China Yu Tian Holdings Limited 中國宇天控股有限公司

Transcription

1 China Yu Tian Holdings Limited 中國宇天控股有限公司 (Incorporated in the Cayman Islands with limited liability) Stock Code: 8230 LISTING BY WAY OF PLACING Sole Sponsor Sole Global Coordinator, Sole Bookrunner and Sole Lead Manager

2 IMPORTANT If you are in any doubt about any content of this Prospectus, you should obtain independent professional advice. China Yu Tian Holdings Limited (Incorporated in the Cayman Islands with limited liability) LISTING ON THE GROWTH ENTERPRISE MARKET OF THE STOCK EXCHANGE OF HONG KONG LIMITED BY WAY OF PLACING Number of Placing Shares : 210,000,000 Shares (Subject to the Over-allotment Option) Placing Price : Not more than HK$0.54 per Placing Share and expected to be not less than HK$0.50 per Placing Share plus brokerage of 1%, the SFC transaction levy of % and the Stock Exchange trading fee of 0.005% (payable in full on application and subject to refund) Nominal Value : HK$0.01 per Share Stock Code : 8230 Sole Sponsor Sole Global Coordinator, Sole Bookrunner and Sole Lead Manager Co-Lead Managers BLACK MARBLE Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from, or in reliance upon, the whole or any part of the contents of this Prospectus. A copy of this Prospectus, having attached thereto the documents specified in Appendix VI Documents Delivered to the Registrar of Companies and Available for Inspection, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this Prospectus or any other documents referred to above. The Placing Price is expected to be determined by agreement between the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company on the Price Determination Date, which is expected to be on or around Thursday, 24 December 2015 (Hong Kong time) or such later date may be agreed by the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company. If, for any reason, the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company are unable to agree on the Placing Price on or before Thursday, 24 December 2015 (Hong Kong time) or such later date may be agreed by the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company, the Placing will not proceed and will lapse. The Placing Price will be not more than HK$0.54 and is currently expected to be not less than HK$0.50, unless otherwise announced. The Sole Global Coordinator (for itself and on behalf of the Underwriters) may, with the Company s consent, reduce the indicative Placing Price range stated in this Prospectus at any time prior to the Price Determination Date. In such a case, notice of such reduction will be published on the Company s website at and the website of the Stock Exchange at as soon as practicable but in any event not later than the Price Determination Date. Further details are set out in Structure and Conditions of the Placing of this Prospectus. Prior to making an investment decision, prospective investors should consider carefully all the information set out in this Prospectus, including the risk factors set out in Risk Factors of this Prospectus. Prospective investors of the Placing Shares should note that the obligations of the Underwriters under the Underwriting Agreement are subject to termination by the Sole Global Coordinator (for itself and on behalf of the Underwriters) upon the occurrence of any of the events set forth under Underwriting The Underwriting Agreement Grounds for Termination in this Prospectus at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date. Further details of these termination provisions are set out in Underwriting of this Prospectus. It is important that you refer to that section for further details. Should the Sole Global Coordinator (for itself and on behalf of the Underwriters) terminate the Underwriting Agreement, the Placing will not proceed and will lapse. 21 December 2015

3 CHARACTERISTICS OF GEM GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investor should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspaper. Accordingly, prospective investors should note that they need to have access to the website of the Stock Exchange at in order to obtain up-to-date information on GEM listed issuers. i

4 EXPECTED TIMETABLE (1) (5) 2015 Price Determination Date (2)...Thursday, 24 December Announcement of the determination of the Placing Price and indication of the level of interest in the Placing to be published on the GEM website and the Company s website at on or before....monday, 28 December Allotment of the Placing Shares to placees (or their designated person(s)) on or before...monday, 28 December Deposit of share certificates for the Placing Shares into (3) (4) CCASS on or before...monday, 28 December Dealings in Shares on GEM expected to commence at 9:00 a.m. on....tuesday, 29 December Notes: (1) All times and dates refer to Hong Kong times and dates, except as otherwise stated. (2) The Price Determination Date, being the date on which the Placing Price is to be determined, is expected to be on or around Thursday, 24 December 2015 or such later date as may be agreed between the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company but in any event not later than Thursday, 24 December If the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company are unable to reach any agreement on the Placing Price by that date or such later date as may be agreed between the Sole Global Coordinator (for itself and on behalf of the Underwriters) and the Company, the Placing will not proceed and will lapse. (3) The share certificates are expected to be issued in the name of HKSCC Nominees Limited or in the name of the placee(s) or their agent(s) as designated by the Underwriters and/or the placing agents. The share certificates for the Placing Shares to be distributed via CCASS are expected to be deposited in CCASS on or before Monday, 28 December 2015 for credit to the relevant CCASS Participants or CCASS Investor Participants stock accounts designated by the Underwriters, the placees or their respective agents (as the case may be). No temporary documents or evidence of title will be issued by the Company. (4) All share certificates will only become valid certificates of title when the Placing has become unconditional in all respects and the Underwriting Agreement has not been terminated in accordance with its terms prior to 8:00 a.m. (Hong Kong time) on the Listing Date. If the Underwriting Agreement does not become unconditional or is terminated in accordance with the terms and conditions, the Placing will not proceed and we will make an announcement as soon as possible. No dealings in the Placing Shares should take place prior to the Listing Date. Investors who trade the Shares prior to such date shall do so entirely at their own risk. (5) A separate announcement will be issued if there is any change to the expected timetable. For details of the structure of the Placing, including the conditions thereof, please refer to Structure and Conditions of the Placing in this Prospectus. ii

5 CONTENTS IMPORTANT NOTICE TO INVESTORS This Prospectus is issued by the Company solely in connection with the Placing and does not constitute an offer to sell or a solicitation of an offer to subscribe for or buy any security other than the Placing Shares offered by this Prospectus pursuant to the Placing. This Prospectus may not be used for the purpose of, and does not constitute, an offer to sell or a solicitation of an offer in any other jurisdiction or in any other circumstances. No action has been taken to permit a placing of the Placing Shares or the distribution of this Prospectus in any jurisdiction other than Hong Kong. You should rely only on the information contained in this Prospectus to make your investment decision. The Company, the Sole Sponsor, the Sole Global Coordinator and the Underwriters have not authorized anyone to provide you with information that is different from what is contained in this Prospectus. Any information or representation not made in this Prospectus must not be relied on by you as having been authorized by the Company, the Sole Sponsor, the Sole Global Coordinator, the Underwriters, any of their respective directors, advisers, officers, employees, agents or representatives or any other person involved in the Placing. Page CHARACTERISTICS OF GEM... EXPECTED TIMETABLE.... CONTENTS... i ii iii SUMMARY AND HIGHLIGHTS... 1 DEFINITIONS GLOSSARY FORWARD-LOOKING STATEMENTS RISK FACTORS WAIVER FROM STRICT COMPLIANCE WITH THE GEM LISTING RULES INFORMATION ABOUT THIS PROSPECTUS AND THE PLACING DIRECTORS AND PARTIES INVOLVED IN THE PLACING iii

6 CONTENTS Page CORPORATE INFORMATION INDUSTRY OVERVIEW REGULATORY OVERVIEW HISTORY, DEVELOPMENT AND REORGANIZATION BUSINESS RELATIONSHIP WITH CONTROLLING SHAREHOLDERS DIRECTORS AND SENIOR MANAGEMENT SHARE CAPITAL SUBSTANTIAL SHAREHOLDERS FINANCIAL INFORMATION FUTURE PLANS AND USE OF PROCEEDS UNDERWRITING STRUCTURE AND CONDITIONS OF THE PLACING APPENDICES APPENDIX I ACCOUNTANTS REPORT... I-1 APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION... II-1 APPENDIX III PROPERTY VALUATION REPORT.... III-1 APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY AND CAYMAN ISLANDS COMPANY LAW... IV-1 APPENDIX V STATUTORY AND GENERAL INFORMATION... V-1 APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION... VI-1 iv

7 SUMMARY AND HIGHLIGHTS This summary aims to give you an overview of the information contained in this Prospectus. As this is a summary, it does not contain all of the information which may be important to you. You should read this Prospectus in its entirety before you decide to invest in the Placing Shares. There are risks associated with any investment. Some of the particular risks in investing in the Placing Shares are summarized in Risk Factors in this Prospectus. You should read that section carefully before you decide to invest in the Placing Shares. OVERVIEW We are engaged in the manufacture and sale of industrial coated products as well as design and assembly of coated glass production equipment. According to HCR, we were ranked tenth among China s manufacturers of Low-E glass, which is the primary product category of coated architectural glass, in terms of designed annual production capacity for the year ended 31 December We were also one of only seven manufacturers in China with the ability to design, assemble, build and sell complete sets of coated glass production lines as of 31 December Our proprietary coating technologies can be utilized for a wide variety of industrial products, including coated architectural glass and CTP module components. Our business model of offering a wide array of industrial coated products and coated glass production equipment is made possible by our broad range of capabilities. Our extensive industrial coating expertise and understanding of customers needs allow us not only to continuously refine our production process and coating techniques to develop high-quality coated glass products, but also enable us to upgrade our coated glass manufacturing equipment. Leveraging our extensive experience and know-how in industrial coating, we commenced commercial production of CTP module components for use in electronic devices in March 2014 and recorded our first sale of CTP module components in May Currently, Low-E glass is the primary coated architectural glass product in China due to its energy-efficiency. According to HCR, we had a market share in China of 2.7% for Low-E glass in terms of sales volume in Our Products During the Track Record Period, we focused on the production and sale of coated architectural glass products, coated glass production equipment, and CTP module components. Our CTP module components are the components of capacitive touch panel, or CTP, which is a component of a touch-screen display module that senses a touch on the surface of the display module by measuring a change in electrical capacitance of its surface. Our CTP module components are applied in various electronic devices, including mobile phones tablets, personal computers and industrial electronic devices. We commenced commercial production of CTP module components and offered such products in 2014, and thus experienced a change in the percentage contribution of our product mix to our revenue. For the six months ended 30 June 2015, the revenue from the sale of CTP module components was RMB31.9 million, representing 40.1% of our total revenue during the same period. The revenue from the sale of 1

8 SUMMARY AND HIGHLIGHTS coated architectural glass products declined from RMB66.5 million for the six months ended 30 June 2014 to RMB47.7 million for the six months ended 30 June The table below sets forth a breakdown of our revenue by segment for the periods indicated: Year ended 31 December Six months ended 30 June RMB 000 % RMB 000 % RMB 000 % RMB 000 % (Unaudited) Coated architectural glass , , , , Coated glass production equipment... 34, , CTP module components... 23, , , Total revenue , , , , The following table sets forth a breakdown of our gross profit and gross profit margin by segment for the periods indicated: Gross profit Year ended 31 December Six months ended 30 June Gross profit margin Gross profit Gross profit margin Gross profit Gross profit margin Gross profit Gross profit margin RMB 000 % RMB 000 % RMB 000 % RMB 000 % (Unaudited) Coated architectural glass , , , , Coated glass production equipment.. 12, , CTP module components , , Total gross profit/gross profit margin , , , , We procure float glass from third-party suppliers and process it into coated architectural glass and CTP module components. Our coated architectural glass products consist of three product categories, namely, unprocessed coated architectural glass comprising Low-E glass and solar control glass, tempered glass products and insulating Low-E glass units. As we do not manufacture float glass in our coated glass production line, our Low-E glass products are classified in the industry as offline Low-E glass. For the years ended 31 December 2013 and 2014 and the six months ended 30 June 2014 and 2015, our sales of Low-E glass accounted for approximately 74%, 88%, 92% and 70% of our sales of coated architectural glass, respectively. For the years ended 31 December 2013 and 2014 and the six months ended 30 June 2014 and 2015, the average selling price of our coated architectural glass was RMB30.2 per m 2, 2

9 SUMMARY AND HIGHLIGHTS RMB32.5 per m 2, RMB32.1 per m 2 and RMB25.3 per m 2, respectively. The average selling price of our coated architectural glass was lower than the average market price of similar products during the Track Record Period because, while having relatively low bargaining power as a new market player and maintaining our gross profit margin, we priced our products lower than the average market price in order to achieve market acceptance and brand recognition, as well as to compete more effectively. We produce or purchase and sell individual equipment and/or consumable materials for coated glass production on a per unit basis, or assemble together production equipment for sale as a complete production line. We sold one complete glass production line in each of the years ended 31 December 2013 and 2014, the selling price of which was RMB35.8 million and RMB35.0 million, respectively. We did not record sale of coated glass production equipment for the six months ended 30 June Our CTP module components include G+G CTP module components and OGS CTP module components, which we began to produce in March 2014 and December 2014, respectively. For the year ended 31 December 2014 and the six months ended 30 June 2015, the average selling price of our CTP module components was RMB23.3 per unit and RMB46.1 per unit, respectively. The increase in the average selling price was mainly due to the increase in the sales of OGS CTP module components. For further details, see Financial Information Management s Discussion and Analysis of Financial Condition and Results of Operations Period to Period Comparison of Results of Operations Six months ended 30 June 2015 compared with six months ended 30 June 2014 Turnover CTP module components on page 202 of this Prospectus. The table below sets forth data relating to our Low-E glass production line and CTP module components production line for the periods indicated: Year ended 31 December Six months ended 30 June m 2 /units, except for percentage Low-E glass production line Designed annual/semiannual production capacity (1)... 7,200 7,200 3,600 3,600 Production volume (2)... 5,031 4,840 2,408 2,190 Utilization rate (3) % 67.2% 66.9% 60.8% CTP module components production line (4) Designed annual/semiannual production capacity (5)... 3,500 1,750 1,750 Production volume... 1, Utilization rate (6) % (7) 28.1% 47.8% 3

10 SUMMARY AND HIGHLIGHTS Notes: (1) Designed annual production capacity was calculated based on 365 working days per year with 24 working hours per day. Designed semiannual production capacity was calculated by dividing the designed annual production capacity by two. (2) Such production volume represents the total production volume of unprocessed coated architectural glass, namely Low-E glass and solar control glass, as the Low-E glass production line can also be used to produce solar control glass. The production of solar control glass on Low-E glass production line will not materially affect the designed annual production capacity of the Low-E glass production line. (3) Utilization rate is calculated by dividing production volume for the year/period by designed annual/semiannual production capacity. (4) We commenced the assembly of our CTP module components production line in 2013 and commenced commercial production in March (5) Designed annual production capacity was calculated based on 350 working days per year with 16 working hours per day. Designed semiannual production capacity was calculated by dividing the designed annual production capacity by two. (6) Utilization rate is calculated by dividing production volume for the year/period by designed annual/semiannual production capacity. (7) Since we commenced commercial production of CTP module components in March 2014, we use the production capacity for ten months, which is 2,916,667 units, to calculate the utilization rate. Customers, Sales and Marketing For the years ended 31 December 2013 and 2014 and the six months ended 30 June 2015, we had approximately 230, 250 and 100 customers, respectively. The decrease in number of customers was mainly due to (i) the half-year operation up to 30 June 2015; and (ii) the decrease in number of customers in coated architectural glass segment corresponding to the decrease in the sale of coated architectural glass products during the six months ended 30 June During the Track Record Period, we sold our coated architectural glass products to customers located in China, including customers from Jiangsu, Shandong, Anhui, Fujian and Guangdong Provinces. During the Track Record Period, we sold coated glass production equipment to domestic PRC customers as well as to one customer from Indonesia. We sold CTP module components to customers in China and Hong Kong during the Track Record Period. We have maintained business relationships ranging from one to three years with our five largest customers during the Track Record Period. For the years ended 31 December 2013 and 2014 and the six months ended 30 June 2014 and 2015, sales to our five largest customers accounted for 61.7%, 60.2%, 59.4% and 57.8%, respectively, of our total revenue, and sales to our largest customer accounted for 18.2%, 23.3%, 16.8% and 19.4%, respectively, of our total revenue. We sell our coated architectural glass products, coated glass production equipment, and CTP module components directly to our customers through our sales and marketing department and do not engage distributors or agents. Our sales personnel maintain direct contact with our customers and conduct on-site visits as well as participate in exhibitions. 4

11 SUMMARY AND HIGHLIGHTS Suppliers The principal raw materials and components used in our production include: (i) float glass and target materials used to produce coated architectural glass; (ii) steel and electronic equipment used in the production of coated glass production equipment and assembly of complete sets of coated glass production lines; and (iii) ultra-thin glass sheets, a type of float glass, and electronic parts and components used to produce CTP module components. During the Track Record Period, our suppliers mainly included raw material suppliers, components suppliers and equipment suppliers, all of which were located in China. We have developed stable relationships with our key suppliers, with whom we have maintained business relationships ranging from one to three years. For the years ended 31 December 2013 and 2014 and the six months ended 30 June 2014 and 2015, purchases from our five largest suppliers in the amounts of RMB42.4 million, RMB75.6 million, RMB35.7 million and RMB38.8 million, respectively, accounted for 34.7%, 56.4%, 66.7% and 67.8%, respectively, of our cost of sales, and purchases from our largest supplier in the amounts of RMB17.8 million, RMB22.3 million, RMB11.1 million and RMB12.8 million, respectively, accounted for 14.5%, 16.6%, 20.7% and 22.4%, respectively, of our cost of sales. Existing Production Facilities and Expansion Plan As of the Latest Practicable Date, we had one operational production plant in Hongze Economic Development Zone, Huai an, Jiangsu, which housed one Low-E glass production line with a total designed annual production capacity of 7.2 million m 2 and one CTP module components production line with a total designed annual production capacity of 3.5 million units. In order to enhance our overall operating scale, we plan to build a new factory building at our current plant site in 2016, which will bring the total gross floor area of our factory space from 44,324.9 m 2 to 88,324.9 m 2. We also plan to add a new production line for on-cell CTP module components which will bring our total number of production lines from two to three. As of the Latest Practicable Date, we were in the process of developing and assembling such production line to expand into the new on-cell CTP market. We intend to fund our expansion plan using cash flow from operations, bank loans and the proceeds from the Placing. 5

12 SUMMARY AND HIGHLIGHTS The details of our expansion plan are set out below: Project Capital expenditure incurred Estimated capital expenditure to be incurred Total estimated capital expenditure Expected time to complete construction/ commence commercial production RMB 000 Construction of a new factory building... 33,880 33,880 July 2016 Assembly of production line for on-cell CTP module components with planned designed annual production capacity of 3.5 million units. 43,967 8,069 (1) 13,500 65,536 January 2017 Total estimated capital expenditure... 43,967 8,069 (1) 47,380 99,416 Note: (1) All had been incurred as of 31 August 2015 and no additional capital expenditure is expected to be incurred in Our Track Record We recorded growth during the Track Record Period. Our revenue increased from RMB168.2 million in 2013 to RMB196.2 million in 2014 mainly due to the introduction and sale of our CTP module components and an increase in revenue from the sale of coated glass production equipment. Our revenue increased from RMB72.2 million for the six months ended 30 June 2014 to RMB79.7 million for the six months ended 30 June 2015 primarily because of an increase in revenue from the sale of our CTP module components. Our gross profit increased from RMB45.8 million in 2013 to RMB62.1 million in Our gross profit increased from RMB18.7 million for the six months ended 30 June 2014 to RMB22.5 million for the six months ended 30 June Our profit for the year was RMB24.0 million and RMB33.2 million for the years ended 31 December 2013 and 2014, respectively. Our profit for the period was RMB3.5 million and RMB4.3 million for the six months ended 30 June 2014 and 2015, respectively. 6

13 SUMMARY AND HIGHLIGHTS OUR COMPETITIVE STRENGTHS We believe that the following principal strengths have contributed to our historical success: (i) we are able to offer a wide array of industrial coated products and coated glass production equipment; (ii) our strong research and development capabilities enable us to develop high-quality products; (iii) we continue to achieve operational efficiency and maintain high utilization rates; (iv) we are well positioned to benefit from favorable PRC government policies and market developments; and (v) we have a visionary and experienced management team. OUR BUSINESS STRATEGIES Our principal objective is to leverage our extensive experience and know-how in both the production of coated glass and the design, assembly and manufacture of coated glass production equipment, as well as to increase our profit in order to enhance our market position in China. We believe that the following strategies will enable us to leverage our strengths to capture future growth opportunities and enhance our competitiveness: (i) expand our scale of operations and strengthen our market leadership position; (ii) further enhance our research and development capabilities; (iii) penetrate the CTP market and extend the CTP production chain by optimizing our product mix; and (iv) expand our sales and marketing coverage by establishing a new branch and broadening our customer base. SUMMARY KEY FINANCIAL INFORMATION The summary historical data of financial information set forth below have been derived from the Accountants Report attached as Appendix I to this Prospectus and should be read in conjunction with our financial information included in Appendix I Accountants Report, including the accompanying notes and the information set forth in Financial Information on page 190 of this Prospectus. Our financial information was prepared in accordance with HKFRS. 7

14 SUMMARY AND HIGHLIGHTS Summary Consolidated Statements of Profit or Loss and Other Comprehensive Income Year ended 31 December Six months ended 30 June RMB 000 % RMB 000 % RMB 000 % RMB 000 % (Unaudited) Turnover , , , , Cost of sales... (122,365) (72.8) (134,112) (68.4) (53,472) (74.1) (57,156) (71.7) Gross profit... 45, , , , Other revenue , Distribution costs... (878) (0.5) (1,651) (0.8) (618) (0.9) (730) (0.9) Administrative expenses... (14,516) (8.6) (21,619) (11.0) (11,401) (15.8) (13,167) (16.5) Profit from operations... 30, , , , Finance costs... (2,577) (1.5) (4,335) (2.2) (2,214) (3.1) (3,482) (4.4) Profit before taxation... 28, , , , Income tax... (4,201) (2.5) (6,201) (3.2) (1,048) (1.5) (1,338) (1.7) Profit for the year/period... 23, , , , Other comprehensive income for the year/period Exchange differences on translation of financial statements of overseas companies... (24) 0.0 (25) 0.0 Total comprehensive income for the year/period... 23, , , , For more information, see Financial Information Management s Discussion and Analysis of Financial Condition and Results of Operations Description of Components of Results of Operations on page 196 of this Prospectus. 8

15 SUMMARY AND HIGHLIGHTS Summary Consolidated Statements of Financial Position As of 31 December As of 30 June RMB 000 RMB 000 RMB 000 Non-current assets , , ,853 Current assets , , ,075 Current liabilities.... (113,496) (142,285) (139,139) Net current (liabilities)/assets... (8,524) (3,859) 2,936 Net assets , , ,898 For more information, see Financial Information Management s Discussion and Analysis of Financial Condition and Results of Operations Net Current Liabilities and Financial Information Management s Discussion and Analysis of Financial Condition and Results of Operations Selected Items of the Consolidated Statements of Financial Position on page 212 and page 213 of this Prospectus. Summary Consolidated Cash Flow Statements Year ended 31 December Six months ended 30 June RMB 000 RMB 000 RMB 000 RMB 000 (Unaudited) Cash and cash equivalents at beginning of year/period.... 2,120 5,797 5,797 1,893 Net cash generated from/(used in) operating activities... 33,822 26,765 6,661 (16,024) Net cash used in investing activities.... (74,768) (64,859) (35,841) (4,831) Net cash generated from financing activities... 44,623 34,190 26,901 24,698 Net increase/(decrease) in cash and cash equivalents.... 3,677 (3,904) (2,279) 3,843 Cash and cash equivalents at end of year/period... 5,797 1,893 3,518 5,736 9

16 SUMMARY AND HIGHLIGHTS We had negative net operating cash flow of RMB16.0 million for the six months ended 30 June 2015 primarily due to: (i) a decrease in trade and other payables of RMB20.7 million mainly due to our subsequent settlement of some trade and other payables as of 31 December 2014; and (ii) an increase in inventories of RMB5.2 million mainly due to an increase in work-in-progress related to the building and assembly of a complete coated glass production line for a customer. For more information about our cash flows, see Financial Information Management s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Cash flows on page 209 of this Prospectus. Key Financial Ratios As of or for the year ended 31 December As of or for the six months ended 30 June % % % Gross profit margin (1) Net profit margin (2) Gearing ratio (3) Current ratio (4) Notes: (1) Gross profit margin is calculated based on gross profit of the relevant period divided by revenue of the respective period and multiplied by 100%. (2) Net profit margin is calculated based on net profit of the relevant period divided by revenue of the respective period and multiplied by 100%. (3) Gearing ratio is calculated based on total loans and borrowings divided by total equity as of the relevant period end and multiplied by 100%. (4) Current ratio is calculated based on total current assets divided by total current liabilities as of the relevant period end and multiplied by 100%. For more information, see Financial Information Major Financial Ratios on page 232 of this Prospectus. NET CURRENT LIABILITIES/ASSETS We had net current liabilities of RMB8.5 million and RMB3.9 million as of 31 December 2013 and 2014, respectively. Our net current liabilities positions as of 31 December 2013 and 2014 were mainly due to our rapid business expansion during the Track Record Period. We had loans and borrowings of RMB31.5 million and RMB56.0 million as of 31 December 2013 and 2014, respectively, to finance our operations and business expansion during the Track Record Period. We had net current assets of RMB2.9 million as of 30 June 2015, as compared to net current liabilities of RMB3.9 million as of 31 December 2014, primarily attributable to a decrease in trade and other payables of RMB23.0 million mainly because: (i) we settled some trade and other payables as of 31 December 2014; and (ii) we did not incur significant capital expenditures for the six months ended 30 June

17 SUMMARY AND HIGHLIGHTS As we are in the process of assembling a new CTP module components production line and plan to build a new factory building, we estimate the total investment to be approximately RMB99 million, of which RMB52.0 million had been invested as of 31 August 2015, and the remaining of which is expected to be financed by the proceeds from the Placing, loans and borrowings and cash flow from operations. Our Directors believe that the expansion plan would not create excessive financial burdens to our Group and would not have a material adverse impact on our business operations or liquidity position. CONTROLLING SHAREHOLDERS Immediately after completion of the Placing and Capitalization Issue (without taking into account any Shares that may be issued pursuant to the exercise of the Over-allotment Option or any options that may be granted under the Share Option Scheme), Sky Prosper will effectively hold 55.56% of the total issued share capital of the Company. Sky Prosper is held as to 80% by Ms. Wang and 20% by Fu Hong (which is held as to 100% by Ms. Wang). Sky Prosper and Ms. Wang will continue to control more than 30% of the issued share capital and will remain as Controlling Shareholders after the Placing and Capitalization Issue. For further details, please refer to Relationship with Controlling Shareholders on page 166 of this Prospectus. PRE-IPO INVESTMENT Pursuant to the share subscription agreement dated 25 February 2014 (the Share Subscription Agreement ), 250,000 Shares were issued and allotted to China Fund at the consideration of RMB37,500,000. Accordingly, the Company was owned as to 75% by Sky Prosper and 25% by China Fund after completion of the subscription of 250,000 Shares by China Fund. Pursuant to the Share Subscription Agreement, China Fund has the right to require Sky Prosper to purchase all the 250,000 Shares held by China Fund (the Put Option ) for the amount of consideration paid by China Fund plus an interest at the annual rate of 10% if the Listing does not take place within one year after the date of the Share Subscription Agreement. Based on a confirmation dated 29 June 2015, China Fund confirmed that it waived the Put Option and will not require Sky Prosper to purchase the 250,000 shares held by it and pay any relevant interest. China Fund will hold 18.52% of the Company upon the completion of the Placing and Capitalization Issue (without taking into account any Shares that may be issued pursuant to the exercise of the Over-allotment Option or any options that may be granted under the Share Option Scheme). Li & Partners, our legal adviser as to the laws of Hong Kong, is of the view that such confirmation does not constitute a new contract under the laws of Hong Kong. Save for the Put Option, China Fund does not have any other special rights under the Share Subscription Agreement. The Put Options will cease to have effect upon the Listing. For further details of the Pre-IPO investment of China Fund, please refer to History, Development and Reorganization Pre-IPO Investment on page 104 of this Prospectus. 11

18 SUMMARY AND HIGHLIGHTS RECENT DEVELOPMENT AND FLUCTUATIONS IN THE FINANCIAL PERFORMANCE FOR THE TEN MONTHS ENDED 31 OCTOBER 2015 Our revenue and gross profit for the ten months ended 31 October 2015 increased when compared to the ten months ended 31 October Such increase in revenue was mainly due to an increase in revenue from the sale of our CTP module components attributable to the increased orders of the same, despite a significant decrease in revenue from the sale of the coated architectural glass. The sales quantity of CTP module components significantly increased from 0.9 million units for the ten months ended 31 October 2014 to approximately 2.3 million units for the ten months ended 31 October The sales volume of the coated architectural glass slightly increased from 3.8 million m 2 for the ten months ended 31 October 2014 to 4.3 million m 2 for the same period in The average selling price of our coated architectural glass products for the ten months ended 31 October 2015 decreased by approximately 25.6% when compared to that for the ten months ended 31 October Notwithstanding such considerable decline in revenue from the sale of coated architectural glass for the ten months ended 31 October 2015 as compared to the same period in 2014, our Directors still have a positive outlook on our business as the addition of CTP module components to our product portfolio since March 2014 has enabled us to capture opportunities opened up by new products along with the development of the relevant market. Our gross profit for the ten months ended 31 October 2015 increased when compared to that for the ten months ended 31 October 2014, and our gross profit margin for the ten months ended 31 October 2015 decreased by approximately 3% when compared to that for the ten months ended 31 October 2014 mainly due to a substantial decrease in average selling price of coated architectural glass products. Our net current assets amounted to RMB15.6 million as of 31 October 2015, as compared to RMB2.9 million as of 30 June 2015, mainly because we recorded net profit attributable to our stable overall business growth, which led to an increase in inventories of: (i) work-in-progress related to the continuous building and assembly of a complete coated glass production line for a customer, which is expected to be delivered in the first quarter of 2016; and (ii) raw material held for the production of coated architectural glass products and CTP module components, while no significant capital expenditure was incurred. The average selling price of our coated architectural glass for the four months ended 31 October 2015 remained at a similar level to that for the six months ended 30 June The monthly sales volume of our coated architectural glass was approximately 0.4 million m 2 and 0.5 million m 2 for the six months ended 30 June 2015 and four months ended 31 October 2015, respectively. The average selling price and monthly sales volume of our coated architectural glass fluctuate from time to time according to market conditions and our negotiations with customers. 12

19 SUMMARY AND HIGHLIGHTS Despite that our business is expected to grow in the future, our Directors consider that our financial performance for the year ending 31 December 2015 will be materially and adversely affected by: (i) a decrease in gross profit margin mainly because the slowdown of the PRC macro economy has caused downstream demand for our product to decrease and competition in our industry to intensify in 2015; (ii) the listing expenses to a material extent as disclosed on page 241 of this Prospectus; (iii) an increase in finance costs due to an increase in bank loans to finance our plan to enter into the on-cell CTP market and for general working capital purposes; and (iv) a decrease in revenue from the sales of coated glass production equipment due to the delay in delivery of a complete coated glass production line to a customer in the first quarter of 2016, which should be originally delivered in December Our Directors confirmed that, up to the date of this Prospectus, save as disclosed above and as disclosed in Business Compliance, Legal Proceedings and Internal Control Legal Proceedings on page 163 of this Prospectus, there has been no material adverse change in our financial or trading position, indebtedness, mortgage, contingent liabilities, guarantees or prospects since 30 June 2015, being the date of our latest audited financial statements. NON-COMPLIANCE MATTERS Except for the non-compliance incidents disclosed below, we are advised by our PRC Legal Advisers that, during the Track Record Period and up to the Latest Practicable Date, we had complied with relevant PRC laws and regulations in all material respects. We commenced the sale of architectural tempered glass products and insulating glass units prior to obtaining the CCC certificates, which are mandatory; We did not contribute to the social insurance for all of our eligible employees and did not make full social insurance contributions based on such eligible employees actual income before June 2015; and We did not set up housing provident fund accounts and contribute to the housing provident fund for all of our eligible employees before June For further information regarding the above non-compliance incidents, please see Business Compliance, Legal Proceedings and Internal Control Compliance on page 159 of this Prospectus. 13

20 SUMMARY AND HIGHLIGHTS PLACING STATISTICS The statistics in the following table are based on the assumptions that: (i) the Placing is completed and 210,000,000 Shares are issued and sold in the Placing; (ii) the Over-allotment Option is not exercised; and (iii) 810,000,000 Shares are issued and outstanding upon completion of the Placing. Based on an Placing Price of HK$0.50 per Share Based on an Placing Price of HK$0.54 per Share HK$405.0 million HK$437.4 million Market capitalization of our Shares.... Unaudited pro forma adjusted consolidated net tangible assets to our equity Shareholders per Share (1)... HK$0.40 HK$0.41 Note: (1) The unaudited pro forma adjusted consolidated net tangible assets to our equity Shareholders per Share is calculated after making the adjustments referred to in Appendix II Unaudited Pro Forma Financial Information. 14

21 SUMMARY AND HIGHLIGHTS USE OF PROCEEDS The net proceeds from the Placing, after deducting underwriting fees and commission and other estimated expenses in connection with the Placing, are estimated to amount to approximately HK$93.2 million (assuming a Placing Price of HK$0.52 per Share, being the mid-point of the indicative Placing Price range and assuming the Over-allotment Option is not exercised). We presently intend to apply such net proceeds of the Placing as follows: Upon Listing to 31 December 2015 For the six months ending 30 June 2016 For the six months ending 31 December 2016 For the six months ending 30 June 2017 For the six months ending 31 December 2017 Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Approximate %ofnet proceeds Expand our scale of operations and penetrate CTP market. 2,536 57,530 2,535 62, Enhance our research and development capability. 5,447 4, , Expand our sales and marketing coverage ,967 1,065 2,155 1,268 7,607 8 Others ,169 3,803 4 Total ,688 65,944 8,608 2,409 4,690 84, The remaining HK$8.9 million will be used as our working capital and other general corporate purpose. For more details, see Future Plans and Use of Proceeds on page 243 of this Prospectus. DIVIDEND POLICY We have not declared or paid any dividends since our incorporation. Declaration of dividends is subject to the discretion of our Directors, depending on our results of operations, working capital, financial position, future prospects, and capital requirements, as well as any other factors which our Directors may consider relevant. In addition, any declaration and payment as well as the amount of dividend will be subject to the constitutional documents of the Company and the Cayman Islands company law. Any future declarations and payments of dividends may or may not reflect the historical declarations. Future dividend payments will also depend upon the availability of dividends received from our PRC operating subsidiary. Under applicable PRC laws, our subsidiary in the PRC may only distribute after-tax profits after it has made (i) allocations or allowances for recovery of accumulated losses, (ii) allocations to the statutory reserves and (iii) possible allocation to the discretionary reserves. 15

22 SUMMARY AND HIGHLIGHTS Currently, we do not have any dividend policy or intention to declare or pay any dividends in the near future. We do not have any predetermined dividend payout ratio. Going forward, we will evaluate our future dividend policy in light of our financial position, the prevailing economic environment and other factors which our Directors deem relevant. LISTING EXPENSES The total amount of listing expenses that will be borne by us in connection with the Placing, including underwriting commission, is estimated to be HK$26.2 million (based on the mid-point of our indicative price range for the Placing), of which HK$8.8 million is expected to be accounted for as a deduction from equity in accordance with the relevant accounting standards. The remaining fees and expenses of HK$17.4 million were or are expected to be charged to our consolidated statements of profit or loss, of which HK$8.2 million and HK$4.6 million was charged up to 31 December 2014 and during the six months ended 30 June 2015, respectively, and HK$4.6 million is expected to be charged upon Listing. The professional fees and/or other expenses related to the preparation of Listing subsequent to 30 June 2015 are the current estimate for reference only and the actual amount to be recognized is subject to adjustment based on audit and the then changes in variables and assumptions. Our financial performance for the year ending 31 December 2015 is expected to be adversely affected by the listing expenses to be charged to our consolidated statements of profit or loss in 2015 to a material extent. RISK FACTORS Our operations involve certain risks, some of which are beyond our control. These risks can be broadly categorized into: (i) risks relating to our business and industry; (ii) risks relating to doing business in China; and (iii) risks relating to the Placing. Some of the risks generally associated with our business and industry include the following: We have a limited operating history which makes it difficult to evaluate our business and growth prospects. We have a limited track record of manufacturing and selling CTP module components, and as such, our plan to further expand into the CTP market may not be successful. We had negative net operating cash flow for the six months ended 30 June 2015, and we may have difficulty meeting our payment obligations if we continue to record net operating cash outflows in the future. We may not be able to keep up with changes in market needs or technological development in the industry in which we conduct business in a timely manner, and our efforts in new product development may not be successful. 16

23 SUMMARY AND HIGHLIGHTS We had net current liabilities as of 31 December 2013 and If we fail to maintain our product quality, our business, brand and reputation could be materially and adversely affected. Demand for our coated architectural glass products is highly dependent on the PRC real estate market, which could be materially and adversely affected by the PRC macro economy and other conditions. A decline in demand for, or a decrease in the average selling prices of, our products would materially and adversely affect our business and results of operations. These risks are not the only significant risks that may affect the value of our Shares. You should carefully consider all of the information set forth in this Prospectus and, in particular, should evaluate the specific risks set forth in Risk Factors on page 33 of this Prospectus in deciding whether to invest in our Shares. 17

24 DEFINITIONS Unless the context otherwise requires, the following expressions have the following meanings in this Prospectus. Accountants Report Articles of Association or Articles associate(s) Board or Board of Directors Business Day BVI CAGR our accountants report set out in Appendix I to this Prospectus the amended and restated articles of association of the Company adopted on 15 December 2015 with effect from the Listing Date and as amended from time to time has the meaning ascribed to it under the GEM Listing Rules the board of Directors has the meaning ascribed to it under the GEM Listing Rules the British Virgin Islands compound annual growth rate Capitalization Issue the issue of new Shares to be made upon the capitalization of certain sums standing to the credit of the share premium account of the Company referred to Appendix V Statutory and General Information Information about the Company 3. Resolutions in Writing of the Shareholders Passed on 15 December 2015 to this Prospectus CCASS CCASS Clearing Participant CCASS Custodian Participant CCASS Investor Participant the Central Clearing and Settlement System established and operated by HKSCC a person admitted to participate in CCASS as a direct clearing participant or general clearing participant a person admitted to participate in CCASS as a custodian participant a person admitted to participate in CCASS as an investor participant who may be an individual or joint individuals or a corporation 18