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)
Revenue derived from our top five clients accounted for approximately 48.1%, 45.6% and 41.7% of our revenue respectively and the largest client accounted for approximately 13.7%, 14.2% and 10.0% of our revenue respectively for each year during the Track Record Period.
Business · p. 149
For each of the three financial years ended 31 December 2022, four out of our top five clients are 4A’s agencies which in aggregate contributed approximately 39.9%, 37.8% and 33.7% of our total revenue for the respective years.
Business · p. 135
Throughout the Track Record Period, our top five clients (other than Distributor A and Supplier A (i.e. Client E)) for each year are 4A’s advertising agencies, all of which have maintained more than 10 years of business relationship with our Group and are Repeat Clients of our Group.
For the years ended December 31, 2021 and 2022, our revenue generated from our largest customer accounted for 61.6% and 90.8% of our total revenue, and revenue from our five largest customers in the aggregate represented 99.9% of our total revenue in each year.
Business · p. 390
During the Track Record Period, our revenue was primarily derived from (i) our license and collaboration agreements with MSD and other licensing partners, and (ii) provision of research and development services to Kelun Group and other third parties.
Business · p. 390
To the knowledge of our Directors, except for Kelun Group (together with Kelun Medicine & Trade Group) and MSD, none of our Directors, their respective associates or any shareholder who owned more than 5% of our issued share capital as of the Latest Practicable Date has any interest in any of our five largest customers during the Track Record Period.
Revenue generated from our largest customer in the years ended 31 December 2020, 2021 and 2022 amounted to approximately RMB399.9 million, RMB201.1 million and RMB206.5 million, representing approximately 29.1%, 15.6% and 14.3% of our total revenue, respectively.
Summary · p. 5
Revenue generated from our top five customers in the years in aggregate amounted to approximately RMB520.4 million, RMB406.1 million and RMB428.0 million, representing approximately 37.8%, 31.4% and 29.6% of our total revenue, respectively.
Business · p. 278
Our Directors confirm that none of our Directors, their respective associates or any shareholder (who to the knowledge of our Directors owned 5% or more of our Shares) held any interest in any of our top five customers during the Track Record Period.
In 2021 and 2022, our five largest customers in each year together accounted for 18.7% and 40.9%, respectively, of our total revenues in the same years, and our largest customer accounted for 18.7% and 39.4%, respectively, of our total revenues in the same years.
Summary · p. 18
The increasing concentration of customers during the Track Record Period was due to the fact that we engaged a distributor in Hong Kong for the commercialization of CUP-MNDE and a distributor in Hainan for the pilot commercialization of CU-40102 and CU-10201, which accounted for the majority of our total revenue during the Track Record Period.
Business · p. 345
We endeavor to expand and diversify our customer base by expanding direct sales channels as well as our distributor base to substantively reduce our top customer concentration going forward.
In each year during the Track Record Period, revenue generated from our five largest customers amounted to RMB962.3 million, RMB1,161.8 million and RMB1,418.1 million, respectively, representing 26.3%, 18.9% and 17.9% of our total revenue for the same periods, respectively.
Summary · p. 7
In each year during the Track Record Period, revenue generated from our largest customer amounted to RMB379.2 million, RMB454.6 million and RMB498.8 million, respectively, representing 10.4%, 7.4% and 6.3% of our total revenue for the same periods, respectively.
Summary · p. 7
As a result, we have fostered a diverse, blue chip, loyal and high-quality customer base to ensure our operational stability and sustainable growth.
For each year during the Track Record Period, the revenue derived from our top five customers contributed to RMB269.2 million, RMB250.4 million and RMB438.7 million, representing 65.2%, 60.2% and 71.0% of our total revenue, respectively.
Business · p. 249
Our Directors consider that the entering of such framework or long-term agreements demonstrated the mutual and well established relationship with our major customers, most of which are multinational FMCG brand owners.
Business · p. 249
Based on the aforementioned and the industry experience of our executive Directors, our Directors consider that customer concentration is not uncommon in our industry and the risk of customer reliance is not specific to us.
For the years ended 30 June 2020, 2021 and 2022 and the four months ended 31 October 2022, our largest customer in each year/period accounted for approximately 21.9%, 27.3%, 22.1% and 51.3% of our total revenue, respectively, while our five largest customers in each year/period accounted for approximately 69.3%, 67.4%, 60.3% and 86.9% of our total revenue, respectively.
Summary · p. 4
Due to the above, we experienced a certain degree of customer concentration during the Track Record Period.
Business · p. 153
However, our executive Directors believe that the identities of our largest customers change depending on the identity and status of our sizeable projects from time to time and we did not significantly rely on any individual customer.
In 2020, 2021 and 2022, revenue from our five largest customers in each year during the Track Record Period accounted for 20.6%, 19.3% and 23.2% of our total revenue for the respective years, and revenue from our largest customer in each year during the Track Record Period accounted for 8.7%, 7.2% and 11.2% of our total revenue for the respective years.
Summary · p. 19
All of our five largest customers and suppliers are independent third parties of our Group during the Track Record Period.
Summary · p. 20
We aim to acquire and retain new pharmaceutical and medical device companies and continue to diversify our customer base.
Our top five customers for the Track Record Period, which were primarily marketers in the e-commerce industry, accounted for 59.2%, 65.2%, 57.4% and 47.9% of our total revenue for the years ended December 31, 2019, 2020 and 2021 and the nine months ended September 30, 2022, respectively.
Summary · p. 10
We have established ongoing business relationships with our five largest customers for more than three years on average.
Business · p. 236
All of our five largest customers for the Track Record Period are Independent Third Parties.
In FY2019, FY2020, FY2021 and 9M2022, sales to our five largest customers in each year/period during the Track Record Period represented approximately 45.8%, 56.3%, 52.7% and 48.6% of our total revenue, respectively.
Summary · p. 12
We have a concentration of customers during the Track Record Period and for FY2019, FY2020, FY2021 and 9M2022, sales to our top five customers amounted to approximately RMB47.1 million, RMB93.9 million, RMB135.2 million and RMB104.1 million, representing approximately 45.8%, 56.3%, 52.7% and 48.6% of our total revenue, respectively, of which, Customer Group A, being our largest customer of FY2019, FY2021 and 9M2022 (and second largest in FY2020), accounted for approximately 15.5%, 14.6%, 16.1% and 15.1% of our total revenue for the same years/periods, respectively.
Business · p. 265
(iii) according to Frost and Sullivan, the above mutual reliance relationship is an industry norm practice, and by maintaining the well-established business and co-operation relationship with these major customers, our Directors consider such arrangement has been bringing, and will bring, in additional commercial and financial benefits to us and would not be detrimental to our long term substantiality.
For FY2019, FY2020, FY2021 and 9M2022, approximately RMB101.1 million, RMB165.8 million, RMB245.3 million and RMB208.4 million, representing approximately 98.4%, 99.5%, 95.6% and 97.3% of our total revenue derived from our recurring customers.
Summary · p. 12
Hence, during the Track Record Period, we placed heavier emphasis to formulate our business plans to cultivate relationship with existing customers. Moreover, according to Frost and Sullivan, such business strategy is also an industry norm in the biodegradable plastic products market.
Business · p. 266
For FY2019, FY2020, FY2021 and 9M2022, RMB101.1 million, RMB165.8 million, RMB245.3 million and RMB208.4 million, representing approximately 98.4%, 99.5%, 95.6% and 97.3% of the total revenue, was derived from our recurring customers.
For each of FY2019, FY2020, FY2021 and 3Q2022, revenue from our top five customers amounted to approximately RMB841.7 million, RMB796.6 million, RMB846.0 million and RMB579.7 million, respectively, accounting for 46.2%, 45.0%, 46.4% and 42.4% of our total revenue, respectively.
Summary · p. 4
According to F&S, it is an industry norm that the construction companies usually have relatively short business relationship with their customers as most of the construction project(s) are obtained through tendering and the contractors are engaged on a project-by-project basis.
For the years ended December 31, 2019, 2020 and 2021 and the nine months ended September 30, 2022, revenue derived from the provision of services to our five largest customers represented approximately 20.9%, 18.7%, 25.6% and 19.7% of our total revenue for each year/period of the Track Record Period, respectively, and revenue derived from our largest customer represented approximately 7.7%, 5.0%,
Summary · p. 3
All of our top five customers during the Track Record Period are Independent Third Parties.
Business · p. 278
To the best of the knowledge of our Directors, none of our Directors, their respective close associates or any of the Shareholders who owned more than 5% of the issued share capital of our Company as at the Latest Practicable Date had any direct or indirect interest in any of our five largest customers during the Track Record Period.
In 2019, 2020, 2021 and the nine months ended September 30, 2022, revenue generated from our top five customers, accounted for 25.5%, 18.2%, 19.4% and 26.2% of our total revenue in the same period, respectively.
Summary · p. 8
In 2019, 2020, 2021 and the nine months ended September 30, 2022, revenue generated from our top five customers in each year or period amounted to RMB909.5 million, RMB848.8 million, RMB1,218.4 million and RMB1,232.4 million, representing 25.5%, 18.2%, 19.4% and 26.2% of our total revenue for the respective year or period.
Business · p. 257
Our customers operate in a broad range of industry sectors, and during the Track Record Period, shipping orders from each of the industry sectors where our customers operate generally accounted for less than 20% of our total Online GTV during the same period.