Hong Kong IPO disclosure precedents · 335 companies, 336 items
A single customer accounts for a large share of revenue and the filing discusses reliance on it (mutual dependence, length of relationship, framework agreements).
For each year during the Track Record Period, revenue generated from our five largest customers in 2021, 2022 and 2023 accounted for 21.6%, 34.5% and 35.4%, respectively, of our total revenue in the same periods.
Summary · p. 11
Revenue from Customer A accounted for 15.1%, 55.5% and 51.2% of our revenue from digital precision marketing services in 2021, 2022 and 2023, respectively.
Business · p. 252
Therefore, we believe our collaboration with Customer A is mutually beneficial to each other’s business, as Customer A’s sales of such financial product were dependent on our precision marketing capabilities to promote such financial product to suitable financial product users on a large scale, and we grew our digital precision marketing services business through facilitating the sales of such financial product to potential financial product users.
In 2021, 2022 and 2023, revenue derived from services provided to our single largest customer, Xi'an ETDZ MC, amounted to RMB201.5 million, RMB224.5 million and RMB233.4 million, respectively, accounting for 33.9%, 31.8% and 27.1% of our total revenue, respectively.
Summary · p. 14
our Directors are of the view, and the Sole Sponsor concurs after due and careful inquiry, that it is unlikely that our relationship with Xi'an ETDZ MC would be terminated in the foreseeable future.
Summary · p. 14
Throughout the Track Record Period, we had made continuous efforts to enlarge our customer base by including more Independent Third Parties and to diversify our source of revenue.
The Group’s revenue attributable to its five largest customers in each year during the Track Record Period amounted to approximately RMB476.3 million, RMB409.9 million and RMB592.3 million, representing approximately 99.4%, 99.2% and 97.2% of its total revenue, respectively, while the revenue attributable to the largest customer of the Group in each year during the Track Record Period, namely Customer A, accounted for approximately 69.5%, 57.5% and 48.8% of its total revenue, respectively.
Summary · p. 6
The Directors consider that the Group’s concentration in revenue is largely attributable to the limited number of telecommunications network operators in the PRC’s telecommunications industry as mentioned above, essentially taken up almost all of the market share.
Business · p. 232
The Directors believe that the high revenue contribution from Customer A is largely due to the fact that (i) the Group is based and the majority of its projects are located in Jiangxi Province where Customer A enjoys a dominant market position; and (ii) the Group had established a relatively long business relationship with Customer A compared with other telecommunications network operators.
In each year during the Track Record Period, revenue contributed from our five largest customers was approximately S$29.8 million and S$31.0 million, respectively, representing approximately 76.0% and 80.0%, respectively, of our total revenue.
Summary · p. 3
As a result, a significant portion of our revenue during the Track Record Period was derived directly and indirectly from Customer A.
Business · p. 195
Our Directors consider that the business model of our Group is sustainable despite the customer concentration during the Track Record Period due to the following factors:
For each year during the Track Record Period, our revenue generated from our five largest clients accounted for 74.6%, 77.5% and 67.3%, respectively, of our revenue in the same year.
Summary · p. 6
Our revenue generated from our largest client for the years ended 31 December 2021, 2022 and 2023 accounted for 28.7%, 20.5% and 20.9%, respectively, of our revenue during those years.
Business · p. 229
As at the Latest Practicable Date, none of our Directors, their associates or any of our shareholders (who owned or to the knowledge of Directors had owned more than 5% of our issued share capital) had any interest in any of our five largest clients.
During the Track Record Period, our five largest customers in each year accounted for approximately 60.9%, 58.4% and 54.9% of our total revenue for the years ended 31 December 2021, 2022 and 2023, respectively, while our largest customer in each year accounted for approximately 20.6%, 18.9% and 16.7% of our total revenue for the respective year.
Summary · p. 9
Given (i) our Group’s extensive sales network; (ii) the market recognition and the proven track record with a long established history, our Directors believe that our Group has no major obstacles in expanding our customers base.
For FY2021, the total revenue attributable to Shenzhen EDA Group’s five largest customers amounted to RMB228.5 million, representing 36.2% of total revenue.
Summary · p. 8
For FY2022 and FY2023, total revenue attributable to our five largest customers in each year amounted to RMB242.1 million and RMB447.5 million, respectively, representing 34.2% and 37.0% of our total revenue, respectively.
Business · p. 223
We have maintained long-standing and stable business relationships of, on average, around four years of business relationships with our five largest customers in each year during the Track Record Period.
Revenue from our five largest customers in each year during the Track Record Period amounted to RMB259.3 million, RMB358.1 million, and RMB432.8 million, representing 60.1%, 67.7%, and 66.4% of our total revenue in the respective year.
Business · p. 253
During the Track Record Period, the total revenue we generated from CSUD Group and its associates as our customer amounted to RMB182.9 million, RMB234.7 million, and RMB289.5 million respectively, accounting for 42.4%, 44.4%, and 44.4% of our total revenue, respectively.
Summary · p. 2
Going forward, our Directors believe that, given (a) the long-standing cooperation relationship between our Group and CSUD Group and its associates; (b) our knowledge of and familiarity with the requirements of CSUD Group and its associates and our priority position in satisfying CSUD Group and its associates’ demand; (c) the mutual benefits for our Group and CSUD Group and its associates to maintain such reciprocal relationship; (d) various long-term cooperation agreements entered into between our Group and CSUD Group and its associates; and (e) CSUD Group and its associates and our Group are state-invested enterprises which have relatively stable controlling ownership, we expect that the mutually beneficial and complementary business relationship between our Group and CSUD Group and its associates will continue and in turn, is unlikely to be materially or adversely changed.
Revenue generated from our largest customer in each year of the Track Record Period accounted for 12.5%, 24.5% and 24.5%, respectively, of our total revenues during those years.
Summary · p. 17
Revenue generated from our five largest customers in each year of the Track Record Period accounted for 40.5%, 50.0% and 42.6%, respectively, of our total revenues during those years.
Summary · p. 17
We have a large customer base and do not rely on users from specific industry verticals.
For each of the years ended December 31, 2021, 2022 and 2023, our revenue generated from our five largest customers accounted for 37.0%, 62.8% and 49.9% of our revenue, respectively, while our revenue generated from our largest customer for each of the years ended December 31, 2021, 2022 and 2023, accounted for 24.1%, 42.6% and 27.4% of our revenue, respectively.
Summary · p. 9
Automotive Sub A was our largest customer in 2022 and 2023, from whom we generated revenue of RMB3.2 million, RMB213.0 million and RMB138.8 million, accounting for 0.8%, 42.6% and 27.4% of our total revenue in 2021, 2022 and 2023, respectively.
For FY2021, FY2022, FY2023 and 8MFY2024, sales to our largest customer accounted for approximately 27.9%, 22.4%, 20.0% and 9.6% of our total revenue, respectively, and sales to our top five customers accounted for approximately 58.1%, 59.4%, 52.4% and 40.8% of our total revenue, respectively.
Summary · p. 7
While we value our relationship with each of our customers, we believe that the loss of any one particular customer, including any one of our major customers, would not materially impact our business in the long term.
Business · p. 229
Further, we believe such strategic relationships and cooperations would benefit our customers and us mutually, as our customers are able to secure stable supply of quality fertiliser products while we are able to secure solid and stable demand for our fertiliser products.
For FY2020, FY2021, FY2022 and the nine months ended 30 September 2023, the revenue derived from our top customer for each year/period during the Track Record Period amounted to approximately HK$126.6 million, HK$151.6 million, HK$237.7 million and HK$118.3 million, respectively, while the revenue derived from our top five customers for each year/period during the Track Record Period amounted to approximately HK$296.6 million, HK$216.4 million, HK$315.6 million and HK$229.9 million in aggregate, respectively.
Summary · p. 8
Our Directors consider that our Group’s business model is sustainable despite such customer concentration due to the following factors:
Business · p. 174
Given the fragmented nature of the structural steelwork industry in Hong Kong as well as the business scale of the existing top market players, those structural steelwork contractors who are able to participate in one or more of the sizeable developments would inevitably end up being heavily reliant on the relevant main contractors and hence this may result in customer concentration for such structural steelwork contractor in the relevant periods.
Our 5 largest customers in each year/period during the Track Record Period collectively accounted for approximately 75.4%, 67.3%, 48.0% and 68.7% of our total revenue, respectively, and our revenue generated from our largest customer in each year/period during the Track Record Period accounted for approximately 31.0%, 24.0%, 16.3% and 40.8% of our total revenue, respectively.
Summary · p. 5
Our Directors consider that such customers concentration is not uncommon in the mobile advertising industry in the PRC and our business model is sustainable after having considered the following factors:
Business · p. 204
And, Customer A and Customer B have further committed to certain minimum annual purchase amount from us for our advertising services.
In 2020, 2021, 2022 and the six months ended June 30, 2023, revenue generated from our five largest customers in each year/period during the Track Record Period was RMB48.3 million, RMB150.3 million, RMB137.9 million and RMB96.5 million, respectively, accounting for 29.1%, 31.9%, 29.2% and 33.8% of our total revenue in the same periods, respectively, and revenue generated from our largest customer in each year/ period during the Track Record Period accounted for 7.4%, 12.2%, 12.2% and 16.4% of our total revenue in the same periods, respectively.
Summary · p. 4
The increase in revenue generated from our largest customer in each year/period during the Track Record Period was primarily resulting from a step-up of our market education efforts for our sales and installing of medical equipment and software in 2021, as Company A was a customer of our management and technical support services while Company F was a customer of our sales and installing of medical equipment and software with relatively large demands for our supply of high-value medical equipment.
For each of the years ended 31 December 2020, 2021 and 2022 and the six months ended 30 June 2023, the total revenue attributable to our five largest customers amounted to approximately RMB905.1 million, RMB759.2 million, RMB771.3 million and RMB226.9 million, representing approximately 67.9%, 56.5%, 56.0% and 45.9% of our total revenue, respectively, while the total revenue attributable to our largest customer for each of the same years/period amounted to approximately RMB274.8 million, RMB281.5 million, RMB205.8 million and RMB66.7 million, representing approximately 20.6%, 20.9%, 14.9% and 13.5% of our total revenue, respectively.
Business · p. 156
Our Directors confirm that as at the Latest Practicable Date, all of our five largest customers for each of the years/period during the Track Record Period were Independent Third Parties and they have no past or present relationships (including, but not limited to, employment, trust, financing, or family relationship) with our Group, its directors, shareholders, senior management or any of their respective associates.
Revenue generated from our five largest customers for the years ended December 31, 2020, 2021 and 2022 and the six months ended June 30, 2023 accounted for 29.1%, 33.3%, 33.2% and 43.8%, respectively, of our total revenue during those periods.
Summary · p. 4
As of the Latest Practicable Date, none of our Directors, their associates or any of our shareholders (who owned or to the knowledge of Directors had owned more than 5% of our issued share capital) had any interest in any of our five largest customers.
The sales to our top five customers in each year/period during the Track Record Period amounted to RMB492.6 million, RMB426.7 million, RMB720.9 million and RMB116.3 million, respectively, representing 66.5%, 52.2%, 71.5% and 44.5% of our total revenue for the respective years/period.
Summary · p. 9
Our Directors consider that our customer concentration is a result of our strategic decision to participate in government projects where certain of our top customers cater to end-customers generally consisting of multiple government institutes, such as schools.
Business · p. 290
As such, we expect that our customer base will become more diversified and the extent of our customer concentration is expected to decrease in the future.
In each year/period during the Track Record Period, revenue contributed from our five largest customers accounted for 99.9%, 99.9%, 100.0% and 100.0% of our total revenue in 2020, 2021 and 2022 and for the six months ended June 30, 2023, respectively, while the largest customer contributed 54.1%, 54.7%, 44.3% and 42.2% of our total revenue, respectively, for the same periods.
Summary · p. 13
In each year/period during the Track Record Period, revenue contributed from our five largest customers accounted for 99.9%, 99.9%, 100.0% and 100.0% of our total revenue in 2020, 2021 and 2022 and for the six months ended June 30, 2023, respectively, while the largest customer contributed 54.1%, 54.7%, 44.3% and 42.2% of our total revenue, respectively, for the same periods.
Business · p. 224
We consider it critical to diversify our revenue stream and plan to deepen our collaboration with existing direct sale customers and attract and establish long-term business relationship with new direct sale customers in the near future.
For each of FY2020, FY2021, FY2022 and 6M2023, our sales to Shandong Guoda amounted to approximately RMB335.8 million, RMB247.9 million, RMB418.4 million and RMB196.7 million (accounted for approximately 93.0%, 100.0%, 100% and 100% of our total revenue) respectively, and our sales to Shandong Humon amounted to approximately RMB25.2 million, nil, nil and nil (accounted for approximately 7.0%, nil, nil and nil of our total revenue) respectively.
Summary · p. 6
As such, for each of FY2020, FY2021, FY2022 and 6M2023, we had two customers and our sales derived from Shandong Guoda represented approximately 93.0%, 100.0%, 100.0% and 100.0% of our total revenue, respectively.
Business · p. 210
the Sole Sponsor concurred with the views of our executive Directors that our high customer concentration would not give rise to our Group’s undue reliance on the two Independent Third Party smelters and it is unlikely that they will materially and adversely change or terminate their business relationships with us in the future.
For the years ended December 31, 2021 and 2022 and the six months ended June 30, 2023, our revenue from Geely Group was RMB94.5 million, RMB1,277.5 million and RMB516.0 million, respectively, which accounted for 53.0%, 96.4% and 95.0% of our total revenue during the same period.
Summary · p. 9
For the years ended December 31, 2020, 2021 and 2022 and for the six months ended June 30, 2023, our revenue generated from the five largest customers in each period in aggregate accounted for 84.2%, 92.1%, 99.4% and 99.0% of our total revenue, respectively, and revenue generated from our largest customer in the relevant periods accounted for 63.0%, 53.0%, 96.4% and 95.0% of our total revenue, respectively.
Summary · p. 13
Our Directors are of the view that our Group’s business model is sustainable despite our customer concentration.