on each of the purchaser and seller is 0.10% 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. The Revenue (Abolition of Estate Duty) Ordinance 2005 came into effect on February
11, 2006 in Hong Kong SAR. No Hong Kong estate duty is payable and no estate duty
clearance papers are needed for a grant of representation in respect of holders of Shares
whose death occurs on or after February 11, 2006.
(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.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-28 –


--- page 502 ---
(c) Consultation with professional advisers
Potential investors in the Global Offering are urged to consult their professional tax
advisers if they are in any doubt as to the taxation implications of subscribing for,
purchasing, holding or disposing of or dealing in our Shares (or exercising rights attached
to them). None of us, the Joint Sponsors, the Joint Global Coordinators or any other
person or party involved in the Global Offering accept responsibility for any tax effects
on, or liabilities of, any person, resulting from the subscription, purchase, holding or
disposal of, dealing in or the exercise of any rights in relation to our Shares.
12. Miscellaneous
(a) Save as disclosed in the sections headed “History, Reorganization and Corporate
Structure” and “Financial Information”, as well as the section headed “Accountants’
Report” in Appendix I to this prospectus, within the two years immediately
preceding the date of this prospectus:
(i) neither we nor any of our subsidiaries has issued or agreed to issue any share
or loan capital fully or partly paid up either for cash or for a consideration
other than cash;
(ii) no share 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;
(iii) no commissions, discounts, brokerage or other special terms have been granted
in connection with the issue or sale of any shares or loan capital of any Member
of the Group;
(iv) no commission has been paid or payable (except commission to
sub-underwriters) to any persons for subscription, agreeing to subscribe,
procuring subscription or agreeing to procure subscription of any shares of our
Company or any of our subsidiaries;
(v) no founder, management or deferred shares of our Company or any of our
subsidiaries have been issued or agreed to be issued; and
(vi) there is no arrangement under which future dividends are waived or agreed to
be waived.
(b) Save as disclosed in this Appendix, none of the persons named in the paragraph
headed “– E. Other Information – 6. Consent of Experts” in this Appendix is
interested beneficially or otherwise in any shares of any Member of the Group or has
any right or option (whether legally enforceable or not) to subscribe for or nominate
persons to subscribe for any securities in any Member of the Group;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-29 –


--- page 503 ---
(c) The register of members of the Company in Hong Kong SAR branch will be
maintained in Hong Kong SAR by its Hong Kong Share Registrar, Tricor Investor
Services Limited. Unless the Directors otherwise agree, all transfer and other
documents of title of Shares must be lodged for registration with and registered by
the Company’s share register in Hong Kong SAR and may not be lodged in the
Cayman Islands. All necessary arrangements have been made to enable the Shares
to be admitted to CCASS.
(d) Our Directors confirm that:
(i) there has not been any interruption in the business of our Company which may
have or have had a material adverse effect on the financial position of our
Company in the 12 months immediately preceding the date of this prospectus;
and
(ii) our Company has no outstanding convertible debt securities or debentures.
(e) No company within our Group is presently listed on any stock exchange or traded
on any trading system.
(f) The English version of this prospectus shall prevail over the Chinese version.
13. Particulars of the Selling Shareholder
The particulars of the Selling Shareholder are set out below:
Name: Partners Group Gourmet House Limited
Description: Investment Holding Company
Registered Office: Intertrust Corporate Services (Cayman) Limited,
One Nexus Way, Camana Bay, Grand Cayman,
KY1-9005, Cayman Islands
Number of Shares to be sold: 50,509,200 Sale Shares (together with, where
relevant, up to an addition 15,152,400 Shares
which may be sold pursuant to exercise of the
Over-allotment Option)
APPENDIX IV STATUTORY AND GENERAL INFORMATION
– IV-30 –


--- page 504 ---
1. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong SAR for registration were:
(a) a copy of each of the material contracts referred to in the section headed “Statutory
and General Information – B. Further Information About Our Business – 1.
Summary of Material Contracts” in Appendix IV to this prospectus;
(b) the written consents referred to in the section headed “Statutory and General
Information – E. Other Information – 6. Consents of Experts” in Appendix IV to this
prospectus; and
(c) a copy of the statement of particulars of the Selling Shareholder.
2. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the websites of the Hong Kong
Stock Exchange at www.hkexnews.hk and our Company at www.china-greentea.com.cn for
14 days from the date of this prospectus (both dates inclusive):
(a) the Memorandum and Articles of Association of our Company;
(b) the audited consolidated financial statements of the Group for the years ended
December 31, 2022, 2023 and 2024;
(c) the Accountants’ Report and the report on the unaudited pro forma financial
information received from KPMG, the text of which are set out in Appendices I and
II to this prospectus, respectively;
(d) the legal opinions issued by Commerce & Finance Law Offices, our PRC Legal
Adviser, in respect of certain aspects of the Group and the property interests of the
Group;
(e) the legal opinions issued by Commerce & Finance Law Offices, our PRC legal
Adviser for PRC cybersecurity and data compliance matters, in respect of certain
cybersecurity and data compliance matters in the PRC of our Group;
(f) the letter of advice prepared by Appleby, our legal adviser as to the Cayman Islands
laws, summarizing certain aspects of the Cayman Islands company law referred to
in Appendix III to this prospectus;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– V-1 –


--- page 505 ---
(g) the material contracts referred to in the section headed “Statutory and General
Information – B. Further Information About Our Business – 1. Summary of Material
Contracts” in Appendix IV to this prospectus;
(h) the written consents referred to in the section headed “Statutory and General
Information – E. Other Information – 6. Consents of Experts” in Appendix IV to this
prospectus;
(i) service contracts and letters of appointment referred to in the section headed
“Statutory and General Information – C. Further Information about Our Directors
and Substantial Shareholders – 2. Directors’ Service Contracts” in Appendix IV to
this prospectus;
(j) the rules of the RSU Scheme;
(k) the Companies Act;
(l) the Industry Report; and
(m) a copy of the statement of particulars (including name, registered address, and
description) of the Selling Shareholder.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– V-2 –


--- page 506 ---
(Incorporated in the Cayman Islands with limited liability)
Stock Code: 6831
GLOBAL OFFERING
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
綠茶集團有限公司
Green Tea Group Limited
綠茶集團有限公司
Green Tea Group Limited
綠茶集團有限公司
Green Tea Group Limited
