In the three months ended March 31, 2023, Neusoft Corporation was our largest customer, accounting for 4.0% of our total revenue, and Neusoft Medical Systems Co., Ltd. (a company in which Neusoft Corporation held 29.94% of equity interests and Neusoft Holdings, the single largest shareholder of Neusoft Corporation, held 15.51% of equity interests) was the second largest customer, accounting for 3.2% of our total revenue.
Business · p. 291
Both Neusoft Corporation and Neusoft Medical Systems Co., Ltd. are also our suppliers. In particular, in 2020, 2021 and 2022, Neusoft Corporation was among our top five largest suppliers.
Business · p. 291
In 2020, 2021 and 2022, Neusoft Corporation was among our five largest suppliers. In the three months ended March 31, 2023, Neusoft Corporation and Neusoft Medical Systems Co., Ltd. (a company in which Neusoft Corporation held 29.94% of equity interests and Neusoft Holdings, the single largest shareholder of Neusoft Corporation, held 15.51% of equity interests) were among our five largest customers.
One of our five largest clients in each year/period of the Track Record Period, Client C, and one of our five largest suppliers in 2020, Supplier D, belong to the same group which primarily engages in the development of computer and network technologies and provision of related goods and services, including online games and mobile games.
Business · p. 289
For the years ended December 31, 2020, 2021 and 2022 and the four months ended April 30, 2023, revenue we generated from Client C amounted to RMB288.7 million, RMB1,342.4 million, RMB2,796.3 million and RMB578.4 million, respectively, accounting for 10.1%, 23.4%, 31.7% and 23.6% of our total revenue, respectively.
Business · p. 289
Our Directors confirmed that all of our sales to Client C and purchases from Supplier D were conducted in the ordinary course of business under normal commercial terms and on arm's length basis.
Our Directors confirmed our negotiations with these companies were on an arm’s length basis.
Business · p. 247
Except as disclosed above, none of our other top five suppliers during the Track Record Period were also our customers, and none of our other top five customers during the Track Record Period were also our suppliers.
Save for Supplier A (i.e. Client E) has become one of our Group’s top five clients for the years ended 31 December 2021 and 2022, our Directors confirmed that none of our suppliers was our major clients during the Track Record Period.
Business · p. 158
Supplier A operates a social networking platform which provides boosting services for our online marketing solutions.
Business · p. 158
The programmatic revenue generated from the social media platforms of Supplier A amounted to approximately HK$8.4 million, HK$19.0 million and HK$19.2 million during the three financial years ended 31 December 2020, 2021 and 2022, representing approximately 4.4%, 7.9% and 8.0% of our total advertising revenue respectively.
During the year ended December 31, 2022, our largest customer (i.e. Customer G or the MCN Company) was also one of our suppliers during the financial period.
Business · p. 258
Customer G is treated as our customer when it enters into cooperation agreement with the brand owners and is responsible for collecting the fees from the brand owner(s) and transferring to us our share of the relevant fees.
Business · p. 258
For the year ended December 31, 2022, our revenue derived from Customer G amounted to RMB28.6 million.
For the years ended 31 December 2020, 2021 and 2022, revenue from the provision of our engineering construction services to such company was approximately nil, nil and RMB14.3 million, representing approximately nil, nil and 1.0% of our total revenue, respectively.
Business · p. 283
Our purchase amount in relation to engineering construction services provided by such company for the years ended 31 December 2020, 2021 and 2022 amounted to RMB1.1 million, RMB11.1 million and RMB7.3 million, representing approximately 0.1%, 1.3% and 0.7% of our total purchase for the same years, respectively.
Business · p. 283
Our Directors have confirmed that our trade payables to and our trade receivables from the aforementioned engineering construction company were settled separately, and the relevant sales and purchases were neither inter-connected nor inter-conditional with each other.
For the years ended 31 December 2020, 2021 and 2022, revenue from the provision of our heat services to such company was approximately RMB7.0 million, RMB8.9 million and RMB11.4 million, representing approximately 0.5%, 0.7% and 0.8% of our total revenue, respectively.
Business · p. 283
Our purchase amount in relation to gas-fired boilers from such company for the years ended 31 December 2020, 2021 and 2022 amounted to nil, RMB23.7 million and nil, representing approximately nil, 2.7% and nil of our total purchase, respectively.
Business · p. 284
Our Directors have confirmed that our trade payables to and our trade receivables from the aforementioned urban development company were settled separately, and the relevant sales and purchases were neither inter-connected nor inter-conditional with each other.
For the years ended 31 December 2020, 2021 and 2022, engineering construction services provided to such bureau amounted to approximately RMB12.7 million, RMB19.7 million and nil, respectively. There was no gross profit generated in these transactions since the transactional amounts represented actual expenses which had been/will be subsequently reimbursed by such bureau.
Business · p. 284
According to the heat service facilities leasing arrangements, we shall pay RMB9.5 million to such bureau each year.
Business · p. 284
Our Directors have also confirmed that the engineering construction services and leasing arrangements were conducted in the ordinary course of our concession operation under normal commercial terms and on an arm's length basis.
For the year ended 31 December 2021 and 2022, our sales to these companies accounted for approximately 0.6% and 0.2% of our total revenues, respectively. During the same periods, our purchases from such companies accounted for approximately 6.9% and 1.1% of our total purchases, respectively.
Business · p. 202
According to Frost & Sullivan, it is common to have overlapping customer-supplier relationship when a marketplace and a self-operation business coexist in a company’s normal business operations.
During the years ended December 31, 2020, 2021 and 2022, we had 113, 178 and 192 overlapping customers/suppliers (i.e. those who were both our customers and suppliers during the Track Record Period) calculated on a standalone basis (as opposed to a group consolidated basis).
Business · p. 234
For the years ended December 31, 2020, 2021 and 2022, the aggregated purchases from such overlapping customers/suppliers were RMB4,466.5 million, RMB4,649.9 million and RMB1,046.3 million, respectively, accounting for 56.2%, 39.4% and 21.8%, respectively, of our total purchases for the same periods.
Business · p. 235
Our Directors confirm that terms and conditions in relation to our transactions with the overlapping customers/suppliers during the Track Record Period were comparable to those with other non-overlapping customers/suppliers.
During the Track Record Period, there are instances of contra charge arrangements where our customers, being contractors in the projects, may pay on our behalf for certain expenses for such projects, whereby such expenses would be deducted from their payments to us as their subcontractor in settling their contractual fees for such projects.
Summary · p. 5
During the Track Record Period, we had contra charge arrangements with our five largest customers in each year/period, specifically, Customer Group A, Customer Group C, Customer Group D, Customer Group E and Customer Group F.
We may, from time to time, have overlapping marketers and media publishers, which, according to Frost & Sullivan, is a common practice in our industry as resellers and agents of media publishers may offer to one another different media resources depending on their respective focused media platforms and media coverage, and in certain cases, media publishers may become marketers when they have products or services to market of their own.
Business · p. 198
The revenue generated from Customer E as a percentage of our total revenue was 15.6%, 13.1%, 3.2% and 0.5% for the years ended December 31, 2019, 2020 and 2021 and the nine months ended September 30, 2022, respectively.
Business · p. 198
The revenue generated from Media Publisher B as a percentage of our total revenue was nil, 2.2%, 2.0% and 1.5% for the years ended December 31, 2019, 2020 and 2021 and the nine months ended September 30, 2022, respectively.
One of our major customers was also our supplier during the Track Record Period.
Summary · p. 12
We sold to and purchased from Changchun Hengxing during the Track Record Period because, to the best knowledge and belief of our Directors, (i) Changchun Hengxing is a company specialising in selling (a) non-biodegradable automobile plastic parts; and (b) non-biodegradable plastic material including PP; (ii) PP is necessary for our production of certain non-biodegradable automobile plastic parts; and (iii) Changchun Hengxing was able to provide the required raw materials within the designated timeframe.
Business · p. 279
Our Directors confirm that each transaction with Changchun Hengxing was (i) conducted through arm's length negotiation; (ii) conducted with the terms thereof being subject to negotiation in each individual order; (iii) independent and not inter-connected nor inter-conditional with each other; and (iv) made on a separate individual standalone order-by-order basis.
During the Track Record Period, Hangxiao Technology acted as our supplier for steel construction products or processing services.
Summary · p. 5
During the Track Record Period, our Group provided building construction services to Hangxiao Technology and also purchased steel construction products or processing services from Hangxiao Technology, which is in accordance with the terms of the relevant contracts with Hangxiao Technology.
Business · p. 294
The terms of our sales to and purchases from Hangxiao Technology were determined on a project-by-project basis and the sales and purchases were neither inter-connected nor inter-conditional with each other.
For the years ended December 31, 2019, 2020 and 2021 and the nine months ended September 30, 2022, the aggregate amount of cost of sales incurred in relation to the sales to Shanghai Weilun, Supplier L, Customer E, Customer L and Customer O amounted to approximately USD4.7 million, USD8.3 million, USD12.2 million and USD22.4 million, respectively, representing approximately 3.9%, 5.0%, 3.9% and 9.7% of our total cost of sales, respectively, while the aggregate amount of revenue attributable from Shanghai Weilun, Supplier L, Customer E, Customer L and Customer O amounted to approximately USD5.5 million, USD8.3 million, USD13.9 million and USD26.9 million, respectively, representing 4.1%, 4.6%, 3.7% and 9.4% of our total revenue, respectively.
Business · p. 286
According to the F&S Report, it is a common practice in the maritime shipping industry for shipping services companies to charter vessels to and from other shipping services companies so as to manage their shipping capacities.
Business · p. 288
Our Directors confirm that all of the services to and from our overlapping customers and suppliers during the Track Record Period were conducted on an arm's length basis, on normal commercial terms and in the ordinary course of business, and that none of the transactions between us and our overlapping customers and suppliers were inter-connected or inter-conditional with one another.
To the best knowledge and belief of our Directors, Customer K, one of our top five customers in 2021 and the nine months ended September 30, 2022, was also a supplier to us in the same period.
Business · p. 259
In 2019, 2020, 2021 and the nine months ended September 30, 2022, our revenue attributable to Customer K amounted to RMB0.2 million, RMB0.2 million, RMB416.0 million and RMB465.5 million, respectively, representing 0.006%, 0.004%, 6.6% and 9.9% of our total revenue during the corresponding period, respectively.
Business · p. 259
Our Directors are of the view that such arrangements are mutually beneficial, given that we negotiated with Customer K on an arm’s-length basis.