Ausupreme International Holdings Limited to Raise a Maximum Net Proceeds of Approximately HK$100 Million from Hong Kong Public Offering

HONG KONG--()--Ausupreme International Holdings Limited:

Highlights

  • Ausupreme is a Hong Kong-based brand builder and retailer of health and personal care products.
  • Ausupreme currently focuses on developing, marketing, selling and distributing of products mainly three brands, namely “Organic Nature”, “Top Life” and “Superbee”, which invoked the core value and focus of “澳至尊” — quality health and personal care products vastly sourced from Australia with active ingredients from extracts of natural resources to our consumers.
  • Ausupreme currently operates 13 specialty stores and 74 consignment sales counters in Hong Kong and Macau offering a wide spectrum of 61 health supplement products, 21 honey and pollen products and 11 personal care products.
  • Ausupreme establishes a multi-channel “澳至尊” sales and distribution network including (i) retail sales at the Group’s self-operated specialty stores in Hong Kong and Macau; (ii) consignment sales (including counter sales and shelf product sales) at the consignee stores in Hong Kong and Macau; (iii) wholesale sales to individual and chain retailers; (iv) online shopping platforms in China, online sales through the Group’s own website; (v) distribution sales in Singapore via an exclusive distributor; and also (vi) sales through exhibitions and trade fairs.
  • According to the Euromonitor report, milk thistle, berry and squalene products of Organic Nature ranked first in terms of retail value sales in Hong Kong health supplement market in 2014, fish oil and royal jelly ranked second and third respectively.

Financial Highlights

  For the year ended 31 March
HK$’000   2014   2015   2016
Revenue 195,461   225,788   210,840
Gross Profit 163,680 189,864 180,342
Profit before tax 41,289 29,112 16,657
Net profit for the year attributable to equity owners of the Company

34,575

23,174

12,293

Adjusted net profit for the year attributable to equity owners of the company (excluding listing expenses)

34,575

25,266

25,342

Gross Profit Margin (%) 83.7% 84.1% 85.5%
 

A well-known Hong Kong-based brand builder and retailer of health and personal care products, Ausupreme International Holdings Limited (“Ausupreme”, together with its subsidiaries, the “Group”; stock code: 2031), announces the details of its plan to list on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”) today.

A total of 187,500,000 shares will be offered under the Hong Kong Public Offering. The Offer Price per offer share is expected to be not less than HK$0.55 and not more than HK$0.71. The Hong Kong Public Offering will commence on 30 August 2016 (Tuesday) and close at 12:00 noon on 2 September 2016 (Friday). The final Offer Price and allotment results are expected to be announced on 9 September 2016 (Friday). Dealings of Shares on the Main Board of the SEHK is expected to commence on 12 September 2016 (Monday).

Assuming an Offer Price of HK$0.71 per Offer Share (being the highest-point of the indicative Offer Price range), the aggregated net proceeds from the Hong Kong Public Offering will be approximately HK$100.0 million. Ausupreme intends to apply the net proceeds as follows: 1) approximately 35% for further developing and strengthening the brand; 2) approximately 25% for maintaining, expanding and improving sales network; 3) approximately 17% for exploring business collaboration and expanding customer base; 4) approximately 13% for diversifying and expanding product portfolio; and 5) the remaining balance of 10% for the Group’s general working capital.

Ample Capital Limited and Upbest Securities Company Limited are the Sponsor and the Sole Lead Manager of the Hong Kong Public Offering respectively. Hong Kong International Securities Limited, Quam Securities Company Limited and Ping An Securities Limited are the Co-Managers.

Business Overview

Ausupreme was founded by Mr. Choy Chi Fai and Ms. Ho Ka Man in 2001. It is a Hong Kong-based brand builder and retailer of health and personal care products focusing on the developing, marketing, selling and distributing of the branded products managed by them through its “澳至尊” sales and distribution network. Currently, it develops and manages mainly three brands, namely “Organic Nature”, “Top Life” and “Superbee”.

A wide selection of over 61 health supplement products, 21 honey and pollen products and 11 personal care products are selling under an extensive distribution channel covering different districts in Hong Kong and Macau, including 13 specialty stores and 74 consignment sales counters. It also sells its products through its own e-commerce sales network and co-operate with online shopping platforms in China, as well as developing sales network in Singapore via an exclusive distributor. Direct sales are made through exhibitions and trade fairs. Super Eye Care, Royal Jelly, Omega-3, Bilberry, Liver Tonic and Propolis etc. are its ace products.

According to the Euromonitor report, milk thistle, berry and squalene products of Organic Nature ranked first in terms of retail value sales of each product in the Hong Kong health supplement products market in 2014, fish oil and royal jelly ranked second and third respectively.

For the three years ended 31 March 2016, the Group generated revenue of approximately HK$195.5 million, HK$225.8 million and HK$210.8 million. Its net profit was approximately HK$34.6 million, HK$23.2 million and HK$12.3 million while its adjusted net profit (excluding listing expenses) was approximately HK$34.6 million, HK$25.3 million and HK$25.3 million for the respective years.

Competitive Strengths

Followings are the competitive strengths of the Group:

1) Multi-faceted marketing strategy and sales and distribution networks associated with the well recognised and trusted brand image of “澳至尊”

The core value of “澳至尊” is to source quality health and personal care products from Australia with ingredients from extracts of natural resources to consumers. The Group has carried out multi-faceted marketing strategy effectively through its established sales and distribution network and professional customer services. The continuous expansion of its sales network during the Track Record Period has accelerated the penetration of its branded products into the consumer market in Hong Kong and also strengthened its “澳至尊” brand image.

In order to further enhance its brand image, the Group advertises through various media, such as television, printed media, billboards and online channels and has engaged two well-known artists, Zhang Jin (張晉) and Ada Choi Siu Fun (蔡少芬) in Hong Kong and Macau with healthy image as its brand spokespersons.

2) Stable exclusive distribution rights with suppliers

The Group has maintained stable and long relationships with its major suppliers, having over five years of business relationship. The Group has been granted rights to distribute its products exclusively in Hong Kong and Macau, or exclusively worldwide. Most of the Group’s health supplement products are primarily sourced from well-established suppliers, produced and packaged in GMP-certified factories with licences to manufacture therapeutic goods issued by TGA or factory with HACCP certificate granted by SGS Systems and Services Certification Pty Ltd for liquid honey products.

3) Experienced management team

The Group has an experienced management team. The founders Mr. Choy Chi Fai and Ms. Ho Ka Man have over 14 years of experience in sales and marketing of health supplement products and personal care products in Hong Kong. Mr. Choy Chi Fai was appointed as a Council Member of Hong Kong Health Food Association since 2010. He was the Treasurer of the Association between October 2011 and October 2015.

Future Strategies

Looking forward, the Group intends to pursue the following strategies:

1) Further develop and strengthen the brand

To further enhance the popularity of the Group’s products, brand awareness and image, it will continue its marketing and promotion activities as well as explore other marketing channels, such as online marketing, sponsorship to health related or sports and advertising on public transport. Meanwhile, the Group will organise regular in-house trainings to improve its staff’s knowledge on health and nutrition related information by professionals.

2) Maintain, expand and improve sales network

The Group strives to expand and improve multi-channel “澳至尊” sales and distribution network continuously to capture a wider customer base and improve sales revenue. It plans to expand its network of self-operated specialty stores by opening more in Hong Kong, depending on the market conditions. The Group plans to open 1 to 2 specialty stores by 30 September 2017 and 2 to 4 specialty stores by 31 March 2018.

The Group also intends to open concept stores in Hong Kong, which will be more functional than specialty stores. The concept stores will offer customers a more spacious environment for product trial and will include a health corner where customers can obtain health and natural food related information. The Group may employ nutritionists and other professionals who will provide health and nutrition advice to customers at the concept stores.

In terms of consignment sales network, the Group will continue to extend its consignment sales coverage as well as improving its sales counters and shelf space at the consignees’ retail stores. It intends to set up 1 to 2 sales counters by 30 September 2017 and 3 to 5 more by 31 March 2018.

3) Explore business collaboration and expand customer base

The Group started operating an online store in 2012 and has started to sell its products to well-established online shopping platforms in China. Online shopping is gaining popularity expeditiously due to the high traffic on the online shopping platform. The board believes that it will become an important shopping channel for consumers in the future. Therefore, the Group will continue to develop its e-commerce sales network and explore opportunities to co-operate with more online shopping platforms in Hong Kong, China and other regions.

Apart from expanding online sales channel, the Group continuously explores business opportunities in other Asia-Pacific markets. It will start building business relationship in related markets by means of wholesaling, consignment sales or distributorship.

4) Diversify and expand product portfolio

The Group will continue to enrich its product portfolio to meet the evolving consumer preference. The Group continuously communicates and discusses with its existing brand proprietors on the potential and practicality of developing new products.

About Ausupreme International Holdings Limited

Ausupreme is a well-known Hong Kong-based brand builder and retailer of health and personal care products focusing on developing, marketing, selling and distributing of the branded products managed by the Group through “澳至尊” sales and distribution network. Currently, the Group has developed distribution channels in Hong Kong, Macau, Singapore and China. The three brands under the Group include “Organic Nature”, “Top Life” and “Superbee” which provide health supplement products, honey and pollen products and personal care products. The Group's distribution network currently has a total of 13 specialty stores and 74 sales counters in Hong Kong and Macau and is still expanding.

Contacts

Stimulus Investor Relations Ltd.
Ms. Hill Ho / Ms. Jessica Choi
+852 3159 2944 / +852 3159 2916
hill.ho@stimulus-ir.com / jessica.choi@stimulus-ir.com

Contacts

Stimulus Investor Relations Ltd.
Ms. Hill Ho / Ms. Jessica Choi
+852 3159 2944 / +852 3159 2916
hill.ho@stimulus-ir.com / jessica.choi@stimulus-ir.com