--- page 1 ---
Stock Code : 6883
(Incorporated in the Cayman Islands with limited liability)
穎通控股有限公司
Eternal Beauty Holdings Limited
GLOBAL
OFFERING
Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)


--- page 2 ---
If you are in any doubt about any of the contents of this prospectus, you should seek independent professional advice.
Eternal Beauty Holdings Limited
ʮ̡
(Incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
Total Number of Offer Shares under the
Global Offering
: 333,400,000 Shares (subject to the
Over-allotment Option)
Number of Hong Kong Offer Shares : 33,340,000 Shares (subject to reallocation)
Number of International Offer Shares : 300,060,000 Shares (subject to reallocation
and the Over-allotment Option)
Maximum Offer Price : HK$3.38 per Offer Share, plus brokerage of
1%, 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 : HK$0.001 per Share
Stock Code : 6883
Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Bookrunners and Joint Lead Managers
(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 any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies and Available on Dis play” in Appendix V to this prospectus, has been registered by
the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 o f the Laws of Hong Kong). The Securities and Futures
Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility for the contents of this prospectus or any other documents re ferred to above.
The Offer Price is expected to be fixed by agreement by the Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) and our Com pany (for ourselves and on behalf of the Selling Shareholder)
on the Price Determination Date. The Price Determination Date is expected to be on or about Tuesday, June 24, 2025 (Hong Kong time) and, in any event, not later than 12:00 noon on, Tuesday, June 24, 2025 (Hong
Kong time) (unless otherwise determined among the Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company ( for ourselves and on behalf of the Selling Shareholder)). The
Offer Price will be not more than HK$3.38 per Offer Share and is currently expected to be not less than HK$2.80 per Offer Share, unless otherwise announc ed. If, for any reason, the Offer Price is not agreed by 12:00
noon on, Tuesday, June 24, 2025 (Hong Kong time) between the Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) and our C ompany (for ourselves and on behalf of the Selling Shareholder),
the Global Offering will not become unconditional and will lapse immediately. Applicants for Hong Kong Offer Share may be required to pay, on applicat ion (subject to application channels), the maximum Offer Price
of HK$3.38 for each Hong Kong Offer Share together with a brokerage fee of 1.0%, a SFC transaction levy of 0.0027%, a Stock Exchange trading fee of 0.0056 5% and an AFRC transaction levy of 0.00015%, subject
to refund if the Offer Price as finally determined is less than HK$3.38.
The Sponsor-Overall Coordinators, on behalf of the Underwriters, and with the consent of our Company and the Selling Shareholder may, where consider ed appropriate, reduce the number of Hong Kong
Offer Shares and/or the indicative Offer Price range below that is stated in this prospectus (which is HK$2.80 to HK$3.38) at any time prior to the morni ng of the last day for lodging applications under the
Hong Kong Public Offering. In such a case, notices of the reduction in the number of Hong Kong Offer Shares and/or the indicative Offer Price range will b e published as soon as practicable following the
decision to make such reduction, and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong P ublic Offering. Such notices will also be available
on the website of our Company at www.eternal.hk and on the website of the Stock Exchange at www.hkexnews.hk. Further details are set forth in “Structur e of the Global Offering” and “How to Apply for
Hong Kong Offer Shares” in this prospectus.
Prior to making an investment decision, prospective investors should carefully consider all of the information set out in this prospectus, in partic ular, the risk factors set out in the section headed “Risk Factors”.
Pursuant to the termination provisions contained in the Hong Kong Underwriting Agreement in respect of the Hong Kong Offer Shares, the Joint Sponsors and the Sponsor-Overall Coordinators, acting for themselves
and on behalf of the Hong Kong Underwriters, have the right in certain circumstances, in its absolute discretion, to terminate the obligation of the Ho ng Kong Underwriters pursuant to the Hong Kong Underwriting
Agreement at any time prior to 8:00 a.m. on the Listing Date. Further details of the terms of the termination provisions are set out in the section headed “Underwriting — Underwriting Arrangements and Expenses —
Hong Kong Public Offering — Grounds for Termination” in this prospectus. It is important 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 laws of the United States and may not be off ered or sold in the United States, or to or for the account or
benefit of any U.S. person (as defined in Regulation S), except pursuant to an exemption from, or in a transaction that is not subject to, the registrati on requirements of the U.S. Securities Act. The Offer Shares may
be offered, sold or delivered outside the United States to non-U.S. persons 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 in rela tion 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.eternal.hk. If you require a prin ted copy of this prospectus, you may download
and print from the website addresses above.
IMPORTANT
June 18, 2025


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS
FULLY ELECTRONIC APPLICATION PROCESS
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 public in relation to the
Hong Kong Public Offering.
This Prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under “HKEXnews > New Listings > New Listing Information” and our website at
www.eternal.hk . If you require a printed copy of this Prospectus, you may download and print
from the website addresses above.
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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
www.hkeipo.hk Applicants 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
Wednesday, June 18,
2025 to 11:30 a.m. on
Monday, June 23, 2025
(Hong Kong time).
The latest time for
completing full
payment of application
monies will be 12:00
noon on Monday, June
23, 2025 (Hong Kong
time).
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118
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
instructions.
Applicants 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.
We will not provide any physical channels to accept any application for the Hong Kong
Offer Shares by the public. The contents of this Prospectus are identical to the Prospectus as
registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this Prospectus is available online at the website addresses above.
IMPORTANT
–i i–


--- page 4 ---
Please refer to “How to Apply for Hong Kong Offer Shares” for further details on the
procedures through which you can apply for the Hong Kong Offer Shares electronically.
Y our application through the HK eIPO White Form service or the HKSCC EIPO
channel must be for a minimum of 1,000 Hong Kong Offer Shares and in one of the numbers
set out in the table below.
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 Hong Kong Offer Shares you have selected.
Y ou must pay the respective maximum 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 pre-fund your
application based on the amount specified by your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
1,000 3,414.09 20,000 68,281.75 100,000 341,408.74 3,000,000 10,242,261.90
2,000 6,828.17 25,000 85,352.18 200,000 682,817.45 4,000,000 13,656,349.20
3,000 10,242.26 30,000 102,422.62 300,000 1,024,226.19 5,000,000 17,070,436.50
4,000 13,656.35 35,000 119,493.05 400,000 1,365,634.92 6,000,000 20,484,523.80
5,000 17,070.44 40,000 136,563.49 500,000 1,707,043.66 7,000,000 23,898,611.10
6,000 20,484.53 45,000 153,633.93 600,000 2,048,452.38 8,000,000 27,312,698.40
7,000 23,898.62 50,000 170,704.36 700,000 2,389,861.11 9,000,000 30,726,785.70
8,000 27,312.70 60,000 204,845.24 800,000 2,731,269.85 10,000,000 34,140,873.00
9,000 30,726.79 70,000 238,986.11 900,000 3,072,678.56 12,000,000 40,969,047.60
10,000 34,140.87 80,000 273,126.99 1,000,000 3,414,087.30 14,000,000 47,797,222.20
15,000 51,211.31 90,000 307,267.86 2,000,000 6,828,174.60 16,670,000
(1) 56,912,835.29
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 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 the Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
– iii –


--- page 5 ---
Should there be any changes to the dates mentioned in the following expected
timetable of the Hong Kong Public Offering, an announcement will be made and
published on the website of the Stock Exchange at www.hkexnews.hk and our website at
www.eternal.hk of the revised timetable.
Hong Kong Public Offering commences ..................... 9 : 0 0a . m .o nW e dnesday,
June 18, 2025
Latest time for completing electronic applications under the
HK eIPO White Form service through the designated
website at www.hkeipo.hk (2) ............................. 1 1 : 3 0a . m .o n Monday,
June 23, 2025
Application lists of the Hong Kong Public Offering open (3) ........ 11:45 a.m. on Monday,
June 23, 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 ................................. 1 2 : 0 0 noon on Monday,
June 23, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to give
electronic application instructions via FINI in accordance with your instruction to apply for
Hong Kong Offer Shares on your behalf, you are advised to contact your broker or custodian
for the latest time for giving such instructions, which may be different from the latest time as
stated above.
Application lists of the Hong Kong Public Offering close
(3) .............. 1 2 : 0 0 noon on
Monday, June 23, 2025
Expected Price Determination Date (4) ........................ T u e s d a y , June 24, 2025
Announcement of the final Offer Price, the level of applications
in the Hong Kong Public Offering, the level of indications of
interest in the International Offering and the basis of
allocation of the Hong Kong Offer Shares to be published on
the website of the Stock Exchange at www.hkexnews.hk and
our website at www.eternal.hk by(5) .................... 1 1 : 0 0p . m .o nW ednesday,
June 25, 2025
EXPECTED TIMETABLE (1)
–i v–


--- page 6 ---
Results of allocation in the Hong Kong Public Offering to be available through a variety
of channels as described in “How to Apply for Hong Kong Offer Shares — B. Publication of
Results,” including through:
(1) in the announcement to be posted on our website and the
website of the Stock Exchange at www.eternal.hk
and www.hkexnews.hk , respectively ........................ 1 1 : 0 0p . m .o n
Wednesday, June 25, 2025
(2) from the “Allotment Results” page at the designated results
of allocation website at www.tricor.com.hk/ipo/result
or www.hkeipo.hk/IPOResult with a “search by ID”
function on a 24-hour basis from ..........................1 1 : 0 0p . m .o n
Wednesday, June 25, 2025 to
12:00 midnight on
Tuesday, July 1, 2025
(3) the allocation results telephone enquiry line by calling
+852 3691 8488 between 9:00 a.m. and 6:00 p.m. from ............ Thursday,
June 26, 2025
to Wednesday, July 2, 2025
(Hong Kong time) on a business day.
Share certificates in respect of wholly or partially successful
applications to be dispatched or deposited into CCASS
on or before
(6)(8) .................................... W ednesday, June 25, 2025
e-Auto Refund payment instructions or refund checks in respect of
wholly or partially unsuccessful applications (or wholly
successful applications, if applicable) to be dispatched
on or before
(7)(8) ..................................... Thursday, June 26, 2025
Dealings in the Shares on the Stock Exchange to commence at ............ 9 : 0 0a . m .o n
Thursday, June 26, 2025
EXPECTED TIMETABLE (1)
–v–


--- page 7 ---
Notes:
(1) All dates and times refer to Hong Kong local dates and times.
(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 an application reference number from the designated website
prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning signal and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Monday, June
23, 2025, the application lists will not open or close on that day. See “How to Apply for Hong Kong Offer
Shares — E. Severe Weather Arrangements.”
(4) The Offer Price is expected to be determined on or about Tuesday, June 24, 2025 and in any event not later
than 12:00 noon on Tuesday, June 24, 2025. If, for any reason, the Offer Price is not agreed between the
Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company (for
ourselves and on behalf of the Selling Shareholder) by 12:00 noon on Tuesday, June 24, 2025, the Global
Offering will not proceed and will lapse.
(5) None of the websites or any of the information contained on the websites forms part of this Prospectus.
(6) The Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that
the Global Offering has become unconditional in all respects and the right of termination described in
“Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for
Termination” has not been exercised. Investors who trade Shares prior to the receipt of Share certificates or
prior to the Share certificates becoming valid evidence of title do so entirely at their own risk.
(7) e-Auto Refund payment instructions or refund checks will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and in respect of wholly successful
applications in the event that the Offer Price is less than the price payable per Offer Share on application. Part
of the applicant’s identification document number, or, if the application is made by joint applicants, part of the
identification document number of the first-named applicant, provided by the applicant(s) may be printed on
the refund check, if any. Such data would also be transferred to a third party for refund purposes. Banks may
require verification of an applicant’s identification document number before encashment of the refund check.
Inaccurate completion of an applicant’s identification document number may invalidate or delay encashment
of the refund check.
(8) Applicants being individuals who are eligible for personal collection may not authorize any other person to
collect on their behalf. If you are a corporate applicant which is eligible for personal collection, your
authorized representative must bear a letter of authorization from your corporation stamped with your
corporation’s chop. Both individuals and authorized representatives must produce evidence of identity
acceptable to our Hong Kong Share Registrar at the time of collection.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to
the section headed “How to Apply for Hong Kong Offer Shares — D. Dispatch/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 checks in favor of the
applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at their own risk.
Any uncollected Share certificates will be dispatched by ordinary post, at the applicants’ risk, to the addresses
specified in the relevant applications.
Further information is set out in the sections headed “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of Share Certificates and Refund of Application Monies” in this prospectus for details”.
EXPECTED TIMETABLE (1)
–v i–


--- page 8 ---
The above expected timetable is a summary only. For details of the structure of the Global
Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, see “Structure of the Global Offering” and “How to Apply for 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, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
–v i i–


--- page 9 ---
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 the distribution of this prospectus in any jurisdiction other than Hong Kong. The
distribution of this prospectus for purposes of a public offering and the offering and sale
of the Hong Kong 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, the Sponsor-Overall Coordinators, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Capital Market Intermediaries, and any of the Underwriters, any of
our or their respective directors, agents, employees or advisers or any other party
involved in the Global Offering.
EXPECTED TIMETABLE ........................................... i v
CONTENTS ...................................................... v i i i
SUMMARY ....................................................... 1
DEFINITIONS .................................................... 2 7
GLOSSARY OF TECHNICAL TERMS ................................. 4 4
FORW ARD-LOOKING STATEMENTS ................................. 4 7
RISK FACTORS ................................................... 4 9
INFORMATION ABOUT THIS PROSPECTUS AND
THE GLOBAL OFFERING ........................................ 8 9
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING ..... 9 4
CONTENTS
– viii –


--- page 10 ---
CORPORATE INFORMATION ....................................... 9 9
INDUSTRY OVERVIEW ............................................. 1 0 1
REGULATORY OVERVIEW ......................................... 1 2 4
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE ............. 1 5 6
BUSINESS ........................................................ 1 7 0
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS ........... 2 9 5
CONTINUING CONNECTED TRANSACTIONS .......................... 3 0 5
DIRECTORS AND SENIOR MANAGEMENT ............................ 3 0 6
SUBSTANTIAL SHAREHOLDERS ..................................... 3 1 9
SHARE CAPITAL .................................................. 3 2 0
FINANCIAL INFORMATION ......................................... 3 2 4
FUTURE PLANS AND USE OF PROCEEDS ............................. 3 9 2
UNDERWRITING .................................................. 4 0 4
STRUCTURE OF THE GLOBAL OFFERING ............................ 4 2 0
HOW TO APPLY FOR HONG KONG OFFER SHARES ................... 4 3 2
APPENDIX I — ACCOUNTANT’S REPORT ....................... I - 1
APPENDIX II — UNAUDITED PRO FORMA FINANCIAL
INFORMATION ............................... II-1
APPENDIX III — SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W ......... III-1
APPENDIX IV — STATUTORY AND GENERAL INFORMATION ....... I V - 1
APPENDIX V — DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY ...... V - 1
CONTENTS
–i x–


--- page 11 ---
This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. Y ou should read the whole prospectus before you decide to invest in
the Offer Shares. There are risks associated with any investment. Some of the
particular risks in investing in the Offer Shares are set out in the section headed “Risk
Factors” in this prospectus. Y ou should read that section carefully before you decide to
invest in the Offer Shares.
OVERVIEW
We are the largest perfume group in China (including Hong Kong and Macau) apart from
brand-owner perfume groups in terms of retail sales in 2023. Unlike brand-owner perfume
groups, which mainly operate the brands owned by them and take lead in the involvement of
(i) brand positioning and formulation of marketing strategy, (ii) research and development, (iii)
manufacturing, and (iv) authorization for the utilization of their brand rights, we primarily
engage in (i) sales and distribution of products procured from third party brand licensors, from
which we generate our revenue, and (ii) market deployment for these brand licensors, such as
brand management, and designing and implementing customized market entry and expansion
plans for their brands, from which we generate no revenue. We have a large and diverse
portfolio of iconic brands of not only perfumes, but also color cosmetics, skincare products,
personal care products, eyewear and home fragrances. We achieved a leading position for
perfumes in China (including Hong Kong and Macau) as a result of our long operating history,
through which we gained extensive knowledge in the perfume industry in these markets, and
accumulated pertinent expertise and abundant resources for the distribution and market
deployment of numerous international perfume brands.
We offer a comprehensive sales and distribution network covering a large number of
access points for perfumes, skincare products, color cosmetics, personal care products,
eyewear and home fragrances in China (including Hong Kong and Macau). As of March 31,
2025, our products were sold at more than 100 offline POSs operated directly by ourselves and
more than 8,000 POSs operated by our retailer customers in over 400 cities in China (including
Hong Kong and Macau). As of the same date, we also sold products to offline distributors,
which may resell these products to other offline retailers. In addition to offline sales channels,
we also sell products online via well-known e-commerce platforms and social media platforms
in China (including Hong Kong and Macau). Such large and omni-channel sales and
distribution network helps us maintain a growing consumer base in the evolving market
environment, maximizes the value of our consumers by allowing them to enjoy seamless and
convenient shopping experience, and enables us to address the demands from a large and
diverse group of consumers with varying ages, spending powers and product preferences. Our
well-balanced omni-channel sales and distribution network also enables us to adjust our sales
approaches flexibly in response to the changes that may affect our business and industries.
SUMMARY
–1–


--- page 12 ---
Our reputation among the world’s leading brands enabled us to be a business partner for
a number of brand licensors who are looking to enter into or expand their brands’ presence in
China (including Hong Kong and Macau). Such long-term business relationships enabled us to
curate iconic brands and attractive products in our portfolio. As of the Latest Practicable Date,
we conduct product distribution and market deployment for a total of 72 external brands,
including Hermès, V an Cleef & Arpels, Chopard, Albion and Laura Mercier which cover
diverse and versatile pricing tiers and features catering to differentiated demands of the
consumers in mainland China, Hong Kong and/or Macau. For details, please see the section
headed “Business — Brands and Products” in this prospectus. As of the Latest Practicable
Date, we obtained exclusive licenses or sub-licenses for 61 out of 72 external brands with
respect to certain products and certain channels from the brand licensors in mainland China,
Hong Kong and/or Macau. Through these licenses and sub-licenses, the brand licensors also
granted us the right to use their intellectual property, including trademarks and logos, within
a specified scope. We believe these exclusive licenses and sub-licenses showcased the trust the
brand licensors have in us, and solidified our competitive advantage over our competitors.
During the Track Record Period, we have maintained growth of our business and results
of operations. Our revenue increased from RMB1,699.1 million for the year ended March 31,
2023 to RMB1,863.8 million for the year ended March 31, 2024, and further to RMB2,083.4
million for the year ended March 31, 2025. Similarly, our net profit grew from RMB173.1
million for the year ended March 31, 2023 to RMB206.5 million for the year ended March 31,
2024, and further to RMB227.0 million for the year ended March 31, 2025. Our brand portfolio
consisted of 52, 65 and 73 external brands as of March 31, 2023, 2024 and 2025, respectively,
for which our licenses or sub-licenses remained effective as of the respective dates.
OUR BUSINESS MODEL
Our business primarily comprises two key components that enable global brands to gain
a foothold and continue to expand their presence and penetration in China (including Hong
Kong and Macau), namely, (i) distribution of their branded products in China (including Hong
Kong and Macau), in which we distribute the products to a wide range of consumers through
our omni-channel sales and distribution network; and (ii) market deployment, through which
we design and implement customized market entry and expansion plans for brands.
SUMMARY
–2–


--- page 13 ---
The following diagram illustrates the business model of our primary business during the
Track Record Period:
Supply
Chain
Management
Omni-channel
Sales and
Distribution
Consumer
Relationship
Management
Market and
Consumer
Analysis
Business
Development
and Expansion
Plans
Brand Building and Enhancement
Product Distribution
Strategic Selection of Brands and
Products
Market Deployment(1)
Note:
(1) We do not generate any revenue from the services associated with market deployment, including market and
consumer analysis and business development and expansion plans. They are complementary to our business
relationships with the brand licensors, and primarily serve the purpose of strengthening our relationship with
brand licensors and enhancing their brand value. The expenses we incurred in connection with the
complementary services associated with market deployment were primarily recorded as our selling and
distribution expenses in our consolidated financial statements during the Track Record Period. We currently
do not plan to charge any fees for market deployment services in the future. As advised by the Frost & Sullivan,
the complementary provision of market deployment services is generally in line with the industry norm.
Specifically, we conduct our business in the following key steps:
 Strategic selection of brands and products — We discover reputable international
brands with high potential that are in line with our growth and development
strategies. We primarily act as the exclusive distributor of our brand licensors in
mainland China, Hong Kong and/or Macau, in which we obtain (i) exclusive license
from the brand owners to operate their brands for certain products and certain
channels; or (ii) exclusive sub-license from the primary licensees of the brand
owners to operate the brands involving certain specified products that they are
licensed to produce and distribute. Our license from the brand owners or sub-license
from the primary licensees generally specify the territories, products and/or sales
channels in which our exclusive distribution may occur. For details of our business
relationship with brand licensors, please refer to the section headed “Business —
Suppliers — Brand Licensors” in this prospectus.
 Brand building and enhancement — We conduct market deployment and product
distribution. With respect to market deployment, we primarily carry out market and
consumer analysis and the formulation and implementation of business development
and expansion plans. With respect to product distribution, we conduct supply chain
management, omni-channel sales and distribution covering both online and offline
scenarios, and consumer relationship management. Please refer to the section
headed “Business — Our Business Model — Brand Building and Enhancement” in
this prospectus for details.
SUMMARY
–3–


--- page 14 ---
We implement marketing and distribution plans through our integrated online and offline
operations, which leverages our existing omni-channel resources to continuously transform our
marketing efforts into sales and distribution opportunities. Under our integrated online and
offline operations, potential consumers are often prompted by the content shared by celebrities,
KOLs and other users on the social media platforms, such as Douyin, Wechat and RED, to
experience the products we sell at offline POSs. These offline olfactory experiences and
exposure to our products at the offline POSs may facilitate and stimulate consumers to make
purchases at offline POSs or online stores operated by us, our distributors or our retailers. If
the consumers who made purchases share their product reviews online, they may prompt other
potential consumers to experience and purchase the products as well.
BRANDS AND PRODUCTS
External Brands
Substantially all of our revenue was generated from the sales of external brands of
perfumes, skincare products, color cosmetics, personal care products, eyewear and home
fragrances during the Track Record Period. The products we sell are primarily procured from
the brand licensors that are mainly based in Europe, Japan and the United States. As of the
Latest Practicable Date, our external brand portfolio consisted of 72 brands. As of March 31,
2023, 2024 and 2025, the number of external brands in our brand portfolio was 52, 65 and 73,
respectively, for which our licenses or sub-licenses remained effective as of the respective
dates. For the years ended March 31, 2023, 2024 and 2025, the number of external brands
under which we had transactions was 47, 57 and 65, respectively. Certain of the brands in our
brand portfolio offered more than one category of products during the Track Record Period.
The table below sets forth a breakdown of our revenue by product category for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Perfumes (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,504,184 88.5 1,523,737 81.7 1,687,703 80.9
Skincare products /H1118/H1118/H1118/H1118/H1118/H1118/H111887,136 5.1 114,355 6.1 151,856 7.3
Color cosmetics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,932 4.0 193,008 10.4 226,209 10.9
Eyewear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,679 0.5 21,458 1.2 11,982 0.6
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 1.9 11,203 0.6 5,613 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 100.0 1,863,761 100.0 2,083,363 100.0
SUMMARY
–4–


--- page 15 ---
Notes:
(1) The revenue generated from our sales of personal care products and home fragrances was recorded under
“perfumes” during the Track Record Period, because some of the perfume brands for which we conduct
product distribution and market deployment also offered personal care products and/or home fragrances,
and the amount of revenue generated from our sales of these products was insignificant during the Track
Record Period. For each of the years ended March 31, 2023, 2024 and 2025, the aggregate revenue
generated from our sales of personal care products and home fragrances accounted for no more than
2.0% of our total revenue.
(2) During the Track Record Period, we operated and managed the daily operation of the online and offline
stores of certain of our customers under their brand names, and charged a service fee in connection
therewith. Others mainly include the service income derived from the charges arising from such agency
services.
The table below sets forth the changes in the number of brand licensors for the periods
indicated:
As of/For the Y ear Ended March 31,
2023 2024 2025
Number at the beginning of the period /H1118 28 32 40
Increase (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861 1 9
Decrease (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) (3) (3)
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 40 46
Notes:
(1) The increase of brand licensors mainly represented the number of brand licensors with which we newly
entered into agreements or other forms of authorizations.
(2) The decrease of brand licensors mainly represented the number of brand licensors with which the
relevant agreements or other forms of authorizations had expired and were not renewed.
In particular, in December 2022, the distribution agreement with a major brand licensor
of a major luxury brand expired and was not renewed, which contributed RMB424.7 million,
or approximately 25.5% to our total revenue for the year ended March 31, 2023, primarily
because this brand licensor decided to operate the brand in mainland China by itself.
SUMMARY
–5–


--- page 16 ---
Expiry Schedule of Our Licenses and Sub-licenses for the Brands in Our Portfolio for the
Y ear Ended March 31, 2025
The table below sets forth the expiry schedule of our licenses and sub-licenses from
March 31, 2025 onwards for the external brands in our portfolio with which we had
transactions for the year ended March 31, 2025:
Number of
External Brands (1)
Within one year (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822
One to three years (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819
Three to five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813
More than five years (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861
Notes:
(1) The total number of external brands in our portfolio with which we had transactions for the year ended
March 31, 2025 was 65. However, among these brands, as of March 31, 2025, we no longer held licenses
or sub-licenses for four external brands, and did not expect to resume cooperation with the relevant
brand licensors with respect to such brands. The expiry dates of the licenses and sub-licenses are based
on (a) the expiry dates of the agreements with the brand licensors; or (b) in the event that there were
only effective authorization letters for such licenses or sub-licenses, the expiry dates of such
authorizations.
(2) Among these brands, as of March 31, 2025, (i) the agreements and authorization letters for two brands
expired, and we were in the process of negotiating with the relevant brand licensors for entering into
new agreements or obtaining new authorization letters; and (ii) our agreement with the relevant brand
licensors for three brands shall be tacitly renewed from year to year, unless one of the parties delivers
a prior written termination notice to the other party before the end of the contractual year. The current
contractual year for these three brands shall expire within one year.
(3) On May 22, 2025, a sale and purchase agreement was entered into between, among others, Eternal BVI
and the holding company of the brand licensor of one of the brands with which we had transactions for
the year ended March 31, 2025, pursuant to which Eternal BVI agreed to dispose of, and the said holding
company agreed to acquire, 100% issued share capital of E&C Holdings, which was our subsidiary that
held the distribution license for such brand before the disposal (the “Disposal”). Upon completion of the
Disposal on May 30, 2025, we no longer held such license for this brand or otherwise be entitled to
distribute its products in China (including Hong Kong and Macau). However, upon completion of the
Disposal, our Group is expected to provide operational services to E&C Holdings and its subsidiary in
connection with their distribution of the products of the brand licensor, and charge E&C Holdings and
its subsidiary for such services pursuant to separate services agreements entered into between us, on the
one hand, and each of E&C Holdings and its subsidiary, on the other hand. For details of the Disposal,
please refer to “History, Development and Corporate Structure — Major Acquisitions, Disposals and
Mergers — Disposal of E&C Holdings and its Subsidiaries” in this prospectus. The license for this
brand, which was still effective as of March 31, 2025, would have expired in December 2026 if not for
the occurrence of the Disposal.
(4) Including the brands for which the terms of agreements or authorization letters had no termination date.
SUMMARY
–6–


--- page 17 ---
We are one of the leaders in mainland China’s perfume industry. We maintain a diverse
portfolio of perfume products from a number of well-known global brands. The perfumes that
we offer cover a wide variety of price levels, including entry-prestige perfumes (prices at or
less than RMB599 per 50ml), prestige perfumes (prices ranging from RMB600 to RMB1,199
per 50 ml) and luxury perfumes (prices at or above RMB1,200 per 50 ml). To make the perfume
products we sell attractive and accessible to consumers with different tastes and preferences in
scents, we also offer perfumes containing all spectrums of scent profile, including floral notes,
oriental notes, woody notes and fresh notes. As of the Latest Practicable Date, we offered
perfumes sourced from 52 external brands.
We started to conduct product distribution and market deployment for skincare brands in
mainland China since 1987. We have been managing Albion, a high-end Japanese skincare
brand in Hong Kong since 2014, and Dr. Babor, a high-end skincare brand headquartered in
Germany, through a joint venture for the distribution of its skincare products in designated
channels in mainland China. As of the Latest Practicable Date, we primarily offered cleansers,
moisturizers, essence, cream, face masks, lotion and eye cream sourced from 16 external
brands.
We also conduct product distribution and market deployment for selected color cosmetics
brands with promising growth potential. The color cosmetics brands that we have the license
to distribute their products in China (including Hong Kong and Macau) include Laura Mercier.
As of the Latest Practicable Date, we primarily offered foundation, lip sticks, blushes and eye
shadow sourced from six external brands.
In addition, a number of brands for which we conduct product distribution and market
deployment offer both perfumes and personal care products. To expand our sales in personal
care products, in January 2024, we started to conduct product distribution and market
deployment for Acca Kappa, a world-class Italian personal care brand featuring traditional
Italian hand-made techniques, in mainland China. As of the Latest Practicable Date, we
primarily offered body and hair products, toothpaste, combs and toothbrushes sourced from 10
external brands.
We started to conduct product distribution and market deployment for eyewear since
1987. As of the Latest Practicable Date, we primarily offered spectacles and sunglasses sourced
from eight external brands.
Drawing upon our success and experience in managing perfume brands, we successfully
expanded into home fragrances market. In 2023, we introduced a world-renowned home
fragrances brand, Dr. Vranjes Firenze, into mainland China by opening its first Chinese
flagship store in Shanghai, which was our self-operated offline store. As of the Latest
Practicable Date, we primarily offered scented candles, diffuser and home fragrance pendant
sourced from 22 external brands.
SUMMARY
–7–


--- page 18 ---
For details of the brands and products we offer, including perfumes, skincare products,
color cosmetics, personal care products, eyewear and home fragrances, please refer to the
section headed “Business — Brands and Products — Product Portfolio of External Brands” in
this prospectus.
Self-owned Brand and Products
In addition to the external brands and products, we had one self-owned brand, Santa
Monica, under which we offered perfumes and eyewear during the Track Record Period and up
to the Latest Practicable Date. In 1999, we began to offer eyewear under the Santa Monica
brand. As of the Latest Practicable Date, we offered three categories of eyewear under the
Santa Monica brand. Under our Santa Monica eyewear, we aim to provide cost-effective
products that integrate technological innovation and aesthetic design, contributing to a stylish
and relaxed lifestyle of our consumers. Additionally, in 2022, we launched five perfumes under
our Santa Monica brand, which were generally considered to be entry-prestige perfumes. In
2025, we launched two perfumes under our Santa Monica brand with upgraded design and
features. For details of our Santa Monica brand and the related products, please refer to the
section headed “Business — Brands and Products — Product Portfolio of Our Self-owned
Brand” in this prospectus.
Pricing
We set the prices of the products we sell after considering numerous factors, including the
recommended retail prices determined in discussion with the brand licensors. Such
recommended retail prices are determined by taking into consideration, among others, (i) our
forecasted costs and expenses for advertisement, promotion and sales and distribution
channels; (ii) our anticipated profit margin; and (iii) the procurement prices of the products.
For the years ended March 31, 2023, 2024 and 2025, the average selling price of perfumes was
RMB215.6, RMB216.0 and RMB220.3, respectively. The average selling prices of perfumes
increased during the Track Record Period primarily because the proportion of the perfumes
with relatively higher recommended retail prices (generally ranging from RMB1,000 to
RMB2,000) among the perfumes we sold increased during the Track Record Period. For the
years ended March 31, 2023, 2024 and 2025, the sales volumes of perfumes amounted to 6.5
million units, 6.7 million units and 7.2 million units, respectively. The sales volume of the
perfumes increased during the Track Record Period, primarily due to the increase of purchase
orders from our offline channels, mainly due to the economic recovery in mainland China after
the COVID-19 pandemic had ended, which propelled our offline sales to increase. Please refer
to the section headed “Business — Pricing Strategy” in this prospectus for further details of our
pricing policy.
SUMMARY
–8–


--- page 19 ---
OUR OMNI-CHANNEL SALES AND DISTRIBUTION NETWORK
We have an extensive omni-channel sales and distribution network with high penetration
in both offline and online channels. Through our omni-channel network, we established a wide
coverage of POSs in China (including Hong Kong and Macau).
Our sales and distribution network generally consists of direct sales channels, retailer
channels and distribution channels. We sell branded products to distributors, retailers and
consumers through this sales and distribution network to optimize its coverage. Retailers
typically purchase products from us and on-sell them directly to consumers, while distributors
purchase products from us and primarily distribute them to retailers, but may also directly sell
products to consumers.
As of March 31, 2025, our products were sold at more than 100 offline POSs operated
directly by ourselves and more than 8,000 POSs operated by our retailer customers in over 400
cities in China (including Hong Kong and Macau). As of the same date, we also sold products
to offline distributors, which may resell these products to other offline retailers. In addition, as
of March 31, 2025, we operated five offline Perfume Box stores, which were located in
Shanghai, Kunming, Shenzhen and Foshan. Perfume Box is our self-operated retailer brand
that covers both online stores and offline sales channels.
SUMMARY
–9–


--- page 20 ---
The following table sets forth a breakdown of our revenue by categories of sales and
distribution channels for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Direct sales channels
 Online stores /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,786 7.3 126,144 6.8 163,698 7.9
 Offline stores/counters /H1118/H1118214,831 12.6 321,186 17.2 267,675 12.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118338,617 19.9 447,330 24.0 431,373 20.7
Retailer channels
 Online retailers (1) /H1118/H1118/H1118/H1118/H1118/H1118356,427 21.0 327,627 17.6 388,242 18.6
 Offline retailers (2) /H1118/H1118/H1118/H1118/H1118/H1118404,713 23.8 517,122 27.7 624,521 30.0
– Key accounts (3) /H1118/H1118/H1118/H1118315,656 18.6 380,481 20.4 389,050 18.7
– Travel retailers /H1118/H1118/H1118/H1118/H111889,057 5.2 136,641 7.3 235,471 11.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118761,140 44.8 844,749 45.3 1,012,763 48.6
Distribution channels
 Online distributors /H1118/H1118/H1118/H1118/H1118254,832 15.0 216,322 11.6 204,261 9.8
 Offline distributors /H1118/H1118/H1118/H1118/H1118312,342 18.4 344,157 18.5 429,353 20.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118567,174 33.4 560,479 30.1 633,614 30.4
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 1.9 11,203 0.6 5,613 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 100.0 1,863,761 100.0 2,083,363 100.0
Notes:
(1) Online retailers are retailers that purchase products from us and directly sell them to consumers through
online platforms, such as e-commerce platforms and third-party companies that represent KOLs.
(2) Offline retailers include both key accounts, which are generally chained cosmetics specialty stores in
mainland China, Hong Kong and Macau where the products procured from us are directly sold to
consumers, and travel retailers, which are primarily airports, airlines, cruises and downtown duty-free
shops where the products procured from us are directly sold to consumers.
(3) The revenue generated from the sales to key accounts for the year ended March 31, 2025 included the
revenue generated from the sales to a third party retailer which operated a Perfume Box store in Ningbo,
Zhejiang Province. For the year ended March 31, 2025, our revenue from sales to this third party
amounted to RMB0.5 million. Other than this Perfume Box store, all other Perfume Box stores in
mainland China as of March 31, 2025, including five offline Perfume Box stores and four online
Perfume Box stores, were directly operated by us. The revenue generated from our self-operated
Perfume Box stores during the Track Record Period was recorded under direct sales channels. For
details, please refer to the section headed “Business — Sales and Distribution of Products — Direct
Sales Channels — Perfume Box” in this prospectus.
(4) During the Track Record Period, we operated and managed the daily operations of the online and offline
stores under their respective brand names for certain of our customers and charged service fee in
connection therewith. Others primarily include service income deriving from charges arising from such
agency services.
SUMMARY
–1 0–


--- page 21 ---
The following table sets forth our gross profit and gross profit margin by categories of
sales and distribution channels for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
GP GP
Margin
GP GP
Margin
GP GP
Margin
Direct sales channels
 Online stores /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,068 60.6 79,197 62.8 106,564 65.1
 Offline stores/counters /H1118/H1118153,578 71.5 229,645 71.5 190,829 71.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228,646 67.5 308,842 69.0 297,393 68.9
Retailer channels
 Online retailers /H1118/H1118/H1118/H1118/H1118/H1118/H1118183,065 51.4 155,212 47.4 191,172 49.2
 Offline retailers.. /H1118/H1118/H1118/H1118/H1118/H1118180,060 44.5 240,763 46.6 294,399 47.1
– Key accounts /H1118/H1118/H1118/H1118/H1118138,670 43.9 178,874 47.0 182,648 46.9
– Travel retailers /H1118/H1118/H1118/H111841,390 46.5 61,889 45.3 111,751 47.5
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118363,125 47.7 395,975 46.9 485,571 47.9
Distribution channels
 Online distributors /H1118/H1118/H1118/H1118/H1118125,382 49.2 101,456 46.9 95,594 46.8
 Offline distributors /H1118/H1118/H1118/H1118/H1118148,441 47.5 155,107 45.1 193,208 45.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273,823 48.3 256,563 45.8 288,802 45.6
* For illustrative purpose only. The gross profit and gross profit margin of the sales and distribution
channels are calculated by subtracting cost of goods sold from the sales of goods for each sale and
distribution channel.
SUMMARY
–1 1–


--- page 22 ---
Direct Sales Channels
Our direct sales channels consist of online stores we operate on e-commerce and social
media platforms, including, among others, Tmall.com, Tmall.hk ( ˂፟਷ყ), JD.com, JD.hk
(਷ყ), RED (ࣣߎDouyin (ࠪand WeChat (ڦand offline stores/counters we
operate in shopping malls and department stores to sell products directly to consumers. As of
March 31, 2023, 2024 and 2025, we operated 32, 42 and 49 online stores, respectively. Our
self-operated stores and counters are located in shopping malls and department stores, which
primarily include brand boutique stores (ֳۜmulti-brand counters (೐ਖ਼ᓞ)
and image counters ( Җ൥ᓞ). From time to time and in connection with specific promotional
activities, we also launch temp stores (ֳࣛand pop-up stores (ֳAs of March 31,
2025, our self-operated offline stores/counters were located in over 20 cities in mainland China
and Hong Kong. As of March 31, 2023, 2024 and 2025, we operated 81, 75 and 75 offline
stores/counters in mainland China, 41, 32 and 34 offline stores/counters in Hong Kong and six,
nine and eight offline stores/counters in Macau, respectively. The offline stores and counters
in Macau were operated by Eternal Far East, our Hong Kong subsidiary, during the Track
Record Period. For details of our self-operated stores/counters, please refer to the section
headed “Business — Sales and Distribution of Products — Direct Sales Channels — Offline
Stores/Counters” in this prospectus.
For the years ended March 31, 2023, 2024 and 2025, revenue generated from the sales of
products under direct sales channels amounted to RMB338.6 million, RMB447.3 million and
RMB431.4 million, accounting for 19.9%, 24.0% and 20.7% of our total revenue, respectively,
for the same periods. For details of our direct sales channels, please see the section headed
“Business — Sales and Distribution of Products — Direct Sales Channels” in this prospectus.
Retailer Channels
Our retailer channels consist of online retailers and offline retailers, which include key
accounts and travel retailers. During the Track Record Period, online retailers to which we sold
products primarily included mainland China’s major or large-scale e-commerce platforms and
retailers that sell products through their online stores on e-commerce platforms. For the years
ended March 31, 2023, 2024 and 2025, we sold products to 57, 66 and 74 online retailer
customers, respectively
1, in China (including Hong Kong and Macau). As of the same dates,
the products we sold to online retailer customers were subsequently sold to their customers at
42, 63 and 122 POSs, respectively, in China (including Hong Kong and Macau). The key
accounts to which we sell products primarily include operators of chained cosmetics specialty
stores, operators of individual stores for cosmetics products, beauty salons, operators of brand
boutique stores and operators of chained or individual eyewear stores. The POSs operated by
these key accounts that sold the products purchased from us during the Track Record Period
primarily comprised of chained cosmetics specialty stores in China (including Hong Kong and
Macau). For the years ended March 31, 2023, 2024 and 2025, we sold products to 522, 566 and
1 The number of online retailers to which we sold products during each financial period is calculated based on
the number of online retailers which recorded at least one transaction with us during each financial period.
SUMMARY
–1 2–


--- page 23 ---
590 key account customers, respectively 2, in China (including Hong Kong and Macau). As of
March 31, 2023, 2024 and 2025, the products we sold to key accounts customers were
subsequently sold to their customers at 6,779, 7,167 and 7,842 POSs, respectively, in China
(including Hong Kong and Macau). The travel retailers to which we sell products primarily
include airports, airlines, cruises and downtown duty-free shops. As of March 31, 2025, the
POSs of travel retailers that sold the products purchased from us were located in 40 cities in
China (including Hong Kong and Macau). For the years ended March 31, 2023, 2024 and 2025,
we sold products to seven, 14 and 14 travel retailer customers, respectively
3, in China
(including Hong Kong and Macau). As of March 31, 2023, 2024 and 2025, the products we sold
to travel retailer customers were subsequently sold to their customers at 183, 320 and 343
POSs, respectively, in China (including Hong Kong and Macau).
For the years ended March 31, 2023, 2024 and 2025, our revenue generated from the
retailer channels amounted to RMB761.1 million, RMB844.7 million and RMB1,012.8 million,
accounting for 44.8%, 45.3% and 48.6% of our total revenue, respectively, for the same
periods. For details of our direct sales channels, please see the section headed “Business —
Sales and Distribution of Products — Retailer Channels” in this prospectus.
Distribution Channels
During the Track Record Period and up to the Latest Practicable Date, we sold a number
of products through distributors. Our distributors include online distributors and offline
distributors, which purchase products from us and primarily resell them to online retailers and
offline retailers, respectively. Some of these distributors also sell products directly to
consumers. For the years ended March 31, 2023, 2024 and 2025, we sold products to 90, 98
and 99 distributors, respectively
4. For the years ended March 31, 2023, 2024 and 2025, revenue
generated from the sales of products to our distributors amounted to RMB567.2 million,
RMB560.5 million and RMB633.6 million, accounting for approximately 33.4%, 30.1% and
30.4% of our total revenue, respectively, for the same periods, respectively. We generally only
allow distributors to return defective products.
We had no material dispute with our distributors during the Track Record Period and up
to the Latest Practicable Date. To the best knowledge of our Directors, all of our distributors
were Independent Third Parties during the Track Period Record. For further details of
distributors, please see the section headed “Business — Sales and Distribution of Products —
Distribution Channels” in this prospectus.
2 The number of key accounts to which we sold products during each financial period is calculated based on the
number of key accounts which recorded at least one transaction with us during each financial period.
3 The number of travel retailers to which we sold products during each financial period is calculated based on
the number of travel retailers which recorded at least one transaction with us during each financial period.
4 The number of distributors to which we sold products during each financial period is calculated based on the
number of distributors which recorded at least one transaction with us during each financial period.
SUMMARY
–1 3–


--- page 24 ---
COMPETITIVE LANDSCAPE
Market deployment and other operating activities for the brands are in the midstream of
perfume industry, which can be conducted by either brand-owner perfume groups or
non-brand-owner perfume groups. Brand owners may choose to operate their brands
themselves, or grant licenses to the local operators to operate their brands to enjoy the benefits
brought by their cooperation with the local operators. For details, please refer to “Industry
Overview — Overview of Perfume Industry in China (Including Hong Kong and Macau) —
Overview of Perfume Industry in China (Including Hong Kong and Macau) — Business Model
of Perfume Industry — Industry Midstream” in this prospectus. In the event that brand owners
choose to operate the brands by themselves in the local markets, they may pose certain degree
of competition against the local operators, such as our Group, because the consumer groups of
the brand owners and those of the local operators who ultimately purchase the relevant
products will likely be the same. However, the local operators may be able to successfully
compete against the brand owners, or become their local operators, by leveraging the expertise
and in-depth understanding of the local markets, the mid-stream value chain positioning
connecting the upstream suppliers and downstream sales and distribution channels, and the
value-added services to brands in terms of the market deployment.
During the Track Record Period, we primarily competed with external brand owners
(excluding the brand-owner perfume groups for which we conduct product distribution and
market deployment) and other non-brand-owner perfume groups that sell products in China
(including Hong Kong and Macau), as a majority of our revenue was generated from the sales
of perfumes. In particular, as the external brands of perfumes for which we conduct product
distribution and market deployment were primarily international brands as of the Latest
Practicable Date, we face competition from the Chinese domestic brands of perfumes targeting
similar customer groups. These domestic perfume brands may have certain competitive
advantage against international brands. Please see the section headed “Business —
Competition” in this prospectus for details.
The total market size in terms of retail sales of perfumes in China (including Hong Kong
and Macau) increased from RMB14.6 billion in 2018 to RMB26.1 billion in 2023 with a CAGR
of approximately 12.3%, and is expected to further grow to RMB47.7 billion in 2028,
representing a CAGR of approximately 12.8% from 2023 to 2028. The market size in terms of
retail sales of perfumes in mainland China increased from RMB11.4 billion in 2018 to
RMB22.9 billion in 2023 with a CAGR of approximately 15.0%, and is expected to grow to
RMB44.0 billion in 2028 with a CAGR of approximately 14.0%. We were the fourth largest
perfume group in mainland China in terms of the retail sales in 2023, with a market share of
approximately 8.1%. We ranked the first among the non-brand-owner perfume groups in terms
of retail sales of perfume products in 2023. We were also the third largest perfume group in
China (including Hong Kong and Macau) in terms of retail sales in 2023, with a market share
of approximately 9.3%.
SUMMARY
–1 4–


--- page 25 ---
CUSTOMERS
We sell products to retailers, distributors and consumers. For the years ended March 31,
2023, 2024 and 2025, revenue generated from our five largest customers in each year during
the Track Record Period amounted to approximately RMB371.3 million, RMB364.2 million
and RMB518.2 million, accounting for approximately 21.9%, 19.5% and 24.9% of our total
revenue, respectively, for the same periods. For the years ended March 31, 2023, 2024 and
2025, revenue generated from our largest customer amounted to approximately RMB96.1
million, RMB102.9 million and RMB167.1 million, accounting for approximately 5.7%, 5.5%
and 8.0% of our total revenue for the same periods, respectively. Please see “Business —
Customers” in this prospectus for details.
To the best knowledge of our Directors, during each year of the Track Record Period, all
of our five largest customers in each year during the Track Record Period were Independent
Third Parties. None of our Directors, their respective close associates, or any Shareholder who,
to the knowledge of our Directors, owns more than 5% of our issued capital, had any interest
in these customers during the Track Record Period and up to the Latest Practicable Date.
SUPPLIERS
During the Track Record Period, we procured branded products from external brand
licensors. For the years ended March 31, 2023, 2024 and 2025, the purchases from our five
largest suppliers in each year during the Track Record Period amounted to approximately
RMB698.1 million, RMB771.5 million and RMB851.3 million, accounting for approximately
84.0%, 81.6% and 77.8%, respectively, of our total purchase for the same periods. For the years
ended March 31, 2023, 2024 and 2025, the purchases from our largest supplier amounted to
approximately RMB230.4 million, RMB373.4 million and RMB399.6 million, accounting for
approximately 27.7%, 39.5% and 36.5% of our total purchase, for the same periods,
respectively. Please see “Business — Suppliers” in this prospectus for details.
To the best knowledge of our Directors, during each year of the Track Record Period, all
of our five largest suppliers in each year during the Track Record Period were Independent
Third Parties, and none of our Directors, their respective close associates, or any Shareholder
who, to the knowledge of our Directors, owns more than 5% of our issued capital, or had any
interest in these suppliers during the Track Record Period and up to the Latest Practicable Date.
SUMMARY
–1 5–


--- page 26 ---
OUR COMPETITIVE STRENGTHS
We believe the following strengths have contributed to our success and differentiate us
from our competitors: (i) we maintain a leading position for perfumes in China (including
Hong Kong and Macau); (ii) we maintain a clear focus on the structurally growing and resilient
olfactory economy in mainland China to capture strategic market opportunities; (iii) we
developed outstanding capabilities for product distribution and market deployment, which
impose significant market entry barriers for our competitors; (iv) we are a long-term business
partner for the leading global brands; (v) we have a large and multi-layered customer base
comprising an omni-channel sales and distribution network to continuously reach wider group
of consumers; and (vi) we are led by a visionary management team, promoting a people-centric
corporate culture.
OUR BUSINESS STRATEGIES
We are committed to maintaining our leading position for perfumes in China (including
Hong Kong and Macau), and continuing to be the long-term partner for the leading global
brands. To achieve our objective, we plan to implement the following key strategies: (i)
strengthen our market leading position through optimizing, broadening and diversifying our
brand and product portfolios; (ii) extend our consumer reach through continued investment in
our direct sales channels; (iii) accelerate digital transformation to streamline our business
operations and strengthen the support for our full-cycle consumer management program; and
(iv) enhance the recognition and industry-leading reputation of our Group.
SUMMARY OF MATERIAL RISK FACTORS
Our business faces risks including those set out in the section headed “Risk Factors” in
this prospectus. As different investors may have different interpretations and criteria when
determining the significance of a risk, you should read the “Risk Factors” section in its entirety
before you decide to invest in the Offer Shares. Some of the major risks that we face include:
 Our business depends heavily on the strength and reputation of the brands for which
we conduct product distribution and market deployment, and consumers’ recognition
and their trust in the products we promote and sell may be materially and adversely
affected if we fail to maintain and enhance the recognition and reputation of such
brands;
 We operate in a highly competitive industry. If we fail to compete effectively, our
business and operating results could be adversely affected;
 We depend on brand licensors, including brand owners and their primary licensees,
to grow our business. If we fail to maintain good business relationships with our
major brand licensors, our business and operating results could be adversely
affected;
SUMMARY
–1 6–


--- page 27 ---
 The size of the existing markets for the products we sell may be smaller than
estimated and new market opportunities may not develop as quickly as we expect,
or at all, limiting our ability to successfully sell the products;
 Our sales and marketing strategies may not be able to adapt to the changes in the
market trends and consumer preferences in a timely manner, and our marketing
activities may not be cost-effective in attracting consumers. If any of the foregoing
occurs, our business, financial condition and results of operations could be harmed;
 If the online platforms we rely on to promote and sell the products are interrupted
or disrupted for any reason or if our cooperation with such online platforms
deteriorates or becomes more costly to maintain or is otherwise terminated for any
reason, or if there is any change in the behavior patterns of online consumers, our
business and results of operations may be materially and adversely affected.
 Disruptions to supply chain, transportation and logistics could harm our business.
 Our control over our distributors could be limited;
 We may encounter difficulties in maintaining, expanding or optimizing our sales and
distribution network; and
 We are exposed to concentration risk involving our suppliers.
SUMMARY FINANCIAL INFORMATION
The following tables set forth summary data from our consolidated financial information
for the Track Record Period, extracted from the Accountant’s Report set out in Appendix I to
this prospectus. The summary consolidated financial data sets forth below should be read
together with, and qualified in its entirety by reference to, the consolidated financial statements
in this prospectus, including the related notes. Our consolidated financial information was
prepared in accordance with HKFRS.
SUMMARY
–1 7–


--- page 28 ---
Summary of Consolidated Statements of Comprehensive Income
The following table sets forth the components of our consolidated statements of
comprehensive income for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 1,863,761 2,083,363
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(843,153) (925,570) (1,035,246)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118855,991 938,191 1,048,117
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(457,520) (514,569) (592,943)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(169,954) (202,670) (207,831)
(Provision for)/reversal of impairment
of financial assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(622) (474) 605
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,057 12,346 6,868
Other (losses)/gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,818) (1,272) 13,402
Operating profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223,134 231,552 268,218
Finance income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,468 8,063 1,692
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,667) (4,034) (6,225)
Finance income/(costs), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,801 4,029 (4,533)
Share of loss of a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,964) (2,989)
Profit before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,935 232,617 260,696
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(53,829) (26,144) (33,667)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,106 206,473 227,029
Other comprehensive income
Items that may be subsequently
reclassified to profit or loss:
Exchange differences on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,148 17,333 5,416
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,254 223,806 232,445
SUMMARY
–1 8–


--- page 29 ---
Our revenue increased from RMB1,699.1 million for the year ended March 31, 2023 to
RMB1,863.8 million for the year ended March 31, 2024, and further to RMB2,083.4 million
for the year ended March 31, 2025. These increases were mainly due to the overall global
economic growth, and in particular the growth in the industries where we operate in China
(including Hong Kong and Macau) after the COVID-19 pandemic had ended. For details of our
revenue fluctuations by product and sales channel, please see the section headed “Financial
Information — Period to Period Comparison of Results of Operations” in this prospectus.
Our net profit increased from RMB173.1 million for the year ended March 31, 2023 to
RMB206.5 million for the year ended March 31, 2024 and further to RMB227.0 million for the
year ended March 31, 2025. These increases were mainly due to changes in our results of
operations as detailed under the section headed “Financial Information — Period to Period
Comparison of Results of Operations” in this prospectus.
Summary of Consolidated Statements of Financial Position
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118191,985 135,597 139,871
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118902,614 897,799 1,071,240
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094,599 1,033,396 1,211,111
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,549 34,732 22,543
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118533,652 540,119 497,578
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118559,201 574,851 520,121
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118368,962 357,680 573,662
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,398 458,545 690,990
Our net current assets decreased from RMB369.0 million as of March 31, 2023 to
RMB357.7 million as of March 31, 2024, primarily due to the increase of our current liabilities
and decrease of our current assets. Our total current liabilities increased primarily due to an
increase in the amount due to a director, mainly arising from the dividend we declared, which
remained due to our Controlling Shareholders as of March 31, 2024. Our total current assets
decreased primarily due to a decrease in our cash and cash equivalents as a result of dividend
payments made to our Controlling Shareholders.
SUMMARY
–1 9–


--- page 30 ---
Our net current assets increased from RMB357.7 million as of March 31, 2024 to
RMB573.7 million as of March 31, 2025, primarily due to the increase in our current assets and
the decrease in our current liabilities. Our total current assets increased from RMB897.8
million as of March 31, 2024 to RMB1,071.2 million as of March 31, 2025, primarily due to
(i) an increase of RMB105.1 million in cash and cash equivalents, primarily due to the increase
in net cash flow from our operating activities for the year ended March 31, 2025 as a result of
our business expansion; (ii) an increase of RMB75.1 million in trade receivables, primarily due
to the increase in the sales to an online retailer customer, to which we generally granted credit
terms of 30 to 60 days, and the increase in the sales to certain travel retailer customers and key
account customers, to which we generally granted credit terms of 60 days; and (iii) an increase
of RMB43.8 million in inventories, primarily reflecting the increase in finished goods as our
business expanded, partially offset by a decrease of RMB30.2 million in the deposits,
prepayments and other receivables, primarily due to the decrease of our other receivables
because we accelerated the billing and collection of reimbursement from the brand licensors
for the extra advertising and promotional activities we conducted for their brands during the
year ended March 31, 2025. Our total current liabilities decreased from RMB540.1 million as
of March 31, 2024 to RMB497.6 million as of March 31, 2025, primarily due to (i) a decrease
of RMB50.0 million in accruals and other payables, which was mainly because we made faster
payment settlement with the suppliers that provided marketing and promotional services to us;
and (ii) a decrease of RMB70.7 million in amount due to a director, which was mainly because
we partially settled the payment of dividends due to Mr. Lau during the year ended March 31,
2025, partially offset by (i) an increase of RMB26.3 million in trade payables, which was
mainly because our purchases from suppliers increased as we had anticipated that our business
will continue to expand; (ii) an increase of RMB33.2 million in bank borrowings as we took
out additional bank loans to replenish our working capital; and (iii) an increase of RMB21.7
million in income tax payable, primarily because the relatively lower income tax payable as of
March 31, 2024 was the result of a one-off combined effect of a decrease of taxable income
arising from the transfer pricing arrangement.
For details of the fluctuations of our net current assets, please refer to the section headed
“Financial Information — Net Current Assets” in this prospectus.
Our net assets decreased from RMB535.4 million as of March 31, 2023 to RMB458.5
million as of March 31, 2024, primarily due to the dividends paid to Shareholders of
RMB314.3 million, partially offset by the total comprehensive income of RMB223.8 million
recorded during the year ended March 31, 2024. Our net assets increased from RMB458.5
million as of March 31, 2024 to RMB691.0 million as of March 31, 2025, primarily due to the
total comprehensive income of RMB232.4 million recorded during the year ended March 31,
2025.
SUMMARY
–2 0–


--- page 31 ---
Summary of Consolidated Statements of Cash Flows
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net cash generated from operating activities /H1118 210,131 161,472 236,703
Net cash used in investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,375) (16,525) (8,515)
Net cash used in financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(215,525) (335,355) (132,786)
Net (decrease)/increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(30,769) (190,408) 95,402
Effect of foreign exchange rate changes /H1118/H1118/H1118/H111843,838 20,875 9,667
Cash and cash equivalents at the beginning
of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,393 320,462 150,929
Cash and cash equivalents at the end of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,462 150,929 255,998
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as of the dates and for
the periods indicated:
As of/For the Y ear Ended March 31,
2023 2024 2025
Net profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.2% 11.1% 10.9%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.7 1.7 2.2
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.0 0.9 1.3
Return on equity (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833.0% 41.5% 39.5%
Notes:
(1) Net profit margin equals profit for the year divided by total revenue for the year and multiplied by 100%.
(2) Current ratio equals total current assets divided by total current liabilities as of the end of the year.
(3) Quick ratio equals total current assets less inventories divided by total current liabilities as of the end
of the year.
(4) Return on equity equals profit for the year divided by the average balance of our total equity at the
beginning and end of the year and multiplied by 100%.
SUMMARY
–2 1–


--- page 32 ---
CONTROLLING SHAREHOLDERS
Immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), our Company will be owned as to 75% by Eternal International, which is in turn held
by Mr. Lau and Mrs. Lau as to 90% and 10% respectively. For the purposes of the Listing and
under the Listing Rules, Eternal International, Mr. Lau and Mrs. Lau will therefore be regarded
as a group of Controlling Shareholders of our Company. For details, please refer to the section
headed “Relationship with the Controlling Shareholders” in this prospectus.
As of the Latest Practicable Date, Eternal BVI was a corporate director of Gold Vision
Limited (“Gold Vision”), which is principally engaged in retail sales of eyewear products.
Having considered that (i) the principal business of Gold Vision is retail sales of eyewear
products; (ii) during the Track Record Period and up to the Latest Practicable Date, we were
only engaged in wholesale and distribution of eyewear products; (iii) both Gold Vision and our
Group have no intention to change their respective principal business, our Directors are of the
view that there is clear delineation and no material competition between the business operated
by Gold Vision and our Group. For further details, see the section headed “Relationship with
the Controlling Shareholders — Competition under Rule 8.10 of the Listing Rules” in this
prospectus.
We have entered into certain transactions with our Controlling Shareholders and/or their
associates which will constitute continuing connected transactions for our Company under
Chapter 14A of the Listing Rules. For details, please refer to the section headed “Continuing
Connected Transactions” in this prospectus.
SELLING SHAREHOLDER
As part of the Global Offering, the Selling Shareholder will offer up to 34,660,000 OAO
Sale Shares for sale if the Over-allotment Option is exercised in full. For further details, see
the section headed “Structure of the Global Offering — Over-allotment Option” in this
prospectus. Further details of the Selling Shareholder are set out in the section headed
“Statutory and General Information — G. Other Information — 13. Particulars of the Selling
Shareholder” in Appendix IV to this prospectus.
PRE-IPO SHARE OPTION SCHEME
Our Company adopted the Pre-IPO Share Option Scheme on June 18, 2024. As of the date
of this prospectus, the outstanding options to subscribe for an aggregate of 26,194,000 Shares
representing approximately 1.9645% of the share capital of our Company in issue immediately
following the completion of the Capitalization Issue and the Global Offering (assuming the
Over-allotment Option is not exercised, and without taking into account any Shares which may
be allotted and issued upon the exercise of any options granted under the Pre-IPO Share Option
SUMMARY
–2 2–


--- page 33 ---
Scheme and any options which may be granted under the Share Option Scheme), have been
conditionally granted by our Company under the Pre-IPO Share Option Scheme to a total of
18 grantees on June 24, 2024 and July 8, 2024, respectively, and the exercise price of each
option granted were HK$0.1. Upon exercise of the options under the Pre-IPO Share Option
Scheme, a total of 26,194,000 Shares will be allotted and issued to Eternal Beauty Investment
Limited, a company incorporated in BVI and wholly-owned by Futu Trustee Limited, the
trustee of the trust set up by our Company to facilitate the administration of the Pre-IPO Share
Option Scheme, which shall then distribute the Shares to the relevant grantees. As of the Latest
Practicable Date, none of the options has been exercised.
Assuming 26,194,000 Shares will be issued upon the full vesting and exercise of all
outstanding options granted under the Pre-IPO Share Option Scheme, the shareholding of our
Shareholders immediately following completion of the Capitalization Issue and the Global
Offering and taking no account of any Shares which may be allotted and issued pursuant to the
exercise of the Over-allotment Option will be diluted by approximately 1.93%. The dilution
effect on our earnings per Share would be approximately 1.93% arising from the issue of shares
in respect of such outstanding options.
For further details of the Pre-IPO Share Option Scheme, see the section headed “Statutory
and General Information — E. Pre-IPO Share Option Scheme” in Appendix IV to this
prospectus.
RECENT DEVELOPMENTS
Subsequent to the Track Record Period and up to the date of this prospectus, our business
and operation have remained stable, which was in line with our past trends and expectations.
IMPACT OF COVID-19 PANDEMIC ON OUR GROUP
The outbreak of the COVID-19 pandemic had the following impact on our business,
results of operation and financial condition during the Track Record Period: (i) the total
consumer traffic in our offline stores/counters decreased during the COVID-19 pandemic,
which resulted in an increase of inventory balance and inventory turnover days; (ii) in 2022,
20 (or approximately 23.0%) of our self-operated offline stores were temporarily closed due to
the COVID-19 pandemic; and (iii) the time required for completing the custom clearance
became relatively longer under the impact of COVID-19 pandemic.
Since December 2022, our operation has fully resumed to normal after the impact from
the COVID-19 pandemic had eased. Given that our operation has resumed to normal and we
were able to maintain the stability of our revenue and gross profit margin under the impact of
COVID-19 pandemic, (i) our Directors are of the view that the COVID-19 pandemic did not
materially and adversely impacted the operations or financial conditions of our Group during
the Track Record Period; and (ii) our Directors do not expect that the COVID-19 pandemic will
have further adverse impact on our Group’s business and financial performance.
SUMMARY
–2 3–


--- page 34 ---
USE OF PROCEEDS
The estimated net proceeds of the Global Offering which we will receive after deduction
of underwriting fees and commissions and estimated expenses payable by us in connection with
the Global Offering (assuming the Over-allotment Option is not exercised), will be
approximately HK$950.4 million, assuming an Offer Price of HK$3.09 (being the mid-point of
the Offer Price Range).
We intend to use the net proceeds as follows (based on the mid-point of the Offer Price
range stated in this prospectus):
 Approximately 15.0%, or HK$142.6 million, will be used to further develop our
self-owned brands, including Santa Monica, and acquire or invest in external brands.
 Approximately 55.0%, or HK$522.8 million, will be used to develop and expand our
direct sales channels, including the expansion of our online and offline Perfume Box
stores, and other self-operated online and offline stores/counters.
 Approximately 10.0%, or HK$95.0 million, will be used to accelerate our digital
transformation, primarily by upgrading of our digitalized CRM system, mid-office
systems and finance and operation systems.
 Approximately 10.0%, or HK$95.0 million, will be used to enhance the recognition
and reputation of our Group.
 Approximately 10.0%, or HK$95.0 million, will be used to fund working capital and
general corporate purposes to support our business operation and growth.
We will not receive any proceeds from the sale of the OAO Sale Shares by the Selling
Shareholder in the Global Offering. We estimate that the Selling Shareholder will receive gross
proceeds of approximately HK$107.1 million (in the event that the Over-allotment Option is
exercised in full) from the sale of the OAO Sale Shares, based on the Offer Price of HK$3.09
per Share.
Please refer to “Future Plans and Use of Proceeds” in this prospectus for details.
DIVIDENDS
No dividend was declared or paid by our Company during the Track Record Period. For
the years ended March 31, 2023, 2024 and 2025, the interim dividends declared by the
companies now comprising our Group to their then equity shareholders, after elimination of
intra-group dividends, amounted to RMB189.4 million, RMB314.3 million and nil,
respectively. Our Group did not declare any final dividends during the Track Record Period.
SUMMARY
–2 4–


--- page 35 ---
On May 13, 2025, our Company declared the payment of a final dividend of RMB120.0 million
for the year ended March 31, 2025. As of the Latest Practicable Date, the dividends declared
by our Group were not fully paid, and will be settled before the Listing.
Subject to our constitutional documents and the Companies Act, the Board may declare,
and our Company may pay, dividends after taking into account our results of operations,
financial condition, cash flow, operating and capital expenditure requirements, future business
development strategies and estimates and other factors as it may deem relevant. We may
distribute dividends by way of cash, or warrant. We may distribute stock dividends if our
Directors consider that our stock price and equity scale do not match and that distribution of
stock dividends is beneficial to all Shareholders’ interest. Any declaration and payment as well
as the amount of dividends will be subject to our constitutional documents and the Companies
Act. Any proposed distribution of dividends shall be determined by our Board and must be
approved by our shareholders at a general meeting. In addition, we may declare interim
dividends as our Board considers to be justified by our profits and overall financial
requirements. No dividend shall be declared or payable except out of our profits and reserves
lawfully available for distribution. We do not have a fixed dividend policy. However, following
the Listing, the Board intends to recommend at the relevant Shareholders meeting an annual
dividend of no less than 50% of our profit for the year available for distribution to the
Shareholders, after taking into consideration the factors described above in the foreseeable
future. Our Company may reduce or cease any dividend distribution in certain circumstances
where our Company has net cash outflow from operating activities in the year of the
consolidated statement of accounts, or the amount of proposed investments or acquisitions of
our Company during the year exceeds its operating cash inflow in the same year. Our future
declarations of dividends may or may not reflect our historical declarations of dividends and
will be at the discretion of our Board and subject to the approval of Shareholders’ meeting.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our total listing expenses
(including underwriting commission) will be approximately RMB73.1 million. During the
Track Record Period, listing expenses of approximately RMB5.6 million and RMB18.7 million
were charged to our consolidated statements of profit or loss for the years ended March 31,
2024 and 2025, respectively, and approximately RMB6.6 million were recognized as prepaid
listing expenses as of March 31, 2025, which are expected to be deducted from equity upon
Listing as they are directly attributable to the issue of the Shares to the public. The estimated
remaining listing expenses of approximately RMB15.5 million are expected to be charged to
our consolidated statements of profit or loss for the year ending March 31, 2026, and
approximately RMB26.7 million are expected to be deducted from equity upon Listing. The
listing expenses consisted of RMB20.3 million underwriting-related expenses and RMB52.8
million non-underwriting-related expenses (including fees and expenses of legal advisors and
the reporting accountant of RMB30.2 million and other fees and expenses of RMB22.6
million). The Selling Shareholders will not bear any of the listing expenses.
SUMMARY
–2 5–


--- page 36 ---
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work which our Directors consider appropriate
and 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 or trading position or
prospects since March 31, 2025, being the date on which our latest audited consolidated
financial statements were prepared, and there is no event since March 31, 2025, which would
materially affect the information as set out in the Accountant’s Report in Appendix I to this
prospectus.
GLOBAL OFFERING STATISTICS
Assuming an Offer Price of HK$2.80 and HK$3.38, our unaudited pro forma adjusted
consolidated net tangible asset value attributable to owners of our Company would be HK$1.22
per Share and HK$1.36 per Share, respectively. See “Unaudited Pro Forma Financial
Information — A. Unaudited Pro Forma Statement of Adjusted Consolidated Net Tangible
Assets” in Appendix II to this prospectus for details.
Based on an Offer
Price of HK$2.80
per Offer Share
Based on an Offer
Price of HK$3.38
per Offer Share
Market capitalization of our Shares upon
completion of the Capitalization Issue and the
Global Offering
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$3,733.5
million
HK$4,506.9
million
Unaudited pro forma adjusted consolidated net
tangible asset value per Share (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$1.22 HK$1.36
Notes:
(1) All statistics in this table are presented based on the assumption that the Over-allotment Option are not
exercised.
(2) The calculation of market capitalization is based on 1,333,400,000 Shares expected to be in issue
immediately following the completion of the Capitalization Issue and the Global Offering.
(3) The unaudited pro forma adjusted consolidated net tangible asset value per Share is calculated after the
adjustments referred to in “Unaudited Pro Forma Financial Information” in Appendix II to this
prospectus and on the basis of 1,333,400,000 Shares expected to be in issue and outstanding
immediately following the completion of the Capitalization Issue and the Global Offering.
SUMMARY
–2 6–


--- page 37 ---
In this prospectus, unless the context otherwise requires, the following terms have
the following meanings.
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong (formerly known as the Financial Reporting
Council of Hong Kong)
“Articles of Association” or
“Articles”
the amended and restated articles of association of our
Company conditionally adopted on June 6, 2025 and
effective from the Listing Date and amended from time to
time
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of the Board
“B&E China” B & E China Holdings Limited (ʮ̡),
a limited liability company incorporated under the laws
of Hong Kong on May 8, 2023, and is held as to 50% by
Eternal BVI and 50% by Dr. Babor
“BABOR Beijing” BABOR Beijing Trading Pte Limited* (ᘒѸ(̏ԯ)൱
ʮ̡), a limited liability company incorporated
under the law of the PRC on July 25, 2023, and is wholly
owned by B&E China
“BABOR Shanghai” BABOR Shanghai Trading Pte Limited* (ᘒѸ(ɪऎ)൱
ʮ̡), a limited liability company incorporated
under the law of the PRC on June 27, 2023, and is wholly
owned by B&E China
“Board” or “Board of Directors” the board of Directors of our Company
“business day” day on which banks in Hong Kong are generally open for
normal banking business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“BVI” the British Virgin Islands
DEFINITIONS
–2 7–


--- page 38 ---
“CAGR” compound annual growth rate
“Capital Market Intermediaries” the capital market intermediaries as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus and has the meaning ascribed
thereto under the Listing Rules
“Capitalization Issue” the issue of Shares to be made upon capitalization of
certain amounts in the share premium account of our
Company as referred to in the section headed
“Resolutions in writing of our then sole Shareholder
passed on June 6, 2025” in Appendix IV to this
prospectus
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“China”, “mainland China” or
“the PRC”
People’s Republic of China, but for the purpose of this
prospectus and for geographical reference only and
except where the context requires otherwise, references
in this prospectus to “China” and the “PRC” do not apply
to Hong Kong, Macau and Taiwan
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“Companies (WUMP) Ordinance” the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time
“Companies Act” or “Cayman
Companies Act”
the Companies Act (As Revised) of the Cayman Islands,
as amended, supplemented or otherwise modified from
time to time
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company”, “our Company”,
“we”, “us”, or “our”
Eternal Beauty Holdings Limited (ʮ̡),
an exempted company incorporated in the Cayman
Islands with limited liability on January 9, 2024
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
–2 8–


--- page 39 ---
“Controlling Shareholders” has the meaning ascribed thereto under the Listing Rules
and, in the context of this prospectus, refers to Mr. Lau,
Mrs. Lau and Eternal International
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Corporate Governance Code” the Corporate Governance Code set out in Appendix C1
to the Listing Rules
“Corporate Reorganization” the reorganization of our Group in preparation for
Listing, details of which are described in the section
headed “History, Development and Corporate Structure
— Corporate Development and Reorganization” in this
prospectus
“COVID-19” coronavirus disease 2019, an infectious disease caused by
severe acute respiratory syndrome coronavirus
(SARS-CoV-2) and first identified in late 2019
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ
ึ)
“Director(s)” the director(s) of our Company
“Dr. Babor” Dr. Babor GmbH & Co KG, a company incorporated
under the laws of the Federal Republic of Germany, an
Independent Third Party
“E&C Holdings” E&C Holdings Limited, a limited liability company
incorporated under the laws of Hong Kong on September
2, 2021, and a former indirect wholly-owned subsidiary
of our Company
“E&C Trading” E&C (Hong Kong) Trading Limited ( ጑੻(ಥ)ࠢ
ʮ̡), a limited liability company incorporated under the
laws of Hong Kong on November 30, 2021, and a former
indirect wholly-owned subsidiary of our Company
“E&C Shanghai” E&C Shanghai Cosmetics Ltd* (ࠢ
ʮ̡), a limited liability company incorporated under the
law of the PRC on December 2, 2021, and a former
indirect wholly-owned subsidiary of our Company
DEFINITIONS
–2 9–


--- page 40 ---
“E China Trading” E China Trading Limited (ʮ̡), a
limited liability company incorporated under the laws of
Hong Kong on November 7, 2018, and an indirect
wholly-owned subsidiary of our Company
“EIT Law” the PRC Enterprise Income Tax Law ( ʕശɛ͏΍ձ਷Ά
جas enacted by the NPC on March 16, 2007,
and effective on January 1, 2008, as amended,
supplemented or otherwise modified from time to time
“Eternal Beauty Shanghai
Trading”
Eternal Beauty (Shanghai) Trading Co., Ltd* (Ѹ
(ɪऎ)ʮ̡), a limited liability company
incorporated under the law of the PRC on August 14,
2023, and an indirect wholly-owned subsidiary of our
Company
“Eternal Beijing Trading” Eternal (Beijing) Trading Co., Ltd* ( ጑ஷ(̏ԯ)ࠢ
ʮ̡), a limited liability company incorporated under the
law of the PRC on April 19, 2019, and an indirect
wholly-owned subsidiary of our Company
“Eternal BVI” Eternal Holdings Limited, a limited liability company
incorporated under the laws of the BVI on April 7, 1995,
and a direct wholly-owned subsidiary of our Company
“Eternal Chengdu Trading” Eternal (Chengdu) Trading Co., Ltd* ( ጑ஷ(ϓே)Ϟ
ʮ̡), a limited liability company incorporated under
the law of the PRC on April 18, 2019, and an indirect
wholly-owned subsidiary of our Company
“Eternal China” Eternal China Limited (ʮ̡), a limited
liability company incorporated under the laws of Hong
Kong on April 10, 2017, and an indirect wholly-owned
subsidiary of our Company
“Eternal China Trading” Eternal (China) International Trading Co., Ltd* ( ጑ஷ(ʕ
਷)ப΂ʮ̡), a limited liability company
incorporated under the law of the PRC on January 7,
2019, and an indirect wholly-owned subsidiary of our
Company
DEFINITIONS
–3 0–


--- page 41 ---
“Eternal Development” Shanghai Eternal Enterprise Development Co., Ltd* ( ɪ
ʮ̡), a limited liability company
incorporated under the law of the PRC on January 23,
2024, and an indirect wholly-owned subsidiary of our
Company
“Eternal Far East” Eternal Optical & Perfumery (Far East) Limited ( 㣤ஷ(Ⴣ
؇)ʮ̡), a limited liability company incorporated
under the laws of Hong Kong on February 18, 1983, and
an indirect wholly-owned subsidiary of our Company
“Eternal Guangzhou Trading” Eternal (Guangzhou) Trading Co., Ltd*( ጑ஷ(ᄿψ)׸
ʮ̡), a limited liability company incorporated
under the law of the PRC on June 24, 2019, and an
indirect wholly-owned subsidiary of our Company
“Eternal International” Eternal Beauty International Limited (ʮ
̡), a limited liability company incorporated under the
laws of the BVI on January 8, 2024, which is owned as to
90% and 10% by Mr. Lau and Mrs. Lau, respectively
“Eternal Shanghai Cosmetics” Eternal (Shanghai) Cosmetics Ltd* (ࠢ
ʮ̡), a limited liability company incorporated under the
law of the PRC on February 15, 2019, and an indirect
wholly-owned subsidiary of our Company
“Eternal Shanghai
Digintelligence”
Eternal (Shanghai) Digintelligence Corporation* ( ɪऎ጑
ʮ̡), a limited liability company
incorporated under the law of the PRC on May 14, 2021,
and an indirect wholly-owned subsidiary of our Company
“Eternal Shanghai Optical” Eternal Shanghai Optical Ltd* (ʮ̡),
a limited liability company incorporated under the law of
the PRC on June 10, 2021, and an indirect wholly-owned
subsidiary of our Company
“Eternal Shanghai Trading” Eternal (Shanghai) Trading Co., Ltd* ( ጑ஷ(ɪऎ)Ϟ
ʮ̡), a limited liability company incorporated under
the law of the PRC on July 30, 2008, and an indirect
wholly-owned subsidiary of our Company
DEFINITIONS
–3 1–


--- page 42 ---
“Eternal Shenzhen Trading” Eternal Beauty (Shenzhen) Trading Co., Ltd* (ุ
(ଉέ)ʮ̡), a limited liability company
incorporated under the law of the PRC on June 30, 2023,
and an indirect wholly-owned subsidiary of our Company
“Eternal Xian Trading” Eternal (Xian) Trading Co., Ltd* ( ጑ஷ(Гτ)ʮ
̡), a limited liability company incorporated under the
law of the PRC on December 19, 2023, and an indirect
wholly-owned subsidiary of our Company
“EUR” Euro, the lawful currency of 20 of the 27 member states
of the European Union
“EuroItalia” EuroItalia S.R.L., a limited liability company
incorporated under the laws of Italy
“Excellent Fareast” Excellent Fareast Limited (ʮ̡), a limited
liability company incorporated under the laws of Hong
Kong on October 22, 1996, and an indirect wholly-owned
subsidiary of our Company
“Extreme Conditions” the occurrence of “extreme conditions” as announced by
any government authority of Hong Kong 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” 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 listing of
securities
“Frost & Sullivan” Frost & Sullivan Limited, a market research and
consulting company, which is an Independent Third Party
“Frost & Sullivan Report” an independent market research report commissioned and
prepared by Frost & Sullivan for the purpose of this
prospectus, as referred to in the section headed “Industry
Overview” in this prospectus
DEFINITIONS
–3 2–


--- page 43 ---
“General Administration of
Customs”
General Administration of Customs of the PRC ( ʕശɛ
͏΍ձ਷ऎᗫᐼ໇)
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Governmental Authority” any governmental, regulatory, or administrative
commission, board, body, authority, or agency, or any
stock exchange, self-regulatory organization, or other
non-governmental regulatory authority, or any court,
judicial body, tribunal, or arbitrator, in each case whether
national, central, federal, provincial, state, regional,
municipal, local, domestic, foreign, or supranational
“Group”, “our Group”, “the
Group”, “our”, “we” or “us”
our Company and its subsidiaries from time to time, and
where the context requires, in respect of the period prior
to our Company becoming the holding company of its
present subsidiaries, such subsidiaries as if they were
subsidiaries of our Company at the relevant time
“Guangzhou Consulting” Guangzhou Eternal Business Consulting Co., Ltd* ( ᄿψ
ʮ̡), a limited liability company
incorporated under the law of the PRC on January 24,
2019, and an indirect wholly-owned subsidiary of our
Company
“Guangzhou Eternal Import
and Export”
Guangzhou Eternal Import and Export Co., Ltd*
(ʮ̡), a limited liability company
incorporated under the law of the PRC on September 27,
2024, and an indirect wholly-owned subsidiary of our
Company
“Guangzhou Huisheng Trading” Guangzhou Huisheng Trading Co., Ltd* (׸
ʮ̡), a limited liability company incorporated
under the law of the PRC on October 15, 2014, 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, submitted online through
the designated website at 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
–3 3–


--- page 44 ---
“HK Legal Counsel” Ms. Queenie W.S. Ng, barrister-at-law in Hong Kong
“HKFRS” Hong Kong Financial Report Standards, as issued by
HKICPA
“HKICPA” Hong Kong Institute of Certified Public Accountants
“HKSCC” Hong Kong Securities Clearing Company Limited
“HKSCC EIPO channel” the arrangement in these HKSCC Operational Procedures
for instructions to be given electronically to HKSCC by
Participants via FINI for applications to be made on their
behalf for new issue shares and for the payment of
application moneys, and for those instructions to be acted
upon
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary
of HKSCC
“HKSCC Operational
Procedures”
the operational procedures of the HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of the systems established,
operated and/or otherwise provided by or through
HKSCC (including FINI and CCASS) as from time to
t i m ei nf o r c e
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong dollars” or “HKD”
or “HK$” and “cents”
Hong Kong dollars and cents, respectively, the lawful
currency of Hong Kong
“Hong Kong Public Offering” the offer for subscription of the Hong Kong Offer Shares
to the public in Hong Kong at the Offer Price, subject to
and in accordance with the terms and conditions set out in
this prospectus
DEFINITIONS
–3 4–


--- page 45 ---
“Hong Kong Public Offer
Shares”
the 33,340,000 Shares (subject to reallocation as
described in the section headed “Structure of the Global
Offering”) being offered by us for subscription under the
Hong Kong Public Offering
“Hong Kong Securities and
Futures Ordinance” or “SFO”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Hong Kong Share Registrar” Tricor Investor Services Limited
“Hong Kong Takeovers Code” or
“Takeovers Code”
The Codes on Takeovers and Mergers and Share
Repurchases issued by the SFC, as amended,
supplemented or otherwise modified from time to time
“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 relating to the Hong Kong
Public Offering entered into by, among others, our
Company, the Controlling Shareholders, the Selling
Shareholder, the Joint Sponsors and the Overall
Coordinators (for themselves and on behalf of the Hong
Kong Underwriters), as further described in
“Underwriting — Underwriting Arrangements and
Expenses — Hong Kong Public Offering — Hong Kong
Underwriting Agreement” in this prospectus
“Independent Third Party(ies)” party(ies) which is/are independent of and not a
connected person (within the meaning of the Listing
Rules) of our Group
“Independent Transfer Pricing
Consultant”
PricewaterhouseCoopers Consultants (Shenzhen)
Limited, Beijing Branch ( ౷ശ͑༸ፔ༔(ଉέ)ʮ̡
̏ԯʱʮ̡), our adviser as to transfer pricing
arrangements
DEFINITIONS
–3 5–


--- page 46 ---
“International Offer Shares” the 300,060,000 Shares together with, where relevant,
any additional Shares which may be issued by us
pursuant to the exercise of the Over-allotment Option,
subject to reallocation
“International Offering” the conditional placing of the International Offer Shares
at the Offer Price outside the United States in offshore
transactions in accordance with Regulation S in each case
on and subject to the terms and conditions of the
International Underwriting Agreement, or any other
available exemption from the registration requirements
under the U.S. Securities Act, as further described in
“Structure of the Global Offering” in this prospectus
“International Underwriters” the underwriters of the International Offering
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering which is expected to be entered into by, among
others, our Company, the Controlling Shareholders, the
Selling Shareholder, the Joint Global Coordinators, Joint
Lead Managers, Joint Bookrunners and the International
Underwriters on or around June 24, 2025, as further
described in “Underwriting — Underwriting
Arrangements and Expenses — International Offering” in
this prospectus
“InterParfums” Interparfums, Inc., a limited liability company
incorporated under the laws of the U.S., and its
subsidiaries
“Joint Bookrunners” the joint bookrunners as named in the section headed
“Directors and Parties Involved in the Global Offering”
in this prospectus
“Joint Global Coordinators” the joint global coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus
“Joint Lead Managers” the joint lead managers as named in the section headed
“Directors and Parties Involved in the Global Offering”
in this prospectus
DEFINITIONS
–3 6–


--- page 47 ---
“Joint Sponsors” the joint sponsors as named in the section headed
“Directors and Parties Involved in the Global Offering”
in this prospectus
“Latest Practicable Date” June 10, 2025, being the latest practicable date for
ascertaining certain information in this prospectus before
its publication
“Laws” all laws, statutes, legislation, ordinances, rules,
regulations, guidelines, opinions, notices, circulars,
orders, judgments, decrees, or rulings of any
Governmental Authority (including, without limitation,
the Stock Exchange and the SFC) of all relevant
jurisdictions
“Listing” the listing of the Shares on the Main Board
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or about Thursday, June 26,
2025, on which our Shares will be listed on the Main
Board
“Listing Rules” The Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Macau Legal Advisor” Jorge Neto V alente — Lawyers & Notaries, our legal
advisor as to Macau Law in respect of data compliance
“Main Board” the stock exchange (excluding the option market)
operated by the Stock Exchange which is independent
from and operated in parallel with the GEM of the Stock
Exchange. For the avoidance of doubt, the Main Board
excludes the GEM of the Stock Exchange
“Major Brands” The top 10 brands in our portfolio in terms of revenue
from the sales of goods for each year during the Track
Record Period, which were sourced from nine brand
licensors
“Memorandum of Association” or
“Memorandum”
the amended and restated memorandum of association of
our Company adopted on June 6, 2025, as amended from
time to time
DEFINITIONS
–3 7–


--- page 48 ---
“Ministry of Finance” or “MOF” the Ministry of Finance of the PRC (݁
௅)
“Ministry of Industry and
Information Technology”
the Ministry of Industry and Information Technology of
the PRC (ʷ௅)
“MOFCOM” the Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷
ਠਕ௅)
“Moral Happiness” Moral Happiness Limited (ʮ̡), a limited
liability company incorporated under the laws of Hong
Kong on October 1, 2021, and an indirect wholly-owned
subsidiary of our Company
“Mr. Chu” Mr. Chu Wai Tsun, Baggio ( ϡၪཷ), an executive
Director and chief financial officer of the Group
“Mr. Lau” Mr. Lau Kui Wing ( ᄎམ࿲), an executive Director,
chairman of the Board, and a Controlling Shareholder. He
is the father of Ms. Lau
“Mrs. Lau” Ms. Chan Wai Chun (ޜthe spouse of Mr. Lau and
the mother of Ms. Lau
“Ms. Lam” Ms. Lam King (ঠ), an executive Director and chief
executive officer of the Group
“Ms. Lau” Ms. Lau Wing Yin ( ᄎ㣤ሬ), an executive Director and
the daughter of Mr. Lau
“National People’s Congress” or
“NPC”
the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
“Nomination Committee” the nomination committee of the Board
“OAO New Shares” the Share(s) to be offered for subscription by our
Company pursuant to the Over-allotment Option
“OAO Sale Shares” the Share(s) to be offered for sale by the Selling
Shareholder pursuant to the Over-allotment Option
DEFINITIONS
–3 8–


--- page 49 ---
“Offer Price” the final Hong Kong dollar price per Offer Share
(exclusive of brokerage, SFC transaction levy, AFRC
transaction levy and Stock Exchange trading fee) at
which the Hong Kong Public Offer Shares are to be
subscribed under the Hong Kong Public Offering and the
International Offer Shares are to be offered under the
International Offering, to be determined in the manner
further described in the section headed “Structure of the
Global Offering” in this prospectus by our Company and
the Sponsor-Overall Coordinators (on behalf of the
Underwriters) on or before the Price Determination Date
“Offer Shares” the Hong Kong Public Offer Shares and the International
Offer Shares
“Overall Coordinator(s)” the overall coordinators as named in the section headed
“Directors and Parties Involved in the Global Offering”
in this prospectus
“Over-allotment Option” the option expected to be granted by each of us and the
Selling Shareholder to the International Underwriters,
exercisable by the Sponsor-Overall Coordinators (for
themselves and on behalf of the International
Underwriters) under the International Underwriting
Agreement, pursuant to which we may be required to
issue up to 15,350,000 OAO New Shares at the final
Offer Price, and the Selling Shareholder may be required
to sell up to 34,660,000 OAO Sale Shares at the final
Offer Price, representing an aggregate of 50,010,000
additional Offer Shares and 15% of the initial size of the
Global Offering, to, among other things, cover over-
allocations in the International Offering as described in
the section headed “Structure of the Global Offering” in
this prospectus
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ)
“PRC government” the government of the PRC, including all governmental
sub-divisions (such as provincial, municipal and other
regional or local government entities)
“PRC Legal Advisor” or “PRC
Data Compliance Advisor”
Beijing Jingtian & Gongcheng Law Firm, our legal
advisor as to PRC Laws, including, among others, PRC
laws and regulations with respect to cybersecurity and
data protection
DEFINITIONS
–3 9–


--- page 50 ---
“Pre-IPO Share Option Scheme” the share option scheme adopted and approved by the
then Shareholders on June 18, 2024, the principal terms
of which are summarized in the section headed “Pre-IPO
Share Option Scheme” in Appendix IV to this prospectus
“Price Determination Agreement” the agreement to be entered into between our Company
(for ourselves and on behalf of the Selling Shareholder)
and the Sponsor-Overall Coordinators (for themselves
and on behalf of the Underwriters) on the Price
Determination Date to record the Offer Price
“Price Determination Date” the date, expected to be on or around Tuesday, June 24,
2025 and, in any event, not later than 12:00 noon on
Tuesday, June 24, 2025, on which the Offer Price is to be
fixed by agreement between our Company (for ourselves
and on behalf of the Selling Shareholder) and the
Sponsor-Overall Coordinators (for themselves and on
behalf of the Underwriters) to determine the Offer Price
“Prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“Province” a province or, where the context requires, a provincial
level autonomous region or municipality, under the direct
supervision of the central government of the PRC
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration Committee” the remuneration committee of the Board
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Selling Shareholder” Eternal International
“SFC” the Securities and Futures Commission of Hong Kong
“Shanghai Eternal Brand
Management”
Shanghai Eternal Brand Management Co., Ltd. ( ɪ
ʮ̡), a limited liability company
incorporated under the law of the PRC on February 29,
2024, and an indirect wholly-owned subsidiary of our
Company
DEFINITIONS
–4 0–


--- page 51 ---
“Shanghai Eternal Import and
Export”
Shanghai Eternal Import and Export Co., Ltd. ( ɪ
ʮ̡), a limited liability company
incorporated under the law of the PRC on March 14,
2024, and an indirect wholly-owned subsidiary of our
Company
“Shanghai Eternal Trading” Shanghai Eternal Trading Co., Ltd. (ʮ
̡), a limited liability company incorporated under the
law of the PRC on February 28, 2024, and an indirect
wholly-owned subsidiary of our Company
“Shanghai Smiley” Shanghai Smiley Beauty Cosmetics Limited* ( ɪऎฆ३
ʮ̡), a limited liability company
incorporated under the law of the PRC on May 3, 2020,
and an indirect wholly-owned subsidiary of our Company
“Shanghai Yierpai Advertising” Shanghai Yierpai Advertising Ltd* (ࠢ
ʮ̡), a limited liability company incorporated under the
law of the PRC on December 1, 2021, and an indirect
wholly-owned subsidiary of our Company
“Shanghai Y ongxin Trading” Shanghai Y ongxin Trading Co., Ltd* (ࠢ
ʮ̡), a limited liability company incorporated under the
law of the PRC on March 12, 2013, and an indirect
wholly-owned subsidiary of our Company
“Shanghai Zhuangwei
Advertising”
Shanghai Zhuangwei Advertising Ltd* ( ɪऎѱբᄿѓϞ
ʮ̡), a limited liability company incorporated under
the law of the PRC on December 1, 2021, and an indirect
wholly-owned subsidiary of our Company
“Share(s)” ordinary share(s) with a nominal value of HK$0.001 each
in the share capital of our Company
“Share Option Scheme” the share option scheme conditionally adopted and
approved by our Shareholders on June 6, 2025 and which
shall take effect from the Listing Date, the principal
terms of which are summarized in the section headed
“Share Option Scheme” in Appendix IV to this
prospectus
“Shareholder(s)” holder(s) of the Share(s)
DEFINITIONS
–4 1–


--- page 52 ---
“Sponsor-Overall Coordinators” the Sponsor-Overall Coordinators named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus
“Stabilization Manager” BNP Paribas Securities (Asia) Limited
“State Administration for
Industry and Commerce” or
“SAIC”
the State Administration for Industry and Commerce of
the PRC (၍ଣᐼ҅)
“State Administration for Market
Regulation” or “SAMR”
the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅), formerly
known as the SAIC
“State Administration of Foreign
Exchange” or “SAFE”
the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“State Administration of
Taxation” or “SA T”
the State Taxation Administration of the PRC ( ʕശɛ͏
೼ਕᐼ҅)
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“State Environmental Protection
Administration”
the Ministry of Ecology and Environment of the PRC ( ʕ
ശɛ͏΍ձ਷͛࿒ᐑྤ௅)
“Stock Borrowing Agreement” the stock borrowing agreement expected to be entered
into between the Stabilization Manager and Eternal
International on or around the Price Determination Date
“Stock Exchange” or “Hong
Kong Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
“Talent Crown” Talent Crown Limited (ʮ̡), a limited liability
company incorporated under the laws of Hong Kong on
October 8, 2021, and an indirect wholly-owned
subsidiary of our Company
“Track Record Period” the three financial years ended March 31, 2023, 2024 and
2025
DEFINITIONS
–4 2–


--- page 53 ---
“U.S. dollars”, “USD”
or “US$”
United States dollars, the lawful currency of the United
States
“U.S. persons” U.S. persons as defined in Regulation S
“U.S. Securities Act” the U.S. Securities Act of 1933, as amended
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“United States” or “U.S.” The United States of America, its territories, its
possessions and all areas subject to its jurisdiction
“V A T” value added tax
“%” Percent
DEFINITIONS
–4 3–


--- page 54 ---
This glossary of technical terms contains explanations of certain terms used in
this prospectus as they relate to our Company and as they are used in this prospectus
in connection with our business or us. These terms and their given meanings may not
correspond to standard industry definitions.
“beauty advisor” a trained professional in offline channels who offers
personalized guidance and recommendations to
consumers on cosmetics products, skincare routines and
beauty techniques to meet personalized beauty needs and
preferences
“brand licensor” an entity that holds the proprietary rights to a brand’s
intellectual property, and licenses it to other businesses or
individuals, allowing them to use the brand’s intellectual
property for specified commercial purposes
“brand-owner perfume group(s)” the company(ies) which operate perfume brand
businesses, with a majority of the revenue generated from
the products of the brands owned by them. In addition,
they take lead in the involvements of (i) brand
positioning and formulation of marketing strategy, (ii)
research and development, (iii) manufacturing, and (iv)
authorization for the utilization of its brand rights
“CRM” namely, customer relationship management, a consumer
management system that employs technology to track,
analyze and enhance interactions with customers at every
touchpoint, aiming to improve customer loyalty,
satisfaction and retention
“direct sales channels” our self-operated online stores and offline stores and
counters at which we sell products directly to consumers
“distribution channels” the channels where the products procured from us are
sold by our online distributors and offline distributors,
which purchase such products from us and then primarily
resell them to online retailers and offline retailers,
respectively
“first tier cities” first-tier cities include Beijing, Shanghai, Guangzhou and
Shenzhen in the PRC
GLOSSARY OF TECHNICAL TERMS
–4 4–


--- page 55 ---
“KOL(s)” an individual with substantial influence, expertise and
credibility in specific industry sector
“lower tier cities” lower tier cities refer to the rest of the cities other than
first tier cities and second tier cities
“ml” milliliter, a unit of measurement for containers equal to
0.001 litres
“new first tier cities” new first tier cities (̹) include Chengdu,
Hangzhou, Chongqing, Suzhou, Wuhan, Xi’an, Nanjing,
Changsha, Tianjin, Zhengzhou, Dongguan, Kunming,
Ningbo, Qingdao and Hefei
“non-brand-owner perfume
group(s)”
the company(ies) which operate perfume brand
businesses, with a majority of the revenue generated from
the external brands that are licensed or sub-licensed by
third parties. They primarily engage in the (i) sales and
distribution of products of external brands; and (ii)
market deployment for such external brands
“OEM” original equipment manufacturing, where a manufacturer
manufactures a product in accordance with the
customer’s design and specifications and is marketed and
sold under the customer’s brand name or under no
specific brand
“ODM” original design manufacturing, where a manufacturer
designs and manufactures a product which is specified by
the customer and eventually marketed and sold under the
customer’s brand name or under no specific brand
“POS” point of sale, a time and place at which a retail
transaction is completed
“perfume group(s)” the company(ies) which operate perfume brand
businesses, including brand-owner perfume group(s) and
non-brand-owner perfume group(s)
“retailer channels” the channels where the products procured from us are
sold to consumers by our online retailers and offline
retailers, which purchase such products from us and
subsequently sell them directly to consumers through
online platforms or offline points of sales, respectively
GLOSSARY OF TECHNICAL TERMS
–4 5–


--- page 56 ---
“SAP” systems, applications and products, one of our
information technology systems
“second tier cities” second-tier cities include Foshan, Shenyang, Wuxi, Jinan,
Xiamen, Fuzhou, Wenzhou, Changzhou, Dalian,
Shijiazhuang, Nanning, Harbin, Jinhua, Nanchang,
Changchun, Nantong, Quanzhou, Guiyang, Jiaxing,
Taiyuan, Huizhou, Xuzhou, Shaoxing, Zhongshan,
Taizhou, Y antai, Zhuhai, Baoding, Weifang and Linyi
“SKU” stock keeping unit(s), to help identify and track
inventories
“sq.m.” square meter, a unit of area measurement
“young consumers” mainly include individuals of Generation Z and
millennials
GLOSSARY OF TECHNICAL TERMS
–4 6–


--- page 57 ---
This prospectus contains certain forward-looking statements and information relating to
us 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 “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “going forward”,
“intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would”, “wish” and
similar expressions, as they relate to our Company or our management, are intended to identify
forward-looking statements. Such statements reflect the current views of our Company’s
management with respect to future events, operations, liquidity and capital resources, some of
which may not materialize or may change. These forward-looking statements are subject to
certain risks, uncertainties and assumptions, including the other risk factors as described in this
prospectus. Although we believe that our expectations expressed in these forward-looking
statements are reasonable, our expectations may later be found to be incorrect. Our actual
results could be materially different from our expectations. Important risks and factors that
could cause our actual results to be materially different from our expectations are generally set
forth in “Risk Factors”, “Business”, “Financial Information” and other sections in this
prospectus. Y ou should read thoroughly this prospectus with the understanding that our actual
future results may be materially different from and worse than what we expect.
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
that could affect the accuracy of forward-looking statements include, but are not limited to, the
following:
 our business strategies, plans, objectives and goals and our ability to implement such
strategies, plans, objectives and goals;
 our business operations and prospects;
 our future business development, financial conditions and results of operations;
 the expected growth of the cosmetics (including perfumes, skincare products, color
cosmetics and personal care products), eyewear and home fragrances industries and
the markets in which we operate;
 our expectations regarding demand for the products we sell;
 changes to regulatory and operating conditions in the industry and markets in which
we operate;
 the future developments and competitive environment in the industries where we
operate;
 our ability to control costs;
FORW ARD-LOOKING STATEMENTS
–4 7–


--- page 58 ---
 our ability to stay in compliance with laws and regulations that currently apply or
become applicable to our business both in China (including Hong Kong and Macau)
and internationally;
 our future debt levels and capital needs;
 intellectual property;
 certain statements in “Business” and “Financial Information” with respect to trends
in prices, operations, margins, overall market trends, and risk management;
 the actions and developments of our competitors;
 capital market development;
 other statements in this prospectus that are not historical facts; and
 all other risks and uncertainties described in the section headed “Risk Factors” in
this prospectus.
Since actual results or outcomes could differ materially from those expressed in any
forward-looking statements, we strongly caution investors against placing undue reliance on
any such forward-looking statements. Any forward-looking statement speaks only as of the
date on which such statement is made, and, except as required by the Listing Rules, we
undertake no responsibility to update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement is made or to reflect the
occurrence of any subsequent unanticipated event. Statements of or references to our intentions
or those of any of our Directors are made as of the date of this prospectus. Any such intentions
may change in light of future developments.
All forward-looking statements in this prospectus are expressly qualified by reference to
this cautionary statement.
FORW ARD-LOOKING STATEMENTS
–4 8–


--- page 59 ---
An investment in our Shares involves significant risks. Y ou should carefully
consider all of the information in this prospectus, including the risks and uncertainties
described below, before making an investment in our Shares. The following is a
description of what we consider to be our material risks. Any of the following risks
could materially and adversely affect our business, financial condition and results of
operations. The market price of our Shares could significantly decrease due to any of
these risks, and you may lose all or part of your investment.
These factors are contingencies that may or may not occur, and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date, unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in
“Forward-looking Statements” in this prospectus.
We believe that there are certain risks involved in our operations, some of which are
beyond our control. We have categorized these risks and uncertainties into: (i) risks relating to
our business and industry; (ii) risks relating to doing business in regions where we operate; and
(iii) risks relating to the Global Offering.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our business depends heavily on the strength and reputation of the brands for which we
conduct product distribution and market deployment, and consumers’ recognition and
their trust in the products we promote and sell may be materially and adversely affected
if we fail to maintain and enhance the recognition and reputation of such brands.
We rely heavily on the strength and reputation of the brands for which we conduct product
distribution and market deployment and our ability to promote and sell their products, such as
perfumes, skincare products, color cosmetics, personal care products, eyewear and home
fragrances. We believe that the recognition of the brand licensors on our ability to effectively
conduct product distribution and market deployment for their brands and the recognition of our
customers on our brand and product portfolios have contributed to our success in the industries
where we operate. However, the reputation of the brands for which we conduct product
distribution and market deployment may be harmed by, among others, product defects,
ineffective customer services, product liability claims, consumer complaints, intellectual
property infringement or negative publicity or media reports. Any (i) negative claim against the
brands for which we conduct product distribution and market deployment, our brand licensors
or us, even if meritless or unsuccessful, (ii) negative publicity against the brands for which we
conduct product distribution and market deployment, our brand licensors or us, or (iii) negative
publicity resulting from counterfeiting and imitation of the products we sell by external parties,
malicious competition on the product prices and sales of the products by distributors through
illegal distribution channels, among others, even if unfounded or immaterial to our operations,
could damage our reputation, undermine the confidence of the brand licensors, our customers
RISK FACTORS
–4 9–


--- page 60 ---
and consumers in us, and divert our management’s attention and other resources from
day-to-day business operation, which may materially and adversely affect our business,
financial condition and results of operations. Furthermore, negative media coverage regarding
the brand ambassadors or KOLs we cooperate with, or quality, price-level or safety of the
products we sell and the brands for which we conduct product distribution and market
deployment in China (including Hong Kong and Macau) and beyond, and the resulting negative
publicity, may undermine the level of consumer confidence in, us, the brands and the products
we promote and sell, which could damage our reputation and business prospects.
We operate in a highly competitive industry. If we fail to compete effectively, our business
and operating results could be adversely affected.
During the Track Record Period, we primarily competed with external brand owners
(excluding the brand-owner perfume groups for which we conduct product distribution and
market deployment) and non-brand-owner perfume groups, as a majority of our revenue was
generated from the sales of perfumes. In particular, as the external brands of perfumes for
which we conduct product distribution and market deployment were primarily international
brands as of the Latest Practicable Date, we face competition from the Chinese domestic brands
of perfumes targeting similar consumer groups, which may have enjoyed certain competitive
advantages over international brands.
Some of our existing competitors are large publicly traded companies, or are divisions of
large publicly traded companies, especially foreign competitors, and may enjoy several
competitive advantages over us, including, but not limited to, better brand recognition, more
financial resources, longer operating history, broader product portfolio, wider sales and
distribution channels and larger consumer base. We cannot assure you that we will be
successful in the face of increasing competition from the other brand owners or non-brand-
owner perfume groups or new players entering into our markets. Any failure by us to compete
effectively against our competitors and maintain and expand our consumer base could
materially and adversely affect our business, financial condition and results of operations.
We maintain brand and product portfolios that cover perfumes, skincare products, color
cosmetics, personal care products, eyewear, home fragrances, and sell and distribute the
relevant products in China (including Hong Kong and Macau). Although we strive to minimize
the impact of parallel imports, if a significant number of our customers turn to parallel imports
or counterfeit products of the brands for which we conduct product distribution and market
deployment, we may not be able to effectively compete against these parallel imports or
counterfeit products as their prices could be lower than those of the products sold by us, and
therefore, our sales could suffer. Incidents of parallel imports and counterfeit products could
also affect the value and image of the brands for which we conduct product distribution and
market deployment and result in a loss of customer and consumer confidence in the products
we offer and, as a result, adversely affecting our business, financial condition, results of
operation and prospects. For instance, if the parallel imports and counterfeit products bearing
the brand names operated by us appear to be damaged, used or otherwise below the expectation
of the consumers, the reputation of the relevant brands for which we conduct product
RISK FACTORS
–5 0–


--- page 61 ---
distribution and market deployment may be harmed. In the event that we are not able to
effectively control the parallel imports and counterfeits, there could be a loss of sales, which
could materially and adversely affect our business, reputation and prospects.
We depend on brand licensors, including brand owners and their primary licensees, to
grow our business. If we fail to maintain good business relationships with our major
brand licensors, our business and operating results could be adversely affected.
The initial terms of most of our agreements with the brand licensors range from three to
five years, which may be terminated by the brand licensors with prior written notice. The
renewal of our agreements with the brand licensors are generally subject to mutual consent. In
addition, as our business evolves in response to the ever-changing market conditions, we may
find the current arrangements with the brand licensors inadequate to address such changes and
may need to modify or adjust the terms of the arrangements with them, which would require
their consent. Further, we cannot assure you that the terms of our agreements with the brand
licensors would be favorable to us. Our business could be materially and adversely affected if
there are any material changes to the terms of our cooperation with brand licensors, which
could in turn materially and adversely affect our business, financial condition, results of
operations and prospects.
In addition to cooperating with the brand owners directly, we promote and sell some of
the products in our portfolio under the sub-licenses obtained from the primary licensees, which
are licensed by the relevant brand owners to such primary licensees to produce, market and
distribute their products. If these primary licensees fail to secure the business relationships
with the relevant brand owners, or otherwise lose their relevant licenses, we may need to
replace the brands and products under these sub-licenses, or obtain licenses directly from the
relevant brand owners instead. We may not be able to do so in a timely manner or at all. As
a result, our business, financial condition, results of operations and prospects could be
materially and adversely affected.
The disintermediation of the existing business relationships with our major brand
licensors could adversely affect our business, financial condition, operating results,
reputation and prospects.
We cannot assure you that the brand licensors with whom we have been cooperating or
intend to continue to cooperate will not terminate their existing agreements with us, agree to
renew the agreements with us, or consent to the changes to the existing arrangements. In
December 2022, the distribution agreement with a major brand licensor of a major luxury brand
expired and was not renewed, which contributed RMB424.7 million, or approximately 25.5%,
to our total revenue for the year ended March 31, 2023, primarily because this brand licensor
decided to operate the brand in mainland China by itself. If we are unable to secure stable and
long-term cooperation with the brand licensors from whom we source the products at present
or in the future, the supply of products from them may be disrupted. We may also be exposed
RISK FACTORS
–5 1–


--- page 62 ---
to litigation risks as a result of any disagreements between us and the brand licensors that may
arise in connection with such disintermediation. If any of the foregoing occurs, our business,
financial condition, results of operations, reputation and prospects would be materially and
adversely affected.
The size of the existing markets for the products we sell may be smaller than estimated
and new market opportunities may not develop as quickly as we expect, or at all, limiting
our ability to successfully sell the products.
Certain markets that we currently serve or expect to expand into in the future are
evolving, making it difficult to predict with any accuracy the sizes of the markets for the
products we sell currently and in the future. Our estimates of the annual total addressable
market for the products we sell currently and in the future are based on a number of internal
and third-party estimates and assumptions. While we believe our assumptions and the data
underlying our estimates of the total addressable market for the products we promote and sell
are reasonable, these assumptions and estimates may not be accurate and the conditions
supporting our assumptions or estimates, or those underlying the third-party data we have used,
may change at any time, thereby reducing the accuracy of our estimates. In addition, our
growth strategy involves launching new products and expanding into new markets in which we
have limited or no prior experience. Selling new products in existing markets or introducing
existing products in new markets may be time consuming to mature, and we cannot be certain
that these market opportunities will develop as we expect. As a result, our estimates of the total
addressable market for the products we sell may be overstated.
The future growth of the market for the products we sell currently and in the future
depends on a number of factors that are beyond our control, including, among others, the
recognition and acceptance of the products by our customers and consumers, and the growth,
prevalence and costs of competing products. Such recognition and acceptance may not occur
in the near term, or at all. If the markets for the products we sell currently or in the future are
smaller than estimated or do not develop as we anticipated, our growth may be limited and our
business, financial condition and results of operations may be adversely affected.
Our sales and marketing strategies may not be able to adapt to the changes in the market
trends and consumer preferences in a timely manner, and our marketing activities may
not be cost-effective in attracting consumers. If any of the foregoing occurs, our business,
financial condition and results of operations could be harmed.
The success of our business and operations depends on our ability to continuously offer
quality products that are attractive to consumers. The industries where we operate are driven
in part by fashion and beauty trends, technologies and consumer preferences and behavior,
which may shift quickly and have been heavily affected by the rapidly increasing use and
proliferation of social and digital media by consumers, and the speed with which information
and opinions are shared. As industry trends, technologies and consumers’ preferences and
behavior continue to evolve, we must also introduce new products, maintain and enhance the
recognition of the brands for which we conduct product distribution and market deployment,
RISK FACTORS
–5 2–


--- page 63 ---
achieve a favorable mix of products and expand our sales and distribution network. Therefore,
our future growth depends on our ability to continuously introduce new brands and products.
We have continuously devoted our efforts to launching new brands and products in order to not
only adapt to the evolving consumer preferences, but also influence market trends. Introduction
of new brands or products and entry into new product categories involve inherent risks, such
as those relating to incorrect judgements regarding consumer preferences, market demand and
new brand images and pricing. Failure to successfully diversify our brand and product
portfolios to adapt to the constantly changing consumer preferences and market trends may
cause our profit margin to decrease as we will not be able to recoup the associated costs, may
jeopardize our competitive advantages and market share, and may result in continued reliance
on our existing brand and product portfolios. Any of these events could materially and
adversely affect our business, financial condition, results of operations and prospects.
Our success also partially depends on the products’ appeal to a broad range of consumers
whose preferences and behavior cannot be predicted with certainty and may shift rapidly, and
on our ability to anticipate and respond to evolving industry trends and consumer preferences
and behavior in a timely and cost-effective manner through marketing and promotional
activities, and product selection and diversification, among other things. We cannot assure you
that we will be able to successfully anticipate and respond to evolving industry trends and
consumer preferences and behavior at all times, especially as we continue to broaden our
consumer base and diversify our product offerings aimed at consumers with differing
characteristics and preferences. In addition, our sales and marketing strategies may not be
applicable to new brands that we may launch in the future. In such events, we may need to
implement new sales and marketing strategies, which may not be effective. If our sales and
marketing strategies are unable to accurately anticipate and respond to market changes and
consumer preferences and behaviors, we may fail to continuously develop products with wide
market acceptance, capture emerging growth opportunities, adopt competitive sales strategies
for the existing products we sell, or properly predict and manage our inventory. Such failure
could also negatively affect the image of the brands for which we conduct product distribution
and market deployment and result in diminished customer experience and loyalty. If any of
these foregoing instances occur, our business, financial condition and results of operations
could be materially and adversely affected.
Our marketing activities may not be well received, successful or cost-effective, which
may lead to significantly higher marketing expenses in the future. We may also not be able to
continue our existing marketing activities, or successfully identify and utilize new trends in our
marketing strategies, channels and approaches that appeal to our targeted consumers. We may
also fail to adjust our sales and marketing strategies in a timely manner to stay abreast of the
evolving consumer behavior in using internet and mobile devices. Failure to refine our existing
marketing strategies or introduce new effective marketing strategies in a cost-effective manner
could negatively affect our business, financial condition and results of operation.
RISK FACTORS
–5 3–


--- page 64 ---
During the Track Record Period, we engaged a number of KOLs to promote the products
we sell. We cannot assure you that we will be able to find suitable KOLs to work with or
continue to maintain our business relationships with our existing KOLs to promote the products
we sell. We also cannot guarantee that our marketing strategy in relation to KOLs will be
successful or effective in the future as the industry may be affected by factors that are beyond
our control, such as tightening regulations or alternative promotion methods.
If the online platforms we rely on to promote and sell the products are interrupted or
disrupted for any reason or if our cooperation with such online platforms deteriorates or
becomes more costly to maintain or is otherwise terminated for any reason, or if there is
any change in the behavior patterns of online consumers, our business and results of
operations may be materially and adversely affected.
During the Track Record Period, our online sales were primarily made to (i) online
retailers, which procure products from us and sell them to consumers through online platforms;
(ii) online distributors, which procure products from us and primarily sell them to online
retailers; and (iii) consumers through our self-operated online stores on online platforms. For
the years ended March 31, 2023, 2024 and 2025, our revenue generated from the sales to online
retailers, online distributors and consumers through our self-operated online stores in
aggregate accounted for approximately 43.3%, 36.0% and 36.3% of our total revenue,
respectively.
If (i) the services or operations of the relevant online platforms are interrupted due to,
among other things, discontinuation of the platform operation or change of the platform’s
business strategies which prevents us from continuing to use their services; (ii) the relevant
online platforms fail to provide satisfactory consumer experience and fail to attract new and
retain existing users; (iii) our cooperation with such platforms terminates, deteriorates or
becomes more costly; (iv) we fail to incentivize such platforms to drive traffic to the relevant
online stores or promote the sale of the products; (v) we fail to respond to the changes in
internet and mobile penetration, as well as the online marketing industry in China (including
Hong Kong and Macau); (vi) we fail to respond to the changes of how KOLs influence the
consumer preferences; or (vii) the relevant network infrastructure, such as online or mobile
payment platforms, becomes unavailable for any reason, our business and results of operations
may be materially and adversely affected. We cannot guarantee that we will be able to find
alternative channels on terms and conditions commercially acceptable to us in a timely manner,
or at all, especially in respect of the online platforms with leading position and significant
influence in e-commerce industry of China (including Hong Kong and Macau). In addition, any
negative publicity about such third-party online platforms, or any public perception or claims
that non-authentic, counterfeit or defective goods are sold on such platforms, be it with merit
or proven or not, most of which are beyond our control, may deter visits to the platforms and
result in less user traffic to the relevant online stores or fewer sales of the products, which may
negatively affect our business, financial condition and results of operation.
RISK FACTORS
–5 4–


--- page 65 ---
Moreover, we cannot assure you that we can stay abreast of the constantly changing
consumer behavioral patterns and preferences or anticipate product trends that will appeal to
existing and potential online customers. Accordingly, a decline in the popularity of online
shopping in general or our failure to identify and respond to evolving trends and consumer
requirements in the online channels could result in a decreased number of online customers
who purchase products from us. This in turn could materially and adversely affect our business,
financial condition, results of operations and prospects.
Disruptions to supply chain, transportation and logistics could harm our business.
During the Track Record Period, we primarily procure products from brand licensors.
These suppliers are required to comply with various and extensive production, health, hygiene,
safety, labor, export control and other export- and import-related laws and regulations
promulgated by the relevant government authorities in the countries and regions where they
operate. In the event that they are found to be in breach of the relevant regulations, their supply
to us may be affected. Their supply of products may also be affected by, among others,
shortages of the relevant materials or interruptions in the global and local transportation
systems, labor strikes or shortages, work stoppages, wars, acts of terrorism or other
interruptions to or difficulties in the employment of labor or transportation. Furthermore, in the
event of a dispute with any supplier, the transportation and delivery of a significant amount of
products we purchased may be delayed or canceled, or we may be forced to adjust our
procurement plans and business plans. Such events could cause our revenue to fall and costs
to increase, thus, materially and adversely affecting our business, financial condition and
results of operations.
During the Track Record Period, a substantial amount of the products we sold were
imported from foreign countries, which were subject to unexpected disruptions to international
transportation and customs requirements, tariffs, inspection and quarantine set by the
governments under applicable laws and regulations. There could be adverse changes in these
trading restrictions, and failure to comply with customs regulations or other applicable laws
and regulations could delay the transportation and delivery of these products we sourced from
our suppliers. Any of these events could affect our ability to procure the products from
suppliers and deliver them to our customers in a timely manner. In addition, our ability to
procure products from different countries and jurisdictions in a timely and cost-effective
manner may be affected by the conditions at ports or issues that otherwise affect transportation
and warehousing providers, including, among others, port and shipping capacity shortage,
labor disputes and severe weather. These issues could delay cross-border delivery of products
or require us to locate alternative ports or warehousing providers to avoid disruption of
delivery of products to customers. These alternatives may not be available on short notice or
could result in substantially high transit costs. Therefore, our business, financial condition and
results of operations could be materially and adversely affected.
RISK FACTORS
–5 5–


--- page 66 ---
Our control over our distributors could be limited.
During the Track Record Period, we sold certain number of products to distributors,
which subsequently sold them to retailers. Some of these distributors also sell products directly
to consumers. For the years ended March 31, 2023, 2024 and 2025, our revenue generated from
the sales of products to distributors amounted to RMB567.2 million, RMB560.5 million and
RMB633.6 million, accounting for approximately 33.4%, 30.1% and 30.4% of our total
revenue for the same periods, respectively. For details of our distributors, please refer to the
section headed “Business — Sales and Distribution of Products — Distribution Channels” in
this prospectus. The performance of our distributors and their ability to sell the products
procured from us, uphold the reputation of the brands for which we conduct product
distribution and market deployment, and expand their businesses and their sales network are
crucial to the future growth of our business and may directly affect our sales volume and
profitability. Due to the number of our distributors and the size of the market, it is difficult to
closely monitor their practices. We have limited control over the daily business activities of our
distributors, and our control over the ultimate retail sales may be limited. We may impose
penalties, including the suspension of product supply from us or the termination of our business
relationships with the distributors if we discover that any of them has engaged in practices or
taken any action that could give rise to any material and adverse impact on our business and
operations, which may adversely affect the overall sales of the products they procure from us
and our ability to grow our business and profitability.
We may encounter difficulties in maintaining, expanding or optimizing our sales and
distribution network.
We rely on our omni-channel distribution network to promote and sell products. Sales to
our distributors and retailers accounted for a significant portion of our total revenue. For the
years ended March 31, 2023, 2024 and 2025, 78.2%, 75.4% and 79.0% of our total revenue
were generated from the sales to distributors and retailers in aggregate, respectively. The
competition for high-quality retailers and distributors is intense in our industry. Although we
generally maintain exclusive licenses for distributing the designated products in the relevant
territories through designated sale channels, and therefore, the distributors and retailers
generally cannot procure the same products from our competitors in the same channels and/or
territories, however, they may choose to distribute other branded products competing with the
products we offer as they may find the agreements and sales and distribution arrangements with
us less favorable than our competitors. In addition, we may terminate the relationships with
certain distributors and retailers and engage new ones in line with our business strategies from
time to time. Finding replacement for distributors and retailers may be time consuming and any
resulting delay may be disruptive and costly to our business, and we cannot assure you that we
will always be able to maintain our relationship with the existing distributors and retailers or
develop relationship with the new distributors and retailers to replace existing ones.
As part of our business growth strategies, we also consistently seek to expand and
optimize our sales and distribution network by exploring new distribution channels, engaging
new distributors and entering into new geographical regions. However, the success of our
RISK FACTORS
–5 6–


--- page 67 ---
expansion is subject to, among other things, the following factors: (i) the existence and
availability of suitable distribution channels or geographical regions and locations for the
expansion of our sales and distribution network; (ii) our ability to negotiate favorable
cooperation terms with our distributors; (iii) the availability of our management and financial
resources; (iv) the availability of suitable distributors, especially in lower-tier cities where we
rely on the in-depth knowledge of our distributors to penetrate into the local market; (v) our
ability to hire, train and retain skilled personnel in our direct sales channels; and (vi) the
adaptation of our logistics and other operational and management systems to an expanded sales
and distribution network.
Accordingly, if we encounter difficulties in maintaining, expanding or optimizing our
sales and distribution network in the future, our business, financial condition and results of
operations and prospects may be materially and adversely affected.
We are exposed to concentration risk involving our suppliers.
During the Track Record Period, while we procured products from a diverse group of
suppliers, certain suppliers contributed a significant portion of our total purchases. For the
years ended March 31, 2023, 2024 and 2025, the transaction amount from our five largest
suppliers in each year during the Track Record Period accounted for 84.0%, 81.6% and 77.8%
of our total purchases, respectively. In particular, the transaction amount from our top two
suppliers accounted for approximately 53.0%, 63.3% and 59.5% of our total purchases for the
years ended March 31, 2023, 2024 and 2025, respectively. Although we have maintained
cordial and mutually beneficial relationships with these brand licensors, we cannot assure you
that we will be able to maintain our business relationships with them in the future. If any of
them decides to terminate its business relationship with us, our business operation, financial
results and competitiveness will be significantly and adversely affected. We may be required
to negotiate with and establish business relationships with alternative brand licensors that may
not be able offer products that are equally popular or attractive to our customers and consumers
compare to the products that are currently in our portfolio. There is no assurance that we will
be able to find such suitable replacement in a timely and cost-effective manner, or at all. The
loss of business relationships with any of these brand licensors could significantly alter our
current business expansion plans and affect the execution of our growth strategies.
Rising global political tensions may have an adverse effect on our business and expansion
plans.
International market conditions and the international regulatory environment have
historically been affected by the geopolitical frictions, regional conflicts and competition
among various countries. Changes to trade policies, treaties and restrictions, or the perception
that these changes could trigger a decline of economic conditions in the countries or territories
where we sourced the products we sell and where such products are subsequently sold by us,
and therefore, could have a material adverse effect on our business, results of operations and
financial position.
RISK FACTORS
–5 7–


--- page 68 ---
During the Track Record Period, we primarily procured products from the United States,
Europe and Japan. Our business activities involving foreign suppliers expose us to possible
sales and/or procurement interruptions or cancellations and increased costs resulting from
restrictive trade policies, tariffs and duties, or the perception that these changes could occur.
Rising frictions and tensions in international relations may also indirectly adversely affect the
demand for our products. Any tensions between these countries or territories could make us
susceptible to the negative impacts, operationally, financially and reputationally. Rising
political tensions could also reduce the levels of cross-border trades, investments and other
economic activities, which would materially and adversely affect the global economic
conditions and the stability of global trading and financial markets, and in turn, adversely
impacting our business, financial condition and results of operations. Potential political
tensions and/or trade disputes may also prevent us from further developing our business
relationships with or even maintaining the current level of business relationships with our
foreign suppliers. If we fail to respond to these unexpected developments in a timely and
effective manner, our business, financial conditions and results of operations may be materially
and adversely affected.
If we lose any of the customers that contributed to a substantial portion of our revenue,
or our business relationship with them is materially undermined in any way, our business
and results of operations may be materially and adversely affected.
We derived a large portion of our revenue from a relatively small number of customers,
and made a substantial portion of our purchases from a relatively small number of suppliers,
during the Track Record Period, and expect to continue to do so in the near future. The revenue
generated from our five largest customers in each year during the Track Record Period for the
years ended March 31, 2023, 2024 and 2025 amounted to RMB371.3 million, RMB364.2
million and RMB518.2 million, which accounted for approximately 21.9%, 19.5% and 24.9%
of our total revenue, respectively. We cannot assure you that we will be able to maintain or
strengthen our relationships with our major customers, or that they will continue to place large
purchase orders with us. If there is any significant reduction in the spending on the purchases
from us by our major customers due to, among others, industry consolidation, deterioration of
their financial conditions, procurement budget cuts, and denial or delayed regulatory
approvals, and we are unable to obtain purchase orders of a comparable size and on similar
terms from other customers as replacements, our business, financial condition and results of
operations may be materially and adversely affected. In addition, should any of our major
customers delay or default on making payments to us or at all, our cash flow and financial
position could be materially and adversely affected.
Any quality issues related to the products we sell could result in a loss of customers and
sales.
The success of our business is partially based on our ability to consistently procure and
sell high-quality products. Maintaining such consistent product quality relies on the
effectiveness of our quality control systems, which in turn depend on a number of factors,
including the design and functions of our quality control systems and our ability to ensure that
RISK FACTORS
–5 8–


--- page 69 ---
our employees and other third parties involved in our operations adhere to those quality control
policies and guidelines. Although we have implemented certain quality control measures in our
operations, we cannot assure you that our quality control systems will be effective at all times,
or that we can identify any defects in the products we sell to our customers in a timely manner.
For details of our quality control measures, please refer to the section headed “Business —
Quality Control” in this prospectus. If the quality of any of the products we procure and sell
deteriorates for any reason, or if the consumers do not perceive the products to be in
high-quality and appealing as they claim to be, we may face product returns, order
cancellations and/or customer complaints. Additionally, the products we sell contain a number
of ingredients, some of which or the combination of which may have actual or perceived
unknown adverse effects on the environment or human health. As a result, there may be, from
time to time, complaints or concerns among consumers about certain of the products we sell
or in general, which in turn could jeopardize customer’s confidence in such products or us.
Moreover, if any defect or adverse effect of the products we sell results in property
damage or personal injury, we may suffer from product liability claims or product recalls,
resulting in financial and reputational damages. These legal claims may be expensive for us to
defend even if we prevail in the end. Furthermore, if there is a pattern of quality issues in the
relevant perfume, skincare, color cosmetics, personal care, eyewear and home fragrance
industries in general, consumers’ perception of, and willingness to purchase, the products we
sell may also be negatively affected, regardless of whether such quality issues relate to us. Any
quality issues related to the products we sell and the relevant industries in which we operate,
actual or perceived, may have a material and adverse effect on our business, financial
condition, results of operations and prospects.
Our development of self-owned brand(s) may not be successful.
Our development of self-owned brand(s) may not be successful, and we face challenges
and uncertainties in establishing and growing our self-owned brand(s), which could adversely
affect our business, financial condition, and results of operations. We have limited experience
in operating self-owned brand(s). As of March 31, 2025, we had only one self-owned brand,
Santa Monica. In the event the products of our self-owned brand(s) fail to cater to the changing
consumer preferences, maintain product quality and/or prices, or otherwise compete effectively
with those from established brands, we may not be able to successfully grow the business of
our self-owned brands. Furthermore, the development of our self-owned brand(s) requires
significant investment in product development, self-operated store operations, marketing and
human resources, and consumer loyalty building. If we fail to execute our expansion strategy
efficiently, we may not be able to generate the expected returns from our self-owned brand(s),
which may materially and adversely affect our business and overall financial performance.
RISK FACTORS
–5 9–


--- page 70 ---
Our expansion and/or development plans to be financed with the net proceeds of the
Global Offering may not be successful.
The successful implementation of our expansion plans requires significant investments,
which may be required to, among others things, develop our self-owned brands and open new
self-operated offline Perfume Box stores and other self-operated stores/counters. We have
limited experience in operating self-owned brand(s) and offline Perfume Box stores. As of
March 31, 2025, we had only one self-owned brand, Santa Monica. As of the same date, we
operated five offline Perfume Box stores in mainland China. As a substantial portion of our
expenditures must be incurred in advance of any additional sales that can be realized by our
expansion plans, securing adequate financing will be crucial. There can be no assurance that
such financing will be available on terms acceptable to us, or at all, and our ability to obtain
sufficient funding for the execution of our expansion plans and development plans is subject
to a variety of uncertainties, including, but not limited to, our future results of operations,
financial condition and cash flows, and economic, political and other conditions in the
jurisdictions where we operate or plan to operate our businesses. If we are unable to have
adequate working capital or obtain financing in a timely manner and at a reasonable cost, our
growth, competitive position and future profitability could be materially and adversely
affected.
We engage third-party firms to provide certain outsourced services, including
warehousing, transportation and advertising and promotion. We have limited control
over these service providers, which could adversely affect our business operations in the
event any of such services are interrupted or terminated for any reason.
We rely on a number of services provided by third-party service providers in our business
operations, including warehousing, customs declaration, transportation and advertising and
promotion. Accordingly, we are subject to the risks associated with the abilities of these service
providers to provide satisfactory services. Additionally, we may replace these service providers
from time to time, and there is a risk that we may suffer interruptions in services as we transit
from one third-party provider to another. Moreover, if the cost of our outsourced services is
more than expected, or if there is a disruption or breach of our outsourced services that results
in a loss or damage to us, in a deficiency of our internal operations or controls, or in an
inappropriate disclosure of confidential, proprietary or customer information, or if our ability
to distribute the products is interrupted, then our business, financial condition and results of
operations could be materially and adversely affected.
Moreover, we cannot guarantee that we will be able to monitor these third-party service
providers in connection with their compliance with applicable laws and regulation. In the event
they violate any such laws and regulations, our business, financial condition, results of
operations and reputation could be adversely affected.
RISK FACTORS
–6 0–


--- page 71 ---
We are dependent on the consumers’ spending on, and their demand for, the products we
sell. A reduction in their spending or demand could have a material adverse effect on our
business, financial condition, results of operations, cash flows and prospects.
The growth of our business partially depends on the demand of the consumers for the
products we sell. During the Track Record Period, we have benefitted from an increased
demand for the products we sell as a result of the continued growth of the perfume, skincare,
color cosmetics, personal care, eyewear and home fragrance industries in China (including
Hong Kong and Macau). Any slowdown or reversal of this trend could have a significant
adverse effect on the demand for the products we promote and sell. In addition, we are subject
to the changes in economic conditions affecting the level of consumer spending on the products
we sell. Consumer spending patterns are affected by, among other factors, business conditions,
interest rates, taxation, local economic conditions, uncertainties about future economic
prospects and shifts in discretionary spending toward other products. Consumer preferences
and economic conditions may differ or change from time to time. We cannot guarantee that we
will be able to maintain our historical rates of growth in revenue and net profit, or remain
profitable. Further, any slowdown of growth in the general economy or uncertainties regarding
the future economic prospects could affect consumer spending habits and have a material
adverse effect on our business, financial condition and results of operation.
We may not be able to efficiently manage our inventory and the inventory of our retailers
and distributors.
Maintaining optimal inventory levels is critical to the success of our business. As of
March 31, 2023, 2024 and 2025, the carrying amount of our inventory was RMB357.6 million,
RMB390.3 million and RMB434.1 million, respectively. We are exposed to inventory risks as
a result of a variety of factors that are beyond our control, including, but not limited to,
changing consumption trends and customer preferences, and launches of competing products.
Moreover, for stocking purposes, we generally estimate the demand for certain products we sell
ahead of the actual time of sale. We cannot assure you that we can accurately predict these
trends and events and maintain adequate levels of inventory at all times. An unexpected
decrease in the market demand for the products we sell could lead to excessive or obsolescent
inventory, and we may be forced to offer discounts or conduct promotional activities to dispose
of slow-moving inventory, which in turn may materially and adversely affect our financial
condition and results of operations. On the other hand, inventory under-stock may cause us to
lose sales. Any of these events could materially and adversely affect our business, financial
condition, results of operations and prospects.
Moreover, we sell some of the products to retailers and distributors, which maintain their
own inventories of the products procured from us. We generally do not monitor the inventory
levels of our distributors and retailers. Accordingly, we may not be able to accurately track the
inventory level of the retailers and distributors or to identify any excessive inventory build-up
at various levels of our sales and distribution network. We face higher risks of excessive or
obsolescent inventories when we launch new products as the market reception to these products
is uncertain. In such event, retailers and distributors that purchase products from us may reduce
RISK FACTORS
–6 1–


--- page 72 ---
future orders until their inventory levels realign with demand from their consumers or retailers,
which could materially and adversely affect our business, financial condition and results of
operations. Moreover, we allow certain key accounts customers to return unsold products,
which typically refer to the products for which they could not meet the sales target set by the
key accounts themselves for certain period of time, to us under agreed terms and conditions.
Revenue generated from the key accounts that enjoy such special product return policies
accounted for 5.5%, 6.3% and 8.7% of our total revenue for the years ended March 31, 2023,
2024 and 2025, respectively. The total value of the products returned by these key accounts for
reasons other than being defective amounted to RMB6.9 million, RMB5.9 million and RMB7.7
million for the years ended March 31, 2023, 2024 and 2025, respectively. If these retailers
return large number of products to us, our financial results and business operation could be
materially and adversely affected.
We depend on our key qualified personnel and if we are unable to recruit, train and retain
them, we may not achieve our goals.
Our future success depends heavily on the continuing services of our senior executives,
talented personnel and other key personnel. Our key personnel’s expertise in business
strategies, product design and development, business operations, sales and marketing,
regulatory compliance and relationships with our customers and suppliers are crucial to us. We
do not maintain key man insurance for any of our key personnel. If one or more of our senior
executives or other key personnel are unable or unwilling to continue in their present positions,
we may not be able to replace them promptly or at all, which may severely disrupt our business
and affect our financial condition, results of operations and future prospects. Moreover, our
industry is characterized by high demand and intense competition for talented personnel, we
may not be able to attract or retain highly skilled employees or key personnel. We cannot assure
you that our key personnel will not join a competitor or form a competing business. The
competition for qualified personnel may drive up employee compensation expenses, which
could materially and adversely affect our financial condition and results of operations.
Our agreements with brand licensors and other business partners may contain provisions
relating to operation requirements and/or performance targets, sales and purchases. The
failure to satisfy these targets or requirements could subject us to the early termination
of the relevant agreements.
Our agreements with business partners, including brand licensors, may contain provisions
relating to operational requirements and/or performance targets, such as requirements
regarding distributors, targets for the amount of sales and purchases. For instance, our
agreements with brand licensors may contain provisions as to (i) the minimum amounts of
purchases by our Group from the brand licensors within a specific period of time; (ii) the
minimum sales amount that our Group shall sell to its customers within a specific period of
time; and/or (iii) selection of distributors. In the event that we fail to meet such minimum
purchase amounts or minimum sales targets or if our distributors do not strictly follow the
guidance of our brand licensors, some of the distribution agreements provide that the brand
licensors are entitled to terminate the relevant distribution agreements with us by prior written
RISK FACTORS
–6 2–


--- page 73 ---
notice. If our distribution agreements with the brand licensors are terminated early, our
business operation, financial condition, results of operation and reputation, as well as business
prospects could be materially and adversely affected.
If we fail to obtain or renew certain approvals, licenses, permits and/or certificates
required for our business operations, our business, financial condition and results of
operations could be materially and adversely affected.
Pursuant to the relevant laws and regulations, we are required to obtain and maintain
various approvals, licenses, permits and/or certificates from the relevant authorities to operate
our business. For details of the approvals, licenses, permits and/or certificates that we need for
our business, please refer to the section headed “Business — Licenses, Certificates and
Permits” in this prospectus. In addition, we are required to obtain and renew certain
certificates, permits and licenses for our business operations. Any failure to obtain or renew
such approvals, licenses, permits and/or certificates necessary for our operations may result in
enforcement actions thereunder, including orders issued by the relevant regulatory authorities,
which may cause our operations to cease, and may include remedial measures requiring
substantial capital expenditure, which could materially and adversely affect our business,
financial condition and results of operations.
Some of these approvals, permits, licenses and/or certificates are subject to periodic
renewal and/or reassessment by the relevant authorities, and the standards of such renewal
and/or reassessment may change from time to time. There can be no assurance that we will be
able to successfully procure such renewals and/or reassessment on a timely basis or at all. Any
failure by us to obtain the necessary renewals and/or reassessment and otherwise maintain all
approvals, licenses, permits and/or certificates necessary to carry out our business at any time
could severely disrupt our operations, which could have a material adverse effect on our
business, financial condition and results of operations.
If the interpretation or implementation of existing laws and regulations changes or new
regulations come into effect requiring us to obtain any additional approvals, permits, licenses
or certificates that were previously not required to operate our existing businesses, we cannot
assure you that we will successfully obtain such approvals, permits, licenses or certificates.
Our failure to obtain the additional approvals, permits, licenses or certificates may restrict the
conduct of our business, decrease our revenue and/or increase our costs, which could
materially reduce our profitability and prospects.
Our failure to detect or prevent fraudulent or illegal activities or other misconduct by our
employees, customers, distributors, retailers, suppliers or other third parties may have a
material adverse effect on our business.
We are exposed to fraudulent or illegal activities or other misconduct by our employees,
customers, distributors, retailers, suppliers or other third parties that could subject us to
liabilities, fines and other penalties imposed by government authorities and negative publicity.
Although we have implemented internal controls and policies with regard to the review and
RISK FACTORS
–6 3–


--- page 74 ---
approval of merchant accounts, sales activities, interactions with business partners and
government officials and other relevant matters, there can be no assurance that our controls and
policies will prevent fraud or illegal activity by such persons or that similar incidents will not
occur in the future. Any illegal, fraudulent, corrupt or collusive activity by our employees,
customers, distributors, retailers, suppliers or other third parties, could subject us to negative
publicity that could severely damage the reputation of us or the brands for which we conduct
product distribution and market deployment and, if conducted by our employees, could further
subject us to significant financial and other liabilities to third parties and fines and other
penalties imposed by government authorities. Accordingly, our failure to detect and prevent
fraudulent or illegal activities or other misconduct by our employees, customers, distributors,
retailers, suppliers or other third parties could materially and adversely affect our business,
financial condition, results of operations and prospects.
We have limited insurance coverage, and any claims beyond our insurance coverage may
result in us incurring substantial costs and a diversion of resources.
We maintain insurance policies that are required under applicable laws and regulations
and are based on the assessment of our operational needs, including property insurance and
public liability insurance for our offices, which comprehensively cover major business
interruptions and accidental loss, such as fire, water and malicious damage. We do not maintain
product liability and professional errors and omissions insurance covering product liability
claims arising from the use, consumption or operation of the products we sell and claims
arising from our negligence in business operation, which are not required by any applicable
laws or regulations. In addition, not all of our subsidiaries maintain public liability insurance
covering incidents involving third parties that occur on or in our premises, or directors and
officers liability insurance. We do not maintain key-man life insurance on any of our senior
management or key personnel, or business interruption insurance. There is no assurance that
the insurance policies we maintain are sufficient to cover all of our operational risks. Any
liability or damage to, or caused by, our direct sales channels or our personnel beyond our
insurance coverage may result in us incurring substantial costs and a diversion of resources,
which could materially and adversely affect our business operation.
Any future litigation, legal disputes, claims or administrative proceedings against us
could be costly and time-consuming to defend.
We may become subject, from time to time, to legal proceedings and claims that arise in
the ordinary course of business or pursuant to governmental or regulatory enforcement
activities. While we do not believe that the resolution of any lawsuits against us will,
individually or in the aggregate, have a material adverse effect on our business, financial
condition and results of operations, litigation to which we subsequently become a party may
result in substantial costs, and divert our management’s attention and other resources from
day-to-day business operation. Furthermore, any litigations, legal disputes, claims or
administrative proceedings which are initially not of material importance may escalate and
become important to us due to a variety of factors, such as the circumstances of the cases, the
likelihood of loss, the monetary amount at stake and the parties involved.
RISK FACTORS
–6 4–


--- page 75 ---
Our insurance may not be sufficient to cover claims brought against us, may not provide
sufficient payments to cover all of the costs to resolve one or more such claims and may not
continue to be available on terms acceptable to us. In particular, any claim could result in
unanticipated liability to us if (i) the claim is outside the scope of the indemnification
arrangement we have with our customers; (ii) our customers do not abide by the
indemnification arrangement as required; or (iii) the liability exceeds the amount of any
applicable indemnification limits or available insurance coverage. A claim brought against us
that is uninsured or underinsured could result in unanticipated costs and could have a material
adverse effect on our business, financial condition, results of operations or reputation.
Failure to comply with applicable advertising laws and regulations when promoting the
products we sell may subject us to potential risks and penalties.
We from time to time advertise the brands for which we conduct product distribution and
market deployment and the products we sell through various channels, including television,
billboards and posters, news and magazines, the internet and social media, which are primarily
subject to applicable laws and regulations in China (including Hong Kong and Macau). We may
be held liable for the failure to comply with the applicable laws and regulations in connection
with our advertisements, which may result in legal proceedings, investigations and/or penalties
from the relevant authorities. In the event this occurs, our business, financial condition, results
of operations and reputation may be materially and adversely affected. For example, from time
to time, we may be scrutinized for the source of certain data or choice of certain words used
in our advertising. In April 2024, Qingpu District Market Supervision and Administration
Bureau of Shanghai (ऌਜ̹ఙ္ຖ၍ଣ҅) levied a fine in the amount of RMB30,000
on one of our subsidiaries in Shanghai and ordered it to suspend the publication of the relevant
advertisements and eliminate the negative impact of the advertisements because certain
products it sold on some of our self-operated online stores on Tmall and Douyin were promoted
without basis as required. As advised by our PRC Legal Advisor, according to the Advertising
Law of the PRC (), anyone who publishes false advertisements
may be ordered by the relevant market supervision and administration department to suspend
such publication, eliminate the impact accordingly, and may be subject to a fine of not less than
three times but not more than five times the advertising fee, whereas advertising fee cannot be
calculated or is obviously low, a fine of not less than RMB200,000 but not more than RMB1.0
million may be imposed. In addition, according to the Advertising Law of the PRC,
advertisers who violate the law more than three times in two years or commit other serious
violations, (i) a fine of not less than five times but not more than 10 times the adverting fee
shall be imposed; (ii) whereas advertising fee cannot be calculated or is obviously low, a fine
of not less than RMB1.0 million but not more than RMB2.0 million may be imposed; (iii) the
business license may be revoked; and (iv) the relevant advertisement review authority may
revoke the advertisement review approval document, and will not accept any advertisement for
review within one year. As of the Latest Practicable Date, we have paid such fine in full.
In addition, if our employees or the third party service providers we engage fail to comply
with such laws and regulations, or the relevant government authorities, ultimately take a view
that is inconsistent with our understanding in the process of administrative law enforcement,
RISK FACTORS
–6 5–


--- page 76 ---
we may be subject to potential risks and penalties. We cannot assure you that inadvertent
non-compliance will not happen in the future, which may subject us to further penalties
imposed by the relevant authorities and may further damage the image and reputation of the
brands for which we conduct product distribution and market deployment. We may need to
increase compliance costs in the future to comply with applicable advertising or other laws and
regulations. Accordingly, our business, financial condition, results of operations and prospects
may be materially and adversely affected.
If we fail to make adequate contributions to various employee benefits plans according to
the procedures under the relevant PRC laws and regulations, we may be subject to
penalties.
Pursuant to the relevant PRC laws and regulations, employers are obligated to directly
and duly contribute to the social insurance and housing provident funds for their employees.
As of March 31, 2025, we engaged third-party human resources agencies to make such
contributions to the social insurance and housing provident funds for a total of 37 of our
employees. We engaged these third-party agencies to make such contributions to the social
insurance and housing provident funds for these employees primarily because they prefer their
social insurance and housing provident funds to be paid at their respective places of residence
for the convenience of utilizing such benefits locally. As advised by our PRC Legal Advisor,
with respect to social insurance contributions, if an employer fails to pay social insurance
premiums in full and on time, the social insurance premium collection agency shall order it to
pay within a time limit or make up the amount, and a late payment fee of 0.05% will be charged
on a daily basis from the date of default. If payment is still not made within the time limit, the
relevant administrative department shall impose a fine of not less than one time but not more
than three times the amount of the unpaid amount. With respect to housing provident funds, if
an employer fails to register for housing provident funds or fails to complete the procedures
for setting up housing provident fund accounts for its employees, the competent PRC authority
shall order it to be completed within a time limit. If it fails to do so within the time limit, it
shall be fined not less than RMB10,000 but not more than RMB50,000.
We cannot assure you that the relevant local government authorities will not be of the
view that this third-party agency arrangement does not satisfy the requirements under the
relevant PRC laws, nor can we assure you that such authorities will not require us to pay the
social insurance and housing provident fund contributions within a specified time limit or
impose late fees or fines on us for our such non-compliance. In addition, if the human resource
agencies fail to pay the social insurance premium or housing provident fund contributions for
and on behalf of our employees as required under applicable PRC laws and regulations, we may
be ordered by competent government authorities to rectify such failure or be subject to
administrative penalties, which may materially and adversely affect our financial condition and
results of operations.
RISK FACTORS
–6 6–


--- page 77 ---
Changes in government regulations or practices affecting the industries where we operate
may result in additional costs for us to comply with new regulations.
There may be changes in government regulations or practices affecting the industries
where we operate, including those relating to perfumes, skincare products, color cosmetics,
personal care products, eyewear and home fragrances. If there is a relaxation in regulatory
requirements, or the introduction of simplified approval procedures, the entry barriers for our
potential competitors could be lower, which could result in more fierce market competition. On
the other hand, if the applicable regulatory requirements become more stringent, it may become
more difficult for our brand licensors or us, either through ourselves or our sales and
distribution network, to satisfy such requirements, or make the products we sell less
cost-effective as we may need to derive more costs to comply with such stringent regulatory
requirements. Any of these events could eliminate or substantially reduce the demand for the
products we sell, and thus materially and adversely affect our business, financial condition,
results of operations and prospects.
Privacy and cybersecurity concerns relating to our use of customer information, or any
actual or perceived failure by us or third parties to protect our proprietary data and
customer information, or otherwise comply with applicable data protection laws and
regulations or privacy policies, could negatively impact our reputation, subject us to
governmental or legal obligations and substantially harm our business.
Our business operations involve the collection, use, storage, retention, transfer, disclosure
and processing of personal data. Please refer to the section headed “Business — Information
Technology System — Cybersecurity and Customer Privacy Protection” in this prospectus for
further details. Currently, we rely on third-party online platforms for our online sales of
products. The aforementioned third-party online platforms share the transaction-related
information of our consumers with us, to the extent where it is necessary. We only use such
information or data we obtained for analyzing the relevant markets and dealing with
consumers, including delivering the products they purchased from us, providing after-sales
services and sending up-to-date information about the brands and products.
We are subject to a variety of laws and regulations relating to data security and privacy,
including restrictions on the collection, use, storage, retention, transfer, disclosure and other
processing of data. For instance, the Standing Committee of the National People’s Congress
promulgated the Cybersecurity Law of the PRC (), which
became effective on June 1, 2017. In addition, on June 10, 2021, the Standing Committee of
the National People’s Congress promulgated the Data Security Law of the PRC ( ʕശɛ͏
) (the “Data Security Law”), which became effective on September 1,
2021. The Data Security Law sets out a number of obligations on data security and privacy
undertaken by entities and individuals engaged in data-related activities. The Personal
Information Protection Law of the PRC () (the “Personal
Information Protection Law”), which was promulgated on August 20, 2021 and became
effective on November 1, 2021, stipulates statutory requirements for when and how personal
information processors can handle personal information and codifies the requirements for
RISK FACTORS
–6 7–


--- page 78 ---
different situations. The Personal Information Protection Law stipulates, among other things,
the scope of application, the definitions of personal information and sensitive personal
information, the requirement on content of personal information processing activity
notification, the legal basis on which we may rely for processing personal information and
certain internal compliance procedures.
While we strive to comply with our internal data compliance rules as well as all
applicable data protection and cybersecurity laws and regulations, any failure or perceived
failure to comply with laws and regulations with respect to personal information protection,
data security and cybersecurity could subject us to potential liabilities, reputational damage
and loss of customer loyalty. In addition, the regulatory landscape for data compliance and
cybersecurity is complex and constantly evolving, which could increase our compliance costs
and operational complexity. Any failure to closely monitor the relevant regulatory evolvements
could subject us to potential liabilities, further materially and adversely affecting our business,
financial condition and results of operations.
Further, if there are any defects in our data analytic model, our prediction on consumer
behavior may not be accurate in the course of our business. With respect to the accuracy of our
data, we rely on the information provided by third-party vendors and those provided and
collected directly from our online and offline customers. We do not verify the authenticity of
all such data. If the information that we collect is materially inaccurate or false, this may
materially and adversely affect our prediction of the market trends as well as the
implementation of our growth strategies. As we rely on big data analytics to formulate and
adjust the business development and expansion plans for the brands for which we conduct
product distribution and market deployment, the failure to collect and analyze certain key data
could materially and adversely affect our business, financial condition, results of operation and
prospects.
Any significant disruption to our information technology systems, such as a significant
cybersecurity incident or service failure by our vendors, may materially interrupt our
business operations.
Our business operations are supported by our information technology systems for various
functions, including enterprise resource planning, logistics management and docking with
e-commerce platform, CRM, accounting system, financial reporting, e-commerce transactions
via third-party platforms and offline point-of-sale management. Many of the infrastructure on
which such information technology systems are established are provided by third-party cloud
service providers. For details of our information technology system, please refer to the section
headed “Business — Information Technology System” in this prospectus. These systems are
important for maintaining company operation, business efficiency, data quality and timely
decision-making. However, our information technology (“IT”) systems are subject to various
risks, including system failures (including those by cloud service providers), data inaccuracies,
cyber-attacks, data breaches, and other security incidents. If such risks materializes, such
occasions could disrupt our operations, compromise our data, and result in significant
RISK FACTORS
–6 8–


--- page 79 ---
remediation costs, legal liabilities, and reputational damage. Our business may thereby incur
significant disruption that will materially and adversely affect our business, financial
condition, results of operation and prospects.
We may face penalties, other administrative fines or challenges from third parties arising
from the defects of certain properties owned or leased by us.
We may face penalties, other administrative fines or challenges arising from the defects
in properties leased by us, which could adversely affect our business, financial condition,
results of operations and prospects. As of March 31, 2025, 52 properties leased by us did not
conduct the lease registration and filing (ࣩin mainland China. While we will take
practical and reasonable steps to require the lessors of the above and future leased properties
to cooperate with us in completing the filings in a timely manner, we cannot assure you that
such lessors will agree to cooperate. These properties were used by us as offices, warehouses
and offline stores/counters. As advised by our PRC Legal Advisor, failure to register such lease
agreements with the relevant Chinese government authorities does not affect the validity of the
lease agreements, but the relevant Chinese government authorities may order us or the lessors
to, within a prescribed time limit, register the lease agreements. Failure to do so within the time
limit may subject us to a fine ranging from RMB1,000 to RMB10,000 for each non-registered
lease. In the event we fail to register the lease agreements according to the requirements of the
relevant PRC government authorities, we may be subject to a fine with the maximum amount
of RMB520,000 as of March 31, 2025.
As of March 31, 2025, the lessors of 39 properties leased by us with a total GFA of
approximately 1,892.66 sq.m. had not provided us with valid title certificates with respect to
the leased properties or other ownership or relevant documents evidencing their rights to lease
such properties. We used these leased properties as offices and offline stores/counters during
the Track Record Period and up to the Latest Practicable Date. Any dispute or claim in relation
to these properties, including relevant lessors’ alleged unauthorized lease of these properties,
could force us to relocate relevant offices and offline stores/counters. If any of our leases are
terminated or becomes unenforceable as a result of challenges raised by third parties, we will
need to seek alternative properties, which could incur relocation costs. If we fail to find
suitable properties on terms and conditions acceptable to us for the affected operations, our
business, financial condition and results of operations may be adversely affected.
We may require additional financing to support our developments or adapt to the changes
in business conditions, but we may not be able to obtain additional financing on favorable
terms or at all.
We may require additional financing if we incur operating losses or for future growth and
development of our business, including any investments or acquisitions we may decide to
pursue. For details, please refer to the sections headed “Business — Our Business Strategies”
and “Future Plans and Use of Proceeds” in this prospectus. If our financing is insufficient to
satisfy our working capital requirements, we may seek to issue additional equity or debt
securities or obtain new or expanded credit facilities. Our ability to obtain external financing
RISK FACTORS
–6 9–


--- page 80 ---
in the future is subject to a variety of uncertainties, including our future financial condition,
results of operations, cash flows, share price performance, liquidity of international capital and
lending markets and the PRC regulations over foreign investment and the industries where we
operate our business. In addition, incurring indebtedness would subject us to increased debt
service obligations and could result in operating and financing covenants that would restrict
our operations and growth. There can be no assurance that financing would be available in a
timely manner or in amounts or on terms favorable to us, or at all. Any failure to raise needed
funds on terms favorable to us, or at all, could severely restrict our liquidity, and could have
a material adverse effect on our business, financial condition and results of operations.
Moreover, any issuance of equity or equity-linked securities could result in significant dilution
to our existing Shareholders.
We are subject to environmental protection, fire control and health and safety laws and
regulations and may be exposed to potential costs for compliance and liabilities, including
consequences of accidental contamination, chemical or biological hazards or personal
injury.
We are subject to a number of environmental, fire control, health and safety laws and
regulations in respect of, among others, the warehouses in which we stored certain perfume
products. See the section headed “Regulatory Overview” in this prospectus for details. During
the Track Record Period, certain of perfumes procured by us and stored in mainland China
were not stored in specialized warehouses (“Hazardous Chemicals Warehouses”) according to
the Regulation on the Safety Management of Hazardous Chemicals (τΌ၍ଣૢ
Է). Failure to properly store hazardous chemicals in accordance with applicable laws and
regulations in mainland China may cause the competent government authority to order for
rectification and impose a fine of not less than RMB50,000 and not more than RMB100,000,
and failure to rectify may result in suspension of business, revocation of the relevant business
licenses or change of business scope, and any individual responsible for committing a crime
shall be held criminally responsible in accordance with applicable PRC laws and regulations.
On March 23, 2023, we received the Decision on Administrative Penalty (ࣣ֛)
issued by the Bureau of Emergency Management in Nanhai District, Foshan City (ऎ
၍ଣ҅), which imposed a fine of RMB55,000 on us for not storing the perfumes in
Hazardous Chemical Warehouses. As of the Latest Practicable Date, we have paid such fine in
full.
In addition, during the Track Record Period, we did not store certain perfumes, which
were classified as Class 3 dangerous goods belonging to the packing group PGII under the
Dangerous Goods (Application and Exemption) Regulation 2012 (Chapter 295E of Hong Kong
Laws), in compliance with the Dangerous Goods Ordinance (Chapter 295 of Hong Kong Laws)
(the “DGO”). During the Track Record Period, there was one summon charged against us for
storage of such perfume products in a quantity exceeding the relevant limit under the DGO in
August 2022, with a penalty of HK$10,000. As of the Latest Practicable Date, we have paid
such penalty in full. As of March 31, 2025, we engaged third-party warehousing and logistics
service providers to design and implement our logistics arrangements such that the storage of
a majority of the perfume products to be sold by us, which are classified as dangerous goods
RISK FACTORS
–7 0–


--- page 81 ---
under the DGO, were in the process of being moved to mainland China to be in compliance
with the relevant rules and regulations. However, in the event that our arrangements with the
relevant third-party service providers are interrupted or are otherwise ineffective, we may be
subject to prosecution by the relevant authorities for non-compliance with the DGO, and our
business operation in Hong Kong could be materially and adversely affected.
We cannot assure you that we will be able to comply with all regulations and obtain all
the regulatory approvals in respect of environmental protection, fire control and health and
safety. Delays or failures in obtaining all the requisite regulatory approvals may affect our
ability to launch, store and deliver the products to our customers as planned. As requirements
imposed by such laws and regulations may change and more stringent laws or regulations may
be adopted, we may not be able to comply with, or accurately predict any potential substantial
cost of complying with, these laws and regulations. If we fail to comply with relevant laws and
regulations, we may be subject to rectification orders, substantial fines, or potentially
significant monetary damages in our business operations. In addition, we cannot fully eliminate
the risk of accidental contamination, biological or chemical hazards or personal injury at the
warehouses in which we store certain perfume products. In the event of such accident, we could
be held liable for damages and clean-up costs which, to the extent not covered by existing
insurance or indemnification, could harm our business. Other adverse effects could result from
such liability, including reputational damage.
We are exposed to risks in relation to our consignment arrangements with our retailers.
During the Track Record Period, we entered into consignment agreements with certain
online and offline retailers. For the years ended March 31, 2023, 2024 and 2025, revenue
generated from such consignment arrangement amounted to RMB13.7 million, RMB20.5
million and RMB40.1 million, which accounted for approximately 0.8%, 1.1% and 1.9% of our
total revenue, respectively, for same periods. Under such arrangements, we, as consignor,
provide the goods to the relevant retailers, as consignees, to be sold to their customers on our
behalf. We retain ownership of the goods until they are sold by the consignees, despite the
relevant retailers’ possession of the goods during the sales process. We have no managerial
control over our retailers in terms of their possession of and their sales process involving, the
goods under the consignment arrangements. We cannot assure you that our retailers will at all
times strictly adhere to the terms and conditions under our consignment arrangement. Any
wrongdoing committed by them may harm our business or give rise to product liability claims
or customer complaints against us. If any of these retailers fails to distribute our products in
a timely or effective manner or in accordance with the terms of our consignment arrangements,
or at all, or if our consignment arrangements are suspended, terminated or otherwise expired
without renewal, our business, financial condition, results of operations and reputation may be
materially and adversely affected.
RISK FACTORS
–7 1–


--- page 82 ---
If we fail to offer high quality customer service, our business and reputation may be
adversely affected.
We believe high quality customer service to consumers, which is a significant part of our
customer relations management, is important for the growth of our business, and any failure to
maintain such standards of customer service, or a related market perception, could affect our
ability to sell products to existing and prospective customers. Providing an exceptional
customer experience to consumers requires significant time and resources from our customer
service teams. We may be required to increase the staffing of our customer service team, which
would increase our operating costs. Therefore, failure to scale our customer service
organization adequately may adversely affect our business results and financial condition.
Additionally, as our business rapidly expands, we may need to engage third-party
customer service providers, which could further increase our operating costs and negatively
affect the quality of the customer experience if such third parties are unable to provide service
levels equivalent to ours. The growth of the number of consumers to which we provide
customer services will put additional pressure on our customer service teams. We may be
unable to hire qualified staff quickly enough or to the extent necessary to accommodate
increases in demand. In the event this occurs, our reputation, business, results of operations and
prospects could be materially and adversely affected.
Increased labor costs, shortage of labor or deterioration in labor relations could slow our
growth and affect our profitability.
There may be an increase of the labor costs in the future. Increases of labor cost may
increase our cost of sales, selling and distribution expenses and other expenses arising from our
business operations, and we may not be able to pass on such increase to our customers. We may
also experience a shortage of labor from time to time. Any such shortage could hinder our
ability to provide timely product delivery to customers and maintain or expand our business
operations, which could materially and adversely affect our business, financial condition,
results of operations and prospects. In addition, we may have labor disputes in the future if we
fail to maintain a cordial relation with our employees. The deterioration of our labor relations
could result in disputes, strikes, claims, legal proceedings and reputational damage, labor
shortages that disrupt our business operations, as well as loss of experience, know-how and
trade secrets. As a result, our business, financial condition, results of operations and prospects
could be materially and adversely affected.
Our historical financial and operating results may not be indicative of our future
performance.
Our revenue increased from RMB1,699.1 million for the year ended March 31, 2023 to
RMB1,863.8 million for the year ended March 31, 2024 and further to RMB2,083.4 million for
the year ended March 31, 2025. Our net profit increased from RMB173.1 million for the year
ended March 31, 2023 to RMB206.5 million for the year ended March 31, 2024 and further to
RMB227.0 million for the year ended March 31, 2025. Our financial condition and results of
RISK FACTORS
–7 2–


--- page 83 ---
operations may fluctuate due to a number of factors, many of which are beyond our control,
including: (i) our ability to retain and increase the number of our customers; (ii) our ability to
maintain existing and explore new business relationship with brand licensors; (iii) our ability
to maintain or expand our sales and distribution network; (iv) our success in expanding the
market share of the products we sell; and (v) our success in marketing and promoting the
brands for which we conduct product distribution and market deployment.
In addition, we may not be able to sustain our historical growth rates in future periods,
and we may not be able to sustain profitability on an interim or annual basis in the future. Our
historical results, growth rates and profitability may not be indicative of our future
performance. Our Shares could be subject to significant price volatility should our earnings fail
to meet the expectations of the investment community. Any of these events could cause the
price of our Shares to materially decrease and in turn, further harm our business, financial
condition and results of operation.
We are subject to the credit risk involving trade receivables from our customers.
Failure to collect our trade receivables fully or timely may have material adverse effect
on our business operations and financial condition. The trading terms with certain of our key
accounts customers and major online retailer customers are mainly on credit. The credit term
we granted to such customers was generally 30 days to 90 days. As of March 31, 2023, 2024
and 2025, our trade receivables amounted to RMB157.0 million, RMB175.3 million and
RMB250.4 million, respectively. Our average trade receivables turnover days amounted to 29.4
days, 32.7 days and 37.4 days for the years ended March 31, 2023, 2024 and 2025, respectively.
Our Directors confirm that our management’s estimation and the related assumptions regarding
the credit risks have been made in accordance with the information currently available to us.
However, such estimation or assumptions may need to be adjusted if new information becomes
known. In the event that the actual recoverability is lower than expected, or that our past
allowance for impairment of trade receivables becomes insufficient in light of the new
information, we may need to make more allowance for impairment of trade receivables, which
may in turn materially and adversely affect our business, financial condition, and results of
operations.
The discontinuation of any of the financial incentives currently available to us in the
regions where we operate, including government grants, could adversely affect our
financial position, results of operation, cash flows and prospects.
During the Track Record Period, we have benefited from government grants and
subsidies. We received government grants with the amount of RMB12.0 million, RMB10.7
million and RMB5.5 million for the years ended March 31, 2023, 2024 and 2025, respectively.
We may need to satisfy the relevant requirements in order to continue to receive these financial
incentives. These incentives are subject to the discretion of the relevant government
authorities, which could determine at any time to eliminate or reduce these financial incentives
or preferential treatments, generally with prospective effect. Since our receipt of the financial
incentives or preferential treatments is subject to periodic time lags according to the
RISK FACTORS
–7 3–


--- page 84 ---
government practice, as long as we continue to receive these financial incentives or preferential
treatments, our net income in a particular period may be higher or lower relative to other
periods depending on the potential changes in these financial incentives in addition to any
business or operational factors that we may otherwise experience.
The amount of EIT payable by us may, as a result of our intra-group transactions, be
subject to adjustment by competent authorities, which may materially and adversely
affect our profitability and financial condition.
During the Track Record Period, our Group engaged in certain related party transactions.
Please see the section headed “Business — Transfer Pricing Arrangement” in this prospectus
for details. According to the regulations concerning transfer pricing between associated
enterprises, related party transactions shall comply with the arm’s length principle. If the
related party transactions fail to comply with such principle, the relevant tax authority has the
power to make an adjustment following certain procedures. Please see the section headed
“Regulatory Overview — Regulations Relating to Tax — Transfer Pricing” in this prospectus
for details.
We cannot guarantee that our transfer pricing policies will not be subject to future
inquiries by relevant authorities, nor can we ensure that the relevant regulations governing such
arrangements will remain unchanged. If the failure to comply with such principle reduces the
amount of income or taxable revenue of the enterprise or its affiliated parties, the tax authority
has the power to make an adjustment by reasonable methods. According to the relevant
mainland China tax laws and regulations, the mainland China tax authority has the power to
adjust the affiliated transactions within 10 years after the taxable year when such transactions
were conducted. Section 61A of the Inland Revenue Ordinance stipulates that where it would
be concluded that person(s) entered into or carried out transactions for the sole or dominant
purpose to obtain a tax benefit (which means the avoidance or postponement of the liability to
pay tax or the reduction in the amount thereof), liability to tax of the relevant person(s) will
be assessed (a) as if the transaction or any part thereof had not been entered into or carried out;
or (b) in such other manner as the supervising authority considers appropriate to counteract the
tax benefit which would otherwise be obtained.
There is uncertainty about the recoverability of our deferred tax assets, which may affect
our financial position in the future.
We are required to make judgments, estimates and assumptions about the recognition of
our deferred tax assets. As of March 31, 2023, 2024 and 2025, we had deferred tax assets of
RMB12.0 million, RMB17.1 million and RMB25.2 million, respectively. For details of the
movements of our deferred tax assets during the Track Record Period, please refer to note 20
of the Accountant’s Report set out in Appendix I to this prospectus. Deferred tax assets are
recognized only if it is probable that future taxable amounts will be available to utilize those
temporary differences and tax losses. This requires significant judgment on the tax treatments
of certain transactions and also an assessment on the probability, timing and adequacy of future
taxable profits available for the deferred tax to be recovered. The estimates and associated
RISK FACTORS
–7 4–


--- page 85 ---
assumptions are based on historical experience and other relevant factors. As a result, actual
results may differ from these accounting estimates. The realization of deferred income tax
assets depends primarily on our estimate of whether sufficient future profits will be available.
If sufficient future taxable profits are not expected to be generated or if taxable profits are
lower than expected, we may fail to recover our deferred tax assets, which may have a material
adverse effect on our financial condition in the future.
Fluctuations in exchange rates of the RMB and HKD could result in foreign currency
exchange losses.
The proceeds from the Global Offering will be received in HKD. In addition, we primarily
sell the products in mainland China and Hong Kong, which are primarily sourced from the
Europe, the United States and Japan. During the Track Record Period, we primarily paid the
suppliers in EUR and USD or other foreign currencies, and were paid by the customers in HKD
and RMB. As a result, any appreciation or depreciation of HKD or RMB against EUR and USD
or other foreign currencies may affect the value of our proceeds from the Global Offering or
our profits. We recorded exchange losses of RMB17.4 million, RMB1.6 million and RMB0.2
million for the years ended March 31, 2023, 2024 and 2025, respectively. For the years ended
March 31, 2023, 2024 and 2025, we recorded other comprehensive income of RMB39.1
million, RMB17.3 million and RMB5.4 million from the exchange differences on translation
of foreign operations, respectively. For details of the risks associated with our gains and losses
from the exchange rate fluctuations and exchange differences, please refer to the section
headed “Financial Information — Quantitative and Qualitative Disclosures about Market Risk
— Foreign Exchange Risk” in this prospectus. The exchange rate of HKD or RMB against EUR
and USD or other foreign currencies is affected by, among other things, the policies of the PRC
government and changes in political and economic conditions of China (including Hong Kong
and Macau) and the world, as well as supply and demand in the local market. It is difficult to
predict how market forces or government policies may affect the exchange rate between HKD
or RMB and EUR and USD or other foreign currencies in the future, which could result in a
significant appreciation or depreciation of HKD or RMB against EUR and USD or other
foreign currencies.
In addition, there are limited instruments available for us to reduce our foreign currency
risk exposure at reasonable costs. Any of these factors could materially and adversely affect
our business, financial condition, results of operations and prospects, and could reduce the
value of, and dividends payable on, our Shares in foreign currency terms.
RISK FACTORS
–7 5–


--- page 86 ---
If we fail to implement and maintain an effective system of internal controls, we may be
unable to accurately or timely report our results of operations or prevent fraud, and
investor confidence and the market price of our securities may be materially and
adversely affected.
We will become a public company upon completion of the Global Offering, and our
internal controls will be essential to the integrity of our business and financial results. Our
public reporting obligations are expected to place a strain on our management, operational and
financial resources and systems in the foreseeable future.
If we fail to establish and maintain an adequate internal control system, we could suffer
material misstatements in our financial statements and fail to meet our reporting obligations,
which would likely cause investors to lose confidence in our reported financial information.
This could limit our access to capital markets, adversely affect our results of operations and
lead to a decline in the trading price of our securities. Ineffective internal controls could also
expose us to an increased risk of fraud or misuse of corporate assets and subject us to potential
delisting from the stock exchange on which we list or to other regulatory investigations and
civil or criminal sanctions. In addition, after we become a public company, our reporting
obligations may place a significant strain on its management, operational and financial
resources and systems for the foreseeable future. We may be unable to timely complete our
evaluation testing and any required remediation of our prior deficiencies in our internal control
over financial reporting. Any of the foregoing could adversely affect our business, reputation
and financial condition.
We may be subject to infringement claims from third parties, and we may be unable to
protect our intellectual properties from unauthorized use, either of which could reduce
the value of the brands for which we conduct product distribution and market
deployment and harm our business and competitive market position.
Intellectual property rights are important to our business. We rely on a combination of
copyright, know-how, trade secret, patent and trademark laws and third-party no disclosure
agreements to protect our intellectual property rights and products. Please refer to the section
headed “Appendix IV — Statutory and General Information — C. Further Information about
our Business — 2. Material intellectual property rights of our Group” in this prospectus for
details of our intellectual properties. Effective protection of patents, trademarks, copyrights
and domain names is expensive and difficult to maintain, both in terms of application and
registration costs as well as the costs of defending and enforcing those rights. It is often
difficult to register, maintain and enforce intellectual property rights. Statutory laws and
regulations are subject to judicial interpretation and enforcement. Any of these factors could
prevent us from effectively protecting our intellectual property rights. Moreover, we rely on the
intellectual property rights of our brand licensors to protect our rights in the products we sell.
We cannot assure you that the intellectual property rights of our brand licensors or us will not
be challenged, invalidated, circumvented or rendered unenforceable, or that meaningful
protection or adequate remedies will be available to us. For instance, it may be possible for
unauthorized third parties to copy the intellectual properties of our brand licensors or us, or to
RISK FACTORS
–7 6–


--- page 87 ---
obtain and use information that we or our brand licensors regard as proprietary. Additionally,
third parties may assert exclusive patent, copyright and other intellectual property rights
against us or our brand licensors. We may also be subject to infringement or misappropriation
claims by third parties in other aspects of our day-to-day operations, such as our usage of
images, fonts or music in our advertising and promotional activities, as well as computer
software.
We or our brand licensors may not be able to defend the intellectual property rights in
these disputes. Any litigation arising from these claims could result in substantial costs to us
and divert our resources. If any intellectual property claims against us or our brand licensors
are successful, we may not have a legal right to continue to use or sell products that are
adjudicated to have infringed third parties’ intellectual property rights, or use the relevant
images, fonts or music in our advertising and promotional activities, as well as computer
software in our day-to-day operation. We may be legally required to expend significant
resources to replace the existing products we sell so that they do not infringe third parties’
intellectual property rights or we may be required to obtain relevant licenses to avoid further
infringements. As a result, our reputation, business, financial condition and results of
operations could be materially and adversely affected.
The share-based compensation adopted by us may materially and adversely affect our
results of operations and dilute your interest in our Company.
On December 1, 2019 and March 31, 2024, Eternal BVI granted a total of 26,194,000
options (the “BVI Options”) under the share option scheme of Eternal BVI to certain directors,
senior management and key employees of various subsidiaries of our Group (collectively, the
“BVI Options Grantees”). In addition, as part of the Corporate Reorganization, the Pre-IPO
Share Option Scheme of our Company was adopted on June 18, 2024, and pursuant to which
26,194,000 options (the “Cayman Options”) were granted to the BVI Options Grantees on June
24, 2024 and July 8, 2024, respectively, in exchange for the surrender and cancellation of the
BVI Options on a one-to-one basis. For details, please refer to the section headed “History,
Development and Corporate Structure — Corporate Development and Reorganization —
Exchange of BVI Options for Cayman Options” in this prospectus. The share-based
compensation could potentially dilute the shareholding of existing Shareholders, and we may
record share-based compensation expenses in our income statement. We may continue to grant
share-based compensation awards to employees in the future. Our expenses associated with
share-based compensation may increase, which may affect our financial condition and results
of operations. We may re-evaluate the vesting schedules, lock-up period, or other key terms
applicable to the grants under the share-based compensation schemes from time to time. If we
choose to do so, we may experience a substantial change in our share-based compensation
expenses in the reporting periods, which could materially affect our financial results.
RISK FACTORS
–7 7–


--- page 88 ---
We face risks related to other unforeseeable events, such as outbreak of contagious
diseases, including COVID-19, occurrence of force majeure events, regulatory changes
and/or natural disasters, which could significantly disrupt our operations.
Our business could be materially and adversely affected by natural disasters, such as
snowstorms, earthquakes, fires or floods, the outbreaks of widespread health epidemics, or
other events, such as wars, acts of terrorism, environmental accidents, power shortage or
communication interruptions. Outbreaks of contagious diseases and other adverse public health
developments in which we operate and conduct business could severely damage our supply
chain operation, or impair the works of our workforce. The outbreak of any severe epidemic
disease, such as avian flu, H1N1 flu, SARS or the COVID-19, may disrupt our business
operations such as offline sales channels, which could negatively affect our financial condition,
results of operations, supply chain management and future prospects.
The COVID-19 pandemic affected our business in terms of our sales, supply chain,
logistics, financial performances and future business plans. For details of such impact, please
refer to the section headed “Business — Impact of COVID-19 pandemic on our Group” in this
prospectus. Although the World Health Organization has declared that the COVID-19
pandemic is no longer a global health emergency, we cannot assure you that there will not be
a recurrence of the COVID-19 pandemic. Should there be a recurrence of the COVID-19
pandemic, stringent measures may be taken to protect the health of residents, which may
negatively affect our offline business, which could materially and adversely affect our
business, financial condition and results of operations.
We may be materially and adversely affected by any negative publicity concerning us, our
business, Shareholders, affiliates, Directors, senior management and employees, as well as
our third-party business partners and the industry in which we operate, regardless of its
accuracy, which could harm our reputation, business, financial condition and prospects.
Negative publicity about us, our business, Shareholders, affiliates, Directors, senior
management and employees, as well as our third-party business partners, including our
suppliers and strategic partners, and the industries in which we operate, can harm our
reputation and our ability to retain brand licensors and customers. Negative publicity
concerning us and these parties could be related to a wide variety of matters, including, but are
not limited to: (i) misconduct, alleged or otherwise, or other improper activities committed by
our Directors, Shareholders, senior management, affiliates and employees, including any
misrepresentation made by our senior management or employees in the course of discharging
their duties; (ii) false or malicious allegations or rumors about us or our Directors,
Shareholders, senior management, affiliates and employees; (iii) complaints by our customers
about the products we sell or our customer services; (iv) disputes with our suppliers; (v)
security breaches of our customers’ or employees’ confidential information; (vi) employment-
related complaints and claims relating to alleged employment discrimination, wage and hour
violations, miscalculations involving and delays in the payments of staff salaries and/or
bonuses; and (vii) governmental and regulatory investigations or penalties resulting from our
failure to comply with applicable laws and regulations.
RISK FACTORS
–7 8–


--- page 89 ---
We may also be exposed to the risk of any illegal action or misconduct of our third party
business partners, including our suppliers. Any negative publicity and claims asserted against
them or fines imposed upon them as a result of actual or perceived failures, could have a
material and adverse effect on our public image, reputation, financial condition and results of
operations. In addition, negative publicity of the industry in which we operate may materially
and adversely affect our business prospects and results of operations.
In addition to traditional media, there has been an increasing use of social media and
similar platforms, including instant messaging applications, such as WeChat, social media
websites and other forms of internet-based communications that provide individuals with
access to a broad audience of customers and other interested persons. The availability of
information on instant messaging applications and social media platforms is virtually
immediate, without affording us, our Shareholders, affiliates, Directors, senior management,
employees or third-party business partners an opportunity for redress or correction. The
opportunity for dissemination of information, including inaccurate information, is seemingly
limitless and readily available. Information concerning us, our business, our Shareholders,
affiliates, Directors, senior management, employees or third-party business partners may be
posted on such platforms at any time. The risks associated with any such negative publicity or
incorrect information cannot be completely eliminated or mitigated and may materially harm
our reputation, business, financial condition and results of operations.
RISKS RELATING TO DOING BUSINESS IN THE REGIONS WHERE WE OPERATE
The economic, political and social conditions, as well as regulatory policies, significantly
affect the overall economic growth of the regions where we operate, and the failure to
respond to the relevant developments in them may have material adverse effects on our
business.
Our business, prospects, financial condition and results of operations may be influenced
to a significant degree by political, economic and social conditions in the regions where we
operate. Our business, financial condition and results of operations may be adversely affected
by the following factors:
 an economic slowdown in the place where we operate;
 inaccurate assessment of the economic conditions of the markets in which we
operate;
 economic policies and initiatives undertaken by the government;
 changes to prevailing market interest rates;
 a higher rate of bankruptcy; and
 government regulations on capital investments or changes in tax regulations.
RISK FACTORS
–7 9–


--- page 90 ---
Any slowdown in the economic growth of the regions where we operate may reduce the
demand for the products we promote and sell and could materially and adversely affect our
business, financial condition, results of operation and prospect.
The PRC laws and regulations may evolve from time to time.
The PRC legal system is based on written statutes. In the late 1970s, the PRC government
began to promulgate a comprehensive system of laws and regulations governing economic
matters in general. The overall effect of legislation over the past three decades has significantly
increased the protections afforded to various forms of foreign or private-sector investment in
the PRC. Our PRC subsidiaries are subject to various PRC laws and regulations generally
applicable to companies in the PRC.
In particular, PRC laws and regulations concerning the industries where we operate,
including perfumes, skincare products, color cosmetics, eyewear, home fragrances and
personal care industries, are developing and evolving. The PRC government authorities may
promulgate new laws and regulations to regulate these relevant industries in the future. We
cannot assure you that our practice would not be deemed to violate any new PRC laws or
regulations relating to these relevant industries. Moreover, developments in the industries
where we operate may lead to changes in PRC laws, regulations and policies or in the
interpretation and application of existing laws, regulations and policies that may restrict our
business operations, which could materially and adversely affect our business, financial
condition and results of operations.
The filing with the CSRC is required in connection with our overseas offering and listing
and our future capital raising activities.
On February 17, 2023, the CSRC released Trial Administrative Measures for Overseas
Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձɪ̹၍ଣ
) (the “Oversea Listing Trial Measures”) and five relevant guidelines, which
became effective on March 31, 2023. Pursuant to the Overseas Listing Trial Measures, PRC
domestic companies which, after the overseas offering and listing, offers subsequent securities
in the same overseas market or conducts offering and listing in other overseas markets (the
“Future Offering”), shall complete the filing procedures and report relevant information to the
CSRC. The Overseas Listing Trial Measures provide that if the issuer meets the following
criteria, the overseas securities offering and listing conducted by such issuer will be deemed
as an indirect overseas offering by PRC domestics companies, and subject to the filing
procedure: (i) 50% or more 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 is accounted for by PRC domestic companies; and (ii) the issuer’s key business activities
are conducted in the PRC, or its primary place(s) of business are located in the PRC, or the
senior managers in charge of its business operations and management are mostly Chinese
citizens or domiciled in the PRC. Whether an offering constitutes an “indirect overseas
offering” and whether a listing is made by a “PRC domestic company” shall be determined on
RISK FACTORS
–8 0–


--- page 91 ---
a substance-over-form basis. We are required to complete the filing procedures with the CSRC
in connection with the proposed Listing. Please refer to the section headed “Regulatory
Overview — Laws and Regulations Related to Overseas Listing” in this prospectus for more
information.
Based on the foregoing, for any Future Offering after this Global Offering, we may be
required to comply with the filing procedure of the CSRC. Any failure to complete filings
procedures may have a material adverse effect on us.
Failure to comply with PRC regulations regarding the registration requirements for
employee share ownership plans or share option plans may subject the PRC plan
participants or us to fines and other legal or administrative sanctions.
In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign
Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of
Overseas Publicly-Listed Companies (ྌ̮ි၍
) (the “SAFE Circular 7”). Under the SAFE Circular 7 and other relevant
rules and regulations, PRC residents who participate in a stock incentive plan in an overseas
publicly-listed company are required to register with SAFE or its local branches and complete
certain other procedures. Participants of a stock incentive plan who are PRC residents must
retain a qualified PRC agent, which could be a PRC subsidiary of the overseas publicly listed
company or another qualified institution selected by the PRC subsidiary, to conduct the SAFE
registration and other procedures with respect to the stock incentive plan on behalf of its
participants. The participants must also retain an overseas entrusted institution to handle
matters in connection with their exercise of stock options, the purchase and sale of
corresponding stocks or interests and fund transfers. In addition, the PRC agent is required to
amend the SAFE registration with respect to the stock incentive plan if there is any material
change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other
material changes. Additionally, the Circular on Foreign Exchange Administration of Offshore
Investment and Financing and Round Trip Investment By Domestic Residents through Special
Purpose V ehicles (೻ҳ༟̮ි၍ଣϞᗫਪ
) (the “SAFE Circular 37”), which was promulgated by the SAFE in July 2014,
stipulates that PRC residents who participate in a share incentive plan of an overseas
non-publicly-listed special purpose company may register with SAFE or its local branches
before they exercise the share options. The share options granted by us will be subject to these
regulations. Failure of our PRC share option holders or restricted shareholders to complete
their SAFE registrations may subject these PRC residents to fines and legal sanctions and may
also limit our ability to contribute additional capital into our PRC subsidiary, limit our PRC
subsidiary’s ability to distribute dividends to us, or otherwise materially adversely affect our
business.
The SA T has also issued relevant rules and regulations concerning employee share
incentives. Under these rules and regulations, our employees working in the PRC will be
subject to PRC individual income tax upon exercise of the share options or grant of the
restricted shares. Our PRC subsidiaries have obligations to file documents with respect to the
RISK FACTORS
–8 1–


--- page 92 ---
granted share options or restricted shares with relevant tax authorities and to withhold
individual income taxes for their employees upon exercise of the share options or grant of the
restricted shares. If our employees fail to pay or we fail to withhold their individual income
taxes according to relevant rules and regulations, we may face sanctions imposed by the
competent governmental authorities.
Y ou may have limited resources in effecting services of legal process or enforcing overseas
judgments against us, our Shareholders, Directors and senior management.
We are an exempted company incorporated in the Cayman Islands. A substantial portion
of our current operations, including the assets for these operations, are located in mainland
China and Hong Kong. In addition, some of our current officers are nationals and/or residents
of the mainland China and Hong Kong and substantially all of the assets of these persons are
located in the mainland China and Hong Kong. As a result, it may be difficult or impossible
for you to effect service of process upon us or these persons, or to bring an action 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.
On January 18, 2019, the Supreme People’s Court and the Hong Kong SAR Government
signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region (ٙ
τર) (the “2019 Arrangement”), which has taken effect on January 29, 2024. The 2019
Arrangement seeks to establish a mechanism with greater clarity and certainty for recognition
and enforcement of judgments in a wider range of civil and commercial matters between
mainland China and Hong Kong, based on criteria other than a written bilateral choice of court
agreement. Under the 2019 Arrangement, any party concerned may apply to the relevant
mainland China court or Hong Kong court for recognition and enforcement of the effective
judgments in civil and commercial cases, subject to the conditions set forth in the 2019
Arrangement. However, we cannot assure you that all final judgments will be recognized and
effectively enforced by the relevant mainland China and Hong Kong court.
Overseas securities regulators may not be able to collect information without proper
authorization in the PRC.
Overseas securities regulators in the jurisdictions where the investors reside may not have
established a regulatory cooperation with the PRC authorities to efficiently conduct
investigation and collect evidence in the PRC. Even if such cooperation has been established,
overseas securities regulators may not be able to obtain information needed for regulatory
investigations or litigation without obtaining approval from relevant PRC government
authorities to collect the information. For instance, according to Article 177 of the Securities
Law of the PRC (), which became effective in March 2020, no
overseas securities regulator may directly conduct investigations or collect evidence and no
entities or individuals may provide documents or materials in connection with securities
RISK FACTORS
–8 2–


--- page 93 ---
activities without proper authorization as stipulated under Article 177 of the Securities Law of
the PRC. The inability of an overseas securities regulator to collect information within the PRC
may increase difficulties faced by our investors in protecting their interests.
We receive dividends and other distributions on equity paid by our subsidiaries to fund
a portion of our cash and financing requirements. Limitations on the ability of our
subsidiaries to pay dividends to us could have a material adverse effect on our ability to
conduct our business.
Our Company receives dividends and other distributions on equity paid by our
subsidiaries to fund a portion of our cash and financing requirements, including, among others,
the funds necessary to pay dividends and other cash distributions to our Shareholders, to
service any debt we may incur and to pay our operating expenses. In addition, we expect that
the number of our subsidiaries will continue to increase in the future. If any of our subsidiaries
in the PRC 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. Furthermore, relevant PRC
laws and regulations permit payments of dividends by the subsidiary only out of its retained
earnings, if any, as determined in accordance with PRC accounting standards and regulations.
Under PRC laws and regulations, each of our subsidiaries in the PRC is required to set aside
at least 10% of its after-tax profits based on PRC accounting standards each year to fund a
statutory reserve, until the accumulated amount of such reserve has exceeded 50% of its
registered capital. These reserves are not distributable as cash dividends. As a result of these
PRC laws and regulations, our subsidiaries may be restricted in their ability to transfer the net
profit to us in the form of dividends. Limitations on the ability of our subsidiaries to pay
dividends or make other distributions to us could materially and adversely limit our ability to
grow, make investments or acquisitions, pay dividends or otherwise fund and conduct our
business.
Dividends paid by our PRC subsidiaries to us are subject to PRC withholding taxes.
Under the EIT Law and its implementation rules, unless otherwise provided a 10%
withholding tax is applicable to the profit of a foreign-invested enterprise distributed to its
immediate holding company outside mainland China to the extent the distributed profit is
sourced from mainland China, (i) if the immediate holding company is neither a PRC resident
enterprise nor has any establishment or place of business in mainland China, or (ii) if the
immediate holding company has an establishment or place of business in mainland China but
the relevant income is not effectively connected with the establishment or place of business.
Pursuant to a special arrangement between Hong Kong and mainland China, this rate may be
lowered to 5% if a Hong Kong resident enterprise directly owns over 25% of the Chinese
company at all times during the 12-month period immediately prior to obtaining a dividend
from such company. In addition, according to the Circular of the State Administration of
Taxation on Relevant Issues Concerning the Implementation of Dividend Clauses in Tax
Treaties () issued by the SA T on
February 20, 2009, if the main purpose of an offshore arrangement is to obtain a preferential
tax treatment, Chinese tax authorities have the discretion to adjust the tax rate enjoyed by the
RISK FACTORS
–8 3–


--- page 94 ---
relevant offshore entity. We cannot assure you that Chinese tax authorities will determine that
the 5% tax rate applies to dividends received by our subsidiaries in Hong Kong from our
Chinese subsidiaries or that Chinese tax authorities will not levy a higher withholding tax rate
on these dividends in the future. In accordance with the Administrative Measures for
Convention Treatment for Non-resident Taxpayers (༾၍ଣ፬
), which was promulgated by the SA T and came into effect on January 1, 2020, if
non-resident taxpayers consider they are eligible for treatments under the tax treaties through
self-assessment, they may, at the time of filing tax returns or making withholding tax filings
through withholding agents, enjoy the treatments under the tax treaties, and shall concurrently
collect and retain the relevant documents for inspection according to relevant regulations, and
accept tax authorities’ post-filing administration.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for the Shares. The liquidity, trading volume and
market price of our Shares may be volatile.
Prior to the Global Offering, there has not been a public market for our Shares. Although
application has been made for the Listing, we cannot assure you that an active public market
for our Shares will develop or that the market price of our Shares will not decline below their
initial Offer Price. The Offer Price of our Shares will be determined through negotiation
between us, the Selling Shareholder and the Joint Global Coordinators and it may not be
indicative of the market price of the Shares after the Global Offering is completed. Y ou may
be unable to sell your Shares at or above the Offer Price, and as a result, may lose all or part
of your investment in such Shares. Failure in the development of an active and liquid public
trading market may materially and adversely affect the market price and liquidity of our
Shares.
Y ou will incur immediate and significant dilution and may experience further dilution if
we issue additional Shares in the future.
The Offer Price of the Offer Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net tangible
asset value. There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to Shareholders after the creditors’ claims. In addition,
to expand our business, we may consider offering and issuing additional Shares in the future.
Purchasers of the Offer Shares may experience dilution in the net tangible asset value per Share
of their Shares if we issue additional Shares in the future at a price which is lower than the net
tangible asset value per Share at that time.
RISK FACTORS
–8 4–


--- page 95 ---
Substantial future sales or the expectation of substantial sales of our Shares in the public
market could cause the price of our Shares to decline.
Sales of substantial amounts of Shares in the public market immediately following the
completion of the Capitalization Issue and the Global Offering (assuming the Over-allotment
Option is not exercised, and without taking into account any Shares which may be allotted and
issued upon the exercise of any options granted under the Pre-IPO Share Option Scheme and
any options which may be granted under the Share Option Scheme), or the perception that these
sales could occur, could adversely affect the market price of our Shares. There will be
1,333,400,000 Shares outstanding immediately following the completion of the Capitalization
Issue and the Global Offering (assuming the Over-allotment Option is not exercised, and
without taking into account any Shares which may be allotted and issued upon the exercise of
any options granted under the Pre-IPO Share Option Scheme and any options which may be
granted under the Share Option Scheme), assuming no exercise of the Over-allotment Option.
Our Controlling Shareholders agreed that any Shares held by them will be subject to a lock-up
after the Listing. See “Underwriting — Underwriting Arrangements and Expenses — Hong
Kong Public Offering — Undertakings Pursuant to the Hong Kong Underwriting Agreement —
Undertakings by the Controlling Shareholders in Respect of Themselves” in this prospectus for
further details. However, the Underwriters may release these securities from these restrictions
and such Shares will be freely tradable after the expiry of the lock-up period.
The market price and trading volume of our Shares may decline if securities or industry
analysts do not publish research reports about our business, or they adversely change
their recommendations regarding our Shares.
The trading market for our Shares will be influenced by the research and reports that
industry or securities analysts publish about us or our business. If one or more of the analysts
who cover us downgrade our Shares, the price of our Shares would likely decline. If one or
more of these analysts cease coverage of our Company or fail to regularly publish reports on
us, we could lose visibility in the financial markets, which in turn could cause our stock price
or trading volume to decline.
Our Controlling Shareholders have substantial influence over our Company and their
interests may not align with the interests of our other Shareholders.
Immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme, our Company will be owned as to 75% by Eternal International, which is in turn held
by Mr. Lau and Mrs. Lau as to 90% and 10% respectively. As such, our Controlling
Shareholders will have substantial influence over our business, including decisions regarding
mergers, consolidations and the sale of all or substantially all of our assets, election of
Directors and other significant corporate actions. This concentration of ownership may
discourage, delay or prevent a change in control of our Company, which could deprive our
RISK FACTORS
–8 5–


--- page 96 ---
Shareholders of an opportunity to receive a premium for their Shares in a sale of our Company
or may reduce the market price of our Shares. These actions may be taken even if they are
opposed by our other Shareholders, including those who purchased Shares in the Global
Offering. In addition, the interests of our Controlling Shareholders may differ from the
interests of our other Shareholders.
Prior dividend distributions are not an indication of our future dividend policy.
We declared and distributed dividends of RMB189.4 million, RMB314.3 million and nil
for the years ended March 31, 2023, 2024 and 2025 to our controlling Shareholders,
respectively, after elimination of intra-group dividends. Any future dividend declaration and
distribution by our Company will be at the discretion of our Directors and will depend on our
future operations and earnings, capital requirements and surplus, general financial condition,
contractual restrictions and other factors that our Directors deem relevant. Any declaration and
payment as well as the amount of dividends will also be subject to our Articles of Association
and the applicable laws and regulations, including (where required) the approvals from our
Shareholders and our Directors. In addition, our future dividend payments will depend upon the
availability of dividends received from our subsidiaries. As a result of the above, we cannot
assure you that we will make any dividend payments on our Shares in the future with reference
to our historical dividends, or make any dividend payments at all. For further details of the
dividend policy of our Company, please see the section headed “Financial Information —
Dividends” in this prospectus.
We are a Cayman Islands company and, because judicial precedent regarding the rights
of shareholders is different under the laws of the Cayman Islands when compared with the
laws of Hong Kong or other jurisdictions, you may have difficulties in protecting your
shareholder rights.
Our corporate affairs are governed by, among other things, our Memorandum and Articles
and the Companies Act and common law of the Cayman Islands. The rights of Shareholders to
take action against our Directors, actions by minority Shareholders and the fiduciary
responsibilities of our Directors to us under Cayman Islands law are to a large extent governed
by the common law of the Cayman Islands. The common law of the Cayman Islands is derived
in part from comparatively limited judicial precedent in the Cayman Islands as well as that
from English common law, which has persuasive, but not binding, authority on a court in the
Cayman Islands. The laws of the Cayman Islands relating to the protection of the interests of
minority Shareholders differ in some respects from those in other jurisdictions.
We cannot guarantee the accuracy of facts and other statistics with respect to official
government sources contained in this prospectus.
Official government sources in this prospectus, including but not limited to information
and statistics relating to the global and PRC industries of perfumes, skincare products, color
cosmetics, personal care products, eyewear and home fragrances are derived from various
publicly available publications, which our Directors believe to be reliable. We cannot
RISK FACTORS
–8 6–


--- page 97 ---
guarantee the quality or reliability of such official government sources. We have taken
reasonable care to ensure that the official government sources presented are accurately
extracted and reproduced from such publications. However, these official government sources
have not been independently verified by us, the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries, the Underwriters or any other
party involved in the Global Offering (excluding Frost & Sullivan in respect of the Frost &
Sullivan Report and the information therein) and no representation is given as to its accuracy.
Such official government sources may not be consistent with other information complied by
other sources and prospective investors should not place undue reliance on any official
government sources derived from public sources.
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
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 to update or
otherwise revise the forward-looking statements in this prospectus to the public, 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 or other media regarding us
or the Global Offering.
There may be, subsequent to the date of this prospectus but prior to the completion of the
Global Offering, press and media coverage regarding us and the Global Offering, which
contained, among other things, certain financial information, projections, valuations and other
forward-looking information about us and the Global Offering. We have not authorized the
disclosure of any such information in the press or other media and do not accept responsibility
for the accuracy or completeness of such press articles or other media coverage. We make no
representation as to the appropriateness, accuracy, completeness or reliability of any of the
projections, valuations or other forward-looking information about us. To the extent such
statements are inconsistent with, or conflict with, the information contained in this prospectus,
RISK FACTORS
–8 7–


--- page 98 ---
we disclaim responsibility for them. Accordingly, prospective investors are cautioned to make
their investment decisions based on the information contained in this prospectus only and
should not rely on any other information.
Y ou should rely solely upon the information contained in this prospectus, the Global
Offering and any formal announcements made by us in Hong Kong in making your investment
decision regarding our Shares. We do not accept any responsibility for the accuracy or
completeness of any information reported by the press or other media, nor the fairness or
appropriateness of any forecasts, views or opinions expressed by the press or other media
regarding our Shares, the Global Offering or us. We make no representation as to the
appropriateness, accuracy, completeness or reliability of any such data or publication.
Accordingly, prospective investors should not rely on any such information, reports or
publications in making their decisions as to whether to invest in our Global Offering. By
applying to purchase our Shares in the Global Offering, you will be deemed to have agreed that
you will not rely on any information other than that contained in this prospectus and the Global
Offering.
RISK FACTORS
–8 8–


--- page 99 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed director who is named
as such in this prospectus) collectively and individually accept full responsibility, contains
particulars given in compliance with the Companies (WUMP) 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. Our Directors, having
made all reasonable enquiries, confirmed 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 in this prospectus or this prospectus misleading.
CSRC FILING
Our Directors and the Joint Sponsors are of the view that we are required to complete the
filing procedures with the CSRC in connection with the proposed Listing according to the
Overseas Listing Trial Measures. We have submitted a filing to the CSRC for application for
the Listing on July 23, 2024. The CSRC confirmed completion of such filing on March 28,
2025. No other approvals from the CSRC are required to be obtained for the Listing.
GLOBAL OFFERING
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 contains 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 and therein must not be relied upon as
having been authorized by our Company, the Selling Shareholder, the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, and any of the
Underwriters, any of our or 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
Joint Global Coordinators and the Overall Coordinators. Pursuant to the 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, subject to
agreement 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 about the Price
Determination Date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–8 9–


--- page 100 ---
The Offer Price is expected to be fixed by agreement by the Sponsor-Overall Coordinators
(for themselves and on behalf of the Underwriters) and our Company (for ourselves and on
behalf of the Selling Shareholder) on the Price Determination Date. The Price Determination
Date is expected to be on or about Tuesday, June 24, 2025 (Hong Kong time) and, in any event,
not later than 12:00 noon on Tuesday, June 24, 2025 (Hong Kong time) (unless otherwise
determined among the Sponsor-Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company (for ourselves and on behalf of the Selling Shareholder)). If,
for any reason, the Offer Price is not agreed by 12:00 noon on Tuesday, June 24, 2025 (Hong
Kong time) between the Sponsor-Overall Coordinators (for themselves and on behalf of the
Underwriters) and our Company (for ourselves and on behalf of the Selling Shareholder), the
Global Offering will not become unconditional and will lapse immediately.
See “Underwriting” section for further information about the Underwriters and the
underwriting arrangements.
Neither the delivery of this prospectus nor any offering, sale or delivery made in
connection with the Offer Shares should, under any circumstances, constitute a representation
that there has been no change or development reasonably likely to involve a change in our
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.
As part of the Global Offering, the Selling Shareholder will offer up to 34,660,000 OAO
Sale Shares for sale if the Over-allotment Option is exercised in full. Assuming the full
exercise of the Over-allotment Option and an Offer Price of HK$3.09 per Share, which
represents the mid-point of the indicative Offer Price range, we estimate that the net proceeds
to the Selling Shareholder from the OAO Sale Shares (after deduction of proportional
underwriting commissions and fees (assuming full payment of the incentive fee) payable by the
Selling Shareholder) will be approximately HK$104.4 million. We will not receive any of the
proceeds from the sale of the OAO Sale Shares pursuant to the exercise of the Over-allotment
Option. For further details, see the section headed “Structure of the Global Offering —
Over-allotment Option” in this prospectus.
Details of the Selling Shareholder are set out in the paragraph headed “Statutory and
General Information — G. Other Information — 13. Particulars of the Selling Shareholder” in
Appendix IV to this prospectus.
RESTRICTIONS ON OFFER AND SALE OF OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his or her acquisition of Offer Shares to, confirm that he
or she is aware of the restrictions on offers of the Offer Shares described in this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 0–


--- page 101 ---
No action has been taken to permit a public offering of the Offer Shares, or the
distribution of this prospectus, in any jurisdiction other than Hong Kong. Accordingly, this
prospectus may not be used for the purpose of, and does not constitute, an offer or invitation
in any jurisdiction or in any circumstances in which such 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 and sale of the Offer Shares in other jurisdictions are subject
to restrictions and may not be made except as permitted under the applicable securities laws
of such jurisdictions pursuant to registration with or authorization by the relevant securities
regulatory authorities or an exemption from those authorities.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the approval for the
listing of, and permission to deal in, (i) our Shares in issue, (ii) the Shares to be issued pursuant
to the Global Offering (including any Shares which may be issued under the exercise of the
Over-allotment Option) and the Capitalization Issue, and (iii) any Shares to be issued upon the
exercise of any options granted under the Pre-IPO Share Option Scheme or may be granted
under the Share Option Scheme.
None of our Shares or loan capital of our Company are listed on or dealt in on any other
stock exchanges as of the date of this prospectus. At present, our Company is not seeking or
proposing to seek such listing or permission to deal in our Shares on any other stock exchanges.
All the Offer Shares will be registered on the Hong Kong Share Registrar of our Company in
order to enable them to be traded on the Stock Exchange.
Under section 44B(1) of the Companies (WUMP) 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 our Company by the Stock Exchange.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the approval for the listing of, and permission to deal in, the
Shares on the Main Board of the Stock Exchange and our compliance 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 Exchange Participants (as
defined in the Listing Rules) is required to take place in CCASS on the second settlement day
after any trading day. All activities under CCASS are subject to the HKSCC Rules and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS. Investors should seek the advice of their stockbroker or other professional advisors for
details of the settlement arrangements as such arrangements may affect their rights and interest.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 1–


--- page 102 ---
PROFESSIONAL TAX ADVICE RECOMMENDED
Professional investors in the Global Offering are recommended to consult their
professional advisers as to the taxation implications of subscribing for, purchasing, holding or
disposing of, and dealing in, our Shares (or exercising rights attaching to them) under the laws
of Hong Kong and the place of their operations, domicile, residence, citizenship or
incorporation. None of our Company, the Selling Shareholder, the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, and any of the
Underwriters, any of our or their respective directors, agents, employees or advisers or any
other party involved in the Global Offering accepts responsibility for any tax effects on, or
liabilities of, any person resulting from the subscription for, purchasing, 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 its principal share registrar,
Conyers Trust Company (Cayman) Limited, in the Cayman Islands, and our Hong Kong
register of members will be maintained by Tricor Investor Services Limited, in Hong Kong. All
Offer Shares will be registered on our Company’s register of members in Hong Kong.
Dealings in the Shares will be subject to Hong Kong stamp duty. For further details of
Hong Kong stamp duty, please seek professional tax advice.
DIVIDENDS PAYABLE TO SHAREHOLDERS
Unless determined otherwise by our Company, dividends payable in Hong Kong dollars
in respect of the Shares will be paid to the Shareholders as recorded on the Share register of
members of our Company in Hong Kong and sent by ordinary post, at the Shareholders’ risk,
to the registered address of each Shareholder.
OVER-ALLOTMENT OPTION AND STABILIZATION
Details of the arrangements relating to the Over-allotment Option and stabilization are set
out in the section headed “Structure of the Global Offering” in this prospectus.
PROCEDURE FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedure for applying for Hong Kong Offer Shares is set out in the section headed
“How to Apply for Hong Kong Offer Shares” in this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 2–


--- page 103 ---
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering (including the Hong Kong Public Offering
and its conditions) are set out in the section headed “Structure of the Global Offering” in this
prospectus.
COMMENCEMENT OF DEALING IN THE SHARES
Dealings in the Shares on the Stock Exchange are expected to commence on Thursday,
June 26, 2025.
EXCHANGE RATE
Solely for convenience purposes, this prospectus includes translations among certain
amounts denominated in Renminbi, Hong Kong dollars and U.S. dollars. No representation is
made that the Renminbi amounts could actually be converted into another currency at the rates
indicated, or at all. Unless otherwise indicated, (i) the translation between Renminbi and Hong
Kong dollars was made at the rate of RMB0.9154 to HK$1.00, (ii) the translation between
Renminbi and U.S. dollars was made at the rate of RMB7.1840 to US$1.00, each based on
exchange rates prevailing on the Latest Practicable Date published by the PBOC.
No representation is made that any amounts in one currency can be or could have been
at the relevant dates converted at the above rate or any other rates, or at all.
LANGUAGE
If there is any inconsistency between this prospectus and the Chinese translation of this
prospectus, this prospectus shall prevail. If there is any inconsistency between the names of any
of the entities, laws and regulations mentioned in this prospectus which are not in the English
language and their English translations, the names in their respective original languages shall
prevail. The English translations are marked with “*” for identification purpose only.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies in any table, chart or elsewhere between the total
shown and the sum of the amounts listed are due to rounding.
OTHERS
Unless otherwise specified, all references to any shareholdings in our Company
immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme).
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 3–


--- page 104 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. Lau Kui Wing Flat A, 16/F, Tower 3, Regency Park
3 Wah King Hill Road
Kwai Chung, New Territories
Hong Kong
Chinese
Ms. Lam King Flat A, 51/F, Block 5, Vision City
1 Y eung Uk Road, Tsuen Wan
Hong Kong
Chinese
Ms. Lau Wing Yin Flat B, 8/F, Tower 4, Regency Park
3 Wah King Hill Road
Kwai Chung, New Territories
Hong Kong
Chinese
Mr. Chu Wai Tsun, Baggio Flat C, 18/F., Sun Kong Building
2-J Sai Y eung Choi St, Mong Kok
Kowloon
Hong Kong
Chinese
Independent non-executive Directors
Mr. Tao Chi Keung Flat A, 7/F, Tower 2B
Monaco
12 Muk Tai Street
Kai Tak, Kowloon
Hong Kong
Chinese
Mr. Nagy Guillaume
Nicolas Sébastien
112 Kim Seng Road
#16-03
Singapore 239432
French
Ms. Chan Soh Cheng Sheares Ville
Unit 08-06
9 Holt Road
Singapore 249446
Singaporean
For further information about our Directors, please refer to “Directors and Senior
Management” in this Prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 4–


--- page 105 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors BNP Paribas Securities (Asia) Limited
60/F. and 63/F.
Two International Finance Centre
8 Finance Street
Central
Hong Kong
CITIC Securities (Hong Kong) Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Sponsor-Overall Coordinators,
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners,
Joint Lead Managers and
Capital Market Intermediaries
BNP Paribas Securities (Asia) Limited
60/F. and 63/F.
Two International Finance Centre
8 Finance Street
Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners,
Joint Lead Managers and
Capital Market Intermediaries
(in alphabetical order)
CMB International Capital Limited
45th Floor
Champion Tower
3 Garden Road
Central
Hong Kong
DBS Asia Capital Limited
73/F, The Center
99 Queen’s Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 5–


--- page 106 ---
Joint Bookrunners, Joint Lead Managers
and Capital Market Intermediaries
(in alphabetical order)
China Harbour International
Securities Limited
23A/F, YF Life Centre
38 Gloucester Road
Wanchai
Hong Kong
First Shanghai Securities Limited
19/F, Wing On House
71 Des V oeux Road Central
Hong Kong
Futu Securities International
(Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
SBI China Capital Financial Services Ltd.
4/F, Henley Building
5 Queen’s Road Central
Central
Hong Kong
Legal Advisers to Our Company As to Hong Kong law:
Morgan, Lewis & Bockius
19/F, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
As to Hong Kong regulatory and compliance
matters:
Ms. Queenie W.S. Ng
Barrister-at-law, Hong Kong
Rooms 2203A & B, Fairmont House
8 Cotton Tree Drive, Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 6–


--- page 107 ---
As to PRC law:
Beijing Jingtian & Gongcheng Law Firm
Room 1401A, Tower 2
Kerry Center Qianhai
Qianhai Avenue
Nanshan District
Shenzhen, Guangdong Province
PRC
As to Macau law in respect of data
compliance:
Jorge Neto Valente — Lawyers &
Notaries
15th Floor, ICBC Tower
Macau Landmark Building
555 Avenida da Amizade Macau
As to Cayman Islands law:
Conyers Dill & Pearman
29th Floor
One Exchange Square
8 Connaught Place
Central
Hong Kong
Legal Advisers to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
Sullivan & Cromwell (Hong Kong) LLP
20/F, Alexandra House
18 Chater Road
Central
Hong Kong
As to PRC law:
JunHe LLP
28/F, GDH BCC
No. 21 Zhujiang West Road
Zhujiang New Town
Tianhe District, Guangzhou
Guangdong Province
PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 7–


--- page 108 ---
Auditors and Reporting Accountants PricewaterhouseCoopers
Certified Public Accountants
Registered Public Interest Entity Auditor
22/F Prince’s Building
Central
Hong Kong
Independent Industry Consultant Frost & Sullivan Limited
Unit 3006, 30/F
Two Exchange Square
8 Connaught Place
Central
Hong Kong
Receiving Banks Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DBS Bank (Hong Kong) Ltd
G/F, The Center
99 Queen’s Road Central
Central
Hong Kong
Compliance Adviser Alliance Capital Partners Limited
Room 03, 7/F
Worldwide House
19 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 8–


--- page 109 ---
Registered Office Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KY1- 1111
Cayman Islands
Headquarter and Principal Place of
Business in Hong Kong
22/F, Enterprise Square Two
No. 3 Sheung Y uet Road
Kowloon
Hong Kong
Company’s Website www.eternal.hk
(The contents of this website do not form
part of this prospectus)
Company Secretary Ms. Chung Kok Kuen (ࢇ)
An Associate of The Hong Kong Chartered
Governance Institute
22/F, Enterprise Square Two
No. 3 Sheung Y uet Road
Kowloon
Hong Kong
Audit Committee Mr. Tao Chi Keung ( Chairman )
Mr. Nagy Guillaume Nicolas Sébastien
Ms. Chan Soh Cheng
Remuneration Committee Mr. Nagy Guillaume Nicolas Sébastien
(Chairman )
Ms. Lam King
Mr. Tao Chi Keung
Nomination Committee Mr. Lau Kui Wing ( Chairman )
Mr. Tao Chi Keung
Ms. Chan Soh Cheng
CORPORATE INFORMATION
–9 9–


--- page 110 ---
Authorized Representatives Ms. Lam King
Flat A, 51/F, Block 5
Vision City
1 Y eung Uk Road
Tsuen Wan
Hong Kong
Mr. Chu Wai Tsun, Baggio
Flat C, 18/F, Sun Kong Building
2-J Sai Y eung Choi St
Mong Kok, Kowloon
Hong Kong
Principal Share Registrar and Transfer
Office in Cayman Islands
Conyers Trust Company
(Cayman) Limited
Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KYI- 1111
Cayman Islands
Hong Kong Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banks Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DBS Bank (Hong Kong) Ltd
G/F, The Center
99 Queen’s Road Central
Central
Hong Kong
CORPORATE INFORMATION
– 100 –


--- page 111 ---
This section contains certain information, statistics and data which are derived
from official government publications and industry sources as well as the Frost &
Sullivan Report. We engaged Frost & Sullivan to prepare the Frost & Sullivan Report,
an independent industry report, in connection with the Global Offering. The
information and statistics from official government sources have not been
independently verified by us, the Selling Shareholder, the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, any of the Underwriters, any of our or their respective directors,
officers, employees, advisors, agents or representatives or any other party involved in
the Global Offering (other than Frost & Sullivan), and no representation is given as to
its accuracy.
SOURCES OF INFORMATION
We commissioned Frost & Sullivan, an independent consulting firm, to conduct a detailed
research on the perfume industry, skincare industry, color cosmetics industry, personal care
industry, eyewear industry, and home fragrances industry from 2018 to 2028. The report
commissioned has been prepared by Frost & Sullivan independent of our influence. Frost &
Sullivan is an independent global consulting firm, which was founded in 1961 in New Y ork.
It offers industry research and market strategies and provides growth consulting and corporate
training. In connection with the market research services provided, we have agreed to pay a fee
of US$168,000 to Frost & Sullivan in connection with the preparation of the Frost & Sullivan
Report. We have extracted certain information from the Frost & Sullivan Report in this section,
as well as in the sections headed “Summary”, “Risk Factors”, “Business”, “Financial
Information” and elsewhere in this prospectus to provide our potential investors with a more
comprehensive presentation of the industry in which we operate.
Frost & Sullivan performed both primary and secondary research, and obtained
knowledge, statistics, information and industry insights on the industry trends of the target
research markets. Primary research involved interviewing with industry participants.
Secondary research involved reviewing company reports, independent research reports and
data based on Frost & Sullivan’s own research data base.
The Frost & Sullivan Report was compiled based primarily on the following assumptions:
(i) the Chinese economy will grow at a steady rate and (ii) the social, economic, and political
stability in mainland China will continue during the forecast period, which will ensure a
sustainable and steady development of the cosmetics industry, including, perfumes, skincare
products, color cosmetics and personal care products, and the eyewear and home fragrance
markets in mainland China.
Our Directors confirmed that, after taking reasonable care, as of the Latest Practicable
Date, there had been no adverse change in the market information set forth herein since the date
on which the Frost & Sullivan Report was issued.
INDUSTRY OVERVIEW
– 101 –


--- page 112 ---
OVERVIEW OF COSMETICS INDUSTRY IN MAINLAND CHINA
Mainland China has the second largest cosmetics market in the world, with a market share
of 11.9% in the global cosmetics industry in terms of retail sales in 2023. According to Frost
& Sullivan, the cosmetics industry in mainland China demonstrated growth from 2017 to 2021
due to the rise in the consumption expenditure, while the growth was partially offset by the
impact of the COVID-19 pandemic on the cosmetics industry in 2022. The market size of the
cosmetics industry in mainland China, in terms of retail sales grew from RMB693.5 billion in
2018 to RMB953.7 billion in 2023, representing a CAGR of 6.6%. Mainland China’s cosmetics
industry boosts the highest growth rate among all major economies
1 in the world. According
to Frost & Sullivan, the market size of cosmetics industry in mainland China is expected to
reach RMB1,402.5 billion in terms of retail sales in 2028, representing a CAGR of 8.0% from
2023.
According to Frost & Sullivan, cosmetics products can be divided into five categories:
skincare, personal care, color cosmetics, perfumes and others. Others primarily include
maternity and childcare, deodorants and depilatory products. The following chart illustrates the
market size of the cosmetics industry in mainland China by product category in terms of retail
sales from 2018 to 2028:
Market Size of Cosmetics Industry in Mainland China in terms of Retail Sales
by Product Categories, 2018-2028E
Skincare
Personal Care
Color Cosmetics
Perfume
Others
CAGR
Skincare
Personal Care
Color Cosmetics
Perfume
Others
Overall
2018-2023
8.4%
5.8%
4.7%
15.0%
1.3%
6.6%
2023-2028E
8.7%
6.0%
8.4%
14.0%
8.2%
8.0%
77.2 75.1 84.5 78.0 82.5 89.2 97.6 105.6 114.0 122.511.493.0
202.2
309.7
693.5
104.5
222.3
355.9
779.4
14.2
82.6
115.0
245.1
410.1
860.9
15.6 20.4
129.5
267.9
464.9
967.2
19.5
111.2
259.4
441.0
909.1
22.9
116.8
268.5
463.0
953.7
26.5
126.1
283.3
500.1
1,025.2
30.5
138.4
302.4
548.6
1,117.5
34.7
150.8
321.2
597.9
1,210.2
39.2 44.0
162.8 175.2
340.3 359.7
701.1
648.3
1,304.6
1,402.5
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
1 Major economies refer to countries with more than USD2.0 trillion of nominal GDP in 2023.
INDUSTRY OVERVIEW
– 102 –


--- page 113 ---
OVERVIEW OF THE GLOBAL PERFUME INDUSTRY
Perfume refers to fragrant liquid, which is typically made from essential oils extracted
from flowers and spices and used to provide a pleasant smell to one’s hair, body or clothes. The
main components of the perfume are alcohol, essence and a small amount of water. The
different volatilization rate of essential oil generally differentiates the scent of perfume into
three stages, including top note, middle note and base note.
According to Frost & Sullivan, the United States, Brazil, France, Germany and United
Kingdom are the top five countries in terms of the market size of perfumes in 2023. The market
size in terms of retail sales of perfumes globally increased from RMB590.7 billion in 2018 to
RMB709.6 billion in 2023 with a CAGR of 3.7%, and is expected to grow to RMB841.1 billion
in 2028 with a CAGR of 3.5%. The following chart illustrates the market size of the global
perfumes market in terms of retail sales from 2018 to 2028:
Market Size of Global Perfume Industry in terms of Retail Sales,
2018-2028E
CAGR
Perfume
2018-2023
3.7%
2023-2028E
3.5%
590.7 586.8
533.1
607.5 641.5
709.6
753.1
785.8 812.7 830.7 841.1
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Source: The Frost & Sullivan Report
According to Frost & Sullivan, the per capita expenditure on perfume in mainland China
is relatively low compared to other developed countries. This is primarily attributable to the
lower penetration of perfumes in mainland China and mainland China’s large population size.
Currently, the penetration rate of perfumes in mainland China is lower than that in other
developed countries, such as Japan, South Korea, the United States and the United Kingdom.
However, as mainland China’s economy continues to develop steadily and given its large
population size, the positive correlation between economic growth and perfume consumption
is expected to increase the penetration rate of perfumes, driving the growth of the market size
in mainland China. In addition, mainland China has been experiencing rapid growth in the per
INDUSTRY OVERVIEW
– 103 –


--- page 114 ---
capita expenditure on perfume in recent years. According to Frost & Sullivan, the per capita
expenditure on perfumes in mainland China amounted to RMB16 in 2023, which was
substantially lower than that in Japan, South Korea, the United States and the United Kingdom
in 2023, amounting to RMB47, RMB170, RMB423 and RMB406, respectively. According to
Frost & Sullivan, the significant disparity between the per capita expenditure on perfumes in
mainland China and that in other developed regions indicates the potential for growth in the
Chinese market. Furthermore, it is expected that the per capita expenditure on perfumes in
mainland China will grow at a CAGR of 14.0% from 2023 to 2028, which outperforms Japan,
South Korea, the United States, and the United Kingdom for the same periods. According to
Frost & Sullivan, the upward trend of mainland China’s per capita expenditure on perfume was
attributable to the increasing popularity and acceptance of perfumes among Chinese
consumers, which indicate that there is ample room for growth and expansion in mainland
China’s perfume industry.
OVERVIEW OF PERFUME INDUSTRY IN CHINA (INCLUDING HONG KONG AND
MACAU)
Overview of Perfume Industry in China (including Hong Kong and Macau)
Overview
According to Frost & Sullivan, perfume industry of China (including Hong Kong and
Macau) went through (i) the embryonic stage before 1978, during which the consumption of
perfumes was not popular and the entry of international perfume brands into the market was
very limited; (ii) the development stage from 1978 to 2000, during which China (including
Hong Kong and Macau) was in the early stage of market reform, resulting in the slow
development of perfumes market, and international brands of perfumes began to enter into
China (including Hong Kong and Macau) with limited types of products; (iii) the accelerated
development stage from 2000 to 2015, during which large international perfumes groups
accelerated their entry into China (including Hong Kong and Macau) and the number of local
perfume manufacturers began to rise. At this stage, international brands occupied the high-end
market, while China’s (including Hong Kong and Macau) local brands focused on the mass
market. In addition, local players for perfumes began to rely on online channels to sell the
products; and (iv) the high-quality development stage from 2015 to present, during which
China’s (including Hong Kong and Macau) perfumes market became relatively mature, the
industry norm gradually improved, and the awareness of China’s (including Hong Kong and
Macau) consumers for perfumes rapidly increased. At this stage, the perfumes of international
brands still occupied a large market share and became the main driver of growth in China’s
(including Hong Kong and Macau) perfumes market. In addition, the sales through e-commerce
platforms have been growing, which accelerated the development of China’s (including Hong
Kong and Macau) perfumes market.
INDUSTRY OVERVIEW
– 104 –


--- page 115 ---
The total market size in terms of retail sales of perfumes in China (including Hong Kong
and Macau) increased from RMB14.6 billion in 2018 to RMB26.1 billion in 2023 with a CAGR
of approximately 12.3%, and is expected to further grow to RMB47.7 billion in 2028,
representing a CAGR of approximately 12.8% from 2023 to 2028.
Market Size of Perfumes Industry in China (including Hong Kong and Macau)
in terms of Retail Sales, 2018-2028E
CAGR 2018-2023 2023-2028E
Perfumes Market in China
(including Hong Kong and Macau) 12.3% 12.8%
14.6
17.3 18.0
23.0 22.2
26.1
29.9
34.0
38.3
42.9
47.7
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Source: National Bureau of Statistics of the PRC, Hong Kong Census and Statistics Department, Macau Statistics and
Census Service and the Frost & Sullivan Report
INDUSTRY OVERVIEW
– 105 –


--- page 116 ---
The market size in terms of retail sales of perfumes in mainland China increased from
RMB11.4 billion in 2018 to RMB22.9 billion in 2023 with a CAGR of approximately 15.0%,
and is expected to grow to RMB44.0 billion in 2028 with a CAGR of approximately 14.0%.
The following chart illustrates the market size of mainland China’s perfumes market by online
and offline channels from 2018 to 2028:
Market Size of Perfumes Industry in Mainland China in terms of Retail Sales
by Online and Offline Channel, 2018-2028E
CAGR
Online Channel
2018-2023
24.6%
2023-2028E
22.2%
Offline Channel 12.3% 10.1%
Overall 15.0% 14.0%
11.4
14.2 15.6
20.4 19.5
22.9
26.5
30.5
34.7
39.2
44.0
2.1
2.9 4.0
5.5 5.7
6.3
7.9
9.8
11.9
14.3
17.2
9.3 11.3 11.6 14.9 13.8 16.6 18.6 20.7 22.8 24.9 26.8
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Online Channel
Offline Channel
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
INDUSTRY OVERVIEW
– 106 –


--- page 117 ---
The raw materials of perfumes sold in mainland China primarily include ethanol and
glycerol. According to Frost & Sullivan, the price of ethanol increased from RMB5,482 per ton
in 2018 to RMB6,690 per ton in 2023 with a CAGR of approximately 4.1%, and the price of
glycerol decreased from RMB6,869 in 2018 to RMB4,338 in 2023 with a CAGR of
approximately -8.8%.
According to Frost & Sullivan, the products in mainland China’s perfumes market can be
divided into three categories by price ranges, including (i) entry prestige perfumes, usually
with the prices at or below RMB599 per 50 ml; (ii) prestige perfumes, usually with the prices
ranging from RMB600 to RMB1,199 per 50 ml; and (iii) luxury perfumes, usually with the
prices at or above RMB1,200 per 50 ml. The following chart illustrates the market size of
mainland China’s perfumes market by price ranges from 2018 to 2028:
Market Size of Perfumes Industry in Mainland China in terms of Retail Sales
by Price Range, 2018-2028E
Prestige
Luxury
Entry Prestige
CAGR
Luxury
Prestige
Entry Prestige
Overall
2018-2023
18.8%
17.2%
11.5%
15.0%
2023-2028E
19.0%
15.3%
10.4%
14.0%
5.0 6.3 8.1 7.6 8.6 9.6 10.6 11.7 12.7 14.1
1.1
5.3
11.4
6.8
14.2
1.5
6.0
7.7
15.6
1.7
2.2
10.1
20.4
2.1
9.8
19.5
11.7
22.9
13.8
26.5
16.2
30.5
18.6
34.7
21.1
23.8
2.6
3.1
3.7
4.5
5.4
6.2
44.0
39.2
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
INDUSTRY OVERVIEW
– 107 –


--- page 118 ---
According to Frost & Sullivan, the cities in mainland China can generally be categorized
into first tier, new first tier and second tier, and lower tier. The following chart illustrates the
market size of mainland China’s perfumes market by tiers of cities from 2018 to 2028:
Market Size of Perfumes Industry in Mainland China in terms of Retail Sales
by Tiers of Cities, 2018-2028E
CAGR
First-tier cities
2018-2023
11.5%
2023-2028E
10.6%
Lower-tier cities 23.5% 17.7%
New first-tier and
second-tier cities 18.6% 17.0%
Overall 15.0% 14.0%
11.4
14.2 15.6
20.4 19.5
22.9
26.5
30.5
34.7
39.2
44.0
6.9
8.2 8.7
11.0 10.4
11.9
13.3
14.7
16.3
18.0
19.7
3.7 4.8
0.8 1.4 1.9 1.81.2
5.6 7.4 7.2 8.7 10.4 12.3
14.4
16.7 19.1
5.24.64.03.52.92.3
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
First-tier cities
New first-tier and
second-tier cities
Lower-tier cities
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
Business Model of Perfume Industry
According to Frost & Sullivan, perfume industry consists of (i) upstream, which includes
raw material supply and product manufacturing; (ii) midstream, which includes market
deployment and other operating activities for the brands that can be conducted by either
brand-owner perfume groups or non-brand-owner perfume groups. Non-brand-owner perfume
groups include primary licensees, which directly obtain authorization from the brand owners,
or secondary licensees who obtain authorization from the primary licensees; and (iii)
downstream, which includes product distribution to end consumers through various sales
channels.
INDUSTRY OVERVIEW
– 108 –


--- page 119 ---
The following diagram illustrates the industrial chain of perfume industry:
Industrial Chain of Perfume Industry
Upstream Midstream Downstream
Raw Material Supply
Packaging Material
Packaging Bottle
Label
Production Material
Essence
Alcohol
Operating Activities for Brands
Product
ManagementBrand
Positioning
Consumer
Management
Distribution
Management
Marketing
Strategy
Product Distribution
Offline Channel
Shopping Mall
Duty-Free Store
Department Store
Online Channel
Comprehensive E-commerce
Platform
Emerging E-commerce Platform
Official Website
Water
Product Manufacturing
…Self-Operation of Proprietary Perfume Brands
End Consumer
Brand-Owner
Perfume Group
Non-Brand Owner
Perfume Group
LicensingOBM
OEM
ODM
Sales
Strategy
…
…
Cosmetics Specialty Store
…
Primary Licensee
…
Source: The Frost & Sullivan Report
Industry Midstream
Market deployment and other operating activities are in the midstream of perfume
industry, which include two main business models: (i) self-operation by brand-owner perfume
group, in which the brand-owner perfume group independently handles all aspects of the
business, including product development, marketing, and the establishment and oversight of
sales channels. The brand-owner perfume group has complete control throughout the entire
value chain to shape and maintain the brand’s image; and (ii) operation by a non-brand-owner
perfume group, which receives primary license directly from the brand owner or secondary
license from a primary licensee to handle all aspects of the business of the brand in designated
regions. Brand-owner perfume groups may choose to operate their brands themselves, or grant
licenses to the non-brand-owner perfume groups to operate their brands because, among others,
(i) they are solely skilled in perfumes development and need to leverage expertise of external
parties to manage the promotion and sales of the products; (ii) the lack an in-depth
understanding of the local consumer markets or possess limited sales networks in the local
markets; and/or (iii) some of them are mega-sized conglomerates with perfumes business
representing only a relatively small segment of their overall business, which makes them
inclined to involve third-party professional non-brand-owner perfume groups to handle the
marketing and sales of the branded products, allowing them to focus on other areas of their
business.
Market deployment and other operating activities conducted by non-brand-owner perfume
groups provide multiple benefits to brand-owner perfume groups, including, but not limited to,
(i) alleviating financial pressure and operational burdens for them, as they can utilize the
resources of the non-brand-owner perfume groups to rapidly enter the local markets leveraging
established sales and distribution network of the local partners; (ii) leveraging the local
expertise of the non-brand-owner perfume groups with respect to marketing strategies, brand
positioning, product management, sales strategy and distribution management to facilitate a
successful sales by cater to specific preferences and behaviors of the target consumers in the
relevant regions; and (iii) sharing the operational risks with the non-brand-owner perfume
groups.
INDUSTRY OVERVIEW
– 109 –


--- page 120 ---
Industry Downstream
The downstream of the perfume industry generally involves distribution and sales of
perfumes. The sales channels include (i) online channels, primarily including official websites,
comprehensive e-commerce platforms and emerging e-commerce platforms; and (ii) offline
channels, primarily including department stores, shopping malls, cosmetics specialty stores
and boutique and perfumeries stores. There are three sales models in the perfume industry, and
brand-owner perfume groups and non-brand-owner perfume groups generally adopt
corresponding sales model according to their demand and competitive advantages. Firstly,
brand-owner perfume groups and non-brand-owner perfume groups can sell perfume products
directly to end consumers through direct sales channels. Secondly, selling product through
retailers is also a common way for brand-owner perfume groups and non-brand-owner perfume
groups. Moreover, they also sell products through sales channels operated by distributors to
expand the market coverage and reach a wider consumer base.
Competitive Landscape
Competitive Landscape of Mainland China’s Perfume Industry
We compete with all companies that sells perfumes in mainland China, which mainly
include other non-brand-owner perfume groups and brand-owner perfume groups. We are the
fourth largest perfume group in mainland China in terms of the retail sales in 2023, with a
market share of approximately 8.1%. We ranked the first among the non-brand-owner perfume
groups in terms of retail sales of perfume products in 2023. The chart below sets forth details
of the top five perfume groups in mainland China in terms of the retail sales in 2023:
Ranking of Top 5 Perfume Groups
(1) in Mainland China, 2023
Ranking Group Name Operator Market Share (6)
1 /H1118/H1118/H1118/H1118/H1118Group A (2) Brand-Owner Perfume Group 10.4%
2 /H1118/H1118/H1118/H1118/H1118Group B (3) Brand-Owner Perfume Group 10.2%
3 /H1118/H1118/H1118/H1118/H1118Group C (4) Brand-Owner Perfume Group 9.0%
4 /H1118/H1118/H1118/H1118/H1118Our Group Non-Brand-Owner Perfume
Group
8.1%
5 /H1118/H1118/H1118/H1118/H1118Group D (5) Brand-Owner Perfume Group 7.2%
Source: The Frost & Sullivan Report
Notes:
(1) Perfume group refers to the company that operates perfume brands, including both the brand owners,
which have proprietary ownership over the brands, and non-brand-owner perfume groups, which are
licensed by the brand owners or primary licensees to conduct product distribution and market
deployment for the brands.
(2) Group A is a private company, which was founded in 1910 in France and provides consumers with,
among others, clothing, perfumes and accessories.
INDUSTRY OVERVIEW
–1 1 0–


--- page 121 ---
(3) Group B is a listed company based in France and founded in 1987, which mainly provides consumers
with perfumes, cosmetics and jewelry.
(4) Group C is a listed company based in France and founded in 1909, which provides consumers with
skincare products and cosmetics, among others.
(5) Group D is a listed company based in the United States and founded in 1946, which mainly provides
consumers with cosmetics and perfumes.
(6) The market shares are calculated solely based on sales of perfume, including extrait de parfum, eau de
parfum, eau de toilette and eau de cologne concentrations, but do not include non-perfume products such
as home fragrances and personal care products.
Seven brands for which we conduct product distribution and market deployment in
mainland China were among the top 30 perfume brands in mainland China in terms of the retail
sales in 2023, with a market share of approximately 4.0%, 1.6%, 0.7%, 0.7%, 0.4%, 0.4% and
0.3%, respectively. Among the operators of the top 30 perfume brands, we were the one of the
only two non-brand-owner perfume groups.
According to Frost & Sullivan, the leading effect is evident among non-brand-owner
perfume groups in the perfume industry in both mainland China and China (including Hong
Kong and Macau). The competitive landscape of non-brand-owner perfume groups in China
(including Hong Kong and Macau) mainly consists of two large-scale leading groups and a
number of small- and medium-scale market participants.
Competitive Landscape of Perfume Industry in China (including Hong Kong and Macau)
We compete with all companies that sells perfumes in China (including Hong Kong and
Macau), which mainly include other non-brand-owner perfume groups and brand-owner
perfume groups. Such competition primarily resulted from (i) the fact that other brand-owner
perfume groups and non-brand-owner perfume groups target similar consumer groups; (ii) the
absence of consistently top-selling brands or products that dominate the perfumes market in
China (including Hong Kong and Macau); and (iii) the subjective and constantly evolving
consumer preferences.
INDUSTRY OVERVIEW
– 111 –


--- page 122 ---
We are the third largest perfume group in China (including Hong Kong and Macau) in
terms of retail sales in 2023, with a market share of approximately 9.3%. The chart below sets
forth details of the top five perfume groups in China (including Hong Kong and Macau) in
terms of the retail sales in 2023:
Ranking of Top 5 Perfume Groups
(1) in China (including Hong Kong
and Macau), 2023
Ranking Group Name Operator Market Share (2)
1 /H1118/H1118/H1118/H1118/H1118Group A Brand-Owner Perfume Group 10.6%
2 /H1118/H1118/H1118/H1118/H1118Group B Brand-Owner Perfume Group 9.4%
3 /H1118/H1118/H1118/H1118/H1118Our Group Non-Brand-Owner Perfume
Group
9.3%
4 /H1118/H1118/H1118/H1118/H1118Group C Brand-Owner Perfume Group 9.1%
5 /H1118/H1118/H1118/H1118/H1118Group D Brand-Owner Perfume Group 8.3%
Source: The Frost & Sullivan Report
Notes:
(1) Perfume group refers to the company that operates perfume brands, including both the brand-owner
perfume groups, which have proprietary ownership over the brands, and non-brand-owner perfume
groups, which are licensed by the brand owners or primary licensees to conduct product distribution and
market deployment for the brands.
(2) The market shares are calculated solely based on sales of perfume, including extrait de parfum, eau de
parfum, eau de toilette and eau de cologne concentrations, but do not include non-perfume products such
as home fragrances and personal care products.
8 brands for which we conduct product distribution and market deployment in perfumes
market in China (including Hong Kong and Macau) are among the top 30 perfume brands in
this combined market in terms of the retail sales in 2023, with a market shares of approximately
4.2%, 1.6%, 0.8%, 0.7%, 0.5%, 0.4%, 0.4% and 0.3%, respectively. Among the operators of the
top 30 perfume brands, we were the one of the only two non-brand-owner perfume groups.
INDUSTRY OVERVIEW
–1 1 2–


--- page 123 ---
Growth Drivers and Development Trends of Mainland China’s Perfumes Market
The key growth drivers of Mainland China’s perfumes market are set forth below:
 Synergy of economic growth and the development of e-commerce catalyze the
perfume penetration in lower-tier cities : Perfume has become a part of the daily life
of the middle class in lower-tier cities in mainland China due to the economic
development and rapid urbanization in lower-tier cities, which improved the
financial status of the rising middle class in these regions and fostered their
awareness of personal image and taste. Moreover, online channels provide an
expansive and accessible platform for perfume brands to meticulously target their
consumer base, conduct precision marketing and deliver personalized
recommendations, which enhanced the purchasing desire of consumers and fostered
strong brand loyalty. Accordingly, the development of e-commerce allowed perfume
brands to further penetrate mainland China’s market, especially in lower-tier cities
where online channels can still effectively reach without brick-and-mortar stores.
 Increasing usage of perfume leads to increasing purchase frequency : In the wake of
increasing awareness of perfume products among Chinese consumers, there is an
increasing number of consumers who have begun to apply multiple times of the
same perfume or apply different types of perfume for diversified occasions during
the day. Increasing usage of perfume leads to increasing purchase frequency, which
has stimulated the growing momentum of the perfume industry in mainland China.
 Diversification of consumption scenarios stimulates more consumer demand :I n
recent years, as the social value and collection value of perfumes have been
receiving increasing attention, Chinese consumers are gradually purchasing
perfumes not only for personal daily use, but also for the purpose of collection and
gifts, among others. The continuous diversification of consumption scenarios of
perfumes will continue to stimulate the growth of consumption demand, thereby,
further promote the expansion of the market size of the perfume industry in
mainland China.
 Favorable governmental policies : Favorable government policies have boosted the
growth of the duty-free channels in mainland China, especially benefiting the
perfume sector, which is a key product category in such channels. In June 2020, the
MOF, the SA T and the General Administration of Customs jointly issued the Policy
of Duty-Free Shopping for Hainan Outlying Island Visitors (е೼ᒅ
ഄ), which stipulated tax-free shopping policy for outlying island travelers in
Hainan Province. This policy raised the annual tax-free shopping quota to
RMB100,000 per person, expanded the range of duty-free goods, removed the
RMB8,000 limit of value per item, and increased the maximum cosmetics purchases
to 30 items that travelers are allowed to take with them for each trip. These favorable
adjustments have strengthened the attractiveness of Hainan’s duty-free shopping,
raised spending limits, and broadened the product selection, which help drive the
INDUSTRY OVERVIEW
–1 1 3–


--- page 124 ---
growth of the duty free channels and benefit the industries for the relevant products,
including perfumes. In August 2024, the MOF, the MOFCOM, the Ministry of
Culture and Tourism of the PRC, the General Administration of Customs and the
SA T jointly promulgated the Interim Measures for the Administration of Downtown
Duty-Free Shops (). This new policy introduced
enhanced regulations for downtown duty-free shops to foster orderly and sustainable
growth. In addition, duty-free shops in 13 cities in mainland China, including
Beijing and Shanghai, will be converted from foreign exchange duty-free stores into
downtown duty-free shops, with eight new stores to be launched in other major
cities, such as Guangzhou, Chengdu and Shenzhen. This policy signals a steady
expansion of the duty-free sector, which, we believe, stimulate the industry growth
of the relevant products sold in duty-free channels, including perfumes.
The key development trends of mainland China’s perfumes market are set forth below:
 Mainland China is becoming the next global frontier for perfumes : Mainland China
has one of the fastest-growing perfumes market in the world and it is expected to
continue such momentum in the future. Existing perfume brands have launched
exclusive perfume products for Chinese consumers in the past, and more brands are
planning to explore exclusive product lines in the Chinese market. Furthermore,
there was an increasing number of international brands entering the Chinese market.
According to Frost & Sullivan, more international brands are eager to establish their
presence in China in the near future.
 International perfume brands cooperate with local operators : International perfume
brands were generally recognized for their premium quality, long track record of
operating history and inspiring brand philosophy. However, there are some entry
barriers for them to establish and expand business operations in mainland China,
including weak relationships with major retailers, limited distribution networks, and
lack of understanding of the Chinese market and Chinese consumer preferences,
among other things. The cooperation between international perfume brands and
local operators forms a formidable and mutually beneficial partnership. Local
operators are among the key factors for the success of international perfume brands.
 Integration among online and offline channels : Unlike other consumer industries,
offline experience is vital to the perfumes industry, in which consumers need to
smell and experience the perfumes to understand their features. Similarly, the online
platform is the major channel for news feeds and shopping. There will be an
increasing integration between the offline stores and online platforms, in which
consumers learn detailed information about the products on online platform, and
then have first-hand experience with interested products offline. As pricing of online
and offline channels are converging, offline channels with better experience remain
the preferred choice for most end consumers to purchase perfume.
INDUSTRY OVERVIEW
–1 1 4–


--- page 125 ---
 International brands continue to dominate the market : International brands continue
to maintain their dominant position due to their exceptional quality, strong brand
influence, and advanced market strategies. Moreover, companies of international
brands possess extensive capabilities in research and development, technology and
product innovation, which allow them to cater to the diverse needs of consumers.
These brands also adeptly employ various marketing strategies to enhance brand
awareness and influence, which effectively attract consumers, further solidifying
their dominance in the market. Chinese consumers increasingly prioritize personal
image and quality of life, leading to a rising demand for lifestyle products, such as
perfumes, during which quality and brand reputation are also taken into
consideration.
Key Entry Barriers in Mainland China’s Perfumes Market
The key entry barriers of mainland China’s perfumes market include the following:
 Comprehensive capabilities and resources on operation : The perfume business
requires comprehensive capabilities regarding product development, marketing,
sales coverage and risk-sharing. Leading perfume brands are more likely to recruit
or cooperate with top perfume makers due to their financial position and reputation.
Furthermore, leading perfume brands are normally under a mega-sized cosmetics
group that has a generous budget for marketing, and are able to balance any loss of
perfume product lines with other revenue-making product lines. They normally have
more than one successful product lines.
 Profound brand history : Perfume is considered as non-essential consumer product,
which means that people tend to purchase it while they begin to pursue a
high-quality lifestyle. With respect to perfumes, consumers tend to weigh more on
product quality and emotional interaction with the brand over price. Hence, perfume
brands with profound brand history naturally gain more attraction to consumers.
 Strong capital resource : Unlike other consumer products, product manufacturers
might leverage existing mold or raw materials to reduce cost, however, each flavor
of perfume requires a high degree of customization on production that large amount
of upfront cost is inevitable. The scent is extremely subjective among consumers,
and the return on each flavor is highly unpredictable. Those brands with strong
capital resources have a better chance to launch a successful scent and extend their
market understanding to develop more successful scents.
INDUSTRY OVERVIEW
–1 1 5–


--- page 126 ---
 V enturing into mainland China’ s perfumes market poses challenges for international
brands : Entering the Chinese market poses a formidable challenge for international
perfume brands due to cultural disparities, local competition, regulatory constraints
and the need to build robust sales networks and brand recognition. Consequently,
partnering with local non-brand-owner perfume groups, such as our Company,
becomes crucial. The expertise of local non-brand-owner perfume groups in
regulatory nuances, insights into branding and marketing strategies, and ability to
promote a brand’s culture and awareness demand profound knowledge of the local
markets, experienced and highly skilled teams of professionals, and considerable
time and capital investments.
 An extensive, efficient and multi-channel sales network : Establishing a sales
network requires substantial investments in infrastructure, logistics and distribution
channels. To maintain this network also requires meeting regulatory requirements
and building partnerships with distributors, retailers and e-commerce platforms.
Accordingly, established non-brand-owner perfume groups with strong sales and
distribution networks hold a competitive advantage, making it challenging for
newcomers to compete with them effectively.
INDUSTRY OVERVIEW
–1 1 6–


--- page 127 ---
OVERVIEW OF MAINLAND CHINA’S OTHER MAJOR COSMETICS INDUSTRY
Overview of Mainland China’s Skincare Industry
Skincare products refer to products that improve skin integrity, provide relief to skin
conditions and address specific skin concerns, including acne, dark spots, hyperpigmentation,
fine lines and inflammation. Skincare products can be mainly divided into facial care, body
care, hand care and others. Facial care products include, among others, facial cleanser, toner,
facial moisturizer, essence, cream, face mask and sun protection. Body care products include,
among others, body cream and body lotion. Hand care products include, among others, hand
cream, hand lotion and hand sanitizer.
The market size in terms of retail sales of skincare products in mainland China increased
from RMB309.7 billion in 2018 to RMB463.0 billion in 2023 with a CAGR of approximately
8.4%, and is expected to grow to RMB701.1 billion in 2028 with a CAGR of approximately
8.7%. The following chart illustrates the market size of mainland China’s skincare market by
online and offline channels from 2018 to 2028:
Market Size of Skincare Industry in Mainland China in terms of Retail Sales
by Online and Offline Channel, 2018-2028E
Online Channel
Offline Channel
CAGR
Online Channel
Offline Channel
Overall
13.6%
4.0%
8.4%
2018-2023
11.0%
5.8%
8.7%
2023-2028E
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
182.3 204.2 211.2 233.3 213.9 222.3 231.5 246.9 262.5 278.1 294.5
127.4 151.7
198.9
231.6 227.1 240.8
268.5
301.7
335.4
370.2
406.6
309.7
355.9
410.1
464.9 441.0 463.0
500.1
548.6
597.9
648.3
701.1
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
INDUSTRY OVERVIEW
–1 1 7–


--- page 128 ---
Overview of Mainland China’s Color Cosmetics Industry
Color cosmetics refer to the act of applying makeup to emphasize or alter the colors of
one’s skin, lips, eyes, face, or other areas of the body in daily life, which aim at accentuating
personal features, enhancing skin tone, or creating diverse appearance styles. Color cosmetics
products can be mainly divided into (i) facial products, such as foundation, concealer, powder,
blusher and highlighter; (ii) eye products, such as eye liner, eye shadow and mascara; (iii) lip
products, such as lipstick and lip gloss; and (iv) others.
The market size in terms of retail sales of color cosmetics in mainland China increased
from RMB93.0 billion in 2018 to RMB116.8 billion in 2023 with a CAGR of approximately
4.7%, and is expected to grow to RMB175.2 billion in 2028 with a CAGR of approximately
8.4%. The following chart illustrates the market size of mainland China’s color cosmetics
market from 2018 to 2028:
Market Size of Color Cosmetics Industry in Mainland China
in terms of Retail Sales, 2018-2028E
93.0
104.5
115.0
129.5
111.2 116.8
126.1
138.4
150.8
162.8
175.2
2028E2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
2018-2023 2023-2028ECAGR
4.7% 8.4%Color Cosmetics
RMB Billion
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
INDUSTRY OVERVIEW
–1 1 8–


--- page 129 ---
Overview of Mainland China’s Personal Care Industry
Personal care refers to products that can clean and repair the skin, body and hair, among
others, of people, which mainly include bath and shower products, hair care and oral care
products.
The market size in terms of retail sales of personal care in mainland China increased from
RMB202.2 billion in 2018 to RMB268.5 billion in 2023 with a CAGR of approximately 5.8%,
and is expected to grow to RMB359.7 billion in 2028 with a CAGR of approximately 6.0%.
The following chart illustrates the market size of mainland China’s personal care market from
2018 to 2028:
Market Size of Personal Care Industry in Mainland China
in terms of Retail Sales, 2018-2028E
202.2
222.3
245.1
267.9 259.4 268.5 283.3
302.4
321.2
340.3
359.7
2028E2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
2018-2023 2023-2028ECAGR
5.8% 6.0%Personal Care
RMB Billion
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
Growth Drivers and Development Trends of Mainland China’s Other Major Cosmetics
Market
The key growth drivers of mainland China’s other major cosmetics market are set forth
below:
 Growing willingness and capabilities to consume : With the steady growth of
mainland China’s economy and the improvement in the living standards of Chinese
people, per capita expenditure on cosmetics products in mainland China is expected
to grow. In addition, the economic development and acceleration of urbanization
have gradually enhanced the purchasing power and awareness of personalized
lifestyle among consumers in mainland China’s lower-tier cities. The development
INDUSTRY OVERVIEW
–1 1 9–


--- page 130 ---
of e-commerce has also enabled brands to directly deliver products, convey brand
philosophy and provide beauty knowledge to consumers in lower-tier cities. As a
result, there are significant opportunities and potential in the cosmetics market in
lower-tier cities.
 Youthful and diversified consumer groups: The demand for beauty and personality
expression among the younger generation is growing. This is primarily driven by
their exposure to various beauty information and recommendation on the internet,
films, television shows and anime imitation makeups trends, making them a crucial
consumer force in this market. In addition, mature consumers are increasingly
purchasing premium products, and male consumers are becoming more attentive to
their image, both of which further drive the market’s growth.
 Development of emerging social media and e-commerce channels: The emergence of
media platforms and innovative marketing methods has enhanced the shopping
experience for internet users and fostered their interests in cosmetics products.
Consumer experiences and recommendations shared on social media and
e-commerce channels can stimulate the purchasing desire of other consumers. In
addition, the growth of these platforms provides a more convenient shopping
experience, allowing consumers to access detailed information and tutorials on
cosmetics products.
The key development trends of mainland China’s other major cosmetics market are set
forth below:
 Popularity of multi-brand operational model: It is essential for the companies to
adopt a multi-brand strategy to effectively compete with competitors. By offering
multiple brands, cosmetics companies can better address the specific demands of
various consumers. This approach also allows companies to flexibly formulate
differentiated sales and marketing strategies tailored to different consumer
segments. Furthermore, a multi-brand operational model mitigates risks associated
with business concentration and market volatility.
 Brand power development: Both the leading brands and emerging brands are
actively enhancing their brand power and competitiveness. Emerging brands are
increasingly focusing on product research and development, incorporating
internationally advanced technologies and concepts. Meanwhile, leading brands are
leveraging various marketing channels to boost their brand awareness, including
active participation in fashion events and collaborations with social media
influencers.
INDUSTRY OVERVIEW
– 120 –


--- page 131 ---
 Increasing investment on research and development: Companies in this market are
continuously innovating to enhance product quality, develop products tailored to
different skin type, and meet the aesthetic preferences of Chinese consumers. They
are also increasing investing in product design, integrating fashion and personality
to make products more visually attractive, fashionable and unique, thereby
enhancing brand image.
OVERVIEW OF MAINLAND CHINA’S EYEWEAR INDUSTRY
Overview
Eyewear refers to the corrective or protective devices for the eyes, including spectacles,
sunglasses, contact lenses and solutions.
The market size in terms of retail sales of eyewear in mainland China increased from
RMB83.4 billion in 2018 to RMB91.3 billion in 2023 with a CAGR of approximately 1.8%.
The outbreak of the COVID-19 pandemic has led to a slight decline in the market size of the
mainland China’s eyewear industry from 2020 to 2022. However, it has returned to a growth
trend in 2023 and grow to RMB123.9 billion in 2028 with a CAGR of approximately 6.3%. The
following chart illustrates the market size of mainland China’s eyewear market from 2018 to
2028:
Market Size of Eyewear Industry in Mainland China in terms of Retail Sales
by Product Categories, 2018-2028E
Spectacles
Contact Lenses and Solutions
Sunglasses
CAGR 2018-2023 2023-2028E
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
9.6
10.7
66.8
10.3
11.5
60.9
10.3
10.4
67.2
12.1
11.1
58.3
12.1
9.1
67.9
13.5
10.0
72.7
14.7
10.7
77.3
16.0
11.3
81.9
17.2
12.0
86.3
18.6
12.7
90.5
63.1
13.4
83.4 88.6
81.6
90.4
19.9
91.3
98.0
104.6
111.1
117.6
123.9
79.5
Spectacles 1.4% 5.9%
Contact Lenses and Solutions 7.0% 8.1%
Sunglasses -1.3% 6.1%
Overall 1.8% 6.3%
Source: Frost & Sullivan Report
INDUSTRY OVERVIEW
– 121 –


--- page 132 ---
Growth Drivers and Development Trends of Mainland China’s Eyewear Market
The key growth drivers of mainland China’s eyewear market are set forth below:
 Increasing awareness of visual health : The rapid development of technologies
resulted in people’s long-term use of electronic devices, which usually caused vision
problems for users. Accordingly, they pay more attention to visual health. In
addition, increased outdoor activities created more usage scenarios for sunglasses.
As a result, consumer demand for sunglasses, spectacles and other eyewear products
has grown rapidly.
 Rapid development of online sales channels : Consumers are getting more acclimated
to online shopping due to, among other things, the changing shopping habits
cultivated during the COVID-19 pandemic and the market development efforts by
cross-border e-commerce merchants. In addition, live streaming e-commerce and
group-buying have become the leading strategies for many brands to reach
consumers. The strong performance of online sales channels will drive the growth
of mainland China’s eyewear market.
 Continuously diversified design of eyewear brand : As Chinese consumers have
increasingly pursued individuality, distinctiveness and a wider selection of color and
shapes, eyewear brands have begun to introduce a broader range of options, which
resulted in many types of eyewear fashion accessories becoming available to
accommodate varying personal styles and tastes. Accordingly, there will be more
diversified designs and application scenarios in the eyewear market, which will
promote the development of mainland China’s eyewear industry.
The key development trends of mainland China’s eyewear market are set forth below:
 Sales models of brand collection stores develop rapidly : One-stop shopping
experience offered by brand collection stores provide an extensive selection of
brands, styles, sizes, and designs of eyewear, catering to different preferences of and
occasions for consumers. It allows consumers to find suitable eyewear more
expediently. Non-brand-owner perfume groups offering one-stop shopping
experiences can curate products from reputable brands, ensuring that the products
meet quality standards.
 More cooperation between international eyewear brands and domestic non-brand-
owner perfume groups : International brands are increasingly looking to enter or
expand their presence in mainland China. Their lack of familiarity with the local
consumer preferences often leads them to seek collaboration with established
non-brand-owner perfume groups that have extensive local market expertise, which
enables them to achieve a greater market share.
INDUSTRY OVERVIEW
– 122 –


--- page 133 ---
 Accelerating industrial digital transformation : Mainland China’s eyewear industry
is expected to continue to promote digital changes in the future, which will lead to
increased adoption of digital technologies and online sales channels. The adoption
of these digital technologies is expected to improve the overall efficiency of
mainland China’s eyewear industry and enhance the competitiveness of market
participants. It will also lead to more personalized shopping and wearing
experiences for consumers, promoting further growth and development of mainland
China’s eyewear industry.
OVERVIEW OF MAINLAND CHINA’S HOME FRAGRANCES INDUSTRY
Home fragrances refer to various products aimed at enhancing the ambiance and air
quality within households, including, among others, scented candles, diffusers, room sprays,
essential oils, fragrance stones, and diffusing devices designed to release pleasant aromas to
create a comforting home atmosphere.
During the COVID-19 pandemic, residents were often forced to spend more time at home,
which led to an increased emphasis on the quality of the home environment and a desire for
emotional value and socialization. This trend had propelled the rapid expansion of mainland
China’s home fragrance industry. As the consumption habits for home fragrances and the
demand for improved quality of home life continue to evolve, the home fragrances market is
expected to continue to grow.
The market size in terms of retail sales of home fragrances in mainland China increased
from RMB1.7 billion in 2018 to RMB6.4 billion in 2023 with a CAGR of approximately
30.4%, and is expected to grow to RMB14.7 billion in 2028 with a CAGR of approximately
18.1%. The following chart illustrates the market size of mainland China’s home fragrances
market from 2018 to 2028:
Market Size of Home Fragrances Industry in Mainland China
in terms of Retail Sales, 2018-2028E
CAGR
Home Fragrances 30.4%
2018-2023
18.1%
2023-2028E
RMB Billion
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
1.7
2.3
3.2
4.3
5.4
6.4
7.6
9.0
10.6
12.5
14.7
Source: National Bureau of Statistics of the PRC and the Frost & Sullivan Report
INDUSTRY OVERVIEW
– 123 –


--- page 134 ---
This section sets out summaries of certain aspects of mainland China and Hong Kong
laws and regulations which are relevant to the operation and business of our Company.
LA WS AND REGULATIONS RELATING TO OUR BUSINESS OPERATIONS IN
MAINLAND CHINA
Regulations on Corporation
The establishment, operation and management of corporate entities in mainland China are
governed by the PRC Company Law () (the “PRC Company Law”),
which was promulgated by the SCNPC in December 1993 and last amended on December
2023. The latest amendment will be effective beginning in July 2024. The main amendments
in the PRC Company Law involve improving the company’s establishment and exit system,
optimizing the company’s organizational structure, detailing exercise of shareholder rights,
perfecting the company’s capital system and strengthening the responsibilities of controlling
shareholders and management personnel, etc. The PRC Company Law provides for the
establishment, corporate structure and corporate management of companies, which also applies
to foreign-invested enterprises. Where laws relating to foreign investment provide otherwise,
such stipulations shall apply.
Regulations Relating to Foreign Investment
On January 1, 2020, the PRC Foreign Investment Law ()
(the “Foreign Investment Law”) promulgated by the NPC and the Regulations for
Implementation of the PRC Foreign Investment Law (ૢ
Է) promulgated by the State Council came into effect and became the principal laws and
regulations governing foreign investment in mainland China, replacing three previous major
laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint
V enture Enterprise Law (), the Sino-foreign
Cooperative Joint V enture Enterprise Law (), and the
Wholly Foreign-invested Enterprise Law (), together with
their implementation rules and ancillary regulations.
According to the Foreign Investment Law, “foreign investment” refers to the investment
activities conducted directly or indirectly by foreign individuals, enterprises or other entities
in mainland China, including the following circumstances: (i) the establishment of foreign-
invested enterprises in mainland China by foreign investors solely or jointly with other
investors; (ii) a foreign investor’s acquisition of shares, equity interests, property portions or
other similar rights and interests of enterprises in mainland China; (iii) investment in new
projects in mainland China by foreign investors solely or jointly with other investors; and (iv)
investments made by foreign investors through means provided in laws, administrative
regulations, or other methods prescribed by the State Council.
REGULATORY OVERVIEW
– 124 –


--- page 135 ---
The Foreign Investment Law and its implementation regulations provide that a system of
pre-entry national treatment and negative list shall apply to the administration of foreign
investment, where “pre-entry national treatment” means that the treatment given to foreign
investors and their investments at market entry stage is no less favorable than that given to
domestic investors and their investments, and “negative list” means the special administrative
measures for foreign investment’s entry to specific fields or industries. Foreign investments not
in the fields of the negative list will be granted national treatment. Foreign investors shall not
invest in the prohibited fields as specified in the negative list, and foreign investors who invest
in the restricted fields shall comply with certain special requirements on shareholding and
senior management personnel. According to the Special Administrative Measures for Access of
Foreign Investment (Negative List) (2024 Edition) (݄(૶ఊ)
(2024و)), which took effect on November 1, 2024, our business does not fall under such
categories where foreign investment is restricted or prohibited.
On December 30, 2019, the MOFCOM and the State Administration of Market Regulation
(the “SAMR”) jointly promulgated the Measures for Information Reporting on Foreign
Investment (), which became effective on January 1, 2020.
Pursuant to the measures, where a foreign investor directly or indirectly carries out investment
activities within mainland China, the foreign investor or the foreign-invested enterprise shall
submit the investment information to the competent commerce department through the
enterprise registration system and the national enterprise credit information publicity system.
REGULATIONS RELATING TO PRODUCT LIABILITY AND CONSUMER
PROTECTION
The PRC Product Quality Law () (the “Product Quality
Law”) promulgated by the SCNPC, which took effect on September 1, 1993, and was last
amended on December 29, 2018, sets out the requirements to strengthen quality control of
product and the measures that sellers shall adopt to maintain the quality of products for sale.
Pursuant to the Product Quality Law, sellers shall establish and implement purchase inspection
and acceptance system and verify the product qualification certificate and other marks. Sellers
shall not mix impurities or imitations into products, or take counterfeit goods as genuine ones,
defective products as good ones, or substandard products as standard ones. Violations of the
Product Quality Law may result in confiscation of illicit products and imposition of fines. In
addition, relevant sellers will be ordered to suspend its operations, with business license
revoked and criminal liability incurred in serious cases. According to the Product Quality Law,
consumers or victims who suffer injuries or property losses due to product defects may demand
compensation from either the producer or the seller. Where the liability lies with the producer,
the seller shall, after settling the claim, have the right to recover such claim from the producer,
and vice versa.
REGULATORY OVERVIEW
– 125 –


--- page 136 ---
The Law of PRC on the Protection of the Rights and Interests of Consumers ( ʕശɛ
) (the “Consumer Protection Law”) promulgated by the SCNPC,
which became effective on January 1, 1994 and was last amended on October 25, 2013, sets
out the obligations of business operators and the rights and interests of the consumers in
mainland China. Pursuant to the Consumer Protection Law, business operators shall ensure that
their goods or services provided satisfy the requirements for personal or property safety, and
provide consumers with authentic and complete information about the quality, function, usage
and shelf life of the products or services. Where a business operator has discovered a defect
in its goods or services provided which may harm personal or property safety, it shall
immediately report to the relevant administrative authorities and notify consumers, and adopt
measures such as suspension of selling, alert, recall, decontamination, and destruction.
Violations of the Consumer Protection Law may result in warning, the confiscation of illegal
income, and the imposition of fines. In addition, relevant business operator will be ordered to
suspend its operations, with business license revoked and criminal liability incurred in serious
cases. According to the Consumer Protection Law, a consumer whose legal rights and interests
are prejudiced during the purchase or use of goods may demand compensation from the seller.
Where the liability lies with the producer or another seller that provides the goods to the seller,
the seller shall, after settling the claim, have the right to recover such claim from that
manufacturer or such other sellers. Consumers or parties who suffer injuries or property losses
due to product defects may demand compensation from the producer as well as the seller.
Where the liability lies with the producer, the seller shall, after settling the claim, have the right
to recover such claim from the producer, and vice versa.
REGULATIONS RELATING TO THE CIRCULATION OF COMMODITIES
Cosmetics Sales
The Cosmetics Supervision and Administration Regulation (္ຖ၍ଣૢԷ)
promulgated by the State Council, which became effective on January 1, 2021, requires that the
cosmetics operators shall establish and implement the inspection and recording system for the
purchased goods to verify the market entity registration certificates, cosmetics registration or
record-filing situations and the ex-factory inspection conformity certificates of the suppliers,
and shall truthfully record, and keep the relevant vouchers. Special cosmetics and ordinary
cosmetics may be imported only after they are registered or filed with the medical products
regulatory department. The Administrative Measures for the Registration and Record-filing of
Cosmetics () promulgated by the SAMR, which became
effective on May 1, 2021, requires that prior to marketing or importation of any general
cosmetics, after the relevant record-filing person submits record-filing data via the information
service platform as required by the National Medical Products Administration (the “NMPA”),
the record-filing shall be deemed as completed instantly. We are required to complete the
relevant record-filing for our cosmetics products, which include perfumes, skincare products,
color cosmetics and personal care products, before importing them into mainland China.
REGULATORY OVERVIEW
– 126 –


--- page 137 ---
Our cosmetics products are subject to labeling requirements. According to the Measures
for the Administration of Cosmetics Labels () which was issued on
May 31, 2021 and became effective on May 1, 2022, the smallest sales unit of cosmetics shall
be labeled. The labels shall comply with the requirements of the relevant laws, administrative
regulations, departmental rules, compulsory national standards, and technical specifications.
The contents of the labels shall be lawful, authentic, complete, and accurate and consistent with
the relevant contents registered or filed for record.
Pursuant to the Provisions for Supervision and Administration of Manufacturing and
Marketing of Cosmetics () promulgated by the SAMR,
which became effective on January 1, 2022, and the release of the Measures for the Supervision
and Administration of the Online Operation of Cosmetics ()
(the “Measures for the Online Operation of Cosmetics”) promulgated by the NMPA, which
became effective on September 1, 2023, the cosmetics operators (including Platform-based
cosmetics operators) shall establish and execute a record-checking system for goods. The
Measures for the Online Operation of Cosmetics requires the operators are also expected to
fulfill their obligation to disclose the information of cosmetics, and they should also cooperate
with the e-commerce platform operator of cosmetics for the administration of quality and
product safety. Once the operators spot any cosmetics with quality defects or could cause
damage to the human body, they should stop the sale immediately and inform the relevant
entity who made the registration or the filling. In addition, the operators should store their
cosmetics in accordance with the relevant laws and regulations and the requirements indicated
on the labels of the cosmetics, and regularly check upon the cosmetics, and dispose of the ones
that are deteriorated or have passed the expiry date. We sell our cosmetics products both online
and offline, and are subject to the aforementioned requirements.
According to the Import and Export Cosmetics Inspection and Quarantine Supervision
and Administration Measures () which took effect on
February 1, 2012 and was last amended on November 23, 2018, imported cosmetics are
required to be inspected and quarantined by customs agencies. Consignee of imported
cosmetics shall record imported cosmetics sales, record-keeping period shall not be less than
2 years. Imported cosmetics shall be stored in the inspection and quarantine institutions
designated or approved place before obtain of the inspection and quarantine certificate, in such
case, any transport, sales, use by entity or individual is prohibited without the permission of
the inspection and quarantine institutions, We import our cosmetics products into mainland
China and are subject to the inspection and quarantine requirements.
Medical Devices Sales
Pursuant to the Regulation on the Supervision and Administration of Medical Devices
(ᔼᐕኜ૛္ຖ၍ଣૢԷ) promulgated by the State Council, as effective on April 1, 2000
and last amended on January 20, 2025, and the Measures on Supervision and Administration
of Business Operations of Medical Devices () promulgated by
the SAMR on March 10, 2022 and became effective on May 1, 2022, medical devices are
administered by categorization according to their risk levels, no license or filing is required for
REGULATORY OVERVIEW
– 127 –


--- page 138 ---
the sale of Class I medical devices, filing is required for the sale of Class II medical devices,
and a license is required for the sale of Class III medical devices. Recording system for the
medical devices are required for the purchased medical devices operators, and a recording
system for sale is required for wholesalers of Class II and Class III medical devices and
retailers of Class III medical devices additionally. A few of our skincare products are classified
as Class II medical devices, and are subject to certain filing requirements. For the years ended
March 31, 2023, 2024 and 2025, our revenue generated from the sales of these skincare
products amounted to RMB1.9 million, RMB13.2 million and RMB37.2 million, which
accounted for 0.1%, 0.7% and 1.8% of our total revenue, respectively, for the same periods.
Our Company falls within the scope of “purchased medical devices operators” under the
Measures on Supervision and Administration of Business Operations of Medical Devices ( ᔼ
), and has complied with the Supervision and Administration of
Medical Devices and the Measures on Supervision and Administration of Business Operations
of Medical Devices in all material respects, including completing the filing procedures before
selling those Class II medical devices mentioned above, and keeping a recording system for
medical devices of the same.
Administration of Hazardous Chemicals
According to the Regulation on the Safety Management of Hazardous Chemicals ( Κᎈ
τΌ၍ଣૢԷ), promulgated by the State Council on January 26, 2002 and last
amended on December 7, 2013, hazardous chemicals include hyper-toxic chemicals and other
chemicals with the nature of toxic hazard, corrosiveness, explosiveness, flammability and
combustion-supporting, which are dangerous to human body, facilities and environment.
Hazardous chemicals shall be stored within the specialized warehouses, places, or storage
rooms, and managed by specially assigned personnel. In case of any violation, the production
safety supervision and administration departments shall order the parties concerned to make
rectification, and impose a fine of over RMB50,000 and less than RMB100,000. If the parties
refuse to make the rectification, they shall be ordered to suspend production and operation for
rectification till the original license issuing units revoke their relevant licenses and permits and
the SAIC order them to modify the registration of business scope or revoke their business
licenses. Mainland China carries out the licensing system for the operation of hazardous
chemicals (including storage management). Without being licensed, any units and individuals
shall not deal in hazardous chemicals. Pursuant to the response from the Ministry of
Emergency Management, the competent authority for hazardous chemicals, on its official
website, it plans to adjust the scope of hazardous chemicals business licenses to no longer
cover daily chemicals and medical supplies.
REGULATORY OVERVIEW
– 128 –


--- page 139 ---
According to the Notice on Strengthening the Safety Management of Sales of Hazardous
Chemicals through the Internet () issued
by the Ministry of Emergency Management, the Central Cyberspace Administration, the
Ministry of Education, the Ministry of Industry and Information Technology, the Ministry of
Public Security, the State Administration for Market Regulation, and the State Post Bureau on
December 3, 2022, enterprises that sell hazardous chemicals through the Internet shall legally
obtain the work safety permits of hazardous chemical production enterprises or permits for
trading in hazardous chemicals, exemption is provided for daily chemicals and medical
supplies. Our perfume products are daily chemicals and are subject to aforementioned
exemption. Some of our perfume products are required by Foshan local authority to comply
with the storage requirements for hazardous chemicals. For more details, please refer to the
sections headed “Risk Factors — Risks Relating to Our Business and Industry — We are
subject to environmental protection, fire control and health and safety laws and regulations and
may be exposed to potential costs for compliance and liabilities, including consequences of
accidental contamination, chemical or biological hazards or personal injury” and “Business —
Legal Proceedings and Compliance” in this prospectus.
Anti-Unfair Competition
The Anti-Unfair Competition Law of the PRC ()
(the “Anti-Unfair Competition Law”) promulgated by the SCNPC, which became effective on
December 1, 1993, and last amended on April 23, 2019, imposes prohibitions on improper
market activities conducted by business operators to undermine their competitors, including
forging or counterfeiting trademark, names, and marks of others, infringing business secrets of
others, making false or misleading publicity of goods through advertising or other means,
bribing, infringing upon the goodwill of competitors or the reputation of their products.
Violations of the Anti-Unfair Competition Law may result in fines, the confiscation of illegal
proceeds, and, in serious cases, revocation of business license. We are required to comply with
the anti-unfair competition rules for our operation in mainland China.
Pricing
The Pricing Law of the PRC () (the “Pricing Law”)
promulgated by the SCNPC and became effective on May 1, 1998, imposes prohibitions on
improper pricing activities committed by business operators, including manipulating market
prices, dumping goods at price lower than the costs, forcing up prices, using false or
misleading prices to deceive consumers or other business operators, and price discrimination.
Failure to comply with the Pricing Law may subject business operators to administrative
sanctions such as warning, ceasing unlawful activities, compensation, confiscating illegal
gains, and fines. The business operators may be ordered to suspend business for rectification,
or have their business license revoked if the circumstances are serious. We are required to
comply with the pricing rules for our operation in mainland China.
REGULATORY OVERVIEW
– 129 –


--- page 140 ---
Advertising
According to the Advertising Law of the PRC () promulgated
by the SCNPC which became effective on February 1, 1995, and last amended on April 29,
2021, advertisements shall not contain false or misleading contents, and shall not deceive or
mislead consumers. The Cosmetics Supervision and Administration Regulation also sets
limitations on the content included in cosmetics advertising, where the cosmetics
advertisement may not expressly or impliedly indicate that the product has any medical effect,
contain any false or misleading information, or deceive or mislead consumers.
The Regulations for the Implementation of the Consumer Rights Protection Law of the
PRC (ૢԷ)( h e r e i n a f t e rr e f e r r e dt oa st h e
“Regulations”) promulgated by the State Council, which became effective on July 1, 2024,
mainly provides detailed provisions on the obligations specified in the Consumer Protection
Law, including ensuring consumer safety in terms of both personal and property, handling
defective products, prohibiting false advertising, marking prices clearly, using standardized
terms, fulfilling quality guarantee responsibilities, and protecting consumers’ personal
information, among others. For example, business operators are required to ensure that their
business premises and facilities meet safety standards for personal and property protection and
implement necessary safety measures. Business operators must provide consumers with
truthful and comprehensive information about goods or services in an easily understandable
manner. They are prohibited from engaging in deceptive or misleading advertising through
methods such as fabricating the operator’s qualifications, credentials, or honors, fabricating
trade information or operational data, or altering, fabricating, or concealing user reviews.
Regarding online consumption, operators are prohibited from using technical means to force or
indirectly force consumers to purchase goods or accept services, or to restrict consumers’
ability to choose products or services offered by other operators. They are also prohibited from
setting different prices or charging standards for the same goods or services under equivalent
trading conditions without the consumers’ knowledge.
When promoting and selling products, our subsidiaries in mainland China must comply
with the consumer protection provisions outlined in the Consumer Protection Law and the
Regulations. Our subsidiaries in mainland China complied with all major aspects of the
Regulations during the Track Record Period and up to the Latest Practicable Date. Since the
effective date of the Regulations and up until the Latest Practicable Date, we had not been
penalized for violations of the Regulations. We believe that the implementation of the
Regulations will not have a significant adverse impact on our business operations or financial
situation.
On November 5, 2020, the SAMR promulgated the Guiding Opinions of the State
Administration for Market Regulation on Strengthening the Regulation of Online Live-
streaming Marketing Activities (ኬจ
Ԉ). According to the Guiding Opinions, commodity operators selling commodities or
providing services through online live-streaming shall abide by the relevant laws and
regulations, and establish and implement system for inspection and acceptance of Purchased
REGULATORY OVERVIEW
– 130 –


--- page 141 ---
Goods. It is not allowed to use online live-streaming to sell goods or services whose production
or sale is prohibited by laws and regulations; it is not allowed to use online live-streaming to
release commercial advertisements whose publication in mass media is prohibited by laws and
regulations; and it is not allowed to use online live-streaming to sell goods or services whose
trading is prohibited on the Internet. On March 25, 2022, the Cyberspace Administration of
China (the “CAC”), the State Administration of Taxation (the “SA T”) and the SAMR jointly
issued the Opinions on Further Regulating the Profit-making Behavior of Online Live
Streaming to Promote the Healthy Development of the Industry (ᅧ
จԈ). The aforementioned Opinions put forward some
detailed requirements for market entities related to online live-streaming services to further
regulate the relevant behaviors and maintain the market order, which shows a strengthening
regulatory trend on online live streaming and e-commerce platforms. We sell our products
offline and online, conduct online live-streaming activities, and are subject to the
aforementioned advertising requirements.
E-Commerce
According to the E-commerce Law of the PRC ()
promulgated by the SCNPC, which came into force on January 1, 2019, e-commerce operators
are referred to as natural persons, legal persons, and other non-legal-person organizations that
engaged in the business activities of sale of goods or provision of services through Internet and
other information networks, including e-commerce platform operators, business operators
using the e-commerce platform, and e-commerce business operators engaging in the sale of
goods or provision of services through their self-built website or other network services.
E-commerce business operators shall display, prominently and continuously on their
homepage, their business license information, administrative licensing information relating to
their business operation, or hyperlinks of the aforesaid information. E-commerce business
operators shall disclose information of goods or services fully, accurately and promptly, and
protect consumers’ right to know and right to choose. E-commerce business operators shall not
use false transactions, fabricated user review, etc. to conduct false or misleading business
promotion, so as to defraud or mislead consumers. As an e-commerce business operator, we are
required to comply with the rules related to e-commerce.
REGULATIONS RELATING TO FIRE PROTECTION
According to the Fire Prevention Law of the PRC () (the “Fire
Prevention Law”), promulgated by the SCNPC, which became effective on September 1, 1998
and was last amended on April 29, 2021, Interim Provisions on the Administration of Fire
Protection Design Review and Final Inspection of Construction Projects (ࠇ
), promulgated by the Ministry of Housing and Urban-rural
Development, which became effective on June 1, 2020 and was last amended on August 21,
2023, a special construction project as provided in the Interim Provisions Regarding Fire
Protection shall be subject to fire protection design review before such project was commenced
construction and shall be subject to fire protection inspection before such project was put into
use. Other construction projects other than a special construction project shall be subject to fire
REGULATORY OVERVIEW
– 131 –


--- page 142 ---
protection inspection recordation, and the competent department of housing and urban-rural
development shall conduct a random fire protection inspection thereof. If the project fails to
pass the random fire protection inspection, such project shall be ceased to use. The constructor
or user entity shall apply to the fire and rescue department of the local people’s government
at or above county level for a fire safety inspection before a public gathering place is put into
use or opens for business. Any construction illegally putting into use or operating a public
gathering place without undergoing the fire safety inspection or without satisfying the fire
safety requirements upon inspection shall be ordered to stop construction, stop use, stop
production, or business operation, and be fined.
REGULATIONS RELATING TO INTELLECTUAL PROPERTY
Copyright
On September 7, 1990, the SCNPC promulgated the Copyright Law of the People’s
Republic of China () (the “Copyright Law”), which became
effective on June 1, 1991 and was last amended on November 11, 2020. The amended
Copyright Law extends copyright protection to internet activities, products disseminated over
the internet and software products. In addition, there is a voluntary registration system
administered by the Copyright Protection Centre of China. According to the Copyright Law,
Chinese citizens, legal persons, or other organizations shall, whether published or not, own
copyright in their copyrightable works, which refer to, intellectual achievements in the fields
of literature, art and science, which are original and can be expressed in a certain form.
Copyright owners enjoy certain legal rights, including right of publication, right of authorship
and right of reproduction. An infringer of the copyrights shall be subject to various civil
liabilities, which include ceasing infringement activities, apologizing to the copyright owners
and compensating the loss of copyright owner. Infringers of copyright may also subject to fines
and/or administrative or criminal liabilities in severe situations.
In order to further implement the Regulations on Computer Software Protection (ၑ
ᚐૢԷ), promulgated by the State Council on December 20, 2001 and last amended
on January 30, 2013, the National Copyright Administration issued the Measures for the
Registration of Computer Software Copyright () on February
20, 2002, which specifies detailed procedures and requirements with respect to the registration
of software copyrights.
Trademark
Trademarks are protected by the Trademark Law of the PRC ( ʕശɛ͏΍ձ਷ਠᅺ
), which was promulgated on August 23, 1982 and last amended on April 23, 2019 as well
as the Implementation Regulation of the PRC Trademark Law (݄
ૢԷ), which was adopted by the State Council on August 3, 2002 and last amended on April
29, 2014. In mainland China, registered trademarks include commodity trademarks, service
trademarks, collective marks, and certification marks. The PRC Trademark Office of National
Intellectual Property Administration is responsible for the registration and administration of
REGULATORY OVERVIEW
– 132 –


--- page 143 ---
trademarks throughout mainland China, and grants a term of 10 years to registered trademarks.
Trademarks are renewable every 10 years where a registered trademark needs to be used after
the expiration of its validity term. A registration renewal application shall be filed within
twelve months prior to the expiration of the term. A trademark registrant may license its
registered trademark to another party by entering into a trademark license contract. The
licensor shall supervise the quality of the commodities on which the trademark is used, and the
licensee shall guarantee the quality of such commodities. The PRC Trademark Law has adopted
a “first come, first file” principle with respect to trademark registration. Where trademark for
which a registration application has been made is identical or similar to another trademark
which has already been registered or been subject to a preliminary examination and approval
for use on the same kind of or similar commodities or services, the application for registration
of such trademark may be rejected. Any person applying for the registration of a trademark may
not prejudice the existing right first obtained by others, nor may any person register in advance
a trademark that has already been used by another party and has already gained a “sufficient
degree of reputation” through such party’s use.
Patent
Patents are protected by the Patent Law of the PRC (), which
was promulgated on March 12, 1984 and last amended on October 17, 2020. The Patent Office
under the National Intellectual Property Administration 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, and a fifteen-year term for design. Except under
certain specific circumstances provided by law, any third-party user must obtain consent or a
proper license from the patent owner to use the patent, or else the use will constitute an
infringement of the rights of the patent holder.
Domain Names
On August 24, 2017, the MIIT promulgated the Administrative Measures for Internet
Domain Names () (the “Domain Name Measures”), which became
effective on November 1, 2017. The Domain Name Measures regulate the registration of
domain names, such as China’s national top-level domain name “.CN”. The applicant for
domain name registration shall provide the agency of domain name registration with true,
accurate and complete information about the domain name holder’s identity for registration
purpose. Upon the completion of the registration process, the applicant will become the holder
of the relevant domain name. The China Internet Network Information Center (the “CNNIC”)
issued the Administrative Regulations for Country Code Top-Level Domain Name Registration
() and Country Code Top-Level Dispute Resolutions Rules
() on June 18, 2019, pursuant to which the CNNIC can
authorize a domain name dispute resolution institution to decide domain name related disputes.
REGULATORY OVERVIEW
– 133 –


--- page 144 ---
REGULATIONS RELATING TO FOREIGN EXCHANGE
Under the PRC Foreign Currency Administration Rules ( ʕശɛ͏΍ձ਷̮ි၍ଣૢ
Է) promulgated by the State Council on January 29, 1996 and last amended on August 5,
2008 and various regulations issued by the State Administration of Foreign Exchange (the
“SAFE”) and other relevant PRC government authorities, RMB is generally freely convertible
for payments of current account items, such as trade and service-related foreign exchange
transactions and dividend payments, but not freely convertible for capital account items, such
as direct investment, loan, or investment in securities outside mainland China, unless the prior
approval by the SAFE or its local counterparts is obtained.
On July 4, 2014, the SAFE promulgated the Notice of State Administration of Foreign
Exchange on Issues Relating to Foreign Exchange Administration for Overseas Investment and
Financing and Round-tripping by Chinese Residents through Special Purpose V ehicles (࢕
ஷ
) (the “SAFE Circular No. 37”), which regulates foreign exchange matters in relation to
the use of special purpose vehicles by mainland China residents or entities to seek offshore
investment and financing or conduct round trip investment in mainland China. Under SAFE
Circular No. 37, a “special purpose vehicle” refers to an offshore entity directly established or
indirectly controlled by mainland China residents or entities for the purpose of seeking
offshore financing or making offshore investment, using legitimate onshore or offshore assets
or interests, and “round trip investment” refers to direct investment in mainland China by
mainland China residents or entities through special purpose vehicles, namely, establishing
foreign-invested enterprises to obtain ownership, control rights, and management rights. SAFE
Circular No. 37 provides that, before making a contribution into a special purpose vehicle,
mainland China residents or entities are required to complete foreign exchange registration
with the SAFE or its local branch. On February 13, 2015, the SAFE promulgated the Notice
of the SAFE on Further Simplifying and Improving the Foreign Currency Management Policy
on Direct Investment (ஷ
), which became effective on June 1, 2015 and was last amended on December 30, 2019.
It further amended the SAFE Circular No. 37 by requiring mainland China residents or entities
to register with qualified banks rather than the SAFE or its local branches in connection with
their establishment of an offshore entity established for the purpose of overseas investment or
financing.
REGULATORY OVERVIEW
– 134 –


--- page 145 ---
REGULATIONS RELATING TO TAX
Enterprise Income Tax
The Law of the People’s Republic of China on Enterprise Income Tax ( ʕശɛ͏΍ձ
) and The Regulations for the Implementation of the Law on Enterprise
Income Tax (ૢԷ) (collectively, the “EIT Laws”) were
promulgated on March 16, 2007, and December 6, 2007, respectively, and were last amended
on December 29, 2018 and December 6, 2024, respectively. According to the EIT Laws,
taxpayers consist of resident enterprises and non-resident enterprises. Resident enterprises are
defined as enterprises that are established in mainland China in accordance with PRC laws, or
that are established in accordance with the laws of foreign countries but whose actual or de
facto control is administered within mainland China. Non-resident enterprises are defined as
enterprises that are set up in accordance with the laws of foreign countries and whose actual
administration is conducted outside mainland China, but have established institutions or
premises in mainland China, or have no such established institutions or premises but have
income generated from inside China. Under the EIT Laws and relevant implementing
regulations, a uniform EIT rate of 25% is applicable. However, if non-resident enterprises have
not formed permanent establishments or premises in mainland China, or if they have formed
permanent establishment institutions or premises in mainland China but there is no actual
relationship between the relevant income derived in mainland China and the established
institutions or premises set up by them, the enterprise income tax is, in that case, set at the rate
of 10% for their income sourced from inside mainland China.
Value Added Tax
The Interim V alue-Added Tax Regulations of the People’s Republic of China ( ʕശɛ
೼ᅲБૢԷ) (the “V A T Regulations”) was promulgated by the State Council
on December 13, 1993 and last amended on November 19, 2017. Under the V A T Regulations,
value added tax is imposed on goods sold in or imported into mainland China and on
processing, repair and replacement services provided with in mainland China.
Transfer Pricing
Pursuant to the EIT Law and its implement rules and the Law of the People’s Republic
of China on the Administration of Tax Collection (),
which was promulgated on September 4, 1992 by the SCNPC and last amended on April 24,
2015, related party transactions should comply with the arm’s length principle. In the event that
the related party transactions fail to comply with the arm’s length principle resulting in the
reduction of the enterprise’s taxable income, the tax authority has power to make adjustments
with reasonable methods within ten years from the tax paying year that the non-compliant
related party transaction had occurred.
REGULATORY OVERVIEW
– 135 –


--- page 146 ---
Based on the Announcement of the State Administration of Taxation on Matters Relating
to the Improvement of Affiliated Declaration and Contemporaneous Document Management
(ʮѓ) promulgated and
became effective on June 29, 2016, enterprises, which have related-party transactions with
volume exceeding certain threshold shall prepare their contemporaneous documentation of
related-party transactions per tax year and submit to the tax authority if required.
REGULATION RELATING TO IMPORTATION AND EXPORTATION OF GOODS
Importation and Exportation of Goods
Under the Customs Law of the PRC () which was adopted by
the Standing Committee of the NPC on January 22, 1987 and last amended on April 29, 2021,
the consignee of imported goods, the consignor of exported goods shall make truthfully
declaration to Customs in a timely manner. The consignee of import goods shall go through the
customs formalities with the customs at the place where the goods enter the territory of
mainland China, while the consignor of export goods shall go through the customs formalities
with the customs at the place where the goods depart from the territory of mainland China. If
approved by relevant customs, the consignee of import goods may go through the customs
formalities for import goods at a designated place where customs is established, and the
consignor of export goods may go through the same at the departure place of the goods where
a customs is established.
According to the Foreign Trade Law of the PRC ()
promulgated by the Standing Committee of the NPC on May 12, 1994, and latest amended on
December 30, 2022, the requirements for foreign trade operators engaging in goods or
technology import and export to go through the record-filing registration have been abolished.
Pursuant to the Regulations of the PRC on the Administration of the Import and Export
of Goods (ආ̈ɹ၍ଣૢԷ) issued by the State Council of the PRC
and became effective on January 1, 2002, and last amended on March 10, 2024, the State
Council of the PRC shall allow free importation and exportation of goods, and maintain fair
and orderly import and export trade in goods except for the goods which is explicitly prohibited
or restricted by laws or administrative regulations.
The Provisions on the Registration of Customs Declaration Entities of the People’s
Republic of China ( (the “Provisions on the
Registration of Customs”) was promulgated by the General Administration of Customs of the
People’s Republic of China (the “GAC”) on November 19, 2021 and took effect on January 1,
2022, and repealed the Administrative Provisions of the Customs of the PRC over Registration
of Declaration Entities () which was
promulgated on March 13, 2014 and last amended on May 29, 2018. According to the
Provisions on the Registration of Customs, the consignee or consignor of imported or exported
goods or a customs declaration enterprise needs only to apply for record-filing to the customs,
with no registration with the GAC necessary any longer. The record-filing information shall be
made public via the Import and Export Credit Information Publicity Platform of the Customs
of China.
REGULATORY OVERVIEW
– 136 –


--- page 147 ---
Customs
We are subject to customs duties when importing products into mainland China. Pursuant
to the Import and Export Tariff Regulations of the PRC ( ʕശɛ͏΍ձ਷ආ̈ɹᗫ೼ૢԷ),
which was promulgated by the State Council on 7 March 1985 and last amended on March 1,
2017, all goods permitted to be imported into or exported out of and all articles allowed to enter
into mainland China shall, unless otherwise provided for by the State Council, be subject to
payment of customs duties. As for import and export goods, the valid tariff rate of the date
when the customs receives the import declaration or export declaration shall apply.
On April 26, 2024, the SCNPC passed the Tariff Law of the People’s Republic of China,
which will take effect on December 1, 2024, the basis for state administration of tariffs will
then rise from the level of regulations to the level of law.
Import Value Add Tax
We are subject to value add tax when importing our products into mainland China. Under
the V A T Regulations, value added tax is imposed on goods sold in or imported into mainland
China and on processing, repair and replacement services provided with in mainland China.
For imported goods, the V A T liability occurs when the import declaration is lodged, and the
V A T on imported goods shall be levied by customs. The MOF, the SA T, and the GAC issued
the Announcement on Relevant Policies for Deepening V alue-Added Tax Reform (ଉʷ
ʮѓ) (the “Circular 39”) on March 20, 2019 and took effect on April
1, 2019. Pursuant to Circular 39, the V A T rate for imported goods was adjusted from 16% to
13%, and the rate for those previously taxed at 10% was adjusted to 9%.
Cosmetics Consumption Tax
Pursuant to the Interim Regulations on Consumption Tax of the PRC ( ʕശɛ͏΍ձ਷
ऊ൬೼ᅲБૢԷ) took effect on January 1, 2009, institution and individual that produces,
subcontract the processing of, or import the consumer goods and other institutions or
individuals that are recognized by the State Council and sell the consumer goods shall pay
consumption tax. Taxpayers producing taxable consumer goods shall pay consumption tax
when selling the goods. For taxable consumer goods entrusted for processing, the tax shall be
withheld by the commissioned party upon delivery to the contractor unless the commissioned
party is a natural person. Imported taxable consumer goods shall be subject to tax upon import
declaration.
Pursuant to the Notice of on Adjusting Import Consumption Tax on Cosmetics (ሜ
) took effect on October 1, 2016, the levying scope is
adjusted to include the high-end beauty and polishing cosmetics and high-end skin care
cosmetics. The rate of import consumption tax on high-end beauty and polishing cosmetics and
high-end skin care cosmetics was reduced from 30% to 15%, while the import consumption tax
of ordinary cosmetics was cancelled. The high-end beauty and polishing cosmetics and
high-end skin care cosmetics refer to the cosmetics products for beauty treatment and
decoration and the cosmetics products for skin care of which the import dutiable value is at or
above RMB10 per milliliter (gram) or RMB15 per piece (sheet). A few of our products meet
the aforementioned criteria and are subject to the cosmetics consumption tax when they are
imported into mainland China.
REGULATORY OVERVIEW
– 137 –


--- page 148 ---
Import of Personal Postal Articles
Pursuant to the Import and Export Tariff Regulations, inbound personal postal articles for
personal use (as opposed to the commercial nature of general trade) that do not exceed the
amount specified by the GAC will be exempt from import tax, and those exceed the specified
amount but still within a reasonable amount and are for personal use (as opposed to the
commercial nature of general trade) will be subject to the import tax, which combines the
customs duty, import V A T and consumption tax into one form of tax.
The Customs Tariff Committee of the State Council issued the Notice concerning the
Adjustment of Import Tax of Inbound Articles ()
(the “Circular 2”), the Notice concerning the Adjustment of Import Tax of Inbound Articles
() (the “Circular 49”) and the Notice concerning
the Adjustment of Import Tax of Inbound Articles (ஷ
) (the “Circular 17”) on March 16, 2016, September 30, 2018 and April 8, 2019
respectively, which took effect on April 8, 2016, November 1, 2018 and April 9, 2019
respectively. Under the foresaid notices, three items of tax are adjusted to 13% (applying to
food and beverage, books and computer, drugs, etc.), 20% (applying to sports equipment and
textiles, etc. and those not subject to other two items) and 50% (applying to cigarettes, alcohol
and high-end cosmetics, etc.).
The personal articles brought by individuals, including our products purchased by them
overseas and brought into mainland China, may be subject to import tax if the value of such
articles exceeds a specified amount.
Taxation of Cross-border E-commerce
According to the provisions of the Circular on Taxation Policies for Cross-border
E-commerce Retail Imports () took effect on
April 8, 2016, and the Circular on the Improvement of Taxation Policies for Cross-border
E-commerce Retail Imports ()
took effect on January 1, 2019, the importation of cross-border e-commerce retail imports of
goods is subject to tariffs, V A T and consumption tax according to the goods. The individual
purchasing the cross-border e-commerce retail imports is the taxpayer, and the actual
transaction price (including the retail price of the goods, freight and insurance) as the tax-paid
price, and the e-commerce enterprise, e-commerce trading platform enterprise, or logistic
enterprise as the collector and payer on behalf of the individual. The single transaction limit
for cross-border e-commerce retail imports is RMB5,000, and the annual transaction limit for
individuals is RMB26,000. For cross-border e-commerce retail imports of commodities
imported within the limit value, the tariff rate is temporarily set at 0%; the V A T and
consumption tax on imports exemption for specified amount are abolished, and are temporarily
levied at 70% of the legally payable tax amount. When mainland Chinese residents purchase
our products through cross-border e-commerce platforms, such products will be subject to the
aforementioned tax for transactions that are within the limits.
REGULATORY OVERVIEW
– 138 –


--- page 149 ---
REGULATIONS RELATING TO LEASING
Pursuant to the Law on Administration of Urban Real Estate of the People’s Republic of
China () promulgated by the SCNPC on July 5, 1994
and last amended on August 26, 2019 and became effective on January 1, 2020, when leasing
premises, the lessor and lessee are required to enter into a written lease contract, containing
such provisions as the leasing term, use of the premises, rental and repair liabilities, and other
rights and obligations of both parties. Both lessor and lessee are also required to register the
lease with the real estate administration department. Where an owner of a house leases the
house built on the State-owned land for profit, the land-use right for which has been obtained
by means of allocation, he shall turn over to the State the proceeds derived from the land and
contained in the rent.
Also, pursuant to the Interim Regulations of the People’s Republic of China on the
Assignment and Transfer of the Right to the Use of State-owned Land in Urban Areas (revise
in 2020) (ᕄ਷ϞɺήԴ͜ᛆ̈ᜫձᔷᜫᅲБૢԷ(2020ࠈࡌ)), which
was promulgated by the State Council on May 19, 1990 and last amended on November 29,
2020, where the relevant conditions are met, the allocated land use right and the ownership of
the above-ground buildings and other attached installations may be transferred, leased or
mortgaged upon the approval of the land administration department and the real estate
administration department of the municipal or county people’s governments. In addition,
municipal or county people’s governments may, based on the needs of urban construction and
development and the requirements of urban planning, withdraw the allocated land-use right
without compensation and may assign it in accordance with the provisions of these
Regulations.
According to the PRC Civil Code (Պ), the lessee may sublease
the leased premises to a third party, subject to the consent of the lessor. Where a lessee
subleases the premises, the lease contract between the lessee and the lessor remains valid. The
lessor is entitled to terminate the lease if the lessee subleases the premises without the consent
of the lessor. In addition, if the lessor transfers the premises, the lease contract between the
lessee and the lessor will still remain valid.
On December 1, 2010, the Ministry of Housing and Urban-Rural Development
promulgated the Administrative Measures for Leasing of Commodity Housing (ॡ
), which became effective on February 1, 2011. According to such measures,
landlords and tenants are required to enter into lease contracts which should generally contain
specified provisions, and lease contracts should be registered with the relevant construction or
property authorities at municipal or county level within 30 days after its conclusion. If the
landlords and tenants fail to go through the registration procedures, both landlords and tenants
may be subject to fines. If the lease contract is extended or terminated or if there is any change
to the registered items, the landlord and the tenant are required to effect alteration registration,
extension of registration or deregistration with the relevant construction or property authorities
within 30 days after the occurrence of such extension, termination, or alteration. Also,
according to such measures, a house shall not be leased under any of the following
circumstances: (i) being an illegal building; (ii) failing to meet the compulsory standards for
REGULATORY OVERVIEW
– 139 –


--- page 150 ---
engineering construction in terms of safety, disaster prevention, etc.; (iii) changing the use
nature of the house in violation of relevant provisions; or (iv) other circumstances under which
the house is prohibited to be leased as prescribed bylaws and regulations. Where the provisions
of these Measures are violated, the competent construction (real estate) departments of the
people’s governments of the municipalities directly under the Central Government, cities and
counties shall order the violators to make corrections within a specified time limit. Where there
is no illegal income, a fine of not more than RMB5,000 may be imposed; where there is illegal
income, a fine of not less than one time but not more than three times the illegal income, but
not more than RMB30,000, may be imposed.
REGULATIONS RELATING TO EMPLOYMENT AND SOCIAL WELFARE
The Labor Contract Law
According to the Labor Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗ
) promulgated on July 5, 1994 and last amended on December 29, 2018, enterprises and
institutions shall establish and improve their system of workplace safety and sanitation, strictly
abide by state rules and standards on workplace safety, educate laborers in labor safety and
sanitation in mainland China. Labor safety and sanitation facilities shall comply with
state-fixed standards. Enterprises and institutions shall provide laborers with a safe workplace
and sanitation conditions which are in compliance with state stipulations and the relevant
articles of labor protection. The PRC Labor Contract Law (),
which was implemented on January 1, 2008 and last amended on December 28, 2012, is
primarily aimed at regulating employee/employer rights and obligations, including matters
with respect to the establishment, performance and termination of labor contracts. Pursuant to
the PRC Labor Contract Law, labor contracts shall 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 laborers to work beyond the time
limit and employers shall pay laborers for overtime work in accordance with the laws and
regulations. In addition, labor wages shall not be lower than local standards on minimum wages
and shall be paid to laborers in a timely manner.
Social Insurance and Housing Fund
As required under the Regulation of Insurance for Labor Injury (ᎈૢԷ) that
was implemented on January 1, 2004 and last amended on December 20, 2010, the Provisional
Measures for Maternity Insurance of Employees of Corporations (ᎈ༊Б፬
) implemented on January 1, 1995, the Decisions on the Establishment of a Unified
Program for Basic Old-Aged Pension Insurance for Employees of Corporations of the State
Council () issued on July 16,
1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers
of the State Council () promulgated on
December 14, 1998, the Unemployment Insurance Measures (ᎈૢԷ) promulgated
on January 22, 1999, and the Social Insurance Law of the People’s Republic of China ( ʕ
) implemented on July 1, 2011 and last amended on December 29,
2018, enterprises are obliged to provide their employees in mainland China with welfare
REGULATORY OVERVIEW
– 140 –


--- page 151 ---
schemes covering pension insurance, unemployment insurance, maternity insurance, labor
injury insurance, and medical insurance. These payments are made to local administrative
authorities. If the employer fails to make social insurance contributions in full and on time, the
social insurance authorities may demand the employer make payments or supplementary
payments for the unpaid social insurance within a prescribed time limit together with a 0.05%
surcharge of the unpaid social insurance from the due date. If the payment is not made within
such time limit, the relevant administrative authorities may impose a fine ranging from one to
three times the total outstanding amount. In accordance with the Regulations on the
Management of Housing Funds (၍ଣૢԷ) which was promulgated by the
State Council on April 3, 1999 and last amended on March 24, 2019, enterprises must register
at the competent managing center for housing funds and upon the examination by such
managing center of housing funds, these enterprises shall complete procedures for opening an
account at the relevant bank for the deposit of employees’ housing funds. Enterprises are also
required to pay and deposit housing funds on behalf of their employees in full and in a timely
manner.
LA WS AND REGULATIONS RELATED TO CYBERSECURITY AND DATA
PROTECTION
According to the Civil Code, individual’s personal information shall be protected by law,
and the processing of personal information shall be subject to the principle of legitimacy,
rightfulness and necessity, with no excessive processing.
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC ( ʕ
) (the “Cybersecurity Law”), which became effective on June 1,
2017, requires network operators to perform certain functions related to cybersecurity
protection and strengthen the network information management. For instance, under the
Cybersecurity Law, when collecting and using personal information network operators shall
abide by the “lawful, justifiable and necessary” principles. The network operator shall collect
and use personal information by announcing rules for collection and use, expressly notify the
purpose, methods and scope of such collection and use, and obtain the consent of the person
whose personal information is to be collected. The network operator shall neither collect the
personal information unrelated to the services they provide, nor collect or use personal
information in violation of the provisions of laws and administrative regulations or the
agreements with such persons and shall process the personal information they store in
accordance with the provisions of laws and administrative regulations and agreements reached
with such persons. Network operator shall not disclose, tamper with, or destroy personal
information that it has collected, or disclose such information to others without prior consent
of the person whose personal information has been collected, unless such information has been
processed to prevent specific person from being identified and such information from being
restored. Each individual is entitled to require a network operator to delete his or her personal
information if he or she finds that collection and use of such information by such operator
violate the laws, administrative regulations, or the agreement by and between such operator
and such individual; and is entitled to require any network operator to make corrections if he
or she finds errors in such information collected and stored by such operator. Such operator
REGULATORY OVERVIEW
– 141 –


--- page 152 ---
shall take measures to delete the information or correct the error. Any individual or
organization may neither acquire personal information by stealing or through other illegal
ways, nor illegally sell or provide personal information to others.
On June 10, 2021, the SCNPC issued the Data Security Law of the PRC ( ʕശɛ͏΍
) (the “Data Security Law”), which became effective on September 1, 2021.
The Data Security Law protects the rights and interests of individuals and organizations
relating to data, encourages the lawful, reasonable and effective use of data, guarantees the
orderly and free flow of data in accordance with the law, and promotes the development of the
digital economy with data as a key element. Furthermore, the Data Security Law also provides
that mainland China shall establish a data classification and grading protection system and data
security review system, under which data processing activities that affect or may affect national
security shall be reviewed for protection of national security. A decision on security review
made in accordance with the law shall be final. Processors of data shall establish a sound data
security management system throughout the whole process, organize data security education
and training, and take corresponding technical measures and other necessary measures to
ensure data security, in accordance with the provisions of laws and regulations. To carry out
data processing activities by making use of the Internet or any other information network, the
aforesaid obligations for data security protection shall be performed on the basis of the graded
protection system for cybersecurity. Risk monitoring measures shall be strengthened during
processing data and remedies shall be immediately adopted where processors discover risks
such as data security defects and vulnerabilities. When data security incidents occur,
processors shall immediately take solutions, notify the users as required and report the matter
to the relevant competent authorities. Any organization or individual collecting data shall adopt
lawful and proper methods and shall not steal data or obtain the data through other illegal
means. Relevant authorities will establish the measures for the cross-border transfer of import
data. If any company violates the Data Security Law, such company may be punished by
administration sanctions, including but not limited to penalties, fines, and/or may suspension
of relevant business or revocation of the business license. As a processor of data, the Company
shall implement the relevant data security management system and protection obligations in the
entire process of the business operations and new product development and comply with higher
requirements on data security protection from multiple perspectives under the Data Security
Law of the PRC and require business partners to abide by the requirements accordingly.
On July 6, 2021, the General Office of the Communist Party of China Central Committee
and the General Office of the State Council also jointly issued the Opinions on Strictly
Combating Illegal Securities Activities in Accordance with the Law (੽ᘌ͂ᏘᗇՎ
จԈ), which stressed on improving laws and regulations on data security,
cross-border data flow and management of confidential information, speeding up the revisions
to regulations on strengthening the confidentiality and document management of securities
issuance and listing outside the mainland of the PRC ( ྤ̮ɪ̹) to increase the accountability
of entities listed outside the mainland of the PRC to information security, and enhancing
standardized management of mechanism and procedure for cross-border data transfer,
enhancing the cooperation of cross-border audit supervision.
REGULATORY OVERVIEW
– 142 –


--- page 153 ---
On 20 August 2021, the SCNPC promulgated the Personal Information Protection Law of
the PRC () (the “Personal Information Protection Law”),
which took effect on November 1, 2021. The Personal Information Protection Law further
accentuates the importance of processors’ obligations and responsibilities for personal
information protection and stipulates, among other things, the scope of application, the
definitions of personal information and sensitive personal information, the requirement on
content of personal information processing activity notification, the legal basis on which we
may rely for processing personal information, criteria and procedures for cross-border transfer
of personal information and certain internal compliance procedures, such as the personal
information protection impact assessment.
On September 24, 2024, the State Council published the Regulations on the
Administration of Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ) (the “Network Data
Security Regulations”), which has come into effect on January 1, 2025. The Network Data
Security Regulations, as an implementing regulation of Cybersecurity Law, Data Security Law
and Personal Information Protection Law, established the basic framework for the purposes of
regulating network data (including personal information) processing activities, ensuring the
security of network data, promoting the reasonable and effective use of network data in
accordance with the law, protecting the lawful rights and interests of individuals and
organizations, and safeguarding national security and public interest.
On February 12, 2025, the CAC published the Measures for Personal Information
Protection Compliance Audit (), which took effect on
May 1, 2025. Such measures aim to implement the personal information protection compliance
audit requirements as set out in the Personal Information Protection Law and the Network Data
Security Regulations, and regulate compliance audits of personal information processing
activities.
LA WS AND REGULATIONS RELATED TO OVERSEAS LISTING
In 2021, the General Office of the Communist Party of China Central Committee and the
General Office of the State Council jointly promulgated the Opinions on Strictly Cracking
down on Illegal Securities Activities in Accordance with the Law (੽ᘌ͂ᏘᗇՎ༼
จԈ). The Opinions on Securities Activities emphasized the need to strengthen the
administration over illegal securities activities and the supervision on overseas listings by
China-based companies and proposed to take effective measures, such as promoting the
construction of relevant regulatory systems to deal with the risks and incidents faced by
China-based overseas-listed companies.
Furthermore, on February 17, 2023, the CSRC released Trial Administrative Measures for
Overseas Securities Offering and Listing by Domestic Companies ( ྤʫΆุྤ̮೯БᗇՎձ
) (the “Oversea Listing Trial Measures”) and five relevant guidelines,
which became effective on March 31, 2023. Pursuant to the Overseas Listing Trial Measures,
mainland China domestic companies that seek to offer and list securities in overseas markets
for initial public offering, regarding the subsequent securities offering in the same overseas
REGULATORY OVERVIEW
– 143 –


--- page 154 ---
market where it has previously offered and listed securities, and subsequent securities offering
and listing in other overseas markets, either in direct or indirect means, shall complete the
filing procedures and report relevant information to the CSRC according to the Overseas
Listing Trial Measures. The Overseas Listing Trial Measures provide that if the issuer meets
the following criteria, the overseas securities offering and listing conducted by such issuer will
be deemed as an indirect overseas offering subject to the filing procedure: (i) 50% or more 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 is accounted for by
domestic companies; and (ii) the issuer’s key business activities are conducted in mainland
China, or its primary place(s) of business are located in mainland China, or the senior managers
in charge of its business operations and management are mostly Chinese citizens or domiciled
in mainland China. Where an issuer submits an application for initial public offering to
competent overseas regulators, such issuer must file with the CSRC within three business days
after such application is submitted. As advised by our PRC Legal Advisor, we are required to
complete the filing procedures with the CSRC in connection with the proposed Listing. We
have filed with the CSRC in connection with the Listing on March 28, 2025.
On February 24, 2023, the CSRC, Ministry of Finance, State Secrecy Administration, and
State Archives Bureau released the Provisions on Strengthening Confidentiality and Archives
Administration in Respect of Overseas Issuance and Listing of Securities by Domestic
Enterprises ()
(the “Confidentiality Provisions”), which became effective on March 31, 2023. Pursuant to the
Confidentiality Provisions, domestic joint-stock enterprises listed in overseas markets via
direct offering and domestic operational entities of enterprises listed in overseas markets via
indirect offering must obtain approval and complete filing or other requirements before they
publicly disclose any documents and materials that contain state secrets or government work
secrets or that, if divulged, will jeopardize China’s national security or public interest, or
before they provide such documents or materials to entities or individuals such as securities
companies, securities service providers and overseas regulators.
LA WS AND REGULATIONS RELATING TO OUR BUSINESS OPERATIONS IN HONG
KONG
Dangerous Goods Ordinance (Chapter 295 of the Laws of Hong Kong) (“DGO”) and
Dangerous Goods (Application and Exemption) Regulations (Chapter 295A of the Laws of
Hong Kong) (“DGR”)
The DGO sets forth the regulation relating to “dangerous goods” and shall apply to, inter
alia, all explosives, compressed gasses, petroleum and other substances giving off inflammable
vapors, substances giving off poisonous gas or vapor, corrosive substances, substances which
become dangerous by interaction with water or air, substances liable to spontaneous
combustion or of a readily combustible nature and radioactive material.
REGULATORY OVERVIEW
– 144 –


--- page 155 ---
The DGO prescribes that no person shall manufacture, store, convey or use any dangerous
goods except under and in accordance with the license granted by the Hong Kong Fire Services
Department. Notwithstanding any other liability which may arise under the provisions of such
ordinance or otherwise, the breach of any term or condition endorsed upon any license issued
shall constitute an offense which shall be punishable on summary conviction by a fine not
exceeding HK$10,000 and imprisonment not exceeding one month. If a company is found
guilty of an offense under the said ordinance, the directors and officers concerned in the
management of the company shall be guilty of the like offense unless he proves that the act
constituting the offense took place without his knowledge or consent.
The DGR sets forth the classification of dangerous goods to which the DGO applies. In
particular, “perfumery products” were classified as Class 3 dangerous goods belonging to the
packing group PG II under the DGR.
Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong)
The Sale of Goods Ordinance aims to codify the laws relating to the sale of goods which
shall be applicable to our Group’s business activities. It provides that:
(a) there is an implied condition that the goods shall correspond with the description
where there is a contract for the sale of goods by description;
(b) there is an implied condition that the goods supplied under the contract are of
merchantable quality where a seller sells goods in the course of a business, except
that there is no such condition (i) as regards defects specifically drawn to the buyer’s
attention before the contract is made; or (ii) if the buyer examines the goods before
the contract is made, as regards defects which that examination ought to reveal; or
(iii) if the contract is a contract by sample, as regards defects which would have
been apparent on a reasonable examination of the sample; and
(c) where there is a contract for sale by sample, there are implied conditions that (i) the
bulk shall correspond with the sample in quality, (ii) the buyer shall have a
reasonable opportunity of comparing the bulk with the sample, and (iii) the goods
shall be free from any defect, rendering them unmerchantable, which would not be
apparent on reasonable examination of the sample.
Any right, duty or liability which arises under a contract of sale of goods by implication
of law may be negatived or varied by express agreement, or by course of dealings between the
parties, or by usage if the usage is such as to bind both parties to the contract, subject to the
Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong).
REGULATORY OVERVIEW
– 145 –


--- page 156 ---
Trade Descriptions Ordinance (Chapter 362 of Laws of Hong Kong)
The Trade Descriptions Ordinance prohibits false trade description, false, misleading or
incomplete information, false marks and misstatements in respect of goods provided in the
course of trade or suppliers of such goods. Under the said ordinance, “trade description” in
relation to goods is defined as an indication, direct or indirect, and by whatever means given,
with respect to the goods or any part of the goods including an indication of the specified
matters, including, inter alia, quantity, size or gage, method of manufacture, composition,
fitness for purpose, availability, compliance with a standard specified or recognized by any
person, price, place or date of manufacture, production, processing or reconditioning, person
by whom manufactured, produced, processed or reconditioned. The labeling and
advertisements in respect of our products are subject to the relevant provisions therein.
The Trade Descriptions Ordinance formulates that it is an offense to (i) in the course of
any trade or business apply a false trade description to any goods, or supply or offer to supply
any goods to which a false trade description is applied; (ii) have in one’s possession for sale
or for any purpose of trade or manufacture any goods to which a false trade description is
applied; (iii) apply a false trade description to a service supplied or offered to be supplied to
a consumer; (iv) supply or offer to supply to a consumer a service to which a false trade
description is applied; or (v) have the importation or exportation of any goods to which a false
trade description or forged trademark is applied. The Trade Descriptions Ordinance further
prescribes that a trader who engages in relation to a consumer in a commercial practice that is
(i) a misleading omission; (ii) aggressive; or (iii) constitutes (a) bait advertising, (b) a bait and
switch, or (c) wrongly accepting payment for a product, commits an offense.
Any person who commits an offense under the Trade Descriptions Ordinance shall be
liable, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for five
years, and on summary conviction, to a maximum fine of HK$100,000 and to imprisonment for
two years.
Consumer Goods Safety Ordinance (Chapter 456 of Laws of Hong Kong)
The Consumer Goods Safety Ordinance imposes a duty on manufacturers, importers and
suppliers of certain consumer goods to ensure that the consumer goods they supply are safe and
for incidental purposes.
The following goods are not covered by the Consumer Goods Safety Ordinance: (a) food
and water; (b) pleasure craft and similar vessels; (c) aircraft (other than hang-gliders); (d)
motor vehicles; (e) gas, liquefied petroleum gas containers, gas appliances, gas fittings and
flexible gas tubing, as defined under the Gas Safety Ordinance (Chapter 51 of laws of Hong
Kong); (f) electrical products; (g) pesticides; (h) tobacco and tobacco products; (i)
pharmaceutical products, poisons and antibiotics; (j) traditional Chinese medicines; (k) toys
and children’s products within the meaning of the Toys and Children’s Products Safety
Ordinance (Chapter 424 of laws of Hong Kong); and (l) any other goods the safety of which
is controlled by specific legislation.
REGULATORY OVERVIEW
– 146 –


--- page 157 ---
The Consumer Goods Safety Ordinance prohibits a person from supplying,
manufacturing, or importing into Hong Kong consumer goods unless the consumer goods
comply with the general safety requirement or an approved standard for consumer goods.
Currently there is no approved standard which has been approved in any regulation to the
Consumer Goods Safety Ordinance.
The general safety requirement is that the consumer goods are reasonably safe having
regard to all of the circumstances, including (a) the manner in which, and the purpose for
which, the consumer goods are presented, promoted or marketed; (b) the use of any mark in
relation to the consumer goods and instructions or warnings given for the keeping, use or
consumption of the consumer goods; (c) reasonable safety standards published by a standards
institute or similar body for consumer goods of the description which applies to the consumer
goods or for matters relating to consumer goods of that description; and (d) the existence of
any reasonable means (taking into account the cost, likelihood and extent of any improvement)
to make the consumer goods safer.
Contravention with the above requirement is a criminal offence and the offender is liable
on first conviction to a fine at HK$100,000 and to imprisonment for one year, and on
subsequent conviction to a fine of HK$500,000 and to imprisonment for two years.
Import and Export (Registration) Regulations (Chapter 60E of the Laws of Hong Kong)
Pursuant to regulations 4 and 5 of the Import and Export (Registration) Regulations,
every person, including company, who imports or exports or re-exports any article other than
an exempted article set out in regulation 3 of the Import and Export (Registration) Regulations
shall lodge with the Commissioner of Customs and Excise and any Deputy or Assistant
Commissioner of Customs and Excise of Hong Kong (the “Commissioner”) an accurate and
complete import or export declaration relating to such article using services provided by a
specified body, in accordance with the requirements that the Commissioner may specify. Every
declaration required to be lodged shall be lodged within 14 days after the importation or
exportation of the article to which it relates.
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong)
The Personal Data (Privacy) Ordinance provides the principles (the “Data Protection
Principles”) that a data user must follow in any acts concerning personal data. Personal data
refers to any data (a) relating directly or indirectly to a living individual; (b) from which it is
practicable for the identity of the individual to be directly or indirectly ascertained; and (c) in
a form in which access to or processing of the data is practicable.
The Data Protection Principles are summarized as follows:
(1) Adequate personal data should be collected (i) for a lawful purpose, which is
necessary for and directly related to a function or activity of the data user, (ii) by
fair and lawful means. And the person whose data is being collect is informed (a)
REGULATORY OVERVIEW
– 147 –


--- page 158 ---
that whether he is obligatory or voluntary for him to supply the data, (b) the purpose
of the collection and the class of persons to whom the data may be transferred, (c)
on or before, his right to access and correct the data collected and the information
of the person who might handle such requests.
(2) All practicable steps shall be taken to ensure the accuracy of the person data
collected, and kept not long than is necessary.
(3) Personal data should not be used for the purposes outside of the person’s consent.
(4) All practicable steps shall be taken to ensure that any personal data held by a data
user is protected against unauthorized or accidental access, processing, erasure, loss
or use.
(5) All practicable steps shall be taken to ensure that a person can (a) ascertain a data
user’s policies and practices in relation to personal data; (b) be informed of the kind
of personal data held by a data user; (c) be informed of the main purposes for which
personal data held by a data user is or is to be used.
(6) A data subject shall be entitled to ascertain whether a data user holds personal data
of which he is the data subject and request access to personal data. He should be
given reasons if the request is refused and right to object to the refusal.
Contravention with the Data Protection Principles may entitle the Privacy Commissioner
for Personal Data to issue a written notice directing the data user to remedy and prevent
recurrence of contravention. Contravention with the above notice is an offence and the offender
is liable on (a) first conviction to a fine HK$50,000 and to imprisonment for two years, and
if the offence continues after the conviction, to a daily penalty of HK$1,000; and (b) second
or subsequent conviction to a fine at HK$100,000 and to imprisonment for two years, and if
the offence continues after the conviction, to a daily penalty of HK$2,000. It is a defense to
the above offence if the data user shows that he exercised all due diligence to comply with the
enforcement notice.
The Competition Ordinance (Chapter 619 of the Laws of Hong Kong)
The Competition Ordinance was enacted, amongst others, to prohibit conduct that
prevents, restricts or distorts competition in Hong Kong. It creates two key prohibitions which
take the form of two “Conduct Rules” of cross-sector application:
(1) The First Conduct Rule prohibits agreements and concerted practices that have the
object or effect of restricting competition in Hong Kong; and
REGULATORY OVERVIEW
– 148 –


--- page 159 ---
(2) The Second Conduct Rule prohibits a business with substantial market power from
abusing that power by engaging in conduct that has the object or effect of restricting
competition in Hong Kong. That is, it is only applicable to a single entity with
substantial (but not collective) market power.
The First Conduct Rule applies where there is an agreement or concerted practice. There
must be some form of conduct involving two or more parties for the First Conduct Rule to
apply. The focus of the First Conduct Rule is serious cartel activity amongst business
competitors which constitutes serious anti-competitive conduct, which include:
(1) Price fixing: where agreement is reached on customer prices, or price elements such
as discount and price range;
(2) Market-sharing: where non-competition between competitors would be agreed by
allocation of parts of the market, such as by customer demographic or by
geographical location;
(3) Out-put restriction: where production or sales output is limited as means of
increasing prices; and
(4) Bid-rigging: agreeing with competitors who would make the winning bid,
subverting the competitive nature of the tendering process.
These serious anti-competitive behavior will be dealt with most severely by the
Competition Commission. Other conduct such as vertical arrangements between suppliers and
customers are generally not considered as serious anti-competitive behavior.
The Second Conduct Rule only applies where an undertaking has a substantial market
power in a particular market. In considering whether an undertaking has substantial degree of
market power, the relevant matters are: (a) the market share of the undertaking; (b) the
undertaking’s power to make pricing and other decisions; (c) any barrister to entry to
competitors into the relevant market; and (d) any other relevant matters.
The Competition Ordinance provides that a conduct may constitute an abuse if it involves
(a) predatory behavior towards competitors or (b) limiting production, markets or technical
developments to the prejudice of consumers. Examples of conduct that may be considered an
abuse of substantial degree of market power are: (a) predatory pricing, (b) anti-competitive
tying and bundling, (c) margin squeeze, (d) refusal to deal, and (e) exclusive dealing.
If the Competition Commission has reasonable cause to believe that a contravention of
the First Conduct Rule has occurred: (1) if the contravention does not involve serious
anti-competitive conduct, the Competition Commission must issue a warning notice before
bringing proceedings, and (2) if the contravention involves serious anti-competitive conduct or
a contravention of the Second Rule, the Competition Commission may issue an infringement
notice, and if the infringement notice is complied with, not to bring proceedings.
REGULATORY OVERVIEW
– 149 –


--- page 160 ---
If a company and/or its directors are found to be involved in breaching the Competition
Ordinance, the potential penalties are: (a) pecuniary penalties up to 10% of annual local
turnover, (b) director’s disqualification orders for up to five years, (c) divestiture of assets,
shares or business, (d) voiding of agreement, and (e) injunction relief.
The Copyright Ordinance (Chapter 528 of the Laws of Hong Kong)
The Copyright Ordinance recognizes copyright as a property right subsisting in various
forms of works.
Copyright in a work is infringed by a person who without the licence of the copyright
owner does, or authorizes another to do, any of the acts restricted by the copyright, which
includes (also known as primary infringement): (a) copying the work; (b) issuing copies of the
work to the public; (c) renting copies of the work to the public; (d) making available copies
of the work to the public; (e) performing, showing or playing the work in public; (f)
broadcasting the work or including it in a cable program service; (g) making an adaptation of
the work or doing any of the above in relation to an adaptation; and (h) other acts referred to
in Part II of the Copyright Ordinance.
The Copyright Ordinance also provides for the acts which are categorized as secondary
infringement, they include, amongst others: possessing, exhibiting, or distributing for the
purpose of or in the course of any trade or business (it being immaterial whether or not the
trade consists of dealing in infringing copies of copyright works); selling or letting for hire, or
offering or exposing for sale or hire; or distributing otherwise to affect prejudicially the
copyright owner, an infringing copy.
Commission of secondary infringement is a criminal offence if the infringer knows or has
reason to believe the copy of a work to be an infringing copy of the work. For the sale of an
infringing copy in the course of any trade or business, upon conviction on indictment, the
infringer is liable to a fine at HK$50,000 in respect of each infringing copy and to
imprisonment for four years.
In the case of our Group which uses the photos supplied by the distributors, which may
or may not constitute a secondary infringement of the copyright of the copyright owner, it is
very likely that our Group has no knowledge and there is no reasonable ground to suspect that
that the photos were provided by the distributors infringing copyright.
For pictures taken by our Group used and displayed in our website, retail stores and
marketing materials, our Group is the author of those pictures and hence is the copyright
owner. In relation to copyright works that may exist on some products, our Group does make
copies of those copyright works in taking those pictures. It is a defense to copyright
infringement if the person copies an artistic work for the purpose of advertising the sale of the
work. As our Group makes copies of copyright works in the products for advertising the sale
of the products (together with the copyright works), our Group can rely on such defense.
REGULATORY OVERVIEW
– 150 –


--- page 161 ---
Trade Mark Ordinance (Chapter 559 of the Laws of Hong Kong)
The Trade Mark Ordinance protects registered trademarks. The duration of the registered
trademarks is for ten years, which can be further renewed for ten years per renewal. A
registered trade mark may be challenged in revocation proceedings if it is not used in Hong
Kong for a continuous period of three years.
A person infringes a registered trade mark if he uses in the course of trade or business a
sign:
(1) which is identical to the trade mark in relation to goods or services which are
identical to those for which it is registered;
(2) which is identical to the trade mark in relation to goods or services which are similar
to those for which it is registered, and the use of the sign in relation to those goods
or services is likely to cause confusion on the part of the public;
(3) which is similar to the trade mark in relation to goods or services which are identical
or similar to those for which it is registered and the use of the sign in relation to
those goods or services is likely to cause confusion on the part of the public; or
(4) which is identical or similar to the well-known trade mark in relation to any goods
or services, and the use of the sign, being without due cause, takes unfair advantage
of, or is detrimental to, the distinctive character or repute of the trade mark.
As at the Latest Practicable Date, our Group had registered 10 trademarks in Hong Kong
which are material to our Group’s business. Our Directors confirm that our Group did not
receive any claim for trademark infringement during the Track Record Period and up to the
Latest Practicable Date. For further details of our Group’s material intellectual property rights
in Hong Kong, please refer to “Appendix IV — Statutory and General Information — C.
Further Information about Our Business — 2. Material intellectual property rights of our
Group” in this prospectus.
Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong)
The Business Registration Ordinance requires every person (a company or individual)
carrying on a business in Hong Kong to register with the Inland Revenue Department and to
obtain a business registration certificate within one month of the commencement of the
business. Such business registration serves to notify the Inland Revenue Department of the
establishment of a business in Hong Kong and therefore, designed to facilitate the Inland
Revenue Department to collect tax from businesses in Hong Kong.
REGULATORY OVERVIEW
– 151 –


--- page 162 ---
Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong)
The Employees’ Compensation Ordinance prohibits an employer from employing any
employee in any employment unless there is a policy of insurance in force to cover the
employer’s liabilities under the Employees’ Compensation Ordinance and at common law for
injuries at work. The minimum insurance cover for not more than 200 employees should not
be less than HK$100 million per event whereas the minimum cover for more than 200
employees should not be less than HK$200 million per event. Any employer who fails to
comply commits an offence and is liable on conviction to a maximum fine of HK$100,000 and
imprisonment for two years.
An employer to whom a policy of insurance for the purpose thereof is required to display
in a conspicuous place on each of his premises (where any employee is employed by him) a
notice in a form specified by the Commissioner, which shows in both English and Chinese
languages of (a) the name of the employer, (b) the name of the insurer, (c) the policy number,
(d) the date of issue of the policy, (e) the dates of commencement and expiry of the period of
insurance, (f) the number of employees insured under the policy at the time of issue thereof and
(g) the amount of liability insured under the policy.
Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong)
The Mandatory Provident Fund Schemes Ordinance requires an employer to enroll his
employees in a Mandatory Provident Fund Scheme and make contributions if the duration of
employment is for 60 days or more. Employees whose contracts for employment were for less
than 60 days, but also repeatedly renewed, are protected by the Mandatory Provident Fund
Scheme Ordinance and the Employment Ordinance (Chapter 57 of the Laws of Hong Kong) as
they deem such contracts as “continuous contracts”.
Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong)
The Occupational Safety and Health Ordinance requires every employer to, so far as
reasonably practicable, ensure the safety and health at work of all the employer’s employees.
The employer may be considered to have failed to comply with the requirement if he (a)
failed to provide or maintain plant and systems of work that are, so far as reasonably
practicable, safe and without risks to health; (b) failed to make arrangements for ensuring, so
far as reasonably practicable, safety and absence of risks to health in connection with the use,
handling, storage or transport of plant or substances; (c) failed to provide such information,
instruction, training and supervision as may be necessary to ensure, so far as reasonably
practicable, the safety and health at work of the employer’s employees; (d) as regards any
workplace under the employer’s control (i) failed to maintain the workplace in a condition that
is, so far as reasonably practicable, safe and without risks to health; or (ii) failed to provide or
maintain means of access to and egress from the workplace that are, so far as reasonably
practicable, safe and without any such risks; (e) failed to provide or maintain a working
environment for the employer’s employees that is, so far as reasonably practicable, safe and
without risks to health.
REGULATORY OVERVIEW
– 152 –


--- page 163 ---
An employer who fails to comply with any of the above provisions commits an offence
and the employer is liable on conviction to a fine of HK$200,000. An employer who fails to
do so intentionally, knowingly or recklessly commits an offence and is liable on conviction to
a fine of HK$200,000 and to imprisonment for six months.
In terms of enforcement, the Commission for Labor may serve improvement notice and
suspension notice on the employer. It is a criminal offence to fail to comply with the notice
without reasonable excuse, and the offender is liable to a fine of HK$200,000 and HK$500,000
respectively and to imprisonment for twelve months.
The employer or the occupier of a workplace is required to notify any accident to an
occupational safety officer within seven days, or within 24 hours if the accident causes the
death of, or serious bodily injury to, an employee. The occupier of a workplace is also required
to notify any dangerous occurrence to an occupational safety officer within 24 hours. Failure
to notify the occupational safety officer is a criminal offence and attracts a fine at HK$50,000.
Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)
The Inland Revenue Ordinance provides that an employer is required to furnish in
writing, (1) within three months of engagement, particulars of any new employee (i.e. Form
56E) who is likely to be chargeable to salaries tax, and (2) at least one month before his
employee ceases to be employed, particulars of any employee who is about to cease or ceases
to employ in Hong Kong (i.e. Form 56F). Any employer who failed to do so, unless with
reasonable excuse, commits a criminal offence and is liable to a fine of HK$10,000 and the
court may order the employer to do the act which they failed to do.
The Inland Revenue Ordinance requires any person on which profits tax is chargeable on
his assessable profits to file tax return, provide supplemental documents if necessary, any pay
the assessed profits tax accordingly.
Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong)
The Minimum Wage Ordinance establishes a statutory minimum wage which has come
into force since May 1, 2011. Wages payable to an employee in respect of any wage period,
when averaged over the total number of hours worked in the wage period, should be no less
than the statutory minimum wage (SMW) rate. If an employer wilfully and without any
reasonable excuse fails to pay the SMW rate when it becomes due is liable to be prosecuted
and upon conviction, to a fine of HK$350,000 and to imprisonment for three years.
Transfer Pricing Laws and Regulations in Hong Kong
Regulations concerning transfer pricing between associated enterprises can be found in
the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) and the comprehensive
double taxation agreements (the “DTAs”) between Hong Kong and other countries or
territories, including the Mainland China.
REGULATORY OVERVIEW
– 153 –


--- page 164 ---
Under section 60 of the Inland Revenue Ordinance, where it appears to an assessor that
for any year of assessment any person chargeable with tax has not been assessed or has been
assessed at less than the proper amount, the assessor may, within the year of assessment or
within six years after the expiration thereof, assess such person at the amount or additional
amount which, according to his judgment, such person ought to have been assessed, and,
provided that where the non-assessment or under-assessment of any person for any year of
assessment is due to fraud or wilful evasion, such assessment or additional assessment may be
made at any time within 10 years after the expiration of that year of assessment.
Section 61A of the Inland Revenue Ordinance stipulates that where it would be concluded
that person(s) entered into or carried out transactions for the sole or dominant purpose to obtain
a tax benefit (which means the avoidance or postponement of the liability to pay tax or the
reduction in the amount thereof), liability to tax of the relevant person(s) will be assessed (a)
as if the transaction or any part thereof had not been entered into or carried out; or (b) in such
other manner as the supervising authority considers appropriate to counteract the tax benefit
which would otherwise be obtained.
The DTAs contain provisions mandating the adoption of arm’s length principle for pricing
transactions between associated enterprises. The arm’s length principle uses the transactions of
independent enterprises as a benchmark to determine how profits and expenses should be
allocated for the transactions between associated enterprises. The basic rule for DTA purposes
is that profits tax charged or payable should be adjusted, where necessary, to reflect the
position which would have existed if the arm’s length principle had been applied instead of the
actual price transacted between the enterprises.
The Departmental Interpretation and Practice Notes No. 45 — Relief from Double
Taxation due to Transfer Pricing or Profit Reallocation Adjustments issued by the Inland
Revenue Department in April 2009 makes it available that where double taxation arises as a
result of transfer pricing adjustments made by the tax authorities of another jurisdiction, a
Hong Kong taxpayer may potentially claim relief under the tax treaty between Hong Kong and
that country (jurisdictions that entered into tax arrangements with Hong Kong includes the
Mainland China).
The Inland Revenue Department also issued Departmental Interpretation and Practice
Notes No. 46 (“DIPN 46”) in December 2009 on Transfer Pricing Guidelines — Methodologies
and Related Issues. As stated in DIPN 46, transfer pricing documentation is not mandatory
under the Inland Revenue Ordinance and the taxpayers are not expressly required to create
specific documents showing compliance with the arm’s length principle. The Inland Revenue
Department further issued Departmental Interpretation and Practice Notes No. 48 in March
2012 which provides a mechanism for taxpayers to pre-agree their transfer pricing
arrangements with the Inland Revenue Department.
REGULATORY OVERVIEW
– 154 –


--- page 165 ---
In July 2018, the Inland Revenue (Amendment) (No. 6) Ordinance 2018 (the
“Amendment Bill”) was enacted to introduce a legislative framework to codify how the pricing
for the supply of goods and services between associated parties should be determined and
implemented. Codified international transfer pricing principles include, amongst others, the
arm’s length principle for provision between associated persons, the separate enterprises
principle for attributing income or loss of non-Hong Kong resident person, and the three-tier
transfer pricing documentation relating to the master file, local file and country-by-country
reporting. Based on the Amendment Bill, a person who have a Hong Kong tax advantage if
taxed on the basis of a non-arm’s length provision (the “advantaged person”) will have income
adjusted upwards or loss adjusted downwards. The advantaged person’s income or loss is to be
computed as if arm’s length provision had been made or imposed instead of the actual
provision. If the advantaged person fails to prove to the satisfaction of the assessor of the
Inland Revenue Department that the amount of the person’s income or loss as stated in the
person’s tax return in an arm’s length amount, the assessor of the Inland Revenue Department
must estimate an amount as the arm’s length amount and, taking into account the estimated
amount (a) make an assessment or additional assessment on the person; or (b) issue a
computation of loss, or revise a computation of loss resulting in a smaller amount of computed
loss, in respect of that person pursuant to section 50AAF of the Inland Revenue Ordinance. In
July 2019, the Inland Revenue Department further issued the Departmental Interpretation and
Practice Notes No. 58, No. 59 and No. 60 to set out interpretations to the Amendment Bill.
REGULATORY OVERVIEW
– 155 –


--- page 166 ---
OVERVIEW
We are the largest perfume group in China (including Hong Kong and Macau) apart from
brand-owner perfume groups in terms of retail sales in 2023, and have a large and diverse
portfolio of iconic brands of not only perfumes, but also color cosmetics, skincare products,
eyewear and home fragrances.
Our history can be traced back to 1987 when Eternal Far East, one of our major operating
subsidiaries, started introducing international perfumes into mainland China as well as optical
products into Hong Kong and Macau. We were an early mover to introduce imported perfume
products into the market in mainland China. Such pioneering approach solidified the Group’s
future leading position in the industry. Mr. Lau has more than 40 years of experience in the
industries where we operate, and has successfully led us to become a leading perfume group
in China (including Hong Kong and Macau). For details of background of Mr. Lau, please see
“Directors and Senior Management” in this prospectus.
Over years of operation, we have accumulated profound experience, industry-leading
expertise and abundant resources for managing and promoting a portfolio of international
brands. As of the Latest Practicable Date, we had a total of 72 external brands for which we
conduct product distribution and market deployment, including Hermès, V an Cleef & Arpels,
Chopard, Albion and Laura Mercier. Further, we have built and maintained an omni-channel
sales and distribution network in China (including Hong Kong and Macau) through conducting
product distribution and market deployment for international perfume brands. As of March 31,
2025, our products were sold at more than 100 offline POSs operated directly by ourselves and
more than 8,000 POSs operated by our retailer customers in over 400 cities in China (including
Hong Kong and Macau).
KEY MILESTONES
The following illustrates our key development milestones and achievements:
Y ear Milestones
1987 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were authorized to distribute imported perfumes from a Paris
brand in mainland China
We entered into the first exclusive distribution agreement to
distribute imported eyewear products in Hong Kong and Macau
We pioneered in managing imported skincare brand in mainland
China
1992 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We established distributor partnership with InterParfums, a
globally renowned company specializing in the development,
manufacturing, and distribution of prestige perfumes and
cosmetics which has continued collaborating with us as one of our
key business partners for over 30 years
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 156 –


--- page 167 ---
Y ear Milestones
1999 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We launched our self-owned eyewear brand under the brand name
of “Santa Monica”
2005 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We began managing the perfume products of Hermès, a leading
global player in fashion based in France in mainland China which
were among the most high-end perfumes in the market
2007 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We established distributor partnership with EuroItalia, a leading
company in global fragrances and cosmetics industries, which
creates, produces, and distributes a wide range of luxury
fragrances and cosmetics which has continued collaborating with
us as one of our key business partners for over 15 years
We started to establish our travel retailers network by selling our
products in Beijing Capital Airport
2012 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We expanded our retailer channels to e-commerce platforms by
first launching a Tmall flagship store for an international brand of
color cosmetics
2014 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We were authorized by Albion, a high-end Japanese skincare
brand, as its sole brand manager to distribute its products in
department stores in Hong Kong and Macau
2016 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We launched our retailer brand “Perfume Box” with online sales
channel, and later established flagship store in 2018
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We developed a large-scale in-house e-commerce team with over
100 staff
We helped launch and operate Tmall flagship stores for Albion in
mainland China
We widened our sales and distribution channels to include JD.com
(؇)
2020 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We started publishing the China Perfume Industry Research White
Paper () jointly with an Independent
Third-party industry consultant annually, which has become a
well-received research report in mainland China’s perfumes
industry
In February 2020, we launched a WeChat mini program in two
weeks’ time and officially set up our omni-channel sales and
distribution platform
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 157 –


--- page 168 ---
Y ear Milestones
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We widened our sales and distribution channels to include Douyin
(ࠪincluding setting up an in-house live streaming team and
established a dedicated live streaming sales base
We introduced Santa Maria Novella, a long-established Italian
brand primarily with over 800 years of history offering perfumes
and home fragrances in mainland China
We established over 6,000 offline POSs covering over 300 cities in
mainland China, Hong Kong and Macau
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We expanded into the home fragrances market by introducing
Maison 21G
We launched our self-owned perfume brand under the brand name
of “Santa Monica”
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We established a joint venture, B&E China, in respect of the
operation of Dr. Babor, a high-end skincare brand from Germany
and became the exclusive licensee of Dr. Babor, for its retail
business in mainland China in terms of designated products and
channels
We established partnership with Laura Mercier, a leading global
cosmetics brand and started distributing their products
We pioneered in launching the first standalone flagship store with
cabin facial treatment for Albion in Hong Kong
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our products were sold at more than 100 offline POSs operated
directly by ourselves and more than 7,500 POSs operated by our
retailer customers in over 400 cities in China (including Hong
Kong and Macau)
See the section headed “Business — Awards and Recognitions” in this prospectus for
details on the awards and recognitions received by our Group.
OUR SHAREHOLDERS
As part of the Corporate Reorganization, our Company became the ultimate holding
company of our Group. Our Company was incorporated in the Cayman Islands under the
Companies Act as an exempted company with limited liability on January 9, 2024. See the
paragraph headed “— Corporate Development and Reorganization” in this section below for
details.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 158 –


--- page 169 ---
CORPORATE DEVELOPMENT AND REORGANIZATION
In preparation for the Listing and to streamline our corporate structure, we underwent a Corporate Reorganization of our corporate structure,
so that our onshore subsidiaries can be held by an onshore holding company.
The following chart sets forth our corporate structure immediately before the Corporate Reorganization:
Eternal BVI
(BVI)
Eternal China
(HK)
Moral Happiness
(HK)
Excellent Fareast
(HK)
E China Trading
(HK)
Talent Crown
(HK)
E&C Holdings(2)
(HK)
Eternal Far East(3)
(HK)
B&E China(1)
(HK)
E&C Trading
(HK)
E&C Shanghai
(PRC)
Eternal Shanghai
Trading
(PRC)
Eternal China
Trading
(PRC)
Mr. Lau(4)
100%
BABOR Beijing
(PRC)
BABOR Shanghai
(PRC)
Guangzhou Consulting
(PRC)
Guangzhou Huisheng
Trading
(PRC)
offshore
onshore
50% 70% 100% 100% 100%100%100%100%
100%
100% 100% 100% 100%
Eternal Development
(PRC)
100% 100% 100% 100%
Eternal Shanghai
Cosmetics
(PRC)
Eternal Shanghai
Digintelligence
(PRC)
Shanghai Smiley
(PRC)
Shanghai Zhuangwei
Advertising
(PRC)
Eternal
Shenzhen Trading
(PRC)
Eternal Chengdu
Trading
(PRC)
Eternal Shanghai
Optical
(PRC)
Eternal Xian
Trading
(PRC)
Eternal Beauty
Shanghai Trading
(PRC)
Eternal Beijing
Trading
(PRC)
Eternal Guangzhou
Trading
(PRC)
Shanghai Yierpai
Advertising
(PRC)
Shanghai Yongxin
Trading
(PRC)
100%100%100%100%100%100% 100%
100%100%100%100%100% 100%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 159 –


--- page 170 ---
Notes:
(1) The remaining 50% equity interest of B&E China was held by Dr. Babor, an Independent Third Party, other
than being the substantial shareholder of B&E China.
(2) On May 22, 2025, Eternal BVI entered into a sale and purchase agreement to dispose of 100% issued share
capital of E&C Holdings and E&C Holdings has ceased to be our subsidiary upon completion of such disposal
on May 30, 2025. For details, please refer to “Major Acquisitions, Disposals and Mergers — Disposal of E&C
Holdings and its Subsidiaries” in this section.
(3) The remaining 30% equity interest of Eternal Far East was held by Mr. Lau as to 20% and Mrs. Lau as to 10%,
respectively.
(4) Historically, our business of retail, wholesale and distribution of perfumes, skincare products, color cosmetics,
eyewear and home fragrances in Hong Kong was mainly conducted through Eternal Far East and Visual
Promotion Limited (“Visual Promotion”), a limited company incorporated in Hong Kong and was 100%
beneficially owned by Mr. Lau. During the years ended March 31, 2023 and 2024 before its cessation of
business since April 2024, Visual Promotion recorded (i) revenue of approximately HK$60.0 million and
HK$8.4 million, respectively; (ii) gross profit of approximately HK$11.8 million and HK$1.3 million,
respectively; and (iii) net profit of approximately HK$9.1 million and HK$0.3 million, respectively. As at
March 31, 2023 and 2024, (i) the total assets of Visual Promotion amounted to approximately HK$48.3 million
and HK$4.3 million, respectively; (ii) the total liabilities amounted to approximately HK$4.5 million and
HK$4.3 million, respectively; and (iii) the net assets amounted to approximately HK$43.8 million and
HK$44,000, respectively.
As Visual Promotion and our Group were under common control of Mr. Lau throughout the Track Record
Period, all assets, liabilities and results of operations relating to the business of Visual Promotion during the
Track Record Period were included in the financial information of our Group. During the Track Record Period,
in order to streamline our Group’s structure and to conduct our business under our “Eternal” brand, we
gradually diminished the business scale of Visual Promotion and it has ceased to conduct any business since
April 2024. As advised by our HK Legal Counsel, Visual Promotion fully complied with all the relevant laws
and regulations in Hong Kong prior to its cessation of business operations in April 2024. Given that it no longer
conducts any business and we expect to deregister such company, we have not included Visual Promotion in
our Group during the Corporate Reorganization.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 160 –


--- page 171 ---
The Corporate Reorganization involved the following steps:
Incorporation of Eternal International and our Company
Eternal International was incorporated as a company with limited liability in the British
Virgin Islands on January 8, 2024, and is authorized to issue a maximum of 50,000 shares
without par value. On the same day, one share of Eternal International was issued and allotted
to Mr. Lau for US$1. On April 17, 2024, eight shares of Eternal International were issued and
allotted to Mr. Lau for US$8, and one share of Eternal International was issued and allotted to
Mrs. Lau for US$1. After such allotment, Eternal International was held by Mr. Lau and Mrs.
Lau as to 90% and 10%, respectively.
The Company was incorporated as an exempted company with limited liability in the
Cayman Islands on January 9, 2024, with an authorized share capital of HK$380,000 divided
into 380,000,000 Shares with par value of HK$0.001 each. On the same day, one subscriber
Share was issued to an Independent Third Party incorporator and then transferred to Eternal
International.
Acquisition of remaining equity interest of Eternal Far East
On May 9, 2024, 9,990,000 ordinary shares of Eternal Far East were allotted and issued
to Eternal BVI credited as fully paid at par. Immediately after such allotment and issuance,
each of Eternal BVI, Mr. Lau and Mrs. Lau, held 99.97%, 0.02% and 0.01% of Eternal Far
East, respectively.
On June 17, 2024, Mr. Lau and Mrs. Lau transferred 2,000 and 1,000 ordinary shares of
Eternal Far East to Eternal BVI, respectively. As consideration, Eternal BVI allotted and issued
nine shares credited as fully paid at par to the Company at the direction of Mr. Lau and Mrs.
Lau. Immediately after such transfers, Eternal Far East became wholly owned by Eternal BVI.
Acquisition of Eternal BVI
On June 18, 2024, Mr. Lau transferred one share of Eternal BVI representing 100% of
issued share capital of Eternal BVI to the Company. As consideration, the Company allotted
and issued one share credited as fully paid at par to Eternal International. Immediately after
such transfer, Eternal BVI became directly wholly owned by the Company.
Incorporation of Eternal Development
Eternal Development was established in the PRC on January 23, 2024 as a wholly
foreign-owned enterprise with a registered capital of RMB100 million, and was wholly owned
by Eternal China. The registered capital shall be fully paid up by December 31, 2028.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 161 –


--- page 172 ---
Incorporation of PRC subsidiaries
Shanghai Eternal Trading was established in the PRC on February 28, 2024 with a
registered capital of RMB10 million, and was wholly owned by Eternal Development. The
registered capital shall be fully paid up by December 31, 2028.
Shanghai Eternal Import and Export was established in the PRC on March 14, 2024 with
a registered capital of RMB10 million, and was wholly owned by Eternal Development. The
registered capital shall be fully paid up by December 31, 2028.
Shanghai Eternal Brand Management was established in the PRC on February 29, 2024
with a registered capital of RMB1 million, and was wholly owned by Eternal Development.
The registered capital shall be fully paid up by December 31, 2028.
As advised by our PRC Legal Advisor, the relevant approvals and permits from relevant
authorities in the PRC with respect to the Corporate Reorganization have been obtained, and
the procedures involved are in accordance with applicable PRC laws and regulations.
Exchange of BVI Options for Cayman Options
Eternal BVI is a limited liability company established in the BVI in 1995 and was directly
wholly owned by Mr. Lau before the Corporate Reorganization. Following the reorganization
step referred to in the section headed “Acquisition of Eternal BVI” above in June 2024, Eternal
BVI and its subsidiaries became subsidiaries of the Group. Except for holding equity interest
in various subsidiaries of the Group, Eternal BVI did not conduct any other business.
On December 1, 2019 and March 31, 2024, Eternal BVI granted a total of 26,194,000
options (“BVI Options”) under a share option scheme of Eternal BVI, representing 26,194,000
underlying shares and approximately 2.0149% equity interest of Eternal BVI, to certain
directors, senior management and key employees of various subsidiaries of the Group
(collectively, the “BVI Options Grantees”) to retain them and incentivize their continued
contribution towards the development of the Group. The BVI Options were vested but
remained unexercised by the BVI Options Grantees before the Corporate Reorganization. The
exercise price of each BVI Option is HK$0.1.
As part of the Corporate Reorganization, the Pre-IPO Share Option Scheme of the
Company was adopted on June 18, 2024, and pursuant to which 26,194,000 options (“Cayman
Options”) to subscribe for approximately 2.0149% of the total number of Shares in issue
immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), were granted to the BVI Options Grantees on June 24, 2024 and July 8, 2024,
respectively in exchange for the surrender and cancellation of the BVI Options on a one-to-one
basis. The number of BVI Options is identical to the number of Cayman Options. The exercise
price of each Cayman Option is HK$0.1.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 162 –


--- page 173 ---
OUR MAJOR OPERATING SUBSIDIARIES
Set out below are certain details of our subsidiaries which made material contribution to
the operation of our Group during the Track Record Period.
Entity
Date and
Jurisdiction of
incorporation
Authorized
Share Capital/
Registered
Capital
Issued/Paid up
Capital
Equity
Interest
Attributable
to Our
Group
Principal Business
Activities
Eternal Far
East /H1118/H1118/H1118/H1118/H1118
February 18, 1983
Hong Kong
HK$1,000,000 HK$1,000,000 100% Trading and retailing of
perfumes, skincare
products, color
cosmetics and eyewear
Excellent
Fareast /H1118/H1118/H1118
October 22, 1996
Hong Kong
HK$300,000 HK$300,000 100% Trading and retailing of
perfumes, color
cosmetics and skincare
products
Eternal
Shanghai
Cosmetics /H1118
February 15, 2019
PRC
RMB10,000,000 RMB10,000,000 100% Trading and retailing
of perfumes, color
cosmetics and skincare
products
Guangzhou
Consulting /H1118
January 24, 2019
PRC
RMB1,000,000 RMB1,000,000 100% Procurement of perfumes
and color cosmetics
Guangzhou
Huisheng
Trading /H1118/H1118
October 15, 2014
PRC
RMB25,000,000 RMB25,000,000 100% Trading of perfumes,
skincare products and
color cosmetics
Eternal
Beijing
Trading /H1118/H1118
April 19, 2019
PRC
RMB1,000,000 RMB1,000,000 100% Retailing of perfumes,
skincare products and
color cosmetics
Eternal
Chengdu
Trading /H1118/H1118/H1118
April 18, 2019
PRC
RMB1,000,000 RMB1,000,000 100% Retailing of perfumes,
skincare products and
color cosmetics
Eternal
Guangzhou
Trading /H1118/H1118/H1118
June 24, 2019
PRC
RMB1,000,000 RMB1,000,000 100% Retailing of perfumes,
skincare products and
color cosmetics
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 163 –


--- page 174 ---
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
We have not conducted any acquisitions, disposals or mergers that we consider to be
material to us during the Track Record Period.
Disposal of E&C Holdings and its Subsidiaries
On December 21, 2021, Eternal Far East and one of our five largest suppliers during the
year ended March 31, 2024 (the “Supplier”) entered into a distribution agreement (the
“Distribution Agreement”), pursuant to which the Supplier granted Eternal Far East an
exclusive right to distribute and sell its products in mainland China, Hong Kong and Macau.
On the same date, Mr. Lau, Eternal BVI and the Supplier entered into a China strategy and
options agreement (the “Option Agreement”) to further set out the strategy, structure and steps
to implement the cooperation between the Supplier and our Group. Subsequently in 2023, a
deed of variation and novation was entered into between, among others, the Supplier and
Eternal BVI (the “Deed of Novation”) to amend certain terms of the Distribution Agreement,
including replacing Eternal Far East with E&C Holdings to operate as the distributor of the
products of the Supplier under the Distribution Agreement. Under the Option Agreement,
Mr. Lau provided a guarantee on due observance and performance by Eternal BVI of its duties
and obligations under the Option Agreement and agreed to indemnify the Supplier against all
losses which the Supplier may suffer by reasons of, among others, any breach by Eternal BVI
of its obligations under the Option Agreement. Mr. Lau also provided a guarantee under the
Deed of Novation on due observance and performance by E&C Holdings of its duties and
obligations under the Distribution Agreement.
The Supplier was acquired by Kering Beauté SAS (“Kering”) in 2023. With the new
management team of the Supplier on board after the acquisition, Kering and our Group have
been revisiting and exploring the business strategy and cooperation with respect to the E&C
Holdings and its subsidiaries (the “E&C Group”) in the future. Having considered (i) the future
business direction and strategic planning of Kering; and (ii) the allocation of resources of our
Group, our Group and Kering have reached an agreement to transform the business
collaboration model, pursuant to which our Group will provide services to the E&C Group in
relation to their distribution of products provided by the Supplier and charge E&C Group for
such services.
In order to implement the new business collaboration, our Group and Kering agreed to
terminate the existing arrangement under the Distribution Agreement. As such, on May 22,
2025, a sale and purchase agreement was entered into between, among others, Eternal BVI and
Kering, pursuant to which Eternal BVI agreed to dispose of, and Kering agreed to acquire,
100% issued share capital of E&C Holdings at a total consideration of RMB82.5 million (the
“Consideration”), of which RMB72.5 million shall be paid by Kering on the date of completion
and the balance of RMB10.0 million to be paid on the date falling 6 months from the date of
completion. The Consideration was determined on an arm’s length basis with reference to (i)
the value of channels and goodwill of E&C Group; and (ii) accumulated losses of E&C
Holdings as at June 30, 2024, and shall be subject to adjustment based on (i) the cash balances
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 164 –


--- page 175 ---
of E&C Group; (ii) the debt amount of E&C Group, including but not limited to various
financial obligations such as borrowed monies, guarantees, unpaid dividends, finance-related
sales, non-recourse receivables, and certain derivatives; and (iii) the net assets of E&C Group
as of the completion to be set out in the completion accounts (the “Closing Adjustments”). The
completion of the Disposal took place on May 30, 2025. Upon completion of the Disposal,
E&C Holdings will cease to be a subsidiary of our Company. On May 22, 2025, a deed of
termination was also executed between, among others, the Supplier, Eternal BVI and Mr. Lau,
to terminate the Option Agreement and to discharge and release Mr. Lau from all his liabilities,
duties, obligations and undertakings under the Distribution Agreement and the Deed of
Novation.
E&C Holdings is an investment holding company with two subsidiaries, namely, E&C
Shanghai and E&C Trading, both of which are primarily engaged in the exclusive trading and
retail sales of the products provided by the Supplier. For the years ended March 31, 2023, 2024
and 2025, the E&C Group recorded (i) revenue of approximately RMB14.9 million, RMB64.9
million and RMB137.8 million, respectively; (ii) gross profit of approximately RMB9.6
million, RMB38.4 million and RMB85.2 million, respectively; and (iii) net loss of
approximately RMB4.7 million, RMB13.1 million and RMB6.1 million, respectively. Subject
to the Closing Adjustments, our Group is expected to record a gain on disposal from the
Disposal for the financial year ending March 31, 2026. To the best knowledge and information
of our Directors, E&C Holdings have in all material respects complied with the relevant laws
and regulations applicable to its operations during the Track Record Period and up to May 30,
2025, the date of completion of the Disposal.
PRE-IPO SHARE OPTION SCHEME
Our Company adopted the Pre-IPO Share Option Scheme on June 18, 2024. As of the date
of this prospectus, the outstanding options to subscribe for an aggregate of 26,194,000 Shares
representing approximately 2.0149% of the share capital of our Company in issue immediately
following the completion of the Capitalization Issue and the Global Offering (assuming the
Over-allotment Option is not exercised, and without taking into account any Shares which may
be allotted and issued upon the exercise of any options granted under the Pre-IPO Share Option
Scheme and any options which may be granted under the Share Option Scheme), have been
conditionally granted by our Company under the Pre-IPO Share Option Scheme to a total of
18 grantees on June 24, 2024 and July 8, 2024, respectively, and the exercise price of each
option granted were HK$0.1. Upon exercise of the options under the Pre-IPO Share Option
Scheme, a total of 26,194,000 Shares will be allotted and issued to Eternal Beauty Investment
Limited, a company incorporated in BVI and wholly-owned by Futu Trustee Limited, the
trustee of the trust set up by our Company to facilitate the administration of the Pre-IPO Share
Option Scheme, which shall then distribute the Shares to the relevant grantees. As of the Latest
Practicable Date, none of the options has been exercised.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 165 –


--- page 176 ---
The Shares allotted and issued upon the exercise of the options under the Pre-IPO Share
Option Scheme are subject to certain lock-up restrictions. For further details of the Pre-IPO
Share Option Scheme, see the section headed “Statutory and General Information — E.
Pre-IPO Share Option Scheme” in Appendix IV to this prospectus.
PUBLIC FLOAT REQUIREMENTS
Immediately upon completion of the Capitalization Issue and the Global Offering and
taking no account of any Shares which may be allotted and issued pursuant to the exercise of
the Over-allotment Option, any options granted under the Pre-IPO Share Option Scheme, and
any options which may be granted under the Share Option Scheme, the Shares held by Eternal
International, which is 90% owned by Mr. Lau, our executive Director, chairman of the Board
and a Controlling Shareholder, and 10% owned by Mrs. Lau, the spouse of Mr. Lau, will not
be counted towards public float.
Save as disclosed above, to the best of our Directors’ knowledge, no other Shareholder (i)
is a core connected person of our Company; (ii) has been financed directly or indirectly by a
core connected person of our Company for the acquisition of Shares; or (iii) is accustomed to
take instructions from a core connected person of our Company in relation to the acquisition,
disposal, voting or other dispositions of the Shares registered in their name or otherwise held
by them, and all the Shares held by such Shareholders will be counted towards the public float
of our Company for the purpose of Rule 8.08 of the Listing Rules upon Listing. Accordingly,
immediately following completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), approximately 25% of our issued Shares will be held by the public and counted
towards the public float for the purpose of Rule 8.08 of the Listing Rules.
CORPORATE STRUCTURE
The following charts illustrate our shareholding and corporate structure (1) immediately
after the completion of the Corporate Reorganization but prior to the completion of the
Capitalization Issue and the Global Offering, and (2) immediately following the completion of
the Capitalization Issue and the Global Offering (assuming that the Over-allotment Option is
not exercised, and without taking into account any Shares which may be allotted and issued
upon the exercise of any options granted under the Pre-IPO Share Option Scheme and any
options which may be granted under the Share Option Scheme).
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 166 –


--- page 177 ---
Immediately after the completion of the Corporate Reorganization but prior to the completion of the Capitalization Issue and the Global
Offering
Eternal BVI
 (BVI)
Eternal China
(HK)
Moral Happiness
(HK)
Excellent Fareast
(HK)
E China Trading
(HK)
Talent Crown
(HK)
E&C Holdings(2)
(HK)
B&E China(1)
(HK)
E&C Trading
(HK)
E&C Shanghai
(PRC)
Shanghai Eternal Import
and Export
(PRC)
Eternal Shanghai
Trading
(PRC)
Eternal China
Trading
(PRC)
Shanghai Eternal
Trading
(PRC)
Shanghai Eternal Brand
Management
(PRC)
Eternal
Shenzhen Trading
(PRC)
Eternal Chengdu Trading
(PRC)
Eternal Shanghai Optical
(PRC)
Shanghai Zhuangwei
Advertising
(PRC)
Eternal Beijing Trading
(PRC)
Eternal Guangzhou
Trading
(PRC)
Shanghai Yierpai
Advertising
(PRC)
100%
BABOR Beijing
(PRC)
BABOR Shanghai
(PRC)
Eternal Development
(PRC)
offshore
onshore
50% 100%
100%
100% 100%100%100%100%
100% 100% 100% 100% 100%
Guangzhou Consulting
(PRC)
100%
Guangzhou Huisheng
Trading
(PRC)
100%100%
100%
Eternal Shanghai
Cosmetics
(PRC)
100%100%100%100%100%100%100% 100%
100%100%100%
Shanghai Yongxin Trading
(PRC)
100%
Eternal Shanghai
Digintelligence
(PRC)
Eternal Beauty Shanghai
 Trading
(PRC)
Shanghai Smiley
(PRC)
100%100%100%
Eternal Xian Trading
(PRC)
100%
Our Company
(Cayman Islands)
10%
Mr. Lau
90%
Mrs. Lau
Eternal International
(BVI)
100%
100%
denotes our major operating subsidiaries
Eternal Far East
(HK)
100%
Eternal Far East
Macau Branch(3)
(Macau)
100%
Guangzhou Eternal
Import and Export(4)
(PRC)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 167 –


--- page 178 ---
Notes:
(1) – (2) Please refer to notes (1) to (2) on page 160 in this prospectus.
(3) Eternal Far East Macau Branch was established as part of the business expansion of our Group and is principally engaged in retailing of perfumes, sk incare products, color
cosmetics and eyewear.
(4) Guangzhou Eternal Import and Export was established as part of the business expansion of our Group and is principally engaged in trading of perfume s, color cosmetics
and skincare products.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 168 –


--- page 179 ---
Immediately after the completion of the Capitalization Issue and the Global Offering (assuming that the Over-allotment Option is not exercised and w ithout taking into
account of any Shares which may be issued upon exercise of the share options granted under the Pre-IPO Share Option Scheme or may be granted under the Sha re Option
Scheme)
Eternal BVI
(BVI)
Eternal China
(HK)
Moral Happiness
(HK)
Excellent Fareast
(HK)
E China Trading
(HK)
Talent Crown
(HK)
B&E China(1)
(HK)
Shanghai Eternal Import
and Export
(PRC)
Eternal Shanghai Trading
(PRC)
Eternal China Trading
(PRC)
Shanghai Eternal
Trading
(PRC)
Shanghai Eternal Brand
Management
(PRC)
Eternal Shenzhen
Trading
(PRC)
Eternal Chengdu
Trading
(PRC)
Eternal Shanghai
Optical
(PRC)
Shanghai Zhuangwei
Advertising
(PRC)
Eternal Beijing Trading
(PRC)
Eternal Guangzhou
Trading
(PRC)
Shanghai Yierpai
Advertising
(PRC)
100%
BABOR Beijing
(PRC)
BABOR Shanghai
(PRC)
denotes our major operating subsidiaries
Eternal Development
(PRC)
offshore
onshore
50%
Eternal Far East
(HK)
100% 100% 100%100%100%100%
100% 100%
Eternal Far East
Macau Branch(3)
(Macau)
100% 100%
Guangzhou Consulting
(PRC)
100%
Guangzhou Huisheng
Trading
(PRC)
100%100%
100%
Eternal Shanghai
Cosmetics
(PRC)
100%100%100%100%100%100%100% 100%
100%100%100%
Mr. Lau
90%
Mrs. Lau
10%
Shanghai Yongxin
Trading
(PRC)
100%
Eternal Shanghai
Digintelligence
(PRC)
Eternal Beauty
Shanghai Trading
(PRC)
Shanghai Smiley
(PRC)
100%100%100%
Eternal Xian Trading
(PRC)
100%
Eternal International
 (BVI) Public Shareholders
Our Company
(Cayman Islands)
75% 25%
100%
100%
Guangzhou Eternal
Import and Export(4)
(PRC)
Notes:
(1) – (4) Please refer to notes (1) to (4) on page 168 in this prospectus.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 169 –


--- page 180 ---
OVERVIEW
We are the largest perfume group in China (including Hong Kong and Macau) apart from
brand-owner perfume groups in terms of retail sales in 2023. Unlike brand-owner perfume
groups, which mainly operate the brands owned by them and take lead in the involvement of
(i) brand positioning and formulation of marketing strategy, (ii) research and development, (iii)
manufacturing, and (iv) authorization for the utilization of their brand rights, we primarily
engage in (i) distribution of products procured from third party brand licensors, from which we
generate our revenue, and (ii) market deployment for these brand licensors, such as brand
management, and designing and implementing customized market entry and expansion plans
for their brands, from which we generate no revenue. We have a large and diverse portfolio of
iconic brands of not only perfumes, but also color cosmetics, skincare products, personal care
products, eyewear and home fragrances. We achieved a leading position for perfumes in China
(including Hong Kong and Macau) as a result of our long operating history, through which we
gained extensive knowledge in the perfume industry in these markets, and accumulated
pertinent expertise and abundant resources for the distribution and market deployment of
numerous international perfume brands.
Leveraging our market leading position, deep industry know-how and valuable
experience in mainland China’s perfume industry, we are well-positioned to benefit from the
expected growth of the perfumes market in mainland China. The perfumes market in mainland
China recorded growth in recent years and has the potential to further expand, mainly due to
the lower penetration of perfumes in mainland China and its large population size compared
with other developed countries, according to Frost & Sullivan. We believe we will continue to
capitalize on the market opportunity brought by the emerging olfactory economy ( ෠ᙂ຾᏶)
in mainland China by curating perfume brands that offer personalities and aesthetic values to
consumers in a variety of consumption scenarios.
We gradually accumulated outstanding capabilities for introducing and operating various
globally leading brands in China (including Hong Kong and Macau) during our extended
operation, which enabled us to address the challenges faced by the global brands in respect of
its go-to market strategy, distribution network planning and consumer catering tactics in these
markets. Our capabilities for product distribution and market deployment are supported by our
deep market insights, extensive omni-channel network, experienced teams of professionals and
strong supply chain management capabilities, all of which were acquired through our early
penetration in the perfumes market in mainland China, on-the-ground local presence and
continuous capital investments and business relationship maintenance and expansion. Such
comprehensive capabilities also enabled us to build and maintain a strong, stable and win-win
relationship with our brand licensors, which can further strengthen the multi-layered market
entry barriers. We believe they cannot be easily replicated by our competitors.
BUSINESS
– 170 –


--- page 181 ---
Our reputation among the world’s leading brands enabled us to be a business partner for
a number of brand licensors who are looking to enter into or expand their brands’ presence in
China (including Hong Kong and Macau). Such long-term business relationships enabled us to
curate iconic brands and attractive products in our portfolio. As of the Latest Practicable Date,
we have a total of 72 external brands in our brand portfolio, including Hermès, V an Cleef &
Arpels, Chopard, Albion and Dolce & Gabbana and Laura Mercier which cover diverse and
versatile pricing tiers and features catering to differentiated demands of the consumers in China
(including Hong Kong and Macau). For details, please see “— Brands and Products” in this
section. During the Track Record Period, we obtained a significant number of exclusive
licenses and sub-licenses for certain products and certain channels from the brand licensors in
mainland China, Hong Kong and/or Macau. Through these licenses and sub-licenses, these
brand licensors also granted us the right to use their intellectual property, including trademarks
and logos, within a specified scope. We believe these exclusive licenses and sub-licenses
showcased the trust the brand licensors have in us, and solidified our competitive advantage
over our competitors.
We offer a comprehensive sales and distribution network covering a large number of
access points for perfumes, skincare products, color cosmetics, personal care products,
eyewear and home fragrances in China (including Hong Kong and Macau). As of March 31,
2025, our products were sold at more than 100 offline POSs operated by ourselves and more
than 8,000 POSs operated by our retailer customers in over 400 cities in China (including Hong
Kong and Macau). As of the same date, we also sold products to offline distributors, which may
resell these products to their offline retailers. In addition to offline sales channels, we also sell
products online via well-known e-commerce platforms and social media platforms in China
(including Hong Kong and Macau). Such large and omni-channel sales and distribution
network helps us maintain a growing consumer base in the evolving market environment,
maximizes the value of our consumers by allowing them to enjoy seamless and convenient
shopping experience; and enables us to address the demands from a large group of consumers
with varying ages, spending powers and product preferences. Our well-balanced sales and
distribution network covering both online and offline channels also enabled us to adjust our
sales approaches flexibly in response to the changes that may affect our business and
industries.
During the Track Record Period, we have maintained growth of our business and results
of operations. Our revenue increased from RMB1,699.1 million for the year ended March 31,
2023 to RMB1,863.8 million for the year ended March 31, 2024, and further to RMB2,083.4
million for the year ended March 31, 2025. Similarly, our net profit grew from RMB173.1
million for the year ended March 31, 2023 to RMB206.5 million for the year ended March 31,
2024, and further to RMB227.0 million for the year ended March 31, 2025. We conduct product
distribution and market deployment for 52, 65 and 73 external brands as of March 31, 2023,
2024 and 2025, respectively, which are the brands for which our license or sub-license
remained effective as of the respective dates.
BUSINESS
– 171 –


--- page 182 ---
OUR COMPETITIVE STRENGTHS
We believe the following strengths have contributed to our success and differentiate us
from our competitors:
We maintain a leading position for perfumes in China (including Hong Kong and Macau)
We are the largest perfume group in China (including Hong Kong and Macau) apart from
brand-owner perfume groups, and the third largest perfume group in China (including Hong
Kong and Macau), in terms of the retail sales of perfumes in 2023. Among the top five perfume
groups in mainland China’s perfumes market, we were the only non-brand-owner perfume
group in 2023. In addition, our portfolio of perfume brands included seven brands among the
top 30 perfume brands in terms of retail sales of perfumes in 2023 in mainland China.
We achieved a leading position in China (including Hong Kong and Macau) by leveraging
our continuous operation of more than 40 years, through which we gained extensive knowledge
in the perfume industry in these markets, and accumulated the relevant expertise and abundant
resources for the product distribution and market deployment of international perfume brands.
To share our valuable industry insights with key players in perfumes industry in China
(including Hong Kong and Macau), including, but not limited to, international brand owners
of perfumes, perfume industry experts and domestic and international fashion and cosmetics
publications, beginning in 2020, we have jointly published the “China Perfume Industry
Research White Paper” () with an Independent Third-party
industry consultant annually. It has become a well-received research report analyzing the
relevant market trends and consumers’ behavior patterns relating to perfumes in mainland
China, and providing general observations and suggestions to the existing and potential players
in mainland China’s perfumes industry. Since its publication, this research white paper has
been used as references by numerous players in the perfumes industry. In 2023, a number of
media participants and KOLs participated in our launch conference of the China Perfume
Industry Research White Paper, with a large audience watching its online broadcast. Moreover,
over 160 news reports and articles about such launch conference were published.
In addition to the external brands in our portfolio, we also launched one self-owned brand,
Santa Monica, in 1999, under which we sold eyewear and perfumes during the Track Record
Period and up to the Latest Practicable Date. We believe our successful launch and continuous
operation of Santa Monica showcase our ability to fully utilize our experience gained from
managing international brands, our omni-channel sales and distribution network, and the
expertise and resources we accumulated from our operations in the perfumes market, which
help to distinguish us from our competitors.
BUSINESS
– 172 –


--- page 183 ---
We maintain a clear focus on the structurally growing and resilient olfactory economy in
mainland China to capture strategic market opportunities
The emerging olfactory economy in mainland China is expected to serve as a sustainable
growth engine in mainland China’s perfumes market. According to Frost & Sullivan, mainland
China is the fastest growing perfumes market among the top 10 countries in the global
perfumes industry in terms of retail sales from 2018 to 2023, with a CAGR of 15.0% during
this period. Comparatively, the perfumes market in the United States, Brazil, France, Germany
and the United Kingdom grew at a CAGR of 7.0%, 2.8%, 0.7%, 2.4% and 0.7%, respectively,
for the same period. Mainland China’s perfumes market also demonstrated resilience in the
changing macro environment, including the adverse impact caused by the COVID-19
pandemic. The market size in mainland China’s perfumes market in terms of retail sales grew
at a CAGR of 15.0% from 2018 to 2023 (including a CAGR of 11.7% from 2020 to 2022), and
is expected to further grow at a CAGR of 14.0% to 2028. This growth rate was higher than that
of the perfumes market in the United States, the United Kingdom, Japan and South Korea,
according to Frost & Sullivan.
Despite the growth of the perfumes market in mainland China in terms of retail sales in
recent years, the per capita expenditure on perfume by consumers in mainland China is still
relatively low as compared to other countries, including other Asian countries such as Japan
and South Korea, and large perfumes market such as the United States and the United Kingdom
mainly due to the lower penetration of perfumes in mainland China and mainland China’s large
population size. However, per capita expenditure on perfumes in mainland China has
experienced an upward trend, growing at a CAGR of approximately 14.9% from 2018 to 2023.
A key contributing factor to the future growth of mainland China’s perfumes market is the
olfactory economy. It is a trend among mainland China’s perfume consumers to pursue
uniqueness, personality and aesthetic value when wearing perfumes or using other fragrance
products, according to Frost & Sullivan. This trend is expected to continue to generate
consumer demand on perfumes and other fragrance products for daily usage, personal
collection and gifts, as the case may be, and further propel the growth of mainland China’s
perfumes market.
Leveraging our market leading position, deep industry know-how and substantial
experience in mainland China’s perfumes industry, we are well-positioned to benefit from the
expected growth of the perfumes market in mainland China. As a leader in mainland China’s
perfumes market, our market share in terms of retail sales was approximately 8.1% in 2023.
Our perfume brand portfolio consisted of 52 external brands as of the Latest Practicable Date,
comprising a number of world famous brand names, prestigious perfume houses and emerging
niche brands, including, among others, V ersace, Santa Maria Novella, Parfums de Marly and
Xerjoff. Our product offerings in perfumes market cater to a diverse group of consumers with
varying ages, spending powers, taste in scents and needs for wearing perfumes. We also have
a solid reputation among global players in the perfume industry for our proven track record of
successfully launching and managing international brands in mainland China. We believe such
success is attributable to our ability to anticipate and quickly adapt to the local trends by
continuing to explore new product offerings that are tailored to the demands and preferences
BUSINESS
– 173 –


--- page 184 ---
of the consumers. In particular, we capitalized on the market opportunity brought by the
olfactory economy in mainland China by curating perfume brands that offer different
personalities and aesthetic values to consumers in a variety of consumption scenarios. For
instance, we introduced Santa Maria Novella in 2021 into mainland China market, which is an
Italian brand with product design tracing back to the Italian Renaissance. We believe such
features appeal to the aesthetic taste in history and Italian culture for certain consumers in
mainland China. We also introduced Maison 21G in 2022, an established brand that is able to
create bespoke perfumes for individual consumers based on their particular preferences and
tastes in scents, which we believe appeals to certain consumers who pursue individuality and
personal tastes. Furthermore, we emphasize satisfactory consumer shopping experiences.
Accordingly, we created Perfume Box, our self-operated retailer brand, a one-stop shopping
spaces with a large and diverse selection of perfumes for consumers. We adopted several
marketing and sales approaches to stimulate the shopping desire and loyalty of the consumers
at Perfume Box. Please see “— Our Competitive Strengths — We have a large and
multi-layered customer base comprising an omni-channel sales and distribution network to
continuously reach wider group of consumers” in this section for more details.
As a result of our ability to capture the growth opportunities in mainland China’s
perfumes market, our revenue generated from the sales of perfumes in mainland China
increased steadily during the Track Record Period. Despite the impact of the COVID-19
pandemic on the Chinese economy from 2021 to 2023, our sales of perfumes remained resilient
in light of our revenue growth during the Track Record Period.
We developed outstanding capabilities for product distribution and market deployment,
which impose significant market entry barriers for our competitors
During our extended operation, we gradually accumulated in-depth industry
understanding and strong execution capability to introduce and operate various globally
leading brands in China (including Hong Kong and Macau). We provide brands with highly
value-added and one-stop services generally covering every aspect of their operation in the
local markets. Such capabilities enable us to address the challenges faced by the global brands
in respect of its go-to market strategy, distribution network planning and consumer catering
tactics. Our capabilities for product distribution and market deployment are primarily
demonstrated in the following aspects:
 Brand strategy and go-to-market plans : We maintain an efficient organization
structure that enables us to consolidate internal and external resources, and provide
comprehensive market deployment services to our brand licensors. We closely
monitor local consumers’ needs and market trends when launching new brands in
China (including Hong Kong and Macau). Based on different market positions and
development needs of the particular brands, we formulate tailor-made brand
development strategies, consumer outreach strategies and go-to-market plans with
strong international know-how and local market insight. We also customize the
marketing deployment plans for the brands, which allow them to enjoy a
combination of media and public relations exposures to reach broad and diverse
BUSINESS
– 174 –


--- page 185 ---
groups of local consumers. With strong connection with KOLs and media, we are
able to leverage these resources to help the brands in our portfolio to gain valuable
market exposure and penetrate various levels of the local markets to maximize their
return on investment. We also utilize our strong CRM database to keep close track
of the evolving consumer preferences, which, we believe, will enable us to achieve
the anticipated business expansion expectation of the brands in China (including
Hong Kong and Macau).
 Sales and distribution network : We have established a comprehensive sales and
distribution network covering a large number of access points for perfumes, skincare
products, color cosmetics, personal care products, eyewear and home fragrances.
The limited exposure to local sales and distribution network resources is a challenge
commonly faced by international brands, according to Frost & Sullivan. We built our
omni-channel sales and distribution network progressively by leveraging our
long-term and on-the-ground presence in the local markets and in-depth industry
knowledge that helped us overcome the challenges in mainland China’s fast-
evolving market and our know-how accumulated in the complex industry and
regulatory environment. Our products were sold at more than 100 offline POSs
operated directly by ourselves and more than 8,000 POSs operated by our retailer
customers in over 400 cities in China (including Hong Kong and Macau) as of
March 31, 2025, which enabled us to quickly deploy the go-to-market strategies for
new brands.
 Importation compliance : We have a dedicated professional regulatory affairs team,
including a regulatory affairs consulting team and a technical team, which provides
the brands with one-stop compliance solutions covering regulatory affairs
consulting, product testing and registration filing. It also helps the brands conduct
compliance review at the product development stage, complete registration filing
before the products enter into the Chinese market, and continue to carry out
compliance supervision after importation. The advantage of having a dedicated
in-house registration team is that in addition to helping our brand licensors complete
the necessary product filings, we also work with the internal supply chain
department to ensure that goods are imported in a compliant manner and that the
registration information is consistent with the filing information, as well as with the
branding and business teams to ensure that the product launches are carried out
according to the stated business plans.
 Supply chain management : We are capable of handling all matters in the supply
chain process, from product procurement, warehousing to logistics support.
According to Frost & Sullivan, cultural disparities and industry know-how in the
supply chain process in mainland China are among several formidable challenges for
international brands that wish to enter into this market. We are able to timely arrange
for importation, warehousing and logistics, starting from the procurement of
products to the delivery to our customers. The warehouses we use are located in
BUSINESS
– 175 –


--- page 186 ---
multiple cities, including Hong Kong, Shanghai and Guangzhou, making us more
flexible in logistics choices involving product storage, and more resilient to deal
with unexpected disturbance to our supply chain.
We believe our market insights, local expertise, supply chain management capabilities
and sales and distribution network were acquired through our early penetration in the perfumes
market in mainland China, on-the-ground local presence and continuous capital investments
and business relationship maintenance and expansion, which we believe cannot be easily
replicated by our competitors. We are also capable of grasping and decoding the core values
of the brands, and making effective and proper connection of their products to Chinese
consumers. We believe this has been a key advantage for us that limits the disruptive potential
of new market entrants. Moreover, our extensive capabilities for product distribution and
market deployment enabled us to build and maintain a strong, stable and win-win relationship
with our brand licensors. We believe such close partnership with brand licensors can further
strengthen the multi-layered market entry barriers, and thereby, creating additional obstacles
for our competitors to replicate our success.
We are a long-term business partner for the leading global brands
We have a solid reputation among the world’s leading brands as a result of our proven
track record of successfully launching and managing international brands in China (including
Hong Kong and Macau). Our reputation enabled us to be a business partner for a number of
brand licensors who are looking to enter into or expand their brands’ presence in these markets,
particularly in China, which has been increasingly viewed as a strategically significant market
for global expansion and growth by the international brands, according to Frost & Sullivan. We
maintain long-term and stable relationship with our brand licensors. For example, we cooperate
with InterParfums and Albion. InterParfums is a globally renowned company specializing in
the design, manufacturing and distribution of perfumes and cosmetics. We have worked with
InterParfums, which was also one of our five largest suppliers during each financial year in the
Track Record Period, for over 30 years. In addition, we have been the only local operator for
Albion, which is a high-end Japanese skincare brand, in Hong Kong since 2014.
A majority of the brands in our brand portfolio as of Latest Practicable Date were
introduced by us into the market of China (including Hong Kong and Macau) for the first time,
and established their foothold in the region from scratch. The brands we introduced into these
markets include, among others, (i) Coach, an iconic global fashion house founded in New Y ork
in 1941; (ii) V an Cleef & Arpels, a world-renowned luxury jewelry brand that also offers niche
perfumes; and (iii) Santa Maria Novella, a long-established Italian brand with a rich history of
association with the Italian Renaissance.
Our long-standing business relationships with the leading international brand licensors
enabled us to curate iconic brands and attractive products. As of the Latest Practicable Date,
we had a total of 72 external brands in our brand portfolio, including Coach, which offers
BUSINESS
– 176 –


--- page 187 ---
trendy perfumes such as Coach the Fragrance (ɾɻ) and Coach for Men (Ӳɻ), and
V an Cleef & Arpels, which offers perfumes such as Moonlight Patchouli (࠰and
Santal Blanc (࠰For details, please see the section headed “— Brands and
Products” in this prospectus.
The brands and products for which we conduct product distribution and market
deployment cover diverse and versatile pricing tiers and features catering to differentiated
demands of the consumers in China (including Hong Kong and Macau). For instance, we offer
entry-prestige perfumes, prestige perfumes and luxury perfumes to consumers who exhibit
different spending powers. To make the perfume products we sell attractive and accessible to
consumers with different tastes and preferences in scents, we also offer perfumes containing
all spectrums of scent profile, including floral notes, oriental notes, woody notes and fresh
notes. In the skincare category, we offer a wide range of products covering different skin ages,
skin status and functions, including whitening, moisturizing and anti-aging.
We primarily promote and sell certain featured products of the brands in selected sales
channels and territories under exclusive licenses or exclusive sub-licenses, which preclude our
competitors, even the brand licensors themselves, from selling the same products in the same
channels and/or territories. During the Track Record Period, a significant number of the brand
licensors we work with have granted us exclusivity in terms of the selected products, channels
and territories of distribution. We believe these exclusive licenses and sub-licenses showcased
the trust these brand licensors have in us, and solidified our competitive market advantage.
We have a large and multi-layered customer base comprising an omni-channel sales and
distribution network to continuously reach wider group of consumers
We offer a comprehensive sales and distribution network covering a large number of
access points for perfumes, skincare products, color cosmetics, personal care products,
eyewear and home fragrances in China (including Hong Kong and Macau). Our products reach
consumers via multiple channels, including online sales channels, such as social media
platforms and e-commerce platforms, and offline sales channels, such as shopping malls,
department stores, travel retailers and chained cosmetics specialty stores. These channels are
either directly operated by ourselves, which are our direct sales channels, or operated by our
retailer and distributor customers, which procure products from us and sell them to other
retailers and/or consumers. We believe this large and multi-faceted sales and distribution
network helps us maintain a steadily growing consumer base in the evolving market
environment.
Our omni-channel sales and distribution network primarily demonstrates the following
features:
 Robust offline sales and distribution network : We maintain a well-balanced and fully
integrated online and offline sales and distribution network, where we provide
offline shopping spaces in which consumers can gain hands-on experience with the
actual products and interact with our resident beauty advisors, and online shopping
BUSINESS
– 177 –


--- page 188 ---
for convenient and fast shopping experiences. As compared with some of our
competitors, we have more extensive offline sales and distribution network, which
were a result of our strong recognition by the key players in the market and
long-term accumulation of fruitful business relationships. As of March 31, 2025, we
operated over 40 boutique stores. As of the same date, our products were sold at
more than 100 offline POSs operated directly by ourselves and more than 8,000
POSs operated by our retailer customers in over 400 cities in China (including Hong
Kong and Macau), which were either operated by ourselves or retailers.
 Well-rounded presence on the online platforms : We sell products through all major
online platforms in mainland China, according to Frost & Sullivan. These online
platforms consist of e-commerce platforms such as Tmall and JD.com, and social
media platforms such as Douyin (ࠪKuaishou ( Ҟ˓) and RED (ࣣߎ.)
Besides selling products on online platforms, we participate in various selling and
promotional activities hosted by online platforms to promote the brands in our brand
portfolio. For instance, in 2018, we participated as a representative merchant, or
“captain” (ڗof the Tmall Perfume Day (ᗳ˚), which is an
important perfume promotional activity held several times a year by Tmall. We also
cooperate with online platforms from time to time to analyze the consumer data and
other information collected by them to prepare research reports that both online
platforms and us can utilize to better reach online consumers.
We attract and reach consumers through our extensive sales and distribution network,
thereby capturing the up-to-date market trends. For instance, during the Track Record Period,
we sold over 2,000 products in terms of SKU from over 55 brands in online and offline
Perfume Box stores. We successfully launched various sales and marketing initiatives at the
Perfume Box stores and under the Perfume Box name, which demonstrated the advantages of
our proprietary retailer brand by fully utilizing our sales and marketing resources. These
initiatives include, among others, (i) Bank of the Perfume (ვБ), a marketing and product
display initiative that strives to build a sense of connection between consumers and their scent
memory, which can be recreated by perfumes; (ii) Olfactory Social Networking (ʹ), a
store design concept under which we design the store into a social networking space for
perfume lovers, which goes beyond the shopping spaces and helps boost consumer traffic and
loyalty; and (iii) Mystery Boxes for Perfumes (ଷ), a sales initiative under which we
wrap miniature perfumes into unlabeled boxes with appealing design to create surprises to
consumers and stimulate their purchase desire. In addition, we built a comprehensive
membership system for Perfume Box to enable us to transform potential consumers to become
our loyal customers.
We have built such omni-channel sales and distribution network through conducting
product distribution and market deployment for the international perfume brands, and are
well-positioned to leverage this extensive network to sell other types of branded products,
BUSINESS
– 178 –


--- page 189 ---
including skincare products, color cosmetics, personal care products, eyewear and home
fragrances. We believe that the difficulty in building and expanding this network sets high
entry barriers for our competitors to compete with us in terms of sales and distribution
capabilities.
Our multi-layered sales and distribution network enables us to cover wide range of
consumers with varying ages, spending powers and product preferences. We strive to offer
appropriate and suitable products that satisfy the personalized needs of such a diverse group
of consumers. Based on consumer shopping data we collect from offline and online sales
channels, and leveraging our big data analytics capability, we offer tailored beauty advice and
recommendations to consumers through our resident beauty advisors, which we believe helps
to create intimate interactions with consumers and drive their purchasing desire. Our sales and
distribution network also enables us to determine the cities, sales channels and marketing
activities, as well as distribution approaches that we believe are appropriate for the products
we sell to reach the target consumer groups. In addition, in order to develop long-lasting and
personalized relationships with our consumers, we have established a membership program
with more than 2.0 million consumer members as of March 31, 2025. We have built a full-cycle
consumer management program that covers the entire life cycle of consumers. To formulate
targeted sales and marketing strategies, we categorized consumers into potential consumers,
enthusiastic potential consumers, active and loyal consumers, normal consumers, dormant
consumers and former consumers. For details of our sales and marketing strategies towards
different types of potential consumers and consumers, please refer to the paragraph headed
“— Our Business Model — Brand Building and Enhancement — Product Distribution —
Consumer relationship management” in this section. We strive to continuously transform
first-time perfume users into frequent consumers with high degree of loyalty through their
interactions with our beauty advisors, our membership program and various marketing
initiatives. Our well-balanced sales and distribution network also enabled us to adjust our sales
approaches flexibly in response to any developments that may affect the industries in which we
operate or our business.
We are led by a visionary management team, promoting a people-centric corporate
culture
Led by Mr. Lau, our founder and president, we have a seasoned and visionary senior
management team that combines deep industry and operation know-how and technological
savviness with a strong sense of mission to serve both the brands and consumers. Members of
our senior management team have extensive experience in the perfumes, skincare products,
color cosmetics, eyewear, home fragrances, personal care products and/or retail industries in
China (including Hong Kong and Macau). Mr. Lau has more than 40 years of experience in the
industries where we operate, and has successfully led us to become a leading perfume group
in mainland China. Ms. Lam, our chief executive officer, has approximately 25 years of
relevant experience with us. Ms. Lau, our executive Director and the daughter of Mr. Lau,
joined our Group in 2004, and has accumulated abundant experiences in public relations, brand
management and product procurement, with respect to both perfumes and color cosmetics. Mr.
Chu Wai Tsun, Baggio, our chief financial officer, has over 20 years of experience in
BUSINESS
– 179 –


--- page 190 ---
accounting and finance accumulated from his work in accounting firms and companies listed
on the Stock Exchange. He is responsible for our overall financial management and investor
relationship affairs. Ms. Wang Wei, our chief operating officer, has over 14 years of
experiences in the beauty industry and e-commerce, and is responsible for our Group’s sales
and operations. She led the development and expansion of our sales and distribution network
to include over 20 e-commerce and social media platforms since joining our Company by
leveraging her experience gained in one of the largest e-commerce platforms in mainland
China. Mr. Xue Y anhe, our vice president of the mainland China region of our Group,
accumulated abundant experience in expanding the sales channels since he joined our Group
in 1998. He established close relationships with various shopping malls and department stores.
Mr. Huang Huiyong, our general manager of modern sales channels of our Group, possesses
over 20 years of experience in sales, marketing and general management in the retail and
cosmetics industries. We believe Mr. Xue and Mr. Huang’s experience and relationships with
business partners in the relevant sales channels will continue to help us make deeper
penetration in these respective channels.
We maintain a people-centric culture to inspire our employees to always strive for
excellence. Our management and human resources team seek to provide tailor-made growth
plans to our employees, under which their strengths are discovered and nurtured. Most of our
senior management members have over 10 years of working experience within our Group,
during which they were trained internally and progressively promoted based on their potential
and performances. We also recruit external talents who gained valuable skills and experience
outside our Group. We value both our internally trained talents in terms of their loyalty and
home-grown capabilities, and our external talents in terms of their complementary skillset and
outside experience. We believe our people-centric culture made a significant contribution to
attracting and retaining highly qualified personnel, who form the backbone of our success and
promoted our sustainable growth.
OUR BUSINESS STRATEGIES
To solidify our market leading position and further propel our business growth, we intend
to pursue the following business strategies:
Strengthen our market leading position through optimizing, broadening and diversifying
our brand and product portfolios
To maintain our competitive advantages as a leading perfume group in China (including
Hong Kong and Macau), we intend to optimize, broaden and diversify our portfolio of both
external brands and self-owned brands.
External Brands
For external brands, we plan to cooperate with new brand licensors of reputable and
leading international brands that offer attractive products, which we believe are suitable for our
target consumers and have the potential for growth in China (including Hong Kong and Macau)
BUSINESS
– 180 –


--- page 191 ---
based on our market analysis. Specifically, (i) for perfumes, we intend to identify suitable
brands to cooperate with that we believe can complement our existing perfumes brand and
products portfolios and enable us to expedite our business expansion strategy with respect to
perfumes. Specifically, based on our extensive market research and abundant industry insights,
we will consider the following factors when selecting the brands to cooperate with, including,
among others, (A) their market reputation and financial performance; (B) their growth
prospects; and (C) whether or not they are among the top 100 list in terms of retail sales in the
United States prepared by reputable third-party market research consultants; (ii) for skincare
products, we aim to identify the leading brands in the sun protection and anti-aging
sub-markets, and introduce them into China (including Hong Kong and Macau); (iii) for home
fragrances, we intend to introduce high-end branded products, including, among others,
diffusers and scented candles; and (iv) for personal care products, we plan to identify the ideal
perfume brands and home fragrances brands in our portfolio that also offer personal care
products to promote, and drive the sales of personal care products under these brands. We
believe that the expansion of our brand and product portfolios will continue to drive our
revenue growth, make deeper market penetration in China (including Hong Kong and Macau),
and increase our market share in the existing industries in which we operate. We may also
explore different and flexible methods of collaboration with the brand licensors, including, but
not limited to, the establishment of joint ventures to conduct product distribution and market
deployment for the brands and their products.
Self-owned Brands
We plan to continue to invest in and develop our self-owned brands, including our
existing self-owned brand, Santa Monica, and other self-owned brand(s) to be launched in the
future. For Santa Monica, we will refine the product categorization to better match the
preferences and spending powers of our target consumers. We also plan to develop home
fragrances under our Santa Monica brand to capitalize on the growing market opportunities in
this segment. In addition to Santa Monica, we will develop and launch other self-owned
brand(s) in the near future, including brand(s) for skincare products.
In addition to developing our proprietary brands, we may also acquire or invest in existing
external brands of skincare products, or form joint ventures with their brand owners to operate
such brands. We will consider the following factors when selecting such skincare brands for
acquisition, including, among others, (i) location, for which we will primarily consider
acquiring or investing in brand owners based in China (including Hong Kong and Macau) and
elsewhere in the Asia Pacific region; (ii) sound operating history and market reputation; (iii)
diverse and high-quality products; and (iv) history of successfully launching skincare products
in the past with annual retail sales of more than US$10 million for the most recent financial
year. As of the Latest Practicable Date, we have not identified any suitable acquisition or
investment target.
BUSINESS
– 181 –


--- page 192 ---
We believe the financial performance of Santa Monica-branded products and consumers’
surveys demonstrated that our Santa Monica brand has the potential to become a growth engine
of our Group. In addition to the growth of revenue, we believe the investment in self-owned
brands, including our existing self-owned brand and future self-owned brands, will provide us
with both short-term and long-term benefits. In the short term, we are able to leverage the
market insights we gained from managing global brands in China (including Hong Kong and
Macau), strong relationships we developed with our business partners and extensive sales and
distribution networks we maintained to initiate and develop self-owned brands. By developing
self-owned brands, we can enhance our corporate image and market reputation. In the long
term, we expect that robust self-owned brands will further diversify our revenue stream and
existing brand portfolio currently consisting of mainly external brands, thereby mitigating the
risks arising from the challenges posed by our brand licensors and external brands, including
any negative publicity that may be associated with external brands, material changes of
applicable laws and regulations in the countries where they operate and the unexpected changes
or termination of business relationships. We believe self-owned brand is a gateway of
transforming our Company from purely distributing and marketing branded products to
becoming a more comprehensive player in the markets covering upstream (development of
branded products), mid-stream (market deployment) and downstream (distribution of
products). As advised by Frost & Sullivan, it is a relatively common strategic approach for
companies in all industries to develop their self-owned brands as they will be able to leverage
their initial capital accumulation, established sales channels, and understanding of the market
demand in the development of their self-owned brands, with an aim to further enhance their
brand influence and increase their profit margins. In the near future, we plan to remain
primarily focus on product distribution and market deployment for external brands, while
leveraging the benefits brought by the self-owned brands to continuously diversify our brand
and product portfolio. We may consider to achieve a well-balanced portfolio of external brands
and self-owned brands in the long run if our self-owned brands are proved to be successful.
We plan to invest HK$142.6 million, or 15.0% of the net proceeds of the Global Offering,
in the development of our self-owned brands and the acquisition of or investment in external
brands. For further details, please see “Future Plans and Use of Proceeds” in this prospectus.
Extend our consumer reach through continued investment in our direct sales channels
We are dedicated to expanding our direct sales channels through (i) launching and
expanding our Perfume Box stores in the first tier, new first tier and second tier cities in
mainland China; (ii) launching additional self-operated stores/counters for the brands in our
brand portfolio; and (iii) acquiring seasoned local retailers for perfumes and color cosmetics
in the second tier and lower tier cities in mainland China.
BUSINESS
– 182 –


--- page 193 ---
Perfume Box
We envision to build Perfume Box into a signature self-operated online and offline
retailer store chain that can (i) attract artistic youths (ϋ), who are young consumers that
tend to express their personalities and aesthetic tastes in the products they use; and (ii) educate
novice perfume users, thereby cultivating them into loyal and frequent consumers of the
products we sell. To achieve this objective, we plan to:
 Introduce perfumes and other fragrance-related products that can address the
demands of the target consumers of Perfume Box : In light of mainland China’s
relatively low per capita expenditure on perfumes compared to countries such as the
United States, the United Kingdom, Japan and South Korea, we believe there is
tremendous potential for us to continue to gain market share and expand our
presence in mainland China. Accordingly, we will cooperate with certain brand
licensors to supply perfumes with different scent profiles and in varying pricing tiers
to be sold in our Perfume Box stores. Based on the location of the offline Perfume
Box store and the preferences and spending powers of the local target consumers, we
have the flexibility to offer a large and diverse selection of perfumes and
fragrance-related products at different price levels from the brands in our brand
portfolio, all in a single, integrated shopping space.
 Expedite the expansion of offline Perfume Box coverage : We plan to open a total of
approximately 100 offline Perfume Box stores in mainland China in the next four
years. It is our intention to primarily consider top-tier shopping malls and/or
department stores at suitable locations for our offline Perfume Box stores with
substantial consumer traffic. As of March 31, 2025, we operated five offline
Perfume Box Stores, which were located in Shanghai, Kunming, Shenzhen and
Foshan. We were in the process of opening several additional new offline Perfume
Box stores as of the same date. For details of the store opening process and an
analysis of the breakeven period and investment payback period of our new offline
Perfume Box stores, please see the paragraph headed “— Sales and Distribution of
Products — Direct Sales Channels — Expansion Plans” in this section.
 Continue to boost the sales and influence of our online Perfume Box stores :T o
extend the presence of Perfume Box stores online, we relied on our past experience
of operating and managing our self-operated online stores on various e-commerce
and social media platforms. As of March 31, 2025, we operated four online Perfume
Box stores on Tmall.com, WeChat Mall and RED Mall. We aim to further increase
the revenue generated from the sales of our online Perfume Box stores and enhance
their influence through various dedicated marketing initiatives and cooperation with
the respective online platforms. For instance, we plan to conduct more marketing
and promotion activities on RED to further improve the recognition of Perfume Box.
BUSINESS
– 183 –


--- page 194 ---
We may also launch more promotional activities for online Perfume Box stores,
including offering themed perfumes during shopping festivals and sending over-
the-counter invitations to Perfume Box members for olfactory trials at our offline
Perfume Box stores.
We believe Perfume Box has the potential to (i) satisfy the complex and divergent
demands in the olfactory economy in mainland China where consumers are increasingly
pursuing uniqueness, personality and aesthetics value in wearing perfumes; and (ii) grow into
a chained perfumes specialty retailer covering a large number of major cities in mainland
China.
In particular, we believe that offline Perfume Box stores will have additional benefits,
including, among others, (i) more stable sales revenue as compared to that of other offline
stores or counters with only one or limited number of branded products, because the likelihood
of consumers to make purchases at Perfume Box stores is expected to be relatively higher due
to the diversified brands and products offered therein; (ii) faster launch of new branded
products for the brand licensors, because we can roll out new products at existing Perfume Box
stores without spending the time or material capital expenditure that are required for new store
opening; and (iii) more exposure for the relatively less influential brands for which there are
limited number of offline stores and counters, because we can more easily launch their branded
products at our existing Perfume Box stores that have already been established and operating.
Going forward, we plan to open more Perfume Box stores, for which we have more flexibility
in choosing store locations and operation approaches (including selection of brands and
products to be sold) as compared to the self-operated offline stores and counters, which were
in large part dictated by our brand licensors. We believe such flexibility will enable us to
capture more opportunities from our direct sales channels to grow our revenue and profitability.
Other Self-operated Stores/Counters
We plan to expedite the expansion of our other self-operated stores and counters through
continuously launching offline stores/counters and online stores for the existing brands in our
brand portfolio and new brands we plan to cooperate with. Specifically, we will focus on
expanding our offline sales and distribution network by opening new self-operated offline
stores/counters for the existing brands in our brand portfolio as well as the new brands we plan
to cooperate in the first tier, new first tier and second tier cities in China (including Hong Kong
and Macau) in the next several years. For details of the store opening process and an analysis
of the breakeven period and investment payback period of our new self-operated offline
stores/counters, please see the section headed “Business — Sales and Distribution of Products
— Direct Sales Channels — Expansion Plans” in this prospectus. In addition, we plan to open
additional self-operated online stores on numerous online platforms. In particular, we plan to
open new online stores on Douyin in the next two years. We believe launching online stores
on Douyin will enable us to utilize this platform for its combination of both a lively social
media platform and a thriving e-commerce space.
BUSINESS
– 184 –


--- page 195 ---
We plan to invest HK$522.8 million, or 55.0% of the net proceeds of the Global Offering,
in the expansion and development of our Perfume Box stores and other self-operated
stores/counters. For further details, please see “Future Plans and Use of Proceeds” in this
prospectus.
Acquisition of or Investment in the Local Retailers
Besides developing our direct sales channels through Perfume Box stores and other
self-operated stores/counters, we may also seek opportunities to acquire or invest in certain
sizable local retailer network in the second tier and lower tier cities in mainland China,
particularly in Jiangsu Province, Zhejiang Province and Guangdong Province, among others.
When conducting our analysis regarding potential acquisition targets, we will primarily
consider the following criteria: (i) solid market reputation and reliability; (ii) sound financial
performance; and (iii) possession of a large and expanding consumer base. We believe such
investment and/or acquisition will complement our expansion strategy and position our
Company strategically to penetrate the local markets and reach new consumers quickly.
According to Frost & Sullivan, there are more than 10,000 enterprises that satisfy the
above-mentioned selection criteria. In line with our expansion strategy, our Directors are of the
view that these enterprises comprise a list of potential acquisition targets we would consider
pursuing in the future. However, as of the Latest Practicable Date, we have not identified any
specific acquisition targets. We intend to apply the above-mentioned criteria to identify
potential suitable local retailer acquisition targets and plan to carry out one or more
acquisitions in the next three to five years. The completion timetable depends on the duration
of the vetting/approval process.
Accelerate digital transformation to streamline our business operations and strengthen
the support for our full-cycle consumer management program
In order to streamline our business operations, improve our operating efficiency and
strengthen our technological capability, we intend to digitalize our business operation systems.
Specifically, we plan to:
 Upgrade our digitalized CRM system to support our full-cycle consumer
membership management program : It is our intention to upgrade our existing CRM
system because it currently contains the relevant data of a limited number of our
consumers and members. We aim to expand and digitize this system to cover the
relevant data of our consumers and members for all of the brands and products in
our portfolio. We also plan to standardize the categories of our consumers and
members based on their purchase history, spending powers and product preferences
across all of our business units. We believe this upgraded CRM system will enable
us to more accurately analyze and identify cross-selling opportunities for our
consumers and members with respect to the different brands and products in our
portfolio. This fully digitalized CRM system can also help us obtain more holistic
consumer data that, we believe, can support the market analysis and research we will
conduct.
BUSINESS
– 185 –


--- page 196 ---
 Upgrade our mid-office systems to improve the efficiency and effectiveness of our
business operations : We plan to upgrade our existing mid-office systems, through,
among others, (i) further upgrade our SAP systems to synchronize the data and
information among various departments within our Group that handle our supply
chain and inventories, and integration the operation of our business department and
finance department; (ii) establish a digital system to collect pertinent data and
information in the online platforms on a real-time basis, thereby making our
advertising and promotional activities more targeted and effective, which we believe
will improve our return on investment in these activities; and (iii) expedite the
process of data capitalization to transform the data we currently possess to valuable
data assets, which we anticipate will primarily include our extensive market data.
We will set the relevant data asset standards, and design appropriate data asset
evaluation systems and related processes and technical requirements. We aim to
effectively manage and utilize these data assets, and enhance the economic and
social value of such data assets, while adhering to the applicable data security laws
and regulations.
 Upgrade our finance and operation systems to improve the coordination efficiency
among our various departments : We plan to further upgrade our finance and
operation systems, through, among others, (i) clarifying and standardizing our
existing financial reporting systems to improve our finance data management
efficiency; (ii) improving our office automation (“OA”) system by optimizing the
OA process to satisfy the demands and requirements of our business operation; and
(iii) improving the productivity of our employees by introducing multiple work
automation measures into our operations, including connecting our order
management systems and SAP systems, and introducing robotic process automation
into our operations.
We plan to invest HK$95.0 million, or 10.0% of the net proceeds of the Global Offering,
to accelerate our digital transformation. For further details, please see “Future Plans and Use
of Proceeds” in this prospectus.
Enhance the recognition and industry-leading reputation of our Group
We strive to continuously enhance our recognition by industry players and consumers,
and solidify our leading position in the perfumes market in China (including Hong Kong and
Macau). We believe such recognition and reputation are crucial to maintaining our stable and
mutually beneficial business relationship with the brand licensors and to our long-term success.
Specifically, we intend to undertake the following measures:
 Industry events : We will continue to organize of and participate in industry-wide
perfume conferences and other events, where industry players, such as the
distributors we work with and our trading partners, are expected to be in attendance.
BUSINESS
– 186 –


--- page 197 ---
For instance, we plan to organize industry-wide perfumes salons where key market
players can share the latest knowledge and experiences in the perfumes industry, and
discuss the prevailing market trends.
 Industry research and publications : We intend to continue to work with our business
partners to conduct the relevant market research and publish the influential China
Perfume Industry Research White Paper () in 2025
and beyond. In addition, we may publish market research papers for other product
categories in the future, particularly for skincare products.
 Promotion campaigns : We will launch marketing campaigns to further promote
consumer awareness on both the brands in our brand portfolio and our Group. For
instance, we may cooperate with industry associations and KOLs to promote the
brands and products in our portfolio on social media platforms such as RED. We also
plan to continue to participate in perfume exhibits where we can directly interact
with perfume lovers to boost our image and cultivate consumers. In addition, we
may organize advertising and promotional initiatives, such as placing perfume
vending machines on the campuses of colleges and universities in China (including
Hong Kong and Macau), which we believe can be appealing to college students and
young consumers.
We plan to invest HK$95.0 million, or 10.0% of the net proceeds of the Global Offering,
to enhance the recognition and reputation of our Group. For further details, please see “Future
Plans and Use of Proceeds” in this prospectus.
OUR BUSINESS MODEL
We conduct product distribution and market deployment for global brands covering the
entire business process, including strategic selection of brand and product, formulation of
market development and expansion plans, product procurement, inventory management,
logistics, warehousing, marketing, sales and distribution, and consumer relationship
management. Accordingly, we occupy an important segment in the global industrial value chain
for perfumes, skincare products, color cosmetics, personal care products, eyewear, home
fragrances, for which we continuously expand consumer base through our omni-channel sales
and distribution network. Our business primarily comprises two key components that enable
global brands to gain a foothold and continue to expand their presence and penetration in China
(including Hong Kong and Macau), namely, (i) market deployment, in which we design and
implement customized market entry and expansion plans for brands; and (ii) distribution of
their branded products in China (including Hong Kong and Macau), in which we distribute the
products to a wide range of consumers through our omni-channel sales and distribution
network.
BUSINESS
– 187 –


--- page 198 ---
The following diagram illustrates the business model of our business during the Track
Record Period:
Supply
Chain
Management
Omni-channel
Sales and
Distribution
Consumer
Relationship
Management
Market and
Consumer
Analysis
Business
Development
and Expansion
Plans
Brand Building and Enhancement
Product Distribution
Strategic Selection of Brands and
Products
Market Deployment(1)
Note:
(1) We do not generate any revenue from the services associated with market deployment, including market and
consumer analysis and business development and expansion plans. They are complementary to our business
relationships with the brand licensors, and primarily serve the purpose of strengthening our relationship with
brand licensors and enhancing their brand value. The expenses we incurred in connection with the
complementary services associated with market deployment were primarily recorded as our selling and
distribution expenses in our consolidated financial statements during the Track Record Period. We currently
do not plan to charge any fees for market deployment services in the future. As advised by the Frost & Sullivan,
the complementary provision of market deployment services is generally in line with the industry norm.
Strategic Selection of Brands and Products
We strategically select brands and their products to promote and sell. Our management
team investigates the relevant industries to discover reputable international brands with high
potential that are in alignment with our growth and development strategies. Once we have
selected a brand and certain of its products, we will initiate cooperation with the brand
licensors who are entitled to grant us the exclusive licenses for the relevant brands and
products. Since we have established a leading position and maintained a solid reputation in the
perfume market in China (including Hong Kong and Macau) through years of continuous
operation. We primarily act as the exclusive distributor of our brand licensors in mainland
China, Hong Kong and/or Macau, in which we obtain (i) exclusive license from the brand
owners to operate their brands for specified products; or (ii) exclusive sub-license from the
primary licensees of the brand owners to operate the brands involving certain specified
products that they are licensed to produce and distribute. Our license from the brand owners
or sub-license from the primary licensees generally specify the territories, products and/or
sales channels in which our exclusive distribution may occur. In addition to directly obtaining
licenses from the brand licensors, we have been exploring other cooperation modes with them
for managing the brands. For instance, in 2023, we established a joint venture with, and became
the exclusive licensee of, Dr. Babor, for its retail business in mainland China in terms of
BUSINESS
– 188 –


--- page 199 ---
designated products and channels. For details of our business relationship with brand licensors,
please refer to the paragraph headed “— Suppliers — Brand Licensors” in this section. We
maintain high standards on brand reputation and product quality. Before we cooperate with a
new brand, our senior management team, which is led by our founder and chairman of the
Board, Mr. Lau, examines the relevant products in its portfolio. In addition to on-site
information we collect in-person, our senior management team may refer to, among others,
brand recognition among industry players, industrial research reports issued by third-party
professionals, views and opinions from well-regarded industry players and historical brand
publicity, to form a holistic view of the target brands and relevant products.
Brand Building and Enhancement
We believe our ability to build and enhance the image of the global brands in China
(including Hong Kong and Macau) is one of the key reasons that the brand licensors appoint
us as their licensee. Through our brand building and enhancement initiatives, we aim to educate
the consumers to (i) cultivate their awareness and purchase desire for the products of new
brands entering into China (including Hong Kong and Macau); and (ii) expand the market share
of the brands and products which have already gained a foothold in China (including Hong
Kong and Macau). Our brand building and enhancement efforts permeate our one-stop services
for the brands we cooperate with, which primarily include market deployment and product
distribution.
Market Deployment
Our market deployment efforts primarily consist of (i) market and consumer analyses,
through which we collect market information about the target brands and their competitors to
form a view about the potential of the target brands as early as our brand and product selection
process, and then constantly collect and integrate sales data, consumer preferences data, trends
of product development and CRM data through our e-Hub and the data supplied by third-party
professionals to update our market deployment plans; (ii) formulation of business development
and expansion plans, which primarily consist of marketing plans setting out, among others,
how to build brand image and enhance brand exposure, how to appeal to target consumers and
whether beauty advisors or other specialists should be involved and distribution plans setting
out, among others, the types of distribution channels for the products and the relevant budget
allocation; and (iii) implementation of business development and expansion plans, which is
primarily executed by our in-house teams.
We generally do not charge brand licensors for any expenses we incur in connection with
our market deployment efforts. However, in the event that the brand licensors decide to conduct
additional business development activities that are beyond the initial scope of the business
development and expansion plans agreed to be undertaken by us, or the expenses incurred by
the activities exceed the agreed amount under the business development and expansion plans,
we will negotiate with the brand licensors on the payment of such additional expenses. The
BUSINESS
– 189 –


--- page 200 ---
specific payment procedures will be subject to the negotiation with the brand licensors and
their common practices. As of the Latest Practicable Date, the majority of such additional
expenses incurred by us during the Track Record Period had been recovered from the brand
licensors.
We implement marketing and distribution plans through our integrated online and offline
operations, which leverages our existing omni-channel resources to continuously transform our
marketing efforts into sales and distribution opportunities. Under our integrated online and
offline operations, potential consumers are often prompted by the content shared by celebrities,
KOLs and other users on the social media platforms, such as Douyin, Wechat and RED, to
experience the products we sell at offline POSs. These offline olfactory experiences and
exposure to our products at the offline POSs may facilitate and stimulate consumers to make
purchases at offline POSs or online stores operated by us, our distributors or our retailers. If
the consumers who made purchases share their product reviews online, they may prompt other
potential consumers to experience and purchase the products as well. The diagram below sets
forth the details of our online and offline operation:
Online and Offline Operation
REDDouyin
Dianping.com Meituan Tmall.com
Members
Attraction Recommendation Consumer
Transformation
Consumer
LoyaltyInteraction
Online
Beauty
Advisors
Offline
Beauty
Advisors
Consumer
Review
Online
Purchase
Stimulation
Offline
Sales
WeChat
Online Brand
and Production
Recommendation
Offline Olfactory
Experiences
Online
Posts by
Consumers
and KOLs
For further details of our marketing plans and activities, please see the paragraph headed
“— Marketing and Promotion” in this section. In addition, for details of our distribution
process, please refer to the paragraphs headed “— Our Business Model — Brand Building and
Enhancement — Product Distribution” and “— Sales and Distribution of Products” in this
section.
BUSINESS
– 190 –


--- page 201 ---
Product Distribution
Under our cooperation with the brand licensors, we procure branded products from brand
licensors and distribute such products to retailers, distributors and consumers through various
channels, which primarily cover:
 Supply chain management : We procure products from the brand licensors according
to our product procurement plans, which are formulated based on, among others, the
sales forecast calculated using the information from each point of sales, historical
sales amount, unsettled purchase orders and our existing inventory level. During our
procurement process, we leverage our extensive experience and expertise in the
international trade to ensure that the products we source are in compliance with
applicable importation and customs requirements in China (including Hong Kong
and Macau), including, among others, Measures for the Inspection, Supervision and
Administration of Imported and Exported Cosmetics (္ຖ
), Regulations of the PRC on Import and Export Duties ( ʕശɛ͏΍
ձ਷ආ̈ɹᗫ೼ૢԷ), Customs Law of the PRC (),
Measures for the Administration of Cosmetics Registration and Filing (ൗ
) and Regulations on the Supervision and Administration of
Cosmetics (္ຖ၍ଣૢԷ). We have designated in-house teams to apply
for product registration, and arrange labelling and repacking according to the
applicable laws and regulations in China (including Hong Kong and Macau). We
maintain a digital SAP system to track our inventory status. It enables us to monitor
the inventory levels and generates inventory reports on a real-time basis, which in
turn helps us achieve optimal inventory levels and improve our working capital
efficiency. The inventories are primarily stored at the warehouses leased from
Independent Third Parties on a temporary basis until further logistics arrangements.
In addition to leased warehouses, as of March 31, 2025, we engaged three
warehousing and logistics service providers that are Independent Third Parties,
which provided warehousing and delivery services to us with respect to the products
stored in their warehouses in mainland China. We primarily engage Independent
Third-party logistics service providers to transport and deliver the products to our
customers. For details of our supply chain management, please refer to the
paragraphs headed “— Inventory Management” and “— Procurement, Warehouse
and Logistics” in this section.
 Omni-channel sales and distribution : We maintain an extensive omni-channel sales
and distribution network. Our sales channels offer a large number of access points
to consumers for perfumes, skincare products, color cosmetics, personal care
products, eyewear and home fragrances in China (including Hong Kong and Macau),
including (i) direct sales channels, in which we sell products directly to consumers
through our self-operated online and offline stores or counters; (ii) retailer channels,
in which we sell products to online and offline retailers; and (iii) distribution
channels, in which we sell products to online and offline distributors. For further
details of our sales and distribution arrangements, please refer to the paragraph
BUSINESS
– 191 –


--- page 202 ---
headed “— Sales and Distribution of Products” in this section. We also operated five
offline Perfume Box stores, which were located in Shanghai, Kunming, Shenzhen
and Foshan, as well as four online Perfume Box stores on Tmall.com, WeChat Mall
and RED Mall, as of March 31, 2025. Perfume Box is our retailer brand that covers
both offline and online sales channels. Under this retailer brand, we strive to create
one-stop online and offline shopping spaces with multiple and diversified perfumes
that consumers can experience and purchase. We plan to build this retailer brand into
a signature brand of self-operated online and offline stores that can attract both
artistic youths and novice perfume users. For further details of the Perfume Box,
please refer to the sections headed “— Our Business Strategies — Extend our
consumer reach through continued investment in our direct sales channels” and “—
Sales and Distribution of Products — Direct Sales Channels — Perfume Box” in this
section.
 Consumer relationship management : We closely manage our relations with
consumers in order to continuously boost the image of the brands we manage and
foster consumer loyalty. We have built a full-cycle consumer management program
that covers the entire life cycle of consumers, including (i) potential consumers and
enthusiastic potential consumers, towards whom we aim to activate first purchases
through, among others, introducing membership benefits, offering welcome gifts or
sampling trials, organizing co-branded events to drive consumer traffic, encouraging
interactions with beauty advisors and providing first-order rewards; (ii) normal
consumers and active/loyal consumers, towards whom we aim to motivate repeat
purchases through, among others, birthday gifts and coupons, retention invitations,
private greetings from beauty advisors, monthly brand activities, new product
launch campaigns and festival call backs; and (iii) dormant/losing consumers,
towards whom we aim to reactivate the purchases or re-engage with losing
consumers through, among others, brand activities invitations, new product launch
campaigns and special trial offers for new products. The activities that help activate,
maintain, reactivate and win back the purchases of our consumers are supported by
our diverse brand and product portfolios that accommodate their individualized
needs and preferences. As of March 31, 2025, our consumer management program
had more than 2.0 million consumer members. We plan to digitalize this consumer
management program to make it more efficient and useful for our business
expansion. For details of such digital transformation, please refer to the paragraph
headed “— Our Business Strategies — Accelerate digital transformation to
streamline our business operations and strengthen the support for our full-cycle
consumer management program” in this section.
BUSINESS
– 192 –


--- page 203 ---
BRANDS AND PRODUCTS
We primarily conduct product distribution and market deployment for global brands of
perfumes, skincare products, color cosmetics, personal care products, eyewear and home
fragrances. The products we sell are primarily procured from the brand licensors that are
mainly based in Europe, Japan and the United States. As of the Latest Practicable Date, our
external brand portfolio consisted of 72 brands. In our extensive brand portfolio, we conduct
product distribution and market deployment for 52 brands that offer perfumes, 16 brands that
offer skincare products, six brands that offer color cosmetics, 10 brands that offer personal care
products, eight brands that offer eyewear, and 22 brands that offer home fragrances as of the
same date. Certain of the brands in our brand portfolio offer more than one category of
products during the Track Record Period. In addition, we cooperate with business partners to
develop our self-owned brand, Santa Monica, which offers both perfumes and eyewear. We
engage external manufacturers to produce the Santa Monica-branded products on an OEM
basis.
The following table sets forth the movements of external brands in our brand portfolio for
the periods indicated:
As of/For the Y ear Ended March 31,
2023 2024 2025
Number at the beginning of the period /H1118 47 52 65
Increase (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 61 2
Decrease (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3) (3) (4)
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852 65 73
Notes:
(1) The increase of brands mainly represented the number of external brands for which we newly entered
into agreements or granted other forms of authorizations.
(2) The decrease of brands mainly represented the number of external brands for which the relevant
agreements or other forms of authorizations were terminated.
The increase of the number of our external brands during the year ended March 31, 2023
was relatively lower, primarily because we slowed down our proactive negotiation with brand
licensors for obtaining primary licenses or sublicenses for new brands as a result of the impact
of pandemic-related control measures in mainland China, which were relatively more stringent
in 2022. The decreases of the number of our external brands during the Track Record Period
primarily resulted from the expiry of the relevant agreements with the brand licensors or other
forms of authorizations granted by them to us.
BUSINESS
– 193 –


--- page 204 ---
The table below sets forth a breakdown of our revenue by product category for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Perfumes (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,504,184 88.5 1,523,737 81.7 1,687,703 80.9
Skincare products /H1118/H1118/H1118/H111887,136 5.1 114,355 6.1 151,856 7.3
Color cosmetics /H1118/H1118/H1118/H1118/H1118/H111867,932 4.0 193,008 10.4 226,209 10.9
Eyewear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,679 0.5 21,458 1.2 11,982 0.6
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 1.9 11,203 0.6 5,613 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 100.0 1,863,761 100.0 2,083,363 100.0
Notes:
(1) The revenue generated from our sales of personal care products and home fragrances was recorded under
“perfumes” during the Track Record Period, because some of the perfume brands in our brand portfolio also
offered personal care products and home fragrances, and the amount of revenue generated from our sales of
these products was insignificant during the Track Record Period. For each of the years ended March 31, 2023,
2024 and 2025, the aggregate revenue generated from our sales of personal care products and home fragrances
accounted for no more than 2.0% of our total revenue.
(2) During the Track Record Period, we operated and managed the daily operation of the online and offline stores
of certain of our customers under their brand names, and charged a service fee in connection therewith. Others
mainly include the service income derived from the charges arising from such agency services.
Product Portfolio of External Brands
Perfumes
We are one of the leaders in perfume industry in China (including Hong Kong and
Macau). Over the years, we continuously supported the growth and expanded the footprint of
numerous global perfume brands in China (including Hong Kong and Macau). We conduct
product distribution and market deployment for a diverse portfolio of perfume products from
a number of well-known global brands. The perfumes in our portfolio cover a wide variety of
price levels, including entry-prestige perfumes, prestige perfumes and luxury perfumes.
Depending on the nature of the manufacturers, the perfumes we sell can also be categorized
into (i) designer perfumes (˥), which are generally produced by top fashion designers
and usually have branded scents; and (ii) niche perfumes (˥), which are mainly
produced by independent perfume houses. As of the Latest Practicable Date, we offered
perfumes sourced from 52 external brands.
BUSINESS
– 194 –


--- page 205 ---
The following table sets forth our portfolio of major brands of perfumes in alphabetical
order:
Key Brand(s) Major Products
White Moss (߸)
24 Old Bond Street
(24໮ϼԞᅃ൑)
Rose in Wonderland
(ုྫྷྤ)
Mint & Tonic
(ʘ˥)
Pour Femme
(˥)
Pour Homme
(˥)
Jasmin Moghol
(஁)
Love Chopard
(ฌίጽԞ)
Coach the Fragrance
(ɾɻ)
New Y ork for Men
(Ӳɻ)
BUSINESS
– 195 –


--- page 206 ---
Key Brand(s) Major Products
Favolosa
(ݞ)
Irresistibile
(ᓆഓႏᚆ)
Lesedi La Rona I
(ΈI)
Lesedi La Rona III
(ΈIII)
Floral (ڠ݆ڀI Want Choo ( ᘴҢ)
Encre Noire ( ኈᛸ) Soleil ( ӕ˚ોΈ)
Eclat d’Arpège
(Έᗲ)
Marry Me ( Ңᗴจ)
BUSINESS
– 196 –


--- page 207 ---
Key Brand(s) Major Products
MCM (࠰
˥)
Le Solstice
(௛ϻჽ҈)
La Cordee
(ʘ঩)
Explorer (٫ࣚSignature ( ॱͣΙা) Legend ( ෂփ)
T o y2( ဤɚ˾) Toy 2 Bubble Gum
(ဤ)
Signorina ( ͺɛɾɻ) Tuscan Creations
Convivio ( ϖ౶̔
࢖)
BUSINESS
– 197 –


--- page 208 ---
Key Brand(s) Major Products
Rosa Novella
(ု)
Melograno Pot
(ͩ࿹ௗᜦ)
Baby
(കᘒԎ)
TOUS Pink Friends
(ᘒԎ)
Moonlight Patchouli
(࠰)
California Reverie
(ྫྷ)
Santal Blanc ( ˜Έͣ
࠰)
Pour Homme
(ΝΤӲɻ)
Bright Crystal
(४ᘴ౺᝝)
Dylan Purple
(ໝ˚ྫྷϜ)
Acqua Colonia Blood
Orange & Basil
(ዐᖯਔ)
Acqua Colonia Peach
& Coriander
(ᨱ
)
Acqua Colonia Peony
& Sandalwood
(࠰)
BUSINESS
– 198 –


--- page 209 ---
Skincare Products
In 1987, we started to conduct product distribution and market deployment for skincare
brand in mainland China. We have been managing a high-end Japanese skincare brand, Albion,
in Hong Kong since 2014. In 2023, we established a joint venture with, and became the
exclusive licensee of, Dr. Babor, for its retail business in mainland China. Dr. Babor is a
high-end skincare brand headquartered in Germany whose products are normally distributed
only through beauty salons before we became its exclusive local operator for designated
products and channels in mainland China. We believe the establishment of joint venture with
Dr. Babor will gain us valuable insights of skincare industry through the daily management of
the joint venture, and form a more strategic and sustainable business relationship with Dr.
Babor as we share the profit and loss of this joint venture with Dr. Babor.
The following table sets forth our portfolio of major brands of skincare products in
alphabetical order:
Key Brand(s) Major Products
HSR Lifting Anti-
Wrinkle Eye
Cream (HSR ౤ʺ
Ҥᆴ଻ᒲ)
Hydra Plus Ampoules
(Hydra Plusሯ
აᆦᆗτଧ)
Lifting Cellular
Collagen Boost
Infusion (ᕙ
ɢၚശ૰)
Skin Conditioner
Essential N
(਄ੰʷѱ˥ N)
Infinesse Derma
Pump Milk S
(ᅁɢၡᇘသீ
Ԫ S)
Face SPF 30 PA+++
(ᚐᕙԣ᛼ԪSPF30)
Face Fluid
Brightening & Anti
Pollution SPF 50+
PA++++ (ࣖ
ᇮԣ᛼Ԫ
SPF50+)
Face SPF 50+
PA++++ ( ᚐᕙԣ᛼
ԪSPF50+)
BUSINESS
– 199 –


--- page 210 ---
As of the Latest Practicable Date, we primarily offered cleansers, moisturizers, essence,
cream, face masks, lotion and eye cream sourced from 16 external brands.
Color Cosmetics
We conduct product distribution and market deployment for selected color cosmetics
brands with promising growth potential. As of the Latest Practicable Date, we were the
distributor for designated color cosmetics products and channels from Laura Mercier in China
(including Hong Kong and Macau) and Elegance in Hong Kong and Macau.
The following table sets forth our portfolio of major brands of color cosmetics in
alphabetical order:
Key Brand(s) Major Products
La Poudre Haute
Nuance Luxueuse
(ѱ႓४ჳ)
Translucent Loose
Setting Powder ( ๰
ᕙ૶Ⴐ႓४)
Translucent Loose
Setting Powder
Rose ( ๰ᕙ૶Ⴐ႓
४)
Blush Color Infusion
Chai (ɢ๰੹໓
ԏ঩)
As of the Latest Practicable Date, we primarily offered foundation, lip sticks, blushes and
eye shadow sourced from six external brands.
Personal Care Products
A number of brands in our brand portfolio that offer perfumes also offer personal care
products. To expand our sales in personal care products, in January 2024, we started to conduct
product distribution and market deployment for Acca Kappa, a world-class Italian personal
care brand featuring traditional Italian hand-made techniques, in mainland China.
BUSINESS
– 200 –


--- page 211 ---
The following table sets forth our portfolio of major brands of personal care products in
alphabetical order:
Key Brand(s) Major Products
White Moss Shower Gel
(ӕकᚣ)
Looped Nylon Beechwood Oval
Brush (ܲݓ
ᅙቻՏ)
Rosa Novella Bodyline (ုӕकӻΐ)
As of the Latest Practicable Date, we primarily offered body and hair products,
toothpaste, combs and toothbrushes sourced from 10 external brands.
Eyewear
We started to conduct product distribution and market deployment for eyewear brands in
1987. The following table sets forth our portfolio of major brand in eyewear:
Key Brand(s) Major Products
Paper-Thin
Series
Titanium Series R 1000
Series
Conquer the Sun
As of the Latest Practicable Date, we primarily offered spectacles and sunglasses sourced
from eight external brands.
BUSINESS
– 201 –


--- page 212 ---
Home Fragrances
Drawing upon our success and experience in managing perfume brands, we successfully
expanded into home fragrances market. In 2023, we also introduced a world-renowned home
fragrances brand, Dr. Vranjes Firenze, into mainland China by opening its first Chinese
flagship store in Shanghai, which was our self-operated offline store. We are the exclusive
distributor of this brand’s designated products for all sales channels in China (including Hong
Kong and Macau).
The following table sets forth our portfolio of major brands of home fragrances in
alphabetical order:
Key Brand(s) Major Products
Soho Garden Candle
(෤ᚋᐈ)
A Walk in the
Cotswolds Candle
(࠰
ᚋᐈ)
Blueberry Muffin
Candle (࠰ځ
ᚋᐈ)
Rosso Nobile V ase
Glass Bottle
Collection Fragrance
(ৢ൮ૄೌ˦ᖸૢ
ᔠ)
Oud Nobile V ase Glass
Bottle Collection
Fragrance ( ढ˝൮ૄ
ᔠ)
Rosso Nobile Candle
(ᔠᚋᐈ
၀ᖗЍ)
As of the Latest Practicable Date, we primarily offered scented candles, diffuser and
home fragrance pendant sourced from 22 brands.
BUSINESS
– 202 –


--- page 213 ---
Product Portfolio of Our Self-owned Brand
In addition to the external brands in our portfolio, we have one self-owned brand, Santa
Monica in our brand portfolio. During the Track Record Period and up to the Latest Practicable
Date, we provided perfumes and eyewear under our Santa Monica brand. For the years ended
March 31, 2023, 2024 and 2025, revenue generated from products of Santa Monica amounted
to approximately RMB5.3 million, RMB17.0 million and RMB10.5 million, respectively,
which accounted for 0.3%, 0.9% and 0.5% of our revenue, respectively, for the same periods.
In 1999, we began to offer eyewear under the Santa Monica brand. As of the Latest
Practicable Date, we offered three categories of eyewear under the Santa Monica brand — S
series, M series and K series — to meet varied demands of consumers of different ages and
genders. Our S series eyewear has a premium market positioning with a traditional design. Our
M series eyewear are minimalistic and innovative in design, with mid-level prices. Our K series
eyewear are designed for children and teenagers and thus, are typically colorful and durable.
Under our Santa Monica eyewear, we aim to provide cost-effective products that integrate
technological innovation and aesthetic design, contributing to a stylish and relaxed lifestyle of
our consumers.
In 2022, we launched five perfumes under our Santa Monica brand, which were generally
considered to be entry prestige perfumes. We also offer miniature perfume packages to reach
young consumers. In 2025, we launched two new perfumes under our Santa Monica brand with
upgraded design and features.
The following table sets forth our portfolio of major products of Santa Monica eyewear
and perfumes:
Product Category Major Products
Eyewear /H1118/H1118/H1118/H1118/H1118
S Series
(Sӻΐ)
M Series
(Mӻΐ)
K Series
(Kӻΐ)
Sunglasses
Perfumes /H1118/H1118/H1118/H1118/H1118
Floreali
(ҏᕢจ)
Mystic Wood
(ؒ)
BUSINESS
– 203 –


--- page 214 ---
SALES AND DISTRIBUTION OF PRODUCTS
We have an extensive omni-channel sales and distribution network with high penetration
in both offline and online channels. Through our omni-channel network, we established a wide
coverage of POSs in China (including Hong Kong and Macau), which enables the brands to
connect with consumers. The diagram below sets forth the matrix of our omni-channel sales
and distribution network:
Sales and Distribution Network
Online Channels Offline Channels
Direct Sales Channels
Distribution Channels
Online Retailers
Self-operated Online
Stores
Offline Retailers
Self-operated Offline
Counters/Stores
Online Distributors Offline Distributors
Retailer Channels
As of the Latest Practicable Date, we maintained a well-balanced online and offline sales
network. We maintained and will continue to maintain such structure in the future, because we
believe our diversified offline and online channels play equally significant roles in our
business. In offline channels, consumers can gain hands-on experience with the actual
products, enjoy the décor in the shopping space that showcase the brand image and build
personal relationship with in-store beauty advisors and sales personnel. We believe these
experiences can positively influence the purchasing decisions of consumers, especially for
perfumes, which can only be experienced olfactorily in an offline setting. Online channels are
also significant as they offer multiple benefits to consumers, including convenient and fast
shopping experiences and wider selection of products in one stop. In addition, we can draw a
more holistic picture of the latest market trends and consumer preferences based on the data
we collected from both offline and online channels, allowing us to formulate more precise sales
and marketing strategies for different brands.
BUSINESS
– 204 –


--- page 215 ---
Our sales and distribution network generally consists of direct sales channels, retailer
channels and distribution channels. We sell branded products to distributors, retailers and
consumers through this sales and distribution network to optimize its coverage. Retailers
typically purchase products from us and on-sell them directly to consumers, while distributors
purchase products from us and primarily distribute them to retailers, but may directly sell
products to consumers. The diagram below sets forth the flow of our sales of branded products:
Flow of Sales
Our Group
Online
Distributors
Online Retailers
Consumers
Offline Retailers
(Key Accounts/Travel Retailers)
Offline
Distributors(1) Self-
operated
Online stores
Self-
operated
Offline
Counters/
Stores
Online Offline
The following table sets forth a breakdown of our revenue by sales channels for the
periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Direct sales channels
 Online stores /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,786 7.3 126,144 6.8 163,698 7.9
 Offline stores/counters /H1118 214,831 12.6 321,186 17.2 267,675 12.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118338,617 19.9 447,330 24.0 431,373 20.7
BUSINESS
– 205 –


--- page 216 ---
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Retailer channels
 Online retailers (1) /H1118/H1118/H1118/H1118/H1118356,427 21.0 327,627 17.6 388,242 18.6
 Offline retailers (2) /H1118/H1118/H1118/H1118404,713 23.8 517,122 27.7 624,521 30.0
– Key accounts (3) /H1118/H1118/H1118315,656 18.6 380,481 20.4 389,050 18.7
– Travel retailers /H1118/H1118/H111889,057 5.2 136,641 7.3 235,471 11.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118761,140 44.8 844,749 45.3 1,012,763 48.6
Distribution channels
 Online distributors /H1118/H1118/H1118254,832 15.0 216,322 11.6 204,261 9.8
 Offline distributors /H1118/H1118/H1118/H1118312,342 18.4 344,157 18.5 429,353 20.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118567,174 33.4 560,479 30.1 633,614 30.4
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 1.9 11,203 0.6 5,613 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 100.0 1,863,761 100.0 2,083,363 100.0
Notes:
(1) Online retailers are retailers that purchase products from us and directly sell them to consumers through online
platforms, such as e-commerce platforms and third-party companies that represent KOLs.
(2) Offline retailers include both key accounts, which are generally chained cosmetics specialty stores in mainland
China, Hong Kong and Macau where the products procured from us are directly sold to consumers, and travel
retailers, which are primarily airports, airlines, cruises and downtown duty-free shops where the products
procured from us are directly sold to consumers.
(3) The revenue generated from the sales to key accounts for the year ended March 31, 2025 included the revenue
generated from the sales to a third party retailer which operated a Perfume Box store in Ningbo. For the year
ended March 31, 2025, our revenue from sales to this third party amounted to RMB0.5 million. Other than this
Perfume Box store, all other Perfume Box stores in mainland China as of March 31, 2025, including five
offline Perfume Box stores and four online Perfume Box stores, were directly operated by us. The revenue
generated from our self-operated Perfume Box stores during the Track Record Period was recorded under
direct sales channels. For details, please refer to the paragraph headed “— Sales and Distribution of Products
— Direct Sales Channels — Perfume Box” in this section.
(4) During the Track Record Period, we operated and managed the daily operation of the online and offline stores
of certain of our customers under their brand names, and charged a service fee in connection therewith. Others
primarily include service income derived from the charges arising from such agency services.
We primarily operate our businesses and monitor our financial and operational
performance based on the types of sales and distribution channels. To this end, we divide our
key business teams into four categories based on the features of different channels, namely,
department stores/shopping malls teams, key accounts teams, travel retail teams and online
channels teams. We allocate our internal resources among these teams and monitor our overall
business performance according to these categories.
BUSINESS
– 206 –


--- page 217 ---
During the Track Record Period, we entered into consignment agreements with certain
online and offline retailers, primarily for products sold to certain retailer customers at their
request and for certain sales of eyewear. We made such consignment arrangements primarily
due to the market practice in the eyewear industry or our negotiation and business
arrangements with the respective retailer customers, as the case may be. Under such
arrangements, we, as consignor, provide the goods to the relevant retailers, as consignees, to
be sold to their customers on our behalf. We retain ownership of the goods until they are sold
by the consignees, despite the relevant retailers’ possession of the goods during the sales
process. Revenue generated from the consignment arrangements with these retailers amounted
to RMB13.7 million, RMB20.5 million and RMB40.1 million for the years ended March 31,
2023, 2024 and 2025, which accounted for approximately 0.8%, 1.1% and 1.9% of our total
revenue for same periods, respectively. For the years ended March 31, 2023, 2024 and 2025,
we entered into consignment arrangements with 15, 25 and 29 retailers, respectively.
We are exposed to the risks and impact arising from parallel imports. For details, please
refer to “Risk Factors — Risks Relating to Our Business and Industry — We operate in a highly
competitive industry. If we fail to compete effectively, our business and operating results could
be adversely affected” in this prospectus. According to the Measures of the General
Administration of Customs of the PRC for the Implementation of the Regulation of the PRC
on the Customs Protection of Intellectual Property Rights (׵<ʕശ
ᚐૢԷ>), if imported goods involve intellectual
property rights (“IPR”) recorded with the customs, but the importer or manufacturer’s use of
the IPR is not registered, the customs may require the consignee or consignor ( ϗ೯஬ɛ)t o
declare the IPR status of the goods and submit relevant documentation within a specified
timeframe. If such consignee or consignor fails to comply with such requirements or if customs
suspects that the goods may infringe on the recorded IPR, the customs will suspend the release
of the goods. Accordingly, the parallel importation without authorization from the brand
owners or other parties with IPR, such as us which obtained the licenses or sub-licenses to
distribute the relevant products in mainland China, may be deemed illegal therein. Our
exclusive licenses and sub-licenses with the brand licensors generally preclude anyone from
selling the branded products within the scope the of our licenses and sub-licenses in specified
channels and territories without our permission. Our agreements with the retailers and
distributors also generally forbid them from procuring the relevant branded products from third
parties. As such, in the event that (i) our brand licensors which granted us exclusive licenses
or sub-licenses sold the relevant products in licensed channels and territories through third
parties without our consent; or (ii) our retailers and distributors procured the relevant branded
products from third parties in any way without our consent, including through parallel imports,
we are entitled to request compensation for any loss we may incur and/or terminate the relevant
agreements and business relationship with them. In view of the applicable laws and
regulations, as well as the contractual obligations of our brand licensors, retailers and
distributors, we believe that we are not exposed to significant risks and impact associated with
parallel imports. However, to further minimize any potential risks and impact associated with
parallel imports, we will continue to take certain actions, including, among others, (i) running
the Know-Y our-Client procedures on the retailers and distributors before entering into or
renewing our cooperation with them to identify historical involvement in parallel imports; (ii)
BUSINESS
– 207 –


--- page 218 ---
reviewing our sales ledgers on a monthly basis to identify abnormal records of purchase orders;
and (iii) monitoring the products sold to consumers in different regions through, among others,
sampling by our sales teams and/or third-party service providers we engage.
Channel Selection and Individualized Distribution Plans
As part of our brand building and enhancement initiatives for the brands in our brand
portfolio, we formulate and implement business development and expansion plans for the
brands, which include distribution plans. In general, we will prepare a business development
and expansion plan for each brand licensor and submit it to the brand licensor for approval. In
such plan, we provide specific measures on, among others, enhancing brand exposure,
expanding ideal sales channels, and achieving higher sales vis-à-vis the competing brands
based on our analysis of the target markets. We may select one or more pillar products of the
brand to present to the market for the year which has the potential to serve as the growth engine
and the driving force for consumer acquisition. We may also meet with the relevant personnel
of the brand licensors periodically (usually once a year) to review the implementation of these
plans, in which we present the performance and results of our implementation of the plans to
the brand licensors, including sales revenue by different channels, the changes in the relevant
POSs and the representative counter displays of the brands and products during the year.
We sell and distribute the products according to the individualized distribution plans. In
choosing suitable sales and distribution channels, we primarily consider which channel(s) will
be in the best position to help reach the target consumers for the relevant brands and products.
Direct Sales Channels
Our direct sales channels consist of online stores we operate on e-commerce and social
media platforms and offline stores/counters we operate in shopping malls and department
stores to sell products directly to consumers.
Online Stores
We operate online stores on various e-commerce platforms and social media platforms,
including Tmall.com, Tmall.hk ( ˂፟਷ყ), JD.com, JD.hk (਷ყ), RED, Douyin and
WeChat (ڦDuring the Track Record Period, we primarily operated online stores under the
brand names of the products we sold. Before major shopping festivals in mainland China, we
identify new target consumers on Tmall.com and JD.com based on our big data analysis, which
we conducted periodically to guide the desired online traffic of consumers to the products we
promote and sell during these festivals. As of March 31, 2025, we operated online stores on 13
e-commerce platforms and social media platforms. As of March 31, 2023, 2024 and 2025, we
operated 32, 42 and 49 online stores, respectively.
BUSINESS
– 208 –


--- page 219 ---
Offline Stores/Counters
We operate offline stores/counters in shopping malls and department stores, which
primarily include (i) brand boutique stores (ֳۜwhich are standalone stores that offer
selected products of a single brand; (ii) multi-brand counters (೐ਖ਼ᓞ), which are
counters that offer selected products from multiple brands. They are usually decorated under
a unified approach of the shopping malls or department stores in which they are located; and
(iii) image counters ( Җ൥ᓞ), which are counters that offer selected products from a single
brand. They are usually decorated according to the features and positioning of the brand. From
time to time and in connection with specific promotional activities, we also launch (i) temp
stores (ֳࣛwhich are temporary stores that we usually open for less than a year; and (ii)
pop-up stores (ֳwhich are temporary stores that we usually open for less than half year.
During the Track Record Period, we typically enter into concession agreements or lease
agreements with shopping malls and departments stores for opening and operating our
self-operated offline stores and counters. The details of our concession arrangements and lease
arrangements are set forth below:
Concession agreements: During the Track Record Period, the terms of our concession
agreements with shopping malls and department stores typically are one year or more. Under
these agreements, we shall pay a monthly concession fee to the shopping malls or department
stores calculated based on, among others, the prospective revenue to be generated by the
store/counter and the site area of the store/counter. Under these agreements, we are generally
required to pay deposits to the shopping malls or department stores, which are refundable after
a specified period from the opening date of the stores or counters under the concession
agreements. We may also be required to pay a maintenance fee, utilities and other applicable
expenses generated by the operation of these stores and counters to the shopping malls and
department stores. Under certain agreements, the shopping malls and department stores are
entitled to terminate these agreements if the respective stores or counters fail to meet specified
operation targets. Payments from the sales of our products at our self-operated stores/counters
under concession arrangements are typically collected by the shopping malls and department
stores on behalf of us before transferring the portion of the monthly sales proceeds we are
entitled to receive under the relevant concession agreements (i.e., the sales revenue after
deducting the concession fee and other fees and expenses, if any) to us within 30 days after we
issue invoices for the payments.
Lease agreements: During the Track Record Period, the terms of our lease agreements
with shopping malls and department stores typically are one year or more. Under the lease
agreements, we lease the spaces for operating our stores/counters typically at a rent consisting
of (i) the base rent as specified under the relevant lease agreements; and (ii) a percentage of
the monthly revenue generated by the stores or counters. Some of the lease agreements may
provide that the rent shall be the higher of the base rent and the specified percentage of the
monthly revenue. Under these lease agreements, we may be required to pay deposits to the
shopping malls or department stores, which are refundable after a period from the opening date
of the stores or counters under the lease agreements. We may also be required to pay a
BUSINESS
– 209 –


--- page 220 ---
maintenance fee, utilities and other applicable expenses generated by the operation of these
stores and counters to the shopping malls and department stores. We typically collect the sales
proceeds ourselves at our self-operated stores/counters in the shopping malls and department
stores under the lease arrangements, and separately make the lease payments to the shopping
malls and department stores.
As of March 31, 2025, we had 54 self-operated stores and counters leased under
concession agreements, and 63 self-operated stores and counters leased under lease
agreements.
As of March 31, 2025, our self-operated offline stores/counters were located in over 20
cities in China (including Hong Kong and Macau). As of March 31, 2023, 2024 and 2025, we
operated 81, 75 and 75 offline stores/counters in mainland China, 41, 32 and 34 offline
stores/counters in Hong Kong and six, nine and eight offline stores/counters in Macau,
respectively. The offline stores and counters in Macau were operated by Eternal Far East, our
Hong Kong subsidiary, and/or its Macau branch, during the Track Record Period and up to the
Latest Practicable Date. The number of our offline stores/counters decreased during the Track
Record Period primarily because our management team closed the underperformed offline
stores/counters.
The table below sets forth movements of our self-operated offline stores/counters during
the Track Record Period:
As of/For the Y ear Ended March 31,
2023 2024 2025
Mainland China
Number at the beginning of the period /H1118 114 81 75
Increase (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 38 24
Decrease (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(49) (44) (24)
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 75 75
Hong Kong and Macau (3)
Number at the beginning of the period /H1118 40 47 41
Increase (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 29 19
Decrease (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9) (35) (18)
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847 41 42
BUSINESS
– 210 –


--- page 221 ---
Notes:
(1) The increase of self-operated offline stores/counters in mainland China mainly represented the number
of new offline stores/counters we started to operate during the year.
(2) The decrease of self-operated offline stores/counters in mainland China mainly represented the number
of offline stores/counters we ceased to operate during the year.
(3) The self-operated offline stores/counters located in Macau were operated by Eternal Far East, our Hong
Kong subsidiary, and/or its Macau branch, during the Track Record Period and up to the Latest
Practicable Date. The number of these stores and counters was six, nine and eight as of March 31, 2023,
2024 and 2025, respectively.
(4) The increase of self-operated offline stores/counters in Hong Kong and Macau mainly represented the
number of new offline stores/counters for which we entered into leases with shopping malls or
department stores.
(5) The decrease of self-operated offline stores/counters in Hong Kong and Macau mainly represented the
number of offline stores/counters for which our leases with shopping malls or department stores were
terminated.
For the year ended March 31, 2024, the numbers of both new and closed stores and
counters in Hong Kong and Macau were more than those for the year ended March 31, 2023,
primarily because we opened more pop-up stores during the year ended March 31, 2024, which
are stores that are usually closed after less than half year from the date of opening, in response
to the potential risks associated with the slow recovery of consumer traffic in shopping malls
and department stores after the COVID-19 pandemic ended.
For the year ended March 31, 2025, the numbers of both new and closed stores and
counters in Hong Kong and Macau were less than those for the year ended March 31, 2024,
primarily because we opened less pop-up stores during the year ended March 31, 2025 as we
believe that the consumer traffic in shopping malls and department stores had recovered to a
stable status.
The following table sets forth the revenue growth or decrease of our self-operated offline
stores and counters under continuous operation by geographical regions for the periods
indicated.
For the Y ear Ended March 31,
2024 vs 2023 (1) 2025 vs 2024 (2)
Mainland China /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.7% (35.3)% (3)
Hong Kong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844.1% (10.5)% (3)
Macau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828.9% (0.9)% (3)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829.4% (14.3)% (3)
BUSINESS
–2 1 1–


--- page 222 ---
Notes:
(1) We define self-operated offline stores and counters under continuous operation for the calculation of this
comparison as the self-operated offline stores and counters under continuous operation from April 1,
2022 to March 31, 2024. Based on this definition, there were 67 such stores/counters.
(2) We define self-operated offline stores and counters under continuous operation for the calculation of this
comparison as the self-operated offline stores and counters under continuous operation from April 1,
2023 to March 31, 2025. Based on this definition, there were 64 such stores/counters.
(3) The revenue generated from our self-operated offline stores and counters under continuous operation in
mainland China, Hong Kong and Macau decreased by 35.3%, 10.5% and 0.9%, respectively, for the year
ended March 31, 2025 as compared to that for the year ended March 31, 2024, primarily due to the
decrease of consumer traffic in the department stores where certain stores or counters were located for
the year ended March 31, 2025 as compared to that for the year ended March 31, 2024. According to
Frost & Sullivan, there was an industry trend showing a decline of department stores as consumers’
preferred shopping destination due to, among other factors, outdated infrastructure, old-fashioned
business model and conservative operational strategies adopted by their operators, according to Frost &
Sullivan. We believe such decline resulted in the decreases of consumer traffic in certain department
stores where our self-operated stores were located.
Certain of our self-operated offline stores and counters recorded loss during the Track
Record Period. The following table sets forth the details of our loss-making self-operated
offline stores and counters by geographical regions for the periods indicated:
As of/For the Y ear Ended March 31,
2023 2024 2025
Mainland China
Number of loss-making
self-operated stores/counters /H1118/H1118/H1118/H1118/H1118/H1118/H111831 44 49
Revenue generated from these
stores/counters (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,211 21,423 45,250
Gross profit from these stores/counters
(RMB’000)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,525 16,450 32,358
Loss from these stores/counters
(RMB’000)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,837) (11,369) (19,137)
Hong Kong
Number of loss-making
self-operated stores/counters /H1118/H1118/H1118/H1118/H1118/H1118/H111822 17 26
Revenue generated from these
stores/counters (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,086 39,046 41,591
Gross profit from these stores/counters
(RMB’000)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,949 26,735 28,883
Loss from these stores/counters
(RMB’000)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,339) (11,208) (13,733)
BUSINESS
– 212 –


--- page 223 ---
As of/For the Y ear Ended March 31,
2023 2024 2025
Macau (3)
Number of loss-making
self-operated stores/counters /H1118/H1118/H1118/H1118/H1118/H1118/H1118567
Revenue generated from these
stores/counters (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118995 3,289 4,381
Gross profit from these stores/counters
(RMB’000)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118670 2,397 3,002
Loss from these stores/counters
(RMB’000)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(930) (3,149) (2,858)
Notes:
(1) The gross profit is calculated by subtracting cost of goods sold from the sales of goods for the
loss-making self-operated stores/counters.
(2) The loss is calculated by subtracting all related operating costs and expenses from the sales of goods
for the loss-making self-operated stores/counters.
(3) The loss-making self-operated offline stores/counters located in Macau were operated by Eternal Far
East, our Hong Kong subsidiary, and/or its Macau branch, during the Track Record Period and up to the
Latest Practicable Date.
We believe that the losses recorded by a number of our self-operated stores/counters
during the Track Record Period were attributable to certain historical factors that are not likely
to continue to negatively affect the performances of our self-operated stores/counters in the
near future. The factors primarily include:
(i) the impact of the COVID-19 pandemic, which resulted in significant decreases of
consumer traffic in the shopping malls and department stores where our self-
operated stores/counters were located. According to Frost & Sullivan, such decrease
of consumer traffic was partially attributable to customers’ preference for one-stop
shopping during the COVID-19 pandemic, as opposed to visiting multiple locations,
which was mainly motivated by a desire to reduce human contact due to the health
concerns. Such behavior persisted for a while even after the COVID-19 pandemic.
As the COVID-19 pandemic had ended in 2022, we currently do not expect that our
financial performance will continue to be adversely affected by it in the near future;
and
(ii) the industry trend showing a decline of department stores as consumers preferred
shopping destination due to, among other factors, outdated infrastructure, old-
fashioned business model and conservative operational strategies adopted by their
operators, according to Frost & Sullivan. Such decline resulted in the decreases of
consumer traffic in certain department stores where our self-operated stores were
located. The decline of departments stores and the growth of shopping malls
BUSINESS
– 213 –


--- page 224 ---
indicated a trend in China (including Hong Kong and Macau) that shopping malls
have replaced the department stores as the preferred shopping destination of
consumers. According to Frost & Sullivan, shopping malls are expected to continue
to grow in the next five years, primarily driven by their ability to meet the evolving
consumer demands. In line with such trend, we had been closing our self-operated
stores/counters located at department stores to shift resources to open and operate
more self-operated stores/counters in shopping malls during the Track Record
Period, and plan to mainly open new stores/counters in shopping malls in the near
future. The table below sets forth the details of our self-operated stores/counters
located at department stores and shopping malls:
As of/For the Y ear Ended March 31,
2023 2024 2025
Department stores
Number of self-operated stores/counters at
the beginning of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109 88 57
Increase of self-operated stores/counters (1) /H1118 14 14 11
Decrease of self-operated stores/counters (2) /H1118 (35) (45) (18)
Number of self-operated stores/counters at
the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888 57 50
Revenue generated from these
stores/counters (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,812 176,001 128,326
Shopping malls
Number of self-operated stores/counters at
the beginning of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845 40 59
Increase of self-operated stores/counters
(1) /H1118 18 53 32
Decrease of self-operated stores/counters (2) /H1118 (23) (34) (24)
Number of self-operated stores/counters at
the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 59 67
Revenue generated from these
stores/counters (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,019 145,185 139,269
Notes:
(1) The increase of self-operated stores/counters represent the stores/counters opened during the
period.
(2) The decrease of self-operated stores/counters represent the stores/counters closed during the
period.
BUSINESS
– 214 –


--- page 225 ---
Perfume Box
Perfume Box is our self-operated retailer brand that covers both online stores and offline
sales channels. We primarily sell perfumes and fragrance-related products directly to
consumers at our Perfume Box stores. As of March 31, 2025, we operated five offline Perfume
Box stores, including (i) one offline Perfume Box store in Shanghai K11 Art Mall, which is the
first “art-themed mall” in mainland China providing artistic and aesthetic enjoyment to
consumers in the shopping space, (ii) one offline Perfume Box store in Shanghai Daning
Jiuguang Department Store, (iii) one offline Perfume Box store in Kunming Wangfujing
Department Store, (iv) one offline Perfume Box store in Shenzhen COCO Park Shopping Mall,
and (v) one offline Perfume Box store in Foshan Unipark Department Store. As of the same
date, we also operated four online Perfume Box stores on Tmall.com, WeChat Mall and RED
Mall. For the years ended March 31, 2023, 2024 and 2025, the revenue generated from our
offline Perfume Box stores amounted to RMB1.0 million, RMB2.3 million and RMB2.2
million, and the gross profit margin amounted to 66.1%, 71.7% and 75.7%, respectively. For
the same periods, the revenue generated from our online Perfume Box stores amounted to
RMB16.0 million, RMB15.2 million and RMB11.5 million, and the gross profit margin
amounted to 59.2%, 57.9% and 70.8%, respectively. During the Track Record Period, we sold
over 2,000 products in terms of SKU from over 55 brands at our online and offline Perfume
Box stores, which were primarily perfumes that come in different sizes as to make them more
appealing and attractive to young consumers.
In December 2024, we entered into an agreement with a third party retailer to explore new
operational modes for Perfume Box stores in addition to self-operation. Pursuant to this
agreement, such retailer procures from us, and we grant such retailer the right to sell, the
specified products at the retail store(s) or counter(s) using our trademark, and require it to
return the right to operate such store(s) or counter(s) to us when the agreement expires. The
design and decoration of such store(s) or counter(s) are subject to our instruction and standards.
As of March 31, 2025, this third party operated a Perfume Box store in Ningbo, Zhejiang
Province, which sold branded products procured from us to consumers. For the year ended
March 31, 2025, our revenue from sales to this offline retailer amounted to RMB0.5 million.
We believe this collaboration could enable Perfume Box stores to penetrate certain local
markets swiftly and at relatively lower costs. If this operational model proves to be successful,
we may consider involving more third-party retailers to operate offline Perfume Box stores.
However, we will not use any net proceeds from the Global Offering to open Perfume Box
stores to be operated by third parties. Please see the section headed “Future Plans and Use of
Proceeds” in this prospectus for further details.
BUSINESS
– 215 –


--- page 226 ---
We plan to build Perfume Box into a signature retailer brand for online and offline stores
that can (i) attract artistic youths, who are young consumers that tend to express their
personalities and aesthetic tastes in the products they use; and (ii) educate novice perfume
users, thereby cultivating them into loyal and frequent consumers of the perfumes we sell. To
attract artistic youths, we designed the store front of the offline Perfume Box stores and the
interfaces of the online Perfume Box stores to be attractive and appealing to young consumers
while combining features that are both trendy and niche. The photos and screenshots below
demonstrate the offline store front and online stores interfaces of Perfume Box:
Offline Perfume Box Store — Shanghai K11 Art Mall
BUSINESS
– 216 –


--- page 227 ---
Offline Perfume Box Store — Kunming Wangfujing Department Store
Offline Perfume Box Store — Shenzhen COCO Park Shopping Mall
BUSINESS
– 217 –


--- page 228 ---
Online Perfume Box Stores
RED Mall Tmall WeChat Mall
We also actively seek other marketing opportunities to expand the exposure of Perfume
Box, including (i) participating in the promotional events of the shopping malls where our
offline Perfume Box stores are located to gain exposure and attract new customers; (ii)
collaborating with non-perfume brands to develop crossover theme events, driving the
consumer traffic of these players to Perfume Box; and (iii) inviting celebrities to promote or
endorse perfumes sold at Perfume Box.
Expansion Plans
We endeavor to open new self-operated offline Perfume Box stores in the first tier, new
first tier and second tier cities in mainland China. For the years ending March 31, 2026, 2027
and 2028, we expect to open approximately 20, 40 and 40 such new Perfume Box stores,
including approximately three flagship stores in the year ending March 31, 2025 and
approximately five flagship stores in the year ending March 31, 2026. The remaining stores
shall be regular stores. We anticipate that the flagship stores will command approximately 100
sq.m. of store space, while regular stores will command approximately 40 sq.m. to 60 sq.m. of
store space. In general, we will identify and select top-tier shopping malls and/or department
stores where our new Perfume Box stores will be located. As of March 31, 2025, we operated
five offline Perfume Box stores, which were located in Shanghai, Kunming, Shenzhen and
Foshan. We were in the process of opening several additional new offline Perfume Box stores
in mainland China as of the same date.
BUSINESS
– 218 –


--- page 229 ---
In addition, we plan to open new self-operated offline stores and counters as part of our
network expansion strategy. Specifically, in the next four years, we intend to open a total of
approximately 100 new self-operated offline stores/counters for the brands in our brand
portfolio in first tier, new first tier and second tier cities in China (including Hong Kong and
Macau). A significant majority of these offline stores/counters will be opened in mainland
China, with the remaining offline stores/counters to be opened in Hong Kong and/or Macau.
We will have a balanced mix of new self-operated stores/counters for the existing brands in our
brand portfolio and new brands we intend to cooperate with. These new self-operated offline
stores/counters will command approximately 40 sq.m. to 60 sq.m. of store space. In general,
we will identify and select top-tier shopping malls and/or department stores where our new
self-operated offline stores/counters will be located.
See the paragraph headed “— Our Business Strategies — Extend our consumer reach
through continued investment in our direct sales channels” for further details on expansion
plans for our self-operated offline Perfume Box stores.
(i) Breakeven Period and Investment Payback Period Analysis
Based on our experience, the respective length of the breakeven period (defined as the
time needed to reach first point in time at which a store’s monthly operating revenue is at least
equal to its monthly operating expenses such as costs of goods sold, rent, staff costs,
depreciation expenses related to the store and taxes, the “Breakeven Period”) and investment
payback period (defined as the time needed to reach the first point in time at which the
accumulated net profit of the store is at least equal to the costs of opening and operating the
stores, the “Investment Payback Period”) is generally dependent upon the prevailing market
conditions, the economic environment, the size and location of the relevant store, the estimated
consumer flow, rent and other payables to the facility owners, the type and variety of products
available for sale in a particular store, operating performance, operating cost and initial
investment cost of a particular retail store. Therefore, the period for reaching the Breakeven
Period or the Investment Payback Period varies substantially from store to store and over time.
For the purpose of calculating the Breakeven Period and Investment Payback Period, we
used similar estimated capital expenditures on our self-operated offline Perfume Box stores and
self-operated offline stores/counters, including rental expenses and salaries and benefits of
employees. Accordingly, we currently expect that the Breakeven Period for our new offline
Perfume Box stores and self-operated offline stores/counters will be at least approximately
nine months, and the Investment Payback Period for these stores and counters will be at least
approximately 2.5 years.
This information is prepared on the basis of our current expansion plans and our
management’s present expectation, which are subject to various risks, assumptions and
uncertainties. There is no assurance that our actual expansion plans will not deviate from our
current expansion plans. Our management will consider making various adjustments to our
business plans, including but not limited to, delaying or suspending our expansion plans and
increasing our debt and/or equity financing when our working capital or business performance
BUSINESS
– 219 –


--- page 230 ---
may be materially and adversely affected. In the event of material change in circumstances or
our business plans, to comply with Rule 13.09 of the Listing Rules, we will make
announcements as and when appropriate if our business might be materially or adversely
affected. All information relating to the Breakeven Period and Investment Payback Period is
for reference and illustration purposes only.
(ii) New Store/Counter Opening Process
Our new store/counter opening process, which starts from planning and ends with
store/counter opening, generally requires six months to one year to complete. It primarily
consists of: (i) identifying and approving the store/counter location by our management; (ii)
approving the location by our brand licensors; (iii) conducting preliminary analysis of profit
and loss; (iv) entering into the lease agreement with the lessor; (v) engaging professionals for
the interior design; (vi) obtaining all requisite licenses and permits; and (vii) recruiting store
managers, beauty advisors and other staff, conducting new staff training and completing other
pre-opening preparations.
Retailer Channels
Online Retailers
Online retailers are retailers that purchase products from us and directly sell them to
consumers through online platforms. During the Track Record Period, online retailers to which
we sold products primarily included mainland China’s major or large-scale e-commerce
platforms and retailers that sell products through their online stores on e-commerce platforms.
For the years ended March 31, 2023, 2024 and 2025, the number of online retailers to which
we sold products was 57, 66 and 74, respectively. Among these online retailers are third-party
companies that represent KOLs, whom we cooperate with to promote the branded products we
sell across multiple social media and e-commerce platforms, such as Douyin, RED and
Tmall.com. These KOLs include celebrities, official accounts of institutions ( ʮ଺໮) and other
KOLs with various popularity levels. For the years ended March 31, 2023, 2024 and 2025, we
sold products to four, five and seven such third-party companies, respectively. For the years
ended March 31, 2023, 2024 and 2025, revenue generated from the sales to these third-party
companies amounted to RMB1.3 million, RMB5.1 million and RMB16.8 million, representing
0.1%, 0.3% and 0.8%, respectively, of our total revenue for the same periods. These companies
also provide marketing services to us. For details of our promotional activities on social media
platforms and through KOLs, see the paragraph headed “— Marketing and Promotion” in this
section. As of March 31, 2023, 2024 and 2025, the products we sold to online retailer
customers were subsequently sold to their customers at 42, 63 and 122 POSs, respectively, in
China (including Hong Kong and Macau).
BUSINESS
– 220 –


--- page 231 ---
Key Accounts
The key accounts to which we sell products primarily include operators of chained
cosmetics specialty stores, operators of individual stores for cosmetics products, beauty salons,
operators of brand boutique stores and operators of chained or individual eyewear stores. The
operated by these key accounts that sold the products purchased from us during the Track
Record Period primarily comprised of chained cosmetics specialty stores in China (including
Hong Kong and Macau). As of March 31, 2025, the POSs of key accounts that sold the products
purchased from us were located in more than 300 cities in China (including Hong Kong and
Macau). For the years ended March 31, 2023, 2024 and 2025, we sold products to 522, 566 and
590 key account customers, respectively. As of each of March 31, 2023, 2024 and 2025, the
products we sold to key accounts customers were subsequently sold to their customers at 6,779,
7,167 and 7,842 POSs, respectively, in China (including Hong Kong and Macau).
Travel Retailers
The travel retailers to which we sell products primarily include airports, airlines, cruises
and downtown duty-free shops. As of March 31, 2025, the POSs of travel retailers that sold the
products purchased from us were located in 40 cities in China (including Hong Kong and
Macau). For the years ended March 31, 2023, 2024 and 2025, we sold products to seven, 14
and 14 travel retailer customers, respectively, in China (including Hong Kong and Macau). As
of March 31, 2023, 2024 and 2025, the products we sold to travel retailer customers were
subsequently sold to their customers at 183, 320 and 343 POSs, respectively, in China
(including Hong Kong and Macau).
In recent years, various governmental authorities in mainland China promulgated policies
to support the development of travel retail industry. For instance, in June 2020, the MOF, the
SA T and the General Administration of Customs jointly issued the Policy of Duty-Free
Shopping for Hainan Outlying Island Visitors (ഄ), which
stipulated tax-free shopping policy for outlying island travelers in Hainan Province. In
February 2021, the MOF, the SA T and the General Administration of Customs jointly issued
the Announcement on Increasing the Pick-up Methods for Duty-free Shopping for Travelers
Leaving Hainan Island (ʮѓ), pursuant to
which travelers who are leaving Hainan Island may also choose to receive the goods they
purchased by postal delivery in addition to picking up at designated areas in the airports,
railway stations or port terminals.
We believe these supportive policies, as well as the development of the travel retail
industry in mainland China will contribute to the growth of revenue generated from our sales
to travel retailers in mainland China. The exclusive licenses or sub-licenses we obtained from
the brand licensors usually cover the sales to travel retailers in mainland China, which allow
us to exclusively sell and distribute the relevant branded products to travel retailers in
mainland China. Accordingly, we believe we are in a position to benefit from such policies. For
instance, the number of POSs at which our travel retailer customers sold the products that they
procured from us significantly increased from 183 as of March 31, 2023 to 320 as of March
BUSINESS
– 221 –


--- page 232 ---
31, 2024, among which, 66 and 111 POSs were located in Hainan Province as of March 31,
2023 and March 31, 2024, respectively. The number of POSs at which our travel retailer
customers sold the products that they procured from us further increased to 343 as of March
31, 2025, among which, 113 POSs were located in Hainan Province. Our revenue generated
from the sales to travel retailers increased from RMB89.1 million for the year ended March 31,
2023 to RMB136.6 million for the year ended March 31, 2024, and further to RMB235.5
million for the year ended March 31, 2025.
In August 2024, the MOF, the MOFCOM, the Ministry of Culture and Tourism of the
PRC, the General Administration of Customs and the SA T jointly issued the Circular on
Improving the Policy for Downtown Duty-Free Shops ()
(the “Circular”), which became effective in October 2024. The Circular also promulgated the
Interim Measures for the Administration of Downtown Duty-Free Shops (၍ଣᅲ
) (the “Measures”). According to the Circular and the Measures:
(i) the existing 13 foreign currency exchange goods duty-free shops (ֳ)
in mainland China, which are the duty-free shops that only allow PRC nationals at
or above the age of 16 who entered mainland China with a Chinese passport within
the past six months to purchase duty-free products, shall be transformed into
downtown duty-free shops, and shall begin to operate only after passing the customs
inspection within three months from the effective date of the Circular;
(ii) eight new downtown duty-free shops will be opened in Guangzhou, Chengdu,
Shenzhen, Tianjin, Wuhan, Xi’an, Changsha and Fuzhou; and
(iii) the Measures will be applicable to downtown duty-free shops. Before the Measures
take effect, downtown duty-free shops in mainland China only allowed foreign
travelers leaving mainland China shortly to purchase duty-free products. However,
the Measures provide that the downtown duty-free shops will allow travelers,
including foreign and PRC nationals, who will leave mainland China by air or
international cruises within 60 days to purchase duty-free products. In addition, the
Measures provide that the downtown duty-free shops shall set pick-up points in the
exit isolation zones at the ports (̈ྤཞᕎਜ) for consumers to pick up their
purchased products who must carry these products with them when they leave
mainland China.
We believe that the Circular and the Measures will not materially and adversely affect our
business operations and financial performance, primarily because (i) according to Frost &
Sullivan, there were over 200 duty-free shops in mainland China as of the Latest Practicable
Date. The transformation of 13 existing foreign currency exchange goods duty-free shops to
downtown duty-free shops, and the opening of eight new downtown duty-free shops in
mainland China pursuant to the Circular only represented a small number of duty-free shops
in the country; and (ii) the consumer traffic in the existing duty-free shops at the airports and
BUSINESS
– 222 –


--- page 233 ---
cruise ports will not substantially decrease, because consumers who purchased products at
downtown duty-free shops still must collect them at designated pick-up points in the airports
and cruise ports, according to the Measures.
As of March 31, 2025, our coverage of the duty-free shops was mainly through the sales
of products to our travel retailer customers. As of the same date, the products we sold to these
travel retailer customers were subsequently sold at nine foreign currency exchange goods
duty-free shops (which consisted of 40 POSs) and one downtown duty-free shop (which
consisted of 19 POSs) in mainland China operated by such travel retailers. We believe the
changes pursuant to the Circular and Measures could bring new business opportunities to our
travel retailer customers, primarily because (i) the implementation of the Measures will result
in more diversified consumer groups consisting of both PRC nationals and foreign travelers as
compared with those of the foreign currency exchange goods duty-free shops and the
downtown duty-free shops before the Measures become effective. We believe such
diversification will provide a more stable revenue stream at these shops, which will likely
increase our sales at these shops; and (ii) the Circular announced the opening of eight new
downtown duty-free shops, which, according to Frost & Sullivan, further solidifies the growth
potential in mainland China’s travel retailer market arising from the steady expansion of
duty-free shops. Given our recent revenue growth in the travel retailer channels during the
Track Record Period as demonstrated above, we believe we are able to capture such growth
opportunities. We believe the expansion of duty-free shops and the anticipated growth of our
travel retailer channel could lead to more purchase orders to be placed by our travel retailer
customers, which in turn can help us optimize our revenue stream and drive our growth and
business development. However, even if we are not able to fully capture these growth
opportunities in the travel retailer channels, we believe we will still be able to maintain stable
business and revenue growth, primarily because our sales and distribution channels are
diversified and complementary to each other, which enable us to swiftly reallocate resources
from those channel(s) with unsatisfactory performances to other available sales and
distribution channels, thereby maintaining our overall revenue growth and profitability.
We do not expect that the policies under the Circular and the Measures will have any
substantial impact on our future business plans. To continue to expand our sales and
distribution network in mainland China, including travel retailer channels in Hainan Province
and the cities with transformed or new downtown duty-free shops, we plan to (i) continue to
strengthen our relationships with major travel retailers in mainland China to seek new
opportunities to expand our travel retailer network; and (ii) closely monitor the market trend
in cities with new downtown duty-free shops to timely take initiatives to further expand our
sales made to travel retailers.
BUSINESS
– 223 –


--- page 234 ---
Distribution Channels
Overview
During the Track Record Period and up to the Latest Practicable Date, we sold a number
of products through distributors. Our distributors include online distributors and offline
distributors, which purchase products from us and primarily resell them to online retailers and
offline retailers, respectively. Some of these distributors also sell products directly to
consumers. During the Track Record Period, the offline retailers to which our offline
distributors distributed products primarily included cosmetics specialty stores. For the years
ended March 31, 2023, 2024 and 2025, revenue generated from the sales of products to our
distributors amounted to RMB567.2 million, RMB560.5 million and RMB633.6 million,
accounting for approximately 33.4%, 30.1% and 30.4% of our total revenue for the same
periods, respectively. Revenue from our distributors is recognized when the control of the
products is transferred.
We sell the products through distributors primarily because:
 Selling products through distributors is a common practice in the industries where
we operate, as advised by Frost & Sullivan. The cooperation with distributors
provides a number of benefits to us in certain local markets where we have not yet
established direct presence via subsidiaries or branches, so as to maximize our
market penetration and exposures to expand the scale of our operations. For
example, distributors have extensive sales network and a deeper understanding of
the local market trends and consumers’ preferences in the areas where they operate,
which can facilitate the penetration of the products we sell. They can also provide
on-site sales support and aftersales services to consumers in various local markets.
 Selling products through distributors limits our exposures to the risks of developing
some of the local markets by ourselves directly. It helps us in being more effective
in our resource allocation to selling and distribution, thereby improving our
operational and financial performance.
We generally only allow distributors to return defective products. We require our
distributors to make return requests for defective products within a certain period of time from
the date of delivery, which generally range from five to 30 days. After the return request is
made, our relevant staff will review such request, including photos of the defective products,
to verify that they indeed meet the requirements for return. Upon verification, our staff will
guide the distributors to return the defective products to designated warehouses and check the
returned products. Once the returned products are confirmed to be properly returned to the
warehouse and indeed defective, we will arrange refund or exchange of products according to
the preference of the distributors. For details of our overall product return and refund policies,
see the paragraph headed “— Customers — Customer Services, Warranty and Product
Replacement/Return Policy” in this section. As confirmed by Frost & Sullivan, our distribution
arrangements, including the product return policies for our distributors, are generally in line
with industry norm.
BUSINESS
– 224 –


--- page 235 ---
The following table sets forth the changes in the number of distributors for the periods
indicated:
As of/For the Y ear Ended March 31,
2023 2024 2025
Online distributors
Number at the beginning of the period /H1118 47 47 51
Increase (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 81 6
Decrease (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7) (14) (20)
At the end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H111847 51 47
Offline distributors
Number at the beginning of the period /H1118 39 43 47
Increase (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 15 18
Decrease (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11) (11) (13)
At the end of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H111843 47 52
Notes:
(1) The number of new distributors represented the number of distributors which transacted with us during
the present year, but did not transact with us in the previous year.
(2) The number of terminated distributors represented the number of distributors which transacted with us
in the previous year, but did not transact with us during the present year.
The fluctuations of the number of our new and terminated distributors each financial year
primarily resulted from the fact that we maintained a flexible seller-buyer relationship with a
number of distributors during the Track Record Period. Our sales of products to these
distributors were made through one-off purchase orders they placed with us on an ad hoc basis.
Whether these distributors transact with us for a relevant year depends on a variety of reasons,
including the shift of their business focuses or changing market demands in the local markets
where they operate.
The number of our online distributors increased from 47 as of March 31, 2023 to 51 as
of March 31, 2024, mainly because we began to sell additional skincare products and color
cosmetics and expanded our distributor network to facilitate our business expansion. The
number of our online distributors decreased from 51 as of March 31, 2024 to 47 as of March
31, 2025, primarily because our management allocated more resources and attention to the
sales to our online retailers, such as major e-commerce platforms, during the year ended March
31, 2025 in light of the upcoming promotional activities on these platforms in China (including
Hong Kong and Macau) in the second half of the year, which consequently shifted the focus
and resource allocations away from online distributors.
BUSINESS
– 225 –


--- page 236 ---
We had no material dispute with our distributors during the Track Record Period and up
to the Latest Practicable Date. To the best knowledge of our Directors, all of our distributors
were Independent Third Parties during the Track Record Period.
Selection and Management of Distributors
When selecting potential distributors, we primarily consider (i) their coverage of
distribution network in the local markets where we sell or plan to sell the products; (ii) their
distribution ability and scale; (iii) their experience in the industries in which we operate; (iv)
whether the types and brand images of the products which they historically distributed conform
to the positioning of the products we currently sell; (v) their operating history and credibility;
and (vi) their growth potential.
We generally do not allow our distributors to engage any sub-distributors. Under our
agreements with the distributors, they shall seek our prior approval before engaging any
sub-distributors. During the Track Record Period and up to the Latest Practicable Date, we
were not aware of any sub-distributors engaged by our distributors.
Contracts with Distributors
As of March 31, 2025, we had entered into distribution agreements with distributors
representing over 75% of our revenue generated from the distributors for the year ended March
31, 2025, which typically contained the following principal terms:
 Duration : The duration of the agreements is usually one year.
 Renewal : The agreements are typically renewable upon mutual consent of the
parties.
 Distribution channels : We generally limit the distribution channel in which the
distributors are allowed to distribute the products. They are not permitted to sell the
products outside the designated distribution channels. The online distributors and
offline distributors are generally only allowed to resell the products to online
retailers and offline retailers, respectively, and/or to consumers directly.
 Minimum purchase requirements : We generally do not require our distributors to
make minimum purchases.
 Minimum sales targets : We typically do not set minimum sales targets to specify the
amount of products that the distributors are contractually obligated to sell. We may
provide retrospective sales rebates to our distributors once the total value of the
products purchased from us during the period exceeds a pre-set target specified in
the relevant agreements.
BUSINESS
– 226 –


--- page 237 ---
 Pricing policy : We typically sell the products to our distributors at a discount from
the recommended retail prices.
 Payment and credit terms : In general, we shall arrange to deliver products to the
distributors only after all relevant payments have been settled in advance.
Accordingly, we generally do not extend credit to our distributors.
 Return arrangements : The online distributors are generally required to inspect the
products upon delivery, while the offline distributors shall inspect the products
within a specific period of time from the date of delivery, which usually amount to
five days. Any return request made after the agreed time will generally be rejected.
We usually only accept the return request for defective products.
 Termination : The agreements can be terminated by either party with prior written
notice or for cause.
With respect to certain distributors that make purchases from us on an ad hoc basis, we
have transacted and we will continue to transact with them by way of purchase orders. As of
March 31, 2023, 2024 and 2025, we did not enter into distribution agreements with 65, 67 and
34 distributors, respectively. We did not enter into long-term agreements with these distributors
primarily because we believe that the sales made through one-off purchase orders rather than
long-term distribution agreements allow us to maximize the flexibility in our transactions with
the distributors. The revenue generated from distributors which did not enter into agreements
with us as of March 31, 2025 accounted for less than 25% of our revenue generated from the
distributors for the year ended March 31, 2025. None of these distributors accounted for more
than 5% of our revenue generated from the distributors for the year ended March 31, 2025. By
retaining full discretion to cease supplying products to any of our distributors, whether or not
they have entered into a distribution agreement with us, we believe we have been able to ensure
that our distributors do not sell the products we supply to them in a manner, or take any action
that could give rise to any material and adverse impact on us.
On the basis of the foregoing, the Directors are of the view that, during the Track Record
Period and up to the Latest Practicable Date, to the best of their knowledge, the measures and
controls in place had been effective in ensuring that our distributors did not cause any material
and adverse impact to our business and operations as a whole. See the sections headed “Risk
Factors — Risks Relating to Our Business and Industry — Our control over our distributors
could be limited” and “Risk Factors — Risks Relating to Our Business and Industry — Our
failure to detect or prevent fraudulent or illegal activities or other misconduct by our
employees, customers, distributors, retailers, suppliers or other third parties may have a
material adverse effect on our business” in this prospectus for more details.
BUSINESS
– 227 –


--- page 238 ---
Measures to Prevent Channel Stuffing
We believe that our sales correspond to the actual consumer demands and our products are
at a low risk of channel stuffing in our sales and distribution network, primarily because (i) we
generally require full payment before delivering products to our distributors; (ii) we generally
do not allow returns of products sold to distributors, except for products that are defective; and
(iii) we generally maintain a seller-buyer relationship with our distributors, under which we
typically do not set minimum purchase requirements to specify the amount of products that the
distributors are obligated to purchase from us, nor minimum sales targets to specify the amount
of products that the distributors are obligated to sell.
Despite the low risk in channel stuffing due to the above factors, we adopted the
following strategies and internal control policies to prevent channel stuffing in our sales and
distribution network going forward:
(i) We usually require the distributors to make full payments to us before delivering the
products. Unless we granted credit terms to the distributors in certain limited
circumstances, we will arrange the delivery of products to the distributors only after
the payments from them have been fully settled.
(ii) We generally only allow return or exchange of products by distributors in limited
circumstances, such as defective products. We communicate with the distributors
and conduct analysis to fully understand their reasons for the return of the products.
We also perform quality check before accepting any return or exchange of products
to ensure that they meet the standards for return or exchange.
(iii) We review our sales ledgers on a monthly basis, which record the purchase orders
from the distributors, to identify any abnormal purchase orders, such as irregular
spikes or dormant purchases, from major distributors.
(iv) We communicate with the distributors on a monthly basis about their inventory
status of the products procured from us, and provide catalogs to distributors for them
to consider whether the products suit their target customers before they place
purchase orders with us, with an aim to minimize unsaleable or slow-moving
products. We also check the actual inventory status at the warehouses of the
distributors through ad hoc visits by our designated staff and/or external service
providers.
(v) We have implemented measures to discover potential channel stuffing. These
measures include (a) monthly and quarterly sampling of the sales data by our sales
teams to review the sales made by our distributors in the relevant channels and
regions, and trace the sales that may indicate high channel stuffing risks; (b)
engaging third-party service providers to monitor the sales information relating to
the products sold through online channels on an on-going basis, which will keep us
informed on any abnormal sales involving the products sourced from us that they
BUSINESS
– 228 –


--- page 239 ---
have discovered; and (c) a product tracing system based on the unique batch codes
attached to the products sold by us, which allows us to identify distributors that
made the sales through tracing the designated product batch codes.
(vi) If we discover that any of our distributors have engaged in practices or taken any
action that could give rise to any material and adverse impact on our business and
operations, such as intentionally stocking products to disrupt the sales in the market,
our management will review the materiality of the impact, and decide whether any
appropriate actions or penalties shall be imposed on such distributors, including the
suspension of product supply until receiving adequate compensation or to terminate
business relationships with them. We believe there is no substantial obstacle in the
suspension of product supply or termination of business relationships with the
distributors, given that (a) the duration of the agreements with the distributors, if
any, is usually just one year, and we are not obligated to renew the agreements after
the expiry; and (b) the agreements with the distributors generally do not prohibit us
from suspending the product supply to them. During the Track Record Period, we
did not terminate our business relationships with any of our distributors due to their
wrongful actions.
(vii) We run the Know-Y our-Client procedures on the distributors before entering into or
renewing our cooperation with them, which involve, among others, their historical
transactions with us or other industry players, to understand their operation, in
particular their inventory management ability, and ensure their independence from
our Group.
Based on the above measures and the absence of signs of any material abnormalities in
our transactions with major distributors, all of which are Independent Third Parties, nothing
has come to the attention of our Directors and the Joint Sponsors that our sales do not
correspond to the actual consumer demands.
Measures to Prevent Cannibalization
There could be overlapping geographical coverage between our direct sales channels and
retailer channels. We believe such overlap does not materially and adversely affect our
business, primarily because (i) our direct sales channels and retailer channels cater to the
different consumer preferences, which, together, can provide more holistic shopping
experience for consumers. Our direct sales channels mainly consists of (i) self-operated
Perfume Box stores where we only sell perfume products from multiple brands; and (ii)
self-operated stores and counters that are dedicated to different categories of products from a
single brand (e.g., brand boutique stores and image counters) or multiple brands (i.e.,
multi-brand counters). As such, our direct sales channels mainly serve consumers looking for
specific brands or shopping specific category of products. For example, when the consumers
know the exact brand or product type they intend to purchase, they can visit our boutique stores
and counters. If the consumers intend to purchase perfumes but not certain from which
brand(s), they may visit our Perfume Box stores. Our retailer channels, however, can serve
BUSINESS
– 229 –


--- page 240 ---
consumers who may not be looking for specific products in particular, or allowing them to
purchase a number of different types of products in one go; and (ii) selling products in both
channels in the same area enables us to, among other things, expand the exposure of the brands
to a large group of consumers, offer them different shopping options and provide convenience
to shoppers as our direct sales channels and retailer channels complement each other in terms
of the consumers’ demands.
To prevent cannibalization in our sales and distribution network, we have adopted the
following strategies and internal control policies.
(i) We maintain a list of POSs with respect to both our direct sales channels and retailer
channels, and are therefore able to plan and monitor the store locations in top-tier
cities to prevent cannibalization between our direct sales channels and retailer
channels. In the event that we discover unhealthy competition, such as price wars,
between our self-operated stores/counters and the retailers’ POSs involving the
consumers in the same area, we are able to take certain actions to neutralize such
competition, including selecting the POS locations in the self-operated network and
retailer network, or differentiating the types of products sold at the relevant
self-operated stores/counters and retailers’ POSs through discussions with the
relevant retailers.
(ii) We categorize mainland China’s market into multiple tiers of cities. Sales in the first
tier, new first tier and second tier cities are primarily conducted through direct sales
channels and retailer channels, whereas sales in lower tier cities are primarily
conducted through distribution channels. Retailers and distributors retain the liberty
to allocate their sales in specific cities within the designated tiers in mainland China,
and shall implement their own sales strategy to prevent unhealthy market
competition. Although we do not restrict their sales to specific cities, such
geographical differentiation by tiers of cities lowers the risks of cannibalization
between (a) direct sales channels/retailer channels; and (b) distribution channels.
(iii) Products distributed by us are usually grouped in terms of stock turnover days,
namely, A, B, C and N types, with A type being the fastest-selling products and N
type being the slowest-moving products. For details of the categorization of these
types, please refer to paragraph headed “— Inventory Management” in this section.
A majority of A type products shall be sold through direct sales channels and retailer
channels in first tier, new first tier and second tier cities, while a majority of other
types of products shall be sold by distributors in the lower tier cities. In addition, the
products we sell in first tier, new first tier and second tier cities are usually the
products for which we have higher promotion and advertising expenditures than
those sold in lower tier cities, mainly because we believe the consumers in first tier,
new first tier and second tier cities collectively tend to have stronger spending
power and higher purchasing frequency than those in lower tier cities, and our
expenditure in promotion and advertising will enable us to draw the attention of
these consumers more effectively. Such market deployment strategy also resulted in
BUSINESS
– 230 –


--- page 241 ---
differences in the prices of the products sold in first tier, new first tier and second
tier cities and those sold in lower tier cities. These measures differentiated the types
of products sold by (i) direct sales channels and retailer channels; and (ii)
distribution channels. We believe that, as the consumer groups located in different
tiers of cities usually have different product preferences on, among others, pricing
and product types, this approach helps distinguish consumers groups of these
channels, and therefore lowers the risks of cannibalization arising from the
unhealthy competition among these channels.
(iv) We have implemented measures to discover higher than usual cannibalization risks.
These measures include (a) monthly and quarterly sampling of the distributor sales
and retailer sales data by our sales teams to review the sales made by our distributors
or retailers in the relevant channels and regions, and trace the sales that may indicate
high cannibalization risks, such as abnormal distribution location or pricing; (b)
engaging third-party service providers to monitor the sales information relating to
the products sold through online channels on an on-going basis, which will keep us
informed on any abnormal sales involving the products sourced from us that they
have discovered; and (c) a product tracing system based on the unique batch codes
attached to the products sold by us, which allows us to identify distributors that
made the sales through tracing the designated product batch codes.
(v) If we discover that any distributors or retailers have engaged in practices or taken
any action that could give rise to any material and adverse impact on our business
and operations, such as any violation of distribution location or the unfair
competition through price wars, our management will review the materiality of the
impact, and decide whether any appropriate actions or penalties shall be imposed on
such distributors or retailers, including the suspension of product supply until
receiving adequate compensation or to terminate business relationships with them.
We believe there is no substantial obstacle in the suspension of product supply or
termination of business relationships with the distributors or retailers, given that (a)
the duration of the agreements with the distributors, if any, is usually just one year,
and we are not obligated to renew the agreements after the expiry; and (b) the
agreements with the distributors generally do not prohibit us from suspending the
product supply to them. During the Track Record Period, we did not terminate our
business relationships with any of our distributors or retailers due to their wrongful
actions.
(vi) Before the engagement of any distributors or retailers, we also take into
consideration the geographical coverage of their historical sales before entering into
transactions with them. In the event that there is any overlap with the existing sales
and distribution channels, our management will decide whether we should enter into
transactions with such distributors with reference to, among others, the degree of
BUSINESS
– 231 –


--- page 242 ---
overlapping, the cannibalization risks and the overall layout of our sales and
distribution channels. However, we would not cease to engage distributors merely
because they have overlapped geographical coverage with our existing sales and
distribution channels.
In particular, to prevent cannibalization among our distributors, we have adopted the
following strategies and internal control policies:
(i) To further reduce the risks of cannibalization among distributors, we require the
distributors to inform us the cities where they plan to sell the products when they
place purchase orders with us, and notify us when there is any change to the
locations of such sales.
(ii) We generally do not designate specific cities to our offline distributors, or specific
online platforms to our online distributors, as a measure to minimize the risk of
cannibalization. However, we generally require our online distributors to resell the
products procured from us only through online channels, and offline distributors to
resell the products procured from us only through offline channels, which prevents
cannibalization between online distributors and offline distributors.
MARKETING AND PROMOTION
Marketing and promotion activities are crucial to our success. Our brand team (೐ଡ଼),
consisting of 89 staff members as of March 31, 2025, is responsible for coordinating our
marketing activities and maintaining collaborative relationship with brand licensors. We also
form specialized teams to provide more bespoke and effective marketing and promotional
campaigns for important brands. As of March 31, 2025, we had 76 marketing personnel, which
are primarily responsible for liaising with our various teams and departments for marketing
activities. In addition, we have a digital marketing team, which mainly utilizes digital
resources and the market data we collected through e-Hub, and liaises with our other
departments and teams to conduct marketing activities. For details of our digital marketing
team, please refer to the paragraph headed “— Information Technology System — Digital
Strategy — Digital Marketing Team” in this section.
We either design and publish the advertisements by ourselves, or, in the event that (i) the
advertisements that we plan to publish are beyond the capacity of our in-house teams due to
their complexity and timing requirements, and (ii) we consider that the engagement of
third-party service providers (e.g., advertising agents or advertisement publishers) would be
more cost-effective than our direct involvement, engage such third-party service providers to
design and publish the advertisements for us. In choosing such third-party service providers,
we usually take into consideration, among others, (i) their qualifications in providing the
advertising services; (ii) the quality of the advertisements designed and/or published by them;
and (iii) whether they had any records of non-compliance with the relevant laws and
regulations. We generally monitor the content of the advertisements designed and published by
such third-party service providers and by our in-house teams. Our monitoring measures
BUSINESS
– 232 –


--- page 243 ---
include, among others, (i) requiring our marketing and legal teams to review the
advertisements and other marketing and promotional materials from the perspectives of legal
compliance and risks of infringement; (ii) engaging legal advisor(s) to seek advice on the
regulatory requirements of latest advertising laws; and (iii) providing training to the relevant
staff regarding continuing compliance with the applicable advertising laws and regulations, as
well as our policies regarding sales and marketing. We may be held liable for the failure to
comply with the applicable laws and regulations in connection with our advertisements, which
may result in legal proceedings, investigations and/or penalties from the relevant authorities.
In the event this occurs, our business, financial condition, results of operations and reputation
may be materially and adversely affected. For further details, please refer to the section headed
“Risk Factors — Risks Relating to our Business and Industry — Failure to comply with
applicable advertising laws and regulations when promoting the products we sell may subject
us to potential risks and penalties.”
Individualized Marketing Plans
As part of the brand building and enhancement initiatives we undertake for the brands in
our brand portfolio, we formulate and implement business development and expansion plans
for brands, which include modular marketing plans that meet the personalized demands of the
brand licensors. Under these plans, we choose the ideal marketing channels for the brands,
including, among others, social media platforms, online store banners on e-commerce
platforms, authoritative media such as newspapers and magazines, face-to-face consumer
events, exhibitions in shopping malls and roadshows. When choosing these channels, we
primarily consider the which channel(s) will be in the best position to help reach the target
consumers for the relevant brands and products we sell.
We incur expenses arising from the implementation of the marketing plans and record
them under our selling and marketing expenses. The specific budget allocations vary from
brand to brand. However, for each brand licensor, we are generally required under the
distribution agreements to spend a portion of the revenue we derived from the sales of the
relevant products on their advertising and promotion. In the event that the brand licensors
decide to conduct additional business development activities that are beyond the scope of the
business development and expansion plans, or the expenses incurred by the activities exceed
the agreed amount under the business development and expansion plans, we will negotiate with
the brand licensors on the payment of such additional expenses. The specific payment
procedures will be subject to the negotiation with the brand licensors and their common
practices. For the years ended March 31, 2023, 2024 and 2025, our advertising and promotion
expenses amounted to RMB113.5 million, RMB80.3 million and RMB165.2 million,
accounting for approximately 6.7%, 4.3% and 7.9% of our total revenue, respectively.
Our promotion and selling arrangements on social media platforms depend on their
operation modes, which vary from one platform to another. For instance, from 2020 to 2021,
Douyin was primarily a promotion platform where internet live streamers promote products
and provide links to purchase of such products in the comments threads, leading audiences to
separate e-commerce platforms to complete their purchases. Therefore, under this operation
BUSINESS
– 233 –


--- page 244 ---
mode, Douyin was used as one of our promotional platforms rather than a selling and
distribution channel, where we simply arrange to add our links to the relevant internet
live-streamers’ pages. Since 2021, when Douyin started to have online shops, we began to sell
products in our self-operated stores and the stores of certain internet live-streamers, making
Douyin both a marketing platform and a sales platform for us.
In addition to cooperating with social media platforms, we engage a number of KOLs,
who are represented by companies with which we contractually cooperate, to promote products
on the social media platforms where they operate. These KOLs primarily include internet
live-streamers on Douyin and Kuaishou, as well as lifestyle influencers on RED. We primarily
enter into marketing services agreements with the companies representing these KOLs,
pursuant to which they provide marketing and distribution services to us, including promoting
and selling the products through the KOLs they represent. The fees for such services are
usually calculated under (i) cost-per-click mode, which is based on the total number of clicks
the viewers make on the advertisements; (ii) cost-per-mille mode, which is based on the total
number of page views of advertisements; (iii) cost-per-day mode, which is based on the
duration of the advertisements; (iv) cost-per-action mode, which is based on the actions of the
viewers; and/or (v) cost-per-leads mode, which is based on the number of attracted customers.
We do not directly regulate the conduct of the KOLs and live-streamers as we only
maintain contractual relationship with the third-party companies representing them. These
companies are generally obligated under our agreements with them to ensure that the activities
of the KOLs and/or live-streamers they engage comply with applicable laws and regulations,
and shall compensate us any loss we incur arising from any non-compliance of the KOLs
and/or live-streamers. We typically provide marketing content to the third-party companies,
which are reviewed by our marketing and legal teams, and such third-party companies shall
ensure that their KOLs and live-streamers follow such content in their marketing activities. In
addition, our designated staff will view the marketing activities conducted by the KOLs and
live-streamers to check their compliance with our agreements and applicable laws and
regulations. We require such third-party companies to provide us with the identities of the
KOLs and live-streamers to be involved in the relevant marketing activities, which enable us
to conduct requisite background check of their public image, suitability and historical
compliance with applicable laws and regulations.
BUSINESS
– 234 –


--- page 245 ---
Marketing and Promotional Campaigns
We strive to fully utilize our online and offline resources to improve the market awareness
and sales of branded products in our portfolio. We participated in Jingzhuang Dapai ( ԯѱɽ
೐) in 2022, a promotional campaign held by JD.com, during which our promotional efforts
prompted the search ranking of a luxury brand in our portfolio on a major e-commerce platform
in mainland China. We also launched a mega event with a beach house theme for a skin
conditioner of Albion in 2022, during which we “repromoted” this product to boost its
awareness among consumers. In the same year, we cooperated with a top streamer of Taobao,
to promote Coach perfumes in its live streaming, during which the total gross merchandise
volume amounted to more than RMB1.5 million. In 2023, we initiated cooperation with over
1,000 KOLs on Douyin and on RED, which conducted a total of over 2,000 live streaming
promotions for the products we promoted. In 2024, we invited media and industry players to
attend a dinner for announcing the new product launch of Ferragamo in West Bund Museum
in Shanghai City to preheat the launch of new products.
The following photos captures the marketing and promotional events we organized during
the Track Record Period.
Versace Mega Event Albion Mega Event
In addition to the marketing and promotional campaigns for brands and products, we have
been actively organizing and participating in industry-wide activities that we believe can help
us achieve industry-wide recognition. Beginning in 2020, we jointly published the “China
Perfume Industry Research White Paper” with an Independent Third-party industry consultant
annually. For details of our China Perfume Industry Research White Paper, please refer to the
paragraph headed “— Our Competitive Strengths — We maintain a leading position for
perfumes in China (including Hong Kong and Macau)” in this section. Below is a photo that
captured the launch conference for China Perfume industry Research White Paper in 2023.
BUSINESS
– 235 –


--- page 246 ---
2023 Launch Conference for China Perfume Industry Research White Paper
PROCUREMENT, W AREHOUSE AND LOGISTICS
Procurement Process
We formulate product procurement plans based on, among others, the sales forecast
calculated using the information from each point of sales, historical sales amount, unsettled
purchase orders and our inventory level. Once the procurement plans are approved by the
management team, we place orders with the suppliers accordingly, including brand licensors
for branded products. We typically place orders for products based on our stock planning for
the next three to four months. The suppliers then issue invoices to us and, upon receipt of our
confirmation, coordinate with us to arrange transportation of the products to our designated
locations. The delivery of products from our suppliers to our designated locations usually takes
two to four weeks for transportation by air, and two to five months for transportation by sea.
Generally, we make payments to suppliers after product delivery or the issue of invoices, and
we have a credit period of 60 days to 120 days from the date of product delivery or issue of
invoices, as the case may be. With respect to our self-owned brand, Santa Monica, during the
Track Record Period, we engaged external manufacturers to produce the Santa Monica-branded
products on an OEM basis, and procured them from the manufacturers. The procurement plans
for the Santa Monica-branded products were made based on the historical sales amount and our
estimation of the market demand. Other than the engagement of external manufacturers and
formation of procurement plans, the procurement process of our Santa Monica-branded
products is generally the same with that of external branded products.
As we primarily procure products from Europe, Japan and the U.S., our procurement
process typically involves importation and customs clearance. Our designated in-house teams
strive to ensure that the imported products are in compliance with applicable laws and
regulations, which primarily include (i) product registration, for which we guide the brand
licensors to prepare the relevant documents, and submit them to the local authorities in China
BUSINESS
– 236 –


--- page 247 ---
(including Hong Kong and Macau) for the purpose of obtaining the product licenses; (ii)
labelling, for which we make arrangements to attach labels to the imported products in the
format and with the specifications required by local laws and regulations; and (iii) packing, for
which we make arrangements to ensure that the packages of the imported products will be in
compliance with local laws and regulations, and ready for subsequent transportation.
Warehousing and Logistics
As of the Latest Practicable Date, the products which we have completed the importation
process for but not yet sold were primarily stored in warehouses leased from Independent Third
Parties. We have formulated internal safety measures and policies for our staff who work at
these warehouses, which stipulated the responsibilities of various staff members on security
checks, incidents reporting and problem solving. We also set out the relevant procedures at
these leased warehouses covering all major aspects of warehouse operations, including, among
others, the daily management and maintenance, delivery routines, disposal of packaging
materials and storage environment inspection. As of the Latest Practicable Date, we also
engaged three warehousing and logistics service providers that are Independent Third Parties,
which provided relevant warehouse, delivery and other ancillary services to us with respect to
the products stored in their warehouses in mainland China. Under our agreements with the
third-party warehousing service providers, the service providers shall guarantee that the
storage environment and conditions comply with applicable laws, regulations and rules or
comply with the warehouse management system as required by the customs, and shall
compensate us for any loss we incur arising from their non-compliance with these
requirements. Further, as confirmed by our PRC Legal Advisor, in such case, as our Group is
not responsible for the storage of the products, our Group and our Directors will not be subject
to any legal liability under the applicable laws and regulations in the PRC in case of any
non-compliance by the third-party warehousing and logistics service providers. Nonetheless,
we communicate with the third-party warehousing and logistics service providers regarding the
status of our products stored at their warehouses from time to time, which allows us to monitor
their compliance status involving the storage of such products. In addition to these warehouses,
we may lease temporary warehouses to satisfy our unexpected needs from time to time. During
the Track Record Period and up to the Latest Practicable Date, except for the non-compliance
incidents as disclosed in the paragraph headed “— Legal Proceedings and Compliance —
Storage of Perfumes” in this section, to the best of our knowledge, the operation of the
warehouses leased by us from Independent Third Parties and the warehouses operated by the
three warehousing and logistics service providers for us were in compliance with all applicable
laws and regulations.
Products are typically delivered within one to seven days to the designated locations of
our customers after we receive their orders. We primarily engage independent third-party
logistics service providers for the delivery of the products to customers through land
transportation. As of March 31, 2025, we engaged 16 third-party logistics service providers.
BUSINESS
– 237 –


--- page 248 ---
The long-term agreements we entered into with our third-party services providers for
warehousing and/or logistics contained the following principle terms:
 Duration : The duration of the agreements usually ranges from one to three years.
Some agreements may automatically renew annually until terminated by either party
or the parties entered into a new agreement for similar matters.
 Service fees : Calculated monthly according to the fee schedules set out in the
agreements.
 Credit and payment terms : Payments are settled monthly. We are generally granted
a credit term up to 30 days from the due date of payment.
 Liability and compensation : The service provider assumes liability for damages and
losses incurred during transportation, unless caused by our fault or force majeure.
 Termination : Generally, the agreements can be terminated prior to expiration of term
by either party via prior notice or for cause.
For the years ended March 31, 2023, 2024 and 2025, our warehousing and logistics
expenses amounted to RMB26.9 million, RMB26.1 million and RMB29.1 million, respectively.
INVENTORY MANAGEMENT
In order to minimize our inventory carrying costs and preserve our working capital, we
strive to maintain optimal inventory levels. Our inventory primarily consists of finished
products purchased from third-party brand licensors. As of March 31, 2023, 2024 and 2025, our
balance of inventories amounted to RMB357.6 million, RMB390.3 million and RMB434.1
million, respectively. For the same periods, our average inventory turnover was 179.2 days,
160.7 days and 159.1 days, respectively.
To maintain appropriate inventory level while avoiding product shortages, we classify the
products we sell into four major categories in terms of stock turnover days, namely, A, B, C
and N types, with A type being the fastest-selling products and N type being the
slowest-moving products. We make procurement plans based on this product categorization to
ensure sufficient stock of the products with higher historical sales amount. We keep track of
the changes in sales volume and adjust the products categorization accordingly. In addition, a
majority of A type products shall be sold through direct sales channels and retailer channels in
first tier, new first tier and second tier cities, while a majority of other types of products shall
be sold by distributors in the lower tier cities.
BUSINESS
– 238 –


--- page 249 ---
We maintain a digital SAP system to track of our inventory as part of inventory
management. Such SAP system enables us to manage different aspects of our inventory,
including (i) procurement agreements and orders, as well as order settlements; (ii) transfer of
inventory; (iii) orders placed by our customers and the relevant delivery process; and (iv)
movement of inventories in our warehouses. This system enables us to monitor our inventory
level and can generate inventory reports on a real-time basis, which in turn helps us maintain
optimal inventory level and improve our working capital efficiency.
PRICING STRATEGY
We set our prices after considering numerous factors, including the recommended retail
prices, which are generally determined based on the discussions we have with the brand
licensors. The determination of the recommended retail prices takes into consideration, among
other things, (i) our forecast costs and expenses for advertisement, promotion and distribution
channels; (ii) our anticipated profit margin; and (iii) the procurement prices of the products.
Such recommended retail prices are generally stipulated under our agreements or other forms
of authorization with the brand licensors.
The following table sets forth the range for the recommended retail prices by product
category at which we sell to our customers during the Track Record Period:
Product Category Recommended Retail Price Range
RMB
Perfumes (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 to 60,000
Skincare products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 to 15,000
Color cosmetics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 to 6,600
Eyewear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190 to 2,600
Note:
(1) The recommended retail prices of perfumes include those of our personal care products and home
fragrances, because some of the perfume brands in our brand portfolio during the Track Record Period
also offered personal care products and/or home fragrances.
We typically sell the products to online and offline distributors and retailers at a discount
from the recommended retail prices, which is determined based on, among others, the
negotiation with the distributors or retailers, the historical discounts we provided and the
discount level for similar products in the market.
BUSINESS
– 239 –


--- page 250 ---
The following table sets forth the average selling price and sales volume by product
category during the periods indicated:
Y ear Ended March 31,
2023 2024 2025
Average
Selling
Price (1)
Sales
Volume(2)
Average
Selling
Price (1)
Sales
Volume(2)
Average
Selling
Price (1)
Sales
Volume(2)
(RMB) (RMB) (RMB)
Perfumes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118215.6 6,540,534 216 6,650,498 220.3 7,174,108
Skin care products /H1118/H1118/H1118/H1118/H1118114.2 781,289 108.7 1,028,632 87.3 1,785,414
Color cosmetics /H1118/H1118/H1118/H1118/H1118/H1118/H1118157.3 422,348 201.2 941,782 223.5 1,005,067
Eyewear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118353 27,022 308.8 69,061 215.4 57,855
Home fragrances /H1118/H1118/H1118/H1118/H1118/H1118266.5 7,529 323.5 58,336 330.2 74,337
Personal care products /H1118/H1118/H1118270.6 3,652 313.8 13,639 185.2 30,578
Notes:
(1) The average selling price is calculated by dividing revenue from the sales of goods by sales volumes. The
average selling prices may not be representative of our revenue generated from each product sold, primarily
because the price range of the products sold by us during the Track Record Period vary significantly. Such wide
price range derives from the different recommended retail prices of the products we sold in different sizes,
price categories (e.g., luxury, prestige and entry prestige perfumes) and packaging (e.g., sets and individual
product).
(2) The specific units of the sales volume vary from product to product, including, among others, bottles or boxes
for skincare products, and boxes or sets for color cosmetics.
We may provide retrospective sales rebates to our retailer and distributor customers once
the quantity of products purchased during the period exceeds a threshold specified in our
agreements with them. The sales rebates will be set off by products only. For the years ended
March 31, 2023, 2024 and 2025, the amounts of sales rebates we provided to retailers were
RMB19.3 million, RMB21.1 million and RMB3.3 million, respectively. For the same periods,
the amounts of sales rebates we provided to distributors were RMB1.4 million, RMB4.2
million and RMB0.5 million, respectively.
We have adopted multiple approaches to track the final retail prices of products sold to
consumers, including, among others, (i) requiring retailers to periodically report sales data to
us, which includes actual retail prices of the products they sold; (ii) collecting actual retail
prices through our e-Hub; (iii) designating specialized in-house staff to constantly track the
actual retail prices of the products we sold.
BUSINESS
– 240 –


--- page 251 ---
CUSTOMERS
We sell products to retailers, distributors and consumers. To the best knowledge of our
Directors, during each year of the Track Record Period, all of our five largest customers in each
year during the Track Record Period were Independent Third Parties. None of our Directors,
their respective close associates, or any Shareholder who, to the knowledge of our Directors,
owns more than 5% of our issued capital, had any interest in these customers during the Track
Record Period and up to the Latest Practicable Date.
For the years ended March 31, 2023, 2024 and 2025, revenue generated from our five
largest customers in each year during the Track Record Period amounted to approximately
RMB371.3 million, RMB364.2 million and RMB518.2 million, accounting for approximately
21.9%, 19.5% and 24.9%, respectively, of our total revenue, respectively, for the same periods.
For the years ended March 31, 2023, 2024 and 2025, revenue generated from our largest
customer amounted to approximately RMB96.1 million, RMB102.9 million and RMB167.1
million, accounting for approximately 5.7%, 5.5% and 8.0% of our total revenue, for the same
periods.
The following table sets forth the details of our five largest customers in each period
during the Track Record Period:
For the Y ear Ended March 31, 2023
Rank Customer Principal Business Location
Types of Products
Sold
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Amount of
Revenue
As Percentage
of Our Total
Revenue
Days RMB’000 %
1 /H1118/H1118/H1118Customer C A company which
mainly sells
perfumes to
end consumers
Mainland China,
Singapore
Perfumes, skincare
products and
other
cosmetics
products
Bank transfer 2018 50 days from
invoice
date
96,122 5.7
2 /H1118/H1118/H1118Customer A A company which
mainly sells
cosmetics
products to
end consumers
Mainland China Perfumes Bank transfer 2020 Cash before
delivery
76,140 4.5
BUSINESS
– 241 –


--- page 252 ---
Rank Customer Principal Business Location
Types of Products
Sold
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Amount of
Revenue
As Percentage
of Our Total
Revenue
Days RMB’000 %
3 /H1118/H1118/H1118Customer F A travel retailer
which sells
products
including,
among others,
cosmetics
products and
other consumer
goods, to end
consumers
Hong Kong Perfumes, skincare
products and
other
cosmetics
products
Bank transfer 2014 60 days from
invoice
date
69,458 4.1
4 /H1118/H1118/H1118Customer G A company which
mainly sells
perfumes to
end consumers
Hong Kong Perfumes, skincare
products and
other
cosmetics
products
Bank transfer 2015 60 days from
invoice
date
66,988 3.9
5 /H1118/H1118/H1118Customer B A multinational
company
which mainly
sells cosmetics
products to
end consumers
Mainland China,
Hong Kong
Perfumes and other
cosmetics
products
Bank transfer 2013 30 days from
invoice
date
62,555 3.7
Total /H1118 371,263 21.9
BUSINESS
– 242 –


--- page 253 ---
For the Y ear Ended March 31, 2024
Rank Customer Principal Business Location
Types of Products
Sold
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Amount of
Revenue
As Percentage
of Our Total
Revenue
Days RMB’000 %
1 /H1118/H1118/H1118Customer F A travel retailer
which sells
products
including,
among others,
cosmetics
products and
other consumer
goods, to end
consumers
Hong Kong Perfumes, skincare
products and
other
cosmetics
products
Bank transfer 2014 60 days from
invoice
date
102,858 5.5
2 /H1118/H1118/H1118Customer C A company which
mainly sells
perfumes to
end consumers
Mainland China
and Singapore
Perfumes, skincare
products and
other
cosmetics
products
Bank transfer 2018 50 days from
invoice
date
76,967 4.1
3 /H1118/H1118/H1118Customer H A multinational
company
which mainly
sells cosmetics
products to
end consumers
Mainland China
and Hong
Kong
Perfumes and
skincare
products
Bank transfer 2010 30 days from
invoice
date
62,953 3.4
4 /H1118/H1118/H1118Customer A A company which
mainly sells
cosmetics
products to
end consumers
Mainland China Perfumes Bank transfer 2020 Cash before
delivery
61,721 3.3
5 /H1118/H1118/H1118Customer I A company which
mainly sells
perfumes to
end consumers
Hong Kong Perfumes Bank transfer 2021 Cash before
delivery
59,726 3.2
Total /H1118 364,225 19.5
BUSINESS
– 243 –


--- page 254 ---
For the Y ear Ended March 31, 2025
Rank Customer Principal Business Location
Types of Products
Sold
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Amount of
Revenue
As Percentage
of Our Total
Revenue
Days RMB’000 %
1 /H1118/H1118/H1118Customer F A travel retailer which
sells products
including, among
others, cosmetics
products and other
consumer goods, to
end consumers
Hong Kong Perfumes, skincare
and other
cosmetics
products
Bank Transfer 2014 60 Days of
Invoice
date
167,062 8.0
2 /H1118/H1118/H1118Customer H A multinational
company which
mainly sells
cosmetics products
to end consumers
Mainland China
and Hong
Kong
Perfumes and
skincare
products
Bank Transfer 2010 30 days of
Invoice
137,268 6.6
3 /H1118/H1118/H1118Customer C A company which
mainly sells
perfumes to end
consumers
Mainland China
and Singapore
Perfumes, skincare
and other
cosmetics
products
Bank Transfer 2018 50 Days of
Invoice
date
105,804 5.1
4 /H1118/H1118/H1118Customer G A company which
mainly sells
perfumes to end
consumers
Hong Kong Perfume, skincare
and other
cosmetics
products
Bank Transfer 2015 60 Days of
Invoice
date
55,997 2.7
5 /H1118/H1118/H1118Union Duty-Free
Limited
A company which
mainly sells,
among others,
perfumes, skincare
and other
cosmetics products
to retailers through
online channels
Hong Kong Perfume, skincare
and other
cosmetics
products
Bank Transfer 2019 Cash Before
Delivery
52,113 2.5
Total /H1118 518,244 24.9
BUSINESS
– 244 –


--- page 255 ---
Advances to Certain of Our Retailer Customers
During the Track Record Period, we provided advances to third parties which were our
retailer customers, namely, Retailer A, Retailer B and Retailer C. Specifically:
 Retailer A : Retailer A is a company incorporated under the laws of the PRC, which
mainly engages in beauty salon business and sales of skin care products in mainland
China. The former sole shareholder of Retailer A held the position of deputy general
manager of a PRC subsidiary of our Group before retiring in 2021. She established
and managed Retailer A, and conducted the trial operation of self-operated
multi-brand stores within mainland China, on behalf of Mr. Lau. We provided
advances to Retailer A from 2018 to 2019 to support its business operations. In 2021,
the entire shareholding of Retailer A was transferred to Mr. Lam, the elder brother
of Ms. Lam, who is an executive Director and the chief executive officer of our
Company. Subsequently, Mr. Lam transferred 30% shares of Retailer A to another
shareholder in 2022.
 Retailer B and Retailer C : Retailer B is a company incorporated under the laws of
the PRC, which mainly engages in wholesale eyewear products in mainland China.
Retailer C is a company incorporated under the laws of the PRC, which mainly
engages in wholesale eyewear products in mainland China. The shareholders of
Retailer B and Retailer C, who held the shareholding in Retailer B and Retailer C
since their establishment, were former employees of our Group and/or business
partners of Mr. Lau. We provided advances to Retailer B and Retailer C from 2015
to 2018 to support their business operations, mainly because (i) they had long-term
business relationships with our Group; and (ii) we believed at the time that their
business operations could enable us to penetrate the eyewear market in mainland
China in the event that their operations were successful. The shareholders of Retailer
B and Retailer C also held other entities which conducted transactions with our
Group during the Track Record Period, including procuring perfume products, color
cosmetics and skincare products from our Group, and/or providing advertising
services to our Group. We repurchased certain amount of products from these
entities that were sold to them during the Track Record Period.
The advances provided to Retailer A, Retailer B and Retailer C had been fully repaid to
our Group by February 2025.
BUSINESS
– 245 –


--- page 256 ---
The following table sets forth the details of our transactions with these three retailers in
each period during the Track Record Period:
As of/For the Y ear Ended March 31,
2023 2024 2025
(RMB’000) (RMB’000) (RMB’000)
Retailer A (1)
Purchase from Retailer A (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869 42 685
Sales to Retailer A (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,574 2,174 2,265
Outstanding advances provided to
Retailer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,500 10,500 –
Retailer B (4)
Purchase from Retailer B (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 3––
Sales to Retailer B (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,254 516 –
Outstanding Advances provided to
Retailer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,561 17,784 –
Retailer C (7)
Purchase from Retailer C (8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,627 2,292 13,060
Sales to Retailer C (9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,328 1,127 –
Outstanding advances provided to
Retailer C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Notes:
(1) As mentioned above, Retailer A was established by a former employee of our Group on behalf of Mr.
Lau in 2018. We had transactions with Retailer A before the share transfer in 2021 and continued to have
transactions with Retailer A after the respective share transfers in 2021 and 2022. During the Track
Record Period, the primary payment method used by Retailer A was bank transfer, and the typical credit
term provided by our Group to Retailer A was 45 days from invoice date.
(2) During the Track Record Period, we mainly purchased skincare products from Retailer A.
(3) During the Track Record Period, we mainly sold perfumes to Retailer A.
(4) We commenced business relationship with Retailer B in 2005. During the Track Record Period, the
primary payment method used by Retailer B was bank transfer, and the typical credit term provided by
our Group to Retailer B is 120 days from invoice date.
(5) During the Track Record Period, we mainly purchased eyewear products from Retailer B.
(6) During the Track Record Period, we mainly sold eyewear products to Retailer B.
(7) We commenced business relationship with Retailer C in 2004. During the Track Record Period, the
primary payment method used by Retailer C was bank transfer and the typical credit term provided by
our Group to Retailer C was 120 days from invoice date.
(8) During the Track Record Period, we mainly purchased eyewear products from Retailer C.
(9) During the Track Record Period, we mainly sold eyewear products to Retailer C.
BUSINESS
– 246 –


--- page 257 ---
Customer Services, Warranty and Product Replacement/Return Policy
The products we sell to retailers and distributors are subject to the return and exchange
requirements under the relevant agreements and/or our internal policies. In general, the
retailers and distributors shall inspect the products within a specific period of time from the
date of delivery, which usually ranges from five to 30 days. Any return request made after the
agreed time will generally be rejected. We usually only accept the returns for defective
products. However, we have special product return policies for a small number of our key
accounts, under which we may (i) allow them to return the slow-moving products to us under
agreed terms and conditions; or (ii) in certain limited circumstances, allow them to
unconditionally return a small percentage of the total purchases each year. The slow-moving
products typically refer to the products for which the key accounts could not meet their sales
target for certain period of time, generally ranging from two to six months. Revenue generated
from the key accounts which enjoy such special product return policies accounted for 5.5%,
6.3% and 8.7% of our total revenue for the years ended March 31, 2023, 2024 and 2025,
respectively. The total value of the products returned by these key accounts for reasons other
than being defective amounted to RMB6.9 million, RMB5.9 million and RMB7.7 million for
the years ended March 31, 2023, 2024 and 2025, respectively. Both our Directors and the Frost
& Sullivan are of the view that the above product return policy is in line with the general
market practice in the industries where we operate.
In terms of consumers to whom we directly sell the products, we usually do not allow
return or exchange of products once they are purchased. However, some of the shopping malls,
department stores and e-commerce platforms where we sold products to consumers may have
certain return and exchange policies that apply to all the sales made through them, and we
generally follow their policies. For instance, Tmall maintains a policy that allows consumers
to return or exchange the products for no reasons within seven days from the date of purchase,
as long as the products being returned or exchanged are not damaged by the consumers.
For the years ended March 31, 2023, 2024 and 2025, our product returns, which include
the returned products from both key accounts with special product return policies and all other
customers, amounted to RMB9.7 million, RMB10.4 million and RMB11.5 million,
representing 0.6%, 0.6% and 0.6% of our total revenue from sales of goods, respectively, for
the same periods. The main reasons for product return include broken packages, defective
substances and damaged components.
For retailers and distributors, we provide customer services in accordance with the
requirements as specified in the relevant agreements, our internal policies and/or market
practice. For consumers to whom we directly sell the products, we provide customer services,
including guidance on the use of products, product return and product exchange, according to
our internal policies and industry practice. When we receive a complaint from a consumer, our
customer service department will review the complaint and provide solutions based on the
issues at hand, which include guidance on the use of products, and product return or exchange.
During the Track Record Period and up to the Latest Practicable Date, we had not experienced
any material complaint or product liability or other legal claims from our customers due to
quality issues of the products we sold.
BUSINESS
– 247 –


--- page 258 ---
Contracts with Retailers
The long-term agreements we entered into with the retailers during the Track Record
Period typically contained the following key terms:
 Duration : The duration of the agreements usually ranges from one year to an
undetermined period of time or automatically renewable until either party terminates
the agreements or enter into a new agreement to replace the existing one.
 Renewal : If the agreements provided an initial term, they can generally be
automatically renewed or are renewable by mutual consent until terminated by either
party via prior written notice.
 Minimum purchase requirements : We generally do not set any minimum purchase
requirements.
 Sales and performance targets : We typically do not set sales and performance targets
to specify the amount of products that retailers are contractually obligated to sell to
consumers. We may provide retrospective sales rebates to our retailers once the total
value of the products purchased from us during the period exceeds a pre-set target
specified in the relevant agreements.
 Pricing policy : We sell the products to retailers at price levels that have been
mutually agreed.
 Payment and credit terms : If the agreements are not under the consignment
arrangements, they may provide that (i) the retailers shall make payment to us within
a specific period of time from the date of invoice, which generally ranges from 30
to 60 days; or (ii) we shall arrange to deliver products to retailers only after the
relevant payments have been settled. If the agreements are under the consignment
arrangements, the retailers typically provide sales data to us monthly, based on
which we shall issue an invoice to the retailers for payment. Retailers then make
payment to us within a specific period of time from the date of invoice, which
generally ranges from five to 60 days.
 Return arrangements : The retailers shall inspect the products within a specific
period of time from the date of delivery, which generally ranges from five to 90
days. Any return request made after the agreed time will generally be rejected. We
usually only accept the return request for defective products. In addition, under the
consignment arrangements, the retailers may return unsold products to us upon the
termination of the agreements, provided that the returned products are not defective
or otherwise unable to be resold.
 Termination : The agreements can be terminated by either party with prior written
notice or for cause.
BUSINESS
– 248 –


--- page 259 ---
As of the Latest Practicable Date, our agreements with two retailers were with an
undetermined period of time or automatically renewable until termination or replacement,
primarily because our agreements with these retailers were based on their standard form
contracts which included such contract term according to their internal legal policies.
For details of the long-term agreements we entered into with our distributors during the
Track Record Period, please refer to the paragraph headed “— Sales and Distribution of
Products — Distribution Channels — Contracts with Distributors” in this section.
SUPPLIERS
Overview
During the Track Record Period, we procured branded products from brand licensors,
which consist of brand owners and primary licensees.
For the years ended March 31, 2023, 2024 and 2025, the purchases from our five largest
suppliers in each year during the Track Record Period amounted to approximately RMB698.1
million, RMB771.5 million and RMB851.3 million, accounting for approximately 84.0%,
81.6% and 77.8%, respectively, of our total purchase for the same periods. For the years ended
March 31, 2023, 2024 and 2025, the purchases from our largest supplier amounted to
approximately RMB230.4 million, RMB373.4 million and RMB399.6 million, accounting for
approximately 27.7%, 39.5% and 36.5% of our total purchase, for the same periods,
respectively. During the Track Record Period, all of our five largest suppliers in each year
during the Track Record Period were Independent Third Parties, and none of our Directors,
their respective close associates, or any Shareholder who, to the knowledge of our Directors,
owns more than 5% of our issued capital, had any interest in these suppliers during the Track
Record Period and up to the Latest Practicable Date.
BUSINESS
– 249 –


--- page 260 ---
The following table sets forth details of our five largest suppliers in each period during
the Track Record Period:
For the Y ear Ended March 31, 2023
Rank Supplier
Principal
Business Location
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Transaction
Amount
As Percentage
of Our Total
Purchases
Days RMB’000 %
1. /H1118/H1118/H1118EuroItalia A manufacturer
and distributor
of perfumes
and beauty
products
Italy Telegraphic
transfer
2007 90 days from
the date of
bill of
lading
230,368 27.7
2. /H1118/H1118/H1118InterParfums A manufacturer
and distributor
of perfumes
and other
cosmetics
products
France and
United
States
Telegraphic
transfer
1992 90-120 days
from the
invoice date
210,126 25.3
3. /H1118/H1118/H1118Supplier A A brand owner of
the brands of
various luxury
products,
including
perfumes
Italy Telegraphic
transfer
2016 90 days from
the invoice
date
164,491 19.8
4. /H1118/H1118/H1118Hermes Parfums A brand owner of
brands of
various luxury
products,
including
perfumes
Mainland China
and France
Bank transfer 2005 45-90 days
from the
invoice date
61,430 7.4
5. /H1118/H1118/H1118Albion Co., Ltd. A brand owner of
the brands of
cosmetics
products
Mainland China
and Japan
Telegraphic
transfer
2013 90 days of the
date of bill
of lading
31,693 3.8
Total /H1118/H1118 698,108 84.0
BUSINESS
– 250 –


--- page 261 ---
For the Y ear Ended March 31, 2024
Rank Supplier
Principal
Business Location
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Transaction
Amount
As Percentage
of Our Total
Purchases
Days RMB’000 %
1. /H1118/H1118/H1118EuroItalia A manufacturer
and distributor
of perfumes
and beauty
products
Italy Telegraphic
transfer
2007 90 days from
the date of
bill of
lading
373,433 39.5
2. /H1118/H1118/H1118InterParfums A manufacturer
and distributor
of perfumes
and other
cosmetics
products
France and
United
States
Telegraphic
transfer
1992 90-120 days
from the
invoice date
225,225 23.8
3. /H1118/H1118/H1118Hermes Parfums A brand owner of
brands of
various luxury
products,
including
perfumes
Mainland China
and France
Bank transfer 2005 45-90 days
from the
invoice date
81,764 8.6
4. /H1118/H1118/H1118Bareminerals Ar
Wires & Ac
A brand owner of
brands of
color
cosmetics and
skincare
products
United States Telegraphic
transfer
2022 60 days from
the invoice
date
48,818 5.2
5. /H1118/H1118/H1118Fontaine Limited A brand owner of
brands of
perfumes
France Telegraphic
transfer
2021 60 days from
the invoice
date
42,278 4.5
Total /H1118/H1118 771,518 81.6
BUSINESS
– 251 –


--- page 262 ---
For the Y ear Ended March 31, 2025
Rank Supplier
Principal
Business Location
Primary
Payment
Method
Y ear of
Commencement
of Business
Relationship
Typical Credit
Term
Transaction
Amount
As Percentage
of Our Total
Purchases
Days RMB’000 %
1 /H1118/H1118/H1118/H1118EuroItalia A manufacturers
and distributor
of beauty
perfumes and
products
Italy Telegraphic
transfer
2007 90 days from
the date of
bill of
lading
399,616 36.5
2 /H1118/H1118/H1118/H1118InterParfums A manufacturer
and distributor
of perfumes
and other
cosmetics
products
France and
United
States
Telegraphic
transfer
1992 90-120 days
from the
invoice date
251,209 22.9
3 /H1118/H1118/H1118/H1118Supplier B A manufacturer
and brand
owner of
skincare
products
Mainland China Bank transfer 2021 60 days from
the invoice
date
75,815 6.9
4 /H1118/H1118/H1118/H1118Hermes Parfums A brand owner of
brands of
various luxury
products,
including
perfumes
Mainland China
and France
Bank transfer 2005 45-90 days
from the
invoice date
68,576 6.3
5 /H1118/H1118/H1118/H1118Bareminerals Ar
Wires & Ac
A brand owner of
brands of
color cosmetics
and skincare
products
United States Telegraphic
transfer
2022 60 days from
the invoice
date
56,053 5.2
851,269 77.8
BUSINESS
– 252 –


--- page 263 ---
Brand Licensors
Overview
We primarily act as the exclusive distributor of our brand licensors in mainland China,
Hong Kong and/or Macau, in which we obtain (i) exclusive license from the brand owners to
conduct product distribution and market deployment for their brands for specified products; or
(ii) exclusive sub-license from the primary licensees of the brand owners to conduct product
distribution and market deployment for the brands involving certain specified products that
they are licensed to produce and distribute. Our license from the brand owners or sub-license
from the primary licensees generally specify the territories, products and/or sales channels in
which our exclusive distribution may occur. For the years ended March 31, 2023, 2024 and
2025, a majority of our revenue was generated from sales made under exclusive licenses and
sub-licenses. As of March 31, 2023, 2024 and 2025, licenses or sub-licenses for 44, 54 and 62
brands in our brand portfolio were exclusive in respect of specified territories, products and/or
sales channels, respectively. The revenue generated from the sales of relevant branded products
under these exclusive licenses or sub-licenses amounted to RMB1,484.1 million, RMB1,560.5
million and RMB1,783.0 million for the years ended March 31, 2023, 2024 and 2025,
respectively.
Brand Owners
Brand owners refer to the brand licensors that have ownership over the brands for which
they directly granted us the licenses for distributing and managing such brands. For the years
ended March 31, 2023, 2024 and 2025, our revenue generated from sales of products under the
brands licensed to us by brand owners amounted to RMB762.0 million, RMB690.2 million and
RMB801.0 million, respectively. As of March 31, 2023, 2024 and 2025, 31, 33 and 38 brands
in our brand portfolio were licensed by the brand owners, among which, licenses for 23, 24 and
31 brands, respectively, were exclusive in respect of certain designated territories, products
and/or sales channels.
Primary Licensees
Primary licensees refer to the brand licensors that obtained the primary licenses for
distributing and managing the relevant brands from the respective brand owners, and
sub-licensed such distribution rights to us. We consider both the brand owners and primary
licensees of the brands as our brand licensors and distinguish them based on whether they have
ownership over the brands for which they granted us the licenses or sub-licenses. For the years
ended March 31, 2023, 2024 and 2025, our revenue generated from sales of products under the
brands licensed to us by the primary licensees of the owners of such brands amounted to
RMB899.7 million, RMB1,145.3 million and RMB1,268.8 million, respectively. As of March
31, 2023, 2024 and 2025, 21, 32 and 35 brands in our brand portfolio were sub-licensed by the
primary licensees, among which, the sub-licenses for 21, 30 and 31 brands, respectively, were
exclusive in respect of certain designated territories, products and/or sales channels.
BUSINESS
– 253 –


--- page 264 ---
Major Brands and Major Brand Licensors
Overview
The Major Brands in our brand portfolio during the Track Record Period were sourced
from nine brand licensors. Our revenue generated from the Major Brands amounted to
RMB1,541.9 million, RMB1,643.6 million and RMB1,704.2 million for the years ended March
31, 2023, 2024 and 2025, respectively, which accounted for approximately 92.5%, 88.7% and
81.8% of our total revenue, respectively, for the same periods. As of March 31, 2025, the
licenses for four brands among the Major Brands were non-exclusive, while the rest of the
licenses or sub-licenses were exclusive in terms of designated products and channels in
mainland China, Hong Kong and/or Macau.
Business Relationships with the Brand Licensors of Major Brands
During the Track Record Period, none of our brand licensors terminated agreements with
us before their expiry. In December 2022, the distribution agreement with a major brand
licensor of a major luxury brand expired, which was not subsequently renewed, primarily
because this brand licensor decided to operate such brand in mainland China by itself. Our
business relationship with this brand licensor commenced in 2016. The revenue generated from
the sales of products under this brand amounted to RMB424.7 million for the year ended March
31, 2023, representing 25.0% of our total revenue for the same year. The gross profit margin
of this brand amounted to 41% for the year ended March 31, 2023. This brand licensor was
among our five largest suppliers for the year ended March 31, 2023. In addition, for the years
ended March 31, 2023, we sold certain amount of perfumes that were previously procured from
this brand licensor to a subsidiary of this brand licensor. This was because this subsidiary of
the brand licensor was located in mainland China and our exclusive license to sell and
distribute the relevant perfumes in mainland China precluded this brand licensor itself from
selling these perfumes in mainland China, even to its subsidiaries. For the year ended March
31, 2023, the revenue generated from the sales of perfumes to this subsidiary of the brand
licensor amounted to RMB4.0 million. Despite the fact that our distribution agreement with
this brand licensor had expired in December 2022, we only ceased selling the relevant branded
products later in June 2023 to clear the remaining stock of these products in our inventory. We
obtained a separate authorization letter from this brand licensor to conduct such sales during
the period from the expiry of the distribution agreement to June 30, 2023.
BUSINESS
– 254 –


--- page 265 ---
The termination of business relationship with this brand licensor had partially offset the
growth of our revenue from the year ended March 31, 2022 to the year ended March 31, 2023.
However, we managed to maintain the overall growth of our business and achieve stable
financial performance after such termination. Specifically, from the year ended March 31, 2023
to the year ended March 31, 2024, (i) our revenue grew by approximately 9.7%, which was
even higher than the growth rate of our revenue at 1.5% from the year ended March 31, 2022
to the year ended March 31, 2023; (ii) our gross profit margin remained relatively stable at
50.3% for the year ended March 31, 2024, compared to 50.4% for the year ended March 31,
2023; and (iii) the number of external brands in our brand portfolio increased from 51 as of
March 31, 2023 to 64 as of March 31, 2024, and the number of our brand licensors increased
from 32 as of March 31, 2023 to 40 as of March 31, 2024, which demonstrated that our
business relationships with other brand licensors remained strong and stable and that we were
able to continue to expand our brand portfolio after the business relationship with this brand
licensor was terminated.
EuroItalia and InterParfums, our major brand licensors, were our top two suppliers in
terms of transaction amount for each of the financial period during the Track Record Period.
The transaction amount of EuroItalia amounted to RMB230.4 million, RMB373.4 million and
RMB399.6 million for the years ended March 31, 2023, 2024 and 2025, respectively, which
accounted for 27.7%, 39.5% and 36.5% of our total purchases, respectively, for the same
periods. The transaction amount of InterParfums amounted to RMB210.1 million, RMB225.2
million and RMB251.2 million for the years ended March 31, 2023, 2024 and 2025,
respectively, which accounted for 25.3%, 23.8% and 22.9% of our total purchases, respectively,
for the same periods. We believe the risks associated with such concentration of purchases are
relatively low, primarily because (i) we maintained long-term business relationships with
EuroItalia and InterParfums, which lasted for over 15 years and over 30 years, respectively; (ii)
we are able to continuously reach mutually beneficial contractual terms with EuroItalia and
InterParfums in terms of, among others, exclusivity, geographical coverage and/or pricing
terms, which we believe demonstrated their confidence in our future cooperation, and further
solidified our ongoing partnerships; and (iii) we are capable of mitigating the loss of major
brands through collaborating with other brands on a timely basis, thereby maintaining our
overall revenue and profitability. As mentioned above, we were able to maintain our revenue
growth by approximately 9.7% from the year ended March 31, 2023 to the year ended March
31, 2024 after our agreement for a major luxury brand expired in December 2022, despite that
the revenue generated from this major luxury brand had accounted for approximately 25.0% of
our total revenue for the year ended March 31, 2023.
To mitigate the potential impact that may arise from the termination of business
relationships with our major brand licensors, we will continue to take the following measures:
(i) diversifying our brand portfolio to reduce the reliance on individual or several brands
through, among others, initiating cooperation with more new brands with growth potential; (ii)
maintaining mutually beneficial relationships with our existing brand licensors; and (iii)
further seeking new cooperation approaches with brand licensors that can cultivate more stable
and resilient business relationships, such as joint venture and obtaining licenses with longer
periods.
BUSINESS
– 255 –


--- page 266 ---
Expiry Schedule of Our Licenses and Sub-licenses for the Top 10 Brands in Our Portfolio for
the Year Ended March 31, 2025
The table below sets forth the expiry schedule from March 31, 2025 onwards of our
licenses and sub-licenses for the top 10 external brands in our portfolio in terms of sales
revenue for the year ended March 31, 2025:
Number of
Major Brands (1)
Within one year (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182
One to three years (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184
Three to five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183
More than five years (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810
Notes:
(1) The expiry dates of the licenses and sub-licenses are based on (a) the expiry dates of the agreements with
the brand licensors; or (b) in the event that there were only effective authorization letters for such
licenses or sub-licenses, the expiry dates of such authorizations.
(2) Including one brand for which our agreement with the brand licensor shall be tacitly renewed from year
to year, unless one of the parties delivers a prior written termination notice before the end of the
contractual year. The current contractual year for it shall expire within one year.
(3) On May 22, 2025, a sale and purchase agreement was entered into between, among others, Eternal BVI
and the holding company of the brand licensor of one of top 10 external brands in terms of sales revenue
for the year ended March 31, 2025, pursuant to which Eternal BVI agreed to dispose of, and the said
holding company agreed to acquire, 100% issued share capital of E&C Holdings, which was our
subsidiary that held the distribution license for such brand before the Disposal. Upon completion of the
Disposal on May 30, 2025, we no longer held such license for this brand or otherwise be entitled to
distribute its products in China (including Hong Kong and Macau). However, upon completion of the
Disposal, our Group is expected to provide operational services to E&C Holdings and its subsidiary in
connection with their distribution of the products of the brand licensor, and charge E&C Holdings and
its subsidiary for such services pursuant to separate services agreements entered into between us, on the
one hand, and each of E&C Holdings and its subsidiary, on the other hand. For details of the Disposal,
please refer to “History, Development and Corporate Structure — Major Acquisitions, Disposals and
Mergers — Disposal of E&C Holdings and its Subsidiaries” in this prospectus. The license for this
brand, which was still effective as of March 31, 2025, would have expired in December 2026 if not for
the occurrence of the Disposal.
(4) The term of agreement for this brand had no termination date.
BUSINESS
– 256 –


--- page 267 ---
Contracts with Brand Licensors
In general, depending on the practice of each individual brand licensor, we may enter into
a distribution agreement with such brand licensor, and/or it may issue an authorization letter
to us, to appoint us as a distributor with the rights to promote and distribute the specified
branded products in the designated region(s) through designated sales channels, and to deal
with all matters relevant thereto. The distribution agreements and authorization letters have the
same binding legal effect on the parties thereto in that they both grant the relevant licenses or
sub-licenses to the licensee, but distribution agreements are more formal and contain other
standard terms and conditions. The key terms of distribution agreements and authorization
letters do not differentiate based on whether they were entered into with or granted by brand
owners or primary licensees, except that the authorization letters for the brands which were
sub-licensed by the primary licensees to us were generally signed by both the primary licensees
and their brand owners during the Track Record Period.
The distribution agreements we entered into with brand licensors during the Track Record
Period typically contained the following key terms:
 Term of the distribution rights : In general, the distribution agreements are initially
valid and effective for three to five years, or an undetermined period of time until
terminated by either the brand licensors or us through advance notice.
 Renewal : If the distribution agreements provided an initial term, prior to their
expiry, they may be renewed through negotiation between the brand licensors and
us. Some of the distribution agreements are automatically renewed upon expiry,
unless terminated prior to the expiry according to relevant provisions under the
distribution agreements.
 Distribution territories and exclusivity : We are generally authorized by the brand
licensors to distribute specified products in mainland China, Hong Kong and/or
Macau through specified sales channels. A significant number of the brand licensors
appoint us as their exclusive distributor in the relevant territories, precluding the
brand licensors from directly or indirectly selling specified products through the
same sales channels in the same region.
 Products to be distributed : The products which we are authorized to distribute are
specified in the distribution agreements.
 Pricing strategy and price adjustment : The recommended retail prices of the
products sold by us are generally determined based on the discussions we have with
the relevant brand licensors. The sale prices at which the brand licensors sell the
products to us are determined by taking into consideration, among others, the
recommended retail prices and our anticipated profit margin. Some of the brand
licensors are granted the right to adjust the recommended retail prices of the
products by prior notification to us in limited circumstances. In general, orders
placed by us prior to the notification of the brand licensors shall be processed at the
terms and prices before such change.
BUSINESS
– 257 –


--- page 268 ---
 Sales channels and requirements on the selection of distributors : The distribution
agreements may provide that we may distribute the products of the brand licensors
only through certain types of sales channels/distributors or specified sales
channels/distributors. In the event that we infringe such distributor selection criteria,
some of the distribution agreements will entitle the brand licensor to terminate the
distribution agreement by notice.
 Minimum purchase amount and sales target : The distribution agreements may
contain provisions as to (i) the minimum amounts of purchase by our Group from
the brand licensors within a specific period; and/or (ii) the minimum sales amount
that our Group shall sell to customers within a specific period. In the event that we
fail to meet the minimum purchase amounts or the minimum sales target, some of
the distribution agreements provide that the brand licensors are entitled to terminate
the distribution agreement by notice.
 Payment : The distribution agreements usually stipulate credit terms, payment
currency and payment method. Our credit terms are generally 60 to 120 days from
the date of invoice or delivery. Where the credit term, payment currency and/or
payment method have not been stated in the distribution agreements, they may be
specified by the brand licensors in the invoices or otherwise agreed between the
brand licensors and us from time to time.
 Termination : The distribution agreements may be terminated by the brand licensors
by prior written notice. In addition, in the event of insolvency of or material breach
by one party, the other party is generally entitled to terminate the distribution
agreements prematurely with or without notice. Some of the distribution agreements
also grant brand licensors the right to terminate the distribution agreements if,
among others, we carry out advertising activities in a way against the requirements
under the distribution agreements, or we actively sell the products outside the
designated territories. If the brand licensors are primary licensees, the distribution
agreements typically contain clauses to specify that, in the event that their primary
licenses obtained from the relevant brand owners were terminated, our agreements
with such brand licensors shall be terminated correspondingly, or partially
terminated in connection with the affected primary licenses where such primary
licenses for a number of the brands under the distribution agreements were
terminated.
BUSINESS
– 258 –


--- page 269 ---
The authorization letters issued by the brand licensors generally serve as the
confirmations that such brand licensors granted us the authorization to distribute the relevant
products in the specified territories, and that they have the rights (either as a result of their
ownership as the brand owners or obtained from the relevant brand owners if they are primary
licensees) to grant us such authorization. They are typically valid for at least one year. The
authorization letters from brand licensors shall also be signed by the brand owners if the
relevant brand licensors are the primary licensees. The authorization letters typically contain
the key terms of the authorization, including the period of authorization, the types of products
that we are authorized to distribute, the designated distribution territory and the certification
that the brand licensors have the rights to grant us such authorization. During the Track Record
Period, (i) we maintained both distribution agreements with and authorization letters from most
of our brand licensors; and (ii) we only maintained authorization letters from a few remaining
brand licensors without valid distribution agreements. These arrangements are the results of
our negotiations with the brand licensors and their preferences or their internal decisions.
In the event we expect that we may fail to satisfy the terms and conditions under the
relevant agreements with the brand licensors, such as minimum purchase amounts and sales
targets, we shall negotiate with the relevant brand licensors to reach new arrangements or
understanding on such terms and conditions. During the Track Record Period and up to the
Latest Practicable Date, we were not penalized by any of our brand licensors for failing to
satisfy the terms and conditions under our agreements or other forms of authorization with
them.
During the Track Record Period, we also entered into agreements establishing joint
ventures with the brand licensors of two brands for the distribution of the relevant branded
products. The key terms are summarized as follows:
 Control over joint venture : The joint venture shall be either jointly controlled by our
Group and the brand licensor, or solely controlled by our Group with an option for
the brand licensor to assume control.
 Board : The directors of the joint venture shall be appointed by our Group and the
brand licensor. Typically there are four to five directors and we are generally entitled
to appoint 40% to 50% of the directors.
 Governance and management : The board of directors of the joint venture shall
handle its day-to-day management, or our Group shall provide management team to
the joint venture and/or its subsidiaries with brand licensor’s participation and/or
supervision over certain matters.
 Distribution territories and exclusivity : The joint venture is generally authorized by
the brand licensors to distribute specified products in mainland China, Hong Kong
and/or Macau through specified online and/or offline sales channels as the exclusive
distributor.
 Others : We shall provide resource (such as loans) to the joint venture and/or its
subsidiaries to support its business operation on an as-needed basis.
BUSINESS
– 259 –


--- page 270 ---
Selection Criteria for Suppliers
We seek to identify, source and offer products under reputable international brands with
high potential that are in alignment with our growth and development strategies. During the
Track Record Period, we primarily procured high-quality perfumes, skincare products, color
cosmetics, personal care products, eyewear and home fragrances and from global brand
licensors.
Our Directors confirm that we did not encounter any major difficulties in finding suitable
suppliers of products during the Track Record Period. Further, we did not have disputes with
any suppliers that would have had a material adverse impact on our business, financial
condition or results of operations during the Track Record Period and up to the Latest
Practicable Date.
To minimize the risks associated with the potential shortage of supplies from the brand
licensors, our sales teams monitor the supplies of products and timely update the sales plans
to accommodate the demands of customers in the event that any possible shortage or delay of
supplies occurs. During the Track Record Period, we had not experienced any material shortage
or delay of supply.
OVERLAPPING OF CUSTOMERS AND SUPPLIERS
To the best knowledge and belief of our Directors, for the years ended March 31, 2023,
2024 and 2025, we sourced certain services from four, four and three, respectively, of our five
largest customers in each year during the Track Record Period who were also our suppliers
during the Track Record Period. In addition, for the same periods, we sold products or provided
services to two, nil and nil, respectively, of our five largest suppliers in each year during the
Track Record Period who were also our customers during the Track Record Period. As
confirmed by our Directors, (i) negotiations of the terms of our sales to and purchases from the
overlapping customers and suppliers were conducted on an individual basis and the sales and
purchases were neither inter-connected with nor inter-conditional upon each other; and (ii) the
major terms of transactions with these overlapping customers and suppliers were similar to
those with our other customers and suppliers and were in line with normal commercial terms.
For the years ended March 31, 2023, we sold certain amount of perfumes that were previously
procured from Supplier A, which was one of our top five suppliers for the year ended March
31, 2023, to a subsidiary of Supplier A in mainland China. For the years ended March 31, 2023,
the revenue generated from these sales amounted to RMB4.0 million. We sold perfumes back
to the subsidiary of Supplier A because it was located in mainland China, and our exclusive
licenses to sell and distribute the relevant perfumes in mainland China precluded Supplier A
itself from selling these perfumes in the relevant territories, even to its own subsidiaries.
Except for Supplier A, during the Track Record Period, the products we purchased from the
overlapping customers and suppliers were not sold back to them, or vice versa . During the
Track Record Period, the products we sold to these overlapping customers and suppliers
primarily included perfumes, color cosmetics and skincare products, while these overlapping
customers and suppliers mainly provided marketing and promotional services and/or logistics
and warehousing services to us.
BUSINESS
– 260 –


--- page 271 ---
We have these overlapping customers and suppliers primarily because (i) when we
conduct marketing and promotional activities at the POSs of certain retailer customers, they
may provide relevant services to us to facilitate our activities, for which they may charge us
marketing and promotional service fees; (ii) one of our major customers is a group company
with various subsidiaries covering multiple business segments, including logistics and
warehousing services, which were provided to us during the Track Record Period; and (iii) we
provided marketing and promotional services to certain of our major suppliers during the Track
Record Period.
The table below sets forth the revenue and purchases attributable to these overlapping
customers and suppliers during the Track Record Period:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000
%o f
total RMB’000
%o f
total RMB’000
%o f
total
Top five customers which were also our suppliers
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118304,276 17.9 304,499 16.3 410,133 19.7
— Sales of products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118304,276 17.9 304,499 16.3 410,133 19.7
Purchase /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,634 3.2 26,781 2.8 36,294 3.3
— Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288 * – – – –
— Marketing and promotion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,084 2.5 23,744 2.5 30,917 2.8
— Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,262 0.6 3,037 0.3 5,377 0.5
Top five suppliers which were also our customers
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,683 1.0 – – – –
— Sales of products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,991 0.2 – – – –
— Provision of services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,692 0.8 – – – –
Purchase /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118195,972 23.6 – – – –
— Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118195,081 23.5 – – – –
— Marketing and promotion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118891 0.1 – – – –
Notes:
* Less than 0.1.
(1) Others primarily include warehousing and logistics services.
BUSINESS
– 261 –


--- page 272 ---
INFORMATION TECHNOLOGY SYSTEM
Digital Strategy
Digital Marketing Team
We believe mainland China is a key social media market in the world, and it varies
considerably from the rest of the world. To actively engage with and manage mainland China’s
social media market in the promotion of our products, we have formed a digital marketing team
consisting of 70 to 80 staff members as of March 31, 2025. The digital marketing team is
primarily responsible for utilizing digital resources and the market data we collected through
our e-Hub to, among others, analyze the market trends, make plans on key promotional
activities for brands, explore the selling points of products, design and implement the
marketing schedules and coordinate our media resources. The digital marketing team also
liaises with our other departments and teams to conduct marketing activities.
Our digital marketing team made large contributions to our marketing success in the
digital age. For instance, in 2023, when we were promoting V ersace perfumes, our digital
marketing team analyzed the female market for perfumes based on the data collected from
e-commerce platforms and social media platforms. It discovered the selling point of unisex
fragrances in the female perfumes market. The team thus designed a bespoke marketing plan
for V ersace’s perfume products that were expected to be launched, which revolves around
building their images to be unisex fragrances. Our digital marketing team then implemented
this marketing plan through, among others, initiating cooperation with the suitable KOLs who
are ideal for building such product image. Our digital marketing team also continuously
monitors the discussion on the internet with respect to the brands and products that we are
promoting and selling, and make arrangements to guide the discussion to the direction that we
desire and expand the discussion to reach more netizens, thereby continuously driving
purchases of consumers.
Big Data Analytics
We have incorporated big data analytics in various aspects of our operations. We
established our e-Hub, which is an integrated big data analytics team collecting and analyzing
market data, including, among others, statistical data derived from sales data and trend of
product development data. In terms of customer-related and personal data collected by e-Hub,
we obtain (i) industry sales data on the sales trend of particular categories of products, which
are statistical data in nature and does not on its own qualify as “personal information” within
the meaning of Personal Information Protection Law; and (ii) proprietary sales and purchase
records of our consumers in our direct sales channels. We obtain consent from consumers who
join our membership clubs with regard to our collection and analysis of their personal data
through their agreeing to the privacy policy of the membership clubs. We do not analyze or
have access to the personal data of end consumers of our retailer and distributor customers. As
advised by our PRC Data Compliance Advisor, we have obtained appropriate legal basis, such
as consent, from our consumers in accordance with the applicable laws and regulations on data
BUSINESS
– 262 –


--- page 273 ---
privacy. Our e-Hub have helped us gain insights to new opportunities in the market, potential
of brands and products and our consumers’ behavioral pattern. We rely on the e-Hub to
formulate the business development and expansion plans for the brands in our brand portfolio.
It allowed us to pinpoint the marketing strategies and sales and distribution channels in China
(including Hong Kong and Macau) that would unlock the potential of the brands in our brand
portfolio. We believe big data analytics can also help improve the services and products that
we provide to our customers, analyze and ascertain changes in consumer trends, tastes and
preferences, as well as conducting both targeted and general marketing campaigns and timely
assessment of market trends, among other things.
In the future, we expect to rely on our e-Hub to explore more investment and acquisition
opportunities in align with our development strategies.
Cybersecurity and Customer Privacy Protection
We take cybersecurity matters seriously and are committed to safeguarding the privacy of
our customers and their personal information. We safeguard our information technology
system, which covers cybersecurity, data security and terminal security, using various
technologies including encryption, anti-virus software and firewall. We continuously upgrade
such technologies to enhance our information security management and implement strict
measures to protect and secure confidentiality of customer/membership data. For example, we
restrict access to customer/membership data to selected authorized staff who are provided with
the relevant password. During the Track Record Period and up to the Latest Practicable Date,
we did not experience any failure or breakdown of our information technology systems which
resulted in a material adverse impact on our overall business operations.
Additionally, we have implemented certain policies and rules on customer data
protection, such as operation standards for management of customers’ information documents
and operation standards for the management of computers and software. We have taken
necessary measures such as promulgating rules on internal personal information protection
among our employees to prevent the leakage of the customer data, and we have provided
training to our employees to ensure they are aware of our internal policies in relation to
customer data protection. During the Track Record Period and up to the Latest Practicable
Date, we did not encounter any material customer data privacy breaches, leakages or disputes.
Our business operations involve the collection, use, storage, retention, transfer, disclosure
and other processing of personal data. Our customers contact with us primarily via the
following channels: (i) self-operated online stores on e-commerce platforms where we have a
business presence; (ii) online WeChat mini-programs for membership clubs, WeChat official
accounts and our official websites; and (iii) self-operated offline stores/counters, where
customers are guided back into respective membership clubs.
With prior consent from our consumers or other applicable legal basis, we primarily
collect the following types of consumer data: contact information, delivery addresses and
purchase records. We collect their payment information as part of purchase records to complete
BUSINESS
– 263 –


--- page 274 ---
the transactions when the consumers make purchases and provide membership loyalty benefits
to them. The data collected from consumers will be securely stored and logically separated by
brand in our CRM system that will help us gather consumer intelligence, guide consumer
preferences and make timely assessments of market trends. Before we analyze the consumer
data, our designated staff will limit the access to such information on a must-know basis.
We collect and maintain consumers’ personal information in accordance with the relevant
laws and regulations on data privacy and security in mainland China. We have taken measures
to maintain the confidentiality of such information to ensure regulatory compliance.
Specifically, we have formulated a series of internal rules on personal information protection,
which stipulates our obligations to clearly inform the consumer of the purpose, method, and
scope of the information collection and use, and the channels for exercising their rights such
as correction of information, deletion of information, etc., among other things, when collecting
and using consumer personal information. We also formulated implementing documentations
on personal information protection, such as those on data classification and personal
information protection impact assessment.
As advised by our PRC Data Compliance Advisor, Beijing Jingtian & Gongcheng Law
Firm, we had complied with the applicable PRC laws and regulations with respect to data
security and privacy protection during the Track Record Period and up to the Latest Practicable
Date in all material aspects. During the Track Record Period and up to the Latest Practicable
Date, we did not experience any material data leakage or data loss, nor did we experience any
material unauthorized use of consumer’s personal information.
To address the concerns brought by the recently promulgated laws and regulations on data
privacy and security, we are taking a more prudent approach in business operation and can
reduce our risk of exposure related to the implementation of these laws and regulations to a
certain extent by the following measures:
 Paying close attention to the latest trends in regulatory development and maintain
continuous communication with the relevant regulatory authorities;
 Enhancing and improving the data processing activities in accordance with the latest
regulatory requirements;
 Continuously adopting security measures and internal control system to protect the
customer data from the risks of data leakage, theft and destruction and illegal
control, and make advanced preparations in light of the regulatory development;
 Training the staff who often directly interact with consumers to keep them abreast
of the latest requirements for data privacy and security;
 Further improving the user agreement and privacy policy and other legal documents
related to the collection and use of personal information;
BUSINESS
– 264 –


--- page 275 ---
 Continuously improving cybersecurity awareness in our future network
development and deployment; and
 Conducting the applicable personal information protection impact assessment and
other relevant assessments and make applicable regulatory filings to address
security issues/concerns in data processing activities.
As of the Latest Practicable Date, we have not received any cybersecurity, data security
or personal data protection related enquiries from any competent PRC regulatory authorities.
On May 20, 2024, we made formal consultation (the “CCRC Formal Consultation”) in respect
of the proposed Listing with China Cybersecurity Review, Certification and Market Regulation
Big Data Center (Ⴉᗇձ̹ఙ္၍ɽᅰኽʕː) (the “CCRC”), which is
responsible for receiving application materials and initial consultation for cybersecurity review
under the authority of the Cyberspace Administration of China on the applicability of
cybersecurity review. After learning our business operations and the proposed Listing in Hong
Kong, the officer in CCRC indicated that we would not be required to apply for a cybersecurity
review pursuant to Article 7 of the Cybersecurity Review Measures ().
As advised by our PRC Data Compliance Advisor, we had complied with the applicable
PRC laws and regulations with respect to cybersecurity during the Track Record Period and up
to the Latest Practicable Date in all material aspects. During the CCRC Formal Consultation,
the officer in CCRC concurred with us that, given that our main business was the sales and
distribution of cosmetics and personal care products, our data processing activities would not
affect national security, and hence we would not be subject to cybersecurity review pursuant
to Article 2 of the Cybersecurity Review Measures. Further, our PRC Data Compliance Advisor
is of the view that, given that (i) our business operations do not involve the processing of
important data or core data; and (ii) none of the entities of our Group has been notified and
designated as operator of critical information infrastructure, the Cybersecurity Law of the PRC
() would not have a material adverse impact on our Group’s
business operations in mainland China or the proposed Listing in Hong Kong. Our PRC Data
Compliance Advisor is also of the view that our Group’s business operations or the proposed
Listing in Hong Kong will not give rise to national security risks pursuant to the Cybersecurity
Law of the PRC. Given that legislation and law enforcement in the PRC on data privacy and
cybersecurity are still evolving, we will closely monitor further regulatory developments and
take appropriate measures in a timely manner.
In addition, as advised by our HK Legal Counsel and our Macau Legal Advisor, we have
also in all material respects complied with all applicable laws and regulations in respect of data
privacy and personal data protection in Hong Kong and Macau, respectively, during the Track
Record Period and up to the Latest Practicable Date. As such, our Directors are of the view that
we have complied with all applicable laws and regulations in respect to data privacy and
personal data protection in China (including Hong Kong and Macau) in all material aspects.
BUSINESS
– 265 –


--- page 276 ---
TRANSFER PRICING ARRANGEMENT
During the Track Record Period, there were a number of intra-group related party
transactions within our Group, which primarily included the following:
 Guangzhou Huisheng Trading purchased certain finished products from Eternal Far
East, who purchased from our overseas suppliers, and sold the same to several of our
PRC subsidiaries, including Eternal Shanghai Cosmetics, Eternal Beijing Trading,
Eternal Guangzhou Trading, Eternal Chengdu Trading and E&C Shanghai, which
made the onward sales of the same products to our Independent Third-party
customers. These products primarily included perfumes, skincare products and color
cosmetics.
 Guangzhou Consulting purchased certain perfumes from Independent Third-party
vendors, and sold the same to several of our PRC subsidiaries, which made the
onward sales of the same products to our Independent Third-party customers.
 In addition, the related party service transactions also occurred among various
members of our Group. During the Track Record Period, Eternal Shanghai
Cosmetics provided sales and marketing support services to Eternal Far East and
several of our other PRC subsidiaries.
Among these intra-group related party transactions, there were a number of cross-border
intra-group transactions for services and tangible goods during the Track Record Period. The
following diagram sets forth the transaction flow of such cross-border intra-group transactions
during the Track Record Period:
Eternal Far East(1)
Eternal Shanghai
Cosmetics
Guangzhou
Huisheng Trading
Eternal Beijing
Trading
Eternal Guangzhou
Trading
Eternal Chengdu
Trading
E&C Shanghai
E&C Trading(2)
CustomersTransfer of
products
Transfer of
products
Transfer of
products
Transfer of products
(Since May 2024)
Transfer of products
(Before May 2024)
Provision of
services
Notes:
BUSINESS
– 266 –


--- page 277 ---
(1) Eternal Far East, our Hong Kong subsidiary and the principal entity within our Group from the transfer
pricing perspective, formulated the overall strategies for these transactions. Under these strategies,
Shanghai Smiley engaged a third-party manufacturer in mainland China to develop and supply the
finished products to it. These finished products were then sold by Shanghai Smiley to third party
customers, as well as Eternal Shanghai Cosmetics and Eternal Beijing Trading for their resale.
(2) Since May 2024, E&C Trading purchased certain finished products from overseas suppliers and sold the
same to E&C Shanghai, which made onward sales of the same products to our Independent Third-party
customers.
As demonstrated in the diagram above, Eternal Far East, our Hong Kong subsidiary, sells
products to Guangzhou Huisheng Trading, our subsidiary in mainland China, which further
sells them to Eternal Shanghai Cosmetics, Eternal Beijing Trading, Eternal Guangzhou Trading
and Eternal Chengdu Trading and E&C Shanghai (collectively, the “Sales Companies”) in
mainland China for further sales and distribution to our customers. Both the prices between
Eternal Far East and Guangzhou Huisheng Trading, and those between Guangzhou Huisheng
Trading and the Sales Companies are calculated on a cost-plus basis (i.e., the cost of the
products plus a margin). Since May 2024, E&C Trading has been selling products to E&C
Shanghai for further sales and distribution activities. E&C Trading’s selling prices were
calculated on a cost-plus basis.
In 2023, we engaged the Independent Transfer Pricing Consultant to review the
implementation of our transfer pricing arrangements and provide advices on optimizing the
transfer pricing arrangements of the Group accordingly. As a result of the review and advices
by the Independent Transfer Pricing Consultant, if the target Earnings Before Interest and
Taxes (the “EBIT”) margin (namely, 2.0%), which is calculated as the EBIT divided by the
revenue, cannot be achieved by the Sales Companies, Eternal Far East, as the principal entity
within our Group, will compensate the Sales Companies through transfer pricing adjustment
(the “TPA”), which enables the EBIT margins of the Sales Companies to meet the target. The
TPA approach is also applied to Shanghai Smiley, which will be compensated to reach the
target EBIT return. The table below sets forth the breakdown of the transaction amounts of our
cross-border related-party transactions by transaction types during the Track Record Period:
Transaction Type Transaction Amount
(HKD)
Y ear ended March 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118Sales of products 333,792,386
Related party services 83,005,703
Y ear ended March 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118Sales of products 348,694,400
Related party services 119,039,105
TPA 212,603,379
Y ear ended March 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118Sales of products 339,838,096
Related party services 238,562,136
TPA 236,346,121
BUSINESS
– 267 –


--- page 278 ---
The Independent Transfer Pricing Consultant was engaged by us to prepare the transfer
pricing contemporaneous documentation local files or transfer pricing analysis reports
(collectively, the “TP Reports”) for Eternal Far East, Guangzhou Huisheng Trading, Eternal
Shanghai Cosmetics, Eternal Beijing Trading, Eternal Chengdu Trading, Eternal Guangzhou
Trading, Shanghai Smiley and E&C Shanghai with respect to the TPA conducted for the
relevant PRC subsidiaries during Track Record Period based on, among other things, the
applicable regulations and guidance on transfer pricing. The PRC subsidiaries of our Group for
which the TP Reports were prepared, namely, Guangzhou Huisheng Trading, Eternal Shanghai
Cosmetics, Eternal Beijing Trading, Eternal Chengdu Trading, Eternal Guangzhou Trading,
Shanghai Smiley and E&C Shanghai, are collectively referred to hereinafter as the “Tested
Parties”.
Under the TP Reports, the Independent Transfer Pricing Consultant characterized the
Tested Parties based on the functions performed, risks assumed, and assets owned by the Tested
Parties. The Independent Transfer Pricing Consultant then performed the economic analysis to
assess the profit level of the Tested Parties based on such categorization. To evaluate the profit
level of the Tested Parties in the TP Reports, the Independent Transfer Pricing Consultant was
of the view that the transactional net margin method (the “TNMM”) is the most appropriate
transfer pricing method to review the reasonableness of the margin of the Tested Parties, and
performed transfer pricing benchmarking studies. Under the TNMM, searches for comparable
uncontrolled companies engaging in the same or similar functions as those of the Tested Parties
in our Group have been performed for the purpose of the TP Reports. The Independent Transfer
Pricing Consultant analyzed the financial data of these comparable uncontrolled companies,
and formulated a margin range that complies with the arm’s length principle.
The table below summarizes the weighted average of the EBIT margin of the relevant
comparable uncontrolled companies for the periods indicated with the arm’s length principle:
2018 – 2020 2019 – 2021 2020 – 2022 2021 – 2023
Number of comparable
uncontrolled companies /H1118/H1118/H1118 10 9 11 13
Weighted average of EBIT
margin — Lower quartile /H1118/H1118 0.91% 0.76% 1.22% 0.83%
Weighted average of EBIT
margin — Median /H1118/H1118/H1118/H1118/H1118/H1118/H11181.35% 1.39% 1.78% 1.38%
Weighted average of EBIT
margin — Upper quartile /H1118/H1118 2.61% 2.51% 3.87% 2.93%
The table below summarizes the EBIT margin of each of the Tested Parties in mainland
China for the periods indicated:
BUSINESS
– 268 –


--- page 279 ---
Tested Parties Period
EBIT
Margin
Guangzhou Huisheng Trading /H1118Weighted average from the year ended
December 31, 2021 to the year ended
December 31, 2023
1.37%
(1)
Weighted average from January 1, 2024
to September 30, 2024
0.87% (1)
Weighted average from October 1, 2024
to March 31, 2025
2.50%
Eternal Shanghai Cosmetics /H1118/H1118/H1118Weighted average from the year ended
December 31, 2021 to the year ended
December 31, 2023
2.00%
Weighted average from January 1, 2024
to September 30, 2024
2.00%
Weighted average from October 1, 2024
to March 31, 2025
2.00%
Eternal Beijing Trading /H1118/H1118/H1118/H1118/H1118/H1118Weighted average from the year ended
December 31, 2021 to the year ended
December 31, 2023
2.46%
Weighted average from January 1, 2024
to September 30, 2024
2.00%
Weighted average from October 1, 2024
to March 31, 2025
2.00%
Eternal Guangzhou Trading /H1118/H1118/H1118Weighted average from the year ended
December 31, 2021 to the year ended
December 31, 2023
2.00%
Weighted average from January 1, 2024
to September 30, 2024
2.00%
Weighted average from October 1, 2024
to March 31, 2025
2.00%
BUSINESS
– 269 –


--- page 280 ---
Tested Parties Period
EBIT
Margin
Eternal Chengdu Trading /H1118/H1118/H1118/H1118/H1118Weighted average from the year ended
December 31, 2021 to the year ended
December 31, 2023
2.00%
Weighted average from January 1, 2024
to September 30, 2024
2.00%
Weighted average from October 1, 2024
to March 31, 2025
2.00%
Shanghai Smiley /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Weighted average from the year ended
December 31, 2021 to the year ended
December 31, 2023
2.81%
Weighted average from January 1, 2024
to September 30, 2024
N/A
(2)
Weighted average from October 1, 2024
to March 31, 2025
N/A(2)
E&C Shanghai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Weighted average from January 1, 2022
to September 30, 2024
2.00%
Weighted average from October 1, 2024
to December 31, 2024
2.00%
Notes:
(1) The EBIT margin for transfer pricing analysis purposes was extracted from the TP Reports.
(2) Shanghai Smiley was not active in business operation from January 1, 2024 to March 31, 2025 and thus,
was not involved in the TPA during this period.
According to the TP Reports, the weighted average of the EBIT margin of the Tested
Parties during the Track Record Period as indicated in the table above are within the
interquartile range derived from the benchmarking studies. In addition, the Independent
Transfer pricing Consultant performed, among others, industry analysis and value chain
analysis, to evaluate the arm’s length nature of the related party transactions of the Tested
Parties.
BUSINESS
– 270 –


--- page 281 ---
Based on the TP Reports prepared by the Independent Transfer Pricing Consultant, it was
advised that the intra-group transactions for the Tested Parties and Eternal Far East were
appropriate, in arm’s length and complied with the applicable transfer pricing laws and
regulations in mainland China and Hong Kong.
In preparing the TP Reports, the Independent Transfer Pricing Consultant primarily
referred to the following laws and regulations:
 Mainland China : (i) Public Notice on Matters Regarding Refining the Filing of
Related Party Transactions and Administration of Contemporaneous
Transfer Pricing Documentation (ʮ
ѓ) promulgated by the SA T in 2016; and (ii) Public Notice of the State
Administration of Taxation on Issuing the “Administrative Measures of Special Tax
Investigation and Adjustment and Mutual Agreement Procedure” (ݟ
ʮѓ) promulgated by SA T in 2017.
 Hong Kong : (i) the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong
Kong); (ii) Inland Revenue (Amendment) (No. 6) Ordinance 2018; and (iii)
Departmental Interpretation and Practice Notes — No. 58 published by the Inland
Revenue Department of Hong Kong.
Based on the applicable laws and regulations, we have no obligation to notify the relevant
tax authorities on the transfer pricing arrangement in mainland China or Hong Kong. As of the
Latest Practicable Date, we did not receive enquiry or investigation on our transfer pricing
arrangements from any tax authorities.
To manage the transfer pricing risk on an ongoing basis, measures will be adopted by our
Company on or before the Listing (i) to keep track of regulatory updates to ensure that our
Group is complying with those transfer pricing rules and regulations; (ii) to review the transfer
pricing arrangement regularly with reference to the latest benchmarking data; (iii) to document
all relevant information properly to support the reasonableness and appropriateness of the
transfer pricing arrangement; and (iv) to revisit transfer pricing arrangement if necessary (e.g.
when there are any significant changes in the functional and risk profiles of corresponding
entities).
Our Directors confirmed that they will continue to closely monitor the pricing
arrangement for our intra-group transactions, including reviewing and ensuring the
reasonableness and fairness of the pricing policy.
BUSINESS
– 271 –


--- page 282 ---
Based on discussion with the Independent Transfer Pricing Consultant and our Directors
and review of the abovementioned internal control procedures of our Group to manage transfer
pricing risks and ensure ongoing compliance, and having considered that (i) our Group did not
receive any enquiry or investigation on our transfer pricing arrangements from any tax
authorities during the Track Record Period and up to the Latest Practicable Date; and (ii) the
Independent Transfer Pricing Consultant’s view that the intra-group transactions for the Tested
Parties were appropriate, in arm’s length and complied with the applicable transfer pricing laws
and regulations in mainland China and Hong Kong, nothing has come to the attention of the
Joint Sponsors that such measures on transfer pricing are insufficient in any material respect.
QUALITY CONTROL
We have a set of quality control measures for selecting suppliers and products to confirm
the products sourced by us are of high quality, safe and suitable for consumption or use, and
will fully comply with the relevant local laws and regulations. Our quality control measures
can be described as follows:
(i) Our supply chain team checks the quality of the products upon delivery of products
from suppliers, and arrange returns or exchanges for the defective products;
(ii) We review the purchase prices and overall product quality standards periodically;
and
(iii) All of our procurement plans will be reviewed by multiple teams responsible for,
among others, supply chain management and finance, and finally approved by our
chief operating officer for subsequent execution.
EMPLOYEES
As of March 31, 2025, we had a total of 1,133 employees, among whom, 80 had obtained
a master’s degree or above. As of the same date, 800 of our employees were located in
mainland China and the remaining 333 were located in Hong Kong and Macau. The table below
sets forth a breakdown of our employees by function as of March 31, 2025.
Function
Number of
Employees % of Total
Sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695 61.3%
Management and administration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118146 12.9%
Supply chain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899 8.7%
Brand team /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889 7.9%
Marketing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876 6.7%
Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 2.5%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,133 100.0%
BUSINESS
– 272 –


--- page 283 ---
We believe that our success depends in part on our ability to attract, recruit and retain
quality employees. We aim to establish a collaborative work environment that encourages them
to develop their career with us. In addition, we have an effective training system, including
orientation and continuous on-the-job training, to accelerate the learning progress and improve
the knowledge and skill levels of our workforce, including our beauty advisors whose
knowledge and understanding of the brands and products they represent are crucial for the
attraction of new customers and the maintenance of existing customer relationships. Our
orientation process covers subjects such as corporate culture and policies. Our periodic
on-the-job training covers work ethics, environmental, health and safety management systems
and mandatory training required by applicable laws and regulations.
To sustain our growth, we regularly review our capabilities and adjust our workforce to
ensure we have the right mix of expertise to meet the demand for the products we sell. We offer
employees competitive salaries, and performance-based cash bonuses. We believe that our
reputation, work environment, training system, remuneration package and employee share
incentive plan are advantageous that attract qualified candidates. During the Track Record
Period, we adopted internet recruitment, social recruitment and internal referral by existing
employees, among other recruitment approaches. Our recruiting process primarily consists of
initial recruitment requests by the relevant teams and departments, the publication of
recruitment requirements in the job market, interviews with candidates, candidate background
research and recruitment approval by our management. When considering and selecting
qualified employment candidates, we take into consideration their education background, work
experience, relevant expertise and specific skills, as well as the demand for and the objectives
of the vacant positions.
As required by the applicable laws and regulations, we participate in various employee
social security plans for our employees that are administered by the local governments,
including housing, pension, medical insurance, maternity insurance and unemployment
insurance. Bonuses are generally discretionary and based in part on employee performance and
in part on the overall performance of our business. We have granted and plan to continue to
grant share-based incentive awards to our employees in the future to incentivize their
contributions to our growth and development.
Our employees have not formed any employee union or association. We believe we
maintain a cordial and fruitful working relationship with our employees, and we have not
experienced any material labor disputes during the Track Record Period.
BUSINESS
– 273 –


--- page 284 ---
INTELLECTUAL PROPERTY
Intellectual Property Rights Held by Our Group
Our intellectual property rights are key to our success and competitiveness, primarily
consisting of trademarks, patents, software copyrights, works copyrights and domain names,
including (i) 176 trademarks, including 166 trademarks registered in mainland China and 10
trademarks registered in Hong Kong; (ii) two patents registered in mainland China; (iii) one
software copyright registered in mainland China; (iv) three works copyrights registered in
mainland China; and (v) 23 domain names, including 13 domain names registered in mainland
China and 10 domain names registered in Hong Kong, as of the Latest Practicable Date. See
the section headed “Appendix IV — Statutory and General Information — C. Further
Information about Our Business — 2. Material intellectual property rights of our Group” in this
prospectus for more information of our intellectual properties.
We rely, in some circumstances, on trade secrets and/or confidential information to
protect certain aspects of the technologies we utilize. We seek to protect our proprietary
technologies and processes, in part, by entering into confidentiality arrangements with senior
management and key staff. Despite the measures we have taken to protect our intellectual
property, our proprietary information may be obtained by unauthorized parties.
During the Track Record Period and up to the Latest Practicable Date, we were not aware
of any material infringement of our intellectual properties or any material disputes or claims
against us in relation to the infringement of intellectual properties of third parties arising from
our business. Please see the section headed “Risk Factors — Risks Relating to Our Business
and Industry — We may be subject to infringement claims from third parties, and we may be
unable to protect our intellectual properties from unauthorized use, either of which could
reduce the value of the brands for which we conduct product distribution and market
deployment and harm our business and competitive market position” in this prospectus.
Intellectual Property Rights Licensed by Brand Licensors to Our Group
We are generally licensed by the brand licensors to use the brand names or trademarks of
such brand licensors, or in respect of the relevant products in connection with some of our sales
and marketing activities. Notwithstanding such license, our marketing plans, materials and
artwork in connection with the sales and marketing activities usually have to be approved by
our brand licensors.
BUSINESS
– 274 –


--- page 285 ---
PROPERTIES
As of March 31, 2025, we did not own any properties in mainland China, Hong Kong or
Macau. As of the same date, we leased 60 properties with a total GFA of approximately
12,181.73 sq.m., of which 53 properties were in mainland China with a total GFA of
approximately 7,670.35 sq.m., and seven properties were in Hong Kong with a total GFA of
approximately 4,511.38 sq.m. These leased properties are primarily used as warehouses,
offices and retail stores.
As of March 31, 2025, no single property interest that forms part of non-property
activities has a carrying amount of 15%, and no single property interest that forms part of
property activities has a carrying amount of 1%, of our total assets. Therefore, according to
Chapter 5 of the Listing Rules and section 6(2) of the Companies (Exemption of Companies
and Prospectuses from Compliance with Provisions) Notice (Cap. 32L of the Laws of Hong
Kong), this prospectus is exempted from compliance with the requirements of section
342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation
to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance which requires a valuation report with respect to all our Group’s
interests in land or buildings.
The lease registration and filing (ࣩin relation to 52 properties leased by us
in mainland China had not been completed as of March 31, 2025. These properties were used
by us as offices, warehouses and offline stores/counters. According to the Administrative
Measures for Commodity House Leasing (), the lessor and lessee
shall enter into a written lease contract and conduct lease registration and filing with the
competent local real estate administration department within 30 days from the date of the
leasing contract. Our failure to complete the lease registration and filing was mainly due to our
lessors being unwilling to cooperate with us to complete the lease registration and filing. Any
failure to register such lease agreements with the relevant Chinese government authorities does
not affect the validity of the lease agreements, but the relevant Chinese government authorities
may order us or the lessors to, within a prescribed time limit, register the lease agreements.
Failure to do so within the time limit may subject us to a fine ranging from RMB1,000 to
RMB10,000 for each non-registered lease. In the event we fail to register the lease agreements
according to the requirements of the relevant PRC government authorities, we may be subject
to a fine with the maximum amount of RMB520,000 as of March 31, 2025. As of March 31,
2025, we had not received any registration request from or become subject to any such fine
levied by the relevant government authorities. We will take all practicable and reasonable steps
to ensure that the relevant leases are registered and continue to communicate with such lessors
to seek their cooperation to complete the registration and filing process. To mitigate any future
recurrence of such non-compliance, we will enhance our internal supervision of compliance
with the applicable laws and regulations by appointing relevant personnel to supervise and
monitor our administrative staff with respect to such matters.
BUSINESS
– 275 –


--- page 286 ---
A W ARDS AND RECOGNITIONS
During the Track Record Period, we have received recognition for the quality and
popularity of the products we sell. Some of the significant awards and recognition we have
received are set forth below.
Award Y ear Award/Recognition
Awarding
Institution/Authority Entity
2020, 2021, 2022
and 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Caring Company
(ᗫᕿ
ᅺႦ)
The Hong Kong
Council of Social
Service
Our Group
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Honour Award –
2021 Outstanding
Caring Enterprise
(ෳॶᆤ–2021ܓ
௫̈ฌːΆุ)
The 4th Social
Responsibility
Conference ( ୋ̬
ึப΂ɽึ)
Our Group
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Company for Brand
Management of
the Y ear (ۜܓ
೐၍ଣʮ̡)
Beauty Inc Our Group
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 Y ears+ Caring
Company
The Hong Kong
Council of Social
Service
Our Group
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Hashtag Asia
Awards 2024 –
Best Social Media
Partnerships:
Celebrities
marketing-
interactive.com
Our Group
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182024 Innovation and
Practice Award for
the Intelligent
Commercial
Digitalization
(2024౽ᅆਠ
ุᅰ౽ʷ௴อྼስ
ᆤ)
China Commercial
Informatization
Industry
Conference ( ʕ਷
ʷБุɽ
ึ)
Our Group
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PR Awards Asia-
Pacific 2025 –
Corporate
Publications
Bronze Prize
Campaign Asia-
Pacific
Our Group
BUSINESS
– 276 –


--- page 287 ---
COMPETITION
According to Frost & Sullivan, we are the largest perfume group in China (including
Hong Kong and Macau) apart from brand-owner perfume groups in terms of retail sales in
2023, and the third largest perfume group in China (including Hong Kong and Macau) in terms
of the retail sales in 2023. During the Track Record Period, we primarily competed with
external brand owners (excluding the brand-owner perfume groups for which we conduct
product distribution and market deployment) and other non-brand-owner perfume groups that
sell products in China (including Hong Kong and Macau), as a majority of our revenue was
generated from the sales of perfumes. In particular, as the external brands of perfumes for
which we conduct product distribution and market deployment were primarily international
brands as of the Latest Practicable Date, we face competition from the Chinese domestic brands
of perfumes targeting similar consumer groups. These Chinese domestics brands have certain
competitive advantages, over us, including (i) ability to incorporate traditional Chinese culture
in their products, more natural ingredients, oriental-style scent profiles or other Chinese
features in the product design and characteristics that can satisfy the cultural identity demands
of the Chinese consumers; (ii) flexibility and a strong adaptability to Chinese market in digital
marketing, which allow them to quickly layout marketing initiatives on online platforms; and
(iii) more cost-effective pricing, which helps to attract price-sensitive consumers in China.
We believe by leveraging our advantages in the brand and product mix, market insights,
big data analytics capability, supply chain management and sales and distribution network, we
will increase our market shares and capture additional business opportunities in the future. We
believe that we are well-positioned to excel in the competition within our industry. However,
some of our current and potential competitors may enjoy several key competitive advantages
over us, including, but not limited to, better brand recognition, more financial resources, longer
operating history, broader product portfolio, wider distribution channels, larger customer base
and stronger relationship with brand licensors. We may not be able to effectively compete with
them. See the section headed “Risk Factors — Risks Relating to Our Business and Industry —
We operate in a highly competitive industry. If we fail to compete effectively, our business and
operating results could be adversely affected” in this prospectus for details.
BUSINESS
– 277 –


--- page 288 ---
SEASONALITY
Due to the nature of our business and the promotional festivals throughout the year in
every season, including, among others, Mother’s Day, V alentine’s Day, Chinese New Y ear,
Christmas, New Y ear, Singles’ Day (November 11) and 618 Shopping Day (June 18), among
others, our revenue recorded for each quarter does not demonstrate an obvious seasonality.
INSURANCE
As of the Latest Practicable Date, we maintained insurance in respect of our operation,
including, among others, fire insurance, cargo transportation insurance, public liability
insurance and property all risks insurance. We do not maintain product liability insurance. We
are required by social insurance laws and regulations in mainland China to make contributions
for social insurance funds for our employees. We also maintain relevant employees’
compensation and public liability insurances in Hong Kong and Macau.
We believe that our insurance coverage is in line with industry practice in China
(including Hong Kong and Macau), including with respect to the terms and coverage of the
insurance policies. However, there is no assurance that the insurance policies we maintain are
sufficient to cover all of our operational risks. For more information, please refer to “Risk
Factors — Risks Relating to Our Business and Industry — We have limited insurance coverage,
and any claims beyond our insurance coverage may result in us incurring substantial costs and
a diversion of resources” in this prospectus.
LICENSES, CERTIFICATES AND PERMITS
The following table sets out a list of material licenses and permits currently held by us
for our operations:
No. Entity Name of the License Issue Date
Expiry
Date (1)
1. /H1118/H1118/H1118/H1118Eternal Shanghai
Cosmetics
Class II Medical
Device Business
Record Certificate
(ୋɚᗳᔼᐕኜ૛຾
ኯᗇ)
July 6, 2021 –
2. /H1118/H1118/H1118/H1118Eternal China Trading Consignee or
Consignor of
Imported or
Exported Goods ( ආ
ϗ೯஬ɛ)
March 20,
2019
–
3. /H1118/H1118/H1118/H1118Eternal Shanghai
Trading
Consignee or
Consignor of
Imported or
Exported Goods
September 9,
2008
–
BUSINESS
– 278 –


--- page 289 ---
No. Entity Name of the License Issue Date
Expiry
Date (1)
4. /H1118/H1118/H1118/H1118Shanghai Eternal
Import and Export
Consignee or
Consignor of
Imported or
Exported Goods
March 26,
2024
–
5 /H1118/H1118/H1118/H1118/H1118Shanghai Eternal
Import and Export
Class II Medical
Device Business
Record Certificate
March 19,
2025
–
6 /H1118/H1118/H1118/H1118/H1118Eternal Shanghai
Cosmetic
Consignee or
Consignor of
Imported or
Exported Goods
December 4,
2019
–
7 /H1118/H1118/H1118/H1118/H1118Eternal Development Consignee or
Consignor of
Imported or
Exported Goods
March 22,
2024
–
8 /H1118/H1118/H1118/H1118/H1118Shanghai Eternal
Trading
Consignee or
Consignor of
Imported or
Exported Goods
March 25,
2024
–
9 /H1118/H1118/H1118/H1118/H1118Shanghai Eternal
Trading
Class II Medical
Device Business
Record Certificate
March 19,
2025
–
10 /H1118/H1118/H1118/H1118Shanghai Eternal
Brand Management
Consignee or
Consignor of
Imported or
Exported Goods
March 26,
2024
–
Note:
(1) The renewal of these licenses is not required.
Our Directors confirm that, in addition to above, we had obtained all requisite licenses,
certificates and permits from relevant authorities that are material to our operations in China
(including Hong Kong and Macau) as of the Latest Practicable Date.
For details of the laws and regulations of China (including Hong Kong and Macau) that
are applicable to our Group’s business operations, please see the section headed “Regulatory
Overview” in this prospectus.
LEGAL PROCEEDINGS AND COMPLIANCE
Overview
From time to time, we may become involved in legal proceedings in the ordinary course
of our business. During the Track Record Period and up to the Latest Practicable Date, we had
not been and were not a party to any material legal, arbitral or administrative proceedings, and
BUSINESS
– 279 –


--- page 290 ---
we were not aware of any pending or threatened legal, arbitral or administrative proceedings
against us or our Directors that could, individually or in the aggregate, have a material adverse
effect on our business, financial condition, and results of operations.
Below sets forth the details of certain historical immaterial and non-systemic non-
compliance incidents of our Group during the Track Record Period and up to the Latest
Practicable Date. In the opinion of our Directors, the non-compliance incidents described
below, taken as a whole, are not likely to have any material adverse effect on our business,
financial condition or results of operations. As advised by our PRC Legal Advisor and HK
Legal Counsel, other than the non-compliance incidents as disclosed below, we had complied,
in all material respects, with all relevant laws and regulations in mainland China and Hong
Kong, respectively. To the best knowledge of our Directors, we had complied, in all material
respects, with all relevant laws and regulations in Macau.
Storage of Perfumes
Mainland China
Background for Non-compliance
During the Track Record Period, certain of perfumes procured by us and stored in
mainland China were not stored in specialized warehouses (the “Hazardous Chemicals
Warehouses”) in accordance with the Regulation on the Safety Management of Hazardous
Chemicals (τΌ၍ଣૢԷ). According to the provisions of the Safety
Production Law of the PRC () and the Regulation on the
Safety Management of Hazardous Chemicals, the Ministry of Emergency Management of the
PRC (၍ଣ௅) is responsible for the comprehensive management of
hazardous chemicals. This non-compliance was committed primarily due to the implementation
or interpretation by local governmental authorities in the PRC of the relevant laws and
regulations not being clear at the relevant time. As confirmed by our PRC Legal Advisor, local
authorities in different cities may have different implementation or interpretation on hazardous
chemicals. For example, the Ministry of Emergency Management of the PRC did not explicitly
require perfumes to be managed as hazardous chemicals, nor did they mandate that enterprises
storing perfumes must obtain a hazardous chemical business license, while the Bureau of
Emergency Management in Shanghai stated in a notice that the daily chemical products are
generally not administrated as hazardous chemicals at the moment. The Bureau of Emergency
Management in Shenzhen also replied on an official website that perfumes (cosmetics) are not
considered hazardous chemicals. Nevertheless, penalty was imposed against us in March 2023
by the Bureau of Emergency Management in Nanhai District, Foshan City (ܢ
၍ଣ҅) in Guangdong Province.
BUSINESS
– 280 –


--- page 291 ---
Legal Consequences and Potential Maximum Penalties
Failure to properly store hazardous chemicals in accordance with applicable laws and
regulations in mainland China may cause the competent government authority to order for
rectification and impose a fine of not less than RMB50,000 and not more than RMB100,000,
and failure to rectify may result in suspension of business, revocation of the relevant business
licenses or change of business scope. On March 23, 2023, we received the Decision on
Administrative Penalty (ࣣ֛issued by the Bureau of Emergency Management in
Nanhai District, Foshan City, which imposed a fine of RMB55,000 on us for not storing the
perfumes in Hazardous Chemical Warehouses. As of the Latest Practicable Date, we have paid
such fine in full.
Hong Kong
Background for Non-compliance
During the Track Record Period, we did not store certain perfumes, which were classified
as Class 3 dangerous goods belonging to the packing group PGII under the Dangerous Goods
(Application and Exemption) Regulation 2012 (Chapter 295E of Hong Kong Laws), in
compliance with the Dangerous Goods Ordinance (Chapter 295 of Hong Kong Laws) (the
“DGO”). Historically, we had been using the warehouses that we leased in Hong Kong for
packaging of our products and the preparation for transportation and delivery. Our staffs who
were primarily responsible for managing the operations at these warehouses at that time,
without the benefit of any professional legal advice, had misunderstood the DGO and the
relevant regulations, and believed that the restrictions on the quantity of “storage” would not
apply to goods temporarily present on the premises as they were being packaged and/or
prepared for transportation. In addition, it was also impracticable for our Group to lease a
warehouse with DGO licence in Hong Kong for the storage of our inventory of perfumes
because the availability of such licensed warehouses was extremely limited, if available at all.
Legal Consequences and Potential Maximum Penalties
Storing dangerous goods exceeding the exempted quantity under the DGO may subject us
and/or our management to be guilty of an offence and shall be liable: (i) for a first offence, to
a fine of HK$100,000 and to imprisonment for 6 months; and (ii) for a subsequent offence, to
a fine of HK$200,000 and to imprisonment for 12 months. During the Track Record Period,
there was one summon charged against us for storage of such perfume products in a quantity
exceeding the relevant limit under the DGO in August 2022, with a penalty of HK$10,000
which was paid and settled in full immediately.
BUSINESS
– 281 –


--- page 292 ---
Remedies and Rectification Measures Taken to Prevent Future Breach and Ensure On-going
Compliance in Mainland China and Hong Kong
As of the Latest Practicable Date, we had engaged third-party logistics and warehousing
service providers to provide supply chain solutions, including storage and delivery services, for
the products in both Guangdong Province and Shanghai. We have entered into supply chain
service agreements with these service providers.
We also took actions to rectify the non-compliance incident in Hong Kong by attempting
to identify compliant warehouses in Hong Kong once the incident came to our management’s
attention. However, we were not able to find such warehouse because the availability of such
licensed warehouses in Hong Kong was scarce, if available at all. As such, in order to ensure
compliance going forward in relation to the perfume products to be sold by us in Hong Kong,
we have engaged a third-party logistics and warehousing service provider to provide supply
chain solutions, including packaging, storing, transportation and delivery services. These
products will be delivered directly to the bonded warehouse of such service provider in the
PRC. For the existing perfume products that are stored in our warehouses, we have been
gradually moving them to the warehouses of the third-party logistics and warehousing service
providers according to an agreed schedule. As at the Latest Practicable Date, the relocation of
the existing perfume products has been completed.
In selecting the aforementioned third-party logistics and warehousing service providers,
we comprehensively evaluated their qualifications based on their industry standing and
contract performance capability. These third-party logistics and warehousing service providers
were chosen by us because they were considered by us to be leading logistics and warehousing
service providers in the relevant industry that are capable of providing professional and
competent services to us based on their historical experience and reputation.
We have taken the following measures to ensure that such third-party service providers
comply with the relevant laws and regulations:
(i) For our product sold in mainland China, our contract with the service provider
specifies that they must possess the necessary qualifications for the services outlined
in the contract and must complete the corresponding supply chain services in
accordance with national, industry standards, and our service requirements. For our
products sold in Hong Kong, our contract with the relevant third-party service
provider specifies that such service provider must comply with the warehouse
management requirements of the customs of mainland China. If the service
providers’ non-compliance with these requirements resulted in any loss to us, they
shall fully compensate us for such loss.
Our contracts with the service providers also require them to store goods according
to the storage conditions stipulated by national and industry standards or properly
store our products.
BUSINESS
– 282 –


--- page 293 ---
(ii) We regularly monitor the service providers’ performance of the contracts.
(iii) We check the on-going compliance of the service providers with the applicable laws
and regulations, and may terminate business relationship with them if we found that
they were penalized for any material violations of laws or regulations.
In addition to monitoring the activities of third-party service providers, we have
implemented other internal control measures to prevent the recurrence of such non-compliance
incidents in the future, including, among others, (i) requiring the legal teams to stay informed
on the relevant regulatory requirements and updates, and keep our management alert about the
requirements under the latest laws and regulations; (ii) designating staff to visit the warehouses
to check the status of storage at least on a quarterly basis and on ad hoc basis; and (iii)
providing training to the relevant staff regarding continuing compliance with the relevant laws
and regulations, including the requirements on the storage of hazardous chemicals in the PRC.
Our internal control consultant confirmed that it did not identify any internal control issues
with respect to the foregoing non-compliance incidents.
Our Directors are of the view, and the Joint Sponsors concur, that such non-compliance
incidents were one-off in nature, primarily because the reasons leading to the non-compliance
incidents in mainland China and Hong Kong were of different nature. The non-compliance with
the DGO in Hong Kong, which resulted in the summon charged against us in August 2022,
primarily resulted from the misunderstanding by the relevant staffs that the restrictions on the
quantity of “storage” would not apply to goods temporarily present on the premises as they
were being packaged and/or prepared for transportation. The non-compliance involving the
Regulation on the Safety Management of Hazardous Chemicals, which resulted in the penalty
imposed against us by the relevant PRC government authorities in March 2023, however,
primarily arose from the unclear implementation or interpretation by the local government
authorities in the PRC of the relevant laws and regulations. As confirmed by our PRC Legal
Advisor, the Ministry of Emergency Management of the PRC did not explicitly require
perfumes to be managed as hazardous chemicals, nor did they mandate that enterprises storing
perfumes must obtain a hazardous chemical business license.
Having considered that (i) the respective non-compliance incidents in mainland China and
Hong Kong were not interlinked with each other and were one-off in nature; (ii) the
non-compliances were not caused by any systemic failure of our Group; (iii) the non-
compliance incidents did not involve intentional misconduct, fraud, dishonesty or wilful breach
on the part of our Directors; (iv) we have already taken remedial and rectification measures to
prevent recurrence of any similar incidents; and (v) the nature of these incidents did not have
any material legal and financial impact on our Group, our Directors are of the view, and the
Joint Sponsors concur, that these non-compliance incidents were not material and were
non-systemic in nature and would not affect the suitability of our Directors under Rules 3.08
and 3.09 of the Listing Rules.
BUSINESS
– 283 –


--- page 294 ---
Advertisement
Background for Non-compliance
Our advertisement of the brands and products under our management is subject to
applicable laws and regulations in mainland China, Hong Kong and Macau. In April 2024,
Qingpu District Market Supervision and Administration Bureau of Shanghai (ऌਜ̹
ఙ္ຖ၍ଣ҅) levied a fine in the amount of RMB30,000 on one of our subsidiaries in
Shanghai and ordered it to suspend the publication of the relevant advertisements and eliminate
the negative impact of the advertisements because certain products it sold on some of our
self-operated online stores on Tmall and Douyin were advertised with certain claims, such as
“gentle,” “soothing effect,” “suitable for any skin type,” and “oil control,” which were found
to lack supporting evidence or testing. According to the Article 28 of the Advertising Law of
the PRC (), if an advertisement regarding the goods’ performance,
functions, place of production, uses, quality, specification, ingredient, price, producer, term of
validity, sales condition, and honors received, among others, or the service’s contents,
provider, form, quality, price, sales condition, and honors received, among others, or any
commitments, among others, made on the good or service, is inconsistent with the actual
circumstances, and has a material impact on the purchases, such advertisement would
constitute a false advertisement. Accordingly, the actions of the subsidiary violated the relevant
provisions of the Advertising Law of the PRC. As of the Latest Practicable Date, we had paid
such fine in full.
Legal Consequences and Potential Maximum Penalties
According to the Advertising Law of the PRC (), anyone who
publishes false advertisements may be ordered by the relevant market supervision and
administration department to suspend such publication, eliminate the impact accordingly, and
may be subject to a fine of not less than three times but not more than five times the advertising
fee, whereas advertising fee cannot be calculated or is obviously low, a fine of not less than
RMB200,000 but not more than RMB1.0 million may be imposed. In addition, according to the
Advertising Law of the PRC, advertisers who violate the law more than three times in two
years or commit other serious violations, (i) a fine of not less than five times but not more than
10 times the adverting fee shall be imposed; (ii) whereas advertising fee cannot be calculated
or is obviously low, a fine of not less than RMB1.0 million but not more than RMB2.0 million
may be imposed; (iii) the business license may be revoked; and (iv) the relevant advertisement
review authority may revoke the advertisement review approval document, and will not accept
any advertisement for review within one year.
Remedies and Rectification Measures Taken to Prevent Future Breach and Ensure On-going
Compliance
We have implemented internal control measures to prevent the recurrence of such
non-compliance incidents in the future, including, but not limited to, (i) improving the internal
policies on reviewing the advertisements and other marketing and promotional materials from
BUSINESS
– 284 –


--- page 295 ---
the perspectives of legal compliance and risks of infringement by our marketing and legal
teams; (ii) enhancing the review on the qualifications of the third-party suppliers of marketing
and promotional activities before engaging them; (iii) enhancing the contractual obligations of
such third-party suppliers to compensate us for any loss arising from their failure to comply
with applicable advertising laws and regulations; (iv) engaging legal advisor(s) to seek advice
on the regulatory requirements of latest advertising laws; and (v) providing training to the
relevant staff regarding continuing compliance with the applicable advertising laws and
regulations, as well as our policies regarding sales and marketing. As confirmed by our internal
control consultant (as disclosed under “— Internal Control and Risk Management”), the
internal control measures implemented by us are adequate and effective to prevent
reoccurrence of similar non-compliance incidents.
View of Directors and Joint Sponsors
Our Directors are of the view that such non-compliances would not have a material
adverse effect on our business and results of operations, considering that (i) as of the Latest
Practicable Date, we have paid all the fines for above incidents in full, and have not been
subject to any further penalties or inquiries in connection with above incidents; and (ii) we
have taken or are in the process of taking all practicable and reasonable steps to avoid
reoccurrence of similar incidents.
Based on the foregoing, our Directors are of the view, and the Joint Sponsors concur, that
the above-mentioned remedies and internal control measures our Group implemented are
adequate and effective.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
Corporate and Sustainability Governance
We are fully aware of our responsibilities toward the society. As a corporate citizen, we
committed to integrating environmental, social, and governance (“ESG”) principles into all
major aspects of our business operations. We have various governance measures in place to
oversee the implementation of ESG related policies and sustainability vision, which are
embedded in our standard operating procedures. The Board holds overall responsibility for our
ESG strategy and reporting. An ESG working group (the “ESG Working Group”), delegated by
the Board, has been formed to assist in planning and implementing our’s ESG-related matters
and reports directly to the Board.
We will establish a materiality assessment procedure to identify ESG topics that
significantly impact our Group and its stakeholders. The process begins with identifying
sustainability issues relevant to our Group through comprehensive research, engagement, and
analysis. Key stakeholders referenced in the assessment include shareholders, employees,
customers, industry organizations, and regulatory standards bodies. These material
BUSINESS
– 285 –


--- page 296 ---
sustainability issues will be prioritized based on stakeholder expectations and their potential to
impact our business and operations significantly. The ranked list of ESG issues serves as a
guide for developing corporate strategies.
We will also issue ESG report annually to disclose our efforts and achievements in
compliance with requirements of the Environmental, Social and Governance Reporting Guide
(“ESG Reporting Code”) in Appendix C2 of the Listing Rules, upon the Listing and when
appropriate.
Pursuant to our ESG policy, our Board has the collective and overall responsibility for the
following:
(i) supervising and reviewing our Group’s ESG framework, management principles and
strategies;
(ii) overseeing the ESG risk and climate related risk management mechanisms and
regularly evaluate effectiveness; and
(iii) reviewing the progress made against ESG-related goals and targets.
We will also establish an ESG working group, which is delegated by the Board, consist
of representative from president office. The ESG working group will help implement
ESG-related framework, policies and strategies approved by the Board. Main responsibilities
of the ESG working group include:
(i) establishing and maintaining the communication channels with key stakeholders;
(ii) evaluating and prioritizing material ESG-related issues though materiality
assessment;
(iii) analysing the key performance indicators;
(iv) implementing and enforcing ESG-related policies, procedures and measures
approved by the Board; and
(v) reporting the implementation of ESG-related policies and preparation of the ESG
report to the Board on an annual basis.
Environmental Matters
The Group understand that addressing the climate change and reducing our environmental
impact are essential for achieving a sustainable future. We are subject to a number of
environmental laws and regulations in the PRC, including but not limited to the Law of the
PRC on Environmental Protection (); the Law of the PRC on
Prevention and Control of Air Pollution (); the Law of the
BUSINESS
– 286 –


--- page 297 ---
PRC on Prevention and Control of Environmental Noise Pollution ( ʕശɛ͏΍ձ਷ᐑྤኛ
); the Law of the PRC on the Prevention and Control of Water Pollution ( ʕ
); and the Law of the PRC on the Prevention and Control of
Environmental Pollution by Solid Waste ().
During the Track Record Period and up to the Latest Practicable Date, our Group was in
compliance all relevant environmental laws and regulations in mainland China, Hong Kong and
Macau in all material respects. Given the nature of our industry and business operations, we
are not exposed to significant environmental liability risks and will not face substantial
compliance costs in the future.
Energy and Green House Gas (“GHG”) Emission
In view of our business, we do not generate significant amounts of Scope 1 and 2
emissions. Scope 2 emission is our main source of GHG emissions, which belongs to the
purchased electricity consumed by our offices and retail stores. Our Scope 1 emissions are
generated from our company-owned vehicles, which are used for community purposes. To
reduce these Scope 1 emissions, we will gradually phase out our petrol-powered cars and
replace them with electric vehicles. Currently, we own one electric car and this number is
expected to increase moderately over time.
Regarding the equipment in our offices and stores, we have gradually replaced our
lighting sources with energy-efficient LED lights to save energy. To further enhance energy
conservation efforts, we aim to turn off certain non-essential equipment, such as elevators,
during non-peak hours. Additionally, we conduct regular inspections on our building
equipment, replacing old systems and defective equipment with more energy-efficient
alternatives.
Waste Disposal
Since the Group’s major waste generation comes from office and administrative activities,
our waste reduction strategy focuses on minimizing this type of solid waste through strict
management practices. Our office, stores and warehouse strictly adhere to local waste
classification regulations. We have digitalized warehouse operations, eliminating paper usage
in the delivery process and enhancing supply chain efficiency and transparency. Additionally,
we have established an electronic waste collection program to promote the responsible disposal
of used technology items among staff members. In our warehouses and stores, waste, including
packaging waste such as cardboard, paper and plastic film, as well as construction and
landscape maintenance waste, is carefully sorted and handled to reduce environmental impact.
We also irregularly organize waste recycling campaigns to encourage reduced waste
consumption and inspire employees and customers alike to collectively appreciate adopting
eco-friendly practices.
BUSINESS
– 287 –


--- page 298 ---
Product Packaging
Some of our products require repackaging to comply with the local and customs
requirements. We closely adhere to the Requirements of restricting excessive package — Foods
and cosmetics (Ӌ-) in order to reduce unnecessary
packaging material consumption. We train our staff to fulfill our responsibilities in terms of
packaging layers and void ratio under the relevant laws and regulations in mainland China,
Hong Kong and Macau. Additionally, we organised green campaign to encourage our
customers bringing their own bags to reduce the distribution of shopping bags.
Supply Chain Management
Before establishing cooperation with our suppliers, we generally conduct procedures to
find out, among others, their reputation, qualifications and operations. We may also require our
suppliers to provide business licenses or production and operation licenses to demonstrate legal
compliance with applicable laws and regulations. Our management team collects such
information through, among others, on-site visits at potential suppliers’ offices and production
facilities, reading industrial research reports issued by third-party professionals, seeking
opinions from well-regarded industry players and looking into their historical publicity. In
addition, our contracts with the suppliers generally stipulate their obligations to ensure that the
qualities of the products supplied by them comply with applicable laws and regulations. Going
forward, to strengthen our sustainability initiatives, we will take into consideration the
potential suppliers’ compliance with environmental and social policies, laws and regulations,
in order to achieve more environmentally friendly and/or socially responsible supply chain
management.
Climate Risk and Opportunity
Given the nature of our business, we do not anticipate environmental and climate-related
risks to have a material impact on our business operations in the short term. However, we
believe these risks may potentially impact our business value chain and financial condition
over the medium and long term. We have identified several physical and transition risks and
opportunity throughout our business chain that need to be addressed. If the risks and
opportunities are considered to be material, we will plan to incorporate those risk and
opportunity into our strategy and financial planning process.
Regarding acute physical risks, extreme weather events such as typhoons and floods may
lead to delayed product delivery times and damage to our products and retail stores. If such
events occur more frequently in the long term, our insurance premiums and operating costs will
increase. For chronic physical risks, rising air temperatures may cause higher electricity
consumption for air conditioning to maintain the same room temperature, potentially
increasing operational costs.
BUSINESS
– 288 –


--- page 299 ---
The risk of policies and regulations, including mandatory emissions disclosures and
regulation changes affecting existing products and services, may result in higher compliance
costs and premature retirement of existing assets. Regarding market risks, we may be subject
to changes in customer behavior, with consumers preferring more organic and eco-friendly
perfumes. This could lead to reduced product demand if we do not pay enough attention to
these types of product. Besides, we may encounter a market opportunity as customers may have
a higher demand for perfume usage during hot weather conditions to mask body odor. Any
perfume that can withstand high temperatures and effectively remove body odor will likely
become popular in the long term, leading to an increase in revenue.
Social Matters
Current Workforce
A summary of the breakdown of our employees as of the dates indicated is presented as
below:
As of
March 31,
2023
As of
March 31,
2024
As of
March 31,
2025
As of
May 31,
2025
By Gender /H1118/H1118/H1118/H1118Male 374 360 296 273
Female 962 894 837 809
By hierarchy /H1118/H1118Management 7 8 7 7
Non-management 1,329 1,246 1,126 1,075
By Age Group /H111816-29 390 312 256 240
30-39 549 553 502 477
40-49 299 295 277 272
50 and above 98 94 98 93
By Region /H1118/H1118/H1118/H1118/H1118Mainland China 1,016 916 800 762
Hongkong and
Macau 320 338 333 320
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,336 1,254 1,133 1,082
Employee Care
Our people are our greatest assets and we strive to create a supportive and inclusive
environment that empowers our employees to thrive both personally and professionally. We
fully protect the legitimate rights and interests of employees on recruitment, dismissal, salary,
and benefits to ensure equal opportunities and create a diverse and inclusive working
atmosphere to all our employees. Our Group is committed to being an equal opportunity
employer, considering applicants for all positions without regard to race, color, nationality,
religion, gender, sexual orientation, age, or any other protected characteristics. Besides, we
prioritize employee care and well-being by offering breastfeeding facilities, family discounts
on company products, and encouraging staff to attend social events with their loved ones.
BUSINESS
– 289 –


--- page 300 ---
Please see “— Employees” in this section for details related to the employee benefits,
recruitment, career progression, training and development opportunities, as well as our policies
on diversity and equal opportunity.
Occupational and Workplace Safety
Our Group has established procedures to provide our employees with a safe and healthy
working environment by setting out a series of work safety measures in the staff manual for
our staff to follow. Our Group follows the health and safety-related rules and regulations
pursuant to relevant laws and regulations in mainland China, Hong Kong and Macau, and have
devised a series of requirements for workplace environmental control and hygiene in the
workplaces accordingly. As of the Latest Practicable Date, we had complied with applicable
laws and regulations on health, occupational safety and environmental protection in all
material respects.
Our administration department is responsible for the daily implementation of our work
safety measures and compliance record keeping. We consider that the annual cost of
compliance with the applicable health, work safety, social and environmental laws and
regulations were not material during the Track Record Period and up to the Latest Practicable
Date and the cost of such compliance is not expected to be material going forward. During the
Track Record Period and up to the Latest Practicable Date, our Group had not experienced any
significant incidents or accidents in relation to workers’ safety. Furthermore, we have not been
subject to any material claim, whether for personal or property damage, or penalty in relation
to health, work safety, social and environmental protection and have not been involved in any
accident or fatality and have been in compliance with the applicable laws and regulations of
the relevant jurisdictions in all material aspects during the Track Record Period and up to the
Latest Practicable Date.
Anti-corruption
Our Group is steadfast in conducting business with integrity, transparency, and in full
compliance with all applicable anti-corruption laws and regulations. To uphold our reputation
and maintain the highest ethical standards, we have formulated a comprehensive Anti-Bribery
Policy, which mandates all employees to carry out their duties and activities in strict adherence
to relevant laws and regulations.
We have implemented robust internal controls and rigorous audit mechanisms to prevent,
detect, and respond promptly to any fraudulent activities. The Group adopts a zero-tolerance
approach towards bribery and corruption, and any violations of our Anti-Bribery Policy may
result in severe disciplinary action, including termination of employment or business
relationships. During the Track Record Period and up to the Latest Practicable Date, our Group
had not concluded any legal cases regarding corruption, bribery, fraud and money laundering
practices.
BUSINESS
– 290 –


--- page 301 ---
Animal Testing
Our business primarily comprises two key components: (i) distribution of branded
products of brand licensors in China (including Hong Kong and Macau), in which we distribute
the products to a wide range of consumers through our omni-channel sales and distribution
network; and (ii) market deployment, in which we design and implement customized market
entry and expansion plans for brands. Such business did not require any animal testing under
the applicable laws and regulations during the Track Record Period and up to the Latest
Practicable Date. However, our brand licensors are generally required by the applicable laws
and regulations to obtain the certifications by the competent authorities in mainland China
before their products can be imported therein. In order to obtain such certifications, the brand
licensors are required to obtain reports issued by qualified third-party institutions. These
third-party institutions may need to conduct animal testing involving the relevant products in
order to issue such reports in accordance with the applicable laws and regulations. During the
Track Record Period and up to the Latest Practicable Date, certain of our brand licensors
requested us to assist them in obtaining such certifications. Accordingly, we engaged qualified
third-party institutions to issue the requisite reports, for which animal testing may be
conducted.
Our Group has also formulated relevant regulations to ensure legal compliance.
According to the Regulations on the Administration of Cosmetics Registration and Filing
Documentation (), the product inspection report for
registered or filed products shall be issued by cosmetics registration and filing inspection
institutions, including microbiological and physicochemical tests and toxicological tests,
among others. For manufacturers of ordinary cosmetics, if they have obtained the relevant
qualification certifications for the production quality management system issued by the
competent government departments of their countries (regions), and the product safety risk
assessment results can fully confirm product safety, they may be exempted from submitting the
toxicology test report of such products.
Community Engagement
Our Group deeply cares about the communities in which we operate, as their well-being
is vital to our success. We actively encourage employees to participate in community events
and activities, such as supporting the local culture and volunteering on-site to aid vulnerable
communities. During the Track Record Period, we organize the “Dress Pink Day” event,
encouraging all employees to wear pink to raise awareness and show solidarity with individuals
affected by breast cancer, both within our organization and the communities we serve.
Furthermore, we have sponsored all our employees to attend a screening of the movie “All
Y ou Need Is Love”, a film aimed at raising funds for film industry practitioners impacted by
the COVID-19 pandemic. We understand the tremendous impact the crisis has had on the film
industry and are dedicated to lending our support to those in need during challenging times.
Through such initiatives, we strive to foster a strong sense of community and contribute to the
well-being of society.
BUSINESS
– 291 –


--- page 302 ---
IMPACT OF COVID-19 PANDEMIC ON OUR GROUP
Since December 2019, there has been an outbreak of the novel coronavirus, COVID-19,
across the world. In response to the spread of the COVID-19 virus, including variants and
mutant strains such as Delta and Omicron variants, certain business and social activities were
affected to some extent. We have implemented precautionary measures in the sales premises
that we operate, including requiring all entrants to wear face masks, measuring their
temperature and providing personal disinfectant products such as hand sanitizers to our
consumers and employees.
While we believe that the impact of the COVID-19 pandemic on our business has been
eased, the outbreak of the COVID-19 pandemic had the following impact on our business,
results of operation and financial condition during the Track Record Period: (i) the total
consumer traffic in our offline stores/counters decreased during the COVID-19 pandemic,
which resulted in an increase of inventory balance and inventory turnover days; (ii) in 2021 and
2022, three and 20 (or approximately 4.0% and 23.0%), respectively, of our self-operated
offline stores were temporarily closed due to the COVID-19 pandemic; and (iii) the time
required for completing the custom clearance became relatively longer under the impact of
COVID-19 pandemic.
Since December 2022, our operation has fully resumed to normal after the impact from
the COVID-19 pandemic had eased. Given that our operation has resumed to normal and we
were able to maintain the stability of our revenue and gross profit margin under the impact of
COVID-19 pandemic, (i) our Directors are of the view that the COVID-19 pandemic did not
materially and adversely impacted the operations or financial conditions of our Group during
the Track Record Period; and (ii) our Directors do not expect that the COVID-19 pandemic will
have further adverse impact on our Group’s business and financial performance. While the
COVID-19 pandemic no longer has any material impact on our business operations, we will
maintain a well-balanced online-offline sales network to deal with the challenges that may be
brought by any circumstances in the future similar to the COVID-19 pandemic.
INTERNAL CONTROL AND RISK MANAGEMENT
Internal Control
We have engaged an internal control consultant, or the Internal Control Consultant, to
perform certain agreed-upon procedures in connection with the internal control of our
Company and our major subsidiaries and to report factual findings on our Group’s entity-level
controls and internal controls of various processes, including financial reporting and disclosure
controls, sales, accounts receivable and collection, procurement, accounts payable and
payment, fixed assets and assets under construction, human resources and payroll management,
cash and treasury management, general controls of IT system, taxation management,
production and costing, insurance management, research and development and intangible
BUSINESS
– 292 –


--- page 303 ---
assets. The Internal Control Consultant performed procedures in April 2024 and follow-up
procedures in May 2024 on our Company’s system of internal control. As of the Latest
Practicable Date, there was no material issue remaining in relation to the internal controls of
our Group.
We have adopted various measures and procedures regarding each aspect of our
operations, such as protection of intellectual property, environmental protection and
occupational health and safety. We provide periodic training on these measures and procedures
to our employees as part of our employee training program. We also regularly monitor the
implementation of those measures and procedures through our internal control personnel. Our
Directors (who are responsible for overseeing our corporate governance) with assistance from
our legal advisors, will periodically review our compliance status with all relevant laws and
regulations after the Listing. In addition, we have established a supervisory committee,
consisting of members of our senior management and an internal audit director. The
responsibilities of the supervisory committee include overseeing our internal control status.
Below is a summary of the internal control policies, measures and procedures we have
implemented or plan to implement:
 We have established the Audit Committee which shall (i) make recommendations to
our Directors on the appointment and removal of external auditors; (ii) review our
financial statements and oversee our financial reporting and internal audit; and (iii)
oversee our risk management and internal control procedures. For more details, see
the section headed “Directors and Senior Management — Corporate Governance —
Audit Committee” in this prospectus.
 We have engaged Alliance Capital Partners Limited as our compliance adviser to
provide advice to our Directors and management team until the end of the first fiscal
year after the Listing regarding matters relating to the Listing Rules. Our
compliance adviser is expected to ensure our use of funding complies with the
section headed “Future Plans and Use of Proceeds” in this prospectus after the
Listing, as well as to provide support and advice regarding requirements of relevant
regulatory authorities in a timely fashion.
 We plan to engage legal advisers to advise us on and keep us abreast with the
applicable laws and regulations after the Listing. We will continue to arrange
various trainings to be provided by external legal advisors from time to time when
necessary and/or any appropriate accredited institution to update our Directors,
senior management, and relevant employees on the latest laws and regulations
applicable to us.
BUSINESS
– 293 –


--- page 304 ---
Risk Management
We recognize that risk management is critical to the success of our business operation.
Key operational risks faced by us include changes in the general market conditions and the
regulatory environment of the industries where we operate, our ability to offer quality services,
our ability to manage our anticipated growth and to execute on our growth strategies, and our
ability to compete with our competitors. See the section headed “Risk Factors” in this
prospectus for a discussion of various risks and uncertainties we face. We also face various
market risks. In particular, we are exposed to risks in connection with foreign exchange, cash
flow an fair value interest rate, credit and liquidity. See “Financial Information — Quantitative
and Qualitative Disclosures about Market Risk” for a discussion of these market risks.
In order to meet these challenges, our Audit Committee, which consists of three Directors,
namely, Mr. Tao Chi Keung, Mr. Nagy Guillaume Nicolas Sébastien and Ms. Chan Soh Cheng
and is chaired by Mr. Tao Chi Keung, is responsible for reviewing and supervising our financial
reporting process, risk management and internal control system.
We maintain a set of accounting policies in connection with our financial reporting risk
management, such as financial reporting management policies, budget management policies,
liability policies, financial statements preparation policies and finance department and staff
management policies. We have various procedures and IT systems to implement our accounting
policies, and our finance department reviews our management accounts accordingly. We also
provide regular training to our finance department employees to ensure that they understand
our financial management and accounting policies and strictly enforce them in our daily
operations.
In addition, we have set a number of standard operation procedures for human resource
management in mainland China, Hong Kong and Macau, including the employee management
system, training manuals, and human resource planning policies. These measures aim to
mitigate our risks in insufficient recruitment, staff attrition, non-compliance with labor
regulations, employee information management and others.
BUSINESS
– 294 –


--- page 305 ---
OUR CONTROLLING SHAREHOLDERS
Immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), our Company will be owned as to 75% by Eternal International, which is in turn held
by Mr. Lau and Mrs. Lau as to 90% and 10% respectively. For the purposes of the Listing and
under the Listing Rules, Eternal International, Mr. Lau and Mrs. Lau will therefore be regarded
as a group of Controlling Shareholders of our Company.
INDEPENDENCE FROM CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying on our business independently from our Controlling Shareholders and their close
associates after the Listing.
Management Independence
Our business is managed and conducted by our Board and senior management. Upon
Listing, our Board will consist of four executive Directors and three independent non-executive
Directors. For more information, please see the section headed “Directors and Senior
Management”.
Our Directors consider that our Board and senior management will function
independently from our Controlling Shareholders because:
(a) each Director is aware of his/her fiduciary duties as a director which require, among
other things, that he/she acts for the benefit and in the interest of our Company and
does not allow any conflict between his/her duties as a Director and his/her personal
interests;
(b) our daily management and operations are carried out by our executive Directors and
our senior management team, other than Mr. Lau, who is one of our Controlling
Shareholders, and Ms. Lau, who is the daughter of Mr. Lau, the rest of whom are
independent from our Controlling Shareholders, and have substantial experience in
the industry in which our Company is engaged, and will therefore be able to make
business decisions that are in the best interests of our Group;
(c) we have three independent non-executive Directors who have extensive experience
in different professions and industries. They have been appointed pursuant to the
requirements under the Listing Rules to ensure that the decisions of the Board are
made only after due consideration of independent and impartial opinions. Our
Directors believe that the presence of our independent non-executive Directors from
different backgrounds provides a balance of view and opinions;
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 295 –


--- page 306 ---
(d) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and our Directors or their respective
associates, the interested Director(s) is required to declare the nature of such interest
and shall, save in certain circumstances provided by the Articles, abstain from
voting at the relevant Board meetings of our Company in respect of such
transactions; and
(e) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders, which would
support our independent management. Please see “— Corporate Governance
Measures” in this section for further details.
Based on the above, our Directors believe that our Board as a whole and together with our
senior management team are able to perform their managerial roles and run the business of our
Group independently from our Controlling Shareholders and their respective close associates.
Operational independence
Our Group is not operationally dependent on our Controlling Shareholders and their
respective close associates, including:
(a) We have established our own organizational structure, which comprises individual
departments and each department has its own administrative and corporate
governance infrastructure;
(b) We hold all of the relevant licenses and intellectual property rights material to our
business operation and has sufficient capital, facilities, equipment and employees to
operate our business independently;
(c) our Controlling Shareholders have no interest in any of our top five suppliers and
customers in each year during the Track Record Period. We do not rely on our
Controlling Shareholders and their close associates and have independent access to
our suppliers and customers; and
(d) We have established a set of internal control procedures to facilitate the effective
operation of our business independent from our Controlling Shareholders.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 296 –


--- page 307 ---
We entered into certain lease agreements with our Controlling Shareholders and their close associates during the Track Record Period, pursuant
to which certain subsidiaries of our Company agreed to rent properties as their office and warehouse. Principal terms of such lease agreements are
set out as follows:
Lessee Lessor Premises
Approximate
gross
Floor Area
Monthly
rental Usage Term Listing Rules implications
(m2)
Property Lease Agreement I
Eternal Far East /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Land Pacific
Investment
Limited, a
company
wholly-owned
by Mr. Lau
and Mrs. Lau
11/F Enterprise
Square Two,
No. 3 Sheung
Y uet Road,
Kowloon Bay,
Hong Kong
875 HK$197,000 Office April 1,
2024 to
March 31,
2026 (both
days
inclusive)
This Property Lease Agreement I is subject to a fixed term
and is regarded as a one-off connected acquisition of
capital asset under the Listing Rules. As this Property
Lease Agreement I was entered into prior to the Listing and
the transaction thereunder is one-off in nature, the payment
of the rental contemplated thereunder will not be classified
as a continuing connected transaction under Chapter 14A of
the Listing Rules. Accordingly, the transactions under this
Property Lease Agreement I will not be subject to any of
the reporting, announcement, annual review and
independent shareholders’ approval requirements under
Chapter 14A of the Listing Rules.
Unit 1-3, 22/F
Enterprise
Square Two,
No. 3 Sheung
Y uet Road,
Kowloon Bay,
Hong Kong
319 HK$72,000 Office April 1,
2024 to
March 31,
2026 (both
days
inclusive)
Unit 1 & 2 9/F
Block A Ko Fai
Industrial
Bldg. 7
Ko Fai Road,
Y au Tong,
Hong Kong
2,114 HK$292,000 Warehouse April 1,
2024 to
March 31,
2026 (both
days
inclusive)
Unit 5-6, 22/F
Enterprise
Square Two,
No. 3 Sheung
Y uet Road,
Kowloon Bay,
Hong Kong
304 HK$69,000 Office April 1,
2024 to
March 31,
2026 (both
days
inclusive)
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 297 –


--- page 308 ---
Lessee Lessor Premises
Approximate
gross
Floor Area
Monthly
rental Usage Term Listing Rules implications
(m2)
Property Lease Agreement II
Eternal Far East /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Mr. Lau and
Mrs. Lau
Unit 7, 22/F,
Enterprise
Square Two,
No. 3 Sheung
Y uet Road,
Kowloon,
Hong Kong
112 HK$25,000 Office April 1,
2024 to
March 31,
2026 (both
days
inclusive)
This Property Lease Agreement II is subject to a fixed term
and is regarded as a one-off connected acquisition of
capital asset under the Listing Rules. As this Property
Lease Agreement II was entered into prior to the Listing
and the transaction thereunder is one-off in nature, the
payment of the rental contemplated thereunder will not be
classified as a continuing connected transaction under
Chapter 14A of the Listing Rules. Accordingly, the
transactions under this Property Lease Agreement II will
not be subject to any of the reporting, announcement,
annual review and independent shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
Property Lease Agreement III
Eternal Far East /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Glasworld
International
Limited, a
company
owned as to
30% by
Mr. Lau and
Mrs. Lau in
aggregate
Unit 8, 22/F
Enterprise
Square Two,
No. 3 Sheung
Y uet Road,
Kowloon Bay,
Hong Kong
140 HK$32,000 Office April 1,
2024 to
March 31,
2026 (both
days
inclusive)
This Property Lease Agreement III is subject to a fixed term
and is regarded as a one-off connected acquisition of
capital asset under the Listing Rules. As this Property
Lease Agreement III was entered into prior to the Listing
and the transaction thereunder is one-off in nature, the
payment of the rental contemplated thereunder will not be
classified as a continuing connected transaction under
Chapter 14A of the Listing Rules. Accordingly, the
transactions under this Property Lease Agreement III will
not be subject to any of the reporting, announcement,
annual review and independent shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 298 –


--- page 309 ---
Lessee Lessor Premises
Approximate
gross
Floor Area
Monthly
rental Usage Term Listing Rules implications
(m2)
Property Lease Agreement IV
Eternal Beijing Trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Mr. Lau and
Mr. Andy Lau
Unit 1805,
18th Floor,
Tower A,
Jiali Center
Enterprise Plaza,
121 Qingnian
Street,
Shenhe District,
Shenyang City,
Liaoning
Province,
PRC
220 RMB30,000 Office April 1,
2024 to
March 31,
2026
This Property Lease Agreement IV is subject to a fixed term
and is regarded as a one-off connected acquisition of
capital asset under the Listing Rules. As this Property
Lease Agreement IV was entered into prior to the Listing
and the transaction thereunder is one-off in nature, the
payment of the rental contemplated thereunder will not be
classified as a continuing connected transaction under
Chapter 14A of the Listing Rules. Accordingly, the
transactions under this Property Lease Agreement IV will
not be subject to any of the reporting, announcement,
annual review and independent shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
Property Lease Agreement V
Eternal Beijing Trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ms. Lau Room 3307,
29th Floor,
Tower A,
No. 8
Dongdaqiao
Road,
Chaoyang
District,
Beijing, PRC
508 RMB66,900 Office April 1,
2024 to
March 31,
2026
This Property Lease Agreement V is subject to a fixed term
and is regarded as a one-off connected acquisition of
capital asset under the Listing Rules. As this Property
Lease Agreement V was entered into prior to the Listing
and the transaction thereunder is one-off in nature, the
payment of the rental contemplated thereunder will not be
classified as a continuing connected transaction under
Chapter 14A of the Listing Rules. Accordingly, the
transactions under this Property Lease Agreement V will
not be subject to any of the reporting, announcement,
annual review and independent shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 299 –


--- page 310 ---
Lessee Lessor Premises
Approximate
gross
Floor Area
Monthly
rental Usage Term Listing Rules implications
(m2)
Property Lease Agreement VI
Shanghai Eternal Cosmetics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shanghai Xiayi
International
Trading Co.,
Ltd., a
company
wholly-owned
by Mr. Lau
Units T3-3201 to
T3-3219,
Building
166 Minhong
Road,
Minhang
District,
Shanghai, PRC
2,236 RMB613,813 Office April 1,
2024 to
March 31,
2026
This Property Lease Agreement VI is subject to a fixed term
and is regarded as a one-off connected acquisition of
capital asset under the Listing Rules. As this Property
Lease Agreement VI was entered into prior to the Listing
and the transaction thereunder is one-off in nature, the
payment of the rental contemplated thereunder will not be
classified as a continuing connected transaction under
Chapter 14A of the Listing Rules. Accordingly, the
transactions under this Property Lease Agreement VI will
not be subject to any of the reporting, announcement,
annual review and independent shareholders’ approval
requirements under Chapter 14A of the Listing Rules.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 300 –


--- page 311 ---
Notwithstanding such one-off transactions, our Directors are of the view that we have
been operating and will continue to operate independently from our Controlling Shareholders
and their close associates on the following bases:
(a) we use the premises leased from our Controlling Shareholders and their close
associates as offices and warehouse, and there are other readily available premises
in the market and can be leased from Independent Third Parties at reasonable prices.
We may seek appropriate alternative premises from Independent Third Parties
without any material adverse effect on our business and operations; and
(b) such one-off transactions are entered into during our ordinary and usual course of
business based on arm’s length negotiations and on normal commercial terms, which
are fair and reasonable, and are in the interest of our Company and Shareholders as
a whole.
Based on the above, our Directors consider that our business is operationally independent
of our Controlling Shareholders and their respective close associates.
Financial Independence
We have independent internal control and accounting systems. We also have an
independent finance department responsible for discharging the treasury function, and an Audit
Committee comprising solely of independent non-executive Directors to oversee our
accounting and financial reporting processes. We are capable of obtaining financing from third
parties, if necessary, without reliance on our Controlling Shareholders.
During the Track Record Period, Mr. Lau, one of our Controlling Shareholders, provided
certain guarantees and pledges by himself, entities controlled by him, or properties owned by
him, and Mrs. Lau, one of our Controlling Shareholders, provided pledge by properties jointly
owned by her and Mr. Lau, for our loans and facilities. During the Track Record Period, Eternal
Far East also provided guarantees to one entity controlled by Mr. Lau and Mrs. Lau, namely
Land Pacific Investment Limited, for its loans and facilities and such guarantees were released
in May 2024.
As at April 30, 2025, being the latest practicable date for indebtedness, the guarantee
provided by Mr. Lau for the outstanding bank facilities were approximately RMB35.6 million.
As at the Latest Practicable Date, we have obtained consent from the relevant bank to release
the aforesaid guarantees and pledged assets by substituting with our corporate guarantee upon
the Listing.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 301 –


--- page 312 ---
Other than the above, our source of funding and our finances are independent from our
Controlling Shareholders and none of our Controlling Shareholders or their respective close
associates financed our operations during the Track Record Period. Our Directors confirm that
our Group does not intend to obtain any further borrowing, guarantees, pledges and mortgages
from any of our Controlling Shareholders or their respective close associates. Based on the
above, our Directors are of the view that our Group is not financially dependent on our
Controlling Shareholders or their respective close associates in the business operations of our
Group.
COMPETITION UNDER RULE 8.10 OF THE LISTING RULES
During the Track Record Period, our Group sold eyewear products to Gold Vision Limited
(“Gold Vision”), a company incorporated under the laws of Hong Kong on October 23, 1998
and controlled by Mr. Lau Andy Wing Hang, the son of Mr. Lau. Gold Vision is principally
engaged in retail sales of eyewear products. During the years ended March 31, 2023, 2024 and
2025, the revenue of Gold Vision amounted to approximately HK$6.3 million, HK$6.9 million
and HK$6.5 million, respectively. Gold Vision recorded a net profit of approximately HK$0.7
million, HK$0.4 million and HK$0.2 million, respectively during the years ended March 31,
2023, 2024 and 2025.
Our transactions with Gold Vision are expected to continue after the Listing. For details,
please see the “Continuing Connected Transactions” section in this prospectus. Eternal BVI has
been one of the directors of Gold Vision. As such, our Controlling Shareholders will be
regarded as having an interest as director in Gold Vision by virtue of Rule 8.10(2) of the Listing
Rules. Having considered that (i) the principal business of Gold Vision is retail sales of
eyewear products under a business-to-consumer model and their target customers are end
consumers of eyewear products; (ii) during the Track Record Period and up to the Latest
Practicable Date, we were only engaged in wholesale and distribution of eyewear products
under a business-to-business model where our target customers are primarily retailers; (iii) the
target customer groups of Gold Vision and our Group are entirely different; and (iv) both Gold
Vision and our Group have no intention to change their respective principal business, our
Directors are of the view that there is clear delineation and no material competition between
the business operated by Gold Vision and our Group.
Our Controlling Shareholders confirm that as of the Latest Practicable Date, save as
disclosed above, they did 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 that
would require disclosure under Rule 8.10 of the Listing Rules. In addition, for confirmation
from our Directors, please refer to the paragraph headed “Confirmation from Our Directors —
Rule 8.10 of the Listing Rules” in the “Directors and Senior Management” section in this
prospectus.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 302 –


--- page 313 ---
CORPORATE GOVERNANCE MEASURES
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We have adopted the following corporate governance measures to
resolve actual or potential conflict of interests between our Group and our Controlling
Shareholders:
(a) under the Articles, where a Shareholders’ meeting is held to consider proposed
transactions in which our Controlling Shareholders or any of their associates has a
material interest, our Controlling Shareholder(s) will not vote on the relevant
resolutions;
(b) our Company has established internal control mechanisms to identify connected
transactions, and we will comply with the applicable Listing Rules if we enter into
connected transactions with our Controlling Shareholders or any of their associates
after Listing;
(c) the independent non-executive Directors will review, on an annual basis, whether
there is any conflict of interests between our Group and our Controlling
Shareholders and provide impartial and professional advice to protect the interests
of our minority Shareholders;
(d) our Controlling Shareholders will undertake to provide all information necessary or
requested by the independent non-executive Directors for their annual review,
including all relevant financial, operational and market information;
(e) our Company will disclose decisions on matters reviewed by the independent
non-executive Directors either in its interim and annual reports or by way of
announcements as required by the Listing Rules;
(f) where our Directors reasonably request the advice of independent professionals,
such as financial advisors, the appointment of such independent professionals will
be made at our Company’s expenses;
(g) we have appointed Alliance Capital Partners Limited as our compliance advisor to
provide advice and guidance to us in respect of compliance with the applicable laws
and regulations, as well as the Listing Rules, including various requirements relating
to corporate governance; and
(h) we have established our Audit Committee, Remuneration Committee and
Nomination Committee with written terms of reference in compliance with the
Listing Rules and the Corporate Governance Code. All of the members of our Audit
Committee are non-executive Directors, and the majority of the members, including
the chairman, are independent non-executive Directors.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 303 –


--- page 314 ---
Based on the above, our Directors believe that sufficient corporate governance measures
have been put in place to manage conflicts of interest between our Group and our Controlling
Shareholders, and to protect minority Shareholders’ interests after the Listing.
RELATIONSHIP WITH THE CONTROLLING SHAREHOLDERS
– 304 –


--- page 315 ---
OVERVIEW
We have in the past entered into certain transactions with parties who will, upon the
Listing, become connected persons of our Company. We will continue to engage in certain
connected transactions after the Listing. Details of such continuing connected transactions of
our Company under Chapter 14A of the Listing Rules are set out below.
RELEV ANT CONNECTED PERSONS
Upon completion of the Global Offering, the following parties with whom we have
entered into transactions will be regarded as our connected persons under the Listing Rules:
Connected persons Connected relationship
Gold Vision Limited (“Gold Vision”) /H1118/H1118/H1118/H1118/H1118/H1118Gold Vision Limited is held as to 70% by
Mr. Lau Andy Wing Hang, who is the son of
Mr. Lau and the younger brother of Ms. Lau.
He is therefore deemed to be a connected
person of our Company under the Listing
Rules.
FULLY EXEMPT CONTINUING CONNECTED TRANSACTIONS
Sales of Eyewear Products to Gold Vision
During the Track Record Period, we sold eyewear products to Gold Vision which is
primarily engaged in retail sales of eyewear products. For the years ended March 31, 2023,
2024 and 2025, the revenue from our sales to Gold Vision amounted to approximately
HK$23,200, HK$39,900 and HK$39,500, respectively. The sales of the eyewear products have
been and will be made on comparable terms as those offered to Independent Third Party
customers.
The transactions with Gold Vision have been and will be entered into in the ordinary and
usual course of business of our Group and on normal commercial terms or better. Based on the
historical transactions amount with Gold Vision, our Directors expect that the revenue from our
sales to Gold Vision upon Listing will not exceed HK$200,000 on an annual basis. As each of
the applicable percentage ratios (other than the profit ratio) under the Listing Rules in respect
of the transactions with Gold Vision is expected to be, on an annual basis, less than 0.1%, the
transactions will thus constitute de minimis transactions under Rule 14.76(1) of the Listing
Rules and will be fully exempt from the reporting, annual review, announcement, circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.
If any of the applicable percentage ratios (other than the profit ratio) under the Listing
Rules in respect of the transactions with Gold Vision is expected to exceed the applicable de
minimis thresholds stipulated under Rule 14A.76(1) of the Listing Rules, we will comply with
all applicable requirements under Chapter 14A of the Listing Rules.
CONTINUING CONNECTED TRANSACTIONS
– 305 –


--- page 316 ---
DIRECTORS
Upon Listing, our Board will consist of seven Directors, including four executive
Directors and three independent non-executive Directors. The following table sets out certain
information in respect of our Directors:
Name Age Position
Date of
joining our
Group
Time of
appointment
as Director
Roles and
responsibilities
Executive Directors
Mr. Lau Kui
Wing
(ᄎམ࿲)
(1) /H1118/H1118/H1118
78 Executive
Director and
chairman of
the Board
February
1983
January 9,
2024
Overall strategic
planning and
business
direction of our
Group
Ms. Lam King
(ঠ) /H1118/H1118/H1118/H1118/H1118/H1118
49 Executive
Director and
chief
executive
officer
December
1999
July 10,
2024
Overall
operational
management of
our Group
Ms. Lau Wing
Yin
(ᄎ㣤ሬ)
(1) /H1118/H1118/H1118
50 Executive
Director
March
2004
July 10,
2024
Overall business
development of
our Group
Mr. Chu Wai
Tsun, Baggio
(ϡၪཷ) /H1118/H1118/H1118/H1118
51 Executive
Director and
chief
financial
officer
July
2010
(2)
July 10,
2024
Overall financial
management
and investors
relationship
affairs of our
Group
Independent Non-executive Directors
Mr. Tao Chi
Keung
(ௗқ੶) /H1118/H1118/H1118/H1118
54 Independent
Non-
executive
Director
June 6,
2025
June 6,
2025
Supervising and
providing
independent
judgment to our
Board
Notes:
(1) Ms. Lau is the daughter of Mr. Lau.
(2) Mr. Chu Wai Tsun, Baggio first joined our Group from July 2010 to March 2020 and re-joined our Group
in May 2023.
DIRECTORS AND SENIOR MANAGEMENT
– 306 –


--- page 317 ---
Name Age Position
Date of
joining our
Group
Time of
appointment
as Director
Roles and
responsibilities
Mr. Nagy
Guillaume
Nicolas
Sébastien /H1118/H1118/H1118/H1118
50 Independent
Non-
executive
Director
June 6,
2025
June 6,
2025
Supervising and
providing
independent
judgment to our
Board
Ms. Chan Soh
Cheng /H1118/H1118/H1118/H1118/H1118/H1118
57 Independent
Non-
executive
Director
June 6,
2025
June 6,
2025
Supervising and
providing
independent
judgment to our
Board
EXECUTIVE DIRECTORS
Mr. Lau Kui Wing (ᄎམ࿲), aged 78, founder of our Group, was appointed as a Director
on January 9, 2024 and re-designated as an executive Director on July 12, 2024. He is also the
chairman of our Board and is primarily responsible for formulating the overall strategic
planning and business direction of our Group. Mr. Lau is also a director of certain of our
subsidiaries, namely Eternal BVI, Excellent Fareast, Eternal China, Eternal Far East, Moral
Happiness, Talent Crown, Eternal China Trading and Eternal Shanghai Trading, and a director
of B&E China, our joint venture company. Mr. Lau is the father of Ms. Lau, our executive
Director.
Mr. Lau has over 40 years of extensive experience in perfume agency sales, retail, and
brand operations management. Prior to founding our Group, from August 1972 to March 1988,
he worked in Cathay Pacific Airways Limited with his last position as a chief purser. Eyeing
on the absence of companies introducing imported perfumes into the PRC markets, Mr. Lau
introduced international perfumes into China in 1988 through organizing a perfume boutique
counter in a department store in Beijing. He has then devoted his full time to pursue his
business in the perfume industry since 1988, and has successfully led us to become a leading
perfume group in China (including Hong Kong and Macau).
Mr. Lau is an honorary chairman (ڗof The Cosmetic & Perfumery Association
of Hong Kong Ltd. (Νุ՘ึ). Mr. Lau was awarded the honor of “Outstanding
Philanthropic Entrepreneur of the Y ear ( ෳॶᆤ–࢕in 2021 and 2023,
respectively.
Mr. Lau graduated from The Harrow E. T. School Hong Kong in August 1966.
DIRECTORS AND SENIOR MANAGEMENT
– 307 –


--- page 318 ---
Ms. Lam King (ঠ), aged 49, joined our Group since December 1999. She was
appointed as a Director on July 10, 2024 and was re-designated as an executive Director on
July 12, 2024. She is also chief executive officer of our Group and is primarily responsible for
overall operational management of our Group. Ms. Lam is also a director of B&E China, our
joint venture company.
Since joining our Group, Ms. Lam has held various positions across different business
divisions of our Group. From December 1999 to February 2005, she was a business
administrator responsible for our Group’s business administration. From March 2005 to
September 2007, she was appointed as operation manager overseeing the overall operations in
mainland China. From October 2007 to February 2011, she served as brand development and
management director of our Group overseeing all aspects of product lifecycle develop product
initiatives. She became vice president of our Group in March 2011 and then senior vice
president of our Group in February 2018 overseeing the business in Hong Kong and mainland
China including internal operations and customer relations and spearheaded the development
of our Group’s back-end functions including supply chain management, digital transformation
and digital marketing initiatives.
Ms. Lam has over 20 years of profound managerial experience in our Group and a
comprehensive understanding of the perfume, skincare, cosmetics industry. She was the Brand
Alliance vice chairperson of the 27th China Beauty Expo in 2023, the vice chairperson and
endorsement officer of Online China Beauty Expo in 2022, special strategic supporting
enterprise representative of Chinese Cosmetics Retail Expo in 2021, and the Brand Alliance
vice chairperson of the 26th China Beauty Expo in 2021.
Before joining our Group, from February 1997 to August 1999, Ms. Lam worked at
Easewell Industrial Ltd., a household products manufacturer, as marketing and sales co-
coordinator responsible for marketing and sales.
Ms. Lam obtained a bachelor’s degree of arts in business studies from City University of
Hong Kong in November 1998.
Ms. Lau Wing Yin (ᄎ㣤ሬ), aged 50, joined our Group in March 2004. She was
appointed as a Director on July 10, 2024 and re-designated as an executive Director on July 12,
2024. She is primarily responsible for overall business development of our Group. Ms. Lau is
also a director of certain of our subsidiaries, namely Eternal China, Eternal Far East, Moral
Happiness, Talent Crown, E China Trading and Guangzhou Consulting. Ms. Lau is the daughter
of Mr. Lau, our founder, chairman of our Board, and our executive Director.
Ms. Lau brings over 20 years of industry experience to her role. After completing her
overseas education, Ms. Lau served at Eagle Star Insurance Company Limited, a British
insurance company under Zurich Financial Services, from August 2001 to March 2004 and was
responsible for financial planning. Upon joining our Group in 2004, Ms. Lau has held various
key positions within the organization, with a focus on the regional business in Hong Kong. Her
DIRECTORS AND SENIOR MANAGEMENT
– 308 –


--- page 319 ---
marketing expertise and strategic vision elevated the performance of the marketing department,
laying the groundwork for the Group’s expanding brand portfolio. Ms. Lau then transitioned
to the sales division, leveraging her deep understanding of consumer trends and market
dynamics to spearhead business development initiatives that significantly bolstered our
revenue streams. In recognition of her invaluable contributions, Ms. Lau was appointed as Vice
President in 2020, overseeing the sales and operations in Hong Kong.
In addition to her business responsibilities, Ms. Lau has assumed the Chairmanship of the
International Fragrance Foundation organized by our Group in Hong Kong and Macau.
Furthermore, Ms. Lau has been appointed as the Caring Ambassador from March 2024 to
February 2025, in recognition of her contribution in corporate community involvement
programmes.
Ms. Lau obtained a bachelor’s degree of arts from Macquarie University in Australia in
September 2001.
Mr. Chu Wai Tsun, Baggio (ϡၪཷ), aged 51, initially joined our Group in July 2010 as
the financial controller of Eternal Far East until March 2020. Mr. Chu re-joined our Group in
May 2023 as the chief financial officer. He was appointed as a Director on July 10, 2024 and
re-designated as an executive Director on July 12, 2024. He is primarily responsible for overall
financial management and investors relationship affairs of our Group.
Mr. Chu has long been engaged in auditing and financing, and has rich experience in
investment and financial management. From May 2002 to February 2005, Mr. Chu worked in
H.K. Zhong Tian Hua Zheng CPA Ltd. with his last position as semi senior audit assistant.
From April 2005 to December 2008, he worked in PricewaterhouseCoopers with his last
position as a manager. From January 2009 to June 2010, he worked as a senior audit manager
in UHY V ocation HK CPA Limited. From March 2020 to September 2021, he worked as senior
financial director in Sipai Health Technology Co., Ltd. (ʮ̡), a medical and
health services company currently listed on the Stock Exchange (stock code: 314). From
September 2021 to December 2022, he worked as vice president of finance in Shenzhou
Medical Technology Co., Ltd (ʮ̡). From March 2012 to June 2018
and since June 2021, Mr. Chu was and has been an independent non-executive director of
Nanjing Panda Electronics Company Limited (ʮ̡), an electronic
equipment company currently listed on the Stock Exchange (stock code: 553) and Shanghai
Stock Exchange (stock code: 600775).
Mr. Chu was admitted as an associate of CPA Australia in January 2001. He obtained the
master’s degree of commerce in finance at the University of New South Wales in Australia in
June 2002 and a bachelor’s degree of business at the University of Technology, Sydney in
October 2000.
DIRECTORS AND SENIOR MANAGEMENT
– 309 –


--- page 320 ---
INDEPENDENT NON-EXECUTIVE DIRECTORS
Mr. Tao Chi Keung ( ௗқ੶) (“Mr. Tao”) , aged 54, was appointed as an independent
non-executive Director on June 6, 2025. He is primarily responsible for supervising and
providing independent judgment to our Board.
Mr. Tao has extensive years of working experience in financial management and auditing.
Prior to joining our Group, from July 1993 to February 1996, Mr. Tao worked in the audit
department of Ernst & Y oung with his last position as a staff accountant III. From March 1996
to May 1998, Mr. Tao was the accounting manager of FT Holdings International Limited
(currently known as DeTai New Energy Group Limited) (stock code: 559). From June 1998 to
October 1999, Mr. Tao worked as an assistant manager at New World China Land Limited (a
company listed on the Stock Exchange in July 1999 and delisted in August 2016). From
October 1999 to September 2003, he worked in KPMG with his last position as a manager.
From April 2004 to October 2009, he then worked in PricewaterhouseCoopers with his last
position as a senior manager. Mr. Tao subsequently served as a chief financial officer in
Birdland (Hong Kong) Limited from December 2009 to September 2010 and Chiaus Int’l
Group Co., Limited from October 2010 to July 2011, respectively. He served as a chief
financial officer and company secretary of Kinetic Mines and Energy Limited (currently known
as Kinetic Development Group Limited) (stock code: 1277) from October 2011 to August 2015.
Mr. Tao is currently serving as a chief financial officer and company secretary of Nameson
Holdings Limited (stock code: 1982) and an independent non-executive director of TA TA
Health International Holdings Limited (stock code: 1255).
Mr. Tao obtained a bachelor’s degree of business administration in accounting from the
Hong Kong Baptist College (currently known as the Hong Kong Baptist University) in
December 1993. Mr. Tao was admitted as an associate of the Chartered Association of Certified
Accountants in September 1996 and a fellow of the Hong Kong Institute of Certified Public
Accountants in July 2010, respectively. He was also registered as a certified public accountant
in the Accounting and Financial Reporting Council in January 2024.
Mr. Nagy Guillaume Nicolas Sébastien (“Mr. Nagy”) , aged 50, was appointed as an
independent non-executive Director on June 6, 2025. He is primarily responsible for
supervising and providing independent judgment to our Board.
Mr. Nagy has over 18 years of experience in brand building in Asia Pacific. From June
2006 to January 2017, he was a director in Puig Asia Pacific Pte Ltd., a Singapore company
principally engaged in wholesale business, overseeing the development of the Group’s
activities in Asia Pacific. From July 2017 to May 2019, he was a director in C&J Clarks (S)
Pte. Ltd., a Singapore company principally engaged in the retail sale of footwear. Since
December 2022, he has been serving as a director in Clarins Pte. Ltd., a Singapore company
principally engaged in wholesale of cosmetics and toiletries and operation of beauty salons and
spas.
DIRECTORS AND SENIOR MANAGEMENT
– 310 –


--- page 321 ---
Mr. Nagy obtained a master’s degree in management from the Graduate School of
Business of Grenoble in France in December 1999. He also obtained a master’s degree of
business administration from the University of Warwick through distance learning in June
2016.
Ms. Chan Soh Cheng (“Ms. Chan”) , aged 57, was appointed as an independent
non-executive Director on June 6, 2025. She is primarily responsible for supervising and
providing independent judgment to our Board.
Prior to joining our Group, Ms. Chan worked as a managing director in Beautiful Tree
(Shanghai) Ltd Company, a company engaging in distribution of fragrance and beauty
products, from April 2019 to September 2021. Since May 2022, she worked as a president of
Greater China in Swarovski (Shanghai) Trading Co., Ltd., responsible for the overall
management of the company.
Ms. Chan graduated from Buona Vista Secondary School in Singapore in 1983.
Save as disclosed above, none of our Directors held any directorships in public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in 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 inquiries, there are no other matters with respect to the appointment of our Directors
that need to be brought to the attention of our Shareholders and there is no information relating
to our Directors that is required to be disclosed pursuant to Rule 13.51(2)(a) to (v) of the
Listing Rules.
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business.
The table below shows certain information in respect of our senior management:
Name Age Position
Date of joining
our Group
Roles and
responsibilities
Ms. Wang Wei
(ˮᙯ)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
43 Chief operation
officer
April 2010 Overall operational
management of
our Group
Mr. Xue Y anhe
(ئ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
56 Vice president July 1998 Management of
shopping malls
and department
stores sales
channels
DIRECTORS AND SENIOR MANAGEMENT
–3 1 1–


--- page 322 ---
Name Age Position
Date of joining
our Group
Roles and
responsibilities
Mr. Huang Huiyong
(ۇ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
51 General
manager of
channels
December 2016 Management of
modern sales
channels
Ms. Lam Hiu Ying
(ޮ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
38 Financial
director
March 2013 Financial
management of
our Group
Ms. Wang Wei (ˮᙯ), aged 43, is the chief operation officer of our Group.
Ms. Wang Wei initially joined our Group in April 2010 as the brand manager of color
cosmetics business segment of our Group, and till October 2016, she was in charge of color
cosmetics business segment of our Group, operating several color cosmetics brands managed
by our Group. From November 2016 to December 2018, she worked as the vice president of
merchandising and operation in Meilihui (Shanghai) Trading Co. Ltd, ( ቾɢ౉(ɪऎ)ࠢ
ʮ̡), a subsidiary of Alibaba Group Holding Ltd, which is a company listed on the New Y ork
Stock Exchange (stock code: BABA), where she was responsible for Tmall luxury business line
and initiated to establish Tmall luxury brand stores. Ms. Wang re-joined our Group as vice
president in January 2019 and took the lead on expanding sales online channels to more than
20 e-commerce platforms. In September 2022, she was promoted as chief operation officer,
overseeing online and offline sale channels, marketing, and supply chain management.
Ms. Wang obtained a bachelor’s degree in law from Dongbei University of Finance and
Economics in the PRC in July 2003 and obtained a degree of master of business administration
(international) from the University of Hong Kong in November 2014.
Mr. Xue Y anhe (ئaged 56, is a vice president of the China region of our Group.
Mr. Xue joined our Group since July 1998 when he was in charge of expanding business
of our Group and initiating cooperations with shopping malls and department stores in Beijing.
He has been the vice president of China region since 2018, overseeing and managing shopping
malls and department stores sales channels of our Group.
Mr. Xue obtained a diploma in business administration from the Society of Business
Practitioners of Manchester in the United Kingdom in March 1996.
Mr. Huang Huiyong (ۇaged 51, is the general manager of channels of our Group.
Mr. Huang joined our Group since December 2016 as general manager in charge of
Guangzhou region, and as general manager of modern sales channels of our Group. He is
primarily responsible for the modern sales channels of our Group, including key accounts and
cosmetics stores.
DIRECTORS AND SENIOR MANAGEMENT
– 312 –


--- page 323 ---
Mr. Huang possesses over 20 years of experience in sales, marketing and general
management in the retail and cosmetics industry. Prior to joining our Group, from June 2002
to September 2008, he worked for L’Oréal (China) Co. Ltd. ( ᆄഺඩ(ʕ਷)ʮ̡)a s
regional sales manager of mass cosmetics division, a cosmetics company concentrating on hair
color, skincare, sun protection, make-up, perfume, and hair care. From March 2014 to June
2015, Mr. Huang worked as a general manager in Guangzhou Bioote Cosmetics Co., Ltd. ( ᄿ
ʮ̡), a PRC cosmetics company owning and operating brands. From
January 2016 to December 2016, he worked for Shenzhen Jingrun Pearl Sales Co. Ltd. ( ଉέ
ʮ̡), a company engaging in pearl research and development, production,
sales and cultural exhibition, as general manager before joining our Group.
Mr. Huang obtained a diploma majoring in corporate management at Liming V ocational
University in the PRC in July 1994 and is currently studying for management administration
program in Donghua University in the PRC.
Ms. Lam Hiu Ying (ޮaged 38, is the financial director of our Group.
Before joining our Group, from January 2009 to February 2013, Ms. Lam worked in
PricewaterhouseCoopers with her last position as a senior associate in the assurance
department. Ms. Lam joined our Group in March 2013, responsible for financial analysis and
management of our Group. In April 2024, she was promoted to financial director.
Ms. Lam was admitted as a certified public accountant by the Hong Kong Institute of
Certified Public Accountants in February 2012. She obtained a bachelor’s degree of business
administration from the Chinese University of Hong Kong in December 2009.
COMPANY SECRETARY
Ms. Chung Kok Kuen (ࢇwas appointed as a company secretary of our Company
with effect from July 12, 2024.
Ms. Chung joined our Group in June 2006 and was promoted to director of General
Affairs in April 2024, responsible for administrative management of the office of president,
coordination of inter department and regulatory compliance.
Ms. Chung graduated from the Chartered Governance Institute in the United Kingdom in
November 2023. She was admitted as an associate of The Hong Kong Chartered Governance
Institute in July 2024. She obtained a master’s degree in corporate governance from the Hong
Kong Metropolitan University in September 2023.
DIRECTORS AND SENIOR MANAGEMENT
– 313 –


--- page 324 ---
REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Company offers the executive Directors and senior management, as its employees,
with remuneration in the form of fees, wages, salaries, discretionary bonuses, pension
contributions, housing funds, medical insurances, other social insurances, share-based
compensation expenses and other employee benefits. Independent non-executive Directors will
receive compensation according to their duties (including serving as members or chairmen of
the Board Committees). We adopt a market and incentive-based employee emolument structure
and implement a multi-layered evaluation system which focuses on performance and
management goals. We also adopted the Pre-IPO Share Option Scheme and Share Option
Scheme to attract, retain and motivate employees. For further details of the Pre-IPO Share
Option Scheme and Share Option Scheme, please see the section headed “Statutory and
General Information — E. Pre-IPO Share Option Scheme” and “F. Share Option Scheme” in
Appendix IV to this prospectus.
For the years ended March 31, 2023, 2024 and 2025, the aggregate remuneration paid to
our Directors (including fees, wages, salaries, discretionary bonuses, pension contributions,
housing funds, medical insurances, other social insurances, and share-based compensation
expenses) was approximately RMB15.8 million, RMB18.8 million and RMB20.7 million,
respectively. For remuneration details of all Directors during the Track Record Period, please
refer to Note 34 to the Accountant’s Report as set out in Appendix I to this prospectus.
Under the arrangements currently in force at the date of this prospectus, it is estimated
that the aggregate amount of remuneration of our Directors (excluding discretionary bonuses)
for the year ending March 31, 2026 will be approximately RMB16.2 million.
The five individuals whose emoluments were the highest in our Group include three,
three, three and three Directors for the years ended March 31, 2023, 2024 and 2025,
respectively. For the years ended March 31, 2023, 2024 and 2025, the aggregate amount of
remuneration in the form of wages, salaries, discretionary bonuses, pension contributions,
housing funds, medical insurances, other social insurances, share-based compensation
expenses and other employee benefits paid to the remaining non-director individuals whose
emoluments were the highest in our Group were approximately RMB5.0 million, RMB10.2
million and RMB5.1 million, respectively. For remuneration details of the five individuals
whose emoluments were the highest in our Group during the Track Record Period, please refer
to Note 10 to the Accountant’s Report as set out in Appendix I to this prospectus.
DIRECTORS AND SENIOR MANAGEMENT
– 314 –


--- page 325 ---
During the Track Record Period, (i) no remuneration was paid to our Directors or the five
individuals whose emoluments were the highest in our Group as an inducement to join, or upon
joining our Group, (ii) no compensation was paid to, or receivable by, our Directors or past
Directors or the five individuals whose emoluments were the highest in our Group for the loss
of office as director of any member of our Group or any other office in connection with the
management of the affairs of any member of our Group, and (iii) none of our Directors waived
any remuneration. Save as disclosed above, during the Track Record Period, there were no
other payments paid or payable to our Directors or five individuals whose emoluments were the
highest in our Group by the Company or any of its subsidiaries.
Each of our executive Directors has entered into a service contract with us on June 6,
2025, and we have also entered into letters of appointment with each of our independent
non-executive Directors on June 6, 2025. For the details of the service contracts and
appointment letters that we have entered into with our Directors, see the section headed
“Statutory and General Information — D. Further Information of our Directors and Substantial
Shareholders — 1. Directors’ Service Contracts and Appointment Letters” in Appendix IV to
this prospectus.
CORPORATE GOVERNANCE
The Company has established three Board Committees in accordance with the relevant
laws and regulations and the corporate governance practice under the Listing Rules, namely the
Audit Committee, the Remuneration Committee, the Nomination Committee, with effect from
the Listing Date. The Board Committees operate in accordance with written terms of reference
approved by our Board of Directors.
Audit Committee
The Company has established the Audit Committee with written terms of reference in
compliance with Rule 3.21 of the Listing Rules and the Corporate Governance Code. The Audit
Committee consists of Mr. Tao Chi Keung, Mr. Nagy Guillaume Nicolas Sébastien and Ms.
Chan Soh Cheng. Mr. Tao Chi Keung being the chairperson of the Audit Committee, holds the
appropriate professional qualifications/accounting or related financial management expertise
as required under Rules 3.10(2) and 3.21 of the Listing Rules. The primary duties of the Audit
Committee are to review the financial controls and the internal control and risk management
systems of our Group, monitor the integrity of the Company’s financial statements, review and
monitor the external auditor’s independence and objectivity and effectiveness of the audit
process and perform other duties and responsibilities as assigned by our Board.
Remuneration Committee
The Company has established the Remuneration Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance
Code. The Remuneration Committee consists of Mr. Nagy Guillaume Nicolas Sébastien, Ms.
Lam King and Mr. Tao Chi Keung. Mr. Nagy Guillaume Nicolas Sébastien is the chairperson
of the Remuneration Committee. The primary duties of the Remuneration Committee include,
without limitation, the following: (i) making recommendations to the Board on our policy and
DIRECTORS AND SENIOR MANAGEMENT
– 315 –


--- page 326 ---
structure for all remuneration of Directors and senior management and on the establishment of
a formal and transparent procedure for developing the policy on such remuneration; (ii)
determining the specific remuneration packages of all Directors and senior management, or
alternatively, making recommendations to the Board on such remuneration packages; and (iii)
reviewing performance-related elements of the total remuneration package for executive
Directors to align their interests with those of Shareholders.
Nomination Committee
The Company has established the Nomination Committee with written terms of reference
in compliance with Rule 3.27A of the Listing Rules and the Corporate Governance Code. The
Nomination Committee consists of Mr. Lau Kui Wing, Mr. Tao Chi Keung and Ms. Chan Soh
Cheng. Mr. Lau Kui Wing is the chairperson of the Nomination Committee. The primary duties
of the Nomination Committee include, without limitation, reviewing the structure, size and
composition of the Board, assessing the independence of independent non-executive Directors
and making recommendations to the Board of Directors on matters relating to the appointment
of Directors.
Board Diversity Policy
In order to enhance the effectiveness of the Board and to maintain the high standard of
corporate governance, we have adopted the board diversity policy which sets out our objectives
and approach to achieve and maintain diversity of the Board. Pursuant to this policy, we seek
to achieve board diversity through the consideration of a number of factors when selecting the
candidates to the Board, including but not limited to gender, skills, age, professional
experience, knowledge, cultural and education background and length of service. The ultimate
decision of the appointment will be based on merit and the contribution which the selected
candidates will bring to the Board.
The Board comprises seven Directors, including four executive Directors and three
independent non-executive Directors. Our Directors have a balanced mix of gender,
knowledge, skills and experience, including but not limited to management, sales, brand
management, retail, accounting and finance. Taking into account our existing business model
and specific needs as well as the different background of our Directors, the composition of the
Board satisfies our board diversity policy, and the Board and the Nomination Committee of our
Company will assess the Board composition regularly.
Our Nomination Committee is responsible for reviewing the diversity of the Board. After
Listing, our Nomination Committee will continue to monitor and evaluate the implementation
of the board diversity policy from time to time to ensure its continued effectiveness and we will
disclose in our corporate governance report about the implementation of the board diversity
policy, including any measurable objectives set for implementing the board diversity policy
and the progress on achieving these objectives on an annual basis. We will also continue to take
steps to promote gender diversity at all levels of our Company, including but without limitation
at the Board and senior management levels.
DIRECTORS AND SENIOR MANAGEMENT
– 316 –


--- page 327 ---
Corporate Governance Code
Our Directors recognize the importance of incorporating elements of good corporate
governance in the management structures and internal control procedures of our Group so as
to achieve effective accountability.
The Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of our Shareholders. To accomplish this, our Company has
adopted and intends to comply with the code provisions stated in the Corporate Governance
Code set out in Appendix C1 to the Listing Rules after Listing.
Compliance Adviser
We have appointed Alliance Capital Partners Limited as our Compliance Adviser pursuant
to Rule 3A.19 of the Listing Rules. Our Compliance Adviser will provide us with guidance and
advice as to compliance with the Listing Rules and applicable Hong Kong laws. Pursuant to
Rule 3A.23 of the Listing Rules, our Compliance Adviser will advise our Company in certain
circumstances including:
(a) before the publication of any regulatory announcement, circular, or financial report;
(b) where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues and share repurchases;
(c) where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where the business activities, development
or results of our Group deviate from any forecast, estimate or other information in
this prospectus; and
(d) where the Stock Exchange makes an inquiry to our Company under Rule 13.10 of
the Listing Rules.
The term of appointment of our Compliance Adviser shall commence on the Listing Date
and is expected to end on the date on which we comply with Rule 13.46 of the Listing Rules
in respect of our financial results for the first full financial year commencing after the Listing
Date.
CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
Save as disclosed in the paragraph headed “Competition under Rule 8.10 of the Listing
Rules” in the “Relationship with the Controlling Shareholders” section in this prospectus, each
of our Directors confirms that as of the Latest Practicable Date, he or she did not have any
interest in a business 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.
DIRECTORS AND SENIOR MANAGEMENT
– 317 –


--- page 328 ---
Rule 3.09D of the Listing Rules
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 July 2024, and (ii) understands his/her obligations
as a director of a listed issuer under the Listing Rules.
Rule 3.13 of 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) he/she
has no past or present financial or other interest in the business of our Company or its
subsidiaries or any connection with any core connected person of our 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
– 318 –


--- page 329 ---
So far as our Directors are aware, immediately following the completion of the
Capitalization Issue and the Global Offering (assuming the Over-allotment Option is not
exercised, and without taking into account any Shares which may be allotted and issued upon
the exercise of any options granted under the Pre-IPO Share Option Scheme, and any options
which may be granted under the Share Option Scheme), the following persons will have
interests and/or short positions in our Shares or underlying Shares which would fall to be
disclosed to us pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who
is, directly or indirectly, interested in 10% or more of the nominal value of any class of share
capital carrying rights to vote in all circumstances at general meetings of our Company:
Name of the
Substantial Shareholder
Capacity/Nature of
Interest
Immediately following the completion
of the Capitalization Issue and the
Global Offering (2)
Number of
Shares (1)
Approximate
percentage of
shareholding in
our Company
Eternal International /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 1,000,000,000 75.00%
Mr. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporation (3)(4)
1,000,000,000 75.00%
Mrs. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest of spouse (4) 1,000,000,000 75.00%
Notes:
(1) All interests stated are long positions.
(2) Assuming the Over-allotment Option is not exercised, and without taking into account any Shares which may
be allotted and issued upon the exercise of any options granted under the Pre-IPO Share Option Scheme and
any options which may be granted under the Share Option Scheme.
(3) Eternal International is owned as to 90% by Mr. Lau and 10% by Mrs. Lau. By virtue of the SFO, Mr. Lau
is therefore deemed to be interested in all the Shares in which Eternal International is interested in.
(4) Mrs. Lau is the spouse of Mr. Lau. By virtue of the SFO, Mrs. Lau is therefore deemed to be interested in all
the Shares that Mr. Lau is interested in.
If the Over-allotment Option is fully exercised, the interest of each of Eternal
International, Mr. Lau and Mrs. Lau in our Shares will be approximately 71.57%, 71.57% and
71.57%, respectively.
Except as disclosed above, our Directors are not aware of any persons who will,
immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), have an interest or a short position in the Shares or underlying Shares which would
fall to be disclosed to our Company and the Stock Exchange under the provisions of Divisions
2 or 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 member of our Group (other than our Company). Our Directors are not
aware of any arrangement which may at a subsequent date result in a change of control of our
Company.
SUBSTANTIAL SHAREHOLDERS
– 319 –


--- page 330 ---
SHARE CAPITAL
The following is a description of the authorized and issued share capital of our Company
in issue and to be issued as fully paid or credited as fully paid immediately following the
completion of the Capitalization Issue and the Global Offering.
Authorized Share Capital
As of the Latest Practicable Date, our authorized share capital was HK$7,000,000 divided
into 7,000,000,000 shares with par value of HK$0.001 each.
Issued Share Capital
Assuming the Over-allotment Option is not exercised, and without taking into account
any Shares which may be issued upon the exercise of any options granted under the Pre-IPO
Share Option Scheme and any options which may be granted under the Share Option Scheme,
the issued share capital of our Company immediately following the completion of the
Capitalization Issue and the Global Offering will be as follows:
Approximate
Percentage of
Issued Share
Capital
HK$ (%)
2 Shares in issue as at the date of this
prospectus
0.002 0.00
999,999,998 Shares to be issued under the
Capitalization Issue
999,999.998 75.00
333,400,000 Shares to be issued under the Global
Offering
333,400 25.00
1,333,400,000 Shares in total 1,333,400 100.00
SHARE CAPITAL
– 320 –


--- page 331 ---
Assuming the Over-allotment Option is exercised in full, and without taking into account
any Shares which may be issued upon the exercise of any options granted under the Pre-IPO
Share Option Scheme and any options which may be granted under the Share Option Scheme,
the issued share capital of our Company immediately following the completion of the
Capitalization Issue and the Global Offering will be as follows:
Approximate
Percentage of
Issued Share
Capital
HK$ (%)
2 Shares in issue as at the date of this
prospectus
0.002 0.00
999,999,998 Shares to be issued under the
Capitalization Issue
999,999.998 74.14
348,750,000 Shares to be issued under the Global
Offering
348,750 25.86
1,348,750,000 Shares in total 1,348,750 100.00
ASSUMPTIONS
The above tables assume that the Global Offering becomes unconditional, and Shares are
issued pursuant to the Capitalization Issue and the Global Offering. The above tables also do
not take into account any Shares that may be issued pursuant to (i) the exercise of the options
granted under the Pre-IPO Share Option Scheme and any options which may be granted under
the Share Option Scheme, and (ii) Shares that may be issued or repurchased by our Company
under the general mandates granted to our Directors to issue or repurchase Shares as described
below or otherwise.
RANKINGS
The Offer Shares will rank pari passu in all respects with all Shares currently in issue or
to be issued as mentioned in this prospectus, and will qualify and rank equally for all dividends
or other distributions declared, made or paid on the Shares on a record date which falls after
the date of this prospectus.
SHARE CAPITAL
– 321 –


--- page 332 ---
CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED
Pursuant to the Cayman Companies Act and the terms of the Memorandum and Articles
of Association, our Company may from time to time by Shareholders’ ordinary resolution (i)
increase its capital; (ii) consolidate and divide its capital 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, subject to the provisions of
the Cayman Companies Act and the Memorandum and Articles of Association, our Company
may by special resolution of our Shareholders reduce our share capital or capital redemption
reserve fund. For details, see “Summary of Constitution of Our Company and Cayman Island
Company Law — 2. Articles of Association — (a) Shares — (iii) Alteration of capital” in
Appendix III to this prospectus.
GENERAL MANDATE TO ISSUE SHARES
Subject to the Global Offering becoming unconditional, our Directors have been granted
a general unconditional mandate to allot, issue and deal with Shares in aggregate not
exceeding:
(a) 20% of the total number of Shares in issue (excluding treasury Shares) immediately
following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised and without taking into
account any Share that may be issued upon the exercise of any options granted under
the Pre-IPO Share Option Scheme and options which may be granted under the
Share Option Scheme); and
(b) the aggregate number of issued Shares which may be repurchased by our Company
(if any) under the mandate to repurchase Shares referred to below.
This general mandate to issue Shares will remain in effect until whichever is the earliest
of:
(a) the conclusion of our next annual general meeting; or
(b) the date by which our next annual general meeting is required by the Articles or any
applicable law to be held; or
(c) the passing of an ordinary resolution of our Shareholders in a general meeting
revoking or varying the authority given to our Directors.
For further details of this general mandate to allot, issue and deal with our Shares, please
see “Statutory and General Information — A. Further Information about Our Group — 4.
Resolutions in writing of our then sole Shareholder passed on June 6, 2025” in Appendix IV
to this prospectus.
SHARE CAPITAL
– 322 –


--- page 333 ---
GENERAL MANDATE TO REPURCHASE SHARES
Subject to the Global Offering becoming unconditional, our Directors have been granted
a general unconditional mandate to exercise all powers of our Company to repurchase Shares
in the number not exceeding 10% of the total number of Shares in issue (excluding treasury
Shares) immediately following the completion of the Capitalization Issue and the Global
Offering (assuming the Over-allotment Option is not exercised, and without taking into account
any Share which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and options which may be granted under the Share Option
Scheme).
This mandate only relates to repurchases made on the Stock Exchange or on any other
stock exchange on which our Shares may be listed (and which is recognized by the SFC and
the Stock Exchange for this purpose), and which are made in accordance with all applicable
laws and regulations and the requirements of the Listing Rules. A summary of the relevant
Listing Rules is set out in “Statutory and General Information — A. Further information about
Our Group — 5. Repurchase of our Shares” in Appendix IV to this prospectus.
This mandate to repurchase Shares will remain in effect until whichever is the earliest of:
(a) the conclusion of our next annual general meeting; or
(b) the date by which our next annual general meeting is required by the Articles or any
applicable law to be held; or
(c) the passing of an ordinary resolution of our Shareholders in a general meeting
revoking or varying the authority given to our Directors.
For further details of this general mandate to repurchase Shares, please see “Statutory and
General Information — A. Further Information about our Group — 4. Resolutions in writing
of our then sole Shareholder passed on June 6, 2025” in Appendix IV to this prospectus.
PRE-IPO SHARE OPTION SCHEME AND SHARE OPTION SCHEME
Our Company adopted the Pre-IPO Share Option Scheme on June 18, 2024 and
conditionally adopted Share Option Scheme on June 6, 2025. For further details of the Pre-IPO
Share Option Scheme and Share Option Scheme, see “Statutory and General Information — E.
Pre-IPO Share Option Scheme” and “F. Share Option Scheme” in Appendix IV to this
prospectus, respectively.
SHARE CAPITAL
– 323 –


--- page 334 ---
Y ou should read the following discussion in conjunction with the consolidated
financial statements and the notes thereto included in the Accountant’s Report in
Appendix I to this prospectus which has been prepared in accordance with HKFRSs,
and the selected historical financial information and operating data included elsewhere
in this prospectus.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance.
These statements are based on our assumptions and analysis in light of our experience
and perception of historical trends, current conditions and expected future
development, as well as other factors we believe are appropriate under the
circumstances. However, whether actual outcomes and developments will meet our
expectations and predictions depends on a number of risks and uncertainties. In
evaluating our business, you should carefully consider the information provided in the
sections headed “Risk Factors” and “Forward-Looking Statements” and elsewhere in
this prospectus.
OVERVIEW
Our business primarily consists of (i) the distribution of products procured from brand
licensors, from which we generate our revenue; and (ii) the market deployment for these brand
licensors, through which we design and implement customized market entry and expansion
plans for brands and thereby, strengthen our relationship with them and enhance their brand
value in China (including Hong Kong and Macau). We do not generate any revenue from the
market deployment component of our business. We are the largest perfume group in China
(including Hong Kong and Macau) apart from brand-owner perfume groups in terms of retail
sales in 2023. We have a large and diverse portfolio of iconic brands of not only perfumes, but
also color cosmetics, skincare products, personal care products, eyewear and home fragrances.
Our product distribution and market deployment for the global brands cover the entire
business process, including strategic selection of brand and product, market and consumer
analysis, business development and expansion plans, product procurement, inventory
management, logistics, warehousing, marketing, sales and distribution, and consumer
relationship management. Accordingly, we occupy an important segment in the global
industrial value chain for perfumes, skincare products, color cosmetics, personal care products,
eyewear and home fragrances. Our business primarily comprises two key components that
enable global brands to gain a foothold and continue to expand their presence and penetration
in China (including Hong Kong and Macau), namely, (i) distribution of their branded products
in China (including Hong Kong and Macau), in which we distribute the products to a wide
range of consumers through our omni-channel sales and distribution network; and (ii) market
deployment, in which we conduct market and consumer analysis, and prepare business
development and expansion plans for the brands.
FINANCIAL INFORMATION
– 324 –


--- page 335 ---
We have a comprehensive sales and distribution network that covers a large number of
access points for perfumes, skincare products, color cosmetics, personal care products,
eyewear and home fragrances in China (including Hong Kong and Macau). During the Track
Record Period, our sales and distribution network consisted of (i) direct sales channels, which
consisted of self-operated online stores and offline stores/counters; (ii) retailer channels, in
which we sell products to online and offline retailers; and (iii) distribution channels, in which
we sell products to online and offline distributors.
For the years ended March 31, 2023, 2024 and 2025, our revenue amounted to
RMB1,699.1 million, RMB1,863.8 million and RMB2,083.4 million, respectively. For the
same periods, we generated a majority of our revenue from perfumes, which accounted for
approximately 88.5%, 81.7% and 80.9% of our total revenue, respectively. For the same
periods, the majority of our revenue derived from sales made through direct sales channels and
retailer channels, which in the aggregate accounted for 64.7%, 69.3% and 69.3%, respectively,
of our total revenue. For the years ended March 31, 2023, 2024 and 2025, we recorded net
profit of RMB173.1 million, RMB206.5 million and RMB227.0 million, respectively.
MAJOR FACTORS AFFECTING OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Our Group’s business and historical financial condition and results of operations are
affected by a number of important factors, which we believe will continue to affect our
financial condition and results of operations in the future. These factors primarily include:
Macro Economic Environment and the Development of the Industries Where We Operate
Our business and operating results are affected by the general factors affecting the
cosmetics industry, which encompasses perfumes, skincare products, color cosmetics and
personal care products, and the eyewear and home fragrances industries, which include:
 the development of the macro economy in China (including Hong Kong and Macau);
 changes in per capita disposable income and per capita expenditure on perfumes,
skincare products, color cosmetics, personal care products, eyewear and home
fragrances;
 evolving consumption patterns and habits in China (including Hong Kong and
Macau), especially relating to cosmetics, including perfumes, skincare products,
color cosmetics, personal care products, and eyewear and home fragrances;
 continuous growth and evolving online and offline competitive landscape of the
cosmetics industry, including the markets for cosmetics, including perfumes,
skincare products, color cosmetics, personal care products, and eyewear and home
fragrances markets in China (including Hong Kong and Macau); and
FINANCIAL INFORMATION
– 325 –


--- page 336 ---
 governmental policies, initiatives and incentives affecting the cosmetics industry,
eyewear industry and home fragrances industry in China (including Hong Kong and
Macau).
Unfavorable changes and any challenges in any of these general industry conditions could
materially and adversely affect demand for the products we sell, and therefore materially and
adversely affect our results of operations.
Consumer Demand and Consumption Patterns
Our results of operation are also affected by the consumer demand and consumption
patterns in the industries where we operate, which in turn largely depend on the growth of the
disposable income in China (including Hong Kong and Macau) as well as other factors that
may contribute significantly to the changes in our sales. During the Track Record Period, we
have benefitted from an increased demand for the products we sell as a result of the continued
growth of the perfumes, skincare, color cosmetics, personal care, eyewear and home fragrance
industries in mainland China. According to Frost & Sullivan, (i) the market size of perfumes
industry in mainland China in terms of retail sales increased from RMB11.4 billion in 2018 to
RMB22.9 billion in 2023, representing a CAGR of approximately 15.0%; (ii) the market size
of skincare products industry in mainland China in terms of retail sales increased from
RMB309.7 billion in 2018 to RMB463.0 billion in 2023, representing a CAGR of
approximately 8.4%; (iii) the market size of color cosmetics industry in mainland China in
terms of retail sales increased from RMB93.0 billion in 2018 to RMB116.8 billion in 2023,
representing a CAGR of approximately 4.7%; (iv) the market size of personal care industry in
mainland China in terms of retail sales increased from RMB202.2 billion in 2018 to RMB268.5
billion in 2023, representing a CAGR of approximately 5.8%; (v) the market size of eyewear
industry in mainland China in terms of retail sales increased from RMB83.4 billion in 2018 to
RMB91.3 billion in 2023, representing a CAGR of approximately 1.8%; and (vi) the market
size of home fragrance industry in mainland China in terms of retail sales increased from
RMB1.7 billion in 2018 to RMB6.4 billion in 2023, representing a CAGR of approximately
30.4%.
A slowdown or reversal of the market development trends and any change of consumers’
demand could have a material and adverse effect on the demand for the products we promote
and sell. According to Frost & Sullivan, the demands of the middle class and younger
generation in mainland China for beauty and personality expression associated with the
development of olfactory economy have become the key growth drivers in mainland China’s
cosmetics industry. In addition, we are subject to the changes in economic conditions affecting
the level of consumer spending on the products we sell. Consumer spending patterns are
affected by, among other factors, business conditions, interest rates, taxation, local economic
conditions, uncertainties about future economic prospects and shifts in discretionary spending.
For details, please refer to the section headed “Risk Factors — Risks Relating to Our Business
and Industry — We are dependent on the consumers’ spending on, and their demand for, the
products we sell. A reduction in their spending or demand could have a material adverse effect
on our business, financial condition, results of operations, cash flows and prospects” in this
prospectus.
FINANCIAL INFORMATION
– 326 –


--- page 337 ---
Brand Licensors and Brands and Products Portfolio
The quality and quantity of the brands and branded products in our portfolio are
significant to our business and results of operations, and our ability to maintain our revenue
growth and profitability. We primarily sell a wide variety of perfumes, skincare products, color
cosmetics, personal care products, eyewear and home fragrances under numerous brands in
China (including Hong Kong and Macau). Our profitability is affected by the mix of the brands
and products we offer. To maintain and continuously expand our brands and products portfolio,
we need to obtain licenses from and renew licenses with our brand licensors to promote the
brands and distribute the products. We negotiate with brand licensors to offer different product
mixes and product pricing strategies, which may entail different terms on discounts and
rebates, sales targets, credit and limitations on distribution areas and channels. We rely on our
brand licensors to provide us with sufficient quantities of high-quality products that meet
consumers demand. We strive to maintain an optimal brand and product portfolio by
strengthening our strategic business relationships with our existing brand licensors and adding
new brands and products to our brand and product portfolio.
During the Track Record Period, the majority of revenue of our Group was generated
from the sales of perfumes, which accounted for approximately 88.5%. 81.7% and 80.9% of
our total revenue for the years ended March 31, 2023, 2024 and 2025, respectively. For the
same periods, the revenue generated by sales of skincare products, color cosmetics and
eyewear products accounted for 5.1%, 6.1% and 7.3%, 4.0%, 10.4% and 10.9%, 0.5%, 1.2%
and 0.6%, respectively, of our total revenue. The gross profit of the perfumes amounted to
RMB738.0 million, RMB739.2 million and RMB817.2 million for the years ended March 31,
2023, 2024 and 2025, respectively, and the gross profit margin of perfumes was 49.1%, 48.5%
and 48.4% for the same periods, respectively. As such, our Directors consider that a change of
product portfolio could affect our business and results of operations.
Expanding and Maintaining Our Sales and Distribution Network
We have an extensive omni-channel sales and distribution network with high penetration
in both offline and online channels. Our sales channels cover a large number of access points
to consumers for the products we offer in China (including Hong Kong and Macau), including
(i) direct sales channels, in which we sell products directly to consumers through our
self-operated online and offline stores or counters; (ii) retailer channels, in which we sell
products to online and offline retailers; and (iii) distribution channels, in which we sell
products to online and offline distributors.
FINANCIAL INFORMATION
– 327 –


--- page 338 ---
For the years ended March 31, 2023, 2024 and 2025, the revenue generated by our direct
sales channels amounted to RMB338.6 million, RMB447.3 million and RMB431.4 million,
which accounted for approximately 19.9%, 24.0% and 20.7% of the total revenue, respectively,
for the same periods. For the years ended March 31, 2023, 2024 and 2025, the revenue
generated by our retailer channels amounted to RMB761.1 million, RMB844.7 million and
RMB1,012.8 million, accounting for 44.8%, 45.3% and 48.6% of our total revenue,
respectively, for the same periods. Among the retailer channels, our online retailers and key
accounts made important contribution to our revenue during the Track Record Period, which
accounted for 21.0%, 17.6% and 18.6%, and 18.6%, 20.4% and 18.7% of our total revenue for
the years ended March 31, 2023, 2024 and 2025, respectively. As such, significant changes in
our business relationships with online retailers and key accounts could affect our revenue and
profitability. For the years ended March 31, 2023, 2024 and 2025, the revenue generated by our
distribution channels amounted to RMB567.2 million, RMB560.5 million and RMB633.6
million, which accounted for approximately 33.4%, 30.1% and 30.4% of our total revenue,
respectively, for the same periods.
We plan to further expand our direct sales channels in China (including Hong Kong and
Macau), especially offline counters and stores. Please refer to the section headed “Business —
Our Business Strategies — Extend our consumer reach through continued investment in our
direct sales channels” in this prospectus for details. For the years ended March 31, 2023, 2024
and 2025, revenue generated by our direct sales channels accounted for approximately 19.9%,
24.0% and 20.7% of our total revenue, respectively, among which, revenue generated by our
self-operated online stores accounted for approximately 7.3%, 6.8% and 7.9% of our total
revenue, respectively, and revenue generated by our self-operated offline stores/counters
accounted for approximately 12.6%, 17.2% and 12.8% of our total revenue, respectively. We
expect that the expansion of our direct sales channels will contribute to the growth of our
revenue going forward. However, in the event we are unable to execute our business expansion
strategies, especially those relating to the expansion of our direct sales channels, our business,
financial condition and results of operations could be materially and adversely affected. For
details, please refer to the section headed “Risk Factors — Risks Relating to Our Business and
Industry — We may encounter difficulties in maintaining, expanding or optimizing our sales
and distribution network” in this prospectus.
Supply Chain Management
We generally handle all matters in the supply chain process for the products that we
sourced from our brand licensors, including importation compliance, warehousing and logistics
support. We procure products from the brand licensors, which are primarily based in foreign
countries, according to our product procurement plans, during which process we leverage our
extensive experience and expertise in the international trade to ensure that the products we
source are in compliance with applicable importation and customs requirements. We have
designated in-house teams to either directly or engage Independent Third-party service
providers to apply for product registration, and arrange labelling and repacking according to
the applicable laws and regulations in China (including Hong Kong and Macau). We may store
the inventories at the warehouses leased from Independent Third Parties on a temporary basis
FINANCIAL INFORMATION
– 328 –


--- page 339 ---
until further logistics arrangements. In addition to leased warehouses, as of March 31, 2025,
we engaged three Independent Third-party warehousing and logistics service provider that
provided warehousing and delivery services to us with respect to the products stored in their
warehouses in mainland China. We primarily engage Independent Third-party logistics service
providers to transport and deliver the products from our leased warehouses to our customers.
Our ability to effectively manage and integrate resources along our supply chain is crucial
to our business operation and results of operations. Leveraging our profound industry
experience, we manage inventories to minimize risks relating to shortage or excess of products
supply. We aim to further enhance our supply chain management capabilities to improve our
operation and management efficiencies, as well as our financial performance. For details,
please refer to the section headed “Business — Our Business Strategies — Accelerate digital
transformation to streamline our business operations and strengthen the support for our
full-cycle consumer management program” in this prospectus.
Branding and Marketing Activities
The effectiveness of our branding and marketing activities is critical to our financial
performance. As part of the brand building and enhancement initiatives we undertake for the
brands in our brand portfolio, we formulate and implement business development and
expansion plans for them, which include, among other things, tailor-made marketing plans that
meet the individual demands of the brand licensors. Under these plans, we choose the ideal
marketing channels for promotion of products we sell, including, among others, social media
platforms, online store banners on e-commerce platforms, authoritative media such as
newspapers and magazines, face-to-face consumer events, exhibitions in shopping malls and
roadshows. In addition, we regularly attend industry conferences and periodically publish
research papers to enhance the recognition of our Group among the industry players. For
further details of our branding and marketing activities, please refer to the section headed
“Business — Marketing and Promotion” in this prospectus. For the years ended March 31,
2023, 2024 and 2025, our advertising and promotion expenses amounted to RMB113.5 million,
RMB80.3 million and RMB165.2 million, which accounted for approximately 6.7%, 4.3% and
7.9% of our total revenue for the same periods, respectively. We intend to continue to
efficiently utilize our available resources and lower the proportion of advertising and
promotion expenses to our total revenue, while keeping the branding and marketing initiatives
effective in driving our revenue and business expansion. Our failure to do so could materially
and adversely affect our business and results of operation.
FINANCIAL INFORMATION
– 329 –


--- page 340 ---
BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL
INFORMATION
The Historical Financial Information has been prepared under the historical cost
convention, except for financial asset at fair value of profit or loss (“FVPL”), which is
measured at fair value. The preparation of the Historical Financial Information in conformity
with HKFRSs requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying our Group’s accounting
policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the Historical Financial Information are disclosed
in note 4 to the Accountant’s Report in Appendix I to this prospectus. The Historical Financial
Information is presented in RMB and all values are rounded to the nearest thousand
(RMB’000) except when otherwise indicated. The Historical Financial Information have been
prepared in accordance with HKFRSs issued by HKICPA. HKFRSs comprise the following
authoritative literature: (i) Hong Kong Financial Reporting Standards; (ii) Hong Kong
Accounting Standards; and (iii) Interpretations developed by the Hong Kong Institute of
Certified Public Accountants.
Historically, our business in Hong Kong was mainly conducted through Eternal Far East
and Visual Promotion, which was 100% beneficially owned by Mr. Lau. As Visual Promotion
and our Group were under common control of Mr. Lau throughout the Track Record Period,
certain assets, liabilities and results of operations relating to the business of Visual Promotion
during the Track Record Period were included in the financial information of our Group.
During the Track Record Period, in order to streamline our Group’s structure and to conduct
its business under the “Eternal” brand, we gradually diminished the business scale of Visual
Promotion and it ceased to conduct any business since April 2024. Given that it no longer
conducts any business and we expect to deregister such company, we have not included Visual
Promotion in our Group. Please refer to section headed “History, Development and Corporate
Structure — Corporate Development and Reorganization” and notes 1.2 and 1.3 to the
Accountant’s Report in Appendix I to this prospectus for further details.
MATERIAL ACCOUNTING POLICIES
We have identified certain accounting policies that we believe are most material to the
preparation of our consolidated financial statements. Some of our material accounting policies
involve subjective assumptions and estimates, as well as complex judgments by our
management relating to accounting items. The estimates and associated assumptions are based
on our historical experience and various other relevant factors that we believe are reasonable
under the circumstances, the results of which form the basis of making judgments about
carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates.
FINANCIAL INFORMATION
– 330 –


--- page 341 ---
We set forth below those accounting policies that we believe are of critical importance to
us or involve significant estimates, assumptions and judgements in the preparation of our
financial statements. Our material accounting policies are set out in respective notes in the
Accountant’s Report and key estimation uncertainty are set forth in detail in notes 4 of the
Accountant’s Report included in Appendix I to this prospectus.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable, and
represents amounts receivable for goods supplied, stated net of discounts granted. Discounts
granted to customers are classified as a reduction of revenue. Our Group recognizes revenue
when the amount of revenue can be reliably measured, when it is probable that future economic
benefits will flow to our Group, and when specific criteria have been met for each of our
Group’s activities as described below.
Sales of Goods
Our Group operates a chain of retail stores and consignment counters in China (including
Hong Kong and Macau) selling perfumes, skincare products, color cosmetics, personal care
products, eyewear and home fragrances. Revenue from the sale of goods is recognized when
control of the products has been transferred to the customer. Payment of the transaction price
is due immediately when the customer purchases the products.
Our Group also engages in the wholesale and distribution of perfumes, skincare products,
color cosmetics, personal care products, eyewear and home fragrances to retailers and
distributors in mainland China and Hong Kong. Sales are recognized when the control of the
products has been transferred, namely, when the products are delivered to the retailers and
distributors, the retailers and distributors have full discretion over the channel and price to sell
the products, and there is no unfulfilled obligation that could affect the acceptance of the
products by the retailers and distributors.
Service Income
Our Group operates and manages the daily operation of the online and offline stores of
certain customers under their brand names and charges service fee in connection therewith.
Revenue from rendering of services is recognized over the period in which the services are
rendered.
Sales Rebates
Retrospective sales rebates may be provided to certain customers once the quantity of
products purchased during the period exceeds a threshold specified in the contract. Rebates are
recognized in contract liabilities of our Group. To estimate the variable consideration for the
expected future rebates, the most likely amount method is used for contracts with a single
volume threshold and the expected value method for contracts with more than one volume
FINANCIAL INFORMATION
– 331 –


--- page 342 ---
threshold. The selected method that best predicts the amount of variable consideration is
primarily driven by the number of volume thresholds contained in the contract. Accumulated
experience is used to estimate the provision for the sales rebates and revenue is only recognized
to the extent that it is highly probable that a significant reversal will not occur.
Sales Returns
For contracts which provide a customer with a right to return the goods within a specified
period, the expected value method is used to estimate the goods that will not be returned
because this method best predicts the amount to which our Group will be entitled. Refund
liabilities, which are reduced from revenue, are estimated based on historical data our Group
has maintained and subject to adjustments to the extent that actual returns differ or expected
to differ.
Contract Liabilities
When either party to a contract has performed, the Group presents the contract in the
statement of financial position as contract assets or contract liabilities, depending on the
relationship between our Group’s performance and the customer’s payment. Contract liabilities
are our Group’s obligation to transfer products or services to its customer for which the Group
has received consideration from the customer.
Property, Plant and Equipment
Our Group’s property, plant and equipment are stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure that is directly attributable
to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to our Group and the cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate asset is derecognized when replaced. All
other repairs and maintenance are charged to profit or loss during the reporting period in which
they are incurred. The assets’ residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each financial year of the Track Record Period. An asset’s carrying
amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount. Gains and losses on disposals are determined
by comparing proceeds with carrying amount. These are included in profit or loss. When
revalued assets are sold, it is group policy to transfer any amounts included in other reserves
in respect of those assets to retained earnings.
FINANCIAL INFORMATION
– 332 –


--- page 343 ---
Depreciation on property, plant and equipment is calculated using the straight-line
method to allocate their cost to their residual values, where appropriate, over their estimated
useful lives, as follows:
Leasehold Improvements
Over 3 Y ears or Remaining Period of the
Lease, Whichever is Shorter
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182-3%
Air-conditioning plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810%
Furniture and fixtures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820%
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820%
Computer equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833%
Financial Assets
Our Group classifies its financial assets in the following measurement categories: (i)
those to be measured subsequently at fair value through profit or loss; and (ii) those to be
measured at amortized cost. The classification depends on the entity’s business model for
managing the financial assets and the contractual terms of the cash flows.
Regular purchases and sales of financial assets are recognized on trade-date, the date on
which our Group commits to purchase or sell the asset. Financial assets are derecognized when
the rights to receive cash flows from the financial assets have expired or have been transferred
and our Group has transferred substantially all the risks and rewards of ownership.
Trade and Other Receivables
Trade and other receivables are amounts due from customers for the merchandise sold or
services performed by our Group in the ordinary course of business. If collection of trade and
other receivables is expected in one year or less (or in the normal operating cycle of the
business if longer), they are classified as current assets. If no, they are presented as non-current
assets. Trade and other receivables are recognized initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision for impairment.
Current and Deferred Income Tax
The tax expense for the year comprises current and deferred income tax. Tax is recognized
in the profit or loss, except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the tax is also recognized in other
comprehensive income or directly in equity, respectively.
FINANCIAL INFORMATION
– 333 –


--- page 344 ---
Current Income Tax
The current income tax is calculated on the basis of the tax laws enacted or substantively
enacted at the reporting date in the country where our Group operates and generate taxable
income. Our management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation and considers whether
it is probable that a taxation authority will accept an uncertain tax treatment. Our Group
measures its tax balances either based on the most likely amount or the expected value,
depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred Income Tax
Deferred income tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, deferred tax liabilities are not recognized if
they arise from the initial recognition of goodwill. Deferred income tax is also not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable
profit or loss and does not give rise to equal taxable and deductible temporary differences.
Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the end of each Track Record Period and are expected to apply when
the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognized only if it is probable that future taxable amounts will
be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognized for temporary differences between
the carrying amount and tax bases of investments in foreign operations where our Company is
able to control the timing of the reversal of the temporary differences and it is probable that
the differences will not reverse in the foreseeable future.
Offsetting
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred income
taxes assets and liabilities relate to income taxes levied by the same taxation authority on either
the taxable entity or different taxable entities where there is an intention to settle the balances
on a net basis.
FINANCIAL INFORMATION
– 334 –


--- page 345 ---
Trade and Other Payables
Trade and other payables represent liabilities for goods and services provided to the
Group prior to the end of financial year which are unpaid. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months after the reporting
period. They are recognized initially at their fair value and subsequently measured at amortised
cost using the effective interest method.
Provisions
Provisions are recognized when our Group has a present legal or constructive obligation
as a result of past events. It is probable that an outflow of resources will be required to settle
the obligation, for which the amount of the provision has been reliably estimated. Provisions
are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. A
provision is recognized even if the likelihood of an outflow with respect to any one item
included in the same class of obligations may be small.
Provisions are measured at the present value of our management’s best estimate of the
expenditures required to settle the obligation using a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the obligation.
Leases
Our Group leases various offices, warehouses, shops, counters, copy machines and
leasehold land. Rental contracts are typically made for fixed periods of 1 year to 3 years but
may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of different
terms and conditions. The lease agreements do not impose any covenants other than the
security interests in the leased assets that are held by the lessor. Leased assets may not be used
as security for borrowing purposes.
Leases are recognised as right-of-use assets and corresponding liabilities at the date at
which the leased asset is available for use by our Group.
FINANCIAL INFORMATION
– 335 –


--- page 346 ---
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
 fixed payments (including in-substance fixed payments), less any lease incentives
receivable; and
 payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate
cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate
that the individual lessee would have to pay to borrow the funds necessary to obtain an asset
of similar value to the right-of-use assets in a similar economic environment with similar
terms, security and conditions. To determine the incremental borrowing rate, our Group:
 where possible, uses recent third-party financing received by the individual lessee
as a starting point, adjusted to reflect changes in financing conditions since third
party financing was received;
 uses a build-up approach that starts with a risk-free interest rate adjusted for credit
risk for leases held by our Group, which does not have recent third party financing;
and
 makes adjustments specific to the lease, e.g., term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is
charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
 the amount of the initial measurement of lease liability;
 any lease payments made at or before the commencement date less any lease
incentives received;
 any initial direct costs; and
 restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and
the lease term on a straight-line basis. If our Group is reasonably certain to exercise a purchase
option, the right-of-use assets are depreciated over the underlying asset’s useful life.
FINANCIAL INFORMATION
– 336 –


--- page 347 ---
Payments associated with short-term leases are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Our Group has adopted Amendment to HKFRS 16 — Covid-19-Related Rent Concessions
from April 1, 2021. The amendment provides an optional practical expedient allowing lessees
to elect not to assess whether a rent concession related to COVID-19 is a lease modification.
Lessees adopting this election may account for qualifying rent concessions in the same way as
they would if they were not lease modifications. The practical expedient only applies to rent
concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of
the following conditions are met: a. the change in lease payments results in revised
consideration for the lease that is substantially the same as, or less than, the consideration for
the lease immediately preceding the change; b. any reduction in lease payments affects only
payments due on or before 30 June 2022; and c. there is no substantive change to other terms
and conditions of the lease.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
Our Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results. These
estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are addressed below.
Impairment of Non-financial Assets
Our management assesses at the end of each reporting period whether there is objective
evidence that the investments in non-financial assets, including property, plant and equipment,
right-of-use assets and intangible assets, are impaired. The assessment of impairment requires
the use of judgement and estimates. Where the expectation is different from the original
estimate, such difference will impact the carrying amount of the assets and impairment in the
period in which such estimates have been changed.
Net Realizable Value of Inventories
Net realizable value of inventories is the estimated selling price in the ordinary course of
business, less estimated selling expenses. These estimates are based on the current market
condition and the historical experience of selling products of similar nature. It could change
significantly as a result of changes in customer taste and competitor actions in response to
severe industry cycle. Our management reassesses these estimates at the end of each reporting
date.
FINANCIAL INFORMATION
– 337 –


--- page 348 ---
Provision of Financial Assets
The loss allowances for financial assets are based on assumptions about risk of default
and expected loss rates. Our Group used judgement in making these assumptions and selecting
the inputs to the impairment calculation, based on our Group’s past history, existing marketing
conditions as well as forward looking estimates at the end of each reporting period.
Current and Deferred Income Taxes
Our Group is subject to income tax in mainland China and Hong Kong. Significant
judgement is required in determining the provision for income tax in each of these
jurisdictions. There are many transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. Where the final tax outcome
of these matters is different from the amounts that were initially recorded, such differences will
impact the income tax and deferred tax provisions in the period in which such determination
is made.
Deferred tax assets relating to certain temporary differences and tax losses are recognized
when our management considers it is probable that future taxable profits will be available
against which the temporary differences or tax losses can be utilised. Deferred tax liabilities
relating to temporary differences between the carrying amount and tax bases of investments in
foreign operations are not recognized where we are able to control the timing of the reversal
of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future. When the expectation is different from the original estimate, such
differences will impact the recognition of deferred tax assets/liabilities and taxation charges in
the period in which such estimate is changed.
FINANCIAL INFORMATION
– 338 –


--- page 349 ---
RESULTS OF OPERATIONS
The table below presents a summary of our consolidated statement of profit or loss and
comprehensive income for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 1,863,761 2,083,363
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(843,153) (925,570) (1,035,246)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118855,991 938,191 1,048,117
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(457,520) (514,569) (592,943)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(169,954) (202,670) (207,831)
(Provision for)/reversal of impairment
of financial assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(622) (474) 605
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,057 12,346 6,868
Other (losses)/gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,818) (1,272) 13,402
Operating profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223,134 231,552 268,218
Finance income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,468 8,063 1,692
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,667) (4,034) (6,225)
Finance income/(cost), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,801 4,029 (4,533)
Share of loss of a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,964) (2,989)
Profit before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,935 232,617 260,696
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(53,829) (26,144) (33,667)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,106 206,473 227,029
Other comprehensive income
Items that may be subsequently
reclassified to profit or loss:
Exchange differences on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,148 17,333 5,416
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,254 223,806 232,445
FINANCIAL INFORMATION
– 339 –


--- page 350 ---
DESCRIPTION OF MAJOR COMPONENTS OF OUR CONSOLIDATED
STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
Revenue
Revenue by Product
During the Track Record Period, we generated revenue primarily from the sales of
perfumes, skincare products, color cosmetics, personal care products, eyewear and home
fragrances. For the years ended March 31, 2023, 2024 and 2025, our revenue amounted to
RMB1,699.1 million, RMB1,863.8 million and RMB2,083.4 million, respectively. The
following table sets forth a breakdown of our revenue by product category for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Perfumes (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,504,184 88.5 1,523,737 81.7 1,687,703 80.9
Skincare products /H1118/H1118/H1118/H1118/H1118/H1118/H111887,136 5.1 114,355 6.1 151,856 7.3
Color cosmetics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,932 4.0 193,008 10.4 226,209 10.9
Eyewear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,679 0.5 21,458 1.2 11,982 0.6
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 1.9 11,203 0.6 5,613 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 100.0 1,863,761 100.0 2,083,363 100.0
Notes:
(1) The revenue generated from our sales of personal care products and home fragrances was primarily
recorded under “perfumes” during the Track Record Period because certain perfume brands in our brand
portfolio also offered personal care products and/or home fragrances, and the amount of revenue
generated from our sales of these products was insignificant during the Track Record Period. For each
of the years ended March 31, 2023, 2024 and 2025, the aggregate revenue generated from our sales of
personal care products and home fragrances accounted for no more than 2.0% of our total revenue.
(2) During the Track Record Period, we operated and managed the daily operations of the online and offline
stores under their respective brand names for certain of our customers and charged service fee in
connection therewith. Others mainly include the service income derived from the charges arising from
such agency services.
For the years ended March 31, 2023, 2024 and 2025, we generated a majority of our
revenue from the sales of perfumes, which amounted to RMB1,504.2 million, RMB1,523.7
million and RMB1,687.7 million, representing 88.5%, 81.7% and 80.9% of our total revenue,
respectively. For the same periods, the amount of revenue from the sales of skincare products
FINANCIAL INFORMATION
– 340 –


--- page 351 ---
and color cosmetics amounted to RMB87.1 million, RMB114.4 million and RMB151.9 million,
and RMB67.9 million, RMB193.0 million and RMB226.2 million, respectively, representing
5.1%, 6.1% and 7.3%, and 4.0%, 10.4% and 10.9% of our total revenue, respectively.
During the Track Record Period, a small amount of revenue generated by perfumes and
eyewear was contributed by our self-owned brand, Santa Monica, which amounted to RMB5.3
million, RMB17.0 million and RMB10.5 million for the years ended March 31, 2023, 2024 and
2025, respectively, representing 0.3%, 0.9% and 0.5% of our total revenue, respectively.
Revenue by Channel
In terms of sales and distribution channels, our revenue mainly consists of the sales
derived from direct sales channels, retailer channels and distribution channels. The following
table sets forth a breakdown of our revenue by sales and distribution channels for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Direct sales channels
 Online stores /H1118/H1118/H1118/H1118/H1118/H1118/H1118123,786 7.3 126,144 6.8 163,698 7.9
 Offline
stores/counters /H1118/H1118/H1118/H1118/H1118/H1118214,831 12.6 321,186 17.2 267,675 12.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118338,617 19.9 447,330 24.0 431,373 20.7
Retailer channels
 Online retailers (1) /H1118/H1118/H1118/H1118356,427 21.0 327,627 17.6 388,242 18.6
 Offline retailers (2) /H1118/H1118/H1118404,713 23.8 517,122 27.7 624,521 30.0
– Key accounts (3) /H1118/H1118/H1118315,656 18.6 380,481 20.4 389,050 18.7
– Travel retailers /H1118/H1118/H111889,057 5.2 136,641 7.3 235,471 11.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118761,140 44.8 844,749 45.3 1,012,763 48.6
Distribution channels
 Online distributors /H1118/H1118/H1118254,832 15.0 216,322 11.6 204,261 9.8
 Offline distributors /H1118/H1118/H1118312,342 18.4 344,157 18.5 429,353 20.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118567,174 33.4 560,479 30.1 633,614 30.4
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 1.9 11,203 0.6 5,613 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,699,144 100.0 1,863,761 100.0 2,083,363 100.0
FINANCIAL INFORMATION
– 341 –


--- page 352 ---
Notes:
(1) Online retailers are retailers that purchase products from us and directly sell them to consumers through online
platforms, such as e-commerce platforms and third-party companies that represent KOLs. The information was
prepared by our finance team based on sales agreements with the online retailer customers to the extent
available or internal records prepared by our sales team and reviewed by our finance team.
(2) Offline retailers include both key accounts, which are generally chained cosmetics specialty stores in mainland
China, Hong Kong and Macau where the products procured from us are directly sold to consumers, and travel
retailers, which are primarily airports, airlines, cruises and downtown duty-free shops where the products
procured from us are directly sold to consumers.
(3) The revenue generated from the sales to key accounts for the year ended March 31, 2025 included the revenue
generated from the sales to a third party retailer which operated a Perfume Box store in Ningbo, Zhejiang
Province. For the year ended March 31, 2025, our revenue from sales to this third party amounted to RMB0.5
million. Other than this Perfume Box store, all other Perfume Box stores in mainland China as of March 31,
2025, including five offline Perfume Box stores and four online Perfume Box stores, were directly operated
by us. The revenue generated from our self-operated Perfume Box stores during the Track Record Period was
recorded under direct sales channels. For details, please refer to the section headed “Business — Sales and
Distribution of Products — Direct Sales Channels — Perfume Box” in this prospectus.
(4) During the Track Record Period, we operated and managed the daily operations of the online and offline stores
under their respective brand names for certain of our customers and charged service fee in connection
therewith. Others primarily include service income deriving from charges arising from such agency services.
Revenue generated from our online channels, which consist of online retailers, self-
operated online stores and online distributors, amounted to RMB735.0 million, RMB670.1
million and RMB756.2 million, respectively, for the years ended March 31, 2023, 2024 and
2025, which accounted for approximately 43.3%, 36.0% and 36.3%, respectively, of our total
revenue for the same periods. Revenue generated from our offline channels, which consist of
offline retailers, self-operated offline stores and offline distributors, amounted to RMB931.9
million, RMB1,182.5 million and RMB1,321.5 million, respectively, for the years ended March
31, 2023, 2024 and 2025, and accounted for 54.8%, 63.4% and 63.4%, respectively, of our total
revenue for the same periods.
Revenue generated from our retailer channels amounted to RMB761.1 million,
RMB844.7 million and RMB1,012.8 million for the year ended March 31, 2023, 2024 and
2025, respectively, which accounted for 44.8%, 45.3% and 48.6%, respectively, of our total
revenue for the same periods.
Revenue generated from our direct sales channels amounted to RMB338.6 million,
RMB447.3 million and RMB431.4 million for the year ended March 31, 2023, 2024 and 2025,
respectively, which accounted for 19.9%, 24.0% and 20.7%, respectively, of our total revenue
for the same periods.
Revenue generated from our distribution channels amounted to RMB567.2 million,
RMB560.5 million and RMB633.6 million for the year ended March 31, 2023, 2024 and 2025,
which accounted for 33.4%, 30.1% and 30.4%, respectively, of our total revenue for the same
periods.
FINANCIAL INFORMATION
– 342 –


--- page 353 ---
In addition, we generated service income during the Track Record Period, mainly
comprising the service fee we received from certain customers for operating and managing the
daily operations of online and offline stores/counters for them. For the years ended March 31,
2023, 2024 and 2025, our total service income amounted to RMB32.2 million, RMB11.2
million and RMB5.6 million, respectively, which accounted for 1.9%, 0.6% and 0.3%,
respectively, of our total revenue.
Cost of Sales
Our cost of sales primarily include (i) cost of goods sold, which mainly consists of the
cost of procuring the products we sell and related customs tax; (ii) staff cost, which primarily
represent the fees associated with the provision of our agency services for certain of our
customers; and (iii) others, which primarily include the provision we make for possible
decrease of the number of products we have in stock, transportation expenses associated with
our procurement of products from our suppliers, and business tax and surcharges relating to our
inventories. For the years ended March 31, 2023, 2024 and 2025, our cost of sales amounted
to RMB843.2 million, RMB925.6 million and RMB1,035.2 million, respectively. The
following table sets forth the components of the cost of sales and the components as a
percentage of the total cost of sales for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Cost of goods sold /H1118/H1118/H1118/H1118/H1118/H1118801,337 95.0 891,178 96.3 1,005,984 97.2
Staff cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,878 1.9 8,407 0.9 – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,938 3.1 25,985 2.8 29,262 2.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118843,153 100.0 925,570 100.0 1,035,246 100.0
Gross Profit and Gross Profit Margin
Our gross profit was RMB856.0 million, RMB938.2 million and RMB1,048.1 million for
the years ended March 31, 2023, 2024 and 2025, respectively. Our gross profit margin was
50.4%, 50.3% and 50.3% for the same periods, respectively.
In terms of products, the majority of our gross profit was generated by the sales of
perfumes, which amounted to RMB738.0 million, RMB739.2 million and RMB817.2 million
for the years ended March 31, 2023, 2024 and 2025, respectively. The gross profit margin for
the sales of perfumes amounted to 49.1%, 48.5% and 48.4% for the same periods, respectively.
FINANCIAL INFORMATION
– 343 –


--- page 354 ---
The following table sets forth our gross profit and gross profit margin by sales channels
for the periods indicated:
For the Y ear ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
GP GP
Margin
GP GP
Margin
GP GP
Margin
Direct sales channels
 Online stores /H1118/H1118/H1118/H1118/H1118/H1118/H111875,068 60.6 79,197 62.8 106,564 65.1
 Offline
stores/counters /H1118/H1118/H1118/H1118/H1118/H1118153,578 71.5 229,645 71.5 190,829 71.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228,646 67.5 308,842 69.0 297,393 68.9
Retailer channels
 Online retailers /H1118/H1118/H1118/H1118/H1118183,065 51.4 155,212 47.4 191,172 49.2
 Offline retailers.. /H1118/H1118/H1118/H1118180,060 44.5 240,763 46.6 294,399 47.1
– Key accounts /H1118/H1118/H1118/H1118/H1118138,670 43.9 178,874 47.0 182,648 46.9
– Travel retailers /H1118/H1118/H111841,390 46.5 61,889 45.3 111,751 47.5
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118363,125 47.7 395,975 46.9 485,571 47.9
Distribution channels
 Online distributors /H1118/H1118/H1118125,382 49.2 101,456 46.9 95,594 46.8
 Offline distributors /H1118/H1118/H1118148,441 47.5 155,107 45.1 193,208 45.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273,823 48.3 256,563 45.8 288,802 45.6
* For illustrative purpose only. The gross profit and gross profit margin of the sales and distribution channels
are calculated by subtracting cost of goods sold from the sales of goods for each sale and distribution channel.
FINANCIAL INFORMATION
– 344 –


--- page 355 ---
Selling and Marketing Expenses
Selling and marketing expenses primarily consist of (i) employee benefits expenses,
mainly comprising salaries and benefits of our sales and marketing staff; (ii) advertising and
promotion expenses relating to our marketing and promotional activities; (iii) expenses relating
to variable lease payments mainly relating to the lease payments for our self-operated offline
stores/counters; (iv) amortization of right-of-use assets, which primarily represent amortization
for the leases of our self-operated stores and counters; and (v) others, which primarily consist
of the payments to third-party firms that provided outsourced labor to us in connection with our
sales and marketing activities. The following table sets forth the components of our selling and
marketing expenses and the components as a percentage of total selling and marketing
expenses for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Employee benefit expenses /H1118/H1118198,685 43.3 241,451 47.0 240,281 40.5
Advertising and promotion
expenses, net of
reimbursement received /H1118/H1118/H1118113,537 24.8 80,340 15.6 165,153 27.9
Expenses relating to short-
term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,983 5.5 27,971 5.4 18,691 3.2
Expenses relating to variable
lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,570 7.6 51,700 10.0 41,829 7.1
Provision for impairment of
right-of-use asset /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,704 1.0 63 * 3,143 0.5
Provision for impairment of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,570 0.6 33 * 523 0.1
Travelling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11182,271 0.5 9,229 1.8 6,842 1.2
Credit card charges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,603 0.4 3,088 0.6 2,612 0.4
Depreciation of property,
plant and equipment /H1118/H1118/H1118/H1118/H111811,455 2.5 19,056 3.7 21,804 3.7
Amortization of
right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H111830,733 6.7 39,694 7.7 44,469 7.5
Courier and delivery /H1118/H1118/H1118/H1118/H1118/H1118/H11187,898 1.7 10,445 2.0 11,506 1.9
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,511 5.4 31,499 6.2 36,090 6.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118457,520 100.0 514,569 100.0 592,943 100.0
* lower than 0.1%
FINANCIAL INFORMATION
– 345 –


--- page 356 ---
Administrative Expenses
Administrative expenses primarily represent (i) employee benefits expenses, mainly
comprising salaries and benefits of our administrative staff; (ii) amortization of right-of-use
assets, which mainly represent the amortization of our leases of offices and warehouses; (iii)
office expenses; and (iv) others, which mainly include fees and expenses derived from our
administrative operations. The following table sets forth the components of our administrative
expenses and the components as a percentage of total administrative expenses for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Employee benefit
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,631 71.6 135,765 66.9 118,164 56.9
Expenses relating to
short-term leases /H1118/H1118/H1118/H1118/H1118/H11181,355 0.8 1,347 0.7 2,154 1.0
Travelling expenses /H1118/H1118/H1118/H1118/H11181,556 0.9 4,037 2.0 4,210 2.0
Depreciation of property,
plant and equipment /H1118/H1118/H11184,870 2.9 3,995 2.0 3,662 1.8
Amortization of
right-of-use assets /H1118/H1118/H1118/H1118/H111820,156 11.9 17,941 8.9 26,470 12.7
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,001 6.5 11,929 5.9 11,315 5.4
Legal and professional
fee /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,344 0.8 3,166 1.6 1,604 0.8
Amortization of intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118853 0.5 1,602 0.8 2,237 1.1
Listing expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,623 2.8 18,672 9.0
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,188 4.1 17,265 8.4 19,343 9.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169,954 100.0 202,670 100.0 207,831 100.0
(Provision for)/Reversal of Impairment of Financial Assets
Our impairment of financial assets primarily represents the impairment of trade
receivables, deposits and other receivables, amounts due from a joint venture, amounts due
from a shareholder and amounts due from related companies. For the years ended March 31,
2023 and 2024, we recorded provision for impairment of financial assets of RMB0.6 million
and RMB0.5 million, respectively. For the year ended March 31, 2025, we recorded reversal
of impairment of financial assets of RMB0.6 million.
FINANCIAL INFORMATION
– 346 –


--- page 357 ---
Other Income
Other income primarily represents (i) government grants, which are related to the industry
support fund in mainland China and Hong Kong government’s employment support subsidy;
(ii) management fee income, which mainly represents the service fee earned by us in
connection with the operation of our joint venture with Dr. Babor, B&E China; and (iii)
exhibition support service income, which mainly represents the income we derived from the
provision of one-off services to an exhibition of perfumes in mainland China during the year
ended March 31, 2025. The industry support fund in mainland China were granted to us by the
relevant government authority on continuing basis on the condition that we continue to pay the
taxes payables by the relevant subsidiaries in mainland China, including the value-added tax
and corporate income tax. The employment support subsidy granted by the Hong Kong
government in connection with the COVID-19 pandemic was one-off in nature and has been
ceased in 2023. The following table sets forth the components of our other income and the
components as a percentage of total other income for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Government grants /H1118/H1118/H1118/H1118/H1118/H111811,979 99.4 10,748 87.1 5,468 79.6
Management fee income /H1118/H1118 78 0.6 1,598 12.9 – –
Exhibition support service
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 1,400 20.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,057 100.0 12,346 100.0 6,868 100.0
Other (Losses)/Gains, Net
Our other gains and losses primarily represent foreign exchange gains and losses and
gains on disposal of assets classified as held for sale. The following table sets forth the
components of our other (losses)/gains, net for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Exchange gains/(losses), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,429) (1,584) (183)
Gains/(losses) on financial asset at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145 (479) (620)
Gains/(losses) on early termination of
lease /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 844 (773)
Gains/(losses) on disposal of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118445 (53) 183
Gains on disposal of assets classified as
held for sale /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 14,795
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,818) (1,272) 13,402
FINANCIAL INFORMATION
– 347 –


--- page 358 ---
Finance Income
During the Track Record Period, our finance income represented interest income we
received from bank deposits, which amounted to RMB6.5 million, RMB8.1 million and
RMB1.7 million, respectively, for the years ended March 31, 2023, 2024 and 2025.
Finance Costs
Finance costs principally represent (i) interest expense on borrowings from the bank; and
(ii) interest expense on lease liabilities arising from the long-term leases of our offices,
warehouses and self-operated offline stores/counters. The following table sets forth the
components of our finance costs and the components as a percentage of total finance costs for
the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Interest expense on
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (1,383) 22.2
Interest expense on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,667) 100.0 (4,034) 100.0 (4,842) 77.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,667) 100.0 (4,034) 100.0 (6,225) 100.0
Share of Loss of a Joint Venture
Share of loss of a joint venture represents the net loss incurred by B&E China, a joint
venture between our Group and Dr. Babor. For the years ended March 31, 2023, 2024 and 2025,
our share of loss of a joint venture amounted to nil, RMB3.0 million and RMB3.0 million,
respectively.
FINANCIAL INFORMATION
– 348 –


--- page 359 ---
Income Tax Expense
We are subject to income tax on an entity basis on profits arising in or derived from the
tax jurisdictions in which the members of our Group are domiciled and operate. Pursuant to the
rules and regulations of the Cayman Islands and BVI, our Company and the subsidiaries of our
Group incorporated in the Cayman Islands and BVI are not subject to any income tax.
Our business operations are primarily carried out in mainland China and Hong Kong, and
therefore, we are subject to PRC corporate income tax and Hong Kong profits tax. Under the
EIT Law and Implementation Regulation of the EIT Law ((ྼ
ૢԷ), our subsidiaries in mainland China were subject to the corporate income tax in
mainland China at 25% of the estimated assessable profits during the Track Record Period.
Under the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), our Hong Kong
subsidiaries were subject to the Hong Kong profits tax at 16.5% of the estimated assessable
profits during the Track Record Period, except for one subsidiary, which was qualified under
the two-tiered profits tax rate regime, under which the first HK$2.0 million of its assessable
profits were taxed at 8.25% and the remaining assessable profits were taxed at 16.5%.
The following table sets forth the breakdown of our income tax expense for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current income tax
— Hong Kong profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,789 18,615 37,057
— Mainland China corporate income
tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(542) 12,618 6,560
Overprovision of tax in prior year
– PRC corporate income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,935)
Deferred income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(418) (5,089) (8,015)
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,829 26,144 33,667
Our transfer pricing arrangement for the years ended March 31, 2024 and 2025 resulted
in a decrease of effective tax rate arising from the combined effect of a decrease in the taxable
income of the relevant Hong Kong subsidiaries, the utilization of the remaining accumulated
tax losses from our subsidiaries in mainland China and an increase in the taxable income of the
relevant subsidiaries in mainland China. For details of our transfer pricing arrangement, please
refer to the section headed “Business — Transfer Pricing Arrangement” in this prospectus.
During the Track Record Period and up to the Latest Practicable Date, we had no disputes or
unresolved tax issues with the relevant tax authorities.
FINANCIAL INFORMATION
– 349 –


--- page 360 ---
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Y ear Ended March 31, 2025 Compared to Y ear Ended March 31, 2024
Revenue
Our revenue increased from RMB1,863.8 million for the year ended March 31, 2024 to
RMB2,083.4 million for the year ended March 31, 2025, which was mainly due to the overall
global economic growth, and in particular the continued growth in the relevant industries
where we operate in China (including Hong Kong and Macau) after the COVID-19 pandemic
had ended.
Our revenue generated from the sales of perfumes increased from RMB1,523.7 million
for the year ended March 31, 2024 to RMB1,687.7 million for the year ended March 31, 2025,
the revenue generated from the sales of skincare products increased from RMB114.4 million
for the year ended March 31, 2024 to RMB151.9 million for the year ended March 31, 2025,
and the revenue generated from the sales of color cosmetics increased from RMB193.0 million
for the year ended March 31, 2024 to RMB226.2 million for the year ended March 31, 2025.
These increases of our revenue generated from the respective sales of perfumes, skincare
products and color cosmetics were primarily due to the increase of purchase orders of our
offline distributors and retailers for these products for perfumes, skincare products and color
cosmetics from us. The increase of revenue generated from the sales of color cosmetics was
also partially attributable to the continued increase of revenue generated from the sales of a
popular brand of color cosmetics, Laura Mercier. Our revenue generated from the sales of
eyewear decreased from RMB21.5 million for the year ended March 31, 2024 to RMB12.0
million for the year ended March 31, 2025, primarily because we adjusted the corporate
strategy involving our self-owned Santa Monica-branded eyewear and upgraded the design of
the eyewear products in order to adhere to the changing industry trends and cater to different
consumer preferences. During the year ended March 31, 2025, the external manufacturers of
the Santa Monica-branded products we engaged on an OEM basis were still in the process of
manufacturing the newly designed eyewear products, and consequently, our retailer and
distributor customers had not placed any new orders for such eyewear products.
Our revenue generated from offline channels, consisting of offline retailers, self-operated
offline stores/counters and offline distributors increased from RMB1,182.5 million for the year
ended March 31, 2024 to RMB1,321.5 million for the year ended March 31, 2025, mainly due
to the economic growth in mainland China, which propelled our offline sales to increase,
partially offset by a decrease of RMB53.5 million in the revenue generated from our
self-operated offline counters and stores, which was mainly because we closed a number of
stores and counters that recorded losses during the year ended March 31, 2025, and we have
not completed ramping up the sales at several newly opened stores and counters. Our revenue
generated from online channels increased from RMB670.1 million for the year ended March
31, 2024 to RMB756.2 million for the year ended March 31, 2025, which was mainly due to
(i) an increase of RMB60.6 million in the revenue generated from online retailers, primarily
due to the increase of purchase orders from our major online retailer customers. We believe this
FINANCIAL INFORMATION
– 350 –


--- page 361 ---
could be attributable to, among other things, their expectation that the consumer spending in
mainland China will be buoyed by the economic stimulus policies introduced by the Chinese
government in September 2024; and (ii) an increase of RMB37.6 million in the revenue
generated from our self-operated online stores, primarily due to the increase of the number of
our self-operated online stores during the year ended March 31, 2025.
Our revenue generated from the retailer channels increased from RMB844.7 million for
the year ended March 31, 2024 to RMB1,012.8 million for the year ended March 31, 2025,
mainly due to (i) an increase of RMB107.4 million in the revenue generated from offline
retailers, which was primarily due to an increase of purchase orders from our travel retailer
customers and key account customers; and (ii) an increase of RMB60.6 million in the revenue
generated from online retailers. We believe this was attributable to, among other things, their
expectation of increased consumers’ demand in travel retailer channels in light of certain
supporting policies on duty-free shops issued by the relevant PRC government authorities in
August 2024. For details of such policies and their potential impact on our travel retailer
business, please see the sections headed “Industry Overview — Overview of Perfume Industry
in China (Including Hong Kong and Macau) — Competitive Landscape” and “Business —
Sales and Distribution of Products — Retailer Channels — Travel Retailers” in this prospectus.
Our revenue generated from direct sales channels decreased slightly from RMB447.3
million for the year ended March 31, 2024 to RMB431.4 million for the year ended March 31,
2025, primarily due to a decrease of RMB53.5 million in the revenue generated from our
self-operated offline stores and counters, mainly because we closed a number of self-operated
offline stores and counters that recorded losses during the year ended March 31, 2025, and we
have not completed ramping up the sales at several newly opened stores and counters, partially
offset by an increase of RMB37.6 million in the revenue generated from our self-operated
online stores as we opened a number of our new self-operated online stores on e-commerce
platforms including, among others, JD.com, Wechat, RED, Douyin and Tmall, and we sold the
products of new brands through these self-operated online stores.
Cost of Sales
Our cost of sales increased from RMB925.6 million for the year ended March 31, 2024
to RMB1,035.2 million for the year ended March 31, 2025. The increase was mainly due to an
increase of RMB114.8 million of cost of goods sold, which was in line with the increase in our
revenue during the year ended March 31, 2025 that benefited from the increasing consumer
demands.
Gross Profit and Gross Profit Margin
Our gross profit increased from RMB938.2 million for the year ended March 31, 2024 to
RMB1,048.1 million for the year ended March 31, 2025.
FINANCIAL INFORMATION
– 351 –


--- page 362 ---
Our gross profit margin remained relatively stable at 50.3% for the year ended March 31,
2025 and 2024. Our gross profit margin of sales of perfumes remained relatively stable at
48.4% for the year ended March 31, 2025 as compared to 48.5% for the year ended March 31,
2024.
Our gross profit margin of the direct sales channels, retailer channels and distribution
channels remained relatively stable at 68.9%, 47.9% and 45.6%, respectively, for the year
ended March 31, 2025 as compared to 69.0%, 46.9% and 45.8%, respectively, for the year
ended March 31, 2024.
Selling and Marketing Expenses
Our selling and marketing expenses increased from RMB514.6 million for the year ended
March 31, 2024 to RMB592.9 million for the year ended March 31, 2025, which was mainly
due to an increase of RMB84.8 million in the advertising and promotion expenses, primarily
because we conducted more marketing and promotional activities for certain external brands
we managed that were beyond the scope of the business development and expansion plans
during the year ended March 31, 2024 as compared to those activities we conducted for the
year ended March 31, 2025. This resulted in the higher amount of reimbursements we received
from the relevant brand licensors in the year ended March 31, 2024.
Administrative Expenses
Our administrative expenses increased from RMB202.7 million for the year ended
March 31, 2024 to RMB207.8 million for the year ended March 31, 2025, which was mainly
due to (i) an increase of RMB13.0 million in the listing expenses arising from our preparation
for the Listing; and (ii) an increase of RMB8.5 million in the amortization of right-of-use
assets, primarily because we leased properties from our Controlling Shareholders and their
close associates which were used as offices and warehouses during the year ended March 31,
2025. For details, please refer to “Relationship with the Controlling Shareholders —
Independence from Controlling Shareholders” in this prospectus. Such increased was partially
offset by a decrease of RMB17.6 million in the employee benefit expenses, mainly because we
recorded expenses for granting share options to our employees during the year ended March 31,
2024, and did not grant any share options to our employees during the year ended March 31,
2025.
(Provision for)/Reversal of Impairment of Financial Assets
We recorded provision for impairment of financial assets of RMB0.5 million for the year
ended March 31, 2024. We recorded reversal of impairment of financial assets of RMB0.6
million for the year ended March 31, 2025, primarily because we made reversal for certain
provision of impairment for other receivables as we received repayments from third parties for
the advances we provided to them during the year ended March 31, 2025.
FINANCIAL INFORMATION
– 352 –


--- page 363 ---
Other Income
Our other income decreased from RMB12.3 million for the year ended March 31, 2024
to RMB6.9 million for the year ended March 31, 2025, which was mainly due to a decrease of
RMB5.3 million in the government grants, primarily because the industry support fund in
mainland China, which was part of the government grants we received, decreased during the
year ended March 31, 2025.
Other (Losses)/Gains, Net
We recorded other losses of RMB1.3 million for the year ended March 31, 2024, primarily
reflecting the exchange loss of RMB1.6 million. This was mainly because we primarily made
payments denominated in EUR to a number of our brand licensors based in Europe through our
available cash in HKD, which was then converted to EUR for payment settlement, and the
exchange rate of EUR against HKD sharply increased from February to May 2023. We
recorded other gains of RMB13.4 million for the year ended March 31, 2025, primarily
reflecting the gains on disposal of assets classified as held for sale arising from our gains on
the disposal of a property during the year ended March 31, 2025, partially offset by the losses
on early termination of leases of RMB0.8 million.
Finance Income
Our finance income decreased from RMB8.1 million for the year ended March 31, 2024
to RMB1.7 million for the year ended March 31, 2025 due to a decrease of RMB6.4 million
in the interest income from bank deposits, primarily because we withdrew certain amount of
bank deposits to pay the dividends due to Mr. Lau during the year ended March 31, 2025.
Finance Costs
Our finance costs increased from RMB4.0 million for the year ended March 31, 2024 to
RMB6.2 million for the year ended March 31, 2025, which was mainly due to (i) an increase
of RMB0.8 million in the interest expense on lease liabilities as a result of an increase of the
number of our self-operated offline stores/counters leased under long-term leases with fixed
deposits and rent; and (ii) an increase of RMB1.4 million in the interest expense on
borrowings, primarily because we borrowed bank loans to replenish our working capital.
Share of Loss of a Joint V enture
We recorded share of loss of a joint venture of RMB3.0 million and RMB3.0 million,
respectively, for the years ended March 31, 2024 and 2025, primarily because we established
B&E China, a joint venture with Dr. Babor, in May 2023, which recorded losses during the
years ended March 31, 2024 and 2025 as it was still at an early stage of operation.
FINANCIAL INFORMATION
– 353 –


--- page 364 ---
Profit Before Income Tax
As a result of the foregoing, our profit before income tax increased from RMB232.6
million for the year ended March 31, 2024 to RMB260.7 million for the year ended March 31,
2025.
Income Tax Expense
Our income tax expense increased from RMB26.1 million for the year ended March 31,
2024 to RMB33.7 million for the year ended March 31, 2025, primarily because we began to
adopt a new transfer pricing arrangement since the year ended March 31, 2024 to ensure that
an arm’s length level of profit is earned by the mainland China subsidiaries for their functions
performed. Under such transfer pricing arrangement, (i) for the year ended March 31, 2024, we
utilized tax losses of the relevant mainland China subsidiaries for the years ended March 31,
2022, 2023 and 2024; and (ii) for the year ended March 31, 2025, we only utilized tax losses
for the relevant mainland China subsidiaries for the years ended March 31, 2025, as their
previous tax losses have already been utilized. As a result, the decrease of income tax expense
resulted from the transfer pricing arrangement for the year March 31, 2024 was more
significant than that for the year ended March 31, 2025. For details of our transfer pricing
arrangement, please refer to the section headed “Business — Transfer Pricing Arrangement” in
this prospectus.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased from RMB206.5 million for
the year ended March 31, 2024 to RMB227.0 million for the year ended March 31, 2025.
Y ear Ended March 31, 2024 Compared to Y ear Ended March 31, 2023
Revenue
Our revenue increased from RMB1,699.1 million for the year ended March 31, 2023 to
RMB1,863.8 million for the year ended March 31, 2024. The increase was mainly due to the
overall global economic growth, and in particular the growth in the industries where we operate
in China (including Hong Kong and Macau) after the COVID-19 pandemic had ended, which
was partially offset by the decrease of revenue generated by a luxury brand which contributed
to approximately 25.0% of our total revenue for the year ended March 31, 2023, because the
distribution agreement with the brand licensor for this brand expired in December 2022, which
was not subsequently renewed.
Our revenue generated from the sales of perfumes remained relatively stable at
RMB1,523.7 million for the year ended March 31, 2024 as compared with RMB1,504.2 million
for the year ended March 31, 2023. Our revenue generated from the sales of skincare products
increased from RMB87.1 million for the year ended March 31, 2023 to RMB114.4 million for
the year ended March 31, 2024, primarily because one of the skincare brands in our brand
FINANCIAL INFORMATION
– 354 –


--- page 365 ---
portfolio experienced a significant increase in the sales as the skincare products under this
brand were sold at more POSs of one of our key accounts customers. Our revenue generated
from the sales of color cosmetics increased significantly from RMB67.9 million for the year
ended March 31, 2023 to RMB193.0 million for the year ended March 31, 2024, primarily
because we started to conduct product distribution and market deployment for a popular brand
of color cosmetics, Laura Mercier, in January 2023. Our revenue generated from the sales of
eyewear increased from RMB7.7 million for the year ended March 31, 2023 to RMB21.5
million for the year ended March 31, 2024, primarily because we adjusted the corporate
strategy involving our self-owned Santa Monica branded eyewear, which enabled us to increase
its sales in mainland China.
Our revenue generated from offline channels, consisting of offline retailers, self-operated
offline stores/counters and offline distributors, increased from RMB931.9 million for the year
ended March 31, 2023 to RMB1,182.5 million for the year ended March 31, 2024, primarily
due to the economic recovery in mainland China after the COVID-19 pandemic had ended,
which propelled offline sales to increase. Our revenue generated from online channels
decreased from RMB735.0 million for the year ended March 31, 2023 to RMB670.1 million
for the year ended March 31, 2024, primarily because our management allocated more
resources and attention to the offline channels during the year ended March 31, 2024 in view
of certain policies introduced by mainland Chinese government that encouraged offline retail
shopping, which consequently shifted focus and resource allocations away from online
channels. Our revenue generated from retailer channels increased from RMB761.1 million for
the year ended March 31, 2023 to RMB844.7 million for the year ended March 31, 2024,
primarily due to (i) an increase of RMB64.8 million of revenue generated from key accounts,
mainly as a result of an increase of the number of POSs of key accounts that sell the products
sourced from us; (ii) an increase of RMB47.6 million of revenue generated from travel
retailers, mainly because the international travels returned to normal after the COVID-19
pandemic had ended, which contributed to an increase of consumer traffic at international
airports and duty-free shops, partially offset by a decrease of RMB28.8 million of revenue
generated from online retailers, mainly due to the decrease of sales made on the online
platforms, primarily because the distribution agreement with the brand licensor of a major
luxury brand expired in December 2022, and we ceased selling its branded products in June
2023, partially offset by the increase of revenue generated by the sales of certain other branded
products, primarily due to our continued efforts in marketing and promotion. Our revenue
generated from our direct sales channels increased from RMB338.6 million for the year ended
March 31, 2023 to RMB447.3 million for the year ended March 31, 2024, primarily due to an
increase of RMB106.4 million generated from offline stores/counters, primarily because we
started to conduct product distribution and market deployment for a popular brand of color
cosmetics, Laura Mercier, in January 2023, and its products were primarily sold through offline
stores/counters. Our revenue generated from distribution channels remained relatively stable at
RMB560.5 million for the year ended March 31, 2024 compared to RMB567.2 million for the
year ended March 31, 2023.
FINANCIAL INFORMATION
– 355 –


--- page 366 ---
Cost of Sales
Our cost of sales increased from RMB843.2 million for the year ended March 31, 2023
to RMB925.6 million for the year ended March 31, 2024. The increase was mainly due to an
increase of RMB89.8 million of cost of goods sold, which was in line with the increase in our
revenue during the year ended March 31, 2024 that benefited from the increasing consumer
demands.
Gross Profit and Gross Profit Margin
Our gross profit increased from RMB856.0 million for the year ended March 31, 2023 to
RMB938.2 million for the year ended March 31, 2024.
Our gross profit margin remained relatively stable at 50.3% for the year ended March 31,
2024, compared to 50.4% for the year ended March 31, 2023. The gross profit margin of sales
of perfumes remained relatively stable at 48.5% for the year ended March 31, 2024 compared
to 49.1% for the year ended March 31, 2023.
Our gross profit margin of the direct sales channels increased from 67.5% for the year
ended March 31, 2023 to 69.0% for the year ended March 31, 2024, primarily arising from the
increase of gross profit margin of our self-operated online stores, which was primarily because
we started to sell the products from two popular brands on our self-operated online stores
during the year ended March 31, 2024. The sales of these products recorded relatively high
gross profit margin. Our gross profit margin of the retailer channels remained relatively stable
at 46.9% for the year ended March 31, 2024 compared to 47.7% for the year ended March 31,
2023. Our gross profit margin of distribution channels decreased from 48.3% for the year ended
March 31, 2023 to 45.8% for the year ended March 31, 2024, primarily because (i) the
distribution agreement with the brand licensor of a major luxury brand expired in December
2022, and we ceased selling its branded products in June 2023; and (ii) certain products sold
during the year ended March 31, 2024 were procured at a relatively higher cost, mainly as a
result of the relatively high exchange rate of EUR against HKD. The profit margin of the
distribution channels is generally lower than that of other channels, which makes it more
sensitive to the fluctuations of exchange rates.
Selling and Marketing Expenses
Our selling and marketing expenses increased from RMB457.5 million for the year ended
March 31, 2023 to RMB514.6 million for the year ended March 31, 2024. The increase was
mainly due to (i) an increase of RMB42.8 million of employee benefits expenses, primarily
because we recruited new sales and marketing staff to facilitate our increased sales and the
expansion of our distribution network, and generally increased the salaries of our employees;
(ii) an increase of RMB17.1 million of variable lease payment, primarily due to the increase
of payments under the concession agreements with shopping malls and department stores,
which were calculated as a percentage of the revenue of the relevant stores/counters in certain
shopping malls and department stores. The payments under the concession agreements with
FINANCIAL INFORMATION
– 356 –


--- page 367 ---
shopping malls and department stores increased mainly due to the increase of the revenue
generated by the relevant stores/counters; partially offset by a decrease of RMB33.2 million of
advertising and promotion expenses, mainly because the additional marketing and promotional
activities which were beyond the scope of the business development and expansion plans
increased during the year ended March 31, 2024 as compared to the year ended March 31,
2023. The expenses arising from these activities were reimbursed by our brand licensors.
Administrative Expenses
Our administrative expenses increased from RMB170.0 million for the year ended March
31, 2023 to RMB202.7 million for the year ended March 31, 2024. The increase was mainly
due to (i) an increase of RMB14.1 million in employee benefits expenses, primarily due to the
increase of salaries and benefits of our administrative staff; and (ii) an increase of RMB10.1
million in others, primarily because we organized certain internal corporate activities in 2024,
such as annual dinners and corporate events that we did not organize in the previous several
years due to the COVID-19 pandemic, and incurred additional expenses associated with such
activities.
Provision for Impairment of Financial Assets
Our provision for impairment of financial assets remained relatively stable at from
RMB0.5 million for the year ended March 31, 2024 compared to RMB0.6 million for the year
ended March 31, 2023.
Other Income
Our other income remained relatively stable at RMB12.3 million for the year ended
March 31, 2024 compared to RMB12.1 million for the year ended March 31, 2023.
Other (Losses)/Gains, Net
Our other losses decreased from RMB16.8 million for the year ended March 31, 2023 to
RMB1.2 million for the year ended March 31, 2024, primarily due to the decrease of RMB15.8
million in net exchange losses. This was mainly because we primarily made payments
denominated in EUR to our brand licensors based in Europe through our available cash in
HKD, which was then converted to EUR for the payment settlement, and the exchange rate of
EUR against HKD increased since October 2022 until the middle of 2023, subsequent to which
it began to decrease.
FINANCIAL INFORMATION
– 357 –


--- page 368 ---
Finance Income
Our finance income increased from RMB6.5 million for the year ended March 31, 2023
to RMB8.1 million for the year ended March 31, 2024. The increase was mainly due to an
increase of RMB1.6 million in our interest income from bank deposits, primarily because we
made additional short-term fixed bank deposits during the year ended March 31, 2024 to take
advantage of the rising interest rates for deposits in HKD and USD.
Finance Costs
Our finance costs increased from RMB2.7 million for the year ended March 31, 2023 to
RMB4.0 million for the year ended March 31, 2024. The increase was mainly due to an
increase of RMB1.4 million in interest expense on lease liabilities as a result of an increase of
the number of our self-operated offline stores/counters leased under long-term lease with fixed
deposits and rent.
Share of Loss of a Joint V enture
We recorded share of loss of a joint venture of nil and RMB3.0 million for the years ended
March 31, 2023 and 2024, respectively, primarily because we established B&E China, a joint
venture with Dr. Babor, in May 2023, which recorded losses during the year ended March 31,
2024 because it was at an early stage of operation.
Profit Before Income Tax
As a result of the foregoing, our profit before income tax increased from RMB226.9
million for the year ended March 31, 2023 to RMB232.6 million for the year ended March 31,
2024.
Income Tax Expense
Our income tax expense decreased from RMB53.9 million for the year ended March 31,
2023 to RMB26.1 million for the year ended March 31, 2024, primarily because we began to
adopt a new transfer pricing arrangement since the year ended March 31, 2024 to ensure that
an arm’s length level of profit is earned by the mainland China subsidiaries for their functions
performed. Under such transfer pricing arrangement, for the year ended March 31, 2024, we
utilized tax losses of the relevant mainland China subsidiaries for the year ended March 31,
2022, 2023 and 2024, which resulted in a decrease of income tax expense. For details of our
transfer pricing arrangement, please refer to the section headed “Business — Transfer Pricing
Arrangement” in this prospectus.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased from RMB173.1 million for
the year ended March 31, 2023 to RMB206.5 million for the year ended March 31, 2024.
FINANCIAL INFORMATION
– 358 –


--- page 369 ---
NET CURRENT ASSETS
The table below sets forth the breakdown of our current assets and current liabilities as
of the dates indicated:
As of March 31,
As of
April 30,
2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current assets:
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,578 390,309 434,059 408,917
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,959 175,279 250,399 262,005
Deposits, prepayments and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,670 113,861 83,617 79,852
Amounts due from related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118984 51,155 43,006 43,001
Amounts due from a joint
venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,514 4,161 4,221
Amount due from a
shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 1 0 2 7 1––
Financial asset at FVPL /H1118/H1118/H1118/H1118/H11184 6 3–––
Fixed deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,388 – – –
Cash and cash equivalents /H1118/H1118/H1118320,462 150,929 255,998 267,070
Assets classified as held
for sale /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,481 – –
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118902,614 897,799 1,071,240 1,065,066
Current liabilities:
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,498 93,223 119,505 124,804
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,015 16,307 13,353 10,057
Accruals and other payables /H1118 177,448 168,737 118,741 101,884
Provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,718 9,836 10,144 10,437
Income tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H111824,103 5,500 27,236 23,136
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,941 7,045 – –
Amounts due to a director /H1118/H1118/H111876,693 186,951 116,281 115,952
Bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 33,183 31,968
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,236 52,520 58,507 55,080
Financial liability at fair
value through profit or loss – – 628 –
Total current liabilities /H1118/H1118/H1118/H1118533,652 540,119 497,578 473,318
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118368,962 357,680 573,662 591,748
FINANCIAL INFORMATION
– 359 –


--- page 370 ---
Our net current assets decreased from RMB369.0 million as of March 31, 2023 to
RMB357.7 million as of March 31, 2024, primarily due to the increase of our current liabilities
and decrease of our current assets. Our total current liabilities increased from RMB533.7
million as of March 31, 2023 to RMB540.1 million as of March 31, 2024, primarily due to an
increase of RMB110.3 million in the amount due to a director, mainly arising from the dividend
we declared, which remained due to our Controlling Shareholders as of March 31, 2024,
partially offset by (i) a decrease of RMB54.9 million in the amounts due to related companies,
primarily because we repaid the financial assistance provided by certain of our related
companies during the year ended March 31, 2024; (ii) a decrease of RMB20.3 million in the
trade payables, primarily because the credit term granted to us by certain of our major suppliers
for the year ended March 31, 2023 was longer than that for the year ended March 31, 2024;
and (iii) a decrease of RMB18.6 million in income tax payables, primarily due to our transfer
pricing arrangement for the year ended March 31, 2024, which resulted in a decrease of
effective tax rate arising from a one-off combined effect of a decrease in the taxable income
of the relevant Hong Kong subsidiaries and the utilization of the remaining accumulated tax
losses from our mainland China subsidiaries. For details of our transfer pricing arrangement,
please refer to the section headed “Business — Transfer Pricing Arrangement” in this
prospectus. Our total current assets decreased from RMB902.6 million as of March 31, 2023
to RMB897.8 million as of March 31, 2024, primarily due to a decrease of RMB169.5 million
in cash and cash equivalents, which was mainly due to dividend payments made to our
Controlling Shareholders, partially offset by an increase of RMB61.2 million of the current
portion of deposits, prepayments and other receivables, primarily due to (i) an increase of
RMB28.3 million of current portion of the advance to third parties, because the non-current
portion of the advance to third parties recorded as of March 31, 2023 was reclassified as the
current portion of the advance to third parties as of March 31, 2024, as we expect these third
parties to repay the amount within 12 months; and (ii) an increase of RMB15.6 million of other
receivables, primarily because it took relatively longer to reconcile the payable amounts from
certain brand licensors to us.
Our net current assets increased from RMB357.7 million as of March 31, 2024 to
RMB573.7 million as of March 31, 2025, primarily due to the increase in our current assets and
the decrease in our current liabilities. Our total current assets increased from RMB897.8
million as of March 31, 2024 to RMB1,071.2 million as of March 31, 2025, primarily due to
(i) an increase of RMB105.1 million in cash and cash equivalents, primarily due to the increase
in net cash flow from our operating activities for the year ended March 31, 2025 as a result of
our business expansion; (ii) an increase of RMB75.1 million in trade receivables, primarily due
to the increase in the sales to an online retailer customer, to which we generally granted credit
terms of 30 to 60 days, and the increase in the sales to certain travel retailer and key account
customers, to which we generally granted credit terms of 60 days; and (iii) an increase of
RMB43.8 million in inventories, primarily reflecting the increase in finished goods as our
business expanded, partially offset by a decrease of RMB30.2 million in the deposits,
prepayments and other receivables, primarily due to the decrease of our other receivables
because we accelerated the billing and collection of reimbursement from the brand licensors
for the extra advertising and promotional activities we conducted for their brands during the
year ended March 31, 2025. Our total current liabilities decreased from RMB540.1 million as
FINANCIAL INFORMATION
– 360 –


--- page 371 ---
of March 31, 2024 to RMB497.6 million as of March 31, 2025, primarily due to (i) a decrease
of RMB50.0 million in accruals and other payables, which was mainly because we made faster
payment settlement with the suppliers that provided marketing and promotional services to us;
and (ii) a decrease of RMB70.7 million in amount due to a director, which was mainly because
we partially settled the payment of dividends due to Mr. Lau during the year ended March 31,
2025, partially offset by (i) an increase of RMB26.3 million in trade payables, which was
mainly because our purchases from suppliers increased as we had anticipated that our business
will continue to expand; (ii) an increase of RMB33.2 million in bank borrowings as we took
out additional bank loans to replenish our working capital; and (iii) an increase of RMB21.7
million in income tax payable, primarily because the relatively lower income tax payable as of
March 31, 2024 was the result of a one-off combined effect of a decrease of taxable income
arising from the transfer pricing arrangement.
Our net current assets increased from RMB573.7 million as of March 31, 2025 to
RMB591.7 million as of April 30, 2025, mainly because the decrease in our current liabilities
outpaced the decrease in our current assets. Our total current liabilities decreased from
RMB497.6 million as of March 31, 2025 to RMB473.3 million as of April 30, 2025, mainly due
to (i) a decrease of RMB16.9 million in accruals and other payables, primarily because we
continued to settle the payment with the suppliers that provided marketing and promotional
services to us; (ii) a decrease of RMB4.1 million in income tax payables, mainly because we
paid income tax of our Hong Kong subsidiaries for the year ended December 31, 2024 that was
due in April 2025; (iii) a decrease of RMB3.4 million in lease liabilities, mainly due to the
monthly payment of rent for the leases; and (iv) a decrease of RMB3.3 million in contract
liabilities as we continued to deliver products to our customers, partially offset by an increase
of RMB5.3 million in trade payables as we continued to procure products from our suppliers
in April 2025 to facilitate our sales. Our total current assets decreased from RMB1,071.2
million as of March 31, 2025 to RMB1,065.1 million as of April 30, 2025, mainly due to a
decrease of RMB25.1 million in inventories, primarily due to the sales of products in April
2025, partially offset by (i) an increase of RMB11.6 million in trade receivables, mainly due
to the increase of sales to retailer customers with credit terms; and (ii) an increase of RMB11.1
million in cash and cash equivalents, primarily due to the increase in net cash flow from our
operating activities in April 2025 as a result of our business expansion.
FINANCIAL INFORMATION
– 361 –


--- page 372 ---
DESCRIPTION OF CERTAIN KEY ITEMS FROM OUR CONSOLIDATED
STATEMENT OF FINANCIAL POSITIONS
Inventories
Our inventories primarily consist of finished goods and goods in transit. Except for the
eyewear, which generally does not have shelf lives, the shelf lives of the products we sell range
from three to five years. The following table sets forth a summary of our balance of inventories
as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Finished goods – at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,763 379,355 421,459
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,764 46,977 54,878
Less: Stock provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,949) (36,023) (42,278)
Inventories, net of provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,578 390,309 434,059
We review the condition of our inventories on a product-by-product basis regularly and
make provision for obsolete and slow-moving inventory items. Our inventories increased from
RMB357.6 million as of March 31, 2023 to RMB390.3 million as of March 31, 2024, and
further to RMB434.1 million as of March 31, 2025, primarily reflecting the increases in
finished goods as our business expanded.
The following table sets forth, our average inventory turnover days for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
Average inventory turnover days (1) /H1118/H1118/H1118/H1118179.2 160.7 159.1
Note:
(1) The calculation of inventory turnover days is based on the average of the opening balance and closing
balance of inventories for the relevant year divided by cost of sales for the year and multiplied by the
number of days in the relevant year, which amounted to 365, 366 and 365 for the years ended March
31, 2023, 2024 and 2025, respectively.
Our average inventory turnover days decreased from 179.2 days for the year ended March
31, 2023 to 160.7 days for the year ended March 31, 2024, mainly because we reduced our
inventory level regarding the precautionary stocking of products during the year ended March
31, 2024 as we believed that the international shipping and logistics had returned to normal.
FINANCIAL INFORMATION
– 362 –


--- page 373 ---
Our average inventory turnover days decreased from 160.7 days for the year ended March 31,
2024 to 159.1 days for the year ended March 31, 2025, mainly because we controlled our
inventory level more effectively to correspond to our sales level.
The following table sets out the aging analysis of our inventories as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Up to 180 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,226 327,081 396,027
180 days to one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,427 60,815 50,687
One year to two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,405 26,877 17,728
Two years to three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,425 5,469 5,288
Over three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,044 6,090 6,607
Less: stock provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,949) (36,023) (42,278)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,578 390,309 434,059
As of the Latest Practicable Date, RMB227.4 million, or 47.7% of our inventories as of
March 31, 2025 had been subsequently settled. As of the Latest Practicable Date, we did not
encounter with any recoverability issue with respect to our inventories. We believe the
subsequent settlement of our inventories as of the Latest Practicable Date was normal and in
line with our historical inventories settlement progress.
We believe that there is no impairment issue for our inventory, considering that the period
of April 1, 2025 to the Latest Practicable Date has 71 days, which represented 44.6% of our
average inventory turnover days for the year ended March 31, 2025. As such, the utilization
rate of our balance of inventories as of the Latest Practicable Date, which was 47.7%, was
generally in line with our average inventory turnover during the year ended March 31, 2025.
Trade Receivables
Trade receivables primarily represent the outstanding amounts due to us from certain of
our retailer customers for the products we sold to them. As of March 31, 2023, 2024 and 2025,
our trade receivables amounted to RMB157.0 million, RMB175.3 million and RMB250.4
million, respectively. The trading terms with certain of our key accounts customers, travel
retailer customers and major online retailer customers are mainly on credit. The credit term we
granted to such customers was generally 30 days to 90 days. We seek to maintain strict control
over our outstanding receivables to minimize credit risk exposure. Long-overdue balances are
reviewed regularly by our management. We do not hold any collateral on our trade receivable
balances. Trade receivables are non-interest-bearing.
FINANCIAL INFORMATION
– 363 –


--- page 374 ---
The table below sets forth the breakdown of our trade receivables, net:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,243 175,726 251,062
Less: Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(284) (447) (663)
Trade receivables, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,959 175,279 250,399
Receivables relating to customers with known financial difficulties or significant doubt
on collection of receivables are assessed individually for separate provision for impairment
allowance. Our trade receivables increased from RMB157.0 million as of March 31, 2023 to
RMB175.3 million as of March 31, 2024, primarily due to the increase in the sales to certain
of our key accounts customers, to which we generally granted longer credit terms of 60 to 90
days, as compared with other customers on credit. Our trade receivables increased from
RMB175.3 million as of March 31, 2024 to RMB250.4 million as of March 31, 2025, primarily
due to the increase in the sales to certain retailer customers, to which we generally granted
credit terms of 30 to 60 days.
The following table sets forth our average trade receivables turnover days for the periods
indicated:
For the Y ear Ended March 31,
2023 2024 2025
Average trade receivables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829.4 32.7 37.4
Note:
(1) The calculation of trade receivables turnover days is based on the average of the opening balance and
closing balance of trade receivables for the relevant year divided by revenue and multiplied by the
number of days, which amounted to 365, 366 and 365 for the years ended March 31, 2023, 2024 and
2025, respectively.
Our average trade receivables turnover days increased from 29.4 days for the year ended
March 31, 2023 to 32.7 days for the year ended March 31, 2024, mainly because the number
of key accounts customers and other customers who are generally on credit increased during
the year ended March 31, 2024. Our average trade receivables turnover days increased from
32.7 days for the year ended March 31, 2024 to 37.4 days for the year ended March 31, 2025,
primarily due to the increase in sales to certain retailer customers, to which we generally
granted credit terms of 30 to 60 days.
FINANCIAL INFORMATION
– 364 –


--- page 375 ---
The following table sets out the aging analysis of our trade receivables as of the dates
indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,001 107,895 199,076
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,668 48,784 39,778
Over 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,574 19,047 12,208
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,243 175,726 251,062
As of the Latest Practicable Date, RMB208.6 million, or 83.1% of our trade receivables
as of March 31, 2025 had been subsequently settled. Our Directors confirmed that there is no
material recoverability issue for our trade receivables.
Deposits, Prepayments and Other Receivables
Our deposits, prepayments and other receivables primarily consist of (i) prepayments for
inventories and other operating expenses, which primarily consist of prepayments we made to
our suppliers before their delivery of products; (ii) advance to third parties, which primarily
consists of the advance amount that was unsecured, interest-free and repayable on demand. The
carrying values of the balance approximate to their fair value; (iii) other receivables, which
primarily consist of the reimbursement we received from the brand licensors for the advertising
and promotional activities; (iv) deposits, which primarily consist of the deposits for the leases
of the self-operated offline stores and counters; and (v) prepayment for non-financial assets,
which represent the prepayment for the software used to support our digitalized systems.
The advance to third parties consisted of advances to our three retailer customers, namely,
Retailer A, Retailer B and Retailer C. For further details of these three retailers, please refer
to the section headed “Business — Customers — Advances to Certain of Our Retailer
Customers” in this prospectus. The advances provided to Retailer A, Retailer B and Retailer C
had been fully repaid to our Group by February 2025. We currently do not expect to make any
further advances to third parties.
FINANCIAL INFORMATION
– 365 –


--- page 376 ---
As of March 31, 2023, 2024 and 2025, our current portion of deposits, prepayments and
other receivables amounted to RMB52.7 million, RMB113.9 million and RMB83.6 million,
respectively. The following table sets forth a breakdown of the current portion of our deposits,
prepayments and other receivables as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments for inventories and other
operating expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,903 23,317 21,528
Prepayment for listing expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,357 6,608
Advance to third parties (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 28,284 –
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,202 32,824 22,203
V A T tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,402 8,183 14,941
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,163 19,896 18,337
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,670 113,861 83,617
Note:
(1) The balances are denominated in HKD and RMB. As of March 31, 2023, our Directors expect such
balance to be repaid by the third parties within 12 months of the reporting period and classified the
balance as current assets.
The current portion of our deposits, prepayments and other receivables increased from
RMB52.7 million as of March 31, 2023 to RMB113.9 million as of March 31, 2024, mainly as
a result of (i) an increase of RMB28.3 million of current portion of the advance to third parties,
because the non-current portion of the advance to third parties recorded as of March 31, 2023
was reclassified as the current portion of the advance to third parties as of March 31, 2024, as
we expect these third parties to repay the amount within 12 months; and (ii) an increase of
RMB15.6 million of other receivables, primarily because the reconciliation of the payable
amount between certain brand licensors and us took relatively longer time. The current portion
of our deposits, prepayments and other receivables decreased from RMB113.9 million as of
March 31, 2024 to RMB83.6 million as of March 31, 2025, primarily due to (i) a decrease of
RMB28.3 million in advance to third parties, primarily because the relevant third parties fully
repaid such advance during the year ended March 31, 2025; and (ii) a decrease of RMB10.6
million in other receivables, primarily because we accelerated the settlement of reimbursement
from the brand licensors for the extra advertising and promotional activities we conducted for
their brands during the year ended March 31, 2025, partially offset by an increase of RMB6.8
million in V A T tax recoverable, primarily arising from the V A T tax recoverable recorded by
subsidiaries which procured products but did not record sales of them.
FINANCIAL INFORMATION
– 366 –


--- page 377 ---
The following table sets forth a breakdown of the non-current portion of our deposits,
prepayments and other receivables as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments for non-financial assets /H1118/H1118/H11183,054 4,207 2,001
Advance to third parties (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,061 – –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,400 6,217 7,398
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,515 10,424 9,399
Note:
(1) The balances are denominated in HKD and RMB. As of March 31, 2023, our Directors did not expect
such balance to be repaid by the third parties within 12 months of the reporting period and classified
the balance as non-current assets.
The non-current portion of deposits, prepayments and other receivables decreased from
RMB38.5 million as of March 31, 2023 to RMB10.4 million as of March 31, 2024, primarily
due to a decrease of RMB28.1 million of our advance to third parties, primarily because such
third parties partially repaid the advance to us. The non-current portion of our deposits,
prepayments and other receivables decreased from RMB10.4 million as of March 31, 2024 to
RMB9.4 million as of March 31, 2025, primarily due to a decrease of RMB2.2 million in
prepayments for non-financial assets, primarily because the prepayment for non-financial
assets in connection with certain software for our upgrades of information technology system
as of March 31, 2024 was recognized as intangible assets as of March 31, 2025 as such
upgraded system was launched.
Amounts Due from a Joint Venture
Our amounts due from a joint venture were trade in nature, which primarily derived from
sales of goods and provision of services to B&E China, a joint venture between our Group and
Dr. Babor. Our amounts due from a joint venture amounted to nil, RMB13.5 million, and
RMB4.2 million as of March 31, 2023, 2024 and 2025, respectively. These balances will not
be fully settled prior to Listing.
Financial Asset at FVPL
Our financial asset at FVPL primarily consists of foreign exchange swap deposits in the
banks. After making an investment, we closely monitor the performance and fair value of these
investments on a regular basis. Our financial assets at FVPL amounted to RMB0.5 million, nil
and nil for the years ended March 31, 2023, 2024 and 2025, respectively, primarily because we
had foreign exchange swap deposits as of March 31, 2023, but did not have such deposits as
of March 31, 2024 and 2025.
FINANCIAL INFORMATION
– 367 –


--- page 378 ---
Fixed Deposits and Cash and Cash Equivalents
Our fixed deposits mainly consist of bank deposits with maturity date within three
months. Our cash and cash equivalents and fixed deposits carry interest at prevailing market
interest rates ranging from 0.3% to 5.5% per annum as at the end of each financial period of
Track Record Period.
As of March 31, 2023, 2024 and 2025, the balance of our fixed deposits (maturity date
over three months) amounted to RMB13.4 million, nil and nil, respectively, primarily because
we had put certain amount of the available cash into fixed bank deposits during the years ended
March 31, 2023, which matured during the year ended March 31, 2024.
Our cash and cash equivalents decreased from RMB320.5 million as of March 31, 2023
to RMB150.9 million as of March 31, 2024, primarily because we made a dividend payment
to our Controlling Shareholders. Our cash and cash equivalents increased from RMB150.9
million as of March 31, 2024 to RMB256.0 million as of March 31, 2025, primarily due to the
increase in net cash flow from our operating activities for the year ended March 31, 2025
resulting from our business expansion.
We deposit bank balances only with creditworthy banks with no recent history of default.
Our Directors confirm that our cash and cash equivalents were maintained at a prudent level
for the purpose of satisfying the requirements for our daily business operations.
Assets Classified as Held for Sale
Our assets classified as held for sale primarily consist of the properties that we expect to
sell in near future. As of March 31, 2023, 2024 and 2025, our assets classified as held for sale
amounted to nil, RMB2.5 million and nil, respectively.
Trade Payables
Our trade payables primarily represent obligations to pay for goods or services that have
been acquired in the ordinary course of business from our suppliers. As of March 31, 2023,
2024 and 2025, our trade payables amounted to RMB113.5 million, RMB93.2 million and
RMB119.5 million, respectively. The typical credit term granted to us by our suppliers
generally ranged from 60 to 120 days. All the trade payables were payable within one year as
of March 31, 2023, 2024 and 2025.
Our trade payables decreased from RMB113.5 million as of March 31, 2023 to RMB93.2
million as of March 31, 2024, primarily because the credit term granted to us by our certain
major suppliers for the year ended March 31, 2023 was longer than that for the year ended
March 31, 2024. Our trade payables increased from RMB93.2 million as of March 31, 2024 to
RMB119.5 million as of March 31, 2025, which was mainly because our purchases from
suppliers increased as we had anticipated that our business will continue to expand.
FINANCIAL INFORMATION
– 368 –


--- page 379 ---
The following table sets the ageing analysis of the trade payables as at the end of each
date indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,684 54,046 59,060
31 to 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,979 32,556 31,565
Over 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,835 6,621 28,880
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,498 93,223 119,505
The following table sets forth our average trade payables turnover days for the relevant
periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
Average trade payables turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874.2 40.9 37.5
Note:
(1) The calculation of trade payables turnover days is based on the average of the opening balance and
closing balance of trade payables for the relevant year divided by cost of sales and multiplied by the
number of days in the relevant year, which amounted to 365, 366 and 365 for the years ended March
31, 2023, 2024 and 2025, respectively.
Average trade payables turnover days indicate the average time we take to make cash
payments to our suppliers. Our average trade payable turnover days decreased from 74.2 days
for the year ended March 31, 2023 to 40.9 days for the year ended March 31, 2024, mainly
because certain major suppliers we cooperated with in 2023 and 2024 granted us shorter credit
terms compared to other suppliers. Our average trade payable turnover days decreased from
40.9 days for the year ended March 31, 2024 to 37.5 days for the year ended March 31, 2025,
mainly due to the increase in cost of sales as our business continued to expand.
As of the Latest Practicable Date, RMB98.0 million, or 82.0% of our trade payables as
of March 31, 2025 had been subsequently settled.
FINANCIAL INFORMATION
– 369 –


--- page 380 ---
Contract Liabilities
Our contract liabilities represent (i) our obligation to sell goods to customers for which
our Group has received consideration from the customers; and (ii) rebates yet to be claimed by
customers, which will be settled by goods only. Contract liabilities are expected to be settled
within our normal operating cycle and are classified as current liability based on our earliest
obligation to transfer goods to the customers.
Our contract liabilities decreased from RMB23.0 million as of March 31, 2023 to
RMB16.3 million as of March 31, 2024, primarily because we were able to deliver products to
our customers normally after the COVID-19 pandemic had ended. Our contract liabilities
decreased from RMB16.3 million as of March 31, 2024 to RMB13.4 million as of March 31,
2025, primarily because our delivery of products to customers continued to be more efficient
as the international and domestics logistics returned to normal after the COVID-19 pandemic
had ended.
Our Directors confirm that they have no doubt about the genuineness, existence and
reasonableness of our contract liabilities as at the end of each of the year comprising the Track
Record Period.
Accruals and Other Payables
Our accruals and other payables primarily consist of (i) accruals for advertising and
promotion expenses primarily relating to the unpaid expenses for the advertising and
promotion activities that have been conducted; (ii) accrued staff cost, which primarily
represent the delayed payment of salaries and benefits to employees; (iii) advances received
from third parties, which primarily consisted of the advance payments we received from certain
third parties in connection with our contemplated cooperation with them; (iv) other payables
and accruals, which primarily consist of the unpaid charges for miscellaneous services that are
not related to the procurement; and (v) other tax payables, which primarily consist of
value-added taxes arising from our importation of products. All the accruals and other payables
were payable within one year as of March 31, 2023, 2024 and 2025.
FINANCIAL INFORMATION
– 370 –


--- page 381 ---
The following table sets forth the breakdown of our accruals, provisions and other
payables as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current
Accruals for advertising and promotion 79,456 83,837 56,076
Accrued staff cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,264 35,894 34,555
Advances received from third parties /H1118/H1118/H111829,000 26,500 –
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,871 10,588 9,843
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,857 9,682 13,537
Accrual for listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,236 4,730
177,448 168,737 118,741
The accruals and other payables decreased from RMB177.4 million as of March 31, 2023
to RMB168.7 million as of March 31, 2024, primarily due to a decrease of RMB11.4 million
of accrued staff cost, which arose from the delayed payment of employee salaries and benefits
during the year ended March 31, 2023 primarily because we deferred the payment of certain
employee benefits according to the applicable policies published by the relevant government
authorities that allowed such deferred payment to support the operation of the local companies.
The accruals and other payables decreased from RMB168.7 million as of March 31, 2024
to RMB118.7 million as of March 31, 2025, primarily due to (i) a decrease of RMB27.8 million
in accruals for advertising and promotion, mainly because we made faster payment settlement
with the suppliers that provided marketing and promotional services to us; and (ii) a decrease
of RMB26.5 million in advances received from third parties, mainly because we repaid the full
amount of advances received from them as we decided not to proceed with the contemplated
cooperation.
Provisions
Our provisions primarily consist of (i) provisions of unutilized annual leave of our
employees; and (ii) other provisions, which primarily consist of the provisions for expenses
arising from the restoration of our closed stores/counters.
FINANCIAL INFORMATION
– 371 –


--- page 382 ---
The following tables set forth the breakdown of our provisions as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current
Provision for long service payment /H1118/H1118/H1118/H1118780 1,658 2,127
780 1,658 2,127----- ------ ------
Current
Provision of unutilised annual leave /H1118/H1118/H11186,076 6,604 6,991
Other provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,642 3,232 3,153
8,718 9,836 10,144----- ------ ------
9,498 11,494 12,271
Our provisions increased from RMB9.5 million as of March 31, 2023 to RMB11.5 million
as of March 31, 2024, and further to RMB12.3 million as of March 31, 2025, primarily due to
(i) the increase of provisions of unutilized employee annual leave during the Track Record
Period, primarily due to the increase of our employee benefit expenses; and (ii) the increase
of other provisions as of March 31, 2024 as compared to that as of March 31, 2023, primarily
relating to the provisions we made for the expenses arising from the restoration for our
self-operated offline stores/counters.
Income Tax Payable
Our income tax payable primarily consists of income tax payable by our Hong Kong
subsidiaries.
Our income tax payable decreased from RMB24.1 million as of March 31, 2023 to
RMB5.5 million as of March 31, 2024, and then increased to RMB27.2 million as of March 31,
2025, primarily due to our new transfer pricing arrangement since the year ended March 31,
2024. Under such transfer pricing arrangement, (i) for the year ended March 31, 2024, we
utilized tax losses of the relevant mainland China subsidiaries for the years ended March 31,
2022, 2023 and 2024; and (ii) for the year ended March 31, 2025, we only utilized tax losses
for the relevant mainland China subsidiaries for the year ended March 31, 2025, as their
previous tax losses have already been utilized. As a result, the decrease of income tax expense
resulted from the transfer pricing arrangement for the year March 31, 2024 was more
significant than that for the year ended March 31, 2025. For details of our transfer pricing
arrangement, please refer to the section headed “Business — Transfer Pricing Arrangement” in
this prospectus.
FINANCIAL INFORMATION
– 372 –


--- page 383 ---
Amount(s) Due to/from Related Companies/Director/Shareholder
Amounts Due from Related Companies
Our amounts due from related companies were non-trade in nature, which were mainly
derived from the financial assistance we provided to certain of our related companies. Our
amounts due from related companies amounted to RMB56.0 million, RMB51.2 million and
RMB43.0 million as of March 31, 2023, 2024 and 2025, respectively.
Our amounts due from related companies decreased from RMB56.0 million as of March
31, 2023 to RMB51.2 million as of March 31, 2024, and further to RMB43.0 million as of
March 31, 2025, primarily because we requested the repayment of the financial assistance from
the related companies.
The balances of our amounts due from related companies as of March 31, 2025 had been
fully settled by June 13, 2025.
Amounts Due from a Shareholder
Our amounts due from a shareholder were non-trade in nature, which were mainly derived
from the advance payment we made on behalf of one of our Controlling Shareholders, Mrs.
Lau. Our amounts due from a shareholder amounted to RMB0.1 million, RMB0.3 million and
nil as of March 31, 2023, 2024 and 2025, respectively.
Amounts Due to Related Companies
Our amounts due to related companies were non-trade in nature, which were primarily
derived from the financial assistance provided to us by certain of our related companies. Our
amounts due to related companies amounted to RMB61.9 million, RMB7.0 million and nil as
of March 31, 2023, 2024 and 2025, respectively.
Our amounts due to related companies decreased from RMB61.9 million as of March 31,
2023 to RMB7.0 million as of March 31, 2024, and further to nil as of March 31, 2025,
primarily because we continuously settled the outstanding amount of financial assistance with
the related companies.
Amounts Due to a Director
Our amounts due to a director were non-trade in nature, which were mainly derived from
the outstanding payment of dividends to one of our Controlling Shareholders and an executive
Director and chairman of the Board, Mr. Lau. Our amounts due to a director amounted to
RMB76.7 million, RMB187.0 million and RMB116.3 million as of March 31, 2023, 2024 and
2025, respectively. All the amounts due to Director were repayable on demand as of March 31,
2023, 2024 and 2025.
FINANCIAL INFORMATION
– 373 –


--- page 384 ---
Our amounts due to a Director increased from RMB76.7 million as of March 31, 2023 to
RMB187.0 million as of March 31, 2024, primarily reflecting the dividends we declared but
remained due to Mr. Lau during the Track Record Period. Our amounts due to a director
decreased from RMB187.0 million as of March 31, 2024 to RMB116.3 million as of March 31,
2025, and further to RMB116.0 million as of April 30, 2025, primarily because we continued
to settle the payment of dividends due to Mr. Lau. All amounts due to a Director are expected
to be settled upon Listing.
Investment in a Joint Venture
Our investment in a joint venture mainly represents our investment in B&E China, a joint
venture between our Group and Dr. Babor. Our investment in a joint venture amounted to nil,
RMB2.9 million and RMB7.1 million as of March 31, 2023, 2024 and 2025, respectively.
Property, Plant and Equipment
Our property, plant and equipment primarily represent leasehold improvements for our
stores and counters, buildings, computer equipment and motor vehicles. The following table
sets forth the breakdown of our property, plant and equipment as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,603 12,271 11,386
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,167 – –
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118154 291 248
Airconditioning plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118805 659 611
Computer equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,438 3,925 3,252
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,368 1,966 1,393
Furniture and fixtures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118604 449 306
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,139 19,561 17,196
FINANCIAL INFORMATION
– 374 –


--- page 385 ---
Our property, plant and equipment increased from RMB16.1 million as of March 31, 2023
to RMB19.6 million as of March 31, 2024, primarily due to the increases in our leasehold
improvements as we incurred additional expenses on decorating our newly opened self-
operated offline stores and counters. Our property, plant and equipment decreased from
RMB19.6 million as of March 31, 2024 to RMB17.2 million as of March 31, 2025, primarily
due to the decreases in our leasehold improvements, mainly because (i) the number of newly
opened self-operated offline stores and counters for the year ended March 31, 2025 was less
than that for the year ended March 31, 2024, which caused us to incur less expenses on
decorating the stores and counters; and (ii) we continued to record depreciation of property,
plant and equipment.
Intangible Assets
Our intangible assets primarily consist of club membership and computer software. The
following table sets forth the breakdown of our intangible assets as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Club membership /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228 237 242
Computer software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,760 3,448 8,519
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,988 3,685 8,761
Our intangible assets decreased from RMB4.0 million as of March 31, 2023 to RMB3.7
million as of March 31, 2024, primarily because we incurred the related depreciation for the
computer software we installed. Our intangible assets increased from RMB3.7 million as of
March 31, 2024 to RMB8.8 million as of March 31, 2025, mainly because we installed the new
operational system.
Right-of-Use Assets
Our right-of-use assets primarily represents the leases for our offices, warehouses and
shops and counters and office equipment, among others. The following table sets forth the
breakdown of our right-of-use assets as of the dates indicated:
As of March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Offices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,202 12,498 19,877
Warehouses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,907 8,433 1,934
Shops and counters /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,477 59,857 49,508
Copy machines /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,398 1,142 902
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,334 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,318 81,930 72,221
FINANCIAL INFORMATION
– 375 –


--- page 386 ---
Our right-of-use assets increased from RMB66.3 million as of March 31, 2023 to
RMB81.9 million as of March 31, 2024, primarily because we opened new self-operated offline
stores and counters and entered into new leases in connection therewith. Our right-of-use assets
decreased from RMB81.9 million as of March 31, 2024 to RMB72.2 million as of March 31,
2025, mainly because the number of newly opened self-operated offline stores and counters for
the year ended March 31, 2025 was less than that for the year ended March 31, 2024, which
caused us to enter into less new leases.
Deferred Tax Assets
Our deferred tax assets mainly consist of (i) temporary differences between the tax bases
of assets and liabilities and their carrying amounts; and (ii) current and prior year tax losses
to be utilized at the end of each financial year of the Track Record Period. As of March 31,
2023, 2024 and 2025, our deferred tax assets amounted to RMB12.0 million, RMB17.1 million
and RMB25.2 million, respectively. Our deferred tax assets increased from RMB12.0 million
as of March 31, 2023 to RMB17.1 million as of March 31, 2024, primarily attributable to our
expectation that we will utilize the tax losses of our mainland China subsidiaries as of March
31, 2024. Our deferred tax assets increased from RMB17.1 million as of March 31, 2024 to
RMB25.2 million as of March 31, 2025, primarily reflecting the temporary differences between
the tax bases of leasehold liabilities and their carrying amount, tax losses and unrealized profit
on inventories.
INDEBTEDNESS
Our indebtedness mainly consists of lease liabilities, amount due to a director, amount
due to related companies and bank borrowings.
The following table sets forth the breakdown of our indebtedness as of the dates
indicated:
As of March 31,
As of
April 30,
2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,236 52,520 58,507 55,080
Amounts due to related
companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,941 7,045 – –
Amounts due to a director /H1118/H1118/H111876,693 186,951 116,281 115,952
Bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 33,183 31,968
Non-current
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,769 33,074 20,416 18,154
Total indebtedness /H1118/H1118/H1118/H1118/H1118/H1118/H1118211,639 279,590 228,387 221,154
FINANCIAL INFORMATION
– 376 –


--- page 387 ---
Our lease liabilities primarily relate to our leases of the stores and counters at shopping
malls and department stores in China (including Hong Kong and Macau). During the Track
Record Period, we entered into certain short-term and long-term lease contracts for stores and
counters in shopping malls and department stores in China (including Hong Kong and Macau),
which generally have lease terms between one to two years.
Our lease liabilities increased from RMB73.0 million as of March 31, 2023 to RMB85.6
million as of March 31, 2024, primarily because we entered into new leases in connection with
the opening of new self-operated offline stores and counters. Our lease liabilities decreased
from RMB85.6 million as of March 31, 2024 to RMB78.9 million as of March 31, 2025, mainly
due to (i) the decrease of the number of newly opened self-operated offline stores for the year
ended March 31, 2025 as compared to that for the year ended March 31, 2024; and (ii) the
amortization of lease liabilities. Our lease liabilities decreased from RMB78.9 million as of
March 31, 2025 to RMB73.1 million as of April 30, 2025, mainly due to the monthly payment
of rent for the leases.
We had no bank borrowings as of March 31, 2023 and 2024. Our bank borrowings as of
March 31, 2025 and April 30, 2025 amounted to RMB33.2 million and RMB32.0 million,
respectively, which were denominated in HKD with a weighted average effective interest rate
per annum of 5.47% for the year ended March 31, 2025 and 4.99% for the month ended
April 30, 2025. Such bank borrowings were mainly used to finance our working capital
requirements. As of April 30, 2025, we had unutilized banking facilities of RMB186.8 million.
These bank borrowings have certain covenants and undertakings with respect to Eternal
Far East, one of our PRC subsidiaries, including (i) the total liabilities and contingent liabilities
of Eternal Far East not exceeding two times of the tangible net worth of Eternal Far East; and
(ii) the net gearing ratio of Eternal Far East not exceeding 0.3 times. Our Directors confirm that
there had not been any delay or default in repayment of such bank borrowings or material
non-compliance with the covenants or requirements relating to our other borrowings that could
affect the renewal of these bank borrowings during the Track Record Period and up to the
Latest Practicable Date. Our Directors do not expect that the abovementioned covenants and
requirements would materially restrict our Group’s overall ability to undertake additional
indebtedness or equity financing necessary to carry out our business plans.
For further details of our amount due to a director and amounts due to related companies,
please refer to the paragraph headed “— Description of Certain Key Items From Our
Consolidated Statement of Financial Positions — Amount(s) Due to/from Related
Companies/Director/Shareholder” in this section.
FINANCIAL INFORMATION
– 377 –


--- page 388 ---
COMMITMENTS
Our commitments primarily relate to short-term leases relating to offices and warehouses
that are not cancellable. The following table sets forth our short-term-lease commitments as of
the dates indicated:
As of March 31,
As of
April 30,
2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000
No later than one year /H1118/H1118/H1118/H1118/H1118/H11189,842 14,988 15,700 16,222
Statement of Indebtedness
Our Directors confirm that as of the Latest Practicable Date, there was no material
covenant on any of our outstanding debt and there was no breach of any covenant during the
Track Record Period and up to the Latest Practicable Date. Our Directors further confirm that
our Group did not experience any difficulty in obtaining bank loans and other borrowings,
default in payment of bank loans and other borrowings or breach of covenants during the Track
Record Period and up to the Latest Practicable Date.
Except as disclosed above, and apart from intra-group liabilities and normal trade
payables, as of April 30, 2025, we did not have any other material mortgages, charges,
debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,
finance leases or hire purchase commitments, liabilities under acceptances (other than normal
trade bills), acceptance credits, which are either secured or unsecured, or guarantees or other
material contingent liabilities. Our Directors confirm that there has not been any material
change in our indebtedness since April 30, 2025, and up to the date of this prospectus.
CONTINGENT LIABILITIES
As of the Latest Practicable Date, we did not have any unrecorded significant contingent
liabilities, guarantees or any litigation against us.
FINANCIAL INFORMATION
– 378 –


--- page 389 ---
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows Analysis
During the Track Record Period, our principal uses of cash were to fund our working
capital requirements and capital expenditures. We have historically met our working capital
needs primarily through cash flow from operating activities. As of March 31, 2023, 2024 and
2025, our unutilized banking facilities amounted to RMB78.9 million, RMB82.2 million and
RMB187.2 million, respectively.
Upon the completion of the Global Offering, we expect to meet our working capital needs
primarily through cash flows from financing activities, the net proceeds to our Company from
the Global Offering and cash flow from operating activities.
The table below sets forth a summary of our cash flows for the periods indicated:
For the Y ear Ended March 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net cash flows from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,131 161,472 236,703
Net cash flows used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,375) (16,525) (8,515)
Net cash flows used in financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(215,525) (335,355) (132,786)
Net (decrease)/increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(30,769) (190,408) 95,402
Cash and cash equivalents at beginning
of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,393 320,462 150,929
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,838 20,875 9,667
Cash and cash equivalents at end
of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,462 150,929 255,998
FINANCIAL INFORMATION
– 379 –


--- page 390 ---
Net Cash Flows Generated from Operating Activities
During the Track Record Period, our cash flows used in operating activities were
primarily for the payment of income tax, and our cash flows from operating activities were
primarily generated from our sales of perfumes, skincare products, color cosmetics, personal
care products, eyewear and home fragrances.
For the year ended March 31, 2025, out net cash generated from operating activities
amounted to RMB236.7 million. This net cash inflow was primarily attributable to (i) our profit
before income tax expense of RMB260.7 million; (ii) positive total adjustment before
movements in working capital of RMB102.7 million, which was partially offset by (i) negative
movements in working capital of RMB106.7 million; and (ii) payment of income tax of
RMB19.9 million. The positive total adjustment before movements in working capital
primarily reflected (i) depreciation of right-of-use assets of RMB70.9 million; and (ii)
depreciation of property, plant and equipment of RMB25.5 million, which was partially offset
by gains on disposal on assets classified as held for sale of RMB14.8 million. The negative
movements in working capital primarily reflected (i) increase in trade receivables of RMB73.4
million; (ii) decrease in accruals and other payables and provisions of RMB50.3 million; and
(iii) increase in inventories of RMB49.1 million, which was partially offset by (i) decrease in
deposits, prepayments and other receivables of RMB35.4 million; and (ii) increase in trade
payables of RMB24.4 million.
For the year ended March 31, 2024, our net cash generated from operating activities was
RMB161.5 million. This net cash inflow was primarily attributable to (i) our profit before
income tax expense of RMB232.6 million; and (ii) positive total adjustment before movements
in working capital of RMB115.7 million, which was partially offset by (a) negative movements
in working capital of RMB137.0 million; and (b) payment of income tax of RMB49.8 million.
The positive total adjustment before movements in working capital primarily reflected (i)
depreciation of right-of-use assets of RMB57.6 million; (ii) depreciation of property, plant and
equipment of RMB23.1 million; (iii) share-based payment expense of RMB13.6 million; and
(iv) expenses relating to short-term leases of RMB12.9 million. The negative movements in
working capital primarily reflected (i) increase in inventories of RMB38.3 million; (ii) increase
in deposits, prepayments and other receivables of RMB29.7 million; (iii) decrease in trade
payables of RMB22.7 million; and (iv) increase in trade receivables of RMB15.7 million.
For the year ended March 31, 2023, our net cash generated from operating activities was
RMB210.1 million. This net cash inflow was primarily attributable to (i) our profit before
income tax expense of RMB226.9 million; and (ii) positive total adjustment before movements
in working capital of RMB89.4 million, which was partially offset by (i) negative movements
in working capital of RMB72.4 million; and (ii) payment of income tax of RMB33.9 million.
The positive total adjustment before movements in working capital primarily reflected (i)
depreciation of right-of-use assets of RMB50.9 million; and (ii) depreciation of property, plant
and equipment of RMB16.3 million. The negative movements in working capital primarily
FINANCIAL INFORMATION
– 380 –


--- page 391 ---
reflected (i) decrease in trade payables of RMB116.0 million; and (ii) increase in trade
receivables of RMB36.5 million, which was partially offset by (i) decrease in inventories of
RMB56.4 million; and (ii) decrease in deposits, prepayments and other receivables of
RMB24.9 million.
Net Cash Flows (Used in)/Generated from Investing Activities
During the Track Record Period, our investing activities primarily consisted of (i)
purchases of property, plant and equipment; (ii) payments for fixed deposit; (iii) payment for
investment in a joint venture; and (iv) purchases of intangible assets.
For the year ended March 31, 2025, our net cash used in investing activities amounted to
RMB8.5 million. This net cash outflow was primarily attributable to (i) purchase of property,
plant and equipment of RMB26.3 million; and (ii) payment for investment in a joint venture
of RMB7.2 million, which was partially offset by proceeds from disposal of assets classified
as held for sale of RMB17.3 million.
For the year ended March 31, 2024, our net cash used in investing activities was
RMB16.5 million. This net cash outflow was primarily attributable to purchases of property,
plant and equipment of RMB27.6 million, which was partially offset by redemption of fixed
deposit of RMB13.4 million.
For the year ended March 31, 2023, our net cash used in investing activities was
RMB25.4 million. This net cash outflow was primarily attributable to (i) payments for fixed
deposit of RMB13.4 million; and (ii) purchase of property, plant and equipment of RMB13.2
million, which was partially offset by interest received of RMB6.5 million.
Net Cash Flows Used in Financing Activities
During the Track Record Period, our financing activities primarily consisted of (i)
dividends paid; (ii) repayment to a Director; (iii) payments of principal element of lease
liabilities; and (iv) repayment to related parties.
For the year ended March 31, 2025, our net cash used in financing activities amounted to
RMB132.8 million. This net cash outflow was primarily attributable to (i) dividends paid of
RMB75.6 million; and (ii) payment of principal element of lease liabilities of RMB70.8
million, which was partially offset by draw down of bank borrowings of RMB41.4 million.
For the year ended March 31, 2024, our net cash used in financing activities was
RMB335.4 million. This net cash outflow was primarily attributable to (i) dividends paid of
RMB144.9 million; (ii) payment of principal element of lease liabilities of RMB61.2 million;
and (iii) repayment to related parties of RMB61.0 million.
FINANCIAL INFORMATION
– 381 –


--- page 392 ---
For the year ended March 31, 2023, our net cash used in financing activities was
RMB215.5 million. This net cash outflow was primarily attributable to (i) dividends paid of
RMB145.6 million; and (ii) payment of principal element of lease liabilities of RMB50.2
million.
WORKING CAPITAL SUFFICIENCY
During the Track Record Period and up to the Latest Practicable Date, we financed our
working capital needs primarily through cash flow from operating activities. Taking into
account the financial resources available to our Group, including the cash flow from operating
activities, available banking facilities and the estimated net proceeds from the Global Offering,
our Directors are of the view that, after due and careful inquiry, we have sufficient available
working capital for our present requirements for at least the next 12 months from the date of
this prospectus.
CAPITAL EXPENDITURES
Our capital expenditures during the Track Record Period mainly consisted of (i) purchase
of property, plant and equipment and (ii) purchase of intangible assets. Our capital
expenditures amounted to RMB13.2 million, RMB28.9 million and RMB33.6 million for the
years ended March 31, 2023, 2024 and 2025, respectively.
We expect to incur RMB41.2 million of capital expenditures for the year ending March
31, 2026, mainly consisted of (i) purchase of property, plant and equipment and (ii) purchase
of intangible assets. We expect to fund these capital expenditures primarily with cash from
operating activities, the net proceeds from the Global Offering and bank borrowings available
to us.
Our current capital expenditure plans for any future period are subject to change, and we
may adjust our capital expenditures according to our future cash flows, results of operations
and financial condition, our business plans, market conditions and various other factors.
OFF-BALANCE SHEET ARRANGEMENTS
Save as disclosed elsewhere in this prospectus, as of the Latest Practicable Date, we had
not entered into any off-balance sheet transactions.
MATERIAL RELATED PARTY TRANSACTIONS
We entered into certain related party transactions with our related parties during the Track
Record Period, details of which are set out in the paragraph headed “— Description of Certain
Key Items from Our Consolidated Statement of Financial Positions — Amount(s) Due to/from
Related Companies/Director/Shareholder” and note 33 to the Accountant’s Report in Appendix
I to this prospectus.
FINANCIAL INFORMATION
– 382 –


--- page 393 ---
In addition, certain buildings owned by Mr. Lau’s son and related parties were pledged
to secure our Group’s existing banking facilities, which had been unutilized as of March 31,
2023 and 2024, and was released during the year ended March 31, 2025.
Our Directors believe that our transactions with related parties during the Track Record
Period were conducted in the ordinary course of business and on an arm’s length basis, and they
did not distort our track record results or make our historical results not reflective of our future
performance.
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as of the dates and for
the periods indicated:
As of/For the Y ear Ended March 31,
2023 2024 2025
Net profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.2% 11.1% 10.9%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.7 1.7 2.2
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.0 0.9 1.3
Return on equity (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833.0% 41.5% 39.5%
Notes:
(1) Net profit margin equals profit for the year divided by total revenue for the year and multiplied by 100%.
(2) Current ratio equals total current assets divided by total current liabilities as of the end of the year.
(3) Quick ratio equals total current assets less inventories divided by total current liabilities as of the end
of the year.
(4) Return on equity equals profit for the year divided by the average balance of our total equity at the
beginning and end of the year and multiplied by 100%.
Net Profit Margin
Our net profit margin increased from 10.2% for the year ended March 31, 2023 to 11.1%
for the year ended March 31, 2024, and decreased to 10.9% for the year ended March 31, 2025.
Current Ratio
Our current ratio remained relatively stable at 1.7 and 1.7 as of March 31, 2023 and 2024,
respectively. Our current ratio increased to 2.2 as of March 31, 2025, mainly due to (i) the
increase of current assets from RMB897.8 million as of March 31, 2024 to RMB1,071.2
million as of March 31, 2025; and (ii) the decrease of current liabilities from RMB540.1
million as of March 31, 2024 to RMB497.6 million as of March 31, 2025.
FINANCIAL INFORMATION
– 383 –


--- page 394 ---
Quick Ratio
Our quick ratio decreased from 1.0 as of March 31, 2023 to 0.9 as of March 31, 2024,
primarily because our total current assets less inventories decreased from RMB545.0 million
as of March 31, 2023 to RMB507.5 million as of March 31, 2024, while our total current
liabilities increased from RMB533.7 million as of March 31, 2023 to RMB540.1 million as of
March 31, 2024. Our quick ratio increased from 0.9 as of March 31, 2024 to 1.3 as of March
31, 2025, mainly due to (i) the increase of current assets less inventory from RMB507.5 million
as of March 31, 2024 to RMB637.2 million as of March 31, 2025; and (ii) the decrease of
current liabilities from RMB540.1 million as of March 31, 2024 to RMB497.6 million as of
March 31, 2025.
Return on Equity
Our return on equity increased from 33.0% as of March 31, 2023 to 41.5% as of March
31, 2024, primarily because our net profit for the year increased from RMB173.1 million for
the year ended March 31, 2023 to RMB206.5 million for the year ended March 31, 2024, while
the average balance of our total equity decreased from RMB524.0 million for the year ended
March 31, 2023 to RMB497.0 million for the year ended March 31, 2024. Our return on equity
decreased to 39.5% as of March 31, 2025, primarily because the average balance of total equity
increased from RMB497.0 million as of March 31, 2024 to RMB574.8 million as of March 31,
2025, while the profit for the year increased at a slower pace from RMB206.5 million for the
year ended March 31, 2024 to RMB227.0 million for the year ended March 31, 2025.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our activities expose us to a variety of financial risks: foreign exchange risk, cash flow
and fair value interest rate risk, credit risk and liquidity risk. Our overall risk management
program focuses on the unpredictability of financial markets and seeks to minimize potential
adverse effects on our financial performance. Risk management is carried out under policies
approved by the Directors. The Directors provide principles for overall risk management. For
further details, please see note 3 to the Accountant’s Report set out in Appendix I to this
Prospectus.
Foreign Exchange Risk
Our Group is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to HKD, EUR, the British Pound Sterling (the “GBP”) and USD.
Foreign exchange risk arises from future commercial transactions and recognized assets and
liabilities.
The following table demonstrates the sensitivity at the end of each financial year of the
Track Record Period to a reasonably possible change in the exchange rate of foreign currencies,
with all other variables held constant, of our profit after tax (due to changes in the fair value
of monetary assets and liabilities) and our equity.
FINANCIAL INFORMATION
– 384 –


--- page 395 ---
Increase/(decrease)
in rate of foreign
currency
Increase/(decrease)
in profit after tax
% RMB’000
As of March 31, 2023
If HK$ weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 52
If HK$ strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (52)
If EUR weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 3,731
If EUR strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (3,731)
If GBP weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (703)
If GBP strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 703
If US$ weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (5,748)
If US$ strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 5,748
If JPY weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 257
If JPY strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (257)
As of March 31, 2024
If HK$ weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 715
If HK$ strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (715)
If EUR weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 2,258
If EUR strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (2,258)
If GBP weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (7)
If GBP strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857
If US$ weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (947)
If US$ strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 947
If JPY weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 76
If JPY strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (76)
FINANCIAL INFORMATION
– 385 –


--- page 396 ---
Increase/(decrease)
in rate of foreign
currency
Increase/(decrease)
in profit after tax
% RMB’000
As of March 31, 2025
If HK$ weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 4,335
If HK$ strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (4,335)
If EUR weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 3,305
If EUR strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (3,305)
If GBP weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (7)
If GBP strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857
If US$ weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (4,325)
If US$ strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 4,325
If JPY weakens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) 249
If JPY strengthens against RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (249)
We primarily sell products in mainland China and Hong Kong, which are mainly sourced
from the Europe, the United States and Japan. During the Track Record Period, we primarily
paid the suppliers in EUR and USD or other foreign currencies, and were paid by our customers
in HKD and RMB. As a result, any appreciation or depreciation of HKD or RMB against EUR
and USD or other foreign currencies, as the case may be, may affect our profits. We recorded
exchange losses of RMB17.4 million for the year ended March 31, 2023, exchange losses of
RMB1.6 million for the year ended March 31, 2024, and exchange losses of RMB0.2 million
for the year ended March 31, 2025. The exchange losses for the years ended March 31, 2023
and 2024 were recorded mainly because we primarily made payments denominated in EUR to
a number of our brand licensors based in Europe through our available cash in HKD, which was
then converted to EUR for payment settlement, and the exchange rate of EUR against HKD
decreased during the year ended March 31, 2022, and increased since October 2022 until the
middle of 2023, subsequent to which it began to decrease. In addition, we recorded exchange
loss of RMB0.2 million for the year ended March 31, 2025, primarily due to (i) the sharp
increase of the exchange rate of EUR against HKD; and (ii) the sharp decrease of the exchange
rate of RMB, as we primarily received payments denominated in RMB, which was then
converted to HKD for payment settlement with our subsidiaries in Hong Kong.
For the years ended March 31, 2023, 2024 and 2025, we recorded other comprehensive
income of RMB39.1 million, RMB17.3 million and RMB5.4 million from the exchange
differences on translation of foreign operations, respectively. Such income was mainly derived
from the translation differences of financial position and performance of our Group’s Hong
Kong subsidiaries from HKD (the functional currency of these subsidiaries) to RMB (the
presentation currency of our Group) during the Track Record Period.
FINANCIAL INFORMATION
– 386 –


--- page 397 ---
Cash Flow and Fair Value Interest Rate Risk
Our Group’s income and operating cash flows are substantially independent of changes
in market interest rates as we has no significant interest-bearing assets except for cash and cash
equivalents and fixed deposits measured at amortised cost.
Credit Risk
Credit risk of our Group mainly arises from deposits and financial asset at fair value
through profit or loss with banks and financial institutions, as well as credit exposures to trade
receivables, deposits and other receivables and amounts due from related companies, amount
due from a joint venture and amount due from a shareholder. The carrying amounts of these
balances on the statement of financial position represent our maximum exposure to credit risk
in relation to our financial assets.
Our Group’s financial assets, including trade receivables, deposits and other receivables,
amount due from a joint venture, amount due from a shareholder and amounts due from related
companies are subject to the expected credit loss model.
We apply the HKFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit
losses, trade receivables have been assessed individually for provision based on their
respective expected loss rates. The expected loss rates are calculated based on probabilities of
default and loss rates from external credit ratings, industry-specific data or other internal and
external credit data sources. The historical loss rates are adjusted to reflect current and
forward-looking information on macroeconomic factors on the global economic growth
affecting the ability of the customers to settle the receivables. Trade receivables are written off
when there is no reasonable expectation of recovery.
For further details of credit risk, please refer to note 3.1 to the Accountant’s Report in
Appendix I to this prospectus.
Liquidity Risk
Liquidity risk arises from our failure to meet our obligations when they fall due, which
resulted from amount and maturity mismatches of assets and liabilities.
Our Group employs projected cash flow analysis to manage liquidity risk by forecasting
the amount of cash required and monitoring our Group’s working capital to ensure that all
liabilities due and known funding requirements could be met. In order to meet our liquidity
requirements in the short and longer term, our Group members may adjust the amount of
dividends paid to shareholders and drawdown available bank facilities. Further, our
management performs monthly review of receivables and payables ageing analysis to ensure
that our Group is able to maintain sufficient financial resources to meet its liquidity
requirements and to follow up on any overdue balances.
FINANCIAL INFORMATION
– 387 –


--- page 398 ---
Please refer to note 3.1(d) to the Accountant’s Report in Appendix I to this prospectus for
further details of our Group’s financial liabilities into the relevant maturity groupings based on
the remaining period at the end of each Track Record Period to the contractual maturity date
for (i) all financial asset at FVPL; and (ii) net and gross settled financial asset at FVPL
financial instruments for which the contractual maturities are essential for an understanding of
the timing of the cash flows.
DIVIDENDS
No dividend was declared or paid by our Company during the Track Record Period. For
the years ended March 31, 2023, 2024 and 2025, the interim dividends declared by the
companies now comprising our Group to their then equity shareholders, after elimination of
intra-group dividends, amounted to RMB189.4 million, RMB314.3 million and nil,
respectively. Our Group did not declare any final dividends during the Track Record Period.
On May 13, 2025, our Company declared the payment of a final dividend of RMB120.0 million
for the year ended March 31, 2025. As of the Latest Practicable Date, the dividends declared
by our Group were not fully paid, and will be settled before the Listing.
Subject to our constitutional documents and the Companies Act, the Board may declare,
and our Company may pay, dividends after taking into account our results of operations,
financial condition, cash flow, operating and capital expenditure requirements, future business
development strategies and estimates and other factors as it may deem relevant. We may
distribute dividends by way of cash, or warrant. We may distribute stock dividends if our
Directors consider that our stock price and equity scale do not match and that distribution of
stock dividends is beneficial to all Shareholders’ interest. Any declaration and payment as well
as the amount of dividends will be subject to our constitutional documents and the Companies
Act. Any proposed distribution of dividends shall be determined by our Board and must be
approved by our shareholders at a general meeting. In addition, we may declare interim
dividends as our Board considers to be justified by our profits and overall financial
requirements. No dividend shall be declared or payable except out of our profits and reserves
lawfully available for distribution. We do not have a fixed dividend policy. However, following
the Listing, the Board intends to recommend at the relevant Shareholders meeting an annual
dividend of no less than 50% of our profit for the year available for distribution to the
Shareholders, after taking into consideration the factors described above in the foreseeable
future. Our Company may reduce or cease any dividend distribution in certain circumstances
where our Company has net cash outflow from operating activities in the year of the
consolidated statement of accounts, or the amount of proposed investments or acquisitions of
our Company during the year exceeds its operating cash inflow in the same year. Our future
declarations of dividends may or may not reflect our historical declarations of dividends and
will be at the discretion of our Board and subject to the approval of Shareholders’ meeting.
FINANCIAL INFORMATION
– 388 –


--- page 399 ---
DISTRIBUTABLE RESERVES
As of March 31, 2025, our Group had retained earnings of RMB707.6 million available
for distribution upon satisfaction of certain conditions and procedures in accordance with
applicable laws and regulations.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our total listing expenses
(including underwriting commission) will be approximately RMB73.1 million. During the
Track Record Period, listing expenses of approximately RMB5.6 million and RMB18.7 million
were charged to our consolidated statements of profit or loss for the year ended March 31, 2024
and the year ended March 31, 2025, respectively, and approximately RMB6.6 million were
recognized as prepaid listing expenses as of March 31, 2025, which are expected to be
deducted from equity upon Listing as they are directly attributable to the issue of the Shares
to the public. The estimated remaining listing expenses of approximately RMB15.5 million are
expected to be charged to our consolidated statements of profit or loss for the year ending
March 31, 2026, and approximately RMB26.7 million are expected to be deducted from equity
upon Listing. The listing expenses consisted of RMB20.3 million underwriting-related
expenses and RMB52.8 million non-underwriting-related expenses (including fees and
expenses of legal advisors and the reporting accountant of RMB30.2 million and other fees and
expenses of RMB22.6 million). The Selling Shareholders will not bear any of the listing
expenses.
NO MATERIAL ADVERSE CHANGE
After performing sufficient due diligence work which our Directors consider appropriate
and 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 or trading position or
prospects since March 31, 2025, being the date on which our latest audited consolidated
financial statements were prepared, and there is no event since March 31, 2025 which would
materially affect the information as set out in the Accountant’s Report in Appendix I to this
prospectus.
DISCLOSURE UNDER RULE 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
– 389 –


--- page 400 ---
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of our Group prepared in accordance with paragraph 4.29 of the Listing Rules is for illustrative
purposes only, and is set out below to illustrate the effect of the Global Offering on the net
tangible assets of our Group attributable to owners of our Company as of March 31, 2025 as
if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of our
Group has been prepared for illustrative purposes only and because of its hypothetical nature,
it may not provide a true picture of the consolidated net tangible assets of our Group as of
March 31, 2025 or at any future dates following the Global Offering.
Audited
Consolidated Net
Tangible Assets
of our Group
Attributable to
the Owners of
our Company
as of
March 31, 2025 (1)
Estimated Net
Proceeds from the
Global Offering (2)
Unaudited Pro
Forma Adjusted
Consolidated Net
Tangible Assets
Attributable to
the Owners of
our Company
as of
March 31, 2025
Unaudited Pro Forma
Adjusted Consolidated
Net Tangible Assets per
Share (3)(4)(5)
RMB’000 RMB’000 RMB’000 RMB HK$
Based on an
Offer Price of
HK$2.80 per
Offer Share /H1118/H1118 682,229 808,415 1,490,644 1.12 1.22
Based on an
Offer Price of
HK$3.38 per
Offer Share /H1118/H1118 682,229 979,906 1,662,135 1.25 1.36
Notes:
(1) The audited consolidated net tangible assets of our Group attributable to the owners of our Company
as at March 31, 2025 is extracted from the Accountant’s Report set out in Appendix I to this prospectus,
which is based on the audited consolidated net assets of our Group attributable to the owners of our
Company as at March 31, 2025 of approximately RMB690,990,000 after deducting our Group’s
intangible assets of approximately RMB8,761,000 as at March 31, 2025.
(2) The estimated net proceeds from the Global Offering are based on 333,400,000 Shares and the indicative
Offer Price of HK$2.80 per Offer Share and HK$3.38 per Offer Share, being low and high end of the
indicative Offer Price range, after deduction of the underwriting fees and other related expenses
(excluding listing expenses of approximately RMB24,295,000 which have been accounted for in the
consolidated statement of comprehensive income for the year ended March 31, 2024 and March 31,
2025).
FINANCIAL INFORMATION
– 390 –


--- page 401 ---
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the
adjustments referred to in the preceding paragraphs and on the basis that 1,333,400,000 Shares were in
issue, assuming that the Capitalization Issue and the Global Offering had been completed on March 31,
2025 but does not take into account of any Shares which may be allotted and issued by our Company
pursuant to the general mandate or repurchased by our Company pursuant to the exercise of
Over-allotment Option of the repurchase mandate as described in the section headed “Share Capital” in
this prospectus.
(4) For the purpose of the unaudited pro forma statement of adjusted consolidated net tangible assets, the
translation of Renminbi amounts into Hong Kong dollars was at rate of RMB0.9154 to HK$1.00. No
representation is made that Renminbi amounts have been, could have been or may be converted to Hong
Kong dollars, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to
reflect any trading results or other transactions of our Group, including (i) the declaration of dividends
after 31 March 2025, and (ii) the disposal of E&C Holdings.
On 13 May 2025, we declared the payment of a dividend of RMB120.0 million for the year ended March
31, 2025. The amount has not been recognized as a liability as of March 31, 2025 and is not adjusted
in the unaudited pro forma adjusted consolidated net tangible assets. The unaudited pro forma adjusted
net tangible assets and unaudited pro forma adjusted net tangible assets per Offer Share would have been
RMB1,371 million and HK$1.12 (equivalent to RMB1.03) based on the indicative Offer Price of
HK$2.80, and RMB1,542 million and HK$1.26 (equivalent to RMB1.16) based on the indicative Offer
Price of HK$3.38, being the low-end and high-end, respectively, after taking into account the dividend
declared set forth in note 14 of the Accountants’ Report set out in the Appendix I to the prospectus.
On 22 May 2025, we entered into a sale and purchase agreement with Kering pursuant to which we
agreed to dispose 100% issued share capital of E&C Holdings to Kering at a total consideration of
RMB82.5 million as set forth in note 35 of the Accountants’ Report set out in Appendix I to the
prospectus. As the final consideration is still subject to adjustments based on the financial information
of the E&C Group as of the completion date, the actual gains on the disposal of the E&C Group and
its relevant impact to the consolidated financial statements of our Group for the year ending March 31,
2026 cannot be determined and is not reflected in this unaudited pro forma financial information.
FINANCIAL INFORMATION
– 391 –


--- page 402 ---
FUTURE PLANS
Please refer to the section headed “Business — Our Business Strategies” in this
prospectus for a detailed discussion of our future plans.
USE OF PROCEEDS
The table below sets forth the estimated net proceeds of the Global Offering which we
will receive after deduction of underwriting fees and commissions and estimated expenses
payable by us in connection with the Global Offering (assuming the Over-allotment Option is
not exercised):
Assuming an Offer Price of HK$2.80 per Offer Share
(being the low end of the Offer Price range stated in
this prospectus) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$856.7 million
Assuming an Offer Price of HK$3.09 per Offer Share
(being the mid-point of the Offer Price range stated in
this prospectus) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$950.4 million
Assuming an Offer Price of HK$3.38 per Offer Share
(being the high end of the Offer Price range stated in
this prospectus) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$1,044.0 million
We intend to use the net proceeds from the Global Offering for the purposes and in the
amounts set out below:
Allocation of the Estimated Net
Proceeds (calculated at
mid-point of the Offer Price) Proposed Main Purposes
Approximately 15.0%, or
HK$142.6 million /H1118/H1118/H1118/H1118/H1118
Further develop our self-owned brands and acquire or
invest in external brands. See the section headed “Business
— Our Business Strategies — Strengthen our market
leading position through optimizing, broadening and
diversifying our brand and product portfolios” in this
prospectus for details.
Specifically, we plan to implement the following
measures:
 Approximately 5.0%, or HK$47.6 million, will be
used to fund the development of our self-owned
brands other than Santa Monica to be launched in the
future. We plan to use the net proceeds of the Global
Offering to, among others, conduct the preliminary
market research, carry out requisite research and
development of the brand(s) and product(s), plan and
conduct advertising and promotional activities, and
pay the salaries and benefits to the relevant staff.
FUTURE PLANS AND USE OF PROCEEDS
– 392 –


--- page 403 ---
Allocation of the Estimated Net
Proceeds (calculated at
mid-point of the Offer Price) Proposed Main Purposes
 Approximately 5.0%, or HK$47.5 million, will be
used to fund the development of our existing self-
owned brand, Santa Monica. We plan to use the net
proceeds of the Global Offering to, among others,
launch new product series, participate in product
exhibitions, conduct advertising and promotional
activities, and pay the salaries and benefits to the
relevant staff.
 Approximately 5.0%, or HK$47.5 million, will be
used to fund the acquisition of, or investment in,
external brands through acquiring or investing in the
brand owners of the relevant brands or forming joint
ventures with them to operate such brands. Based on
the acquisition and investment selection criteria we
identified in the section headed “Business — Our
Business Strategies — Strengthen our market leading
position through optimizing, broadening and
diversifying our brand and product portfolios”, we
believe that there is a group of suitable acquisition or
investment targets. According to Frost & Sullivan,
there are approximately 200 enterprises that satisfy
the above-mentioned selection criteria. In line with
our expansion strategy, our Directors are of the view
that these enterprises comprise a list of potential
acquisition targets we would consider pursuing in the
future. However, as of the Latest Practicable Date, we
have not identified any specific acquisition targets.
We intend to apply the above-mentioned criteria to
identify potential suitable acquisition targets and plan
to carry out one or more acquisitions in the next three
years. The completion timetable depends on the
duration of the vetting/approval process.
FUTURE PLANS AND USE OF PROCEEDS
– 393 –


--- page 404 ---
Allocation of the Estimated Net
Proceeds (calculated at
mid-point of the Offer Price) Proposed Main Purposes
Approximately 55.0%, or
HK$522.8 million /H1118/H1118/H1118/H1118/H1118
Develop and expand our direct sales channels. See the
section headed “Business — Our Business Strategies —
Extend our consumer reach through continued investment
in our direct sales channels”. Specifically, we plan to (i)
expand the coverage of our Perfume Box stores by opening
20, 40 and 40 new Perfume Box stores in the first tier, new
first tier and second tier cities in mainland China for the
years ending March 31, 2026, 2027 and 2028 using the net
proceeds from the Global Offering; and (ii) expand our
other self-operated stores and counters by opening 30, 30
and 30 other new self-operated stores/counters in first tier,
new first tier and second tier cities in China (including
Hong Kong and Macau) for the years ending March 31,
2026, 2027 and 2028 using the net proceeds from the
Global Offering. In selecting the shopping malls or
department stores for opening the new stores or counters,
we will primarily take into consideration (i) the amount of
stores opened by other leading industry players in the
shopping malls or department stores; (ii) whether the
market positioning and image of the shopping malls or
departments stores are consistent with that of Perfume Box
or the branded products to be launched in the relevant new
stores or counters; and (iii) the historical consumer traffic
of the shopping malls or department stores. In particular,
we will only open Perfume Box stores in shopping malls,
which we believe have certain advantages, such as
favorable rent arrangements and appealing decoration, as
compared with department stores.
We intend to implement the following measures:
 Approximately 20.0%, or HK$190.1 million, will be
used to open our new Perfume Box stores. We plan to
use the net proceeds of the Global Offering to, among
others, decorate the new stores, conduct advertising
and promotional activities, pay the rents for the
property leases, and pay the salaries and benefits of
the relevant staff. For further details of our expansion
plans of offline Perfume Box stores, please refer to
the paragraph headed “Business — Sales and
Distribution of Products — Direct Sales Channels —
Expansion Plans” in this prospectus.
FUTURE PLANS AND USE OF PROCEEDS
– 394 –


--- page 405 ---
Allocation of the Estimated Net
Proceeds (calculated at
mid-point of the Offer Price) Proposed Main Purposes
 Approximately 35.0%, or HK$332.7 million, will be
used to open our other new self-operated offline
stores/counters. We plan to use the net proceeds of
the Global Offering to, among others, decorate the
new stores, conduct advertising and promotional
activities, pay the rent for the property leases and pay
salaries and benefits of the relevant staff. For further
details of our expansion plans of other offline self-
operated stores and counters, please refer to the
paragraph headed “Business — Sales and
Distribution of Products — Direct Sales Channels —
Expansion Plans” in this prospectus.
Approximately 10.0%, or
HK$95.0 million /H1118/H1118/H1118/H1118/H1118/H1118
Accelerate our digital transformation. See the section
headed “Business — Our Business Strategies —
Accelerate digital transformation to streamline our
business operations and strengthen the support for our
full-cycle consumer management program” in this
prospectus for details. Specifically, it is our intention to
streamline our business operations, improve our operating
efficiency, and strengthen our technological capability
through digital transformation. We intend to implement the
following measures:
 Approximately 2.0%, or HK$19.0 million, will be
used to fund the upgrade of our digitalized CRM
system.
 Approximately 3.0%, or HK$28.5 million, will be
used to fund the upgrade of our mid-office systems to
improve the efficiency and effectiveness of our
business operations.
 Approximately 5.0%, or HK$47.5 million, will be
used to fund the upgrade of our finance and operation
systems.
FUTURE PLANS AND USE OF PROCEEDS
– 395 –


--- page 406 ---
Allocation of the Estimated Net
Proceeds (calculated at
mid-point of the Offer Price) Proposed Main Purposes
With respect to upgrading our digitalized CRM system,
mid-office systems, and finance and operation systems, we
plan to use the net proceeds of the Global Offering to
upgrade hardware, purchase new software, and pay for the
services of the third-party IT consultants in connection
with the implementation of each of the foregoing
initiatives.
Approximately 10.0%, or
HK$95.0 million /H1118/H1118/H1118/H1118/H1118/H1118
Enhance the recognition and reputation of our Group. See
the section headed “Business — Our Business Strategies
— Enhance the recognition and industry-leading
reputation of our Group” in this prospectus for details. We
plan to invest in various marketing events that can enhance
our recognition by industry players and consumers, and
solidify our leading position in the perfumes market in
China (including Hong Kong and Macau). We intend to
implement the following measures:
 Approximately 4.0%, or HK$38.0 million, will be
used to fund our industry research and the publication
of research papers. We plan to use the net proceeds of
the Global Offering to, among others, conduct market
research, prepare the research papers and launch
conferences to announce the research results or
publish the research papers.
 Approximately 4.0%, or HK$38.0 million, will be
used to fund our organization of and participation in
industry-wide perfume conferences and other events.
 Approximately 2.0%, or HK$19.0 million, will be
used to fund our various promotional campaigns to
further promote consumer awareness in both the
brands in our brand portfolio and our Group.
Approximately 10.0%, or
HK$95.0 million /H1118/H1118/H1118/H1118/H1118/H1118
Working capital and general corporate purposes to support
our business operation and growth.
FUTURE PLANS AND USE OF PROCEEDS
– 396 –


--- page 407 ---
Reasons and Benefits for the Development of Self-owned Brands and Direct Sales
Channels
Self-owned Brands
We accumulated the relevant experience operating our existing self-owned brand, Santa
Monica. During the Track Record Period, we have made efforts to capture the market
opportunities in mainland China’s perfumes market and eyewear market by upgrading our
design of Santa Monica-branded perfumes and eyewear. Specifically:
 Eyewear : In 2021, we engaged a third-party consumer research consultant to
conduct surveys on the potential and existing consumers of our Santa Monica-
branded eyewear to pinpoint how we could improve the competitiveness of our
Santa Monica-branded eyewear. According to these surveys, (i) a number of
interviewed consumers responded that the Santa Monica-branded sunglasses had the
potential to compete against certain famous and luxurious brands for sunglasses; (ii)
a number of interviewed consumers with ages from 26 to 40 recognized the wearing
experiences of our skin-friendly series ( ፋᇮӻΐ) Santa Monica-branded optical
glasses; (iii) we should make the features of our Santa Monica-branded eyewear
more distinctive in our branding and marketing initiatives to differentiate them from
other eyewear brands; and (iv) we should introduce new Santa Monica-branded
optical glasses with more fashionable design to appeal to the target consumers. In
2023, we launched the S series, M series and K series of Santa Monica-branded
eyewear with upgraded designs according to the surveys.
 Perfumes : Before we launched our Santa Monica-branded perfumes, we also
engaged a third-party consumer research consultant in 2021 to conduct surveys on
the potential consumers to guide our product development and marketing initiatives
involving Santa Monica-branded perfumes. The interviewed consumers tried our
Santa Monica-branded perfume samples olfactorily, and graded them based on
factors including their preferences for the scent, the distinctiveness of the scent, the
compatibility of the scent with the product names and packaging. In 2022, we
launched five Santa Monica-branded perfumes based on the results of these surveys,
thereby allocating our market deployment resources effectively.
Our efforts in terms of Santa Monica-branded eyewear and perfumes were effective in
improving their financial performance. The revenue generated from Santa Monica-branded
eyewear increased from RMB4.6 million for the year ended March 31, 2023 to RMB16.6
million for the year ended March 31, 2024. Revenue generated from Santa Monica-branded
eyewear amounted to RMB10.1 million for the year ended March 31, 2025. The revenue
generated from Santa Monica-branded perfumes amounted to RMB0.7 million, RMB0.4
million and RMB0.4 million for the years ended March 31, 2023, 2024 and 2025. We believe
the decrease of revenue generated from Santa Monica-branded perfumes from the year ended
March 31, 2023 to the year ended March 31, 2024 was primarily attributable to our
reduction in advertising and promotional activities during the year ended March 31, 2024 in
anticipation that we would launch new Santa Monica-branded products with upgraded designs
in early 2025, which required new branding and marketing approaches. However, we
FUTURE PLANS AND USE OF PROCEEDS
– 397 –


--- page 408 ---
maintained a gross profit margin of Santa Monica-branded products, which is calculated by
subtracting the cost of goods sold from the sales of goods involving these products, at more
than 45.0% for each year during the Track Record Period, which was higher than that of most
of our Major Brands for the same periods.
We believe the financial performance of Santa Monica-branded products and consumers’
surveys demonstrated that our Santa Monica brand has the potential to become a growth engine
of our Group. We plan to continue to upgrade our product design and market deployment of
Santa Monica-branded products based on consumers’ feedback and prevailing market trends.
As of the Latest Practicable Date, we were upgrading the product designs of our S series and
M series Santa Monica-branded eyewear. We plan to launch several new eyewear products
under these two series in 2025.
With respect to the development of self-owned brand(s) other than Santa Monica, we also
conducted feasibility studies of the relevant industries to guide our development efforts. For
instance, in 2024, we conducted market feasibility studies of the skincare industry in mainland
China based on the market data and information in 2023, which demonstrated that, among
others, (i) the treatment skincare products (ۜthat help fix the skin problems
became increasingly more popular among consumers; (ii) increasingly more young consumers
with ages from 25 to 35 have been paying attention to the aging problems of the skin, such as
loss of collagen, dryness, wrinkles and enlarged skin pores; (iii) the penetration of the aesthetic
medicine treatment (ߕwhich encompasses medical procedures using the professional
skincare products to improve the physical appearance and satisfaction of the patient, in the
second-tier and lower-tier cities in mainland China has been increasing; and (iv) the sales
revenue of skincare products on major e-commerce platforms, such as Taobao.com, JD.com
and Douyin, remained the highest among online channels for the sales of skincare products. We
may develop skincare brand(s) based on these insights. For further details of reasons and
benefits of investing in the development of self-owned brand(s), please refer to the section
headed “Business — Our Business Strategies — Strengthen our market leading position
through optimizing, broadening and diversifying our brand and product portfolios —
Self-owned Brands” in this prospectus.
Direct Sales Channels
Certain of our self-operated offline stores and counters recorded loss during the Track
Record Period. For details, please refer to the section headed “Business — Sales and
Distribution of Products — Direct Sales Channels” in this prospectus. Although certain number
of our self-operated offline stores and counters recorded losses during the Track Record Period,
we believe there will be sufficient market demand to support our plans to open new offline
Perfume Box stores and other self-operated offline stores and counters, considering that:
(i) there remain a number of new first-tier and second-tier cities in mainland China
where we had no presence or had limited presence as of the Latest Practicable Date.
The perfumes markets in these cities are expected to demonstrate strong growth
potential in the next five years. According to Frost & Sullivan, the market size of
FUTURE PLANS AND USE OF PROCEEDS
– 398 –


--- page 409 ---
perfumes in mainland China in the new first-tier and second-tier cities is expected
to grow at a CAGR of 17.0%, which is faster than that in first-tier cities at 10.6%
in the next five years. Our current coverage in the new first-tier and second-tier
cities through direct sales channels is limited. As of March 31, 2025, our offline
Perfume Box stores only covered two first-tier cities (namely, Shenzhen and
Shanghai), one new first-tier city (namely, Kunming) and one second-tier city
(namely, Foshan) in mainland China. As of the same date, only 35, or approximately
29.4%, of our self-operated offline stores and counters were located in new first-tier
and second-tier cities in mainland China. These self-operated offline stores and
counters covered only 14, or approximately 31.1% of the new first-tier and
second-tier cities in mainland China. We expect to open 86 new offline Perfume Box
stores in the new first-tier and second-tier cities in the next three years, covering 46
new first-tier and second-tier cities. Subject to confirmation with the relevant brand
licensors on the locations of other self-operated offline stores and counters, we also
expect that our other self-operated offline stores and counters will expand our
coverage in new first-tier and second-tier cities in mainland China through direct
sales channels;
(ii) the revenue generated from our offline Perfume Box stores increased from RMB1.0
million for the year ended March 31, 2023 to RMB2.2 million for the year ended
March 31, 2025. The gross profit margin of our offline Perfume Box stores increased
from 66.1% for the year ended March 31, 2023 to 75.7% for the year ended March
31, 2025;
(iii) the total revenue generated from our self-operated offline stores and counters
increased from RMB214.8 million for the year ended March 31, 2023 to RMB267.7
million for the year ended March 31, 2025;
(iv) the total revenue generated from our self-operated offline stores and counters under
continuous operation during the Track Record Period continued to increase during
the three years ended March 31, 2023, 2024 and 2025. For details, please refer to the
section headed “Business — Sales and Distribution of Products — Direct Sales
Channels” in this prospectus.
We believe that the losses recorded by a number of our self-operated stores/counters
during the Track Record Period were attributable to certain historical factors that are not likely
to continue to negatively affect the performances of our self-operated stores/counters in the
near future, including the impact of COVID-19 pandemic and the shift of industry trend. For
details, please refer to the section headed “Business — Sales and Distribution of Products —
Direct Sales Channels” in this prospectus.
FUTURE PLANS AND USE OF PROCEEDS
– 399 –


--- page 410 ---
Our self-operated offline stores and counters play a pivotal role in optimizing our
marketing effects and strengthening our relationships with our brand licensors, which in turn
stimulate and improve our sales in our entire sales and distribution network. We believe this
has led to our overall growth of revenue and profitability during the Track Record Period. This
was primarily because: (i) we have more control over the sales and marketing activities
conducted at these stores and counters, which enables us to maximize the branding effect for
the brands in our brand portfolio; (ii) we are able to collect insights of the market demands on
the ground through our self-operated offline stores and counters, which can contribute to our
market analysis; (iii) our direct and in-person interaction with consumers through our resident
beauty advisors is able to help build consumer loyalty; (iv) the offline olfactory experiences
and exposure to our products at our self-operated offline stores and counters allow end
consumer to experience such products first hand, which may facilitate and stimulate them to
make subsequent purchases via online channels operated by us, our distributors or retailers;
and (v) we are required by certain of our brand licensors to launch their branded products at
offline stores and counters, which may be boutique stores with specifications of locations and
decorations, within a specified period of time. Launching these branded products at our
self-operated offline stores and counters may be the only approach to guarantee such
specifications, given that we have full control over their operations. As we operate an
omni-channel online and offline network consisting of direct sales channels, retailer channels
and distribution channels, the branding effect, market insights and consumer loyalty
accumulated from our self-operated offline stores and counters will contribute to the online
sales in online channels, as well as offline sales in retailer channels and distribution channels,
thereby continuously achieving our overall revenue growth and profitability.
The table below sets forth further details of the number of new offline Perfume Box stores
to be opened by tiers of cities:
For the Y ear Ending March 31,
2026 2027 2028
First-tier cities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868–
New first-tier cities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 26 –
Second-tier cities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 4 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 40 40
The table below sets forth further details of the number of new self-operated offline
stores/counters to be opened by existing brands/new brands:
For the Y ear Ending March 31,
2026 2027 2028
Stores/counters for existing brands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118555
Stores/counters for new brands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 25 25
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 30 30
FUTURE PLANS AND USE OF PROCEEDS
– 400 –


--- page 411 ---
Based on our experience, the respective length of the breakeven period (defined as the
time needed to reach first point in time at which a store’s monthly operating revenue is at least
equal to its monthly operating expenses such as costs of goods sold, rent, staff costs,
depreciation expenses related to the store and taxes, the “Breakeven Period”) and investment
payback period (defined as the time needed to reach the first point in time at which the
accumulated net profit of the store is at least equal to the costs of opening and operating the
stores, the “Investment Payback Period”) generally depends on, among other things, the
prevailing market conditions, the economic environment, the size and location of the relevant
store, the estimated consumer flow, rent and other payables to the facility owners, the type and
variety of products available for sale in a particular store, operating performance, operating
cost and initial investment cost of a particular retail store. Therefore, the period for reaching
the Breakeven Period or the Investment Payback Period varies substantially from store to store
and over time.
For the purpose of calculating the Breakeven Period and Investment Payback Period, we
used similar estimated capital expenditures on our self-operated offline Perfume Box stores and
self-operated offline stores/counters, including, among others, rental expenses and salaries and
benefits of the store/counter employees. Accordingly, we currently expect that the Breakeven
Period for our new offline Perfume Box stores and self-operated offline stores/counters will be
at least approximately nine months, and the Investment Payback Period for these stores and
counters will be at least approximately 2.5 years. The calculation of the Breakeven Period and
Investment Payback Period is primarily based on following assumptions:
(i) The initial cost per store ranges from RMB480,000 to RMB1,500,000, which varies
depending on the store location, GFA and initial decoration requirements;
(ii) The monthly expenses per store range from RMB75,000 to RMB270,000, which
consist of (a) cost of sales, which is assumed to be 30% of the monthly revenue; (b)
employee costs, such as salaries and benefits; (c) rental expenses; and (d) expenses
for advertising and promotion, The amount of employee costs, rental expenses and
expenses for advertising and promotion also depends on the store location, GFA and
length of operation. The rental expense is generally assumed to increase by 5% each
year; and
(iii) The monthly revenue per store typically ranges from RMB65,000 to RMB355,000,
which varies depending on the store location, GFA and length of operation. In
connection with the calculation of such assumed monthly revenue per store, we
made reference to the historical revenue generated from our offline Perfume Box
stores and self-operated offline stores and counters during the Track Record Period.
FUTURE PLANS AND USE OF PROCEEDS
– 401 –


--- page 412 ---
Implementation Timeline
The following table sets forth a breakdown of the net proceeds estimated to be applied in
the financial years indicated.
For the Y ear Ending March 31,
2026 2027 2028
(in millions of HK$)
Use of Proceeds
Further development of our self-owned
brands and acquisition of or investment
in external brands
— Development of our self-owned brands
other than Santa Monica to be
launched in the future /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.8 15.9 15.9
— Development of our existing self-
owned brand, Santa Monica /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.8 15.8 15.9
— Acquisition of, or investment in,
external brands through acquiring or
investing in the brand owners of the
relevant brands or forming joint
ventures with them to operate such
brands /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.8 15.8 15.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847.4 47.5 47.7
Development and expansion of our direct
sales channels
— Opening our new Perfume Box stores /H1118 38.1 76.0 76.0
— Opening our other new self-operated
offline stores/counters /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110.9 110.9 110.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149.0 186.9 186.9
Acceleration of our digital transformation
— Upgrading our digitalized CRM
system /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.3 6.3 6.4
— Upgrading our mid-office systems /H1118/H1118/H1118/H11189.5 9.5 9.5
— Upgrading our finance and operation
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.8 15.8 15.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831.6 31.6 31.8
Enhancement of the recognition and
reputation of our Group
— Industry research and the publication
of research papers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812.7 12.7 12.6
FUTURE PLANS AND USE OF PROCEEDS
– 402 –


--- page 413 ---
For the Y ear Ending March 31,
2026 2027 2028
(in millions of HK$)
— Organization and participation in
industry-wide perfume conferences and
other events /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812.7 12.7 12.6
— Promotional campaigns /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.3 6.3 6.4
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831.7 31.7 31.6
Working capital and general corporate
purposes to support our business operation
and growth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831.7 31.7 31.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118291.4 329.4 329.6
The above allocation of the proceeds will be adjusted on a pro rata basis in the event that
the Offer Price is fixed at a higher or lower level compared to the mid-point of the estimated
offer price range of HK$2.80 to HK$3.38 per Offer Share.
To the extent our net proceeds are either more or less than expected, we will increase or
decrease the allocation of the net proceeds to the above purposes on a pro-rata basis.
In addition, to the extent that the net proceeds of the Global Offering are not immediately
applied to the above purposes and to the extent permitted by the relevant law and regulations,
the unused net proceeds will only be held in short-term interest-bearing accounts at licensed
commercial banks and/or other authorized financial institutions (as defined under the
Securities and Futures Ordinance) or the applicable laws and regulations in other jurisdictions.
We will make appropriate announcement(s) if there is any material change to the above
proposed use of proceeds.
If the Over-allotment Option is fully exercised, we will receive additional net proceeds
of approximately HK$46.3 million for 15,350,000 OAO New Shares to be allotted and issued
upon the full exercise of the Over-allotment Option based on the Offer Price of HK$3.09 per
Offer Share, being the mid-point of the Offer Price range, and after deducting the underwriting
fees and commissions payable by us. The additional amount raised will be applied to the above
areas of the use of proceeds on a pro-rata basis. We expect to finance the shortfall if the net
proceeds of the Global Offering are less than our expected expenditure by using our internal
funds and/or funds to be obtained from other financing activities, as appropriate.
We will not receive any proceeds from the sale of the OAO Sale Shares by the Selling
Shareholder in the Global Offering. We estimate that the Selling Shareholder will receive gross
proceeds of approximately HK$107.1 million (in the event that the Over-allotment Option is
exercised in full) from the sale of the OAO Sale Shares, based on the Offer Price of HK$3.09
per Share.
FUTURE PLANS AND USE OF PROCEEDS
– 403 –


--- page 414 ---
HONG KONG UNDERWRITERS
BNP Paribas Securities (Asia) Limited
CLSA Limited
(below in alphabetical order)
CMB International Capital Limited
DBS Asia Capital Limited
(below in alphabetical order)
China Harbour International Securities Limited
First Shanghai Securities Limited
Futu Securities International (Hong Kong) Limited
SBI China Capital Financial Services Ltd.
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters. If, for any reason, the Offer Price is not agreed between the
Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) and our
Company (for ourselves and on behalf of the Selling Shareholder) by 12:00 noon on Tuesday,
June 24, 2025, the Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 33,340,000
Hong Kong Offer Shares and the International Offering of initially 300,060,000 International
Offer Shares and, subject, in each case, to reallocation on the basis as described in “Structure
of the Global Offering” as well as to the Over-allotment Option (in the case of the International
Offering).
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement entered into among us, the
Controlling Shareholders, the Selling Shareholder, the Joint Sponsors and the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters), our Company is
offering the Hong Kong Offer Shares for subscription by the public in Hong Kong on the terms
and conditions set out in this prospectus and the Hong Kong Underwriting Agreement at the
Offer Price.
UNDERWRITING
– 404 –


--- page 415 ---
Subject to (a) the Listing Committee granting approval for the listing of, and permission
to deal in, the Shares in issue and to be issued pursuant to the Global Offering (including any
additional Shares that may be issued pursuant to the exercise of the Over-allotment Option) on
the Main Board of the Stock Exchange, and such approval and permission not subsequently
having been withdrawn or revoked prior to the commencement of dealings in the Shares on the
Stock Exchange and (b) certain other conditions set out in the Hong Kong Underwriting
Agreement, the Hong Kong Underwriters have agreed severally but not jointly to procure
subscribers for, or themselves to subscribe for, their respective applicable proportions of the
Hong Kong Offer Shares being offered which are not taken up under the Hong Kong Public
Offering on the terms and conditions set out in this prospectus and the Hong Kong
Underwriting Agreement. The Hong Kong Underwriting Agreement is conditional on, among
other things, the International Underwriting Agreement having been executed and becoming
unconditional and not having been terminated in accordance with its terms.
Grounds for Termination
The obligations of the Hong Kong Underwriters to subscribe or procure subscribers for
the Hong Kong Offer Shares under the Hong Kong Underwriting Agreement are subject to
termination. If at any time prior to 8:00 a.m. on the day that trading in the Shares commences
on the Stock Exchange:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a
prospective change (whether or not permanent) or any event or series of events
or circumstance likely to result in any change or development involving a
prospective change (whether or not permanent) in existing law or regulation
(or in the interpretation or application thereof by any court or other competent
authority), in each case, in or affecting Hong Kong, the PRC, Macau, the
United States, the United Kingdom, the European Union (or any member
thereof), the Cayman Islands, the BVI, Singapore, Japan or any other
jurisdiction where any member of our Group is incorporated or established or
operates or any other jurisdiction relevant to any member of the Group or the
Global Offering (each a “ Relevant Jurisdiction ”); or
(ii) any change or development involving a prospective change (whether or not
permanent), or any event or circumstance or series of events or circumstances
likely to result in a change or development or prospective change (whether or
not permanent), in local, national, regional or international financial, legal,
political, military, industrial, economic, fiscal, regulatory, currency, credit or
market conditions or sentiments, equity securities or other financial markets
(including, without limitation, conditions and sentiments in stock and bond
markets, money and foreign exchange markets, investment market and the
inter-bank markets and credit markets) or currency exchange rate or controls in
or affecting any Relevant Jurisdiction; or
UNDERWRITING
– 405 –


--- page 416 ---
(iii) any event or circumstance or series of events or circumstances in the nature of
force majeure (including, without limitation, any act of government,
declaration of a regional, national or international emergency or war, calamity,
crisis, economic sanctions, strikes, labor disputes, lock-outs, fire, explosion,
flooding, tsunami, earthquake, volcanic eruption, civil commotion, riots,
public disorder, acts of war, acts of God, epidemic, pandemic, outbreak or
escalation or mutation or aggravation of disease (including, without limitation,
COVID-19, SARS, H5N1, H1N1, H1N7, H7N9, Ebola virus, Middle East
respiratory syndrome (MERS), swine or avian influenza or such
related/mutated forms), accident or interruption or delay in transportation or
destruction of power plant, or without limiting the foregoing, any local,
national, regional or international outbreak or escalation of hostilities (whether
or not war is or has been declared), act of terrorism (whether or not
responsibility has been claimed), or other state of emergency or calamity or
crisis in whatever form) in or affecting any of the Relevant Jurisdictions; or
(iv) the imposition or declaration of (a) any moratorium, suspension or limitation
(including, without limitation, 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 Shanghai Stock Exchange, the
Shenzhen Stock Exchange, the Tokyo Stock Exchange, the Singapore Stock
Exchange, the New Y ork Stock Exchange, the American Stock Exchange, the
NASDAQ Global Market or the London Stock Exchange; or (b) any
moratorium on banking activities in or affecting any of the Relevant
Jurisdictions or any disruption in commercial banking or foreign exchange
trading or securities settlement or clearing services, procedures or matters in or
affecting any of the Relevant Jurisdictions; or
(v) a change or development involving a prospective change or amendment in or
affecting taxation or exchange control, currency exchange rates or foreign
investment regulations (including, without limitation, a devaluation of the
Hong Kong dollar, United States dollar or Renminbi 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 the Renminbi is linked to
any foreign currency or currencies), or the implementation of any exchange
control, in or affecting any of the Relevant Jurisdictions or affecting
investment in the Shares; or
(vi) the imposition of sanctions or the withdrawal of trading privileges, in whatever
form, in or affecting, any Relevant Jurisdiction; or
UNDERWRITING
– 406 –


--- page 417 ---
(vii) any adverse change, or any development or any prospective adverse change or
development, in the condition (financial or otherwise) or in the assets,
liabilities, business, general affairs, management, prospects, shareholders’
equity, profits, losses, results of operations, position or condition, financial or
otherwise, or performance of our Group as a whole; or
(viii) an order or petition is presented for the winding-up or liquidation of any
member of the Group, or any member of the Group makes any composition or
arrangement with its creditors or enters into a scheme of arrangement, or any
resolution is passed for the winding-up of any member of the Group or a
provisional liquidator, receiver or manager is appointed over all or part of the
assets or undertaking of any member of the Group or anything analogous
thereto occurs in respect of any member of the Group; or
(ix) any litigation, regulatory or disciplinary proceeding, legal action, dispute or
claim being threatened or instigated against any member of the Group, any
Director or the chief executive officer or the chief financial officer of the
Company or any of the Controlling Shareholders; or
(x) any non-compliance of this prospectus (or any other documents used in
connection with the contemplated offering, allotment, issue, subscription or
sale of any of the Offer Shares), the CSRC filings or any aspect of the Global
Offering with the Listing Rules, the CSRC rules or any other applicable laws;
or
(xi) any contravention by any member of the Group, any of the Controlling
Shareholders, the Selling Shareholder, any Director or the chief executive
officer or the chief financial officer of the Company of the Companies
Ordinance, the C(WUMP)O, the Listing Rules, the CSRC rules or other
applicable laws; or
(xii) any certificate given by the Company or any of its respective officers under or
in connection with the Hong Kong Underwriting Agreement or the Global
Offering is false or misleading in any material respect; or
(xiii) the commencement by any Governmental Authority or other regulatory or
political body or organization of any action or investigation against any
member of the Group, any of the Controlling Shareholders or any Director or
the chief executive officer or the chief financial officer of the Company or an
announcement by any Governmental Authority or regulatory or political body
or organization that it intends to take any such action or investigation; or
(xiv) a demand by any creditor for repayment or payment of any indebtedness of any
member of the Group in respect of which any member of the Group is liable
prior to its stated maturity; or
UNDERWRITING
– 407 –


--- page 418 ---
(xv) any change, development or event involving a prospective adverse change in,
or a materialization of, any of the risks set out in the section headed “Risk
Factors” in this prospectus;
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):
(1) has or will or may have a material adverse effect on the assets, liabilities,
business, operations, general affairs, management, prospects, shareholders’
equity, profits, revenues, losses, results of operations, position or condition
(financial, operational, trading or otherwise), performance or prospects of the
Company or the Group as a whole; or
(2) has or will or may have a material adverse effect on the success or
marketability of the Global Offering or the level of Offer Shares being applied
for or accepted or subscribed for or purchased under the Hong Kong Public
Offering or the level of interest under the International Offering or anticipated
dealings in the Shares in the secondary market; or
(3) makes or will or may make it inadvisable or inexpedient or impracticable or not
commercially viable to proceed with or market the Global Offering; or
(4) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or preventing the processing of applications and/or
payments pursuant to the Global Offering or pursuant to the underwriting
thereof; or
(b) there has come to the notice of any of the Joint Sponsors, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Hong Kong Underwriters or the Capital Market Intermediaries or any of them has
cause to believe that:
(i) any statement contained in any of this prospectus, any of its application proof,
the formal notice, the post hearing information pack, the Price Determination
Agreement, the receiving bank agreement, the registrar agreement and any
agreement between our Company and the HK eIPO White Form Service
Provider, the preliminary offering circular, the final offering circular and/or
any notices, announcements, advertisements, communications 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) (collectively, the “Offer Related Documents”) was, when it was
issued, or has become untrue, deceptive, incorrect, inaccurate, incomplete or
misleading; or
UNDERWRITING
– 408 –


--- page 419 ---
(ii) any estimate, forecast, expression of opinion, intention or expectation
contained in any of the Offer Related Documents was, when it was issued, or
has become unfair, dishonest or misleading or based on untrue, dishonest or
unreasonable grounds or assumptions or given in bad faith; or
(iii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a
misstatement in, or an omission from, any of the Offer Related Documents; or
(iv) any breach of, or any event or circumstance rendering untrue, misleading or
incorrect or incomplete in any respect, any of the representations, warranties,
agreements or undertakings given by the Company, the Controlling
Shareholders and the Selling Shareholder in the Hong Kong Underwriting
Agreement and/or the International Underwriting Agreement; or
(v) any event, act or omission which gives rise or is likely to give rise to any
liability of any of the indemnifying parties pursuant to the indemnities in Hong
Kong Underwriting Agreement; or
(vi) any breach of any of the obligations of any party (other than the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters or the
Capital Market Intermediaries) to the Hong Kong Underwriting Agreement or
the International Underwriting Agreement; or
(vii) any Director or member of the senior management of the Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the directorship,
supervisorship or management of a company; or
(viii) any Director, the chief executive officer or the chief financial officer of the
Company vacates, seeks to retire, or is removed from his/her office; or
(ix) the Company withdraws the Global Offering or any of the Offer Related
Documents or any other documents issued or used in connection with the
Global Offering; or
(x) the approval by the Listing Committee of the listing of, and permission to deal
in, the Shares 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; or
UNDERWRITING
– 409 –


--- page 420 ---
(xi) any prohibition applicable to the Company, the Selling Shareholder, any of the
Underwriters, and/or any of the foregoing’s respective affiliates for whatever
reason from offering, allotting, issuing or selling the Shares (including the
OAO New Shares and the OAO Sale Shares) pursuant to the terms of the
Global Offering; or
(xii) any person (other than the Joint Sponsors) has withdrawn or sought to
withdraw its consent to being named in any of the Offer Related Documents or
to the issue of any of the Offer Related Documents with the inclusion of its
reports, letters and/or legal opinions (as the case may be) or to references to its
name included in the form and context in which it respectively appears; or
(xiii) a material portion of the orders placed or confirmed in the book-building
process have been withdrawn, terminated or cancelled,
then the Joint Sponsors and the Sponsor-Overall Coordinators (for themselves and
on behalf of the Hong Kong Underwriters) may, in their sole and absolute discretion
and upon giving notice orally or through electronic means or in writing to the
Company, terminate the Hong Kong Underwriting Agreement with immediate effect.
Undertakings to the Stock Exchange Pursuant to the Listing Rules
Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange and our Company that, except (a) in compliance with the
requirements of the Listing Rules, or (b) pursuant to the Global Offering (including pursuant
to the Over-allotment Option and the Stock Borrowing Agreement), he, she or it will not and
will procure that the relevant registered holder(s) will not, either directly or indirectly:
(a) in the period commencing on the date by reference to which disclosure of his/her/its
shareholding in our Company is made in this prospectus and ending on the date
which is six months from the Listing Date, dispose of, nor enter into any agreement
to dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the securities of our Company in respect of which he, she or it is
shown by this prospectus to be the beneficial owner; or
(b) in the period of six months commencing on the date on which the period referred to
in paragraph (a) above expires, dispose of, nor enter into any agreement to dispose
of or otherwise create any options, rights, interests or encumbrances in respect of,
any of the securities referred to in paragraph (a) above if, immediately following
such disposal or upon the exercise or enforcement of such options, rights, interests
or encumbrances, he, she or it would cease to be a “controlling shareholder” (as
defined in the Listing Rules) of our Company or a member of a group of the
UNDERWRITING
– 410 –


--- page 421 ---
Controlling Shareholders of our Company or would together with the other
Controlling Shareholders cease to be “controlling shareholders” (as defined in the
Listing Rules) of our Company.
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of the Controlling
Shareholders has undertaken to the Stock Exchange and our Company that, within the period
commencing on the date by reference to which disclosure of his/her/its shareholding in our
Company is made in this prospectus and ending on the date which is 12 months from the
Listing Date, his/her/its will and will procure that the relevant registered holder(s) will:
(i) when he, she or it pledges or charges any securities of our Company beneficially
owned by he, she or it 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 the securities so pledged or charged;
and
(ii) when he, she or it receives indications, either verbal or written, from the pledgee or
chargee that any of the pledged or charged securities of our Company beneficially
owned by him/her/it will be disposed of, immediately inform our Company in
writing of such indications.
Upon being informed of matters referred to in paragraph (i) or (ii) above by any of the
Controlling Shareholders, our Company will inform the Stock Exchange and make an
announcement in accordance with the Listing Rules as soon as practicable.
Undertakings Pursuant to the Hong Kong Underwriting Agreement
Undertakings by Our Company and the Controlling Shareholders in Respect of Our Company
Pursuant to the Hong Kong Underwriting Agreement, our Company has undertaken to
each of the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries that, except for the offer and sale of the Offer Shares pursuant to the Global
Offering (including pursuant to the exercise of the Over-allotment Option) and otherwise
pursuant to the Listing Rules, our Company will not, and will procure each other member of
our Group not to, 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 unless in compliance with the requirements of the Listing Rules, at any time during the
period commencing on the date of the Hong Kong Underwriting Agreement and ending on, and
including, the date falling six months after the Listing Date (the “First Six-Month Period”):
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, mortgage, charge, pledge, assign, hypothecate, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
UNDERWRITING
–4 1 1–


--- page 422 ---
purchase any option, warrant, contract or right to allot, issue or 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, or repurchase, any legal or beneficial interest in any Shares or other
securities of our Company or any shares or other securities of such other member of
our Group, 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 securities of our Company, as applicable), or deposit any Shares or other
securities of our Company, as applicable, with a depositary in connection with the
issue of depositary receipts;
(b) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of the
Shares or any other securities of our 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);
(c) enter into any transaction with the same economic effect as any of the transactions
specified in paragraph (a) or (b) above; or
(d) offer to or agree to or announce any intention to effect any of the transactions
specified in paragraph (a), (b) or (c) above,
in each case, whether any of the transactions specified in paragraph (a), (b) or (c) above is to
be settled by delivery of Shares or such other securities, in cash or otherwise (whether or not
the issue of such Shares or other securities will be completed within the First Six-Month
Period).
During the period of six months commencing on the date on which the First Six-Month
Period expires (the “Second Six-Month Period”), in the event that our Company enters into any
of the transactions specified in paragraph (a), (b) or (c) above or offers to or agrees to or
announces any intention to effect any such transaction, our Company will inform the Joint
Sponsors and the Sponsor-Overall Coordinators in writing, and 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 in the Shares or other securities of our Company.
Each of the Controlling Shareholders has jointly and severally undertaken to each of the
Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries to procure our Company to comply with the above undertakings.
UNDERWRITING
– 412 –


--- page 423 ---
Our Company has undertaken to each of the Joint Sponsors, the Overall Coordinators, the
Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries that it will, and each of the Controlling
Shareholders has undertaken to each of the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries to procure that our Company will, comply
with the minimum public float requirements as allowed by the Stock Exchange (the “Minimum
Public Float Requirement”). Each of our Company and the Controlling Shareholders has also
undertaken to each of the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters
and the Capital Market Intermediaries that it/he/she will not, and each of the Controlling
Shareholders has further undertaken to each of the Joint Sponsors, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries to procure that our Company will not,
effect any purchase of Shares, or agree to do so, which may reduce the holdings of Shares held
by the public (as defined in Rule 8.24 of the Listing Rules) below the Minimum Public Float
Requirement prior to the expiration of the Second Six-Month Period without first having
obtained the prior written consent of the Joint Sponsors and the Sponsor-Overall Coordinators
(for themselves and on behalf of the Hong Kong Underwriters).
Undertakings by the Controlling Shareholders in Respect of Themselves
Each of the Controlling Shareholders has jointly and severally undertaken to each of our
Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital
Market Intermediaries that, 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 unless in compliance with the requirements of the Listing Rules or pursuant to the Global
Offering (including pursuant to the Over-allotment Option and the Stock Borrowing
Agreement):
(a) will not, at any time during the First Six-Month Period:
(i) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge,
hypothecate, 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 other securities of
our Company 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 any such other securities, as applicable or any interest in any of
the foregoing), or deposit any Shares or other securities of our Company with
a depositary in connection with the issue of depositary receipts;
UNDERWRITING
– 413 –


--- page 424 ---
(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 other
securities of our Company 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 any such other securities, as applicable or any
interest in any of the foregoing);
(iii) enter into any transaction with the same economic effect as any of the
transactions specified in paragraph (i) or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any of the transactions
specified in paragraph (i), (ii) or (iii) above,
in each case, whether any of the transactions specified in paragraph (i), (ii) or (iii)
above is to be settled by delivery of Shares or other securities of our Company or
in cash or otherwise (whether or not such transaction will be completed within the
First Six-Month Period);
(b) will not, during the Second Six-Month Period, enter into any of the transactions
specified in paragraph (a)(i), (ii) or (iii) above or offer to or agree to or announce
any intention to effect any such transaction if, immediately following any sale,
transfer or disposal or upon the exercise or enforcement of any option, right, interest
or encumbrance pursuant to such transaction, he, she or it together with other
Controlling Shareholders would cease to be a “controlling shareholder” (as defined
in the Listing Rules) of our Company;
(c) until the expiry of the Second Six-Month Period, in the event that he, she or it enters
into any of the transactions specified in paragraph (a)(i), (ii) or (iii) above or offers
to or agrees to or announces any intention to effect any such transaction, will take
all reasonable steps to ensure that it will not create a disorderly or false market in
the securities of our Company; and
(d) at any time within the period commencing on the date of the Hong Kong
Underwriting Agreement and ending on the date which is 12 months after the Listing
Date, shall:
(i) if and when he, she or it or the relevant registered holder(s) affiliated with he,
she or it pledges or charges any Shares or other securities of our Company
beneficially owned by him/her/it, immediately inform our Company, the Joint
Sponsors and the Sponsor-Overall Coordinators in writing of such pledge or
charge together with the number of Shares or other securities of our Company
so pledged or charged; and
UNDERWRITING
– 414 –


--- page 425 ---
(ii) if and when he, she or it or the relevant registered holder(s) affiliated with he,
she or it receives indications, either verbal or written, from the pledgee or
chargee that any of the pledged or charged Shares or other securities of our
Company will be disposed of, immediately inform our Company, the Joint
Sponsors and the Sponsor-Overall Coordinators in writing of such indications.
Our Company has undertaken that upon being informed of matters referred to in
paragraph (d)(i) or (ii) above by any of the Controlling Shareholders, our Company shall
inform the Stock Exchange and/or any other relevant authorities and make an announcement
in accordance with the Listing Rules, the SFO and/or any other applicable laws as soon as
practicable.
Undertakings by the Selling Shareholder
Under the Hong Kong Underwriting Agreement, Selling Shareholder has undertaken to
the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market
Intermediaries that, 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 unless (a) in compliance with the requirements of the Listing Rules or (b) pursuant to the
Global Offering (including pursuant to the Over-allotment Option and the Stock Borrowing
Agreement): (a) it will not, at any time during the First Six-Month Period, (i) sell, offer to sell,
contract or agree to sell, mortgage, charge, pledge, hypothecate, 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 other securities of the Company held by such Selling
Shareholder prior to the date of this Agreement 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 any such other securities, as applicable or any interest in any of the foregoing), or deposit
any Shares or other securities of the Company with a depositary in connection with the issue
of depositary receipts, or (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership (legal or beneficial) of
such Shares or securities of the Company 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 (iii)
enter into any transaction with the same economic effect as any transaction specified in
paragraph (a)(i) or (ii) above, or (iv) offer to or agree to or announce any intention to effect
any transaction specified in paragraph (a)(i), (ii) or (iii) above, in each case, whether any of
the transactions specified in paragraph (a)(i), (ii) or (iii) above is to be settled by delivery of
Shares or such other securities of the Company, in cash or otherwise (whether or not the
transactions will be completed within the First Six-Month Period), provided that nothing
therein shall restrict such Selling Shareholder during such period from (a) transferring any
securities of the Company with the prior written consent of the Joint Sponsors and the
UNDERWRITING
– 415 –


--- page 426 ---
Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters); (b) selling
any securities of the Company acquired by itself or its affiliates in the open market after the
completion of the Global Offering; or (c) transferring any securities of the Company to any
affiliate of such Selling Shareholder, on the condition that such affiliate executes and delivers
a lock-up undertaking of substantially similar terms as such lock-up restrictions hereunder to
the Joint Sponsors and the Sponsor-Overall Coordinators (for themselves and on behalf of the
Underwriters) prior to the transfer.
Hong Kong Underwriters’ Interests in Our Company
Save for their respective obligations under the Hong Kong Underwriting Agreement and,
if applicable, the Stock Borrowing Agreement, as of the Latest Practicable Date, none of the
Hong Kong Underwriters was interested, legally or beneficially, directly or indirectly, in any
Shares or any securities of any member of our Group or had any right or option (whether
legally enforceable or not) to subscribe for or purchase, or to nominate persons to subscribe for
or purchase, any Shares or any securities of any member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
respective obligations under the Hong Kong Underwriting Agreement.
International Offering
International Underwriting Agreement
In connection with the International Offering, it is expected that our Company, the Selling
Shareholder and each of the Controlling Shareholders will enter into the International
Underwriting Agreement with, among others, the Joint Global Coordinators, Joint Lead
Managers, Joint Bookrunners and the International Underwriters on or about the Price
Determination Date. Under the International Underwriting Agreement and subject to the
Over-allotment Option, the International Underwriters would, subject to certain conditions set
out therein, agree severally but not jointly to procure subscribers for, or themselves to
subscribe for, their respective applicable proportions of the International Offer Shares being
offered under 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 in the event that the International Underwriting Agreement is not entered into or is
terminated, the Global Offering will not proceed. See “Structure of the Global Offering — The
International Offering.”
UNDERWRITING
– 416 –


--- page 427 ---
Over-allotment Option
Each of our Company and the Selling Shareholder is expected to grant the Over-allotment
Option to the International Underwriters, exercisable by the Sponsor-Overall Coordinators (for
themselves and on behalf of the International Underwriters) at any time from the Listing Date
until 30 days after the last day for lodging applications under the Hong Kong Public Offering,
being Wednesday, July 23, 2025, pursuant to which our Company may be required to issue, and
the Selling Shareholder may be required to sell, up to an aggregate of 50,010,000 additional
Offer Shares, representing not more than 15% of the Offer Shares initially available under the
Global Offering, at the Offer Price to, among other things, cover over-allocations in the
International Offering, if any. See “Structure of the Global Offering — Over-allotment
Option.”
Commissions and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission of 2.5% of the aggregate Offer Price of all the Offer Shares (including any Offer
Shares to be issued or sold pursuant to the Over-allotment Option) (the “Fixed Fees”). Our
Company may, at its discretion, pay to one or more Underwriter(s) and Capital Market
Intermediary(ies) an additional discretionary fee of up to 0.5% of the aggregate Offer Price of
all the Offer Shares (including any Offer Shares to be issued or sold pursuant to the
Over-allotment Option) (the “Incentive Fees”). For the purpose of disclosure of the ratio of
Fixed Fees and Incentive Fees payable (the “Fee Split Ratio”) as required under paragraph 3B
of Appendix 1A to the Listing Rules, assuming the Incentive Fees are paid in full, the Fee Split
Ratio will be approximately 5:1.
For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering,
our Company will pay an underwriting commission at the rate applicable to the International
Offering to the relevant International Underwriters (and not the Hong Kong Underwriters).
The aggregate underwriting commissions and fees payable to the Underwriters and the
Capital Market Intermediaries, together with the Stock Exchange listing fees, the SFC
transaction levy, the AFRC transaction levy and the Stock Exchange trading fee, legal and other
professional fees and printing and other expenses payable by our Company in relation to the
Global Offering are estimated to be approximately HK$79.8 million (assuming an Offer Price
of HK$3.09 per Offer Share, (being the mid-point of the indicative Offer Price range), the full
payment of the Incentive Fees and the exercise of the Over-allotment Option in full).
Indemnity
The Company, each of the Controlling Shareholders and the Selling Shareholder have
agreed to jointly and severally indemnify the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Hong Kong Underwriters, the Capital Market Intermediaries and
each of them for certain losses which they may suffer or incur, including losses arising from
UNDERWRITING
– 417 –


--- page 428 ---
the performance of their obligations under the Hong Kong Underwriting Agreement or any
breach by any of our Company, the Controlling Shareholders and the Selling Shareholder of the
Hong Kong Underwriting Agreement, as the case may be.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the “Syndicate Members”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting or
stabilizing process.
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 the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively traded securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments of our Group
and/or persons and entities with relationships with our Group and may also include swaps and
other financial instruments entered into for hedging purposes in connection with our Group’s
loans and other debts.
In relation to the Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the Shares, entering into transactions with
those buyers and sellers in a principal capacity, including as a lender to initial purchasers of
the Shares (which financing may be secured by the Shares) in the Global Offering, proprietary
trading in the Shares, and entering into over the counter or listed derivative transactions or
listed or unlisted securities transactions (including issuing securities such as derivative
warrants listed on a stock exchange) which have as their underlying assets, assets including the
Shares. Such transactions may be carried out as bilateral agreements or trades with selected
counterparties. Those activities may require hedging activity by those entities involving,
directly or indirectly, the buying and selling of the Shares, which may have a negative impact
on the trading price of the Shares. All such activities could occur in Hong Kong 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 the Syndicate Members or their affiliates of any listed securities
having the Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the stock 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.
UNDERWRITING
– 418 –


--- page 429 ---
All such activities may occur both during and after the end of the stabilizing period
described in “Structure of the Global Offering — Stabilization.” Such activities may affect the
market price or value of the Shares, the liquidity or trading volume in the Shares and the
volatility of the price of the Shares, and the extent to which this occurs from day to day cannot
be estimated.
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members (other than the Stabilization Manager or 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
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to our Group
and its affiliates for which such Syndicate Members or their respective affiliates have received
or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
INDEPENDENCE OF THE JOINT SPONSORS
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors set
out in Rule 3A.07 of the Listing Rules.
UNDERWRITING
– 419 –


--- page 430 ---
THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. BNP Paribas Securities (Asia) Limited, CLSA Limited, CMB
International Capital Limited and DBS Asia Capital Limited are the Overall Coordinators of
the Global Offering.
The listing of the Shares on the Stock Exchange is sponsored by the Joint Sponsors. The
Joint Sponsors have made an application on behalf of our Company to the Listing Committee
of the Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to
be issued as mentioned in this prospectus.
333,400,000 Offer Shares will initially be made available (subject to the Over-allotment
Option) under the Global Offering comprising:
(a) the Hong Kong Public Offering of initially 33,340,000 Shares (subject to
reallocation) in Hong Kong as described in “— The Hong Kong Public Offering”
below; and
(b) the International Offering of initially 300,060,000 Shares (subject to reallocation
and the Over-allotment Option) outside the United States (including to professional
and institutional investors within Hong Kong) in offshore transactions in reliance on
Regulation S under the U.S. Securities Act, as described in “— The International
Offering” below.
Investors may either:
(i) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or
(ii) apply for or indicate an interest for International Offer Shares under the
International Offering,
but may not do both.
The Offer Shares will represent approximately 25.00% of the total Shares in issue
immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme). If the Over-allotment Option is exercised in full, the Offer Shares (including the
Shares to be issued or sold pursuant to the full exercise of the Over-allotment Option, and
without taking into account any Shares which may be allotted and issued upon the exercise of
any options granted under the Pre-IPO Share Option Scheme and any options which may be
granted under the Share Option Scheme) will represent approximately 28.43% of the total
Shares in issue immediately following the completion of the Capitalization Issue and the
Global Offering and the issue and sale of the Shares pursuant to the full exercise of the
Over-allotment Option.
STRUCTURE OF THE GLOBAL OFFERING
– 420 –


--- page 431 ---
References in this prospectus to applications, application monies or the procedures for
applications relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Our Company is initially offering 33,340,000 Shares (subject to reallocation) for
subscription by the public in Hong Kong at the Offer Price, representing 10% of the Offer
Shares initially available under the Global Offering. The Offer Shares initially offered under
the Hong Kong Public Offering, subject to any reallocation of Offer Shares between the Hong
Kong Public Offering and the International Offering, will represent approximately 2.50% of
the total Shares in issue immediately following the completion of the Capitalization Issue and
the Global Offering (assuming the Over-allotment Option is not exercised, and without taking
into account any Shares which may be allotted and issued upon the exercise of any options
granted under the Pre-IPO Share Option Scheme and any options which may be granted under
the Share Option Scheme).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to professional and institutional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in
shares and other securities and corporate entities that regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions set out in “—
Conditions of the Global 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
could 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.
For allocation purposes only, the total number of Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking into account any reallocation referred to below)
will be divided equally (to the nearest board lot) into two pools (with any odd lots being
allocated to pool A): pool A and pool B. The Hong Kong Offer Shares in pool A will be
allocated on an equitable basis to applicants who have applied for Hong Kong Offer Shares
with an aggregate subscription price of HK$5 million (excluding brokerage, SFC transaction
levy, AFRC transaction levy and the Stock Exchange trading fee payable) or less. The Hong
Kong Offer Shares in pool B will be allocated on an equitable basis to applicants who have
applied for Hong Kong Offer Shares with an aggregate subscription price of more than HK$5
million (excluding brokerage, SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee payable) and up to the total value in pool B.
STRUCTURE OF THE GLOBAL OFFERING
– 421 –


--- page 432 ---
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose
of the immediately preceding paragraph only, the “price” for Hong Kong Offer Shares means
the price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either
pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 16,670,000 Hong Kong
Offer Shares (being 50% of the 33,340,000 Hong Kong Offer Shares initially available under
the Hong Kong Public Offering) is liable to be rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocation under the Listing Rules. Paragraph 4.2 of
Practice Note 18 to 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 reached as further
described below:
 33,340,000 Offer Shares are initially available under 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 over-subscribed:
 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 Offer
Shares initially available 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 100,020,000 Offer Shares, representing 30% of the Offer
Shares initially available under the Global Offering;
 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 Offer
Shares initially available 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 133,360,000 Offer Shares, representing 40% of the Offer
Shares initially available under the Global Offering; and
STRUCTURE OF THE GLOBAL OFFERING
– 422 –


--- page 433 ---
 if the number of Offer Shares validly applied for under the Hong Kong Public
Offering represents 100 times or more the number of Offer Shares initially available
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 166,700,000
Offer Shares, representing 50% of the Offer Shares initially available under the
Global Offering.
The Offer Shares to be offered under the Hong Kong Public Offering and the International
Offering may also, 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). Subject to the following paragraph, the Sponsor-Overall Coordinators may at
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 Offer Shares are not fully subscribed, the Sponsor-Overall Coordinators (for
themselves and on behalf of the Underwriters) 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 deem appropriate.
In the event that (i) the International Offer Shares are not fully subscribed and the Hong
Kong Offer Shares are fully subscribed or over-subscribed irrespective of the number of times;
or (ii) the International Offer Shares are fully subscribed or over-subscribed and the Hong
Kong Offer Shares are fully subscribed or over-subscribed with the number of Offer Shares
validly applied for under the Hong Kong Public Offering representing less than 15 times the
number of Offer Shares initially available under the Hong Kong Public Offering, the
Sponsor-Overall Coordinators have the authority to reallocate International Offer Shares
originally included in the International Offering to the Hong Kong Public Offering in such
number as they deem appropriate, provided that the total number of Offer Shares available
under the Hong Kong Public Offering following such reallocation shall not exceed 66,680,000
Offer Shares, representing twice of the Offer Shares initially available under the Hong Kong
Public Offering, and the Offer Price shall be fixed at the low-end of the indicative Offer Price
range (i.e., HK$2.80 per Offer Share) stated in this prospectus.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering,
which is expected to be published on Wednesday, June 25, 2025.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him/her/it that he/she/it and any
person(s) for whose benefit he/she/it is making the application has not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
International Offer Shares under the International Offering. Such applicant’s application is
liable to be rejected if such undertaking and/or confirmation is/are breached and/or untrue (as
the case may be) or if he/she/it has been or will be placed or allocated International Offer
Shares under the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 423 –


--- page 434 ---
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$3.38 per Offer Share plus
brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and
the Stock Exchange trading fee of 0.00565%, amounting to a total of HK$3,414.09 for one
board lot of 1,000 Shares. If the Offer Price, as finally determined in the manner described in
“— Pricing and Allocation” below, is less than the maximum Offer Price of HK$3.38 per Offer
Share, appropriate refund payments (including brokerage, SFC transaction levy, AFRC
transaction levy and the Stock Exchange trading fee attributable to the surplus application
monies) will be made to the relevant successful applicants (subject to application channels),
without interest. Further details are set out in “How to Apply for Hong Kong Offer Shares.”
THE INTERNATIONAL OFFERING
Number of Offer Shares Initially Offered
Subject to reallocation of the Offer Shares between the International Offering and the
Hong Kong Public Offering as described above, the International Offering will consist of an
offering of initially 300,060,000 Offer Shares, representing 90% of the Offer Shares initially
available under the Global Offering, (assuming that the Over-allotment Option is not
exercised). The Offer Shares initially offered under the International Offering, subject to any
reallocation of Offer Shares between the Hong Kong Public Offering and the International
Offering, will represent approximately 22.50% of the total Shares in issue immediately
following the completion of the Capitalization Issue and the Global Offering (assuming the
Over-allotment Option is not exercised, and without taking into account any Shares which may
be allotted and issued upon the exercise of any options granted under the Pre-IPO Share Option
Scheme and any options which may be granted under the Share Option Scheme).
Allocation
The International Offering will include selective marketing of Offer Shares to
professional and institutional investors and other investors anticipated to have a sizeable
demand for such Offer Shares in Hong Kong and other jurisdictions outside the United States
in reliance on Regulation S. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and
other securities and corporate entities that regularly invest in shares and other securities.
Allocation of Offer Shares pursuant to the International Offering will be effected in accordance
with the “book-building” process described in “— Pricing and Allocation” below and based on
a number of factors, including the level and timing of demand, the total size of the relevant
investor’s invested assets or equity assets in the relevant sector and whether or not it is
expected that the relevant investor is likely to buy further Offer Shares and/or hold or sell its
Offer Shares after the Listing. 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 Group and the Shareholders as a whole.
STRUCTURE OF THE GLOBAL OFFERING
– 424 –


--- page 435 ---
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
applications under the Hong Kong Public Offering and to ensure that they are excluded from
any allocation of Offer Shares under the Hong Kong Public Offering.
Reallocation
The total number of Offer Shares in issue and to be issued or sold pursuant to the
International Offering may change as a result of reallocation as described in “— The Hong
Kong Public Offering — Reallocation” above and/or the exercise of the Over-allotment Option
in whole or in part.
OVER-ALLOTMENT OPTION
In connection with the Global Offering, each of our Company and the Selling Shareholder
is expected to grant the Over-allotment Option to the International Underwriters, exercisable
by the Sponsor-Overall Coordinators (for themselves and on behalf of the International
Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Sponsor-Overall Coordinators (for themselves and on behalf of the
International Underwriters) at any time from the Listing Date until 30 days after the last day
for lodging applications under the Hong Kong Public Offering, being Wednesday, July 23,
2025, to require our Company to issue up to 15,350,000 OAO New Shares and the Selling
Shareholder to sell up to 34,660,000 OAO Sale Shares, representing an aggregate of
50,010,000 additional Offer Shares and not more than 15% of the Offer Shares initially
available under 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 to be issued
or sold pursuant thereto will represent approximately 3.71% of the total Shares in issue
immediately following the completion of the Capitalization Issue and the Global Offering and
the full exercise of the Over-allotment Option. If the Over-allotment Option is exercised, an
announcement will be made.
We estimate that the Selling Shareholder will receive net proceeds of approximately
HK$104.4 million (in the event that the Over-allotment Option is exercised in full) from the
sale of the OAO Sales Shares after deduction of proportional underwriting commissions and
fees (assuming full payment of the incentive fee), based on the Offer Price of HK$3.09 per
Share (which represents the mid-point of the indicative Offer Price range). We will not receive
any of the proceeds from the OAO Sale Shares to be sold by the Selling Shareholder.
STRUCTURE OF THE GLOBAL OFFERING
– 425 –


--- page 436 ---
STOCK BORROWING AGREEMENT
In order to facilitate the settlement of over-allocations, if any, in connection with the
Global Offering, the Stabilization Manager (or its affiliates or any person acting for it) may
choose to borrow up to 50,010,000 Shares (being the maximum number of Shares which may
be issued or sold pursuant to the exercise of the Over-allotment Option and representing
approximately 15% of the number of Offer Shares initially available under the Global Offering)
from Eternal International, pursuant to the Stock Borrowing Agreement, which is expected to
be entered into between the Stabilization Manager (or its affiliates or any person acting for it)
and Eternal International on or around the Price Determination Date. If the Stock Borrowing
Agreement is entered into, the borrowing of Shares will only be effected by the Stabilization
Manager (or its affiliates or any person acting for it) for the settlement of over-allocations in
the International Offering and such borrowing arrangement will not be 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 are complied with.
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. The same number of Shares so borrowed must be returned to Eternal International
within 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 in full and
all relevant Shares have been issued and allotted by the Company. The stock borrowing
arrangement described above will be effected in compliance with all applicable laws, rules and
regulatory requirements. No payment will be made to Eternal International by the Stabilization
Manager (or its affiliates or any person acting for it) in relation to such stock 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
a decline in the initial public market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
offer price.
STRUCTURE OF THE GLOBAL OFFERING
– 426 –


--- page 437 ---
In connection with the Global Offering, the Stabilization Manager (or its affiliates or any
person acting for it), on behalf of the Underwriters, may over-allocate or effect transactions
with a view to stabilizing or supporting the market price of the Shares at a level higher than
that which might otherwise prevail for a limited period after the Listing Date. However, there
is no obligation on the Stabilization Manager (or its affiliates or any person acting for it) to
conduct any such stabilizing action. Such stabilizing action, if taken, (a) will be conducted at
the absolute discretion of the Stabilization Manager (or its affiliates or any person acting for
it) and in what the Stabilization Manager reasonably regards as the best interest of our
Company, (b) may be discontinued at any time and (c) is required to be brought to an end
within 30 days after the last day for lodging applications under the Hong Kong Public Offering.
Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes (a) over-allocating for the purpose of preventing or
minimizing any reduction in the market price of the Shares, (b) selling or agreeing to sell the
Shares so as to establish a short position in them for the purpose of preventing or minimizing
any reduction in the market price of the Shares, (c) purchasing or subscribing for or agreeing
to purchase or subscribe for the Shares pursuant to the Over-allotment Option in order to close
out any position established under paragraph (a) or (b) above, (d) purchasing or agreeing to
purchase any of the Shares for the sole purpose of preventing or minimizing any reduction in
the market price of the Shares, (e) selling or agreeing to sell any Shares in order to liquidate
any position established as a result of those purchases and (f) offering or attempting to do
anything as described in paragraph (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
(a) the Stabilization Manager (or its affiliates or any person acting for it) may, in
connection with the stabilizing action, maintain a long position in the Shares;
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilization Manager (or its affiliates or any person acting for it) will maintain such
a long position;
(c) liquidation of any such long position by the Stabilization Manager (or its affiliates
or any person acting for it) and selling in the open market may have an adverse
impact on the market price of the Shares;
(d) no stabilizing action can be taken to support the price of the Shares for longer than
the stabilization period, which will begin on the Listing Date and is expected to
expire on Wednesday, July 23, 2025, being the 30th day after the last day for lodging
applications under the Hong Kong Public Offering. After this date, when no further
stabilizing action may be taken, demand for the Shares, and therefore the price of
the Shares, could fall;
(e) the price of the Shares cannot be assured to stay at or above the Offer Price by the
taking of any stabilizing action; and
STRUCTURE OF THE GLOBAL OFFERING
– 427 –


--- page 438 ---
(f) stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
Over-allocation
Following any over-allocation of the Shares in connection with the Global Offering, the
Stabilization Manager (or its affiliates or any person acting for it) may cover such
over-allocations by exercising the Over-allotment Option in full or in part, by using Shares
purchased by the Stabilization Manager (or its affiliates or any person acting for it) in the
secondary market at prices that do not exceed the Offer Price, or by a combination of these
methods.
PRICING AND ALLOCATION
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determination Date, which is expected to be on or about
Tuesday, June 24, 2025, by agreement between the Sponsor-Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company (for ourselves and on behalf
of the Selling Shareholder), and the number of Offer Shares to be allocated under the various
offerings will be determined shortly thereafter.
The Offer Price will not be more than HK$3.38 per Offer Share and is expected to be not
less than HK$2.80 per Offer Share, unless otherwise announced by our Company no later than
the morning of the last day for lodging applications under the Hong Kong Public Offering, as
further explained below.
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 about, the last day for lodging applications under the Hong Kong Public Offering.
The Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters)
may, where they deem appropriate, based on the level of interest expressed by prospective
investors during the book-building process, and with the consent of our Company (for
ourselves and on behalf of the Selling Shareholder), reduce the number of Offer Shares and/or
the indicative Offer Price range below that 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. In
such case, our Company (for ourselves and on behalf of the Selling Shareholder) will, as soon
STRUCTURE OF THE GLOBAL OFFERING
– 428 –


--- page 439 ---
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 to be published on the website of the Stock Exchange at www.hkexnews.hk and our
website at www.eternal.hk notices of the reduction in the number of Offer Shares and/or the
indicative Offer Price range, the cancellation of the Global Offering and the relaunch of the
offering at the revised number of Offer Shares and/or indicative Offer Price range. Our
Company (for ourselves and on behalf of the Selling Shareholder) will also, as soon as
practicable following the decision to make such reduction, issue a supplemental or new
prospectus updating investors of the reduction in the number of Offer Shares and/or the
indicative Offer Price range, and giving investors at least three business days to consider the
new information. The supplemental or new prospectus shall include at least the following:
updated (a) indicative Offer Price range and market capitalization; (b) listing timetable and
underwriting obligations; (c) price/earnings multiple (if applicable), unaudited pro forma and
adjusted net tangible assets; and (d) use of proceeds and working capital adequacy
confirmation based on revised estimated proceeds. In the event of a reduction in the number
of Offer Shares, the Sponsor-Overall Coordinators may also at their discretion reallocate the
number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering, provided that the number of Offer Shares offered under the Hong Kong
Public Offering shall not be less than 10% of the Offer Shares available under the Global
Offering (without taking into account any additional Offer Shares that may be issued pursuant
to the Over-allotment Option). In the absence of any such supplemental or new prospectus so
published, the number of Offer Shares will not be reduced and the Offer Price, if agreed upon
by the Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) and
our Company (for ourselves and on behalf of the Selling Shareholder), will under no
circumstances be set outside the indicative Offer Price range as stated in this prospectus.
If there is any change to the offer size due to change in the number of Offer Shares
initially offered under the Global Offering (other than pursuant to the exercise of the
Over-allotment Option and/or the reallocation mechanism as disclosed in this prospectus), or
if the Offer Price falls outside the indicative Offer Price range as stated in this prospectus, or
if our Company becomes aware that there has been a significant change affecting any matter
contained in this prospectus or a significant new matter has arisen, the inclusion of information
in respect of which would have been required to be in this prospectus if it had arisen before
this prospectus was issued, after the issue of this prospectus and before the commencement of
dealings in our Shares as prescribed under Rule 11.13 of the Listing Rules, we are required to
cancel the Global Offering and relaunch the offering on FINI and issue a supplemental or new
prospectus.
The final Offer Price, the level of applications in the Hong Kong Public Offering, the
level of indications of interest in the International Offering and the basis of allocation of the
Hong Kong Offer Shares are expected to be announced on Wednesday, June 25, 2025 on the
website of the Stock Exchange at www.hkexnews.hk and our website at www.eternal.hk .
STRUCTURE OF THE GLOBAL OFFERING
– 429 –


--- page 440 ---
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement. Our Company, the
Selling Shareholder, and each of the Controlling Shareholders expect to enter into the
International Underwriting Agreement relating to the International Offering on or about the
Price Determination Date. These underwriting arrangements, including the Underwriting
Agreements, are summarized in “Underwriting.”
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Listing Committee granting approval for the listing of, and permission to deal in,
the Shares in issue and to be issued pursuant to the Global Offering (including any
additional Shares that may be issued pursuant to the exercise of the Over-allotment
Option) on the Main Board of the Stock Exchange, and such approval and
permission not subsequently having been withdrawn or revoked prior to the
commencement of dealings in the Shares on the Stock Exchange;
(b) the Offer Price having been agreed between the Sponsor-Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company (for ourselves and
on behalf of the Selling Shareholder);
(c) the execution and delivery of the International Underwriting Agreement on or about
the Price Determination Date; and
(d) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such conditions are validly waived on or before such
dates and times) and, in any event, not later than the date which is 30 days after the date of
this prospectus.
If, for any reason, the Offer Price is not agreed between the Sponsor-Overall Coordinators
(for themselves and on behalf of the Underwriters) and our Company (for ourselves and on
behalf of the Selling Shareholder) by 12:00 noon on Tuesday, June 24, 2025, the Global
Offering will not proceed and will lapse.
STRUCTURE OF THE GLOBAL OFFERING
– 430 –


--- page 441 ---
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 dates and times 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 on the website of the Stock
Exchange at www.hkexnews.hk and our website at www.eternal.hk on the next day following
such lapse. In such a situation, all application monies will be returned, without interest, on the
terms set out in “How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of Share
Certificates and Refund of Application Monies.” In the meantime, all application monies will
be held in separate bank account(s) with the receiving bank or other bank(s) in Hong Kong
licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).
The Share certificates for the Offer Shares will only become valid evidence of title at 8:00
a.m. on the Listing Date, which is expected to be Thursday, June 26, 2025 (Hong Kong time),
provided that the Global Offering has become unconditional in all respects and the right of
termination described in “Underwriting — Underwriting Arrangements and Expenses — Hong
Kong Public Offering — Grounds for Termination” has not been exercised. Investors who trade
Shares prior to the receipt of Share certificates or prior to the Share certificates becoming valid
evidence of title do so entirely at their own risk.
DEALINGS IN THE SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Thursday, June 26, 2025, it is expected that dealings in the Shares on
the Stock Exchange will commence at 9:00 a.m. on Thursday, June 26, 2025.
The Shares will be traded in board lots of 1,000 Shares each and the stock code of the
Shares will be 6883.
STRUCTURE OF THE GLOBAL OFFERING
– 431 –


--- page 442 ---
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 “HKEXnews > New Listings > New Listing Information” and
our website at www.eternal.hk .
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong 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:
 are 18 years of age or older;
 have a Hong Kong address (for the HK eIPO White Form service only) ; and
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act).
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:
 are an existing Shareholder or a Director;
 are a close associate of any of the above;
 are a core connected person (as defined in the Listing Rules) of the Company or will
become a core connected person of the Company immediately following the
completion of the Capitalization Issue and the Global Offering; or
 have been allocated or have applied for any International Offer Shares or otherwise
participated in the International Offering.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 432 –


--- page 443 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Wednesday, June
18, 2025 and end at 12:00 noon on Monday, June 23, 2025 (Hong Kong time).
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 /H1118/H1118/H1118/H1118
www.hkeipo.hk Applicants 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
Wednesday, June 18,
2025 to 11:30 a.m. on
Monday, June 23,
2025 (Hong Kong
time).
The latest time for
completing full
payment of
application monies
will be 12:00 noon on
Monday, June 23,
2025 (Hong Kong
time).
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
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
instructions.
Applicants 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 for applications to apply for Hong Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 433 –


--- page 444 ---
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instruction 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
application instructions are given, you shall be deemed to have declared that only one set of
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 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 application 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 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 instruction 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 HONG KONG OFFER SHARES
– 434 –


--- page 445 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint 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. Hong Kong identity card
(“HKID”); or
ii. National identification document;
or
iii. Passport
 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. Legal Entity Identifier (“LEI”)
registration document; or
ii. Certificate of incorporation; or
iii. Business registration certificate;
or
iv. Other equivalent document
 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 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. 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 English and Chinese names, both English and Chinese names must
be used. Otherwise, either English or Chinese name 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 for Hong Kong Offer Shares. 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.
(4) The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 435 –


--- page 446 ---
(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 of
the joint beneficial owners. If you do not include this information, the application will be treated as being made
for your benefit.
(6) If an application is made by 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, the Sponsor-Overall Coordinators may accept it at their discretion and on
any conditions they think fit, including evidence of the attorney’s authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 1,000 Shares
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 maximum Offer Price is HK$3.38 per Offer Share, plus
brokerage of 1.0%, SFC transaction levy of 0.0027%, AFRC
transaction levy of 0.00015% and the Stock Exchange trading fee of
0.00565%.
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 Hong Kong Offer Shares you have selected. Y ou must pay the
respective maximum amount payable on application in full upon
application for Hong Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 436 –


--- page 447 ---
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.
By instructing your broker or custodian to apply for 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 final Offer Price, brokerage,
SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee by debiting the relevant nominee bank account
at the designated bank for your broker or custodian.
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
1,000 3,414.09 20,000 68,281.75 100,000 341,408.74 3,000,000 10,242,261.90
2,000 6,828.17 25,000 85,352.18 200,000 682,817.45 4,000,000 13,656,349.20
3,000 10,242.26 30,000 102,422.62 300,000 1,024,226.19 5,000,000 17,070,436.50
4,000 13,656.35 35,000 119,493.05 400,000 1,365,634.92 6,000,000 20,484,523.80
5,000 17,070.44 40,000 136,563.49 500,000 1,707,043.66 7,000,000 23,898,611.10
6,000 20,484.53 45,000 153,633.93 600,000 2,048,452.38 8,000,000 27,312,698.40
7,000 23,898.62 50,000 170,704.36 700,000 2,389,861.11 9,000,000 30,726,785.70
8,000 27,312.70 60,000 204,845.24 800,000 2,731,269.85 10,000,000 34,140,873.00
9,000 30,726.79 70,000 238,986.11 900,000 3,072,678.56 12,000,000 40,969,047.60
10,000 34,140.87 80,000 273,126.99 1,000,000 3,414,087.30 14,000,000 47,797,222.20
15,000 51,211.31 90,000 307,267.86 2,000,000 6,828,174.60 16,670,000
(1) 56,912,835.29
Notes:
(1) The maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee. If your application is successful, the 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
AFRC transaction levy and the Stock Exchange trading fee will be paid to the Stock Exchange (in the case of
the SFC transaction levy and the AFRC transaction levy, collected by the Stock Exchange on behalf of the SFC
and the AFRC, respectively).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 437 –


--- page 448 ---
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 “— A. Application for Hong Kong Offer Shares — 3.
Information Required to Apply” above. If you are suspected of submitting or causing to be
submitted more than one application, all of your applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii) the
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 the HKSCC
EIPO channel, you or the person(s) for whose benefit you have made the application shall not
apply for any International Offer Shares.
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.
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
the 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 authorize us and/or the
Sponsor-Overall Coordinators (or their agents or nominees), 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 understood 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 438 –


--- page 449 ---
(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 the Hong Kong Public Offering 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 we, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead
Managers, the Capital Market Intermediaries, the Underwriters, our and their
respective directors, officers, employees, partners, agents, advisors and other parties
involved in the Global Offering (the “ Relevant Persons ”), the Hong Kong Share
Registrar, the HK eIPO White Form Service Provider and HKSCC will not be
liable for any information and representations not in this prospectus and any
supplement to it;
(vii) undertake and confirm that you or the person(s) for whose benefit you have made
the application have not applied for or taken up, or indicated an interest in, and will
not apply for or take up, or indicate an interest in, any International Offer Shares nor
participated in the International Offering;
(viii) 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;
(ix) 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 439 –


--- page 450 ---
(x) 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;
(xi) confirm that you are aware of the situations specified in the paragraph headed “— C.
Circumstances In Which Y ou Will Not Be Allocated Hong Kong Offer Shares” in
this section;
(xii) 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;
(xiii) agree and warrant that you have complied with the Companies Ordinance, the
Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Cayman
Companies Act, Articles of Association and laws of any place outside Hong Kong
that apply to your application and that neither we nor the Relevant Persons will
breach any law inside and/or outside Hong Kong as a result of the acceptance of
your offer to purchase, or any action arising from your rights and obligations under
the terms and conditions contained in this prospectus;
(xiv) represent, warrant and undertake that (a) you understand that the Hong Kong Offer
Shares have not been and will not be registered under the U.S. Securities Act; and
(b) you and the person(s) for whose benefit you have made the application are
outside the United States (as defined in Regulation S) or are a person described in
paragraph (h)(3) of Rule 902 of Regulation S;
(xv) 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 Offer Shares registered in your name or otherwise held by you;
(xvi) warrant that the information you have provided is true and accurate;
(xvii) 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 440 –


--- page 451 ---
(xviii) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xix) authorize us to place your name(s) or the name of HKSCC Nominees on our register
of members as the holder(s) of any Hong Kong Offer Shares allocated to you and
such other registers as may be required under Articles of Association, and us and/or
our agents to send any Share certificate(s) and/or any HK eIPO White Form e-Auto
Refund payment instructions and/or any refund check(s) to you or the first-named
applicant for joint application to the address specified in your application
instructions by ordinary post at your own risk, unless you are eligible to collect the
Share certificate(s) and/or refund check(s) in person;
(xx) 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;
(xxi) (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 application instructions to
HKSCC directly or indirectly or through the HK eIPO White Form service or by
you or by anyone as your agent or by any other person; and
(xxii) (if you are making the application as an agent for the benefit of another person)
warrant that (a) 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 application instructions to HKSCC or through the HK
eIPO White Form Service Provider and (b) you have due authority to give
application instructions on behalf of that other person as its agent.
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 /H1118/H1118from the “Allotment Results” page
at www.tricor.com.hk/ipo/result
or www.hkeipo.hk/IPOResult
with a “search by ID” function.
24 hours, from 11:00 p.m. on
Wednesday, June 25, 2025 to
12:00 midnight on Tuesday, July
1, 2025 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 441 –


--- page 452 ---
Platform Date/Time
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 .
The Stock Exchange’s website at
www.hkexnews.hk and our
website at www.eternal.hk ,
which will provide links to the
above-mentioned websites of the
Hong Kong Share Registrar.
By 11:00 p.m. on Wednesday, June
25, 2025 (Hong Kong time).
Telephone /H1118+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 Thursday, June 26, 2025 to
Wednesday, July 2, 2025 (Hong
Kong 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 Tuesday, June 24, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Tuesday, June 24, 2025 (Hong Kong 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 final 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 allocations of the Hong Kong Offer Shares on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.eternal.hk by no later than 11:00 p.m. on
Wednesday, June 25, 2025 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 442 –


--- page 453 ---
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:
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.
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
“— A. Application for Hong Kong Offer Shares — 5. Multiple Applications
Prohibited” above 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; or
 the Company or the Sponsor-Overall Coordinators believe that by accepting your
application, it or they would violate applicable securities or other laws, rules or
regulations.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 443 –


--- page 454 ---
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 International 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. DISPATCH/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).
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
The Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing
Date, which is expected to be Thursday, June 26, 2025 (Hong Kong time), provided that the
Global Offering has become unconditional in all respects and the right of termination described
in “Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering
— Grounds for Termination” has not been exercised. Investors who trade Shares prior to the
receipt of Share certificates or prior to the Share certificates becoming valid evidence of title
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.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 444 –


--- page 455 ---
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Dispatch/collection of Share certificate
For application of
1,000,000 Hong Kong
Offer Shares or more /H1118
Collection in person from
the Hong Kong Share
Registrar, Tricor Investor
Services Limited, at 17/F
Far East Finance Centre,
16 Harcourt Road, Hong
Kong.
Time: from 9:00 a.m. to
1:00 p.m. on Thursday,
June 26, 2025 (Hong
Kong time).
If you are an individual,
you must not authorize
any other person to
collect for you. If you
are a corporate applicant,
your authorized
representative must bear
a letter of authorization
from your corporation
stamped with your
corporation’s chop.
Both individuals and
authorized
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.
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 HONG KONG OFFER SHARES
– 445 –


--- page 456 ---
HK eIPO White Form service HKSCC EIPO channel
For application of less
than 1,000,000 Hong
Kong Offer Shares /H1118/H1118/H1118
Y our Share certificate(s)
will be sent to the
address specified in your
application instructions
by ordinary post at your
own risk.
Date: Wednesday, June
25, 2025
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Thursday, June 26, 2025 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/H1118/H1118Hong Kong Share Registrar Y our broker or custodian
Application monies paid
through single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
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 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund check(s) will be
dispatched to the address
specified in your
application instructions
by ordinary post at your
own risk.
Except in the event of any Severe Weather Signals (as defined below) in force in Hong
Kong on Wednesday, June 25, 2025 rendering it impossible for the relevant Share certificates
to be dispatched 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. Severe Weather Arrangements” in this section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 446 –


--- page 457 ---
E. SEVERE WEATHER ARRANGEMENTS
The application lists will not open or close on Monday, June 23, 2025 if there is/are:
 a tropical cyclone warning signal number 8 or above;
 a “black” rainstorm warning signal; and/or
 Extreme Conditions;
(collectively, “ Severe Weather Signals ”), in force in Hong Kong at any time between 9:00
a.m. and 12:00 noon on Monday, June 23, 2025 (Hong Kong time).
Instead they will open at 11:45 a.m. and/or close at 12:00 noon on the next business day
which does not have Severe Weather Signals in force in Hong Kong at any time between 9:00
a.m. and 12:00 noon (Hong Kong time).
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 “Expected Timetable,” an announcement will be made and published on the
website of the Stock Exchange at www.hkexnews.hk and our website at www.eternal.hk of
the revised timetable.
If a Severe Weather Signal is hoisted on Wednesday, June 25, 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 Thursday,
June 26, 2025.
If a Severe Weather Signal is hoisted on Wednesday, June 25, 2025, for application of less
than 1,000,000 Offer Shares, the despatch of physical Share certificates will be made by
ordinary post when the post office re-opens after the Severe Weather Signal is lowered or
cancelled (e.g. in the afternoon of Wednesday, June 25, 2025 or on Thursday, June 26, 2025).
If a Severe Weather Signal is hoisted on Thursday, June 26, 2025, for application of
1,000,000 Offer Shares or more, the physical Share certificates will be available for collection
in person at the Hong Kong Share Registrar’s office after the Severe Weather Signal is lowered
or cancelled (e.g. in the afternoon of Thursday, June 26, 2025 or on Friday, June 27, 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 HONG KONG OFFER SHARES
– 447 –


--- page 458 ---
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 on the Stock
Exchange 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 advisors for details of
those settlement arrangements 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 bank and the
Relevant Persons about you in the same way as it applies to personal data about applicants
other than HKSCC Nominees. Such 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 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 Y our 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 HONG KONG OFFER SHARES
– 448 –


--- page 459 ---
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 dispatch 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 check 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 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 Company’s register of members;
 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
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 449 –


--- page 460 ---
 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 for and holders of the Shares and/or regulators and/or any other purposes
to which applicants for and holders of the Shares may from time to time agree.
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) the
personal data to, from or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving bank 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 operations;
 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
purposes 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 for 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).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 450 –


--- page 461 ---
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, at the
Company’s registered address disclosed in “Corporate Information” 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 HONG KONG OFFER SHARES
– 451 –


--- page 462 ---
The following is the text of a report set out on pages I-1 to I-3 received from the
Company’ s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants,
Hong Kong, for the purpose of incorporation in this prospectus. It is prepared and addressed
to the directors of the Company and to the Joint Sponsors pursuant to the requirements of Hong
Kong Standard on Investment Circular Reporting Engagements 200 Accountant’ s Reports on
Historical Financial Information in Investment Circulars as issued by the Hong Kong Institute
of Certified Public Accountants.
ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF ETERNAL BEAUTY HOLDINGS LIMITED AND BNP PARIBAS
SECURITIES (ASIA) LIMITED AND CITIC SECURITIES (HONG KONG) LIMITED
Introduction
We report on the historical financial information of Eternal Beauty Holdings Limited (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-66, which
comprises the consolidated statements of financial position as at 31 March 2023, 2024 and
2025, the Company’s statement of financial position as at 31 March 2024 and 2025, and the
consolidated statements of comprehensive income, the consolidated statements of changes in
equity and the consolidated statements of cash flows for each of the years ended 31 March
2023, 2024 and 2025 (the “Track Record Period”) 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-66 forms an integral part of this
report, which has been prepared for inclusion in the prospectus of the Company dated 18 June
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 Historical Financial
Information that gives a true and fair view in accordance with the basis of presentation and
preparation set out in Notes 1.3 and 2 to the Historical Financial Information, and for such
internal control as the directors determine is necessary to enable the preparation of Historical
Financial Information that is free from material misstatement, whether due to fraud or error.
Reporting accountant’s 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, Accountant’s Reports on Historical Financial
Information in Investment Circulars as issued by the Hong Kong Institute of Certified Public
APPENDIX I ACCOUNTANT’S REPORT
– I-1 –


--- page 463 ---
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.
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 accountant’s 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 accountant considers internal control relevant to the entity’s
preparation of Historical Financial Information that gives a true and fair view in accordance
with the basis of presentation and preparation set out in Notes 1.3 and 2 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 purposes of the
accountant’s report, a true and fair view of the financial position of the Company as at 31
March 2024 and 2025 and the consolidated financial position of the Group as at 31 March
2023, 2024 and 2025 and of its consolidated financial performance and its consolidated cash
flows for the Track Record Period in accordance with the basis of presentation and preparation
set out in Notes 1.3 and 2 to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) 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 14 to the Historical Financial Information which states that no dividends
have been paid by Eternal Beauty Holdings Limited in the Track Record Period.
APPENDIX I ACCOUNTANT’S REPORT
– I-2 –


--- page 464 ---
No statutory financial statements for the Company
No statutory financial statements have been prepared for the Company since its date of
incorporation.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 18 June 2025
APPENDIX I ACCOUNTANT’S REPORT
– I-3 –


--- page 465 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountant’s report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited by PricewaterhouseCoopers in
accordance with Hong Kong Standards on Auditing as issued by the HKICPA (“Underlying
Financial Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANT’S REPORT
– I-4 –


--- page 466 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 March
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 1,699,144 1,863,761 2,083,363
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (843,153) (925,570) (1,035,246)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118855,991 938,191 1,048,117
Selling and marketing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (457,520) (514,569) (592,943)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (169,954) (202,670) (207,831)
(Provision for)/reversal of impairment of
financial assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(622) (474) 605
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 12,057 12,346 6,868
Other (losses)/gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188 (16,818) (1,272) 13,402
Operating profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223,134 231,552 268,218--------- --------- ---------
Finance income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 6,468 8,063 1,692
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 (2,667) (4,034) (6,225)
Finance income/(costs), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,801 4,029 (4,533)
16
--------- --------- ---------
Share of loss of a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,964) (2,989)--------- --------- ---------
Profit before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,935 232,617 260,696
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 (53,829) (26,144) (33,667)
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,106 206,473 227,029--------- --------- ---------
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss:
Exchange differences on translation of
foreign operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,148 17,333 5,416
Total comprehensive income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,254 223,806 232,445
Earnings per share attributable to
owners of the Company
Basic and diluted (expressed in RMB’000
per share) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 86,553 103,237 113,515
APPENDIX I ACCOUNTANT’S REPORT
– I-5 –


--- page 467 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 March
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Assets
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 16,139 19,561 17,196
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 3,988 3,685 8,761
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(a) 66,318 81,930 72,221
Investment in a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 – 2,855 7,105
Amounts due from related companies /H1118/H1118/H1118/H111833(f) 55,000 – –
Deposits, prepayments and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(b) 38,515 10,424 9,399
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 12,025 17,142 25,189
191,985 135,597 139,871--------- --------- ---------
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 357,578 390,309 434,059
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(a) 156,959 175,279 250,399
Deposits, prepayments and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(b) 52,670 113,861 83,617
Amounts due from related companies /H1118/H1118/H1118/H111833(f) 984 51,155 43,006
Amount due from a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H111816 – 13,514 4,161
Amount due from a shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833(e) 110 271 –
Financial asset at fair value through profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.3 463 – –
Fixed deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 13,388 – –
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 320,462 150,929 255,998
902,614 895,318 1,071,240--------- --------- ---------
Assets classified as held for sale /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – 2,481 –
902,614 897,799 1,071,240---------
--------- ---------
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094,599 1,033,396 1,211,111
Equity and liabilities
Equity
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 –**
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,398 458,545 690,990
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,398 458,545 690,990---------
--------- ---------
* The amounts as at 31 March 2024 and 2025 are below RMB1,000.
APPENDIX I ACCOUNTANT’S REPORT
– I-6 –


--- page 468 ---
As at 31 March
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Liabilities
Non-current liabilities
Provision for long service payment /H1118/H1118/H1118/H1118/H1118/H111829 780 1,658 2,127
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) 24,769 33,074 20,416
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,549 34,732 22,543--------- --------- ---------
Current liabilities
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 113,498 93,223 119,505
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 23,015 16,307 13,353
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 177,448 168,737 118,741
Provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 8,718 9,836 10,144
Income tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,103 5,500 27,236
Amounts due to related companies /H1118/H1118/H1118/H1118/H1118/H111833(f) 61,941 7,045 –
Amount due to a director /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833(d) 76,693 186,951 116,281
Bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – 33,183
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) 48,236 52,520 58,507
Financial liability at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.3 – – 628
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118533,652 540,119 497,578---------
--------- ---------
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118559,201 574,851 520,121--------- --------- ---------
Total equity and liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,094,599 1,033,396 1,211,111
APPENDIX I ACCOUNTANT’S REPORT
– I-7 –


--- page 469 ---
STATEMENT OF FINANCIAL POSITION OF THE COMPANY
Notes
As at
31 March
2024 2025
RMB’000 RMB’000
Assets
Non-current asset
Investment in a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–*
Current assets
Amount due from the immediate holding
company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833(g) **
Prepayment for listing expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822(b) 1,357 5,942
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,357 5,942
Equity
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 **
Accumulated losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,623) (23,350)
Total deficit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,623) (23,350)------ ------
Liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Accrued listing expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 2,236 4,730
Amounts due to group companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833(g) 4,744 24,562
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,980 29,292------ ------
Total equity and liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,357 5,942* The amounts as at 31 March 2024 and 2025 are below RMB1,000.
APPENDIX I ACCOUNTANT’S REPORT
– I-8 –


--- page 470 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Notes
Share
capital
(Note 26)
Translation
reserve
Statutory
reserve
Share-based
compensation
(Note 15)
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 April 2022 /H1118/H1118/H1118 – (109,842) 4,782 12,835 604,790 512,565
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 173,106 173,106
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,148 – – – 39,148
Total comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,148 – – 173,106 212,254
Transactions with owners
in their capacity as
owners
Dividends /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – – – – (189,421) (189,421)
Balance at 31 March 2023 /H1118/H1118 – (70,694) 4,782 12,835 588,475 535,398
Balance at 1 April 2023 /H1118/H1118/H1118 – (70,694) 4,782 12,835 588,475 535,398
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 206,473 206,473
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,333 – – – 17,333
Total comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,333 – – 206,473 223,806
Transaction with owners in
their capacity as owners
Share option scheme
– V alue of grantee services /H1118/H1118 – – – 13,679 – 13,679
Incorporation of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 *–– – – *
Dividends /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – – – – (314,338) (314,338)
Balance at 31 March 2024 /H1118/H1118 * (53,361) 4,782 26,514 480,610 458,545
Balance at 1 April 2024 /H1118/H1118/H1118 * (53,361) 4,782 26,514 480,610 458,545
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 227,029 227,029
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,416 – – – 5,416
Total comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,416 – – 227,029 232,445
Balance at 31 March 2025 /H1118/H1118 * (47,945) 4,782 26,514 707,639 690,990
* The amounts as at 31 March 2024 and 2025 are below RMB1,000.
APPENDIX I ACCOUNTANT’S REPORT
– I-9 –


--- page 471 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 March
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash flows from operating activities
Cash generated from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(a) 244,018 211,308 256,649
Income tax paid, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(33,887) (49,836) (19,946)
Net cash generated from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,131 161,472 236,703
------- ------- -------
Cash flows from investing activities
Purchase of property, plant and equipment /H1118 17 (13,211) (27,587) (26,275)
Purchase of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,054) (2,443) (5,102)
Proceeds from disposal of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(b) 599 163 2,978
Proceeds from disposal of assets classified
as held for sale /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – – 17,276
Redemption of fixed deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,388 –
Placement of Fixed deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,388) – –
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811 6,468 8,063 1,692
Payment for investment in a joint venture /H1118 16 – (5,607) (7,233)
Fund advanced to related companies /H1118/H1118/H1118/H1118/H1118(2,789) (2,502) –
Repayment from related companies /H1118/H1118/H1118/H1118/H1118/H1118 – – 8,149
Net cash used in investing activities /H1118/H1118/H1118/H1118/H1118(25,375) (16,525) (8,515)
APPENDIX I ACCOUNTANT’S REPORT
– I-10 –


--- page 472 ---
Y ear ended 31 March
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash flows from financing activities
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811, 31(c) – – (1,383)
Draw down of bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) – – 41,395
Repayments of bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) – – (8,611)
Payment of interest element of lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) (2,667) (4,034) (4,842)
Payment of principal element of lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) (50,211) (61,229) (70,844)
Dividends paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) (145,631) (144,895) (75,562)
Advance from a shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) – – 273
Repayment to a shareholder /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) (1,614) (156) –
Repayment to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) (5,162) (61,017) (7,528)
Advance from a director /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) 79 13,117 46
Repayment to a director /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831(c) (10,319) (76,119) (213)
Payment of listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,022) (5,517)
Net cash used in financing activities /H1118/H1118/H1118/H1118/H1118(215,525) (335,355) (132,786)
Net (decrease)/increase in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(30,769) (190,408) 95,402
Effect of foreign exchange rate changes /H1118/H1118/H1118 43,838 20,875 9,667
Cash and cash equivalents at beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,393 320,462 150,929
Cash and cash equivalents at end of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 320,462 150,929 255,998
For major non-cash transactions for the years ended 31 March 2023, 2024 and 2025,
please refer to Note 31(d).
APPENDIX I ACCOUNTANT’S REPORT
– I-11 –


--- page 473 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1 GENERAL INFORMATION, REORGANISATION AND BASIS OF PRESENTATION
1.1 General information
Eternal Beauty Holdings Limited (the “Company”) was incorporated in the Cayman Islands as an exempted
company under the Companies Act, Cap 22 (Law 3 of 1961) of the Cayman Islands with limited liability on 9 January
2024. The address of the Company’s registered office is Cricket Square, Hutchins Drive, PO Box 2681, Grand
Cayman, KY1- 1111, Cayman Islands.
The Company is an investment holding company. The Company and its subsidiaries (together, the “Group”)
are principally engaged in retail, wholesale and distribution of perfumes, skincare products, color cosmetics, personal
care products, eyewear and home fragrances in the People’s Republic of China (“PRC”) including Hong Kong and
Macau (“Listing Business”).
The ultimate controlling shareholder of the Company as at the date of this report is Mr. Lau Kui Wing (“Mr.
Lau”) and Ms. Chan Wai Chun (“Mrs. Lau”). The ultimate controlling company of the Company as at the date of this
report is Eternal Beauty International Limited which was incorporated in the British Virgin Islands on 8 January 2024
and is wholly-owned by Mr. Lau and Mrs. Lau.
1.2 Reorganisation
Prior to the incorporation of the Company and the completion of the reorganisation (the “Reorganisation”) as
described below, the Listing Business was mainly carried out by Eternal Holdings Limited (“Eternal BVI”) and its
subsidiaries (collectively the “Operating Companies”) and Visual Promotion Limited (“Visual Promotion”) which is
beneficially owned by Mr. Lau. Before the completion of the Reorganisation, the controlling shareholders of
Operating Companies were Mr. Lau and Mrs. Lau. During the Track Record Period, in order to streamline the Group’s
structure and to conduct the Listing Business under the “Eternal” brand, the Group gradually diminished the business
scale of Visual Promotion and ceased to conduct any business since April 2024.
In preparing for the initial public offering (“IPO”) and listing (the “Listing”) of the Company’s shares on the
Main Board of The Stock Exchange of Hong Kong Limited, the Operating Companies underwent the Reorganisation
by inserting a new holding company of the Operating Companies. The following transactions were carried out:
1.2.1 Incorporation of the Company by Mr. Lau
On 9 January 2024, the Company was incorporated in the Cayman Islands. On the same day, one share
was issued and transferred to Eternal Beauty International Limited (“Eternal International”) and the Company
was then wholly-owned by Eternal Beauty International Limited.
1.2.2 Establishment of Eternal Development by Eternal BVI
On 23 January 2024, Shanghai Eternal Enterprise Development Co., Ltd. (“Eternal Development”) was
established in the PRC as a wholly foreign owned enterprise and was wholly owned by Eternal China Limited,
a directly wholly owned subsidiary of Eternal BVI.
1.2.3 Establishment of the PRC subsidiaries under Eternal Development
On 28 February 2024, 29 February 2024 and 14 March 2024, Shanghai Eternal Trading Co., Ltd.,
Shanghai Eternal Brand Management Co., Ltd. and Shanghai Eternal Import and Export Co., Ltd. were
established in the PRC as wholly owned subsidiaries of Eternal Development, respectively.
APPENDIX I ACCOUNTANT’S REPORT
– I-12 –


--- page 474 ---
1.2.4 Allotment of shares of Eternal Optical & Perfumery (Far East) Limited (“Eternal Far East”) to
Eternal BVI and transfer of shares from Mr. Lau and Mrs. Lau to Eternal BVI
During the Track Record Period and immediately before the reorganisation, 7,000 shares, 2,000 shares
and 1,000 shares of Eternal Far East were held by Eternal BVI, Mr. Lau and Mrs. Lau as to 70%, 20% and
10%, respectively. On 9 May 2024, 9,990,000 ordinary shares of Eternal Far East were allotted and issued to
Eternal BVI credited as fully-paid. Immediately after such allotment and issuance, each of Eternal BVI, Mr.
Lau and Mrs. Lau held 99.97%, 0.02% and 0.01% of Eternal Far East, respectively.
On 17 June 2024, Mr. Lau and Mrs. Lau transferred 2,000 and 1,000 ordinary shares of Eternal Far East
to Eternal BVI, respectively. As consideration, Eternal BVI allotted and issued 9 shares credited as fully paid
at par to the Company at the direction of Mr. Lau and Mrs. Lau. Immediately after such transfers, Eternal Far
East became wholly-owned by Eternal BVI.
1.2.5 Transfer of shares of Eternal BVI from Mr. Lau to the Company
On 18 June 2024, Mr. Lau transferred his only one issued share of Eternal BVI to the Company. As
consideration, the Company allotted and issued one share credited as fully-paid at par to Eternal International.
Immediately after such transfer, Eternal BVI became directly wholly-owned by the Company.
Upon the completion of the Reorganisation and as at the date of this report, the Company has direct and
indirect interests in the following subsidiaries:
Percentage of attributable equity
interest
Company name
Country/place and
date of
incorporation/
establishment
Issued and fully
paid share
capital/registered
capital As at 31 March
As at the
date of
this report Principal activities Notes
2023 2024 2025
Eternal Holdings Limited /H1118/H1118British Virgin
Islands,
7 April 1995
10 share of US$1
per share
100% 100% 100% 100% Investment holding (iii)
Eternal Optical & Perfumery
(Far East) Limited ( 㣤ஷ(Ⴣ
؇)ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong,
18 February 1983
10,000,000 shares of
HK$0.1 per share
100% 100% 100% 100% Trading and
retailing of
perfumes, skincare
products, color
cosmetics and
eyewear
(iv)
E&C Holdings Limited /H1118/H1118/H1118Hong Kong,
2 September 2021
10,000 shares of
HK$1 per share
100% 100% 100% – Investment holding (v), 35
E&C (Hong Kong) Trading
Limited
(጑੻(ಥ)ʮ̡) /H1118
Hong Kong,
30 November
2021
1,000,000 shares of
HK$1 per share
100% 100% 100% – Trading and
retailing of
perfumes
(v), 35
E China Trading Limited
(ʮ̡) /H1118/H1118
Hong Kong,
7 November 2018
10,000 shares of
HK$1 per share
100% 100% 100% 100% Investment holding (v)
Eternal China Limited
(ʮ̡) /H1118/H1118/H1118/H1118
Hong Kong,
10 April 2017
1 share of HK$1 per
share
100% 100% 100% 100% Investment holding (v)
Excellent Fareast Limited
(ʮ̡) /H1118/H1118/H1118/H1118
Hong Kong,
22 October 1996
300,000 shares of
HK$1 per share
100% 100% 100% 100% Trading and
retailing of
perfumes, color
cosmetics
and skincare
products
(v)
Moral Happiness Limited
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong,
1 October 2021
10,000 shares of
HK$1 per share
100% 100% 100% 100% Dormant (v)
Talent Crown Limited
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
Hong Kong, 8
October 2021
10,000 shares of
HK$1 per share
100% 100% 100% 100% Retailing of
skincare products
(v)
APPENDIX I ACCOUNTANT’S REPORT
– I-13 –


--- page 475 ---
Percentage of attributable equity
interest
Company name
Country/place and
date of
incorporation/
establishment
Issued and fully
paid share
capital/registered
capital As at 31 March
As at the
date of
this report Principal activities Notes
2023 2024 2025
CREED Shanghai Cosmetics
Limited (ۜ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 2 December
2021
RMB10,000,000 100% 100% 100% – Trading and
retailing of
perfumes
(vi),
(viii), 35
Eternal (Shanghai) Trading
Co., Ltd ( ጑ஷ(ɪऎ)Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 30 July 2008 HK$20,000,000 100% 100% 100% 100% Dormant (ii), (viii)
Shanghai Yierpai Advertising
Ltd (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 1 December
2021
RMB500,000 100% 100% 100% 100% Dormant (ii), (viii)
Eternal (Xi’an) Trading Co.,
Ltd ( ጑ஷ(Гτ)ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 19 December
2023
RMB1,000,000 N/A 100% 100% 100% Retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Eternal Beauty (Shenzhen)
Trading Co., Ltd (ุ
(ଉέ)ʮ̡)/H1118/H1118/H1118/H1118
PRC, 30 June 2023 RMB1,000,000 N/A 100% 100% 100% Retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Eternal (Shanghai) Cosmetics
Ltd (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 15 February
2019
RMB10,000,000 100% 100% 100% 100% Trading and
retailing of
perfumes, color
cosmetics, and
skincare products
(vi), (viii)
Eternal Beauty (Shanghai)
Trading Co., Ltd (Ѹ
(ɪऎ)ʮ̡)/H1118/H1118/H1118/H1118
PRC, 14 August
2023
RMB1,000,000 N/A 100% 100% 100% Retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Eternal (China) International
Trading Co., Ltd ( ጑ஷ(ʕ
਷)ப΂ʮ̡) /H1118
PRC, 7 January
2019
RMB50,000,000 100% 100% 100% 100% Investment holding (ii), (viii)
Eternal (Beijing) Trading Co.,
Ltd ( ጑ஷ(̏ԯ)ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 19 April 2019 RMB1,000,000 100% 100% 100% 100% Retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Eternal Shanghai Optical Ltd
(ʮ̡) /H1118/H1118
PRC, 10 June 2021 RMB1,000,000 100% 100% 100% 100% Trading of eyewear (ii), (viii)
Guangzhou Eternal Business
Consulting Co., Ltd ( ᄿψ
ʮ̡) /H1118/H1118
PRC, 24 January
2019
RMB1,000,000 100% 100% 100% 100% Procurement of
perfumes and color
cosmetics
(ii), (viii)
Eternal (Chengdu) Trading
Co., Ltd ( ጑ஷ(ϓே)Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 18 April 2019 RMB1,000,000 100% 100% 100% 100% Retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Eternal Digintelligence
Corporation (Ҧ
ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 14 May 2021 RMB30,000,000 100% 100% 100% 100% System support and
development
(ii), (viii)
Guangzhou Huisheng Trading
Co., Ltd (Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 15 October
2014
RMB25,000,000 100% 100% 100% 100% Trading of
perfumes, skincare
products, and color
cosmetics
(vii), (viii)
APPENDIX I ACCOUNTANT’S REPORT
– I-14 –


--- page 476 ---
Percentage of attributable equity
interest
Company name
Country/place and
date of
incorporation/
establishment
Issued and fully
paid share
capital/registered
capital As at 31 March
As at the
date of
this report Principal activities Notes
2023 2024 2025
Eternal (Guangzhou) Trading
Co., Ltd ( ጑ஷ(ᄿψ)Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 24 June 2019 RMB1,000,000 100% 100% 100% 100% Retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Shanghai Smiley Beauty
Cosmetics Limited
(ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 3 May 2020 RMB1,000,000 100% 100% 100% 100% Trading of color
cosmetics and
skincare products
(ii), (viii)
Shanghai Y ongxin Trading
Co., Ltd (Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 12 March
2023
RMB1,000,000 100% 100% 100% 100% Trading of
perfumes and color
cosmetics
(ii), (viii)
Shanghai Zhuangwei
Advertising Ltd ( ɪऎѱբ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118
PRC, 1 December
2021
RMB500,000 100% 100% 100% 100% Dormant (ii), (viii)
Shanghai Eternal Enterprise
Development Co., Ltd
(ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 23 January
2024
RMB100,000,000 N/A 100% 100% 100% Investment holding (ii), (viii)
Shanghai Eternal Trading Co.,
Ltd (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC, 28 February
2024
RMB10,000,000 N/A 100% 100% 100% Trading and
retailing of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Shanghai Eternal Brand
Management Co., Ltd ( ɪऎ
ʮ̡) /H1118/H1118
PRC, 29 February
2024
RMB1,000,000 N/A 100% 100% 100% Brand management (ii), (viii)
Shanghai Eternal Import and
Export Co., Ltd
(ʮ̡) /H1118
PRC, 14 March
2024
RMB10,000,000 N/A 100% 100% 100% Trading of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
Guangzhou Eternal Import
and Export Co., Ltd
(ʮ̡) /H1118
PRC, 27 September
2024
RMB10,000,000 N/A N/A 100% 100% Trading of
perfumes, color
cosmetics, and
skincare products
(ii), (viii)
APPENDIX I ACCOUNTANT’S REPORT
– I-15 –


--- page 477 ---
Notes:
(i) Except for the PRC subsidiaries which adopted 31 December as its financial year end date, all companies
comprising the Group has adopted 31 March as their financial year end date.
(ii) No audited financial statements have been issued for these companies for the years ended 31 December 2022,
2023 and 2024.
(iii) No audited financial statements have been issued for these companies for the years ended 31 March 2023, 2024
and 2025.
(iv) The statutory financial statements of this company for the years ended 31 March 2023 and 2024 were audited
by PricewaterhouseCoopers. Up to the date of this report, the audited financial statements of this company for
the year ended 31 March 2025 have not been issued.
(v) The statutory financial statements of these companies for the years ended 31 March 2023 and 2024 were
audited by WKL & Partners C.P .A. Limited. Up to the date of this report, the audited financial statements of
these companies for the year ended 31 March 2025 have not been issued.
(vi) The financial statements of these companies for the years ended 31 December 2022, 2023 and 2024 were
audited by Shanghai Hddy Certified Public Accountants Co., Ltd (ה.)
vii) The financial statements of this company for the year ended 31 December 2022 were audited by Guangdong
Mingxin Certified Public Accountants Co., Ltd. (ה.)
viii) The English name of the company referred above represents the best effort made by management of the
Company to directly translate the Chinese names as they have not registered any official English names.
1.3 Basis of presentation
Immediately prior to and after the Reorganisation, the Listing Business is mainly conducted through the
subsidiaries of Eternal BVI and Visual Promotion which are under common control by the controlling shareholder
of the Group. Pursuant to the Reorganisation, Eternal BVI is transferred to and held by the Company. The Company
has not been involved in any other business prior to the Reorganisation and do not meet the definition of a business.
Visual Promotion was ceased to be involved in the Listing Business in April 2024.
The Reorganisation is a recapitalisation of the Listing Business with no change in management of such
business and the ultimate owners of the Listing Business remain the same. Accordingly, the Group resulting from the
Reorganisation is regarded as a continuation of the Listing Business under the Company and, for the purpose of this
report, the Historical Financial Information has been prepared and presented as a continuation of the Listing
Business, with the assets and liabilities of the Group recognised, included these relating to the Listing Business
involved by subsidiaries of Eternal BVI and Visual Promotion, and measured at the carrying amounts of the Listing
Business under the consolidated financial statements of the Eternal BVI and Visual Promotion for all periods
presented.
2 BASIS OF PREPARATION
The Historical Financial Information have been prepared in accordance with HKFRS Accounting Standards
(“HKFRSs”) as issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).
HKFRSs comprise the following authoritative literature:
 Hong Kong Financial Reporting Standards
 Hong Kong Accounting Standards
 Interpretations developed by the Hong Kong Institute of Certified Public Accountants.
The Historical Financial Information has been prepared under the historical cost convention, except for
financial asset/liability at fair value through profit or loss (“FVPL”), which is measured at fair value.
APPENDIX I ACCOUNTANT’S REPORT
– I-16 –


--- page 478 ---
The preparation of the Historical Financial Information in conformity with HKFRSs requires the use of certain
critical accounting estimates. It also requires management to exercise its judgment in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 4.
The following new standards and amendments to standards have been issued but are not effective during the
Track Record Period, and have not been early adopted by the Group:
Effective for annual
periods beginning
on or after
Amendments to HKAS 21 /H1118/H1118/H1118/H1118/H1118Lack of Exchangeability 1 January 2025
Amendments to HKFRS 9 and
HKFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Amendments to the Classification and Measurement of
Financial Instruments
1 January 2026
Amendments to HKFRS 9 and
HKFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Contracts Referencing Nature — dependent Electricity 1 January 2026
Annual Improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118Annual Improvements to HKFRS Accounting Standards
— V olume 11
1 January 2026
HKFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial Statements 1 January 2027
HKFRS 19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability: Disclosures 1 January 2027
Amendments to HKFRS 10 and
HKAS 28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sale or Contribution of Assets between an Investor and
its Associate or Joint V enture
To be
determined
The Group will apply the above new standards and amendments to standards when they become effective. The
Group has commenced the assessment of the expected impact of HKFRS 18 as set out below. The directors of the
Company assess that the adoption of the other new standards and amendments to standards is not expected to have
any significant impact on the results and the financial position of the Group.
HKFRS 18 “Presentation and Disclosure in Financial Statements”
HKFRS 18 will replace HKAS 1 “Presentation of financial statements” , introducing new requirements that
will help to achieve comparability of the financial performance of similar entities and provide more relevant
information and transparency to users. Even though HKFRS 18 will not impact the recognition or measurement of
items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular
those related to the statement of financial performance and providing management-defined performance measures
within the financial statements.
Management is currently assessing the detailed implications of applying the new standard on the Group’s
consolidated financial statements and considers that the adoption of HKFRS 18 is unlikely to have a significant
impact on the Group’s results of operations and financial position. From the high-level preliminary assessment
performed, the following potential impacts have been identified:
 Although the adoption of HKFRS 18 will have no impact on the Group’s profit for the year, the Group
expects that grouping items of income and expenses in the consolidated statements of comprehensive
income into the new categories will impact how operating profit is calculated and reported. From the
high-level impact assessment that the Group has performed, the following items might potentially
impact operating profit:
– Foreign exchange differences currently aggregated in the line item ‘other (losses)/gains, net’ in
operating profit might need to be disaggregated, with some foreign exchange gains or losses
presented below operating profit.
– HKFRS 18 has specific requirements on the category in which derivative gains or losses are
recognised — which is the same category as the income and expenses affected by the risk that
the derivative is used to manage. Although the Group currently recognises some gains or losses
in operating profit, there might be a change to where these gains or losses are recognised, and the
Group is currently evaluating the need for change.
 The line items presented on the primary financial statements might change as a result of the application
of the concept of ‘useful structured summary’ and the enhanced principles on aggregation and
disaggregation.
APPENDIX I ACCOUNTANT’S REPORT
– I-17 –


--- page 479 ---
 The Group does not expect there to be a significant change in the information that is currently disclosed
in the notes because the requirement to disclose material information remains unchanged; however, the
way in which the information is grouped might change as a result of the aggregation/disaggregation
principles. In addition, there will be significant new disclosures required for:
o management-defined performance measures;
o a break-down of the nature of expenses for line items presented by function in the operating
category of the consolidated statements of comprehensive income — this break-down is only
required for certain nature of expenses; and
o for the first annual period of application of HKFRS 18, a reconciliation for each line item in the
consolidated statements of comprehensive income between the restated amounts presented by
applying HKFRS 18 and the amounts previously presented applying HKAS 1.
The Group will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective
application is required, and so the comparative information for the financial year ending 31 March 2026 will be
restated in accordance with HKFRS 18.
3 FINANCIAL RISK MANAGEMENT
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: foreign exchange risk, cash flow and fair value
interest rate risk, credit risk and liquidity risk. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance. Risk management is carried out under policies approved by the directors. The directors provide
principles for overall risk management.
(a) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to the Hong Kong Dollar (“HK$”), the Euros (“EUR”), the British Pound Sterling (“GBP”) and the
United States Dollar (“US$”) and Japanese Y en (“JPY”). Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities.
The Group manages its foreign exchange risks by performing regular reviews and monitoring of its
foreign exchange exposures.
If HK$ (being functional currencies of the Group’s several subsidiaries) had weakened/strengthened by
5% against the RMB with all other variables held constant, profit for the year would have been approximately
RMB52,000 higher/lower, RMB715,000 higher/lower and RMB4,335,000 higher/lower for the years ended
31 March 2023, 2024 and 2025, respectively, mainly as a result of foreign exchange gains/losses on the
relevant cash and cash equivalents, trade receivables, other receivables, amount due from a joint venture,
amount due to a director, trade payables and accruals, provisions and other payables.
If EUR had weakened/strengthened by 5% against the RMB with all other variables held constant, profit
for the year would have been approximately RMB3,731,000 higher/lower, RMB2,258,000 higher/lower and
RMB3,305,000 higher/lower for the years ended 31 March 2023, 2024 and 2025, respectively, mainly as a
result of foreign exchange gains/losses on translation of EUR denominated cash and cash equivalents, other
receivables, trade payables, accruals, provisions and other payable.
If GBP had weakened/strengthened by 5% against the RMB with all other variables held constant, profit
for the year would have been approximately RMB703,000 lower/higher, RMB7,000 lower/higher and
RMB7,000 for the years ended 31 March 2023, 2024 and 2025, respectively, mainly as a result of foreign
exchange losses/gains on translation of GBP denominated cash and cash equivalents.
If US$ had weakened/strengthened by 5% against the RMB with all other variables held constant, profit
for the year would have been approximately RMB5,748,000 lower/higher, RMB947,000 lower/higher and
RMB4,325,000 lower/higher for the years ended 31 March 2023, 2024 and 2025, respectively, mainly as a
APPENDIX I ACCOUNTANT’S REPORT
– I-18 –


--- page 480 ---
result of foreign exchange losses/gains on translation of US$ denominated cash and cash equivalents, trade
receivables, other receivables, amount due from a joint venture, amount due to a director, trade payable and
accruals, provisions and other payable.
If JPY had weakened/strengthened by 5% against the RMB with all other variables held constant, profit
for the year would have been approximately RMB257,000 higher/lower, RMB76,000 higher/lower and
RMB249,000 higher/lower for the years ended 31 March 2023, 2024 and 2025, mainly as a result of foreign
exchange losses/gains on translation of JPY denominated cash and cash equivalents and trade payables.
(b) Cash flow and fair value interest rate risk
The Group’s interest rate risk is mainly attributable to its cash and cash equivalents and bank borrowings
with floating interest rates. Details of the Group’s cash and cash equivalents and bank borrowings have been
disclosed in Notes 23 and 30 to the Historical Financial Information respectively.
Other than cash and cash equivalents and bank borrowings, the Group does not have significant
interest-bearing assets or liabilities.
For the years ended 31 March 2023, 2024 and 2025, if interest rates on cash and cash equivalents and
bank borrowings had been 50 basis points higher/lower with all variables held constant, profit for the years
would have been approximately RMB1,602,000 higher/lower, RMB755,000 higher/lower and RMB1,141,000
higher/lower respectively, mainly as a result of higher/lower of interest income on cash and cash equivalents
netted with higher/lower interest expenses on the bank borrowings.
(c) Credit risk
(i) Risk management
Credit risk of the Group mainly arises from deposits with banks and financial institutions, as well
as credit exposures to trade receivables, deposits and other receivables, amounts due from related
companies, amount due from a joint venture and amount due from a shareholder. The carrying amounts
of these balances on the statement of financial position represent the Group’s maximum exposure to
credit risk in relation to its financial assets.
The Group’s bank deposits are placed in those banks and financial institutions which are
independently rated with a high credit rating. Management does not expect any losses from
non-performance by these banks and financial institutions as they have no default history in the past.
For trade receivables, the normal credit terms with customers are between 30 and 90 days. There
are policies in place by the Group to ensure that credit terms are made to counterparties with an
appropriate credit history and the management performs ongoing credit evaluations of its counterparties.
The credit quality of the customers is assessed, which takes into account their financial position, past
experience and other factors. In view of the history of business dealings with these customers and the
collection history of the receivables due from them, management believes that there is no material credit
risk inherent in the Group’s outstanding receivable balance due from these customers. Management
makes periodic assessment on the recoverability of trade receivables based on historical payment
records, the length of the overdue period, the financial strength of the debtors and whether there are any
disputes with the debtors. The Group’s historical experience in collection of trade receivables falls
within the recorded allowances and the directors are of the opinion that adequate provision for
uncollectible receivables has been made in the Historical Financial Information.
The credit quality of the deposit and other receivables, amounts due from related companies,
amount due from a joint venture and amount due from a shareholder have been assessed with reference
to historical information about the counterparty default and financial position of the counterparty.
Management does not believe the credit risk in relation to the deposit and other receivables and related
companies/parties are significant, considering there are no history of defaults in the past and
management does not expect any losses from non-performance by these counterparties and related
companies/parties.
APPENDIX I ACCOUNTANT’S REPORT
– I-19 –


--- page 481 ---
(ii) Impairment of financial assets
The Group’s financial assets, including trade receivables, deposits and other receivables, amount
due from a joint venture, amount due from a shareholder and amounts due from related companies, are
subject to the expected credit loss model. While cash and cash equivalents and fixed deposits are also
subject to the impairment requirements of HKFRS 9, the identified impairment loss was immaterial as
they are mainly deposited in reputable and creditworthy banks and financial institutions.
Trade receivables
The Group applies the HKFRS 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, the management assessed the credit risk of listed
customers individually with reference to the credit rating report in the market and also the default
history of the customers. The loss rates are further adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the customers to settle the
receivables. The Group has identified the gross domestic product growth and the money supply
in Hong Kong, and gross domestic product growth and merchandise trade balance in PRC to be
the most relevant forward-looking factors, and accordingly adjust the default rate based on
expected changes in these factors. As those customers are classified as investment grade with
reference to the Moody’s credit agency report, the Directors of the Company are of the opinion
that the expected credit loss of these customers is not significant.
Measurement of expected credit loss — collective basis
To measure the expected credit losses, the management assessed the credit risk of
non-listed customers collectively with reference to the general industrial default risk and also the
default history of those customers. The loss rates are further adjusted to reflect current and
forward-looking information on macroeconomic factors affecting the ability of the customers to
settle the receivables. The Group has identified the gross domestic product growth and the money
supply in Hong Kong, and gross domestic product growth and merchandise trade balance in PRC
to be the most relevant forward-looking factors, and accordingly adjust the default rate based on
expected changes in these factors.
In addition to the individual and collective assessment of the listed and non-listed
customers respectively, receivables relating to customers with known financial difficulties or
significant doubt on collection of receivables are assessed individually for separate provision for
impairment allowance.
The following table presents the balances of gross carrying amount and the respective loss
allowance as at end of each reporting period.
As at 31 March
2023 2024 2025
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,243 175,726 251,062
Expected credit loss rates /H1118/H1118/H1118/H1118/H1118/H11180.18% 0.25% 0.26%
Loss allowance (RMB’000) /H1118/H1118/H1118/H1118(284) (447) (663)
Net carrying amount (RMB’000) /H1118 156,959 175,279 250,399
APPENDIX I ACCOUNTANT’S REPORT
– I-20 –


--- page 482 ---
The loss allowance provision for trade receivables as at 31 March 2023, 2024 and 2025
reconciles to the opening loss allowance for that provision as follows:
Trade receivables
RMB’000
As at 1 April 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375
Reversal of provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(92)
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181
As at 31 March 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118284
Provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181
As at 31 March 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118447
Provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118216
As at 31 March 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118663
Other financial assets at amortised cost
Other financial assets at amortised cost including deposits and other receivables, amounts
due from related companies, amount due from a joint venture and amount due from a shareholder
are subject to impairment requirement of HKFRS 9. The Group has assessed that the expected
credit losses for these balances under general approach. The credit quality of these balances have
been assessed with reference to historical information about the default rates and financial
position of the counterparties. As at 31 March 2023, 2024 and 2025, loss allowances of
RMB7,805,000, RMB8,116,000 and RMB7,295,000 have been provided for deposits and other
receivables, respectively. Such balance included credit-impaired other receivables of
approximately RMB6,800,000 that are evaluated based on life-time expected losses with the
remaining deposits and other receivables that are evaluated under 12-month credit losses at
default rate of 0.5%-5.0% during the respective years. Except for these counterparties,
management is of the opinion that the credit risk of amounts due from related companies, amount
due from a joint venture and amount due from a shareholder are low due to the sound collection
history and financial stability of the counterparties. Therefore, expected credit loss rate of these
balances is assessed to be immaterial as at 31 March 2023, 2024 and 2025.
The loss allowance provision for deposits and other receivables as at 31 March 2023, 2024
and 2025 reconciles to the opening loss allowance for that provision as follows:
Deposits and
other receivables
RMB’000
As at 1 April 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,092
Provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118714
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1)
As at 31 March 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,805
Provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118312
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1)
As at 31 March 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,116
Reversal of provision for impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(821)
As at 31 March 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,295
(d) Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its obligations when they fall due, resulting
from amount and maturity mismatches of assets and liabilities.
APPENDIX I ACCOUNTANT’S REPORT
– I-21 –


--- page 483 ---
The Group employs projected cash flow analysis to manage liquidity risk by forecasting the amount of
cash required and monitoring the Group’s working capital to ensure that all liabilities due and known funding
requirements could be met. In order to meet their liquidity requirements in the short and longer term, the Group
may adjust the amount of dividends paid to shareholders and drawdown available bank facilities. Furthermore,
management performs monthly review of receivables and payables ageing analysis to ensure the Group is able
to maintain sufficient financial resources to meet its liquidity requirements and to follow up on any overdue
balances.
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on the
remaining period at the end of the reporting period to the contractual maturity date for:
(a) All non-derivative financial liabilities; and
(b) Net and gross settled financial asset/liability at fair value through profit or loss for which the
contractual maturities are essential for an understanding of the timing of the cash flows.
As at 31 March 2023
On demand Within 1 year 1 to 2 years 2 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118 – 113,498 – – 113,498
Accruals and other
payables /H1118/H1118/H1118/H1118/H1118/H1118– 121,327 – – 121,327
Amounts due to
related companies /H1118 61,94 1––– 61,941
Amount due to
a director /H1118/H1118/H1118/H1118/H1118/H111876,69 3––– 76,693
Lease liabilities and
interest payments – 51,109 22,498 2,302 75,909
138,634 285,934 22,498 2,302 449,368
Financial asset
at its fair value
Gross settled
(foreign currency
contract) /H1118/H1118/H1118/H1118/H1118/H1118
– Inflow /H1118/H1118/H1118/H1118/H1118/H1118– 165,249 – – 165,249
– (Outflow) /H1118/H1118/H1118/H1118 – (164,786) – – (164,786)
– 463 – – 463
As at 31 March 2024
On demand Within 1 year 1 to 2 years 2 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118 – 93,223 – – 93,223
Accruals and other
payables /H1118/H1118/H1118/H1118/H1118/H1118– 123,161 – – 123,161
Amounts due to
related companies /H1118 7,04 5––– 7,045
Amount due a to
director /H1118/H1118/H1118/H1118/H1118/H1118/H1118186,95 1––– 186,951
Lease liabilities and
interest payments – 54,115 28,911 7,741 90,767
193,996 270,499 28,911 7,741 501,147
APPENDIX I ACCOUNTANT’S REPORT
– I-22 –


--- page 484 ---
As at 31 March 2025
On demand Within 1 year 1 to 2 years 2 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118 – 119,505 – – 119,505
Accruals and other
payables /H1118/H1118/H1118/H1118/H1118/H1118– 70,649 – – 70,649
Amount due a to
director /H1118/H1118/H1118/H1118/H1118/H1118/H1118116,28 1––– 1 16,281
Bank borrowings /H1118/H1118 33,18 3––– 33,183
Lease liabilities and
interest payments /H1118 – 60,979 17,457 3,574 82,010
149,464 251,133 17,457 3,574 421,628
Financial liability
at its fair value
Gross settled
(foreign currency
contract) /H1118/H1118/H1118/H1118/H1118/H1118
– Inflow /H1118/H1118/H1118/H1118/H1118/H1118– 18,916 – – 18,916
– (Outflow) /H1118/H1118/H1118/H1118 – (19,544) – – (19,544)
– (628) – – (628)
Where the loan agreement contains a repayable on demand clause which gives the lender the
unconditional right to call the loan at any time, the amounts repayable are classified in the earliest time
bracket in which the lender could demand repayment. Based on the internal information provided by
management, it is expected that the lender will not exercise its rights to demand repayment. The
expected cash flows with reference to the schedule of repayments set out in the loan agreements are as
follows:
Within 1 year 1 to 2 years 2 to 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
Bank borrowings /H1118/H1118/H1118/H111815,095 15,095 5,026 35,216
3.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The Group mainly uses equity to finance its operations. In order to
maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt or repay bank borrowings when cash received
from non-trade receivables. Also, the Group continues to monitor and maintain the sufficiency of banking facilities
for its operations.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio
is calculated as net debt divided by total capital. Net debt is calculated as total borrowings and lease liabilities less
cash and cash equivalents and fixed deposits. Total capital is calculated as “equity” as shown in the consolidated
statements of financial position, plus net debt.
APPENDIX I ACCOUNTANT’S REPORT
– I-23 –


--- page 485 ---
The gearing ratio at 31 March 2023, 2024 and 2025 were as follows:
As at 31 March
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 – – 33,183
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819(b) 73,005 85,594 78,923
Less: Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H111823 (320,462) (150,929) (255,998)
Less: Fixed deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 (13,388) – –
Net cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(260,845) (65,335) (143,892)
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118535,398 458,545 690,990
Total capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,553 393,210 547,098
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A N/A
3.3 Fair value estimation
The carrying values of trade receivables, deposits and other receivables, amounts due from related companies,
amount due from a joint venture, amount due from a shareholder, fixed deposits, cash and cash equivalents, trade
payables, accruals and other payables, amounts due to related companies, amount due to a director, bank borrowings
and lease liabilities are a reasonable approximation of their fair values and financial asset/liability at FVPL is stated
at fair value. The fair value of financial asset and liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate that is available to the Group for similar financial
instruments.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
 In the principal market for the asset or liability; or
 In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset considers a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use
the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Historical Financial Information
are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
 Leve l 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
 Level 2 – V aluation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
 Level 3 – V aluation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
APPENDIX I ACCOUNTANT’S REPORT
– I-24 –


--- page 486 ---
For assets and liabilities that are recognised in the Historical Financial Information at fair value on a recurring
basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end
of each reporting year.
The level within which the financial asset/liability is classified is determined based on the lowest level of
significant input to the fair value measurement. The financial asset/liability measured at fair value in the consolidated
statement of financial positions are grouped into the fair value hierarchy as follows:
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 31 March 2023
Asset
Financial asset at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 463 – 463
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 31 March 2025
Liability
Financial liability at FVPL /H1118/H1118/H1118/H1118/H1118/H1118– (628) – (628)
There were no transfers between levels 1, 2 and 3 during the years ended 31 March 2023, 2024 and 2025.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
(a) Impairment of non-financial assets
The Group’s management assesses at the end of each reporting period whether there is objective evidence that
the investments in non-financial assets, including property, plant and equipment, right-of-use assets and intangible
assets are impaired. The assessment of impairment requires the use of judgement and estimates. Where the
expectation is different from the original estimate, such difference will impact the carrying amount of the assets and
impairment in the period in which such estimates have been changed.
(b) Net realisable value of inventories
Net realisable value of inventories is the estimated selling price in the ordinary course of business, less
estimated selling expenses. These estimates are based on the current market condition and the historical experience
of selling products of similar nature. It could change significantly as a result of changes in customer taste and
competitor actions in response to severe industry cycle. Management reassesses these estimates at the end of each
reporting date.
APPENDIX I ACCOUNTANT’S REPORT
– I-25 –


--- page 487 ---
(c) Provision of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.
The Group used judgement in making these assumptions and selecting the inputs to the impairment calculation, based
on the Group’s past history, existing marketing conditions as well as forward looking estimates at the end of each
reporting period.
(d) Current and deferred income taxes
The Group is subject to income tax in Hong Kong and the PRC. Significant judgement is required in
determining the provision for income tax in each of these jurisdictions. There are many transactions and calculations
for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such differences will impact the
income tax and deferred tax provisions in the period in which such determination is made.
Deferred tax assets relating to certain temporary differences and tax losses are recognised when management
considers it is probable that future taxable profits will be available against which the temporary differences or tax
losses can be utilised. Deferred tax liabilities relating to temporary differences between the carrying amount and tax
bases of investments in foreign operations are not recognised where the Company is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
When the expectation is different from the original estimate, such differences will impact the recognition of deferred
tax assets/liabilities and taxation charges in the period in which such estimate is changed.
5 REVENUE AND SEGMENT INFORMATION
The chief operating decision maker (the “CODM”) has been identified as the executive directors of the
Company that make strategic decisions. The CODM regards the Group’s business as a single operating segment and
review Historical Financial Information accordingly. As the Group has only one operating segment qualified as
reporting segment under HKFRS 8 and the information that regularly reviewed by the executive directors for the
purposes of allocating resources and assessing performance of the operating segment is the Historical Financial
Information of the Group, no separate segmental analysis is presented in the Historical Financial Information.
Since all of the Group’s revenue and operating profit are generated from the PRC (including Hong Kong and
Macau) during the Track Record Period, no geographical information is presented.
As at 31 March 2023, 2024 2025, all the Group’s non-current assets are located in the PRC (including Hong
Kong and Macau).
During the Track Record Period, no customer individually contributes 10% or above of the Group’s total
revenue. Accordingly, no analysis of major customers was presented for the Track Record Period.
The revenue recognised during the Track Record Period is as follows:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Sales of goods, net of sales rebates, discounts
and returns /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,666,931 1,852,558 2,077,750
Service and management fee income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 11,203 5,613
1,699,144 1,863,761 2,083,363
Timing of revenue recognition
– At a point in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,666,931 1,852,558 2,077,750
– Over time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,213 11,203 5,613
1,699,144 1,863,761 2,083,363
APPENDIX I ACCOUNTANT’S REPORT
– I-26 –


--- page 488 ---
The Group has recognised the following liabilities related to contracts with customers:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Contract liabilities (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,015 16,307 13,353
Note: Contract liabilities are recognised by the Group when the customer pays consideration but before the
Group sells the goods to the customer.
The following table shows the revenue recognised during the Track Record Period related to carried-forward
contract liabilities.
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue recognised that was included in the
contract liabilities at the beginning of the year /H1118 21,541 23,015 16,307
The Group has elected the practical expedient for not to disclose the remaining performance obligation because
the performance obligation is part of a contract that have an original expected duration of one year or less.
Accounting policies of revenue
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts
receivable for goods supplied, stated net of discounts granted. Discounts granted to customers are classified as a
reduction of revenue. The Group recognises revenue when the amount of revenue can be reliably measured; when it
is probable that future economic benefits will flow to the Group; and when specific criteria have been met for each
of the Group’s activities as described below.
(a) Sales of goods
The Group operates a chain of retail stores and consignment counters in the PRC (including Hong Kong
and Macau) selling perfumes, skincare products, color cosmetics, personal care products, eyewear and home
fragrances. Revenue from the sale of goods is recognised when control of the products has transferred to the
customer. Payment of the transaction price is due immediately when the customer purchases the products.
The Group also engages in the wholesale and distribution of perfumes, skincare products, color
cosmetics, personal care products, eyewear and home fragrances to the wholesalers and distributors in the PRC
(including Hong Kong and Macau). Sales are recognised when control of the products has transferred, being
when the products are delivered to the retailers and distributors, the retailers and distributors have full
discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect
the wholesaler and distributor’s acceptance of the products.
(b) Service and management fee income
The Group operates and manages the daily operation of the online and offline stores of certain customers
under their brand names and charge service fee in connection therewith. Revenue from rendering of services
is recognised over the period in which the services are rendered.
APPENDIX I ACCOUNTANT’S REPORT
– I-27 –


--- page 489 ---
(c) Sales rebates
Retrospective sales rebates may be provided to certain customers once the quantity of products
purchased during the period exceeds a threshold specified in the contract. Rebates are recognised in contract
liabilities of the Group. To estimate the variable consideration for the expected future rebates, the most likely
amount method is used for contracts with a single volume threshold and the expected value method for
contracts with more than one volume threshold. The selected method that best predicts the amount of variable
consideration is primarily driven by the number of volume thresholds contained in the contract. Accumulated
experience is used to estimate the provision for the sales rebates and revenue is only recognised to the extent
that it is highly probable that a significant reversal will not occur.
(d) Sales returns
For contracts which provide a customer with a right to return the goods within a specified period, the
expected value method is used to estimate the goods that will not be returned because this method best predicts
the amount to which the Group will be entitled. Refund liabilities, which are reduced from revenue, are
estimated based on historical data the Group has maintained and subject to adjustments to the extent that actual
returns differ or expected to differ.
(e) Significant financing components
The Group does not expect to have any contracts where the period between the transfer of the promised
goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group
does not adjust any of the transaction prices for the time value of money.
(f) Principal versus agent analysis
In determining whether revenue of the Group should be reported gross or net is based on a continuing
assessment of various factors. When determining whether the Group is acting as the principal or agent in
offering goods or services to the customer, the Group needs to first identify who controls the specified goods
or services before they are transferred to the customer. The Group is a principal who obtains control any of
the following: (i) a good or another asset from the other party that the Group then transfers to the customer;
(ii) a right to a service to be performed by the other party, which gives the Group the ability to direct that party
to provide the service to the customer on the Group’s behalf; (iii) a good or service from the other party that
the Group then consolidates with other goods or services in providing the specified good or service to the
customer. If control is unclear, when the Group is primarily obligated in a transaction, is subject to inventory
risk, has latitude in establishing prices, or has several but not all of these indicators, the Group recognise
revenue on a gross basis. Otherwise, the Group records the net amount earned as commissions from products
sold or services provided.
The Group has assessed the revenue recognition of all its revenue stream based on the abovementioned
factors and considered that the Group is acting as a principal in the sales of goods or services. As such, the
Group should recognise the revenue on a gross basis.
(g) Contract liabilities
When either party to a contract has performed, the Group presents the contract in the statement of
financial position as contract assets or contract liabilities, depending on the relationship between the Group’s
performance and the customer’s payment. Contract liabilities are the Group’s obligation to transfer products
or services to its customer for which the Group has received consideration from the customer.
APPENDIX I ACCOUNTANT’S REPORT
– I-28 –


--- page 490 ---
6 OTHER INCOME
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Government grants (Note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,979 10,748 5,468
Management fee income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 1,598 –
Exhibition support service income (Note ii) /H1118/H1118/H1118/H1118 – – 1,400
12,057 12,346 6,868
Note i: Government grants are related to financial support fund in the PRC and HKSAR government’s
Employment Support Scheme. There are no unfulfilled conditions or other contingencies attaching to
these grants.
Note ii: During the year ended 31 March 2025, the Group has entered into an exhibition cooperation agreement
with an independent third party to provide planning, coordination and support services for a perfume
exhibition in the PRC.
Accounting policies of government grant
Grants from the government are recognised at their fair value when there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the consolidated statements of
comprehensive income over the period necessary to match them with the costs that they are intended to compensate.
7 EXPENSES BY NATURE
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cost of inventories sold (Note 24) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118801,337 891,178 1,005,984
Provision for impairment of inventories
(Note 24) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,767 6,312 5,869
Employee benefit expenses (Note 9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118336,194 377,216 358,445
Advertising and promotion expenses, net of
reimbursement received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,537 80,340 165,153
Expenses relating to variable lease payments
(Note 19(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,570 51,700 41,829
Expenses relating to short-term leases
(Note 19(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,338 29,318 20,845
Depreciation of property, plant and equipment
(Note 17(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,325 23,051 25,466
APPENDIX I ACCOUNTANT’S REPORT
– I-29 –


--- page 491 ---
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Amortisation of intangible assets (Note 18) /H1118/H1118/H1118/H1118 853 1,602 2,237
Depreciation of right-of-use assets (Note 19(c)) /H1118/H1118 50,889 57,635 70,939
Provision for impairment of property, plant and
equipment (Note 17(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,570 33 523
Provision for impairment of right-of-use assets
(Note 19(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,704 63 3,143
Auditors’ remuneration
– audit services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118507 490 501
– non-audit services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 214 –
Warehousing and logistic expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,872 26,131 29,105
Travelling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,827 13,266 11,052
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,839 13,456 12,322
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,623 18,672
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,498 65,181 63,935
Total cost of sales, selling and marketing
expenses and administrative expenses /H1118/H1118/H1118/H1118/H1118/H11181,470,627 1,642,809 1,836,020
8 OTHER (LOSSES)/GAINS, NET
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Exchange losses, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,429) (1,584) (183)
Gains/(losses) on financial asset/liability at
FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145 (479) (620)
Gains/(losses) on early termination of leases /H1118/H1118/H1118 21 844 (773)
Gains/(losses) on disposal of property, plant and
equipment (Note 31(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118445 (53) 183
Gains on disposal of assets classified as held for
sale (Note 25) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 14,795
(16,818) (1,272) 13,402
9 EMPLOYEE BENEFIT EXPENSES
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and bonuses (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118282,457 302,964 300,790
Pension costs – defined contribution plan /H1118/H1118/H1118/H1118/H111851,619 55,279 49,914
Other welfare and allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,793 3,938 6,996
(Reversal of)/provision for long service payment /H1118 (144) 1,046 431
Provision for unutilised annual leave /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118469 394 314
Share-based payment expense (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118– 13,595 –
336,194 377,216 358,445
Note: The balances include redundancy costs amounting to RMB3,921,000, RMB6,626,000 and RMB9,140,000
during the years ended 31 March 2023, 2024 and 2025, respectively.
APPENDIX I ACCOUNTANT’S REPORT
– I-30 –


--- page 492 ---
Accounting policies of employee benefit expenses
(a) Short-term obligations
Liabilities for wages and salaries are expected to be settled wholly within 12 months after the end of the period
in which the employees render the related service are recognised in respect of employees’ services up to the end of
the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The
liabilities are presented as current employee benefit obligations in the consolidated statements of financial position.
(b) Pension obligations
The subsidiaries in Hong Kong participate in a defined contribution plan in Hong Kong and pays contributions
to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis.
The subsidiaries in the PRC participate in defined contribution retirement plans and other employee social
security plans, including pension, medical, other welfare benefits, organised and administered by the relevant
governmental authorities for employees in the PRC. The Group contributes to these plans based on certain
percentages of the total salary of employees, subject to a certain ceiling, as stipulated by the relevant regulations.
The Group has no further payment obligations once the contributions have been paid. The contributions are
recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in the future payments is available.
During the Track Record Period, no forfeited contributions were utilised by the Group to reduce its
contributions for the years.
(c) Bonus
The Group recognises a liability and an expense for bonus where contractually obliged or where there is a past
practice that has created a constructive obligation.
(d) Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for
the estimated liability for annual leave as a result of services rendered by employees up to the reporting date.
Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.
(e) Termination benefits
A liability for a termination benefit is recognised at the earlier of when the Group entity can no longer
withdraw the offer of the termination benefit and when it recognises any related restructuring costs.
10 FIVE HIGHEST PAID SALARIES INFORMATION
For each of the Track Record Period, the five individuals whose emoluments were the highest in the Group
include 3, 3 and 3 directors, whose emoluments were reflected in Note 34. The emoluments paid to the remaining
2, 2 and 2 individuals, respectively, are as follows:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, wages and bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,693 4,864 4,815
Pension costs – defined contribution plan /H1118/H1118/H1118/H1118/H1118285 304 302
Share-based payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,011 –
4,978 10,179 5,117
APPENDIX I ACCOUNTANT’S REPORT
– I-31 –


--- page 493 ---
The emoluments of above individuals are within the following bands:
Number of individuals
Y ear ended 31 March
2023 2024 2025
Emoluments bands
HK$2,000,001 to HK$2,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181–1
HK$2,500,001 to HK$3,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
HK$3,000,001 to HK$3,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111
HK$8,000,000 to HK$8,500,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–1–
No incentive payment for joining the Group or compensation for loss of office was paid or payable to any of
the five highest paid individuals during the Track Record Period.
11 FINANCE INCOME/(COSTS), NET
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Finance income:
– Interest income from bank deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,468 8,063 1,692----- ----- -----
6,468 8,063 1,692
Finance costs:
– Interest expense on bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,383)
– Interest expense on lease liabilities
(Note 19(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,667) (4,034) (4,842)
(2,667) (4,034) (6,225)----- ----- -----
Finance income/(costs), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,801 4,029 (4,533)
12 INCOME TAX EXPENSE
(a) Cayman Islands income tax
The Company is incorporated in the Cayman Islands and is not subject to corporate income taxes.
(b) British Virgin Islands income tax
The Group’s subsidiaries incorporated in the British Virgin Islands are not subject to corporate income taxes.
(c) Hong Kong profits tax
Hong Kong profits tax is calculated at 16.5% of the estimated assessable profits during the Track Record
Period, except for one entity that is qualified under the two-tiered profits tax rate regime, under which the first HK$2
million of its assessable profits are taxed at 8.25% and the remaining assessable profits are taxed at 16.5%.
(d) PRC corporate income tax
PRC corporate income tax is calculated at 25% on the taxable profits of the relevant PRC entities during the
Track Record Period.
APPENDIX I ACCOUNTANT’S REPORT
– I-32 –


--- page 494 ---
The amount of income tax charged/(credited) to the consolidated statements of comprehensive income
represents:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current income tax
– Hong Kong profits tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,789 18,615 37,057
– PRC corporate income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(542) 12,618 6,560
Overprovision of tax in prior year
– PRC corporate income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,935)
Deferred income tax
(Note 20) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(418) (5,089) (8,015)
53,829 26,144 33,667
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the
tax rates applicable to profits of the entities under the Group as follows:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Profit before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,935 232,617 260,696
Tax calculated at domestic tax rates applicable
to profits in respective countries/places
of business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,507 48,710 46,607
Tax effects of:
Income not subject to tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,443) (2,161) (4,783)
Effect of two-tier tax rate regimes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(143) (150) (152)
Overprovision of tax in prior year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,935)
Expenses not deductible for tax purpose /H1118/H1118/H1118/H1118/H1118/H11186,586 8,642 7,796
Other temporary differences /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,334 (5,876) (4,598)
Previously unrecognised tax losses now recouped
to reduce current tax expense (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,930) (28,899) (12,455)
Tax effect of tax loss not recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,923 5,881 3,191
Tax concession /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5) (3) (4)
53,829 26,144 33,667
Note: In order to normalise the operating performance of the certain PRC subsidiaries in accordance with the
Group’s operational model, the Group has communicated with the PRC tax bureau in December 2023
and agreed a new transfer pricing arrangement for the intra-group transactions for these PRC
subsidiaries with a Hong Kong subsidiary starting from the year ended 31 March 2024. Subsequently,
the Group has further adopted the same transfer pricing arrangement for a PRC subsidiary with that
Hong Kong subsidiary during the year ended 31 March 2025. The new transfer pricing arrangement
allows the PRC subsidiaries to retain a targeted profit margin. Management considered this is a change
in estimation of the current tax provision based on the communication with the PRC tax bureau in
December 2023 and thus accounted for such transfer pricing arrangement prospectively during the year
when the Group adopted the new transfer pricing arrangement for the PRC subsidiaries.
APPENDIX I ACCOUNTANT’S REPORT
– I-33 –


--- page 495 ---
Accounting policies for current and deferred income tax
The tax expense for the year comprises current and deferred income tax. Tax is recognised in the profit or loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
(a) Current income tax
The current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the
reporting date in the country where the Company and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will
accept an uncertain tax treatment. The Group measures its tax balances either based on the most likely amount
or the expected value, depending on which method provides a better prediction of the resolution of the
uncertainty.
(b) Deferred income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the Historical Financial
Information. However, deferred tax liabilities are not recognised if they arise from the initial recognition of
goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary
differences. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the end of the reporting period and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in foreign operations where the Company is able to control the timing
of the reversal of the temporary differences and it is probable that the differences will not reverse in the
foreseeable future.
(c) Offsetting
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate
to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis.
13 EARNINGS PER SHARE
(a) Basic earnings per share
Basic earnings per share are calculated by dividing the profit attributable to the owners of the Company by the
weighted average number of ordinary shares in issue during the Track Record Period.
In the calculation of weighted average number of ordinary shares outstanding during the Track Record Period,
two shares issued to owners of the Company during the Reorganisation (Note 1.2) had been adjusted retrospectively
as if those shares had been issued since 1 April 2022.
APPENDIX I ACCOUNTANT’S REPORT
– I-34 –


--- page 496 ---
Y ear ended 31 March
2023 2024 2025
Profit attributable to the ordinary equity holders
of the Company (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173,106 206,473 227,029
Weighted average number of ordinary share in
issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222
Basic earnings per share (expressed in RMB’000
per share) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,553 103,237 113,515
(b) Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares.
During the Track Record Period, the Company’s dilutive potential ordinary shares include share options
granted to certain directors and employees of the Group. As the share options are conditionally exercisable upon the
completion of the capitalisation issue and the global offering of the Group, the potential issuable shares were not
included in the calculation of diluted earnings per share during the year reported. Accordingly, diluted earnings per
share is equal to basic earnings per share in the Track Record Period.
14 DIVIDENDS
No dividend has been paid or declared by the Company during the Track Record Period. Dividends during the
Track Record Period represented dividends declared by the companies now comprising the Group to the then equity
holders of the companies for each of the respective years, after elimination of intra-group dividends. The rates for
dividend and the number of shares ranking for dividends are not presented as such information is not considered
meaningful for the purpose of this report.
On 13 May 2025, the Company has declared the payment of a final dividend of RMB120,000,000 for the year
ended 31 March 2025. The amount has not been recognised as a liability in the consolidated financial statements, but
will be reflected as an appropriation of equity for the year ending 31 March 2026.
15 SHARE-BASED PAYMENTS
The Group has approved and adopted a Pre-IPO share option plan (“Pre-IPO ESOP”) under Eternal BVI
pursuant to a shareholder’s resolution passed in 2019. Share options were granted in 1 December 2019 and 31 March
2024 to attract, retain and motivate the grantees to strive for future developments and expansion of the Group.
On 1 December 2019, share options of 17,294,487 were granted to a total of 10 grantees, which include certain
directors and employees of the Group with no vesting condition. The exercise price of the share option is HK$0.1
per share. The vested share options are exercisable upon listing and 40% of the exercised shares are only saleable
one month after the listing of the Group, 30% are saleable 1 year after the listing of the Group and the remaining
are saleable 2 years after the listing of the Group.
On 31 March 2024, share options of 8,898,690 was further granted to a total of 8 grantees, which include
certain employees of the Group with no vesting condition. The exercise price of the share option is HK$0.1 per share.
The timeline for these share options to be exercised are similar to the share options granted in 2019.
The grantee needs to inform the Company 28 days before they exercise their share options. The Group does
not have a legal or constructive obligation to repurchase or settle the options in cash.
APPENDIX I ACCOUNTANT’S REPORT
– I-35 –


--- page 497 ---
The fair values of services received in return for share options granted are measured by reference to the fair
value of share options granted. The range of fair value of options granted determined by using the Binomial model
and significant inputs into the model were as follows:
Share options as at grant date
1 December 2019 31 March 2024
Fair value of Pre-IPO ESOP granted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,835,000 13,595,000
Expected volatility (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850.07% 52.13%
Expected option life (years) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 10
Dividend yield /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180% 0%
Risk-free rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.82% 3.70%
Note: Expected volatility is assumed to be based on historical volatility of comparable companies.
The variables and assumptions used in estimating the fair value of the share options were the directors’ best
estimates. Change in subjective input assumptions can materially affect the fair value.
The number of share options outstanding as at 31 March 2023, 2024 and 2025 is 17,294,487, 26,193,177 and
26,193,177, respectively. There are no exercise, lapse or forfeiture of the share options in the Track Record Period.
During the years ended 31 March 2023, 2024 and 2025, share-based payment expense of nil, RMB13,595,000
and nil were recognised in profit or loss, respectively.
On 18 June 2024, the Company adopted a Pre-IPO share option scheme (“Cayman Option Scheme”) in
exchange for the surrender of the Pre-IPO ESOP under Eternal BVI. The options grantees previously granted under
the Pre-IPO ESOP were granted the options under Cayman Option Scheme on a one-on-one basis for the surrender
and cancellation of the Pre-IPO ESOP .
Accounting policies for share-based payments
The Group operates an equity-settled share-based compensation plan (i.e. share option scheme), under which
the Group receives services from employees, as consideration for equity instruments of the Company. Share options
granted to the grantees of the Group are measured at the grant date based on the fair value of equity instruments and
are recognised as employee benefit expenses over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied, with a corresponding increase in equity as “share-based
compensation”.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected
to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original
estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The total amount to be expensed is determined by reference to the fair value of the options granted:
 including any market performance conditions (e.g. the entity’s share price),
 excluding the impact of any service and non-market performance vesting conditions (e.g. profitability
and remaining as an employee of the entity over a specified time period), and
 including the impact of any non-vesting conditions (e.g. the requirement for employees to save or hold
shares for a specific period of time).
APPENDIX I ACCOUNTANT’S REPORT
– I-36 –


--- page 498 ---
16 INVESTMENT IN A JOINT VENTURE
Y ear ended 31 March
2024 2025
RMB’000 RMB’000
Opening carrying value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,855
Addition of unquoted shares – at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,607 7,233
Share of loss of a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,964) (2,989)
Share of results of a joint venture – currency translation
difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212 6----- -----
Closing carrying value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,855 7,105
The Group and the joint venture partner were mutually committed to further invest in the joint venture
amounting to HK$4,315,000 (equivalent to approximately RMB4,017,000) by 31 March 2026. There are no
contingent liabilities in respect of the joint venture as at 31 March 2024 and 2025.
(a) Amount due from a joint venture
As at 31 March
2024 2025
RMB’000 RMB’000
Amount due from a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,514 4,161
As at 31 March 2024 and 2025, the balances were trading in nature, unsecured, interest-free and repayable on
demand. The carrying values of the balances approximate their fair value. The amount due from a joint venture was
denominated in HK$ and RMB. The balances due from a joint venture will not be fully settled prior to Listing.
The particulars of the joint venture is summarised as below.
Proportion of ownership interest
and voting rights
As at 31 March
Name of entity
Country/place and
date of incorporation/
establishment Principal activities
Class of
share held 2024 2025
B&E China
Holdings
Limited /H1118/H1118/H1118
Hong Kong, 8 May
2023
Trading and
retailing of
skincare
products
Ordinary 50% 50%
APPENDIX I ACCOUNTANT’S REPORT
– I-37 –


--- page 499 ---
17 PROPERTY, PLANT AND EQUIPMENT
Leasehold
improvements Buildings
Office
equipment
Air-
conditioning
plant
Computer
equipment
Motor
vehicles
Furniture
and fixtures Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 April 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,187 2,326 3,601 1,372 26,789 5,901 3,363 75,539
Accumulated
depreciation /H1118/H1118/H1118/H1118/H1118(20,933) (1,200) (3,478) (597) (21,677) (3,355) (2,869) (54,109)
Net book amount /H1118/H1118/H111811,254 1,126 123 775 5,112 2,546 494 21,430
Y ear ended
31 March 2023
Opening net book
amount /H1118/H1118/H1118/H1118/H1118/H1118/H111811,254 1,126 123 775 5,112 2,546 494 21,430
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H11189,249 – 87 174 2,220 1,213 268 13,211
Impairment /H1118/H1118/H1118/H1118/H1118/H1118(2,570) – – –––– (2,570)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – (7) (147) – (154)
Depreciation charge
(Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,455) (62) (61) (203) (2,913) (1,473) (158) (16,325)
Exchange difference /H1118 125 103 5 59 26 229 – 547
Closing net book
amount /H1118/H1118/H1118/H1118/H1118/H1118/H11186,603 1,167 154 805 4,438 2,368 604 16,139
At 31 March 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,135 2,540 3,915 1,658 27,194 6,331 3,802 87,575
Accumulated
depreciation /H1118/H1118/H1118/H1118(35,532) (1,373) (3,761) (853) (22,756) (3,963) (3,198) (71,436)
Net book amount /H1118/H1118/H11186,603 1,167 154 805 4,438 2,368 604 16,139
APPENDIX I ACCOUNTANT’S REPORT
– I-38 –


--- page 500 ---
Leasehold
improvements Buildings
Office
equipment
Air-
conditioning
plant
Computer
equipment
Motor
vehicles
Furniture
and fixtures Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended
31 March 2024
Opening net book
amount /H1118/H1118/H1118/H1118/H1118/H1118/H11186,603 1,167 154 805 4,438 2,368 604 16,139
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H111824,860 – 205 64 1,581 859 18 27,587
Assets classified as
held for sale
(Note 25) /H1118/H1118/H1118/H1118/H1118/H1118– (1,143) – –––– (1,143)
Impairment /H1118/H1118/H1118/H1118/H1118/H1118(33) – – –––– (33)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(196) – (4) (3) (13) – – (216)
Depreciation charge
(Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,057) (65) (67) (233) (2,101) (1,355) (173) (23,051)
Exchange difference /H1118 94 41 3 26 20 94 – 278
Closing net book
amount /H1118/H1118/H1118/H1118/H1118/H1118/H111812,271 – 291 659 3,925 1,966 449 19,561
At 31 March 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,729 – 3,859 1,775 28,804 6,542 3,904 111,613
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118(54,458) – (3,568) (1,116) (24,879) (4,576) (3,455) (92,052)
Net book amount /H1118/H1118/H111812,271 – 291 659 3,925 1,966 449 19,561
Leasehold
improvements
Office
equipment
Air-
conditioning
plant
Computer
equipment
Motor
vehicles
Furniture
and fixtures Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended
31 March 2025
Opening net book amount /H1118/H1118/H1118/H1118/H111812,271 291 659 3,925 1,966 449 19,561
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,840 27 140 1,486 700 82 26,275
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(523) – –––– (523)
Disposal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,478) – (22) (238) – (57) (2,795)
Depreciation charge (Note 7) /H1118/H1118/H1118(21,805) (73) (175) (1,941) (1,304) (168) (25,466)
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 3 9 20 31 – 144
Closing net book amount /H1118/H1118/H1118/H1118/H111811,386 248 611 3,252 1,393 306 17,196
At 31 March 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,379 3,638 1,901 28,906 6,550 3,932 132,306
Accumulated depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(75,993) (3,390) (1,290) (25,654) (5,157) (3,626) (115,110)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,386 248 611 3,252 1,393 306 17,196
(a) Details of the property, plant and equipment pledged to the Group’s banking facilities are included in Note 30.
(b) The Group regards each individual shop and counter as a separately identifiable cash-generating unit. Due to
the under-performance of certain shops and counters against the budget or having loss-making performance
during year, management carried out an impairment assessment for property, plant and equipment and
right-of-use assets of those shops and counters whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable.
APPENDIX I ACCOUNTANT’S REPORT
– I-39 –


--- page 501 ---
The carrying amount of the shops and counters are written down to its recoverable amount (the higher of fair
value less costs to sell or value-in-use) if the asset’s carrying amount is greater than its estimated recoverable
amount. The estimates of the recoverable amounts were based on value-in-use calculations using discounted
cash flow projections based on the financial forecasts approved by management covering the remaining tenure
of the lease, with major assumptions such as revenue growth rate and pre-tax discount rate. As a result of the
impairment assessment, impairment loss of property, plant and equipment amounting to RMB2,570,000,
RMB33,000 and RMB523,000 and impairment loss of right-of-use assets amounting to RMB4,704,000,
RMB63,000 and RMB3,143,000 are recognised on certain shops and counters of the Group during the years
ended 31 March 2023, 2024 and 2025. For the other shops and counters, the recoverable amounts exceed the
asset’s carrying amounts of the shops and counters with sufficient headroom.
Key inputs to the determination of the recoverable amount includes average revenue growth and pre-tax
discount rate. As at 31 March 2023, 2024 and 2025, the pre-tax discount rates used to determine the
recoverable amounts for Hong Kong and the PRC are 10%-12%, 11%-12% and 12%-14%, respectively.
(c) Depreciation charges of RMB11,455,000, RMB19,057,000 and RMB21,805,000 have been included in selling
and marketing expenses and RMB4,870,000, RMB3,995,000 and RMB3,661,000 have been included in
administrative expenses for the years ended 31 March 2023, 2024 and 2025, respectively.
Accounting policies for property, plant and equipment
Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost
to their residual values, where appropriate, over their estimated useful lives, as follows:
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Over 3 years or remaining
period of the lease,
whichever is shorter
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182-3%
Air-conditioning plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810%
Furniture and fixtures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820%
Office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820%
Computer equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833%
The Group’s property, plant and equipment are stated at historical cost less accumulated depreciation and
impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount (Note 36.6).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in profit or loss. When revalued assets are sold, it is group policy to transfer any amounts included in other reserves
in respect of those assets to retained earnings.
APPENDIX I ACCOUNTANT’S REPORT
– I-40 –


--- page 502 ---
18 INTANGIBLE ASSETS
Club membership Computer software Total
RMB’000 RMB’000 RMB’000
At 1 April 2022
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209 5,577 5,786
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (964) (964)
Net book amount 209 4,613 4,822
Y ear ended 31 March 2023
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209 4,613 4,822
Amortisation charged (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (853) (853)
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 – 19
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228 3,760 3,988
At 31 March 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228 5,577 5,805
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,817) (1,817)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228 3,760 3,988
Y ear ended 31 March 2024
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118228 3,760 3,988
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,290 1,290
Amortisation charged (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,602) (1,602)
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189–9
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 3,448 3,685
At 31 March 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 6,867 7,104
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,419) (3,419)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 3,448 3,685
Y ear ended 31 March 2025
Opening net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118237 3,448 3,685
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,308 7,308
Amortisation charged (Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (2,237) (2,237)
Exchange difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185–5
Closing net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242 8,519 8,761
At 31 March 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242 12,785 13,027
Accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,266) (4,266)
Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242 8,519 8,761
APPENDIX I ACCOUNTANT’S REPORT
– I-41 –


--- page 503 ---
During the Track Record Period, the Group externally acquired the computer software from independent third
parties.
Amortisation on computer software is recognised as administrative expenses for the Track Record Period.
Accounting policies for intangible assets
Intangible assets represent a club membership that is stated at cost less impairment losses, if any, and computer
software with useful life of 4 years that is stated at cost less accumulated amortisation.
19 LEASES
(a) Right-of-use assets
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Offices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,202 12,498 19,877
Warehouses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,907 8,433 1,934
Shops and counters /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,477 59,857 49,508
Copy machines /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,398 1,142 902
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,334 – –
66,318 81,930 72,221
Additions to the right-of-use assets were RMB54,330,000, RMB75,958,000 and RMB72,761,000 for the years
ended 31 March 2023, 2024 and 2025, respectively. During the year ended 31 March 2024, right-of-use assets of
approximately RMB1,338,000 was reclassified into assets classified as held for sale (Note 25).
Details of the right-of-use assets pledged to the Group’s banking facilities are included in Note 30.
(b) Lease liabilities
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,236 52,520 58,507
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,769 33,074 20,416
73,005 85,594 78,923
The total cash outflows for leases including payments of short-term leases, variable lease, leases liabilities and
payments of interest on leases for the years ended 31 March 2023, 2024 and 2025 were approximately
RMB113,786,000, RMB146,281,000 and RMB138,360,000, respectively.
APPENDIX I ACCOUNTANT’S REPORT
– I-42 –


--- page 504 ---
(c) Amounts recognised in the consolidated statements of comprehensive income
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Depreciation of right-of-use assets (Note 7) /H1118/H1118/H1118/H111850,889 57,635 70,939
Provision for impairment of right-of-use assets
(Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,704 63 3,143
Interest expense on lease liabilities (Note 11) /H1118/H1118/H1118 2,667 4,034 4,842
Expenses relating to variable lease payments
(included in selling and marketing expenses)
(Note 7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,570 51,700 41,829
Expenses relating to short-term leases (included
in selling and marketing expenses) (Note 7) /H1118/H1118 26,338 29,318 20,845
Some of the property leases which the Group is the lessee contain variable lease payment terms that are linked
to sales generated from the leased shops and counters. V ariable lease terms are used to link lease payments to store
cash flows and reduce fixed cost. The variable lease payments depend on sales and consequently on the overall
economic development over the next few years.
For details of impairment losses on right-of-use assets, refer to Note 17(b).
(d) The Group’s leasing activities and how these are accounted for
The Group leases various offices, warehouses, shops, counters, copy machines and leasehold land. Rental
contracts are typically made for fixed periods of 1 year to 3 years but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are held
by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognised as right-of-use assets and corresponding liabilities at the date at which the leased asset
is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
 fixed payments (including in-substance fixed payments), less any lease incentives receivable; and
 payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use assets in a similar economic
environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Group:
 where possible, uses recent third-party financing received by the individual lessee as a starting point,
adjusted to reflect changes in financing conditions since third party financing was received;
 uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held
by the Group, which does not have recent third party financing; and
 makes adjustments specific to the lease, e.g., term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability
for each period.
APPENDIX I ACCOUNTANT’S REPORT
– I-43 –


--- page 505 ---
Right-of-use assets are measured at cost comprising the following:
 the amount of the initial measurement of lease liability;
 any lease payments made at or before the commencement date less any lease incentives received;
 any initial direct costs; and
 restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on
a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use assets are
depreciated over the underlying asset’s useful life.
Payments associated with short-term leases are recognised on a straight-line basis as an expense in profit or
loss. Short-term leases are leases with a lease term of 12 months or less.
(e) Variable lease payments
Some property leases contain variable payment terms that are linked to sales generated from a store. For
individual stores, the lease payments are on the basis of variable payment terms with percentages ranging from 15%
to 35% of sales. V ariable lease payments that depend on sales are recognised in consolidated statements of
comprehensive income in the period in which the condition that triggers those payments occurs.
(f) Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the
Group. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s
operations. The majority of extension and termination options held are exercisable only by the Group and not by the
respective lessor.
20 Deferred income tax
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
income tax recoverable against current income tax liabilities and when the deferred income tax assets and liabilities
relate to income tax levied by the same taxation authority on either the taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis. The offset amounts are as follows:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Deferred income tax assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,025 17,142 25,189
The net movement on the deferred income tax asset is as follows:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,575 12,025 17,142
Credited to consolidated statements of
comprehensive income
(Note 12) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118418 5,089 8,015
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 28 32
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,025 17,142 25,189
APPENDIX I ACCOUNTANT’S REPORT
– I-44 –


--- page 506 ---
The movement in deferred income tax assets and liabilities, without taking into consideration the offsetting of
balances within the same tax jurisdiction, is as follows:
Deferred income tax assets
Decelerated
tax
depreciation Tax losses
Unrealised
profit on
inventories
Lease
liabilities
Provisions
and others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 April 2022 /H1118 – – 6,929 10,449 4,491 21,869
(Charged)/credited to
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,189) (3,855) 357 (4,687)
Exchange realignment /H1118/H1118 –––– 4 6 4 6
Balance at 31 March
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,740 6,594 4,894 17,228
Balance at 1 April 2023 /H1118 – – 5,740 6,594 4,894 17,228
Credited/(charged) to
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118495 4,434 (875) (602) 1,951 5,403
Exchange realignment /H1118/H1118 3––– 2 6 2 9
Balance at 31 March
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498 4,434 4,865 5,992 6,871 22,660
Balance at 1 April 2024 /H1118 498 4,434 4,865 5,992 6,871 22,660
Credited/(charged) to
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118133 4,104 2,465 (163) 1,244 7,783
Exchange realignment /H1118/H1118 1 1––– 2 1 3 2
Balance at
31 March 2025 /H1118/H1118/H1118/H1118/H1118642 8,538 7,330 5,829 8,136 30,475
Deferred income tax liabilities
Accelerated tax
depreciation Right of use assets Total
RMB’000 RMB’000 RMB’000
Balance at 1 April 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118173 10,121 10,294
Credited to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(160) (4,945) (5,105)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – 14
Balance at 31 March 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 5,176 5,203
Balance at 1 April 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 5,176 5,203
(Credited)/charged to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28) 342 314
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181–1
Balance at 31 March 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,518 5,518
Balance at 1 April 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,518 5,518
Credited to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (232) (232)
Balance at 31 March 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,286 5,286
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of
the related tax benefit through future taxable profits is probable. The Group did not recognise deferred income tax
assets in the PRC of RMB22,670,000 as at 31 March 2023, RMB4,269,000 at 31 March 2024 and RMB2,659,000 at
31 March 2025 in respect of the tax losses in the amount of RMB90,681,000, RMB17,077,000 and RMB10,636,000,
respectively, which will expire in one to five years for offsetting against future taxable profits of the entity in which
the losses arose.
According to the new CIT Law, starting from 1 January 2008, a 10% withholding tax will be levied on the
immediate holding company established out of the PRC when their PRC subsidiaries declare dividends out of their
profits earned after 1 January 2008.
APPENDIX I ACCOUNTANT’S REPORT
– I-45 –


--- page 507 ---
During the Track Record Period, deferred income tax liabilities of nil, nil and nil have not been recognised for
the withholding tax that would be payable on the unremitted earnings of subsidiaries in the PRC as at 31 March 2023,
2024 and 2025, in the amount of nil, nil and nil, respectively.
21 Financial instruments by categories
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Assets as per consolidated statements of
financial position
Financial assets measured at amortised cost
– Trade receivables (Note 22(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,959 175,279 250,399
– Other receivables and deposits (excluding
non-financial assets) (Note 22(b)) /H1118/H1118/H1118/H1118/H111862,826 87,221 47,938
– Amounts due from related companies
(Note 33(f)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,984 51,155 43,006
– Amount due from a shareholder
(Note 33(e)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110 271 –
– Amount due from a joint venture
(Note 16) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,514 4,161
– Fixed deposits (Note 23) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,388 – –
– Cash and cash equivalents
(Note 23) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,462 150,929 255,998
609,729 478,369 601,502
Financial asset at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 6 3––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118610,192 478,369 601,502
Liabilities as per consolidated statements of
financial position
Financial liabilities measured at amortised cost
– Trade payables
(Note 27) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,498 93,223 119,505
– Accruals and other payables (excluding non-
financial liabilities) (Note 28) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,327 123,161 70,649
– Amount due to a director
(Note 33(d)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,693 186,951 116,281
– Amounts due to related companies (Note
33(f)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,941 7,045 –
– Bank borrowings (Note 30) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 33,183
– Lease liabilities (Note 19(b)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,005 85,594 78,923
446,464 495,974 418,541
Financial liability at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 628
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118446,464 495,974 419,169
APPENDIX I ACCOUNTANT’S REPORT
– I-46 –


--- page 508 ---
22 TRADE AND OTHER RECEIV ABLES
(a) Trade receivables
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,243 175,726 251,062
Less: Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(284) (447) (663)
Trade receivables, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,959 175,279 250,399
The ageing analysis of the trade receivables based on invoice date is as follows:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,001 107,895 199,076
31 – 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,668 48,784 39,778
Over 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,574 19,047 12,208
157,243 175,726 251,062
Less: Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(284) (447) (663)
Trade receivables, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,959 175,279 250,399
The carrying values of trade receivables approximate their fair values. The Group generally allows an average
credit period of 30 to 90 days to its trade customers.
The carrying amounts of trade receivables are denominated in the following currencies:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
HK$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,112 57,178 65,984
US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,333 16,056 65,450
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,514 102,045 118,965
156,959 175,279 250,399
APPENDIX I ACCOUNTANT’S REPORT
– I-47 –


--- page 509 ---
(b) Deposits, prepayments and other receivables – Group and Company
The Group
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments for inventories and other operating
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,903 23,317 21,528
Prepayments for non-financial assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,054 4,207 2,001
Prepayment for listing expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,357 6,608
Advance to third parties (note i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,061 28,284 –
Other receivables (note ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,202 32,824 22,203
V A T tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,402 8,183 14,941
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,563 26,113 25,735
91,185 124,285 93,016------ ------ ------
Less: Non-current deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,400) (6,217) (7,398)
Less: Non-current prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,054) (4,207) (2,001)
Less: Advance to third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,061) – –
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,670 113,861 83,617
Notes:
(i) As at 31 March 2023 and 2024, balances of advance to third parties are unsecured, interest-free and
repayable on demand. The carrying values of the balances approximate to their fair value. The balances
are denominated in HK$ and RMB. As at 31 March 2023, the directors of the Company do not expect
the balance of RMB28,061,000 to be repaid by the third parties within 12 months of the reporting period
and classified the balances as non-current assets.
(ii) Other receivables
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,007 40,940 29,498
Less: Loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,805) (8,116) (7,295)
Other receivables, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,202 32,824 22,203
The carrying amounts of deposits, prepayments and other receivables are denominated in the following
currencies:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
HK$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,912 28,701 21,408
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,716 74,394 50,921
US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,820 3,977 10,858
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,628 17,099 9,829
Japanese Y en (“JPY”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109 114 –
91,185 124,285 93,016
The carrying amounts of deposits and other receivables approximate to their fair values.
APPENDIX I ACCOUNTANT’S REPORT
– I-48 –


--- page 510 ---
The Company
As at 31 March
2024 2025
RMB’000 RMB’000
Prepayment for listing expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,357 5,942
23 CASH AND CASH EQUIV ALENTS AND FIXED DEPOSITS
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,462 150,929 255,998
Fixed deposits (maturity date over
3 months) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,388 – –
333,850 150,929 255,998
Maximum exposure to credit risk /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,819 150,895 255,976
Cash and cash equivalents and fixed deposits approximated their fair values as at 31 March 2023, 2024 and
2025 are denominated in the following currencies:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,570 26,273 32,763
HK$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,125 44,825 55,740
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,055 71,865 157,495
GBP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,850 166 173
Australian dollar /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,028 – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222 7,800 9,827
333,850 150,929 255,998
The conversion of cash and bank balances denominated in RMB into foreign currencies and remittance of these
deposits or cash out of the PRC are subject to the relevant rules and regulations of foreign exchange promulgated by
the PRC government. As at 31 March 2023, 2024 and 2025, the Group’s cash at banks and in hand of
RMB29,476,000, RMB40,183,000 and RMB52,864,000, respectively, were deposited at banks in the PRC.
24 INVENTORIES
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Finished goods – at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,763 379,355 421,459
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,764 46,977 54,878
Less: Stock provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(28,949) (36,023) (42,278)
Inventories, net of provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,578 390,309 434,059
APPENDIX I ACCOUNTANT’S REPORT
– I-49 –


--- page 511 ---
The cost of inventories recognised as expenses and included in cost of sales amounting to approximately
RMB801,337,000, RMB891,178,000 and RMB1,005,984 for the years ended 31 March 2023, 2024 and 2025,
respectively.
Provision for impairment of inventories of RMB3,767,000, RMB6,312,000, and RMB5,869,000 were
recognised for the years ended 31 March 2023, 2024 and 2025, respectively, in the consolidated statements of
comprehensive income as cost of sales.
Accounting policies for inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted
average method. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs necessary to make the sale.
25 ASSETS CLASSIFIED AS HELD FOR SALE
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Assets classified as held for sale /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,481 –
In March 2024, Eternal Far East entered into a provisional sale and purchase agreement with Land Pacific
Investment Limited, an entity controlled by Mr. Lau, pursuant to which Eternal Far East agrees to sell the land and
building located in Hong Kong with carrying amount of RMB1,338,000 and RMB1,143,000, respectively at the
consideration of HK$18,800,000 (equivalent to approximately RMB17,276,000). The consideration is determined
based on the market value of the land and building. The transaction has been completed on 30 May 2024 and the
consideration has been settled as at the same date. Upon the completion, a gain on disposal of assets classified as held
for sale of RMB14,795,000 is recognised for the year ended 31 March 2025.
Details of the assets classified as held for sale pledged to the Group’s banking facilities are included in
Note 30.
26 SHARE CAPITAL
Number of ordinary
shares
Equivalent nominal
value of ordinary share
RMB’000
Authorised:
Ordinary shares of HK$0.001 each /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118380,000,000 347
Issued:
At 9 January 2024 (date of incorporation) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
Issue of ordinary share on 9 January 2024 pursuant to the
Reorganisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181*
As at 31 March 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181*
Issue of ordinary share on 18 June 2024 pursuant to the
Reorganisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181*
As at 31 March 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182*
* The amounts as at 31 March 2024 and 2025 are below RMB1,000.
APPENDIX I ACCOUNTANT’S REPORT
– I-50 –


--- page 512 ---
27 TRADE PAYABLES
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,498 93,223 119,505
The ageing analysis of the trade payables based on invoice date is as follows:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 30 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,684 54,046 59,060
31 – 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,979 32,556 31,565
Over 90 days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,835 6,621 28,880
113,498 93,223 119,505
The carrying amounts of trade payables are denominated in the following currencies:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,624 51,534 94,279
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,271 13,456 16,341
US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,657 21,079 1,654
JPY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,261 4,058 5,960
HK$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,685 3,096 1,271
113,498 93,223 119,505
28 ACCRUALS AND OTHER PAYABLES – GROUP AND COMPANY
The Group
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current
Accruals for advertising and promotion /H1118/H1118/H1118/H1118/H1118/H1118/H111879,456 83,837 56,076
Accrued staff cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,264 35,894 34,555
Advances received from third
parties (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,000 26,500 –
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,871 10,588 9,843
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,857 9,682 13,537
Accrual for listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,236 4,730
177,448 168,737 118,741
Note: As at 31 March 2023 and 2024, advance received from third parties balance are unsecured, interest-free
and repayable on demand. The carrying values of the balance approximate to their fair value. The
balances are denominated in HK$ and RMB.
APPENDIX I ACCOUNTANT’S REPORT
– I-51 –


--- page 513 ---
Other payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
The carrying amounts of accruals and other payables are denominated in the following currencies:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
HK$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,116 14,269 9,247
US$ /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,950 2,562 2,796
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,584 19,293 1,452
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118140,796 132,608 105,246
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825–
177,448 168,737 118,741
The Company
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Accrual for listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,236 4,730
29 PROVISIONS
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current
Provision for long service payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118780 1,658 2,127
780 1,658 2,127---- ---- -----Current
Provision of unutilised annual leave /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,076 6,604 6,991
Other provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,642 3,232 3,153
8,718 9,836 10,144---- ---- -----
9,498 11,494 12,271
30 BANK BORROWINGS AND BANKING FACILITIES
As at 31 March
2025
RMB’000
Bank borrowings with repayment on demand clauses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,183
APPENDIX I ACCOUNTANT’S REPORT
– I-52 –


--- page 514 ---
As at 31 March 2025, the Group’s bank borrowings were repayable as follows:
As at 31 March
2025
RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,758
Between 1 and 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,451
Between 2 and 5 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,974
33,183
All the borrowings as at 31 March 2025 are denominated in HK$. The weighted average effective interest rate
per annum for the years ended 31 March 2025 was 5.47%.
The banking facilities made available to subsidiaries of the Group are as follows:
As at 31 March
2023 2024 2025
Available
facilities
Facilities
utilised
Available
facilities
Facilities
utilised
Available
facilities
Facilities
utilised
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Banking facilities granted to a subsidiary of
the Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,947 – 82,192 – 232,775 45,587
The Group’s banking facilities as at 31 March 2023, 2024 and 2025 are secured and/or guaranteed by:
(i) unlimited personal guarantees from a controlling shareholder as at 31 March 2023, 2024 and 2025. Such
guarantee will be substituted with corporate guarantee by the Company upon the Listing.
(ii) properties held by controlling shareholders and their son as at 31 March 2023 and 2024. Such guarantee
was released on 16 May 2024.
(iii) properties from a subsidiary of the Company as at 31 March 2023 and 2024. As at 31 March 2023, the
pledged properties, plant and equipment amounted to approximately RMB1,167,000, right-of-use assets
amounted to approximately RMB1,334,000, respectively. As at 31 March 2024, the pledged assets
classified as held for sale amounted to approximately RMB2,481,000. Such guarantee was released on
16 May 2024.
(iv) properties from related parties of the Company as at 31 March 2023 and 2024. Such guarantee was
released on 16 May 2024.
The bank borrowings have certain covenants and undertakings over Eternal Far East. These financial covenants
include:
 Total liabilities and contingent liabilities should not exceed two times the tangible net worth of Eternal
Far East.
 Net gearing ratio, at all times, should not exceed 0.3 times.
The Group was in compliance of these covenants and undertakings during the Track Record Period.
APPENDIX I ACCOUNTANT’S REPORT
– I-53 –


--- page 515 ---
Accounting policies for bank borrowings and borrowing costs
Bank borrowings are initially recognised at fair value, net of transaction costs incurred. Bank borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over the period of the bank borrowings using the effective interest
method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent
that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the
draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to
which it relates.
Bank borrowings are removed from the statement of financial position when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as finance costs.
Bank borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
Other borrowing costs are expensed in the period in which they are incurred.
31 CASH FLOWS INFORMATION
(a) Cash generated from operations:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Profit before income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118226,935 232,617 260,696
Adjustments for:
Share of loss of a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,964 2,989
Depreciation of property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,325 23,051 25,466
Provision for impairment of property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H11182,570 33 523
Amortisation of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118853 1,602 2,237
Depreciation of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,889 57,635 70,939
Provision for impairment of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,704 63 3,143
Finance income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,468) (8,063) (1,692)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,667 4,034 6,225
(Gains)/losses on financial asset/liability at FVPL /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(145) 479 620
(Gains)/losses on disposal on property, plant and equipment /H1118/H1118/H1118/H1118/H1118(445) 53 (183)
(Gains)/losses on early termination of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21) (844) 773
Gains on disposal of assets classified as
held for sale /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (14,795)
Provision for/(reversal of) impairment of
financial assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118622 474 (605)
Provision for impairment of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,767 6,312 5,869
Provision for unutilised annual leave /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118469 394 314
(Reversal of)/provision for long service payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(144) 1,046 431
Share-based payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,595 –
Expenses relating to short-term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,794 12,859 432
Operating profit before changes in working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118316,372 348,304 363,382
Changes in working capital:
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,407 (38,283) (49,118)
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,505) (15,684) (73,405)
Deposits, prepayments and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,871 (29,714) 35,430
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(115,993) (22,736) 24,388
Accruals and other payables and provisions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,608) (9,543) (50,334)
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,474 (7,606) (3,031)
Amount due from a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (13,430) 9,337
Net cash generated from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,018 211,308 256,649
APPENDIX I ACCOUNTANT’S REPORT
– I-54 –


--- page 516 ---
(b) In the consolidated statements of cash flows, proceed from disposals of property, plant, and equipment
comprise:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Proceeds from disposal of property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118599 163 2,978
Less: Net book amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(154) (216) (2,795)
Gains/(losses) on disposal of property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118445 (53) 183
(c) Cash flow information — financing activities
The movements of liabilities from financing activities for each of the years ended 31 March 2023, 2024 and
2025:
Other asset Liabilities from financing activities
Cash and cash
equivalents
Amounts due to
related parties
Amount due
(to)/ from a
shareholder
Amount due
to a director
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 April 2022 /H1118/H1118/H1118307,393 (56,543) (1,506) (41,353) (77,227) 130,764
Foreign exchange
adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H111843,838 (4,746) 2 (1,790) (2,829) 34,475
Cash flows (including
dividends paid) /H1118/H1118/H1118/H1118(30,769) 5,162 1,614 155,871 52,878 184,756
Non-cash items:
Addition of leases /H1118/H1118 – – – – (54,330) (54,330)
Dividend declared /H1118/H1118/H1118/H1118– – – (189,421) – (189,421)
Early termination
of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 11,170 11,170
Interest expense /H1118/H1118/H1118/H1118/H1118– – – – (2,667) (2,667)
Non-cash rental
expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,814) – – – (5,814)
As at 31 March 2023 /H1118 320,462 (61,941) 110 (76,693) (73,005) 108,933
Other asset Liabilities from financing activities
Cash and cash
equivalents
Amounts due
to related
companies
Amount due
(to)/ from a
shareholder
Amount due
to a director
Lease
liabilities Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 April 2023 /H1118/H1118/H1118320,462 (61,941) 110 (76,693) (73,005) 108,933
Foreign exchange
adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H111820,875 (628) 5 (3,817) (1,741) 14,694
Cash flows (including
dividends paid) /H1118/H1118/H1118/H1118(190,408) 61,017 156 63,002 65,263 (970)
Non-cash movements:
Addition of leases /H1118/H1118/H1118/H1118– – – – (75,958) (75,958)
Early termination
of leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 3,881 3,881
Dividend declared /H1118/H1118/H1118/H1118– – – (169,443) – (169,443)
Interest expenses /H1118/H1118/H1118/H1118/H1118– – – – (4,034) (4,034)
Non-cash rental
expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (5,493) – – – (5,493)
As at 31 March 2024 /H1118 150,929 (7,045) 271 (186,951) (85,594) (128,390)
APPENDIX I ACCOUNTANT’S REPORT
– I-55 –


--- page 517 ---
Other asset Liabilities from financing activities
Cash and
cash
equivalents
Amounts due
to related
parties
Amount due
from a
shareholder
Amount due
to a director
Lease
liabilities
Bank
borrowings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 1 April 2024 /H1118/H1118/H1118/H1118150,929 (7,045) 271 (186,951) (85,594) – (128,390)
Foreign exchange
adjustments /H1118/H1118/H1118/H1118/H1118/H1118/H11189,667 (51) 2 (5,059) (946) (399) 3,222
Cash flows (including
dividends paid) /H1118/H1118/H1118/H1118/H111895,402 7,528 (273) 75,729 75,686 (31,401) 222,663
Non-cash movements:
Addition of leases /H1118/H1118/H1118/H1118/H1118– – – – (72,761) – (72,761)
Early termination of
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 9,534 – 9,534
Interest expenses /H1118/H1118/H1118/H1118/H1118– – – – (4,842) (1,383) (6,225)
Non-cash rental expense /H1118 – (432) – – – – (432)
As at 31 March 2025 /H1118/H1118255,998 – – (116,281) (78,923) (33,183) 27,611
(d) Major non-cash transactions:
(i) During the year ended 31 March 2023, 2024 and 2025, the group companies declared interim dividend
of RMB189,421,000, RMB314,338,000 and nil to its then shareholders. Upon the shareholders’
resolutions, Mr. Lau Kui Wing received dividend on behalf of the remaining shareholders of the group
companies.
(ii) During the year ended 31 March 2023, 2024 and 2025, the Company agreed to set off the rent payable
of RMB7,980,000, RMB7,366,000 and nil through amounts due from related parties.
32 COMMITMENTS
Short-term lease commitments
The Group had future aggregate minimum lease payments under short-term, non-cancellable leases in relations
to rental for office premises and warehouses as follows:
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
No later than 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,842 14,988 15,700
33 RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, control the other party
or exercise significant influence over the other party in making financial and operation decisions. Parties are also
considered to be related if they are subject to common control. Members of key management and their close family
members of the Group are also considered as related parties.
APPENDIX I ACCOUNTANT’S REPORT
– I-56 –


--- page 518 ---
(a) The directors of the Company are of the view that the following parties/companies were related parties
that had transactions or balances with the Group during the Track Record Period:
Name of related parties Relationship with the Company
Mr. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Chairman, executive director and controlling
shareholder
Mrs. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Mr. Lau’s spouse and controlling shareholder
Mr. Lau Andy Wing Hang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Mr. Lau’s son
Ms. Lau Wing Yin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Mr. Lau’s daughter and director
Glasworld International Limited
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau
Gold Vision Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau Andy Wing Hang
Land Pacific Investment Limited
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau
Hainan Xiayi Industrial Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau
Shanghai Xiayi International Trading Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau
Zhejiang Zhitong Trade Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau
Eternal Beauty International Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mr. Lau
Forever Concept Development Limited /H1118/H1118/H1118/H1118/H1118/H1118Controlled by Mrs. Lau
B&E China Holdings Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Joint venture
The English names of certain related parties represent the best effort by the directors of the Company
in translating their Chinese names as they do not have official English names.
(b) The following transactions were carried out with related parties:
The following significant transactions were carried out between the Group and its related parties during
the Track Record Period. In the opinion of the directors of the Company, the related party transactions were
carried out in the normal course of business and at terms negotiated between the Group and the respective
related parties.
Save as disclosed in Note 10 and 34 of this report during the Track Record Period, the following
transactions were carried out with related parties:
Y ear ended 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries paid to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,467 1,535 1,558
Rental paid/payable to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,104 13,807 15,574
Management fee income from a
related company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878 82 –
Sales and management fee income from a joint venture /H1118/H1118/H1118/H1118– 16,923 5,939
Royalty fee paid to a joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,456 480
Sales to related companies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 36 36
The transactions are conducted in the normal course of business at prices and terms as agreed between
the Group and the related parties.
(c) Key management compensation
The directors of the Company is considered to be the key management of the Company. Details of key
management compensation are set out in Note 34.
APPENDIX I ACCOUNTANT’S REPORT
– I-57 –


--- page 519 ---
(d) Amount due to a director
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Amount due to a director – Mr. Lau /H1118/H1118/H1118/H1118/H1118(76,693) (186,951) (116,281)
As at 31 March 2023, 2024 and 2025, balances to a director of the Group are unsecured, non-trade in
nature, interest-free, repayable on demand and approximate their fair values. The balances with a director are
denominated in HK$ and RMB. All amount due to a director is expected to be settled prior to Listing.
(e) Amount due from a shareholder
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Amount due from a shareholder –
Mrs. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110 271 –
As at 31 March 2023 and 2024, non-trade receivable from a shareholder is unsecured, interest-free and
repayable on demand. The carrying values of the balance approximate to their fair value. The balances are
denominated in HK$ and RMB.
(f) Amounts due from/to related companies
As at 31 March
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current
Amounts due from related companies /H1118/H1118/H1118/H111855,000 – –
Current
Amounts due from related companies /H1118/H1118/H1118/H1118 984 51,155 43,006
Amounts due to related companies /H1118/H1118/H1118/H1118/H1118/H1118(61,941) (7,045) –
As at 31 March 2023, 2024 and 2025, non-trade receivable from/payables to related parties are
unsecured, interest-free and repayable on demand. The carrying values of the balance approximate their fair
value. The balances with related parties are denominated in HK$ and RMB. As at 31 March 2023, the directors
of the Company do not expect the balance of RMB55,000,000 to be repaid by the related companies within
12 months of the reporting period and classified the balance as non-current assets. The balances of the amounts
due from related companies as at 31 March 2025 had been fully settled by 13 June 2025.
(g) Amounts due from/to the immediate holding company and group companies
As at 31 March 2024 and 2025, non-trade receivable from immediate holding company and non-trade
payables to group companies are unsecured, interest-free and repayable on demand. The carrying values of the
balance approximate their fair value. The amount due from the immediate holding company is denominated
in US$ and amounts due to group companies are denominated in HK$.
(h) Security
The buildings of directors, Mr. Lau’s son and related parties are pledged to secure the Group’s banking
facilities. Details refer to Note 30.
APPENDIX I ACCOUNTANT’S REPORT
– I-58 –


--- page 520 ---
34 BENEFITS AND INTERESTS OF DIRECTORS
(a) Directors’ emoluments
The remuneration shown below represents remuneration received by the directors in their capacity as
employees/directors of the companies comprising the Group during the Track Record Period. The remuneration of
each director paid/payable for each of the years ended 31 March 2023, 2024 and 2025 were set out below:
Name Fees Salaries
Discretionary
bonuses
Allowance
and benefits
in kind
Employer’s
contribution to a
retirement
benefit scheme
— defined
contribution
Other emoluments
paid or receivable
in respect of
director’s other
services in
connection with the
management of the
affairs of the
Listing Business Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the year
ended
31 March
2023
Executive
director and
Chairman
Mr. Lau /H1118/H1118/H1118/H1118/H1118– 6,879 1,678 1,414 1,284 – 11,255
Executive
director
Ms. Lam King /H1118 – 1,393 1,386 – 16 – 2,795
Ms. Lau Wing
Yin /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 995 759 – 16 – 1,770
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 9,267 3,823 1,414 1,316 – 15,820
Name Fees Salaries
Discretionary
bonuses
Allowance
and benefits
in kind
Employer’s
contribution to a
retirement
benefit scheme
— defined
contribution
Other emoluments
paid or receivable
in respect of
director’s other
services in
connection with the
management of the
affairs of the
Listing Business Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the year
ended
31 March
2024
Executive
director and
Chairman
Mr. Lau /H1118/H1118/H1118/H1118/H1118– 7,439 1,759 1,657 1,380 – 12,235
Executive
directors
Ms. Lam King /H1118 – 1,765 1,525 – 16 – 3,306
Ms. Lau Wing
Yin /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,138 835 – 16 – 1,989
Mr. Chu Wai
Tsun Baggio /H1118 – 1,050 200 – 15 – 1,265
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,392 4,319 1,657 1,427 – 18,795
APPENDIX I ACCOUNTANT’S REPORT
– I-59 –


--- page 521 ---
Name Fees Salaries
Discretionary
bonuses
Allowance
and benefits
in kind
Employer’s
contribution to a
retirement
benefit scheme
— defined
contribution
Other emoluments
paid or receivable
in respect of
director’s other
services in
connection with the
management of the
affairs of the
Listing Business Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the year
ended 31
March 2025 /H1118
Executive
director and
Chairman
Mr. Lau /H1118/H1118/H1118/H1118/H1118– 7,539 1,829 1,851 1,405 – 12,624
Executive
directors
Ms. Lam King /H1118 – 1,853 1,831 206 17 – 3,907
Ms. Lau Wing
Yin /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,327 901 94 17 – 2,339
Mr. Chu Wai
Tsun Baggio /H1118 – 1,275 534 – 17 – 1,826
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,994 5,095 2,151 1,456 – 20,696
Mr. Lau was appointed as executive director of the Company on 9 January 2024 and Ms. Lam King, Ms. Lau
Wing Yin and Mr. Chu Wai Tsun Baggio were appointed as executive directors of the Company on 10 July 2024. Mr.
Tao Chi Keung, Mr. Nagy Guillaume Nicolas Sébastien and Ms. Chan Soh Cheng were appointed as independent
non-executive directors of the Company on 6 June 2025. During the Track Record Period, the independent
non-executive directors have not yet been appointed and did not receive directors’ remuneration in the capacity of
independent non-executive directors. All of these individuals have not received any emoluments from the Group as
an inducement to join or upon joining the Group or as compensation for the loss of office during the Track Record
Period.
(b) Directors’ termination benefits
No payment was made to the directors as compensation for the early termination of the appointment during
the Track Record Period.
(c) Consideration provided to third parties for making available directors’ services
During the years ended 31 March 2023, 2024 and 2025, the Company did not pay consideration to any third
parties for making available directors’ services.
(d) Information about loans, quasi-loans and other dealings in favour of directors, controlled bodies
corporate by and connected entities with such directors
As at 31 March 2023, 2024 and 2025, there are no loans, quasi-loans and other dealing arrangements in favour
of directors, controlled bodies corporate by and controlled entities with such directors.
(e) Directors’ material interests in transactions, arrangements or contracts
Except as disclosed in Note 33, no significant transactions, arrangements and contracts in relation to the
Group’s business to which the Company was a party and in which a director of the Company had a material interest,
whether directly or indirectly, subsisted at the end of the Track Record Period or at any time during the years ended
31 March 2023, 2024 and 2025.
APPENDIX I ACCOUNTANT’S REPORT
– I-60 –


--- page 522 ---
35 EVENTS AFTER THE REPORTING PERIOD
 On 22 May 2025, the Group entered into a sale and purchase agreement with Kering Beauté SAS
(“Kering”) pursuant to which the Group agreed to dispose 100% issued share capital of E&C Holdings
Limited to Kering at a total consideration of RMB82.5 million. On 30 May 2025, the disposal has been
completed and E&C Holdings Limited ceased to be the Group’s subsidiary. E&C Holdings Limited is
an investment holding company with two subsidiaries, namely, E&C (Hong Kong) Trading Limited and
CREED Shanghai Cosmetics Limited, both of which are primarily engaged in the exclusive trading and
retailing of perfumes.
36 SUMMARY OF OTHER ACCOUNTING POLICIES
36.1 Subsidiaries
36.1.1 Consolidation
Subsidiaries are all entities (including a structured entities) over which the Group has control. The Group
controls the entity when the Group is exposed to, 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. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intra-group transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Group.
36.1.2 Separate financial statements
Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs
of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and
receivable.
Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these
investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is
declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount
in the consolidated financial statements of the investee’s net assets including goodwill.
36.1.3 Business combination
Business combinations under common control
The Historical Financial Information incorporate the financial statement items of the entities or
businesses in which the common control combination occurs as if they had been consolidated from the date
when the entities or businesses first came under the control of the controlling party.
The net assets of the combining entities or businesses are consolidated using the existing book values
from the controlling party’s perspective. No amount is recognised in consideration for goodwill or excess of
acquirer’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities
over cost at the time of common control combination, to the extent of the continuation of the controlling
party’s interest.
The consolidated statements of comprehensive income include the results of each of the combining
entities or businesses from the earliest date presented or since the date when the combining entities or
businesses first came under the common control, where this is a shorter period, regardless of the date of the
common control combination.
A uniform set of accounting polices is adopted by those entities. All intra-group transactions, balances
and unrealised gains on transactions between combining entities or businesses are eliminated.
APPENDIX I ACCOUNTANT’S REPORT
– I-61 –


--- page 523 ---
36.2 Segment reporting
Operating segment is reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive directors of the Company that makes
strategic decisions.
36.3 Joint Arrangements
(i) Joint Arrangements
Under HKFRS 11 investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the
legal structure of the joint arrangement. The Group has assessed the nature of its joint arrangements and
determined them to be joint ventures. Joint ventures are accounted for using the equity method.
(ii) Equity Method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or
loss, and the Group’s share of movements in other comprehensive income of the investee in other
comprehensive income. Dividends received or receivable from joint ventures are recognised as a reduction in
the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the
entity, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the joint venture.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent
of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been
changed where necessary to ensure consistency with the policies adopted by the Group.
36.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the Historical Financial Information are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The Historical Financial Information
are presented in RMB, which is the Company’s functional and the Company’s and the Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the consolidated statements of comprehensive income.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss.
APPENDIX I ACCOUNTANT’S REPORT
– I-62 –


--- page 524 ---
(c) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
 assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position
 income and expenses for each statement of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the dates of the transactions),
and
 all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
36.5 Intangible asset
Intangible asset represents a club membership and computer software that are stated at cost less impairment
losses, if any. The carrying amount of the club membership and computer software are reviewed at the end of each
reporting period to assess whether the fair value has declined below the carrying amount. When a decline other than
temporary has occurred, the carrying amount of such club membership is reduced to its fair value. The amount of the
reduction is recognised as an expense in the statement of comprehensive income.
36.6 Impairment of non-financial assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value
in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period.
36.7 Non-current assets held for sale
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs
to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess
of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the
sale of the non-current asset is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while
they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group
classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the statement of financial position. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the statement of financial position.
APPENDIX I ACCOUNTANT’S REPORT
– I-63 –


--- page 525 ---
36.8 Financial assets
36.8.1 Classification
The Group classifies its financial assets in the following measurement categories:
 those to be measured subsequently at fair value through profit or loss, and
 those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
36.8.2 Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date, the date on which the Group
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and
rewards of ownership.
36.8.3 Measurement
At initial recognition, the Group measures financial assets at fair value through profit and loss plus, in the case
of a financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the
asset and the cash flow characteristics of the asset.
 Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income from
these financial assets is included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and presented in other gains, net
together with foreign exchange gains and losses. Impairment losses are presented as separate line item
in the consolidated statements of comprehensive income.
 Fair value through profit or loss (‘‘FVTPL’’): A gain or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is not part of a hedging relationship is recognised in
profit or loss and presented net in the consolidated statements of comprehensive income in the period
in which it arises.
36.8.4 Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments
carried at amortised cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade and other receivables, the Group applies the simplified approach permitted by HKFRS 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
For other financial assets at amortised cost, including amount due from a joint venture, amount due from a
director and amounts due from related companies, the Group has assessed that the expected credit losses for these
receivables are not material under the 12 months expected losses method.
APPENDIX I ACCOUNTANT’S REPORT
– I-64 –


--- page 526 ---
36.8.5 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated statements of financial
position where the Group currently has a legally enforceable right to offset the recognised amounts, and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable
right must not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the Company or the counterparty.
36.9 Cash and cash equivalents
For the purpose of presentation in the consolidated statements of cash flows, cash and cash equivalents
includes cash on hand, deposits held at call with banks, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
36.10 Trade and other receivables
Trade and other receivables are amounts due from customers for the merchandise sold or services performed
in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in
the normal operating cycle of the business if longer), they are classified as current assets. If no, they are presented
as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment. See Note 36.8.4 for a description of the Group’s
impairment policy.
36.11 Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial
year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at
amortised cost using the effective interest method.
36.12 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditures required to
settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation.
36.13 Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
 the profit attributable to owners of the company, excluding any costs of servicing equity other
than ordinary shares.
 by the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the year and excluding treasury shares.
APPENDIX I ACCOUNTANT’S REPORT
– I-65 –


--- page 527 ---
(ii) Diluted earnings per share
 the after-income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
 the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
36.14 Dividend distribution
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at
the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting
period.
36.15 Interest income
Interest income on financial assets at amortised cost calculated using the effective interest method is
recognised in the consolidated statements of comprehensive income as part of finance income.
Interest income is presented as finance income where it is earned from financial assets that are held for cash
management purposes. Interest income is calculated by applying the effective interest rate to the gross carrying
amount of a financial asset.
III SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company or any of the
companies now comprising the Group in respect of any period subsequent to 31 March 2025
and up to the date of this report.
APPENDIX I ACCOUNTANT’S REPORT
– I-66 –


--- page 528 ---
The following information does not form part of the Accountant’ s Report from
PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, the reporting accountant
of the Company, as set forth in Appendix I to this prospectus, and is included herein for
information only. The unaudited pro forma financial information should be read in conjunction
with the section entitled “Financial Information” in this prospectus and the “Accountant’ s
Report” set forth in Appendix I to this prospectus.
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 for illustrative
purposes only, and is set out below to illustrate the effect of the Global Offering on the net
tangible assets of the Group attributable to the owners of the Company as of 31 March 2025
as if the Global Offering had taken place on 31 March 2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets has been
prepared for illustrative purposes only and because of its hypothetical nature, it may not give
a true picture of the consolidated net tangible assets of the Group as at 31 March 2025 or at
any future dates following the Global Offering.
Audited
Consolidated Net
Tangible Assets of
the Group
Attributable to
the Owners of the
Company as at
31 March 2025
Estimated Net
Proceeds from the
Global Offering
Unaudited Pro
Forma Adjusted
Consolidated Net
Tangible Assets
Attributable to
the Owners of the
Company as at
31 March 2025
Unaudited Pro Forma
Adjusted Consolidated
Net Tangible Assets per
Share
RMB’000
(Note 1)
RMB’000
(Note 2)
RMB’000 RMB
(Note 3)
HK$
(Note 4)
Based on an
Offer Price of
HK$2.80 per
Offer Share /H1118/H1118 682,229 808,415 1,490,644 1.12 1.22
Based on an
Offer Price of
HK$3.38 per
Offer Share /H1118/H1118 682,229 979,906 1,662,135 1.25 1.36
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 529 ---
Notes:
(1) The audited consolidated net tangible assets of the Group attributable to the owners of the Company as
at 31 March 2025 is extracted from the Accountant’s Report set out in Appendix I to this prospectus,
which is based on the audited consolidated net assets of the Group attributable to the owners of the
Company as at 31 March 2025 of approximately RMB690,990,000 after deducting the Group’s
intangible assets of approximately RMB8,761,000 as at 31 March 2025.
(2) The estimated net proceeds from the Global Offering are based on 333,400,000 Shares and the indicative
Offer Price of HK$2.80 per Offer Share and HK$3.38 per Offer Share, being low and high end of the
indicative Offer Price range, after deduction of the underwriting fees and other related expenses
(excluding listing expenses of approximately RMB24,295,000 which have been accounted for in the
consolidated statement of comprehensive income for the year ended 31 March 2024 and the year ended
31 March 2025).
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after the
adjustments referred to in the preceding paragraphs and on the basis that 1,333,400,000 Shares were in
issue, assuming that the Capitalization Issue and the Global Offering had been completed on 31 March
2025 but does not take into account of any Shares which may be allotted and issued by the Company
pursuant to the exercise of Over-allotment Option or the general mandate or repurchased by the
Company pursuant to the repurchase mandate as described in the section headed “Share Capital” in this
prospectus.
(4) For the purpose of the unaudited pro forma statement of adjusted consolidated net tangible assets, the
translation of Renminbi amounts into Hong Kong dollars was at rate of RMB0.9154 to HK$1.00. No
representation is made that Renminbi amounts have been, could have been or may be converted to Hong
Kong dollars, or vice versa, at that rate.
(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to
reflect any trading results or other transactions of our Group, including i) the declaration of dividends
after 31 March 2025, and ii) the disposal of E&C Holdings Limited.
On 13 May 2025, the Company declared the payment of a dividend of RMB120,000,000 for the year
ended 31 March 2025. The amount has not been recognised as a liability as of 31 March 2025 and is
not adjusted in the unaudited pro forma adjusted consolidated net tangible assets. The unaudited pro
forma adjusted net tangible assets and unaudited pro forma adjusted net tangible assets per Offer Share
would have been RMB1,371 million and HK$1.12 (equivalent to RMB1.03) based on the indicative
Offer Price of HK$2.80, and RMB1,542 million and HK$1.26 (equivalent to RMB1.16) based on the
indicative Offer Price of HK$3.38, being the low-end and high-end, respectively, after taking into
account the dividend declared set forth in Note 14 of the Appendix I to the prospectus.
On 22 May 2025, our Group entered into a sale and purchase agreement with Kering Beauté SAS
(“Kering”) pursuant to which our Group agreed to dispose 100% issued share capital of E&C Holdings
Limited to Kering at a total consideration of RMB82.5 million as set forth in Note 35 of the Appendix
I to the prospectus. As the final consideration is still subject to adjustments based on the financial
information of the E&C Holdings Limited and its subsidiaries (“E&C Group”) as at the completion date,
the actual gains on the disposal of E&C Group and its relevant impact to the consolidated financial
statements of our Group for the year ending 31 March 2026 cannot be determined and is not reflected
in this unaudited pro forma financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 530 ---
B. REPORT FROM THE REPORTING ACCOUNTANT ON THE UNAUDITED PRO
FORMA FINANCIAL INFORMATION
The following is the text of a report received from PricewaterhouseCoopers, Certified
Public Accountants, Hong Kong, for the purpose of incorporation in this prospectus.
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Eternal Beauty Holdings Limited
We have completed our assurance engagement to report on the compilation of unaudited
pro forma financial information of Eternal Beauty Holdings 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 of the Group as at
31 March 2025 and related notes (the “Unaudited Pro Forma Financial Information”) as set out
on pages II-1 and II-2 of the Company’s prospectus dated 18 June 2025, in connection with the
proposed initial public offering of the shares of the Company (the “Prospectus”). The
applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma
Financial Information are described on pages II-1 and II-2 of the Prospectus.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the proposed initial public offering on the Group’s financial position as
at 31 March 2025 as if the proposed initial public offering had taken place at 31 March 2025.
As part of this process, information about the Group’s financial position has been extracted by
the Directors from the Group’s financial information for the year ended 31 March 2025, on
which an accountant’s report has been published.
Directors’ Responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited 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 (the “HKICPA”).
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 531 ---
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 (HKSQM) 1, Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements , issued by the HKICPA, 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 Accountant’s Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the Unaudited 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 Unaudited Pro Forma Financial
Information beyond that owed to those to whom those reports were addressed by us at the dates
of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus , issued by the HKICPA. This standard requires
that the reporting accountant plans and performs procedures to obtain reasonable assurance
about whether the Directors have compiled the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the
HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited 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 Unaudited Pro Forma
Financial Information.
The purpose of unaudited pro forma financial information included in a prospectus is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the entity 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 the proposed initial public offering at 31 March 2025
would have been as presented.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 532 ---
A reasonable assurance engagement to report on whether the unaudited 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 unaudited 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
 The unaudited pro forma financial information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountant’s judgment, having regard to
the reporting accountant’s understanding of the nature of the company, the event or transaction
in respect of which the unaudited pro forma financial information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the unaudited pro
forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our work has not been carried out in accordance with auditing standards or other
standards and practices generally accepted in the United States of America or auditing
standards of the Public Company Accounting Oversight Board (United States) or standards and
practices of any professional body in any other overseas jurisdiction and accordingly should
not be relied upon as if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled by the
Directors 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 Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing
Rules.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 18 June 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 533 ---
Set out below is a summary of certain provisions of the Memorandum and Articles of
Association of the Company and of certain aspects of Cayman company law.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 9 January 2024 under the Companies Act (As Revised) of the Cayman
Islands (the “Companies Act”). The Company’s constitutional documents consist of its
Memorandum of Association (the “Memorandum”) and its Articles of Association (the
“Articles”).
1. MEMORANDUM OF ASSOCIATION
(a) The Memorandum states, inter alia, that the liability of members of the Company is
limited to the amount, if any, for the time being unpaid on the shares respectively
held by them and that the objects for which the Company is established are
unrestricted (including acting as an investment company), and that the Company
shall have and be capable of exercising all the functions of a natural person of full
capacity irrespective of any question of corporate benefit, as provided in section
27(2) of the Companies Act and in view of the fact that the Company is an exempted
company that the Company will not trade in the Cayman Islands with any person,
firm or corporation except in furtherance of the business of the Company carried on
outside the Cayman Islands.
(b) The Company may by special resolution alter its Memorandum with respect to any
objects, powers or other matters specified therein.
2. ARTICLES OF ASSOCIATION
The Articles were conditionally adopted on June 6, 2025 with effect from the Listing
Date. The following is a summary of certain provisions of the Articles:
(a) Shares
(i) Classes of shares
The share capital of the Company consists of ordinary shares.
(ii) V ariation of rights of existing shares or classes of shares
Subject to the Companies Act, if at any time the share capital of the Company is divided
into different classes of shares, all or any of the special rights attached to the shares or any class
of shares may (unless otherwise provided for by the terms of issue of that class) be varied,
modified or abrogated either with the consent in writing of the holders of not less than
three-fourths in nominal value of the issued shares of that class or with the sanction of a special
resolution passed at a separate general meeting of the holders of the shares of that class. To
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-1 –


--- page 534 ---
every such separate general meeting the provisions of the Articles relating to general meetings
will mutatis mutandis apply, but so that the necessary quorum (including at an adjourned
meeting) shall be two persons holding or representing by proxy not less than one-third in
nominal value of the issued shares of that class. Every holder of shares of the class shall be
entitled to one vote for every such share held by him.
Any special rights conferred upon the holders of any shares or class of shares shall not,
unless otherwise expressly provided in the rights attaching to the terms of issue of such shares,
be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
(iii) Alteration of capital
The Company may by ordinary resolution of its members:
(i) increase its share capital by the creation of new shares;
(ii) consolidate all or any of its capital into shares of larger amount than its existing
shares;
(iii) divide its shares into several classes and attach to such shares any preferential,
deferred, qualified or special rights, privileges, conditions or restrictions as the
Company in general meeting or as the directors may determine;
(iv) subdivide its shares or any of them into shares of smaller amount than is fixed by
the Memorandum; or
(v) cancel any shares which, at the date of passing of the resolution, have not been taken
and diminish the amount of its capital by the amount of the shares so cancelled.
The Company may reduce its share capital or any capital redemption reserve or other
undistributable reserve in any way by special resolution.
(iv) Transfer of shares
All transfers of shares may be effected by an instrument of transfer in the usual or
common form or in a form prescribed by The Stock Exchange of Hong Kong Limited (the
“Stock Exchange”) or in such other form as the board may approve and which may be under
hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by
machine imprinted signature or by such other manner of execution as the board may approve
from time to time.
Notwithstanding the foregoing, for so long as any shares are listed on the Stock
Exchange, titles to such listed shares may be evidenced and transferred in accordance with the
laws applicable to and the rules and regulations of the Stock Exchange (the “Listing Rules”)
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-2 –


--- page 535 ---
that are or shall be applicable to such listed shares. The register of members in respect of its
listed shares (whether the principal register or a branch register) may be kept by recording the
particulars required by Section 40 of the Companies Act in a form otherwise than legible if
such recording otherwise complies with the laws applicable to and the Listing Rules that are
or shall be applicable to such listed shares.
The instrument of transfer shall be executed by or on behalf of the transferor and the
transferee provided that the board may dispense with the execution of the instrument of transfer
by the transferee. The transferor shall be deemed to remain the holder of the share until the
name of the transferee is entered in the register of members in respect of that share.
The board may, in its absolute discretion, at any time transfer any share upon the principal
register to any branch register or any share on any branch register to the principal register or
any other branch register.
The board may decline to recognise any instrument of transfer unless a fee (not exceeding
the maximum sum as the Stock Exchange may determine to be payable) determined by the
Directors is paid to the Company, the instrument of transfer is properly stamped (if applicable),
it is in respect of only one class of share and is lodged at the relevant registration office or
registered office or such other place at which the principal register is kept accompanied by the
relevant share certificate(s) and such other evidence as the board may reasonably require to
show the right of the transferor to make the transfer (and if the instrument of transfer is
executed by some other person on his behalf, the authority of that person so to do).
The registration of transfers may be suspended and the register closed on giving notice
by announcement or by electronic communication or by advertisement in any newspaper or by
any other means in accordance with the requirements of the Stock Exchange, at such times and
for such periods as the board may determine. The register of members must not be closed for
periods exceeding in the whole thirty (30) days in any year. The period of thirty (30) days may
be extended for a further period or periods not exceeding thirty (30) days in respect of any year
if approved by the Members by ordinary resolution.
Subject to the above, fully paid shares are free from any restriction on transfer and free
of all liens in favour of the Company.
(v) Power of the Company to purchase its own shares
The Company is empowered by the Companies Act and the Articles to purchase its own
shares subject to certain restrictions and the board may only exercise this power on behalf of
the Company subject to any applicable requirements imposed from time to time by the Stock
Exchange.
The board may accept the surrender for no consideration of any fully paid share.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-3 –


--- page 536 ---
(vi) Power of any subsidiary of the Company to own shares in the Company
There are no provisions in the Articles relating to ownership of shares in the Company by
a subsidiary.
(vii) Calls on shares and forfeiture of shares
The board may from time to time make such calls upon the members in respect of any
monies unpaid on the shares held by them respectively (whether on account of the nominal
value of the shares or by way of premium). A call may be made payable either in one lump sum
or by installments. If the sum payable in respect of any call or instalment is not paid on or
before the day appointed for payment thereof, the person or persons from whom the sum is due
shall pay interest on the same at such rate not exceeding twenty per cent. (20%) per annum as
the board may agree to accept from the day appointed for the payment thereof to the time of
actual payment, but the board may waive payment of such interest wholly or in part. The board
may, if it thinks fit, receive from any member willing to advance the same, either in money or
money’s worth, all or any part of the monies uncalled and unpaid or installments payable upon
any shares held by him, and upon all or any of the monies so advanced the Company may pay
interest at such rate (if any) as the board may decide.
If a member fails to pay any call on the day appointed for payment thereof, the board may
serve not less than fourteen (14) clear days’ notice on him requiring payment of so much of the
call as is unpaid, together with any interest which may have accrued and which may still accrue
up to the date of actual payment and stating that, in the event of non-payment at or before the
time appointed, the shares in respect of which the call was made will be liable to be forfeited.
If the requirements of any such notice are not complied with, any share in respect of
which the notice has been given may at any time thereafter, before the payment required by the
notice has been made, be forfeited by a resolution of the board to that effect. Such forfeiture
will include all dividends and bonuses declared in respect of the forfeited share and not
actually paid before the forfeiture.
A person whose shares have been forfeited shall cease to be a member in respect of the
forfeited shares but shall, notwithstanding, remain liable to pay to the Company all monies
which, at the date of forfeiture, were payable by him to the Company in respect of the shares,
together with (if the board shall in its discretion so require) interest thereon from the date of
forfeiture until the date of actual payment at such rate not exceeding twenty per cent. (20%)
per annum as the board determines.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-4 –


--- page 537 ---
(b) Directors
(i) Appointment, retirement and removal
At each annual general meeting, one third of the Directors for the time being (or if their
number is not a multiple of three, then the number nearest to but not less than one third) shall
retire from office by rotation provided that every Director shall be subject to retirement at an
annual general meeting at least once every three years. The Directors to retire by rotation shall
include any Director who wishes to retire and not offer himself for re-election. Any further
Directors so to retire shall be those who have been longest in office since their last re-election
or appointment but as between persons who became or were last re-elected Directors on the
same day those to retire will (unless they otherwise agree among themselves) be determined
by lot.
Neither a Director nor an alternate Director is required to hold any shares in the Company
by way of qualification. Further, there are no provisions in the Articles relating to retirement
of Directors upon reaching any age limit.
The Directors have the power to appoint any person as a Director either to fill a casual
vacancy on the board or as an addition to the existing board. Any Director so appointed shall
hold office only until the first annual general meeting of the Company after his appointment
and shall then be eligible for re-election.
A Director (including a managing or other executive Director) may be removed by an
ordinary resolution of the Company before the expiration of his term of office (but without
prejudice to any claim which such Director may have for damages for any breach of any
contract between him and the Company) and members of the Company may by ordinary
resolution appoint another in his place. Unless otherwise determined by the Company in
general meeting, the number of Directors shall not be less than two. There is no maximum
number of Directors.
The office of director shall be vacated if:
(aa) he resigns by notice in writing delivered to the Company;
(bb) he becomes of unsound mind or dies;
(cc) without special leave, he is absent from meetings of the board for six (6) consecutive
months, and the board resolves that his office is vacated;
(dd) he becomes bankrupt or has a receiving order made against him or suspends payment
or compounds with his creditors;
(ee) he is prohibited from being a director by law; or
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-5 –


--- page 538 ---
(ff) he ceases to be a director by virtue of any provision of law or is removed from office
pursuant to the Articles.
The board may appoint one or more of its body to be managing director, joint
managing director, or deputy managing director or to hold any other employment or
executive office with the Company for such period and upon such terms as the board may
determine and the board may revoke or terminate any of such appointments. The board
may delegate any of its powers, authorities and discretions to committees consisting of
such Director or Directors and other persons as the board thinks fit, and it may from time
to time revoke such delegation or revoke the appointment of and discharge any such
committees either wholly or in part, and either as to persons or purposes, but every
committee so formed must, in the exercise of the powers, authorities and discretions so
delegated, conform to any regulations that may from time to time be imposed upon it by
the board.
(ii) Power to allot and issue shares and warrants
Subject to the provisions of the Companies Act and the Memorandum and Articles and to
any special rights conferred on the holders of any shares or class of shares, any share may be
issued (a) with or have attached thereto such rights, or such restrictions, whether with regard
to dividend, voting, return of capital, or otherwise, as the Directors may determine, or (b) on
terms that, at the option of the Company or the holder thereof, it is liable to be redeemed.
The board may issue warrants or convertible securities or securities of similar nature
conferring the right upon the holders thereof to subscribe for any class of shares or securities
in the capital of the Company on such terms as it may determine.
Subject to the provisions of the Companies Act and the Articles and, where applicable, the
Listing Rules and without prejudice to any special rights or restrictions for the time being
attached to any shares or any class of shares, all unissued shares in the Company are at the
disposal of the board, which may offer, allot, grant options over or otherwise dispose of them
to such persons, at such times, for such consideration and on such terms and conditions as it
in its absolute discretion thinks fit, but so that no shares shall be issued at a discount to their
nominal value.
Neither the Company nor the board is obliged, when making or granting any allotment of,
offer of, option over or disposal of shares, to make, or make available, any such allotment,
offer, option or shares to members or others with registered addresses in any particular territory
or territories being a territory or territories where, in the absence of a registration statement or
other special formalities, this would or might, in the opinion of the board, be unlawful or
impracticable. Members affected as a result of the foregoing sentence shall not be, or be
deemed to be, a separate class of members for any purpose whatsoever.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-6 –


--- page 539 ---
(iii) Power to dispose of the assets of the Company or any of its subsidiaries
There are no specific provisions in the Articles relating to the disposal of the assets of the
Company or any of its subsidiaries. The Directors may, however, exercise all powers and do
all acts and things which may be exercised or done or approved by the Company and which are
not required by the Articles or the Companies Act to be exercised or done by the Company in
general meeting.
(iv) Borrowing powers
The board may exercise all the powers of the Company to raise or borrow money, to
mortgage or charge all or any part of the undertaking, property and assets and uncalled capital
of the Company and, subject to the Companies Act, to issue debentures, bonds and other
securities of the Company, whether outright or as collateral security for any debt, liability or
obligation of the Company or of any third party.
(v) Remuneration
The ordinary remuneration of the Directors is to be determined by the Company in
general meeting, such sum (unless otherwise directed by the resolution by which it is voted)
to be divided amongst the Directors in such proportions and in such manner as the board may
agree or, failing agreement, equally, except that any Director holding office for part only of the
period in respect of which the remuneration is payable shall only rank in such division in
proportion to the time during such period for which he held office. The Directors are also
entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably
expected to be incurred or incurred by them in attending any board meetings, committee
meetings or general meetings or separate meetings of any class of shares or of debentures of
the Company or otherwise in connection with the discharge of their duties as Directors.
Any Director who, by request, goes or resides abroad for any purpose of the Company or
who performs services which in the opinion of the board go beyond the ordinary duties of a
Director may be paid such extra remuneration as the board may determine and such extra
remuneration shall be in addition to or in substitution for any ordinary remuneration as a
Director. An executive Director appointed to be a managing director, joint managing director,
deputy managing director or other executive officer shall receive such remuneration and such
other benefits and allowances as the board may from time to time decide. Such remuneration
may be either in addition to or in lieu of his remuneration as a Director.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-7 –


--- page 540 ---
The board may establish or concur or join with other companies (being subsidiary
companies of the Company or companies with which it is associated in business) in
establishing and making contributions out of the Company’s monies to any schemes or funds
for providing pensions, sickness or compassionate allowances, life assurance or other benefits
for employees (which expression as used in this and the following paragraph shall include any
Director or past Director who may hold or have held any executive office or any office of profit
with the Company or any of its subsidiaries) and ex-employees of the Company and their
dependents or any class or classes of such persons.
The board may pay, enter into agreements to pay or make grants of revocable or
irrevocable, and either subject or not subject to any terms or conditions, pensions or other
benefits to employees and ex-employees and their dependents, or to any of such persons,
including pensions or benefits additional to those, if any, to which such employees or
ex-employees or their dependents are or may become entitled under any such scheme or fund
as is mentioned in the previous paragraph. Any such pension or benefit may, as the board
considers desirable, be granted to an employee either before and in anticipation of, or upon or
at any time after, his actual retirement.
The board may resolve to capitalise all or any part of any amount for the time being
standing to the credit of any reserve or fund (including a share premium account and the profit
and loss account) whether or not the same is available for distribution by applying such sum
in paying up unissued shares to be allotted to (i) employees (including directors) of the
Company and/or its affiliates (meaning any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated association or other entity (other than the Company)
that directly, or indirectly through one or more intermediaries, controls, is controlled by or is
under common control with, the Company) upon exercise or vesting of any options or awards
granted under any share incentive scheme or employee benefit scheme or other arrangement
which relates to such persons that has been adopted or approved by the members in general
meeting, or (ii) any trustee of any trust to whom shares are to be allotted and issued by the
Company in connection with the operation of any share incentive scheme or employee benefit
scheme or other arrangement which relates to such persons that has been adopted or approved
by the members in general meeting.
(vi) Compensation or payments for loss of office
Pursuant to the Articles, payments to any Director or past Director of any sum by way of
compensation for loss of office or as consideration for or in connection with his retirement
from office (not being a payment to which the Director is contractually entitled) must be
approved by the Company in general meeting.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-8 –


--- page 541 ---
(vii) Loans and provision of security for loans to Directors
The Company must not make any loan, directly or indirectly, to a Director or his close
associate(s) if and to the extent it would be prohibited by the Companies Ordinance (Chapter
622 of the laws of Hong Kong) as if the Company were a company incorporated in Hong Kong.
(viii) Disclosure of interests in contracts with the Company or any of its subsidiaries
A Director may hold any other office or place of profit with the Company (except that of
the auditor of the Company) in conjunction with his office of Director for such period and upon
such terms as the board may determine, and may be paid such extra remuneration therefor in
addition to any remuneration provided for by or pursuant to the Articles. A Director may be or
become a director or other officer of, or otherwise interested in, any company promoted by the
Company or any other company in which the Company may be interested, and shall not be
liable to account to the Company or the members for any remuneration, profits or other benefits
received by him as a director, officer or member of, or from his interest in, such other company.
The board may also cause the voting power conferred by the shares in any other company held
or owned by the Company to be exercised in such manner in all respects as it thinks fit,
including the exercise thereof in favour of any resolution appointing the Directors or any of
them to be directors or officers of such other company, or voting or providing for the payment
of remuneration to the directors or officers of such other company.
No Director or proposed or intended Director shall be disqualified by his office from
contracting with the Company, either with regard to his tenure of any office or place of profit
or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any
other contract or arrangement in which any Director is in any way interested be liable to be
avoided, nor shall any Director so contracting or being so interested be liable to account to the
Company or the members for any remuneration, profit or other benefits realised by any such
contract or arrangement by reason of such Director holding that office or the fiduciary
relationship thereby established. A Director who to his knowledge is in any way, whether
directly or indirectly, interested in a contract or arrangement or proposed contract or
arrangement with the Company must declare the nature of his interest at the meeting of the
board at which the question of entering into the contract or arrangement is first taken into
consideration, if he knows his interest then exists, or in any other case, at the first meeting of
the board after he knows that he is or has become so interested.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-9 –


--- page 542 ---
A Director shall not vote (nor be counted in the quorum) on any resolution of the board
approving any contract or arrangement or other proposal in which he or any of his close
associates is materially interested, but this prohibition does not apply to any of the following
matters, namely:
(aa) the giving of any security or indemnity either:
(aaa) to the Director or his close associate(s) in respect of money lent or obligations
incurred or undertaken by him or any of them at the request of or for the benefit
of the Company or any of its subsidiaries; or
(bbb) to a third party in respect of a debt or obligation of the Company or any of its
subsidiaries for which the Director or his close associate(s) has
himself/themselves assumed responsibility in whole or in part and whether
alone or jointly under a guarantee or indemnity or by the giving of security;
(bb) any proposal concerning an offer of shares or debentures or other securities of or by
the Company or any other company which the Company may promote or be
interested in for subscription or purchase where the Director or his close associate(s)
is/are or is/are to be interested as a participant in the underwriting or sub-
underwriting of the offer;
(cc) any proposal or arrangement concerning the benefit of employees of the Company
or its subsidiaries including:
(aaa) the adoption, modification or operation of any employees’ share scheme or any
share incentive or share option scheme under which the Director or his close
associate(s) may benefit; or
(bbb) the adoption, modification or operation of a pension fund or retirement, death
or disability benefits scheme which relates to the Directors, his close
associate(s) and employee(s) of the Company or any of its subsidiaries and
does not provide in respect of any Director, or his close associate(s), as such
any privilege or advantage not generally accorded to the class of persons to
which such scheme or fund relates;
(dd) any contract or arrangement in which the Director or his close associate(s) is/are
interested in the same manner as other holders of shares or debentures or other
securities of the Company by virtue only of his/their interest in shares or debentures
or other securities of the Company.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-10 –


--- page 543 ---
(c) Proceedings of the Board
The board may meet for the despatch of business, adjourn or postpone and otherwise
regulate its meetings as it considers appropriate. Questions arising at any meeting shall be
determined by a majority of votes. In the case of an equality of votes, the chairman of the
meeting shall have an additional or casting vote.
(d) Alterations to constitutional documents and the Company’s name
The Articles may be rescinded, altered or amended by the Company in general meeting
by special resolution. The Articles state that a special resolution shall be required to alter the
provisions of the Memorandum, to amend the Articles or to change the name of the Company.
(e) Meetings of members
(i) Special and ordinary resolutions
A special resolution of the Company must be passed by a majority of not less than
three-fourths of the votes cast by such members as, being entitled so to do, vote in person or,
in the case of such members as are corporations, by their duly authorised representatives or,
where proxies are allowed, by proxy at a general meeting of which notice has been duly given
in accordance with the Articles.
Under the Companies Act, a copy of any special resolution must be forwarded to the
Registrar of Companies in the Cayman Islands within fifteen (15) days of being passed.
An ordinary resolution is defined in the Articles to mean a resolution passed by a simple
majority of the votes of such members of the Company as, being entitled to do so, vote in
person or, in the case of corporations, by their duly authorised representatives or, where proxies
are allowed, by proxy at a general meeting of which notice has been duly given in accordance
with the Articles.
(ii) V oting rights and right to demand a poll
Subject to any special rights or restrictions as to voting for the time being attached to any
shares, at any general meeting on a poll every member present in person or by proxy or, in the
case of a member being a corporation, by its duly authorised representative shall have one vote
for every fully paid share of which he is the holder but so that no amount paid up or credited
as paid up on a share in advance of calls or installments is treated for the foregoing purposes
as paid up on the share. A member entitled to more than one vote need not use all his votes or
cast all the votes he uses in the same way.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-11 –


--- page 544 ---
At any general meeting a resolution put to the vote of the meeting is to be decided by way
of a poll save that in the case of a physical meeting, the chairman of the meeting may in good
faith, allow a resolution which relates purely to a procedural or administrative matter to be
voted on by a show of hands in which case every member present in person (or being a
corporation, is present by a duly authorised representative), or by proxy(ies) shall have one
vote provided that where more than one proxy is appointed by a member which is a clearing
house (or its nominee(s)), each such proxy shall have one vote on a show of hands. V otes
(whether on a show of hands or by way of poll) may be cast by such means, electronic or
otherwise, as the Directors or the chairman of the meeting may determine.
Any corporation which is a member may by resolution of its directors or other governing
body authorise such person as it thinks fit to act as its representative at any general meeting
of the Company or at any meeting of any class of members. The person so authorised shall be
entitled to exercise the same powers on behalf of such corporation as the corporation could
exercise if it were an individual member and such corporation shall for the purposes of the
Articles be deemed to be present in person at any such meeting if a person so authorised is
present thereat.
If a recognised clearing house (or its nominee(s)) is a member of the Company it may
authorise such person or persons as it thinks fit to act as its representative(s) at any meeting
of the Company or at any meeting of any class of members of the Company provided that, if
more than one person is so authorised, the authorisation shall specify the number and class of
shares in respect of which each such person is so authorised. A person authorised pursuant to
this provision shall be deemed to have been duly authorised without further evidence of the
facts and be entitled to exercise the same powers on behalf of the recognised clearing house
(or its nominee(s)) as if such person was the registered holder of the shares of the Company
held by that clearing house (or its nominee(s)) including, the right to speak and to vote, and
where a show of hands is allowed, the right to vote individually on a show of hands.
All members have the right to speak and vote at a general meeting except where a member
is required, by the rules of the Stock Exchange, to abstain from voting to approve the matter
under consideration.
Where the Company has any knowledge that any member is, under the Listing Rules,
required to abstain from voting on any particular resolution of the Company or restricted to
voting only for or only against any particular resolution of the Company, any votes cast by or
on behalf of such member in contravention of such requirement or restriction shall not be
counted.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-12 –


--- page 545 ---
(iii) Annual general meetings and extraordinary general meetings
The Company must hold an annual general meeting of the Company for each financial
year and such general meeting must be held within six (6) months after the end of the
Company’s financial year unless a longer period would not infringe the Listing Rules.
Extraordinary general meetings may be convened on the requisition of one or more
members holding, at the date of deposit of the requisition, not less than one-tenth of the paid
up capital of the Company having the right of voting at general meetings, on a one vote per
share basis. Such requisition shall be made in writing to the board or the secretary for the
purpose of requiring an extraordinary general meeting to be called by the board for the
transaction of any business or resolution specified in such requisition. Such meeting shall be
held within 2 months after the deposit of such requisition. If within 21 days of such deposit,
the board fails to proceed to convene such meeting, the requisitionist(s) himself/herself
(themselves) may convene a physical meeting at only one location which will be the Principal
Meeting Place (as defined below), and all reasonable expenses incurred by the requisitionist(s)
as a result of the failure of the board shall be reimbursed to the requisitionist(s) by the
Company.
Notwithstanding any provisions in the Articles, any general meeting or any class meeting
may be held by means of such telephone, electronic or other communication facilities as to
permit all persons participating in the meeting to communicate with each other, and
participation in such a meeting shall constitute presence at such meeting.
(iv) Notices of meetings and business to be conducted
An annual general meeting must be called by notice of not less than twenty-one (21) clear
days. All other general meetings must be called by notice of at least fourteen (14) clear days.
The notice is exclusive of the day on which it is served or deemed to be served and of the day
for which it is given, and must specify (a) the time and date of the meeting, (b) save for an
electronic meeting, the place of the meeting and if there is more than one meeting location as
determined by the Board pursuant to the Articles, the principal place of the meeting (the
“Principal Meeting Place”), (c) if the general meeting is to be a hybrid meeting or an electronic
meeting, the notice shall include a statement to that effect and with details of the electronic
facilities for attendance and participation by electronic means at the meeting or where such
details will be made available by the Company prior to the meeting, and (d) particulars of
resolutions to be considered at the meeting.
In addition, notice of every general meeting must be given to all members of the Company
other than to such members as, under the provisions of the Articles or the terms of issue of the
shares they hold, are not entitled to receive such notices from the Company, and also to, among
others, the auditors for the time being of the Company.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-13 –


--- page 546 ---
Any notice to be given to or by any person pursuant to the Articles may be given or issued
by the following means:
(aa) by serving it personally on the relevant person;
(bb) by sending it through the post to such member’s registered address;
(cc) by delivering or leaving it at such member’s registered address;
(dd) by placing an advertisement in newspapers or other publication and where
applicable, in accordance with the requirements of the Stock Exchange;
(ee) by sending or transmitting it as an electronic communication to the relevant person
at such electronic address as he may provide under the Articles, subject to the
Company complying with the Cayman Islands laws and any other applicable laws,
rules and regulations from time to time in force with regard to any requirements for
the obtaining of consent (or deemed consent) from such person;
(ff) by publishing it on the Company’s website to which the relevant person may have
access, subject to the Company complying with the Cayman Islands law and any
other applicable laws, rules and regulations from time to time in force with regard
to any requirements for the obtaining of consent (or deemed consent) from such
person and/or for giving notification to any such person stating that the notice,
document or publication is available on the Company’s computer network website;
or
(gg) by sending or otherwise making it available to such person through such other means
to the extent permitted by and in accordance with the Cayman Islands law and other
applicable laws, rules and regulations.
All business that is transacted at an extraordinary general meeting and at an annual
general meeting is deemed special, save that in the case of an annual general meeting,
each of the following business is deemed an ordinary business:
(aaa) the declaration and sanctioning of dividends;
(bbb) the consideration and adoption of the accounts and balance sheet and the
reports of the directors and the auditors;
(ccc) the election of directors in place of those retiring;
(ddd) the appointment of auditors and other officers; and
(eee) the fixing of the remuneration of the directors and of the auditors.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-14 –


--- page 547 ---
(v) Quorum for meetings and separate class meetings
No business shall be transacted at any general meeting unless a quorum is present when
the meeting proceeds to business, but the absence of a quorum shall not preclude the
appointment of a chairman.
The quorum for a general meeting shall be two members present in person (or, in the case
of a member being a corporation, by its duly authorised representative) or by proxy or, for
quorum purposes only, two persons appointed by the clearing house as authorized
representative or proxy, and entitled to vote. In respect of a separate class meeting (including
an adjourned meeting) convened to sanction the modification of class rights the necessary
quorum shall be two persons holding or representing by proxy not less than one-third in
nominal value of the issued shares of that class.
(vi) Proxies
Any member of the Company entitled to attend and vote at a meeting of the Company is
entitled to appoint another person as his proxy to attend and vote instead of him. A member
who is the holder of two or more shares may appoint more than one proxy to represent him and
vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not
be a member of the Company and is entitled to exercise the same powers on behalf of a member
who is an individual and for whom he acts as proxy as such member could exercise. In addition,
a proxy is entitled to exercise the same powers on behalf of a member which is a corporation
and for which he acts as proxy as such member could exercise as if it were an individual
member. V otes may be given either personally (or, in the case of a member being a corporation,
by its duly authorised representative) or by proxy.
(f) Accounts and audit
The board shall cause true accounts to be kept of the sums of money received and
expended by the Company, and the matters in respect of which such receipt and expenditure
take place, and of the property, assets, credits and liabilities of the Company and of all other
matters required by the Companies Act or necessary to give a true and fair view of the
Company’s affairs and to explain its transactions.
The accounting records must be kept at the registered office or at such other place or
places as the board decides and shall always be open to inspection by any Director. No member
(other than a Director) shall have any right to inspect any accounting record or book or
document of the Company except as conferred by law or authorised by the board or the
Company in general meeting. However, an exempted company must make available at its
registered office in electronic form or any other medium, copies of its books of account or parts
thereof as may be required of it upon service of an order or notice by the Tax Information
Authority pursuant to the Tax Information Authority Act of the Cayman Islands.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-15 –


--- page 548 ---
A copy of every balance sheet and profit and loss account (including every document
required by law to be annexed thereto) which is to be laid before the Company at its general
meeting, together with a printed copy of the Directors’ report and a copy of the auditors’ report,
shall not less than twenty-one (21) days before the date of the meeting and at the same time
as the notice of annual general meeting be sent to every person entitled to receive notices of
general meetings of the Company under the provisions of the Articles; however, subject to
compliance with all applicable laws, including the Listing Rules, the Company may send to
such persons summarised financial statements derived from the Company’s annual accounts
and the directors’ report instead provided that any such person may by notice in writing served
on the Company, demand that the Company sends to him, in addition to summarised financial
statements, a complete printed copy of the Company’s annual financial statement and the
directors’ report thereon.
At the annual general meeting or at a subsequent extraordinary general meeting in each
year, the members shall by ordinary resolution appoint an auditor to audit the accounts of the
Company and such auditor shall hold office until the next annual general meeting. Moreover,
the members may, at any general meeting, by ordinary resolution remove the auditor at any
time before the expiration of his terms of office and shall by ordinary resolution at that meeting
appoint another auditor for the remainder of his term. The remuneration of the auditors shall
be fixed and approved by the Company by an ordinary resolution passed at a general meeting
or in such manner as the members may by ordinary resolution determine.
The financial statements of the Company shall be audited by the auditor in accordance
with generally accepted auditing standards which may be those of a country or jurisdiction
other than the Cayman Islands. The auditor shall make a written report thereon in accordance
with generally accepted auditing standards and the report of the auditor must be submitted to
the members in general meeting.
(g) Dividends and other methods of distribution
The Company in general meeting may declare dividends in any currency to be paid to the
members but no dividend shall be declared in excess of the amount recommended by the board.
The Articles provide dividends may be declared and paid out of the profits of the
Company, realised or unrealised, or from any reserve set aside from profits which the directors
determine is no longer needed. With the sanction of an ordinary resolution dividends may also
be declared and paid out of share premium account or any other fund or account which can be
authorised for this purpose in accordance with the Companies Act.
Except in so far as the rights attaching to, or the terms of issue of, any share may
otherwise provide, (i) all dividends shall be declared and paid according to the amounts paid
up on the shares in respect whereof the dividend is paid but no amount paid up on a share in
advance of calls shall for this purpose be treated as paid up on the share and (ii) all dividends
shall be apportioned and paid pro rata according to the amount paid up on the shares during
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-16 –


--- page 549 ---
any portion or portions of the period in respect of which the dividend is paid. The Directors
may deduct from any dividend or other monies payable to any member or in respect of any
shares all sums of money (if any) presently payable by him to the Company on account of calls
or otherwise.
Whenever the board or the Company in general meeting has resolved that a dividend be
paid or declared on the share capital of the Company, the board may further resolve either (a)
that such dividend be satisfied wholly or in part in the form of an allotment of shares credited
as fully paid up, provided that the members entitled thereto will be entitled to elect to receive
such dividend (or part thereof) in cash in lieu of such allotment, or (b) that members entitled
to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid
up in lieu of the whole or such part of the dividend as the board may think fit.
The Company may also upon the recommendation of the board by an ordinary resolution
resolve in respect of any one particular dividend of the Company that it may be satisfied wholly
in the form of an allotment of shares credited as fully paid up without offering any right to
members to elect to receive such dividend in cash in lieu of such allotment.
Any dividend, interest or other sum payable in cash to the holder of shares may be paid
by cheque or warrant sent through the post addressed to the holder at his registered address,
or in the case of joint holders, addressed to the holder whose name stands first in the register
of the Company in respect of the shares at his address as appearing in the register or addressed
to such person and at such addresses as the holder or joint holders may in writing direct. Every
such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made
payable to the order of the holder or, in the case of joint holders, to the order of the holder
whose name stands first on the register in respect of such shares, and shall be sent at his or their
risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute
a good discharge to the Company. Any one of two or more joint holders may give effectual
receipts for any dividends or other moneys payable or property distributable in respect of the
shares held by such joint holders.
Whenever the board or the Company in general meeting has resolved that a dividend be
paid or declared the board may further resolve that such dividend be satisfied wholly or in part
by the distribution of specific assets of any kind.
All dividends or bonuses unclaimed for one year after having been declared may be
invested or otherwise made use of by the board for the benefit of the Company until claimed
and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses
unclaimed for six years after having been declared may be forfeited by the board and shall
revert to the Company.
No dividend or other monies payable by the Company on or in respect of any share shall
bear interest against the Company.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-17 –


--- page 550 ---
(h) Inspection of corporate records
Pursuant to the Articles, the register and branch register of members maintained in Hong
Kong shall be open to inspection for at least two (2) hours during business hours by members
without charge, or by any other person upon a maximum payment of HK$2.50 or such lesser
sum specified by the board, at the registered office or such other place at which the register is
kept in accordance with the Companies Act or, upon a maximum payment of HK$1.00 or such
lesser sum specified by the board, at the office where the branch register of members is kept,
unless the register is closed in accordance with the Articles.
(i) Rights of minorities in relation to fraud or oppression
There are no provisions in the Articles relating to rights of minority shareholders in
relation to fraud or oppression. However, certain remedies are available to member of the
Company under Cayman Islands law, as summarised in paragraph 3(f) of this Appendix.
(j) Procedures on liquidation
Unless otherwise provided by the Companies Act, a resolution that the Company be
wound up by the court or be wound up voluntarily shall be a special resolution.
Subject to any special rights, privileges or restrictions as to the distribution of available
surplus assets on liquidation for the time being attached to any class or classes of shares:
(i) if the Company is wound up and the assets available for distribution amongst the
members of the Company shall be more than sufficient to repay the whole of the
capital paid up at the commencement of the winding up, the excess shall be
distributed pari passu amongst such members in proportion to the amount paid up
on the shares held by them respectively; and
(ii) if the Company is wound up and the assets available for distribution amongst the
members as such shall be insufficient to repay the whole of the paid-up capital, such
assets shall be distributed so that, as nearly as may be, the losses shall be borne by
the members in proportion to the capital paid up, or which ought to have been paid
up, at the commencement of the winding up on the shares held by them respectively.
If the Company is wound up (whether the liquidation is voluntary or by the court) the
liquidator may, with the authority of a special resolution and any other sanction required by the
Companies Act divide among the members in specie or kind the whole or any part of the assets
of the Company whether the assets shall consist of property of one kind or shall consist of
properties of different kinds and the liquidator may, for such purpose, set such value as he
deems fair upon any one or more class or classes of property to be divided as aforesaid and may
determine how such division shall be carried out as between the members or different classes
of members. The liquidator may, with the like authority, vest any part of the assets in trustees
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-18 –


--- page 551 ---
upon such trusts for the benefit of members as the liquidator, with the like authority, shall think
fit, but so that no contributory shall be compelled to accept any shares or other property in
respect of which there is a liability.
(k) Subscription rights reserve
The Articles provide that to the extent that it is not prohibited by and is in compliance
with the Companies Act, if warrants to subscribe for shares have been issued by the Company
and the Company does any act or engages in any transaction which would result in the
subscription price of such warrants being reduced below the par value of a share, a subscription
rights reserve shall be established and applied in paying up the difference between the
subscription price and the par value of a share on any exercise of the warrants.
3. CAYMAN ISLANDS COMPANY LA W
The Company is incorporated in the Cayman Islands subject to the Companies Act and,
therefore, operates subject to Cayman Islands law. Set out below is a summary of certain
provisions of Cayman company law, although this does not purport to contain all applicable
qualifications and exceptions or to be a complete review of all matters of Cayman company law
and taxation, which may differ from equivalent provisions in jurisdictions with which
interested parties may be more familiar:
(a) Company operations
As an exempted company, the Company’s operations must be conducted mainly outside
the Cayman Islands. The Company is required to file an annual return each year with the
Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of
its authorised share capital.
(b) Share capital
The Companies Act provides that where a company issues shares at a premium, whether
for cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on
those shares shall be transferred to an account, to be called the “share premium account”. At
the option of a company, these provisions may not apply to premiums on shares of that
company allotted pursuant to any arrangement in consideration of the acquisition or
cancellation of shares in any other company and issued at a premium.
The Companies Act provides that the share premium account may be applied by the
company subject to the provisions, if any, of its memorandum and articles of association in (a)
paying distributions or dividends to members; (b) paying up unissued shares of the company
to be issued to members as fully paid bonus shares; (c) the redemption and repurchase of shares
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-19 –


--- page 552 ---
(subject to the provisions of section 37 of the Companies Act); (d) writing-off the preliminary
expenses of the company; and (e) writing-off the expenses of, or the commission paid or
discount allowed on, any issue of shares or debentures of the company.
No distribution or dividend may be paid to members out of the share premium account
unless immediately following the date on which the distribution or dividend is proposed to be
paid, the company will be able to pay its debts as they fall due in the ordinary course of
business.
The Companies Act provides that, subject to confirmation by the Grand Court of the
Cayman Islands (the “ Court ”), a company limited by shares or a company limited by guarantee
and having a share capital may, if so authorised by its articles of association, by special
resolution reduce its share capital in any way.
(c) Financial assistance to purchase shares of a company or its holding company
There is no statutory restriction in the Cayman Islands on the provision of financial
assistance by a company to another person for the purchase of, or subscription for, its own or
its holding company’s shares. Accordingly, a company may provide financial assistance if the
directors of the company consider, in discharging their duties of care and acting in good faith,
for a proper purpose and in the interests of the company, that such assistance can properly be
given. Such assistance should be on an arm’s-length basis.
(d) Purchase of shares and warrants by a company and its subsidiaries
A company limited by shares or a company limited by guarantee and having a share
capital may, if so authorised by its articles of association, issue shares which are to be
redeemed or are liable to be redeemed at the option of the company or a shareholder and the
Companies Act expressly provides that it shall be lawful for the rights attaching to any shares
to be varied, subject to the provisions of the company’s articles of association, so as to provide
that such shares are to be or are liable to be so redeemed. In addition, such a company may,
if authorised to do so by its articles of association, purchase its own shares, including any
redeemable shares. However, if the articles of association do not authorise the manner and
terms of purchase, a company cannot purchase any of its own shares unless the manner and
terms of purchase have first been authorised by an ordinary resolution of the company. At no
time may a company redeem or purchase its shares unless they are fully paid. A company may
not redeem or purchase any of its shares if, as a result of the redemption or purchase, there
would no longer be any issued shares of the company other than shares held as treasury shares.
A payment out of capital by a company for the redemption or purchase of its own shares is not
lawful unless immediately following the date on which the payment is proposed to be made,
the company shall be able to pay its debts as they fall due in the ordinary course of business.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-20 –


--- page 553 ---
Shares purchased by a company is to be treated as cancelled unless, subject to the
memorandum and articles of association of the company, the directors of the company resolve
to hold such shares in the name of the company as treasury shares prior to the purchase. Where
shares of a company are held as treasury shares, the company shall be entered in the register
of members as holding those shares, however, notwithstanding the foregoing, the company is
not to be treated as a member for any purpose and must not exercise any right in respect of the
treasury shares, and any purported exercise of such a right shall be void, and a treasury share
must not be voted, directly or indirectly, at any meeting of the company and must not be
counted in determining the total number of issued shares at any given time, whether for the
purposes of the company’s articles of association or the Companies Act.
A company is not prohibited from purchasing and may purchase its own warrants subject
to and in accordance with the terms and conditions of the relevant warrant instrument or
certificate. There is no requirement under Cayman Islands law that a company’s memorandum
or articles of association contain a specific provision enabling such purchases and the directors
of a company may rely upon the general power contained in its memorandum of association to
buy and sell and deal in personal property of all kinds.
Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in
certain circumstances, may acquire such shares.
(e) Dividends and distributions
The Companies Act permits, subject to a solvency test and the provisions, if any, of the
company’s memorandum and articles of association, the payment of dividends and
distributions out of the share premium account. With the exception of the foregoing, there are
no statutory provisions relating to the payment of dividends. Based upon English case law,
which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of
profits.
No dividend may be declared or paid, and no other distribution (whether in cash or
otherwise) of the company’s assets (including any distribution of assets to members on a
winding up) may be made to the company, in respect of a treasury share.
(f) Protection of minorities and shareholders’ suits
The Courts ordinarily would be expected to follow English case law precedents which
permit a minority shareholder to commence a representative action against or derivative
actions in the name of the company to challenge (a) an act which is ultra vires the company
or illegal, (b) an act which constitutes a fraud against the minority and the wrongdoers are
themselves in control of the company, and (c) an irregularity in the passing of a resolution
which requires a qualified (or special) majority.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-21 –


--- page 554 ---
In the case of a company (not being a bank) having a share capital divided into shares,
the Court may, on the application of members holding not less than one fifth of the shares of
the company in issue, appoint an inspector to examine into the affairs of the company and to
report thereon in such manner as the Court shall direct.
Any shareholder of a company may petition the Court which may make a winding up
order if the Court is of the opinion that it is just and equitable that the company should be
wound up or, as an alternative to a winding up order, (a) an order regulating the conduct of the
company’s affairs in the future, (b) an order requiring the company to refrain from doing or
continuing an act complained of by the shareholder petitioner or to do an act which the
shareholder petitioner has complained it has omitted to do, (c) an order authorising civil
proceedings to be brought in the name and on behalf of the company by the shareholder
petitioner on such terms as the Court may direct, or (d) an order providing for the purchase of
the shares of any shareholders of the company by other shareholders or by the company itself
and, in the case of a purchase by the company itself, a reduction of the company’s capital
accordingly.
Generally claims against a company by its shareholders must be based on the general laws
of contract or tort applicable in the Cayman Islands or their individual rights as shareholders
as established by the company’s memorandum and articles of association.
(g) Disposal of assets
The Companies Act contains no specific restrictions on the power of directors to dispose
of assets of a company. However, as a matter of general law, every officer of a company, which
includes a director, managing director and secretary, in exercising his powers and discharging
his duties must do so honestly and in good faith with a view to the best interests of the company
and exercise the care, diligence and skill that a reasonably prudent person would exercise in
comparable circumstances.
(h) Accounting and auditing requirements
A company must cause proper books of account to be kept with respect to (i) all sums of
money received and expended by the company and the matters in respect of which the receipt
and expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the
assets and liabilities of the company.
Proper books of account shall not be deemed to be kept if there are not kept such books
as are necessary to give a true and fair view of the state of the company’s affairs and to explain
its transactions.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-22 –


--- page 555 ---
An exempted company must make available at its registered office in electronic form or
any other medium, copies of its books of account or parts thereof as may be required of it upon
service of an order or notice by the Tax Information Authority pursuant to the Tax Information
Authority Act of the Cayman Islands.
(i) Exchange control
There are no exchange control regulations or currency restrictions in the Cayman Islands.
(j) Taxation
Pursuant to the Tax Concessions Act of the Cayman Islands, the Company has obtained
an undertaking:
(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied
on profits, income, gains or appreciation shall apply to the Company or its
operations; and
(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall
not be payable on or in respect of the shares, debentures or other obligations of the
Company.
The undertaking for the Company is for a period of twenty years from 30 January 2024.
The Cayman Islands currently levy no taxes on individuals or corporations based upon
profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to the Company levied by the
Government of the Cayman Islands save for certain stamp duties which may be applicable,
from time to time, on certain instruments executed in or brought within the jurisdiction of the
Cayman Islands. The Cayman Islands are a party to a double tax treaty entered into with the
United Kingdom in 2010 but otherwise is not party to any double tax treaties.
(k) Stamp duty on transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands
companies except those which hold interests in land in the Cayman Islands.
(l) Loans to directors
There is no express provision in the Companies Act prohibiting the making of loans by
a company to any of its directors.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-23 –


--- page 556 ---
(m) Inspection of corporate records
The notice of registered office is a matter of public record. A list of the names of the
current directors and alternate directors (if applicable) is made available by the Registrar of
Companies for inspection by any person on payment of a fee. The register of mortgages is open
to inspection by creditors and members.
Members of the Company have no general right under the Companies Act to inspect or
obtain copies of the register of members or corporate records of the Company. They will,
however, have such rights as may be set out in the Company’s Articles.
(n) Register of members
An exempted company may maintain its principal register of members and any branch
registers at such locations, whether within or without the Cayman Islands, as the directors may,
from time to time, think fit. The register of members shall contain such particulars as required
by Section 40 of the Companies Act. A branch register must be kept in the same manner in
which a principal register is by the Companies Act required or permitted to be kept. The
company shall cause to be kept at the place where the company’s principal register is kept a
duplicate of any branch register duly entered up from time to time.
There is no requirement under the Companies Act for an exempted company to make any
returns of members to the Registrar of Companies of the Cayman Islands. The names and
addresses of the members are, accordingly, not a matter of public record and are not available
for public inspection. However, an exempted company shall make available at its registered
office, in electronic form or any other medium, such register of members, including any branch
register of members, as may be required of it upon service of an order or notice by the Tax
Information Authority pursuant to the Tax Information Authority Act of the Cayman Islands.
(o) Register of Directors and Officers
The Company is required to maintain at its registered office a register of directors and
officers which is not available for inspection by the public. A copy of such register must be
filed with the Registrar of Companies in the Cayman Islands and any change must be notified
to the Registrar within thirty (30) days of any change in such directors or officers.
(p) Beneficial Ownership Register
An exempted company is required to identify its beneficial owners and provide details of
these beneficial owners to its corporate service provider (“ CSP”) which maintains its
beneficial ownership register in the Cayman Islands. A beneficial owner is defined as an
individual who (a) ultimately owns or controls, whether through director or indirect ownership
or control 25% or more of the shares, voting rights, or partnership interests in the company,
(b) otherwise exercises ultimate effective control over the management of the company, or
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-24 –


--- page 557 ---
(c) is identified as exercising control of the company through other means. The beneficial
ownership register is not a public document and is only accessible by a designated competent
authority of the Cayman Islands although the Cayman Islands government may introduce
regulations to allow for public access in the future. An exempted company with its shares listed
on an approved stock exchange, which includes the Stock Exchange, may provide CSP with
details of the listed status as an alternative compliance route instead of providing details of its
beneficial owners. Accordingly, as long as the shares of the Company remain listed on the
Stock Exchange, the Company may opt for this alternative compliance route rather than
maintain a beneficial ownership register.
(q) Winding up
A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily, or
(c) under the supervision of the Court.
The Court has authority to order winding up in a number of specified circumstances
including where the members of the company have passed a special resolution requiring the
company to be wound up by the Court, or where the company is unable to pay its debts, or
where it is, in the opinion of the Court, just and equitable to do so. Where a petition is
presented by members of the company as contributories on the ground that it is just and
equitable that the company should be wound up, the Court has the jurisdiction to make certain
other orders as an alternative to a winding-up order, such as making an order regulating the
conduct of the company’s affairs in the future, making an order authorising civil proceedings
to be brought in the name and on behalf of the company by the petitioner on such terms as the
Court may direct, or making an order providing for the purchase of the shares of any of the
members of the company by other members or by the company itself.
A company (save with respect to a limited duration company) may be wound up
voluntarily when the company so resolves by special resolution or when the company in
general meeting resolves by ordinary resolution that it be wound up voluntarily because it is
unable to pay its debts. In the case of a voluntary winding up, such company is obliged to cease
to carry on its business (except so far as it may be beneficial for its winding up) from the time
of passing the resolution for voluntary winding up or upon the expiry of the period or the
occurrence of the event referred to above.
For the purpose of conducting the proceedings in winding up a company and assisting the
Court therein, there may be appointed an official liquidator or official liquidators; and the court
may appoint to such office such person, either provisionally or otherwise, as it thinks fit, and
if more persons than one are appointed to such office, the Court must declare whether any act
required or authorised to be done by the official liquidator is to be done by all or any one or
more of such persons. The Court may also determine whether any and what security is to be
given by an official liquidator on his appointment; if no official liquidator is appointed, or
during any vacancy in such office, all the property of the company shall be in the custody of
the Court.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-25 –


--- page 558 ---
As soon as the affairs of the company are fully wound up, the liquidator must make a
report and an account of the winding up, showing how the winding up has been conducted and
how the property of the company has been disposed of, and thereupon call a general meeting
of the company for the purposes of laying before it the account and giving an explanation
thereof. This final general meeting must be called by at least 21 days’ notice to each
contributory in any manner authorised by the company’s articles of association and published
in the Gazette.
(r) Reconstructions
There are statutory provisions which facilitate reconstructions and amalgamations
approved by (i) a majority in number representing seventy-five per cent. (75%) in value of
creditors, or (ii) seventy-five per cent. (75%) in value of shareholders or class of shareholders,
as the case may be, as are present at a meeting called for such purpose and thereafter sanctioned
by the Court. Whilst a dissenting shareholder would have the right to express to the Court his
view that the transaction for which approval is sought would not provide the shareholders with
a fair value for their shares, the Court is unlikely to disapprove the transaction on that ground
alone in the absence of evidence of fraud or bad faith on behalf of management.
The Companies Act also contains statutory provisions which provide that a company may
present a petition to the Court for the appointment of a restructuring officer on the grounds that
the company (a) is or is likely to become unable to pay its debts within the meaning of section
93 of the Companies Act; and (b) intends to present a compromise or arrangement to its
creditors (or classes thereof) either, pursuant to the Companies Act, the law of a foreign
country or by way of a consensual restructuring. The petition may be presented by a company
acting by its directors, without a resolution of its shareholders or an express power in its
articles of association. On hearing such a petition, the Court may, among other things, make
an order appointing a restructuring officer or make any other order as the Court thinks fit.
(s) Take-overs
Where an offer is made by a company for the shares of another company and, within four
(4) months of the offer, the holders of not less than ninety per cent. (90%) of the shares which
are the subject of the offer accept, the offeror may at any time within two (2) months after the
expiration of the said four (4) months, by notice in the prescribed manner require the dissenting
shareholders to transfer their shares on the terms of the offer. A dissenting shareholder may
apply to the Court within one (1) month of the notice objecting to the transfer. The burden is
on the dissenting shareholder to show that the Court should exercise its discretion, which it will
be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the
offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing
out minority shareholders.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-26 –


--- page 559 ---
(t) Indemnification
Cayman Islands law does not limit the extent to which a company’s articles of association
may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Court to be contrary to public policy (e.g. for purporting to
provide indemnification against the consequences of committing a crime).
(u) Economic Substance Requirements
Pursuant to the International Tax Cooperation (Economic Substance) Act of the Cayman
Islands (“ES Act”) that came into force on 1 January 2019, a “relevant entity” is required to
satisfy the economic substance test set out in the ES Act. A “relevant entity” includes an
exempted company incorporated in the Cayman Islands as is the Company; however, it does
not include an entity that is tax resident outside the Cayman Islands. Accordingly, for so long
as the Company is a tax resident outside the Cayman Islands, including in Hong Kong, it is not
required to satisfy the economic substance test set out in the ES Act.
4. GENERAL
Conyers Dill & Pearman, the Company’s special legal counsel on Cayman Islands law,
have sent to the Company a letter of advice summarising certain aspects of Cayman Islands
company law. This letter, together with a copy of the Companies Act, is available for inspection
as referred to in the paragraph headed “Documents available on display” in Appendix V to this
prospectus. Any person wishing to have a detailed summary of Cayman Islands company law
or advice on the differences between it and the laws of any jurisdiction with which he is more
familiar is recommended to seek independent legal advice.
APPENDIX III SUMMARY OF CONSTITUTION OF OUR COMPANY
AND CAYMAN ISLAND COMPANY LA W
– III-27 –


--- page 560 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation of our Company
Our Company was incorporated as an exempted company with limited liability in the
Cayman Islands on January 9, 2024. We were registered as a non-Hong Kong company under
Part 16 of the Companies Ordinance on November 22, 2024 with the Registrar of Companies
in Hong Kong and our head office and principal place of business in Hong Kong is 22/F,
Enterprise Square Two, No. 3 Sheung Y uet Road, Kowloon, Hong Kong. Mr. Chu has been
appointed as the authorized representative of our Company for the acceptance of service of
process in Hong Kong. The address for service of process is 22/F, Enterprise Square Two, No.
3 Sheung Y uet Road, Kowloon, Hong Kong.
As our Company was incorporated in the Cayman Islands, it operates subject to the
Cayman Companies Act and its constitution comprises the Memorandum and Articles of
Association. A summary of the Memorandum and Articles of Association and relevant aspects
of the Companies Act is set forth in Appendix III to this prospectus.
2. Changes in share capital of our Company
As of the date of incorporation, our Company had an authorized share capital of
HK$380,000 divided into 380,000,000 shares with par value of HK$0.001 each. On the date
of incorporation, the initial subscriber subscribed for, and our Company issued and allotted, the
one subscriber Share. On the same date, the one initial Share was transferred from the initial
subscriber to Eternal International for a consideration at par value.
On June 18, 2024, our Company allotted and issued one Share credited as fully paid at
par to Eternal International.
On June 6, 2025, the authorized share capital of our Company was increased from
HK$380,000 divided into 380,000,000 Shares of a par value of HK$0.001 each to
HK$7,000,000 divided into 7,000,000,000 Shares of a par value of HK$0.001 each by the
creation of an additional of 6,620,000,000 Shares of par value of HK$0.001 each.
Immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option and any options which may be granted under the Share Option Scheme),
the authorized share capital of our Company will be HK$7,000,000 divided into 7,000,000,000
Shares, of which 1,333,400,000 Shares will be issued fully paid or credited as fully paid, and
5,666,600,000 Shares will remain unissued. Other than pursuant to the general mandate to issue
Shares referred to in the paragraph headed “— A. Further Information about our Group — 4.
Resolutions in writing of our then sole Shareholder passed on June 6, 2025” in this Appendix,
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1–


--- page 561 ---
our Directors do not have any present intention to issue any of the authorized but unissued
share capital of our Company and, without prior approval of our Shareholders in general
meetings, no issue of Shares will be made which would effectively alter the control of our
Company.
Save as disclosed above, there has been no alteration in the share capital of our Company
during the two years immediately preceding the date of this prospectus.
3. Changes in the share capital of our subsidiaries
A summary of the corporate information and the particulars of our subsidiaries are set out
in note 1.2 to the Accountant’s Report as set out in Appendix I to this prospectus.
Save as disclosed above and in the section headed “History, Development and Corporate
Structure”, there has been no alteration in the share capital of any of the subsidiaries of our
Company within the two years immediately preceding the date of this prospectus.
4. Resolutions in writing of our then sole Shareholder passed on June 6, 2025
Pursuant to the written resolutions of the then sole Shareholder of our Company entitled
to vote at general meetings of our Company, which were passed on June 6, 2025:
(a) our Company approved and adopted the Memorandum of Association with
immediate effect;
(b) our Company approved and conditionally adopted the Articles of Association with
effect from the Listing Date;
(c) the authorized share capital of our Company was increased from HK$380,000
divided into 380,000,000 Shares to HK$7,000,000 divided into 7,000,000,000
Shares by the creation of an additional 6,620,000,000 Shares;
(d) conditional upon (i) the Listing Committee of the Stock Exchange granting the
listing of, and permission to deal in, on the Main Board, our Shares in issue and to
be issued (pursuant to the Capitalization Issue, the Global Offering, the Over-
allotment Option, the Pre-IPO Share Option Scheme, and the Share Option Scheme)
as mentioned in this prospectus; and (ii) the obligations of the Underwriters under
the Underwriting Agreements becoming unconditional (including, if relevant, as a
result of the waiver of any condition(s)) and the Underwriting Agreements not being
terminated in accordance with the terms of the Underwriting Agreements or
otherwise:
(i) conditional on the share premium account of our Company being credited as a
result of the Global Offering, the sum of HK$999,999.998 be capitalized and
applied in paying up in full at par value 999,999,998 Shares for allotment and
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2–


--- page 562 ---
issue to our Shareholders whose names were on the register of members of our
Company immediately prior to the Global Offering and such Shares (or as they
may direct) to be allotted and issued pursuant to this resolution shall rank pari
passu in all respect with the existing issued Shares;
(ii) the Global Offering and the Over-allotment Option were approved and our
Directors were authorized to allot and issue the Offer Shares and the Shares as
may be required to be allotted and issued upon the exercise of the Over-
allotment Option on and subject to the terms and conditions stated in this
prospectus and in the relevant application forms;
(iii) the rules of the Share Option Scheme were approved and adopted, and our
Directors or any committee thereof established by the Board were authorized,
at their sole discretion, to: (1) administer the Share Option Scheme; (2)
modify/amend the Share Option Scheme from time to time as requested by the
Stock Exchange; (3) grant options to subscribe for Shares under the Share
Option Scheme up to the limits referred to in the Share Option Scheme; (4)
allot, issue and deal with Shares pursuant to the exercise of any option which
may be granted under the Share Option Scheme; (5) make application at the
appropriate time or times to the Stock Exchange for the listing of, and
permission to deal in, any Shares or any part thereof that may hereafter from
time to time be issued and allotted pursuant to the exercise of the options
granted under the Share Option Scheme; and (6) take all such actions as they
consider necessary, desirable or expedient to implement or give effect to the
Share Option Scheme;
(iv) a general unconditional mandate was granted to our Directors to exercise all
the powers of our Company to allot, issue and deal with (including the power
to make an offer or agreement, or grant securities which would or might
require Shares to be allotted and issued), otherwise than by way of Rights
Issue, or pursuant to any scrip dividend schemes or similar arrangements
providing for the allotment and issue of Shares in lieu of the whole or part of
a dividend on Shares in accordance with the Articles or pursuant to the issue
of Shares upon the exercise of any subscription rights attached to any warrants
of our Company or pursuant to the exercise of options granted under the
Pre-IPO Share Option Scheme, the Share Option Scheme or any other option
scheme(s) or similar arrangement for the time being adopted for the grant or
issue to Directors and/or officers and/or employees of our Group or rights to
acquire Shares or pursuant to a specific authority granted by our Shareholders
in general meeting, the number of Shares not exceeding 20% of the total
number of Shares in issue (excluding treasury Shares) immediately following
the completion of the Capitalization Issue and the Global Offering (assuming
the Over-allotment Option is not exercised, and without taking into account
any Shares which may be allotted and issued upon the exercise of any options
granted under the Pre-IPO Share Option Scheme and any options which may
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3–


--- page 563 ---
be granted under the Share Option Scheme), until the conclusion of the next
annual general meeting of our Company, unless renewed by an ordinary
resolution of our Shareholders in a general meeting, either unconditionally or
subject to conditions or the expiration of the period within the next annual
general meeting of our Company is required by the Articles of Association or
any applicable law of the Cayman Islands to be held or the passing of an
ordinary resolution by our Shareholders in general meetings of our Company
varying, revoking or renewing the authority given to the Directors, whichever
occurs first; for the purpose of this paragraph, “ Rights Issue ” means an offer
of shares in our Company, or offer or issue of warrants, options or other
securities giving rights to subscribe for shares open for a period fixed by our
Directors to holders of shares in our Company on the register on a fixed record
date in proportion to their holdings of shares (subject to such exclusion or other
arrangements as our Directors may deem necessary or expedient in relation to
fractional entitlements, or having regard to any restrictions or obligations
under the laws of, or the requirements of, or the expense or delay which may
be involved in determining the existence or extent of any restrictions or
obligations under the laws of, or the requirements of, any jurisdiction
applicable to our Company, or any recognized regulatory body or any stock
exchange applicable to our Company). References to an allotment, issue, and
dealing of Shares or securities herein shall include a sale or transfer of treasury
Shares;
(v) a general unconditional mandate be and is hereby granted to our 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 (“ Repurchase Mandate ”), an aggregate number of Shares not
exceeding 10% of the total number of Shares in issue (excluding treasury
Shares) immediately following the completion of the Capitalization Issue and
the Global Offering (assuming the Over-allotment Option is not exercised, and
without taking into account any Shares which may be allotted and issued upon
the exercise of any options granted under the Pre-IPO Share Option Scheme
and any options which may be granted under the Share Option Scheme), until
the conclusion of the next annual general meeting of our Company, unless
renewed by an ordinary resolution of our Shareholders in a general meeting,
either unconditionally or subject to conditions or the expiration of the period
within which the next annual general meeting of our Company is required by
the Articles of Association of our Company or any applicable law of the
Cayman Islands to be held or the passing of an ordinary resolution by our
Shareholders in a general meeting of our Company varying, revoking or
renewing the authority given to the Directors, whichever occurs first; and
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4–


--- page 564 ---
(vi) the extension of the general mandate to allot, issue and deal with Shares as
mentioned in paragraph (c)(iv) above by the addition to the total number of
Shares which may be allotted or agreed conditionally or unconditionally to be
allotted by our Directors pursuant to such general mandate of an amount
representing the total number of Shares repurchased by our Company pursuant
to paragraph (c)(v) above, provided that such extended amount shall not
exceed 10% of the total number of Shares in issue (excluding treasury Shares)
immediately following the completion of the Capitalization Issue and the
Global Offering (assuming the Over-allotment Option is not exercised, and
without taking into account any Shares which may be allotted and issued upon
the exercise of any options granted under the Pre-IPO Share Option Scheme
and any options which may be granted under the Share Option Scheme).
5. Repurchase of our Shares
The following paragraphs include, among others, certain information required by the
Stock Exchange to be included in this prospectus concerning the repurchase of our own
securities.
(a) Provision 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 most
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 a general meeting, either by way
of general mandate or by specific approval of a particular transaction.
Pursuant to a resolution passed by our then sole Shareholder on June 6, 2025, the
Repurchase Mandate was given to our Directors authorizing them to exercise all powers
of our Company to repurchase Shares 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, with a total of up to 10% of the
aggregate number of our Shares in issue (excluding treasury Shares) immediately
following the completion of the Capitalization Issue and the Global Offering (assuming
the Over-allotment Option is not exercised, and without taking into account any Shares
which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share
Option Scheme), with such mandate to expire at the earliest of (i) the conclusion of the
next annual general meeting of our Company (unless otherwise renewed by an ordinary
resolution of our Shareholders in a general meeting, either unconditionally or subject to
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 5–


--- page 565 ---
conditions), (ii) the expiration of the period within which our Company’s next annual
general meeting is required by the Articles of Association or any other applicable laws to
be held, and (iii) the date when it is varied or revoked by an ordinary resolution of our
Shareholders in general meeting.
(ii) Source of funds
Purchases must be funded out of funds legally available for the purpose in
accordance with the Memorandum and Articles of Association and the applicable laws
and regulations of Hong Kong and the Cayman Islands. A listed company may not
purchase 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
from time to time. As a matter of Cayman Islands law, any purchases by the Company
may be made out of profits or out of the proceeds of a new issue of shares made for the
purpose of the purchase or from sums standing to the credit of our share premium account
or out of capital, if so authorized by the Articles of Association and subject to the Cayman
Companies Act. Any premium payable on the purchase over the par value of the shares
to be purchased must have been provided for out of profits or from sums standing to the
credit of our share premium account or out of capital, if so authorized by the Articles of
Association and subject to the Cayman Companies Act.
(iii) 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 (excluding treasury Shares).
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.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 6–


--- page 566 ---
(iv) Status of repurchased shares
Under the laws of the Cayman Islands, the Shares repurchased may (i) be treated by
our Company as cancelled; or (ii) be held by our Company as treasury shares, and in each
case the aggregate amount of authorized share capital would not be reduced.
Our Company may re-deposit its treasury Shares into CCASS established and
operated by HKSCC only if it has an imminent plan to resell them on the Stock Exchange,
and it should complete the resale as soon as possible. For any treasury shares deposited
with CCASS pending resale on the Stock Exchange, our Company will have appropriate
measures to ensure that it would not exercise any Shareholders’ rights or receive any
entitlements which would otherwise be suspended under the relevant laws with respect to
treasury shares. These measures include, for example, an approval by the Board that (i)
our Company should procure its broker not to give any instructions to HKSCC to vote at
general meetings for the treasury shares deposited with CCASS pending resale; and (ii)
in the case of dividends or distributions, our Company should withdraw the treasury
shares from CCASS, and either re-register them in our Company’s name as treasury
shares or cancel them, in each case before the record date for the dividends or
distributions.
Holders of treasury shares (if any) shall abstain from voting on matters that require
Shareholders’ approval at the Company’s general meetings.
(v) Suspension of repurchase
A listed company may not make any repurchase of securities after a price sensitive
development has occurred or has been the subject of a decision until such time as the price
sensitive 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.
(vi) 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
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 7–


--- page 567 ---
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.
(vii) Core connected persons
The Listing Rules prohibit a company from knowingly purchasing securities on the
Stock Exchange from a “core connected person”, that is, a director, chief executive or
substantial shareholder of the company or any of its subsidiaries or a close associate of
any of them (as defined in the Listing Rules) and a core connected person shall not
knowingly sell his securities to the company.
(b) Reasons for repurchases
Our Directors believe that it is in the best interests of our Company and Shareholders for
our Directors to have a general authority from the Shareholders to enable our Company to
repurchase Shares in the market. Such repurchases may, depending on market conditions and
funding arrangements at the time, lead to an enhancement of the net asset value per Share or
earnings per Share and will only be made where our Directors believe that such repurchases
will benefit our Company and Shareholders.
(c) Funding of repurchases
Repurchase of the Shares must be funded out of funds legally available for such purpose
in accordance with the Articles and the applicable laws of the Cayman Islands.
Our Directors may not repurchase the Shares on the Stock Exchange for a consideration
other than cash or for settlement otherwise than in accordance with the trading rules of the
Stock Exchange. Subject to the foregoing, our Directors may make repurchases with profits of
the Company or out of a new issuance of shares made for the purpose of the repurchase or, if
authorized by the Articles of Association and subject to the Cayman Companies Act, out of
capital and, in the case of any premium payable on the repurchase, out of profits of our
Company or from sums standing to the credit of the share premium account of our Company
or, if authorized by the Articles of Association and subject to Cayman Companies Act, out of
capital.
However, our Directors do not propose to exercise the general mandate to such an extent
as would, in the circumstances, have a material adverse effect on the working capital
requirements of our Company or its gearing levels which, in the opinion of our Directors, are
from time to time appropriate for our Company.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 8–


--- page 568 ---
(d) General
The exercise in full of the Repurchase Mandate, on the basis of 1,333,400,000 Shares in
issue immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), could accordingly result in up to approximately 133,340,000 Shares being
repurchased by our Company during the period prior to the earliest of:
 the conclusion of the next annual general meeting of our Company unless renewed
by an ordinary resolution of our Shareholders in a general meeting, either
unconditionally or subject to conditions;
 the expiration of the period within which our Company’s next annual general
meeting is required by the Articles of Association or any other applicable laws to be
held; or
 the date on which it is varied or revoked by an ordinary resolution of our
Shareholders in a general meeting.
None of our 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.
Our Directors have undertaken to the Stock Exchange that, so far as the same may be
applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules
and the applicable laws in the Cayman Islands.
If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest in the
voting rights of our Company increases, such increase will be treated as an acquisition for the
purposes of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting
in concert could obtain or consolidate control of our Company and become obliged to make a
mandatory offer in accordance with Rule 26 of the Takeovers Code. Save as aforesaid, our
Directors are not aware of any consequences which would arise under the Takeovers Code as
a consequence of any repurchases pursuant to the Repurchase Mandate.
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 granted
other than in exceptional circumstances.
No core 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.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 9–


--- page 569 ---
B. CORPORATE REORGANIZATION
Please refer to the section headed “History, Development and Corporate Structure —
Corporate Development and Reorganization” in this prospectus.
C. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following contracts (not being contracts entered into in the ordinary course of
business) have been entered into by us or any of our subsidiaries within the two years preceding
the date of this prospectus that are or may be material:
(a) a sale and purchase agreement dated May 22, 2025 entered into between Eternal
BVI, Kering Beauté SAS (“ Kering ”) and Eternal Far East, pursuant to which
Eternal BVI agreed to dispose of, and Kering agreed to acquire, 100% issued share
capital of E&C Holdings at a total consideration of RMB82.5 million;
(b) a deed of termination dated May 22, 2025 entered into between Fontaine Limited,
Eternal BVI, Mr. Lau, Eternal Far East and E&C Holdings, pursuant to which the
parties agreed to (i) terminate a China strategy and options agreement entered into
between the parties on 21 December 2021 and subsequently varied by a deed of
variation and novation dated 24 November 2023 (the “ Amended CSOA ”); and (ii)
release Mr. Lau from his liabilities and obligations under the Amended CSOA and
a distribution agreement entered into between Fontaine Limited and Eternal Far East
on 21 December 2021; and
(c) the Hong Kong Underwriting Agreement.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 0–


--- page 570 ---
2. Material intellectual property rights of our Group
As of the Latest Practicable Date, our Group has registered, or has applied for the
registration of the following intellectual property rights which were material to our Group’s
business.
(a) Trademarks in Hong Kong
As of the Latest Practicable Date, we have registered the following trademarks in Hong
Kong which, in the opinion of our Directors, are material to our business:
No. Trademarks Registered Owner
Registered
Class
Registration
Number
Expiry Date
(mm/dd/yyyy)
1 /H1118/H1118
 Eternal Far East 3/7/9/25/35/44 304580604 06/28/2028
2 /H1118/H1118
 Eternal Far East 3//35/42/44 305515326 01/24/2031
3 /H1118/H1118
 Eternal Far East 3/9 305554864 03/07/2031
4 /H1118/H1118
 Eternal Far East 3/9 305554873 03/07/2031
5 /H1118/H1118
 Eternal Far East 9 200002274 05/19/2026
6 /H1118/H1118
 Moral Happiness 35 305987134 06/16/2032
7 /H1118/H1118
 Moral Happiness 35 305987152 06/16/2032
8 /H1118/H1118
 Eternal Far East 3/7/9/25/35/44 306503274 03/18/2034
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 1–


--- page 571 ---
(b) Trademarks in the PRC
As of the Latest Practicable Date, we have registered the following trademarks in PRC
which, in the opinion of our Directors, are material to our business:
No. Trademarks Registered Owner
Registered
Class
Registration
Number
Expiry Date
(mm/dd/yyyy)
1 /H1118/H1118
 Eternal Shanghai Trading 3;5;9;16;21;35;
39;42
49261309 06/06/2031
2 /H1118/H1118
 Eternal China Trading 3 13205568 01/20/2035
3 /H1118/H1118
 Eternal China Trading 9 13205593 01/20/2035
4 /H1118/H1118
 Eternal China Trading 16 13205615 01/20/2035
5 /H1118/H1118
 Eternal China Trading 35 13205659 01/06/2035
6 /H1118/H1118
 Eternal China Trading 42 13205705 01/27/2035
7 /H1118/H1118
 Eternal China Trading 44 13205741 05/20/2035
8 /H1118/H1118
 Eternal China Trading 44 19850859 06/20/2027
9 /H1118/H1118
 Eternal China Trading 9 20907706 09/27/2027
10 /H1118
 Eternal China Trading 16 20907723 09/27/2027
11 /H1118
 Eternal China Trading 42 20907625 12/06/2027
12 /H1118
 Eternal China Trading 44 20907409 12/06/2027
13 /H1118
 Eternal China Trading 3;9;25;35;44 30872859 05/06/2029
14 /H1118
 Eternal China Trading 35 14171010 05/06/2035
15 /H1118
 Eternal China Trading 9;18;22;25-26;
44
32979770A 10/13/2029
16 /H1118
 Eternal China Trading 3 33549814 06/27/2030
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 2–


--- page 572 ---
No. Trademarks Registered Owner
Registered
Class
Registration
Number
Expiry Date
(mm/dd/yyyy)
17 /H1118
 Eternal China Trading 3 33549814A 09/06/2029
18 /H1118
 Eternal China Trading 9;18;22;25-26;
35;44
34127603A 11/06/2029
19 /H1118
 Eternal China Trading 9;18;22;25-26;
35;44
34127604A 11/06/2029
20 /H1118
 Eternal China Trading 9;18;22;25-26;
35;44
34127605A 11/06/2029
21 /H1118
 Eternal China Trading 3 44874327 12/27/2030
22 /H1118
 Eternal China Trading 3;5;9;16;21;
35;39;42
48852482A 05/06/2031
23 /H1118
 Eternal China Trading 3;35 60873102 05/13/2032
24 /H1118
 Eternal China Trading 9 65820042 01/13/2033
25 /H1118
 Eternal China Trading 9 1338776 11/27/2029
26 /H1118
 Eternal China Trading 9 7112485 10/13/2030
27 /H1118
 Eternal China Trading 9 15419253 11/06/2025
28 /H1118
 Eternal China Trading 9 15418937 11/06/2025
29 /H1118
 Eternal China Trading 9 15418930 11/06/2025
30 /H1118
 Eternal China Trading 9 15419655 11/06/2025
31 /H1118
 Eternal China Trading 35 15937571 02/20/2026
32 /H1118
 Eternal China Trading 9 17210152 08/20/2026
33 /H1118
 Eternal China Trading 9 19847930 06/20/2027
34 /H1118
 Eternal China Trading 3 21477285 11/20/2027
35 /H1118
 Eternal China Trading 16 21477678 11/20/2027
36 /H1118
 Eternal China Trading 18 21477837 11/20/2027
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 3–


--- page 573 ---
No. Trademarks Registered Owner
Registered
Class
Registration
Number
Expiry Date
(mm/dd/yyyy)
37 /H1118
 Eternal China Trading 28 21478215 01/13/2028
38 /H1118
 Eternal China Trading 9 22760587 02/20/2028
39 /H1118
 Eternal China Trading 9 24490974 06/13/2028
40 /H1118
 Eternal China Trading 35 24588789 08/20/2028
41 /H1118
 Eternal China Trading 9 24588817 08/20/2028
42 /H1118
 Eternal China Trading 16 24591073 01/06/2029
43 /H1118
 Eternal China Trading 9 30872858 03/20/2029
44 /H1118
 Eternal China Trading 3;35;42;44 49807842 09/13/2031
45 /H1118
 Eternal China Trading 3;35;42;44 49811718 05/27/2031
46 /H1118
 Eternal China Trading 10 50713161 06/20/2031
47 /H1118
 Eternal China Trading 35;44 50901756 09/27/2032
48 /H1118
 Eternal China Trading 3;42;44 50901756A 08/20/2031
49 /H1118
 Eternal China Trading 3;5;9;16;21;
35;39;42
51938017 08/20/2031
50 /H1118
 Eternal China Trading 3;9;35 53252575 09/06/2031
51 /H1118
 Eternal China Trading 3 53273692 02/13/2032
52 /H1118
 Eternal China Trading 3;9;35 53273692A 10/20/2031
53 /H1118
 Eternal China Trading 3 53257968 03/06/2032
54 /H1118
 Eternal China Trading 3;35 53257968A 10/27/2031
55 /H1118
 Eternal China Trading 3 53273733 03/13/2032
56 /H1118
 Eternal China Trading 3;35 53273733A 10/20/2031
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 4–


--- page 574 ---
No. Trademarks Registered Owner
Registered
Class
Registration
Number
Expiry Date
(mm/dd/yyyy)
57 /H1118
 Eternal China Trading 41;44 58321973A 04/27/2032
58 /H1118
 Eternal China Trading 3 65746940 01/27/2033
59 /H1118
 Eternal China Trading 4 65863495 12/27/2032
60 /H1118
 Eternal China Trading 35;42;44 60487889 05/06/2032
61 /H1118
 Eternal China Trading 3;35 60908147 07/27/2032
62 /H1118
 Eternal China Trading 3;35 65967567 05/06/2033
63 /H1118
 Eternal China Trading 3-4;35;42;44 66029634 01/13/2033
64 /H1118
 Eternal China Trading 3-4;35;42;44 66034725 01/06/2033
65 /H1118
 Eternal China Trading 3;4;5;9;10;35;
38;41;42;44
69506460 09/06/2033
66 /H1118
 Eternal China Trading 3;5;9;10;35;
38;41;42;44
70589236 11/13/2033
67 /H1118
 Eternal China Trading 5 70561710 10/06/2033
68 /H1118
 Eternal China Trading 44 19850859 06/20/2027
69 /H1118
 Eternal China Trading 21 51999988 08/13/2031
70 /H1118
 Eternal China Trading 35 58321973 08/13/2033
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 5–


--- page 575 ---
(c) Copyrights
As of the Latest Practicable Date, we have registered the following copyrights which, in
the opinion of our Directors, are material to our business:
No. Copyrights Registered Owner
Registration
Number
Registration
Date
(mm/dd/yyyy)
1 /H1118/H1118၍ଣӻ୕V1.0 Eternal Shanghai Digintelligence
Hangzhou Branch
2023SR0420416 03/30/2023
2 /H1118/H1118ETERNAL Eternal China Trading ਷Ъ೮ο-2022-F-
10217075
10/27/2022
3 /H1118/H1118͑㛬ʘ˚ Eternal China Trading ਷Ъ೮ο-2022-F-
10216736
10/27/2022
4 /H1118/H1118Ꮄඩ͑㛬 Eternal China Trading ਷Ъ೮ο-2022-F-
10217074
10/27/2022
(d) Patents
As of the Latest Practicable Date, we have registered the following patents which, in the
opinion of our Directors, are material to our business:
No. Registered Owner Patent Name Patent Number
Application
Date
(mm/dd/yyyy)
1 /H1118/H1118Eternal China Trading ɓ၇ೌᑮകᗝ໔ഐ࿴ ZL202222157852.4 08/16/2022
2 /H1118/H1118Eternal China Tradingᗝၺഐ࿴ ZL202021949681.3 09/08/2020
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 6–


--- page 576 ---
(e) Domain Names
As of the Latest Practicable Date, we have registered the following domain names which,
in the opinion of our Directors, are material to our business:
No. Domain Name Registered Owner
Expiry Date
(mm/dd/yyyy)
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118eternal.cn Eternal Shanghai Trading 04/04/2033
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118eternalsys.com Eternal Shanghai Trading 04/28/2033
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118m21g.cn Eternal Shanghai
Digintelligence
Hangzhou Branch
11/10/2027
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118m21g.net Eternal Shanghai
Digintelligence
Hangzhou Branch
11/10/2027
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118m21g.com Eternal Shanghai
Digintelligence
Hangzhou Branch
11/10/2027
6 /H1118/H1118/H1118/H1118/H1118/H1118/H1118m21g.com.cn Eternal Shanghai
Digintelligence
Hangzhou Branch
11/10/2027
7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118eternal.hk Eternal Far East 09/29/2026
8 /H1118/H1118/H1118/H1118/H1118/H1118/H1118orlane.com.hk Eternal Far East 02/13/2028
9 /H1118/H1118/H1118/H1118/H1118/H1118/H1118santamonicaeyewear.com Eternal Far East 06/21/2028
10 /H1118/H1118/H1118/H1118/H1118/H1118eternal-op.com.hk Eternal Far East 01/16/2029
11 /H1118/H1118/H1118/H1118/H1118/H1118academie.com.hk Eternal Far East 06/16/2026
D. FURTHER INFORMATION OF OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Directors’ Service Contracts and Appointment Letters
(a) Executive Directors
Each of the executive Directors has entered into a service contract with our Company
pursuant to which they agreed to act as executive Directors for a term of three years with effect
from the Listing Date, renewable by mutual consent. The office of a Director is liable to be
vacated in certain circumstances pursuant to the Articles of Association. The appointment of
each of the executive Directors may be terminated by either party by giving at least three
months’ written notice to the other. The appointments are subject to the provisions of
retirement and rotation of Directors under the Articles of Association.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 7–


--- page 577 ---
(b) Independent non-executive Directors
Each of the independent non-executive Directors has signed a letter of appointment with
us for a term of one year commencing from the Listing Date, renewable by mutual consent. The
appointment of each of the independent non-executive Directors may be terminated by either
party giving at least three months’ written notice to the other. The appointments are subject to
the provisions of retirement and rotation of Directors under the Articles of Association.
2. Directors’ Remuneration
For details of our Directors’ remuneration, see “Directors and Senior Management —
Remuneration of Directors and Senior Management” in this prospectus and Note 34 to the
Accountant’s Report as set out in Appendix I to this prospectus.
3. Disclosure of interests
(a) Interests and short positions of our Directors or our chief executive officer in our share
capital and our associated corporations immediately following the completion of the
Capitalization Issue and the Global Offering
Immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), the interests or short positions of our Directors or chief executives in the Shares,
underlying Shares and debentures of our Company or its associated corporations (within the
meaning of Part XV of the SFO) which will be required to be notified to us 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 required, pursuant to section 352 of the SFO, to be recorded in the register referred to
therein, or which will be required to be notified to our Company and the Stock Exchange
pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out
in Appendix C3 of the Listing Rules, are listed will be as follows:
Name
Capacity/Nature of
Interest
Immediately following the completion
of the Capitalization Issue and the
Global Offering (2)
Number of
Shares (1)
Approximate
percentage of
shareholding in
our Company
Mr. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporation (3)(4)
1,000,000,000 75.00%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 8–


--- page 578 ---
Name
Capacity/Nature of
Interest
Immediately following the completion
of the Capitalization Issue and the
Global Offering (2)
Number of
Shares (1)
Approximate
percentage of
shareholding in
our Company
Ms. Lam /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner (4) 6,380,000 0.4785%
Ms. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner (4) 3,189,000 0.2392%
Mr. Chu /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner (4) 1,282,000 0.0961%
Notes:
(1) All interests stated are long positions.
(2) Assuming the Over-allotment Option is not exercised, and without taking into account any options
granted under the Pre-IPO Share Option Scheme and any options which may be granted under the Share
Option Scheme.
(3) Eternal International is owned as to 90% by Mr. Lau and 10% by Mrs. Lau. By virtue of the SFO, Mr.
Lau is therefore deemed to be interested in all the Shares in which Eternal International is interested in.
(4) These Shares represent the Shares to be issued upon the exercise of options granted under the Pre-IPO
Share Option Scheme.
(b) Interests and short positions discloseable under Divisions 2 and 3 of Part XV of the
SFO
Immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme), so far as our Directors are aware, the following persons (not being our Director or
chief executives of our Company) are expected to have interests or short positions in our
Shares or underlying Shares which are required to be disclosed to our Company under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or interested in 10% or more of the
issued voting shares of any class of share capital carrying rights to vote in all circumstances
at general meetings of any other members of our Group:
Name
Capacity/Nature of
Interest
Immediately following the completion
of the Capitalization Issue and the
Global Offering (2)
Number of
Shares (1)
Approximate
percentage of
shareholding in
our Company
Eternal International /H1118/H1118/H1118/H1118Beneficial owner 1,000,000,000 75.00%
Mrs. Lau /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest of spouse (3) 1,000,000,000 75.00%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 9–


--- page 579 ---
Notes:
(1) All interests stated are long positions.
(2) Assuming the Over-allotment Option is not exercised, and without taking into account any options
granted under the Pre-IPO Share Option Scheme and any options which may be granted under the Share
Option Scheme.
(3) Mrs. Lau is the spouse of Mr. Lau. By virtue of the SFO, Mrs. Lau is therefore deemed to be interested
in all the Shares that Mr. Lau is interested in.
If the Over-allotment Option is fully exercised, the interest of each of Eternal
International, Mr. Lau and Mrs. Lau in our Shares will be approximately 71.57%, 71.57% and
71.57%, respectively.
5. Disclaimers
Save as disclosed in this prospectus and as of the Latest Practicable Date:
(a) none of our Directors nor any of the parties listed in the section headed “G. Other
Information — 8. Qualifications of Experts” of this Appendix was interested in,
directly or indirectly, in the promotion of, or in any assets which have been, within
two years immediately preceding the date of this prospectus, acquired or disposed
of by or leased to us, or are proposed to be acquired or disposed of by or leased to
any member of our Group;
(b) save in connection with the Underwriting Agreements, none of our Directors nor any
of the parties listed in the section headed “G. Other Information — 8. Qualifications
of Experts” of this Appendix was materially interested in any contract or
arrangement subsisting at the date of this prospectus which is significant in relation
to the business of our Group taken as a whole;
(c) save in connection with the Underwriting Agreements, none of the parties listed in
the section headed “G. Other Information — 8. Qualifications of Experts” below is
interested legally or beneficially in any securities of our Company or any member
of our Group; or has any right (whether legally enforceable or not) to subscribe for
or to nominate persons to subscribe for securities of our Company or any member
of our Group;
(d) none of our Directors or their respective close associates or any Shareholders of our
Company (who to the knowledge of out Directors owns more than 5% of the number
of our issued shares) has any interest in our five largest suppliers or our five largest
customers in each year during the Track Record Period.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 0–


--- page 580 ---
E. PRE-IPO SHARE OPTION SCHEME
1. Material terms of Pre-IPO Share Option Scheme
The following is a summary of the principal terms of the Pre-IPO Share Option Scheme
of the Company adopted and approved by the then Shareholder with effect from June 18, 2024.
The terms of the Pre-IPO Share Option are not subject to the provisions of Chapter 17 of the
Listing Rules as it does not involve any grant of awards by our Company after the Listing to
subscribe for new Shares. Terms defined and used under this sub-section headed “Pre-IPO
Share Option Scheme” shall apply to this sub-section only.
(a) Purpose
The purpose of the Pre-IPO Share Option Scheme is to recognize the contributions by
certain eligible participant(s) and to give incentives thereto in order to retain and motivate
them for the continual operation and development of our Group; and to attract suitable
personnel for further development of our Group, by providing them with the opportunity to
acquire equity interests in our Company.
(b) Participants
The participants of the Pre-IPO share Option Scheme shall be management personnel,
full-time and part-time employee(s) of any member of our Group.
(c) Administration
The Pre-IPO Share Option Scheme shall be subject to the administration of our Board
and/or the Trustee in accordance with the rules of the Pre-IPO Share Option Scheme and the
Trust Deed. The decision of our Board and/or the Trustee on all matters arising in relation to
the Scheme or its interpretation or effect shall (save as otherwise provided in the Pre-IPO Share
Option Scheme) be final and binding on all parties. The Board may delegate any or all of its
powers in relation to the Scheme to any of its committees.
Eternal Beauty Investment Limited is a company incorporated in BVI and wholly-owned
by Futu Trustee Limited (the “Trustee”), the trustee of the trust set up by the Company to
facilitate the administration of the Pre-IPO Share Option Scheme (the “Trust”). Pursuant to the
trust deed of the Trust, options with 8,900,000 underlying Shares are held by Eternal Beauty
Investment Limited and administered under the Trust by the Trustee, solely for the benefit of
certain identified grantees under the Pre-IPO Share Option Scheme. The remaining options
with 17,294,000 underlying Shares are held by the relevant grantees directly.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 1–


--- page 581 ---
(d) Grant and adjustment of options
Any grant to any participants shall be considered by the Board and subject to approval of
the Board. In the event that any participant becomes ineligible under the Pre-IPO Share Option
Scheme, or is transferred to any other position or terminates his or her employment with our
Company, or dies, the Board may make adjustments to such participant pursuant to the Pre-IPO
Share Option Scheme.
(e) Maximum number of shares subject to the Pre-IPO Share Option Scheme
The underlying Shares of the options under the Pre-IPO Share Option Scheme shall be the
Shares to be issued by our Company. The maximum number of Shares underlying the options
under the Pre-IPO Share Option Scheme shall be no more than 26,194,000 Shares, representing
approximately 2.6194% of the total issued Shares of our Company immediately before the
Listing and 2.0149% immediately following the completion of the Capitalization Issue and the
Global Offering (assuming the Over-allotment Option is not exercised, and without taking into
account any Shares which may be allotted and issued upon the exercise of any options granted
under the Pre-IPO Share Option Scheme and any options which may be granted under the Share
Option Scheme).
(f) Exercise price
The exercise price of each option under the Pre-IPO Share Option Scheme is HK$0.1.
(g) V esting schedule
The options granted under the Pre-IPO Share Option Scheme are not subject to any
vesting schedule.
(h) Exercise and lapse of options
The term of options under the Pre-IPO Share Option Scheme shall be 10 years from the
grant date. Subject to satisfaction of the exercising conditions, participants shall have the right
to exercise the options vested to such participant under the Pre-IPO Share Option Scheme upon
Listing or to waive such right during the term. Any options not exercised during the term due
to any reason of participants shall be automatically cancelled by the Board upon expiration of
the term.
(i) Lock-up arrangements
The Shares issued pursuant to the exercise of the options granted under the Pre-IPO Share
Option Scheme shall be subject to the following lock-up period during which the relevant
Shares shall not be transferred or used as used as collateral or used for debt repayment.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 2–


--- page 582 ---
Date Percentage of options that are not subject to lock-up
1 month after the Listing Date /H1118/H1118/H1118/H1118/H111840% of the total number of options granted
1 year after the Listing Date /H1118/H1118/H1118/H1118/H1118/H1118/H111830% of the total number of options granted
2 years after the Listing Date /H1118/H1118/H1118/H1118/H1118/H111830% of the total number of options granted
(j) V oting right
No voting rights shall be exercisable in relation to any options or the underlying Shares
of options that have not been exercised.
(k) Dividend rights
No dividends shall be payable in relation to any options or the underlying Shares of
options that have not been exercised.
(l) Termination
Our Company may by resolution in general meeting at any time terminate the operation
of the Pre-IPO Share Option Scheme. Upon termination of the Pre-IPO Share Option Scheme
as aforesaid, no further options shall be offered but the provisions of the Pre-IPO Share Option
Scheme shall remain in force and effect in all other respects. All options granted prior to such
termination and not then exercised shall continue to be valid and exercisable until expiry of the
relevant exercise period, subject to and in accordance with the Pre-IPO Share Option Scheme.
(m) Transferability
Without consent of our Board, no grantee shall in any way sell, transfer, charge,
mortgage, encumber or create any interest (legal or beneficial) in favour of any third party over
or in relation to any option or attempt to do so. Any breach of the foregoing shall entitle our
Company to cancel any outstanding option or part thereof granted to such grantee.
(n) Tax
Any proceeds received by the grantees under the Pre-IPO Share Option Scheme shall be
subject to payment of individual income taxes and other taxes and fees imposed under
applicable tax laws. The grantees shall be liable for any fees and taxes arising from exercising,
selling, transferring, using, purchasing and other circumstances relating to the options under
the Pre-IPO Share Option Scheme.
2. Outstanding share options
As of the Latest Practicable Date, options to subscribe for an aggregate of 26,194,000
Shares have been granted to a total of 18 eligible participants by our Company at nil
consideration under the Pre-IPO Share Option Scheme on June 24, 2024 and July 8, 2024,
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 3–


--- page 583 ---
respectively, representing approximately 1.9645% of the share capital of our Company in issue
immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised, and without taking into account any
Shares which may be allotted and issued upon the exercise of any options granted under the
Pre-IPO Share Option Scheme and any options which may be granted under the Share Option
Scheme). The exercise price of each option granted was HK$0.1.
Assuming 26,194,000 Shares will be issued upon the full vesting and exercise of all
outstanding options granted under the Pre-IPO Share Option Scheme, the shareholding of our
Shareholders immediately following completion of the Capitalization Issue and the Global
Offering and taking no account of any Shares which may be allotted and issued pursuant to the
exercise of the Over-allotment Option will be diluted by approximately 1.93%. The dilution
effect on our earnings per Share would be approximately 1.93% arising from the issue of shares
in respect of such outstanding options.
Save and except as set out above, no other options have been granted or agreed to be
granted by our Company under the Pre-IPO Share Option Scheme. Our Company will not grant
any further options under the Pre-IPO Share Option Scheme prior to, on or after the Listing
Date.
Application has been made to the Listing Committee for the listing of and permission to
deal in the Shares to be issued pursuant to the Pre-IPO Share Option Scheme.
3. Summary of grantees
Below is a list of grantees under the Pre-IPO Share Option Scheme that are outstanding
as of the Latest Practicable Date:
Name Address
Date of
grant
Option
period
Number of
Shares under
the options
granted
Approximate
percentage of the
issued share
capital of our
Company
immediately after
completion of the
Capitalization
Issue and the
Global Offering (1)
Directors
Ms. Lam King /H1118/H1118/H1118/H1118Flat A, 51/F,
Block 5 Vision City
1 Y eung Uk Road
Tsuen Wan
Hong Kong
July 8,
2024
10 years
from the date
of grant
6,380,000 0.4785%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 4–


--- page 584 ---
Name Address
Date of
grant
Option
period
Number of
Shares under
the options
granted
Approximate
percentage of the
issued share
capital of our
Company
immediately after
completion of the
Capitalization
Issue and the
Global Offering (1)
Ms. Lau Wing Yin /H1118/H1118Flat B, 8/F, Tower 4
Regency Park
3 Wah King Hill
Road
Kwai Chung
New Territories
Hong Kong
July 8,
2024
10 years
from the date
of grant
3,189,000 0.2392%
Mr. Chu Wai Tsun,
Baggio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Flat C, 18/F
Sun Kong Building
2-J Sai Y oung Choi
Street
Mong Kok
Kowloon
Hong Kong
July 8,
2024
10 years
from the date
of grant
1,282,000 0.0961%
Senior management
Ms. Wang Wei /H1118/H1118/H1118/H1118Room 103,
No. 11, Lane 19
Kaibin Road
Shanghai
June 24,
2024
10 years
from the date
of grant
2,868,000 0.2151%
Mr. Xue Y anhe /H1118/H1118/H1118/H1118No. 28,
Beiguanfang Hutong
Xicheng District
Beijing, China
June 24,
2024
10 years
from the date
of grant
2,702,000 0.2026%
Mr. Huang Huiyong /H1118Room 303,
Block 11, No. 74
Qixing Street
Licheng District
Quanzhou City
Fujian, China
June 24,
2024
10 years
from the date
of grant
1,442,000 0.1081%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 5–


--- page 585 ---
Name Address
Date of
grant
Option
period
Number of
Shares under
the options
granted
Approximate
percentage of the
issued share
capital of our
Company
immediately after
completion of the
Capitalization
Issue and the
Global Offering (1)
Ms. Lam Hiu Ying /H1118/H1118Flat B, 12/F
Tower 1B Malibu
Lohas Park
Hong Kong
July 8,
2024
10 years
from the date
of grant
1,144,000 0.0858%
Other employees
Ms. Chan Wai Chun /H1118Flat A, 16/F,
Tower 3
Regency Park
3 Wah King Hill
Road
Kwai Chung
New Territories
Hong Kong
July 8,
2024
10 years
from the date
of grant
697,000 0.0523%
Mr. Lau Andy Wing
Hang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Flat A, 16/F,
Tower 6
Regency Park
3 Wah King
Hill Road
Kwai Chung
Hong Kong
July 8,
2024
10 years
from the date
of grant
1,890,000 0.1417%
Ms. Chung Kok
Kuen /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Flat A, 9/F, Block 6
Lagoon Court
Kingswood Villas
Tin Shui Wai
New Territories
Hong Kong
July 8,
2024
10 years
from the date
of grant
752,000 0.0564%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 6–


--- page 586 ---
Name Address
Date of
grant
Option
period
Number of
Shares under
the options
granted
Approximate
percentage of the
issued share
capital of our
Company
immediately after
completion of the
Capitalization
Issue and the
Global Offering (1)
Ms. Lee Shuk King /H1118Room 2408, 24/F,
Lung Wai House,
Lower Tai Sin
Estate,
Wong Tai Sin,
New Territories,
Hong Kong
July 8,
2024
10 years
from the date
of grant
831,000 0.0623%
Ms. Wong Wai Man /H1118Flat 6, 8/F,
Block B
Greenview Garden
Tai Wai,
Hong Kong
July 8,
2024
10 years
from the date
of grant
509,000 0.0382%
Ms. Man On Kei /H1118/H1118/H1118Flat H, 40/F,
Tower 5
Phase 1, Ocean
Shores
Tseung Kwan O
Hong Kong
July 8,
2024
10 years
from the date
of grant
620,000 0.0465%
Mr. Li Weiguang /H1118/H1118/H1118Room 501,
No. 14, Jiangyan
South Street
Haizhu District
Guangzhou, China
June 24,
2024
10 years
from the date
of grant
452,000 0.0339%
Mr. Fu Haifeng /H1118/H1118/H1118/H1118Room 103,
No. 58, Lane 1182
Dong Lu Road,
Pudong District
Shanghai, China
June 24,
2024
10 years
from the date
of grant
429,000 0.0322%
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 7–


--- page 587 ---
Name Address
Date of
grant
Option
period
Number of
Shares under
the options
granted
Approximate
percentage of the
issued share
capital of our
Company
immediately after
completion of the
Capitalization
Issue and the
Global Offering (1)
Mr. Wang Hongtao /H1118/H1118Room 1502,
No. 135, 338 Nong
North Huting Road
Songjiang District
Shanghai, China
June 24,
2024
10 years
from the date
of grant
553,000 0.0415%
Mr. Wo Zhiwen /H1118/H1118/H1118/H1118No. 8, Lane 449
North Shanxi Road,
Zhabei District
Shanghai, China
June 24,
2024
10 years
from the date
of grant
221,000 0.0166%
Mr. Song Yiwu /H1118/H1118/H1118/H1118Room 903, Flat 12
#815 Taolin Road,
Pudong District
Shanghai, China
June 24,
2024
10 years
from the date
of grant
233,000 0.0175%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 26,194,000 1.9645%
Note:
(1) The above table assumes the Over-allotment Option is not exercised and does not take into account any Shares
which may be issued upon the exercised of any options granted under the Pre-IPO Share Option Scheme and
any options that may be granted under the Share Option Scheme.
F. SHARE OPTION SCHEME
The following is a summary of the principal terms of the Share Option Scheme of the
Company conditionally adopted and approved by our then sole Shareholder on June 6, 2025
and which shall take effect from the Listing Date. The terms of the Share Option Scheme will
be governed by Chapter 17 of the Listing Rules. Terms defined and used under this sub-section
headed “Share Option Scheme” shall apply to this sub-section only.
1. Purpose
The purpose of the Share Option Scheme is to give the Eligible Participants (as defined
in the following paragraph) an opportunity to have a personal stake in our Company and help
motivate them to optimize their future contributions to our Group and/or to reward them for
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 8–


--- page 588 ---
their past contributions, to attract and retain or otherwise maintain on-going relationships with
such Eligible Participants who are significant to and/or whose contributions are or will be
beneficial to the performance, growth or success of our Group, and additionally in the case of
an Employee Participant (as defined below), to enable our Group to attract and retain
individuals with experience and ability and/or to reward them for their past contributions.
2. Who may join
The Board may, at its absolute discretion, offer options (“Options”) to subscribe for such
number of Shares in accordance with the terms set out in the Share Option Scheme to any of
the Employee Participant, the Related Entity Participant or the Service Provider (collectively,
the “Eligible Participants”) below:
(a) a director or employee of our Company or any of its subsidiaries, including persons
who are granted Options as an inducement to enter into employment contracts with
our Company or any of its subsidiaries (“Employee Participants”);
(b) a director or employee of a holding company, a subsidiary of the holding company
or an associated company of our Company (“Related Entity Participants”); and
(c) any person who provides services to our Group on a continuing or recurring basis
in its ordinary and usual course of business which are in the interests of the
long-term growth of our Group, including (i) a supplier of goods or services to any
member of our Group; (ii) a customer of any member of our Group; (iii) a business
or joint venture partner, franchisee, contractor, agent or representative in the
cosmetics industry of any member of our Group; (iv) a person or entity (as an
independent contractor, consultant, advisor or otherwise) that provides support or
any advisory, consultancy, professional or other services to any member of our
Group (including support or services in relation to design, research, development,
marketing, innovation upgrading, strategic or commercial planning on corporate
image, investor relations, product quality control, regulations and policies); and (v)
an associate of any of the foregoing persons (“Service Providers”). For the
avoidance of doubt, Service Providers may not include placing agents or financial
advisers providing advisory services for fundraising, mergers or acquisitions, as
well as professional service providers (such as auditors or valuers) who provide
assurance or are required to perform their services with impartiality and objectivity.
3. Maximum number of Shares
The maximum number of Shares which may be issued upon exercise of all options to be
granted under the Share Option Scheme and any other schemes of our Company, shall not in
aggregate exceed 10% of the Shares in issue (excluding treasury Shares) as at the Listing Date
(such 10% limit representing 133,340,000 Shares) excluding Shares which may fall to be
issued upon the exercise of the Over-allotment Option granted by our Company (the “Scheme
Mandate Limit”). The Scheme Mandate Limit may be adjusted in the event of any alteration
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 9–


--- page 589 ---
to the capital structure of our Company by way of capitalization issue, open offer, rights issue,
consolidation, reclassification, reconstruction, subdivision or reduction of the share capital of
our Company but shall not in any event exceed the limits imposed by the Listing Rules. Any
such adjustments shall give the Eligible Participants the same proportion of equity capital as
they were previously entitled to. In respect of any such adjustments, other than any made on
a capitalization issue, the auditors shall confirm to the committee of the Board in writing that
the adjustments satisfy the requirement.
Our Company may seek approval by its shareholders in general meeting for refreshing the
Scheme Mandate Limit and a sublimit under the Scheme Mandate Limit for grants of options
and awards to Service Providers (the “Service Provider Limit”) after three years from (i) the
adoption date of the Share Option Scheme; or (ii) the date of the Shareholders’ approval for the
last refreshment (as the case may be). The total number of Shares which may be issued in
respect of all options and awards to be granted under the Share Option Scheme and any other
schemes of our Company under the Scheme Mandate Limit as refreshed shall not 10% of the
Shares in issue (excluding treasury Shares) as at the date of the Shareholders’ approval for the
refreshment.
Our Company may seek separate approval from our Shareholders in general meeting for
granting Options beyond the Scheme Mandate Limit, provided that the Options in excess of the
Scheme Mandate Limit are granted only to the Eligible Participants specifically identified by
our Company before such approval is sought, and subject to compliance with the requirements
set out in the Listing Rules.
4. Maximum entitlement of each participants
No Option may be granted to any one person such that the total number of Shares issued
and to be issued upon exercise of Options granted and to be granted to that person in any
12-month period exceeds 1% of any relevant class of our Company’s issued share capital from
time to time (the “1% Individual Limit”). Where any further grant of Options to such an
Eligible Participant would result in our Shares issued and to be issued upon exercise of all
Options granted and to be granted to such Eligible Participant (including exercised, cancelled
and outstanding Options) in the 12-month period up to and including the date of such further
grant representing in aggregate over the 1% Individual Limit, such further grant shall be
separately approved by our Shareholders in general meeting with such Eligible Participant and
his close associates (or his associates if such Eligible Participant is a connected person)
abstaining from voting. Our Company shall send a circular to our Shareholders disclosing the
identity of the Eligible Participant, the number and terms of the Options to be granted (and
Options previously granted in the 12-month period) to such Eligible Participant, the purpose
of granting Options to such Eligible Participant and an explanation as to how the terms of the
Options serve such purpose. The number and terms (including the exercise price) of the
Options to be granted to such Eligible Participant must be fixed before the approval of our
Shareholders. In respect of any Options to be granted, the date of the Board meeting for
proposing such further grant should be taken as the date of grant for the purpose of calculating
the exercise price of those Options.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 0–


--- page 590 ---
5. Offer and grant of Options
Subject to the terms of the Share Option Scheme, the Board shall be entitled at any time
within 10 years from the Adoption Date to offer the grant of an Option to any Eligible
Participant as the Board may in its absolute discretion select to subscribe at the exercise price
for such number of Shares as the Board may (subject to the terms of the Share Option Scheme)
determine (provided the same shall be a board lot for dealing in the Shares on the Stock
Exchange or an integral multiple thereof).
6. Granting Options to connected persons
Subject to the terms in the Share Option Scheme, only insofar as and for so long as the
Listing Rules require, any grant of Options to a director, chief executive or a substantial
shareholder (as defined in the Listing Rules) of our Company or any of their respective
associates, shall be approved by the independent non-executive directors of our Company
(excluding the independent non-executive Director who is the grantee of an Option).
Where any grant of Options to a substantial shareholder (as defined in the Listing Rules)
or an independent non-executive director of our Company, or any of their respective associates,
would result in the securities issued and to be issued upon exercise of all Options already
granted and to be granted (including Options exercised, cancelled and outstanding) to such
person in the 12-month period up to and including the date of such grant representing in
aggregate over 0.1% of the relevant class of securities in issue, such further grant of Options
must be approved by our Shareholders (voting by way of a poll). Our Company shall send a
circular to our Shareholders containing the information required under the Listing Rules. The
grantee, his/her associates and all core connected persons of our Company must abstain from
voting in favor at such general meeting.
Approval from our Shareholders is required for any change in the terms of Options
granted to an Eligible Participant who is a Director, chief executive or a substantial
shareholder, or any of their respective associates. The grantee, his associates and all core
connected persons of our Company must abstain from voting in favour at such general meeting.
7. Restriction on the time of grant of Options
The Board shall not grant any Option under the Share Option Scheme after inside
information has come to its knowledge until (and including) the trading day after it has
announced the information. In particular, no Option shall be granted during the period
commencing one month immediately preceding the earlier of (i) 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 our Company’s results for any year, half-year, quarterly or any other interim
period (whether or not required under the Listing Rules); and (ii) the deadline for our Company
to announce its results for any year, half-year, quarterly or any other interim period (whether
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 1–


--- page 591 ---
or not required under the Listing Rules), and ending on the date of the results announcements.
No Options shall be granted during any period of delay in publishing a results announcement
or during any period specified in the Listing Rules as being a period during which no Option
may be granted.
8. Minimum holding period, vesting and performance target
Subject to the provisions of the Listing Rules, the Board may in its absolute discretion (i)
when offering the grant of an Option impose any conditions, restrictions or limitations in
relation thereto in addition to those set out in the Share Option Scheme as the Board may think
fit (to be stated in the letter containing the offer of the grant of the Option) including (without
prejudice to the generality of the foregoing) qualifying and/or continuing eligibility criteria,
conditions, restrictions or limitations relating to the achievement of performance, operating or
financial targets by our Group and/or the grantee, the satisfactory performance or maintenance
by the grantee of certain conditions or obligations or the time or period before the right to
exercise the Option in respect of any of the Shares shall vest; and (ii) at any time after the grant
of an Option, waive or amend such conditions, restrictions or limitations to the advantage of
the grantee, provided that such terms or conditions shall not be inconsistent with any other
terms or conditions of the Share Option Scheme. Unless otherwise determined by the Board
and specified in the grant letter, there is no performance target which need to be achieved by
the grantee before the Option can be exercised. Options granted to Directors and senior
management of our Group without performance targets shall be subject to any other
requirements under the Listing Rules.
In certain circumstances, it may be regarded as inequitable for any Options to be vested
or retained (as the case may be). Such Options are therefore subject to, in respect of any
Options granted to an Eligible Participant, the return or repayment of all or a specific part of
such Options by such Eligible Participant and/or the ceasing or variation of the Eligible
Participant’s entitlement to receive or be vested with all or a specified part of any such Options
which have not yet been vested in the Eligible Participant (the “Clawback”), including but not
limited to where there has been a material misstatement or omission in the financial report of
our Group or if the relevant grantee has engaged in serious negligence, fraud or misconduct.
Notwithstanding any other terms of the Share Option Scheme, any Options may be subject to
Clawback pursuant to our Company’s policy on Clawback, as amended from time to time.
Options granted to Directors and senior management of our Company without Clawback shall
be subject to any other requirements under the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 2–


--- page 592 ---
9. Amount payable for Options and offer period
An offer of the grant of an Option shall remain open for acceptance by the Eligible
Participant concerned for a period of 28 days from the grant date provided that no such grant
of an Option may be accepted after the expiry of the effective period of the Share Option
Scheme or after the Share Option Scheme has been terminated. An Option shall be deemed to
have been granted and accepted by the Eligible Participant and to have taken effect when the
duplicate grant letter comprising acceptance of the offer of the Option duly signed by the
grantee together with a remittance in favor of our Company of HK$1.00 by way of
consideration for the grant thereof is received by our Company on or before the date upon
which an offer of an Option must be accepted by the relevant Eligible Participant, being a date
no later than 28 days after the offer date (the “Acceptance Date”). Such remittance shall in no
circumstances be refundable.
Any offer of the grant of an Option may be accepted in respect of less than the number
of Shares in respect of which it is offered provided that it is accepted in respect of board lots
for dealing in Shares on the Stock Exchange or an integral multiple thereof and such number
is clearly stated in the duplicate grant letter comprising acceptance of the offer of the Option.
To the extent that the offer of the grant of an Option is not accepted by the Acceptance Date,
it will be deemed to have been irrevocably declined.
10. Exercise price
The exercise price in respect of any particular Option shall be such price as the Board may
in its absolute discretion determine at the time of grant of the relevant Option (and shall be
stated in the letter containing the offer of the grant of the Option) but the exercise price shall
not be less than whichever is the higher of:
(a) the closing price of a Share as stated in the Stock Exchange’s daily quotations sheet
on the grant date; and
(b) the average closing price of a Share as stated in the Stock Exchange’s daily
quotations sheets for the five Business Days (as defined in the Listing Rules)
immediately preceding the grant date.
11. Exercise of Option
(a) An Option shall be exercised in whole or in part (but if in part only, in respect of
a board lot or any integral multiple thereof) within the exercise period in the manner
as set out in this Share Option Scheme by the grantee (or any other person so
permitted pursuant to this Share Option Scheme) by giving notice in writing to our
Company in the manner to the satisfactory to our Company and stating that the
Option is thereby exercised and specifying the number of Shares in respect of which
it is exercised. Each such notice must be accompanied by a remittance for the full
amount of the aggregate exercise price for the Shares in respect of which the notice
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 3–


--- page 593 ---
is given. Within 28 days after receipt of the notice and, where appropriate, receipt
of a certificate from our auditors pursuant to the Share Option Scheme, our
Company shall accordingly allot and issue the relevant number of Shares to the
grantee (or any other person so permitted pursuant to this Share Option Scheme)
credited as fully paid with effect from (but excluding) the relevant exercise date and
issue to the grantee (or any other person so permitted pursuant to this Share Option
Scheme) share certificate(s) in respect of the Shares so allotted.
(b) The exercise of any Option shall be subject to the approval of shareholders of our
Company in general meeting for any necessary increase in the authorised share
capital of our Company.
(c) Subject as hereinafter provided and subject to the terms and conditions upon which
the Option was granted, an Option may be exercised by the Grantee at any time
during the exercise period, provided that:
(i) in the event that the grantee dies or becomes permanently disabled before
exercising an Option (or exercising it in full) and none of the events for
termination of employment or engagement pursuant to the terms of the Share
Option Scheme exists with respect to such grantee, he (or his personal
representative(s)) may exercise the Option up to the grantee’s entitlement
immediately prior to the death or permanently disability (to the extent not
already exercised) within a period of 12 months following his death or
permanent disability or such longer period as the Board may determine;
(ii) in the event that the grantee ceases to be (i) an Employee Participant by reason
of his retirement pursuant to such retirement scheme applicable to our Group
at the relevant time or (ii) a Related Entity Participant by reason of his
retirement pursuant to such retirement scheme applicable to the Related Entity
(as the case may be), and none of the events for termination of employment or
engagement under subparagraph (v) below exists with respect to such grantee,
his Option (to the extent not already exercised) shall be exercisable up to the
grantee’s entitlement immediately prior to his retirement until the expiry of the
relevant exercise period;
(iii) in the event that the grantee ceases to be (i) an Employee Participant by reason
of his transfer of employment to a Related Entity or (ii) a Related Entity
Participant by reason of his transfer of employment to our Group (as the case
may be), his Option (to the extent not already exercised) shall be exercisable
until the expiry of the relevant exercise period unless the Board in its absolute
discretion otherwise determines in which event the Option (or such remaining
part thereof) shall be exercisable within such period as the Board has
determined;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 4–


--- page 594 ---
(iv) in the event that the grantee ceases to be an Employee Participant for any
reason (including his employing company ceasing to be a member of our Group
or a Related Entity (as the case may be)) other than his death, permanent
disability, retirement pursuant to such retirement scheme applicable to our
Group or a Related Entity (as the case may be) at the relevant time or the
transfer of his employment to a Related Entity or our Group (as the case may
be) or the termination of his employment with the relevant member of our
Group or a Related Entity (as the case may be) by resignation or culpable
termination, Option (to the extent not already exercised) shall lapse on the date
of cessation of such employment and not be exercisable unless the Board
otherwise determines in which event the Option (or such remaining part
thereof) shall be exercisable within such period as the Board may in its
absolute discretion determine following the date of such cessation;
(v) in the event that the grantee ceases to be an Employee Participant or a Related
Entity Participant (as the case may be) by reason of the termination of his
employment by resignation or culpable termination, the Option (to the extent
not already exercised) shall lapse on the date on which the notice of
termination is served (in the case of resignation) or the date on which the
grantee is notified of the termination of his employment (in the case of
culpable termination) and not be exercisable unless the Board otherwise
determines in which event the Option (or such remaining part thereof) shall be
exercisable within such period as the Board may in its absolute discretion
determine following the date of such service or notification;
(vi) if a grantee being:
(A) an executive Director ceases to be an executive director or senior
management of our but remains a non-executive Director, his Option (to
the extent not already exercised) shall be exercisable until the expiry of
the relevant exercise period unless the Board in its absolute discretion
otherwise determines in which event the Option (or such remaining part
thereof) shall be exercisable within such period as the Board has
determined; or
(B) a non-executive Director or an independent non-executive Director
ceases to be a Director:
(1) by reason of his retirement pursuant to our Articles of Association
and who notifies our Company that he is not offering himself for
reelection at our Company’s annual general meeting (“Non-
Executive Director Retirement”), his Option (to the extent not
already exercised) shall be exercisable up to the grantee’s
entitlement immediately prior to his retirement until the expiry of
the relevant exercise period unless the Board in its absolute
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 5–


--- page 595 ---
discretion otherwise determines in which event the Option (or such
remaining part thereof) shall be exercisable within such period as
the Board has determined; or
(2) for reasons other than Non-Executive Director Retirement, his
Option (to the extent not already exercised) shall lapse on the date
of cessation of such appointment and not be exercisable unless the
Board otherwise determines in which event the Option (or such
remaining part thereof) shall be exercisable within such period as
the Board may in its absolute discretion determine following the
date of such cessation;
(vii) if:
(A) the Board in its absolute discretion at any time determines that a grantee
has ceased to be an Eligible Participant;
(B) a grantee has failed to or no longer satisfies or complies with such criteria
or terms and conditions that may be attached to the grant of the Option
or which were the basis on which the Option was granted,
the Option (to the extent not already exercised) shall lapse on the date on which
the grantee is notified thereof (in the case of (A)) or on the date on which the
grantee has failed to or no longer satisfies or complies with such criteria or
terms and conditions as aforesaid (in the case of (B)) and not be exercisable
unless the Board otherwise determines in which event the Option (or such
remaining part thereof) shall be exercisable up to the grantee’s entitlement
immediately prior to the determination of the Board (in the case of (A)) or the
failure of the grantee to satisfy or comply with the criteria or terms and
conditions attached to the grant of the Option or which were the basis on which
the Option was granted (in the case of (B)) within such period as the Board
may in its absolute discretion determine following the date of such notification
or the date of such failure, non-satisfaction or non-compliance;
(viii) if a grantee (being a corporation):
(A) has a liquidator or receiver appointed anywhere in the world in respect of
the whole or any part of the assets or undertaking of the grantee; or
(B) has suspended, ceased or threatened to suspend or cease business; or
(C) is unable to pay its debts; or
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 6–


--- page 596 ---
(D) otherwise becomes insolvent; or
(E) suffers a change in its constitution, management, directors or
shareholding which in the opinion of the Board is material; or
(F) commits a breach of any contract entered into between the grantee or his
associate and any member of our Group,
the Option (to the extent not already exercised) shall lapse on the date of
appointment of the liquidator or receiver or on the date of suspension or
cessation of business or threatened suspension or cessation of business or on
the date when the grantee is deemed to be unable to pay its debts as aforesaid
or otherwise becomes insolvent or on the date of notification by our Company
that the said change in constitution, management, directors or shareholding is
material or on the date of notification by our Company of the said breach of
contract (as the case may be) and not be exercisable unless the Board otherwise
determines in which event the Option (or such remaining part thereof) shall be
exercisable up to the grantee’s entitlement immediately prior to the occurrence
of any of the event(s) mentioned in paragraphs (A) to (F) of this paragraph
within such period as the Board may in its absolute discretion determine
following the date of such occurrence;
(ix) if a grantee (being an individual):
(A) is unable or has no reasonable prospects of being able to pay his debts
within the meaning of the Bankruptcy Ordinance (Chapter 6 of the Laws
of Hong Kong) or any other applicable law or has otherwise become
insolvent; or
(B) has made any arrangement or composition with his creditors generally; or
(C) has been convicted of any criminal offence involving his integrity or
honesty; or
(D) commits a breach of any contract entered into between the grantee or his
associate and any member of our Group,
the Option (to the extent not already exercised) shall lapse on the date on which
he is deemed unable or to have no reasonable prospects of being able to pay
his debts as aforesaid or on the date on which a petition for bankruptcy has
been presented in any jurisdiction or on the date on which he enters into the
said arrangement or composition with his creditors or on the date of his
conviction or on the date of the said breach of contract (as the case may be) and
not be exercisable unless the Board otherwise determines in which event the
Option (or such remaining part thereof) shall be exercisable up to the grantee’s
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 7–


--- page 597 ---
entitlement immediately prior to the occurrence of any of the event(s)
mentioned in paragraphs (A) to (D) of this paragraph within such period as the
Board may in its absolute discretion determine following the date of such
occurrence;
(x) if a general offer is made to all holders of Shares and such offer becomes or
is declared unconditional (in the case of a takeover offer) or is approved by the
requisite majorities at the relevant meetings of our Shareholders (in the case of
a scheme of arrangement), the grantee shall be entitled to exercise the Option
(to the extent not already exercised) at any time (in the case of a takeover offer)
within one month after the date on which the offer becomes or is declared
unconditional or (in the case of a scheme of arrangement) prior to such time
and date as shall be notified by our Company;
(xi) if a compromise or arrangement between our Company and its members or
creditors is proposed for the purpose of or in connection with a scheme for the
reconstruction of our Company or its amalgamation with any other company,
our Company shall give notice thereof to the grantees who have Options
unexercised at the same time as it dispatches notices to all members or
creditors of our Company summoning the meeting to consider such a
compromise or arrangement and thereupon each grantee (or his personal
representatives or receiver) may until the expiry of the earlier of:
(1) the exercise period;
(2) the period of two months from the date of such notice; or
(3) the date on which such compromise or arrangement is sanctioned by the
court, exercise in whole or in part his or her Option.
Except insofar as exercised in accordance with this paragraph, all Options
outstanding at the expiry of the relevant period referred to in this paragraph
shall lapse. Our Company may thereafter require each grantee to transfer or
otherwise deal with the Shares issued on exercise of the Option to place the
grantee in the same position as would have been the case had such Shares been
the subject of such compromise or arrangement; and
(xii) in the event a notice is given by our Company to its members to convene a
general meeting for the purposes of considering, and if thought fit, approving
a resolution to voluntarily wind-up our Company, our Company shall on the
same date as or soon after it dispatches such notice to each member of our
Company give notice thereof to all grantees and thereupon, each grantee (or his
or her legal personal representative(s)) shall be entitled to exercise all or any
of his or her options at any time not later than two Business Days (as defined
in the Listing Rules) prior to the proposed general meeting of our Company by
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 8–


--- page 598 ---
giving notice in writing to our Company in the manner to the satisfactory to our
Company, accompanied by a remittance for the full amount of the aggregate
exercise price for the Shares in respect of which the notice is given whereupon
our Company shall as soon as possible and, in any event, no later than the
business day (as defined in the Listing Rules) immediately prior to the date of
the proposed general meeting referred to above, allot the relevant Shares to the
grantee (or any other person so permitted pursuant to the share Option Scheme)
credited as fully paid.
12. Life of Share Option Scheme
Subject to the terms of this Share Option Scheme, the Scheme shall be valid and effective
for a period of 10 years from the date on which it becomes unconditional, after which no
further options will be granted or offered but the provisions of the Share Option Scheme shall
remain in force and effect in all other respects. All Options granted prior to such expiry and
not then exercised shall continue to be valid and exercisable subject to and in accordance with
the Share Option Scheme.
13. Lapse of Share Option Scheme
An Option shall lapse automatically and not be exercisable, to the extent not already
exercised, on the earliest of:
(a) the expiry of the exercise period;
(b) the expiry of any of the period referred to paragraphs related to exercise of the
Option;
(c) subject to the terms of the period mentioned in the paragraph headed “F. Share
Option Scheme — 11. Exercise of Option” in this Appendix, the date of the
commencement of the winding-up of our Company;
(d) there is an unsatisfied judgment, order or award outstanding against the grantee or
the Board has reason to believe that the grantee is unable to pay or to have no
reasonable prospect of being able to pay his/her/its debts;
(e) there are circumstances which entitle any person to take any action, appoint any
person, commence proceedings or obtain any order of the type mentioned in this
Share Option Scheme with respect to the exercise of the Option;
(f) a bankruptcy order has been made against any director or shareholder of the grantee
(being a corporation) in any jurisdiction.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 3 9–


--- page 599 ---
No compensation shall be payable upon the lapse of any Option, provided that the Board
shall be entitled in its discretion to pay such compensation to the grantee in such manner as it
may consider appropriate in any particular case.
14. Adjustment
In the event of any alteration to the capital structure of our Company while any Option
remains exercisable, whether by way of capitalization issue, open offer, right issue,
consolidations, reclassification, reconstruction, sub-division or reduction of the share capital of
our Company (or any other actions which may have an impact on the share capital of our
Company, other than an issue of Shares as consideration in respect of a transaction to which
our Company is a party), the Board may, if it considers the same to be appropriate, direct that
adjustments be made to:
(a) the maximum number of Shares subject to the Share Option Scheme; and/or
(b) the aggregate number of Shares subject to the Option so far as unexercised; and/or
(c) the exercise price of each outstanding Option,
provided that the maximum number of Shares that may be issued in respect of all options and
awards to be granted under all of the schemes of our Company under the Scheme Mandate
Limit or the Service Provider Limit as a percentage of the total number of issued Shares
immediately before and after such alteration to the capital structure of our shall be the same,
rounded to the nearest whole share.
Where the Board determines that such adjustments are appropriate (other than an
adjustment arising from a capitalization issue), the auditors appointed by our Company shall
certify in writing to the Board that any such adjustments are in their opinion fair and
reasonable, provided that:
(a) any such adjustments shall give an Eligible Participant the same proportion of equity
capital, rounded to the nearest whole share, as that to which the Eligible Participant
was previously entitled to, but no such adjustments shall be made to the extent that
a Share would be issued at less than its normal value (if any). In respect of any such
adjustments, other than any made on a capitalization issue, the auditors shall
confirm to the Board in writing that the adjustments satisfy the requirement set out
in this paragraph;
(b) any such adjustments shall be made on the basis that the aggregate exercise price
payable by the grantee on the full exercise of any Option shall remain as nearly as
practicable same as (but shall not be greater than) it was before such event;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 0–


--- page 600 ---
(c) any such adjustments shall be made to in accordance with the provisions as
stipulated under Chapter 17 of the Listing Rules and supplementary guidance on the
interpretation of the Listing Rules issued by the Stock Exchange from time to time;
and
(d) the issue of securities as consideration in a transaction shall not be regarded as a
circumstance requiring any such adjustments.
15. Cancellation of Options not exercised
The Board shall be entitled for the following causes to cancel any Option in whole or in
part by giving notice in writing to the grantee stating that such Option is thereby cancelled with
effect from the date specified in such notice (the “Cancellation Date”):
(a) the grantee commits or permits or attempts to commit or permit a breach of
restriction on transferability of Option or any terms or conditions attached to the
grant of the Option;
(b) the grantee makes a written request to the Board for the Option to be cancelled; or
(c) if the grantee has, in the opinion of the Board, conducted himself in any manner
whatsoever to the detriment of or prejudicial to the interests of our Company or its
subsidiary.
Options cancelled will be regarded as utilized for the purpose of calculating the Scheme
Mandate Limit and the Service Provider Limit. Where our Company cancels Options granted
to an Eligible Participant, and makes a new grant to the same Eligible Participant, such new
grant may only be made under the Scheme with available Scheme Mandate Limit approved by
the shareholders of our Company.
16. Ranking of Shares
The Shares to be allotted upon the exercise of an Option will be subject to all the
provisions of the Articles of Association and the laws of the Cayman Islands from time to time
and shall rank pari passu in all respects with the then existing fully paid Shares in issue
commencing from (i) the allotment date or, (ii) if that date falls on a day when the register of
members of our Company is closed, the first date of the re-opening of the register of members.
Accordingly, it will entitle the holders to participate in all dividends or other distributions paid
or made on or after (i) the allotment date or, (ii) if that date falls on a day when the register
of members of our Company is closed, the first day of the re-opening of the register of
members, other than any dividend or other distribution previously declared or recommended or
resolved to be paid or made if the record date therefore shall be before the allotment date.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 1–


--- page 601 ---
New grantee shall enjoy any rights of a Shareholder by virtue of the grant of an Option
pursuant to the Scheme, unless and until Shares are actually issued to the grantee pursuant to
the exercise of an Option. The Options do not carry any right to vote in general meeting of our
Company, or the right to dividend and other rights, including those arising on a liquidation of
our Company. Share issued upon the exercise of an Option shall not carry rights until the
registration of the grantee (or any other person so permitted pursuant to the Share Option
Scheme) as the holder thereof.
The outstanding Options granted may not be exercised if all or part of the exercise of the
Options will result in the holding of the total issued Shares by the public falling below 25%
(or such other percentage stipulated under the Listing Rules or permitted by the Stock
Exchange).
In the event the grantee has been suspended from his duties or performance of the relevant
contract of employment, directorship, appointment or engagement by the relevant member of
our Group or the Related Entity (as the case may be), no Option can be exercised until such
suspension has been lifted.
17. Termination
Our Company may by resolution in general meeting at any time terminate the operation
of the Share Option Scheme. Upon termination of the Share Option Scheme as aforesaid, no
further Options shall be offered but the provisions of the Share Option Scheme shall remain in
force and effect in all other respects. All Options granted prior to such termination and not then
exercised shall continue to be valid and exercisable until expiry of the relevant exercise period
subject to and in accordance with the Share Option Scheme.
18. Transferability
The Option shall be personal to the grantee and shall not be assignable and no grantee
shall in any way sell, transfer, charge, mortgage, encumber or create any interest (legal or
beneficial) in favor of any third party over or in relation to any Option or attempt to do so,
except for a transfer to a vehicle (such as a trust or a private company) for the benefit of the
grantee and any family members of such grantee for estate planning or tax planning as
permitted by the Stock Exchange or under the Listing Rules). Any breach of the foregoing shall
entitle our Company to cancel any outstanding Option or part thereof granted to such grantee.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 2–


--- page 602 ---
19. Alteration of Share Option Scheme
The Share Option Scheme may be altered in any respect by a resolution of the Board
except that the following shall not be carried out except with the prior approval of our
Shareholders in general meeting by ordinary resolution:
(a) any alteration to the terms and conditions of the Scheme which are material in nature
or any alterations to the provisions of the Share Option Scheme in relation to the
matters set out in Rule 17.03 of the Listing Rules to the advantage of the Eligible
Participants;
(b) any change to the authority of the Board to alter the terms of the Scheme; and
(c) any alteration to the aforesaid alteration provisions, provided always that the
amended terms of the Share Option Scheme or the Options shall comply with the
applicable requirements of the Listing Rules.
20. Conditions of the Share Option Scheme
The Share Option Scheme shall come into effect on the date on which the following
conditions are fulfilled:
(a) the approval of our then sole Shareholders for the adoption of the Share Option
Scheme;
(b) the approval of the Stock Exchange for the listing of and permission to deal in, a
maximum of 107,146,000 Shares to be allotted and issued pursuant to the exercise
of the Share Option Scheme in accordance with the terms and conditions of the
Share Option Scheme;
(c) the commencement of dealing in our Shares on the Stock Exchange; and
(d) the obligations of the underwriters under the Underwriting Agreements becoming
unconditional and not being terminated in accordance with the terms thereof or
otherwise.
If the permission referred to in paragraph (b) above is not granted within two calendar
months after the Adoption Date:
(a) the Share Option Scheme will forthwith terminate;
(b) any Option granted or agreed to be granted pursuant to the Share Option Scheme and
any offer of such a grant shall be of no effect;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 3–


--- page 603 ---
(c) no person shall be entitled to any rights or benefits or be under any obligations under
or in respect of the Share Option Scheme or any Option; and
(d) the Board may further discuss and devise another share option scheme that is
applicable to a private company for adoption by our Company.
Application has been made to the Stock Exchange for the listing of 133,340,000 Shares
which may be issued pursuant to the exercise of options under the Pre-IPO Share Option
Scheme and the Share Option Scheme.
G. OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to fall
on our Company or any of our subsidiaries.
2. Litigation
During the Track Record Period and as of the Latest Practicable Date, we were not
engaged in any litigation, arbitration or claim of material importance and no litigation,
arbitration or claim of material importance was known to our Directors to be pending or
threatened by or against us, that would have a material adverse effect on our results of
operations or financial conditions.
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee for
the listing of, and permission to deal in, (i) our Shares in issue, (ii) the Shares to be issued
pursuant to the Global Offering (including any Shares which may be issued under the exercise
of the Over-allotment Option), the Capitalization Issue, and (iii) any Shares to be issued upon
the exercise of any options granted under the Pre-IPO Share Option Scheme or may be granted
under the Share Option Scheme.
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors set
out in Rule 3A.07 of the Listing Rules.
Our Company has entered into engagement agreements with the Joint Sponsors, pursuant
to which our Company agreed to pay the Joint Sponsor a total fee of US$1,250,000 to act as
sponsors to our Company in the Global Offering.
4. Compliance advisor
Our Company has appointed Alliance Capital Partners Limited as our compliance advisor
in compliance with Rule 3A.19 of the Listing Rules.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 4–


--- page 604 ---
5. Preliminary expenses
Our estimated preliminary expenses are approximately US$5,279 and have been paid by
us.
6. Promoter
We do not have any promoter. Within the two years immediately preceding the date of this
prospectus, no cash, securities or other benefits have been paid, allotted or given nor are any
proposed cash, securities or other benefits to be paid, allotted or given to any promoters in
connection with the Global Offering and the related transactions described in this prospectus.
7. Agency fees or commission received
Save as disclosed in this prospectus, no commissions, discounts, brokerages or other
special terms were granted within the two years preceding the date of this prospectus in
connection with the issue or sale of any capital of any member of our Group.
8. Qualifications of experts
The following are the qualifications of the experts who have given opinion or advice
contained in this prospectus:
BNP Paribas Securities (Asia) Limited /H1118/H1118/H1118A corporation licensed to conduct type 1
(dealing in securities), type 2 (dealing in
futures contracts), type 4 (advising on
securities) and type 6 (advising on
corporate finance) of the regulated
activities as defined under the SFO
CITIC Securities (Hong Kong) Limited /H1118/H1118A corporation licensed to conduct type 4
(advising on securities) and type 6
(advising on corporate finance) of the
regulated activities as defined under the
SFO
PricewaterhouseCoopers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants under
Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong)
Registered Public Interest Entity Auditor
under Accounting and Financial Reporting
Council Ordinance (Chapter 588 of the
Laws of Hong Kong)
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 5–


--- page 605 ---
Conyers Dill & Pearman /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Cayman Islands attorneys-at-law
Beijing Jingtian & Gongcheng Law Firm /H1118Legal advisor to the Company as to PRC
law and PRC data compliance law
Ms. Queenie W.S. Ng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Barrister-at-law in Hong Kong
Jorge Neto V alente — Lawyers &
Notaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legal advisor to the Company as to Macau
data compliance law
PricewaterhouseCoopers Consultants
(Shenzhen) Limited, Beijing Branch /H1118/H1118/H1118
Transfer pricing consultant
Frost & Sullivan Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Industry consultant
As of the Latest Practicable Date, none of the experts named above has any shareholding
interest 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 any member of our
Group.
9. Consents of experts
Each of the experts named in “Qualifications of Experts” has given and has not withdrawn
its written 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.
10. 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 (WUMP) Ordinance insofar as
applicable.
11. Bilingual prospectus
The English and Chinese language versions of this prospectus are being published
separately, in reliance upon the exemption provided under section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 6–


--- page 606 ---
12. No material adverse change
Our Directors confirm that, up to the date of this prospectus, there has been no material
adverse change in the financial or trading position or prospect of our Group since March 31,
2025 (being the date to which the latest audited consolidated financial statements of our Group
were prepared).
13. Particulars of the Selling Shareholder
Particulars of the Selling Shareholder are set out below:
Name: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Eternal Beauty International Limited
Place of incorporation: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118British Virgin Islands
Date of incorporation: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 8, 2024
Registered office: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Commerce House Wickhams Cay 1 P .O. Box
3140 Road Town, Tortola British Virgin
Islands VG1110
Number of OAO Sale Shares to
be sold: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Up to 34,660,000 OAO Sale Shares may be
sold pursuant to exercise of the Over-
allotment Option
H. MISCELLANEOUS
1. Save as disclosed in this prospectus, within the two years immediately preceding the date
of this prospectus:
(a) no share or loan capital of our Company or any of its subsidiaries has been issued
or agreed to be issued or is proposed to be issued fully or partly paid either for cash
or for a consideration other than cash;
(b) no share or loan capital of our Company or any of its subsidiaries is under option
or is agreed conditionally or unconditionally to be put under option;
(c) neither our Company nor any of its subsidiaries have issued or agreed to issue any
founder shares, management shares or deferred shares;
(d) no commissions, discounts, brokerage or other special terms have been granted or
agreed to be granted in connection with the issue or sale of any shares or loan capital
of any member of our Group; and
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 7–


--- page 607 ---
(e) no commission has been paid or payable (except commissions to the Underwriters)
for subscription, agreeing to subscribe, procuring subscription or agreeing to
procure subscription of any Shares in our Company;
2. our Company has no outstanding convertible debt securities or debentures;
3. no equity or debt securities of any company within our Group is presently listed on any
stock exchange or traded on any trading system nor is any listing or permission to deal
being or proposed to be sought;
4. there is no arrangement under which future dividends are waived or agreed to be waived;
and
5. There has not been any interruption in the business of our Group which may have or have
had a significant effect on the financial position of our Group in the twelve (12) months
immediately preceding the date of this prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 4 8–


--- page 608 ---
A. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG
KONG
The documents attached to the copy of this document delivered to the Registrar of
Companies in Hong Kong for registration were, among other documents:
(a) copies of the material contracts referred to under “Statutory and General
Information — C. Further Information about Our Business — 1. Summary of
Material Contracts” in Appendix IV to this prospectus;
(b) the written consents referred to under “Statutory and General Information — G.
Other Information — 9. Consents of Experts” in Appendix IV to this prospectus; and
(c) a copy of the statement of particulars of the Selling Shareholder.
B. DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at www.hkexnews.hk and our website at www.eternal.hk up to and including
the date which is 14 days from the date of this prospectus:
(a) our Memorandum and Articles of Association;
(b) the Accountant’s Report of our Group prepared by PricewaterhouseCoopers, the
texts of which are set out in Appendix I to this prospectus;
(c) the report on the unaudited pro forma financial information of our Group prepared
by PricewaterhouseCoopers, the texts of which are set out in Appendix II to this
prospectus;
(d) the audited consolidated financial statements of our Company for the three years
ended March 31, 2023, 2024 and 2025;
(e) the PRC legal opinions issued by Beijing Jingtian & Gongcheng Law Firm, our legal
advisor as to PRC laws, in respect of certain general corporate matters and property
interests of our Group;
(f) the legal opinion issued by Beijing Jingtian & Gongcheng Law Firm, our PRC Data
Compliance Advisor, in respect of PRC laws and regulations as to cybersecurity and
data protection;
(g) the letter of advice issued by Conyers Dill & Pearman, our legal advisor as to
Cayman Islands laws, in respect of certain aspects of the Cayman Companies Act
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 609 ---
(h) the counsel opinion issued by Ms. Queenie W.S. Ng, our HK Legal Counsel, in
respect of certain matters of our subsidiaries in Hong Kong;
(i) the legal opinion issued by Jorge Neto V alente — Lawyers & Notaries, our Macau
Legal Adviser, in respect of data compliance law in Macau;
(j) the transfer pricing report issued by PricewaterhouseCoopers Consultants
(Shenzhen) Limited, Beijing Branch, our transfer pricing consultant with respect to
transfer pricing arrangement of our Group;
(k) the report issued by Frost & Sullivan, the summary of which is set forth in the
section headed “Industry Overview” in this prospectus;
(l) the material contracts referred to in “Statutory and General Information — C.
Further Information about Our Business — 1. Summary of Material Contracts” in
Appendix IV to this prospectus;
(m) the written consents referred to in “Statutory and General Information — G. Other
Information — 9. Consents of Experts” in Appendix IV to this prospectus;
(n) the service contracts and the letters of appointment with our Directors referred to in
“Statutory and General Information — D. Further Information of our Directors and
Substantial Shareholders — 1. Directors’ Service Contracts and Appointment
Letters” in Appendix IV to this prospectus;
(o) the terms of the Share Option Scheme;
(p) the Cayman Companies Act; and
(q) a copy of the statement of particulars (including names, registered addresses, and
descriptions) of the Selling Shareholder.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
–V - 2–


--- page 610 ---
穎通控股有限公司
Eternal Beauty Holdings Limited
