Hong Kong IPO disclosure precedents · 550 companies, 554 items
a large share of revenue from the largest or five largest customers, discussed as reliance or concentration (why it is mutual, sustainable, how it will be reduced)
For each year during the Track Record Period, our five largest customers generated RMB110.8 million, RMB101.5 million and RMB153.3 million of revenue, respectively, accounting for 22.0%, 18.4% and 15.2% of our total revenue for the same years, respectively.
Summary · p. 10
Leveraging our effective business model and strong service capabilities, we have established stable relationships with our KA customers, with an average of over two years of cooperation history as of December 31, 2023.
Business · p. 296
For our marketing service, we experienced an upward trend in the number of KA customers, with 27 KA customers in 2021, 28 KA customers in 2022 and 47 KA customers in 2023.
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 FY2020, FY2021, FY2022 and 9M2023, sales to our largest customer in each year/ period accounted for approximately 15.3%, 16.3%, 16.5% and 16.7%, of our total revenue, respectively.
Business · p. 179
To the best knowledge of our Directors, our Group is the sole supplier of potted vegetable produce and the major supplier of vegetable produce of our five largest customers in each year/ period during the Track Record Period.
Business · p. 194
The aggregated revenue contribution from our five largest customers accounted for 70.1% of our total revenue in the year ended 31 December 2019, which was reduced to 56.1%, 66.3%, 67.3% and 68.1% of our total revenue in FY2020, FY2021, FY2022 and 9M2023.
For the years ended December 31, 2020, 2021, 2022 and for the nine months ended September 30, 2023, the aggregate revenue generated from our top five customers in each year/period of the Track Record Period amounted to RMB61.1 million, RMB71.7 million, RMB63.1 million and RMB70.5 million, which accounted for 10.4%, 11.1%, 8.5% and 9.6% of our total revenue, respectively.
Summary · p. 12
For the same periods, revenue from the largest customer amounted to RMB26.0 million, RMB36.7 million, RMB17.5 million and RMB21.8 million, which accounted for 4.4%, 5.7%, 2.4% and 3.0% of our total revenue, respectively.
Business · p. 301
To the best of our knowledge, during the Track Record Period and up to the Latest Practicable Date, our customers were Independent Third Parties.
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.
For the years ended December 31, 2020, 2021, 2022 and the six months ended June 30, 2023, the total revenue attributable to our top five customers amounted to RMB49.8 million, RMB174.5 million, RMB222.1 million and RMB90.3 million, representing 53.9%, 63.5%, 77.0% and 85.4% of our total revenue, respectively, while total revenue attributable to our largest customer for the same year/period was RMB13.0 million, RMB55.8 million, RMB94.5 million and RMB33.3 million, accounting for 14.0%, 20.3%, 32.8% and 31.4% of our total revenue, respectively.
Summary · p. 9
Our relatively concentrated customer base was mainly attributable to our undertaking of more large scale projects during the Track Record Period, of which, we allocated the majority of our resources, capacity and available manpower to such projects at the relevant time.
Business · p. 184
However, our top five customers are generally different for each of the year/period during the Track Record Period and we do not rely on any of our major customers.
During the Track Record Period, revenue from sales to our five largest customers in that year/period amounted to RMB143.6 million in 2020, RMB167.9 million in 2021, RMB279.3 million in 2022 and RMB173.9 million in the six months ended June 30, 2023, which accounted for 33.3%, 35.1%, 51.0% and 56.2% of our total revenue, respectively.
Business · p. 194
Since we are the largest service provider in the pledged vehicle monitoring service market in China, we typically established relationship and subsequently became acquainted with our five largest customers who valued our national service coverage and industry experience in each of the years ended December 31, 2020, 2021 and 2022 and the six months ended June 30, 2023.
Business · p. 195
As of the Latest Practicable Date, none of our Directors, their close associates or any Shareholders who, to the knowledge of our Directors, owned more than 5.0% of our issued share capital had any interest in any of our five largest customers during the Track Record Period (other than Changjiu Industrial).
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.
The revenue generated from our five largest customers in each year/period during the Track Record Period in aggregate amounted to approximately RMB116.8 million, RMB123.9 million, RMB115.6 million and RMB53.3 million, representing approximately 59.6%, 61.0%, 51.0% and 46.8% of our total revenue, respectively, whereas revenue generated from our largest customer in each year/period during the Track Record Period accounted for approximately 21.2%, 24.0%, 23.8% and 22.6%, respectively, of our total revenue.
Summary · p. 8
In general, we have achieved a high customer retention rate, as evidenced by the fact that approximately 46.2%, 45.7%, 48.1% and 69.7% of our customers for FY2020, FY2021, FY2022 and 6M2023 respectively were repeat customers (being customers in a particular year/period during the Track Record Period who engaged us for our services or purchased our software at least once in the three financial years immediately preceding that particular year) and they contributed revenue of approximately RMB163.0 million, RMB174.6 million, RMB198.3 million and RMB88.1 million, representing approximately 83.3%, 85.9%, 87.6% and 77.4%, respectively, of our total revenue during FY2020, FY2021, FY2022 and 6M2023.
Summary · p. 9
Our Directors confirm that during the Track Record Period and up to the Latest Practicable Date, our Group had not experienced any major disruption in business due to material delays or defaulting payments by our customers owing to their financial difficulties.
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.
Our sales to Pingmei Shenma represented 34.4%, 47.0%, 41.1% and 42.3% of our total revenue for FY2020, FY2021, FY2022 and 1H2023, respectively.
Summary · p. 6
(i) the reliance is mutual and complimentary as evidenced by our stable track record with Pingmei Shenma since 2013;
Summary · p. 6
While we will continue to sell hydrogenated benzenebased chemicals to Pingmei Shenma with our increase of production capacity, the proportion of our total revenue attributed to our sales to Pingmei Shenma will decrease.