History and Corporate Structure

THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

HISTORY AND CORPORATE STRUCTURE

OUR HISTORY AND DEVELOPMENT

Our history can be traced back to 1998 when Mr. Lao, our founder, together with two Independent Third Parties, namely Mr. Su Dehui and Mr. Tang Zengshu, incorporated SFS Construction Macau, our operating subsidiary, to provide structural works and fitting-out works services in Macau. In 2003, Mr. Su Dehui and Mr. Tang Zengshu transferred all their respective shareholding in SFS Construction Macau to Mrs. Lao, the spouse of Mr. Lao. Mr. Lao is also our Chairman, executive Director and Controlling Shareholder. Please refer to the section headed “Directors, Senior Management and Employees — Directors and senior management — Executive Directors” in this document for Mr. Lao’s background.

Soon after the incorporation of SFS Construction Macau, SFS Construction Macau was awarded with its first major project with regard to the roof works of government building in Macau which was completed in 1999.

In 2001, Macau had opened up its locally-controlled casino industry to foreign competition and Macau was transformed into one of the world’s largest gaming centres. As a result, Macau’s economy experienced a rapid expansion, a number of large-scale construction projects such as hotels, casinos, commercial development and major infrastructures were envisaged and subsequently realised. After completion of roof works of government building, our Group had participated in various construction projects in the private sector. One of our important projects was to provide structural works for a hotel and casino located at Avenida de Lisboa, Macau, which we acted as one of the major subcontractors and used “top-down construction method” in the construction process so that the high-rise superstructure works and the substructure works could be carried out at the same time. The project was completed in 2008. Our Group also has been awarded with more construction contracts in Macau, such as a hotel located at Santo Anto´nio, Macau in 2006 and the department store located at Avenida Comercial de Macau in 2007. Such projects involved various construction works, including structural works and fitting-out works. In 2009, our Group completed the interior fitting-out works of a hotel and casino in Cotai, Macau. Over the years, our Group has undertaken various construction works in Macau, including structural works for hotels, department store and residential properties, and fitting-out works for the entertainment facilities, restaurants, commercial buildings, various hotels and casinos. Please refer to the paragraph headed “Key business milestones” in this section for our other projects.

With an increase in the construction of new hotels and casinos during 2013 and 2014, Our Group had participated in various structural works and fitting-out works for certain high-end hotels and casinos. In 2013 and 2014, we had been awarded with four large-scale structural works contracts for the hotels and casinos in Cotai, Macau. These four structural works projects which contributed to our revenue approximately MOP408.2 million, MOP161.0 million, MOP126.7 million and MOP11.4 million during the years ended 31 December 2014, 2015, 2016 and 2017 respectively, had taken up most of the capacity of our Group till the end of 2015. As a number of sizeable hotel and casino structural projects reaching final stage during the period 2015 to 2016 and moving to the next phase of construction, we carried on more fitting-out works to capture the industry demand. Our Group had over eight on-going fitting-out works projects for hotels and casinos, for each of the years ended 31 December 2014, 2015, 2016 and 2017, respectively.

—72— THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

HISTORY AND CORPORATE STRUCTURE

KEY BUSINESS MILESTONES

Set out below are the key business milestones of our Group since our establishment:

Year Milestones

1998 — SFS Construction Macau was incorporated in Macau as a limited liability company and commenced business in providing structural works and fitting-out works services in Macau.

1999 — We completed the roof works of the government building.

2006 — We completed the basement, foundation works and structural works of a property that combined residential, hotel and shopping malls together in Macau.

2008 — We completed the superstructure works and foundation works of a hotel-casino complex located at Santo Antonio, Macau.

— We completed the convergence works of pedestrian tunnel between two hotels and the structural works of the hotel located at Avenida de Lisboa, Macau.

2009 — We completed the interior fitting-out works of a hotel and casino in Cotai, Macau.

2010 — We completed the construction works of a luxurious residential building in Macau. This was the first residential project undertaken by our Group.

2011 — SFS Construction Hong Kong was incorporated in Hong Kong as a limited liability company.

— We completed the basement and superstructure works of a department store in Avenida Comercial de Macau in Macau.

— We completed the foundation works of a public housing construction project in Macau.

— SFS BVI was incorporated in the BVI with limited liability.

2014 — ISO 9001: 2008 (this standard has been revised by ISO 9001: 2015) certification of quality management system in respect of structural works and fitting-out works projects was first accredited to our Group by Hong Kong Quality Assurance Agency.

— We completed five construction projects, including fitting-out works for restaurants in a hotel in Cotai, Macau.

2015 — We completed four construction projects, including structural works of car park area in a hotel in Cotai, Macau.

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HISTORY AND CORPORATE STRUCTURE

2016 — We completed 10 construction projects, including structural works and fitting-out works for a residential property in Taipa, Macau, and the superstructure works regarding transfer plate in a hotel in Cotai, Macau.

2017 — We completed eight construction projects.

— Our Group has been accredited with (i) ISO 9001: 2015 certification of quality management system (construction of buildings and fitting-out works), (ii) ISO 14001: 2015 certification of environmental management system (construction of buildings and fitting-out works) and (iii) OHSAS 18001: 2007 certification of occupational health and safety management system (construction of buildings and fitting-out works).

CORPORATE HISTORY

Our Company was incorporated in the Cayman Islands on 23 February 2017 as an exempted company with limited liability under the Companies Law in anticipation of the [REDACTED]. As at the Latest Practicable Date, our Group comprises our Company, SFS BVI, SFS Construction Macau, SFS Construction Hong Kong. The following is a brief corporate history of the establishment and major changes in the shareholdings of the subsidiaries of our Group.

SFS BVI

SFS BVI was incorporated in the BVI with limited liability on 4 August 2011. SFS BVI is authorised to issue a maximum of 50,000 shares of a single class US$1.00 par value each, of which seven shares and three shares of US$1.00 each were allotted and issued to Laos International and WHM Holdings, respectively. Upon completion of the said issue and allotment, SFS BVI was owned as to 70% by Laos International and 30% by WHM Holdings.

As part of the Reorganisation, SFS BVI became a direct wholly-owned subsidiary of our Company. Please refer to the paragraph headed “Reorganisation” in this section for further details.

SFS BVI is an investment holding company. It had not carried out any business activities since its incorporation.

SFS Construction Macau

SFS Construction Macau was incorporated in Macau as a limited liability company by quotas on 5 July 1998 with an initial share capital of MOP100,000. As at the date of incorporation, SFS Construction Macau was owned as to 50% by Mr. Lao, 25% by Mr. Su Dehui, and 25% by Mr. Tang Zengshu. Each of Mr. Su Dehui and Mr. Tang Zengshu is an Independent Third Party.

On 24 October 2003, Mr. Su Dehui and Mr. Tang Zengshu transferred all their interests in SFS Construction Macau to Mrs. Lao at MOP25,000 each and the consideration was determined by reference to the nominal value of their respective shares. Immediately after the said share transfer, SFS Construction Macau was owned as to 50% by Mr. Lao and 50% by Mrs. Lao.

—74— THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

HISTORY AND CORPORATE STRUCTURE

On 22 April 2010, Mr. Lao and Mrs. Lao transferred all their interests to San Fong Seng Holdings Limited at the nominal value of their respective shares. Immediately after the said share transfer, SFS Construction Macau was wholly owned by San Fong Seng Holdings Limited, a limited liability company owned as to 70% by Laos International and 30% by WHM Holdings.

On 9 August 2010, the share capital of SFS Construction Macau was increased from MOP100,000 to MOP12,000,000.

On 26 August 2011, San Fong Seng Holdings Limited transferred all its shares in the nominal value of MOP12,000,000, representing the entire share capital of SFS Construction Macau, to SFS BVI at the consideration of MOP12,000,000. Immediately after the said share transfer, SFS Construction Macau became a direct wholly-owned subsidiary of SFS BVI.

SFS Construction Macau commenced business in July 1998 and currently provides construction works services.

SFS Construction Hong Kong

SFS Construction Hong Kong was incorporated in Hong Kong as a limited liability company on 18 March 2011 with an authorised share capital of HK$10,000 divided into 10,000 shares of HK$1.00 each. As at the date of incorporation, SFS Construction Hong Kong allotted and issued one share of SFS Construction Hong Kong at par to SFS Construction Macau. Upon completion of the said issue and allotment, SFS Construction Hong Kong was wholly owned by SFS Construction Macau.

SFS Construction Hong Kong had not carried out any business operations since its incorporation.

REORGANISATION

In preparation for the [REDACTED], we underwent the Reorganisation which involved the following main steps:

(1) Disposal of Jiangmen Jinying

Jiangmen Jinying was established in the PRC on 11 April 2011 as a joint venture company, which was owned as to 60% by SFS Construction Macau and 40% by an Independent Third Party. The principal business of Jiangmen Jinying is the provision of construction works in the PRC. Although SFS Construction Macau owned 60% equity interest in Jiangmen Jinying, in accordance with the joint venture agreement and the articles of Jiangmen Jinying, all the decisions of the board could only be made with unanimous consent of both SFS Construction Macau and its joint venture partner. Having considered that the day-to-day operation of Jiangmen Jinying was mainly managed by the joint venture partner and our Group had no absolute control over the jointly-owned entity, we decided to dispose Jiangmen Jinying.

—75— THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

HISTORY AND CORPORATE STRUCTURE

On 22 November 2016, SFS Construction Macau entered into an equity transfer agreement with New Kingdom, pursuant to which SFS Construction Macau disposed of its entire interest in Jiangmen Jinying (representing 60% equity interest in Jiangmen Jinying) to New Kingdom, at a consideration of RMB6,000,000, being the paid-up registered capital of Jiangmen Jinying contributed by SFS Construction Macau. The consideration for the above transfer was determined with reference to the paid-up capital of Jiangmen Jinying and was properly and legally completed and settled on 7 December 2016. On the same day, the relevant Administration for Industry and Commerce of the PRC registered the above transfer. Our Directors confirm that Jiangmen Jinying was not involved in any material non-compliance from the commencement of the Track Record Period up to the date of its disposal, and it was the jointly-owned entity of SFS Construction Macau before the Reorganisation.

Upon completion of the above transfer, Jiangmen Jinying ceased to be a jointly-owned entity of our Group.

(2) Disposal of New Generation and SKS Federal Construction

In order to streamline the corporate structure of our Group, SFS Construction Macau entered into a sale and purchase agreement on 30 December 2016 with Red Development, pursuant to which SFS Construction Macau transferred its 98% interest in New Generation to Red Development at a consideration of MOP49,000. The said consideration for the transfer was determined with reference to the respective nominal value of the shares of New Generation and was properly and legally completed and settled on 30 December 2016. On 13 April 2017, Ms. Vicki Lao transferred her 2% interest in New Generation to New Kingdom at a consideration of MOP1,000. Red Development was owned as to 2% by Ms. Vicki Lao and 98% by SFS Real Estate Holdings Limited, which was in turn owned as to 70% by Laos International and 30% by WHM Holdings. The consideration for the above transfer was determined with reference to the nominal value of the quotas of New Generation and was properly and legally completed and settled on 19 April 2017. Both New Generation and its subsidiary, SKS Federal Construction, had not commenced any business operation since their respective incorporation. Our Directors confirm that New Generation and SKS Federal Construction were not involved in any material non-compliance incidents from the commencement of the Track Record Period up to the date of its disposal.

Upon completion of the above transfers, New Generation and its subsidiary, SKS Federal Construction, ceased to be the subsidiaries of our Group.

(3) Incorporation of our Company

On 23 February 2017, our Company was incorporated in the Cayman Islands as an exempted company with limited liability with an authorised share capital of HK$380,000 divided into 38,000,000 Shares of HK$0.01 each. On the date of incorporation, one Share was issued to the subscriber, which was subsequently transferred to Laos International. On the same day, 6,999 nil-paid Shares and 3,000 nil-paid Shares were allotted to Laos International and WHM Holdings, respectively. Upon completion of the above issue and allotment, our Company was owned as to 70% by Laos International and 30% by WHM Holdings.

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HISTORY AND CORPORATE STRUCTURE

(4) Acquisition of SFS BVI by our Company

On 15 September 2017, our Company entered into a sale and purchase agreement with Laos International and WHM Holdings, pursuant to which our Company acquired seven and three shares of SFS BVI from Laos International and WHM Holdings, respectively, representing the entire issued shares of SFS BVI. The consideration for the said acquisitions was satisfied by (i) crediting as fully paid at par the 7,000 nil-paid Shares held by Laos International and the 3,000 nil-paid Shares held by WHM Holdings; and (ii) the further allotment and issue of, credited as fully paid, 7,000 Shares to Laos International and 3,000 Shares to WHM Holdings. Upon completion of the above transfer, SFS BVI became a direct wholly-owned subsidiary of our Company.

(5) Increase in authorised share capital of our Company

Pursuant to the written resolutions of our Shareholders passed on [●], the authorised share capital of our Company was increased from HK$380,000 to HK$100,000,000 divided into 10,000,000,000 Shares by the creation of an additional 9,962,000,000 Shares.

(6) Capitalisation Issue and [REDACTED]

Conditional on the share premium account of our Company being credited as a result of the [REDACTED], the Directors will be authorised to capitalise the amount of HK$[REDACTED] standing to the credit of the share premium account of by applying such sums towards payment in full at par a total of [REDACTED] Shares to be allotted and issued to the Shareholders whose names are on the register of members prior to the [REDACTED] pro rata to their then existing shareholding in our Company.

Our Company will [REDACTED] [REDACTED] Shares under the [REDACTED] for subscription by the public and professional, institutional and other investors, representing a total of [REDACTED]% of the enlarged issued capital of our Company upon [REDACTED].

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HISTORY AND CORPORATE STRUCTURE

THE CORPORATE STRUCTURE

Set out below is the corporate and approximate shareholding structure of our Group immediately before the Reorganisation:

Mr. Lao Mrs. Lao

100% 100%

Laos International WHM Holdings (BVI) (BVI)

70% 30%

SFS BVI (BVI)

100%

SFS Construction Macau (Macau) Ms. Vicki Lao

60% 100% 98% 2%

(Note 1) Jiangmen Jinying SFS Construction Hong Kong New Generation (PRC) (Hong Kong) (Macau)

51%

SKS Federal Construction (Note 2) (Macau)

Notes:

1. Jiangmen Jinying was owned as to 60% by SFS Construction Macau and 40% by an Independent Third Party.

2. SKS Federal Construction was owned as to 51% by New Generation and 49% by an Independent Third Party.

—78— THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

HISTORY AND CORPORATE STRUCTURE

Set out below is the corporate and approximate shareholding structure of our Group immediately after the Reorganisation but before completion of the [REDACTED] and the Capitalisation Issue:

Mr. Lao Mrs. Lao

100% 100%

Laos International WHM Holdings (BVI) (BVI)

70% 30%

Our Company (Cayman Islands)

100%

SFS BVI (BVI)

100%

SFS Construction Macau (Macau)

100%

SFS Construction Hong Kong (Hong Kong)

—79— THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT.

HISTORY AND CORPORATE STRUCTURE

Set out below is the corporate and approximate shareholding structure immediately following the completion of the [REDACTED] and the Capitalisation Issue, taking no account of any Shares that may be issued pursuant to the exercise of any options which may be granted under the Share Option Scheme:

Mr. Lao Mrs. Lao

100% 100%

Laos International WHM Holdings The Public (BVI) (BVI)

[REDACTED]% [REDACTED]% [REDACTED]%

Our Company (Cayman Islands)

100%

SFS BVI (BVI)

100%

SFS Construction Macau (Macau)

100%

SFS Construction Hong Kong (Hong Kong)

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