Except for Customer A, one of our five largest customers in 2021, 2022 and 2023, respectively, who was also our supplier in 2022 and 2023, respectively, none of our major customers was our major supplier in each year during the Track Record Period.
Summary · p. 7
Negotiations of the terms of our sales to and purchases from this company were conducted on an individual basis, and the sales and purchases were neither inter-connected or inter-conditional with each other.
Business · p. 267
Our Directors confirmed that all of our sales to and purchases from this company were conducted in the ordinary course of business under normal commercial terms and on arm's length basis.
In 2020, we entered into a transaction with one of our suppliers, HK Hoi Fook Jewelry International Group ("HK Hoi Fook"), who had provided us with gold raw materials since 2018.
Business · p. 232
We believe that this sale was one-off in nature, was carried out by us primarily as an inventory management measure, and was in line with our commercial interest.
Business · p. 232
Our Directors confirm that our sales to and our purchases from the Overlapping Customer-Supplier were (i) entered into after due consideration taking into account the prevailing purchase and selling prices at the relevant times, and (ii) conducted on an arm's length basis.
Customer H (Supplier A), Customer B (Supplier F) and Customer K (Supplier J) are telecommunications operators in China, which supplied data services to us in our API marketplace. In the meantime, these suppliers or their affiliates also purchased query, SMS notice or top-up services, as well as data management solutions, from us.
Summary · p. 7
Revenue derived from these large customers were RMB51.1 million, RMB42.2 million and RMB65.4 million for each of the years ended December 31, 2021, 2022 and 2023, respectively, representing 19.6%, 12.8% and 14.8% of the total revenue, respectively.
Business · p. 221
(iii) large telecommunications operators and their local subsidiaries need a third-party platform to assist them in requesting other telecommunications operators’ data; and
To the best knowledge and belief of our Directors, during the Track Record Period, (i) Distributor A was one of the five largest suppliers in 2021, 2022 and 2023 and our customer in the same period; and (ii) Hebei Kangshi was our fourth largest supplier in 2023 and our customer in the same year (Distributor A and Hebei Kangshi, collectively, the "Overlapping Customers and Suppliers").
Business · p. 181
Our purchase amount from the Overlapping Customers and Suppliers were approximately RMB852.1 million, RMB723.1 million and RMB678.0 million for the years ended December 31, 2021, 2022 and 2023, representing approximately 41.0%, 32.9% and 33.1% of our total purchase amount for the corresponding years, respectively.
Business · p. 182
Negotiations of the terms of our sales to and purchases from these Overlapping Customers and Suppliers were conducted on an individual basis and the sales and purchases were neither inter-connected or inter-conditional with each other.
For the years ended 31 December 2021, 2022 and 2023, Client B, Supplier A, Client J, Client H, Client I, Client A and Supplier O during the Track Record Period (collectively, the ‘‘Overlapping Clients and Suppliers’’) were both clients and suppliers of our Group.
Business · p. 245
Those sales and purchases were neither inter-connected nor inter-conditional with each other.
Business · p. 246
(ii) the terms of transactions with the Overlapping Clients and Suppliers were separately negotiated with us and are comparable to the terms of transactions with our other clients and suppliers; and (iii) the prices of the transactions with the Overlapping Clients and Suppliers were no less favourable than our clients and suppliers who are not overlapping clients and suppliers.
The number of our overlapping customers and suppliers was nil, nil and six in 2021, 2022 and 2023, respectively.
Business · p. 474
Negotiations of the terms of our sales to and purchases from these overlapping customers and suppliers were conducted on an individual basis and the sales and purchases were neither inter-connected nor inter-conditional with each other.
Business · p. 474
Our revenue from these overlapping customers and suppliers in 2021, 2022 and 2023 was nil, nil and RMB0.7 million, respectively.
During each year of the Track Record Period, to the best knowledge and belief of our Directors, we provided services to one, one and two customers whose revenue contribution accounted for more than 1% of our total revenue in each year of the Track Record Period (the “Major Customers”) who were also our suppliers, respectively.
Business · p. 292
As confirmed by our Directors, (i) negotiations of the terms of our sales to and purchases from these overlapping customers and suppliers were conducted on an individual basis and the sales and purchases were neither inter-connected nor inter-conditional with each other
Business · p. 292
We made procurements from these Major Customers primarily because they had diverse and rich digital content and internet traffic.
During the Track Record Period and up to the Latest Practicable Date, to the best knowledge and belief of our Directors, one of our five largest customers, namely Customer B, was also our supplier.
Business · p. 239
Customer B would normally resell the used trays to us at a discounted price and such arrangement is made for the purpose of scrap recycling under the company policy of Customer B.
Business · p. 239
Our Directors confirmed, and the Sole Sponsor concurred that the transactions with Customer B were entered into on arm’s length negotiations and at comparable terms to contracts with other customers and suppliers.
In 2021, 2022 and 2023, to the best knowledge and belief of our Directors, 38, 29 and 32 of our customers were also our suppliers, respectively.
Business · p. 270
In 2021, 2022 and 2023, sales to all the customers who were also our suppliers accounted for approximately 30.2%, 28.4% and 25.6%, respectively, of our total revenue.
Business · p. 270
The terms of contracts that we entered with our overlapping customers and suppliers are based on arm’s length negotiations and are substantially the same as those we enter into with other customers and suppliers, respectively, that of similar services.
During the Track Record Period, in managing our merchandise sales business, we sourced goods for resale from a large number of our customers to which we provided marketing service.
Business · p. 309
In 2021, 2022 and 2023, revenue from the provision of marketing service to these major suppliers contributed approximately 0.4%, 1.5% and 0.7% of our total revenue, respectively, and purchases from these major customers contributed approximately 2.2%, 3.0% and 0.3% of our total purchase, respectively.
Business · p. 310
Our Directors have confirmed that all of our revenue and purchases from the overlapping customers and suppliers were conducted in the ordinary course of business under normal commercial terms.
In each year during the Track Record Period, among our top five customers and suppliers, we had one overlapping customer and supplier, CSUD Group and its associates.
Business · p. 260
Such arrangement was in place mainly due to the reasons that (i) we were a major player in Changsha in the supply of urban services and property management services, and (ii) CSUD Group and its associates provided resources such as fuel oil, water, and rental services for individuals and entities in Changsha, and it was common for companies based in Changsha to purchase from it.
Business · p. 260
Our Directors confirm that negotiations of the terms of our sales to and purchases from CSUD Group and its associates were conducted on an individual basis and the sales and purchases were neither inter-connected nor inter-conditional with each other.
During the Track Record Period, one of our five largest customers, who procured both precision marketing services and SaaS solutions and contributed to 5.4%, 3.2% and 2.0% of our revenue in each year of the Track Record Period, respectively, was also our supplier for advertising data services under both precision marketing services and SaaS business, contributing to 0.6%, 0.1% and 3.8% of our cost of sales in each year of the Track Record Period, respectively, and became one of our five largest suppliers in 2023.
Summary · p. 17
It is different subsidiaries of Company E that provided us advertising data services and used our SaaS products and consequently, the supply of products and/or services to Customer E by us is conducted independently from the purchase of products and/or services by us from Customer E during the Track Record Period.
Business · p. 295
According to Frost & Sullivan, it is a common practice in the precision marketing industry for media platforms to become advertisers when they have the advertising needs to market their products and services.
For FY2021, FY2022, FY2023 and 8MFY2024, we had a total of 16, 18, 19 and 14 Overlapping Customers & Suppliers, respectively, and our revenue generated from them amounted to RMB435.3 million, RMB1,004.3 million, RMB1,287.9 million and RMB638.6 million, respectively, representing approximately 20.9%, 26.1%, 27.3% and 28.0% of our total revenue, respectively.
Business · p. 248
For FY2021, FY2022, FY2023 and 8MFY2024, our purchases from them amounted to RMB699.3 million, RMB1,265.4 million, RMB2,807.8 million and RMB1,559.7 million, respectively, representing approximately 34.5%, 34.2%, 83.9% and 71.0% of our total purchases, respectively.
Business · p. 248
Our Directors confirmed that (i) the transactions with our Overlapping Customers & Suppliers were conducted on an arm’s length basis in the ordinary course of our business; (ii) negotiations of the terms of our sales to and purchases from our Overlapping Customers & Suppliers were conducted on an individual basis and the sales and purchases were neither interconnected nor inter-conditional with each other (save for Guizhou Tobacco Investment as mentioned above); and (iii) the terms of transactions, including pricing (save as described above in the OCS & Non-OCS Price Table) and other terms, with our Overlapping Customers & Suppliers were in all material respects comparable with those with our other customers and suppliers.
When we undertake projects for our customers, there may be occasions where our customers procure materials and other services on our behalf and subsequently deduct such amounts in the relevant progress payments to us.
Business · p. 178
For FY2020, FY2021, FY2022 and the nine months ended 30 September 2023, we incurred approximately HK$66.7 million, HK$6.1 million, HK$2.8 million and HK$22.1 million, respectively, for the procurement of materials and other services from our customers.
Business · p. 179
The pricing offered by Sum Kee Metal Company Limited to Customer B for the supply of steel was generally in line with that offered to our Group in other projects, hence the contra–charge arrangement with Customer B under Project No. #01 did not result in any material increase in procurement costs of steel or any material adverse effect to the profitability of Project No. #01 to our Group.
For the same year ended 31 December 2020, the aggregate revenue attributable to Supplier A and Supplier C amounted to approximately RMB229.1 million, representing approximately 60.7% of our total revenue, and the gross profit amounted to approximately RMB15.1 million with gross profit margin of approximately 6.6%.
Business · p. 215
Negotiations of the terms of our sales to and purchases from these overlapping customers and suppliers were conducted on an individual basis with their different respective group companies by responsible personnel from different departments of our Group, and the provision of our mobile advertising services to them and our acquisition of advertising space from them were neither inter-connected nor inter-conditional with each other and there was no setoff of receivables with payables during the Track Record Period.
Business · p. 215
The terms and conditions of the framework agreements entered by our Group and these overlapping customers and suppliers during the Track Record Period were generally in standard terms and there were no preferential terms in our transactions arising from the overlapping relationship.
During the Track Record Period, (i) Xintai Zhihui, one of our top five suppliers for the year ended December 31, 2020, was also one of our top five customers for the year ended December 31, 2022; and (ii) Tianjin Chengyu, one of our top five suppliers for the year ended December 31, 2021, was also our customer.
Business · p. 204
Our Directors confirm that the terms of our construction contracts and subcontracting agreement with Xintai Zhihui were negotiated on arm’s length basis and on normal commercial terms.
Business · p. 205
Our Directors confirm, with the support of the views of Frost & Sullivan, that the business relationship between Xintai Zhihui and us are generally consistent with the industry practice.
Customer C/Supplier J, as the same entity, was one of our five largest customers in 2020 and 2022, and also a supplier in 2021 and 2022 and one of our five largest suppliers in the six months ended June 30, 2023.
Business · p. 225
Negotiations of the terms of our sales to and purchases from Customer C/Supplier J and Customer B were conducted on an individual basis, and the sales and purchases were neither inter-connected or inter-conditional with each other.
Xunruida Technology (Beijing) Co., Ltd. is a wholly-owned subsidiary of Changjiu Industrial, which was our second largest customer in 2022.
Business · p. 203
Such services were provided by our related party in 2022 and were one-off in nature.
Financial Information · p. 318
As of the Latest Practicable Date, save for Xunruida Technology (Beijing) Co., Ltd., 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 suppliers during the Track Record Period.
While none of our major customers was also our suppliers or subcontractors for 6M2023 and none of our major suppliers or subcontractors was also our customer for 6M2023, three of our major customers (namely China Comservice, Customer A and Customer F, two major PRC telecommunication operators) were also our subcontractors and two of our major subcontractors (namely Subcontractor B and Subcontractor F) were also our customers from FY2020 to FY2022.
Business · p. 204
From FY2020 to FY2022, our (i) revenue generated from such entities amounted to approximately RMB43.2 million, RMB61.3 million and RMB53.9 million, respectively; and (ii) project level profit (calculated by deducting the Major Operating Costs from revenue of the project) generated from the same amounted to approximately RMB15.4 million, RMB17.3 million and RMB16.3 million, representing approximately 27.3%, 28.6% and 24.8% of our profit (which has also taken into account other expenses), respectively.
Business · p. 205
According to the CIC Report, it is common in the telecommunication network service industry that a supplier or subcontractor of a market player may also be its customer or vice versa, due to their different specialities, geographical markets and labour resources, and the level of our Group's overlapping of customers and suppliers/subcontractors is not anomalous compared with the industry norm.
During the Track Record Period, we provided construction engineering and specialised contracting services to Shenzhen Huachuang. For each of the years ended 31 December 2020, 2021 and 2022 and the six months ended 30 June 2023, our total revenue generated from Shenzhen Huachuang amounted to approximately nil, RMB69.7 million, RMB16.8 million and nil, respectively, representing approximately nil, 5.2%, 1.2% and nil of our total revenue, respectively, for the corresponding periods.
Business · p. 157
During the Track Record Period, we also engaged Shenzhen Huachuang as our supplier for the provision of raw materials and construction services. For each of the years ended 31 December 2020, 2021 and 2022 and the six months ended 30 June 2023, our total purchases from Shenzhen Huachuang amounted to approximately RMB4.8 million, RMB1.4 million, nil and nil, respectively, representing approximately 0.4%, 0.1%, nil and nil of our total purchase amount, respectively, for the corresponding periods.
Business · p. 157
During the Track Record Period, we provided foundation engineering and specialised contracting services to Zhongjian Hetu. For each of the years ended 31 December 2020, 2021 and 2022 and the six months ended 30 June 2023, our total revenue generated from Zhongjian Hetu amounted to approximately nil, nil, RMB27.2 million and RMB27.9 million, respectively, representing approximately nil, nil, 2.0% and 5.6% of our total revenue, respectively, for the corresponding periods.